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EXHIBIT 10.11(b)
LOAN AGREEMENT
THIS AGREEMENT is made as of this 15th day of December, 1997, by and
between CARNEGIE GROUP, INC., a Delaware corporation (the "Company") located in
Pittsburgh, Pennsylvania, and XXXX XXXXXXXX, an individual residing at 000
Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxxxxxx 00000 (the "Executive").
WHEREAS, the Company and the Executive desire that the Company loan to
the Executive the sum of $250,000 in accordance with the terms and conditions
set forth herein;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
ARTICLE 1
LOAN
1.1 The Company hereby loans to the Executive the sum of $250,000 (the
"Principal Sum"). The Principal Sum, together with interest compounded annually
at the rate of 6.39% per annum on the outstanding balance of the Principal Sum
(the "Interest Amount"), shall be repaid in a single installment on December 30,
1999 (the "Repayment Date"), subject to the provisions of Section 1.2.
1.2 In the event that, prior to November 30, 1999, (i) the Executive
voluntarily terminates his employment with the Company or his employment is
terminated by the Company for "Cause" (as hereinafter defined), and (ii) there
has been no "Change in Control" (as defined in the Severance Agreement dated as
of May 17, 1993, as amended, between the Company and the Executive) prior to
such termination, then the Repayment Date shall be thirty days following the
date of such termination.
1.3 As used herein, "Cause" shall mean the willful commission by the
Executive of any of the following actions, provided that such action is
demonstrably and materially injurious to the assets, operations or business
prospects of the Company: (i) a felony; (ii) the unlawful or unethical
conversion or commitment for the personal benefit of the Executive, a member of
his family or a business owned or controlled by the Executive or a member of his
family, of corporate funds or property or a material business opportunity of the
Company; or (iii) the unauthorized disclosure or use of confidential information
of the Company, other than disclosures which are made in the ordinary course of
the Company's business or for the purpose of carrying out business objectives of
the Company. No action of Executive shall be considered "willful" unless it is
done by the Executive in bad faith and without reasonable belief that such
action is in the best interests of the Company.
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ARTICLE 2
PLEDGE OF SHARES
2.1 To secure the repayment of the Principal Sum and the Interest
Amount, the Executive shall pledge to the Company any shares of the Common Stock
of the Company, par value $.01 per share, which may be acquired after the date
hereof by the Executive (the "Pledged Shares"). To perfect such security
interest, the Executive shall deliver to the Company immediately upon receipt
any stock certificates representing any Pledged Shares. All stock certificates
delivered by the Executive to the Company hereunder shall be accompanied by
stock powers duly endorsed in blank and medallion signature guaranteed. Until
such time, if any, that the Company forecloses on the Pledged Shares, the
Executive shall be entitled to retain cash dividends and cash distributions (if
any) in respect of, and voting rights incident to, the Pledged Shares.
2.2 The Executive acknowledges and agrees that the loan made hereunder
is a full-recourse loan, and if the value of the Pledged Shares is not
sufficient to repay the Principal Sum and the Interest Amount, the Executive
shall be liable to the Company for the repayment in full on the Repayment Date
of the Principal Sum and the Interest Amount.
2.3 Each stock certificate evidencing Pledged Shares shall be held by
the Company until the Principal Sum and the Interest Amount has been paid in
full.
ARTICLE 3
MISCELLANEOUS
3.1 This Agreement shall be binding upon and inure to the benefit of
the heirs and representatives of the Executive and the successors and assigns of
the Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, reorganization, consolidation, acquisition of
assets or stock, liquidation or otherwise), by agreement in form and substance
reasonably satisfactory to Executive, expressly to assume and agree to perform
this Agreement. Regardless whether such an agreement is executed, this Agreement
shall be binding upon any successor of the Company.
3.2 This Agreement contains the entire understanding between the
parties hereto with respect to the subject matter set forth herein, but in no
way supersedes the Severance Agreement. This Agreement may be modified only by
means of a written agreement signed by both parties.
3.3 The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
3.4 This Agreement may be executed in several counterparts each of
which shall be deemed an original.
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3.5 The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Pennsylvania.
3.6 All disputes and controversies arising out of or relating to this
Loan Agreement, or any breach thereof, will be settled by arbitration
administered by the American Arbitration Association in accordance with its
Commercial Arbitration Rules then in effect. An arbitral award will be final and
binding on both parties hereto and may be enforced by any court or judicial
authority having competent jurisdiction over either party or its assets against
whom the arbitral award is to be enforced.
IN WITNESS WHEREOF, the parties have duly executed this Agreement.
CARNEGIE GROUP, INC.
By: /S/ XXXXXX XXXXXXXXX
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Title: PRESIDENT/CEO
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/S/ XXXX XXXXXXXX
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Xxxx Xxxxxxxx
