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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of November 30, 2000 (the "Effective Date"), by and between Proven
Technology, Inc., a Tennessee corporation ("Seller"), and Proven Technology LLC,
a New York limited liability company ("Buyer"). In addition, the following
entities and individuals are parties to this Agreement for the limited purposes
set forth in Sections 7 and 19 hereof: SCB Computer Technology, Inc., a
Tennessee corporation and the sole shareholder of Seller ("SCB"); Xxxx Xxxxxxxx,
a resident of New York who is the Vice President - Operations of Seller, the
sole member and manager of Buyer, and a shareholder, director, and Vice
President of TKC ("Xxxxxxxx"); Xxxxxxx Xxxxxxxx, a resident of New York who is
the wife of Xxxxxxxx ("Xxxxxxx Xxxxxxxx"); and Twenty Keyland Corp., a New York
corporation ("TKC").
Introduction. Seller is engaged in the business of purchasing and
reselling pre-owned computer equipment (the "Business"). Seller desires to sell
to Buyer, and Buyer desires to purchase from Seller, certain assets and
properties of Seller used in the Business. In addition, SCB, Xxxxxxxx, Xxxxxxx
Xxxxxxxx, and TKC desire to take certain other actions set forth in Sections 7
and 19 hereof. On the terms set forth in this Agreement, for certain good and
valuable considerations, the receipt and adequacy of which are hereby
acknowledged by all parties hereto, and relying on the representations,
warranties, covenants, and agreements of each other contained herein, the
parties hereto hereby agree as follows:
1. Sale and Purchase of Assets. As of the Effective Date, Seller hereby
sells, conveys, transfers, assigns, and delivers the Assets to Buyer, and Buyer
hereby purchases, receives, and accepts the Assets from Seller (the
"Acquisition"). As used in this Agreement, the term "Assets" means all of the
following assets and properties of Seller relating to the Business: (a) cash and
cash equivalents (except as provided in Section 2 hereof); (b) bank accounts;
(c) accounts receivable (trade and employee advance); (d) customer deposits and
prepayments; (e) inventory described in Schedule 1(e) attached hereto; (f) fixed
assets, equipment, machinery, furnishings, and supplies; (g) motor vehicles; (h)
authorizations, approvals, licenses, and permits relating to the Business, to
the extent that they are assignable to Buyer; (i) interests in and rights under
contracts relating to the Business, to the extent that they are assignable to
Buyer; (j) supplier data; (k) customer data; (l) books and records relating to
the Business; (m) trademarks, trade names, and logos utilizing the name "Proven
Technology"; (n) existing New York telephone numbers; and (o) goodwill.
2. Excluded Assets. Seller does not intend to sell and is not hereby
selling the Excluded Assets to Buyer, and Buyer does not intend to purchase and
is not hereby purchasing the Excluded Assets from Seller. As used in this
Agreement, the term "Excluded Assets" means all of the following assets and
properties of Seller: (a) cash in an amount equal to Seller's accounts payable
for accrued health insurance premiums and 401(k) contributions for Seller's
employees as of the Effective Date; (b) prepaid taxes, insurance premiums,
workmen's compensation premiums, and other prepaid expenses; (c) tax credits,
refunds, rebates, abatements, net operating losses, and other tax assets; (d)
accounts receivable (inter-company); (e) authorizations, approvals, licenses,
and permits relating to the Business, to the extent that they are not assignable
to Buyer; (f) interests in and rights under contracts relating to the Business,
to the extent that they are not assignable to Buyer; (g) insurance policies,
claims, and proceeds; (h) books and records relating to Seller's corporate
entity, securities, and taxes;
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and (i) Seller's interests in and rights under this Agreement and any and all
other documents and instruments relating to the Transactions.
3. Assignment of Assets. As of the Effective Date, Seller shall convey,
transfer, and assign to Buyer full legal and beneficial title to the Assets
(subject to the recordation of any assignment documents reasonably necessary to
perfect legal title), free and clear of all assessments, charges, claims, liens,
mortgages, pledges, security interests, and other encumbrances (collectively,
"Liens"), pursuant to the Xxxx of Sale, General Assignment, and Conveyance in
the form attached hereto as Exhibit 3 and such other conveyancing instruments as
are reasonably satisfactory in form and substance to Seller and Buyer. The title
to, possession of, and risk of loss of or damage to the Assets shall pass from
Seller to Buyer as of the Effective Date.
