Document:

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                                                                   Exhibit 10.15

             MAGMA DESIGN AUTOMATION, INC. 1998 STOCK INCENTIVE PLAN

                          NOTICE OF STOCK OPTION GRANT

       You have been granted the following option to purchase Common Stock of
MAGMA DESIGN AUTOMATION, INC., a Delaware corporation (the "Company"):

Name of Optionee:                   Craig Wentzel

Total Number of Shares Granted:     178,000

Type of Option:                      _ Incentive Stock Option
                                     X Nonstatutory Stock Option
                                     -

Exercise Price Per Share:           $4.50

Date of Grant:                      February 28, 2001

Date Exercisable:                   This option may be exercised, in whole or in
                                    part, for 100% of the Shares subject to this
                                    option at any time after the Date of Grant.

Vesting Commencement Date:          February 26, 2001

Vesting Schedule:                   Subject to the terms and conditions of the
                                    attached Stock Option Agreement, this option
                                    will vest, and if you exercise before this
                                    option is vested, the Right of Repurchase
                                    shall lapse, with respect to 1/48th of the
                                    Shares subject to this option, upon your
                                    completion of each full month of Service
                                    from the Vesting Commencement Date, for full
                                    vesting on the fourth anniversary of the
                                    Vesting Commencement Date.

Acceleration Events (if any):       Subject to the terms and conditions of the
                                    attached Stock Option Agreement, this option
                                    will vest, and if you exercise before this
                                    option is vested, the Right of Repurchase
                                    shall lapse, with respect to 50% of the
                                    Shares subject to the option, upon a "Change
                                    of Control", followed by either an
                                    involuntary Termination without "Cause" or
                                    "Constructive Termination" within 12 months
                                    of such "Change in Control", as such terms
                                    are defined in the Attachment To Notice of
                                    Stock Option Grant, attached hereto.

                                    Further, you are eligible for accelerated
                                    vesting of up to 80,000 option shares, based
                                    upon achievement of specific bookings
                                    objectives, as outlined in your offer letter
                                    dated February 2, 2001.

Expiration Date:                    February 28, 2011
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      By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the 1998 Stock Incentive Plan and the attached Stock
Option Agreement, both of which are made a part of this document.

OPTIONEE                                  MAGMA DESIGN AUTOMATION, INC.

/s/ Craig Wentzel                         By /s/ Rajeev Madhavan
------------------------------------         -----------------------------------
                                                 Rajeev Madhavan, President
Craig Wentzel
------------------------------------
            Print Name

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THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION AND
QUALIFICATION THEREOF UNDER SUCH ACT AND LAWS OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION AND
QUALIFICATION IS NOT REQUIRED.

            MAGMA DESIGN AUTOMATION, INC. 1998 STOCK INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

      1. Grant of Option.

      (a) Option. On the terms and conditions set forth in the Notice of Stock
Option Grant and this Agreement, the Company grants to the Optionee on the Date
of Grant the option to purchase at the Exercise Price the number of Shares set
forth in the Notice of Stock Option Grant. The Exercise Price is agreed to be at
least one hundred percent (100%) of the Fair Market Value per Share on the Date
of Grant (one hundred ten percent (110%) of Fair Market Value if Section 4(b) of
the Plan applies). This option is intended to be an ISO or a Nonstatutory
Option, as provided in the Notice of Stock Option Grant.

      (b) Stock Plan and Defined Terms. This option is granted pursuant to the
Plan, a copy of which the Optionee acknowledges having received. The provisions
of the Plan are incorporated into this Agreement by this reference. Each
capitalized term not otherwise defined in this Agreement shall have the meaning
as defined in Section 2 of the Plan.

      2. Right to Exercise. Subject to Section 9 below and the other conditions
set forth in this Agreement, all or part of this option may be exercised (prior
to its expiration) at the time or times set forth in the Notice of Stock Option
Grant. Shares purchased by exercising this option may be subject to the Right of
Repurchase under Section 7.

      3. No Transfer or Assignment of Option. Except as otherwise provided in
this Agreement, this option and the rights and privileges conferred hereby shall
not be sold, pledged or otherwise transferred (whether by operation of law or
otherwise) and shall not be subject to sale under execution, attachment, levy or
similar process.

      4. Exercise Procedures.

      (a) Notice of Exercise. The Optionee or the Optionee's representative may
exercise this option by giving written notice to the Company pursuant to Section
13(c) in the form attached to this Agreement as Exhibit A. The notice shall
specify the number of Shares for which it is being exercised and the form of
payment. The notice shall be signed by the person exercising this option. In the
event that this option is being exercised by the representative of the Optionee,
the notice shall be accompanied by proof (satisfactory to the Company) of the
representative's right

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to exercise this option. The Optionee or the Optionee's representative shall
deliver to the Company, at the time of giving the notice, payment in a form
permissible under Section 5 for the full amount of the Purchase Price.

      (b) Issuance of Shares. After receiving a proper notice of exercise, and
upon determining the Optionee's compliance with the provisions of Section 10
below, the Company shall cause to be issued a certificate or certificates for
the Shares as to which this option has been exercised, registered in the name of
the person exercising this option (or in the names of such person and his or her
spouse as community property or as joint tenants with right of survivorship).
The Company shall cause such certificate or certificates to be deposited in
escrow or delivered to or upon the order of the person exercising this option.

      (c) Withholding Taxes. In the event that the Company determines that it is
required to withhold any tax as a result of the exercise of this option, the
Optionee, as a condition to the exercise of this option, shall make arrangements
satisfactory to the Company to enable it to satisfy all withholding
requirements. The Optionee shall also make arrangements satisfactory to the
Company to enable it to satisfy any withholding requirements that may arise in
connection with the vesting or disposition of Shares purchased by exercising
this option.

      5. Payment for Stock.

      (a) Cash. All or part of the Purchase Price may be paid in cash or cash
equivalents.

      (b) Surrender of Stock. All or part of the Purchase Price may be paid by
the surrender of Shares in good form for transfer. Such Shares must have a fair
market value (as determined by the Board of Directors) on the date of exercise
of this option which, together with any amount paid in another form permissible
under this Section 5, is equal to the Purchase Price. The Optionee shall not
surrender Shares in payment of the Exercise Price if such surrender would cause
the Company to recognize compensation expense with respect to the option for
financial reporting purposes.

      (c) Exercise/Sale. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company.

      (d) Exercise/Pledge. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company.

      6. Term and Expiration.

      (a) Basic Term. This option shall in any event expire on the expiration
date set forth in the Notice of Stock Option Grant, which date is ten (10) years
after the Date of Grant (five (5) years after the Date of Grant if this option
is designated as an ISO in the Notice of Stock Option Grant and Section 4(b) of
the Plan applies).

