EXHIBIT 10.1
FORBEARANCE AND REINSTATEMENT
-----------------------------
OF NONCOMPETES
--------------
This Agreement is made and entered into as of this 2nd day of May , 2000,
by and between COTELLIGENT USA, INC., COTELLIGENT, INC., EW & ASSOCIATES, INC.,
XXXXXX X. XXXXXXX and XXXXXXX X. XXXXXX.
BACKGROUND INFORMATION
1. The parties to this Agreement are described as follows:
A. Cotelligent USA, Inc., whose address is 000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000, and whose Federal Employer Identification
No. is 00-0000000, is a California corporation and is the surviving corporation
by merger of Information Systems Resources, Inc., a Florida corporation,
formerly known as Cotell Florida Acquisition Corporation, and one or more
corporations. Cotelligent USA, Inc., is registered to do business in the State
of Florida.
B. Cotelligent, Inc., whose address is 000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000, and whose Federal Employer Identification
No. is 00-0000000, is a Delaware corporation formerly known as Cotelligent
Group, Inc.
C. Individually, Cotelligent USA, Inc., is referred to herein as
"Buyer." Individually Cotelligent, Inc., is referred to herein as "Guarantor."
D. Collectively, Cotelligent USA, Inc., and Cotelligent, Inc., are
referred to herein as "Debtors."
E. EW & Associates, Inc., is a Florida corporation. It was
formerly known as Information Systems Resources, Inc., but by change of name
became EW & Associates, Inc. It is referred to herein as "Creditor."
F. Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx are residents of
Tallahassee, Florida, and Destin, Florida, respectively. They are stockholders
in EW & Associates, Inc., and are referred to separately herein as "Stockholder
Xxxxxxx" and "Stockholder Xxxxxx." Collectively, Stockholder Xxxxxxx and
Stockholder Xxxxxx are referred to herein as "Stockholders."
2. Effective January 5, 1998, Buyer, Guarantor, Creditor, and Stockholders
entered into that certain Purchase and Sale of Assets Agreement (the "Purchase
Agreement"), a true and correct copy of which is attached to the Complaint
mentioned herein. The Purchase Agreement was amended by that certain Letter
Agreement dated April 15, 1999 (referred to as the "Amendment,") a true and
correct copy of which is attached to the Complaint mentioned herein. Unless
stated otherwise, the term Purchase Agreement shall include the Amendment.
3. Debtors have defaulted under the Purchase Agreement by failing to pay
the full Earnout Amount (as defined in the Purchase Agreement) in the sum of
$8,143,237.00, which sum has been due and owing since February 5, 2000, and has
been accruing interest from and after February 6, 2000, at the rate of twelve
percent (12%) per annum.
4. The failure of Debtors to pay the Earnout Amount within thirty (30)
days after receipt of written notice from Creditor that such payment was due
would cause the Noncompetition Agreement set forth in Section 7 of the Purchase
Agreement to terminate. Creditor timely sent the required notice which was
received and accepted by Debtors. Due to Debtors' default under the Purchase
Agreement, the Noncompetition Agreement of Creditor and Stockholders as set
forth in Section 7 of the Purchase Agreement automatically terminated on March
12, 2000.
5. Dated January 5, 1998, but effective January 1, 1998, Debtors and
Stockholder Xxxxxxx entered into an Employment Agreement ( the "Employment
Agreement"), a true and correct copy of which is attached to the Complaint
mentioned herein. Pursuant to Section 3(g) of the Employment Agreement ,
Stockholder Xxxxxxx' Noncompetition Agreement automatically terminated on March
12, 2000.
6. Debtors recognize and agree that it is a valuable right to Creditor and
Stockholders to be able to compete in the marketplace against Debtors. Creditor
and Stockholders recognize and agree that it is a valuable right to Debtors for
Creditor and Stockholder Xxxxxxx to not be able to compete in the marketplace
against Debtors.
