BANK TRANSACTION AGREEMENT
THIS AGREEMENT is entered into by and between DCRI L.P. No. 2, Inc., a
Texas corporation (the "Company"), J. Xxxxxxx Xxxxx ("Xxxxx") and Diversified
Corporate Resources, Inc., a Texas corporation ("DCRI").
W I T N E S S E T H:
WHEREAS, the Company plans to borrow from Compass Bank, a Texas state
chartered banking institution (the "Bank"), up to $500,000 in one or more loan
transactions (collectively the "Loan Transaction"), pursuant to which (a) the
Company will pledge as collateral approximately 165,000 shares of common stock
(the "Common Stock") of DCRI, (b) Xxxxx will guarantee the repayment of all
amounts pursuant to the Loan Transactions, and (c) the Company and Xxxxx will
execute such documents (collectively the "Loan Documents") as shall be required
of them by the Bank; and
WHEREAS, the Bank will not fund the Loan Transaction unless the Company
agrees to enter into a note purchase document (the "Note Purchase Agreement")
pursuant to which the Company will be obligated to purchase the Loan Documents
if the Company defaults in the repayment of the amount loaned to the Company by
the Bank pursuant to the Loan Transaction; and
WHEREAS, Xxxxx owns all or substantially all of the capital stock of the
Company, and the Company owns a substantial portion of the issued and
outstanding shares of Common Stock; and
WHEREAS, the parties hereto have reached an agreement as to various matters
related to the Note Purchase Agreement; and
WHEREAS, the purpose of this Agreement is to set forth the understandings
of the parties related to the matters covered by this Agreement.
NOW, THEREFORE, for good and valuable consideration received, the parties
do hereby contract and agree as follows:
1. At the time of execution of this Agreement, Xxxxx and the Company shall
execute and deliver to DCRI such documents as shall be required by the
terms of this Agreement including, but not by way of limitation, the
following: (a) a Security Agreement in the form as attached hereto as
Exhibit "A"; and (b) a UCC-1 Financing Statement in the form as attached
hereto as Exhibit "B".
2. Both the Company and Xxxxx acknowledge that there is a possibility that the
Company may default in its obligations in connection with the Loan
Transaction and that DCRI may be required to purchase the Loan Documents
from the Bank. As a consequence, the Company agrees to pledge to DCRI
additional collateral as herein provided. Subject to the terms of this
Agreement, the Company and/or Xxxxx shall and do hereby assign, pledge,
convey and hypothecate to DCRI 50,000 shares of Common Stock (the
"Shares"). At such time as the Loan Transaction has been paid in full, DCRI
will return the Shares to the Company and release its lien on the Shares.
3. As consideration to DCRI for entering into the Note Purchase Agreement
transaction, the Company and Xxxxx agree as follows:
a. The Company shall and do hereby sell, assign, convey and deliver
5,000 shares of Common Stock to DCRI without any consideration
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required to be paid by DCRI to the Company in the form of
purchase price for such stock.
x. Xxxxx will use part of the proceeds from the Loan Transaction to
exercise options to purchase 72,500 shares of Common Stock from
DCRI.
x. Xxxxx shall and does hereby waive the right to purchase, at $2.50
per share, options to purchase 5,000 shares of Common Stock which
were granted to Xxxxx by the Board of Directors of DCRI in 1996.
4. Each of the parties hereto agree to execute such documents as shall be
reasonably necessary to carry out the purpose and intent of this Agreement
of and to the extent requested to do so by one or more of the other parties
to this Agreement.
5. Representations and Warranties.
a. The Company and Xxxxx shall and does hereby represent and warrant
to DCRI as follows:
i. The Company is a corporation duly organized and legally
existing in good standing under the laws of the State of
Texas.
ii. The Company and Xxxxx have the full power and authority to
deliver and perform this Agreement and the transactions
contemplated by both this Agreement and the Loan Documents.
iii. Except with respect to the ownership claim of Xxxxxx Xxxxx,
the Company owns the Shares free and clear of any and all
liens, claims or other encumbrances.
iv. The Company and Xxxxx expect that the Company will be able
to repay the Secured Notes in full at the time such
obligations become due and payable.
b. DCRI shall and does hereby represent and warrant to the Company
and Xxxxx as follows:
i. DCRI is a corporation duly organized and legally existing in
good standing under the laws of the State of Texas.
ii. DCRI has the full corporate power and authority to execute,
deliver and perform this Agreement and the transactions
contemplated by this Agreement.