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      (b) Termination of Service (Except by Death). If the Optionee's Service
terminates for any reason other than death, then this option shall expire at the
close of business at Company headquarters on the earliest of the following
occasions:

            (i) The expiration date determined pursuant to Subsection (a) above;

            (ii) The date one (1) month after the termination of the Optionee's
      Service for any reason other than Disability; or

            (iii) The date six (6) months after the termination of the
      Optionee's Service by reason of Disability.

The Optionee may exercise all or part of this option at any time before its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable before the Optionee's Service terminated. When the
Optionee's Service terminates, this option shall expire immediately with respect
to the number of Shares for which this option is not yet exercisable and with
respect to any Restricted Shares. In the event that the Optionee dies after
termination of Service but before the expiration of this option, all or part of
this option may be exercised (prior to expiration) by the executors or
administrators of the Optionee's estate or by any person who has acquired this
option directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that this option had become exercisable
before the Optionee's Service terminated.

      (c) Death of the Optionee. If the Optionee dies while in Service, then
this option shall expire at the close of business at Company headquarters on the
earlier of the following dates:

            (i) The expiration date determined pursuant to Subsection (a) above;
      or

            (ii) The date six (6) months after the Optionee's death.

All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this option directly from
the Optionee by beneficiary designation, bequest or inheritance, but only to the
extent that this option had become exercisable before the Optionee's death. When
the Optionee dies, this option shall expire immediately with respect to the
number of Shares for which this option is not yet exercisable and with respect
to any Restricted Shares.

      (d) Leaves of Absence. For any purpose under this Agreement, Service shall
be deemed to continue while the Optionee is on a bona fide leave of absence, if
such leave was approved by the Company in writing and if continued crediting of
Service for such purpose is expressly required by the terms of such leave or by
applicable law (as determined by the Company).

      (e) Notice Concerning ISO Treatment. If this option is designated as an
ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax
treatment as an ISO to the extent it is exercised (i) more than three (3) months
after the date the Optionee ceases to be an Employee for any reason other than
death or permanent and total disability (as defined in section 22(e)(3) of the
Code), (ii) more than twelve (12) months after the date the Optionee ceases to
be an Employee by reason of such permanent and total disability or (iii) after
the Optionee has been

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on a leave of absence for more than ninety (90) days, unless the Optionee's
reemployment rights are guaranteed by statute or by contract.

      7. Right of Repurchase.

      (a) Scope of Repurchase Right. Unless they have become vested in
accordance with the Notice of Stock Option Grant and Subsection (c) below, the
Shares acquired under this Agreement initially shall be "Restricted Shares" and
shall be subject to a right (but not an obligation) of repurchase by the
Company. The Optionee shall not transfer, assign, encumber or otherwise dispose
of any Restricted Shares, except as provided in the following sentence. The
Optionee may transfer Restricted Shares (i) by beneficiary designation, will or
intestate succession.

      (b) Condition Precedent to Exercise. The Right of Repurchase shall be
exercisable only during the sixty (60) day period next following the later of:

            (i) The date when the Optionee's Service terminates for any reason,
      with or without cause, including (without limitation) death or disability;
      or

            (ii) The date when this option was exercised by the Optionee, the
      executors or administrators of the Optionee's estate or any person who has
      acquired this option directly from the Optionee by bequest, inheritance or
      beneficiary designation.

      (c) Lapse of Repurchase Right. The Right of Repurchase shall lapse with
respect to the Shares subject to this option in accordance with the vesting
schedule and acceleration provisions, if any, set forth in the Notice of Stock
Option Grant.

      (d) Repurchase Cost. If the Company exercises the Right of Repurchase, it
shall pay the Optionee an amount equal to the Exercise Price for each of the
Restricted Shares being repurchased.

      (e) Exercise of Repurchase Right. The Right of Repurchase shall be
exercisable only by written notice delivered to the Optionee prior to the
expiration of the sixty (60) day period specified in Subsection (b) above. The
notice shall set forth the date on which the repurchase is to be effected. Such
date shall not be more than thirty (30) days after the date of the notice. The
certificate(s) representing the Restricted Shares to be repurchased shall, prior
to the close of business on the date specified for the repurchase, be delivered
to the Company properly endorsed for transfer. The Company shall, concurrently
with the receipt of such certificate(s), pay to the Optionee the purchase price
determined according to Subsection (d) above. Payment shall be made in cash or
cash equivalents or by canceling indebtedness to the Company incurred by the
Optionee in the purchase of the Restricted Shares. The Right of Repurchase shall
terminate with respect to any Restricted Shares for which it has not been timely
exercised pursuant to this Subsection (e).

      (f) Additional Shares or Substituted Securities. In the event of the
declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a

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spin-off, a stock split, an adjustment in conversion ratio, a recapitalization
or a similar transaction affecting the Company's outstanding securities without
receipt of consideration, any new, substituted or additional securities or other
property (including money paid other than as an ordinary cash dividend) which
are by reason of such transaction distributed with respect to any Restricted
Shares or into which such Restricted Shares thereby become convertible shall
immediately be subject to the Right of Repurchase. Appropriate adjustments to
reflect the distribution of such securities or property shall be made to the
number and/or class of the Restricted Shares. Appropriate adjustments shall
also, after each such transaction, be made to the price per share to be paid
upon the exercise of the Right of Repurchase in order to reflect any change in
the Company's outstanding securities effected without receipt of consideration
therefor; provided, however, that the aggregate purchase price payable for the
Restricted Shares shall remain the same.

      (g) Termination of Rights as Stockholder. If the Company makes available,
at the time and place and in the amount and form provided in this Agreement, the
consideration for the Restricted Shares to be repurchased in accordance with
this Section 7, then after such time the person from whom such Restricted Shares
are to be repurchased shall no longer have any rights as a holder of such
Restricted Shares (other than the right to receive payment of such consideration
in accordance with this Agreement). Such Restricted Shares shall be deemed to
have been repurchased in accordance with the applicable provisions hereof,
whether or not the certificate(s) therefor have been delivered as required by
this Agreement.

      (h) Escrow. Upon issuance following exercise, the certificates for
Restricted Shares shall be deposited in escrow with the Company to be held in
accordance with the provisions of this Agreement. Each deposited certificate
shall be accompanied by a duly executed Assignment Separate from Certificate in
the form attached hereto as Exhibit B. Any new, substituted or additional
securities or other property described in Subsection (f) above shall immediately
be delivered to the Company to be held in escrow, but only to the extent the
Shares are at the time Restricted Shares. All regular cash dividends, if any, on
Restricted Shares (or other securities at the time held in escrow) shall be paid
directly to the Optionee and shall not be held in escrow. Restricted Shares,
together with any other assets or securities held in escrow hereunder, shall be
(i) surrendered to the Company for repurchase and cancellation upon the
Company's exercise of its Right of Repurchase or Right of First Refusal or (ii)
released to the Optionee upon the Optionee's request to the extent the Shares
are no longer Restricted Shares (but not more frequently than once every six (6)
months). In any event, all Shares which have vested (and any other vested assets
and securities attributable thereto) shall be released within sixty (60) days
after the earlier of (A) the Optionee's cessation of Service or (B) the lapse of
the Right of First Refusal.

