EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated July 31, 1997, to be
effective as of August 18, 1997 (the "Effective Date"), by and between RSL
Communications, Ltd. (the "Corporation"), a company organized under the laws of
Bermuda, and Xxxxxx X. Xxxxxxx (the "Employee"), an individual residing at 0000
Xxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxx 00000.
WITNESETH:
WHEREAS, the Corporation desires to employ the Employee and the Employee is
willing to undertake such employment on the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
TERM OF THE AGREEMENT
Section 1.01 Term of the Agreement.
Upon the terms and subject to the conditions set forth in this Agreement,
the Corporation hereby employs the Employee as Vice President of International
Carrier Relations of the Corporation for the period (the "Employment Period")
commencing on the Effective Date and terminating on the third anniversary of the
Effective Date, subject to earlier termination as provided in Article III hereof
or upon the death of the Employee.
ARTICLE II
TERMS CONDITIONS OF THE AGREEMENT
Section 2.01 Services to be rendered by the Employee.
The Employee accepts employment as Vice President of International Carrier
Relations, agrees to be in charge of and responsible for all of the duties
normally associated with said position including, without limitation,
responsibility for all commercial relationships with external carriers,
responsibility for establishing and maintaining a database of global carrier
costs, analysis of the economics of carrier routing for least cost routing
purposes, ongoing analysis of intracompany carrier costs, development and
deployment of a global strategy for all operating entities with respect to
carrier relations, and negotiation and purchase of cable lines. Employee agrees
faithfully and to the best of his abilities to perform such services and such
other services consistent with such position as may from time to time be
assigned to him by the Board of Directors of the Corporation and agrees to
devote all of his business time, skill and attention to such services and to the
affairs of the Corporation. The duties of the Employee also include, from time
to time, service as an officer of a subsidiary or other affiliated entity of the
Corporation, as may be directed by the Chief Executive Officer of the
Corporation. The Employee shall do such traveling as may be required in the
performance of his duties hereunder.
Section 2.02 Compensation and Benefits.
(a) The Corporation shall pay to the Employee, and the Employee shall
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accept from the Corporation, for the Employee's services during the Employment
Period, (i) a salary (the "Base Salary) during each year of the Employment
Period equal to $175,000, payable in accordance with the Corporation's customary
employee payroll policy as in effect from time to time, but not less frequently
than monthly and (ii) a bonus in amounts and payable as provided in Section
2.02(b) hereof. The Corporation shall deduct from the Employee's total annual
compensation withholding taxes and/or any other taxes as may be required by
United States Federal government or any other governmental authorities.
(b) Within 30 days after the Effective Date and within 30 days prior to the
end of each fiscal year during the Employment Period, the Corporation shall
establish a special bonus incentive program (the "Program") for the Employee
pursuant to which the Corporation shall determine reasonable objectives
agreeable to the Employee, based on the Corporation's annual business plan, and
subject to approval of the Corporation's Board of Directors. If Employee attains
such objectives, the Employee shall receive a targeted bonus of 25% of the Base
Salary (the "Special Bonus") with respect to each fiscal year during the
Employment Period commencing with the fiscal year ending December 31, 1997 (on a
pro-rata basis for such first fiscal year), payable not later than 15 business
days following such fiscal year (whether or not such payment date is during the
Employment Period, but subject to Section 2.02(c) below). In the event that the
Board of Directors of the Corporation approves the payment of employee bonuses
under the Program on a semi-annual basis, then the Special Bonus shall be
payable to the Employee in accordance with such basis.
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(c) Unless otherwise provided in Article III the Special Bonus contemplated
by Section 2.02(b) hereof shall not be payable to the Employee if, prior to the
end of the applicable period, the employment of the Employee shall have been
terminated.
