EXHIBIT 10.2.2
December 1, 2005
THE A CONSULTING TEAM, INC.
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx XxxXxx
INTERNATIONAL OBJECT TECHNOLOGY, INC.
00 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx XxxXxx
Re: RESTATED AND AMENDED LOAN AND SECURITY AGREEMENT DATED AS OF
MARCH 23, 2004, BY AND BETWEEN THE A CONSULTING TEAM, INC.,
INTERNATIONAL OBJECT TECHNOLOGY, INC., AND KELTIC FINANCIAL
PARTNERS, LP AS HERETOFORE AMENDED BY THE FOLLOWING:
(a) a letter modification dated as of Xxxxx 00, 0000
(x) an instrument of modification dated as of July 26, 2005 and
entitled "Waiver to the Revolving Loan Agreement"
Dear Xx. XxxXxx:
THE A CONSULTING TEAM, INC. ("TACT"), INTERNATIONAL OBJECT TECHNOLOGY, INC.
("IOT") and KELTIC FINANCIAL PARTNERS, LP ("KELTIC") are parties to a certain
Restated and Amended Loan and Security Agreement dated as of March 23, 2004 (the
"2004 LOAN AGREEMENT"), as heretofore amended by the following instruments of
modification:
(a) a letter modification dated as of March 23, 2005 (the "FIRST
MODIFICATION"); and
(b) an instrument of modification dated as of July 26, 2005 and entitled
"Waiver to the Revolving Loan Agreement" (the "SECOND MODIFICATION").
The 2004 Loan Agreement as heretofore amended by the aforementioned First
Modification and Second Modification is hereinafter called the "LOAN AGREEMENT".
TACT AND IOT HAVE REQUESTED THAT KELTIC AGAIN MODIFY THE LOAN AGREEMENT IN
THE FOLLOWING THREE RESPECTS:
THE A CONSULTING TEAM, INC.
INTERNATIONAL OBJECT TECHNOLOGY, INC.
Page 2
December 1, 2005
(1) KELTIC WAIVE FOR ONLY THE CALENDAR QUARTER ENDING SEPTEMBER 30, 2005,
THE EBITDA COVENANT REQUIREMENT SET FORTH IN SECTION 15.23 OF THE LOAN
AGREEMENT (said EBITDA covenant requirement for the calendar quarter
ending June 30, 2005, having been waived by the Second Modification).
(2) KELTIC RESET THE EBITDA COVENANT REQUIREMENT SET FORTH IN SECTION
15.23 OF THE LOAN AGREEMENT TO $25,000, EFFECTIVE AS AT THE TEST DATE
OF DECEMBER 31, 2005, AND THEREAFTER FOR THE REMAINDER OF THE TERM OF
THE LOAN AGREEMENT.
(3) KELTIC MAKE CLEAR THAT THE CONSENT PROVIDED IN SECTION 15.21 OF THE
LOAN AGREEMENT (ALLOWING TACT AND IOT TO MAKE INVESTMENTS IN PERSONS,
FIRMS OR CORPORATIONS IN THE COMBINED AGGREGATE AMOUNT OF UP TO
$500,000 IF, AMONG OTHER THINGS, TACT AND IOT ARE IN COMPLIANCE WITH
THE CORE EBITDA COVENANT SET FORTH IN SECTION 15.23 FOR TWO
CONSECUTIVE QUARTERS) IS NOT ADVERSELY EFFECTED BY THE FAILURE OF TACT
AND IOT TO COMPLY WITH THE EBITDA COVENANT REQUIREMENT SET FORTH IN
SECTION 15.23 OF THE LOAN AGREEMENT FOR THE CALENDAR QUARTERS ENDING
JUNE 30, 2005 AND SEPTEMBER 30, 2005, KELTIC'S WAIVER OF THE EBITDA
COVENANT REQUIREMENT SET FORTH IN SECTION 15.23 OF THE LOAN AGREEMENT
FOR BOTH SUCH CALENDAR QUARTERS BEING DEEMED COMPLIANCE WITH SUCH
COVENANT FOR PURPOSES OF SECTION 15.21.
In honor of such requests, Keltic agrees to, and does hereby, do each of
the following:
(1) KELTIC HEREBY WAIVES FOR THE CALENDAR QUARTER ENDING SEPTEMBER 30,
2005, THE EBITDA COVENANT REQUIREMENT SET FORTH IN SECTION 15.23 OF
THE LOAN AGREEMENT (said EBITDA covenant requirement for the calendar
quarter ending June 30, 2005, having been waived by the Second
Modification).