      (i) Section 83(b) Election. Under section 83 of the Internal Revenue Code
of 1986, as amended (the "Code"), the different between the Exercise Price paid
for the Shares and their fair market value on the date any forfeiture
restrictions applicable to such Shares lapse will be reportable as ordinary
income at that time. For this purposes, "forfeiture restrictions" include the
Company's Right of Repurchase described above. The Optionee may elect to be
taxed at the time Restricted Shares are acquired to the extent the fair market
value of the Restricted Shares differs from the Exercise Price rather than when
such Restricted Shares cease to be subject to such forfeiture restrictions, by
filing an election under section 83(b) of the Code with the Internal Revenue
Service within thirty (30) days after the date of exercise. The form for making
this

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election is attached as Exhibit C hereto. Failure to make this filing within the
thirty (30) day period will result in the recognition of ordinary income by the
Optionee (in the event the fair market value of the Shares increases after the
date of exercise) as the forfeiture restrictions lapse. OPTIONEE ACKNOWLEDGES
THAT IT IS HIS/HER SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE A TIMELY
ELECTION UNDER SECTION 83(B), EVEN IF OPTIONEE REQUESTS THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON HIS/HER BEHALF. OPTIONEE IS RELYING
SOLELY ON HIS/HER OWN ADVISORS WITH RESPECT TO THE DECISION AS TO WHETHER OR NOT
TO FILE AN 83(B) ELECTION.

      8. Right of First Refusal.

      (a) Right of First Refusal. In the event that the Optionee proposes to
sell, pledge or otherwise transfer to a third party any Shares acquired under
this Agreement, or any interest in such Shares, the Company shall have the Right
of First Refusal with respect to all (and not less than all) of such Shares. If
the Optionee desires to transfer Shares acquired under this Agreement, the
Optionee shall give a written Transfer Notice to the Company describing fully
the proposed transfer, including the number of Shares proposed to be
transferred, the proposed transfer price, the name and address of the proposed
Transferee and proof satisfactory to the Company that the proposed sale or
transfer will not violate any applicable federal or state securities laws. The
Transfer Notice shall be signed both by the Optionee and by the proposed
Transferee and must constitute a binding commitment of both parties to the
transfer of the Shares. The Company shall have the right to purchase all, and
not less than all, of the Shares on the terms of the proposal described in the
Transfer Notice (subject, however, to any change in such terms permitted under
Subsection (b) below) by delivery of a notice of exercise of the Right of First
Refusal within thirty (30) days after the date when the Transfer Notice was
received by the Company. The Company's rights under this Subsection (a) shall be
freely assignable, in whole or in part.

      (b) Transfer of Shares. If the Company fails to exercise its Right of
First Refusal within thirty (30) days after the date when it received the
Transfer Notice, the Optionee may, not later than ninety (90) days following
receipt of the Transfer Notice by the Company, conclude a transfer of the Shares
subject to the Transfer Notice on the terms and conditions described in the
Transfer Notice, provided that any such sale is made in compliance with
applicable federal and state securities laws and not in violation of any other
contractual restrictions to which the Optionee is bound. Any proposed transfer
on terms and conditions different from those described in the Transfer Notice,
as well as any subsequent proposed transfer by the Optionee, shall again be
subject to the Right of First Refusal and shall require compliance with the
procedure described in Subsection (a) above. If the Company exercises its Right
of First Refusal, the parties shall consummate the sale of the Shares on the
terms set forth in the Transfer Notice within sixty (60) days after the date
when the Company received the Transfer Notice (or within such longer period as
may have been specified in the Transfer Notice); provided, however, that in the
event the Transfer Notice provided that payment for the Shares was to be made in
a form other than cash or cash equivalents paid at the time of transfer, the
Company shall have the option of paying for the Shares with cash or cash
equivalents equal to the present value of the consideration described in the
Transfer Notice.

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      (c) Additional Shares or Substituted Securities. In the event of the
declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the
Company's outstanding securities without receipt of consideration, any new,
substituted or additional securities or other property (including money paid
other than as an ordinary cash dividend) which are by reason of such transaction
distributed with respect to any Shares subject to this Section 8 or into which
such Shares thereby become convertible shall immediately be subject to this
Section 8. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number and/or class of the Shares
subject to this Section 8.

      (d) Termination of Right of First Refusal. Any other provision of this
Section 8 notwithstanding, in the event that the Stock is readily tradable on an
established securities market when the Optionee desires to transfer Shares, the
Company shall have no Right of First Refusal, and the Optionee shall have no
obligation to comply with the procedures prescribed by Subsections (a) and (b)
above.

      (e) Permitted Transfers. This Section 8 shall not apply to (i) a transfer
by beneficiary designation, will or intestate succession or (ii) a transfer to
the Optionee's spouse, children or grandchildren or to a trust established by
the Optionee for the benefit of the Optionee or the Optionee's spouse, children
or grandchildren, provided in either case that the Transferee agrees in writing
on a form prescribed by the Company to be bound by all provisions of this
Agreement, including without limitation the Market Stand-off provisions of
Section 11(b) below. If the Optionee transfers any Shares acquired under this
Agreement, either under this Subsection (e) or after the Company has failed to
exercise the Right of First Refusal, then this Section 8 shall apply to the
Transferee to the same extent as to the Optionee.

      (f) Termination of Rights as Stockholder. If the Company makes available,
at the time and place and in the amount and form provided in this Agreement, the
consideration for the Shares to be purchased in accordance with this Section 8,
then after such time the person from whom such Shares are to be purchased shall
no longer have any rights as a holder of such Shares (other than the right to
receive payment of such consideration in accordance with this Agreement). Such
Shares shall be deemed to have been purchased in accordance with the applicable
provisions hereof, whether or not the certificate(s) therefor have been
delivered as required by this Agreement.

      9. Limited Irrevocable Proxy. As a condition to the issuance of the Shares
as to which this option has been exercised, the Optionee shall execute and
deliver to the Company a Limited Irrevocable Proxy (the "Proxy") in
substantially the form attached as Exhibit D hereto, such Proxy shall be
irrevocable for the period specified therein pursuant to the provisions of the
Delaware General Corporation Law, and it is hereby acknowledged that such Proxy,
when given, shall be given for a good and valuable consideration and to secure
the performance of the Optionee's agreement, hereby made, to vote the Shares in
accordance with the Proxy.

