Document:

EXHIBIT 4

EXHIBIT

4.17

 

THIS  SECURED PROMISSORY NOTE HAS NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE

SECURITIES LAWS.  THIS NOTE MAY NOT

BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN

EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE

STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO

EPICEDGE, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

 

SECURED PROMISSORY NOTE

 

	

  $610,000

  	

   

  	

  Chicago, Illinois 

  	

   

  
	

   

  	

   

  	

  February     , 2002

  	

   

  

 

FOR VALUE RECEIVED, EpicEdge, Inc.,

a Texas corporation (the “Company”), promises to pay to the order of

Edgewater Private Equity Fund III, L.P., a Delaware limited partnership (“Holder”),

the principal sum of Six Hundred Ten Thousand Dollars ($610,000), and to pay

interest on the outstanding principal balance of this Secured Promissory Note

(this “Note”) in accordance with Section 2 of this Note.

 

1.                                       Maturity.  The Company shall repay the outstanding

principal balance of this Note and interest accrued thereon in full on February

28, 2003 (the “Maturity Date”). 

All payments received shall be applied first against costs of collection

(if any), then against accrued and unpaid interest on this Note, then against

the outstanding principal balance of this Note.

 

2.                                       Interest.  Interest shall begin to accrue on the

outstanding principal balance of this Note commencing on the date hereof and

continuing until repayment of this Note in full at the rate of ten percent

(10%) per annum calculated on the basis of a 360 day year and actual days

elapsed.  However, upon the occurrence

of a Default (as defined herein) the interest on the outstanding principal

balance of this Note will accrue from the date of such Default until such time

as such Default is cured in a manner that is acceptable to Holder at a rate per

annum equal to three percent (3%) plus

the interest rate then in effect.

 

3.                                       Prepayment.  The outstanding principal balance and all

accrued interest payable to Holder hereunder (the “Outstanding Balance”)

may not be prepaid without the consent of Holder in its sole and absolute

discretion.  All prepayments so

permitted by Holder shall be applied in the order provided in Section 1.  

 

4.                                       Collateral.  As a condition to the advance of funds under

this Note and as collateral security therefor, the Company shall have entered

into and delivered to Holder (a) that certain Security Agreement of even date

herewith (as may be amended, restated, supplemented or otherwise modified from

time to time, the “Security Agreement”), and (ii) that certain

Trademark and License Security Agreement of even date herewith (as

 

 

may be amended, restated,

supplemented or otherwise modified from time to time, the “Trademark

Agreement”; and, together with the Security Agreement and this Note, the “Loan

Documents”).  The Security Agreement

and Trademark Agreement shall grant a security interest in substantially all of

the assets of the Company (the “Collateral”).

 

5.                                       Representations

and Warranties.  Except as

set forth on Schedule 3 attached hereto, the Company represents and

warrants to Holder that:  (a) the

Company has the legal capacity, power and authority to enter into, deliver and

be bound by the Loan Documents and has duly executed and delivered the Loan

Documents; (b) the execution and delivery by the Company of the Loan

Documents and the Company’s performance of all its obligations under and the

consummation of the transactions contemplated by the Loan Documents do not

conflict with or violate any applicable law or any ruling, judgment or order of

any court or other governmental authority, and do not conflict with or result

in or constitute any breach or default under or result in the creation or

imposition of any lien, charge or encumbrance under any material agreement,

indenture or undertaking concerning the Collateral except with respect to which

appropriate waivers or consents have been obtained; (c) no approval,

consent or authorization of any governmental authority is required in

connection with the Company’s entering into or performing its obligations under

the Loan Documents; (d) the Loan Documents constitutes the legal, valid

and binding obligation of the Company, enforceable against the Company in

accordance with its terms except as may be limited by bankruptcy, insolvency,

reorganization, moratorium, fraudulent conveyance, or other similar laws

affecting enforcement of creditors’ rights generally, and by general principles

of equity; (e) there is no pending or, to the best knowledge of the

Company, threatened action, suit, inquiry, investigation, or proceeding against

the Company, before any court, governmental agency or arbitrator, which, in any

case, may (i) if adversely determined, materially and adversely affect the

financial condition of the Company, (ii) seek to restrain or otherwise

have a material adverse affect on the transactions contemplated herein, or

(iii) affect the validity or enforceability of the Loan Documents; and

(f) the proceeds of all loans under this Note will be used solely for working

capital requirements and for the payment of ordinary course trade payables and

not to further reduce the principal portion of any indebtedness or to make any

payments to any shareholders or affiliates of the Company.  Holder, in extending financial accommodations