7. Creditor and Stockholders notified Debtors that they were prepared to
file a lawsuit on February 6, 2000, for failure of the Debtors to pay the
Earnout Amount. Debtors requested that Creditor and Stockholders not file a
lawsuit as the same would be detrimental to the Debtors' business and financial
plans and relationships. Debtors proposed that they would give Creditor
consideration for its forbearance in this regard. Stockholder Xxxxxxx informed
Debtors that so long as substantial progress was being made to resolve all
issues, Creditor planned to forbear, as the ultimate goal for all concerned was
for Creditor to be paid in full. All parties recognized that Creditor was taking
substantial risks by not immediately filing a lawsuit on February 6, 2000, to
begin further protecting its interest.
8. Based upon Debtors' representations, Creditor and Stockholders did
forebear at and after February 6, 2000, and continued to honor their respective
Noncompetiton Agreements.
9. By the time the foregoing Noncompetition Agreements expired, Creditor
and Stockholders were quite concerned that Creditor would not be paid. Debtors
have continued to assure Creditor and Stockholders that Creditor would be paid.
Realizing that the Noncompetition Agreements had expired, Debtors informed
Creditor and
2
Stockholder Xxxxxxx that Debtors needed the Noncompetition Agreements to be
reinstated as provided herein.
10. Debtors have requested:
A. That Creditor continue to forebear from enforcing its rights
under the Purchase Agreement, including, but not necessarily limited to, the
right to bring suit and collect the monies now owed to it by Debtors; and
B. That Creditor and Stockholder Xxxxxxx reinstate the
Noncompetition Agreements.
11. Creditor and the Stockholders have agreed to the forbearance, and the
reinstatement of Creditor and Stockholder Xxxxxxx' Noncompetition Agreements,
but only on the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants and agreements set forth below, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties agree as follows:
1. Incorporation of Background Information. The Background Information
given above is true and correct and is incorporated in and made a part of this
Agreement. Debtors are estopped to deny the obligations and matters described
therein.
2. Forbearance. Under the terms set forth in this Agreement, Creditor
agrees to extend the due date for payment of the Earnout Amount until June 30,
2000. Provided that Debtors pay the Earnout Amount plus interest in full as
stated herein on or before June 30, 2000, and otherwise timely meet each and
every other obligation herein, Creditor agrees not to file suit, take any other
action, or pursue any other remedies against Debtors by reason of their failure
to timely pay the Earnout Amount. The consideration for Creditor's forbearance
from February 6, 2000, and its continuing forbearance is 50,000 shares of
Guarantor's common stock, which stock shall be issued as provided in Section 9.
3. Earnout Amount and Adjustments. The full Earnout Amount due (after
payment of interest as set forth in Section 5 below) is comprised of
$8,143,237.00 in principal, plus interest at the daily rate of $2,677.23,
through and including the date of payment, less any partial payments. Regardless
of any provisions to the contrary in the Purchase Agreement, there shall be no
further adjustments to the determination of the Earnout Amount. Interest shall
only be due through the date payment is received.
4. Noncompetition Agreements.
A. The Noncompetition Agreement of Creditor under the Purchase
Agreement is hereby reinstated until June 30, 2000. The Noncompetition Agreement
of Stockholder Xxxxxxx under the Purchase Agreement and the Employment Agreement
are
3
hereby reinstated until June 30, 2000. The Noncompetition Agreement of
Stockholder Xxxxxx under the Purchase Agreement and under any employment
agreement with Debtors, whether oral or otherwise, was automatically terminated
effective March 12, 2000, and is not being reinstated.
B. Provided that Debtors fully and faithfully perform each and
every obligation under this Agreement, the Noncompetition Agreement of Creditor
shall remain in full force and effect from and after July 1, 2000, through its
stated term as mentioned in the Purchase Agreement. In the event Debtors do not
fully and faithfully perform each and every obligation under this Agreement,
such reinstated Noncompetition Agreement shall automatically expire at 11:59
p.m., June 30, 2000.
C. Provided that Debtors fully and faithfully comply with each and
every provision of this Agreement, effective July 1, 2000, Stockholder Xxxxxxx
shall continue to be bound by the Noncompetition Agreement set forth in his
Employment Agreement. In the event Debtors do not fully and faithfully perform
each and every obligation under this Agreement, such Noncompetition Agreement of
the Employment Agreement shall automatically expire at 11:59 p.m., June 30,
2000.
