Exhibit 10.2
EXECUTION COPY
STOCK PURCHASE AGREEMENT
between
OAK FINANCE INVESTMENTS LIMITED
(a British Virgin Islands company)
and
XXXXXX XXXXXX
Relating To The Purchase Of 1,024,697 Shares Of The Stock Of Common Stock of
THE A CONSULTING TEAM, INC.
(a New York corporation)
Dated as of
January 21, 2005
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS AND USAGE......................................................................2
Section 1.1 Definitions.......................................................................2
Section 1.2 Other Defined Terms...............................................................7
Section 1.3 Usage.............................................................................7
ARTICLE 2 SALE AND TRANSFER OF COMPANY STOCK.........................................................8
Section 2.1 Sale of Company Stock.............................................................8
Section 2.2 Purchase Price....................................................................8
Section 2.3 Closing...........................................................................9
Section 2.4 Closing Obligations...............................................................9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER..................................................10
Section 3.1 Organization and Good Standing...................................................10
Section 3.2 No Conflict; No Consent..........................................................10
Section 3.3 Books and Records................................................................10
Section 3.4 Capitalization...................................................................11
Section 3.5 Financial Statements.............................................................11
Section 3.6 SEC Reports......................................................................12
Section 3.7 No Material Adverse Change.......................................................12
Section 3.8 Absence of Certain Changes or Events.............................................12
Section 3.9 Legal Proceedings; Orders........................................................13
Section 3.10 Brokers or Finders...............................................................14
Section 3.11 Disclosure.......................................................................14
ARTICLE 4 ADDITIONAL REPRESENTATIONS OF SELLER......................................................14
Section 4.1 Title to Company Stock; No Agreements............................................14
Section 4.2 Enforceability; Authority; No Conflict; No Consent...............................14
Section 4.3 SEC Reports by Seller............................................................15
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER...................................................15
Section 5.1 Organization and Good Standing...................................................15
Section 5.2 Enforceability; Authority; No Conflict...........................................15
Section 5.3 Brokers or Finders...............................................................16
Section 5.4 Disclosure.......................................................................16
ARTICLE 6 COVENANTS OF SELLER PRIOR TO CLOSING DATE.................................................16
Section 6.1 Access and Investigation.........................................................16
Section 6.2 Required Approvals...............................................................16
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TABLE OF CONTENTS
(continued)
PAGE
Section 6.3 Business Operations of the Acquired Companies....................................17
Section 6.4 Negative Covenant................................................................17
Section 6.5 Notification.....................................................................17
Section 6.6 Payment of Indebtedness by Related Persons.......................................18
Section 6.7 Conversion of Series A Preferred Stock...........................................18
Section 6.8 Reasonable Best Efforts..........................................................18
ARTICLE 7 COVENANTS OF BUYER PRIOR TO CLOSING DATE..................................................18
Section 7.1 Approvals of Governmental Bodies.................................................18
Section 7.2 Reasonable Best Efforts..........................................................18
ARTICLE 8 ADDITIONAL COVENANTS......................................................................18
Section 8.1 Public Announcements.............................................................18
Section 8.2 Confidentiality..................................................................18
ARTICLE 9 CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.......................................19
Section 9.1 Accuracy of Representations......................................................19
Section 9.2 Seller's Performance.............................................................19
Section 9.3 Consents.........................................................................19
Section 9.4 Additional Documents.............................................................19
Section 9.5 No Proceedings...................................................................20
Section 9.6 No Claim Regarding Stock Ownership or Sale Proceeds..............................20
Section 9.7 No Material Adverse Change.......................................................20
Section 9.8 Consummation of Other Transactions...............................................20
ARTICLE 10 CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE......................................20
Section 10.1 Accuracy of Representations......................................................20
Section 10.2 Buyer's Performance..............................................................20
Section 10.3 Consents.........................................................................21
Section 10.4 Additional Documents.............................................................21
Section 10.5 No Injunction....................................................................21
ARTICLE 11 INDEMNIFICATION; REMEDIES.................................................................21
Section 11.1 Survival; Right To Indemnification Not Affected By Knowledge.....................21
Section 11.2 Indemnification And Payment of Damages By Seller.................................21
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TABLE OF CONTENTS
(continued)
PAGE
Section 11.3 Indemnification And Payment Of Damages By Buyer..................................22
Section 11.4 Time Limitations.................................................................22
Section 11.5 Procedure For Indemnification-Third Party Claims.................................22
ARTICLE 12 TERMINATION...............................................................................24
Section 12.1 Termination Events...............................................................24
Section 12.2 Effect of Termination............................................................24
Section 12.3 Extension; Waiver................................................................25
ARTICLE 13 MISCELLANEOUS PROVISIONS..................................................................25
Section 13.1 Expenses.........................................................................25
Section 13.2 Notices..........................................................................25
Section 13.3 Entire Agreement; Modifications..................................................26
Section 13.4 Governing Law....................................................................26
Section 13.5 Assignment; Successors; No Third Party Rights....................................27
Section 13.6 Severability.....................................................................27
Section 13.7 No Waiver........................................................................27
Section 13.8 Jurisdiction; Service of Process.................................................27
Section 13.9 Further Assurances...............................................................27
Section 13.10 Counterparts.....................................................................27
Section 13.11 Signatures.......................................................................28
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is made as of January
21, 2005 between among Oak Finance Investments Limited, a company organized
under the laws of the British Virgin Islands ("Buyer") and Xxxxxx XxxXxx, an
individual resident in the State of New York ("Seller") executing this Agreement
on his own behalf and in the capacities specified at the end of this Agreement.
THE RECITALS
A. Seller is a shareholder of Cicada, Inc. (the "Company") and
is the beneficial owner of 1,024,698 shares of common stock of the Company (the
"Common Stock") par value $0.01 per share;
B. Seller desires to sell, and Buyer desires to purchase,
1,020,947 of the shares of the Common Stock owned by Seller (the "Company
Stock") pursuant to the terms and conditions of this Agreement and to
concurrently purchase 3,750 of the shares of the Common Stock that are owned by
Seller's spouse, such 1,024,697 representing all issued and outstanding shares
of the Company Stock that are owned or controlled by Seller or his spouse;
C. Simultaneously herewith Buyer has entered into a Stock
Purchase Agreement, dated the date hereof (the "Company Stock Purchase
Agreement"), with the Company pursuant to which Buyer has agreed to purchase and
the Company has agreed to sell the number of shares of Common Stock specified
therein;
D. Simultaneously herewith the Company has entered into a
Share Exchange Agreement, dated the date hereof (the "Company Share Exchange
Agreement"), with the shareholders of Vanguard Info-Solution Corporation, a New
Jersey corporation formerly known as B2B Solutions, Inc. ("Vanguard"), pursuant
to which the Company will issue 7,312,796 shares of the Common Stock to the
stockholders of Vanguard in exchange for 100% of the issued and outstanding
shares of capital stock of all classes of Vanguard;
E. Simultaneously herewith Seller has entered into an
agreement with Buyer, dated the date hereof (the "Principal Shareholder's
Agreement"), pursuant to which Seller has agreed to vote the shares of Common
Stock that he owns in favor of the transactions contemplated by the Company
Stock Purchase Agreement and the Company Share Exchange Agreement and to refrain
from taking certain actions regarding other potential transactions involving the
Company;
F. The Company's Board of Directors has approved the
transactions contemplated by each of this Agreement, the Company Share Exchange
Agreement and the Company Stock Purchase Agreement and has agreed to recommend
to its shareholders that they approve the transactions contemplated by the
Company Stock Purchase Agreement and the Company Share Exchange Agreement; and
G. The approval of the shareholders of the Company is
necessary to consummate the transactions contemplated by the Company Share
Exchange Agreement and the Company Stock Purchase Agreement.
THE AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS AND USAGE
Section 1.1 Definitions. For purposes of this Agreement, the following
terms have the respective meanings set forth below:
"Acquired Companies" means the Company and its Subsidiaries,
collectively; individually, each an "Acquired Company."
"Agreement" means this Stock Purchase Agreement, as amended
from time to time pursuant to the terms hereof.
"Applicable Contract" means any Contract, except those which
have expired in accordance with their terms, (i) filed as an exhibit to
(a) the SEC Reports or (b) any registration statements of the Company
pursuant to the Securities Act, or (ii) that involves payments or
expenditures by or to any of the Acquired Companies that have an
aggregate value of at least $300,000.
