EXHIBIT 10.1
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered into
as of November 11, 2004, by and among Business Tech Solutions Group, Inc. a New
Jersey corporation ("Seller"), Xxxxx Xxxxxx, an individual ("Xxxxxx") and BTSG
Acquisition Corp. , a New Jersey corporation ("Buyer"), a wholly owned
subsidiary of SWK Technologies, Inc., a Delaware corporation ("SWK").
RECITALS
WHEREAS, the Seller has developed, owns and licenses the enhancements to Best
Software's BusinessWorks software, as well as other software (the "Software
Assets"), including but not limited to the related source code, documentation
and related Intellectual Property (as defined in Section 1.1) relating to the
Software Assets; and
WHEREAS, the Seller wishes to sell the Software Assets, including but not
limited to the source code and all documentation related to the Software Assets,
including certain other assets of the Seller; and
WHEREAS, the Buyer wishes to purchase the Software Assets and other certain
assets of the Seller;
NOW THEREFORE, Seller and Buyer agree as follows:
ARTICLE I.
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the terms below shall have the
following meanings:
"Action" shall mean any action, claim, suit, arbitration, inquiry,
subpoena, discovery request, proceeding or investigation, or threat thereof, by
or before any court or grand jury, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person and any member, general partner, director, officer or employee of
such Person. For purposes of this definition of Affiliate, "control" shall mean
the power of one or more Persons to direct the affairs of the Person controlled
by reason of ownership of voting stock, contract or otherwise.
"Damages" shall mean any and all costs, losses, damages, liabilities,
demands, claims, suits, actions, judgments, causes of action, assessments or
expenses, including interest, penalties, fines and attorneys' fees incident
thereto, incurred in connection with any claim for indemnification arising out
of this Agreement and any and all amounts paid in settlement of any such claim.
"Intellectual Property" shall mean all copyrights, copyright
registrations, proprietary processes, trade secrets, license rights,
specifications, technical manuals and data, drawings, inventions, designs,
patents, patent applications, mask works, tradenames, trademarks, service marks,
product information and data, know-how and development work-in-progress,
customer lists, software, business correspondence and marketing plans and other
intellectual or intangible property
that comprise or are necessary to the use of the Software Assets, whether
pending, applied for or issued, whether filed in the United States or in other
countries, including, without limitation, all associated goodwill; all things
authored, discovered, developed, made, perfected, improved, designed,
engineered, acquired, produced, conceived or first reduced to practice by Seller
or any of its employees or agents that are embodied in, derived from or relate
to the Software Assets, in any stage of development, including, without
limitation, modifications, enhancements, designs, concepts, techniques, methods,
ideas, flow charts, coding sheets, notes and all other information relating to
the Software Assets.
"Knowledge" shall mean an individual shall be deemed to have
"Knowledge" of a particular fact or other matter if such individual is actually
aware of such fact or other matter or if a prudent individual could be expected
to discover or otherwise become aware of such fact or other matter in the course
of conducting a diligent and comprehensive investigation concerning the truth or
existence of such fact or other matter. Seller shall be deemed to have
"Knowledge" of a particular fact or other matter if any officer or other
representative of Seller has Knowledge of such fact or other matter.
"Person" shall mean any person or entity, whether an individual,
trustee, corporation, general partnership, limited partnership, trust,
unincorporated organization, limited liability company, business association,
firm, joint venture, or governmental agency or authority.
"Purchased Assets" shall have the meaning stated in Section 2.1 in the
Agreement.
"Software Assets" shall have the meaning stated in the Recitals to
this Agreement.
"Taxes" shall mean all taxes, however denominated, including any
interest, penalties or other additions to tax that may become payable in respect
thereof, (i) imposed by any federal, territorial, state, local or foreign
government or any agency or political subdivision of any such government, for
which Buyer could become liable as successor to or transferee of the Software
Assets or which could become a charge against or lien on the Software Assets,
which taxes shall include, without limiting the generality of the foregoing, all
sales and use taxes, ad valorem taxes, excise taxes, business license taxes,
occupation taxes, real and personal property taxes, stamp taxes, environmental
taxes, real property gains taxes, transfer taxes, payroll and employee
withholding taxes, unemployment insurance contributions, social security taxes
and other governmental charges, and other obligations of the same or of a
similar nature to any of the foregoing, which are required to be paid, withheld
or collected, or (ii) any liability for amounts referred to in (i) as a result
of any obligations to indemnify another person.
