Document:

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                                                                     EXHIBIT 4.1

                          REGISTRATION RIGHTS AGREEMENT

      AGREEMENT dated as of October 18, 2004, between MONARCH POINTE FUND, LTD.
(the "Fund") and MERCATOR ADVISORY GROUP, LLC ("MAG") (the Fund and MAG are
referred to individually as a "Holder" and collectively as the "Holders"), and
Medical Discoveries, Inc., a Utah corporation (the "Company").

      WHEREAS, the Funds have purchased, for an aggregate of $1,200,000, an
aggregate of 12,000 shares of Series A Convertible Preferred Stock (the "Series
A Stock") from the Company, and have the right to cause their Series A Stock to
be converted into shares of Common Stock, no par value (the "Common Stock"), of
the Company, pursuant to the conversion formula set forth in the Certificate of
Determination;

      WHEREAS, each of Fund and MAG have acquired Warrants (together, the
"Warrants") from the Company, pursuant to which the Holders have the right to
purchase in the aggregate up to 4,575,496 shares of the Common Stock through the
exercise of the Warrants;

      WHEREAS, the Company desires to grant to the Holders the registration
rights set forth herein with respect to the shares of Common Stock issuable upon
the conversion of the Series A Stock and the exercise of the Warrants.

      NOW, THEREFORE, the parties hereto mutually agree as follows:

      1.    REGISTRABLE SECURITIES. As used herein the terms "Registrable
Security" means each of the shares of Common Stock (i) issued upon the
conversion of the Series A Stock (the "Conversion Shares") or (ii) upon exercise
of the Warrants (the "Warrant Shares"), provided, however, that with respect to
any particular Registrable Security, such security shall cease to be a
Registrable Security when, as of the date of determination that (a) it has been
effectively registered under the Securities Act of 1933, as amended (the
"Securities Act"), and disposed of pursuant thereto, or (b) registration under
the Securities Act is no longer required for the immediate public distribution
of such security. The term "Registrable Securities" means any and/or all of the
securities falling within the foregoing definition of a "Registrable Security."
In the event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Common Stock, such adjustment
shall be made in the definition of "Registrable Security" as is appropriate in
order to prevent any dilution or enlargement of the rights granted pursuant to
this Section 1.

      2.   REGISTRATION.

           (a)   The Company shall file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") within thirty (30) days after the date of this Agreement in order to
register the resale of the Registrable Securities under the Securities Act. Once
effective, the Company shall maintain the effectiveness of the Registration
Statement until the earlier of (i) the date that all of
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the Registrable Securities have been sold, or (ii) the date that the Company
receives an opinion of counsel to the Company that all of the Registrable
Securities may be freely traded without registration under the Securities Act,
under Rule 144 promulgated under the Securities Act or otherwise.

         (b)   The Company will initially include in the Registration Statement
as Registrable Securities Twenty-Four Million (24,000,000) shares of Common
Stock issuable upon conversion of the Series A Stock and the maximum number of
shares of Common Stock issuable upon exercise of the Warrants.

     3.  COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION.

     The Company covenants and agrees as follows:

         (a)   The Company shall use best efforts to cause the Registration
Statement to become effective with the SEC as promptly as possible and in no
event more than 120 days after the date of this Agreement. If any stop order
shall be issued by the SEC in connection therewith, the Company shall use best
efforts to obtain promptly the removal of such order. Following the effective
date of the Registration Statement, the Company shall, upon the request of any
Holder, forthwith supply such reasonable number of copies of the Registration
Statement, preliminary prospectus and prospectus meeting the requirements of the
Securities Act, and any other documents necessary or incidental to the public
offering of the Registrable Securities, as shall be reasonably requested by the
Holder to permit the Holder to make a public distribution of the Holder's
Registrable Securities. The obligations of the Company hereunder with respect to
the Holder's Registrable Securities are subject to the Holder's furnishing to
the Company such appropriate information concerning the Holder, the Holder's
Registrable Securities and the terms of the Holder's offering of such
Registrable Securities as the Company may reasonably request in writing.

         (b)   The Company shall pay all costs, fees and expenses in connection
with the Registration Statement filed pursuant to Section 2 hereof including,
without limitation, the Company's legal and accounting fees, printing expenses,
and blue sky fees and expenses; provided, however, that each Holder shall be
solely responsible for the fees of any counsel retained by the Holder in
connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Registrable Securities sold by
the Holder pursuant thereto.

         (c)   The Company will take all actions which may be required to
qualify or register the Registrable Securities included in the Registration
Statement for the offer and sale under the securities or blue sky laws of such
states as are reasonably requested by each Holder of such securities, provided
that the Company shall not be obligated to execute or file any general consent
to service of process or to qualify as a foreign corporation to do business
under the laws of any such jurisdiction.

