EXHIBIT 10.1
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered into
as of May 31, 2006 by and among AMP-Best Consulting, Inc., a New York
corporation("Seller"), Xxxxxxx X. Xxxxx, an individual ("Anson"), Xxxxxxxx
Xxxxxx III, an individual ("Xxxxxx"), Xxxxxxxx X. Xxxxxx, an individual
("Xxxxxx"), (Xxxxx, Xxxxxx and Xxxxxx shall be collectively referred to herein
as the "Shareholders")and SWK Technologies, Inc., a Delaware corporation
("Buyer").
RECITALS
WHEREAS, the Shareholders own, of record and beneficially, 100 shares (the
"Company Shares") of the common stock, no par value, of the Seller, being all of
the issued and outstanding shares of the capital stock of the Seller;
WHEREAS, the Seller is engaged in the business of reselling software and
providing consulting services (the "Business");
WHEREAS, the Buyer wishes to purchase the Business and certain other assets of
the Seller;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, the parties hereto 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.
"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.
"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 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 assets listed on Schedule 2.1
(hereinafter collectively referred to as the "Purchased Assets").
2.2 PURCHASE PRICE. As consideration for the Purchased Assets, Buyer shall
tender Seller the consideration set forth below:
(a) Buyer shall pay $50,000 to Xxxxxxxx Xxxxxx III to reduce the
outstanding debt borrowed by Xxxxxx, such debt having been used to finance the
Business of Seller;
(b) Buyer shall further pay Xxxxxx $10,000, such sum to be utilized to
further reduce other debt due and owing by Xxxxxx which was utilized to finance
the Business of Seller;
(c) Buyer shall issue Xxxxxx an unsecured five (5) year promissory note
in the amount of Three Hundred and Eighty Thousand Dollars ($380,000), such note
to bear interest at the rate of seven and three quarter percent (7 3/4%) per
annum and payable in equal monthly installments of principal and interest. Such
monthly payments shall commence 120 days from the Closing Date.
(d) Six million (6,000,000) shares of Class A Common Stock of Trey
Resources, Inc. (the "Buyer's Stock") to Seller's designees as listed on
Schedule 2.2. Such shares 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.
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2.3 LIABILITIES OF SELLER. . Pursuant to the terms and subject to the
conditions of this Agreement, Buyer will assume certain liabilities included on
the March 31, 2006 Balance Sheet of Seller and as adjusted in the ordinary
course of business as of the closing date. Such liabilities are listed on
Schedule 2.3 herein (hereinafter collectively referred to as the "Assumed
Liabilities").
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 2.4 herein and thereafter, remit such collections to the Seller.
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 as set
forth in Schedule 2.5 which was 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.
2.6 EQUIPMENT LEASE. The Seller agrees to lease to the Buyer certain fixed
assets and office equipment under the terms as set forth on Schedule 2.6. Upon
the expiration of each lease term, the Buyer shall have the option to acquire
the leased assets for One Dollar ($1.00).
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
Buyer at 0 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000, on May 31, 2006, 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(s) evidencing the Buyer's Stock;
(ii) the Employment Agreements described in Section
6.1(a) executed by Buyer.
(iii) Promissory Note payable to Xxxxxxxx Xxxxxx III for
the sum of $380,000 at a fixed interest rate of 7
3/4% per annum with equal payments of principal and
interest being paid monthly over a sixty (60) month
period beginning one hundred twenty (120) days after
the Closing Date
(iv) Secretary's Certificate of the Seller as set forth
in Schedule 3.2.(a)(iv)
(v) Officer's Incumbency Certificate of Seller as set
forth in Schedule 3.2(a)(v).
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(b) BY SELLER. Seller shall deliver to Buyer:
(i) one or more Bills of Sale, in form and substance
satisfactory to Buyer and sufficient to convey the
Purchased Assets to Buyer;
(ii) 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;
(iii) the Employment Agreements described in Section 6.1(a)
executed by Xxxxx, Xxxxxx, and Xxxxxx;
(iv) an Assignment of Seller's rights to the corporate name
"AMP-Best Consulting, Inc."
(v) Amendment to the Certificate of Incorporation of the
AMP-Best Consulting, Inc. for filing with the New York
State Secretary of State to change its name from AMP-Best
Consulting, Inc.
(vi) Secretary's Certificate of the Buyer as set forth in
Schedule 3.2(b)(vi).
(vii) Officer's Incumbency Certificate of Buyer as set
forth in Schedule 3.2(b)(vii).
(viii) Termination of lease executed by landlord for the
premises located at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx
(ix) Termination of the General Security Agreement dated
October 21, 2005 by and between AMP-Best Consulting, Inc.
and Manufacturers and Traders Trust Company.
(x) Termination of the Business Installment Note and
Security Agreement dated December 17, 2003 by and between
AMP-Best Consulting, Inc. and Manufacturers and Traders
Trust Company.
