Note Secured By Deed Of Trust

Exhibit 10.17


NOTE SECURED BY DEED OF TRUST
-----------------------------


$450,000.00 November 8, 2000
San Francisco, California


THIS PROMISSORY NOTE ("Note") is executed by Charles Picasso, an individual ("Borrower"), in favor of Digital Island, Inc., a Delaware corporation ("Lender").


1 Promise to Pay. For value received, Borrower promises to pay to the order
--------------
of Lender, at its principal offices at 45 Fremont Street, 12th Floor, San
Francisco, California 94105, the principal sum of Four Hundred Fifty
Thousand and No/100 Dollars ($450,000.00), upon the terms and conditions
specified below.


2 Interest. Interest shall accrue on all outstanding amounts at a rate of
--------
eight percent (8%) per annum ("Loan Rate"), calculated on an actual day
basis using a 360-day year.


3 Interest Only. From November 9, 2000 through November 9, 2002, interest
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only shall be due and payable


4 Repayment of Principal. Commencing on November 9, 2002, and on the first
----------------------
day of each calendar month thereafter until the Maturity Date (as defined
below), Borrower shall pay to Lender at the address set forth in Section 1
above, monthly payments of principal and interest equal to Twelve Thousand
Three Hundred Seventy-Five and No/100 Dollars ($12,375.00).


5 Maturity. The entire unpaid balance of the loan equal to Two Hundred
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Twenty-Five Thousand and No/100 Dollars ($225,000.00), shall be due and
payable on November 9, 2004 ("Maturity Date").


6 Application of Payment. Payment shall be made in lawful tender of the
----------------------
United States, without notice from Lender, and shall be applied first to
any accrued and unpaid interest (if any) on this Note and the balance to
principal. Prepayment of the principal may be made at any time without
penalty.


7 Security. The proceeds of the loan evidenced by this Note shall be applied
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solely to the purchase of Borrower's principal residence at 58 Bret Harte
Lane, County of San Raphael, State of California, as more particularly
described on Exhibit A attached hereto (the "Property"). Payment of this
Note shall be secured by that certain Deed of Trust with Assignment of
Rents, Security Agreement and Fixture Filing dated as of November 8, 2000
(the "Deed of Trust"), encumbering such Property, a copy of which is
attached hereto as Exhibit B. Borrower, however, shall remain personally
liable for payment of this Note, and assets of Borrower, in addition to the
collateral under the Deed of Trust, may be applied to the satisfaction of
Borrower's obligations hereunder.


8 Events of Acceleration. The entire unpaid principal sum of this Note,
----------------------
together with all accrued interest and related charges, shall become
immediately due and payable upon one or more of the following events:


8.1 the failure of Borrower to make any regularly scheduled payment of
principal or interest under this Note within three (3) business days
following receipt of written notice that such payment was not made when
due, or Borrower fails to make three (3) such regularly scheduled
payments when due during any period of twelve (12) consecutive calendar
months; or


8.2 the failure Borrower to make the final payment of principal on or before
November 9, 2004 (i.e., there is no grace period); or


8.3 the sale, transfer, mortgage, assignment, encumbrance or lease, whether
voluntarily or involuntarily or by operation of law or otherwise, of the
Property covered by the Deed of Trust, or any portion thereof or interest
therein, without the prior written consent of Lender, if Lender exercises
its option to accelerate pursuant to Section 16 of this Note and Section
6.2 of the Deed of Trust; or


8.4 the insolvency of Borrower, the commission of any act of bankruptcy by
Borrower, the execution by Borrower of a general assignment for the
benefit of creditors, the filing by or against Borrower of any petition
in bankruptcy or any petition for relief under the provisions of the
federal bankruptcy act or any other state or federal law for the relief
of debtors and the continuation of such petition without dismissal for a
period of thirty (30) days or more, the application or consent to the
appointment of any receiver, trustee, custodian, conservator, liquidator
or similar officer for it or any part of the Property, the appointment of
a receiver or trustee to take possession of any property or assets of
Borrower, or the attachment of or execution against any property or
assets of Borrower; or


8.5 the occurrence of any event of default under the Deed of Trust securing
this Note or any obligation secured thereby.


