10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-36804

Patriot National, Inc.

(Exact name of registrant as specified in its charter)

Delaware	46-4151376
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

401 East Las Olas Boulevard, Suite 1650

Fort Lauderdale, Florida 33301

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (954) 670-2900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  x   No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  x   No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ¨   No  x

The number of shares of the registrant’s common stock outstanding on May 13, 2015 was 26,390,397.

PATRIOT NATIONAL, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page No.
	PART I—Financial Information
Item 1.	Financial Statements.	1
	Combined Balance Sheets as of March 31, 2015 (Unaudited) and December 31, 2014	1
	Combined Statements of Operations (Unaudited) for the three months ended March 31, 2015 and March 31, 2014	2
	Combined Statements of Cash Flows (Unaudited) for the three months ended March 31, 2015 and March 31, 2014	3
	Combined Statements of Stockholders’ Equity (Deficit) (Unaudited) for the three months ended March 31, 2015 and March 31, 2014	4
	Notes to Combined Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33
	PART II — Other Information
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
SIGNATURES		37

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PATRIOT NATIONAL, INC.

Combined Balance Sheets

(In thousands)

	March 31, 2015			December 31, 2014
	(Unaudited)
Assets
Current Assets
Cash	$	11,305		$	4,251
Restricted cash		14,019			6,923
Fee income receivable		3,551			1,942
Fee income receivable from related party		13,740			11,988
Net receivable from related parties		—			1,773
Deferred costs for initial public offering		—			2,682
Income taxes receivable		3,400			—
Other current assets		1,036			430
Total current assets		47,051			29,989
Fixed assets, net of depreciation		1,716			1,879
Deferred loan fees		1,066			5,911
Goodwill		67,084			61,493
Intangible assets		41,919			32,988
Other long term assets		10,580			9,842
Total Assets	$	169,416		$	142,102
Liabilities and Equity (Deficit)
Liabilities
Deferred claims administration services income	$	8,305		$	8,515
Net advanced claims reimbursements		7,428			6,803
Net payables to related parties		64			—
Income taxes payable		—			11,548
Accounts payable, accrued expenses and other liabilities		36,079			15,027
Revolver borrowings outstanding		4,750			—
Current portion of notes payable		2,000			15,782
Current portion of capital lease obligation		2,354			2,332
Total current liabilities		60,980			60,007
Notes payable		38,000			95,039
Capital lease obligation		1,633			2,438
Warrant redemption liability		—			12,879
Total Liabilities		100,613			170,363
Equity (Deficit)
Preferred stock, $.001 par value; 100,000 shares authorized, no shares issued    and outstanding as of March 31, 2015 and December 31, 2014		—			—
Common stock, $.001 par value; 1,000,000 shares authorized, 26,390    and 18,075 shares issued and outstanding as of March 31, 2015 and    December 31, 2014, respectively		21			14
Additional paid in capital		101,858			—
Accumulated deficit		(32,746	)		(27,930	)
Total Patriot National, Inc. Stockholders' Equity (Deficit)		69,133			(27,916	)
Less Non-controlling interest		(330	)		(345	)
Total Equity (Deficit)		68,803			(28,261	)
Total Liabilities and Equity (Deficit)	$	169,416		$	142,102

See accompanying notes to financial statements.

1

PATRIOT NATIONAL, INC.

Combined Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2015			2014
Revenues
Fee income	$	18,369		$	13,085
Fee income from related party		24,623			2,514
Total fee income and fee income from related party		42,992			15,599
Net investment income		1			209
Total Revenues		42,993			15,808
Expenses
Salaries and related expenses		14,468			3,901
Commission expense		8,889			1,722
Management fees to related party for administrative support services		—			2,187
Outsourced services		2,462			658
Allocation of marketing, underwriting and policy issuance costs from    related party		—			610
Other operating expenses		6,331			1,630
Acquisition costs		604			—
Interest expense		1,173			1,313
Depreciation and amortization		2,303			1,006
Amortization of loan discounts and loan costs		85			321
Stock compensation expense		2,535			—
Decrease in fair value of warrant redemption liability		(1,385	)		—
Costs from debt payoff (1)		13,681			—
Total Expenses		51,146			13,348
Net (Loss) Income before income tax expense		(8,153	)		2,460
Income tax (benefit) expense		(3,352	)		937
Net (Loss) Income Including Non-Controlling Interest in Subsidiary		(4,801	)		1,523
Net Income attributable to non-controlling interest in subsidiary		15			21
Net (Loss) Income	$	(4,816	)	$	1,502
Earnings (Loss) Per Common Share
Basic	$	(0.19	)	$	0.11
Diluted		(0.19	)		0.10
Weighted Average Common Shares Outstanding
Basic		25,163			14,288
Diluted		25,163			15,499

(1) Costs from debt payoff include $4.3 million early payment penalties on repayment of debt and $9.3 million write-off of related deferred financing fees and original issue discounts.

See accompanying notes to financial statements.

2

PATRIOT NATIONAL, INC.

Combined Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2015			2014
Operating Activities
Net (Loss) Income	$	(4,801	)	$	1,523
Adjustments to reconcile net (loss) income to net cash from operating activities:
Net (Income) attributable to business generated by GUI,    exclusive of depreciation expense		—			(1,276	)
Depreciation and amortization		2,303			1,006
Amortization of loan discounts and loan costs		85			321
Decrease in fair value of warrant redemption liability		(1,385	)		—
Stock compensation expense		2,535			—
Write-off of deferred financing and original issue discounts		9,342			—
Provision for uncollectible fee income		150			—
Changes in certain assets and liabilities:
Decrease (increase) in:
Fee income receivable		(521	)		(1,042	)
Fee income receivable from related party		(1,752	)		693
Other current assets		(592	)		(55	)
Increase (decrease) in:
Net payable to related parties		1,747			1,136
Deferred claims administration services income		(210	)		283
Net advanced claims reimbursements		625			313
Income taxes payable		(14,948	)		274
Accounts payable and accrued expenses		8,359			(469	)
Net Cash Provided by Operating Activities		937			2,707
Investment Activities:
Net increase in restricted cash		(4,854	)		(269	)
Net increase in note receivable from related party		—			(209	)
Purchase of fixed assets and other long-term assets		(1,429	)		(135	)
Acquisitions, net of $73 cash acquired		(6,681	)		—
Net Cash Used in Investment Activities		(12,964	)		(613	)
Financing Activities:
Proceeds from initial public offering, net		98,275			—
Proceeds from senior secured term loan, net of fees		38,891			—
Payment of costs for initial public offering		(2,479	)		—
Revolver facility borrowings		4,750			—
Repayment of note payable		(119,573	)		(2,100	)
Repayment of capital lease obligation		(783	)		—
Net Cash Provided by (Used in) Financing Activities		19,081			(2,100	)
Increase (decrease) in cash		7,054			(6	)
Cash, beginning of period		4,251			1,661
Cash, end of period	$	11,305		$	1,655

See accompanying notes to financial statements.

3

PATRIOT NATIONAL, INC.

Combined Statements of Stockholders’ Equity (Deficit)

(In thousands)

(Unaudited)

	Patriot National, Inc. Stockholders' Equity
	Common Stock				Additional paid In		Accumulated			Non-Controlling			Total Equity
	Shares		Amount		Capital		Deficit			Interest			(Deficit)
Balance, January 1, 2015		18,075	$	14	$	—	$	(27,930	)	$	(345	)	$	(28,261	)
Issuance of common stock		7,350		7		97,824		—			—			97,831
Exercise of detachable common stock warrants		965		—		—		—			—			—
Stock compensation		—		—		2,535		—			—			2,535
Contribution of warrant redemption liability		—		—		1,499		—			—			1,499
Balance before Net Loss		26,390		21		101,858		(27,930	)		(345	)		73,604
Net Loss		—		—		—		(4,816	)		15			(4,801	)
Balance, March 31, 2015		26,390	$	21	$	101,858	$	(32,746	)	$	(330	)	$	68,803

See accompanying notes to financial statements.

4

PATRIOT NATIONAL, INC.

NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS

1. Description of Business and Basis of Presentation

Description of Business

Patriot National, Inc. (“Patriot National” or “the Company”) is a national provider of comprehensive outsourcing solutions within the workers’ compensation marketplace for insurance companies, employers, local governments and reinsurance captives. We offer an end-to-end portfolio of services to increase business production, contain costs and reduce claims experience for our clients. We leverage our strong distribution relationships, proprietary business processes, advanced technology infrastructure and management expertise to deliver valuable solutions to our clients. We strive to deliver these value-added services to our clients in order to help them navigate the workers’ compensation landscape, ensure compliance with state regulations, handle all aspects of the claims process and ultimately contain costs.

The Company offers two types of services: brokerage, underwriting and policyholder services (or our “brokerage and policyholder services”) and claims administration services (or our “claims administration services”).

We generate fee income for our services from our clients based on (1) a percentage of premiums for the policies we service, (2) the cost savings we achieve for our clients or (3) a fixed fee for a particular service. Unlike our insurance and reinsurance carrier clients, we do not generate underwriting income or assume underwriting risk on workers’ compensation plans. Patriot National is headquartered in Ft. Lauderdale, Florida.

Basis of Presentation

The accompanying unaudited combined financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to such rules and regulations. The unaudited combined financial statements included herein are, in the opinion of management, prepared on a basis consistent with our audited combined financial statements for the year ended December 31, 2014 and include all normal recurring adjustments necessary for a fair presentation of the information set forth. The quarterly results of operations are not necessarily indicative of the results of operations to be reported for subsequent quarters or the full year. These unaudited combined financial statements should be read in conjunction with the audited combined financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. In the preparation of our unaudited combined financial statements as of March 31, 2015, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure therein.

For Contego Services Group, LLC, the Company’s combined subsidiary that is 97% owned, and for DecisionUR, LLC, the Company’s combined subsidiary that is 98.8% owned, the third party holdings of equity interests are referred to as non-controlling interest. The portion of the third party members’ equity (deficit) of Contego Services Group, LLC and DecisionUR, LLC are presented as non-controlling interest in the accompanying combined balance sheets as of March 31, 2015 and December 31, 2014. The Company discloses the following three measures of net income (loss): (1) net income (loss), including noncontrolling interest in subsidiary, (2) net income (loss) attributable to non-controlling interest in subsidiary, and (3) net income (loss).

2. Effect of Recently Issued Financial Accounting Standards

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-03, Simplifying the Presentation of Debt Issuance Costs. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The update requires retrospective application. ASU 2015-03 is effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted but we do not anticipate electing early adoption.

In August 2014, the FASB issued ASU 2014-15 regarding Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements – Going Concern. The updated guidance related to determining whether substantial doubt exists about an entity's ability to continue as a going concern. The amendment provides guidance for determining whether conditions or events give rise to substantial doubt that an entity has the ability to continue as a going concern within one year following issuance of the financial statements and requires specific disclosures regarding the conditions or events leading to substantial doubt. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted, but we do not anticipate electing early adoption. We do not expect the adoption of this guidance to have a material impact on our combined financial statements.

5

In May 2014, the FASB issued ASU 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers. The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. For a publicly-held entity, this guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is not permitted. We are currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

In April 2014, the FASB issued ASU 2014-08 regarding ASC Topics 205 and 360, Reporting Discontinued Operations. The updated guidance related to reporting discontinued operations and disclosures of disposals of components of an entity. Under the amendment, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Additionally, the elimination of the component's operations, cash flows and significant continuing involvement conditions have been removed. Further, an equity method investment could be reported as discontinued operations. The updated guidance is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning after December 15, 2014. The adoption of this guidance has not had a material impact on our combined financial statements.

3. Business Combinations

The Company completed four acquisitions during the three-month period ended March 31, 2015. We acquired substantially all of the net assets of the following firms in cash transactions. These acquisitions have been accounted for using the acquisition method for recording business combinations, except for DecisionUR, LLC, as further discussed.

Name and Effective Date of Acquisition (In thousands):	Cash Paid		Accrued Liability		Recorded Earnout Payable		Maximum Potential Earnout Payable		Total Recorded Purchase Price
Phoenix Risk Management, Inc (January 31, 2015)	$	1,099	$	—	$	2,790	$	3,000	$	3,889
DecisionUR, LLC (February 5, 2015)		2,240		23		—		—		2,240
Capital & Guaranty, LLC (February 9, 2015)		175		—		175		175		350
TriGen Holding Group, Inc (March 31, 2015)		3,240		3,453		6,255		6,500		9,495
Total	$	6,754	$	3,476	$	9,220	$	9,675	$	15,974

The Company acquired DecisionUR from Six Points Investment Partners, LLC, a company under common control.  However, results of operations for DUR are included from acquisition date, as its operations are immaterial with respect to the financial statements taken as a whole for all periods presented.

The maximum potential earnout payables disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The amounts recorded as earnout payables, which are primarily based upon the estimated future operating results of the acquired entities over a one- to three-year period subsequent to the acquisition date, are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration in the foregoing table. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our combined statement of earnings when incurred.

The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement. In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability.  We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the acquired entity to achieve the targets. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations.

The aggregate amount of maximum earnout obligations related to acquisitions made in 2015 was $9.7 million as of March 31, 2015, of which $9.2 million was recorded in our combined balance sheet as of March 31, 2015, based on the estimated fair value of the expected future payments to be made.

The following is a summary of the estimated fair values of the net assets acquired at the date of each of the four acquisitions made in the three-months ended March 31, 2015:

6

In thousands	Total
Assets Acquired:
Cash	$	73
Restricted cash		2,242
Accounts receivable		1,238
Fixed assets		45
Other assets		149
Goodwill		5,591
Intangible assets:
Customer & carrier relationships		7,756
Service contracts		320
Non-compete agreements		889
Developed technology		639
Trade name portfolio		509
Total intangible assets		10,113
Total assets acquired		19,451
Liabilities assumed		3,476
Total net assets acquired	$	15,975

In accordance with FASB ASC 350, Intangibles—Goodwill and Other, intangible assets, which are comprised solely of the estimated fair value of the service contracts acquired, are being amortized over the estimated life of the customer contracts, ranging from two to ten years, in a manner that, in management’s opinion, reflects the pattern in which the intangible asset’s future economic benefits are expected to be realized. The intangible asset is tested for impairment at least annually (more frequently if certain indicators are present). In the event that management determines that the value of the intangible asset has become impaired, the combined company will incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

Provisional estimates of fair value and the allocation of the purchase price are established at the time of each acquisition and are subsequently reviewed within the first year of operations following the acquisition date to determine the necessity for adjustments. The fair value of the tangible assets and liabilities for each applicable acquisition at the acquisition date approximated their carrying values. We estimate the fair value as the present value of the benefits anticipated from ownership of the subject customer list in excess of returns required on the investment in contributory assets necessary to realize those benefits. The rate used to discount the net benefits was based on a risk-adjusted rate that takes into consideration market-based rates of return and reflects the risk of the asset relative to the acquired business. These discount rates generally ranged from 17% to 30% for our year-to-date 2015 acquisitions. The fair value of non-compete agreements was established using estimated financial projections for the acquired company based on market participant assumptions and various non-compete scenarios.

Customer and carrier relationships, non-compete agreements and trade names related to our acquisitions are amortized using the straight-line method over their estimated useful lives (ten years for customer and carrier relationships, one to two years for non-compete agreements and five to seven years for trade names), while goodwill is not subject to amortization. We use the straight-line method to amortize these intangible assets because the pattern of their economic benefits cannot be reasonably determined with any certainty. We review all of our intangible assets for impairment periodically (at least annually) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing intangible assets, if the fair value is less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist, and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings. Based on the results of impairment reviews during the three-month periods ended March 31, 2015 and 2014, no impairments were required.

Our combined financial statements for the three months ended March 31, 2015 include the operations of the acquired entities from their respective acquisition dates, totaling $0.7 million of revenues and no net income or loss.

The following is a summary of the unaudited pro forma historical results, as if these entities and Patriot Care Management, which was acquired on August 6, 2014, had been acquired at January 1, 2014 (in thousands, except per share data):

	Three Months Ended March 31,
In thousands	2015			2014
Total revenues		45,176			29,275
Net (loss) income		(4,510	)		909
Basic net (loss) income per share	$	(0.18	)	$	0.06
Diluted net (loss) income per share	$	(0.18	)	$	0.06

7

This unaudited supplemental pro forma financial information includes the results of operations of acquired businesses presented as if they had been combined as of January 1, 2014. The unaudited supplemental pro forma financial information has been provided for illustrative purposes only. The unaudited supplemental pro forma financial information does not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented, or of the results that may be achieved by the combined companies in the future. Future results may vary significantly from the results reflected in the following unaudited supplemental pro forma financial information because of future events and transactions, as well as other factors, many of which are beyond the Company’s control.

4. Fixed Assets and Other Long Term Assets

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Expenditures for furniture and fixtures and computer equipment are capitalized and depreciated on a straight-line basis over a three-year estimated useful life. Expenditures for leasehold improvements on office space and facilities are capitalized and depreciated on a straight-line basis over the term of the lease.

As of March 31, 2015 and December 31, 2014, our major classes of fixed assets consisted of the following:

In thousands	March 31, 2015			December 31, 2014
	(Unaudited)
Fixed Assets
Computer equipment, software and furniture and fixtures	$	5,961		$	5,722
Leasehold improvements		2,577			2,545
Total fixed assets		8,538			8,267
Less accumulated depreciation		(6,822	)		(6,388	)
Fixed assets, net of accumulated depreciation	$	1,716		$	1,879

Other Long Term Assets

Other long term assets, which are solely comprised of capitalized policy and claims administration system development costs, are also stated at cost, net of accumulated depreciation. Expenditures for capitalized policy and claims administration system development costs are capitalized and amortized on a straight line basis over a five-year estimated useful life.

As of March 31, 2015 and December 31, 2014, other long term assets consisted of the following:

In thousands	March 31, 2015			December 31, 2014
Other long term assets	(Unaudited)
Capitalized policy and claims administration system development costs	$	14,709		$	13,093
Less accumulated depreciation		(4,129	)		(3,251	)
Other long term assets, net of accumulated depreciation	$	10,580		$	9,842

We periodically review all fixed assets and other long term assets that have finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Upon sale or retirement, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts, and any resulting gain or loss is reflected in earnings.

5. Goodwill and Other Intangible Assets

Goodwill

Goodwill represents the excess of consideration paid over the fair value of net assets acquired. Goodwill is not amortized but is tested at least annually for impairment (or more frequently if certain indicators are present or management otherwise believes it is appropriate to do so). In the event that management determines that the value of goodwill has become impaired, we will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. We determined that there was no impairment as of March 31, 2015.

The Company acquired $5.6 million of goodwill in the first quarter of 2015 as a result of the four acquisitions discussed in Note 3, Business Combinations. Changes in goodwill are summarized as follows:

8

In thousands
Balance as of December 31, 2014	$	61,493
Goodwill acquired		5,591
Balance as of March 31, 2015	$	67,084

Intangible Assets

Intangible assets that have finite lives are amortized over their useful lives. The company acquired $10.1 million of intangible assets as a result of the four acquisitions discussed in Note 3, Business Combinations. The intangible assets, their original fair values, and their net book values are detailed below as of the dates presented:

	March 31, 2015							December 31, 2014
In thousands	Gross Asset		Accumulated Amortization			Net Asset		Gross Asset		Accumulated Amortization			Net Asset
	(Unaudited)
Intangible Assets
Service contracts	$	35,120	$	(2,907	)	$	32,213	$	34,800	$	(1,812	)	$	32,988
Customer and carrier relationships		7,756		(43	)		7,713		—		—			—
Non-compete agreements		889		(22	)		867		—		—			—
Developed technology		639		(19	)		620		—		—			—
Trade names		509		(3	)		506		—		—			—
Total	$	44,913	$	(2,994	)	$	41,919	$	34,800	$	(1,812	)	$	32,988

The table below reflects the estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter:

In thousands	March 31, 2015
Amortization expense	(Unaudited)
2015 (remaining nine months)	$	4,362
2016		5,816
2017		5,460
2018		5,372
2019		5,372
Thereafter		15,537
Total	$	41,919

6. Notes Payable and Lines of Credit

As of March 31, 2015 and December 31, 2014, notes payable were comprised of the following:

In thousands	March 31, 2015			December 31, 2014
	(Unaudited)
PennantPark Loan Agreement	$	—		$	63,285
UBS Credit Agreement		—			56,288
BMO Term Loan A		40,000			—
Gross Notes Payable and Current Portion of Notes Payable		40,000			119,573
Less original issue discount		—			(3,085	)
Less value attributable to stock warrants		—			(5,667	)
Notes Payable and Current Portion of Notes Payable		40,000			110,821
Less current portion of notes payable		(2,000	)		(15,782	)
Notes Payable	$	38,000		$	95,039

Senior Secured Credit Facility

On January 22, 2015, we entered into a Credit Agreement with BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”), and the other lenders party thereto, which provides for a $40.0 million revolving credit facility and a $40.0 million term loan facility (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility has a maturity of five years, and

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borrowings thereunder bear interest, at our option, at LIBOR plus a margin ranging from 250 basis points to 325 basis points or at base rate plus a margin ranging from 150 basis points to 225 basis points. Margins on all loans and fees will be increased by 2% per annum during the existence of an event of default. The revolving credit facility includes borrowing capacity available for letters of credit and borrowings on same-day notice, referred to as swing line loans. At any time prior to maturity, we have the right to increase the size of the revolving credit facility or the term loan facility by an aggregate amount of up to $20.0 million, but in minimum increments of $5.0 million.

As of March 31, 2015, the outstanding balance under the $40.0 million revolving credit facility was $4.8 million. Accordingly, the Company had $35.2 million available to borrow under the revolving credit facility.

In addition to paying interest on outstanding principal under the Senior Secured Credit Facility, we are required to pay a commitment fee to the Administrative Agent for the ratable benefit of the lenders under the revolving credit facility in respect of the unutilized commitments thereunder, ranging from 35 basis points to 50 basis points, depending on specified leverage ratios. With respect to letters of credit, we are also required to pay a per annum participation fee equal to the applicable LIBOR margin on the face amount of each letter of credit as well as a fee equal to 0.125% on the face amount of each letter of credit issued (or the term of which is extended). This latter 0.125% fee is payable to the issuer of the letter of credit for its own account, along with any standard documentary and processing charges incurred in connection with any letter of credit.

The term loan facility amortizes quarterly beginning the first full quarter after the closing date at a rate of 5% per annum of the original principal amount during the first two years, 7.5% per annum of the original principal amount during the third and fourth years and 10% per annum of the original principal amount during the fifth year, with the remainder due at maturity. Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity. In the event of any sale or other disposition by us or our subsidiaries guaranteeing the Senior Secured Credit Facility of any assets with certain exceptions, we are required to prepay all proceeds received from such a sale towards the remaining scheduled payments of the term loan facility.

In addition, all obligations under the Senior Secured Credit Facility are guaranteed by all of our existing and future subsidiaries, other than foreign subsidiaries to the extent the assets of all foreign subsidiaries that are not guarantors do not exceed 5% of the total assets of us and our subsidiaries on a consolidated basis, and secured by a first-priority perfected security interest in substantially all our and our guaranteeing subsidiaries’ tangible and intangible assets, whether now owned or hereafter acquired, including a pledge of 100% of the stock of each guarantor.

The Senior Secured Credit Facility contains certain covenants that, among other things and subject to significant exceptions, limit our ability and the ability of our restricted subsidiaries to engage in certain business and financing activities and that require us to maintain certain financial covenants, including requirements to maintain (i) a maximum total leverage ratio of total outstanding debt to adjusted EBITDA for the most recently-ended four fiscal quarters of no more than 300% and (ii) a minimum fixed charge coverage ratio of adjusted EBITDA to the sum of cash interest expense (which amount shall be calculated on an annualized basis for the three, six and nine month periods ending March 31, 2015, June 30, 2015 and September 30, 2015) plus income tax expense (or less any income tax benefits) plus capital expenditures plus dividends, share repurchases and other restricted payments plus regularly scheduled principal payments of debt for the same period of a least 150% for the most recently-ended four quarters. The Senior Secured Credit Facility allows us to pay dividends in an amount up to 50% of our net income if certain other financial conditions are met. The Senior Secured Credit Facility contains other restrictive covenants, including those regarding indebtedness (including capital leases) and guarantees; liens; operating leases; investments and acquisitions; loans and advances; mergers, consolidations and other fundamental changes; sales of assets; transactions with affiliates; no material changes in nature of business; dividends and distributions, stock repurchases, and other restricted payments; change in name, jurisdiction of organization or fiscal year; burdensome agreements;. and capital expenditures. The Senior Secured Credit Facility also has events of default that may result in acceleration of the borrowings thereunder, including (i) nonpayment of principal, interest, fees or other amounts (subject to customary grace periods for items other than principal); (ii) failure to perform or observe covenants set forth in the loan documentation (subject to customary grace periods for certain affirmative covenants); (iii) any representation or warranty proving to have been incorrect in any material respect when made; (iv) cross-default to other indebtedness and contingent obligations in an aggregate amount in excess of an amount to be agreed upon; (v) bankruptcy and insolvency defaults (with grace period for involuntary proceedings); (vi) inability to pay debts; (vii) monetary judgment defaults in excess of an agreed upon amount; (viii) ERISA defaults; (ix) change of control; (x) actual invalidity or unenforceability of any loan document, any security interest on any material portion of the collateral or asserted (by any loan party) invalidity or unenforceability of any security interest on any collateral; (xi) actual or asserted (by any loan party) invalidity or unenforceability of any guaranty; (xii) material unpaid, final judgments that have not been vacated, discharged, stayed or bonded pending appeal within a specified number of days after the entry thereof; and (xiii) any other event of default agreed to by us and the Administrative Agent.

As of March 31, 2015, we were in compliance with the financial and other restrictive covenants under our outstanding material debt obligations, including our Senior Secured Credit Facility.

UBS Credit Agreement

On August 6, 2014, in connection with the Patriot Care Management Acquisition, we and certain of our subsidiaries entered into a credit agreement with UBS Securities LLC (the “UBS Credit Agreement”), which provided for a five-year term loan facility in an aggregate principal amount of $57.0 million that would mature on August 6, 2019. The loan was secured by the common stock of

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Patriot Care Management, Inc. (“PCM”) and guaranteed by Guarantee Insurance Group and its wholly owned subsidiaries. Following our initial public offering (the “IPO”), we prepaid all outstanding borrowings under the UBS Credit Agreement, including accrued interest and applicable prepayment premium.

Our borrowings under the UBS Credit Agreement bore interest at a rate equal to the greatest of (x) the base rate in effect on such day, (y) the federal funds rate in effect on such day plus 0.50% and (z) the adjusted LIBOR rate on such day for a one-month interest period plus 1.00%, subject to a minimum rate, plus an applicable margin of 8.00%, which may be increased by additional amounts under certain specified circumstances. The weighted average interest rate under the UBS Credit Agreement for the year ended December 31, 2014 was 11.25%.  This instrument was repaid in full upon closing on the Senior Secured Credit Facility.

PennantPark Loan Agreement

On August 6, 2014, in connection with the GUI Acquisition, we and certain of our subsidiaries, as borrowers, and certain of our other subsidiaries and certain affiliated entities, as guarantors, entered into a loan agreement with the PennantPark Entities as lenders (the “PennantPark Loan Agreement”). Following our IPO, we prepaid all outstanding borrowings under the PennantPark Loan Agreement, including accrued interest and applicable prepayment premium.

Borrowings under the PennantPark Loan Agreement were comprised of (i) an initial tranche in an aggregate principal amount of approximately $37.8 million, and (ii) an additional tranche in an aggregate principal amount of approximately $30.8 million of new borrowings. Our borrowings under the PennantPark Loan Agreement were funded at a price equal to 97.5% of the par value thereof and bore interest equal to the sum of (i) the greater of 1.0% or LIBOR and (ii) 11.50%. The weighted average interest rate under the PennantPark Loan Agreement for the year ended December 31, 2014 was 12.5%.

All obligations under the PennantPark Loan Agreement were guaranteed by certain of our subsidiaries as well as several affiliated entities, including GUI, and were generally secured by the tangible and intangible property of the borrowers and the guarantors. In connection with both tranches of the PennantPark Loan Agreement, we issued warrants to the PennantPark Entities to purchase an aggregate of 1,110,555 shares of our common stock. This instrument was repaid in full upon closing on the Senior Secured Credit Facility.

7. Capital Lease Obligations

Equipment subject to capital lease assumed is comprised of capitalized policy and claims administration software development costs and related computer equipment. Monthly payments on the capital lease, which expires on December 3, 2016, were approximately $206,000 as of March 31, 2015. Payments may be adjusted in connection with a change in the interest rate swap rate quoted in the Bloomberg Swap Rate Report. The Company’s obligations for future payments on the capital lease as of March 31, 2015, based on the interest rate swap rate in effect on that date, are as follows:

In thousands	Principal		Interest		Total
Payments on Capital Lease
2015	$	1,565	$	84	$	1,649
2016		2,422		50		2,472
Total	$	3,987	$	134	$	4,121

8. Stock-Based Compensation

Omnibus Incentive Plan

On January 15, 2015, the Board of Directors approved the Patriot National, Inc. 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), subject to and with effect upon approval of such plan by the stockholders of the Company.

The compensation committee of our board of directors determines the participants under the Omnibus Incentive Plan. The Omnibus Incentive Plan provides for non-qualified and incentive stock options, restricted stock and restricted stock units, any or all of which may be made contingent upon the achievement of performance criteria. Subject to the Omnibus Incentive Plan limits, the compensation committee has the discretionary authority to determine the size of an award.

Shares of our common stock available for issuance under the Omnibus Incentive Plan include authorized and unissued shares of common stock or authorized and issued shares of common stock reacquired and held as treasury shares or otherwise, or a combination thereof. The number of available shares is reduced by the aggregate number of shares that become subject to outstanding awards granted under the Omnibus Incentive Plan. To the extent that shares subject to an outstanding award granted under either the Omnibus Incentive Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or by reason of the settlement of such award in cash, then such shares will again be available for grant under the Omnibus Incentive Plan.

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Shares withheld to satisfy tax withholding requirements upon the vesting of awards other than stock options will also be available for grant under the Omnibus Incentive Plan. Shares that are used to pay the exercise price of an option, shares delivered to or withheld by us to pay withholding taxes related to stock options, and shares that are purchased on the open market with the proceeds of an option exercise, may not again be made available for issuance. 

Stock Options

In the three months ended March 31, 2015, we issued stock options as incentive compensation for officers and certain key employees on the date of the Initial Public Offering. The exercise price of each stock option is the closing market price of our common stock on the date of grant. The options will vest in three equal annual installments on the first, second and third anniversaries of grant and expire 10 years after the grant date. The fair values of these stock options were estimated using the Black-Scholes valuation model with the following weighted-average assumptions:

	Three Months Ended March 31,
In thousands	2015
Expected dividend yield		0	%
Risk-free interest rate (1)		0.49	%
Expected volatility (2)		33.02	%
Expected life in years (3)		3.0

(1) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(2) The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

(3) The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

For the three months ended March 31, 2015, we awarded 1,180,400 options with an estimated fair value of $3.1 million. Option activity for the three months ended March 31, 2015 is as follows:

In thousands, except weighted-average price and remaining contractual term	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		—		$	—
Options granted		1,180		$	13.98
Options exercised		—		$	—
Options cancelled or forfeited		(44	)	$	14.00
Options outstanding at March 31, 2015		1,136		$	13.98		9.7	$	2,940
Options expected to vest at March 31, 2015		1,136		$	13.98		9.7	$	2,940
Options exercisable at March 31, 2015		—		$	13.98		9.7	$	—

As of March 31, 2015, we recognized $0.3 million of stock compensation expense associated with these options, and there was $2.6 million of total unrecognized stock compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of 2.7 years.

Restricted Stock Awards

In 2015, we issued 525,946 restricted shares as incentive compensation for officers, directors, and certain key employees on the date of the Initial Public Offering. Subsequent to issuance, 22,059 restricted shares were forfeited, leaving 503,887 remaining restricted shares outstanding as of March 31, 2015, all of which were unvested. The fair value of outstanding restricted shares at grant date was $7.0 million. Stock grants for the three months ended March 31, 2015 were as follows:

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In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted shares outstanding at December 31, 2014		—		$	—
Restricted shares granted		526		$	13.98
Restricted shares vested		—		$	—
Restricted shares forfeited		(22	)	$	14.00
Unvested restricted shares outstanding as of March 31, 2015		504		$	13.98

As of March 31, 2015, we recognized $2.2 million of stock compensation expense associated with these restricted shares, and there was $4.8 million of total unrecognized stock compensation cost related to unvested restricted stock to be recognized over a weighted average period of 1.5 years.

9. Fair Value Measurement of Financial Liabilities

With respect to the Company’s financial liabilities, which include notes payable, capital lease obligation, earn-out obligations of acquisitions and warrant redemption liability, the Company has adopted current accounting guidance which establishes the authoritative definition of fair value, establishes a framework for measuring fair value, creates a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. This guidance defines fair value as the price that would be paid to transfer the warrant redemption liability in an orderly transaction between market participants at the measurement date.  As required under current accounting guidance, the Company has identified and disclosed its financial assets in a fair value hierarchy, which consists of the following three levels:

		Definition
Level 1	Observable unadjusted quoted prices in active markets for identical securities.
Level 2	Observable inputs other than quoted prices in active markets for identical securities, including:
	(i)	quoted prices in active markets for similar securities.
	(ii)	quoted prices for identical or similar securities in markets that are not active.
	(iii)	inputs other than quoted prices that are observable for the security (e.g., interest rates, yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, credit risks and default rates).
	(iv)	inputs derived from or corroborated by observable market data by correlation or other means.
Level 3	Unobservable inputs, including the reporting entity’s own data, as long as there is no contrary data indicating market participants would use different assumptions.

The Company’s notes payable, capital lease obligation, earn-out obligations of acquisitions, and warrant redemption liability, for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of March 31, 2015 and December 31, 2014 (in thousands):

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	Fair Value Measurement, Using
March 31, 2015	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Notes payable	$	—	$	—	$	40,000	$	40,000
Capital lease obligation		—		—		3,987		3,987
Earnout obligation of acquisitions		—		—		9,220		9,220
Warrant redemption liability		—		—		—		—
Total	$	—	$	—	$	53,207	$	53,207
	Fair Value Measurement, Using
December 31, 2014	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Notes payable	$	—	$	—	$	110,821	$	110,821
Capital lease obligation		—		—		4,770		4,770
Warrant redemption liability		—		—		12,879		12,879
Total	$	—	$	—	$	128,470	$	128,470

The following is a reconciliation of the fair value of the Company’s financial liabilities that were measured using significant unobservable (Level 3) inputs (in thousands):

Three Months Ended March 31, 2015	Notes Payable			Capital Lease Obligation			Earnout Obligation		Warrant Redemption Liability			Total
Fair value, January 1, 2015	$	110,821		$	4,770		$	—	$	12,879		$	128,470
Proceeds from issuance of Term Loan A		40,000			—			—		—			40,000
Repayment of notes payable		(119,573	)		—			—		—			(119,573	)
Amortization of warrant and original issue discount on notes payable		8,752			—			—		—			8,752
Payments under capital lease		—			(783	)		—		—			(783	)
Record earnout obligation on acquisitions		—			—			9,220		—			9,220
Exercise of warrants		—			—			—		(9,995	)		(9,995	)
Decrease in fair value of common stock  and warrant redemption liability		—			—			—		(1,385	)		(1,385	)
Contribute remaining liability balance due to equity warrants		—			—			—		(1,499	)		(1,499	)
Fair Value, March 31, 2015	$	40,000		$	3,987		$	9,220	$	—		$	53,207

10. Related Party Transactions

Fee income from related party represents fee income earned from Guarantee Insurance Company (“Guarantee Insurance”), a related party as described above. Fee income from Guarantee Insurance for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance pursuant to quota share reinsurance agreements between Guarantee Insurance, Patriot Underwriters, Inc.’s (“PUI”) third party insurance company customers and the segregated portfolio cell reinsurers that assume business written by Guarantee Insurance. Certain fee income from third-party segregated portfolio cell reinsurers is remitted to the Company by Guarantee Insurance on behalf of the segregated portfolio cell reinsurers. Fee income from Guarantee Insurance for brokerage, underwriting and policyholder services represents fees for soliciting applications for workers’ compensation insurance for Guarantee Insurance, based on a percentage of premiums written or other amounts negotiated by the parties.

For the three months ended March 31, 2014, the allocation of marketing, underwriting and policy issuance costs from related party in the accompanying combined statements of operations represents costs reimbursed to Guarantee Insurance Group for salaries and other costs incurred by Guarantee Insurance Group to provide its policyholder services. Management fees paid to related party for administrative support services in the accompanying combined statements of operations represent amounts paid to Guarantee Insurance Group for management oversight, legal, accounting, human resources and technology support services. Effective August 6, 2014, the management services agreement pursuant to which these fees were payable was terminated and all costs associated with our operations began to be incurred directly by us. Accordingly, beginning August 6, 2014, such expenses, rather than being reflected in

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this item, are recorded in the line items to which they relate, which are primarily “salaries and salary related expenses,” “outsourced services” and “other operating expenses.”

As of March 31, 2015, we had a net payable to related parties of $64 thousand due to entities controlled by Mr. Mariano, our founder, Chairman, President and Chief Executive Officer.

11. Concentration

For the three months ended March 31, 2015, approximately 83% of total combined fee income and fee income from related party was attributable to contracts with Guarantee Insurance, the Company’s largest customer and a related party, and approximately 10% was attributable to contracts with the Company’s second largest customer. For the three months ended March 31, 2014, approximately 56% of total combined fee income and fee income from related revenues was attributable to contracts with Guarantee Insurance, and approximately 31% and 7% were attributable to contracts with the Company’s second and third largest customers, respectively.

As of March 31, 2015, approximately 84% of combined fee income receivable and fee income receivable from related party was attributable to contracts with Guarantee Insurance, the Company’s largest customer and a related party, and approximately 5% and 3% of combined fee income receivable and fee income receivable from related party were attributable to contracts with the Company’s second and third largest customers, respectively. As of December 31, 2014, approximately 86% of combined fee income receivable and fee income receivable from related party was attributable to contracts with Guarantee Insurance, the Company’s largest customer and a related party, and approximately 8% and 2% of combined fee income receivable and fee income receivable from related party were attributable to contracts with the Company’s second and third largest customers, respectively.

Because fee income from related party for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance, the Company’s revenues attributable to contracts with Guarantee Insurance do not necessarily represent fee income from related party.

12. Commitments and Contingencies

Contractual Obligations and Commitments

In connection with the Senior Secured Credit Facility as described in Note 6, Notes Payable and Lines of Credit, the common stock of the Company and the common stock or units of each of the Company’s wholly and majority owned subsidiaries were pledged as collateral.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

The Company has employment agreements with certain executives and other employees, which provide for compensation and certain other benefits and for severance payments under certain circumstances. The employment agreements contain clauses that become effective upon a change of control of the Company. Upon the occurrence of any of the defined events in the employment agreements, the Company would be obligated to pay certain amounts to the relevant employees.

The Company maintains cash at various financial institutions, and, at times, balances may exceed federally insured limits. Management does not believe this results in any material effect on the Company’s financial position or results of operations.

In the normal course of business, the Company may be party to various legal actions that management believes will not result in any material effect on the Company’s financial position or results of operations.

13. Warrant Redemption Liability

There was no warrant redemption liability as of March 31, 2015.  Concurrent with our IPO and repayment of the PennantPark debt on January 22, 2015, the PennantPark Entities exercised 965,700 of their 1,110,555 detachable common stock warrants for common stock at an exercise price of $2.67 per share. The PennantPark Entities waived their put right on the remaining 144,855 detachable common stock warrants.  By eliminating the put right, the PennantPark Entities cannot require the Company to redeem the remaining detachable common stock warrants for cash, thereby eliminating the warrant redemption liability previously required. The remaining 144,855 detachable common stock warrants can be used to purchase shares of the Company’s common stock at an exercise price of $2.67 per share, and expire on November 27, 2023.

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On November 27, 2013, the Company issued 626,295 detachable common stock warrants to new lenders to purchase shares of the Company’s common stock at an exercise price of $2.67 per share. The warrants expire on November 27, 2023. Prior to the exercise and removal of the put right, at the fifth anniversary date of the warrants and any time after the eighth anniversary date of the warrants, the warrant holders could have required the Company to redeem the warrants for cash, in an amount equal to the estimated fair value of the warrants, as determined by an independent appraisal, less the total exercise price of the redeemed warrants. The value of the warrants was recorded as a discount on the loan and a warrant liability on November 27, 2013. The discount on the loan was amortized as interest expense over the term of the loan. The Company attributed a value to these warrants of approximately $7.3 million as of December 31, 2014.

On August 6, 2014, in connection with the additional tranche described in Note 6, Notes Payable and Lines of Credit, the Company issued 484,260 detachable common stock warrants to the PennantPark Entities to purchase shares of the Company’s common stock at an exercise price of $2.67 per share. The warrants expire on November 27, 2023. Prior to the exercise and removal of the put right, at the fifth anniversary date of the warrants and any time after the eighth anniversary date of the warrants, the warrant holders could have required the Company to redeem the warrants for cash, in an amount equal to the estimated fair value of the warrants, as determined by an independent appraisal, less the total exercise price of the redeemed warrants. The value of the warrants was recorded as a discount on the loan and a warrant liability on August 6, 2014. The discount on the loan was amortized as interest expense over the term of the loan. The Company attributed a value to these warrants of approximately $5.6 million as of December 31, 2014.

14. Income Taxes

The Company uses an estimated annual effective tax rate method of computing its interim tax provision. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rates. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. For the three-month period ended March 31, 2015, the tax effects of warrants were treated as a discrete item.

The effective tax rate is based on forecasted annual pre-tax income, permanent differences and statutory tax rates. For the three months ended March 31, 2015, the effective income tax rate was 42%. The main drivers of the difference in the effective tax rate from the statutory rate are warrants, success based fees, and meals and entertainment.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax in multiple states with heavy concentration in Florida, California, and Pennsylvania. The net deferred tax assets as of March 31, 2015 were $6.6 million before valuation allowance. A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefit related to such assets will not be realized. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence in concluding that a full valuation allowance was necessary against its net deferred tax assets at March 31, 2015.

At March 31, 2015 and December 31, 2014, the Company had no unrecognized tax benefits and no amounts recorded for uncertain tax positions.

15. Subsequent Events

On April 8, 2015, TriGen Insurance Solutions, Inc. (“TriGen”), our wholly owned subsidiary, entered into an asset purchase agreement with Hospitality Supportive Systems, LLC, a Pennsylvania limited liability company (“HSS”), and the sole shareholder of HSS effective April 1, 2015, pursuant to which we acquired substantially all of the assets of HSS for an estimated maximum of $9,650,000. Pursuant to the HSS purchase agreement, the Company paid HSS $5,605,000 in cash at closing. HSS will also be entitled to an earn-out payment of up to $4,045,000 twelve months after closing, subject to reduction on a pro-rata basis if EBITDA within the first year does not meet certain targets. On May 14, 2015, due to strong post-acquisition performance, the parties amended the HSS purchase agreement to cap the incentive earn-out at $5,000,000 and to accelerate the base earn-out to be paid as of the date of the amendment.

On April 8, 2015, TriGen also entered into an asset purchase agreement with Selective Risk Management LLC, a Pennsylvania limited liability company (“SRM”), and the shareholders of SRM effective April 1, 2015, pursuant to which we acquired substantially all of the assets of SRM for a maximum of $3,845,000. Pursuant to the SRM purchase agreement, we paid SRM $1,922,500 in cash at closing. SRM will also be entitled to an earn-out payment of up to $1,922,500 twelve months after closing, subject to reduction on a pro-rata basis if EBITDA within the first year does not meet certain targets. On May 14, 2015, due to strong post-acquisition performance, the parties amended the SRM purchase agreement to accelerate the earn-out to be paid as of the date of the amendment.

On April 17, 2015, Vikaran Technology Solutions, Inc. (“VTS”), our wholly owned subsidiary, entered into an agreement and plan of merger with Vikaran Solutions, LLC, an Illinois limited liability company (“Vikaran”), and certain members of Vikaran, pursuant

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to which Vikaran was merged with and into VTS. The merger closed on April 17, 2015 for a purchase price of $8,500,000 paid in cash at closing.

In connection with the Vikaran transaction, we also entered into a definitive agreement to purchase all of the outstanding stock of Mehta and Pazol Consulting Services Private Limited, an Indian private limited company (“MPCS”). MPCS is Vikaran’s software development center located in Pune, India. The purchase price for MPCS is expected to be approximately $1,500,000.

On April 24, 2015, Patriot Risk Services, Inc (“PRS”), our wholly owned subsidiary, entered into a stock purchase agreement with Corporate Claims Management, Inc. a Missouri corporation (“CCMI”) and the shareholders of CCMI pursuant to which PRS acquired all of the outstanding equity of CCMI for $8,000,000 in cash plus a performance-based earn-out of up to $1,000,000. Pursuant to the CCMI purchase agreement, the Sellers will be entitled to the earn-out in two tranches. The first tranche will be up to $500,000 twelve months after closing, and the second tranche will be up to $500,000 fifteen months after closing, in each case subject to a reduction on a pro-rata basis if revenue during each earn-out period does not meet certain targets. Neither the Company nor PRS assumed any material liabilities under the CCMI purchase agreement. In connection with the transaction, which closed April 24, 2015, CCMI became a direct subsidiary of PRS.

On May 8, 2015, Contego Services Group, LLC (“Contego”), a 97% owned subsidiary of Patriot Services Inc., entered into an asset purchase agreement with Candid Investigation Services, LLC, a New Mexico limited liability company (“Candid”), to acquire substantially all of the assets of Candid for a maximum of $1,500,000.  Pursuant to the asset purchase agreement, the Company paid $900,000 in cash at closing. Candid will be entitled to earn-out payments totaling $600,000 in quarterly payments over twelve months after closing, subject to reduction on a pro-rata basis if revenue during each earn-out period does not meet certain targets.  

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Combined Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2014, and with the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2014.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our operations, results of operations and other matters that are based on our current expectations, estimates, assumptions and projections. Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “positioned,” “outlook” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to the following:

· Because we have a limited operating history as a stand-alone, combined company and business, our historical financial condition and results of operations are not necessarily representative of the results we would have achieved as a stand-alone, combined, publicly-traded company and may not be a reliable indicator of our future results.

· Our business may be materially adversely impacted by general economic and labor market conditions.

· The workers’ compensation insurance industry is cyclical in nature, which may affect our overall financial performance.

· We may be more vulnerable to negative developments in the workers’ compensation insurance industry than companies that also provide outsourced services for other lines of insurance.

· If workers’ compensation claims decline, in frequency or severity, our results of operations and financial condition may be adversely affected.

· Our total fee income and fee income from related party are currently substantially dependent on our relationships with Guarantee Insurance and a small number of other insurance carrier clients.

· Our relationship with Guarantee Insurance may create conflicts of interest, and we cannot be certain that all our transactions with Guarantee Insurance will be conducted on the same terms as those available from unaffiliated third parties.

· If we cannot sustain our relationships with independent retail agencies, we may be unable to operate profitably.

· Our geographic concentration ties our performance to business, economic and regulatory conditions in certain states, and unfavorable conditions in these states could have a significant adverse impact on our business, financial condition and results of operations.

· We are subject to extensive regulation and supervision, and our failure to comply with such regulation or adapt to new regulatory and legislative initiatives may adversely impact our business.

· Changes in the healthcare industry could adversely impact our performance.

· If we are unable to adapt to healthcare market changes with our existing services or by developing and providing new services, our business would be adversely affected.

· We have limited experience in acquiring other companies and businesses, and we may have difficulty integrating the operations of companies or businesses that we may acquire and may incur substantial costs in connection therewith.

· Our goodwill and intangible assets could become impaired, which could lead to material non-cash charges against earnings.

· We operate in a highly competitive industry, and others may have greater financial resources to compete effectively.

· We compete on the basis of the quality of our outcome-driven service model, and our failure to continue to perform at high levels could adversely affect our business.

· Our business is dependent on the efforts of our senior management and other key employees who leverage their industry expertise, knowledge of our markets and services and relationships with independent retail agencies that sell the insurance products of our carrier partners.

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· We are reliant on our information processing systems, and any failure or inadequate performance of these systems could have a material adverse effect on our business, financial condition and results of operations.

· Cyber-attacks or other security breaches involving our computer systems or the systems of one or more of our clients, independent retail agencies or vendors could materially and adversely affect our business.

· If we infringe on the proprietary rights of others, our business operations may be disrupted, and any related litigation could be time consuming and costly.

· We are, and may become, party to lawsuits or other claims that could adversely impact our business.

· Our substantial indebtedness could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts and could expose us to interest rate risk to the extent of our variable debt and divert our cash flow from operations to make debt payments.

· Servicing our indebtedness will require a significant amount of cash. Our ability to generate sufficient cash depends on many factors, some of which are not within our control.

· Despite our current level of indebtedness, we may be able to incur substantially more debt and enter into other transactions, which could further exacerbate the risks to our financial condition described above.

· Our founder, Chairman, President and Chief Executive Officer owns a significant percentage of our outstanding capital stock and will be able to influence stockholder and management decisions, which may conflict with your interests as a stockholder.

· Future sales, or the perception of future sales, by us or our affiliates could cause the market price for our common stock to decline.

· Because we have no plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

· Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements.

· If securities analysts do not publish research or reports about our business or if they downgrade or provide negative outlook on our stock or our sector, our stock price and trading volume could decline.

· We are an “emerging growth company”, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

· We have incurred, and will continue to incur, increased costs, and are subject to additional regulations and requirements as a result of being a public company, which could lower our profits or make it more difficult to run our business.

· Our internal controls over financial reporting may not be effective, and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and material adverse effect on our business, financial condition, results of operations or prospects.

· Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

· We have acquired a number of insurance services firms in a short period of time, and there are risks associated with such acquisitions, which could adversely affect our growth and results of operations.

For a more detailed discussion of these factors, see the information under the heading “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2014. Our forward-looking statements speak only as of the date of this report or as of the date they are made, and we undertake no obligation to update any forward-looking statements.

Terms Used in this Quarterly Report on Form 10-Q

Unless otherwise specified or the context requires otherwise, the following terms used in this Quarterly Report on Form 10-Q have the meanings ascribed to them below:

· references to “Guarantee Insurance” refer to Guarantee Insurance Company and references to “Guarantee Insurance Group” refer to Guarantee Insurance Group, Inc. (f/k/a Patriot National Insurance Group, Inc.), the parent company of Guarantee Insurance, entities that are both controlled by Steven M. Mariano, our founder, Chairman, President and Chief Executive Officer;

· references to the “GUI Acquisition” refer to our acquisition, effective August 6, 2014, of contracts to provide marketing, underwriting and policyholder services and related assets and liabilities from a subsidiary of Guarantee Insurance Group;

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· references to the “Patriot Care Management Acquisition” refer to our acquisition, effective August 6, 2014, of a business that provides nurse case management and bill review services (the “Patriot Care Management Business”);

· references to “Patriot National,” “the Company,” “we,” “us” or “our” refer to Patriot National, Inc. and its direct and indirect subsidiaries;

· references to the “PennantPark Entities” or the “selling stockholders” refer to PennantPark Investment Corporation, PennantPark Floating Rate Capital Ltd., PennantPark SBIC II LP and PennantPark Credit Opportunities Fund LP;

· references to the “PennantPark Debt” refer to debt pursuant to the PennantPark Loan Agreement;

· references to the “UBS Debt” refer to debt pursuant to the UBS Credit Agreement;

· references to “reference premiums written” refer to the aggregate premiums, grossed up for large deductible credits, written by or for our insurance carrier partners in respect of the policies we produce and service on their behalf;

· references to “reinsurance captives” or “reinsurance captive entities” refer to segregated portfolio cell captive entities that assume underwriting risk written initially by an insurance carrier client;

· references to “Zurich” refer to Zurich American Insurance Company, Zurich American Insurance Company of Illinois, American Guarantee and Liability Insurance Company, American Zurich Insurance Company, Steadfast Insurance Company, Empire Fire & Marine Insurance Company, Empire Indemnity Insurance Company, Maryland Casualty Company, Assurance Company of America, Maryland Insurance Company, Northern Insurance Company of New York, The Fidelity and Deposit Company of Maryland, Colonial American Casualty and Surety Company, Universal Underwriters Insurance Company, Universal Underwriters Life Insurance Company, Universal Underwriters of Texas Insurance Company, Zurich Insurance Company Canadian Branch collectively; and

· references to “AIG” refer to AIG Property Casualty Company, American Home Assurance Company, AIG Assurance Company, AIU Insurance Company, Commerce and Industry Insurance Company, Granite State Insurance Company, Illinois National Insurance Co., National Union Fire Insurance Company of Pittsburgh, PA., New Hampshire Insurance Company, and The Insurance Company of the State of Pennsylvania, collectively.

Overview

Business

We are a national provider of comprehensive outsourcing solutions within the workers’ compensation marketplace for insurance companies, employers, local governments and reinsurance captives. We offer an end-to-end portfolio of services to increase business production, contain costs and reduce claims experience for our clients. We leverage our strong distribution relationships, proprietary business processes, advanced technology infrastructure and management expertise to deliver valuable solutions to our clients. We strive to deliver these value-added services to our clients in order to help them navigate the workers’ compensation landscape, ensure compliance with state regulations, handle all aspects of the claims process and ultimately contain costs.

We offer two types of services: brokerage, underwriting and policyholder services (or our “brokerage and policyholder services”) and claims administration services (or our “claims administration services”).

Fee income for our services is generated from our clients based on (1) a percentage of premiums for the policies we service, (2) the cost savings we achieve for our clients or (3) a fixed fee for a particular service. Unlike our insurance and reinsurance carrier clients, we do not generate underwriting income or assume underwriting risk on workers’ compensation plans.

Recent Events

On April 8, 2015, TriGen Insurance Solutions, Inc. (“TriGen”), our wholly owned subsidiary, entered into an asset purchase agreement with Hospitality Supportive Systems, LLC, a Pennsylvania limited liability company (“HSS”), and the sole shareholder of HSS effective April 1, 2015, pursuant to which we acquired substantially all of the assets of HSS for an estimated maximum of $9,650,000. Pursuant to the HSS purchase agreement, the Company paid HSS $5,605,000 in cash at closing. HSS will also be entitled to an earn-out payment of up to $4,045,000 twelve months after closing, subject to reduction on a pro-rata basis if EBITDA within the first year does not meet certain targets. On May 14, 2015, due to strong post-acquisition performance, the parties amended the HSS purchase agreement to cap the incentive earn-out at $5,000,000 and to accelerate the base earn-out to be paid as of the date of the amendment.

On April 8, 2015, TriGen also entered into an asset purchase agreement with Selective Risk Management LLC, a Pennsylvania limited liability company (“SRM”), and the shareholders of SRM effective April 1, 2015, pursuant to which we acquired substantially all of the assets of SRM for a maximum of $3,845,000. Pursuant to the SRM purchase agreement, we paid SRM $1,922,500 in cash at

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closing. SRM will also be entitled to an earn-out payment of up to $1,922,500 twelve months after closing, subject to reduction on a pro-rata basis if EBITDA within the first year does not meet certain targets. On May 14, 2015, due to strong post-acquisition performance, the parties amended the SRM purchase agreement to accelerate the earn-out to be paid as of the date of the amendment.

On April 17, 2015, Vikaran Technology Solutions, Inc. (“VTS”), our wholly owned subsidiary, entered into an agreement and plan of merger with Vikaran Solutions, LLC, an Illinois limited liability company (“Vikaran”), and certain members of Vikaran, pursuant to which Vikaran was merged with and into VTS. The merger closed on April 17, 2015 for a purchase price of $8,500,000 paid in cash at closing.

In connection with the Vikaran transaction, we also entered into a definitive agreement to purchase all of the outstanding stock of Mehta and Pazol Consulting Services Private Limited, an Indian private limited company (“MPCS”). MPCS is Vikaran’s software development center located in Pune, India. The purchase price for MPCS is expected to be approximately $1,500,000.

On April 24, 2015, Patriot Risk Services, Inc. (“PRS”), our wholly owned subsidiary, entered into a stock purchase agreement with Corporate Claims Management, Inc., a Missouri corporation (“CCMI”) and the shareholders of CCMI pursuant to which PRS acquired all of the outstanding equity of CCMI for $8,000,000 in cash plus a performance-based earn-out of up to $1,000,000. Pursuant to the CCMI purchase agreement, the Sellers will be entitled to the earn-out in two tranches. The first tranche will be up to $500,000 twelve months after closing, and the second tranche will be up to $500,000 fifteen months after closing, in each case subject to a reduction on a pro-rata basis if revenue during each earn-out period does not meet certain targets. Neither the Company nor PRS assumed any material liabilities under the CCMI purchase agreement. In connection with the transaction, which closed April 24, 2015, CCMI became a direct subsidiary of PRS.

On May 8, 2015, Contego Services Group, LLC (“Contego”), a 97% owned subsidiary of Patriot Services, Inc., entered into an asset purchase agreement with Candid Investigation Services, LLC, a New Mexico limited liability company (“Candid”), to acquire substantially all of the assets of Candid for a maximum of $1,500,000.  Pursuant to the asset purchase agreement, the Company paid $900,000 in cash at closing.  Candid will be entitled to earn-out payments totaling $600,000 in quarterly payments over twelve months after closing, subject to reduction on a pro-rata basis if revenue during each earn-out period does not meet certain targets.  

Key Performance Measures

We use certain key performance measures in evaluating our business and results of operations, and we may refer to one or more of these key performance measures in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These key performance measures include:

· Gross reference premium written: gross reference premium written refers to the aggregate premium, grossed up for large deductible credits, written by or for our insurance carrier partners in respect of the policies we produce and service on their behalf.

· Reference premium written: reference premium written refers to the earned aggregate premium, grossed up for large deductible credits, written by or for our insurance carrier partners in respect of the policies we produce and service on their behalf. For Guarantee Insurance, which records written premium on the effective date of the policy based on the estimated total premium for the term of the policy, reference written premium is equal to written premium based on the estimated total premium for the term of the policy, earned as of the effective date of the policy, grossed up for large deductible credits. Subsequent adjustments to the estimated total premium for the term of the policy are reflected as adjustments to reference written premium when the adjustments become known. For our third party insurance carrier clients, whom record written premium as premium is collected, reference written premium is equal to collected premium, grossed up for large deductible credits. We evaluate our business (in respect of revenue both from brokerage and policyholder services and from claims administrative services) both in respect of the overall revenue generated by reference premium written, and the margin on such revenue. With respect to our brokerage and policyholder services, changes in reference premium written generally correspond to changes in total revenues.

The policies we write for our insurance and reinsurance carrier clients generally have a term of one year, and reference premium written is earned by our insurance and reinsurance carrier clients on a pro rata basis over the terms of the underlying policies. Likewise, the claims associated with these policies are generally incurred on a pro rata basis over the terms of the underlying policies. Generally, we perform our claims administration services on a claim from the date it is incurred through the date it is closed. We refer to claims that have been incurred, but not yet closed, for a particular period as “managed claims exposures.” With respect to our claims administration services, changes in managed claims exposures generally correspond to changes in total revenues.

· Adjusted EBITDA: We define Adjusted EBITDA as net income (loss) adjusted for income tax expense (benefit), interest expense, depreciation and amortization expense, and certain non-cash and/or non-recurring transactions as shown in the Reconciliation from Net Income(Loss) to Adjusted EBITDA .

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· Adjusted EBITDA Margins: we define Adjusted EBITDA Margins as Adjusted EBITDA divided by the sum of fee income and fee income from related party.

· Operating Cash Flow: we define Operating Cash Flow as Adjusted EBITDA less income tax expense, interest expense, and capital expenditures.

· Adjusted Earnings: we define Adjusted Earnings or Loss and Adjusted Earnings or Loss per share as net income (loss) adjusted for cost for debt payoff, non-cash stock compensation costs,  net realized gains (losses) on investments, increase/(decrease) in fair value of warrant redemption liability, acquisition costs and loss on exchange of units and warrants.

We present Adjusted EBITDA, Adjusted EBITDA Margins, Operating Cash Flow and Adjusted Earnings in this report because they are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans.  In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA, Operating Cash Flow and Adjusted Earnings can provide useful measures for period-to-period comparisons of our core business.  Accordingly, we believe that Adjusted EBITDA, Operating Cash Flow and Adjusted Earnings provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Adjusted EBITDA, Adjusted EBITDA Margins, Operating Cash Flow and Adjusted Earnings have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our financial results under GAAP.  Some of these limitations are as follows:

· Although depreciations and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future;

· Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs or tax payments that may represent a reduction in cash available to us; and

· Other companies, including companies in our industry, may calculate Adjusted EBITDA, Operating Cash Flow and Adjusted Earnings or similarly titled measured differently, which reduce their usefulness as a comparative measure.

Reference Premium Written

	Three Months Ended March 31,
In millions	2015		2014
Gross Reference Premium Written	$	119,522	$	93,604
Reference Premium Written	$	103,002	$	99,487

Gross reference premium written for the three months ended March 31, 2015 was $119.5 million compared to $93.6 million for the three months ended March 31, 2014, an increase of $25.9 million. The increase was attributable to a $5.7 million increase in Guarantee Insurance gross reference premium written and the inception of new contracts with Scottsdale Insurance Company (“Scottsdale”), AIG and certain other insurance carrier clients, which generated $26.3 million of gross reference premium written. This increase was partially offset by a $6.0 million decrease in gross reference premium written on behalf of Zurich as a result of Zurich reducing its volumes in California, where business covered by our initial program with Zurich was solely written. In September 2014, we entered into a second program with Zurich that further expands coverage in multiple other states.

Reference premium written for the three months ended March 31, 2015 was $103.0 million compared to $99.5 million for the three months ended March 31, 2014, an increase of $3.5 million. The increase was attributable to a $5.7 million increase in Guarantee Insurance reference premium written and the inception of new contracts with Scottsdale and certain other insurance carrier clients, which generated $5.6 million of gross reference premium written. This increase was partially offset by a $7.8 million decrease in gross reference premium written on behalf of Zurich as a result of Zurich reducing its volumes in California, where business covered by our initial program with Zurich was solely written. In September 2014, we entered into a second program with Zurich that further expands coverage in multiple other states.

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Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure and is not in accordance with, or an alternative to, the GAAP information provided in this Quarterly Report on Form 10-Q. For further information regarding our use of non-GAAP financial measures and a reconciliation of Adjusted EBITDA to Net income (loss), see “—Reconciliations to Non-GAAP Key Performance Measures”.

	Three Months Ended March 31,
In thousands	2015			2014
Net (loss) income	$	(4,816	)	$	1,502
Adjusted EBITDA	$	10,828		$	5,079

Adjusted EBITDA for the three months ended March 31, 2015 was $10.8 million compared to $5.1 million for the three months ended March 31, 2014, an increase of $5.7 million. The increase was attributable to a $27.2 million increase in total revenues, partially offset by a $21.5 million increase in total expenses (excluding depreciation and amortization and changes in fair value of warrant liabilities, non-cash stock compensation and costs incurred for the extinguishment of debt which are added back to net income to arrive at Adjusted EBITDA), all of which are discussed more fully below.

Operating Cash Flow

Operating cash flow is a non-GAAP financial measure and is not in accordance with, or an alternative to, the GAAP information provided in this Quarterly Report on Form 10-Q. For further information regarding our use of non-GAAP financial measures and a reconciliation of Operating cash flow to Net income (loss), see “—Reconciliations to Non-GAAP Key Performance Measures”.

	Three Months Ended March 31,
In thousands	2015			2014
Net (loss) income	$	(4,816	)	$	1,502
Net cash provided by operating activities	$	937		$	2,707
Operating cash flow	$	8,226		$	2,694

Operating cash flow for the three months ended March 31, 2015 was $8.2 million compared to $2.7 million for the three months ended March 31, 2014, an increase of $5.5 million. The increase was primarily attributable to the increase in cash earnings as reflected in the $5.7 million increase in Adjusted EBITDA.

Adjusted Earnings

Adjusted Earnings is a non-GAAP financial measure and is not in accordance with, or an alternative to, the GAAP information provided in this Quarterly Report on Form 10-Q. For further information regarding our use of non-GAAP financial measures and a reconciliation of Operating cash flow to Net income (loss), see “—Reconciliations to Non-GAAP Key Performance Measures”.

	Three Months Ended March 31,
In thousands	2015			2014
Net (loss) income	$	(4,816	)	$	1,502
Adjusted earnings	$	4,599		$	1,502

Adjusted earnings for the three months ended March 31, 2015 was $4.6 million compared to $1.5 million for the three months ended March 31, 2014, an increase of $3.1 million. The increase was primarily attributable to the increase in Adjusted EBITDA of $5.7 million, partially offset by the income tax effect related to reconciling items in computing Adjusted Earnings.

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Results of Operations

The following table sets forth certain combined statement of operations data derived from our unaudited combined financial statements included elsewhere in this Quarterly Report on Form 10-Q.

