FIRST AMENDMENT
EXECUTION
COPY
FIRST
AMENDMENT
TO
THIS FIRST AMENDMENT TO LOAN AND SECURITY
AGREEMENT (this “Agreement” or “First Amendment”), is entered into as of
December 17, 2010 (the “Effective Date”) by and between:
GLOBAL AXCESS CORP, a Nevada corporation, whose
address is: 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000; NATIONWIDE MONEY SERVICES, INC., a Nevada
corporation, whose address is: 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxxx,
Xxxxxxx 00000; NATIONWIDE NTERTAINMENT SERVICES,
INC., a Nevada corporation, whose address is: 0000 Xxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxxxxx, Xxxxxxx 00000; EFT
INTEGRATION, INC., a Florida
corporation, whose address is: 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxxx,
Xxxxxxx 00000, (collectively, the “Borrowers”); and FIFTH THIRD BANK, an Ohio Banking corporation,
with an address at 0000 Xxx Xxxx Xxxx., Xxxxx 000, Xxxxxxxxxxxx, XX 32257(the
“Bank”).
BACKGROUND
A. The
Borrowers and the Bank entered into a Loan and Security Agreement (the “Loan
Agreement”) and related Loan Documents as of June 18, 2010, including a
$2,000,000 Draw Loan Commitment and a $5,000,000 Term Loan Commitment. Borrowers
have now requested additional financing in the amount of $1,650,000 for purposes
other than as stated in the Loan Agreement, including the purchase of assets and
customer contracts from FMiATM, Inc. and Tejas Video Partners, Ltd. to be used
in connection with Borrowers’ ongoing business, which purchases and uses are to
be subject to the reasonable approval of the Bank in accordance with the terms
and conditions of the Loan Agreement and related Loan Documents, including all
of the financial covenants stated therein.
B. Pursuant
to the Borrowers’ request, the Bank is willing to extend such financial
accommodation to the Borrowers under the terms and conditions set forth in the
Loan Agreement and related Loan Documents, as amended by this First
Amendment.
In
consideration of the foregoing and the mutual agreements hereinafter set forth,
the Borrowers and the Bank hereby agree to supplement and amend the Loan
Agreement to reflect the terms, covenants and conditions of this Agreement, as
hereinafter provided.
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1.
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DEFINITIONS.
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1.1 Capitalized Terms.
Capitalized terms not otherwise defined herein shall continue to have the
meanings given them in the Loan Documents as such term is defined in the Loan
Agreement.
1.2 Modifications to Defined
Terms. For the purposes of this
First Amendment, the following capitalized words and phrases are modified as set
forth below.
“Acquisition
Agreements” shall mean the customer agreements acquired or to be
acquired by Borrower from FMiATM, Inc. (“FMi”) and Tejas Video Partners, Ltd.
(“Tejas”) as more particularly described on Schedule
6.1 hereto.
“Acquisition
Assets” shall mean the ATM and/or DVD kiosks acquired by Borrower
from FMi and/or Tejas as more particularly described on Schedule
6.2 hereto.
“Draw
Loan” shall mean the sum of $1,650,000 available for disbursement
to the Borrowers under advances made pursuant to this First Amendment, each
advance as evidenced by a Draw Note in the principal face amount of such
advance.
“Draw
Loan Commitment” shall also include
the sum of $1,650,000 as provided in this First Amendment.
“Draw Loan
Maturity Date” will mean December 15, 2013, which is the
expiration of the Draw Loan Commitment under this First Amendment.
“Draw Note Maturity Date” with
respect to the Draw Notes provided for pursuant to this First Amendment shall be
a date that is the earlier of (i) 36 months following the date of such Draw Note
and (ii) expiration or earlier termination of the customer agreement(s) that
were acquired with the proceeds of such Draw Note, but in any event not later
than the Draw Loan Maturity Date.
“Draw
Note” means each Draw Note provided for in this First Amendment,
evidencing each advance under the Draw Loan.
“Draw Note
Interest Rate” for the Draw Notes provided for in this First
Amendment shall continue to be the Libor Rate.
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2.
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COMMITMENT OF THE
BANK.
