Document:

Prepared by MERRILL CORPORATION

EX-10.1

 

ADVICE OF BORROWING TERMS

 

	

  Relationship Office:

  	

  South Yorkshire

  Corporate Business Centre

  	

  Date:

  	

  28 September 2001

  

 

	

  Borrower(s)

  CJVander

  Limited

  International Silver Company Limited

  	

   

  	

   

  	

  Registered

  Number

  763852

  03768277

  

 

We intend that the facilities

listed in Part 1 of the attached Facility Schedule (the "on-demand

facilities") should remain available to the borrower(s) until 30 April

2002 and all facilities should be reviewed on or before that date.  The facilities are, however, subject to the

following:-

 

•          the

terms and conditions below,

•          the

specific conditions applicable to an individual facility as detailed in the

Facility Schedule,

•          the

Security detailed in the attached Security Schedule, and

•          the

attached General Terms.

 

All

amounts outstanding are repayable on demand which may be made by us at our

discretion at any time and the facilities may be withdrawn, reduced, made

subject to further conditions or otherwise varied by us giving notice in

writing.

 

Conditions:

The following conditions must be satisfied at

all times while the facilities are outstanding, but this will not affect our

right to demand repayment at any time:

 

•          A

signed copy of this Advice of Borrowing Terms to be returned to us.

 

•          Audited accounts to be provided to us

within 180 days of the financial year end to which they relate.

 

•          Monthly management accounts to be

provided to us within 21 days of the end of the month to which they relate; to

include Profit & Loss, Balance Sheet and Aged Debtor/Creditor listings with

suitable commentary/explanations re any divergence from budget.

 

•          Facilities remain available subject to

our agreed lending formula calculated on the following basis:

 

            [Debtors < 3 months + Stock x 40%] to cover utilized facilities in a

ratio of minimum 2:1

 

•        Given the current trading

of C J Vander Ltd and insolvent balance sheet footings (ie treating the

parental suppost as a long term liability), we will continue to extend existing

levels of support on the basis of the clear integrity of the parent undertaking.

 

Interest Set Off:

Cleared debit and cleared

credit balances in the same currency on non-interest bearing curent accounts

and loan accounts repayable on demand specified below (the "Interest Set

Off Accounts") will be used to calculate, on a daily basis, the net

cleared debit balance of the Interest Set Off Accounts.  The Interest Set Off Accounts, which we have

agreed are to be set off for interest calculation purposes, are detailed in the

attached Facility Schedule which also specifies the frequency at which interest

will be payable and the rate or rates at which it will be charged on the net

cleared debit balance.

 

Cleared debit balances which

are set off on a daily basis by cleared credit balances on the Interest Set Off

Accounts will incur interest at the Set Off Rate specified in the attached

Facility Schedule.

 

	

  /s/  A Tyas

  
	

  Corporate

  Manager

  
	

  For and on

  behalf of

  
	

  National

  Westminster Bank Plc

  

 

Acceptance:

•           To

signify your agreement to the terms and conditions outlined above please sign

and return the enclosed copy of this Advice of Borrowing Terms within 28 days.Prepared by MERRILL CORPORATION

AMENDED AND RESTATED

CONVERTIBLE

PROMISSORY NOTE

 

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933 (THE “ACT”) OR ANY STATE SECURITIES LAWS. IT MAY NOT BE

SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT

AS TO THIS NOTE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE

AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND ANY APPLICABLE

STATE SECURITIES LAWS.

 

	

  AMOUNT: $3,300,000

  	

   

  	

  DATE: August 31, 2001

  

 

This AMENDED AND

RESTATED CONVERTIBLE PROMISSORY NOTE (the

“Note”) is made and entered into as of the 31st day of August, 2001,

by and among NETWORK COMPUTING DEVICES, INC., a Delaware corporation (the

"Company" or the “Maker”) and SCI TECHNOLOGY, INC., an Alabama

corporation (“SCI” or “Holder”).

 

WHEREAS, SCI is the

holder of a certain Convertible Promissory Note made by the Company dated

August 31, 2000 in the principal sum of Three Million Three Hundred Thousand US

Dollars ($3,300,000), with interest computed at an annual rate of six and

one-half percent (6.5%) and payable on September 30, 2001. The parties desire

to extend the Note for an additional period of one year with interest computed

at an annual rate of eight percent (8%).

