FIFTH THIRD BANK Revolving Note
Exhibit
10.9
FIFTH
THIRD BANK
NOTE
No.
______-_______
$3,000,000.00
November
2nd, 2005
1. PROMISE
TO PAY.
On or
before October 31, 2007, Interactive
Intelligence, Inc.,
an
Indiana corporation which has its chief executive office at 0000 Xxxxxxxxxxx
Xxx, Xxxxxxxxxxxx, Xxxxxxx 00000 (“Borrower”) for value received, hereby
promises to pay to the order of Fifth
Third Bank (Central Indiana),
a
Michigan banking corporation located at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxx 00000 (together with its successors and assigns, the
“Lender”) the sum of the lesser of (a) Three Million and no/100ths Dollars
($3,000,000.00) and (b) the Borrowing Base (as defined in paragraph 9 hereof)
(the “Principal Sum”), plus interest as provided herein, less such amounts as
shall have been repaid in accordance with this promissory note (this “Note”).
The outstanding balance of this Note shall appear on a supplemental bank
record
and is not necessarily the face amount of this Note, which record shall evidence
the balance due pursuant to this Note at any time. As used herein, “Local Time”
means the time at the office of Lender specified in this Note.
(a) Principal
and interest payments shall be made at Lender’s address above unless otherwise
designated by Lender in writing. Each payment hereunder shall be applied
first
to advanced costs, charges and fees, then to accrued interest, and then to
principal, which will be repaid in inverse chronological order of
maturity.
(b) The
loan
evidenced by this Note is a revolving line of credit. The proceeds of this
Note
shall be made in the form of direct Advances (as this term and others are
defined in Section 9 of this Note) which shall be made available to Borrower
by
Lender upon any written, electronic, telecopy or verbal loan request (provided
that any verbal loan request is promptly confirmed in writing), which Xxxxxx
in
good faith believes to emanate from a properly authorized representative
of
Borrower, whether or not that is in fact the case. All Advances made hereunder
shall be conclusively presumed to have been made by Xxxxxx to or for the
benefit
of Borrower. The proceeds of the loan evidenced hereby may be advanced, repaid
and readvanced, in partial amounts, during the term of this Note and prior
to
the Maturity Date. Lender shall make each such advance to Borrower upon Xxxxxx’s
receipt of Xxxxxxxx’s request for disbursement and disbursement instructions,
which shall be in such form as Lender requires. Xxxxxx is entitled to rely
in
good faith on any oral, telephonic or electronic mail communication requesting
an advance or providing disbursement instructions, or both, which Xxxxxx
receives from any person reasonably believed to be Xxxxxxxx’s authorized
representative. The entire principal balance outstanding hereunder, together
with all accrued and unpaid interest and any other charges, advances and
fees,
if any, shall be due and payable in full on the earlier of the Maturity Date
or
upon acceleration of this Note.
2. INTEREST.
(a) Prior
to
the Maturity Date, interest will accrue on the unpaid balance of the Principal
Sum at a variable rate of interest per annum (the “Note Rate”), which shall
change in the manner set forth below, at Borrower's option:
(i) equal
to
one and one-quarter percent (1.25%) in excess of the LIBO Rate, such sum
to be
rounded up, if necessary, to the nearest whole multiple of one-sixteenth
of one
percent (1/16 of 1.0%) per annum; or
(ii) equal
to
the Prime Rate minus
one and
one-half percent (1.50%).
(b) If
the
obligation evidenced by this Note is not paid at maturity, whether maturity
occurs by lapse of time, demand, acceleration or otherwise, the unpaid balance
of the Principal Sum and any unpaid interest shall, thereafter until paid,
bear
interest at the Default Rate.
(c) Interest
shall be calculated based on a 360-day year, charged for the actual number
of
days elapsed, and shall be payable on the first (1st) day of each month
beginning on December 1, 2005.
(d) Notwithstanding
any provision to the contrary in this Note, in no event shall the interest
rate
charged on the Principal Sum exceed the maximum rate of interest permitted
under
applicable state and/or federal usury law. Any payment of interest that would
be
deemed unlawful under applicable law for any reason shall be deemed received
on
account of, and will automatically be applied to reduce, the principal sum
outstanding and any other sums (other than interest) due and payable to Lender
under this Note, and the provisions hereof shall be deemed amended to provide
for the highest rate of interest permitted under applicable law.
3. SECURITY.
(a) The
following provides additional security for the payment of the obligations
evidenced hereby, and of all other obligations and liabilities of Borrower
to
the Lender, whether such obligations and liabilities are now existing or
hereafter arising. Borrower has granted the Lender a security interest in
certain of Xxxxxxxx’s securities pursuant to that certain Collateral Security
and Pledge Agreement dated of even date herewith (as the same may be amended,
restated or replaced from time to time, the “Security Agreement”), including all
substitutions and additions thereto, and the proceeds thereof including
insurance proceeds (all of the foregoing, together with any other property
in
which Lender shall at any time be given a security interest, shall hereinafter
be referred to as the “Collateral”).
