JULY 2002 MODIFICATION AGREEMENT
This MODIFICATION AGREEMENT (hereinafter the "Modification") dated as of
July 19, 2002, by and between
THE A CONSULTING TEAM, INC., a New York
corporation with its principal executive
office and principal place of business
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter
called "TACT") and INTERNATIONAL OBJECT
TECHNOLOGY, INC., a New Jersey
corporation with its principal executive
office and principal place of business
to be at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Shmuel
Ben Tov (hereinafter called "IOT"), TACT
and IOT being hereinafter collectively
referred to as "BORROWER"
and
KELTIC FINANCIAL PARTNERS, LP, a limited
partnership organized and existing under
the laws of the State of Delaware with
offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (being
hereinafter referred to as "LENDER")
WITNESSES THAT:
(1) WHEREAS, TACT and LENDER entered into a certain Loan and Security
Agreement dated as of June 27, 2001, as amended by an instrument of modification
dated as of March 25,2002 and entitled "First Amendment to the Loan and Security
Agreement" (such June 27, 2001 Loan and Security Agreement as so amended being
hereinafter collectively referred to in this Modification as the "2001 Loan
Agreement");
(2) WHEREAS, pursuant to the 2001 Loan Agreement, TACT received approval to
receive the benefits of a $4,000,000 revolving line of credit facility (such
facility being called the "Revolving Loan" in the 2001 Loan Agreement and such
term to have the same meaning herein that it has in the 2001 Loan Agreement);
(3) WHEREAS, in order to secure TACT's payment and performance obligations
under the 2001 Loan Agreement (including, without limitation, increases in the
amount of the Revolving Loan), TACT provided LENDER with the Collateral as more
fully defined and set forth in the 2001 Loan Agreement;
(4) WHEREAS, in order to provide notice of the security interests in the
Collateral given by TACT to LENDER under the 2001 Loan Agreement, there have
been filed the following UCC-1 Financing Statements:
(a) UCC-l Financing Statement #125608 filed in the Office of the New
York Secretary of State on June 28,2001, against TACT (as debtor)
under its name "THE A CONSULTING TEAM, INC.", and in favor of
LENDER (as secured party), and amended by UCC-3 Financing
Statement #232962 (Partial Release of Equipment collateral) filed
in the Office of the New York Secretary of State on November 28,
2001;
(b) ▇▇▇-▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ #▇▇ ▇▇ ▇▇▇▇▇ filed in the Office of the
City Register of New York County (New York) on July 3, 2001,
against TACT (as debtor) under its name "THE A CONSULTING TEAM,
INC.", and in favor of LENDER (as secured party);
(c) UCC-1 Financin2 Statement #2052495 filed in the Office of the
Department of Revenue (New Jersey Secretary of State) on June 29,
2001, against TACT (as debtor) under its name THE A CONSULTING
TEAM, INC.", and in favor of LENDER (as secured party);
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(5) WHEREAS, in order to further secure TACT's payment and performance
obligations under the 2001 Loan Agreement, LENDER received, among other things,
the following guaranties and/or support and/or security agreements:
(a) a certain single instrument entitled "Guaranty of Payment and
Performance" (the "Individual Guaranty") dated as of June 27,2001
and given to LENDER by SHMUEL BEN TOV (the "Individual
Guarantor");
(b) a certain single instrument entitled "Pledge Security Agreement"
(the "Pledge Agreement") dated as of June 27, 2001 and given to
LENDER by the Individual Guarantor;
(c) a certain single instrument entitled "Validity and Support
Agreement" (the "Validity and Support Agreement") dated as of
June 27, 2001 and given to LENDER by the Individual Guarantor (in
such capacity sometimes called the "Support Guarantor" and/or the
"Validity Guarantor" in the 2001 Loan Agreement, both such terms
"Support Guarantor" and the "Validity Guarantor" being included