D. The consideration to Creditor for honoring its Noncompetition
Agreement from and after February 6, 2000, and for the reinstatement of the same
as provided herein is 50,000 shares of Guarantor's stock, which stock shall be
issued as provided in Section 9.
E. The consideration to Stockholder Xxxxxxx for reinstating his
Noncompetition Agreements are the 50,000 Xxxxxxx Option Shares as defined in and
to be issued as provided in Section 9.
5. Partial Payment of Interest. The parties recognize, acknowledge and
agree that n April 20, 2000, Debtors initiated a wire transfer to Creditor in
the sum of $50,000.00 in partial payment of accrued interest.
6. Attorney's Fees. On or before June 30, 2000, Debtor shall pay to
Creditor and Stockholders the sum of $50,000 in full satisfaction of their
legal fees and costs in this transaction.
7. Covenant Against Acquisitions. Until such time as the Earnout Amount
has been paid in full to Creditor, and Debtors have otherwise met each and every
one of their obligations herein, neither Debtors nor any of their subsidiaries
or affiliates shall acquire all or substantially all of the equity securities or
interests (no matter how characterized) or assets of another corporation,
partnership, joint venture, or business entity (no matter how characterized)
whether by merger, consolidation, purchase, joint venture, pooling of interests,
exchange or other business combination. Notwithstanding the foregoing, Debtors
shall not be prohibited from engaging in acquisitions or other transactions
which result in Debtors paying in full their monetary obligations hereunder to
Creditor upon or within one (1) day following closing of such transactions.
4
8. Payment with First Dollars. Debtors have represented to Creditor and
Stockholders that Creditor shall be paid in full with the first available
dollars and such representation has been a material inducement to Creditor and
Stockholders entering into this Agreement. Regardless of the June 30, 2000
deadline, Debtors shall be obligated to pay Creditor with first available
dollars. Debtors shall not borrow any amounts of money on any line of credit or
obtain any further extensions of credit or obtain any further financial
accommodations (no matter how characterized), except to pay their operating
expenses or to pay their obligations under this Agreement, until Creditor has
been paid in full hereunder. Debtors further covenant and agree that they will
not accept any secondary sources of financing, or obtain funds from any
secondary investor, including the Shoreline Group, or cause a diversion of any
funds intended for the use and benefit of Debtors, whether directly or
indirectly, without first paying Creditor all obligations hereunder or ensuring
that such obligations are paid at or within one (1) day after closing of such
transaction.
9. Issuance of Shares; Options. In consideration of the forbearance and
other agreements of the Creditor and Stockholders herein, and for the
reinstatement of the Noncompetition Agreements, Debtors and Creditor agree as
follows:
A. On or before May 9, 2000, Guarantor (Cotelligent, Inc.) shall (i)
issue to Creditor, One Hundred Thousand (100,000) fully paid and
nonassessable shares of Cotelligent, Inc. common stock (the "Shares"), (ii)
issue to Creditor a stock certificate evidencing the Shares and confirming
that the Shares are fully paid and nonassessable, (iii) cause Guarantor's
transfer agent to record Creditor's ownership of the Shares in Guarantor's
stock ownership records, and (iv) issue to Stockholder Xxxxxxx an option
(the "Xxxxxxx Option") under the Cotelligent Group, Inc. 1998 Long Term
Incentive Plan (the "Incentive Plan"), substantially in the form of Exhibit
"A," to purchase Fifty Thousand (50,000) shares of Cotelligent, Inc. common
stock (the "Xxxxxxx Option Shares") at an exercise price equal to the
closing price of Cotelligent, Inc. common stock on the New York Stock
Exchange ("NYSE") on the trading date next preceding the date of this
Agreement. Guarantor and Creditor have entered into a Securities Issuance
Agreement simultaneously with the execution of this Agreement, setting
forth certain terms, conditions, and representations with respect to the
issuance of the Shares contemplated by this Agreement, which Securities
Issuance Agreement is incorporated in and made a part hereof.