	Three Months Ended March 31,
In thousands	2015			2014
Combined Statement of Operations Data
Revenues
Fee income	$	18,369		$	13,085
Fee income from related party		24,623			2,514
Total fee income and fee income from related party		42,992			15,599
Net investment income		1			209
Total Revenues		42,993			15,808
Expenses
Salaries and related expenses		14,468			3,901
Commission expense		8,889			1,722
Management fees to related party for administrative support services		—			2,187
Outsourced services		2,462			658
Allocation of marketing, underwriting and policy issuance costs from related party		—			610
Other operating expenses		6,331			1,630
Acquisition costs		604			—
Interest expense		1,173			1,313
Depreciation and amortization		2,303			1,006
Amortization of loan discounts and loan costs		85			321
Stock compensation expense		2,535			—
Decrease in fair value of warrant redemption liability		(1,385	)		—
Costs from debt payoff		13,681			—
Total Expenses		51,146			13,348
Net (Loss) Income before income tax (benefit) expense		(8,153	)		2,460
Income tax (benefit) expense		(3,352	)		937
Net (Loss) Income Including Non-Controlling Interest in Subsidiary		(4,801	)		1,523
Net Income attributable to Non-controlling interest in subsidiary		15			21
Net (Loss) Income	$	(4,816	)	$	1,502

Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

Revenues:

Total Revenue. Total revenue for the three months ended March 31, 2015 was $43.0 million compared to $15.8 million for the three months ended March 31, 2014, an increase of $27.2 million or approximately 172.2%. The increase in fee income during the first quarter of 2015 was primarily due to transactions that occurred in August of 2014, fee income we generated from new business produced with new carrier clients secured in 2014 and fee income from acquisitions completed in the first quarter of 2015.

For the three months ended March 31, 2015, approximately 83% of our total fee income and fee income from related party was attributable to our contracts with Guarantee Insurance, a related party, and approximately 10% of our total fee income and fee income from related party was attributable to contracts with our second largest client.

For the three months ended March 31, 2014, approximately 56% of our total fee income and fee income from related party was attributable to our contracts with Guarantee Insurance, and approximately 31% of our total fee income and fee income from related party were attributable to our contracts with our second largest client.

Fee Income. Fee income, which represents fee income from non-related parties, for the three months ended March 31, 2015 was $18.4 million compared to $13.1 million for the three months ended March 31, 2014, an increase of $5.3 million.

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This increase was attributable to fee income generated from increased reference premiums written, business produced with new client carriers secured in 2014 and fee income produced from the acquisitions completed in the first quarter of 2015.

Fee Income from Related Party. Fee income from related party for the three months ended March 31, 2015 was $24.6 million compared to $2.5 million for the three months ended March 31, 2014, an increase of $22.1 million.

“Fee income from related party” represents a portion of fee income earned from Guarantee Insurance, a related party as described above. Fee income from Guarantee Insurance for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance pursuant to quota share reinsurance agreements between Guarantee Insurance, PUI’s third party insurance company customers and the segregated portfolio cell reinsurers that assume business written by Guarantee Insurance. Certain fee income from third-party segregated portfolio cell reinsurers is remitted to the Company by Guarantee Insurance on behalf of the segregated portfolio cell reinsurers. Fee income from Guarantee Insurance for brokerage, underwriting and policyholder services represents fees for soliciting applications for workers’ compensation insurance for Guarantee Insurance, based on a percentage of premiums written or other amounts negotiated by the parties.

Because fee income from related party for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance, as described in Note 11, Concentration, the Company’s revenues attributable to contracts with Guarantee Insurance do not necessarily represent fee income from related party.

Net Investment Income. Net investment income was $1 thousand for the three months ended March 31, 2015 compared to $209 thousand for the three months ended March 31, 2014, a decrease of $208 thousand. Net investment income for the three months ended March 31, 2014 was principally attributable to a surplus note from prior years.

Expenses:

Salaries and Related Expenses. Salaries and related expenses for the three months ended March 31, 2015 were $14.5 million compared to $3.9 million for the three months ended March 31, 2014, an increase of $10.6 million or approximately 272%.

This increase was principally due to additional salary and salary related costs, beginning August 6, 2014 (as discussed elsewhere in this Quarterly Report on Form 10-Q), as a result of directly incurring salary and salary related costs associated with our brokerage and policyholder services, as well as salary and salary related costs associated with administrative support services, including executive management, information technology, accounting, human resources and legal services. Previously, we received an allocation for such brokerage and policyholder services costs from Guarantee Insurance Group as described below under “—Allocation of Marketing, Underwriting and Policy Issuance Costs from Related Party” below, and a portion of such administrative support services costs was incurred in the form of a management fee paid to Guarantee Insurance Group as described under “—Management Fees to Related Party for Administrative Support Services” below. Salary and salary related costs further increased in the period since August 6, 2014 as a result of the new agreement we entered into with Guarantee Insurance to provide all of our brokerage and policyholder services to Guarantee Insurance. In addition, effective August 6, 2014, we acquired the Patriot Care Management Business, which has notably increased our workforce. Accordingly, we expect further significant increases in salaries and related costs going forward.

Additionally, the increase was in part due to an increase in the size of our claims administration services staff in connection with our efforts to perform more claims investigation work in-house rather than through outsourced vendors.

Commission Expense. Commission expense for the three months ended March 31, 2015 was $8.9 million compared to $1.7 million for the three months ended March 31, 2014, an increase of $7.2 million or approximately 423%. This increase was principally due to the commission expense incurred in connection with new contracts we entered into in 2014 with Guarantee Insurance, Scottsdale, AIG and Zurich.

Management Fees to Related Party for Administrative Support Services. There were no management fees to related party for administrative support services for the three months ended March 31, 2015 compared to $2.2 million for the three months ended March 31, 2014. Effective August 6, 2014, these support services expenses are being incurred directly by us, and from that date forward we no longer pay management fees to Guarantee Insurance Group. Accordingly, beginning August 6, 2014, such expenses, rather than being reflected in this item, are recorded in the line items to which they relate, which are primarily “salaries and related expenses,” “outsourced services” and “other operating expenses.”

Outsourced Services. Outsourced services for the three months ended March 31, 2015 were $2.5 million compared to $0.7 million for the three months ended March 31, 2014, an increase of $1.8 million or approximately 257.1%. This increase was principally due to the acquisition of Patriot Care Management, Inc.

Allocation of Marketing, Underwriting and Policy Issuance Costs from Related Party. There was no allocation of marketing, underwriting and policy issuance costs from Guarantee Insurance Group, a related party, for the three months ended March 31, 2015  compared to $0.6 million for the three months ended March 31, 2014. Effective August 6, 2014, such costs are being incurred directly by us, and from that date forward, Guarantee Insurance Group is no longer allocating these costs to us. Accordingly, beginning August 6, 2014, such expenses, rather than being reflected in this item, are recorded in the line items to which they relate.

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Other Operating Expenses. Other operating expenses for the three months ended March 31, 2015 were $6.3 million compared to $1.6 million for the three months ended March 31, 2014, an increase of $4.7 million or approximately 294%. The increase of other operating expense corresponds to the direct costs incurred as a result of eliminating management fees and expense allocations from Guarantee Insurance.

Interest Expense. Interest expense for the three months ended March 31, 2015 was $1.2 million compared to $1.3 million for the three months ended March 31, 2014, a decrease of $0.1 million. Interest expense for the three months ended March 31, 2015, is comprised of $0.9 million of interest accrued for the PennantPark Debt and the UBS Debt prior to repayment on January 22, 2015 and $0.3 million on the Senior Secured Credit Facility from January 22, 2015 until March 31, 2015. Interest expense for the three months ended March 31, 2014 was comprised of interest on the PennantPark Debt then outstanding. The decrease in interest expense was a result of the refinancing of our debt with more favorable terms.

Depreciation and Amortization. Depreciation and amortization for the three months ended March 31, 2015 was $2.3 million compared to $1.0 million for the three months ended March 31, 2014, an increase of $1.3 million. The increase was attributable mainly to the increased intangible asset amortization associated with our acquisitions.

Amortization of Loan Discounts and Loan Costs. Amortization of loan discounts and loan costs was $0.1 million for the three months ended March 31, 2015, compared to $0.3 million for the three months ended March 31, 2014, a decrease of $0.2 million. The decrease was attributable to the write-off of loan discounts and deferred loan costs upon repayment of the PennantPark Debt and UBS Debt on January 22, 2015.

Stock Compensation Expense. The Company recognized $2.5 million of stock compensation expense during the three months ended March 31, 2015 related to stock and stock option awards in connection with our IPO. See Note 8, Stock-Based Compensation for further detail related to these awards and the recognized expense.

Cost from Debt Payoff. The Company recognized expenses for “Make-Whole” payments upon repayment of the PennantPark Debt and UBS Debt on January 22, 2015. These expenses were comprised of $3.8 million to the PennantPark Entities and $0.6 million to UBS.  Due to the magnitude of these expenses, they are presented separately from interest expense in our combined results for the three months ended March 31, 2015.

Additionally, The Company recognized expenses for the write-off of existing deferred financing of $6.3 million and original issue discounts of $3.1 million associated with the PennantPark Debt and UBS Debt upon repayment on January 22, 2015.  Due to the magnitude of these expenses, they are presented separately from interest expense and amortization expense, respectively, in our combined results for the three months ended March 31, 2015.

Total cost from debt payoff was $13.7 million for the three months ended March 31, 2015.

Decrease in Fair Value of Warrant Redemption Liability. The decrease in fair value of warrant redemption liability was $1.4 million for the three months ended March 31, 2015. This reflects the change in fair value from estimated valuation on December 31, 2014 to the exercise of the detachable common stock warrants on January 22, 2015. There was no fair value warrant redemption liability adjustment for the three months ended March 31, 2014. Additionally, there were no remaining warrant redemption liability as of March 31, 2015, and no future fair value adjustments are required.

Acquisition Costs. As of  March 31, 2015, we incurred $0.6 million of acquisition costs. These costs were predominantly comprised of salary expense, salary related costs and other fees.

Income Tax Expense. Income tax benefit was $3.4 million for the three months ended March 31, 2015 compared to income tax expense  of  $0.9 million for the three months ended March 31, 2014, a decrease in income tax expense of $4.3 million. For the three months ended March 31, 2015 the effective income tax rates were approximately 42%.  The effective tax rate is based on forecasted annual pre-tax income, permanent differences and statutory tax rates.  The main difference in the effective tax rate from the statutory rate is warrants, success based fees, and meals and entertainment.

Net Income:

As a result of the factors described above, net income (loss) decreased by $6.3 million to $(4.8) million for the three months ended March 31, 2015 as compared to $1.5 million for the three months ended March 31, 2014.

Earnings per Share:

    Basic earnings per share is based on weighted average shares outstanding and excludes dilutive effects of detachable common stock warrants and incentive awards of restricted stock and stock options.  Diluted earnings per share assumes the exercise of all detachable common stock warrants and incentive stock options and the issuance of restricted stock using the treasury stock method.  Due to the

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net loss for the three months ending March 31, 2015 weighted average outstanding detachable common stock warrants representing 229,267 shares of common stock outstanding, and restricted shares representing 46,372 shares of common stock outstanding, were not dilutive.

Seasonality

Our revenue and operating results associated with our claims administration services are generally not subject to seasonality.

Our revenue and operating results associated with our brokerage and policyholder services are generally subject to seasonal variations as a result of the distribution of renewal dates of existing policies throughout the year, with slightly more renewals occurring in the first and third calendar quarter based on the current distribution of such dates.

Impact of Inflation

Although we cannot accurately anticipate the effect of inflation on our operations, we believe that inflation has not had a material impact on our results of operations during the last two fiscal years, nor do we believe it is likely to have such a material impact in the foreseeable future.

Liquidity and Capital Resources

Sources and Uses of Funds

Our principal needs for liquidity have been, and for the foreseeable future will continue to be, working capital, capital expenditures and funding potential acquisitions, potential redemption of detachable common stock warrants, as well as servicing our Senior Secured Credit Facility. Our primary sources of liquidity include cash flows from operations and available cash and cash equivalents.

We believe that our cash flow from operations and available cash and cash equivalents will be sufficient to meet our liquidity needs for the foreseeable future. As of March 31, 2015, our unrestricted cash and cash equivalents were $11.3 million. In addition, as of March 31, 2015, we had $14.0 million of restricted cash, which are funds we receive from our insurance carrier clients and that are earmarked exclusively for payments of claims on behalf of such clients. We cannot use such funds for other purposes.

To the extent we require additional liquidity, we anticipate that it will be funded through the incurrence of other indebtedness (which may include capital markets indebtedness, our Senior Secured Credit Facility or indebtedness under other credit facilities), equity financings or a combination thereof. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions.

Cash Flows

The following table summarizes our cash flow activities for the three months ended March 31, 2015 and 2014.

	Three Months Ended March 31,
In thousands	2015			2014
Cash flow activities:
Net Cash Provided by Operating Activities	$	937		$	2,707
Net Cash Used in Investment Activities		(12,964	)		(613	)
Net Cash Provided by (Used in) Financing Activities		19,081			(2,100	)

Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2015 was $0.9 million compared to $2.7 million for the three months ended March 31, 2014, a decrease of $1.8 million. This decrease was attributable to our net loss of $4.8 million plus non-cash transactions totaling $13.0 million less cash used for working capital of $7.3 million.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2015 was $13.0 million compared to $0.6 million for the three months ended March 31, 2014, an increase of $12.4 million. This increase was attributable to an increase in restricted cash of $4.9 million, the purchase of fixed assets and other intangible assets of $1.4 million and funding for acquisitions, net of cash acquired of $6.7 million.

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Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2015 was $19.1 million compared to net cash used in financing activities of $2.1 million for the three months ended March 31, 2014, an increase of $21.2 million. This increase was attributable to the proceeds from the IPO and new debt structure less the repayment of previous debt and capital lease payments.

Capital Expenditures

For the three months ended March 31, 2015, we made capital expenditures of $1.4 million primarily attributable to capitalized software development. For the three months ended March 31, 2014, we made capital expenditures of $0.1 million.

Indebtedness

As of March 31, 2015, we had a total of $40.0 million of Term Loan debt outstanding under our Senior Secured Credit Facility, $4.8 million outstanding under our revolvingcredit facility and $4.0 million of capital leases outstanding.

Senior Secured Credit Facility

On January 22, 2015, we entered into a credit agreement which provides for a $40.0 million revolving credit facility and a $40.0 million term loan facility (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility has a maturity of five years, and borrowings thereunder bear interest, at our option, at LIBOR plus a margin ranging from 250 basis points to 325 basis points or at base rate plus a margin ranging from 150 basis points to 225 basis points. Margins on all loans and fees will be increased by 2% per annum during the existence of an event of default. The revolving credit facility includes borrowing capacity available for letters of credit and borrowings on same-day notice, referred to as swing line loans. At any time prior to maturity, we have the right to increase the size of the revolving credit facility or the term loan facility by an aggregate amount of up to $20.0 million, but in minimum increments of $5.0 million.

As of March 31, 2015, the outstanding balance under the $40 million revolving credit facility was $4.8 million. Accordingly, the Company has $35.2 million available to borrow under the revolving credit facility.

In addition to paying interest on outstanding principal under the Senior Secured Credit Facility, we are required to pay a commitment fee to the Administrative Agent for the ratable benefit of the lenders under the revolving credit facility in respect of the unutilized commitments thereunder, ranging from 35 basis points to 50 basis points, depending on specified leverage ratios. With respect to letters of credit, we are also required to pay a per annum participation fee equal to the applicable LIBOR margin on the face amount of each letter of credit as well as a fee equal to 0.125% on the face amount of each letter of credit issued (or the term of which is extended). This latter 0.125% fee is payable to the issuer of the letter of credit for its own account, along with any standard documentary and processing charges incurred in connection with any letter of credit.

The term loan facility amortizes quarterly beginning the first full quarter after the closing date at a rate of 5% per annum of the original principal amount during the first two years, 7.5% per annum of the original principal amount during the third and fourth years and 10% per annum of the original principal amount during the fifth year, with the remainder due at maturity. Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity. In the event of any sale or other disposition by us or our subsidiaries guaranteeing the Senior Secured Credit Facility of any assets with certain exceptions, we are required to prepay all proceeds received from such a sale towards the remaining scheduled payments of the term loan facility.

In addition, all obligations under the Senior Secured Credit Facility are guaranteed by all of our existing and future subsidiaries, other than foreign subsidiaries to the extent the assets of all foreign subsidiaries that are not guarantors do not exceed 5% of the total assets of us and our subsidiaries on a combined basis, and secured by a first-priority perfected security interest in substantially all our and our guaranteeing subsidiaries’ tangible and intangible assets, whether now owned or hereafter acquired, including a pledge of 100% of the stock of each guarantor.

The Senior Secured Credit Facility contains certain covenants that, among other things and subject to significant exceptions, limit our ability and the ability of our restricted subsidiaries to engage in certain business and financing activities and that require us to maintain certain financial covenants, including requirements to maintain (i) a maximum total leverage ratio of total outstanding debt to adjusted EBITDA for the most recently-ended four fiscal quarters of no more than 300% and (ii) a minimum fixed charge coverage ratio of adjusted EBITDA to the sum of cash interest expense (which amount shall be calculated on an annualized basis for the three, six and nine month periods ending March 31, 2015, June 30, 2015 and September 30, 2015) plus income tax expense (or less any income tax benefits) plus capital expenditures plus dividends, share repurchases and other restricted payments plus regularly scheduled principal payments of debt for the same period of a least 150% for the most recently-ended four quarters. The Senior Secured Credit Facility allows us to pay dividends in an amount up to 50% of our net income if certain other financial conditions are met. The Senior Secured Credit Facility contains other restrictive covenants, including those regarding indebtedness (including capital leases) and guarantees; liens; operating leases; investments and acquisitions; loans and advances; mergers, consolidations and other

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fundamental changes; sales of assets; transactions with affiliates; no material changes in nature of business; dividends and distributions, stock repurchases, and other restricted payments; change in name, jurisdiction of organization or fiscal year; burdensome agreements; and capital expenditures. The Senior Secured Credit Facility also has events of default that may result in acceleration of the borrowings thereunder, including (i) nonpayment of principal, interest, fees or other amounts (subject to customary grace periods for items other than principal); (ii) failure to perform or observe covenants set forth in the loan documentation (subject to customary grace periods for certain affirmative covenants); (iii) any representation or warranty proving to have been incorrect in any material respect when made; (iv) cross-default to other indebtedness and contingent obligations in an aggregate amount in excess of an amount to be agreed upon; (v) bankruptcy and insolvency defaults (with grace period for involuntary proceedings); (vi) inability to pay debts; (vii) monetary judgment defaults in excess of an agreed upon amount; (viii) ERISA defaults; (ix) change of control; (x) actual invalidity or unenforceability of any loan document, any security interest on any material portion of the collateral or asserted (by any loan party) invalidity or unenforceability of any security interest on any collateral; (xi) actual or asserted (by any loan party) invalidity or unenforceability of any guaranty; (xii) material unpaid, final judgments that have not been vacated, discharged, stayed or bonded pending appeal within a specified number of days after the entry thereof; and (xiii) any other event of default agreed to by us and the Administrative Agent.

As of March 31, 2015, we were in compliance with the financial and other restrictive covenants under our outstanding material debt obligations, including our Senior Secured Credit Facility.

Repayment of UBS Credit Agreement

On August 6, 2014, in connection with the Patriot Care Management Acquisition, we and certain of our subsidiaries entered into the UBS Credit Agreement, which provided for a five-year term loan facility in an aggregate principal amount of $57.0 million that would mature on August 6, 2019. The loan was secured by the common stock of Patriot Care Management, Inc. and guaranteed by Guarantee Insurance Group and its wholly owned subsidiaries. Following our initial public offering, we prepaid all outstanding borrowings under the UBS Credit Agreement, including accrued interest and applicable prepayment premium.

Our borrowings under the UBS Credit Agreement bore interest at a rate equal to the greatest of (x) the base rate in effect on such day, (y) the federal funds rate in effect on such day plus 0.50% and (z) the adjusted LIBOR rate on such day for a one-month interest period plus 1.00%, subject to a minimum rate, plus an applicable margin of 8.00%, which may be increased by additional amounts under certain specified circumstances.

Repayment of PennantPark Loan Agreement

On August 6, 2014, in connection with the GUI Acquisition, we and certain of our subsidiaries, as borrowers, and certain of our other subsidiaries and certain affiliated entities, as guarantors, entered into the PennantPark Loan Agreement with the PennantPark Entities, as lenders. Following our initial public offering, we prepaid all outstanding borrowings under the PennantPark Loan Agreement, including accrued interest and applicable prepayment premium.

Borrowings under the PennantPark Loan Agreement were comprised of (i) an Initial Tranche in an aggregate principal amount of approximately $37.8 million, and (ii) an Additional Tranche in an aggregate principal amount of approximately $30.8 million of new borrowings. Our borrowings under the PennantPark Loan Agreement were funded at a price equal to 97.5% of the par value thereof and bore interest equal to the sum of (i) the greater of 1.0% or LIBOR and (ii) 11.50%.

All obligations under the PennantPark Loan Agreement were guaranteed by certain of our subsidiaries as well as several affiliated entities, including GUI, and were generally secured by the tangible and intangible property of the borrowers and the guarantors. In connection with both tranches of the PennantPark Loan Agreement, we issued warrants to the PennantPark Entities to purchase an aggregate of 1,110,555 shares of our common stock.

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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

The Company has employment agreements with certain executives and other employees, which provide for compensation and certain other benefits and for severance payments under certain circumstances.  The employment agreements contain clauses that become effective upon a change of control of the Company.  Upon the occurrence of any of the defined events in the employment agreements, the Company would be obligated to pay certain amounts to the relevant employees.

The Company maintains cash at various financial institutions and, at times, balances may exceed federal insured limits.  Management does not believe this results in any material effect on the Company’s financial position or results of operations.  In the normal course of business, the Company may be party to various legal actions that management believes will not result in any material effect on the Company’s financial position or results of operations.

Recently Issued Financial Accounting Standards

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-03, Simplifying the Presentation of Debt Issuance Costs. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The update requires retrospective application. ASU 2015-03 is effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted but we do not anticipate electing early adoption.

In August 2014, the FASB issued ASU 2014-15 regarding Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements – Going Concern. The updated guidance related to determining whether substantial doubt exists about an entity's ability to continue as a going concern. The amendment provides guidance for determining whether conditions or events give rise to substantial doubt that an entity has the ability to continue as a going concern within one year following issuance of the financial statements and requires specific disclosures regarding the conditions or events leading to substantial doubt. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted, but we do not anticipate electing early adoption. We do not expect the adoption of this guidance to have a material impact on our combined financial statements.

In May 2014, the FASB issued ASU 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers. The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. For a publicly-held entity, this guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is not permitted. We are currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

In April 2014, the FASB issued ASU 2014-08 regarding ASC Topics 205 and 360, Reporting Discontinued Operations. The updated guidance related to reporting discontinued operations and disclosures of disposals of components of an entity. Under the amendment, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Additionally, the elimination of the component's operations, cash flows and significant continuing involvement conditions have been removed. Further, an equity method investment could be reported as discontinued operations. The updated guidance is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning after December 15, 2014. The adoption of this guidance has not had a material impact on our combined financial statements.

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JOBS Act

The JOBS Act contains provisions that, among other things, allows an emerging growth company to take advantage of specified reduced reporting requirements. In particular, the JOBS Act provides that an emerging growth company can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have elected to take advantage of such extended transition period, and, as a result, we will not be required to comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not emerging growth companies.

Reconciliations to Non-GAAP Key Performance Measures

	Three Months Ended March 31,
	2015			2014
	(In thousands)
Reconciliation from Net Income (Loss) to Adjusted EBITDA:
Net Income (Loss)	$	(4,816	)	$	1,502
Income tax (benefit) expense		(3,352	)		937
Interest expense		1,173			1,313
Depreciation and amortization		2,388			1,327
EBITDA		(4,607	)		5,079
Costs from debt payoff		13,681			—
Decrease in fair value of warrant redemption liability		(1,385	)		—
Stock compensation expense		2,535			—
Acquisition costs		604			—
Adjusted EBITDA	$	10,828		$	5,079
Calculation of Adjusted EBITDA margins:
Total Fee Income	$	42,992		$	15,599
Adjusted EBITDA		10,828			5,079
Adjusted EBITDA margins		25.2	%		32.6	%

	Three Months Ended March 31,
	2015			2014
	(In thousands)
Reconciliation to Operating Cash Flow:
Adjusted EBITDA (calculated above)	$	10,828		$	5,079
Less: Income tax expense		—			(937	)
Less: Interest expense		(1,173	)		(1,313	)
Less: Purchase of fixed assets and other long-term assets		(1,429	)		(135	)
Operating cash flow	$	8,226		$	2,694

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	Three Months Ended March 31,
	2015			2014
	(In thousands)
Reconciliation from Net Cash Provided by Operating Activities to    Operating Cash Flow:
Net Cash Provided by Operating Activities	$	937		$	2,707
Changes in certain assets and liabilities:
Increase (decrease) in:
Fee income receivable		521			1,042
Fee income receivable from related party		1,752			(693	)
Other current assets		592			55
Decrease (increase) in:
Net payable to related parties		(1,747	)		(1,136	)
Deferred claims administration services income		210			(283	)
Net advanced claims reimbursements		(625	)		(313	)
Income taxes payable, net of income tax benefit of $3.3 million and $0 in the    three months ended March 31, 2015 and 2014, respectively		11,596			(274	)
Accounts payable and accrued expenses		(8,359	)		469
Net income or (loss) attributable to business generated by GUI, exclusive of    depreciation expense		—			1,276
Net (income) loss attributable to non-controlling interest in subsidiary		(15	)		(21	)
Early payment penalties on repayment of debt		4,339			—
Acquisition costs		604			—
Provision for uncollectible fee income, not related to Ullico		(150	)		—
Purchase of fixed assets and other long-term assets		(1,429	)		(135	)
Operating cash flow	$	8,226		$	2,694

	Three Months Ended March 31,
	2015			2014
	(In thousands)
Reconciliation from Net (Loss) Income to Adjusted Earnings:
Net (Loss) Income	$	(4,816	)	$	1,502
Costs from debt payoff		13,681			—
Decrease in fair value of warrant redemption liability		(1,385	)		—
Stock compensation expense		2,535			—
Acquisition costs		604			—
Income tax effect related to reconciling items		(6,020	)		—
Adjusted Earnings	$	4,599		$	1,502
Calculation of Adjusted Earnings Per Common Share
Basic	$	0.18		$	0.11
Diluted		0.18			0.10
Weighted Average Common Shares Outstanding
Basic		25,163			14,288
Diluted		25,439			15,499

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2015, we were not subject to any material interest rate risk or credit risk, and we had no exposure to foreign currency risk.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not a party to any pending legal proceedings that we believe are material to us. We may, from time to time, be party to litigation and subject to claims incident to the ordinary course of our business. In the normal course of the workers’ compensation insurance services business, we have been named as a defendant in suits related to decisions by us or our clients with respect to the settlement of claims or other matters arising out of the services we provide. In the opinion of management, adequate reserves have been provided for such matters. However, we cannot provide any assurances that the result of any such actions, claims or proceedings, now known or occurring in the future, individually or in the aggregate, will not result in a material adverse effect on our business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014. Other than as described below, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

We have acquired a number of insurance services firms in a short period of time, and there are risks associated with such acquisitions, which could adversely affect our growth and results of operations.

     We have recently acquired a number of insurance services firms in a short period of time. We believe that similar acquisition activity will be important to maintaining comparable growth in the future. Failure to successfully identify and complete acquisitions likely would likely result in slower growth. Even if we are able to identify appropriate acquisition targets, we may not be able to execute transactions on favorable terms or integrate targets in a manner that allows us to fully realize the anticipated benefits from these acquisitions. Our ability to finance and integrate acquisitions may also suffer if we expand the number or size of our acquisitions.

     Post-acquisition risks include those relating to retention of personnel, retention of clients, entry into unfamiliar markets or lines of business, contingencies or liabilities, such as violations of sanctions laws or anti-corruption laws, risks relating to ensuring compliance with licensing and regulatory requirements, tax and accounting issues, distractions to  management and personnel from our existing business and integration difficulties relating to accounting, information technology, human resources, or organizational culture and fit, some or all of which could have an adverse effect on our results of operations and growth. Post-acquisition deterioration of targets could also result in lower or negative earnings contribution and/or goodwill impairment charges.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) None.

(b) None.

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ITEM 6. EXHIBITS

Exhibit Number	Exhibit Description
2.1	Asset Purchase Agreement dated as of January 31, 2015 by and between Patriot National, Inc. and Phoenix Risk Management, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on February 5, 2015 (File no. 001-36804))
2.2	Stock Purchase Agreement dated as of March 31, 2015 by and between Patriot Services, Inc. and TriGen Holdings Group, Inc., and certain shareholders of TriGen Holdings Group, Inc. (“TriGen Stock Purchase Agreement”)
2.3	Amendment No. 1 to TriGen Stock Purchase Agreement dated as of April 13, 2015, by and between Patriot Services, Inc. and TriGen Insurance Solutions, Inc. (as successor by merger to TriGen Holdings Group, Inc.).
2.4	Asset Purchase Agreement dated as of April 8, 2015 by and between TriGen Insurance Solutions, Inc. and Hospitality Supportive Systems, LLC (the “HSS Asset Purchase Agreement”)
2.5	Asset Purchase Agreement dated as of April 8, 2015 by and between TriGen Insurance Solutions, Inc. and Selective Risk Management LLC (the “SRM Asset Purchase Agreement”)
2.6	Agreement and Plan of Merger dated as of April 17, 2015, by and among Patriot National, Inc., Vikaran Technology Solutions, Inc., Vikaran Solutions, LLC and certain members of Vikaran Solutions, LLC (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on April 20, 2015 (File No. 001-36804))
2.7	Stock Purchase Agreement dated as of April 24, 2015, by and among Corporate Claims Management, Inc. (“CCMI”), the shareholders of CCMI, and Patriot Risk Services, Inc.
2.8	Amendment No. 1 to HSS Asset Purchase Agreement dated as of May 14, 2015, by and between TriGen Insurance Solutions, Inc. and Hospitality Supportive Systems, LLC.
2.9	Amendment No. 1 to SRM Asset Purchase Agreement dated as of May 14, 2015, by and between TriGen Insurance Solutions, Inc. and Selective Risk Management LLC.
2.10	Asset Purchase Agreement dated as of May 8, 2015, by and among Contego Services Group, LLC and Candid Investigation Services, L.L.C.
3.1	Amended and Restated Certificate of Incorporation of Patriot National, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on January 22, 2015 (File no. 001-36804))
3.2	Amended and Restated By-Laws of Patriot National, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on January 22, 2015 (File no. 001-36804))
4.1	Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on January 6, 2015 (File no. 333-200972))
4.2	Amended and Restated Stockholders Agreement, dated as of January 5, 2015, among Steven M. Mariano, John R. Del Pizzo, as Minority Stockholder, PennantPark Investment Corporation, PennantPark Floating Rate Capital Ltd., PennantPark SBIC II LP, PennantPark Credit Opportunities Fund LP and Patriot National, Inc. (incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on January 6, 2015 (File no. 333-200972))
4.3	Registration Rights Agreement, dated as of January 5, 2015, by and between Patriot National, Inc. and Steven M. Mariano (incorporated by reference to Exhibit 4.3 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on January 6, 2015 (File no. 333-200972))
4.4	Amended and Restated Common Stock Purchase Agreement, dated as of January 5, 2015, between Advantage Capital Community Development Fund, L.L.C., as holder, and Patriot National, Inc. (incorporated by reference to Exhibit 4.4 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on January 6, 2015 (File no. 333-200972))
10.1*	Patriot National, Inc. 2014 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on January 22, 2015 (File no. 001-36804))
10.2*	Executive Employment Agreement, dated as of January 5, 2015, by and between Patriot National, Inc. and Thomas Shields (incorporated by reference to Exhibit 10.15 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on January 6, 2015 (File no. 333-200972))

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Exhibit Number	Exhibit Description
10.3	Credit Agreement, dated as of January 22, 2015, by and among Patriot National, Inc., the Lenders party thereto and BMO Harris Bank N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 22, 2015 (File no. 001-36804))
31.1	Certificate of Steven M. Mariano, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certificate of Thomas C. Shields, Executive Vice President, Chief Financial Officer and Treasurer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certificate of Steven M. Mariano, President and Chief Executive Officer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2	Certificate of Thomas C. Shields, Executive Vice President, Chief Financial Officer and Treasurer, pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* This document has been identified as a management contract or compensatory plan or arrangement.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PATRIOT NATIONAL, INC.
Date: May 14, 2015	By:	/s/ Thomas C. Shields
		Executive Vice President, Chief Financial Officer
		& Treasurer

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EX-2.2

Exhibit 2.2

STOCK PURCHASE AGREEMENT

by and among

TriGen Holdings Group, Inc.,

Patriot Services, Inc.,

and

The Stockholders Named on the

Signature Pages Hereto,

Dated as of March 31, 2015

ARTICLE I PURCHASE AND SALE OF THE SHARES		1
Section 1.1	Purchase and Sale	1
Section 1.2	Class A Purchase Price	1
Section 1.3	Class B Purchase Price	1
Section 1.4	Closing	1
ARTICLE II CONSIDERATION AND MANNER OF PAYMENT		2
Section 2.1	Payments at Closing	2
Section 2.2	Subsequent Payments	2
Section 2.3	Class A Sellers’ Earn-Out	2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY		3
Section 3.1	Organization and Qualification	3
Section 3.2	Authorization; Enforceability	3
Section 3.3	Organizational Documents	3
Section 3.4	Capitalization	4
Section 3.5	Options	4
Section 3.6	No Violation	4
Section 3.7	Consents	4
Section 3.8	Financial Statements	5
Section 3.9	Absence of Undisclosed Liabilities	5
Section 3.10	Absence of Certain Changes; Cash on Hand	5
Section 3.11	Taxes	6
Section 3.12	Material Contracts	6
Section 3.13	Real Property	6
Section 3.14	Personal Property	7
Section 3.15	Intellectual Property and Information Technology	7
Section 3.16	Insurance Policies	7
Section 3.17	Litigation	7
Section 3.18	Compliance with Applicable Laws	7
Section 3.19	Regulatory Compliance	8
Section 3.20	Compliance with Environmental, Health and Safety Requirements	8
Section 3.21	Employee Benefit Plans	8
Section 3.22	Labor; Employment	8
Section 3.23	Books and Records	9
Section 3.24	Brokers	9
Section 3.25	Banks	9
Section 3.26	Customers	9
Section 3.27	Full Disclosure	10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS		10
Section 4.1	Authorization; Enforceability	10
Section 4.2	Title to Shares	10
Section 4.3	No Consents	10
Section 4.4	Litigation	10
Section 4.5	No Violation	10
Section 4.6	Foreign Person	11
Section 4.7	Brokers	11

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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER		11
Section 5.1	Organization and Qualification	11
Section 5.2	Authorization; Enforceability	11
Section 5.3	No Consents	11
Section 5.4	Litigation	11
Section 5.5	No Violation	11
ARTICLE VI CLOSING		11
Section 6.1	Time and Place	11
Section 6.2	Deliveries by the Company and the Sellers	12
Section 6.3	Deliveries by the Buyer	12
ARTICLE VII POST CLOSING COVENANTS		12
Section 7.1	Tax Covenants	12
Section 7.2	Access to Books and Records	14
Section 7.3	Non-Competition; Non-Solicitation; Confidentiality	14
Section 7.4	Preservation of Records	16
Section 7.5	Use of Name	17
Section 7.6	Post-Closing Matters	17
Section 7.7	General	17
ARTICLE VIII INDEMNIFICATION		17
Section 8.1	Survival of the Company’s and the Sellers’ Representations, Warranties and Covenants; Time Limits on Indemnification Obligations	17
Section 8.2	Survival of the Buyer’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations	17
Section 8.3	Indemnification by the Sellers	17
Section 8.4	Indemnification by the Buyer	18
Section 8.5	Indemnification Procedure for Third Party Claims	18
Section 8.6	Treatment of Indemnification	19
Section 8.7	No Right of Contribution	19
ARTICLE IX DEFINITIONS		20
ARTICLE X MISCELLANEOUS		25
Section 10.1	Notices, Consents, etc	25
Section 10.2	Severability	25
Section 10.3	Successors; Assignment	26
Section 10.4	Counterparts; Facsimile Signatures	26
Section 10.5	Expenses	26
Section 10.6	Governing Law	26
Section 10.7	Table of Contents and Headings	26
Section 10.8	Entire Agreement	26
Section 10.9	Third Parties	26
Section 10.10	Disclosure Generally	26
Section 10.11	Interpretive Matters	27
Section 10.12	Construction	27
Section 10.13	Submission to Jurisdiction	27

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Section 10.14	Waiver of Jury Trial	28
Section 10.15	Press Releases and Communications	28
Section 10.16	Sellers’ Release	28

SCHEDULES:

Schedule 2.1	-	Payments at Closing
Schedule 2.2	-	Subsequent Payments
Schedule 3.1	-	Organization and Qualification
Schedule 3.3	-	Directors and Officers
Schedule 3.4	-	Capitalization
Schedule 3.5	-	Options
Schedule 3.7(a)	-	Third Party Consents
Schedule 3.7(b)	-	Governmental Consents
Schedule 3.8(a)	-	Annual Financial Statements
Schedule 3.8(b)	-	Interim Financial Statements
Schedule 3.9	-	Absence of Undisclosed Liabilities
Schedule 3.12	-	Material Contracts
Schedule 3.13	-	Real Property
Schedule 3.15	-	Intellectual Property
Schedule 3.17	-	Litigation
Schedule 3.19	-	Licenses and Permits
Schedule 3.21	-	Employee Benefit Plans
Schedule 3.22	-	Employees
Schedule 3.25	-	Banks
Schedule 3.26	-	Customers
Schedule 7.6	-	Post-Closing Matters

EXHIBITS:

Exhibit A - Demand Notes

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of March 31, 2015, by and among TriGen Holdings Group, Inc., a Delaware corporation (the “Company”), Carla A. Busick and W. Christopher Rhoden, each an individual (together, the “Class A Sellers”), Martin H. Jones, an individual (the “Class B Seller”, and together with the Class A Sellers, the “Sellers”), and Patriot Services, Inc., a Delaware corporation (the “Buyer”). Each of the parties named above may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used, but not otherwise defined, herein shall have the meanings set forth in Article IX below.

RECITALS

WHEREAS, the Sellers own all of the issued and outstanding shares of capital stock of the Company (the “Shares”) as of the date hereof, as described in the attached Schedule 3.4;

WHEREAS, the Buyer desires to purchase from the Class A Sellers, and the Class A Sellers desire to sell to the Buyer, the all of the shares of Class A common stock (“Class A Shares”), pursuant to the terms and subject to the conditions set forth in this Agreement;

WHEREAS, the Buyer desires to purchase from the Class B Seller, and the Class B Seller desires to sell to the Buyer, the all of the shares of Class B common stock (“Class B Shares”), pursuant to the terms and subject to the conditions set forth in this Agreement; and

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I
PURCHASE AND SALE OF THE SHARES

Section 1.1Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, at the Closing the Buyer shall purchase, acquire and accept the Shares from the Sellers, and the Sellers shall sell, convey, assign and transfer the Shares to the Buyer, free and clear of all Liens and together with all rights now and hereafter attaching thereto.

Section 1.2Class A Purchase Price. Subject to the terms and conditions set forth herein, the purchase price for the Class A Shares shall be an amount equal to (a) Three Million Two Hundred Forty Thousand Dollars ($3,240,000); plus (b) the amount of the Earn-Out, if any, pursuant to Section 2.3. The aggregate amount shall be up to Four Million Seven Hundred Forty Thousand Dollars ($4,740,000) (the “Class A Purchase Price”). The Purchase Price shall be paid in the amount and in the manner set forth in Article II.

Section 1.3Class B Purchase Price. Subject to the terms and conditions set forth herein, the purchase price for the Class B Shares (the “Class B Purchase Price”) shall be an amount equal to Five Million Dollars ($5,000,000). The Purchase Price shall be paid in the amount and in the manner set forth in Article II.

Section 1.4Closing. The closing of the purchase and sale of the Shares (the “Closing”) shall take place on the date hereof (the “Closing Date”) and shall be effective as of 12:01 a.m. Eastern Time on the Closing Date.

ARTICLE II
CONSIDERATION AND MANNER OF PAYMENT

Section 2.1Payments at Closing. On the Closing Date, the Buyer shall pay to the Class A Sellers Three Million Two Hundred Forty Thousand Dollars ($3,240,000) by wire transfer of immediately available funds to the bank account specified by the Class A Sellers on Schedule 2.1 in the amounts set forth on Schedule 2.1.

Section 2.2Subsequent Payments.  On the one-year anniversary of the Closing Date, the Buyer shall pay to the Class B Seller Five Million Dollars ($5,000,000) by wire transfer of immediately available funds to the bank account specified by the Class B Seller on Schedule 2.2 in the amounts set forth on Schedule 2.2.

Section 2.3Class A Sellers’ Earn-Out. The Class A Sellers shall receive, as additional Purchase Price, an earn-out based on Actual EBITDA for the Measurement Period attributable to accounts  purchased from the Class A Sellers as of the Closing Date plus any new business added by the Class A Sellers during the Measurement Period (the “Earn-Out”). The Earn-Out shall be determined in accordance with the terms and conditions of this Section 2.2:

(a)If Actual EBITDA for the Measurement Period is equal to or greater than $811,000 (“Target EBITDA”), the Class A Sellers shall be entitled to an earn-out equal to $1,500,000 (the “Target Earn-Out”).

(b)If Actual EBITDA for the Measurement Period is less than Target EBITDA, the Class A Sellers shall be entitled to an earn-out equal calculated as follows: the product of (i) Actual EBITDA divided by Target EBITDA, and (ii) the Target Earn-Out.

(c)On or before fifteen (15) days after the one-year anniversary of the Closing Date, the Buyer shall provide the Class A Sellers with a statement Actual EBITDA for the Measurement Period and, if applicable, the Buyer’s calculation of the Earn-Out payment (the “Earn-Out Statements”). For up to fifteen (15) days after the Class A Sellers’s receipt of the Earn-Out Statement (the “Receipt Date”), the Class A Sellers shall be permitted to review the working papers and records of the Business and shall be permitted to discuss such matters with the chief financial officer and other executive officers of the Buyer and the Company for the purpose of confirming the determination of EBITDA for the Measurement Period. The calculation of the Earn-Out in the Earn-Out Statement shall become final and binding upon the Parties thirty (30) days following Receipt Date, unless the Class A Sellers gives written notice of its disagreement (a “Notice of Disagreement”) to the Buyer prior to such date (the period commencing on the Receipt Date and ending on the earlier of (i) thirty (30) days thereafter and (ii) the date a Notice of Disagreement is given, the “Earn-Out Review Period”). For up to fifteen (15) days following delivery of a Notice of Disagreement (the “Negotiation Period”), the Parties shall seek in good faith to resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement. If the Class A Sellers and the Buyer cannot agree upon the determination of the Earn-Out within the Negotiation Period, the Parties shall submit to an independent accountant mutually agreeable to the Buyer and the Class A Sellers (the “Independent Accountant”) for review and resolution of all matters that remain in dispute and that were included in the Notice of Disagreement. If Buyer and the Class A Sellers cannot agree on an Independent Accountant, then each of Buyer and the Class A Sellers shall select an independent accountant and such independent accountants shall select the Independent Accountant. The Parties shall instruct the Independent Accountant to make a final determination of such Actual EBITDA for the Measurement Period, as applicable, and the Earn-Out calculation. Such determination shall become final and binding on the Parties on the date the Independent Accountant delivers its final resolution in writing to the Parties (which final resolution shall be requested by the Parties to be delivered not more than forty five (45) days following submission of such disputed matters). In rendering its decision, the Independent Accountant shall apportion its fees and expenses in connection with the Earn-Out Payment dispute,

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based on its views as to the relative merits of the positions of each Party in such dispute in the manner described in the following sentence; provided, however, that the Class A Sellers shall advance half, and the Buyer shall advance the other half, of any retainer fee or deposit required by the Independent Accountant in advance of a final resolution, subject to reapportionment by the Independent Accountant of its fees and expenses as aforesaid. For example, if the final determination reflected a 60-40 compromise of the Parties’ claims, the Independent Accountant would allocate expenses 40% to the Party whose claims determined to be 60% successful and 60% to the Party whose claim was determined to be 40% successful. All determinations of the Independent Accountant shall be final and binding on the Parties hereto, and neither the Class A Sellers nor the Buyer shall have the right to appeal such determinations. The Class A Sellers and the Buyer agree to cooperate in good faith with each other and with the Independent Accountant in order to facilitate the receipt of the final determinations of the Independent Accountant.

(d)Within thirty (30) days after (i) the Receipt Date or (ii) for any disputed Earn-Out Statement, notice of final determination by the Independent Accountant, the Buyer shall pay to the Class A Sellers the amount owed to the Class A Sellers as reflected on the Earn-Out Statement or, as applicable, as determined by the Independent Account.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the Buyer with respect to the matters specified in this Article III as follows:

Section 3.1Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. The Company does not have any Subsidiaries. The Company has the requisite corporate power and authority to conduct the Business as it is now being conducted and is proposed to be conducted, to own and lease the Assets which it owns and leases and to perform all of its obligations under each Contract by which it is bound. The Company is duly qualified to conduct its business as a foreign entity and is in good standing under the Laws of the jurisdictions listed on Schedule 3.1, which are all of the jurisdictions where the nature of its business or the ownership or leasing of its Assets requires such qualification. Set forth on Schedule 3.1 are all the names (i.e. “trading” or “doing business as” names) under which the Company is currently or has ever conducted its business.

Section 3.2Authorization; Enforceability. The Company has the requisite absolute and unrestricted right, power and authority to execute and deliver this Agreement and the Other Agreements to which it is a party, to perform its obligations under this Agreement and the Other Agreements to which it is a party, and to consummate the transactions contemplated by this Agreement and the Other Agreements to which it is a party, and such actions have been duly authorized by all necessary corporate action of the Sellers and of the Company’s board of directors. This Agreement has been duly executed and delivered by the Company, and the Other Agreements to which the Company is a party have been, or will be at the Closing, duly executed and delivered by the Company, and this Agreement and the Other Agreements constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

Section 3.3Organizational Documents. The Company has delivered to the Buyer copies of the Company’s Organizational Documents, and all such copies are complete and correct as of the date hereof. Schedule 3.3 contains a complete and correct list of the current directors and officers of the Company. The minute books of the Company previously delivered to the Buyer contain true, complete and correct records of all meetings held, and accurately reflect all other corporate action of the stockholders and board of directors (and any committees thereof) of the Company. The books of account and other records of the Company delivered to the Buyer have been maintained in accordance with sound business practice, and applicable law

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and accounting policies. The Company is not in default under or in violation of any provision of its Organizational Documents.

Section 3.4Capitalization. The Sellers are the record and beneficial holders of those and that number of Shares set forth opposite each Seller’s name on Schedule 3.4. All of such Shares have been duly authorized and are validly issued, fully paid and non-assessable, free and clear of all Liens, and have been issued in compliance with applicable Law. As of the date hereof, the Shares and the options disclosed at Schedule 3.4 constitute the only outstanding Equity Interests of the Company. No Equity Interests of the Company are subject to, or have been issued in violation of, preemptive or similar rights. All issuances, sales or repurchases by the Company of its Equity Interests have been effected in compliance with all applicable federal and state securities laws. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting Equity Interests of the Company. The Company does not own, directly or indirectly, or have any obligation to acquire, any Equity Interests of any Person.

Section 3.5Options. Except as set forth on Schedule 3.5, there are no authorized or outstanding subscriptions, options, rights (conversion, preemptive or otherwise), warrants, calls, convertible securities or commitments or any other arrangements or agreements of any nature whatsoever to which the Company is a party requiring the issuance, conversion, registration, voting, sale or transfer of any Equity Interests of the Company, or any synthetic equity, including without limitation, phantom stock, profits participation or stock appreciation rights or any securities convertible, directly or indirectly, into Equity Interests of the Company, or evidencing the right to subscribe for any Equity Interests of the Company, or giving any Person (other than the Buyer) any rights with respect to any Equity Interests of the Company.

Section 3.6No Violation. Subject to the receipt of the Consents as contemplated by Section 3.7, neither the execution and delivery of this Agreement or the Other Agreements to which the Company is a party, nor the performance by the Company of its obligations hereunder or thereunder, or the consummation of the transactions contemplated hereby or thereby will (with or without the passage of time or the giving of notice) (a) violate, conflict with or constitute a default under the Organizational Documents of the Company, (b) violate, conflict with or result in a Breach of, constitute a default under, give rise to any right of termination, modification, foreclosure, cancellation or acceleration under, or cause any loss of benefit under, any of the terms, conditions or provisions of any Contract or Lease to which the Company is a party or by which its Assets are bound, or give to others any rights (including rights of termination, modification, foreclosure, cancellation or acceleration) in or with regard to the Company, any of its Assets, or the Shares, or result in, require or permit the creation or imposition of any Lien of any nature upon or with regard to the Shares, the Company, or any of its Assets, (c) to the Company’s Knowledge, conflict with or violate in any respect any Laws applicable to the Company or by which any of its Assets is bound or any of the Licenses and Permits held by the Company, or give any Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate or modify any License or Permit, (d) alter or impair the ability of the Company to conduct the Business, or (e) give any Person the right to challenge any of the transactions contemplated hereby, or exercise any remedy or obtain any relief under any Law or any order of a judicial or arbitral authority to which the Company may be bound.

Section 3.7Consents.

(a)Third Party Consents. Except as set forth on Schedule 3.7(a), neither the execution and delivery of this Agreement or the Other Agreements to which the Company is a party, nor the performance by the Company of its obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby will (with or without the passage of time or the giving of notice) require any Consent (collectively, the “Third Party Consents”) under any of the terms, conditions or provisions of any Contract to which the Company is a party or by which the Company or any of its Assets is bound.

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(b)Governmental Consents. Except for (i) Consents required pursuant to the Licenses and Permits held by the Company and listed on Schedule 3.7(b), and (ii) any other filings listed on Schedule 3.7(b), no Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority (collectively, the “Governmental Consents”) is required to be made or obtained by the Company in connection with the execution, delivery and performance by the Company of this Agreement and the Other Agreements to which the Company is a party and the consummation of the transactions contemplated hereby and thereby, which, if not made or obtained, (A) would result in a violation of any Law, License or Permit, (B) would result in any material Liability to the Company, or (C) would prohibit the consummation of the transactions contemplated hereby and thereby.

Section 3.8Financial Statements.

(a)Attached as Schedule 3.8(a) hereto are complete and correct copies of the compiled balance sheets of the Company as at December 31, 2012 and December 31, 2013 (the “Compiled Balance Sheets”), and the related compiled statements of income of the Company for the fiscal years ended December 31, 2012 and December 31, 2013 (collectively, with the Compiled Balance Sheets, the “Compiled Financial Statements”).

(b)Attached as Schedule 3.8(b) hereto are complete and correct copies of the balance sheet of the Company as at March 31, 2014 (the “Latest Balance Sheet”), and the related statement of income of the Company for the three (3) month period ended March 31, 2014 (collectively, with the Latest Balance Sheet, the “Interim Financial Statements” and together with the Compiled Financial Statements, the “Financial Statements”).

(c)No financial statements of any other Person are required by GAAP to be included in the Financial Statements to fairly and accurately represent the operations of the Company. The Financial Statements have been based upon and are consistent with the information contained in the Company’s books and records and are complete and correct, consistent with the books and records of the Company. The Financial Statements fairly present in all material respects the financial condition of the Company, as of the dates thereof, and the cash flows and results of operations of the Company, for the periods related thereto. The financial books and records, and the accounts, of the Company used to prepare the Financial Statements: (i) have been maintained in accordance with sound business practices on a basis consistent with prior years, (ii) are stated in reasonable detail and reflect actual bona fide transactions of the Company in all material respects, and (iii) constitute the basis for the Financial Statements.

Section 3.9Absence of Undisclosed Liabilities. The Company does not have any material Liability (and, to the Knowledge of the Company, there is no Basis for any present or future Legal Proceeding against the Company giving rise to any Liability), except the Liabilities (a) that are accrued for or reserved against in the Latest Balance Sheet, (b) that have arisen since the date of the Latest Balance Sheet in the Ordinary Course of Business, or (c) that are otherwise disclosed on Schedule 3.9.

Section 3.10Absence of Certain Changes; Cash on Hand.

(a)Since the date of the Latest Balance Sheet, except for the marketing of the Company for sale, the Company has conducted the Business in the Ordinary Course of Business, and since the date of the Latest Balance Sheet, there has been no Material Adverse Effect, nor to the Company’s Knowledge has any event occurred that could reasonably be expected to have a Material Adverse Effect, on the Company or the Business.

5

(b)Without limiting the generality of the foregoing, since the date of the Latest Balance Sheet, there has not been, nor has the Company committed to, any change in cash management practices or policies of the Company. As of the date hereof, the total Cash on Hand of the Company is not less than $50,000.

Section 3.11Taxes. The Company has filed, will timely file or will cause to be timely filed, or has timely filed for an extension of the time to file, all Tax Returns required by applicable Law to be filed by it prior to or as of the Closing Date, and such Tax Returns are, or will be at the time of filing, true, correct and complete in all material respects. The Company has paid and discharged all Taxes due and payable as of the Closing Date or, where payment is not yet due, has established, or will establish or cause to be established, on or before the Closing Date, an adequate accrual for the payment of all Taxes due with respect to (a) any period ending prior to or on the Closing Date and (b) the portion through the Closing Date for any period that includes (but does not end on) the Closing Date. There are no Liens, claims or assessments pending against the Company or its Assets for any alleged deficiency in any Tax (other than for current Taxes not yet due and payable), and the Company has not been notified of any proposed Tax claims, Liens or assessments against the Company. The Company is not, has not been, nor has been notified that it will be the subject of any examination by a Taxing Authority. The Company has withheld from each payment made to any of its past or present employees, and any other Person, as appropriate, the amount of all Taxes and other deductions required to be withheld therefrom, and paid the same to the proper Taxing Authority within the time required by Law. No claim has ever been made by a Taxing Authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. The Company is not party to any Tax indemnity, allocation or sharing agreement. Complete and correct copies of all federal and state Tax Returns filed by the Company for the taxable periods beginning on or after January 1, 2012 have been provided to the Buyer.

Section 3.12Material Contracts. Except as set forth on Schedule 3.12, the Company has delivered to the Buyer a complete and correct copy of each material written Contract of the Company, whether or not entered into in the Ordinary Course of Business, together with all amendments, exhibits, attachments, waivers or other changes thereto, and written descriptions of each material oral Contract, if any (the “Material Contracts”). To the Company’s Knowledge, (i) each Material Contract is valid, binding, in full force and effect, and enforceable by the Company against the parties thereto in accordance with its terms, except as such enforceability may be limited by the General Enforceability Exceptions, and is not subject to any material claims, charges, set-offs or defenses, (ii) the Company is not in Breach or default under any of the Material Contracts, nor has any event occurred which with the giving of notice or the passage of time (or both) would constitute a Breach or default by the Company thereunder, (iii) the Company has not waived any material rights under any of the Material Contracts or modified any material terms thereof, and (iv) no other party to any Material Contract is in Breach or default in any respect thereunder, nor has any event occurred or is expected to occur (including without limitation the transactions contemplated hereby), which with the giving of notice or the passage of time (or both) would constitute a Breach or default by such other party thereunder.

Section 3.13Real Property.  The Company does not own any Real Property. Schedule 3.13 sets forth a complete and correct list of all Real Property in which the Company has a leasehold interest (the “Company Real Property”). The Company has delivered to the Buyer a complete and correct copy of each Lease or other Contract pertaining to the Company Real Property, together with all amendments, extensions, renewals, modifications, alterations, guaranties and other changes thereto (the “Company Leases”) all of which are identified on Schedule 3.13. Each of the Company Leases is legal, valid, binding, enforceable and in full force and effect in accordance with the terms thereof. All conditions precedent to the enforceability of each Company Lease have been satisfied and there is no material Breach or default, nor state of facts which, with the passage of time, notice or otherwise, would result in a material Breach or default (i) on the part of or by the Company, or permit the termination, modification or acceleration of rent by the lessor thereunder, or (ii) to the Company’s Knowledge, on the part of the lessor thereunder.

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Section 3.14Personal Property. The Company has good title to, a valid leasehold interest in, or a valid license to use, all material Assets reflected on the Latest Balance Sheet as owned or used by the Company, and all Assets necessary or useful in the operation of the Business, free and clear of any Liens. All tangible Assets used by the Company in the Ordinary Course of Business are in good working condition and repair and sufficient for the operation of the Business as presently conducted (normal maintenance, wear and tear excepted). All Assets owned, leased or licensed by the Company are in the possession of, and under the control of, the Company and are in good condition and repair, ordinary wear and tear excepted, and are suitable for the purposes for which they are being used and are of a condition, nature and quantity sufficient for the conduct of the Business as currently conducted. All tangible Assets of the Company are located on or at the Company Real Property.

Section 3.15Intellectual Property and Information Technology. Schedule 3.15 sets forth a complete and correct list of all Intellectual Property owned or used by the Company in the operation of the Business (the “Company Intellectual Property”). For each item of Company Intellectual Property, Schedule 3.15 sets forth the registration, patent, serial and/or application number, if any, and the Governmental Authority or other entity with which any such application has been filed and/or which has issued, reissued and/or renewed any such patent or registration. Except as set forth on Schedule 3.15, the Company owns all right, title and interest in, or has a valid license to use, the Company Intellectual Property in the Business, free and clear of all Liens and has delivered to the Buyer complete and correct copies of each license agreement granting to any third party any rights relating to any of the Company Intellectual Property or granting to the Company the right to use any Intellectual Property (the “IP License Agreements”).

Section 3.16Insurance Policies. The Company has delivered, or made available to the Buyer, accurate and complete copies of all policies of insurance and pending applications for policies of insurance to which the Company is party or under which the Company or the Business is or has been covered at any time during the last two (2) years. All policies of insurance to which the Company is a party or which provide coverage to the Company or the Business (a) are valid, outstanding and enforceable on the date hereof; (b) are issued by an insurer that is financially sound and reputable; (c) taken together, provide adequate insurance coverage for the Company and operations of the Business for all risks to which the Company and the Business are normally exposed; and (d) are sufficient for compliance with applicable Laws and the Contracts of the Company. The Company has not received any refusal of coverage, any notice that a defense will be afforded with reservation of rights, or any notice of cancellation or any other indication that any policy of insurance is no longer in full force or effect, or that the issuer of any policy of insurance is unwilling to perform its obligations thereunder. The Company has complied with all of its material obligations under each such insurance policy.

Section 3.17Litigation. There are no suits, actions, proceedings, investigations, claims or orders (collectively, “Legal Proceedings”) pending or, to the Company’s Knowledge, threatened against the Company or any of the current or former Representatives of the Company in their respective capacity as Representatives of the Company, nor is the Company, or any such Representative, subject to any judgment, order or decree of any court, judicial authority or Governmental Authority (nor have any of them been subject to such a judgment, order or decree in the past five (5) years). Schedule 3.17 sets forth a complete and correct list and description of all Legal Proceedings made, filed or otherwise initiated in connection with the Company that are pending or have been resolved in the past two (2) years, and the resolution thereof.

Section 3.18Compliance with Applicable Laws. The Company has complied in all material respects with all Laws applicable to it or to the operation of the Business and no facts or circumstances exist which would reasonably be expected to cause the Company to violate or fail to comply with any such Laws in the future. The Company has not received any written notice from any court, judicial authority or Governmental Authority asserting a failure, or possible failure, to comply with any such applicable Laws, the subject of which notice has not been conclusively resolved as required thereby or otherwise to the satisfaction of the party sending such notice. The Company is not under investigation with respect to violations of any such Laws.

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Section 3.19Regulatory Compliance. Schedule 3.19 contains a complete and correct list of all Licenses and Permits issued to or maintained by the Company as of the date hereof that are necessary to the conduct of the Business as the Business has been operated during the past twelve (12) months (collectively, the “Material Licenses and Permits”), along with the date of issuance and the current term thereof. All such Material Licenses and Permits are in full force and effect. The Company is in compliance in all material respects with the terms and conditions of the Material Licenses and Permits and has received no written notices that it is in violation of any of the terms or conditions of any Material Licenses and Permits or alleging the failure to maintain any Licenses and Permits. The Company has not received written notice that any of the Material Licenses and Permits will not be renewed, and there are no proceedings pending to revoke or withdraw any such Material Licenses and Permits.

Section 3.20Compliance with Environmental, Health and Safety Requirements. The Company has obtained and possesses all Licenses and Permits required for the conduct of the Business under Laws and contractual obligations concerning public health and safety, worker health and safety, pollution, or protection of the environment except where the failure to possess such Licenses and Permits would not have a Material Adverse Effect.

Section 3.21Employee Benefit Plans. Schedule 3.21 sets forth a complete and correct list of: (a) each “employee benefit plan,” as defined in Section 3(3) of ERISA, and (b) each other benefit plan, policy, program, arrangement or agreement which is sponsored or maintained by the Company, or pursuant to which the Company is otherwise bound or otherwise has any Liability, for the benefit of its employees, former employees, consultants or other Representatives (each, an “Employee Plan”). Each Employee Plan (a) has been operated and administered in compliance with its terms and all applicable requirements of ERISA, the Code and other applicable Laws and (b) is intended to be qualified under Section 401(a) of the Code and has received a favorable determination letter from the IRS and there have been no amendments or other developments since the date of such letter which would cause the loss of qualified status of such plan. Neither the Company nor any of its ERISA Affiliates maintains, sponsors or is required to contribute to, either currently or at any time in the past, or otherwise has any Liability with respect to, any Employee Plan that (a) is a “multiemployer plan” within the meaning of Section 3(37) of ERISA, (b) is subject to the funding requirements of Section 412-430 of the Code or Title IV of ERISA, or (c) provides for post-retirement medical, life insurance or other welfare-type benefits (other than as required by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code or under a similar state Law). There is no reasonable basis for the Company or any ERISA Affiliate of the Company to anticipate liability to the Pension Benefit Guaranty Corporation with respect to a pension plan as defined in Section 3(2) of ERISA (“Pension Plan”) and there has been no reportable event (within the meaning of Section 4043(c) of ERISA) or any event requiring disclosure under Section 4041(c) of ERISA with respect to such a Pension Plan. There has been no event or condition which presents a material risk of termination of any Pension Plan by the Pension Benefit Guaranty Corporation, and no circumstances exist that constitute grounds under Section 4042 of ERISA entitling the Pension Benefit Guaranty Corporation to institute any such proceeding. The actuarial valuation of each Pension Plan for the most recent plan year accurately reflects its actuarial condition as of the first day of such plan year, and there has been no material change in such actuarial condition between such date and the Closing.

Section 3.22Labor; Employment.

(a)The Company is not a party to any collective bargaining agreement and there is no organizational effort presently being made on behalf of any labor union with respect to the Business or the employees of the Company. The Company has complied in all material respects with all applicable Laws relating to the employment of labor. The Company has not incurred any Liability with respect to any employee, former employee or other Representative as the result of the transactions contemplated hereby. No charge or complaint of employment discrimination, unfair labor practice or other similar charge or complaint has been

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made against the Company during the last three (3) years, or is pending or, to the Knowledge of the Company, threatened, nor does the Company know of any basis for any such allegation, charge or complaint.

(b)Schedule 3.22 sets forth the following: a true, complete and accurate list of each employee, independent contractor, director or consultant of the Company, his or her dates of hire, position and title (if any), current rate of compensation (identifying bonuses, commissions, incentive compensation and equity-based compensation, if any, separately), and, in the case of an employee, whether such employee is hourly or salaried, whether such employee is exempt or non-exempt, whether such employee is absent from active employment and, if so, the date such employee became inactive, the reason for such inactive status, and, if applicable, the anticipated date of return to active employment. Except as set forth on Schedule 3.22, the Company does not have any unsatisfied Liability to any previously terminated Representative. The Company has disclosed all written employee handbooks, policies, programs and arrangements to the Buyer.

(c)No Representative or group of Representatives has informed the Company, either orally or in writing, of any plans to terminate their employment or relationship with the Company generally or as a result of the transactions contemplated hereby or otherwise.

(d)All Representatives of the Company are “employees at will” or otherwise employed such that the Company may lawfully terminate their employment at any time, with or without cause, without creating any material cause of action against the Company or otherwise giving rise to any Liability of the Company for wrongful discharge, Breach of contract or tort or any other similar cause at law or in equity. A true and correct copy of any form of non-competition, non-solicitation, proprietary rights or confidentiality agreement currently in force with any of the Representatives of the Company, and any material variances therefrom, has been delivered to Buyer.

Section 3.23Books and Records. The Company has maintained its books and records in the Ordinary Course of Business, consistent with professional business standards and practices customary for its industry. The Company makes and keeps books, records and accounts which, in reasonable detail, accurately and fairly reflect actual bona fide transactions of the Company. The books of account and other records of the Company previously delivered to the Buyer have been maintained in accordance with sound business practice, applicable Law and accounting best practices.

Section 3.24Brokers. No broker, finder or agent is entitled to any brokerage fees, finder’s fees or commissions in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

Section 3.25Banks. The names and locations of all banks or other financial institutions in which the Company has accounts or safe deposit boxes, and the names of all Persons authorized to draw thereon or to have access thereto is listed on Schedule 3.25. Further, Schedule 3.25 sets forth the following information with respect to each such financial institution: (a) the name of the financial institution, (b) the location of the financial institution, (c) the identity of all accounts or safe deposit boxes, by number, at such financial institution, and (d) a list of all authorized signatories on such accounts or safe deposit boxes.

Section 3.26Customers. Schedule 3.26 sets forth a list of the customers of the Company showing the total sales by the Company to each customer during each of the fiscal years ended December 31, 2012 and 2013. Since the date of the Latest Balance Sheet, no such customer has terminated its relationship with the Company or materially reduced or changed the pricing, volume, timing or other terms of its business with the Company, and, to the Company’s Knowledge, no such customer has notified the Company that it intends to terminate or materially reduce or change the pricing, volume, timing or other terms of its business with the Company.