"Business Day" means any day except Saturday, Sunday or any
other day on which commercial banks located in New York, New York are
authorized by law to be closed for business.
"Code" means the Internal Revenue Code of 1986.
"Commission" means the U.S. Securities and Exchange
Commission.
"Consent" means any approval, consent, ratification, waiver or
other authorization.
"Contemplated Transactions" means all of the transactions
contemplated by this Agreement and by the other Seller's Closing
Documents.
"Contract" means any agreement, contract, obligation, promise
or undertaking that is legally binding.
"Disclosure Schedule" means a schedule delivered by one party
to the other party concurrently with the execution and delivery of this
Agreement, setting forth certain disclosure information arranged in
numbered Items each of which corresponds to a section of this Agreement
and provides (1) additional disclosure in response to an express
disclosure requirement in such section or (2) an exception or
qualification to a representation or warranty contained in such
section.
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"Employee Plan" means, with respect to an employer, all
"employee benefit plans" as defined by Section 3(3) of ERISA, all
specified fringe benefit plans as defined in Section 6039D of the Code,
and all other bonus, incentive compensation, deferred compensation,
profit sharing, stock option, stock appreciation right, stock bonus,
stock purchase, employee stock ownership, savings, severance, change in
control, supplemental unemployment, layoff, salary continuation,
retirement, pension, health, life insurance, disability, accident,
group insurance, vacation, holiday, sick leave, fringe benefit or
welfare plan, and any other employee compensation or benefit plan,
agreement, policy, practice, commitment, contract or understanding
(whether qualified or nonqualified, currently effective or terminated,
written or unwritten) and any trust, escrow or other agreement related
thereto that (i) is maintained or contributed to by any such employer
or any ERISA Affiliate or has been maintained or contributed to in the
last six (6) years by any such employer or any ERISA Affiliate, or with
respect to which any such employer or any ERISA Affiliate has or may
have any liability, and (ii) provides benefits, or describes policies
or procedures applicable to any current or former director, officer,
employee or service provider of any such employer or any ERISA
Affiliate, or the dependents of any thereof, regardless of how (or
whether) liabilities for the provision of benefits are accrued or
assets are acquired or dedicated with respect to the funding thereof.
"Encumbrance" means any charge, claim, community or other
marital property interest, condition, equitable interest, lien, option,
pledge, security interest, mortgage, right of way, easement,
encroachment, servitude, right of first option, right of first refusal
or similar restriction, including any restriction on use, voting (in
the case of security or equity interests), transfer, receipt of income
or exercise of any other attribute of ownership.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA Affiliate" means, with respect to an employer, any
other corporation or trade or business controlled by, controlling or
under common control with such employer (within the meaning of Section
414, Section 4001(a)(14) or Section 4001(b) of ERISA).
"Exchange Act" means the Securities Exchange Act of 1934.
"GAAP" means United States generally accepted accounting
principles applied on a consistent basis.
"Governmental Authorization" means any Consent, license,
registration or permit issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
"Governmental Body" means any (i) nation, state, county, city,
town, borough, village, district or other jurisdiction; (ii) federal,
state, local, municipal, foreign or other government; (iii)
governmental or quasi -governmental authority of any nature (including
any self-regulatory organization, agency, branch, department, board,
commission, court, tribunal or other entity exercising governmental or
quasi -governmental powers); (iv) multinational organization or body;
(v) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power; or (vi) any official of any of the
foregoing.
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"IOT" means International Object Technology, Inc., a New
Jersey corporation.
"IRS" means the United States Internal Revenue Service and, to
the extent relevant, the United States Department of the Treasury.
"Item" means, with respect to a party, a section of that
party's Disclosure Schedule.
"Knowledge" means, with respect to a particular fact or other
matter:
(i) in the case of Seller or any other individual,
either that Seller or other individual is actually aware of
that fact or matter, or a prudent individual could be expected
to discover or otherwise become aware of that fact or matter
in the course of conducting a reasonably comprehensive
investigation regarding the accuracy of any representation or
warranty contained in this Agreement,
(ii) in the case of a Person (other than an
individual), any individual who is serving, or who has at any
time served, as a director, officer, executor or trustee of
that Person (or in any similar capacity) has, or at any time
had, Knowledge of that fact or other matter (as set forth in
clause (i) above), and
(iii) any such individual (referred to in clause (ii)
above) and any individual party to this Agreement will be
deemed to have conducted a reasonably comprehensive
investigation regarding the accuracy of any representation or
warranty made herein by that Person or individual.
"Legal Requirement" means any federal, state, local,
municipal, foreign, international, multinational or other constitution,
law, ordinance, principle of common law, code, regulation, rule, Order,
Governmental Authorization, statute or treaty, including any rule or
regulation of the NASDAQ Small Cap Market and further including the
Xxxxxxxx-Xxxxx Act of 2002.
"Liability" means, with respect to any Person, any liability
or obligation of such Person of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or unaccrued,
disputed or undisputed, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise, and whether or not
the same is required to be accrued on the financial statements of such
Person.
"Lien" means, with respect to any asset, any deed of trust
mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of that asset.
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"Material Adverse Effect" means any material adverse change in
the business, operations, properties, prospects, results of operations
or condition (financial or otherwise).
"Order" means any order, injunction, judgment, decree, ruling,
assessment or arbitration award of any Governmental Body, arbitrator or
NASDAQ, Inc. (including without limitation any notice or letter
threatening or warning of possible delisting of the Cicada Common
Stock).
"Ordinary Course of Business" means, with respect to any
action, the action taken by a Person only if that action:
(i) is consistent in nature, scope and magnitude with
the past practices of such Person and is taken in the ordinary
course of the normal, day-to-day operations of such Person;
(ii) does not require authorization by the board of
directors or stockholders of such Person (or by any Person or
group of Persons exercising similar authority) and does not
require any other separate or special authorization of any
nature; and
(iii) is similar in nature, scope and magnitude to
actions customarily taken, without any separate or special
authorization, in the ordinary course of the normal,
day-to-day operations of other Persons that are in the same
line of business as such Person.
"Organization" means any entity, including a corporation
(either non-profit or other), partnership (either limited or general),
joint venture, limited liability company, trust, estate or other
unincorporated association, whether or not a legal entity.
"Organizational Documents" means the articles or certificate
of incorporation and the bylaws of a corporation and any amendment to
any of the foregoing.
"Person" means an individual or an Organization.
"Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal,
whether public or private) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"Related Person" means:
(a) with respect to a particular individual,
(i) each other member of such individual's Family;
(ii) any Person that is directly or indirectly
controlled by any one or more members of such
individual's Family; (iii) any Person in which
members of such individual's Family hold
(individually or in the aggregate) a Material
Interest; and (iv) any Person with respect to which
one or more members of such individual's Family
serves as a director, officer, partner, executor or
trustee (or in a similar capacity); and
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(b) with respect to a specified Person other
than an individual, (i) any Person that directly or
indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under
common control with such specified Person; (ii) any
Person that holds a Material Interest in such
specified Person; (iii) each Person that serves as a
director, officer, partner, executor or trustee of
such specified Person (or in a similar capacity);
(iv) any Person in which such specified Person holds
a Material Interest; and (v) any Person with respect
to which such specified Person serves as a general
partner or a trustee (or in a similar capacity).
For purposes of this definition:
(i) "control" (including
"controlling," "controlled by," and "under
common control with") means the possession,
direct or indirect, of the power to direct
or cause the direction of the management and
policies of a Person, whether through the
ownership of voting securities, by contract
or otherwise, and shall be construed as such
term is used in the rules promulgated under
the Securities Act;
(ii) the "Family" of an individual
includes (i) the individual, (ii) the
individual's spouse, (iii) any other natural
person who is related to the individual or
the individual's spouse within the second
degree and (iv) any other natural person who
resides with such individual; and
(iii) "Material Interest" means
direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange
Act) of voting securities or other voting
interests representing at least ten percent
(10%) of the outstanding voting power of a
Person or equity securities or other equity
interests representing at least ten percent
(10%) of the outstanding equity securities
or equity interests in a Person.
"Representative" means, with respect to a Person, any
director, officer, manager, employee, agent, consultant, advisor,
accountant, financial advisor, legal counsel or other representative of
that Person.
"SEC Reports" means all forms, reports, schedules, statements
and other documents, and amendments thereto, required to be filed by
the Company under the Exchange Act.
