PROMISSORY NOTE
Stanton L. Call
$2,876,206.00 Columbia, Maryland
5/13, 1998
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FOR VALUE RECEIVED, the undersigned, IT PARTNERS, INC., a Delaware
corporation (the "Maker") promises to pay to Stanton L. Call (the "Payee") the
principal sum of TWO MILLION EIGHT HUNDRED SEVENTY SIX THOUSAND TWO HUNDRED
SIX AND 00/100 DOLLARS ($2,876,206.00), together with interest at the rate of
eight Percent (8%) per annum accruing on the unpaid principal balance in the
following manner: Simple interest on the unpaid principal shall be paid to the
Payee quarterly commencing August 15, 1998, and payable thereafter on the
fifteenth of November, February and May, respectively, through the Maturity
Date. The principal and any remaining accrued interest shall be due in its
entirety, and this Note shall mature, upon the earlier of (1) five years from
the date of this Note, or (2) the closing date of (a) any sale of all or
substantially all of the Maker's stock or assets to an entity that is not an
Affiliate of the Maker, or (b) any transaction in which the Maker is merged
out of existence and into an entity that is not an Affiliate of the Maker.
"Affiliate" shall have the meaning set forth in that certain Asset Purchase
Agreement between the Maker and the Payee, dated 5/13,1998 (the "Asset
Purchase Agreement"), pursuant to which this Note has been issued.
The principal amount of this Note will be subject to cancellation and
amendment pursuant to Section 2.1(iii)(d) of the Asset Purchase Agreement. If
this Note is canceled or amended in accordance with the Asset Purchase
Agreement, the Payee, upon demand of Maker, shall within seven (7) days of
such demand return this Note to Maker for cancellation and return any excess
payment made on this Note to the Maker.
Upon determination of the NTM EBITDA, as such term is defined in the
Asset Purchase Agreement, this Note shall be convertible into Common Shares of
ITP at a conversion price of $5.70 per share.
This Note shall be at all times subordinate to any security interests,
liens, rights, privileges and entitlements held by Creditanstalt Corporate
Finance, Inc. by virtue of and pursuant to that certain Amended and Restated
Loan and Security Agreement by and between the Maker and the Lenders named
therein, dated March 31, 1998, as well as that certain Subordination Agreement
executed by the Payee on even date in favor of the Lenders described therein.
In the event Maker shall fail to make any payment within ten (10) days
after its due date, the Maker shall pay a late charge of Five Percent (5%) of
the amount not paid in a timely manner, without written notice or additional
demand therefor. Any such late charge shall be payable with the installment on
which it is imposed.
All payments required under the terms of the Note shall be paid in lawful
money of the United States of America at such place as the holder of this Note
shall designate to the Maker in writing at any time or from time to time.
The Maker may prepay the principal amount outstanding, in full or in
part, at any time. without premium or penalty. However, any such prepayment
shall be applied to installments (or portions thereof) in reverse order of
their due dates, so that any such prepayment shall not excuse the Maker from
paying any installment in full as it becomes due and payable until such time
as the principal is paid in full. All payments made pursuant to this Note
shall be applied, first, to any late fees and penalties hereunder, next, to
all accrued and outstanding interest on the principal amount hereof, and
lastly to the principal amount outstanding hereunder.
If this Note rightfully is forwarded to an attorney for collection, the
Maker shall pay on demand all costs and expenses of collection, including a
reasonable fee for attorneys not to exceed Fifteen Percent (15%) of the then
outstanding principal balance hereunder.
Any of the following events ("Events of Default") shall constitute a
default under the terms of this Note: (1) failure of the Maker to pay any
obligation hereunder within ten (10) days after the due date thereof, or (2) a
breach of any of the covenants, warranties or representations made by the
Maker and contained in the Asset Purchase Agreement or under any agreement
executed pursuant thereto.
If an Event of Default shall occur, the Maker shall be deemed in default
of its obligations under this Note, and the holder of this Note may declare
the entire unpaid principal balance of this Note, together with any accrued
and unpaid interest, and any unpaid late charges imposed thereon, immediately
due and payable. The Maker shall in any event have the right to cure the
default for up to thirty (30) days after such event of default. The Maker
hereby waives and releases, to the extent permitted by law, all errors and all
rights of exemption, appeal, stay of execution, inquisition and extension upon
any levy on real estate or personal property to which the Maker may otherwise
be entitled under any law now enforced or which may hereafter be passed.
The rights and remedies set forth in this Note may be exercised by the
holder of this Note during any default by the Maker, regardless of any prior
forbearance, and are in addition to any other rights or remedies provided by
law or in equity.
The Maker hereby waives presentment for payment, demand for payment,
protest, notice of protest and of dishonor, and any and all demands and
notices that might otherwise be required by law
This Note shall be deemed to be made in and shall be governed by the laws
of the State of Maryland.
The terms of any documents referred to herein are incorporated herein by
reference as though fully set forth herein verbatim.
IN WITNESS WHEREOF, the Maker has executed this Note, under seal, the day
and year first above written
IT PARTNERS, INC.
By: /s/ Jamie E. Blech
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Title: President
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