 

NOW, FOR VALUE RECEIVED, the undersigned, NETWORK

COMPUTING DEVICES, INC., a Delaware corporation (hereinafter

referred to as the “Company” or the “Maker”) unconditionally promises to pay to

the order of SCI TECHNOLOGY, INC., an Alabama corporation (“Holder”), at

such place as may be designated by Holder, the PRINCIPAL SUM of Three

Million Three Hundred Thousand US Dollars ($3,300,000), or so much of such sum

as may be due and owing at the time of maturity, together with interest from

August 31, 2000 to September 30, 2001 on the unpaid balance hereunder, computed

at an annual rate of six and one-half percent (6.5%) and from October 1, 2001

on the unpaid balance hereunder, computed at an annual rate of  eight percent (8%). Interest shall be due

based on a 360 day year and the actual number of days elapsed (subject to

adjustment pursuant to Section 2). The indebtedness evidenced hereby shall be

due and payable as provided for in the terms and conditions set forth below:

 

1.             Maker. The

term “Maker” as used in this Note shall include the Maker and the respective

successors and assigns thereto or thereof; provided, however, that neither this

Note nor the obligations of Maker hereunder can be assigned without the prior

written consent of Holder, such consent to be given or withheld in Holder’s

sole discretion.

 

2.             Interest. During the existence of any Event of

Default (as defined in Section 13) under this Note, the unpaid principal of

this Note shall bear interest on each day until paid at a per annum rate of the

WSJ Prime Rate plus 2%, but only to the extent that payment of such

interest on such principal or interest is enforceable under applicable law. The

“WSJ Prime Rate” is the highest “Prime Rate” as published daily in The Wall

Street Journal under the heading “Money Rates.” The WSJ Prime Rate in

effect at any time will change each time and as of the date that a new Prime

Rate is published. In the event the WSJ Prime Rate is discontinued, Holder

shall substitute an index determined by the Holder to be comparable, in its

reasonable discretion.

 

3.             Payment;

Maturity Date. Unless converted as provided herein, the principal and

accrued interest under this Note shall be due and payable in full on September

29, 2002 (the “Maturity Date”). Principal and interest shall be payable to

Holder when due in lawful money of the United States of America in immediately

available funds at such place as Holder may from time to time notify the Maker

in writing. The Maker may not prepay this Note, in whole or in part, at any

time without the prior written consent of the Holder, such consent to be given

or withheld in its sole discretion.

 

4.             Use of Proceeds. This Note evidences the accounts

payable of Maker, due and owing to Holder at the date hereof as set forth on Exhibit

“A” attached hereto.

 

5.             Application of Payments. All payments received

hereunder may be applied, at Holder’s option, first to the payment of any

expenses or charges payable hereunder and accrued interest, with the balance

being applied to principal, or in such other order as Holder shall determine.

 

6.             Conversion.

 

(a)           Optional Conversion. Subject to and in compliance

with the provisions of this Section 6, the entire outstanding principal

amount of this Note, may, at the option of Holder, by notice given to the Maker

(a “Conversion

Notice”) at any time commencing on the date hereof and ending sixty

days after the Maturity Date (the “Conversion Period”), be converted into the

number of validly issued, fully-paid and nonassessable shares of common stock,

par value $.001 per share, of the Company (the “Stock”) equal to (i) the

outstanding principal amount of the Note divided by (ii) $.62 (the “Conversion

Price”). Shares of Stock issued upon conversion of this Note or of

any note issued in exchange for or upon the transfer of this Note are referred

to herein as “Conversion Shares.”

 

(b)           Mechanics of Conversion. If the Holder exercises

its right to convert this Note, the entire principal balance shall

automatically convert into Conversion Shares at the date of the Conversion

Notice (“Conversion

Date”). As promptly as practicable after the Conversion Date, but in

no event later than within 5 days after the Company’s receipt of the Conversion

Notice, the Maker shall issue and shall cause its transfer agent to issue and

deliver to the Holder a certificate or certificates for the number of whole

shares of Stock issuable upon the conversion of this Note in the name of the

Holder hereof. The conversion shall be deemed to have been effected immediately

prior to the close of business on the Conversion Date, and at such time the

rights of the Holder as holder of this Note as to the principal balance so

converted shall cease, and the Holder shall be deemed to have become the holder

of record of the shares of Stock so issued.

