Promissory Note - Verity Inc. and Anthony J. Bettencourt
PROMISSORY NOTE
January 2, 2001
$2,057,631.72
Sunnyvale, California
FOR VALUE RECEIVED, ANTHONY J. BETTENCOURT ("BORROWER"), an employee of
VERITY, INC. ("COMPANY"), hereby unconditionally promises to pay to the order
of Company, in lawful money of the United States of America and in immediately
available funds, the principal sum of Two Million, Fifty-seven Thousand, Six
Hundred and Thirty-one Dollars and Seventy-two Cents ($2,057,631.72) (the
"LOAN") together with accrued and unpaid interest thereon, each due and payable
on the dates and in the manner set forth below.
It is the intent of the parties that the purpose of this Note is not for
consumer, family or household purposes.
1. PRINCIPAL REPAYMENT. The outstanding principal amount of the Loan
shall be due and payable on May 31, 2001 (the "Maturity Date").
2. INTEREST RATE. Borrower further promises to pay interest on the
outstanding principal amount hereof from the date hereof until payment in full,
which interest shall be payable at the rate of five and ninety-four
one-hundredths percent (5.94%) per annum or the maximum rate permissible by law
(which under the laws of the State of California shall be deemed to be the laws
relating to permissible rates of interest on commercial loans), whichever is
less, and shall be compounded monthly. Interest shall be due and payable not
later than the Maturity Date and shall be calculated on the basis of a 360 day
year for the actual number of days elapsed.
3. PLACE OF PAYMENT. All amounts payable hereunder shall be payable at
the office of Company unless another place of payment shall be specified in
writing by Company.
4. APPLICATION OF PAYMENTS. Payment on this Note shall be applied first
to accrued interest, if any, and thereafter to the outstanding principal
balance hereof.
5. DEFAULT. Each of the following events shall be an "EVENT OF DEFAULT"
hereunder:
(a) Borrower fails to pay timely any of the principal amount due
under this Note on the date the same becomes due and payable or any accrued
interest or other amounts due under this note on the date the same becomes due
and payable;
(b) Borrower files a petition or action for relief under any
bankruptcy, insolvency or moratorium law or any other law for the relief of, or
relating to, debtors, now or hereafter in effect, or makes any assignment for
the benefit of creditors or takes any action in furtherance of any of the
foregoing;
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(c) An involuntary petition is filed against Borrower (unless such
petition is dismissed or discharged within sixty (60) days) under any
bankruptcy statute now or hereafter in effect, or a custodian, receiver,
trustee, assignee for the benefit of creditors (or other similar official) is
appointed to take possession, custody or control of any property of Borrower;
(d) Borrower's employment by or association with Company is terminated
for any reason or no reason, including, without limitation, death of Borrower.
Upon the occurrence of an Event of Default hereunder, all unpaid principal,
accrued interest and other amounts owing hereunder shall, at the option of the
Company, and, in the case of an Event of Default pursuant to (b) or (c) above,
automatically, be immediately due, payable and collectible by Company pursuant
to applicable law. Company shall have all rights and may exercise any remedies
available to it under law, successively or concurrently. Borrower expressly
acknowledges and agrees that Company shall have the right to offset any
obligations of Borrower hereunder against salaries, bonuses or other amounts
that may be payable to Borrower by Company.
6. WAIVER. Borrower waives presentment and demand for payment, notice of
dishonor, protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to
any demands hereunder is hereby waived to the full extent permitted by law.
7. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
8. SUCCESSORS AND ASSIGNS. The provisions of this Note shall inure to the
benefit of and be binding on any successor to Borrower and shall extend to any
holder hereof. Borrower shall not, without prior written consent of holder,
assign any of its rights or obligations hereunder.
BORROWER: /s/ ANTHONY J. BETTENCOURT
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Anthony J. Bettencourt
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