Exhibit 2.1
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AMENDMENT NUMBER ONE
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 ONE (hereinafter referred to as this "Amendment")
is made and entered into on May 23, 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 (hereinafter referred to as 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 is 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, Purchaser has requested that Seller modify the payment terms
for the remaining amounts due and owing under the Agreement;
WHEREAS, Seller is agreeable to modifying 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.
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Sections 2.1(b)(i) and (ii) of the Agreement are hereby deleted in
their entirety and replaced with the following:
(i) on May 28, 2002, $1,098,013 to be paid by certified or
official bank check or wire transfer of immediately available
funds;
(ii) on June 19, 2002, $1,000,000 to be paid by certified or
official bank check or wire transfer of immediately available
funds;
(iii) on July 17, 2002, $1,000,000 to be paid by certified or
official bank check or wire transfer of immediately available
funds; and
(iv) on September 25, 2002, $1,500,000; provided, however, that
the payment on September 25, 2002 in any event shall be in an
amount equal to the aggregate principal amount of the Promissory
Note outstanding on such date, to be paid by certified or official
bank check or wire transfer of immediately available funds.
The Purchaser shall pay interest on the unpaid principal amount of
the Promissory Note at a rate of 9% per annum from June 17, 2002
until such principal amount shall be paid in full. All accrued and
unpaid interest on the principal amount of the Promissory Note
shall be payable on July 17, 2002 and September 25, 2002.
2. The first sentence of Section 6.7 of the Agreement is hereby
deleted in its entirety and replaced with the following:
Between the Closing Date and April 30, 2003, Purchaser shall
afford to Seller and its authorized agents and representatives,
reasonable use of office space for one individual, and a computer,
telephone, copier and file storage.
The remainder of Section 6.7 of the Agreement remains unmodified.
3. Section 12.1 of the Agreement is hereby deleted in its entirety
and replaced with the following:
12.1 Survival. All of the obligations, warranties,
representations, agreements and covenants of the Purchaser and
Guarantor contained in this Agreement shall survive the execution
of this Agreement and the Closing, notwithstanding any
investigation heretofore or hereafter made by or on behalf of any
party hereto until the Seller has received full payment of the
Promissory Note and all accrued interest thereon, except for
representations, warranties and related indemnities for which an
indemnification claim shall be pending as of the end of the
applicable period referred to above, in which event such
indemnities shall survive with respect to such indemnification
claim until the final disposition thereof. All of the obligations,
warranties, representations, agreements and covenants of the
Seller contained in this Agreement are hereby terminated and
released as of May 23, 2002.
4. Section 12.2 of the Agreement is hereby deleted in its entirety.
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5. Section 12.4 of the Agreement is hereby deleted in its entirety
and replaced with the following:
12.4 Indemnity Limits.
(a) General Deductible. Seller shall not be entitled to
any indemnity hereunder until the cumulative amount of Seller
Indemnifiable Damages for which Seller may be entitled to
indemnity hereunder exceeds $165,000 in the aggregate, whereupon
the entire amount of such Seller Indemnifiable Damages shall be
recoverable under this Article XII.
(b) Maximum Liability. Seller shall not be entitled to
indemnity for any Seller Indemnifiable Damages (individually or in
the aggregate) in excess of $1,650,000.
(c) Insurance Proceeds. Indemnification claims by Seller
shall be reduced, by and to the extent, that a Seller Indemnitee
shall actually receive proceeds under insurance policies, or
similar arrangements specifically as a result of, and in
compensation for, the subject matter of an indemnification claim
by such Seller Indemnitee.
(d) Indemnity as Sole Remedy. The sole remedy of the
Seller hereto for a misrepresentation or breach of warranty,
covenant or agreement contained in this Agreement shall be a claim
for indemnity under this Article XII, provided, however, that
nothing contained herein shall in any way limit the right of (a)
Seller to seek any statutory, equitable or common law remedy,
including, without limitation, specific performance in the event
that the covenants to be performed by Purchaser or Guarantor after
the Closing Date are not performed in accordance with their terms
or (b) Seller or Purchaser to seek any statutory, equitable or
common law remedy, including, without limitation, specific
performance, for causes of action based on fraudulent activity.
