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EXHIBIT 10.19
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
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 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 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, 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
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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 Section 2(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 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 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 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 enforceablility 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.
3. Waiver of Compliance. The following waiver by Holder shall be effective
so long as it 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
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requirement that the Obligor make a mandatory prepayment of
principal to the Holder in an amount equal to three million
dollars ($3,000,000) and agrees not to exercise its rights
under Section 7 of the Note. Notwithstanding the foregoing
waiver of prepayment, all unpaid amounts of principal and
interest due under the Note shall remain the obligation of the
Obligor and shall be due and payable pursuant to the terms of
the Note, as amended by this Waiver. This Waiver shall not
apply to any subsequent equity or debt financings by the
Obligor.
4. Notice. Obligor hereby waives presentment, demand, protest or notice of
any kind in connection with this Waiver.
5. Currency. All references to "$" or "dollars" herein shall mean United
States dollars.
6. Entire Agreement. The Note (including the documents and instruments
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 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 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/ Xxxxx Xxxxxx
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Print Name: Xxxxx Xxxxxx
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Title: Corporate Controller
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INTELLIGROUP, INC.
By: /s/
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Print Name:
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Title:
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