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Section 3.27Full Disclosure. This Agreement and the Other Documents and their respective Schedules and Exhibits delivered by or on behalf of the Company and the Sellers hereunder and thereunder are complete and correct in all material respects. No representation or warranty of the Company or the Sellers contained in this Agreement or in the Other Documents, and no written statement made by or on behalf of the Company or the Sellers to the Buyer pursuant to this Agreement or any of the Other Documents contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. There is no fact or circumstance which the Company or the Sellers have not disclosed to the Buyer in writing which reasonably could be expected to have, give rise to, or form the Basis for a Material Adverse Effect.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS

The Sellers, severally and not jointly, hereby represent and warrant to the Buyer as follows:

Section 4.1Authorization; Enforceability. The Sellers have the requisite power and authority to execute and deliver this Agreement and the Other Agreements to which the Sellers are parties, to perform their obligations under this Agreement and the Other Agreements to which the Sellers are parties, and to consummate the transactions contemplated by this Agreement and the Other Agreements to which the Sellers are parties. This Agreement has been duly executed and delivered by the Sellers, and the Other Agreements to which the Sellers are parties will be duly executed and delivered by the Sellers at the Closing, and, assuming the due authorization, execution and delivery by the other parties hereto and thereto, will constitute legal, valid and binding obligations of the Sellers enforceable in accordance with their respective terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

Section 4.2Title to Shares. The Sellers are the holders of record and beneficial owner of the Shares and such Shares will, as of the Closing, be free and clear of any and all restrictions on transfer, Taxes or Liens (other than restrictions under the Securities Act or applicable state securities Law). The Sellers have the sole voting power and the sole power of disposition and sole power to agree to all matters set forth in this Agreement with respect to the Shares, with no limitations, qualifications or restrictions on such rights and powers, and the Sellers will not grant such rights and powers to any other Person prior to the Closing. There are no pending Legal Proceedings against any of the Sellers affecting its Shares or the right of any of the Sellers to execute, deliver and perform its obligations under this Agreement or the Other Agreements to which any of the Sellers is a party. Upon delivery of the certificate(s) representing the Shares held by the Sellers as of the Closing Date, duly endorsed in blank or accompanied by a duly executed stock power with respect to the Shares, good and marketable title to the Shares held by the Sellers will be sold, assigned, conveyed, transferred and delivered to the Buyer, free and clear of any and all restrictions on transfer, Taxes or Liens.

Section 4.3No Consents. No Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority is required to be made or obtained by the Sellers in connection with the execution, delivery and performance of this Agreement by the Sellers.

Section 4.4Litigation. There are no Legal Proceedings pending, or to the Sellers’ Knowledge threatened, against the Sellers, nor are any of the Sellers subject to any judgment, order or decree of any court, judicial authority or Governmental Authority that would seek to prevent any of the transactions contemplated by this Agreement and the Other Agreements.

Section 4.5No Violation. Neither the execution and delivery of this Agreement or the Other Agreements to which each of the Sellers is a party, nor the performance by any of the Sellers of the transactions contemplated hereby or thereby, will (a) constitute a default under the Organizational Documents of any of the Sellers, (b) to the Sellers’ Knowledge, result in a default, give rise to any right of termination, cancellation or

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acceleration, or require any Consent under any of the terms, conditions or provisions of any material mortgage, loan, license, agreement, lease or other instrument or obligation to which any of the Sellers is a party, or (c) to the Sellers’ Knowledge, conflict with or violate any material Laws applicable to any of the Sellers or by which any of their Assets are bound.

Section 4.6Foreign Person. None of the Sellers is a foreign person within the meaning of Section 1445 of the Code.

Section 4.7Brokers. No broker, finder or agent is entitled to any brokerage fees, finder’s fees or commissions in connection with the transactions contemplated by this Agreement and the Other Agreements.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Sellers as follows:

Section 5.1Organization and Qualification. The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware.

Section 5.2Authorization; Enforceability. The Buyer has the requisite corporate power and authority to execute and deliver this Agreement and the Other Agreements to which it is a party, to perform its obligations under this Agreement and the Other Agreements to which it is a party, and to consummate the transactions contemplated by this Agreement and the Other Agreements to which it is a party. This Agreement has been duly and validly executed and delivered by the Buyer, the Other Agreements to which the Buyer is a party will be duly executed and delivered by the Buyer at the Closing, and, assuming the due authorization, execution and delivery by the other parties hereto and thereto, will constitute legal, valid and binding obligations of the Buyer, enforceable in accordance with their terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

Section 5.3No Consents. No Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority is required to be made or obtained by the Buyer in connection with the execution, delivery and performance of this Agreement by the Buyer.

Section 5.4Litigation. There are no Legal Proceedings pending, or to the Buyer’s Knowledge threatened, against the Buyer, nor is the Buyer subject to any judgment, order or decree of any court, judicial authority or Governmental Authority that would seek to prevent, delay or burden any of the transactions contemplated by this Agreement.

Section 5.5No Violation. Neither the execution and delivery of this Agreement or the Other Agreements to which it is a party, nor the performance by it of the transactions contemplated hereby or thereby will (a) constitute a default under the Organizational Documents of the Buyer, or (b) to the Buyer’s Knowledge, result in a default, give rise to any right of termination, cancellation or acceleration, or require any Consent under any of the terms, conditions or provisions of any material mortgage, loan, license, agreement, lease or other instrument or obligation to which the Buyer is a party, or (c) to the Buyer’s Knowledge, conflict with or violate any Laws applicable to the Buyer or by which any of its Assets is bound.

ARTICLE VI
CLOSING

Section 6.1Time and Place. The Closing shall occur simultaneously with the execution of this Agreement and shall be effective as of 12:01 a.m. Eastern Time on the Closing Date.

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Section 6.2Deliveries by the Company and the Sellers. At the Closing, the Company and the Sellers shall deliver or cause to be delivered to the Buyer:

(a)Instruments of Transfer. Certificates representing the Shares, duly endorsed in blank or accompanied by duly executed stock powers;

(b)Repayment of Notes.  Payment of those certain outstanding Demand Notes dated February 20, 2014, attached hereto as Exhibit A, payable by the Class A Sellers to Mr. Steven M. Mariano;

(c)Corporate Documents. A copy of the Certificate of Incorporation of the Company certified by the Secretary of State of the State of Delaware as of a date not more than thirty (30) days prior to the Closing Date;

(d)Consents. The Third Party Consents and Governmental Consents identified on Schedules 3.7(a) and (b);

(e)Licenses and Permits. All Licenses and Permits identified on Schedule 3.19;

(f)Other Documents. Such other documents and instruments as the Buyer may reasonably request to consummate the transactions contemplated hereby.

Section 6.3Deliveries by the Buyer. The Buyer will deliver or cause to be delivered to the Sellers:

(a)The Purchase Price. Payment of the Purchase Price as provided in Section 2.1; and

(b)Other Documents. Such other documents and instruments as the Company or the Sellers, or their respective counsel, shall deem reasonably necessary to consummate the transactions contemplated hereby.

ARTICLE VII
POST CLOSING COVENANTS

Section 7.1Tax Covenants.

(a)Pre-Closing Returns. Following the Closing, the Company shall prepare, or cause to be prepared and timely filed, all income Tax Returns that are required to be filed by, or with respect to, the Company for taxable periods ending on or before the Closing Date (“Sellers’ Returns”) and the Sellers shall pay all Taxes required to be paid with respect to such Sellers’ Returns. All such Sellers’ Returns shall be prepared, and all elections with respect to such Sellers’ Returns shall be made, in accordance with applicable Law. The Company shall submit each such Sellers’ Return for review and comment no later than forty-five (45) days before the due date for such Sellers’ Return. No later than fifteen (15) days following the Sellers’ receipt of a Sellers’ Return, the Sellers shall notify the Company in writing of any dispute with respect to the manner in which such Sellers’ Return is prepared or the related Tax is calculated (a “Protest Notice”). If the Buyer and the Sellers are unable to resolve a dispute with respect to any such Sellers’ Return within a period of fifteen (15) days following the Buyer’s receipt of a Protest Notice, then any disputed items shall be resolved in accordance with the procedure for protests under Section 7.1(f).

(b)Straddle Period Returns. The Buyer shall prepare and timely file, or cause to be prepared or timely filed, (and shall provide the Sellers a copy of each such return as filed and evidence of the timely filing thereof) all Tax Returns (other than the Sellers’ Returns) that are required to be filed by, or with respect to, the Company that are not filed as of the Closing Date (“Buyer’s Returns”) and shall pay the Tax shown as due thereon. In the case of a Buyer’s Return that includes a Straddle Period (a “Straddle Period Return”), the

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Buyer shall submit each such Straddle Period Return to the Sellers for review and advice no later than thirty (30) days before the due date for such Straddle Period Return. No later than ten (10) days following the Sellers’s receipt of a Straddle Period Return, the Sellers shall notify the Buyer in writing of any dispute with respect to the manner in which such Straddle Period Return is prepared or the related Tax is calculated (a “Protest Notice”). If the Buyer and the Sellers are unable to resolve a dispute with respect to any such Straddle Period Return within a period of fifteen (15) days following the Buyer’s receipt of Protest Notice, then any disputed items shall be resolved in accordance with Section 7.1(f). All Straddle Period Returns shall be prepared, and all elections with respect to such Straddle Period Returns shall be made, in accordance with applicable Law. Within five (5) days after the later of (i) the Sellers’s approval of any Straddle Period Return, and (ii) the resolution of any dispute with respect to such Straddle Period Return, the Sellers shall pay to the Company the portion of the Taxes shown on such Straddle Period Return that constitute Pre-Closing Taxes. Nothing hereunder shall limit the right of the Company to file any Straddle Period Return on a timely basis.

(c)Cooperation and Records Retention. The Sellers and the Buyer shall (i) each provide the other, and the Buyer shall cause the Company to provide the Sellers, with such assistance as may be reasonably requested by any of them in connection with the preparation of any Tax Return, audit, or other examination by any Taxing Authority or judicial or administrative proceedings relating to Liability for Taxes, (ii) each retain and provide the other, and the Buyer shall cause the Company to retain and provide the Sellers with, any records or other information that may be relevant to such Tax Return, audit or examination, proceeding, or determination, and (iii) each provide the other with any final determination of any such audit or examination, proceeding, or determination that affects any amount required to be shown on any Tax Return of the other or the Company for any period. Without limiting the generality of the foregoing, the Buyer shall retain, and shall cause the Company to retain, and the Sellers shall retain, until the applicable statutes of limitations (including any extensions) have expired, copies of all Tax Returns, supporting work schedules, and other records or information that may be relevant to such returns for all Tax periods or portions thereof ending on or before the Closing Date and shall not destroy or otherwise dispose of any such records without first providing the other Party with a reasonable opportunity to review and copy the same. Each Party shall bear its own expenses in complying with the provisions of this Section 7.1(c).

(d)Tax Proceedings. The Sellers shall exercise, at their expense, control over the handling, disposition, and settlement of any governmental inquiry, examination, or proceeding (a “Tax Proceeding”) that could result in a determination with respect to Pre-Closing Taxes due or payable by the Sellers or the Buyer or the Company and for which the Sellers are liable or against which the Sellers are required to indemnify the Buyer or the Company pursuant hereto. The Sellers shall, however, promptly notify the Company or the Buyer if, in connection with any such Tax Proceeding, any Taxing Authority proposes in writing to make any assessment or adjustment with respect to Tax items of the Company or the Buyer, which assessments or adjustments could affect the Company or the Buyer following the Closing, and shall consult with the Company with respect to any such proposed assessment or adjustment and allow the Buyer to participate in the Tax Proceedings, to the extent reasonably necessary to protect the interests of the Buyer and the Company. The Buyer shall notify the Sellers in writing within fifteen (15) days after learning of any Tax Proceeding described in the first sentence of this Section 7.1(d); provided, however, that failure to provide such notice on a timely basis shall not limit the Sellers’ obligations hereunder, except to the extent that the Sellers are prejudiced thereby. The Buyer shall cooperate with the Sellers, as the Sellers may reasonably request, in any such Tax Proceeding. The Sellers shall keep the Buyer and the Company reasonably notified with respect to the conduct of any such Tax Proceeding, and may not settle any dispute arising thereunder without the written consent of the Buyer. Notwithstanding any provisions of this Agreement to the contrary, notices with respect to, and conduct and disposition of, any Tax Proceeding shall be governed by this Section 7.1(d).

(e)Indemnification. Following the Closing, the Sellers shall fully indemnify and hold the Buyer and the Company harmless against any and all Pre-Closing Taxes of the Company.

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(f)Resolution of Protest. If the Buyer and the Sellers are unable to resolve any disagreement with respect to any Sellers’ Return or Straddle Period Return within fifteen (15) days following the delivery of a Protest Notice, then either the Buyer or the Sellers may refer the items in dispute to the Independent Accountant. In such case, the Buyer and the Sellers will jointly retain the Independent Accountant and direct it to render a written report resolving any and all items in dispute as set forth in the Protest Notice, not later than thirty (30) days after acceptance of its retention. The Sellers and the Buyer shall each submit to the Independent Accountant a binder setting forth their specific information, evidence and support for their respective positions as to all items in dispute. Neither the Sellers nor the Buyer shall have or conduct any communication, either written or oral, with the Independent Accountant without the other Party either being present or receiving a concurrent copy of any written communication. The Sellers and the Buyer, and their respective Representatives, shall cooperate fully with the Independent Accountant during its engagement and respond on a timely basis to all requests for information or access to documents or personnel made by the Independent Accountant, all with the intent to fairly and in good faith resolve all disputes relating to the Sellers’ Return or the Straddle Period Return, as applicable, as promptly as reasonably practicable. The findings and determinations of the Independent Accountant as set forth in its written report shall be deemed final, conclusive and binding upon the Parties. In resolving any disputed item, the Independent Accountant (A) may not assign a value to any particular item greater than the greatest value for such item claimed by either the Sellers or the Buyer, or less than the lowest value for such item claimed by either the Sellers or the Buyer, in each case as presented to the Independent Accountant, (B) shall be bound by the principles set forth in this Section 7.1, and (C) shall limit its review to matters specifically set forth in the Protest Notice. The fees and expenses of the Independent Accountant shall be borne by the Sellers, on the one hand, and the Buyer, on the other hand, based upon the percentage that the amount not awarded to the Sellers bears to the amount actually contested by the Sellers.

Section 7.2Access to Books and Records. From and after the Closing, the Buyer shall, and shall cause the Company to, provide the Sellers and its agents with reasonable access (for the purpose of examining and copying), during normal business hours, to the books and records of the Company with respect to periods or occurrences prior to the Closing Date in connection with legitimate business purposes of the Sellers, expressed to the Company in writing.

Section 7.3Non-Competition; Non-Solicitation; Confidentiality.

(a)Non-Disclosure of Confidential Information. None of the Restricted Parties shall, directly or indirectly, disclose or use at any time (and shall cause their respective Affiliates and Representatives not to use or disclose) any Confidential Information (whether or not such information is or was developed by any of the Restricted Parties), except to the extent that such disclosure or use is directly related to and required by the performance of the Restricted Party’s duties to the Company or the Buyer or as required by Law or as otherwise provided hereunder. The Restricted Parties each further agrees to take commercially reasonable steps, to the extent within its control, to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event any of the Restricted Parties is required by Law to disclose any Confidential Information, such Restricted Party shall promptly notify the Buyer in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and shall cooperate with the Buyer’s reasonable requests to preserve the confidentiality of such Confidential Information consistent with applicable Law. For purposes of this Agreement, “Confidential Information” means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as “confidential”), in any form or medium, that relates to the Business, the Company, or its suppliers, distributors, customers, independent contractors or other business relations. Confidential Information includes the following as they relate to the Company or the Business and, in each case, to the extent the Company or the Business obtains a commercial benefit from the secret nature of such information: internal business information (including information relating to strategic and staffing plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods and potential acquisition

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candidates); identities of, individual requirements of, and specific contractual arrangements with, the Company’s suppliers, distributors, customers, independent contractors or other business relations and their confidential information; trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; and inventions, innovations, improvements, developments, methods, designs, analyses, drawings, and reports. Notwithstanding the foregoing, Confidential Information does not include such information which: (A) at the time of disclosure is publicly available or thereafter becomes publicly available through no act or omission of a Restricted Party; (B) is thereafter disclosed or furnished to the Restricted Party by a third party who is not known by such Restricted Party to have acquired the information under an obligation of confidentiality; (C) is independently developed by the Restricted Party without the use of or reference to Confidential Information after the Closing Date; or (D) is disclosed by the Restricted Party (subject to compliance with the applicable provisions of this subsection (a)) under compulsion of applicable Law.

(b)Non-Competition.

(i)Each Restricted Party is familiar with the trade secrets related to the Company and the Business, and with other Confidential Information concerning the Company and the Business, including all (A) inventions, technology and research and development related to the Business, (B) customers and clients and customer and client lists related to the Business, (C) products (including products under development) and services related to the Business and related costs and pricing structures and manufacturing techniques, (D) accounting and business methods and practices related to the Business and (E) similar and related confidential information and trade secrets related to the Business. Each Restricted Party acknowledges and agrees that the Company would be irreparably damaged if any of the Restricted Parties were to directly or indirectly provide services to any Person competing with the Business or engaging in a similar business and that such direct or indirect competition by any Restricted Party would result in a significant loss of goodwill by the Company.

(ii)In further consideration for the Buyer’s payment to Restricted Parties of the Purchase Price under this Agreement (in respect of which payment each of the Restricted Parties expressly acknowledges that it derives a substantial and direct benefit), and in order to protect the value of the Company and the Business acquired by the Buyer hereunder (including the goodwill inherent in the Company and the Business as of the date hereof), each Restricted Party hereby agrees that during the period commencing on the Closing Date and ending on the second (2^nd) anniversary of the date on which the final payment is made to the Sellers pursuant to Article II hereunder (the “Non-Competition Period”), such Restricted Party shall not acquire or hold any economic or financial interest in, act as a partner, member, shareholder, or Representative of, render any services to, or otherwise operate or hold an interest in any Person (other than the Seller) having any location in any country in which the Business currently operates which entity, enterprise or other Person primarily engages in, or engages in the management or operation of any Person that primarily engages in any business that competes with the Business; provided, however, that nothing contained herein shall be construed to prohibit any Restricted Party from purchasing up to an aggregate of two percent (2%) of any class of the outstanding voting securities of any other Person whose securities are listed on a national securities exchange (but only if such investment is held on a purely passive basis).

(c)Non-Solicitation; Non-Disparagement. During the period commencing on the Closing Date and ending on the fifth (5th) anniversary of the Closing Date (the “Non-Solicitation Period”), none of the Restricted Parties shall, directly or indirectly, either individually or acting in concert with another Person or Persons:

(i)request, induce or attempt to influence any distributor, supplier or customer of goods or services of the Business to curtail, cancel or refrain from maintaining or increasing the amount

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or type of business such distributor, supplier or customer of goods or services is currently transacting, or may be transacting during the Non-Solicitation Period, with the Business or modify its pricing or other terms of sale with the Business;

(ii)except pursuant to a general solicitation to the public, solicit for employment or retention or hire, employ or retain any Person who is an employee of the Business during the Non-Solicitation Period;

(iii)influence or attempt to influence any Person who is an employee of the Business during the Non-Solicitation Period to terminate his or her employment with the Company or the Business; or

(iv)make any negative, derogatory or disparaging statements or communications regarding the Buyer, the Business, the Company, or their respective Affiliates or employees.

(d)Severability. Notwithstanding anything to the contrary in this Agreement, if at any time, in any judicial or arbitration proceeding, any of the restrictions stated in this Section 7.3 are found by a final order of a court of competent jurisdiction or arbitrator to be unreasonable or otherwise unenforceable under circumstances then existing, the Parties each agree that the period, scope or geographical area, as the case may be, shall be reduced to the extent necessary to enable the court to enforce the restrictions to the extent such provisions are allowable under applicable Law, giving effect to the agreement and intent of the Parties that the restrictions contained herein shall be effective to the fullest extent permissible. In the event of a Breach or violation by any Restricted Party of any of the provisions of this Section 7.3, the Non-Competition Period or Non-Solicitation Period, as the case may be, will be tolled for so long as such Restricted Party was in violation of such provision. Each Restricted Party agrees that the restrictions contained in this Agreement are reasonable in all respects and necessary to protect the Buyer’s interest in, and the value of, the Business.

(e)Specific Performance; Injunctive Relief. Each Restricted Party acknowledges and agrees that in the event of a Breach by any Restricted Party of any of the provisions of this Section 7.3, the Buyer would suffer irreparable harm, no adequate remedy at law would exist for the Buyer, and damages would be difficult to determine. Consequently, in the event of any such Breach, the Buyer or its successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of law or equity of competent jurisdiction for specific performance or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof, in each case without the requirement of posting a bond or proving actual damages.

(f)Allocation of Purchase Price.  The Restricted Parties understand that Buyer shall be performing valuations of the Class A Purchase Price and the Class B Purchase Price for the purpose, among other things, of valuing the covenants made by each Restricted Party in this Section 7.3. Each Restricted Party agrees that such valuation shall be dispositive regarding the allocation of the respective purchase price.

Section 7.4Preservation of Records. Subject to Section 7.1(c) hereof (relating to the preservation of Tax Records), the Sellers and the Buyer agree that each of them shall (and shall cause the Company to) preserve and keep the records held by them relating to the Business of the Company for a period of three (3) years from the Closing Date and shall make such records and personnel available to the other Parties as may be reasonably required by such Party in connection with, among other things, any insurance claims by, legal proceedings against or governmental investigations of the Sellers, the Company, or the Buyer, or any of their Affiliates, or in order to enable the Sellers, the Company or the Buyer to comply with their respective obligations under this Agreement and each Other Agreement.

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Section 7.5Use of Name. The Sellers hereby acknowledge and agree that upon the consummation of the transactions contemplated hereby, the Buyer and the Company shall have the sole right to the use of the names “TriGen Holdings Group” and “TriGen Insurance Solutions” or any service marks, trademarks, trade names, identifying symbols, logos, emblems, signs or insignia related thereto or containing or comprising the foregoing, including any name or mark confusingly similar thereto (collectively, the “Company Marks”). The Sellers shall not, and shall cause their respective Affiliates not to, use such names or any variation or simulation thereof or any of the Company Marks. The Sellers shall, and shall cause their respective Affiliates to, immediately following the Closing, cease to hold themselves out as stockholders, Affiliates or Representatives of the Company or any of its Affiliates.

Section 7.6Post-Closing Matters. Each of the Parties shall satisfy the requirements set forth on Schedule 7.6 on or before the date specified for such requirement or such later date to be mutually agreed to by the parties.

Section 7.7General. In case at any time after the Closing any further actions are necessary or desirable to carry out the purposes of this Agreement, each of the Parties shall take such further actions (including the execution and delivery of such further instruments and documents) as any other Party may reasonably request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Article VIII below). The Sellers acknowledge and agree that from and after the Closing, the Buyer will be entitled to all documents, books and records (including Tax records), agreements, and financial data of any sort relating to the Company.

ARTICLE VIII
INDEMNIFICATION

Section 8.1Survival of the Company’s and the Sellers’ Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Company and the Sellers contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of eighteen (18) months after the Closing Date; provided, however, that the representations and warranties set forth in in Section 3.1 (Organization and Qualification), Section 3.2 (Authorization; Enforceability), Section 3.3 (Organizational Documents), Section 3.4 (Capitalization), Section 3.11 (Taxes), Section 3.20 (Compliance with Environmental, Health and Safety Requirements), Section 3.21 (Employee Benefit Plans), Section 3.26 (Brokers), Section 4.1 (Authorization; Enforceability), Section 4.2 (Title to Shares), and Section 4.7 (Brokers) (each of the foregoing, a “Fundamental Representation”) shall survive the Closing until the expiration of the applicable statute of limitations plus sixty (60) days. All Post-Closing Covenants of the Company and the Sellers will survive the Closing in accordance with their terms. If the Buyer provides notice of a claim in accordance with the terms of this Agreement prior to the end of the applicable period of survival set forth in this Section 8.1, then the Liability for such claim will continue until such claim is fully resolved.

Section 8.2Survival of the Buyer’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Buyer contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of eighteen (18) months after the Closing Date; provided, however, that the representations and warranties in Section 5.1 (Organization and Qualification) and Section 5.2 (Authorization; Enforceability) shall survive until the expiration of the applicable statute of limitations plus sixty (60) days. All Post-Closing Covenants of the Buyer will survive the Closing in accordance with their terms or, if no term is stated, then a period of twelve (12) months. If the Seller provides notice of a claim in accordance with the terms of this Agreement prior to the end of the applicable period of survival set forth in this Section 8.2, then the Liability for such claim will continue until such claim is fully resolved.

Section 8.3Indemnification by the Sellers. Subject to the terms, conditions and limitations set forth in this Article VIII, the Sellers severally (and not jointly) shall indemnify, defend and hold harmless the Buyer

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Indemnified Parties from and against, and shall promptly pay or reimburse each Buyer Indemnified Party for, any and all Losses sustained or incurred by any Buyer Indemnified Party resulting from:

(a)any Breach of a representation or warranty made by the Company or any Seller in this Agreement or any Other Agreement;

(b)any Breach of a Post-Closing Covenant made by any Seller;

(c)any claim or assertion in respect of Indebtedness or broker’s or agent’s fees or expenses arising out of the transactions contemplated by this Agreement by a Person claiming to have been engaged by such Sellers or its Affiliates; or

(d)any Pre-Closing Taxes.

Provided, however, that (A) Sellers shall not have any obligation to indemnify Buyer from and against any Losses under Section 8.3(a) or (b) above until Buyer has suffered Losses by reason of all such breaches in excess of a $50,000 aggregate deductible (after which point Sellers will be obligated only to indemnify Buyer from and against further such Losses) and (B) there will be a cap on the obligation of Sellers to indemnify Buyer from and against Losses under Section 8.3(a) or (b) above equal to the aggregate Purchase Price actually received by the Sellers. The foregoing limitations are not applicable to Losses based on fraud and Losses under Section 3.10(b). The foregoing limitations, with respect to Losses under Section 8.3(b), are not applicable to the Restricted Parties.

Section 8.4Indemnification by the Buyer. Subject to the terms, conditions and limitations set forth in this Article VIII, from and after the Closing, the Buyer shall indemnify, defend and hold harmless the Seller Indemnified Parties from and against any and all Losses sustained or incurred by any Seller Indemnified Party resulting from:

(a)any Breach of a representation or warranty made by the Buyer in this Agreement;

(b)any Breach of a Post-Closing Covenant made by the Buyer in this Agreement; or

(c)any claim or assertion for broker’s or finder’s fees or expenses arising out of the transactions contemplated by this Agreement by any Person claiming to have been engaged by either the Buyer or any of its Affiliates.

Section 8.5Indemnification Procedure for Third Party Claims.

(a)Other than a claim involving Taxes which procedure is set forth in, and which shall be governed exclusively by, Section 7.1, in the event that subsequent to the Closing, any Person that is or may be entitled to indemnification under this Agreement (an “Indemnified Party”) receives notice of the assertion of any claim, issuance of any order or the commencement of any action or proceeding by any Person who is not a Party or an Affiliate of a Party, including, without limitation, any domestic or foreign court or Governmental Authority (a “Third Party Claim”), against such Indemnified Party and for which a Party is or may be required to provide indemnification under this Agreement (an “Indemnifying Party”), such Indemnified Party shall give written notice thereof, together with a statement of any available information regarding such Third Party Claim to such Indemnifying Party, within thirty (30) days after learning of such Third Party Claim; provided, however, that failure to give such written notice within any particular time period shall not adversely affect the Indemnified Party’s right to indemnification except, and to the extent that, the Indemnifying Party can show that the failure to give such notification on a timely basis directly and adversely affected the Indemnifying Party’s ability to defend such Third Party Claim. The Indemnifying Party shall have the right upon written notice to the

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Indemnified Party (the “Defense Notice”), within fifteen (15) days after receipt from the Indemnified Party of notice of such Third Party Claim, to conduct, at its expense, the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party. In the event that the Indemnifying Party does not elect to conduct the defense of the subject Third Party Claim, then the Indemnified Party may conduct the defense of the subject Third Party Claim and the Indemnifying Party will cooperate with and make available to the Indemnified Party such assistance and materials as may be reasonably requested by the Indemnified Party. In the event that the Indemnifying Party does elect to conduct the defense of the subject Third Party Claim, then the Indemnified Party will cooperate with and make available to the Indemnifying Party such assistance and materials as may be reasonably requested by it, and the Indemnified Party shall have the right to participate in the defense assisted by counsel of its own choosing. Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter into any settlement of any Third Party Claim or cease to defend against such Third Party Claim, if pursuant to or as a result of such settlement or cessation, (i) injunctive or other equitable relief would be imposed against the Indemnified Party, or (ii) each claimant or plaintiff in such Third Party Claim has not given to the Indemnified Party an unconditional release from all Liability with respect to such Third Party Claim.

(b)Notwithstanding anything contained in Section 8.5(a) to the contrary, the Indemnifying Party under this Section 8.5 shall not be entitled to control, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of any Third Party Claim if any of the following conditions are not satisfied:

(i)the Indemnifying Party shall acknowledge in writing that it shall be fully responsible for all Losses relating to such proceeding, which acknowledgement is deemed given by the Sellers in its capacity as representative to the Sellers;

(ii)the Indemnifying Party must diligently defend such proceeding;

(iii)the Indemnifying Party must furnish the Indemnified Party with evidence that the financial resources of the Indemnifying Party, in the Indemnified Party’s reasonable judgment, are and will be sufficient (when considering Losses in respect of all other outstanding claims) to satisfy any Losses relating to such proceeding;

(iv)such proceeding shall not involve criminal actions or allegations of criminal conduct by the Indemnifying Party, and shall not involve claims for specific performance or other equitable relief; and

(v)there does not exist, in the Indemnified Party’s good faith judgment, based on the advice of outside legal counsel, a conflict of interest which, under applicable principles of legal ethics, could reasonably be expected to prohibit a single legal counsel from representing both the Indemnified Party and the Indemnifying Party in such proceeding.

Section 8.6Treatment of Indemnification. All indemnification payments made under this Agreement shall be treated by all Parties as an adjustment to the Purchase Price.

Section 8.7No Right of Contribution. Each Seller hereby waives, and acknowledges and agrees that such Seller shall not exercise or assert (or attempt to exercise or assert), any right of contribution, right of indemnity or other right or remedy against the Company in connection with any indemnification obligation or any other Liability to which such Seller may become subject under this Agreement or any of the Other Agreements.

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ARTICLE IX
DEFINITIONS

Definitions. As used in this Agreement,

“Actual EBITDA” means EBITDA for the Measurement Period.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by, or under direct or indirect common Control with, such Person. For purposes of this definition, a Person shall be deemed to Control another Person if such Person owns or Controls, directly or indirectly, more than twenty five percent (25%) of the voting Equity Interests of the other Person. “Control,” “Controlled” or “Controlling” means the ability of a Person (collectively or with its Affiliates) directly or indirectly to direct the use of, disposition of and access to the property of another Person.

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

“Assets” of any Person means all assets and properties of any kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether accrued, contingent, fixed or otherwise, and wherever located), including the good will related thereto, operated, owned or leased by such Person.

“Basis” means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could form the basis for any specified consequence.

“Breach” means (a) the violation of any covenant, agreement, Law, right, obligation, engagement or duty, whether by commission or omission, (b) the failure to perform, refusal to perform, or prevention or hindrance of performance of, any covenant, agreement, obligation, engagement or duty, (c) the performance of any act which by covenant, agreement or duty must not be performed, (d) any breach, inaccuracy or misstatement in any representation or warranty, or (e) any event which, with the passage of time or provision of notice, would constitute any of the above.

“Business” means the business of risk management and insurance solutions as the Company is engaged in as of the Closing Date.

“Business Day” means any day other than a Saturday, Sunday or other day on which the banks in New York City, New York are permitted or required by applicable Law to close.

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

“Buyer Indemnified Parties” means the Buyer, the Company and their respective Representatives, successors and assigns.

“Buyer’s Knowledge” or “Knowledge of the Buyer” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known to Scott West or Jon Gaunt.

“Cash on Hand” means all cash and cash equivalents, calculated as of 12:01 a.m., Eastern Time, on the date of calculation, determined in accordance with GAAP.

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

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“Company’s Knowledge” or “Knowledge of the Company” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known to Moses Lee and David Jsa after making due inquiry and reasonable investigation.

“Consent” means any approval, consent, ratification, waiver, notice or other authorization.

“Contract” means any written or oral agreement, note, guarantee, mortgage, indenture, lease, deed of trust, license, plan, instrument or other contract or legally binding arrangement or commitment.

“EBITDA” means earnings before interest, taxes, depreciation and amortization.

“Equity Interests” means (a) any partnership interests, (b) any membership interests or units, (c) any shares of capital stock, (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, (e) any subscriptions, calls, warrants, options, or commitments of any kind or character relating to, or entitling any Person or entity to purchase or otherwise acquire membership interests or units, capital stock, or any other equity securities, (f) any securities convertible into or exercisable or exchangeable for partnership interests, membership interests or units, capital stock, or any other equity securities, or (g) any other interest classified as an equity security of a Person.

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

“ERISA Affiliate” means any Person that is included in a controlled group of companies within which the Company is also included, as provided in Section 414(b) of the Code; or which is a trade or business under common control with the Company, as provided in Section 414(c) of the Code; or which constitutes a member of an affiliated service group within which the Company is also included, as provided in Section 414(m) of the Code; or which is required to be aggregated with the Company pursuant to regulations issued under Section 414(o) of the Code.

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

“General Enforceability Exceptions” means those exceptions to enforceability due to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally, and general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity).

“Governmental Authority” means the United States or any state, provincial, county, municipal, city, local or foreign government, or any instrumentality, division, subdivision, department, agency or authority of any thereof having competent jurisdiction over any of the Company, the Buyer or the transactions contemplated by this Agreement, as applicable.

“Indebtedness” means, with respect to any Person, all Liabilities in respect of: (a) borrowed money; (b) indebtedness evidenced by bonds, notes, debentures or similar instruments (c) capitalized lease obligations; (d) the deferred purchase price of assets, services or securities (other than ordinary trade accounts payable); (e) conditional sale or other title retention agreements; (f) the factoring or discounting of accounts receivable; (g) swap or hedging agreements or arrangements, (h) reimbursement obligations, whether contingent or matured, with respect to letters of credit, bankers’ acceptances, bank overdrafts, surety bonds, other financial guarantees and interest rate protection agreements (without duplication of other indebtedness supported or guaranteed thereby); (i) interest, premium, penalties and other amounts owing in respect of the items described in the foregoing clauses (a) through (h) after giving effect to the Closing, (j) all Indebtedness of the types referred to in clauses (a) through (b) guaranteed in any manner by such Person, whether or not any of the foregoing would

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appear on a consolidated balance sheet prepared in accordance with GAAP; (k) any unfunded pension liabilities; and (l) any so-called “change of control” payments.

“Intellectual Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, designs, shapes, configurations, slogans, trade names, corporate names, Internet domain names, and rights in telephone numbers, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, recipes, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including source code, executable code, data, databases, and related documentation), (g) all advertising and promotional materials, (h) all other proprietary rights, and (i) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).

“Law” means each provision of any currently implemented federal, state, local or foreign law, statute, ordinance, order, code, rule or regulation, promulgated or issued by any Governmental Authority.

“Lease” means (a) any lease, sublease, license, concession or other Contract relating to the occupancy of any improved space on any Real Property, (b) any long-term Contract to lease Real Property in which most of the rights and benefits comprising ownership of the Real Property, if any, are transferred to the tenant for the term thereof, (c) any Contract, license, or right to use pertaining to the possession or use of any Tangible Personal Property, in each case, together with all amendments, extensions, renewals, modifications, alterations, guaranties and other changes thereto, and including the right to all security deposits and other amounts and instruments deposited thereunder.

“Liability” means any liability or obligation of whatever kind or nature (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due), including without limitation any liability for Taxes.

“Licenses and Permits” means any licenses, permits, certificates, certifications, privileges, immunities, notifications, exemptions, classifications, registrations, easements, franchises, approvals, authorizations, orders and other similar rights (or any waivers of the foregoing) issued by any Governmental Authority, and all pending applications therefor or renewals thereof.

“Lien” means any mortgage, pledge, hypothecation, hypothec, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting trust agreement, proxy, interest, equity, option, lien, preemptive right, right of first offer or refusal, charge or other restrictions or limitations of any nature whatsoever, other than (a) restrictions on the offer and sale of securities under federal and state securities Laws and (b) any Permitted Liens.

“Loss” or “Losses” means, with respect to any Person, all Liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, Taxes, fines, penalties, damages (including punitive, special and consequential damages), lost profits, diminution in value (based on a multiple

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of earnings or otherwise), costs and expenses (including reasonable attorneys’ fees) sustained or incurred by such Person.

“Material Adverse Effect” or “Material Adverse Change” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, is materially adverse to the business, financial condition, results of operations or prospects (including the achievement or the ability to achieve forecasts of revenue or earnings) of the Company or the Business. For the avoidance of doubt, by way of illustration and not limitation, a “Material Adverse Effect” or “Material Adverse Change” shall include any matter or matters that, alone or in the aggregate, is or are likely to, or could reasonably be expected to, result in Losses to the Company in excess of ten percent (10%) of the Purchase Price, or that a reasonable investor would consider as significantly and adversely affecting its investment decision with respect to the transactions contemplated herein.

“Measurement Period” shall mean the 2015 fiscal year ending December 31, 2015.

“Ordinary Course of Business” means, in respect of any Person, the ordinary course of such Person’s business, as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in this Agreement or any Other Agreement.

“Organizational Documents” means (a) with respect to a corporation, the certificate or articles of incorporation and bylaws; (b) with respect to any other entity, any charter or similar document adopted or filed in connection with the creation, formation or organization of such entity; and (c) any amendment to any of the foregoing.

“Other Agreements” means each agreement, document, certificate and instrument being delivered pursuant to this Agreement, including, without limitation, the documents and agreements to be delivered by the Parties pursuant to Article VI hereof.

“Permitted Liens” means collectively, (a) Liens for Taxes not yet payable or the validity of which are being contested in good faith by appropriate proceedings and for which adequate reserves are reflected in the Latest Balance Sheet; (b) Liens arising in connection with worker’s compensation, unemployment insurance, old age pensions and social security benefits which are not overdue or are being contested in good faith by appropriate proceedings and for which provision for the payment of such Liens has been reflected in the Latest Balance Sheet; and (c) Liens arising by operation of law on insurance policies and proceeds thereof to secure premiums thereunder.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or Governmental Authority, in each case including, without limitation, such Person’s successors and permitted assigns (or, in the case of a Governmental Authority, Persons succeeding to the relevant function of such Governmental Authority).

“Post-Closing Covenant” means any covenant, promise, commitment or other obligation (or any portion thereof) made or undertaken by any Party, in this Agreement or any Other Agreement, to the extent performance or fulfillment thereof is required by its terms to be accomplished after the Closing.

“Pre-Closing Taxes” shall mean any Taxes attributable to any taxable period ending on or before the Closing Date and, with respect to any Straddle Period, the portion of such period that ends on and includes the Closing Date. In the case of any Taxes that are imposed on a periodic basis and are payable for a Straddle Period, the portion of such Tax that constitutes Pre-Closing Taxes shall (a) in the case of any Taxes other than Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire Tax

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period multiplied by a fraction the numerator of which is the number of days in the Tax period that precedes and includes the Closing Date and the denominator of which is the number of days in the entire Tax period, and (b) in the case of any Tax based upon or related to income or receipts, be deemed equal to the amount which would be payable if the relevant Tax period ended on the Closing Date. Any credits relating to a Straddle Period shall be taken into account as though the relevant Tax period ended on the Closing Date.

“Real Property” means all parcels and tracts of land, together with all buildings, structures, fixtures and improvements located thereon (including those under construction), and all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of such land, including all easements appurtenant to and for the benefit of such land, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.

“Representative” means, with respect to any Person, any director, officer, principal, attorney, employee, agent, consultant, accountant, or any other Person acting in a representative capacity for such Person.

“Restricted Party” means Carla Busick and Chris Rhoden.

“Securities Act” means the Securities Act of 1933, as amended.

“Seller Indemnified Parties” means the Sellers and their respective Representatives, successors and permitted assigns.

“Sellers’ Knowledge” or “Knowledge of the Sellers” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known or would reasonably be expected to be known to the Sellers after due inquiry and reasonable investigation.

“Straddle Period” means any taxable period that includes the Closing Date and ends after the Closing Date.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (b) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose, a Person or Persons owns a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be or control any managing director or general partner of such business entity (other than a corporation); and the term “Subsidiary” shall include all Subsidiaries of such Subsidiary.

“Tax” or “Taxes” means (a) any U.S. federal, state, local, or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value-added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being a member of a consolidated, combined, unitary or aggregate group for any Tax period, and (c) any liability for the payment of any amounts of the type described

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in clause (a) or (b) as a result of being a transferee or successor to any person or as a result of any express or implied obligation to indemnify any other person or payable pursuant to any tax sharing agreement or any other contract relating to the sharing or payment of any such Tax.

“Tax Returns” means any return, declaration, report, schedule, notice, form, claim for refund, or information return or statement (including any attachment thereto and any amendment thereof) filed with or submitted to, or required to be filed with or submitted to, any Taxing Authority.

“Taxing Authority” means any governmental authority, domestic or foreign, having jurisdiction over the assessment, determination, collection, or other imposition of any Taxes.

“Treasury Regulation” means the regulations of the U.S. Department of the Treasury promulgated under the Code, as such Treasury Regulations may be amended from time to time. Any reference herein to a particular Treasury Regulation means, where appropriate, the corresponding successor provision.

ARTICLE X
MISCELLANEOUS

Section 10.1Notices, Consents, etc. Any notices, consents or other communications required to be sent or given hereunder by any of the Parties shall in every case be in writing and shall be deemed properly served if and when (a) delivered by hand, (b) transmitted by facsimile, e-mail or other means of electronic transmission, or (c) delivered by Federal Express or other express overnight delivery service, or (d) sent by registered or certified mail, return receipt requested, to the Parties at the addresses as set forth below or at such other addresses as may be furnished in writing:

If to the Sellers:	Carla Busick 200 East Palmetto Park Road, #14 Boca Raton, FL 33423 Chris Rhoden 4638 Thornlea Road Orlando, FL 32817 Martin H. Jones [ADDRESS]
If to the Buyer or Company:	Patriot Services, Inc. 401 East Las Olas Boulevard, Suite 1650 Fort Lauderdale, Florida 33301 Attn: Christopher A. Pesch, General Counsel Phone: 954-670-2941 Email: cpesch@patnat.com

Date of service of such notice shall be (i) the date such notice is delivered by hand, facsimile, e-mail or other form of electronic transmission, (ii) one Business Day following the delivery by express overnight delivery service, or (iii) three (3) days after the date of mailing if sent by certified or registered mail.

Section 10.2Severability. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of any other provision. Upon such determination that any term or other provision is unenforceable or invalid, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a legally acceptable manner in order that

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the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

Section 10.3Successors; Assignment. This Agreement will be binding upon, and inure to the benefit of, the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by the Sellers without the prior written consent of the Buyer or by the Buyer without the prior written consent of Sellers; provided, however, that the Buyer may assign this Agreement in whole or in part to any of its Affiliates or to any Person which becomes a successor in interest (by purchase of assets or equity, or by merger or otherwise) to all or any portion of the Buyer, its Assets or its Subsidiaries, and the Buyer may assign its rights under this Agreement and the Other Agreements to its financing sources.

Section 10.4Counterparts; Facsimile Signatures. This Agreement may be executed simultaneously in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of e-mail, facsimile or other means of electronic transmission, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

Section 10.5Expenses. Except as otherwise provided in this Agreement, each of the Sellers, the Company and the Buyer shall bear and pay for all of its own costs, fees and expenses (including legal, accounting, investment banking, broker’s, finder’s and other professional or advisory fees and expenses) incurred or to be incurred by it, in each case, in negotiating and preparing this Agreement and the Other Agreements and in closing and carrying out the transactions contemplated hereby and thereby.

Section 10.6Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than the State of Delaware.

Section 10.7Table of Contents and Headings. The table of contents and section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation of any of the provisions of this Agreement.

Section 10.8Entire Agreement. This Agreement, the Recitals, the Schedules and the Exhibits attached hereto and the Other Agreements (all of which shall be deemed incorporated in this Agreement and made a part hereof) set forth the entire understanding of the Parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements and representations and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof. This Agreement may be modified only by subsequent instruments signed by the Parties hereto.

Section 10.9Third Parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any Person, other than the Parties to this Agreement, the Buyer Indemnified Parties or the Seller Indemnified Parties and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

Section 10.10Disclosure Generally. All Schedules attached hereto are incorporated herein and expressly made a part of this Agreement as though completely set forth herein. All references to this Agreement herein or in any of the Schedules shall be deemed to refer to this entire Agreement, including all Schedules.

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Information furnished in any particular Schedule shall not be deemed to be included in all other Schedules in which the information is required to be included unless specifically designated with a cross-reference.

Section 10.11Interpretive Matters. Unless the context otherwise requires, (a) all references to Articles, Sections, Schedules or Exhibits shall mean and refer to Articles, Sections, Schedules or Exhibits in this Agreement; (b) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP; (c) words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and neuter; (d) the term “including” shall mean “including without limitation” (i.e., by way of example and not by way of limitation); (e) all references to statutes and related regulations shall include all amendments of the same and any successor or replacement statutes and regulations; (f) references to “hereof”, “herein”, “hereby” and similar terms shall refer to this entire Agreement (including the Schedules and Exhibits hereto); (g) references to “records” shall refer to all information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form; (h) “or” is used in the inclusive sense of “and/or,”; and (i) whenever this Agreement refers to a number of days, such number shall refer to calendar days, unless such reference is specifically to “Business Days.” The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has Breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) that the Party has not Breached shall not detract from or mitigate the fact that the Party is in Breach of such representation, warranty or covenant.

Section 10.12Construction. Each of the Parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted it is of no application and is hereby expressly waived by the Parties hereto.

Section 10.13Submission to Jurisdiction. EACH OF THE PARTIES SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN FORT LAUDERDALE, FLORIDA IN ANY ACTION OR PROCEEDING ARISING OUT OF, OR RELATING TO, THIS AGREEMENT, AGREES THAT ALL CLAIMS IN RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND AGREES NOT TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF, OR RELATING TO, THIS AGREEMENT IN ANY OTHER COURT. EACH OF THE PARTIES WAIVES ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT THERETO. EACH PARTY AGREES THAT SERVICE OF SUMMONS AND COMPLAINT OR ANY OTHER PROCESS THAT MIGHT BE SERVED IN ANY ACTION OR PROCEEDING MAY BE MADE ON SUCH PARTY BY SENDING OR DELIVERING A COPY OF THE PROCESS TO THE PARTY TO BE SERVED AT THE ADDRESS OF THE PARTY AND IN THE MANNER PROVIDED FOR THE GIVING OF NOTICES IN SECTION 10.1. NOTHING IN THIS SECTION, HOWEVER, SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING SO BROUGHT SHALL BE CONCLUSIVE AND MAY BE ENFORCED BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

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Section 10.14Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY IRREVOCABLY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION WITH THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.14 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 10.15Press Releases and Communications. Following the Closing, Buyer may issue a press release or public announcement regarding this Agreement or the transactions contemplated herein; provided, that any such press release or public announcement shall not describe, include or otherwise refer to the economic terms of the transactions contemplated by this Agreement.

Section 10.16Sellers’ Release.

(a)Each of the Sellers hereby releases and forever discharges each of the Buyer, the Company, their respective Affiliates, and the directors, officers, members, managers, partners, employees, agents and representatives of each of them (collectively, the “Releasees”), from any and all claims, allegations, Liens, lawsuits, adverse consequences, damages, losses, amounts paid in settlement, Indebtedness, deficiencies, diminution in value, disbursements, obligations, costs or demands and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity, whether liquidated or unliquidated, fixed or contingent, direct or indirect or derivative, asserted or unasserted, foreseen or unforeseen, matured or unmatured, anticipated or unanticipated, that each of the Sellers now has, has ever had or may hereafter have against the respective Releasees arising prior to the Closing Date or on account of or arising out of any matter, cause or event occurring prior to the Closing Date, whether pursuant to contract or otherwise, and whether or not relating to claims pending on, or asserted after, the Closing Date, including without limitation claims by any Seller related to such Seller’s share of the proceeds received in connection with this Agreement.

(b)Each of the Sellers understands, acknowledges and agrees that the releases set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any actions, suits, proceedings, demands, assessments, judgments, settlements and compromises which may be instituted, prosecuted or attempted in breach of the provisions of such release. Each of the Sellers agrees that no fact, event, circumstance, evidence or transaction that could now be asserted or that may hereafter be discovered shall affect in any manner the final and unconditional nature of the releases set forth above. Each of the Sellers represents and warrants that it is the sole and lawful owner of all right, title and interest in and to all of the claims released hereby, and has not heretofore voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any Person any such claim or any portion thereof.

(c)Each of the Sellers hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim or demand, or commencing, instituting or causing to be commenced, any actions, suits, proceedings, demands, assessments, judgments, settlements and compromises of any kind against any Releasee, based upon any matter purported to be released hereby.

[Signature Page Follows]

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

Patriot Services, Inc.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	President and CEO
TriGen Holdings Group, Inc.
By:	/s/Carla A. Busick
Name:	Carla A. Busick
Title:	CEO
Sellers
/s/ Carla A. Busick
Carla A. Busick
/s/ W. Christopher Rhoden
W. Christopher Rhoden
/s/ Martin H. Jones
Martin H. Jones

[Signature Page to Stock Purchase Agreement]

* All Schedules and exhibits to this Exhibit 2.2 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Schedules include a list of foreign jurisdictions, officers and directors, capitalization table, financial statements, list of intellectual property, description of employee benefit programs, list of bank accounts, wiring instructions and customer lists. The exhibits include copies of demand notes. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-2.3

Exhibit 2.3

AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT

April 13, 2015

This Amendment No. 1 (this “Amendment”) to the Stock Purchase Agreement dated as March 31, 2015, by and among TriGen Insurance Solutions, Inc., a Delaware corporation (as successor by merger to TriGen Holdings Group, Inc.) (the “Company”), Carla A. Busick, W. Christopher Rhoden, and Martin H. Jones, each an individual (together, the “Sellers”), and Patriot Services, Inc., a Delaware corporation (“Buyer”) (the “Existing Agreement”).

1. Definitions.  Capitalized terms used and not defined in this Amendment have the respective meanings assigned to them in the Existing Agreement.

2. Amendments to the Existing Agreement.  As of the Effective Date (defined below), the Existing Agreement is hereby amended or modified as follows:

a) The definition of “Restricted Party" now appearing in Article IX (Definitions) of the Existing Agreement is hereby amended in its entirety to read as follows:

"Restricted Party” means Carla A. Busick, W. Christopher Rhoden and Martin H. Jones.

3. Date of Effectiveness; Limited Effect.  This Amendment will be deemed effective as of April 13, 2015 (the "Effective Date"). Except as expressly provided in this Amendment, all of the terms and provisions of the Existing Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Existing Agreement or as a waiver of or consent to any further or future action on the part of either Party that would require the waiver or consent of the other Party. On and after the Effective Date, each reference in the Existing Agreement to "this Agreement," "the Agreement," "hereunder," "hereof," "herein" or words of like import will mean and be a reference to the Existing Agreement as amended by this Amendment.

4. Miscellaneous.

a) This Amendment is governed by, and construed in accordance with, the laws of the State of Florida, without regard to the conflict of laws provisions of such State.

b) This Amendment shall inure to the benefit of and be binding upon each of the Parties and each of their respective successors and permitted assigns.

c) The headings in this Amendment are for reference only and do not affect the interpretation of this Amendment.

d) This Amendment may be executed in counterparts, each of which is deemed an original, but all of which constitutes one and the same agreement.

e) This Amendment constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 as of the Effective Date set forth above.

Patriot Services, Inc.
By:	/s/ Steven M. Mariano
Name:	Steven M. Mariano
Title:	President and CEO
TriGen Insurance Solutions, Inc.,
as successor by merger to TriGen Holdings Group, Inc.
By:	/s/ Carla A. Busick
Name:	Carla A. Busick
Title:	CEO
By:	/s/ Carla A. Busick
Name:	Carla A. Busick
By:	/s/ W. Christopher Rhoden
Name:	W. Christopher Rhoden
By:	/s/ Martin H. Jones
Name:	Martin H. Jones

[Signature Page to Amendment No. 1 to Stock Purchase Agreement (TriGen)]

EX-2.4

Exhibit 2.4

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”) effective as of April 1, 2015 (“Effective Date”), by and among TriGen Insurance Solutions, Inc., a Delaware corporation (the “Buyer”), Hospitality Supportive Systems, LLC, a Pennsylvania limited liability company (the “Seller”) and Edward Snow, an individual and the sole shareholder of the Seller (the “Equity Holder”). Each of the foregoing parties may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used and not otherwise defined herein shall have the meanings set forth in Article 7 below.

RECITALS

WHEREAS, the Equity Holder owns all of the Equity Interests of the Seller and the Seller is engaged in the business of providing property and liability insurance programs to restaurants, bars and taverns (the “Business”); and

WHEREAS, the Seller wishes to sell to the Buyer and the Buyer wishes to purchase from the Seller, the rights and obligations of the Seller to the Purchased Assets (as defined herein) subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF THE PURCHASED ASSETS

1.1 Purchased Assets and Excluded Assets.

1.1.1 Purchased Assets. On the terms and subject to the conditions hereof and in consideration of the Purchase Price to be paid to the Seller by the Buyer, the Buyer hereby purchases and acquires from the Seller, and the Seller hereby sells, conveys, assigns, transfers and delivers to the Buyer, all of the Seller’s right, title and interest in and to all assets, properties, rights and interests, of any kind and description pertaining to the Business (whether personal, tangible or intangible, or fixed, contingent or otherwise), wherever located and by whomever possessed, owned, licensed or leased by the Seller, other than the Excluded Assets (collectively, the “Purchased Assets”), free and clear of all Liens, including, without limitation, the following:

(a) all of the Seller’s Contracts and business arrangements, including, without limitation, sales and purchase orders, and confidentiality, dealership, service, maintenance, vendor, customer and service agreements, all of which are listed on Schedule 1.1.1 (collectively, the “Assigned Contracts”);

(b) all of the Seller’s Intellectual Property;

(c) all of the Seller’s Licenses and Permits;

(d) all of the Seller’s Accounts Receivable;

(e) all of the Seller’s claims, deposits, prepayments, refunds, credits, causes of action, rights of recovery and setoff of any kind, including, without limitation, proceeds from insurance policies to the extent such proceeds relate to the Purchased Assets or the Assumed Liabilities and all rights of the Seller under or pursuant to all warranties, representations and guarantees made by Persons to the Seller with respect to the Business (other than those that are Excluded Assets or Excluded Liabilities);

(f) all of the Seller’s advertising, marketing, training and promotional materials and all other printed or written materials;

(g) all of the Seller’s lists, records and other information pertaining to suppliers and customers (including, without limitation, customer lists, customer mailing lists and customer sales files); lists, records and other information pertaining to accounts, referral sources; books, ledgers, files, documents, correspondence and business and accounting records of every kind (including, without limitation, all financial, business and marketing plans); and

(h) all goodwill of the Seller as a going concern and all other intangible property of the Seller.

Nothing in this Section 1.1.1 shall obligate the Buyer to assume any Liability, whether related to the Business, the Purchased Assets or otherwise, unless the Buyer expressly assumes such Liability pursuant to the terms and conditions of Section 1.2.1 of this Agreement.  The failure of the Seller to list any Purchased Asset on an appropriate disclosure schedule attached hereto (the “Disclosure Schedule”) shall not exclude such asset from the Purchased Assets.

1.1.2 Excluded Assets. Notwithstanding Section 1.1.1, the following assets, properties, rights and interests of the Seller (collectively, the “Excluded Assets”) are expressly excluded from the purchase and sale contemplated hereby and as such are not included in the Purchased Assets: (a) all Cash on Hand of the Seller as of the Closing Date; (b) the Seller’s rights under or pursuant to this Agreement; (c) all Real Property owned by the Seller or the Equity Holder; and (d) all other assets, properties, rights and interests of the Seller and the Equity Holder not relating to the Business or the Purchased Assets, including, without limitation, those set forth on Schedule 1.1.2.

1.2 Assumption and Exclusion of Liabilities.

1.2.1 Assumed Liabilities. As of the Closing Date, subject to the terms and conditions hereof, and as additional consideration for the Purchased Assets, the Buyer shall assume and pay, perform or otherwise discharge, in accordance with their respective terms and subject to their respective conditions, the Liabilities of the Seller under any Assigned Contracts relating to the Business and the Purchased Assets (but excluding any Liability arising prior to the Closing Date, arising as a result of events prior to the Closing Date or arising out of or related to any breach, act or omission by the Seller), but only to the extent the existence of such Liabilities or the particular facts and circumstances that give rise to such Liabilities do not or would not constitute a breach of any of the Seller’s representations and warranties hereunder or otherwise give rise to a claim for indemnification by the Buyer hereunder (collectively, the “Assumed Liabilities”).

1.2.2 Excluded Liabilities. Notwithstanding anything to the contrary in this Agreement, the Seller shall retain and shall be responsible for paying, performing and discharging when due, and the Buyer shall not assume or have any responsibility or liability for, any of the Seller’s Liabilities, whether or not related to the Business or the Purchased Assets, of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, and whether or not accrued, not specifically identified as Assumed Liabilities pursuant to Section 1.2.1 including, without limitation, the following Liabilities (collectively, the “Excluded Liabilities”):

(a) all Liabilities arising out of or related to the Excluded Assets;

(b) the Seller’s obligations under this Agreement;

(c) all Liabilities under any Assigned Contract, to the extent (A) arising in the first instance prior to the Closing Date, or (B) arising after the Closing Date but relating to a breach of an Assigned Contract by the Seller prior to the Closing Date;

(d) all Liabilities for accounts payable of the Seller, whether related to the Business or otherwise;

(e) all Liabilities for Taxes imposed with respect to the Business, the Purchased Assets or any income or gains derived with respect thereto for any Tax period, or portion thereof, ending on or before the Closing Date;

(f) all Liabilities related to any Indebtedness;

(g) all Liabilities related to the Seller’s non-compliance with any applicable Laws;

(h) all Liabilities arising out of or relating to any breach of warranty or similar claim with respect to the Business, to the extent such Liabilities relate to services provided by the Seller prior to the Closing Date;

(i) all Liabilities related to any pending or threatened litigation against the Seller, whether related to the Business or otherwise; and

(j) all other Liabilities of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, whether or not accrued, not defined as Assumed Liabilities pursuant to Section 1.2.1.

1.3 Purchase Price. In consideration of the sale by the Seller to the Buyer of the Purchased Assets and the representations, warranties and covenants made by the Seller to the Buyer, and subject to the satisfaction or waiver of all of the conditions contained herein, the Buyer shall deliver to Seller (a) at Closing, Five Million Six Hundred Five Thousand Dollars ($5,605,000) (the “Initial Purchase Price”) in cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Schedule 1.3; and (b) in accordance with the timing specified in Section 1.4.3, the Earn-out Payment (as defined in Section 1.4.1), if any.

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1.4 Earn-Out.

1.4.1 Payments.

(a) Base Earn-out.  The Buyer shall pay to the Seller an earn-out payment (the “Base Earn-out Payment”) equal to the product of (a) Actual EBITDA divided by Target EBITDA and (b) the Maximum Base Earn-Out, provided, that such Earn-Out shall in no event be greater than Four Million Forty-Five Thousand Dollars ($4,045,000).

(b) Incentive Earn-out.  If actual EBITDA exceeds Target EBITDA, then in accordance with the timing specified in Section 1.4.3, the Buyer shall pay to the Seller an earn-out payment equal to twenty percent (20%) of Actual EBITDA less Target EBITDA (the “Incentive Earn-out Payment” and, together with the Base Earn-Out, the “Earn-out Payment”).

1.4.2 Procedures Applicable to Determination of the Earn-out Payments.

(a) On or before the date which is thirty (30) days after the conclusion of the Measurement Period (the "Earn-out Calculation Delivery Date"), the Buyer shall prepare and deliver to the Seller a written statement (the "Earn-out Calculation Statement") setting forth in reasonable detail its calculation of the resulting Earn-out Payment (the "Earn-out Calculation").

(b) The Seller shall have five (5) days after receipt of the Earn-out Calculation Statement (the "Review Period") to review the Earn-out Calculation Statement and the Earn-out Calculation set forth therein. During the Review Period, the Seller and its accountants shall have the right to inspect the Buyer's books and records during normal business hours at the Buyer's offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of the Earn-out Payment. Prior to the expiration of the Review Period, the Seller may object to the Earn-out Calculation set forth in the Earn-out Calculation Statement by delivering a written notice of objection (the "Earn-out Calculation Objection Notice") to the Buyer. Any Earn-out Calculation Objection Notice shall specify the items in the applicable Earn-out Calculation disputed by the Seller and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If the Seller fails to deliver an Earn-out Calculation Objection Notice to the Buyer prior to the expiration of the Review Period, then the Earn-out Calculation set forth in the Earn-out Calculation Statement shall be final and binding on the parties hereto. If the Seller timely delivers an Earn-out Calculation Objection Notice, the Buyer and the Seller shall negotiate in good faith to resolve the disputed items and agree upon the resulting amount of the Total Premium and the Earn-out Payment. If the Buyer and the Seller are unable to reach agreement within thirty (30) days after such an Earn-out Calculation Objection Notice has been given, all unresolved disputed items shall be promptly referred to an impartial nationally recognized firm of independent certified public accountants, other than the Seller’s accountants or the Buyer’s accountants, appointed by mutual agreement of the Buyer and the Seller (the "Independent Accountant"). The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable Earn-out Calculation as promptly as practicable, but in no event greater than thirty (30) days after such submission to the Independent Accountant, and to resolve only those unresolved disputed items set forth in the Earn-out Calculation Objection Notice. If unresolved disputed items are submitted to the Independent Accountant, the Buyer and the Seller shall each furnish to the Independent Accountant such work papers, schedules and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by the Buyer and the Seller, and not by independent review. The resolution of the dispute and the calculation of Total Premium that is the subject of the applicable Earn-out Calculation Objection Notice by the Independent Accountant shall be final and binding on the parties hereto. The fees and expenses of the Independent Accountant shall be borne by the Seller and the Buyer in proportion to the amounts by which their respective calculations of Total Premium differ from Total Premium as finally determined by the Independent Accountant.

1.4.3 Timing of Payment of Earn-out Payments. Subject to Section 1.4.5, any Earn-out Payment that the Buyer is required to pay pursuant to Section 1.4.1 hereof shall be paid in full no later than five (5) business days following the date upon which the determination of the Earn-out Payment becomes final and binding upon the parties as provided in Section 1.4.2(b) (including any final resolution of any dispute raised by the Seller in the Earn-out Calculation Objection Notice). The Buyer shall pay to the Seller the Earn-out Payment, if any, in cash by wire transfer of immediately available funds to the bank account for the Seller set forth on Schedule 1.3.

1.4.4 Post-closing Operation of the Business. Subject to the terms of this Agreement, subsequent to the Closing, the Buyer shall have sole discretion with regard to all matters relating to the operation of the Business; provided, that the Buyer shall not, directly or indirectly, take any actions in bad faith that would have the purpose of avoiding or reducing any of the Earn-out Payments hereunder. Notwithstanding the foregoing, the Buyer has no obligation to operate the Business in order to achieve any Earn-out Payment or to maximize the amount of any Earn-out Payment.

1.4.5 Right of Set-off. The Buyer shall have the right to withhold and set off against any amount otherwise due to be paid pursuant to this Section 1.4 the amount of any Losses to which any Buyer Indemnified Party may be entitled.

1.4.6 No Security. The parties hereto understand and agree that (i) the contingent rights to receive the Earn-out Payment shall not be represented by any form of certificate or other instrument, are not transferable, except by operation of Laws relating to

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descent and distribution, divorce and community property, and do not constitute an equity or ownership interest in the Buyer, (ii) the Seller shall not have any rights as a security holder of the Buyer as a result of the Seller's contingent right to receive the Earn-out Payment hereunder, and (iii) no interest is payable with respect to the Earn-out Payment.

1.5 Third Party Consents. To the extent that the Seller’s rights under any Contract or Permit constituting a Purchased Asset, or any other Purchased Asset, may not be assigned to the Buyer without the consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and the Seller, at its expense, shall use its best efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair the Buyer’s rights under the Purchased Asset in question so that the Buyer would not in effect acquire the benefit of all such rights, the Seller, to the maximum extent permitted by law and the Purchased Asset, shall act after the Closing as the Buyer’s agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by Law and the Purchased Asset, with the Buyer in any other reasonable arrangement designed to provide such benefits to the Buyer. Notwithstanding any provision in this Section 1.5 to the contrary, the Buyer shall not be deemed to have waived its rights under Section 4.2.2 hereof unless and until the Buyer provides written waivers thereof.

1.6 Closing. The closing of the purchase and sale of the Purchased Assets (the “Closing”) shall take place on April 8, 2015 (the “Closing Date”) and shall be effective as of 12:01 a.m. Eastern Time on the Effective Date.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller and the Equity Holder, jointly and severally, hereby represent and warrant to the Buyer with respect to the matters specified in this Article 2 as follows:

2.1 Organization and Qualification. The Seller is a limited liability company, duly organized, validly existing and in good standing under the Laws of the State of Pennsylvania. The Seller does not have any subsidiaries. The Seller has the requisite limited liability company power and authority to conduct the Business as it is now being conducted and to perform all of its obligations under each Contract by which it is bound.

