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Exhibit 10.16
SCHEDULE OF MATERIAL TERMS
Shares of
Common
Date of Installments Due Final Payment Stock
Name Agreement Amount Interest Rate And Payable Due and Payable Pledged
---- ---------- ------ ------------- ------------------ --------------- ------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ May 6, 1997 $ 13,642.74 8% May 5 May 5, 2002 75,793
▇. ▇▇▇▇▇▇▇▇▇▇▇▇ Eagle May 6, 1997 $ 34,106.76 8% May 5 May 5, 2002 189,482
▇▇▇▇▇▇ ▇. ▇▇▇▇ May 6, 1997 $ 60,750 8% May 5 May 5, 2002 180,000
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ May 6, 1997 $ 7,875 8% May 5 May 5, 2002 43,750
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ May 6, 1997 $ 14,617.19 8% May 5 May 5, 2002 81,207
▇▇▇▇ ▇. ▇▇▇▇▇▇ May 6, 1997 $ 12,180.76 8% May 5 May 5, 2002 67,672
▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ May 6, 1997 $ 21,600 8% May 5 May 5, 2002 120,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ November 1, 1998 $33,333.60 8% October 31 October 31, 2003 41,667
▇.▇▇▇▇ ▇▇▇▇▇▇▇▇▇ November 1, 1998 $11,666.40 8% October 31 October 31, 2003 14,583
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ November 1, 1998 $ 8,333.60 8% October 31 October 31, 2003 10,417
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PROMISSORY NOTE
$ ---------------------
--------------------------------- Natick, Massachusetts
FOR VALUE RECEIVED, (the "Maker"), promises to pay
to Aspect Medical Systems, Inc., or order, at the offices of Aspect Medical
Systems, Inc. or at such other place as the holder of this Note may designate,
the principal sum of $ , together with interest on the unpaid principal
balance of this Note from time to time outstanding at the rate of 8% per year
until paid in full. Principal and interest shall be paid as follows: principal
shall be paid by the Maker in four equal annual installments in the amount of
$ each, plus interest accrued, with the first such installment due and
payable on and the next three installments due and payable on ,
of each year thereafter, plus a final principal payment equal to the remaining
principal balance plus all accrued but unpaid interest and other amounts then
due and payable, with such final payment due and payable on .
Interest on this Note shall be computed on the basis of a year of 365
days for the actual number of days elapsed, compounded annually. All payments by
the Maker under this Note shall be in immediately available funds.
Payment of this Note is secured by a security interest in certain
property of the Maker (the "Collateral") pursuant to a pledge agreement of even
date herewith between the Maker and Aspect Medical Systems, Inc. (the "Pledge
Agreement").
This Note shall become immediately due and payable without notice or
demand upon the occurrence at any time of any of the following events of default
(individually, "an Event of Default" and collectively, "Events of Default"):
(1) default in the payment when due of any principal, premium or
interest under this Note;
(2) the occurrence of any event of default under the Pledge
Agreement; or
(3) the institution by or against the Maker of this Note of any
proceedings under the United States Bankruptcy Code or any
other federal or state bankruptcy, reorganization,
receivership, insolvency or other similar law affecting the
rights of creditors generally or the making by the Maker or
any indorser or guarantor of this Note of a composition or an
assignment or trust mortgage for the benefit of creditors.
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Upon the occurrence of an Event of Default, the holder shall have then,
or at any time thereafter, all of the rights and remedies afforded by the
Uniform Commercial Code as from time to time in effect in the Commonwealth of
Massachusetts or afforded by other applicable law.
Every amount overdue under this Note shall bear interest from and after
the date on which such amount first became overdue at an annual rate which is
two percentage points above the rate per year specified in the first paragraph
of this Note. Such interest on overdue amounts under this Note shall be payable
on demand and shall accrue and be compounded monthly until the obligation of the
Maker with respect to the payment of such interest has been discharged (whether
before or after judgment).
All payments by the Maker under this Note shall be made without set-off
or counterclaim and be free and clear and without any deduction or withholding
for any taxes or fees of any nature whatever, unless the obligation to make such
deduction or withholding is imposed by law. The Maker shall pay and save the
holder harmless from all liabilities with respect to or resulting from any delay
or omission to make any such deduction or withholding required by law.
