EXHIBIT 10
PROMISSORY NOTE
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Borrower: Lender:
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Sonic Solutions Xxxxxxxxx & Xxxxx Guaranty Finance, LLC
000 Xxxxxxx Xxx, Xxxxx 000 Xxx Xxxx Xxxxxx
Xxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
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Principal Amount: $ 1,000,000.00 Interest Rate: 7.25%
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Date of Note: October 15, 1999
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REPLACEMENT: This Promissory Note replaces an earlier Promissory Note dated
March 31, 1998 for the Principal Amount of $1,500,000 by Borrower for Lender
(the "Prior Note"). The Prior Note replaced an earlier Promissory Note dated
December 24, 1996 for the Principal Amount of $3,000,000 by Borrower for the
benefit of Xxxxxxxxx & Xxxxx Transition Capital, LLC (the "Original Note"). The
Prior Note is being surrendered on the Date of this Note. All interest on the
Prior Note from its issuance through its surrender shall be due and payable as
of this Date of Note.
PROMISE TO PAY: Sonic Solutions ("Borrower") promises to pay to Xxxxxxxxx &
Xxxxx Guaranty Finance, LLC ("Lender"), or order, in lawful money of the United
States of America, the principal amount of One Million Dollars ($1,000,000.00),
or so much as may be outstanding, together with interest on the unpaid
outstanding principal balances from the Date of Note until such balance is paid
in full.
INTEREST RATE: The interest rate on this Note is seven and one quarter percent
(7.25%) per annum, or, if lower, the maximum rate of interest allowed by
applicable law.
PAYMENT OF ACCRUED INTEREST: On or before October 31, 1999, Borrower will pay
all interest accrued on this Note, in arrears through October 31,1999. Beginning
on the Date of Note and continuing through October 31, 1999, interest will be
computed on a 365/360 day basis; that is in each month 1/360 of the Seven and
One Quarter Percent (7.25%) annual interest rate, will be multiplied by (I) the
outstanding principal and (II) the actual number of days that the principal was
outstanding in such month.
AMORTIZING PAYMENTS OF PRINCIPAL AND INTEREST: Beginning on November 30, 1999
and continuing through April 30, 2001, Borrower will pay Fifty Eight Thousand
Seven Hundred Ninety Eight Dollars and Sixty Two Cents ($58,798.62) on the last
day of each month on account of interest and principal. Beginning November 1,
1999 and continuing until the loan is paid in full, interest will be computed on
a monthly basis; that is in each month 1/12 of the Seven and One Quarter Percent
(7.25%) annual interest rate, will be multiplied by the outstanding principal as
of the beginning of the month.
APPLICATION OF PAYMENTS: Borrower will pay Lender at Lender's address shown
above or at such other place as Lender may designate in writing. Unless
otherwise agreed or required by applicable law, payments will be applied first
to accrued unpaid interest, then to principal, and any remaining amount to any
unpaid collection costs and late charges. Borrower agrees that all loan fees
were earned
fully as of the date paid and will not be subject to refund upon early payment
(whether voluntary or as a result of default), except as otherwise required by
law.
DEFAULT. Borrower will be in default if any Event of Default occurs under the
Business Loan Agreement.
LENDER'S RIGHTS. Upon the occurrence and during the continuance of an Event of
Default, Lender may declare the entire unpaid principal balance on this Note and
all accrued unpaid interest immediately due and payable, without notice, and
then Borrower will pay that amount. Upon Borrower's failure to pay all amounts
declared due pursuant to this section, including failure to pay upon final
maturity, Lender at its option, may also, if permitted under applicable law, do
one or both of the following: (a) increase the interest rate on this Note up to
eighteen percent (18%) per annum, or, if lower, up to the maximum interest
amount allowable by applicable law, and (b) add any unpaid accrued interest to
principal and such sum will bear interest therefrom until paid at the rate
provided in this Note. Borrower agrees to pay all reasonable out of pocket
expenses of Lender in connection with the collection and enforcement of this
Note. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and legal expenses whether or not there is a lawsuit, including
attorneys' fees and legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collections services. Borrower also will pay any court
costs, in addition to all other sums provided by law. This Note has been
delivered to Lender and accepted by Lender in the State of California. If there
is a lawsuit, Borrower agrees upon Lender's request to submit to the
jurisdiction of any federal or California State court located in San Francisco,
the State of California. This Note shall be governed by and construed in
accordance with the laws of the State of California.
LOAN AGREEMENT. This Note is subject to and shall be governed by all the terms
and conditions of the Business Loan Agreement, dated December 24, 1996, between
the Borrower and Lender, as amended from time to time (the "Business Loan
Agreement").
OUT-OF-POCKET EXPENSES. Borrower shall pay to Lender all of Lender's reasonable
out-of-pocket expenses according to the provisions of Section 4.3 of the
Business Loan Agreement.
SERVICE CHARGE: Since it would be impractical or extremely difficult to fix
Lender's actual damages for collecting and accounting for a late payment, if any
payment to Lender required herein is not paid on or before its due date,
Borrower shall pay to Lender an amount equal to five percent of any such late
payment, provided, however, that if any late payment is received by Lender
within ten (10) business days of its due date, the amount Borrower shall pay on
account of such late payment shall be no more than Two Hundred Fifty Dollars
($250).
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note may, to the extent allowed by law, waive
any applicable statute of limitations, presentment, demand for payment, protest
and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew, extend (repeatedly and
for any length of time) or modify this Note, or release any party or guarantor;
or impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone.
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COLLATERAL: This Note is secured by certain personal property collateral of the
Borrower as more thoroughly described in the Security Agreement (as defined in
the Business Loan Agreement).
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PRIOR TO SIGNING THIS NOTE BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.
BORROWER:
SONIC SOLUTIONS
By:
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Name:
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Title:
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