1
EXHIBIT 10.10
FORM OF
PROMISSORY NOTE
[__________ __, ____]
Newton, Massachusetts
$[______________]
FOR VALUE RECEIVED, the undersigned ("Debtor") hereby promises to pay to MCK
Communications, Inc, a Delaware corporation ("Payee"), at such place or places
as may be specified by Payee or any holder hereof, in legal tender of the United
States of America, the principal amount of $[_________] (the "Principal"), with
interest at the rate of six percent (6%) per annum, compounded annually, on the
unpaid balance. The Debtor shall pay to Payee, within ten (10) days after
receipt thereof, the net after-tax proceeds from all sales of the Debtor's
shares of the Common Stock, par value $.15 per share, of MCK Communications,
Inc. purchased with the proceeds of the Note, in reduction of Principal until
such time as the Principal has been repaid in full, and in connection with each
such payment shall pay accrued but unpaid interest on the amount so prepaid. For
purposes hereof, net after-tax proceeds refers to the amount received by the
Debtor upon any sale of such shares, less brokerage commissions or underwriting
discounts, other expenses of every kind, including documentary, excise and other
taxes, if any, directly relating to the sale and an amount equal to the federal,
state and local taxes on any gain from such sale (as determined by multiplying
the amount of such gain by the combined maximum federal, state and local tax
rate applicable to the sale of such shares by the Debtor, taking into account
the holding period for such shares and any federal income tax deduction for
state and local income taxes ). In any event, any principal then unpaid shall be
due and payable, with accrued interest thereon, on the earlier of (1) the fifth
anniversary of the date hereof and (b) the date sixty (60) days after Debtor's
termination for any reason as an employee of Payee (the "Repayment Date").
This Note is subject to the terms of and the payment hereof is secured by
a certain Pledge Agreement dated as of the date hereof by and between Debtor and
Payee (the "Pledge Agreement").
In case an Event of Default, as defined in the Pledge Agreement, shall
occur, the aggregate unpaid balance of Principal and accrued interest may be
declared to be due and payable in the manner and with the effect provided in the
Pledge Agreement. The obligation of the undersigned Debtor to pay the Recourse
Amount (as hereinafter defined) shall be absolute and unconditional, and the
Payee shall have full recourse against the Debtor's assets (including, but not
limited to, the collateral pledged pursuant to the Pledge Agreement) to recover
the Recourse Amount. The "Recourse Amount" as of any time shall mean twenty-five
percent (25%) of the original Principal reduced by twenty-five percent (25%) of
each payment of Principal made by or on behalf of the Debtor from any source.
Unless otherwise set forth herein
2
or directed by the Debtor, all sums paid by the Debtor or otherwise received by
Xxxxx on account of sums owing hereunder shall first be applied to the Recourse
Amount and only after the Recourse Amount is paid in full, then to other sums
owing hereunder. With respect to amounts due and payable hereunder in excess of
the Recourse Amount, the Payee shall have no recourse against the Debtor or any
of his assets other than the collateral pledged pursuant to the Pledge
Agreement, and Payee shall look only to its rights as provided in the Pledge
Agreement for the repayment of amounts in excess of the Recourse Amount.
Debtor may discharge the obligations undertaken hereby, at any time, by
repaying the aggregate unpaid balance of Principal and accrued interest, without
penalty. Debtor may without penalty, make a partial prepayment of Principal
and/or interest in any amount at any time and may thereby reduce any required
future payment hereunder by the amount of such prepayment.
Debtor expressly waives presentment for payment, protest and demand,
notice of protest, demand and dishonor and expressly agrees that this Note may
be extended from time to time without in any way affecting the liability of
Debtor. No delay or omission on the part of Payee in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Note.
This Note may from time to time be extended by Payee, with or without
notice to Debtor, and any related right may be waived, exchanged, surrendered or
otherwise dealt with, all without affecting the liability of Debtor, in each
case in the sole discretion of Xxxxx.
This Note may not be changed, modified or terminated orally, but only by
an agreement in writing and signed by the Debtor and Xxxxx. This Note shall be
binding upon the successors and assigns of Debtor and inure to the benefit of
Xxxxx and its heirs, successors, endorsees and assigns.
DEBTOR:
---------------------------------
-2-
