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                                                                    EXHIBIT 10.7

                   AGREEMENT OF SEVERANCE, WAIVER AND RELEASE

         This Agreement is made this 18th day of March, 1999, between UBICS,
INC., a Delaware corporation ("UBICS") and MANOHAR B. HIRA ("Hira") and will
become effective eight (8) days after it is executed unless it is revoked on or
before the seventh (7th) day after execution pursuant to Section 19.

                                    PREAMBLE

         UBICS and Hira are parties to an Employment Agreement dated October 1,
1997, as amended (the "Employment Agreement"), pursuant to which Hira is
employed by and serves as President of UBICS. Hira is also a director of UBICS
and has loyally served UBICS as an officer, director and employee since its
incorporation in 1993.

         UBICS has entered into an Acquisition and Stock Exchange Agreement
dated March 18, 1999 pursuant to which, inter alia, UBICS will acquire R
Systems, Inc. ("R Systems") and the President of R Systems will become the
President and Chief Executive Officer of UBICS.

         In light of the pending acquisition of R Systems and of Hira's valuable
knowledge of UBICS' business, operations and personnel, UBICS and Hira have
agreed that Hira's services as President and director until the closing of the R
Systems acquisition, as an employee and adviser for a transition period
thereafter, are needed by and will be beneficial to UBICS. UBICS and Hira have
further agreed that at the end of such transition period, Hira will retire from
his employment with UBICS upon the terms and conditions of this Agreement, and
will waive all possible claims against UBICS in return for the benefits provided
below.

         Therefore, UBICS and Hira, intending to be legally bound, agree as
follows:



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                                    AGREEMENT

                  1. Retirement and Termination of Employment. Hira shall retire
and his employment with UBICS will terminate on January 1, 2000 (the
"Termination Date"). On the Termination Date, except as otherwise provided
herein, the Employment Agreement shall terminate and be of no further force and
effect and the parties shall be released from all of their obligations under the
Employment Agreement. From the date hereof until the Termination Date, Hira
shall continue to be employed by UBICS under, shall receive compensation and
benefits pursuant to, and shall be bound by the other terms of, the Employment
Agreement, except as otherwise provided herein.

                  2. Resignation as President and Director. Hira hereby resigns
from (i) the office of President of UBICS effective on the date of the closing
of UBICS' acquisition of R Systems (the "Closing"), and (ii) from the Board of
Directors of UBICS, effective on the date of the Closing, or, if earlier, on the
date of the 1999 Annual Meeting of Stockholders of UBICS. Hira shall not be
nominated, and he shall not stand, for reelection to the Board of Directors of
UBICS at the 1999 Annual Meeting of Stockholders of UBICS. During the period
from the Closing until the Termination Date, Hira shall assist in the
integration of the respective businesses of UBICS and R Systems and shall
perform such other duties and responsibilities as the Board of Directors,
Chairman or President of UBICS may from time to time designate.

                  3. Severance Payment. Provided Hira continues to perform his
duties as employee of UBICS through the Termination Date, UBICS shall pay Hira a
severance payment of $450,000 in cash as follows: $150,000 on the Termination
Date, and $100,000 on each of the first three anniversaries of the Termination
Date, in each case minus applicable deductions, as a severance. In the event
that Hira should die before all such



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payments are made, UBICS shall make all remaining payments to Hira's estate or a
beneficiary selected by Hira.

                  4. Healthcare Benefits. For a period of four years following
the Termination Date (the "Severance Period"), Hira shall be entitled to
continued participation in the medical insurance plans maintained by UBICS for
its employees. participation by Hira in any such plans is not permitted due to
the requirements for eligibility contained therein, UBICS shall pay Hira an
amount each month equal to the monthly cost of a medical insurance plan covering
Hira having coverage comparable to that provided at such time by UBICS to its
employees. In addition, during the Severance Period, UBICS shall reimburse Hira
for all deductible, co-pay and other amounts expended by Hira for healthcare
which are not paid by such insurance plan, up to a maximum of $5,000 per year.

                  5. 401(k) Plan. Any vested benefit that Hira has in any 401(k)
plan or other retirement plan to which UBICS has made or will make contributions
for the benefit of Hira will be available to Hira according to the terms of the
plan for rollover or distribution as the law requires. UBICS will send, or cause
to be sent, to Hira documentation regarding rollovers and distributions as
required by law.