(d) During the Employment Period, the Employee shall be entitled to
participate in the Corporation's 1995 Stock Option Plan (the "Plan"), as
amended, pursuant to which participants are awarded options to purchase shares
of the Class A common stock (the "Common Stock") of the Corporation. As of the
Effective Date, the Corporation Shall grant to the Employee stock options (the
"Options"), pursuant to the Plan, to purchase up to an aggregate of 50,000
shares of the Corporation's Common Stock at an exercise price of $0.01 per
share. The Options shall vest over three years in equal portions, such that 1/3
of the Options shall vest at the end of the first year of the Employment Period,
1/3 of the Options, shall vest at the end of the second year of the Employment
Period and 1/3 of the Options shall vest at the end of the third year of the
Employment Period.
(e) The Corporation shall reimburse the Employee, on the Effective Date,
$50,000 for all moving costs, closing costs, traveling and other expenses
incurred by reason of the sale of Employee's principal home in Ohio and purchase
of a home in the tri-state Metropolitan area, including brokerage fees, and all
other fees, costs or expenses incurred by the Employee in connection with the
Employee's relocation from Ohio to the tri-state Metropolitan area; provided,
however, that Employee shall be obligated to return the $50,000 to the
Corporation if, before the first anniversary of the Effective Date, the
Employee's employment is either terminated by the Corporation for "cause"
pursuant to Section 3.03 or by
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the Employee for other than 'Good Reason" as defined in Section 3.04.
(f) For a maximum period of three months, following the Effective Date, the
Corporation shall reimburse the Employee for the reasonable cost of the rental
of a suitable apartment in New York City and for airfare and other reasonable
transportation expenses associated with travel from New York to the Employee's
current residence in Ohio, provided, however, that in no event shall the
Corporation be obligated to reimburse the Employee for more than (i) $3,000 per
month for rental of the apartment (plus the cost of any deposit or rental fee)
or (ii) $4,000 per month for such other reasonable transportation expenses
associated with such travel. In addition, the Corporation shall reimburse the
Employee for the reasonable cost of commuting from his new home in the tri-state
Metropolitan area to the Corporation's offices in New York City, provided,
however, that in no event shall the Corporation be obligated to reimburse the
Employee for more than $350 per month for such costs of commuting. All such
reimbursements shall be made by the Corporation upon the presentation of
appropriate documentation therefor.
(g) At any time, at the Employee's request, within 90 days of the Effective
Date (the "Loan Date"), the Corporation shall promptly upon receipt of such
request provide a loan to the Employee in an amount up to $100,000 (the "Loan").
The Loan shall accrue interest at the lowest applicable Federal rate on the Loan
Date. The Loan plus any accrued interest thereon shall be immediately due and
payable on the earliest of (i) the fifth year anniversary of the Effective Date,
(ii) the date of sale of any of the Employee's common stock of the Corporation
received by the Employee from the Corporation as a result of exercising
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any of the Options granted to the Employee the Plan and (iii) the seventh
business day following the date of termination of the Employee's employment if
the Employee's employment is either terminated by the Corporation for "cause"
pursuant to Section 3.03 or by the Employee for other than "Good Reason" as
defined in Section 3.04. The Employee shall execute a promissory note, in the
form of Exhibit A attached hereto, evidencing the Loan.
(h) The Employee shall be entitled to participate, on the same basis,
subject to the same qualifications, as other similar executive officers of the
Corporation, in any of the Corporation's pension, profit sharing, 401(k) or
similar plan, savings, bonus, life insurance, health insurance, dental
insurance, disability insurance, hospitalization and other fringe benefit plans
and policies in effect with respect to employees of the Corporation.
(i) The Corporation shall reimburse the Employee for all reasonable
out-of-pocket expenses incurred by Employee in connection with the performance
of his duties hereunder. All such reimbursements shall be made by the
Corporation upon the presentation of appropriate documentation therefor.
(j) During the Employment Period, the Employee shall be entitled to
vacations of 20 business days per annum, and all holidays observed by the
Corporation, during which times the Employee shall be entitled to his full
compensation.
