EXHIBIT 10.10
TERM NOTE
$500,000 July 22, 1999
In consideration of the loan (hereinafter referred to as a "Loan"), Safeguard
Delaware, Inc., a Delaware corporation (the "Lender"), has made to Xxxx Xxxxxx,
an individual residing at 000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (the
"Borrower"), and for value received, the Borrower hereby promises to pay to the
order of the Lender, at the Lender's office located at 000 Xxxxxxxx Xxxxxxxx,
0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000, or at such other place in the
continental United States as the Lender may designate in writing, in lawful
money of the United States, and in immediately available funds, the principal
sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000).
The unpaid principal balance of this Note shall be paid on July 22, 2002; and
provided that the loan is repayable in 180 days if Borrower's employment with
Safeguard Scientifics, Inc. ("Safeguard") ceases prior to December 31, 2000.
The Borrower hereby further promises to pay to the order of the Lender
interest on the outstanding principal amount from the date hereof, at a per
annum rate equal to the announced prime rate of the PNC Bank N.A. (the "Prime
Rate"). Such interest rate shall be changed when and as the Prime Rate changes.
In addition, the Borrower shall pay on demand interest on any overdue payment of
principal and interest (to the extent legally enforceable) at the fluctuating
Prime Rate plus three percent (3%).
Interest shall be payable when the unpaid principal balance of the Note is
paid.
This Note is secured by a pledge of stock, vested stock options, LTIP grants
and any other compensation granted to Borrower by Safeguard and referred to in a
Loan and Security Agreement and a Pledge Agreement of even date herewith
(collectively, the "Loan Documents").
All payments made on this Note (including, without limitation, prepayments)
shall be applied, at the option of the Lender, first to late charges and
collection costs, if any, then to accrued interest and then to principal.
Interest payable hereunder shall be calculated for actual days elapsed on the
basis of a 360-day year. All accrued and unpaid interest shall be due and
payable upon maturity of this Note. After maturity or in the event of default,
interest shall continue to accrue on the Note at the rate set forth above and
shall be payable on demand of the Lender.
The outstanding principal amount of this Note may be prepaid in whole or in
part without any prepayment penalty or premium at any time or from time to time
by Borrower upon notice to the Lender; provided, that any prepayment shall be
applied first to any interest due to the date of such prepayment on this Note
and thereafter shall be applied to the installments of principal hereunder in
the inverse order of maturity.
Notwithstanding anything in this Note, the interest rate charged hereon shall
not exceed the maximum rate allowable by applicable law. If any stated interest
rate herein exceeds the maximum allowable rate, then the interest rate shall be
reduced to the maximum allowable rate, and any excess payment of interest made
by Borrower at any time shall be applied to the unpaid balance of any
outstanding principal of this Note.
An event of default hereunder shall consist of:
(i) a default in the payment by the Borrower to the Lender of principal or
interest under this Note as and when the same shall become due and payable;
(ii) an event of default by the Borrower under any other obligation,
instrument, note or agreement for borrowed money, beyond any applicable notice
and/or grace period;
(iii) institution of any proceeding by or against the Borrower under any
present or future bankruptcy or insolvency statute or similar law and, if
involuntary, if the same are not stayed or dismissed within sixty (60) days, or
the Borrower's assignment for the benefit of creditors or the appointment of a
receiver, trustee, conservator or other judicial representative for the Borrower
or the Borrower's property or the Borrower's being adjudicated a bankrupt or
insolvent.
Upon the occurrence of an event of default hereunder, this Note shall
automatically without any action or notice by Xxxxxx, be accelerated and become
immediately due and payable, and Lender shall have all of the rights and
remedies provided for in the Loan Documents or otherwise available at law or in
equity, all of which remedies shall be cumulative.
Neither the reference to nor the provisions of any agreement or document
referred to herein shall affect or impair the absolute and unconditional
obligation of the Borrower to pay the principal of and interest on this Note as
herein provided.
