Exhibit 10.3
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION FROM SUCH REGISTRATION.
PROMISSORY NOTE
July 25, 2000
Boston, Massachusetts
US$70,000
FOR VALUE RECEIVED, the undersigned, Xxxxx X. Xxxxxxx (the "MAKER"),
hereby promises to pay to the order of Primix Solutions Inc., a Delaware
corporation (the "PAYEE"), at such place or places as may be specified by the
Payee, in lawful money of the United States of America, the principal sum of
SEVENTY THOUSAND DOLLARS (US$70,000).
1. PAYMENT OF PRINCIPAL AND INTEREST. The principal sum of, and all
accrued but unpaid interest on, this Note shall be due and payable on July 25,
2001 or such earlier date as may be mutually agreed upon by the Maker and the
Payee, or as otherwise provided herein. All amounts due and owing under this
Note shall bear interest at the rate of 7.508% per annum (reflecting the yield
on the current one year treasury bill plus 1.5%) on the unpaid balance,
compounded quarterly. The interest due shall be paid within 30 days after the
end of each calendar quarter. All computations of the interest rate hereunder
shall be made on the basis of a three hundred and sixty-five (365) day year and
shall be paid for the actual number of days elapsed on which the principal sum
is outstanding. This Note may be prepaid by the Maker at any time without
penalty.
2. SECURITY. This Note is secured by a perfected, first priority
security interest in 17,500 shares of the common stock of Primix Solutions Inc.
("Common Stock") owned by the Maker, in accordance with the terms of that
certain Stock Pledge Agreement by and between the Maker and the Payee dated July
25, 2000 (the "Pledge Agreement"). The Maker shall pay to Payee, within ten (10)
days after receipt thereof, the net after-tax proceeds from any sales by the
Maker of shares of Common Stock of the Payee held on the date hereof, or any
successor securities, in reduction of the principal until such time as the
principal has been paid in full, and in connection with each such payment Maker
shall pay accrued but unpaid interest on the amount so paid. For purposes
hereof, "net after-tax proceeds" refers to the amount received upon any sale of
such shares of Common Stock, 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 Maker, taking into account the
holding period for such shares and any federal income tax deduction for state
and local income taxes).
3. EVENTS OF DEFAULT. It shall be deemed an "Event of Default"
hereunder in the event of: (i) an assignment for the benefit of creditors or
commencement of any proceeding under any bankruptcy or insolvency law by or
against the Maker, (ii) the termination, for any reason, of the Maker's
employment with the Payee or (iii) a material breach of the Pledge Agreement by
the Maker.
In case an Event of Default shall occur, the aggregate unpaid balance
of principal under this Note and accrued interest thereon may be declared to be
due and payable in the manner and with the effect provided in the Pledge
Agreement. The Payee shall have (i) full-recourse against the Stock (as defined
in the Pledge Agreement) in connection with the repayment of such principal and
(ii) full-recourse against the Security for Obligations and any other assets of
the Maker in connection with the repayment of the accrued interests thereon.
4. MAXIMUM RATE OF INTEREST. All agreements between the Maker and the
Payee are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the
Payee for the use, forbearance or detention of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used herein, the term
"applicable law" shall mean the law in effect as of the date hereof, PROVIDED,
HOWEVER, that in the event there is a change in the law which results in a
higher permissible rate of interest, then this Note shall be governed by such
new law as of its effective date. If, from any circumstance whatsoever,
fulfillment of any provision hereof at the time performance of such provision
shall be due, shall involve transcending the limit of validity prescribed by
law, then the obligation to be fulfilled shall automatically be reduced to the
limit of such validity, and if from any circumstances the Payee should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount in excess shall be applied first to the reduction of the principal
balance evidenced hereby.
5. WAIVERS OF CERTAIN RIGHTS. The Maker hereby expressly waives
presentment, demand, protest and notice of every kind, and assents to the
substitution, release or addition of any collateral which at any time may be
security for payment of this Note.
No delay or omission on the part of the Payee in exercising any rights
hereunder shall operate as a waiver of such rights or of any other right of the
Payee, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion.
6. EXPENSES. The Maker will pay all costs and expenses of collection,
including reasonable attorney's fees, incurred or paid by the Payee in enforcing
this Note.
7. FURTHER ASSURANCES. The Maker shall do, make, execute and deliver
all such additional and further acts, deeds, assurances and instruments as the
Payee may reasonably require to more completely vest in and assure to the Payee
its rights hereunder.
-2-
8. ASSIGNMENT; SUCCESSORS. This Note is personal and may not be
assigned by the Maker. This Note and all obligations of the Maker hereunder
shall be binding upon his heirs, executors and administrators. The Payee shall
have the right to assign this Note, without any restriction. The Payee's rights
and remedies under this Note shall inure to the benefit of its assigns and
successors by way of merger, consolidation or sale of substantially all of the
assets or stock of the Payee.
9. GOVERNING LAW. This Note shall be governed by and construed under
the laws of The Commonwealth of Massachusetts, without giving effect to the
conflict of laws principles thereof. If any provision of this Note is held to be
invalid or unenforceable by a court of competent jurisdiction, the other
provisions of this Note shall remain in full force and effect.
MAKER:
XXXXX X. XXXXXXX
------------------------------------------
-3-