      10. Legality of Initial Issuance. No Shares shall be issued upon the
exercise of this option unless and until the Company has determined that:

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      (a) It and the Optionee have taken any actions required to register the
Shares under the Securities Act or to perfect an exemption from the registration
requirements thereof;

      (b) Any applicable listing requirement of any stock exchange on which
Stock is listed has been satisfied;

      (c) Any other applicable provision of state or federal law has been
satisfied; and

      (d) The Optionee has executed and delivered the Notice of Exercise, the
Proxy and, if applicable, the Assignment Separate from Certificate relating to
the Shares to be issued.

      Any other provision of this Agreement notwithstanding, in the event the
Plan is not approved by the Company's shareholders within one (1) year of the
date the Plan was adopted by the Company's board of directors, any exercises of
this option and purchases of Shares pursuant thereto shall automatically be
deemed null and void and the Company shall have the right thereupon to cancel
the certificate(s) representing any such Shares so acquired upon its
reimbursement to the Optionee of the Exercise Price therefor.

      11. No Registration Rights. The Company may, but shall not be obligated
to, register or qualify the sale of Shares under the Securities Act or any other
applicable law. The Company shall not be obligated to take any affirmative
action in order to cause the sale of Shares under this Agreement to comply with
any law.

      12. Restrictions on Transfer.

      (a) Securities Law Restrictions. Regardless of whether the offering and
sale of Shares under the Plan have been registered under the Securities Act or
have been registered or qualified under the securities laws of any state, the
Company at its discretion may impose restrictions upon the sale, pledge or other
transfer of such Shares (including the placement of appropriate legends on stock
certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act, the securities laws of any state
or any other law.

      (b) Market Stand-Off. The Optionee agrees in connection with any
registration of the Company's securities under the 1933 Act that, upon the
request of the Company or the underwriters managing any public offering of the
Company's securities, Optionee will not sell or otherwise dispose of any Shares
without the prior written consent of the Company or such underwriters, as the
case may be, for a period of time (not to exceed one hundred eighty (180) days
in connection with the Company's initial public offering and ninety (90) days in
connection with any subsequent public offerings) from the effective date of such
registration as the Company or the underwriters may specify for
employee-shareholders generally. The Optionee agrees to enter into a similar
market stand-off agreement reasonably requested by the Company's underwriters.

      (c) Investment Intent at Grant. The Optionee represents and agrees that
the Shares to be acquired upon exercising this option will be acquired for
investment, and not with a view to the sale or distribution thereof.

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      (d) Investment Intent at Exercise. In the event that the sale of Shares
under the Plan is not registered under the Securities Act but an exemption is
available which requires an investment representation or other representation,
the Optionee shall represent and agree at the time of exercise that the Shares
being acquired upon exercising this option are being acquired for investment,
and not with a view to the sale or distribution thereof, and shall make such
other representations as are deemed necessary or appropriate by the Company and
its counsel.

      (e) Legends. All certificates evidencing Shares purchased under this
Agreement shall bear the following legend:

      "THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
      ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
      TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER
      OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH
      AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN
      ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN REPURCHASE RIGHTS UPON
      TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF THE COMPANY WILL
      UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF
      WITHOUT CHARGE."

All certificates evidencing Shares purchased under this Agreement in an
unregistered transaction shall bear the following legend (and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law):

      "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
      OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
      ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
      THAT SUCH REGISTRATION IS NOT REQUIRED."

      (f) Removal of Legends. If, in the opinion of the Company and its counsel,
any legend placed on a stock certificate representing Shares sold under this
Agreement is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same
number of Shares but without such legend.

      (g) Administration. Any determination by the Company and its counsel in
connection with any of the matters set forth in this Section 11 shall be
conclusive and binding on the Optionee and all other persons.

      13. Adjustment of Shares. In the event of any transaction described in
Section 9(a) of the Plan, the terms of this option (including, without
limitation, the number and kind of Shares subject to this option and the
Exercise Price) shall be adjusted as set forth in Section 9(a) of the Plan. In
the event that the Company is a party to a merger or consolidation, this option
shall be subject to the agreement of merger or consolidation, as provided in
Section 9(b) of the Plan.

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      14. Miscellaneous Provisions.

      (a) Rights as a Stockholder. Neither the Optionee nor the Optionee's
representative shall have any rights as a stockholder with respect to any Shares
subject to this option until the Optionee or the Optionee's representative
becomes entitled to receive such Shares by filing a notice of exercise and
paying the Purchase Price pursuant to Sections 4 and 5.

      (b) No Retention Rights. Nothing in this option or in the Plan shall
confer upon the Optionee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any Parent or Subsidiary employing or retaining the Optionee)
or of the Optionee, which rights are hereby expressly reserved by each, to
terminate his or her Service at any time and for any reason, with or without
cause.

      (c) Notice. Any notice required by the terms of this Agreement shall be
given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail,
with postage and fees prepaid. Notice shall be addressed to the Company at its
principal executive office and to the Optionee at the address that he or she
most recently provided to the Company.

      (d) Entire Agreement. The Notice of Stock Option Grant, this Agreement and
the Plan constitute the entire contract between the parties hereto with regard
to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.

      (e) Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, as such laws are applied
to contracts entered into and performed in such State.

                                     - 10 -
<PAGE>

                                   EXHIBIT A

                       NOTICE OF EXERCISE OF STOCK OPTION

Magma Design Automation, Inc.
2 Results Way
Cupertino, California 95014

      Re: Exercise of Stock Option to Purchase Shares of Company Stock

Ladies and Gentlemen:

      Pursuant to the Stock Option Agreement dated _________________ (the "Stock
Option Agreement"), between Magma Design Automation, Inc., a Delaware
corporation (the "Company"), and the undersigned, I hereby elect to purchase
_____________ shares of the common stock of the Company (the "Shares"), at the
price of $__________ per Share. My check in the amount of $______________ and
the executed Assignment Separate from Certificate are enclosed. The Shares are
to be issued in _____ certificate(s) and registered in the name(s) of:

                           --------------------------
                           --------------------------

      The undersigned understands there may be tax consequences as a result of
the purchase or disposition of the Shares. The undersigned represents that
he/she has received and reviewed the Plan's federal income information and
consulted with any tax consultants he/she deems advisable in connection with the
purchase or disposition of the Shares and the undersigned is not relying on the
Company for any tax advice.

      The undersigned acknowledges that he/she has received, read and understood
the Stock Option Agreement and agrees to abide by and be bound by their terms
and conditions. The undersigned represents that the Shares are being acquired
solely for its own account and not as a nominee for any other party, or for
investment, and that the undersigned purchaser will not offer, sell or otherwise
dispose of any such Shares except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws.