2.2 Authorization; Enforceability. The Seller has the requisite limited liability company power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated by this Agreement. This Agreement has been duly authorized by the Equity Holder and duly executed and delivered by the Seller, and this Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable in accordance with its terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

2.3 Organizational Documents. The Seller has delivered to the Buyer copies of the Seller’s Organizational Documents, and all such copies are complete and correct as of the date hereof. The books of account and other records of the Seller delivered to the Buyer have been maintained in accordance with sound business practice, and applicable Law and accounting policies. The Seller is not in default under or in violation of any provision of its Organizational Documents.

2.4 Capitalization.  The Equity Holder is the only record and beneficial holder of the Equity Interests of the Seller.  There are no voting trusts, proxies, or other agreements or understandings with respect to the voting Equity Interests of the Seller.

2.5 No Violation. Except as set forth on Schedule 2.5 and subject to the receipt of the Consents and to the filing of notices as contemplated by Section 2.6, neither the execution and delivery of this Agreement, nor the performance by the Seller of its obligations hereunder, or the consummation of the transactions contemplated hereby will (with or without the passage of time or the giving of notice) (a) violate, conflict with or constitute a default under the Organizational Documents of the Seller, (b) violate, conflict with or result in a breach of, constitute a default under, give rise to any right of termination, cancellation or acceleration under, or cause any loss of benefit under, any of the terms, conditions or provisions of any Assigned Contract or any Contract or Lease to which the Seller is a party or by which the Purchased Assets are bound, or give to others any rights (including rights of termination, foreclosure, cancellation or acceleration) in or with regard to the Seller or any of its assets, or result in, require or permit the creation or imposition of any Lien of any nature upon or with regard to the Seller or any of its assets, or (c) conflict with or violate in any material respect any Laws applicable to the Seller or by which any of its assets are bound or any of the Licenses and Permits held by the Seller.

2.6 Consents.

2.6.1 Third Party Consents. Neither the execution and delivery of this Agreement, nor the performance by the Seller of its obligations hereunder or the consummation of the transactions contemplated hereby will (with or without the passage of time or the giving of notice) require any Consent (collectively, the “Third Party Consents”) under any of the terms, conditions or provisions of any Assigned Contract or any Contract to which the Seller is a party or by which any Purchased Assets are bound.

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2.6.2 Governmental Consents. Except as set forth on Schedule 2.6.2, no material Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority (collectively, the “Governmental Consents”) is required to be made or obtained by the Seller in connection with the execution, delivery and performance by the Seller of this Agreement and the consummation of the transactions contemplated hereby, which, if not made or obtained, would result in a violation of any Law, License or Permit, or result in any material Liability to the Seller, or which would prohibit the consummation of the transactions contemplated hereby.

2.7 Taxes. Attached hereto as Schedule 2.7 are complete and correct copies of the Seller’s Tax Returns for the fiscal years ended December 31, 2012; December 31, 2013 and December 31, 2014. The Seller has filed, will timely file or will cause to be timely filed, or has timely filed for an extension of the time to file, all Tax Returns required by applicable Law to be filed by it prior to or as of the date hereof, and such Tax Returns are, or will be at the time of filing, true, correct and complete in all material respects. The Seller has paid and discharged or, where payment is not yet due, has established, or will establish or cause to be established, on or before the Closing Date, an adequate accrual for the payment of all Taxes due with respect to (a) any period ending prior to or on the Closing Date and (b) the portion through the Closing Date for any period that includes (but does not end on) the Closing Date. There are no Liens, claims or assessments pending against the Seller or its assets for any alleged deficiency in any Tax (other than for current Taxes not yet due and payable), and the Seller has not been notified of any proposed Tax claims, Liens or assessments against the Seller. The Seller is not, has not been, nor has been notified that it will be the subject of any examination by a Taxing Authority. The Seller has withheld from each payment made to any of its past or present employees, and any other Person, as appropriate, the amount of all Taxes and other deductions required to be withheld therefrom, and paid the same to the proper Taxing Authority within the time required by Law. No claim has ever been made by a Taxing Authority in a jurisdiction where the Seller does not file Tax Returns that the Seller is or may be subject to taxation by that jurisdiction. The Seller is not party to any Tax indemnity, allocation or sharing agreement.

2.8 Material Contracts. The Seller has delivered to the Buyer a complete and correct copy of each written Assigned Contract, together with all amendments, exhibits, attachments, waivers or other changes thereto, and written descriptions of each oral Contract, if any. Each Assigned Contract that is in any way material to the Business of the Seller (a “Material Contract”) is valid, binding, in full force and effect, and enforceable by the Seller against the parties thereto in accordance with its terms, except as such enforceability may be limited by the General Enforceability Exceptions, and is not subject to any claims, charges, setoffs or defenses. The Seller is not in breach or default under any Material Contract, nor has any event occurred which with the giving of notice or the passage of time (or both) would constitute a breach or default by the Seller thereunder. The Seller has not waived any material rights under any Material Contract or modified any material terms thereof. To the Seller’s Knowledge, no other party to any Material Contract is in breach or default in any respect thereunder, nor has any event occurred or is expected to occur (including, without limitation, the transactions contemplated hereby), which with the giving of notice or the passage of time (or both) would constitute a breach or default by such other party thereunder.

2.9 Real Property. No interest in any Real Property is included in the Purchased Assets.

2.10 Personal Property. The Seller has good title to, a valid leasehold interest in, or a valid license to use, all assets owned or used by the Seller, and all assets used in or necessary for the operation of the Business, free and clear of any Liens. All tangible assets owned, leased or licensed by the Seller are in the possession of, and under the control of, the Seller.

2.11 Intellectual Property. Schedule 2.11 sets forth a complete and correct list of all Intellectual Property owned by the Seller or related to, used in or necessary for the operation of the Business (the “Seller Intellectual Property”). Except as set forth on Schedule 2.11, (a) the Seller owns all right, title and interest in, or has a valid license to use, the Seller Intellectual Property in the Business, free and clear of all Liens; (b) the use of the Seller Intellectual Property in the conduct of the Business does not infringe upon, dilute or misappropriate (and in the past has not infringed upon, diluted or misappropriated) any Intellectual Property rights of any Person; (c) no claims or allegations of infringement or unauthorized use involving any Seller Intellectual Property are pending against a third party; (d) there are no pending claims or allegations of infringement or unauthorized use of any third party Intellectual Property or technology against the Seller or any Affiliate; and (e) no circumstances exist that would form the basis for any material claim of infringement, dilution, unauthorized use, or violation of any Seller Intellectual Property, or challenge the ownership, use, validity or enforceability of any Seller Intellectual Property.

2.12 Insurance Policies. The Seller has delivered, or made available to the Buyer, accurate and complete copies of all policies of insurance and pending applications for policies of insurance under which the Seller or the Business is or has been covered at any time during the last three (3) years. All policies of insurance which provide coverage to the Seller or the Business (a) are valid, outstanding and enforceable on the date hereof; (b) are issued by an insurer that is financially sound and reputable; (c) taken together, provide adequate insurance coverage for the Seller and operations of the Business for all risks to which the Seller and the Business are normally exposed; and (d) are sufficient for compliance with applicable Laws and the Contracts of the Seller. The Seller has not received any refusal of coverage, any notice that a defense will be afforded with reservation of rights, or any notice of cancellation or any other indication that any policy of insurance is no longer in full force or effect, or that the issuer of any policy of insurance is unwilling to perform its obligations thereunder. The Seller has complied with all of its obligations under each such insurance policy.

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2.13 Litigation. There are no suits, actions, proceedings, investigations, claims or orders (collectively, “Legal Proceedings”) pending or, to the Seller’s Knowledge, threatened against the Seller or any of the current or former representatives of the Seller in their respective capacity as representatives of the Seller, nor is the Seller, or any such representative, subject to any judgment, order or decree of any court, judicial authority or Governmental Authority (nor have any of them been subject to such a judgment, order or decree in the past five (5) years). Schedule 2.13 sets forth a complete and correct list and description of all Legal Proceedings made, filed or otherwise initiated in connection with the Seller that are pending or that have been resolved in the past two (2) years, and the resolution thereof. The Seller has adequate insurance with respect to all Legal Proceedings.

2.14 Compliance with Applicable Laws. The Seller has complied in all material respects with all Laws applicable to it or to the operation of the Business and no facts or circumstances exist which would reasonably be expected to cause the Seller to violate or fail to comply with any such Laws in the future. The Seller has not received any written notice from any court, judicial authority or Governmental Authority asserting a failure, or possible failure, to comply with any such applicable Laws, the subject of which notice has not been conclusively resolved as required thereby or otherwise to the satisfaction of the party sending such notice. The Seller is not under investigation with respect to violations of any such Laws.

2.15 Regulatory Compliance. Schedule 2.15 contains a complete and correct list of all Licenses and Permits issued to or maintained by the Seller as of the date hereof that are necessary to the conduct of the Business as the Business has been operated during the past twelve (12) months (collectively, the “Material Licenses and Permits”), along with the date of issuance and the current term thereof. All such Material Licenses and Permits are in full force and effect. The Seller is in compliance with the terms and conditions of the Material Licenses and Permits and has received no written notices that it is in violation of any of the terms or conditions of any Material Licenses and Permits or alleging the failure to maintain any Licenses and Permits. The Seller has not received written notice that any of the Material Licenses and Permits will not be renewed, there are no proceedings pending to revoke or withdraw any such Material Licenses and Permits and the Seller has no reason to believe that any of the Material Licenses and Permits will be revoked, withdrawn or will not be renewed. The facilities used in the Business are in compliance with all applicable building codes, ordinances and regulations, and the Seller has not received any notice asserting a failure, or possible failure, to comply with any such fire codes, ordinances or regulations.

2.16 Books and Records. The Seller has maintained its books and records in the Ordinary Course of Business, consistent with professional business standards and practices customary for the hospitality insurance industry. The Seller makes and keeps books, records and accounts which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets.

2.17 Brokers. No broker, finder or agent is entitled to any brokerage fees, finder’s fees or commissions in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller.

2.18 Customers. Schedule 2.18 sets forth a list of all customers of the Seller, showing the total sales by the Seller to each customer for the years ended 2014 and 2015. As of the Closing Date, no customer listed on Schedule 2.18 has terminated its relationship with the Seller or materially reduced or changed the pricing or other terms of its business with the Seller, and no customer listed on Schedule 2.18 has notified the Seller that it intends to terminate or materially reduce or change the pricing or other terms of its business with the Seller.

2.19 Foreign Person. The Seller is not a foreign person within the meaning of Section 1445 of the Code.

2.20 Full Disclosure. This Agreement, including all Schedules and Exhibits, delivered by or on behalf of the Seller hereunder are complete and correct in all material respects. No representation or warranty of the Seller contained in this Agreement and no written statement made by or on behalf of the Seller to the Buyer or any of its Affiliates pursuant to this Agreement contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. There is no fact known to the Seller which the Seller has not disclosed to the Buyer in writing which reasonably could be expected to materially affect the Business in an adverse manner.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Seller as follows:

3.1 Organization and Authority of the Buyer; Enforceability. The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. The Buyer has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Buyer and, assuming the due authorization, execution and delivery by the other parties hereto, will constitute, upon such execution and delivery in each case thereof, legal, valid and binding obligations of the Buyer, enforceable in accordance with their terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

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3.2 No Consents. No material Consent of, permit or exemption from, or declaration, filing or registration with, any Governmental Authority is required to be made or obtained by the Buyer in connection with the execution, delivery and performance of this Agreement by the Buyer.

3.3 No Violation. Neither the execution and delivery of this Agreement nor the performance by the Buyer of the transactions contemplated hereby will (a) violate or conflict with the Organizational Documents of the Buyer, or (b) conflict with or violate any Laws applicable to the Buyer or by which any of its properties is bound.

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ARTICLE 4

CLOSING

4.1 Time and Place.  The Closing shall occur simultaneously with the execution of this Agreement and shall be effective as of 12:01am Eastern Time on the Closing Date.

4.2 Deliveries by the Seller. At the Closing, the Seller shall deliver or cause to be delivered to the Buyer:

4.2.1 Good Standing Certificate. A certificate of good standing with respect to the Seller, issued by the applicable Secretary of State, as of a date not more than thirty (30) days prior to the Closing Date;

4.2.2 Consents. The Third Party Consents and Governmental Consents identified on Schedule 4.2.2;

4.2.3 Licenses and Permits. All Licenses and Permits identified on Schedule 2.15;

4.2.4 Assignment and Assumption Agreement. An assignment and assumption agreement in the form of Exhibit A hereto (the “Assignment and Assumption Agreement”) and duly executed by the Seller, effecting the assignment to and assumption by the Buyer of the Purchased Assets and the Assumed Liabilities;

4.2.5 Bill of Sale. A bill of sale in the form of Exhibit B hereto (the “Bill of Sale”) and duly executed by the Seller, transferring the tangible personal property included in the Purchased Assets to the Buyer; and

4.2.6 Intellectual Property Assignment.  An Intellectual Property Assignment in the form of Exhibit C hereto (the “Intellectual Property Assignment”) and duly executed by the Seller, effecting the assignment of all of the Seller’s Intellectual Property to the Buyer.

4.2.7 Other Documents.  Such other documents and instruments as the Buyer may reasonably request to consummate the transactions contemplated hereby.

4.3 Deliveries by the Buyer. The Buyer will deliver or cause to be delivered to the Seller:

4.3.1 The Purchase Price. Payment of the Purchase Price as provided in Section 1.3;

4.3.2 Good Standing Certificate. A certificate of good standing with respect to the Buyer, issued by the Secretary of State of Delaware, as of a date not more than thirty (30) days prior to the Closing Date;

4.3.3 Assignment and Assumption Agreement. The Assignment and Assumption Agreement duly executed by the Buyer;

4.3.4 Bill of Sale. The Bill of Sale duly executed by the Buyer;

4.3.5 Other Documents. Such other documents and instruments as the Seller shall reasonably request to consummate the transactions contemplated hereby.

ARTICLE 5

POST CLOSING COVENANTS

5.1 Tax Covenants.

5.1.1 The Parties understand that the Buyer shall be performing a valuation of the Purchased Assets for the purpose, among other things, of valuing the covenants made by the Seller (“Purchase Price Allocation”). The Buyer and Seller each agree that such valuation shall be dispositive regarding the allocation of the respective Purchase Price. The Seller and the Buyer shall cooperate to prepare IRS Form 8594 and any required exhibits thereto. The Buyer and the Seller shall report the federal, state, local and other income and other tax consequences of the purchase and sale contemplated hereby in a manner consistent with the Purchase Price Allocation and shall not take any position inconsistent therewith.

5.1.2 The Seller and the Buyer hereby waive compliance with any “bulk sales” Laws (including any requirement to withhold any amount from payment of the Purchase Price) applicable to the sale to the Buyer of the Purchased Assets by the Seller.

5.2 Access to Books and Records. From and after the Closing, each Party shall provide the other Party and its representatives with reasonable access (for the purpose of examining and copying), during normal business hours, to the books and records relating to the Business with respect to periods, portions thereof or occurrences prior to the Closing Date in connection with legitimate business purposes of the requesting Party (including in connection with the filing of any Tax Returns, the making of any Tax elections, and the defense of any Tax claim audit or proceeding), expressed to the other Party in writing.

5.3 Non-Competition; Non-Solicitation; Confidentiality.

5.3.1 Non-Disclosure of Confidential Information. Neither the Equity Holder nor the Seller shall, directly or indirectly, disclose or use at any time any Confidential Information, except to the extent that such disclosure or use is directly related to and required by the performance of the Seller’s duties to the Buyer or as required by Law or as otherwise provided hereunder. Each of the

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Seller and the Equity Holder further agrees to take commercially reasonable steps, to the extent within their control, to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event that the Equity Holder or the Seller is required by Law to disclose any Confidential Information, such Party shall promptly notify the Buyer in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and shall cooperate with the Buyer’s reasonable requests to preserve the confidentiality of such Confidential Information consistent with applicable Law. For purposes of this Agreement, “Confidential Information” means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as “confidential”), in any form or medium, that relates to the Business or its distributors, customers, independent contractors or other business relations. Confidential Information includes the following as they relate to the Business and, in each case, to the extent the Business obtains a commercial benefit from the secret nature of such information: internal business information (including information relating to strategic plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods and potential acquisition candidates); identities of, individual requirements of, and specific contractual arrangements with, the Business’s distributors, customers, independent contractors or other business relations and their confidential information; trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; and inventions, innovations, improvements, developments, methods, designs, analyses, drawings, and reports. Notwithstanding the foregoing, Confidential Information does not include such information which: (a) at the time of disclosure is publicly available or thereafter becomes publicly available through no act or omission of the Equity Holder or the Seller; (b) is thereafter disclosed or furnished to the Equity Holder or the Seller by a third party who is not known by such party to have acquired the information under an obligation of confidentiality; or (c) is disclosed by the Equity Holder or the Seller (subject to compliance with the applicable provisions of this Section 5.3.1) under compulsion of applicable Law.

5.3.2 Non-Competition. Each of the Equity Holder and the Seller is familiar with the trade secrets related to the Business and with other Confidential Information concerning the Business, including all (a) inventions, technology and research and development related to the Business, (b) customers and clients and customer and client lists related to the Business, (c) products (including products under development) and services related  to  the  Business  and  related  costs  and  pricing  structures  and  manufacturing  techniques, (d) accounting and business methods and practices related to the Business and (e) similar and related Confidential Information and trade secrets related to the Business. Each of the Equity Holder and the Seller acknowledges and agrees that the Business would be irreparably damaged if such Party were to directly or indirectly provide services to any Person competing with the Business or engaging in a similar business and that such direct or indirect competition by any such Party would result in a significant loss of goodwill by the Business. In further consideration for the Buyer’s payment of the Purchase Price under this Agreement (in respect of which payment each of the Equity Holder and the Seller expressly acknowledges that he or it derives a substantial and direct benefit), and in order to protect the value of the Business acquired by the Buyer hereunder (including the goodwill inherent in the Business as of the date hereof), each of the Equity Holder and the Seller hereby agrees that during the period commencing on the Closing Date and ending on the second (2nd) anniversary of the Closing Date (the “Non-Competition Period”), such Party shall not acquire or hold any economic or financial interest in, act as a partner, member, stockholder, or representative of, render any services to, or otherwise operate or hold an interest in any Person (other than the Seller) having any location in any county in which the Business or the Buyer conducts operations, which entity, enterprise or other Person primarily engages in, directly or indirectly, any business that competes with the Business or operates in the hospitality insurance industry; provided, however, that nothing contained herein shall be construed to prohibit any such Party from purchasing up to an aggregate of two percent (2%) of any class of the outstanding voting securities of any other Person whose securities are listed on a national securities exchange (but only if such investment is held on a purely passive basis).

5.3.3 Non-Solicitation; Non-Disparagement. During the period commencing on the Closing Date and ending on the fifth (5^th) anniversary of the Closing Date (the “Non-Solicitation Period”), neither the Equity Holder nor the Seller shall, directly or indirectly, either individually or acting in concert with another Person or Persons, (a) request, induce or attempt to influence any distributor, supplier or customer of goods or services of the Business to curtail, cancel or refrain from maintaining or increasing the amount or type of business such distributor, supplier or customer of goods or services is currently transacting, or may be transacting during the Non-Solicitation Period, with the Business or modify its pricing or other terms of sale with the Business; or (b) make any negative, derogatory or disparaging statements or communications regarding the Buyer, the Business, or the Affiliates or representatives of the Buyer.

5.3.4 Severability. Notwithstanding anything to the contrary in this Agreement, if at any time, in any judicial or arbitration proceeding, any of the restrictions stated in this Section 5.3 are found by a final order of a court of competent jurisdiction or arbitrator to be unreasonable or otherwise unenforceable under circumstances then existing, the Parties each agree that the period, scope or geographical area, as the case may be, shall be reduced to the extent necessary to enable the court to enforce the restrictions to the extent such provisions are allowable under applicable Law, giving effect to the agreement and intent of the Parties that the restrictions contained herein shall be effective to the fullest extent permissible. In the event of a breach or violation by any Party of any of the provisions of this Section 5.3, the Non-Competition Period or Non-Solicitation Period, as the case may be, will be tolled for so long as such Party was in violation of such provision. Each of the Equity Holder and the Seller agrees that the restrictions contained in this Agreement are reasonable in all respects and necessary to protect the Buyer’s interest in, and the value of, the Business.

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5.4 Transition Items.

5.4.1 Transition Collections. The Seller shall promptly remit to the Buyer any proceeds received from any Accounts Receivable that constitute Purchased Assets, regardless of when such proceeds are received or whether such proceeds were obtained as a result of the collections efforts of the Seller.  At the reasonable request of the Buyer, the Seller shall make best efforts to assist in the collection of any and all outstanding Accounts Receivable. Following the Closing Date, Buyer and Seller shall review the Purchased Assets and Assumed Liabilities and work together to determine what portions of each are attributable to activity occurring prior to the Effective Date, in such case, to be retained by Seller, or are attributable to activity occurring between the Effective Date and the Closing Date, in such case to be allocated to Buyer.

5.4.2 Transition Expenses.  The Seller shall promptly reimburse the Buyer (within ten (10) business days after the Buyer provides the Seller with a bill for such reimbursement, with reasonable supporting detail) for any payments made by the Buyer with respect to pre-Closing vendor payments, or any other liabilities of the Business related to any period prior to the Closing Date and which are not paid by the Seller within ten (10) business days after receipt by the Seller of written notice of the Buyer’s intent to make any such payment.

5.4.3 Use of Name. The Seller hereby acknowledges and agrees that upon the consummation of the transactions contemplated hereby and for a period of one (1) year following the Closing Date, the Buyer shall have the sole right to the use of any service marks, trademarks, trade names, identifying symbols, logos, emblems, signs or insignia related to the Business (including, without limitation, the name “Hospitality Supportive Systems, LLC”) or containing or comprising any of the foregoing, including any name or mark confusingly similar thereto (collectively, the “Business Marks”). The Seller shall not use any of the Business Marks, except in connection with the filing of Tax returns or the winding up of the Seller’s business affairs related to the Business.

5.5 Further Assurances. From and after the Closing, the Seller shall use reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable in compliance with applicable Laws to consummate and make effective, as soon as reasonably practicable, the transactions contemplated hereby.

ARTICLE 6

INDEMNIFICATION

6.1 Survival of the Seller’s and the Equity Holder’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Seller and the Equity Holder contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of two (2) years after the Closing Date; provided, however, that the representations and warranties in Section 2.1 (Organization and Qualification), Section 2.2 (Authorization; Enforceability), Section 2.7 (Taxes), and the representations and warranties concerning title to the Purchased Assets (collectively, the “Fundamental and Statutory Representations”) shall survive until the expiration of the applicable statute of limitations. All Post-Closing Covenants of the Seller and the Equity Holder will survive the Closing in accordance with their terms. If the Buyer provides notice of a claim in accordance with the terms of this Agreement prior to the end of the period of survival set forth in this Section 6.1, then the Liability for such claim will continue until the claim is fully resolved.

6.2 Survival of the Buyer’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Buyer contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of two (2) years after the Closing Date; provided, however, that the representations and warranties in Section 3.1 (Organization and Authority of the Buyer; Enforceability) shall survive until the expiration of the applicable statute of limitations. All Post-Closing Covenants of the Buyer will survive the Closing in accordance with their terms. If the Seller provides notice of a claim in accordance with the terms of this Agreement prior to the end of the applicable period of survival set forth in this Section 6.2, then the Liability for such claim will continue until the claim is fully resolved.

6.3 Indemnification by the Seller and the Equity Holder. Subject to the terms, conditions and limitations set forth in this Article 6, the Seller and the Equity Holder shall jointly and severally indemnify, defend and hold harmless the Buyer and its representatives, successors and permitted assigns (each, a “Buyer Indemnified Party”), from and against, and shall promptly pay or reimburse each Buyer Indemnified Party for, any and all Losses sustained or incurred (including any Losses sustained or incurred after the end of the applicable survival period, provided that a claim is made prior to the end of the applicable survival period in accordance with the terms of this Agreement) by any Buyer Indemnified Party resulting from: (a) any breach of a representation or warranty made by the Seller or the Equity Holder in this Agreement; (b) any breach of any Post-Closing Covenant made by the Seller or the Equity Holder in this Agreement; (c) any claim or assertion for obligations in respect of Indebtedness or broker’s or seller’s fees or expenses arising out of the transactions contemplated by this Agreement by a Person claiming to have been engaged by the Seller or any of its Affiliates; (d) any obligation of the Seller for any Taxes that arose, in the first instance, prior to the Closing Date; (e) the failure of the Seller to pay, discharge and perform any of the Excluded Liabilities; (f) the ownership or operation of the Business or the Purchased Assets prior to the Closing Date; or (g) any obligation of the Seller or the Equity Holder for any fees or penalties with respect to the collection of administration fees.

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6.4 Indemnification by the Buyer. Subject to the terms, conditions and limitations set forth in this Article 6, from and after the Closing, the Buyer shall indemnify, defend and hold harmless the Seller and its representatives, successors and permitted assigns (each, a “Seller Indemnified Party”) from and against any and all Losses sustained or incurred by any Seller Indemnified Party resulting from: (a) any breach of a representation or warranty made by the Buyer in this Agreement; (b) any breach of a Post-Closing Covenant made by the Buyer in this Agreement; (c) the failure of the Buyer to pay, discharge and perform any of the Assumed Liabilities; or (d) the ownership or operation of the Business or the Purchased Assets on or after the Closing Date.

6.5 Indemnification Procedure for Third Party Claims.

6.5.1 In the event that subsequent to the Closing, any Person that is or may be entitled to indemnification under this Agreement (an “Indemnified Party”) receives notice of the assertion of any claim, issuance of any order or the commencement of any action or proceeding by any Person who is not a Party or an Affiliate of a Party, including, without limitation, any domestic or foreign court or Governmental Authority (a “Third Party Claim”), against such Indemnified Party and for which a Party is or may be required to provide indemnification under this Agreement (an “Indemnifying Party”), then such Indemnified Party shall give written notice thereof, together with a statement of any available information regarding such Third Party Claim to the applicable Indemnifying Party within sixty (60) days after learning of such Third Party Claim; provided, however, that failure to give such written notice within any particular time period shall not adversely affect the Indemnified Party’s right to indemnification except, and to the extent that, the Indemnifying Party can show that the failure to give such notification on a timely basis adversely affected the Indemnifying Party’s ability to defend such Third Party Claim. The Indemnifying Party shall have the right upon written notice to the Indemnified Party (the “Defense Notice”), within thirty (30) days after receipt from the Indemnified Party of notice of such Third Party Claim, to conduct, at its expense, the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party. Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter into any settlement of any Third Party Claim or cease to defend against such Third Party Claim, if pursuant to or as a result of such settlement or cessation, (a) injunctive or other equitable relief would be imposed against the Indemnified Party, or (b) each claimant or plaintiff in such Third Party Claim has not given to the Indemnified Party an unconditional release from all Liability with respect to such Third Party Claim.

6.5.2 Notwithstanding anything contained in Section 6.5.1 to the contrary, the Indemnifying Party shall not be entitled to control, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of any Third Party Claim if any of the following conditions are not satisfied:

(a) the Indemnifying Party shall acknowledge in writing that it shall be fully responsible for all Losses relating to such proceeding;

(b) the Indemnifying Party must diligently defend such proceeding;

(c) the Indemnifying Party must furnish the Indemnified Party with evidence that the financial resources of the Indemnifying Party (or the funds available in the Escrow Account with respect to claims against the Escrow Account), in the Indemnified Party’s reasonable judgment, are and will be sufficient (when considering Losses in respect of all other outstanding claims) to satisfy any Losses relating to such proceeding;

(d) such proceeding shall not involve criminal actions or allegations of criminal conduct by the Indemnifying Party, and shall not involve claims for specific performance or other equitable relief; and

(e) there does not exist, in the Indemnified Party’s good faith judgment, based on the advice of outside legal counsel, a conflict of interest which, under applicable principles of legal ethics, could reasonably be expected to prohibit a single legal counsel from representing both the Indemnified Party and the Indemnifying Party in such proceeding.

6.6 Tax Treatment of Indemnification. All indemnification payments made under this Agreement shall be treated by all Parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 7

DEFINITIONS

Definitions. As used in this Agreement,

“Accounts Receivable” of any Person means (a) all trade accounts receivable and other rights to payment from customers of such Person and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped, products sold or services rendered to customers of such Person, (b) all other accounts or notes receivable of such Person and the full benefit of all security for such accounts or notes, and (c) any claim, remedy or other right related to any of the foregoing.

“Actual EBITDA” shall mean EBITDA for the Measurement Period.

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“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by, or under direct or indirect common Control with, such Person. For purposes of this definition, a Person shall be deemed to Control another Person if such Person owns or Controls, directly or indirectly, more than twenty-five percent (25%) of the voting Equity Interests of the other Person. “Control,” “Controlled” or “Controlling” means the ability of a Person (collectively or with its Affiliates) directly or indirectly to direct the use of, disposition of and access to the property of another Person.

“Cash on Hand” means all cash and cash equivalents, calculated as of 12:01 a.m., Eastern Time on the date of calculation, determined in accordance with GAAP.

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

“Consent” means any approval, consent, ratification, waiver, or other authorization.

“Contract” means any written or oral agreement, note, mortgage, indenture, lease, deed of trust, license, plan, instrument or other contract or legally binding arrangement or commitment.

“Equity Interests” means (a) any partnership interests, (b) any membership interests or units, (c) any shares of capital stock, (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, (e) any subscriptions, calls, warrants, options, or commitments of any kind or character relating to, or entitling any Person or entity to purchase or otherwise acquire membership interests or units, capital stock, or any other equity securities, (f) any securities convertible into or exercisable or exchangeable for partnership interests, membership interests or units, capital stock, or any other equity securities, or (g) any other interest classified as an equity security of a Person.

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

“General Enforceability Exceptions” means those exceptions to enforceability due to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally, and general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity).

“Governmental Authority” means the United States or any state, provincial, local or foreign government, or any subdivision, agency or authority of any thereof having competent jurisdiction over any of the Seller, the Buyer or the transactions contemplated by this Agreement, as applicable.

“Indebtedness” means, with respect to any Person, all Liabilities in respect of: (a) borrowed money; (b) indebtedness evidenced by bonds, notes, debentures or similar instruments; (c) capitalized lease obligations; (d) operating lease obligations related to any pieces of material equipment used in the Business; (e) the deferred purchase price of assets, services or securities (other than ordinary trade accounts payable); (f) conditional sale or other title retention agreements; (g) the factoring or discounting of accounts receivable; (h) swap or hedging agreements or arrangements; (i) reimbursement obligations, whether contingent or matured, with respect to letters of credit, bankers’ acceptances, bank overdrafts, surety bonds, other financial guarantees and interest rate protection agreements (without duplication of other indebtedness supported or guaranteed thereby); and (j) interest, premium, penalties and other amounts owing in respect of the items described in the foregoing clauses (a) through (i) after giving effect to the Closing; (k) all Indebtedness of the types referred to in clauses (a) through (j) guaranteed in any manner by such Person, whether or not any of the foregoing would appear on a consolidated balance sheet prepared in accordance with GAAP; (l) any unfunded pension liabilities; and (m) any so-called “change of control” payments.

“Intellectual Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof; (b) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate names, Internet domain names, and rights in telephone numbers, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith; (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith; (d) all mask works and all applications, registrations, and renewals in connection therewith; (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals); (f) all computer software (including source code, executable code, data, databases, and related documentation); (g) all advertising and promotional materials, (h) all other proprietary rights; and (i) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).

“Law” means each provision of any currently implemented federal, state, local or foreign law, statute, ordinance, order, code, rule or regulation, promulgated or issued by any Governmental Authority.

“Lease” means any lease, sublease or any other material agreement pertaining to any Real Property, together with all amendments, extensions, renewals, modifications, alterations, guaranties and other changes thereto.

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“Liability” means any liability or obligation of whatever kind or nature (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due), including, without limitation, any liability for Taxes.

“Licenses and Permits” means any licenses, permits, certificates, certifications, privileges, immunities, notifications, exemptions, classifications, registrations, easements, franchises, approvals, authorizations, orders and other similar rights, or any waivers of the foregoing, issued by any Governmental Authority, and all pending applications therefor or renewals thereof.

“Lien” means any mortgage, pledge, hypothecation, hypothec, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting trust agreement, proxy, interest, equity, option, lien, preemptive right, right of first offer or refusal, charge or other restrictions or limitations of any nature whatsoever, other than restrictions on the offer and sale of securities under federal and state securities Laws.

“Loss” or “Losses” means, with respect to any Person, all Liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, Taxes, fines, penalties, damages (including punitive, special and consequential damages), lost profits, diminution in value (based on a multiple of earnings or otherwise), costs and expenses (including reasonable and documented attorneys’ fees) sustained or incurred by such Person.

“Maximum Base Earn-out” shall mean $4,045,000.

“Material Adverse Effect” or “Material Adverse Change” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, is materially adverse to the business, financial condition, results of operations or prospects (including the achievement or the ability to achieve forecasts of revenue or earnings) of the Seller. For the avoidance of doubt, by way of illustration and not limitation, a “Material Adverse Effect” or “Material Adverse Change” shall include any matter or matters that, alone or in the aggregate, is or are likely to, or could reasonably be expected to, result in Losses to the Seller in excess of ten percent (10%) of the Purchase Price, or that a reasonable investor would consider as significantly and adversely affecting its investment decision with respect to the transactions contemplated herein.

“Measurement Period” shall mean the twelve (12) month period beginning on the Closing Date and ending on the one-year anniversary of the Closing Date.

“Ordinary Course of Business” means, in respect of any Person, the ordinary course of such Person’s business, as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in this Agreement or any Other Agreement.

“Organizational Documents” means (a) with respect to a corporation, the certificate or articles of incorporation and bylaws; (b) with respect to a limited liability company, the articles of organization or certificate of formation and operating agreement; (c) with respect to any other entity, any charter or similar document adopted or filed in connection with the creation, formation or organization of such entity and any internal governing documents; and (d) any amendment to any of the foregoing.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or government (whether federal, state, county, city or otherwise, including, without limitation, any instrumentality, division, agency or department thereof).

“Post-Closing Covenant” means any covenant, promise, commitment or other obligation (or any portion thereof) made or undertaken by any Party, in this Agreement or any Other Agreement, to the extent performance or fulfillment thereof is required by its terms to be accomplished after the Closing.

“Real Property” means all parcels and tracts of land, together with all buildings, structures, fixtures and improvements located thereon (including those under construction), and all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of such land, including all easements appurtenant to and for the benefit of such land, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.

“Seller’s Knowledge” or “Knowledge of the Seller” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known to the Seller or in the absence of such knowledge the actual knowledge that the Seller would have had if it had undertaken a reasonable inquiry of the fact, matter or circumstance in question.

“Target EBITDA” shall mean $2,100,000.

“Tax” or “Taxes” means (a) any U.S. federal, state, local, or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value-added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being a member of a consolidated, combined, unitary or aggregate group for

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any Tax period, and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) as a result of being a transferee or successor to any person or as a result of any express or implied obligation to indemnify any other person or payable pursuant to any tax sharing agreement or any other contract relating to the sharing or payment of any such Tax.

“Tax Returns” means any return, declaration, report, schedule, notice, form, claim for refund, or information return or statement (including any attachment thereto and any amendment thereof) filed with or submitted to, or required to be filed with or submitted to, any Taxing Authority.

“Taxing Authority” means any Governmental Authority, domestic or foreign, having jurisdiction over the assessment, determination, collection, or other imposition of any Taxes.

“Total Premium” means all premiums earned in connection with the Purchased Assets during the Measurement Period.

ARTICLE 8

MISCELLANEOUS

8.1 Notices, Consents, etc.   Any notices, consents or other communications required to be sent or given hereunder by any of the Parties shall in every case be in writing and shall be deemed properly served if and when (a) delivered by hand, (b) transmitted by facsimile, e-mail or other means of electronic transmission, (c) delivered by Federal Express or other express overnight delivery service, or (d) sent by registered or certified mail, return receipt requested, to the Parties at the addresses as set forth below or at such other addresses as may be furnished in writing:

If to the Seller or the Equity Holder:

Hospitality Supportive Systems, LLC

940 West Sproul Road, #103

Springfield, Pennsylvania 19064

Attention: Edward Snow

E-mail: edwards@hss-ins.net

If to the Buyer:

TriGen Insurance Solutions, Inc.

401 East Las Olas Boulevard, Suite 1650

Fort Lauderdale, Florida 33301

Attention: Christopher A. Pesch

E-mail: cpesch@patnat.com

Date of service of such notice shall be (x) the date such notice is delivered by hand, facsimile, e-mail or other form of electronic transmission, (y) one (1) business day following the delivery by express overnight delivery service, or (z) three (3) business days after the date of mailing if sent by certified or registered mail.

8.2 Severability. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of any other provision. Upon such determination that any term or other provision is unenforceable or invalid, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a legally acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

8.3 Successors; Assignment. This Agreement will be binding upon, and inure to the benefit of, the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by the Seller without the prior written consent of the Buyer or by the Buyer without the prior written consent of the Seller; provided, however, that the Buyer may assign this Agreement in whole or in part to any of its Affiliates or to any Person which becomes a successor in interest (by purchase of assets or stock, or by merger or otherwise) to the Buyer, and the Buyer may assign its rights under this Agreement to its financing sources.

8.4 Counterparts; Facsimile Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of e-mail, facsimile or other means of electronic transmission, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

8.5 Expenses. Except as provided in Section 5.1.1, each of the Seller and the Buyer shall bear and pay for all of its own costs, fees and expenses (including legal, accounting, investment banking, broker’s, finder’s and other professional or advisory fees

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and expenses) incurred or to be incurred by it, in each case, in negotiating and preparing this Agreement and in closing and carrying out the transactions contemplated hereby and thereby.

8.6 Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than the State of Delaware.

8.7 Entire Agreement. This Agreement, the Recitals, the Schedules and the Exhibits attached hereto set forth the entire understanding of the Parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements and representations and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof. This Agreement may be modified only by subsequent instruments signed by the Parties hereto.

8.8 Third Parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any Person, other than the Parties to this Agreement, the Buyer Indemnified Parties or the Seller Indemnified Parties and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

8.9 Disclosure Generally. All Schedules attached hereto are incorporated herein and expressly made a part of this Agreement as though completely set forth herein. All references to this Agreement herein or in any of the Schedules shall be deemed to refer to this entire Agreement, including all Schedules. Information furnished in any particular Schedule shall not be deemed to be included in all other Schedules in which the information is required to be included unless specifically designated with a cross-reference.

8.10 Interpretive Matters. Unless the context otherwise requires, (a) all references to Articles, Sections, Schedules or Exhibits shall mean and refer to Articles, Sections, Schedules or Exhibits in this Agreement; (b) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP; (c) words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and neuter; (d) the term “including” shall mean “including, without limitation,” (i.e., by way of example and not by way of limitation); (e) all references to statutes and related regulations shall include all amendments of the same and any successor or replacement statutes and regulations; (f) references to “hereof”, “herein”, “hereby” and similar terms shall refer to this entire Agreement (including the Schedules and Exhibits hereto); (g) references to any Person shall be deemed to mean and include the successors and permitted assigns of such Person (or, in the case of a Governmental Authority, Persons succeeding to the relevant functions of such Person); and (h) whenever this Agreement refers to a number of days, such number shall refer to calendar days, unless such reference is specifically to “business days.” The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) that the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of such representation, warranty or covenant. The section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation of any of the provisions of this Agreement. Each of the Parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted it is of no application and is hereby expressly waived by the Parties hereto.

8.11 Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be settled by arbitration in Fort Lauderdale, Florida before three (3) arbitrators. The arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

8.12 Waiver of Jury Trial. To the extent not prohibited by applicable Law that cannot be waived, each Party hereby irrevocably waives, and covenants that it will not assert any right to trial by jury in any forum in respect of any issue, claim, demand, action or cause of action arising in whole or in part under, related to, based on or in connection with this Agreement or the subject matter hereof, whether now existing or hereafter arising and whether sounding in tort or contract or otherwise. Any Party hereto may file an original counterpart or a copy of this Section 8.12 with any court as written evidence of the consent of each such Party to the waiver of its right to trial by jury.

[Signature page follows]

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IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement on the date first written above.

BUYER:
TriGen Insurance Solutions, Inc.
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Vice-President
SELLER:
Hospitality Supportive Systems, LLC
By:	/s/ Edward Snow
Name:	Edward Snow
Title:	Manager
EQUITY HOLDER:
/s/ Edward Snow
Edward Snow

*  All Schedules and exhibits to this Exhibit 2.2 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The schedules include a list of assigned contracts, wiring instructions, licenses, and customer lists. The exhibits include the assignment and assumption agreement and the bill of sale. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-2.5

Exhibit 2.5

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”) effective as of April 1, 2015 (“Effective Date”), by and among TriGen Insurance Solutions, Inc., a Delaware corporation (the “Buyer”), Selective Risk Management LLC, a Pennsylvania limited liability company (the “Seller”) Edward Snow and Charles O’Donnell, each an individual and the sole shareholders of the Seller (the “Equity Holders”). Each of the foregoing parties may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used and not otherwise defined herein shall have the meanings set forth in Article 7 below.

RECITALS

WHEREAS, the Equity Holders owns all of the Equity Interests of the Seller and the Seller is engaged in the business of providing property and liability insurance programs to restaurants, bars and taverns (the “Business”); and

WHEREAS, the Seller wishes to sell to the Buyer and the Buyer wishes to purchase from the Seller, the rights and obligations of the Seller to the Purchased Assets (as defined herein) subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF THE PURCHASED ASSETS

1.1 Purchased Assets and Excluded Assets.

1.1.1 Purchased Assets. On the terms and subject to the conditions hereof and in consideration of the Purchase Price to be paid to the Seller by the Buyer, the Buyer hereby purchases and acquires from the Seller, and the Seller hereby sells, conveys, assigns, transfers and delivers to the Buyer, all of the Seller’s right, title and interest in and to all assets, properties, rights and interests, of any kind and description pertaining to the Business (whether personal, tangible or intangible, or fixed, contingent or otherwise), wherever located and by whomever possessed, owned, licensed or leased by the Seller, other than the Excluded Assets (collectively, the “Purchased Assets”), free and clear of all Liens, including, without limitation, the following:

(a) all of the Seller’s Contracts and business arrangements, including, without limitation, sales and purchase orders, and confidentiality, dealership, service, maintenance, vendor, customer and service agreements, all of which are listed on Schedule 1.1.1 (collectively, the “Assigned Contracts”);

(b) all of the Seller’s Intellectual Property;

(c) all of the Seller’s Licenses and Permits;

(d) all of the Seller’s Accounts Receivable;

(e) all of the Seller’s claims, deposits, prepayments, refunds, credits, causes of action, rights of recovery and setoff of any kind, including, without limitation, proceeds from insurance policies to the extent such proceeds relate to the Purchased Assets or the Assumed Liabilities and all rights of the Seller under or pursuant to all warranties, representations and guarantees made by Persons to the Seller with respect to the Business (other than those that are Excluded Assets or Excluded Liabilities);

(f) all of the Seller’s advertising, marketing, training and promotional materials and all other printed or written materials;

(g) all of the Seller’s lists, records and other information pertaining to suppliers and customers (including, without limitation, customer lists, customer mailing lists and customer sales files); lists, records and other information pertaining to accounts, referral sources; books, ledgers, files, documents, correspondence and business and accounting records of every kind (including, without limitation, all financial, business and marketing plans); and

(h) all goodwill of the Seller as a going concern and all other intangible property of the Seller.

Nothing in this Section 1.1.1 shall obligate the Buyer to assume any Liability, whether related to the Business, the Purchased Assets or otherwise, unless the Buyer expressly assumes such Liability pursuant to the terms and conditions of Section 1.2.1 of this

Agreement.  The failure of the Seller to list any Purchased Asset on an appropriate disclosure schedule attached hereto (the “Disclosure Schedule”) shall not exclude such asset from the Purchased Assets.

1.1.2 Excluded Assets. Notwithstanding Section 1.1.1, the following assets, properties, rights and interests of the Seller (collectively, the “Excluded Assets”) are expressly excluded from the purchase and sale contemplated hereby and as such are not included in the Purchased Assets: (a) all Cash on Hand of the Seller as of the Closing Date; (b) the Seller’s rights under or pursuant to this Agreement; (c) all Real Property owned by the Seller or the Equity Holders; and (d) all other assets, properties, rights and interests of the Seller and the Equity Holders not relating to the Business or the Purchased Assets, including, without limitation, those set forth on Schedule 1.1.2.

1.2 Assumption and Exclusion of Liabilities.

1.2.1 Assumed Liabilities. As of the Closing Date, subject to the terms and conditions hereof, and as additional consideration for the Purchased Assets, the Buyer shall assume and pay, perform or otherwise discharge, in accordance with their respective terms and subject to their respective conditions, the Liabilities of the Seller under any Assigned Contracts relating to the Business and the Purchased Assets (but excluding any Liability arising prior to the Closing Date, arising as a result of events prior to the Closing Date or arising out of or related to any breach, act or omission by the Seller), but only to the extent the existence of such Liabilities or the particular facts and circumstances that give rise to such Liabilities do not or would not constitute a breach of any of the Seller’s representations and warranties hereunder or otherwise give rise to a claim for indemnification by the Buyer hereunder (collectively, the “Assumed Liabilities”).

1.2.2 Excluded Liabilities. Notwithstanding anything to the contrary in this Agreement, the Seller shall retain and shall be responsible for paying, performing and discharging when due, and the Buyer shall not assume or have any responsibility or liability for, any of the Seller’s Liabilities, whether or not related to the Business or the Purchased Assets, of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, and whether or not accrued, not specifically identified as Assumed Liabilities pursuant to Section 1.2.1 including, without limitation, the following Liabilities (collectively, the “Excluded Liabilities”):

(a) all Liabilities arising out of or related to the Excluded Assets;

(b) the Seller’s obligations under this Agreement;

(c) all Liabilities under any Assigned Contract, to the extent (A) arising in the first instance prior to the Closing Date, or (B) arising after the Closing Date but relating to a breach of an Assigned Contract by the Seller prior to the Closing Date;

(d) all Liabilities for accounts payable of the Seller, whether related to the Business or otherwise;

(e) all Liabilities for Taxes imposed with respect to the Business, the Purchased Assets or any income or gains derived with respect thereto for any Tax period, or portion thereof, ending on or before the Closing Date;

(f) all Liabilities related to any Indebtedness;

(g) all Liabilities related to the Seller’s non-compliance with any applicable Laws;

(h) all Liabilities arising out of or relating to any breach of warranty or similar claim with respect to the Business, to the extent such Liabilities relate to services provided by the Seller prior to the Closing Date;

(i) all Liabilities related to any pending or threatened litigation against the Seller, whether related to the Business or otherwise; and

(j) all other Liabilities of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, whether or not accrued, not defined as Assumed Liabilities pursuant to Section 1.2.1.

1.3 Purchase Price. In consideration of the sale by the Seller to the Buyer of the Purchased Assets and the representations, warranties and covenants made by the Seller to the Buyer, and subject to the satisfaction or waiver of all of the conditions contained herein, the Buyer shall deliver to Seller (a) at Closing, One Million Nine Hundred Twenty-Two Thousand Five Hundred Dollars ($1,922,500) (the “Initial Purchase Price”) in cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Schedule 1.3; and (b) in accordance with the timing specified in Section 1.4.3, the Earn-out Payment (as defined in Section 1.4.1), if any.

1.4 Earn-Out.

1.4.1 Payments.

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(a) Earn-out. The Buyer shall pay to the Seller an earn-out payment (the “Earn-out Payment”) equal to the product of (a) Actual EBITDA divided by Target EBITDA and (b) the Maximum Earn-Out, provided, that such Earn-Out shall in no event be greater than One Million Nine Hundred Twenty-Two Thousand Five Hundred Dollars ($1,922,500).

1.4.2 Procedures Applicable to Determination of the Earn-out Payments.

(a) On or before the date which is thirty (30) days after the conclusion of the Measurement Period (the "Earn-out Calculation Delivery Date"), the Buyer shall prepare and deliver to the Seller a written statement (the "Earn-out Calculation Statement") setting forth in reasonable detail its calculation of the resulting Earn-out Payment (the "Earn-out Calculation").

(b) The Seller shall have five (5) days after receipt of the Earn-out Calculation Statement (the "Review Period") to review the Earn-out Calculation Statement and the Earn-out Calculation set forth therein. During the Review Period, the Seller and its accountants shall have the right to inspect the Buyer's books and records during normal business hours at the Buyer's offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of the Earn-out Payment. Prior to the expiration of the Review Period, the Seller may object to the Earn-out Calculation set forth in the Earn-out Calculation Statement by delivering a written notice of objection (the "Earn-out Calculation Objection Notice") to the Buyer. Any Earn-out Calculation Objection Notice shall specify the items in the applicable Earn-out Calculation disputed by the Seller and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If the Seller fails to deliver an Earn-out Calculation Objection Notice to the Buyer prior to the expiration of the Review Period, then the Earn-out Calculation set forth in the Earn-out Calculation Statement shall be final and binding on the parties hereto. If the Seller timely delivers an Earn-out Calculation Objection Notice, the Buyer and the Seller shall negotiate in good faith to resolve the disputed items and agree upon the resulting amount of the Total Premium and the Earn-out Payment. If the Buyer and the Seller are unable to reach agreement within thirty (30) days after such an Earn-out Calculation Objection Notice has been given, all unresolved disputed items shall be promptly referred to an impartial nationally recognized firm of independent certified public accountants, other than the Seller’s accountants or the Buyer’s accountants, appointed by mutual agreement of the Buyer and the Seller (the "Independent Accountant"). The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable Earn-out Calculation as promptly as practicable, but in no event greater than thirty (30) days after such submission to the Independent Accountant, and to resolve only those unresolved disputed items set forth in the Earn-out Calculation Objection Notice. If unresolved disputed items are submitted to the Independent Accountant, the Buyer and the Seller shall each furnish to the Independent Accountant such work papers, schedules and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by the Buyer and the Seller, and not by independent review. The resolution of the dispute and the calculation of Total Premium that is the subject of the applicable Earn-out Calculation Objection Notice by the Independent Accountant shall be final and binding on the parties hereto. The fees and expenses of the Independent Accountant shall be borne by the Seller and the Buyer in proportion to the amounts by which their respective calculations of Total Premium differ from Total Premium as finally determined by the Independent Accountant.

1.4.3 Timing of Payment of Earn-out Payments. Subject to Section 1.4.5, any Earn-out Payment that the Buyer is required to pay pursuant to Section 1.4.1 hereof shall be paid in full no later than five (5) business days following the date upon which the determination of the Earn-out Payment becomes final and binding upon the parties as provided in Section 1.4.2(b) (including any final resolution of any dispute raised by the Seller in the Earn-out Calculation Objection Notice). The Buyer shall pay to the Seller the Earn-out Payment, if any, in cash by wire transfer of immediately available funds to the bank account for the Seller set forth on Schedule 1.3.

1.4.4 Post-closing Operation of the Business. Subject to the terms of this Agreement, subsequent to the Closing, the Buyer shall have sole discretion with regard to all matters relating to the operation of the Business; provided, that the Buyer shall not, directly or indirectly, take any actions in bad faith that would have the purpose of avoiding or reducing any of the Earn-out Payments hereunder. Notwithstanding the foregoing, the Buyer has no obligation to operate the Business in order to achieve any Earn-out Payment or to maximize the amount of any Earn-out Payment.

1.4.5 Right of Set-off. The Buyer shall have the right to withhold and set off against any amount otherwise due to be paid pursuant to this Section 1.4 the amount of any Losses to which any Buyer Indemnified Party may be entitled.

1.4.6 No Security. The parties hereto understand and agree that (i) the contingent rights to receive the Earn-out Payment shall not be represented by any form of certificate or other instrument, are not transferable, except by operation of Laws relating to descent and distribution, divorce and community property, and do not constitute an equity or ownership interest in the Buyer, (ii) the Seller shall not have any rights as a security holder of the Buyer as a result of the Seller's contingent right to receive the Earn-out Payment hereunder, and (iii) no interest is payable with respect to the Earn-out Payment.

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1.5 Third Party Consents. To the extent that the Seller’s rights under any Contract or Permit constituting a Purchased Asset, or any other Purchased Asset, may not be assigned to the Buyer without the consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and the Seller, at its expense, shall use its best efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair the Buyer’s rights under the Purchased Asset in question so that the Buyer would not in effect acquire the benefit of all such rights, the Seller, to the maximum extent permitted by law and the Purchased Asset, shall act after the Closing as the Buyer’s agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by Law and the Purchased Asset, with the Buyer in any other reasonable arrangement designed to provide such benefits to the Buyer. Notwithstanding any provision in this Section 1.5 to the contrary, the Buyer shall not be deemed to have waived its rights under Section 4.2.2 hereof unless and until the Buyer provides written waivers thereof.

1.6 Closing. The closing of the purchase and sale of the Purchased Assets (the “Closing”) shall take place on April 8, 2015 (the “Closing Date”) and shall be effective as of 12:01 a.m. Eastern Time on the Effective Date.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller and the Equity Holders, jointly and severally, hereby represent and warrant to the Buyer with respect to the matters specified in this Article 2 as follows:

2.1 Organization and Qualification. The Seller is a limited liability company, duly organized, validly existing and in good standing under the Laws of the State of Pennsylvania. The Seller does not have any subsidiaries. The Seller has the requisite limited liability company power and authority to conduct the Business as it is now being conducted and to perform all of its obligations under each Contract by which it is bound.

2.2 Authorization; Enforceability. The Seller has the requisite limited liability company power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated by this Agreement. This Agreement has been duly authorized by the Equity Holders and duly executed and delivered by the Seller, and this Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable in accordance with its terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

2.3 Organizational Documents. The Seller has delivered to the Buyer copies of the Seller’s Organizational Documents, and all such copies are complete and correct as of the date hereof. The books of account and other records of the Seller delivered to the Buyer have been maintained in accordance with sound business practice, and applicable Law and accounting policies. The Seller is not in default under or in violation of any provision of its Organizational Documents.

2.4 Capitalization.  The Equity Holders are the only record and beneficial holder of the Equity Interests of the Seller.  There are no voting trusts, proxies, or other agreements or understandings with respect to the voting Equity Interests of the Seller.

2.5 No Violation. Except as set forth on Schedule 2.5 and subject to the receipt of the Consents and to the filing of notices as contemplated by Section 2.6, neither the execution and delivery of this Agreement, nor the performance by the Seller of its obligations hereunder, or the consummation of the transactions contemplated hereby will (with or without the passage of time or the giving of notice) (a) violate, conflict with or constitute a default under the Organizational Documents of the Seller, (b) violate, conflict with or result in a breach of, constitute a default under, give rise to any right of termination, cancellation or acceleration under, or cause any loss of benefit under, any of the terms, conditions or provisions of any Assigned Contract or any Contract or Lease to which the Seller is a party or by which the Purchased Assets are bound, or give to others any rights (including rights of termination, foreclosure, cancellation or acceleration) in or with regard to the Seller or any of its assets, or result in, require or permit the creation or imposition of any Lien of any nature upon or with regard to the Seller or any of its assets, or (c) conflict with or violate in any material respect any Laws applicable to the Seller or by which any of its assets are bound or any of the Licenses and Permits held by the Seller.

2.6 Consents.

2.6.1 Third Party Consents. Neither the execution and delivery of this Agreement, nor the performance by the Seller of its obligations hereunder or the consummation of the transactions contemplated hereby will (with or without the passage of time or the giving of notice) require any Consent (collectively, the “Third Party Consents”) under any of the terms, conditions or provisions of any Assigned Contract or any Contract to which the Seller is a party or by which any Purchased Assets are bound.

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2.6.2 Governmental Consents. Except as set forth on Schedule 2.6.2, no material Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority (collectively, the “Governmental Consents”) is required to be made or obtained by the Seller in connection with the execution, delivery and performance by the Seller of this Agreement and the consummation of the transactions contemplated hereby, which, if not made or obtained, would result in a violation of any Law, License or Permit, or result in any material Liability to the Seller, or which would prohibit the consummation of the transactions contemplated hereby.

2.7 Taxes.

2.7.1 Attached hereto as Schedule 2.7.1 are complete and correct copies of the Seller’s Tax Returns for the fiscal years ended December 31, 2012; December 31, 2013 and December 31, 2014.  The Seller has filed, will timely file or will cause to be timely filed, or has timely filed for an extension of the time to file, all Tax Returns required by applicable Law to be filed by it prior to or as of the date hereof, and such Tax Returns are, or will be at the time of filing, true, correct and complete in all material respects. The Seller has paid and discharged or, where payment is not yet due, has established, or will establish or cause to be established, on or before the Closing Date, an adequate accrual for the payment of all Taxes due with respect to (a) any period ending prior to or on the Closing Date and (b) the portion through the Closing Date for any period that includes (but does not end on) the Closing Date. There are no Liens, claims or assessments pending against the Seller or its assets for any alleged deficiency in any Tax (other than for current Taxes not yet due and payable), and the Seller has not been notified of any proposed Tax claims, Liens or assessments against the Seller. The Seller is not, has not been, nor has been notified that it will be the subject of any examination by a Taxing Authority. The Seller has withheld from each payment made to any of its past or present employees, and any other Person, as appropriate, the amount of all Taxes and other deductions required to be withheld therefrom, and paid the same to the proper Taxing Authority within the time required by Law. No claim has ever been made by a Taxing Authority in a jurisdiction where the Seller does not file Tax Returns that the Seller is or may be subject to taxation by that jurisdiction. The Seller is not party to any Tax indemnity, allocation or sharing agreement.

2.8 Material Contracts. The Seller has delivered to the Buyer a complete and correct copy of each written Assigned Contract, together with all amendments, exhibits, attachments, waivers or other changes thereto, and written descriptions of each oral Contract, if any. Each Assigned Contract that is in any way material to the Business of the Seller (a “Material Contract”) is valid, binding, in full force and effect, and enforceable by the Seller against the parties thereto in accordance with its terms, except as such enforceability may be limited by the General Enforceability Exceptions, and is not subject to any claims, charges, setoffs or defenses. The Seller is not in breach or default under any Material Contract, nor has any event occurred which with the giving of notice or the passage of time (or both) would constitute a breach or default by the Seller thereunder. The Seller has not waived any material rights under any Material Contract or modified any material terms thereof. To the Seller’s Knowledge, no other party to any Material Contract is in breach or default in any respect thereunder, nor has any event occurred or is expected to occur (including, without limitation, the transactions contemplated hereby), which with the giving of notice or the passage of time (or both) would constitute a breach or default by such other party thereunder.

2.9 Real Property. No interest in any Real Property is included in the Purchased Assets.

2.10 Personal Property. The Seller has good title to, a valid leasehold interest in, or a valid license to use, all assets owned or used by the Seller, and all assets used in or necessary for the operation of the Business, free and clear of any Liens. All tangible assets owned, leased or licensed by the Seller are in the possession of, and under the control of, the Seller.

2.11 Intellectual Property. Schedule 2.11 sets forth a complete and correct list of all Intellectual Property owned by the Seller or related to, used in or necessary for the operation of the Business (the “Seller Intellectual Property”). Except as set forth on Schedule 2.11, (a) the Seller owns all right, title and interest in, or has a valid license to use, the Seller Intellectual Property in the Business, free and clear of all Liens; (b) the use of the Seller Intellectual Property in the conduct of the Business does not infringe upon, dilute or misappropriate (and in the past has not infringed upon, diluted or misappropriated) any Intellectual Property rights of any Person; (c) no claims or allegations of infringement or unauthorized use involving any Seller Intellectual Property are pending against a third party; (d) there are no pending claims or allegations of infringement or unauthorized use of any third party Intellectual Property or technology against the Seller or any Affiliate; and (e) no circumstances exist that would form the basis for any material claim of infringement, dilution, unauthorized use, or violation of any Seller Intellectual Property, or challenge the ownership, use, validity or enforceability of any Seller Intellectual Property.

2.12 Insurance Policies. The Seller has delivered, or made available to the Buyer, accurate and complete copies of all policies of insurance and pending applications for policies of insurance under which the Seller or the Business is or has been covered at any time during the last three (3) years. All policies of insurance which provide coverage to the Seller or the Business (a) are valid, outstanding and enforceable on the date hereof; (b) are issued by an insurer that is financially sound and reputable; (c) taken together, provide adequate insurance coverage for the Seller and operations of the Business for all risks to which the Seller and the Business are normally exposed; and (d) are sufficient for compliance with applicable Laws and the Contracts of the Seller. The Seller has not

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received any refusal of coverage, any notice that a defense will be afforded with reservation of rights, or any notice of cancellation or any other indication that any policy of insurance is no longer in full force or effect, or that the issuer of any policy of insurance is unwilling to perform its obligations thereunder. The Seller has complied with all of its obligations under each such insurance policy.

2.13 Litigation. There are no suits, actions, proceedings, investigations, claims or orders (collectively, “Legal Proceedings”) pending or, to the Seller’s Knowledge, threatened against the Seller or any of the current or former representatives of the Seller in their respective capacity as representatives of the Seller, nor is the Seller, or any such representative, subject to any judgment, order or decree of any court, judicial authority or Governmental Authority (nor have any of them been subject to such a judgment, order or decree in the past five (5) years). Schedule 2.13 sets forth a complete and correct list and description of all Legal Proceedings made, filed or otherwise initiated in connection with the Seller that are pending or that have been resolved in the past two (2) years, and the resolution thereof. The Seller has adequate insurance with respect to all Legal Proceedings.

2.14 Compliance with Applicable Laws. The Seller has complied in all material respects with all Laws applicable to it or to the operation of the Business and no facts or circumstances exist which would reasonably be expected to cause the Seller to violate or fail to comply with any such Laws in the future. The Seller has not received any written notice from any court, judicial authority or Governmental Authority asserting a failure, or possible failure, to comply with any such applicable Laws, the subject of which notice has not been conclusively resolved as required thereby or otherwise to the satisfaction of the party sending such notice. The Seller is not under investigation with respect to violations of any such Laws.

2.15 Regulatory Compliance. Schedule 2.15 contains a complete and correct list of all Licenses and Permits issued to or maintained by the Seller as of the date hereof that are necessary to the conduct of the Business as the Business has been operated during the past twelve (12) months (collectively, the “Material Licenses and Permits”), along with the date of issuance and the current term thereof. All such Material Licenses and Permits are in full force and effect. The Seller is in compliance with the terms and conditions of the Material Licenses and Permits and has received no written notices that it is in violation of any of the terms or conditions of any Material Licenses and Permits or alleging the failure to maintain any Licenses and Permits. The Seller has not received written notice that any of the Material Licenses and Permits will not be renewed, there are no proceedings pending to revoke or withdraw any such Material Licenses and Permits and the Seller has no reason to believe that any of the Material Licenses and Permits will be revoked, withdrawn or will not be renewed. The facilities used in the Business are in compliance with all applicable building codes, ordinances and regulations, and the Seller has not received any notice asserting a failure, or possible failure, to comply with any such fire codes, ordinances or regulations.

2.16 Books and Records. The Seller has maintained its books and records in the Ordinary Course of Business, consistent with professional business standards and practices customary for the hospitality insurance industry. The Seller makes and keeps books, records and accounts which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets.

2.17 Brokers. No broker, finder or agent is entitled to any brokerage fees, finder’s fees or commissions in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller.

2.18 Customers. Schedule 2.18 sets forth a list of all customers of the Seller, showing the total sales by the Seller to each customer for the years ended 2014 and 2015. As of the Closing Date, no customer listed on Schedule 2.18 has terminated its relationship with the Seller or materially reduced or changed the pricing or other terms of its business with the Seller, and no customer listed on Schedule 2.18 has notified the Seller that it intends to terminate or materially reduce or change the pricing or other terms of its business with the Seller.

2.19 Foreign Person. The Seller is not a foreign person within the meaning of Section 1445 of the Code.

2.20 Full Disclosure. This Agreement, including all Schedules and Exhibits, delivered by or on behalf of the Seller hereunder are complete and correct in all material respects. No representation or warranty of the Seller contained in this Agreement and no written statement made by or on behalf of the Seller to the Buyer or any of its Affiliates pursuant to this Agreement contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. There is no fact known to the Seller which the Seller has not disclosed to the Buyer in writing which reasonably could be expected to materially affect the Business in an adverse manner.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Seller as follows:

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3.1 Organization and Authority of the Buyer; Enforceability. The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. The Buyer has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Buyer and, assuming the due authorization, execution and delivery by the other parties hereto, will constitute, upon such execution and delivery in each case thereof, legal, valid and binding obligations of the Buyer, enforceable in accordance with their terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

3.2 No Consents. No material Consent of, permit or exemption from, or declaration, filing or registration with, any Governmental Authority is required to be made or obtained by the Buyer in connection with the execution, delivery and performance of this Agreement by the Buyer.

3.3 No Violation. Neither the execution and delivery of this Agreement nor the performance by the Buyer of the transactions contemplated hereby will (a) violate or conflict with the Organizational Documents of the Buyer, or (b) conflict with or violate any Laws applicable to the Buyer or by which any of its properties is bound.

ARTICLE 4

CLOSING

4.1 Time and Place.  The Closing shall occur simultaneously with the execution of this Agreement and shall be effective as of 12:01am Eastern Time on the Closing Date.