(2) KELTIC HEREBY RESETS THE EBITDA COVENANT REQUIREMENT SET FORTH IN
SECTION 15.23 OF THE LOAN AGREEMENT BY THE DELETION OF THE EXISTING
SECTION 15.23, EFFECTIVE AS AT OCTOBER 1, 2005 AND BY THE SUBSTITUTION
OF THE FOLLOWING THEREFOR (it being intended to reset the EBITDA
covenant requirement set forth in Section 15.23 of the Loan Agreement
to $25,000, effective as at the test date of December 31, 2005, and
thereafter for the remainder of the term of the Loan Agreement):
15.23 CORE EBITDA. Shall maintain Core EBITDA of no less than
$25,000, tested quarterly at the end of each calendar quarter,
commencing with the calendar quarter ending December 31, 2005.
THE A CONSULTING TEAM, INC.
INTERNATIONAL OBJECT TECHNOLOGY, INC.
Page 3
December 1, 2005
(3) KELTIC HEREBY MAKES CLEAR THAT THE CONSENT PROVIDED IN SECTION 15.21
OF THE LOAN AGREEMENT (ALLOWING TACT AND IOT TO MAKE INVESTMENTS IN
PERSONS, FIRMS OR CORPORATIONS IN THE COMBINED AGGREGATE AMOUNT OF UP
TO $500,000 IF, AMONG OTHER THINGS, TACT AND IOT ARE IN COMPLIANCE
WITH THE CORE EBITDA COVENANT SET FORTH IN SECTION 15.23 FOR TWO
CONSECUTIVE QUARTERS) IS NOT ADVERSELY EFFECTED BY THE FAILURE OF TACT
AND IOT TO COMPLY WITH THE EBITDA COVENANT REQUIREMENT SET FORTH IN
SECTION 15.23 OF THE LOAN AGREEMENT FOR THE CALENDAR QUARTERS ENDING
JUNE 30, 2005 AND SEPTEMBER 30, 2005, KELTIC'S WAIVER OF THE EBITDA
COVENANT REQUIREMENT SET FORTH IN SECTION 15.23 OF THE LOAN AGREEMENT
FOR BOTH SUCH CALENDAR QUARTERS BEING DEEMED COMPLIANCE WITH SUCH
COVENANT FOR PURPOSES OF SECTION 15.21.
The effectiveness of the aforesaid waiver and amendment is subject to the
payment of a $15,000 modification fee (payable $5,000 upon acceptance of this
letter by TACT and IOT) and $10,000 on January 1, 2006 (it being also understood
that such fee also compensates Keltic for its services performed with respect to
Keltic's consent to the transaction described in the First Modification which
was not consummated by TACT and IOT).
The effectiveness of the aforesaid waiver and amendment is also subject to
confirmation and acceptance by TACT and IOT of the above terms and conditions
(and acceptance by TACT and IOT of this letter by their execution of a copy
hereof will be deemed such confirmation and acceptance). The effectiveness of
the aforesaid waiver and amendment is also subject to acceptance by TACT and IOT
of the additional terms and conditions set forth below (and acceptance by TACT
and IOT of this letter by their execution of a copy hereof will be deemed such
confirmation and acceptance):
(1) THIS WAIVER RELATES ONLY TO THE EBITDA COVENANT REQUIREMENT SET
FORTH IN SECTION 15.23 OF THE LOAN AGREEMENT AND ONLY THE
CALENDAR QUARTER ENDING SEPTEMBER 30, 2005 (said EBITDA covenant
requirement for the calendar quarter ending June 30, 2005, having
been waived by the Second Modification).
(2) THIS AMENDMENT RELATES ONLY TO (1) THE EBITDA COVENANT
REQUIREMENT SET FORTH IN SECTION 15.23 OF THE LOAN AGREEMENT
PROSPECTIVELY FOR ALL PERIODS ENDING ON DECEMBER 31, 2005 AND
THEREAFTER (2) THE CLARIFICATION OF SECTION 15.21 OF THE LOAN
AGREEMENT THAT KELTIC'S WAIVER OF THE EBITDA COVENANT REQUIREMENT
SET FORTH IN SECTION 15.23 OF THE LOAN AGREEMENT FOR THE CALENDAR
QUARTERS ENDING JUNE 30, 2005 AND SEPTEMBER 30, 2005, BEING
DEEMED COMPLIANCE WITH SUCH COVENANT FOR PURPOSES OF SECTION
15.21.
