<PAGE> 1
As filed with the Securities and Exchange Commission on March 6, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------
SCB COMPUTER TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
TENNESSEE 62-1201561
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation Identification Number)
or Organization)
1365 WEST BRIERBROOK ROAD, MEMPHIS, TENNESSEE 38138
(901) 754-6577
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
--------------------
GORDON L. BATEMAN
CHIEF FINANCIAL OFFICER
1365 WEST BRIERBROOK ROAD
MEMPHIS, TENNESSEE 38138
(901) 754-6577
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___________.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title Of Shares To Be Registered Amount To Be Offering Price Per Aggregate Offering Registration
Registered Share (1) Price (1) Fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 112,000 $18.00 $2,016,000 $611
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) on the basis of the closing sales price of the
Company's Common Stock on March 4, 1997, as reported on The Nasdaq
Stock Market's National Market.
-----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
================================================================================
<PAGE> 2
112,000 SHARES
SCB COMPUTER TECHNOLOGY, INC.
COMMON STOCK
________________
All of the 112,000 shares (the "Shares") of Common Stock, par value $.01
per share (the "Common Stock"), of SCB Computer Technology, Inc. (the "Company")
offered hereby are being offered by certain shareholders of the Company (the
"Selling Shareholders"). See "Selling Shareholders." The Company will not
receive any proceeds from the sale of the Common Stock offered hereby.
The Shares may be sold from time to time in brokerage transactions at
prevailing market prices in the public markets through one or more brokers or
dealers, in privately negotiated transactions for the account of each of the
Selling Shareholders at prices at or near the market price, or in other
privately negotiated transactions. See "Plan of Distribution."
The Company has agreed to bear all expenses (other than selling commissions
relating to the Shares) in connection with the registration and sale of the
Shares being registered hereby. The Company has agreed to indemnify the Selling
Shareholders against certain liabilities and the Selling Shareholders have
agreed to indemnify the Company against certain liabilities in connection with
this offering, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Plan of Distribution."
The Common Stock is traded on The Nasdaq Stock Market's National Market
(the "Nasdaq National Market") under the symbol "SCBI." The last reported sale
price per share of the Common Stock on the Nasdaq National Market on March 4,
1997 was $18.00.
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized to give any information or to make any
representation in connection with this offering other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstance, create any implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the Common Stock to which it relates.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities offered hereby in any jurisdiction in which it is
not lawful or to any person to whom it is not lawful to make any such offer or
solicitation.
The date of this Prospectus is ,1997.
------------
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act with
respect to the Shares offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement and the exhibits
thereto. Certain items are omitted in accordance with the rules and regulations
of the Commission. Statements contained in this Prospectus concerning the
provisions or contents of any contract or other document referred to herein are
not necessarily complete. With respect to each such contract, agreement, or
document, reference is made to such document for a more complete description,
and each such statement is deemed to be qualified in all respects by such
reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files proxy statements, reports, and other information with the
Commission. The Registration Statement (with exhibits), as well as such proxy
statements, reports, and other information, may be inspected and copied at
prescribed rates at the public reference facilities maintained by the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices located at Seven World Trade Center,
13th Floor, New York, New York 10048, and Northwestern Atrium Center, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission maintains a
web site that contains reports, proxy and information statements and other
information regarding registrants, including the Company, that file such
information electronically with the Commission at http://www.sec.gov.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents or portions of documents filed with the Commission
by the Company (File No. 0-27694) are incorporated by reference into this
Prospectus:
(i) The Company's Annual Report on Form 10-K for the fiscal year
ended April 30, 1996;
(ii) The Company's Quarterly Reports on Form 10-Q for the quarterly
periods ending July 31, 1996 and October 31, 1996;
(iii) The Company's Current Report on Form 8-K, dated May 29, 1996;
(iv) The Company's Current Report on Form 8-K, dated October 8, 1996,
as amended by a Current Report on Form 8-K/A, dated December 4, 1996; and
(v) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, including all amendments and reports
filed for the purpose of updating such description prior to the termination
of the offering.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document which also is
incorporated or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus. Subject to the foregoing, all information appearing in this
Prospectus is qualified in its entirety by the information appearing in the
documents incorporated herein by reference.
2
<PAGE> 4
The Company undertakes to provide, without charge, to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
written or oral request of such person, a copy of any document incorporated by
reference herein (not including exhibits to such documents unless such exhibits
are specifically incorporated by reference into the information incorporated
into this Prospectus). Requests for such documents should be directed to Gordon
L. Bateman, Corporate Secretary, SCB Computer Technology, Inc., 1365 West
Brierbrook Road, Memphis, Tennessee 38138, (901)754-6577.
THE COMPANY
SCB Computer Technology, Inc. ("SCB" or the "Company") is an information
technology services company providing management and technical services
primarily to state and local governments, public utilities, Fortune 500
companies, and other large organizations. SCB's services are delivered to
clients operating information systems primarily in mainframe, client/server, and
other network environments. The Company provides one or more of the following
three general types of information technology ("IT") services to its clients:
(i) consulting services, including advising clients on the acquisition and
strategic utilization of IT systems, planning and designing new IT systems, and
redesigning existing IT systems to increase their efficiency; (ii) outsourcing
services, including using IT professionals employed and managed by SCB for
network design and management, systems support and maintenance, programming and
application software development, and data center management to utilize a
client's IT resources more costeffectively; and (iii) professional staffing
services, including providing skilled technical employees to a client on an
as-needed basis and under the direction of a client's management to eliminate a
client's need to recruit, hire, and train technical employees whose skills may
not be needed between projects.
On February 28, 1997, pursuant to an Asset Purchase Agreement by and among
the Company, TMR Acquisition, Inc., a Tennessee corporation and wholly owned
subsidiary of the Company ("Buyer"), Technology Management Resources, Inc., a
Nebraska corporation ("TMRI"), and the shareholders of TMRI, Buyer acquired
substantially all of the assets of TMRI. Buyer paid $8,500,000 in cash to TMRI
at Closing, $500,000 of which was delivered to Boatmen's Trust Company, pursuant
to an Indemnity and Escrow Agreement. The escrowed amount may be used prior to
February 28, 1998 to satisfy indemnification claims by the Company for breaches
of representations and warranties. In addition, up to an aggregate of
$4,000,000, payable in shares of Common Stock, may be paid to TMRI as additional
purchase price upon the attainment of certain targets for growth in the acquired
business's revenues and earnings in 1998, 1999, and 2000.
The Company's principal executive offices are located at 1365 West
Brierbrook Road, Memphis, Tennessee 38138. The Company's telephone number at
that address is (901)754-6577.
3
<PAGE> 5
SELLING SHAREHOLDERS
The following table sets forth information provided to the Company by the
Selling Shareholders with respect to the beneficial ownership of Common Stock by
the Selling Shareholders as of February 28, 1997, and as adjusted to reflect the
sale of the Shares offered hereby (assuming that all of the Shares offered
hereby will be sold).
<TABLE>
<CAPTION>
Shares Beneficially Shares Shares Beneficially
Owned to be Sold Owned
Prior to the Offering in the After the Offering
Number Percent (1) Offering Number Percent (1)
---------- ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Richard T. Ely, Jr 115,384 1.5% 28,000 87,384 1.2%
Thomas E. Jordan 115,384 1.5% 28,000 87,384 1.2%
J. Michael O'Guinn 115,384 1.5% 28,000 87,384 1.2%
Larry W. Reed 115,384 1.5% 28,000 87,384 1.2%
-------
112,000
</TABLE>
- ---------------
(1) Based on a total of 7,477,119 shares issued and outstanding on March
3,1997.
Messrs. Ely, Jordan, O'Guinn, and Reed are former shareholders of Delta
Software Systems, Inc., a Tennessee corporation ("Delta"). Pursuant to an
Agreement and Plan of Merger (the "Plan of Merger"), dated September 26, 1996,
by and among the Company, Delta, the Selling Shareholders, and Delta
Acquisition, Inc., a Tennessee corporation and wholly owned subsidiary of the
Company ("Delta Acquisition"), Delta was merged (the "Merger") with and into
Delta Acquisition. Delta Acquisition was the surviving corporation in the Merger
and changed its name upon consummation thereof to Delta Software Systems, Inc.
As a result of the Merger, all of the outstanding stock of Delta was converted
into an aggregate of 461,536 shares of the Company's Common Stock (the "Merger
Shares"). Pursuant to an Indemnity and Escrow Agreement between the Company,
Delta Acquisition, and the Selling Shareholders, 10% of the Merger Shares, or
46,154 shares of Common Stock, were delivered to Boatmen's Trust Company, as
escrow agent. The escrowed shares may be used to satisfy indemnification claims
by the Company for any breaches of representations and warranties made in the
Plan of Merger by the Selling Shareholders.
Pursuant to the terms of the Plan of Merger, the Selling Shareholders
received the right to request the Company to register such number of the Merger
Shares as have a fair market value in excess of $1,000,000. See "Plan of
Distribution." All sales of the Merger Shares, whether pursuant to an effective
registration statement or otherwise, must be effected by one or more brokers who
are mutually agreeable to the Company and the Selling Shareholders. In addition,
unless otherwise agreed to in writing in advance by the Company, the Selling
Shareholders may not, during any 30-day period, sell in the aggregate, whether
through an effective registration statement or otherwise, more than one-quarter
(115,384) of the total number of Merger Shares. Messrs. Ely, Jordan, and O'Guinn
are currently employees and officers of Delta Acquisition.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time in brokerage transactions at
prevailing market prices in the public market through one or more brokers or
dealers, in privately negotiated transactions for the account of each of the
Selling Shareholders at prices at or near the market price, or in other
privately negotiated transactions. Unless otherwise agreed to in writing in
advance by the Company, the Selling
4
<PAGE> 6
Shareholders may not, during any 30-day period, sell in the aggregate, whether
through an effective registration statement or otherwise, more than one-quarter
(115,384) of the total number of Merger Shares. The Selling Shareholders have
agreed to execute sales of their Shares in open market transactions through
Morgan Keegan & Company, Inc., a registered broker-dealer that is a market maker
with respect to the Common Stock ("Morgan Keegan"). Ordinary brokerage
commissions will be paid by the Selling Shareholders in connection with
brokerage transactions, including transactions effected by Morgan Keegan.
In connection with the merger of Delta with and into Delta Acquisition,
Messrs. Ely, Jordan, O'Guinn, and Reed received the right to request the
registration of the Shares offered by them hereby pursuant to the Plan of
Merger. The Company has agreed to pay the expenses of this offering, but the
Selling Shareholders will be responsible for all brokerage commissions and any
other selling commissions and stock transfer taxes. Expenses to be paid by the
Company are estimated to be approximately $12,500. The Company has agreed to
maintain the effectiveness of the Registration Statement covering the Shares
until the earlier of (i) September 26, 1998, or (ii) the date on which the
Selling Shareholders may sell the Shares pursuant to Rule 144 of the Securities
Act, which under Rule 144 as recently amended is anticipated to be September 26,
1997.
