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EXHIBIT 10.14
SUPPORT AGREEMENT
This Agreement, dated as of July 5th, 1999, is made by Xxxx Xxxxxxx
(the "Officer"), and CHAPARRAL NETWORK STORAGE, INC., formerly known as
Chaparral Technologies, Inc., a Delaware corporation (the "Borrower"), for the
benefit of XXXXX FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the
"Lender").
Recitals
The Lender and Borrower have entered into a Credit and Security
Agreement (together with all amendments, supplements and restatements, the
"Credit Agreement") dated as of July 5, 1999, pursuant to which the Lender has
agreed to make revolving advances and extend other financial accommodations to
or for the benefit of the Borrower.
The Officer is the duly elected, qualified and acting Chairman and
Chief Executive Officer of the Borrower and is fully familiar with all of the
Borrower's business and financial affairs.
To induce the Lender to make advances and extend other financial
accommodations to or for the account of the Borrower under the Credit Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Officer, the Borrower and the Lender agree as
follows:
1. Definitions. Capitalized terms used in this Agreement which are not
defined in this Agreement have the meanings given to them in the Credit
Agreement.
2. Officer to Dispose of Collateral. The Officer and the Borrower agree
that if (i) the Lender comes into possession of any or all of the tangible
Collateral or is collecting the Borrower's Accounts or otherwise disposing of
Collateral because an Event of Default has occurred; and (ii) the Lender has
given notice of an acceleration of all of the Obligations;
(a) if the Officer is still employed by the Borrower, the Borrower
will, upon the Lender's request, cause the Officer so long as he is
employed by the Borrower, to exert his best efforts and devote all of his
regular working hours to obtain sales of the Collateral at the best
commercially obtainable prices and terms and to collect the Accounts at
their full face value to the extent commercially reasonable; and
(b) if the Officer ceases to be employed by the Borrower or has ceased
to be employed by the Borrower, at the Lender's option and upon the
Lender's request, the Officer shall assist the Lender as the Lender's
independent contractor, for a period not to exceed 150 days, for the sole
purpose of disposing of the Collateral and collecting the Accounts, or
assisting the Lender in disposing of the Collateral and collecting the
Accounts. During the period of such employment the Officer shall exert his
best efforts and devote all of his regular working hours to obtain sales of
the Collateral at the best commercially obtainable prices and terms and to
collect the Accounts at their full face value.
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3. Lender's Right to Terminate Officer's Employment. The Lender shall
have the right to terminate the Officer's employment or other assistance
described in Paragraph 2 hereof at any time on 30 days' notice, for any cause or
without cause.
4. Officer's Compensation. The Officer's sole compensation for any
employment or assistance rendered pursuant to Paragraph 2(b) hereof shall be a
weekly salary paid at 115% of the average salary (on a weekly basis) paid to
such person by the Borrower in the twelve (12) months immediately preceding the
commencement of such employment or activities. Such compensation shall be
prorated for partial weeks of service.
5. Officer Shall Not Bind Lender. In connection with such employment,
the Officer shall not have any authority to bind the Lender, except such
specific authority as the Lender may grant in writing.
6. Lender's Remedies Against Officer, Liquidated Damages. Until
termination pursuant to Paragraph 9, if the Officer fails to comply with the
provisions of Paragraph 2 hereof, unless such failure occurs as a result of
death or mental or physical incapacity, the Officer shall pay the Lender
$50,000, as liquidated damages, but not as a penalty, because of the difficulty
of proving actual damages for the breach of promises of the type contained
herein. Such liquidated damages shall be immediately due and payable upon the
Officer's failure to comply with the provisions of Paragraph 2 above. In
addition, the Officer shall be liable for the Lender's costs and expenses
(including reasonable attorneys' fees and legal expenses) incurred in enforcing
the liquidated damages provision. In any event, however, the Officer shall not
be liable for more than the Lender's actual damages (excluding consequential and
punitive damages), plus the Lender's costs of enforcement of this Agreement.
7. Officer Remains Liable for Fraud and Misrepresentation.
Notwithstanding paragraph 9 hereof, the Officer shall hold the Lender harmless
for any actual loss, cost, expense, claim and damage (including any reasonable
attorney fees but excluding consequential and punitive damages) arising out of
fraud or misrepresentation made by the Borrower or its agents with respect to
the Collateral or the Borrower's financial statements while the Officer is
employed by the Borrower or the Lender. This paragraph 7 shall remain in full
force and effect so long as any Obligations remain outstanding or until
otherwise agreed by an amendment to this Agreement signed by the Lender, the
Borrower and the Officer.
8. Borrower to Find Replacement for Officer. If the Officer dies,
becomes mentally or physically incapacitated, or ceases to be employed by the
Borrower, the Borrower shall obtain a replacement for the Officer and the
Borrower shall use its best efforts to cause such replacement to execute a
support agreement substantially in the form of this Agreement.
9. Termination of Officer's Obligations. This Agreement shall remain in
full force and effect until:
(a) the Credit Agreement is no longer outstanding and all Obligations
have been paid in full; or
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(b) except as set forth in Paragraph 7 hereof, the Officer shall have
ceased to be employed by the Borrower for more than thirty (30) business
days before the occurrence of the events described in clauses (i) and (ii)
of Paragraph 2 hereof, and shall have given notice of such cessation of
employment to the Lender at least thirty (30) business days before the
occurrence of such events.
10. Miscellaneous. The provisions of this Agreement are declared to be
severable. If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Agreement. The Officer and the Borrower
waive notice of the Lender's acceptance hereof.
11. Governing Law; Waiver of Jury Trial. This Agreement shall be
governed by and construed in accordance with the substantive laws (other than
conflict laws) of the State of Minnesota. THE PARTIES WAIVE ANY RIGHT TO TRIAL
BY JURY IN ANY CLAIM, COUNTERCLAIM, ACTION OR PROCEEDING BASED ON OR PERTAINING
TO THIS AGREEMENT.
IN WITNESS WHEREOF, the Officer and the Borrower have executed this
Agreement as of the date first written above.
CHAPARRAL NETWORK STORAGE, INC.
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Its Vice President, Finance
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Accepted:
XXXXX FARGO BUSINESS CREDIT, INC.
By: /s/ Xxx Xxxxxx
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Xxx Xxxxxx, Vice President
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