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EXHIBIT 99.3
INDUCEMENT AGREEMENT
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This Inducement Agreement (the "Agreement"), dated as of October 27, 2000,
by and among SeraNova, Inc., a New Jersey corporation ("Acquisition"), and the
stockholders listed on the signature page hereof (each such stockholder being
referred to herein as a "Stockholder" and, collectively with each other
Stockholder, the "Stockholders").
W I T N E S S E T H
WHEREAS, each Stockholder is the record and beneficial owner of or has the
sole right to vote with respect to certain equity shares, par value Rs.10 per
share (the "Common Stock") of Silverline Technologies Limited, an Indian company
("Silverline"), described in Schedule A attached hereto (together with any
shares of Common Stock acquired by a Stockholder after the date hereof, the
"Shares");
WHEREAS, in reliance upon the execution and delivery of this Agreement,
SeraNova will enter into an Agreement and Plan of Merger dated as of the date
hereof (the "Merger Agreement"), with Silverline and other parties, pursuant to
which, among other things, a subsidiary of Silverline ("Acquisition") will be
merged with and into SeraNova (the "Merger"), on the terms and subject to the
conditions contained in the Merger Agreement; and
WHEREAS, in order to induce SeraNova to enter into the Merger Agreement and
to incur the obligations set forth therein, the Stockholders are entering into
this Agreement pursuant to which each Stockholder is granting an irrevocable
proxy to SeraNova to vote in favor of the Merger and to make certain agreements
with respect to such Stockholders' Shares.
NOW THEREFORE, for and in consideration of the foregoing and the mutual
promises contained herein, and upon and subject to the terms and conditions set
forth below, the parties hereto agree as follows:
Section 1. Grant of Irrevocable Proxy. Each Stockholder hereby
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irrevocably appoints and constitutes SeraNova or any designee of SeraNova, with
full power of substitution, the lawful agent, attorney and proxy of the
Stockholder (each an "Irrevocable Proxy") during the term of this Agreement to
vote in its sole discretion all of the Shares of Common Stock of Silverline of
which such Stockholder is or becomes the owner of record or has the power to
vote in the following manner for the following purposes: (i) to call one or more
meetings of the stockholders of Silverline in accordance with the corporate
organizational documents of Silverline and applicable law for the purpose of
considering the transactions contemplated by the Merger Agreement such that the
stockholders shall have the full opportunity to approve the Merger Agreement and
any and all amendments, modifications and waivers thereof and the transactions
contemplated thereby; (ii) in favor of the Merger Agreement or any of the
transactions contemplated by the Merger Agreement at any stockholders' meetings
of Silverline held to consider the Merger Agreement (whether annual or special
and whether or not an adjourned meeting); (iii) against the taking of any action
which
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would result in any of the conditions to SeraNova's obligations under the Merger
Agreement not being fulfilled; and (iv) as otherwise necessary or appropriate to
enable SeraNova to consummate the transactions contemplated by the Merger
Agreement and, in connection with such purposes, to otherwise act with respect
to the Shares which the Stockholder is entitled to vote. THIS IRREVOCABLE PROXY
HAS BEEN GIVEN IN CONSIDERATION OF THE UNDERTAKINGS OF SERANOVA IN THE MERGER
AGREEMENT AND SHALL BE IRREVOCABLE AND COUPLED WITH AN INTEREST UNTIL THE
IRREVOCABLE PROXY TERMINATION DATE AS DEFINED IN SECTION 2 HEREOF. This
Agreement shall revoke all other proxies granted by the Stockholders with
respect to their Shares. It is understood and agreed that nothing contained
herein shall restrict or otherwise affect the Stockholders' exercise of their
fiduciary duties as Directors of Silverline.
Section 2. Irrevocable Proxy Termination Date. The Irrevocable Proxies
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provided hereby shall expire on the earlier to occur of the Effective Date of
the Merger or the termination of the Merger Agreement pursuant to its terms (in
either case, the "Merger Termination Date").
Section 3. Covenants of the Stockholders. Each Stockholder covenants
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and agrees for the benefit of SeraNova that, until the Merger Termination Date,
he will not:
(a) sell, transfer, pledge, hypothecate, encumber, assign, tender or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, hypothecation,
encumbrance, assignment, tender or other disposition of, any of his Shares or
any interest therein; or
(b) other than as expressly contemplated by this Agreement, grant any
powers of attorney or proxies or consents in respect of any of such
Stockholder's Shares, deposit any of such Shares into a voting trust, enter into
a voting agreement with respect to any of such Shares or otherwise restrict or
take any action adversely affecting the ability of such Stockholder freely to
exercise all voting rights with respect thereto.