 

(c)           Adjustment for Reorganization. Consolidation. Merger.

etc. In case at any time or from time to time, the Maker shall effect a

reorganization, consolidate with or merge into 

any other person, or transfer all or substantially all of its properties

or assets to any other person under any plan or arrangement contemplating the

dissolution of the Maker, then, in each such case, Holder, on the conversion

hereof as provided in this Section 6 at any time after the consummation of such

reorganization, consolidation or merger or the effective date of such

dissolution, as the case may be, shall receive, in lieu of the Stock issuable

on such exercise prior to such consummation or such effective date, the stock

and other securities and property (including cash) to which Holder would have

been entitled upon such consummation or in connection with such dissolution, as

the case may be, if Holder had so converted this Note, immediately prior

thereto.

 

(i)            Dissolution.

In the event of any dissolution of the Maker following the transfer of all or

substantially all of its properties or assets, the Maker, if this Note has not

been paid in full prior to such dissolution and if this Note is thereafter

converted, shall at its expense deliver or cause to be delivered the stock and

other securities and property (including cash) receivable by the holder of this

Note after the effective date of such dissolution.

 

 (ii)  Continuation of

Terms. Upon any reorganization, consolidation, merger or transfer (and any

dissolution following any transfer) referred to in this Section 6, this Note

shall continue in full force and effect and the terms hereof shall be

applicable to the shares of stock and other securities and property receivable

on the conversion of this Note after the consummation of such reorganization,

consolidation or merger or the effective date of dissolution following any such

transfer, as the case may be, and shall be binding upon the issuer of any such

stock or other securities, including, in the case of any such transfer, the

person acquiring all or substantially all of the properties or assets of the

Maker, whether or not such person shall have expressly assumed the terms of

this Note.

 

(d)           No

Fractional Shares. No fractional shares of Stock or scrip representing

fractional shares shall be issued upon the conversion of this Note. Instead of

any fractional shares of Stock which would otherwise be issuable upon

conversion of this Note, the Maker shall pay to the holder of this Note an

appropriate cash adjustment in respect of any fractional shares.

 

(e)           Reservation

of Stock. The Maker shall at all times reserve and keep available out of

its authorized but unissued shares of Stock, solely for the purpose of

effecting the conversion of this Note, such number of its shares of Stock as

shall from time to time be sufficient to effect the conversion of this Note,

and if at any time the number of authorized but unissued shares of Stock shall

not be sufficient to effect the conversion of this Note, the Maker shall take

such corporate action as may be necessary to increase its authorized but

unissued shares of Stock to such number of shares as shall be sufficient for

such purpose.

 

(f)            Transfer

Restriction: Legend. Each share certificate evidencing the shares of Stock

issued as Conversion Shares may bear the following legend (and any additional

legend required by (i) any applicable state securities laws and (ii) any

securities exchange upon which such shares may, at the time of such exercise,

be listed) on the face thereof unless at the time of exercise such shares shall

be registered under the Securities Act (as defined in Section 9):

 

“The shares represented

by this certificate have not been registered under the Securities Act of 1933,

as amended, or any state securities laws, and may not be sold or transferred in

the absence of such registration or any exemption therefrom under said Act and

state securities laws.”

 

Any certificate issued at any time in exchange or substitution for any

certificate bearing such legend (except a new certificate issued under a

registration statement of the securities represented thereby) shall also bear

such legend unless the Company receives an opinion of counsel for the holder

thereof to the effect that the securities represented thereby are not, at such

time, required by law to bear such legend.

 

(g)           Adjustment

Upon Changes In Stock. The Conversion Price and the number of shares of

Stock issuable hereunder are subject to adjustment from time to time as

follows:

 

(i)            Stock

Issuance. Stock Dividend. Stock Split or Subdivision of Shares. If the

number of shares of Stock outstanding at any time after the date hereof is

increased by the issuance of Stock, or securities convertible into stock, for a

consideration per share of Stock of less than $.62 per share (other than (A)

shares of the Company’s Series B Preferred Stock outstanding on the date

hereof, (B) up to 530,000 shares of the Company’s Series C Preferred Stock, (C)

up to 1,200,000 shares of Stock issuable upon exercise of warrants issued to

the purchasers of Series C Preferred Stock, or (E) shares of Stock issuable upon

conversion or exercise of any convertible securities, options or warrants that

are outstanding on the date hereof), or as a result of a stock dividend payable

in shares of Stock, or by a subdivision or split-up of shares of Stock, then,

upon issuance of such Stock or other securities convertible into Stock or

following the record date fixed for the determination of holders of Stock

entitled to receive such stock dividend, subdivision or split-up, as the case

may be, the Conversion Price shall be appropriately decreased and the number of

shares of Stock issuable upon conversion of this Note shall be appropriately

increased in proportion to such increase in outstanding shares. No adjustment

shall be made as a result of the issuance of shares of Stock pursuant to

existing stock plans of the Company in an amount up to the maximum number of

shares of Stock approved for issuance under such plans at the date hereof.

