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Exhibit 10.1
CONTRIBUTION AGREEMENT
This Contribution Agreement (this "AGREEMENT") is entered into as of
January 1, 2000 by and between Intelligroup, Inc., a New Jersey corporation
("INTELLIGROUP"), and SeraNova, Inc., a New Jersey corporation ("SERANOVA").
BACKGROUND
WHEREAS, on September 9, 1999, Intelligroup formed SeraNova (formerly
known as Infinient, Inc.), for the purpose of operating independently a business
which provides strategic Internet consulting services, interactive Internet
solutions, application management services and management consulting services
then conducted by Intelligroup, Azimuth, NetPub and Intelligroup India Private
Limited as part of their respective business operations (the "SERANOVA
BUSINESS");
WHEREAS, the Board of Directors of Intelligroup has determined that it is
in the best interests of Intelligroup and its shareholders to separate the
SeraNova Business from the Intelligroup Group;
WHEREAS, to implement such separation, Intelligroup desires to contribute
and transfer, and SeraNova desires to accept and assume, certain of the assets
and certain of the liabilities of Intelligroup that are necessary to enable
SeraNova to conduct the SeraNova Business (the "CONTRIBUTION"), as more fully
described in this Agreement and the Ancillary Agreements;
WHEREAS in consideration for the Contribution, Intelligroup shall receive
an aggregate of nine hundred (900) shares of the common stock, $.01 par value
per share, of SeraNova.
WHEREAS the parties desire to set forth the principal transactions
required to effect the separation of SeraNova from Intelligroup and to govern
the relationship of SeraNova and Intelligroup following the Contribution.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings:
1.1 "ACTION" means any demand, action, suit, countersuit, arbitration,
inquiry, proceeding or investigation by or before any federal, state, local,
foreign or international Governmental Authority or any arbitration or mediation
tribunal.
1.2 "AFFILIATE" of any Person means any Person that controls, is
controlled by, or is under common control with such Person, where control means
the possession, directly or indirectly of the power to direct or cause the
direction of the
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management and policies of such entity whether through ownership of voting
securities or other interests, by contract or otherwise.
1.3 "ANCILLARY AGREEMENTS" means the agreements set forth on EXHIBIT A
hereto.
1.4 "ASSETS" means assets, property and rights (including goodwill),
wherever located (including in the possession of vendors or other third
parties), whether real, personal or fixed, tangible, intangible or contingent,
in each case whether or not recorded or reflected or required to be recorded or
reflected on the books and records or financial statements of any Person.
1.5 "AZIMUTH" means Azimuth Consulting Limited, a corporation formed
pursuant to the laws of New Zealand and a wholly-owned subsidiary of
Intelligroup, Azimuth Corporation Limited, a corporation formed pursuant to the
laws of New Zealand and a wholly-owned subsidiary of Intelligroup, Azimuth
Holdings Limited, a corporation formed pursuant to the laws of New Zealand and a
wholly-owned subsidiary of Intelligroup, Xxxxxxxxxxx Richmond Limited, a
corporation formed pursuant to the laws of New Zealand and a wholly-owned
subsidiary of Intelligroup, and each Subsidiary of Azimuth.
1.6 "CLOSING DATE" means the date of the Contribution.
1.7 "CONTRACT" means any written or oral contract, agreement,
commitment, lease, license, consulting agreement, supply contract, repair
contract, distribution agreement, purchase order, technology and know-how
agreement, instrument, or any other contractual commitment that is binding on
any Person or its property.
1.8 "DELAYED TRANSFER ASSETS" means any SeraNova Assets that are
expressly enumerated in this Agreement or any Ancillary Agreement to be
transferred after the Closing Date.
1.9 "ENVIRONMENTAL LAW" means any federal, state, local, foreign or
international law (including tort and environmental nuisance law), regulation,
license, permit, order, judgment or agreement with any Governmental Authority
relating to health, safety, pollution or the environment or to emissions,
discharges or releases of any substance currently or hereafter designated as
hazardous, toxic, waste, radioactive or dangerous.
1.10 "ENVIRONMENTAL LIABILITIES" means all Liabilities relating to,
arising out of or resulting from any Environmental Law or contract or agreement
relating to environmental, health or safety matters.
1.11 "GAAP" means generally accepted accounting principles in effect in
the United States consistently applied throughout the periods involved.
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1.12 "GOVERNMENTAL AUTHORITY" means any federal, state, local, foreign
or international court, government, commission, board, bureau, agency, official
or other regulatory, administrative or governmental authority.
1.13 "GROUP" means either the SeraNova Group or the Intelligroup Group,
as applicable.
1.14 "INFORMATION" means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs, software, marketing plans, customer names, communication by
or to attorneys (including attorney-client privileged communications), memos and
other materials prepared by attorneys or under their direction (including
attorney work product) and other technical, financial, employee or business
information or data.
1.15 "INTELLIGROUP GROUP" means, collectively, Intelligroup, and each
Subsidiary of Intelligroup and each other Person that is controlled directly or
indirectly by Intelligroup immediately after the Closing Date; provided,
however, that the Intelligroup Group shall not include SeraNova, Azimuth,
NetPub, Intelligroup India Private Limited or any other Subsidiary of SeraNova.
1.16 "INTELLIGROUP INDIA PRIVATE LIMITED" means Intelligroup India
Private Limited, a corporation formed pursuant to the laws of India and a
wholly-owned subsidiary of Intelligroup, and each subsidiary of Intelligroup
India Private Limited.
1.17 "JOINT BANK FACILITY" means any loan, credit, financing or other
similar agreement among a bank or other financial institution, any member of the
SeraNova Group and any member of the Intelligroup Group, with the members of the
SeraNova Group and the Intelligroup Group being co-borrowers, co-obligors or
guarantors, whether entered into prior to or after the Closing Date.
1.18 "LIABILITIES" means any and all losses, claims, charges, debts,
demands, actions, causes of action, suits, damages, obligations, payments, costs
and expenses, sums of money, accounts, bonds, indemnities and similar
obligations, covenants, contracts, agreements, promises, omissions, variances,
guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising under
any law, rule regulation, Action, threatened or contemplated Action (including
the costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all costs and
expenses, whatsoever reasonably incurred in investigating, preparing or
defending against any such Action or threatened or contemplated Action), order
or consent decree of any
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Governmental Authority or any award of any arbitrator or mediator of any kind,
and those arising under any contract, commitment or undertaking, including those
arising under this Agreement or any Ancillary Agreement, in each case, whether
or not recorded or reflected or required to be recorded or reflected on the
books and records or financial statements of any Person.
1.19 "LIEN" means any mortgage, pledge, hypothecation, right of others,
claim, security interest, encumbrance, lease, sublicense, license, occupancy
agreement, adverse claim or interest, easement, covenant, encroachment, burden,
title defect right or title retention, voting trust agreement, interest, equity,
option, lien, right of first refusal, charge or other restrictions or
limitations of any nature whatsoever (whether consensual, statutory or
otherwise).
1.20 "NETPUB" means Network Publishing, Inc., a Utah corporation and
wholly-owned subsidiary of Intelligroup.
1.21 "PERMITTED LIENS" includes liens for taxes, assessments or other
governmental charges or levies not yet delinquent or which are being contested
in good faith by appropriate action and as to which adequate reserves shall have
been set aside in conformity with GAAP; liens of mechanics, materialmen,
landlords, warehousemen, carriers and similar liens arising in the future in the
ordinary course of business for sums not yet delinquent, or being contested in
good faith if a reserve or other appropriate provision in accordance with GAAP
shall have been made therefor; statutory liens incurred in the ordinary course
of business in connection with workers' compensation, unemployment insurance,
social security and similar items for sums not yet delinquent or being contested
in good faith, if a reserve or other appropriate provision in accordance with
GAAP shall have been made therefor; lessor's liens arising from operating leases
entered into in the ordinary course of business; and consensual liens granted on
Assets contributed to SeraNova with respect to financing obligations assumed by
SeraNova.