The Company has agreed to indemnify the Selling Shareholders, and the
Selling Shareholders have agreed to indemnify the Company, against certain
liabilities in connection with this offering, including liabilities under the
Securities Act.
The Selling Shareholders and any brokers or other persons who participate
in the sale of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act, and any commissions received by such
brokers or other persons, and any profits on the resale of the Shares, may be
deemed to be underwriting commissions or discounts.
EXPERTS
The consolidated financial statements of SCB Computer Technology, Inc.
appearing in its Annual Report on Form 10-K for the year ended April 30, 1996
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Delta Software Systems, Inc. as of December 31,
1995 and for the year ended December 31, 1995, have been incorporated herein by
reference to the Company's Current Report on Form 8-K, dated October 8, 1996, as
amended by the Current Report on Form 8-K/A, dated December 4, 1996, in reliance
upon the report of Cannon & Company, independent certified public accountants,
incorporated by reference herein, and upon the authority of such firm as experts
in accounting and auditing.
5
<PAGE> 7
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 611
Accounting fees and expenses.................................. 4,000
Legal fees and expenses....................................... 7,500
Miscellaneous fees and expenses............................... 389
------------
Total........................................................ $ 12,500
============
</TABLE>
- ----------------
* All of the above expenses except the SEC registration fee are estimated. All
of the above expenses will be paid by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Tennessee Business Corporation Act ("TBCA") provides that a corporation
may indemnify any director or officer against liability incurred in connection
with a proceeding if (i) the director or officer acted in good faith, (ii) the
director or officer reasonably believed, in the case of conduct in his or her
official capacity with the corporation, that such conduct was in the
corporation's best interest, or, in all other cases, that his or her conduct was
not opposed to the best interests of the corporation, and (iii) in connection
with any criminal proceeding, the director or officer had no reasonable cause to
believe that his or her conduct was unlawful. In actions brought by or in the
right of the corporation, however, the TBCA provides that no indemnification may
be made if the director or officer is adjudged to be liable to the corporation.
Similarly, the TBCA prohibits indemnification in connection with any proceeding
charging improper personal benefit to a director or officer, if such director or
officer is adjudged liable on the basis that a personal benefit was improperly
received. In cases where the director or officer is wholly successful, on the
merits or otherwise, in the defense of any proceeding instigated because of his
or her status as a director or officer of a corporation, the TBCA mandates that
the corporation indemnify the director or officer against reasonable expenses
incurred in the proceeding. Notwithstanding the foregoing, the TBCA provides
that a court of competent jurisdiction, upon application, may order that a
director or officer be indemnified for reasonable expense if, in consideration
of all relevant circumstances, the court determines that such individual is
fairly and reasonably entitled to indemnification, whether or not the standard
of conduct set forth above was met.
The Amended and Restated Charter of the Company (the "Charter") and its
Amended and Restated Bylaws (the "Bylaws") provide that the Company will
indemnify from liability, and advance expenses to, any present or former
director or officer of the Company to the fullest extent allowed by the TBCA, as
amended from time to time, or any subsequent law, rule, or regulation adopted in
lieu thereof. Additionally, the Charter provides that no director of the Company
will be personally liable to the Company or any of its shareholders for monetary
damages for breach of any fiduciary duty except for liability arising from (i)
any breach of a director's duty of loyalty to the Company or its shareholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) any unlawful distributions, or (iv)
receiving any improper personal benefit.
II-1
<PAGE> 8
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2.1 Agreement and Plan of Merger, dated September 26, 1996,
by and among SCB Computer Technology, Inc., Delta
Acquisition, Inc., Delta Software Systems, Inc., and the
shareholders of Delta Software Systems, Inc. (incorporated
by reference to Exhibit 2 of the Company's Current Report
on Form 8-K, dated October 8, 1996, as amended by the
Company's Current Report on Form 8-K/A, dated
December 4, 1996)
2.2 Asset Purchase Agreement, dated February 28, 1997, by
and among SCB Computer Technology, Inc., TMR
Acquisition, Inc., Technology Management Resources, Inc.,
and the shareholders of Technology Management Resources,
Inc. (Schedules and other exhibits are omitted from this
filing. The Registrant will furnish, as supplementary
information, copies of the omitted materials to the
Securities and Exchange Commission upon request.)
3.1 Amended and Restated Charter of the Company
(incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-1, Registration No. 33-
80707)
3.2 Amended and Restated Bylaws of the Company
(incorporated by reference to Exhibit 3.2 of the Company's
Registration Statement on Form S-1, Registration No. 33-
80707)
4 Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-1, Registration No. 33-80707)
5 Opinion of Bass, Berry & Sims PLC
23.1 Consent of Ernst & Young LLP
23.2 Consent of Cannon & Company
24 Power of Attorney (included on page II-4)
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities offered hereby, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually
II-2
<PAGE> 9
or in the aggregate, represent a fundamental change in the information set
forth in this Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that the undertakings in paragraph (i) and (ii) above do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered hereby which remain unsold at the termination
of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, the Registrant will, unless in the opinion of its counsel
the question has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Memphis, Tennessee, on February 28, 1997.
SCB COMPUTER TECHNOLOGY, INC.
By: /s/ Ben C. Bryant, Jr.
-------------------------------------
Ben C. Bryant, Jr.
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature to the
Registration Statement appears below hereby constitutes and appoints T. Scott
Cobb and Ben C. Bryant, Jr., and each of them, with full power to act without
the other, as his attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments to this
Registration Statement (including post-effective amendments and amendments
thereto) and any registration statement relating to the same offering as this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and each of them full
power and authority to do and perform each and every act and thing, ratifying
and confirming all that said attorneys-in-fact or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ T. Scott Cobb Chairman of the Board of Directors February 28, 1997
- -----------------------
T. Scott Cobb
/s/ Ben C. Bryant, Jr. President, Chief Executive Officer February 28, 1997
- ----------------------- (Principal Executive Officer) and
Ben C. Bryant, Jr. Vice Chairman of the Board of Directors
/s/ Steve N. White Executive Vice President - February 28, 1997
- ----------------------- Development and Director
Steve N. White
/s/ Gordon L. Bateman Chief Financial Officer (Principal February 28, 1997
- ----------------------- Financial and Accounting Officer)
Gordon L. Bateman
/s/ James E. Harwood Director February 28, 1997
- -----------------------
James E. Harwood
/s/ Joseph W. McLeary Director February 28, 1997
- -----------------------
Joseph W. McLeary
</TABLE>
II-4
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2.1 Agreement and Plan of Merger, dated September 26, 1996,
by and among SCB Computer Technology, Inc., Delta
Acquisition, Inc., Delta Software Systems, Inc., and the
shareholders of Delta Software Systems, Inc. (incorporated
by reference to Exhibit 2 of the Company's Current Report
on Form 8-K, dated October 8, 1996, as amended by the
Company's Current Report on Form 8-K/A, dated December
4, 1996)
2.2 Asset Purchase Agreement, dated February 28, 1997, by and
among SCB Computer Technology, Inc., TMR Acquisition,
Inc., Technology Management Resources, Inc., and the
shareholders of Technology Management Resources, Inc.
(Schedules and other exhibits are omitted from this
filing. The Registrant will furnish, as supplementary
information, copies of the omitted materials to the
Securities and Exchange Commission upon request.)
3.1 Amended and Restated Charter of the Company (incorporated
by reference to Exhibit 3.1 of the Company's Registration
Statement on Form S-1, Registration No. 33-80707)
3.2 Amended and Restated Bylaws of the Company (incorporated
by reference to Exhibit 3.2 of the Company's Registration
Statement on Form S-1, Registration No. 33-80707)
4 Specimen Common Stock Certificate (incorporated by
reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-1, Registration No. 33-80707)
5 Opinion of Bass, Berry & Sims PLC
23.1 Consent of Ernst & Young LLP
23.2 Consent of Cannon & Company
24 Power of Attorney (included on page II-4)
</TABLE>
II-5
<PAGE> 1
EXHIBIT 2.2
================================================================================
ASSET PURCHASE AGREEMENT
BY AND AMONG
SCB COMPUTER TECHNOLOGY, INC.,
TMR ACQUISITION, INC.,
TECHNOLOGY MANAGEMENT RESOURCES, INC.,
AND
THE SHAREHOLDERS OF
TECHNOLOGY MANAGEMENT RESOURCES, INC.
DATED AS OF FEBRUARY 28, 1997
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement"), is dated to be effective
as of February 28, 1997, by and between SCB Computer Technology, Inc., a
Tennessee corporation ("SCB"), TMR Acquisition, Inc., a Tennessee corporation
and wholly owned subsidiary of SCB ("Buyer"), Technology Management Resources,
Inc., a Nebraska corporation ("TMRI"), and each of the shareholders of TMRI, as
identified on the signature pages hereto (individually, a "TMRI Shareholder,"
and, collectively, the "TMRI Shareholders").
WHEREAS, the TMRI Shareholders own all of the issued and outstanding shares
of Class A and Class B common stock, par value $1.00 per share, of TMRI (the
"TMRI Common Stock"); and
WHEREAS, the TMRI Shareholders desire to cause TMRI to sell to SCB, and SCB
desires to purchase from TMRI substantially all of TMRI's assets on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants, and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1.
TRANSFER OF ASSETS AND PURCHASE PRICE
1.1 Purchase and Sale of Assets. On the terms and subject to the
conditions set forth herein, TMRI agrees to sell, convey, transfer, and assign
and deliver to Buyer, and Buyer agrees to purchase, receive, assume, and accept,
good and marketable title to the assets used or useful to the business of TMRI,
whether tangible or intangible, real, personal, or mixed, including, without
limitation, trademarks, service marks, trade names (including the right to the
use of TMRI's corporate name) and associated goodwill; inventory; receivables
(including accounts receivable, loans receivable, and advances) and records
related thereto; equipment, furniture, and fixtures; supplies; computer systems
(both hardware and software; leases and leasehold improvements; contract rights;
licenses and permits; patents and copyrights (including all right, title, and
interest in and to the "CLAIMS" software); and know how (such assets being
collectively referred to herein as the "Assets"); provided, however, that cash
and marketable securities of TMRI and two desk sets, a floor safe, television,
stereo system, two laptop computers, and all wall hangings and pictures located
in TMRI's Omaha, Nebraska office that are the personal property of TMRI
employees shall not be included in the Assets. Without limiting the generality
of the foregoing, it is agreed that the Assets will include, without limitation,
all of the assets listed on Exhibit A hereto.