 

(ii)           Combination

of Shares. If, at any time after the date hereof, the number of shares of

Stock outstanding is decreased by a combination of the outstanding shares of

Stock, then, following the record date for such combination, the Conversion

Price shall be appropriately increased and the number of shares of Stock

issuable upon conversion of this Note shall be appropriately decreased in

proportion to such decrease in outstanding shares.

 

7.             The Company's Representations.

The Company represents and warrants to the Holder that:

 

(a)           the

Company is a corporation duly organized, validly existing and in good standing

under the laws of the State of Delaware and is duly qualified to do business

and is in good standing in each other jurisdiction where the conduct of its

business or the ownership of its 

properties require such qualification and where failure to be so

qualified would have a material adverse effect on the Company. The Company has

full corporate power and authority and is entitled to own or lease its

properties and carry on its business as and in all places where such business

is conducted and such properties are owned or leased;

 

(b)           as

of the date hereof and before giving effect to this Note, the Company's total

authorized Stock and total issued and outstanding shares of Stock are as set

forth in Exhibit B. Except as set forth in Exhibit B, there are

no options, warrants or rights to acquire shares or other securities of the

Company authorized, issued or outstanding, nor is the Company obligated in any

other manner to issue shares or other securities. All shares and other

securities of the Company presently issued and outstanding are duly authorized,

validly issued, fully paid and nonassessable and were authorized, offered,

issued and sold without violating the terms of any applicable preemptive or

similar statutory or contractual rights to which the Company is a party or that

is otherwise binding upon the Company. Neither the execution and delivery of

this Note nor conversion and issuance of the Conversion Shares, if and when

issued, does or will violate the terms of any applicable preemptive or similar

statutory or contractual rights to which the Company is party or that is

otherwise binding upon the Company. Except as set forth in the  Company's certificate of incorporation, as

amended, and bylaws, as amended, there are no restrictions on the transfer of

shares of stock or other securities of the Company other than those imposed by

relevant federal and state securities laws or Nasdaq stock market rules;

 

(c)           the

Company has the full corporate power and authority to execute, deliver and

perform this Note (and to borrow hereunder), and that certain Amended and

Restated Registration Rights Agreement (the "Registration Rights Agreement")

dated August 29, 2001. The Company has taken all necessary and appropriate

corporate action to authorize the execution, delivery and performance of this

Note and the Registration Rights Agreement, each of which has been duly and

validly executed and delivered by the Company and constitute the valid and

legally binding obligations of the Company, enforceable in accordance with

their respective terms, except as the same may be limited by bankruptcy,

insolvency, reorganization or similar laws affecting the rights of creditors

generally and by general equitable principles;

 

(d)           the

execution, delivery and performance by the Company of this Note and the

Registration Rights Agreement do not and will not violate any provision of any

applicable law, rule, regulation, order, writ, judgment, injunction, decree,

determination or award presently in effect and known to the Company, or result

in a breach of or constitute a default under any indenture or loan or credit

agreement or any other material agreement, lease or instrument to which the

Company is a party or by which its properties may be bound or affected (each

such indenture, agreement, lease or instrument, a "Material Agreement");

 

(e)           there

is no fact peculiar to the Company which materially adversely affects (or is

reasonably likely to materially adversely affect) the business, property or

assets, or financial condition of the Company which has not been disclosed to

Holder in writing by or on behalf of the Company prior to the date hereof in

connection with the transactions contemplated hereby or by the Registration

Rights Agreement;

 

(f)            there are no legal proceedings pending

or to the Company's knowledge threatened, against, by or affecting the Company

before any court or administrative agency which, if adversely determined, could

materially adversely affect (or is reasonably likely to materially adversely

affect) the business, assets, liabilities, financial condition or results of

operations of the Company, the rights or remedies of Holder under, or the

legality, validity or enforceability of, this Note and the Registration Rights

Agreement;

 

(g)           the

Company has taken all necessary action, if any, in order to render inapplicable

any control share acquisition, business combination or other similar

anti-takeover provision under the certificate of incorporation or bylaws of the

Company which is or could become applicable to the Holder or the issuance of

this Note or the Conversion Shares. None of the transactions contemplated by

this Note or the Registration Rights Agreement, including the conversion of the

Note into shares of Stock, will trigger any poison pill provisions of any of

the Company's stockholders' rights or similar agreements;