1.22 "PERSON" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability corporation or entity, any other entity and any Governmental
Authority.
1.23 "PROMISSORY NOTE" shall mean Promissory Note dated the date hereof
issued by SeraNova to Intelligroup, in an aggregate principal amount equal to
the intercompany debt set forth on EXHIBIT H hereto.
1.24 "SECURITY INTEREST" means any mortgage, security interest, pledge,
lien, charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer or other encumbrance of any nature whatsoever.
1.25 "SERANOVA ASSETS" means the items listed in EXHIBIT B hereto.
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1.26 "SERANOVA BALANCE SHEET" means the consolidated balance sheet of
the SeraNova Group as of September 30, 1999, a copy which is attached hereto as
EXHIBIT C.
1.27 "SERANOVA BANK FACILITY" means any loan, credit, financing or
other similar agreement between a bank or other financial institution and any
member of the SeraNova Group, as the borrower or obligor, which any member of
the Intelligroup Group has guaranteed, whether prior to or after the Closing
Date.
1.28 "SERANOVA CONTRACTS" means the contracts and agreements assigned,
transferred and delivered from Intelligroup to the SeraNova Group to which
SeraNova or any of its Subsidiaries is or shall be a party following the
Contribution, which are listed or described in EXHIBIT D hereto.
1.29 "SERANOVA GROUP" means SeraNova, each Subsidiary of SeraNova and
each other Person that is controlled directly or indirectly by SeraNova
immediately after the Closing Date.
1.30 "SERANOVA LIABILITIES" includes the Liabilities listed on EXHIBIT
E hereto.
1.31 "SUBSIDIARY" of any Person means any corporation or other
organization whether incorporated or unincorporated of which at least a majority
of securities or interest having by the terms thereof ordinary voting power to
elect at least a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries; provided,
however, that no person that is not directly or indirectly wholly owned by any
other Person shall be a Subsidiary of such other Person unless such other Person
controls, or has the right, power and ability to control, that Person.
1.32 "TAX SHARING AGREEMENT" means the Tax Sharing Agreement dated as
of the date hereof between Intelligroup and SeraNova.
1.33 "TAXES" has the meaning set forth in the Tax Sharing Agreement.
2. CONTRIBUTION.
2.1 TRANSFER OF ASSETS AND CONTRACTS; ASSUMPTION OF LIABILITIES
RELATED TO CONDUCT OF SERANOVA BUSINESS.
(a) Subject to the conditions contained herein, as of the Closing
Date, Intelligroup shall have contributed, transferred, conveyed and delivered
to the SeraNova Group, and the SeraNova Group shall have accepted from
Intelligroup, all of Intelligroup's right, title and interest in the SeraNova
Assets, including the intellectual property set forth on EXHIBIT B attached
hereto, free and clear of all Liens (other than
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Permitted Liens listed on EXHIBIT F attached hereto) related to the conduct of
the SeraNova Business, other than any Delayed Transfer Assets.
(b) As of the Closing Date, subject to Section 3.1 shall have
assigned, transferred and delivered to the SeraNova Group, and the SeraNova
Group shall have accepted from Intelligroup, all of Intelligroup's right, title
and interest in and to all SeraNova Contracts pertaining to the SeraNova
Business as identified on EXHIBIT D hereto and the SeraNova Group hereby accepts
and agrees to perform and comply with the SeraNova Contracts as if an original
signatory thereunder.
(c) The SeraNova Group hereby assumes only those SeraNova
Liabilities listed on EXHIBIT E attached hereto related to the conduct of the
SeraNova Business, in accordance with their respective terms. Except as set
forth on EXHIBIT E, the SeraNova Group shall not otherwise acquire, discharge,
assume or become responsible for any Liabilities of Intelligroup. Intelligroup
agrees to pay and satisfy when due the Liabilities not expressly assumed
hereunder by the SeraNova Group.
(d) Upon the execution hereof, Intelligroup hereby grants to
SeraNova a non-exclusive, royalty free, fully paid, irrevocable right and
license to sell, assign, copy, distribute, sub-license, use and otherwise
commercially exploit the intellectual property rights set forth on EXHIBIT G
hereto (the "Licensed Intellectual Property"). Such license includes the right
to modify and enhance the Licensed Intellectual Property and to own such
modifications and enhancements, including all intellectual property related
thereto.
2.2 TRANSFER OF SERANOVA ASSETS CONSISTING OF STOCK OR OTHER
EQUITY INTERESTS.
(a) To the extent that any of the SeraNova Assets consists of
shares of stock of any corporate entity (collectively, the "Stock"), upon the
execution hereof, the certificates representing the Stock, if any, shall be
delivered to SeraNova, duly endorsed in blank, or accompanied by stock powers
duly executed in blank, with all necessary transfer tax and other revenue
stamps, acquired at the expense of Intelligroup, affixed and canceled.
Intelligroup agrees to cure any deficiencies with respect to the endorsement of
the certificates representing the Stock owned by Intelligroup or with respect to
the stock power accompanying any such certificates.
(b) To the extent that any of SeraNova Assets consists of
uncertificated securities, Intelligroup agrees to make such ledger entries, or
instruct appropriate agents or government agencies to make such entries, and to
otherwise take such steps as reasonably necessary to transfer such
uncertificated securities to SeraNova, including without limitation the payment
of any transfer fees or taxes.
2.3 ADJUSTMENT OF ASSETS AND LIABILITIES. The parties acknowledge
and agree that the information set forth in the Exhibits and Schedules hereto,
including
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the SeraNova Balance Sheet, is as of September 30, 1999. No later than March 31,
2000, the parties shall appropriately adjust and amend the information set forth
on the Exhibits and Schedules hereto as of December 31, 1999. Such adjustments
and amendments shall be made to reflect the closing of the respective books of
the parties (and their respective Subsidiaries) and the preparation of audited
financial statements for each of parties for the year ended December 31, 1999.
2.4 DELAYED TRANSFER ASSETS. Each of the parties hereto agrees that
the Delayed Transfer Assets will be contributed, transferred, conveyed and
delivered in accordance with the terms of any and all agreements that provide
for such contribution, transfer, conveyance and delivery after the date of this
Agreement or as otherwise set forth on SCHEDULE 2.4. Following such
contribution, transfer, conveyance and delivery of any Delayed Transfer Asset
the applicable Delayed Transfer Asset shall be treated for all purposes of this
Agreement and the Ancillary Agreements as a SeraNova Asset. Each applicable
member of the Intelligroup Group shall use commercially reasonable efforts to
safeguard and preserve the Delayed Transfer Assets until the applicable date of
transfer to SeraNova, normal wear and tear excepted.
2.5 HOLDING ASSETS IN TRUST. In the event that at any time or from
time to time (whether prior to or after the Closing Date), any party hereto (or
any member of such party's respective Group), shall receive or otherwise possess
any Asset that is allocated to any other Person pursuant to this Agreement or
any Ancillary Agreement, including, but not limited to, accounts receivable and
other cash payments, such party shall promptly transfer, or cause to be
transferred, such Asset to the Person so entitled thereto. Prior to any such
transfer, the Person receiving or possessing such Asset shall hold such Asset in
trust for such other Person.