(b) If,
at
the time of payment in full of this Note and discharge hereof, Borrower shall
be
then directly, indirectly or contingently liable to the Lender as maker,
endorser, surety or guarantor of any other note, bill of exchange, indebtedness
or other instrument, due or to become due, now existing or hereafter arising
and
regardless of how evidenced, then the Lender may continue to hold any of
the
Collateral as security therefor, even though this Note shall have been
surrendered to Borrower. The Lender shall not be bound to take any steps
necessary to preserve any rights in the Collateral against prior parties.
If any
obligation evidenced by this Note is not paid when due, the Lender may, at
its
option, demand, set-off, sue for, collect or make any compromise or settlement
it deems desirable with reference to the Collateral, and shall have the rights
of a secured party under the law of the State of Indiana, and Borrower shall
be
liable for any deficiency.
(c) This
Note
is also secured by any of Borrower’s funds on deposit with the Lender. The
failure to reference in this Note any security for this Note shall not, however,
be construed to invalidate any security interest, pledge, mortgage or other
lien
which pursuant to the terms of any agreement or instrument creating such
lien
secures this Note or any or all obligations of Borrower to Lender
generally.
4. USE
OF
PROCEEDS.
Borrower certifies that the proceeds of this loan are to be used for business
purposes to provide working capital for Borrower’s operations.
5. COMMITMENT
FEE.
Xxxxxx
has waived the commitment fee for the Loan.
6. REPRESENTATIONS
AND WARRANTIES.
Borrower hereby warrants and represents to Lender the following:
(a) Organization
and Qualification.
Borrower is a corporation validly existing under the laws of Indiana, has
the
power and authority to carry on its business and to enter into and perform
all
documents relating to this loan transaction, and is qualified and licensed
to do
business in each jurisdiction in which such qualification or licensing is
required. All information provided to Lender with respect to Borrower and
its
operations is true and correct.
(b) Due
Authorization.
The
execution, delivery and performance by Borrower of the Loan Documents have
been
duly authorized by all necessary action by its board of directors, and shall
not
contravene any law or any governmental rule or order binding on Borrower,
nor
violate any agreement or instrument by which Borrower is bound, nor result
in
the creation of a Lien on any assets of Borrower except the Lien granted
to
Lender. Xxxxxxxx has duly executed and delivered to Lender the Loan Documents
and they are valid and binding obligations of Borrower enforceable according
to
their respective terms, except as limited by equitable principles and by
bankruptcy, insolvency or similar laws affecting the rights of creditors
generally. No notice to, or consent by, any governmental body is needed in
connection with this transaction.
(c) Litigation.
Except
for those matters previously disclosed by Borrower to Lender [none of which
matters, individually or in the aggregate, involve the possibility of materially
and adversely affecting the properties, business, prospects, profits or
condition (financial or otherwise) of Borrower or its subsidiaries or the
ability of Borrower to perform Borrower’s obligations under the Loan Documents],
there are no suits or proceedings pending or threatened against or affecting
Borrower, and no proceedings before any governmental body are pending or
threatened against Borrower.
(d) Business.
Borrower is not a party to or subject to any agreement or restriction that
may
have a material adverse effect on Borrower’s business, properties or prospects.
Borrower has all franchises, authorizations, patents, trademarks, copyrights
and
other rights necessary to advantageously conduct its business. They are all
in
full force and effect and are not in known conflict with the rights of
others.
(e) Licenses,
etc.
Borrower
has obtained any and all licenses, permits, franchises, governmental
authorizations, patents, trademarks, copyrights or other rights necessary
for
the ownership of its properties and the advantageous conduct of its business.
Borrower possesses adequate licenses, patents, patent applications, copyrights,
trademarks, trademark applications, and trade names to continue to conduct
its
business as heretofore conducted by it, without any conflict with the rights
of
any other person or entity. All of the foregoing are in full force and effect
and none of the foregoing are in known conflict with the rights of
others.
(f) Laws
and Taxes.
Borrower is in material compliance with all laws, regulations, rulings, orders,
injunctions, decrees, conditions or other requirements applicable to or imposed
upon Borrower by any law or by any governmental authority, court or agency.
Xxxxxxxx has filed all required tax returns and reports that are now required
to
be filed by it in connection with any federal, state and local tax, duty
or
charge levied, assessed or imposed upon Borrower or its assets, including
unemployment, social security, and real estate taxes. Borrower has paid all
taxes which are now due and payable. No taxing authority has asserted or
assessed any additional tax liabilities against Borrower which are outstanding
on this date, and Borrower has not filed for any extension of time for the
payment of any tax or the filing of any tax return or report.
(g) Title.
Xxxxxxxx has good and marketable title to the assets reflected on the most
recent balance sheet submitted to Lender, free and clear from all liens and
encumbrances of any kind, except for (i) current taxes and assessments not
yet
due and payable, (ii) liens and encumbrances, if any, reflected or noted
on such
balance sheet or notes thereto, (iii) assets disposed of in
the
ordinary course of business, and (iv) any security interests, pledges,
assignments or mortgages granted to Lender to secure the repayment or
performance of the
Obligations (collectively, the “Permitted Liens”).
(h) Subsidiaries
and Joint Ventures.
Except
for the subsidiaries listed in the attached Exhibit
“A,”
Borrower
has no subsidiaries and is not a party to any joint venture agreement, or
partnership agreement with another entity.
7. AFFIRMATIVE
COVENANTS.
Borrower covenants with, and represents and warrants to, Lender that, from
and
after the execution date of the Loan Documents until the Obligations are
paid
and satisfied in full:
(a) Financial
Statements.
