**Exhibit10.46**

THIRD AMENDMENT TOCREDIT AGREEMENT

THIS AMENDMENT TOCREDIT AGREEMENT (this “Amendment”) is entered into as of July 3, 2006, by andbetween SYMMETRICOM, INC., a Delaware corporation (“Borrower”), and WELLS FARGOBANK, NATIONAL ASSOCIATION (“Bank”).

## RECITALS

WHEREAS, Borroweris currently indebted to Bank pursuant to the terms and conditions of thatcertain Credit Agreement between Borrower and Bank dated as of May 1, 2004, asamended from time to time (“Credit Agreement).

WHEREAS, Bank andBorrower have agreed to certain changes in the terms and conditions set forthin the Credit Agreement and have agreed to amend the Credit Agreement toreflect said changes.

NOW, THEREFORE,for valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto agree that the Credit Agreement shall beamended as follows:

1.             Section 1.1 (a) is hereby amendedby deleting “Ten Million Dollars ($10,000,000.00)” as the maximum principalamount available under the Line of Credit, and by substituting for said amount “ThreeMillion Dollars ($3,000,000.00),” with such change to be effective upon theexecution and delivery to Bank of a promissory note dated as of July 3, 2006(which promissory note shall replace and be deemed the Line of Credit Notedefined in and made pursuant to the Credit Agreement) and all other contracts,instruments and documents required by Bank to evidence such change.

2.             Section 1.1 (b) is hereby deletedin its entirety, and the following substituted therefore:

“(b)         Letterof Credit Subfeature.  As asubfeature under the Line of Credit, Bank agrees from time to time during theterm thereof to issue or cause an affiliate to issue standby letters of creditfor the account of Borrower (each, a “Letter of Credit” and collectively, “Lettersof Credit”); provided however, that the aggregate undrawn amount of alloutstanding Letters of Credit shall not at any time exceed three MillionDollars ($3,000,000.00).  The form andsubstance of each Letter of Credit shall be subject to approval by Bank, in itssole discretion.  Each Letter of Creditshall be issued for a term not to exceed three hundred sixty five (365) days, asdesignated by Borrower; provided however, that no Letter of Credit shall havean expiration date more than three hundred sixty five (365) days beyond thematurity date of the Line of Credit.  Theundrawn amount of all Letters of Credit shall be reserved under the Line ofCredit and shall not be available for borrowings thereunder.  Each Letter of Credit shall be subject to theadditional terms and conditions of the Letter of Credit agreements,applications and any related documents required by Bank in connection with theissuance thereof. Each drawing paid under a Letter of Credit shall be deemed anadvance under the Line of Credit and shall be repaid by Borrower in accordancewith the terms and conditions of this Agreement applicable to such advances;provided however, that if advances under the Line of Credit are not available, forany reason, at the time any drawing is paid, then Borrower shall immediatelypay to Bank the full amount drawn, together with interest thereon from the datesuch drawing is paid to the date such amount is fully repaid by Borrower, atthe rate of interest applicable to advances under the Line of Credit. In suchevent Borrower agrees that Bank, in its sole discretion, may debit any accountmaintained by Borrower with Bank for the amount of any such drawing.”

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3.             The following is hereby added tothe Credit Agreement as Section 1.4:

“SECTION 1.4.   COLLECTION OF PAYMENTS.  Borrowerauthorizes Bank to collect all interest and fees due under each credit subjecthereto by charging Borrower’s deposit account number 4121-042253 with Bank, orany other deposit account maintained by Borrower with Bank, for the full amountthereof.  Should there be insufficientfunds in any such deposit account to pay all such sums when due, the fullamount of such deficiency shall be immediately due and payable by Borrower.

4.             Except as specifically providedherein, all terms and conditions of the Credit Agreement remain in full forceand effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaningwhen used in this Amendment.  ThisAmendment and the Credit Agreement shall be read together, as one document.

5.             Borrower hereby remakes allrepresentations and warranties contained in the Credit Agreement and reaffirmsall covenants set forth therein. Borrower further certifies that as of the date of this Amendment thereexists no Event of Default as defined in the Credit Agreement, nor anycondition, act or event which with the giving of notice or the passage of timeor both would constitute any such Event of Default.

