FULL RECOURSE PROMISSORY NOTE
$145,200.00 January 10, 2002
FOR VALUE RECEIVED, this Promissory Note (this "Note") is made by Charlie
Federico, an individual (the "Borrower"), and Orthofix International N.V., a
Netherlands Antilles corporation (the "Payee").
1. Payment. The Borrower hereby promises to pay the Payee at its principal
offices at 7 Abraham de Veerstraat, Curacao, Netherlands, Antilles, or such
other place as the Payee may designate from time to time in writing, in lawful
money of the United States of America and in immediately available funds
together with interest from the date of this Note on the unpaid principal
balance, the principal sum of One Hundred Forty Five Thousand Two Hundred and
No/100 Dollars ($145,200.00), upon the terms and conditions specified below.
2. Term. The principal balance of this Note, together with interest accrued
and unpaid to date, shall be due and payable at the close of business on January
10, 2007.
3. Rate of Interest. Interest shall accrue under this Note on any unpaid
principal balance at the lesser of the rate per annum of 3.97%, compounded
annually, or the Highest Lawful Rate (as defined below). From and after the
occurrence of an Event of Default (as defined below), the indebtedness evidenced
by this Note shall bear interest at a rate per annum equal to the lesser of 18%
or the Highest Lawful Rate until paid in full or such Event of Default is
waived. Notwithstanding the foregoing, in no event shall the interest rate
hereunder exceed the Highest Lawful Rate. "Highest Lawful Rate" means, at any
given time during which indebtedness shall be outstanding hereunder, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged, or received on the indebtedness
evidenced by this Note under the laws of the United States of America and the
State of Texas applicable thereto that are presently in effect or, to the extent
allowed by law, under such applicable laws of the United States of America and
the State of Texas that may hereafter be in effect and that allow a higher
maximum nonusurious interest rate than applicable laws now allow, in any case
after taking into account, to the extent required by applicable law, any and all
relevant payments or charges under this Note and any documents executed in
connection herewith.
4. Prepayment. Prepayment of principal and interest may be made at any time
without penalty, provided, however, that any such optional prepayment shall be
applied to accrued interest and then to the unpaid principal amount of this
Note.
5. Events of Default. The entire unpaid principal sum and unpaid interest
under this Note shall become immediately due and payable, without notice,
demand, presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, notice of intent to demand, protest or other formalities
of any kind, all of which are hereby expressly waived by Borrower, upon the
occurrence of any of the following events of default (each, an "Event of
Default"):
(a) when the Borrower ceases to be employed by, or an officer or
director of, the Payee for any reason;
(b) the failure of the Borrower to pay when due the principal balance
and accrued interest on this Note and the continuation of such default;
(c) the insolvency of the Borrower, the commission of an act of
bankruptcy by the Borrower, the execution by the Borrower of a general
assignment for the benefit of creditors, or the filing by or against the
Borrower of a petition in bankruptcy or a petition for relief under the
provisions of the federal bankruptcy act or another state or federal law
for the relief of debtors and the continuation of such petition without
dismissal for a period of ninety (90) days or more; or
(d) the occurrence of a material breach or Event of Default under the
Stock Pledge Agreement securing this Note or any obligation secured
thereby.
6. Security. Payment of this Note, including principal, interest and fees
and costs payable pursuant hereto, shall be secured by a Stock Pledge Agreement
to be executed and delivered by the Borrower and covering certain shares of
common stock of OrthoRx, Inc., a Delaware corporation. The Borrower, however,
shall remain personally liable for payment of this Note, and assets of the
Borrower, in addition to the collateral under the Stock Pledge Agreement, may be
applied to the satisfaction of the Borrower's obligations hereunder, provided
that the Payee shall initially use the collateral under the Stock Pledge
Agreement before using the other assets of the Borrower as a means of satisfying
the Borrower's obligations hereunder.
7. Collection. If action is instituted to collect under this Note, the
Borrower promises to pay all costs and expenses (including reasonable attorneys'
fees) incurred in connection with such action.
8. Waiver. No previous waiver and no failure or delay by the Payee or the
Borrower in acting with respect to the terms of this Note or the Stock Pledge
Agreement shall constitute a waiver of any breach, default or failure of
condition under this Note, the Stock Pledge Agreement or the obligations secured
thereby. A waiver of any term of this Note, the Stock Pledge Agreement or of any
of the obligations secured thereby must be made in writing and signed by a duly
authorized officer of the Payee and shall be limited to the express terms of
such waiver.
The Borrower hereby expressly waives presentment and demand for payment at
such time as any payments are due under this Note.
9. Conflicting Agreements. In the event of any inconsistencies between the
terms of this Note and the terms of any other document related to the
indebtedness evidenced by this Note, the terms of this Note shall prevail.
10. Severability. If any provision of this Note shall be held to be
unenforceable by a court of competent jurisdiction, such provisions shall be
severed from this Note and the remainder of this Note shall continue in full
force and effect.
11. Entirety. This Note (along with the other documents and instruments
executed and delivered pursuant thereto) represents the final agreement between
the parties and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.
12. Governing Law; Venue. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS Of THE STATE OF TEXAS, EXCLUDING ITS CONFLICTS OF LAW PROVISIONS. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE OR ANY OTHER RELATED
DOCUMENT SHALL BE BROUGHT IN ANY TEXAS STATE OR FEDERAL COURT SITTING IN COLLIN
COUNTY, TEXAS, AND, BY EXECUTION AND
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DELIVERY OF THIS NOTE, BORROWER HEREBY ACCEPTS FOR HIMSELF AND 1N RESPECT OF
THE COLLATERAL (AS DEFINED IN THE STOCK PURCHASE AGREEMENT), GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT HE
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS.
13. Waiver of Jury Trial. BORROWER AGREES THAT HE WAIVES TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY BORROWER OR PAYEE AGAINST THE
OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS NOTE OR THE STOCK PLEDGE AGREEMENT.
14. Notices. Except as otherwise provided herein, any notice or demand
that, by the provisions hereof, is required or that may be given to or served
upon the Payee or Borrower will be made at the respective addresses and in the
manner provided in the Stock Pledge Agreement.
15. Successors and Assigns. This Note will be binding upon Borrower and his
successors and permitted assigns (including, without limitation, a receiver,
trustee or debtor-in-possession of or for the Borrower) and will inure to the
benefit of payee and its successors and assigns. Borrower may not assign his
rights or obligations hereunder without the prior written consent of Payee, in
Payee's sole discretion. Payee may assign all or a part of its interest in this
Note and its rights hereunder to any party.
/s/ Charlie Federico
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Signature of Borrower
Charlie Federico
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Printed Name of Borrower
Address: 19323 Peninsula Shores Drive
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Cornelius NC 28031
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