Note Secured by Stock Pledge Agreement - Digital Island Inc. and Ron Higgins
DIGITAL ISLAND, INC.
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NOTE SECURED BY STOCK PLEDGE AGREEMENT
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$86,400.00 April 21, 1999
San Francisco, California
FOR VALUE RECEIVED, Ron Higgins ("Maker") promises to pay to the order
of Digital Island, Inc. (the "Corporation"), at its corporate offices at 353
Sacramento Street, Suite 1520, San Francisco, California, 94111, the principal
sum of Eighty Six Thousand Four Hundred Dollars ($86,400.00), together with all
accrued interest thereon, upon the terms and conditions specified below.
1. Principal. The principal balance of this Note shall become due
and payable in one lump sum on April 20, 2003.
2. Interest. Interest shall accrue on the unpaid balance outstanding
from time to time under this Note at the rate of 7.75% per annum, compounded
semi-annually. Accrued interest shall be payable in a series of sixteen (16)
successive equal quarterly installments over the four (4)-year period measured
from the April 21, 1999 execution date of this Note. The first such installment
shall become due and payable on July 20, 1999, and the last such installment
shall become due and payable on April 20, 2003.
3. Payment. Payment shall be made in lawful tender of the United
States and shall be applied first to the payment of all accrued and unpaid
interest and then to the payment of principal. Prepayment of the principal
balance of this Note, together with all accrued and unpaid interest, may be made
in whole or in part at any time without penalty.
4. Events of Acceleration. The entire unpaid principal balance of
this Note, together with all accrued and unpaid interest, shall become
immediately due and payable prior to the specified due date of this Note upon
the occurrence of one or more of the following events:
A. the failure of the Maker to pay any installment of accrued
interest under this Note when due and the continuation of such default for
more than thirty (30) days; or
B. the expiration of the thirty (30)-day period following the
date the Maker ceases for any reason to remain in the service of the
Corporation; or
C. the insolvency of the Maker, the commission of any act of
bankruptcy by the Maker, the execution by the Maker of a general assignment
for the benefit of creditors, the filing by or against the Maker of any
petition in bankruptcy or any petition for relief under the provisions of
the Federal
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bankruptcy act or any other state or Federal law for the relief of debtors
and the continuation of such petition without dismissal for a period of
thirty (30) days or more, the appointment of a receiver or trustee to take
possession of any property or assets of the Maker or the attachment of or
execution against any property or assets of the Maker; or
D. the occurrence of any event of default under the Stock Pledge
Agreement securing this Note or any obligation secured thereby.
5. Special Acceleration Event. In the event the Maker sells or
otherwise transfers for value one or more shares of the Corporation's common
stock purchased with the proceeds of this Note, then any unpaid portion of the
principal balance of this Note attributable to the purchase price of those
shares shall become immediately due and payable, together with all accrued and
unpaid interest on that principal portion.
6. Services. For purposes of applying the provisions of this Note,
the Maker shall be considered to remain in the service of the Corporation for so
long as the Maker renders services as (i) an employee of the Corporation or any
successor entity or one or more of the Corporation's fifty percent (50%)-or-more
owned subsidiaries, (ii) a member of the Corporation's Board of Directors or the
board of directors of any successor entity or (iii) an independent consultant to
the Corporation or any successor entity.
7. Security. The proceeds of the loan evidenced by this Note shall
be applied solely to the payment of the purchase price of shares of the
Corporation's common stock, and payment of this Note shall be secured by a
pledge of those shares with the Corporation pursuant to the Stock Pledge
Agreement to be executed this date by the Maker. The Maker, however, shall
remain personally liable for payment of this Note and assets of the Maker, in
addition to the collateral under the Stock Pledge Agreement, may be applied to
the satisfaction of the Maker's obligations hereunder.
8. Collection. If action is instituted to collect this Note, the
Maker promises to pay all costs and expenses (including reasonable attorney
fees) incurred in connection with such action.
9. Waiver. A waiver of any term of this Note, the Stock Pledge
Agreement or of any of the obligations secured thereby must be made in writing
and signed by a duly-authorized officer of the Corporation and any such waiver
shall be limited to its express terms.
No delay by the Corporation in acting with respect to the terms of
this Note or the Stock Pledge Agreement shall constitute a waiver of any breach,
default, or failure of a condition under this Note, the Stock Pledge Agreement
or the obligations secured thereby.
The Maker waives presentment, demand, notice of dishonor, notice of
default or delinquency, notice of acceleration, notice of protest and
nonpayment, notice of costs, expenses or losses and interest thereon, notice of
interest on interest and diligence in taking any action to collect any sums
owing under this Note or in proceeding against any of the rights or interests in
or to properties securing payment of this Note.
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10. Conflicting Agreements. In the event of any inconsistencies
between the terms of this Note and the terms of any other document related to
the loan evidenced by the Note, the terms of this Note shall prevail.
11. Governing Law. This Note shall be construed in accordance with
the laws of the State of California without resort to that State's conflict-of-
laws rules.
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RON HIGGINS, MAKER
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