Sample Business Contracts


Loan Documents and Waiver Agreement [Amendment No. 1] - Intelligroup Inc., Empower Inc. and PNC Bank NA



                        FIRST AMENDMENT TO LOAN DOCUMENTS
                                       and
                                WAIVER AGREEMENT

     THIS  FIRST  AMENDMENT  TO  LOAN  DOCUMENTS  and  WAIVER   AGREEMENT  (this
"AMENDMENT")  is  made  as of  March  27,  2002,  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 Lenders and Agent 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  Amendment
(collectively,  as amended from time to time, the "LOAN  DOCUMENTS"),  and 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 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  Amendment.  This
Amendment is deemed incorporated into each of the Loan Documents.  Any initially
capitalized  terms  used in this  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 Amendment is or may be  inconsistent  with any term or
provision in any Loan Document, the terms and provisions of this Amendment shall
control.

     2.  Borrowers  hereby certify that:  (a) all of their  representations  and
warranties in the Loan Documents,  as amended by this Amendment,  are, except as
may otherwise be stated in this  Amendment:  (i) true and correct as of the date
of this  Amendment,  (ii)  ratified and confirmed  without  condition as if made
anew, and (iii)  incorporated into this 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 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 Amendment or, if required, has been obtained, and

<PAGE>

(d) this 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 Amendment.

     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 Amendment.

     4.  As a  condition  precedent  to the  effectiveness  of  this  Amendment,
Borrowers  shall  comply with the terms and  conditions  (if any)  specified  in
Exhibit A, if any.

     5.  This Amendment may be signed in any number of counterpart copies and by
the  parties to this  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  Amendment by  facsimile  transmission
shall be effective as delivery of a manually executed counterpart.  Any party so
executing this  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  Amendment  will be  binding  upon  and  inure to the  benefit  of
Borrowers, Agent and Lenders and their respective successors and assigns.

     7.  This Amendment has been  delivered to and accepted by Agent and will be
deemed to be made in the State of New Jersey. This 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 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.


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<PAGE>

     WITNESS the due execution of this  Amendment as a document under seal as of
the date first written above.


                                            INTELLIGROUP, INC.

                                            By: /s/ Nicholas Visco
                                               ---------------------------------
                                            Name:  Nicholas Visco
                                            Title: Chief Financial Officer

                                            499 Thornall Street
                                            Edison, New Jersey 08837

                                            EMPOWER, INC.

                                            By: /s/ Nicholas Visco
                                               ---------------------------------
                                            Name:  Nicholas Visco
                                            Title: Secretary

                                            c/o Intelligroup, Inc.
                                            499 Thornall Street
                                            Edison, New Jersey 08837

                                            PNC BANK, NATIONAL ASSOCIATION, as
                                            Lender and as Agent

                                            By: /s/ Susanne Raschner
                                               ---------------------------------
                                            Name:  Susanne Raschner
                                            Title: Vice President

                                            PNC Business Credit
                                            70 East 55th Street, 14th Floor
                                            New York, New York 10022

                                            Commitment Percentage:  100%


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<PAGE>

                                  EXHIBIT A TO
                        FIRST AMENDMENT TO LOAN DOCUMENTS
                                       and
                                WAIVER AGREEMENT
                           dated as of March 27, 2002


A.   The "Loan  Documents" that are the  subject of this  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 (the "Loan Agreement"); and

     2.   All  other  documents,   instruments,   agreements,  and  certificates
          executed and delivered in connection with the Loan Documents listed in
          this Section A.

B.   The Loan Documents are amended as follows:

     1. The  definitions  of "Total  Stockholders  Equity"  and  "Unconsolidated
     Stockholders  Equity"  sect  forth  in  Article  I of the  Loan  Agreement,
     "Definitions", are hereby amended and restated as follows:

              "Total  Stockholders  Equity"  shall mean,  at a  particular
               ---------------------------
              date, (a) the aggregate amount of all assets of Borrowers on
              a consolidated  basis as may be properly  classified as such
              in accordance with GAAP  consistently  applied  exclusive of
              Borrowers'  investment  in SeraNova,  less (b) the aggregate
              amount of all liabilities of the Borrowers on a consolidated
              basis.  Notwithstanding  anything  contained  herein  to the
              contrary, the computation of Total Stockholders Equity shall
              exclude any changes  thereto  (positive or  negative)  other
              than from the result of  operations;  specifically  excluded
              from  this  computation  are  any  non-operational  factors,
              events or  circumstances,  such as, but not  limited to, the
              issuance of stock, options, warrants or similar instruments,
              the   repurchases  or  redemption  of  stock  or  unrealized
              currency  transactions,  the sale (on  terms  acceptable  to
              Lenders  and with the prior  written  consent of Lenders) of
              all or  substantially  all of the  stock  or  assets  of any
              foreign  Subsidiary of Borrowers and any write-down or write
              off (up to but not exceeding the sum of  $10,833,000) of the
              note due from  SeraNova,  provided also,  however,  sales of
              other assets not in the ordinary course of business shall be
              included in said computation.

