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EXHIBIT 10.19
AMENDMENT TO AGREEMENT AND PLAN OF EXCHANGE
This Amendment to Agreement and Plan of Exchange ("Amendment") is made
effective as of June 5, 1998 by and among BrightStar Information Technology
Group, Inc. ("Parent"), Xxxxxx Xxxxxxxx ("Shareholder") and Xxxx Xxxxxx
("Rayden") in order to amend that certain Agreement and Plan of Exchange among
the parties made effective as of December 18, 1997 ("Exchange Agreement") and a
related Closing Agreement. Capitalized terms used herein and not defined herein
have the meanings ascribed to them in the Exchange Agreement.
In consideration of the premises and the mutual undertakings set forth
herein, the parties hereto agree as follows:
1. RECITALS. The parties hereto entered into the Exchange
Agreement to provide for the terms and conditions of the sale of all of the
outstanding capital stock of Zelo Group, Inc. ("Zelo") by the Shareholder to the
Parent. They also entered into a Closing Agreement effective April 16, 1998 in
connection with Closing the Exchange Agreement. The parties desire to amend the
Exchange Agreement and Closing Agreement as provided herein.
2. EXCHANGE CONSIDERATION. The provisions for the Exchange
Consideration set forth in the Exchange Agreement and Closing Agreement are
hereby revised to be in accordance with the following regardless of any other
provision contained in such prior agreements. The only Exchange Consideration
due to the Shareholder is $375,000 cash, which was previously delivered to the
Shareholder. The parties acknowledge and agree that such payment has been
properly delivered. The parties acknowledge and agree that the other provisions
of the Exchange Agreement and the provisions of the Closing Agreement dealing
with the amount, type and payment of the Exchange Consideration shall have no
applicability or effect.
3. PAYMENTS TO XX. XXXXXXX X. XXXXXXXX. The parties agree to the
following provisions regarding certain payments to Xx. Xxxxxxx X. Xxxxxxxx, also
referred to in Zelo's records as "Madison Management"("Xxxxxxxx"):
(a) Immediately after the effectiveness of this
Amendment, Shareholder and Rayden and Zelo (and BrightStar hereby
agrees to cause Zelo to do the things required of it by this agreement)
shall execute a Release Agreement with Xxxxxxxx substantially similar
in form and substance to the draft Release Agreement attached hereto as
Annex A. Pursuant thereto, Rayden and Zelo shall make certain payments
to Xxxxxxxx in order to retire amounts owed to Xxxxxxxx by them and to
acquire a release of all appropriate parties by Xxxxxxxx from any
further obligations to Xxxxxxxx and to obtain an agreement from
Xxxxxxxx to dismiss the lawsuit filed by Xxxxxxxx on May 11, 1998
against Zelo, Rayden and others, Xxxx Xx. XX000000, Xxx Xxxxxxx Xxxxxx
Superior Court.
(b) Under the Release Agreement, Rayden shall immediately
pay to Xxxxxxxx $50,000, plus the unpaid interest accrued on such
$50,000 under the indebtedness arrangements between Xxxxxxxx and Zelo,
plus one-half of the legal fees of Xxxxxxxx, as such interest and fees
are specifically set forth in the Release Agreement.
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(c) Under the Release Agreement, at the same time that
Rayden makes the payment provided for in subparagraph (b) above,
BrightStar shall cause Zelo to pay to Xxxxxxxx $130,000 plus the unpaid
interest accrued on such $130,000 under the indebtedness arrangements
between Xxxxxxxx and Zelo, plus one-half of the legal fees of Xxxxxxxx,
as such interest and fees are specifically set forth in the Release
Agreement.
(d) The parties shall diligently cooperate to enter into
the Release Agreement with Xxxxxxxx and effect the payments provided
for above to Xxxxxxxx immediately upon the effectiveness of this
Amendment.
4. CERTAIN OBLIGATIONS OF ZELO. BrightStar shall take such steps
as are necessary and appropriate to enable and cause Zelo to fulfill the
obligations of Zelo under a note payable to the American Commercial Bank, I.D.
No. 51351, which is guaranteed by Shareholder and Rayden, and certain other
obligations of Zelo guaranteed by Shareholder or Rayden as set forth in Exhibit
6.8 of the Exchange Agreement, except for any amounts owed to Xxxxxxxx (which
obligations are being fulfilled pursuant to other arrangements set forth in this
Amendment) such that Shareholder and Rayden shall have no liability under such
guarantees. Also, BrightStar will fulfill its indemnity obligations under
Section 6.8 and Exhibit 6.8 of the Exchange Agreement and such indemnity
obligations are hereby extended to apply to the guarantees of Shareholder and
Rayden for the above American Commercial Bank indebtedness. Attached as Annex B
hereto is a copy of Exhibit 6.8 to the Exchange Agreement which lists the
original guarantees subject to such indemnity.