ARTICLE II.
PURCHASE AND SALE OF SOFTWARE ASSETS
2.1 TRANSFER OF PURCHASED ASSETS. Pursuant to the terms and subject to the
conditions of this Agreement, in exchange for the consideration set forth in
Section 2.2 below, at the Closing, Seller shall sell, assign and deliver to
Buyer, and Buyer shall purchase from Seller, the Software Assets, as well as the
other assets listed on Schedule 2.1 (hereinafter collectively referred to as the
"Purchased Assets").
2.2 PURCHASE PRICE/ PAYMENT PROCEDURE. As consideration for the Purchased
Assets, Buyer shall tender Seller the consideration set forth below:
(a) The total purchase price of Thirty-five Thousand Dollars ($35,000)
(the "Purchase Price") payable in the form of Trey Resources, Inc. Class A
Common Stock (the "Buyer's Stock).
(b) The number of shares of Buyer's Stock shall be calculated by
dividing the Purchase Price by the average closing price of the Trey Resources,
Inc. Class A Common Stock as quoted on the NASD OTC Bulletin Board for five (5)
trading days prior to the Closing Date.
(c) The Buyer's Stock shall not be registered under the Securities Act
of 1933, as amended, (the "Act"), but may be traded pursuant to Rule 144 as
promulgated by the Securities Exchange Commission pursuant to the Act. The Buyer
shall use all reasonable efforts to have their counsel provide an opinion so
that the Buyer's Stock may be traded pursuant to Rule 144.
(d) The Buyer shall pay the Seller a royalty equal to fifteen percent
(15%) on the net sales of the Seller's proprietary Software Assets for a period
of three (3) years following the Closing Date.
2.3 LIABILITIES OF SELLER. The Seller will not assign and the Buyer will
not assume any liabilities of the Seller, except for those liabilities included
in Schedule 2.3 attached hereto.
2.4 SELLER'S ACCOUNT RECEIVABLES. The Seller will not sell and the Buyer
will not purchase the Seller's account receivables recorded on or prior to the
Closing Date, but the Buyer will attempt make reasonable attempts to collect
monies owed the Seller from the customers listed on the Customer List appearing
in Schedule 2.1 herein and thereafter, remit such collections to the Seller
within thirty (30) days from the date of collection.
2.5 SELLER'S ACCOUNTS PAYABLE. Seller hereby authorizes Buyer to pay
first, from the proceeds of the collection of Seller's accounts receivable in
accordance with Paragraph 2.4 herein, all of Seller's accounts payable which
were outstanding at the time of the closing of the transaction contemplated by
this Agreement. Notwithstanding the above, the Buyer shall not assume any
accounts payable obligations of the Seller, except for those payables described
in Schedule 2.3 herein.
ARTICLE III.
CLOSING
3.1 CLOSING. The closing of the transactions contemplated herein (the
"Closing") shall be held at 10:00 a.m. Eastern Standard Time at the offices of
Trey Resources, Inc. 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000, on November
11, 2004, or at such other time and place as the parties may agree (the "Closing
Date") provided that all of the Closing conditions set forth in Section 3.3
hereof shall have occurred.
3.2 DELIVERIES. Together with an executed counterpart of this Agreement,
the following items shall be delivered by the parties at the Closing:
(a) BY BUYER. Buyer shall deliver:
(i) a certificate evidencing the Buyer's Stock;
(ii) the Employment Agreement described in Section 6.1(a)
executed by Buyer.
(b) BY SELLER. Seller shall deliver to Buyer:
(iii) one or more Bills of Sale, in form and substance
satisfactory to Buyer and sufficient to convey the Purchased Assets to Buyer;
(iv) such electronic and paper copies and representations of the
Intellectual Property as may in Buyer's reasonable judgment be necessary to
convey the Intellectual Property to Buyer;
(v) the Employment Agreement described in Section 6.1(a) executed
by Seller;
(vi) an Assignment of Seller's rights to the corporate name
"Business Tech Solutions Group, Inc.
(vii) such other documents and instruments as are reasonably
necessary to consummate the transactions contemplated hereby.
(viii) delivery of all source code and documentation related to
the Software Assets.
