Exhibit 10.9
SECOND AMENDED AND RESTATED
EQUIPMENT TERM NOTE NO. 1 OF 2
Not to Exceed $1,000,000 Reston, Virginia
November 5, 1999
FOR VALUE RECEIVED, the undersigned, SKY ALLAND RESEARCH, INC., a
Maryland corporation, and THE DATA GROUP II, INC., a Maryland corporation,
(collectively the "Borrowers" and each a "Borrower"), jointly and severally,
promise to pay to the order of SILICON VALLEY BANK, a California-chartered bank
("Bank"), at such place as the holder hereof may designate, in lawful money of
the United States of America, the aggregate unpaid principal amount of all
advances ("Equipment Advances") made by Bank to Borrowers in accordance with the
terms and conditions of the Loan and Security Agreement among Borrowers and Bank
dated as of May 28, 1998 (as amended from time to time, the "Loan Agreement"),
up to a maximum principal amount of One Million and No/100 Dollars
($1,000,000.00) ("Principal Sum"), or so much thereof as may be advanced.
Equipment Advances may be made under this Note only after the date hereof and on
or before February 28, 2000 (the "Tranche One End Date").
Borrowers shall pay interest on the outstanding Principal Sum, as
follows:
Commencing as of the date hereof and continuing until repayment in full
of all sums due hereunder, the unpaid Principal Sum shall bear interest at the
variable rate of interest, per annum, most recently announced by Bank as its
"prime rate," whether or not such announced rate is the lowest rate available
from Bank (the "Prime Rate"), plus three quarters of one percent (.75%) per
annum. The rate of interest charged under this Note shall change immediately and
contemporaneously with any change in the Prime Rate. All interest payable under
the terms of this Note shall be calculated on the basis of a 360-day year and
the actual number of days elapsed.
The unpaid Principal Sum, together with interest thereon at the rate or
rates provided above, shall be payable as follows:
(a) Interest only on the unpaid principal amount shall be due and
payable monthly in arrears, commencing on December 5, 1999, and continuing on
the fifth day of each calendar month thereafter to maturity; and
(b) In addition to the monthly payments of interest as set forth above,
the unpaid Principal Sum shall be due and payable in equal consecutive monthly
installments in an amount equal to one-thirty sixth (1/36) of the unpaid
Principal Sum as of the Tranche One End Date, commencing on March 5, 2000 and
continuing on the same day of each calendar month thereafter to maturity; and
(c) Unless sooner paid, the unpaid Principal Sum, together with
interest accrued and unpaid thereon, shall be due and payable in full on
February 5, 2003.
This Note reduces, amends and restates in its entirety that certain
Amended and Restated Equipment Note No. 1 of 2 (the "Amended Equipment Term Note
No. 1") in the maximum principal amount of Two Million Dollars ($2,000,000)
dated as of December ___, 1998 from the Borrowers in favor of the Bank. It is
expressly agreed that the indebtedness evidenced by the Amended Equipment Term
Note No. 1 has not been extinguished or discharged hereby. The Borrowers agree
that the execution of this Agreement is not intended to and shall not cause or
result in a novation with respect to Amended Equipment Term Note No. 1. As of
the date hereof, the unpaid principal balance of Equipment Term Note No. 1 is
$0, and the Borrowers have no set offs or defenses to the payment thereof.
From and after the date hereof, this Note shall be the "Equipment Term
Note No. 1" described in the Loan Agreement, to which reference is hereby made
for a more complete statement of the terms and conditions under which the loans
and advances evidenced hereby are made. This Note is secured as provided in the
Loan Agreement. All capitalized terms used herein and not otherwise defined
shall have the meanings given to such terms in the Loan Agreement.
Borrowers irrevocably waive the right to direct the application of any
and all payments at any time hereafter received by Bank from or on behalf of the
Borrowers and the Borrowers irrevocably agree that Bank shall have the
continuing exclusive right to apply any and all such payments against the then
due and owing obligations of the Borrowers as Bank may deem advisable. In the
absence of a specific determination by Bank with respect thereto, all payments
shall be applied in the following order: (a) then due and payable fees and
expenses; (b) then due and payable interest payments and mandatory prepayments;
and (c) then due and payable principal payments and optional prepayments.
Bank is hereby authorized by Borrowers to endorse on Bank's books and
records each Equipment Advance made by Bank under this Note and the amount of
each payment or prepayment of principal of each such Equipment Advance received
by Bank; it being understood, however, that failure to make any such endorsement
(or any error in notation) shall not affect the obligations of the Borrowers
with respect to Equipment Advances made hereunder, and
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payments of principal by Xxxxxxxxx shall be credited to Borrowers
notwithstanding the failure to make a notation (or any errors in notation)
thereof on such books and records.
The occurrence of any one or more of the following events shall
constitute an event of default (individually, an "Event of Default" and
collectively, the "Events of Default") under the terms of this Note:
(a) The failure of Borrowers to pay to Bank when due any and all
amounts payable by Borrowers to Bank under the terms of this Note; or
(b) The occurrence of an Event of Default (as defined therein) under
the terms and conditions of any of the other Loan Documents.
Upon the occurrence of an Event of Default, at the option of Bank, all
amounts payable by Borrowers to Bank under the terms of this Note shall
immediately become due and payable by Borrowers to Bank without notice to
Borrowers or any other Person, and Bank shall have all of the rights, powers,
and remedies available under the terms of this Note, any of the other Loan
Documents and all applicable laws. Borrowers and all endorsers, guarantors, and
other parties who may now or in the future be primarily or secondarily liable
for the payment of the indebtedness evidenced by this Note hereby severally
waive presentment, protest and demand, notice of protest, notice of demand and
of dishonor and non-payment of this Note and expressly agree that this Note or
any payment hereunder may be extended from time to time without in any way
affecting the liability of Borrowers, guarantors and endorsers.
