Exhibit 2.1
AMENDMENT NUMBER TWO
TO THE
ASSET PURCHASE AGREEMENT
AMONG
AIT (USA), INC.
AND
INFORMATION MANAGEMENT ASSOCIATES, INC.
AND
AIT GROUP PLC
DATED AUGUST 10, 2001
THIS AMENDMENT NUMBER TWO (this "Amendment") is made and entered into on
July 30, 2002, by and among AIT (USA), Inc., a corporation organized under the
laws of the State of Ohio ("Purchaser"), Information Management Associates,
Inc., a corporation organized under the laws of the State of Connecticut
("Seller"), and AIT Group plc, a public limited company organized under the laws
of England and the ultimate parent company of Purchaser ("Guarantor"). In the
event of any conflict between the terms of this Amendment and the Asset Purchase
Agreement among Purchaser, Seller and Guarantor dated August 10, 2001, as
amended by Amendment Number One dated May 23, 2002 (as amended, the
"Agreement"), the terms of this Amendment will supersede the terms of the
Agreement and will be controlling. Except as expressly modified herein, the
Agreement shall otherwise remain unmodified and in full force and effect.
WHEREAS, under the terms of the Agreement, Purchaser issued a Senior
Promissory Note (the "Original Senior Note") to Seller, dated September 17,
2001, which was guaranteed by Guarantor and which provided for two installment
payments as follows: (i) on March 17, 2002, Purchaser was scheduled to make the
initial payment to Seller of $3,000,000, subject to certain adjustments pursuant
to Sections 2.3 and 2.4 of the Agreement (the "Initial Payment") and (ii) on
June 17, 2002, Purchaser was scheduled to make a final payment to Seller of
$3,500,000, subject to any adjustments, not to exceed $1,650,000, for
indemnification claims under Section 12.2 of the Agreement (the "Final
Payment");
WHEREAS, Purchaser, Seller and Guarantor have agreed that the aggregate
amount of adjustments to the Initial Payment pursuant to Sections 2.3 and 2.4 of
the Agreement was equal to $801,987;
WHEREAS, on April 5, 2002; Purchaser made an interim payment to Seller of
$1,100,000 against the amount due and owing on the Initial Payment;
WHEREAS, on May 23, 2002, pursuant to Amendment Number One to the
Agreement, Purchaser, Seller and Guarantor replaced the Original Senior Note
with a new promissory note (the "Revised Senior Note") that modified the payment
terms for the remaining $1,098,013 due and owing on the Initial Payment and the
$3,500,000 due on the Final Payment under the Agreement in consideration for a
waiver of all indemnification rights of Purchaser under the Agreement and the
payment of interest on the Final Payment under the Agreement from the date of
June 17, 2002 at a rate of 9% per annum.
WHEREAS, on or about May 28, 2002; Purchaser paid the initial payment of
$1,098,013 on the Revised Senior Note leaving a balance of $3,500,000
outstanding.
WHEREAS, Purchaser and Guarantor have requested a further restructuring of
the payment schedule of the Revised Senior Note.
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Upon the consummation (the "Closing") by the Guarantor of a
fully underwritten placement of New Ordinary Shares and rights to purchase New
Ordinary Shares resulting in gross proceeds to Guarantor of at least GBP
(pound)12,500,000 (the "Offering"), Sections 2.1(b)(i), (ii), (iii) and (iv) of
the Agreement shall be deleted in their entirety and replaced with the
following; provided, that the Closing occurs on or before October 10, 2002:
(i) on or prior to June 1, 2002, $3,000,000, subject to
adjustments pursuant to Sections 2.3 and 2.4, by certified or
official bank check or wire transfer of immediately available
funds prior to June 1, 2002, which Purchaser and Seller agree
has been paid; and
(ii) $3,500,000 (the "Principal Amount"), or so much thereof
as may be outstanding from time to time, plus interest at the
RBS Rate (as defined below) per annum on the outstanding
Principal Amount hereof from the date hereof until the payment
thereof in full, payable quarterly in arrears, upon the terms
set forth in the Promissory Note. The Principal Amount and
accrued interest shall be payable in accordance with the
Payment Schedule attached as Schedule A to the Promissory
Note, by certified or official bank check or wire transfer of
immediately available funds; provided, however, that any
Principal Amount, accrued interest and other amounts payable
hereunder outstanding on the fifth anniversary of the date of
the Promissory Note, shall be due and payable on such date.
The Purchaser shall pay interest on the unpaid Principal
Amount of the Promissory Note at a rate per annum equal to the
aggregate of the published base rate of the Royal Bank of
Scotland on the date of the Promissory Note plus 2% (the "RBS
Rate"), until such Principal Amount shall be paid in full.
