THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
IT MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE
UNLESS (I) A REGISTRATION STATEMENT FOR SUCH PROMISSORY NOTE UNDER THE
SECURITIES ACT OF 1933 IS IN EFFECT OR (II) PAYEE (AS DEFINED BELOW) HAS
RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE PAYEE, TO
THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.
PROMISSORY NOTE
Principal: $163,000.00 Piscataway, NJ
October 5, 2000
FOR VALUE RECEIVED, Stephen B. Gray, an individual currently
residing at 9 Pavilica Road, Stockton, NJ 08559 (the "Maker"), hereby promises
to pay to ION NETWORKS, INC., a Delaware corporation currently having an address
at 1551 South Washington Avenue, Piscataway, New Jersey 08854 (the "Payee"), the
aggregate sum of One Hundred Sixty-Three Thousand Dollars ($163,000.00) (the
"Principal Amount"), without interest, all upon the terms and provisions set
forth in this promissory note (as the same may be supplemented, modified,
amended, restated or replaced from time to time in the manner provided herein,
this "Note"). Payments shall be made at the address set forth above or at such
other place as may be designated from time to time in writing by the Payee.
1. Payment of Principal. The Principal Amount shall be paid by the
Maker to the Payee in installments of at least $20,000 each, with the first such
installment payment due on the last to occur of (a) November 1, 2000, or (b) the
tenth Business Day following the date of the earnings press release by the
Company for the quarter ended September 30, 2000, the second such installment
payment due on December 11, 2000, the third such installment payment due on
January 11, 2001, the fourth such installment payment due on February 9, 2001,
the fifth such installment payment due on March 9, 2001, and the entire
remaining balance due in a single payment on or before the earliest to occur of:
(i) March 31, 2001; or, (ii) the occurrence of an Event of Default (as defined
below); or (iii) such earlier date as may be otherwise provided herein (the
earliest such applicable date being referred to herein as the "Maturity Date").
2. Prepayment. The Maker shall have the right to prepay the
outstanding Principal Amount of this Note, in whole at any time, or in part at
any time and from time to time, without penalty or premium.
3. Security. This Maker's obligations under this Note: (i) are subject
to and supported by certain agreements made by the Maker under the Separation
and Forebearance Agreement between the Maker and the Payee dated as of October
5, 2000 (as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein, the "Separation
Agreement"), (ii) are assured by the guaranty of Kathleen D. Gray, the Maker's
wife (the "Guarantor"), pursuant to her Guaranty Agreement with the Payee dated
as of October 5, 2000 (as the same may be supplemented, modified, amended,
restated or replaced from time to time in the manner provided therein, the
"Guaranty"), and (iii) are secured by the Mortgage on the property located at 9
Pavilica Road, Stockton, New Jersey 08559, from the Maker and the Guarantor, as
mortgagors, to the Payee, as mortgagees, dated as of October 5, 2000 (as the
same may be supplemented, modified, amended, restated or replaced from time to
time in the manner provided therein, the "Mortgage"), which Mortgage also
secures the obligations of the Guarantor under her Guaranty. The Guaranty and
Mortgage also support the Promissory Note issued by the Maker to the Payee on
June 27, 2000, as amended by a first amendment dated as of the date hereof,
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in the amount of Seven Hundred and Fifty Thousand ($750,000) Dollars (as so
amended, and as the same may be supplemented, modified, amended, restated or
replaced from time to time in the manner provided therein the "$750,000 Note").
4. Events of Default. An "Event of Default" shall be deemed to occur
hereunder (i) upon the commencement of any proceedings by the Maker, or with the
consent or non-objection of Maker, under any law or statute concerning
bankruptcy, arrangement of debt, insolvency or readjustment of debt, or the
commencement of any such proceedings without the consent of the Maker and such
proceedings shall continue undischarged for a period of sixty (60) days; (ii)
the failure to pay any amount under this Note when due; (iii) any "Event of
Default" under (and as defined in) the $750,000 Note, (iv) any breach or default
by Maker or the Guarantor under the Separation Agreement, the Guaranty or the
Mortgage, , or (v) upon the death or disability of Maker or Guarantor.
