EXHIBIT
10.19


 


May 10, 2000


 


 


Sanjay Adkar


 


Dear Sanjay:


 


The purpose of this
letter is to set forth the terms upon which NeoMagic Corporation will loan the
sum of $600,000.00 (Six Hundred Thousand Dollars) on July 1, 2000 and the sum
of $600,000.00 (Six Hundred Thousand Dollars) on July 1, 2001 to you and the
terms, conditions, repayment and security with respect to this loan are as
follows:


 


1.               The $600,000.00
loan (the “Loan”) shall be evidenced by a promissory note in the form attached
hereto as Exhibit A (the “Note”), which you shall execute and deliver to
NeoMagic Corporation upon your receipt of the $600,000.00 in loan proceeds
which shall be effective July 1, 2000.


 


2.               The second
$600,000.00 loan (the “Loan”) shall be evidenced by a promissory note in the
form attached hereto as Exhibit B (the “Note”), which you shall execute and
deliver to NeoMagic Corporation upon your receipt of the $600,000.00 in loan
proceeds which shall be effective July 1, 2001.


 


3.               In the event you
should be involuntarily terminated by NeoMagic Corporation for any reason other
than cause prior to July 1, 2004, the balance of the Loan as described in
Exhibit A and any accrued interest shall be forgiven by NeoMagic Corporation as
of the date of termination.


 


4.               In the event you should
be involuntarily terminated by NeoMagic Corporation for any reason other than
misconduct or gross negligence prior to July 1, 2005, the balance of the Loan
as described in Exhibit B and any accrued interest shall be forgiven by
NeoMagic Corporation as of the date of termination.


 


5.               If you shall
voluntarily terminate your employment with NeoMagic Corporation or if your
employment shall be terminated by NeoMagic Corporation for cause prior to July
1, 2005, the remaining balance of the loans as described in Exhibits A and B
including accrued interest shall become due and payable within 30 days of such
termination.


 


 

















 


6.               This letter and the
Notes constitute the entire agreement between NeoMagic Corporation and you as
to the Loan and can only be modified or amended in writing signed by NeoMagic
Corporation and yourself.


 


Please indicate your acceptance of the foregoing
by signing in the spaces indicated below.


 


 


NeoMagic Corp.


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Prakash
  Agarwal, President and CEO

  	
   

  



 


 


 


 


	
  Agreed:

  	
   

  	
   

  
	
   

  	
  Sanjay
  Adkar

  	
   

  



 


 


 


 


 


 

















 


EXHIBIT
A


 


PROMISSORY
NOTE


 


	
  $600,000.00

  	
   

  	
  July
  1, 2000

  



 


FOR VALUE RECEIVED, the undersigned (“Maker”)
promises to pay to the order of NeoMagic Corporation, located at 3250 Jay
Street, Santa Clara, California 95054 or at such other place as the holder of
this Note may from time to time designate, the principal sum of six hundred
thousand dollars ($600,000.00), or so much of that sum as may be advanced under
this Note by any holder; plus interest as computed below.


 


Interest will be compounded annually at a rate of
five and fifty-nine one hundredths percent (5.59%) per annum on the unforgiven
balance.  Should your employment cease
with NeoMagic Corporation prior to the term of this Note and default on payment
within 30 days, the interest rate will change to ten percent (10%) per annum on
the unforgiven balance.


 


Subject to paragraphs 1 and 2 below, interest
only will be due and payable annually on July 1 each year.  On June 30, 2004 the entire amount of unpaid
principal and accrued but unpaid interest will be immediately due and payable.


 


1.               Upon a voluntary
termination of your employment with NeoMagic Corporation or upon a termination
of such employment for misconduct or gross negligence by NeoMagic Corporation,
this Note and all principal then owing and accrued interest hereunder shall
become due and payable within thirty (30) days of the date of such termination.


 


2.               Upon any default
under this Note, the holder may, at its option and without notice, declare
immediately due and payable the entire unpaid principal sum of this Note
together with all accrued interest.