2.6 TERMINATION OF AGREEMENTS.
(a) Except for the Ancillary Agreements, SeraNova, on behalf
of itself and each member of the SeraNova Group, on the one hand, and
Intelligroup, on behalf of itself and each member of the Intelligroup Group, on
the other hand, hereby terminates effective as of the Closing Date, any and all
agreements, arrangements, commitments or understandings, whether or not in
writing, between or among any member of the SeraNova Group, on the one hand, and
any member of the Intelligroup Group, on the other hand; provided, however, to
the extent any such agreement, arrangement, commitment or understanding is
inconsistent with any Ancillary Agreement, such termination shall be effective
as of the date of effectiveness of the applicable Ancillary Agreement. No such
terminated agreement, arrangement, commitment or understanding (including any
provision thereof which purports to survive termination) shall be of any further
force or effect after the Closing Date (or, to the extent contemplated by the
proviso to the immediately preceding sentence, after the effective date of the
applicable Ancillary Agreement). Each party shall, at the reasonable request of
any other party, take, or cause to be taken, such other actions as may be
necessary to effect the foregoing.
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(b) The provisions of Section 2.6(a) shall not apply to any of
the following agreements, arrangements, commitments or understandings (or to any
of the provisions thereof): (i) this Agreement and the Ancillary Agreements (and
each other agreement or instrument expressly contemplated by this Agreement or
any Ancillary Agreement to be entered into by any member of the SeraNova Group
or the Intelligroup Group); (ii) any agreements, arrangements, commitments or
understandings to which any Person other than the parties hereto and their
respective Affiliates is a party (it being understood that to the extent that
the rights and obligations of the members of the SeraNova Group or the
Intelligroup Group under any such agreements, arrangements, commitments or
understandings constitute SeraNova Assets or SeraNova Liabilities, they shall be
assigned pursuant to the other provisions of this Section 2); (iii) any
intercompany accounts payable or accounts receivable accrued as of the Closing
Date that are reflected in the books and records of the parties or otherwise
documented in writing in accordance with past practices; (iv) any written Tax
sharing or Tax allocation agreements to which any member of any Group is a
party; and (v) any other agreements, arrangements, commitments or understandings
that this Agreement or any Ancillary Agreement expressly contemplates will
survive the Closing Date.
2.7 DOCUMENTS RELATING TO TRANSFER OF REAL PROPERTY INTERESTS AND
TANGIBLE PROPERTY LOCATED THEREON. In furtherance of the contribution, transfer,
conveyance and delivery of the SeraNova Assets and the assumption of SeraNova
Liabilities set forth in Section 2.1, simultaneously with the execution and
delivery of this Agreement or as promptly as practicable thereafter, each of
Intelligroup and SeraNova or their applicable Subsidiaries, shall execute and
deliver lease assignments and assumptions, leases, subleases and sub-subleases
with respect to the properties set forth on SCHEDULE 2.7 with such changes as
may be necessary to conform to any laws, regulations or usage applicable in the
jurisdiction in which the relevant real property is located.
2.8 DOCUMENTS RELATING TO OTHER TRANSFERS OF ASSETS AND ASSUMPTION
OF LIABILITIES. In furtherance of the contribution, transfer, conveyance and
delivery of the SeraNova Assets and the assumption of SeraNova Liabilities set
forth in Section 2.1, as promptly as practicable after each such transfer: (i)
Intelligroup shall execute and deliver, and shall cause its Subsidiaries to
execute and deliver, such bills of sale, stock powers, certificates of title,
assignments of contracts and other instruments of transfer, conveyance and
assignment as and to the extent necessary to evidence the transfer, conveyance
and assignment of all of Intelligroup's and its Subsidiaries' right, title and
interest in and to the SeraNova Assets to SeraNova and its Subsidiaries; and
(ii) SeraNova shall execute and deliver, and shall cause its Subsidiaries to
execute and deliver to Intelligroup and its Subsidiaries such bills of sale,
stock powers, certificates of title, assumptions of contracts and other
instruments of assumption as and to the extent necessary to evidence the valid
and effective assumption of the SeraNova Liabilities by SeraNova and its
Subsidiaries.
2.9 ANCILLARY AGREEMENTS. Prior to the Closing Date, Intelligroup
and SeraNova will execute and deliver all Ancillary Agreements to which it is a
party.
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2.10 FINANCING ARRANGEMENTS. On a case-by-case basis, Intelligroup
and SeraNova may agree to enter into a Joint Bank Facility or a SeraNova Bank
Facility with respect to operations of the SeraNova Business in specific
jurisdictions. In such event, Intelligroup and SeraNova agree to take all such
reasonable action as may be necessary to permit the applicable members of the
Intelligroup Group or the SeraNova Group to borrow such amount as is mutually
agreed. Intelligroup and SeraNova shall participate in the preparation of all
materials and presentations as may be reasonably necessary to secure funding
pursuant to a Joint Bank Facility or a SeraNova Bank Facility, including rating
agency presentations necessary to obtain the requisite ratings needed to secure
the financing. SeraNova shall pay (or reimburse Intelligroup for) all expenses
associated with any SeraNova Bank Facility.
2.11 OTHER GUARANTEES. On a case-by-case basis, Intelligroup shall
consider in good faith any request by SeraNova to have Intelligroup or any other
member of the Intelligroup Group provide a contractual guaranty of a lease or
other contractual obligation of any member of the SeraNova Group. SeraNova shall
use its best good faith efforts to arrange for the release and discharge of
Intelligroup and any other member of the Intelligroup Group of all of its
obligations under any such guaranty as soon as possible, consistent with the
smooth transition of the SeraNova Business to SeraNova. SeraNova shall take all
reasonable steps necessary to arrange for the complete release and discharge of
Intelligroup and any other member of the Intelligroup Group of all of its
obligations under any such guaranty, in no event later than the spin-off
transaction contemplated by that certain Distribution Agreement by and between
Intelligroup and SeraNova of even date herewith.
2.12 GOVERNMENTAL APPROVALS AND CONSENTS.
(a) To the extent that the Contribution requires any
Governmental Authority approvals or consents, the parties will use their
commercially reasonable efforts to obtain any such approvals and consents.
(b) If and to the extent that the valid, complete and
perfected transfer or conveyance to the SeraNova Group of any SeraNova Assets
would be a violation of applicable laws or require any consent or approval of a
Governmental Authority in connection with the Contribution, then, unless
Intelligroup shall otherwise determine, the transfer or conveyance to the
SeraNova Group of such SeraNova Assets shall be automatically deemed deferred
and any such purported transfer or assignment shall be null and void until such
time as all legal impediments are removed and/or such consents or approvals have
been obtained.
(c) If the transfer or assignment of any Asset intended to be
transferred or conveyed hereunder is not consummated prior to or at the Closing
Date, then the Person retaining such Asset shall thereafter hold such Asset for
its use and benefit, insofar as reasonably possible, at the expense of the
Person entitled thereto. In addition, the Person retaining such Asset shall take
such other actions as may be reasonably requested by the Person to whom such
Asset is to be transferred in order to
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place such Person, insofar as reasonably possible, in the same position as if
such Asset had been transferred as contemplated hereby and so that all the
benefits and burdens relating to such SeraNova Assets, including possession,
use, risk of loss, potential for gain, and dominion, control and command over
such Assets, are to inure from and after the Closing Date to the SeraNova Group.
(d) If and when the consents or approvals of a Governmental
Authority, the absence of which caused the deferral of transfer of any Asset,
are obtained, the transfer of the applicable Asset shall be effected in
accordance with the terms of this Agreement or the applicable Ancillary
Agreement.
2.13 NOVATION OF ASSUMED SERANOVA LIABILITIES.
(a) Each of Intelligroup and SeraNova, at the request of the
other, shall use its commercially reasonable efforts to obtain, or to cause to
be obtained, any consent, substitution, approval or amendment required to novate
(including with respect to any federal government contract) or assign all
obligations under agreements, leases, licenses and other obligations or
Liabilities of any nature whatsoever that constitute SeraNova Liabilities, or to
obtain in writing the unconditional release of all parties to such arrangements
other than any member of the SeraNova Group, so that, in any such case, SeraNova
and its Subsidiaries will be solely responsible for such Liabilities; provided,
however, that no member of the Intelligroup Group or the SeraNova Group, as the
case may be, shall be obligated to pay any consideration therefor to any third
party from whom such consents, approvals, substitutions and amendments are
requested. Without limiting the foregoing, Intelligroup and SeraNova shall use
their commercially reasonable efforts to obtain, prior to the Closing Date, a
release of any and all guarantees provided by any member of the Intelligroup
Group in connection with the SeraNova Contracts, SeraNova Assets, SeraNova
Liabilities and the SeraNova Business.
