Exhibit 10.25
Acknowledgment of Debt Dated December 1, 1999 Between
▇▇▇▇▇▇▇.▇▇▇, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇, United Capital Investment
Group, Inc., and Alamo Commercial Group, Inc.
Exhibit 10.25
ACKNOWLEDGMENT OF DEBT
THIS AGREEMENT is made this 1st day of December, 1999, by and between
▇▇▇▇▇▇▇.▇▇▇, INC., a Texas corporation (the "the Company"), ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
("▇▇▇▇▇▇"), UNITED CAPITAL INVESTMENT GROUP, INC., a Texas corporation
("United"), and ALAMO COMMERCIAL GROUP, INC., a Texas corporation ("Alamo").
WHEREAS, the Company is currently indebted to ▇▇▇▇▇▇, United and Alamo and
the parties desire to acknowledge the debt and the terms and conditions
surrounding the debt and the repayment thereof;
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. Debt. As of September 30, 1999, the Company was indebted to ▇▇▇▇▇▇,
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United and Alamo, collectively, in the amount of $248,847. Since that date, the
Company has been advanced additional funds by ▇▇▇▇▇▇, United and Alamo which,
although not calculated at this time, constitute part of the total indebtedness
(the "Debt") owed to ▇▇▇▇▇▇, United and Alamo by the Company.
2. Repayment. Although the Company intends to repay the Debt, ▇▇▇▇▇▇,
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United and/or Alamo may convert the unpaid balance of the Debt attributable to
▇▇▇▇▇▇, United and/or Alamo, individually, as provided in this Agreement.
3. Conversion. At any time ▇▇▇▇▇▇, United and/or Alamo may convert the
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unpaid balance of the Debt attributable to ▇▇▇▇▇▇, United and/or Alamo,
individually, into shares of preferred stock, par value $1.00 per share (the
"Preferred Stock") of the Company. Any portion of the Debt so converted into
shares of the Preferred Stock shall be converted at the rate of one share of the
Preferred Stock for every $1.00 of the principal amount of the Debt then
remaining unpaid. For convenience, the conversion of all or a portion, as the
case may be, of the unpaid balance of the Debt into the Preferred Stock is
hereinafter sometimes referred to as the conversion of the Debt. In the event
that the Debt is converted in part only, upon such conversion, the Company shall
execute and deliver to ▇▇▇▇▇▇, United and/or Alamo, as applicable, without
service charge, a new agreement acknowledging the remaining unpaid balance of
the Debt applicable to such party.
Further, at any time after a party converts the Debt into shares of the
Preferred Stock, such party may convert the shares of the Preferred Stock into
shares of the common stock of the Company, par value $0.001 per share (the
"Common Stock"). Any portion of the Preferred Stock so converted into shares of
the Common Stock shall be converted at the rate of one share of the Common Stock
for every 3.30 shares of Preferred Stock. For convenience, the conversion of all
or a portion, as the case may be, of the Preferred Stock into the Common Stock
is also hereinafter sometimes referred to as a conversion.
4. Delivery of Certificates. As promptly after a conversion as possible,
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the Company shall deliver a certificate or certificates representing the number
of fully paid and nonassessable shares of the Preferred Stock or Common Stock,
as applicable, into which the Debt or Preferred Stock, as applicable, (or
portion thereto) may be converted in accordance with the provisions of this
Agreement. Subject to the following provisions of this Agreement, such
conversion shall be deemed to have been made immediately prior to the close of
business on the conversion, accompanied by written notice, so that the rights of
▇▇▇▇▇▇, United and/or Alamo, as applicable, shall cease with respect to the Debt
(or the portion thereof being converted) at such time, and the person or persons
entitled to receive the shares of the Preferred Stock or Common Stock, as
applicable, upon conversion shall be treated for all purposes as having become
the record holder or holders of such shares at such time. Provided, however,
that no such conversion on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the shares of the Preferred Stock or Common Stock, as applicable,
upon such conversion as the record holder or holders of such shares of the
Preferred Stock or Common Stock, as applicable, on such date, but such surrender
shall be effective to constitute the person or persons entitled to receive such
shares of the Preferred Stock or Common Stock, as applicable, as the record
holder or holders thereof for all purposes immediately prior to the close of the
business on the next succeeding day on which such stock transfer books are open.
