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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DELSOFT CONSULTING, INC.
(Exact name of registrant as specified in its charter)
Georgia 22-274288
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
106 Bombay Lane
Roswell, Georgia 30076
(Address of Principal Executive Offices)
Consulting Agreement of Tech Fund
(Full title of the plan)
Delsoft Employee Stock Option Plan
(Full title of the plan)
Employee Agreements
(Full title of the plan)
Briskin & Rinde, L.C.
400 Perimeter Center Terrace
Suite 900
Atlanta, GA 30076
(Name and address of agent for service)
(770) 410-1555
(Telephone number, including area code, of agent for service)
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Copies to:
Jeffrey A. Rinde, Esq.
Bondy & Schloss LLP
6 East 43rd Street, 25th Floor
New York, New York 10017
Phone: (212) 661-3535
Fax: (212) 972-1677
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If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with Dividend or
Interest Reinvestment Plans, check the following line: X
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Title of Each Amount to be Proposed Proposed Registration Fee
Class of Registered Maximum Maximum
Securities to be Offering Price Aggregate
Registered Per Share Offering Price
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, 1,100,000(1) $.16 $ 176,000
par value $0.01
per share
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, 2,000,000(2) $2.00 $ 4,000,000
par value $0.01
per share
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock 4,650,000(3) $2.00 $ 9,300,000
par value $0.01
per share
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL 7,750,500 $13,476,000 $3,557.66
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents 1,100,000 shares to be issued to Tech Fund upon exercise of an
option granted at $0.16/share as compensation for services rendered pursuant to
consulting agreement.
(2) Represents 2,000,000 shares issuable upon exercise of options granted at
$2.00/share to certain employees of the Registrant.
(3) Represents 4,650,000 shares issuable upon exercise of options granted to
certain officers and directors of the Registrant. 250,000 of the shares are
issuable upon exercise of options granted at $2.00/share. 4,400,000 of the
shares are issuable upon exercise of options granted at $0.24/share.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
In connection with the Registration Statement on Form S-8 (the
"Registration Statement") filed by Delsoft Consulting, Inc. (the "Registrant"),
a Georgia Corporation on
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January 5, 2000, the following shall constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933, as amended:
This Registration Statement covers 7,750,500 shares of the Company's
common stock, par value $.01 per share ("Common Stock").
Item 1. Plan Information
(a) General Plan Information
The Registrant and Tech Fund entered into a consulting
agreement (the "Tech Fund Plan") the nature and purpose of which were to
compensate Tech Fund for corporate consulting services in the area of business
development in the European information technology marketplace and
identification of potential acquisition targets for the Registrant. The Tech
Fund Plan provides for issuance of an option to Tech Fund's principal, Keith
Hall, to purchase 1,100,000 shares at the exercise price of $0.16 per share. The
option expires five years after the date of grant.
The Registrant has adopted an Employee Stock Option Plan (the
"Employee Plan") providing for the issuance of up to an aggregate of 2,000,000
shares of the Company's common stock, par value $0.01 per share, at the exercise
price of 100% of the fair market value of the Company's common stock at the time
the option(s) is granted. The options expire ten years after the date of grant.
The Registrant and certain directors and officers have entered
into employment agreements (collectively the "D & O Plan") pursuant to which
said directors and officers were granted options to purchase an aggregate of
4,650,000 shares (the "Shares") of the Company's common stock, par value $0.01
per share. Options to purchase 125,000 of the Shares at the exercise price of
$2.00 per share were granted on July 1, 1996 and expire on June 30, 2006.
Options to purchase 125,000 of the Shares at the exercise price of $2.00 per
share were granted on November 19, 1999, and expire on November 18, 2009.
Options to purchase 4,200,000 of the Shares at the exercise price of $0.24 were
granted on November 19, 1999, and expire on November 18, 1999. All of the
options granted under the D & O Plan are subject to forfeiture unless exercised
within ninety days of the date of termination of employment.
The Tech Fund Plan, the Employee Plan, and the D & O Plan are
sometimes hereinafter collectively referred to as the "Plans", and Keith Hall,
the participants in the Employee Stock Option Plan, and the participants in the
D & O Plan are collectively referred to as the "Participants".
The Plans are not subject to any of the provisions of the
Employee Retirement Income Security Act of 1974.
The name, address and telephone number of the Registrant are
as set forth on the facing page of this Registration Statement. Additional
information about the Plans may be obtained from the Registrant by the
Participants.
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(b) Securities to be Offered
(1) Shares of Common Stock, par value $0.01 per share
(c) Employees Who May Participate in the Plan
Keith Hall, a consultant (an "employee" defined by General Instruction
A.1(a) of Form S-8) to the Registrant is the only eligible participant in the
Tech Fund Plan. Certain employees of the Registrant who are granted options
pursuant to the Employee Plan are the only eligible participants in the Employee
Plan. Certain directors and officers of the Registrant that have entered into
employment agreements with the Registrant are the only eligible participants in
the D & O Plan.
(d) Purchase of Securities Pursuant to the Plans and Payment for
Securities Offered.
(1)&(2) The Participants in the Tech Fund Plan, Employee
Plan, and D & O Plan will be issued shares of common
stock upon the exercise of their respective stock
options.
(3) Contributions by the Participants are not applicable.
(4) No contributions by the Registrant other than the
issuance of shares is applicable.
(5) Reports to the Participants as to the amount and
status of their account under the Plans will not be
made
(6) The shares issuable pursuant to the Plans will be
newly issued shares of the Registrant.
(e) There are no resale restrictions on the securities offered.
(f) The Plans are not qualified under Section 401(a) of the
Internal Revenue Code and the Participants will recognize
ordinary income at the time of the issuance of their shares
measured on the date of exercise by the difference between the
aggregate exercise price and the fair market value of the
Registrant's Common Stock which is acquired by the
Participants.
(g) Investment of Funds
Not Applicable
(h) Withdrawal from Plans; Assignment of Contract
(1) Withdrawal from Plans - Not Applicable
(2) The Participants interest in the Plans may not be
assigned.
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(i) Forfeiture and Penalties
Unexercised and non-vested options cancelled out. There are no
provisions for forfeiture or penalties under the Tech Fund
Plan and the Employee Plan. The options granted pursuant to
the D & O Plan are forfeited if non-vested and/or not
exercised within ninety days after termination of employment.
(j) Charges and Deductions and Liens Therefore
There are no charges or deductions that may be made against
the Participants' interests in the Plans.
Item 2. Registrant Information and Employee Plan Annual Information.
Registrant shall provide to the Participants, without charge,
upon written or oral request, the documents incorporated by reference in Item 3
of Part II of this Registration Statement. The Registrant shall also provide to
the Participants, without charge, upon written or oral request, all of the
documents required to be delivered to the Participants pursuant to Rule 428(b).
Any and all such requests shall be directed to the Registrant at the address set
forth on the cover page hereof. Its telephone number is (770) 518-4289.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Commission are
incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the
year ended June 30, 1999;
(b) The Registrant's Quarterly Report on Form 10-Q for
the three months ended September 30, 1999;
(c) All other reports and forms filed by the Registrant
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the date hereof; and
(d) The description of the Registrant's common stock as
contained in its Registration Statement on Form 10-SB
as filed with the Securities and Exchange Commission
on May 5, 1998.
In addition, all documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities registered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of the filing of such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the shareholders. Holders of Common
Stock do not have any cumulative voting rights for the election of directors.
Holders of Common Stock are entitled to receive ratably such dividends, if any,
as may be prescribed by the Board of Directors from time to time out of funds
legally available for that purpose. Upon any liquidation, dissolution or winding
up of the Company, whether voluntary or involuntary, holders of Common Stock are
entitled to receive pro rata all assets of the Company available for
distribution to its shareholders
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after payment or provision for payment of debts and other liabilities of the
Company. The shares of Common Stock are neither redeemable nor convertible. All
of the outstanding shares of Common Stock are fully paid and non-assessable.
Item 5. Interests of Named Experts and Counsel.
Jeffrey A. Rinde, a partner in Bondy & Schloss LLP, owns 2,041,837
shares of Common Stock of the Registrant and Options to purchase 350,000 shares
of Common Stock.
Item 6. Indemnification of Directors and Officers.