INWITNESS WHEREOF, the parties hereto have caused this Amendment to be executedas of the day and year first written above.

 
| SYMMETRICOM, INC. | WELLS FARGO BANK NATIONAL ASSOCIATION |
|-------------------|---------------------------------------|
|              |                                  |   |
|              |                                  |
| By:               | /s/ William  Slater                   |   | By: | /s/ Kevin Herr |   |
|              | William Slater                        |   | Kevin Herr |
|              | Chief Financial  Officer              |   | Vice President |
|                   |                                       |  |  |  |  |  |  |

 

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** **

# WELLS FARGO                                            *REVOLVING LINE OF CREDITNOTE*

| **$3,000,000.00** | **San  Jose, California** | ** ** |
|-------------------|---------------------------|------------|
| ** **        | **July 3,  2006**         | ** ** |

 

FOR VALUERECEIVED, the undersigned **SYMMETRICOM,INC. **(“Borrower”) promises topay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at itsoffice at **Santa Clara Technology RCBO, 121Park Center Plaza, 3****rd Floor, San Jose, CA 95113,**or at suchother place as the holder hereof may designate, in lawful money of the UnitedStates of America and in immediately available funds, the principal sum of **$3,000,000.00**, or so much thereof as may beadvanced and be outstanding, with interest thereon, to be computed on eachadvance from the date of its disbursement as set forth herein.

1.             **DEFINITIONS:**

Asused herein, the following terms shall have the meanings set forth after each,and any other term defined in this Note shall have the meaning set forth at theplace defined:

1.1           “BusinessDay” means any day except a Saturday, Sunday or any other day on whichcommercial banks in California are authorized or required by law to close.

1.2           “FixedRate Term” means a period commencing on a Business Day and continuing for **1, 2 or 3 months**, as designated byBorrower, during which all or a portion of the outstanding principal balance ofthis Note bears interest determined in relation to LIBOR; provided however,that no Fixed Rate Term may be selected for a principal amount less than **$100,000.00**; and provided further, that noFixed Rate Term shall extend beyond the scheduled maturity date hereof.  If any Fixed Rate Term would end on a daywhich is not a Business Day, then such Fixed Rate Term shall be extended to thenext succeeding Business Day.

1.3           “LIBOR”means the rate per annum (rounded upward, if necessary, to the nearest whole1/8 of 1%) determined by dividing Base LIBOR by a percentage equal to 100% lessany LIBOR Reserve Percentage.

(a)      “BaseLIBOR” means the rate per annum for United States dollar deposits quoted byBank as the Inter-Bank Market Offered Rate, with the understanding that suchrate is quoted by Bank for the purpose of calculating effective rates ofinterest for loans making reference thereto, on the first day of a Fixed RateTerm for delivery of funds on said date for a period of time approximatelyequal to the number of days in such Fixed Rate Term and in an amountapproximately equal to the principal amount to which such Fixed Rate Termapplies.  Borrower understands and agreesthat Bank may base its quotation of the Inter-Bank Market Offered Rate uponsuch offers or other market indicators of the Inter-Bank Market as Bank in itsdiscretion deems appropriate including, but not limited to, the rate offeredfor U.S. dollar deposits on the London Inter-Bank Market.

(b)      “LIBORReserve Percentage” means the reserve percentage prescribed by the Board ofGovernors of the Federal Reserve System (or any successor) for “EurocurrencyLiabilities” (as defined in Regulation D of the Federal Reserve Board, asamended), adjusted by Bank for expected changes in such reserve percentageduring the applicable Fixed Rate Term.

1.4           “PrimeRate” means at any time the rate of interest most recently announced withinBank at its principal office as its Prime Rate, with the understanding that thePrime Rate is one of Bank’s base rates and serves as the basis upon whicheffective rates of interest are calculated for those loans making referencethereto, and is evidenced by the recording thereof after its announcement insuch internal publication or publications as Bank may designate.

2.             **INTEREST:**

2.1           Interest.  The outstanding principal balance of thisNote shall bear interest (computed on the basis of a **360**-day year, actual days elapsed) either (a) at a fluctuatingrate per annum **equal to** the PrimeRate in effect from time to time, or (b) at a fixed rate per annum determinedby Bank to be **1.75000%** above LIBORin effect on the first day of the applicable Fixed Rate Term.  When interest is determined in relation tothe Prime Rate, each change in the rate of interest hereunder shall becomeeffective on the date each Prime Rate change is announced within Bank.  With respect to each LIBOR selection optionselected hereunder, Bank is hereby authorized to note the date, principalamount, interest rate and Fixed Rate Term applicable thereto and any paymentsmade thereon on Bank’s books and records (either manually or by electronicentry) and/or on any schedule attached to this Note, which notations shall beprima facie evidence of the accuracy of the information noted.