Borrower shall maintain a standard and modern system for accounting and shall
furnish to Lender:
(i) Within
sixty (60) days after the end of each quarter, an as-filed copy of Borrower’s
Form 10-Q;
(ii) Within
one-hundred twenty (120) days after the end of each fiscal year, a copy of
Xxxxxxxx’s financial statements audited by independent certified public
accountants reasonably acceptable to Lender, including a balance sheet and
a
statement of income and retained earnings all prepared in accordance with
GAAP
on a basis consistent with prior years unless specifically noted
thereon;
(iii) With
the
statements submitted above, a certificate signed by an officer of Xxxxxxxx,
stating he or she is familiar with all documents relating to Xxxxxx and that
no
Event of Default specified herein, nor any event which upon notice or lapse
of
time, or both would constitute such an Event of Default, has occurred, or
if any
such condition or event existed or exists, specifying it and describing what
action Borrower has taken or proposes to take with respect thereto (a
“Compliance Certificate”);
(iv) Within
thirty (30) days after the end of each month, a copy of the account statement
for the Pledged Account for the preceding month, which reflects the current
market value of the securities held therein;
(v) Within
thirty (30) days after the end of each month, a Borrowing Base Certificate,
in
form and substance acceptable to Lender and signed by an officer of Borrower;
and
(vi) Immediately
upon any officer of Borrower obtaining knowledge of any condition or event
which
constitutes or, after notice or lapse of time or both, would constitute an
Event
of Default, a certificate of such person specifying the nature and period
of the
existence thereof, and what action Borrower has taken or is taking or proposes
to take in respect thereof.
All
of
the statements referred to in (a) above shall be in conformance with generally
accepted accounting principles and give representatives of Lender access
thereto
at all reasonable times, including permission to examine, copy and make
abstracts from any such books and records and such other information which
might
be helpful to Lender in evaluating the status of the loans as it may reasonably
request from time to time.
(b) Insurance.
At its
own cost, Xxxxxxxx shall obtain and maintain insurance against (i) loss,
destruction or damage to its properties and business of the kinds and in
the
amounts customarily insured against by companies with established reputations
engaged in the same or similar business as Borrower and, in any event,
sufficient to fully protect Lender’s interest in the Collateral, and (ii)
insurance against public liability and third party property damage of the
kinds
and in the amounts customarily insured against by corporations with established
reputations engaged in the same or similar business as Borrower. All such
policies shall
(A)
be issued by financially sound and reputable insurers, (B) name Xxxxxx as
an
additional insured and, where applicable, as loss payee under a Lender loss
payable endorsement satisfactory to Lender, and (C) shall provide for thirty
(30) days written notice to Lender before such policy is altered or canceled.
All of the insurance policies required hereby shall be evidenced by one or
more
certificates of insurance delivered to Lender by Borrower on the Closing
Date
and at such other times as Lender may request from time to time.
(c) Taxes.
Borrower shall pay when due all taxes, assessments and other governmental
charges imposed upon it or its assets, franchises, business, income or profits
before any penalty or interest accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for
sums
which by law might be a lien or charge upon any of its assets, provided that
(unless any material item or property would be lost, forfeited or materially
damaged as a result thereof) no such charge or claim need be paid if it is
being
diligently contested in good faith, if Lender is notified in advance of such
contest and if Borrower establishes an adequate reserve or other appropriate
provision required by generally accepted accounting principles and deposits
with
Lender cash or bond in an amount acceptable to Lender.
(d) Compliance
with Laws.
Borrower shall comply with all federal, state and local laws, regulations
and
orders applicable to Borrower or its assets including but not limited to
all
environmental laws, in all respects material to Borrower’s business, assets or
prospects and shall immediately notify Lender of any violation of any rule,
regulation, statute, ordinance, order or law relating to the public health
or
the environment and of any complaint or notifications received by Borrower
regarding to any environmental or safety and health rule, regulation, statute,
ordinance or law. Borrower shall obtain and maintain any and all licenses,
permits, franchises, governmental authorizations, patents, trademarks,
copyrights or other rights necessary for the ownership of its properties
and the
advantageous conduct of its business and as may be required from time to
time by
applicable law.
(e) Depository/Banking
Services.
Lender
shall be the principal depository in which substantially all of Borrower’s funds
are deposited, and the principal bank of account of Borrower, as long as
any
Obligations are outstanding, and Borrower shall grant Lender the first and
last
opportunity to provide any business banking services required by Borrower
and
its Affiliates.
(f) Other
Amounts Deemed Loans.
If
Borrower fails
to
pay any tax, assessment, governmental charge or levy or to maintain insurance
within the time permitted or required by this Note, or to discharge any Lien
prohibited hereby, or to comply with any other Obligation, Lender may, but
shall
not be obligated to, pay, satisfy, discharge or bond the same for the account
of
Borrower. To the extent permitted by law and at the option of Lender, all
monies
so paid by Xxxxxx on behalf of Borrower shall be deemed Obligations and
Borrower’s payments under this Note may be increased to provide for payment of
such Obligations plus interest thereon.
(g) Further
Assurances.
