EXHIBIT 10.09
SECURED FULL RECOURSE PROMISSORY NOTE
Livermore, California
$_________________________ ____________________, 20__
Reference is made to that certain Stock Option Agreement (the "PURCHASE
AGREEMENT") of even date herewith, by and between the undersigned (the
"PURCHASER") and FormFactor, Inc., a Delaware corporation (the "COMPANY"),
issued to Purchaser under the Company's Management Incentive Option Plan (the
"PLAN"). This Secured Full Recourse Promissory Note (the "NOTE") is being
tendered by Purchaser to the Company as part of the total purchase price of the
Shares (as defined below) pursuant to the Purchase Agreement.
1. OBLIGATION. In exchange for the issuance to the Purchaser pursuant to
the Purchase Agreement of ______________ shares of the Company's Common Stock
(the "SHARES"), receipt of which is hereby acknowledged, Purchaser hereby
promises to pay to the order of the Company on or before _______________, _____,
at the Company's principal place of business, or at such other place as the
Company may direct, the principal sum of ________________________ Dollars
($__________) together with interest compounded semi-annually on the unpaid
principal at the rate of _________ percent (___%), which rate is not less than
the minimum rate established pursuant to Section 1274(d) of the Internal Revenue
Code of 1986, as amended, on the earliest date on which there was a binding
contract in writing for the purchase of the Shares; provided, however, that the
rate at which interest will accrue on unpaid principal under this Note will not
exceed the highest rate permitted by applicable law. All payments hereunder
shall be made in lawful tender of the United States.
2. SECURITY. Performance of Purchaser's obligations under this Note is
secured by a security interest in the Shares granted to the Company by Purchaser
under a Stock Pledge Agreement dated of even date herewith between the Company
and Purchaser (the "PLEDGE AGREEMENT").
3. EVENTS OF DEFAULT. Purchaser will be deemed to be in default under
this Note upon the occurrence of any of the following events (each an "EVENT OF
DEFAULT"): (i) upon Purchaser's failure to make any payment when due under this
Note; which failure shall continue for a period of ten (10) days after such due
date; (ii) Purchaser is Terminated (as defined in the Plan) for any reason;
(iii) the failure of any representation or warranty in the Pledge Agreement to
have been true, the failure of Purchaser to perform any obligation under the
Pledge Agreement, or upon any other breach by the Purchaser of the Pledge
Agreement; (iv) any voluntary or involuntary transfer of any of the Shares or
any interest therein (except a transfer to the Company); (v) upon the filing
regarding the Purchaser of any voluntary or involuntary petition for relief
under the United States Bankruptcy Code or the initiation of any proceeding
under federal law or law of any other jurisdiction for the general relief of
debtors; or (vi) upon the execution by ▇▇▇▇▇▇▇▇▇ of an assignment for the
benefit of creditors or the appointment of a receiver, custodian, trustee or
similar party to take possession of Purchaser's assets or property.
4. ACCELERATION; REMEDIES ON DEFAULT. Upon the occurrence of any Event
of Default, at the option of the Company, all principal and other amounts owed
under this Note shall become immediately due and payable without notice or
demand on the part of the Company, and the Company will have, in addition to its
rights and remedies under this Note, the
Pledge Agreement, full recourse against any real, personal, tangible or
intangible assets of Purchaser, and may pursue any legal or equitable remedies
that are available to it.
5. RULE 144 HOLDING PERIOD. PURCHASER UNDERSTANDS THAT THE HOLDING
PERIOD SPECIFIED UNDER RULE 144(d) OF THE SECURITIES AND EXCHANGE COMMISSION
WILL NOT BEGIN TO RUN WITH RESPECT TO SHARES PURCHASED WITH THIS NOTE UNTIL
EITHER (i) THE EXERCISE PRICE OF SUCH SHARES IS PAID IN FULL IN CASH OR BY OTHER
PROPERTY ACCEPTED BY THE COMPANY, OR (ii) THIS NOTE IS SECURED BY COLLATERAL,
OTHER THAN THE SHARES THAT HAVE NOT BEEN FULLY PAID FOR IN CASH, HAVING A FAIR
MARKET VALUE AT LEAST EQUAL TO THE AMOUNT OF PURCHASER'S THEN OUTSTANDING
OBLIGATION UNDER THIS NOTE (INCLUDING ACCRUED INTEREST).
6. PREPAYMENT. Prepayment of principal and/or other amounts owed under
this Note may be made at any time without penalty. Unless otherwise agreed in
writing by the Company, each payment will be applied to the extent of available
funds from such payment in the following order: (i) first to the accrued and
unpaid costs and expenses under the Note or the Pledge Agreement, (ii) then to
accrued but unpaid interest, and (iii) lastly to the outstanding principal.
7. GOVERNING LAW; WAIVER. The validity, construction and performance of
this Note will be governed by the internal laws of the State of California,
excluding that body of law pertaining to conflicts of law. Purchaser hereby
waives presentment, notice of non-payment, notice of dishonor, protest, demand
and diligence.
8. ATTORNEYS' FEES. If suit is brought for collection of this Note,
▇▇▇▇▇▇▇▇▇ agrees to pay all reasonable expenses, including attorneys' fees,
incurred by the holder in connection therewith whether or not such suit is
prosecuted to judgment.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇▇ has executed this Note as of the date and
year first above written.
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Purchaser's Name [type or print] Purchaser's Signature
FULL RECOURSE PROMISSORY NOTE
Livermore, California
$_________________________ ____________________, 19__
FOR VALUE RECEIVED, ______________ (the "Maker") promises to pay to
FormFactor, Inc., a Delaware corporation (the "Company"), or order, the
principal sum of __________________________ ($____________) (such amount
representing the total purchase price of the Common Stock minus the payment
received for the aggregate value of the par value of the Common Stock), together
with interest on the unpaid principal hereof from the date hereof at the rate of
____% per annum, compounded semiannually.
Subject to the following two sentences, principal and interest shall be
due and payable on the date this Note is due and payable. Should the undersigned
fail to make full payment of any installment of principal or interest for a
period of 10 days or more after the due date thereof, or should the
undersigned's employment or consulting relationship with the Company be
terminated for any reason (or for no reason), the whole unpaid balance on this
Note of principal and interest shall become immediately due at the option of the
holder of this Note. This promissory note shall be due and payable (if not
previously due and payable or paid in fact) upon the earliest to occur of any of
the following: (i) the date the Maker is entitled to sell shares in an
established public market or (ii) the date the Maker receives cash from an
acquiror of the Company in connection with such acquisition or (iii) the date
the Maker is entitled to sell any securities received in any such acquisition or
(iv) the sixth anniversary of the date of this Note. Payments of principal and
interest shall be made in lawful money of the United States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of a Restricted Stock Purchase
Agreement, dated as of ______________. This Note is secured by a pledge of the
Company's Common Stock under the terms of a Security Agreement of even date
herewith and is subject to all the provisions thereof.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
THE HOLDER OF THlS NOTE MAY PROCEED AGAINST ANY ASSETS OF THE MAKER, OR
AGAINST THE COLLATERAL SECURING THIS NOTE, OR BOTH, IN THE EVENT OF DEFAULT.
Name: ____________________________ ________________________________