Document:

Exhibit

10.2:

 

Material Contracts

 

MODIFICATION,

RESTATEMENT, AND CONSOLIDATION OF UNFUNDED DEFERRED COMPENSATION PLAN AND

CHANGE IN CONTROL COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS AMENDED AND

RESTATED AS OF OCTOBER 15, 2002

 

This Modification, Restatement, and Consolidation of

Unfunded Deferred Compensation Plan for Non-Employee Directors (hereinafter

“Plan”) is made as of the 15th day of October, 2002 by F&M

Bancorp (hereinafter the “Company”).

 

WHEREAS, the Company presently has in place an

Unfunded Deferred Compensation Plan for Non-employee Directors; and,

 

WHEREAS, the Company has determined to make certain

amendments to the Plan and to simplify the administration of the Plan by

consolidating all amendments into one document which restates the Plan;

 

NOW, THEREFORE, and in consideration of the premises

and of other good and valuable consideration the receipt of which is hereby

acknowledged by each of the parties hereto, the parties hereto do hereby

covenant and agree as follows:

 

I.  CONSOLIDATION.

 

Consolidation of

Amendment.  From and

after the date hereof, the Plan evidenced by the Unfunded Deferred Compensation

Plan for Non-Employee Directors as amended shall be consolidated into this

single Plan document.

 

II.  MODIFIED AND

RESTATED TEXT:  UNFUNDED DEFERRED

COMPENSATION PLAN AND CHANGE IN CONTROL COMPENSATION PLAN FOR NON-EMPLOYEE

DIRECTORS

 

THIS PLAN is adopted as of the 15th day of October, 2002 by

F&M Bancorp (hereinafter the “Company”).

 

INTRODUCTION

 

To encourage Directors to remain a member of the Company’s Board of

Directors, the Company is willing to provide to Directors a deferred fee

opportunity and change in control benefit. 

The Company will pay the benefits from its general assets.

 

Article

1

DEFINITIONS

 

1.1.  Definitions.  Whenever used in this Plan, the following

words and phrases shall have the meanings specified:

 

1.1.1.

“Change-in-Control” of the Employers. 

Change-in-Control shall be deemed to have occurred if the event set

forth in any one of the following paragraphs shall have occurred:

 

any Person is or becomes the Beneficial Owner, directly or indirectly,

of securities of the Company (not including in the securities beneficially

owned by such Person any securities acquired directly from the Company or its

Affiliates) representing 25% or more of the combined voting power of the

Company’s then outstanding securities, excluding any Person who becomes such a

Beneficial Owner in connection with a transaction described in clause (A) of

paragraph (iii) below; or

 

 

the following individuals cease for any reason to constitute a majority

of the number of directors then serving on the Board; individuals who, on the

date hereof, constitute the Board and any new director (other than a director

whose initial assumption of office is in connection with an actual or

threatened election contest, including but not limited to a consent

solicitation, relating to the election of directors of the Company) whose

appointment or election by the Board or nomination for election by the

Company’s shareholders was approved or recommended by a vote of at least

two-thirds (2/3) of the directors then still in office who either were

directors on the date hereof or whose appointment, election or nomination for

election was previously so approved or recommended;

or

there is consummated a merger or consolidation of the Company or any

direct or indirect subsidiary of the Company with any other corporation, other

than (A) a merger or consolidation which would result in the voting securities

of the Company outstanding immediately prior to such merger or consolidation

continuing to represent (either by remaining outstanding or by being converted

into voting securities of the surviving entity or any parent thereof), in

combination with the ownership of any trustee or other fiduciary holding

securities under an employee benefit plan of the Company or any subsidiary of

the Company, at least 60% of the combined voting power of the securities of the

Company or such surviving entity or any parent thereof outstanding immediately

after such merger or consolidation, or (B) a merger or consolidation effected

to implement a recapitalization of the Company (or similar transaction) in

which no Person is or becomes the Beneficial Owner, directly or indirectly, of

securities of the Company (not including in the securities Beneficially Owned

by such Person any securities acquired directly from the Company or its

Affiliates) representing 25% or more of the combined voting power of the

Company’s then outstanding securities.