to the Company, is expressly acting and relying upon the aforesaid

representations and warranties.

 

6.                                       Default.  The Company, without notice or demand of any

kind, shall be in default (a “Default”) hereunder upon the occurrence of

any of the following:  

 

(a)           The Company fails to pay any amounts payable to Holder

hereunder when due;

 

(b)           A material breach by the Company of any other term or

provision of the Loan Documents;

 

(c)                                  Any of the

Company’s indebtedness for borrowed money is accelerated as a result of a

default or breach of or under any agreement for such borrowed money, including,

but not limited to, loan agreements, or a material breach under any real 

 

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property lease agreements or

capital equipment lease agreements, by which the Company is bound or obligated;

 

(d)                                 The filing of a

petition in bankruptcy or under any similar insolvency law by the Company, the

making of an assignment for the benefit of creditors by the Company, or if any

voluntary petition in bankruptcy or under any similar insolvency law is filed

against the Company and such petition is not dismissed within sixty (60) days

after the filing thereof; and

 

(e)                                  The

transactions contemplated by that certain Memorandum of Terms dated as of

February 6, 2002, by and among the Company, Holder and certain other parties

named therein, have not be consummated on or before March 31, 2002.

 

Except for a Default pursuant to Sections 6(a), 6(d)

or 6(e), upon each such Default, the Company shall have five (5) days to

cure such Default after the Company becomes aware of the occurrence

thereof.  If the Default is pursuant to Sections 6(a),

6(d) or 6(e) or if the Company is unable to cure its default

under Sections 6(b) or 6(c) within such five (5) day period,

Holder may, at its option, accelerate repayment of the Outstanding Balance

under this Note, in which case such Outstanding Balance shall be due and

payable immediately.  Upon any Default

of the Company hereunder, Holder may pursue any legal or equitable remedies

that are available to Holder.

 

7.             Miscellaneous.

 

(a)                                  The Company

hereby waives presentment, demand, protest, notice of dishonor, diligence and

all other notices, any release or discharge arising from any extension of time,

discharge of a prior party, or other cause of release or discharge other than

actual payment in full hereof.

 

(b)                                 Holder shall

not be deemed, by any act or omission, to have waived any of its rights or

remedies hereunder unless such waiver is in writing and signed by Holder and

then only to the extent specifically set forth in such writing.  A waiver with reference to one event shall

not be construed as continuing or as a bar to or waiver of any right or remedy

as to a subsequent event.  No delay or

omission of Holder to exercise any right, whether before or after a Default

hereunder, shall impair any such right or shall be construed to be a waiver of

any right or Default, and the acceptance at any time by Holder of any past-due

amount shall not be deemed to be a waiver of the right to require prompt

payment when due of any other amounts then or thereafter due and payable.

 

(c)                                  Time is of the

essence hereof.  Upon any Default

hereunder, Holder may exercise all rights and remedies provided for herein or

in the other Loan Documents and by law or equity, including, but not limited

to, the right to immediate payment in full of this Note.

 

(d)                                 The remedies of

Holder as provided herein or in the other Loan Documents, or any one or more of

them, in law or at equity, shall be cumulative and concurrent,

 

3

 

and may be pursued

singularly, successively or together at Holder’s sole discretion, and may be

exercised as often as occasion therefor shall occur.