              "Unconsolidated   Stockholders  Equity"  shall  mean,  at  a
               -------------------------------------

              particular  date, (a) the aggregate  amount of all assets of
              Borrowers  and  their  respective   subsidiaries  which  are
              organized  under the laws of one of the states of the United
              States (exclusive of Borrower's


<PAGE>

              investment in Sera Nova) on a  consolidated  basis as may be
              properly   classified  as  such  in  accordance   with  GAAP
              consistently  applied,  less (b) the aggregate amount of all
              liabilities  of the  Borrowers  and such  subsidiaries  on a
              consolidated  basis.   Notwithstanding   anything  contained
              hereto to the contrary,  the  definition  of  Unconsolidated
              Stockholders   Equity  shall  exclude  any  changes  thereto
              (positive  or  negative)  other  than  from the  results  of
              operations;  specifically excluded from this computation are
              any non-operational  factors, events or circumstances,  such
              as, but not  limited  to, the  issuance  of stock,  options,
              warrants  or  similar   instruments,   the   repurchase   or
              redemption of stock or unrealized currency transactions, the
              sale (on  terms  acceptable  to  Lenders  and with the prior
              written consent of Lenders) of all or  substantially  all of
              the stock or assets of any foreign  Subsidiary  of Borrowers
              and any write-down or write off (up to but not exceeding the
              sum of $10,833,000) of the note due from SeraNova,  provided
              also, however, sales of assets not in the ordinary course of
              business shall be included in said computation.

     2.  Sections  7.5,  7.18 and  7.19 of  Article  VII of the Loan  Agreement,
     "Negative Covenants", are hereby amended and restated as follows:

                  7.5 Loans.  Make advances, loans or extensions of credit
                      -----
              to any Person, including without  limitation,   any  Parent,
              Subsidiary or Affiliate  except as hereinafter  provided and
              loans  made  in the  ordinary  course  of  business:  (a) to
              employees not to exceed the aggregate amount of Four Hundred
              Thousand Dollars ($400,000.00) at any time outstanding;  (b)
              to SeraNova at any time,  except that the existing note from
              SeraNova,  with an approximate outstanding principal balance
              of  $10,833,000.00,  may be written down or written off; and
              (c)  after  the  Closing  Date to  foreign  subsidiaries  or
              divisions, not to exceed the aggregate amount of One Million
              Seven Hundred Thousand Dollars  ($1,700,000.00)  outstanding
              at any time.  Notwithstanding  anything  contained herein to
              the  contrary,   Borrowers  may  make  advances,   loans  or
              extensions  of  credit  to  their   Subsidiaries  which  are
              organized  under  the laws of a United  States  jurisdiction
              without  restriction  as to dollar  amount,  provided  Agent
              shall  have  received  an  executed   Guarantee,   Guarantor
              Security  Agreements  and such other  documents as Agent may
              require all in form and substance satisfactory to Agent from
              each such  Subsidiary,  prior to the making of any such loan
              or extension of credit.

                                       ...

                  7.18. Total Stockholders Equity. Cause, suffer or permit
                        -------------------------
              Total  Stockholders  Equity to be or become:  (a) commencing
              with the quarter ending March 31, 2002, as at the end of the
              first three

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<PAGE>

              fiscal   quarters  in  each  fiscal  year,   not  less  than
              ninety-five  percent  (95%)  of  actual  Total  Stockholders
              Equity for the immediately  preceding fiscal  year-end;  and
              (b) as at the end of the fourth fiscal quarter in any fiscal
              year (i) for the quarter ending  December 31, 2002, not less
              than  one  hundred  two  percent   (102%)  of  actual  Total
              Stockholders  Equity  as of the  December  31,  2001  fiscal
              year-end;  and  (ii)  as at the  end of  the  fourth  fiscal
              quarter of each  fiscal year  thereafter,  not less than one
              hundred  five percent  (105%) of actual  Total  Stockholders
              Equity  as of the prior  fiscal  year  end;  provided  also,
              however, the covenants set forth in Sections 7.18(a) and (b)
              shall be  tested  only  for any  fiscal  quarters,  in which
              Undrawn  Availability  is less  than  Five  Million  Dollars
              ($5,000,000.00).