The Georgia Business Corporation Code (the "GBCC"), in general, allows
corporations to indemnify their directors and officers against expenses actual
and reasonable in connection with a proceeding, if the person acted in good
faith and in a manner the person reasonably believed to be in, or not opposed
to, the best interests of the corporation. In the case of a criminal action or
proceeding, the director or officer must have had no reasonable cause to believe
that the person's conduct was unlawful. The GBCC also provides that
indemnification is not exclusive, and a corporation may make any other or
further indemnification under any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, however no indemnification may be made, if
a judgment or other final adjudication establishes such director or officers'
actions or omissions to act, were material to the cause of action so adjudicated
and constitute: (a) a violation of the criminal law, unless the director or
officer had reasonable cause to believe his/her conduct was lawful or had no
reasonable cause to believe his/her conduct was unlawful; (b) a transaction from
which the director or officer derived an improper personal benefit; (c) in the
case of a director, a director held liable for an unlawful distribution, as
defined by the GBCC; or (d) willful misconduct or a conscious disregard for the
best interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in the
right of shareholder.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
3.1 Articles of Incorporation (Incorporated by reference to exhibits to the
Form 10-SB, filed with the Securities and Exchange Commission on May 5,
1998).
3.2 Amendment to Articles of Incorporation (Incorporated by reference to
exhibits to the Form 10-SB, filed with the Securities and Exchange
Commission on May 5, 1998).
3.3 Bylaws (Incorporated by reference to the Form 10-SB, filed with the
Securities and Exchange Commission on May 5, 1998).
5.1 * Opinion of Bondy & Schloss LLP as to the legality of the securities
being offered.
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10.4 Employment Agreement, dated July 1, 1996, by and between the Registrant
and Adil Choksey (Incorporated by reference to exhibits to the Form
10-SB, filed with the Securities and Exchange Commission on May 5,
1998)
10.6 Employment Agreement, dated July 1, 1996, by and between the Registrant
and Jeffrey A. Rinde (Incorporated by reference to exhibits to the Form
10-SB, filed with the Securities and Exchange Commission on May 5,
1998)
10.8 Consulting Agreement, dated June 18, 1997, by and between the
Registrant and Benjamin J. Giacchino (Incorporated by reference to
exhibits to the Form 10-SB, filed with the Securities and Exchange
Commission on May 5, 1998)
10.9 DelSoft Consulting, Inc. Stock Option Plan (Incorporated by reference
to exhibits to the Form 10-SB, filed with the Securities and Exchange
Commission on May 5, 1998)
10.10 * Consulting Agreement, dated December 1, 1999, by and between the
Registrant and Tech Fund
10.11 * Employment Agreement, dated September 19, 1999, by and between the
Registrant and Brian Koch
10.12 * Amended Employment Agreement, dated November 19, 1999, by and between
the Registrant and Adil Choksey
10.13 * Amended Employment Agreement, dated November 29, 1999, by and between
the Registrant and Benjamin J. Giacchino
23.1 * Consent of JH Cohn LLP.
23.2 * Consent of Bondy & Schloss LLP (included in Exhibit 5.1).
24 * Powers of Attorney (included on p. II-4 of this Registration
Statement).
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* Filed herewith.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement to include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material changes to such
information in the Registration Statement; (2) That, for the
purpose of determining any liability
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under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) To remove from registration by
means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions of Item 6 of this Registration
Statement, or otherwise, the Registrant has been advised that, in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Roswell, Georgia on the 5th day of January, 2000.
DELSOFT CONSULTING, INC.
By: /s/ Brian Koch
--------------------------
Brian Koch
President
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Brian Koch, his true and lawful
attorneys-in-fact and agent with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) of and supplements to
this Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, to all intents and purposes and as fully
as they might or could do in person, hereby ratifying and confirming all that
such attorneys-in-fact and agent, or his substitute, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 5th day of Janaury, 2000.
Signature Title
/s/ Brian Koch President and Director
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Brian Koch
/s/ Adil Choksey Secretary and Director
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Adil Choksey
/s/ Benjamin Giacchino Director
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Benjamin Giacchino
II-4
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EXHIBIT INDEX
Exhibit
No.
3.1 Articles of Incorporation (Incorporated by reference to exhibits to the
Form 10-SB, filed with the Securities and Exchange Commission on May 5,
1998).
3.2 Amendment to Articles of Incorporation (Incorporated by reference to
exhibits to the Form 10-SB, filed with the Securities and Exchange
Commission on May 5, 1998).
3.3 Bylaws (Incorporated by reference to exhibits to the Form 10-SB, filed
with the Securities and Exchange Commission on May 5, 1998).
5.1 * Opinion of Bondy & Schloss LLP as to the legality of the securities
being offered.
10.4 Employment Agreement, dated July 1, 1996, by and between the Registrant
and Adil Choksey (Incorporated by reference to exhibits to the Form
10-SB, filed with the Securities and Exchange Commission on May 5,
1998)
10.6 Employment Agreement, dated July 1, 1996, by and between the Registrant
and Jeffrey A. Rinde (Incorporated by reference to exhibits to the Form
10-SB, filed with the Securities and Exchange Commission on May 5,
1998)
10.8 Consulting Agreement, dated June 18, 1997, by and between the
Registrant and Benjamin J. Giacchino (Incorporated by reference to
exhibits to the Form 10-SB, filed with the Securities and Exchange
Commission on May 5, 1998)
10.9 DelSoft Consulting, Inc. Stock Option Plan (Incorporated by reference
to exhibits to the Form 10-SB, filed with the Securities and Exchange
Commission on May 5, 1998)
10.10 * Consulting Agreement, dated December 1, 1999, by and between the
Registrant and Tech Fund
10.11 * Employment Agreement, dated September 19, 1999, by and between the
Registrant and Brian Koch
10.12 * Amended Employment Agreement, dated November 19, 1999, by and between
the Registrant and Adil Choksey
<PAGE>
10.13 * Amended Employment Agreement, dated November 29, 1999, by and between
the Registrant and Benjamin J. Giacchino
23.1 * Consent of JH Cohn LLP.
23.2 * Consent of Bondy & Schloss LLP (included in Exhibit 5.1).
24 * Powers of Attorney (included on p. II-4 of this Registration
Statement).
* Filed herewith.
<PAGE>
[Bondy & Schloss LLP Letterhead]
January 5, 2000
Delsoft Consulting Inc.
106 Bombay Lane
Roswell, GA 30076
Ladies and Gentlemen:
We have acted as counsel to Delsoft Corporation, a Georgia
corporation (the "Company"), in connection with a Registration Statement on Form
S-8 (the "Registration Statement") being filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to the
registration of an aggregate 7,750,500 shares (the "Shares") of Common Stock,
$0.01 par value per share, issuable to Keith Hall and certain employees,
directors, and officers of the Company, pursuant to agreements with the Company
(the "Agreements").
In connection with the foregoing, we have examined originals
or copies, satisfactory to us, of all such corporate records and of all such
agreements, certificates and other documents as we have deemed relevant and
necessary as a basis for the opinion hereinafter expressed. In such examination,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity with the original
documents of all documents submitted to us as copies. As to any facts material
to such opinion, we have, to the extent that relevant facts were not
independently established by us, relied on certificates of public officials and
certificates of officers or other representatives of the Company.
Based upon and subject to the foregoing, we are of the opinion
that, when issued and paid for in accordance with the Agreements, the Shares
will be validly issued, fully paid and, non-assessable.
We are members of the bar of the State of New York and are not
licensed or admitted to practice law in any other jurisdiction. Accordingly, we
express no opinion with respect to the laws of any jurisdiction other than the
State of New York and the federal laws of the United States.
We hereby consent to the use of our opinion as herein set
forth as an exhibit to the Registration Statement. In giving such consent, we do
not thereby concede that we are in
<PAGE>
Delsoft Corporation, Inc.
January 5, 2000
Page 2
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations thereunder.
Very truly yours,
Bondy & Schloss LLP
JAR/ttt
Enclosures
<PAGE>
CONSULTING AGREEMENT OF TECH FUND
THIS AGREEMENT (the "Agreement"), is made and entered into as of this 1st
day of December, 1999, by and between TECH FUND, with offices at Chateau
Perigord Appt. 275, 6 Lacets St. Leon, MC 98000 Monaco ("Consultant") and
DELSOFT CONSULTING, INC., with offices at 106 Bombay Lane, Roswell, Georgia
("Company") (together the "Parties").