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Subject
to the remaining provisions of the Loan Agreement, as amended by this Agreement,
the Bank agrees to make the Draw Loan available to the Borrowers in accordance
with the following conditions:
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2.1
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Draw
Loan.
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(a)
Draw
Loan Commitment. Subject to the Bank’s further approval, including
Borrower’s pledge to the Bank of a first security interest in the Acquisition
Agreements and Acquisition Assets in form and substance as approved by the Bank
with respect to each draw and in reliance upon the continuing representations
and warranties of the Borrowers set forth herein and in the Loan Agreement and
related Loan Documents, the Bank agrees to make the Draw Loan available at such
times as the Borrowers may from time to time request until, but not including,
the Draw Loan Maturity Date; provided, however, that the aggregate principal
balance of all Draw Loans outstanding at any time shall not exceed the combined
Draw Loan Availability under the Loan Agreement and this First
Amendment.
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(b)
Draw Loan Interest and
Principal Payments. Principal and interest payable under the Draw Notes
shall be paid in monthly installments of principal plus interest fully amortized
over the term of each Draw Note with the final payment of principal and accrued
interest due and payable on the Draw Note Maturity Date for such Draw Note, or
upon earlier acceleration of such Draw Note. The Draw Loan shall be used for the
purposes stated in Preamble A of this
First Amendment, subject to further approval of the Bank.
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3.
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CONDITIONS OF
BORROWING.
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Notwithstanding
any other provision of the Loan Agreement as amended by this Agreement, the Bank
shall not be required to disburse or make all or any portion of the Draw Loan if
any of the following conditions shall have occurred.
3.1 Loan Documents. The
Borrowers shall have failed to execute and deliver to the Bank any of the
following Loan Documents (collectively, the “Loan Documents”), all of which must
be satisfactory to the Bank in form, substance and execution:
(a) First Amendment to Loan
Agreement. Two copies of this First
Amendment duly executed by Borrowers.
(b) Draw Note. With
respect to each disbursement under the Draw Loan, a Draw Note in the principal
face amount of such disbursement duly executed by the Borrowers, in the form
attached hereto as Exhibit
A.
(c) Collateral Assignment of Contracts and Additional Documents.
(i) Two
copies of a Collateral Assignment of Contracts (in the form attached hereto as
Exhibit B) assigning to Bank for
collateral security purposes all FMi and Tejas Customer Agreements relating to
their ATM and DVD business as required by the Bank, in its sole discretion, in
form, substance and execution approved by the Bank; and
(ii) Such
other agreements, certificates, financial statements, schedules, resolutions,
opinions of counsel, notes and other documents relating to the Draw Loan which
are provided for hereunder or which the Bank shall reasonably
require.
(d) Documentary Stamps/Taxes. Borrowers shall
also be responsible for paying all documentary stamp taxes, recording and / or
filing fees, taxes, intangible taxes, and similar obligations imposed on the
disbursements of the Draw Loan and the securing of the Bank’s security interest
in the Acquisition Collateral under this First Amendment.
3.2 Event of Default. Any
Event of Default, or any event which, with notice or lapse of time, or both
would constitute an Event of Default, shall have occurred and be
continuing.
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3.3 Adverse Changes. A
material adverse change in the financial condition or affairs of the Borrowers,
as determined in the Bank’s sole and complete discretion, shall have
occurred.
3.4 Litigation. Any litigation or governmental proceeding shall
have been instituted against the Borrowers or any of its officers or
shareholders which in the discretion of the Bank, reasonably exercised,
materially adversely affects the financial condition or continued operation of
the Borrowers.
3.5 Representations and
Warranties. Any representation or warranty of the Borrowers contained
herein or in any Loan Document, including this First Amendment, shall be untrue
or incorrect in any material way as of the date of any Loan as though made on
such date, except to the extent such representation or warranty expressly
relates to an earlier date.
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4.
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INSTRUMENTS EVIDENCING
LOANS.
