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EXHIBIT 10.9
STOCK PUT AGREEMENT
THIS STOCK PUT AGREEMENT (this "Agreement") is made as of the 30th day
of September, 1996 (the "Effective Date"), by and between Exsorbet Industries,
Inc., an Idaho corporation ("Exsorbet") and American Physicians Service Group,
Inc., a Texas corporation ("APS").
RECITALS:
WHEREAS, APS has purchased 1,200,000 shares of the common stock of
Exsorbet; and
WHEREAS, Exsorbet desires to allow APS to cause Exsorbet, at APS' option
for a period of sixty (60) days, to purchase APS' holdings of Exsorbet stock;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. Shares Subject to this Agreement. The shares subject to this
Agreement are up to 1,200,000 shares of the outstanding common stock of
Exsorbet held by APS, including any increases, decreases or substitutions
therefor which occur after the date hereof as a result of any change (through
recapitalization, merger, consolidation, stock dividend, stock split,
combination,
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reverse stock split or exchange of shares or otherwise) in the character or
amount of such shares prior to the exercise by APS of its rights hereunder.
2. Option to Sell. Exsorbet irrevocably and unconditionally grants
to APS the right, privilege and option to sell to Exsorbet and Exsorbet hereby
irrevocably and unconditionally agrees to purchase, the Shares, for the price
and on the terms provided herein. This option can be exercised by APS notifying
Exsorbet in writing of the intent to exercise the option, in which case
Exsorbet will have ten (10) days to complete the purchase as required herein.
In the event the parties cannot agree on a time and place for a closing of the
purchase, the closing will occur at the offices of APS in Austin, Texas, at
1:00 p.m. Austin time on the tenth day after APS has given notice of exercise
to Exsorbet.
3. Purchase Price and Payment. The total purchase price to be paid
by Exsorbet for all the Shares is $3,300,000, or $2.75 per share for purchase
of a portion of the Shares. The total purchase price shall be paid at closing
in cash or certified funds or by execution and delivery by Exsorbet of a
promissory note (the "Note") payable to the order of APS in the original
principal amount of the purchase price in the form of Exhibit-A hereto. In the
event Exsorbet elects to pay for the Shares by execution and delivery of the
Note, APS shall be entitled to retain a first-lien, perfected security interest
in and to the Shares (in addition to whatever other collateral may be used to
secure Exsorbet's obligations hereunder as contemplated in Section 5 below) and
APS shall be entitled to retain possession of the certificates evidencing the
Shares to perfect such security interest. In the event the purchase price is
paid in cash or certified funds, or upon payment in full of the Note and
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all interest due thereon, APS shall deliver to Exsorbet all certificates
representing the Shares sold, duly endorsed to Exsorbet.
4. Assignment. This option and the rights granted under this
Agreement may be transferred or assigned by APS to any affiliate or subsidiary
of APS. Otherwise, the rights and obligations of the parties under this
Agreement may not be assigned or transferred without the express prior written
consent of the other party.
5. Obligations of Exsorbet Secured. The obligations of Exsorbet
under and pursuant to this Agreement shall be secured by that certain
Assignment and Security Agreement of even date herewith pursuant to which
Exsorbet grants a security interest in certain collateral to APS to secure
Exsorbet's obligations under this Agreement. In addition, the obligations of
Exsorbet under and pursuant to this Agreement are further guaranteed by the
payment and performance guarantees of each of Exsorbet's subsidiaries.
6. Insufficient Surplus. In connection with the purchase of any
Shares by Exsorbet pursuant to this Agreement, if the surplus of Exsorbet shall
prove to be insufficient under then existing laws to allow Exsorbet to purchase
all the Shares which APS then elects to sell to Exsorbet, Exsorbet shall,
within sixty (60) days of receipt of APS's written notice of intent to exercise
their option to sell Shares hereunder, take such action, execute such
instruments, and otherwise do whatever may be necessary to increase its surplus
to an amount sufficient to authorize the purchase of such Shares, including but
not limited to, one or more of the following:
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(a) a recapitalization of Exsorbet so as to reduce its capital
and increase its surplus;
(b) a reappraisal of the assets of Exsorbet including
goodwill, if any, to reflect the market value of such
assets on the books of Exsorbet in the event such value
exceeds the book value thereof, so as to increase such
surplus; or
(c) any and all other means or procedures as permitted by law.