within the term "Individual Guarantor" as used in this
Modification);
(d) a certain single instrument entitled "Guaranty of Payment and
Performance" (the "Corporate Guaranty") dated as of June 27,2001
and given to LENDER by TACT SOFTWARE, INC. (the "Corporate
Guarantor");
(e) a certain single instrument entitled "General Security Agreement"
(the "Security Guaranty") dated as of June 27, 2001 and given to
LENDER by the Corporate Guarantor;
(6) WHEREAS, in order to provide notice of the security interests in the
collateral given by the Individual Guarantor to LENDER under the Pledge
Agreement, there have been filed the following UCC-1 Financing Statements:
(a) UCC-1 Financing Statement #125611 filed in the Office of the New
York Secretary of State on June 28, 2001, against the Individual
Guarantor (as debtor) under his name "▇▇▇ TOV, ▇▇▇▇▇▇", and in
favor of LENDER (as secured party);
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(b) UCC-1 Financing Statement #41183-0221 filed in the Office of the
Clerk of Westchester County (New York) on July 2, 2001, against
the Individual Guarantor (as debtor) under his name "▇▇▇ TOV,
▇▇▇▇▇▇" and in favor of LENDER (as secured party);
(7) WHEREAS, in order to secure the Corporate Guarantor's payment and
performance obligations under the Corporate Guaranty and the Security Agreement,
the Corporate Guarantor provided LENDER with the Collateral as more fully
defined and set forth in the Security Agreement;
(8) WHEREAS, as permitted by Section 14.20 of the 2001 Loan Agreement, the
Corporate Guarantor has been dissolved and is no longer active or in existence;
(9) WHEREAS, TACT has requested that LENDER modify the 2001 Loan Agreement
and the documents related thereto in the following manner:
(a) TACT has requested that LENDER modify the 2001 Loan Agreement so
that TACT will be permitted to acquire the stock of IOT pursuant
to the terms and conditions of a certain Stock Purchase Agreement
dated as of June 28, 2002 (the "Stock Purchase Agreement");
(b) TACT has requested that LENDER modify the 2001 Loan Agreement so
that TACT will be permitted to pay the $650,000 balance owed
under the Stock Purchase Agreement on a non-interest bearing
basis and in accordance with the following four
non-interest-bearing principal installments: the sums of
$140,000, $210,000, $100,000 and $200,000 to be made,
respectively, on the 45th day after the date hereof, August 12,
2002, April 1, 2003, April 1, 2004 and January 2, 2005;
(c) TACT has requested that LENDER modify the 2001 Loan Agreement so
that TACT will be permitted to pay scheduled payments due on debt
of 153,545.00 (the "Permitted Zielczynski Debt") owed to Piotr
a/k/a ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ("Zielczynski"), payable at the rate of
$5,000 per month (plus interest thereon);
(d) TACT has requested that LENDER modify the 2001 Loan Agreement so
that, after giving effect to TACT's acquisition of the stock of
IOT pursuant to the Stock Purchase Agreement, those Receivables
of such
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entity which would otherwise be considered "Eligible Receivables"
for lending purposes under the 2001 Loan Agreement be deemed
"Eligible Receivables" for purposes of the 2001 Loan Agreement;
(e) TACT has requested that LENDER modify the 2001 Loan Agreement so
that TACT may purchase as treasury stock up to $200,000 of its
own stock using proceeds from a $439,000 federal tax refund which
TACT has received;
(f) TACT has requested that LENDER modify the 2001 Loan Agreement so
that the "Core EBITDA" covenant set forth therein be modified;
(g) TACT has requested that LENDER modify the Individual Guaranty so
that the Individual Guarantor's maximum liability thereunder
would be reduced from $1,000,000 to $400,000 and upon
satisfaction of certain conditions released; and
(h) TACT has requested that LENDER modify the Pledge Agreement so
that the "Pledge Amount" as defined in Section I.A.10 thereof
would be reduced from $700,000 to $350,000 and upon satisfaction