(b) If Intelligroup or SeraNova is unable to obtain, or to
cause to be obtained, any such required consent, approval, release, substitution
or amendment, the applicable member of the Intelligroup Group shall continue to
be bound by such agreements, leases, licenses and other obligations and, unless
not permitted by law or the terms thereof, SeraNova shall, as agent or
subcontractor for Intelligroup or such other Person, as the case may be, pay,
perform and discharge fully all the obligations or other Liabilities of
Intelligroup or such other Person, as the case may be, thereunder from and after
the date hereof. SeraNova shall indemnify each Intelligroup Indemnitee (as
defined in Section 4.1), and hold each of them harmless against any Liabilities
arising in connection therewith. If and when any such consent, approval,
release, substitution or amendment is obtained or such agreement, lease, license
or other rights or obligations otherwise becomes assignable or able to be
novated, Intelligroup shall thereafter assign, or cause to be assigned, all its
rights, obligations and other Liabilities thereunder or any rights or
obligations of any member of its respective Group to SeraNova without payment of
further consideration and SeraNova shall, without the payment of any further
consideration, assume such rights and obligations.
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2.14 INTERCOMPANY DEBT. Intelligroup and SeraNova agree that, as a
result of the transactions contemplated hereby, SeraNova shall be indebted to
Intelligroup as set forth on EXHIBIT H. Such debt shall be evidenced by the
Promissory Note.
3. REPRESENTATIONS AND WARRANTIES.
3.1 REPRESENTATIONS AND WARRANTIES OF INTELLIGROUP.
Intelligroup represents and warrants to SeraNova and its
Subsidiaries as follows:
(a) CORPORATE POWER AND AUTHORITY. Intelligroup has the
requisite power and authority to execute, deliver, and perform its obligations
under this Agreement, any applicable Ancillary Agreement and to contribute,
transfer, convey and deliver to SeraNova and its Subsidiaries the SeraNova
Assets. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action (corporate or otherwise) on the part of Intelligroup.
This Agreement constitutes the legal, valid and binding obligation of
Intelligroup, enforceable in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights generally.
(b) VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not: (i) violate, breach or
contravene any of the terms, conditions or provisions of the Certificate of
Incorporation or By-laws (or the equivalent thereof) of Intelligroup; (ii)
violate, or constitute a default under, any material Contract by which
Intelligroup or its property is bound; or (iii) violate any material provision
of law.
(c) TITLE TO CONTRIBUTED ASSETS. Intelligroup is in possession
of and has good, valid and marketable title to, or has valid leasehold interests
in or valid rights under contract to use, all of the SeraNova Assets in which it
has an interest and Intelligroup has such title, interests or rights to all of
the SeraNova Assets that are being contributed by Intelligroup. All of the
SeraNova Assets are free and clear of all Liens, other than Permitted Liens. All
tangible personal property comprising the SeraNova Assets is in good operating
condition (ordinary wear and tear excepted) and will be usable by SeraNova and
its Subsidiaries for its intended purposes.
(d) ACCOUNTS RECEIVABLE. The accounts receivable that are
included in the SeraNova Assets (the "Accounts Receivable") constitute valid
receivables, have arisen in the ordinary course of business consistent with past
practices. No part of the Accounts Receivable is contingent upon performance by
any member of the Intelligroup Group, as applicable, or any other party of any
obligation, and no agreements for deductions or discounts have been made with
respect to any part of such Accounts Receivable.
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(e) BUSINESS. Upon consummation of this Agreement, SeraNova
shall be the sole and exclusive owner of the SeraNova Business, the SeraNova
Assets received by SeraNova from Intelligroup are all of the assets necessary to
operate the SeraNova Business.
(f) REQUIRED CONSENTS. Intelligroup, SeraNova and the
applicable member or members of their respective Group shall use their or its
reasonable best efforts to obtain all necessary consents from applicable third
parties in order to assign, transfer and deliver the SeraNova Contracts unless
the failure to obtain one or more consents would not be material and except for
contracts under which Intelligroup has a right to subcontract without the
consent of the other party or parties to the contract.
(g) SERANOVA BALANCE SHEET. The SeraNova Balance Sheet set
forth on EXHIBIT C is true and accurate in all material respects.
3.2 REPRESENTATIONS AND WARRANTIES OF THE SERANOVA GROUP.
SeraNova and its Subsidiaries represent and warrant to Intelligroup
as follows:
(a) CORPORATE POWER AND AUTHORITY. SeraNova and its
Subsidiaries have the requisite power and authority to execute, deliver and
perform this Agreement, the Ancillary Agreements and to accept the SeraNova
Assets. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action (corporate or otherwise) on the part of SeraNova and its
Subsidiaries. This Agreement constitutes the legal, valid and binding obligation
of SeraNova and its Subsidiaries, enforceable in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
(b) VALIDITY OF CONTEMPLATED TRANSACTIONS. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not: (i) violate, breach or
contravene any of the terms, conditions or provisions of the Certificate or
Articles of Incorporation or By-laws (or the equivalent thereof) of SeraNova and
its Subsidiaries; (ii) violate, or constitute a default under, any material
Contract by which such entity or its property is bound; or (iii) violate any
material provision of law.
4. INDEMNIFICATION.
4.1 INDEMNIFICATION BY SERANOVA. Subject to the provisions of
Section 4.3, SeraNova shall indemnify, defend and hold harmless each member of
the Intelligroup Group and each of their respective directors, officers and
employees, and
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each of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "INTELLIGROUP INDEMNITEES") from and against any and all
Liabilities of the Intelligroup Indemnitees, relating to, arising out of or
resulting from any of the following items:
(a) the failure of any member of the SeraNova Group to pay,
perform or otherwise promptly discharge any SeraNova Liabilities or any SeraNova
Contract in accordance with their respective terms, after the Closing Date;
(b) the employment or termination of employment of any
employee of Intelligroup working in the SeraNova Business;
(c) conduct of the SeraNova Business after the Closing Date;
and
(d) any breach by any member of the SeraNova Group of this
Agreement or any of the Ancillary Agreements.
4.2 INDEMNIFICATION BY INTELLIGROUP. Subject to the provisions of
Section 4.3, Intelligroup shall indemnify, defend and hold harmless SeraNova,
each member of the SeraNova Group and each of their respective directors,
officers and employees, and each of the heirs, executors, successors and assigns
of any of the foregoing (collectively, the "SERANOVA INDEMNITEES"), from and
against any and all Liabilities of the SeraNova Indemnitees relating to, arising
out of or resulting from any of the following items:
(a) the failure of Intelligroup to pay, perform or otherwise
promptly discharge any Liabilities of Intelligroup, whether prior to or after
the Closing Date;
(b) the failure of Intelligroup to pay, perform or otherwise
promptly discharge any SeraNova Liabilities or any SeraNova Contract in
accordance with their respective terms, prior to the Closing Date;
(c) conduct of the SeraNova Business prior to the Closing
Date; and
(d) any breach by Intelligroup of this Agreement or any of the
Ancillary Agreements.
4.3 INDEMNIFICATION OBLIGATIONS NET OF INSURANCE PROCEEDS AND
OTHER AMOUNTS.