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4.1
Draw Note. The
Draw Loan shall be evidenced by Draw Notes (together with any and all renewal,
extension, modification or replacement notes executed by Borrowers and delivered
to the Bank and given in substitution therefor, each a “Draw Note”) in the form
of Exhibit
A attached hereto, duly executed by the Borrowers and payable to the
order of the Bank in the amount of each disbursement of the Draw Loan. At the
time of the initial disbursement of the Draw Loan and at each time an additional
disbursement shall be requested hereunder or a repayment made in whole or in
part thereon, an appropriate notation thereof shall be made on the books and
records of the Bank. All amounts recorded shall be, absent demonstrable error,
conclusive and binding evidence of (i) the principal amount of the Draw Loans
advanced hereunder, (ii) any unpaid interest owing on the Draw Loan, and (iii)
all amounts repaid on the Draw Loan. The failure to record any such amount or
any error in recording such amounts shall not, however, limit or otherwise
affect the obligations of the Borrowers under the Draw Note to repay the
principal amount of the Draw Loans, together with all interest accruing
thereon.
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5.
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MANNER OF
BORROWING.
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Subject
to the remaining provisions of the Loan Agreement, as amended by this Agreement,
disbursements of the Draw Loan shall be subject to the following
conditions:
5.1
Draw Loan. The Draw Loan shall
be made available to the Borrowers upon any written, verbal, electronic,
telephonic or telecopy loan request which the Bank in good faith believes to
emanate from a properly authorized representative of the Borrowers, whether or
not that is in fact the case. Each such request shall be effective upon receipt
by the Bank, shall be irrevocable, and shall specify the date and the requested
amount of borrowing for the disbursement. A request for a disbursement under the
Draw Loan must be (i) received by the Bank no later than 11:00 a.m.
Jacksonville, Florida time, three (3) days before the day it is to be funded.
The proceeds of each disbursement shall be made available at the office of the
Bank by credit to the account of the Borrowers or by other means requested by
the Borrowers and acceptable to the Bank. Borrowers do hereby irrevocably
confirm, ratify and approve all such advances by the Bank and do hereby
indemnify the Bank against losses and expenses (including court costs,
attorneys’ and paralegals’ fees) and shall hold the Bank harmless with respect
thereto.
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6.
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GRANT OF
SECURITY FOR THE OBLIGATIONS.
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6.1 Security
for Obligations. As additional security for the payment of the
Obligations, including those arising from and in any way related to the Draw
Loan, Borrowers do hereby irrevocably pledge, assign, transfer, hypothecate and
deliver to the Bank and do hereby grant and hypothecate to the Bank a continuing
and unconditional security interest in and to any and all property of Borrowers,
of any kind or description, tangible or intangible, whether now existing or
hereafter arising or acquired, including, but not limited to, the kiosk assets
and customer contracts acquired by Borrowers from FMi and Tejas (the “Acquisition
Agreements” and “Acquisition
Assets”) as-more particularly set forth on Schedule
6.1 and Schedule
6.2 of
the this First Amendment (all of which assets, along with the products and
proceeds therefrom) are also individually and collectively referred to as “Acquisition Collateral”).
6.2 Cross-Collateral. Any Collateral of Borrowers pledged or secured
under any other agreements with the Bank, shall secure all of the Obligations
hereunder and the Acquisition Collateral pledged to the Bank under this First
Amendment shall secure all of the Obligations to the Bank under any other Loan
Documents heretofore or hereafter existing.
6.3 Assignment
of Contracts, Leases, and
Agreements.
(a) In
addition to the Acquisition Collateral described in this Section 6 and its
subparts as referenced above and in order to further secure the payment of the
Loans and Borrowers’ Obligations under the Loan Documents now or hereafter
existing between Borrowers, hereinafter referred to as Assignors, and the Bank,
hereinafter referred to as Assignee, and as an essential and integral part of
this First Amendment, and in consideration of the making of the $1,650,000 Draw
Loan, and for other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the said Assignors do hereby immediately and absolutely
sell, assign, transfer, convey and set over unto the Assignee, its successors
and assigns, all right, title, interest and privileges which the Assignors have
and may have in any and all contracts, leases, and agreements now existing or
hereafter made with respect to the placement, rental and servicing of ATM and/or
DVD kiosks purchased by Borrowers from FMi and/or Tejas, as particularly
identified on Schedule
6.1 (collectively the “Acquisition
Agreements”), including all of the rents, issues, income, revenue, and
profits due and becoming due under the Acquired Agreements. The acceptance of
this Assignment and the collection of rents, issues, income, revenue, payments,
or profits under the Acquired Agreements hereby assigned shall not constitute a
waiver of any rights of the Assignee under the terms of the Loan
Documents.
