Document:

EXHIBIT
10.32

FULL-RECOURSE PROMISSORY
NOTE

 

 

	
  $360,000.00

  	
   

  	
  Sunnyvale, California

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated as of August
  21, 2001

  

 

 

FOR VALUE RECEIVED, the
undersigned, Charles E. Shalvoy, promises to pay to the order of Conductus, Inc., a Delaware corporation (the “Company”),
the principal sum of three hundred sixty thousand dollars ($360,000.00) with
interest from the date hereof on the unpaid principal as specified herein.  The entire unpaid balance of principal and
interest shall be due and payable on the earlier to occur of (l) August 22, 2006, or (2) termination of
employment with the Company.

 

The interest rate on this
note shall be an annual rate of interest equal to four and ninety-nine- hundredths percent (4.99%).  Interest shall be computed on the basis of a
year of 365 days and the actual number of days elapsed, except that interest
shall not be computed on the day of full repayment of this note.  Interest not paid when due shall earn
interest at the rate specified above.

 

If payment is not made
when due, and if action is instituted on this note, the undersigned agrees to
pay the Company reasonable attorneys’ fees and costs of suit, as fixed by
court.

 

The undersigned shall
have the right to prepay all or any part of the unpaid principal amount of this
note, without premium, at any time prior to the maturity hereof.

 

This note is a
full-recourse note originally secured by a pledge of shares of Common Stock of
the Company pursuant to a Security Agreement of even date herewith, which is on
file with the Secretary of the Company.

 

 

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This note shall be
governed by and construed in accordance with the laws of the State of California without regard to  California choice of law provisions.

 

IN WITNESS WHEREOF, the undersigned
has signed, dated and delivered this note as of the date and year first above
written.

 

 

	
   

  	
  /s/ Charles E. Shalvoy

  
	
   

  	
  Signature

  

 

 

 

 

 

 

 

 

 

 

 

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10.33

 

SECURITY AGREEMENT

THIS AGREEMENT, entered into as of August 21, 2001, between Conductus,
Inc., a Delaware
corporation (the “Company”), and the Shalvoy Family Trust (the “Trust”),

W I T N E S S E T H:

WHEREAS, the Trust has previously purchased from the Company and holds
full right and title to 117,634 shares of the Company’s Common Stock (the
“Shares”); and

WHEREAS, the Company has loaned to Charles E. Shalvoy (the “Borrower”)
the sum of $360,000.00 under a Promissory Note of even date herewith; and

WHEREAS, the Borrower has executed and delivered to the Company a
full-recourse promissory note evidencing such loan (the “Note”) and has agreed
to pledge all of the Shares to the Company as security for the payment of the
Note:

NOW, THEREFORE, it is agreed as follows:

1.             The Trust hereby delivers to the Company one or more
certificates representing the Shares, together with two Assignments Separate
From Certificate signed by the Trust. 
The Trust hereby pledges and grants a security interest in the Shares,
including any shares into which the Shares may be converted and all proceeds of
the Shares, as security for the timely payment of all of Borrower’s obligations
under the Note and for the Trust’s performance of all of its obligations under
this Agreement.  In the event of a
default in payment of the Note, the Trust hereby appoints the Company as its
true and lawful attorney to take such action as may be necessary or appropriate
to cause the Shares to be transferred into the name of the Company or any
assignee of the Company and to take any other action on behalf of the Trust
permitted hereunder or under applicable law.

2.             The Company agrees to hold the Shares as security for
the timely payment of all of the Borrower’s obligations under the Note and for
the Trust’s performance of all of its obligations under this Agreement, as
provided herein.  At no time shall the
Company dispose of or encumber the Shares, except as otherwise provided in this
Agreement.

3.             At all times while the Company is holding the Shares as
security under this Agreement, the Company shall:

                Collect any dividends that may
be declared on the Shares and credit such dividends against any accrued
interest or unpaid principal under the Note, as part payment;

                Collect and hold any shares that
may be issued upon conversion of the Shares; and

 

 

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                Collect and hold any other
securities or other property that may be distributed with respect to the
Shares.

