Exhibit 10.29
PROMISSORY NOTE
SECURED BY DEED OF TRUST
$500,000.00 January __, 1999
San Jose, California
FOR VALUE RECEIVED, the undersigned, Xxxxxx X. Xxxxxx ("Employee") and
Xxxxx X. Xxxxxx, husband and wife (jointly and severally, the "Borrower"),
promise to pay to Symmetricom, Inc., a California corporation ("Lender" and
"Company"), at 0000 Xxxxxxx Xxxxxxx, Xxx Xxxx, XX 00000 (or at such other place
as Lender may from time to time designate by written notice to Xxxxxxxx), in
lawful money of the United States, the principal sum of FIVE HUNDRED THOUSAND
DOLLARS ($500,000.00), on the following terms:
1. PAYMENT:
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Upon the occurrence of a Maturity Event (as defined herein), the
entire principal amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) shall be
immediately due and payable in lawful money of the United States.
2. SECURITY: This Note is secured by a deed of trust of even date
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herewith made by Xxxxxxxx, as trustor, to First American Title Insurance
Company, as trustee, (the "Trustee") for Lender, as beneficiary, (the "Deed of
Trust") which (i) shall be executed and delivered by Borrower to Lender
concurrently upon the execution of this Note, and (ii) shall be recorded by
Xxxxxx or Trustee in the official records of the County of Santa Xxxxx, State of
California as soon as possible following the close of escrow for the Property
(defined below), encumbering certain real property commonly known as 00000
Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx, Xxxxxx xx Xxxxx Xxxxx, State of California
(the "Property"), described with particularity in the Deed of Trust, which
Xxxxxxxx intends to occupy as his principal place of residence.
3. MATURITY EVENT: Upon the occurrence of a Maturity Event (as
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hereinafter defined), the entire principal amount of the Loan and any other sums
due hereunder, shall become immediately due and payable without further demand
or notice to Borrower. To the extent permitted by law, any of the following
events shall be a "Maturity Event" under this Note and the Deed of Trust:
(i) Five (5) days following the date that Employee resigns from the
Company.
(ii) Five (5) days following the date that Employee's employment with the
Company is terminated for cause. The term "termination for cause" includes,
without limitation, dishonesty,
commission of a felony, a breach of Employee's fiduciary duty or willful failure
to follow a directive of the Company or the Board of Directors of the Company.
(iii) Three hundred sixty (360) days following the date that Employee's
employment with the Company is terminated without cause.
(iv) The date of any sale, conveyance, assignment, alienation or any
other form of transfer, whether voluntary or involuntary, of that certain real
property commonly known as 00000 Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx (the
"Property"), or any part thereof or interest therein; except that the following
transfers of the Property shall not be deemed to be a Maturity Event:
a) A transfer upon the death of Employee to Employee's surviving
spouse (provided the surviving spouse is an obligor hereunder) or to Employee
upon the death of Employee's surviving spouse;
b) A transfer by an obligor hereof whereby such obligor's spouse
becomes a co-owner of the Property;
c) A transfer resulting from a decree of dissolution of the
marriage or legal separation of Employee and Xxxxx X. Xxxxxx or from a property
settlement agreement incidental to such a decree which requires the obligor
spouse to assume responsibility for the obligations under this Note and the Deed
of Trust (hereinafter defined) and pursuant to which Employee or Xxxxx X. Xxxxxx
(whoever is the obligor) becomes the sole owner of the Property; or
d) A transfer by one or both obligors under the Note into an inter
vivos trust in which one or both obligors are beneficiaries.
(v) March 25, 2008.
In the event that any of the following occurs, then unless otherwise
prohibited by law, the holder hereof shall have the option, without demand or
notice, to declare the entire outstanding principal balance of this Note,
together with all accrued and unpaid interest thereon to be immediately due and
payable: (i) Borrower defaults in the payment of principal or interest when due
pursuant to the terms hereof; (ii) Borrower defaults in his performance of any
obligation contained in the deed of trust encumbering the Property and securing
this Note (the "Deed of Trust"), any other deed of trust, security agreement or
other agreement (including any amendment, modification or extension thereof)
which may hereafter be executed by Borrowers for the purpose of securing this
Note, or the "First Deed of Trust"; (iii) any representation or warranty
contained in this Note, the Deed of Trust, or any other agreement or instrument
executed in connection with the loan proves to have been false or misleading in
any m aterial respect; (iv) Borrowers default in their obligation to pay any
indebtedness or to perform any other obligation which is secured by a deed of
trust or other lien on the Property or default under any deed of
trust securing such indebtedness; or (v) Borrowers default in their obligation
to pay any indebtedness evidenced by any promissory note executed by Xxxxxxxxx
and payable to the holder hereof or there occurs any other default under any
deed of trust, mortgage or other document securing repayment of such
indebtedness.