(ix) delivery of all consents, approvals, and assignments
necessary to consummate the transaction contemplated under this Agreement
including, but not limited to: landlord's consent to assignment of the premises
located at 000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxx, third party software vendors
consents and reseller agreement consents. At such time as landlord consents to
the assignment of Seller's lease to Buyer, the security deposit currently posted
by Seller with the Landlord shall be remitted back to Seller.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
4.1 ORGANIZATION. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey and has full
corporate power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted. Seller is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for failures to be so qualified or licensed and in
good standing that would not, individually or in the aggregate, affect the
Purchased Assets in a materially adverse manner.
4.2 AUTHORIZATION. Seller has all necessary corporate power and authority
and has taken all corporate action necessary to enter into this Agreement, to
consummate the transactions contemplated hereby and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by Seller and is
a valid and binding obligation of Seller, enforceable against it in accordance
with its respective terms subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting the rights of creditors generally and limitations imposed by equitable
principles, whether considered in a proceeding at law or in equity, and the
discretion of the court before which any proceeding therefor may be brought.
4.3 BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been conducted without the intervention of
any person or entity acting on behalf of Seller in such a manner as to give rise
to any valid claim against Buyer for any broker's or finder's commission, fee or
similar compensation and Seller and Xxxxx Xxxxxx, personally, shall indemnify
Buyer and hold it harmless from any liability or expense arising from any claim
for brokerage commissions, finder's fees or other similar compensation based on
any agreement, arrangement or understanding made by or on behalf of Seller.
4.4 LITIGATION, PROCEEDINGS AND APPLICABLE LAW. There are no Actions,
suits, investigations or proceedings, at law or in equity or before or by any
governmental authority or instrumentality or before any arbitrator of any kind,
pending or, to Seller's Knowledge, threatened (a) against Seller which, if
determined adversely against Seller, would have a material adverse effect on
Seller's or Buyer's ability to use the Intellectual Property in the manner in
which it is now being used by Seller or (b) seeking to delay or enjoin the
consummation of the transactions contemplated hereby. To the Knowledge of
Seller, there are no outstanding orders, decrees or stipulations issued by any
federal, state, local or foreign, judicial or administrative authority in any
proceeding to which Seller is or was a party relating to the Software Assets.
4.5 NO CONFLICT OR VIOLATION. Neither the execution, the delivery of this
Agreement nor the consummation of the transactions contemplated hereby or
thereby will result in (i) a violation of or a conflict with any provision of
the Articles of Incorporation or Bylaws of Seller, (ii) a material breach or
termination of, or a material default under, any term or provision of any
contract to which Seller is a party or an event which, with notice, lapse of
time, or both, would result in any such material breach, such termination or
such material default, or (iii) a material violation by Seller of any Legal
Requirement or an event which, with notice, lapse of time or both, would result
in such a material violation.
4.6 INTELLECTUAL PROPERTY. Seller owns all rights to the Software Assets
without any conflict or infringement of the intellectual property rights of
others. All source code included within the Intellectual Property constitutes a
trade secret of Seller and is not part of the public knowledge or literature,
and Seller has taken reasonable action to protect such source code as a trade
secret.
(b) Schedule 4.6(b) lists (i) all patents and patent applications and
all registered copyrights, trade names, trademarks, service marks and other
company, product or service identifiers included in the Intellectual Property,
and specifies the jurisdictions in which each of the foregoing has been
registered, including the respective registration numbers, and/or any
application for any such registration has been filed; (ii) all licenses,
sublicenses and other agreements as to which Seller is a party and pursuant to
which Seller or any other Person is authorized to use any Intellectual Property;
and (iii) all licenses under which Seller is or may be obligated to make royalty
or other payments. Seller and Buyer acknowledge that Schedule 4.6(b) will state
none. Copies of all licenses, sublicenses and other agreements identified
pursuant to clauses (ii) and (iii) above have been delivered by Seller to Buyer.
(c) Seller is not in violation in any material respect of any
license, sublicense or agreement described in Schedule 4.6(b). As a result of
the execution and delivery of this Agreement or the performance of Seller's
obligations hereunder, neither Seller nor Buyer shall be in violation in any
material respect of any license, sublicense or agreement described in such
schedule.
