EXHIBIT 10.4
5% SECURED NOTE
$20,000,000 June 30, 1999
FOR VALUE RECEIVED, EGLOBE FINANCING CORPORATION, a Delaware
corporation, IDX FINANCING CORPORATION, a Delaware corporation, and TELEKEY
FINANCING CORPORATION, a Delaware corporation (collectively, the "Maker"),
jointly and severally promise to pay to the order of EXTL INVESTORS, LLC, a
limited liability company organized under the laws of Nevada (the "Holder"), at
000 Xxxxxx, Xxxxx 000, Xxxxx, XX 00000, or at such other place as the Holder of
this Note may from time to time designate, the principal amount of Twenty
Million United States Dollars ($20,000,000), together with any accrued but
unpaid interest thereon, on the terms and conditions set forth below.
This Note is one of the "Notes" referred to in the Loan and
Note Purchase Agreement dated as of April 9, 1999, by and among the Maker,
eGlobe, Inc., a Delaware corporation (the "Parent"), and the Holder and amended
by Amendment No. 1 to Loan and Note Purchase Agreement dated as of the date
hereof (the "Loan and Note Purchase Agreement"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Loan and Note Purchase
Agreement.
Principal and interest shall be due and payable in 36 equal
monthly installments (based upon a level payment debt service amortization over
a five year period) according to the amortization schedule attached hereto, in
arrears on the first day of each month, commencing on August 1, 1999, with the
entire remaining unpaid principal amount (together with accrued interest
thereon) to be due and payable in a single payment on the Note Maturity Date.
This Note shall bear interest on the unpaid portion of the
principal amount thereof, from the date of issuance until the unpaid portion of
the principal shall have become due and payable (whether on the Note Maturity
Date, by acceleration or otherwise), at the Note Interest Rate. To the extent
not prohibited by applicable law, this Note shall bear interest on overdue
principal, on any overdue amounts arising out of a required or optional
prepayment of principal and on any overdue installment of interest at the Note
Overdue Rate, from after the date on which such amounts were due and payable,
whether by acceleration or otherwise, until paid.
Whenever any payment to be made under or with respect to this
Note shall be stated to be due on any day other than a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of interest due on such
date.
1
This Note may be prepaid without premium or penalty, at the
option of the Maker exercised by written notice to the Holder, at any time in
whole or from time to time in part in integral multiples of $100,000. Any
prepayment will be applied first to accrued interest and then to payment of
principal. If this Note is prepaid only in part, this Note shall be surrendered
at the Company's principal office and the payment shall be recorded directly on
this Note or by an amendment thereto, whereupon the Loan Note will be returned
to the Investor promptly.
Interest on this Note shall be paid in cash. Principal of this
Note shall be paid in cash except as provided in this paragraph. In the event
that (1) the Closing Price of the Parent Common Stock on Nasdaq is $8.00 or more
for any 15 consecutive trading days during any period in which Notes are
outstanding that is not more than five Business Days preceding the date of a
written election made in accordance with this sentence, (2) the Parent closes a
public offering of equity securities of the Parent at a price of at least $5.00
per share and with gross proceeds to the Parent of at least $30 million, or (3)
the Parent closes a Qualified Offering (at a price of at least $5.00 per share,
in the case of an offering of equity securities), to the extent permitted by the
Loan and Note Purchase Agreement, principal of this Note equal to up to 50% of
the original principal amount of this Note may be paid in Parent Common Stock at
the option of the Maker if a written election to make such prepayment in Parent
Common Stock is made by the Maker (and delivered to the Holder) prior to the
date that is five Business Days after the occurrence of the event specified in
clauses (1), (2) or (3) of this sentence. For purposes of payment in Parent
Common Stock, each share of Parent Common Stock shall be valued as follows: A)
if the Market Price of Parent Common Stock is less than $6.00 as of the date of
payment, the value of each share of Parent Common Stock shall equal the Market
Price of Parent Common Stock (if the Market Price of Parent Common Stock is less
than $5.00 as of the date of payment, Parent Common Stock may not be used for
such prepayment unless the issuance of the Parent Common Stock would not require
any Stockholder Approval that has not been obtained); or (B) if the Market Price
of Parent Common Stock is greater than or equal to $6.00 as of the date of
payment, the value of each share of Parent Common Stock shall be $6.00. Payment
in the Parent Stock shall be made within 15 days after the election is made.
