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EXHIBIT 10.1
$175,OOO.OO Tustin, California
April 30,1997
FOR VALUE RECEIVED, the undersigned, Xxxxx X. XXxxx, Xx. ("Employee")
and Xxxxxxxx X. Xxxxx, husband and wife (collectively, "Borrower"), promise to
pay to VitalCom Inc. a Delaware corporation (the "Company"), or order, the
principal amount of One Hundred Seventy-Five Thousand Dollar. ($l75,000)
together with interest thereon at the rate of eight and fifty hundredths percent
(8.50%) per annum. The principal amount hereof and all accrued and unpaid
interest on the outstanding principal amount shall be due and payable to the
holder hereof at 00000 Xxx Xxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000, or such other
place as the holder hereof may designate as follows:
A. All accrued and unpaid interest, if not sooner paid, shall be due
and payable as follows upon the earlier of the following dates
(collectively, "Interest Maturity Events")
(1) May 1, 2000 and annually each May 1 thereafter, until one
of the other Interest Maturity Events occur and final payment
is made On the principal amount.
(2) Thirty (30) days fo1lowing the date of termination of the
employment of Employee with the Company, whether voluntary or
involuntary, and whether with cause or without cause.
(3) 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
0000 Xxxxxxxxxx, Xxxxxxx, XX (the "First Property") or of that
certain real property commonly known as 52 Emerald, Irvine, CA
92604 (the "Second Property"), or any part or interest in
either.
B. The principal amount, if not sooner paid, shall be due and payable
as follows upon the earlier of the following dates (collectively,
'Maturity Events"):
(1) Thirty (30) days following the date of termination of the
employment of Employee with the Company, whether voluntary or
involuntary, and whether with cause or without cause.
(2) The date of any sale, conveyance, assignment, alienation
or any other form of transfer, whether voluntary or
involuntary, of the First Property or of
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the Second Property, or any part or interest in either;
except that the following transfers of the Property sha11
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 upon the death of
Employee's spouse to Employee;
(b) A transfer by an obligor hereof whereby such
xxxxxxx's spouse becomes a co-owner of the property
transferred;
(c) A transfer resulting from a decree of dissolution
of the marriage or legal separation of Employee and
Xxxxxxxx X. Xxxxx 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 pursuant to which
Employee or Xxxxxxxx X. Xxxxx (whoever is the
obligor) becomes the sole owner of the First property
or Second Property; or
(d) a transfer by one or both obligors under this
Note into an inter vivos trust in which one or both
obligors are beneficiaries.
(3) The fifth (5th) anniversary of the date hereof (the
"Maturity Date"). The obligations of borrower under this Note shall be
secured by a second-priority deed of trust (the "Deed of Trust") on the
First Property (the "Property"). Borrower hereby represents and
warrants to the Company as follows:
1. The Deed of Trust on the Property shall be subordinate only to a
deed of trust made by Xxxxxxxx, as trustor, for the benefit of The Prudential
Home Mortgage Company, Inc. securing a note in the amount of $420,000 (the
"First Deed of Trust").
2. Borrower has good and marketable title to the Property free and
clear of any security interests, liens or encumbrances other than the First Deed
of Trust.
3. The consent of no other person or entity is required to grant a
security interest in the Property to the Company.
There is no deed of trust, mortgage or encumbrance against the
Property other than the First Deed of Trust.
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If it should hereafter be determined that there are defects against tide or
matters that 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
Company a valid second-priority lien on the Property, Borrower shall promptly on
demand by the Company, take all actions 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
shall be deemed a default under this Note and the Deed of Trust.
At the request of the Company, Xxxxxxxx shall enter into a note (the
"California Note") in the face amount of $100,000 and terms substantially
similar to those set forth in this Note, secured by a recorded second deed of
trust on the Second Property. In such event, the principal amount of this Note
shall be reduced by an amount equa1 to the face amount of the California Note
In addition to causing the execution and delivery of the Deed of mist,
Xxxxxxxx shall take any and all 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 Company, which shall secure this Note and be junior in priority
only to the First Deed of Trust.
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 arid 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 its performance of
any obligation contained in the Deed of Trust or any other deed of trust,
security agreement or other agreement (including any amendment, modification or
extension thereof which may hereafter be executed by Borrower for the purpose of
securing this Note; (iii) ally representation or warranty contained in this Note
or the Deed of Trust or any other agreement Or instrument executed in connection
with the loan evidenced hereby proves to have been false or misleading in any
material respect; (iv) Borrower defaults in 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; (V) Borrower defaults in any obligation to pay, or there is an
acceleration of, any indebtedness evidenced by any promissory note executed by
Borrower and payable to the holder hereof, including, but not limited to, the
California Note, or there occurs any other default under any deed of trust,
mortgage or other document securing repayment of such indebtedness; or (vi) the
amount of the indebtedness secured by any deed of trust, lien or other
encumbrance encumbering the Property that is senior to the Deed of Trust is
increased over the amount of such indebtedness existing as of the date of this
Note
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In the event any amount owed by Borrower 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 lesser 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, Xxxxxxxx agrees
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 Borrower 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 bolder hereof 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 Texas. Xxxxxxxx acknowledges, notwithstanding the deed of
trust securing the payments made hereunder, that this Note and all amounts due
hereunder are the personal joint and several liability of the Borrower, and are
fully recourse to the Borrower.
This Note may be prepaid at any time without penalty.
BORROWER:
/s/ Xxxxx X. Xxxxx
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/s/ Xxxxxxxx X. Xxxxx
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