Upon the occurrence of an Event of Default, Borrowers hereby authorize
any attorney designated by Bank or any clerk of any court of record to appear
for Borrowers in any court of record and confess judgment without prior hearing
against Borrowers in favor of Bank for and in the amount of the unpaid Principal
Sum, all interest accrued and unpaid thereon, all other amounts payable by
Borrowers to Bank under the terms of this Note or any of the other Loan
Documents, costs of suit, and attorneys' fees of fifteen percent (15%) of the
unpaid Principal Xxx and interest then due hereunder. Borrowers hereby release,
to the extent permitted by applicable law, all errors and all rights of
exemption, appeal, stay of execution, inquisition, and other rights to which
Borrowers may otherwise be entitled under the laws of the United States of
America or of any state or possession of the United States of America now in
force and which may hereafter be enacted. The authority and power to appear for
and enter judgment against Borrowers shall not be exhausted by one or more
exercises thereof or by any imperfect exercise thereof and shall not be
extinguished by any judgment entered pursuant thereto. Such authority may be
exercised on one or more occasions or from time to time in the same or different
jurisdictions as often as Bank shall deem necessary or desirable, for all of
which this Note shall be a sufficient warrant.
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Borrowers jointly and severally promise to pay all costs and expense of
collection of this Note and to pay all reasonable attorneys' fees incurred in
such collection, whether or not there is a suit or action, or in any suit or
action to collect this Note or in any appeal thereof. Borrowers waive
presentment, demand, protest, notice of protest, notice of dishonor, notice of
nonpayment, and any and all other notices and demands in connection with the
delivery, acceptance, performance default or enforcement of this Note, as well
as any applicable statutes of limitations. No delay by Bank in exercising any
power or right hereunder shall operate as a waiver of any power or right. Time
is of the essence as to all obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which shall govern
the rights and obligations of the Borrowers with respect to all obligations
hereunder.
The Borrowers acknowledge and agree that this Note shall be governed by
the laws of the State of Maryland, excluding conflicts of laws principles, even
though for the convenience and at the request of Borrowers, this Note may be
executed elsewhere.
BORROWERS ACCEPT FOR THEMSELVES AND IN CONNECTION WITH THEIR
PROPERTIES, UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF MARYLAND IN ANY ACTION,
SUIT, OR PROCEEDING OF ANY KIND, AGAINST THEM WHICH ARISES OUT OF OR BY REASON
OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL
ITSELF OF THE COURTS OF MARYLAND, XXXXXXXXX ACCEPT JURISDICTION OF THE COURTS
AND VENUE IN SANTA XXXXX COUNTY, CALIFORNIA. BORROWERS AND BANK EACH HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY
RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
Until such time as the Bank is not committed to extend further credit
to the Borrowers and all Obligations of the Borrowers to the Bank have been
indefeasibly paid in full in cash, and subject to and not in limitation of the
provisions set forth in the next following paragraph below, no Borrower shall
have any right of subrogation (whether contractual, arising under the Bankruptcy
Code or otherwise), reimbursement or contribution from any Borrower or any
guarantor, nor any right of recourse to its security for any of the debts and
obligations of any
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Borrower which are the subject of this Note. Except as otherwise expressly
permitted by the Financing Agreement, any and all present and future debts and
obligations of any Borrower to any other Borrower are hereby subordinated to the
full payment and performance of all present and future debts and obligations to
the Bank under this Note and the Financing Agreement and the Loan Documents,
provided, however, notwithstanding anything set forth in this Note to the
contrary, prior to the occurrence of a payment Default, the Borrowers shall be
permitted to make payments on account of any of such present and future debts
and obligations from time to time in accordance with the terms thereof.
Each Borrower further agrees that, if any payment made by any Borrower
or any other person is applied to this Note and is at any time annulled, set
aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of any property
hereafter securing this Note is required to be returned by the Bank to any
Borrower, its estate, trustee, receiver or any other party, including, without
limitation, such Borrower, under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or repayment,
such Borrower's liability hereunder (and any lien, security interest or other
collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, or, if prior thereto
any such lien, security interest or other collateral hereafter securing such
Borrower's liability hereunder shall have been released or terminated by virtue
of such cancellation or surrender, this Note (and such lien, security interest
or other collateral) shall be reinstated in full force and effect, and such
prior cancellation or surrender shall not diminish, release, discharge, impair
or otherwise affect the obligations of such Borrower in respect of the amount of
such payment (or any lien, security interest or other collateral securing such
obligation).
The JOINT AND SEVERAL obligations of each Borrower under this Note
shall be absolute, irrevocable and unconditional and shall remain in full force
and effect until the outstanding principal of and interest on this Note and all
other Obligations or amounts due hereunder and under the Loan Agreement and the
Loan Documents shall have been indefeasibly paid in full in cash in accordance
with the terms thereof and this Note shall have been canceled.
(SIGNATURES ARE ON THE NEXTPAGE)
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IN WITNESS WHEREOF, Borrowers have caused this Note to be executed
under seal by their duly authorized officers as of the date first written above.
WITNESS/ATTEST: SKY ALLAND RESEARCH, INC.
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
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, Secretary Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
WITNESS/ATTEST: THE DATA GROUP II, INC.
By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
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, Secretary Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
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