 

(e)                                  It is expressly

agreed that if this Note is referred to any attorney or if suit is brought to

collect or interpret this Note or any part hereof or to enforce or protect any

rights conferred upon Holder by this Note or any of the other Loan Documents,

then the Company covenants and agrees to pay all reasonable costs, including

attorneys’ fees, incurred by Holder in connection therewith.

 

(f)                                    If any

provisions of this Note would require the Company to pay interest hereon at a

rate exceeding the highest rate allowed by applicable law, the Company shall

instead pay interest under this Note at the highest rate permitted by

applicable law.

 

(g)                                 This Note shall

be governed by and construed in accordance with the laws of the State of

Illinois without giving effect to any choice or conflict of law provision or

law that would cause the application of the laws of any other jurisdiction

other than the State of Illinois.

 

(h)                                 Any and all

notices or other communications required or permitted to be delivered hereunder

shall be deemed properly delivered if (i) delivered personally,

(ii) mailed by first class, registered or certified mail, return receipt

requested, postage prepaid, (iii) sent by next-day or overnight mail or

delivery or (iv) sent by telecopy or telegram, to the parties as set forth

below:

 

	

  If to

  Holder:  

  	

   

  	

  If to the

  Company:  

  
	

   

  	

   

  	

   

  
	

  Edgewater Private Equity Fund III, L.P.

  900 North Michigan Avenue 

  14th Floor 

  Chicago, Illinois  60611 

  Attn:  Ryan Satterfield 

  Telecopy:  (312) 649-8649

  	

   

  	

  EpicEdge, Inc. 

  5508 Hwy. 290 West 

  Suite 300 

  Austin, Texas 78735 

  Attn:  Richard Carter, President 

  Telecopy:  (     )             

  
	

   

  	

   

  	

   

  
	

  With a copy

  to:  

  	

   

  	

  With a copy

  to:  

  
	

   

  	

   

  	

   

  
	

  Michael A. Nemeroff, Esq. 

  Vedder, Price, Kaufman & Kammholz 

  222 North LaSalle Street, Suite 2600 

  Chicago, Illinois  60601-1003 

  Telecopy:  (312) 609-5005

  	

   

  	

  Paul E. Hurdlow,  Esq. 

  Gray Cary Ware & Freidenrich, LLP 

  1221 S. Mopac Expressway, Suite 400 

  Austin, Texas 78746 

  Telecopy:  (512) 457-7001

  

 

Any party may change the name and address of the designee to whom

notice shall be sent by giving written notice of such change to the other

party.

 

4

 

(i)                                     The Company

shall on the date hereof or upon demand by Holder, reimburse costs and expenses

to Holder for past and current reasonable fees and expenses including, without

limitation, legal fees and expenses, incurred in connection with all current

and past financings by Holder to the Company.

 

IN WITNESS WHEREOF, the Company has executed this Secured Promissory

Note as of the date first above written.

 

	

   

  	

  EPICEDGE, INC., a

  Texas corporation

  
	

   

  	

   

  
	

   

  	

  By: 

  	

   

  
	

   

  	

   

  	

  Name: 

  	

   

  
	

   

  	

   

  	

  Title:

  	

   

  

 

5Edgewater/Epic - Feb 2002 Bridge Loan Subordination Agreement

EXHIBIT 4.18

 

SUBORDINATION AGREEMENT

 

THIS SUBORDINATION AGREEMENT

(this “Agreement”), dated as of February    

, 2002, is between EDGEWATER PRIVATE EQUITY FUND III, L.P., a

Delaware limited partnership (“Lender”), and MRA SYSTEMS, INC., a Colorado

corporation d/b/a GE ACCESS (“Creditor”).