(a) The parties intend that any Liability subject to
indemnification or reimbursement pursuant to this Section 4 will be net of
insurance proceeds. Accordingly, the amount which any party (an "INDEMNIFYING
Party") is required to pay to any Person entitled to indemnification hereunder
(an "INDEMNITEE")
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will be reduced by any insurance proceeds theretofore actually recovered by or
on behalf of the Indemnitee in reduction of the related Liability. If an
Indemnitee receives a payment (an "INDEMNITY PAYMENT") required by this
Agreement from an Indemnifying Party in respect of any Liability and
subsequently receives insurance proceeds, then the Indemnitee will pay to the
Indemnifying Party an amount equal to the Indemnity Payment received less the
amount of the Indemnity Payment that would have been due if the insurance
proceeds had been received, realized or recovered before the Indemnity Payment
was made.
(b) An insurer who would otherwise be obligated to pay any
claim shall not be relieved of the responsibility with respect thereto or,
solely by virtue of the indemnification provisions hereof, have any subrogation
rights with respect thereto, it being expressly understood and agreed that no
insurer or any other third party shall be entitled to a "windfall" (i.e., a
benefit they would not be entitled to receive in the absence of the
indemnification provisions) by virtue of the indemnification provisions hereof.
Nothing contained in this Agreement or any Ancillary Agreement shall obligate
any member of any Group to seek to collect or recover any insurance proceeds.
4.4 PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS.
(a) If an Indemnitee shall receive notice or otherwise learn
of the assertion by a Person (including any Governmental Authority) who is not a
member of the Intelligroup Group or the SeraNova Group of any claim or of the
commencement by any such Person of any Action (collectively, a "THIRD PARTY
CLAIM") with respect to which an Indemnifying Party may be obligated to provide
indemnification to such Indemnitee pursuant to Section 4.1 or 4.2, or any other
Section of this Agreement or any Ancillary Agreement, such Indemnitee shall give
such Indemnifying Party written notice thereof within twenty (20) days after
becoming aware of such Third Party Claim. Any such notice shall describe the
Third Party Claim in reasonable detail. Notwithstanding the foregoing, the
failure of any Indemnitee or other Person to give notice as provided in this
Section 4.4(a) shall not relieve the related Indemnifying Party of its
obligations under this Section 4, except to the extent that such Indemnifying
Party is actually prejudiced by such failure to give notice.
(b) An Indemnifying Party may elect to defend (and, unless the
Indemnifying Party has specified any reservations or exceptions, to seek to
settle or compromise), at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within thirty (30) days
after the receipt of notice from an Indemnitee in accordance with Section 4.4(a)
(or sooner, if the nature of such Third Party Claim so requires), the
Indemnifying Party shall notify the Indemnitee whether the Indemnifying Party
will assume responsibility for defending such Third Party Claim, which election
shall specify any reservations or exceptions. After notice from an Indemnifying
Party to an Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnitee shall have the right to employ separate counsel and to
participate in (but not control) the defense, compromise, or settlement thereof,
but the fees and
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expenses of such counsel shall be paid by such Indemnitee except as set forth in
subsection (c).
(c) If an Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in Section 4.4(b), such Indemnitee may
defend such Third Party Claim at the cost and expense of the Indemnifying Party.
(d) Unless the Indemnifying Party has failed to assume the
defense of the Third Party Claim in accordance with the terms of this Agreement,
no Indemnitee may settle or compromise any Third Party Claim without the consent
of the Indemnifying Party.
(e) In the case of a Third Party Claim, no Indemnifying Party
shall consent to entry of any judgment or enter into any settlement of the Third
Party Claim without the consent of the Indemnitee if the effect thereof is to
permit any injunction, declaratory judgment, other order or other nonmonetary
relief to be entered, directly or indirectly, against any Indemnitee.
(f) The provisions of Section 4.4 and Section 4.5 shall not
apply to Taxes (which are covered by the Tax Sharing Agreement).
4.5 ADDITIONAL MATTERS.
(a) Any claim on account of a Liability which does not result
from a Third Party Claim shall be asserted by written notice given by the
Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have
a period of thirty (30) days after the receipt of such notice within which to
respond thereto. If such Indemnifying Party does not respond within such 30-day
period, such Indemnifying Party shall be deemed to have refused to accept
responsibility to make payment. If such Indemnifying Party does not respond
within such 30-day period or rejects such claim in whole or in part, such
Indemnitee shall be free to pursue such remedies as may be available to such
party as contemplated by this Agreement and the Ancillary Agreements.
(b) In the event of payment by or on behalf of any
Indemnifying Party to any Indemnitee in connection with any Third Party Claim,
such Indemnifying Party shall be subrogated to and shall stand in the place of
such Indemnitee as to any events or circumstances in respect of which such
Indemnitee may have any right, defense or claim relating to such Third Party
Claim against any claimant or plaintiff asserting such Third Party Claim or
against any other person. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense of such Indemnifying
Party, in prosecuting any subrogated right, defense or claim.
(c) In the event of an Action in which the Indemnifying Party
is not a named defendant, if the Indemnifying Party shall so request, the
parties shall
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endeavor to substitute the Indemnifying Party for the named defendant. If such
substitution cannot be achieved for any reason or is not requested, the named
defendant shall allow the Indemnifying Party to manage the Action as set forth
in this Section and the Indemnifying Party shall fully indemnify the named
defendant against all costs of defending the Action (including court costs,
sanctions imposed by a court, attorneys' fees, experts' fees and all other
external expenses), the costs of any judgment or settlement, and the cost of any
interest or penalties relating to any judgment or settlement.
4.6 REMEDIES CUMULATIVE. The remedies provided in this Section 4
shall be cumulative and, subject to the provisions of Section 6, shall not
preclude assertion by any Indemnitee of any other rights or the seeking of any
and all other remedies against any Indemnifying Party.
4.7 SURVIVAL OF INDEMNITIES. The rights and obligations of each of
Intelligroup and SeraNova and their respective Indemnitees under this Section 4
shall survive the sale or other transfer by any party of any Assets or
businesses or the assignment of any Liabilities.
4.8 ALLEGED INFRINGEMENT OR MISAPPROPRIATION.
(a) Notwithstanding any other provision of this Agreement or
any Ancillary Agreement, in the event of any claim, action, proceeding or suit
by a third party against any member of the SeraNova Group or the Intelligroup
Group alleging an infringement of any patent, copyright, trademark or
misappropriation of a trade secret (each a "Claim") with respect to any of the
transferred intellectual property or the Licensed Intellectual Property set
forth on EXHIBIT A and EXHIBIT G, respectively (for purposes of this Section
4.8, the "Disputed Intellectual Property"), the parties agree to adhere to the
procedures set forth in paragraphs (b), (c) and (d) below.
(b) If the use or distribution by any member of the SeraNova
Group or the Intelligroup Group, as applicable, of any of the Disputed
Intellectual Property is enjoined or in the opinion of such member of the
applicable Group is likely to be enjoined, SeraNova and Intelligroup shall, use
their reasonable best efforts to jointly: (i) replace the Disputed Intellectual
Property with a substitute free of any infringement; (ii) modify the Disputed
Intellectual Property so that it will be free of the infringement; or (iii)
procure for such member of the applicable Group or its distributees a license or
other right to use the Disputed Intellectual Property.
(c) Each of Intelligroup and SeraNova, on behalf of its
respective Group, agrees to provide, or cause to be provided, prompt written
notice to the other party of any Claim and Intelligroup and SeraNova shall
jointly assume the defense thereof, including appeals, and to settle the same.
Each party shall, upon request, furnish all information and provide assistance
to the appropriate members of the SeraNova Group or the Intelligroup Group, as
applicable, and cooperate in every reasonable way to facilitate the defense
and/or settlement of any such Claim.