7. Notices. All notices required to be given hereunder shall be
deemed to be duly given by personally delivering such notice or by mailing it
certified mail to all parties hereto at the following address:
Exsorbet: Exsorbet Industries, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Xx.
APS: American Physicians Service Group, Inc.
0000 Xxxxxxx xx Xxxxx Xxxxxxx, Xxxxx X-000
Xxxxxx, Xxxxx 00000-0000
Attn: President
The foregoing addresses may be changed by providing written notice of
such change of address by certified mail to the other parties to this
Agreement.
8. Exercise of Option. This option shall be exercisable at any time
or times until sixty (60) days after the Effective Date. Upon expiration of
this time period, if APS has not exercised
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its rights hereunder, Exsorbet shall pay APS $60,000 within five (5) days after
the expiration of such sixty (60) day period.
9. Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, and their respective successors and
permitted assigns. Exsorbet may not assign this Agreement or any of its rights
or obligations hereunder without the prior express written consent of APS.
10. Governing Law. This Agreement shall be interpreted under the
laws of the State of Texas, and all obligations created hereunder are
performable in Xxxxxx County, Texas.
11. Further Assurances. All parties hereto agree to perform any
further acts and to execute and deliver any further documents which may be
reasonably necessary or convenient to carry out the provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement in
multiple counterparts in Austin, Texas on the day and year first above written.
EXSORBET: EXSORBET INDUSTRIES, INC.
By: /s/ Xxxxx Xxxxxxx
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Printed Name: Xxxxx Xxxxxxx
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Title: Executive Vice President
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APS: AMERICAN PHYSICIANS SERVICE
GROUP, INC.
By: /s/ Xxxxx X. Xxxx, Xx.
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Printed Name: Xxxxx X. Xxxx, Xx.
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Title: President
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XXXXXXXXXX XXXX
Xxxxxx, Xxxxx _______________________, 1996
FOR VALUE RECEIVED, the undersigned, EXSORBET INDUSTRIES, INC., an Idaho
corporation, ("Maker") promises to pay to the order of AMERICAN PHYSICIANS
SERVICE GROUP, INC., a Texas corporation ("Payee"), at 0000 Xxxxxxx xx Xxxxx
Xxx., Xxxxx X-000, Xxxxxx, Xxxxx, 00000 ("Payee's Address"), the principal
amount of Three Million Three Hundred Thousand and 00/100 Dollars
($3,300,000.00) (the "Principal Amount"), or such less amount as may be
outstanding from time to time, together with interest on the unpaid balance of
such amount as provided herein, in lawful money of the United States of
America, in accordance with all the terms, conditions, and covenants of this
Note and the Transaction Documents identified below.
1. PAYMENT. The principal balance of this Note and all accrued and
unpaid interest is payable on or before October 1, 1997 (the "Maturity Date").
2. TRANSACTION DOCUMENTS AND COLLATERAL. This Note is executed and
delivered by Maker pursuant to the terms of the Stock Put Agreement dated
September 30, 1996, executed by and between among Maker and Payee (the "Stock
Put Agreement"), and this Note evidences Maker's indebtedness owing by Maker to
Payee under the terms of such Stock Put Agreement. This Note is secured by,
inter alia, the following: the Assignment and Security Agreement dated
September 30, 1996, executed by Maker as debtor and Payee as Secured Party (the
"Assignment"). This Note, the Stock Put Agreement, the Assignment, and all
other documents evidencing, securing, governing, guaranteeing, and/or
pertaining to this Note, including but not limited to those documents described
above, are sometimes collectively referred to as the "Transaction Documents".
Payee and any subsequent owner or holder of this Note is entitled to the
benefits and security provided in the Transaction Documents.
3. INTEREST PROVISIONS.
(a) Rate. The principal balance of this Note from time to
time remaining unpaid prior to maturity shall bear interest at a fixed rate per
annum equal to fifteen and 75/100 percent (15.75%) (the "Note Rate"), but never
greater than the "Maximum Lawful Rate", as that term is defined in this Note.