(d) Seller is the sole owner of all necessary right, title and
interest in and to (free and clear of any liens, encumbrances or security
interests) all non-public domain Intellectual Property necessary to fully
exploit the Software Assets and has full rights to the use, sale, license or
disposal thereof. Except as expressly set forth in Schedule 4.6(b), no other
Person has any rights with respect to any of the Intellectual Property, nor is
any consent or approval of any third party needed to fully utilize and exploit
the Software Assets as presently configured.
(e) No claims with respect to the Intellectual Property have been
asserted to Seller, or, to Seller's Knowledge, are threatened by any person, and
Seller knows of no claims (i) to the effect that Seller infringes any copyright,
patent, trade secret, or other intellectual property right of any third party or
violates any license or agreement with any third party, (ii) contesting the
right of Seller to use, sell, license or dispose of any Intellectual Property,
or (iii) challenging the ownership, validity or effectiveness of any of the
Intellectual Property.
(f) [Intentionally omitted]
(g) To the Knowledge of Seller, and except as expressly set forth in
Schedule 4.6(b), there has not been and there is not now any unauthorized use,
infringement or misappropriation of any of the Intellectual Property by any
third party. Seller has not been sued or, to Seller's Knowledge, charged as a
defendant in any claim, suit, action or proceeding that involves a claim of
infringement of any patents, trademarks, service marks, copyrights or other
intellectual property rights that comprise the Software Assets. Seller does not
have any infringement liability with respect to any patent, trademark, service
xxxx, copyright or other intellectual property right of any third party insofar
as the Software Assets are concerned.
(h) No Intellectual Property is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting in any material manner
the licensing thereof by Seller. Seller has not entered into any agreement to
indemnify any other person against any charge of infringement of any
Intellectual Property, except in the ordinary course of business. Seller has not
entered into any agreement granting any third party the right to bring
infringement actions with respect to, or otherwise to enforce rights with
respect to, any Intellectual Property. Seller has the exclusive right to file,
prosecute and maintain all applications and registrations with respect to the
Intellectual Property developed or owned by Seller.
(i) Except as set forth in Schedule 4.6(b), no person has a license
to use or the right to acquire a license to use any future version of any
product based on the Intellectual Property or any product based on the
Intellectual Property that is under development, and no agreement to which
Seller is a party will restrict Buyer from charging customers for any such new
version or product.
4.7 ASSETS GENERALLY. Seller holds good and marketable title, license to
or leasehold interest in all of the Purchased Assets and has the complete and
unrestricted power and the unqualified right to sell, assign and deliver the
Purchased Assets to Buyer. Upon consummation of the transactions contemplated by
this Agreement, Buyer will acquire good and marketable title, license or
leasehold interest to the Purchased Assets free and clear of any encumbrances
and there exists no restriction on the use or transfer of the Purchased Assets.
No Person other than Seller has any right or interest in the Purchased Assets,
including the right to grant interests in the Purchased Assets to third parties.
4.8 PRODUCTS. The Software Assets operate in compliance with Seller's
specifications for such products. Buyer acknowledges that such Software Assets,
while operable for their intended use, may contain certain defects. Accordingly,
Buyer is acquiring these Software Assets on an "As-Is, Where-Is' basis, with no
further warranty as to merchantability or usability being provided by Seller.
4.9 RECEIPT OF SHARES ENTIRELY FOR OWN ACCOUNT. This Agreement is made with
Seller in reliance upon Seller's representation, which by Seller's execution of
this Agreement Seller hereby confirms, that the shares being issued to Seller
hereunder are being acquired for investment for Seller's own account, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and that Seller has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, Seller further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Buyer's Stock.
4.10 DISCLOSURE OF INFORMATION. Seller believes that it has received all
the information necessary or appropriate for deciding whether to receive the
Buyer's Stock as part of the consideration for the Purchased Assets. Seller
further represents that its officers and agents have had an opportunity to ask
questions and receive answers from Buyer regarding the terms and conditions
pertaining to the Buyer's Stock and the business, properties, prospects and
financial conditions of Buyer. Seller has arrived at an independent view
concerning the value of Buyer, recognizes that the transactions in which Seller
is acquiring the Buyer's Stock is occurring in an arms' length transaction and
is not relying upon any statements by Buyer as to the value of Buyer or the
Buyer's Stock.
4.11 SHAREHOLDERS OF SELLER. Xxxxx Xxxxxx is the sole shareholder of the
Seller.