Section 4. Covenants of SeraNova. SeraNova covenants and agrees for
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the benefit of the Stockholders that (a) immediately upon execution of this
Agreement, SeraNova shall enter into the Merger Agreement, and (b) until the
Merger Termination Date, it shall use all reasonable efforts to take, or cause
to be taken, all action, and do, or cause to be done, all things necessary or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement and the Merger Agreement, consistent with the
terms and conditions of each such agreement; provided, however, that nothing in
this Section 4 or any other provision of this Agreement is intended, nor shall
it be construed, to limit or in any way restrict SeraNova's right or ability to
exercise any of its rights under the Merger Agreement.
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Section 5. Representations and Warranties of the Stockholders. Each
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Stockholder represents and warrants to SeraNova that:
(a) such Stockholder has full right, power and authority to enter
into, execute and deliver this Agreement and to perform his obligations
hereunder;
(b) this Agreement has been duly executed and delivered by such
Stockholder and constitutes a legal, valid and binding obligation of such
Stockholder enforceable against him in accordance with its terms;
(c) such Stockholder is the sole owner of such Stockholder's Shares
set forth on Schedule A attached hereto and made a part hereof, and such Shares
represent all shares of Common Stock of or with respect to which such
Stockholder is the owner at the date hereof;
(d) such Stockholder has the right to vote with respect to such
Stockholder's Shares set forth on Schedule A attached hereto;
(e) except for the Shares listed on Schedule A hereto, such
Stockholder does not have any right to acquire, nor is such Stockholder the
"beneficial owner" (as such term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of, any other shares of any class of capital
stock of Silverline or any securities convertible into or exchangeable or
exercisable for any shares of any class of capital stock of Silverline (other
than shares subject to options or other rights granted by Silverline as set
forth on Schedule A hereto); and
(f) such Stockholder's Shares are duly authorized, validly issued,
fully paid and non-assessable shares of Common Stock of Silverline.
The representations and warranties contained herein shall be made as of the
date hereof and as of the Closing of the Merger.
Section 6. Representations and Warranties of SeraNova. SeraNova
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represents and warrants to the Stockholders that:
(a) It has all requisite corporate power and authority to enter into
and perform all of its obligations under this Agreement; and
(b) The execution, delivery and performance of this Agreement by it
and all transactions contemplated hereby have been duly authorized by all
necessary corporate action on its part, and this Agreement constitutes the
legal, valid and binding contract of SeraNova enforceable against it in
accordance with its terms.
The representations and warranties contained herein shall be made as of the
date hereof and as of the Closing of the Merger.
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Section 7. Adjustments; Additional Shares. In the event (a) of any
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stock dividend, stock split, merger (other than the Merger), recapitalization,
reclassification, combination, exchange of shares or the like of the capital
stock of Silverline on, of or affecting the Common Stock or (b) that any
Stockholder shall become the owner of, or otherwise obtain the right to vote
with respect to, any additional shares of Common Stock or other securities
entitling the holder thereof to vote or give consent with respect to the matters
set forth in Section 1 hereof, then the terms of this Agreement with respect to
the Irrevocable Proxy shall apply to the shares of capital stock or other
instruments or documents that the Stockholders own or have the right to vote
immediately following the effectiveness or the events described in clause (a) or
any Stockholder becoming the owner of or obtaining the right to vote with
respect to any Common Stock or other securities as described in clause (b), as
though, in either case, they were Shares hereunder.
Section 8. Specific Performance. The parties hereto agree that control
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of the Shares is unique and that money damages are an inadequate remedy for
breach of this Agreement because of the difficulty of ascertaining the amount of
damage that will be suffered by SeraNova in the event that this Agreement is
breached. Therefore, each of the Stockholders agrees that in addition to and not
in lieu of any other remedies available in SeraNova at law or in equity,
SeraNova may obtain specific performance of this Agreement.
Section 9. Assignment. SeraNova's rights and obligations under this
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Agreement may not be assigned without the consent of each affected Stockholder.
Section 10. Amendments. Amendment or waiver of any provision of this
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Agreement or consent to departure therefrom shall be effective unless in writing
and signed by SeraNova and all affected Stockholders, in the case of an
amendment, or by the party which is the beneficiary of any such provision, in
the case of a waiver or a consent to depart therefrom.
Section 11. Governing Law. This Agreement shall be governed by and
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construed in accordance with the internal substantive laws of the State of New
York, without regard to the conflict of laws principles thereof, except insofar
as Indian law shall be mandatorily applicable hereto.