 

WHEREAS, EpicEdge, Inc., a

Texas corporation (“Borrower”), is currently indebted to Creditor under certain

agreements, instruments and documents, (together with any amendments thereto or

replacements or substitutions thereof, now or hereafter evidencing or securing

the Creditor Indebtedness (as defined below) the “Creditor Documents”) which

indebtedness is secured by a security interest in and a lien on all of

Borrower’s assets;

 

WHEREAS, Lender has agreed

to loan Borrower an aggregate principal amount of Six Hundred Ten Thousand

Dollars ($610,000) (“Lender’s Indebtedness”) pursuant to a Secured Promissory

Note of even date herewith, made by Borrower in favor of Lender (the “Note”;

and together with such other agreements, instruments and documents, including

any amendments thereto or replacements or substitutions thereof, evidencing or

securing all or any part of Lender’s Indebtedness, the “Lender’s Documents”);

 

WHEREAS, the Lender’s

Indebtedness is and will be secured in its entirety by a security interest in

and lien on all of Borrower’s assets; and

 

WHEREAS, Lender has agreed

that any security interest hereafter acquired by Lender in or on Borrower’s

assets shall be and remain, in all respects, subordinate to any security

interest in or lien on Borrower’s assets in favor of Creditor.

 

NOW, THEREFORE, in

consideration of the premises and covenants contained herein and for other good

and valuable consideration, the receipt and sufficiency of which is hereby

acknowledged, the undersigned do hereby agree as follows:

 

1.             Lender hereby subordinates the Lender’s Indebtedness to

any and all sums, debts, demands, claims, liabilities or causes of action for

which Borrower may be liable to Creditor pursuant to the Creditor Documents

and/or pursuant to any note, security agreement, guaranty or other instrument

or document executed pursuant thereto or in connection therewith (the “Creditor

Indebtedness”).

 

2.             Lender hereby subordinates all security interests, liens

on, and encumbrances which in any way secure the Lender’s Indebtedness (the

“Lender’s Collateral”) to all security interests, liens on, and encumbrances

which in any way secure the payment of the Creditor Indebtedness (the “Creditor

Collateral”).

 

3.             This Agreement shall continue in full force and effect

until the full payment of the entire Creditor Indebtedness.

 

 

4.             All notices, payments, requests, reports, information

and demands which any party may desire or may be required to give or make to

any other party shall be given or made upon such party by and hand delivery or

by the deposit in the United States Mail, postage prepaid, Certified or

Registered addressed as follows:

 

	

  TO CREDITOR:

  	

  MRA SYSTEMS, INC., d/b/a

  GE ACCESS

  
	

   

  	

  1426 Pearl Street

  
	

   

  	

  Boulder, Colorado  80302

  
	

   

  	

  Attn:  

  	

   

  	

   

  
	

   

  	

   

  
	

  TO LENDER:

  	

  EDGEWATER PRIVATE EQUITY

  FUND III, L.P.

  
	

   

  	

  900 North Michigan Avenue

  
	

   

  	

  Chicago, Illinois  60611

  
	

   

  	

  Attn:  Ryan Satterfield

  

 

Said notice shall be deemed given when

delivered or mailed  as aforesaid.

 

5.             This Agreement shall be binding upon the successors and

assigns of the Lender, Borrower and Creditor.

 

[Signature

Page Follows]

 

2

 

IN WITNESS WHEREOF, the

undersigned have caused this Agreement to be duly executed as of the day and year

first above written.

 

	

   

  	

  CREDITOR:

  
	

   

  	

   

  
	

   

  	

  MRA SYSTEMS, INC., d/b/a GE Access

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Its:

  	

   

  
	

   

  	

   

  
	

   

  	

  LENDER:

  
	

   

  	

   

  
	

   

  	

  EDGEWATER PRIVATE EQUITY FUND III, L.P.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Its:

  	

   

  
								

 

3

 

 

ACCEPTANCE OF BORROWER

 

EpicEdge, Inc., a Texas

corporation, hereby accepts and consents to the foregoing Agreement and agrees

to be bound by all of the provisions thereof and to recognize all priorities

and rights granted thereby to MRA SYSTEMS, INC., d/b/a GE ACCESS, and its

successors and assigns and to perform in accordance therewith.

 

	

   

  	

  Borrower:

  
	

   

  	

   

  
	

   

  	

  EPICEDGE, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Its:

  	

   

  
	

   

  	

   

  	

   

  
	

  Dated:

  	

   

  	

  , 2002

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