4. Consideration for Assets. As of the Effective Date, and in full
consideration for the Assets, Buyer shall (a) convey, transfer, and assign to
Seller full legal and beneficial title to fifty thousand (50,000) shares of
common stock, par value $.01 per share, of SCB (the "Shares"), free and clear of
all Liens, pursuant to the Stock Power in the form attached hereto as Exhibit 4,
and (b) assume the Assumed Liabilities pursuant to Section 5 hereof.
5. Assumption of Assumed Liabilities. As of the Effective Date, Buyer
hereby assumes and agrees to be solely responsible for and to perform in a
timely manner all liabilities and obligations of Seller (other than the Excluded
Liabilities), whether known or unknown, foreseen or unforeseen, fixed or
contingent, accrued or unaccrued, or otherwise, arising before, on or after the
Effective Date directly or indirectly from or in connection with Seller's
ownership and use of the Assets and conduct of the Business (collectively, the
"Assumed Liabilities"). Buyer does not intend to assume and is not hereby
assuming the Excluded Liabilities, and Seller shall remain responsible for the
Excluded Liabilities. As used in this Agreement, the term "Excluded Liabilities"
means the following liabilities and obligations of Seller: (a) Seller's accounts
payable for accrued health insurance premiums and 401(k) contributions for its
employees as of the Effective Date; (b) Seller's liability, if any, for damages,
settlement amounts, and other costs and expenses, if any, arising from the May
Xxx Xxxxxxxx v. SCB Computer Technology, Inc. lawsuit (Case Number CV 00 5378)
pending in the United States District Court for the Eastern District of New York
(the "Xxxxxxxx Lawsuit"); and (c) Seller's liabilities and obligations under
this Agreement and any and all other documents or instruments relating to the
Transactions.
6. Approvals and Consents. Seller and Buyer each have taken and, if
necessary or appropriate, shall continue to take after the Effective Date, at
its own expense, any and all actions (including, without limitation, using its
best efforts to obtain any and all approvals, authorizations, consents, and
other actions) necessary or appropriate for it to consummate the Acquisition.
7. Related Actions. In connection with and as an integral part of the
Acquisition, and without any additional consideration being given or received by
any party hereto (it being understood and agreed that no other consideration
shall be necessary in order for the agreements and undertakings set forth in
this Section 7 to be legally enforceable upon the parties hereto), SCB, Seller,
Xxxxxxxx, Xxxxxxx Xxxxxxxx, and TKC hereby take the following actions (the
"Related Actions") as of the Effective Date:
(a) Termination of Employment Agreement. SCB, Seller, and Xxxxxxxx
hereby terminate the Employment Agreement dated as of May 1, 1998, among such
parties (the
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"Employment Agreement"), a copy of which is attached hereto as Exhibit 7(a).
SCB, Seller, and Xxxxxxxx agree that neither party shall have any further
obligation to the others under the Employment Agreement from and after the
Effective Date.
(b) Termination of Lease Agreement. Seller and TKC hereby terminate
the lease agreement dated as of May 1, 1998, between such parties (the "Lease
Agreement"), a copy of which is attached hereto as Exhibit 7(b). SCB and TKC
agree that neither party shall have any further obligation to the other under
the Lease Agreement from and after the Effective Date.
(c) Cooperation. From and after the Effective Date, Xxxxxxxx shall
cooperate fully with SCB and Seller in connection with any and all
investigations and legal proceedings (including, without limitation, the
Xxxxxxxx Lawsuit) relating in any way to SCB or Seller and covering any time
during the period of Xxxxxxxx'x employment with SCB and Seller. Without limiting
the generality of the foregoing, Xxxxxxxx shall (1) make himself available at
reasonable times and locations to discuss with SCB, Seller, and their attorneys
any and all matters relating to such investigations and legal proceedings; (2)
provide truthful and complete answers to all questions asked of him by SCB,
Seller, and their attorneys; (3) provide to SCB, Seller, and their attorneys all
relevant information known to him; and (4) provide any other assistance in
connection with such investigations and legal proceedings that SCB or Seller may
reasonably request from time to time.
