EXHIBIT 10.4
Dated: October 20, 1999
SECURED PROMISSORY NOTE
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FOR VALUE RECEIVED, the undersigned hereby promises to pay to Sycamore
Networks, Inc., a Delaware corporation with its principal offices in Chelmsford,
Massachusetts ("Sycamore"), or order, the principal sum of ninety-nine thousand
nine hundred and seventy eight ($99,978) Dollars on or prior to December 1,
2000, (the "Maturity Date") or on such earlier date on which the undersigned's
employment with Sycamore terminates for any reason.
The outstanding principal balance hereunder shall, commencing on the date
hereof, bear interest at the rate of eight and one quarter percent (8.25%) per
annum. In the event this Note is paid in full prior to the Maturity Date, the
undersigned shall also on the date of such prepayment pay an amount equal to all
accrued but unpaid interest, plus all interest which would have accrued and been
payable through the Maturity Date had the principal sum of this Note been paid
in accordance with the terms of this Note as set forth in the first paragraph of
this Note, or such lesser amount as may be required by law. This Note is a full
recourse obligation. Further, the obligation to pay the interest and principal
on account of this Note is secured by a pledge of 2,631 shares of Common Stock
of Sycamore, pursuant to a Security and Pledge Agreement of even date hereof
which Security and Pledge Agreement sets forth the rights and obligations of the
parties in the event of default as defined in said Pledge Agreement. Further,
this Note shall become immediately due and payable without notice or demand upon
the occurrence at any time of any event of default under the Security and Pledge
Agreement.
Payment of principal and interest hereunder shall be made in lawful money
of the United States at the offices of Sycamore, 10 Elizabeth Drive, Chelmsford,
Massachusetts.
Maker of this Note hereby waives notice, presentation, and demand and shall
be liable for all reasonable expenses of collection in the event of default
including counsel fees of the Payee. All rights and obligations hereunder shall
be governed by the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the undersigned has executed the within Note under seal
as of the date first above-mentioned.
______________________________ ______________________________
Witness [signature of maker]
______________________________
Print Name
SECURITY AND PLEDGE AGREEMENT
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This is a Pledge Agreement made as of the 20th day of October, 1999
between Kevin Oye, an individual residing at 14 Upper Warren Way Warren NJ,
07059 ("Pledgor") and Sycamore Networks, Inc., a Delaware corporation with its
principal office at 10 Elizabeth Drive, Chelmsford, Massachusetts ("Pledgee").
1. Pledge of Collateral. Pledgor hereby grants Pledgee a security
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interest in the shares of Sycamore Networks, Inc. Common Stock ("Shares")
identified in Exhibit A, annexed hereto, which Pledgor has delivered to Pledgee,
as well as such other instruments, documents, stock certificates, money and
goods as may come into Pledgee's possession from time to time, whether through
delivery by Pledgor or otherwise (the "Collateral").
2. Obligations Secured. The security interest in the Collateral granted
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hereby secures payment and performance of all debts, loans and liabilities of
Pledgor to Pledgee arising out of a promissory note from Pledgor to Pledgee of
even date herewith in the principal amount of ninety-nine thousand nine hundred
and seventy-eight thousand ($99,978) Dollars (the "Note"), together with all
interests, fees, charges and expenses with respect to such debt, loan or
liability (the "Obligations").
3. Pledgee's Rights and Duties with Respect to the Collateral. Pledgee's
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only duty with respect to the Collateral shall be to exercise reasonable care to
secure the safe custody thereof. Pledgee shall have the right but not the
obligation to (a) demand, sue for, receive and collect all money or money
damages payable on account of any Collateral, (b) protect, preserve or assert
any other rights of Pledgor or take any other action with respect to the
Collateral, (c) pay any taxes, liens, assessments, insurance premiums or other
charges pertaining to Collateral. Any expenses incurred by Pledgee under the
preceding sentence shall be paid by Pledgor upon demand, become part of the
Obligations secured by the Collateral and bear interest at the rate provided in
the Note until paid. Pledgee shall be relieved of all responsibility for the
Collateral upon surrendering it to Pledgor.
4. Pledgor's Warranties and Indemnity. Pledgor represents, warrants and
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covenants (a) that he is and will be the lawful owner of the Collateral, (b)
that the Collateral is and will remain free and clear of all liens, encumbrances
and security interests other than the security interest granted by Pledgor
hereunder, and (c) that Pledgor has the sole right and lawful authority to
pledge the Collateral and otherwise to comply with the provisions hereof. In
the event that any adverse claim is asserted in respect of the Collateral or any
portion thereof, except such as may result from an act of Pledgee not authorized
hereunder, Pledgor promises and agrees to indemnify Pledgee and hold Pledgee
harmless from and against any losses, liabilities, damages, expenses, costs and
reasonable counsel fees incurred by Pledgee in exercising any right, power or
remedy of Pledgee hereunder or defending, protecting or enforcing the security
interests created hereunder. Any such loss, liability or expense so incurred
shall be paid by
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Pledgor upon demand, become part of the Obligations secured by the Collateral
and bear interest at the rate provided in the Note until paid.