Borrower shall execute, acknowledge and deliver, or cause to be executed,
acknowledged or delivered, any and all such further assurances and other
agreements or instruments, and take or cause to be taken all such other action,
as shall be reasonably necessary from time to time to give full effect to
the
Loan Documents and the transactions contemplated thereby.
8. NEGATIVE
COVENANTS.
Borrower
covenants with and represents and warrants to Lender that, from and after
the
execution date hereof until the Obligations are paid and satisfied in
full:
(a) Borrower
shall not permit the market value of the Pledged Account to be less than
Three
Million Five Hundred Thousand and 00/100ths Dollars ($3,500,000.00);
and
(b) Borrower
shall not incur, create, assume or permit to exist any additional indebtedness
for borrowed money (other than the Obligations) or indebtedness on account
of
depositions, advances or progress payments under contracts, notes, bonds,
debentures or similar obligations or other indebtedness evidenced by notes,
bonds, debentures, capitalized leases or similar obligations.
9. DEFINITIONS.
Certain
capitalized terms used and not otherwise defined herein have the meanings
set
forth in the Security Agreement or in the other Loan Documents. All financial
terms used herein but not defined in the Security Agreement or any other
Loan
Document have the meanings given to them by generally accepted accounting
principles. All other undefined terms have the meanings given to them in
the
Uniform Commercial Code as adopted in the state of Indiana. The following
definitions are used herein:
(a) “Advance”
means a direct advance of funds to Borrower from Lender under and pursuant
to
the terms of this Note.
(b) “Affiliate”
means, as to Borrower, (i) any person or entity which, directly or indirectly,
is in control of, is controlled by or is under common control with, Borrower,
or
(ii) any person who is a director, officer or employee (A) of Borrower
or (B) of any person described in the preceding clause (a).
(c) “Assets”
means the total of the treasury stock, paid-in surplus, general contingency
reserves and retained earnings (deficit) of Borrower and any Subsidiary as
determined on a consolidated basis in accordance with generally accepted
accounting principles after eliminating all inter-company items and all amounts
properly attributable to minority interests, if any, in the stock and surplus
of
any Subsidiary.
(d) “Borrowing
Base” means Ninety Percent (90%) of the market value of the contents of the
Pledged Account.
(e) "Borrowing
Base Certificate" means a statement, setting forth the market value of the
Pledged Account, the current indebtedness under this Note, and a calculation
showing whether the outstanding balance complies with the Borrowing Base,
in
form and substance acceptable to Lender, as the same may be amended from
time to
time.
(f) “Control
Agreement” means that certain Control Agreement dated of even date herewith and
executed by Xxxxxxxx and Fifth Third Securities in favor of Xxxxxx.
(g) “Default
Rate” means four percent (4.0%) per annum plus
the Note
Rate.
(h) “Liabilities”
means (i) all items (except items of capital stock, of capital surplus, of
general contingency reserves or of retained earnings, deferred income taxes,
and
amounts attributable to minority interest if any) which in accordance with
generally accepted accounting principles would be included in determining
total
liabilities on a consolidated basis (if Borrower should have a subsidiary)
as
shown on the liability side of a balance sheet as at the date as of which
indebtedness is to be determined; (ii) all indebtedness secured by any mortgage,
pledge, lien or conditional sale or other title retention agreement to which
any
property or asset owned or held is subject, whether or not the indebtedness
secured thereby shall have been assumed (excluding non-capitalized leases
which
may amount to title retention agreements but including capitalized leases);
and
(iii) all indebtedness of others which Borrower or any subsidiary has directly
or indirectly guaranteed, endorse (otherwise than for collection or deposit
in
the ordinary course of business), discounted or sold with recourse or agreed
(contingently or otherwise) to purchase, repurchase, or otherwise acquire,
or in
respect of which Borrower or any subsidiary has agreed to apply or advance
funds
(whether by way of loan, stock purchase, capital contribution or otherwise)
or
otherwise to become directly or indirectly liable.
(i) "LIBO
Interest Period" means thirty (30) days, provided that if any LIBO Interest
Period would otherwise expire on a day which is not a LIBO Rate Banking Day,
the
LIBO Interest Period shall be extended to the next succeeding LIBO Rate Banking
Day except if the next succeeding LIBO Rate Banking Day occurs in the following
calendar month, then the LIBO Interest Period shall expire on the immediately
preceding LIBO Rate Banking Day.
(j) "LIBO
Rate" means the rate obtained by dividing (1) the actual or estimated per
annum
rate, or the arithmetic mean of the per annum rates, of interest for deposits
in
U.S. dollars for the LIBO Interest Period, as determined by Lender in its
discretion based upon information which appears on page LIBOR01, captioned
British Bankers Assoc. Interest Settlement Rates, of the Reuters America
Network, a service of Reuters America Inc. (or such other page that may replace
that page on that service for the purpose of displaying London interbank
offered
rates; or, if such service ceases to be available or ceases to be use by
Lender,
such other reasonably comparable money rate service as Lender may select)
or
upon information obtained from any other reasonable procedure, two (2) LIBO
Banking Days prior to the first day of each LIBO Interest Period; by (2)
an
amount equal to one minus the stated maximum rate (expressed as a decimal),
if
any, of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) that is specified on
the
first day of each LIBO Interest Period by the Board of Governors of the Federal
Reserve System (or any successor agency thereto) for determining the maximum
reserve requirement with respect to eurocurrency funding (currently referred
to
as "Eurocurrency liabilities" in Regulation D of such Board) maintained by
a
member bank of such System, or any other regulations of any governmental
authority having jurisdiction with respect thereto, all as conclusively
determined by Xxxxxx. Subject to any maximum or minimum interest rate limitation
specified herein or by applicable law, the LIBO Rate shall change automatically
without notice to Borrower immediately on the first day of each LIBO Interest
Period, with any change thereto effective as of the opening of business on
the
day of the change.