(d) Non-Solicitation. For a period of two years after the Effective
Date, Xxxxxxxx shall not, directly or indirectly, on his own behalf or on behalf
of any other entity or individual, (1) solicit any SCB Customer to conduct any
business with such SCB Customer that is the same as or similar to, or is
otherwise competitive with, the SCB Business, or (2) except as contemplated in
Section 15 hereof, solicit any SCB Employee to terminate his or her employment
relationship with SCB or any of its subsidiaries.
As used in this Agreement, the following terms have the meanings
indicated below:
"SCB Business" means the business of (1) advising persons and entities on
the acquisition or strategic utilization of information technology systems,
planning and designing new information technology systems, and redesigning
existing information technology systems; (2) providing network design and
management, systems support and maintenance, programming and application
software development, computer code review, data center management, and
information technology outsourcing services; (3) recruiting and training persons
with information technology skills; and (4) any other activity substantially
related to any of the foregoing. "SCB Business" does not mean the business of
purchasing and reselling pre-owned computer equipment.
"SCB Customer" means any customer or client of SCB or any of its
subsidiaries with whom SCB or such subsidiary conducted business at any time
within two years before the Effective Date, excluding any customers or clients
of Seller with whom SCB or any SCB subsidiaries (other than Seller) has not
conducted any SCB Business during such period.
"SCB Employee" means any employee of SCB or any of its subsidiaries who
was employed by SCB or such subsidiary at any time within one year before the
Effective Date.
(e) Release. As of the Effective Date, each of Xxxxxxxx and
Xxxxxxx Xxxxxxxx (collectively, the "Severinis"), on behalf of himself or
herself and his or her legal representatives,
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executors, administrators, distributees, legatees, heirs, and assignees, hereby
fully, unconditionally, finally, and forever discharges, waives, and releases
SCB, each of its subsidiaries and other affiliates (including, without
limitation, Seller), and each of its and their respective shareholders,
directors, officers, employees, agents, and representatives, whether acting in
an individual or representative capacity (SCB and all such other individuals and
entities are referred to collectively as the "Released Parties") from any and
all assessments, charges, costs, damages, expenses (including, without
limitation, attorneys' fees and expenses and court costs), fines, judgments,
losses, penalties, and other liabilities and obligations of any kind or nature,
whether known or unknown, foreseen or unforeseen, fixed or contingent, accrued
or unaccrued, or otherwise, and any and all claims, demands, investigations,
causes of action, actions, lawsuits, and other legal proceedings in respect
thereof, whether in law or equity, that he or she had, has, or purports to have
against any or all of the Release Parties from the beginning of time to the
Effective Date directly or indirectly arising from or based on (1) SCB's
acquisition of Seller from the Severinis pursuant to the merger of Proven
Technology, Inc., a New York corporation, with and into Seller effective as of
May 1, 1998 (the "Merger"), (2) SCB's issuance of shares of SCB common stock to
the Severinis in the Merger, (3) the Severinis' ownership of SCB common stock,
(4) any decrease in the value of the shares of SCB common stock owned by the
Severinis, (5) the restatement of SCB's financial statements for the fiscal
years ended April 30, 1998 and 1999, and each fiscal quarter in the nine-month
period ended January 31, 2000, and the acts and omissions of SCB and others
giving rise to the accounting adjustments contained in such restated financial
statements, and (6) any other event, occurrence, condition, or circumstance
relating to any of the foregoing.
8. Effective Date; Closing. The Acquisition and the Related Actions
(collectively, the "Transactions") shall be consummated by the parties hereto
effective as of the Effective Date. The consummation of the Transactions (the
"Closing") shall be effected by the exchange among the parties hereto, via
overnight courier, of executed originals of this Agreement and all other related
documents and instruments. To effect the Closing, each party hereto shall
execute and deliver this Agreement and all other documents and instruments
required to be executed and delivered by such party hereunder and shall take all
other actions necessary or appropriate to consummate the Transactions as
contemplated in this Agreement. No Transaction shall be, or be deemed to be,
consummated unless and until all the Transactions have been consummated.
9. Transaction Documents.
(a) Seller. To effect the Acquisition and the Related Actions to
which it is a party, Seller shall execute and deliver (1) this Agreement, (2)
the Xxxx of Sale, General Assignment, and Conveyance in the form attached hereto
as Exhibit 3, and (3) the Certificate of Secretary in the form attached hereto
as Exhibit 9(a) (collectively, the "Seller's Documents").