6
ARTICLE III
TERMINATION
Section 3.01 Disability. If, during the Employment Period, the Employee
shall be unable substantially to perform the duties required of him pursuant to
the provisions of this Agreement due to any physical or mental Disability (as
defined below) for a period of 60 days in any 12 consecutive months, the
Corporation shall have the right to terminate the Employee's employment pursuant
to this Agreement by giving not less than 15 days' written notice to the
Employee, at the end of which time, if such disability has continued, the
Employee's employment shall be terminated. The Employee shall retain his status
and continue to receive his Base Salary as provided in Section 2.02(a)(i) and
benefits hereunder during the period prior to any termination hereunder because
of a disability. As used in this Agreement, the term "Disability" shall mean the
inability of the Employee to perform his duties under this Agreement, as
determined by an independent physician, due to any mental, physical or
psychological injury, illness or disease.
Section 3.02 Death. In the event of the Employee's death during the
Employment Period, this Agreement shall terminate as of the date of such death
and the Corporation shall no longer be under any obligation to the Employee or
his heirs, executors or legal representatives pursuant to this Agreement except
for (i) any salary accrued and unpaid up to the date of the Employee's death and
(ii) any unreimbursed expenses pursuant to Section 2.02(i) to the date of death.
Section 3.03 Termination For Cause. The Corporation shall have the right to
7
terminate the Employee's employment pursuant to this Agreement for "cause."
"Cause" for termination shall mean (i) the conviction (after trial or upon plea)
of the Employee for a felony under State or federal law of the United States;
(ii) any embezzlement, fraud or dishonesty or commission of an offense involving
money or other property of the Corporation; (iii) the material breach by the
Employee of the provisions of this Agreement, which breach, if capable of being
cured, is not cured within 10 days after written notice by the Corporation
specifying such breach or if not capable of being cured within 10 days, if the
Employee has not commenced good faith efforts to cure such breach within 10 days
and, in any event, such breach is not cured within 30 days after such written
notice; (iv) the Employee's failure after written notice to perform any of his
material duties or to comply with an order of the Board of Directors; or (v)
gross negligence in the performance of the Employee's duties.
In the event the Corporation terminates the Employee for "cause" under this
provision, then this Agreement shall terminate and the Corporation shall have no
further obligation hereunder; provided, however, the Corporation shall pay the
Employee all Base Salary accrued and any unreimbursed expenses owed as of the
date of termination.
Section 3.04 Employee Termination For Good Reason. The Employee shall have
the right, upon 30 days' prior written notice to the Corporation, to terminate
his employment pursuant to this Agreement for "Good Reason." "Good Reason" for
termination hereunder means the material breach by the Corporation of the
provisions of this Agreement, which breach, if capable of being cured, is not
cured within 15 days after written notice by the Employee specifying such breach
or if not capable of being cured within 15 days, if the
8
Corporation has not commenced good faith efforts to cure such breach within 15
days and, in any event, such breach is not cured within 45 days after such
written notice. In the event of a failure to cure within 45 days of notice of
breach, the notice of breach shall be regarded as notice of termination by the
Employee and the Employer may terminate employment for "Good Reason" at the end
of such 45 day period.
In the event the Employee terminates for "Good Reason" under this
provision, then the Corporation shall pay to the Employee the Base Salary that
would otherwise have been payable to the Employee for the 12 month period
commencing with termination of Employment or for the remaining term of the
Employment Period, whichever is shorter, payable in accordance with the terms of
Section 2.02(a)(i) hereof and the Employee shall continue to be covered by all
health and disability benefits, at the cost of the Corporation, for a period of
90 days from such termination or the remaining term of the Employment Period,
whichever is longer.
Section 3.05 Termination Without Cause. If the Employee's employment
hereunder is terminated by the Corporation, other than for "cause," death or
disability, the Corporation shall pay to the Employee the Base Salary that would
otherwise have been payable to the Employee for the 12 month period commencing
with the termination of Employment or for the remaining term of the Employment
Period, whichever is shorter, payable in accordance with the terms of Section
2.02(a)(i) hereof and the Employee shall continue to be covered by all health
and disability benefits for a period, at the cost of the Corporation, of 90 days
from such termination.
9
ARTICLE IV
CONFIDENTIALITY
Section 4.01 Confidential Information.
