EXHIBIT 10.27
SECOND AMENDMENT TO SECURED LOAN AGREEMENT
This SECOND AMENDMENT TO SECURED LOAN AGREEMENT ( this "Amendment")
is dated as of March 30, 2005 and is entered into by and between SILVON
SOFTWARE, INC., an Illinois corporation ("Borrower"), and JDA SOFTWARE GROUP,
INC., a Delaware corporation ("Lender").
RECITALS:
A. Borrower and Lender entered into that certain Secured Loan
Agreement dated as of May 8, 2001, as amended by that certain First Amendment to
Secured Loan Agreement dated as of November 30, 2004 between Borrower and
Lender (as the same may hereafter be amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement") pursuant to which,
among other things, Lender agreed, subject to the terms and conditions thereof,
to make a loan to Borrower.
B. Borrower has requested that Lender (i) extend the maturity date
of the loan under the Loan Agreement and (ii) permit Borrower to incur
$1,000,000 of indebtedness from Xxxxxxx X. Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx
Xxxxxx and Xxxxx Xxxxxx (collectively, the "Subordinated Lenders" and each,
individually, a "Subordinated Lender").
C. Lender has agreed to such amendments on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS:
SECTION 1. DEFINITIONS. Capitalized terms used in this Amendment,
unless otherwise defined herein, shall have the meaning ascribed to such terms
in the Loan Agreement.
SECTION 2. RECITALS. The foregoing Recitals are hereby made a part
of this Amendment.
SECTION 3. AMENDMENTS TO THE LOAN AGREEMENT. Subject to
satisfaction of the conditions set forth in Section 4 hereto, effective as of
the date hereof, the Loan Agreement is amended as follows:
3.1 The Recital to the Loan Agreement is hereby amended and
restated as follows:
"The Borrower wishes to borrow from the Lender and the Lender
wishes to loan to the Borrower the principal amount of One
Million Seven Hundred Sixty-Five Thousand Six Hundred
Ninety-Five and 07/100 Dollars ($1,765,695.07)
CHICAGO_1228379_7
pursuant to the terms hereof and to be evidenced by a Second
Amended and Restated Secured Promissory Note in the form of
Exhibit A hereto (as amended, the "Note")."
3.2 Section 1 of the Loan Agreement is hereby amended by deleting
the amount "$2,861,196.78" where it appears therein and by inserting in its
place the amount "$1,765,695.07."
3.3 Section 3(d) of the Loan Agreement is hereby amended by
deleting the phrase "and this Agreement, the Note, the Security Agreement, the
Escrow Agreement (as defined in Section 5) (collectively, the "Loan Documents")
and in substitution therefor inserting the phrase "and this Agreement, the Note,
the Security Agreement, the Subordination Agreement, the Escrow Agreement (as
defined in Section 5), and all other agreements, documents and instruments
executed and delivered in connection with the foregoing (collectively, the "Loan
Documents")".
3.4 Section 4(a)(i) of the Loan Agreement is hereby amended and
restated as follows:
"(i) As soon as available, but in any event within 30 days
after the end of each monthly accounting period, the Borrower
shall deliver to the Lender unaudited consolidated statements
of income and cash flows for the monthly period then ended and
a balance sheet as of the last day of that monthly period, in
each case prepared in accordance with GAAP consistent with
past practices."
3.5 Section 4(b) of the Loan Agreement is hereby amended and
restated as follows:
"(b) So long as the Note is outstanding, the Borrower will
promptly (and in no event later than 5 days after the Borrower
becomes aware of such an event or change) inform the Lender of
(i) any material adverse events and of any material change in
the nature of the Collateral (as defined in the Security
Agreement) and (ii) with respect to any fiscal year of the
Borrower, any material change in the financial position of the
Borrower as (or to be) set forth in the annual audited
financial statements of the Borrower for such period from the
financial position of the Borrower as set forth in the
unaudited monthly financial statements previously delivered to
the Lender pursuant to Section 4(a)(i) for such period and a
summary of any such change."
3.6 Section 4(d)(i) of the Loan Agreement is hereby amended and
restated as follows:
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"(i) authorize, issue or enter into any agreement providing
for the issuance (contingent or otherwise) of any indebtedness
for borrowed money, other than the incurrence of loans from
(A) Xxxxxxx X. Xxxxxx in a principal amount not to exceed
$550,000 at any time outstanding, (B) Xxxxxxxx Xxxxxx in a
principal amount not to exceed $115,000 at any time
outstanding, (C) Xxxxxxx Xxxxxx in a principal amount not to
exceed $75,000 at any time outstanding and (D) Xxxxx Xxxxxx in
a principal amount not to exceed $260,000 at any time
outstanding (collectively, the "Subordinated Loans");"
3.7 Section 4(d)(iii) of the Loan Agreement is hereby amended and
restated as follows:
"(iii) directly or indirectly redeem, purchase or otherwise
acquire any of its equity securities (including the Warrants
(as such term is defined below), any other warrants, options
and other rights to acquire equity securities) except as
contemplated by existing stock option plans or repurchases of
employee options or restricted stock in the ordinary course of
business; provided, that in no event shall any redemption,
purchase or other acquisition of the Warrants or any common
stock issued pursuant to the Warrants shall be permitted;"
3.8 Section 4(d) of the Loan Agreement is hereby amended to (a)
delete the period at the end of clause (ix) and insert a semicolon therefor and
(b) add new clauses (x), (xi), (xii), (xiii) and (xiv) to the end of such
section as follows:
"(x) amend or otherwise modify (A) that certain Note dated as
of March 30, 2005 by the Borrower in favor of Xxxxxxx X.
