GUARANTY AND INDEMNIFICATION AGREEMENT
Exhibit 99.3
This Agreement made this 19th day of
February, 2008 by and between nFinanSe Inc., a Nevada
corporation having a headquarters address at 0000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000,
Xxxxx, XX 00000-0000 (“nFinanSe”), and Xxxxx X. Xxxxxx, an individual
having an address at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxx xx Xxxxxxx,
XX 00000 (“Guarantor”).
WHEREAS, nFinanSe is applying
for licensure in 44 states and Washington, D.C., to be licensed as a money
transmitter; and
WHEREAS, each state in which
nFinanSe seeks licensure requires a bond; and
WHEREAS, the bonds are
initially set at an aggregate amount of $7,191,000; and
WHEREAS, the bonding company,
International Fidelity Insurance Company (“Surety”), has required that the bonds
be cash collateralized at approximately 25% of the face amount of the bond;
and
WHEREAS, nFinanSe has obtained
a letter of credit (the “Letter of Credit”) in favor of the bonding company with
National Penn Bank (“Bank”); and
WHEREAS, Bank has required
nFinanSe to provide acceptable guaranty or place other acceptable collateral
with the Bank in the face amount of the letter of credit (the “Collateral”);
and
WHEREAS, nFinanSe has
requested of Guarantor to, and Guarantor has agreed to, place the Collateral on
deposit with the Bank in exchange for the promises contained
herein.
NOW, THEREFORE, in
consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Guaranty. Guarantor hereby
agrees to provide the necessary guaranties and to execute all documents required
by the Bank to operate as security for nFinanSe’s obligations on the Line of
Credit.
2. Consideration. In consideration for
Guarantor’s agreement to provide the Collateral and to execute the Bank
documents, nFinanSe hereby agrees to pay to Guarantor a quarterly sum equal to
2% of the amount of the Collateral, in arrears, by the issuance of warrants to
purchase the common stock of the Company at fair market value, with a exercise
price equal to the price of the shares of common stock of nFinanSe at the close
of business as of the date hereof.
Pro rata
payments will be made for any quarter in which either the Collateral is held by
Bank for less than the full quarter or in the event there is an adjustment in
the amount of the Collateral in any quarter. Issuance will be made to
the address directed by Guarantor.
824589-2
3. Indemnification.
(a) Collateral
Event. In the event that
Bank, for any reason, draws upon the Collateral or provides notice to Guarantor
of its intent to draw upon the Collateral (an “Event”), Guarantor will provide
immediate notice to nFinanSe of such Event. nFinanSe shall, within 10
days of the receipt of such notice from Guarantor, do one of the following, at
its discretion:
i. Pay
directly to Bank any sum sought by Bank; or
ii. Provide
such additional collateral to Bank to prevent Bank from drawing upon the
Collateral; or
iii. In the
event that Bank draws upon the Collateral, pay to Guarantor any sum drawn plus
an amount equal to 5% of the sum drawn as a penalty.
(b) Hold
Harmless.
nFinanSe agrees to protect, indemnify and hold harmless Guarantor and his
heirs, successors and assigns from and against all claims, actions of any nature
arising from this Agreement, including, but not limited to any loss of the
Collateral.
4. Term and
Termination.
(a) Term. This
Agreement shall be for the term beginning on the date hereof and terminating on
February 15, 2009 and shall automatically renew for an additional six (6) months
unless terminated as otherwise provided herein.
(b) Replacement.
At least fourteen days prior to the Letter of Credit expiration, nFinanSe hereby
agrees to post acceptable collateral to replace the Collateral of the Guarantor
or to replace the Letter of Credit with a new letter of credit acceptable to
Surety and have the Letter of Credit promptly returned to the Bank by
Surety.
(c) Termination
Without Cause. nFinanSe may
terminate this Agreement upon 180 days notice to the Guarantor. In the
event that nFinanSe is able to secure a guaranty agreement or other opportunity
to obtain Collateral that the Board of Directors of nFinanSe concludes is more
favorable to nFinanSe than this Agreement, nFinanSe may terminate this agreement
upon 30 days notice to Guarantor.