 


3.               Maker agrees to pay
all costs of collection when incurred, and all costs incurred by the holder
hereof in exercising or preserving any rights or remedies in connection with
the enforcement and administration of this Note or following a default by
Maker, including but not limited to reasonable attorney’s fees. If any suit or
action is instituted to enforce this Note, the undersigned Maker promises to
pay, in addition to the costs and disbursements allowed by law, such sum as the
court may adjudge reasonable attorney’s fees in such suit or action.


 


4.               This Note will be
governed by California law, except to the extent federal laws preempt the laws
of the State of California, in which event such federal laws shall govern this
Note, and all persons and entities in any manner obligated under this Note
consent to the jurisdiction of any federal or state court within 


 


 

















 


the
State of California having proper venue and also consent to service of process
by any means authorized by California or federal law.


 


5.               This note,
which is full recourse, is secured by a pledge of 75,000 shares of common stock
of the Company (with a guarantee gain of $8.00 per share as describe in the
offer of employment letter dated May 10, 2000) and is subject to the terms of
this Letter of Agreement dated May 10, 2000 herewith between the Maker and
Neomagic Corporation.


 


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Maker — Sanjay Adkar

  	
   

  



 


 

















 


EXHIBIT
B


 


PROMISSORY
NOTE


 


	
  $600,000.00

  	
   

  	
  July
  1, 2001

  



 


FOR VALUE RECEIVED, the undersigned (“Maker”)
promises to pay to the order of NeoMagic Corporation, located at 3250 Jay
Street, Santa Clara, California 95054 or at such other place as the holder of
this Note may from time to time designate, the principal sum of six hundred
thousand dollars ($600,000.00), or so much of that sum as may be advanced under
this Note by any holder; plus interest as computed below.


 


Interest will be compounded annually at a rate of
five and two one hundredths percent (5.02%) per annum on the unforgiven
balance.  Should your employment cease
with NeoMagic Corporation prior to the term of this Note and default on payment
within 30 days, the interest rate will change to ten percent (10%) per annum on
the unforgiven balance.


 


Subject to paragraphs 1 and 2 below, interest
only will be due and payable annually on July 1 each year.  On June 30, 2005 the entire amount of unpaid
principal and accrued but unpaid interest will be immediately due and payable.


 


1.               Upon a voluntary
termination of your employment with NeoMagic Corporation or upon a termination
of such employment for misconduct or gross negligence by NeoMagic Corporation,
this Note and all principal then owing and accrued interest hereunder shall
become due and payable within thirty (30) days of the date of such termination.


 


2.               Upon any default
under this Note, the holder may, at its option and without notice, declare
immediately due and payable the entire unpaid principal sum of this Note
together with all accrued interest.


 


3.               Maker agrees to pay
all costs of collection when incurred, and all costs incurred by the holder
hereof in exercising or preserving any rights or remedies in connection with
the enforcement and administration of this Note or following a default by
Maker, including but not limited to reasonable attorney’s fees. If any suit or
action is instituted to enforce this Note, the undersigned Maker promises to
pay, in addition to the costs and disbursements allowed by law, such sum as the
court may adjudge reasonable attorney’s fees in such suit or action.


 


4.               This Note will be
governed by California law, except to the extent federal laws preempt the laws
of the State of California, in which event such federal laws shall govern this
Note, and all persons and entities in any manner obligated under this Note
consent to the jurisdiction of any federal or state court within 


 


 

















 


the
State of California having proper venue and also consent to service of process
by any means authorized by California or federal law.


 


5.               This note,
which is full recourse, is secured by a pledge of 75,000 shares of common stock
of the Company (with a guarantee gain of $8.00 per share as describe in the
offer of employment letter dated May 10, 2000) and is subject to the terms of
this Letter of Agreement dated May 10, 2000 herewith between the Maker and
Neomagic Corporation.


 


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Maker — Sanjay Adkar