Xxxxxx in the original principal amount of $550,000, (B) that
certain Note dated as of March 30, 2005 by the Borrower in
favor of Xxxxxxxx Xxxxxx in the original principal amount of
$115,000, (C) that certain Note dated as of March 30, 2005 by
the Borrower in favor of Xxxxxxx Xxxxxx in the original
principal amount of $75,000, (D) that certain Note dated as of
March 30, 2005 by the Borrower in favor of Xxxxx Xxxxxx in the
original principal amount of $260,000 and (E) all other
agreements, documents and instruments evidencing the foregoing
(the "Subordinated Loan Documents"), except as otherwise
provided in that certain Subordination Agreement, dated as of
March 30, 2005 between Lender and the Subordinated Lenders, in
the form of Exhibit D attached hereto (as
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amended, restated, supplemented or otherwise modified from
time to time, the "Subordination Agreement");
(xi) except as otherwise permitted pursuant to the
Subordination Agreement, make any payments with respect to the
Subordinated Loans;
(xii) issue any warrants to any Subordinated Lender other than
warrants (A) which are exercisable for shares of common stock
of the Borrower, (B) which are exercisable for not more than
2,800,000 shares of common stock of the Borrower in the
aggregate for all Subordinated Lenders and (C) for which the
issuance thereof and the exercise into shares of common stock
of the Borrower is cashless (the "Warrants");
(xiii) permit Xxxxxxx X. Xxxxxx to cease to own and/or
control, directly or indirectly, less than the same percentage
of all of the economic and voting rights associated with
ownership of the outstanding capital stock of the Borrower, on
a fully diluted basis, which were owned and/or controlled by
Xxxxxxx X. Xxxxxx on March 30, 2005; or
(xiv) permit someone other than Xxxxxxx X. Xxxxxx to (A) be
President of the Borrower or (B) manage the day-to-day
operations of the Borrower."
3.9 All references in the Loan Agreement to the Note in the form
of Exhibit A to the Loan Agreement shall be deemed to be references to the
Second Amended and Restated Secured Promissory Note in the form of Exhibit A
attached hereto and made a part hereof (the "Second Amended and Restated
Note").
3.10 The Loan Agreement is hereby amended to add the form of
Subordination Agreement as Exhibit D thereto, in the form of Exhibit B attached
hereto.
SECTION 4. CONDITIONS. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent (unless
specifically waived in writing by Lender):
4.1 Lender shall have received fully executed copies of this
Amendment executed by Lender and Borrower.
4.2 Borrower shall have delivered to Lender a Second Amended and
Restated Note executed by Borrower and payable to the order of Lender, in the
form of Exhibit A attached hereto.
4.3 Borrower shall have delivered to Lender a Subordination
Agreement, executed by the Subordinated Lenders, in the form of Exhibit B
attached hereto.
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4.4 Lender shall have received $1,000,000 in immediately available
United States Dollars for application to the outstanding principal balance of
the Note.
4.5 Borrower shall have delivered to Lender fully-executed copies
of the Subordinated Loan Documents (together with all annexes, exhibits and
schedules thereto), certified by the secretary of Borrower to be the true,
correct and complete copies of the Subordinated Loan Documents.
4.6 No Event of Default under the Loan Agreement or the Security
Agreement or other event or circumstance which with the giving of notice or
passage of time, or both, would constitute or become an Event of Default under
the Loan Agreement or the Security Agreement shall have occurred and be
continuing and all representations and warranties of Borrower in the Loan
Agreement and the Security Agreement shall be true and correct in all material
respects.
4.7 All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other legal
matters incident thereto shall be reasonably satisfactory to Lender.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Lender that:
5.1 Representations and Warranties. Borrower is a corporation duly
organized, existing and in good standing under the laws of the State of
Illinois, with full and adequate corporate power to carry on and conduct its
business as presently conducted. Borrower is duly licensed or qualified in all
foreign jurisdictions wherein the nature of its activities require such
qualification or licensing. The Articles of Incorporation and Bylaws of Borrower
have not been changed or amended since the most recent date that certified
copies thereof were delivered to Lender. The Borrower's state issued
organizational identification number is 54821824. The exact legal name of
Borrower is as set forth in the preamble to this Amendment, and Borrower
currently does not conduct, nor has it during the last five (5) years conducted,
business under any other name or trade name.
5.2 Authorization. Borrower is duly authorized to execute and
deliver this Amendment, the Second Amended and Restated Note and the
Subordination Agreement and is and will continue to be duly authorized to
perform its obligations under the Loan Agreement, as amended hereby, and the
other Loan Documents.