(b) With
respect to Acquired Agreements, Borrowers covenant to the Bank that, upon the
renewal or extension of any of the customer agreements that Borrower acquires
from FMi, Borrowers shall obtain, and deliver to the Bank, a written consent of
the customer party to such agreement (the “Customer Consent”) in form and
substance reasonably satisfactory to the Bank, consenting to the collateral
assignment of such customer agreement to the Bank. Borrowers’ renewal or
extension of any such customer agreement without obtaining and providing to the
Bank such Customer Consent shall be an Event of Default, entitling the Bank to
exercise all rights and remedies available to the Bank upon an Event of
Default.
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7.
REPRESENTATIONS AND
WARRANTIES. In addition to the representations and warranties as set
forth in the Loan Agreement, Borrowers make the following representation and
warranty to the Lender:
7.1 Collateral
Representations. (i) one or more of
Borrowers are the sole owner of the Acquisition Collateral, free from any Lien
of any kind, other than the Lien of the Bank; and (ii) except as previously
disclosed to the Bank, the Acquired Agreements have been duly assigned by FMi
and Tejas, as applicable, to Borrowers and are valid and enforceable against
their customers.
8.
MISCELLANEOUS.
8.1.
Waiver and Release of
Claims. Borrowers represent to the Bank that none of them has any
defense, setoff, claim or counterclaim of any kind or nature whatsoever against
the Bank in connection with the Loan Documents or any extensions, amendments or
modifications thereof or any action taken or not taken by the Bank with respect
thereto. Without limiting the generality of the foregoing, and in consideration
of the Bank’s agreements hereunder, Borrowers hereby release and forever
discharge the Bank, its affiliates and each of their officers, agents,
employees, attorneys, insurers, successors and assigns (collectively the
“Released Parties”), from and against any and all liabilities, rights, claims,
losses, expenses, or causes of action, known or unknown, arising out of any
action or inaction by any of the Released Parties to the date hereof with
respect to this First Amendment or the other Loan Documents, or any matter in
any way related thereto or arising in conjunction therewith. Borrowers also
waive, release, and forever discharge the Released Parties and each of them
from and against any and all known or unknown rights to setoff, defenses,
claims, counterclaims, causes of action and any other bar to the enforcement of
this First Amendment or the other Loan Documents.
8.2 Disclaimer of Reliance. Borrowers expressly disclaim
any reliance on any oral representation made by the Released Parties or any of
them with respect to the subject matter of this First Amendment. Borrowers
acknowledge and agree that the Bank is specifically relying upon the
representations, warranties, releases and agreements contained herein and in the
other Loan Documents, and that this First Amendment is being executed by
Borrowers and delivered to the Bank as an inducement to the Bank to amend the
Loan Agreement as herein provided.
8.3. Terms and Reaffirmation of
Representations and Warranties. All terms and provisions of the Loan
Documents not expressly amended hereby shall remain in full force and effect,
and all representations and warranties, negative covenants, affirmative
covenants and financial covenants made in the Loan Documents are incorporated
herein by reference and reaffirmed as of the date hereof.
8.4 Expenses. Borrowers agree to pay all of the Bank’s
expenses and costs, including without limitation attorneys’ fees and costs
related to the negotiation, preparation and execution of the First Amendment and
in connection with the enforcement of this First Amendment or any of the
Loan
Documents, all of which expenses and costs shall constitute additional
indebtedness of Borrowers pursuant to the Loan Documents.
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8.5 Counterparts. This First Amendment may be signed
in one or more counterparts, each of which shall be deemed an original, and all
of which shall constitute one and the same agreement and shall be binding on and
inure to the benefit of the undersigned and their respective successors and
assigns as if all had signed one instrument.
8.6 Joint and Several
Liability. Borrowers are jointly and severally liable for all Obligations
imposed upon them under the terms of this First Amendment and the Loan
Documents.
IN WITNESS WHEREOF, the parties have executed
this First Amendment to Loan and Security Agreement as of the date first above
written.