B. Guarantor represents, warrants, and covenants to Creditor that (i)
there are, and upon the issuance of the Xxxxxxx Option there shall continue
to be, a sufficient number of shares available under the Incentive Plan to
provide for the issuance of the Xxxxxxx Option and (upon exercise thereof)
the Xxxxxxx Option Shares, (ii) the Xxxxxxx Option and Xxxxxxx Option
Shares shall be duly issued pursuant to the terms of the Incentive Plan,
(iii) all necessary corporate action has been taken to authorize the
issuance of the Xxxxxxx Option under the Incentive Plan, (iv) the Xxxxxxx
Option Shares have been registered with the Securities and
5
Exchange Commission ("SEC") under a registration statement on Form S-8
filed November 18, 1998 (the "S-8"), and (v) the S-8 is current and shall
remain current for a period of 90 days after the vesting of the last shares
to vest under the Xxxxxxx Option.
C. Within twenty (20) days after the date of execution of this
Agreement, Guarantor shall prepare and file with the SEC, and thereafter
diligently seek the effectiveness of, a registration statement under the
Securities Act of 1933 (the "Registration Statement") covering the Shares
until (i) 180 days following the effective date of the Registration
Statement (which period shall be tolled for any period during which a
"blackout," suspension of trading, or stop sale order is in effect with
respect to the Company's shares, or other event is in effect that, under
any applicable securities laws or underwriting agreement, precludes
Creditor's sale of the Shares), or (ii) such shorter period as may be
required to permit the public offering and sale of the Shares by Creditor
(the "Registration Statement Period"). Guarantor may register the Shares on
Form S-3, provided that at all times through the completion of Creditor's
offer and sale of the Share(but in no event longer than the Registration
Statement period), Guarantor is eligible to use Form S-3 and remains
current with all of its filings under the Securities and Exchange Act of
1934; otherwise, Guarantor shall register the Shares on Form S-1. In
addition, Guarantor shall:
(i) file with any federal or state or other governmental authority,
such other instruments and documents as shall be necessary to permit
Creditor to offer and sell the Shares and Stockholder Xxxxxxx to offer and
sell the Xxxxxxx Option Shares under applicable federal, state, or other
governmental laws, rules, or regulations ("Supplemental Filings");
(ii) keep Creditor informed as to the initiation and progress of all
proceedings in connection with the Registration Statement and Supplemental
Filings, including all SEC comments concerning the Registration Statement
and all responses to such comments, and advise Creditor promptly when the
Registration Statement is declared effective;
(iii) keep the Registration Statement and Supplemental Filings
effective during the Registration Statement Period until the offer and sale
of the Shares are completed, by such action as may be necessary or
appropriate, including, but not limited to, the filing of post-effective
amendments and supplements to the Registration Statement and Supplemental
Filings or to any prospectus that is a part thereof, necessary to keep the
Registration Statement and Supplemental Filings current, as applicable;
(iv) keep the S-8 and related Supplemental Filings effective until the
end of the period of 90 days after the vesting of the last shares to vest
under the Xxxxxxx Option, by such action as may be necessary or
appropriate, including, but not limited to, the filing of post-effective
amendments and supplements to the
6
S-8 and such Supplemental Filings or to any prospectus that is a part
thereof, necessary to keep the S-8 and such Supplemental Filings current,
as applicable;
(v) furnish to Creditor and Stockholder Xxxxxxx such number of
prospectuses, offering circulars, and other documents incident to the
Registration Statement, S-8, or Supplemental Filings as Creditor or
Stockholder Xxxxxxx from time to time reasonably requests, and file with
each securities exchange on which any of Guarantor's common stock is traded
such number of prospectuses, offering circulars, and other documents as may
be required;
(vi) upon the effectiveness of the Registration Statement, issue
such instructions to Guarantor's transfer agent, as are necessary to remove
any restrictive legend that may appear on the stock certificates evidencing
the Shares, to remove any stop-transfer instructions that may appear with
respect to the Shares in Guarantor's stock transfer records, and otherwise
to facilitate the sale and transfer of the Shares by Creditor;
(vii) remain current in all of Guarantor's filings under the
Securities Exchange Act of 1934 at all times during the Registration
Statement Period; and
(vii) bear all costs and expenses incident to the foregoing. The
term, "costs and expenses," as used herein, includes (but is not limited
to): registration and filing fees; fees and disbursements of counsel to
Guarantor; the expenses of printing the Registration Xxxxxxxxx, X-0, and
all necessary copies of the prospectus contained therein; all Blue Sky fees
and expenses applicable in states in which Creditor or Stockholder Xxxxxxx
may offer and sell the Shares or Xxxxxxx Option Shares; the cost of any
audits or special audits incident to or required by or in connection with a
Registration Statement, S-8, or Supplemental Filings and all costs and
expenses incident to the filing of any post-effective amendment or
amendments to the Registration Xxxxxxxxx, X-0, or supplements to
Supplemental Filings required by this Agreement. Such costs and expenses
shall include the cost of premiums for insurance for the benefit of
Guarantor with respect to any liability it may have under the Securities
Act of 1933 or as a result of this Agreement in connection with the
Registration Statement, S-8, or any Supplemental Filings, but shall not
include any selling expenses incurred by Creditor or Stockholder Xxxxxxx or
any expenses of counsel or other advisors retained by them.
