DLA PIPER LLP (US)

Michael D. Hynes (mh5086)

Carrie S. Parikh (cd5651)

michael.hynes@dlapiper.com

1251 Avenue of the Americas

New York, New York 10020

(212) 335-4500

Attorneys for Plaintiff

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COGNIZANT TECHNOLOGY SOLUTIONS 

U.S. CORP.,

 Plaintiff,

 -vsPEPPERWEED CONSULTING, LLC,

AMERISERV FINANCIAL BANK, and 

WELLS FARGO BANK, N.A.

 Defendants.

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UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

CIVIL ACTION NO. 

COMPLAINT

Cognizant Technology Solutions U.S. Corp. (“Cognizant”), by its attorneys, and 

as and for its Complaint for Injunctive Relief, Declaratory Relief, Indemnification and 

Damages against Defendants, Pepperweed Consulting LLC (“Pepperweed”) and 

Ameriserv Financial Bank (“Ameriserv”) states as follows:

INTRODUCTION

1. Pursuant to an Asset Purchase and an Escrow Agreement Cognizant is 

owed over $793,843.74 – Accounts Receivable and Accrued Compensation Entitlements

– more than half of which is being held in an escrow account. Plaintiff Cognizant seeks 

the release of escrowed funds being wrongfully withheld from it as a result of meritless 

“objections” presented to the escrow agent by Defendants Pepperweed and Ameriserv for 

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the sole purpose of preventing the timely and proper release of such funds. Cognizant 

brings this action for specific performance, injunctive relief, declaratory relief, 

indemnification and damages resulting from Defendants’ improper conduct. 

THE PARTIES

2. Plaintiff, Cognizant Technology Solutions U.S. Corp., is a Delaware 

Corporation with a principle place of business located at 500 Frank W Burr Boulevard, 

Teaneck, New Jersey 07666-6821. Cognizant is a leading provider of information 

technology, consulting, and business process outsourcing services. 

3. Defendant, Pepperweed Consulting LLC, is an Indiana limited liability

company with a principle place of business located at 9465 Counselors Row, 

Indianapolis, Indiana 46240-3817. Pepperweed is a provider of advisor consulting 

services, technology services, support services and products. 

4. Defendant, Ameriserv Financial Bank, is a national banking association 

headquartered at 216 Franklin Street, Johnstown, Pennsylvania 15907-0520. On or about 

October 4, 2006, Ameriserv and Pepperweed entered into a loan agreement under which 

Ameriserv was owed from Pepperweed an outstanding principle balance of not less than 

$5,978,000 (the “Pepperweed/Ameriserv Loan”). 

5. Interested-Party, Wells Fargo Bank, N.A. (“Wells Fargo”), is a national 

and international banking association headquartered in Minneapolis, Minnesota. Wells 

Fargo serves as the Escrow Agent under the Escrow Agreement at issue in this dispute. 

Wells Fargo is named as an interested-party to this lawsuit for the sole and exclusive 

reason that Wells Fargo’s interests may be impacted in the event the Court grants the 

relief sought herein. Plaintiff is not taking an adverse position against Wells Fargo. 

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JURISDICTION AND VENUE

6. This Court has diversity jurisdiction over this action pursuant to 28 U.S.C. 

§ 1332 because this controversy is between citizens of different States, and the sum or 

value of the amount in controversy exceeds $75,000, exclusive of interest and costs.

7. Venue in this District is proper pursuant to 28 U.S.C. § 1391(c) because a 

substantial part of the events or omissions giving rise to the claims asserted herein 

occurred in this judicial district. 

8. Venue is also proper pursuant to 28 U.S.C. § 1391(c) because the parties 

have agreed to exclusive venue in New Jersey for litigation of disputes under the Asset 

Purchase Agreement dated September 3, 2009 by and between Cognizant Technology 

Solutions U.S. Corporation (“Cognizant”), Pepperweed Consulting, LLC (“Pepperweed”) 

and M Capital Ventures, LLC, Patrick B. Stewart and Raymond E. Ramey (the “APA”). 

(A true and correct copy of the APA is attached hereto as Exhibit A). 

9. Specifically, Paragraph 8.13 of the APA states that:

Each party (a) submits to the jurisdiction of any state or federal 

court sitting in New Jersey in any action or proceeding arising out 

of or relating to this Agreement or the Ancillary Agreements, (b) 

agrees that all claims in respect of such action or proceeding may 

be heard and determined in any such court, (c) waives any claim of 

inconvenient forum or other challenge to venue in such court, (d) 

agrees not to bring any action or proceeding arising out of or 

relating to this Agreement or the Ancillary Agreements in any 

other court and (e) waives any right it may have to a trial by jury 

with respect to any action or proceeding arising out of or relating 

to this Agreement or the Ancillary Agreements. Each party agrees 

to accept service of any summons, complaint or other initial 

pleading made in the manner provided for the giving of notices in 

Section 8.8; provided, that nothing in this Section 8.13 shall affect 

the right of any party to serve such summons, complaint or other 

initial pleading in any other manner permitted by Law. (Exhibit A, 

APA at ¶ 8.13). 