5. Voting of Collateral. While Pledgor is not in default hereunder,
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Pledgor may vote shares pledged as Collateral.
6. Dividends and Other Distributions. While Pledgor is not in default
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hereunder, Pledgor may receive cash dividends and other cash distributions
payable with respect to Collateral. Pledgor shall cause all non-cash dividends
and distributions with respect to Collateral to be distributed directly to
Pledgee, to be held by Pledgee as additional Collateral, and if any such
distribution is made to Pledgor he shall receive such distribution in trust for
Pledgee and shall immediately transfer it to Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
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occurrence of any of the following events:
(a) If Pledgor is not paying his debts as they become due, becomes
insolvent, files or has filed against him a petition under any chapter of the
United States Bankruptcy Code, 11 U.S.C. (S)101 et seq. (or any similar
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petition under any insolvency law of any jurisdiction), proposes any
liquidation, composition or financial reorganization with his creditors, makes
an assignment or trust mortgage for the benefit of creditors, or if a receiver,
trustee, custodian or similar agent is appointed or takes possession with
respect to any property or business of Pledgor;
(b) If Pledgor dies;
(c) If any lien, encumbrance or adverse claim of any nature whatsoever is
asserted with respect to any Collateral;
(d) If any warranty of Pledgor hereunder is or shall become false;
(e) If Pledgor fails to fulfill any obligation hereunder;
(f) If Pledgor fails to pay or perform any of the Obligations when such
payment of performance is due.
8. Pledgee's Rights Upon Default. Upon the occurrence of any default as
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defined in the preceding section, Pledgee may, if Pledgee so elects in its sole
option, subject at times to compliance with the securities law and regulations
of the United States:
(a) at any time and from time to time sell, assign and deliver the whole
or any part of the Collateral at a sale through a broker in a public market
where securities of the type constituting such Collateral are usually traded,
without any advertisement, presentment, demand for performance, protest, nature
of protest, notice of dishonor or any other notice;
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(b) at any time and from time to time sell, assign and deliver all or any
part of the Collateral, or any interest therein, at any other public or private
sale, for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or prices and
on such terms as Pledgee in its absolute discretion may determine, provided that
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(i) at least ten days' notice of the time and place of any such sale shall be
given to Pledgor, and (ii) in the case of any private sale, such notice shall
also contain the terms of the proposed sale and Pledgee shall sell the
Collateral proposed to be sold to any purchaser procured by Pledgor who is
ready, willing and able to purchase, and who prior to the time of such sale
tenders the purchase price of, such Collateral on terms more favorable to
Pledgee than the terms contained in such notice;
(c) exercise the right to vote, the right to receive cash dividends and
other distributions, and all other rights with respect to the Collateral as
though Pledgee were the absolute owner thereof, whether or not such rights were
retained by Pledgor as against Pledgee before default; and
(d) exercise all other rights available to a secured party under the
Uniform Commercial Code and other applicable law.
9. Application of Sale Proceeds. In the event of a sale of Collateral,
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the proceeds shall first be applied to the payment of the expenses of the sale,
including brokers' commissions, counsel fees, any taxes or other charges imposed
by law upon the Collateral or the transfer thereof and all other charges paid or
incurred by Pledgee pertaining to the sale; and, second, to satisfy outstanding
Obligations, in the order in which Pledgee elects in its sole discretion; and,
third, the surplus (if any) shall be paid to Pledgor.
10. Notices. All notices made or required to be made hereunder shall be
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sent by United States first class or certified or registered mail, with postage
prepaid, by prepaid Federal Express, next day delivery, or delivered by hand to
Pledgee or to Pledgor at the addresses first above written. Notice by mail or
Federal Express shall be deemed to have been made on the date when the notice is
deposited in the mail.
11. Heirs, Successors, Etc.. This Pledge Agreement and all of its terms
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and provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto. If
this Pledge Agreement is executed by more than one Pledgor, then (a)
"Obligations" shall include the Obligations of either or both of the Pledgors,
(b) Pledgors shall be in default if any of the events described in Section 7
above takes place with respect to either Pledgor, (c) any notice required of
Pledgee shall be given to both Pledgors and (d) all Pledgors' covenants,
warranties and representations hereunder shall be joint and several.
12. Pledgee's Forbearance. Any forbearance, failure or delay by Pledgee
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in exercising any right, power or remedy hereunder shall not be deemed a waiver
of such right,
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power or remedy. Any single or partial exercise of any right, power or remedy of
Pledgee shall continue in full force and effect until such right, power or
remedy is specifically waived in writing by Pledgee.
EXECUTED under seal at Chelmsford, Massachusetts, as of the date first
above written.
_________________________
[signature]
_________________________
[print name]
Agreed:
Sycamore Networks, Inc.
By:____________________
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Exhibit A to Security and Pledge Agreement
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2,631 Shares of Sycamore Networks, Inc. Common Stock
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