the shareholders of the Company approve a plan of complete liquidation

or dissolution of the Company or there is consummated an agreement for the sale

or disposition by the Company of all or substantially all of the Company’s

assets, other than a sale or disposition by the Company of all or substantially

all of the Company’s assets to an entity, at least 60% of the combined voting

power of the voting securities of which are owned by shareholders of the

Company in substantially the same proportions as their ownership of the Company

immediately prior to such sale;

the Company ceases to own, directly or indirectly, securities of any

subsidiary representing 50% or more of the combined voting power of the

subsidiary’s then outstanding securities; or

there is consummated an agreement for the sale or disposition by the

Company of all or substantially all of a subsidiary’s assets, other than a sale

or disposition by the Company of all or substantially all of the subsidiary’s

assets to an entity, at least 60% of the combined voting power of the voting

securities of which are owned by shareholders of the Company in substantially

the same proportions as their ownership of the subsidiary immediately prior to

such sale; provided however, that such a sale or disposition should only be effective

for those Executives, if any, employed by the subsidiary whose assets are so

sold or otherwise disposed of, and not all participating Executives.

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated

under Section 12 of the Exchange Act.

 “Beneficial Owner” shall have

the meaning set forth in Rule 13d-3 under the Exchange Act.

“Board” shall mean the board of directors of the Company.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as

amended from time to time.

“Person” shall have the meaning given in Section 3(a)(9) of the

Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except

that such term shall not include (i) the Company or any of its subsidiaries,

(ii) a trustee or other fiduciary holding securities under an employee benefit

plan of the Company or any of its Affiliates, (iii) an underwriter temporarily

holding securities pursuant to an offering of such securities, or (iv) a

corporation owned, directly or indirectly, by the shareholders of the Company

in substantially the same proportions as their ownership of stock of the

Company.

A “Potential Change-in-Control” shall be deemed to have occurred if the

event set forth in any one of the following paragraphs shall have occurred:

the Company enters into an agreement, the consummation of which would

result in the occurrence of a Change-in-Control;

the Company or any Person publicly announces an intention to take or to

consider taking actions which, if consummated, would constitute a

Change-in-Control;

 

2

 

any Person becomes the Beneficial Owner, directly or indirectly, of

securities of the Company representing 15% or more of either the then

outstanding shares of common stock of the Company or the combined voting power

of the Company’s then outstanding securities (not including in the securities

beneficially owned by such Person any securities acquired directly from the

Company or its affiliates); or

(iv)          the Board adopts a

resolution to the effect that a Potential Change-in-Control has occurred.

1.1.2.  “Company” means each of F&M Bancorp, its

direct or indirect wholly-owned subsidiaries, and its other direct or indirect

subsidiaries that adopt this Plan.

 

1.1.3.  “Code” means the Internal Revenue Code of

1986, as amended.  References to a Code

section shall be deemed to be to that section as it now exists and to any

successor provisions.

 

1.1.4.  “Disability” means the Director’s inability

to perform substantially all normal duties of a Director, as determined by the

Company’s Board of Directors in its sole discretion.  As a condition to any benefits, the Company may require the

Director to submit to such physical or mental evaluations and tests as the

Board of Directors deems appropriate.

 

1.1.5.  “Election Form” means the Form attached as

Exhibit 1.

 

1.1.6.  “Fees” means any and all of the total

director’s fees payable to the Director.

 

1.1.7.  “Mandatory Termination Date” means the

annual meeting at which the Director’s term expires first occurring following

the Director attaining age 70, except for those Directors serving in that

capacity on March 11, 1975, for whom no Mandatory Termination Date exists.

 

1.1.8.  “Termination of Service” means the Director

is ceasing to be a member of the Company’s Board of Directors for any reason

whatsoever.

 

Article 2

 

Deferral Election

 

2.1.  Initial Election.  Current Directors shall have made an initial deferral election

under this Plan by filing with the Company a signed Election Form in December,

2001.  Directors commencing service

after October 15, 2002 will make an initial deferral election by filing with

the Company a signed Election Form within 30 days of commencing service.  The Election Form shall, in all instances,

set forth the amount of Fees to be deferred and the form of benefit

payment.  The Election Form shall be

effective to defer only Fees earned after the date the Election Form is

received by the Company.