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1.2 Assumption of Liabilities. Neither SCB nor Buyer will in any event
assume or be responsible for any liabilities, liens, claims, obligations, or
encumbrances of TMRI, contingent or otherwise, except as specifically set forth
on Exhibit B hereto, and the Assets shall be sold and conveyed to Buyer free and
clear of all liabilities, liens, claims, obligations, and encumbrances (except
as set forth on Exhibit B). Without limiting the generality of the foregoing, in
no event will SCB or Buyer assume or be responsible for (except as set forth on
Exhibit B):
(a) any income, sales, property, franchise, use, or other tax of
TMRI or any TMRI Shareholder arising out of or resulting from the sale of
the Assets pursuant hereto or any transaction of TMRI or any TMRI
Shareholder prior to or subsequent to the execution of this Agreement;
(b) any liability, obligation, or cost resulting from any claim or
lawsuit or other proceeding relating to the Assets or naming TMRI, or any
successorthereof, or the TMRI Shareholders as a party arising out of
events, transactions, or circumstances occurring or existing prior to
Closing (as defined herein);
(c) any claim against SCB, Buyer, or TMRI, which claim is based, in
whole or in part, upon the failure of TMRI, SCB, or Buyer to comply with
laws applicable to bulk transfers; or
(d) any accrued vacation or sick leave, any employee benefit, or any
other employee cost of TMRI.
1.3 Purchase Price. The purchase price (the "Purchase Price") for the
Assets of up to $12,500,000 will be payable by SCB to TMRI as follows:
(a) an aggregate amount of $8,500,000 in cash, $8,000,000 of which
will be payable to TMRI by wire transfer of immediately available funds,
and $500,000 (the "Escrow Amount") of which will be deposited on or prior
to the Closing in an escrow account to be maintained with Boatmen's Trust
Company, St. Louis, Missouri, as escrow agent (the "Escrow Agent"), which
Escrow Amount shall be held for one year following the effective date
hereof in connection with potential indemnification claims under Article 5
hereof and pursuant to the terms of an Indemnity and Escrow Agreement (the
"Escrow Agreement") substantially in the form of Exhibit C attached hereto;
and
(b) up to an aggregate amount of $4,000,000, payable in shares of
common stock of SCB, par value $.01 per share (the "SCB Common Stock"),
based on the growth in Buyer's revenues and earnings as determined in
accordance with Section 1.4 below (the "Earnout Consideration").
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1.4 Earnout Consideration.
(a) TMRI shall be entitled to receive, as additional purchase price,
the Earnout Consideration upon the attainment by Buyer of certain levels of
growth in revenues and net income. The Earnout Consideration will be
payable by SCB with respect to each of the three fiscal years ending April
30, 1998, 1999, and 2000 in accordance with the formulas set forth on
Exhibit D attached hereto.
(b) SCB shall, at SCB's expense, prepare statements of income for
Buyer for each of the twelve month periods ending April 30, 1998, 1999, and
2000 and shall, at SCB's expense, cause its independent accountants to
audit such statements of income. Except as set forth herein or on Exhibit D
attached hereto, such statements of income shall be prepared in accordance
with generally accepted accounting principles applied on a basis consistent
with the accounting principles reflected in the statements of income of
Buyer for the fiscal year ended April 30, 1997, referenced on Exhibit D
attached hereto. In the preparation of the statements of income for the
fiscal year ended April 30, 1997 (i) Buyer's net income will be adjusted to
take into account taxes associated with operation as a subchapter C
corporation for the full fiscal year at an assumed tax rate of 40%; (ii)
compensation expense will be adjusted to reflect the compensation of the
TMRI Shareholders pursuant to the Employment Agreements (as if such
Employment Agreements had been effective as of May 1, 1996); (iii) there
will be no charge to Buyer's net income for the amortization of goodwill
(or credit for any corresponding tax benefits related thereto) associated
with the transactions contemplated hereby; and (iv) SCB overhead charges
will be allocated, if at all, only in accordance with the principles
established in Section 4.1(b)(viii) hereof. In the preparation of the
statements of income for each of the fiscal years ended April 30, 1998,
1999, and 2000 (i) Buyer's actual taxes will be used; (ii) the TMRI
Shareholder's actual compensation will be used; and (iii) for purposes of
determining the Earnout Consideration, there will be no charge to Buyer's
net income for the amortization of goodwill (or credit for any
corresponding tax benefits related thereto). As soon as reasonably
practicable following fiscal years ended April 30, 1998, April 30, 1999,
and April 30, 2000, SCB shall cause to be delivered to TMRI a copy of such
statements of income for the relevant fiscal year together with a
calculation of the growth in revenues and net income and a determination
whether any Earnout Consideration is payable with respect to such fiscal
year (it being agreed and understood that both revenue and net income must
increase by the targeted amounts or none of the relevant Earnout
Consideration is payable). SCB shall also make available to TMRI and its
advisors all underlying financial data, books, and records reasonably
requested by TMRI that are relevant to the determination of the Earnout
Consideration. TMRI shall have 30 days to accept or reject in writing SCB's
calculations regarding the Earnout Consideration. If TMRI rejects SCB's
calculations regarding the Earnout Consideration, such rejection must be
accompanied by a written statement of the reasons therefor and, if the
parties are unable to reach a compromise within five business days of the
date of such rejection, the dispute
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shall be submitted to arbitration in St. Louis, Missouri, such arbitration
to be conducted in accordance with the rules of the American Arbitration
Association.
(c) In the event any Earnout Consideration is payable, with respect
to any fiscal year, SCB shall deliver to TMRI a certificate representing
the number of shares of SCB Common Stock (the "Earnout Shares") determined
by dividing the amount of the Earnout Consideration by the average of the
closing sales prices of SCB Common Stock as reported on The Nasdaq Stock
Market ("Nasdaq") (or such other exchange or quotation system which the SCB
Common Stock is then traded) for the thirty trading days immediately
preceding the end of the relevant fiscal year (the "Average Price").
(d) In lieu of the issuance of fractional shares of SCB Common
Stock, TMRI will be entitled to receive a cash payment (without interest)
equal to the fair market value of any fraction of a share of SCB Common
Stock to which such holder would be entitled under this Section 1.4, but
for this provision. For purposes of calculating such payment, the fair
market value of a fraction of a share of SCB Common Stock shall be such
fraction multiplied by the relevant Average Price.
1.5 Allocation of Consideration. The Purchase Price will be allocatedamong
the Assets substantially in the form as set forth on Exhibit E attached hereto,
which Exhibit E will be finalized by mutual agreement of the parties within 15
days of the date hereof. The parties hereto agree to cooperate in preparing
Exhibit E and preparing and filing IRS Form 8594 reflecting the allocation set
forth on Exhibit E and acknowledge and agree that such allocation will be
determined by arm's length negotiations and that none of them will take a
position on any income tax return, before any governmental agency charged with
the collections of any income tax, or in any judicial proceeding, that is
inconsistent with such allocation.
1.6 The Closing.
(a) Time and Place. Subject to the terms and conditions of this
Agreement, the closing under this Agreement (the "Closing") will take place
simultaneous with the execution hereof at the offices of Kutak Rock, The
Omaha Building, Omaha, Nebraska, to be effective as of 11:59 p.m. on
February 28, 1997, or at such other time, date, or place as SCB, Buyer,
TMRI, and the TMRI Shareholders may agree. The date on which the Closing
occurs is referred to herein as the "Closing Date."
(b) Parties' Obligations at Closing.
(i) At the Closing, SCB and Buyer will deliver to TMRI:
(A) $8,000,000 in cash by wire transfer of immediately
available funds pursuant to instructions delivered by TMRI to
SCB prior to Closing,
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together with a copy of the Escrow Agreement duly
executed by SCB and the Escrow Agent and evidence,
reasonably satisfactory to TMRI, that the Escrow
Amount has been duly delivered to the Escrow Agent;
(B) a copy of the resolutions of the Boards of
Directors of SCB and Buyer, certified by their
respective corporate secretary, authorizing the
execution, delivery, and performance of this Agreement
and the other documents referenced herein and the
consummation of the transactions contemplated hereby;
(C) an opinion of Bass, Berry & Sims PLC,
legal counsel to SCB and Buyer, substantially in the
form of Exhibit F hereto;
(D) employment agreements (the "Employment
Agreements"), substantially in the form of Exhibit G
hereto, between SCB, Buyer, and each of the TMRI
Shareholders, duly executed by SCB and Buyer;
(E) an assumption agreement (the "Assumption
Agreement") relating to the assumption of certain of
TMRI's liabilities, substantially in the form of
Exhibit H hereto, duly executed by Buyer; and
(F) such other certificates and documents as
TMRI or its counsel may reasonably request.
(ii) At Closing, TMRI and the TMRI Shareholders will
deliver to SCB and Buyer:
(A) a bill of sale (the "Bill of Sale")
relating to the Assets, duly executed by TMRI,
substantially in the form of Exhibit I hereto;
(B) such other instruments of conveyance,
assignment, and transfer, in form and substance
satisfactory to SCB's counsel, as shall be effective
to vest in Buyer good and marketable title to the
Assets;
(C) Employment Agreements, duly executed by
each of the TMRI Shareholders;
(D) a copy of the resolutions of the Board
of Directors of TMRI, certified by TMRI's corporate
secretary, authorizing the execution, delivery, and
performance of this Agreement and the other documents
referenced herein and the consummation of the
transactions contemplated hereby;
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(E) an opinion of Kutak Rock, legal counsel
to TMRI and the TMRI Shareholders, substantially in
the form of Exhibit J hereto;
(F) any required consent or approval of a
creditor, contract party, or public or governmental
authority to the transactions contemplated hereby;
(G) the Escrow Agreement, duly executed by
TMRI; and
(H) such other certificates or documents as
SCB, Buyer, or their counsel may reasonably request.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF
TMRI AND THE TMRI SHAREHOLDERS
Except as set forth in the disclosure letter delivered prior to the
execution hereof to SCB (the "TMRI Disclosure Letter"), TMRI and the TMRI
Shareholders, jointly and severally, represent, warrant, and agree as follows:
2.1 Assets. TMRI is the lawful owner of the Assets free and clear of all
liens, claims, charges, restrictions, security interests, pledges, or
encumbrances of any kind and has the full right, power, authority, and capacity
to sell and transfer the Assets. By virtue of the transfer of the Assets to
Buyer, Buyer will obtain full title to the Assets free and clear of all liens,
claims, charges, restrictions, security interests, pledges, and encumbrances of
any kind.
