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FORM OF LOAN DOCUMENTS
PROMISSORY NOTE
$_______________ Dated: _______________, 19_____
FOR VALUE RECEIVED, the undersigned, Xxxxxxxx X. Xxxxxxxx (the
"Borrower"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of E*Trade
Group, Inc. (the "Lender"), the principal sum of ____________________ DOLLARS
($_________), on ____________________.
The Borrower further promises to pay interest on the outstanding
principal amount of this Promissory Note from the date hereof until maturity,
in arrears, on _______________, 19_____, at a rate per annum equal at all
times to 7%. In the event that any amount of principal or interest, or any
other amount payable hereunder, is not paid in full when due (whether at
stated maturity, by acceleration or otherwise), the Borrower agrees to pay
interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, payable on demand, at
a rate per annum equal at all times to 9%. All computations of interest
shall be made on the basis of a year of 360 days for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest is payable.
All payments hereunder shall be made in lawful money of the United
States of America, to the Lender, at such place or to such account as the
Lender from time to time shall designate in a written notice to the Borrower.
Whenever any payment hereunder shall be stated to be due, or
whenever any interest payment date or any other date specified hereunder
would otherwise occur, on a day other than a Business Day (as defined below),
then such payment shall be made, and such interest payment date or other date
shall occur, on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest
hereunder. As used herein, "Business Day" means a day (i) other than
Saturday or Sunday, and (ii) on which commercial banks are open for business
in San Francisco, California.
Anything herein to the contrary notwithstanding, if during any
period for which interest is computed hereunder, the amount of interest
computed on the basis provided for in this Promissory Note, together with all
fees, charges and other payments which are treated as interest under
applicable law, as provided for herein or in any other document executed in
connection herewith, would exceed the amount of such interest computed on the
basis of the Highest Lawful Rate, the Borrower shall not be obligated to pay,
and the Lender shall not be entitled to charge, collect, receive, reserve or
take, interest in excess of the Highest Lawful Rate, and during any such
period the interest payable hereunder shall be computed on the basis of the
Highest Lawful Rate. As used herein, "Highest Lawful Rate" means the maximum
non-usurious rate of interest, as in effect from time to time, which may be
charged, contracted for, reserved, received or collected by the Lender in
connection with this Promissory Note under applicable law.
The Borrower may prepay the outstanding amount hereof in whole or
in part at any time, without premium or penalty. Together with any such
prepayment the Borrower shall pay accrued interest on the amount prepaid.
Any partial prepayment shall be applied to the
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installments of principal hereof in reverse order of maturity.
So long as any amount payable by the Borrower hereunder shall
remain unpaid, the Borrower will furnish to the Lender from time to time such
information respecting the Borrower's financial condition and the Collateral
(as defined below) as the Lender may from time to time reasonably request.
The Borrower represents and warrants to the Lender that this
Promissory Note does not contravene any contractual or judicial restriction
binding on or affecting the Borrower and that this Promissory Note is the
legal, valid and binding obligation of the Borrower enforceable against him
in accordance with its terms.
The Borrower agrees to notify the Lender of the incurrence of any
other indebtedness secured by the Collateral prior to the incurrence thereof
and to certify in writing to the Lender, at the end of each annual period
occurring after the date hereof, that it has maintained, in full force and
effect, without material modification, all insurance policies required to be
delivered to the Lender under the Deed of Trust (as defined below).