 

2.2.  Election Changes

 

2.2.1.  Annual. 

Directors will be required to make an election annually in December by

filing a signed Election Form with the Company.  The Election Form shall be effective for the following calendar

year.

 

2.2.2.  Hardship. 

If an unforeseeable financial emergency arising from the death of a

family member, divorce, sickness, injury, catastrophe or similar event outside

the control of the Director occurs, the Director, by written instructions to

the Company may reduce future deferrals under this Plan.

 

3

 

Article 3

 

Deferral Account

 

3.1.  Establishing and Crediting.  The Company shall establish a deferral

account (“Deferral Account”) on its books for the Director, and shall credit to

the Deferral Account the following amounts:

 

3.1.1.  Deferrals. 

The Fees specified to be deferred by the Director (including fees

deferred under earlier versions of this Plan) as of the time the Fees would

have otherwise been paid to the Director.

 

3.1.2.  Interest Rate.  For each calendar year, interest shall be calculated at a rate

equal to the “prime rate” as published in the Wall Street Journal’s Money Rates

Table, or the highest rate if more than one rate is published on December 15 of

the immediately preceding year, or if the 15th is not a business day, then the

next business day. For example, for calendar year 1997, the interest rate shall

be the prime rate as published in the Wall Street Journal on December 15,

1996.  Notwithstanding the foregoing,

the interest rate to be paid on the balance of the Deferral Account from July 1

through December 31, 1996 shall be the prime rate as published in the Wall

Street Journal’s Money Rates Table on July 1, 1996.

 

3.1.3.  Interest Accrual.  Interest will be compounded daily at the rate specified in

paragraph 3.1.2. and credited to the Deferral Account monthly and immediately

prior to the payment of any benefits.

 

3.2.  Statement of Accounts.  The Company shall provide to the Director,

within one hundred twenty (120) days after each calendar year end, a statement

setting forth the Deferral Account balance.

 

3.3.  Accounting Device Only.  The Deferral Account is solely a device for

measuring amounts to be paid under this Plan. 

The Deferral Account is not a trust fund of any kind.  The Director is a general unsecured creditor

of the Company for the payment of benefits. 

The benefits represent the mere Company promise to pay such

benefits.  The Director’s rights are not

subject in any manner to anticipation, alienation, sale, transfer, assignment,

pledge, encumbrance, attachment, or garnishment by the Director’s creditors.

 

Article 4

 

Lifetime Benefits

 

4.1.  Normal Termination Benefit.  Upon the Director’s Termination of Service

at the Director’s Mandatory Retirement Date, or for those Directors for whom no

Mandatory Retirement Date exists, when such a Director’s Termination of Service

occurs after such Director has attained age 70, the Company shall pay to the

Director the benefit described in this Section 4.1.

 

4.1.1.  Amount of Benefit.  The benefit under this Section 4.1 is the Deferral Account

balance at the Director’s Termination of Service.

 

4.1.2.  Payment of Benefit.  The Company shall pay the benefit to the

Director in the form elected by the Director on the Election Form.  If the ten (10) year payment is elected, the

amount of the accrued benefit payment will be calculated by using the ten (10)

year annuity rate determined using the sum of the mid-term Applicable Federal

Rate (AFR) for the previous month as published monthly by the Internal Revenue

Service, plus 1% rounded to the nearest 1/2 of 1%. Payment shall be made (or

payments shall commence, depending on the Director’s election) on the 1st

day of the month following the Director’s Termination of Service.

 

4.2.  Early Termination Benefit.  If the Director terminates service as a

Director before the Mandatory Termination Date, the Company shall pay to the

Director the benefit described in this Section 4.2.

 

4.2.1.  Amount of Benefit.  The benefit under this Section 4.2 shall be the Deferral Account

balance at the Director’s Termination of Service.

