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Agreement - INTELLIGROUP INC - 6-14-1996

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Agreement - INTELLIGROUP INC - 6-14-1996 Powered By Docstoc
					Exhibit 10.15 AGREEMENT OF WAIVER AND CONSENT This Agreement of Waiver and Consent ( the "Agreement") is made as of June 4, 1996, by and among Intelligroup, Inc., a New Jersey corporation (the "Company" or "Intelligroup"), the current shareholders of Intelligroup (the "Shareholders"), and Summit Ventures IV, L.P. and Summit Investors III, L.P. (collectively, "Summit"). WHEREAS, Intelligroup, the Shareholders and Summit are parties to that certain Debenture and Warrant Purchase Agreement dated as of April 10, 1996 (the "Purchase Agreement") and certain other related agreements, including (i) the Warrant Agreement and related Warrant Certificates, (ii) the Redemption Agreement, (iii) the Registration Rights Agreement, and (iv) the Shareholders' Agreement, each dated as of April 10, 1996 (all defined terms used herein and not otherwise defined herein shall have the meaning ascribed thereto in the applicable aforementioned agreement); and WHEREAS, the Board of Directors of Intelligroup (the "Board") has approved a proposed underwritten initial public offering of the Common Stock of Intelligroup (the "IPO"), in which the Company proposes to issue and sell shares of Common Stock and certain shareholders, including the Shareholders and, upon the exercise of the Warrants to purchase Common Stock, Summit, propose to sell shares of Common Stock; and WHEREAS, as a condition precedent to the consummation of the IPO, certain waivers and amendments are necessary to the aforementioned documents; NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. WAIVER OF REDEMPTION RIGHTS. Upon the declaration of effectiveness ("Effectiveness") by the Securities and Exchange Commission (the "SEC") of the Company's Registration Statement filed in connection with the IPO, Summit shall waive any and all of its redemption rights as contemplated by section 1.3 of the Purchase Agreement and as set forth with specificity in the Redemption Agreement. Upon Effectiveness, the Redemption Agreement shall terminate and shall be of no further force or effect. 2. WAIVER OF LIMITATION ON OPTION SHARES. Effective as of the date hereof, Summit hereby waives any and all limitations as to the scope of, size of, or eligibility under, the Company's stock option plans as set forth in Section 5.8 of the Purchase Agreement. Upon the date hereof, such Section 5.8 shall be deemed to be deleted from the Purchase Agreement and shall be of no further force or effect. It is understood and agreed that the Company shall comply in all respects with the terms of the Company's 1996 Stock

Plan and 1996 Non-Employee Stock Option Plan, as adopted by the Board and approved by the shareholders of the Company. 3. WAIVER OF PREEMPTIVE RIGHTS. Effective as of the date hereof, and subject to the condition that, from the date hereof through Effectiveness of the IPO or until the earlier termination of the IPO, the Company not issue any securities, other than options granted pursuant to the 1996 Stock Plan or the 1996 Non-Employee Director Stock Option Plan or upon the exercise of outstanding options or warrants, Summit hereby waives any and all preemptive rights set forth in or contemplated by Article VI, Sections 6.1-6.5 of the Purchase Agreement. Upon the date hereof and subject to the foregoing condition, such Article VI shall be deemed to be deleted from the Purchase Agreement and shall be of no further force or effect; provided that upon the first to occur of termination of the IPO prior to Effectiveness or termination of this Agreement in accordance with its terms, all such preemptive rights shall be reinstated. 4. DEFINITION OF QUALIFIED PUBLIC OFFERING. Effective as of the date hereof, the parties hereto agree that the definition of "Qualified Public Offering" set forth in Article XI of the Purchase Agreement is hereby amended to provide that the minimum net proceeds to the Company be equal to at least $15,000,000 and not $20,000,000. 5. WAIVER OF VOTING RIGHTS OF WARRANTHOLDERS. Effective as of the date hereof, Summit hereby waives its rights to vote as a warrant holder on an as-converted to Common Stock basis as set forth in Section 11 of the Warrant Agreement and as provided in the Warrant Certificates. Upon the date hereof, Section 11 of the Warrant Agreement and the applicable provisions set forth in the penultimate paragraph of page (ii) of each of the Warrant Certificates shall be deemed to be deleted in their entirety. Such provisions shall be of no further force or effect. The Company agrees that until the first to occur of Effectiveness or termination of this Agreement in accordance with its terms, the Company will not submit any action for approval or any other action by its shareholders without the consent of Summit, such consent not to be unreasonably withheld. 6. RIGHT TO EXERCISE WARRANTS; COVENANT TO EXERCISE WARRANTS. Effective as of the date hereof, the parties hereto agree that Section 4 (a) of the Warrant Agreement and the first paragraph of each of the Warrant Certificates are hereby amended to provide that each Warrant may first be exercised upon the Effectiveness, as herein defined, rather than not upon the consummation of an initial public offering of the Common Stock. Summit hereby covenants and agrees that it shall exercise all of the outstanding Warrants held by Summit upon notice of Effectiveness, and shall immediately thereafter deliver to the Company (i) duly -2-