WHEREAS, the Parties desire to formalize the terms and conditions under
which Consultant shall provide consulting services to the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and other valid consideration, receipt of which is hereby
acknowledged, the Parties agree as follows:
1. Term of Agreement and Renewal.
The Agreement shall remain in effect from the date of execution hereof
through the expiration of a one year period, and may be renewed upon the mutual
consent of the Parties.
2. Nature of Services to be Rendered.
Consultant shall provide the Company with corporate consulting services in
the area of business development in the global IT marketplace. Consultant shall
use its best efforts to: (i) introduce the Company to other companies in need
of IT consultants (including other IT companies); and (ii) locate and identify
to the Company private and/or public IT consulting companies for potential
merger with or acquisition by the Company.
3. Compensation.
As compensation for its consulting services rendered hereunder, the
Company shall pay to Consultant and Consultant shall accept the following:
(i) The Company, simultaneously with the execution of this Agreement,
shall issue to Company's principal, Keith Hall, an option to purchase a total
of one million one hundred thousand (1,100,000) shares of the Company's
restricted common stock, at $0.16 per share (the "Option"), with "piggy back"
registration rights.; and
(ii) In connection with the location and identification of potential
candidates for corporate merger and/or acquisition, the Consultant shall be
entitled to receive compensation in an amount equal to ten percent (10%) of the
value of the total price paid by the Company for any completed merger or
acquisition with an identity located and/or identified by the Consultant (the
"Transaction"). One-half of the Consultant's fee shall be paid in cash and
one-half in shares of the Company's restricted stock with "piggyback"
registration rights. In the event no cash is paid in the Transaction, then the
entire fee shall be payable in shares of the Company's stock; should the
Transaction involve all cash, then the entire fee to the Consultant shall be
payable in cash.
4. Warranties and Representations of the Consultant.
In order to induce the Company to enter into this Agreement, the
Consultant hereby makes the following unconditional warranties and
representations:
(a) Consultant is not now a party to a consulting agreement with any other
corporation or entity involved in a business which is the same as or similar to
the Company's.
<PAGE>
(b) Consultant is permitted to provide consulting services to any
corporation or entity engaged in a business identical or similar to the
Company's, provided, however, that the Consultant shall keep confidential all
information it receives from the Company which is of a confidential or
proprietary nature, without disclosure to or for the benefit of any third
parties.
5. Warranties and Representations of the Company.
In order to induce the Consultant to enter into this Agreement, the Company
hereby makes the following unconditional warranties and representations:
(a) The Company is not a party to any other contract or agreement with
terms similar to those contained herein.
(b) All payments required to be made to Consultant hereunder will be made
on time and in accordance with the payment terms and conditions set forth
herein.
(c) The Company acknowledges that Consultant does not guarantee its
ability to cause the consumption of any contract or merger or acquisition with
any corporate candidate.
6. Issuance of Option to Consultant.
The Company shall cause to be issued and delivered to Consultant the
Option bearing the signatures of its President and Secretary. The Company shall
take all corporate action necessary for the Option issuance to be legally valid
and irrevocable, including obtaining the prior unanimous written consent of its
Board of Directors.
7. Registration Obligations.
Should the Company file any registration statement with the SEC for any of
its securities to yield gross proceeds of at lease $ 1,000,000, at any time
subsequent to the date of execution of this Agreement, the Company shall
provide prior written notice of its intention to Consultant and to any
subsequent holder of any portion of the Shares and/or Option, at written
request and direction of the Consultant and/or subsequent holders, shall
thereupon be included in such registration statement.
8. Waiver of Registration Obligations.
In the event a NASD-registered broker-dealer shall execute a letter of
intent to conduct a firm commitment underwriting of the Company's securities,
with anticipated gross proceeds of at least $1,000,000, and shall require that
all of the Company's shareholders waive registration rights, Consultant will
provide a written waiver of its registration right herein provided.
9. Expense Reimbursement.
Consultant shall be entitled to receive cash reimbursement, and the
Company shall provide cash reimbursement, of all cash expenses paid by
Consultant on behalf of the Company in performance of its duties hereunder.
Such expenses shall include without limitation expenses for communications and
travel. In no event, however, will Consultant incur on behalf of the Company an
expense in excess of $500 without the prior written consent of the Company.
10. Indemnification of Consultant by the Company.
The Company shall indemnify and hold harmless Consultant and its
principals from and against any and all liabilities and damages in connection
with the Company's ownership and operation and, without limiting the foregoing,
shall pay the Consultant's legal fees and expenses if the Company is named as a
defendant in any proceedings brought in connection with the Company.
<PAGE>
11. Indemnification of the Company by the Consultant.
Consultant shall indemnify and hold harmless the Company and its
principals from and against any and all liabilities and damages arising out of
actions taken by Consultant in connection with its services as consultant,
which actions were not authorized by the Company.
12. Arbitration.
Any and all conflicts, disputes and disagreements arising out of or in
connection with any aspect of the Agreement shall be subject to arbitration in
accordance with the rules of The American Arbitration Association then in
effect. Written Notice of Dispute shall be served by either Party upon the
other Party at its address set forth herein or such other address as it shall
have provided in writing for that purpose, and the arbitration date shall be
set no later than two months from the date such Notice is served. The dispute
shall be submitted to The American Arbitration Association headquarters located
in Atlanta, Georgia. The Parties designate the Superior Court, Fulton County as
the court in which any arbitration award shall be subject to confirmation, and
will abide by such confirmation.
13. Entire Understanding/Incorporation of other Documents.
This Agreement contains the entire understanding of the Parties with
regard to the subject matter hereof, superseding any and all prior agreements
or understandings whether oral or written, and no further or additional
agreements, promises, representations or covenants may be inferred or construed
to exist between the Parties.
14. No Assignment or Delegation Without Prior Approval.
No portion of the Agreement or any of its provisions may be assigned, nor
obligations delegated, to any other person or party without the prior written
consent of the Parties except by operation of law or as otherwise set forth
herein.
15. Survival of Agreement.
The Agreement and all of its terms shall inure to the benefit of any
permitted assignees of or lawful successors to either Party.
16. No Amendment Except in Writing.
Neither the Agreement nor any of its provisions may be altered or amended
except in a dated writing signed by the Parties.
17. Waiver of Breach.
No waiver of any breach of any provision hereof shall be deemed to
constitute a continuing waiver or a waiver of any other portion of the
Agreement.
18. Severability of the Agreement.
Except as otherwise provided herein, if any provision hereof is deemed by
arbitration or a court of competent jurisdiction to be legally unenforceable or
void, such provision shall be stricken from the Agreement and the remainder
hereof shall remain in full force and effect.
19. Governing Law.
The Agreement and its provisions shall be construed in accordance with and
pursuant to, and governed by, the laws of the State of Georgia, as applicable
to agreements to be performed solely within the State of Georgia, without
regard to its conflict-of-laws provisions then in effect.
<PAGE>
20. No Construction Against Drafter.
The Agreement shall be construed without regard to any presumption or
other rule requiring construction against the Party causing the drafting
hereof.
IN WITNESS WHEREOF, the Parties have executed the Agreement as of the
date first above written.
DELSOFT CONSULTING, INC. TECH FUND
By: /s/ Brian Koch By: /s/ Keith Hall
-------------------------- ---------------------------
Brian Koch, President Keith Hall, President
<PAGE>
COMMON STOCK OPTION
(Nontransferable)
DELSOFT CONSULTING, INC.
(a Georgia Corporation)
FOR VALUE RECEIVED, DELSOFT CONSULTING, INC. (the "Corporation") hereby
grants to KEITH HALL (the "Holder"), subject to the terms and conditions
hereinafter set forth, the option to purchase an aggregate of one million one
hundred thousand (1,100,000) shares of the common stock without par value (the
"Common Stock") of the Corporation.
1. Term and Exercise.
(a) This Option may be exercised by the Holder for all, but not less
than all, of the Shares of the Common Stock subject to this Option at any time
prior to the expiration of this Option, which expiration shall occur five (5)
years from the date of the issuance of this Option.