                  6. Automobile. Hira shall continue to have use of the
automobile currently provided to him by UBICS until the Termination Date, and
will surrender such automobile to UBICS on or prior to the Termination Date

                  7. Other Benefits. All other benefits and incidents of Hira's
employment will terminate as the Termination Date.

                  8. Stock Options. Upon the earlier of the Closing or the 
Termination Date, all options to purchase common stock of UBICS held by Hira
shall immediately



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vest and be exercisable by Hira or his estate until the expiration date of such
options, which is on the tenth anniversary of the date of grant, which was
October 30, 1997. In the event that the Board of Directors determines, in
connection with UBICS' acquisition of R Systems, to reduce the exercise price of
its outstanding options to or issue new options to replace such outstanding
options, Hira's options win also be repriced or replaced, as the case may be, on
the same basis, provided that any such new options shall be fully vested and
exercisable upon issuance.

                  9.  Transfer of Assets. UBICS hereby assigns, transfers and
delivers to Hira, effective as of the Termination Date, the personal property
listed on Exhibit A, hereto, free and clear of all liens, claims, charges and
encumbrances.

                  10. Note. The Mortgage Note dated June 24,1998 from Hira to
UBICS in the principal amount of $250,000 (the "Note") shall be, and hereby is,
amended (a) to eliminate all required installment payments pursuant to paragraph
2 of the Note, (b) to provide that the principal amount of the Note, and all
accrued interest, shall be due and payable in full on the fourth anniversary of
the Termination Date and (c) to provide that Hira may set-off against the Note
any amounts due to him under this Agreement which remain unpaid on the due date
of the Note. In all other respects, the Note, and the related Second Mortgage
dated June 24, 1998 from Hira to UBICS, shall remain unchanged and in full force
and effect. Upon the request of Hira, and upon the agreement of UBICS, in lieu
of payments on the Note pursuant to Section 4 thereof, any amounts payable to
Hira under Section 3 hereof which remain to be paid may be off-set against the
amounts due under the Note.

                  11. Acknowledgment. Hira acknowledges that the payments and
benefits provided by this agreement constitute consideration over and above
anything of value that Hira would be entitled to but for this Agreement and that
the payments


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exceed any wage or benefit claims that he could make against UBICS pursuant to
Pennsylvania's Wage Payment and Collection Law, or the Fair Labor Standards Act.

                  12. Waiver and Release. In return for the benefits fisted in
Sections 3, 4, 6, 8, 9 and 10 above, Hira absolutely and unconditionally
releases and forever discharges UBICS and its representatives, successors and
assigns, and its present and former directors, officers, employees, agents and
attorneys from all claims, demands, actions, suits, damages and expenses of any
nature whatsoever, known and unknown, whether under federal, state or municipal
law (including any common law claims related to employment) and including all
statutes and ordinances concerning employment discrimination on account of, but
not limited to, sex, race, age, religion, national origin, familial status,
military status and disability. This waiver and release includes, without
limitation, any claims under the Pennsylvania Human Relations Act; Title VII of
the Civil Rights Act of 1964, as amended; the 1991 Civil Rights Act; the Older
Workers Benefit and Protection Act; the Age Discrimination in Employment Act, as
amended; the Americans with Disabilities Act; the Employee Retirement Income
Security Act; local employment ordinances, and the law of contract and tort,
that Hira may have related to or arising out of Hira's employment or termination
of employment with UBICS, including but not limited to claims based on breach of
contract, promissory estoppel, detrimental reliance, intentional infliction of
emotional distress, and negligent infliction of emotional distress. Hira
additionally specifically releases UBICS, its successors and assigns, and its
present and former directors, officers, employees, agents and attorneys, from
any and all claims or causes of action for the fees, costs and expenses of any
and all attorneys who have at any time represented him in connection with any
matter released in this Agreement.


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                  13. Recovery of Payments. This Agreement may be raised as a
complete defense and bar to any claims Hira may bring against UBICS arising in
any way from his employment with or retirement from UBICS. If a court of
competent jurisdiction or an Arbitrator appointed pursuant to this Agreement
determines that Hira has breached any obligations of this Agreement, UBICS may
recover the severance pay and all other benefits paid under this Agreement, with
attorneys fees, and obtain all other relief provided by law or equity.