of certain conditions released;
(10) WHEREAS, TACT has requested that LENDER reflect all the foregoing
modifications by a written amendment (i.e., this Modification) of the 2001 Loan
Agreement;
(11) WHEREAS, LENDER is willing to do the foregoing, but only if the
conditions contained in this Modification are satisfied, such conditions
expressly including the condition that TACT and IOT each be considered the
"BORROWER" under the 2001 Loan Agreement, on a joint and several basis, each
having joint and several liability for the payment and the performance of the
Obligations defined therein;
(12) WHEREAS, in order to induce LENDER to enter into this Modification,
TACT and IOT are willing to execute this Modification and comply with the
provisions hereof; and
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(13) WHEREAS, TACT and IOT each represents that its execution of this
Modification and its performance of the covenants and terms contained herein
will inure to its economic benefit and will be in furtherance of its corporate
purposes;
NOW, THEREFORE, in consideration of the premises and the covenants
contained in this Modification and for other good and valuable consideration,
TACT, IOT and LENDER do hereby agree as follows:
ARTICLE I
AMENDMENT OF THE 2001 LOAN AGREEMENT
1.1 Unless otherwise specifically defined herein, all terms defined in
Article I of the 2001 Loan Agreement shall have the same meanings herein as
those given therein.
1.2 Any time the term "Agreement" appears in the 2001 Loan Agreement, that
term shall collectively mean the following:
(a) the June 27, 2001 Loan and Security Agreement; as heretofore
amended by
(b) that certain instrument of modification dated as of March 25,2002
and entitled "First Amendment to the Loan and Security
Agreement"; as amended by
(c) this Modification; as amended by
(d) any other extensions, modifications, or amendments made from time
to time hereafter.
1.3 Any time the term "Borrower" appears in the 2001 Loan Agreement, that
term shall collectively mean both TACT and IOT (it being intended that, on and
after the date hereof,
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TACT and IOT shall be co-Borrowers under the 2001 Loan Agreement and each shall
have joint and several liability for the payment and performance of all
Obligations as defined therein).
1.4 Any time the term "Collateral" appears in the 2001 Loan Agreement, that
term shall mean all of the property and interests of TACT and IOT in the
property described in Article 5 of the 2001 Loan Agreement, except as set forth
in Article 5(J), and all other personal Property of TACT and IOT and interests
of TACT and IOT in personal Property that now or hereafter secures the payment
and performance of any of the Obligations pursuant to any of the Loan Documents
or otherwise, including, without limitation, any proceeds and insurance proceeds
of the foregoing, it being understood that both TACT and IOT are now providing
"Collateral" under the 2001 Loan Agreement.
1.5 Any time the term "Revolving Note" appears in the 2001 Loan Agreement,
that term shall collectively mean all of the following (it being intended that,
on and after the date hereof, the Revolving Note defined in Section 1.54 and
described in Section 2.5 of the 2001 Loan Agreement shall consist of BORROWER's
substitute "master" Restated and Amended Revolving Note dated as of even date
herewith [such substitute "master" Restated and Amended Revolving Note being
more fully described in Article II below] and all extensions, modifications,
refinancings, renewals, substitutions, replacements and/or redatings thereof and
by records of LENDER):
(a) BORROWER's "master" Restated and Amended Revolving Note dated as
of even date herewith; and
(b) any extensions, modifications, refinancings, renewals,
substitutions, replacements and/or redatings of such "master"
Restated and Amended Revolving Note made from time to time
hereafter; and
(c) the records of LENDER described in Section 1.7 of this
Modification.