(b) Maximum Lawful Interest. The term "Maximum Lawful Rate"
means the maximum rate of interest, and the term "Maximum Lawful Amount" means
the maximum amount of interest that are permissible under applicable state or
federal law for the type of loan evidenced by this Note and the other
Transaction Documents. If Article 1.04 of the Texas Credit Code is applicable
to this Note, and applicable state or federal law does not permit a higher
interest rate, the "Indicated (Weekly) Ceiling" (as defined as Article
1.04(a)(1) of the Texas Credit Code) shall be the Interest Rate Ceiling
applicable to this Note and shall be the basis for determining the Maximum
Lawful Rate in effect from time to time during the term of this Note, unless a
different Interest Rate Ceiling is designated on the first page of this Note.
If applicable state or federal law allows a higher interest rate or federal law
preempts the state law limiting the rate of interest, then the foregoing
Interest Rate Ceiling shall not be applicable to this Note. If the Maximum
Lawful Rate is increased by statute or other governmental action subsequent to
the date of this Note, then the new Maximum Lawful Rate shall be applicable to
this Note from the effective date thereof, unless otherwise prohibited by
applicable law.
EXHIBIT "A"
PROMISSORY NOTE Page 1 of 5 Exsorbet Industries, Inc.
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(c) Spreading of Interest. Because of the possibility of
irregular periodic balances of principal and premature payment, the total
interest that will accrue under this Note cannot be determined in advance.
Payee does not intend to contract for, charge, or receive more than the Maximum
Lawful Rate or Maximum Lawful Amount permitted by applicable state or federal
law, and to prevent such an occurrence Payee and Maker agree that all amounts
of interest, whenever contracted for, charged, or received by Payee, with
respect to the loan of money evidenced by this Note, shall be spread, prorated,
or allocated over the full period of time this Note is unpaid, including the
period of any renewal or extension of this Note. If demand for payment of this
Note is made by Payee prior to the full stated term, the total amount of
interest contracted for, charged, or received to the time of such demand shall
be spread, prorated, or allocated along with any interest thereafter accruing
over the full period of time that this Note thereafter remains unpaid for the
purpose of determining if such interest exceeds the Maximum Lawful Amount.
(d) Excess Interest. At maturity (whether by acceleration or
otherwise) or on earlier final payment of this Note, Payee shall compute the
total amount of interest that has been contracted for, charged, or received by
Payee or payable by Maker under this Note and compare such amount to the
Maximum Lawful Amount that could have been contracted for, charged, or received
by Payee. If such computation reflects that the total amount of interest that
has been contracted for, charged, or received by Payee or payable by Maker
exceeds the Maximum Lawful Amount, then Payee shall apply such excess to the
reduction of the principal balance and not to the payment of interest; or if
such excess interest exceeds the unpaid principal balance, such excess shall be
refunded to Maker. This provision concerning the crediting or refund or excess
interest shall control and take precedence over all other agreements between
Maker and Payee so that under no circumstances shall the total interest
contracted for, charged, or received by Payee exceed the Maximum Lawful Amount.
(e) Interest After Default. At Payee's option, the unpaid
principal balance shall bear interest after maturity (whether by acceleration
or otherwise) at the "Default Interest Rate." The Default Interest Rate shall
be, at Payee's option, (i) the Maximum Lawful Rate, if such Maximum Lawful Rate
is established by applicable law; or (ii) the Note Rate plus five (5)
percentage points, if no Maximum Lawful Rate is established by applicable law;
or (iii) eighteen percent (18%) per annum; or (iv) such lesser rate of interest
as Payee in its sole discretion may choose to charge; but never more than the
Maximum Lawful Rate or at a rate that would cause the total interest contracted
for, charged, or received by Payee to exceed the Maximum Lawful Amount.