5.3 No Conflicting Agreements. The execution and delivery of this
Amendment, the Note and the Security Agreement and the performance by Borrower
of its obligations under the Loan Agreement, as amended hereby, and the other
Loan Documents do not and will not conflict with any provision of law or of the
Articles of Incorporation or Bylaws of Borrower or any agreement binding upon
Borrower.
5.4 Validity and Binding Effect. The Loan Agreement, as amended
hereby, the Note and the Security Agreement are each legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency or other similar laws of general application affecting
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the enforcement of creditors' rights or by general principles of equity
limiting the availability of equitable remedies.
5.5 Compliance with Loan Agreement. Except as set forth on a
Schedule of Exceptions attached hereto as Exhibit C (the "Schedule of
Exceptions") delivered herewith, the representations and warranties set forth in
clauses (a) through (k) and clauses (n) through (t) of Section 3 of the Loan
Agreement, are true and correct with the same effect as if such representations
and warranties had been made on the date hereof. In addition, Borrower has
complied with and is in compliance with all of the covenants set forth in the
Loan Agreement.
5.6 Financial Statements. The Borrower has provided or made
available to the Lenders unaudited financial statements (including balance
sheet, income statement and statement of cash flows) for the years ended
December 31, 2002, December 31, 2003 and December 31, 2004, in each case, as
attached hereto as Exhibit D (collectively, the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, except that the unaudited Financial Statements may not contain all
footnotes required by generally accepted accounting principles and the absence
of such notes do not make those financial statements misleading. The Financial
Statements fairly present the financial condition and operating results of the
Borrower as of the dates, and for the periods indicated therein. Except as set
forth in the Financial Statements, the Borrower has no liabilities in excess of
$75,000, contingent or otherwise, other than (1) liabilities incurred in the
ordinary course of business subsequent to December 31, 2004, (2) obligations
under contracts and commitments incurred in the ordinary course of business and
not required under generally accepted accounting principles to be reflected in
the Financial Statements and (3) the Subordinated Loan, which, in the case if
clauses (i) and (ii) above, individually or in the aggregate, are not material
to the financial condition or operating results of the Borrower. Except as
disclosed in the Financial Statements, the Borrower is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation. The
Borrower maintains and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted accounting
principles.
5.7 Changes. Since December 31, 2004, there has not been:
i. any damage, destruction or loss, whether or not covered
by insurance;
ii. any waiver, cancellation, release or compromise by the
Borrower of a valuable right or claim (or series of
related rights or claims) or of a material debt owed to
it;
iii. any adverse change to a material contract;
iv. any change in any compensation arrangement or agreement
with any Borrower senior officer, director or
stockholder outside the ordinary course of business;
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v. any sale, assignment, transfer or license by the
Borrower (except in the ordinary course of business) of
any patents, trademarks, copyrights, trade secrets or
other intangible assets;
vi. any resignation or termination of employment of any
officer or key employee of the Borrower, and the
Borrower does not know of any impending resignation or
termination of employment of any such officer or key
employee;
vii. receipt of notice that there has been a loss of, or
material order cancellation by, any major customer of
the Borrower;
viii. any mortgage, pledge, transfer of a security interest
in, or lien, created by the Borrower, with respect to
any of its material properties or assets, except liens
for taxes not yet due or payable;
ix. any loans or guarantees made by the Borrower to or for
the benefit of its employees, officers or directors, or
any members of their immediate families, other than
travel advances and other advances made in the ordinary
course of its business;
x. any declaration, setting aside or payment or other
distribution in respect to any of the Borrower's capital
stock, or any direct or indirect redemption, purchase or
other acquisition of any of such stock by the Borrower;
or
xi. any arrangement or commitment to do any of the things
described in this Section 5.7.
SECTION 6. REAFFIRMATION AND OTHER AGREEMENTS.
6.1 Borrower expressly reaffirms and assumes all of its
obligations and liabilities to Lender as set forth in the Loan Agreement and the
other Loan Documents and agrees to be bound by and abide by and operate and
perform under and pursuant to and comply fully with all of the terms,
conditions, provisions, agreements, representations, undertakings, warranties,
indemnities, grants of security interests and covenants contained in the Loan
Agreement and the other Loan Documents, in so far as such obligations and
liabilities may be modified by this Amendment, as though such Loan Agreement and
other Loan Documents were being re-executed on the date hereof, except to the
extent that such terms expressly relate to an earlier date. Borrower ratifies,
confirms and affirms without condition, all liens and security interests granted
to Lender pursuant to the Loan Agreement, the Security Agreement and the other
Loan Documents and such liens and security interests shall continue to secure
the Indebtedness, including but not limited to, the Loans made by Lender to
Borrower under the Loan Agreement as amended by this Amendment, and all
extensions renewals, refinancings, amendments or modifications of any of the
foregoing.
6.2 Borrower hereby acknowledges that: (i) it has no defenses,
claims or set-offs to the enforcement by Lender of such liabilities,
obligations and agreements (except
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pursuant to Section 6 of the Note); (ii) Lender has fully performed all
undertakings owed to Borrower as of the date hereof; and (iii) Lender does not
waive, diminish or limit any term or condition contained in the Loan Agreement
or in any of the other Loan Documents.
