SUBORDINATED UNSECURED PROMISSORY NOTE
THIS
PROMISSORY NOTE IS SUBORDINATED TO (I) ANY PRESENT OR FUTURE INDEBTEDNESS OWING
FROM THE MAKER TO BANK OF AMERICA, N.A. AND ITS ASSIGNS, AND MAY BE ENFORCED
ONLY IN ACCORDANCE WITH THAT CERTAIN SUBORDINATION AGREEMENT DATED
[___________], BETWEEN [________________________________] AND (II) INDEBTEDNESS
TO TAG HOLDINGS, LLC PURSUANT TO THOSE CERTAIN SUBORDINATED UNSECURED PROMISSORY
NOTES DATED FEBRUARY 22, 2010 AND MAY BE ENFORCED ONLY IN ACCORDANCE WITH THAT
CERTAIN SUBORDINATION AGREEMENT DATED [____________] BETWEEN
[___________________] AND TAG HOLDINGS, LLC.
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US
$[___________]
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[___________],
2010
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For Value
Received, THE
KEYW HOLDING
CORPORATION, a
Maryland corporation (“Company”),
hereby promises to pay to the order of [_____________________]
(“Holder”),
in lawful money of the United States of America and in immediately available
funds, the principal sum of [_________________] (US
$[________________]) together with accrued and unpaid interest thereon, each due
and payable on the dates and in the manner set forth below. This
Subordinated Unsecured Promissory Note (this “Note”) is
made contemporaneously with that certain LLC Purchase Agreement, dated as of the
date hereof, by and among Company, Xxxxx Xxxx and Insight Information
Technology, LLC, a Delaware limited liability company.
1. Principal
Repayment. The outstanding principal amount of this Note shall
be due and payable on (such date being the “Maturity
Date”) the earlier of (i) [_____________] or (ii) seven (7) days
following the consummation of an initial public offering pursuant to an
effective registration statement under the Securities Act of 1933 of the common
stock of Company or any direct or indirect subsidiary of Company (collectively,
“HoldCo
Group”), or (iii) simultaneous with a Change of Control (as hereinafter
defined). For purposes of this Note, a “Change of
Control” shall mean (i) any change, in a single or series of related
transactions, of fifty percent (50%) or more of the combined voting power
of all classes of the voting equity or other economic interests (including
assets) of any member or members of the HoldCo Group whose revenue,
individually or combined, is equal to or greater than fifty percent (50%)
of the aggregate revenue of all members of the HoldCo Group immediately prior to
such transaction or series of related transactions; provided, that the
issuance of the equity of a member of the HoldCo Group as
consideration in connection with such member's acquisition of assets,
equity or other property of another Person or Persons shall not in any event
constitute a Change of Control, or (ii) (x) a sale, or other
disposition of a majority of the assets of Company, (y) a transfer or sale of
more than fifty percent (50%) of the combined voting power of all classes of the
voting equity of Company, or (z) a merger or consolidation involving
Company in which Company's voting equity interests outstanding immediately prior
to such merger or consolidation are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise, and a third
party controls Company as a result. Notwithstanding the foregoing,
all principal and interest payments in respect of this Note shall be subject to
the Subordination Agreements (as defined below) and the provisions
hereunder.
2. Interest Rate and
Payments. Company further promises to pay interest on the
outstanding principal amount of this Note from the date hereof until payment in
full at an interest rate equal to eight percent (8%) per annum, compounded
quarterly, and such interest shall be payable in full on the date that the
principal amount hereof is required to be paid hereunder. All
computations of interest shall be made by Holder on the basis of a year of 360
days based upon the actual number of days elapsed. Notwithstanding
the foregoing, all principal and interest payments in respect of this Note shall
be subject to the Subordination Agreements and the provisions
hereunder.
3. Place of
Payment. All amounts payable hereunder shall be payable in
immediately available funds to Holder at the address or to the wire transfer
account designated by Holder by prior written notice, which notice shall contain
wire transfer instructions, if applicable.