THE A CONSULTING TEAM, INC.
INTERNATIONAL OBJECT TECHNOLOGY, INC.
Page 4
December 1, 2005
(3) This letter will be deemed a modification of the Loan Agreement
and the obligations of TACT and IOT hereunder will be considered
a continuing covenant of the Loan Agreement.
(4) All of the Loan Documents described and defined in the Loan
Agreement shall be deemed to be amended in manner consistent
hereto and conforming herewith.
(5) TACT and IOT agree that there exist no offsets, defenses,
set-offs, deductions, recoupments or counterclaims against any
sums owing under the Loan Agreement.
(6) Xxxxxx XxxXxx, in his capacity as Validity/Support Guarantor
pursuant to the terms of a certain instrument of validity and
support dated March 23, 2004, and entitled "Validity and Support
Agreement", must confirm to Keltic that such instrument continues
in full force and effect and is not impaired or otherwise
lessened or adversely affected by the waiver and amendment
granted by this letter.
(7) TACT and IOT must pay for the services of Keltic's counsel who
was engaged to review the Loan Agreement and to assist in the
preparation of this letter. Such fees have been estimated to be
$1,870.
If TACT and IOT are in agreement with the terms and conditions of this
letter, please execute and have Xxxxxx XxxXxx (in his aforesaid capacity as
Validity/Support Guarantor) execute the enclosed copy of this letter and return
it to me no later than December 10, 2005.
Very truly yours,
KELTIC FINANCIAL PARTNERS, LP
BY: KELTIC FINANCIAL SERVICES LLC
its general partner
By: /s/ Xxxxxx X.Xxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxx,
Managing Member
THE A CONSULTING TEAM, INC.
INTERNATIONAL OBJECT TECHNOLOGY, INC.
Page 5
December 1, 2005
CONSENT OF THE A CONSULTING TEAM, INC.,
AND INTERNATIONAL OBJECT TECHNOLOGY, INC.
Each of THE A CONSULTING TEAM, INC., and INTERNATIONAL OBJECT TECHNOLOGY,
INC., hereby agrees to the terms and conditions of the above letter as of
December 1, 2005.
ATTEST: THE A CONSULTING TEAM, INC.
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx XxxXxx
-------------------------- ---------------------------------
Xxxxxxx Xxxxxxx, Secretary Xxxxxx XxxXxx, Chief Executive
Officer
ATTEST: INTERNATIONAL OBJECT TECHNOLOGY, INC.
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx XxxXxx
-------------------------- ---------------------------------
Xxxxxxx Xxxxxxx, Secretary Xxxxxx XxxXxx, Chief Executive
Officer
THE A CONSULTING TEAM, INC.
INTERNATIONAL OBJECT TECHNOLOGY, INC.
Page 6
December 1, 2005
CONSENT OF VALIDITY/SUPPORT GUARANTOR XXXXXX XXXXXX
The undersigned hereby certifies on and as of December 1, 2005, as follows:
1. (a) The undersigned acknowledges that THE A CONSULTING TEAM, INC.
("TACT"), INTERNATIONAL OBJECT TECHNOLOGY, INC. ("IOT") and KELTIC FINANCIAL
PARTNERS, LP ("KELTIC") are parties to a certain Restated and Amended Loan and
Security Agreement dated as of March 23, 2004 (the "2004 LOAN AGREEMENT"), as
heretofore amended by the following instruments of modification:
(1) a letter modification dated as of March 23, 2005 (the "FIRST
MODIFICATION"); and
(2) an instrument of modification dated as of July 26, 2005 and
entitled "Waiver to the Revolving Loan Agreement" (the
"SECOND MODIFICATION").
(b) The 2004 Loan Agreement as so amended by the First Modification
and the Second Modification is hereinafter collectively called the "LOAN
AGREEMENT".
2. The undersigned is the "VALIDITY/SUPPORT GUARANTOR" named in the Loan
Agreement.
3. In his capacity as Validity/Support Guarantor and pursuant to the
terms of a certain instrument of validity and support dated March 23, 2004, and
entitled "Validity and Support Agreement" (hereinafter the "VALIDITY AND SUPPORT
AGREEMENT"), the undersigned has made certain representations and covenants and
given certain warranties relating to TACT, IOT, the Loan Agreement and the
Collateral as defined in and given to Keltic thereunder.