BORROWERS:
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a
Nevada corporation
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By:
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Xxxxxx
X. XxXxxxx, President
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NATIONWIDE
MONEY SERVICES, INC.,
a
Nevada corporation
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By:
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Xxxxxx
X. XxXxxxx, President
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NATIONWIDE
NTERTAINMENT SERVICES, INC.,
a
Nevada corporation
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By:
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Xxxxxx
X. XxXxxxx, President
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EFT
INTEGRATION, INC., a Florida corporation
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By:
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Xxxxxx
X. XxXxxxx,
President
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SEE PAGE
8 FOR FIFTH THIRD BANK SIGNATURES
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Continuation
of Signature Page of First Amendment to Loan and Security
Agreement.
BANK:
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FIFTH
THIRD BANK,
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an
Ohio banking corporation
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By:
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Name:
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Title:
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8
Exhibit
A to
FIRST AMENDMENT TO
FORM
OF DRAW NOTE
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$
____________________
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Date:
___________, 201_
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Jacksonville,
Florida
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FOR VALUE RECEIVED, GLOBAL AXCESS
CORP., a Nevada corporation, NATIONWIDE MONEY SERVICES,
INC., a Nevada corporation, NATIONWIDE NTERTAINMENT SERVICES,
INC., a Nevada corporation, and EFT INTEGRATION, INC., a
Florida corporation (collectively “Borrowers”), jointly and severally, promise
to pay to the order of FIFTH
THIRD BANK, an Ohio banking corporation (hereinafter, together with any
holder thereof, the “Bank”), whose address is 0000 Xxx Xxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxxxxxxx, XX 00000, the principal sum of __________________ AND __/100 DOLLARS ($______), with interest from the date of
disbursement until paid in full, on the unpaid principal balance from time to
time hereunder, at the LIBOR Rate, as defined in that certain Loan and Security
Agreement dated June 18, 2010, by and between Borrowers and Bank, as amended by
First Amendment to Loan and Security Agreement dated December__, 2010, and as
further amended, supplemented or modified from time to time (collectively, the
“Loan Agreement”), calculated on the basis of the actual number of days elapsed
in a 360-day year of 12 months of 30 days each, payable in arrears, all payable
in lawful money of the United States of America, which shall be legal tender in
payment of all debts and dues, public and private, at the time of payment, said
principal and interest being payable as follows:
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(a)
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Principal
and accrued interest, fully amortized over the term of this Note, shall be
due and payable in equal monthly installments, commencing on _______,
201_, and continuing on the ____ day of each calendar month thereafter,
through and including ______, 201_.;
and
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(b)
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The
remaining principal balance, together with accrued and unpaid interest
thereon, shall be due and payable in full that date which is the earlier
of (i) 36 months following
the date of this Note and (ii) expiration or earlier termination of the
customer agreement(s) that were acquired with the proceeds of this Note,
as contemplated under the Loan Agreement (either such event being referred
to as the “Draw Note Maturity Date”), but in any event not later than
December 15,
2013 (the “Draw Loan Maturity
Date”).
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Capitalized
words and phrases not otherwise defined herein shall have the meaning assigned
thereto in the Loan Agreement, which by reference thereto is fully incorporated
herein.
This Note
evidences a disbursement under the Draw Loan as provided in the Loan Agreement
to the Loan Agreement, which includes certain terms and conditions under which
the Draw Note Maturity Date or the Draw Loan Maturity Date or any payment hereon
may be accelerated. The holder of this Note is entitled to all of the benefits
and security provided for in the Loan Documents, including the UCC-1 Financing
Statement(s) evidencing a blanket lien on all of the Collateral as more
specifically described in the Loan Documents.
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Principal
and interest shall be paid to the Bank at its address set forth above, or at
such other place as the holder of this Note shall designate in writing to the
Borrowers. The Bank’s disbursement under the Draw Loan, as evidenced by this
Note, and all payments on account of the principal and interest of this Note,
shall be recorded on the books and records of the Bank and the principal balance
as shown on such books and records, or any copy thereof certified by an officer
of the Bank, shall be rebuttably presumptive evidence of the principal amount
owing hereunder.
Except
for such notices as may be required under the terms of the Loan Agreement, the
Borrowers waive presentment, demand, notice, protest, and all other demands, or
notices, in connection with the delivery, acceptance, performance, default, or
enforcement of this Draw Note, and assent to any extension or postponement of
the time of payment or any other indulgence.
