LOAN AGREEMENT
This Loan Agreement ("Agreement") is entered into as of January 9, 2001 by
and between JNI Corporation, a Delaware corporation (the "Company"), and ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, an individual ("Borrower").
RECITALS
A. Borrower has accepted an offer of employment with the Company.
B. Borrower has found it necessary to request a loan from the Company.
C. To aid Borrower in his employment, the Company and Borrower desire
that the Company shall loan to Borrower the total amount of Five
Hundred Thousand Dollars ($500,000) under the terms and conditions
as set forth below.
NOW, THEREFORE, the Company and Borrower agree as follows:
AGREEMENT
1. The Company agrees to lend to Borrower the amount of Five Hundred
Thousand Dollars ($500,000) (the "Loan").
2. Concurrent with the execution and delivery of this Agreement,
Borrower shall execute and deliver to the Company a promissory note (the "Note')
in the amount of Five Hundred Thousand Dollars ($500,000) in the form attached
hereto as EXHIBIT A.
3. Borrower understands that the Loan provided for herein is not
transferable by Borrower.
4. This Agreement and the exhibits attached hereto constitute the full
and entire understanding and agreement between the parties hereto with regard to
the subject hereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the party against whom enforcement of any such amendment, waiver, discharge or
termination is sought.
5. Borrower understands that this Agreement does not constitute an
employment agreement or a promise by the Company to continue Borrower's
employment.
6. All notices and other communications required or permitted hereunder
shall be in writing and shall be deemed effectively given upon personal delivery
to the party to be notified or five (5) days after deposited with the United
States mail, by registered or certified mail, postage prepaid, addressed to the
address set forth on the signature page hereof, or such other address as either
party may furnish to the other party.
7. Neither party may assign the rights and/or duties under this
Agreement to a third party without the prior written consent of the other party
to this Agreement, PROVIDED, HOWEVER, that in the event that the Company is
merged into another corporation, or substantially all the
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outstanding stock or assets of the Company are sold to another corporation and
the surviving or acquiring corporation agrees in writing to be bound by the
rights and duties of the Company under this Agreement, then the Company may
assign its rights and duties hereunder to such acquiring or surviving
corporation, PROVIDED, FURTHER, that if Borrower is not afforded the same role
in the acquiring company (CEO of the acquiring company) or is required to
relocate or commute a distance of greater than twenty (20) miles, then the
remaining principal of the Note and all accrued interest thereon shall be
forgiven.
8. All exhibits attached hereto are incorporated herein by this
reference.
9. This Agreement shall be governed in all respects by the laws of the
State of California.
10. In case one or more provisions herein shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not effect any other provision of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had not been contained herein.
11. Each party hereto agrees to do such further acts and things and to
execute, acknowledge and deliver or to cause to have executed, acknowledged and
delivered by such other and further instruments and documents as may reasonably
be requested by the other to carry out the purposes and intents of this
Agreement. This Agreement may be executed in counterparts and each counterpart
shall be deemed an original instrument.
12. THIS AGREEMENT, THE NOTE, AND ALL RELATED DOCUMENTATION ARE EXECUTED
VOLUNTARILY AND WITHOUT ANY DURESS OR UNDUE INFLUENCE ON THE PART OR BEHALF OF
THE PARITIES HERETO, WITH THE FULL INTENT OF CREATING THE OBLIGATIONS DESCRIBED
HEREIN AND THEREIN. 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 AGREEMENT, THE NOTE AND ALL RELATED DOCUMENTATION
AND THE OBLIGATIONS THEY CREATE; AND (d) THEY ARE FULLY AWARE OF THE LEGAL AND
BINDING EFFECT OF THIS AGREEMENT, THE NOTE AND THE OTHER DOCUMENTS CONTEMPLATED
BY THIS AGREEMENT.