4. INTEREST: In the event any amount owed by Borrower pursuant to this
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Note is not paid when due, such unpaid amount shall bear interest from the due
date until paid at a rate equal to the lower of: (i) ten percent (10%) per
annum; or (ii) the maximum rate permitted by law. After such due date, all
payments shall be credited first to accrued interest and then to principal.
5. BORROWER'S REPRESENTATIONS: Borrower hereby makes the following
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representations and warranties to the Lender and acknowledges that Lender is
relying on such representations in making the loan:
(a) As of the date of the close of escrow for the Property and as of
the date of recording of the Deed of Trust, Borrower shall have good and
marketable title to the Property free and clear of any security interests,
liens or encumbrances other than the First Deed of Trust, as defined in
Paragraph 8 below.
(b) As of the date of the close of escrow for the Property and as of
the date of recording of the Deed of Trust, the consent of no other person
or entity is required to grant the security interest in the Property to the
Lender evidenced by the Deed of Trust.
(c) There are no actions, proceedings, claims or disputes pending or,
to the Borrower's actual knowledge threatened against or affecting the
Borrower or the Property.
6. BORROWER'S ADDITIONAL OBLIGATIONS: Borrower shall take any and all
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further actions that may from time to time be required to ensure that the Deed
of Trust creates a valid lien on the Property in favor of the Lender, which
shall secure the Note and be junior in priority only to the First Deed of Trust.
Borrower shall furnish evidence reasonably satisfactory to the Lender that: (i)
Borrower has good and marketable title to the Property; (ii) the consent of no
other person or entity is required to grant a security interest in the Property
to the Lender; and (iii) there is no other deed of trust, mortgage or
encumbrance against the Property other than the First Deed of Trust. If it
should be hereafter determined that there are defects against title or matters
which could result in defects against title to the Property, or that the consent
of another person or entity is required to grant to and perfect in the Lender a
valid second-priority lien on the Property, Borrower shall promptly take all
action necessary to remove such defects and to obtain such consent and grant (or
cause to be granted) and perfect such lien on the Property. Failure of Borrower
to comply with the provisions of this Paragraph 6 shall be deemed a default
under the Note and the Deed of Trust.
7. DEED OF TRUST: As used herein, "Deed of Trust" shall mean the deed of
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trust constituting a second-priority lien against the Property by Xxxxxxxx to
First American Title Insurance Company, as trustee, (the "Trustee") for the
benefit of Lender, as beneficiary, to be recorded by Lender or Trustee following
close of escrow for the Property in the Official Records of the County of Santa
Xxxxx, State of California, securing a loan in the original principal amount of
FIVE HUNDRED THOUSAND DOLLARS ($500,000.00).
8. FIRST DEED OF TRUST: As used herein, "First Deed of Trust" shall mean
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the deed of trust constituting a first-priority lien against the Property, by
Xxxxxxxx to Equitable Deed Company, as trustee, for the benefit of Bank of
America, Federal Savings Bank, as beneficiary, recorded December 30, 1998 under
Recorder's Serial Number 14574954 in the Official Records of the County of Santa
Xxxxx, State of California securing a loan in a principal amount not in excess
of EIGHT HUNDRED FIFTY THOUSAND DOLLARS ($850,000),
9. NOTICE: This Note is subject to Section 2924(i) of the California
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Civil Code which provides that the holder of this Note, shall give written
notice to the trustor or his successor-in-interest, of prescribed information at
least ninety (90) days and not more than one hundred and fifty (150) days before
any balloon payment is due.
10. ATTORNEYS' FEES: In the event of Xxxxxxxx's default hereunder,
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Borrower shall pay all costs of collection, including reasonable attorneys' fees
incurred by the holder hereof on account of such collection, whether or not suit
is filed hereon.
11. WAIVER: The waiver by Lender of any breach of or default under any
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term, covenant or condition contained herein or in any other agreement referred
to above shall not be deemed to be a waiver of any subsequent breach of or
default under the same or any other such term, covenant or condition.