"Securities Act" means the Securities Act of 1933.
"Subsidiary" means, IOT and any other subsidiary of the
Company.
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"Third Party" means a Person who is not a party to this
Agreement.
"Third-Party Claim" means a claim against an Indemnified
Person by a Third Party, whether or involving a Proceeding.
Section 1.2 Other Defined Terms. For purposes of this Agreement, the
following terms have the respective meanings set forth in the section and at the
page referred to opposite each such term:
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Defined Term Section Page
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Agreement Heading 1
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Balance Sheet Section 3.5 11
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Buyer Heading 1
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Buyer's Advisors Section 6.1 16
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Buyer's Closing Documents Section 5.2(a) 15
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Buyer Indemnified Persons Section 11.2 21
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Closing Section 2.3 9
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Closing Date Section 2.3 9
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Company Recitals 1
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Company Share Exchange Agreement Recitals 1
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Company Stock Recitals 1
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Company Stock Purchase Agreement Recitals 1
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Damages Section 11.2 22
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Employment Agreement Amendment Section 2.4(a)(iv) 9
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Indemnified Person Section 11.5(a) 22
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Indemnifying Person Section 11.5(a) 22
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Interim Balance Sheet Section 3.5 11
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Principal Shareholder's Agreement Recitals 1
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Purchase Price Section 2.2 8
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Seller Heading 1
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Seller's Closing Documents Section 4.2(a) 14
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Section 1.3 Usage.
(a) Interpretation. In this Agreement, unless a clear contrary
intention appears:
(i) a reference herein to days shall mean calendar days
unless otherwise specified. Any day or deadline or end of a
time period hereunder which falls on a day other than a
Business Day shall be deemed to refer to the first Business
Day following such day or deadline or end of the time period,
as the case may be;
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(ii) a reference in this Agreement to an article, section,
exhibit or schedule shall mean an article or section of, or
exhibit or schedule attached to, this Agreement, as the case
may be. Article and section headings in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement;
(iii) a reference to any Legal Requirement means such
Legal Requirement as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to
time, including rules and regulations promulgated thereunder,
and reference to any section or other provision of any Legal
Requirement means that provision of such Legal Requirement
from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or
reenactment of such section or other provision;
(iv) the word "including" means without limitation; the
word "or" is not exclusive and is used in the inclusive sense
of "and/or"; and the words "herein", "hereof", "hereby",
"hereto" and "hereunder" refer to this Agreement as a whole;
(v) a reference to document, instrument or agreement shall
be deemed to refer as well to all addenda, exhibits, schedules
or amendments thereto; and
(vi) all words used in this Agreement will be construed to
be of such gender or number as the circumstances require.
(b) Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted
and all accounting determinations hereunder shall be made in accordance
with GAAP.
(c) Legal Representation of the Parties. This Agreement was
negotiated by the parties with the benefit of legal representation, and
any rule of construction or interpretation otherwise requiring this
Agreement to be construed or interpreted against a party shall not
apply to any construction or interpretation hereof.
ARTICLE 2
SALE AND TRANSFER OF COMPANY STOCK
Section 2.1 Sale of Company Stock. Subject to the terms and conditions
of this Agreement, at the Closing Seller will sell and transfer the Company
Stock to Buyer and Xxxxx XxxXxx will deliver the 3,750 shares to Buyer, and
Buyer will purchase the Company Stock from Seller.
Section 2.2 Purchase Price. The purchase price (the "Purchase Price")
for the aggregate of the Company Stock and the 3,750 shares to be delivered by
Xxxxx XxxXxx will be $10,503,144.25, or $10.25 per share; provided, that if the
Company fails to pay a dividend on the Common Stock of $0.75 per share on or
prior to the Closing Date, then the price per share due hereunder shall be
increased by the amount of the difference between $0.75 and the amount of the
dividend actually paid on or prior to the Closing Date, such that if no dividend
is paid on or prior to the Closing Date, the price per share shall be $11.00 and
the Purchase Price for the aggregate of the Company Stock and the 3,750 shares
to be delivered by Xxxxx XxxXxx will be $11,271,667.00.
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Section 2.3 Closing. The purchase and sale (the "Closing") provided for
in this Agreement will take place (a) at the offices of McGuireWoods LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, at 10:00 a.m. (local
time) on the later of (i) July 31, 2005 and (ii) the third Business Day
following the date on which the last of the conditions set forth in ARTICLE 9
and ARTICLE 10 have been satisfied or waived by the party entitled to waive the
same, or (b) at such other time, place and date (if any) to which the parties
may mutually agree (the "Closing Date").
Section 2.4 Closing Obligations. At the Closing:
(a) Seller will deliver to Buyer:
(i) certificates representing the Company Stock, duly
endorsed (or accompanied by duly executed stock powers), with
signature guaranteed by a commercial bank or trust company or
by a member firm of a national securities exchange, in proper
form for transfer to Buyer with all required stock transfer
stamps affixed or provided for;
(ii) certificates representing the 3,750 shares of the
Common Stock owned of record by Xxxxx XxxXxx;
(iii) a certificate executed by Seller representing and
warranting to Buyer that Seller's representations and
warranties in this Agreement were accurate in all material
respects as of the date of this Agreement and is accurate in
all material respects as of the Closing Date as if made on the
Closing Date (giving full effect to any supplements to the
Disclosure Schedule that were delivered by Seller to Buyer
prior to the Closing Date in accordance with Section 6.5); and
(iv) an amendment to the Seller's existing employment
agreement in the form of Exhibit 2.4(a)(iv), executed by
Seller (the "Employment Agreement Amendment").
(b) Buyer will deliver to Seller:
(i) the Purchase Price in immediately available funds by
wire transfer of $10,503,144.25 (or such other amount as may
be due under Section 2.2) to one or more bank accounts
specified in writing by Seller not less than three Business
Days prior to the Closing;
(ii) a certificate executed by Buyer to the effect that,
except as otherwise stated in such certificate, each of
Buyer's representations and warranties in this Agreement was
accurate in all material respects as of the date of this
Agreement and is accurate in all respects as of the Closing
Date as if made on the Closing Date; and
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(iii) the Employment Agreement Amendment executed by the
Company.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
Section 3.1 Organization and Good Standing. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York, has the corporate power and authority to conduct its
business as it is now being conducted and to own or use the properties and
assets that it purports to own or use. IOT is a corporation duly organized,
validly existing and in good standing under the laws of the State of New Jersey,
has the corporate power and authority to conduct its business as it is now being
conducted and to own or use the properties and assets that it purports to own or
use. Each of the Acquired Companies is duly qualified to do business and is in
good standing in each jurisdiction in which the failure to qualify would have a
Material Adverse Effect on the Acquired Companies, taken as a whole.
Section 3.2 No Conflict; No Consent.
(a) Except as set forth in Item 3.2 of the Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions
will conflict with, or result in any violation of, or default under
(with or without notice or lapse of time) or give rise to a right of
termination, cancellation or acceleration of any material obligation or
loss of any material benefit under (i) any provision of the
Organizational Documents of the Acquired Companies, or (ii) any
Applicable Contract, Governmental Authorization or Legal Requirement
applicable to any of the Acquired Companies or any of its properties or
assets.
(b) No Consent of any Governmental Body is required by or with
respect to the Acquired Companies in connection with the execution and
delivery of this Agreement or the consummation or performance of any of
the Contemplated Transactions, except (i) for Consents, approvals,
orders, authorizations, registrations, declarations and filings as may
be required under federal and applicable state securities laws, (ii)
any filings under the HSR Act and (iii) such other Consents,
authorizations, filings, approvals and registrations which, if not
obtained or made, would not have a Material Adverse Effect on the
Acquired Companies, taken as a whole and would not prevent, or
materially alter or delay any of the Contemplated Transactions.
Section 3.3 Books and Records. The books of account, minute books,
stock record books and other records of the Company, all of which have been made
available to Buyer, are complete and correct in all material respects and have
been maintained in accordance with sound business practices and the requirements
of Section 13(b)(2) of the Exchange Act. The minute books of the Company contain
accurate and complete records of all meetings held of, and corporate action
taken by, the stockholders, the boards of directors and committees of the board
of directors of the Company, and no meeting of any such stockholders, board of
directors or committee has been held for which minutes have not been prepared
and are not contained in such minute books. At the Closing, all of those books
and records will be in the possession of the Company.
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Section 3.4 Capitalization.