The
Bank’s disbursement under the Draw Loan, as evidenced by this Note, has been
made at the Bank’s main office set forth above. This Note shall be governed and
construed in accordance with the laws of the State of Florida, in which state it
shall be performed, and shall be binding upon the Borrowers, and their
respective legal representatives, successors, and assigns.
Wherever
possible, each provision of the Loan Agreement and this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Loan Agreement or this Note shall be prohibited by
or be invalid under such law, such provision shall be severable, and be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of the Loan Agreement or this Note. The
term “Borrowers” as used herein shall mean all parties executing this Note, and
each one of them, and all such parties, their respective successors and assigns,
shall be jointly and severally obligated hereunder.
IN WITNESS
WHEREOF, the Borrowers have executed this Note as of the date set forth
above.
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NATIONWIDE
MONEY SERVICES, INC.,
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a
Nevada corporation
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a
Nevada corporation
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By:
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By:
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Name:
Xxxxxx X. XxXxxxx
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Name:
Xxxxxx X. XxXxxxx
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Title:
President
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Title:
President
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NATIONWIDE
NTERTAINMENT
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EFT
INTEGRATION, INC.,
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SERVICES, INC., a Nevada
corporation
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a
Florida corporation
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By:
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By:
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Name:
Xxxxxx X. XxXxxxx
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Name:
Xxxxxx X. XxXxxxx
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Title:
President
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Title:
President
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Documentary
stamp tax in the amount of $________________ has been paid in connection with
this Note and remitted directly to the Florida Department of
Revenue.
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EXHIBIT
B
COLLATERAL
ASSIGNMENT OF CONTRACTS
THIS
COLLATERAL ASSIGNMENT OF CONTRACTS (this “Agreement” or “Assignment”), is
entered into as of December__, 2010 (the “Effective Date”) by and
between:
GLOBAL
AXCESS CORP, a Nevada corporation, whose address is: 0000 Xxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxxxxx, Xxxxxxx 00000; NATIONWIDE MONEY SERVICES, INC., a Nevada
corporation, whose address is: 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxxx,
Xxxxxxx 00000; NATIONWIDE NTERTAINMENT SERVICES, INC., a Nevada corporation,
whose address is: 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000;
EFT INTEGRATION, INC., a Florida corporation, whose address is: 0000 Xxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000, (collectively, “Assignor” or
“Borrower”); and FIFTH THIRD BANK, an Ohio Banking corporation, with an address
at 0000 Xxx Xxxx Xxxx., Xxxxx 000, Xxxxxxxxxxxx, XX 00000 (the “Assignee” or
“Bank”).
BACKGROUND
A. Borrower
and the Bank entered into a Loan and Security Agreement, dated as of June 18,
2010, and other related Loan Documents, all dated as of June 18, 2010,
including, but not limited to, a $2,000,000 Draw Loan Commitment and a
$5,000,000 Term Loan Commitment. Borrower has now requested additional financing
in the amount of $1,650,000 for purposes other than as stated in said Loan and
Security Agreement, including the purchase of certain assets, customer contracts
and transition services agreements from FMiATM, Inc. (“FMi”) and Tejas Video
Partners, Ltd. (“Tejas”) to be used in connection with Borrower’s ongoing
business (FMi and Tejas are hereinafter referred to, collectively, as the
“Customers”);
B. Pursuant
to Borrower’s request, the Bank is willing to extend such additional financial
accommodation to Borrower under the terms and conditions set forth in that
certain Loan and Security Agreement, dated June 18, 2010, as amended by the
First Amendment to Loan and Security Agreement of even date herewith (as so
amended, the “Loan Agreement”);
C. Pursuant
to said First Amendment to Loan and Security Agreement, the Bank required that
Borrower assign to the Bank for collateral purposes Borrower’s rights under
certain of Borrower’s customer contracts and certain transition services
agreements as more specifically set forth in this Agreement.
In
consideration of the foregoing and the mutual agreements hereinafter set forth,
Borrower and the Bank hereby enter into this Agreement.
1.
Capitalized
Terms. Capitalized terms not otherwise defined herein shall continue to
have the meanings given them in the Loan Documents as such term is defined in
the Loan Agreement.