Dated:
       ------------------------

                                    --------------------------------------------
                                                    (Signature)

                                    --------------------------------------------
                                                (Please Print Name)

                                    Social Security No.
                                                        ------------------------

                                    --------------------------------------------
                                                     (Full Address)

                                    - A-1 -
<PAGE>

                                   EXHIBIT B

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

      FOR VALUE RECEIVED, ________________ hereby sells, assigns and transfers
unto Magma Design Automation, Inc., a Delaware corporation (the "Company"),
_________________ (________) shares of Common Stock of the Company represented
by Certificate No. _____ herewith and does hereby irrevocably constitute and
appoint _________________________ Attorney to transfer the said stock on the
books of the Company with full power of substitution in the premises.

      Dated:                        .
            ------------------------

                                        ----------------------------------
                                                   Print Name

                                        ----------------------------------
                                                    Signature

                        Spousal Consent (if applicable)

      ________________ (Purchaser's spouse) indicates by the execution of this
Assignment his or her consent to be bound by the terms herein as to his or her
interests, whether as community property or otherwise, if any, in the Shares.

                                             -----------------------------
                                                      Signature

INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE.
THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO EXERCISE ITS "RIGHT
OF REPURCHASE" SET FORTH IN THE AGREEMENT WITHOUT REQUIRING ADDITIONAL
SIGNATURES ON THE PART OF PURCHASER.

                                    - B-1 -
<PAGE>

                                   EXHIBIT C

Internal Revenue Service Center

      Re: Election Under Section 83(b) of the Internal Revenue Code of 1986

Ladies and Gentlemen:

      I hereby elect under section 83(b) of the Internal Revenue Code of 1986 to
include in gross income any excess of fair market value over purchase price with
respect to the transfer of the property described below:

1.    Name: _______________________________________________

2.    Address: ____________________________________________

3.    Social Security Number: _______________________

4.    Tax Year of Election: Calendar Year of ______.

5.    Description of Property: _________ shares of Common Stock of Magma Design
      Automation, Inc., a Delaware corporation (the "Company").

6.    Date of Property Transfer: ______________

7.    Nature of Property Restrictions: Property is subject to the Company's
      right to repurchase the stock at the undersigned's original purchase price
      if the undersigned ceases to be associated with the Company, which right
      will generally lapse over a designated four (4) year period.

8.    Fair Market Value at the Time of Transfer: $_____ per share for an
      aggregate of $_________. The Fair Market Value at the time of transfer was
      determined without regard to any lapse restrictions as defined in section
      1.83-3(i) of the Income Tax Regulations.

9.    Amount Paid for Property: $________ per share for an aggregate of
      $________.

10.   A copy of this election has been furnished to the Company, the person for
      whom the services are performed.

                                 Sincerely,

                                             -----------------------------
                                                      Signature

                                             Date
                                                  ------------------------

                                    - C-1 -
<PAGE>

                                   EXHIBIT D

                         MAGMA DESIGN AUTOMATION, INC.

                           LIMITED IRREVOCABLE PROXY

      The undersigned, as recordholder of __________________ (__________) shares
of Common Stock of Magma Design Automation, Inc., a Delaware corporation
("Magma"), hereby revokes any previous proxies and appoints Rajeev Madhavan as
the undersigned's proxy to attend all meetings of Magma's stockholders and to
vote, execute consents, and otherwise represent those shares for the undersigned
in the same manner and with the same effect as if the undersigned were
personally present; provided, however, that the authority granted by this proxy
is limited to the following:

            1. representing those shares to determine a quorum;

            2. voting or otherwise representing those shares with respect to,
      and only in favor of, the election of Rajeev Madhavan to Magma's Board of
      Directors;

            3. voting or otherwise representing those shares with respect to,
      and only in opposition to, the removal of Rajeev Madhavan from Magma's
      Board of Directors, the reduction in the number of positions on the Board
      of Directors, the classification of the Board of Directors, or (except as
      set forth in (4) below) the alteration of the existing voting rights of
      the outstanding shares of capital stock of Magma; and

            4. voting or otherwise representing those shares with respect to,
      and at the sole discretion of Rajeev Madhavan, any action to (a) increase
      the number of positions on the Board of Directors, (b) remove any
      incumbent director (other than Rajeev Madhavan) from the Board of
      Directors, and (c) elect any individual as a director of Magma to fill a
      vacancy caused by the increase in size of the Board, the resignation or
      removal of a director, or otherwise.

      This proxy is irrevocable until September 30, 2002 or until the earlier
termination of the voting agreement set forth in that certain Stock Option
Agreement between Magma and the undersigned pursuant to which the shares that
are the subject of this proxy were issued (the "Voting Trust Agreement"). This
proxy is given to secure the performance of the undersigned under the Voting
Trust Agreement and is thereby and for other valid consideration deemed coupled
with an interest sufficient to render this proxy irrevocable for the period
indicated above.

      Dated:
            ---------------------

                                        ----------------------------------------
                                                 Signature of Stockholder

                                        ----------------------------------------
                                               Printed Name, exactly as it
                                              appears on stock certificate

                                        Address
                                               ---------------------------------

                                    - D-1 -
<PAGE>

                   ATTACHMENT TO NOTICE OF STOCK OPTION GRANT

                                 (For Officers)

      If your employment with the Company is terminated without Cause or
"Constructively Terminated" at, or within twelve (12) months following, a Change
in Control, then this option shall vest with respect to fifty percent (50%) of
the option shares not yet vested on the date of such termination.

      For purposes of this option, a "Change in Control" shall mean any one of
the following events:

                        (i) The consummation of a merger, consolidation or other
                  reorganization of the Company (other than a reincorporation of
                  the Company), if after giving effect to such merger,
                  consolidation or other reorganization of the Company, the
                  stockholders of the Company immediately prior to such merger,
                  consolidation or other reorganization do not represent a
                  majority in interest of the holders of voting securities (on a
                  fully diluted basis) with the ordinary voting power to elect
                  directors of the surviving or resulting entity after such
                  merger, consolidation or other reorganization; or

                        (ii) The sale of all or substantially all of the assets
                  or stock or the Company to a third party.

      For purposes of this option, "Cause" shall mean termination of your
employment for (i) conduct materially detrimental to the Company, (ii)
conviction or plea of nolo contendere to a felony, or (iii) any intentional
misconduct that the Company reasonably believes would make it impracticable for
you to discharge substantially all of your duties.

