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Exhibit 10.16
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 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 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.
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3. Mandatory Prepayment; Application of Proceeds From Financing.
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
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 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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6. Place of Payment. All payments of principal of this Note and
the 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 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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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 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 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 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
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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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
_______________________________
Name: Rajkumar Koneru
Title: Chairman, President and
Chief Executive Officer
AGREED TO BY:
/s/ Nicholas Visco
_________________________
Holder
Intelligroup, Inc.
Nicholas Visco
VP Finance & CFO
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