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2.
Assignment of
Contracts. Borrower, for good and valuable consideration, the
receipt of which is hereby acknowledged, hereby GRANTS, TRANSFERS, CONVEYS,
PLEDGES, and ASSIGNS to the Bank for collateral security purposes all of its
rights, titles, and interests in, to and arising from the following (together
with the right, upon the occurrence of an Event of Default by Borrower, to
collect and receive all revenues, monies, proceeds, benefits, and payments due
and to become due to Borrower and accruing and to accrue unto Borrower under or
by virtue of the same), in each case, pursuant to the terms and provisions of
this Agreement: (i) Borrower’s customer contracts and transition services with
FMi and Tejas, as such contracts and agreements are entered into from and after
the date hereof and as more particularly described on Exhibit A attached
hereto and incorporated herein by reference (collectively, the “Contracts”); and
(ii) any and all amendments, renewals and supplements of said
Contracts.
3.
Grant of Security
Interest. This Agreement is entered into and is made and given as
additional collateral security for the prompt payment when due of the
Obligations of Borrower to the Bank as evidenced or secured by, or otherwise
provided in, the Loan Agreement and any of the other Loan Documents, all of
which have been made by Borrower with or for the benefit of the Bank, whether
such Obligations are now existing or hereafter created, direct or indirect,
absolute or contingent, joint or several, due or to become due, howsoever
created, evidenced or arising and howsoever acquired by the Bank, and any and
all renewals, extensions or refinancings thereof.
4.
Ongoing
Representations and Warranties of Borrower. Borrower represents and
warrants to the Bank, now and continuing throughout the term of this Agreement
(which representations and warranties will survive the delivery of this
Agreement) that: (i) Borrower is the sole owner of its interests in the
Contracts; and (ii) the Contracts are valid and enforceable and have not been
altered, modified or amended in any manner whatsoever.
5.
Additional Representations
and Warranties of Borrower. Borrower further represents and warrants to
the Bank:
(a) The
execution of this Agreement has been duly authorized, consented to, and approved
by Borrower in accordance with the terms of Borrower’s Articles of Incorporation
and By-Laws and all applicable laws;
(b) The
individual executing this Agreement on behalf of Borrower has been duly
appointed and designated and has the requisite authority to execute this
Agreement on behalf of Borrower;
(c) No
authorization, consent, or approval from or of any other person or entity is
necessary or required in connection with the execution and delivery by Borrower
of this Agreement, or in connection with the performance by Borrower of its
obligations hereunder;
(d) Each
of the Customer Contracts: (i) have been properly executed and delivered by or
on behalf the respective Customer; and (ii) constitute the legal, valid and
binding obligations of each of the Customers, enforceable against each of the
Customers in accordance with their respective terms;
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(e) Borrower
has not received notice of any currently pending or threatened litigation or
other claim or charge relating to the Contracts or the Customers;
(f) Borrower
is in compliance with all terms and conditions stated in the
Contracts.
6. Covenants of
Borrower.
(a) Contract
Performance and Assignments. Borrower shall observe and perform
all the obligations imposed upon it under the Contracts, and shall not sell,
transfer, assign, pledge, encumber or mortgage any or all of the Contracts, or
any interest therein, without the prior written consent of the
Bank.
(b) Financing Statements.
Borrower hereby irrevocably authorizes the Bank at any time, and from time to
time, to file in any jurisdiction any initial financing statements and
amendments thereto without the signature of Borrower to perfect the security
interest granted herein by Borrower to the Bank, regardless of whether the
Contracts or any of the rights thereunder fall within the scope of Article 9 of
the Uniform Commercial Code of the jurisdiction wherein such financing statement
or amendment is filed, and containing any such information required by Article 9
of the Uniform Commercial Code of the jurisdiction wherein such financing
statement or amendment is filed. Borrower shall sign and execute alone or with
the Bank any other document or procure any documents and pay any connected
costs, expenses and fees, including court costs and reasonable attorneys’ fees,
necessary to protect the security interest under this Agreement against the
rights, interests or claims of third parties.
(c) Further
Assurances. Borrower shall execute
and deliver at the request of the Bank, all such further assurances,
acknowledgments and certificates for the purposes hereof as the Bank shall from
time to time require.
