EXHIBIT 10.22
BREAKAWAY SOLUTIONS, INC.
INCENTIVE STOCK OPTION AGREEMENT
BREAKAWAY SOLUTIONS, INC. (the "Company") hereby grants this 11th day of
December, 1998 (the "Grant Date") to Xxxxxx Xxxxxx (the "Employee"), an option
to purchase a maximum of ninety four thousand one hundred sixteen (94,116)
shares (the "Option Shares") of the Company's Common Stock, par value $.0001 per
share ("Common Stock") at the price of four dollars and twenty-five cents
($4.25) per share, on the following terms and conditions:
1. GRANT UNDER 1998 STOCK PLAN.
This option is granted pursuant to and is governed by the Company's 1998
Stock Plan (the "Plan"), the terms and conditions of which are
incorporated herein by reference, and, unless the context otherwise
requires, terms used herein shall have the same meaning as in the Plan.
Determinations made in connection with this option pursuant to the Plan
shall be governed by the Plan as it exists on the Grant Date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS.
This option is intended to qualify as an incentive stock option ("ISO")
under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). However, the foregoing shall not be construed as invalidating
this option to any extent in the event all or part of it fails, for any
reason, to so qualify, and to the extent it does not so qualify this
option shall be treated for all purposes as a Non-Qualified Option under
the Plan. This option is in addition to any other options heretofore or
hereafter granted to the Employee by the Company or any Related
Corporation (as defined in the Plan), but a duplicate original of this
instrument shall not effect the grant of another option.
3. VESTING OF OPTION.
Except as otherwise provided in this Agreement, and subject to all other
terms and conditions of this Agreement, this option may be exercised
prior to the tenth (10th) anniversary of the Grant Date (the "Expiration
Date") in installments for not more than the number of Option Shares
which are vested as hereinbelow provided:
(a) CONTINUED EMPLOYMENT FOR ONE TO FOUR YEARS.
Twenty three thousand five hundred twenty nine (23,529) shares will vest
on the first anniversary of the Grant Date, and the balance of the Option
Shares will vest in equal monthly installments of one thousand nine
hundred sixty and three quarters (1,960.75) shares, each, over the
three-year period immediately following such first anniversary date.
(b) TRIGGERING EVENT.
All unvested shares shall immediately become vested in full upon the
occurrence of any of the following events (each, a "Triggering Event"):
(a) a public offering by the Company of shares of its Common Stock, (b) a
sale of all or substantially all of the Company's assets or all or
substantially all of the shares of its capital stock, (c) a consolidation
or merger of the Company in which a majority of outstanding shares of the
Company's capital stock are exchanged for securities, cash or other
property of any
other corporation or business entity, (d) a consolidation or merger
involving the Company as a result of which the stockholders of the
Company immediately prior to such event do not own, immediately following
the occurrence of such event, at least a majority of the common stock and
voting power of the entity resulting from such consolidation or surviving
such merger or (e) the liquidation or dissolution of the Company. In
addition, if the Company or stockholders of the Company enter into an
agreement with respect to an event described in (b) thorough (e) of the
preceding sentence, then upon the consummation of such event a Triggering
Event shall be deemed to have occurred upon the date of such agreement
and, regardless of whether the option remains outstanding on the date of
consummation of the Triggering Event, the Employee will be entitled to
exercise the option to the extent the Employee would have been eligible
to do so if a Triggering Event had occurred on the date the agreement was
entered into (and in any event, for a period of at least 30 days after
the consummation of such event).
4. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OTHER THAN FOR CAUSE.
If the Employee ceases to be employed by the Company or any Related
Corporation, other than by reason of death or disability as defined in
Section 5 or termination for Cause as defined in Section 4(c), this
option will continue to vest as set forth in Section 3 for sixty (60)
days from the date Employee ceases employment with the Company or any
Related Corporation. This option shall terminate on the earlier of (i)
ninety (90) days after the date of termination of the Employee's
employment, or (ii) the Expiration Date. In such a case, the Employee's
only rights hereunder shall be those which are properly exercised before
the termination of this option.
(b) TERMINATION FOR CAUSE.