(f) Daily Computation of Interest. To the extent permitted by
applicable law, Payee at its option may either (i) calculate the per diem
interest rate or amount based on the actual number of days in the year (365 or
366, as the case may be), and charge that per diem interest rate or amount each
day, or (ii) calculate the per diem interest rate or amount as if each year has
only 360 days, and charge that per diem interest rate or amount each day for
the actual number of days of the year (365 or 366 as the case may be). If this
Note calls for monthly payments, Payee at its option may determine the payment
amount based on the assumption that each year has only 360 days and each month
has 30 days. In no event shall Payee compute the interest in a manner that
would cause Payee to contract for, charge, or receive interest that would
exceed the Maximum Lawful Rate or the Maximum Lawful Amount.
EXHIBIT "A"
PROMISSORY NOTE Page 2 of 5 Exsorbet Industries, Inc.
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4. DEFAULT PROVISIONS.
(a) Events of Default and Acceleration of Maturity. Maker
agrees that an event of default shall exist under this Note and the other
Transaction Documents if: (i) Maker defaults in the payment of any installment
of principal, interest, or any other sum required to be paid under the terms of
this Note or any of the Transaction Documents; or (ii) there is a default in
the performance of any covenant, condition, or agreement contained in this Note
or any of the Transaction Documents, or an event of default or default
otherwise occurs or exists under any of the other Transaction Documents; or
(iii) the bankruptcy or insolvency of, the assignment for the benefit of
creditors by, or the appointment of a receiver for any of the property of, or
the liquidation, termination, dissolution or death or legal incapacity of, any
party liable for the payment of this Note, whether as maker, endorser,
guarantor, surety or otherwise. Maker agrees that if an event of default
occurs, Payee may, without notice or demand, except as otherwise required by
statute or otherwise specifically provided in this Note or any of the other
Transaction Documents, accelerate the maturity of this Note and declare the
entire unpaid principal balance and all accrued interest at once due and
payable, foreclose all liens and security interests securing this Note, and
exercise all other rights and remedies Payee may have under this Note and the
other Transaction Documents, including any one or more of the foregoing
remedies.
(b) WAIVER BY MAKER. MAKER AND ALL OTHER PARTIES LIABLE FOR
THIS NOTE WAIVE DEMAND, NOTICE OF INTENT TO DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST, NOTICE OF PROTEST, GRACE, NOTICE OF DISHONOR,
NOTICE OF INTENT TO ACCELERATE MATURITY, NOTICE OF ACCELERATION OF MATURITY,
AND DILIGENCE IN COLLECTION. EACH MAKER, SURETY, ENDORSER, AND GUARANTOR OF
THIS NOTE WAIVES AND AGREES TO ONE OR MORE EXTENSIONS FOR ANY PERIOD OR PERIODS
OF TIME, AND ANY PARTIAL PAYMENTS, BEFORE OR AFTER MATURITY, WITHOUT PREJUDICE
TO THE HOLDER OF THIS NOTE. EACH MAKER, SURETY, ENDORSER, AND GUARANTOR WAIVES
NOTICE OF ANY AND ALL RENEWALS, EXTENSIONS, REARRANGEMENTS, AND MODIFICATIONS
OF THIS NOTE.
(c) Non-Waiver by Payee. Any previous extension of time,
forbearance, failure to pursue some remedy, acceptance of late payments, or
acceptance of partial payment by Payee, before or after maturity, does not
constitute a waiver by Payee of its subsequent right to strictly enforce the
collection of this Note according to its terms.
(d) Remedies. Payee shall not be required to first file suit,
exhaust all remedies, or enforce its rights against any security in order to
enforce payment of this Note. The rights, remedies, and recourses of Payee, as
provided in this Note and in any of the other Transaction Documents, shall be
cumulative and concurrent and may be pursued separately, successively or
together as often as occasion therefore shall arise, at the sole discretion of
Payee.
(e) Joint and Several Liability. Each Maker who signs this
Note, and all of the other parties liable for the payment of this Note, such as
guarantors, endorsers, and sureties, are jointly and severally liable for the
payment of this Note.
(f) Attorney's Fees. If Payee requires the services of an
attorney to enforce the payment of this Note or the performance of the other
Transaction Documents, or if this Note is collected through any lawsuit,
probate, bankruptcy, or other judicial proceeding, Maker agrees to pay Payee an
amount equal to its reasonable attorney's fees and other collection costs.
