Exhibit 10.1
KEY-PERSON LIFE INSURANCE
PREMIUM SHARING AGREEMENT
THIS PREMIUM SHARING AGREEMENT (this "Agreement"), effective as of July
l, 2006 (the "Effective Date"), is by and among The A Consulting Team, Inc. (the
"Company"), a New York corporation with its principal place of business at 000
Xxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000, Xx. Xxxxxx XxxXxx and Helios & Xxxxxxxx
Information Technology Ltd. ("H&M" (and together with the Company, the
"Parties")), a foreign corporation with its principal place of business at 0
Xxxxxxxxxxxx Xxxx Xxxx, Xxxxxxx 000000 Xxxxx.
WITNESSETH:
WHEREAS, the Company currently maintains a $10 million life insurance
policy (the "Policy") on the life of Xx. Xxxxxx XxxXxx, a director and the Chief
Executive Officer and President of the Company ("BenTov");
WHEREAS, the Company is currently the sole beneficiary of the entire
$10 million payable under the Policy;
WHEREAS, the Company currently pays an annual premium of $28,860 (the
"Current Premium");
WHEREAS, the Board of Directors of the Company (the "Board") desires to
reduce the amount payable to the Company under the Policy to $5 million in order
to reduce its annual premium payments;
WHEREAS, BenTov and H&M have previously entered into a Stock Purchase
Agreement dated March 30, 2006 (the "Stock Purchase Agreement"), whereby, among
other things, H&M agreed to acquire and pay for term insurance in the amount of
$5 million till March 31, 2007 and $2.5 million March 31, 2008, on the life of
BenTov in order to secure certain deferred payments due pursuant to the terms of
the Stock Purchase Agreement in the event of the death of BenTov;
WHEREAS, pursuant to the Stock Purchase Agreement, the amount of the
insurance that H&M agreed to acquire and pay for will reduced in half after the
Third Payment has been made, and the insurance will be cancelled after the
Fourth Payment has been made; and
WHEREAS, as an accommodation to BenTov and H&M, a principal stockholder
of the Company, the Board has agreed to maintain the Policy but to allocate $5
million of the amount payable under the Policy to a beneficiary designated by
BenTov in order that H&M may fulfill its obligation under the Stock Purchase
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and certain
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:
l. Payment of Premium. H&M agrees to pay to the Company one-half (1/2)
of the amount of all future premium payments under the policy for the period
commencing on the date hereof and ending on March 31, 2007. H&M further agrees
to pay to the Company one-fourth (1/4) of the amount of all future premium
payments under the Policy for the period commencing on the date hereof and
ending on March 31, 2008. H&M agrees to pay such future premium payments at
least two (2) business days in advance of the due date of such premium payment.
H&M also agrees to pay the Company one-half of the premium amounts previously
paid by the Company for the period commencing on the Effective Date. In the
event that H&M fails to pay any payments due hereunder, the Company shall
provide H&M a written notice and H&M shall have ten (10) business days to submit
the late payments. The parties agree that in the event that H&M fails to pay any
payments due after the 10-day period, BenTov and the Company shall cause the
Company to be named as the sole and exclusive beneficiary under the Policy.
2. No Company Liability; No Representations or Warranties. H&M
acknowledges that it has reviewed the Policy. The Company makes no
representations or warranties regarding the Policy. THE COMPANY EXPRESSLY
DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE POLICY. H&M and Xx.
Xxxxxx expressly acknowledge and agree that, the Company shall have no liability
for any payments or obligations under the Stock Purchase Agreement or hereunder
under any circumstances including, without limitation, in the event that the
Policy is cancelled, revoked, rescinded, modified or amended or if payments
thereunder are denied for any reason. H&M's sole and exclusive remedy hereunder,
under law or otherwise for any lapse, cancellation, termination, modification,
amendment, revocation or denial of coverage under the Policy shall be
reimbursement of any advance premium payments made by H&M for the period of time
after the date of such cancellation, termination, revocation or denial of
coverage (pro rated for any partial period).
3. Notice. The Company shall provide H&M at least five ten (10)
business days advance notice of any future premium payment and the date such
premium is due. Such notice may be given orally or in writing, via physical or
electronic mail at the applicable address of H&M most recently provided to the
Company. Notice by the Company to Xx. Xxxxxxx Ram shall be deemed notice to H&M.
The Company shall provide notice to H&M of any cancellation or termination of
the Policy within a reasonable time after the Company receives notice of the
same.
4. Designation of a Beneficiary. Upon the completion and delivery by BenTov
of any applicable insurance forms to the Company and payment of the applicable
portion of the premium payment for the period commencing on the Effective Date
previously paid by the Company, the Company shall cause the insurance provider
to name the beneficiary designated by BenTov as a beneficiary for $5.0 million
($2.5 million after March 31, 2007) payable under the policy.
5. Entire Agreement. This Agreement constitutes the entire agreement of the
Parties concerning the subject matter hereof and supersedes any other
agreements, representations or understandings (whether written or oral, express
or implied) which relate to the subject matter hereof.
6. Amendments and Waivers. This Agreement may not be amended or terminated,
nor may any provision hereof be waived, except by the written consent of the
Parties hereto.
7. Successors and Assigns. This Agreement shall be binding upon the
transferees, successors, assigns, estate, heirs, legal representatives,
executors or administrators of the Parties hereto.
8. Governing Law. This Agreement shall be governed by the laws of the State
of New York (without regard for the conflict of law provisions thereof).
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one of the same
agreement.
THE A CONSULTING TEAM, INC.
By /s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
HELIOS & XXXXXXXX INFORMATION
TECHNOLOGY LTD.
By /s/ X. Xxxxxxxxxxxx
-------------------------------------
Name: X. Xxxxxxxxxxxx
Title: Chairman
XXXXXX XXXXXX
/s/ Xxxxxx Xxxxxx