SECTION 7. NO WAIVER. This Amendment shall not be deemed to
constitute a waiver or release of any existing default or Event of Default by
Borrower under any of the Loan Documents or any remedies or rights of Lender
with respect thereto, all of which are hereby reserved by Lender.
SECTION 8. GENERAL PROVISIONS.
8.1 No Changes. Except as expressly provided in this Amendment,
the terms and provisions of the Loan Agreement shall remain in full force and
effect and are hereby affirmed, confirmed and ratified in all respects.
8.2 Compliance. Borrower hereby acknowledges that its failure to
comply with the terms of this Amendment will constitute an Event of Default
under the Security Agreement.
8.3 Governing Law. This Amendment shall be construed in accordance
with and governed by the internal laws (as distinguished from the conflicts of
law provisions) of the State of New York.
8.4 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument. This Amendment may also be
executed by facsimile and each facsimile signature hereto shall be deemed for
all purposes to be an original signatory page.
8.5 References. On or after the effective date hereof, each
reference in the Loan Agreement or any of the Loan Documents to this "Agreement"
or words of like import, shall unless the context otherwise requires, be deemed
to refer to the Loan Agreement as amended hereby.
8.6 Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
8.7 Successors and Assigns. This Amendment shall inure to the
benefit of Lender, its successors and assigns and be binding upon Borrower, its
successors and assigns.
8.8 Licensing Agreement. Notwithstanding anything to the contrary
contained herein, or in the Security Agreement or the Subordination Agreement,
nothing contained herein shall preclude Borrower from enforcing the terms of
that certain Distribution License Agreement dated as of September 30, 1996
between Borrower and Lender, as amended.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have causes this Amendment to
be executed by their respective officers thereunto duly authorized and delivered
at Chicago, Illinois as of the date first written above.
BORROWER: SILVON SOFTWARE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
LENDER: JDA SOFTWARE GROUP, INC.
By: /s/ Xxxx Xxxxxxxx
-----------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
[Signature page to Second Amendment to Secured Loan Agreement.]
EXHIBIT A
Second Amended and Restated Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
EXEMPTION FROM REGISTRATION AVAILABLE SO THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
$1,765,695.07 March 30, 2005
SILVON SOFTWARE, INC.
SECOND AMENDED AND RESTATED
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, Silvon Software, Inc., an Illinois corporation (the
"Company"), promises to pay to the order of JDA Software Group, Inc., a Delaware
corporation (and any permitted successor(s) and assign(s) under Section 8
hereof, the "Holder"), the principal amount of ONE MILLION SEVEN HUNDRED
SIXTY-FIVE THOUSAND SIX HUNDRED NINETY-FIVE and 07/100 Dollars ($1,765,695.07)
together with interest thereon calculated from the date hereof in accordance
with the provisions of this Second Amended and Restated Secured Promissory Note.
Terms not defined herein shall have the meaning given them in the Secured Loan
Agreement dated as of May 8, 2001 between the Company and the Holder, as amended
by that certain First Amendment to Secured Loan Agreement dated as of November
30, 2004 between the Company and the Holder (as the same may hereafter be
amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement"). Neither the foregoing reference to the Loan Agreement nor any
provisions thereof shall affect or impair the absolute and unconditional
obligation of the Company to pay the principal and interest on this Note as
provided herein.
1. Loan Agreement. This Second Amended and Restated Secured Promissory
Note (as amended or otherwise modified from time to time, the "Note") is the
Note called for by the Loan Agreement. The Holder is entitled to the benefits
of, and subject to the terms and conditions set forth in the Loan Agreement. The
benefits and rights of the Holder are also subject to certain conditions and
restrictions also set forth in the Loan Agreement, which conditions and
restrictions may be enforced against the Holder.
2. Maturity. The outstanding principal under this Note shall be due and
payable on March 30, 2006 (the "Maturity Date"). Notwithstanding the foregoing,
the entire unpaid principal sum of this Note, together with accrued and unpaid
interest thereon, shall become immediately due and payable upon any Event of
Default (as defined in the Security Agreement referred to in Section 3 hereof).
3. Security Interest and Collateral. This Note is secured by a first
priority security interest in all of the Company's assets pursuant to the terms
of the Amended and Restated Security Agreement dated November 30, 2004 by and
between the Company and the Holder (as
CHICAGO1228348
amended, restated, supplemented or otherwise modified from time to time, the
"Security Agreement").
4. Interest.
(a) The principal of this Note from time to time outstanding shall
bear interest on the unpaid principal amount of this Note outstanding from time
to time on a monthly basis from the date hereof (compounded monthly) at the rate
of eighteen percent (18%) per annum or the highest rate of interest then allowed
by law; provided, however, that upon an Event of Default and while that Event of
Default is continuing, the interest shall be the lesser of (i) twenty-one
percent (21%) or (ii) the highest rate of interest then allowed by law. All
interest on this Note shall be due and payable monthly on the first day of each
month, with the first interest payment due April 1, 2005.
(b) Following an Event of Default, the Company shall pay to the
Holder on demand all reasonable expenses and expenditures (including, but not
limited to, reasonable fees and expenses of legal counsel) incurred or paid by
the Holder in exercising or protecting its interests, rights and remedies under
this Note, plus interest thereon at the lesser of (i) twenty-one percent (21%)
per annum or (ii) the highest rate of interest then allowed by law from the date
of such demand by the Holder until paid.