If the employment of the Employee is terminated for Cause (as defined in
Section 4(c)), this option shall terminate upon the Employee's receipt of
written notice of such termination and shall thereafter not be
exercisable to any extent whatsoever.
(c) DEFINITION OF CAUSE.
"Cause" shall mean that the Employee is terminated for one or more of the
following reasons: (i) the Employee's commission of any act of
embezzlement or fraud; or (ii) the Employee's conviction of a felony.
5. DEATH; DISABILITY.
(a) DEATH.
If the Employee ceases to be employed by the Company and all Related
Corporations by reason of his death, this option may be exercised, to the
extent otherwise exercisable on the date which is sixty (60) days after
the date of death, by the estate, personal representative or beneficiary
who has acquired this option by will or by the
laws of descent and distribution, until the earlier of (i) the Expiration
Date or (ii) one hundred eighty (180) days from the date of the
Employee's death.
(b) DISABILITY.
If the Employee ceases to be employed by the Company and all Related
Corporations by reason of his or her disability (as defined in Paragraph
10(B) of the Plan), the Employee shall have the right to exercise this
option, to the extent otherwise exercisable on the date which is sixty
(60) days from the date of termination of employment, until the earlier
of (i) the Expiration Date or (ii) one hundred eighty (180) days from the
date of the termination of the Employee's employment.
(c) EFFECT OF TERMINATION.
At the expiration of the one hundred eighty (180) day period provided in
paragraph (a) or (b) of this Section 5, or the Expiration Date, whichever
is the earlier, this option shall terminate and the only rights hereunder
shall be those as to which the option was properly exercised before such
termination.
6. PARTIAL EXERCISE.
The Employee may exercise this option in part at any time and from time
to time within the above limits, except that the Employee may not
exercise this option for a fraction of a share unless such exercise is
with respect to the final installment of stock subject to this option and
cash in lieu of a fractional share must be paid, in accordance with
Paragraph 13(G) of the Plan, to permit the Employee to exercise
completely such final installment. Any fractional share with respect to
which an installment of this option cannot be exercised because of the
limitation contained in the preceding sentence shall remain subject to
this option and shall be available for later purchase by the Employee in
accordance with the terms hereof.
7. PAYMENT OF PRICE.
(a) PAYMENT. The option price shall be paid in the following manner:
(i) in cash or by check;
(ii) subject to Section 7(b) below, by delivery of shares of the
Company's Common Stock having a fair market value (as
determined by the Committee) equal as of the date of
exercise to the option price;
(iii) by delivery of an assignment satisfactory in form and
substance to the Company of a sufficient amount of the
proceeds from the sale of the Option Shares and an
instruction to the broker or selling agent to pay that
amount to the Company;
(v) by any combination of the foregoing.
(b) LIMITATIONS ON PAYMENT BY DELIVERY OF COMMON STOCK. If the Employee
delivers Common Stock held by the Employee ("Old Stock") to the Company
in full or partial payment of the option price, and the Old Stock so
delivered is subject to restrictions or limitations imposed by agreement
between the Employee and the Company, an equivalent number of Option
Shares shall be subject to all restrictions and limitations applicable to
the Old Stock to the extent that the Employee paid for the Option Shares
by delivery of Old Stock, in addition to any restrictions or limitations
imposed by this Agreement. Notwithstanding the foregoing, the Employee
may not pay any part of the exercise price hereof by transferring Common
Stock to the Company unless such Common Stock has been owned by the
Employee free of any substantial risk of forfeiture for at least six
months.
8. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, this option may be
exercised by written notice to the Company at its principal executive
office, or to such transfer agent as the Company shall designate. Such
notice shall state the election to exercise this option and the number of
Option Shares for which it is being exercised and shall be signed by the
person or persons exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company shall deliver a certificate or certificates representing such
shares as soon as practicable after the notice shall be received. Such
certificate or certificates shall be registered in the name of the person
or persons so exercising this option (or, if this option is exercised by
the Employee and if the Employee requests in the notice exercising this
option, shall be registered in the name of the Employee and another
person jointly, with right of survivorship). In the event this option is
exercised, pursuant to Section 5 hereof, by any person or persons other
than the Employee, such notice shall be accompanied by appropriate proof
of the right of such person or persons to exercise this option.
