Exhbit 10.1
SENIOR SECURED NOTE
U.S.$585,000.00 December 13, 2004
FOR VALUE RECEIVED, and intending to be legally bound, the undersigned,
DATATEC SYSTEMS, INC., a Delaware corporation, and DATATEC INDUSTRIES INC., a
New Jersey corporation (each of the foregoing, a "BORROWER" and, collectively,
the "BORROWERS"), hereby promise to pay, in lawful money of the United States,
to the order of ALPINE ASSOCIATES, A LIMITED PARTNERSHIP (together with its
successors and assigns, the "LENDER"), the principal sum of FIVE HUNDRED
EIGHTY-FIVE THOUSAND AND 00/100 DOLLARS ($585,000.00) on January 12, 2005 (the
"MATURITY DATE"), together with interest thereon and other amounts due hereunder
in accordance with the payment provisions hereinafter set forth in this Senior
Secured Note (this "NOTE").
1.1 TERMS OF NOTE.
(a) JOINT AND SEVERAL LIABILITY. Each Borrower shall be jointly and
severally liable to the Lender for all the principal amount of this Note, all
interest thereon, and all other amounts due and owning to the Lender hereunder.
(b) PAYMENT OF PRINCIPAL. If not sooner repaid or prepaid in whole or
in part, the principal balance hereunder shall be paid together with any accrued
and unpaid interest thereon and any other amounts due and owning in respect
thereof on the Maturity Date.
(c) PAYMENT OF INTEREST. The Borrowers shall pay to the Lender
interest on the unpaid principal balance of this Note at the rate per annum
equal to the greater of (i) ten percent (10.00%) or (ii) LIBOR plus seven
percent (7.00%). All accrued and unpaid interest in respect of this Note shall
be due and payable on the Maturity Date. For purposes of this Note, "LIBOR"
means for the date hereof and on the 13th day of each month (or if such day is
not a business day, the next preceding business day) subsequent to the date
hereof, (a) the rate per annum (rounded to the nearest 1/100 of 1%) equal to the
rate determined by the Lender to be the offered rate which appears on the page
of the Telerate Screen which displays an average British Bankers Association
Interest Settlement Rate (such page currently being page number 3740 or 3750, as
applicable) for deposits (for delivery on the first day of such period) with a
term equivalent to one months in United States dollars, determined as of
approximately 11:00 a.m. (London, England time) on such date, or (b) in the
event the rate referenced in the preceding clause (a) does not appear on such
page or service or if such page or service shall cease to be available, the rate
per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by
the Lender to be the offered rate on such other page or other service which
displays an average British Bankers Association Interest Settlement Rate for
deposits (for delivery on the first day of such period) with a term equivalent
to one month in United States dollars, determined as of approximately 11:00 a.m.
(London, England time) on such date.
(d) COMPUTATION OF INTEREST. Interest hereunder shall be computed
monthly on the basis of a year of 360 days for the actual number of days
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elapsed. If the due date for the payment of principal is extended by operation
of law, interest shall be payable for such extended time.
(e) ADDITIONAL PAYMENTS OR CHARGES. Borrowers further promise to pay
to the Lender, immediately upon demand, any other sums and charges that may
become due and payable under this Note, and all reasonable costs and
disbursements in connection with (a) the preparation of this Note and the other
Note Documents, (b) the collection of any payments due under this Note and the
other Note Documents and (c) any action, suit or proceeding to protect, sustain
or enforce the rights and remedies of Lender under this Note and the other Note
Documents.
(f) PAYMENT TERMS. All payments made hereunder shall be made to the
Lender at its account at BANK OF NEW YORK, XXX XXXX XXXXXX, XXX XXXX, XXX XXXX,
00000, ABA# 021 000 018, ACCT# 866 1151 510, ACCOUNT NAME: ALPINE ASSOCIATES, LP
(or such other account as the Lender may direct the Borrowers in writing) on or
before 2:00 p.m. (New York City time) on the Maturity Date, in immediately
available funds in Dollars, and free and clear of, and without deduction or
withholding for, any taxes or other payments.
