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EXHIBIT 99.3
MASTER NOTE MODIFICATION AGREEMENT
THIS MASTER NOTE MODIFICATION AGREEMENT ("Agreement"), is dated as of the
19th day of May, 2000, by and between XL Vision, Inc. ("Borrower"), and
Safeguard Delaware, Inc. ("Safeguard"), Technology Leaders L.P. and Technology
Leaders MI Corp. (collectively, "Technology Leaders"). Safeguard and Technology
Leaders are each sometimes referred to herein individually as a "Lender" and,
collectively, as the "Lenders."
WITNESSETH:
WHEREAS, the Borrower executed and delivered to Safeguard the following
(collectively, the "Safeguard Notes"): (a) that certain Demand Note dated
October 27, 1999, in the principal amount of Three Hundred Thousand and No/100
Dollars ($300,000); (b) two certain Demand Notes, each dated November 2, 1999,
and each in the principal amount of One Million and No/100 Dollars ($1,000,000);
and (c) that certain Amended and Restated Note dated November 3, 1999, in the
principal amount of Five Million and No/ 100 Dollars ($5,000,000); each
Safeguard Note bearing interest and default interest and being payable on the
terms and conditions specified therein;
WHEREAS, the Borrower executed and delivered to Technology Leaders the
following, each dated February 2, 1994 (collectively, the "TL Notes"): (a) that
certain 9% Subordinated Note Due December 31, 1999, payable to Technology
Leaders MI Corp. in the principal amount of One Million Three Hundred Thirty
Thousand Eight Hundred Forty-Seven and No/100 Dollars ($1,330,847); (b) that
certain 9% Subordinated Note Due December 31, 1999, payable to Technology
Leaders L.P. in the principal amount of One Million One Hundred Sixty-Five
Thousand Five Hundred Eighty-Two and No/100 Dollars ($1,165,582); each bearing
interest and default interest and being payable on the terms and conditions
specified therein; and (c) that certain Note and Warrant Purchase Agreement by
and among the Borrower, the Technology Leaders and Applewood Associates;
WHEREAS, in connection with that certain Stock Purchase Agreement dated as
of May 19, 2000 by and between the Borrower and incuVest LLC (the "Stock
Purchase Agreement") and as a condition to the closing of the transactions
contemplated thereby (the "Closing"), the Borrower and the Lenders have agreed
to amend the Safeguard Notes and the TL Notes and set forth herein and
effectuate hereby their agreement in this regard.
NOW, THEREFORE, for and in consideration of the foregoing premises and the
sum of Ten and No/ 100 Dollars ($10.00) cash in hand paid by each party hereto
to the other, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and each Lender
hereby agree as follows:
1. The total amount outstanding under the Safeguard Notes, including all
principal, interest, charges and fees calculated as of May 31, 2000, is
Seven Million Two Hundred
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Forty-Three Thousand Two Hundred Thirty-Nine and No/100 Dollars
($7,243,239) and the total amount outstanding under the TL Notes,
including all principal, interest, charges and fees calculated as of May
31, 2000, is Four Million Four Hundred Sixty-Six Thousand Five Hundred
Fourteen and No/100 Dollars ($4,466,514). No Lender has sold, assigned,
participated or otherwise transferred any interest or rights in any
Safeguard Notes or TL Notes to any person or entity prior to the date
hereof The parties hereby waive any and all defaults or breaches which may
have occurred prior to the date hereof under the Safeguard Notes or the TL
Notes.
2. The Safeguard Notes and the TL Notes are hereby modified and amended,
notwithstanding any terms or provision thereof to the contrary, to provide
for the following repayment terms:
(a) One-third of all amounts outstanding under the Safeguard Notes and
the TL Notes, including principal, interest, charges and fees, shall
be paid by the Borrower by transfer to Safeguard of 120,721 shares
of common stock of eMerge Interactive, Inc. owned by the Borrower,
and by transfer to the TL Lenders of 74,442 shares of such emerge
Interactive common stock owned by the Borrower, divided 34,757
shares to Technology Leaders L.P. and 39,685 shares to Technology
Leaders MI Corp. The shares of common stock of eMerge Interactive
shall be valued at Twenty Dollars ($20.00) per share for purposes of
such transfer. Such transfer shall occur within a reasonable period
of time following the Closing, the parties being aware that the
shares of eMerge Interactive may be subject to restrictions on
transfer under lock-up agreements and pledge agreements.
(b) The Borrower shall pay the second one-third of all amounts
outstanding under the Safeguard Notes and the TL Notes, including
principal, interest, charges and fees, by paying Safeguard the lump
sum of Two Million Four Hundred Fourteen Thousand Four Hundred
Thirteen and No/ 100 Dollars ($2,414,413) and by paying the TL
Lenders One Million Four Hundred Eighty-Eight Thousand Eight Hundred
Thirty-Eight and No/100 Dollars ($1,488,838), divided $695,138 to
Technology Leaders L.P. and $793,700 to Technology Leaders MI Corp.
Each such payment shall be made on or before August 15, 2001.
