Document:

Exhibit
10.22

 

Private and Confidential

 

 

October 5, 2001

 

Jeff Zellmer

 

 

Dear Jeff,

 

This letter agreement
amends and restates our agreement regarding your forgiveable loan in its
entirety as set forth below:

 

SGI also will make you a
$500,000 forgiveable loan.  The loan
will be funded in July 2001, within five days of signature of this letter, and
will be forgiven over a two year period at the rate of $62,500 at the end of
each three month period starting with the three months ended October 31, 2001,
provided you are actively employed by SGI 
at those dates. You will be responsible for any taxation that results
from  the forgiveness of the principal
amount of the loan.  Should you
voluntarily terminate your employment prior to the loan being fully forgiven,
you agree to repay SGI within 30 days, on a pro-rated basis, the portion of the
loan that has not been forgiven. This loan will also be forgiven in full if you
die or your employment with SGI is terminated due to your becoming physically
or mentally disabled.   The unpaid
principal amount of the loan shall not bear interest.  To the extent you are subject to income tax as a result of the
interest-free nature of the loan, SGI will pay you an amount (the “Gross Up
Amount”) such that after payment by you of all federal, state and local taxes
(including any interest or penalties imposed with respect to such taxes) on the
Gross Up Amount will equal the amount of income tax attributable to the imputed
interest in accordance with Section 7872 of the Internal Revenue Code of 1986,
as amended, and any relevant state or local taxes.

 

SGI will require any
successor or assignee, in connection with any sale, transfer or other
disposition of all or substantially all of SGI’s assets or business, whether by
purchase, merger, consolidation or otherwise, expressly to assume and agree to
perform SGI’s obligation with respect to the forgiveable loan in the same
manner and to the same extent that SGI would be 

 

 

required to perform if no
such succession or assignment had taken place. 
The loan will be forgiven in full if it is not assumed as provided in
this paragraph.

 

The loan will also be
forgiven in full if: (i) a receiver, trustee, liquidator or custodian is
appointed on behalf of SGI or a substantial part of its property, (ii) SGI
makes a general assignment for the benefit of its creditors, (iii) SGI is
dissolved or liquidated in full or in part, or (iv) a case or other proceeding
seeking liquidation, reorganization or other relief with respect to SGI or its
debts is commenced under any bankruptcy, insolvency or other similar law now or
hereafter in effect; provided that in connection with a voluntary or
involuntary SGI Chapter 11 Case, the loan will be forgiven in full if (x) you
resign not less than 6 months following the commencement of such Chapter 11
Case and not more than 6 months after a plan of reorganization is confirmed by
the Bankruptcy Court or (y) SGI or any designated responsible person or entity
acting on behalf of SGI or its assets terminates your employment for any reason
other than Cause (defined below).

 

“Cause” means that you
are terminated for one of the following reasons: (i) willfully refusing or
failing to carry out specific directions of the Board of Directors or the Chief
Executive Officer of SGI; (ii) for acting fraudulently or with willful
dishonesty in your relations with SGI; (iii) for committing larceny,
embezzlement, conversion or any act involving the misappropriation of funds
from SGI in the course of your employment; (iv) for having been convicted of a
crime involving an act of moral turpitude, fraud or misrepresentation; or (v)
for willfully engaging in misconduct which materially injured the reputation,
business or business relationship of SGI. 
No act, or failure to act, by you will be considered “willful” if done,
or omitted to be done, by you in good faith and in your reasonable belief that
your act or omission was in the best interests of SGI or required by applicable
law.

 

In the event of any
dispute, claim, question, or disagreement arising out of or relating to the
loan, we agree to first use our best efforts to settle such matters in an
amicable manner.  Initially, we will
consult and negotiate with each other, in good faith and, recognizing our
mutual interests, attempt to reach a just and equitable solution satisfactory
to both of us.  If we do not reach a
resolution within sixty days, either of us may notify the other in writing that
the unresolved dispute, claim or differences are being submitted to
confidential mediation in 

 

 

Santa Clara County, CA by
a mutually agreed upon mediator.  Either
one of us may apply to any court having jurisdiction over this agreement to
seek injunctive relief to maintain the status quo until the mediation is
concluded or the controversy is otherwise resolved.  Each of us will each bear its own costs and expenses and an equal
share of the mediators’ and any similar administrative fees.

 

If any dispute is finally
determined in your favor through a judicial proceeding, SGI will reimburse all
reasonable fees and expenses, including attorneys’ and consultants’ fees, that
you incur in good faith in connection therewith.  If the dispute involves an amount to be paid, SGI will reimburse
such fees to the extent you received half or more of the amount in dispute.

 

This letter agreement
will be governed by and construed in accordance with the laws of the State of
California applicable to agreements made and to be performed entirely within
such state.