10. On September 3, 2009 the parties also entered into an Escrow Agreement 

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(the “Escrow Agreement”) and have, as part of the Escrow Agreement, agreed to 

exclusive venue in New Jersey for litigation of disputes. (A true and correct copy of the 

Escrow Agreement is attached hereto as Exhibit B). 

11. Specifically, Paragraph 18 of the Escrow Agreement provides that:

Each of the Parties hereby irrevocably and unconditionally

submits to the jurisdiction of any state court of the State of 

New Jersey and any federal court sitting in the State of 

New Jersey and irrevocably agrees that all actions or 

proceedings arising out of or related to this Agreement 

shall be litigated exclusively in such courts. Each of the 

Parties agrees not to commence any legal proceedings 

related hereto except in such courts. Each of the Parties 

hereby irrevocably waives any objection which he or it may 

now or hereafter have to the laying of venue of any such 

proceeding in any such court and hereby irrevocably 

waives and agrees not to plead or claim that any such 

action, suit or proceeding brought in any such court has 

been brought in an inconvenient forum. (Exhibit A, APA at 

¶ 18). 

FACTUAL BACKGROUND

The Asset Purchase Agreement

12. On September 3, 2009, Cognizant and Pepperweed entered into a series of 

agreements whereby Cognizant purchased the operations and substantially all of the 

assets of Pepperweed Advisors, a division of Pepperweed (the “Business”). 

13. On September 3, 2009, Cognizant, Pepperweed, M Capital Ventures, 

LLC, Patrick B. Stewart and Raymond E. Ramey (Stewart and Ramey are collectively 

referred to herein as the “Members”) entered into the APA that, inter alia:

“contemplate[d] a taxable transaction in which [Cognizant] 

[would] purchase the operations and substantially all of the 

related assets and assume certain specified liabilities of the 

Business (sometimes referred to as Pepperweed Advisors). 

(Exhibit A, APA). 

14. Pursuant to the terms of the APA and Escrow Agreement, Cognizant 

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delivered $450,000 (the “Escrow Funds”) to the escrow agent, Wells Fargo Bank, N.A.

(the “Escrow Agent”). 

15. One of the fundamental objectives of the APA, post-closing, was to 

acquire the operations of the Business while minimizing the disruption to the Business’ 

customers. Toward that end, certain Business related services previously provided by

Pepperweed to the customers, pre-closing, were to continue to be provided by Cognizant, 

post-closing and, thereafter invoiced by Pepperweed. 

16. In an effort to minimize the operational disruption to its new transitioned 

customers, Cognizant agreed Pepperwood would continue to send invoices to those 

customers for a short period of time while the transition was made.

17. For the same reason, Cognizant agreed that its transitioned customers 

would continue to make payments to Pepperweed even though those payments belonged 

to Cognizant.

18. All amounts received by Pepperweed from these customers for the 

services provided by Cognizant are referred to as “Accounts Receivable,” which was to 

be promptly forwarded to Cognizant. 

19. Section 5.10(c) of the APA specifically provides that:

to forward promptly to [Cognizant] any monies, checks or 

instruments received by the Seller with respect to any 

accounts receivable and prepaid amounts arising from the 

operation of the Business after the Closing Date; provided, 

however, if the Buyer becomes aware that any monies, 

checks or instruments have been received by the Seller and 

does not receive such monies, checks or instruments within 

45 days of when received by the Seller, the Buyer shall be 

entitled to be paid from any Escrow Amount pursuant to 

the terms of the Escrow Agreement. (Exhibit A, APA at ¶ 

5.10(c)). 

20. The APA further provides that, in the event of Pepperweed’s breach of its 

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contractual obligations under the APA, Cognizant would be entitled to an order of 

specific performance. (See Exhibit A, APA at ¶ 8.14.)

21. In particular, Section 8.14 of the APA states that:

Each party acknowledges and agrees that the other parties would 

be damaged irreparably in the event any of the provisions of this 

Agreement (including Sections 5.3, 5.4 and 5.5) are not performed 

in accordance with their specific terms or otherwise are breached. 

Accordingly, each party agrees that the other parties shall be 

entitled to an injunction or other equitable relief to prevent 

breaches of the provisions of this Agreement and to enforce 

specifically this Agreement and the terms and provisions hereof in 

any action instituted in any court of the United States or any state 

thereof having jurisdiction over the parties and the matter, in 

addition to any other remedy to which it may be entitled, at Law or 

in Equity. (Exhibit A, APA at ¶ 8.14). 

22. The APA is governed by the internal laws of the state of New Jersey. (See

Exhibit A, APA at ¶ 8.9.) 

The Escrow Agreement

23. On September 3, 2009, the Escrow Agent, Cognizant, Pepperweed, M 

Capital Ventures, LLC, and the Members entered into the Escrow Agreement which is 

attached to this Complaint as Exhibit B. 