                  14. Non-Disclosure and Non-Competition. Notwithstanding (a)
anything to the contrary set forth in this Agreement, and (b) the time periods
set forth in the sections of the Employment Agreement hereinafter referenced,
during the Severance Period, Hira shall be bound by the provisions of Sections
4.01, 4.04, 4.05 and 4.06 of the Employment Agreement.

                  15. Non-Disparagement. Hira will not disparage or make
negative comments about UBICS, its directors, officers, employees, agents,
attorneys or consultants. UBICS, its directors, officers., agents, attorneys and
consultants will not disparage or make negative comments regarding Hira.

                  16. Consultancy. Hira will make reasonable efforts to be
available to consult with UBICS at any reasonable times during the Severance
Period to answer questions and give advice regarding matters that Hira has been
involved in.

                  17. No Effect Until Executed. The presentation of this offer
to Hira is an attempt to resolve all matters and potential matters between the
parties amicably and shall have no force and effect until it is executed and
delivered by Hira to UBICS and executed by all other parties.


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                  18. No Admission of Liability This Agreement is not and will
not be construed as an admission by UBICS of discrimination of any kind
whatsoever against Hira; of any breach of any obligation of any kind whatsoever,
express or implied, to Hira; or an admission by UBICS of any impropriety or
wrongdoing. This Agreement is not and will not be construed as an admission by
Hira of any impropriety or wrongdoing.

                  19. OLDER WORKERS BENEFIT PROTECTION ACT. AS PROVIDED IN THE
OLDER WORKERS BENEFIT PROTECTION ACT, HIRA ACKNOWLEDGES AND UNDERSTANDS THAT HE
HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY OF HIS CHOICE PRIOR TO SIGNING THIS
AGREEMENT. HIRA FURTHER UNDERSTANDS AND AGREES THAT HE HAS BEEN GIVEN A PERIOD
OF TWENTY-ONE (21) DAYS IN WHICH TO REVIEW AND TO CONSIDER WHETHER TO SIGN THIS
AGREEMENT.

                  IT IS FURTHER UNDERSTOOD THAT HIRA SHALL BE ENTITLED TO REVOKE
OR CANCEL HIS ACCEPTANCE OF THIS AGREEMENT DURING THE SEVEN DAY (7) DAY PERIOD
FOLLOWING HIS DELIVERY OF A SIGNED COPY OF THIS AGREEMENT TO COUNSEL FOR UBICS.
HIRA AGREES TO COMMUNICATE ANY SUCH NOTICE OF REVOCATION OR CANCELLATION BY
WRITTEN NOTICE, SENT BY HIM OR HIS LEGAL COUNSEL TO UBICS OR ITS COUNSEL.

                  BY EXECUTING THIS AGREEMENT, HIRA ACKNOWLEDGES THAT BE HAS
CAREFULLY READ THE FOREGOING AGREEMENT AND ALL OF ITS PROVISIONS AND HAS HAD THE
BENEFIT OF COUNSEL WITH RESPECT TO THIS AGREEMENT OF SEVERANCE, WAIVER AND
RELEASE AND ITS CONTENTS, HAS HAD THE OPPORTUNITY TO CONSIDER THIS AGREEMENT,
UNDERSTANDS THIS AGREEMENT, DISCUSS THIS AGREEMENT WITH LEGAL


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COUNSEL, AND RELY UPON COUNSEL'S ADVICE, AND REVIEW ALL OF ITS TERMS WHICH HAVE
BEEN FULLY EXPLAINED AND MADE KNOWN TO HIM, AND THAT HE IS SIGNING THIS
AGREEMENT AS HIS FREE ACT AND DEED, AND THAT HE IS ACCEPTING VOLUNTARILY ALL
TERMS OF THIS AGREEMENT OF SEVERANCE, WAIVER AND RELEASE.

                  20. Confidentiality of Agreement. The existence and terms of
this Agreement, together with the negotiations, discussions, and proceedings
leading up to this Agreement, are confidential and neither Hira, his attorney,
nor any individual acting on his behalf shall disclose any of these matters to
any person or entity, except as expressly required by law or by an order of a
court or Government agency of competent jurisdiction. Prior to any disclosure
required by law, Hira will notify UBICS.

                  21. Breach of Agreement. Hira further agrees that if he brings
any claim against UBICS or otherwise breaches this Agreement, Hira will become
immediately liable to UBICS for return of all payments made and benefits paid
under this Agreement, as well as any costs, including attorney's fees, incurred
by UBICS in collecting that amount from Hira, in addition to any other remedies
available to UBICS.