D. Guarantor shall indemnify Creditor, each of its officers and
directors, each of the Stockholders, and each underwriter (as defined in
the Securities Act of 1933) of the Shares, and each person, if any, who
controls (within the meaning of the Securities Act of 1933) Creditor or any
underwriter, against all claims, losses, damages, and liabilities (or
actions with respect thereto) arising out of or based on any untrue
statement of a material fact contained in the Registration Statement, S-
7
8, or any Supplemental Filing and any amendments or supplements thereto or
prospectus, offering circular, or other document related thereto or any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation
by Guarantor of any law, rule, or regulation applicable to Guarantor and
relating to action or inaction required by Guarantor in connection with the
Registration Statement, S-8, or any Supplemental Filing or related
prospectus, offering circular, or other document. Guarantor shall reimburse
Creditor, its directors and officers, each Stockholder, each underwriter,
and each person, if any, who controls Creditor or any such underwriter for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or
action. Notwithstanding the foregoing, Guarantor will not be liable under
this subsection to the extent that any such claim, loss, damage, or
liability of any such person arises out of or is based on any untrue
statement of a material fact contained in, or any material fact omitted
from, information furnished in writing to Guarantor by Creditor expressly
for use therein.
E. On the date of execution of this Agreement, and as a condition
precedent to the obligations of Creditor and the Stockholders under this
Agreement, Guarantor shall deliver to Creditor and Stockholder Xxxxxxx one
or more opinions of Guarantor's counsel that is experienced in corporate
and federal securities law matters substantially to the following effect
(such opinion or opinions to be in form and substance reasonably
satisfactory to Creditor):
(i) Each of Debtors is duly incorporated, validly existing, and in
good standing under the laws of their respective states of incorporation,
with the corporate power and authority to enter into the transactions and
perform the obligations contemplated by this Agreement.
(ii) The execution, delivery, and performance of this Agreement, the
Share Issuance Agreement, and the Xxxxxxx Option by each of Debtors have
been duly authorized by all necessary corporate action, and this Agreement,
the Share Issuance Agreement, and the Xxxxxxx Option have been duly
executed and delivered on behalf of Debtors.
(iii) This Agreement, the Share Issuance Agreement, and the Xxxxxxx
Option each constitutes the valid and binding agreement of Debtors,
enforceable against Debtors in accordance with its terms.
(iv) Guarantor is eligible to register its common stock, including
the Shares, on a registration statement on Form S-3. Upon the effectiveness
of the Registration Statement (as defined in this Agreement), Creditor may
offer and sell the Shares, free of any restrictions under the Securities
Act of 1933.
(v) The Xxxxxxx Option Shares are issuable under the Incentive Plan
and are registered under the S-8. Upon exercise of the Xxxxxxx Option,
8
Stockholder Xxxxxxx may sell the Xxxxxxx Option Shares free of any
restrictions under the Securities Act of 1933.