The Employee shall hold in a fiduciary capacity for the benefit of the
Corporation and each of the Corporation's parent, subsidiaries or affiliates
(the "Affiliated Entities") all information, knowledge, and data relating to or
concerned with its and their operations, business and affairs, including,
without limitation, information disclosed to the Employee or known, learned,
created or observed by him as a consequence of or through this Agreement, not
generally known in the relevant trade or industry or known to the Employee prior
to his employment by the Corporation, about the Corporation's business
activities, services and processes, including, without limitation, information
concerning advertising, sales promotion, publicity, sales data, research,
telecommunications technology, finances, accounting, methods, processes,
business plans (including prospective or pending licensing applications or
investments in license holders or applicants), client or supplier lists and
records, potential client or supplier lists, and client or supplier billing
(collectively, the "Confidential Information"), and, except as otherwise
specifically provided in this Agreement, the Employee shall not, during the
Employment Period or at any time thereafter, use, disclose or divulge any
Confidential Information, knowledge or data, including, without limitation,
trade secrets of the Corporation or an Affiliated Entity, relating to the
Corporation or an Affiliated Entity or any of its or their respective customers
or any producer, manufacturer, licensor, supplier or any other person providing
services or goods to the Corporation or an Affiliated Entity or with whom any of
them does business, to any person, firm or corporation other than to the
10
Corporation or the Affiliated Entities or their designees or except as may
otherwise be required in connection with the business and affairs of the
Corporation and the Affiliated Entities; provided, however, that such Formation
shall not include (i) information which at the time of disclosure or thereafter
is or becomes part of the public domain, knowledge or literature other than
through the Employee's disclosure; (ii) information required by law to be
disclosed; or (iii) as may be permitted by the terms of this Agreement. It is
the specific intent of the Corporation and the Employee that each and all of the
provisions set forth hereinabove shall be valid and enforceable as specifically
set forth hereinabove; and that the Employee acknowledges that the Corporation's
remedies at law are likely to be inadequate, and the Employee consents to the
application of the equitable remedies of specific performance to enforce the
Corporation's rights hereunder. Further, should any person seek to legally
compel the Employee (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demands or otherwise) to
disclose any Confidential Information, the Employee shall provide the
Corporation with prompt notice followed up in writing so that the Corporation
may seek a protective order or other appropriate remedy, failing which the
Employee shall be entitled to make such disclosure as is legally required. In
any event the Employee shall use his best efforts with the advice of counsel to
furnish only that portion of the Confidential Information which is legally
required and, with the cooperation of the Corporation, will exercise his best
efforts to obtain reliable assurance that confidential treatment will be
accorded information so disclosed. In the event of a breach or a threatened
breach by the Employee of the provisions of this Section 4.01, the Corporation
may, in addition to any other remedies it may have, obtain injunctive relief in
any court of appropriate
11
jurisdiction to enforce this Section 4.01. The provisions of this Section 4.01
shall survive the expiration or termination, for any reason, of this Agreement
and shall be separately enforceable. The Employee hereby assigns to the
Corporation any and all rights the Employee may have or hereafter acquire in any
Confidential Information.
Section 4.02 Corporate Records. All files, records, compilations, reports,
studies, manuals, memoranda, notebooks, documents, correspondence, products and
strategies, costs, and other confidential, secret or proprietary information or
records and similar items relating to the business of the Corporation and the
Affiliated Entities, its subsidiaries and its affiliates, whether prepared by
the Employee or otherwise coming into his possession, are and shall remain the
exclusive property of the Corporation, its subsidiaries and/or its affiliates,
and, to the extent possible, shall be promptly delivered to the Corporation upon
termination of the Employee's employment.
ARTICLE V
NONCOMPETITION AND NONSOLICITATION
Section 5.01 Noncompetition and Nonsolicitation.