 

(h)           the

Company has delivered to the Holder copies of its audited financial statements

as of December 31, 2000 and its unaudited financial statements as of June 30,

2001 included in its most current Form 10-K and Form 10-Q, respectively. (the

"Financial Statements"). The Financial Statements are true, complete

and correct and have been prepared in accordance with generally accepted

accounting principles, consistently applied; and

 

(i)            the

Company is not engaged principally, or as one of its important activities, in

the business of purchasing or carrying any "margin stock", as that

term is defined in Section 221.2(h) of Regulation U of the Board of Governors

of the Federal Reserve System, and no part of the indebtedness evidenced by

this Note will be or has been used to purchase or carry any such margin stock

or to extend credit to others for the purpose of purchasing or carrying any

such margin stock, or be used for any purpose which violates, or which is

inconsistent with, the provisions of Regulation X of said Board of Governors.

 

8.             Covenants.

For so long as any present or future debts, liabilities and obligations of the

Company owing to the Holder (including its successors and assigns) arising

under or in connection with this Note (collectively, "Obligations")

remain outstanding, which Obligations are binding on all of the Company's

successors and assigns, the Company covenants and agrees that:

 

(a)           the

Company shall not (i) liquidate, wind-up or dissolve itself (or suffer any

liquidation or dissolution); or (ii) convey, sell, transfer or otherwise

encumber or dispose of in one transaction or a series of transactions, all or

substantially all of its business or assets;

 

(b)           the

Company shall not permit to exist or enter into any transaction (including the

purchase, sale, lease or exchange of any property or the rendering of any

service) with any affiliate of the Company or with any director, officer or

employee of the Company, (i) except for salaries and other remuneration paid to

employees in the ordinary course of business at levels consistent with past

practices (subject to annual increases in compensation consistent with past

practices); (ii) reimbursement of reasonable bona fide business expenses

incurred in the conduct of the Company's business in the ordinary course

consistent with its past practices; or (iii) as approved by the Board of

Directors of the Company by vote of disinterested directors;

 

(c)           as long as Holder holds this Note or

owns the Conversion Shares, the Company will cause the Stock to continue at all

times to be registered under Section 12 of the Securities and Exchange Act of

1934 ("Exchange Act") or subject to Section 15(d) of the Exchange

Act, will timely file (or obtain extensions in respect thereof and file within

the applicable grace period) all reports required to be filed by the Company

after the date hereof pursuant to Section 13, 14 or 15(d) of the Exchange Act

and will not take any action or file any document (whether or not permitted by

the Exchange Act or the rules thereunder) to terminate or suspend such

reporting and filing obligations. As long as Holder holds this Note or owns the

Conversion Shares, if the Company is not required to file reports pursuant to Section

13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holder

and make publicly available in accordance with Rule 144(c) promulgated under

the Securities Act annual and quarterly financial statements, together with a

discussion and analysis of such financial statements in form and substance

substantially similar to those that would otherwise be required to be included

in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as

any other information required thereby, in the time period that such filings

would have been required to have been made under the Exchange Act. The Company

further covenants that it will take such further action as the Holder may

reasonably request, all to the extent required from time to time to enable the

Holder to sell the Conversion Shares without registration under the Securities

Act within the limitation of the exemptions provided by Rule 144 promulgated

under the Securities Act. Upon the request of Holder, the Company shall deliver

to Holder a written certification of a duly authorized officer as to whether it

has complied with such requirements.

 

(d)           the Company shall not sell, offer for

sale or solicit offers to buy or otherwise negotiate in respect of any security

(as defined in Section 2 of the Securities Act) that would be integrated with

the issuance of this Note or the Conversion Shares in a manner that would

require the registration under the Securities Act of the issuance of this Note

to Holder or the sale of the Conversion Shares to Holder, or to issue

securities in such circumstances that is likely to result in such offering

being integrated with the issuance of this Note to Holder or the sale of the

Conversion Shares in such manner that stockholder approval would be required

pursuant to any stockholder approval provision applicable to the Company or its

securities.