 

4

 

4.2.2.  Payment of Benefit.  The Company shall pay the benefit to the

Director in the form elected by the Director on the Election Form.  Payment shall be made (or payments shall

commence, depending on the Director’s election) on the 1st day of

the month following the Director’s Termination of Service.  If the ten (10) year payment is elected, the

amount of the accrued benefit payment will be calculated by using the ten (10)

year annuity rate determined using the sum of the mid-term Applicable Federal

Rate (AFR) for the previous month as published monthly by the Internal Revenue

Service, plus 1% rounded to the nearest 1/2 of 1%.

 

4.3.  Disability Benefit.  If the Director terminates service as a

Director for Disability prior to the Mandatory Termination Date, the Company

shall pay to the Director the benefit described in this Section 4.3.

 

4.3.1.  Amount of Benefit.  The benefit under this Section 4.3 is the Deferral Account

balance at the Director’s Termination of Service.

 

4.3.2.  Payment of Benefit.  The Company shall pay the benefit to the

Director in the form elected by the Director on the Election Form. Payment

shall be made (or payments shall commence, depending on the Director’s

election) on the 1st day of the month following the Director’s

Termination of Service.   If the ten

(10) year payment is elected, the amount of the accrued benefit payment will be

calculated by using the ten (10) year annuity rate determined using the sum of

the mid-term Applicable Federal Rate (AFR) for the previous month as published

monthly by the Internal Revenue Service, plus 1% rounded to the nearest 1/2 of

1%.

 

4.4.  Change of Control Benefit.  Upon a Change of Control while the Director

is in the active service of the Company, the Company shall pay to the Director

the benefit described in this Section in lieu of any other benefit under this

Plan.

 

4.4.1.  Amount of Benefit.  The benefit under this Section 4.4. is the Deferral Account

balance at the date of the Director’s Termination of Service, if participating

in the deferred compensation portion of the plan, plus a cash payment equal to

three (3) times the then current annual retainer paid by the company.

 

4.4.2.  Payment of Benefit.  The Company shall pay the benefit to the

Director in a lump sum within ninety (90) days after the Director’s Termination

of Service.  The lump sum payment (the

cash payment equal to three (3) times the then current annual retainer paid by

the company plus, as applicable, the Deferred Account balance) shall include an

additional amount equal to the excise tax, if any, imposed on the payment

pursuant to Section 4999 of the Internal Revenue Code.  The Director and the company shall cooperate

with one another in calculating the amount of the excise tax and in connection

with any administrative and/or indirect proceeding.  Concerning the existence or amount of liability for excise tax

with respect to the lump sum payment.

 

4.5.  Hardship Distribution.  Upon the Company’s determination (following petition

by the Director) that the Director has suffered an unforeseeable financial

emergency as described in Section 2.2.2., the Company shall distribute to the

Director all or a portion of the Deferral Account balance as determined by the

Director, but in no event shall the distribution be greater than is necessary

to relieve the financial hardship.  The

Director expressly accepts the responsibility for all income tax implications

resulting from Director’s exercise of Director’s rights under this Section.

 

Article 5

 

Death Benefits

 

5.1.  Death During Active Service.  If the Director dies while in the active

service of the Company, the Company shall pay to the Director’s beneficiary the

benefit described in this Section 5.1.

 

5

 

5.1.1.  Amount of Benefit.  If Company owned life insurance is in force on the life of the

Director on the date of the Director’s death, the benefit under Section 5.1 is

the projected age 70 benefit based on the Deferred Account balance and

projected further deferrals until age 70. 

If Company owned life insurance is not in force on the life of the

Director on the date of Director’s death, the benefit will be the Deferral

Account balance on the date of death of the Director.

 

5.1.2.  Payment of Benefit.  The Company shall pay the benefit to the

beneficiary in one hundred twenty (120) equal monthly installments commencing

on the first day of the month following the Director’s death.

 

5.2.  Death During Benefit Period.  If the Director dies after benefit payments

have commenced under this Plan but not before receiving all such payments, the

Company shall pay the remaining benefits to the Director’s beneficiary at the

same time and in the same amounts they would have paid to the Director had the

director survived.

