THIS NOTE HAS BEEN ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH SUCH REQUIREMENTS OR A WRITTEN OPINION OF
COUNSEL ACCEPTABLE TO THE LENDER THAT SUCH TRANSFER WILL NOT RESULT IN ANY
VIOLATION OF SUCH LAWS OR AFFECT THE LEGALITY OF ITS ISSUANCE.
AMENDED AND RESTATED PROMISSORY NOTE
US $15,100,000 May 31, 2000
FOR VALUE RECEIVED, the undersigned, SeraNova, Inc. (the "Obligor"), a New
Jersey corporation, having its principal office at 499 Thornall Street, Edison,
New Jersey 08837, hereby promises to pay to the order of Intelligroup, Inc. (the
"Holder"), a New Jersey corporation, at the office of the Holder at 499 Thornall
Street, Edison, New Jersey 08837 or at such other location as the Holder may
designate from time to time, the principal amount of fifteen million one hundred
thousand dollars ($15,100,000). The Obligor also promises to pay to the order of
the Holder simple interest on the principal amount hereof at a rate per annum
equal to one half of one percent (1/2%) above the Prime Rate as reported in the
Wall Street Journal on the date of this Note, which interest shall be payable at
such time as set forth hereunder. Interest shall be calculated on the basis of a
year of 365 days and for the number of days actually elapsed. Any amounts of
interest and principal not paid when due shall bear interest at the maximum rate
of interest allowed by applicable law. The payments of principal and interest
hereunder shall be made in coin or currency of the United States of America
which at the time of payment shall be legal tender therein for the payment of
public and private debts.
This Note shall be subject to the following additional terms and
conditions:
1. Payments. Unless prepaid in full pursuant to Section 2 or Section 7
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hereof, all unpaid principal shall be due and payable in full on
July 31, 2001 (the "Maturity Date"). In the event that any payment
to be made hereunder shall be or become due on a Saturday, Sunday or
any other day which is a legal bank holiday under the laws of the
State of New Jersey, such payment shall be or become due on the next
succeeding business day.
2. Optional Prepayment. The Obligor shall have the right at any time to
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prepay the principal hereof in whole or in part, without premium or
penalty, prior to the Maturity Date, provided that interest on the
principal hereof to be so prepaid, accrued to the date of such
prepayment, shall be paid concurrently therewith. Amounts prepaid
under the terms of this Note shall be applied in the discretion of
the Holder.
<PAGE>
3. Mandatory Prepayment; Application of Proceeds From Financing.
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Notwithstanding any provision herein to the contrary, the Obligor
shall make a mandatory prepayment of principal in the amount of
three million dollars ($3,000,000) on or before September 30, 2000.
Further, in the event that the Obligor consummates any debt or
equity financing (excluding its proposed credit facility with Fleet
Credit Corporation), the Obligor shall first apply the proceeds
therefrom to make a mandatory prepayment of the balance due under
this Note in accordance with the schedule set forth below until the
balance of principal and accrued interest due under this Note is
paid in full. The following schedule of mandatory prepayments shall
be based on the cumulative gross proceeds resulting from any one or
more debt or equity financings by the Obligor:
a) up to $2,000,000, no mandatory prepayment shall be made from
Obligor to Holder;
b) from $2,000,000.01 to $10,000,000, Obligor shall make a
mandatory prepayment equal to 50% of the net proceeds in
excess of $2,000,000;
c) from $10,000,000.01 to $15,000,000, Obligor shall make a
mandatory prepayment equal to 75% of the net proceeds in
excess of $10,000,000; and
d) in excess of $15,000,000, Obligor shall make a mandatory
prepayment of all of the net proceeds in excess of
$15,000,000.
Notwithstanding the above, in the event that the Obligor consummates
a single debt or equity financing of at least $20,000,000, the
Obligor shall make a mandatory prepayment of the entire balance due
under this Note. Amounts prepaid under the terms of this Note shall
be applied in the discretion of the Holder. Nothing herein shall be
construed to waive the Obligor's obligation to repay all amounts
outstanding hereunder on the Maturity Date.