4.2 Deliveries by the Seller. At the Closing, the Seller shall deliver or cause to be delivered to the Buyer:

4.2.1 Good Standing Certificate. A certificate of good standing with respect to the Seller, issued by the applicable Secretary of State, as of a date not more than thirty (30) days prior to the Closing Date;

4.2.2 Consents. The Third Party Consents and Governmental Consents identified on Schedule 4.2.2;

4.2.3 Licenses and Permits. All Licenses and Permits identified on Schedule 2.15;

4.2.4 Assignment and Assumption Agreement. An assignment and assumption agreement in the form of Exhibit A hereto (the “Assignment and Assumption Agreement”) and duly executed by the Seller, effecting the assignment to and assumption by the Buyer of the Purchased Assets and the Assumed Liabilities;

4.2.5 Bill of Sale. A bill of sale in the form of Exhibit B hereto (the “Bill of Sale”) and duly executed by the Seller, transferring the tangible personal property included in the Purchased Assets to the Buyer; and

4.2.6 Intellectual Property Assignment.  An Intellectual Property Assignment in the form of Exhibit C hereto (the “Intellectual Property Assignment”) and duly executed by the Seller, effecting the assignment of all of the Seller’s Intellectual Property to the Buyer.

4.2.7 Other Documents.  Such other documents and instruments as the Buyer may reasonably request to consummate the transactions contemplated hereby.

4.3 Deliveries by the Buyer. The Buyer will deliver or cause to be delivered to the Seller:

4.3.1 The Purchase Price. Payment of the Purchase Price as provided in Section 1.3;

4.3.2 Good Standing Certificate. A certificate of good standing with respect to the Buyer, issued by the Secretary of State of Delaware, as of a date not more than thirty (30) days prior to the Closing Date;

4.3.3 Assignment and Assumption Agreement. The Assignment and Assumption Agreement duly executed by the Buyer;

4.3.4 Bill of Sale. The Bill of Sale duly executed by the Buyer;

4.3.5 Other Documents. Such other documents and instruments as the Seller shall reasonably request to consummate the transactions contemplated hereby.

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ARTICLE 5

POST CLOSING COVENANTS

5.1 Tax Covenants.

5.1.1 The Parties understand that the Buyer shall be performing a valuation of the Purchased Assets for the purpose, among other things, of valuing the covenants made by the Seller (“Purchase Price Allocation”). The Buyer and Seller each agree that such valuation shall be dispositive regarding the allocation of the respective Purchase Price. The Seller and the Buyer shall cooperate to prepare IRS Form 8594 and any required exhibits thereto. The Buyer and the Seller shall report the federal, state, local and other income and other tax consequences of the purchase and sale contemplated hereby in a manner consistent with the Purchase Price Allocation and shall not take any position inconsistent therewith.

5.1.2 The Seller and the Buyer hereby waive compliance with any “bulk sales” Laws (including any requirement to withhold any amount from payment of the Purchase Price) applicable to the sale to the Buyer of the Purchased Assets by the Seller.

5.2 Access to Books and Records. From and after the Closing, each Party shall provide the other Party and its representatives with reasonable access (for the purpose of examining and copying), during normal business hours, to the books and records relating to the Business with respect to periods, portions thereof or occurrences prior to the Closing Date in connection with legitimate business purposes of the requesting Party (including in connection with the filing of any Tax Returns, the making of any Tax elections, and the defense of any Tax claim audit or proceeding), expressed to the other Party in writing.

5.3 Non-Competition; Non-Solicitation; Confidentiality.

5.3.1 Non-Disclosure of Confidential Information. Neither the Equity Holders nor the Seller shall, directly or indirectly, disclose or use at any time any Confidential Information, except to the extent that such disclosure or use is directly related to and required by the performance of the Seller’s duties to the Buyer or as required by Law or as otherwise provided hereunder. Each of the Seller and the Equity Holders further agrees to take commercially reasonable steps, to the extent within their control, to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event that the Equity Holders or the Seller are required by Law to disclose any Confidential Information, such Party shall promptly notify the Buyer in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and shall cooperate with the Buyer’s reasonable requests to preserve the confidentiality of such Confidential Information consistent with applicable Law. For purposes of this Agreement, “Confidential Information” means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as “confidential”), in any form or medium, that relates to the Business or its distributors, customers, independent contractors or other business relations. Confidential Information includes the following as they relate to the Business and, in each case, to the extent the Business obtains a commercial benefit from the secret nature of such information: internal business information (including information relating to strategic plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods and potential acquisition candidates); identities of, individual requirements of, and specific contractual arrangements with, the Business’s distributors, customers, independent contractors or other business relations and their confidential information; trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; and inventions, innovations, improvements, developments, methods, designs, analyses, drawings, and reports. Notwithstanding the foregoing, Confidential Information does not include such information which: (a) at the time of disclosure is publicly available or thereafter becomes publicly available through no act or omission of the Equity Holders or the Seller; (b) is thereafter disclosed or furnished to the Equity Holders or the Seller by a third party who is not known by such party to have acquired the information under an obligation of confidentiality; or (c) is disclosed by the Equity Holders or the Seller (subject to compliance with the applicable provisions of this Section 5.3.1) under compulsion of applicable Law.

5.3.2 Non-Competition. Each of the Equity Holders and the Seller is familiar with the trade secrets related to the Business and with other Confidential Information concerning the Business, including all (a) inventions, technology and research and development related to the Business, (b) customers and clients and customer and client lists related to the Business, (c) products (including products under development) and services related  to  the  Business  and  related  costs  and  pricing  structures  and  manufacturing  techniques, (d) accounting and business methods and practices related to the Business and (e) similar and related Confidential Information and trade secrets related to the Business. Each of the Equity Holders and the Seller acknowledges and agrees that the Business would be irreparably damaged if such Party were to directly or indirectly provide services to any Person competing with the Business or engaging in a similar business and that such direct or indirect competition by any such Party would result in a significant loss of goodwill by the Business. In further consideration for the Buyer’s payment of the Purchase Price under this Agreement (in respect of which payment each of the Equity Holders and the Seller expressly acknowledges that he or it derives a substantial and direct benefit), and in order to protect the value of the Business acquired by the Buyer hereunder (including the goodwill inherent in the Business as of the date hereof), each of the Equity Holders and the Seller hereby agrees that during the period commencing on the Closing Date and ending on the second (2nd) anniversary of the Closing Date (the “Non-Competition Period”),

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such Party shall not acquire or hold any economic or financial interest in, act as a partner, member, stockholder, or representative of, render any services to, or otherwise operate or hold an interest in any Person (other than the Seller) having any location in any county in which the Business or the Buyer conducts operations, which entity, enterprise or other Person primarily engages in, directly or indirectly, any business that competes with the Business or operates in the hospitality insurance industry; provided, however, that nothing contained herein shall be construed to prohibit any such Party from purchasing up to an aggregate of two percent (2%) of any class of the outstanding voting securities of any other Person whose securities are listed on a national securities exchange (but only if such investment is held on a purely passive basis).

5.3.3 Non-Solicitation; Non-Disparagement. During the period commencing on the Closing Date and ending on the fifth (5th) anniversary of the Closing Date (the “Non-Solicitation Period”), neither the Equity Holders nor the Seller shall, directly or indirectly, either individually or acting in concert with another Person or Persons, (a) request, induce or attempt to influence any distributor, supplier or customer of goods or services of the Business to curtail, cancel or refrain from maintaining or increasing the amount or type of business such distributor, supplier or customer of goods or services is currently transacting, or may be transacting during the Non-Solicitation Period, with the Business or modify its pricing or other terms of sale with the Business; or (b) make any negative, derogatory or disparaging statements or communications regarding the Buyer, the Business, or the Affiliates or representatives of the Buyer.

5.3.4 Severability. Notwithstanding anything to the contrary in this Agreement, if at any time, in any judicial or arbitration proceeding, any of the restrictions stated in this Section 5.3 are found by a final order of a court of competent jurisdiction or arbitrator to be unreasonable or otherwise unenforceable under circumstances then existing, the Parties each agree that the period, scope or geographical area, as the case may be, shall be reduced to the extent necessary to enable the court to enforce the restrictions to the extent such provisions are allowable under applicable Law, giving effect to the agreement and intent of the Parties that the restrictions contained herein shall be effective to the fullest extent permissible. In the event of a breach or violation by any Party of any of the provisions of this Section 5.3, the Non-Competition Period or Non-Solicitation Period, as the case may be, will be tolled for so long as such Party was in violation of such provision. Each of the Equity Holders and the Seller agrees that the restrictions contained in this Agreement are reasonable in all respects and necessary to protect the Buyer’s interest in, and the value of, the Business.

5.4 Transition Items.

5.4.1 Transition Collections. The Seller shall promptly remit to the Buyer any proceeds received from any Accounts Receivable that constitute Purchased Assets, regardless of when such proceeds are received or whether such proceeds were obtained as a result of the collections efforts of the Seller.  At the reasonable request of the Buyer, the Seller shall make best efforts to assist in the collection of any and all outstanding Accounts Receivable. Following the Closing Date, Buyer and Seller shall review the Purchased Assets and Assumed Liabilities and work together to determine what portions of each are attributable to activity occurring prior to the Effective Date, in such case, to be retained by Seller, or are attributable to activity occurring between the Effective Date and the Closing Date, in such case to be allocated to Buyer.

5.4.2 Transition Expenses.  The Seller shall promptly reimburse the Buyer (within ten (10) business days after the Buyer provides the Seller with a bill for such reimbursement, with reasonable supporting detail) for any payments made by the Buyer with respect to pre-Closing vendor payments, or any other liabilities of the Business related to any period prior to the Closing Date and which are not paid by the Seller within ten (10) business days after receipt by the Seller of written notice of the Buyer’s intent to make any such payment.

5.4.3 Use of Name. The Seller hereby acknowledges and agrees that upon the consummation of the transactions contemplated hereby and for a period of one (1) year following the Closing Date, the Buyer shall have the sole right to the use of any service marks, trademarks, trade names, identifying symbols, logos, emblems, signs or insignia related to the Business (including, without limitation, the name “Hospitality Supportive Systems, LLC”) or containing or comprising any of the foregoing, including any name or mark confusingly similar thereto (collectively, the “Business Marks”). The Seller shall not use any of the Business Marks, except in connection with the filing of Tax returns or the winding up of the Seller’s business affairs related to the Business.

5.5 Further Assurances. From and after the Closing, the Seller shall use reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable in compliance with applicable Laws to consummate and make effective, as soon as reasonably practicable, the transactions contemplated hereby.

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ARTICLE 6

INDEMNIFICATION

6.1 Survival of the Seller’s and the Equity Holders’ Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Seller and the Equity Holders contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of two (2) years after the Closing Date; provided, however, that the representations and warranties in Section 2.1 (Organization and Qualification), Section 2.2 (Authorization; Enforceability), Section 2.7 (Taxes), and the representations and warranties concerning title to the Purchased Assets (collectively, the “Fundamental and Statutory Representations”) shall survive until the expiration of the applicable statute of limitations. All Post-Closing Covenants of the Seller and the Equity Holders will survive the Closing in accordance with their terms. If the Buyer provides notice of a claim in accordance with the terms of this Agreement prior to the end of the period of survival set forth in this Section 6.1, then the Liability for such claim will continue until the claim is fully resolved.

6.2 Survival of the Buyer’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Buyer contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of two (2) years after the Closing Date; provided, however, that the representations and warranties in Section 3.1 (Organization and Authority of the Buyer; Enforceability) shall survive until the expiration of the applicable statute of limitations. All Post-Closing Covenants of the Buyer will survive the Closing in accordance with their terms. If the Seller provides notice of a claim in accordance with the terms of this Agreement prior to the end of the applicable period of survival set forth in this Section 6.2, then the Liability for such claim will continue until the claim is fully resolved.

6.3 Indemnification by the Seller and the Equity Holders. Subject to the terms, conditions and limitations set forth in this Article 6, the Seller and the Equity Holders shall jointly and severally indemnify, defend and hold harmless the Buyer and its representatives, successors and permitted assigns (each, a “Buyer Indemnified Party”), from and against, and shall promptly pay or reimburse each Buyer Indemnified Party for, any and all Losses sustained or incurred (including any Losses sustained or incurred after the end of the applicable survival period, provided that a claim is made prior to the end of the applicable survival period in accordance with the terms of this Agreement) by any Buyer Indemnified Party resulting from: (a) any breach of a representation or warranty made by the Seller or the Equity Holders in this Agreement; (b) any breach of any Post-Closing Covenant made by the Seller or the Equity Holders in this Agreement; (c) any claim or assertion for obligations in respect of Indebtedness or broker’s or seller’s fees or expenses arising out of the transactions contemplated by this Agreement by a Person claiming to have been engaged by the Seller or any of its Affiliates; (d) any obligation of the Seller for any Taxes that arose, in the first instance, prior to the Closing Date; (e) the failure of the Seller to pay, discharge and perform any of the Excluded Liabilities; (f) the ownership or operation of the Business or the Purchased Assets prior to the Closing Date; or (g) any obligation of the Seller or the Equity Holders for any fees or penalties with respect to the collection of administration fees.

6.4 Indemnification by the Buyer. Subject to the terms, conditions and limitations set forth in this Article 6, from and after the Closing, the Buyer shall indemnify, defend and hold harmless the Seller and its representatives, successors and permitted assigns (each, a “Seller Indemnified Party”) from and against any and all Losses sustained or incurred by any Seller Indemnified Party resulting from: (a) any breach of a representation or warranty made by the Buyer in this Agreement; (b) any breach of a Post-Closing Covenant made by the Buyer in this Agreement; (c) the failure of the Buyer to pay, discharge and perform any of the Assumed Liabilities; or (d) the ownership or operation of the Business or the Purchased Assets on or after the Closing Date.

6.5 Indemnification Procedure for Third Party Claims.

6.5.1 In the event that subsequent to the Closing, any Person that is or may be entitled to indemnification under this Agreement (an “Indemnified Party”) receives notice of the assertion of any claim, issuance of any order or the commencement of any action or proceeding by any Person who is not a Party or an Affiliate of a Party, including, without limitation, any domestic or foreign court or Governmental Authority (a “Third Party Claim”), against such Indemnified Party and for which a Party is or may be required to provide indemnification under this Agreement (an “Indemnifying Party”), then such Indemnified Party shall give written notice thereof, together with a statement of any available information regarding such Third Party Claim to the applicable Indemnifying Party within sixty (60) days after learning of such Third Party Claim; provided, however, that failure to give such written notice within any particular time period shall not adversely affect the Indemnified Party’s right to indemnification except, and to the extent that, the Indemnifying Party can show that the failure to give such notification on a timely basis adversely affected the Indemnifying Party’s ability to defend such Third Party Claim. The Indemnifying Party shall have the right upon written notice to the Indemnified Party (the “Defense Notice”), within thirty (30) days after receipt from the Indemnified Party of notice of such Third Party Claim, to conduct, at its expense, the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party. Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter into any settlement of any Third Party Claim or cease to defend against such Third Party Claim, if pursuant to or as a result of such settlement or cessation, (a) injunctive or other equitable relief would be imposed against the Indemnified Party, or (b) each claimant or plaintiff in such Third Party Claim has not given to the Indemnified Party an unconditional release from all Liability with respect to such Third Party Claim.

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6.5.2 Notwithstanding anything contained in Section 6.5.1 to the contrary, the Indemnifying Party shall not be entitled to control, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of any Third Party Claim if any of the following conditions are not satisfied:

(a) the Indemnifying Party shall acknowledge in writing that it shall be fully responsible for all Losses relating to such proceeding;

(b) the Indemnifying Party must diligently defend such proceeding;

(c) the Indemnifying Party must furnish the Indemnified Party with evidence that the financial resources of the Indemnifying Party (or the funds available in the Escrow Account with respect to claims against the Escrow Account), in the Indemnified Party’s reasonable judgment, are and will be sufficient (when considering Losses in respect of all other outstanding claims) to satisfy any Losses relating to such proceeding;

(d) such proceeding shall not involve criminal actions or allegations of criminal conduct by the Indemnifying Party, and shall not involve claims for specific performance or other equitable relief; and

(e) there does not exist, in the Indemnified Party’s good faith judgment, based on the advice of outside legal counsel, a conflict of interest which, under applicable principles of legal ethics, could reasonably be expected to prohibit a single legal counsel from representing both the Indemnified Party and the Indemnifying Party in such proceeding.

6.6 Tax Treatment of Indemnification. All indemnification payments made under this Agreement shall be treated by all Parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 7

DEFINITIONS

Definitions. As used in this Agreement,

“Accounts Receivable” of any Person means (a) all trade accounts receivable and other rights to payment from customers of such Person and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped, products sold or services rendered to customers of such Person, (b) all other accounts or notes receivable of such Person and the full benefit of all security for such accounts or notes, and (c) any claim, remedy or other right related to any of the foregoing.

“Actual EBITDA” shall mean EBITDA for the Measurement Period.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by, or under direct or indirect common Control with, such Person. For purposes of this definition, a Person shall be deemed to Control another Person if such Person owns or Controls, directly or indirectly, more than twenty-five percent (25%) of the voting Equity Interests of the other Person. “Control,” “Controlled” or “Controlling” means the ability of a Person (collectively or with its Affiliates) directly or indirectly to direct the use of, disposition of and access to the property of another Person.

“Cash on Hand” means all cash and cash equivalents, calculated as of 12:01 a.m., Eastern Time on the date of calculation, determined in accordance with GAAP.

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

“Consent” means any approval, consent, ratification, waiver, or other authorization.

“Contract” means any written or oral agreement, note, mortgage, indenture, lease, deed of trust, license, plan, instrument or other contract or legally binding arrangement or commitment.

“Equity Interests” means (a) any partnership interests, (b) any membership interests or units, (c) any shares of capital stock, (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, (e) any subscriptions, calls, warrants, options, or commitments of any kind or character relating to, or entitling any Person or entity to purchase or otherwise acquire membership interests or units, capital stock, or any other equity securities, (f) any securities convertible into or exercisable or exchangeable for partnership interests, membership interests or units, capital stock, or any other equity securities, or (g) any other interest classified as an equity security of a Person.

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

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“General Enforceability Exceptions” means those exceptions to enforceability due to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally, and general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity).

“Governmental Authority” means the United States or any state, provincial, local or foreign government, or any subdivision, agency or authority of any thereof having competent jurisdiction over any of the Seller, the Buyer or the transactions contemplated by this Agreement, as applicable.

“Indebtedness” means, with respect to any Person, all Liabilities in respect of: (a) borrowed money; (b) indebtedness evidenced by bonds, notes, debentures or similar instruments; (c) capitalized lease obligations; (d) operating lease obligations related to any pieces of material equipment used in the Business; (e) the deferred purchase price of assets, services or securities (other than ordinary trade accounts payable); (f) conditional sale or other title retention agreements; (g) the factoring or discounting of accounts receivable; (h) swap or hedging agreements or arrangements; (i) reimbursement obligations, whether contingent or matured, with respect to letters of credit, bankers’ acceptances, bank overdrafts, surety bonds, other financial guarantees and interest rate protection agreements (without duplication of other indebtedness supported or guaranteed thereby); and (j) interest, premium, penalties and other amounts owing in respect of the items described in the foregoing clauses (a) through (i) after giving effect to the Closing; (k) all Indebtedness of the types referred to in clauses (a) through (j) guaranteed in any manner by such Person, whether or not any of the foregoing would appear on a consolidated balance sheet prepared in accordance with GAAP; (l) any unfunded pension liabilities; and (m) any so-called “change of control” payments.

“Intellectual Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof; (b) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate names, Internet domain names, and rights in telephone numbers, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith; (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith; (d) all mask works and all applications, registrations, and renewals in connection therewith; (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals); (f) all computer software (including source code, executable code, data, databases, and related documentation); (g) all advertising and promotional materials, (h) all other proprietary rights; and (i) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).

“Law” means each provision of any currently implemented federal, state, local or foreign law, statute, ordinance, order, code, rule or regulation, promulgated or issued by any Governmental Authority.

“Lease” means any lease, sublease or any other material agreement pertaining to any Real Property, together with all amendments, extensions, renewals, modifications, alterations, guaranties and other changes thereto.

“Liability” means any liability or obligation of whatever kind or nature (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due), including, without limitation, any liability for Taxes.

“Licenses and Permits” means any licenses, permits, certificates, certifications, privileges, immunities, notifications, exemptions, classifications, registrations, easements, franchises, approvals, authorizations, orders and other similar rights, or any waivers of the foregoing, issued by any Governmental Authority, and all pending applications therefor or renewals thereof.

“Lien” means any mortgage, pledge, hypothecation, hypothec, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting trust agreement, proxy, interest, equity, option, lien, preemptive right, right of first offer or refusal, charge or other restrictions or limitations of any nature whatsoever, other than restrictions on the offer and sale of securities under federal and state securities Laws.

“Loss” or “Losses” means, with respect to any Person, all Liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, Taxes, fines, penalties, damages (including punitive, special and consequential damages), lost profits, diminution in value (based on a multiple of earnings or otherwise), costs and expenses (including reasonable and documented attorneys’ fees) sustained or incurred by such Person.

“Maximum Earn-out” shall mean $1,922,500.

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“Material Adverse Effect” or “Material Adverse Change” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, is materially adverse to the business, financial condition, results of operations or prospects (including the achievement or the ability to achieve forecasts of revenue or earnings) of the Seller. For the avoidance of doubt, by way of illustration and not limitation, a “Material Adverse Effect” or “Material Adverse Change” shall include any matter or matters that, alone or in the aggregate, is or are likely to, or could reasonably be expected to, result in Losses to the Seller in excess of ten percent (10%) of the Purchase Price, or that a reasonable investor would consider as significantly and adversely affecting its investment decision with respect to the transactions contemplated herein.

“Measurement Period” shall mean the twelve (12) month period beginning on the Closing Date and ending on the one-year anniversary of the Closing Date.

“Ordinary Course of Business” means, in respect of any Person, the ordinary course of such Person’s business, as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in this Agreement or any Other Agreement.

“Organizational Documents” means (a) with respect to a corporation, the certificate or articles of incorporation and bylaws; (b) with respect to a limited liability company, the articles of organization or certificate of formation and operating agreement; (c) with respect to any other entity, any charter or similar document adopted or filed in connection with the creation, formation or organization of such entity and any internal governing documents; and (d) any amendment to any of the foregoing.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or government (whether federal, state, county, city or otherwise, including, without limitation, any instrumentality, division, agency or department thereof).

“Post-Closing Covenant” means any covenant, promise, commitment or other obligation (or any portion thereof) made or undertaken by any Party, in this Agreement or any Other Agreement, to the extent performance or fulfillment thereof is required by its terms to be accomplished after the Closing.

“Real Property” means all parcels and tracts of land, together with all buildings, structures, fixtures and improvements located thereon (including those under construction), and all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of such land, including all easements appurtenant to and for the benefit of such land, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.

“Seller’s Knowledge” or “Knowledge of the Seller” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known to the Seller or in the absence of such knowledge the actual knowledge that the Seller would have had if it had undertaken a reasonable inquiry of the fact, matter or circumstance in question.

“Target EBITDA” shall mean $900,000.

“Tax” or “Taxes” means (a) any U.S. federal, state, local, or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value-added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being a member of a consolidated, combined, unitary or aggregate group for any Tax period, and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) as a result of being a transferee or successor to any person or as a result of any express or implied obligation to indemnify any other person or payable pursuant to any tax sharing agreement or any other contract relating to the sharing or payment of any such Tax.

“Tax Returns” means any return, declaration, report, schedule, notice, form, claim for refund, or information return or statement (including any attachment thereto and any amendment thereof) filed with or submitted to, or required to be filed with or submitted to, any Taxing Authority.

“Taxing Authority” means any Governmental Authority, domestic or foreign, having jurisdiction over the assessment, determination, collection, or other imposition of any Taxes.

“Total Premium” means all premiums earned in connection with the Purchased Assets during the Measurement Period.

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ARTICLE 8

MISCELLANEOUS

8.1 Notices, Consents, etc.   Any notices, consents or other communications required to be sent or given hereunder by any of the Parties shall in every case be in writing and shall be deemed properly served if and when (a) delivered by hand, (b) transmitted by facsimile, e-mail or other means of electronic transmission, (c) delivered by Federal Express or other express overnight delivery service, or (d) sent by registered or certified mail, return receipt requested, to the Parties at the addresses as set forth below or at such other addresses as may be furnished in writing:

If to the Seller or the Equity Holders:

Selective Risk Management LLC

940 West Sproul Road, #103

Springfield, Pennsylvania 19064

Attention: Edward Snow

E-mail: edwards@hss-ins.net

If to the Buyer:

TriGen Insurance Solutions, Inc.

401 East Las Olas Boulevard, Suite 1650

Fort Lauderdale, Florida 33301

Attention: Christopher A. Pesch

E-mail: cpesch@patnat.com

Date of service of such notice shall be (x) the date such notice is delivered by hand, facsimile, e-mail or other form of electronic transmission, (y) one (1) business day following the delivery by express overnight delivery service, or (z) three (3) business days after the date of mailing if sent by certified or registered mail.

8.2 Severability. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of any other provision. Upon such determination that any term or other provision is unenforceable or invalid, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a legally acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

8.3 Successors; Assignment. This Agreement will be binding upon, and inure to the benefit of, the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by the Seller without the prior written consent of the Buyer or by the Buyer without the prior written consent of the Seller; provided, however, that the Buyer may assign this Agreement in whole or in part to any of its Affiliates or to any Person which becomes a successor in interest (by purchase of assets or stock, or by merger or otherwise) to the Buyer, and the Buyer may assign its rights under this Agreement to its financing sources.

8.4 Counterparts; Facsimile Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of e-mail, facsimile or other means of electronic transmission, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

8.5 Expenses. Except as provided in Section 5.1.1, each of the Seller and the Buyer shall bear and pay for all of its own costs, fees and expenses (including legal, accounting, investment banking, broker’s, finder’s and other professional or advisory fees and expenses) incurred or to be incurred by it, in each case, in negotiating and preparing this Agreement and in closing and carrying out the transactions contemplated hereby and thereby.

8.6 Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than the State of Delaware.

8.7 Entire Agreement. This Agreement, the Recitals, the Schedules and the Exhibits attached hereto set forth the entire understanding of the Parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings,

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agreements and representations and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof. This Agreement may be modified only by subsequent instruments signed by the Parties hereto.

8.8 Third Parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any Person, other than the Parties to this Agreement, the Buyer Indemnified Parties or the Seller Indemnified Parties and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

8.9 Disclosure Generally. All Schedules attached hereto are incorporated herein and expressly made a part of this Agreement as though completely set forth herein. All references to this Agreement herein or in any of the Schedules shall be deemed to refer to this entire Agreement, including all Schedules. Information furnished in any particular Schedule shall not be deemed to be included in all other Schedules in which the information is required to be included unless specifically designated with a cross-reference.

8.10 Interpretive Matters. Unless the context otherwise requires, (a) all references to Articles, Sections, Schedules or Exhibits shall mean and refer to Articles, Sections, Schedules or Exhibits in this Agreement; (b) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP; (c) words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and neuter; (d) the term “including” shall mean “including, without limitation,” (i.e., by way of example and not by way of limitation); (e) all references to statutes and related regulations shall include all amendments of the same and any successor or replacement statutes and regulations; (f) references to “hereof”, “herein”, “hereby” and similar terms shall refer to this entire Agreement (including the Schedules and Exhibits hereto); (g) references to any Person shall be deemed to mean and include the successors and permitted assigns of such Person (or, in the case of a Governmental Authority, Persons succeeding to the relevant functions of such Person); and (h) whenever this Agreement refers to a number of days, such number shall refer to calendar days, unless such reference is specifically to “business days.” The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) that the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of such representation, warranty or covenant. The section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation of any of the provisions of this Agreement. Each of the Parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted it is of no application and is hereby expressly waived by the Parties hereto.

8.11 Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be settled by arbitration in Fort Lauderdale, Florida before three (3) arbitrators. The arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

8.12 Waiver of Jury Trial. To the extent not prohibited by applicable Law that cannot be waived, each Party hereby irrevocably waives, and covenants that it will not assert any right to trial by jury in any forum in respect of any issue, claim, demand, action or cause of action arising in whole or in part under, related to, based on or in connection with this Agreement or the subject matter hereof, whether now existing or hereafter arising and whether sounding in tort or contract or otherwise. Any Party hereto may file an original counterpart or a copy of this Section 8.12 with any court as written evidence of the consent of each such Party to the waiver of its right to trial by jury.

[Signature page follows]

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IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement on the date first written above.

BUYER:
TriGen Insurance Solutions, Inc.
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Vice-President
SELLER:
Selective Risk Management LLC
By:	/s/ Edward Snow
Name:	Edward Snow
Title:	Manager
EQUITY HOLDERS:
/s/ Edward Snow
Edward Snow
/s/ Charles O’Donnell
Charles O’Donnell

*  All schedules and exhibits to this Exhibit 2.4 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The schedules include a list of assigned contracts, wiring instructions, licenses, and customer lists. The exhibits include the assignment and assumption agreement and the bill of sale. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-2.7

Exhibit 2.7

STOCK PURCHASE AGREEMENT

by and among

Corporate Claims Management, Inc.,

Patriot Risk Services, Inc.,

and

The Sellers Named on the

Signature Pages Hereto,

Dated as of April 24, 2015

ARTICLE I PURCHASE AND SALE OF THE SHARES		1
Section 1.1	Purchase and Sale	1
Section 1.2	Purchase Price	1
Section 1.3	Closing	1
ARTICLE II CONSIDERATION AND MANNER OF PAYMENT		1
Section 2.1	Payments at Closing	1
Section 2.2	Core TPA Earn-Out	1
Section 2.3	Add-On Services Earn-Out	2
Section 2.4	Procedures for Determination of Earn-Out	2
Section 2.5	Holdback	2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY		3
Section 3.1	Organization and Qualification	3
Section 3.2	Authorization; Enforceability	3
Section 3.3	Organizational Documents	3
Section 3.4	Capitalization	3
Section 3.5	Options	3
Section 3.6	No Violation	3
Section 3.7	Consents	4
Section 3.8	Financial Statements	4
Section 3.9	Absence of Undisclosed Liabilities	4
Section 3.10	Absence of Certain Changes; Cash on Hand	4
Section 3.11	Taxes	4
Section 3.12	Material Contracts	5
Section 3.13	Real Property	5
Section 3.14	Personal Property	5
Section 3.15	Intellectual Property and Information Technology	5
Section 3.16	Insurance Policies	5
Section 3.17	Litigation	6
Section 3.18	Compliance with Applicable Laws	6
Section 3.19	Regulatory Compliance	6
Section 3.20	Compliance with Environmental, Health and Safety Requirements	6
Section 3.21	Employee Benefit Plans	6
Section 3.22	Labor; Employment	6
Section 3.23	Books and Records	7
Section 3.24	Brokers	7
Section 3.25	Banks	7
Section 3.26	Customers	7
Section 3.27	Full Disclosure	7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS		7
Section 4.1	Authorization; Enforceability	7
Section 4.2	Title to Shares	8
Section 4.3	No Consents	8
Section 4.4	Litigation	8
Section 4.5	No Violation	8
Section 4.6	Foreign Person	8
Section 4.7	Brokers	8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER		8
Section 5.1	Organization and Qualification	8
Section 5.2	Authorization; Enforceability	8
Section 5.3	No Consents	8
Section 5.4	Litigation	8
Section 5.5	No Violation	8

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ARTICLE VI CLOSING		9
Section 6.1	Time and Place	9
Section 6.2	Deliveries by the Company and the Sellers	9
Section 6.3	Deliveries by the Buyer	9
ARTICLE VII POST CLOSING COVENANTS		10
Section 7.1	Tax Covenants	10
Section 7.2	Access to Books and Records	11
Section 7.3	Non-Competition; Non-Solicitation; Confidentiality	11
Section 7.4	Preservation of Records	13
Section 7.5	Use of Name	13
Section 7.6	Post-Closing Matters	13
Section 7.7	General	13
ARTICLE VIII INDEMNIFICATION		13
Section 8.1	Survival of the Company’s and the Sellers’ Representations, Warranties and Covenants; Time Limits on Indemnification Obligations	13
Section 8.2	Survival of the Buyer’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations	13
Section 8.3	Indemnification by the Sellers	13
Section 8.4	Indemnification by the Buyer	14
Section 8.5	Indemnification Procedure for Third Party Claims	14
Section 8.6	Treatment of Indemnification	15
Section 8.7	Impact of Insurance on Indemnification Obligations	15
Section 8.8	Right of Set-off	15
Section 8.9	No Right of Contribution	15
ARTICLE IX DEFINITIONS		15
ARTICLE X MISCELLANEOUS		19
Section 10.1	Notices, Consents, etc	19
Section 10.2	Severability	19
Section 10.3	Successors; Assignment	19
Section 10.4	Counterparts; Facsimile Signatures	19
Section 10.5	Expenses	19
Section 10.6	Governing Law	20
Section 10.7	Table of Contents and Headings	20
Section 10.8	Entire Agreement	20
Section 10.9	Third Parties	20
Section 10.10	Disclosure Generally	20
Section 10.11	Interpretive Matters	20
Section 10.12	Construction	20
Section 10.13	Submission to Jurisdiction	20
Section 10.14	Waiver of Jury Trial	21
Section 10.15	Press Releases and Communications	21
Section 10.16	Sellers’ Release	21

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SCHEDULES:
Schedule 2.1	- Payments at Closing
Schedule 3.1	- Organization and Qualification
Schedule 3.3	- Directors and Officers
Schedule 3.4	- Capitalization
Schedule 3.5	- Options
Schedule 3.7(a)	- Third Party Consents
Schedule 3.7(b)	- Governmental Consents
Schedule 3.8(a)	- Annual Financial Statements
Schedule 3.8(b)	- Interim Financial Statements
Schedule 3.9	- Absence of Undisclosed Liabilities
Schedule 3.10	- Cash Management
Schedule 3.12	- Material Contracts
Schedule 3.13	- Real Property
Schedule 3.14	- Personal Property
Schedule 3.15	- Intellectual Property
Schedule 3.17	- Litigation
Schedule 3.19	- Licenses and Permits
Schedule 3.21	- Employee Benefit Plans
Schedule 3.22	- Employees
Schedule 3.25	- Bank Accounts
Schedule 3.26	- Customers
Schedule 7.6	- Post-Closing Matters

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of April 24, 2015, by and among CORPORATE CLAIMS MANAGEMENT, INC., a Missouri corporation (the “Company”), Michael D. Greco and Ruth A. Greco, jointly (the “Sellers”), and PATRIOT RISK SERVICES, INC., a Delaware corporation (the “Buyer”). Each of the parties named above may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used, but not otherwise defined, herein shall have the meanings set forth in ArticleIX below.

RECITALS

WHEREAS, the Sellers jointly own all of the issued and outstanding shares of capital stock of the Company (the “Shares”) as of the date hereof;

WHEREAS, the Buyer desires to purchase from the Sellers, and the Sellers desire to sell to the Buyer, all of the Shares, pursuant to the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I
PURCHASE AND SALE OF THE SHARES

Section 1.1 Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, at the Closing the Buyer shall purchase, acquire and accept the Shares from the Sellers, and the Sellers shall sell, convey, assign and transfer the Shares to the Buyer, free and clear of all Liens and together with all rights now and hereafter attaching thereto.

Section 1.2 Purchase Price. Subject to the terms and conditions set forth herein, the purchase price for the Shares shall be an amount equal to (a) Eight Million Dollars ($8,000,000); plus (b) the amount of the Earn-Out, if any, pursuant to Sections 2.2 and 2.3. The aggregate amount shall be up to Nine Million Dollars ($9,000,000) (the “Purchase Price”). The Purchase Price shall be paid in the amount and in the manner set forth in Article II.

Section 1.3 Closing. The closing of the purchase and sale of the Shares (the “Closing”) shall take place on the date hereof (the “Closing Date”) and shall be effective as of 12:01 a.m. Eastern Time on the Closing Date.

ARTICLE II
CONSIDERATION AND MANNER OF PAYMENT

Section 2.1 Payments at Closing. On the Closing Date, the Buyer shall pay to the Sellers Eight Million Dollars ($8,000,000) by wire transfer of immediately available funds to the bank account specified by the Sellers on Schedule 2.1 in the amounts set forth on Schedule 2.1.

Section 2.2 Core TPA Earn-Out. The Sellers shall receive, as additional Purchase Price, an earn-out based on revenue from Core TPA Business (the “Core TPA Revenue”) for the Core TPA Measurement Period attributable to existing accounts of the Company as of the Closing Date plus any new business added to the Company during the Core TPA Measurement Period (the “Core TPA Earn-Out”). The Earn-Out shall be determined in accordance with the terms and conditions of this Section 2.2:

(a) If Core TPA Revenue for the Core TPA Measurement Period is equal to or greater than $6,500,000 (“Core TPA Revenue Threshold”), the Sellers shall be entitled to an earn-out equal to $500,000 (the “Core TPA Target Earn-Out”).

(b) If Core TPA Revenue for the Core TPA Measurement Period is less than the Core TPA Revenue Threshold, the Sellers shall be entitled to an earn-out calculated as follows: the product of (i) Core TPA Revenue divided by Core TPA Revenue Threshold, and (ii) the Core TPA Target Earn-Out.

Section 2.3 Add-On Services Earn-Out. The Sellers shall receive, as additional Purchase Price, an earn-out based on revenue from Add-on Services (the “Add-on Services Revenue”) for the Add-on Services Measurement Period attributable to accounts of the Company as of the Closing Date plus any new business added to the Company during the Add-on Services Measurement Period (the “Add-on Services Earn-Out”). The Add-on Services Earn-Out shall be determined in accordance with the terms and conditions of this Section 2.3:

(a) If Add-on Services Revenue for the Add-on Services Measurement Period is equal to or greater than $2,500,000 (“Add-on Services Revenue Threshold”), the Sellers shall be entitled to an earn-out equal to $500,000 (the “Add-on Services Target Earn-Out”).

(b) If Add-on Services Revenue for the Add-on Services Measurement Period is less than the Add-on Services Revenue Threshold, the Sellers shall be entitled to an earn-out calculated as follows: the product of (i) Add-on Services Revenue divided by Add-on Services Revenue Threshold, and (ii) the Add-on Services Target Earn-Out.

Section 2.4 Procedures for Determination of Earn-Out. The Core TPA Earn-Out and the Add-on Services Earn-Out (together, the “Earn-Out”) shall be determined in accordance with the following:

(a) On or before fifteen (15) days after the end of the Core TPA Measurement Period, the Buyer shall provide the Sellers with a statement of Core TPA Revenue for the Core TPA Measurement Period and, if applicable, the Buyer’s calculation of the Core TPA Earn-Out payment (the “Core TPA Earn-Out Statement”).

(b) On or before fifteen (15) days after the end of the Add-on Services Measurement Period, the Buyer shall provide the Sellers with a statement of Add-on Services Revenue for the Add-on Services Measurement Period and, if applicable, the Buyer’s calculation of the Add-on Services Earn-Out payment (the “Add-on Services Earn-Out Statement” and together with the Core TPA Earn-Out Statement, the “Earn-Out Statements”).

(c) For up to fifteen (15) days after the Sellers’s receipt of each Earn-Out Statement (the “Receipt Date”), the Sellers shall be permitted to review the working papers and records of the Business and shall be permitted to discuss such matters with the chief financial officer and other executive officers of the Buyer and the Company for the purpose of confirming the determination of Core TPA Revenue or Add-on Services Revenue for each applicable Measurement Period. The calculation of the Earn-Out in each respective Earn-Out Statement shall become final and binding upon the Parties thirty (30) days following the applicable Receipt Date, unless the Sellers give written notice of its disagreement (a “Notice of Disagreement”) to the Buyer prior to such date (the period commencing on the Receipt Date and ending on the earlier of (i) thirty (30) days thereafter and (ii) the date a Notice of Disagreement is given, the “Earn-Out Review Period”). For up to fifteen (15) days following delivery of a Notice of Disagreement (the “Negotiation Period”), the Parties shall seek in good faith to resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement. If the Sellers and the Buyer cannot agree upon the determination of the Earn-Out within the Negotiation Period, the Parties shall submit to an independent accountant mutually agreeable to the Buyer and the Sellers (the “Independent Accountant”) for review and resolution of all matters that remain in dispute and that were included in the Notice of Disagreement. If Buyer and the Sellers cannot agree on an Independent Accountant, then each of Buyer and the Sellers shall select an independent accountant and such independent accountants shall select the Independent Accountant. The Parties shall instruct the Independent Accountant to make a final determination of the Core TPA Revenue and/or the Add-on Services Revenue, as applicable, and the Earn-Out calculation. Such determination shall become final and binding on the Parties on the date the Independent Accountant delivers its final resolution in writing to the Parties (which final resolution shall be requested by the Parties to be delivered not more than forty five (45) days following submission of such disputed matters). In rendering its decision, the Independent Accountant shall apportion its fees and expenses in connection with the Earn-Out Payment dispute, based on its views as to the relative merits of the positions of each Party in such dispute in the manner described in the following sentence; provided, however, that the Sellers shall advance half, and the Buyer shall advance the other half, of any retainer fee or deposit required by the Independent Accountant in advance of a final resolution, subject to reapportionment by the Independent Accountant of its fees and expenses as aforesaid. For example, if the final determination reflected a 60-40 compromise of the Parties’ claims, the Independent Accountant would allocate expenses forty percent (40%) to the Party whose claim was determined to be sixty percent (60%) successful and sixty percent (60%) to the Party whose claim was determined to be forty percent (40%) successful. All determinations of the Independent Accountant shall be final and binding on the Parties hereto, and neither the Sellers nor the Buyer shall have the right to appeal such determinations. The Sellers and the Buyer agree to cooperate in good faith with each other and with the Independent Accountant in order to facilitate the receipt of the final determinations of the Independent Accountant.

(d) Within thirty (30) days after (i) the Receipt Date or (ii) for any disputed Earn-Out Statement, resolution by the Parties of all alleged errors noted in the Notice of Disagreement or notice of final determination by the Independent Accountant, as applicable, the Buyer shall pay to the Sellers the amount owed to the Sellers as reflected on the Earn-Out Statement or, as applicable, as resolved by the Parties or as determined by the Independent Account.

Section 2.5 Holdback. Notwithstanding Section 2.1, Buyer shall holdback One Hundred Thousand Dollars ($100,000) of the Purchase Price (the “Holdback”) at the Closing Date to cover certain loss fund liabilities unknown and unknowable at the time of Closing.  The Holdback will be remitted to Sellers upon the completion of a reconciliation of all segregated customer cash and loss

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fund accounts as of the Closing Date, net of the aggregate amount, if any, that loss fund liabilities exceed the cash and accounts receivable balances for any individual customer as of the Closing Date; provided, however, subject to the foregoing limitations, the Holdback, or such lesser amount as determined pursuant to this Section 2.5, shall be remitted no later than thirty (30) days after Closing.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the Buyer with respect to the matters specified in this Article III as follows:

Section 3.1 Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Missouri. The Company does not have any Subsidiaries. The Company has the requisite corporate power and authority to conduct the Business as it is now being conducted and is proposed to be conducted, to own and lease the Assets which it owns and leases and to perform all of its obligations under each Contract by which it is bound. The Company is duly qualified to conduct its business as a foreign entity and is in good standing under the Laws of the jurisdictions listed on Schedule 3.1, which are all of the jurisdictions where the nature of its business or the ownership or leasing of its Assets requires such qualification. Set forth on Schedule 3.1 are all the names (i.e. “trading” or “doing business as” names) under which the Company is currently or has ever conducted its business.

Section 3.2 Authorization; Enforceability. The Company has the requisite absolute and unrestricted right, power and authority to execute and deliver this Agreement and the Other Agreements to which it is a party, to perform its obligations under this Agreement and the Other Agreements to which it is a party, and to consummate the transactions contemplated by this Agreement and the Other Agreements to which it is a party, and such actions have been duly authorized by all necessary corporate action of the Sellers and of the Company’s board of directors. This Agreement has been duly executed and delivered by the Company, and the Other Agreements to which the Company is a party have been, or will be at the Closing, duly executed and delivered by the Company, and this Agreement and the Other Agreements constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

Section 3.3 Organizational Documents. The Company has delivered to the Buyer copies of the Company’s Organizational Documents, and all such copies are complete and correct as of the date hereof. Schedule 3.3 contains a complete and correct list of the current directors and officers of the Company. The minute books of the Company previously delivered to the Buyer contain true, complete and correct records of all meetings held, and accurately reflect all other corporate action of the stockholders and board of directors (and any committees thereof) of the Company. The books of account and other records of the Company delivered to the Buyer have been maintained in accordance with sound business practice, and applicable law and accounting policies. The Company is not in default under or in violation of any provision of its Organizational Documents.

Section 3.4 Capitalization. The Sellers are the record and beneficial holders of those and that number of Shares set forth opposite each Seller’s name on Schedule 3.4. All of such Shares have been duly authorized and are validly issued, fully paid and non-assessable, free and clear of all Liens, and have been issued in compliance with applicable Law. As of the date hereof, the Shares and the options disclosed at Schedule 3.4 constitute the only outstanding Equity Interests of the Company. No Equity Interests of the Company are subject to, or have been issued in violation of, preemptive or similar rights. All issuances, sales or repurchases by the Company of its Equity Interests have been effected in compliance with all applicable federal and state securities laws. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting Equity Interests of the Company. The Company does not own, directly or indirectly, or have any obligation to acquire, any Equity Interests of any Person.

Section 3.5 Options. Except as set forth on Schedule 3.5, there are no authorized or outstanding subscriptions, options, rights (conversion, preemptive or otherwise), warrants, calls, convertible securities or commitments or any other arrangements or agreements of any nature whatsoever to which the Company is a party requiring the issuance, conversion, registration, voting, sale or transfer of any Equity Interests of the Company, or any synthetic equity, including without limitation, phantom stock, profits participation or stock appreciation rights or any securities convertible, directly or indirectly, into Equity Interests of the Company, or evidencing the right to subscribe for any Equity Interests of the Company, or giving any Person (other than the Buyer) any rights with respect to any Equity Interests of the Company.

Section 3.6 No Violation. Subject to the receipt of the Consents as contemplated by Section 3.7, neither the execution and delivery of this Agreement or the Other Agreements to which the Company is a party, nor the performance by the Company of its obligations hereunder or thereunder, or the consummation of the transactions contemplated hereby or thereby will (with or without the passage of time or the giving of notice) (a) violate, conflict with or constitute a default under the Organizational Documents of the Company, (b) violate, conflict with or result in a Breach of, constitute a default under, give rise to any right of termination, modification, foreclosure, cancellation or acceleration under, or cause any loss of benefit under, any of the terms, conditions or provisions of any Contract or Lease to which the Company is a party or by which its Assets are bound, or give to others any rights (including rights of termination, modification, foreclosure, cancellation or acceleration) in or with regard to the Company, any of its Assets, or the Shares, or result in, require or permit the creation or imposition of any Lien of any nature upon or with regard to the

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Shares, the Company, or any of its Assets, (c) to the Company’s Knowledge, conflict with or violate in any respect any Laws applicable to the Company or by which any of its Assets is bound or any of the Licenses and Permits held by the Company, or give any Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate or modify any License or Permit, (d) alter or impair the ability of the Company to conduct the Business, or (e) give any Person the right to challenge any of the transactions contemplated hereby, or exercise any remedy or obtain any relief under any Law or any order of a judicial or arbitral authority to which the Company may be bound.

Section 3.7 Consents.

(a) Third Party Consents. Except as set forth on Schedule 3.7(a), neither the execution and delivery of this Agreement or the Other Agreements to which the Company is a party, nor the performance by the Company of its obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby will (with or without the passage of time or the giving of notice) require any Consent (collectively, the “Third Party Consents”) under any of the terms, conditions or provisions of any Contract to which the Company is a party or by which the Company or any of its Assets is bound.

(b) Governmental Consents. Except for (i) Consents required pursuant to the Licenses and Permits held by the Company and listed on Schedule 3.7(b), and (ii) any other filings listed on Schedule 3.7(b), no Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority (collectively, the “Governmental Consents”) is required to be made or obtained by the Company in connection with the execution, delivery and performance by the Company of this Agreement and the Other Agreements to which the Company is a party and the consummation of the transactions contemplated hereby and thereby, which, if not made or obtained, (A) would result in a violation of any Law, License or Permit, (B) would result in any material Liability to the Company, or (C) would prohibit the consummation of the transactions contemplated hereby and thereby.

Section 3.8 Financial Statements.

(a) Attached as Schedule 3.8(a) hereto are complete and correct copies of the compiled balance sheets of the Company as at December 31, 2013 and December 31, 2014 (the “Compiled Balance Sheets”), and the related compiled statements of income of the Company for the fiscal years ended December 31, 2013 and December 31, 2014 (collectively, with the Compiled Balance Sheets, the “Compiled Financial Statements”).

(b) Attached as Schedule 3.8(b) hereto are complete and correct copies of the balance sheet of the Company as at March 31, 2015 (the “Latest Balance Sheet”), and the related statement of income of the Company for the three (3) month period ended March 31, 2015 (collectively, with the Latest Balance Sheet, the “Interim Financial Statements” and together with the Compiled Financial Statements, the “Financial Statements”).

(c) No financial statements of any other Person are required by GAAP to be included in the Financial Statements to fairly and accurately represent the operations of the Company. The Financial Statements have been based upon and are consistent with the information contained in the Company’s books and records and are complete and correct, consistent with the books and records of the Company. The Financial Statements fairly present in all material respects the financial condition of the Company, as of the dates thereof, and the cash flows and results of operations of the Company, for the periods related thereto. The financial books and records, and the accounts, of the Company used to prepare the Financial Statements: (i) have been maintained in accordance with sound business practices on a basis consistent with prior years, (ii) are stated in reasonable detail and reflect actual bona fide transactions of the Company in all material respects, and (iii) constitute the basis for the Financial Statements.

Section 3.9 Absence of Undisclosed Liabilities. The Company does not have any material Liability (and, to the Knowledge of the Company, there is no Basis for any present or future Legal Proceeding against the Company giving rise to any Liability), except the Liabilities (a) that are accrued for or reserved against in the Latest Balance Sheet, (b) that have arisen since the date of the Latest Balance Sheet in the Ordinary Course of Business, or (c) that are otherwise disclosed on Schedule 3.9.

Section 3.10 Absence of Certain Changes; Cash on Hand.

(a) Since the date of the Latest Balance Sheet, except for the marketing of the Company for sale, the Company has conducted the Business in the Ordinary Course of Business, and since the date of the Latest Balance Sheet, there has been no Material Adverse Effect, nor to the Company’s Knowledge has any event occurred that could reasonably be expected to have a Material Adverse Effect, on the Company or the Business.

(b) Without limiting the generality of the foregoing, since the date of the Latest Balance Sheet, there has not been, nor has the Company committed to, any change in cash management practices or policies of the Company, except as disclosed on Schedule 3.10. As of the date hereof, the total Cash on Hand of the Company, plus accounts receivable, plus cash in Company customer accounts and less liability associated with such Company customer accounts is not less than $386,000, comprised of a mutually agreed upon amount of $250,000 to cover working capital requirements and $136,000 of additional funding associated with loss fund obligations.

Section 3.11 Taxes. The Company has filed, will timely file or will cause to be timely filed, or has timely filed for an extension of the time to file, all Tax Returns required by applicable Law to be filed by it prior to or as of the Closing Date, and such Tax Returns are, or will be at the time of filing, true, correct and complete in all material respects. The Company has paid and discharged all Taxes

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due and payable as of the Closing Date or, where payment is not yet due, has established, or will establish or cause to be established, on or before the Closing Date, an adequate accrual for the payment of all Taxes due with respect to (a) any period ending prior to or on the Closing Date and (b) the portion through the Closing Date for any period that includes (but does not end on) the Closing Date. There are no Liens, claims or assessments pending against the Company or its Assets for any alleged deficiency in any Tax (other than for current Taxes not yet due and payable), and the Company has not been notified of any proposed Tax claims, Liens or assessments against the Company. The Company is not, has not been, nor has been notified that it will be the subject of any examination by a Taxing Authority. The Company has withheld from each payment made to any of its past or present employees, and any other Person, as appropriate, the amount of all Taxes and other deductions required to be withheld therefrom, and paid the same to the proper Taxing Authority within the time required by Law. No claim has ever been made by a Taxing Authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. The Company is not party to any Tax indemnity, allocation or sharing agreement. Complete and correct copies of all federal and state Tax Returns filed by the Company for the taxable periods beginning on or after January 1, 2012 have been provided to the Buyer.

Section 3.12 Material Contracts. Except as set forth on Schedule 3.12, the Company has delivered to the Buyer a complete and correct copy of each material written Contract of the Company, whether or not entered into in the Ordinary Course of Business, together with all amendments, exhibits, attachments, waivers or other changes thereto, and written descriptions of each material oral Contract, if any (the “Material Contracts”). To the Company’s Knowledge, (i) each Material Contract is valid, binding, in full force and effect, and enforceable by the Company against the parties thereto in accordance with its terms, except as such enforceability may be limited by the General Enforceability Exceptions, and is not subject to any material claims, charges, set-offs or defenses, (ii) the Company is not in Breach or default under any of the Material Contracts, nor has any event occurred which with the giving of notice or the passage of time (or both) would constitute a Breach or default by the Company thereunder, (iii) the Company has not waived any material rights under any of the Material Contracts or modified any material terms thereof, and (iv) no other party to any Material Contract is in Breach or default in any respect thereunder, nor has any event occurred or is expected to occur (including without limitation the transactions contemplated hereby), which with the giving of notice or the passage of time (or both) would constitute a Breach or default by such other party thereunder.

Section 3.13 Real Property.  The Company does not own any Real Property. Schedule 3.13 sets forth a complete and correct list of all Real Property in which the Company has a leasehold interest (the “Company Real Property”). The Company has delivered to the Buyer a complete and correct copy of each Lease or other Contract pertaining to the Company Real Property, together with all amendments, extensions, renewals, modifications, alterations, guaranties and other changes thereto (the “Company Leases”) all of which are identified on Schedule 3.13. Each of the Company Leases is legal, valid, binding, enforceable and in full force and effect in accordance with the terms thereof, except as such enforceability may be limited by the General Enforceability Exceptions. All conditions precedent to the enforceability of each Company Lease have been satisfied and there is no material Breach or default, nor state of facts which, with the passage of time, notice or otherwise, would result in a material Breach or default (i) on the part of or by the Company, or permit the termination, modification or acceleration of rent by the lessor thereunder, or (ii) to the Company’s Knowledge, on the part of the lessor thereunder.

Section 3.14 Personal Property. The Company has good title to, a valid leasehold interest in, or a valid license to use, all material Assets reflected on the Latest Balance Sheet as owned or used by the Company, and all Assets necessary or useful in the operation of the Business, free and clear of any Liens, except as reflected on the Latest Balance Sheet. All tangible Assets used by the Company in the Ordinary Course of Business are in good working condition and repair and sufficient for the operation of the Business as presently conducted (normal maintenance, wear and tear excepted). All Assets owned, leased or licensed by the Company are in the possession of, and under the control of, the Company and are in good condition and repair, ordinary wear and tear excepted, and are suitable for the purposes for which they are being used and are of a condition, nature and quantity sufficient for the conduct of the Business as currently conducted. Except as set forth on Schedule 3.14, all tangible Assets of the Company are located on or at the Company Real Property.

Section 3.15 Intellectual Property and Information Technology. Schedule 3.15 sets forth a complete and correct list of all Intellectual Property owned or used by the Company in the operation of the Business (the “Company Intellectual Property”) and registered with the United States Patent and Trademark Office (“USPTO”). For each such item of Company Intellectual Property that is registered with the USPTO, Schedule 3.15 sets forth the registration, patent, serial and/or application number, if any, and the Governmental Authority or other entity with which any such application has been filed and/or which has issued, reissued and/or renewed any such patent or registration. Except as set forth on Schedule 3.15, the Company owns all right, title and interest in, or has a valid license to use, the Company Intellectual Property in the Business, free and clear of all Liens and has delivered to the Buyer complete and correct copies of each license agreement granting to any third party any rights relating to any of the Company Intellectual Property or granting to the Company the right to use any Intellectual Property (the “IP License Agreements”).

Section 3.16 Insurance Policies. The Company has delivered, or made available to the Buyer, accurate and complete copies of all policies of insurance and pending applications for policies of insurance to which the Company is party or under which the Company or the Business is or has been covered at any time during the last two (2) years. All policies of insurance to which the Company is a party or which provide coverage to the Company or the Business (a) are valid, outstanding and enforceable on the date hereof; (b) are issued by an insurer that is financially sound and reputable; and (c) are sufficient for compliance with applicable Laws

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and the Contracts of the Company. The Company has not received any refusal of coverage, any notice that a defense will be afforded with reservation of rights, or any notice of cancellation or any other indication that any policy of insurance is no longer in full force or effect, or that the issuer of any policy of insurance is unwilling to perform its obligations thereunder. The Company has complied with all of its material obligations under each such insurance policy.

Section 3.17 Litigation. There are no suits, actions, proceedings, investigations, claims or orders (collectively, “Legal Proceedings”) pending or, to the Company’s Knowledge, threatened against the Company or any of the current or former Representatives of the Company in their respective capacity as Representatives of the Company, nor is the Company, or any such Representative in its capacity as a Representative of the Company, subject to any judgment, order or decree of any court, judicial authority or Governmental Authority (nor have any of them been subject to such a judgment, order or decree in the past five (5) years). Schedule 3.17 sets forth a complete and correct list and description of all Legal Proceedings made, filed or otherwise initiated in connection with the Company that are pending or have been resolved in the past two (2) years, and the resolution thereof.

Section 3.18 Compliance with Applicable Laws. The Company has complied in all material respects with all Laws applicable to it or to the operation of the Business and no facts or circumstances exist which would reasonably be expected to cause the Company to violate or fail to comply with any such Laws in the future. The Company has not received any written notice from any court, judicial authority or Governmental Authority asserting a failure, or possible failure, to comply with any such applicable Laws, the subject of which notice has not been conclusively resolved as required thereby or otherwise to the satisfaction of the party sending such notice. To the Company’s Knowledge, the Company is not under investigation with respect to violations of any such Laws.

Section 3.19 Regulatory Compliance. Schedule 3.19 contains a complete and correct list of all Licenses and Permits issued to or maintained by the Company as of the date hereof that are necessary to the conduct of the Business as the Business has been operated during the past twelve (12) months (collectively, the “Material Licenses and Permits”), along with the date of issuance and the current term thereof. All such Material Licenses and Permits are in full force and effect. The Company is in compliance in all material respects with the terms and conditions of the Material Licenses and Permits and has received no written notices that it is in violation of any of the terms or conditions of any Material Licenses and Permits or alleging the failure to maintain any Licenses and Permits. The Company has not received written notice that any of the Material Licenses and Permits will not be renewed, and, to the Company’s Knowledge, there are no proceedings pending to revoke or withdraw any such Material Licenses and Permits.

Section 3.20 Compliance with Environmental, Health and Safety Requirements. The Company has obtained and possesses all Licenses and Permits required for the conduct of the Business under Laws and contractual obligations concerning public health and safety, worker health and safety, pollution, or protection of the environment except where the failure to possess such Licenses and Permits would not have a Material Adverse Effect.

Section 3.21 Employee Benefit Plans. Schedule 3.21 sets forth a complete and correct list of: (a) each “employee benefit plan,” as defined in Section 3(3) of ERISA, and (b) each other benefit plan, policy, program, arrangement or agreement which is sponsored or maintained by the Company, or pursuant to which the Company is otherwise bound or otherwise has any Liability, for the benefit of its employees, former employees, consultants or other Representatives (each, an “Employee Plan”). To the Company’s Knowledge, each Employee Plan (a) has been operated and administered in compliance with its terms and all applicable requirements of ERISA, the Code and other applicable Laws and (b) is intended to be qualified under Section 401(a) of the Code and has received a favorable determination letter from the IRS and there have been no amendments or other developments since the date of such letter which would cause the loss of qualified status of such plan. Neither the Company nor any of its ERISA Affiliates maintains, sponsors or is required to contribute to, either currently or at any time in the past, or otherwise has any Liability with respect to, any Employee Plan that (a) is a “multiemployer plan” within the meaning of Section 3(37) of ERISA, (b) is subject to the funding requirements of Section 412-430 of the Code or Title IV of ERISA, or (c) provides for post-retirement medical, life insurance or other welfare-type benefits (other than as required by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code or under a similar state Law). There is no reasonable basis for the Company or any ERISA Affiliate of the Company to anticipate liability to the Pension Benefit Guaranty Corporation with respect to a pension plan as defined in Section 3(2) of ERISA (“Pension Plan”) and there has been no reportable event (within the meaning of Section 4043(c) of ERISA) or any event requiring disclosure under Section 4041(c) of ERISA with respect to such a Pension Plan. There has been no event or condition which presents a material risk of termination of any Pension Plan by the Pension Benefit Guaranty Corporation, and no circumstances exist that constitute grounds under Section 4042 of ERISA entitling the Pension Benefit Guaranty Corporation to institute any such proceeding. The actuarial valuation of each Pension Plan for the most recent plan year accurately reflects its actuarial condition as of the first day of such plan year, and there has been no material change in such actuarial condition between such date and the Closing.

Section 3.22 Labor; Employment.

(a) The Company is not a party to any collective bargaining agreement and there is no organizational effort presently being made on behalf of any labor union with respect to the Business or the employees of the Company. The Company has complied in all material respects with all applicable Laws relating to the employment of labor. The Company has not incurred any Liability with respect to any employee, former employee or other Representative as the result of the transactions contemplated hereby. No charge or complaint of employment discrimination, unfair labor practice or other similar charge or complaint has been made against the

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Company during the last three (3) years, or is pending or, to the Knowledge of the Company, threatened, nor does the Company know of any basis for any such allegation, charge or complaint.

(b) Schedule 3.22 sets forth the following: a true, complete and accurate list of each employee, independent contractor, director or consultant of the Company, his or her dates of hire, position and title (if any), current rate of compensation (identifying bonuses, commissions, incentive compensation and equity-based compensation, if any, separately), and, in the case of an employee, whether such employee is hourly or salaried, whether such employee is exempt or non-exempt, whether such employee is absent from active employment and, if so, the date such employee became inactive, the reason for such inactive status, and, if applicable, the anticipated date of return to active employment. Except as set forth on Schedule 3.22, the Company does not have any unsatisfied Liability to any previously terminated Representative. The Company has disclosed all written employee handbooks, policies, programs and arrangements to the Buyer.

(c) No Representative or group of Representatives has informed the Company, either orally or in writing, of any plans to terminate their employment or relationship with the Company generally or as a result of the transactions contemplated hereby or otherwise.

(d) All Representatives of the Company are “employees at will” or otherwise employed such that the Company may lawfully terminate their employment at any time, with or without cause, without creating any material cause of action against the Company or otherwise giving rise to any Liability of the Company for wrongful discharge, Breach of contract or tort or any other similar cause at law or in equity. A true and correct copy of any form of non-competition, non-solicitation, proprietary rights or confidentiality agreement currently in force with any of the Representatives of the Company, and any material variances therefrom, has been delivered to Buyer.

Section 3.23 Books and Records. The Company has maintained its books and records in the Ordinary Course of Business, consistent with professional business standards and practices customary for its industry. The Company makes and keeps books, records and accounts which, in reasonable detail, accurately and fairly reflect actual bona fide transactions of the Company. The books of account and other records of the Company previously delivered to the Buyer have been maintained in accordance with sound business practice, applicable Law and accounting practices.

Section 3.24 Brokers. No broker, finder or agent is entitled to any brokerage fees, finder’s fees or commissions in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

Section 3.25 Banks. The names and locations of all banks or other financial institutions in which the Company has accounts or safe deposit boxes, and the names of all Persons authorized to draw thereon or to have access thereto is listed on Schedule 3.25. Further, Schedule 3.25 sets forth the following information with respect to each such financial institution: (a) the name of the financial institution, (b) the location of the financial institution, (c) the identity of all accounts or safe deposit boxes, by number, at such financial institution, and (d) a list of all authorized signatories on such accounts or safe deposit boxes.

Section 3.26 Customers. Schedule 3.26 sets forth a list of the customers of the Company showing the total sales by the Company to each customer during each of the fiscal years ended December 31, 2013 and 2014. Since the date of the Latest Balance Sheet, no such customer has terminated its relationship with the Company or materially reduced or changed the pricing, volume, timing or other terms of its business with the Company, and, to the Company’s Knowledge, no such customer has notified the Company that it intends to terminate or materially reduce or change the pricing, volume, timing or other terms of its business with the Company.

Section 3.27 Full Disclosure. This Agreement and the Other Documents and their respective Schedules and Exhibits delivered by or on behalf of the Company and the Sellers hereunder and thereunder are complete and correct in all material respects. No representation or warranty of the Company or the Sellers contained in this Agreement or in the Other Documents, and no written statement made by or on behalf of the Company or the Sellers to the Buyer pursuant to this Agreement or any of the Other Documents contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. There is no fact or circumstance which the Company or the Sellers have willfully not disclosed (i.e. actively hidden from Buyer) to the Buyer in writing which reasonably could be expected to have, give rise to, or form the Basis for a Material Adverse Effect.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS

The Sellers, severally and not jointly, hereby represent and warrant to the Buyer as follows:

Section 4.1 Authorization; Enforceability. The Sellers have the requisite power and authority to execute and deliver this Agreement and the Other Agreements to which the Sellers are parties, to perform their obligations under this Agreement and the Other Agreements to which the Sellers are parties, and to consummate the transactions contemplated by this Agreement and the Other Agreements to which the Sellers are parties. This Agreement has been duly executed and delivered by the Sellers, and the Other Agreements to which the Sellers are parties will be duly executed and delivered by the Sellers at the Closing, and, assuming the due

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authorization, execution and delivery by the other parties hereto and thereto, will constitute legal, valid and binding obligations of the Sellers enforceable in accordance with their respective terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

Section 4.2 Title to Shares. The Sellers are the holders of record and beneficial owner of the Shares and such Shares will, as of the Closing, be free and clear of any and all restrictions on transfer, Taxes or Liens (other than restrictions under the Securities Act or applicable state securities Law). The Sellers have the sole voting power and the sole power of disposition and sole power to agree to all matters set forth in this Agreement with respect to the Shares, with no limitations, qualifications or restrictions on such rights and powers, and the Sellers will not grant such rights and powers to any other Person prior to the Closing. There are no pending Legal Proceedings against any of the Sellers affecting its Shares or the right of any of the Sellers to execute, deliver and perform its obligations under this Agreement or the Other Agreements to which any of the Sellers is a party. Upon delivery of the certificate(s) representing the Shares held by the Sellers as of the Closing Date, duly endorsed in blank or accompanied by a duly executed stock power with respect to the Shares, good and marketable title to the Shares held by the Sellers will be sold, assigned, conveyed, transferred and delivered to the Buyer, free and clear of any and all restrictions on transfer, Taxes or Liens.