(b) Buyer. To effect the Acquisition, Buyer shall execute and/or
deliver (1) this Agreement, (2) a stock certificate evidencing the Shares, (3)
the Stock Power in the form attached hereto as Exhibit 4, and (4) the
Certificate of Member in the form attached hereto as Exhibit 9(b) (collectively,
the "Buyer's Documents").
(c) SCB, Xxxxxxxx, and TKC. To effect the Related Actions to which it
or he is a party, each of SCB, Xxxxxxxx and TKC shall execute and deliver this
Agreement.
10. Further Assurances; Name Change. At any time after the Effective
Date, and upon the reasonable request of any party hereto, each party shall
execute and deliver any and all
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other documents and instruments and take any and all other actions necessary or
appropriate to consummate the Transactions as contemplated in this Agreement. As
soon as practicable after the Effective Date, Seller shall change its name to a
new name bearing no resemblance to its present name and shall discontinue all
commercial uses of the words "Proven Technology."
11. Transfer Taxes. Seller shall be responsible for and pay any and all
federal, state, and local sales, excise, transfer, use, and other taxes assessed
or imposed with respect to the Acquisition.
12. Unassigned Business Contracts. If, as of the Effective Date, Seller
has not obtained any approval, authorization, consent, or other action necessary
for Seller to assign its interest in and rights under any contract relating to
the Business and included in the Assets to Buyer as contemplated in this
Agreement (an "Unassigned Business Contract"), Seller shall (a) pending any
subsequent assignment, retain its interest in and rights under the Unassigned
Business Contract until its expiration date, if any; (b) provide to Buyer all
the benefits of its interest in and rights under the Unassigned Business
Contract, provided that Buyer performs all of Seller's obligations thereunder in
a complete and timely manner as an Assumed Liability; and (c) continue to use
its best efforts to obtain any previously unobtained approval, authorization,
consent, or other action necessary for Seller to assign its interest in and
rights under the Unassigned Business Contract to Buyer as soon as practicable
after the Effective Date.
13. Access to Books and Records. For a period of five years after the
Effective Date, Buyer shall preserve all the books and records relating to the
Business prior to the Effective Date and included in the Assets and, upon
request by Seller, shall provide Seller and its representatives with access to
the books and records during normal business hours for the purpose of examining
and photocopying them. Seller shall be responsible for and pay all reasonable
direct costs and expenses incurred by Buyer in providing access to the books and
records.
14. Information and Assistance. Seller and Buyer acknowledge and agree
that after the Effective Date, either party may desire or need financial and
other information relating to the Assets or the Business and other forms of
assistance for the purpose of complying with applicable laws, rules, and
regulations. At any time after the Effective Date, and upon request by Seller or
Buyer, the other party shall provide such information and assistance, to the
extent reasonable, to the requesting party and its representatives. The
requesting party shall be responsible for and pay all reasonable direct costs
and expenses incurred by the assisting party in providing such information and
assistance.
15. Employment Arrangements.
(a) Transferred Employees. Buyer shall offer employment, commencing
on the Effective Date, to all employees of Seller. Seller shall assist Buyer in
effecting an orderly change of employment of the employees of Seller who accept
employment offers from Buyer (the "Transferred Employees").
(b) Salaries and Wages. The salaries and wages paid by Buyer to the
Transferred Employees immediately after the Effective Date shall be equal to or
greater than the salaries and wages paid by Seller to the Transferred Employees
immediately before the Effective Date.
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(c) Seller's Plans. As of the effective date of their employment
by Buyer, the Transferred Employees shall cease to participate actively in the
employee benefit plans, programs and policies of Seller (the "Seller's Plans"),
and Seller shall cause the Transferred Employees participating in the Seller's
Plans to be fully vested in their benefits accrued thereunder as of such date.
(d) Buyer's Plans. Buyer shall credit the Transferred Employees
with all service recognized by Seller under the Seller's Plans as service with
Buyer for the purposes of eligibility to participate, vesting, and available
levels of benefits under the employee benefit plans, programs and policies of
Buyer (the "Buyer's Plans"). As soon as practicable after the Effective Date,
Seller shall advise Buyer of all service recognized by Seller for the
Transferred Employees under the Seller's Plans as of the Effective Date.