9. OPTION NOT TRANSFERABLE.
This option is not transferable or assignable except by will or by the
laws of descent and distribution. During the Employee's lifetime only the
Employee can exercise this option.
10. NO OBLIGATION TO EXERCISE OPTION.
The grant and acceptance of this option imposes no obligation on the
Employee to exercise it.
11. NO OBLIGATION TO CONTINUE EMPLOYMENT.
Neither the Plan, this Agreement, nor the grant of this option imposes
any obligation on the Company or any Related Corporation to continue the
Employee in employment.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Employee shall have no rights as a stockholder with respect to the
Option Shares until the date of issuance of a stock certificate to the
Employee. Except as is expressly provided in the Plan with respect to
certain changes in the capitalization and stock dividends of the Company,
no adjustment shall be made for dividends or similar rights for which the
record date is before the date such stock certificate is issued.
13. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.
The Plan contains provisions covering the treatment of options in a
number of contingencies such as stock splits and mergers. Provisions in
the Plan for adjustment with respect to stock subject to options and the
related provisions with respect to successors to the business of the
Company are hereby made applicable hereunder and are incorporated herein
by reference.
14. EARLY DISPOSITION.
The Employee agrees to notify the Company in writing immediately after
the Employee transfers any Option Shares, if such transfer occurs on or
before the later of (a) the date two years after the Grant Date or (b)
the date one year after the date the Employee acquired such Option
Shares. The Employee also agrees to provide the Company with any
information concerning any such transfer required by the Company for tax
purposes.
15. WITHHOLDING TAXES.
If the Company or any Related Corporation in its discretion determines
that it is obligated to withhold any tax in connection with the exercise
of this option, the making of a Disqualifying Disposition (as defined in
Paragraph 18 of the Plan), the vesting or transfer of Option Shares
acquired on the exercise of this option, or the making of a distribution
or other payment with respect to the Option Shares, the Employee hereby
agrees that the Company or any Related Corporation may withhold from the
Employee's wages or other remuneration the appropriate amount of tax. At
the discretion of the Company or Related Corporation, the amount required
to be withheld may be withheld in cash from such wages or other
remuneration or in kind from the Common Stock or other property otherwise
deliverable to the Employee on exercise of this option. The Employee
further agrees that, if the Company or any Related Corporation does not
withhold an amount from the Employee's wages or other remuneration
sufficient to satisfy the withholding obligation of the Company or
Related Corporation, the Employee will make reimbursement on demand, in
cash, for the amount underwithheld.
16. COMPANY'S RIGHT OF FIRST REFUSAL.
(a) EXERCISE OF RIGHT.
If the Employee (or successor and assigns) or his or her legal
representative (the "Transferor") desires to transfer all or any part of
the Option Shares to any person other than the Company (an "Offeror"),
the Transferor shall: (i) obtain in writing a bona fide offer (the
"Offer") for the purchase thereof from the Offeror; and (ii) give written
notice (the "Option Notice") to the Company setting forth the
Transferor's desire to transfer such shares, which Option Notice shall be
accompanied by a photocopy of the Offer and shall set forth at least the
name and address of the Offeror and the price and terms of the bona fide
offer. Upon receipt of the Option Notice, the Company shall have an
assignable option to purchase all of such shares (the "Company Option
Shares") specified in the Option Notice, such option to be exercisable by
giving, within thirty (30) days after receipt of the Option Notice, a
written counter-notice to the Transferor (the "Counter-Notice"). If the
Company elects to purchase all of such Company Option Shares, it shall be
obligated to purchase, and the Transferor shall be obligated to sell to
the Company, such Company Option Shares that the Company
elects to purchase as set forth in the Counter-Notice at a per share
price equal to the per share price (and, except as set forth below, on
the same terms) indicated in the Offer, within thirty (30) days of the
date of delivery by the Company of the Counter-Notice. If the Company
elects to purchase all of such Company Option Shares, it may, in its sole
discretion, pay the purchase price for such Company option shares in
accordance with the terms of a promissory note, in the form attached
hereto as Exhibit A.
(b) SALE OF OPTION SHARES TO OFFEROR.