24. Section 4(a) of the Escrow Agreement, provides that: 

If [Cognizant] becomes aware that any monies, checks or 

instruments have been received by [Pepperweed] with 

respect to any accounts receivable and prepaid amounts 

arising from the operation of the Business after the Closing 

Date (the “Accounts Receivable”) and such Accounts 

Receivable are not forwarded to [Cognizant] within fortyfive (45) days of the date such Accounts Receivable are 

received by [Pepperweed], [Cognizant] shall deliver to the 

Escrow Agent (with a copy to the Seller) a written 

instruction that on the date that is five (5) business days 

following receipt of such instruction (the “Payment Date”), 

the Escrow Agent shall promptly release from the Escrow 

Funds to [Cognizant’s] account specified in Exhibit B, 

immediately available funds in an amount equal to the 

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Accounts Receivable plus interest earned thereon from the 

date such Accounts Receivable were received by

[Pepperweed] through the date of payment (or, to the extent 

that the amount held in escrow on the Payment Date is less 

than the Accounts Receivable plus interest, the Escrow 

Agent shall release and deliver to or at the direction of 

[Cognizant] the full amount then held in escrow on such 

date). [Pepperweed] shall not have the right to dispute the 

release of the Accounts Receivable by the Escrow Agent.

(Exhibit B, Escrow Agreement at ¶ 4(a)). 

25. Under the terms of the Escrow Agreement, if Cognizant becomes aware of 

outstanding Accounts Receivable owed to it, Cognizant may “deliver to the Escrow 

Agent (with a copy to [Pepperweed]) a written instruction” to release the Escrow Funds 

within five (5) days from such notice. (Exhibit B, Escrow Agreement ¶ 4(a)). 

26. If Cognizant made such a demand, the Escrow Agreement provides that 

“[Pepperweed] shall not have the right to dispute the release of the Accounts 

Receivable by the Escrow Agent.” (Exhibit B, Escrow Agreement ¶ 4(a))[emphasis 

added]. 

27. The Escrow Agreement was executed in conjunction with the APA and 

other related transactional documents to ensure, among other things, that Cognizant 

would be compensated for the services it provided to the transitioned customers. 

28. The Escrow Agreement is governed by the laws of the State of New 

Jersey. (See Exhibit B, Escrow Agreement at ¶ 18). 

The Consent and Waiver Agreement

29. On September 3, 2009, Pepperweed and Ameriserv executed, and 

Cognizant approved, a Consent and Waiver Agreement. (A true and correct copy of the 

Consent and Waiver Agreement is attached hereto as Exhibit C.). 

30. The Consent and Waiver Agreement states, among other things, that 

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Ameriserv will not prevent Pepperwood from providing Cognizant with any of the funds 

Pepperwood received from its customers for services by Cognizant.

31. Specifically, the Consent and Waiver Agreement states that:

The Lender has received and reviewed a copy of the Purchase 

Agreement and the Escrow Agreement and, subject to receipt of 

the Closing Deliverables (as to which Lender acknowledges receipt 

of all but the Proceeds), hereby consents to the Transaction and 

waives compliance with respect to the Transaction by (i) the 

Borrowers with Article IV, Sections 1 and 6 of the Initial Loan 

Agreement, and (ii) Consulting with respect to the Business Loan 

Agreement, and (iii) any other provision of the Loan Agreements 

that prohibit or restrict [Pepperweed’s] transfer of the Acquired 

Assets to Buyer. (Exhibit C, Consent and Waiver). 

32. In consideration for the waiver provided for in the Consent and Waiver 

Agreement, Pepperweed granted Ameriserv, among other things:

[a]n assignment of the rights of [Pepperweed] under the 

Escrow Agreement (as defined in the [APA]) to receive the 

release of the Escrow Funds (as defined in the Escrow 

Agreement) less any Outstanding Claims (as defined in the 

[APA]) to which [Pepperweed] would otherwise be 

entitled upon the first anniversary of the date of the 

Escrow Agreement, and to otherwise exercise only all of 

the rights of [Pepperweed] under the Escrow Agreement, 

which assignment shall be acknowledged and agreed to by 

[Cognizant] and the Escrow Agent, with such assignment 

and acknowledgements to be in form and substance 

acceptable to [Ameriserv]. (Exhibit C, Consent and Waiver

[emphasis added]).

The Collateral Assignment Agreement

33. On September 3, 2009, pursuant to a Collateral Assignment Agreement 

(the “Assignment Agreement”) Pepperweed assigned to Ameriserv, as security for the

repayment of the Pepperweed/Ameriserv Loan:

all of its rights, title, in and to the Escrow Amount being 

held by the Escrow Agent under the Escrow Agreement to 

be released to [Ameriserv] less any Outstanding Claims (as 

defined in the Escrow Agreement) to which Assignor 

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would otherwise be entitled upon the first anniversary of 

the Escrow Agreement and any Outstanding Claims, if any, 

required to be released to the Assignor following the 

resolution of such claims in accordance with the provisions 

of Section 5 of the Escrow Agreement...(A true and correct 

copy of the Assignment Agreement is attached hereto as 

Exhibit D [emphasis added]).