4. No Waiver. No failure or delay by the Holder in exercising any
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right, power or privilege under this Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies
provided by law. No course of dealing between the Obligor and the
Holder shall operate as a waiver of any rights by the Holder.
5. Waiver of Presentment and Notice of Dishonor. The Obligor and all
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endorsers, guarantors and other parties that may be liable under
this Note hereby waive presentment, notice of dishonor, protest and
all other demands and notices in connection with the delivery,
acceptance, performance or enforcement of this Note.
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<PAGE>
6. Place of Payment. All payments of principal of this Note and the
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interest due thereon shall be made at such place as the Holder may
from time to time designate in writing to the Obligor.
7. Events of Default. The entire unpaid principal amount of this Note
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and the interest due thereon shall, at the option of the Holder
exercised by written notice to the Obligor, forthwith become and be
due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, if any
one or more of the following events (herein called "Events of
Default") shall have occurred (for any reason whatsoever and
whether such happening shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in
compliance with any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body) and be continuing at the time of such notice, that is to say:
a) if default shall be made in the due and punctual payment of
the principal of this Note and the interest due thereon when
and as the same shall become due and payable, whether at
maturity, or by acceleration or otherwise, and such default
shall have continued for a period of five days;
b) if default shall be made in the due and punctual payment of
any amount due from the Obligor to the Holder pursuant to any
of the following inter-company agreements: (i) Tax Sharing
Agreement, (ii) Space Sharing Agreement, and (iii) Services
Agreement, each of which is dated as of January 1, 2000, and
such default shall have continued for a period of ten days;
c) if the Obligor shall:
(i) admit in writing its inability to pay its debts
generally as they become due;
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make an assignment for the benefit of creditors;
(iv) consent to the appointment of a receiver of the whole
or any substantial part of his property;
(v) on a petition in bankruptcy filed against it, be
adjudicated a bankrupt; or
(vi) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any
other applicable law or statute of the United States of
America or any State, district or territory thereof;
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<PAGE>
d) if a court of competent jurisdiction shall enter an order,
judgment, or decree appointing, without the consent of the
Obligor, a receiver of the whole or any substantial part of
Obligor's property, and such order, judgment or decree shall
not be vacated or set aside or stayed within 90 days from the
date of entry thereof; or
e) if, under the provisions of any other law for the relief or
aid of debtors, any court of competent jurisdiction shall
assume custody or control of the whole or any substantial part
of Obligor's property and such custody or control shall not be
terminated or stayed within 90 days from the date of
assumption of such custody or control.
8. Remedies. In case any one or more of the Events of Default specified
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in Section 7 hereof shall have occurred and be continuing, the
Holder may proceed to protect and enforce its rights either by
suit in equity and/or by action at law, whether for the specific
performance of any covenant or agreement contained in this Note or
in aid of the exercise of any power granted in this Note, or the
Holder may proceed to enforce the payment of all sums due upon
this Note or to enforce any other legal or equitable right of the
Holder.
9. Expenses. Obligor shall pay Holder any reasonable out-of-pocket
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expenses (including reasonable legal fees) arising out of or in
connection with any action or proceeding (including any action or
proceeding arising in or related to any insolvency, bankruptcy or
reorganization involving or affecting Obligor) taken to protect,
enforce, determine or assert any right or remedy under this Note.
10. Severability. In the event that one or more of the provisions of
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this Note shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Note,
but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
11. Governing Law. This Note and the rights and obligations of the
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Obligor and the Holder shall be governed by and construed in
accordance with the laws of the State of New Jersey.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
and delivered on the date first written above.
SERANOVA, INC.
By: /s/ Rajkumar Koneru
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Name: Rajkumar Koneru
Title: Chairman, President and
Chief Executive Officer
AGREED TO BY:
/s/ Nicholas Visco
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Holder: Intelligroup, Inc.
Nicholas Visco
VP Finance & CFO