(a) Tangible Assets. Exhibit A hereto contains an accurate and
complete description of all material fixed and other tangible assets owned,
leased, or used by TMRI, including, without limitation, improvements to
leased property and real property, plants and structures located thereon,
equipment located therein, vehicles, and all personal property relating to
TMRI and its business and properties. All such plants, structures,
machinery, and equipment are in good working condition and repair, normal
wear and tear excepted, and are adequate for the uses for which they are
intended. All such plants, structures, machinery, and equipment conform in
all material respects to applicable health, sanitation, fire, environmental
(including air and water pollution laws and regulations), safety, labor,
zoning, and building laws and ordinances; and TMRI has not received any
notification within the last five years of any violation of any applicable
ordinance or regulation of building, zoning, or other law, in respect of
its plants, structures, properties, or operations. None of such real
property is currently the subject of any eminent domain, condemnation, or
similar proceeding and to the best of TMRI's knowledge, no such
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proceeding is threatened. TMRI is now in possession of each parcel of such
real property, there is no adverse claim against such real property and
there are no pending or, to TMRI's knowledge, threatened proceedings which
might interfere with Buyer's quiet enjoyment of such real property.
(b) Material Contracts. Exhibit A also contains a complete and
accurate list of all contracts and agreements for the performance of
services or the purchase or leasing of property by TMRI of an amount or
value in excess of $50,000 ("Material Contracts"). Each of the Material
Contracts is in full force and effect and is valid and enforceable in
accordance with its terms, and TMRI and each other person that has or had
any obligation under a Material Contract are in full compliance with all
applicable terms and requirements thereof. No event has occurred or
circumstance exists that (with or without notice or lapse of time) may
contravene, conflict with, or result in a violation or breach of, or give
any person the right to declare a default or exercise any remedy under, or
to accelerate the maturity or performance of, or to cancel, terminate, or
modify, any Material Contract. There are no renegotiations of, attempts to
renegotiate, or outstanding rights to renegotiate any amounts paid or
payable under any Material Contract with any person.
(c) Intangible Assets. Exhibit A hereto also contains an accurate and
complete description of all material intangible assets owned or used by
TMRI, including without limitation, copyrights, patents, tradenames,
trademarks, and servicemarks (collectively, the "Intangible Assets"). TMRI
has sole, full, and clear title to the Intangible Assets for the goods and
services for which such Intangible Assets are used and believes that any
registrations thereof are valid and subsisting and are in full force and
effect. TMRI has the sole, full, and clear title to each copyright in the
Intangible Assets and believes that the registrations thereof are valid and
subsisting and are in full force and effect. TMRI (either itself or through
its licensees) has placed and will continue to place appropriate notice of
copyright on all copies embodying such copyrighted works which are publicly
distributed, and TMRI will not (and will not permit any licensee thereof)
to do any act or knowingly omit to do any act whereby any copyright may
become invalidated or dedicated to the public domain.
2.2 Existence; Good Standing; Corporate Power and Authority. TMRI is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Nebraska. TMRI is qualified to do business as a foreign
corporation in the jurisdictions identified on the TMRI Disclosure Letter and is
in good standing under the laws of any state of the United States in which the
character of the properties owned or leased by it therein or in which the
transaction of business makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse effect on the
business, results of operations, financial condition, or prospects of TMRI (a
"TMRI Material Adverse Effect"). TMRI has all requisite corporate power and
authority to own, operate, and lease its properties and to carry on its business
as now conducted.
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2.3 Authorization, Validity, and Effect of Agreements. TMRI has the
requisite corporate power and authority and the TMRI Shareholders have the
requisite power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby. This Agreement and the
transactions contemplated hereby have been approved by TMRI's Board of Directors
and shareholders and the consummation by TMRI of the transactions contemplated
hereby has been duly authorized by all requisite corporate action. This
Agreement constitutes, and all agreements and documents contemplated hereby
(when executed and delivered pursuant hereto) will constitute, the valid and
legally binding obligations of TMRI and the TMRI Shareholders, enforceable in
accordance with their respective terms.
2.4 Capitalization. The authorized capital stock of TMRI consists of 500
shares of Class A Common Stock and 500 shares of Class B Common Stock, of which
34 and 66 shares respectively, are issued and outstanding as of the date of this
Agreement and owned beneficially and of record by the TMRI Shareholders as set
forth in the TMRI Disclosure Letter. TMRI has no outstanding capital stock,
bonds, debentures, notes, or other obligations the holders of which have the
right to vote (or which are convertible into or exercisable for securities
having the right to vote) with the shareholders of TMRI on any matter. All
issued and outstanding shares of TMRI Common Stock are duly authorized, validly
issued, fully paid, nonassessable, and free of preemptive rights. There are no
options, warrants, calls, subscriptions, convertible securities, or other
rights, agreements, or commitments that obligate TMRI to issue, transfer, or
sell any shares of its capital stock. None of the outstanding shares of TMRI
Common Stock are subject to any voting trust agreement, lien, encumbrance,
security interest, restriction, or claim.
2.5 Other Interests. TMRI does not own, directly or indirectly, or have
any obligation to acquire any interest or investment in any corporation,
partnership, joint venture, business, trust, or other entity.
2.6 No Violation. Neither the execution and delivery by TMRI of this
Agreement nor the consummation by TMRI and the TMRI Shareholders of the
transactions contemplated hereby in accordance with the terms hereof, will: (i)
conflict with or result in a breach of any provisions of the articles of
incorporation or bylaws of TMRI; (ii) conflict with, result in a breach of any
provision of or the modification or termination of, constitute a default under,
or result in the creation or imposition of any lien, security interest, charge,
or encumbrance upon any of the assets of TMRI or any TMRI Shareholder pursuant
to any material commitment, lease, contract, or other material agreement or
instrument to which TMRI or any TMRI Shareholder is a party (including any
Material Contract); or (iii) violate or result in a change in any rights or
obligations under any governmental permit or license or any order, arbitration
award, judgment, writ, injunction, decree, statute, rule, or regulation
applicable to TMRI or any TMRI Shareholder.
2.7 Regulatory Consents. No consent, approval, order, or authorization
of, or registration, declaration, or filing with, any governmental entity, is
required by or with respect to TMRI or any TMRI Shareholder in connection with
the execution and delivery of this
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Agreement by TMRI or any TMRI Shareholder, or the consummation by TMRI or any
TMRI Shareholder of the transactions contemplated hereby, which has not been
made or obtained and the failure to make or obtain would have a TMRI Material
Adverse Effect.
2.8 Financial Statements. Prior to the date hereof, TMRI has delivered to
SCB its unaudited financial statements for the fiscal year ended September 30,
1996. The balance sheet provided to SCB by TMRI (including the related notes and
schedules) fairly presents the financial position of TMRI as of its date and the
statements of income, stockholders' equity, and cash flows provided to SCB by
TMRI (including any related notes and schedules) fairly presents the results of
operations, stockholders' equity, and cash flows of TMRI for the periods set
forth therein, in each case in accordance with generally accepted accounting
principles consistently applied, except as may be noted therein. Such financial
statements have been prepared from the books and records of TMRI which
accurately and fairly reflect the transactions and the acquisitions and
dispositions of the assets of TMRI. As of the Closing Date, TMRI did not have
any liabilities, contingent or otherwise, whether due or to become due, known or
unknown, other than as indicated on the balance sheet dated September 30, 1996,
except for current liabilities incurred in the ordinary course of business since
such date.
2.9 No Material Adverse Changes. Since September 30, 1996, there has not
been (i) any material adverse change in the financial condition, results of
operations, business, assets, or liabilities (contingent or otherwise, whether
due or to become due, known or unknown) of TMRI; (ii) any dividend declared or
paid or distribution made on the capital stock of TMRI, or any capital stock
thereof redeemed or repurchased; (iii) any incurrence by TMRI of long term debt;
(iv) any increases in salary, bonus, or other compensation to any officers,
employees, or agents of TMRI; (v) any pending or threatened labor disputes or
other labor problems against or potentially affecting TMRI; or (vi) any other
transaction entered into by TMRI, except in the ordinary course of business and
consistent with past practice.
2.10 Tax Matters.
(a) For purposes of this Agreement, (i) "Tax" means any federal,
state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Section 59A of the Internal
Revenue Code of 1986, as amended (the "Code")), customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not, and (ii) "Tax
Return" means any return, report, information return, or other document
(including any related or supporting information) filed or required to be
filed with any taxing authority in connection with its determination,
assessment, collection, administration, or imposition of any Tax.
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(b) TMRI has duly and timely filed all Tax Returns required to be
filed by it and has duly and timely paid all Taxes and other charges
(whether or not shown on any Tax Return) due or claimed to be due from it
by federal, foreign, state, or local taxing authorities or has set up an
adequate reserve for all Taxes payable by TMRI. True and correct copies of
all Tax Returns relating to federal taxes and sales taxes for the period
from organization through September 30, 1996 have been heretofore delivered
to SCB. The accruals and reserves for Taxes contained in the financial
statements and carried on the books of TMRI (other than any reserve for
deferred taxes established to reflect timing differences between book and
tax income) are adequate to cover all Tax liabilities. Since September 30,
1996, TMRI has not incurred any Tax liabilities other than in the ordinary
course of business. There are no Tax liens upon any properties or assets of
TMRI (whether real, personal, or mixed, tangible or intangible), and,
except as reflected in the financial statements, there are no pending or,
to the TMRI Shareholders' knowledge, threatened audits or examinations
relating to, or claims asserted for, Taxes or assessments against TMRI, and
the TMRI Shareholders are aware of no substantial basis for any such
claims. TMRI has not granted or been requested to grant any extension of
the limitation period applicable to any claim for Taxes or assessments with
respect to Taxes. TMRI is not a party to any Tax allocation or sharing
agreement. TMRI has no liability for the Taxes of any Affiliated Group
under Treasury Regulation 1.1502-6 (or any similar provision of state,
local, or foreign law). TMRI has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, or shareholder, where failure
to do so would have a TMRI Material Adverse Effect.
(c) TMRI (i) has not filed a consent pursuant to Section 341(f) of
the Code nor agreed to have Section 341(f)(2) apply to any disposition of a
subsection (f) asset (as such term is defined in Section 341(f) of the
Code) owned by TMRI; (ii) has not agreed, and is not required, to make any
adjustment under Section 481(a) of the Code by reason of a change in
accounting method or otherwise that will affect the liability of TMRI for
Taxes; (iii) has not made an election, and is not required, to treat any
asset of TMRI as owned by another person pursuant to the provisions of
former Section 168(f)(8) of the Code or as tax-exempt bond financed
property or tax-exempt use property within the meaning of Section 168 of
the Code; and (iv) has not made any of the foregoing elections and is not
required to apply any of the foregoing rules under any comparable state or
local tax provision.
2.11 Employees and Fringe Benefit Plans.
(a) The TMRI Disclosure Letter sets forth the names, ages, and
titles of all members of the Board of Directors and officers of TMRI and
all employees of TMRI earning in excess of $30,000 per year, and the annual
rate of compensation (including
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bonuses) being paid to each such officer and employee as of the most recent
practicable date.