(e) Group Medical Insurance. As of the effective date of their
employment by Buyer, Buyer shall provide or cause to be provided group medical
insurance benefits to the Transferred Employees and their eligible dependents
under the Buyer's Plans. Seller shall provide all notices and fulfill all of its
obligations, if any, under Section 4980B(f) of the Internal Revenue Code of
1986, as amended, with respect to the Transferred Employees.
(f) Vacation, Sick, and Personal Time. Buyer shall permit the
Transferred Employees an opportunity to take vacation, sick, and personal time
with pay, in a manner consistent with the Buyer's Plans, to the extent of the
unused vacation, sick, and personal time to which they were entitled under the
Seller's Plans as of the Effective Date.
(g) No Employment Rights. Nothing contained in this Agreement shall
(1) confer upon any former, current, or future employee of Seller or Buyer any
right or remedy, including, without limitation, any right to employment or
continued employment of any nature or for any specified period, or (2) cause the
employment status of any former, current, or future employee of Seller or Buyer
to be other than terminable at will.
16. Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
(a) Existence. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Tennessee.
(b) Authority; Authorization. Seller has full corporate authority
and power to transact the business in which it is engaged, to execute and
deliver the Seller's Documents, to perform its obligations thereunder, and to
consummate the Acquisition. Seller has taken all corporate action necessary to
authorize the execution and delivery of the Seller's Documents, the performance
of its obligations thereunder, and the consummation of the Acquisition.
(c) Enforceability. The Seller's Documents have been executed and
delivered by a duly authorized officer of Seller, constitute the legal, valid,
and binding obligations of Seller, and are enforceable against Seller in
accordance with their respective terms.
(d) Title to Assets. Seller has full legal and beneficial title to
the Assets, free and clear of all Liens.
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(e) Approvals and Consents. Seller has obtained any and all
approvals, authorizations, consents, and other actions necessary or appropriate
for it to consummate the Acquisition.
(f) No Impediments. Seller's execution and delivery of the Seller's
Documents, performance of its obligations thereunder, and consummation of the
Acquisition will not cause a breach or violation of, or default or event of
default under, (1) the charter or bylaws of Seller; (2) any security issued by
Seller; (3) any contract that Seller is a party to and which breach, violation,
default, or event of default would result in the imposition of any liability or
obligation on Buyer after the Effective Date; (4) any applicable law, rule, or
regulation of any governmental authority; or (5) any applicable decree, order,
injunction, or other decision of any court, arbitrator, or governmental
authority.
(g) No Preferential Right. Except for any inventory included in the
Assets which is to be sold in the ordinary course of the Business, no party
other than Buyer has any prior or preferential right, right of first refusal, or
other similar right to purchase, lease, or otherwise acquire or use the Assets.
(h) No Brokerage Fee. No brokerage, finder's, or similar fee,
commission, or other payment is or will become payable by Buyer in connection
with the Acquisition pursuant to any agreement, contract, or other arrangement
entered into by Seller.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER SELLER NOR
ANY OF ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, OR
REPRESENTATIVES HAS MADE, AND SELLER SHALL NOT BE BOUND BY, ANY EXPRESS OR
IMPLIED REPRESENTATION, WARRANTY, GUARANTEE, PROMISE, STATEMENT, INDUCEMENT, OR
INFORMATION OF ANY KIND OR NATURE WITH RESPECT TO SELLER, THE ASSETS, THE
BUSINESS, OR ANY OTHER MATTER, INCLUDING, WITHOUT LIMITATION, THE PROBABLE
SUCCESS, PROFITABILITY, OR OTHER PROSPECTS OF THE OWNERSHIP OR USE OF THE ASSETS
OR THE CONDUCT OF THE BUSINESS AFTER THE EFFECTIVE DATE. SELLER HEREBY EXPRESSLY
DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO THE ASSETS.
17. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) Existence. Buyer is a limited liability company duly organized,
validly existing, and in good standing under the laws of the State of New York.
(b) Authority; Authorization. Buyer has full authority and power as
a limited liability company to transact the business in which it is engaged, to
execute and deliver the Buyer's Documents, to perform its obligations
thereunder, and to consummate the Acquisition. Buyer has taken all actions
necessary to authorize the execution and delivery of the Buyer's Documents, the
performance of its obligations thereunder, and the consummation of the
Acquisition.