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     4.  ADDITIONAL TERMS.

         (a)   The Company shall indemnify and hold harmless the Holders and
each underwriter, within the meaning of the Securities Act, who may purchase
from or sell for any Holder, any Registrable Securities, from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
of a material fact contained in the Registration Statement, any other
registration statement filed by the Company under the Securities Act with
respect to the registration of the Registrable Securities, any post-effective
amendment to such registration statements, or any prospectus included therein or
caused by any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission based upon information furnished or required to be
furnished in writing to the Company by the Holders or underwriter expressly for
use therein, which indemnification shall include each person, if any, who
controls any Holder or underwriter within the meaning of the Securities Act and
each officer, director, employee and agent of each Holder and underwriter;
provided, however, that the indemnification in this Section 4(a) with respect to
any prospectus shall not inure to the benefit of any Holder or underwriter (or
to the benefit of any person controlling any Holder or underwriter) on account
of any such loss, claim, damage or liability arising from the sale of
Registrable Securities by the Holder or underwriter, if a copy of a subsequent
prospectus correcting the untrue statement or omission in such earlier
prospectus was provided to such Holder or underwriter by the Company prior to
the subject sale and the subsequent prospectus was not delivered or sent by the
Holder or underwriter to the purchaser prior to such sale and provided further,
that the Company shall not be obligated to so indemnify any Holder or any such
underwriter or other person referred to above unless the Holder or underwriter
or other person, as the case may be, shall at the same time indemnify the
Company, its directors, each officer signing the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act, from and against any and all losses, claims, damages and liabilities caused
by any untrue statement of a material fact contained in the Registration
Statement, any registration statement or any prospectus required to be filed or
furnished by reason of this Agreement or caused by any omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission based upon
information furnished in writing to the Company by the Holder or underwriter
expressly for use therein.

         (b)   If for any reason the indemnification provided for in the
preceding section is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, claim, damage, liability or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect the

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            relative fault of the indemnified party and the indemnifying party,
            as well as any other relevant equitable considerations.

      (c)   Neither the filing of a Registration Statement by the Company
pursuant to this Agreement nor the making of any request for prospectuses by the
Holder shall impose upon any Holder any obligation to sell the Holder's
Registrable Securities.

      (d)   Each Holder, upon receipt of notice from the Company that an event
has occurred which requires a Post-Effective Amendment to the Registration
Statement or a supplement to the prospectus included therein, shall promptly
discontinue the sale of Registrable Securities until the Holder receives a copy
of a supplemented or amended prospectus from the Company, which the Company
shall provide as soon as practicable after such notice.

      (e)   If the Company fails to keep the Registration Statement referred to
above continuously effective during the requisite period, then the Company
shall, promptly upon the request of any Holder, use best efforts to update the
Registration Statement or file a new registration statement covering the
Registrable Securities remaining unsold, subject to the terms and provisions
hereof.

      (f)   Each Holder agrees to provide the Company with any information or
undertakings reasonably requested by the Company in order for the Company to
include any appropriate information concerning the Holder in the Registration
Statement or in order to promote compliance by the Company or the Holder with
the Securities Act.

      (g)   The Company agrees that it shall cause each of its directors,
officers and shareholders owning ten percent (10%) or more of the Company's
outstanding Common Stock to refrain from selling any shares of the Company's
Common Stock until the Registration Statement has been declared effective.

      (h)   Each Holder, on behalf of itself and its affiliates, hereby
covenants and agrees not to, directly or indirectly, offer to "short sell",
contract to "short sell" or otherwise "short sell" any securities of the
Company, including, without limitation, shares of Common Stock that will be
received as a result of the conversion of the Series A Stock or the exercise of
the Warrants.

   5.    GOVERNING LAW. The Registrable Securities will be, if and when issued,
delivered in California. This Agreement shall be deemed to have been made and
delivered in the State of California and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
substantive laws of the State of California, without giving effect to the choice
of law rules thereof.

   6.    AMENDMENT. This Agreement may only be amended by a written instrument
executed by the Company and the Holders.

   7.    ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior

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agreements and understandings of the parties, oral and written, with respect to
the subject matter hereof.

   8.    EXECUTION IN 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 document.

   9.    NOTICES. All communications hereunder shall be in writing and shall be
hand delivered, mailed by first-class mail, couriered by next-day air courier or
by facsimile at the addresses set forth below.

