Exhibit 10.14
PROMISSORY NOTE
SECURED BY DEED OF TRUST
$100,000.00 September 18, 1998
Alameda, California
FOR VALUE RECEIVED, the undersigned, XXXXXX XXXXXX ("Employee") and
XXXXXXXXXXX X. XXXXXX, husband and wife (jointly and severally, the "Borrower"),
promise to pay to XENOGEN CORPORATION, a California corporation ("Lender" and
"Company"), at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 (or at such other place as
Lender may from time to time designate by written notice to Borrower), in lawful
money of the United States, the principal sum of ONE HUNDRED THOUSAND DOLLARS
($100,000.00), on the following terms:
1. Payment:
-------
Upon the occurrence of a Maturity Event (as defined herein), the entire
principal amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) shall be
immediately due and payable in lawful money of the United States.
2. Security: This Note is secured by a deed of trust of even date herewith
--------
made by Xxxxxxxx, as trustor, to First American Title Insurance Company, as
trustee, (the "Trustee") for Lender, as beneficiary, (the "Deed of Trust") which
(i) shall be executed and delivered by Borrower to Lender concurrently upon the
execution of this Note, and (ii) shall be recorded by Lender or Trustee in the
official records of the County of Santa Xxxxx, State of California as soon as
possible following the close of escrow for the Property (defined below),
encumbering certain
real property commonly known as 0000 Xxxxxxxxx Xxxx, Xxx Xxxx, Xxxxxxxxxx,
Xxxxxx xx Xxxxx Xxxxx, Xxxxx of California (the "Property"), described with
particularity in the Deed of Trust, which Xxxxxxxx intends to occupy as her
principal place of residence.
3. Maturity Event: Upon the occurrence of a Maturity Event (as
--------------
hereinafter defined), the entire principal amount of the Loan and any other sums
due hereunder, shall become immediately due and payable without further demand
or notice to Borrower. To the extent permitted by law, any of the following
events shall be a "Maturity Event" under this Note and the Deed of Trust:
(a) Ninety (90) days after the date of termination or cessation of
Borrower's employment with the Company for any reason, whether voluntary or
involuntary, and whether with cause or without cause.
(b) There shall occur any default in the performance of any obligation
of Borrower contained in the Deed of Trust, the First Deed of Trust, Second Deed
of Trust, or the Third Deed of Trust as defined herein below, or any other deed
of Trust, security agreement or other agreement (including any amendment,
modification or extension thereof) which may hereafter be executed by Borrower
for the purpose of securing this Note.
(c) Xxxxxxxx, without the prior written consent of Xxxxxx, voluntarily
or by operation of law, sells, conveys, assigns or otherwise transfers or agrees
to sell, convey or otherwise transfer, all or any portion of, or any interest
in, the Property.
-2-
(d) Xxxxxxxx (i) admits in writing her inability to pay debts, (ii)
makes an assignment for the benefit of creditors, (iii) files a voluntary
petition in bankruptcy, effects a plan or other arrangement with creditors,
liquidates her assets under arrangement with creditors, or liquidates her assets
under court supervision, (iv) has an involuntary petition in bankruptcy filed
against her that is not discharged within sixty (60) days after such petition is
filed, or (v) applies for or permits the appointment of a receiver or trustee or
custodian for any of her property or assets which shall not have been discharged
within sixty (60) days after the date of appointment.
(e) Borrower breaches any representation or warranty contained herein
or in the Deed of Trust, or any agreement or instrument executed in connection
with this loan proves to have been false or misleading.
(f) The Deed of Trust (as defined herein) is not duly executed and
validly acknowledged and delivered by Xxxxxxxx to Lender concurrently with the
execution of this Note.
(g) The death of the Borrower.
Notwithstanding the foregoing, if Xxxxxxxx's employment with Company has
not been terminated prior to the applicable date (either voluntarily or
involuntarily), the Loan will be forgiven as follows: (i) on January 1, 1999,
$15,000 of principal and all accrued interest, (ii) on January 1, 2000, $15,000
of principal and all accrued interest, (iii) on January 1, 2001, $15,000 of
principal and all accrued interest, and (iv) on January 1, 2002, $55,000 and all
accrued interest.
