Document:

EX-10.1

Exhibit 10.1

AMENDMENT NO. 1 TO AMENDED AND RESTATED SECURED PROMISSORY NOTE

This Amendment No. 1 to Amended and Restated Secured Promissory Note (this
"Amendment”), dated as of July 7, 2006, is entered into by and among XYBERNAUT CORPORATION,
a Delaware corporation, and XYBERNAUT SOLUTIONS, INC., a Virginia corporation, debtors and Chapter
11 debtors-in-possession (collectively, “Borrowers”) and EAST RIVER CAPITAL LLC, a Delaware
limited liability company (“Lender”).

W I T N E S S E T H

WHEREAS, the Borrowers and Lender have entered into that certain Amended and Restated Secured
Promissory Note, dated May 1, 2006 (the “Restated Note”) pursuant to which the Lender has
provided Loans to Borrowers upon the terms and conditions set forth in the Restated
Note;1

WHEREAS, the Restated Note amends and restates the terms of that certain Secured Promissory
Note, dated March 23, 2006;

WHEREAS, in connection with the Note and the Restated Note, the Borrowers and the Lender are
parties to that certain Security Agreement dated March 23, 2006 (the “Security
Agreement”) and the Borrowers, Lender and the Escrow Agent are parties to that certain
Escrow Agreement dated March 23, 2006 (the “Escrow Agreement” and, collectively with the
Restated Note and the Security Agreement, the “Loan Documents”);

WHEREAS, the Borrowers have requested the Lender to provide Loans in the amount of $100,000 to
be used to pay certain ordinary course expenses of the Borrowers;

WHEREAS, the Lender has agreed to provide such Loans, subject to the terms and conditions set
forth herein;

WHEREAS, the Creditors’ Committee has consented to the terms of this Amendment and to the use
of proceeds of such Loans as provided herein;

WHEREAS, the Borrowers and the Lender have agreed to make certain amendments to the Restated
Note and have entered into this Amendment to evidence and effectuate such amendments;

NOW, THEREFORE, in consideration of the premises and covenants set forth herein and other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

1. Amendments.

(a) Use of Proceeds. Section 7 of the Restated Note is hereby amended to add the
following to the end of Section 7:

“Notwithstanding anything to the contrary in this Note, without
the prior written consent of the Lender, Borrowers shall not use the
Loans or any portion thereof, other than in the ordinary course of
the trade or business of the Borrowers.”

(b) Issuance of Stock; Reconstitution of Board of Directors. Section 23 of the
Restated Note is hereby deleted in its entirety and replaced with the following:

“Intentionally deleted.”

(c) Warrants, Equity Rights. Section 24 of the Restated Note is hereby deleted in its
entirety and replaced with the following:

“Intentionally deleted.”

2. Use of Loans. The $100,000 of Loans to be provided to the Borrowers in accordance
with this Amendment shall be used by the Borrowers solely for payroll.

3. Conditions Precedent to Amendment. The provisions contained herein shall be
effective as of the date hereof, but only upon the satisfaction of each of the following conditions
precedent, in a manner satisfactory to Lender:

(a) The Lender shall have received an original of this Amendment, duly authorized, executed
and delivered by the Borrowers, the Creditors’ Committee and the Lender;

(b) The Final DIP Order shall be in full force and effect and shall not have been reversed,
stayed, modified or amended without the express written consent of the Lender;

(c) No application or motion shall have been made to the Bankruptcy Court for any stay,
modification or amendment of the Final DIP Order, and no stay with respect to same shall have been
entered; and

(d) The Lender shall have received, in form and substance satisfactory to the Lender, all
consents, waivers, acknowledgments and other agreements from those persons which the Lender may
deem necessary or desirable in order to effectuate the provisions or purposes of this Amendment.

4. Additional Representations, Warranties and Covenants. Each Borrower, jointly and
severally, represents, warrants and covenants with and to the Lender as follows, which
representations, warranties and covenants are continuing and shall survive the execution and
delivery hereof:

(a) Borrowers shall not, directly or indirectly, amend, modify, alter or change the terms of
any of the Loan Documents without the prior written consent of Lender;

(b) this Amendment has been duly authorized, executed and delivered by all necessary action on
the part of each Borrower which is a party hereto and the agreements and obligations contained
herein constitute legal, valid and binding obligations of each Borrower enforceable against such
Borrower in accordance with their terms; and

(c) neither the execution and delivery of this Amendment, nor the consummation of the
transaction herein contemplated, nor compliance with the provisions hereof (i) does or shall
conflict with or result in the breach of, or constitute a default under, any mortgage, deed of
trust, agreement, security agreement or instrument to which any Borrower is a party or may be
bound, (ii) shall violate any order that has been entered by the Bankruptcy Court, or (iii) shall
violate any provision of the Certificate of Incorporation or Bylaws of any Borrower.

