<PAGE> 1
EXHIBIT 5
CARTER, LEDYARD & MILBURN
Counsellors at Law
2 Wall Street
New York, NY 10005-2072
-
Tel (212) 732-3200
Fax (212) 732-3232
November 9, 2000
SeraNova, Inc.
499 Thornall Street
Edison, New Jersey 08837
Re: SeraNova, Inc.
Registration Statement on Form S-1
Ladies and Gentlemen:
We have acted as counsel for SeraNova, Inc., a New Jersey corporation
(the "Company"), in connection with the filing of this Registration
Statement on Form S-1 under the Securities Act of 1933 relating to the
following 3,981,470 shares of the common stock, par value $0.01 per share of
the Company:
1. 831,470 outstanding shares (the "Outstanding Shares"),
which were issued in March 2000 to Evansville Limited, Strong River
Investments, Inc. ("Strong River"), SSB Investments Ltd.,
Ampal-American Israel Corporation and NSA Investments II LLC pursuant
to five Stock Purchase Agreements made as of March 15, 2000 (the
"Agreements");
2. 2,840,000 shares (the "Conversion Shares") issuable upon
conversion of the 800 outstanding shares of the Company's 6% series A
convertible preferred stock (the "Preferred Shares");
3. 150,000 shares (the "Warrant Shares") issuable upon
exercise of the Warrants dated September 29, 2000 (the "Warrants"),
issued to Strong River and Montrose Investments Ltd. ("Montrose"); and
<PAGE> 2
4. 160,000 shares (the "Redemption Warrant Shares") issuable
upon exercise of the Redemption Warrants dated September 29, 2000 (the
"Redemption Warrants"), issued to Strong River and Montrose.
In connection with the issuance of this opinion, we have examined:
A. The certificate of incorporation of the Company, including
the Certificate of Designation providing for the Preferred Shares
(the "Certificate of Designation");
B. The by-laws of the Company;
C. The Agreements;
D. The Convertible Preferred Stock Purchase Agreement dated as
of September 26, 2000, among the Company, Strong River and Montrose,
pursuant to which the Preferred Shares were issued;
E. The Warrants;
F. The Redemption Warrants; and
G. Such other documents as we have deemed necessary as a basis
for this opinion.
In such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the
conformity with the originals of all documents submitted to us as copies.
Based on the foregoing, we are of the opinion that:
I. The Outstanding Shares have been legally issued and are
fully-paid and non-assessable.
II. The Conversion Shares, upon their issuance in accordance
with the terms of the Certificate of Designation, will be legally
issued, fully-paid and non-assessable. In giving this opinion, we have
assumed that (a) all the outstanding Preferred Shares will remain
outstanding for five years, (b) all accrued dividends on the Preferred
Shares will be added to the stated value of the Preferred Shares as
provided in the Certificate of Designation, and (c) the applicable
Conversion Price (as defined in the Certificate of Designation) will be
not more than $3.50.
<PAGE> 3
SeraNova, Inc. -3-
III. The Warrant Shares, upon their issuance in accordance with
the terms of the Warrants, will be legally issued, fully-paid and
non-assessable.
IV. The Redemption Warrant Shares, upon their issuance in
accordance with the terms of the Redemption Warrants, will be legally
issued, fully-paid and non-assessable.
No opinion is expressed herein as to any laws other than the laws of
the United States of America, the laws of the State of New York and the New
Jersey Business Corporation Act.
We hereby consent to the references to our name under the caption
"Legal Matters" in the prospectus forming part of this Registration
Statement, and to the filing of this opinion as an exhibit to this
Registration Statement. In giving this consent, we do not acknowledge that
we come within the category of persons whose consent is required by the
Securities Act of 1933 or by the rules and regulations promulgated thereunder.
Very truly yours,
/s/ Carter, Ledyard & Milburn
JEA:lrh