The Transferor may, for sixty (60) days after the expiration of the
thirty (30)-day period during which the Company may give the
Counter-Notice, sell, pursuant to the terms of the Offer, any or all of
such Company Option Shares not purchased or agreed to be purchased by the
Company or its assignee; PROVIDED, HOWEVER, that the Transferor shall not
sell such Company Option Shares to the Offeror if the Offeror is a
competitor of the Company and the Company gives a written notice to the
Transferor, within thirty (30) days of its receipt of the Option Notice,
stating that the Offeror is a competitor and therefore Transferor shall
not sell such Company Option Shares to such Offeror; and PROVIDED,
FURTHER, that prior to the sale of such Company Option Shares to the
Offeror, the Offeror shall execute an agreement with the Company pursuant
to which the Offeror agrees to be subject to the restrictions set forth
in Sections 16, 17, 18 and 20 hereof. If any or all of such Company
Option Shares are not sold pursuant to an Offer within the time permitted
above, the unsold Company Option Shares shall remain subject to the terms
of this Section 16 and any future proposed transfer must again comply
with the provisions set forth herein.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
If there shall be any change in the Common Stock of the Company through
merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares, or the like, the
restrictions contained in this Section 16 shall apply with equal force to
additional and/or substitute securities, if any, received by the Employee
in exchange for, or by virtue of his or her ownership of, Option Shares.
(d) FAILURE TO DELIVER COMPANY OPTION SHARES.
If the Transferor fails or refuses to deliver on a timely basis duly
endorsed certificates representing Company Option Shares to be sold to
the Company or its assignee pursuant to this Section 16, the Company
shall have the right to deposit the purchase price for such Company
Option Shares in a special account with any bank or trust company in the
Commonwealth of Massachusetts, giving notice of such deposit to the
Transferor, whereupon such Company Option Shares shall be deemed to have
been purchased by the Company. All such moneys shall be held by the bank
or trust company for the benefit of the Transferor. All moneys deposited
with the bank or trust company remaining unclaimed for two years after
the date of deposit shall be repaid by the bank or trust company to the
Company on demand, and the Transferor shall thereafter look only to the
Company for payment.
(e) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL. The first refusal
rights of the Company set forth in this Section 16 shall remain in effect
until such time, if ever, as an underwritten public offering is made of
shares of the Company's Common Stock pursuant to a registration statement
filed under the Securities Act of 1933 or a successor statute or the
closing of an Acquisition as defined in the Plan, at which time this
Section 16 and the right of first refusal set forth herein will
automatically expire.
17. COMPANY'S RIGHT OF REPURCHASE.
(a) RIGHT OF REPURCHASE.
The Company shall have the right (the "Repurchase Right") to repurchase
from the holder of any Option Shares (each a "Holder") any or all of the
Option Shares then owned by such Holder at any time by giving such Holder
a written notice (the "Repurchase Notice") at least 30 days prior to the
date of repurchase. The Repurchase Notice shall set forth the number of
Option Shares to be repurchased (the "Repurchase Shares"), the Fair
Market Value per share (determined in accordance with Section 17(b) below
as of the date of the Repurchase Notice) of the Repurchase Shares and the
date (the "Repurchase Date") on which such Repurchase Shares are to be
repurchased by the Company (such date not to be more than 120 nor less
than 30 days after the date of the Repurchase Notice). On the Repurchase
Date, the Company shall tender to the Holder an amount equal to the
number of Repurchase Shares multiplied by the Fair Market Value per
share; provided, however, that the Company may pay the repurchase amount,
in its sole discretion, in accordance with the terms of a promissory note
in the form attached hereto as EXHIBIT A. The Company may assign the
Repurchase Right to one or more persons and may utilize a promissory note
to effect its Repurchase right. Upon timely exercise of the Repurchase
Right in the manner provided in this Section 17(a), the Holder shall
deliver to the Company the stock certificate or certificates representing
the Repurchase Shares, duly endorsed and free and clear of any and all
liens, charges and encumbrances.
(b) FAIR MARKET VALUE.