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1.6 Section 1.15 of the 2001 Loan Agreement is hereby amended so that,
effective the date hereof, said Section 1.15 shall now provide as follows (it
being intended by such amendment to reflect the fact that, effective the date
hereof, the definition of "Core EBITDA" has been amended to reflect TACT's
acquisition of the stock of IOT pursuant to the terms and conditions of the
Stock Purchase Agreement):
1.15 "Core EBITDA" shall mean the
consolidated total income of THE A CONSULTING
TEAM, INC., and its subsidiaries (including
INTERNATIONAL OBJECT TECHNOLOGY, INC.), excluding,
however, any income/loss attributable to Always-On
Software, Inc., and Methoda, Ltd., whether by
ownership or otherwise) before interest expense,
Collateral Management Fee, Facility Fee, loan
modification fee of $20,000, taxes, depreciation,
any non-cash writedowns of goodwill and
amortization (other than any writeoffs occurring
after April 1, 2001 with respect to any assets
other than trade Receivables owned by THE A
CONSULTING TEAM, INC., and INTERNATIONAL OBJECT
TECHNOLOGY, INC., on the date hereof), all
calculated in accordance with Generally Accepted
Accounting Principles.
1.7 Section 2.5 of the 2001 Loan Agreement is hereby amended so that,
effective the date hereof, said Section 2.5 shall now provide as follows (it
being intended by such amendment to reflect the fact that, effective the date
hereof, the records of LENDER shall also evidence the outstanding amount of the
Revolving Loan):
2.5 Evidence of Borrower's Obligations.
(a) Borrower's joint and several
obligation to pay principal of, and interest
on, the Revolving Advances made to Borrower
shall be evidenced by the Revolving Note
executed by Borrower and delivered to Lender,
as such note may from time to time be
extended, modified, refinanced, renewed,
substituted, replaced and/or redated with the
written consent of Lender.
(b) In addition to being evidenced by
the Revolving Note, all Revolving Advances
made by Lender under the Revolving Loan and
all interest due on the Revolving Loan and
all other
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amounts due under the Revolving Loan and this
Agreement and all payments made on account of
principal and/or interest and/or such other
amounts may be entered by Lender on its
records. The aggregate unpaid principal
and/or interest and/or other amounts entered
and shown on Lender's records shall further
evidence the principal and/or interest and/or
other amounts owing and unpaid on the
Revolving Loan and this Agreement.
(c) Lender may from time to time render
a statement of the aforementioned records. If
Borrower fails to object to the statement
within thirty (30) days after it is received
by Borrower, it shall be deemed to be an
account stated and binding upon Borrower,
absent manifest error. Notwithstanding the
foregoing, Lender's failure to enter on such
records the date and amount of any Revolving
Advance or unpaid interest or other amounts
shall not, however, limit or otherwise affect
the obligations of Borrower under this
Agreement to repay the principal amount of
the Revolving Advances made by Lender to
Borrower under the Revolving Loan, together
with all interest accruing and other amounts
due thereon.
1.8 (a) Section 15.1 of the 2001 Loan Agreement is hereby amended by
LENDER's hereby giving its consent to TACT's acquisition of the stock of IOT
pursuant to the terms and conditions of the Stock Purchase Agreement, including
those provisions which require TACT to be indebted to the sellers under the
Stock Purchase Agreement (such sellers being set forth on Schedule "A" attached
hereto and hereinafter the "Sellers") in an amount not exceeding $650,000,
payable on a non-interest-bearing deferred basis (except in the event of a
default in which case interest shall accrue at the rate of 5% per annum on the
principal amount subject to such default), but only to the extent that the
repayment of such $650,000 has been subordinated to the payment of the
Obligations pursuant to the terms of a Subordination Agreement dated on or about
even date herewith (the "Sellers' Subordination Agreement").
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(b) Section 15.1 of the 2001 Loan Agreement is hereby further amended
by LENDER's hereby giving its consent to TACT's becoming indebted to Zielczynski
in the amount of the Permitted Zielczynski Debt, payable with interest on a
deferred basis, but only to the extent that the repayment of the Permitted
Zielczynski Debt has been subordinated to the payment of the Obligations
pursuant to the terms of a Subordination Agreement ("Zielczynski's Subordination
Agreement") dated on or about even date herewith.