4. Death of Employee: If the death of Borrower occurs, Lender shall
-----------------
not declare all of Borrower's obligations to be due and payable if the
administrator, devisees, estate, executors,
-3-
heirs, legatees or personal representatives, as the case may be, of the deceased
shall agree in writing with the Lender within thirty (30) days after the death
of the deceased to cooperate fully with Lender in selling the Property,
including listing the Property for sale, and shall continue to cooperate with
the Lender after such date.
5. Interest: Upon the failure of Borrower to pay the outstanding principal
--------
balance within thirty (30) days after a Maturity Event, interest on the
outstanding principal balance shall thereafter accrue at the rate of six percent
(6%) per annum, or if lower, the highest rate permitted by applicable law.
6. Borrower's Representations: Borrower hereby makes the following
--------------------------
representations and warranties to the Lender and acknowledges that Lender is
relying on such representations in making the loan:
(a) As of the date of the close of escrow for the Property and as of
the date of recording of the Deed of Trust, Borrower shall have good and
marketable title to the Property free and clear of any security interests, liens
or encumbrances other than the First Deed of Trust, Second Deed of Trust and
Third Deed of Trust as defined in Paragraph 8 below.
(b) As of the date of the close of escrow for the Property and as of
the date of recording of the Deed of Trust, the consent of no other person or
entity is required to grant the security interest in the Property to the Lender
evidenced by the Deed of Trust.
(c) There are no actions, proceedings, claims or disputes pending or,
to the Borrower's actual knowledge threatened against or affecting the Borrower
or the Property.
-4-
7. Borrowers Additional Obligations: Borrower shall take any and all
--------------------------------
further actions that may from time to time be required to ensure that the Deed
of Trust creates a valid lien on the Property in favor of the Lender, which
shall secure the Note and be junior in priority only to the First Deed of Trust,
Second Deed of Trust and Third Deed of Trust. Borrower shall furnish evidence
reasonably satisfactory to the Lender that: (i) Borrower has good and marketable
title to the Property; (ii) the consent of no other person or entity is required
to grant a security interest in the Property to the Lender; and (iii) there is
no other deed of trust, mortgage or encumbrance against the Property other than
the First Deed of Trust, Second Deed of Trust and Third Deed of Trust. If it
should be hereafter determined that there are defects against title or matters
which could result in defects against title to the Property, or that the consent
of another person or entity is required to grant to and perfect in the Lender a
valid fourth-priority lien on the Property, Borrower shall promptly take all
action necessary to remove such defects and to obtain such consent and grant (or
cause to be granted) and perfect such lien on the Property. Failure of Borrower
to comply with the provisions of this Paragraph 7 shall be deemed a default
under the Note and the Deed of Trust.
8. Deed of Trust: As used herein, "Deed of Trust" shall mean the deed of
-------------
trust constituting a fourth-priority lien against the Property by Borrower to
First American Title Insurance Company, as trustee, (the "Trustee") for the
benefit of Xxxxxx, as beneficiary, to be recorded by Lender or Trustee
immediately following close of escrow for the Property in the
-5-
Official Records of the County of Santa Xxxxx, State of California, securing a
loan in the original principal amount of ONE HUNDRED THOUSAND DOLLARS
($100,000.00).
9. First Deed of Trust, Second Deed of Trust, Third Deed of Trust: As used
--------------------------------------------------------------
herein, "First Deed of Trust' shall mean the deed of trust constituting a
first-priority lien against the Property, by Borrower to Franklin Mortgage
Capital Corporation, a Virginia corporation, as trustee, for the benefit of
First Franklin Financial Corporation, as beneficiary, to be recorded in or about
August 1998, in the Official Records of the County of Santa Xxxxx, State of
California securing a loan in a principal amount not in excess of ONE HUNDRED
SIXTEEN THOUSAND FIVE HUNDRED TWENTY FIVE DOLLARS ($116,525), "Second Deed of
Trust" shall mean the deed of trust constituting a second-priority lien against
the Property, by Borrower to All-Cal Title Company, a California corporation, as
trustee, for the benefit of The Board of Trustees of Xxxxxx Xxxxxxxx Xx.