4.12 The Seller is solvent, and is currently paying its outstanding
obligations to vendors, lenders, employees, governmental entities (including tax
authorities), and other third parties as such obligations become due.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
5.1 ORGANIZATION OF BUYER. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of New Jersey and has full
corporate power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted.
5.2 AUTHORIZATION. Buyer has all necessary corporate power and authority
and has taken all corporate action necessary to enter into this Agreement to
consummate the transactions contemplated hereby and thereby and to perform its
obligations hereunder. This Agreement and has been duly executed and delivered
by Buyer and is a valid and binding obligation of Buyer, enforceable against it
in accordance with its terms subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws relating to or
affecting the rights of creditors generally and limitations imposed by equitable
principles, whether considered in a proceeding at law or in equity, and the
discretion of the court before which any proceeding therefor may be brought.
5.3 BROKERS. All negotiations relating to this Agreement and the
transactions contemplated hereby have been conducted without the intervention of
any person or entity acting on behalf of Buyer in such a manner as to give rise
to any valid claim against Seller for any broker's or finder's commission, fee
or similar compensation.
5.4 CONSENTS AND APPROVALS. No consent, waiver, approval or authorization
of or by, or declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by Buyer in connection
with the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
ARTICLE VI.
CERTAIN COVENANTS
6.1 COVENANTS OF BOTH PARTIES. Buyer, on the one hand, and Seller, on the
other hand, each covenant to the other that:
(a) EMPLOYMENT AGREEMENT. Buyer and Seller shall enter into a
Employment Agreement substantially in the form of Exhibit A hereto for services
to be provided by Xxxxx Xxxxxx commencing immediately after the Closing.
(b) FURTHER ASSURANCES. Each party will cooperate in good faith with
the other and will take all appropriate action and execute any documents,
instruments or conveyances of any kind which may be reasonably necessary or
advisable to carry out any of the transactions contemplated hereunder. From and
after the execution hereof, Seller will promptly refer all inquiries with
respect to the ownership of the Purchased Assets to Buyer and execute such
documents as Buyer may reasonably request from time to time to evidence transfer
of the Purchased Assets to Buyer.
6.2 SELLER'S COVENANTS. Seller covenants to Buyer that:
(a) COOPERATION AND TRANSITION ASSISTANCE. Seller shall use its best
efforts to facilitate the transition of customers, customer support services,
and development, marketing and sales functions related to the Purchased Assets
to Buyer, and shall direct any new inquiries regarding the Purchased Assets to
Buyer or its assignee.
(b) DOCUMENTATION. Seller shall provide Buyer with full and complete
documentation, both written and computer generated, relating to the business
that Seller has conducted using the Purchased Assets, including all
correspondence and files relating to their development.
(c) CHANGE OF CORPORATE NAME. Within seven (7) days from the Closing
Date, the Seller agrees to change its corporate name to a name that is not
similar to its present name.
6.3 BUYER'S COVENANTS. Buyer covenants to Seller that the Small Business
Services Division ("SBSD") of SWK, of which Xxxxx Xxxxxx will be director, will
operate on the basis of an operating plan and budget to be mutually agreed upon
by Xxxxx Xxxxxx and Xxxxxxx Xxxx such budget to be finalized by December 15,
2004.
ARTICLE VII.
INDEMNIFICATION
7.1 INDEMNIFICATION BY THE BUYER. In the event Buyer (i) breaches or is
deemed to have breached any of the representations and warranties contained in
Article IV herein, or (ii) fails to perform or comply with any of the covenants
and agreements set forth in this Agreement, Buyer shall hold harmless, indemnify
and defend Seller, and each of its directors, officers, shareholders, attorneys,
representatives and agents, from and against any Damages incurred or paid by
Seller to the extent such Damages arise or result from a breach by Buyer of any
such representations or warranties or a violation of any covenant in this
Agreement.