1.9 Section 15.2 of the 2001 Loan Agreement is hereby amended by (a)
LENDER's hereby giving its consent to TACT's acquisition of the stock of IOT
pursuant to the terms and conditions of the Stock Purchase Agreement and (b)
LENDER's agreement that TACT's aforesaid acquisition of the stock of IOT is not
a violation of such section
1.10 Section 15.23 of the 2001 Loan Agreement is hereby amended so that,
effective the date hereof, said Section 15.23 shall now provide as follows (it
being intended by such amendment to reflect the fact that, effective the date
hereof the definition of Core EBITDA covenants have been amended to reflect
TACT's acquisition of the stock of IOT):
15.23 Core EBITDA. Shall maintain Core
EBITDA of no less than the amounts set forth
below, tested quarterly at the end of each
calendar quarter during the periods set forth
below:
Amount Time Period
------ -----------
$100,000.00 From January 1, 2002 through
and including March 31, 2002
$200,000.00 From January 1, 2002 through
and including June 30, 2002
$400,000.00 From January 1, 2002 through
and including September 30,
2002
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$600,000.00 From January 1, 2002 through
and including December 31,
2002
$200,000.00 From January 1, 2003 through
and including March 31, 2003
$400,000.00 From January 1, 2003 through
and including June 30, 2003
$600,000.00 From January 1, 2003 through
and including September 30,
2003
$900,000.00 From January 1, 2003 through
and including December 31,
2003
$300,000.00 From January 1, 2004 through
and including March 31, 2004
and at all times thereafter
1.11 The 2001 Loan Agreement is hereby amended by the addition of a new
section, Section 15.26, SO as to provide as follows (it being intended by such
amendment to reflect the fact that, effective the date hereof, TACT may not make
payments owed to the Sellers under the Stock Purchase Agreement if, after giving
effect to such payments, an Event of Default will occur under the 2001 Loan
Agreement):
15.26 Stock Purchase Agreement. Shall
not make payments remaining owing under that
certain Stock Purchase Agreement dated as of
June 28, 2002 (the "Stock Purchase
Agreement") pursuant to which THE A
CONSULTING TEAM, INC., has acquired the stock
of International Object Technology, Inc. (a)
if an Event of Default exists and is
continuing at the time of any such payment
(not including any technical or reporting
defaults as to which any applicable cure
period has not yet expired) or (b) if, after
giving effect to any such payment, Borrower
would fail to have a positive borrowing base
availability.
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1.12 The 2001 Loan Agreement is hereby amended by the addition of a new
section, Section 15.27, so as to provide as follows (it being intended by such
amendment to reflect the fact that, effective the date hereof, TACT may not make
payments owed to Zielczynski under the Permitted Zielczynski Debt if, after
giving effect to such payments, an Event of Default will occur under the 2001
Loan Agreement):
15.27 Permitted Zielczynski Debt. Shall
not make payments remaining owing to Piotr
a/k/a ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ("Zielczynski") under
that certain Promissory Note dated as of July
19, 2002 (the "Permitted Zielczynski Debt")
(a) if an Event of Default exists and is
continuing at the time of any such payment
(not including any technical or reporting
defaults as to which any applicable cure
period has not yet expired) or (b) if, after
giving effect to any such payment, Borrower
would fail to have a positive borrowing base
availability.
1.13 Section 19.1 of the 2001 Loan Agreement is hereby amended by the
addition of a new subsection (o) and a new subsection (p) which provide as
follows (it being intended by such amendment to reflect the facts that TACT's
making payments under the Stock Purchase Agreement is not an Event of Default
under the 2001 Loan Agreement so long as such payments are permitted under the
Sellers' Subordination Agreement and TACT's making payments under the Permitted
Zielczynski Debt is not an Event of Default under the 2001 Loan Agreement so
long as such payments are permitted under Zielczynski's Subordination
Agreement):
(o) if Borrower makes any payment under
the Stock Purchase Agreement which violates
or would cause a violation of Section 15.26.
(p) if Borrower makes any payment under
the Permitted Zielczynski Debt which violates
or would cause a violation of Section 15.27.