INITIAL: /s/ NW INITIAL: /s/ GP
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(Borrower) (Company)
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
BORROWER: COMPANY:
JNI Corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Address: Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------- -------------------------------
Title: Chief Financial Officer
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EXHIBIT A
PROMISSORY NOTE
$500,000 JNI Corporation
January 9, 2001
1. For value received, the undersigned, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("Borrower")
promises to pay to JNI Corporation, a Delaware corporation (the "Company"), or
order, with interest, the principal sum of Five Hundred Thousand Dollars
($500,000) (the "Principal"), loaned to Borrower pursuant to that certain Loan
Agreement between Borrower and the Company of even date herewith (the "Loan
Agreement").
2. The Principal shall bear simple interest at the rate of Five
Percent (5%) per annum.
3. Principal and interest shall be due and payable as follows:
A. All unpaid or unforgiven Principle plus all accrued and unpaid
or unforgiven interest thereon shall be due and payable at the
date of voluntary termination or cessation of the employment
of Borrower with the Company, ten (10) days following the date
of the involuntary termination of the employment of Borrower
with the Company, for cause; or
B. $250,000 of the Principal and all accrued interest on the
outstanding Principal balance shall be due and payable at each
anniversary date of this Note (whether or not Borrower is
employed by the Company).
4. In the event that Borrower's employment with the Company is
terminated without cause, then the provisions of paragraph 3 above shall not
apply and the outstanding Principal and accrued interest shall be forgiven.
"Cause" shall mean (i) any act of personal dishonesty taken by Borrower in
connection with the responsibilities as an employee that is intended to result
in substantial personal enrichment of Borrower, (ii) the conviction of a felony,
or (iii) a willful act by Borrower which constitutes gross misconduct injurious
to the Company.
5. Notwithstanding the provisions of paragraph 3, and subject to the
conditions set forth below, on the first and second anniversary dates of the
date of this Note (the "Forgiveness Date"), the Company will forgive an amount
equal to $250,000 of the Principal and all accrued interest on the outstanding
Principal balance. Such forgiveness shall be conditioned upon Borrower being an
employee of the Company as of the relevant Forgiveness Date and has not given
notice of resignation or been given notice of termination for cause. The
Borrower hereby authorizes any withholding from payroll and any other amounts
payable to Borrower by the Company and otherwise agrees to make adequate
provisions for any sums required to satisfy the federal, state and local
withholding obligations of the Company which arise in connection with the
forgiveness of Principal and interest under this Note.
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Any portion of the Principal and all accrued interest which is not
forgiven pursuant to this paragraph or paragraph 4 shall be due and payable as
otherwise set forth in this Note.
6. If an action is instituted for collection of this Note, the
prevailing party is entitled to court costs and reasonable attorney's fees
incurred by the holder thereof.
7. This Note may be amended or modified, and provisions hereof may be
waived, only by the written agreement of Borrower and the Company. No delay or
failure by the Company 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 Company for any period
of time to enforce collection of any amounts due hereunder shall not be deemed
to be waiver of any rights of the Company under contractor under law. The rights
of the Company under this Note are in addition to any other rights and remedies
which the Company may have.
8. This Note may be prepaid without penalty, in whole or in part, at
anytime. All amounts payable hereunder shall be payable in lawful money of the
United States of America.
9. This Note shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State of
California.
10. If any payment under this Note is not paid when due, then the
parties agree that (a) the Company's damages shall be difficult to estimate, (b)
interest shall cease to accrue on the Principal at the rate of Five Percent
(5%) per annum compounded annually and, as liquidated damages on account of
Borrower's default, the unpaid Principal and accrued interest (to the extent
permitted by law) shall bear interest at the default rate of 10% per annum, or
the highest rate allowed by law, whichever is lower, from said due date until
paid, and (c) the parties agree that such liquidated damages are a reasonable
estimate of the damages the Company will incur as a consequence of Borrower's
default.
BORROWER:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
1/9/01
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Date
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