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(c) Enforceability. The Buyer's Documents have been executed and
delivered by a duly authorized officer of Buyer, constitute the legal, valid,
and binding obligations of Buyer, and are enforceable against Buyer in
accordance with their respective terms.
(d) Title to Shares. Seller has full legal and beneficial title to
the Shares, free and clear of all Liens, and no other entity or individual
(including, without limitation, the Severinis) has any right or title to or
interest in any of the Shares.
(e) Approvals and Consents. Buyer has obtained any and all approvals,
authorizations, consents, and other actions necessary or appropriate for it to
consummate the Acquisition.
(f) No Impediments. Buyer's execution and delivery of the Buyer's
Documents, performance of its obligations thereunder, and consummation of the
Acquisition will not cause a breach or violation of, or default or event of
default under, (1) the articles of organization and any and all other
constituent documents of Buyer; (2) any security issued by Buyer; (3) any
contract that Buyer is a party to and which breach, violation, default, or event
of default would result in the imposition of any liability or obligation on
Seller after the Effective Date; (4) any applicable law, rule, or regulation of
any governmental authority; or (5) any applicable decree, order, injunction, or
other decision of any court, arbitrator, or governmental authority.
(g) No Brokerage Fee. No brokerage, finder's, or similar fee,
commission, or other payment is or will become payable by Seller in connection
with the Acquisition pursuant to any agreement, contract, or other arrangement
entered into by Buyer.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER BUYER NOR ANY
OF ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, OR REPRESENTATIVES
HAS MADE, AND BUYER SHALL NOT BE BOUND BY, ANY EXPRESS OR IMPLIED
REPRESENTATION, WARRANTY, GUARANTEE, PROMISE, STATEMENT, INDUCEMENT, OR
INFORMATION OF ANY KIND OR NATURE WITH RESPECT TO BUYER OR ANY OTHER MATTER.
18. Survival of Representations and Warranties. The representations and
warranties made by Seller and Buyer in this Agreement shall survive for a period
of one year after the Effective Date; provided, however, that the
representations and warranties made by Seller in Sections 16(a)-(d) hereof and
by Buyer in Sections 17(a)-(d) hereof shall survive for the maximum period
permitted by applicable law. The liability of Seller and Buyer under their
respective representations and warranties shall expire at the end of the
applicable survival periods; provided, however, that the liability of a party
for a breach or inaccuracy of any representation or warranty shall not expire at
the end of the applicable survival period if the other party notifies such party
of such breach or inaccuracy before the end of such survival period.
19. Indemnification.
(a) Indemnification by Seller and SCB. Seller and SCB jointly and
severally shall defend, indemnify, and hold harmless Buyer, its successors and
assignees, and its and their respective shareholders, directors, officers,
employees, agents, and representatives (collectively, the "Buyer Indemnified
Parties") from and against any and all assessments, charges, costs, damages,
expenses (including, without limitation, attorneys' fees and expenses
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and court costs), fines, judgments, losses, penalties, and other liabilities and
obligations of any kind or nature, whether known or unknown, foreseen or
unforeseen, fixed or contingent, accrued or unaccrued, or otherwise, and any and
all claims, demands, investigations, causes of action, actions, lawsuits, and
other legal proceedings in respect thereof, whether in law or equity (all such
assessments, charges, costs, damages, expenses, fines, judgments, losses,
penalties, and other liabilities and obligations and all such claims, demands,
investigations, causes of action, actions, lawsuits, and other legal proceedings
are referred to collectively as "Losses") arising from or based on (1) any
breach or inaccuracy of any representation or warranty made by Seller in this
Agreement, (2) any breach of or failure to perform any agreement or covenant of
Seller set forth in this Agreement, and (3) any Excluded Liabilities.
(b) Indemnification by Buyer and Xxxxxxxx. Buyer and Xxxxxxxx
jointly and severally shall defend, indemnify, and hold harmless Seller, SCB and
all other entities affiliated with Seller, its and their respective successors
and assignees, and its and their respective shareholders, directors, officers,
employees, agents, and representatives (collectively, the "Seller Indemnified
Parties") from and against any and all Losses arising from or based on (1) any
breach or inaccuracy of any representation or warranty made by Buyer in this
Agreement, (2) any breach of or failure to perform any agreement or covenant of
Buyer set forth in this Agreement, (3) any Assumed Liabilities, and (4) Buyer's
ownership and use of the Assets and conduct of the Business after the Effective
Date.