(b) The TMRI Disclosure Letter lists each employment, bonus,
deferred compensation, pension, stock option, stock appreciation right,
profit-sharing or retirement plan, arrangement, or practice, each medical,
vacation, retiree medical, severance pay plan, and each other agreement or
fringe benefit plan, arrangement, or practice, of TMRI, whether legally
binding or not, that affects one or more of TMRI's employees, including all
"employee benefit plans" as defined by Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (collectively,
the "Plans"). TMRI neither has nor sponsors, nor participates in any Plan
that is subject to Title IV of ERISA or the minimum funding standards of
Section 412 of the Code.
(c) For each Plan that is an "employee benefit plan" under Section
3(3) of ERISA, TMRI has delivered to SCB correct and complete copies of the
plan documents and summary plan descriptions, the most recent determination
letter received from the Internal Revenue Service, the most recent Form
5500 Annual Report, and all related trust agreements, insurance contracts,
and funding agreements that implement each such Plan.
(d) TMRI has no commitment, whether formal or informal and whether
legally binding or not, (i) to create any additional Plan; (ii) to modify
or change any Plan; or (iii) to maintain for any period of time any Plan.
The TMRI Disclosure Letter contains an accurate and complete description of
the funding policies (and commitments, if any) with respect to each
existing Plan.
(e) TMRI has no unfunded past service liability in respect of any of
its Plans; neither TMRI, nor any Plan nor any trustee, administrator,
fiduciary, or sponsor of any Plan has engaged in any prohibited transaction
as defined in Section 406 of ERISA or Section 4975 of the Code for which
there is no statutory exemption in Section 408 of ERISA or Section 4975 of
the Code; all filings, reports, and descriptions as to such Plans
(including Form 5500 Annual Reports, summary plan descriptions, and summary
annual reports) required to have been made or distributed to participants,
the Internal Revenue Service, the United States Department of Labor, and
other governmental agencies have been made in a timely manner; there is no
material litigation, disputed claim, governmental proceeding, or
investigation pending or threatened with respect to any of the Plans, the
related trusts, or any fiduciary, trustee, administrator, or sponsor of the
Plans; the Plans have been established, maintained, and administered in all
material respects in accordance with their governing documents and
applicable provisions of ERISA and the Code and Treasury Regulations
promulgated thereunder; and each Plan that is intended to be a qualified
plan under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to the
current terms of the Plan.
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(f) Except where failure to do so would not have a TMRI Material
Adverse Effect, TMRI has complied in all respects with all applicable
federal, state, and local laws, rules, and regulations relating to
employees' employment and employment relationships, including, without
limitation, wage related laws, anti-discrimination laws, employee safety
laws, and COBRA (defined herein to mean the requirements of Code Section
4980B, Proposed Treasury Regulation Section 1.162-26 and Part 6 of Subtitle
B of Title I of ERISA).
(g) The consummation of the transactions contemplated by this
Agreement will not (i) result in the payment or series of payments by TMRI
to any employee or other person of an "excess parachute payment" within the
meaning of Section 280G of the Code; (ii) entitle any employee or former
employee of TMRI to severance pay, unemployment compensation, or any other
payment; or (iii) accelerate the time of payment or vesting of any stock
option, stock appreciation right, deferred compensation, or other employee
benefits under any Plan (including vacation and sick pay).
(h) None of the Plans that are "welfare benefit plans," within the
meaning of Section 3(1) of ERISA, provide for continuing benefits or
coverage after termination or retirement from employment, except for COBRA
rights under a "group health plan" as defined in Code Section 4980B(g) and
ERISA Section 607.
(i) Neither TMRI nor any member in a "controlled group" with TMRI
(as defined in ERISA) has ever contributed to, participated in, or
withdrawn from a multi-employer plan as defined in Section 4001(a)(3) of
Title IV of ERISA, and TMRI has not incurred and does not owe any liability
as a result of any partial or complete withdrawal by any employer from such
a multi-employer plan as described under Section 4201, 4203, or 4205 of
ERISA.
2.12 Accounts Receivable. All accounts receivable of TMRI as of the date
hereof (collectively, the "Accounts Receivable"), are reflected on Exhibit A and
represent or will represent valid obligations arising from sales actually made
or services actually performed in the ordinary course of business. The Accounts
Receivable are current and collectible in the amounts set forth on Exhibit A.
Each of the Accounts Receivable either has been or will be collected in full,
without any set-off, within one hundred and twenty (120) days after the day on
which it first becomes due and payable. There is no contest, claim, or right of
set-off with any maker of an Account Receivable relating to the amount or
validity of such Account Receivable.
2.13 Lawful Operations. TMRI has been and currently is conducting its
business, and each of the premises leased or owned by TMRI have been and now are
being used and operated, in compliance with all statutes (including, without
limitation, 15 U.S.C. ss. 1681 et seq.), regulations, orders, covenants,
restrictions, and plans of federal, state, regional, county, or
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municipal authorities, agencies, or boards applicable to the same, except where
the failure to so comply would not have a TMRI Material Adverse Effect.
2.14 Litigation. There is no suit, action, or proceeding pending or, to
the knowledge of any of the TMRI Shareholders, threatened against or affecting
TMRI is not subject to any currently existing order, writ, injunction, or decree
relating to its operations.
2.15 Hazardous Substances.
(a) TMRI has not authorized nor conducted nor has knowledge of the
generation, transportation, storage, presence, use, treatment, disposal,
release, or handling of (in an amount or of a type that has been or must be
reported to any governmental agency, violates any Environmental Law (as defined
below), or has required or could require remediation expenditures) any hazardous
substance, asbestos, radon, polychlorinated biphenyls ("PCBs"), petroleum
product, or waste (including crude oil or any fraction thereof), natural gas,
liquefied gas, synthetic gas or other material defined, regulated, controlled,
or potentially subject to any remediation requirement under any environmental
law (collectively, "Hazardous Materials"), on, in, or under any real property
owned, leased, or by any means controlled by it;
(b) TMRI is in compliance with all federal, state, and local laws,
ordinances, rules, regulations, and other governmental requirements relating to
pollution, control of chemicals, management of waste, discharges of materials
into the environment, health, safety, natural resources, and the environment
(collectively, "Environmental Laws");
(c) TMRI has, and is in compliance with, all licenses, permits,
registrations, and government authorizations necessary to operate under all
applicable Environmental Laws;
(d) TMRI has not received any written or oral notice from any
governmental entity or any other person and there is no pending or, to any TMRI
Shareholder's knowledge, threatened claim, litigation or any administrative
agency proceeding that: alleges a violation of any Environmental Law by TMRI;
alleges TMRI is a liable party or a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601, et seq., or any state superfund law; has resulted in or could
result in the attachment of an environmental lien on any real property owned,
leased, or controlled by TMRI; or alleges the occurrence of contamination of any
of such real property, damage to natural resources, property damage, or personal
injury based on its activities or the activities of TMRI's predecessors or third
parties (whether at the real property or elsewhere) involving Hazardous
Materials, whether arising under the Environmental Laws, common law principles,
or other legal standards.
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2.16 Certain Business Practices and Regulations. Neither TMRI, nor to any
of the TMRI Shareholder's knowledge, any of its executive officers, directors,
or employees, has (i) made or agreed to make any contribution, payment, or gift
to any customer, supplier, landlord, political candidate, governmental official,
employee, or agent where either the contribution, payment, or gift or the
purpose thereof was illegal under any law or regulation; (ii) established or
maintained any unrecorded fund or asset for any purpose or made any false
entries on its respective books and records for any reason; (iii) made or agreed
to make any contribution, or reimbursed any political gift or contribution made
by any other person, to any candidate for federal, state, or local public office
in violation of any law or regulation; or (iv) submitted any claim for services
rendered or reimbursement for expenses to any person where the services were not
actually rendered or the expenses were not actually incurred.
2.17 No Brokers. TMRI has not entered into any contract, arrangement, or
understanding with any person or firm that may result in the obligation of TMRI
or SCB to pay any finder's fees, brokerage or agent's commissions, or other like
payments in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
2.18 SCB Stock Ownership; Investment Intent.
(a) Neither TMRI nor any of the TMRI Shareholders owns, beneficially or
otherwise, any shares of SCB Common Stock.
(b) The shares of SCB Common Stock, if any, issuable pursuant to this
Agreement are being acquired by TMRI, subject to the terms of this Agreement,
for investment and not with a view to the distribution thereof, and TMRI
acknowledges and understands that the certificate(s) representing such shares of
SCB Common Stock will bear a legend in substantially the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY STATE SECURITIES ACT AND CANNOT BE SOLD, TRANSFERRED, OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER SUCH ACTS OR UNLESS
EXEMPTIONS FROM REGISTRATION ARE AVAILABLE.
THE COMPANY WILL FURNISH THE HOLDER HEREOF INFORMATION REGARDING
THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES, AND LIMITATIONS
APPLICABLE TO EACH CLASS AND THE VARIATIONS AND RIGHTS, PREFERENCES,
AND LIMITATIONS DETERMINED FOR EACH SERIES OF STOCK ISSUED BY THE
COMPANY (AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE
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VARIATIONS FOR FUTURE SERIES) UPON REQUEST IN WRITING AND WITHOUT CHARGE.
(a) TMRI has received and reviewed copies of SCB's Annual Report
on Form 10-K for the fiscal year ended April 30, 1996, SCB's Quarterly Reports
on Form 10-Q for the fiscal quarters ended July 31, 1996 and October 31, 1996,
and SCB's Current Report on Form 8-K, dated October 8, 1996, as amended on
December 4, 1996, relating to the combination with Delta Software Systems, Inc.
(collectively, the "SEC Reports"), which contain certain information regarding
SCB and its business. SCB has made available to TMRI the opportunity to ask
questions of SCB's officers and directors and to acquire such information about
the shares of SCB Common Stock and the business and financial condition of SCB
as TMRI has requested, which additional information has been received.
2.19 Consents and Approvals. TMRI has obtained, or will obtain prior to
Closing, all consents, approvals, authorizations, or orders of third parties,
including governmental authorities, necessary for the authorization, execution,
and performance of this Agreement by SCB and Buyer, which consents, approvals,
authorizations, and orders are listed on the TMRI Disclosure Schedule.
2.20 Full Disclosure. All of the information provided by the TMRI
Shareholders and their representatives herein or in the TMRI Disclosure Letter
is true, correct, and complete in all material respects, and no representation,
warranty, or statement made by the TMRI Shareholders in or pursuant to this
Agreement or the TMRI Disclosure Letter contains any untrue statement of a
material fact or omits or will omit to state any material fact necessary to make
such representation, warranty, or statement not misleading.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SCB AND BUYER
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to TMRI (the "SCB Disclosure Letter"), SCB and Buyer, jointly
and severally, represent, warrant, and agree as follows:
3.1 Existence; Good Standing; Corporate Authority. Each of SCB and Buyer
is duly incorporated, validly existing, and in good standing under the laws of
the State of Tennessee. SCB is duly licensed or qualified to do business as a
foreign corporation and is in good standing under the laws of any other state of
the United States in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified would not have a material
adverse effect on the business, results of operations, or financial condition of
SCB (an "SCB Material Adverse
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Effect"). SCB has all requisite corporate power and authority to own, operate,
and lease its properties and carry on its business as now conducted.