(xi) such other documents and instruments as are reasonably
necessary to consummate the transactions contemplated
hereby.
(xii) delivery of all consents, approvals, and assignments
necessary to consummate the transaction contemplated under
this Agreement including, but not limited to: third party
software vendors' consents and reseller agreement consents.
(xiii) new lease agreement in a form satisfactory to the
Buyer for the premises located at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
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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 York 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 the Shareholders, individually, 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. 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 Intellectual
Property without any conflict or infringement of the intellectual property
rights of others. In addition, Seller has taken reasonable steps (including,
without limitation, entering into Confidentiality Agreements with all officers
and employees of and consultants involved in Seller's business) to maintain the
secrecy and confidentiality of and its proprietary rights in, all Intellectual
Property.
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(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. 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 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 Intellectual Property.
(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) To the Knowledge of Seller, all trademarks, service marks, and
other company, product or service identifiers held by Seller are valid and
subsisting worldwide.
(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 Intellectual Property. 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 Intellectual Property is 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. 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
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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 Left blank Intentionally
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's
designees hereunder are being acquired for investment for Seller's designees 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 designees have 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, and Xxxxxx are the sole
shareholders 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 Delaware 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.
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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 therefore 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) 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. On the Closing Date, the Seller shall
deliver to the Buyer an Amendment to the Certificate of Incorporation of the
Seller for filing with the New York Secretary of State that shall change the
name of the Seller to a name that is not similar to its present name.
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ARTICLE VII.
INDEMNIFICATION
7.1 INDEMNIFICATION BY BUYER. In the event Buyer (i) breaches or is deemed
to have breached any of the representations and warranties contained in Article
V 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, the Shareholders, individually, will jointly and
severally, indemnify and 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; 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 .
(b) Notwithstanding the above, the Buyer shall not seek
indemnification pursuant to this Article VII against one or more of the
individual Shareholders for any act(s) by another individual Shareholder that
occurred subsequent to the Closing Date.
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
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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 9.7.
(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 9.7.
(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.
ARTICLE VIII.
RESTRICTIONS ON TREY RESOURCES, INC. CLASS A COMMON SHARES
The Buyer's Stock issued to Seller's designees 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 and any of
the Shareholders by Buyer, but any such setoff shall in no manner limit Seller's
or the Shareholders' liability, if any, to Buyer. The right of setoff may only
be exercised by the Buyer for: (i) matters related to breach of the
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representations, warranties and covenants made by the Seller and Shareholders
herein and (ii) claims asserted against the Buyer or the Purchased Assets
related to undisclosed litigation, tax liabilities or any other governmental
agency action for a matter or activity that occurred on or prior to the Closing
Date. Notwithstanding the above, the Buyer shall not have any right of setoff
against one or more of the individual Shareholders for any act(s) by another
individual Shareholder that occurred subsequent to the Closing Date. Any right
of setoff must be preceded with ten (10) advance written notice to the party to
be charged.
9.3 COVENANT NOT TO COMPETE.
A. For a period of ten (10) years following the Closing Date, Seller
will not do any of the following activities listed below, either
directly or indirectly, anywhere in the United States or Canada. In
the event that Seller improperly compete with Buyer in violation of
this Section 9.3, the period during which they engage in such
competition shall not be counted in determining the duration of the
ten (10) 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) The Seller shall not 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) The Seller shall not solicit for employment or employ any then
current employees employed by Buyer without Buyer's consent; or
B. For a period of two (2) years following the Closing Date, the
Shareholders will not do any of the following activities listed
below, either directly or indirectly, anywhere in the United States
or Canada. In the event that the Shareholders improperly compete
with Buyer in violation of this Section 9.3, the period during
which they engage in such competition shall not be counted in
determining the duration of the two (2) year non-compete
restriction:
(a) The Shareholders individually shall not solicit nor 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 their
individual Employment Agreement;
(b) The Shareholders individually shall not solicit for employment
nor employ any current employees employed by Buyer or Seller
without Buyer's consent; or
(c) For a period of two (2) years following the Closing Date, the
Shareholders individually shall not compete with the Buyer or Trey
Resources, Inc., 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, or hold more than five percent (5%) of the outstanding
capital stock of any such entity, which is engaged in or plans to
engage in a Competitive Activity. Notwithstanding anything to the
contrary, Xxxxxx and Xxxxxx may be employed or provide services
solely as a certified public accountant that would otherwise be
restricted under this Paragraph 9.3.
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
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than as required by applicable disclosure rules or regulations) without the
consent of the Buyer. Buyer shall have the right to make such disclosure and
announcements as may be required by the rules and regulations of the Securities
and Exchange Commission.
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) and followed with delivery via an overnight courier service, or
delivered by an overnight courier service, such 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 or the
U.S. Federal District Court in the district within which the Buyer's corporate
headquarters are located.