9 Other Remedies. All rights and remedies provided to the holder of this Note
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are cumulative and shall be in addition to all other rights and remedies of
the holder under other documents, at law or in equity, and all such rights
and remedies may be exercised singly, successively and/or concurrently.
Failure to exercise any right or remedy shall not be deemed a waiver of
such right or remedy.


10 Collection. If Lender institutes any action or informal demand proceedings
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to collect this Note, Borrower promises to pay all costs and expenses
(including reasonable attorneys' fees and court costs) incurred in
connection with such action and/or informal collection proceedings.


11 Waiver. No previous waiver and no failure or delay by Lender in acting with
------
respect to the terms of this Note shall constitute a waiver of any breach,
default, or failure of condition under this Note or the obligations secured
thereby. A waiver of any term of this Note or of any of the obligations
secured thereby must be made in writing and shall be limited to the express
terms of such waiver.


Borrower hereby waives presentment, demand for payment, notice of dishonor, default or delinquency, notice of acceleration, notice of protest and non-payment, 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.


12 Notices. All notices and other communications provided for in this Note
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shall be in writing and be delivered by messenger, overnight air courier or
registered or certified U.S. Mail with return receipt requested to the
appropriate party at its address as follows:


2.


If to Borrower: Mr. Charles Picasso
45 Fremont Street
12th Floor
San Francisco, California 94105


If to Lender: Digital Island, Inc.
45 Fremont Street
12th Floor
San Francisco, California 94105
Attention: Mr. Addo Barrows


with a copy to Brobeck, Phleger & Harrison LLP
550 South Hope Street
Suite 2100
Los Angeles, California 90071
Attention: Jerry Walsh, Esq.


Addresses for notice may be changed from time to time by written notice to the other party. All communications shall be effective when actually received; provided, however, that nonreceipt of any communication as a result of a change of address of which the sending party was not notified or as a result of a refusal to accept delivery shall be deemed receipt of such communication.


13 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.


14 Governing Law. This Note shall be construed in accordance with the laws of
------------- the State of California.


15 Due on Sale. If all or any part of the Property or any interest in it is
----------- sold or transferred or if Borrower is divested of his title or any interest therein any matter or way, whether voluntarily or involuntarily, without Lender's prior written consent, Lender may, at its option, require immediate payment in full of all indebtedness evidenced by this Note and secured by the Deed of Trust. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the date of Note. Consent to one such transaction shall not be deemed to be a waiver of the right to require such consent to future successive transactions.


If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than thirty (30) days from the date the notice is delivered or mailed within which Borrower must pay all indebtedness evidenced by this Note and secured by the Deed of Trust. If Borrower fails to pay those sums prior to the expiration of this period, Lender may invoke any remedies permitted by the Deed of Trust without further notice or demand on Borrower.


16 Lawfulness of Interest Rate. In the event that, at any time, the Loan Rate
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under this Note exceeds the maximum interest rate permitted by law with
respect to such indebtedness, the interest rate applicable to such
indebtedness shall be the maximum rate permitted by law.


17 Severability. No provision of this Note that is held to be inoperative,
------------
unenforceable or invalid shall affect the remaining provisions, and to this
end, all provisions hereof are declared to be severable.


(Signature Page Follows Immediately)


3.


IN WITNESS WHEREOF, the parties have executed this Note Secured By Deed of Trust as of the date first written above.


"BORROWER":


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Charles Picasso, an individual


4.