5. Effect of this Amendment. Except as modified pursuant hereto, no other changes or
modifications to the Loan Documents are intended or implied, and in all other respects the Loan
Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the
date hereof. To the extent of conflict between the terms of this Amendment and the other Loan
Documents, the terms of this Amendment shall control. The Restated Note and this Amendment shall
be read and construed as one agreement.

6. Reservation of Rights. Notwithstanding the Creditors’ Committee’s consent to the
Loans contemplated by this Amendment and use of such Loans for the purposes stated by this
Amendment, the Creditors’ Committee reserves all of its rights and claims in respect of the GUC
Escrow and its funding against all entities, and Borrowers and Lenders agree and acknowledge that
by consenting and agreeing to and acknowledging this Amendment, such rights and claims of the
Creditors’ Committee on behalf of its constituency are neither waived nor impaired. The Borrowers
and the Lender each reserve all of their rights in respect of the GUC Escrow.

7. Further Assurances. The parties hereto shall execute and deliver such additional
documents and take such additional action as may be reasonably necessary or desirable to effectuate
the provisions and purposes of this Amendment.

8. Governing Law. This Amendment will be deemed to be a contract made under and
governed by the laws of the State of New York (including for such purpose sections 5-1401 and
5-1402 of the General Obligations Law of the State of New York) but excluding any principles of
conflicts of law or other rule of law that would cause the application of the law of any
jurisdiction other than the laws of the State of New York and the Bankruptcy Code.

9. Binding Effect. This Amendment shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors and assigns.

10. Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Amendment.

11. Counterparts. This Amendment may be executed in any number of counterparts, but
all of such counterparts shall together constitute but one and the same agreement. In making proof
of this Amendment, it shall not be necessary to produce or account for more than one counterpart
thereof signed by each of the parties hereto. This Amendment may be executed and delivered by
telecopier with the same force and effect as if it were a manually executed and delivered
counterpart.

1 Capitalized terms used and not defined herein
shall have the respective meanings ascribed to such terms in the Restated Note.

1

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized as of the day and year first above written.

	 	 	 
	BORROWERS:

	 	XYBERNAUT CORPORATION

Debtor and Debtor-in-Possession
	 
	 	 
	
 
	 	By:/s/ Perry L. Nolen
	
 
	 	 
	
 
	 	Name: Perry L. Nolen

Title: President & CEO
	 
	 	 
	
 
	 	XYBERNAUT SOLUTIONS, INC.

Debtor and Debtor-in-Possession
	 
	 	 
	
 
	 	By: /s/ Edward P. Maddox
	
 
	 	 
	
 
	 	Name: Edward P. Maddox

Title: President
	 
	 	 
	LENDER:

	 	EAST RIVER CAPITAL LLC
	 
	 	 
	
 
	 	By: /s/ James A. Coyne
	
 
	 	 
	
 
	 	Name: James A. Coyne

Title: Manager

AGREED, ACKNOWLEDGED AND CONSENTED TO:

OFFICIAL COMMITTEE OF UNSECURED CREDITORS

OF XYBERNAUT CORPORATION, ET AL.

By: /s/ Michael B. Schaedle

Michael B. Schaedle

Blank Rome LLP

One Logan Square

130 N. 18th Street, 3rd Floor

Philadelphia, PA 19103

Attorneys for the Official Committee of Unsecured Creditors

2Prudential Amendment 7-14--06

                                                                            EXHIBIT
      4.01

     

     

    
 

    AMENDMENT
      TO NOTE PURCHASE 

    AND
      PRIVATE SHELF AGREEMENTS

    

    

    THIS
      AMENDMENT TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENTS (this
“Amendment”),
      is made and
      entered into as of July 14, 2006, by and among Stanley Furniture Company, Inc.
      (the “Company”),
      The Prudential
      Insurance Company of America (together with its successors and assigns,
“PICA”),
      Hartford Life
      Insurance Company (“Hartford”),
      and Medica
      Health Plans (“Medica”
and,
      together
      with PICA, Hartford and Medica, the “Noteholders”).