(b) The Holder shall exercise this Option by surrender to the
Corporation of this Option with the Purchase Form attached hereto as Exhibit
"A", duly executed, accompanied by payment in cash or by check of the price
hereinafter set forth for the Shares of the Common Stock so purchased (the
"Option Price").
(c) Within ten (10) business days following the exercise of this Option
by the Holder as hereinabove provided, the Corporation shall cause to be issued
in the name of and delivered to the Holder a certificate or certificates
representing the Shares of the Common Stock so purchased. The Corporation
covenants and agrees that all of the Shares of the Common Stock which may be
issued and delivered upon the due exercise of this Option by the Holder shall,
upon such issuance and delivery, be fully paid and nonassessable.
2. Option Price. The Option Price at which the Shares of the Common Stock
shall be purchased upon the exercise of this Option shall be $0.16 per share.
3. Expiration of Option on Certain Additional Events. Anything contained
in this Option to the contrary notwithstanding, this Option shall expire and be
and become null and void unless, in the event of any consolidation of the
Corporation with, or merger of the Corporation into, any other corporation
(other than a merger with a wholly owned subsidiary or in which the Corporation
is the surviving corporation); any transfer of all or substantially all of the
assets of the Corporation; or the dissolution, liquidation or winding-up of the
Corporation, this Option shall have been duly exercised, as hereinabove
provided, prior to the date which is the record date for determining the holders
of Common Stock entitled to vote upon such consolidation, merger, transfer,
dissolution,
<PAGE>
liquidation or winding-up. The Corporation shall give to the Holder at least
ninety (90) days' prior notice of the date which shall be the record date for
determining the holders of Common Stock entitled to vote upon such
consolidation, merger, transfer, dissolution, liquidation or winding-up.
4. Nontransferability. This Option shall not be assigned, pledged,
hypothecated, sold or otherwise transferred or encumbered by the Holder.
Notwithstanding the foregoing, this Option shall be exercisable upon the death
or permanent disability of the Holder by Holder's heirs, personal
representatives, guardians, beneficiaries, devisees, or otherwise.
5. Notices. Any notice or other communication to the Corporation or to the
Holder of this Option shall be in writing and any such notice or communication
shall be deemed duly given or made if personally delivered or if mailed, by
registered or certified mail, postage prepaid, and if to the Corporation: to the
Corporation's office at 106 Bombay Lane, Roswell, Georgia 30076, and if to such
Holder: to Keith Hall, Chateau Perigord Appt. 275, 6 Lacets St. Leon, MC 98000
Monaco, or at such other address as the Corporation or the Holder may designate
by notice to the other.
6. Governing Law. This Option shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia.
7. Successors and Assigns. All of the provisions of this Option shall be
binding upon the Corporation and its successors and assigns and the Holder, his
heirs, personal representatives and guardians.
IN WITNESS WHEREOF, DELSOFT CONSULTING, INC. has caused this Option to be
signed in its Corporate name under its corporate seal by its President and its
corporate seal to be hereunto affixed and its execution hereof to be attested by
its Secretary, as of this 1st day of December, 1999.
ATTEST: DELSOFT CONSULTING, INC.
/s/ Ben Giacchino By: /s/ Brian Koch
- ------------------------- ---------------------------
Ben Giacchino Brian Koch, President
ACCEPTED: Date:
- ------------------------ -------------------------
Keith Hall, Holder
<PAGE>
THIS EMPLOYMENT AGREEMENT is being entered into as of this 19th day of
September, 1999, by and between DELSOFT CONSULTING, INC., a Georgia corporation
with principal offices at 106 Bombay Lane, Roswell, Georgia 30076 (hereinafter
called the "Company"), and BRIAN KOCH, residing at 3762 Hannah Ct., City of
Carmel, State of Indiana, (hereinafter called the "Employee").
1.POSITION; DUTIES.
Employee shall serve as President of the Company. As such, Employee shal
report to the Board of Driectors of the Company. Employee shall use his best
efforts fo perform the duties generally associated with his position as
President of the Company and as are reasonably assigned by the Board of
Directors of the Company. Employee shall in good faith devote his full time and
best efforts to performance of his duties hereunder, and shall not actively
engage in any other business in any capacity whatsoever, except upon the written
approval of the Board of Directors of the Company.
2.TERM OF EMPLOYMENT AGREEMENT; EXTENSION.
The term of this Employment Agreement shall begin as of September 19,
1999, and terminate as of the close of business on September 18, 2002. On
September 19, 2002, and on each anniversary thereof, the term of this
Employement Agreement shall be automatically extended one year unless, not less
than 90 days prior thereto, the Company notifies Employee that it is electing
not to so extend the term of this Employment Agreement. The term of this
Employment Agreement shall automatically terminate upon any termination of this
Employment Agreement pursuant to Section 4.
3.COMPENSATION AND BENEFITS.
a.Base Salary. Employee's salary shall not be less than $146,000
per year, payable in accordance with the Company's normal pay practices.
Employee shall be entitled to an annual increase equal to 5% of his base salary
for the prior year.
b.Bonus. Employee shall receive an option, in substantially the
form attached hereto as Schedule A, to purchase two million (2,000,000) shares
of Company stock at a price equal to 100% of the fair market value of the
Company stock on the calendar date Employee is granted such option (the
"Option"). Notwithstanding the foregoing, in the event the Company or Employee
terminates this Agreement pursuant to Section 4 herein, this Option, or any
unexercised portion thereof, shall be immediately null and void.
c.Fringe Benefits. Employee shall be entitled to participate and
receive benefits under the Company employee and fringe benefit plans and
arrangements. Employee will also participate in the Company Director and Officer
Insurance (to be obtained as soon as reasonably practicable after the date first
stated hereinabove), plus two times Base Salary of life insurance.
d.Company Automobile. Employee will be provided with a Company
automobile in accordance with the Company Car policy.
e.Vacation. Employee shall be eligible for four (4) weeks of
vacation, plus five (5) sick days and Company holidays, annually. In addition,
Employee will be included in the Company Vacation Carry-over Policy.
<PAGE>
4.TERMINATION.
a.Death. This Employment Agreement shall terminate upon Employee's
death. Upon such termination, the Company shall pay to Employee's estate (or as
Employee or his estate shall otherwise direct) Employee's base salary through
the end of the calendar month in which Employee's death occurs and will use its
reasonable efforts to assist in the prompt processing of claims under applicable
employee benefit plans.
b.Cause. This Employment Agreement may be terminated by the
Company by written notice to Employee for cause as defined in this section.
Cause means willful misconduct, injurious to the Company and of a material
nature, gross negligence of duties, or material breach of this Agreement.
c.Other. The Employee may terminate this Employment Agreement by
a 60-day written notice to the Company at any time. If Employee, however, elects
to terminate this Employment Agreement during its initial term, Employee will
not be entitled to receive any severance compensation.
d.Election not to extend. If the Company elects not to extend the
term of this Employment Agreement pursuant to Section 2, the Company shall pay
Employee his base salary in accordance with Section 3(a) for not less than three
(3) months following the Date of Termination and continue Employee's health and
welfare benefits for six (6) months following the Date of Termination on
substantially the same basis as existed on the Date of Termination.
e.Date and Effect of Termination. The Date of Termination of this
Employment Agreement shall be (i) in the case of Section 4(a), the date of
Employee's death; (ii) in the case of a termination of this Employment Agreement
pursuant to Sections 4(b) or 4(c), the date specified in the Company's or
Employee's notice of such termination; or (iii) in the case of the Company's
election not to extend the term of this Employment Agreement pursuant to Section
2, the last date of the term of this Employment Agreement. Upon any termination
of this Employment Agreement pursuant to this Section 4 or election not to
extend the term of this Employment Agreement pursuant to Section 2, Employee
shall not be entitled to any further payments or benefits of any nature pursuant
to this Employment Agreement, or as a result of such termination or election,
except as specifically provided for in this Employment Agreement. Sections 6, 7,
8, and 9 (and to the extent applicable thereto, Sections 10, 11, and 12) shall
survive any termination of this Employment Agreement pursuant to this Section 4
or election not to extend the term of this Employment Agreement pursuant to
Section 2.
5.CONFIDENTIALITY.