(c) All agreements between Company and Holder, whether now existing
or hereafter arising and whether written or oral, are expressly limited so that
in no contingency or event whatsoever, whether by conversion, acceleration of
the maturity of this Note or otherwise, shall the amount paid, or agreed to be
paid, to the holder hereof for the use, forbearance or detention of the money to
be loaned hereunder or otherwise, exceed the maximum amount permissible under
applicable law. If from any circumstances whatsoever fulfillment of any
provision of this Note or of any other document evidencing, securing or
pertaining to the indebtedness evidenced hereby, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by law, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any such circumstances the
holder of this Note shall ever receive anything of value as interest or deemed
interest by applicable law under this Note or any other document evidencing,
securing or pertaining to the indebtedness evidenced hereby or otherwise an
amount that would exceed the highest lawful rate, such amount that would be
excessive interest shall be applied to the reduction of the principal amount
owing under this Note or on account of any other indebtedness of Company to
Holder relating to this Note, and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal of this Note and such
other indebtedness, such excess shall be refunded to Borrower. In determining
whether or not the interest paid or payable with respect to any indebtedness of
Company to Holder, under any specific contingency, exceeds the highest lawful
rate. Company and Holder shall, to the maximum extent permitted by applicable
law, (i) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest, (ii) amortize, prorate, allocate and spread the total
amount of interest throughout the full term of such indebtedness so that the
actual rate of interest on account of such indebtedness is uniform throughout
the term thereof and/or (iii) allocate interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a rate
greater than that
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permitted by law. The terms and provisions of this paragraph shall control and
supersede every other conflicting provision of all agreements between Company
and Holder.
5. Payment. All payments shall be made in lawful money of the United
States of America without setoff, counterclaim, or other defense (other than as
provided in Section 6 hereof) at such place as the Holder hereof may from time
to time designate in writing to the Company; provided that all payments
hereunder shall be made notwithstanding the Company's audit right under Section
14 of the Distribution Agreement (as defined below). Payment shall be credited
first to attorney fees then due and payable, second to accrued interest then due
and payable, and the remainder applied to principal, except in the case of a new
investment under Section 7 hereof, which shall first be credited to principal
and only when the principal is completely paid shall any such amount be applied
to accrued interest. Prepayment of this Note may be made at any time, and from
time to time, without penalty or premium.
6. Royalties. 100% of the Royalties (as defined in the Distribution
Agreement dated as of May 8, 2001 between the Company and the Holder (as
amended, restated, supplemented or otherwise modified from time to time, the
"Distribution Agreement")) due to the Company under the Distribution Agreement
shall be retained by the Holder and applied first against accrued interest then
due and then to outstanding principal hereunder.
7. New Money. If the Company shall either receive an investment by a
third party investor or borrow money from a bank or other third party lender,
50% of such investment or loan must be paid by the Company to the Holder to
reduce the outstanding principal and interest hereunder.
8. Transfer; Successors and Assigns. The terms and conditions of this
Note shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties. The obligations of the Company or the Holder under
this Note may not be assigned without the prior written consent of the other
party hereto which may be given or denied in their sole and absolute discretion.
9. Governing Law. This Note and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of law thereof.
10. Notices. Any notice required or permitted by this Note shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified; (ii) when sent by confirmed facsimile or electronic
transmission if received during normal business hours of the recipient on a
business day, or if not, then on the next business day; or (iii) one (1)
business day after deposit with a nationally recognized overnight courier,
specifying next business day delivery, with written verification of receipt. All
communications shall be sent to the Company and the Holder at the address as set
forth on the signature page hereof or at such other address as the Company or
the Holder may designate by ten (10) days advance written notice to the other
parties hereto.
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11. Lost Documents. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Note or
any Note exchanged for it, and an indemnity agreement reasonably satisfactory to
the Company (in case of loss, theft or destruction) or surrender and
cancellation of such Note (in the case of mutilation), the Company, at its own
expense, will make and deliver in lieu of such Note a new Note of like tenor and
unpaid principal amount and dated as of the date to which interest has been paid
on the unpaid principal amount of the Note in lieu of which such new Note is
made and delivered.
12. Amendments and Waivers. Any term of this Note may be amended or
waived only with the written consent of the Company and the Holder. Any waiver
by the Company or the Holder of a breach of any provision of this Note shall not
operate as or be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or
more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Note.
13. Waiver. The Company waives presentment and demand for payment,
notice of dishonor, protest and notice of protest, notice of nonpayment and
notice of acceleration of intent of acceleration of this Note. The right to
plead any and all statutes of limitations as a defense to any demands hereunder
or under the Security Agreement is hereby waived to the fullest extent permitted
by law, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any amount called for hereunder.
14. Invalidity. If any provision of this Note is invalid, illegal or
unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. In such an event, the
parties will in good faith attempt to effect the business agreement represented
by such invalidated term to the fullest extent permitted by law.
15. Attorneys' Fees. If an Event of Default occurs, the Holder shall be
entitled to receive and the Company (or its assignee) agrees to pay all costs of
collection incurred by the Holder, including, without limitation, reasonable
attorneys' fees for consultation, suit and/or settlement.