 

Article 6

 

Beneficiaries

 

6.1.  Beneficiary Designations.  The Director shall designate a beneficiary

by filing a written designation with the Company.  The Director may revoke or modify the designation at any time by

filing a new designation.  However,

designations will only be effective if signed by the Director and accepted by

the Company during the Director’s lifetime. 

The Director’s beneficiary designation shall be deemed automatically

revoked if the beneficiary predeceases the Director, or if the Director names a

spouse as beneficiary and the marriage is subsequently dissolved.  If the Director dies without a valid

beneficiary designation, all payments shall be made to the Director’s surviving

spouse, if any, and if none, to the Director’s surviving children and the

descendants of any deceased child by right of representation, and if no

children or descendants survive, to the Director’s estate.

 

6.2.  Facility of Payment.  If a benefit is payable to a minor, to a

person declared incompetent, or to a person incapable of handling the

disposition of his or her property, the Company may pay such benefit to the

guardian, legal representative or person having the care or custody of such

minor, incompetent person or incapable person.  The Company may require proof of incompetency, minority or

guardianship as it may deem appropriate prior to distribution of the

benefit.  Such distribution shall

completely discharge the Company from all liability with respect to such

benefit.

 

Article 7

 

Claims and Review Procedure

 

7.1.  Claims Procedure.  The Company shall notify the Director’s beneficiary in writing,

within ninety (90) days of his or her written application for benefits, of his

or her eligibility or non-eligibility for benefits under the Plan .  If the Company determines that the

beneficiary is not eligible for benefits or full benefits, the notice shall set

forth (1) the specific reasons for such denial, (2) a specific reference to the

provisions of the Plan on which the denial is based, (3) a description of any

additional information or material necessary for the claimant to perfect his or

her claim, and a description of why it is needed, and (4) an explanation of the

Plan’s claims review procedure and other appropriate information as to the

steps to be taken if the beneficiary wishes to have the claim reviewed.  If the Company determines that there are

special circumstances requiring additional time to make a decision, the Company

shall notify the beneficiary of the

 

6

 

special circumstances and the date by which a decision is expected to

be made, and may extend the time for up to an additional ninety-day period.

 

7.2.  Review Procedure.  If the beneficiary is determined by the Company not to be

eligible for benefits, or if the beneficiary believes that he or she is

entitled to greater or different benefits, the beneficiary shall have the

opportunity to have such claim reviewed by the Company by filing a petition for

review with the Company within sixty (60) days after receipt of the notice

issued by the Company.  Said petition

shall state the specific reasons which the beneficiary believes entitles him or

her to benefits or to greater or different benefits.  Within sixty (60 days after receipt by the Company of the

petition, the Company shall afford the beneficiary (and counsel, if any) an

opportunity to present his or her position to the Company orally or in writing,

and the beneficiary (or counsel) shall have the right to review the pertinent

documents.  The Company shall notify the

beneficiary of its decision in writing within the sixty-day period, stating

specifically the basis of its decision, written in a manner calculated to be

understood by the beneficiary and the specific provisions of the Plan on which

the decision is based.  If, because of

the need for a hearing, the sixty-day period is not sufficient, the decision

may be deferred for up to another sixty-day period at the election of the Company,

but notice of this deferral shall be given to the beneficiary.

 

Article 8

 

Amendments and Termination

 

The Plan may be amended

or terminated at any time by the Company but no modification or termination

shall effect the rights of any Director who is at the time or had previously

elected to defer Fees unless such Director and the Company shall mutually agree

in writing.

 

Article 9

 

Miscellaneous

 

9.1.  Binding Effect.  This Plan shall bind the Director and the Company and their

beneficiaries, survivors, executors, administrators and transferees.

 

9.2.  No Guaranty of Employment.  This Plan is not a contract for

services.  It does not give the Director

the right to remain a Director of the Company, nor does it interfere with any

rights to replace the Director.  It also

does not require the Director to remain a Director nor interfere with the

Director’s right to terminate services at any time.

 

9.3.  Non-Transferability.  Benefits under this Plan cannot be sold,

transferred, assigned, pledge, attached or encumbered in any manner.