During the term of this Employement Agreement and for a period of two
(2) years following the termination of such employment for any reason
whatsoever, Employee will not divulge to anyone or use for his own benefit or
the benefit of any third party any confidential information of the Company or
any of its subsidiaries (including, without limitation, all technical designs
and specifications, trade secrets, financial data and marketing strategies)
learned by Employee in connection with the performace of his duties hereunder
unless (a) any such information becomes generally available to the public other
than as a result of disclosure by Employee, and/or (b) Employee is requested or
required (by oral question, interrogatories, requests for information or
documents, subpeona, civil investigative demand or similar process) to disclose
any such information, in which case Employee will (i) promptly notify the
Company of such request or requirement, so that the Company may seek an
appropriate protective order, (ii) cooperate with the Company, at its expense,
in seeking such an order. Upon termination of this Employement Agreement,
Employee shall promptly deliver to the Company all confidential information of
the Company or any of its subsidiaries.
2
<PAGE>
6.NONSOLICITATION OF EMPLOYEES.
During the term of this Employment Agreement and for a period of two (2)
years following the Date of Termination of this Employment Agreement for any
reason whatsover, Employee will not, either directly or indirectly, on the
Employee's own behalf on behalf of others, solicit, divert or hire, any person
under contract with (directly and/or indirectly) and/or employed by, the Company
at any location where the Employee performed services for the Corporation or any
person with whom the Employee had regular contact in the course of his
employment by the Company, whether or not the contract with or employment of any
such person is pursuant to a written agreement, for a determined period or at
will.
7. NONSOLICITATION OF CUSTOMERS.
During the term of this Employment Agreement and for a period of two (2)
years following the Date of Termination of this Employment Agreeement for any
reason whatsoever, Employee will not (except on behalf of or with the
prior written consent of the Corporation), either directly or indirectly, on the
Employee's own behalf or on behalf of others: solicit, divert, appropriate to,
or accept on behalf of any business which competes with, or is substantially the
same as, the business conducted by or contemplated by the Company or any of its
subsidiaries during the term of this Employment Agreement, any business from any
customer or actively sought prespective customer of the Company with whom the
Employee has had regular contact, and/or whose contacts with the Company have
been supervised by the Employee.
8. EQUITABLE RELIEF.
Employee: (i) acknowledges that any breach or attempted breach of the
provisions of any of Sections 6, 7, or 8 will cause immediate and irreparable
harm to the Company and that a remedy at law for any such breach or attempted
breach shall be inadequate; (ii) agrees that the Company shall be entitled to
temporary or permanent injuctive relief with respect to any such breach or
attempted breach (in addition to any other remedies, at law or in equity as may
be available to it with respect to any such breach or attempted breach); and
(iii) agrees to waive any requirements for the securing or posting of any bond
in connection with the obtaining of any such injuctive or other equitable
relief. If any term, provision, convenant or restriction in Sections 6, 7 or 8
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, and such court of competent jurisdiction is so authorized by
state or common law, such term, provision, convenant or restriction shall
be deemed amended to the extent required to render it valid, binding and
enforceable.
9. SUCCESSORS; AMENDMENT; NOTICE.
This Employment Agreement shall be binding upon and shall inure to the
benefit of the Company and its successors and assigns. This Employment Agreement
shall be binding upon Employee and shall inure to the benefit of his heirs,
executors, administrators and legal representatives, but shall not be assignable
by Employee. This Employment Agreement may be amended or altered only by the
written agreement of the Company and Employee. All notices or other
communication permitted or required under this Employment Agreement shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed (certified or registered mail, postage prepaid, return receipt requested)
to Employee or the Company at the respective addresses on the first page of this
Employment Agreement, or such other address as shall be furnished in writing by
Employee or the Company to the other.
10. ENTIRE AGREEMENT.
This Employment Agreement embodies the entire agreement and
understanding between Employee and the Company with respect to the subject
matter hereof.
3
<PAGE>
11. SEVERABILITY.
If any term, provision, convenant or restriction of this Employment
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, convenants and
restrictions of this Employment Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
12. GOVERNING LAW.
This Employment Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in its name and behalf by its duly authorized officer and the Employee has
hereunto set his hand, all on the day and year first above written.
WITNESS: DELSOFT CONSULTING, INC.
/s/ Ben Giacchino /s/ Jeffrey A. Rinde
- --------------------- -------------------------
Ben Giacchino
WITNESS: DELSOFT CONSULTING, INC.
/s/ Ben Giacchino /s/ Brian Koch
- --------------------- -------------------------
Ben Giacchino Brian Koch
4
<PAGE>
EXHIBIT "A"
DELSOFT CONSULTING, INC. STOCK OPTION
A. A STOCK OPTION for a total of two million (2,000,000) shares of Common
Stock, no par value, of Delsoft Consulting, Inc., a Georgia corporation (herein
the "Company") is hereby granted to BRIAN KOCH (herein the "Optionee"), subject
in all respects to the terms and provisions of the Delsoft Consulting, Inc.
Stock Option Plan (herein the "Plan"), effective May 1, 1997, which has been
adopted by the Company and which is incorporated herein by reference.
B. The option price is one hundred and ten percent of the fair market
value on the date of grant.
C. This Option may only be exercised as follows:
(i) up to 200,000 shares immediately;
(ii) up to 800,000 shares on or after September 19, 2000;
(iii) up to 1,400,000 shares on or after September 19, 2001; and
(iv) up to 2,000,000 shares on or after September 19, 2002.
D. This Option may not be exercised if the issuance of shares of Common
Stock of the Company upon such exercise would constitute a violation of any
applicable Federal or State securities or other law or valid regulation. The
Optionee, as a condition to his exercise of this Option, shall represent to the
Company that the shares of Common Stock of the Company that he acquires under
this Option are being acquired by him for investment and not with a present view
to distribution or resale, unless counsel for the Company is then of the opinion
that such a representation is not required under the Securities Act of 1933 or
any other applicable law, regulation, or rule of any governmental agency.
E. This Option may not be transferred in any manner otherwise than by
will or the laws of descent and distribution, and may be exercised during the
lifetime of the Optionee only by him. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors, and assigns of the
Optionee.
F. This Option may not be exercised more than ten (10) years from the date
of its grant, and may be exercised during such term only in accordance with the
terms of the Plan.
Dated: October 28, 1999
Delsoft Consulting, Inc.
By: /s/ Jeffrey A. Rinde
----------------------
Jeffrey A. Rinde, CFO
ATTEST:
/s/ Ben Giacchino
- ---------------------
Ben Giacchino
<PAGE>
The Optionee acknowledges receipt of a copy of the Plan, a copy of which
is annexed hereto, and represents that he is familiar with the terms and
provisions of the Plan. The Optionee hereby agrees to accept as binding,
conclusive, and final all decisions and interpretations of the Board of
Directors and, when applicable, the Stock Option Plan Committee, upon any
questions arising under the Plan. As a condition to the issuance of shares of
Common Stock of the Company under this Option, the Optionee authorizes the
Company to withhold in accordance with applicable law from any regular cash
compensation payable to him any taxes required to be withheld by the Company
under Federal, State, or Local law as a result of his exercise of this Option.
Dated: , 1999
By: /s/ Brian Koch
---------------------------------
Optionee
<PAGE>
AMENDED EMPLOYMENT AGREEMENT
THIS AMENDED EMPLOYMENT AGREEMENT is being entered into as of this 19th day
of November, 1999, by and between DELSOFT CONSULTING, INC., a Georgia
corporation with principal offices at 106 Bombay Lane, Roswell, Georgia 30076
(hereinafter called the "Company"), and ADIL CHOKSEY, residing at 980 White Oak
Pass, City of Alpharetta, State of Georgia, (hereinafter called the "Employee").
1. POSITION; DUTIES.
Employee shall serve as Executive Vice President of the Company. As such,
Employee shall report to the Board of Directors of the Company. Employee shall
use his best efforts to perform the duties generally associated with his
position as Executive Vice President of the Company and as are reasonably
assigned by the Board of Directors of the Company. Employee shall in good faith
devote his full time and best efforts to performance of his duties hereunder,
and shall not actively engage in any other business in any capacity whatsoever,
except upon the written approval of the Board of Directors of the Company.