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ARTICLE II
RESTATEMENT/AMENDMENT OF "MASTER" REVOLVING NOTE
2.1 (a) BORROWER agrees to execute on the date hereof a new "master"
revolving note evidencing the amendments to the Revolving Loan and the Loan
Documents which are made and effected by this Modification.
(b) Such restated and amended "master" Revolving Note is the Restated and
Amended Revolving Note referenced in Article I of this Modification and, on and
after the date hereof, shall constitute the Revolving Note described in Section
2.5 of the 2001 Loan Agreement and, together with the records of LENDER, shall
evidence BORROWER's obligation to pay any advances now or hereafter outstanding
under the Revolving Loan.
(c) Such Restated and Amended Revolving Note restates, replaces and
substitutes for the Revolving Note executed by BORROWER and dated as of June 27,
2001.
ARTICLE III
MISCELLANEOUS
3.1 To the extent necessary, the 2001 Loan Agreement is hereby amended to
allow TACT to purchase as treasury stock up to $200,000 of its own stock using
proceeds from a $439,000 federal tax refund which TACT has received.
3.2 On and after the date hereof, the rights and obligations of LENDER and
BORROWER shall be determined by reference to the 2001 Loan Agreement as now
amended by this Modification and as amended from time to time hereafter.
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3.3 All of the Loan Documents described and defined in the 2001 Loan
Agreement shall be deemed to be amended in a manner consistent hereto and
conforming herewith.
3.4 On and after the date hereof, the rights and obligations of LENDER and
BORROWER shall be determined by reference to the 2001 Loan Agreement and the
Loan Documents described and defined therein as all have been amended by this
Modification and as amended from time to time hereafter.
3.5 (a) In order to induce LENDER to enter into this Modification and to
perform its obligations hereunder, TACT reaffirms except as set forth on Exhibit
"A" attached hereto (said exhibit representing updates of Schedules attached to
the 2002 Loan Agreement) all of the representations and warranties which TACT
made to LENDER in the 2001 Loan Agreement. Except as set forth on Exhibit "A"
attached hereto, all such representations and warranties remain true and
accurate as of the date hereof. All such representations and warranties shall
survive the execution and delivery of this Modification.
(b) In order to induce LENDER to enter into this Modification and to
perform its obligations hereunder, IOT hereby gives to LENDER the same
representations and warranties (as qualified by the applicable disclosure
schedules thereto) which IOT made to TACT in the Stock Purchase Agreement as if
each such representation and warranty were set forth herein. All such
representations and warranties (as so qualified by the aforementioned disclosure
schedules) remain true and accurate as of the date hereof All such
representations and warranties shall survive the execution and delivery of this
Modification.
3.6 As a condition of this Modification, BORROWER shall deliver to LENDER:
(a) this Modification;
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(b) the Restated and Amended Revolving Note;
(c) corporate resolutions of TACT;
(d) corporate resolutions of IOT;
(e) UCC-1 Financing Statements which IOT authorizes LENDER to
prepare and file;
(f) the Consent of the Individual Guarantor, the Support Guarantor
and the Validity Guarantor, together with his reaffirmation and
modification of the Individual Guaranty, his reaffirmation and
modification of the Pledge Agreement and his reaffirmation of the
Validity and Support Agreement;
(g) TACT's certification as to a true and complete copy of the Stock
Purchase Agreement;
(h) TACT's certification as to a true and complete copy of the note
evidencing the Permitted Zielczynski Debt;
(i) the Sellers' Subordination Agreement with copy of Stock Purchase
Agreement attached thereto as Exhibit "A";
(j) Zielczynski's Subordination Agreement with his promissory note
attached thereto as Exhibit "A";
(k) TACT's certification as to copies of all due diligence searches
and reports obtained by TACT against IOT relating to good
standing, qualifications to do business, UCC Financing
Statements, liens and judgments of record, it being understood
that the UCC held by Sovereign Bank and filed on June 28, 1999
with the Department of Revenue in the Office of the New Jersey
Secretary of State will be forthwith terminated;
(l) the certification of TACT and IOT that the transactions
contemplated by the Stock Purchase Agreement and the transaction
underlying TACT's incurrence of the Permitted Zielczynski Debt
have been completed and that TACT is the sole owner of the issued
and outstanding shares of stock of IOT; and
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(m) an opinion of BORROWER's and IOT's counsel in form satisfactory
to LENDER.