authorized and executed forms of election to purchase shares of Common Stock, and (ii) the original Warrant Certificates for cancellation by the Company. 7. TERMINATION OF SHAREHOLDERS' AGREEMENT; SURVIVAL OF RIGHT OF PARTICIPATION. Upon Effectiveness, the parties hereto agree that the Shareholders' Agreement shall terminate and shall be of no further force or effect. Notwithstanding the foregoing, Section 4 of the Shareholders' Agreement, which sets forth the right of Summit to participate in sales by the current shareholders of Intelligroup, shall survive and continue to be binding upon the parties thereto. The other provisions of the Shareholders' Agreement which are necessary for definition purposes shall be used for such informational purposes only. 8. WAIVER OF CERTAIN REGISTRATION RIGHTS. Effective upon the date hereof, Summit hereby agrees to waive any and all registration rights as to the IPO, except as provided in the Underwriting Agreement between the Company, the Selling Shareholders (to include Summit), and the representatives of the underwriters. It is further understood that Summit shall be entitled to sell an aggregate of 50,000 shares of Common Stock in the IPO and an aggregate of 7,500 shares of Common Stock (representing Summit's pro rata allocation of the underwriters' over-allotment option) in the event the underwriters' over-allotment option is exercised in full. 9. TERMINATION UPON CANCELLATION OF IPO; REVERSION. In the event the Company does not consummate the IPO by October 31, 1996, the IPO is not consummated within ten days of Effectiveness or upon earlier notice to the Company from the representatives of the underwriters of the IPO that the IPO has been terminated, this Agreement shall be terminated and deemed to be of no further force and effect. The modified provisions of each agreement referenced above shall revert to the form of the executed original as if this Agreement never was in effect. 10. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall constitute an original. 11. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of any of the parties. -3-

12. NOTICE. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receipt made therefor by the party addressee, on the date of such receipt, or (ii) if mailed by domestic certified or registered mail with postage prepaid, on the third business day after the date postmarked. Addresses for notice to any party are as shown in the Purchase Agreement, or as subsequently modified by written notice. 13. SEVERABILITY. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 14. AMENDMENT. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by all of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 15. INTEGRATION AND ENTIRE AGREEMENT. Except as provided in this Agreement of Waiver and Consent, the Purchase Agreement and documents and agreements contemplated thereby and all of their respective terms and provisions remain in full force and effect. 16. COMPOSITION OF COMMITTEES OF THE BOARD. The Company agrees that it will take no action to enlarge or change the composition of the Audit, Compensation, Option or Pricing Committees of the Board, as they exist on the date hereof without the consent of Summit. Such restriction shall continue until the first to occur of the consummation of the IPO or the termination of this Agreement in accordance with its terms. ************** -4-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. INTELLIGROUP, INC. By:_____________________________________ Ashok Pandey President and Chief Executive Officer SUMMIT VENTURES, IV By: Summit Partners, IV, L.P. Its General Partner By: Stamps, Woodsum & Co. IV, Its General Partner By: ____________________________________ Its General Partner SUMMIT INVESTORS III, L.P. By:_____________________________________ Authorized Signatory INTELLIGROUP SHAREHOLDERS Ashok Pandey Rajkumar Koneru Nagarjun Valluripalli -5-