This provision shall be limited by any applicable statutory restrictions
relating to the collection of attorney's fees.
EXHIBIT "A"
PROMISSORY NOTE Page 3 of 5 Exsorbet Industries, Inc.
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5. MISCELLANEOUS PROVISIONS.
(a) Subsequent Holder. All references to Payee in this Note
shall also refer to any subsequent owner or holder of this Note by transfer,
assignment, endorsement, or otherwise.
(b) Transfer. Maker acknowledges and agrees that Payee may
transfer this Note or partial interests in the Note to one or more transferees
or participants. Maker authorizes Payee to disseminate any information it has
pertaining to the indebtedness evidenced by this Note, including, without
limitation, credit information on Maker and any guarantor of this Note, to any
such transferee or participant or prospective transferee or participant.
(c) Other Parties Liable. All promises, waivers, agreements,
and conditions applicable to Maker shall likewise be applicable to and binding
upon any other parties primarily or secondarily liable for the payment of this
Note, including all guarantors, endorsers, and sureties.
(d) Payment in U.S. Dollars. All payments and prepayments of
principal of or interest on this Note shall be made in lawful money of the
United States of America in immediately available funds, at the address of Bank
indicated above, or such other place as the holder of this Note shall designate
in writing to Maker. The books and records of Bank shall be prima facie
evidence of all outstanding principal of and accrued and unpaid interest on
this Note.
(e) Payment on Business Days. The term "Business Day" shall
mean any day other than a Saturday, Sunday or any other day on which national
banking associations are authorized to be closed. If any payment of principal
of or interest on this Note shall become due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and any
such extension of time shall be included in computing interest in connection
with such payment.
(d) Successors and Assigns. The provisions of this Note shall
be binding upon and for the benefit of the successors, assigns, heirs,
executors, and administrators of Payee and Maker.
(e) No Duty or Special Relationship. Maker acknowledges that
Payee has no duty of good faith to Maker, and Maker acknowledges that no
fiduciary, trust, or other special relationship exists between Payee and Maker.
If Payee and Maker are now engaged in or in the future engage in other business
transactions, such other business transactions are independent of this Note and
the indebtedness evidenced hereby and of the promises and covenants made by
Maker in this Note, and vice versa.
(f) Modifications. Any modifications agreed to by Payee
relating to the release of liability of any of the parties primarily or
secondarily liable for the payment of this Note, or relating to the release,
substitution, or subordination of all or part of the security for this Note,
shall in no way constitute a release of liability with respect to the other
parties or security not covered by such modification.
(g) Entire Agreement. Maker warrants and represents that the
Transaction Documents constitute the entire agreement between Maker and Payee
with respect to the indebtedness evidenced by this Note and agrees that no
modification, amendment, or additional
EXHIBIT "A"
PROMISSORY NOTE Page 4 of 5 Exsorbet Industries, Inc.
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agreement with respect to such indebtedness will be valid and enforceable
unless made in writing signed by both Maker and Payee.
(h) Maker's Address for Notice. All notices required to be
sent by Payee to Maker shall be sent by U.S. Mail, postage prepaid, to Maker's
Address stated next to Maker's signature below, until Payee shall receive
written notification from Maker of a new address for notice.
(i) Payee's Address for Payment. All sums payable by Maker to
Payee shall be paid at Payee's Address stated on the first page of this Note,
or at such other address as Payee shall designate from time to time.
(j) Chapter 15 Not Applicable. It is understood that Chapter
15 of the Texas Credit Code relating to certain revolving credit loan accounts
and tri-party accounts is not applicable to this Note.
(k) APPLICABLE LAW. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE
UNITED STATES OF AMERICA APPLICABLE TO TRANSACTIONS IN TEXAS.
EXECUTED this _________ day of ___________________, 1996.
MAKER:
EXSORBET INDUSTRIES, INC.
(an Idaho corporation)
By:
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Name:
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Title:
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EXHIBIT "A"
PROMISSORY NOTE Page 5 of 5 Exsorbet Industries, Inc.
