FIRST AMENDED REVOLVING NOTE
Wayne, Pennsylvania
$5,000,000 April 2, 1997
FOR VALUE RECEIVED, Tangram Enterprise Solutions, Inc., a Pennsylvania
corporation (the "Borrower"), having an office at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, hereby promises to pay to the order of
Safeguard Scientifics (Delaware), Inc., a Delaware corporation (the "Lender") or
its registered assigns, at the Lender's office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other place in the continental United
States as the Lender may designate in writing, upon demand, in lawful money of
the United States, and in immediately available funds, the principal sum of up
to Five Million and no/100 Dollars ($5,000,000), or so much thereof as shall
have been advanced by the Lender to the Borrower as hereinafter set forth and
then be outstanding, and to pay interest thereon monthly in arrears on the first
business day of each calendar month at an annual rate equal to the announced
prime rate of Midlantic Bank, N.A. of Philadelphia, Pennsylvania (the "Prime
Rate") plus one percent (1%). All amounts advanced hereon, but not to exceed
$5,000,000 at any one time outstanding in the aggregate, shall be so advanced
upon the request of the Borrower. All amounts so advanced hereon and all
payments made on account of the principal hereof shall be recorded in the books
of the Lender, which records shall be final and binding, but failure to do so
shall not release the Borrower from any of its obligations hereunder.
This Note is issued in substitution for a Revolving Note dated June 18,
1996, and shall evidence all outstanding indebtedness thereunder existing as of
the date hereof and any additional indebtedness incurred in the future.
Borrower's obligations under this Note, regardless of whether demand
for payment has been made by ▇▇▇▇▇▇, are subject and subordinate to all of
Borrower's obligations to Wachovia Bank of North Carolina, N.A. ("Wachovia
Bank"), and all liens and security interests granted by ▇▇▇▇▇▇▇▇ to Wachovia
Bank. Upon the occurrence of an event of default by Borrower under any note,
loan agreement or related agreement or instrument between Borrower and Wachovia
Bank, Borrower shall immediately notify Lender, regardless of whether demand for
payment has been made by Lender, and Lender shall not exercise any of its rights
or remedies against ▇▇▇▇▇▇▇▇, and Borrower shall not make any payments to Lender
hereunder, for a period of 90 days thereafter without the consent of Wachovia
Bank. So long as there is no uncured event of default outstanding under any
Wachovia Bank loan, Borrower may make all required payments to Lender under this
Note.
The unpaid principal balance of the Note shall be paid on the date
which is one year and one month after the date of demand for payment by the
Lender; provided that, in the event of a sale of substantially all of the assets
of Borrower, a merger or consolidation of Borrower with or into a third party,
or the acquisition of a majority of Borrower's outstanding voting stock by a
"person" (as such term is defined under Section 13 of the Securities Exchange
Act of 1934, as amended) other than Safeguard Scientifics, Inc. or any of its
wholly-owned subsidiaries, the unpaid principal balance of the Note shall be
paid on the date which is five days after the date of demand for payment by the
Lender. In addition, upon the closing of a sale of debt or equity securities by
the Company to any third party, the Company shall apply the proceeds (net of
underwriting discounts and commissions) in excess of $2,500,000 first to the
repayment of the then outstanding obligations under this Note.
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. 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.
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Unless there is an uncured event of default under any Wachovia Bank
loan, the outstanding principal amount of this Note may be prepaid by the
Borrower upon notice to the Lender in whole at any time or in part from time to
time without any prepayment penalty or premium; provided, that upon such payment
any interest due to the date of such prepayment on such prepaid amount shall
also be paid.
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 the 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 any event of default, interest shall accrue on the
outstanding balance of this Note at the Prime Rate plus three percent (3%), the
entire unpaid principal amount of this Note and all unpaid interest accrued
thereon shall, at the sole option of the Lender, without notice, become
immediately due and payable, and the Lender shall thereupon have all the rights
and remedies provided hereunder or now or hereafter available at law or in
equity.
Any action, suit or proceeding where the amount in controversy as to at
least one party, exclusive of interest and costs, exceeds $1,000,000 ("Summary
Proceeding"), arising out of or relating to this Agreement, 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 this Agreement
waives any and all rights to any such jury trial or to seek punitive damages.
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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 $1,000,000 (a "Proceeding"), arising out of or relating to this Agreement
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 this
Agreement and the substantive law of the State of Delaware. The arbitration
shall be conducted at the Association's regional office located closest to the
Borrower's principal place of business by three arbitrators, at least one of
whom shall be knowledgeable in software design, programming and implementation
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 shall not be sought as a means to avoid or stay arbitration or
Summary Proceedings.
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 Scientifics (Delaware), Inc.
800 The Safeguard Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Chief Financial Officer
If to the Borrower: Tangram Enterprise Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer
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.
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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, by its duly authorized officer
intending to be legally bound hereby, has duly executed this First Amended
Revolving Note as of the date first written above.
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