(vi) The execution and delivery of this Agreement, the Securities
Issuance Agreement, and the Xxxxxxx Option do not, and the consummation of
the transactions contemplated by this Agreement, the Securities Issuance
Agreement, and the Xxxxxxx Option will not, (a) violate the Certificate of
Incorporation or bylaws of Debtors or any law or regulation of the United
States or the States of Florida or New York applicable to Debtors, or (b)
result in a breach of, or constitute a default under, any judgment, decree
or order binding on Debtors or any of their properties, or any material
indenture, mortgage, contract or other instrument known to Debtor's counsel
to which Debtors are a party.
10. Debtors' Other Representations and Warranties. In addition to any
other representations and warranties herein, Debtors represent and warrant to
Creditor and the Stockholders as of the date of this Agreement that:
A. There are no defenses, offsets, claims or counterclaims against
Creditor or the Stockholders under the Purchase Agreement or Stockholder
Xxxxxxx' Employment Agreement, or any other agreement, oral or otherwise,
arising out of the foregoing;
B. There are no defaults by the Creditor or Stockholders under the
Purchase Agreement and specifically as to Stockholder Xxxxxxx, under his
Employment Agreement, or any other agreement, oral or otherwise, arising out of
the foregoing;
C. Debtors shall not collaterally attack the Final Judgment mentioned
below and contemplated by this Agreement, if such Final Judgment is rendered;
D. Debtors shall not appeal the Final Judgment mentioned below if
such Final Judgment is rendered, and to this extent, Debtors waive any and all
rights to appeal the same; and
E. Debtors shall not contest the domestication of any judgment
rendered as contemplated herein, in any state.
11. Release. Debtors, Creditor and Stockholders, unconditionally and
irrevocably release and forever discharge each other and their respective
successors, assigns, agents, directors, officers and employees from any and all
possible claims, demands, actions, costs, expenses, and liabilities whatsoever,
known or unknown, at law or in equity (the foregoing collectively referred to as
the "Claims"), originating in whole or in part on or before the date of this
Agreement, which any of them or any of their respective officers, agents, or
employees may now have or hereafter have against each other and irrespective of
whether any such Claims arise out of contract, tort, violation of laws or
regulations, or otherwise in connection with the Purchase Agreement and
Stockholder Xxxxxxx' Employment Agreement, or any other agreement, oral or
otherwise, arising out of the foregoing. The foregoing releases shall not apply
to the
9
obligations of the respective parties hereunder, as set forth or incorporated
herein, or otherwise referred to herein.
12. Consent to Judgment. Counsel for Creditor and the Stockholders has
prepared a civil complaint (the "Complaint") for filing in the Circuit Court in
and for Xxxx County, Florida, a signed copy of which is attached hereto and
incorporated herein. The Complaint seeks a monetary judgment against Debtors
for the unpaid Earnout Amount and interest, a declaration that the Creditor's
Noncompetition Agreement has been terminated, a declaration that the
Stockholders' Noncompetition Agreement under the Purchase Agreement has been
terminated, and a declaration that Stockholder Xxxxxxx' Noncompetition Agreement
under his Employment Agreement has been terminated, together with costs and
reasonable attorney's fees. As provided above, Creditor and Stockholders have
agreed to forbear and not file the Complaint or any other actions arising out of
the transactions described therein unless Debtors fail to pay all obligations
hereunder on or before June 30, 2000, or otherwise fail to meet any and all of
their obligations herein. As a material inducement to Creditor and
Stockholders to forbear, the Debtors have prepared and executed a Verified
Answer and Stipulation and Consent to Final Judgment, the originals of which
have been placed in escrow with Xxxxxx X. Xxxxxxxxx, counsel for Creditor and
the Stockholders. Signed copies of the Verified Answer and Stipulation and
Consent to Final Judgment are attached hereto and incorporated herein, together
with any exhibits mentioned therein.
It shall be Debtors' obligation to ensure that each and every payment made
by them is received by Creditor on or before the deadline date. In the event
Debtors fail to pay all obligations herein on or before June 30, 2000, or
otherwise fail to comply with each and every term of this Agreement, time being
of the essence, then Creditor and the Stockholders (in addition to and not in
limitation of any other remedies available to them) shall be entitled to take
the following action without further notice or hearing or consent to or from
Debtors, their agents, attorneys, or other legal representatives:
A. The Complaint may be filed in the Circuit Court in and for Xxxx
County, Florida.
