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EXHIBIT 10.25
[XXXXX SYSTEMS LETTERHEAD]
June 17, 1996
NationsBank of Texas, N.A. Xx. Xxxxxxxxx X. Xxxxxx
Professional and Executive Banking 0000 XxXxxxxx Xxx.
0000 Xxx Xxxxxx, 0xx Xxxxx Xxxxxx, XX 00000
P.O. Box 831101
Dallas, TX 75283-1101
Attn: Xx. Xxxxxx Xxxxxx
Re: Xxxxx Systems Class A Common Stock Purchase
Dear Madam or Sir:
1. The purpose of this letter is to provide for the agreement among Xxxxx
Systems Corporation ("PSC"), NationsBank of Texas, N.A.
("NationsBank") and Xxxxxxxxx X. Xxxxxx ("Associate") with respect to
the purchase by Associate of one hundred thousand (100,000) shares
(the "Shares") of Xxxxx Systems Class A Common Stock ("Common Stock"),
where some of the payment price for such Shares is being borrowed by
Associate from NationsBank. The Shares are being purchased from PSC
pursuant to the Restricted Stock Agreement, dated as of June 17, 1996,
between PSC and Associate (the "Stock Agreement").
2. Each of the parties recognizes that Associate is obtaining funding
from NationsBank in the original principal amount of $125,000 (the "NB
Principal") pursuant to a promissory note, dated as of June 17, 1996,
by Associate payable to the order of NationsBank (the "NB Promissory
Note"), secured by a security agreement of even date with the NB
Promissory Note (the "NB Security Agreement"). In addition, each of
the parties recognizes that Associate is obtaining funding from PSC
(in the original principal amount of $125,000 (the "PSC Principal")
pursuant to a promissory note, dated as of June 17, 1996, executed by
Associate payable to the order of PSC (the "PSC Promissory Note") and
secured by a pledge agreement of even date with the PSC Promissory
Note (the "PSC Pledge Agreement").
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3. Each of the parties hereby agrees that if PSC repurchases any Shares
from Associate pursuant to the Stock Agreement, that it will
distribute the repurchase price to PSC and to NationsBank pro-rata in
accordance with the relative amounts of the unpaid NB Principal and
the PSC Principal (if any) to apply to any amounts outstanding under
the NB Promissory Note and under the PSC Promissory Note (if any).
When PSC has been paid in full under the PSC Promissory Note (if any)
it will send the entire balance of the repayment directly to
NationsBank regardless of the size of that amount (and even if in
excess of the NationsBank Principal), unless and until it receives a
signed authorization from Associate and NationsBank instructing it to
send any additional funds directly to Associate.
4. If, by the later of June 30, 1998 or the date of the maturity of the
NB Promissory Note, PSC has not completed an initial public offering
(the "IPO") whereby the Common Stock (or any successor security) is
listed on a registered national securities exchange or approved for
quotation in the National Association of Securities Dealers Automated
Quotation System, then PSC will, within thirty days of NationsBank's
written request, purchase the outstanding NB Promissory Note from
NationsBank, for the then outstanding principal (which shall never
exceed the original NB Principal) plus accrued but unpaid interest
thereunder. In connection with such sale, NationsBank will endorse
without recourse the NB Promissory Note to the order of PSC, transfer
to PSC good title to the NB Security Agreement, under which the Shares
shall be pledged, deliver any and all Shares in its possession owned
by Associate, along with any signed stock powers thereto, and which
Shares shall be free and clear of additional liens and encumbrances
created by, through, or under NationsBank other than the NB Security
Agreement, which shall be assigned to PSC.
5. If the Associate sells a portion of the Shares as part of the IPO or
thereafter (with XxxxxxxXxxx's and PSC's consent, if needed), then
Associate agrees to use the sale proceeds (after estimated income tax)
to prepay the NB Promissory Note and the PSC Promissory Note, in the
same manner as provided in the third paragraph of this letter until
principal and interest under both Notes have been paid in full.
6. If the IPO occurs before the maturity of the NB Promissory Note but
the Associate wishes to retain ownership of all Shares of publicly
traded stock, the Associate will agree to collateralize the NB
Promissory Note with such PSC vested Shares or other acceptable
marketable securities that have a market value equal to or exceeding
150% of the loan balance outstanding under the NB Promissory Note, and
NationsBank and the Associate will execute a
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NationsBank collateral maintenance agreement that will control the
continuing need for shares pledged as collateral and any adjustments
thereto. This paragraph will not affect the PSC Promissory Note or the
PSC Pledge Agreement. PSC will give notice to NationsBank from time to
time of the principal outstanding under the PSC Promissory Note.
7. The parties agree that Associate will execute both the NB Security
Agreement and the PSC Pledge Agreement. Associate agrees to execute a
stock power in blank for each certificate evidencing any of the Shares
and to deliver all such certificates with stock powers to PSC or
NationsBank as appropriate (after the IPO, NationsBank will hold the
certificates representing vested Shares to the extent needed under
Paragraph 6). Notwithstanding anything in those agreements to the
contrary, the parties agree that NationsBank and PSC will both have a
security interest in the Shares and whichever of PSC or NationsBank
holds such Shares under the PSC Pledge Agreement or the NB Security
Agreement shall hold the Shares for the benefit of both and PSC and
NationsBank will cooperate with one another to enforce their
respective rights under the NB Security Agreement and the PSC Pledge
Agreement, and will share in any proceeds as set forth herein, until
the amounts due under one of the PSC or NB Promissory Notes have been
paid in full, and thereafter the balance will revert to the holder of
the other Promissory Note until the amounts due under that Promissory
Note have been paid in full except all proceeds received from the sale
by NationsBank or by sale with NationsBank's consent of PSC publicly
held shares subsequent to the IPO shall first be applied to payment of
debt owed under the NB Promissory Note before any amounts shall revert
to or be distributed to PSC. The Associate shall not be deemed to have
violated either the PSC Pledge Agreement or the NB Security Agreement,
or to have breached any representations, warranties or covenants
therein, solely by virtue of signing both Agreements.
By signature below, Associate irrevocably authorizes PSC and
NationsBank to make the payments, as provided in this letter, and agrees to
indemnify and hold PSC and NationsBank harmless against any loss, damage or
claim in connection with making payments as provided above.
For purposes of notice under this letter, the parties' addresses shall
be deemed the addresses as provided above in this letter, unless the other
parties receive written notice, at least 15 days in advance, of a new address.
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If the terms of this letter are acceptable to you, please execute your
consent below.
Very truly yours,
/s/ XXX XXXXXX
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Title: Assistant Secretary
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AGREED: AGREED:
NATIONSBANK OF TEXAS, N.A. ASSOCIATE
By: /s/ XXXXXX XXXXXX /s/ XXXXXXXXX X. XXXXXX
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Name: Xxxxxx Xxxxxx Name: Xxxxxxxxx X. Xxxxxx
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Title: Vice President
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Date: 6/21/96 Date: June 17, 1996
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