Any action, suit or proceeding where the amount in controversy as to at least
one party, exclusive of interest and costs, exceeds $100,000 ("Summary
Proceeding"), arising out of or relating to the Loan Documents, or the breach,
termination or validity thereof, shall be litigated exclusively in the Superior
Court of the State of Delaware (the "Delaware Superior Court") as a summary
proceeding pursuant to Rules 124-131 of the Delaware Superior Court, or any
successor rules (the "Summary Proceeding Rules"). Each of the parties hereto
hereby irrevocably and unconditionally (i) submits to the jurisdiction of the
Delaware Superior Court for any Summary Proceeding, (ii) agrees not to commence
any Summary Proceeding except in the Delaware Superior Court, (iii) waives, and
agrees not to plead or to make, any objection to the venue of any Summary
Proceeding in the Delaware Superior Court, (iv) waives, and agrees not to plead
or to make, any claim that any Summary Proceeding brought in the Delaware
Superior Court has been brought in an improper or otherwise inconvenient forum,
(v) waives, and agrees not to plead or to make, any claim that the Delaware
Superior Court lacks personal jurisdiction over it, (vi) waives its right to
remove any Summary Proceeding to the federal courts except where such courts are
vested with sole and exclusive jurisdiction by statute and (vii) understands
and agrees that it shall not seek a jury trial or punitive damages in any
Summary Proceeding based upon or arising out of or otherwise related to the Loan
Documents waives any and all rights to any such jury trial or to seek punitive
damages.
In the event any action, suit or proceeding where the amount in controversy as
to at least one party, exclusive of interest and costs, does not exceed $100,000
(a "Proceeding"), arising out of or relating to the Loan Documents or the
breach, termination or validity thereof is brought, the parties to such
Proceeding agree to make application to the Delaware Superior Court to proceed
under the Summary Proceeding Rules. Until such time as such application is
rejected, such Proceeding shall be treated as a Summary Proceeding and all of
the foregoing provisions of this Section relating to Summary Proceedings shall
apply to such Proceeding.
If a Summary Proceeding is not available to resolve any dispute hereunder, the
controversy or claim shall be settled by arbitration conducted on a confidential
basis, under the U.S. Arbitration Act, if applicable, and the then current
Commercial Arbitration Rules of the American Arbitration Association (the
"Association") strictly in accordance with the terms of the Loan Documents and
the substantive law of the State of Delaware. The arbitration shall be
conducted at the Association's regional office located closest to the Lender's
principal place of business by three arbitrators, at least one of whom shall be
knowledgeable in general business matters and one of whom shall be an attorney.
Judgment upon the arbitrators' award may be entered and enforced in any court of
competent jurisdiction. Neither party shall institute a proceeding hereunder
unless at least 60 days prior thereto such party shall have given written notice
to the other party of its intent to do so.
Neither party shall be precluded hereby from securing equitable remedies in
courts of any jurisdiction, including, but not limited to, temporary restraining
orders and preliminary injunctions to protect its rights and interests but such
remedies shall not be sought as a means to avoid or stay arbitration or a
Summary Proceeding.
The Borrower hereby waives presentment, demand, protest and notice of dishonor
and protest, and also waives all other exemptions; and agrees that extension or
extensions of the time of payment of this Note or any installment or part
thereof may be made before, at or after maturity by agreement by the Lender.
Upon default hereunder the Lender shall have the right to offset the amount owed
by the Borrower against any amounts owed by the Lender in any capacity to the
Borrower, whether or not due, and the Lender shall be deemed to have exercised
such right of offset and to have made a charge against any such account or
amounts immediately upon the occurrence of an event of default hereunder even
though such charge is made or entered on the books of the Lender subsequent
thereto. The Borrower shall pay to the Lender, upon demand, all costs and
expenses, including, without limitation, attorneys' fees and legal expenses,
that may be incurred by the Lender in connection with the enforcement of this
Note.
Notices required to be given hereunder shall be deemed validly given (i) three
business days after sent, postage prepaid, by certified mail, return receipt
requested, (ii) one business day after sent, charges paid by the sender, by
Federal Express Next Day Delivery or other guaranteed delivery service, (iii)
when sent by facsimile transmission, or (iv) when delivered by hand:
If to the Lender: Safeguard Delaware, Inc.
800 The Safeguard Building
000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attn: Chief Financial Officer
If to the Borrower: Xxxx Xxxxxx
000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
or to such other address, or in care of such other person, as the holder or the
Borrower shall hereafter specify to the other from time to time by due notice.
Any failure by the Lender to exercise any right hereunder shall not be
construed as a waiver of the right to exercise the same or any other right at
any time. No amendment to or modification of this Note shall be binding upon
the Lender unless in writing and signed by it. Any provision hereof found to be
illegal, invalid or unenforceable for any reason whatsoever shall not affect the
validity, legality or enforceability of the remainder hereof. This Note shall
apply to and bind the successors of the Borrower and shall inure to the benefit
of the Lender, its successors and assigns.
This Note shall be governed by and interpreted in accordance with the laws of
the State of Delaware.
IN WITNESS WHEREOF, the Borrower, intending to be legally bound hereby, has
duly executed this Term Note as of the date first written above.
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Xxxx Xxxxxx