         If to the Holders,        Mercator Advisory Group, LLC
                                   Mercator Momentum Fund, L.P.
                                   Mercator Momentum Fund III, L.P.
                                   Monarch Pointe Fund, Ltd.
                                   555 South Flower Street, Suite 4500
                                   Los Angeles, CA  90071
                                   Attention: David Firestone

         With a copy to Sheppard Mullin Richter & Hampton LLP
                                   333 South Hope Street
                                   48th Floor
                                   Los Angeles, CA 90071-1448
                                   Telephone No.: (213) 620-1780
                                   Facsimile No.: (213) 620-1398
                                   Attention: David C. Ulich

         If to the Company,        Medical Discoveries, Inc.
                                   738 Aspenwood Lane
                                   Twin Falls, Idaho 83301
                                   Telephone No.: (208) 736-1799
                                   Facsimile No.: (208) 733-5877
                                   Attention: Judy M. Robinett

With a copy to                     Stoel Rives LLP
                                   101 S. Capitol Blvd., Suite 1900
                                   Boise, Idaho 83702
                                   Telephone No.: (208) 389-9000
                                   Facsimile No.: (208) 389-9040
                                   Attention: Stephen R. Drake

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All such notices and communications shall be deemed to have been duly given: (i)
when delivered by hand, if personally delivered; (ii) five business days after
being deposited in the mail, postage prepaid, if mailed certified mail, return
receipt requested; (iii) one business day after being timely delivered to a
next-day air courier guaranteeing overnight delivery; (iv) the date of
transmission if sent via facsimile to the facsimile number as set forth in this
Section or the signature page hereof prior to 4:00 p.m. on a business day, or
(v) the business day following the date of transmission if sent via facsimile at
a facsimile number set forth in this Section or on the signature page hereof
after 4:00 p.m. or on a date that is not a business day. Change of a party's
address or facsimile number may be designated hereunder by giving notice to all
of the other parties hereto in accordance with this Section.

   10.   BINDING EFFECT; BENEFITS. Any Holder may assign its rights hereunder.
This Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their respective heirs, legal representatives, successors and
assigns. Nothing herein contained, express or implied, is intended to confer
upon any person other than the parties hereto and their respective heirs, legal
representatives and successors, any rights or remedies under or by reason of
this Agreement.

   11.   HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.

   12.   SEVERABILITY. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

   13.   JURISDICTION. Each of the parties irrevocably agrees that any and all
suits or proceedings based on or arising under this Agreement may be brought
only in and shall be resolved in the federal or state courts located in the City
of Los Angeles, California and consents to the jurisdiction of such courts for
such purpose. Each of the parties irrevocably waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding in any such
court. Each of the parties further agrees that service of process upon such
party mailed by first class mail to the address set forth in Section 9 shall be
deemed in every respect effective service of process upon such party in any such
suit or proceeding. Nothing herein shall affect the right of either party to
serve process in any other manner permitted by law. Each of the parties agrees
that a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.

   14.   ATTORNEYS' FEES AND DISBURSEMENTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party or parties shall be entitled to receive from the other party or parties
reasonable attorneys' fees and disbursements in addition to any other relief to
which the prevailing party or parties may be entitled.

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             [The balance of this page is intentionally left blank.]

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      IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.

                                      MEDICAL DISCOVERIES, INC.

                                      By: /s/ Judy M. Robinett
                                          ------------------------
                                      Name: Judy M. Robinett
                                      Its:  President & CEO

                                      HOLDERS:

                                      MONARCH POINTE FUND, LTD.

                                      By: /s/ Harry Aharonian
                                          ------------------------
                                      Name: Harry Aharonian
                                      Its:  Director

                                      MERCATOR ADVISORY GROUP, LLC

                                      By: /s/ Harry Aharonian
                                          ------------------------
                                      Name: Harry Aharonian
                                      Its:  Portfolio Managerexv10w1

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made by and between
SOUTHWEST BANCORPORATION OF TEXAS, INC. (“Company”) and WALTER E. JOHNSON
(“Executive”).

W I T N E S S E T H:

     WHEREAS, Company is desirous of continuing Executive’s employment as a
senior executive of Company and its wholly owned subsidiary, SOUTHWEST BANK OF
TEXAS NATIONAL ASSOCIATION (the “Bank”), on the terms and conditions, and for
the consideration, hereinafter set forth and Executive is desirous of
continuing his employment by Company on such terms and conditions and for such
consideration;

     WHEREAS, references herein to Executive’s employment by Company shall also
mean his employment by the Bank, and references herein to payments of any
nature to be made by Company to Executive shall mean that either Company will
make such payments or it will cause Bank to make such payments to Executive;

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and obligations contained herein, Company and Executive agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

     1.1 Employment; Effective Date. Company agrees to employ Executive and
Executive agrees to be employed by Company, beginning as of the Effective Date
(as hereinafter defined) and continuing for the period of time set forth in
Article 2 of this Agreement, subject to the terms and conditions of this
Agreement. For purposes of this Agreement, the “Effective Date” shall be
January 1, 2000.