(c) Notice of Claim. The party making a claim for indemnification
under this Section 19 (the "Indemnified Party") shall promptly notify the party
obligated to provide indemnification hereunder (the "Indemnifying Party") of the
assertion or commencement of any claim, demand, investigation, cause of action,
action, lawsuit, or other legal proceeding in respect of which indemnification
is or may be sought hereunder. The failure by the Indemnified Party to so notify
the Indemnifying Party shall not relieve the Indemnifying Party of its
obligations under this Section 19, except to the extent, if any, that it has
been prejudiced by the lack of timely and adequate notice.
(d) Third-Party Claims. The Indemnifying Party shall have the
right to assume the defense or settlement of any claim, demand, investigation,
cause of action, action, lawsuit, or other legal proceeding asserted or
commenced by a third party in respect of which indemnification is or may be
sought hereunder (a "Third-Party Claim") with counsel reasonably satisfactory to
the Indemnified Party; provided, however, that the Indemnifying Party shall not
settle or compromise any Third-Party Claim without the Indemnified Party's prior
written consent thereto. Notwithstanding the foregoing, (1) the Indemnified
Party shall have the right, at its option and expense, to participate fully in
the defense or settlement of any Third-Party Claim; and (2) if the Indemnifying
Party does not continuously and diligently defend or settle any Third-Party
Claim within 10 days after it is notified of the assertion or commencement
thereof, then the Indemnified Party shall have the right, but not the
obligation, to undertake the defense or settlement of such Third-Party Claim for
the account and at the risk of the Indemnifying Party, and the Indemnifying
Party shall be bound by any defense or settlement that the Indemnified Party may
make as to such Third-Party Claim. The Indemnified Party shall be entitled to
join the Indemnifying Party in any Third-Party Claim for the purpose of
enforcing any right to indemnification hereunder. The Indemnified Party shall
cooperate with the Indemnifying Party in the defense or settlement of any
Third-Party Claim and, at the expense of the Indemnifying Party, shall furnish
any and all information and materials in its possession and endeavor to make any
and all witnesses under its control available to the Indemnifying Party for any
lawful purpose relevant to the defense or settlement of such Third-Party Claim.
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(e) Excluded Losses. As used in this Agreement, the term "Losses"
shall exclude any consequential damages (including, without limitation, lost
profits) or punitive or exemplary damages, except with respect to Third-Party
Claims.
(f) Exclusive Remedy. Any claim, demand, action, lawsuit, or other
legal proceeding arising from or based on this Agreement or the Acquisition,
regardless of whether the same is contractual, tortious or otherwise in nature,
must be made or brought by the Indemnified Party against the Indemnifying Party
in accordance with the provisions and subject to the limitations of this Section
19.
20. General Provisions.
(a) Fees and Expenses. Except as otherwise specifically provided
for herein, the parties hereto shall be responsible for and pay their respective
legal, accounting, and other fees and expenses incurred or assumed in connection
with their negotiation, execution, and delivery of this Agreement and all other
documents and instruments contemplated herein, their performance of their
obligations hereunder and thereunder, and the consummation of the Transactions.
(b) Public Announcements. No party hereto shall issue or make any
press release, public announcement, confirmation, or other disclosure of
information relating to this Agreement or any of the Transactions, except (1)
upon the prior consultation with and approval of Seller and Buyer, (2) to such
party's directors, officers, employees, attorneys, and accountants, (3) to the
customers of Seller in the normal course of business for the purpose of
notifying them of the change in ownership of the Assets, or (4) as may be
required to comply with applicable laws, rules, and regulations.
(c) Entire Agreement. This Agreement, including the attachments
hereto, constitutes the entire understanding among the parties hereto and a
complete and exclusive statement of the terms and conditions of their agreement
relating to the subject matter hereof and supersedes any and all prior
negotiations, understandings, agreements, and arrangements, whether written or
oral, and whether express or implied, between them with respect to the subject
matter hereof (including, without limitation, the letter of intent dated
November 10, 2000 between SCB and Xxxxxxxx), all of which prior negotiations,
understandings, agreements, and arrangements are hereby rendered null, void, and
of no further force or effect.