4. Application of
Payments. Payment on this Note received by Holder shall be
applied first to late payment charges or other sums owned to Holder hereunder,
next to accrued interest, and thereafter to the outstanding balance of the
principal amount hereof.
5. Prepayment. Company may, at its option at
any time and from time to time hereafter, prepay, in whole or part, without
premium or penalty, the outstanding principal amount of this Note, together with
accrued but unpaid interest on such principal amount to the date of
prepayment.
6. Default. Each of
the following events shall be an “Event of
Default” hereunder:
(a) if
Company shall fail to pay timely any of the principal or interest due under this
Note on the date the same becomes due and payable;
(b) if
Company shall fail to perform, in the time and manner required, any of its
obligations or covenants under, or shall fail to comply with any of the
provisions of, this Note, which does not involve the failure to make a payment
when due (be it principal or interest) and such default is not cured within
thirty (30) days following written notice thereof by Holder to
Company;
(c) if
a default or event of default with respect to any Senior Debt (as defined below)
has occurred and is continuing and the holders of such Senior Debt have
accelerated the maturity of such Senor Debt;
(d) if
any member of HoldCo Group files any petition or commences any case or other
proceeding with respect thereto for relief under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, liquidation, or moratorium law or
any other law for the relief of, or relating to, debtors, now or hereafter in
effect, or makes any assignment for the benefit of creditors, or admits in
writing its inability to pay or generally fails to pay its debts as they mature
or become due, or takes any corporate action in furtherance of any of the
foregoing; or
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(e) if
an involuntary petition is filed or any case or other proceeding is commenced
against any member of HoldCo Group (unless such petition is dismissed or
discharged within ninety (90) days) under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, liquidation or moratorium statute
now or hereafter in effect, or a custodian, receiver, trustee, liquidator,
assignee for the benefit of creditors (or other similar official) is applied for
or appointed for any member of HoldCo Group or is applied for or appointed to
take possession, custody or control of any property of such member of HoldCo
Group.
7. Default Interest
Rate. Upon and from the occurrence of any Event of Default
throughout the time that such Event of Default continues and remains uncured and
that any portion of the outstanding principal amount of this Note remains unpaid
and outstanding, such outstanding principal amount will bear interest at the
rate equal to fourteen percent (14%) per annum, compounding
quarterly.
8. Remedies. Upon
the occurrence of
an Event of Default which continues beyond
any applicable grace or cure period, the then-outstanding principal balance of
this Note, together with any accrued but unpaid interest on such principal
amount and all other sums payable, shall at the option of Holder become
immediately due and payable. Notwithstanding the foregoing, if there
shall occur an Event of Default under Section 6(d) or 6(e) above, the
then-outstanding principal balance of this Note, together with any accrued but
unpaid interest on such principal amount and all other sums payable, shall
become immediately due and payable without any action on the part of
Holder.
9. Subordination. This
Note shall at all times be wholly subordinate and junior in right of payment and
remedies to all Senior Debt of Company pursuant to the Subordination
Agreements. For purposes of this Note, “Senior
Debt” shall mean any and all indebtedness, obligations or liabilities
that now or hereafter may be owing or guaranteed by Company to (i) Bank of
America, N.A. (the “Bank”)
pursuant to the terms of that certain Credit and Security Agreement, dated
February 22, 2010 by and between the Company, certain direct and indirect
subsidiaries of the Company and the Bank and (ii) TAG Holdings, LLC (“TAG”)
pursuant to the terms of that certain Subordinated Unsecured Promissory Note,
dated February 22, 2010, in the principal amount of $8,251,076.00 and that
certain Subordinated Unsecured Promissory Note, dated February 22, 2010, in the
principal amount of $3,400,000.00 (collectively, the Subordinated Unsecured
Promissory Notes are hereinafter referred to as the “TAG
Notes”). Reference is made to that certain subordination
agreement, dated March 15, 2010 executed by Holder and accepted by the Bank and
Company (the “Bank
Subordination Agreement”) and that certain subordination agreement, dated
[____________] executed by Holder and accepted by TAG and Company, in each
instance subordinating this Note to the Senior Debt (the “TAG Subordination
Agreement” and together with the Bank Subordination Agreement, the “Subordination
Agreements”).
