PROMISSORY NOTE SECURED BY DEED OF TRUST
$1,000,000 San Mateo, California
August 1, 1996
In installments as stated in this Note, for value received, Donald R.
Sellers and Jolice K. Sellers, husband and wife (together, "Borrowers"), hereby
promise to pay to SciClone Pharmaceuticals, Inc., a California corporation
("Lender") or order, at its offices at 901 Mariners Island Boulevard, San Mateo,
California, or at such other place as Lender may from time to time designate in
writing, the principal sum of one Million Dollars ($1,000,000), with interest on
the unpaid balance of principal from the date of this Note until paid at the
rate of eight percent (8.00%) per annum (the "Note Rate"), on the following
terms:
I. Payment: The principal and interest due pursuant to this Note shall be
paid as follows:
A. On September 1, 1996 and on the first day of each calendar
month thereafter, Borrowers shall pay to Lender equal monthly payments in the
amount of Seven Thousand Three Hundred Thirty Seven and 65/100 Dollars
($7,337.65).
B. The entire principal balance with all then unpaid accrued
interest shall be due and payable on or before July 31, 2001, unless the term
hereof is renewed as set forth herein. At the election of the Lender, the Lender
may extend the term of this Note, which extension shall be deemed effective upon
written notice from Lender to Borrowers delivered at any time before the initial
maturity date hereof, which notice shall state the extended maturity date
selected by Lender. As of the effective date of such notice, this Note shall be
extended on all the same terms and conditions as are set forth herein, except
for the extended maturity date.
C. Principal and interest shall be payable in lawful money of
the United States. Interest shall be calculated on the basis of a 360-day year
consisting of 12 thirty day months. Each payment shall be applied first to
interest then due and the balance of said installment shall be applied to the
principal sum.
D. This Note may be prepaid at any time, without penalty.
II. Security: This Note is secured by a deed of trust of even date herewith
made by Borrowers, as trustor, to North American Title Company, as trustee, for
Lender, as beneficiary (the "Deed of Trust"), encumbering certain real property
commonly known as 8 Acorn, Portola Valley, California (the "Property"), which
Borrowers occupy as their principal place of residence.
III. Default and Acceleration:
A. Unless otherwise prohibited by law, upon the occurrence of any of the
following events, the Holder of this Note shall have the option, without demand
or notice, to declare the entire balance of principal of this Note together with
all accrued interest to be immediately due and payable:
1. Borrowers default in the payment of principal or interest
when due pursuant to the terms hereof or default in the performance of any
obligation of Borrowers contained in the Deed of Trust or any other deed of
trust, security agreement or other agreement (including any amendment,
modification or extension thereof) which may hereafter be executed by Borrowers
for the purpose of securing this Note;
2. Borrowers voluntarily or by operation of law sell, convey,
assign, further encumber or otherwise transfer or agree to sell, convey or
otherwise transfer, all or substantially all, or any portion of, or Borrowers'
interest in the Property;
3. Ninety (90) days after the voluntary termination by Donald R.
Sellers of his employment with SciClone Pharmaceuticals, Inc.;
4. One hundred eighty (180) days after the termination of Donald
R. Sellers' employment by SciClone Pharmaceuticals, Inc. for Cause, as defined
below;
5. Three hundred sixty (360) days after the termination of
Donald R. Sellers' employment by SciClone Pharmaceuticals, Inc. without Cause.
As used herein, the employment of Donald R. Sellers shall be deemed terminated
for Cause if a primary factor in the termination of his employment is the
failure by Mr. Sellers to comply with the instructions of the Board of Directors
of SciClone Pharmaceuticals, Inc., gross negligence, willful misconduct, fraud
or conviction of any crime.
IV. Default Interest Rate: If Borrowers fail to make any payment within
fifteen (15) days after any such payment becomes due and payable, Borrowers
agree to pay interest on the late payment, including that portion of the late
payment which consists of past-due interest, at an annual rate (the "Default
Rate") of three (3) percent in excess of the Note Rate, from the date the
payment was due until Borrowers pays in full all sums due under this Note.
V. Attorneys' Fees: In the event of any default hereunder, Borrowers
hereby promise to pay all costs of collection, including reasonable attorney's
fees incurred by Lender hereof on account of such collection, whether or not
suit is filed hereon.
VI. Waiver: The waiver by Lender hereof of any breach of or default
under any term, covenant or condition contained herein or in any of the
agreements referred to above shall not be deemed to be a waiver or such term,
covenant or condition or any subsequent breach of or default under the same or
any other such term, covenant or condition.
VII. No Usury: It is the intent of Borrowers and Holder that the rate
of interest on the indebtedness evidenced hereby shall not exceed the maximum
rate permitted by applicable law and accordingly, if the rate of interest
specified herein, or any other payments specified herein or otherwise required
to be made by Borrowers or received by Holder in connection with the
indebtedness evidenced hereby and deemed to be interest, shall exceed the
maximum rate of interest permitted by applicable law then such payments, to the
extent they exceed such maximum rate, shall be deemed to have been made and
received inadvertently, and shall for all purposes be deemed to be a payment of
and on account of the principal balance of the indebtedness evidenced hereby and
shall be applied accordingly or, at Holder's option, returned to Borrowers.
VIII. General Provisions: This Note shall be governed by and construed
in accordance with the laws of the State of California. The makers, guarantors
and endorsers of this Note hereby severally waive presentment for payment,
protest and demand, notice of protest, demand and dishonor and nonpayment of
this Note, and consent that Lender may extend the time for payment or otherwise
modify the terms of payment of any part or 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. Borrowers hereby waive the
defense of the statute of limitations in any action on this Note to the extent
permitted by law.
Borrowers:
Donald R. Sellers
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Donald R. Sellers
Jolice K. Sellers
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Jolice K. Sellers