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(d) The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities or expenses in connection with the
remediation efforts set forth in Section (b) above, or the defense,
adjudication, or settlement referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any Claim. Intelligroup and SeraNova agree that
it would not be just and equitable if the expenses incurred in connection with
the remediation efforts set forth in Section (b) above, or the defense,
adjudication, or settlement of a Claim under this Section 4.8 were apportioned
on a pro rata basis without regard to the liability of each respective party
according a relative finding of fault. The relative fault of the applicable
member or members of the Intelligroup Group, on the one hand, and the applicable
member or members of the SeraNova Group, on the other hand, shall be apportioned
as is appropriate to reflect not only the relative benefits achieved but also
the relative fault assessed with respect to the Disputed Intellectual Property.
(e) The foregoing indemnity will not apply to any alleged
infringement or misappropriation if and to the extent such alleged infringement
or misappropriation arises from: (i) the use by any member of the SeraNova Group
or the Intelligroup Group of any of the Disputed Intellectual Property in
combination with any product, software or other material provided by a third
party after the Closing Date; or (ii) any changes made by any member of the
SeraNova Group or the Intelligroup Group in the Disputed Intellectual Property
after the Closing Date.
5. EXCHANGE OF INFORMATION; CONFIDENTIALITY.
5.1 AGREEMENT FOR EXCHANGE OF INFORMATION; ARCHIVES.
(a) Each of Intelligroup and SeraNova, on behalf of its
respective Group, agrees to provide, or cause to be provided, to each member of
the other Group, as soon as reasonably practicable after written request
therefor, any Information in the possession or under the control of such
respective Group which the requesting party reasonably needs: (i) to comply with
reporting, disclosure, filing or other requirements imposed on the requesting
party (including under applicable securities or tax laws) by a Governmental
Authority having jurisdiction over the requesting party; (ii) for use in any
judicial, regulatory, administrative, tax or other proceeding or in order to
satisfy audit, accounting, claims, regulatory, litigation, tax or other similar
requirements; or (iii) to comply with its obligations under this Agreement or
any Ancillary Agreement; provided, however, that in the event that any party
determines that any such provision of Information could be commercially
detrimental, violate any law or agreement, or waive any attorney-client
privilege, the parties shall take all reasonable measures to permit the
compliance with such obligations in a manner that avoids any such harm or
consequence.
(b) After the Closing Date, SeraNova shall have access during
regular business hours (as in effect from time to time) to the documents that
relate to the SeraNova Business that are in the possession or control of any
member of the Intelligroup Group. SeraNova may obtain copies (but not originals)
of documents for bona fide
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business purposes. Nothing herein, however, shall be deemed to restrict the
access of any member of the Intelligroup Group to any such documents or to
impose any liability on any member of the Intelligroup Group if any such
documents are not maintained or preserved by Intelligroup.
(c) After the date hereof SeraNova shall: (i) maintain in
effect at its own cost and expense adequate systems and controls to the extent
necessary to enable the members of the Intelligroup Group to satisfy their
respective reporting, accounting, audit and other obligations; and (ii) provide,
or cause to be provided, to Intelligroup in such form as Intelligroup shall
request, at no charge to Intelligroup, all financial and other data and
Information as Intelligroup determines necessary or advisable in order to
prepare Intelligroup financial statements and reports or filings with any
Governmental Authority.
5.2 OWNERSHIP OF INFORMATION. Any Information owned by one Group
that is provided to a requesting party pursuant to Section 5.1 shall be deemed
to remain the property of the providing party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such Information.
5.3 RECORD RETENTION. To facilitate the possible exchange of
Information pursuant to this Section 5 and other provisions of this Agreement,
the parties agree to use their reasonable best efforts to retain all Information
in their respective possession or control in accordance with the policies of
Intelligroup as in effect on the Closing Date. No party will destroy, or permit
any of its Subsidiaries to destroy, any Information which the other party may
have the right to obtain pursuant to this Agreement prior to the tenth (10th)
anniversary of the date hereof without first using its reasonable best efforts
to notify the other party of the proposed destruction and giving the other party
the opportunity to take possession of such Information prior to such
destruction; provided, however, that in the case of any Information relating to
Taxes or to Environmental Liabilities, such period shall be extended to the
expiration of the applicable statute of limitations (giving effect to any
extensions thereof).
5.4 LIMITATION OF LIABILITY. No party shall have any liability to
any other party in the event that any Information exchanged or provided pursuant
to this Agreement which is an estimate or forecast, or which is based on an
estimate or forecast, is found to be inaccurate, in the absence of willful
misconduct by the party providing such Information. No party shall have any
liability to any other party if any Information is destroyed after reasonable
best efforts by such party to comply with the provisions of Section 5.3.
5.5 OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION. The
rights and obligations granted under this Section 5 are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of Information set forth in any Ancillary Agreement.
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5.6 PRODUCTION OF WITNESSES; RECORDS; COOPERATION.
(a) After the Closing Date, except in the case of an
adversarial Action by one party against another party (which shall be governed
by such discovery rules as may be applicable under Section 6 or otherwise), each
party hereto shall use its reasonable best efforts to make available to each
other party, upon written request, the former, current and future directors,
officers, employees, other personnel and agents of the members of its respective
Group as witnesses (giving consideration to the business demands of such
individuals) and any books, records or other documents within its control or
which it otherwise has the ability to make available or as may reasonably be
required in connection with any Action in which the requesting party may from
time to time be involved, regardless of whether such Action is a matter with
respect to which indemnification may be sought hereunder. The requesting party
shall bear all costs and expenses in connection therewith.
(b) If an Indemnifying Party (Intelligroup or SeraNova as the
case may be) chooses to defend or to seek to compromise or settle any Third
Party Claim, or if any party chooses to prosecute or otherwise evaluate or to
pursue any claim against a third party, the other party shall use its best
efforts to make available to such Indemnifying Party (Intelligroup or SeraNova
as the case may be), upon written request, the former, current and future
directors, officers, employees, other personnel and agents of the members of its
respective Group as witnesses (giving consideration to the business demands of
such individuals) and any books, records or other documents within its control
or which it otherwise has the ability to make available or as may reasonably be
required in connection with such defense, settlement or compromise, or such
prosecution, evaluation or pursuit, as the case may be, and shall otherwise
cooperate in such defense, settlement or compromise, or such prosecution,
evaluation or pursuit, as the case may be.
(c) Without limiting the foregoing, the parties shall
cooperate and consult to the extent reasonably necessary with respect to any
Actions, contingent Liabilities and contingent gains.
(d) Without limiting any provision of this Section, each of
the parties agrees to cooperate, and to cause each member of its respective
Group to cooperate, with each other in the defense of any infringement or
similar claim with respect to any intellectual property and shall not claim to
acknowledge, or permit any member of its respective Group to claim to
acknowledge, the validity or infringing use of any intellectual property of a
third Person in a manner that would hamper or undermine the defense of such
infringement or similar claim.
(e) The obligation of the parties to provide witnesses
pursuant to this Section 5.6 is intended to be interpreted in a manner so as to
facilitate cooperation and shall include the obligation to provide as witnesses
inventors and other officers without regard to whether the witness or the
employer of the witness could assert a possible business conflict (subject to
the exception set forth in the first sentence of Section 5.6(a)).
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(f) In connection with any matter contemplated by this Section
5.6, the parties will enter into a mutually acceptable joint defense agreement
so as to maintain to the extent practicable any applicable attorney-client
privilege or work product immunity of any member of any Group.