 

9.4.  Applicable Law.  The Plan and all rights hereunder  shall be governed by the Laws of the State of Maryland, except to

the extent preempted by the Laws of the United States of America.

 

9.5  Unfunded Arrangement.  The Director and beneficiary are general

unsecured creditors of the Company for the payment of benefits under this

Plan.  The benefits represent the mere

promise by the Company to pay such benefits. 

The rights to benefits are not subject in any manner to anticipation,

alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or

garnishment by creditors.  Any insurance

on the Director’s life is a general asset of the Company to which the Director

and Beneficiary have no preferred or secured claim.

 

7Exhibit 10.1

                                 PROMISSORY NOTE

US$ 100,000.00

Dated as of October 10, 2002 (the "Effective Date")

FOR VALUE RECEIVED, and intending to be legally bound, the undersigned, Global
Information Group USA, Inc. and its parent company ADVA International Inc.
(collectively known hereinafter as the "Company"), hereby promise to pay to the
order of H.J. Heerema, with a business address of Hemelakkers 75, 2930
Brasschaat, Belgium (the "Lender"), the principal sum of US$ 100,000.00 (the
"Loan"), to be funded before close of business on October 15, 2002, together
with interest thereon in the manner and upon the terms and conditions set forth
herein.

        1.   The outstanding principal balance of this Note shall bear interest
             at a per annum rate equal to 7.5%. Interest will be calculated on
             the basis of a year of 365 days for the actual number of days
             elapsed and paid on a semi-annual basis as per instructions in
             Section (2) below.

        2.   Borrower shall repay this Note in full no later than on the one (1)
             year anniversary of the date of actual funding, plus accrued
             interest. Interest will be paid commencing on the six month
             anniversary of the Loan. Payments shall be deposited in the current
             account at a Bank to be designated by the Lender prior to payment.

        3.   The Lender represents and warrants that it is an "accredited
             investor" as that term is defined in Section 501(a) the Securities
             and Exchange Act of 1933, as amended.

        4.   Prepayment may be made under this Note in whole or in part, without
             penalty. Prepayment shall be applied first to accrued and unpaid
             interest and then to principal.

        5.   The occurrence of any of the following events shall constitute an
             event of default hereunder ("Event of Default"):

                (a)   the commencement of any case or proceeding for
                      reorganization or liquidation of Company's debts under the
                      United States Bankruptcy Code or any other state or
                      federal law now or hereafter enacted for the relief of
                      Company whether instituted by or against Company;
                      provided, however, that Company shall have ninety (90)
                      days to obtain the dismissal or discharge of involuntary
                      proceedings filed against them. Lenders may seek adequate
                      protection in any bankruptcy proceeding.

                  Upon the occurrence of an Event of Default, (a) the entire
remaining principal balance and all accrued and unpaid interest and other fees
and charges with respect to this Note shall, at the option of the Lenders,
become immediately due and payable and (b) Lenders may immediately and without
demand exercise any rights and remedies granted herein, in the Note or under
applicable law or at equity, or which they may otherwise have, against Company,
or otherwise. No omission or delay by Lenders in exercising any right or power
under this Note or any other document will impair such right or power or be
construed to be a waiver of any default or an acquiescence therein, and any
single or partial exercise of any such right or power will not preclude other or
further exercise thereof or the exercise of any other right, and no waiver of
Lenders' rights hereunder will be valid unless in writing and signed by Lenders,
and then only to the extent specified. Any waiver by Lenders of a breach or
default of any provision of this Note shall not operate or be construed as a
waiver of any subsequent breach or default hereunder.

        6.   If any payment hereunder is not paid when due, Lenders shall have,
             in addition to the rights set forth herein and under law, the right
             to compound interest by adding the unpaid interest to principal,
             with such amount thereafter bearing interest at the rate provided
             in this Note.

        7.   If any payment hereunder is not paid when due, Borrower agrees to
             reimburse Lenders for all reasonable expenses, including all costs
             of collection, foreclosure fees, and reasonable attorneys' fees and
             costs, incurred by Lenders, whether or not suit is filed hereon, to
             enforce the provisions of this Note, and collect Borrower's
             obligations hereunder.