 

(e)           (1)           the Company shall (i) not later than

twenty (20) business days after the date hereof, prepare and file with Nasdaq

(as well as any other national securities exchange or market on which the Stock

is then listed) additional shares listing applications or letters acceptable to

Nasdaq covering and listing a number of shares of Stock which is at least equal

to 100% the maximum number of Conversion Shares then issuable, assuming that

the payment of all future dividends on such shares then outstanding were made

in shares of Stock, (ii) take all steps necessary to cause the Conversion

Shares to be approved for listing on Nasdaq (as well as on any other national

securities exchange or market on which the Stock is then listed) as soon as

possible thereafter, (iii) maintain, so long as any other shares of Stock shall

be so listed, such listing of all Conversion Shares, and (iv) provide to Holder

evidence of such listing. The Company shall promptly provide to Holder copies

of any notices it receives from Nasdaq regarding the continued eligibility of

the Stock for listing on such automated quotation system. The Company shall pay

all fees and expenses in connection with satisfying its obligations under this

subsection (e)(l).

 

(2)           the Company at all times shall

reserve a sufficient number of shares of its authorized but unissued Stock to

provide for the full conversion of this Note into  Stock. If at any time the number of shares of Stock authorized

and reserved for issuance is insufficient to cover 100% of the number of

Conversion Shares issuable upon conversion of this Note (based on the

Conversion Price in effect from time to time) without regard to any limitation

on conversions or exercises, the Company will promptly take all corporate

action necessary to authorize and reserve 100% of such required shares of

Stock, including, without limitation, calling a special meeting of stockholders

to authorize additional shares to meet the Company's obligations under this

subsection (e)(2), in the case of an insufficient number of authorized shares,

and using best efforts to obtain stockholder approval of an increase in such

authorized number of shares.

 

9.             Holder's

Representations. By its acceptance of this Note, the Holder hereby

acknowledges and represents and warrants to the Maker that:

 

(a)           Holder

is experienced in evaluating and investing in companies such as the Company,

and is an "accredited investor" (as such term is defined in Section

2(15) of the Securities Act of 1933 (the "Securities Act");

 

(b)           Holder

is acquiring the Note for investment for Holder's own account and not with a

view to, or for resale in connection with, any distribution thereof. Holder

understands that the Note has not been registered under the Securities Act by

reason of an exemption from the registration provisions of the Securities Act

which depends upon, among other things, the bona fide nature of Holder's

investment intent; and

 

(c)           The

Note must be held indefinitely unless it is subsequently registered under the

Securities Act or an exemption from such registration is available.

 

10.           Financial

Information. The Maker will from time to time deliver to the Holder such

information respecting the condition or operations, financial or otherwise, or

property of the Maker and its subsidiaries as the Holder may reasonably

request, including, without limitation all public filings made with the

Securities and Exchange Commission.

 

11.           Expenses.

Maker herewith agrees to pay, on demand, all costs and expenses of collection

of this Note or of any endorsement or guaranty hereof and/or the enforcement of

Holder's rights with respect to this Note, including, without limitation,

reasonable attorneys fees actually incurred by Holder if this Note is collected

by an attorney-at-law.

 

12.           Holder.

The term "Holder" as used in this Note shall include Holder's

successors, endorsees and assigns.

 

13.

          Events of Default.

 