 

Sincerely,

 

 

/s/  BOB BISHOP

 

Bob Bishop

Chief Executive Officer

 

 

Accepted:

 

 

 

 

	
   

  	
  /s/  JEFF
  ZELLMER

  	
   

  	
   

  
	
   

  	
  Jeff Zellmer

  	
   

  	
  Today’s Date

  

 

 

Please return signed
letter to Larry HicksExhibit
10.23

 

Private and Confidential

 

 

October 5, 2001

 

Sandra Escher

 

 

Dear Sandra,

 

SGI will provide you with
a $280,000 forgiveable loan.  The loan
will be funded in October 2001, within five business days of signature of this
letter, and will be forgiven over a two year period at the rate of $35,000 at
the end of each three month period starting with the three months ended
December 31, 2001, provided you are actively employed by SGI   at those dates. You will be responsible for
any taxation that results from  the
forgiveness of the principal amount of the loan.  Should you voluntarily terminate your employment prior to the
loan being fully forgiven, you agree to repay SGI within 30 days, on a
pro-rated basis, the portion of the loan that has not been forgiven. This loan
will also be forgiven in full if you die or your employment with  SGI is terminated due to your becoming
physically or mentally disabled.  The
unpaid principal amount of the loan shall not bear interest.  To the extent you are subject to income tax
as a result of the interest-free nature of the loan, SGI will pay you an amount
(the “Gross Up Amount”) such that after payment by you of all federal, state
and local taxes (including any interest or penalties imposed with respect to
such taxes) on the Gross Up Amount will equal the amount of income tax
attributable to the imputed interest in accordance with Section 7872 of the
Internal Revenue Code of 1986, as amended, and any relevant state or local
taxes.  SGI will require any successor
or assignee, in connection with any sale, transfer or other disposition of all
or substantially all of SGI’s assets or business, whether by purchase, merger,
consolidation or otherwise, expressly to assume and agree to perform SGI’s
obligation with respect to the forgiveable loan in the same manner and to the
same extent that SGI would be required to perform if no such succession or
assignment had taken place.  The loan
will be forgiven in full if it is not assumed as provided in this paragraph.

 

 

 

The loan will also be
forgiven in full if: (i) a receiver, trustee, liquidator or custodian is
appointed on behalf of SGI or a substantial part of its property, (ii) SGI
makes a general assignment for the benefit of its creditors, (iii) SGI is
dissolved or liquidated in full or in part, or (iv) a case or other proceeding
seeking liquidation, reorganization or other relief with respect to SGI or its
debts is commenced under any bankruptcy, insolvency or other similar law now or
hereafter in effect; provided that in connection with a voluntary or
involuntary SGI Chapter 11 Case, the loan will be forgiven in full if (x) you
resign not less than 6 months following the commencement of such Chapter 11
Case and not more than 6 months after a plan of reorganization is confirmed by
the Bankruptcy Court or (y) SGI or any designated responsible person or entity
acting on behalf of SGI or its assets terminates your employment for any reason
other than Cause (defined below).

 

“Cause” means that you
are terminated for one of the following reasons: (i) willfully refusing or
failing to carry out specific directions of the Board of Directors or the Chief
Executive Officer of SGI; (ii) for acting fraudulently or with willful
dishonesty in your relations with SGI; (iii) for committing larceny,
embezzlement, conversion or any act involving the misappropriation of funds
from SGI in the course of your employment; (iv) for having been convicted of a
crime involving an act of moral turpitude, fraud or misrepresentation; or (v)
for willfully engaging in misconduct which materially injured the reputation,
business or business relationship of SGI. 
No act, or failure to act, by you will be considered “willful” if done,
or omitted to be done, by you in good faith and in your reasonable belief that your
act or omission was in the best interests of SGI or required by applicable law.

 

In the event of any
dispute, claim, question, or disagreement arising out of or relating to the
loan, we agree to first use our best efforts to settle such matters in an amicable
manner.  Initially, we will consult and
negotiate with each other, in good faith and, recognizing our mutual interests,
attempt to reach a just and equitable solution satisfactory to both of us.  If we do not reach a resolution within sixty
days, either of us may notify the other in writing that the unresolved dispute,
claim or differences are being submitted to confidential mediation in Santa
Clara County, CA by a mutually agreed upon mediator.  Either one of us may apply to any court having jurisdiction over
this agreement to seek injunctive relief to maintain the status quo until the
mediation is concluded or the controversy 

 

 

is otherwise
resolved.  Each of us will each bear its
own costs and expenses and an equal share of the mediators’ and any similar
administrative fees.

 

If any dispute is finally
determined in your favor through a judicial proceeding, SGI will reimburse all
reasonable fees and expenses, including attorneys’ and consultants’ fees, that
you incur in good faith in connection therewith.  If the dispute involves an amount to be paid, SGI will reimburse
such fees to the extent you received half or more of the amount in dispute.

 

This letter agreement
will be governed by and construed in accordance with the laws of the State of California
applicable to agreements made and to be performed entirely within such state.

 

Sincerely,

 

 

/s/  BOB BISHOP

 

Bob Bishop

Chief Executive Officer

 

 

Accepted:

 

 

 

 

	
   

  	
  /s/  SANDRA
  ESCHER

  	
   

  	
   

  
	
   

  	
  Sandra Escher

  	
   

  	
  Today’s Date

  

 

 

Please return signed
letter to Larry Hicks

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