A determination as to the current valuation of the Company shall be made
(i) on an annual basis within 90 days after the end of the Company's
fiscal year, (ii) effective upon the consummation by the Company of any
future financing and (iii) promptly following any other event which
involves the obtaining by the Company of an independent valuation of the
Company. "Valuation" means (1) in the case of clause (I) of the preceding
sentence, a valuation mutually agreed upon by Employee and the Board of
Directors, or if a mutual agreement cannot be reached, a written
determination of the valuation of the Company prepared by an independent
investment banking firm or appraisal company which is of national or
regional reputation and which is mutually acceptable to the Company and
to you and which valuation is prepared on a basis consistent with
valuation methods typically used by venture capitalists or investment
bankers to value a business in the same industry and stage of development
as the Company (it being agreed that such valuation shall not be based on
book value or liquidation value), (2) with respect to clause (ii) of the
preceding sentence, the valuation of the Company in connection with such
financing and (3) with respect to clause (iii) of the preceding sentence,
the independently prepared valuation referred to therein. "Fair
Market Value per Option Share" shall mean the valuation of the Company
divided by the number of shares of Common Stock equivalents (including,
without limitation, preferred stock convertible into common stock,
warrants to purchase common stock and vested options) then outstanding.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
If there shall be any change in the Common Stock of the Company through
merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares, or the like, the
restrictions contained in this Section 17 shall apply with equal force to
additional and/or substitute securities, if any, received by the Employee
in exchange for, or by virtue of his or her ownership of, Option Shares.
(d) FAILURE TO DELIVER REPURCHASE SHARES.
If the Holder fails or refuses to deliver on a timely basis duly endorsed
certificates representing the Repurchase Shares to be repurchased by the
Company or its assignee pursuant to this Section 17, the Company shall
have the right to deposit the repurchase price for such Repurchase Shares
in a special account with any bank or trust company in the Commonwealth
of Massachusetts, giving notice of such deposit to the Holder, whereupon
such Repurchase Shares shall be deemed to have been purchased by the
Company. All such moneys shall be held by the bank or trust company for
the benefit of the Holder. All moneys deposited with the bank or trust
company remaining unclaimed for two years after the date of deposit shall
be repaid by the bank or trust company to the Company on demand, and the
Holder shall thereafter look only to the Company for payment.
(e) EXPIRATION OF COMPANY'S REPURCHASE RIGHT.
The Repurchase Right of the Company set forth in this Section 17 shall
remain in effect until such time, if ever, as an underwritten public
offering is made of shares of the Company's Common Stock pursuant to a
registration statement filed under the Securities Act or any successor
statute or the closing of an Acquisition as defined in the Plan, at which
time this Section 17 and the Repurchase Right set forth herein will
automatically terminate.
(f) TRANSFERS EXCLUDED FROM FIRST REFUSAL RIGHTS.
The foregoing first refusal rights of the Company shall not apply to a
transfer by the Employee of all or any part of the Option Shares to the
Employee's spouse, children or grandchildren, or to a trust for the
benefit of any such individuals; provided, however, that prior to any
such transfer each transferee shall execute an agreement with the Company
pursuant to which the transferee agrees to be subject to the restrictions
set forth in Sections 16, 17, 18 and 20 hereof.
18. LOCK-UP AGREEMENT.
The Employee agrees that in connection with the Company's first
underwritten public offering of Common Stock, upon the request of the
Company or the managing or lead
underwriter for such public offering, the Option Shares may not be sold,
offered for sale or otherwise disposed of without the prior written
consent of the Company or such underwriter, as the case may be, for at
least 180 days after the effectiveness of the registration statement
filed in connection with such offering, or such longer period of time as
the Board of Directors may determine if all of the Company's directors
and officers agree to be similarly bound (but in no event, longer than
270 days). The lock-up agreement established pursuant to this Section 18
shall have perpetual duration.
19. PROVISION OF DOCUMeNTATION TO EMPLOYEE.
By signing this Agreement the Employee acknowledges receipt of a copy of
this Agreement and a copy of the Plan.