Section 12. Binding Effect. This Agreement shall be binding upon and
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inure to the benefit of the parties hereto and their respective successors,
personal representatives, executors, heirs and permitted assigns.
Section 13. Headings. The Section headings herein are for convenience
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of reference only and shall not affect the construction hereof.
Section 14. Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Agreement.
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Section 15. Further Assurances. From and after the date hereof the
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parties hereto agree to execute and deliver such amendments hereto and such
other documents as SeraNova shall reasonably request in order to more
effectively consummate the transactions contemplated hereby and to effectuate
the intentions of the parties hereunder, including without limitation anything
necessary to comply with Indian legal and corporate requirements.
IN WITNESS WHEREOF, SeraNova and each of the Stockholders have duly
executed this Agreement as of the date and year first above written.
SERANOVA, INC.
By: /s/ Ravi Singh
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Name: Ravi Singh
Title: Chief Financial Officer
/s/ Krishna K. Subramanian
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Krishna K. Subramanian
Address:
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/s/ Ravi Subramanian
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Ravi Subramanian
Address:
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SILVERLINE HOLDINGS, CORP.
By: /s/ Ravi Subramanian
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Ravi Subramanian, Chairman
Address:
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KS SOFTWARE TECHNOLOGIES LTD.
By: /s/ Krishna K. Subramanian
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Krishna K. Subramanian
Address:
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SUBRA MAURITIUS LTD.
By: /s/ Krishna K. Subramanian
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Krishna K. Subramanian
Address:
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SHREYAS HOLDINGS LTD.
By: /s/ Krishna K. Subramanian
----------------------------------------
Krishna K. Subramanian
Address:
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Schedule A
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Shares
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Name of Stockholder Number of Shares
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===================================================================
Silverline Holdings, Corp./ 19,354,954
Ravi Subramanian
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KS Software Technologies Ltd./ 19,354,954
Krishna K. Subramanian
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Subra Mauritius Ltd. 8,628,000
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Shreyas Holdings Ltd. 2,437,267
===================================================================
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<PAGE>
AMENDMENT NO. 1 TO
INDUCEMENT AGREEMENT
This Amendment No. 1 to Inducement Agreement ("Amendment"), dated as of January
16, 2001, by and among SeraNova, Inc., a New Jersey corporation ("SeraNova"),
and the stockholders listed on the signature page hereof (each such stockholder
being referred to herein as a "Stockholder" and, collectively with each other
Stockholder, the "Stockholders"), amends that certain Inducement Agreement dated
as of October 27, 2000 (the "Inducement Agreement") among the same parties, as
follows:
1. Each reference to the "Merger Agreement" in the Inducement Agreement, as
amended hereby, shall be deemed to refer to the Amended and Restated Agreement
and Plan of Merger among Silverline Technologies Limited, Silverline Acquisition
Corp., Silverline Technologies, Inc. and SeraNova, dated as of October 27, 2000.
2. The word "Acquisition" on the second line of the first paragraph to the
Inducement Agreement shall be changed to "SeraNova."
3. Each other provision of the Inducement Agreement remains unchanged.
4. This Amendment shall be governed by and construed in accordance with the
internal substantive laws of the State of New York, without reference or regard
to its principles of conflicts of law.
5. This Amendment may be executed in multiple counterparts, each of which shall
be deemed an original, and SeraNova and each of the Stockholders may become a
party hereto by executing a counterpart hereof. This Amendment and any
counterpart so executed shall be deemed to be one and the same instrument.
[INTENTIONALLY LEFT BLANK]
1
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IN WITNESS WHEREOF, SeraNova and each of the Stockholders have duly
executed and delivered this Amendment as of the date and year first above
written.
SERANOVA, INC.
By /s/ Ravi Singh
---------------------------------
Name: Ravi Singh
Title: Chief Financial Officer
/s/ Krishna K. Subramanian
------------------------------------
Krishna K. Subramanian
/s/ Ravi Subramanian
------------------------------------
Ravi Subramanian
SILVERLINE HOLDINGS CORP.
By /s/ Ravi Subramanian
---------------------------------
Name: Ravi Subramanian
Title: Chairman
KS SOFTWARE TECHNOLOGIES LTD.
By /s/ Krishna K. Subramanian
---------------------------------
Name: Krishna K. Subramanian
Title:
SUBRA MAURITIUS LTD.
By /s/ Krishna K. Subramanian
---------------------------------
Name: Krishna K. Subramanian
Title:
SHREYAS HOLDINGS LTD.
By /s/ Krishna K. Subramanian
---------------------------------
Name: Krishna K. Subramanian
Title:
2
