Agreement and Waiver - SeraNova Inc. and Intelligroup Inc.
AGREEMENT AND WAIVER
THIS AGREEMENT AND WAIVER WITH RESPECT TO AMENDED AND RESTATED PROMISSORY
NOTE (the "Waiver"), is entered into as of September 29, 2000, by SeraNova,
Inc., a New Jersey corporation (the "Obligor") and Intelligroup, Inc., a New
Jersey corporation (the "Holder").
WHEREAS, the Obligor and the Holder entered into that certain Amended and
Restated Promissory Note dated as of May 31, 2000 (the "Note");
WHEREAS, the Obligor has consummated an equity financing with Strong River
Investments, Inc. and certain other investors (the "Financing") for an aggregate
amount of eight million dollars ($8,000,000);
WHEREAS, Section 3 of the Note provides that in the event the Obligor
consummates any debt or equity financing, the Obligor shall make a mandatory
prepayment to the Holder in an amount to be determined pursuant to a schedule of
mandatory prepayments contained in Section 3 of the Note;
WHEREAS, the Obligor has, following the Financing, not made to the Holder
the mandatory prepayment required by the mandatory prepayment provisions of
Section 3 of the Note to be made in the event of the Financing; and
WHEREAS, the Obligor and the Holder desire, in light of the current
operations of the Obligor and the Holder, to waive, subject to and upon the
terms contained herein, the mandatory prepayment obligations of the Obligor
under the terms of the Note arising as a result of the consummation of the
Financing.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Obligor and the Holder,
intending to be legally bound, agree as follows:
1. Defined Terms. Capitalized terms used in this Waiver shall have the
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meanings assigned to such terms in the Note, unless a different definition is
provided in this Waiver.
2. Conditions to the Waiver of the Holder. The effectiveness of the waiver
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provided by the Holder under this Waiver is subject to the following conditions
being satisfied:
(a) Payment. The Obligor shall pay to the Holder (i) five hundred thousand
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dollars ($500,000) upon the execution of this Waiver; (ii) five
hundred thousand dollars ($500,000) on or before each of January 31,
2001, February 28, 2001, March 31,
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2001, April 30, 2001 and May 31, 2001; and (iii) four hundred thousand
dollars ($400,000) on or before December 15, 2000 to be applied either
as (A) an advance payment towards a contemplated services arrangement
between the Holder and the Obligor relating to hosting services for
business critical systems (the "Hosting Agreement"); or (B) in the
event that no such Hosting Agreement is executed on or before December
15, 2000, an additional advance prepayment toward the principal
balance of the Note.
(b) If any payment pursuant to Section 2(a) of this Waiver shall become
due on a Saturday, Sunday or on any legal holiday, such payment shall
be made on the next succeeding business day. The Obligor shall be in
default under this Waiver in the event Obligor fails to timely satisfy
its payment obligations pursuant to Section2(a) of this Waiver and
such failure to pay shall continue unremedied for a period of five
business days following the due date of such payment set forth in
Section 2(a) of this Waiver;
(c) Representations and Warranties. The following representations and
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warranties of the parties shall be true and correct as of the date of
this Waiver:
(i) Of the Obligor: Except as set forth herein, to the Obligor's
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knowledge, no event or condition has occurred or exists which, with the
giving of notice or the passage of time, or both, would constitute an Event
of Default under the Note.
The execution and delivery of this Waiver and the consummation of the
transactions contemplated hereby and by any other documents executed by the
Obligor required to be delivered to the Holder in connection with this
Waiver has been duly and validly authorized by the Obligor and all such
documents together constitute the legal, valid and binding agreement of the
Obligor, enforceable against the Obligor in accordance with their
respective terms, except to the extent that enforceability of any of such
document may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforceability of creditors
rights generally or general equitable principles.
(ii) Of the Holder: The execution and delivery of this Waiver and the
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consummation of the transactions contemplated hereby and by any other
documents executed by the Holder required to be delivered to the Obligor in
connection with this Waiver have been duly and validly authorized by the
Holder and all such documents together constitute the legal, valid and
binding agreement of the Holder, enforceable against the Holder in
accordance with their respective terms, except to the extent that
enforceability of any of such document may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforceability of creditors rights generally or general equitable
principles.
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3. Waiver of Compliance. The following waiver by Holder shall be effective
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so long as the Obligor is in compliance with and satisfies the payment
obligations set forth in Paragraph 2(a) of this Waiver:
(a) With respect to the Financing only, the Holder hereby waives
compliance by the Obligor with the mandatory prepayment obligations of
Section 3 of the Note and the requirement that the Obligor make a
mandatory prepayment of principal to the Holder in an amount equal to
three million dollars ($3,000,000) and agrees not to exercise its
rights under Section 7 of the Note. Notwithstanding the foregoing
waiver of prepayment, all unpaid amounts of principal and interest due
under the Note shall remain the obligation of the Obligor and shall be
due and payable pursuant to the terms of the Note, as amended by this
Waiver. This Waiver shall not apply to any subsequent equity or debt
financings by the Obligor.
4. Notice. Obligor hereby waives presentment, demand, protest or notice of
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any kind in connection with this Waiver.
5. Currency. All references to "$" or "dollars" herein shall mean United
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States dollars.
6. Entire Agreement. The Note (including the documents and instruments
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referred to therein), as modified by this Waiver, constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter thereof
and hereof.
7. Counterparts. This Waiver may be signed in any number of counterpart copies
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and by the parties hereto on separate counterparts, but all such copies shall
constitute one and the same instrument.
8. Limitation of Waiver. This Waiver shall not, except as expressly set forth
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above, serve to waive, supplement or amend the Note, which Note shall, except as
amended hereby, remain in full force and effect.
[Signature Page to Follow]
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WITNESS the due execution of this Waiver as a document under seal, as of
the date first written above.
SERANOVA, INC.
By: /s/ David Rogers
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Print Name: David Rogers
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Title: Sec / Treas
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INTELLIGROUP, INC.
By: /s/ Nicholas Visco
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Print Name: Nicholas Visco
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Title: VP Finance and CFO
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