(a) The authorized capital stock of the Company consists of
2,000,000 shares of Preferred Stock, par value $0.01 per share, of
which 571,615 shares are issued and outstanding, and 30,000,000 shares
of common stock, par value $0.01 per share, of which 2,109,530 shares
are issued outstanding as of September 30, 2004. All of the outstanding
equity securities and other securities of each Acquired Company (other
than the Company) are owned of record and beneficially by the Company,
free and clear of all Encumbrances. No legend or other reference to any
purported Encumbrance appears on any certificate representing equity
securities of any Acquired Company.
(b) All of the outstanding equity securities of each Acquired
Company have been duly authorized and validly issued and are fully paid
and nonassessable. Except as set forth in the SEC Reports, there are no
options, warrants or other Contracts relating to the issuance, sale, or
transfer of any equity securities or other securities of any Acquired
Company. None of the outstanding equity securities or other securities
of any Acquired Company was issued in violation of the Securities Act
or applicable state securities laws.
(c) No Acquired Company owns, or has any right or Contract to
acquire, any equity securities or other securities of any Person (other
than Acquired Companies) or any direct or indirect equity or ownership
interest in any other business.
(d) The Common Stock is listed for trading on the NASDAQ Small
Cap Market, to Seller's knowledge, the Company and the Common Stock
meet the criteria for continued listing on the NASDAQ Small Cap Market
(without giving effect to the transactions contemplated by the Company
Stock Purchase Agreement or the Company Share Exchange Agreement) and,
to Seller's knowledge, no delisting or suspension of trading of the
Common Stock has been threatened or is in effect.
Section 3.5 Financial Statements. Seller has delivered to Buyer: (a) an
audited consolidated balance sheet of the Company as at December 31, 2003
(including the notes thereto, the "Balance Sheet"), and the related consolidated
statements of income, changes in stockholders' equity, and cash flow for the
fiscal year then ended, together with the report thereon of Xxxxx Xxxxxxxx LLP,
independent certified public accountants, (b) audited consolidated balance
sheets of the Company as at December 31, in each of the years 2002 and 2001, and
the related consolidated statements of income, changes in stockholders' equity,
and cash flow for each of the fiscal years then ended, together with the report
thereon of Xxxxx Xxxxxxxx LLP and Ernst & Young, LLP, independent certified
public accountants, and (c) an unaudited consolidated balance sheet of the
Company as at September 30, 2004 (the "Interim Balance Sheet") and the related
unaudited consolidated statements of income, changes in stockholders' equity,
and cash flow for the nine months then ended. Such financial statements fairly
present the consolidated financial condition and operating results of the
Acquired Companies as at the respective dates of and or the periods referred to
in such financial statements, subject, in the case of unaudited statements, to
normal, recurring year-end audit adjustments. The financial statements referred
to in this Section 3.5 have been prepared in accordance with GAAP, except as may
be indicated in the notes thereto or, in the case of unaudited statements
included in Quarterly Reports on Form 10-Q, as permitted by Form 10-Q of the
Commission.
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Section 3.6 SEC Reports. Since January 1, 2001, the Company has timely
filed all SEC Reports required to be filed by it under the Exchange Act and any
other reports or documents required to be filed with the Commission. To Seller's
knowledge, at the time of filing, mailing, or delivery thereof, none of such
documents or information contained or will contain an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading, except to the extent corrected by
subsequently filed documents or information.
Section 3.7 No Material Adverse Change. Except as set forth in Item 3.8
of the Disclosure Schedule or in the SEC Reports, since the date of the Interim
Balance Sheet, there has not been any material adverse change in the business,
operations, properties, prospects, results of operations or condition (financial
or otherwise) of any Acquired Company, and no event has occurred or circumstance
exists that may result in such a material adverse change.
Section 3.8 Absence of Certain Changes or Events. Except as set forth
in Item 3.8 of the Disclosure Schedule or in the SEC Reports, since the date of
the Interim Balance Sheet, the Acquired Companies have conducted their
businesses only in the Ordinary Course of Business and to Seller's knowledge
there has not been any:
(a) material change in any Acquired Company's issued capital
stock; grant of any stock option or right to purchase shares of capital
stock of any Acquired Company; issuance of any security convertible
into such capital stock; grant of any registration rights; purchase,
redemption, retirement, or other acquisition by any Acquired Company of
any shares of any such capital stock; or declaration of payment of any
dividend or other distribution or payment in respect of shares of
capital stock;
(b) amendment to the Organizational Documents of any Acquired
Company;
(c) payment or increase by any Acquired Company of any
bonuses, salaries, or other compensation to Seller or any other
stockholder, director, officer, or employee (other than payment of
bonuses, salaries or other compensation in the ordinary course) or
entry into any employment, severance, or similar Contract with Seller
or any other director, officer, or employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or
with any employees of any Acquired Company;
(e) damage to or destruction or loss of any asset or property
of any Acquired Company, whether or not covered by insurance,
materially and adversely affecting the properties, assets, business,
financial condition, or prospects of the Acquired Companies, taken as a
whole;
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(f) entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement, or (ii)
any Contract or transaction involving a total remaining commitment by
or to any Acquired Company of at least $300,000;
(g) sale (other than sales of inventory in the Ordinary Course
of Business), lease, or other disposition of any material asset or
property of any Acquired Company or mortgage, pledge, or imposition of
any lien or other encumbrance on any material asset or property of any
Acquired Company, including the sale, lease, or other disposition of
any of the Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a
value to any Acquired Company in excess of $300,000;
(i) except as required by GAAP, a revaluation of any of the
assets or material change in the accounting methods, principles or
practices used by any Acquired Company; or
(j) agreement, whether oral or written, by any Acquired
Company to do any of the foregoing.
Section 3.9 Legal Proceedings; Orders.
(a) Except as set forth in Item 3.9(a) of the Disclosure
Schedule or in the SEC Reports, (i) there is no pending or, to Seller's
knowledge, threatened Proceeding, that has been commenced by or against
any Acquired Company or that otherwise relates to or may affect the
business of, or any of the assets owned or used by, any Acquired
Company that individually or in the aggregate, could have a Material
Adverse Effect on the Acquired Companies, taken as a whole; or (ii)
that may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions. To
Seller's knowledge, no event has occurred or circumstance exists that
is reasonably likely to give rise to or serve as a basis for the
commencement of any such Proceeding. Seller has delivered to Buyer
copies of all pleadings, correspondence, and other documents relating
to each Proceeding listed in Item 3.9(a) of the Disclosure Schedule.
(b) Except as set forth in Item 3.9(b) of the Disclosure
Schedule or in the SEC Reports, (i) there is no Order to which any of
the Acquired Companies, or any of the assets owned or used by any
Acquired Company, is subject; (ii) Seller is not subject to any Order
that relates to the business of, or any of the assets owned or used by,
any Acquired Company; and (iii) to Seller's knowledge, no officer,
director, agent, or employee of any Acquired Company (other than
Seller) is subject to any Order that prohibits such officer, director,
agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of any Acquired Company.
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Section 3.10 Brokers or Finders. Neither Seller nor any agent of Seller
has incurred any liability or obligation for brokerage or finders' fees or
agents' commissions or other similar payments in connection with this Agreement
or the Contemplated Transactions.
Section 3.11 Disclosure. No representation or warranty or other
statement made by Seller in this Agreement, the Disclosure Schedule, any
supplement to the Disclosure Schedule, the certificates delivered pursuant to
Section 2.4(a) or otherwise in connection with the Contemplated Transactions
contains any untrue statement or omits to state a material fact necessary to
make any of them, in light of the circumstances in which it was made, not
misleading. The Seller has no Knowledge of any fact that has specific
application to the Acquired Companies (other than general economic or industry
conditions) and that may materially adversely affect the assets, business,
prospects, financial condition or results of operations of any Acquired Company
that has not been set forth in this Agreement or the Disclosure Letter.
ARTICLE 4
ADDITIONAL REPRESENTATIONS OF SELLER
The Seller further represents and warrants to Buyer as follows:
Section 4.1 Title to Company Stock; No Agreements. Seller owns of
record or beneficially all of the issued and outstanding shares of Company Stock
free and clear of any Encumbrance, and upon delivery of and payment for the
Company Stock as provided in this Agreement, Buyer will acquire good and valid
title thereto, free of any Encumbrance. Except as set forth in Item 4.1 to the
Disclosure Schedules, Seller is not a party to any agreement, understanding or
arrangement relating to the Company Stock other than this Agreement.