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5. Interest. No payment or adjustment in respect of interest accrued on
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the Debt or in respect of dividends on the Preferred Stock or Common Stock, as
applicable, shall be made upon the conversion of the Debt.
6. Fractional Shares. No fractional shares or scrip representing
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fractional shares shall be issued upon the conversion of the Debt or Preferred
Stock. If the conversion of the Debt or Preferred Stock results in a fraction,
an amount equal to such fraction multiplied by the conversion price of the
Preferred Stock or Common Stock, as applicable, shall be paid to ▇▇▇▇▇▇, United
or Alamo, as applicable, in cash by the Company.
7. Adjustments. In case of any reclassification or change of outstanding
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shares of the Preferred Stock or Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger in which the Company is the continuing corporation and which does not
result in any reclassification or change of outstanding shares of the Preferred
Stock or Common Stock, or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, ▇▇▇▇▇▇, United and/or Alamo, as applicable, shall have the right
thereafter to convert the Debt into the kind and amount of shares of stock of
the Company or of such successor or purchasing corporation and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale, or conveyance by a holder of the number of shares of Preferred
Stock or Common Stock of the Company into which the Debt might have been
converted immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance. The provisions of this paragraph shall similarly
apply to successive reclassifications, changes, consolidations, mergers, sales,
or conveyances.
8. Reservation of Shares. The Company covenants that it will at times
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reserve and keep available out of its authorized Preferred Stock and Common
Stock, solely for the purpose of issuance upon conversion of the Debt or
Preferred Stock, as applicable, as herein provided, such number of shares of the
Preferred Stock and Common Stock as shall then be issuable upon such conversion.
The Company covenants that all shares of the Preferred Stock and Common Stock
which shall be so issuable shall, when issued, be duly and validly issued and
fully paid and nonassessable.
9. Registration Rights. The Company has not agreed to file and the
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Company does not anticipate the filing of a registration statement under the
Securities Act to allow a public resale of the Debt. However, pursuant to that
certain Registration Rights Agreement described in Exhibit A attached hereto and
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incorporated herein by this reference, the Company has agreed to registration
rights with respect to the resale of the shares of the Common Stock issuable
upon the conversion of any shares of the Preferred Stock received in connection
with the conversion of the Debt.
10. Conflict. Notwithstanding anything herein contained to the contrary,
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in the event of any conflict between the terms of the Acknowledgment or this
Agreement, the terms of this Agreement shall control.
11. Attorney's Fees. In the event that it should become necessary for any
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party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
12. Governing law; Jurisdiction. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.
13. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement, or the breach, termination, or validity thereof, shall be
settled by final and binding arbitration in accordance with the Commercial
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Arbitration Rules of the American Arbitration Association ("AAA Rules") in
effect as of the effective date of this Agreement. The American Arbitration
Association shall be responsible for (a) appointing a sole arbitrator, and (b)
administering the case in accordance with the AAA Rules. The situs of the
arbitration shall be San Antonio, Texas. Upon the application of either party to
this Agreement, and whether or not an arbitration proceeding has yet been
initiated, all courts having jurisdiction hereby are authorized to: (x) issue
and enforce in any lawful manner, such temporary restraining orders, preliminary
injunctions and other interim measures of relief as may be necessary to prevent
harm to a party's interest or as otherwise may be appropriate pending the
conclusion of arbitration proceedings pursuant to this Agreement; and (y) enter
and enforce in any lawful manner such judgments for permanent equitable relief
as may be necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
14. Benefit. All the terms and provisions of this Agreement shall be
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binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns. Notwithstanding anything
herein contained to the contrary, the Company shall have the right to assign
this Agreement to any party without the consent of the Holder.