Whenever any amount is paid under this Note, all or part of the amount
paid may be applied to principal, premium or interest in such order and manner
as shall be determined by the holder in its discretion.
No reference in this Note to the Pledge Agreement or any guaranty shall
impair the obligation of the Maker, which is absolute and unconditional, to pay
all amounts under this Note strictly in accordance with the terms of this Note.
The Maker agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, incurred by the holder in enforcing the obligations
of the Maker under this Note.
No delay or omission on the part of the holder in exercising any right
under this Note or the Pledge Agreement shall operate as a waiver of such right
or of any other right of such holder, 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.
This Note may be prepaid in whole or in part at any time or from time
to time in the sole discretion of the holder. Any such prepayment shall be
without premium or penalty.
None of the terms or provisions of this Note may be excluded, modified
or amended except by a written instrument duly executed on behalf of the holder
expressly referring to this Note and setting forth the provision so excluded,
modified or amended.
All rights and obligations hereunder shall be governed by the laws of
the Commonwealth of Massachusetts and this Note is executed as an instrument
under seal.
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ATTEST:
By: _______________________________ By: ______________________________
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PLEDGE AGREEMENT
This is a pledge agreement made as of the of between
____________________________, an individual residing at
_________________________________, (the "Pledgor"), and Aspect Medical Systems,
Inc., a Delaware corporation with its principal place of business at Two Vision
Drive, Natick, Massachusetts 01760 (the "Pledgee").
1. Pledge of Collateral. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Pledgor hereby grants
Pledgee a security interest in the capital stock identified in Exhibit A annexed
hereto, the certificates for which Pledgor has delivered to Pledgee together
with a stock transfer power executed in blank (the "Collateral").
2. Obligations Secured. The security interest in the Collateral granted
hereby secures payment and performance of the obligations of Pledgor to Pledgee,
whether now existing or hereafter arising, including but not limited to those
obligations described in that certain promissory note from Pledgor to Pledgee of
even date herewith in the principal amount of $__________ (the "Note"), together
with all interest, with respect to such debt (the "Obligations").
3. Pledgee's Rights and Duties with respect to the Collateral.
Pledgee's only duty with respect to the Collateral shall be to exercise
reasonable care to secure the safe custody thereof. Pledgee shall have the right
but not the obligation to (a) demand, sue for, receive and collect all money or
money damages payable on account of any Collateral, (b) protect, preserve or
assert any other rights of Pledgor or take any other action with respect to the
Collateral, and (c) pay any taxes, liens, assessments, insurance premiums or
other charges pertaining to the Collateral. Any expenses incurred by Pledgee
under the preceding sentence shall be paid by Pledgor upon demand, become part
of the Obligations secured by the Collateral and bear interest at the rate
provided in the Note until paid. Pledgee shall be relieved of all responsibility
for the Collateral upon surrendering it to Pledgor.
4. ▇▇▇▇▇▇▇'s Warranties and Indemnity. Pledgor represents, warrants and
covenants (a) that it is and will be the lawful owner of the Collateral, (b)
that the Collateral is and will remain free and clear of all liens, encumbrances
and security interests other than the security interest granted by Pledgor
hereunder, and (c) that Pledgor has the sole right and lawful authority to
pledge the Collateral and otherwise to comply with the provisions hereof. In the
event that any adverse claim is asserted in respect of the Collateral or any
portion
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thereof, except such as may result from an act of Pledgee not authorized
hereunder, ▇▇▇▇▇▇▇ promises and agrees to indemnify Pledgee and hold Pledgee
harmless from and against any losses, liabilities, damages, expenses, costs and
reasonable counsel fees incurred by Pledgee in exercising any right, power or
remedy of Pledgee hereunder or defending, protecting or enforcing the security
interests created hereunder. Any such loss, liability or expense so incurred
shall be paid by Pledgor upon demand, become part of the obligations secured by
the Collateral and bear interest at the rate provided in the Note until paid.
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the capital stock and other securities, if any, pledged as
Collateral.