Section 4.3 No Consents. No Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority is required to be made or obtained by the Sellers in connection with the execution, delivery and performance of this Agreement by the Sellers.

Section 4.4 Litigation. There are no Legal Proceedings pending, or to the Sellers’ Knowledge threatened, against the Sellers, nor are any of the Sellers subject to any judgment, order or decree of any court, judicial authority or Governmental Authority that would seek to prevent any of the transactions contemplated by this Agreement and the Other Agreements.

Section 4.5 No Violation. Neither the execution and delivery of this Agreement or the Other Agreements to which each of the Sellers is a party, nor the performance by any of the Sellers of the transactions contemplated hereby or thereby, will (a) constitute a default under the Organizational Documents of any of the Sellers, (b) to the Sellers’ Knowledge, result in a default, give rise to any right of termination, cancellation or acceleration, or require any Consent under any of the terms, conditions or provisions of any material mortgage, loan, license, agreement, lease or other instrument or obligation to which any of the Sellers is a party, or (c) to the Sellers’ Knowledge, conflict with or violate any material Laws applicable to any of the Sellers or by which any of their Assets are bound.

Section 4.6 Foreign Person. None of the Sellers is a foreign person within the meaning of Section 1445 of the Code.

Section 4.7 Brokers. No broker, finder or agent is entitled to any brokerage fees, finder’s fees or commissions in connection with the transactions contemplated by this Agreement and the Other Agreements based upon arrangements made by or on behalf of Sellers.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Sellers as follows:

Section 5.1 Organization and Qualification. The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware.

Section 5.2 Authorization; Enforceability. The Buyer has the requisite corporate power and authority to execute and deliver this Agreement and the Other Agreements to which it is a party, to perform its obligations under this Agreement and the Other Agreements to which it is a party, and to consummate the transactions contemplated by this Agreement and the Other Agreements to which it is a party. This Agreement has been duly and validly executed and delivered by the Buyer, the Other Agreements to which the Buyer is a party will be duly executed and delivered by the Buyer at the Closing, and, assuming the due authorization, execution and delivery by the other parties hereto and thereto, will constitute legal, valid and binding obligations of the Buyer, enforceable in accordance with their terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

Section 5.3 No Consents. No Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority is required to be made or obtained by the Buyer in connection with the execution, delivery and performance of this Agreement by the Buyer.

Section 5.4 Litigation. There are no Legal Proceedings pending, or to the Buyer’s Knowledge threatened, against the Buyer, nor is the Buyer subject to any judgment, order or decree of any court, judicial authority or Governmental Authority that would seek to prevent, delay or burden any of the transactions contemplated by this Agreement.

Section 5.5 No Violation. Neither the execution and delivery of this Agreement or the Other Agreements to which it is a party, nor the performance by it of the transactions contemplated hereby or thereby will (a) constitute a default under the Organizational Documents of the Buyer, or (b) to the Buyer’s Knowledge, result in a default, give rise to any right of termination, cancellation or

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acceleration, or require any Consent under any of the terms, conditions or provisions of any material mortgage, loan, license, agreement, lease or other instrument or obligation to which the Buyer is a party, or (c) to the Buyer’s Knowledge, conflict with or violate any Laws applicable to the Buyer or by which any of its Assets is bound.

ARTICLE VI
CLOSING

Section 6.1 Time and Place. The Closing shall occur simultaneously with the execution of this Agreement and shall be effective as of 12:01 a.m. Eastern Time on the Closing Date.

Section 6.2 Deliveries by the Company and the Sellers. At the Closing, the Company and the Sellers shall deliver or cause to be delivered to the Buyer:

(a) Instruments of Transfer. Certificates representing the Shares, duly endorsed in blank or accompanied by duly executed stock powers;

(b) Corporate Documents. A copy of the Certificate of Incorporation of the Company certified by the Secretary of State of the State of Missouri as of a date not more than thirty (30) days prior to the Closing Date;

(c) Minute Books. All of the minute books, stock ledgers and similar corporate records, and corporate seal of the Company;

(d) Good Standing Certificate. A certificate of good standing with respect to the Company, issued by the Secretary of State of Missouri as of a date not more than thirty (30) days prior to the Closing Date;

(e) Board Resolutions. A copy of the resolutions of the Company’s board of directors and shareholders, certified by the secretary of the Company as having been duly and validly adopted and being in full force and affect, authorizing the execution and delivery of this Agreement and the Other Agreements to which the Company is a party and the performance by the Company of its obligations hereunder and thereunder;

(f) Payoff Letters. Payoff letters with respect to any outstanding Indebtedness of the Company duly executed by the lender(s) or agent, indicating that (a) upon payment of the applicable amounts specified in such payoff letter, all outstanding obligations of the Company arising under or related to such outstanding Indebtedness shall be repaid and extinguished in full and (b) that such lender(s) or agent shall release any Liens and other security interests in, and agree to deliver Uniform Commercial Code termination statements and such other documents or endorsements necessary to release of record its Liens and other security interest in, the Assets and properties of the Company;

(g) Consents. The Third Party Consents and Governmental Consents identified on Schedules 3.7(a) and (b);

(h) FIRPTA Affidavit. From each of the Sellers, a non-foreign affidavit, dated as of the Closing Date, sworn under penalty of perjury and in form and substance required under the Treasury Regulations issued pursuant to Section 1445 of the Code, stating that such Seller is not a “Foreign Person” as defined in Section 1445 of the Code;

(i) Board Resignations. Resignations from each member of the Company’s board of directors, with such resignations to be effective as of the Closing;

(j) Licenses and Permits. All Licenses and Permits identified on Schedule 3.19;

(k) Amendment of Lease. A fully executed amendment to the Lease set forth on Schedule 3.13, in form and substance approved by Buyer;

(l) MSA Administrators Agreement. Agreement with MSA Administrators in form and substance previously approved by Buyer; and

(m) Other Documents. Such other documents and instruments as the Buyer may reasonably request to consummate the transactions contemplated hereby.

Section 6.3 Deliveries by the Buyer. The Buyer will deliver or cause to be delivered to the Sellers:

(a) Purchase Price. Payment of the Purchase Price as provided in Section 2.1;

(b) Board Resolutions. A copy of the resolutions of the Buyer’s board of directors, certified by the secretary of the Buyer as having been duly and validly adopted and being in full force and affect, authorizing the execution and delivery of this Agreement and the Other Agreements to which the Buyer is a party and the performance by the Buyer of its obligations hereunder and thereunder;

(c) Employment Agreement. A copy of the Executive Employment Agreement with Michael D. Greco duly executed by Patriot Risk Services, Inc.; and

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(d) Other Documents. Such other documents and instruments as the Company or the Sellers, or their respective counsel, shall deem reasonably necessary to consummate the transactions contemplated hereby.

ARTICLE VII
POST CLOSING COVENANTS

Section 7.1 Tax Covenants.

(a) Pre-Closing Returns. Following the Closing, the Company shall prepare, or cause to be prepared and timely filed, all income Tax Returns that are required to be filed by, or with respect to, the Company for taxable periods ending on or before the Closing Date (“Sellers’ Returns”) and the Sellers shall pay all Taxes required to be paid with respect to such Sellers’ Returns. All such Sellers’ Returns shall be prepared, and all elections with respect to such Sellers’ Returns shall be made, in accordance with applicable Law. The Company shall submit each such Sellers’ Return for review and comment no later than forty-five (45) days before the due date for such Sellers’ Return. No later than twenty (20) days following the Sellers’ receipt of a Sellers’ Return, the Sellers shall notify the Company in writing of any dispute with respect to the manner in which such Sellers’ Return is prepared or the related Tax is calculated (a “Protest Notice”). If the Buyer and the Sellers are unable to resolve a dispute with respect to any such Sellers’ Return within a period of fifteen (15) days following the Buyer’s receipt of a Protest Notice, then any disputed items shall be resolved in accordance with the procedure for protests under Section 7.1(f).

(b) Straddle Period Returns. The Buyer shall prepare and timely file, or cause to be prepared or timely filed, (and shall provide the Sellers a copy of each such return as filed and evidence of the timely filing thereof) all Tax Returns (other than the Sellers’ Returns) that are required to be filed by, or with respect to, the Company that are not filed as of the Closing Date (“Buyer’s Returns”) and shall pay the Tax shown as due thereon. In the case of a Buyer’s Return that includes a Straddle Period (a “Straddle Period Return”), the Buyer shall submit each such Straddle Period Return to the Sellers for review and advice no later than thirty (30) days before the due date for such Straddle Period Return. No later than ten (10) days following the Sellers’s receipt of a Straddle Period Return, the Sellers shall notify the Buyer in writing of any dispute with respect to the manner in which such Straddle Period Return is prepared or the related Tax is calculated (a “Protest Notice”). If the Buyer and the Sellers are unable to resolve a dispute with respect to any such Straddle Period Return within a period of fifteen (15) days following the Buyer’s receipt of Protest Notice, then any disputed items shall be resolved in accordance with Section 7.1(f). All Straddle Period Returns shall be prepared, and all elections with respect to such Straddle Period Returns shall be made, in accordance with applicable Law. Within five (5) days after the later of (i) the Sellers’s approval of any Straddle Period Return, and (ii) the resolution of any dispute with respect to such Straddle Period Return, the Sellers shall pay to the Company the portion of the Taxes shown on such Straddle Period Return that constitute Pre-Closing Taxes. Nothing hereunder shall limit the right of the Company to file any Straddle Period Return on a timely basis.

(c) Cooperation and Records Retention. The Sellers and the Buyer shall (i) each provide the other, and the Buyer shall cause the Company to provide the Sellers, with such assistance as may be reasonably requested by any of them in connection with the preparation of any Tax Return, audit, or other examination by any Taxing Authority or judicial or administrative proceedings relating to Liability for Taxes, (ii) each retain and provide the other, and the Buyer shall cause the Company to retain and provide the Sellers with, any records or other information that may be relevant to such Tax Return, audit or examination, proceeding, or determination, and (iii) each provide the other with any final determination of any such audit or examination, proceeding, or determination that affects any amount required to be shown on any Tax Return of the other or the Company for any period. Without limiting the generality of the foregoing, the Buyer shall retain, and shall cause the Company to retain, and the Sellers shall retain, until the applicable statutes of limitations (including any extensions) have expired, copies of all Tax Returns, supporting work schedules, and other records or information that may be relevant to such returns for all Tax periods or portions thereof ending on or before the Closing Date and shall not destroy or otherwise dispose of any such records without first providing the other Party with a reasonable opportunity to review and copy the same. Each Party shall bear its own expenses in complying with the provisions of this Section 7.1(c).

(d) Tax Proceedings. The Sellers shall exercise, at their expense, control over the handling, disposition, and settlement of any governmental inquiry, examination, or proceeding (a “Tax Proceeding”) that could result in a determination with respect to Pre-Closing Taxes due or payable by the Sellers or the Buyer or the Company and for which the Sellers are liable or against which the Sellers are required to indemnify the Buyer or the Company pursuant hereto. The Sellers shall, however, promptly notify the Company or the Buyer if, in connection with any such Tax Proceeding, any Taxing Authority proposes in writing to make any assessment or adjustment with respect to Tax items of the Company or the Buyer, which assessments or adjustments could affect the Company or the Buyer following the Closing, and shall consult with the Company with respect to any such proposed assessment or adjustment and allow the Buyer to participate in the Tax Proceedings, to the extent reasonably necessary to protect the interests of the Buyer and the Company. The Buyer shall notify the Sellers in writing within fifteen (15) days after learning of any Tax Proceeding described in the first sentence of this Section 7.1(d); provided, however, that failure to provide such notice on a timely basis shall not limit the Sellers’ obligations hereunder, except to the extent that the Sellers are prejudiced thereby. The Buyer shall cooperate with the Sellers, as the Sellers may reasonably request, in any such Tax Proceeding. The Sellers shall keep the Buyer and the Company reasonably notified with respect to the conduct of any such Tax Proceeding, and may not settle any dispute arising thereunder without the written consent

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of the Buyer. Notwithstanding any provisions of this Agreement to the contrary, notices with respect to, and conduct and disposition of, any Tax Proceeding shall be governed by this Section 7.1(d).

(e) Indemnification. Following the Closing, the Sellers shall fully indemnify and hold the Buyer and the Company harmless against any and all Pre-Closing Taxes of the Company.

(f) Resolution of Protest. If the Buyer and the Sellers are unable to resolve any disagreement with respect to any Sellers’ Return or Straddle Period Return within fifteen (15) days following the delivery of a Protest Notice, then either the Buyer or the Sellers may refer the items in dispute to the Independent Accountant. In such case, the Buyer and the Sellers will jointly retain the Independent Accountant and direct it to render a written report resolving any and all items in dispute as set forth in the Protest Notice, not later than thirty (30) days after acceptance of its retention. The Sellers and the Buyer shall each submit to the Independent Accountant a binder setting forth their specific information, evidence and support for their respective positions as to all items in dispute. Neither the Sellers nor the Buyer shall have or conduct any communication, either written or oral, with the Independent Accountant without the other Party either being present or receiving a concurrent copy of any written communication. The Sellers and the Buyer, and their respective Representatives, shall cooperate fully with the Independent Accountant during its engagement and respond on a timely basis to all requests for information or access to documents or personnel made by the Independent Accountant, all with the intent to fairly and in good faith resolve all disputes relating to the Sellers’ Return or the Straddle Period Return, as applicable, as promptly as reasonably practicable. The findings and determinations of the Independent Accountant as set forth in its written report shall be deemed final, conclusive and binding upon the Parties. In resolving any disputed item, the Independent Accountant (A) may not assign a value to any particular item greater than the greatest value for such item claimed by either the Sellers or the Buyer, or less than the lowest value for such item claimed by either the Sellers or the Buyer, in each case as presented to the Independent Accountant, (B) shall be bound by the principles set forth in this Section 7.1, and (C) shall limit its review to matters specifically set forth in the Protest Notice. The fees and expenses of the Independent Accountant shall be borne by the Sellers, on the one hand, and the Buyer, on the other hand, based upon the percentage that the amount not awarded to the Sellers bears to the amount actually contested by the Sellers.

Section 7.2 Access to Books and Records. From and after the Closing, the Buyer shall, and shall cause the Company to, provide the Sellers and its agents with reasonable access (for the purpose of examining and copying), during normal business hours, to the books and records of the Company with respect to periods or occurrences prior to the Closing Date in connection with legitimate business purposes of the Sellers, expressed to the Company in writing.

Section 7.3 Non-Competition; Non-Solicitation; Confidentiality.

(a) Non-Disclosure of Confidential Information. None of the Restricted Parties shall, directly or indirectly, disclose or use at any time (and shall cause their respective Affiliates and Representatives not to use or disclose) any Confidential Information (whether or not such information is or was developed by any of the Restricted Parties), except to the extent that such disclosure or use is directly related to and required by the performance of the Restricted Party’s duties to the Company or the Buyer or as required by Law or as otherwise provided hereunder. The Restricted Parties each further agrees to take commercially reasonable steps, to the extent within its control, to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event any of the Restricted Parties is required by Law to disclose any Confidential Information, such Restricted Party shall promptly notify the Buyer in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and shall cooperate with the Buyer’s reasonable requests to preserve the confidentiality of such Confidential Information consistent with applicable Law. For purposes of this Agreement, “Confidential Information” means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as “confidential”), in any form or medium, that relates to the Business, the Company, or its suppliers, distributors, customers, independent contractors or other business relations. Confidential Information includes the following as they relate to the Company or the Business and, in each case, to the extent the Company or the Business obtains a commercial benefit from the secret nature of such information: internal business information (including information relating to strategic and staffing plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods and potential acquisition candidates); identities of, individual requirements of, and specific contractual arrangements with, the Company’s suppliers, distributors, customers, independent contractors or other business relations and their confidential information; trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; and inventions, innovations, improvements, developments, methods, designs, analyses, drawings, and reports. Notwithstanding the foregoing, Confidential Information does not include such information which: (A) at the time of disclosure is publicly available or thereafter becomes publicly available through no act or omission of a Restricted Party; (B) is thereafter disclosed or furnished to the Restricted Party by a third party who is not known by such Restricted Party to have acquired the information under an obligation of confidentiality; (C) is independently developed by the Restricted Party without the use of or reference to Confidential Information after the Closing Date; or (D) is disclosed by the Restricted Party (subject to compliance with the applicable provisions of this subsection (a)) under compulsion of applicable Law.

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(b) Non-Competition.

(i) Each Restricted Party is familiar with the trade secrets related to the Company and the Business, and with other Confidential Information concerning the Company and the Business, including all (A) inventions, technology and research and development related to the Business, (B) customers and clients and customer and client lists related to the Business, (C) products (including products under development) and services related to the Business and related costs and pricing structures and manufacturing techniques, (D) accounting and business methods and practices related to the Business and (E) similar and related confidential information and trade secrets related to the Business. Each Restricted Party acknowledges and agrees that the Company would be irreparably damaged if any of the Restricted Parties were to directly or indirectly provide services to any Person competing with the Business or engaging in a similar business and that such direct or indirect competition by any Restricted Party would result in a significant loss of goodwill by the Company.

(ii) In further consideration for the Buyer’s payment to Restricted Parties of the Purchase Price under this Agreement (in respect of which payment each of the Restricted Parties expressly acknowledges that it derives a substantial and direct benefit), and in order to protect the value of the Company and the Business acquired by the Buyer hereunder (including the goodwill inherent in the Company and the Business as of the date hereof), each Restricted Party hereby agrees that for a period of three (3) years commencing on the Closing Date (the “Non-Competition Period”), such Restricted Party shall not acquire or hold any economic or financial interest in, act as a partner, member, shareholder, or Representative of, render any services to, or otherwise operate or hold an interest in any Person (other than the Seller) having any location in any country in which the Business currently operates which entity, enterprise or other Person primarily engages in, or engages in the management or operation of any Person that primarily engages in any business that competes with the Business; provided, however, that nothing contained herein shall be construed to prohibit any Restricted Party from purchasing up to an aggregate of two percent (2%) of any class of the outstanding voting securities of any other Person whose securities are listed on a national securities exchange (but only if such investment is held on a purely passive basis).

(iii) Notwithstanding the foregoing, if a Restricted Party becomes an employee of the Company or the Buyer, the Non-Competition Period shall be the later of the date that is (A) three (3) years from the Closing Date or (B) one (1) year from the Restricted Party’s resignation or termination of employment.

(c) Non-Solicitation; Non-Disparagement. During the period commencing on the Closing Date and ending on the fifth (5th) anniversary of the Closing Date (the “Non-Solicitation Period”), none of the Restricted Parties shall, directly or indirectly, either individually or acting in concert with another Person or Persons:

(i) request, induce or attempt to influence any distributor, supplier or customer of goods or services of the Business to curtail, cancel or refrain from maintaining or increasing the amount or type of business such distributor, supplier or customer of goods or services is currently transacting, or may be transacting during the Non-Solicitation Period, with the Business or modify its pricing or other terms of sale with the Business;

(ii) except pursuant to a general solicitation to the public, solicit for employment or retention or hire, employ or retain any Person who is an employee of the Business during the Non-Solicitation Period;

(iii) influence or attempt to influence any Person who is an employee of the Business during the Non-Solicitation Period to terminate his or her employment with the Company or the Business; or

(iv) make any negative, derogatory or disparaging statements or communications regarding the Buyer, the Business, the Company, or their respective Affiliates or employees.

(d) Severability. Notwithstanding anything to the contrary in this Agreement, if at any time, in any judicial or arbitration proceeding, any of the restrictions stated in this Section 7.3 are found by a final order of a court of competent jurisdiction or arbitrator to be unreasonable or otherwise unenforceable under circumstances then existing, the Parties each agree that the period, scope or geographical area, as the case may be, shall be reduced to the extent necessary to enable the court to enforce the restrictions to the extent such provisions are allowable under applicable Law, giving effect to the agreement and intent of the Parties that the restrictions contained herein shall be effective to the fullest extent permissible. In the event of a Breach or violation by any Restricted Party of any of the provisions of this Section 7.3, the Non-Competition Period or Non-Solicitation Period, as the case may be, will be tolled for so long as such Restricted Party was in violation of such provision. Each Restricted Party agrees that the restrictions contained in this Agreement are reasonable in all respects and necessary to protect the Buyer’s interest in, and the value of, the Business.

(e) Specific Performance; Injunctive Relief. Each Restricted Party acknowledges and agrees that in the event of a Breach by any Restricted Party of any of the provisions of this Section 7.3, the Buyer would suffer irreparable harm, no adequate remedy at law would exist for the Buyer, and damages would be difficult to determine. Consequently, in the event of any such Breach, the Buyer or its successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of law or equity of competent jurisdiction for specific performance or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof, in each case without the requirement of posting a bond or proving actual damages.

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(f) Allocation of Purchase Price. The Parties agree that $50,000.00 of the Purchase Price shall be allocated to the covenants made by the Restricted Parties, collectively, in this Section 7.3.

Section 7.4 Preservation of Records. Subject to Section 7.1(c) hereof (relating to the preservation of Tax Records), the Sellers and the Buyer agree that each of them shall (and shall cause the Company to) preserve and keep the records held by them relating to the Business of the Company for a period of three (3) years from the Closing Date and shall make such records and personnel available to the other Parties as may be reasonably required by such Party in connection with, among other things, any insurance claims by, legal proceedings against or governmental investigations of the Sellers, the Company, or the Buyer, or any of their Affiliates, or in order to enable the Sellers, the Company or the Buyer to comply with their respective obligations under this Agreement and each Other Agreement.

Section 7.5 Use of Name. The Sellers hereby acknowledge and agree that upon the consummation of the transactions contemplated hereby, the Buyer and the Company shall have the sole right to the use of the name “Corporate Claims Management” or any service marks, trademarks, trade names, identifying symbols, logos, emblems, signs or insignia related thereto or containing or comprising the foregoing, including any name or mark confusingly similar thereto (collectively, the “Company Marks”). The Sellers shall not, and shall cause their respective Affiliates not to, use such names or any variation or simulation thereof or any of the Company Marks. The Sellers shall, and shall cause their respective Affiliates to, immediately following the Closing, cease to hold themselves out as stockholders or Affiliates of the Company or any of its Affiliates.

Section 7.6 Post-Closing Matters. Each of the Parties shall satisfy the requirements set forth on Schedule 7.6 on or before the date specified for such requirement or such later date to be mutually agreed to by the parties.

Section 7.7 General. In case at any time after the Closing any further actions are necessary or desirable to carry out the purposes of this Agreement, each of the Parties shall take such further actions (including the execution and delivery of such further instruments and documents) as any other Party may reasonably request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Article VIII below). The Sellers acknowledge and agree that from and after the Closing, the Buyer will be entitled to all documents, books and records (including Tax records), agreements, and financial data of any sort relating to the Company.

ARTICLE VIII
INDEMNIFICATION

Section 8.1 Survival of the Company’s and the Sellers’ Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Company and the Sellers contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of eighteen (18) months after the Closing Date; provided, however, that the representations and warranties set forth in in Section 3.1 (Organization and Qualification), Section 3.2 (Authorization; Enforceability), Section 3.3 (Organizational Documents), Section 3.4 (Capitalization), Section 3.11 (Taxes), Section 3.20 (Compliance with Environmental, Health and Safety Requirements), Section 3.21 (Employee Benefit Plans), Section 3.26 (Brokers), Section 4.1 (Authorization; Enforceability), Section 4.2 (Title to Shares), and Section 4.7 (Brokers) (each of the foregoing, a “Fundamental Representation”) shall survive the Closing until the expiration of the applicable statute of limitations plus sixty (60) days. All Post-Closing Covenants of the Company and the Sellers will survive the Closing in accordance with their terms. If the Buyer provides notice of a claim in accordance with the terms of this Agreement prior to the end of the applicable period of survival set forth in this Section 8.1, then the Liability for such claim will continue until such claim is fully resolved.

Section 8.2 Survival of the Buyer’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Buyer contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of eighteen (18) months after the Closing Date; provided, however, that the representations and warranties in Section 5.1 (Organization and Qualification) and Section 5.2 (Authorization; Enforceability) shall survive until the expiration of the applicable statute of limitations plus sixty (60) days. All Post-Closing Covenants of the Buyer will survive the Closing in accordance with their terms or, if no term is stated, then a period of twelve (12) months. If the Seller provides notice of a claim in accordance with the terms of this Agreement prior to the end of the applicable period of survival set forth in this Section 8.2, then the Liability for such claim will continue until such claim is fully resolved.

Section 8.3 Indemnification by the Sellers. Subject to the terms, conditions and limitations set forth in this Article VIII, the Sellers severally (and not jointly) shall indemnify, defend and hold harmless the Buyer Indemnified Parties from and against, and shall promptly pay or reimburse each Buyer Indemnified Party for, any and all Losses sustained or incurred by any Buyer Indemnified Party resulting from:

(a) any Breach of a representation or warranty made by the Company or any Seller in this Agreement or any Other Agreement;

(b) any Breach of a Post-Closing Covenant made by any Seller;

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(c) any claim or assertion in respect of Indebtedness or broker’s or agent’s fees or expenses arising out of the transactions contemplated by this Agreement by a Person claiming to have been engaged by such Sellers or its Affiliates; or

(d) any Pre-Closing Taxes.

Provided, however, that (A) Sellers shall not have any obligation to indemnify Buyer from and against any Losses under Section 8.3(a) or (b) above until Buyer has suffered Losses by reason of all such breaches in excess of a Fifty Thousand Dollars ($50,000) aggregate deductible (after which point Sellers will be obligated only to indemnify Buyer from and against further such Losses) and (B) there will be a cap on the obligation of Sellers to indemnify Buyer from and against Losses under Section 8.3(a) or (b) above and with respect to any breach of this Agreement equal to the aggregate of Three Million Dollars ($3,000,000.00). The foregoing limitations are not applicable to Losses based on fraud and Losses under Section 3.10(b). The foregoing limitations, solely in connection with respect to Losses incurred due to any breach of Section 7.3, are not applicable to the Restricted Parties.

Section 8.4 Indemnification by the Buyer. Subject to the terms, conditions and limitations set forth in this Article VIII, from and after the Closing, the Buyer shall indemnify, defend and hold harmless the Seller Indemnified Parties from and against any and all Losses sustained or incurred by any Seller Indemnified Party resulting from:

(a) any Breach of a representation or warranty made by the Buyer in this Agreement;

(b) any Breach of a Post-Closing Covenant made by the Buyer in this Agreement; or

(c) any additional federal or state tax liability solely and directly related to Buyer’s 338(h)(10) election up to a maximum of Two Hundred Thousand Dollars ($200,000);

(d) any claim or assertion for broker’s or finder’s fees or expenses arising out of the transactions contemplated by this Agreement by any Person claiming to have been engaged by either the Buyer or any of its Affiliates.

Section 8.5 Indemnification Procedure for Third Party Claims.

(a) Other than a claim involving Taxes which procedure is set forth in, and which shall be governed exclusively by, Section 7.1, in the event that subsequent to the Closing, any Person that is or may be entitled to indemnification under this Agreement (an “Indemnified Party”) receives notice of the assertion of any claim, issuance of any order or the commencement of any action or proceeding by any Person who is not a Party or an Affiliate of a Party, including, without limitation, any domestic or foreign court or Governmental Authority (a “Third Party Claim”), against such Indemnified Party and for which a Party is or may be required to provide indemnification under this Agreement (an “Indemnifying Party”), such Indemnified Party shall give written notice thereof, together with a statement of any available information regarding such Third Party Claim to such Indemnifying Party, within thirty (30) days after learning of such Third Party Claim; provided, however, that failure to give such written notice within any particular time period shall not adversely affect the Indemnified Party’s right to indemnification except, and to the extent that, the Indemnifying Party can show that the failure to give such notification on a timely basis directly and adversely affected the Indemnifying Party’s ability to defend such Third Party Claim. The Indemnifying Party shall have the right upon written notice to the Indemnified Party (the “Defense Notice”), within fifteen (15) days after receipt from the Indemnified Party of notice of such Third Party Claim, to conduct, at its expense, the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party. In the event that the Indemnifying Party does not elect to conduct the defense of the subject Third Party Claim, then the Indemnified Party may conduct the defense of the subject Third Party Claim and the Indemnifying Party will cooperate with and make available to the Indemnified Party such assistance and materials as may be reasonably requested by the Indemnified Party. In the event that the Indemnifying Party does elect to conduct the defense of the subject Third Party Claim, then the Indemnified Party will cooperate with and make available to the Indemnifying Party such assistance and materials as may be reasonably requested by it, and the Indemnified Party shall have the right to participate in the defense assisted by counsel of its own choosing. Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter into any settlement of any Third Party Claim or cease to defend against such Third Party Claim, if pursuant to or as a result of such settlement or cessation, (i) injunctive or other equitable relief would be imposed against the Indemnified Party, or (ii) each claimant or plaintiff in such Third Party Claim has not given to the Indemnified Party an unconditional release from all Liability with respect to such Third Party Claim.

(b) Notwithstanding anything contained in Section 8.5(a) to the contrary, the Indemnifying Party under this Section 8.5 shall not be entitled to control, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of any Third Party Claim if any of the following conditions are not satisfied:

(i) the Indemnifying Party shall acknowledge in writing that it shall be fully responsible for all Losses relating to such proceeding, which acknowledgement is deemed given by the Sellers in its capacity as representative to the Sellers;

(ii) the Indemnifying Party must diligently defend such proceeding;

(iii) the Indemnifying Party must furnish the Indemnified Party with evidence that the financial resources of the Indemnifying Party, in the Indemnified Party’s reasonable judgment, are and will be sufficient (when considering Losses in respect of all other outstanding claims) to satisfy any Losses relating to such proceeding;

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(iv) such proceeding shall not involve criminal actions or allegations of criminal conduct by the Indemnifying Party or Indemnified Party, and shall not involve claims for specific performance or other equitable relief; and

(v) there does not exist, in the Indemnified Party’s good faith judgment, based on the advice of outside legal counsel, a conflict of interest which, under applicable principles of legal ethics, could reasonably be expected to prohibit a single legal counsel from representing both the Indemnified Party and the Indemnifying Party in such proceeding.

Section 8.6 Treatment of Indemnification. All indemnification payments made under this Agreement shall be treated by all Parties as an adjustment to the Purchase Price.

Section 8.7 Impact of Insurance on Indemnification Obligations.

(a) Notwithstanding any other provision of this Article VIII or of this Agreement to the contrary, the amount of any Losses for which indemnification is provided under this Agreement shall be net of any amounts actually recovered by the Indemnified Party or its Affiliates under insurance policies maintained by the Company or the Indemnified Party or its Affiliates and applicable to such Losses.  Buyer and Sellers (and their respective Affiliates) will (and will cause the Company to) use their commercially reasonably efforts to seek full recovery under the insurance policies referenced in the foregoing sentence. To the extent that any insurance payment is actually recovered by an Indemnified Party or its Affiliates after the related indemnification payment has been made pursuant to this Agreement, the Indemnified Party will pay over to the Indemnifying Party the amounts of such insurance payments promptly after they are actually recovered. Buyer and Sellers will (and will cause their Affiliates and the Company to) cause the respective insurance policies to contain a provision waiving the applicable insurance company’s rights of subrogation as against the Indemnifying Party and its Affiliates with respect to matters covered by this Section 8.7.

(b) With respect to those policies of insurance that are written on a claims made basis (as opposed to an occurrence basis) (e.g. E & O Coverage) and carried by the Company immediately prior to the Closing Date, Buyer covenants and agrees that from and after the Closing Date  to cause the Company to continuously maintain in full force and effect for a period of at least seven (7) years after the Closing Date equivalent or better coverage (as to risks/matters insured), with policy limits equal to or greater than those maintained by the Company immediately prior to the Closing Date and benefitting Sellers.

Section 8.8 Right of Set-off. Notwithstanding anything to the contrary in this Agreement, and without prejudice to any other right or remedy it has or may have, Buyer shall have the right to set off or recoup any liability it owes to Seller against any absolute and mature liability for which Seller is liable to Buyer, whether either liability arises under this Agreement.

Section 8.9 No Right of Contribution. Each Seller hereby waives, and acknowledges and agrees that such Seller shall not exercise or assert (or attempt to exercise or assert), any right of contribution, right of indemnity or other right or remedy against the Company in connection with any indemnification obligation or any other Liability to which such Seller may become subject under this Agreement or any of the Other Agreements.

ARTICLE IX
DEFINITIONS

Definitions. As used in this Agreement,

“Add-On Services Measurement Period” shall mean the period beginning July 23, 2015 through July 23, 2016.

“Add-On Services Revenue Threshold” shall mean $2,500,000.

“Add-On Services” shall mean non-TPA services provided by Buyer and Buyer’s Affiliates, including but not limited to bill review, nurse case management, special investigations, and transportation and translation services.

“Add-On Services Target Earn-Out” shall mean $500,000.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by, or under direct or indirect common Control with, such Person. For purposes of this definition, a Person shall be deemed to Control another Person if such Person owns or Controls, directly or indirectly, more than twenty five percent (25%) of the voting Equity Interests of the other Person. “Control,” “Controlled” or “Controlling” means the ability of a Person (collectively or with its Affiliates) directly or indirectly to direct the use of, disposition of and access to the property of another Person.

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

“Assets” of any Person means all assets and properties of any kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether accrued, contingent, fixed or otherwise, and wherever located), including the good will related thereto, operated, owned or leased by such Person.

“Basis” means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could form the basis for any specified consequence.

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“Breach” means (a) the violation of any covenant, agreement, Law, right, obligation, engagement or duty, whether by commission or omission, (b) the failure to perform, refusal to perform, or prevention or hindrance of performance of, any covenant, agreement, obligation, engagement or duty, (c) the performance of any act which by covenant, agreement or duty must not be performed, (d) any breach, inaccuracy or misstatement in any representation or warranty, or (e) any event which, with the passage of time or provision of notice, would constitute any of the above.

“Business” means the business of third-party workers’ compensation, liability and property claims administration for self-insured clients and such other business as the Company is engaged in as of the Closing Date.

“Business Day” means any day other than a Saturday, Sunday or other day on which the banks in New York City, New York are permitted or required by applicable Law to close.

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

“Buyer Indemnified Parties” means the Buyer, the Company and their respective Representatives, successors and assigns.

“Buyer’s Knowledge” or “Knowledge of the Buyer” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known to Buyer.

“Cash on Hand” means all cash and cash equivalents, calculated as of 12:01 a.m., Eastern Time, on the date of calculation, determined in accordance with GAAP.

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

“Company’s Knowledge” or “Knowledge of the Company” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known by Michael D. Greco or Ruth A. Greco.

“Consent” means any approval, consent, ratification, waiver, notice or other authorization.

“Contract” means any written or oral agreement, note, guarantee, mortgage, indenture, lease, deed of trust, license, plan, instrument or other contract or legally binding arrangement or commitment.

“Core TPA Business” shall mean third party administrator (“TPA”) services provided by the Company.

“Core TPA Measurement Period” shall mean the period from the Closing Date through April 24, 2016.

“Core TPA Revenue Threshold” shall mean $6,500,000.

“Core TPA Target Earn-Out” shall mean $500,000.

“Equity Interests” means (a) any partnership interests, (b) any membership interests or units, (c) any shares of capital stock, (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, (e) any subscriptions, calls, warrants, options, or commitments of any kind or character relating to, or entitling any Person or entity to purchase or otherwise acquire membership interests or units, capital stock, or any other equity securities, (f) any securities convertible into or exercisable or exchangeable for partnership interests, membership interests or units, capital stock, or any other equity securities, or (g) any other interest classified as an equity security of a Person.

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

“ERISA Affiliate” means any Person that is included in a controlled group of companies within which the Company is also included, as provided in Section 414(b) of the Code; or which is a trade or business under common control with the Company, as provided in Section 414(c) of the Code; or which constitutes a member of an affiliated service group within which the Company is also included, as provided in Section 414(m) of the Code; or which is required to be aggregated with the Company pursuant to regulations issued under Section 414(o) of the Code.

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

“General Enforceability Exceptions” means those exceptions to enforceability due to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally, and general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity).

“Governmental Authority” means the United States or any state, provincial, county, municipal, city, local or foreign government, or any instrumentality, division, subdivision, department, agency or authority of any thereof having competent jurisdiction over any of the Company, the Buyer or the transactions contemplated by this Agreement, as applicable.

“Indebtedness” means, with respect to any Person, all Liabilities in respect of: (a) borrowed money; (b) indebtedness evidenced by bonds, notes, debentures or similar instruments (c) capitalized lease obligations (excluding the Lease on the building currently occupied by the Company and any leases for normal and customary office equipment); (d) the deferred purchase price of assets, services or securities (other than ordinary trade accounts payable); (e) conditional sale or other title retention agreements; (f) the factoring or discounting of accounts receivable; (g) swap or hedging agreements or arrangements, (h) reimbursement obligations,

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whether contingent or matured, with respect to letters of credit, bankers’ acceptances, bank overdrafts, surety bonds, other financial guarantees and interest rate protection agreements (without duplication of other indebtedness supported or guaranteed thereby); (i) interest, premium, penalties and other amounts owing in respect of the items described in the foregoing clauses (a) through (h) after giving effect to the Closing, (j) all Indebtedness of the types referred to in clauses (a) through (b) guaranteed in any manner by such Person, whether or not any of the foregoing would appear on a consolidated balance sheet prepared in accordance with GAAP; (k) any unfunded pension liabilities; and (l) any so-called “change of control” payments.

“Intellectual Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, designs, shapes, configurations, slogans, trade names, corporate names, Internet domain names, and rights in telephone numbers, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, recipes, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including source code, executable code, data, databases, and related documentation), (g) all advertising and promotional materials, (h) all other proprietary rights, and (i) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).

“Law” means each provision of any currently implemented federal, state, local or foreign law, statute, ordinance, order, code, rule or regulation, promulgated or issued by any Governmental Authority.

“Lease” means (a) any lease, sublease, license, concession or other Contract relating to the occupancy of any improved space on any Real Property, (b) any long-term Contract to lease Real Property in which most of the rights and benefits comprising ownership of the Real Property, if any, are transferred to the tenant for the term thereof, (c) any Contract, license, or right to use pertaining to the possession or use of any Tangible Personal Property, in each case, together with all amendments, extensions, renewals, modifications, alterations, guaranties and other changes thereto, and including the right to all security deposits and other amounts and instruments deposited thereunder.

“Liability” means any liability or obligation of whatever kind or nature (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due), including without limitation any liability for Taxes.

“Licenses and Permits” means any licenses, permits, certificates, certifications, privileges, immunities, notifications, exemptions, classifications, registrations, easements, franchises, approvals, authorizations, orders and other similar rights (or any waivers of the foregoing) issued by any Governmental Authority, and all pending applications therefor or renewals thereof.

“Lien” means any mortgage, pledge, hypothecation, hypothec, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting trust agreement, proxy, interest, equity, option, lien, preemptive right, right of first offer or refusal, charge or other restrictions or limitations of any nature whatsoever, other than (a) restrictions on the offer and sale of securities under federal and state securities Laws and (b) any Permitted Liens. “Permitted Liens” means collectively, (x) Liens for Taxes not yet payable or the validity of which are being contested in good faith by appropriate proceedings and for which adequate reserves are reflected in the Latest Balance Sheet; (y) Liens arising in connection with worker’s compensation, unemployment insurance, old age pensions and social security benefits which are not overdue or are being contested in good faith by appropriate proceedings and for which provision for the payment of such Liens has been reflected in the Latest Balance Sheet; and (z) Liens arising by operation of law on insurance policies and proceeds thereof to secure premiums thereunder.

“Loss” or “Losses” means, with respect to any Person, all Liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, Taxes, fines, penalties, damages (including punitive, special and consequential damages), lost profits, diminution in value (based on a multiple of earnings or otherwise), costs and expenses (including reasonable attorneys’ fees) sustained or incurred by such Person.

“Material Adverse Effect” or “Material Adverse Change” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, is materially adverse to the business, financial condition, results of operations or prospects (including the achievement or the ability to achieve forecasts of revenue or earnings) of the Company or the Business. For the avoidance of doubt, by way of illustration and not limitation, a “Material Adverse Effect” or “Material Adverse Change” shall include any matter or matters that, alone or in the aggregate, is or are likely to, or could reasonably be expected to, result in Losses to the Company in excess of ten percent (10%) of the Purchase Price, or that a reasonable investor would consider as significantly and adversely affecting its investment decision with respect to the transactions contemplated herein.

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“Ordinary Course of Business” means, in respect of any Person, the ordinary course of such Person’s business, as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in this Agreement or any Other Agreement.

“Organizational Documents” means (a) with respect to a corporation, the certificate or articles of incorporation and bylaws; (b) with respect to any other entity, any charter or similar document adopted or filed in connection with the creation, formation or organization of such entity; and (c) any amendment to any of the foregoing.

“Other Agreements” means each agreement, document, certificate and instrument being delivered pursuant to this Agreement, including, without limitation, the documents and agreements to be delivered by the Parties pursuant to Article VI hereof.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or Governmental Authority, in each case including, without limitation, such Person’s successors and permitted assigns (or, in the case of a Governmental Authority, Persons succeeding to the relevant function of such Governmental Authority).

“Post-Closing Covenant” means any covenant, promise, commitment or other obligation (or any portion thereof) made or undertaken by any Party, in this Agreement or any Other Agreement, to the extent performance or fulfillment thereof is required by its terms to be accomplished after the Closing.

“Pre-Closing Taxes” shall mean any Taxes attributable to any taxable period ending on or before the Closing Date and, with respect to any Straddle Period, the portion of such period that ends on and includes the Closing Date. In the case of any Taxes that are imposed on a periodic basis and are payable for a Straddle Period, the portion of such Tax that constitutes Pre-Closing Taxes shall (a) in the case of any Taxes other than Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period that precedes and includes the Closing Date and the denominator of which is the number of days in the entire Tax period, and (b) in the case of any Tax based upon or related to income or receipts, be deemed equal to the amount which would be payable if the relevant Tax period ended on the Closing Date. Any credits relating to a Straddle Period shall be taken into account as though the relevant Tax period ended on the Closing Date.

“Real Property” means all parcels and tracts of land, together with all buildings, structures, fixtures and improvements located thereon (including those under construction), and all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of such land, including all easements appurtenant to and for the benefit of such land, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.

“Representative” means, with respect to any Person, any director, officer, principal, or employee of such Person.

“Restricted Party” means Michael D. Greco and Ruth A. Greco.

“Securities Act” means the Securities Act of 1933, as amended.

“Seller Indemnified Parties” means the Sellers and their respective Representatives, successors and permitted assigns.

“Sellers’ Knowledge” or “Knowledge of the Sellers” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known or would reasonably be expected to be known to the Sellers after due inquiry and reasonable investigation.

“Straddle Period” means any taxable period that includes the Closing Date and ends after the Closing Date.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (b) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose, a Person or Persons owns a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be or control any managing director or general partner of such business entity (other than a corporation); and the term “Subsidiary” shall include all Subsidiaries of such Subsidiary.

“Tax” or “Taxes” means (a) any U.S. federal, state, local, or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value-added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being a member of a consolidated, combined, unitary or aggregate group for

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any Tax period, and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) as a result of being a transferee or successor to any person or as a result of any express or implied obligation to indemnify any other person or payable pursuant to any tax sharing agreement or any other contract relating to the sharing or payment of any such Tax.

“Tax Returns” means any return, declaration, report, schedule, notice, form, claim for refund, or information return or statement (including any attachment thereto and any amendment thereof) filed with or submitted to, or required to be filed with or submitted to, any Taxing Authority.

“Taxing Authority” means any governmental authority, domestic or foreign, having jurisdiction over the assessment, determination, collection, or other imposition of any Taxes.

“Treasury Regulation” means the regulations of the U.S. Department of the Treasury promulgated under the Code, as such Treasury Regulations may be amended from time to time. Any reference herein to a particular Treasury Regulation means, where appropriate, the corresponding successor provision.

ARTICLE X
MISCELLANEOUS

Section 10.1 Notices, Consents, etc. Any notices, consents or other communications required to be sent or given hereunder by any of the Parties shall in every case be in writing and shall be deemed properly served if and when (a) delivered by hand, (b) transmitted by facsimile, e-mail or other means of electronic transmission, or (c) delivered by Federal Express or other express overnight delivery service, or (d) sent by registered or certified mail, return receipt requested, to the Parties at the addresses as set forth below or at such other addresses as may be furnished in writing:

If to the Sellers:	Michael and Ruth Greco 426 Pine Bend Drive Wildwood, MO 63005
If to the Buyer or Company:	Patriot Risk Services, Inc. 401 East Las Olas Boulevard, Suite 1650 Fort Lauderdale, Florida 33301 Attn: Christopher A. Pesch, General Counsel Phone: 954-670-2941 Email: cpesch@patnat.com

Date of service of such notice shall be (i) the date such notice is delivered by hand, facsimile, e-mail or other form of electronic transmission, (ii) one Business Day following the delivery by express overnight delivery service, or (iii) three (3) days after the date of mailing if sent by certified or registered mail.

Section 10.2 Severability. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of any other provision. Upon such determination that any term or other provision is unenforceable or invalid, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a legally acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

Section 10.3 Successors; Assignment. This Agreement will be binding upon, and inure to the benefit of, the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by the Sellers without the prior written consent of the Buyer or by the Buyer without the prior written consent of Sellers; provided, however, that the Buyer may assign this Agreement in whole or in part to any of its Affiliates or to any Person which becomes a successor in interest (by purchase of assets or equity, or by merger or otherwise) to all or any portion of the Buyer, its Assets or its Subsidiaries, and the Buyer may assign its rights under this Agreement and the Other Agreements to its financing sources.

Section 10.4 Counterparts; Facsimile Signatures. This Agreement may be executed simultaneously in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of e-mail, facsimile or other means of electronic transmission, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

Section 10.5 Expenses. Except as otherwise provided in this Agreement, each of the Sellers, the Company and the Buyer shall bear and pay for all of its own costs, fees and expenses (including legal, accounting, investment banking, broker’s, finder’s and other professional or advisory fees and expenses) incurred or to be incurred by it, in each case, in negotiating and preparing this Agreement and the Other Agreements and in closing and carrying out the transactions contemplated hereby and thereby.

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Section 10.6 Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than the State of Delaware.

Section 10.7 Table of Contents and Headings. The table of contents and section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation of any of the provisions of this Agreement.

Section 10.8 Entire Agreement. This Agreement, the Recitals, the Schedules and the Exhibits attached hereto and the Other Agreements (all of which shall be deemed incorporated in this Agreement and made a part hereof) set forth the entire understanding of the Parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements and representations and shall not be modified or affected by any prior offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof. This Agreement may be modified only by subsequent instruments signed by the Parties hereto.

Section 10.9 Third Parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any Person, other than the Parties to this Agreement, the Buyer Indemnified Parties or the Seller Indemnified Parties and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

Section 10.10 Disclosure Generally. All Schedules attached hereto are incorporated herein and expressly made a part of this Agreement as though completely set forth herein. All references to this Agreement herein or in any of the Schedules shall be deemed to refer to this entire Agreement, including all Schedules. Information furnished in any particular Schedule shall not be deemed to be included in all other Schedules in which the information is required to be included unless specifically designated with a cross-reference.

Section 10.11 Interpretive Matters. Unless the context otherwise requires, (a) all references to Articles, Sections, Schedules or Exhibits shall mean and refer to Articles, Sections, Schedules or Exhibits in this Agreement; (b) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP; (c) words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and neuter; (d) the term “including” shall mean “including without limitation” (i.e., by way of example and not by way of limitation); (e) all references to statutes and related regulations shall include all amendments of the same and any successor or replacement statutes and regulations; (f) references to “hereof”, “herein”, “hereby” and similar terms shall refer to this entire Agreement (including the Schedules and Exhibits hereto); (g) references to “records” shall refer to all information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form; (h) “or” is used in the inclusive sense of “and/or,” unless otherwise specified; and (i) whenever this Agreement refers to a number of days, such number shall refer to calendar days, unless such reference is specifically to “Business Days.” The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has Breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) that the Party has not Breached shall not detract from or mitigate the fact that the Party is in Breach of such representation, warranty or covenant.

Section 10.12 Construction. Each of the Parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted it is of no application and is hereby expressly waived by the Parties hereto.

Section 10.13 Submission to Jurisdiction. EACH OF THE PARTIES SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN FORT LAUDERDALE, FLORIDA IN ANY ACTION OR PROCEEDING ARISING OUT OF, OR RELATING TO, THIS AGREEMENT, AGREES THAT ALL CLAIMS IN RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND AGREES NOT TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF, OR RELATING TO, THIS AGREEMENT IN ANY OTHER COURT. EACH OF THE PARTIES WAIVES ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT THERETO. EACH PARTY AGREES THAT SERVICE OF SUMMONS AND COMPLAINT OR ANY OTHER PROCESS THAT MIGHT BE SERVED IN ANY ACTION OR PROCEEDING MAY BE MADE ON SUCH PARTY BY SENDING OR DELIVERING A COPY OF THE PROCESS TO THE PARTY TO BE SERVED AT THE ADDRESS OF THE PARTY AND IN THE MANNER PROVIDED FOR THE GIVING OF NOTICES IN SECTION 10.1. NOTHING IN THIS SECTION, HOWEVER, SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR

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PROCEEDING SO BROUGHT SHALL BE CONCLUSIVE AND MAY BE ENFORCED BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

Section 10.14 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY IRREVOCABLY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION WITH THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.14 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 10.15 Press Releases and Communications. Following the Closing, Buyer may issue a press release or public announcement regarding this Agreement or the transactions contemplated herein; provided, that any such press release or public announcement shall not describe, include or otherwise refer to the economic terms of the transactions contemplated by this Agreement.

Section 10.16 Sellers’ Release.

(a) Each of the Sellers hereby releases and forever discharges each of the Buyer, the Company, their respective Affiliates, and the directors, officers, members, managers, partners, employees, agents and representatives of each of them (collectively, the “Releasees”), from any and all claims, allegations, Liens, lawsuits, adverse consequences, damages, losses, amounts paid in settlement, Indebtedness, deficiencies, diminution in value, disbursements, obligations, costs or demands and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity, whether liquidated or unliquidated, fixed or contingent, direct or indirect or derivative, asserted or unasserted, foreseen or unforeseen, matured or unmatured, anticipated or unanticipated, that each of the Sellers now has, has ever had or may hereafter have against the respective Releasees arising prior to the Closing Date or on account of or arising out of any matter, cause or event occurring prior to the Closing Date, whether pursuant to contract or otherwise, and whether or not relating to claims pending on, or asserted after, the Closing Date, including without limitation claims by any Seller related to such Seller’s share of the proceeds received in connection with this Agreement.

(b) Each of the Sellers understands, acknowledges and agrees that the releases set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any actions, suits, proceedings, demands, assessments, judgments, settlements and compromises which may be instituted, prosecuted or attempted in breach of the provisions of such release. Each of the Sellers agrees that no fact, event, circumstance, evidence or transaction that could now be asserted or that may hereafter be discovered shall affect in any manner the final and unconditional nature of the releases set forth above. Each of the Sellers represents and warrants that it is the sole and lawful owner of all right, title and interest in and to all of the claims released hereby, and has not heretofore voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any Person any such claim or any portion thereof.

(c) Each of the Sellers hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim or demand, or commencing, instituting or causing to be commenced, any actions, suits, proceedings, demands, assessments, judgments, settlements and compromises of any kind against any Releasee, based upon any matter purported to be released hereby.

[Signature Page Follows]

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

Patriot Risk Services, Inc.
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Secretary
Corporate Claims Management, Inc.
By:	/s/ Michael D. Greco
Name:	Michael D. Greco
Title:	President
SELLERS:
Michael D. Greco and Ruth A. Greco, jointly
/s/ Michael D. Greco
Michael D. Greco
/s/ Ruth A. Greco
Ruth A. Greco

[Signature Page to CCMI Stock Purchase Agreement]

* All Schedules and exhibits to this Exhibit 2.7 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Schedules include a list of foreign jurisdictions, officers and directors, capitalization table, financial statements, list of intellectual property, description of employee benefit programs, list of bank accounts, wiring instructions and customer lists. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-2.8

Exhibit 2.8

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT

(Hospitality Supportive Systems, LLC)

May 14, 2015

This Amendment No. 1 (this “Amendment”) to the Asset Purchase Agreement dated as of April 1, 2015, by and among TriGen Insurance Solutions, Inc., a Delaware corporation (the “Buyer”), Hospitality Supportive Systems, LLC, a Pennsylvania limited liability company (the “Seller”) and the sole shareholder of the Seller (the “Existing Agreement”) shall be effective as of May 14, 2015 (the “Effective Date”). Each of the foregoing parties may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Existing Agreement.

1. Earn-out Acceleration.The Maximum Base Earn-out Payment ($4,045,000), as described in Section 1.4.1(a) of the Existing Agreement, shall be accelerated and paid in full as of the Effective Date hereof. As of the Effective Date, the payment made pursuant to this Section 1 shall be considered additional Purchase Price and shall terminate Buyer’s obligation under the Existing Agreement to pay any additional consideration for the Purchased Assets. No additional Earn-out will be paid to Seller.

2. Amendments to the Existing Agreement.   As of the Effective Date, the Existing Agreement is hereby amended or modified as follows:

a) Section 1.4.1(a) shall be deleted in its entirety.

b)Section 1.4.1(b) shall be renumbered as “1.4.1” and is hereby amended in its entirety to read as follows:

Earn-Out. If actual EBITDA exceeds Target EBITDA, then in accordance with the timing specified in Section 1.4.3, the Buyer shall pay to the Seller an earn-out payment equal to twenty percent (20%) of Actual EBITDA less Target EBITDA (the “Earn-out Payment”). Notwithstanding the above, in no case shall the Earn-out Payment exceed Five Million Dollars ($5,000,000).

c)In Article 7, the definition of “Maximum Base Earn-out” shall be deleted in its entirety.

3.Limited Effect. Except as expressly provided in this Amendment, all of the terms and provisions of the Existing Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Existing Agreement or as a waiver of or consent to any further or future action on the part of either Party that would require the waiver or consent of the other Party. On and after the Effective Date, each reference in the Existing Agreement to "this Agreement," "the Agreement," "hereunder," "hereof," "herein" or words of like import will mean and be a reference to the Existing Agreement as amended by this Amendment.

4.Clawback.  In the event that Buyer suffers any Losses as a direct result of a material breach by Seller pursuant to the Existing Agreement or this Amendment, the Buyer may require reimbursement or forfeiture of any payment received by the Seller pursuant to this Amendment.

5.Miscellaneous.

a)This Amendment is governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the conflict of laws provisions of such State.

b)This Amendment shall inure to the benefit of and be binding upon each of the Parties and each of their respective successors and permitted assigns.

c)The headings in this Amendment are for reference only and do not affect the interpretation of this Amendment.

d)This Amendment may be executed in counterparts, each of which is deemed an original, but all of which constitutes one and the same agreement.

e)This Amendment constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 to the Asset Purchase Agreement as of the Effective Date set forth above.

TriGen Insurance Solutions, Inc.

By: /s/ Christopher L. Pizzo
Name:Christopher L. Pizzo
Title:Vice-President

Hospitality Supportive Systems, LLC

By:/s/ Edward Snow
Name:Edward Snow
Title:Manager

EX-2.9

Exhibit 2.9

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT

(Selective Risk Management LLC)

May 14, 2015

This Amendment No. 1 (this “Amendment”) to the Asset Purchase Agreement dated as of April 1, 2015, by and among TriGen Insurance Solutions, Inc., a Delaware corporation (the “Buyer”), Selective Risk ManagementLLC, a Pennsylvania limited liability company (the “Seller”) and the sole shareholder of the Seller (the “Existing Agreement”) shall be effective as of May 14, 2015 (the “Effective Date”). Each of the foregoing parties may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Existing Agreement.

1. Earn-out Acceleration.The Maximum Earn-out Payment ($1,922,500), as described in Section 1.4.1(a) of the Existing Agreement, shall be accelerated and paid in full as of the Effective Date hereof. As of the Effective Date, the payment made pursuant to this Section 1 shall be considered additional Purchase Price and shall terminate Buyer’s obligation under the Existing Agreement to pay any additional consideration for the Purchased Assets. No additional Earn-out will be paid to Seller.

2. Amendments to the Existing Agreement.   As of the Effective Date, the Existing Agreement is hereby amended or modified as follows: in Article 7, the definition of “Maximum Earn-out” shall be deleted in its entirety.

3.Limited Effect. Except as expressly provided in this Amendment, all of the terms and provisions of the Existing Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Existing Agreement or as a waiver of or consent to any further or future action on the part of either Party that would require the waiver or consent of the other Party. On and after the Effective Date, each reference in the Existing Agreement to "this Agreement," "the Agreement," "hereunder," "hereof," "herein" or words of like import will mean and be a reference to the Existing Agreement as amended by this Amendment.

4.Clawback.  In the event that Buyer suffers any Losses as a direct result of a material breach by Seller pursuant to the Existing Agreement or this Amendment, the Buyer may require reimbursement or forfeiture of any payment received by the Seller pursuant to this Amendment.

5.Miscellaneous.

a)This Amendment is governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the conflict of laws provisions of such State.

b)This Amendment shall inure to the benefit of and be binding upon each of the Parties and each of their respective successors and permitted assigns.

c)The headings in this Amendment are for reference only and do not affect the interpretation of this Amendment.

d)This Amendment may be executed in counterparts, each of which is deemed an original, but all of which constitutes one and the same agreement.

e)This Amendment constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 to the Asset Purchase Agreement as of the Effective Date set forth above.

TriGen Insurance Solutions, Inc.

By: /s/ Christopher L. Pizzo
Name:Christopher L. Pizzo
Title:Vice-President

Selective Risk Management LLC

By:/s/ Edward Snow
Name:Edward Snow
Title:Manager

EX-2.10

Exhibit 2.10

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”) effective as of May 8, 2015 (“Effective Date”), by and among Contego Services Group, LLC, a Delaware limited liability company (the “Buyer”), Candid Investigation Services, L.L.C., a New Mexico limited liability company (the “Seller”) and Seth Markham, an individual and the sole shareholder of the Seller (the “Equity Holder”). Each of the foregoing parties may be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used and not otherwise defined herein shall have the meanings set forth in Article 7 below.

RECITALS

WHEREAS, the Equity Holder owns all of the Equity Interests of the Seller and the Seller is engaged in the business of providing professional investigative services (the “Business”); and

WHEREAS, the Seller wishes to sell to the Buyer and the Buyer wishes to purchase from the Seller, the rights and obligations of the Seller to the Purchased Assets (as defined herein) subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE OF THE PURCHASED ASSETS

1.1 Purchased Assets and Excluded Assets.

1.1.1 Purchased Assets. On the terms and subject to the conditions hereof and in consideration of the Purchase Price to be paid to the Seller by the Buyer, the Buyer hereby purchases and acquires from the Seller, and the Seller hereby sells, conveys, assigns, transfers and delivers to the Buyer, all of the Seller’s right, title and interest in and to all assets, properties, rights and interests, of any kind and description pertaining to the Business (whether personal, tangible or intangible, or fixed, contingent or otherwise), wherever located and by whomever possessed, owned, licensed or leased by the Seller, other than the Excluded Assets (collectively, the “Purchased Assets”), free and clear of all Liens, including, without limitation, the following:

(a) all of the Seller’s Contracts and business arrangements, including, without limitation, sales and purchase orders, and confidentiality, dealership, service, maintenance, vendor, customer and service agreements, all of which are listed on Schedule 1.1.1 (collectively, the “Assigned Contracts”);

(b) all of the Seller’s Intellectual Property;

(c) all of the Seller’s Licenses and Permits;

(d) all of the Seller’s claims, deposits, prepayments, refunds, credits, causes of action, rights of recovery and setoff of any kind, including, without limitation, proceeds from insurance policies to the extent such proceeds relate to the Purchased Assets or the Assumed Liabilities and all rights of the Seller under or pursuant to all warranties, representations and guarantees made by Persons to the Seller with respect to the Business (other than those that are Excluded Assets or Excluded Liabilities);

(e) all of the Seller’s advertising, marketing, training and promotional materials and all other printed or written materials;

(f) all of the Seller’s lists, records and other information pertaining to suppliers and customers (including, without limitation, customer lists, customer mailing lists and customer sales files); lists, records and other information pertaining to accounts, referral sources; books, ledgers, files, documents, correspondence and business and accounting records of every kind (including, without limitation, all financial, business and marketing plans); and

(g) all goodwill of the Seller as a going concern and all other intangible property of the Seller.

Nothing in this Section 1.1.1 shall obligate the Buyer to assume any Liability, whether related to the Business, the Purchased Assets or otherwise, unless the Buyer expressly assumes such Liability pursuant to the terms and conditions of Section 1.2.1 of this Agreement.  The failure of the Seller to list any Purchased Asset on an appropriate disclosure schedule attached hereto (the “Disclosure Schedule”) shall not exclude such asset from the Purchased Assets.

1.1.2 Excluded Assets. Notwithstanding Section 1.1.1, the following assets, properties, rights and interests of the Seller (collectively, the “Excluded Assets”) are expressly excluded from the purchase and sale contemplated hereby and as such are not

included in the Purchased Assets: (a) all Cash on Hand of the Seller as of the Closing Date; (b) the Seller’s rights under or pursuant to this Agreement; (c) all Real Property owned by the Seller or the Equity Holder; (d) all Accounts Receivable as of the Closing Date and (e) all other assets, properties, rights and interests of the Seller and the Equity Holder not relating to the Business or the Purchased Assets, including, without limitation, those set forth on Schedule 1.1.2.

1.2 Assumption and Exclusion of Liabilities.

1.2.1 Assumed Liabilities. As of the Closing Date, subject to the terms and conditions hereof, and as additional consideration for the Purchased Assets, the Buyer shall assume and pay, perform or otherwise discharge, in accordance with their respective terms and subject to their respective conditions, the Liabilities of the Seller under any Assigned Contracts relating to the Business and the Purchased Assets (but excluding any Liability arising prior to the Closing Date, arising as a result of events prior to the Closing Date or arising out of or related to any breach, act or omission by the Seller) and any other Liabilities of the Seller set forth on Schedule 1.2.1, but only to the extent the existence of such Liabilities or the particular facts and circumstances that give rise to such Liabilities do not or would not constitute a breach of any of the Seller’s representations and warranties hereunder or otherwise give rise to a claim for indemnification by the Buyer hereunder (collectively, the “Assumed Liabilities”).

1.2.2 Excluded Liabilities. Notwithstanding anything to the contrary in this Agreement, the Seller shall retain and shall be responsible for paying, performing and discharging when due, and the Buyer shall not assume or have any responsibility or liability for, any of the Seller’s Liabilities, whether or not related to the Business or the Purchased Assets, of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, and whether or not accrued, not specifically identified as Assumed Liabilities pursuant to Section 1.2.1 including, without limitation, the following Liabilities (collectively, the “Excluded Liabilities”):

(a) all Liabilities arising out of or related to the Excluded Assets;

(b) the Seller’s obligations under this Agreement;

(c) all Liabilities under any Assigned Contract, to the extent (A) arising in the first instance prior to the Closing Date, or (B) arising after the Closing Date but relating to a breach of an Assigned Contract by the Seller prior to the Closing Date;

(d) all Liabilities for accounts payable of the Seller, whether related to the Business or otherwise;

(e) all Liabilities for Taxes imposed with respect to the Business, the Purchased Assets or any income or gains derived with respect thereto for any Tax period, or portion thereof, ending on or before the Closing Date;

(f) all Liabilities related to any Indebtedness;

(g) all Liabilities related to the Seller’s non-compliance with any applicable Laws;

(h) all Liabilities arising out of or relating to any breach of warranty or similar claim with respect to the Business, to the extent such Liabilities relate to services provided by the Seller prior to the Closing Date;

(i) all Liabilities related to any pending or threatened litigation against the Seller, whether related to the Business or otherwise; and

(j) all other Liabilities of whatever kind and nature, primary or secondary, direct or indirect, absolute or contingent, known or unknown, whether or not accrued, not defined as Assumed Liabilities pursuant to Section 1.2.1.

1.3 Purchase Price. In consideration of the sale by the Seller to the Buyer of the Purchased Assets and the representations, warranties and covenants made by the Seller to the Buyer, and subject to the satisfaction or waiver of all of the conditions contained herein, the Buyer shall deliver to Seller (a) at Closing, Nine Hundred Thousand Dollars ($900,000) (the “Initial Purchase Price”) in cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth in Schedule 1.3; and (b) in accordance with the timing specified in Section 1.4.3, the Earn-out Payment (as defined in Section 1.4.1), if any.

