Exhibit 4
NONRECOURSE PROMISSORY NOTE AND SECURITY AGREEMENT
$298,546.88 March 3, 2000
FOR VALUE RECEIVED, Xxxx X. Xxxxx, who resides at [address omitted]
(hereinafter referred to as the Employee), hereby promises to pay to the order
of Brooktrout, Inc., a Massachusetts corporation with its principal place of
business at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred
to as the Company), the principal amount of Two Hundred Ninety Eight Thousand
Five Hundred Forty Six Dollars and Eighty Eight Cents ($298,546.88) subject to
the terms and conditions set forth herein.
1. Purpose and Authority. This Promissory Note and Security Agreement (the
Note) is entered into for the purpose of financing the Employees exercise of
options with respect to 28,125 shares of common stock of the Company (the
Shares) pursuant to and subject to the terms and conditions of (i) the Company's
policy on loans to executive officers, and (ii) the 1992 Stock Incentive Plan,
as amended from time to time.
2. Security. The Employee hereby grants the Company a security interest in
28,125 Shares (hereinafter referred to as the Collateral Shares) and in any and
all distributions and dividends which may from time to time be, paid or payable
on the Collateral Shares from and after the date hereof. Employee agrees to take
all such actions and execute all such documents as may from time to time be
reasonably requested by the Company to perfect and maintain the validity and
priority of any security interest granted to the Company pursuant to this Note.
Employee also agrees that a carbon, photographic or other reproduction of this
Promissory Note and Security Agreement may be filed as a financing statement to
the extent that the Company determines that such filing is necessary for the
Company to establish or maintain its security interest in the Collateral Shares.
3. Maturity. The entire principal balance shall be due and payable on or
before 8/26/07 (the Maturity Date).
4. Interest. The Note will bear no interest.
5. Prepayment. The Employee may prepay the whole or any part of the
principal amount of this Note from time to time without premium or penalty. In
the event the Employee prepays any part of the principal amount of this Note,
the number of Collateral Shares shall be proportionately reduced.
6. Payment.
(a) The Employee shall pay the entire outstanding balance of this
Note on or before the earlier of:
(i) that date which is ninety (90) days after termination of
the Employees employment with the Company; or
(ii) the Maturity Date.
(b) The Employee may, at his election, pay the entire outstanding
balance of this Note by either (i) cash payment or (ii) irrevocably tendering to
the Company all of the remaining Collateral Shares, regardless of the value of
the remaining Collateral Shares at such time. The Company and the Employee agree
that in the event the Employee makes payment pursuant to this Section 6(b)(ii),
the entire outstanding balance of this Note shall be deemed to be equal to the
value of the remaining Collateral Shares.
(c) If the Employee fails to pay the outstanding balance of this
Note at the time such outstanding balance is due and payable, the Company may,
except as otherwise provided herein, exercise the rights and remedies accorded a
secured party by the Uniform Commercial Code as enacted in the Commonwealth of
Massachusetts.
7. Nonrecourse. Except as specifically provided with respect to the
Collateral Shares, this Note shall be without recourse against the Employee or
his assets. The Company and the Employee agree that the Employee shall have no
personal liability for any deficiency which may arise upon a foreclosure and
sale or other disposition of the Collateral Shares.
8. Modification. Neither this Note nor any provision hereof may be
modified, altered, or amended in any manner or form except by an agreement in
writing, executed by a duly authorized officer of the Company and the Employee,
which writing shall make specific reference hereto.
9. Transfer by Employee. Employee will not sell, assign, transfer or
otherwise dispose of, directly or indirectly, nor grant any option with respect
to, or pledge or grant any security interest in or otherwise encumber any of the
Collateral Shares or any interest therein, except for the security interest
provided for in this Note.
10. Severability. If for any reason any provision or provisions hereof are
determined to be invalid, unenforceable or contrary to any existing or future
law, such invalidity or unenforceability shall not impair the operation or
affect those portions of this Note which are valid.
11. Limitations by Law. All agreements between the Employee and the
Company are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of the indebtedness or otherwise, shall the amount
paid or agreed to be paid to the holder for the use, forbearance or detention of
the indebtedness evidenced hereby exceed the maximum amount which the holder is
permitted to receive under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Note, at the time performance
of such provision shall be due, shall involve payments exceeding such amount,
then the obligation to be fulfilled shall automatically be reduced to the limit
of such maximum amount. As used herein, the term Applicable law shall mean the
law in effect as of the date hereof. This provision shall control every other
provision of this Note.
12. Governing Law. The execution, delivery and performance of this Note
shall be governed by, construed, and enforced in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to conflicts of laws
principles, and each of the parties
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consents to the non-exclusive jurisdiction of all of the federal and state
courts in the Commonwealth of Massachusetts.
13. Waivers. The failure of the Company at any time to exercise any option
or right hereunder shall not constitute a waiver of the Company's right to
exercise such option or right at any other time.
IN WITNESS WHEREOF, this Note has been executed and delivered as a sealed
instrument as of the date first set forth above.
/s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx
Executed, sealed and delivered in the
presence of:
/s/ Xxxxxx X. Xxxxx
---------------------------------
Name of Witness: Xxxxxx X. Xxxxx
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