7.2 INDEMNIFICATION BY SELLER.
(a) Notwithstanding any investigation by Buyer or its
representatives, Seller and Xxxxx Xxxxxx, personally, will, jointly and
severally, indemnify, hold Buyer, its Affiliates and their respective directors,
officers, employees and agents (collectively, the "Buyer Parties") harmless from
any and all Damages, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all court costs, litigation expenses and
reasonable attorneys' fees that any Buyer Parties may suffer or incur as a
result of or relating to:
(i) the breach of any representation or warranty made by Sellers
in this Agreement;
(ii) all Taxes allocable to any taxable period (or any portion
thereof) ending on or before the Closing Date.;
(iii) any claim commenced by any third party relating to actions
or omissions of Seller (or any of their Affiliates) that occurred prior to the
Closing Date. Notwithstanding the above, indemnification by the Seller for
customer third party claims relating to product or service performance only,
shall be limited to Five Thousand Dollars ($5,000) , which sum will be paid to
Buyer by Seller by a mutually agreed upon reduction in Xxxxx Xxxxxx'x bi-weekly
salary, or alternatively, by a mutually agreed upon reduction in Xxxxx Xxxxxx'x
annual bonus; and/or
(iv) any claim or liability not disclosed in the financial
statements delivered on the Closing Date or incurred in the ordinary course of
business consistent with past practice .
7.3 NOTIFICATION OF CLAIMS. If any party or parties (the "Indemnified
Party") reasonably believes that it is entitled to indemnification hereunder, or
otherwise receives notice of the assertion or commencement of any third-party
claim, action, or proceeding (a "Third-Party Claim"), with respect to which such
other party or parties (the "Indemnifying Party") is obligated to provide
indemnification pursuant to Section 7.1 or 7.2 above, the Indemnified Party
shall promptly give the Indemnifying Party written notice of such claim for
Indemnification (an "Indemnity Claim"). Any claim for indemnification under this
Section 7 must be brought prior to the expiration of the survival period for the
representation and warranty as set forth in Section 9.1. The delivery of such
notice of Indemnity Claim ("Claim Notice") shall be a condition precedent to any
liability of the Indemnifying Party for indemnification hereunder. The
Indemnifying Party shall have twenty (20) days from the receipt of a Claim
Notice (the "Notice Period") to notify the Indemnified Party of whether or not
the Indemnifying Party disputes its liability to the Indemnified Party with
respect to such Indemnity Claim.
7.4 RESOLUTION OF CLAIMS. With respect to any Indemnity Claim involving a
Third-Party Claim, following prompt notification of the Indemnifying Party, the
Indemnified Party shall proceed with the defense of such Third-Party Claim.
During such defense proceedings, the Indemnified Party shall keep the
Indemnifying Party informed of all material developments and events relating to
the proceedings. The Indemnifying Party shall have a right to be present at the
negotiation, defense and settlement of such Third-Party Claim. The Indemnified
Party shall not agree to any settlement of the Third-Party Claim without the
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld. Following entry of judgment or settlement with respect to the Third-
Party Claim, any dispute as to the liability of the Indemnifying Party with
respect to the Indemnity Claim shall be resolved as provided in Section 7.5.
(b) With respect to any Indemnity Claim not involving a Third-Party
Claim, if the Indemnifying Party disputes its liability within the Notice
Period, the liability of the Indemnifying Party shall be resolved in accordance
with Section 7.5.
(c) In the event that an Indemnified Party makes an Indemnity Claim
in accordance with Section 7.3 and the Indemnifying Party does not dispute its
liability within the Notice Period, the amount of such Indemnity Claim shall be
conclusively deemed a liability of the Indemnifying Party.
7.5 ARBITRATION. All disputes under this Agreement shall be settled by
arbitration in Newark, New Jersey before a single arbitrator pursuant to the
commercial law rules of the American Arbitration Association. Arbitration may be
commenced at any time by any party hereto giving written notice to each other
party to a dispute that such dispute has been referred to arbitration under this
Section 7.5. The arbitrator shall be selected by the joint agreement of the
Indemnifying Party and Indemnified Party, but if they do not so agree within 20
days after the date of the notice referred to above, the selection shall be made
pursuant to the rules from the panels of arbitrators maintained by such
Association. Any award rendered by the arbitrator shall be conclusive and
binding upon the parties hereto; provided, however, that any such award shall be
accompanied by a written opinion of the arbitrator giving the reasons for the
award. This provision for arbitration shall be specifically enforceable by the
parties and the decision of the arbitrator in accordance herewith shall be final
and binding without right of appeal. Each party shall pay its own expenses of
arbitration and the expenses of the arbitrator shall be equally shared;
provided, however, that if in the opinion of the arbitrator any claim for
indemnification or any defense or objection thereto was unreasonable, the
arbitrator may assess, as part of his award, all or any part of the arbitration
expenses of the other party (including reasonable attorneys' fees) and of the
arbitrator against the party raising such unreasonable claim, defense or
objection. To the extent that arbitration may not be legally permitted hereunder
and the parties to any dispute hereunder may not at the time of such dispute
mutually agree to submit such dispute to arbitration, any party may commence a
civil action in a court of appropriate jurisdiction to solve disputes hereunder.