      "Constructively Terminated" means your resignation as a result of any
action by the Company (or its successor or acquiror) which (i) substantially
reduces the amount of your base compensation or otherwise materially and
adversely affects your working conditions, in either case in a manner that
disproportionately adversely affects you, as compared to all other Company
officers, or (ii) unilaterally and substantially changes your title and duties;
provided, however, that the unilateral change by the surviving or acquiring
entity (or its parent) in your title and duties to a position that is
substantially similar in salary, title and responsibilities to your current
position shall not constitute "Constructive Termination."

      No provision of any option or award agreement may be inconsistent with
applicable law and to the extent a provision of any such agreement is determined
by the Board to violate the law or create material adverse legal, financial, or
regulatory problems, such provision shall not apply.Form of Loan and Note Agreements

Exhibit 10.4

LOAN AGREEMENT

          This Loan Agreement (“Agreement”) is made this 9th day of May 2001, by and between Dennis Lundien and Deborah Lundien (“Borrower”) and E*TRADE Group, Inc., a Delaware
corporation (“Lender”).

          1. Loan Agreement. Subject to the terms and conditions of this Agreement, Lender agrees to make to Borrower, and Borrower agrees to accept from Lender, a loan (the
“Loan”) in the principal amount of Two Million Dollars ($2,000,000).

          2. Loan Terms. The Loan shall be evidenced by a Note Secured by Deed of Trust in the form of Exhibit A to this Agreement (the “Note”) and will be secured by a Deed of
Trust and Assignment of Rents covering certain real property commonly known as 120 Atherton Avenue, Atherton, California, together with all improvements now or hereafter located thereon (the “Property”). The Loan shall bear interest at the
rate per annum specified in the Note and Borrower shall pay the Note in accordance with the terms thereof. This Loan is a bridge loan to facilitate the purchase of a new principal residence for Borrower pending sale of Borrower’s former
principal residence. Accordingly, the proceeds of this Loan shall be applied solely to the purchase of Borrower’s principal residence at 7120 Summerwood Court, Granite Bay, California, and for improvements to said property.

          3. Conditions Precedent to Closing of Loan. As conditions precedent to Lender’s obligation to close the Loan and disburse and Loan proceeds, on or before the Closing Date,
(a) Borrower shall deliver the documents described in subsections (i), (ii) and (iii), each duly executed and acknowledged by a notary public, where necessary, and in form and substance satisfactory to Lender (the “Loan Documents”), and
(b) Lender shall have obtained the items described in subsections (iv) and (v):

	 	(i)	This Agreement.
	 
	 

	 	(ii)	The Note.
	 
	 

	 	(iii)	The Deed of Trust executed by Borrower as Trustor to North American Title Insurance Company, a California corporation, as Trustee, and naming Lender as Beneficiary, to be recorded on the Closing Date in the
Official Records of San Mateo County, California.
	 
	 

	 	(iv)	An ALTA title insurance policy insuring Lender that the Deed of Trust constitutes a valid and enforceable lien on the Property subject and subordinate only to such liens or other matters as Lender has
approved in writing.
	 
	 

	 	(v)	An appraisal of the Property, in form acceptable to Lender, indicating that the loan to value ratio of the monetary liens described herein will be acceptable to Lender (the “Appraisal”).
	 
	 

          4. Closing and Funding of Loan. Funding of the Loan proceeds by Lender (the “Closing”) shall be contingent upon delivery of the Loan Documents, to a custodian designated
by Lender, and confirmation by the custodian that it has possession of all documents required herein. Such confirmation shall occur and the Loan shall be funded not later than May 31, 2001 (the “Closing Date”).

           5. Notices. All notices, requests, demands, and other communications required or permitted to be given under this Agreement shall be in writing and shall be sent by United States
mail, postage prepaid, certified return receipt requested, or by personal delivery, or by overnight courier, addressed to the other party as set forth below or at such other places as may be designated in notice to the other party given as provided
herein. Notice shall be deemed effective upon actual receipt, if personally delivered, one business day following deposit with Federal Express or other reputable, national overnight courier that provides a receipt, or on the third day following
deposit in the United States mail in the manner described above.

	 	Borrower:	Lender:
	 	Dennis and Deborah Lundien	E*TRADE Group, Inc.
	 	7120 Summerwood Ct.	4500 Bohannon Drive
	 	Granite Bay, CA 95746	Menlo Park, CA 94025
	 	 	Attention: Theodore J. Theophilos

           6. Loan Not to Affect Employment. Borrower agrees and understands that nothing in this Agreement shall confer any right with respect to the continuation of the employment of
Dennis Lundien with Lender or any of its subsidiaries, nor shall this Agreement interfere in any way with his right or Lender’s right to terminate Dennis Lundien’s employment at any time, with or without cause, in accordance with his
employment agreement with Lender (the “Employment Agreement”).

           7. Entire Agreement. The foregoing and the Loan Documents constitute the entire agreement between the parties regarding the Loan and may be modified only by writing signed by
Borrower and Lender. There are no agreements, representations, or warranties between the parties with regard to the Loan other than those expressly set forth in this Agreement.

           8. Representation of the Parties. Borrower acknowledges that (i) they have been advised by attorneys for Lender to consult with their independent legal, tax and financial counsel
about the terms of this Loan, and (ii) they have had an adequate opportunity to consult with such separate counsel before executing this Agreement.

           IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

	Borrower:	 	Lender:
	 	 	E*TRADE Group, Inc.
	 	 	 
	 	 	 
	/s/ DENNIS LUNDIEN	By /s/ RUSSELL S. ELMER
	 
 	 	 
 
	Dennis Lundien	 	Title: Chief People and Culture Officer
	 	 	 
	/s/ DEBORAH LUNDIEN	 	 
	 
 	  	 
	Deborah Lundien	 	 
	 	2	 

 EXHIBIT A 

 FORM OF NOTE SECURED BY DEED OF TRUST 

 3 

 E*TRADE GROUP, INC. 

 NOTE SECURED BY DEED OF TRUST 

  

	$2,000,000	 May 9, 2001

	 	 Menlo Park, California 

          FOR VALUE RECEIVED, Dennis Lundien and Deborah Lundien, as husband and wife (jointly and severally, the “Maker”), promise to pay to the order of E*TRADE Group, Inc., a
Delaware corporation (the “Corporation”), at its corporate offices at 4500 Bohannon Drive, Menlo Park, CA 94025, the principal sum of Two Million Dollars ($2,000,000), together with all accrued interest thereon, upon the terms and
conditions specified below. 

           1. Interest. Interest shall accrue on the unpaid balance outstanding from time to time under this Note at the rate of Four and Twenty-Five One Hundredths Percent (4.25%)
per annum, compounded annually. All computations of interest shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is
payable. All accrued and unpaid interest shall become due and payable in one lump sum on the due date for the payment of the principal balance of this Note.

           2. Maturity Date. The entire principal balance of this Note, together with all accrued and unpaid interest, shall become due and payable in one lump sum on May 31, 2002 or
the date of the closing of the sale of the Collateral, as such term is defined in paragraph 4 of this Note, whichever first occurs.