6. Section 12.5 of the Agreement is hereby deleted in its entirety.
7. Section 13.3 of the Agreement is amended to delete the name of Xxx
Xxxxxxxx from the notice address for AIT Group plc and replace it with the name
of Xxxxxx Xxxxxx.
8. The following is hereby added in its entirety as Section 13.18 of
the Agreement:
13.18. Jurisdiction. Each of Seller, Purchaser and Guarantor
hereby irrevocably submits to and accepts, with respect to any
legal or equitable action or proceeding arising under or in
connection with this Agreement, the jurisdiction of (i) the state
courts of the State of New York in New York City or (ii) at the
sole discretion of the party bringing an action under this
Agreement, the United States Bankruptcy Court for the District of
Connecticut. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Each of Seller, Purchaser and
Guarantor hereby irrevocably consents to service of process by
certified or registered mail, first class postage prepaid, return
receipt requested, or by any other method provided by applicable
law. Purchaser and Guarantor hereby irrevocably and
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unconditionally waive, to the fullest extent they may legally and
effectively do so, any objection which they may now or hereafter
have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred
to in this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding
in any such court. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other
manner permitted by law.
9. Seller shall cancel and destroy the Original Senior Note and shall
issue a new Senior Promissory Note (the "New Senior Note") in the amount of
$4,598,013 bearing interest and payable in accordance with the terms set forth
above. Purchaser and Guarantor shall execute the New Senior Note and be bound by
its terms.
10. Purchaser and Guarantor, and each of their respective affiliates,
directors, stockholders, officers, members, agents and representatives (the
"Purchaser Releasors"), hereby release and forever discharge Seller and its
affiliates, directors, stockholders, officers, members, agents and
representatives, and each of their respective affiliates, heirs, successors and
assigns (the "Seller Releasees") from and against any and all claims, demands,
debts, sums of money, accounts, contracts, compensations, obligations, damages,
liabilities, indemnities, indebtedness, breaches of contract, breaches of duty
or any relationship, acts, omissions, malfeasance, actions and causes of action,
controversies, promises, costs, losses and expenses of every type, kind, nature,
description or character and irrespective of how, why or by reason of what
facts, whether heretofore or now existing or hereafter discovered, or which
could, might or may be claimed to exist, of whatever kind or name, whether known
or unknown, suspected or unsuspected, liquidated or unliquidated, whether at
law, equity or in administrative proceedings, whether at common law or pursuant
to federal, state or local statute, each as though fully set forth herein at
length, which any of the Purchaser Releasors ever had, now has or may have in
the future, arising out of or in connection with (i) any matter relating to the
Seller Releasees resulting from the existing or past state of things, from the
beginning of the world to the end of the day upon which the parties execute this
Amendment or (ii) the Agreement, including, without limitation, any claims for
adjustments under Section 2.3 or 2.4 of the Agreement or any claims for
indemnification under Section 12.2 of the Agreement.
11. The Purchaser Releasors agree never to initiate a legal action
asserting any claims that are released in this Amendment. The Purchaser
Releasors promise never to seek any damages, remedies, or other relief from the
Seller Releasees (any right to which the Purchaser Releasors hereby waive) by
filing or prosecuting a lawsuit, complaint or charge with any court, tribunal or
administrative agency against the Seller Releasees.
[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 X. XxXxxxxxx
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Name: Xxxxxxx X. XxXxxxxxx
Title: Secretary
SELLER:
INFORMATION MANAGEMENT ASSOCIATES, INC.
By /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: President, CEO, Chairman, Secretary
and Treasurer
GUARANTOR:
AIT GROUP PLC
By /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Director
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