Section 4.2 Enforceability; Authority; No Conflict; No Consent.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against him in accordance with its
terms, except that such enforceability may be limited by bankruptcy or
other similar laws affecting or relating to creditors' rights
generally, and is subject to general principles of equity. Upon the
execution and delivery by Seller of each of the documents referred to
in Section 2.4(a) (collectively, the "Seller's Closing Documents"),
each of Seller's Closing Documents will constitute the legal, valid,
and binding obligations of Seller, enforceable against him in
accordance with its terms, except that such enforceability may be
limited by bankruptcy or other similar laws affecting or relating to
creditors' rights generally, and is subject to general principles of
equity. Seller has the full right, power, authority, and capacity to
execute and deliver this Agreement and Seller's Closing Documents to
which it is a party and to perform its obligations hereunder and
thereunder.
(b) Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of time):
(i) Breach or give any Governmental Body or other Person
the right to challenge any of the Contemplated Transactions or
to exercise any remedy or obtain any relief under any Legal
Requirement or any Order to which Seller may be subject;
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(ii) contravene, conflict with, or result in a violation
of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any Governmental Authorization
that is held by Seller;
(iii) cause Buyer or any Acquired Company to become
subject to, or to become liable for the payment of, any Tax;
or
(iv) result in the imposition or creation of any
Encumbrance upon or with respect to the Company Stock.
(c) Seller is not, and will not be, required to give any
notice to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
Section 4.3 SEC Reports by Seller. Since January 1, 2001, Seller has
timely filed all SEC Reports required to the filed by him under the Exchange Act
and any other reports or documents required to be filed with the Commission. At
the time of filing, mailing, or delivery thereof, none of such documents or
information contained or will contain an untrue statement of a material fact or
omit to state a material necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 5.1 Organization and Good Standing. Buyer is a company duly
organized, validly existing and in good standing under the laws of the British
Virgin Islands, with full corporate power and authority to conduct its business
as it is now being conducted, to own and use the properties and assets that it
purports to own or use, and is duly qualified to do business and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to qualify would not have a material adverse effect on its business or
properties.
Section 5.2 Enforceability; Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms. Upon the execution and delivery by Buyer of each of the
documents referred to in Section 2.4(a) (collectively, the "Buyer's
Closing Documents"), each of Buyer's Closing Documents will constitute
the legal, valid, and binding obligations of Buyer, enforceable against
Buyer in accordance with its terms. Buyer has the absolute and
unrestricted right, power, authority, and capacity to execute and
deliver this Agreement and Buyer's Closing Documents and to perform its
obligations hereunder and thereunder.
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(b) Neither the execution and delivery of this Agreement by
Buyer nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent, delay
or otherwise interfere with any of the Contemplated Transactions
pursuant to (i) any provision of Buyer's Organizational Documents; (ii)
any resolution adopted by the board of directors or stockholders of
Buyer; (iii) any Legal Requirement or any Order to which Buyer may be
subject: or (iv) any Contract to which Buyer is a party or by which
Buyer may be bound.
(c) Buyer is not and will not be required to give any notice
to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
Section 5.3 Brokers or Finders. Neither Buyer nor any agent of Buyer
has incurred any liability or obligation for brokerage or finders' fees or
agents' commissions or other similar payments in connection with this Agreement
or the Contemplated Transactions.
Section 5.4 Disclosure. No representation or warranty or other
statement made by Buyer in this Agreement, the certificates delivered pursuant
to Section 2.4(b) or otherwise in connection with the Contemplated Transactions
contains any untrue statement or omits to state a material fact necessary to
make any of them, in light of the circumstances in which it was made, not
misleading.
ARTICLE 6
COVENANTS OF SELLER PRIOR TO CLOSING DATE
Section 6.1 Access and Investigation. Between the date of this
Agreement and the Closing Date and upon reasonable advance notice received from
Buyer, Seller will use his reasonable best efforts to cause each Acquired
Company and its Representatives to, (a) afford Buyer and its Representatives and
their Representatives (collectively, "Buyer's Advisors") reasonable access
during normal business hours to each Acquired Company's personnel, properties,
Contracts, books and records and other documents and data, (b) furnish Buyer and
Buyer's Advisors with copies of all such Contracts, books and records, and other
existing documents and data as Buyer may reasonably request, and (c) furnish
Buyer and Buyer's Advisors with such additional financial, operating, and other
data and information as Buyer may reasonably request.
Section 6.2 Required Approvals. As promptly as practicable after the
date of this Agreement, Seller will, and will use his reasonable best efforts to
cause each Acquired Company to, make all filings required by Legal Requirements
to be made by them in order to consummate the Contemplated Transactions. Between
the date of this Agreement and the Closing Date, Seller will use his reasonable
best efforts to cause each Acquired Company to, (a) cooperate with Buyer with
respect to all filings that Buyer elects to make or is required by Legal
Requirements to make in connection with the Contemplated Transactions, and (b)
cooperate with Buyer in obtaining all consents identified in Item Section 5.2(c)
of Buyer's Disclosure Schedule.
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Section 6.3 Business Operations of the Acquired Companies. Between the
date of this Agreement and the Closing Date, Seller will use his reasonable best
efforts to cause each Acquired Company to:
(a) conduct the business of such Acquired Company only in the
Ordinary Course of Business;
(b) preserve intact the current business organization of such
Acquired Company, and maintain its relations and good will with
suppliers, customers, landlords, creditors, employees, agents, and
others having business relationships with such Acquired Company;
(c) confer with Buyer prior to implementing operational
decisions of a material nature;
(d) make no material changes in management personnel or
management compensation arrangements without prior consultation with
Buyer;
(e) except as required to comply with ERISA or to maintain
qualification under Section 401(a) of the Code, not amend, modify or
terminate any without the express written consent of Buyer and, except
as required under the provisions of any Employee Plan, not make any
contribution to or with respect to any Employee Plan without the
express written consent of Buyer, provided that such Acquired Company
shall contribute that amount of cash to each Employee Plan necessary to
fully fund its obligations under such Employee Plan; and
(f) otherwise report periodically to Buyer concerning the
status of the business, operations, and finances of such Acquired
Company.
Section 6.4 Negative Covenant. Except as otherwise expressly permitted
by this Agreement, between the date of this Agreement and the Closing Date,
Seller will not, and will use his reasonable best efforts to cause each Acquired
Company not to, without the prior consent of Buyer, (a) take any affirmative
action, or fail to take any reasonable action within his or its control, as a
result of which any of the changes or events listed in Section 3.7 or Section
3.8 is likely to occur, or (b) make any material modification to any Contract.
Section 6.5 Notification. Between the date of this Agreement and the
Closing Date, Seller will promptly notify Buyer in writing if Seller or any
Acquired Company becomes aware of any fact or condition that causes or
constitutes a Breach of any of Seller's representations and warranties as of the
date of this Agreement, or if Seller or any Acquired Company becomes aware of
the occurrence after the date of this Agreement of any fact or condition that
would (except as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the
Disclosure Schedule if the Disclosure Schedule were dated the date of the
occurrence or discovery of any such fact or condition, Seller will promptly
deliver to Buyer a supplement to the Disclosure Schedule specifying such change.
Such delivery shall not affect any rights of Buyer under Section 9.1 and ARTICLE
11. During the same period, Seller will promptly notify Buyer of the occurrence
of any event that may make the satisfaction of the conditions in ARTICLE 9
impossible or unlikely.
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Section 6.6 Payment of Indebtedness by Related Persons. Except as
expressly provided in this Agreement, Seller will cause all indebtedness owed to
an Acquired Company by Seller or any Related Person of Seller to be paid in full
prior to Closing.
Section 6.7 Conversion of Series A Preferred Stock. Between the date of
this Agreement and the Closing Date, Seller will convert all of the issued and
outstanding shares of the Company's Series A Preferred Stock, par value $0.01
per share, into shares of the Common Stock.
Section 6.8 Reasonable Best Efforts. Between the date of this Agreement
and the Closing Date, Seller will use his reasonable best efforts to cause the
conditions in ARTICLE 10 to be satisfied.