6. Dividends and Other Distributions. While Pledgor is not in default
hereunder, Pledgor may receive cash dividends, and other distributions payable
with respect to the Collateral, provided, however, that Pledgor shall
immediately inform Pledgee of the receipt of any such dividend, payment or other
distribution and shall hold the amount thereof in trust for Pledgee unless and
until Pledgee shall in writing release Pledgor from such trust. Pledgor shall
cause all non-cash dividends and distributions with respect to the Collateral to
be distributed directly to Pledgee, to be held by Pledgee as additional
Collateral, and if any such distribution is made to Pledgor it shall receive
such distribution in trust for Pledgee and shall immediately transfer it to
Pledgee.
7. ▇▇▇▇▇▇▇'s Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
(a) If any event of default by the Pledgor shall occur under
the Note;
(b) If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Collateral and such lien, encumbrance
or adverse claim is not removed within sixty (60) days or if Pledgor attempts to
transfer the Collateral;
(c) If Pledgor fails to fulfill any obligation hereunder and
such obligation shall not be fulfilled within sixty (60) days thereafter; or
(d) If the "fair market value" per share of the Collateral is
at or below $.20 per share. For purposes of this Section 7(d), the "fair market
value" per share of the Collateral shall be the price determined in good faith
by the Board of Directors of the Company.
8. Pledgee's Rights upon Default. Upon the occurrence of any default as
defined in the preceding section, Pledgee may, if Pledgee so elects in its sole
option:
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(a) at any time and from time to time, sell, assign and
deliver the whole or any part of the Collateral at a sale through a broker in a
public market where securities of the type constituting such Collateral are
usually traded, without any advertisement, presentment, demand or performance,
protest, notice of protest, notice of dishonor or any other notice;
(b) at any time and from time to time sell, assign and deliver
all or any part of the Collateral, or any interest therein, at any other public
or private sale, for cash, on credit or for other property, for immediate or
future delivery without such assumption of credit risk, and for such price or
prices and on such terms as Pledgee in its absolute discretion may determine,
provided that (i) at least ten days' notice of the time and place any such sale
shall be given to Pledgor, and (ii) in the case of any private sale, such notice
shall also contain the terms of the proposed sale and Pledgee shall sell the
Collateral proposed to be sold to any purchaser procured by Pledgor who is
ready, willing and able to purchase, and who prior to the time of such sale
tenders the purchase price of, such Collateral on terms more favorable to
Pledgee than the terms contained in such notice;
(c) exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Collateral as though Pledgee were the absolute owner thereof, whether or not
such rights were retained by ▇▇▇▇▇▇▇ as against Pledgee before default;
(d) at Pledgee's option, take title to the Collateral; and
(e) exercise all other rights available to a secured party
under the Uniform Commercial Code and other applicable law.
9. Application of Sale Proceeds. In the event of a sale of the
Collateral, the proceeds shall first be applied to the payment of the expenses
of the sale, including broker's commissions, counsel fees, any taxes or other
charges imposed by law upon the Collateral or the transfer thereof and all other
charges paid or incurred by Pledgee pertaining to the sale; and, second, to
satisfy outstanding Obligations, in the order in which Pledgee elects in its
sole discretion; and, third, the surplus (if any) shall be paid to Pledgor.
10. Termination. This Agreement shall terminate in its entirety upon
full payment of the Obligations to Pledgee, and Pledgee shall return any
remaining Collateral to Pledgor within thirty days after such termination.
11. Notices. All notices made or required to be made hereunder shall be
sent by United States first class or certified or registered mail, with postage
prepaid, or delivered by telecopy or by hand to Pledgee or to Pledgor at the
addresses first above written. Notice by
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mail shall be deemed to have been made on the date when the Notice is deposited
in the mail.
12. Heirs, Successors, Etc. This Pledge Agreement and all of its terms
and provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
13. Pledgee's Forbearance. Any forbearance, failure or delay by Pledgee
in exercising any right, power or remedy hereunder shall not be deemed a waiver
of such right, power or remedy.
14. Governing Law. This Pledge Agreement shall be governed by the laws
of the Commonwealth of Massachusetts.
EXECUTED under seal at Natick, Massachusetts as of the date first above
written.
PLEDGOR: PLEDGEE:
ASPECT MEDICAL SYSTEMS, INC.
________________________ By: _________________________
[Insert Name of Pledgor]
Exhibit A
_________________________ shares of Common Stock
represented by Certificate No. ______