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2.2           Selectionof Interest Rate Options.  At anytime any portion of this Note bears interest determined in relation to LIBOR,it may be continued by Borrower at the end of the Fixed Rate Term applicablethereto so that all or a portion thereof bears interest determined in relationto the Prime Rate or to LIBOR for a new Fixed Rate Term designated byBorrower.  At any time any portion ofthis Note bears interest determined in relation to the Prime Rate, Borrower mayconvert all or a portion thereof so that it bears interest determined inrelation to LIBOR for a Fixed Rate Term designated by Borrower.  At such time as Borrower requests an advancehereunder or wishes to select a LIBOR option for all or a portion of theoutstanding principal balance hereof, and at the end of each Fixed Rate Term,Borrower shall give Bank notice specifying: (a) the interest rate optionselected by Borrower; (b) the principal amount subject thereto; and (c) foreach LIBOR selection, the length of the applicable Fixed Rate Term.  Any such notice may be given by telephone (orsuch other electronic method as Bank may permit) so long as, with respect toeach LIBOR selection, (i) if requested by Bank, Borrower provides to Bankwritten confirmation thereof not later than 3 Business Days after such notice isgiven, and (ii) such notice is given to Bank prior to 10:00 a.m. on the firstday of the Fixed Rate Term, or at a later time during any Business Day if Bank,at it’s sole option but without obligation to do so, accepts Borrower’s noticeand quotes a fixed rate to Borrower.  IfBorrower does not immediately accept a fixed rate when quoted by Bank, thequoted rate shall expire and any subsequent LIBOR request from Borrower shallbe subject to a redetermination by Bank of the applicable fixed rate.  If no specific designation of interest ismade at the time any advance is requested hereunder or at the end of any FixedRate Term, Borrower shall be deemed to have made a Prime Rate interestselection for such advance or the principal amount to which such Fixed RateTerm applied.

2.3           Taxesand Regulatory Costs.  Borrower shallpay to Bank immediately upon demand, in addition to any other amounts due or tobecome due hereunder, any and all (a) withholdings, interest equalizationtaxes, stamp taxes or other taxes (except income and franchise taxes) imposedby any domestic or foreign governmental authority and related in any manner toLIBOR, and (b) future, supplemental, emergency or other changes in the LIBORReserve Percentage, assessment rates imposed by the Federal Deposit InsuranceCorporation, or similar requirements or costs imposed by any domestic orforeign governmental authority or resulting from compliance by Bank with anyrequest or directive (whether or not having the force of law) from any centralbank or other governmental authority and related in any manner to LIBOR to theextent they are not included in the calculation of LIBOR.  In determining which of the foregoing isattributable to any LIBOR option available to Borrower hereunder, anyreasonable allocation made by Bank among its operations shall be conclusive andbinding upon Borrower.

2.4           Paymentof Interest.  Interest accrued onthis Note shall be payable on the **1****st** day of each **month**,commencing **August 1, 2006**.

2.5           DefaultInterest.  From and after thematurity date of this Note, or such earlier date as all principal owinghereunder becomes due and payable by acceleration or otherwise, the outstandingprincipal balance of this note shall bear interest until paid in full at anincreased rate per annum (computed on the basis of a **360**-day year, actual days elapsed) equal to 4% above the rateof interest from time to time applicable to this Note.

3.             **BORROWING AND REPAYMENT:**

3.1           Borrowingand Repayment.  Borrower may fromtime to time during the term of this Note borrow, partially or wholly repay itsoutstanding borrowings, and reborrow, subject to all of the limitations, termsand conditions of this Note and of the Credit Agreement between Borrower andBank defined below; provided however, that the total outstanding borrowingsunder this Note shall not at any time exceed the principal amount statedabove.  The unpaid principal balance ofthis obligation at any time shall be the total amounts advanced hereunder bythe holder hereof less the amount of principal payments made hereon by or forBorrower, which balance may be endorsed hereon from time to time by theholder.  The outstanding principalbalance of this Note shall be due and payable in full on **November 1, 2006.**

3.2           Advances.  Advances hereunder, to the total amount ofthe principal sum available hereunder, may be made by the holder at the oraland written request of (a) **William Slater**,any one acting alone, who are authorized to request advances and direct thedisposition of any advances until written notice of the revocation of suchauthority is received by the holder at the office designated above, or (b) anyperson, with respect to advances deposited to the credit of any deposit accountof Borrower, which advances, when so deposited, shall be conclusively presumedto have been made to or for the benefit of Borrower regardless of the fact thatpersons other than those authorized to request advances may have authority todraw against such account.  The holdershall have no obligation to determine whether any person requesting an advanceis or has been authorized by Borrower.