(k) "LIBO
Rate Banking Day" means any day other than a Saturday or a Sunday on which
banks
are open for business in Indianapolis, Indiana, and on which banks in London,
England, settle payments.
(l) “Lien”
means any security interest, mortgage, pledge, assignment, lien or other
encumbrance of any kind, including interests of vendors or lessors under
conditional sale contracts or capital leases.
(m) “Loan
Documents” means any and all Rate Management Agreements and each and every
document or agreement executed by Borrower or any other party evidencing,
guarantying or securing any of the Obligations, including but not limited
to
this Note, the Pledge Agreement, and the Control Agreement; and “Loan Document”
means any one of the Loan Documents.
(n) “Maturity
Date” means October 31, 2007.
(o) “Obligation(s)”
means all loans, advances, indebtedness and each and every other obligation
or
liability of Borrower owed to Lender and any affiliate of Lender, however
created, of every kind and description whether now existing or hereafter
arising
and whether direct or indirect, primary or as guarantor or surety, absolute
or
contingent, liquidated or unliquidated, matured or unmatured, participated
in
whole or in part, created by trust agreement, lease overdraft, agreement
or
otherwise, whether or not secured by additional collateral, whether originated
with Lender or owed to others and acquired by Lender by purchase, assignment
or
otherwise, and including, without limitation, all loans, advances, indebtedness
and each and every obligation or liability arising under the loan document,
any
and all Rate Management Obligations, letters of credit now or hereafter issued
by Lender or any affiliate of Lender for the benefit of or at the request
of
Borrower, all obligations to perform or forbear from performing acts, and
agreements, instruments and documents evidencing, guaranteeing, securing
or
otherwise executed in connection with any of the foregoing, together with
any
amendments, modifications and restatements thereof, and all expenses and
attorneys’ fees incurred by Lender hereunder or any other document, instrument
or agreement related to any of the foregoing.
(p) “Pledge
Agreement” means that certain Security and Pledge Agreement dated of even date
herewith, executed by Xxxxxxxx in favor of Lender which grants to Lender
a
perfected security interest in a certain investment account Borrower holds
with
Fifth Third Securities, as the same may be amended from time to
time.
(q) “Pledged
Account” means that certain securities account number __________________ at
Fifth Third Securities pledged to Lender as collateral for this Note pursuant
to
the Pledge Agreement, which shall contain United States Treasuries and other
cash equivalents with a market value of not less than Three Million Five
Hundred
Thousand and no/100ths Dollars ($3,500,000.00) at any time.
(r) “Prime
Rate” means the rate established by the Lender from time to time based on its
consideration of economic, money market, business and competitive factors,
and
it is not necessarily the Lender’s most favored rate. Subject to any maximum or
minimum interest rate limitation specified herein or by applicable law,
obligations subject to this rate of interest shall change automatically without
notice to the Borrower immediately with each change in the Prime
Rate.
(s) “Rate
Management Agreement” means any agreement, device or arrangement providing for
payments which are related to fluctuations of interest rates, exchange rates,
forward rates, or equity prices, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants, and any
agreement pertaining to equity derivative transactions (e.g., equity or equity
index swaps, options, caps, floors, collars and forwards), including without
limitation any ISDA Master Agreement between Borrower and Lender or any
affiliate of Lender, and any schedules, confirmations and documents and other
confirming evidence between the parties confirming transactions thereunder,
all
whether now existing or hereafter arising, and in each case as amended, modified
or supplemented from time to time.
(t) “Rate
Management Obligations” means any and all obligations of Borrower to Lender or
any affiliate of Lender, whether absolute, contingent or otherwise whether
now
or hereafter arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefore), under or in connection
with (i) any and all Rate Management Agreements, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any Rate
Management Agreement.
(u) “Subsidiary”
means any corporation of which Borrower directly or indirectly owns or controls
at the time outstanding stock having ordinary circumstances (not depending
on
the happening of a contingency) voting power to elect a majority of the board
of
directors of said corporation.
10. EVENTS
OF DEFAULT.
Upon
the occurrence of any of the following events (each, an “Event of Default”),
Lender may, at its option, without any demand or notice whatsoever, cease
making
advances and declare this Note and all Obligations to be fully due and payable
in their aggregate amount, together with accrued interest and all prepayment
premiums, fees, and charges applicable thereto:
(a) Any
failure to make any payment when due of principal or accrued interest on
this
Note or any other Obligation and such nonpayment remains uncured for a period
of
ten (10) days thereafter.
(b) Any
representation or warranty of Borrower set forth in this Note, any Loan Document
or in any agreement, instrument, document, certificate or financial statement
evidencing, guarantying, securing or otherwise related to, this Note or any
other Obligation shall be materially inaccurate or misleading.