ARTICLE 7
COVENANTS OF BUYER PRIOR TO CLOSING DATE
Section 7.1 Approvals of Governmental Bodies. As promptly as
practicable after the date of this Agreement, Buyer will make all filings
required by Legal Requirements to be made by it to consummate the Contemplated
Transactions. Between the date of this Agreement and the Closing Date, Buyer
will (i) cooperate with Seller with respect to all filings that Seller is
required by Legal Requirements to make in connection with the Contemplated
Transactions, and (ii) cooperate with Seller in obtaining all consents
identified in Item Section 3.2(b) of the Disclosure Schedule.
Section 7.2 Reasonable Best Efforts. Between the date of this Agreement
and the Closing Date, Buyer will use its reasonable best efforts to cause the
conditions in ARTICLE 9 to be satisfied.
ARTICLE 8
ADDITIONAL COVENANTS
Section 8.1 Public Announcements. Unless consented to by Buyer in
advance or required by Legal Requirements, prior to the Closing Seller shall,
and shall cause the Acquired Companies to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any Person.
Seller and Buyer will consult with each other concerning the means by which the
Acquired Companies' employees, customers, and suppliers and others having
dealings with the Acquired Companies will be informed of the Contemplated
Transactions.
Section 8.2 Confidentiality.
(a) Between the date of this Agreement and the Closing Date,
Buyer and Seller will maintain in confidence, and will use its
reasonable best efforts to cause the directors, officers, employees,
agents, and advisors of Buyer and the Acquired Companies to maintain in
confidence, and not use to the detriment of another party or an
Acquired Company any written, oral, or other information obtained in
confidence from another party or an Acquired Company in connection with
this Agreement or the Contemplated Transactions, unless (i) such
information is already known to such party or to others not bound by a
duty of confidentiality or such information becomes publicly available
through no fault of such party, (ii) the use of such information is
necessary or appropriate in making any filing or obtaining any consent
or approval required for the consummation of the Contemplated
Transactions, or (iii) the furnishing or use of such information is
required by or necessary or appropriate in connection with legal
proceedings.
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(b) If the Contemplated Transactions are not consummated, each
party will return or destroy as much of such written information as the
other party may reasonably request.
ARTICLE 9
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
The obligation of Buyer to purchase the Company Stock and to take the
other actions required to be taken by Buyer at the Closing is subject to the
fulfillment or written waiver by Buyer at or prior to the Closing of each of the
following conditions:
Section 9.1 Accuracy of Representations. All of Seller's
representations and warranties in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), must
have been accurate in all material respects as of the date of this Agreement,
and must be accurate in all material respects as of the Closing Date as if made
on the Closing Date, without giving effect to any supplement to the Disclosure
Schedule.
Section 9.2 Seller's Performance.
(a) All of the covenants and obligations that Seller is
required to perform or to comply with pursuant to this Agreement and
the Principal Shareholder's Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered collectively), must have been duly performed and complied
with in all material respects.
(b) Each document required to be delivered pursuant to Section
2.4(a) must have been delivered, and each of the other covenants and
obligations in Sections 6.2 and 6.8 must have been performed and
complied with in all respects.
Section 9.3 Consents. Each of the Consents identified in Item (b) of
Section 3.2(b) of the Disclosure Schedule must have been obtained and must be in
full force and effect.
Section 9.4 Additional Documents. Each of the following documents must
have been delivered to Buyer:
(a) an opinion of Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLC, dated
the Closing Date, in the form of Exhibit 9.4(a); and
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(b) such other documents as Buyer may reasonably request for
the purpose of (i) enabling its counsel to provide the opinion referred
to in Section 10.4(a), (ii) evidencing the accuracy of any of Seller's
representations and warranties, (iii) evidencing the performance by
Seller of, or the compliance by Seller with, any covenant or obligation
required to be performed or complied with by Seller under this
Agreement or the Principal Shareholder's Agreement, (iv) evidencing the
satisfaction of any condition referred to in this ARTICLE 9 or (v)
otherwise facilitating the consummation or performance of any of the
Contemplated Transactions.
Section 9.5 No Proceedings. Since the date of this Agreement, there
must not have been commenced or threatened against Buyer or any Related Person
of Buyer, any Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated Transactions or (b)
that may have the effect of preventing, delaying, making illegal or otherwise
interfering with any of the Contemplated Transactions.
Section 9.6 No Claim Regarding Stock Ownership or Sale Proceeds. There
must not have been made or threatened by any Person any claim asserting that
such Person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any stock of, or any other voting,
equity, or ownership interest in, any of the Acquired Companies or (b) is
entitled to all or any portion of the Purchase Price payable for the Company
Stock.
Section 9.7 No Material Adverse Change. Since the date of this
Agreement, there has not been any material adverse change in the business,
operations, properties, prospects, results of operations or condition (financial
or otherwise) of any Acquired Company and no event has occurred or circumstance
exists that may result in such a material adverse change.
Section 9.8 Consummation of Other Transactions. The transactions
contemplated by each of the Company Share Exchange Agreement and the Company
Stock Purchase Agreement shall have been consummated (other than the
consummation of the transactions contemplated by this Agreement).
ARTICLE 10
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
The obligation of Seller to sell the Company Stock and to take the
other actions required to be taken by Seller at the Closing is subject to the
fulfillment or written waiver by Seller at or prior to the Closing of each of
the following conditions:
Section 10.1 Accuracy of Representations. All of Buyer's
representations and warranties in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), must
have been accurate in all material respects as of the date of this Agreement and
must be accurate in all material respects as of the Closing Date as if made on
the Closing Date.
Section 10.2 Buyer's Performance.
(a) All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing (considered collectively), and each of these
covenants and obligations (considered collectively), must have been
performed and complied with in all material respects.
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(b) Buyer must have delivered each of the documents required
to be delivered by Buyer pursuant to Section 2.4(b) and must have made
the cash payments required to be made by Buyer pursuant to Section
2.4(b)(i).
Section 10.3 Consents. Each of the Consents identified in Item 3.2(b)
of the Disclosure Schedule must have been obtained and must be in full force and
effect.
Section 10.4 Additional Documents. Buyer must have caused the following
documents to be delivered to Seller:
(a) an opinion of McGuireWoods LLP, dated the Closing Date, in
the form of Exhibit 10.4(a); and
(b) such other documents as Seller may reasonably request for
the purpose of (i) enabling his counsel to provide the opinion referred
to in Section 9.4(a), (ii) evidencing the accuracy of any
representation or warranty of Buyer, (iii) evidencing the performance
by Buyer of, or the compliance by Buyer with, any covenant or
obligation required to be performed or complied with by Buyer under
this Agreement, (iv) evidencing the satisfaction of any condition
referred to in this ARTICLE 10 or (v) otherwise facilitating the
consummation or performance of any of the Contemplated Transactions.
Section 10.5 No Injunction. There must not be in effect any Legal
Requirement or any injunction or other Order that (a) prohibits consummation of
the Contemplated Transactions or any of them and (b) has been adopted or issued,
or has otherwise become effective, since the date of this Agreement with
reference to the Contemplated Transactions.
ARTICLE 11
INDEMNIFICATION; REMEDIES
Section 11.1 Survival; Right To Indemnification Not Affected By
Knowledge. No representations and warranties other than the representations and
warranties set forth in ARTICLE 4 and ARTICLE 5 will survive the Closing. The
right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired at any
time, whether before or after the execution and delivery of this Agreement or
the Closing Date, with respect to the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant, or obligation. The waiver of
any condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants and obligations.
Section 11.2 Indemnification And Payment of Damages By Seller. Seller
will indemnify and hold harmless Buyer, the Acquired Companies and their
respective Related Persons (collectively, the "Buyer Indemnified Persons") for,
and will pay to the Indemnified Persons, the amount of any loss, liability,
claim, damage, or expense (including costs of investigation and defense and
reasonable attorneys' and consultants' fees), but not incidental or
consequential damages or diminution in value, whether or not involving a
Third-Party Claim (collectively, "Damages"), arising from or in connection with:
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(a) any Breach of any representation or warranty made by
Seller in ARTICLE 4 of this Agreement (without giving effect to any
supplement to the Disclosure Schedule), the Disclosure Schedule, the
supplements to the Disclosure Schedule, or any other certificate or
document delivered by Seller pursuant to this Agreement;
(b) any Breach by Seller of any covenant or obligation of
Seller in this Agreement; or
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with Seller
(or any Person acting on his behalf) in connection with any of the
Contemplated Transactions.
The remedies provided in this Section 11.2 will not be exclusive of or limit any
other remedies that may be available to Buyer or the other Indemnified Persons.
