EXHIBIT 10.1
EXECUTION VERSION
SIXTH AMENDMENT TO LOAN DOCUMENTS
AND WAIVER AGREEMENT
THIS SIXTH AMENDMENT TO LOAN DOCUMENTS AND WAIVER AGREEMENT (this "SIXTH
AMENDMENT") is made as of the 27th day of September, 2005, 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
which are now or which hereafter become a party hereto (collectively, the
"LENDERS" and individually a "LENDER") and PNC BANK, NATIONAL ASSOCIATION
("PNC"), as agent for Lenders (PNC, in such capacity, the "AGENT").
BACKGROUND
A. Borrowers have executed and delivered to PNC, in its capacity as the
Agent and sole Lender with respect to this transaction, one or more promissory
notes, letter agreements, loan agreements, security agreements, mortgages,
pledge agreements, collateral assignments, and other agreements, instruments,
certificates and documents, some or all of which are more fully described on
attached Exhibit A, which is made a part of this Sixth Amendment (collectively,
as amended from time to time, the "LOAN DOCUMENTS"), which Loan Documents
evidence or secure some or all of Borrowers' obligations to Lenders for one or
more loans or other extensions of credit (the "OBLIGATIONS").
B. Borrowers, Agent and Lenders desire to amend the Loan Documents as
provided for in this Sixth Amendment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Certain of the Loan Documents are amended as set forth in Exhibit A.
Any and all references to any Loan Document in any other Loan Document shall be
deemed to refer to such Loan Document as amended by this Sixth Amendment. This
Sixth Amendment is deemed incorporated into each of the Loan Documents. Any
initially capitalized terms used in this Sixth Amendment without definition
shall have the meanings assigned to those terms in the Loan Documents. To the
extent that any term or provision of this Sixth Amendment is or may be
inconsistent with any term or provision in any Loan Document, the terms and
provisions of this Sixth Amendment shall control.
2. Borrowers hereby certify that, except as otherwise waived as set forth
in Exhibit A: (a) all of their representations and warranties in the Loan
Documents, as amended by this Sixth Amendment, are, except as may otherwise be
stated in this Sixth Amendment: (i) true and correct as of the date of this
Sixth Amendment, (ii) ratified and confirmed without condition as if made anew,
and (iii) incorporated into this Sixth Amendment by reference; (b) no Event of
Default or event which, with the passage of time or the giving of notice or
both, would constitute an Event of Default, exists under any Loan Document which
will not be cured by the execution and effectiveness of this Sixth Amendment;
(c) no consent, approval, order or authorization of, or registration or filing
with, any third party is required in connection with the execution, delivery and
carrying out of this Sixth Amendment or, if required, has been obtained; and (d)
this Sixth Amendment has been duly authorized, executed and delivered so that it
constitutes the legal, valid and binding obligation of Borrowers, enforceable in
accordance with its terms. Borrowers confirm that the Obligations remain
outstanding without defense, set off, counterclaim, discount or charge of any
kind as of the date of this Sixth Amendment.
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3. Borrowers hereby confirm that any collateral for the Obligations,
including liens, security interests, mortgages, and pledges granted by Borrowers
or third parties (if applicable), shall continue unimpaired and in full force
and effect, and shall cover and secure all of Borrowers' existing and future
Obligations, as modified by this Sixth Amendment.
4. As a condition precedent to the effectiveness of this Sixth Amendment,
Borrowers shall comply with the terms and conditions (if any) specified in
Exhibit A.
5. This Sixth Amendment may be signed in any number of counterpart copies
and by the parties to this Sixth Amendment on separate counterparts, but all
such copies shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Sixth Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart.
Any party so executing this Sixth Amendment by facsimile transmission shall
promptly deliver a manually executed counterpart, provided that any failure to
do so shall not affect the validity of the counterpart executed by facsimile
transmission.
6. This Sixth Amendment will be binding upon and inure to the benefit of
Borrowers, Agent and Lenders and their respective successors and assigns.
7. This Sixth Amendment will be interpreted and the rights and liabilities
of the parties hereto determined in accordance with the laws of the State of New
Jersey, excluding its conflict of laws rules.
8. Except as amended hereby, the terms and provisions of the Loan
Documents remain unchanged, are and shall remain in full force and effect unless
and until modified or amended in writing in accordance with their terms, and are
hereby ratified and confirmed. Except as expressly provided herein, this Sixth
Amendment shall not constitute an amendment, waiver, consent or release with
respect to any provision of any Loan Document, a waiver of any default or Event
of Default under any Loan Document, or a waiver or release of any of Agent's or
Lenders' rights and remedies (all of which are hereby reserved). BORROWERS
EXPRESSLY RATIFY AND CONFIRM THE WAIVER OF JURY TRIAL PROVISIONS CONTAINED IN
THE LOAN DOCUMENTS.