           3. Payment. All payments of principal and interest on this Note shall be made without offset or deduction and shall be made in immediately available 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. Collateral. Payment of this Note shall be secured by a Deed of Trust With Assignment of Rents, of even date herewith (the “Deed of Trust”), covering the fee
simple estate of Maker in the property and improvements located at 120 Atherton Avenue, Atherton, California, as such property is more particularly described in Exhibit “A” to the Deed of Trust (the “Collateral”). 

           5. Representations and Warranties. The Maker hereby represents and warrants to the Corporation that this Note does not contravene any contractual or judicial restriction
binding on or affecting the Maker and that this Note is the legal, valid and binding obligation of the Maker enforceable against the Maker in accordance with its terms. 

           6. Notice. The Maker agrees to notify the Corporation of the incurrence of any other indebtedness secured by the Collateral prior to the incurrence thereof. 

           7. 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 breach of any representation or covenant under this Note, the Loan Agreement (as defined below), or the Deed of Trust ; 

                b. The filing of a petition by or against the Maker under any provision of the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or
recodified from time to time, or under any similar law relating to bankruptcy, insolvency or other relief for debtors and the continuation of such petition without dismissal for a period of thirty (30) days or more; or appointment of a receiver,
trustee, custodian or liquidator of or for all or any part of the assets or property of the Maker; or the insolvency of the Maker; or the making of a general assignment for the benefit of creditors by the Maker; 

                c. The death or incapacity of Dennis Lundien; 

                d. The Deed of Trust or any other document relating to this Note and the Collateral after delivery thereof shall for any reason be revoked or invalidated,
or otherwise cease to be in full force and effect, or the Maker or any other person shall contest in any manner the validity or enforceability thereof, or the Maker or any other person shall deny that it has any further liability or obligation
thereunder; or any of the documents relating to the Collateral for any reason, except to the extent permitted by the terms thereof, shall cease to create a valid and perfected second priority lien in any of the Collateral purported to be covered
thereby;

                e. The sale, transfer, mortgage, assignment, encumbrance or lease, whether voluntarily or involuntarily or by operation of law or otherwise, of the
Collateral, or any portion thereof or interest therein, without the prior written consent of the Corporation; or 

                f. The incurrence by the Maker of any other indebtedness secured by the Collateral which has not been consented to by the Corporation; 

                g. The expiration of the two (2)-month period following the date Dennis Lundien ceases for any reason to remain in the Corporation's employ; 

                h. The occurrence of any event of default under this Note, the Deed of Trust, the Loan Agreement, or of any obligation secured thereby. 

           8. Default. Upon and after the occurrence of a default hereunder or any other agreement or instrument evidencing, governing or securing this Note (an “Event of
Default”), the Loan shall bear interest, payable upon demand, at the lesser of (i) the rate of ten percent (10%) per annum, compounded annually, or the maximum rate allowed by law (the “Default Rate”). 

           9. Employment.  For purposes of applying the provisions of this Note, Dennis Lundien shall be considered to remain in the Corporation's employ for so long as he renders
services as a full-time employee of the Corporation, any successor entity or one or more of the Corporation's fifty percent (50%)-or-more owned (directly or indirectly) subsidiaries. 

           10. Collection. The Maker agrees to pay on demand all the losses, costs, and expenses (including, without limitation, attorneys' fees and disbursements) which the
Corporation incurs in connection with enforcement or attempted enforcement of this Note, or the protection or preservation of the Corporation's rights under this Note, whether by judicial proceedings or otherwise. Such costs and expenses include,
without limitation, those incurred in connection with any workout or refinancing, or any bankruptcy, insolvency, liquidation or similar proceedings. 

           11. Waivers.

                a. A waiver of any term of this Note, the Loan Agreement, the Deed of Trust 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, the Loan Agreement, or the Deed of Trust shall constitute a
waiver of any breach, default, or failure of a condition under this Note, the Deed of Trust or the obligations secured thereby. No single or partial exercise of any power under this Note shall preclude any other or further exercise of such power or
exercise of any other power.

                b. 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. The Maker agrees to make all payments under this Note without set-off of deduction and regardless of any counterclaim or defense. 

           12. 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.

           13. Governing Law.  This Note shall be construed in accordance with the laws of the State of California. This Note shall be binding on the Maker and the Maker’s
personal representatives, heirs, and legatees, and shall be binding upon and inure to the benefit of the Corporation, any future holder of this Note and their respective successors and assigns. The Maker may not assign or transfer this Note or any
of the Maker’s obligations hereunder without the Corporation's prior written consent. 

           14. Loan Agreement. This Note is subject to the provisions of that certain Loan Agreement between Maker and the Corporation, of even date herewith (the “Loan
Agreement”).

           15. No Below Market Loan. Notwithstanding anything to the contrary contained in this Note, the Loan Agreement or the Deed of Trust, the interest rate applicable to this
Note shall be not less than the Applicable Federal Rate set by the U.S. Treasury for determining below market loans pursuant to Section 7872 of the Internal Revenue Code of 1986, as now in effect (the “Internal Revenue Code”). This Note is
not intended to be a “below
market loan” as such term is used in Section 7872 of the Internal Revenue Code or any comparable applicable state tax law (“Below Market Loan”). The undersigned hereby agree that if any court or governmental taxing authority having
jurisdiction over Maker or the Corporation shall determine that this Note is a Below Market Loan, the interest rate payable under this Note shall then be increased to the extent necessary to remove this Note from any otherwise applicable definition
of a Below Market Loan.

           16. Due On Sale. IF THE MAKER SHALL SELL, CONVEY OR ALIENATE THE PROPERTY COVERED BY THE DEED OF TRUST, OR ANY PART THEREOF, OR ANY INTEREST THEREIN, OR SHALL BE DIVESTED
OF MAKER’S TITLE OR ANY INTEREST THEREIN IN ANY MANNER OR WAY, WHETHER VOLUNTARILY OR INVOLUNTARILY, WITHOUT THE WRITTEN CONSENT OF THE CORPORATION BEING FIRST HAD AND OBTAINED, THE CORPORATION SHALL HAVE THE RIGHT, AT ITS OPTION, EXCEPT AS
PROHIBITED BY LAW, TO DECLARE THE INDEBTEDNESS AND OBLIGATIONS EVIDENCED BY THIS NOTE, IRRESPECTIVE OF THE MATURITY DATE SPECIFIED HEREIN, IMMEDIATELY DUE AND PAYABLE. CONSENT TO ONE SUCH TRANSACTION SHALL NOT BE DEEMED TO BE A WAIVER OF THE RIGHT
TO REQUIRE SUCH CONSENT TO FUTURE SUCCESSIVE TRANSACTIONS.

