FIRST AMENDMENT TO PROMISSORY NOTE
This Agreement, dated as of October 5, 2000 (this
"Amendment"), is by and between Stephen B. Gray, an individual currently
residing at 9 Pavilica Road, Stockton, NJ 08559 (the "Maker"), and ION NETWORKS,
INC., a Delaware corporation currently having an address at 1551 South
Washington Avenue, Piscataway, New Jersey 08854 (the "Payee").
The Maker issued his Promissory Note to the Payee in the
principal amount of $750,000 dated June 27, 2000 (the "Existing Note", and as
amended by this Amendment, and as the same may be hereafter supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein, the "Note").
The Maker and the Payee have entered into the Separation
Agreement (as defined below), pursuant to which (among other things) the Payee
agreed to temporarily forebear on the repayment of the Existing Note, and the
Maker agreed to secure his obligations under the Existing Note with the
Mortgage.
The parties have entered into this Amendment in order to
approve and reflect the foregoing and certain other changes, all upon the terms
and provisions and subject to the conditions hereinafter set forth.
Agreement
---------
In consideration of the foregoing, the mutual covenants and
agreements set forth below and in the Separation Agreement, and other good and
valuable consideration (the receipt and adequacy of which are hereby
acknowledged by the parties), the parties hereto hereby agree as follows:
Section 1. Amendment to Existing Note. The Existing Note is hereby
amended as follows, effective as of the date first written above:
(a) The interest rate on the Existing Note, as hereby amended, shall
be determined and fixed as of June 27, 2000, and shall cease to accrue as of
September 29, 2000.
(b) Section 1 of the Existing Note is hereby deleted in its entirety,
and the following new section is hereby inserted in its place:
"1. Payment of Principal and Interest. The Principal Amount,
together with all accrued and unpaid interest thereon, shall be paid by
Maker to the Payee on the first to occur of: (i) April 30, 2001,
provided that if the Payee is unable to register the shares underlying
certain options owned by maker by December 31, 2000, as required by
Section 4(b) of the Separation Agreement (as hereinafter defined) such
date shall be December 31, 2001, instead of April 30, 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")."
(c) The last two sentences of Section 2 ("Prepayment") of the Existing
Note, beginning with the language "Maker agrees" and ending with "compensation
committee or CFO", are hereby deleted in their entirety.
(d) At the end of Section 2 of the Existing Note, the following
Section 2A is hereby inserted without the modification of any other provision:
"2A. 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
-1-
<PAGE>
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, dated as of the date hereof, in the amount of One
Hundred and Sixty Three Thousand ($163,000) 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
"$163,000 Note")".
(e) Section 3 of the Existing Note is deleted in its entirety, and the
following new section is hereby inserted in its place:
"3. Events of Default. An "Event of Default" shall be deemed
to occur hereunder (i) upon the commencement of any proceedings by the
Maker or Guarantor, or with the consent or non-objection of the Maker
or Guarantor, 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
or Guarantor 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 $163,000 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 the Maker or Guarantor. 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."
(f) After the last sentence of Section 4 of the Existing Note, the
following is hereby inserted without the modification of any other provision:
" 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."
(g) At the end of Section 4 of the Existing Note, the following
Section 4A is hereby inserted without the modification of any other provision:
"4A. 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.
-2-
<PAGE>
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."
Section 2. Acknowledgment of Outstanding Loans. The Maker hereby
acknowledges, certifies and agrees that: (a) pursuant to the Existing Note, the
Payee has made loans to the Maker that are outstanding as of the date of this
Amendment in the aggregate principal amount of $750,000.00; and (b) the
obligations of the Maker to repay those loans (with interest) to the Payee and
to perform or otherwise satisfy his other obligations under the Existing Note
(i) each remain and shall continue in full force and effect, both before and
after giving effect to this Amendment, (ii) are not subject to any defense,
counterclaim, setoff, right of recoupment, abatement, reduction or other claim
or determination, and (iii) are and shall continue to be governed by the terms
and provisions of the Existing Note as supplemented, modified and amended by
this Amendment.
Section 3. Counterparts. This Amendment may be signed in two or more
counterpart copies of the entire document or of signature pages to the document,
each of which may be executed by one or more of the parties hereto, but all of
which, when taken together, shall constitute a single agreement binding upon all
of the parties hereto.
Section 4. Governing Law, Etc. This Amendment shall be governed by and
construed in accordance with the applicable terms and provisions of Sections 5
through 10 (as well as any applicable definitions or provisions appearing
elsewhere) of the Existing Note as amended hereby as if this amendment were the
"Note" referred to in those provisions, which terms and provisions are
incorporated herein by reference.
Section 5. Agreement to Continue as Amended. The Existing Note, as
supplemented, modified and amended by this Amendment, shall remain and continue
in full force and effect after the date hereof.
Section 6. Entire Agreement. This Amendment, the Note, the $163,000
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.
In Witness Whereof, the parties hereto have executed and
delivered this Amendment as of the date first written above.
MAKER:
/s/ Stephen B. Gray
-------------------
Stephen B. Gray
PAYEE:
ION NETWORKS, INC.
By: /s/Stephen M. Deixler
--------------------------------
Name: Stephen M. Deixler
Title: Chairman
-3-