EXHIBIT "A" TO DEED OF TRUST
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LEGAL DESCRIPTION OF LAND
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All that certain real property situate in the City of San Rafael, County of Marin, State of California, described as follows:


PARCEL ONE: ----------


COMMENCING at the Southwesterly corner of Lot 20, as said lot is shown on that certain map entitled, "Bret Harte Heights Sub. No. 1", filed June 25, 1937 in Book 5 of Maps at Page 72, Marin County Records, running thence from the point of commencement along the Westerly line of said lot, North 17(degrees) 04' 55" East 83.00 feet, thence leaving said lot line South 72(degrees) 17' East 159.75 feet, thence South 7(degrees) 48' West 135.00 feet, thence South 21(degrees) 44' 20" East 20.56 feet to a point on the Northerly line of Bret Harte Lane, thence along a curve to the right with a radius of 285 feet, whose center bears North 22(degrees) 57' East through a central angle of 8(degrees) 02' 30" a distance of 40 feet, thence North 59(degrees) 00' 30" West 55.21 feet, thence on a curve to the right with a radius of 285 feet, whose center bears North 30(degrees) 59' 30" East through a central angle of 22(degrees) 42' 30" a distance of 112.96 feet to the point of commencement.


BEING a portion of Lot 20, maps above referred to.


PARCEL TWO: ----------


A NON-EXCLUSIVE EASEMENT for roadway and utilities over the following described parcel of land:


COMMENCING at a point on the Easterly line of the above described parcel distant on said line North 21(degrees) 44' 20" West 20.56 feet and North 7(degrees) 48' East 37.77 feet from the Southwesterly corner thereof; thence North 7(degrees) 48' East 27.00 feet, thence leaving said line South 40(degrees) 00' East 49.84 feet, thence South 17(degrees) 00' East 65.40 feet to a point on the Northerly line of Bret Harte Lane; thence along said lane North 73(degrees) 19' West 24.04 feet, thence leaving said land, North 17(degrees) 00' West 48.00 feet and North 40(degrees) 00' West 27.64 feet to the point of commencement.


PARCEL THREE: ------------


AN EXCLUSIVE EASEMENT for landscaping purpose described as follows:


BEGINNING at a point on the Southwesterly line of the parcel of land conveyed in the Deed from Patrick R. Hayes, et ux, to Benedict Viering, et ux, recorded April 30, 1975 in Book 2890 of Official Records, at Page 198, Marin County Records said portion being distant thereon South 72(degrees) 17' East 22.12 feet from the most Westerly corner thereof; thence from said point of beginning along said Southwesterly line South 72(degrees) 17' East 79.63 feet; thence leaving said Southwesterly line North 17[degrees] 43' East 2.45 feet; thence North 64(degrees) 22' 25" West 79.21 feet and South 22(degrees) 43' 11" West 13.40 feet to the point of beginning.


5.


STATE OF CALIFORNIA )
) SS. COUNTY OF SAN FRANCISCO )


On __________________ ___, 2000, before me, ________________________, Notary Public, personally appeared _________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.


WITNESS my hand and official seal.


Signature ___________________________(Seal)


STATE OF CALIFORNIA )
) SS. COUNTY OF SAN FRANCISCO )


On _______________ ___, 2000, before me, ________________________, Notary Public, personally appeared _________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.


WITNESS my hand and official seal.


Signature ______________________________(Seal)


6.


RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:


DIGITAL ISLAND, INC. 45 Fremont Street 12th Floor San Francisco, California 94105 Attention: Mr. Addo Barrows ----------------------------------------------------------------------------------------------------------
(Space Above Line For Recorder's Use Only)


DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
------------------------------------------------
AGREEMENT AND FIXTURE FILING
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THIS DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust"), dated as of November 22, 2000, is made by Charles A. Picasso and Isabelle M. Picasso (collectively, "Trustor"), whose address is 58 Bret Harte Lane, San Raphael, California 94901, in favor of First American Title Company ("Trustee"), whose address is 520 N. Central Avenue, Glendale, California 91203, for the benefit of Digital Island, Inc., a Delaware corporation ("Beneficiary"), whose address is 45 Fremont Street, 12th Floor, San Francisco, California 94105.


1 Grant in Trust. For valuable consideration, Trustor irrevocably grants,
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transfers and assigns to Trustee, in trust, with power of sale, for the
benefit of Beneficiary, the "Property", ...