20. SUBCHAPTER S RESTRICTIONS.
Anything in this Agreement to the contrary notwithstanding, including,
without limitation, Sections 16 and 17 hereof, the Employee shall not
exercise this option or sell, assign, transfer or convey or otherwise
dispose of any Option Shares, whether by will, by the laws of descent and
distribution, by operation of law or otherwise, including, without
limitation, under Sections 16 or 17 hereof, to any person or entity, if
such exercise or transfer will or may reasonably be expected to result in
a termination of the Company's subchapter S election under Section 1362
of the Code (pursuant to Sections 1361 and 1362 of the Code or any
successor provision thereto). Any exercise of this option or transfer of
Option Shares in violation of the restrictions on exercise and transfer
contained herein or resulting in termination of the Company's subchapter
S election in violation of the terms of this Agreement shall be null and
void and of no effect whatsoever and shall not entitle the Employee or
any proposed transferee, assignee or other person to have any Option
Shares issued to them or transferred upon the books of the Company.
Furthermore, the Employee will not take any other action which would
result in the termination of the Company's subchapter S election. For
purposes of this section 20, the term Employee includes any successor
transferee of the Option Shares. The provisions of this Section 20 shall
remain in effect until such time, if ever, as an underwritten public
offering is made of shares of the Company's Common Stock pursuant to a
registration statement filed under the Securities Act or any successor
statute or the termination of the Company's status as an S-Corp, at which
time this Section 20 and the restrictions set forth herein will
automatically terminate.
21. MISCELLANEOUS.
(a) NOTICES.
All notices hereunder shall be in writing and shall be deemed given when
sent by certified or registered mail, postage prepaid, return receipt
requested, to the address set forth below. The addresses for such notices
may be changed from time to time by written notice given in the manner
provided for herein.
(b) ENTIRE AGREEMENT; MODIFICATION.
This Agreement constitutes the entire agreement between the parties
relative to the subject matter hereof, and supersedes all proposals,
written or oral, and all other communications between the parties
relating to the subject matter of this Agreement. This Agreement may be
modified, amended or rescinded only by a written agreement executed by
both parties.
(c) SEVERABILITY.
The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability
of any other provision.
(d) SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, subject to
the limitations set forth in Sections 9, 16, 17, and 20 hereof.
(e) GOVERNING LAW.
This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to
the principles of the conflicts of laws thereof.
(f) LEGENDS.
The Company may place a legend or legends on any stock certificate
delivered to the any holder of Option Shares reflecting the restrictions
on transfer, rights of first refusal and repurchase rights provided in
this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
Breakaway Solutions, Inc.
00 Xxxxx Xxxxx
0xx Xxxxx
Xxxxxx, XX 00000
/s/ XXXXXX XXXXXX
------------------------------------
Employee
XXXXXX XXXXXX By: /s/ XXXXX XXXXXXXXX
------------------------------------ ------------------------------
Print Name of Employee Name: Xxxxx Sellfdorff
Title: Founder
00 XXXXXX XXXX
------------------------------------
Xxxxxx Xxxxxxx
XXXXXXXXX, XX 00000
------------------------------------
City State Zip Code
Attest: XXX XXXXXXX
---------------------
EXHIBIT A
FORM OF
PROMISSORY NOTE
$_____________ _________ __, 199_
For value received, the undersigned, Breakaway Solutions, Inc., a
Delaware corporation ("Obligor"), hereby promises to pay to the order of Xxxxxx
Xxxxxx ("Lender") at such place as may be designated from time to time in
writing by Lender, the principal sum of ___________ Dollars and ______ Cents
($_________) : ____ percent (___%) per annum [the prime rate in effect on the
date hereof for major banks as published in the Wall Street Journal], payable as
set forth below. At the option of Lender and to the extent permitted by
applicable law, the rate of interest on any unpaid principal or interest not
paid when due and payable hereunder shall be two percent (2%) per annum above
the rate of interest set forth in the immediately preceding sentence. Interest
shall be calculated on the basis of actual number of days elapsed over a year of
360 days. Notwithstanding any other provision of this Promissory Note, Lender
does not intend to charge and Obligor shall not be required to pay any interest
or other fees or charges in excess of the maximum permitted by applicable law;
any payments in excess of such maximum shall be refunded to Obligor or credited
to reduce principal hereunder. All payments received by Lender hereunder will be
applied first to costs of collection, if any, then to interest and the balance
to principal. Principal and interest shall be payable in lawful money of the
United States of America.