(c) Borrower
shall fail to observe or perform any other term or condition of this Note
or any
other term or condition set forth in any agreement, instrument, document,
certificate or financial statement evidencing, guarantying or otherwise related
to this Note or any other Obligation, or Borrower shall otherwise default
in the
observance or performance of any covenant or agreement set forth in any of
the
foregoing for a period of thirty (30) days.
(d) The
legal
incompetence or dissolution of Borrower, or death of any guarantor, or of
any
endorser of the Obligations, or the merger or consolidation of any of the
foregoing with a third party, or the lease, sale or other conveyance of a
material part of the assets or business of any of the foregoing to a third
party
outside the ordinary course of its business, or the lease, purchase or other
acquisition of a material part of the assets or business of a third party
by any
of the foregoing.
(e) Any
failure to submit to Xxxxxx Xxxxxxxx’s or any guarantor’s current financial
information upon request.
(f) The
creation of any Lien (except a lien to Lender) on, the institution of any
garnishment proceedings by attachment, levy or otherwise against, the entry
of a
judgment against, or the seizure of, the Pledged Account, or any accounts
with
Xxxxxx.
(g) A
commencement by the Borrower or any endorser or guarantor of the Obligations
of
a voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect; or the entry of a decree or order for relief
in
respect of the Borrower or any endorser or guarantor of the Obligations in
a
case under any such law or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Borrower
or
any endorser or guarantor of the Obligations, or for any substantial part
of the
property of Borrower or any endorser or guarantor of the Obligations, or
ordering the wind-up or liquidation of the affairs of Borrower or any endorser
or guarantor of the Obligations; or the filing and pendency for thirty (30)
days
without dismissal of a petition initiating an involuntary case under any
such
bankruptcy, insolvency or similar law; or the making by Borrower or any endorser
or guarantor of the Obligations of any general assignment for the benefit
of
creditors; or the failure of the Borrower or any endorser or guarantor of
the
Obligations generally to pay its debts as such debts become due; or the taking
of action by the Borrower or any endorser or guarantor of the Obligations
in
furtherance of any of the foregoing.
(h) Nonpayment
by the Borrower of any Rate Management Obligation when due or the breach
by the
Borrower of any term, provision or condition contained in any Rate Management
Agreement.
(i) Any
sale,
conveyance or transfer of any rights in the Collateral securing the Obligations,
or any destruction, loss or damage of or to the Collateral in any material
respect.
11. REMEDIES.
(a) Upon
the
occurrence of any Event of Xxxxxxx, Xxxxxx may declare all sums hereunder
immediately due and payable, and may foreclose on all Collateral securing
the
Obligations, all without further notice to Borrower. In addition to any other
remedy permitted by law, Lender may at any time, without notice, apply the
Collateral to this Note or such other Obligations, whether due or not, and
Lender may, at its option, proceed to enforce and protect its rights by an
action at law or in equity or by any other appropriate proceedings, provided
that this Note and the Obligations shall be accelerated automatically and
immediately if the Event of Default is a filing under the 11 U.S.C. § 101
et. seq. (the “Bankruptcy Code”).
(b) Notwithstanding
any other legal or equitable rights of Lender, Lender, in the Event of Default,
is
(i) hereby
irrevocably appointed and constituted attorney-in-fact, with full power of
substitution, to exercise all rights of ownership with respect to the Collateral
including, but not limited to, the right to collect all income
or
other distributions arising therefrom and to exercise all voting rights
connected with the Collateral; and
(ii) is
hereby
given full power to collect, sell, assign, transfer and deliver all of said
Collateral or any part thereof, or any substitutes therefore, or any additions
thereto, through any private or public sale without either demand or notice
to
Borrower, or any advertisement, the same being hereby expressly waived, at
which
sale Lender is authorized to purchase said property or any part thereof,
free
from any right of redemption on the part of Borrower, which is hereby expressly
waived and released to the extent permitted by applicable law.
(c) In
case
of sale for any cause, after deducting all costs and expenses of every kind,
Lender may apply, as it shall deem proper, the residue of the proceeds of
such
sale toward the payment of any one or more or all of the Obligations of
Borrower, whether due or not due, to Lender; after such application and the
return of any surplus, Xxxxxxxx agrees to be and remains liable to Lender
for
any and every deficiency after application as aforesaid upon this and any
other
Obligation. Borrower shall pay all costs of collection incurred by Xxxxxx,
including its attorney’s fees, if this Note is referred to an attorney for
collection, whether or not payment is obtained before entry of judgment,
which
costs and fees are Obligations secured by the Collateral.
(d) Xxxxxx’s
rights and remedies hereunder are cumulative, and may be exercised together,
separately, and in any order. No delay on the part of Lender in the exercise
of
any such right or remedy shall operate as a waiver. No single or partial
exercise by Lender of any right or remedy shall preclude any other further
exercise of it or the exercise of any other right or remedy. No waiver or
indulgence by Lender of any Event of Default shall be effective unless in
writing and signed by Xxxxxx,
nor
shall
a waiver on one occasion be construed as a waiver of any other occurrence
in the
future.
12. LATE
PAYMENTS; DEFAULT RATE; FEES.