Section 11.3 Indemnification And Payment Of Damages By Buyer. Buyer
will indemnify and hold harmless Seller for, and will pay to Seller, the amount
of any Damages arising, directly or indirectly, from or in connection with (a)
any Breach of any representation or warranty made by Buyer in Article 5 of this
Agreement or in any certificate delivered by Buyer pursuant to this Agreement,
(b) any Breach by Buyer of any covenant or obligation of Buyer in this Agreement
or (c) any claim by any Person for brokerage or finder's fees or commissions or
similar payments based upon any agreement or understanding alleged to have been
made by such Person with Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions. The remedies provided in
this Section 11.2 will not be exclusive of or limit any other remedies that may
be available to Seller.
Section 11.4 Time Limitations. If the Closing occurs, Seller will have
no liability (for indemnification or otherwise) with respect to any
representation or warranty made by it, unless on or before the first anniversary
of the Closing Date Buyer notifies Seller of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by Buyer. If
the Closing occurs, Buyer will have no liability (for indemnification or
otherwise) with respect to any representation or warranty made by it, unless on
or before the first anniversary of the Closing Date Seller notifies Buyer of a
claim specifying the factual basis of that claim in reasonable detail to the
extent then known by Seller.
Section 11.5 Procedure For Indemnification-Third Party Claims.
(a) Promptly after receipt by a Person entitled to
indemnification under Section 11.2 or Section 11.3 (an "Indemnified
Person") of notice of the commencement of any Third-Party claim against
it, such Indemnified Person shall give notice to the Person obligated
to indemnify under such Section (an "Indemnifying Person") of the
commencement of such Third-Party Claim, but the failure to notify the
Indemnifying Person will not relieve the Indemnifying Person of any
liability that it may have to any Indemnified Person, except to the
extent that the Indemnifying Person demonstrates that the defense of
such action is prejudiced by the Indemnifying Person's failure to give
such notice.
-22-
(b) If an Indemnified Person gives notice to the Indemnifying
Person pursuant to Section 11.5(a) of the assertion of a Third-Party
Claim:
(i) the Indemnifying Person will, unless the claim
involves Taxes, be entitled to participate in the defense of
such Third-Party Claim and, to the extent that it wishes
(unless (A) the Indemnifying Person is also a Person against
whom the Third-Party Claim is made and the Indemnified Person
determines in good faith that joint representation would be
inappropriate, or (B) the Indemnifying Person fails to provide
reasonable assurance to the Indemnified Person of its
financial capacity to defend such Third-Party Claim and
provide indemnification with respect to such Third-Party
Claim), to assume the defense of such Third-Party Claim with
counsel satisfactory to the Indemnified Person. After notice
from the Indemnifying Person to the Indemnified Person of its
election to assume the defense of such Third-Party Claim, the
Indemnifying Person will not, as long as it diligently
conducts such defense, be liable to the Indemnified Person
under this ARTICLE 11 for any fees of other counsel or any
other expenses with respect to the defense of such Third-Party
Claim, in each case subsequently incurred by the Indemnified
Person in connection with the defense of such Third-Party
Claim, other than reasonable costs of investigation.
(ii) If the Indemnifying Person assumes the defense of a
Third-Party Claim, (A) such assumption will conclusively
established for purposes of this Agreement that the claims
made in that Third-Party Claim are within the scope of and
subject to indemnification, and (B) no compromise or
settlement of such claims may be effected by the Indemnifying
Person without the Indemnified Person's Consent unless (1)
there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and
no effect on any other claims that may be made against the
Indemnified Person, and (2) the sole relief provided is
monetary damages that are paid in full by the Indemnifying
Person; and (3) the Indemnified Person will have no liability
with respect to any compromise or settlement of such claims
effected without its Consent.
(iii) If notice is given to an Indemnifying Person of the
assertion of any Third-Party Claim and the Indemnifying Person
does not, within ten (10) days after the Indemnified Person's
notice is given, give notice to the Indemnified Person of its
election to assume the defense of such Third-Party Claim, the
Indemnifying Person will be bound by any determination made in
such Third-Party Claim or any compromise or settlement
effected by the Indemnified Person.
(c) Notwithstanding the foregoing, if an Indemnified Person
determines in good faith that there is a reasonable probability that a
Third-Party Claim may adversely affect it or its Related Persons other
than as a result of monetary damages for which it would be entitled to
indemnification under this Agreement, the Indemnified Person may, by
notice to the Indemnifying Person, assume the exclusive right to
defend, compromise, or settle such Third-Party Claim, but the
Indemnifying Person will not be bound by any determination of a
Third-Party Claim so defended or any compromise or settlement effected
without its Consent (which may not be unreasonably withheld).
-23-
(d) Notwithstanding the provisions of Section 13.8, Sellers
hereby consent to the nonexclusive jurisdiction of any court in which a
Proceeding respecting a Third-Party Claim is brought against any Buyer
Indemnified Person for purposes of any claim that a Buyer Indemnified
Person may have under this Agreement with respect to such proceeding or
the matters alleged therein, and agree that process may be served on
Sellers with respect to such a claim anywhere in the world.
ARTICLE 12
TERMINATION
Section 12.1 Termination Events. This Agreement may, by notice given
prior to or at the Closing, be terminated:
(a) by mutual consent of Buyer and Seller; or
(b) by either Buyer or Seller if the Closing has not occurred
(other than through the failure of the party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on
or before July 31, 2005, or such later date to which the parties may
agree; or
(c) by Buyer or Seller if a material Breach of any provision
of this Agreement has been committed by the other party and such Breach
has not been waived; or
(d) by Buyer if any of the conditions of ARTICLE 9 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement) and Buyer
has not waived such condition on or before the Closing Date; or
(e) by Seller if any of the conditions of ARTICLE 10 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Seller to comply with his obligations under this Agreement) and Seller
has not waived such condition on or before the Closing Date; or
(f) by either Buyer or Seller if any Governmental Body shall
have issued a nonappealable final Order having the effect of
permanently restraining, enjoining or otherwise prohibiting the
Contemplated Transactions, except if the party relying on such Order
has not complied with its obligations under of this Agreement with
respect to such matter.
Section 12.2 Effect of Termination. Each party's right of termination
under Section 12.1 is in addition to any other rights such party may have under
this Agreement or otherwise, and the exercise of a right of termination will not
be an election of remedies. If this Agreement is terminated pursuant to Section
12.1, all further obligations of the parties under this Agreement will
terminate, except the obligations in Section 8.2 and Section 13.1 will survive;
provided, that if this Agreement is terminated by a party because of a Breach of
the Agreement by the other party or because one or more conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's rights to pursue all legal remedies will
survive such termination unimpaired; provided, that Seller shall not be liable
to Buyer for any Breach arising from any of the representations and warranties
contained in ARTICLE 3.
-24-
Section 12.3 Extension; Waiver. At any time prior to the Closing, the
parties hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.1 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective fees and
expenses incurred in connection with the preparation, negotiation, execution,
and performance of this Agreement and the Contemplated Transactions, including
all fees and expenses of its Representatives. If this Agreement is terminated,
the obligation of each party to pay its own expenses will be subject to any
rights of such party arising from a breach of this Agreement by another party.
Section 13.2 Notices.
(a) All notices, consents, waivers and other communications
hereunder must be in writing and either (i) delivered personally, (ii)
sent by facsimile transmission (with written confirmation of a
successful transmission), (iii) mailed by prepaid first class
registered or certified mail, return receipt requested, or (iv)
delivered by a nationally recognized prepaid overnight courier service
(receipt requested), in each case to the appropriate addresses or
facsimile numbers set forth below (or to such other addresses or
facsimile numbers as a party may designate by notice to the other
parties):
Seller: Xxxxxx XxxXxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile Number:_________________________
with a copy (which shall not constitute notice) to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
1065 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile Number: (000) 000-0000
xxxxxxxx@xxxxxxx.xxx
-25-
Buyer: Oak Finance Investments Limited
c/o Xxxxx Xxxxxxx & Fabrega Trust Company
BVI Ltd.