12. NO USURY: Borrower hereby represents and warrants that at no time
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shall the proceeds of the indebtedness evidenced hereby be used "primarily for
personal, family, or household purposes" as that term is defined and used in
Article XV of the California Constitution (as amended from time to time).
Anything in this Note to the contrary notwithstanding, it is expressly
stipulated and agreed that the intent of Xxxxxxxx and Xxxxxx is to comply at all
times with all usury and other laws relating to this Note. If the laws of the
State of California would now or hereafter render usurious, or are revised,
repealed or judicially interpreted so as to render usurious, any amount called
for under this Note, or contracted for, charged or received with respect to the
loan evidenced by this Note, or if any prepayment by Borrower results in
Borrower having paid any interest in excess of that permitted by law, then it is
Xxxxxxxx's and Xxxxxx's express intent that all excess amounts theretofore
collected by Xxxxxx be credited to the principal balance of this Note (or, if
this Note has been paid in full, refunded to Borrower), and the provisions of
this Note immediately be deemed reformed and the amounts therefor collectible
hereunder reduced, without the necessity of execution of any new document, so as
to comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder.
13. PREPAYMENT: Borrower may prepay all or any portion of this Note at any
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time prior to the stated maturity date, with no premium or penalty.
14. GENERAL PROVISIONS: This Note shall be governed by and construed in
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accordance with the laws of the State of California. The maker of this Note
hereby waives presentment for payment, protest and demand, notice of protest,
demand and dishonor and nonpayment of this Note, and consents that Lender may
extend the time for payment or otherwise modify the terms of payment or any part
of the whole of the debt evidenced by this Note, at the request of any person
liable hereon, and such consent shall not alter nor diminish the liability of
any person. Borrower hereby waives the defense of the statute of limitations in
any action on this Note to the extent permitted by law.
15. THIS NOTE, THE DEED OF TRUST AND ALL RELATED DOCUMENTATION ARE
EXECUTED VOLUNTARILY AND WITHOUT ANY DURESS OR UNDUE INFLUENCE ON THE PART OF OR
ON BEHALF OF THE PARTIES HERETO, WITH THE FULL INTENT OF CREATING THE
OBLIGATIONS AND SECURITY INTERESTS DESCRIBED HEREIN AND THEREIN. THE PARTIES
ACKNOWLEDGE THAT: (a) THEY HAVE READ SUCH DOCUMENTATION; (b) THEY HAVE BEEN
REPRESENTED IN THE PREPARATION, NEGOTIATION AND EXECUTION OF SUCH DOCUMENTATION
BY LEGAL COUNSEL OF THEIR OWN CHOICE OR THAT THEY HAVE VOLUNTARILY DECLINED TO
SEEK SUCH COUNSEL; (c) THEY UNDERSTAND THE TERMS AND CONSEQUENCES OF THIS NOTE,
THE DEED OF TRUST AND ALL RELATED DOCUMENTATION AND THE OBLIGATIONS THEY CREATE;
AND (d) THEY ARE FULLY AWARE OF THE LEGAL AND BINDING EFFECT OF THIS NOTE, THE
DEED OF TRUST AND THE OTHER DOCUMENTS CONTEMPLATED BY THIS AGREEMENT. BORROWERS
FURTHER ACKNOWLEDGE THAT (i) THE COMPANY MAY, IN ITS SOLE DISCRETION, DETERMINE
THAT IT IS REQUIRED UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), AND THE RULES AND REGULATIONS PROMULGATED BY THE INTERNAL REVENUE
SERVICE ("IRS") THEREUNDER, TO IMPUTE INTEREST ON THE PRINCIPAL OF THIS NOTE AT
THE RATE SET BY THE IRS, (ii) THE AMOUNT OF ANY SUCH IMPUTED INTEREST WOULD BE
DEEMED TO BE COMPENSATION INCOME TO EMPLOYEE WHICH WOULD BE SUBJECT TO TAX
WITHHOLDING, AND (iii) IF SO DETERMINED BY THE COMPANY, THE COMPANY WOULD REPORT
AND WITHHOLD THE REQUIRED AMOUNT OUT OF THE CURRENT
COMPENSATION PAID TO EMPLOYEE IN ACCORDANCE WITH THE CODE AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
AS BORROWER:
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Xxxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