15. Notices. All notices, requests and other communications hereunder
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shall be in writing and shall be deemed to have been duly given at the time of
receipt if delivered by hand or communicated by electronic transmission, or, if
mailed, three days after deposit in the United States mail, registered or
certified, return receipt requested, with postage prepaid and addressed to the
party to receive same, if to the Company, addressed to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇, fax (210)
▇▇▇-▇▇▇▇, and e-mail ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇; and if to the Holder, addressed to ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, fax (▇▇▇) ▇▇▇-▇▇▇▇, and e-mail ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇; provided,
however, that if either party shall have designated a different address by
notice to the other given as provided above, then any subsequent notice shall be
addressed to such party at the last address so designated.
16. Construction. Words of any gender used in this Agreement shall be
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held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
17. General Assurances. The parties agree to execute, acknowledge, and
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deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
18. Construction of Agreement. The parties hereto acknowledge and agree
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that neither this Agreement nor any of the other documents executed in
connection herewith shall be construed more favorably in favor of one than the
other based upon which party drafted the same, it being acknowledged that each
of the parties hereto contributed substantially to the negotiation and
preparation of this Agreement and the documents executed in connection herewith.
19. No Third Party Beneficiaries. Except as otherwise expressly forth in
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this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
20. Incorporation by Reference. Any agreement referred to herein is
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hereby incorporated into this Agreement by this reference.
21. Waiver. No course of dealing on the part of any party hereto or its
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agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power
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or privilege shall not preclude any later exercise thereof or any exercise of
any other right, power or privilege hereunder or thereunder.
22. Cumulative Rights. The rights and remedies of any party under this
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Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
23. Invalidity. In the event any one or more of the provisions contained
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in this Agreement or in any instrument referred to herein or executed in
connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
24. Excusable Delay. None of the parties hereto shall be obligated to
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perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
25. Time of the Essence. Time is of the essence of this Agreement.
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26. Headings. The headings used in this Agreement are for convenience and
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reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
27. Multiple Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
28. Entire Agreement. This instrument, together with the Acknowledgment,
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contains the entire understanding of the parties and may not be changed orally,
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought.
SEE NEXT PAGE FOR SIGNATURES
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
▇▇▇▇▇▇▇.▇▇▇, INC.,
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, President
UNITED CAPITAL INVESTMENT GROUP, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, President
ALAMO COMMERCIAL GROUP, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, President
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Attachment
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Exhibit A - Registration Rights Agreement
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Exhibit A
Registration Right Agreement
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is entered into as of December 1, 1999, by and between
▇▇▇▇▇▇▇.▇▇▇, INC., a Texas corporation (the "Company"), ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
("▇▇▇▇▇▇"), UNITED CAPITAL INVESTMENT GROUP, INC., a Texas corporation
("United"), and ALAMO COMMERCIAL GROUP, INC., a Texas corporation ("Alamo").
▇▇▇▇▇▇, United and Alamo are sometimes hereinafter collectively referred to as
the "Holders."
WHEREAS, on even date herewith the Company executed and delivered to the
Holders that certain Acknowledgment of Debt (the "Acknowledgment") whereby the
Company has agreed to issue to the Holders shares of the Company's common stock,
par value $0.001 per share (the "Common Stock"), upon the conversion of the Debt
(as defined in the Acknowledgment) as described in the Acknowledgment;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Registration Rights Available. Pursuant to the terms and conditions
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contained herein, and in the Acknowledgment, the Company agrees to provide the
Holders or any permitted assignee of the Holders (collectively, the "Holder")
with the right to "piggyback" (the "Registration Rights") on a firm commitment
underwritten offering with respect to the Common Stock and any other securities
issued or issuable at any time or from time to time in respect of the Common
Stock as a result of a merger, consolidation, reorganization, stock split, stock
dividend, recapitalization or other similar event involving the Company
(collectively, the "Registrable Securities").