000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx Building, 2nd Floor
Xxxxxxx'x Xxx
Road Town, Tortola
British Virgin Islands
Telephone: _______________________
Facsimile Number: _________________
with a copy (which shall not constitute notice) to:
McGuireWoods LLP
0000 Xxxxxx xx xxx Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, XX 1010
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile Number: 000 000-0000
(b) All such notices, consents, waivers and other
communications will (i) if delivered personally in the manner and to
the address provided in this section, be deemed given upon delivery,
(ii) if delivered by facsimile transmission in the manner and to the
facsimile number provided in this section, be deemed given on the
earlier of receipt or the first business day after transmission, (iii)
if delivered by mail in the manner, and to the address provided in this
section, be deemed given on the earlier of the third business day
following mailing or upon receipt, if earlier, and (iv) if delivered by
overnight courier in the manner and to the address provided in this
section, be deemed given on the earlier of receipt or the first
business day following the date sent by such overnight courier.
Section 13.3 Entire Agreement; Modifications. This Agreement supersedes
all prior agreements and understandings between the parties with respect to its
subject matter (including the letter of intent, dated July __, 2004,) and
constitutes (along with the Disclosure Schedule, Exhibits and other documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
Section 13.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of New York without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would require the
application of any other law.
-26-
Section 13.5 Assignment; Successors; No Third Party Rights. Seller may
not assign any of its rights or delegate any of its obligations under this
Agreement (whether by operation of law or otherwise) without the prior written
consent of Buyer. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
Section 13.6 Severability. If any portion of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
Section 13.7 No Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power or privilege under this Agreement
will operate as a waiver thereof, and no single or partial exercise by a party
of its rights hereunder shall preclude any other or future exercise thereof or
the exercise of any other right, power or privilege.
Section 13.8 Jurisdiction; Service of Process. Any Proceeding arising
out of or relating to this Agreement or any Contemplated Transaction may be
brought in the federal courts sitting in the County of New York, State of New
York, and each of the parties irrevocably submits to the exclusive jurisdiction
of each such court in any such Proceeding, waives any objection it may now or
hereafter have to venue or to convenience of forum, agrees that all claims in
respect of the Proceeding shall be heard and determined only in any such courts
and agrees not to bring any Proceeding arising out of or relating to this
Agreement or any Contemplated Transaction in any other court. The parties agree
that either or both of them may file a copy of this paragraph with any court as
written evidence of the knowing, voluntary and bargained agreement between the
parties irrevocably to waive any objections to venue or to convenience of forum.
Process in any Proceeding referred to in the first sentence of this section may
be served on any party anywhere in the world.
Section 13.9 Further Assurances. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
Section 13.10 Counterparts. This Agreement may be executed in one or
more counterpart copies, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement. The exchange of copies of this Agreement
and of signature pages by facsimile transmission shall constitute effective
execution and delivery of this Agreement as to the parties and may be used in
lieu of the original Agreement for all purposes. Signatures of the parties
transmitted by facsimile shall be deemed to be their original signatures for all
purposes.
27
Section 13.11 Signatures. This Agreement may be executed with original
or facsimile signatures in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one-and-the-same document.
-28-
In Witness Whereof, Buyer and Seller have executed this Agreement as of
the date first written above.
BUYER:
OAK FINANCE INVESTMENTS LIMITED
By: /s/ Xxxxxx Xxxxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx Xxxxxxxxx
Title: Director
SELLER:
/s/ Xxxxxx XxxXxx
-----------------
Xxxxxx XxxXxx
/s/ Xxxxxx XxxXxx
------------------
Xxxxxx XxxXxx, as XXX custodian
/s/ Xxxxxx XxxXxx
-----------------
Xxxxxx XxxXxx, as custodian for 7,500 shares
The undersigned hereby consents to this Agreement, agrees to permit Seller to
deliver her shares in accordance with Section 2.4(a)(ii) above and to permit the
purchase price therefor to be paid as provided in Section 2.4(b)(i).
/s/ Xxxxx XxxXxx
-----------------
Xxxxx XxxXxx
-29-
EXHIBIT 2.4(A)(iv)
EMPLOYMENT AGREEMENT AMENDMENT
[Form of Employment Agreement]
AMENDMENT
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
THE A CONSULTING TEAM, INC.
AND
XXXXXX XXXXXX
THE RECITALS
A. The A Consulting Team, Inc. (the "Company") and Xxxxxx Xxxxxx (the
"Executive") entered into an employment agreement, dated as of [_________]
(the "Agreement");
B. The Company and Oak Finance Investments Limited, a British Virgin Islands
company (the "Buyer"), have entered into the Stock Purchase Agreement,
dated as of January 21, 2005 (the "Stock Purchase Agreement"), and the
Principal Shareholder's Agreement, dated as of January 21, 2005 (the
"Principal Shareholder's Agreement"); and
C. It is a condition to the Executive's obligations to perform its obligations
under the Stock Purchase Agreement and to sell his shares to the Buyer, and
to the Buyer's obligation to perform its obligation under the Stock
Purchase Agreement and to purchase the Executive's shares, that the Company
and the Executive shall have amended the Agreement by entering into this
Agreement.
THE AGREEMENT
NOW THEREFORE, the Agreement is hereby amended as provided herein.
Section 1. Section 1.1 of the Agreement is hereby amended in full to read
as follows:
"The Executive agrees to be employed as an employee of the
Corporation and as a member of its executive team, all on the terms
and conditions hereinafter set forth."
Section 2. Section 1.3 is hereby amended by deleting "Board of Directors"
and inserting "Chief Executive Officer" in lieu thereof.
Section 3. Section 1.5 is hereby deleted from the Agreement.
Section 4. Section 2.1 of the Agreement is hereby restated in full to read
as follows:
"Executive shall be an at will employee of the Corporation with no
fixed term of employment. Either the Corporation or Executive may
terminate the term of employment on not less than 90 days' written
notice given to the other."
Section 5. The second sentence of Section 3.1 is hereby deleted in full
from the Agreement.
Section 6. Section 3.4 is hereby deleted in full from the Agreement.
Section 7. Sections 4 and 5 are hereby deleted in full from the Agreement.
Section 8. Section 6.1 of the Agreement is hereby restated in full to read
as follows:
"During the term of this Agreement and for a period of two (2)
years after the Termination Date, the Executive shall not (i)
directly or indirectly, as an employee, agent, manager, director,
officer, controlling stockholder, partner or otherwise, engage or
participate in any business engaged in the continental United
States in activities competitive with any activities in which the
Corporation is engaged during the period ending on [insert date on
which the Amendment to the Employment Agreement becomes
effective], (ii) solicit from any client or division, department
or subsidiary of any client of the Corporation, or any individual
employed by any of the foregoing, for whom the Executive performed
services at any time after January 21, 2004, any business relating
to services similar to the services which were so performed by the
Executive for such clients during the period beginning on January
21, 2004 and ending on the Termination Date. In addition, the
Executive shall not during the term of this Agreement and during
the two (2) years after the Termination Date, request or cause any
client of the Corporation to cancel or terminate any business
relationship with the Corporation or any of its subsidiaries, or
directly or indirectly solicit or otherwise cause any employee to
terminate such employee's relationship with the Corporation."
Section 9. Section 6.5 of the Agreement is hereby restated in full to read
as follows:
"The Executive recognizes that the employees of the Corporation
are a valuable resource of each such member. Executive agrees that
Executive shall not, for a period of two (2) year following the
Termination Date, either alone or in conjunction with any other
person or entity solicit, induce or recruit any employee to leave
the employ of the Corporation."
-2-
Section 10. Following any termination of the term of employment, whether by
the Corporation or by the Executive, Executive shall have the right for a period
of not less than 10 years following such termination to maintain, at Executives'
sole cost and expense by payment of premium and all other costs payable by
insureds under the policy, health insurance under the group health insurance
policy maintained from time to time by the Corporation. In the event of any sale
of the Corporation's business, the successor shall assume in writing the
Corporation's obligation to the Executive under this Section 7 of this
Amendment.
Section 11. This Amendment may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
Section 12. The Executive hereby waives any and all rights he may have, now
or in the future, to assert or maintain that the change in his duties and title
effected as a result of Section 1 above constitute "Good Reason" under the
Agreement.
Section 13. The Agreement, except as otherwise set forth herein, shall
remain in full force and effect in all other respects.
IN WITNESS WHEREOF, the parties have executed this Amendment as of
[__________].
EXECUTIVE
By:
---------------------
XXXXXX XXXXXX
THE A CONSULTING TEAM, INC.
By:
-----------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Financial Officer
-3-
EXHIBIT 9.4(A)
SELLER'S COUNSEL'S OPINION
[Intentionally Omitted]
EXHIBIT 10.4(A)
BUYER'S COUNSEL'S OPINION
[Intentionally Omitted]