3.2 Authorization, Validity, and Effect of Agreements. SCB and Buyer
have the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby. The consummation
by SCB and Buyer of the transactions contemplated hereby has been duly
authorized by all requisite corporate action. This Agreement constitutes, and
all agreements and documents contemplated hereby (when executed and delivered
pursuant hereto) will constitute, the valid and legally binding obligations of
SCB and Buyer, enforceable in accordance with their respective terms. The
issuance and delivery by SCB of shares of SCB Common Stock pursuant to this
Agreement, if any, have been duly and validly authorized by all necessary
corporate action on the part of SCB. The shares of SCB Common Stock to be issued
pursuant to this Agreement, when issued in accordance with the terms of this
Agreement, will be validly issued, fully paid, and nonassessable.
3.3 Capitalization. The authorized capital stock of SCB consists of
1,000,000 shares of preferred stock, none of which is issued and outstanding,
and 20,000,000 shares of SCB Common Stock, of which 7,477,119 shares are issued
and outstanding as of the date hereof. SCB has no outstanding bonds, debentures,
notes, or other obligations the holders of which have the right to vote (or
which are convertible into or exercisable for securities having the right to
vote) with the shareholders of SCB on any matter. All issued and outstanding
shares of SCB Common Stock are duly authorized, validly issued, fully paid,
nonassessable, and free of preemptive rights. Other than pursuant to this
Agreement, there are no options, warrants, calls, subscriptions, convertible
securities, or other rights, agreements, or commitments that obligate SCB to
issue, transfer, or sell any shares of capital stock of SCB.
3.4 Subsidiaries. The SCB Disclosure Letter sets forth the outstanding
capital stock of each corporation, partnership, or other entity, including
Buyer, of which at least a majority of the voting interest is owned directly or
indirectly by SCB (an "SCB Subsidiary").
3.5 Other Interests. SCB does not own directly or indirectly any
interest or investment (whether equity or debt) in any corporation, partnership,
joint venture, business, trust, or other entity, except for the SCB
Subsidiaries.
3.6 No Violation. Neither the execution and delivery by SCB or Buyer of
this Agreement, nor the consummation by SCB of the transactions contemplated
hereby in accordance with the terms hereof, will: (i) conflict with or result in
a breach of any provisions of the charter or bylaws of SCB or Buyer; (ii)
conflict with, result in a breach of any provision of or the modification or
termination of, constitute a default under, or result in the creation or
imposition of any lien, security interest, charge, or encumbrance upon any of
the assets of SCB or Buyer pursuant to any material commitment, lease, contract,
or other material agreement or instrument to which SCB or Buyer is a party; or
(iii) violate or result in a change in any rights or obligations,
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under any governmental permit or license or any order, arbitration award,
judgment, writ, injunction, decree, statute, rule, or regulation applicable to
SCB or Buyer.
3.7 SEC Documents. Prior to the date hereof, SCB has delivered to TMRI
copies of the SEC Reports. The SEC Reports (i) were prepared in all material
respects in accordance with the applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder, and (ii) as of their respective dates, did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. The consolidated balance sheets included in the SEC Reports
(including the related notes and schedules) fairly present, in all material
respects, the consolidated financial position of SCB as of their respective
dates and each of the consolidated statements of income, shareholders' equity,
and cash flows included in the SEC Reports (including any related notes and
schedules) fairly present, in all material respects, the results of operations,
shareholders' equity, and cash flows of SCB for the periods set forth therein,
in each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as may be noted
therein.
3.8 Litigation. As of the date of this Agreement, there is no action,
suit, or proceeding pending against SCB or any SCB Subsidiary or, to the
knowledge ofSCB or any SCB Subsidiary, threatened against or affecting SCB or
any SCB Subsidiary, at law or in equity, or before or by any federal or state
commission, board, bureau, agency, or instrumentality, that is reasonably likely
to have an SCB Material Adverse Effect.
3.9 Absence of Certain Changes. Since October 31, 1996, there has not
been any material adverse change in the financial condition, results of
operations, business, assets or liabilities (contingent or otherwise, whether
due or to become due, known or unknown), of SCB, except for changes in the
ordinary course of business.
3.10 No Brokers. Neither SCB nor Buyer has entered into any contract,
arrangement, or understanding with any person or firm that may result in the
obligation of SCB, Buyer, TMRI, or the TMRI Shareholders to pay any finder's
fees, brokerage or agent's commissions, or other like payments in connection
with the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby, except that SCB has retained Mercer Capital as
its financial advisor (the fees and expenses of which shall be the sole
responsibility of SCB). Other than the foregoing arrangement, SCB is not aware
of any claim for payment of any finder's fees, brokerage or agent's commissions,
or other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
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3.11 No Prior Business Operations by Buyer. The Buyer is a newly
organized corporation and prior to the Closing has not engaged in substantial
business activities or operations.
ARTICLE 4.
COVENANTS
4.1 Covenants of SCB. SCB covenants and agrees as follows:
(a) in the event any Earnout Shares are issuable, SCB will promptly
prepare and submit to Nasdaq (or such other exchange or quotation system on
which the SCB Common Stock is then traded) a notification for listing
additional shares covering such Earnout Shares and shall use its best
efforts to obtain approval for the listing of such SCB Common Stock,
subject, if applicable, to official notice of issuance.
(b) in order to ensure that determination of the Earnout
Consideration is on a basis consistent with and comparable to the
operations of TMRI prior to the Closing Date, neither SCB nor any of its
affiliates shall, without the prior written consent of TMRI:
(i) merge or consolidate the business of Buyer into or
with any other entity, sell or permit the sale of any material
amount of assets of Buyer, or permit Buyer to be otherwise
dissolved and liquidated;
(ii) require the TMRI Shareholders and employees of Buyer
to devote more than 10% of their working time to matters other
than the conduct of the business of Buyer;
(iii) sell or provide any goods or services to Buyer or
purchase any goods or services from Buyer, except on terms and
conditions no less favorable to Buyer than it could obtain from
unrelated third parties;
(iv) materially change the financial or operational
business practices of Buyer; including but not limited to any
changes and arrangements between Buyer and its sales
representatives;
(v) for purposes of calculating the Earnout Consideration,
SCB shall not charge to Buyer the amount of any fees and expenses
incurred by SCB with respect to the auditing of Buyer's financial
statements and the preparation of Buyer's Tax Returns in excess
of the fees and expenses incurred by TMRI with respect to the
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preparation of its financial statements and the preparation
of its Tax Returns for the fiscal year ended September 30,
1996;
(vi) if any employees of Buyer are included in the
payroll system of SCB or in any employee benefit plan of
SCB, including SCB's 401(k) plan, medical insurance plans or
long-term disability plans, for purposes of calculating the
Earnout Consideration, SCB shall not charge to Buyer the
fees and expenses of converting such employees to SCB's
payroll system and employee benefit plans, and SCB shall not
charge to Buyer the amount of fees and expenses of such
payroll system and plans that are in excess of the fees and
expenses that TMRI would have borne for such employees with
respect to its payroll system and corresponding plans
existing as of the Closing Date;
(vii) if SCB provides programmers who perform services
with respect to any customer or client of Buyer, such
programmers will become employees of Buyer and Buyer will be
charged by SCB a recruiting fee not to exceed $10,000 for
each programmer, with each such fee being payable in six
equal monthly installments regardless of whether such
programmer provides services to Buyer or SCB for the full
six months; and
(viii) no allocation of overhead or general and
administrative costs of SCB will be included in the
calculations used for determining whether the Earnout
Consideration will be payable to TMRI without the prior
written consent of SCB and the TMRI Shareholders.
(c) if a TMRI Shareholder dies, the Earnout Consideration
otherwise payable to TMRI pursuant to the terms of this Agreement will be
payable notwithstanding such death.
(d) if a TMRI Shareholder is no longer employed by Buyer, the
Earnout Consideration otherwise payable to TMRI pursuant to the terms of this
Agreement will continue to be payable to TMRI notwithstanding that the TMRI
Shareholder is no longer an employee of Buyer.
(e) SCB shall not cause Buyer to make any equity or debt
offering, to incur indebtedness or otherwise borrow funds without the prior
written consent of the TMRI Shareholders.
(f) Buyer shall assume responsibility for, and neither Buyer nor
SCB shall take, or cause to be taken, any action that materially adversely
affects, the existing employment contracts with TMRI employees (other than the
TMRI Shareholders) and the existing employee benefits of TMRI's employees
(other than the TMRI Shareholders); provided, however, that this provision does
not prohibit SCB or Buyer from taking, or causing to be taken, any action that
is permitted under such employment contracts or employee benefit plans.
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(g) in the event that SCB is acquired in a merger in which SCB
is not the surviving entity, SCB will arrange for an appropriate
substitution of shares or other securities of the entity with which
SCB is merged in lieu of the shares that are the subject of the
Earnout Consideration or make arrangements to ensure that TMRI obtains
equivalent value for SCB Common Stock payable as Earnout
Consideration.
(h) SCB will timely file or cause to be filed all reports
required to be filed under the Exchange Act, and will otherwise take
all such action as may be required to ensure that SCB remains eligible
to register the resale by TMRI of SCB Common Stock for any
dispositions of SCB Common Stock that may be held by it; provided,
however, that if SCB's failure to meet the requirements of Form S-3 is
attributable, directly or indirectly, to the failure, acts or
omissions of TMRI, SCB shall not be in violation of this Section
4.1(h).
4.2 Change in Name; Use of Name. Within seven calendar days
after the Closing Date, the TMRI Shareholders shall deliver to SCB all
such executed documents as may be required to change TMRI's name to
another name bearing no similarity to "Technology Management
Resources, Inc." including, but not limited to, a name change document
with the Secretary of State of Nebraska and an appropriate name change
notice for each state where TMRI is qualified to do business. The TMRI
Shareholders hereby appoint SCB as their attorney-in-fact to file all
such documents on or after the Closing Date. From and after the
Closing Date, the TMRI Shareholders will sign such consents and take
such other actions as SCB or Buyer shall reasonably request in order
to permit SCB and Buyer to use the name "Technology Management
Resources, Inc." and any variation thereof. From and after the Closing
Date, neither TMRI nor the TMRI Shareholders will use the name
"Technology Management Resources, Inc." or any names similar thereto
or variants thereof.