2. Registration Rights. With respect to the Registration Rights, the
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parties agree as follows:
(a) Subject to Paragraph 2(b), the Company will (i) promptly give to
the Holder written notice of any registration relating to an Underwritten Public
Offering, and (ii) include in such registration (and related qualification under
blue sky laws or other compliance) such of the Holder's Registrable Securities
as are specified in the Holder's written request or requests, mailed in
accordance with the terms of this Agreement within 30 days after the date of
such written notice from the Company.
(b) The right of the Holder to registration pursuant to the
Registration Rights shall be conditioned upon the Holder's participation in such
underwriting, and the inclusion of the Registrable Securities in the
underwriting shall be limited to the extent provided herein. The Holder shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for the Underwritten Public Offering
by the Company. Notwithstanding any other provision of this Agreement, if the
managing underwriter determines that marketing factors require a limitation of
the number of the Registrable Securities to be underwritten, the managing
underwriter may limit some or all of the Registrable Securities that may be
included in the registration and the Underwritten Public Offering as follows:
the number of the Registrable Securities that may be included in the
registration and the Underwritten Public Offering by the Holder shall be
determined by multiplying the number of the shares of the Registrable Securities
of all selling shareholders of the Company which the managing underwriter is
willing to include in such registration and the Underwritten Public Offering
times a fraction, the numerator of which is the number of the Registrable
Securities requested to be included in such registration and the Underwritten
Public Offering by the Holder, and the denominator of which is the total number
of the Registrable Securities which all selling shareholders of the Company have
requested to be included in such registration and the Underwritten Public
Offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocable to any such
person to the nearest 100 shares. If the Holder disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the effective date of the Underwritten Public Offering. Any of the Registrable
Securities excluded or withdrawn from the Underwritten Public Offering shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 60 days after the effective date of the Registration
Statement relating thereto, or such other shorter period of time as the
underwriters may require.
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3. Registration Procedure. With respect to the Registration Rights, the
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following provisions shall apply:
(a) The Holder shall be obligated to furnish to the Company and the
underwriters such information regarding the Registrable Securities and the
proposed manner of distribution of the Registrable Securities as the Company and
the underwriters may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to herein and shall
otherwise cooperate with the Company and the underwriters in connection with
such registration, qualification or compliance.
(b) With a view to making available the benefits of certain rules and
regulations of the Securities and Exchange Commission (the "SEC") which may at
any time permit the sale of any Restricted Securities as defined in Rule 144
("Rule 144") promulgated under the Securities Act of 1933, as amended (the
"Securities Act") to the public without registration, the Company agrees to use
its best lawful efforts to:
(i) Make and keep public information available, as those terms
are understood and defined in Rule 144 at all times during which the Company is
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(ii) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
(iii) So long as the Holder owns any Restricted Securities, to
furnish to the Holder upon request a written statement from the Company as to
its compliance with the reporting requirements of Rule 144 and with regard to
the Securities Act and the Exchange Act (at all times during which the Company
is subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any Restricted Securities
without registration.
(c) The Company agrees that it will furnish to the Holder such number
of prospectuses meeting the requirements of Section 10(a)(3) of the Securities
Act, offering circulars or other documents incident to any registration,
qualification or compliance referred to herein as provided or, if not otherwise
provided, as the Holder from time to time may reasonably request.
(d) All expenses (except for any underwriting and selling discounts
and commissions and legal fees for the Holder's attorneys) of any registrations
permitted pursuant to this Agreement and of all other offerings by the Company
(including, but not limited to, the expenses of any qualifications under the
blue sky or other state securities laws and compliance with governmental
requirements of preparing and filing any post-effective amendments required for
the lawful distribution of the Registrable Securities to the public in
connection with such registration, of supplying prospectuses, offering circulars
or other documents) will be paid by the Company.
