Exhibit 10.28
PROMISSORY NOTE
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$300,000 San Jose, California
January ___, 1999
FOR VALUE RECEIVED, the undersigned, Xxxxxx X. Xxxxxx ("Employee") and
Xxxxx X. Xxxxxx, husband and wife ("Borrowers"), promise to pay to Symmetricom,
Inc., a California corporation (the "Company"), or order, the principal amount
of Three Hundred Thousand Dollars ($300,000) together with interest on the
outstanding principal balance at the rate of five percent (5%) per annum.
The outstanding principal amount and all accrued and unpaid interest on the
outstanding principal amount, to the extent not forgiven pursuant to the terms
hereof, shall be due and payable to the holder hereof at 0000 Xxxxxxx Xxxxxxx,
Xxx Xxxx, Xxxxxxxxxx 00000, or such other place as the holder hereof may
designate, upon the earlier of the following dates (collectively, "Maturity
Events"):
(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.
Notwithstanding the foregoing to the contrary, on each of June 25, 1999,
June 25, 2000 and June 25, 2001 (each, a "Forgiveness Date"), so long as there
is then no uncured default hereunder or a default under that certain Promissory
Note between Borrower and the Company of even date herewith with an original
principal amount of $500,000 (the "Other Note"), or the deed of trust securing
the Other Note, Employee is still employed by the Company, and no Maturity Event
shall have occurred, the principal amount hereof shall be automatically reduced
by the sum of One Hundred Thousand Dollars ($100,000) and all accrued and unpaid
interest on the outstanding principal amount shall be automatically forgiven,
without fee or penalty, and on each such date Borrowers shall be released and
relieved from the obligation to repay such amounts to the holder hereof.
Any portion of the outstanding principal amount and all accrued and unpaid
interest which is not forgiven pursuant to this paragraph shall be due and
payable as otherwise set forth in this Note.
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) Borrowers default in the payment of principal or interest when due
pursuant to the terms hereof; (ii) any representation or warranty contained in
this Note or any other agreement or instrument executed in connection with the
loan proves to have been false or misleading in any material respect; (iv)
Borrowers default in their obligation to pay any indebtedness or to perform any
other obligation hereunder; or (v) Borrowers default in their obligation to pay
any indebtedness evidenced by any promissory note executed by Borrowers 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.
In the event any amount owed by Borrowers pursuant to this 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.
If an action is instituted for collection of this Note, the Borrowers agree
to pay court costs and reasonable attorneys' fees incurred by the holder
thereof.
This Note may be amended or modified, and provisions hereof may be waived,
only by the written agreement of Borrowers and the holder hereof. No delay or
failure by the holder hereof in exercising any right, power or remedy hereunder
shall operate as a waiver of such right, power or remedy, and a waiver of any
right, power or remedy on any one occasion shall not operate as a bar or waiver
of any such right, power or remedy on any other occasion. Without limiting the
generality of the foregoing, the delay or failure by the holder hereof for any
period of time to enforce collection of any amounts due hereunder shall not be
deemed to be a waiver of any rights of the holder hereof under contract or under
law. The rights of the Company under this Note are in addition to any other
rights and remedies which the holder hereof may have.
This Note shall be governed by and construed in accordance with the laws of
the State of California, without regard to the principles of conflicts of laws
of that State.
This Note may be prepaid at any time without penalty.
THIS NOTE AND ALL RELATED DOCUMENTATION ARE EXECUTED VOLUNTARILY AND WITHOUT ANY
DURESS OR UNDUE INFLUENCE ON THE PART OR BEHALF OF THE PARTIES HERETO, WITH THE
FULL INTENT OF CREATING THE OBLIGATIONS HEREIN. 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, AND THE OBLIGATIONS
THEY CREATE; AND (d) THEY ARE FULLY AWARE OF THE LEGAL AND BINDING EFFECT OF
THIS NOTE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BORROWERS HEREBY
ACKNOWLEDGE THAT THE COMPANY HAS MADE NO REPRESENTATION OR WARRANTY TO BORROWERS
CONCERNING THE INCOME TAX CONSEQUENCES OF THE LOAN TO BORROWERS, AND BORROWERS
SHALL BE SOLELY RESPONSIBLE FOR ASCERTAINING AND BEARING SUCH TAX CONSEQUENCES.
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.
BORROWERS:
___________________________
Xxxxxx X. Xxxxxx
___________________________
Xxxxx X. Xxxxxx