Such shares and other securities or property shall be
subject to the security interest granted in Section 1 of this Agreement and
shall be held by the Company under this Agreement.

4.             While the Company holds the Shares as security under
this Agreement, the Trust shall have the right to vote the Shares at all
meetings of the Company’s share-holders; provided that the Trust is not in
default in the performance of any- term of this Agreement or in any payment due
under the Note.  In the event of such a
default, the Company shall have the right to the extent permitted by law to
vote and to give consents, ratifications and waivers and take any other action
with respect to the Shares with the same force and effect as if the Company
were the absolute and sole owner of the Shares.

5.             Upon payment in full of the outstanding principal
balance of the Note and all interest and other charges due under the Note, the
Company shall release from pledge and redeliver to the Trust the certificate(s)
representing the Shares and the Assignment Separate From Certificate forms,
provided all rights of repurchase under the terms of the stock option grant
shall have elapsed.

6.             In the event that the Trust fails to perform any term of
this Agreement or the Borrower fails to make any payment when due under the
Note, the Company shall have all of the rights and remedies of a creditor and
secured party at law and in equity, including (without limitation) the rights
and remedies provided under the Uniform Commercial Code.

Without limiting the foregoing, the Company may, after giving ten (10)
days’ prior written notice to the Trust by certified mail at his residence or
business address, sell any or all of the Shares in such manner and for such
price as the Company may determine, including (without limitation) through a
public or private sale or at any broker’s board or on any securities exchange,
for cash, upon credit or for future delivery. 
The Company is authorized at any such sale, if it deems it advisable to
do so, to restrict the prospective bidders or purchasers of any of the Shares
to persons who will represent and agree that they are purchasing for their own
account for investment, and not with a view to the distribution or sale of any
of the Shares, to restrict the prospective bidders or purchasers and the use
any purchasers may make of the Shares and impose any other restriction or
condition that the Company deems necessary or advisable under the federal and
state securities laws.

Upon any such sale the Company shall have the right to deliver, assign
and transfer to the purchaser thereof the Shares so sold.  Each purchaser at any such sale shall hold
the Shares so sold absolute, free from any claim or right of any kind.  In case of any sale of any or all of the
Shares on credit or for future delivery, the Shares so sold may be retained by
the Company until the selling price is paid by the purchaser thereof, but the
Company shall not incur any liability in case of the failure of such purchaser
to 

 

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take up and pay for the Shares so sold and, in case of
any such failure, such Shares may again be sold under the terms of this
section.

The Trust hereby agrees that any disposition of any or all of the
Shares by way of a private placement or other method which in the opinion of
the Company is required or advisable under Federal and state securities laws is
commercially reasonable.  At any public
sale, the Company may (if it is the highest bidder) purchase all or any part of
the Shares at such price as the Company deems proper.  Out of the proceeds of any sale, the Company may retain an amount
sufficient to pay all amounts then due under the Note, together with the
expenses of the sale and reasonable attorneys’ fees.  The Company shall pay the balance of such proceeds, if any, to
the Trust.  The Borrower shall be liable
for any deficiency that remains after the Company has exercised its rights
under this Agreement.

7.             This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to choice of law provisions.

This Agreement shall inure to the benefit of, and be binding upon, the
Company and its successors and assigns and be binding upon the Trust and the
Trust’s legal representative, heirs, legatees, distributees, assigns and
transferees by operation of law.

This Agreement contains the entire security agreement between the
Company and the Trust.

The Trust will execute any additional agreements, assignments or
documents or take any other actions reasonably required by the Company to
preserve and perfect the security interest in the Shares granted to the Company
herein and otherwise to effectuate this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer, and the Trustee has
personally executed this Agreement.

	
   

  	
  Conductus, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Ron Wilderink

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
  Shalvoy Family Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/  Charles E. Shalvoy, Tr

  
	
   

  	
  Charles E. Shalvoy, Trustee

  

 

 

 

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