34. As a result, pursuant to the Consent and Waiver Agreement and the 

Assignment Agreement, Ameriserv was granted the full interest in and the rights of 

Pepperweed in the Escrow Agreement, “upon the first anniversary of the Escrow 

Agreement.” (Exhibit C, Consent and Waiver; Exhibit D, Assignment Agreement)

The Accounts Receivable Owed To Cognizant

35. On June 2, 2010, Raymond E. Ramey, Pepperweed’s Chief Financial 

Officer, sent an e-mail to John Rorke of Cognizant detailing the amounts received by

Pepperweed and owed to Cognizant arising from the operation of the Business after the 

Closing Date (the “Ramey E-Mail”). (A true and correct copy of the Ramey E-Mail is 

attached hereto as Exhibit E.). 

36. The Ramey Email explains that through May 10, 2010, Pepperweed had

received $706,975.99 for services provided by Cognizant and that these funds belong to 

Cognizant. (Exhibit E, Ramey E-Mail). 

37. The $706,975.99 referenced in the Ramey E-Mail constitute Accounts 

Receivable as that term is defined in Section 5.10(c) of the APA and Section 4(a) of the 

Escrow Agreement. 

38. Despite Cognizant’s repeated demands, Pepperweed has refused to deliver 

or facilitate the delivery of the $706,975.99 to Cognizant as required under Section 

5.10(c) of the APA. 

39. To date, Cognizant has not received the $706,975.00 due as of May 10, 

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2010, nor, has Cognizant received the additional $37,239.60 in Accounts Receivable 

received by Pepperweed since May 10, 2010. 

The Accrued Compensation Entitlements Owed To Cognizant 

40. Upon the Closing Date as defined in the APA, certain Pepperweed 

employees that were providing services associated with the Business became Cognizant 

employees. These transferred employees are considered “Transferred Employees” under 

the APA. 

41. Section 2.18(g) of the APA provides that “Accrued Compensation 

Entitlements shall remain the obligation of [Pepperweed] in accordance with Section 

5.2(d) hereof.” (Exhibit A, APA at ¶ 2.18(g).)

42. Section 7.1 defines Accrued Compensation Entitlements as follows:

(i) the aggregate accrued and unpaid salary, bonus, 

commissions, expenses (including travel and entertainment 

expenses) and any other compensation entitlements of each 

of the Transferred Employees less (ii) any amount owed to 

the Seller by such Transferred Employee, as of the Closing 

Date and as more particularly described in the Employee 

List. (Exhibit A, APA at ¶ 7.1). 

43. Similarly, Section 5.2(d) states that “[Pepperweed] shall retain liability to 

the Transferred Employees for any Accrued Compensation Entitlements.” (Exhibit A, 

APA at ¶ 5.2(d)). 

44. Cognizant paid to the Transferred Employees the Accrued Compensation 

Entitlements as required under the APA in the amount of $49,628.15. 

45. As a result, Pepperweed is required to reimburse Cognizant $49,628.15 

representing the Accrued Compensation Entitlements advanced to the Transferred 

Employees on Pepperweed’s behalf. 

46. Therefore, as set forth in the Demand Notice, Pepperweed is obligated to 

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pay to Cognizant the Accrued Compensation Entitlement Payments in the amount of 

$49,628.15, pursuant to Section 5.2(d) and 2.18(g) of the APA.

47. Despite Cognizant’s repeated demands, Pepperweed has refused to 

reimburse Cognizant the $49,628.15 it paid to the Transferred Employees.

Cognizant’s Demand Notice To Release The Escrow Funds

48. On June 7, 2010, Cognizant sent a letter to the Escrow Agent demanding 

the release of $744,215.59 in Accounts Receivable that Cognizant’s customers paid to 

Pepperwood for services provided by Cognizant. (A true and correct copy of the Demand 

Notice is attached hereto as Exhibit F). 

49. The Demand Notice states, in pertinent part that, “[c]onsitent with the 

Transaction Agreements, and pursuant to Section 4(a) and (b) of the Escrow Agreement, 

Cognizant hereby demands that the escrow agent release funds owed pursuant to the 

Transaction Agreement.” (Exhibit F, Demand Notice). 

50. Further, the Demand Notice advised the Escrow Agent and Pepperweed 

that $49,628.15 was due in connection with the Accrued Compensation Entitlements. 

(Exhibit F, Demand Notice). 

51. With respect to the Accounts Receivable owed to Cognizant, the Demand 

Notice also advised the Escrow Agent that, “neither Pepperweed nor Ameriserv has any 

right to dispute the release of the Escrow Funds under Section 4(a) of the [APA].”

(Exhibit F, Demand Notice). 

52. The Demand Notice served as Cognizant’s written demand and instruction 

pursuant to Section 4(a) of the Escrow Agreement and Claim notice pursuant to Section 

4(b) of the Escrow Agreement, to distribute from the Escrow Funds, to Cognizant, the 

Accounts Receivable and Accrued Compensation Entitlements. (Exhibit F, Demand 

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Notice”). 

Defendants’ Objections To The Release of the Escrow Funds

53. On June 11, 2010, counsel for Ameriserv sent correspondence to the 

Escrow Agent, disputing the release of Escrow Funds as payment of the Accounts 

Receivable to Cognizant (the “Ameriserv Objection”). (A true and correct copy of the 

Ameriserv Objection is attached hereto as Exhibit G). 

