WAIVER AGREEMENT
THIS WAIVER AGREEMENT (this "Waiver") is entered into on the 22nd day of
March, 2004, by and among INTELLIGROUP, INC., a corporation organized under the
laws of the State of New Jersey and EMPOWER, INC., a corporation organized under
the laws of the State of Michigan (each a "Borrower" and collectively
"Borrowers"), the financial institutions (collectively, the "Lenders" and
individually a "Lender") which are party to the Loan Agreement (as defined
below) and PNC BANK, NATIONAL ASSOCIATION ("PNC"), as agent for Lenders (PNC, in
such capacity, the "Agent").
BACKGROUND:
A. The Borrowers, Lenders and Agent are parties to that certain Amended
and Restated Revolving Credit Loan and Security Agreement dated May 31, 2000, as
amended by the First Amendment to Loan Documents and Waiver Agreement dated
March 27, 2002, by the Second Amendment to Loan Documents and Waiver Agreement
dated January 6, 2003, by the Third Amendment to Loan Documents dated July 21,
2003, and by the Fourth Amendment to Loan Documents and Waiver Agreement dated
as of October 22, 2003 (as amended, the "Loan Agreement").
B. Borrowers failed to comply with the Unconsolidated Stockholders'
Equity requirement set forth in the Loan Agreement for the fiscal year ending
December 31, 2003 and have requested that Lenders waive such non-compliance.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Borrowers hereby acknowledge that:
(a) Borrowers failed to comply with Section 7.19,
"Unconsolidated Stockholders Equity" of the Loan
Agreement, which requires that Borrowers'
Unconsolidated Stockholders Equity as of each fiscal
year end be not less than one hundred five percent
(105%) of that as of the end of the immediately
preceding fiscal year, because Borrowers'
Unconsolidated Stockholders Equity as of December 31,
2003 was 102% of that as of December 31, 2002; and
(b) This failure to comply constitutes an Event of
Default under the terms and conditions of the Loan
Agreement.
2. Borrowers have requested that Lenders waive:
(a) the requirement that Borrowers comply with Section
7.19 as of the December 31, 2003 fiscal year end; and
(b) the rights and remedies available to Lenders and
Agent as a result of the existence of the Event of
Default enumerated in Section 1 above.
3. Lenders hereby waive:
(a) the requirement that Borrowers comply with Section
7.19 as of the December 31, 2003 fiscal year end; and
(b) the right to exercise the rights and remedies which
are available to Agent and Lenders pursuant to the
Loan Agreement, at law and in equity as a result of
the existence of the Event of Default enumerated in
subsection 1 above.
4. Borrowers hereby acknowledge and agree that:
(a) The waivers provided in Section 3 are specific to the
Event of Default and fiscal period enumerated in
Section 1.
(b) These waivers are not intended and shall not be
deemed to extend to any other Event of Default
whether known or unknown which may presently exist
under the Loan Agreement or which may occur
hereafter.
(c) The granting of these waivers in this instance does
not in any way obligate Lenders to grant any other
waiver, whether upon the re-occurrence of the Event
of Default noted in Section 1 or upon the occurrence
of any other Event of Default under the Loan
Agreement.
5. Borrowers hereby agree that, in consideration of the waivers being
granted by Agent and Lenders to Borrowers under this Waiver and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the effectiveness of this Waiver is conditioned upon satisfaction
by the Borrowers of the following:
(a) Borrowers' payment to PNC of a Five Thousand Dollar
($5,000.00) waiver fee which shall be due and payable
in full, and deemed non-refundable, upon the
execution and delivery of this Waiver. Such fee may
be paid by Agent's charging an Advance against the
Borrowers' Revolving Loan and paying the proceeds of
such Advance to PNC. Borrowers hereby consent to
Agent's making such charge.
(b) Agent's receipt of a fully executed counterpart of
this Waiver.
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(c) Borrowers' payment to Agent's counsel, immediately
upon presentation of an invoice, of all reasonable
fees and expenses of such counsel incurred in
conjunction with the preparation and execution of
this Waiver. Such fees and expenses may be paid by
Agent's charging an Advance against the Borrowers'
Revolving Loan and retaining the proceeds of such
Advance. Borrowers hereby consent to Agent's making
such charge.
WITNESS the due execution of this Waiver as a document under seal as of
the date first written above.
INTELLIGROUP, INC.
By: /s/ Xxxxxx Xxxx
-----------------------------------------
Name: Xxxxxx Xxxx
Title: Acting Chief Financial Officer
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
EMPOWER, INC.
By: /s/ Will Xxxxx
----------------------------------------
Name: Will Xxxxx
Title: Managing Director
c/o Intelligroup, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
PNC BANK, NATIONAL ASSOCIATION,
as Lender and as Agent
By: /s/ Xxxx Xxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
PNC Business Credit
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment Percentage: 100%
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