The occurrence of any of the following shall constitute an "Event
of Default" under this Promissory Note:
i) the failure to make any payment of principal, interest or
any other amount payable hereunder when due under this Promissory Note or the
breach of any other condition or obligation under this Promissory Note;
ii) the breach of any representation or covenant under the
Pledge Agreement (as defined below) or Deed of Trust;
iii) the filing of a petition by or against the Borrower under
any provision of the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time, or under any similar law
relating to bankruptcy, insolvency or other relief for debtors; or
appointment of a receiver, trustee, custodian or liquidator of or for all or
any part of the assets or property of the Borrower; or the insolvency of the
Borrower; or the making of a general assignment for the benefit of creditors
by the Borrower;
iv) the Borrower's death or incapacity;
v) any of the documents relating to the Collateral after
delivery thereof shall for any reason be revoked or invalidated, or other-
wise cease to be in full force and effect, or the Borrower or any other
person shall contest in any manner the validity or enforceability thereof, or
the Borrower or any other person shall deny that it has any further liability
or obligation thereunder; or any of the documents relating to the Collateral
for any reason, except to the extent permitted by the terms thereof, shall
cease to create a valid and perfected first priority lien in any of the
Collateral purported to be covered thereby;
vi) the failure of the Borrower to maintain at any time
Collateral with a fair market value (as determined by the Lender) of at least
140% of the outstanding principal amount of the loan and then unpaid interest
hereunder, provided, that the value of the Collateral utilized to satisfy
such Collateral maintenance requirement shall be reduced by the amount of all
indebtedness owed by Borrower that is secured by such Collateral; or
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vii) the incurence by the Borrower of any other indebtedness
secured by the Collateral which has not been consented to by the Lender.
Upon the occurrence of any Event of Default, the Lender, at its
option, may i) by notice to the Borrower, declare the unpaid principal amount
of this Promissory Note, all interest accrued and unpaid hereon and all other
amounts payable hereunder to be immediately due and payable, whereupon the
unpaid principal amount of this Promissory Note, all such interest and all
such other amounts shall become immediately due and payable, without
presentment, demand, protest or further notice of any kind, provided that if
an event described in paragraph (iii) above shall occur, the result which
would otherwise occur only upon giving of notice by the Lender to the
Borrower as specified above shall occur automatically, without the giving of
any such notice; and (ii) whether or not the actions referred to in clause
(i) have been taken, exercise any or all of the Lender's rights and remedies
under the Pledge Agreement and Deed of Trust and proceed to enforce all other
rights and remedies available to the Lender under applicable law.
The Borrower agrees to pay on demand all the losses, costs, and
expenses (including, without limitation, attorneys' fees and disbursements)
which the Lender incurs in connection with enforcement or attempted
enforcement of this Promissory Note, or the protection or preservation of the
Lender's rights under this Promissory Note, whether by judicial proceedings
or otherwise. Such costs and expenses include, without limitation, those
incurred in connection with any workout or refinancing, or any bankruptcy,
insolvency, liquidation or similar proceedings.
The Borrower hereby waives diligence, demand, presentment, protest
or further notice of any kind. The Borrower agrees to make all payments
under this Promissory Note without setoff or deduction and regardless of any
counterclaim or defense.
No single or partial exercise of any power under this Promissory
Note shall preclude any other or further exercise of such power or exercise
of any other power. No delay or omission on the part of the Lender in
exercising any right under this Promissory Note shall operate as a waiver of
such right or any other right hereunder.
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This Promissory Note shall be binding on the Borrower and his
successors, assigns, personal representatives, heirs, and legatees, and shall
be binding upon and inure to the benefit of the Lender, any future holder of
this Promissory Note and their respective successors and assigns. The
Borrower may not assign or transfer this Promissory Note or any of his
obligations hereunder without the Xxxxxx's prior written consent.
This Promissory Note is secured by certain collateral (the
"Collateral") more specifically described in the Pledge Agreement of even
date herewith between the Borrower and the Lender (the "Pledge Agreement")
and the Deed of Trust with Assignment of Rents of even date herewith by the
Borrower in favor of the Lender (the "Deed of Trust").
THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH CALIFORNIA LAW.
___________________________________
Xxxxxxxx X. Xxxxxxxx
Address:
___________________________________
___________________________________
___________________________________
Acknowledged and Agreed:
___________________________________
Xxxxxx X. Xxxxxxxx
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PLEDGE AGREEMENT
In order to secure payment of that certain _______________, 19_____,
promissory note (the "Note") payable by the undersigned to the order of
E*Trade Group, Inc. ("the Company"), the undersigned hereby grants the
Company a security interest in, and assigns, transfers to and pledges with
the Company, the following securities and other property:
(i) options to purchase __________ shares of the common stock ("Common
Stock") of the Company (the "Common Stock Options") owned and held by the
undersigned as described further on Schedule A;
(ii) any and all new, additional or different securities or other property
subsequently distributed with respect to the Common Stock Options and Common
Stock identified in subparagraph (i) that are to be delivered to and
deposited with the Company pursuant to the requirements of paragraph 3 of
this agreement;
(iii) any and all other property and money that is delivered to or comes
into the possession of the Company pursuant to the terms and provisions of
this agreement; and
(iv) the proceeds of any sale, exchange or disposition of the property and
securities described in subparagraphs (i), (ii) or (iii) above.