(a) Except if terminated by the Corporation without "cause" or if
terminated by the Employee with "Good Reason," the Employee agrees, to the
extent permitted by law, that neither he nor any entity in which he may be
interested as a partner, trustee, director, officer, employee, shareholder,
option holder, lender of money or guarantor (each, an
12
"Employee Affiliate"), during the Employee's employment with the Corporation and
during the period terminating on the earlier to occur of the one year
anniversary of the termination of the Employment Period or the one year
anniversary of the termination the Employee's employment with the Corporation,
whether or not subsequent to the termination of the Employment Period, directly
or indirectly, own, manage, operate, join or control, or participate in the
ownership, management, operation or control of, or be a director or employee of,
or a consultant to, any business, firm or corporation which is conducting any
business which competes in any substantial respect with the business of the
Corporation or an Affiliated Entity as conducted at the date of termination,
including, without limitation, the business of international long distance
telecommunication services engaged in by the Corporation or any Affiliated
Entity in any country where the Corporation, or any Affiliated Entity, conducts
such business at any time during the Employment Period; provided, however, that
the provisions of this Article V shall not apply to investments by the Employee
in shares of stock registered under the Securities Exchange Act of 1934 which
shall constitute less than one percent (1%) of the outstanding shares of such
class of stock; and, provided, further, that, subject to the Corporation's
written approval, which approval shall not be unreasonably withheld, the
Employee shall be entitled to be a consultant to a business which may compete in
substantial respect with the business of the Corporation if such competing
business is in a geographic location where the Corporation does not conduct
significant business at such time. It is understood and agreed that any
opportunity directly or indirectly related to any business engaged in by the
Corporation or any Affiliated Entity in any country where the Corporation or any
Affiliated Entity conducts such business at any time during the
13
Employment Period shall be deemed a corporate opportunity and the Employee shall
promptly make such opportunity available exclusively to the Corporation.
(b) The Employee agrees that he will not, during the Employment Period and
for one year thereafter (i) persuade or attempt to persuade any producer,
manufacturer, licensor, supplier or any other person providing services or goods
to the Corporation or an Affiliated Entity not to do business with the
Corporation or an Affiliated Entity, as the case may be which may reduce the
amount of business it does with the Corporation or an Affiliated Entity, as the
case may be; (ii) persuade or attempt to persuade any customer or potential
customer not to do business with the Corporation or an Affiliated Entity which
may reduce the amount of business it does with the Corporation or an Affiliated
Entity, as the case may be; (iii) solicit for himself or any person other than
the Corporation or an Affiliated Entity the business of any producer,
manufacturer, licensor, supplier or any other person providing services or goods
to the Corporation or an Affiliated Entity or any customer or potential customer
who did business with the Corporation or an Affiliated Entity within one year
prior to the termination of the Employment Period; (iv) persuade or attempt to
persuade any employee of the Corporation or an Affiliated Entity, or any
individual who was an employee of the Corporation or an Affiliated Entity during
the one year prior to termination of the Employment Period, to leave the
Corporation's, or such affiliate's employ or to become employed by any person
other than the Corporation or an Affiliated Entity; or (v) unless the Employee
has received the Corporation's written approval, which approval shall not be
unreasonably withheld, perform any consulting services for any person,
partnership, corporation, or other entity who has engaged in business with the
Corporation or an Affiliated
14
Entity during the one year immediately preceding termination of the Employment
Period.
Section 5.02 Remedies.
The Employee acknowledges and agrees that, because of the unique and
extraordinary nature of his services, any breach of the provisions of Article IV
or Article V will cause irreparable injury and incalculable harm to the
Corporation or an Affiliated Entity and that the Corporation shall, accordingly,
be entitled to injunctive or other equitable relief.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Notices.
All notices and other communications provided for or permitted hereunder
shall be made by hand delivery, first class mail (registered or certified mail,
return receipt requested), telex, telecopier or commercial courier guaranteeing
next day delivery addressed as follows:
(a) if to the Corporation, at RSL Communications, N. America, Inc. at 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxxx X. Xxxxxxx,
Esq.,
(b) if to the Employee, at his address set forth above; or at such other
address of which either party shall have given notice to the other in the manner
herein provided.
All such notices and communications shall be deemed to have been duly given at
the time
15
delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged (verbally or electronically), if telecopied;
and the next business day after timely delivery to the courier, if sent by
commercial courier guaranteeing next day delivery.
Section 6.02 Entire Agreement; Amendment and Waiver.