(c) The amounts outstanding under the Safeguard Notes and the TL Notes
after giving effect to the payments described in paragraphs (a) and
(b) above, including principal, interest, charges and fees, shall be
paid by the Borrower by transfer to Safeguard and Technology Leaders
of shares of common stock of the next company in which the Borrower
owns shares of common stock to register shares of such company's
common stock for sale to the public in an underwritten initial
public offering ("IPO") of such stock conducted pursuant to a
registration statement filed under the Securities Act of 1933, as
amended. Such transferred shares (the "IPO Shares") shall be valued
at the IPO price per share offered to the public, and, in the
aggregate, shall have a value, calculated using the IPO price per
share, of Three Million Nine Hundred Three Thousand Two Hundred
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Fifty-One and No/100 Dollars ($3,903,251). The transferred shares
shall not be registered. The Borrower shall transfer to Safeguard
IPO Shares with a value of Two Million Four Hundred Fourteen
Thousand Four Hundred Thirteen and No/ 100 Dollars ($2,414,413) and
shall transfer to the TL Lenders IPO Shares with a value of One
Million Four Hundred Eighty-Eight Thousand Eight Hundred
Thirty-Eight and No/100 Dollars ($1,488,838), divided $695,138 to
Technology Leaders L.P. and $793,700 to Technology Leaders MI Corp.
Such transfer shall occur within a reasonable period of time
following closing of such IPO (provided the transferee agrees in
writing to be bound by any lock-up agreement executed by the
Borrower in connection with such IPO).
(d) The payments described in paragraphs (a) through (c) above, if
tendered when and as provided above, shall constitute full and
complete payment of all obligations owed by the Borrower to the
Lenders under and pursuant to the Safeguard Notes and the TL Notes,
including principal, interest, fees and charges. As long as the
Borrower is not in default of the above repayment provisions,
interest shall not continue to accrue on any unpaid amounts
outstanding under the Safeguard Notes or the TL Notes. If Borrower
defaults on the above repayment provisions, then from the date of
such default and continuing until such default is cured or the
Safeguard Notes and the TL Notes are paid in full, interest shall
accrue on the principal amounts outstanding under the Safeguard
Notes and the TL Notes at the default rate of interest specified
therein.
3. The parties hereto agree that, as of Closing, the Stock Purchase
Agreement, the Related Agreements (as defined therein) and this Agreement
and the agreements and documents executed or to be executed in connection
herewith supercede and replace the terms and provisions of the Note and
Warrant Purchase Agreement dated February 2, 1994 in their entirety. The
parties hereto agree to execute and deliver promptly (and to cause their
affiliates to execute and deliver promptly) such further agreements,
amended and restated promissory notes, amendments, terminations, transfer
documents, instruments and certificates as may be reasonably required to
carry out the intent and purpose of this Agreement, and to give effect to
the transactions contemplated hereby, including but not limited to such
consents, releases of collateral and waivers as may be required under and
pursuant to that certain Note Purchase Agreement dated as of May 14, 1999
by and among the Borrower, Safeguard 98 Capital, L.P. and the "Xxxxxxx
Group" as defined therein, and the Stock Pledge Agreement executed and
delivered by the Borrower in connection therewith.
4. The terms and conditions of the Safeguard Notes and the TL Notes shall be
amended and restated to give effect to the provisions of this Agreement
and the parties' intentions with respect hereto within a reasonable period
of time after the date of this Agreement. This Agreement is not intended
to be nor shall it constitute a novation of the Safeguard Notes or the TL
Notes or the indebtedness evidenced thereby, but rather a restatement of
the terms thereof Borrower hereby ratifies, confirms and approves the
Safeguard Notes and the TL Notes as modified herein and pursuant hereto,
and agrees that the same constitutes the valid and binding obligation of
Borrower, enforceable by the respective Lenders in
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accordance with their terms, except as enforcement may be limited by
applicable bankruptcy, fraudulent conveyance or similar laws affecting the
rights of creditors, and for general principles of equity, and except as
may otherwise be provided therein. From and after the Closing, any
references to the Safeguard Notes or the TL Notes in any other document
evidencing, securing or otherwise relating to the indebtedness evidenced
thereby shall mean and refer to the Safeguard Notes and the TL Notes, as
modified, amended and restated hereby and pursuant hereto.
5. This Agreement, the Safeguard Notes and the TL Notes, as amended and
restated hereby and pursuant hereto, shall be governed by, and construed,
interpreted and enforced in accordance with the laws of the State of
Delaware. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective legal representatives, successors and
assigns. This Agreement may be executed in counterparts and may be
delivered via facsimile, each of which shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Borrower and the Lenders have executed this Master
Note Modification Agreement, all effective as of the day, month and year first
above written.
BORROWER:
XL VISION, INC.
By: ___________________________________
Name:_______________________________
Title:______________________________
(CORPORATE SEAL)
LENDERS:
SAFEGUARD DELAWARE, INC.
By: ___________________________________
Name:_______________________________
Title:______________________________
TECHNOLOGY LEADERS L.P.
By: ___________________________________
Name:_______________________________
Title:______________________________
TECHNOLOGY LEADERS MI CORP.
By: ___________________________________
Name:_______________________________
Title:______________________________