B. The Verified Answer being held by Attorney Xxxxxxxxx in escrow
shall automatically be released from escrow and Attorney Xxxxxxxxx shall be
authorized to file the Verified Answer in the Circuit Court of the Second
Judicial Circuit.
C. The Stipulation and Consent to Final Judgment held by Attorney
Xxxxxxxxx in escrow shall automatically be released from escrow and Attorney
Xxxxxxxxx shall be authorized to file the Stipulation and Consent to Final
Judgment in the Circuit Court of the Second Judicial Circuit.
D. Creditor and the Stockholders or any one or more of them, shall
have the right to file an Affidavit with the Court stating the amount then due
from Debtors and thereupon, Creditor and the Stockholders shall be entitled to
receive final judgment in accordance with the form of the Final Judgment being
attached to the Stipulation and
10
Consent to Final Judgment, all without further notice or hearing to the Debtors
or any one of them or their counsel. The form of the Final Judgment is hereby
approved in full by Debtors. The parties hereby contract that the rate of
interest on any monetary judgment obtained shall be eighteen percent (18%) per
annum.
E. Regardless of any provision herein to the contrary, nothing
herein, including but not limited to, the rendition of the above Final Judgment,
shall preclude Creditor and Stockholders, or any one of them from bringing a
separate action for breach of this Agreement for obligations not covered by such
Final Judgment, the intent being that there shall be no merger.
13. Maximum Rate of Interest. Nothing herein contained, nor in any
instrument or transaction related hereto, shall be construed or so operate as to
require the Debtors, to pay interest in an amount or at a rate greater than the
highest rate permissible under applicable law. Should any interest or other
charges or other consideration paid by the Debtors result in the computation or
earning or payment of interest in excess of the highest rate permissible under
applicable law, then any and all such excess shall be and the same is hereby
waived by the holder hereof, shall be automatically credited against and reduce
the balance of principal, and any portion of said excess which exceeds the
principal balance shall be paid by the holder hereof to the Debtors, it being
the intent of the parties hereto that under no circumstances shall the Debtors,
be required to pay interest in excess of the highest rate permissible under
applicable law. It is not the intention of the parties to violate the usury
laws in any manner or fashion.
14. Waiver of Defenses. Debtors hereby waive any and all defenses they
may have or may hereafter have to the Complaint, whether legal or equitable,
substantive or procedural, excepting solely the defense of actual payment of all
obligations hereunder on or before June 30, 2000.
15. Amendment. Except as otherwise provided in this Agreement, the
parties may amend, modify, or supplement this Agreement at any time, but only in
writing duly executed by each of the parties.
16. Entire Agreement. This Agreement contains the entire agreement of the
parties hereto, both written and oral, and shall not be amended, altered or
otherwise modified except in writing signed by the parties hereto. The Exhibits
attached to this Agreement are made a part of this Agreement. All
representations and warranties contained in this Agreement shall survive the
closing of the transactions contemplated hereby.
17. Headings. The headings preceding the text of sections of this
Agreement are for convenience only and shall not be deemed a part hereof.
18. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida as applied to
transactions between Florida residents occurring entirely within the State of
Florida. In any litigation
11
arising out of or in connection with this Agreement or the transactions
contemplated hereby, venue shall lie exclusively in the Circuit Court of the
Second Judicial Circuit of Xxxx County, Florida, and the prevailing party shall
be entitled to recover its reasonable attorneys' fees, costs, and expenses.
Further, if Final Judgment is entered the judgment creditors shall be entitled
to recover any and all reasonable attorney's fees in enforcing, domesticating,
and collecting upon such Final Judgment. Debtors hereby consent to the
jurisdiction of the Circuit Court in and for the Second Judicial Circuit of Xxxx
County, Florida.
19. Successors and Assigns. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto. There are no
intended third party beneficiaries of this Agreement.
20. Further Assurances. If at any time any further action by any of the
parties is necessary or desirable to carry out the purpose of this Agreement,
such party shall take all such necessary or desirable action or cause such
action to be taken.
21. Notices. Any notice required or permitted to be given hereunder
shall be in writing and deemed given when personally delivered, one day
following dispatch by nationally recognized overnight express delivery service,
or on the date signed for as received if sent by registered or certified U.S.