All prior or contemporaneous agreements, contracts, promises,
representations and statements, if any, among the parties hereto, or their
representatives are merged into this Agreement and this Agreement shall
constitute the entire agreement between them. Any term of this Agreement may be
amended and the observance of any term hereof may be waived (either
prospectively or retroactively and either generally or in a particular instance)
only with the written consent of the party to be charged.
Section 6.03 Severability.
If any provision of this Agreement, or the application thereof in any
circumstances, is held to be invalid, illegal or unenforceable in any respect
for any reason, the validity, legality, enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any
way impaired or affected.
16
Section 6.04 Assignments.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, administrators, executors, personal
representatives, successors and assigns; provided that this Agreement may not be
assigned by Employee unless agreed to in a writing signed by the parties hereto.
Section 6.05 Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to New
York's principles of conflicts of law.
Section 6.06 Withholding.
The Corporation shall be entitled to withhold from amounts payable to the
Employee hereunder such amounts as may be required by applicable law.
Section 6.07 Headings.
The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
Section 6.08 Survival of Provisions.
The provisions of Articles IV and V of this Agreement shall survive the
expiration or termination of this Agreement.
17
Section 6.09 Competence.
The Employee represents and warrants that he is legally able to enter into
and perform his obligations under this Agreement.
Section 6.10 Arbitration.
Subject to Section 5.02 hereof, the parties hereto agree that any dispute
arising out of or relating to this Agreement shall be resolved exclusively by
arbitration through and under the rules of the American Arbitration Association
in New York before an arbitration panel consisting of one arbitrator in
accordance with the rules of the American Arbitration Association. For purposes
of this provision and any action to compel arbitration or to enforce an
arbitration award, the parties consent and submit to the jurisdiction of the
federal and state courts and any applicable arbitral body located within the
State of New York. The results of the arbitration shall be final and the parties
waive all rights of appeal.
Section 6.11 Counterparts.
This Agreement may be executed in any number to counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument.
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
RSL COMMUNICATIONS, LTD.
By /s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: President and CEO
----------------------------
XXXXXX X. XXXXXXX
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
RSL COMMUNICATIONS, LTD.
By
--------------------------
Name: Xxxxxx Xxxxxx
Title: President and CEO
/s/ Xxxxxx X. Xxxxxxx
----------------------------
XXXXXX X. XXXXXXX
19
Exhibit A
PROMISSORY NOTE
$100,000.00 New York, New York
July _, 1997
FOR VALUED RECEIVED, XXXXXX X. XXXXXXX ("Maker"), an individual residing at
00-00 Xxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxx 00000, hereby promises to pay to the
order of RSL COMMUNICATIONS, LTD., a Bermuda corporation ("Holder"), the
principal amount of [ONE HUNDRED THOUSAND DOLLARS ($100,000)] in lawful money of
the United States of America, plus any accrued but unpaid interest through the
date of maturity hereof.
1. Payment. The principal amount and interest on this promissory note
"Note") shall be due and payable on the date (the "Maturity Date") which is the
earlier of (i) August 11, 2002, (ii) the date of the sale of any of Maker's
common stock of the Corporation received by Maker from the Corporation as a
result of exercising any of the options granted to Maker, pursuant to the
Employment Agreement (the "Employment Agreement"), dated as of the date hereof,
between Maker and Holder, and (iii) the seventh business day following the date
of termination of Maker's employment in accordance with, and by the reasons set
forth in, Section 2.02(g) of the Employment Agreement.
2. Interest. The Maker shall pay interest on an annual basis from the date
of this Note on the unpaid principal sum at the lowest applicable Federal rate
of interest on the date hereof. In no event shall the interest charged hereunder
exceed the maximum permitted by law. Interest shall not compound, and shall
accrue as of the date payment is due.
3. Place of Payment. Payments of principal, interest and any other amounts
hereunder are to be made to Holder at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX
00000, or such other place as Holder shall designate to Maker in writing.
4. Prepayment. This Note may be prepaid, in whole or in part, at any time
or from time to time, without premium or penalty.
5. Payment not on a Business Day. If any payment of principal of or
interest on this Note shall become due on a Saturday, Sunday or a public holiday
under the laws of the State of New York or the United States of America, then
such payment shall be made on the next succeeding business day without penalty.