4.3 Further Assurances. SCB and Buyer, from time to time after
the Closing and at the TMRI Shareholders' reasonable request, and TMRI
and the TMRI Shareholders from time to time after the Closing and at
SCB's reasonable request, will execute, acknowledge, and deliver to
TMRI, the TMRI Shareholders, Buyer, or SCB, as the case may be, such
other instruments of conveyance and transfer and will take such other
actions and execute and deliver such other documents, certifications,
and further assurances as TMRI, the TMRI Shareholders, Buyer, or SCB,
as the case may be, may reasonably require in order to better enable
the other party to complete, perform, or discharge any of the
liabilities or obligations assumed hereunder. Each of the parties
hereto will cooperate with the other and execute and deliver to the
other parties hereto such other instruments and documents and take
such other actions as may be reasonably requested from time to time by
any other party hereto as necessary to carry out, evidence, and
confirm the intended purposes of this Agreement.
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ARTICLE 5.
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
5.1 Survival of Representations and Warranties. The representations and
warranties of the parties contained in Articles 2 and 3 of this Agreement shall
survive for a period of one year from the effective date hereof.
5.2 Indemnification by TMRI and the TMRI Shareholders. Subject to the
provisions of this Article 5 and the Escrow Agreement, TMRI and the TMRI
Shareholders, jointly and severally, in accordance with the Escrow Agreement,
agree to indemnify and hold harmless SCB and Buyer, and each officer, director,
employee, or other agent thereof and their respective estates (each being an
"SCB Indemnified Party"), from and against any and all claims, losses, damages,
liabilities, and expenses (including without limitation, settlement costs and
any legal or other fees or expenses for investigating or defending any actions
or threatened actions) reasonably incurred by such SCB Indemnified Party in
connection with each and all of the following:
(a) any misrepresentation or breach of any warranty made by TMRI or
either of the TMRI Shareholders in this Agreement;
(b) the nonfulfillment or breach of any covenant, agreement, or
obligation of TMRI or either of the TMRI Shareholders contained in or
contemplated by this Agreement;
(c) any misrepresentation or breach of any warranty contained in any
statement, certificate, or other document furnished by TMRI or either of
the TMRI Shareholders pursuant to this Agreement or in connection with the
transaction contemplated by this Agreement; and
(d) any attempt (whether or not successful) by any person to cause
or require such SCB Indemnified Party to pay or discharge any debt,
obligation, liability, or commitment, the existence of which would entitle
such SCB Indemnified Party to indemnification pursuant to clauses (a)
through (c) of this Section 5.2 or would constitute a breach of any such
representation, warranty, or agreement under this Agreement.
5.3 Indemnification by SCB and Buyer. Subject to the provisions of this
Article 5, SCB and Buyer shall, jointly and severally, indemnify, defend, and
hold harmless, TMRI and each officer, director, employee, shareholder, or other
agent thereof and their respective estates (each being a "TMRI Indemnified
Party"), from and against any and all claims, losses, damages, liabilities, and
expenses (including, without limitation, settlement costs and any legal or other
fees
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or expenses for investigating or defending any actions or threatened actions)
reasonably incurred by such TMRI Indemnified Party in connection with each and
all of the following:
(a) any misrepresentation or breach of any warranty made by SCB or
Buyer in this Agreement;
(b) the nonfulfillment or breach of any covenant, agreement, or
obligation of SCB or Buyer contained in or contemplated by this Agreement;
(c) any misrepresentation or breach of any warranty contained in any
statement, certificate, or other document furnished by SCB or Buyer
pursuant to this Agreement or in connection with the transactions
contemplated by this Agreement; and
(d) any attempt (whether or not successful) by any person to cause
or require such TMRI Indemnified Party to pay or discharge any debt,
obligation, liability, or commitment, the existence of which would entitle
such Seller Indemnified Party to indemnification pursuant to clauses (a)
through (c) of this Section 5.3 or would constitute a breach of any such
representation, warranty, or agreement under this Agreement.
5.4. Indemnification Procedure. Subject to the provisions of the Escrow
Agreement, if in effect, an indemnified party shall promptly notify the
indemnifying party of any claim, demand, action, or proceeding for which
indemnification will be sought under Section 5.2 or 5.3 of this Agreement, and,
if such claim, demand, action, or proceeding is a third party claim, demand,
action, or proceeding, the indemnifying party will have the right at its expense
to assume the defense thereof using counsel reasonably acceptable to the
indemnified party. The indemnified party shall have the right to participate, at
its own expense, with respect to any such third party claim, demand, action, or
proceeding. In connection with any such third party claim, demand, action, or
proceeding, SCB, Buyer, TMRI and the TMRI Shareholders shall cooperate with each
other and provide each other with access to relevant books and records in their
possession. No such third party claim, demand, action, or proceeding shall be
settled without the prior written consent of the indemnified party. If a firm
written offer is made to settle any such third party claim, demand, action, or
proceeding and the indemnifying party proposes to accept such settlement, and
the indemnified party refuses to consent to such settlement, then: (i) the
indemnifying party shall be excused from, and the indemnified party shall be
solely responsible for, all further defense of such third party claim, demand,
action, or proceeding; and (ii) the maximum liability of the indemnifying party
relating to such third party claim, demand, action, or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from the
indemnified party on such third party claim, demand, action, or proceeding is
greater than the amount of the proposed settlement.
5.5 Limitation. Except as provided in the Escrow Agreement, the total
liability of TMRI and the TMRI Shareholders for any single Loss and all Losses
in the aggregate with respect
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to indemnification claims by SCB and Buyer shall be limited to the Escrow
Amount, except that, the liability of TMRI and the TMRI Shareholders to SCB or
Buyer for fraud shall not be limited to the Escrow Amount.
ARTICLE 6.
REGISTRATION AND SALE OF EARNOUT SHARES
6.1 Registration Rights.
(a) If, at any time on or after Earnout Shares have been issued to TMRI,
SCB is and continues to be eligible to effect a Registration Statement on Form
S-3 (or such successor form providing for short form registration) covering
resales of SCB Common Stock by SCB shareholders, and TMRI shall notify SCB in
writing that it desires to offer or cause to be offered for public sale Earnout
Shares with a fair market value in excess of $500,000, then SCB will use its
best efforts to cause the filing of and, subject to the provisions of Section
6.1(c), maintain for a period of up to the lesser of (i) 180 days, or (ii) until
such time as TMRI may sell such Earnout Shares pursuant to Rule 144 (or any
successor or similar rule of the Securities Act), an effective registration
statement pursuant to Rule 415 (or any successor or similar rule of the
Securities Act), including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other state
securities laws, for the purpose of effecting sales of the Earnout Shares
requested to be registered by TMRI. SCB shall be obligated to take action to
comply with this Section 6.1(a) on only one occasion.
(b) Each time that SCB proposes to file a registration statement under the
Securities Act with respect to an underwritten offering for cash by SCB of its
equity securities on a form that would also permit the registration of the
Earnout Shares, SCB will give written notice of such proposal to TMRI; provided,
however, that, if there is an effective registration statement covering the
Earnout Shares, no such notice pursuant to this Section 6.1(b) shall be
required. In such event, TMRI may, by written request given within five business
days after receipt by TMRI of any such notice by SCB, require SCB to cause such
number of the Earnout Shares as requested by TMRI to be included in such
registration statement. Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering, if any, advise SCB that inclusion
of TMRI's shares would (i) make it impracticable to conduct an underwritten
offering of the SCB Common Stock being registered at the price at which such SCB
Common Stock could be sold without such inclusion, or (ii) materially interfere
with the success of the offering by SCB, then the number of the shares requested
to be included in the registration by TMRI may be reduced or eliminated.
Notwithstanding anything to the contrary in this Section 6.1(b), SCB may, in its
sole discretion and without the consent of TMRI postpone the filing or
effectiveness of such registration statement or withdraw any such registration
statement and abandon any proposed offering.
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<PAGE> 25
(c) Notwithstanding the foregoing, SCB shall have no obligation to
register the resale of any Earnout Shares on behalf of TMRI or to keep any
previouslyfiled registration statement effective pursuant to this Article 6 in
the event such shares could be sold by TMRI pursuant to and in compliance with
Rule 144 (or any successor or similar rule) promulgated pursuant to the
Securities Act.
6.2 Expenses. TMRI shall bear all brokerage fees, underwriting discounts,
and commissions, if any, applicable to the sale of the Earnout Shares and the
related fees and disbursements of its legal counsel and accountants. SCB shall
bear all other expenses in connection with any registration of the Earnout
Shares pursuant to this Article 6.
6.3 SCB Indemnification. In the case of a registration effected by or
pursuant to this Article 6, SCB agrees to indemnify and hold harmless TMRI
against any and all losses, claims, damages, or liabilities to which TMRI may
become subject under the Securities Act or any other statute or common law, and
to reimburse TMRI for any reasonable legal or other expense actually and
reasonably incurred by it in connection with investigating any claim and
defending any action, insofar as such losses, claims, damages, liabilities, or
actions arise out of or are based upon: (i) any untrue statement, or alleged
untrue statement, of a material fact contained in the registration statement or
any post-effective amendment thereof, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, if
used prior to the effective date of the registration statement, or contained in
the prospectus (as amended or supplemented if SCB shall have filed with the
Securities and Exchange Commission any amendment thereof or supplement thereto),
if used within the period during which SCB is required to keep the registration
statement in which such prospectus is contained current pursuant to the terms of
this Article 6, or the omission or alleged omission to state therein a material
fact necessary in order to make the statements contained therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that the indemnification agreement contained in this Section 6.3 shall not apply
to such losses, claims, damages, liabilities, or actions arising out of, or
based upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was made in reliance
upon and in conformity with written information furnished to SCB by or on behalf
of TMRI specifically for use in connection with the preparation of the
registration statement or any preliminary prospectus contained in the
registration statement or any such amendment thereof or supplement thereto.
6.4 TMRI Indemnification. In the case of a registration effected pursuant
to this Article 6, TMRI agrees to indemnify and hold harmless SCB and each
person, if any, who controls SCB within the meaning of Section 15 of the
Securities Act, its directors, and those officers of SCB who shall have signed
the registration statement or any post-effective amendment thereof or any
preliminary prospectus or prospectus (as amended or as supplemented, if amended
or supplemented as aforesaid) contained in the registration statement against
losses, claims,
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<PAGE> 26
damages, liabilities, or actions which arise out of or are based upon: (i) any
untrue statement, or alleged untrue statement, of a material fact contained in
the registration statement or any post-effective amendment thereof, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, if used prior to the effective date of the
registration statement, or contained in the prospectus (as amended or
supplemented if SCB shall have filed with the Securities and Exchange Commission
any amendment thereof or supplement thereto), if used within the period during
which SCB is required to keep the registration statement in which such
prospectus is contained current pursuant to the terms of this Article 6, or the
omission or alleged omission to state therein a material fact necessary in order
to make the statements contained therein, in light of the circumstances under
which they were made, not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished to SCB by or on
behalf of TMRI in writing specifically for use in connection with the
preparation of the registration statement or any such amendment thereof or
supplement thereto.