Nothing contained in this Section 7.5 shall prevent the parties from settling
any dispute by mutual agreement at any time.
ARTICLE VIII.
RESTRICTIONS ON TREY RESOURCES, INC. CLASS A COMMON SHARES
The Buyer's Stock issued to Buyer pursuant to this Agreement shall be
subject to the following restrictions:
(a) Legends on Stock Certificates. Each certificate representing shares
issued pursuant to this Agreement shall be endorsed with the following legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT COVERING SUCH SECURITIES, THE SALE IS
MADE IN ACCORDANCE WITH RULE 144 OR ITS SUCCESSOR RULE UNDER
THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT EXEMPTIONS FROM SUCH
REGISTRATION AND FROM THE PROVISIONS OF ANY APPLICABLE STATE
"BLUE SKY" LAWS ARE AVAILABLE.
ARTICLE IX.
MISCELLANEOUS
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties and indemnities included or provided for in this Agreement or in any
agreement, schedule or certificate or other document or instrument delivered
pursuant to this Agreement will survive the Closing Date for a period of
thirty-six (36) months. No claim may be made by any party hereto unless written
notice of the claim is given within that thirty-six month period; provided,
however, that the foregoing limitation period will not apply to a breach of any
representation, warranty or covenant known to any party before the Closing Date.
9.2 SETOFF. Buyer may set off any amount that may be owed to it by Seller
under this Agreement against any amount otherwise payable to Seller by Buyer,
but any such setoff shall in no manner limit Seller's liability, if any, to
Buyer.
9.3 Covenant Not To Compete. For a period of three (3) years following the
Closing Date, Seller will not do any of the following, either directly or
indirectly, anywhere in the United States. In the event that Seller improperly
competes with Buyer in violation of this Section, the period during which they
engage in such competition shall not be counted in determining the duration of
the three (3) year non-compete restriction:
(a) For purposes of this Section 9.3, "Competitive Activity" shall
mean any activity relating to, in respect of or in connection with, directly or
indirectly, the information technology consulting business and the business of
reselling business software;
(b) Neither Seller nor Xxxxx Xxxxxx shall solicit or perform services
in connection with any Competitive Activity for any current customers of Buyer
or any party who was a customer during the past two (2) years except as
otherwise permitted under the Employment Agreement;
(c) Neither Seller nor Xxxxx Xxxxxx shall solicit or perform services
in connection with any Competitive Activity for any customer listed on Schedule
2.1A attached hereto;
(d) Neither Seller nor Xxxxx Xxxxxx shall solicit for employment or
employ any then current employees employed by Buyer without Buyer's consent; or
(e) For a period of three (3) years following the Closing Date, Xxxxx
Xxxxxx shall not compete with the Company in any fashion, and shall not work
for, advise, be a consultant to or an officer, director, agent or employee of or
otherwise associate with any person, firm, corporation or other entity which is
engaged in or plans to engage in a Competitive Activity.
(f) For a period of three (3) years following the Closing Date, Xxxxx
Xxxxxx shall not encourage or solicit any employee of the Seller or any
affiliate to leave the Buyer's or any affiliate of the Buyer's employ for any
reason or interfere in any material manner with employment relationships at the
time existing between the Buyer and its current employees, except as may be
required in any bona fide termination decision regarding any Seller employee.
(g) For a period of three (3) years following the Closing Date,
Xxxxx Xxxxxx shall not encourage or solicit any customer of the Seller or any
affiliate to purchase a product that competes with a product of the Buyer or any
affiliate.
9.4 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. Prior to the Closing Date,
neither the Seller (nor their respective shareholders, officers and directors)
shall issue any press release or make any public announcement concerning the
matters set forth in this Agreement (other than as required by applicable
disclosure rules or regulations) without the consent of the Buyer.
