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Exhibit 10.38
AMENDED AND RESTATED PROMISSORY NOTE
$2,098,000.00 August 1, 2000, as amended and
restated, effective April 24, 2001
FOR VALUE RECEIVED, Thomas M. Burkardt (the "Maker"), promises to pay
to Unisphere Networks, Inc., a Delaware corporation (the "Company"), or order,
at its principal executive offices, the principal sum of Two Million
Ninety-Eight Thousand Dollars ($2,098,000.00), together with interest on the
unpaid principal balance of this Note from time to time outstanding at a rate
per annum equal to the Floating Rate (as defined below), which interest shall be
payable in arrears semi-annually beginning six (6) months from the date of this
note, until paid in full. Principal and interest on this Note shall be paid in
full on January 1, 2004.
"Floating Rate" shall mean a rate per annum equal to the six month
LIBOR index rate, plus fifty (50) basis points, which such rate shall be
redetermined and changed on each six month anniversary of this Note (or if any
such six month anniversary is not a business day, on the next succeeding
Business Day). "Business Day" shall mean any day other than Saturday, Sunday or
any other day on which commercial banks in the State of New York are authorized
or required to close under the laws of the State of New York. Interest on this
Note shall be computed on the basis of a year of 365 days for the actual number
of days elapsed.
Payment of this Note is secured by a security interest in shares of
Common Stock of the Company acquired by the Maker pursuant to the Restricted
Stock Agreement between the Maker and the Company of even date herewith (the
"Restricted Stock Agreement"), pursuant to a pledge agreement of even date
herewith between the Maker and the Company (the "Pledge Agreement").
The Company shall have (i) full recourse against the Collateral under
the Pledge Agreement in connection with the repayment of the principal of the
Note and accrued interest thereon and (ii) recourse up to the Recourse Amount
(as hereinafter defined) against any other assets of the Maker. The Recourse
Amount as of any time shall mean (i) 25% of the principal amount hereof reduced
by 25% of each payment of principal made by or on behalf of the Maker from any
source and (ii) the full amount of accrued interest under this Note.
The Maker may at any time and from time to time prepay, in whole or in
part, any of the principal balance hereof or accrued interest thereon.
The Maker may make any payment under this Note in cash and/or by
surrender to the Company of shares of Common Stock of the Company held by the
Maker ("Shares") having a Fair Market Value equal to the amount being paid;
provided any such Shares shall have been held by the Maker and free of the
Purchase Option set forth in the Restricted Stock Agreement for a period of at
least six months prior to such surrender. "Fair Market Value" shall mean: (i) if
the Common Stock is then listed on the Nasdaq National Market or a national
securities exchange, the last reported sale price of the Common Stock of the
Company on the date of payment or (ii) if the Common Stock is not so listed, the
then fair market value of the Common Stock as agreed upon by the Maker and the
Board of Directors of the Company or, absent such agreement, the then fair
market value as determined by an investment banking firm of national
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standing mutually selected by the Maker and the Company (such fair market value
to be determined on a going concern basis without discount for illiquidity or
minority interest). The cost of any such investment banking firm shall be shared
equally by the Maker and the Company. If the Shares are exchanged for securities
of another company pursuant to an Acquisition Event (as defined in the
Restricted Stock Agreement), the Maker may make payment under this Note by
surrender of such securities, valued in accordance with the foregoing. Any
surrendered shares or securities shall be free of all liens and encumbrances and
shall be duly endorsed for transfer to the Company.
This Note shall become immediately due and payable without notice or
demand upon the occurrence at any time of any of the following events of default
(individually, "an Event of Default" and collectively, "Events of Default"):
1. default in the payment when due of any principal or interest
under this Note which is not cured within 10 days after
written notice thereof (provided that any delay in payment
attributable to a delay in the determination of the fair
market value of Shares to be surrendered in payment of
principal or interest shall not be considered a default);
2. the occurrence of any Event of Default under the Pledge
Agreement; or
3. the institution by or against the Maker of any proceedings
under the United States Bankruptcy Code or any other federal
or state bankruptcy, reorganization, receivership, insolvency
or other similar law affecting the rights of creditors
generally or the making by the Maker of a composition or an
assignment or trust mortgage for the benefit of creditors.
Upon the occurrence of an Event of Default, the holder shall have then,
or at any time thereafter, all of the rights and remedies afforded the secured
creditor by the Uniform Commercial Code as from time to time in effect in the
Commonwealth of Massachusetts or afforded by other applicable law.
No delay or omission on the part of the holder in exercising any right
under this Note or the Pledge Agreement shall operate as a waiver of such right
or of any other right of such holder, nor shall any delay, omission or waiver on
any one occasion be deemed a bar to or waiver of the same or any other right on
any future occasion. The Maker regardless of the time, order or place of signing
waives presentment, demand, protest and notices of every kind.
All rights and obligations hereunder shall be governed by the laws of
the Commonwealth of Massachusetts and this Note is executed as an instrument
under seal.
/s/ Thomas M. Burkardt
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Thomas M. Burkardt
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