All securities, property and money so assigned, transferred to
and pledged with the Company shall be herein referred to as the "Collateral"
and shall be accompanied, if such Collateral is Common Stock or similar
securities, by one or more stock power assignments properly endorsed by the
undersigned. The Company shall hold the Collateral in accordance with the
following terms and provisions:
1. No Liens. The undersigned hereby warrants that the
undersigned is the owner of the Collateral and has the right to pledge the
Collateral and that the Collateral is free from all liens, adverse claims and
other security interests (other than those created hereby).
2. Rights and Powers. The Company may, without obligation to
do so, exercise at any time and from time to time one or more of the
following rights and powers with respect to any or all of the Collateral:
(a) accept in its discretion other property of the undersigned
in exchange for all or part of the Collateral and release Collateral to the
undersigned to the extent necessary to effect such exchange, and in such
event the money, property or securities received in the exchange shall be
held by the Company as substitute security for the Note and all other
indebtedness secured hereunder;
(b) perform such acts as are necessary to preserve and protect
the Collateral and the rights, powers and remedies granted with respect to
such Collateral by this agreement; and
(c) transfer record ownership of the Collateral to the Company
or its nominee
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and receive, endorse and give receipt for, or collect by legal proceedings or
otherwise, dividends or other distributions made or paid with respect to the
Collateral, provided and only if there exists at the time an outstanding
event of default under paragraph 7 of this agreement.
Any action by the Company pursuant to the provisions of this
paragraph 2 may be taken without notice to the undersigned. Expenses
reasonably incurred in connection with such action shall be payable by the
undersigned and form part of the indebtedness secured hereunder as provided
in paragraph 9.
So long as there exists no event of default under paragraph 7 of
this agreement, the undersigned may exercise all rights to determine when to
purchase the Common Stock of the Company subject to the Common Stock Options
and all stockholder voting rights, and be entitled to receive any and all
cash dividends paid on the Collateral. Accordingly, until such time as an
event of default occurs under this agreement, all proxy statements and other
stockholder materials pertaining to the Collateral shall be delivered to the
undersigned at the address indicated below.
Any cash sums that the Company may receive in the exercise of its
rights and powers under paragraph 2(c) above shall be applied to the payment
of the Note and any other indebtedness secured hereunder, in such order of
application as the Company deems appropriate. Any remaining cash shall be
paid over to the undersigned.
3. Duty to Deliver. Any new, additional or different
securities that may now or hereafter become distributable with respect to the
Collateral by reason of (i) any stock dividend, stock split or
reclassification of the capital stock of the Company or (ii) any merger,
consolidation or other reorganization affecting the capital structure of the
Company shall, upon receipt by the undersigned, be promptly delivered to and
deposited with the Company as part of the Collateral hereunder. Such
securities shall be accompanied by one or more properly-endorsed stock power
assignments as required by the Company.
4. Care of Collateral. The Company shall exercise reasonable
care in the custody and preservation of the Collateral, but shall have no
obligation to initiate any action with respect to, or otherwise inform the
undersigned of, any conversion, call, exchange right, preemptive right,
subscription right, purchase offer or other right or privilege relating to or
affecting the Collateral. The Company shall have no duty to preserve the
rights of the undersigned against adverse claims or to protect the Collateral
against the possibility of a decline in market value. The Company shall not
be obligated to take any action with respect to the Collateral requested by
the undersigned unless the request is made in writing and the Company
determines that the requested action will not unreasonably jeopardize the
value of the Collateral as security for the Note and other indebtedness
secured hereunder.