2. On the date of the Closing (and provided that it shall occur
on or before October 10, 2002) (a) Purchaser and Guarantor shall execute and
deliver to Seller a new Senior Note (the "New Senior Note") in the amount of the
Principal Amount and substantially in the form annexed hereto as Exhibit A; (b)
Seller shall cancel and destroy the Revised Senior Note and Purchaser shall have
no further obligation or liability thereunder and (c) Purchaser shall pay to
Seller all interest that has accrued pursuant to the terms of the Revised Senior
Note from June 17, 2002 until the date of the Closing, by certified or official
bank check or wire transfer of immediately available funds, in accordance with
the wiring instructions and mailing address set forth in Section 8 of the
Revised Senior Note.
3. The Revised Senior Note is hereby amended as follows:
(a) The following is hereby added in its entirety as
Sections 3.3, 3.4 and 3.5 of the Revised Senior Note and the Sections currently
numbered from 3.3 to 3.6 shall be numbered, consecutively, from 3.6 to 3.9:
3.3 any transfer (whether in one transaction or in a series
of transactions) of more than 50% of the outstanding
securities of Maker or Guarantor at the time of such initial
transfer;
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3.4 any sale, transfer, assignment, conveyance, lease or
other disposition (whether in one transaction or in a series
of transactions) of a substantial portion of the assets of
Maker or Guarantor (whether now owned or hereafter acquired);
3.5 any merger, consolidation, combination or
recapitalization (including the issuance of securities, rights
or other equity interests) of Maker or Guarantor, other than
the Offering (as defined in the Agreement), into or with
another person as a result of which the current shareholders
of Maker or Guarantor, as applicable, do not control in the
aggregate more than 50% of the voting power of the surviving
entity following such transaction;
(b) Section 3.3 (renumbered as Section 3.6 pursuant to
Section 3(a) above), is hereby deleted in its entirety and replaced with the
following:
3.6 Maker or Guarantor shall (a) file a petition in
bankruptcy under any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar law of the United
States of America, any foreign country or any domestic or
foreign state or political subdivision for the relief of
debtors now or hereafter in effect or such a petition shall be
filed against Maker or Guarantor (and shall not be dismissed
within 60 days); (b) make an assignment for the benefit of
their respective creditors or consent to the appointment of a
receiver of the whole or any substantial part of their
respective property, (c) declare or announce bankruptcy or
dissolution or (d) become the subject of an order for the
winding up of Maker or Guarantor;
4. Except as expressly modified herein, the Revised Senior Note
shall otherwise remain unmodified and in full force and effect.
5. Seller hereby waives the occurrence of any Events of Default
(as defined in the Revised Senior Note and as amended herein) of Purchaser and
Guarantor, from the date hereof and until the earlier to occur of the following:
(a) the date of the Closing; (b) October 10, 2002 or (c) any of the events
listed under Sections 3.3, 3.4, 3.5 or 3.6 of the Revised Senior Note (as
amended herein). Except for the specific, one-time limited waiver set forth
above, nothing set forth herein or contemplated hereby is intended to constitute
a waiver of any rights or remedies available to the Seller under the Revised
Senior Note or under applicable law (all of which rights and remedies are hereby
expressly reserved by the Seller).
6. Fees and Expenses. Purchaser and Guarantor will pay, as
incurred, Seller's legal fees and expenses in connection with the preparation
of, amendment of, granting of any waiver, approval or consent under, the
enforcement of or the preservation of any rights under, this Amendment and the
New Senior Note, or otherwise in respect of any liabilities of the Purchaser
and/or Guarantor under the Agreement, this Amendment or the New Senior Note.
7. Rights to Offset by Seller. Seller may, at any time and from
time to time, set off and apply any and all amounts owed by Seller to Purchaser
or Guarantor, including, without limitation, any stock or the proceeds thereof
from Anthem, Inc. that Seller is holding for the account of Buyer, against any
and all amounts that Purchaser and Guarantor owe Seller pursuant to the Revised
Senior Note
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(as herein amended), the New Senior Note or the Agreement, in the following
order of priority: (a) any and all amounts that Purchaser and Guarantor owe
Seller pursuant to Section 6 of this Amendment; (b) any interest payable by
Purchaser and Guarantor to Seller pursuant to the Revised Senior Note and the
New Senior Note and (c) the Principal Amount owed by Purchaser and Guarantor
pursuant to the New Senior Note.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and do each hereby warrant and represent that their respective signatory whose
signature appears below has been and is on the date set forth above duly
authorized to execute this Amendment.
PURCHASER:
AIT (USA), INC.
By /s/ Xxxxxxx XxXxxxxxx
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Name: Xxxxxxx X. XxXxxxxxx
-----------------------------------
Title: Secretary
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SELLER:
INFORMATION MANAGEMENT ASSOCIATES, INC.
By /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
-----------------------------------
Title: President and CEO
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GUARANTOR:
AIT GROUP PLC
By /s/ Xxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxx
-----------------------------------
Title: CFO
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