(d) Termination
for Cause. Either party may
terminate this Agreement for breach of the Agreement, upon 30 days notice with
right to cure.
5. Miscellaneous.
(a) Notices.
All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission, telexed or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice; provided that notices of a change
of address shall be effective only upon receipt thereof):
824589-2
2
If to nFinanSe, to:
0000 Xxxxxxx Xxxx Xxxxx
Xxxxx
000
Xxxxx,
XX 00000-0000
If to Guarantor, to:
0000 Xxxxx Xxxxxx
Xxxxx
000
Xxxx xx
Xxxxxxx, XX 00000
or to
such other address as such party shall have specified by notice in writing to
the other parties.
(b) Governing
Law.
This Agreement has been negotiated and prepared and will be performed in the
State of Florida, and the validity, construction and enforcement of, and the
remedies under, this Agreement shall be governed in accordance with the laws of
the state of Florida (except any choice of law provisions of Florida law shall
not apply if the law of a state or jurisdiction other than Florida would apply
thereby).
(c) Venue:
Process.
The parties to this Agreement agree that jurisdiction and venue shall properly
lie in the Thirteenth Judicial Court of the State of Florida, in and for
Hillsborough County, Florida, or in the United States District Court for the
Middle District of Florida, with respect to any legal proceedings arising from
this Agreement. The parties further agree that the mailing of any process shall
constitute valid and lawful process against them and further agree to bring all
legal proceedings arising under this Agreement only in the courts listed
above.
(d) Attorneys'
Fees and Costs. Should any party employ
an attorney or attorneys to enforce any provision(s) hereof, or to protect its
interest in any matter involving, arising out of, or otherwise related to this
Agreement, the prevailing party (in the event that litigation ensues) shall be
entitled to recover from the nonprevailing party all reasonable fees and costs,
charges, and expenses incurred, including reasonable attorneys' fees and costs
expended in connection therewith, whether from the initial request for redress
through trial, appeal, and collection.
(e) Waiver of
Compliance: Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with any
obligation, covenant, agreement or condition herein may be waived by the party
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing to the addresses set
forth in Article 5(a) herein.
(f) Severability. If any provision or
portion of this Agreement shall become invalid or unenforceable for any reason,
there shall be deemed to be made such minor changes in such provision or portion
as are necessary to make it valid or enforceable. The invalidity or
unenforceability of any provision or portion hereof shall not affect the
validity or enforceability of the other provisions or portions
hereof.
824589-2
3
(g) Assignment. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations of either
party hereto shall be assigned without the other party’s prior written consent,
which consent shall not be unreasonably withheld. Upon the death of
Guarantor, this Agreement shall be assignable to the estate of Guarantor without
approval nFinanSe.
(h) Amendment.
No amendment to this Agreement shall be effective unless it is in writing,
attached to, or made a part of this Agreement and is executed by a duly
authorized representative of the party against whom enforcement of such
Amendment is being sought.
(i) Gender
and Number. All words or terms used
in this Agreement, regardless of the number or gender in which they are used,
shall be deemed to include any other number and any other gender as the context
may require. “Hereof”, “herein”, and “hereunder” and words of similar import
shall be construed to refer to this Agreement as a whole, and not to any
particular article, section, paragraph or provision, unless expressly so
stated.
(j) Entire
Agreement. This Agreement, including any schedules hereto, upon the full
and complete execution thereof, and any other documents, certificates and
instruments referred to herein, embodies the entire agreement and understanding
of the parties hereto in respect of the transactions contemplated by this
Agreement. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such transactions.
(k) Counterparts.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
(l) Titles. Titles or headings are
not part of this Agreement and shall have no effect on the construction or legal
effect of this Agreement.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
|
|
||
|
By:
|
/s/
X. X. Xxxxxxxx
|
|
|
As
Its:
|
EVP
|
|
|
Guarantor
|
||
|
By:
|
/s/ Xxxxx X.
Xxxxxx
|
|
|
Xxxxx
X. Xxxxxx
|
||
824589-2
4