    

    W I T N E S S E T H:

    

    WHEREAS,
      (i) the
      Company and PICA are parties to that certain Note Purchase and Private Shelf
      Agreement, dated as of June 29, 1995 (as amended, restated, supplemented or
      otherwise modified from time to time, the “1995
      Note Agreement”)
      and (ii) the
      Company, PICA, Hartford and Medica are parties to that certain Private Shelf
      Facility, dated as of September 8, 1999 (as amended, restated, supplemented
      or
      otherwise modified from time to time the “1999
      Note Agreement”
and,
      together
      with the 1995 Note Agreement, the “Note
      Agreements”);
      capitalized
      terms used herein and not otherwise defined shall have the meanings assigned
      to
      such terms in the Note Agreements; and

     

    WHEREAS,
      the
      Company has requested that the Noteholders amend certain provisions of the
      Note
      Agreements, and subject to the terms and conditions hereof, the Noteholders
      are
      willing to do so; 

     

    NOW,
      THEREFORE, for
      good and valuable consideration, the sufficiency and receipt of all of which
      are
      acknowledged, (i) the Company, and PICA agree that the 1995 Note Agreement
      is
      amended as follows and (ii) the Company, PICA, Hartford and Medica agree that
      the 1999 Note Agreement is amended as follows:

    

    1.  Amendments.

     

    (a)
      Section 6A of
      such Note Agreement (Fixed Charge Coverage and Debt Limits) is hereby amended
      by
      replacing the “.” at the end of such Section with “; or” and adding the
      following as a new subsection (iv):

     

    (iv) the
      ratio of
      Consolidated Debt to Consolidated EBITDA to exceed 2.75:1.00.

     

    (b)
      Section 6B of
      such Note Agreement (Dividend Limitation) is hereby amended by removing such
      covenant in its entirety and replacing such Section in its entirety with
“Intentionally
      Omitted”.

     

    (c)
      Section 6C(7)
      of such Note Agreement (Investments) is hereby amended by replacing clause
      (vi)
      of such Section in its entirety with the following:

     

    (vi) any
      other
      Investment of the Company or any of its Subsidiaries so long as the amount
      of
      all such Investments, other than investments specified in clauses (i) through
      (v) above shall not exceed an amount equal to 10% of Consolidated Assets.

     

    (d)
      Section 10B of
      such Note Agreement (Definitions: Other Terms) is hereby amended by adding
      the
      following definition of “Consolidated
      EBITDA”
in
      proper
      alphabetical order:

     

    “Consolidated
      EBITDA”
      shall mean, for
      the Company and its Subsidiaries on a Consolidated basis for the four fiscal
      quarters most recently ended, Consolidated Net Earnings, or Consolidated Net
      Loss, as the case may be, for such period, plus
      to
      the extent
      deducted in calculating such Consolidated Net Earnings or Consolidated Net
      Loss,
      taxes, depreciation, amortization and Consolidated Interest
      Charges.

     

    2.  Conditions
      to Effectiveness of this Amendment.
      Notwithstanding
      any
      other provision of this Amendment, it is understood and agreed that this
      Amendment shall not become effective until (i) PICA shall have received executed
      counterparts to this Amendment from the Company and each Noteholder, (ii) the
      Noteholders have received reimbursement of, or evidence of the direct payment
      of, the reasonable fees, charges and disbursements of King & Spalding LLP,
      counsel to the Noteholders incurred in connection with this Amendment, and
      (iii)
      PICA shall have received copies of an amendment to the Company’s credit
      facility, amending such credit facility in a manner similar to the amendments
      to
      Section 6B of the Note Agreements contained herein.