[SIGNATURE PAGE FOLLOWS]
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WITNESS the due execution of this Sixth Amendment as a document under seal
as of the date first written above.
INTELLIGROUP, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Financial Officer and Treasurer
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
EMPOWER, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: Treasurer
c/o Intelligroup, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
PNC BANK, NATIONAL ASSOCIATION, as Lender
and as Agent
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
PNC Business Credit
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment Percentage: 100%
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EXHIBIT A TO
SIXTH AMENDMENT TO LOAN DOCUMENTS AND WAIVER AGREEMENT
DATED AS OF SEPTEMBER 27, 2005
A. The "Loan Documents" that are the subject of this Sixth Amendment
include the following (as any of the foregoing have previously been
amended, modified or otherwise supplemented):
1. The Amended and Restated Revolving Credit Loan and Security
Agreement dated May 31, 2000, as amended by the: (a) First
Amendment to Loan Documents and Waiver Agreement dated Xxxxx
00, 0000, (x) Second Amendment to Loan Documents and Waiver
Agreement dated January 6, 2003, (c) Third Amendment to Loan
Documents dated July 21, 2003, (d) Fourth Amendment to Loan
Documents and Waiver Agreement dated October 2, 2003, and (e)
Fifth Amendment to Loan Documents dated as of September 29,
2004, and as further amended by this Sixth Amendment to Loan
Documents and Waiver Agreement (as amended, the "Loan
Agreement");
2. The First Amended and Restated Secured Revolving Note dated
July 21, 2003 (the "Note"); and
2. All other documents, instruments (including, without
limitation, promissory notes), agreements, and certificates
executed and delivered in connection with the Loan Documents.
B. The Loan Documents are hereby amended as follows:
1. The Loan Agreement, the Note and all the other Loan Documents
are hereby amended to provide that (a) Borrowers shall have no
option at any time to elect to borrow, convert to or continue
a Eurodollar Rate Loan, and (b) all Advances shall bear
interest at the Revolving Interest Rate.
2. Article I of the Loan Agreement, "Definitions", Section 1.2,
"General Terms", is hereby amended to amend and restate the
definitions of "Change of Management" and "Revolving Interest
Rate" as follows:
"Change of Management" shall mean any change in
members of Borrowers' executive team, that is in the positions
of Chief Executive Officer, President or Chief Financial
Officer which it is not acceptable to Agent in its discretion.
"Revolving Interest Rate" shall mean an interest rate
per annum equal to the Base Rate.
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"Undrawn Availability" at a particular date shall
mean an amount equal to (a) the lesser of (i) the Formula
Amount plus the redemption value of the BlackRock Account,
specifically Account No. 26198 (ii) the Maximum Revolving
Advance Amount, minus (b) the sum of (i) the outstanding
amount of Advances plus (ii) all amounts due and owing to
Borrowers' trade creditors which are outstanding sixty (60)
days beyond normal trade terms, plus (iii) fees and expenses
for which Borrowers are liable hereunder but which have not
been paid or charged to Borrowers' Account.
3. Article XIII of the Loan Agreement, "Effective Date and
Termination", is hereby amended to amend and restate Section 13.1,
"Term", as follows:
13.1 Term. This Agreement, which shall inure
to the benefit of and shall be binding upon the respective
successors and permitted assigns of each Borrower, Agent and
each Lender, shall become effective on the date hereof and
shall continue in full force and effect until May 31, 2006
(the "Term") unless sooner terminated as herein provided.
Borrowers may terminate this Agreement at any time upon ninety
(90) days' prior written notice upon payment in full of the
Obligations. In the event the Obligations are prepaid in full
prior to May 31, 2006, Borrowers shall pay to Agent for the
benefit of Lenders an early termination fee in an amount equal
to one-half of one percent (.50%) of the Maximum Revolving
Advance Amount. Provided, however, no Early Termination Fee
shall be due in the event of a refinancing of the Obligations
by PNC.
C. Waiver Agreement:
1. Borrowers hereby acknowledge and disclose that:
(a) Under the terms of the Loan Agreement, Borrowers
agreed to comply with certain covenants, terms and
conditions. Borrowers have failed to comply with a
number of such covenants, terms and conditions, as
enumerated on Schedule A attached hereto and made a
part hereof.
(b) These failures to comply constitute Events of Default
under the terms and conditions of the Loan Agreement.
2. Borrowers have requested that Lenders waive:
(a) the Events of Default enumerated on Schedule A; and
(b) the rights and remedies available as a result of the
existence or future occurrence of the existing and
prospective Events of Default enumerated on Schedule
A.