Until the Parent Stock is issued, all monthly cash installment payments due
under this Note shall be made in a timely manner without giving effect to any
reduction in principal.
All rights of the Company under this Note to make payments in
Parent Common Stock shall be subject to receipt by the Parent of any required
Stockholder Approval. Notwithstanding the prior sentence, to the extent it would
avoid the need for Stockholder Approval, the Company shall be entitled to
substitute, in lieu of Parent Common Stock, a preferred stock of Parent that (i)
shall be equivalent to Parent Common Stock in all economic respects, including
with respect to liquidation, dividends and other economic terms, (ii) shall be
non-voting in the event that the holder (together with all of its Affiliates) is
the beneficial owner (as
2
such term is defined under the federal securities laws and the rules and
regulations thereunder) of 19.9% or more of the Parent Common Stock but
otherwise shall vote with the Parent Common Stock as a single class and be
entitled to the same number of votes per share as the number of shares of Parent
Common Stock issuable upon conversion of such preferred stock, and (iii) shall
be convertible into Parent Common Stock, provided that the conversion right may
not be exercised without Stockholder Approval in the event that the holder
(together with all of its Affiliates) is, or following such conversion would be,
the beneficial owner of 19.9% or more of the Parent Common Stock. For purposes
of the provisions relating to use of Parent Common Stock (or, pursuant to this
paragraph, such preferred stock) to prepay the Notes, such preferred stock shall
be deemed to have the same value as the value of the Parent Common Stock into
which the preferred stock is convertible (whether or not the conversion right
may then be exercised).
This Note is secured by and shall be entitled to the benefits
of the Security Agreements. In addition, this Note is guaranteed by and shall be
entitled to the benefits of the Guaranty Agreement, which in turn is secured by
and entitled to the benefits of the Parent Security Agreement.
The occurrence of any Event of Default under and as defined in
the Loan and Note Purchase Agreement shall constitute an "Event of Default"
hereunder.
If an Event of Default exists hereunder, the Holder may
exercise any right, power or remedy which the Holder may have under the Loan and
Note Purchase Agreement if the corresponding Event of Default exists under and
as defined in the Loan and Note Purchase Agreement.
In the event the interest provisions hereof or any exactions
provided for herein or in the Loan and Note Purchase Agreement shall result in
an effective rate of interest which, for any period of time, exceeds the limit
of any usury or other law applicable to the transactions evidenced hereby, all
sums in excess of those lawfully collectible as interest for the period in
question shall, without further agreement or notice between or by any party
hereto, be applied toward repayment of outstanding principal immediately upon
receipt of such moneys by the Holder with the same force and effect as if the
Maker had specifically designated such extra sums to be so applied to principal
and the Holder had agreed to accept such extra payments in repayment of the
principal balance hereof. Notwithstanding the foregoing, however, the Holder may
at any time and from time to time elect, by notice in writing to the Maker, to
reduce or limit the collection of any interest to such sums which shall not
result in any payment of interest in excess of that lawfully collectable. The
Maker agrees that in determining whether or not any interest payable under this
Note exceeds the highest rate permitted by law, any non-principal payment shall
be deemed to the extent permitted by law to be an expense, fee, premium or
penalty, rather than interest.
3
The Maker expressly waives presentment for payment, demand,
notice of dishonor, protest, notice of protest, diligence of collection, notice
of intention to accelerate, notice of acceleration, and (except as otherwise
expressly provided herein or in the Loan and Note Purchase Agreement to the
contrary) any similar notice of any kind, and hereby consents to any number of
renewals and extensions of time of payment hereof, which renewals and extensions
shall not affect the liability of the Maker.