2. TERM OF EMPLOYMENT AGREEMENT; EXTENSION.
The term of this Amended Employment Agreement shall begin as of December 1,
1999, and terminate as of the close of business on November 30, 2002. On
December 1, 2002, and on each anniversary thereof, the term of this Amended
Employment Agreement shall be automatically extended one year unless, not less
than 90 days prior thereto, the Company notifies Employee that it is electing
not to so extend the term of this Amended Employment Agreement. The term of this
Amended Employment Agreement shall automatically terminate upon any termination
of this Amended Employment Agreement pursuant to Section 4.
3. COMPENSATION AND BENEFITS.
a. Base Salary. Employee's salary shall not be less than $142,000 per year,
payable in accordance with the Company's normal pay practices. Employee shall be
entitled to an annual increase equal to 5% of his base salary for the prior
year.
b. Bonus. Employee shall continue to receive on an annual basis an option,
in substantially the form attached hereto as Schedule A, to purchase twenty five
thousand (25,000) shares of Company stock at a price equal to the fair market
value of the Company stock on the calendar date Employee was granted such
option.
In addition, Employee shall immediately receive an option, in substantially
the form attached hereto as Schedule B, to purchase two million four hundred
thousand (2,400,000) shares of Company stock at a price equal to 110% of the
fair market value of the Company stock on the calendar date Employee is granted
such option.
c. Fringe Benefits. Employee shall be entitled to participate and receive
benefits under the Company employee and fringe benefit plans and arrangements.
Employee will also participate in the Company Director and Officer Insurance,
plus two times Base Salary of life insurance.
d. Company Automobile. Employee will be provided with a Company automobile
in accordance with the Company Car policy.
e. Vacation. Employee shall be eligible for four (4) weeks of vacation,
plus five (5) sick days and Company holidays, annually. In addition, Employee
will be included in the Company Vacation Carry-over Policy.
<PAGE>
4. Termination.
a. Death. This Amended Employment Agreement shall terminate upon Employee's
death. Upon such termination, the Company shall pay to Employee's estate (or as
Employee or his estate shall otherwise direct) Employee's base salary through
the end of the calendar month in which Employee's death occurs and will use its
reasonable efforts to assist in the prompt processing of claims under applicable
employee benefit plans.
b. Cause. This Amended Employment Agreement may be terminated by the
Company by written notice to Employee for cause as defined in this section.
Cause means willful misconduct, injurious to the Company and of a material
nature, gross negligence of duties, or material breach of this Agreement.
c. Other. The Employee may terminate this Amended Employment Agreement by a
90-day written notice to the Company at any time.
d. Election not to extend. If the Company elects not to extend the term of
this Amended Employment Agreement pursuant to Section 2, the Company shall pay
Employee his base salary in accordance with Section 3(a) for twelve (12) months
following the Date of Termination and continue Employee's health and welfare
benefits for six (6) months following the Date of Termination on substantially
the same basis as existed on the Date of Termination.
e. Date and Effect of Termination. The Date of Termination of this Amended
Employment Agreement shall be (i) in the case of Section 4(a), the date of
Employee's death; (ii) in the case of a termination of this Employment Agreement
pursuant to Sections 4(b) or 4(c), the date specified in the Company's or
Employee's notice of such temination; or (iii) in the case of the Company's
election not to extend the term of this Amended Employment Agreement pursuant to
Section 2, the last date of the term of this Amended Employment Agreement. Upon
any termination of this Amended Employment Agreement pursuant to this Section 4
or election not to extend the term of this Amended Employment Agreement pursuant
to Section 2, Employee shall not be entitled to any further payments or benefits
of any nature pursuant to this Amended Employment Agreement, or as a result of
such termination or election, except as specifically provided for in this
Amended Employment Agreement. Sections 5, 6, 7, 8, and 9 (and to the extent
applicable thereto, Sections 10, 11, 12, and 13) shall survive any termination
of this Amended Employment Agreement pursuant to this Section 4 or election not
to extend the term of this Amended Employment Agreement pursuant to Section 2.
5. CONFIDENTIALITY.
During the term of this Amended Employment Agreement and for a period of
two (2) years following the termination of such employment for any reason
whatsoever, Employee will not divulge to anyone or use for his own benefit or
the benefit of any third party any confidential information of the Company or
any of its subsidiaries (including, without limitation, all technical designs
and specifications, trade secrets, financial data and marketing strategies)
learned by Employee in connection with the performance of his duties hereunder
unless (a) any such information becomes generally available to the public other
than as a result of disclosure by Employee, and/or (b) Employee is requested or
required (by oral question, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any such information, in which case Employee will (i) promptly notify the
Company of such request or requirement, so that the Company may seek an
appropriate protective order, and (ii) cooperate with the Company, at its
expense, in seeking such an order. Upon termination of this Amended Employment
Agreement, Employee shall promptly deliver to the Company all confidential
information of the Company or any of its subsidiaries.
<PAGE>
6. NONCOMPETITION.
During the term of this Amended Employment Agreement and for a period of
two (2) years following the termination of such employment for any reason
whatsoever, the Employee will not, directly or indirectly, engage or participate
in as owner, officer, director, manager, employee, consultant or otherwise, or
have any financial interest in, or aid or assist anyone else in the conduct of,
any business which competes with, or is substantially the same as, the business
conducted by or contemplated by the Company or any of its subsidiaries during
the term of this Amended Employment Agreement; provided, however, that
Employee's ownership of not more than 5 percent (5%) of the securities of any
corporation or other entity which are traded on any national securities market
or in the over-the-counter market shall not constitute a violation of this
Section 6.
7. NONSOLICITATION OF EMPLOYEES.
During the term of this Amended Employment Agreement and for a period of
two (2) years following the Date of Termination of this Amended Employment
Agreement for any reason whatsoever, Employee will not, either directly or
indirectly, on the Employee's own behalf or on behalf of others, solicit, divert
or hire, any person employed by the Company at any location where the Employee
performed services for the Corporation or any person with whom the Employee had
regular contact in the course of his employment by the Company, whether or not
the employment of any such person is pursuant to a written agreement, for a
determined period or at will.
8. NONSOLICITATION OF CUSTOMERS.
During the term of this Amended Employment Agreement and for a period of
two (2) years following the Date of Termination of this Amended Employment
Agreement for any reason whatsoever, Employee will not (except on behalf of or
with the prior written consent of the Corporation), either directly or
indirectly, on the Employee's own behalf or on behalf of others, (1) solicit,
divert, appropriate to, or accept on behalf of any business which competes with,
or is substantially the same as, the business conducted by or contemplated by
the Company or any of its subsidiaries during the term of this Amended
Employment Agreement, any business from any customer or actively sought
prospective customer of the Company with whom the Employee has had regular
contact, and/or whose contacts with the Company have been supervised by the
Employee.
9. EQUITABLE RELIEF.
Employee: (i) acknowledges that any breach or attempted breach of the
provisions of any of Sections 5, 6, 7, or 8 will cause immediate and irreparable
harm to the Company and that a remedy at law for any such breach or attempted
breach shall be inadequate; (ii) agrees that the Company shall be entitled to
temporary or permanent injunctive relief with respect to any such breach or
attempted breach (in addition to any other remedies, at law or in equity as may
be available to it with respect to any such breach or attempted breach); and
(iii) agrees to waive any requirements for the securing or posting of any bond
in connection with the obtaining of any such injunctive or other equitable
relief. If any term, provision, covenant or restriction in Sections 5, 6, 7 or 8
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, and such court of competent jurisdiction is so authorized by
state or common law, such term, provision, covenant or restriction shall be
deemed amended to the extent required to render it valid, binding and
enforceable.
10. SUCCESSORS, AMENDMENT; NOTICE.
This Amended Employment Agreement shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns. This Amended
Employment Agreement shall be binding upon Employee and shall inure to the
benefit of his heirs, executors, administrators and legal representatives, but
<PAGE>
shall not be assignable by Employee. This Amended Employment Agreement may be
amended or altered only by the written agreement of the Company and Employee.
All notices or other communication permitted or required under this Amended
Employment Agreement shall be in writing and shall be deemed to have been duly
given if delivered by hand or mailed (certified or registered mail, postage
prepaid, return receipt requested) to Employee or the Company at the respective
addresses on the first page of this Amended Employment Agreement, or such other
address as shall be furnished in writing by Employee or the Company to the
other.
11. ENTIRE AGREEMENT.
This Amended Employment Agreement embodies the entire agreement and
understanding between Employee and the Company with respect to the subject
matter hereof and expressly supersedes the Employment Agreement between Employee
and the Company dated July 1, 1996.