6.5 Indemnification Procedure. Each indemnified party shall promptly after
the receipt of notice of the commencement of any action against such indemnified
party in respect of which indemnity may be sought from an indemnifying party on
account of an indemnity agreement contained in this Article 6, notify the
indemnifying party in writing of the commencement thereof; provided, however,
that the omission to so notify the indemnifying party shall not relieve the
indemnifying party from any other liability which it may have to such
indemnified party. In case any such action shall be brought against any
indemnified party and it shall notify any indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it may wish, jointly and with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall be responsible for any reasonable legal or
other expenses subsequently actually incurred by the indemnifying party in
connection with the defense thereof; provided further, that if any indemnified
party shall have reasonably concluded that there may be one or more legal
defenses available to such indemnified party that are different from or
additional to those available to the indemnifying party, or that such claim or
litigation involves or could have an effect upon matters beyond the scope of the
indemnity agreement provided in this Article 6, the indemnifying party shall not
have the right to assume the defense of such action on behalf of such
indemnified party, and such indemnifying party shall be required to reimburse
such indemnified party and any person controlling such indemnified party for the
reasonable fees and expenses of any counsel retained by the indemnified party,
but not for matters that are beyond the scope of the indemnity agreement
provided in this Article 6; and provided further, that no such action shall be
settled without the consent of the indemnifying party and the indemnified party,
which consent neither party shall unreasonably withhold.
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<PAGE> 27
6.6 Contribution. If the indemnification provided for in this Article 6
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
6.7 Orderly Disposition of Shares. Unless otherwise agreed in writing in
advance by SCB, TMRI may not, during any 30-day period, sell in the aggregate,
whether through an effective registration statement or otherwise, more than
one-half of the total number of Earnout Shares then currently owned by TMRI. All
sales of the Earnout Shares shall be effected by one or more brokers who are
mutually agreeable to SCB and TMRI. This Section 6.7 may be enforced by the
delivery of "stop transfer" instructions by SCB to the transfer agent for the
SCB Common Stock. When and as the Earnout Shares are sold pursuant to a
registration statement or otherwise, TMRI shall provide SCB with confirmations
or other evidence of the sale thereof and the price therefor.
6.8 TMRI Information. TMRI shall promptly furnish SCB, upon request,
with all information as may be reasonably required for inclusion in the
registration statement, or any amendment or supplement thereto. Such information
shall be furnished during the period within which SCB is required to effect such
registration pursuant to this Article 6 and shall include, without limitation, a
description of the nature and method of the proposed offer and sale of the
shares.
6.9 No Injunction. TMRI shall have no right to take any action to
restrain, enjoin, or otherwise delay any registration as a result of any
controversy that might arise with respect to the interpretation or
implementation of this Article 6.
6.10 Nonassignable. The rights of TMRI pursuant to this Article 6 are not
transferable or assignable to any person, except to the TMRI Shareholders, in
the event of the dissolution of TMRI; if and only if the TMRI Shareholders
assume, jointly and severally, the obligations of TMRI under this Article 6.
6.11 Nonexclusivity. Nothing in this Article 6 shall prohibit SCB from
including in the registration statement subject to this Article 6 any shares of
SCB Common Stock it chooses to
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register on behalf of SCB or any holders other than TMRI, on substantially the
same terms and conditions.
ARTICLE 7.
GENERAL PROVISIONS
7.1 Assignment of TMRI's Contracts. Nothing in this Agreement shall be
deemed to constitute an assignment or attempt to assign any contract or other
agreement to which TMRI is a party if the attempted assignment thereof without
the consent of the other party to such contract or agreement would constitute a
breach thereof or effect in any way the rights of TMRI thereunder. If after TMRI
has used its best efforts to obtain a consent of any such other party to such
contract or agreement, such consent shall not be obtained or an attempted
assignment thereof would be ineffective and would affect the rights of TMRI
thereunder, TMRI will cooperate with Buyer in any reasonable arrangement
designed to provide for Buyer the benefits under any such contract or agreement,
including the enforcement, at the cost and for the benefit of the Buyer, of any
and all rights of TMRI or Buyer against such other party thereto arising out of
the breach or cancellation thereof by such other party or otherwise.
7.2 Notices. Any notice required to be given hereunder shall be sufficient
if in writing, by courier service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid), addressed as follows:
<TABLE>
<S> <C>
If to SCB or Buyer: If to TMRI or the TMRI Shareholders:
Ben C. Bryant, Jr. Thomas R. Marshall
President and Chief 8502 Makaha Circle
Executive Officer Omaha, Nebraska 68128
SCB Computer Technology, Inc.
1365 West Brierbrook Road and
Memphis, Tennessee 38138
Thomas V. Ruffino
1439 S. 134th Street
Omaha, Nebraska 68144
with a copy to: with a copy to:
J. Gentry Barden Joe E. Armstrong
Bass, Berry & Sims PLC Kutak Rock
2700 First American Center The Omaha Building
Nashville, Tennessee 38238 Omaha, Nebraska 68102
</TABLE>
27
<PAGE> 29
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
personally delivered or mailed.
7.3 Assignment; Binding Effect; Benefit. Neither this Agreement nor any of
the rights, interests, or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that TMRI may assign its rights
hereunder to the TMRI Shareholders in the event of the dissolution of TMRI, if
and only if the TMRI Shareholders assume, jointly and severally, the obligations
of TMRI hereunder. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
7.4 Entire Agreement. This Agreement, the Exhibits, the TMRI Disclosure
Letter, the SCB Disclosure Letter, and any documents delivered by the parties in
connection herewith constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior and contemporaneous
agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.
7.5 Amendment. This Agreement may be amended by the parties hereto, by
action taken by their respective Boards of Directors, if applicable. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
7.6 Governing Law. The validity of this Agreement, the construction of its
terms and the determination of the rights and duties of the parties hereto shall
be governed by and construed in accordance with the laws of the State of
Tennessee applicable to contracts made and to be performed wholly within such
state.
7.7 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
7.8 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties,
covenants, or agreements contained in this Agreement. The waiver by any party
hereto of a breach of any provision hereunder shall not operate or be construed
as a waiver of any prior or subsequent breach of the same or any other provision
hereunder.
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7.9 Incorporation of Exhibits. The TMRI Disclosure Letter, the SCB
Disclosure Letter, and the Exhibits attached hereto and referred to herein are
hereby incorporated herein and made a part hereof for all purposes as if fully
set forth herein.
7.10 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.11 Expenses. Each party to this Agreement shall bear its own expenses in
connection with the transactions contemplated hereby.
7.12 Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of competent jurisdiction, this
being in addition to any other remedy to which they are entitled by contract, at
law, or in equity.
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<PAGE> 31
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year first written
above.
SCB COMPUTER TECHNOLOGY, INC.
By: /s/ Steve N. White
-------------------------------------
Title: Executive Vice President
-------------------------------------
TMR ACQUISITION, INC.
By: /s/ Steve N. White
-------------------------------------
Title: Vice President
-------------------------------------
TECHNOLOGY MANAGEMENT RESOURCES, INC.
By: /s/ Thomas R. Marshall
-------------------------------------
Title: President
-------------------------------------
30
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THE TMRI SHAREHOLDERS:
/s/ Thomas R. Marshall
----------------------
Thomas R. Marshall
/s/ Thomas V. Ruffino
----------------------
Thomas V. Ruffino
31
<PAGE> 33
ATTACHMENTS AND EXHIBITS
TMRI Disclosure Letter
SCB Disclosure Letter
Exhibit A -- List of Assets
Exhibit B -- Assumed Liabilities
Exhibit C -- Form of Indemnity and Escrow Agreement
Exhibit D -- Earnout Consideration Formulas
Exhibit E -- Allocation of Purchase Price
Exhibit F -- Form of Bass, Berry & Sims PLC Legal Opinion
Exhibit G -- Form of Employment Agreements
Exhibit H -- Form of Assumption Agreement
Exhibit I -- Form of Bill of Sale
Exhibit J -- Form of Kutak Rock Legal Opinion
32
<PAGE> 1
EXHIBIT 5
BASS, BERRY & SIMS PLC
A PROFESSIONAL LIMITED LIABILITY COMPANY
ATTORNEYS AT LAW
2700 FIRST AMERICAN CENTER 1700 RIVERVIEW TOWER
NASHVILLE, TENNESSEE 37238-2700 POST OFFICE BOX 1509
TELEPHONE (615) 742-6200 KNOXVILLE, TENNESSEE 37901-1509
TELECOPIER (615) 742-6293 TELEPHONE (423) 521-6200
TELECOPIER (423) 521-6234
March 6, 1997
SCB Computer Technology, Inc.
1365 West Brierbrook Road
Memphis, TN 38138
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as your counsel in connection with your preparation of a
Registration Statement on Form S-3 (the "Registration Statement") to be filed by
you with the Securities and Exchange Commission on March 6, 1997, covering
112,000 shares, par value $.01 per share, of common stock (the "Common Stock")
of SCB Computer Technology, Inc. (the "Company") to be sold by Richard T. Ely,
Jr., Thomas E. Jordan, J. Michael O'Guinn, and Larry W. Reed (the "Selling
Shareholders") on the terms set forth in the Registration Statement.
In connection with this opinion, we have examined and relied upon such
records, documents, certificates, and other instruments as in our judgment are
necessary or appropriate in order to express the opinions hereinafter set forth
and have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us as certified or photostatic copies.
Based on the foregoing and such other matters as we have deemed relevant,
we are of the opinion that the shares of Common Stock to be sold by the Selling
Shareholders are validly issued, fully paid, and nonassessable.
Very truly yours,
/s/ Bass, Berry & Sims PLC
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Auditors
We consent to reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of SCB Computer
Technology, Inc. for the registration of 112,000 shares of its common stock and
to the incorporation by reference therein of our report dated June 20, 1996,
(except for the second paragraph of Note 11, as to which the date is July 3,
1996) with respect to the consolidated financial statements of SCB Computer
Technology, Inc. included in its Annual Report (Form 10-K) for the year ended
April 30, 1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Memphis, Tennessee
February 28, 1997
II-7
<PAGE> 1
EXHIBIT 23.2
CONSENT
We consent to the incorporation by reference in this Registration Statement of
SCB Computer Technology, Inc. on Form S-3 of our report dated September 11,
1996, on the financial statements of Delta Software Systems, Inc., appearing in
the Current Report on Form 8-K, dated October 8, 1996, as amended by the Current
Report on Form 8-K/A, dated December 4, 1996, and to the reference to our firm
under the heading "Experts" in the Prospectus, which is a part of this
Registration Statement.
CANNON & COMPANY
Memphis, Tennessee
March 5, 1997