3.3           Applicationof Payments.  Each payment made onthis Note shall be credited first, to any interest then due and second, to theoutstanding principal balance hereof. All payments credited to principal shall be applied first, to theoutstanding principal balance of this Note which bears interest determined inrelation to the Prime Rate, if any, and second, to the outstanding principalbalance of this Note which bears interest determined in relation to LIBOR, withsuch payments applied to the oldest Fixed Rate Term first.

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4.             **PREPAYMENT:**

4.1           PrimeRate.  Borrower may prepay principalon any portion of this Note which bears interest determined in relation to thePrime Rate at any time, in any amount and without penalty.

4.2           LIBOR.  Borrower may prepay principal on any portionof this Note which bears interest determined in relation to LIBOR at any timeand in the minimum amount of **$100,000.00**;provided however, that if the outstanding principal balance of such portion ofthis Note is less than said amount, the minimum prepayment amount shall be theentire outstanding principal balance thereof. In consideration of Bank providing this prepayment option to Borrower,or if any such portion of this Note shall become due and payable at any timeprior to the last day of the Fixed Rate Term applicable thereto by accelerationor otherwise, Borrower shall pay to Bank immediately upon demand a fee which isthe sum of the discounted monthly differences for each month from the month ofprepayment through the month in which such Fixed Rate Term matures, calculatedas follows for each such month:

(a)      Determinethe amount of interest which would have accrued each month on the amountprepaid at the interest rate applicable to such amount had it remainedoutstanding until the last day of the Fixed Rate Term applicable thereto.

(b)      Subtractfrom the amount determined in (a) above the amount of interest which would haveaccrued for the same month on the amount prepaid for the remaining term of suchFixed Rate Term at LIBOR in effect on the date of prepayment for new loans madefor such term and in a principal amount equal to the amount prepaid.

(c)      Ifthe result obtained in (b) for any month is greater than zero, discount thatdifference by LIBOR used in (b) above.

Borrower acknowledges that prepayment of such amountmay result in Bank incurring additional costs, expenses and/or liabilities, andthat it is difficult to ascertain the full extent of such costs, expensesand/or liabilities.  Borrower, therefore,agrees to pay the above-described prepayment fee and agrees that said amountrepresents a reasonable estimate of the prepayment costs, expenses and/orliabilities of Bank.  If Borrower failsto pay any prepayment fee when due, the amount of such prepayment fee shallthereafter bear interest until paid at a rate per annum **2.000%** above the Prime Rate in effect fromtime to time (computed on the basis of a **360**-dayyear, actual days elapsed).

5.             **EVENTS OF DEFAULT:**

ThisNote is made pursuant to and is subject to the terms and conditions of thatcertain Credit Agreement between Borrower and Bank dated as of May 1, 2004, asamended from time to time (the “Credit Agreement”).  Any default in the payment or performance ofany obligation under this Note, or any defined event of default under theCredit Agreement, shall constitute an “Event of Default” under this Note.

6.             **MISCELLANEOUS:**

6.1           Remedies.  Upon the occurrence of any Event of Default,the holder of this Note, at the holder’s option, may declare all sums ofprincipal and interest outstanding hereunder to be immediately due and payablewithout presentment, demand, notice of nonperformance, notice of protest,protest or notice of dishonor, all of which are expressly waived by Borrower,and the obligation, if any, of the holder to extend any further credithereunder shall immediately cease and terminate.  Borrower shall pay to the holder immediatelyupon demand the full amount of all payments, advances, charges, costs andexpenses, including reasonable attorneys’ fees (to include outside counsel feesand all allocated costs of the holder’s in-house counsel), expended or incurredby the holder in connection with the enforcement of the holder’s rights and/orthe collection of any amounts which become due to the holder under this Note,and the prosecution or defense of any action in any way related to this Note,including without limitation, any action for declaratory relief, whetherincurred at the trial or appellate level, in an arbitration proceeding orotherwise, and including any of the foregoing incurred in connection with anybankruptcy proceeding (including without limitation, any adversary proceeding,contested matter or motion brought by Bank or any other person) relating toBorrower or any other person or entity.

6.2           ObligationsJoint and Several.  Should more thanone person or entity sign this Note as a Borrower, the obligations of each suchBorrower shall be joint and several.

6.3           GoverningLaw.  This Note shall be governed byand construed in accordance with the laws of the State of California.

IN WITNESSWHEREOF, the undersigned has executed this Note as of the date first writtenabove.
| SYMMETRICOM, INC. |                                    |
|-------------------|-----------------------------------------|
|              |
| By:               | /s/ William Slater                      |   |
|              | William Slater, Chief Financial Officer |
|                   |                                         |  |  |

 

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