12. SEVERABILITY.
If any term, provision, covenant or restriction of this Amended Employment
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amended Employment Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
13. GOVERNING LAW.
This Amended Employment Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws,
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
its name and behalf by its duly authorized officer and the Employee has hereunto
set his hand, all on the day and year first above written.
WITNESS: DELSOFT CONSULTING, INC.
/s/ Ben Giacchino /s/ Jeffrey A. Rinde
- ------------------------- --------------------------
Ben Giacchino
WITNESS:
/s/ Ben Giacchino /s/ Adil Choksey
- -------------------------- ---------------------------
Ben Giacchino Adil Choksey
<PAGE>
EXHIBIT "A"
DELSOFT CONSULTING, INC. STOCK OPTION
A. A STOCK OPTION for a total of two million four hundred thousand
(2,400,000) shares of Common Stock, no par value, of Delsoft Consulting, Inc., a
Georgia corporation (herein the "Company") is hereby granted to ADIL CHOKSEY
(herein the "Optionee"), subject in all respects to the terms and provisions of
the Delsoft Consulting, Inc. Stock Option Plan (herein the "Plan"), effective
May 1, 1997, which has been adopted by the Company and which is incorporated
herein by reference.
B. The option price is one hundred and ten percent of the fair market value
on the date of grant.
C. This Option may be exercised immediately,
D. This Option may not be exercised if the issuance of shares of Common
Stock of the Company upon such exercise would constitute a violation of any
applicable Federal or State securities or other law or valid regulation. The
Optionee, as a condition to his exercise of this Option, shall represent to the
Company that the shares of Common Stock of the Company that he acquires under
this Option are being acquired by him for investment and not with a present
view to distribution or resale, unless counsel for the Company is then of the
opinion that such a representation is not required under the Securities Act of
1933 or any other applicable law, regulation, or rule of any governmental
agency.
E. This Option may not be transferred in any manner otherwise than by will
or the laws of descent and distribution, and may be exercised during the
lifetime of the Optionee only by him. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors, and assigns of the
Optionee.
F. This Option may not be exercised more than ten (10) years from the date
of its grant, and may be exercised during such term only in accordance with the
terms of the Plan.
Dated: November 19, 1999
Delsoft Consulting, Inc.
By: /s/ Jeffrey A. Rinde
--------------------------
Jeffrey A. Rinde, CFO
ATTEST:
/s/ Ben Giacchino
- -----------------------
Ben Giacchino
<PAGE>
The Optionee acknowledges receipt of a copy of the Plan, a copy of which is
annexed hereto, and represents that he is familiar with the terms and provisions
of the Plan, The Optionee hereby agrees to accept as binding, conclusive, and
final all decisions and interpretations of the Board of Directors and, where
applicable, the Stock Option Plan Committee, upon any questions arising under
the Plan. As a condition to the issuance of shares of Common Stock of the
Company under this Option, the Optionee authorizes the Company to withhold in
accordance with applicable law from any regular cash compensation payable to him
any taxes required to be withheld by the Company under Federal, State, or Local
law as a result of his exercise of this Option.
Dated: ,1999
By:
------------------------
Optionee
<PAGE>
AMENDED EMPLOYMENT AGREEMENT
THIS AMENDED EMPLOYMENT AGREEMENT is being entered into as of this 29th day
of November, 1999, by and between DELSOFT CONSULTING, INC., a Georgia
corporation with principal offices at 106 Bombay Lane, Roswell, Georgia 30076
(hereinafter called the "Company"), and BENJAMIN GIACCHINO, residing at 404
Crabapple Springs Court, Woodstock, Georgia (hereinafter called the "Employee").
1. POSITION; DUTIES.
Employee shall handle Investor Relations for the Company. As such, Employee
shall report to the Board of Directors of the Company. Employee shall use his
best efforts to perform the duties generally associated with this position and
as are reasonably assigned by the Board of Directors of the Company. Employee
shall in good faith devote his full time and best efforts during regular
business hours to the performance of his duties hereunder, and shall not
actively engage in any other business in any capacity whatsoever, except upon
the written approval of the Board of Directors of the Company.
2. TERM OF EMPLOYMENT AGREEMENT; EXTENSION.
The term of this Amended Employment Agreement shall begin as of December 1,
1999, and terminate as of the close of business on November 30, 2002. On
December 1, 2002, and on each anniversary thereof, the term of this Amended
Employment Agreement shall be automatically extended one year unless, not less
than 90 days prior thereto, the Company notifies Employee that it is electing
not to so extend the term of this Amended Employment Agreement. The term of this
Amended Employment Agreement shall automatically terminate upon any termination
of this Amended Employment Agreement pursuant to Section 4.
3. COMPENSATION AND BENEFITS.
a. Base Salary. Employee's salary shall not be less than $142,000 per year,
payable in accordance with the Company's normal pay practices. Employee shall be
entitled to an annual increase equal to 5% of his base salary for the prior
year.
b. Bonus. Employee shall continue to receive on an annual basis an option,
in substantially the form attached hereto as Schedule A, to purchase twenty five
thousand (25,000) shares of Company stock at a price equal to the fair market
value of the Company stock on the calendar date Employee was granted such
option.
d. Fringe Benefits. Employee shall be entitled to participate and receive
benefits under the Company employee and fringe benefit plans and arrangements.
Employee will also participate in the Company Director and Officer Insurance,
plus two times Base Salary of life insurance.
d. Company Automobile. Employee will be provided with a Company automobile
in accordance with the Company Car policy.
e. Vacation. Employee shall be eligible for four (4) weeks of vacation,
plus five (5) sick days and Company holidays, annually. In addition, Employee
will be included in the Company Vacation Carry-over Policy.
<PAGE>
4. Termination.
a. Death. This Amended Employment Agreement shall terminate upon Employee's
death. Upon such termination, the Company shall pay to Employee's estate (or as
Employee or his estate shall otherwise direct) Employee's base salary through
the end of the calendar month in which Employee's death occurs and will use its
reasonable efforts to assist in the prompt processing of claims under applicable
employee benefit plans.
b. Cause. This Amended Employment Agreement may be terminated by the
Company by written notice to Employee for cause as defined in this section.
Cause means willful misconduct, injurious to the Company and of a material
nature, gross negligence of duties, or material breach of this Agreement.
c. Other. The Employee may terminate this Amended Employment Agreement by a
30 day written notice to the Company at any time. If the Employee elects to
terminate this Amended Employment Agreement, the Company shall pay Employee his
base salary in accordance with Section 3(a) for six (6) months following the
Date of Termination and continue Employee's health and welfare benefits for six
(6) months following the Date of Termination on substantially the same basis as
existed on the Date of Termination.
d. Election not to extend. If the Company elects not to extend the term of
this Amended Employment Agreement pursuant to Section 2, the Company shall pay
Employee his base salary in accordance with Section 3(a) for twelve (12) months
following the Date of Termination and continue Employee's health and welfare
benefits for six (6) months following the Date of Termination on substantially
the same basis as existed on the Date of Termination.
e. Date and Effect of Termination. The Date of Termination of this Amended
Employment Agreement shall be (i) in the case of Section 4(a), the date of
Employee's death; (ii) in the case of a termination of this Employment Agreement
pursuant to Sections 4(b) or 4(c), the date specified in the Company's or
Employee's notice of such termination; or (iii) in the case of the Company's
election not to extend the term of this Amended Employment Agreement pursuant to
Section 2, the last date of the term of this Amended Employment Agreement. Upon
any termination of this Amended Employment Agreement pursuant to this Section 4
or election not to extend the term of this Amended Employment Agreement pursuant
to Section 2, Employee shall not be entitled to any further payments or benefits
of any nature pursuant to this Amended Employment Agreement, or as a result of
such termination Or election, except as specifically provided for in this
Amended Employment Agreement. Sections 5, 6, 7, 8, and 9 (and to the extent
applicable thereto, Sections 10, 11, 12, and 13) shall survive any termination
of this Amended Employment Agreement pursuant to this Section 4 or election not
to extend the term of this Amended Employment Agreement pursuant to Section 2.