THE A CONSULTING TEAM, INC.
INTERNATIONAL OBJECT TECHNOLOGY, INC.
Page 7
December 1, 2005
4. (a) By this Consent, the undersigned hereby acknowledges that the
Loan Agreement has been modified by that certain letter modification of even
date herewith (hereinafter the "THIRD MODIFICATION -DECEMBER 2005 LETTER
AMENDMENT") provided by Keltic to TACT and IOT and accepted by TACT and IOT.
(b) The undersigned acknowledges receipt of an executed copy of
the Third Modification -December 2005 Letter Amendment.
(c) The undersigned hereby consents to all the terms and conditions
of the Third Modification -December 2005 Letter Amendment and the performance by
TACT and IOT of their joint and several obligations thereunder.
(d) The undersigned hereby specifically acknowledges and consents to
the following terms and conditions of the Third Modification -December 2005
Letter Amendment:
(1) Keltic's waiver of the EBITDA covenant requirement set forth
in SECTION 15.23 of the Loan Agreement for the calendar
quarter ending September 30, 2005 (said EBITDA covenant
requirement for the calendar quarter ending June 30, 2005,
having been waived by the Second Modification).
(2) Keltic's resetting of the EBITDA covenant requirement set
forth in Section 15.23 of the Loan Agreement by the deletion
of the existing Section 15.23, effective as at October 1,
2005 and by the substitution of the following in its place
(it being intended to reset the EBITDA covenant requirement
set forth in Section 15.23 of the Loan Agreement to $25,000,
effective as at the test date of December 31, 2005, and
thereafter for the remainder of the term of the Loan
Agreement):
15.23 CORE EBITDA. Shall maintain Core EBITDA of no less
than $25,000, tested quarterly at the end of each
calendar quarter, commencing with the calendar quarter
ending December 31, 2005.
THE A CONSULTING TEAM, INC.
INTERNATIONAL OBJECT TECHNOLOGY, INC.
Page 8
December 1, 2005
(3) Keltic's making clear that the consent provided in Section
15.21 of the Loan Agreement (allowing TACT and IOT to make
investments in persons, firms or corporations in the
combined aggregate amount of up to $500,000 if, among other
things, TACT and IOT are in compliance with the Core EBITDA
covenant set forth in Section 15.23 for two consecutive
quarters) is not adversely effected by the failure of TACT
and IOT to comply with the EBITDA covenant requirement set
forth in Section 15.23 of the Loan Agreement for the
calendar quarters ending June 30,2005 and September 30,
2005, Keltic's waiver of the EBITDA covenant requirement set
forth in Section 15.23 of the Loan Agreement for the
calendar quarters ending June 30, 2005, and September 30,
2005 being deemed compliance with such covenant for purposes
of Section 15.21.
5. The undersigned agrees that his obligations under the Validity and
Support Agreement continue unchanged and all the undersigned's representations,
covenants and warranties thereunder are herein re-affirmed and restated.
6. (a) The undersigned further agrees that all references in the
Validity and Support Agreement to the term "LOAN AGREEMENT" shall be deemed to
be references to the Loan Agreement as now amended by the Third Modification
-December 2005 Letter Amendment and by any other amendments made from time to
time hereafter.
(b) The undersigned further agrees that all references in any Loan
Document (as such term is defined in the Loan Agreement) to any other Loan
Document shall include therein all extensions, modifications, refinancings,
renewals, substitutions, replacements and/or redatings of the applicable Loan
Document, whether now or hereafter made or effected.
THE A CONSULTING TEAM, INC.
INTERNATIONAL OBJECT TECHNOLOGY, INC.
Page 9
December 1, 2005
7. The undersigned additionally agrees that:
(a) All provisions of the Validity and Support Agreement are hereby
reaffirmed and given again in this Consent as if each provision was herein set
forth at length.
(b) None of the provisions hereof or of the Third Modification
-December 2005 Letter Amendment in any way impairs or lessens his joint and
several liability as set forth in the Validity and Support Agreement.
(c) None of the provisions of the Third Modification -December 2005
Letter Amendment in any way impairs or lessens any security given by him to
secure the Validity and Support Agreement.
(d) All other Loan Documents defined in the Loan Agreement are deemed
to be amended so as to be in conformity herewith.