1.4 Earn-Out.

1.4.1 Payments.   The Buyer shall pay to the Seller an earn-out payment (the “Earn-Out”) based on Actual Revenue for each Measurement Period as follows:

a) If Actual Revenue is equal to or greater than Target Revenue, Seller shall be entitled to the Target Earn-Out.

b) If Actual Revenue is less than Target Revenue, the Earn-Out shall be calculated as follows (the “Earn-Out Calculation”):

Earnout =	((	Cumulative Revenue	)	× Cumulative Target Earnout	)	- Cumulative Earnout
		Cumulative Target Revenue

The calculation set forth in this Section 1.4.1(b) shall be based on the values for the appropriate Measurement Period as set forth on Schedule 1.4.1(b). Notwithstanding anything herein, the maximum total Earn-Out for the Measurement Period is $600,000. For the

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avoidance of doubt, for purposes of calculating the Earn-Out hereunder, “Actual Revenue” shall capture all recorded revenue for the applicable Measurement Period without regard to whether such revenue has been collected.

1.4.2 Procedures Applicable to Determination of the Earn-out Payments.

(a) On or before the date which is thirty (30) days after the conclusion of the Measurement Period (the “Earn-out Calculation Delivery Date”), the Buyer shall prepare and deliver to the Seller a written statement (the “Earn-out Calculation Statement”) setting forth in reasonable detail its calculation of the resulting Earn-out Payment (the “Earn-out Calculation”).

(b) The Seller shall have ten (10) days after receipt of the Earn-out Calculation Statement (the “Review Period”) to review the Earn-out Calculation Statement and the Earn-out Calculation set forth therein. During the Review Period, the Seller and its accountants shall have the right to inspect the Buyer's books and records during normal business hours at the Buyer's offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of the Earn-out Payment. Prior to the expiration of the Review Period, the Seller may object to the Earn-out Calculation set forth in the Earn-out Calculation Statement by delivering a written notice of objection (the “Earn-out Calculation Objection Notice”) to the Buyer. Any Earn-out Calculation Objection Notice shall specify the items in the applicable Earn-out Calculation disputed by the Seller and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If the Seller fails to deliver an Earn-out Calculation Objection Notice to the Buyer prior to the expiration of the Review Period, then the Earn-out Calculation set forth in the Earn-out Calculation Statement shall be final and binding on the parties hereto. If the Seller timely delivers an Earn-out Calculation Objection Notice, the Buyer and the Seller shall negotiate in good faith to resolve the disputed items and agree upon the resulting amount of the Total Premium and the Earn-out Payment. If the Buyer and the Seller are unable to reach agreement within thirty (30) days after such an Earn-out Calculation Objection Notice has been given, all unresolved disputed items shall be promptly referred to an impartial nationally recognized firm of independent certified public accountants, other than the Seller’s accountants or the Buyer’s accountants, appointed by mutual agreement of the Buyer and the Seller (the “Independent Accountant”). The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable Earn-out Calculation as promptly as practicable, but in no event greater than thirty (30) days after such submission to the Independent Accountant, and to resolve only those unresolved disputed items set forth in the Earn-out Calculation Objection Notice. If unresolved disputed items are submitted to the Independent Accountant, the Buyer and the Seller shall each furnish to the Independent Accountant such work papers, schedules and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this Agreement and the presentations by the Buyer and the Seller, and not by independent review. The resolution of the dispute and the calculation of Total Premium that is the subject of the applicable Earn-out Calculation Objection Notice by the Independent Accountant shall be final and binding on the parties hereto. The fees and expenses of the Independent Accountant shall be borne by the Seller and the Buyer in proportion to the amounts by which their respective calculations of Total Premium differ from Total Premium as finally determined by the Independent Accountant.

1.4.3 Timing of Payment of Earn-out Payments. Subject to Section 1.4.5, any Earn-out Payment that the Buyer is required to pay pursuant to Section 1.4.1 hereof shall be paid in full no later than five (5) business days following the date upon which the determination of the Earn-out Payment becomes final and binding upon the parties as provided in Section 1.4.2(b) (including any final resolution of any dispute raised by the Seller in the Earn-out Calculation Objection Notice). The Buyer shall pay to the Seller the Earn-out Payment, if any, in cash by wire transfer of immediately available funds to the bank account for the Seller set forth on Schedule 1.3.

1.4.4 Post-closing Operation of the Business. Subject to the terms of this Agreement, subsequent to the Closing, the Buyer shall have sole discretion with regard to all matters relating to the operation of the Business; provided, that the Buyer shall not, directly or indirectly, take any actions in bad faith that would have the purpose of avoiding or reducing any of the Earn-out Payments hereunder. Notwithstanding the foregoing, the Buyer has no obligation to operate the Business in order to achieve any Earn-out Payment or to maximize the amount of any Earn-out Payment.

1.4.5 Right of Set-off. The Buyer shall have the right to withhold and set off against any amount otherwise due to be paid pursuant to this Section 1.4 the amount of any Losses to which any Buyer Indemnified Party may be entitled.

1.4.6 No Security. The parties hereto understand and agree that (i) the contingent rights to receive the Earn-out Payment shall not be represented by any form of certificate or other instrument, are not transferable, except by operation of Laws relating to descent and distribution, divorce and community property, and do not constitute an equity or ownership interest in the Buyer, (ii) the Seller shall not have any rights as a security holder of the Buyer as a result of the Seller's contingent right to receive the Earn-out Payment hereunder, and (iii) no interest is payable with respect to the Earn-out Payment.

1.5 Third Party Consents. To the extent that the Seller’s rights under any Contract or Permit constituting a Purchased Asset, or any other Purchased Asset, may not be assigned to the Buyer without the consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and the Seller, at its expense, shall use its best efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair the Buyer’s rights under the

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Purchased Asset in question so that the Buyer would not in effect acquire the benefit of all such rights, the Seller, to the maximum extent permitted by law and the Purchased Asset, shall act after the Closing as the Buyer’s agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by Law and the Purchased Asset, with the Buyer in any other reasonable arrangement designed to provide such benefits to the Buyer. Notwithstanding any provision in this Section 1.5 to the contrary, the Buyer shall not be deemed to have waived its rights under Section 4.2.2 hereof unless and until the Buyer provides written waivers thereof.

1.6 Closing. The closing of the purchase and sale of the Purchased Assets (the “Closing”) shall take place on May 8, 2015 (the “Closing Date”) and shall be effective as of 12:01 a.m. Eastern Time on the Effective Date.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller and the Equity Holder, jointly and severally, hereby represent and warrant to the Buyer with respect to the matters specified in this Article 2 as follows:

2.1 Organization and Qualification. The Seller is a limited liability company, duly organized, validly existing and in good standing under the Laws of the State of New Mexico. The Seller does not have any subsidiaries. The Seller has the requisite limited liability company power and authority to conduct the Business as it is now being conducted and to perform all of its obligations under each Contract by which it is bound.

2.2 Authorization; Enforceability. The Seller has the requisite limited liability company power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated by this Agreement. This Agreement has been duly authorized by the Equity Holder and duly executed and delivered by the Seller, and this Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable in accordance with its terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

2.3 Organizational Documents. The Seller has delivered to the Buyer copies of the Seller’s Organizational Documents, and all such copies are complete and correct as of the date hereof. The books of account and other records of the Seller delivered to the Buyer have been maintained in accordance with sound business practice, and applicable Law and accounting policies. The Seller is not in default under or in violation of any provision of its Organizational Documents.

2.4 Capitalization.  The Equity Holder is the only record and beneficial holder of the Equity Interests of the Seller.  There are no voting trusts, proxies, or other agreements or understandings with respect to the voting Equity Interests of the Seller.

2.5 No Violation. Except as set forth on Schedule 2.5 and subject to the receipt of the Consents and to the filing of notices as contemplated by Section 2.6, neither the execution and delivery of this Agreement, nor the performance by the Seller of its obligations hereunder, or the consummation of the transactions contemplated hereby will (with or without the passage of time or the giving of notice) (a) violate, conflict with or constitute a default under the Organizational Documents of the Seller, (b) violate, conflict with or result in a breach of, constitute a default under, give rise to any right of termination, cancellation or acceleration under, or cause any loss of benefit under, any of the terms, conditions or provisions of any Assigned Contract or any Contract or Lease to which the Seller is a party or by which the Purchased Assets are bound, or give to others any rights (including rights of termination, foreclosure, cancellation or acceleration) in or with regard to the Seller or any of its assets, or result in, require or permit the creation or imposition of any Lien of any nature upon or with regard to the Seller or any of its assets, or (c) conflict with or violate in any material respect any Laws applicable to the Seller or by which any of its assets are bound or any of the Licenses and Permits held by the Seller.

2.6 Consents.

2.6.1 Third Party Consents. Except as set forth on Schedule 2.6, neither the execution and delivery of this Agreement, nor the performance by the Seller of its obligations hereunder or the consummation of the transactions contemplated hereby will (with or without the passage of time or the giving of notice) require any Consent (collectively, the “Third Party Consents”) under any of the terms, conditions or provisions of any Assigned Contract or any Contract to which the Seller is a party or by which any Purchased Assets are bound.

2.6.2 Governmental Consents. Except as set forth on Schedule 2.6, no material Consent of, permit or exemption from, or declaration, filing or registration with, any Person or Governmental Authority (collectively, the “Governmental Consents”) is required to be made or obtained by the Seller in connection with the execution, delivery and performance by the Seller of this Agreement and the consummation of the transactions contemplated hereby, which, if not made or obtained, would result in a violation of any Law, License or Permit, or result in any material Liability to the Seller, or which would prohibit the consummation of the transactions contemplated hereby.

2.7 Taxes. The Seller has delivered to Buyer complete and correct copies of the Seller’s Tax Returns for the fiscal years ended December 31, 2012 and December 31, 2013. The Seller has filed, will timely file or will cause to be timely filed, or has timely filed for an extension of the time to file, all Tax Returns required by applicable Law to be filed by it prior to or as of the date hereof, and such Tax Returns are, or will be at the time of filing, true, correct and complete in all material respects. The Seller has paid and

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discharged or, where payment is not yet due, has established, or will establish or cause to be established, on or before the Closing Date, an adequate accrual for the payment of all Taxes due with respect to (a) any period ending prior to or on the Closing Date and (b) the portion through the Closing Date for any period that includes (but does not end on) the Closing Date. There are no Liens, claims or assessments pending against the Seller or its assets for any alleged deficiency in any Tax (other than for current Taxes not yet due and payable), and the Seller has not been notified of any proposed Tax claims, Liens or assessments against the Seller. The Seller is not, has not been, nor has been notified that it will be the subject of any examination by a Taxing Authority. The Seller has withheld from each payment made to any of its past or present employees, and any other Person, as appropriate, the amount of all Taxes and other deductions required to be withheld therefrom, and paid the same to the proper Taxing Authority within the time required by Law. No claim has ever been made by a Taxing Authority in a jurisdiction where the Seller does not file Tax Returns that the Seller is or may be subject to taxation by that jurisdiction. The Seller is not party to any Tax indemnity, allocation or sharing agreement.

2.8 Material Contracts. The Seller has delivered to the Buyer a complete and correct copy of each written Assigned Contract, together with all amendments, exhibits, attachments, waivers or other changes thereto, and written descriptions of each oral Contract, if any. Each Assigned Contract that is in any way material to the Business of the Seller (a “Material Contract”) is valid, binding, in full force and effect, and enforceable by the Seller against the parties thereto in accordance with its terms, except as such enforceability may be limited by the General Enforceability Exceptions, and is not subject to any claims, charges, setoffs or defenses. The Seller is not in breach or default under any Material Contract, nor has any event occurred which with the giving of notice or the passage of time (or both) would constitute a breach or default by the Seller thereunder. The Seller has not waived any material rights under any Material Contract or modified any material terms thereof. To the Seller’s Knowledge, no other party to any Material Contract is in breach or default in any respect thereunder, nor has any event occurred or is expected to occur (including, without limitation, the transactions contemplated hereby), which with the giving of notice or the passage of time (or both) would constitute a breach or default by such other party thereunder.

2.9 Real Property. No interest in any Real Property is included in the Purchased Assets.

2.10 Personal Property. The Seller has good title to, a valid leasehold interest in, or a valid license to use, all assets owned or used by the Seller, and all assets used in or necessary for the operation of the Business, free and clear of any Liens. All tangible assets owned, leased or licensed by the Seller are in the possession of, and under the control of, the Seller.

2.11 Intellectual Property. Schedule 2.11 sets forth a complete and correct list of all Intellectual Property owned by the Seller or related to, used in or necessary for the operation of the Business (the “Seller Intellectual Property”). Except as set forth on Schedule 2.11, (a) the Seller owns all right, title and interest in, or has a valid license to use, the Seller Intellectual Property in the Business, free and clear of all Liens; (b) the use of the Seller Intellectual Property in the conduct of the Business does not infringe upon, dilute or misappropriate (and in the past has not infringed upon, diluted or misappropriated) any Intellectual Property rights of any Person; (c) no claims or allegations of infringement or unauthorized use involving any Seller Intellectual Property are pending against a third party; (d) there are no pending claims or allegations of infringement or unauthorized use of any third party Intellectual Property or technology against the Seller or any Affiliate; and (e) no circumstances exist that would form the basis for any material claim of infringement, dilution, unauthorized use, or violation of any Seller Intellectual Property, or challenge the ownership, use, validity or enforceability of any Seller Intellectual Property.

2.12 Insurance Policies. The Seller has delivered, or made available to the Buyer, accurate and complete copies of all policies of insurance and pending applications for policies of insurance under which the Seller or the Business is or has been covered at any time during the last three (3) years. All policies of insurance which provide coverage to the Seller or the Business (a) are valid, outstanding and enforceable on the date hereof; (b) are issued by an insurer that is financially sound and reputable; (c) taken together, provide adequate insurance coverage for the Seller and operations of the Business for all risks to which the Seller and the Business are normally exposed; and (d) are sufficient for compliance with applicable Laws and the Contracts of the Seller. The Seller has not received any refusal of coverage, any notice that a defense will be afforded with reservation of rights, or any notice of cancellation or any other indication that any policy of insurance is no longer in full force or effect, or that the issuer of any policy of insurance is unwilling to perform its obligations thereunder. The Seller has complied with all of its obligations under each such insurance policy.

2.13 Litigation. There are no suits, actions, proceedings, investigations, claims or orders (collectively, “Legal Proceedings”) pending or, to the Seller’s Knowledge, threatened against the Seller or any of the current or former representatives of the Seller in their respective capacity as representatives of the Seller, nor is the Seller, or any such representative, subject to any judgment, order or decree of any court, judicial authority or Governmental Authority (nor have any of them been subject to such a judgment, order or decree in the past five (5) years). Schedule 2.13 sets forth a complete and correct list and description of all Legal Proceedings made, filed or otherwise initiated in connection with the Seller that are pending or that have been resolved in the past two (2) years, and the resolution thereof. The Seller has adequate insurance with respect to all Legal Proceedings.

2.14 Compliance with Applicable Laws. The Seller has complied in all material respects with all Laws applicable to it or to the operation of the Business and no facts or circumstances exist which would reasonably be expected to cause the Seller to violate or fail to comply with any such Laws in the future. The Seller has not received any written notice from any court, judicial authority or Governmental Authority asserting a failure, or possible failure, to comply with any such applicable Laws, the subject of which notice

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has not been conclusively resolved as required thereby or otherwise to the satisfaction of the party sending such notice. The Seller is not under investigation with respect to violations of any such Laws.

2.15 Regulatory Compliance. Schedule 2.15 contains a complete and correct list of all Licenses and Permits issued to or maintained by the Seller as of the date hereof that are necessary to the conduct of the Business as the Business has been operated during the past twelve (12) months (collectively, the “Material Licenses and Permits”), along with the date of issuance and the current term thereof. All such Material Licenses and Permits are in full force and effect. The Seller is in compliance with the terms and conditions of the Material Licenses and Permits and has received no written notices that it is in violation of any of the terms or conditions of any Material Licenses and Permits or alleging the failure to maintain any Licenses and Permits. The Seller has not received written notice that any of the Material Licenses and Permits will not be renewed, there are no proceedings pending to revoke or withdraw any such Material Licenses and Permits and the Seller has no reason to believe that any of the Material Licenses and Permits will be revoked, withdrawn or will not be renewed. The facilities used in the Business are in compliance with all applicable building codes, ordinances and regulations, and the Seller has not received any notice asserting a failure, or possible failure, to comply with any such fire codes, ordinances or regulations.

2.16 Books and Records. The Seller has maintained its books and records in the Ordinary Course of Business, consistent with professional business standards and practices customary for the professional investigative services industry. The Seller makes and keeps books, records and accounts which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets.

2.17 Brokers. No broker, finder or agent is entitled to any brokerage fees, finder’s fees or commissions in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller.

2.18 Customers. Schedule 2.18 sets forth a list of all customers of the Seller, showing the total sales by the Seller to each customer for the years ended 2014 and 2015. As of the Closing Date, no customer listed on Schedule 2.18 has terminated its relationship with the Seller or materially reduced or changed the pricing or other terms of its business with the Seller, and no customer listed on Schedule 2.18 has notified the Seller that it intends to terminate or materially reduce or change the pricing or other terms of its business with the Seller.

2.19 Foreign Person. The Seller is not a foreign person within the meaning of Section 1445 of the Code.

2.20 Full Disclosure. This Agreement, including all Schedules and Exhibits, delivered by or on behalf of the Seller hereunder are complete and correct in all material respects. No representation or warranty of the Seller contained in this Agreement and no written statement made by or on behalf of the Seller to the Buyer or any of its Affiliates pursuant to this Agreement contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. There is no fact known to the Seller which the Seller has not disclosed to the Buyer in writing which reasonably could be expected to materially affect the Business in an adverse manner.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Seller as follows:

3.1 Organization and Authority of the Buyer; Enforceability. The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. The Buyer has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement, and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Buyer and, assuming the due authorization, execution and delivery by the other parties hereto, will constitute, upon such execution and delivery in each case thereof, legal, valid and binding obligations of the Buyer, enforceable in accordance with their terms and conditions, except as such enforceability may be limited by the General Enforceability Exceptions.

3.2 No Consents. No material Consent of, permit or exemption from, or declaration, filing or registration with, any Governmental Authority is required to be made or obtained by the Buyer in connection with the execution, delivery and performance of this Agreement by the Buyer.

3.3 No Violation. Neither the execution and delivery of this Agreement nor the performance by the Buyer of the transactions contemplated hereby will (a) violate or conflict with the Organizational Documents of the Buyer, or (b) conflict with or violate any Laws applicable to the Buyer or by which any of its properties is bound.

ARTICLE 4

CLOSING

4.1 Time and Place.  The Closing shall occur simultaneously with the execution of this Agreement and shall be effective as of 12:01am Eastern Time on the Closing Date.

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4.2 Deliveries by the Seller. At the Closing, the Seller shall deliver or cause to be delivered to the Buyer:

4.2.1 Corporate Documents. A copy of the Articles of Organization of the Company certified by the applicable Secretary of State, as of a date not more than thirty (30) days prior to the Closing Date;

4.2.2 Good Standing Certificate. A certificate of good standing with respect to the Seller, issued by the applicable Secretary of State, as of a date not more than thirty (30) days prior to the Closing Date;

4.2.3 Authorizing Resolutions. A copy of the resolutions of the Seller’s manager (or board of managers), certified by the Secretary of the Company as having been duly and validly adopted and being in full force and effect, authorizing the execution and delivery of this Agreement and the performance by the Seller of its obligations hereunder;

4.2.4 Consents. The Third Party Consents and Governmental Consents identified on Schedule 2.6.2;

4.2.5 Licenses and Permits. All Licenses and Permits identified on Schedule 2.15;

4.2.6 Assignment and Assumption Agreement. An assignment and assumption agreement in the form of Exhibit A hereto (the “Assignment and Assumption Agreement”) and duly executed by the Seller, effecting the assignment to and assumption by the Buyer of the Purchased Assets and the Assumed Liabilities;

4.2.7 Bill of Sale. A bill of sale in the form of Exhibit B hereto (the “Bill of Sale”) and duly executed by the Seller, transferring the tangible personal property included in the Purchased Assets to the Buyer;

4.2.8 Intellectual Property Assignment.  An intellectual property assignment in the form of Exhibit C hereto (the “Intellectual Property Assignment”) and duly executed by the Seller, effecting the assignment of all of the Seller’s Intellectual Property to the Buyer;

4.2.9 Partnership Dissolution.  Evidence satisfactory to the Buyer that the common law partnership between Seller and DMI Group, LLC, a Texas limited liability company, has been dissolved as of the Closing Date and all assets of the common law partnership have been transferred to Seller free and clear of any Liens or other encumbrances;

4.2.10 Employment Agreements. Executed copies of the employment agreements between Buyer and each of Seth Markham and David Martinez (together, the “Employment Agreements”);

4.2.11 Transition Agreement. A transition agreement in the form of Exhibit D hereto (the “Transition Agreement”), and duly executed by the Seller; and

4.2.12 Other Documents.  Such other documents and instruments as the Buyer may reasonably request to consummate the transactions contemplated hereby.

4.3 Deliveries by the Buyer. The Buyer will deliver or cause to be delivered to the Seller:

4.3.1 The Purchase Price. Payment of the Purchase Price as provided in Section 1.3;

4.3.2 Good Standing Certificate. A certificate of good standing with respect to the Buyer, issued by the Secretary of State of Delaware, as of a date not more than thirty (30) days prior to the Closing Date;

4.3.3 Assignment and Assumption Agreement. The Assignment and Assumption Agreement duly executed by the Buyer;

4.3.4 Bill of Sale. The Bill of Sale duly executed by the Buyer;

4.3.5 Employment Agreements. The Employment Agreements duly executed by the Buyer;

4.3.6 Transition Agreement. The Transition Agreement duly executed by the Buyer;

4.3.7 Other Documents. Such other documents and instruments as the Seller shall reasonably request to consummate the transactions contemplated hereby.

ARTICLE 5

POST CLOSING COVENANTS

5.1 Tax Covenants.

5.1.1 The Parties understand that the Buyer shall be performing a valuation of the Purchased Assets for the purpose, among other things, of valuing the covenants made by the Seller (“Purchase Price Allocation”). The Buyer and Seller each agree that such valuation shall be dispositive regarding the allocation of the respective Purchase Price. The Seller and the Buyer shall cooperate to prepare IRS Form 8594 and any required exhibits thereto. The Buyer and the Seller shall report the federal, state, local and other income and other tax consequences of the purchase and sale contemplated hereby in a manner consistent with the Purchase Price Allocation and shall not take any position inconsistent therewith.

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5.1.2 The Seller and the Buyer hereby waive compliance with any “bulk sales” Laws (including any requirement to withhold any amount from payment of the Purchase Price) applicable to the sale to the Buyer of the Purchased Assets by the Seller.

5.2 Access to Books and Records. From and after the Closing, each Party shall provide the other Party and its representatives with reasonable access (for the purpose of examining and copying), during normal business hours, to the books and records relating to the Business with respect to periods, portions thereof or occurrences prior to the Closing Date in connection with legitimate business purposes of the requesting Party (including in connection with the filing of any Tax Returns, the making of any Tax elections, and the defense of any Tax claim audit or proceeding), expressed to the other Party in writing.

5.3 Non-Competition; Non-Solicitation; Confidentiality.

5.3.1 Non-Disclosure of Confidential Information. Neither the Equity Holder nor the Seller shall, directly or indirectly, disclose or use at any time any Confidential Information, except to the extent that such disclosure or use is directly related to and required by the performance of the Seller’s duties to the Buyer or as required by Law or as otherwise provided hereunder. Each of the Seller and the Equity Holder further agrees to take commercially reasonable steps, to the extent within their control, to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event that the Equity Holder or the Seller is required by Law to disclose any Confidential Information, such Party shall promptly notify the Buyer in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and shall cooperate with the Buyer’s reasonable requests to preserve the confidentiality of such Confidential Information consistent with applicable Law. For purposes of this Agreement, “Confidential Information” means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as “confidential”), in any form or medium, that relates to the Business or its distributors, customers, independent contractors or other business relations. Confidential Information includes the following as they relate to the Business and, in each case, to the extent the Business obtains a commercial benefit from the secret nature of such information: internal business information (including information relating to strategic plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods and potential acquisition candidates); identities of, individual requirements of, and specific contractual arrangements with, the Business’s distributors, customers, independent contractors or other business relations and their confidential information; trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; and inventions, innovations, improvements, developments, methods, designs, analyses, drawings, and reports. Notwithstanding the foregoing, Confidential Information does not include such information which: (a) at the time of disclosure is publicly available or thereafter becomes publicly available through no act or omission of the Equity Holder or the Seller; (b) is thereafter disclosed or furnished to the Equity Holder or the Seller by a third party who is not known by such party to have acquired the information under an obligation of confidentiality; or (c) is disclosed by the Equity Holder or the Seller (subject to compliance with the applicable provisions of this Section 5.3.1) under compulsion of applicable Law.

5.3.2 Non-Competition. Each of the Equity Holder and the Seller is familiar with the trade secrets related to the Business and with other Confidential Information concerning the Business, including all (a) inventions, technology and research and development related to the Business, (b) customers and clients and customer and client lists related to the Business, (c) products (including products under development) and services related  to  the  Business  and  related  costs  and  pricing  structures  and  manufacturing  techniques, (d) accounting and business methods and practices related to the Business and (e) similar and related Confidential Information and trade secrets related to the Business. Each of the Equity Holder and the Seller acknowledges and agrees that the Business would be irreparably damaged if such Party were to directly or indirectly provide services to any Person competing with the Business or engaging in a similar business and that such direct or indirect competition by any such Party would result in a significant loss of goodwill by the Business. In further consideration for the Buyer’s payment of the Purchase Price under this Agreement (in respect of which payment each of the Equity Holder and the Seller expressly acknowledges that he or it derives a substantial and direct benefit), and in order to protect the value of the Business acquired by the Buyer hereunder (including the goodwill inherent in the Business as of the date hereof), each of the Equity Holder and the Seller hereby agrees that during the period commencing on the Closing Date and ending on the third (3rd) anniversary of the Closing Date (the “Non-Competition Period”), such Party shall not acquire or hold any economic or financial interest in, act as a partner, member, stockholder, or representative of, render any services to, or otherwise operate or hold an interest in any Person (other than the Seller) having any location in any county in which the Business or the Buyer conducts operations, which entity, enterprise or other Person primarily engages in, directly or indirectly, any business that competes with the Business or operates in the professional investigative services industry; provided, however, that nothing contained herein shall be construed to prohibit any such Party from purchasing up to an aggregate of two percent (2%) of any class of the outstanding voting securities of any other Person whose securities are listed on a national securities exchange (but only if such investment is held on a purely passive basis). Notwithstanding the above, if Buyer materially breaches this Agreement, the provisions of this Section 5.3.2 shall terminate following a thirty (30) day cure-period (the “Cure Period”) where Buyer may correct such material breach. The Cure Period shall commence upon Buyer’s receipt of written notice from the Seller detailing the particular act or acts or failure or failures to act that constitute the material breach. The termination of this Section 5.3.2 shall thereafter be effective at the expiration of the Cure Period unless Buyer has fully cured such breach during the Cure Period.

5.3.3 Non-Solicitation; Non-Disparagement. During the period commencing on the Closing Date and ending on the fifth (5th) anniversary of the Closing Date (the “Non-Solicitation Period”), neither the Equity Holder nor the Seller shall, directly or indirectly, either individually or acting in concert with another Person or Persons, (a) request, induce or attempt to influence any distributor, supplier or customer of goods or services of the Business to curtail, cancel or refrain from maintaining or increasing the

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amount or type of business such distributor, supplier or customer of goods or services is currently transacting, or may be transacting during the Non-Solicitation Period, with the Business or modify its pricing or other terms of sale with the Business; or (b) make any negative, derogatory or disparaging statements or communications regarding the Buyer, the Business, or the Affiliates or representatives of the Buyer. Notwithstanding the above, if Buyer materially breaches this Agreement, the provisions of clause (a) of this Section 5.3.3 shall revised to permit Seller to solicit only those customers set forth on Schedule 1.1.1 ( the “Limited Solicitation Right”), provided Seller shall allow for a thirty (30) day cure-period (the “Cure Period”) where Buyer may correct such material breach. The Cure Period shall commence upon Buyer’s receipt of written notice from the Seller detailing the particular act or acts or failure or failures to act that constitute the material breach. The Limited Solicitation Right under this Section 5.3.3 shall thereafter be effective at the expiration of the Cure Period unless Buyer has fully cured such breach during the Cure Period. In accordance with this Section 5.3.3, nothing herein shall allow Seller to solicit any distributor or supplier of the Business pursuant to clause (a) above or to make any negative statements about the Buyer pursuant to clause (b) above.

5.3.4 Severability. Notwithstanding anything to the contrary in this Agreement, if at any time, in any judicial or arbitration proceeding, any of the restrictions stated in this Section 5.3 are found by a final order of a court of competent jurisdiction or arbitrator to be unreasonable or otherwise unenforceable under circumstances then existing, the Parties each agree that the period, scope or geographical area, as the case may be, shall be reduced to the extent necessary to enable the court to enforce the restrictions to the extent such provisions are allowable under applicable Law, giving effect to the agreement and intent of the Parties that the restrictions contained herein shall be effective to the fullest extent permissible. In the event of a breach or violation by any Party of any of the provisions of this Section 5.3, the Non-Competition Period or Non-Solicitation Period, as the case may be, will be tolled for so long as such Party was in violation of such provision. Each of the Equity Holder and the Seller agrees that the restrictions contained in this Agreement are reasonable in all respects and necessary to protect the Buyer’s interest in, and the value of, the Business.

5.4 Transition Items.

5.4.1 Transition Collections. The Seller shall promptly remit to the Buyer any proceeds received from any Accounts Receivable that constitute Purchased Assets, regardless of when such proceeds are received or whether such proceeds were obtained as a result of the collections efforts of the Seller.  At the reasonable request of the Buyer, the Seller shall make best efforts to assist in the collection of any and all outstanding Accounts Receivable. Following the Closing Date, Buyer and Seller shall review the Purchased Assets and Assumed Liabilities and work together to determine what portions of each are attributable to activity occurring prior to the Effective Date, in such case, to be retained by Seller, or are attributable to activity occurring between the Effective Date and the Closing Date, in such case to be allocated to Buyer.

5.4.2 Transition Expenses.  The Seller shall promptly reimburse the Buyer (within ten (10) business days after the Buyer provides the Seller with a bill for such reimbursement, with reasonable supporting detail) for any payments made by the Buyer with respect to pre-Closing vendor payments, or any other liabilities of the Business related to any period prior to the Closing Date and which are not paid by the Seller within ten (10) business days after receipt by the Seller of written notice of the Buyer’s intent to make any such payment.

5.4.3 Use of Name. The Seller hereby acknowledges and agrees that upon the consummation of the transactions contemplated hereby and for a period of one (1) year following the Closing Date, the Buyer shall have the sole right to the use of any service marks, trademarks, trade names, identifying symbols, logos, emblems, signs or insignia related to the Business (including, without limitation, the name “Candid Investigation Services, L.L.C.”) or containing or comprising any of the foregoing, including any name or mark confusingly similar thereto (collectively, the “Business Marks”). The Seller shall not use any of the Business Marks, except in connection with the filing of Tax returns or the winding up of the Seller’s business affairs related to the Business.

5.5 Further Assurances. From and after the Closing, the Seller shall use reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable in compliance with applicable Laws to consummate and make effective, as soon as reasonably practicable, the transactions contemplated hereby.

ARTICLE 6

INDEMNIFICATION

6.1 Survival of the Seller’s and the Equity Holder’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Seller and the Equity Holder contained in, or arising out of, this Agreement shall survive the Closing hereunder for a period of two (2) years after the Closing Date; provided, however, that the representations and warranties in Section 2.1 (Organization and Qualification), Section 2.2 (Authorization; Enforceability), Section 2.7 (Taxes), and the representations and warranties concerning title to the Purchased Assets (collectively, the “Fundamental and Statutory Representations”) shall survive until the expiration of the applicable statute of limitations. All Post-Closing Covenants of the Seller and the Equity Holder will survive the Closing in accordance with their terms. If the Buyer provides notice of a claim in accordance with the terms of this Agreement prior to the end of the period of survival set forth in this Section 6.1, then the Liability for such claim will continue until the claim is fully resolved.

6.2 Survival of the Buyer’s Representations, Warranties and Covenants; Time Limits on Indemnification Obligations. All representations and warranties of the Buyer contained in, or arising out of, this Agreement shall survive the Closing hereunder for a

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period of two (2) years after the Closing Date; provided, however, that the representations and warranties in Section 3.1 (Organization and Authority of the Buyer; Enforceability) shall survive until the expiration of the applicable statute of limitations. All Post-Closing Covenants of the Buyer will survive the Closing in accordance with their terms. If the Seller provides notice of a claim in accordance with the terms of this Agreement prior to the end of the applicable period of survival set forth in this Section 6.2, then the Liability for such claim will continue until the claim is fully resolved.

6.3 Indemnification by the Seller and the Equity Holder. Subject to the terms, conditions and limitations set forth in this Article 6, the Seller and the Equity Holder shall jointly and severally indemnify, defend and hold harmless the Buyer and its representatives, successors and permitted assigns (each, a “Buyer Indemnified Party”), from and against, and shall promptly pay or reimburse each Buyer Indemnified Party for, any and all Losses sustained or incurred (including any Losses sustained or incurred after the end of the applicable survival period, provided that a claim is made prior to the end of the applicable survival period in accordance with the terms of this Agreement) by any Buyer Indemnified Party resulting from: (a) any breach of a representation or warranty made by the Seller or the Equity Holder in this Agreement; (b) any breach of any Post-Closing Covenant made by the Seller or the Equity Holder in this Agreement; (c) any claim or assertion for obligations in respect of Indebtedness or broker’s or seller’s fees or expenses arising out of the transactions contemplated by this Agreement by a Person claiming to have been engaged by the Seller or any of its Affiliates; (d) any obligation of the Seller for any Taxes that arose, in the first instance, prior to the Closing Date; (e) the failure of the Seller to pay, discharge and perform any of the Excluded Liabilities; (f) the ownership or operation of the Business or the Purchased Assets prior to the Closing Date; or (g) any obligation of the Seller or the Equity Holder for any fees or penalties with respect to the collection of administration fees.

6.4 Indemnification by the Buyer. Subject to the terms, conditions and limitations set forth in this Article 6, from and after the Closing, the Buyer shall indemnify, defend and hold harmless the Seller and its representatives, successors and permitted assigns (each, a “Seller Indemnified Party”) from and against any and all Losses sustained or incurred by any Seller Indemnified Party resulting from: (a) any breach of a representation or warranty made by the Buyer in this Agreement; (b) any breach of a Post-Closing Covenant made by the Buyer in this Agreement; (c) the failure of the Buyer to pay, discharge and perform any of the Assumed Liabilities; or (d) the ownership or operation of the Business or the Purchased Assets on or after the Closing Date.

6.5 Indemnification Procedure for Third Party Claims.

6.5.1 In the event that subsequent to the Closing, any Person that is or may be entitled to indemnification under this Agreement (an “Indemnified Party”) receives notice of the assertion of any claim, issuance of any order or the commencement of any action or proceeding by any Person who is not a Party or an Affiliate of a Party, including, without limitation, any domestic or foreign court or Governmental Authority (a “Third Party Claim”), against such Indemnified Party and for which a Party is or may be required to provide indemnification under this Agreement (an “Indemnifying Party”), then such Indemnified Party shall give written notice thereof, together with a statement of any available information regarding such Third Party Claim to the applicable Indemnifying Party within sixty (60) days after learning of such Third Party Claim; provided, however, that failure to give such written notice within any particular time period shall not adversely affect the Indemnified Party’s right to indemnification except, and to the extent that, the Indemnifying Party can show that the failure to give such notification on a timely basis adversely affected the Indemnifying Party’s ability to defend such Third Party Claim. The Indemnifying Party shall have the right upon written notice to the Indemnified Party (the “Defense Notice”), within thirty (30) days after receipt from the Indemnified Party of notice of such Third Party Claim, to conduct, at its expense, the defense against such Third Party Claim in its own name, or if necessary in the name of the Indemnified Party. Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter into any settlement of any Third Party Claim or cease to defend against such Third Party Claim, if pursuant to or as a result of such settlement or cessation, (a) injunctive or other equitable relief would be imposed against the Indemnified Party, or (b) each claimant or plaintiff in such Third Party Claim has not given to the Indemnified Party an unconditional release from all Liability with respect to such Third Party Claim.

6.5.2 Notwithstanding anything contained in Section 6.5.1 to the contrary, the Indemnifying Party shall not be entitled to control, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of any Third Party Claim if any of the following conditions are not satisfied:

(a) the Indemnifying Party shall acknowledge in writing that it shall be fully responsible for all Losses relating to such proceeding;

(b) the Indemnifying Party must diligently defend such proceeding;

(c) the Indemnifying Party must furnish the Indemnified Party with evidence that the financial resources of the Indemnifying Party (or the funds available in the Escrow Account with respect to claims against the Escrow Account), in the Indemnified Party’s reasonable judgment, are and will be sufficient (when considering Losses in respect of all other outstanding claims) to satisfy any Losses relating to such proceeding;

(d) such proceeding shall not involve criminal actions or allegations of criminal conduct by the Indemnifying Party, and shall not involve claims for specific performance or other equitable relief; and

(e) there does not exist, in the Indemnified Party’s good faith judgment, based on the advice of outside legal counsel, a conflict of interest which, under applicable principles of legal ethics, could reasonably be expected to prohibit a single legal counsel from representing both the Indemnified Party and the Indemnifying Party in such proceeding.

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6.6 Tax Treatment of Indemnification. All indemnification payments made under this Agreement shall be treated by all Parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 7

DEFINITIONS

Definitions. As used in this Agreement,

“Accounts Receivable” of any Person means (a) all trade accounts receivable and other rights to payment from customers of such Person and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped, products sold or services rendered to customers of such Person, (b) all other accounts or notes receivable of such Person and the full benefit of all security for such accounts or notes, and (c) any claim, remedy or other right related to any of the foregoing.

“Actual Revenue” means recorded revenue for the Measurement Period attributable to the accounts purchased hereunder and any new business added by Seth Markham and David Martinez during the Measurement Period.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by, or under direct or indirect common Control with, such Person. For purposes of this definition, a Person shall be deemed to Control another Person if such Person owns or Controls, directly or indirectly, more than twenty-five percent (25%) of the voting Equity Interests of the other Person. “Control,” “Controlled” or “Controlling” means the ability of a Person (collectively or with its Affiliates) directly or indirectly to direct the use of, disposition of and access to the property of another Person.

“Cash on Hand” means all cash and cash equivalents, calculated as of 12:01 a.m., Eastern Time on the date of calculation, determined in accordance with GAAP.

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

“Consent” means any approval, consent, ratification, waiver, or other authorization.

“Contract” means any written or oral agreement, note, mortgage, indenture, lease, deed of trust, license, plan, instrument or other contract or legally binding arrangement or commitment.

“Cumulative Earn-Out” means the sum of Earn-Out earned for the current Measurement Period and all previous Measurement Periods.

“Cumulative Revenue” means the sum of Actual Revenue for the current Measurement Period and all previous Measurement Periods.

“Cumulative Target Earn-Out” means the sum of Target Earn-Out for the current Measurement Period and all previous Measurement Periods.

“Cumulative Target Revenue” means the sum of Target Revenue for the current Measurement Period and all previous Measurement Periods.

“Equity Interests” means (a) any partnership interests, (b) any membership interests or units, (c) any shares of capital stock, (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, (e) any subscriptions, calls, warrants, options, or commitments of any kind or character relating to, or entitling any Person or entity to purchase or otherwise acquire membership interests or units, capital stock, or any other equity securities, (f) any securities convertible into or exercisable or exchangeable for partnership interests, membership interests or units, capital stock, or any other equity securities, or (g) any other interest classified as an equity security of a Person.

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

“General Enforceability Exceptions” means those exceptions to enforceability due to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally, and general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity).

“Governmental Authority” means the United States or any state, provincial, local or foreign government, or any subdivision, agency or authority of any thereof having competent jurisdiction over any of the Seller, the Buyer or the transactions contemplated by this Agreement, as applicable.

“Indebtedness” means, with respect to any Person, all Liabilities in respect of: (a) borrowed money; (b) indebtedness evidenced by bonds, notes, debentures or similar instruments; (c) capitalized lease obligations; (d) operating lease obligations related to any pieces of material equipment used in the Business; (e) the deferred purchase price of assets, services or securities (other than ordinary trade accounts payable); (f) conditional sale or other title retention agreements; (g) the factoring or discounting of accounts receivable; (h) swap or hedging agreements or arrangements; (i) reimbursement obligations, whether contingent or matured, with respect to letters of credit, bankers’ acceptances, bank overdrafts, surety bonds, other financial guarantees and interest rate protection agreements

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(without duplication of other indebtedness supported or guaranteed thereby); and (j) interest, premium, penalties and other amounts owing in respect of the items described in the foregoing clauses (a) through (i) after giving effect to the Closing; (k) all Indebtedness of the types referred to in clauses (a) through (j) guaranteed in any manner by such Person, whether or not any of the foregoing would appear on a consolidated balance sheet prepared in accordance with GAAP; (l) any unfunded pension liabilities; and (m) any so-called “change of control” payments.

“Intellectual Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof; (b) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate names, Internet domain names, and rights in telephone numbers, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith; (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith; (d) all mask works and all applications, registrations, and renewals in connection therewith; (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals); (f) all computer software (including source code, executable code, data, databases, and related documentation); (g) all advertising and promotional materials, (h) all other proprietary rights; and (i) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).

“Law” means each provision of any currently implemented federal, state, local or foreign law, statute, ordinance, order, code, rule or regulation, promulgated or issued by any Governmental Authority.

“Lease” means any lease, sublease or any other material agreement pertaining to any Real Property, together with all amendments, extensions, renewals, modifications, alterations, guaranties and other changes thereto.

“Liability” means any liability or obligation of whatever kind or nature (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, due or to become due), including, without limitation, any liability for Taxes.

“Licenses and Permits” means any licenses, permits, certificates, certifications, privileges, immunities, notifications, exemptions, classifications, registrations, easements, franchises, approvals, authorizations, orders and other similar rights, or any waivers of the foregoing, issued by any Governmental Authority, and all pending applications therefor or renewals thereof.

“Lien” means any mortgage, pledge, hypothecation, hypothec, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting trust agreement, proxy, interest, equity, option, lien, preemptive right, right of first offer or refusal, charge or other restrictions or limitations of any nature whatsoever, other than restrictions on the offer and sale of securities under federal and state securities Laws.

“Loss” or “Losses” means, with respect to any Person, all Liabilities, obligations, deficiencies, demands, claims, suits, actions, or causes of action, assessments, losses, Taxes, fines, penalties, damages (including punitive, special and consequential damages), lost profits, diminution in value (based on a multiple of earnings or otherwise), costs and expenses (including reasonable and documented attorneys’ fees) sustained or incurred by such Person.

“Material Adverse Effect” or “Material Adverse Change” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, is materially adverse to the business, financial condition, results of operations or prospects (including the achievement or the ability to achieve forecasts of revenue or earnings) of the Seller. For the avoidance of doubt, by way of illustration and not limitation, a “Material Adverse Effect” or “Material Adverse Change” shall include any matter or matters that, alone or in the aggregate, is or are likely to, or could reasonably be expected to, result in Losses to the Seller in excess of ten percent (10%) of the Purchase Price, or that a reasonable investor would consider as significantly and adversely affecting its investment decision with respect to the transactions contemplated herein.

“Measurement Period” shall mean each quarter of the twelve (12) month period beginning on the Closing Date and ending on the one-year anniversary of the Closing Date.

“Ordinary Course of Business” means, in respect of any Person, the ordinary course of such Person’s business, as conducted by any such Person in accordance with past practice and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in this Agreement or any Other Agreement.

“Organizational Documents” means (a) with respect to a corporation, the certificate or articles of incorporation and bylaws; (b) with respect to a limited liability company, the articles of organization or certificate of formation and operating agreement; (c) with respect to any other entity, any charter or similar document adopted or filed in connection with the creation, formation or organization of such entity and any internal governing documents; and (d) any amendment to any of the foregoing.

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“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or government (whether federal, state, county, city or otherwise, including, without limitation, any instrumentality, division, agency or department thereof).

“Post-Closing Covenant” means any covenant, promise, commitment or other obligation (or any portion thereof) made or undertaken by any Party, in this Agreement or any Other Agreement, to the extent performance or fulfillment thereof is required by its terms to be accomplished after the Closing.

“Real Property” means all parcels and tracts of land, together with all buildings, structures, fixtures and improvements located thereon (including those under construction), and all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of such land, including all easements appurtenant to and for the benefit of such land, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.

“Seller’s Knowledge” or “Knowledge of the Seller” means any matter, fact, or thing that is, as of the date hereof or the Closing Date, actually known to the Seller or in the absence of such knowledge the actual knowledge that the Seller would have had if it had undertaken a reasonable inquiry of the fact, matter or circumstance in question.

“Target Earn-Out” means One Hundred Fifty Thousand Dollars ($150,000).

“Target Revenue” means Two Hundred Five Thousand Dollars ($205,000).

“Tax” or “Taxes” means (a) any U.S. federal, state, local, or non-U.S. income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value-added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not, (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being a member of a consolidated, combined, unitary or aggregate group for any Tax period, and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) as a result of being a transferee or successor to any person or as a result of any express or implied obligation to indemnify any other person or payable pursuant to any tax sharing agreement or any other contract relating to the sharing or payment of any such Tax.

“Tax Returns” means any return, declaration, report, schedule, notice, form, claim for refund, or information return or statement (including any attachment thereto and any amendment thereof) filed with or submitted to, or required to be filed with or submitted to, any Taxing Authority.

“Taxing Authority” means any Governmental Authority, domestic or foreign, having jurisdiction over the assessment, determination, collection, or other imposition of any Taxes.

ARTICLE 8

MISCELLANEOUS

8.1 Notices, Consents, etc.   Any notices, consents or other communications required to be sent or given hereunder by any of the Parties shall in every case be in writing and shall be deemed properly served if and when (a) delivered by hand, (b) transmitted by facsimile, e-mail or other means of electronic transmission, (c) delivered by Federal Express or other express overnight delivery service, or (d) sent by registered or certified mail, return receipt requested, to the Parties at the addresses as set forth below or at such other addresses as may be furnished in writing:

If to the Seller or the Equity Holder:

Candid Investigation Services, L.L.C.

6739 Academy NE, Suite 238

Albuquerque, New Mexico 87109

Attention: Seth Markham

E-mail: smarkham@candidllc.com

If to the Buyer:

Contego Services Group, LLC

401 East Las Olas Boulevard, Suite 1650

Fort Lauderdale, Florida 33301

Attention: Christopher A. Pesch

E-mail: cpesch@patnat.com

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Date of service of such notice shall be (x) the date such notice is delivered by hand, facsimile, e-mail or other form of electronic transmission, (y) one (1) business day following the delivery by express overnight delivery service, or (z) three (3) business days after the date of mailing if sent by certified or registered mail.

8.2 Severability. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of any other provision. Upon such determination that any term or other provision is unenforceable or invalid, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a legally acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

8.3 Successors; Assignment. This Agreement will be binding upon, and inure to the benefit of, the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by the Seller without the prior written consent of the Buyer or by the Buyer without the prior written consent of the Seller; provided, however, that the Buyer may assign this Agreement in whole or in part to any of its Affiliates or to any Person which becomes a successor in interest (by purchase of assets or stock, or by merger or otherwise) to the Buyer, and the Buyer may assign its rights under this Agreement to its financing sources.

8.4 Counterparts; Facsimile Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of e-mail, facsimile or other means of electronic transmission, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

8.5 Expenses. Except as provided in Section 5.1.1, each of the Seller and the Buyer shall bear and pay for all of its own costs, fees and expenses (including legal, accounting, investment banking, broker’s, finder’s and other professional or advisory fees and expenses) incurred or to be incurred by it, in each case, in negotiating and preparing this Agreement and in closing and carrying out the transactions contemplated hereby and thereby.

8.6 Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than the State of Delaware.

8.7 Entire Agreement. This Agreement, the Recitals, the Schedules and the Exhibits attached hereto set forth the entire understanding of the Parties with respect to the transactions contemplated hereby, supersede all prior discussions, understandings, agreements and representations and shall not be modified or affected by any offer, proposal, statement or representation, oral or written, made by or for any Party in connection with the negotiation of the terms hereof. This Agreement may be modified only by subsequent instruments signed by the Parties hereto.

8.8 Third Parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any Person, other than the Parties to this Agreement, the Buyer Indemnified Parties or the Seller Indemnified Parties and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

8.9 Disclosure Generally. All Schedules attached hereto are incorporated herein and expressly made a part of this Agreement as though completely set forth herein. All references to this Agreement herein or in any of the Schedules shall be deemed to refer to this entire Agreement, including all Schedules. Information furnished in any particular Schedule shall not be deemed to be included in all other Schedules in which the information is required to be included unless specifically designated with a cross-reference.

8.10 Interpretive Matters. Unless the context otherwise requires, (a) all references to Articles, Sections, Schedules or Exhibits shall mean and refer to Articles, Sections, Schedules or Exhibits in this Agreement; (b) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP; (c) words in the singular or plural include the singular and plural, and pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and neuter; (d) the term “including” shall mean “including, without limitation,” (i.e., by way of example and not by way of limitation); (e) all references to statutes and related regulations shall include all amendments of the same and any successor or replacement statutes and regulations; (f) references to “hereof”, “herein”, “hereby” and similar terms shall refer to this entire Agreement (including the Schedules and Exhibits hereto); (g) references to any Person shall be deemed to mean and include the successors and permitted assigns of such Person (or, in the case of a Governmental Authority, Persons succeeding to the relevant functions of such Person); and (h) whenever this Agreement refers to a number of days, such number shall refer to calendar days, unless such reference is specifically to “business days.” The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) that the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of such representation, warranty or covenant. The section headings of this Agreement are included for reference purposes only and shall not affect the construction or interpretation of any of the provisions of this Agreement. Each of the Parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent

14

and upon the advice of said independent counsel. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise, or rule of strict construction applied, favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the Party that drafted it is of no application and is hereby expressly waived by the Parties hereto.

8.11 Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be settled by arbitration in Fort Lauderdale, Florida before three (3) arbitrators. The arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

8.12 Waiver of Jury Trial. To the extent not prohibited by applicable Law that cannot be waived, each Party hereby irrevocably waives, and covenants that it will not assert any right to trial by jury in any forum in respect of any issue, claim, demand, action or cause of action arising in whole or in part under, related to, based on or in connection with this Agreement or the subject matter hereof, whether now existing or hereafter arising and whether sounding in tort or contract or otherwise. Any Party hereto may file an original counterpart or a copy of this Section 8.12 with any court as written evidence of the consent of each such Party to the waiver of its right to trial by jury.

[Signature page follows]

15

IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement on the date first written above.

BUYER:
Contego Services Group, LLC
By:	/s/ Christopher L. Pizzo
Name:	Christopher L. Pizzo
Title:	Vice-President
SELLER:
Candid Investigation Services, L.L.C.
By:	/s/ Seth Markham
Name:	Seth Markham
Title:	Managing Member
EQUITY HOLDER:
/s/ Seth Markham
Seth Markham

*  All schedules and exhibits to this Exhibit 2.10 have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The schedules include a list of assumed liabilities, wiring instructions, licenses, and customer lists. The exhibits include the assignment and assumption agreement and the bill of sale. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Steven M. Mariano, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 of Patriot National, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 14, 2015

/s/ Steven M. Mariano

Steven M. Mariano

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Thomas C. Shields, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 of Patriot National, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 14, 2015

/s/ Thomas C. Shields

Thomas C. Shields

Executive Vice President, Chief Financial

Officer and Treasurer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Patriot National, Inc. (the “Company”) for the quarterly period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven M. Mariano, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 14, 2015

/s/ Steven M. Mariano

Steven M. Mariano

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

In connection with the Annual Report on Form 10-Q of Patriot National, Inc. (the “Company”) for the quarterly period ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas C. Shields, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 14, 2015

/s/ Thomas C. Shields

Thomas C. Shields

Executive Vice President, Chief Financial

Officer and Treasurer

(Principal Financial Officer)

XML

Fixed Assets and Other Long Term Assets - Other Long Term Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Other long term assets
Capitalized policy and claims administration system development costs	$ 14,709	$ 13,093
Less accumulated depreciation	(4,129)	(3,251)
Other long term assets, net of accumulated depreciation	$ 10,580	$ 9,842

XML

Fair Value Measurement of Financial Liabilities - Summary of Fair Value Measurement of Financial Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Notes payable	$ 40,000	$ 110,821
Capital lease obligation	3,987	4,770
Earnout obligation of acquisitions	9,220
Warrant redemption liability	0	12,879
Total	53,207	128,470
Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Notes payable	40,000	110,821
Capital lease obligation	3,987	4,770
Earnout obligation of acquisitions	9,220
Warrant redemption liability		12,879
Total	$ 53,207	$ 128,470

XML

Capital Lease Obligations - Additional Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Leases [Abstract]
Expiration of monthly payments on capital lease	Dec. 03, 2016
Capital lease obligation monthly lease payments	$ 206,000

XML

Fair Value Measurement of Financial Liabilities - Summary of Reconciliation of the Fair Value of Financial Liabilities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, beginning balance	$ 128,470
Proceeds from issuance of Term Loan A	40,000
Repayment of notes payable	(119,573)
Amortization of warrant and original issue discount on notes payable	8,752
Payments under capital lease	(783)
Earnout obligation of acquisitions	9,220
Exercise of warrants	(9,995)
Decrease in fair value of common stock and warrant redemption liability	(1,385)
Contribute remaining liability balance due to equity warrants	(1,499)
Fair Value, ending balance	53,207
Notes Payable
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, beginning balance	110,821
Proceeds from issuance of Term Loan A	40,000
Repayment of notes payable	(119,573)
Amortization of warrant and original issue discount on notes payable	8,752
Fair Value, ending balance	40,000
Capital Lease Obligations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, beginning balance	4,770
Payments under capital lease	(783)
Fair Value, ending balance	3,987
Earnout Obligation
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Earnout obligation of acquisitions	9,220
Fair Value, ending balance	9,220
Warrant Redemption Liability
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, beginning balance	12,879
Exercise of warrants	(9,995)
Decrease in fair value of common stock and warrant redemption liability	(1,385)
Contribute remaining liability balance due to equity warrants	$ (1,499)

XML

Notes Payable and Lines of Credit - UBS Credit Agreement - Additional Information (Details) (UBS Credit Agreement, USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended
	Aug. 06, 2014	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Credit facility term	5 years
Aggregate principal amount	$ 57.0
Debt instrument maturity date		Aug. 06, 2019
Credit agreement, description		Our borrowings under the UBS Credit Agreement bore interest at a rate equal to the greatest of (x) the base rate in effect on such day, (y) the federal funds rate in effect on such day plus 0.50% and (z) the adjusted LIBOR rate on such day for a one-month interest period plus 1.00%, subject to a minimum rate, plus an applicable margin of 8.00%, which may be increased by additional amounts under certain specified circumstances.
Weighted average interest rate			11.25%
Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Applicable Margin
Debt Instrument [Line Items]
Basis spread on variable rate	8.00%

XML

Business Combinations - Additional Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015 Business	Mar. 31, 2014
Business Acquisition [Line Items]
Number Of Businesses Acquired	4
Business acquisition, contingent consideration liability	$ 9,200,000
Asset impairment charges	0	0
Total revenues	42,993,000	15,808,000
Net income or loss	(4,816,000)	1,502,000
Business Acquisition
Business Acquisition [Line Items]
Total revenues	700,000
Net income or loss	0
Maximum
Business Acquisition [Line Items]
Business Combination Aggregate Earnout Obligation related to acquisitions	$ 9,700,000
Discount rate	30.00%
Maximum | Customer Contracts
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life	10 years
Maximum | Non-compete agreements
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life	2 years
Maximum | Trade Names
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life	7 years
Minimum
Business Acquisition [Line Items]
Discount rate	17.00%
Minimum | Customer Contracts
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life	2 years
Minimum | Non-compete agreements
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life	1 year
Minimum | Trade Names
Business Acquisition [Line Items]
Acquired finite lived intangible assets useful life	5 years

XML

Concentration - Additional Information (Details) (Customer Concentration Risk)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Fee income | Second Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage	10.00%	31.00%
Fee income | Third Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage		7.00%
Fee income receivable | Second Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage	5.00%	8.00%
Fee income receivable | Third Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage	3.00%	2.00%
Guarantee Insurance | Fee income | Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage	83.00%	56.00%
Guarantee Insurance | Fee income receivable | Largest Customer
Concentration Risk [Line Items]
Concentration Risk, Percentage	84.00%	86.00%

XML

Business Combinations (Tables)

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Summary of Purchase Prices of Businesses Acquired

These acquisitions have been accounted for using the acquisition method for recording business combinations, except for DecisionUR, LLC, as further discussed.

Name and Effective Date of Acquisition (In thousands):	Cash Paid		Accrued Liability		Recorded Earnout Payable		Maximum Potential Earnout Payable		Total Recorded Purchase Price
Phoenix Risk Management, Inc (January 31, 2015)	$	1,099	$	—	$	2,790	$	3,000	$	3,889
DecisionUR, LLC (February 5, 2015)		2,240		23		—		—		2,240
Capital & Guaranty, LLC (February 9, 2015)		175		—		175		175		350
TriGen Holding Group, Inc (March 31, 2015)		3,240		3,453		6,255		6,500		9,495
Total	$	6,754	$	3,476	$	9,220	$	9,675	$	15,974

Estimated of Fair Values of the Net Assets Acquired

The following is a summary of the estimated fair values of the net assets acquired at the date of each of the four acquisitions made in the three-months ended March 31, 2015:

In thousands	Total
Assets Acquired:
Cash	$	73
Restricted cash		2,242
Accounts receivable		1,238
Fixed assets		45
Other assets		149
Goodwill		5,591
Intangible assets:
Customer & carrier relationships		7,756
Service contracts		320
Non-compete agreements		889
Developed technology		639
Trade name portfolio		509
Total intangible assets		10,113
Total assets acquired		19,451
Liabilities assumed		3,476
Total net assets acquired	$	15,975

Summary of Unaudited Pro Forma Historical Results

The following is a summary of the unaudited pro forma historical results, as if these entities and Patriot Care Management, which was acquired on August 6, 2014, had been acquired at January 1, 2014 (in thousands, except per share data):

	Three Months Ended March 31,
In thousands	2015			2014
Total revenues		45,176			29,275
Net (loss) income		(4,510	)		909
Basic net (loss) income per share	$	(0.18	)	$	0.06
Diluted net (loss) income per share	$	(0.18	)	$	0.06

XML

Stock-Based Compensation - Additional Information (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option vesting installments	3
Number of stock options awarded	1,180,400
Estimated fair value of stock options	$ 3.1
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock award expiration period	10 years
Stock recognized compensation expense associated with these options	0.3
Total unrecognized compensation cost related to unvested stock options	2.6
Weighted average period of recognition for costs not yet recognized	2 years 8 months 12 days
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock recognized compensation expense associated with these options	2.2
Total unrecognized compensation cost related to unvested stock options	4.8
Weighted average period of recognition for costs not yet recognized	1 year 6 months
Restricted shares granted	525,946
Restricted shares forfeited	22,059
Unvested restricted shares outstanding at end of period	503,887	0
Restricted Stock Awards | Directors Officers and Key Employees
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted shares granted	525,946
Restricted shares forfeited	22,059
Unvested restricted shares outstanding at end of period	503,887
Unvested restricted shares outstanding , total fair value	$ 7.0

XML

Goodwill and Other Intangible Assets - Schedule of Intangible Assets, their Original Fair Value, and their Net Book Values (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Finite Lived Intangible Assets [Line Items]
Gross asset	$ 44,913	$ 34,800
Accumulated amortization	(2,994)	(1,812)
Net asset	41,919	32,988
Service contracts
Finite Lived Intangible Assets [Line Items]
Gross asset	35,120	34,800
Accumulated amortization	(2,907)	(1,812)
Net asset	32,213	32,988
Customer & carrier relationships
Finite Lived Intangible Assets [Line Items]
Gross asset	7,756
Accumulated amortization	(43)
Net asset	7,713
Non-compete agreements
Finite Lived Intangible Assets [Line Items]
Gross asset	889
Accumulated amortization	(22)
Net asset	867
Developed technology
Finite Lived Intangible Assets [Line Items]
Gross asset	639
Accumulated amortization	(19)
Net asset	620
Trade Names
Finite Lived Intangible Assets [Line Items]
Gross asset	509
Accumulated amortization	(3)
Net asset	$ 506

XML

Fixed Assets and Other Long Term Assets - Additional Information (Details)	3 Months Ended
	Mar. 31, 2015
Furniture and Fixtures and Computer Equipment
Property Plant And Equipment [Line Items]
Estimated useful life	3 years
Capitalized Policy and Claims Administration System Development Costs
Property Plant And Equipment [Line Items]
Estimated useful life	5 years

XML

Stock - Based Compensation - Schedule of Stock Option Activity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Number of Shares
Number of shares, options outstanding at beginning of period	0
Number of stock options awarded	1,180,400
Number of shares, options cancelled or forfeited	(44,000)
Number of shares, options outstanding, ending balance	1,136,000
Number of shares, options expected to vest at end of period	1,136,000
Number of shares, options exercisable at end of period	0
Weighted Average Exercise Price Per Share
Weighted average exercise price, Outstanding at beginning of period	$ 0
Weighted average exercise price, Granted	$ 13.98
Weighted average exercise price, Exercised	$ 0
Weighted average exercise price, Canceled or Forfeited	$ 14.00
Weighted average exercise price, Outstanding at end of period	$ 13.98
Weighted average exercise price, Expected to vest	$ 13.98
Weighted average exercise price, Exercisable at end of period	$ 13.98
Weighted Average Remaining Contractual Term (In Years)
Weighted average remaining contractual term of Options Outstanding at end of period	9 years 8 months 12 days
Weighted average remaining contractual term of Options Expected to vest at end of period	9 years 8 months 12 days
Weighted average remaining contractual term of Options Exercisable at end of period	9 years 8 months 12 days
Aggregate Intrinsic Value
Aggregate intrinsic value of Options outstanding at March 31, 2015	$ 2,940
Aggregate intrinsic value of Options Expected to vest at March 31, 2015	2,940
Aggregate intrinsic value of Options exercisable at March 31, 2015	$ 0

XML

Notes Payable and Lines of Credit - PennantPark Loan Agreement - Additional Information (Details) (PennantPark Loan Agreement, USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended
	Aug. 06, 2014	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Borrowing price par value percentage	97.50%
Loan agreement, interest rate description		equal to the sum of (i) the greater of 1.0% or LIBOR and (ii) 11.50%
Loan agreement, minimum interest rate	1.00%
Weighted average interest rate			12.50%
Aggregate shares of common stock purchased by warrants		1,110,555
Greater of 1.0% or LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	11.50%
Initial Tranche
Debt Instrument [Line Items]
Aggregate principal amount	37.8
Additional Tranche
Debt Instrument [Line Items]
Aggregate principal amount	30.8

XML

Description of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2015

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business and Basis of Presentation

1. Description of Business and Basis of Presentation

Description of Business

Patriot National, Inc. (“Patriot National” or “the Company”) is a national provider of comprehensive outsourcing solutions within the workers’ compensation marketplace for insurance companies, employers, local governments and reinsurance captives. We offer an end-to-end portfolio of services to increase business production, contain costs and reduce claims experience for our clients. We leverage our strong distribution relationships, proprietary business processes, advanced technology infrastructure and management expertise to deliver valuable solutions to our clients. We strive to deliver these value-added services to our clients in order to help them navigate the workers’ compensation landscape, ensure compliance with state regulations, handle all aspects of the claims process and ultimately contain costs.

The Company offers two types of services: brokerage, underwriting and policyholder services (or our “brokerage and policyholder services”) and claims administration services (or our “claims administration services”).

We generate fee income for our services from our clients based on (1) a percentage of premiums for the policies we service, (2) the cost savings we achieve for our clients or (3) a fixed fee for a particular service. Unlike our insurance and reinsurance carrier clients, we do not generate underwriting income or assume underwriting risk on workers’ compensation plans. Patriot National is headquartered in Ft. Lauderdale, Florida.

Basis of Presentation

The accompanying unaudited combined financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to such rules and regulations. The unaudited combined financial statements included herein are, in the opinion of management, prepared on a basis consistent with our audited combined financial statements for the year ended December 31, 2014 and include all normal recurring adjustments necessary for a fair presentation of the information set forth. The quarterly results of operations are not necessarily indicative of the results of operations to be reported for subsequent quarters or the full year. These unaudited combined financial statements should be read in conjunction with the audited combined financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. In the preparation of our unaudited combined financial statements as of March 31, 2015, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure therein.

For Contego Services Group, LLC, the Company’s combined subsidiary that is 97% owned, and for DecisionUR, LLC, the Company’s combined subsidiary that is 98.8% owned, the third party holdings of equity interests are referred to as non-controlling interest. The portion of the third party members’ equity (deficit) of Contego Services Group, LLC and DecisionUR, LLC are presented as non-controlling interest in the accompanying combined balance sheets as of March 31, 2015 and December 31, 2014. The Company discloses the following three measures of net income (loss): (1) net income (loss), including noncontrolling interest in subsidiary, (2) net income (loss) attributable to non-controlling interest in subsidiary, and (3) net income (loss).