16. Remedies. The remedies of the Holder hereunder are governed by the
terms hereof and the Security Agreement.
17. Second Amended and Restated Secured Promissory Note. This Second
Amended and Restated Secured Promissory Note shall be in replacement of and in
substitution for that certain Amended and Restated Secured Promissory Note dated
November 30, 2004 in the original principal amount of $2,861,196.78, made by the
Company and payable to the order of JDA Software Group, Inc., as such note was
replaced and substituted by that certain Secured Promissory Note dated May 8,
2001 in the original principal amount of $3,500,000.00, made by the Company and
payable to the order of JDA Software Group, Inc. (the "Original Note"). The
indebtedness outstanding as of the date hereof evidenced by the Original Note is
continuing indebtedness, and nothing herein shall be deemed to constitute a
payment, settlement or novation of the Original Note, or to release or otherwise
adversely affect any lien, mortgage or security
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interest securing such indebtedness or any rights of the Holder against any
guarantor, surety or other party primarily or secondarily liable for such
indebtedness.
[Remainder of Page Intentionally Left Blank]
5
IN WITNESS WHEREOF, the parties hereto have causes this Second
Amended and Restated Secured Promissory Note to be executed by their respective
officers thereunto duly authorized and delivered at Chicago, Illinois as of the
date first written above.
COMPANY:
SILVON SOFTWARE, INC.
By:________________________________________
Name: __________________________________
Title:__________________________________
Address: 000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
AGREED TO AND ACCEPTED:
HOLDER:
JDA SOFTWARE GROUP. INC.
By:________________________________________
Name:___________________________________
Title:__________________________________
Address: 00000 00xx Xxxxxx Scottsdale
Xxxxxxxxxx, Xxxxxxx 00000
[Signature Page to Second Amended and Restated Secured Promissory Note]
EXHIBIT B
Subordination Agreement
SUBORDINATION AGREEMENT
WHEREAS, SILVON SOFTWARE, INC., an Illinois corporation (the "Borrower"),
is indebted to XXXXXXX X. XXXXXX, XXXXXXXX XXXXXX, XXXXXXX XXXXXX and XXXXX
XXXXXX (collectively, the "Subordinated Lenders"), as evidenced by (a) that
certain Note dated as of March 30, 2005 by the Borrower in favor of Xxxxxxx X.
Xxxxxx in the original principal amount of $550,000, (b) that certain Note dated
as of March 30, 2005 by the Borrower in favor of Xxxxxxxx Xxxxxx in the original
principal amount of $115,000, (c) that certain Note dated as of March 30, 2005
by the Borrower in favor of Xxxxxxx Xxxxxx in the original principal amount of
$75,000, (d) that certain Note dated as of March 30, 2005 by the Borrower in
favor of Xxxxx Xxxxxx in the original principal amount of $260,000 and (e) all
other agreements, documents and instruments evidencing the Junior Debt (as
defined below) (collectively, the "Junior Debt Instruments");
WHEREAS, the Subordinated Lenders are desirous of having JDA SOFTWARE
GROUP, INC., a Delaware corporation (the "Senior Lender") continue to extend
credit to the Borrower (as it may, in its sole discretion, determine), and the
Senior Lender has refused to consider the continued extension of such credit
until the Junior Debt is subordinated to the "Senior Debt" (as defined below) in
the manner hereinafter set forth; and
WHEREAS, the continued extension of credit, as aforesaid, by the Senior
Lender is necessary or desirable to the conduct and operation of the business of
the Borrower, and will inure to the personal and financial benefit of the
Subordinated Lenders.
NOW, THEREFORE, in consideration of the continued extension of credit by
the Senior Lender to the Borrower, as Senior Lender may, in its sole discretion,
determine, and for other good and valuable consideration to the Subordinated
Lenders, the receipt and sufficiency of which is hereby acknowledged, the
Subordinated Lenders hereby:
(A) subordinate the indebtedness evidenced by the Junior Debt
Instruments, as well as any and all other indebtedness now or at any time
or times hereafter owing by the Borrower, or any successor or assign of
the Borrower, including without limitation, a receiver, trustee or
debtor-in-possession (the term "Borrower" as used hereinafter shall
include any such successor or assign) to any of the Subordinated Lenders,
whether such indebtedness is absolute or contingent, direct or indirect
and howsoever evidenced, including without limitation all interest
thereon, (collectively, the "Junior Debt") to any and all indebtedness now
or at any time or times hereafter owing by the Borrower to the Lender
(whether absolute or contingent, direct or indirect and howsoever
evidenced, including without limitation all interest thereon and fees,
whether or not such interest or fees are allowed in a bankruptcy or
similar proceeding) and all other demands, claims, liabilities or causes
of action for which the Borrower may now or at any time or times hereafter
in any way be liable to the Lender, whether under any agreement,
instrument or document executed and delivered or made by the Borrower to
the Lender or otherwise (collectively, the "Senior Debt");
(B) agrees not to ask for or receive from, the Borrower or any other
person or entity any security for the Junior Debt;
(C) agrees to instruct the Borrower not to pay, and agrees not to
accept payment of, or assert, demand, xxx for or seek to enforce against
the Borrower or any other person or entity, by setoff or otherwise, all or
any portion of the Junior Debt unless and until Lender has, in writing,
notified the Subordinated Lenders that the Senior Debt has been paid in
full in cash and all obligations arising in connection therewith have been
discharged; provided, that the Borrower may make regularly scheduled
payments of interest with respect to the Junior Debt so long as (i) no
default exists or would occur as a result of such payment (x) under the
Secured Loan Agreement dated as of May 8, 2001 between the Borrower and
the Senior Lender, as amended, or (y) the Amended and Restated Security