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, AND XXXXXX. Xxxxx, Xxxxxx, and Xxxxxx, as sole
shareholders and officers of the Seller, hereby agree to guarantee the
performance by the Seller of its obligations herein and the accuracy of the
Seller's representations and warranties under this Agreement. Xxxxx, Xxxxxx, and
Xxxxxx hereby agree that the Buyer may look to Xxxxx, Xxxxxx, and Xxxxxx for
performance of the Seller's obligations herein, including, but not limited to
the Seller's obligations under Article VII, limited to only those matters or
claims that permit the Buyer to exercise its right to setoff as set forth in
Section 9.2. .
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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: AMP-BEST CONSULTING, INC.,
a New York corporation
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
By:_______________________
Xxxxxxx X. Xxxxx
President
Address for Notice: XXXXXXX X. XXXXX
an individual
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
By:_______________________
Xxxxxxx X. Xxxxx
XXXXXXXX XXXXXX III
Address for Notice: an individual
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
By:_______________________
Xxxxxxxx Xxxxxx III
Address for Notice: XXXXXXXX X. XXXXXX
an individual
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
By:________________________
Xxxxxxxx X. Xxxxxx
Address for Notice: SWK TECHNOLOGIES, INC.
a Delaware corporation
0 Xxxxxx Xxxxxx Xxxxx 000
Xxxxxxxxxx, XX 00000
By:________________________
Xxxxxxx X. Xxxx
President
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Schedule 2.1
PURCHASED ASSETS
a) All of the inventories, cash received as customer deposits
(work-in-process), capitalized leases, other deposits, prepaid expenses,
patents, trademarks and other intangible assets (except goodwill), notes
receivable and all other assets except goodwill, cash of any other type,
and accounts receivable from customers. Also included in the acquisition
shall be all current customers, all past customers from the past 24 months
prior to the closing date, all customer lists and contact information, the
name of the company ("AMP-Best Consulting, Inc. and any other current or
prior trade names ever used by AMP"), customer contracts, all reseller
agreements with Sage Software, Inc., all reseller agreements with any other
3rd parties, source code and all documentation related to any software
owned as well as any enhancements, customizations etc., logos and all
proprietary data, records and files and any other material currently
utilized or reasonably necessary for the continued operation of the
business.
b) All valid and disclosed existing leases for equipment.
c) Valid purchase orders issued in the ordinary course of business.
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Schedule 2.2
SELLER'S DESIGNEES
Seller hereby directs Trey Resources, Inc. to issue an aggregate of 6 million
shares of Trey Class A Common Stock to the following individuals and/or
entities:
Xxxxxxx X. Xxxxx 2 million shares
Xxxxxxxx Xxxxxx III 2 million shares
Xxxxxxxx X. Xxxxxx 0 million shares
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Schedule 2.3
ASSUMED LIABILITIES
No liabilities will assumed by the Buyer. Accounts payable, accrued expenses
(and unpaid vacation days, sick days etc.) and similar short-term payables are
specifically excluded from this transaction.
16
Schedule 2.4
SELLER'S ACCOUNT RECEIVABLES
17
Schedule 2.5
SELLER'S ACCOUNTS PAYABLE
18
Schedule 2.6
Leased Assets
Equipment leased: All fixed assets owned by the Seller on the date hereof and
computer equipment.
Term of lease: May 31, 2006 through November 15, 2010
First payment due: June 15, 2006
Monthly payment: $1,155.38(1)
____________________
(1)Lease payment is calculated based upon the current interest rate of 8.75% per
annum on a fully amortized capital lease with the initial principal balance of
$45,000. At expiration of lease term, leased assets may be purchased by the
Buyer at the Buyer's option for $1.00. Interest is variable and shall be
adjusted on a month to month basis based upon the Prime Rate plus .75% as
published in the Wall Street Journal.
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Schedule 3.2.(a)(iv)
Secretary's Certificate of the Seller
20
Schedule 3.2(a)(v)
Officer's Incumbency Certificate of Seller
21
Schedule 3.2(b)(vi)
Secretary's Certificate of the Buyer
22
Schedule 3.2(b)(vii)
Officer's Incumbency Certificate of Buyer
23
Schedule 4.6 (b)
INTELLECTUAL PROPERTY
All current customers, all past customers from the past 24 months prior to the
closing date, all customer lists and contact information, the name of the
company ("AMP-Best Consulting, Inc. and any other current or prior trade names
ever used by AMP"), customer contracts, all reseller agreements with Sage
Software, Inc., all reseller agreements with any other 3rd parties, source code
and all documentation related to any software owned as well as any enhancements,
customizations etc., logos and all proprietary data, records and files and any
other material currently utilized or reasonably necessary for the continued
operation of the business.
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