(a)           The

occurrence of any one or more of the following events will constitute a default

by the Maker hereunder (each, an "Event of Default"): (i) the Maker

fails to pay when due any amount payable under this Note and Holder does not

deliver a Conversion Notice within the Conversion Period; (ii) Maker fails to

perform or breaches a covenant or agreement in this Note or in the Registration

Rights Agreement , or the Maker takes or omits to take any action that if taken

or not taken by the Maker would constitute a breach of any such covenant or

agreement and Maker fails to cure such breach or omission within thirty days

after written notice from Holder; (iii) any statement, representation, or

warranty made by the Maker or on its behalf in connection with this Note or in

the Registration Rights Agreement proves to have been untrue, incorrect,

misleading or incomplete in any material respect as of the date made; (iv) the

Maker is in default under any other agreement with the Holder (or any of its

affiliates) or under any other instrument executed by the Maker in favor of the

Holder (or any of its affiliates); (v) the Maker shall fail to pay when due any

other indebtedness for borrowed money owed by it to any person in an amount in

excess of $1,000,000 and such default shall continue beyond any applicable

grace period and is not otherwise waived by such person; (vi) the Maker becomes

insolvent as defined in the Uniform Commercial Code or any similar law in its

jurisdiction of incorporation or makes an assignment for the benefit of

creditors, or an action is brought by the Maker seeking its dissolution or

liquidation of its assets or seeking the appointment of a trustee, interim

trustee, receiver or other custodian for any of its property, or the Maker

commences a voluntary case under the U.S. Federal Bankruptcy Code or any similar

law in any relevant jurisdiction, or a reorganization or arrangement proceeding

is instituted by the Maker for the settlement, readjustment, composition or

extension of any of its debts upon any terms, or an action or petition is

otherwise brought by the Maker seeking similar relief or alleging that it is

insolvent or unable to pay its debts as they mature; (vii) an action is brought

against the Maker seeking its dissolution or liquidation of any of its assets

or seeking the appointment of a trustee, interim trustee, receiver or other

custodian for any of its property, and such action is consented to or

acquiesced in by the Maker or is not dismissed within sixty (60) days of the

date upon which it was instituted, or a proceeding under the U.S. Federal Bankruptcy

Code or any similar law in any relevant jurisdiction is instituted against the

Maker and an order for relief is entered in such proceeding or such proceeding

is consented to or acquiesced in by it or is not dismissed within sixty (60)

days of the date upon which it was instituted, or a reorganization or

arrangement proceeding is instituted against the Maker for the settlement,

readjustment, composition or extension of any of its debts upon any terms and

such proceeding is consented to or acquiesced in by it or is not dismissed

within sixty (60) days of the date upon which it was instituted, or an action

or petition is otherwise brought against the Maker seeking similar relief or

alleging that it is insolvent, unable to pay its debts as they mature or generally

not paying its debts as they become due and such action or petition is

consented to or acquiesced in by it or is not dismissed within sixty (60) days

of the date upon which it was brought; or (viii) dissolution of or liquidation

of the Maker.

 

(b)           Subject

to Section 6, upon the occurrence of an Event of Default, Holder, at its

option, without demand or notice of any kind, may declare this Note immediately

due and payable, whereupon the Maturity Date hereunder shall be the date of

such declaration and all outstanding principal and accrued interest shall

become immediately due and payable; provided,

however, that upon the occurrence of any Event of Default described in

clause (vi) or (vii) above, this Note, without demand, notice or declaration by

the Holder of any kind, shall automatically and immediately become due and

payable.

 

(c)           Upon the occurrence of an Event of

Default hereunder, the Holder, without notice or demand of any kind, may hold

and set off against any or all outstanding principal or interest owing under

this Note as the Holder may elect, any balance or amount to the credit of the

Maker in any deposit, agency, reserve, holdback or other account of any nature

whatsoever maintained by or on behalf of the Maker with the Holder or any of its

affiliates at any of its offices, regardless of whether such accounts are

general or special and regardless of whether such accounts are individual or

joint.

 

14.           Usury.

In no event shall the amount or rate of interest due and payable under this

Note exceed the maximum amount or rate of interest allowed by applicable law

and, in the event any such excess payment is made by the Maker or received by

the Holder, such excess sum shall be credited as a payment of principal (or if

no principal shall remain outstanding, shall be refunded to the Maker). It is

the express intent hereof that the Maker not pay and the Holder not receive,

directly or indirectly or in any manner, interest in excess of that which may

be lawfully paid under applicable law. All interest (including all charges,

fees or other amounts deemed to be interest) which is paid or charged under

this Note shall, to the maximum extent permitted by applicable law, be

amortized, allocated and spread on a pro rata basis throughout the actual term

of this Note.

 

15.           Time

of the Essence. Time is of the essence with respect to the obligations of

the Maker evidenced hereby. Demand, presentment, notice, notice of demand,

notice for payment, protest and notice of dishonor are hereby waived by the

Maker. The Holder shall not be deemed to waive any of its rights under this

Note unless such waiver be in writing and signed by the Holder. No delay or

omission by the Holder in exercising any of its rights under this Note shall

operate as a waiver of such rights and a waiver in writing on one occasion

shall not be construed as a consent to or a waiver of any right or remedy on

any future occasion.

 

16.           Choice

of Law. This Note shall be governed by and construed under the internal

laws of the State of Alabama without giving effect to conflicts of laws.

Whenever possible, each provision of this Note shall be interpreted in such

manner as to be effective and valid under applicable law, but if any provision

of this Note shall be prohibited by or invalid under applicable law, such

provision shall be ineffective only to the extent of such prohibition or

invalidity, without invalidating the remainder of such provision or the

remaining provisions of this Note.