                  7.19.  Unconsolidated Stockholders Equity. Cause, suffer
                         ----------------------------------
              or  permit  Unconsolidated  Stockholders  Equity  to  be  or
              become:  (a)  commencing  with the quarter  ending March 31,
              2002,  as at the end of the first three  fiscal  quarters in
              each fiscal year, not less than ninety-five percent (95%) of
              actual   Unconsolidated    Stockholders   Equity   for   the
              immediately preceding fiscal year-end; and (b) as at the end
              of the fourth fiscal  quarter in any fiscal year (i) for the
              quarter ending  December 31, 2002, not less than one hundred
              two  percent  (102%) of actual  Unconsolidated  Stockholders
              Equity as of the December 31, 2001 fiscal year-end; and (ii)
              as at the end of the fourth  fiscal  quarter of each  fiscal
              year  thereafter,  not less than one  hundred  five  percent
              (105%) of actual  Unconsolidated  Stockholders  Equity as of
              the prior  fiscal  year end;  provided  also,  however,  the
              covenants  set forth in  Sections  7.19(a)  and (b) shall be
              tested  only  for any  fiscal  quarters,  in  which  Undrawn
              Availability    is   less   than   Five   Million    Dollars
              ($5,000,000.00).

     3.  Article  VII,  "Negative  Covenants"  is hereby  amended to include the
     following Section 7.20, "Minimum EBITDA" as new material:

                   7.20 Minimum EBITDA.  Cause  suffer or  permit  EBITDA,
                        --------------
              calculated  on a  quarter-by-quarter  basis  for each of the
              four  fiscal   quarters   and,  at  year-end   only,   on  a
              year-to-date  basis,  to be or  become  less  than  (a) Nine
              Hundred Thousand Dollars ($900,000.00) as of March 31, 2002,
              (b) One Million Two Hundred Thousand Dollars ($1,200,000) as
              of  June  30,  2002,  (c) One  Million  Five  Hundred  Fifty
              Thousand Dollars  ($1,550,000) as of September 30, 2002, (d)
              One Million Four Hundred Thousand Dollars ($1,400,000) as of
              December 31, 2002, (e) Five Million Fifty  Thousand  Dollars
              ($5,050,000)  for the fiscal year ending  December 31, 2002,
              and (f)  thereafter,  as of the end of each  fiscal year not
              less than  ninety-five  percent (95%) of actual EBITDA as of
              the prior fiscal year end and during such fiscal year, as of
              the  end of the  first,  second,  third  and  fourth  fiscal
              quarters,  to be or become less than twenty  percent  (20%),
              twenty-five percent

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<PAGE>

              (25%),  thirty percent (30%), and twenty-five percent (25%),
              respectively,  of the required  total EBITDA for such fiscal
              year.

C.   WAIVER AGREEMENT:

     1.  Borrowers  hereby  acknowledge  that  Borrowers  failed to comply  with
certain financial covenants set forth in the Loan Agreement as follows:

         (a)  Section  7.18  of  the  Loan  Agreement  requires  that  Borrowers
              maintain Total Stockholders Equity as of  December 31, 2001 of not
              less  than  one  hundred  five  percent  (105%)  of  actual  Total
              Stockholders  Equity as of  December 31, 2000;  however the actual
              amount did not meet this minimum; and

         (b)  Section  7.19  of  the  Loan  Agreement  requires  that  Borrowers
              maintain  Unconsolidated  Stockholders  Equity as of  December 31,
              2001 of not less than  one hundred five  percent  (105%) of actual
              Unconsolidated  Stockholders  Equity  as  of  December  31,  2000;
              however the actual amount did not meet this minimum.

which  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 requirement  that Borrowers comply with the noted covenants as
of the December 31, 2001 fiscal year end; and

         (b)  the rights and remedies  available as a result of the existence of
the Events of Default enumerated in subsection 1 above.

     3.  Lenders hereby waive:

         (a)  the requirement that Borrowers comply with the noted covenants for
the December 31, 2001 fiscal year end; and

         (b)  the right to exercise the rights and remedies  which are available
to Agent pursuant to the Loan Agreement, at law and in equity as a result of the
existence of the Events of Default enumerated in subsection 1 above.

         These  waivers are specific to the  Events of Default and fiscal period
enumerated in  subsection 1 above.  This waiver is not intended and shall not be
deemed to extend to any other Events of Default  whether  known or unknown which
may presently exist under the Loan Agreement or which may occur hereafter.

D.   In consideration of the  facilities  being  granted by Lenders to Borrowers
under the terms and conditions of this Amendment and for other good and valuable
consideration, the receipt and

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<PAGE>

sufficiency  of  which  are  hereby  acknowledged,  the  effectiveness  of  this
Amendment is conditioned upon satisfaction by the Borrowers of the following:

         1.   Borrowers' payment of a  Twenty-Five  Thousand Dollar ($25,000.00)
              amendment and waiver fee which, as of the date of this  Amendment,
              is due and payable in full, and is non-refundable.

         2.   Agent's receipt of a fully executed counterpart of this  Amendment
              and all other  documents and  instruments  required by  Agent,  in
              form and substance satisfactory to Agent.

         3.   Borrowers'   payment  to   Agent's   counsel,   immediately   upon
              presentation  of an  invoice,  of all  fees and  expenses  of such
              counsel incurred in conjunction with the preparation and execution
              of this Amendment.




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