If any
payment is not paid when due (whether by acceleration or otherwise) or within
ten (10) days thereafter, undersigned agrees to pay to Lender a late payment
fee
as provided for in any loan agreement or five percent (5%) of the payment
amount, whichever is greater with a minimum fee of Twenty and no/100ths Dollars
($20.00). After an Event of Default, Xxxxxxxx agrees to pay to Xxxxxx a fixed
charge of Twenty-five and no/100ths Dollars ($25.00), or Borrower agrees
that
Lender may, without notice, increase the Note Rate to the Default Rate. Lender
may impose a non-sufficient funds fee for any check that is presented for
payment that is returned for any reason. In addition, Xxxxxx may charge loan
documentation fees as may be reasonably determined by the Lender.
13. PREPAYMENT.
Borrower may prepay all or part of this Note, which prepaid amounts shall
be
applied to the amounts due in reverse order of their due dates. Partial
prepayments shall not excuse any subsequent payment due.
14. ENTIRE
AGREEMENT.
Xxxxxxxx agrees that there are no conditions or understandings which are
not
expressed in this Note and the documents referred to herein.
15. SEVERABILITY.
The
declaration of invalidity of any provision of this Note shall not affect
any
part of the remainder of the provisions.
16. ASSIGNMENT.
Xxxxxxxx agrees not to assign any of Xxxxxxxx’s rights, remedies or obligations
described in this Note without the prior written consent of Lender, which
consent may be withheld in Xxxxxx’s sole discretion. Xxxxxxxx agrees that Xxxxxx
may assign some or all of its rights and remedies described in this Note
without
notice to, or prior consent from, the Borrower.
17. MODIFICATION;
WAIVER OF LENDER.
The
modification or waiver of any of Borrower’s obligations or Xxxxxx’s rights under
this Note and the Loan Documents must be contained in a writing signed by
Xxxxxx. Lender may perform Borrower’s obligations, or delay or fail to exercise
any of its rights or remedies, without causing a waiver of those obligations
or
rights. A waiver on one occasion shall not constitute a waiver on another
occasion. Borrower’s obligations under this Note shall not by affected if Lender
amends, compromises, exchanges, fails to exercise, impairs or releases (a)
any
of the obligations belonging to any co-borrower, endorser, or guarantor,
(b) any of its rights against any co-borrower, guarantor or endorser,
or
(c) the Collateral or any other property securing the Obligations.
18. WAIVER
OF BORROWER.
Borrower and any endorser or guarantor hereof hereby waive demand, presentment,
notice of acceptance, protest and notice of dishonor, notice of protest and
notice of default. Each of Borrower, including but not limited to all co-makers,
guarantors and accommodation makers of this Note, hereby waives relief under
valuation and appraisement laws and all suretyship defenses including but
not
limited to all defenses based upon impairment of Collateral and all suretyship
defenses described in Section 3-605 of the Uniform Commercial Code (the “UCC”).
Such waiver is entered to the full extent permitted by Section 3-605(i) of
the
UCC.
19. GOVERNING
LAW; CONSENT TO JURISDICTION.
This
Note is delivered in, is intended to be performed in, and will be construed
and
enforceable in accordance with and governed by the internal laws of, the
State
of Indiana, without regard to principles of conflicts of law. To induce Xxxxxx
to make the loan described herein, Xxxxxxxx
irrevocably agrees that all actions arising, directly or indirectly, as a
result
or consequence of this Note, any other agreement with Lender, or the Collateral,
shall be commenced and litigated only in courts having their situs in the
city
of Indianapolis, Indiana. Borrower hereby consents to the exclusive jurisdiction
and venue of any State or Federal court having its situs in said city, and
waives any objection based on forum
non conveniens.
Borrower hereby waives personal service of any and all process and consents
that
all such service of process may be made by certified mail, return receipt
requested, directed to Borrower as set forth herein in the manner provided
by
applicable statute, law, rule of court or otherwise.
20. WAIVER
OF JURY TRIAL.
The
Lender and Xxxxxxxx, after consulting or having had the opportunity to consult
with counsel, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER
OF
THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING
OUT OF
THIS NOTE OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS NOTE, OR ANY COURSE OF CONDUCT, DEALING, STATEMENT (WHETHER
ORAL OR WRITTEN), OR ACTIONS OF EITHER OF THEM. Neither the Lender nor the
Borrower shall seek to consolidate, by counterclaim or otherwise, any such
action in which a jury trial has been waived with any other action in which
a
jury trial cannot be or has not been waived. These provisions shall not be
deemed to have been modified in any respect or relinquished by either the
Lender
or the Borrower except by a written instrument executed by both of
them.
This
provision is a material inducement to Lender providing financial accommodations
to Borrower.
IN
WITNESS WHEREOF, Xxxxxxxx has executed this Note as of November 2,
2005.