54. The Ameriserv Objection contends, among other things that, Ameriserv 

has the right to object to the Demand Notice based upon the Assignment Agreement and 

that the Demand Notice failed “to allege that Pepperweed collected any accounts 

receivable arising from the operation of the Business after the Closing Date, let alone that 

Pepperweed collected such accounts receivable then failed to remit such collections 

within forty five days.” (Exhibit G, Ameriserv Objection). 

55. On that same date, June 11, 2010, counsel for Pepperweed sent 

correspondence to the Escrow Agent, disputing the release of Escrow Funds as payment 

of the Accounts Receivable to Cognizant (the “Pepperweed Objection”). (A true and 

correct copy of the Pepperweed Objection is attached hereto as Exhibit H). 

56. In its objection, Pepperweed admitted that the Accounts Receivable are 

owed to Cognizant but disputed that the remaining $726,647.49 demanded by Cognizant 

are in fact Accounts Receivable that are required to be released without giving 

Pepperweed the right to dispute under Section 4(a) of the Escrow Agreement. (Exhibit H, 

Pepperweed Objection).

Cognizant’s June 14th Demand To Release Escrow Funds

57. On June 14, 2010, Cognizant sent a second letter to the Escrow Agent,

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demanding that the Escrow Agent release the Escrow Funds to Cognizant (the “June 14th 

Demand”). (A true and correct copy of Cognizant’s June 14, 2010 Demand is attached 

hereto as Exhibit I.)

58. The June 14th Demand reiterated Cognizant’s position with respect to the 

Accounts Receivable and Accrued Compensation Entitlements and again notified the 

Escrow Agent that “neither Pepperweed nor Ameriserv has any right to dispute the 

release of the Escrow Funds under Section 4(a) of the Escrow Agreement.” (Exhibit I, 

June 14th Demand). 

The Escrow Agent Refuses To Distribute The Escrow Funds

59. On June 14, 2010, the Escrow Agent responded in writing to the Demand 

Notice and the Ameriserv and Pepperweed Objections by refusing to distribute the 

escrow funds to Cognizant until receipt of a “final non-appealable order of a court of 

competent jurisdiction or a final non-appealable arbitration decision directing delivery of 

the Escrow Funds, or written agreement executed by each of the Parties involved in such 

disagreement or dispute directing delivery of the Escrow Funds.” (The “Escrow Agent 

Response”) (A true and correct copy of the Escrow Agent Response is attached hereto as 

Exhibit J). 

60. The Escrow Agent took this position based upon Section 15 of the Escrow 

Agreement, which provides: 

If any conflict, disagreement or dispute arises between , 

among, or involving any of the Parties concerning the 

meaning or validity of any provision hereunder or 

concerning any other matter relating to this Agreement, or 

the Escrow Agent is in doubt as to the action to be taken 

hereunder, the Escrow Agent is authorized to retain the 

Escrow Funds until the Escrow Agent (i) receives a final 

non-appealable order of a court of competent jurisdiction or

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a final non-appealable arbitration decision directing 

delivery of the Escrow Funds, (ii) receives a written 

agreement executed by each of the parties involved in such 

disagreement or dispute directing delivery of the Escrow 

Funds, in which even the Escrow Agent shall be authorized 

to disburse the Escrow Funds in accordance with such final 

court order, arbitration decision, of agreement, or (iii) files 

an interpleader action in any court of competent 

jurisdiction, and upon the filing thereof, the Escrow Agent 

shall be relieved of all liability as to the Escrow Funds and 

shall be entitled to recover attorneys’ fees, expenses and 

other costs incurred in commencing and maintain any such 

interpleader action. The Escrow Agent shall be entitled to 

act on any such agreement, court order, or arbitration 

decision without further question, inquiry, or consent. 

(Exhibit B, Escrow Agreement at ¶ 15). 

61. Inasmuch Pepperweed has conceded that it has received at least 

$706,975.99 through May 10, 2010, arising from the operation of the Business after the 

Closing Date (Exhibit E, Ramey Email) and has failed to pay to Cognizant such amounts, 

the Demand Notice, pursuant to Section 4(a) of the Escrow Agreement, is valid.

62. Neither Pepperweed nor its assignees have any right to dispute the release 

of the Accounts Receivable by the Escrow Agent and thus the Defendants’ objections are 

improper. 

63. Moreover, Ameriserv is not entitled to enforce any right provided to 

Pepperwood under the Escrow Agreement until the first anniversary of the Escrow 

Agreement, which is September 3, 2010. (See Exhibit A, APA at ¶ 28).

64. Moreover, although the Assignment Agreement grants Ameriserv “the 

right to enforce all rights of [Pepperweed] under the [APA] and the Escrow Agreement,” 

Ameriserv is not entitled to enforce such right or require its consent to the distribution of 

the Escrow Funds until the first anniversary of the Escrow Agreement. (See Exhibit A, 

APA at ¶ 28).