University, as beneficiary, to be recorded in or about August 1998, in the
Official Records of the County of Santa Xxxxx, State of California securing a
loan in a principal amount not in excess of ONE HUNDRED NINETY SEVEN THOUSAND
FIVE HUNDRED DOLLARS ($197,500), and "Third Deed of Trust" shall mean the deed
of trust constituting a third-priority lien against the Property, by Borrower to
All-Cal Title Company, a California corporation, as trustee, for the benefit of
The Board of Trustees of Xxxxxx Xxxxxxxx Xx. University, as beneficiary, to be
recorded in or about August 1998, in the Official Records of the County of Santa
Xxxxx, State of California securing a loan in a principal amount not in excess
of FORTY ONE THOUSAND FOUR HUNDRED SEVENTY FIVE DOLLARS ($41,475).
-6-
10. Notice: This Note is subject to Section 2924(i) of the California Civil
------
Code which provides that the holder of this Note, shall give written notice to
the trustor or his successor-in-interest, of prescribed information at least
ninety (90) days and not more than one hundred and fifty (150) days before any
balloon payment is due.
11. Attorneys' Fees: In the event of Xxxxxxxx's default hereunder, Borrower
---------------
shall pay all costs of collection, including reasonable attorneys' fees incurred
by the holder hereof on account of such collection, whether or not suit is filed
hereon.
12. Waiver: The waiver by Lender of any breach of or default under any
------
term, covenant or condition contained herein or in any other agreement referred
to above shall not be deemed to be a waiver of any subsequent breach of or
default under the same or any other such term, covenant or condition.
13. No Usury: Borrower hereby represents and warrants that at no time shall
--------
the proceeds of the indebtedness evidenced hereby be used "primarily for
personal, family, or household purposes" as that term is defined and used in
Article XV of the California Constitution (as amended from time to time).
Anything in this Note to the contrary notwithstanding, it is expressly
stipulated and agreed that the intent of Xxxxxxxx and Xxxxxx is to comply at all
times with all usury and other laws relating to this Note. If the laws of the
State of California would now or hereafter render usurious, or are revised,
repealed or judicially interpreted so as to render usurious, any amount called
for under this Note, or contracted for, charged or received with respect to the
loan evidenced by this Note, or if any prepayment by Borrower results in
Borrower
-7-
having paid any interest in excess of that permitted by law, then it is
Xxxxxxxx's and Xxxxxx's express intent that all excess amounts theretofore
collected by Xxxxxx be credited to the principal balance of this Note (or, if
this Note has been paid in full, refunded to Borrower), and the provisions of
this Note immediately be deemed reformed and the amounts therefor collectible
hereunder reduced, without the necessity of execution of any new document, so as
to comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder.
14. Prepayment: Borrower may prepay all or any portion of this Note at any
----------
time prior to the stated maturity date, with no premium or penalty.
15. General Provisions: This Note shall be governed by and construed in
------------------
accordance with the laws of the State of California. The maker of this Note
hereby waives presentment for payment, protest and demand, notice of protest,
demand and dishonor and nonpayment of this Note, and consents that Lender may
extend the time for payment or otherwise modify the terms of payment or any part
of 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.
16. THIS NOTE, THE DEED OF TRUST AND ALL RELATED DOCUMENTATION ARE EXECUTED
VOLUNTARILY AND WITHOUT ANY DURESS OR UNDUE INFLUENCE ON THE PART OF OR ON
BEHALF OF THE PARTIES HERETO,
-8-
WITH THE FULL INTENT OF CREATING THE OBLIGATIONS AND SECURITY INTERESTS
DESCRIBED HEREIN AND THEREIN. THE PARTIES ACKNOWLEDGE THAT: (a) THEY HAVE READ
SUCH DOCUMENTATION; (b) THEY HAVE BEEN REPRESENTED IN THE PREPARATION,
NEGOTIATION AND EXECUTION OF SUCH DOCUMENTATION BY LEGAL COUNSEL OF THEIR OWN
CHOICE OR THAT THEY HAVE VOLUNTARILY DECLINED TO SEEK SUCH COUNSEL; (c) THEY
UNDERSTAND THE TERMS AND CONSEQUENCES OF THIS NOTE, THE DEED OF TRUST AND ALL
RELATED DOCUMENTATION AND THE OBLIGATIONS THEY CREATE; AND (d) THEY ARE FULLY
AWARE OF THE LEGAL AND BINDING EFFECT OF THIS NOTE, THE DEED OF TRUST AND THE
OTHER DOCUMENTS CONTEMPLATED BY THIS AGREEMENT.
AS BORROWER:
/S/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
/S/ Xxxxxxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxxxxxx X. Xxxxxx
-9-