IN WITNESS WHEREOF, XXXXXX XXXXXX has executed this Consent as of the date
first above written.
WITNESS:
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxx XxxXxx
-------------------- --------------------------
Xxxxxxx Xxxxxxx Xxxxxx XxxXxx
CERTIFICATION REGARDING DIRECTORS'
RESOLUTIONS OF THE A CONSULTING TEAM, INC.
The undersigned Xxxxxxx Xxxxxxx, being Secretary of THE A CONSULTING TEAM,
INC., a New York corporation, does hereby certify that the following is a true
copy of resolutions duly and unanimously adopted by the Board of Directors of
THE A CONSULTING TEAM, INC., at a meeting of said directors held on December 1,
2005, and that the same are in full force and effect.
"RESOLVED, that THE A CONSULTING TEAM, INC., be and hereby is authorized to
execute that certain letter agreement (hereinafter called the "THIRD
MODIFICATION -DECEMBER 2005 LETTER AMENDMENT") which amends that certain
Restated and Amended Loan and Security Agreement dated as of March 23, 2004
by and among THE A CONSULTING TEAM, INC., INTERNATIONAL OBJECT TECHNOLOGY,
INC. and KELTIC FINANCIAL PARTNERS, LP, as heretofore amended by a letter
modification dated as of March 23, 2000, and an instrument of modification
dated as of July 26, 2005 and entitled "Waiver to the Revolving Loan
Agreement"; and be it
"FURTHER RESOLVED, that Xxxxxx XxxXxx, as president of THE A CONSULTING
TEAM, INC., and acting alone and without the need for co-execution by any
other officer of THE A CONSULTING TEAM, INC., whether attesting otherwise,
be and he hereby is authorized to execute and deliver the aforesaid THIRD
MODIFICATION -DECEMBER 2005 LETTER AMENDMENT and any and all other
documents and to perform all other actions for and on behalf of THE A
CONSULTING TEAM, INC., which may be necessary to effectuate the intent of
the foregoing resolution."
IN WITNESS WHEREOF, I have hereunto set my hand as of December 1, 2005.
/s/ Xxxxxxx Xxxxxxx
--------------------------
Xxxxxxx Xxxxxxx, Secretary
CERTIFICATION REGARDING DIRECTORS'
RESOLUTIONS OF INTERNATIONAL OBJECT TECHNOLOGY, INC.
The undersigned Xxxxxxx Xxxxxxx, being Secretary of INTERNATIONAL OBJECT
TECHNOLOGY, INC., a New Jersey corporation, does hereby certify that the
following is a true copy of resolutions duly and unanimously adopted by the
Board of Directors of INTERNATIONAL OBJECT TECHNOLOGY, INC., at a meeting of
said directors held on December 1, 2005, and that the same are in full force and
effect.
"RESOLVED, that INTERNATIONAL OBJECT TECHNOLOGY, INC., be and hereby is
authorized to execute that certain letter agreement (hereinafter called the
"THIRD MODIFICATION -DECEMBER 2005 LETTER AMENDMENT") which amends that
certain Restated and Amended Loan and Security Agreement dated as of March
23, 2004 by and among THE A CONSULTING TEAM, INC., INTERNATIONAL OBJECT
TECHNOLOGY, INC. and KELTIC FINANCIAL PARTNERS, LP, as heretofore amended
by a letter modification dated as of March 23, 2000, and an instrument of
modification dated as of July 26, 2005 and entitled "Waiver to the
Revolving Loan Agreement"; and be it
"FURTHER RESOLVED, that Xxxxxx XxxXxx, as president of INTERNATIONAL OBJECT
TECHNOLOGY, INC., and acting alone and without the need for co-execution by
any other officer of INTERNATIONAL OBJECT TECHNOLOGY, INC., whether
attesting otherwise, be and he hereby is authorized to execute and deliver
the aforesaid THIRD MODIFICATION -DECEMBER 2005 LETTER AMENDMENT and any
and all other documents and to perform all other actions for and on behalf
of INTERNATIONAL OBJECT TECHNOLOGY, INC., which may be necessary to
effectuate the intent of the foregoing resolution."
IN WITNESS WHEREOF, I have hereunto set my hand as of December 1, 2005.
/s/ Xxxxxxx Xxxxxxx
--------------------------
Xxxxxxx Xxxxxxx, Secretary