6. Late Payment Charge. In the event that Maker fails to make any payment
of principal or interest under this Note on or prior to the Maturity Date, then
the principal amount plus accrued interest under this Note shall bear interest
from such date at a rate per annum equal to 10% compounded monthly.
Notwithstanding the foregoing, the obligation of Maker to make payments of
interest shall be subject to the limitation that payments of interest shall not
be required to be made to Holder to the extent that Holder's receipt thereof
would not be permissible under the law or laws applicable to Holder limiting
rates of interest which may be charged or collected by Holder.
7. Expenses. Maker shall pay all reasonable costs and expenses, including
reasonable attorneys' fees and expenses, incurred by Holder in collecting or
enforcing this Note.
8. Successors and Assigns. This Note shall inure to the benefit of and be
enforceable by Holder and its successors and assigns and shall be binding and
enforceable against Maker and his heirs and assigns. Notwithstanding the
foregoing, Maker shall not assign its obligations hereunder without the prior
written consent of Holder.
9. Severability. It is the desire and intent of the parties that the
provisions of this Note be enforced to the fullest extent permissible under the
law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any provision of this Note would be held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, such provision,
as to such jurisdiction, shall be ineffective, without invalidating the
remaining provisions of this Note or affecting the validity or enforceability of
such provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Note or
affecting the validity or enforceability of such provision in any other
jurisdiction.
10. Waivers. (a) Maker hereby waives presentment, demand for payment,
notice of dishonor, notice of protest, and protest in connection with the
delivery, acceptance, performance, default, endorsement or guaranty of this
Note.
(b) No delay by Holder in exercising any power or right hereunder shall
operate as a waiver of any power or right, nor shall any single or partial
exercise of any power or right
-2-
preclude other or further exercise thereof, or the exercise of any other power
or right hereunder or otherwise. No waiver or modification of the terms hereof
shall be valid unless set forth in writing by Holder.
11. Modification. No modification, alteration or change of any of the
provisions hereof shall be effective unless in writing and signed by Maker and
Holder and only to the extent set forth therein.
12. Governing Law, Jurisdiction, Waiver of Jury Trial. This Note shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to conflicts of law principles thereof. For purposes of
this Note, Maker hereby irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of New York, sitting in New York County, and the courts
of the United States for the Southern District of New York. Maker irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court, any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum and
the right to object, with respect to any such suit, action or proceeding brought
in any such court, that such court does not have jurisdiction over such party.
In any such suit, action or proceeding, Maker waives, to the fullest extent it
may effectively do so, personal service of any summons, complaint or other
process and agrees that the service thereof may be made by certified or
registered mail. Maker agrees that a final judgment in any such action or
proceeding may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Maker hereby waives all right to trial by jury
in any action, suit or proceeding brought to enforce or defend any rights or
remedies under this Note.
13. Confessed Judgment. Upon the occurrence of a default hereunder, Maker
hereby authorizes any attorney designated by Holder or any clerk of any court of
record to appear for Maker in any court of record and confess judgment against
Maker, without prior hearing, in favor of Holder for, and in an amount equal to,
the full amount then due and payable by Maker hereunder, all other amounts then
due and payable by Maker to Holder under the provisions of this Note, costs of
suit and attorneys' fees of 15% of the amount of such obligations. In connection
therewith, Maker hereby releases, to the extent permitted by applicable laws,
all errors and all rights of exemption, appeal, stay of execution, inquisition,
and other rights to which Maker may otherwise be entitled under the applicable
laws now in force and
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which may hereafter be enacted, including, without limitation, those of the
United States of America. The authority and power to appear for and enter
judgment against Maker shall not be exhausted by one or more exercises thereof
or by any imperfect exercise thereof and shall not be extinguished by any
judgment entered pursuant thereto. Such authority may be exercised on one or
more occasions or from time to time in the same or different jurisdictions as
often as Holder shall deem necessary and desirable, for all of which this Note
shall be sufficient warrant.
IN WITNESS WHEREOF, Maker has executed this Note as of the date first above
written.
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