EXHIBIT 11 INTELLIGROUP, INC. AND SUBSIDIARY COMPUTATION OF PER SHARE EARNINGS
THREE MONTHS ENDED MARCH 31, --------------------------1995 1996 --------------------$(1,048,000) $ 428,000 =========== =========== 12,576,666 1,390,364 ----------13,967,030 =========== $ (0.08) =========== 12,576,666 1,390,364 ----------13,967,030 =========== $ 0.03 ===========

Net income (loss)..................... Weighted average shares outstanding......................... Incremental shares considered outstanding (1)..................... Shares used in per share calculation......................... Net income (loss) per share...........

YEARS ENDED DECEMBER 31, --------------------------1994 1995 --------------------$ (437,000) $(1,059,000) =========== =========== 12,576,666 1,390,364 ----------13,967,030 =========== $ (0.03) =========== 12,576,666 1,390,364 ----------13,967,030 =========== $ (0.08) ===========

(1) Pursuant to the requirements of the Securities and Exchange Commission, stock options and warrants issued by the Company during the twelve months immediately preceding the initial public offering have been included in computing net income (loss) per share as if they were outstanding for all periods using the treasury stock method.

Exhibit 16 [AMPER, POLITZINER & MATTIA LETTERHEAD] June 12, 1996 Securities and Exchange Commission 450 Fifth Avenue N.W. Washington D.C. 20549 RE: Intelligroup, Inc. We have read the Experts section Intelligroup, Inc., Form SB-2 which is scheduled to be filed with the Securities and Exchange Commission in June 1996 and are in agreement with the statements in the second paragraph as they relate to our professional relationship with Intelligroup, Inc. Sincerely yours,
/s/ Amper, Politziner & Mattia - ---------------------------------AMPER, POLITZINER & MATTIA

EXHIBIT 21 SUBSIDIARIES Oxford Systems Inc., a New Jersey corporation and a wholly-owned subsidiary of Intelligroup, Inc. Intelligroup New Zealand Limited, a corporation formed pursuant to the laws of New Zealand and a wholly-owned subsidiary of Intelligroup, Inc.

EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS To Intelligroup, Inc.: As independent public accountants, we hereby consent to the use of our report and all references to our firm included in or made part of this registration statement. ARTHUR ANDERSEN LLP Princeton, New Jersey June 12, 1996

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED FINANCIAL STATEMENTS INCLUDED IN THE REGISTRANT'S FORM SB-2 FOR THE PERIOD ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM SB-2.

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

YEAR DEC 31 1995 JAN 01 1995 DEC 31 1995 71,000 0 5,260,000 (531,000) 0 6,472,000 381,000 (99,000) 6,784,000 8,069,000 0 0 0 126,000 (1,492,000) 6,784,000 24,589,000 24,589,000 20,021,000 20,021,000 4,452,000 0 1,175,000 (1,059,000) 0 (1,059,000) 0 0 0 (1,059,000) (.08) (.08)

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED INTERIM FINANCIAL STATEMENTS INCLUDED IN THE REGISTRANT'S FORM SB-2 FOR THE PERIOD ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM SB-2.

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

3 MOS DEC 31 1996 JAN 01 1996 MAR 31 1996 79,000 0 6,159,000 (561,000) 0 7,243,000 408,000 (123,000) 7,642,000 8,506,000 0 0 0 126,000 (1,064,000) 7,642,000 8,836,000 8,836,000 6,423,000 6,423,000 1,469,000 0 315,000 629,000 201,000 428,000 0 0 0 428,000 .03 .03


				
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