5.7 CONFIDENTIALITY.
(a) Subject to Section 5.8, each of Intelligroup and SeraNova,
on behalf of itself and each other member of its respective Group, agrees to
hold, and to cause its respective directors, officers, employees, agents,
accountants, counsel and other advisors and representatives to hold, in strict
confidence, with at least the same degree of care that applies to Intelligroup's
confidential and proprietary information pursuant to policies in effect as of
the Closing Date, all Information concerning each such other Group that is
either in its possession (including Information in its possession prior to the
date hereof or the Closing Date) or furnished by any such other Group or its
respective directors, officers, employees, agents, accountants, counsel and
other advisors and representatives at any time pursuant to this Agreement, any
Ancillary Agreement or otherwise, and shall not use any such Information other
than for such purposes as shall be expressly permitted hereunder or thereunder,
except, in each case, to the extent that such Information has been: (i) in the
public domain through no fault of such party or any member of such Group or any
of their respective directors, officers, employees, agents, accountants, counsel
and other advisors and representatives; (ii) later lawfully acquired from other
sources by such party (or any member of such party's Group) which sources are
not themselves bound by a confidentiality obligation; or (iii) independently
generated without reference to any proprietary or confidential Information of
the other party.
(b) Each party agrees not to release or disclose, or permit to
be released or disclosed, any such Information to any other Person, except its
directors, officers, employees, agents, accountants, counsel and other advisors
and representatives who need to know such Information (who shall be advised of
their obligations hereunder with respect to such Information), except in
compliance with Section 5.8. Without limiting the foregoing, when any
Information is no longer needed for the purposes contemplated by this Agreement
or any Ancillary Agreement, each party will promptly after request of the other
party either return to the other party all Information in a tangible form
(including all copies thereof and all notes, extracts or summaries based
thereon) or certify to the other party that it has destroyed such Information
(and such copies thereof and such notes, extracts or summaries based thereon).
5.8 PROTECTIVE ARRANGEMENTS. In the event that any party or any
member of its Group either determines on the advice of its counsel that it is
required to disclose any Information pursuant to applicable law or receives any
demand under lawful process or from any Governmental Authority to disclose or
provide Information of any other party (or any member of any other party's
Group) that is subject to the confidentiality provisions hereof, such party
shall notify the other party prior to disclosing or providing such Information
and shall cooperate at the expense of the requesting party in seeking any
reasonable protective arrangements requested by such other party. Subject
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to the foregoing, the Person that received such request may thereafter disclose
or provide Information to the extent required by such law (as so advised by
counsel) or by lawful process or such Governmental Authority.
6. ARBITRATION; DISPUTE RESOLUTION.
6.1 AGREEMENT TO ARBITRATE.
(a) Except as otherwise specifically provided in any Ancillary
Agreement, the procedures for discussion, negotiation and arbitration set forth
in this Section 6.1 hereto shall apply to all disputes, controversies or claims
(each a "Dispute") that may arise out of or relate to, or arise under or in
connection with this Agreement or any Ancillary Agreement, or the transactions
contemplated hereby or thereby (including all actions taken in furtherance of
the transactions contemplated hereby or thereby on or prior to the date hereof),
or the commercial or economic relationship of the parties relating hereto or
thereto, between or among any member of the Intelligroup Group and the SeraNova
Group. Each party agrees on behalf of itself and each other member of its
respective Group that any Dispute shall be submitted to binding arbitration, in
accordance with the dispute resolution procedures specified in this Section. If
any of these procedures are determined to be invalid or unenforceable, the
remaining procedures shall remain in effect and binding on the parties to the
fullest extent permitted by law.
(b) The arbitration shall be held in Edison, New Jersey before
a panel of three arbitrators. Any member or members of the SeraNova Group or the
Intelligroup Group, as applicable, may by notice to the applicable member or
members of the SeraNova Group or the Intelligroup Group, as applicable, demand
arbitration, by serving on the other party a statement of the Dispute and the
facts relating or giving rise thereto, in reasonable detail, and the name of the
arbitrator selected by it. Within fifteen (15) days after receipt of such
notice, the other party shall name its arbitrator, and the two arbitrators named
by the parties shall, within fifteen (15) days after the date of such notice,
select the third arbitrator.
(c) The arbitration shall be conducted in accordance with the
procedures specified in this Section and shall be governed by the Commercial
Arbitration Rules of the American Aribitration Association, as may be amended
from time to time. In the event of a conflict, the provisions of this Section
shall control.
(d) Any issue concerning the extent to which any Dispute is
subject to arbitration, or concerning the applicability, interpretation, or
enforceability of these procedures, including any contention that all or part of
these procedures are invalid or unenforceable, shall be governed by the Federal
Arbitration Act and resolved by the arbitrators. No potential arbitrator may
serve on the panel unless first agreeing in writing to abide and be bound by
these procedures. The arbitrators may not award non-monetary or equitable relief
of any sort. They shall have no power to award damages inconsistent with this
Agreement or punitive damages or any other damages not measured by the
prevailing party's actual damages, and the parties expressly waive their right
to obtain
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such damages in arbitration or in any other forum. In no event, even if any
other portion of these procedures is adjudged invalid or unenforceable, shall
the arbitrators have power to make an award or impose a remedy that could not be
made or imposed by a court deciding the matter in the same jurisdiction.
(e) No discovery shall be permitted in connection with the
arbitration unless expressly authorized by the arbitration panel upon a showing
of substantial need by the party seeking discovery. All aspects of the
arbitration shall be treated as confidential. Neither the parties nor the
arbitrators may disclose the existence, content or results of the arbitration,
except as necessary to comply with legal or regulatory requirements. Before
making any such disclosure, a party shall give written notice to all other
parties and afford such parties a reasonable opportunity to protect their
interest. The result of the arbitration shall be a final decision that is
binding on the parties, and judgment on the arbitrators' award may be entered in
any court having jurisdiction. The cost of such arbitration shall be borne
equally by the parties.
(f) This Section shall not apply to any Dispute arising out of
or relating to the ownership of intellectual property. The application of this
Section to any other Dispute shall be waived only by written agreement of
Intelligroup and SeraNova. This Section shall be terminated only by written
agreement of Intelligroup and SeraNova.
6.2 CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise agreed
in writing, the parties will continue to provide service and honor all other
commitments under this Agreement and each Ancillary Agreement during the course
of dispute resolution pursuant to the provisions of this Section with respect to
all matters not subject to such dispute, controversy or claim.
6.3 LAW GOVERNING ARBITRATION PROCEDURES. The interpretation of the
provisions of this Section, only insofar as they relate to the agreement to
arbitrate and any procedures pursuant thereto, shall be governed by the Federal
Arbitration Act and other applicable federal law. In all other respects, the
interpretation of this Agreement shall be governed as set forth in Section 10.2.
7. EMPLOYEE RELATED MATTERS.
7.1 EMPLOYEE OFFERS. Prior to the Closing Date, SeraNova or one of
its Subsidiaries shall have made a written offer of employment or engagement to
each employee, independent contractor or consultant working in the SeraNova
Business listed on SCHEDULE 7.1 hereto. Such employment offers shall provide
that such individual shall commence work for SeraNova or the named Subsidiary on
or before the Closing Date. Such employment offers shall also require that such
individual shall, prior to the Closing Date, inform SeraNova of his or her
intention to accept or decline such offer and, if such individual intends to
accept such offer, to resign his or her employment with Intelligroup prior to or
as of the Closing Date.
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7.2 BENEFITS. As soon as practicable after the Closing Date,
Intelligroup shall perform and undertake all acts as may be necessary to
rollover or otherwise transfer the vested interests of employees in the
qualified and non-qualified pension plans and Section 401(k) plans of
Intelligroup to the corresponding plans maintained by SeraNova. Intelligroup
shall be responsible for any COBRA coverage continuation notices required to be
provided with respect to any employee who accepts employment with SeraNova. On
or prior to the Closing Date, Intelligroup and SeraNova shall take all actions
as may be necessary to approve the stock-based employee benefit plans of
SeraNova in order to satisfy the requirement of Rule 16b-3 under the Exchange
Act of 1934, as amended, and Section 162(m) of the Internal Revenue Code of
1986, as amended.
7.3 NO SOLICITATION OF EMPLOYEES. For a period of two (2) years
after the Closing Date, neither Intelligroup nor SeraNova or any member of their
respective Groups shall solicit any employee of the other to terminate his or
her employment to become an employee of the soliciting party, without the prior
written consent of the other party.