The Maker promises to pay all costs and expenses (including,
without limitation, attorneys' fees and disbursements) incurred in connection
with the collection thereof.
Without the prior written consent of the Maker, this Note may
not be transferred except to an Affiliate of the Holder, to Xx. Xxxxxx Xxxxxx,
to a member of Xx. Xxxxxx'x immediate family or an Affiliate of either.
Neither this Note nor any of the rights, interests or
obligations of the Maker hereunder shall be assigned in any respect without the
prior written consent of the Holder. Whenever used herein, the words "the Maker"
and "the Holder" shall be deemed to include their respective successors and
permitted assigns.
All communications required or permitted by this Note shall be
in accordance with Section 7.1 of the Loan and Note Purchase Agreement.
If any term, condition or other provision of this Note is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms, conditions and provisions of this Note shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Note so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
This Note may not be amended except by an instrument in
writing signed by the Maker and the Holder.
This Note shall be governed by and construed in accordance
with the laws of the State of Texas, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law. The Maker consents to
the jurisdiction of the federal courts whose districts encompass any part of the
State of Texas or the state courts of the State of Texas in connection with any
dispute arising under this Note and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions.
4
IN WITNESS WHEREOF, the undersigned has caused this Note to be
duly executed and delivered as of the day and year first written above.
EGLOBE FINANCING CORPORATION
By:
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Name:
-----------------------------
Title:
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IDX FINANCING CORPORATION
By:
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Name:
-----------------------------
Title:
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TELEKEY FINANCING CORPORATION
By:
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Name:
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Title:
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5
NOTES AMORTIZATION SCHEDULE
PERIOD LOAN BALANCE PAYMENT 5% INTEREST PRINCIPAL LOAN BALANCE
------ ------------ ------- ----------- --------- ------------
1 $20,000,000.00 $377,424.67 83,333.33 $294,091.34 $19,705,908.66
2 $19,705,908.66 $377,424.67 82,107.95 $295,316.72 $19,410,591.94
3 $19,410,591.94 $377,424.67 80,877.47 $296,547.21 $19,114,044.73
4 $19,114,044.73 $377,424.67 79,641.85 $297,782.82 $18,816,261.91
5 $18,816,261.91 $377,424.67 78,401.09 $299,023.58 $18,517,238.33
6 $18,517,238.33 $377,424.67 77,155.16 $300,269.51 $18,216,968.82
7 $18,216,968.82 $377,424.67 75,904.04 $301,520.64 $17,915,448.18
8 $17,915,448.18 $377,424.67 74,647.70 $302,776.97 $17,612,671.21
9 $17,612,671.21 $377,424.67 73,386.13 $304,038.54 $17,308,632.67
10 $17,308,632.67 $377,424.67 72,119.30 $305,305.37 $17,003,327.30
11 $17,003,327.30 $377,424.67 70,847.20 $306,577.48 $16,696,749.82
12 $16,696,749.82 $377,424.67 69,569.79 $307,854.88 $16,388,894.94
13 $16,388,894.94 $377,424.67 68,287.06 $309,137.61 $16,079,757.33