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Goodwill and Other Intangible Assets - Estimated Amortization Expense for Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Amortization expense
2015 (remaining nine months)	$ 4,362
2016	5,816
2017	5,460
2018	5,372
2019	5,372
Thereafter	15,537
Net asset	$ 41,919	$ 32,988

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Capital Lease Obligations (Tables) (Capital Lease Obligations)

3 Months Ended

Mar. 31, 2015

Capital Lease Obligations

Debt Instrument [Line Items]

Schedule of Future Payments on Capital Lease Obligations Based on Interest Rate Swap Rate

The Company’s obligations for future payments on the capital lease as of March 31, 2015, based on the interest rate swap rate in effect on that date, are as follows:

In thousands	Principal		Interest		Total
Payments on Capital Lease
2015	$	1,565	$	84	$	1,649
2016		2,422		50		2,472
Total	$	3,987	$	134	$	4,121

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Notes Payable and Lines of Credit (Tables)

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Notes Payable

As of March 31, 2015 and December 31, 2014, notes payable were comprised of the following:

In thousands	March 31, 2015			December 31, 2014
	(Unaudited)
PennantPark Loan Agreement	$	—		$	63,285
UBS Credit Agreement		—			56,288
BMO Term Loan A		40,000			—
Gross Notes Payable and Current Portion of Notes Payable		40,000			119,573
Less original issue discount		—			(3,085	)
Less value attributable to stock warrants		—			(5,667	)
Notes Payable and Current Portion of Notes Payable		40,000			110,821
Less current portion of notes payable		(2,000	)		(15,782	)
Notes Payable	$	38,000		$	95,039

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Related Party Transactions - Additional Information (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Related Party Transaction [Line Items]
Net payables to related parties	$ 64
Entities controlled by Mr. Mariano
Related Party Transaction [Line Items]
Net payables to related parties	$ 64

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Notes Payable and Lines of Credit - Notes Payable (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Notes payable, Gross	$ 40,000	$ 119,573
Less original issue discount		(3,085)
Less value attributable to stock warrants		(5,667)
Notes Payable and Current Portion of Notes Payable	40,000	110,821
Less current portion of notes payable	(2,000)	(15,782)
Notes payable	38,000	95,039
PennantPark Loan Agreement
Debt Instrument [Line Items]
Notes payable, Gross		63,285
UBS Credit Agreement
Debt Instrument [Line Items]
Notes payable, Gross		56,288
BMO Term Loan A
Debt Instrument [Line Items]
Notes payable, Gross	$ 40,000

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Significant Assumptions Used in Black-Scholes Model to Estimate Fair Value of Stock Options

The fair values of these stock options were estimated using the Black-Scholes valuation model with the following weighted-average assumptions:

	Three Months Ended March 31,
In thousands	2015
Expected dividend yield		0	%
Risk-free interest rate (1)		0.49	%
Expected volatility (2)		33.02	%
Expected life in years (3)		3.0

(1) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(2) The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

(3) The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

Summary of Stock Options Activity

For the three months ended March 31, 2015, we awarded 1,180,400 options with an estimated fair value of $3.1 million. Option activity for the three months ended March 31, 2015 is as follows:

In thousands, except weighted-average price and remaining contractual term	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		—		$	—
Options granted		1,180		$	13.98
Options exercised		—		$	—
Options cancelled or forfeited		(44	)	$	14.00
Options outstanding at March 31, 2015		1,136		$	13.98		9.7	$	2,940
Options expected to vest at March 31, 2015		1,136		$	13.98		9.7	$	2,940
Options exercisable at March 31, 2015		—		$	13.98		9.7	$	—

Summary of Restricted Stock Awards Activity During the Period

Stock grants for the three months ended March 31, 2015 were as follows:

In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted shares outstanding at December 31, 2014		—		$	—
Restricted shares granted		526		$	13.98
Restricted shares vested		—		$	—
Restricted shares forfeited		(22	)	$	14.00
Unvested restricted shares outstanding as of March 31, 2015		504		$	13.98

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Fair Value Measurement of Financial Liabilities (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Summary of Fair Value Measurement of Financial Liabilities

The Company’s notes payable, capital lease obligation, earn-out obligations of acquisitions, and warrant redemption liability, for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of March 31, 2015 and December 31, 2014 (in thousands):

	Fair Value Measurement, Using
March 31, 2015	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Notes payable	$	—	$	—	$	40,000	$	40,000
Capital lease obligation		—		—		3,987		3,987
Earnout obligation of acquisitions		—		—		9,220		9,220
Warrant redemption liability		—		—		—		—
Total	$	—	$	—	$	53,207	$	53,207
	Fair Value Measurement, Using
December 31, 2014	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Notes payable	$	—	$	—	$	110,821	$	110,821
Capital lease obligation		—		—		4,770		4,770
Warrant redemption liability		—		—		12,879		12,879
Total	$	—	$	—	$	128,470	$	128,470

Summary of Reconciliation of the Fair Value of Financial Liabilities

The following is a reconciliation of the fair value of the Company’s financial liabilities that were measured using significant unobservable (Level 3) inputs (in thousands):

Three Months Ended March 31, 2015	Notes Payable			Capital Lease Obligation			Earnout Obligation		Warrant Redemption Liability			Total
Fair value, January 1, 2015	$	110,821		$	4,770		$	—	$	12,879		$	128,470
Proceeds from issuance of Term Loan A		40,000			—			—		—			40,000
Repayment of notes payable		(119,573	)		—			—		—			(119,573	)
Amortization of warrant and original issue discount on notes payable		8,752			—			—		—			8,752
Payments under capital lease		—			(783	)		—		—			(783	)
Record earnout obligation on acquisitions		—			—			9,220		—			9,220
Exercise of warrants		—			—			—		(9,995	)		(9,995	)
Decrease in fair value of common stock  and warrant redemption liability		—			—			—		(1,385	)		(1,385	)
Contribute remaining liability balance due to equity warrants		—			—			—		(1,499	)		(1,499	)
Fair Value, March 31, 2015	$	40,000		$	3,987		$	9,220	$	—		$	53,207

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Combined Statements of Stockholders Equity (Deficit) (USD $) In Thousands	Total	Common Stock	Additional Paid In Capital	Accumulated Deficit	Non-Controlling Interest
Balance at Dec. 31, 2014	$ (28,261)	$ 14	$ 0	$ (27,930)	$ (345)
Balance (in Shares) at Dec. 31, 2014		18,075
Issuance of common stock	97,831	7	97,824	0	0
Issuance of common stock, shares		7,350
Exercise of detachable common stock warrants, shares		965
Stock compensation	2,535	0	2,535	0	0
Contribution of warrant redemption liability	1,499	0	1,499	0	0
Balance before Net Loss	73,604	21	101,858	(27,930)	(345)
Balance before Net Loss, shares		26,390
Net (Loss) Income	(4,801)	0	0	(4,816)	15
Balance at Mar. 31, 2015	$ 68,803	$ 21	$ 101,858	$ (32,746)	$ (330)
Balance (in Shares) at Mar. 31, 2015		26,390

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Description of Business and Basis of Presentation - Additional Information (Details)	Mar. 31, 2015 Services
Description Of Business And Basis Of Presentation [Line Items]
Number of services offered	2
Contego Services Group, LLC
Description Of Business And Basis Of Presentation [Line Items]
Ownership interest percentage in the subsidiary	97.00%
DecisionUR, LLC
Description Of Business And Basis Of Presentation [Line Items]
Ownership interest percentage in the subsidiary	98.80%

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Goodwill and Other Intangible Assets - Additional Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015 Business
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment of goodwill	$ 0
Goodwill acquired in acquisition	5,591,000
Number Of Businesses Acquired	4
Intangible assets acquired in acquisition	$ 10,100,000

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Stock-Based Compensation - Fair Value of Outstanding Restricted Shares at Grant (Details) (Restricted Stock Awards, USD $)	3 Months Ended
	Mar. 31, 2015
Restricted Stock Awards
Number of Shares
Unvested restricted shares outstanding at beginning of period	0
Restricted shares granted	525,946
Restricted shares vested	0
Restricted shares forfeited	(22,059)
Unvested restricted shares outstanding at end of period	503,887
Weighted-Average Grant-Date Fair Value
Weighted-average fair value, Unvested restricted shares outstanding at December 31, 2014	$ 0
Weighted-average fair value, Restricted shares granted	$ 13.98
Weighted-average fair value, Restricted shares vested	$ 0
Weighted-average fair value, Restricted shares forfeited	$ 14.00
Weighted-average fair value, Unvested restricted shares outstanding as of March 31, 2015	$ 13.98

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Combined Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current Assets
Cash	$ 11,305	$ 4,251
Restricted cash	14,019	6,923
Fee income receivable	3,551	1,942
Fee income receivable from related party	13,740	11,988
Net receivable from related parties		1,773
Deferred costs for initial public offering		2,682
Income taxes receivable	3,400
Other current assets	1,036	430
Total current assets	47,051	29,989
Fixed assets, net of depreciation	1,716	1,879
Deferred loan fees	1,066	5,911
Goodwill	67,084	61,493
Intangible assets	41,919	32,988
Other long term assets	10,580	9,842
Total Assets	169,416	142,102
Liabilities
Deferred claims administration services income	8,305	8,515
Net advanced claims reimbursements	7,428	6,803
Net payables to related parties	64
Income taxes payable		11,548
Accounts payable, accrued expenses and other liabilities	36,079	15,027
Revolver borrowings outstanding	4,750
Current portion of notes payable	2,000	15,782
Current portion of capital lease obligation	2,354	2,332
Total current liabilities	60,980	60,007
Notes payable	38,000	95,039
Capital lease obligation	1,633	2,438
Warrant redemption liability		12,879
Total Liabilities	100,613	170,363
Equity (Deficit)
Preferred stock, $.001 par value; 100,000 shares authorized, no shares issued and outstanding as of March 31, 2015 and December 31, 2014
Common stock, $.001 par value; 1,000,000 shares authorized, 26,390 and 18,075 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively	21	14
Additional paid in capital	101,858
Accumulated deficit	(32,746)	(27,930)
Total Patriot National, Inc. Stockholders' Equity (Deficit)	69,133	(27,916)
Less Non-controlling interest	(330)	(345)
Total Equity (Deficit)	68,803	(28,261)
Total Liabilities and Equity (Deficit)	$ 169,416	$ 142,102

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Notes Payable and Lines of Credit - Senior Secured Credit Facility - Additional Information (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended
	Jan. 22, 2015	Mar. 31, 2015
BMO Term Loan A
Debt Instrument [Line Items]
Amount borrowed under credit agreement	$ 40.0
Increase in size of credit facility	5.0
Percentage of amortization of principal amount of term loan facility during first two years		5.00%
Percentage of amortization of principal amount of term loan facility during third and fourth year		7.50%
Percentage of amortization of principal amount of term loan facility during fifth year		10.00%
BMO Term Loan A | Maximum
Debt Instrument [Line Items]
Increase in size of credit facility	20.0
Revolving Credit Facility
Debt Instrument [Line Items]
Amount borrowed under credit agreement	40.0	4.8
Line of credit available for borrowing		35.2
Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Increase in size of credit facility	5.0
Commitment fee basis points		0.35%
Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Increase in size of credit facility	$ 20.0
Commitment fee basis points		0.50%
Senior Secured Credit Facility
Debt Instrument [Line Items]
Credit facility term		5 years
Increase on margins on loans and fees, percentage	2.00%
Percentage of stock pledged		100.00%
Credit facility covenant terms		(i) a maximum total leverage ratio of total outstanding debt to adjusted EBITDA for the most recently-ended four fiscal quarters of no more than 300% and (ii) a minimum fixed charge coverage ratio of adjusted EBITDA to the sum of cash interest expense (which amount shall be calculated on an annualized basis for the three, six and nine month periods ending March 31, 2015, June 30, 2015 and September 30, 2015) plus income tax expense (or less any income tax benefits) plus capital expenditures plus dividends, share repurchases and other restricted payments plus regularly scheduled principal payments of debt for the same period of a least 150% for the most recently-ended four quarters.
Maximum leverage ratio of total outstanding debt to adjusted EBITDA		300.00%
Minimum fixed charge coverage ratio		150.00%
Dividends payable, maximum percentage of net income		50.00%
Senior Secured Credit Facility | Maximum
Debt Instrument [Line Items]
Percentage of assets guaranteed		5.00%
Senior Secured Credit Facility | LIBOR | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	2.50%
Senior Secured Credit Facility | LIBOR | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	3.25%
Senior Secured Credit Facility | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
Senior Secured Credit Facility | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
Letter of Credit
Debt Instrument [Line Items]
Participation fee payable percentage		0.125%

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Combined Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating Activities
Net (Loss) Income	$ (4,801)	$ 1,523
Adjustments to reconcile net (loss) income to net cash from operating activities:
Net (Income) attributable to business generated by GUI, exclusive of depreciation expense	0	(1,276)
Depreciation and amortization	2,303	1,006
Amortization of loan discounts and loan costs	85	321
Decrease in fair value of warrant redemption liability	(1,385)	0
Stock compensation expense	2,535	0
Write-off of deferred financing and original issue discounts	9,342	0
Provision for uncollectible fee income	150	0
Changes in certain assets and liabilities:
Fee income receivable	(521)	(1,042)
Fee income receivable from related party	(1,752)	693
Other current assets	(592)	(55)
Net payable to related parties	1,747	1,136
Deferred claims administration services income	(210)	283
Net advanced claims reimbursements	625	313
Income taxes payable	(14,948)	274
Accounts payable and accrued expenses	8,359	(469)
Net Cash Provided by Operating Activities	937	2,707
Investment Activities:
Net increase in restricted cash	(4,854)	(269)
Net increase in note receivable from related party	0	(209)
Purchase of fixed assets and other long-term assets	(1,429)	(135)
Acquisitions, net of $73 cash acquired	(6,681)	0
Net Cash Used in Investment Activities	(12,964)	(613)
Financing Activities:
Proceeds from initial public offering, net	98,275	0
Proceeds from senior secured term loan, net of fees	38,891	0
Payment of costs for initial public offering	(2,479)	0
Revolver facility borrowings	4,750	0
Repayment of note payable	(119,573)	(2,100)
Repayment of capital lease obligation	(783)	0
Net Cash Provided by (Used in) Financing Activities	19,081	(2,100)
Increase (decrease) in cash	7,054	(6)
Cash, beginning of period	4,251	1,661
Cash, end of period	$ 11,305	$ 1,655

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Income Taxes - Additional Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Effective income tax rate	42.00%
Deferred Tax Assets, Gross	$ 6,600,000
Unrecognized tax benefits	0	0
Uncertain tax positions	$ 0	$ 0

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Business Combinations - Estimated of Fair Values of the Net Assets Acquired (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Assets Acquired:
Goodwill	$ 67,084,000	$ 61,493,000
Business Acquisition
Assets Acquired:
Cash	73,000
Restricted cash	2,242,000
Accounts receivable	1,238,000
Fixed assets	45,000
Other assets	149,000
Goodwill	5,591,000
Intangible assets:
Total intangible assets	10,113,000
Total assets acquired	19,451,000
Liabilities assumed	3,476,000
Total net assets acquired	15,975,000
Business Acquisition | Customer & carrier relationships
Intangible assets:
Total intangible assets	7,756,000
Business Acquisition | Service contracts
Intangible assets:
Total intangible assets	320,000
Business Acquisition | Non-compete agreements
Intangible assets:
Total intangible assets	889,000
Business Acquisition | Developed technology
Intangible assets:
Total intangible assets	639,000
Business Acquisition | Trade name portfolio
Intangible assets:
Total intangible assets	$ 509,000

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

The Company uses an estimated annual effective tax rate method of computing its interim tax provision. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rates. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. For the three-month period ended March 31, 2015, the tax effects of warrants were treated as a discrete item.

The effective tax rate is based on forecasted annual pre-tax income, permanent differences and statutory tax rates. For the three months ended March 31, 2015, the effective income tax rate was 42%. The main drivers of the difference in the effective tax rate from the statutory rate are warrants, success based fees, and meals and entertainment.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax in multiple states with heavy concentration in Florida, California, and Pennsylvania. The net deferred tax assets as of March 31, 2015 were $6.6 million before valuation allowance. A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefit related to such assets will not be realized. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence in concluding that a full valuation allowance was necessary against its net deferred tax assets at March 31, 2015.

At March 31, 2015 and December 31, 2014, the Company had no unrecognized tax benefits and no amounts recorded for uncertain tax positions.

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Business Combination - Summary of Unaudited Pro Forma Historical Results (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Business Combinations [Abstract]
Total revenues	$ 45,176	$ 29,275
Net (loss) income	$ (4,510)	$ 909
Basic net (loss) income per share	$ (0.18)	$ 0.06
Diluted net (loss) income per share	$ (0.18)	$ 0.06

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Description of Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Description of Business

Description of Business

Patriot National, Inc. (“Patriot National” or “the Company”) is a national provider of comprehensive outsourcing solutions within the workers’ compensation marketplace for insurance companies, employers, local governments and reinsurance captives. We offer an end-to-end portfolio of services to increase business production, contain costs and reduce claims experience for our clients. We leverage our strong distribution relationships, proprietary business processes, advanced technology infrastructure and management expertise to deliver valuable solutions to our clients. We strive to deliver these value-added services to our clients in order to help them navigate the workers’ compensation landscape, ensure compliance with state regulations, handle all aspects of the claims process and ultimately contain costs.

The Company offers two types of services: brokerage, underwriting and policyholder services (or our “brokerage and policyholder services”) and claims administration services (or our “claims administration services”).

We generate fee income for our services from our clients based on (1) a percentage of premiums for the policies we service, (2) the cost savings we achieve for our clients or (3) a fixed fee for a particular service. Unlike our insurance and reinsurance carrier clients, we do not generate underwriting income or assume underwriting risk on workers’ compensation plans. Patriot National is headquartered in Ft. Lauderdale, Florida.

Basis of Presentation

Basis of Presentation

The accompanying unaudited combined financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to such rules and regulations. The unaudited combined financial statements included herein are, in the opinion of management, prepared on a basis consistent with our audited combined financial statements for the year ended December 31, 2014 and include all normal recurring adjustments necessary for a fair presentation of the information set forth. The quarterly results of operations are not necessarily indicative of the results of operations to be reported for subsequent quarters or the full year. These unaudited combined financial statements should be read in conjunction with the audited combined financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. In the preparation of our unaudited combined financial statements as of March 31, 2015, management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure therein.

For Contego Services Group, LLC, the Company’s combined subsidiary that is 97% owned, and for DecisionUR, LLC, the Company’s combined subsidiary that is 98.8% owned, the third party holdings of equity interests are referred to as non-controlling interest. The portion of the third party members’ equity (deficit) of Contego Services Group, LLC and DecisionUR, LLC are presented as non-controlling interest in the accompanying combined balance sheets as of March 31, 2015 and December 31, 2014. The Company discloses the following three measures of net income (loss): (1) net income (loss), including noncontrolling interest in subsidiary, (2) net income (loss) attributable to non-controlling interest in subsidiary, and (3) net income (loss).

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Combined Statements of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Statement Of Cash Flows [Abstract]
Cash acquired for acquisition	$ 73

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Combined Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	100,000,000	100,000,000
Preferred stock, issued	0	0
Preferred Stock, outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	1,000,000,000	1,000,000,000
Common stock, issued	26,390,000	18,075,000
Common Stock, outstanding	26,390,000	18,075,000

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Fair Value Measurement of Financial Liabilities

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurement of Financial Liabilities

9. Fair Value Measurement of Financial Liabilities

With respect to the Company’s financial liabilities, which include notes payable, capital lease obligation, earn-out obligations of acquisitions and warrant redemption liability, the Company has adopted current accounting guidance which establishes the authoritative definition of fair value, establishes a framework for measuring fair value, creates a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. This guidance defines fair value as the price that would be paid to transfer the warrant redemption liability in an orderly transaction between market participants at the measurement date.  As required under current accounting guidance, the Company has identified and disclosed its financial assets in a fair value hierarchy, which consists of the following three levels:

		Definition
Level 1	Observable unadjusted quoted prices in active markets for identical securities.
Level 2	Observable inputs other than quoted prices in active markets for identical securities, including:
	(i)	quoted prices in active markets for similar securities.
	(ii)	quoted prices for identical or similar securities in markets that are not active.
	(iii)	inputs other than quoted prices that are observable for the security (e.g., interest rates, yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, credit risks and default rates).
	(iv)	inputs derived from or corroborated by observable market data by correlation or other means.
Level 3	Unobservable inputs, including the reporting entity’s own data, as long as there is no contrary data indicating market participants would use different assumptions.

The Company’s notes payable, capital lease obligation, earn-out obligations of acquisitions, and warrant redemption liability, for which carrying values were equal to fair values, classified by level within the fair value hierarchy, were as follows as of March 31, 2015 and December 31, 2014 (in thousands):

	Fair Value Measurement, Using
March 31, 2015	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Notes payable	$	—	$	—	$	40,000	$	40,000
Capital lease obligation		—		—		3,987		3,987
Earnout obligation of acquisitions		—		—		9,220		9,220
Warrant redemption liability		—		—		—		—
Total	$	—	$	—	$	53,207	$	53,207
	Fair Value Measurement, Using
December 31, 2014	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Notes payable	$	—	$	—	$	110,821	$	110,821
Capital lease obligation		—		—		4,770		4,770
Warrant redemption liability		—		—		12,879		12,879
Total	$	—	$	—	$	128,470	$	128,470

The following is a reconciliation of the fair value of the Company’s financial liabilities that were measured using significant unobservable (Level 3) inputs (in thousands):

Three Months Ended March 31, 2015	Notes Payable			Capital Lease Obligation			Earnout Obligation		Warrant Redemption Liability			Total
Fair value, January 1, 2015	$	110,821		$	4,770		$	—	$	12,879		$	128,470
Proceeds from issuance of Term Loan A		40,000			—			—		—			40,000
Repayment of notes payable		(119,573	)		—			—		—			(119,573	)
Amortization of warrant and original issue discount on notes payable		8,752			—			—		—			8,752
Payments under capital lease		—			(783	)		—		—			(783	)
Record earnout obligation on acquisitions		—			—			9,220		—			9,220
Exercise of warrants		—			—			—		(9,995	)		(9,995	)
Decrease in fair value of common stock  and warrant redemption liability		—			—			—		(1,385	)		(1,385	)
Contribute remaining liability balance due to equity warrants		—			—			—		(1,499	)		(1,499	)
Fair Value, March 31, 2015	$	40,000		$	3,987		$	9,220	$	—		$	53,207

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 13, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	PN
Entity Registrant Name	Patriot National, Inc.
Entity Central Index Key	0001619917
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		26,390,397

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Related Party Transactions

3 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

10. Related Party Transactions

Fee income from related party represents fee income earned from Guarantee Insurance Company (“Guarantee Insurance”), a related party as described above. Fee income from Guarantee Insurance for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance pursuant to quota share reinsurance agreements between Guarantee Insurance, Patriot Underwriters, Inc.’s (“PUI”) third party insurance company customers and the segregated portfolio cell reinsurers that assume business written by Guarantee Insurance. Certain fee income from third-party segregated portfolio cell reinsurers is remitted to the Company by Guarantee Insurance on behalf of the segregated portfolio cell reinsurers. Fee income from Guarantee Insurance for brokerage, underwriting and policyholder services represents fees for soliciting applications for workers’ compensation insurance for Guarantee Insurance, based on a percentage of premiums written or other amounts negotiated by the parties.

For the three months ended March 31, 2014, the allocation of marketing, underwriting and policy issuance costs from related party in the accompanying combined statements of operations represents costs reimbursed to Guarantee Insurance Group for salaries and other costs incurred by Guarantee Insurance Group to provide its policyholder services. Management fees paid to related party for administrative support services in the accompanying combined statements of operations represent amounts paid to Guarantee Insurance Group for management oversight, legal, accounting, human resources and technology support services. Effective August 6, 2014, the management services agreement pursuant to which these fees were payable was terminated and all costs associated with our operations began to be incurred directly by us. Accordingly, beginning August 6, 2014, such expenses, rather than being reflected in this item, are recorded in the line items to which they relate, which are primarily “salaries and salary related expenses,” “outsourced services” and “other operating expenses.”

As of March 31, 2015, we had a net payable to related parties of $64 thousand due to entities controlled by Mr. Mariano, our founder, Chairman, President and Chief Executive Officer.

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Combined Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Revenues
Fee income	$ 18,369		$ 13,085
Fee income from related party	24,623		2,514
Total fee income and fee income from related party	42,992		15,599
Net investment income	1		209
Total Revenues	42,993		15,808
Expenses
Salaries and related expenses	14,468		3,901
Commission expense	8,889		1,722
Management fees to related party for administrative support services	0		2,187
Outsourced services	2,462		658
Allocation of marketing, underwriting and policy issuance costs from related party	0		610
Other operating expenses	6,331		1,630
Acquisition costs	604		0
Interest expense	1,173		1,313
Depreciation and amortization	2,303		1,006
Amortization of loan discounts and loan costs	85		321
Stock compensation expense	2,535		0
Decrease in fair value of warrant redemption liability	(1,385)		0
Costs from debt payoff	13,681	[1]	0	[1]
Total Expenses	51,146		13,348
Net (Loss) Income before income tax expense	(8,153)		2,460
Income tax (benefit) expense	(3,352)		937
Net (Loss) Income Including Non-Controlling Interest in Subsidiary	(4,801)		1,523
Net Income attributable to non-controlling interest in subsidiary	15		21
Net (Loss) Income	$ (4,816)		$ 1,502
Earnings (Loss) Per Common Share
Basic	$ (0.19)		$ 0.11
Diluted	$ (0.19)		$ 0.10
Weighted Average Common Shares Outstanding
Basic	25,163		14,288
Diluted	25,163		15,499

[1] Costs from debt payoff include $4.3 million early payment penalties on repayment of debt and $9.3 million write-off of related deferred financing fees and original issue discounts.

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Fixed Assets And Other Long Term Assets

3 Months Ended

Mar. 31, 2015

Fixed Assets And Other Long Term Assets [Abstract]

Fixed Assets And Other Long Term Assets

4. Fixed Assets and Other Long Term Assets

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Expenditures for furniture and fixtures and computer equipment are capitalized and depreciated on a straight-line basis over a three-year estimated useful life. Expenditures for leasehold improvements on office space and facilities are capitalized and depreciated on a straight-line basis over the term of the lease.

As of March 31, 2015 and December 31, 2014, our major classes of fixed assets consisted of the following:

In thousands	March 31, 2015			December 31, 2014
	(Unaudited)
Fixed Assets
Computer equipment, software and furniture and fixtures	$	5,961		$	5,722
Leasehold improvements		2,577			2,545
Total fixed assets		8,538			8,267
Less accumulated depreciation		(6,822	)		(6,388	)
Fixed assets, net of accumulated depreciation	$	1,716		$	1,879

Other Long Term Assets

Other long term assets, which are solely comprised of capitalized policy and claims administration system development costs, are also stated at cost, net of accumulated depreciation. Expenditures for capitalized policy and claims administration system development costs are capitalized and amortized on a straight line basis over a five-year estimated useful life.

As of March 31, 2015 and December 31, 2014, other long term assets consisted of the following:

In thousands	March 31, 2015			December 31, 2014
Other long term assets	(Unaudited)
Capitalized policy and claims administration system development costs	$	14,709		$	13,093
Less accumulated depreciation		(4,129	)		(3,251	)
Other long term assets, net of accumulated depreciation	$	10,580		$	9,842

We periodically review all fixed assets and other long term assets that have finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Upon sale or retirement, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts, and any resulting gain or loss is reflected in earnings.

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Business Combinations

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Business Combination

3. Business Combinations

The Company completed four acquisitions during the three-month period ended March 31, 2015. We acquired substantially all of the net assets of the following firms in cash transactions. These acquisitions have been accounted for using the acquisition method for recording business combinations, except for DecisionUR, LLC, as further discussed.

Name and Effective Date of Acquisition (In thousands):	Cash Paid		Accrued Liability		Recorded Earnout Payable		Maximum Potential Earnout Payable		Total Recorded Purchase Price
Phoenix Risk Management, Inc (January 31, 2015)	$	1,099	$	—	$	2,790	$	3,000	$	3,889
DecisionUR, LLC (February 5, 2015)		2,240		23		—		—		2,240
Capital & Guaranty, LLC (February 9, 2015)		175		—		175		175		350
TriGen Holding Group, Inc (March 31, 2015)		3,240		3,453		6,255		6,500		9,495
Total	$	6,754	$	3,476	$	9,220	$	9,675	$	15,974

The Company acquired DecisionUR from Six Points Investment Partners, LLC, a company under common control.  However, results of operations for DUR are included from acquisition date, as its operations are immaterial with respect to the financial statements taken as a whole for all periods presented.

The maximum potential earnout payables disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The amounts recorded as earnout payables, which are primarily based upon the estimated future operating results of the acquired entities over a one- to three-year period subsequent to the acquisition date, are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration in the foregoing table. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our combined statement of earnings when incurred.

The fair value of these earnout obligations is based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement. In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability.  We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the acquired entity to achieve the targets. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations.

The aggregate amount of maximum earnout obligations related to acquisitions made in 2015 was $9.7 million as of March 31, 2015, of which $9.2 million was recorded in our combined balance sheet as of March 31, 2015, based on the estimated fair value of the expected future payments to be made.

The following is a summary of the estimated fair values of the net assets acquired at the date of each of the four acquisitions made in the three-months ended March 31, 2015:

In thousands	Total
Assets Acquired:
Cash	$	73
Restricted cash		2,242
Accounts receivable		1,238
Fixed assets		45
Other assets		149
Goodwill		5,591
Intangible assets:
Customer & carrier relationships		7,756
Service contracts		320
Non-compete agreements		889
Developed technology		639
Trade name portfolio		509
Total intangible assets		10,113
Total assets acquired		19,451
Liabilities assumed		3,476
Total net assets acquired	$	15,975

In accordance with FASB ASC 350, Intangibles—Goodwill and Other, intangible assets, which are comprised solely of the estimated fair value of the service contracts acquired, are being amortized over the estimated life of the customer contracts, ranging from two to ten years, in a manner that, in management’s opinion, reflects the pattern in which the intangible asset’s future economic benefits are expected to be realized. The intangible asset is tested for impairment at least annually (more frequently if certain indicators are present). In the event that management determines that the value of the intangible asset has become impaired, the combined company will incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

Provisional estimates of fair value and the allocation of the purchase price are established at the time of each acquisition and are subsequently reviewed within the first year of operations following the acquisition date to determine the necessity for adjustments. The fair value of the tangible assets and liabilities for each applicable acquisition at the acquisition date approximated their carrying values. We estimate the fair value as the present value of the benefits anticipated from ownership of the subject customer list in excess of returns required on the investment in contributory assets necessary to realize those benefits. The rate used to discount the net benefits was based on a risk-adjusted rate that takes into consideration market-based rates of return and reflects the risk of the asset relative to the acquired business. These discount rates generally ranged from 17% to 30% for our year-to-date 2015 acquisitions. The fair value of non-compete agreements was established using estimated financial projections for the acquired company based on market participant assumptions and various non-compete scenarios.

Customer and carrier relationships, non-compete agreements and trade names related to our acquisitions are amortized using the straight-line method over their estimated useful lives (ten years for customer and carrier relationships, one to two years for non-compete agreements and five to seven years for trade names), while goodwill is not subject to amortization. We use the straight-line method to amortize these intangible assets because the pattern of their economic benefits cannot be reasonably determined with any certainty. We review all of our intangible assets for impairment periodically (at least annually) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing intangible assets, if the fair value is less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist, and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings. Based on the results of impairment reviews during the three-month periods ended March 31, 2015 and 2014, no impairments were required.

Our combined financial statements for the three months ended March 31, 2015 include the operations of the acquired entities from their respective acquisition dates, totaling $0.7 million of revenues and no net income or loss.

The following is a summary of the unaudited pro forma historical results, as if these entities and Patriot Care Management, which was acquired on August 6, 2014, had been acquired at January 1, 2014 (in thousands, except per share data):

	Three Months Ended March 31,
In thousands	2015			2014
Total revenues		45,176			29,275
Net (loss) income		(4,510	)		909
Basic net (loss) income per share	$	(0.18	)	$	0.06
Diluted net (loss) income per share	$	(0.18	)	$	0.06

This unaudited supplemental pro forma financial information includes the results of operations of acquired businesses presented as if they had been combined as of January 1, 2014. The unaudited supplemental pro forma financial information has been provided for illustrative purposes only. The unaudited supplemental pro forma financial information does not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented, or of the results that may be achieved by the combined companies in the future. Future results may vary significantly from the results reflected in the following unaudited supplemental pro forma financial information because of future events and transactions, as well as other factors, many of which are beyond the Company’s control.

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Subsequent Events

3 Months Ended

Mar. 31, 2015

Subsequent Events [Abstract]

Subsequent Events

15. Subsequent Events

On April 8, 2015, TriGen Insurance Solutions, Inc. (“TriGen”), our wholly owned subsidiary, entered into an asset purchase agreement with Hospitality Supportive Systems, LLC, a Pennsylvania limited liability company (“HSS”), and the sole shareholder of HSS effective April 1, 2015, pursuant to which we acquired substantially all of the assets of HSS for an estimated maximum of $9,650,000. Pursuant to the HSS purchase agreement, the Company paid HSS $5,605,000 in cash at closing. HSS will also be entitled to an earn-out payment of up to $4,045,000 twelve months after closing, subject to reduction on a pro-rata basis if EBITDA within the first year does not meet certain targets. On May 14, 2015, due to strong post-acquisition performance, the parties amended the HSS purchase agreement to cap the incentive earn-out at $5,000,000 and to accelerate the base earn-out to be paid as of the date of the amendment.

On April 8, 2015, TriGen also entered into an asset purchase agreement with Selective Risk Management LLC, a Pennsylvania limited liability company (“SRM”), and the shareholders of SRM effective April 1, 2015, pursuant to which we acquired substantially all of the assets of SRM for a maximum of $3,845,000. Pursuant to the SRM purchase agreement, we paid SRM $1,922,500 in cash at closing. SRM will also be entitled to an earn-out payment of up to $1,922,500 twelve months after closing, subject to reduction on a pro-rata basis if EBITDA within the first year does not meet certain targets. On May 14, 2015, due to strong post-acquisition performance, the parties amended the SRM purchase agreement to accelerate the earn-out to be paid as of the date of the amendment.

On April 17, 2015, Vikaran Technology Solutions, Inc. (“VTS”), our wholly owned subsidiary, entered into an agreement and plan of merger with Vikaran Solutions, LLC, an Illinois limited liability company (“Vikaran”), and certain members of Vikaran, pursuant to which Vikaran was merged with and into VTS. The merger closed on April 17, 2015 for a purchase price of $8,500,000 paid in cash at closing.

In connection with the Vikaran transaction, we also entered into a definitive agreement to purchase all of the outstanding stock of Mehta and Pazol Consulting Services Private Limited, an Indian private limited company (“MPCS”). MPCS is Vikaran’s software development center located in Pune, India. The purchase price for MPCS is expected to be approximately $1,500,000.

On April 24, 2015, Patriot Risk Services, Inc (“PRS”), our wholly owned subsidiary, entered into a stock purchase agreement with Corporate Claims Management, Inc. a Missouri corporation (“CCMI”) and the shareholders of CCMI pursuant to which PRS acquired all of the outstanding equity of CCMI for $8,000,000 in cash plus a performance-based earn-out of up to $1,000,000. Pursuant to the CCMI purchase agreement, the Sellers will be entitled to the earn-out in two tranches. The first tranche will be up to $500,000 twelve months after closing, and the second tranche will be up to $500,000 fifteen months after closing, in each case subject to a reduction on a pro-rata basis if revenue during each earn-out period does not meet certain targets. Neither the Company nor PRS assumed any material liabilities under the CCMI purchase agreement. In connection with the transaction, which closed April 24, 2015, CCMI became a direct subsidiary of PRS.

On May 8, 2015, Contego Services Group, LLC (“Contego”), a 97% owned subsidiary of Patriot Services Inc., entered into an asset purchase agreement with Candid Investigation Services, LLC, a New Mexico limited liability company (“Candid”), to acquire substantially all of the assets of Candid for a maximum of $1,500,000.  Pursuant to the asset purchase agreement, the Company paid $900,000 in cash at closing. Candid will be entitled to earn-out payments totaling $600,000 in quarterly payments over twelve months after closing, subject to reduction on a pro-rata basis if revenue during each earn-out period does not meet certain targets.  

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Concentration

3 Months Ended

Mar. 31, 2015

Risks And Uncertainties [Abstract]

Concentration

11. Concentration

For the three months ended March 31, 2015, approximately 83% of total combined fee income and fee income from related party was attributable to contracts with Guarantee Insurance, the Company’s largest customer and a related party, and approximately 10% was attributable to contracts with the Company’s second largest customer. For the three months ended March 31, 2014, approximately 56% of total combined fee income and fee income from related revenues was attributable to contracts with Guarantee Insurance, and approximately 31% and 7% were attributable to contracts with the Company’s second and third largest customers, respectively.

As of March 31, 2015, approximately 84% of combined fee income receivable and fee income receivable from related party was attributable to contracts with Guarantee Insurance, the Company’s largest customer and a related party, and approximately 5% and 3% of combined fee income receivable and fee income receivable from related party were attributable to contracts with the Company’s second and third largest customers, respectively. As of December 31, 2014, approximately 86% of combined fee income receivable and fee income receivable from related party was attributable to contracts with Guarantee Insurance, the Company’s largest customer and a related party, and approximately 8% and 2% of combined fee income receivable and fee income receivable from related party were attributable to contracts with the Company’s second and third largest customers, respectively.

Because fee income from related party for claims administration services is based on the net portion of claims expense retained by Guarantee Insurance, the Company’s revenues attributable to contracts with Guarantee Insurance do not necessarily represent fee income from related party.

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Capital Lease Obligations

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Capital Lease Obligations

7. Capital Lease Obligations

Equipment subject to capital lease assumed is comprised of capitalized policy and claims administration software development costs and related computer equipment. Monthly payments on the capital lease, which expires on December 3, 2016, were approximately $206,000 as of March 31, 2015. Payments may be adjusted in connection with a change in the interest rate swap rate quoted in the Bloomberg Swap Rate Report. The Company’s obligations for future payments on the capital lease as of March 31, 2015, based on the interest rate swap rate in effect on that date, are as follows:

In thousands	Principal		Interest		Total
Payments on Capital Lease
2015	$	1,565	$	84	$	1,649
2016		2,422		50		2,472
Total	$	3,987	$	134	$	4,121

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Subsequent Events - Additional Information (Details) (USD $)	0 Months Ended
	Apr. 08, 2015	May 14, 2015	Apr. 24, 2015	May 08, 2015	Mar. 31, 2015	Apr. 17, 2015
Contego Services Group, LLC
Subsequent Event [Line Items]
Ownership interest percentage in the subsidiary					97.00%
Subsequent Events | Hospitality Supportive Systems, LLC
Subsequent Event [Line Items]
Cash	$ 5,605,000
Earn-out payment	4,045,000
Subsequent Events | Hospitality Supportive Systems, LLC | Maximum
Subsequent Event [Line Items]
Assets acquired	9,650,000
Subsequent Events | Hospitality Supportive Systems, LLC | Post-acquisition performance
Subsequent Event [Line Items]
Earn-out payment		5,000,000
Subsequent Events | Selective Risk Management, LLC
Subsequent Event [Line Items]
Cash	1,922,500
Earn-out payment	1,922,500
Subsequent Events | Selective Risk Management, LLC | Maximum
Subsequent Event [Line Items]
Assets acquired	3,845,000
Subsequent Events | Vikaran Solutions, LLC
Subsequent Event [Line Items]
Cash payment for merger						8,500,000
Subsequent Events | Mehta and Pazol Consulting Services Private Limited
Subsequent Event [Line Items]
Cash payment for merger						1,500,000
Subsequent Events | Corporate Claims Management, Inc
Subsequent Event [Line Items]
Cash			8,000,000
Performance based earn-out			1,000,000
Subsequent Events | Corporate Claims Management, Inc | First Tranche
Subsequent Event [Line Items]
Earn-out payment			500,000
Subsequent Events | Corporate Claims Management, Inc | Second Tranche
Subsequent Event [Line Items]
Earn-out payment			500,000
Subsequent Events | Candid | Contego Services Group, LLC
Subsequent Event [Line Items]
Cash				900,000
Earn-out payment				600,000
Ownership interest percentage in the subsidiary				9700.00%
Subsequent Events | Candid | Maximum | Contego Services Group, LLC
Subsequent Event [Line Items]
Assets acquired				$ 1,500,000

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Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

5. Goodwill and Other Intangible Assets

Goodwill

Goodwill represents the excess of consideration paid over the fair value of net assets acquired. Goodwill is not amortized but is tested at least annually for impairment (or more frequently if certain indicators are present or management otherwise believes it is appropriate to do so). In the event that management determines that the value of goodwill has become impaired, we will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. We determined that there was no impairment as of March 31, 2015.

The Company acquired $5.6 million of goodwill in the first quarter of 2015 as a result of the four acquisitions discussed in Note 3, Business Combinations. Changes in goodwill are summarized as follows:

In thousands
Balance as of December 31, 2014	$	61,493
Goodwill acquired		5,591
Balance as of March 31, 2015	$	67,084

Intangible Assets

Intangible assets that have finite lives are amortized over their useful lives. The company acquired $10.1 million of intangible assets as a result of the four acquisitions discussed in Note 3, Business Combinations. The intangible assets, their original fair values, and their net book values are detailed below as of the dates presented:

	March 31, 2015							December 31, 2014
In thousands	Gross Asset		Accumulated Amortization			Net Asset		Gross Asset		Accumulated Amortization			Net Asset
	(Unaudited)
Intangible Assets
Service contracts	$	35,120	$	(2,907	)	$	32,213	$	34,800	$	(1,812	)	$	32,988
Customer and carrier relationships		7,756		(43	)		7,713		—		—			—
Non-compete agreements		889		(22	)		867		—		—			—
Developed technology		639		(19	)		620		—		—			—
Trade names		509		(3	)		506		—		—			—
Total	$	44,913	$	(2,994	)	$	41,919	$	34,800	$	(1,812	)	$	32,988

The table below reflects the estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter:

In thousands	March 31, 2015
Amortization expense	(Unaudited)
2015 (remaining nine months)	$	4,362
2016		5,816
2017		5,460
2018		5,372
2019		5,372
Thereafter		15,537
Total	$	41,919

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Notes Payable and Lines of Credit

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Notes Payable and Lines of Credit

6. Notes Payable and Lines of Credit

As of March 31, 2015 and December 31, 2014, notes payable were comprised of the following:

In thousands	March 31, 2015			December 31, 2014
	(Unaudited)
PennantPark Loan Agreement	$	—		$	63,285
UBS Credit Agreement		—			56,288
BMO Term Loan A		40,000			—
Gross Notes Payable and Current Portion of Notes Payable		40,000			119,573
Less original issue discount		—			(3,085	)
Less value attributable to stock warrants		—			(5,667	)
Notes Payable and Current Portion of Notes Payable		40,000			110,821
Less current portion of notes payable		(2,000	)		(15,782	)
Notes Payable	$	38,000		$	95,039

Senior Secured Credit Facility

On January 22, 2015, we entered into a Credit Agreement with BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”), and the other lenders party thereto, which provides for a $40.0 million revolving credit facility and a $40.0 million term loan facility (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility has a maturity of five years, and borrowings thereunder bear interest, at our option, at LIBOR plus a margin ranging from 250 basis points to 325 basis points or at base rate plus a margin ranging from 150 basis points to 225 basis points. Margins on all loans and fees will be increased by 2% per annum during the existence of an event of default. The revolving credit facility includes borrowing capacity available for letters of credit and borrowings on same-day notice, referred to as swing line loans. At any time prior to maturity, we have the right to increase the size of the revolving credit facility or the term loan facility by an aggregate amount of up to $20.0 million, but in minimum increments of $5.0 million.

As of March 31, 2015, the outstanding balance under the $40.0 million revolving credit facility was $4.8 million. Accordingly, the Company had $35.2 million available to borrow under the revolving credit facility.

In addition to paying interest on outstanding principal under the Senior Secured Credit Facility, we are required to pay a commitment fee to the Administrative Agent for the ratable benefit of the lenders under the revolving credit facility in respect of the unutilized commitments thereunder, ranging from 35 basis points to 50 basis points, depending on specified leverage ratios. With respect to letters of credit, we are also required to pay a per annum participation fee equal to the applicable LIBOR margin on the face amount of each letter of credit as well as a fee equal to 0.125% on the face amount of each letter of credit issued (or the term of which is extended). This latter 0.125% fee is payable to the issuer of the letter of credit for its own account, along with any standard documentary and processing charges incurred in connection with any letter of credit.

The term loan facility amortizes quarterly beginning the first full quarter after the closing date at a rate of 5% per annum of the original principal amount during the first two years, 7.5% per annum of the original principal amount during the third and fourth years and 10% per annum of the original principal amount during the fifth year, with the remainder due at maturity. Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity. In the event of any sale or other disposition by us or our subsidiaries guaranteeing the Senior Secured Credit Facility of any assets with certain exceptions, we are required to prepay all proceeds received from such a sale towards the remaining scheduled payments of the term loan facility.

In addition, all obligations under the Senior Secured Credit Facility are guaranteed by all of our existing and future subsidiaries, other than foreign subsidiaries to the extent the assets of all foreign subsidiaries that are not guarantors do not exceed 5% of the total assets of us and our subsidiaries on a consolidated basis, and secured by a first-priority perfected security interest in substantially all our and our guaranteeing subsidiaries’ tangible and intangible assets, whether now owned or hereafter acquired, including a pledge of 100% of the stock of each guarantor.

The Senior Secured Credit Facility contains certain covenants that, among other things and subject to significant exceptions, limit our ability and the ability of our restricted subsidiaries to engage in certain business and financing activities and that require us to maintain certain financial covenants, including requirements to maintain (i) a maximum total leverage ratio of total outstanding debt to adjusted EBITDA for the most recently-ended four fiscal quarters of no more than 300% and (ii) a minimum fixed charge coverage ratio of adjusted EBITDA to the sum of cash interest expense (which amount shall be calculated on an annualized basis for the three, six and nine month periods ending March 31, 2015, June 30, 2015 and September 30, 2015) plus income tax expense (or less any income tax benefits) plus capital expenditures plus dividends, share repurchases and other restricted payments plus regularly scheduled principal payments of debt for the same period of a least 150% for the most recently-ended four quarters. The Senior Secured Credit Facility allows us to pay dividends in an amount up to 50% of our net income if certain other financial conditions are met. The Senior Secured Credit Facility contains other restrictive covenants, including those regarding indebtedness (including capital leases) and guarantees; liens; operating leases; investments and acquisitions; loans and advances; mergers, consolidations and other fundamental changes; sales of assets; transactions with affiliates; no material changes in nature of business; dividends and distributions, stock repurchases, and other restricted payments; change in name, jurisdiction of organization or fiscal year; burdensome agreements;. and capital expenditures. The Senior Secured Credit Facility also has events of default that may result in acceleration of the borrowings thereunder, including (i) nonpayment of principal, interest, fees or other amounts (subject to customary grace periods for items other than principal); (ii) failure to perform or observe covenants set forth in the loan documentation (subject to customary grace periods for certain affirmative covenants); (iii) any representation or warranty proving to have been incorrect in any material respect when made; (iv) cross-default to other indebtedness and contingent obligations in an aggregate amount in excess of an amount to be agreed upon; (v) bankruptcy and insolvency defaults (with grace period for involuntary proceedings); (vi) inability to pay debts; (vii) monetary judgment defaults in excess of an agreed upon amount; (viii) ERISA defaults; (ix) change of control; (x) actual invalidity or unenforceability of any loan document, any security interest on any material portion of the collateral or asserted (by any loan party) invalidity or unenforceability of any security interest on any collateral; (xi) actual or asserted (by any loan party) invalidity or unenforceability of any guaranty; (xii) material unpaid, final judgments that have not been vacated, discharged, stayed or bonded pending appeal within a specified number of days after the entry thereof; and (xiii) any other event of default agreed to by us and the Administrative Agent.

As of March 31, 2015, we were in compliance with the financial and other restrictive covenants under our outstanding material debt obligations, including our Senior Secured Credit Facility.

UBS Credit Agreement

On August 6, 2014, in connection with the Patriot Care Management Acquisition, we and certain of our subsidiaries entered into a credit agreement with UBS Securities LLC (the “UBS Credit Agreement”), which provided for a five-year term loan facility in an aggregate principal amount of $57.0 million that would mature on August 6, 2019. The loan was secured by the common stock of Patriot Care Management, Inc. (“PCM”) and guaranteed by Guarantee Insurance Group and its wholly owned subsidiaries. Following our initial public offering (the “IPO”), we prepaid all outstanding borrowings under the UBS Credit Agreement, including accrued interest and applicable prepayment premium.

Our borrowings under the UBS Credit Agreement bore interest at a rate equal to the greatest of (x) the base rate in effect on such day, (y) the federal funds rate in effect on such day plus 0.50% and (z) the adjusted LIBOR rate on such day for a one-month interest period plus 1.00%, subject to a minimum rate, plus an applicable margin of 8.00%, which may be increased by additional amounts under certain specified circumstances. The weighted average interest rate under the UBS Credit Agreement for the year ended December 31, 2014 was 11.25%.  This instrument was repaid in full upon closing on the Senior Secured Credit Facility.

PennantPark Loan Agreement

On August 6, 2014, in connection with the GUI Acquisition, we and certain of our subsidiaries, as borrowers, and certain of our other subsidiaries and certain affiliated entities, as guarantors, entered into a loan agreement with the PennantPark Entities as lenders (the “PennantPark Loan Agreement”). Following our IPO, we prepaid all outstanding borrowings under the PennantPark Loan Agreement, including accrued interest and applicable prepayment premium.

Borrowings under the PennantPark Loan Agreement were comprised of (i) an initial tranche in an aggregate principal amount of approximately $37.8 million, and (ii) an additional tranche in an aggregate principal amount of approximately $30.8 million of new borrowings. Our borrowings under the PennantPark Loan Agreement were funded at a price equal to 97.5% of the par value thereof and bore interest equal to the sum of (i) the greater of 1.0% or LIBOR and (ii) 11.50%. The weighted average interest rate under the PennantPark Loan Agreement for the year ended December 31, 2014 was 12.5%.

All obligations under the PennantPark Loan Agreement were guaranteed by certain of our subsidiaries as well as several affiliated entities, including GUI, and were generally secured by the tangible and intangible property of the borrowers and the guarantors. In connection with both tranches of the PennantPark Loan Agreement, we issued warrants to the PennantPark Entities to purchase an aggregate of 1,110,555 shares of our common stock. This instrument was repaid in full upon closing on the Senior Secured Credit Facility.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

8. Stock-Based Compensation

Omnibus Incentive Plan

On January 15, 2015, the Board of Directors approved the Patriot National, Inc. 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), subject to and with effect upon approval of such plan by the stockholders of the Company.

The compensation committee of our board of directors determines the participants under the Omnibus Incentive Plan. The Omnibus Incentive Plan provides for non-qualified and incentive stock options, restricted stock and restricted stock units, any or all of which may be made contingent upon the achievement of performance criteria. Subject to the Omnibus Incentive Plan limits, the compensation committee has the discretionary authority to determine the size of an award.

Shares of our common stock available for issuance under the Omnibus Incentive Plan include authorized and unissued shares of common stock or authorized and issued shares of common stock reacquired and held as treasury shares or otherwise, or a combination thereof. The number of available shares is reduced by the aggregate number of shares that become subject to outstanding awards granted under the Omnibus Incentive Plan. To the extent that shares subject to an outstanding award granted under either the Omnibus Incentive Plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or by reason of the settlement of such award in cash, then such shares will again be available for grant under the Omnibus Incentive Plan. Shares withheld to satisfy tax withholding requirements upon the vesting of awards other than stock options will also be available for grant under the Omnibus Incentive Plan. Shares that are used to pay the exercise price of an option, shares delivered to or withheld by us to pay withholding taxes related to stock options, and shares that are purchased on the open market with the proceeds of an option exercise, may not again be made available for issuance.

Stock Options

In the three months ended March 31, 2015, we issued stock options as incentive compensation for officers and certain key employees on the date of the Initial Public Offering. The exercise price of each stock option is the closing market price of our common stock on the date of grant. The options will vest in three equal annual installments on the first, second and third anniversaries of grant and expire 10 years after the grant date. The fair values of these stock options were estimated using the Black-Scholes valuation model with the following weighted-average assumptions:

	Three Months Ended March 31,
In thousands	2015
Expected dividend yield		0	%
Risk-free interest rate (1)		0.49	%
Expected volatility (2)		33.02	%
Expected life in years (3)		3.0

(1) The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

(2) The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

(3) The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

For the three months ended March 31, 2015, we awarded 1,180,400 options with an estimated fair value of $3.1 million. Option activity for the three months ended March 31, 2015 is as follows:

In thousands, except weighted-average price and remaining contractual term	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding at December 31, 2014		—		$	—
Options granted		1,180		$	13.98
Options exercised		—		$	—
Options cancelled or forfeited		(44	)	$	14.00
Options outstanding at March 31, 2015		1,136		$	13.98		9.7	$	2,940
Options expected to vest at March 31, 2015		1,136		$	13.98		9.7	$	2,940
Options exercisable at March 31, 2015		—		$	13.98		9.7	$	—

As of March 31, 2015, we recognized $0.3 million of stock compensation expense associated with these options, and there was $2.6 million of total unrecognized stock compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of 2.7 years.

Restricted Stock Awards

In 2015, we issued 525,946 restricted shares as incentive compensation for officers, directors, and certain key employees on the date of the Initial Public Offering. Subsequent to issuance, 22,059 restricted shares were forfeited, leaving 503,887 remaining restricted shares outstanding as of March 31, 2015, all of which were unvested. The fair value of outstanding restricted shares at grant date was $7.0 million. Stock grants for the three months ended March 31, 2015 were as follows:

In thousands, except weighted-average fair value price	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested restricted shares outstanding at December 31, 2014		—		$	—
Restricted shares granted		526		$	13.98
Restricted shares vested		—		$	—
Restricted shares forfeited		(22	)	$	14.00
Unvested restricted shares outstanding as of March 31, 2015		504		$	13.98

As of March 31, 2015, we recognized $2.2 million of stock compensation expense associated with these restricted shares, and there was $4.8 million of total unrecognized stock compensation cost related to unvested restricted stock to be recognized over a weighted average period of 1.5 years.

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Business Combinations - Summary of Purchase Prices of Businesses Acquired (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid	$ 6,754
Business acquisition, accrued liability	3,476
Business acquisition, recorded earnout payable	9,220
Business acquisition, maximum potential earnout payable	9,675
Business acquisition, total recorded purchase price	15,974
Phoenix Risk Management, Inc; January 31, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid	1,099
Business acquisition, accrued liability	0
Business acquisition, recorded earnout payable	2,790
Business acquisition, maximum potential earnout payable	3,000
Business acquisition, total recorded purchase price	3,889
DecisionUR, LLC
Business Acquisition [Line Items]
Business acquisition, cash paid	2,240
Business acquisition, accrued liability	23
Business acquisition, recorded earnout payable	0
Business acquisition, maximum potential earnout payable	0
Business acquisition, total recorded purchase price	2,240
Capital & Guaranty, LLC; February 9, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid	175
Business acquisition, accrued liability	0
Business acquisition, recorded earnout payable	175
Business acquisition, maximum potential earnout payable	175
Business acquisition, total recorded purchase price	350
TriGen Holding Group, Inc; March 31, 2015
Business Acquisition [Line Items]
Business acquisition, cash paid	3,240
Business acquisition, accrued liability	3,453
Business acquisition, recorded earnout payable	6,255
Business acquisition, maximum potential earnout payable	6,500
Business acquisition, total recorded purchase price	$ 9,495

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Stock-Based Compensation - Summary of Significant Assumptions Used in Black-Scholes Option Pricing Model to Estimate Fair Value of Stock Options Granted to Employees (Details)	3 Months Ended
	Mar. 31, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Expected dividend yield	0.00%
Risk-free interest rate	0.49%	[1]
Expected volatility	33.02%	[2]
Expected life in years	3 years	[3]

[1] The risk-free interest rate for the periods within the contractual term of the options is based on the U.S. Treasury yield curve in effect at the time of the grant.

[2] The expected volatility is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate based primarily on our and our peers' historical data.

[3] The expected life is the period of time, on average, that participants are expected to hold their options before exercise based primarily on our historical data.

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Warrant Redemption Liability

3 Months Ended

Mar. 31, 2015

Warrants And Rights Note Disclosure [Abstract]

Warrant Redemption Liability

13. Warrant Redemption Liability

There was no warrant redemption liability as of March 31, 2015.  Concurrent with our IPO and repayment of the PennantPark debt on January 22, 2015, the PennantPark Entities exercised 965,700 of their 1,110,555 detachable common stock warrants for common stock at an exercise price of $2.67 per share. The PennantPark Entities waived their put right on the remaining 144,855 detachable common stock warrants.  By eliminating the put right, the PennantPark Entities cannot require the Company to redeem the remaining detachable common stock warrants for cash, thereby eliminating the warrant redemption liability previously required. The remaining 144,855 detachable common stock warrants can be used to purchase shares of the Company’s common stock at an exercise price of $2.67 per share, and expire on November 27, 2023.

On November 27, 2013, the Company issued 626,295 detachable common stock warrants to new lenders to purchase shares of the Company’s common stock at an exercise price of $2.67 per share. The warrants expire on November 27, 2023. Prior to the exercise and removal of the put right, at the fifth anniversary date of the warrants and any time after the eighth anniversary date of the warrants, the warrant holders could have required the Company to redeem the warrants for cash, in an amount equal to the estimated fair value of the warrants, as determined by an independent appraisal, less the total exercise price of the redeemed warrants. The value of the warrants was recorded as a discount on the loan and a warrant liability on November 27, 2013. The discount on the loan was amortized as interest expense over the term of the loan. The Company attributed a value to these warrants of approximately $7.3 million as of December 31, 2014.

On August 6, 2014, in connection with the additional tranche described in Note 6, Notes Payable and Lines of Credit, the Company issued 484,260 detachable common stock warrants to the PennantPark Entities to purchase shares of the Company’s common stock at an exercise price of $2.67 per share. The warrants expire on November 27, 2023. Prior to the exercise and removal of the put right, at the fifth anniversary date of the warrants and any time after the eighth anniversary date of the warrants, the warrant holders could have required the Company to redeem the warrants for cash, in an amount equal to the estimated fair value of the warrants, as determined by an independent appraisal, less the total exercise price of the redeemed warrants. The value of the warrants was recorded as a discount on the loan and a warrant liability on August 6, 2014. The discount on the loan was amortized as interest expense over the term of the loan. The Company attributed a value to these warrants of approximately $5.6 million as of December 31, 2014.

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Fixed Assets And Other Long Term Assets(Tables)

3 Months Ended

Mar. 31, 2015

Fixed Assets And Other Long Term Assets [Abstract]

Major Classes of Fixed Assets

As of March 31, 2015 and December 31, 2014, our major classes of fixed assets consisted of the following:

In thousands	March 31, 2015			December 31, 2014
	(Unaudited)
Fixed Assets
Computer equipment, software and furniture and fixtures	$	5,961		$	5,722
Leasehold improvements		2,577			2,545
Total fixed assets		8,538			8,267
Less accumulated depreciation		(6,822	)		(6,388	)
Fixed assets, net of accumulated depreciation	$	1,716		$	1,879

Other Long Term Assets

As of March 31, 2015 and December 31, 2014, other long term assets consisted of the following:

In thousands	March 31, 2015			December 31, 2014
Other long term assets	(Unaudited)
Capitalized policy and claims administration system development costs	$	14,709		$	13,093
Less accumulated depreciation		(4,129	)		(3,251	)
Other long term assets, net of accumulated depreciation	$	10,580		$	9,842

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Capital Lease Obligations - Schedule of Capital Lease Obligations for Future Payments Based on Interest Rate Swap Rate (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Principal
2015	$ 1,565
2016	2,422
Total	3,987
Interest
2015	84
2016	50
Total	134
Payments on Capital Lease
2015	1,649
2016	2,472
Total	$ 4,121

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Goodwill and Other Intangible Assets - Summary of Changes in Goodwill (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Balance as of December 31, 2014	$ 61,493
Goodwill acquired	5,591
Balance as of March 31, 2015	$ 67,084

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Combined Statements of Operations (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2015
Income Statement [Abstract]
Early payment penalties on repayment of debt	$ 4,300,000
Write-off of deferred financing and original issue discounts	$ 9,342,000

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Effect of Recently Issued Financial Accounting Standards

3 Months Ended

Mar. 31, 2015

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Effect of Recently Issued Financial Accounting Standards

2. Effect of Recently Issued Financial Accounting Standards

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-03, Simplifying the Presentation of Debt Issuance Costs. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. The update requires retrospective application. ASU 2015-03 is effective for fiscal years, and interim reporting periods within those years, beginning after December 15, 2015. Early adoption is permitted but we do not anticipate electing early adoption.

In August 2014, the FASB issued ASU 2014-15 regarding Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements – Going Concern. The updated guidance related to determining whether substantial doubt exists about an entity's ability to continue as a going concern. The amendment provides guidance for determining whether conditions or events give rise to substantial doubt that an entity has the ability to continue as a going concern within one year following issuance of the financial statements and requires specific disclosures regarding the conditions or events leading to substantial doubt. The updated guidance is effective for annual reporting periods and interim periods within those annual periods beginning after December 15, 2016. Earlier adoption is permitted, but we do not anticipate electing early adoption. We do not expect the adoption of this guidance to have a material impact on our combined financial statements.

In May 2014, the FASB issued ASU 2014-09 regarding ASC Topic 606, Revenue from Contracts with Customers. The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. For a publicly-held entity, this guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is not permitted. We are currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

In April 2014, the FASB issued ASU 2014-08 regarding ASC Topics 205 and 360, Reporting Discontinued Operations. The updated guidance related to reporting discontinued operations and disclosures of disposals of components of an entity. Under the amendment, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. Additionally, the elimination of the component's operations, cash flows and significant continuing involvement conditions have been removed. Further, an equity method investment could be reported as discontinued operations. The updated guidance is effective prospectively for all disposals or classifications as held for sale that occur within annual periods beginning after December 15, 2014. The adoption of this guidance has not had a material impact on our combined financial statements.

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Warrant Redemption Liability - Additional Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Jan. 22, 2015	Nov. 27, 2013	Aug. 06, 2014
Class Of Warrant Or Right [Line Items]
Warrant redemption liability		$ 12,879,000
Warrants outstanding, value		5,667,000
Common Stock | Previous Lenders
Class Of Warrant Or Right [Line Items]
Warrant redemption liability	0
Warrant exercised detachable common stock			965,700
Warrant issued detachable common stock			1,110,555
Exercise price of warrants			$ 2.67
Aggregate shares of common stock purchased by warrants			144,855
Warrants expiration date	Nov. 27, 2023
Common Stock | New Lenders
Class Of Warrant Or Right [Line Items]
Warrant issued detachable common stock				626,295
Exercise price of warrants				$ 2.67
Warrants expiration date	Nov. 27, 2023
Warrants outstanding, value		7,300,000
Common Stock | Additional Tranche
Class Of Warrant Or Right [Line Items]
Warrant issued detachable common stock					484,260
Exercise price of warrants					$ 2.67
Warrants expiration date	Nov. 27, 2023
Warrants outstanding, value		$ 5,600,000

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Goodwill

Changes in goodwill are summarized as follows:

In thousands
Balance as of December 31, 2014	$	61,493
Goodwill acquired		5,591
Balance as of March 31, 2015	$	67,084

Schedule of Intangible Assets Including Original Fair Values and Net Book Values

The intangible assets, their original fair values, and their net book values are detailed below as of the dates presented:

	March 31, 2015							December 31, 2014
In thousands	Gross Asset		Accumulated Amortization			Net Asset		Gross Asset		Accumulated Amortization			Net Asset
	(Unaudited)
Intangible Assets
Service contracts	$	35,120	$	(2,907	)	$	32,213	$	34,800	$	(1,812	)	$	32,988
Customer and carrier relationships		7,756		(43	)		7,713		—		—			—
Non-compete agreements		889		(22	)		867		—		—			—
Developed technology		639		(19	)		620		—		—			—
Trade names		509		(3	)		506		—		—			—
Total	$	44,913	$	(2,994	)	$	41,919	$	34,800	$	(1,812	)	$	32,988

Schedule of Estimated Future Amortization Expense of Intangible Assets

The table below reflects the estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter:

In thousands	March 31, 2015
Amortization expense	(Unaudited)
2015 (remaining nine months)	$	4,362
2016		5,816
2017		5,460
2018		5,372
2019		5,372
Thereafter		15,537
Total	$	41,919

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Fixed Assets and Other Long Term Assets - Major Classes of Fixed Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fixed Assets
Fixed assets	$ 8,538	$ 8,267
Less accumulated depreciation	(6,822)	(6,388)
Fixed assets, net of accumulated depreciation	1,716	1,879
Computer Equipment, Software and Furniture and Fixtures
Fixed Assets
Fixed assets	5,961	5,722
Leasehold Improvements
Fixed Assets
Fixed assets	$ 2,577	$ 2,545

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

Contractual Obligations and Commitments

In connection with the Senior Secured Credit Facility as described in Note 6, Notes Payable and Lines of Credit, the common stock of the Company and the common stock or units of each of the Company’s wholly and majority owned subsidiaries were pledged as collateral.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

The Company has employment agreements with certain executives and other employees, which provide for compensation and certain other benefits and for severance payments under certain circumstances. The employment agreements contain clauses that become effective upon a change of control of the Company. Upon the occurrence of any of the defined events in the employment agreements, the Company would be obligated to pay certain amounts to the relevant employees.

The Company maintains cash at various financial institutions, and, at times, balances may exceed federally insured limits. Management does not believe this results in any material effect on the Company’s financial position or results of operations.

In the normal course of business, the Company may be party to various legal actions that management believes will not result in any material effect on the Company’s financial position or results of operations.