(d) Third-Party Beneficiaries. Except to the extent that the Buyer
Indemnified Parties and the Seller Indemnified Parties shall be entitled to
indemnification pursuant to Section 19 hereof, no person who is not a party to
this Agreement or a successor, permitted assignee, or legal representative of a
party hereto shall have any interest in or right under this Agreement as a
third-party beneficiary or otherwise.
(e) Notices and Other Communications. All notices and other
communications provided for in this Agreement shall be made in writing, shall be
addressed to the receiving party as set forth below, and shall be delivered
either (1) in person, in which case such notice or other communication shall be
deemed delivered upon its actual receipt, (2) by FedEx, UPS or any other
nationally recognized express delivery service, in which case such notice or
other communication shall be deemed delivered upon its actual receipt, or (3) by
the United States mail, return receipt requested, in which case such notice or
other communication shall be
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deemed delivered three days after the same is deposited in a postal box under
the exclusive control of the United States Postal Service. For the purposes
hereof, the addresses of the parties are as follows:
Seller: Proven Technology, Inc.
c/o SCB Computer Technology, Inc.
0000 Xxxxxx Xxxx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
Buyer: Proven Technology LLC
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: President
SCB: SCB Computer Technology, Inc.
0000 Xxxxxx Xxxx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
Xxxxxxxx: Xxxx Xxxxxxxx
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxxxxx: Xxxxxxx Xxxxxxxx
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
TKC: Twenty Keyland Corp.
00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: President
Any party may change its address for the purposes hereof by notifying the other
party of such change in the manner provided for herein.
(f) Amendment. This Agreement may be altered, amended, modified or
changed (other than any waiver which shall be effective only if made in
accordance with Section 20(g) hereof) only by a written agreement executed by
all the parties hereto.
(g) Waiver. No provision of this Agreement may be waived by any
party hereto unless such waiver is set forth in writing and is executed by the
waiving party. The waiver of any breach of any provision of this Agreement shall
not be deemed to constitute a waiver of any other breach of the same or any
other provision of this Agreement.
(h) Modification and Severability. If a court of competent
jurisdiction declares that any provision of this Agreement is illegal, invalid,
or unenforceable, such provision shall be modified automatically to the extent
necessary to make such provision fully legal, valid, or enforceable. If the
court does not modify any such provision as contemplated herein, but instead
declares it to be wholly illegal, invalid, or unenforceable, such provision
shall be severed
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from this Agreement, this Agreement and the rights and obligations of the
parties hereto shall be construed as if this Agreement did not contain such
severed provision, and this Agreement otherwise shall remain in full force and
effect.
(i) Enforceability. This Agreement shall inure to the benefit of,
and shall be enforceable by and against, the parties hereto and their respective
successors, permitted assignees, and legal representatives.
(j) Assignment. No party hereto shall convey, transfer, assign, or
otherwise dispose of all or any portion of its interest in, or its rights and
obligations under, this Agreement without the prior written consent of all the
other parties hereto, which consent shall not be unreasonably withheld or
delayed. Any conveyance, transfer, assignment, or other disposition made or
attempted in violation of this Section 20(j) shall be void and of no force or
effect.
(k) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED
UNDER, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT-OF-LAWS PROVISIONS THEREOF.
(l) Multiple Counterparts. This Agreement may be executed by the
parties hereto in multiple counterparts, each of which shall be deemed an
original for all purposes, and all of which together shall constitute one and
the same Agreement.
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This Agreement is executed and delivered by the parties hereto as of the
Effective Date.
PROVEN TECHNOLOGY, INC.
By: /s/ T. Xxxxx Xxxx
------------------------------------
T. Xxxxx Xxxx
President
PROVEN TECHNOLOGY LLC
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Xxxx Xxxxxxxx
Sole Member and Manager
SCB COMPUTER TECHNOLOGY, INC.
By: /s/ T. Xxxxx Xxxx
------------------------------------
T. Xxxxx Xxxx
President
/s/ Xxxx Xxxxxxxx
---------------------------------------
Xxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Xxxxxxx Xxxxxxxx
TWENTY KEYLAND CORP.
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Xxxx Xxxxxxxx
Vice President
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