10. Governing Law. This
Note shall be governed by, and construed and enforced in accordance with, the
laws of the State of Maryland, excluding conflict of laws principles that would
cause the application of laws of any other jurisdiction.
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11. Successors and
Assigns. The provisions of this Note shall inure to the
benefit of and be binding on any successor to Company and
Holder. This Note may not be sold, assigned or transferred (by
operation of law or otherwise) or pledged by Holder without the prior written
consent of Company. The Company shall not assign or delegate any
obligations hereunder without the prior written consent of the
Holder.
12. Third Party
Beneficiaries. The provisions contained in Section 9 of this
Note are and will be for the benefit of any third party that is a holder of
Senior Debt; and, accordingly, any such third party shall have the right to
enforce such provisions of this Note.
13. Waiver of Jury
Trial. COMPANY AND HOLDER EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY LITIGATION BASED HEREON, OR ARISING OUT OF OR UNDER THIS NOTE, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY IN CONNECTION WITH THIS NOTE.
14. Notice. All
notices, demands, requests or other communications which may be or are required
to be given or made by either party to the other party pursuant to this Note
shall be in writing, hand delivered (including delivery by overnight courier) or
transmitted by facsimile and addressed as follows:
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If
to Company:
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The
KEYW Holding Corporation
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0000
Xxxxxx Xxxx, Xxxxx X
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Xxxxxxx,
XX 00000
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Attention:
Xxxx X. Xxxxxxx, Chief Financial Officer
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Fax:
(000) 000-0000
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If
to Holder:
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[______________________]
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15. Waiver. Company
hereby expressly waives presentment for payment, demand, protest and notice of
dishonor and protest, and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this
Note.
16. Commercial
Loan. Company acknowledges and warrants that the debt
evidenced hereby is a “commercial loan” within the meaning of Title 12 of the
Commercial Law Articles of the Annotated Code of Maryland.
17. Entire Agreement;
Amendments. This Note constitutes the entire agreement and
understanding of the parties with respect to the subject loan, and supersedes
and replaces in their entirety any prior discussions, agreements, etc., all of
which are merged herein and therein. None of the terms of this
Note may be amended or otherwise modified except by an agreement in writing
executed by each of Company and Holder.
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18. Additional
Warrants. Notwithstanding anything to the contrary set forth
herein, should the Company fail to pay to the Holder the principal and accrued
and unpaid interest on the Maturity Date, in addition to the payment of any
increased interest set forth in Section 7, the Company agrees to issue to the
Holder warrants to purchase 20,000 shares of Common Stock (or pro rata portion
thereof) of the Company at an exercise price of $9.25 per share of Common Stock
per $1 million principal amount (or pro rata portion thereof) not repaid at the
Maturity Date. Such warrants shall be in the form as the warrants
issued in connection with the issuance of this Note to the Holder.
THIS
NOTE IS NON-NEGOTIABLE.
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In Witness
Whereof, this Subordinated Unsecured Promissory Note has been duly
executed as an instrument under seal as of the date first set forth
above.
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COMPANY:
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THE
KEYW HOLDING CORPORATION
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By:
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Name:
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Xxxxxxx
X. Xxxxxxxxx
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Title:
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Chief
Executive Officer
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Acknowledged
and Agreed:
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HOLDER:
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Name:
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Title:
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Date
of Note: [______], 2010
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Payor:
The KEYW Holding Corporation
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Amount:
$[____________]
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Signature
Page to Promissory Note