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65. Similarly, Section 28(iv) of the Escrow Agreement provides that:

[Cognizant] and the Escrow Agent (iv) agree[] that no 

consent by [Pepperweed] to distribution of the Escrow 

Funds by the Escrow Agent following the first anniversary 

date hereof shall be effective unless accompanied by a

written consent of [Ameriserv]. (Exhibit B, Escrow 

Agreement at ¶ 28). 

66. Ameriserv has no authority to consent or object to the release of the 

Escrow Fund until the first anniversary of the Escrow Agreement, on September 3, 2010. 

67. Thus, the Ameriserv Objection -- dated June 11, 2010 -- is invalid on its 

face. 

68. The Acknowledgement, Consent and Agreement section of the 

Assignment Agreement, contains identical language to that set forth in Section 18 of the 

Escrow Agreement confirming Pepperweed and Ameriserv’s agreement. 

69. Specifically, the Acknowledgement, Consent and Agreement Section of 

the Assignment Agreement provides that:

no consent by the Assignor to distribution of amounts from the 

Escrow Proceeds by the Escrow Agent following the first 

anniversary of the Escrow Agreement shall be effective unless 

accompanied by a written consent of the Lender (Exhibit D, 

Assignment Agreement). 

70. The first anniversary of the Escrow Agreement is September 3, 2010. 

71. Thus, neither Pepperweed nor Ameriserv has any right to dispute the 

release of the Escrow Funds under Section 4(a) of the Escrow Agreement and their 

objections were designed to frustrate the clear intent of the APA and the Escrow 

Agreement.

72. As a result, Pepperweed has materially breached the APA and Escrow 

Agreement, Ameriserv has tortiously interfered with Cognizant’s contractual relationship 

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with Pepperweed under the APA and the Escrow Agreement, and Cognizant has suffered 

and continues to suffer substantial monetary damages. 

COUNT I – Declaratory Judgment (Pepperweed)

73. Cognizant repleads and incorporates by reference its allegations contained 

in Paragraphs 1-72 above as if fully set forth herein. 

74. Pursuant to the terms of the APA, Cognizant is entitled to payment of all 

Accounts Receivable under the APA for services rendered to customers post-closing for 

which Pepperweed, who did not perform any services post-closing, has received 

payment. 

75. As of June 7, 2010, the Accounts Receivable held by Pepperweed was 

$793,843.74. 

76. Pursuant to Sections 5.2(d) and 2.18(g) of the APA, Cognizant is also 

entitled to the Accrued Compensation Entitlements as defined in Section 7.1 of the APA. 

77. Despite Cognizant’s proper and timely demands to distribute the full 

amount of the Escrow Funds to Cognizant as partial payment of the outstanding Accounts 

Receivable and Accrued Compensation Entitlements, Pepperweed and Ameriserv have 

wrongfully objected to the disbursement of the Escrow Funds when they have no right to 

do so under the terms of the APA, Escrow Agreement, the Consent and Waiver or the 

Assignment Agreement. 

78. Pepperweed and Ameriserv’s conduct violates the express provisions of

the APA, the Escrow Agreement, the Consent and Waiver Agreement and the 

Assignment Agreement and, as a result, Cognizant has suffered and will continue to 

suffer monetary damages. 

79. Accordingly, there is an actual case or controversy between Cognizant, on 

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the one hand, and Pepperweed and Ameriserv, on the other, concerning whether 

Cognizant is entitled to the Escrow Funds as set forth in the Demand Notice. 

80. All necessary parties are before the Court so that it can grant declaratory 

relief. 

81. Therefore, Cognizant it entitled to declaratory relief under 28 U.S.C. §§ 

2201 and 2202. 

WHEREFORE, Cognizant respectfully requests that this Court enter an order 

against Pepperweed and Ameriserv:

(a) declaring that the $744,215.59 amount received by Pepperweed 

from customers for payment for service rendered by Cognizant and 

associated with the Business after the Closing Date, constitute 

Accounts Receivable as that term is used in the APA and Escrow 

Agreement; 

(b) declaring that Cognizant is entitled to payment of the Accounts 

Receivable and Accrued Compensation Entitlements (including the 

Escrow Funds) under Sections 5.10(c), 5.2(d) and 2.18(g) of 

the APA and Section 4(a) of the Escrow Agreement;

(c) declaring that neither Pepperweed nor Ameriserv is entitled, 

under the APA or Escrow Agreement, to object to the 

disbursement of the Escrow Funds to Cognizant as partial payment 

of Accounts Receivable owed to Cognizant; 

(d) directing the Escrow Agent to release to Cognizant the Escrow 

Funds in their entirety, including the interest accrued thereon, 

pursuant to Sections 4(a) and 15 of the Escrow Agreement; 

(e) declaring that the $49,628.15 paid by Cognizant to the 

Transferred Employees on behalf of Pepperweed constitutes 

Accrued Compensation Entitlements pursuant to Sections 5.2(d) 

and 2.18(g) of the APA;

(f) directing Pepperweed to pay to Cognizant $49,628.15

representing Accrued Compensation Entitlements under Sections 

5.2(d) and 2.18(g) of the APA; and 

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(g) awarding Cognizant its costs, expenses, attorneys’ fees, interest 

and such other and further relief as the Court deems just and 

proper.