(e) In connection with the preparation and filing of any Registration
Statement under the Securities Act pursuant to this Agreement, the Company will
give the Holder and the Holder's attorneys and accountants, the opportunity to
participate in the preparation of any Registration Statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary to conduct a reasonable investigation within the meaning of
the Securities Act.
(f) The Company shall notify each Holder of Registrable Securities
covered by a Registration Statement, during the time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an
2
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.
4. Blackout Period. At any time after the effective date of the
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Registration Statement, if the Company gives to the Holder a notice pursuant to
Paragraph 3(f) hereof and stating that the Company requires the suspension by
the Holder of the distribution of any of the Registrable Securities, then the
Holder shall cease distributing the Registrable Securities for such period of
time (the "Blackout Period"), not to exceed 120 days from the time notice is
sent until the Company informs the Holder that the Blackout Period has been
terminated. Upon notice by the Company to the Holder of such determination, the
Holder will (a) keep the fact of any such notice strictly confidential, (b)
promptly halt any offer, sale, trading or transfer of any of the Registrable
Securities for the duration of the Blackout Period, and (c) promptly halt any
use, publication, dissemination or distribution of each prospectus included
within the Registration Statement, and any amendment or supplement thereto by it
and any of its affiliates for the duration of the Blackout Period.
5. Lock-Up. In connection with any Underwritten Public Offering, the
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Holder agrees, if requested, to execute a lock-up letter addressed to the
managing underwriter in customary form agreeing not to sell or otherwise dispose
of the Registrable Securities owned by the Holder (other than any that may be
included in the offering) for a period not exceeding 180 days.
6. Delay of Registration. No Holder shall have any right to obtain or
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seek an injunction restraining or otherwise delaying any registration of the
Registrable Securities as the result of any controversy that might arise with
respect to the interpretation or implementation of this Agreement.
7. Indemnification by the Company. In the event of any registration of
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the Registrable Securities of the Company under the Securities Act, pursuant to
the terms of this Agreement, the Company agrees to indemnity and hold harmless
the Holder and each other person who participates as an underwriter in the
offering or sale of the Registrable Securities against any and all claims,
demands, losses, costs, expenses, obligations, liabilities, joint or several,
damages, recoveries and deficiencies, including interest, penalties and
attorneys' fees (collectively the "Claims"), to which the Holder or any such
underwriter may become subject under the Securities Act or otherwise, insofar as
the Claims or actions or proceedings, whether commenced or threatened, in
respect thereto arise out of or are based on any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which the Holder's Registrable Securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse the Holder and each such underwriter for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any Claim or action or proceeding in respect thereto; provided that
the Company shall not be liable in any such case to the extent that any Claim or
action or proceeding in respect thereof or expense arises out of or is based on
an untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance on and in
conformity with written information furnished to the Company through an
instrument duly executed by the Holder specifically stating that it is for use
in the preparation thereof. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Holder or any
such underwriter and survive the transfer of the Registrable Securities by the
Holder.
8. Indemnification by the Holder. The Company may require, as a
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condition to including the Registrable Securities in any Registration Statement
filed pursuant to this Agreement, that the Company shall have received an
undertaking satisfactory to it from the Holder, to indemnify and hold harmless
(in the same manner and to the same extent as set forth in Paragraph 7 hereof)
the Company, each director and officer of the Company and each other person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement or alleged statement in or
omission or alleged omission from the Registration Statement, any preliminary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance on and in conformity with written information furnished to the Company
through an instrument duly executed by the Holder specifically stating that it
is for use in the preparation of
3
the Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Notwithstanding the foregoing, the maximum
liability hereunder which the Holder shall be required to suffer shall be
limited to the net proceeds to the Holder from the Registrable Securities sold
by the Holder in any such offering. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of the Registrable Securities by the Holder.
9. Notice of Claims. Promptly after receipt by an indemnified party of
----------------
notice of the commencement of any action or proceeding involving a Claim, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Agreement except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of a Claim the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of a Claim.