5. Payment Upon Default. Without limiting any other rights or remedies
of the Payee in accordance with this Note or applicable law, in the event of the
occurrence of an Event of Default, Payee, at its election, may accelerate and
demand immediate payment of the Principal Amount and all other obligations due
under this Note and Maker shall be liable for all such amounts. Payee shall also
be entitled to the payment of interest at the rate of 12% per annum on the
outstanding Principal Amount from and after the date of any Event of Default. In
addition, the Maker shall pay or reimburse ON DEMAND any and all costs and
expenses incurred by the Payee, whether directly or indirectly, in connection
with all waivers, releases, satisfactions, modifications, amendments and
consents, all payments made and actions taken in the name of or on behalf of the
Maker or the Guarantor, and the administration, maintenance, enforcement and
adjudication of this Note and the Payee's rights, powers, privileges and other
interests under this Note and applicable law, including (without limitation) the
disbursements, expenses and fees of counsel to the Payee.
6. Waiver of Presentment, Etc. Presentment for payment, notice of
dishonor, protest, notice of protest, notice of acceptance and all similar
notices are hereby expressly waived by the Maker. Any waiver or consent
respecting any term or provision of this Agreement shall be effective only in
the specific instance and for the specific purpose for which given and shall not
be deemed, regardless of frequency given, to be a further or continuing waiver
or consent. The failure or delay of the Payee at any time or times to require
performance of, or to exercise its rights with respect to, any term or provision
of this Agreement in no manner shall affect the Payee's right at a later time to
enforce any such provision. No notice to or demand on the Maker or Guarantor in
any case shall entitle such party to any other or further notice or demand in
the same, similar or other circumstances. The acceptance by the Payee of (a) any
partial or late payment shall not constitute a satisfaction or waiver of the
full amount then due or the resulting Event of Default or (b) any payment during
the continuance of an Event of Default shall not constitute a waiver or cure
thereof; and the Payee may accept or reject any such payment without affecting
any of the Payee' rights, powers, privileges, remedies and other interests under
this Agreement and applicable law. All representations, warranties and covenants
of the Maker and all rights, powers, privileges, remedies and other interests of
the Payee hereunder are cumulative and not alternatives, and they are in
addition to and shall not limit (except as other-wise expressly provided herein)
any other right, power, privilege, remedy or other interest of the Payee under
this Agreement, any related document or applicable law.
7. Governing Law. This Note shall be governed by, and construed in
accordance with, the laws of the State of New Jersey, without regard to
principles of conflicts or choice of laws thereof. This Note shall not be
interpreted or construed with any presumption against the Payee by virtue of the
Payee causing this Note to be drafted.
8. Amendments. No amendment, modification, or waiver of any provision
of this Note nor consent to any departure by the Maker therefrom shall be
effective unless the same shall be in writing and signed by the Payee and the
Maker.
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9. Successors And Assigns. This Note shall not be negotiable,
transferable or assignable by the Maker without the prior written consent of
Payee. This Note shall be binding upon and shall inure to the benefit of the
Payee and its successors and assigns, if any, subject to the provisions hereof.
10. Entire Agreement. This Note, the $750,000 Note, the Separation
Agreement, the Mortgage and the Guaranty contain the entire agreement of the
parties and supersede all other representations, warranties, agreements and
understandings, oral or otherwise, among the parties with respect to the matters
contained herein and therein.
11. Waiver of the Right to Trial by Jury. The Maker hereby irrevocably
waives the right to trial by jury in any action, suit, claim, counterclaim or
other proceeding, whether in contract or tort, at law or in equity, in any
manner connected with this Note or any transactions contemplated hereunder. The
exclusive jurisdiction of any disputes arising hereunder shall be in the federal
or state courts of the State of New Jersey in Middlesex County.
12. Notices. Any notice, request, demand or other communication
permitted or required to be given hereunder shall be in writing, shall be sent
by one of the following means to the addressee at the address set forth above
(or at such other address as shall be designated hereunder by notice to the
other parties and persons receiving copies, effective upon actual receipt) and
shall be deemed conclusively to have been given: (a) on the first Business Day
(as hereinafter defined) following the day timely deposited with Federal Express
(or other equivalent national overnight courier) or United States Express Mail,
with the cost of delivery prepaid; (b) on the fifth Business Day following the
day duly sent by certified or registered United States mail, postage prepaid and
return receipt requested; or (c) when otherwise actually delivered to the
addressee. Copies may be sent by regular first-class mail, postage prepaid, to
such person(s) as a party may direct from time to time by notice to the others,
but failure or delay in sending copies shall not affect the validity of any such
notice, request, demand or other communication so given to a party. For purposes
hereof, "Business Day" shall mean any day during which banks are open for
business in New York, New York, other than any Saturday, Sunday or a day on
which commercial banks in New York State are authorized or required to close.
IN WITNESS WHEREOF, the Maker has executed this Note as of the date first
written above.
MAKER:
/s/ Stephen B. Gray
----------------------------
Stephen B. Gray
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