5. CONFIDENTIALITY.
During the term of this Amended Employment Agreement and for a period of
two (2) years following the termination of such employment for any reason
whatsoever, Employee will not divulge to anyone or use for his own benefit or
the benefit of any third party any confidential information of the Company or
any of its subsidiaries (including, without limitation, all technical designs
and specifications, trade secrets, financial data and marketing strategies)
learned by Employee in connection with the performance of his duties hereunder
unless (a) any such information becomes generally available to the public other
than as a result of disclosure by Employee, and/or (b) Employee is requested or
required (by oral question, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any such information, in which case Employee will (i) promptly notify the
Company of such request or requirement, so that the Company may seek an
appropriate protective order, and (ii) cooperate with the Company, at its
expense, in seeking such an order. Upon termination of this Amended Employment
Agreement, Employee shall promptly deliver to the Company all confidential
information of the Company or any of its subsidiaries.
<PAGE>
6. NONCOMPETITION.
During the term of this Amended Employment Agreement and for a period of
two (2) years following the termination of such employment for any reason
whatsoever, the Employee will not, directly or indirectly, engage or participate
in as owner, officer, director, manager, employee, consultant or otherwise, or
have any financial interest in, or aid or assist anyone else in the conduct of,
any business which competes with, or is substantially the same as, the business
conducted by or contemplated by the Company or any of its subsidiaries during
the term of this Amended Employment Agreement; provided, however, that
Employee's ownership of not more than 5 percent (5%) of the securities of any
corporation or other entity which are traded on any national securities market
or in the over-the-counter market shall not constitute a violation of this
Section 6.
7. NONSOLICITATION OF EMPLOYEES.
During the term of this Amended Employment Agreement and for a period of
two (2) years following the Date of Termination of this Amended Employment
Agreement for any reason whatsoever, Employee will not, either directly or
indirectly, on the Employee's own behalf or on behalf of others, solicit, divert
or hire, any person employed by the Company at any location where the Employee
performed services for the Corporation or any person with whom the Employee had
regular contact in the course of his employment by the Company, whether or not
the employment of any such person is pursuant to a written agreement, for a
determined period or at will.
8. NONSOLICITATION OF CUSTOMERS.
During the term of this Amended Employment Agreement and for a period of
two (2) years following the Date of Termination of this Amended Employment
Agreement for any reason whatsoever, Employee will not (except on behalf of or
with the prior written consent of the Corporation), either directly or
indirectly, on the Employee's own behalf or on behalf of others, (1) solicit,
divert, appropriate to, or accept on behalf of any business which competes with,
or is substantially the same as, the business conducted by or contemplated by
the Company or any of its subsidiaries during the term of this Amended
Employment Agreement, any business from any customer or actively sought
prospective customer of the Company with whom the Employee has had regular
contact, and/or whose contacts with the Company have been supervised by the
Employee.
9. EQUITABLE RELIEF.
Employee: (i) acknowledges that any breach or attempted breach of the
provisions of any of Sections 5, 6, 7, or 8 will cause immediate and irreparable
harm to the Company and that a remedy at law for any such breach or attempted
breach shall be inadequate; (ii) agrees that the Company shall be entitled to
temporary or permanent injunctive relief with respect to any such breach or
attempted breach (in addition to any other remedies, at law or in equity as may
be available to it with respect to any such breach or attempted breach); and
(iii) agrees to waive any requirements for the securing or posting of any bond
in connection with the obtaining of any such injunctive or other equitable
relief. If any term, provision, covenant or restriction in Sections 5, 6, 7 or 8
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, and such court of competent jurisdiction is so authorized by
state or common law, such term, provision, covenant or restriction shall be
deemed amended to the extent required to render it valid, binding and
enforceable.
10. SUCCESSORS; AMENDMENT; NOTICE.
This Amended Employment Agreement shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns. This Amended
Employment Agreement shall be binding upon Employee and shall inure to the
benefit of his heirs, executors, administrators and legal representatives, but
shall not be assignable by Employee. This Amended Employment Agreement may be
amended or altered
<PAGE>
only by the written agreement of the Company and Employee. All notices or other
communication permitted or required under this Amended Employment Agreement
shall be in writing and shall be deemed to have been duly given if delivered by
hand or mailed (certified or registered mail, postage prepaid, return receipt
requested) to Employee or the Company at the respective addresses onthe first
page of this Amended Employment Agreement, or such other address as shall be
furnished in writing by Employee or the Company to the other.
11. ENTIRE AGREEMENT.
This Amended Employment Agreement embodies the entire agreement and
understanding between Employee and the Company with respect to the subject
matter hereof and expressly supersedes the Employment Agreement between Employee
and the Company dated July 1, 1996.
12. SEVERABILITY.
If any term, provision, covenant or restriction of this Amended Employment
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amended Employment Agreement shall remain in fall force and
effect and shall in no way be affected, impaired or invalidated.
13. GOVERNING LAW.
This Amended Employment Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
its name and behalf by its duly authorized officer and the Employee has hereunto
set his hand, all on the day and year first above written.
WITNESS: DELSOFT CONSULTING, INC.
/s/ Adil Choksey /s/ Jeffrey A. Rinde
- -------------------------- ----------------------------
Adil Choksey
WITNESS:
/s/ Adil Choksey /s/ Benjamin Giacchino
- -------------------------- ----------------------------
Adil Choksey Benjamin Giacchino
<PAGE>
DELSOFT CONSULTING, INC. STOCK OPTION
A. A STOCK OPTION for a total of one hundred twenty five thousand (125,000)
shares of Common Stock, no par value, of Delsoft Consulting, Inc., a Georgia
corporation (herein the "Company") is hereby granted to BENJAMIN GIACCHINO
(herein the "Optionee"), subject in all respects to the terms and provisions of
the Delsoft Consulting, Inc. Stock Option Plan (herein the "Plan"), effective
May 1, 1997, which has been adopted by the Company and which is incorporated
herein by reference.
B. The option price as determined by the Board of Directors of the Company
is Two Dollars ($2.00) per share,
C. This Option may only be exercised as follows:
(i) up to 25,000 shares on or after July 1, 1997;
(ii) up to 50,000 shares on or after July 1, 1998;
(iii) up to 75,000 shares on or after July 1, 1999;
(iv) up to 100,000 shares on or after July 1, 2000; and
(v) up to 125,000 shares on or after July 1, 2001.
D. This Option may not be exercised if the issuance of shares of Common
Stock of the Company upon such exercise would constitute a violation of any
applicable Federal or State securities or other law or valid regulation. The
Optionee, as a condition to his exercise of this Option, shall represent to the
Company that the shares of Common Stock of the Company that he acquires under
this Option are being acquired by him for investment and not with a present view
to distribution or resale, unless counsel for the Company is then of the opinion
that such a representation is not required under the Securities Act of 1933 or
any other applicable law, regulation, or rule of any governmental agency.
E. This Option may not be transferred in any manner otherwise than by will
or the laws of descent and distribution, and may be exercised during the
lifetime of the Optionee only by him. The terms of this Option shall be binding
upon the executors, administrators, heirs, successors, and assigns of the
Optionee.
F. This Option may not be exercised more than ten (10) years from the date
of its grant, and may be exercised during such term only in accordance with the
terms of the Plan.
Dated: May 1, 1997
Delsoft Consulting, Inc.
By: /s/
-------------------------
President
ATTEST:
/s/
- ---------------------------
<PAGE>
The Optionee acknowledges receipt of a copy of the Plan, a copy of which is
annexed hereto, and represents that he is familiar with the terms and provisions
of the Plan. The Optionee hereby agrees to accept as binding, conclusive, and
final all decisions and interpretations of the Board of Directors and, where
applicable, the Stock Option Plan Committee, upon any questions arising under
the Plan. As a condition to the issuance of shares of Common Stock of the
Company under this Option, the Optionee authorizes the Company to withhold in
accordance with applicable law from any regular cash compensation payable to him
any taxes required to be withheld by the Company under Federal, State, or Local
law as a result of his exercise of this Option.
Dated: ,1997
By:
-------------------------------
Optionee
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
Delsoft Consulting, Inc.
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 23, 1999 related to the financial
statements of Delsoft Consulting, Inc. as of June 30, 1999 and for the year then
ended, which report appears in the Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1999 previously filed by Delsoft Consulting, Inc.
/s/ J.H. Cohn LLP
---------------------
J.H. COHN LLP
Roseland, New Jersey
January 5, 2000