10. Indemnification Payments. The indemnification required by this
------------------------
Agreement shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
11. Assignment of Registration Rights. The rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to this Agreement may be assigned by
the Holder to a transferee or assignee of such securities who shall, upon such
transfer or assignment, be deemed a Holder under this Agreement; provided that
the Company is furnished with written notice of the name and address of such
transferee or assignee and the Registrable Securities with respect to which the
Registration Rights are being assigned; provided, further, that such assignment
shall be effective only if immediately following such transfer the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and that such transferee or assignee is either (a) a member
of the immediate family or a trust for the benefit of any Holder that is an
individual or (b) a transferee or assignee that after the transfer or assignment
holds all of the Registrable Securities.
12. Termination of this Agreement. This Agreement shall terminate with
-----------------------------
respect to the Holder when all of the Registrable Securities have been
registered as provided herein.
13. Conflict. Notwithstanding anything herein contained to the contrary,
--------
in the event of any conflict between the terms of the Acknowledgment or this
Agreement, the terms of this Agreement shall control.
14. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
15. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may
4
now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
16. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach, termination, or validity thereof, shall be
settled by final and binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA Rules") in
effect as of the effective date of this Agreement. The American Arbitration
Association shall be responsible for (a) appointing a sole arbitrator, and (b)
administering the case in accordance with the AAA Rules. The situs of the
arbitration shall be San Antonio, Texas. Upon the application of either party to
this Agreement, and whether or not an arbitration proceeding has yet been
initiated, all courts having jurisdiction hereby are authorized to: (x) issue
and enforce in any lawful manner, such temporary restraining orders, preliminary
injunctions and other interim measures of relief as may be necessary to prevent
harm to a party's interest or as otherwise may be appropriate pending the
conclusion of arbitration proceedings pursuant to this Agreement; and (y) enter
and enforce in any lawful manner such judgments for permanent equitable relief
as may be necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
17. Benefit. All the terms and provisions of this Agreement shall be
-------
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns. Notwithstanding anything
herein contained to the contrary, the Company shall have the right to assign
this Agreement to any party without the consent of the Holder.
18. Notices. All notices, requests and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given at the time of
receipt if delivered by hand or communicated by electronic transmission, or, if
mailed, three days after deposit in the United States mail, registered or
certified, return receipt requested, with postage prepaid and addressed to the
party to receive same, if to the Company, addressed to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇, fax (210)
▇▇▇-▇▇▇▇, and e-mail ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇; and if to the Holder, addressed to ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, fax (▇▇▇) ▇▇▇-▇▇▇▇, and e-mail ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇; provided,
however, that if either party shall have designated a different address by
notice to the other given as provided above, then any subsequent notice shall be
addressed to such party at the last address so designated.
19. Construction. Words of any gender used in this Agreement shall be
------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
20. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
21. Construction of Agreement. The parties hereto acknowledge and agree
-------------------------
that neither this Agreement nor any of the other documents executed in
connection herewith shall be construed more favorably in favor of one than the
other based upon which party drafted the same, it being acknowledged that each
of the parties hereto contributed substantially to the negotiation and
preparation of this Agreement and the documents executed in connection herewith.
22. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
5
23. Incorporation by Reference. Any agreement referred to herein is
--------------------------
hereby incorporated into this Agreement by this reference.
24. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
25. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
26. Invalidity. In the event any one or more of the provisions contained
----------
in this Agreement or in any instrument referred to herein or executed in
connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
27. Excusable Delay. None of the parties hereto shall be obligated to
---------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
28. Time of the Essence. Time is of the essence of this Agreement.
-------------------
29. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
30. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
31. Entire Agreement. This instrument, together with the Acknowledgment,
----------------
contains the entire understanding of the parties and may not be changed orally,
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought.
SEE NEXT PAGE FOR SIGNATURES
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
▇▇▇▇▇▇▇.▇▇▇, INC.,
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, President
UNITED CAPITAL INVESTMENT GROUP, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, President
ALAMO COMMERCIAL GROUP, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
-------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
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