Mail. Any notice shall be sent to the addresses set forth below or to such
other address as any party shall have previously designated by such a notice.
If to Cotelligent, Inc., or Cotelligent, Inc.
Cotelligent USA, Inc. Cotelligent USA, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxxx X. Xxxx
Copy to: XxXxx & Xxxxxxx, P.A.
0000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxxx
If to EW & Associates, Inc.: EW & Associates, Inc.
0000 Xxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
If to Xxxxxxx: Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxx Xxxxx
00
Xxxxx 000
Xxxxxxxxxxx, XX 00000
If to Xxxxxx: Xxxxxxx X. Xxxxxx
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
If to EW, Xxxxxxx or Xxxxxx
Then a Copy to: Xxxxx, Xxxxxxxxx & Xxxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxxx
22. Time. Time is of the essence in the performance of all obligations
under this Agreement.
23. Gender. The terms herein shall be deemed to include both the singular
and plural where appropriate, and where the masculine gender is used, it shall
include masculine, feminine or neuter, where appropriate.
24. Severability. If any provision or any part thereof contained in this
Agreement is in conflict with any statute or rule of law, then such provision or
part thereof shall be deemed null and void to the extent that it may be in
conflict therewith, but without invalidating the remaining provisions of this
Agreement.
25. Counterparts. This Agreement may be signed in counterpart, and all
such counterparts, taken together, constitute the entire Agreement.
Furthermore, any party hereto may sign any such counterpart. Each party shall
be entitled to conclusively rely for all purposes upon an executed copy hereof
received by facsimile.
26. Original Agreement. The original of this Agreement shall be retained
by Creditor, the Stockholders or their counsel. This Agreement or a copy
thereof, may be introduced into evidence without further notice or hearing to
Debtors in any court proceeding, including, but not necessarily limited to, the
court proceeding contemplated by the possible filing of the Complaint as
mentioned above.
27. WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY IN ANY ACTION BROUGHT ON THIS AGREEMENT OR IN ANY TRANSACTION OR
CIRCUMSTANCE ARISING IN CONNECTION HEREWITH.
28. Approval by Guarantor's Board of Directors. This Agreement is
conditioned upon its approval by Guarantor's Board of Directors on or before May
9, 2000. If such approval is not timely received, then this Agreement shall be
null and void and Attorney Xxxxxxxxx shall return the Verified Answer to Debtor
and Creditor shall
13
retain all funds received which it may apply against sums owed by Debtor, and
receipt of such payments shall not be deemed a waiver of Debtors' default.
29. Form of Payment; Wire Instructions. Each and every payment to be made
to Creditor or Stockholders hereunder shall be made by wire transfer pursuant
to the following wire instructions
Wire to:
-------
Premier Bank, Tallahassee, Florida
ABA # 000000000
For Credit To: Acct. No. 210158511
Name of: EW & Associates, Inc.
Payment shall not be deemed received until it has been credited to
Creditor's account pursuant to the above wire instructions.
30. Remedies Cumulative. All rights, remedies, undertakings, obligations,
options, covenants, conditions and agreements contained in this Agreement or
provided by law shall be deemed cumulative and no one of them shall be exclusive
of any other right. A party may pursue any one or more of his rights, options
or remedies hereunder or may seek damages or specific performance in the event
of any other party's breach hereunder, or may pursue any other remedy by law or
equity, whether or not stated in this Agreement.
14
IN WITNESS WHEREOF, the parties, each acting by and through the undersigned
duly authorized officer, have entered into this Agreement as of the date first
written above.
COTELLIGENT USA, INC.
By: /s/ Xxxxxxxx X. Xxxx
________________________
Print Name: Xxxxxxxx X. Xxxx
Title: Vice President, General Counsel &
Secretary
COTELLIGENT, INC.
By: /s/ Xxxxxxxx X. Xxxx
____________________________
Print Name: Xxxxxxxx X. Xxxx
Title: Vice President, General Counsel &
Secretary
EW & ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
________________________
Print Name: Xxxxxx X. Xxxxxxx
Title: President
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx
_________________________________
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
_________________________________
15
