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EXHIBIT 10.27
[XXXXX SYSTEMS CORPORATION LETTERHEAD]
August 26, 1996
NationsBank of Texas, N.A. Xxxxxx X. Xxxxxx
Professional & Executive Banking 00000 Xxxxx Xxxxx
0000 Xxx Xxxxxx, 0xx Xxxxx Xxxxxx, Xxxxx 00000
P.O. Box 831101
Dallas, TX 75283-1101
Attn: Xx. Xxxxxx Xxxxxx
Re: NationsBank Financing
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 Xxxxxx X. Xxxxxx ("Associate") with respect to the loan from
NationsBank.
2. Each of the parties recognizes that Associate is obtaining funding from
NationsBank in the original principal amount of $350,000.00 (the "NB
Principal") pursuant to a promissory note, dated as of August 26, 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"). Each of the parties
recognizes that PSC is not loaning Associate any funds.
3. Each of the parties hereby agrees that if PSC repurchases any Shares
from Associate pursuant to the Stock Agreement, that 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.
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NationsBank of Texas, N.A.
July 12, 1996
Page 2
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 in the same manner as provided in the
third paragraph of this letter until principal and interest under the
Note 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 NationsBank collateral maintenance agreement
that will control the continuing need for shares pledged as collateral
and any adjustments thereto.
7. The parties agree that Associate will execute the NB Security 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 the NB
Security Agreement to the contrary, the parties agree that NationsBank
will have a security interest in the Shares and whichever of PSC or
NationsBank holds such Shares shall hold the Shares for the benefit of
NationsBank.
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NationsBank of Texas, N.A.
July 12, 1996
Page 3
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.
If the terms of this letter are acceptable to you, please execute your
consent below.
Very truly yours,
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Title:
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AGREED: AGREED:
NATIONSBANK OF TEXAS, N.A. ASSOCIATE
By: /s/ XXXXXX X. XXXXXX
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Name: Name: Xxxxxx X. Xxxxxx
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Title:
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Date: Date:
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