47
NOTE
$535,000 Baltimore, Maryland
August 29, 1996
FOR VALUE RECEIVED, the undersigned (the "Borrower"), an
employee of a subsidiary of Xxxx Xxxxx, Inc. (the "Company"),
promises to pay to the order of the Company, at the offices of
the Company in Baltimore, Maryland, the principal sum of FIVE
HUNDRED THIRTY FIVE THOUSAND DOLLARS ($535,000), with interest on
the unpaid balance hereof from the date hereof until paid in full
at the rate of seven percent (7%) per annum.
This Note has been issued pursuant to the Xxxx Xxxxx, Inc.
1996 Equity Incentive Plan (the "Plan") and an Executive
Convertible Debenture Purchase and Loan Agreement of even date
herewith, by and between the Borrower and the Company, to which
reference is made for further description of the rights and
obligations specified herein and of certain other rights and
obligations of the Borrower and the Company which affect the
terms and provisions of this Note.
Interest on the unpaid balance hereof shall be paid on the
first anniversary of the date hereof, and, thereafter, on each
succeeding anniversary of the date hereof and at maturity, until
the principal of this Note shall be paid in full.
The principal sum outstanding hereunder and all accrued and
unpaid interest thereon shall be due and payable on August 29,
2000. Twenty-five percent (25%) of the initial principal amount
due hereunder, together with accrued interest thereon, shall be
forgiven at the end of each of the first four anniversaries of
the Employee's employment by the Company or a subsidiary of the
Company.
Prepayment of principal may be made in the sole discretion
of the Borrower in whole or in part, at any time or from time to
time, without penalty.
It shall constitute a default under this Note if the
principal or any interest thereon is not paid when due and
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payable or if the Borrower shall, FOR ANY REASON, cease to be
employed by the Company or one of its subsidiaries or affiliates.
Upon any default by the Borrower hereunder that shall remain
uncured after ten (10) days written notice from the Company to
the Borrower, the Company may declare the unpaid and previously
unforgiven principal sum of this Note, together with all accrued
and unpaid interest to be due and immediately payable.
Notwithstanding the foregoing, if the Borrower shall cease to be
so employed by reason of the Company's termination of the Employee's
employment without Cause, as defined below, or the
death, disability (as defined in the Company's then applicable
long-term disability plan) or retirement in accordance with the
Company's then applicable retirement plan, the Company may not
declare the unpaid principal sum of this Note, together with all
accrued and unpaid interest, to be due and payable prior to the
last day of the seventh month following the later of (i) such
termination of employment or (ii) the date which is 30 days after
the 1997 annual meeting of the stockholders of the Company.
The term "Cause" as used herein shall mean (i) failure by
the Employee to perform the Employee's duties or follow the
reasonable directions of the Board of Directors of the Company;
(ii) fraud, embezzlement, misappropriation; or any gross or
wilful misconduct of the Employee in connection with his
employment by the Company; (iii)the Employee being adjudicated a
bankrupt, making an assignment for the benefit of creditors,
being declared insolvent or otherwise availing Employee (except
as a creditor) of any bankruptcy or insolvency law, whether now
or hereafter enacted; (iv) any violation of any statutory or
common law fiduciary duty or duty of loyalty to the Company or
any of the Company's clients; (v) any finding or adjudication by
a court, government agency or regulatory authority (including,
without limitation, the United States Securities and Exchange
Commission, the National Association of Securities Dealers, Inc.,
and any state securities commission) that the Employee has
violated any law, rule or regulation relating to the regulation
of investment advisers or securities, which finding or
adjudication, in the reasonable judgment of the Board, could have
a significant adverse effect on the reputation or business of the
Company or any of its affiliates; (vi) any order, judgment or
decree (whether entered by consent or after trial or
adjudication) of any court, government agency or regulatory
authority which censures or imposes any sanctions on the Employee
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in connection with investment broker, investment advisory or
securities related activities or which enjoins, bars, suspends or
otherwise limits the Employee from acting as a securities
analyst, securities broker, investment adviser, an advisory
affiliate or associated person of a securities broker-dealer or
of an investment adviser, or from engaging in any activity in
connection with the purchase or sale of securities; (vii) the
reasonable determination by the Board that the Employee has
committed an act which, in the Board's reasonable opinion, after
investigation, is reasonably likely to lead to any such order,
judgment or decree; (viii) substance abuse; or (ix) conviction of
a criminal offense punishable by imprisonment (whether or not the
Employee is, in fact, imprisoned) or the entry of a guilty plea
in any such proceeding.
The obligation represented by this Note is secured by a
certain Pledge Agreement of even date herewith by and between the
Borrower and the Company.
The Borrower waives all exemptions to the extent permitted
by law, diligence in collection, demand, presentment for payment,
protest, and notice of protest and non-payment.
This Note shall be a sealed instrument and construed under
the laws of the State of Maryland, other than the conflicts of
laws provisions thereof.
Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx (SEAL)