(g) DEFAULT RATE. Interest will be assessed on any amounts owing in
respect of this Note or any other Note Document which remain unpaid on the date
such amounts are due, whether by acceleration or otherwise, at a rate which is
4% in excess of the rate otherwise charged hereunder (the "DEFAULT Rate"). Such
Default Rate shall also be charged on the amounts owed by the Borrowers to the
Lender pursuant to any judgments entered in favor of the Lender with respect to
this Note.
(h) PREPAYMENT. This Note may be prepaid by the Borrowers, in whole
or in part, at any time without premium or penalty. Accrued and unpaid interest
with respect to any principal amount prepaid shall be due and payable on the
date of such prepayment.
(i) USE OF PROCEEDS. The Borrowers shall use the proceeds of this
Note as set forth on Exhibit 1 hereto.
(j) FEE. The Borrowers agree to pay to the Lender, on the date
hereof, a fee of $15,000,which may be deducted from the disbursement of proceeds
of this Note.
(k) SECURITY INTEREST. The Borrowers' obligations in respect of this
Note shall be secured by substantially all of the assets of the Borrowers as
provided in the Security and Pledge Agreement, dated as of December 13, 2004,
made by the Borrowers to the Lender (the "SECURITY AGREEMENT").
(l) SUBORDINATION. The Borrowers acknowledge that (i) this Note is
senior to all liabilities and obligations of the Borrowers to Eagle Acquisition
Partners, Inc. ("EAGLE") pursuant to the Subordination and Intercreditor
Agreement, dated as of December 13, 2004, among the Borrowers, the Lender and
Eagle (the "SUBORDINATION AGREEMENT" and, together with the Security Agreement
and this Note, the "NOTE DOCUMENTS") and (ii) the execution and delivery of the
Subordination Agreement by Eagle and the Borrowers is a condition to, and
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material inducement for, the Lender agreeing to make the loans evidenced by this
Note.
1.2 DEFAULT. The occurrence of any one or more of the following
events shall constitute an "EVENT OF DEFAULT":
(a) Either Borrower shall have failed to pay any amount due and owing
in respect of this Note or any other Note Document on the date when due.
(b) Any warranty, representation, or other statement made or
furnished to Lender by or on behalf of any Borrower or in any instrument,
certificate or financial statement furnished in compliance with or in reference
to this Note or any of the other Note Documents proves to have been false or
misleading in any material respect when made or furnished.
(c) There shall occur any material loss, theft, damage or destruction
not fully covered by insurance (as required by this Agreement and subject to
such deductibles as Lender shall have agreed to in writing), or any sale, lease
or encumbrance of any of the Collateral (as defined in the Security Agreement)
or the making of any levy, seizure, or attachment thereof or thereon
(d) Either Borrower shall use the proceeds of this Note in a manner
other than as provided in Section 1.1(i).
(e) Any Event of Default (as defined thereunder) shall have occurred
and is continuing under the Debtor In Possession Revolving Credit Agreement,
dated as of December 14, 2004, among the Borrowers and the Lender.
(f) Either Borrower or Eagle shall fail or neglect to perform, keep
or observe any covenant contained herein or in any other Note Document.
1.3 REMEDIES.
(a) REMEDIES. Upon and during the continuance of an Event of Default,
the Lender, at its option, may exercise any and all rights and remedies it has
under the Note and the other Note Documents, including, without limitation, (i)
the right to accelerate the principal of this Note (whereupon the same shall
become, forthwith due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrowers;
provided that upon the occurrence of an event of default described in 1.2(g)
above the Note shall be immediately due and payable without further action),
(ii) the right to charge and collect interest on the principal portion of the
amounts outstanding hereunder at the Default Rate; and (iii) all rights and
remedies the Lender may have under the Security Agreement. Upon and following an
Event of Default, the Lender may proceed to protect and enforce the Lender's
rights hereunder and/or under applicable law by action at law, in equity, or
other appropriate proceeding, including, without limitation, an action for
specific performance to enforce or aid in the enforcement of any provision
contained herein.