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3. Lenders hereby waive:
(a) the Events of Default enumerated on Schedule A; 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 Events of Default enumerated on
Schedule A.
4. Borrowers and Agent hereby agree and acknowledge, as follows:
(a) These waivers are specific to the Events of Default
enumerated on Schedule A.
(b) These waivers are not intended and shall not be
deemed to extend to any other Default or Event of
Default whether known or unknown which may presently
exist under the Loan Agreement or which may occur
hereafter.
(c) These waivers shall not obligate the Agent or any
Lender, or be construed to require the Agent or any
Lender, to waive any other Defaults or Events of
Default, whether now existing or which may occur
after the date of this waiver.
(d) These waivers shall not relieve or release Borrowers
in any way from any of their duties, obligations,
covenants or agreements under the Loan Agreement or
the other Loan Documents or from the consequences of
any Defaults or Events of Default thereunder, except
as expressly described above.
(e) To the extent Borrowers' Average Undrawn Availibility
was less than Five Million Dollars ($5,000,000.00)
during the month of November, 2004, any failure by
Borrowers to comply with the financial covenant
requirements set forth in Sections 7.18, "Total
Stockholders Equity", 7.19, "Unconsolidated
Stockholders Equity," and 7.21, "Fixed Charge
Coverage Ratio", shall not be deemed an Event of
Default.
(f) Notwithstanding anything to the contrary which may be
contained, or may be alleged to be contained, in any
prior waiver agreement delivered by Agent to
Borrowers, it is understood that Borrowers are
expected to resume timely filing of the reports and
financial disclosures due from time to time to the
listing exchange upon which Borrowers' shares are
traded and to any applicable governmental agency
beginning with the filing of the Borrowers' annual
report on Form 10-K for the year ended December 31,
2005.
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D. In consideration of the facilities being granted by Agent and Lenders
to Borrowers under the terms and conditions of this Sixth Amendment and
for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the continued effectiveness of this
Sixth Amendment is conditioned upon satisfaction by Borrowers of each
of the following:
1. Borrowers' payment to Agent of a fee in the sum of Twenty
Five Thousand Dollars ($25,000.00) which fee, shall be due
and payable in full, and deemed non-refundable upon the
execution and delivery of this Sixth Amendment. Such fee may
be paid by Agent's charging an Advance against the Borrowers'
Revolving Loan and paying the proceeds of such Advance to
Lenders. Borrowers hereby consent to Agent's making such
charge.
2. Agent's receipt of a fully executed counterpart of (a) this
Sixth Amendment, (b) a corporate resolution by each Borrower,
in form and substance acceptable to Agent, authorizing this
Sixth Amendment, and (c) each other document and instrument
as may be required by Agent in conjunction with this Sixth
Amendment, in form and substance satisfactory to Agent.
3. Borrowers' submission, (i) not later than September 30, 2005,
of their draft, unaudited financial statements for the fiscal
year ending December 31, 2004, in form and substance
satisfactory to Agent and (ii) not later than October 15,
2005, of their audited financial statements for the fiscal
year ending December 31, 2004, and Agent's determination, in
its discretion, that such financial statements (a) comply
with the requirements of Section 9.7 of the Loan Agreement,
and (b) do not differ, in any material respect, from the
internally prepared financial statements delivered to Agent
by Borrowers for the same fiscal year.
4. 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 Sixth Amendment. 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.
[END OF EXHIBIT A TO SIXTH AMENDMENT]
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SCHEDULE A
TO EXHIBIT A TO SIXTH AMENDMENT
WAIVED EVENTS OF DEFAULT
1. Borrowers' failure to comply with the requirement to timely deliver
monthly accounts receivable ageings and accounts payable schedules as
required by Section 9.2, "Schedules", of the Loan Agreement for the
months of June, 2004 through and including November, 2004.
2. Borrowers' failure to comply with the requirement to timely deliver
quarterly financial statements as required by Section 9.8, "Quarterly
Financial Statements", of the Loan Agreement for the quarters ending
June 30, 2004, September 30, 2004, December 31, 2004 and March 31,
2005.
3. Borrowers' failure to comply with the requirement to timely deliver
monthly financial statements as required by Section 9.9, "Monthly
Financial Statements", of the Loan Agreement for the months of June 30,
2004 through and including May, 2005.
4. Borrowers' failure to comply with the requirement to deliver an annual
financial statement as requested by Section 9.7, "Annual Financial
Statements", of the Loan Agreement for the fiscal year ending December
31, 2004.
5. Borrowers' removal of Nararjun Xxxxxxxxxxxx as Chief Executive Officer
and President, which constitutes a Change of Management, which is an
Event of Default pursuant to Section 10.14 of the Loan Agreement.
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