    

    3.  Representations
      and Warranties.
      To induce the
      Noteholders to enter into this Amendment, the Company hereby represents and
      warrants to the Noteholders that: 

    

    (a) The
      execution,
      delivery and performance by the Company of this Amendment (i) are within
      the Company’s power and authority; (ii) have been duly authorized by all
      necessary corporate and shareholder action; (iii) are not in contravention
      of any provision of the Company’s certificate of incorporation or bylaws or
      other organizational documents; (iv) do not violate any law or regulation,
      or any order or decree of any governmental authority; (v) do not conflict
      with or result in the breach or termination of, constitute a default under
      or
      accelerate any performance required by, any indenture, mortgage, deed of trust,
      lease, agreement or other instrument to which the Company or any of its
      Subsidiaries is a party or by which the Company or any such Subsidiary or any
      of
      their respective property is bound; (vi) do not result in the creation or
      imposition of any Lien upon any of the property of the Company or any of its
      Subsidiaries; and (vii) do not require the consent or approval of any
      governmental authority or any other person;

    

    (b) This
      Amendment has
      been duly executed and delivered for the benefit of or on behalf of the Company
      and constitutes a legal, valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms; and

    

    (c) After
      giving effect
      to this Amendment, no Default or Event of Default has occurred and is continuing
      as of the date hereof.

    

    4.  Effect
      of Amendment.
Except
      as set forth
      expressly herein, all terms of the Note Agreements, as amended hereby, shall
      be
      and remain in full force and effect and shall constitute the legal, valid,
      binding and enforceable obligations of the Company to the Noteholders.
The
      execution, delivery and effectiveness of this Amendment shall not, except as
      expressly provided herein, operate as a waiver of any right, power or remedy
      of
      the Noteholders under either Note Agreement, nor constitute a waiver of any
      provision of either Note Agreement. 

    

    5.  Governing
      Law.
      This
      Amendment
      shall be governed by, and construed in accordance with, the internal laws of
      the
      State of New York and all applicable federal laws of the United States of
      America.

    

    6.  No
      Novation.
      This Amendment is
      not intended by the parties to be, and shall not be construed to be, a novation
      of either Note Agreement or an accord and satisfaction in regard
      thereto.

    

    7.  Costs
      and Expenses.
      The Company
      agrees to pay on demand all costs and expenses of the Noteholders in connection
      with the preparation, execution and delivery of this Amendment, including,
      without limitation, the reasonable fees and out-of-pocket expenses of outside
      counsel for the Noteholders with respect thereto.

    

    8.  Counterparts. This
      Amendment may
      be executed by one or more of the parties hereto in any number of separate
      counterparts, each of which shall be deemed an original and all of which, taken
      together, shall be deemed to constitute one and the same instrument. Delivery
      of
      an executed counterpart of this Amendment by facsimile transmission or by
      electronic mail in pdf form shall be as effective as delivery of a manually
      executed counterpart hereof.

    

    9.  Binding
      Nature.
      This Amendment
      shall be binding upon and inure to the benefit of the parties hereto, their
      respective successors, successors-in-titles, and assigns.

    

    10.  Entire
      Understanding.
      This Amendment
      sets forth the entire understanding of the parties with respect to the matters
      set forth herein, and shall supersede any prior negotia-tions or agreements,
      whether written or oral, with respect thereto.

    

    [Signature
      Pages
      To Follow]

    

     

    
      
      

    

    
    

    IN
      WITNESS WHEREOF,
      the parties hereto have caused this Amendment to be duly executed by their
      respective authorized officers as of the day and year first above
      written.

    

    COMPANY:

    

    STANLEY
      FURNITURE COMPANY, INC.

    

     

    By:     /s/
      Douglas
      I. Payne

    Name:   Douglas
      I.
      Payne

    Title:        Exective
      Vice-President -
      Finance & Adminstration

    

    

     

    

                                NOTEHOLDERS:

    

    THE
      PRUDENTIAL INSURANCE COMPANY

    OF
      AMERICA

    

    

    By:
/s/
      Jay S.
      White

      Vice
      President

    

    

    

    

    

    HARTFORD
      LIFE INSURANCE COMPANY

    

    By: Prudential
      Private
      Placement Investors,

    L.P.
      (as Investment
      Advisor)

    

    By: Prudential
      Private
      Placement Investors, Inc.

    (as
      its General
      Partner)

     

     

    By:
/s/
      Jay
      S.White    

        
      Vice President

     

    

    

    

    

    MEDICA
      HEALTH PLANS

    

    By: Prudential
      Private
      Placement Investors,

    L.P.
      (as Investment
      Advisor)

    

    By: Prudential
      Private
      Placement Investors, Inc.

    (as
      its General
      Partner)

     

     

    By:
/s/
      Jay S.
      White   

        
Vice
      President

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