5. CERTAIN CREDIT CARD ACCOUNTS. The parties hereto acknowledge
that Shareholder and Rayden have certain personal credit card accounts under
which certain business expenses of Zelo have been charged. The parties agree
that upon delivery to Zelo by Shareholder and Rayden of written statements of
the business expenses charged under such credit accounts, and the amounts
thereof, in a form reasonable and customary for requesting reimbursement of
business expenses charged on personal credit accounts, Zelo will promptly review
such reimbursement requests and remit payments to Shareholder and Rayden within
five business days after receipt of such information to reimburse them for
proper business expenses paid by them on behalf of Zelo based on fair and
reasonable standards.
6. CERTAIN COMPUTER EQUIPMENT. The parties agree that the
following computer equipment owned by Zelo shall promptly after the date hereof,
but in no event less than seven days after the date hereof, be assigned by Zelo
to Shareholder and made available for pick-up by Shareholder: a SuperMac
computer with monitor made by Macintosh, a Syquest external drive, a Burnulli
external drive, an Apple laser printer and a related drafting table.
7. TERMINATION OF EMPLOYMENT AGREEMENT. The parties agree that an
agreement entitled Agreement for Termination of Employment Agreement between
Zelo and Rayden in the form attached hereto as Annex C shall be executed
simultaneously with the execution of this Amendment.
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8. RELEASE OF SHAREHOLDER AND RAYDEN FROM LISTED LIABILITIES. The
parties hereto agree that they have reasonably cooperated and prepared a list of
the liabilities of Zelo as of April 22, 1998 and attached it hereto as Annex D,
which are agreed to by the parties to be the liabilities of Zelo accepted by
BrightStar as Zelo's liabilities as of such date. BrightStar shall not hold
Shareholder or Rayden responsible for any such liabilities. However, Shareholder
and Rayden shall indemnify Zelo from any loss, damage or costs to Zelo from any
other liabilities of Zelo based on matters occurring prior to April 22, 1998
that are not identified on said Annex D.
9. RELEASE OF SHAREHOLDER AND RAYDEN FROM OTHER CERTAIN
OBLIGATIONS. Except to the extent otherwise provided in this Amendment,
BrightStar hereby releases Shareholder and Rayden from any further
responsibility or liability under Sections 3.10, 3.11(ix), 3.14, 3.18, 3.20
clauses (b), (f), (i), (q), (r) and (s), 5.1, 5.4, 5.6, 5.7, 5.8.1, and 5.9 of
the Exchange Agreement, or for any other breaches of the representations and
warranties and covenants under the Exchange Agreement presently known to
BrightStar. Except for the obligations of Shareholder and Rayden under Section 8
above, BrightStar also releases Shareholder and Rayden from any further
responsibility or liability arising out of financial statements of Zelo covering
any period after December 31, 1997. The parties further acknowledge and agree
that except to the extent modified by this Amendment, the provisions of the
Exchange Agreement shall remain in effect in accordance with their terms.
10. BRIGHTSTAR COMMON STOCK. BrightStar shall issue to Shareholder
100 shares of BrightStar common stock after the expiration of thirty days from
the effective date hereof provided that there has not been (a) a material breach
by Shareholder or Rayden of this Amendment, (b) a new material breach by either
of them of the Exchange Agreement, (c) a material breach by either of them of
the Release Agreement mentioned in Section 3 hereof, or (d) an unfulfilled
indemnity obligation of Shareholder and Rayden under the last sentence of
Section 8 hereof in excess of $1,000.
11. CONFIDENTIALITY/NON-DISPARAGEMENT. The parties agree that they
will keep the facts, terms and amounts under this Agreement completely
confidential and that they will not disclose any information concerning this
Agreement to anyone, provided that any party may make such disclosures as are
required by law and as are necessary for legitimate law enforcement or tax
reporting or securities law reporting compliance purposes. All parties agree
that they shall not, directly or indirectly, engage in any conduct that involves
the making or publishing of written or oral statements or remarks or negative
reports or comments which are disparaging or deleterious or damaging to the
integrity, reputation or goodwill of any other party hereto in connection with
such parties' relationships through the date of this Agreement or the subject
matter of this Agreement.
12. NO STOCK OPTIONS. The parties hereto acknowledge and agree
that no stock options to acquire BrightStar common stock shall be granted to
Rayden, and even though the Board of Directors of BrightStar had previously
authorized the granting of options to Rayden, such options shall not be granted
and issued.
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13. GENERAL. This Amendment is subject to and hereby incorporates
the provisions of Section 10 of the Exchange Agreement and such provisions shall
apply to this Amendment as if they were set forth herein; provided however, the
address for notice for Shareholder and Rayden shall be changed to be 0000 Xxx
Xxxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and their telecopy number shall be
000-000-0000.
Executed to be effective as of the date set forth above.
PARENT:
BRIGHTSTAR INFORMATION TECHNOLOGY
GROUP, INC.
By:/S/XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx, Vice President
SHAREHOLDER:
/S/XXXXXX XXXXXXXX
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Xxxxxx Xxxxxxxx
RAYDEN:
/S/XXXX XXXXXX
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Xxxx Xxxxxx
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