     1.2 Position. At the first regular meeting of the Board of Directors of
each of Company and the Bank (collectively, the “Boards”) held after each
annual meeting of the shareholders of Company held after the Effective Date and
through and including the annual meeting of the shareholders of Company held in
2007, Company shall recommend to the Boards that Executive be elected as the
Chairman of the Board of each of the Boards and upon each such election,
Company shall employ Executive in such capacity, subject in all respects to the
provisions of the Bylaws of Company and the Bank, as the case may be,
including, but not limited to, the requirement in such Bylaws that the Chairman
of the Board of each of Company and the Bank be elected annually by each of the
Boards and the rights of the Boards under such Bylaws to remove any officer and
to fill any vacancy in any office. In addition, from and after the Effective
Date, Company may employ Executive in such other positions as the parties may
mutually agree, subject, in the case of any such other position that is an
officer position of Company or the Bank, to the provisions of the Bylaws of
Company and the Bank, as the case may be, including, but not limited to, the
requirement in such Bylaws that such officer be elected

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annually and the rights of the Board of Directors of Company and the Bank,
as the case may be, to remove any officer and to fill any vacancy in any
office.

     1.3 Duties and Services. Executive agrees to serve in the capacities
referred to in Section 1.2 and to perform diligently and to the best of his
abilities the duties and services appertaining to such offices, as well as such
additional duties and services appropriate to such offices which the parties
mutually may agree upon from time to time. Executive’s employment shall also
be subject to the policies maintained and established by Company and the Bank,
as the same may be amended from time to time.

     1.4 Other Interests. Executive agrees, during the period of his
employment by Company, to devote his primary business time, energy and best
efforts to the business and affairs of Company and the Bank and not to engage,
directly or indirectly, in any other business or businesses, whether or not
similar to that of Company or the Bank, except with the consent of the Board of
Directors of Company (the “Board of Directors”). The foregoing
notwithstanding, the parties recognize and agree that Executive may engage in
passive personal investments and other business activities that do not conflict
with the business and affairs of Company and the Bank or interfere with
Executive’s performance of his duties hereunder.

     1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive
owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times
in the best interests of Company and the Bank and to do no act which would
injure the business, interests, or reputation of Company or any of its
affiliates. In keeping with these duties, Executive shall make full disclosure
to Company of all business opportunities pertaining to the businesses of
Company and its affiliates and shall not appropriate for Executive’s own
benefit business opportunities concerning the subject matter of the fiduciary
relationship.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. Unless sooner terminated pursuant to other provisions hereof,
Company agrees to employ Executive for the period beginning on the Effective
Date and ending on the date of the annual meeting of the shareholders of
Company held in 2008 (the “2008 Shareholder Meeting Date”).

     2.2 Company’s Right to Terminate. Notwithstanding the provisions of
Section 2.1, Company shall have the right to terminate Executive’s employment
under this Agreement at any time for any of the following reasons:

	 	(i)	 	upon Executive’s death;
	 
	 	(ii)	 	upon Executive’s becoming incapacitated by accident, sickness
or other circumstance which renders him mentally or physically incapable
of fully performing the duties and services required of him hereunder, as
determined by the Board of Directors in its sole discretion;
	 
	 	(iii)	 	for cause, which for purposes of this Agreement shall mean
Executive (A) has engaged in gross negligence or willful misconduct in
the performance of the duties

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	 	 	 	required of him hereunder, (B) has been convicted of a misdemeanor
involving moral turpitude or convicted of a felony, (C) has willfully
refused without proper legal reason to perform the duties and
responsibilities required of him hereunder, (D) has materially breached
any corporate policy or code of conduct established by Company or the
Bank, or (E) has willfully engaged in conduct that he knows or should
know is materially injurious to Company or any of its affiliates;

	 	(iv)	 	for Executive’s material breach of any material provision of
this Agreement which, if correctable, remains uncorrected for 30 days
following written notice to Executive by Company of such breach; or
	 
	 	(v)	 	for any other reason whatsoever, in the sole discretion of the
Board of Directors.

     2.3 Executive’s Right to Terminate. Notwithstanding the provisions of
Section 2.1, Executive shall have the right to terminate his employment under
this Agreement at any time for any of the following reasons:

	 	(i)	 	a material breach by Company of any material provision of this
Agreement which, if correctable, remains uncorrected for 30 days
following written notice of such breach by Executive to Company; or
	 
	 	(ii)	 	for any other reason whatsoever, in the sole discretion of
Executive.