9.5 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. Buyer
may, without need for any consent or notice to Seller, assign all of its rights
and obligations under this Agreement to any Affiliate of Buyer, and such
assignment shall release Buyer of all of its liabilities and obligations to
Seller, provided such liabilities and obligations are fully assumed by Buyer's
assignee.
9.6 NOTICES. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by either party to the other
shall be in writing and delivered by telecopy or other facsimile (with receipt
acknowledged), delivered personally or mailed by certified mail, postage
prepaid, return receipt requested (such mailed notice to be effective on the
date such receipt is acknowledged or refused), to the addresses of the parties
appearing on the signature page of this Agreement or to such other place and
with such other copies as either party may designate as to itself by written
notice to the other.
9.7 CHOICE OF LAW. This Agreement shall be governed under and construed in
accordance with the laws of the State of New Jersey without regard to its choice
of law principles. For purposes of any dispute or controversy arising under this
Agreement or the transactions contemplated hereby, the parties mutually consent
to the exclusive jurisdiction of the courts of the State of New Jersey..
9.8 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement, together
with all exhibits and schedules hereto, constitute the entire agreement among
the parties pertaining to the subject matter hereof and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the party to be bound thereby. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
9.9 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signature pages
shall be considered originals.
9.10 TITLES. The titles, captions or headings of the Articles and Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
9.11 XXXXX XXXXXX. Xxxxxx as sole shareholder and President of the Seller,
hereby agrees to guarantee the performance by the Seller of its obligations
herein and the accuracy of the Seller's representations and warranties under
this Agreement. Xxxxxx hereby agrees that the Buyer may look to Xxxxxx for
performance of the Seller's obligations herein, including, but not limited to
the Seller's obligations under Article VII.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their respective behalf, by their respective officers thereunto
duly authorized, in multiple originals, all as of the day and year first above
written.
Address for Notice BUSINESS TECH SOLUTIONS GROUP, INC.
a New Jersey corporation
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
By: _______________________
Xxxxx Xxxxxx
President
Address for Notice XXXXX XXXXXX
an individual
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
By: _______________________
Xxxxx Xxxxxx
Address for Notice BTSG ACQUISITION CORP.
a New Jersey corporation
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
By: _______________________
Xxxxxxx Xxxx
President
with a copy to:
Xxxxxxxx X. Xxxxx, Esquire
Meritz & Xxxxx LLP
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Schedule 2.1
ASSETS TO BE ACQUIRED
i) The corporate name "Business Tech Solutions Group, Inc."
ii) The source code and all documentation relating to enhancements the Seller
has made for Best Software's BusinessWorks' software, including, but not limited
to: BW Xchange, BW EDI Xchange and BW Ecom Xchange, and Crystal Reports to be
used with BusinessWorks' software.
iii) The source code and documentation for all other software owned by the
Seller including, but not limited to: Bus Scheduling and Billing Program, Custom
Pricing Program, Sales Commission Processing Program, Sales Returns Processing
Program, and the Oilmatic Truck Route Delivery Program. Buyer acknowledges that
Seller does not hold clear title to the Oilmatic Truck Route Delivery Program,
and that resale of this product will be subject to the completion of a
negotiated agreement with Oilmatic, Inc.
(iv) All reseller agreements entered into by Business Tech Solutions Group,
Inc., including specifically all reseller agreements with Best Software.
(v) The customer list of Business Tech Solutions Group, Inc., a copy of which
is attached hereto as Exhibit 2.1A.
(v) The leasehold at 000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxx.
(vi) All furniture, fixtures, and equipment owned by Seller.
Schedule 2.1 A
List of Customers
Schedule 2.3
Liabilities Assumed
A) Leasehold interest for the property located at 000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000.
B) Trade payables in an amount not to exceed $19,000.
C) Health insurance premiums due and payable after the Closing Date.
LEASES
GE Cap. - Canon Copier 5/26/05 (Must cancel 90 days prior in 2/05) 321.00
Bizfone - 12/26/04 (Must cancel 9/04)
GE Cap.Colonial - Computer Equipment 4/30/05 958.00
(Must cancel 90 days prior in 1/05)
Dell - Laptop 12/3/04 ($1 BUY OUT) automatic debit from checking. 95.36
Schedule 4.6 (b)
Patents, Trademarks, Service Marks, and Licenses Granted
None
