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EXHIBIT 10.31
PROMISSORY NOTE
$__________________________ _____________________, 2000
Spokane, WA
FOR VALUE RECEIVED, Telect, Inc., a Washington corporation, ("Debtor"
herein), promises to pay to the order of _______________________ ("Lender"
herein), the sum equal to the amount determined under Section 1368(e)(1)(A) of
the Internal Revenue Code of 1986 constituting the Lender's pro rata share of
Debtor's accumulated adjustments account as reflected on the books of the Debtor
as of the Closing Date, together with interest at the Bank of America prime rate
in effect on the date of this Note, as set forth above, with the entire unpaid
principal balance, and any accrued but unpaid interest thereon, due and payable
on or before ninety (90) days after the date of this Note. Interest shall be
computed on the outstanding principal balance hereunder, accruing from such date
until paid. Interest shall be compounded on a monthly basis.
Debtor shall have the right, upon payment of all interest accrued to the
date of payment, to prepay at any time, without premium or penalty, all or any
part of the principal amount of this Note. All payment of principal and interest
hereunder shall be in such manner or place as instructed in writing by Xxxxxx
and shall be applied first against accrued interest and then against principal.
This Note is unsecured.
This Note is executed by Debtor pursuant to the terms of that certain
Tax Indemnification and S Corporation Distribution Agreement dated ______, 2000,
by and between Lender, the other Stockholders identified in Schedule A thereto
and Debtor (the "S Corporation Agreement"). Capitalized terms not defined herein
shall have the meanings set forth in the S Corporation Agreement. The principal
amount of this Note shall be subject to adjustment, upward or downward, in the
event of an adjustment to the AAA Dividend under the terms of the S Corporation
Agreement. Upon any such adjustment to the principal amount owed hereunder, the
accrued interest thereon from the date of this Note shall be retroactively
recalculated and future interest on such adjusted principal balance shall
thereafter accrue at the rate set forth above until paid.
Debtor and all persons, corporations or other entities now or at any
time liable for payment of the indebtedness evidenced hereby, for themselves,
their heirs, legal representatives, successors and assigns, respectively,
expressly waive presentment for payment, notice of dishonor, protest, notice of
protest and diligence in collection, and agree that the time of any payments or
any part thereof due hereunder may be extended by Lender or any holder hereof.
The nonexercise by the holder of any of his, her or its rights hereunder in any
instance shall not constitute a waiver thereof in that or any subsequent
instance. Any notice required under this Note shall be given in the manner set
forth in the S Corporation Agreement.
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If this Note is not paid when due, Debtor promises to pay all costs of
collection, including attorneys' fees, whether suit is brought or not. The venue
of any suit to collect on this Note shall be in Spokane County, Washington.
This Note is to be construed in all respects and enforced according to
the laws of the State of Washington. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT OR FORBEAR FROM ENFORCEING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
Telect, Inc.
By:____________________________________
Xxxxx X. Xxxxxxxx, President and CEO
