EXHIBIT 10.63
AGREEMENT AND ACKNOWLEDGEMENT
October 19, 2005
The undersigned hereby confirm and acknowledge the following payments
and adjustments to the principal amounts outstanding under that certain Primary
Note (the "Primary Note") and that certain Escrow Note (the "Escrow Note" and
collectively with the Primary note, the "Notes"), each dated June 10, 2004,
issued by NaviSite, Inc., Lexington Acquisition Corp., ClearBlue Technologies
Management, Inc., Avasta, Inc., Conxion Corporation and Intrepid Acquisition
Corp. (collectively, the "Maker") to Waythere, Inc. (formerly known as
Surebridge, Inc.) and agree as follows:
1. December 31, 2004 -- $800,000 payment of principal under the Primary
Note by the Maker to Waythere, Inc. as required by Section 5.22 of the
Asset Purchase Agreement dated May 6, 2004 as amended (the "APA"), by
and among NaviSite, Inc., Lexington Acquisition Corp. and Waythere,
Inc. (formerly known as Surebridge, Inc.)(together with the
predecessor, "Waythere"). Interest accrued on such amount up to and
including the date of such payment.
2. August 1, 2005 -- $750,000 payment of principal by the Maker to
Waythere, Inc. under the Primary Note in connection with the Maker's
sale of certain MBS assets to Navint. Interest accrued on such amount
up to and including the date of such payment.
3. August 25, 2005 -- $2,168,652 adjustment to principal of the Primary
Note relating to certain working capital adjustments as detailed in the
attached spreadsheet. These adjustments are deemed to have occurred on
June 10, 2004 (the date of the original issuance of the Primary Note),
and, as a result, no interest accrued on this amount. The amount of the
$2,168,652 shortfall shall be deemed the working capital adjustment
after taking the Closing Net Working Capital less the March Net Working
Capital (each as defined in Section 1.6 of the APA), and no further
adjustments to the working capital shall be made pursuant to the APA.
4. August 25, 2005 -- $937,062.50 adjustment to principal of the Escrow
Note pursuant to Section 3 of the First Amendment to the Asset Purchase
Agreement dated as of June 10, 2004 as relating to that certain Master
Services and License Agreement with MRO Software ("MRO") dated June 27,
2002. The adjustment to the outstanding principal under the Escrow Note
is deemed to have occurred on July 16, 2005, the date the Maker stopped
performing service for MRO. Interest accrued on such amount up to and
including July 16, 2005. Maker is attaching as Schedule A a
representation that MRO terminated all services with Maker as of July
16, 2005 and further attaching a copy of the most recent amended
contract with MRO.
5. Notwithstanding the working capital adjustment provided for in Section
3 above, the parties acknowledge that, under Section 1.3 of the APA,
the Maker has assumed approximately $342,000 of accounts payable of
Waythere that have not been paid as of the date hereof (the "Unpaid
Liabilities"). Maker agrees to indemnify and directly incur and assume
all costs, expenses and obligations necessary to satisfy the defense
and/or indemnification of Waythere, provided that Maker may direct the
defense by Waythere if Maker notifies Waythere that it chooses to do so
within 3 business days of receipt of notice by Waythere to Maker that
any claim against Waythere has been made with respect to any Unpaid
Liabilities. The Maker shall have the right, with the consent of the
Waythere, which consent shall not be unreasonably withheld or delayed,
to settle all indemnifiable matters related to Claims which are
susceptible to being settled provided its obligation to indemnify
Waythere therefor is or will be fully satisfied. For purposes of the
forgoing, the parties agree that it shall be reasonable grounds for
Waythere to withhold consent if such settlement imposes any obligation
of any nature whatsoever, or any potential obligation, including those
that are absolute, contingent, accrued or otherwise, upon Waythere or
its officers, directors, shareholders, predecessors or successors, or
if such settlement infringes upon any right of any such parties.
6. Except as provided herein, all other terms of each of the Notes shall
remain in full force and effect.
The following parties hereby execute this Acknowledgement as of the
date first written above.
WAYTHERE, INC.
By: /s/ Matthew Hills
--------------------------------
Name: Matthew Hills
Title: Director
2
NAVISITE, INC.
By: /s/ John J. Gavin, Jr.
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Name: John J. Gavin, Jr.
Title: CFO
CLEARBLUE TECHNOLOGIES
MANAGEMENT, INC.
By: /s/ John J. Gavin, Jr.
----------------------------------
Name: John J. Gavin, Jr.
Title: CFO
AVASTA, INC.
By: /s/ John J. Gavin, Jr.
----------------------------------
Name: John J. Gavin, Jr.
Title: CFO
CONXION CORPORATION
By: /s/ John J. Gavin, Jr.
----------------------------------
Name: John J. Gavin, Jr.
Title: CFO
INTREPID ACQUISITION CORP.
By: /s/ John J. Gavin, Jr.
----------------------------------
Name: John J. Gavin, Jr.
Title: CFO
LEXINGTON ACQUISITION CORP.
By: /s/ John J. Gavin, Jr.
----------------------------------
Name: John J. Gavin, Jr.
Title: CFO
3
Schedule A
The undersigned hereby represent and warrant to Waythere, Inc., as of this
__ day of October, 2005, that, as of July 16, 2005, MRO Software, Inc. ("MRO")
terminated all services that were previously provided by the undersigned.
Attached hereto is a true and correct copy of the most recent agreement between
any of the undersigned and MRO.
The following parties hereby execute this document as of the date first
written above.
NAVISITE, INC.
By: /s/ John J. Gavin, Jr.
-----------------------------------
Name: John J. Gavin, Jr.
Title: Chief Financial Officer
CLEARBLUE TECHNOLOGIES
MANAGEMENT, INC.
By: /s/ John J. Gavin, Jr.
-----------------------------------
Name: John J. Gavin, Jr.
Title: Chief Financial Officer
AVASTA, INC.
By: /s/ John J. Gavin, Jr.
-----------------------------------
Name: John J. Gavin, Jr.
Title: Chief Financial Officer
CONXION CORPORATION
By: /s/ John J. Gavin, Jr.
-----------------------------------
Name: John J. Gavin, Jr.
Title: Chief Financial Officer
INTREPID ACQUISITION CORP.
By: /s/ John J. Gavin, Jr.
-----------------------------------
Name: John J. Gavin, Jr.
Title: Chief Financial Officer
LEXINGTON ACQUISITION CORP.
By: /s/ John J. Gavin, Jr.
-----------------------------------
Name: John J. Gavin, Jr.
Title: Chief Financial Officer