     2.4 Notice of Termination. If Company or Executive desires to terminate
Executive’s employment hereunder at any time prior to expiration of the period
of employment as provided in Section 2.1, it or he shall do so by giving
written notice to the other party that it or he has elected to terminate
Executive’s employment hereunder and stating the effective date and reason for
such termination, provided that no such action shall alter or amend any other
provisions hereof or rights arising hereunder, including, without limitation,
the provisions of Articles 4, 5 and 6 hereof.

ARTICLE 3: COMPENSATION AND BENEFITS

     3.1 Base Salary. Except as otherwise provided herein, (i) for the period
from the Effective Date until February 17, 2002, Executive shall receive an
annual base salary of $400,000 ($33,333.33 per month), (ii) for the period from
February 18, 2002 until February 17, 2006, Executive shall receive an annual
base salary of $300,000 ($25,000 per month), unless Executive is notified by
the Compensation Committee of the Board of Directors (the “Compensation
Committee”) that his annual base salary for all or any portion of such period
shall be a greater amount, not to exceed $400,000 ($33,333.33 per month), and
(iii) for the period from February 18, 2006, until the 2008 Shareholder Meeting
Date, Executive shall receive an annual base salary of $250,000 ($20,833.33 per
month), unless Executive is notified by the Compensation Committee that his
annual base salary for all or any portion of such period shall be a greater
amount, not to exceed $300,000 ($25,000 per month). Executive’s annual base
salary shall be paid in equal installments in accordance with Company’s
standard policy regarding payment of compensation to executives but no less
frequently than monthly.

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     3.2 Bonuses. Except as otherwise provided herein, at the end of each
calendar year during the term of this Agreement, Executive may be entitled to
(i) in the case of the calendar years 2000, 2001, 2002, 2003, 2004, and 2005, a
bonus of up to 60% of his then current annual base salary, and (ii) in the case
of the calendar years 2006, 2007, and 2008, a bonus of up to 75% of his then
current annual base salary. The amount of such bonus, if any, shall be
entirely discretionary with the Compensation Committee. In making its
determination as to the amount of any such bonus, the Compensation Committee
shall consider the same criteria as that used from time to time for determining
bonuses for other senior executives of Company. It is contemplated that such
criteria shall include the Bank’s financial performance as well as the
performance of Company’s stock as compared to other members of its peer group.

     3.3 Life Insurance. During the term of this Agreement, Company shall
maintain, at its sole cost, (i) a $3,031,481 face amount “second to die” whole
life insurance policy insuring the lives of Executive and his spouse, and (ii)
a $4,000,000 face amount “10-year” term life insurance policy insuring the life
of Executive. Executive (or his spouse) shall have the sole right to name the
beneficiaries under such insurance policies during the term of this Agreement.
Following the term of this Agreement, Executive (or his spouse) shall have the
right to (A) either terminate the whole life insurance policy in exchange for
its cash surrender value or continue coverage under such policy by paying the
future premiums due, and (B) continue coverage under the term life insurance
policy by paying the future premiums due.

     3.4 Other Perquisites. During his employment hereunder, Executive shall
be afforded the following benefits as incidences of his employment:

	 	(i)	 	Business and Entertainment Expenses - Subject to Company’s
standard policies and procedures with respect to expense reimbursement as
applied to its executive employees generally, Company shall reimburse
Executive for, or pay on behalf of Executive, reasonable and appropriate
expenses incurred by Executive for business related purposes, including
dues and fees to industry and professional organizations and costs of
entertainment and business development.
	 
	 	(ii)	 	Other Company Benefits - Executive and, to the extent
applicable, Executive’s spouse, dependents and beneficiaries, shall be
allowed to participate in all benefits, plans and programs, including
improvements or modifications of the same, which are now, or may
hereafter be, available to other executive employees of Company. Such
benefits, plans and programs may include, without limitation, pension
benefit plans, health insurance or health care plan, disability
insurance, supplemental retirement plans, vacation and sick leave
benefits, and the like. Company shall not, however, by reason of this
paragraph be obligated to institute, maintain, or refrain from changing,
amending, or discontinuing, any such benefit plan or program, so long as
such changes are similarly applicable to executive employees of Company
generally.