        8.   Company hereby waives presentment for payment, demand, notice of
             nonpayment, notice of protest and protest of this Note, and all
             other notices in connection with the delivery, acceptance,
             performance, default or enforcement of the payment of this Note.

        9.   This Note and all related documents shall be governed by, and
             construed and enforced in accordance with the substantive laws of
             the State of Delaware, without regard to its otherwise applicable
             principles of conflicts of laws. Company and Lenders irrevocably
             consent to the jurisdiction of the federal and state courts located
             in the District of South Carolina, York County, in any and all
             actions and proceedings whether arising hereunder or under any
             other related document. Notwithstanding the entry of any judgment
             under this Note, the unpaid principal balance under this Note shall
             continue to bear interest at the applicable rate set forth herein.

        10.  LENDERS AND COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
             ANY RIGHTS THEY MAY HAVE TO A JURY TRIAL IN ANY AND ALL DISPUTES
             BETWEEN LENDERS AND COMPANY, WHETHER HEREUNDER OR UNDER ANY OTHER
             AGREEMENTS, NOTES, PAPERS, INSTRUMENTS OR DOCUMENTS HERETOFORE OR
             HEREAFTER EXECUTED WHETHER SIMILAR OR DISSIMILAR.

        11.  The provisions of this Note are to be deemed severable, and the
             invalidity or unenforceability of any provision or part of a
             provision shall not affect or impair any other provision or balance
             of such provision, which shall continue in full force and effect.

        12.  This Note constitutes the entire understanding of the parties
             hereto regarding the subject matter hereof, and no amendment to, or
             modification of, this Note shall be binding unless in writing and
             signed by each party hereto.

        13.  Within 90 days of the date hereof, the Company and the Lender (by
             their acceptance of this Note) each hereby agree to negotiate in
             good faith the Company's sale of ADVA International Inc. common
             stock to the Lender pursuant to terms, conditions and documentation
             acceptable to the Company and Lender (the "Equity Transaction"),
             which shall include the terms set forth on Exhibit "A" hereto. It
             is contemplated that upon the closing of the Equity Transaction,
             the Loan will be terminated. The number of shares of common stock
             obtainable upon conversion shall be determined by dividing the
             aggregate amount of the Interest and any interest accrued thereto
             by US$ 0.18 per share (the "Conversion Price").

         14. In the event that within 6 months from the effective date of this
             Promissory Note a next round of funding is realized at a lower
             Conversion Price than the current US$ 0.18  with a New Investor,
             the Conversion Price of this Promissory Note will be adjusted
             accordingly (i.e. to an equal or lower Conversion Price).

         IN WITNESS WHEREOF, this Note has been executed and delivered as of the
Effective Date.

ADVA INTERNATIONAL INC.

By: /s/ Ernst R. Verdonck                     By: /s/ H. J. Heerema
Name:   Ernst R. Verdonck                     Name:   H.J. Heerema
Title:  President

GLOBAL INFORMATION GROUP USA, INC.

By: /s/ George L Down
Name:   George L. Down
Title:  President

                                    Exhibit A

     It is anticipated that the contemplated Equity Transaction shall include
the following terms and covenants. Said transaction and terms shall be pursuant
to the approval of the Company's Board of Directors.

     Lender has the right, not later  than upon the first anniversary  of the
disbursal of each tranche to convert each such tranche pro rata into shares of
ADVA International Inc. common stock. The number of shares of common stock to be
received upon conversion shall be determined in each case by dividing the
aggregate amount of such tranche plus accrued interest attributable thereto by
US$ 0.18 per share (the "Conversion Price"). No fractional shares shall be
issued. Lender shall be paid in cash in lieu of any fractional shares to which
Lender may otherwise be entitled upon conversion.

     In the event that  within 6  months from  the effective  date  of this
Promissory Note a next round of funding is realized at a lower Conversion Price
than the current US$ 0.18 with a New Investor , the Conversion Price of this
Promissory Note will be adjusted accordingly (i.e. to an equal or lower
Conversion Price).

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