7.4 NO RIGHTS CONFERRED UPON EMPLOYEES. Nothing in this Agreement
shall be deemed to confer any rights or remedies of any employees, independent
contractors or consultants of any member of the Intelligroup Group or the
SeraNova Group (including individuals to whom SeraNova is to offer employment
pursuant to Section 7.1). No Person shall be a third party beneficiary with
respect to the provisions of this Section 7.
8. FURTHER ASSURANCES AND ADDITIONAL COVENANTS.
(a) In addition to the actions specifically provided for
elsewhere in this Agreement, each of the parties hereto shall use its reasonable
best efforts, prior to, on and after the Closing Date, to take, or cause to be
taken, all actions, and to do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable laws, regulations and agreements
to consummate and make effective the transactions contemplated by this Agreement
and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the
Closing Date, each party hereto shall cooperate with the other party, and
without any further consideration, but at the expense of the requesting party,
to execute and deliver, or use its reasonable best efforts to cause to be
executed and delivered, all instruments, including instruments of conveyance,
assignment and transfer, and to make all filings with, and to obtain all
consents, approvals or authorizations of, any Governmental Authority or any
other Person under any permit, license, agreement, indenture or other
instrument, and to take all such other actions as such party may reasonably be
requested to take by any other party hereto from time to time, consistent with
the terms of this Agreement and the Ancillary Agreements, in order to effectuate
the provisions and purposes of this Agreement and the Ancillary Agreements and
the transfers of the SeraNova Assets and the assignment and assumption of the
SeraNova Liabilities and the
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other transactions contemplated hereby and thereby. Without limiting the
foregoing, each party will, at the reasonable request, cost and expense of any
other party, take such other actions as may be reasonably necessary to vest in
such other party good and marketable title, if and to the extent it is
practicable to do so.
(c) On or prior to the Closing Date, Intelligroup and SeraNova
in their respective capacities as direct and indirect stockholders of their
respective Subsidiaries, shall each ratify any actions which are reasonably
necessary or desirable to be taken by Intelligroup, SeraNova or any Subsidiary
of Intelligroup or SeraNova, as the case may be, to effectuate the transactions
contemplated by this Agreement.
(d) Prior to the Closing Date, if one or more of the parties
identifies any commercial or other service that is needed to assure a smooth and
orderly transition of the businesses in connection with the consummation of the
transactions contemplated hereby that is not otherwise governed by the
provisions of this Agreement or any Ancillary Agreement, the parties will
cooperate in determining whether there is a mutually acceptable arm's-length
basis on which the other party will provide such service.
9. TERMINATION.
9.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
at any time prior to the date of the Closing Date by the mutual consent of
Intelligroup and SeraNova.
9.2 EFFECT OF TERMINATION. In the event of any termination of this
Agreement prior to the Closing Date, no party to this Agreement (or any of its
directors or officers) shall have any Liability or further obligation to any
other party.
10. MISCELLANEOUS.
10.1 COUNTERPARTS; ENTIRE AGREEMENT.
(a) This Agreement and each Ancillary Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other party.
(b) This Agreement, the Ancillary Agreements and the Exhibits,
Schedules and Appendices hereto and thereto contain the entire agreement between
the parties with respect to the subject matter hereof, supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject matter and there are no agreements or
understandings between the parties other than those set forth or referred to
herein or therein.
10.2 GOVERNING LAW. Except as set forth in Section 6.3, this
Agreement and, unless expressly provided therein, each Ancillary Agreement,
shall be
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governed by and construed and interpreted in accordance with the laws of the
State of New Jersey (other than as to its laws of arbitration which shall be
governed under the Federal Arbitration Act or other applicable federal law
pursuant to Section 6.3), irrespective of the choice of laws principles of the
State of New Jersey, as to all matters, including matters of validity,
construction, effect, enforceability, performance and remedies.
10.3 ASSIGNABILITY. Except as set forth in any Ancillary Agreement,
this Agreement and each Ancillary Agreement shall be binding upon and inure to
the benefit of the parties hereto and thereto, respectively, and their
respective successors and assigns; provided, however, that no party hereto or
thereto may assign its respective rights or delegate its respective obligations
under this Agreement or any Ancillary Agreement without the express prior
written consent of the other parties hereto or thereto.
10.4 THIRD PARTY BENEFICIARIES. Except for the indemnification
rights under this Agreement of any Intelligroup Indemnitee or SeraNova
Indemnitee in their respective capacities as such: (a) the provisions of this
Agreement and each Ancillary Agreement are solely for the benefit of the parties
and are not intended to confer upon any Person except the parties any rights or
remedies hereunder; and (b) there are no third party beneficiaries of this
Agreement or any Ancillary Agreement and neither this Agreement nor any
Ancillary Agreement shall provide any third person with any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement or any Ancillary Agreement. No
party hereto shall have any right, remedy or claim with respect to any provision
of this Agreement or any Ancillary Agreement to the extent such provision
relates solely to the other party hereto or the members of such other party's
Group.
10.5 NOTICES. All notices or other communications under this
Agreement or any Ancillary Agreement, except as may be specifically provided in
an Ancillary Agreement, shall be in writing and shall be deemed to be duly given
when: (a) delivered in person; or (b) deposited in the United States mail or
internationally recognized courier service, postage prepaid, addressed as
follows:
If to Intelligroup, to:
Intelligroup, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: President
If to SeraNova, to:
SeraNova, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: President
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Any party may, by notice to the other party, change the address to which such
notices are to be given.
10.6 SEVERABILITY. If any provision of this Agreement or any
Ancillary Agreement or the application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof or thereof, or the application of
such provision to Persons or circumstances or in jurisdictions other than those
as to which it has been held invalid or unenforceable, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby or thereby, as the case may be, is not affected in any
manner adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the parties.
10.7 HEADINGS. The article, section and paragraph headings contained
in this Agreement and in the Ancillary Agreements are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement or any Ancillary Agreement.
10.8 WAIVERS OF DEFAULT. Waiver by any party of any default by the
other party of any provision of this Agreement or any Ancillary Agreement shall
not be deemed a waiver by the waiving party of any subsequent or other default,
nor shall it prejudice the rights of the other party.
10.9 AMENDMENTS. No provisions of this Agreement or any Ancillary
Agreement shall be deemed waived, amended, supplemented or modified by any
party, unless such waiver, amendment, supplement or modification is in writing
and signed by the authorized representative of the party against whom it is
sought to enforce such waiver, amendment, supplement or modification.
10.10 LATE PAYMENTS. Except as expressly provided to the contrary in
this Agreement or in any Ancillary Agreement, any amount not paid when due
pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or
otherwise invoiced or demanded and properly payable that are not paid within
thirty (30) days of such xxxx, invoice or other demand) shall accrue interest at
a rate per annum equal to six percent (6%).
* * * * *
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IN WITNESS WHEREOF, the parties have caused this Contribution Agreement to
be executed by their duly authorized representatives.
INTELLIGROUP, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name:
Title
SERANOVA, INC.
By: /s/ Xxx Xxxxxx
-------------------------------------
Name: Xxx Xxxxxx
Title CEO
[Signature Page to Contribution Agreement]
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LIST OF EXHIBITS AND SCHEDULES
------------------------------
SCHEDULES
---------
2.4 - Delayed Asset Transfers
2.7 - List or Properties
3.1 - Excluded Consents
7.1 - Individuals to Whom Offers Shall Be Made
EXHIBITS
--------
A - Ancillary Agreements
B - SeraNova Assets
C - SeraNova Balance Sheet
D - SeraNova Contracts
E - SeraNova Liabilities
F - Permitted Liens
G - Licensed Intellectual Property
H - Intercompany Debt
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