6. The Company and Xxxxx will use the loan proceeds from the Loan Transactions
to fund those obligations as represented to the Bank and the Board of
Directors of DCRI including, but not by way of limitation, (a) exercise of
stock options by Xxxxx to purchase shares of common stock of DCRI, (b)
payment of legal fees, and (c) payment of taxes.
7. In the event DCRI does in fact purchase the Loan Documents from the Bank,
DCRI hereby covenants and agrees to amend the Loan Documents to provide (a)
the Company shall have thirty (30) days from the date of closing of DCRI
purchasing the Loan Documents from the Bank, to pay in full all amounts
then due and payable with respect to the Secured Notes and, if the Company
does in fact make such payment in a timely fashion, the Company shall not
be deemed to be in default under the terms of the Secured Notes, and (b)
the Company will have thirty (30) days to cure non-monetary defaults under
the Loan Documents, instead of the ten (10) day curative period as now
provided in the Loan Documents.
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8. The representations, warranties, covenants and agreements made in this
Agreement or any certificate or instrument delivered in connection herewith
shall survive the closing of the transactions contemplated by this
Agreement.
9. The parties hereto agree to execute such additional instruments and/or
documents as shall be reasonable requested by the other party to carry out
the purpose and intent of this Agreement.
10. Any notices or other circumstances required or permitted hereunder shall be
sufficiently given if sent by certified mail, express mail service or
overnight delivery service, postage prepaid, addressed as follows:
If to the Company:
DCRI L.P. No. 2, Inc.
00000 Xxxxx Xxxxxxx xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: J. Xxxxxxx Xxxxx
If to J. Xxxxxxx Xxxxx:
J. Xxxxxxx Xxxxx
0000 Xxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Attn: J. Xxxxxxx Xxxxx
If to Diversified Corporate Resources, Inc.:
Diversified Corporate Resources, Inc.
00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: M. Xxx Xxxxxxx, Secretary
Or such other address as shall be furnished in writing by either party, and
such notice or communication shall be deemed to have been given five days
after the date of mailing if mailed prepaid and properly addressed.
11. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and there respective successors, heirs and assignees,
provided that this Agreement may not be assigned by either party without
the consent of the other party.
12. This Agreement may not be amended unless in writing signed by both of the
parties hereto.
13. This Agreement may be executed in one or more counterparts, each of which
shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party.
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14. One party may extend the time or waive the performance of any of the
obligations of the other party, waive any inaccuracies in the
representations or warranties by the other party, or waive compliance by
the other party with any of the covenants or conditions contained in this
Agreement. Any such extension or waiver shall be in writing and signed by
an authorized representative of the respective party. Any such extension or
waiver shall not act as a waiver or an extension of any other provisions of
this Agreement.
15. Nothing in this Agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on any
persons other than the parties to it and their respective heirs,
representatives, successors and assignees, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of
any third persons to any party to this Agreement, nor shall any provisions
give any third persons any rights of subrogation or action over or against
any party to this Agreement.
16. Upon request of either of the parties hereto, all disputes, claims or
controversies of any kind (herein referred to as "Disputes") between the
parties hereto, with respect to this Agreement, shall be resolved by
binding arbitration in accordance with the terms of this Agreement. All
Disputes (a) shall be resolved by a binding arbitration administered by the
American Arbitration Association (the "AAA") in accordance with the terms
of this provision of the Agreement, and (b) shall be decided by a majority
vote of three arbitrators, one each to be chosen by The Company and by DCRI
and the third arbitrator to be selected by the two arbitrators selected by
the parties. A judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction. The fees and expenses of the
arbitrator designated by a party shall be the responsibility of such party.
The fees and expenses of the third arbitrator shall be allocated in the
manner set forth in the award rendered by the arbitrators.
17. Each party hereto agrees to pay their own fees, expenses and disbursements
in connection with this Agreement.
18. This Agreement (including the schedules attached hereto) and the documents
delivered pursuant hereto constitute the entire agreement and understanding
between the parities and supersede any prior agreements and understandings
relating to the subject matter hereof.
19. This Agreement shall be governed by and interpreted in accordance with the
laws of the Texas.
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IN WITNESS WHEREOF, this Agreement has been executed by each of the
parties hereto effective as of the 12th day of January 1999.
DCRI L.P. No. 2, Inc.
By: /s/ J. Xxxxxxx Xxxxx
---------------------------
J. Xxxxxxx Xxxxx, President
Diversified Corporate Resources, Inc.
By: /s/ M. Xxx Xxxxxxx
---------------------------
M. Xxx Xxxxxxx, Secretary
/s/ J. Xxxxxxx Xxxxx
---------------------------------------
J. Xxxxxxx Xxxxx, Individually
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