PROMISSORY NOTE SECURED BY DEED OF TRUST
$500,000.00 Mountain View, California
October 4, 1996
In installments as stated in this Note, for value received, Xxxx X. Xxxxxx
and Xxxxxx X. Xxxxxx (collectively, "Borrower") hereby promise to pay to Sun
Microsystems, Inc., a Delaware corporation ("Lender"), or order, at its offices
at 0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx, or at such other place as
Lender may from time to time designate in writing, the principal sum of Five
Hundred Thousand Dollars ($500,000.00) with interest on the unpaid balance of
principal from the date of this Note until paid in full at the rate of 6.72%,
compounded annually, on the following terms:
1. Payment of Principal: The principal due pursuant to this Note shall be paid
in full on or before October 4, 2001.
2. Payment of Interest: Accrued interest on the then outstanding principal
balance shall be due and payable on October 4, 1997 and on the 4th day of
October each year thereafter until payment in full of the principal and
interest.
3. General: Principal and interest shall be payable in lawful money of the
United States. Interest shall be calculated on the basis of a 360-day year
consisting of 12 thirty day months. Each payment shall be applied first to
interest then due and the balance of said installment shall be applied to
the principal sum. This Note may be prepaid at anytime.
4. Security: This Note is secured by a deed of trust of even date herewith
made by Xxxxxxxx, as trustor, to North American Title Company, as trustee,
for Lender, as beneficiary (the "Deed of Trust"), encumbering certain real
property commonly known as 00000 Xxxxxxxxxx Xxxxx, Xxx Xxxxx Xxxxx, Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx (the "Property Security").
Default and Acceleration:
A. Full Acceleration: Unless otherwise prohibited by law, upon the
occurrence of any of the following events, the Holder of this Note
shall have the option, without demand or notice, to declare the entire
balance of principal of this Note to be immediately due and payable:
(i) Borrower defaults in the payment of principal when due
pursuant to the terms hereof or defaults in the performance
of any obligation of Borrower or other agreement (including
any amendment, modification or extension thereof) which may
hereafter be executed by Borrower for the purpose of securing
this Note;
(ii) Borrower, without prior written consent of Lender,
voluntarily or by operation of law sells, conveys, assigns,
or otherwise transfers, all or substantially all, or any
portion of, or interest in the Property Security.
(iii) Sixty days after (a) Lender is notified that Borrower is
terminating his employment with Xxxxxx, or (b) Lender
terminates Borrower's employment for cause, as defined below.
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B. Partial Acceleration:
(i) In the event that Xxxxxxxx's employment is terminated by
Lender other than for cause or if Borrower dies or is
disabled for a period of more than six months, principal due
hereunder shall be accelerated and shall be paid fifty
percent (50%) of the principal in twelve (12) equal quarterly
installments, with the first such quarterly payment due on
the effective date of termination and the successive
quarterly payments being due each three months thereafter on
the same day of each such months (i.e., if termination is on
February 3, payments are due on each succeeding May 3, August
3, November 3 and February 3). The remaining fifty percent
(50%) of the principal shall be due in a balloon payment at
the end of the thirteenth quarter following the date hereof.
Notwithstanding the foregoing, in no event shall such a
termination or the foregoing payment schedule extend the due
date of this Note beyond October 4, 2001.
(ii) For purposes of this Note, the term "cause" shall mean
Borrower's misfeasance, malfeasance or misconduct, dishonesty
or gross negligence in connection with his employment.
4. Attorneys' Fees: In the event any default hereunder, Borrower hereby
promises to pay all costs of collection, including reasonable attorneys'
fees incurred by Xxxxxx hereof on account of such collection, whether or
not suit is filed hereon.
5. Waiver: The waiver by Lender hereof of any breach of or default under any
terms, covenant or condition contained herein or in any of the agreements
referred to above shall not be deemed to be a waiver of such term, covenant
or condition or any subsequent breach of or default under the same or any
other such term, covenant or condition.
6. General Provisions: This Note shall be governed by and construed in
accordance with the laws of the State of California. The makers, guarantors
and endorsers of this Note hereby severally waive presentment for payment,
protest and demand, notice of protest, demand and dishonor and nonpayment
of this Note, and consent that Lender may extend the time for payment or
otherwise modify the terms of payment or any part or the whole of the debt
evidenced by this Note, at the request of any person liable hereon, and
such consent shall not alter nor diminish the liability of any person.
Borrower hereby waives the defense of the statute of limitations in any
action on this Note to the extent permitted by law. The terms of this Note
constitute the entire agreement and understanding between the parties and
supersede all previous communications, representations or agreements,
whether written or oral, with respect to the subject matter hereof.
AS BORROWER:
/s/ XXXX X. XXXXXX
___________________________
Xxxx X. Xxxxxx
/s/ XXXXXX X. XXXXXX
__________________________
Xxxxxx X. Xxxxxx
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