                  22. Acknowledgment of Physical and Emotional Condition. Hira
at the time of signing this Agreement knows of no injury or medical condition
which has occurred to him during his employment with UBICS. Accordingly, Hira
knows of nothing that would give rise to his filing a claim for workmen's
compensation benefits. Furthermore, Hira expressly acknowledges that he has no
physical or emotional impairment of any kind which has interfered with his
ability to read and understand the import of this Agreement or of its terms, and
that he is of sound mind and not acting under the influence of any medication or
mind-altering chemical of any type in entering into this Agreement.


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                  23. Judicial Enforcement. Ten (10) days before any party
hereto institutes any action to enforce the rights set forth in this Agreement,
written notice of the intention to sue shall be given by certified mail by said
party to the other party. During the above-mentioned ten (10) day period, the
parties hereto will make a reasonable effort to amicably resolve any
disagreement which may have arisen between them.

                  24. Governing Law. This Agreement is entered into in the
Commonwealth of Pennsylvania and shall be governed by and be interpreted under
the laws of the Commonwealth of Pennsylvania.

                  25. Attorneys' Fees. Each party shall pay its own legal fees
and expenses m connection with this Agreement.

                  26. Cooperation. Hira will make reasonable efforts to assist
and cooperate with UBICS in any defense or prosecution of a claim that may be
made by or against UBICS or in connection with any ongoing or future
investigation, dispute or claim involving UBICS including proceedings before any
arbitral, administrative, judicial, legislative body or agency. Cooperation will
include preparation and testimony in any such proceedings where UBICS believes
that Hira could be helpful. In the event that Hira's time expended in such
assistance and cooperation will be more than nominal, the parties shall discuss
and agree upon appropriate compensation to be paid to Hira for such time.

                 27. Entire Agreement. This Agreement, together with the
Employment Agreement., the Note and the Second Mortgage, each as modified
herein, contains the entire agreement of the parties. There are no other written
or oral agreements between the parties. UBICS, its employees, representatives
and attorneys have made no representations or promises concerning the terms or
effects of this Agreement that are


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not contained in it. This Agreement may be amended only in writing signed by
both parties.

                  28. Arbitration. Any controversy, claim or dispute between the
Parities concurring this Agreement or the breach thereof shall be finally
settled by arbitration in Pittsburgh, Pennsylvania pursuant to the rules of the
American Arbitration Association regarding employment disputes. In such
instances, it is agreed that the dispute shall be submitted to final and binding
arbitration by one arbitrator; provided, however, that either Party may request
that there be three arbitrators, in which case each Party shall select one
arbitrator, and the two arbitrators so selected shall select a third. All costs
of arbitration (other than the costs of a Party's own witnesses and professional
advisors) shall be split equally between the Parties.

                  29. Equitable Relief. Notwithstanding Section 28
"Arbitration", the parties acknowledge and agree that each would be irreparably
damaged if any of the provisions of this Agreement are not performed by the
other in accordance with their specific terms or are otherwise breached.
Accordingly, it is agreed that the non-breaching party shall be entitled to
injunctions to prevent breaches of this Agreement by the other party and shall
have the right to specifically enforce this Agreement and the terms and
provisions hereof against the breaching party in addition to any other remedy to
which the non-breaching party may be entitled at law or in equity. The parties
further agree that Section 28 "Arbitration" is not intended to be a bar to
either party seeking injunctive relief by filing an action in an appropriate
court.


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                  30. Severability. Should any provision of this Agreement be
declared or be determined by any court of competent jurisdiction or by any
administrative body to be illegal or invalid, the validity of the remaining
parts, terms, or provisions of it shall not be effected thereby and said illegal
or invalid part, term or provision shall be deemed not to be a part of this
Agreement.

                  Hira affirms that by entering into this Agreement he is not
relying upon any oral or written promise or statement made by anyone at any time
on behalf of UBICS that is not contained in this Agreement.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement intending to be legally bound hereby.

Dated: 3/18/99                                   /s/ Manohar B. Hira
      ----------                                 -------------------------------
                                                 Manohar B. Hira


                                                 UBICS, INC.


                                                 By: /s/Vijay Mallya
                                                    ----------------------------

                                                 Date:
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