ARTICLE 4: CONFIDENTIAL INFORMATION

     4.1 In General. Company shall disclose to Executive, or place Executive
in a position to have access to or develop, trade secrets or confidential
information of Company and/or its affiliates; and/or shall entrust Executive
with business opportunities of Company

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and/or its affiliates; and/or shall place Executive in a position to
develop business goodwill on behalf of Company and/or its affiliates.
Executive recognizes and acknowledges that Executive will have access to
certain information of Company and/or its affiliates and that such information
is confidential and constitutes valuable, special and unique property of
Company. Executive shall not at any time, either during or subsequent to the
term of employment with Company or the Bank, disclose to others, use, copy or
permit to be copied, except in pursuance of Executive’s duties for and on
behalf of Company, the Bank and their successors, assigns or nominees, any
Confidential Information of Company and/or its affiliates (regardless of
whether developed by Executive) without the prior written consent of Company.
The term “Confidential Information” means any secret or confidential
information or know-how and shall include, but shall not be limited to, the
plans, customers, costs, prices, uses, corporate opportunities, research,
financial data, evaluations, prospects, and applications of products and
services, results of investigations or studies owned or used by Company and/or
any of its affiliates, and all apparatus, products, processes, compositions,
samples, formulas, computer programs, computer hardware designs, computer
firmware designs, and servicing, marketing or manufacturing methods and
techniques at any time used, developed, investigated, made or sold by Company
and/or any of its affiliates, before or during the term of employment with
Company or the Bank, that are not readily available to the public or that are
maintained as confidential by Company and/or any of its affiliates. Executive
shall maintain in confidence any Confidential Information of third parties
received as a result of Executive’s employment with Company and/or the Bank in
accordance with the obligations of Company and/or the Bank to such third
parties and the policies established by Company and/or the Bank.

     4.2 Remedies. Executive acknowledges that money damages would not be
sufficient remedy for any breach of this Article 4 by Executive, and Company
shall be entitled to enforce the provisions of this Article 4 by terminating
payments then owing to Executive under this Agreement and/or to specific
performance and injunctive relief as remedies for such breach or any threatened
breach. Such remedies shall not be deemed the exclusive remedies for a breach
of this Article 4, but shall be in addition to all remedies available at law or
in equity to Company, including the recovery of damages from Executive and his
agents involved in such breach and remedies available to Company pursuant to
other agreements with Executive.

ARTICLE 5: NON-COMPETITION OBLIGATIONS

     5.1 In General. As part of the consideration for the compensation and
benefits to be paid to Executive hereunder; to protect the Confidential
Information of Company and its affiliates that has been and will in the future
be disclosed or entrusted to Executive, the business goodwill of Company and
its affiliates that has been and will in the future be developed in Executive,
and/or the business opportunities that have been and will in the future be
disclosed or entrusted to Executive by Company and/or its affiliates; and as an
additional incentive for Company to enter into this Agreement, Company and
Executive agree to the obligations hereunder. Executive shall not, directly or
indirectly for Executive or for others, in any geographic area or market where
Company or any of its affiliates are conducting any business as of the date of
the termination of the employment relationship or have during the previous
twelve months conducted such business:

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	 	(i)	 	engage in any business competitive with the business conducted
by Company or any of its affiliates;
	 
	 	(ii)	 	render advice or services to, or otherwise assist, any other
person, association, or entity who is engaged, directly or indirectly, in
any business competitive with the business conducted by Company or any of
its affiliates with respect to such competitive business; or
	 
	 	(iii)	 	induce any employee of Company or any of its affiliates to
terminate his or her employment with Company or any of its affiliates, or
hire or assist in the hiring of any such employee by any person,
association, or entity not affiliated with Company.

The obligations contained in this Section 5.1 shall apply during the period
that Executive is employed by Company and shall extend two years after
termination of such employment relationship if such termination is by Company
pursuant to Section 2.2(iii) or (iv) or by Executive pursuant to Section
2.3(ii).

     5.2 Enforcement and Remedies. Executive understands that the restrictions
set forth in Section 5.1 may limit Executive’s ability to engage in certain
businesses anywhere in the world during the period provided for above, but
acknowledges that Executive will receive sufficiently high remuneration and
other benefits under this Agreement to justify such restriction. Executive
acknowledges that money damages would not be sufficient remedy for any breach
of this Article 5 by Executive, and Company shall be entitled to enforce the
provisions of this Article 5 by terminating any payments then owing to
Executive under this Agreement and/or to specific performance and injunctive
relief as remedies for such breach or any threatened breach. Such remedies
shall not be deemed the exclusive remedies for a breach of this Article 5, but
shall be in addition to all remedies available at law or in equity to Company,
including without limitation, the recovery of damages from Executive and
Executive’s agents involved in such breach and remedies available to Company
pursuant to other agreements with Executive.

     5.3 Reformation. It is expressly understood and agreed that Company and
Executive consider the restrictions contained in this Article 5 to be
reasonable and necessary to protect the proprietary information of Company.
Nevertheless, if any of the aforesaid restrictions are found by a court having
jurisdiction to be unreasonable, or overly broad as to geographic area or time,
or otherwise unenforceable, the parties intend for the restrictions therein set
forth to be modified by such court so as to be reasonable and enforceable and,
as so modified by the court, to be fully enforced.