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(b) REMEDIES CUMULATIVE; NO WAIVER; NO DEFENSES. The rights, powers
and remedies of the Lender provided in this Note are cumulative and not
exclusive of any right, power or remedy provided by law or equity. No failure or
delay on the part of the Lender in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise
preclude any other or further exercise thereof, or the exercise of any other
right, power or remedy. The obligations of each Borrower under this Note shall
not be subject to any counterclaim or defense to payment that any Borrower no
has or may have in the future.
1.4 MISCELLANEOUS.
(a) LOST, STOLEN MUTILATED OR DESTROYED NOTE. In the case that this
Note shall be lost, stolen, mutilated or destroyed, the Borrowers shall issue a
new Note of like date, tenor and denomination and deliver the same in exchange
and substitution for and upon surrender and cancellation of such mutilated Note,
or if this Note is lost, stolen or destroyed, upon receipt of an affidavit
executed by an officer of the Lender of the loss, theft or destruction of this
Note.
(b) NOTICES. All notice, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission, or similar writing) and shall be give to such party (a)
in the case of the Lender to: Alpine Associates, LP, 000 Xxxxx Xxxxxx Xxxxxxxxx,
Xxx Xxxxxx 00000, Attn: Xx. Xxx Xxxxxxxx Telephone: 000-000-0000;
Facsimile:000-000-0000, with a copy to Xxxxxx & Xxxxxx, L.L.P., 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attn: Xxxxxx Xxxxxxxxxx, Esq., Facsimile
000-000-0000; and (b) if to the Borrowers: DataTec Systems, Inc., 0000 Xxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, Attn: Chief Executive Officer; Telephone:
(000) 000-0000; Facsimile:(000) 000-0000, with a copy to Xxxxxxxxxx Xxxxxxx PC,
00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, Attn:Xxxxx Xxxxxxxx, Esq., Facsimile:
000-000-0000.
(c) GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(d) AMENDMENT; WAIVER. No amendment of this Note, and no waiver of
any one or more of the provisions hereof shall be effective unless set forth in
writing and signed by the parties hereto.
(e) SUCCESSORS AND ASSIGNS. This Note (a) shall be binding upon each
Borrower and its successors and permitted assigns, and (b) shall inure to the
benefit of the Lender and its successors and assigns; provided, however, that
neither Borrower may assign its rights or obligations hereunder or any interest
herein without the prior written consent of the Lender, and any such assignment
or attempted assignment by either Borrower shall be void and of no effect with
respect to the Lender.
(f) HEADINGS. The headings of sections and paragraphs have been
included herein for convenience only and shall not be considered in interpreting
this Note.
(g) SUBMISSION TO JURISDICTION. Each Borrower hereby irrevocably and
unconditionally: (i) submits for itself and its property in any legal action or
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proceeding relating to this Note (including any counterclaim brought in any such
action or proceeding), or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of United States
Federal or New York State court sitting in the New York County , New York; (ii)
consents that any such action or proceeding may be brought in such courts, and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in an inconvenient forum and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrowers at their
address set forth above or at such other address of which the Lender shall have
been notified in writing; and (iv) agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction.
(h) COPY OF NOTE ENFORCEABLE. A facsimile, counterpart or other copy
of the this Note shall be enforceable as if such facsimile, counterpart or other
copy were the original copy of this Note.
(i) JURY TRIAL WAIVER. EACH BORROWER AND, BY ITS ACCEPTANCE OF THIS
NOTE, THE LENDER HAVE KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVED ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN. EACH BORROWER
ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF
THIS NOTE AND THAT THE LENDER WOULD NOT EXTEND CREDIT TO SUCH BORROWER IF THE
WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS NOTE.
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IN WITNESS WHEREOF, each Xxxxxxxx has duly executed and delivered to the Lender
this Note as of the day and year first above written.
DATATEC SYSTEMS, INC., a Delaware corporation
By: ___________________________
Name: ___________________________
Title: ___________________________
DATATEC INDUSTRIES, INC., a New Jersey corporation
By: ___________________________
Name: ___________________________
Title: ___________________________