Agreement dated as of November 30, 2004 by the Borrower in favor of the
Senior Lenders, (ii) all such regularly scheduled payments of interest are
based upon an interest rate not to exceed four percent (4%) per annum;
provided, that during any twelve month period, the aggregate amount of
such interest payments shall not exceed $40,000, and (iii) all such
regularly scheduled interest payments are calculated exclusive of interest
and any other amounts capitalized, if any, into the outstanding principal
balance of the Junior Debt;
(D) subrogates the Senior Lender to the Junior Debt; irrevocably
authorizes the Senior Lender (i) to collect, receive, enforce and accept
any and all sums or distributions of any kind that may become due, payable
or distributable on or in respect of the Junior Debt (other than with
respect to payments to the extent, and only to the extent, such payment is
permitted pursuant to clause (C) above), whether paid directly by the
Borrower or paid or distributed in any liquidation, bankruptcy,
arrangement, receivership, assignment, reorganization or dissolution
proceedings or otherwise, and (ii) in the Senior Lender's sole discretion,
to make and present claims therefor in, and take such other actions as the
Senior Lender deems necessary or advisable in connection with, any such
proceedings, either in the Senior Lender's name or in the name of the
Subordinated Lenders; and agrees that upon the written request of the
Senior Lender, it will promptly assign, endorse and deliver to and deposit
with the Senior Lender all agreements, instruments and documents
evidencing the Junior Debt, including without limitation the Junior Debt
Instruments;
(E) agrees to receive and hold in trust for and promptly turn over
to the Senior Lender, in the form received (except for the endorsement or
assignment by the Subordinated Lenders where necessary), any sums at any
time paid to, or received by, the Subordinated Lenders in violation of the
terms of this Subordination Agreement and to reimburse the Senior Lender
for all costs, including reasonable attorney's fees, incurred by the
Senior Lender in the course of collecting said sums should the
Subordinated Lenders fail to voluntarily turn the same over to the Senior
Lender as herein required. If the Subordinated Lenders fail
2
to endorse or assign to the Senior Lender any items of payment received by
any Subordinated Lender on account of the Junior Debt, each Subordinated
Lender hereby irrevocably makes, constitutes and appoints the Senior
Lender (and all persons designated by the Senior Lender for that purpose)
as such Subordinated Lender's true and lawful attorney and agent-in-fact,
to make such endorsement or assignment in such Subordinated Lender's name;
and
(F) until payment in full in cash of the Senior Debt, agrees that it
shall not modify or amend any agreement, instrument or document evidencing
the Junior Debt, including without limitation the Junior Debt Instruments,
without the prior written consent of the Senior Lender.
The Subordinated Lenders represent and warrant to the Senior Lender that
no Subordinated Lender has assigned or otherwise transferred the Junior Debt, or
any interest therein to any person or entity, that no Subordinated Lender will
make any such assignment or other transfer thereof, and that all agreements,
instruments and documents evidencing the Junior Debt will be endorsed with
proper notice of this Subordination Agreement. The Subordinated Lenders will
promptly deliver to the Senior Lender a certified copy of the Junior Debt
Instruments, as well as certified copies of all other agreements, instruments
and documents hereafter evidencing any Junior Debt, in each case showing such
endorsement. The Subordinated Lenders represent and warrant to the Senior Lender
that the outstanding amount of Junior Debt evidenced by the Junior Debt
Instruments as of the date of this Subordination Agreement is $1,000,000.
The Subordinated Lenders expressly waive all notice of the acceptance by
the Senior Lender of the subordination and other provisions of this
Subordination Agreement and all notices not specifically required pursuant to
the terms of this Subordination Agreement, and the Subordinated Lenders
expressly waive reliance by the Senior Lender upon the subordination and other
provisions of this Subordination Agreement as herein provided. The Subordinated
Lenders consent and agree that all Senior Debt shall be deemed to have been
made, incurred and/or continued at the request of the Subordinated Lenders and
in reliance upon this Subordination Agreement. The Subordinated Lenders agree
that the Senior Lender has made no warranties or representations with respect to
the due execution, legality, validity, completeness or enforceability of the
documents, instruments and agreements evidencing the Senior Debt, that the
Senior Lender shall be entitled to manage and supervise its financial
arrangements with the Borrower in accordance with its usual practices, without
impairing or affecting this Subordination Agreement, and that the Senior Lender
shall have no liability to the Subordinated Lenders, and the Subordinated
Lenders hereby waive any claim which they may now or hereafter have against the
Senior Lender arising out of (i) any and all actions which the Senior Lender
takes or omits to take (including without limitation actions with respect to the
occurrence of an event of default under any documents, instruments or agreements
evidencing the Senior Debt, and actions with respect to the collection of any
claim for all or any part of the Senior Debt from any account debtor, guarantor
or other person or entity) with respect to the documents, instruments and
agreements evidencing the Senior Debt or to the collection of the Senior Debt
(ii) the Senior Lender's election in any proceeding instituted under Chapter 11
of Title 11 of United States Code (11 U.S.C. Section 101 et. seq.) (the
"Bankruptcy Code"), of the application of
3
Section 1111(b)(2) of the Bankruptcy Code, and/or (iii) any borrowing or grant
of a security interest under Section 364 of the Bankruptcy Code by the Borrower,
as debtor-in-possession.