ARTICLE 6: STATEMENTS CONCERNING COMPANY

     6.1 In General. Executive shall refrain, both during the employment
relationship and after the employment relationship terminates, from publishing
any oral or written statements about Company or any of its affiliates, or any
of such entities’ officers, employees, agents or representatives, that are
slanderous, libelous, or defamatory; or that disclose private or confidential
information about Company or any of its affiliates, or any of such entities’
business affairs, officers, employees, agents, or representatives; or that
constitute an intrusion into the seclusion or private lives of Company or any
of its affiliates, or any of such entities’ officers,

-6-

 

employees, agents, or representatives; or that give rise to unreasonable
publicity about the private lives of Company or any of its affiliates, or any
of such entities’ officers, employees, agents, or representatives; or that
place Company or any of its affiliates, or any of such entities’ officers,
employees, agents, or representatives, in a false light before the public; or
that constitute a misappropriation of the name or likeness of Company or any of
its affiliates, or any of such entities’ officers, employees, agents, or
representatives. A violation or threatened violation of this prohibition may
be enjoined by the courts. The rights afforded Company and its affiliates,
under this Article 6 are in addition to any and all rights and remedies
otherwise afforded by law.

ARTICLE 7: EFFECT OF TERMINATION ON COMPENSATION

     7.1 By Expiration. If Executive’s employment hereunder shall terminate
upon expiration of the period provided in Section 2.1 hereof, then all
compensation and all benefits to Executive hereunder shall terminate
contemporaneously with termination of his employment (except to the extent
benefits continue pursuant to the specific terms of any plan or program).

     7.2 By Company. If Executive’s employment hereunder shall be terminated
by Company prior to expiration of the period provided in Section 2.1, then,
upon such termination, regardless of the reason therefor, all compensation and
benefits to Executive hereunder shall terminate contemporaneously with the
termination of such employment (except to the extent benefits continue pursuant
to the specific terms of any plan or program); provided, however, that if such
termination shall be for any reason other than those encompassed by Sections
2.2(i), (iii), or (iv), then Company shall (i) pay Executive the Termination
Payments and (ii) provide Executive with Continuation Benefits. For purposes
of this Agreement, (A) the term “Termination Payments” shall mean continuation
of Executive’s then current annual base salary as provided in Section 3.1 and
continuation of Executive’s bonuses as provided in Section 3.2 at the average
percentage of annual base salary paid to Executive within the two-calendar year
period preceding his termination of employment with Company, as if he had
remained employed by Company through the 2008 Shareholder Meeting Date, and (B)
the term “Continuation Benefits” shall mean continued coverage under Company’s
medical and dental plans and life insurance for Executive and his dependents
(including his spouse) who were covered under such plans and insurance on the
day prior to Executive’s termination of employment with Company as if he had
remained employed by Company through the 2008 Shareholder Meeting Date
(provided, however, that (1) such coverage shall terminate if and to the extent
Executive and/or any of his dependants (including his spouse) becomes eligible
to receive medical, dental and/or life insurance coverage from a subsequent
employer (and any such eligibility shall be promptly reported to Company by
Executive), (2) if Executive (and/or his spouse) would have been entitled to
retiree medical, dental, and/or life insurance coverage under Company’s plans
had he voluntarily retired on the date of such termination, then such coverages
shall be continued as provided under such plans, and (3) in the event that
continued participation in any such Company plan is for whatever reason
impermissible, Company shall arrange upon comparable terms benefits
substantially equivalent to those that may not be so provided under the plan
maintained by Company). Notwithstanding the preceding provisions of this
Section 7.2, as a condition to the receipt of any Termination Payments and/or
Continuation Benefits pursuant to this Section 7.2, Executive must first
execute a release and agreement, in form and substance satisfactory to Company,
which shall release Company, its affiliates and their officers, directors,
employees and

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agents from any and all claims and from any and all causes of action of
any kind or character, including but not limited to all claims or causes of
action arising out of Executive’s employment with Company and the Bank and the
termination of such employment.

     7.3 By Executive. If Executive’s employment hereunder shall be terminated
by Executive prior to expiration of the period provided in Section 2.1, then,
upon such termination, regardless of the reason therefor, all compensation and
benefits to Executive hereunder shall terminate contemporaneously with the
termination of such employment (except to the extent benefits continue pursuant
to the specific terms of any plan or program); provided, however, that if such
termination shall be pursuant to Section 2.3(i), then Company shall (i) pay
Executive, within 10 days after the last day of Executive’s employment with
Company, a lump sum cash payment in an amount equal to the Termination Payment
and (ii) provide Executive with Continuation Benefits.

