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EXHIBIT 10.24
LOAN AGREEMENT
This Loan Agreement (the "Agreement") is entered into as of the 26th day
of June 2000 by and between Gadzoox Networks, Inc., a Delaware corporation (the
"Company"), and Xxxxx X. Xxx, a married man, and Xxxxxxxxx X. Xxx, (jointly and
severably "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 Two Hundred,
Eighty-Five Thousand Dollars ($285,000) 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 Two Hundred,
Eighty-Five Thousand Dollars ($285,000) (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 Two Hundred, Eighty-Five Thousand Dollars ($285,000) 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 within 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.
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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, except in the event that the Company is merged into another
corporation, or substantially all the 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. In the event the that the Company is merged
into another corporation, or substantially all the outstanding stock or assets
of the Company are sold to another corporation and the surviving or acquiring
corporation requests this Agreement and Loan be terminated and any such
obligations under the Agreement and Loan be canceled, the Borrower agrees that
the Company may immediately forgive any amounts due and owing under this
Agreement and Loan.
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 affect 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 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 and Loan and the terms and conditions herein shall be
held by both parties in the strictest confidence and not disclosed to any third
party without first informing the other party as to the reason and timing of
such disclosure.
13. 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 parties hereto, with the full intent of creating the obligations described
herein and therein. The parties acknowledge that 1) they have read such
documentation; 2) 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; 3) they understand that the
terms and consequences of this Agreement, the Note and all related documentation
and the obligations they create; and 4) they are fully aware of the legal and
binding effect of this Agreement, the Note and the other documents contemplated
by this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
BORROWER: COMPANY:
/s/ XXXXX X. XXX /s/ XXXXXXXXX X. XXXXXX
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Xxxxx X. Xxx Xxxxxxxxx X. Xxxxxx
Address: 000 Xxxxxxx Xxx. Chief Financial Officer
---------------------------- Gadzoox Networks, Inc.
Xxx Xxxxx, XX 00000 0000 Xxxxxxx Xxxxxx
---------------------------- Xxx Xxxx, XX 00000
Phone: 000-000-0000 (000) 000-0000
----------------------------
BORROWER:
/s/ XXXXXXXXX X. XXX
--------------------------------------
Xxxxxxxxx X. Xxx
Address: 000 Xxxxxxx Xxx.
----------------------------
Xxx Xxxxx, XX 00000
----------------------------
Phone: 000-000-0000
----------------------------
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EXHIBIT A TO LOAN AGREEMENT
PROMISSORY NOTE
$285,000 San Jose, California
June 26, 2000
1. For value received, the undersigned, Xxxxx X. Xxx and Xxxxxxxxx X.
Xxx (jointly and severably, "Borrower") promise to pay Gadzoox Networks, Inc., a
Delaware corporation (the "Company"), or order, with interest, the principal sum
of Two Hundred, Eighty-Five Thousand Dollars ($285,000) (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 Six Percent
(6%) per annum.
3. Principal and interest shall be due and payable as follows:
A. All unpaid or unforgiven Principal 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, or ten
(10) days following the date of involuntary termination of the employment of
Borrower with the Company, for cause; or
B. Seventeen Thousand, Eight Hundred Twelve Dollars and Fifty
Cents ($17,812.50) of the Principal and all accrued interest on the outstanding
Principal balance shall be due and payable at the later of each quarterly
anniversary date of this Note (whether or not Borrower is employed by the
Company) or the extended quarterly anniversary date as specified in 5(B) below.
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 1) any act of personal dishonesty taken by the Employee in
connection with his responsibilities as an employee that constitutes material
injury to the Company or that is intended to result in substantial personal
enrichment of the Employee, 2) the conviction of a felon, or 3) a willful act by
the Employee 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 quarterly anniversary dates of the date of
this Note (June __, 2000) ("Forgiveness Date"), the Company will forgive an
amount equal to Seventeen Thousand, Eight Hundred Twelve Dollars and Fifty Cents
($17,812.50) of the Principal and all accrued interest on the outstanding
Principal balance. Such forgiveness shall be conditioned on the following:
A. That the Borrower is 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, or;
B. That the Borrower is not on Leave of Absence ("LOA") on the
relevant Forgiveness Date and has not been on LOA during the three (3) month
period immediately prior to
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the relevant Forgiveness Date, provided however that if the Borrower is or has
been on LOA, the Forgiveness Date and all subsequent Forgiveness Dates shall be
extended by a number of days equal to the period of the LOA.
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 be reimbursed for 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 thereunder 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 thee 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 a waiver of any rights of the Company under contract or 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
any time. 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 1) the Company's damages shall be difficult to estimate, 2)
interest shall cease to accrue on the Principal at the rate of Six Percent (6%)
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 Twelve Percent
(12%) per annum, or the highest rate allowed by law, whichever is higher, from
said due date until paid, and 3) 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: BORROWER:
/s/ XXXXX X. XXX /s/ XXXXXXXXX X. XXX
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Xxxxx X. Xxx Xxxxxxxxx X. Xxx
6/25/00 6-25-00
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Date Date
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