COUNT II – Breach of Contract (Pepperweed)

82. Cognizant repleads and incorporates by reference its allegations contained 

in Paragraphs 1-81 above as if fully set forth herein. 

83. The APA and the Escrow Agreement are both valid and enforceable 

contractual agreements. 

84. Pursuant to the Section 5.10(c) of the APA, Pepperweed was required “to 

forward promptly to [Cognizant] any monies, checks or instruments received by the 

Seller with respect to any accounts receivable and prepaid amounts arising from the 

operation of the Business after the Closing Date.” 

85. Similarly, pursuant to Section 4(a) of the Escrow Agreement, Cognizant is 

entitled to payment of all Accounts Receivable under the APA for services rendered to 

customers after the Closing Date from whom Pepperweed has received payment. Section 

4(a) further provides that “[Pepperweed] shall not have the right to dispute the release 

of the Accounts Receivable by the Escrow Agent.” [emphasis added]

86. Further, pursuant to Sections 5.2(d) and 2.18(g) of the APA, Cognizant is 

entitled to the Accrued Compensation Entitlements as defined in Section 7.1 of the APA. 

87. Pepperweed has breached its contractual duties under the APA by failing 

“to forward promptly to [Cognizant] any monies, checks or instruments received by the 

Seller with respect to any accounts receivable and prepaid amounts arising from the 

operation of the Business after the Closing Date.” In fact, as of June 7, 2010, 

Pepperweed had retained at least $744,215.59 in monies received by customers for 

services provided by Cognizant arising from the operation of the Business after the 

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Closing Date. 

88. Pepperweed has also breached its contractual duties under the APA by

failing to reimburse Cognizant for the $49,628.15 in Accrued Compensation Entitlements 

as required under Sections 5.2(d) and 2.18(g) of the APA. 

89. Additionally, Pepperweed has breached its contractual duties under the 

Escrow Agreement by improperly objecting to the disbursement of the Escrow Funds 

when it has no right under the Escrow Agreement to do so. 

90. Pepperweed’s conduct constitutes a material breach of the APA and 

Escrow Agreement and, as a result, Cognizant has suffered and will continue to suffer 

damages. 

91. For its part, Cognizant has fully performed, as to all material terms, in 

connection with its contractual relationship with Pepperweed.

WHEREFORE, Cognizant respectfully requests that this Court enter an order 

against Pepperweed:

(a) for damages, in an amount to be determined at trial, suffered by 

Cognizant due to Pepperweed’s breach of contract; and

(b) awarding Cognizant its costs, expenses, attorneys’ fees, interest 

and such other and further relief as the Court deems just and 

proper.

COUNT III -Tortious Interference with Contract (Ameriserv)

92. Cognizant repleads and incorporates by reference its allegations contained 

in Paragraphs 1-91 above as if fully set forth herein. 

93. Cognizant and Pepperweed entered into two enforceable contracts, the 

APA and Escrow Agreement. 

94. Under those agreements Cognizant is entitled to payment of all Accounts 

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Receivable under the Escrow Agreement. 

95. The Escrow Agreement provides that “[Pepperweed] shall not have the 

right to dispute the release of the Accounts Receivable by the Escrow Agent.” (Exhibit B, 

Escrow Agreement at ¶ 4(c). 

96. Ameriserv, an assignee under both the APA and Escrow Agreement, is 

and was aware of Pepperweed’s contractual obligations under the APA, including its duty 

to pay to Cognizant all amounts received by Pepperweed from customers for service 

rendered by Cognizant and associated with the Business after the Closing Date. 

97. Ameriserv, as assignee under the Escrow Agreement, is and was aware of 

Pepperweed’s contractual obligations under the APA and Escrow Agreement, which 

provide that Cognizant is entitled to all Accounts Receivable. 

98. Ameriserv, an assignee under the Escrow Agreement, is and was aware of 

Pepperweed’s contractual obligations under the Escrow Agreement, which prohibits 

Pepperweed from disputing the release of the Escrow Funds by the Escrow Agent to 

satisfy the outstanding Accounts Receivable. 

99. The Ameriserv Objection, sent to the Escrow Agent disputing the release 

of the Escrow Funds to Cognizant, constitutes wrongful interference with the Escrow 

Agreement. 

100. Ameriserv’s conduct, as set forth above, was willful, wanton, and 

malicious and/or without due regard for the rights of Cognizant.

WHEREFORE, Cognizant respectfully requests that this Court enter an order 

against Ameriserv:

(a) for damages inflicted upon Cognizant due to Ameriserv’s 

willful, wanton, malicious conduct; and

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(b) awarding Cognizant its costs, expenses, attorneys’ fees, interest 

and such other and further relief as the Court deems just and 

proper. 

COUNT IV – Specific Performance Indemnification and Injunctive Relief

101. Cognizant repleads and incorporates by reference its allegations contained 

in Paragraphs 1-100 above as if fully set forth herein. 