     7.4 No Duty to Mitigate Losses. Executive shall have no duty to find new
employment following the termination of his employment under circumstances
which require Company to pay any amount to Executive pursuant to this Article
7. Any salary or remuneration received by Executive from a third party for the
providing of personal services (whether by employment or by functioning as an
independent contractor) following the termination of his employment under
circumstances pursuant to which this Article 7 apply shall not reduce Company’s
obligation to make a payment to Executive (or the amount of such payment)
pursuant to the terms of this Article 7.

     7.5 Liquidated Damages. In light of the difficulties in estimating the
damages for an early termination of this Agreement, Company and Executive
hereby agree that the payments, if any, to be received by Executive pursuant to
this Article 7 shall be received by Executive as liquidated damages.

     7.6 Incentive and Deferred Compensation. This Agreement governs the
rights and obligations of Executive and Company with respect to Executive’s
base salary, bonus, life insurance and certain perquisites of employment.
Executive’s rights and obligations both during the term of his employment and
thereafter with respect to stock options, restricted stock, and incentive and
deferred compensation shall be governed by the separate agreements, plans and
other documents and instruments governing such matters.

ARTICLE 8: MISCELLANEOUS

     8.1 Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

	 	 	 
	If to Company to:

	 	Compensation Committee

Southwest Bancorporation of Texas, Inc.

4400 Post Oak Parkway

Houston, Texas 77027

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	If to Executive to:

	 	Walter E. Johnson

Southwest Bank of Texas N.A.

4400 Post Oak Parkway

Houston, Texas 77027

or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

     8.2 Applicable Law. This Agreement is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas.

     8.3 No Waiver. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

     8.4 Severability. If a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.

     8.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.

     8.6 Withholding of Taxes and Other Employee Deductions. Company may
withhold from any benefits and payments made pursuant to this Agreement all
federal, state, city and other taxes as may be required pursuant to any law or
governmental regulation or ruling and all other normal employee deductions made
with respect to Company’s employees generally.

     8.7 Headings. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.

     8.8 Gender and Plurals. Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.

     8.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean
any entity or other person which, directly or indirectly, through one or more
intermediaries, owns or controls, is owned or controlled by, or is under direct
or indirect common ownership or control with, Company (including, but not
limited to, the Bank). For the purposes of the immediately preceding sentence,
“control” when used with respect to any entity or other person means the power
to direct the management and policies of such entity or person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the term “controlled” has a meaning correlative to the
foregoing.

     8.10 Successor Obligations. This Agreement shall be binding upon and
inure to the benefit of Company and any successor of Company, by merger or
otherwise.

-9-

 

     8.11 Assignment. Except as provided in Section 8.10, this Agreement, and
the rights and obligations of the parties hereunder, are personal and neither
this Agreement, nor any right, benefit, or obligation of either party hereto,
shall be subject to voluntary or involuntary assignment, alienation or
transfer, whether by operation of law or otherwise, without the prior written
consent of the other party.

     8.12 Term. This Agreement has a term co-extensive with the term of
employment provided in Section 2.1. Termination shall not affect any right or
obligation of any party which is accrued or vested prior to such termination.
Without limiting the scope of the preceding sentence, the provisions of
Articles 4, 5, and 6 shall survive any termination of the employment
relationship and/or this Agreement.

     8.13 Entire Agreement. Except as provided in (i) the written benefit
plans and programs referenced in Sections 3.4(ii) and 7.6, and (ii) any signed
written agreement contemporaneously or hereafter executed by Company and
Executive, this Agreement constitutes the entire agreement of the parties with
regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties and agreements between the parties with respect to
employment of Executive by Company and the Bank. Without limiting the scope of
the preceding sentence, all prior understandings and agreements between the
parties hereto relating to the subject matter hereof are hereby null and void
and of no further force and effect. Specifically, upon the execution and
delivery of this Agreement by Company and Executive, the “Change in Control
Agreement” entered into between Company and Executive, as of December 17, 1996,
shall be terminated and of no further force or effect whatsoever. Any
modification of this Agreement shall be effective only if it is in writing and
signed by the party to be charged.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
amended and restated as of the    day of    , 2004, to be
effective as of the Effective Date.

	 	 	 	 	 
	 	SOUTHWEST BANCORPORATION OF TEXAS, INC.

 
	 	By:  	 	 
	 	 	Paul B. Murphy, Jr. 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	And: 	
 	 
	 	 	John B. Brock III 	 
	 	 	Chairman of the Compensation Committee
 	 
	"COMPANY" 

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	WALTER E. JOHNSON 	 
	 	 	 

 	 
	"EXECUTIVE"

-10-

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