 

17.           Waiver of Jury Trial

 

MAKER HEREBY WAIVES,

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT MAKER MAY HAVE

UNDER ANY APPLICABLE LAW TO A TRIAL BY JURY WITH RESPECT TO ANY SUIT OR LEGAL

ACTION WHICH MAY BE COMMENCED BY OR AGAINST HOLDER CONCERNING THE

INTERPRETATION, CONSTRUCTION, VALIDITY, ENFORCEMENT OR PERFORMANCE OF THIS NOTE

OR ANY OTHER AGREEMENT OR INSTRUMENT EXECUTED IN CONNECTION HEREWITH, INCLUDING

THE REGISTRATION RIGHTS AGREEMENT. TN THE EVENT ANY SUCH SUIT OR LEGAL ACTION

IS COMMENCED BY HOLDER, MAKER HEREBY EXPRESSLY AGREES, CONSENTS AND SUBMITS TO

THE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY

IN WHICH HOLDER'S ADDRESS SHOWN BELOW IS LOCATED WITH RESPECT TO SUCH SUIT OR

LEGAL ACTION, AND MAKER ALSO EXPRESSLY CONSENTS AND SUBMITS TO AND AGREES THAT

VENUE IN ANY SUCH SUIT OR LEGAL ACTION IS PROPER IN SAID COURTS AND COUNTY AND

MAKER HEREBY EXPRESSLY WAIVES ANY AND ALL PERSONAL RIGHTS UNDER APPLICABLE LAW

OR IN EQUITY TO OBJECT TO THE JURISDICTION AND VENUE IN SAID COURTS AND COUNTY.

THE JURISDICTION AND VENUE OF THE COURTS CONSENTED AND SUBMITTED TOAND AGREED

UPON IN THIS PARAGRAPH ARE NOT EXCLUSIVE BUT ARE CUMULATIVE AND IN ADDITION TO

THE JURISDICTION AND VENUE OF ANY OTHER COURT UNDER ANY APPLICABLE LAW OR IN

EQUITY.

 

18.           Notices.

All notices and other communications hereunder shall be in writing and shall be

delivered to Maker by overnight courier or mailed, first-class postage prepaid,

addressed to Maker at the address set forth beneath Maker’s signature below.

Notice shall be effective upon the earlier of (I) receipt or (ii) five days

after mailing as provided above.

 

IN WITNESS WHEREOF, the parties hereto have caused this

Note to be duly executed and delivered by their respective duly authorized

corporate officers as of the date first written above.

 

 

	

   

  	

   

  	

  NETWORK COMPUTING DEVICES, INC.

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  [CORPORATE SEAL]

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Rudolph G. Morin

  
	

   

  	

   

  	

   

  	

  President and Chief Executive Officer

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Attest:

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Address for notices:

  
	

   

  	

   

  	

   

  	

  301 Ravendale Drive

  
	

   

  	

   

  	

   

  	

  Mountain View, California 94043-5207

  
	

   

  	

   

  	

   

  	

  Attn: President

  
						

 

 

	

   

  	

  SCI TECHNOLOGY, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  
	

   

  	

   

  
	

   

  	

  Attest:

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  
	

   

  	

  Address for Notices:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
						

 

EXHIBIT A

 

LIST OF ACCOUNTS

 

EXHIBIT B

 

CAPITALIZATION

As of June 30, 2001 (in thousands)

 

 

	

  Shareholders'

  equity:

  
	

  Preferred stock, $0.001 par value:  3,000,000 shares authorized; Shares

  designated are:  Series A

  Participating Preferred Stock, $0.001 par value: 500,000 shares authorized,

  none issued or outstanding; Series B Convertible Preferred Stock, $0.001 par

  value: 290,000 shares authorized; 

  220,000 shares issued and outstanding as of 

  June 30, 2001

  	

   

  	

  $

  	

  1,500

  	

   

  
	

  Common stock, $0.001 par value: 

  30,000,000 shares authorized; 17,613,237 shares issued and outstanding

  as of

  June 30, 2001

  	

   

  	

  18

  	

   

  
	

  Capital in excess of par value

  	

   

  	

  62,380

  	

   

  
	

  Accumulated deficit

  	

   

  	

  (59,447

  	

  )

  
	

  Total shareholders' equity

  	

   

  	

  $

  	

  4,451

  	

   

  

 

Stock options:

 

As of June 30, 2001, there

were 2,802,458 options outstanding under NCD's stock option plans at a weighted

average exercise price of $3.19.

 

 

Warrants:

 

As of June 30, 2001, there

were warrants outstanding to purchase 1,000,000 and 600,000 shares of NCD

common stock at exercise prices of $8.00 and $.75, respectively.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]