The Company may at any time prior to the repayment in full of all
indebtedness outstanding under the Note, the Deed of Trust (as defined in the
Note), and hereunder, in its sole discretion, release and deliver all or part
of the Collateral to the undersigned, and the receipt thereof by the
undersigned shall constitute a complete and full acquittance for the
Collateral so released and delivered. The Company shall accordingly be
discharged from any further liability or responsibility for the Collateral,
and the released Collateral shall no longer be subject to the provisions of
this agreement.
5. Payment of Taxes and Other Charges. The undersigned shall
pay, prior to the delinquency date, all taxes, liens, assessments and other
charges against the Collateral, and in
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the event of the undersigned's failure to do so, the Company may at its
election pay any or all of such taxes and charges without contesting the
validity or legality thereof. The payments so made shall become part of the
indebtedness secured hereunder and until paid shall bear interest at the per
annum rate equal to the rate then applicable under the Note.
6. Transfer of Collateral. In connection with the transfer or
assignment of the Note (whether by negotiation, discount or otherwise), the
Company may transfer all or any part of the Collateral, and the transferee
shall thereupon succeed to all the rights, powers and remedies granted the
Company hereunder with respect to the Collateral so transferred. Upon such
transfer, the Company shall be fully discharged from all liability and
responsibility for the transferred Collateral.
7. Events of Default. The occurrence of one or more of the
following events shall constitute an event of default under this agreement:
(a) the failure of the undersigned to pay when due under the
Note, any installment of principal or accrued interest;
(b) the failure of the undersigned to perform any obligation
imposed upon the undersigned by reason of this agreement, the Note or the
Deed of Trust; or
(c) the breach of any warranty of the undersigned contained in
this agreement, the Note or the Deed of Trust.
Upon the occurrence of any such event of default, the Company
may, at its election, declare the Note and all other indebtedness secured
hereunder to become immediately due and payable and may exercise any or all
of the rights and remedies granted to a secured party under the provisions of
the California Uniform Commercial Code (as now or hereafter in effect),
including (without limitation) the power to dispose of the Collateral by
public or private sale or to accept the Collateral in full payment of the
Note and all other indebtedness secured hereunder.
Any proceeds realized from the disposition of the Collateral
pursuant to the foregoing power of sale shall be applied first to the payment
of expenses incurred by the Company in connection with such disposition, then
to the payment of the Note and finally to any other indebtedness secured
hereunder. Any surplus proceeds shall be paid over to the undersigned.
8. Other Remedies. The rights, powers and remedies granted
to the Company pursuant to the provisions of this agreement shall be in
addition to all rights, powers and remedies granted to the Company under any
statute or rule of law. Any forbearance, failure or delay by the Company in
exercising any right, power or remedy under this agreement shall not be
deemed to be a waiver of such right, power or remedy. Any single or partial
exercise of any right, power or remedy under this agreement shall not
preclude the further exercise thereof, and every right, power and remedy of
the Company under this agreement shall continue in full force and effect
unless such right, power or remedy is specifically waived by an instrument
executed by the Company.
9. Costs and Expenses. All costs and expenses (including
reasonable attorneys fees) incurred by the Company in the exercise or
enforcement of any right, power or
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remedy granted it under this agreement shall become part of the indebtedness
secured hereunder and shall constitute a personal liability of the
undersigned payable immediately upon demand and bearing interest until paid
at the per annum rate equal to the rate then applicable under the Note.
10. Applicable Law. This agreement shall be governed by and
construed in accordance with the laws of the State of California and shall be
binding upon the executors, administrators, heirs and assigns of the
undersigned.
11. Severability. If any provision of this agreement is held
to be invalid under applicable law, then such provision shall be ineffective
only to the extent of such invalidity, and neither the remainder of such
provision nor any other provisions of this agreement shall be affected
thereby.
IN WITNESS WHEREOF, this agreement has been executed by the
undersigned on this _____ day of _______________, 19_____.
By: ____________________
Xxxxxxxx X. Xxxxxxxx
Address:
Agreed to and Accepted by:
E*TRADE GROUP, INC.
By: ____________________
Dated: _______________, 19_____
Agreed to and Accepted by:
Xxxxxx X. Xxxxxxxx as a
co-pledgor and to the fullest
extent of her marital interest
By: ____________________
Xxxxxx X. Xxxxxxxx