14 $16,079,757.33 $377,424.67 66,998.99 $310,425.68 $15,769,331.65
15 $15,769,331.65 $377,424.67 65,705.55 $311,719.12 $15,457,612.52
16 $15,457,612.52 $377,424.67 64,406.72 $313,017.95 $15,144,594.57
17 $15,144,594.57 $377,424.67 63,102.48 $314,322.20 $14,830,272.37
18 $14,830,272.37 $377,424.67 61,792.80 $315,631.87 $14,514,640.50
19 $14,514,640.50 $377,424.67 60,477.67 $316,947.00 $14,197,693.50
20 $14,197,693.50 $377,424.67 59,157.06 $318,267.62 $13,879,425.88
21 $13,879,425.88 $377,424.67 57,830.94 $319,593.73 $13,559,832.15
22 $13,559,832.15 $377,424.67 56,499.30 $320,925.37 $13,238,906.78
23 $13,238,906.78 $377,424.67 55,162.11 $322,262.56 $12,916,644.21
24 $12,916,644.21 $377,424.67 53,819.35 $323,605.32 $12,593,038.89
25 $12,593,038.89 $377,424.67 52,471.00 $324,953.68 $12,268,085.21
26 $12,268,085.21 $377,424.67 51,117.02 $326,307.65 $11,941,777.56
27 $11,941,777.56 $377,424.67 49,757.41 $327,667.27 $11,614,110.30
28 $11,614,110.30 $377,424.67 48,392.13 $329,032.55 $11,285,077.75
29 $11,285,077.75 $377,424.67 47,021.16 $330,403.52 $10,954,674.24
30 $10,954,674.24 $377,424.67 45,644.48 $331,780.20 $10,622,894.04
31 $10,622,894.04 $377,424.67 44,262.06 $333,162.61 $10,289,731.42
32 $10,289,731.42 $377,424.67 42,873.88 $334,550.79 $9,955,180.63
33 $9,955,180.63 $377,424.67 41,479.92 $335,944.75 $9,619,235.88
34 $9,619,235.88 $377,424.67 40,080.15 $337,344.52 $9,281,891.35
35 $9,281,891.35 $377,424.67 38,674.55 $338,750.13 $8,943,141.23
36 $8,943,141.23 $377,424.67 37,263.09 $340,161.58 $8,602,979.65
------------------------------------------------------------------------------------*
37 $8,602,979.65 $377,424.67 35,845.75 $341,578.92 $8,261,400.72
38 $8,261,400.72 $377,424.67 34,422.50 $343,002.17 $7,918,398.55
39 $7,918,398.55 $377,424.67 32,993.33 $344,431.35 $7,573,967.21
40 $7,573,967.21 $377,424.67 31,558.20 $345,866.48 $7,228,100.73
41 $7,228,100.73 $377,424.67 30,117.09 $347,307.59 $6,880,793.14
42 $6,880,793.14 $377,424.67 28,669.97 $348,754.70 $6,532,038.44
43 $6,532,038.44 $377,424.67 27,216.83 $350,207.85 $6,181,830.59
44 $6,181,830.59 $377,424.67 25,757.63 $351,667.05 $5,830,163.55
45 $5,830,163.55 $377,424.67 24,292.35 $353,132.32 $5,477,031.22
46 $5,477,031.22 $377,424.67 22,820.96 $354,603.71 $5,122,427.52
47 $5,122,427.52 $377,424.67 21,343.45 $356,081.22 $4,766,346.29
48 $4,766,346.29 $377,424.67 19,859.78 $357,564.90 $4,408,781.39
49 $4,408,781.39 $377,424.67 18,369.92 $359,054.75 $4,049,726.64
50 $4,049,726.64 $377,424.67 16,873.86 $360,550.81 $3,689,175.83
51 $3,689,175.83 $377,424.67 15,371.57 $362,053.11 $3,327,122.72
52 $3,327,122.72 $377,424.67 13,863.01 $363,561.66 $2,963,561.06
53 $2,963,561.06 $377,424.67 12,348.17 $365,076.50 $2,598,484.56
54 $2,598,484.56 $377,424.67 10,827.02 $366,597.65 $2,231,886.91
55 $2,231,886.91 $377,424.67 9,299.53 $368,125.14 $1,863,761.76
56 $1,863,761.76 $377,424.67 7,765.67 $369,659.00 $1,494,102.76
57 $1,494,102.76 $377,424.67 6,225.43 $371,199.24 $1,122,903.52
58 $1,122,903.52 $377,424.67 4,678.76 $372,745.91 $ 750,157.61
59 $ 750,157.61 $377,424.67 3,125.66 $374,299.02 $ 375,858.60
60 $ 375,858.60 $377,424.67 1,566.08 $375,858.60 $0.00
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*Payments 37-60 will be made in a single lump sum payment with payment 36.
6