Principal shall be paid in sixty (60) equal monthly installments of
________________ Dollars and ______ Cents ($______) each, commencing on
________, 199_, and continuing on the same day of each successive month
thereafter with a final payment of all unpaid principal on ______, 199_;
interest shall be paid monthly commencing on ________, 199_, and continuing on
the same day of each successive month thereafter with a final payment of all
unpaid interest at the time of payment of the principal.
If any day on which a payment is due pursuant to the terms of this
Promissory Note is not a day on which banks in the Commonwealth of Massachusetts
are generally open (a "Business Day"), such payment shall be due on the next
Business Day following.
This Promissory Note may be prepaid at any time, without premium or
penalty, in whole or in part, all such prepayments to be applied upon
installments of most remote maturity. Any prepayment of principal shall be
accompanied by a payment of accrued interest in respect of the principal being
prepaid.
This Promissory Note shall, at the option of the holder hereof, become
due and payable without notice or demand, upon the happening of any one of the
following specified events: (1) failure to pay any amount as herein set forth;
(2) default in the performance of any other obligation to Lender, which default
is not cured within thirty (30) days after written notice of such default from
Lender; (3) insolvency (however evidenced) or the commission of any act of
insolvency; (4) the making of a general assignment for the benefit of creditors;
(5) the filing of any petition or the commencement of any proceeding by Obligor
or any endorser or guarantor of this Promissory Note for any relief under any
bankruptcy or insolvency laws, or any laws relating to the relief of debtors,
readjustment of indebtedness, reorganizations, compositions, or extensions; (6)
the filing of any petition or the commencement of any proceeding against Obligor
or any endorser or guarantor of this Promissory Note for any relief under any
bankruptcy or insolvency laws, or any laws relating to the relief of debtors,
readjustment of indebtedness, reorganizations, compositions, or extensions,
which proceeding is not dismissed within sixty (60) days; (7) suspension of the
transaction of the usual business of Obligor; or (8) the past or future making
of a false representation or warranty by Obligor in connection with any loan or
loans by Lender.]
If this Promissory Note is not paid in accordance with its terms, Obligor
shall pay to Lender, in addition to principal and accrued interest thereon, all
costs of collection of the principal and accrued interest, including, but not
limited to, reasonable attorneys' fees, court costs and other costs for the
enforcement of payment of this Promissory Note.
No waiver of any obligation of Obligor under this Promissory Note shall
be effective unless it is in a writing signed by Lender. A waiver by Lender of
any right or remedy under this Promissory Note on any occasion shall not be a
bar to exercise of the same right or remedy on any subsequent occasion or of any
other right or remedy at any time.
Any notice required or permitted under this Promissory Note shall be in
writing and shall be deemed to have been given on the date of delivery, if
personally delivered to the party to whom notice is to be given, or on the fifth
business day after mailing, if mailed to the party to whom notice is to be
given, by certified mail, return receipt requested, postage prepaid, and
addressed to the addressee at the address of the addressee set forth herein, or
to the most recent address, specified by written notice, given to the sender
pursuant to this paragraph.
This Promissory Note is delivered in and shall be enforceable in
accordance with the laws of the Commonwealth of Massachusetts, and shall be
construed in accordance therewith, and shall have the effect of a sealed
instrument.
Obligor hereby expressly waives presentment, demand, and protest, notice
of demand, dishonor and nonpayment of this Promissory Note, and all other
notices or demands of any kind in connection with the delivery, acceptance,
performance, default or enforcement hereof, and hereby consents to any delays,
extensions of time, renewals, waivers or modifications that may be granted or
consented to by the holder hereof with respect to the time of payment or any
other provision hereof .
In the event any one or more of the provisions of this Promissory Note
shall for any reason be held to be invalid, illegal or unenforceable, in whole
or in part or in any respect, or in the event that any one or more of the
provisions of this Promissory Note operate or would prospectively operate to
invalidate this Promissory Note, then and in any such event, such provision(s)
only shall be deemed null and void and shall not affect any other provision of
this Promissory Note and the remaining provisions of this Promissory Note shall
remain operative and in full force and effect and in no way shall be affected,
prejudiced, or disturbed thereby.
OBLIGOR:
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
Attested:
-------------------------
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
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