3.7 (a) BORROWER agrees that, as of the close of business on June 20,2002,
there is now due and outstanding on the 2001 Loan Agreement the principal sum of
$1,709,642.32 is due in cash borrowings under the Revolving Loan (accrued
interest for the month of May 2002 having been paid in full).
(b) BORROWER agrees that there exist no defenses, setoffs, recoupments,
counterclaims or any other claims or charges against the amounts due to LENDER
under the Revolving Loan or the 2001 Loan Agreement.
(c) BORROWER agrees that there exist no claims or charges against any
actions or inactions of LENDER in extending the 2001 Loan Agreement or m making
disbursements under the 2001 Loan Agreement or in otherwise administering the
2001 Loan Agreement.
3.8 EXCEPT AS SPECIFICALLY SET FORTH IN THIS MODIFICATION, NOTHING IN THIS
MODIFICATION IS INTENDED TO IN ANY WAY ALTER OR EFFECT THE TERMS AND PROVISIONS
OF THE 2001 LOAN AGREEMENT, INCLUDING BUT NOT LIMITED TO BORROWER'S PAYMENT AND
PERFORMANCE OF THE REVOLVING LOAN AND THE VARIOUS PROVISIONS CONTAINED IN ALL OF
THE FOREGOING.
3.9 NOTHING IN THIS MODIFICATION IS INTENDED TO IN ANY WAY RELEASE OR
LESSEN THE COLLATERAL GIVEN TO SECURE THE PAYMENT AND THE PERFORMANCE OF THE
2001 LOAN AGREEMENT, THE REVOLVING LOAN AND THE OTHER OBLIGATIONS. RATHER THIS
MODIFICATION IS INTENDED TO INCREASE THE COLLATERAL GIVEN TO SECURE THE PAYMENT
AND THE PERFORMANCE OF THE
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2001 LOAN AGREEMENT, THE REVOLVING LOAN AND THE OTHER OBLIGATIONS BY THE
INCLUSION OF COLLATERAL NOW GIVEN BY IOT TO LENDER.
3.10 No later than July 22,2002, BORROWER shall pay LENDER a fee of $20,000
for its execution of this Modification.
3.11 BORROWER shall pay the legal and all due diligence expenses of LENDER
for the preparation of this Modification.
3.12 ALL OBLIGATIONS OF TACT AND IOT UNDER THE 2001 LOAN AGREEMENT AND THE
OTHER DOCUMENTS REFERRED TO THEREIN ARE JOINT AND SEVERAL IN ALL RESPECTS. IOT
IS A PARTY TO SUCH DOCUMENTS AS IF IT WAS ORIGINALLY SIGNATORY THERETO.
3.13 This Agreement maybe executed in several counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument.
THIS IS THE LAST PAGE OF THIS INSTRUMENT.
THE NEXT PAGE IS THE SIGNATURE PAGE.
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IN WITNESS WHEREOF, TACT, IOT and LENDER have caused this Modification
Agreement to be executed by their respective duly authorized officers on date
and year first above written.
ATTEST: THE A CONSULTING TEAM, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------- -------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive
Officer
ATTEST: INTERNATIONAL OBJECT
TECHNOLOGY, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive
Officer
KELTIC FINANCIAL PARTNERS, LP
By: KELTIC FINANCIAL SERVICES LLC
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Managing Member
18
The A Consulting Team, Inc. shall furnish to the Commission upon request any
schedule or exhibit omitted from this filing.