102. Under Section 5.10(c) of the APA Pepperweed agreed to:

forward promptly to [Cognizant] any monies, checks or 

instruments received by the Seller with respect to any 

accounts receivable and prepaid amounts arising from the 

operation of the Business after the Closing Date; provided, 

however, if the Buyer becomes aware that any monies, 

checks or instruments have been received by the Seller and 

does not receive such monies, checks or instruments within 

45 days of when received by the Seller, the Buyer shall be 

entitled to be paid from any Escrow Amount pursuant to 

the terms of the Escrow Agreement. (Exhibit A, APA at ¶ 

5.10(c)). 

103. Under Section 5.10 of the Escrow Agreement, Cognizant is entitled to the 

release of the all of the Escrow Funds. 

104. The Escrow Agent has not released those funds to Cognizant only because 

of Pepperweed and Ameriserv’s wrongful and unjustified objections to the release. 

105. Pursuant to Section 8.14 of the APA, Cognizant is entitled to specific 

performance of Section 5.10 of the APA for the delivery of all amounts collected by 

Pepperweed that are owed to Cognizant as well as Section 4(a) of the Escrow Agreement 

for the release of the Escrow Funds. 

106. Pepperweed’s and Ameriserv’s conduct, as described above, has caused 

Cognizant irreparable injury, in that it has failed to receive significant funds due and

owing to it under the APA and Escrow Agreement and, unless enjoined, will continue to 

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cause irreparable injury to Cognizant including a loss of rights to the funds on the first 

anniversary date of the Escrow Agreement. 

107. Cognizant is entitled to injunctive relief against Pepperweed and 

Ameriserv to prevent them from obstructing or interfering with Cognizant’s rights to the 

Escrow Funds. 

108. Pepperweed’s and Ameriserv’s conduct, as set forth above, was willful, 

wanton, and malicious and/or without due regard for the rights of Cognizant.

109. No previous injunctive relief has been awarded with respect to this matter 

in this or any other case. 

WHEREFORE, Cognizant respectfully requests that this Court enter an order 

against Pepperweed and Ameriserv, jointly and severally:

(a) ordering an accounting of the Escrow Funds;

(b) requiring Pepperweed and Ameriserv to instruct the Escrow 

Agent to release to Cognizant all of the entire Escrow Funds 

together with any interest accrued;

(c) preliminarily and permanently enjoining Pepperweed and 

Ameriserv from interfering with Cognizant’s rights in and to the 

Escrow Funds in accordance with the APA and the Escrow 

Agreement; and

(d) awarding Cognizant its costs, expenses, attorneys’ fees, interest 

and such other and further relief as the Court deems just and 

proper. 

COUNT V-Indemnification (Pepperweed)

110. Cognizant repleads and incorporates by reference its allegations contained 

in Paragraphs 1-109 above as if fully set forth herein. 

111. Pursuant to Article 6.1(b) of the APA, Pepperweed is obligated to 

indemnify Cognizant for:

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any failure to perform or other breach of any covenant of 

agreement of the Seller or any Member contained in this 

Agreement, any Ancillary Agreement or any agreement 

furnished by the Seller or any Member to the Buyer 

pursuant to this Agreement, including, without limitation, 

any Damages arising from Seller’s failure to perform 

services pursuant to the Transition Agreement. (Exhibit A, 

APA at ¶ 6.1(b))

112. Under Section 5.10 of the Escrow Agreement, Cognizant is entitled to the 

release of the all of the Escrow Funds. 

113. The Escrow Agent has not released those funds to Cognizant only because 

of Pepperweed and Ameriserv’s wrongful and unjustified objections to the release. 

114. Cognizant is entitled to indemnification for Pepperweed’s failure to 

perform under the APA.

WHEREFORE, Cognizant respectfully requests that this Court enter an order 

against Pepperweed:

(a) requiring Pepperweed to indemnify Cognizant for the 

damages arising from Pepperweed’s to perform under the APA; 

and 

(b) awarding Cognizant its costs, expenses, attorneys’ fees, interest 

and such other and further relief as the Court deems just and 

proper. 

Dated: New York, New York

June 27, 2010

s/Michael D. Hynes

Michael D. Hynes(mh5086)

Carrie S. Parikh (cd5651)

michael.hynes@dlapiper.com

DLA Piper LLP (US)

1251 Avenue of the Americas

New York, New York 10020-1104

(212) 335-4500

Attorneys for Plaintiff

43056078.1

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LOCAL CIVIL RULE 11.2 CERTIFICATION

Plaintiff, Cognizant, Technology Solutions U.S. Corp. knows of no other 

arbitration or lawsuit involving this matter, nor is any, to Plaintiff’s knowledge 

contemplated and, Plaintiff knows of no other person that should be joined in this matter 

at this time. 

Dated: New York, New York

June 27, 2010

s/Michael D. Hynes

Michael D. Hynes(mh5086)

Carrie S. Parikh (cd5651)

michael.hynes@dlapiper.com

DLA Piper LLP (US)

1251 Avenue of the Americas

New York, New York 10020-1104

(212) 335-4500

Attorneys for Plaintiff

EAST\43056078.2

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