Exhibit 10.23
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT is made as of April 5, 2001 by
XXXXXX X. XXXXXXX, individually ("Pledgor"), in favor of JNI CORPORATION (the
"Company").
RECITALS
A. The Company has agreed to loan to Pledgor the
principal amount of Five Hundred Fifty Thousand Dollars ($550,000), repayment of
which is evidenced by that certain Secured Recourse Promissory Note (the
"Note"), dated of even date herewith.
B. Pledgor is the record and beneficial owner of 110,000
of the outstanding shares of the Common Stock of the Company (the "Stock"), as
more particularly described in EXHIBIT A hereto, together with all proceeds and
substitutions of any thereof, all interest paid thereon, and all other cash and
noncash proceeds of the foregoing (the "Pledged Collateral").
C. The Company has required as a condition of entering
into the Note that Pledgor deliver this Pledge Agreement to secure the
obligations of Pledgor under the Note.
NOW, THEREFORE, Pledgor and the Company agree as follows:
1. PLEDGE OF COLLATERAL. Pledgor hereby pledges to the Company
and grants to the Company a security interest in the Pledged Collateral, as
security for the prompt performance of all of Pledgor's obligations under the
Note (the "Obligations"). Any certificate or certificates for the securities
included in the Pledged Collateral, accompanied by an instrument of assignment
duly executed in blank by Pledgor, have been, or will be immediately upon the
subsequent receipt thereof by Pledgor, delivered by Pledgor to the Company.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Pledgor represents
and warrants to and covenants with the Company that:
a. The Pledged Collateral is owned by Pledgor free and
clear of any security interests, liens, encumbrances, options or other
restrictions created by Pledgor, except for the security interest in favor of
the Company created hereby;
b. Pledgor has full power and authority to create a
first lien on the Pledged Collateral in favor of the Company and no disability
or contractual obligation exists that would prohibit Pledgor from pledging the
Pledged Collateral pursuant to this Agreement, and Pledgor will not assign,
create or permit to exist any other claim to, lien or encumbrance upon, or
security interest in any of the Pledged Collateral; and
c. The Pledged Collateral is not the subject of any
present or threatened suit, action, arbitration, administrative or other
proceeding, and Pledgor knows of no reasonable grounds for the institution of
any such proceedings.
3. EVENTS OF DEFAULT. Each of the following shall constitute an
event of default ("Event of Default") hereunder:
a. The occurrence of an Event of Default under the Note;
or
b. The breach of any provision of this Agreement by
Pledgor or the failure by Pledgor to observe or perform any of the provisions of
this Agreement.
4. THE COMPANY'S REMEDIES UPON DEFAULT. Upon the occurrence of an
Event of Default, the Company shall have the right to exercise all such rights
as a secured party under the California Uniform Commercial Code as it, in its
sole judgment, shall deem necessary or appropriate, including the right to
liquidate the Pledged Collateral and apply the proceeds thereof to reduce the
principal amount outstanding under the Note. After the disposal of any of the
Pledged Collateral, the Company may deduct all reasonable legal and other
expenses and attorney's fees for protecting its interest and enforcing its
remedies under the Note and this Agreement and shall apply the residue of the
proceeds to, or hold as a reserve against, the Obligations in such manner as the
Company in its reasonable discretion shall determine, and shall pay the balance,
if any to Pledgor.
5. NOTICES. Unless otherwise provided in this Agreement, all
notices or demands by any party relating to this Agreement or any other
agreement entered into in connection herewith shall be in writing and shall be
personally delivered or sent by certified mail, postage prepaid, return receipt
requested, or by prepaid telefacsimile to Pledgor or to the Company, as the case
may be.
If to Pledgor: Xxxxxx X. Xxxxxxx
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FAX:
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If to the Company: JNI Corporation
00000 Xxxxx Xxxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxx
FAX: (000) 000-0000
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
6. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without regard to
principles of conflicts of law. Each of Pledgor and the Company hereby submits
to the exclusive jurisdiction of the state and Federal courts located in the
County of San Diego, State of California. PLEDGOR AND THE COMPANY EACH HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
7. GENERAL PROVISIONS.
a. SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of the respective successors and permitted assigns of each
of the parties; PROVIDED, HOWEVER, that neither this Agreement nor any rights
hereunder may be assigned by Pledgor without the Company's prior written
consent, which consent may be granted or withheld in the Company's sole
discretion. The Company shall have the right without the consent of or notice to
Pledgor to sell, transfer, negotiate, or grant participation in all or any part
of, or any interest in, the Company's obligations, rights and benefits
hereunder.
b. TIME OF ESSENCE. Time is of the essence for the
performance of all obligations set forth in this Agreement.
c. SEVERABILITY OF PROVISIONS. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
d. AMENDMENTS IN WRITING, INTEGRATION. This Agreement
cannot be amended or terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with
respect to the subject matter of this Agreement, if any, are merged into this
Agreement.
e. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.
f. SURVIVAL. All covenants, representations and
warranties made in this Agreement shall continue in full force and effect so
long as any Obligations remain outstanding.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
COMPANY:
JNI Corporation
By:
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Title:
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PLEDGOR:
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Xxxxxx X. Xxxxxxx
EXHIBIT A
Pledgor Name Certificate Number Number of Shares/Units
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