The Subordinated Lenders agrees that the Senior Lender, at any time and
from time to time hereafter, may enter into such agreements with the Borrower as
the Senior Lender may deem proper extending the time of payment of or renewing
or otherwise altering the terms of all or any of the Senior Debt, and may
release any balance of funds of the Borrower with the Senior Lender, without
notice to the Subordinated Lenders and without in any way impairing or affecting
this Subordination Agreement.
This Subordination Agreement shall be irrevocable and shall constitute a
continuing agreement of subordination and shall be binding on the Subordinated
Lenders and its heirs, personal representatives, successors and assigns, and
shall inure to the benefit of the Senior Lender, its successors and assigns
until the Senior Lender has, in writing, notified the Subordinated Lenders that
all of the Senior Debt has been paid in full in cash and all obligations arising
in connection therewith have been discharged. The Senior Lender may continue,
without notice to the Subordinated Lenders, to lend monies, extend credit and
make other accommodations to or for the account of the Borrower on the faith
hereof. The Subordinated Lenders hereby agree that all payments received by the
Senior Lender may be applied, reversed, and reapplied, in whole or in part, to
any of the Senior Debt, without impairing or affecting this Subordination
Agreement.
The Subordinated Lenders hereby assume responsibility for keeping
themselves informed of the financial condition of the Borrower, any and all
endorsers and any and all guarantors of the Senior Debt and the Junior Debt and
of all other circumstances bearing upon the risk of nonpayment of the Senior
Debt and the Junior Debt that diligent inquiry would reveal, and the
Subordinated Lenders hereby agrees that the Senior Lender shall have no duty to
advise the Subordinated Lenders of information known to the Senior Lender
regarding such condition or any such circumstances or to undertake any
investigation not a part of its regular business routine. If the Senior Lender,
in its sole discretion, undertakes, at any time or from time to time, to provide
any information of the type described herein to the Subordinated Lenders, the
Senior Lender shall be under no obligation to subsequently update any such
information or to provide any such information to the Subordinated Lenders on
any subsequent occasion.
No waiver shall be deemed to be made by the Senior Lender of any of its
rights hereunder unless the same shall be in writing signed on behalf of the
Senior Lender and each such waiver, if any, shall be a waiver only with respect
to the specific matter or matters to which the waiver relates and shall in no
way impair the rights of the Senior Lender or the obligations of the
Subordinated Lenders to the Senior Lender in any other respect at any other
time.
THIS AGREEMENT SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS (AS
DISTINGUISHED FROM THE CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW YORK.
To induce the Senior Lender to accept this Subordination Agreement, each
Subordinated Lender irrevocably agrees that, subject to the Senior Lender's sole
and absolute election, ALL
4
ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR
RELATED TO THIS AGREEMENT SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN XXX
XXXX XX XXX XXXX, XXXXX XX XXX XXXX. THE SUBORDINATED LENDERS HEREBY CONSENT AND
SUBMIT TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN
SAID CITY AND STATE. Each Subordinated Lender hereby irrevocably appoints and
designates Xxxxxxxxx Xxxxxx, whose address is c/o Barack Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxx & Xxxxxxxxx LLP, 000 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000 (or any other person having and maintaining a place of business in
Illinois whom the Subordinated Lenders may from time to time hereafter designate
upon ten (10) days written notice to the Senior Lender and who the Senior Lender
has agreed in its sole discretion in writing is satisfactory and who has
executed an agreement in form and substance satisfactory to the Senior Lender
agreeing to act as such attorney and agent), as such Subordinated Lenders' true
and lawful attorney and duly authorized agent for acceptance of service of legal
process. Each Subordinated Lender agrees that service of such process upon such
person shall constitute personal service of such process upon such Subordinated
Lender. EACH OF THE SUBORDINATED LENDERS HEREBY WAIVES ANY RIGHT IT MAY HAVE TO
TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST SUCH SUBORDINATED
LENDER BY THE SENIOR LENDER IN ACCORDANCE WITH THIS PARAGRAPH.
EACH OF THE SUBORDINATED LENDERS HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT.
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IN WITNESS WHEREOF, this Subordination Agreement has been executed as of
the first day written above.
SUBORDINATED LENDERS:
XXXXXXX X. XXXXXX
__________________________
Address:
000 Xxxxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
XXXXXXXX XXXXXX
__________________________
Address:
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
XXXXXXX XXXXXX
__________________________
Address:
0000 000xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
XXXXX XXXXXX
__________________________
Address:
0000 Xxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