7. Rights, Duties and
Powers
of the
Bank.
(a)
Rights and
Powers. Upon the occurrence of an Event of Default, Borrower does hereby
irrevocably authorize and empower the Bank to do the following, by and on behalf
of Borrower, and in Borrower’s name, place and stead:
(i)
Remedies. The Bank shall have all the
rights and remedies of a secured party under the applicable Uniform Commercial
Code, including the right to appoint a receiver with court approval, and in
addition to any other rights or remedies it may have hereunder or under the Loan
Agreement. Without limiting the Bank’s rights and remedies, Borrower hereby
irrevocably authorizes and empowers the Bank, at any time after the occurrence
of an Event of Default, in Borrower’s name or in the Bank’s name, to demand,
collect, receive, setoff against, xxx for and give acquaintance for any and all
monies and claims for monies hereby assigned and to exercise any and all rights
and privileges and receive all benefits accorded to Borrower under the Contracts
and to execute other required instruments or to take any action reasonably
deemed necessary or appropriate to protect Borrower’s rights hereunder. All
rights and remedies referred to herein shall be cumulative and
non-exclusive.
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(b) Disclaimer. This
Agreement constitutes an assignment of the rights of Borrower with respect to
the Contracts only and not an assignment or delegation of any duties or
obligations of Borrower with respect thereto and by its acceptance hereof the
Bank does not undertake to perform or discharge and shall not be responsible or
liable for the performance or discharge of any such duties or responsibilities.
Borrower does hereby agree to indemnify and hold the Bank harmless from and
against any and all liabilities, costs, damages and expenses incurred by the
Bank in connection with this Agreement, other than those arising as a result of
the Bank’s negligence or willful misconduct.
(c) Authorization to
Customers. Upon the occurrence
of an Event of Default by Borrower, the Customers under the Contracts are hereby
irrevocably authorized and directed to recognize the claims of the Bank, or the
exercise of any rights and powers granted to the Bank pursuant to this
Assignment, without investigating the reason for any action taken by the Bank
(or duly appointed receiver), or the validity or the amount of indebtedness
owing to the Bank, or the existence of any other event of default under any one
or all of the Loan Documents, or under or by reason of this Assignment, or the
application of such claims to be made by the Bank (or duly appointed
receiver).
8.
Miscellaneous.
(a) Binding Effect. The satisfaction or discharge of any part of
the Obligations shall not in any way satisfy or discharge this Agreement, but
this Agreement shall remain in full force and effect until the date upon which
the Obligations are paid and satisfied in full. This Agreement shall be binding
upon Borrower and its successors and assigns and shall inure to the benefit of
the Bank and its successors and assigns.
(b) Survival. All of the
representations and warranties of Borrower contained in this Agreement shall
survive the execution and delivery of this Agreement and shall be remade on the
date of each borrowing by Borrower from the Bank.
(c) Notices. All notices
and other communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Assignment) shall be given
or made by telecopy, courier or U.S. Mail or in writing and telecopied, mailed
or delivered to the intended recipient at the mailing addresses specified in the
Loan Agreement or, as to any other party, at such other address as shall be
designated by such party in a notice to the other party. All such communications
shall be deemed to have been duly given as provided in the Loan
Agreement.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties have executed this Collateral Assignment of
Contracts as of the date first above written.
BORROWER:
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a
Nevada corporation
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By:
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/s/
Xxxxxx X. XxXxxxx
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Xxxxxx
X. XxXxxxx, President
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NATIONWIDE
MONEY SERVICES, INC.,
a
Nevada corporation
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By:
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/s/
Xxxxxx X. XxXxxxx
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Xxxxxx
X. XxXxxxx, President
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NATIONWIDE
NTERTAINMENT SERVICES, INC.,
a
Nevada corporation
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|
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By:
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/s/
Xxxxxx X. XxXxxxx
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Xxxxxx
X. XxXxxxx, President
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|
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EFT
INTEGRATION, INC., a Florida corporation
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By:
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/s/
Xxxxxx X. XxXxxxx
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Xxxxxx
X. XxXxxxx,
President
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BANK:
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FIFTH
THIRD BANK,
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an
Ohio banking corporation
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By:
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Name:
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Title:
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