	 	MAKER
	 	 
	 	 
	 	/s/ DENNIS LUNDIEN
	 	 
 
	 	Dennis Lundien
	 	 
	 	 
	 	/s/ DEBORAH LUNDIEN
	 	 
 
	 	Deborah Lundien

 \\RFWK_NT\SHARED\atty\Byron\My Documents\ETRADE Lundien SECURED NOTE.doc DRAFT 07/30/01 12:03 PM

 RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO 

 NAME: E*TRADE Group, Inc. 

 ADDRESS: 4500 Bohannon Drive 

 CITY: Menlo Park 

 STATE & ZIP: California 94025 

  

	 
 
	 LONG FORM DEED OF TRUST AND ASSIGNMENT OF RENTS (INDIVIDUAL) 

	 
 

 APN NO. 070-080-120 

 This Deed of Trust, made this 9th
day of May, 2001, between Deborah Lundien and Dennis Lundien, herein called Trustor, whose address is 120 Atherton Avenue, Atherton, California, North American Title Company, Inc., herein called Trustee, and E*TRADE Group, Inc., a Delaware
Corporation, herein called Beneficiary, 

 Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, that property in San Mateo County, California, described as: 

 See Exhibit A Attached Hereto and Incorporated Herein By This Reference 

 TOGETHER WITH the rents, issues and profits thereof, SUBJECT, HOWEVER, to the right, power and authority given to and conferred upon Beneficiary by paragraph (10) of the provisions herein to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of Trustor incorporated by reference or contained herein. 2. Payment of the indebtedness evidenced by one promissory note of even date herewith, and any extension or renewal
thereof, in the principal sum of $2,000,000.00 executed by Trustor in favor of Beneficiary or order. 3. Payment of such further sums as the then record owner of said property may borrow from Beneficiary, when evidenced by another note (or notes)
reciting it is so secured. 

 To Protect the Security of This Deed of Trust, Trustor Agrees: 

      (1) To keep said property in good condition and repair, not to remove or demolish any building thereon, to complete or restore promptly and in good and workmanlike manner any building which may be constructed,
damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon, not to commit or
permit waste thereof, not to commit, suffer or permit any act upon said property in violations of law to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general (2) To provide maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance
policy may be applied by Beneficiary upon indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or
release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 

      (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses including cost of evidence of title
and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 

      (4) To pay at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock, when due, all encumbrances, charges and liens, with interest, on
said property or any part thereof, which appear to be prior or superior hereto, all costs, fees and expenses of this Trust. 

 

      Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor
from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and
defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or
superior hereto, and in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 

      (5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. 

      (6) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such
moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 

      (7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his rights either to require prompt payment when due of all other sums so secured or to declare default for
failure so to pay. 

      (8) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured hereby. Trustee may reconvey any part of said property, consent to the making of any map or plot thereof; join in granting any easement thereon; or join in any extension
agreement or any agreement subordinating the lien or charge hereof. 

      (9) That upon written request of Beneficiary state that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention and upon payment of its fees,
Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "The
person or persons legally entitled thereto" Five years after issuance of such full reconveyance, Trustee may destroy said note and this Deed (unless directed in such request to retain them). 

      (10) That as additional security, Trustor hereby give to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said
property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect the rents, issues and profits of said property, reserving unto Trustor
the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said
property or any part thereof, in his own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's
fees. Upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall
not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 

      (11) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder. Beneficiary may declare all sums secured hereby immediately due and payable by delivery
to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee
this Deed, said note and all documents evidencing expenditures secured hereby. 

      After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor,
shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United
States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed
by the preceding postponement Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of
the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. 

 

     After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums expended under
the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof, all other sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. 

(12) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed
by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without
conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and
the name and address of the new Trustee. 

      (13) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner
and holder, including pledgees, of the note secured hereby whether or not named as Beneficiary herein in this Deed, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the
plural. 

      (14) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee. 

      The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to them at their address hereinbefore set forth. 

 IF THE TRUSTOR SHALL SELL, CONVEY OR ALIENATE SAID PROPERTY, OR ANY PART THEREOF, OR ANY INTEREST THEREIN, OR SHALL BE DIVESTED OF THEIR TITLE OR ANY INTEREST THEREIN IN ANY MANNER OR WAY, WHETHER VOLUNTARILY OR INVOLUNTARILY, WITHOUT THE
WRITTEN CONSENT OF THE BENEFICIARY BEING FIRST HAD AND OBTAINED, BENEFICIARY SHALL HAVE THE RIGHT, AT ITS OPTION, EXCEPT AS PROHIBITED BY LAW, TO DECLARE ANY INDEBTEDNESS OR OBLIGATIONS SECURED HEREBY, IRRESPECTIVE OF THE MATURITY DATE SPECIFIED IN
ANY NOTE EVIDENCING THE SAME, IMMEDIATELY DUE AND PAYABLE.

	 	/s/ DENNIS LUNDIEN  
	 	 
 
	 	Dennis Lundien
	 	 
	 	 
	 	/s/ DEBORAH LUNDIEN
	 	 
 
	 	   Deborah Lundien

 EXHIBIT A 

 Deed of Trust and Assignment of Rents 

           The property referred to herein is situated in the State of California, County of SAN MATEO, TOWN OF ATHERTON, described as follows: 

 PORTION OF LOT LETTERED “E”, AS DESIGNATED ON THAT CERTAIN MAP ENTITLED, “MAP OF THE PARTITION OF THE SELBY TRACT, ATHERTON, SAN MATEO COUNTY, CALIFORNIA”, WHICH MAP WAS FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF
SAN MATEO, STATE OF CALIFORNIA ON MARCH 2, 1920, IN BOOK 10 OF MAPS AT PAGES 29 AND 30, MORE PARTICULARLY DESCRIBED AS FOLLOWS: 

 BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF ATHERTON AVENUE, DISTANT THEREON 438 FEET SOUTHWESTERLY FROM THE MOST EASTERLY CORNER OF LOT LETTERED “E” AS SHOWN ON THE MAP ABOVE MENTIONED; THENCE FROM SAID POINT OF BEGINNING ALONG
SAID NORTHWESTERLY LINE OF ATHERTON AVENUE, SOUTH 32”05’ WEST 20 FEET; THENCE, NORTH 57”55’ WEST 223 FEET; THENCE SOUTH 32”05’ WEST 154 FEET; THENCE NORTH 57”55’ WEST 202 FEET; THENCE NORTH 32”05’
EAST 204 FEET; THENCE SOUTH 57”55’ EAST 425 FEET TO THE POINT OF BEGINNING 

	A.P.N. 070-080-120	J.P.N. 070-008-080-12-A

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