BORROWER:
INTERACTIVE
INTELLIGENCE, INC.,
an
Indiana corporation
By:
/s/
Xxxxxxx
X. Xxxx
Xxxxxxx
X. Xxxx, Chief Financial Officer
EXHIBIT
A
SUBSIDIARIES
Name Jurisdiction
of Organization
Interactive
Intelligence, Inc. International United
States
Interactive
Portal, Inc. United
States
Vonexus,
Inc. United
States
Interactive
Intelligence France S.A.R.L. France
ININ
(Australia) Pty Ltd. Australia
ININ
UK
Limited England
ININ
Netherlands B.V. The
Netherlands
SECURITY
AND PLEDGE AGREEMENT
FOR
VALUE
RECEIVED, Interactive
Intelligence, Inc.(the
“Pledgor”), hereby transfers, assigns, delivers, sets over, hypothecates and
pledges to Fifth
Third Bank (Central Indiana) (“Pledgee”),
and grants a security interest to Pledgee in all of Pledgor's right, title
and
interest in and to shares of stock and other securities held in that certain
Fifth Third Securities Account # _____________________ (the “Investment
Account”) with a market value in the sum of not less than Three Million Five
Hundred Thousand Dollars ($3,500,000.00) (the “Minimum Value”) currently held by
Fifth Third Securities (the “Broker”), together with any and all “proceeds” (as
such term is defined in Section 9.1-102 of the Indiana Uniform Commercial Code,
as amended) thereof (all of the foregoing being referred to herein collectively
as the “Collateral”), to secure the performance and payment when due of the
obligations of Pledgor to Pledgee, including but not limited to Xxxxxxx’s
indebtedness to Pledgee pursuant to a promissory note of even date in the
original principal sum of Three Million and no/100ths Dollars ($3,000,000.00)
(the “Note”).
1. Representations
and Warranties.
Pledgor
warrants and represents to Pledgee that:
(a) Pledgor
has and will maintain at all times full and absolute title to and ownership
of
the Collateral, free of all security interests, liens, encumbrances, charges,
claims of third parties and rights of set off or recoupment, except the security
interests granted pursuant to this Security and Pledge Agreement (this
“Agreement”), and has the right to pledge and subject the Collateral to the
pledge and security interests herein granted; and
(b) Pledgor
has duly executed and delivered this Agreement and it constitutes a legal,
valid, and binding obligation of Pledgor, enforceable in accordance with its
terms.
2. Dividends
and Voting.
As long
as no Event of Default has occurred and is continuing, all dividends upon any
shares and securities deposited hereunder shall belong to Pledgor, and all
voting rights incident to such shares and securities shall be vested in Pledgor.
Should any such Event of Default hereunder occur and be continuing, all
dividends upon the shares and securities shall be paid to Pledgee to be applied
to reduce the sums due under the Note, and Pledgee may immediately exercise
all
voting rights incident to such shares. Effective with the occurrence and during
the continuance of an Event of Default, Pledgor hereby irrevocably appoints
Pledgee as proxy for the shares deposited by Xxxxxxx, acknowledging that such
appointment is coupled with an interest and that the term of such appointment
is
to continue until such time as all shares are sold or returned to Pledgee.
Except as provided in this paragraph, so long as no Event of Default has
occurred (as hereinafter defined), Pledgor shall continue to enjoy all rights
and privileges attendant to Pledgor’s ownership of the Collateral.
3. Covenants.
Pledgor
covenants and agrees that, from and after the date hereof and until the Note
is
fully satisfied or the Collateral is otherwise released and delivered to
Pledgor, without Xxxxxxx's prior written consent:
(a) Pledgor
will not: (i) sell, assign, transfer, exchange, convert or otherwise dispose
of,
or grant any option with respect to, the Collateral, unless concurrently
therewith the transferee in any such instance acknowledges this pledge and
subjects its interest in the Collateral to the interest of Pledgee created
by
this Agreement; or such Collateral continues to be maintained with Broker
subject to Pledgee's security interest; or (ii) take any other action with
respect to any of the Collateral that would impair the interest or rights of
Pledgee or Pledgor in, to or under any of the Collateral;
(b) Pledgor
will not create, incur or permit to exist any lien with respect to any of the
Collateral, or any interest therein, except for the lien provided under this
Agreement; and
(c) Pledgor
will not move the Collateral from the Investment Account.
4. Events
of Default/Remedies.
Any of
the following shall constitute a default (an “Event of Default”) by Pledgor
under this Agreement: (a) the occurrence of an Event of Default pursuant to
the
Note; (b) the market value of the Collateral shall be less than the Minimum
Value and Pledgor shall have failed to cure within ten (10) days; and (c) breach
by Pledgor of any covenant, or other provision of this Security Agreement
following Pledgee’s written notice to Pledgor specifying such breach and
providing thirty (30) days’ opportunity to cure such breach. During the
continuance of an Event of Default, Pledgee may itself, or through one or more
nominees, at its option, sell the Collateral, or any part thereof, at public
or
private sale, on 10 days' notice in writing to Pledgor of the time and place
of
such sale, and Pledgee shall apply the proceeds of such sale to the payment
of
the expenses incident thereto, including reasonable attorney fees, and to the
payment of all sums due and payable under the Note. The surplus, if any, shall
be paid over to Pledgor. At the sale of the Collateral, Pledgee may purchase
the
whole or any part thereof, by bidding all or a part of the sums due him, and
receive title thereto free and clear of any claim or demand of Pledgor. Pledgee
may exercise all rights and remedies of a pledgee and secured party allowed
by
applicable law.
5. Monthly
Reports.
Within
ten (10) days after the end of each month, Pledgor shall deliver or have
delivered to Pledgee a listing identifying the Collateral and reflecting the
current market value of the Investment Account. In the event a monthly report
reflects the market value of the Investment Account is less than the Minimum
Value, Pledgor shall have ten (10) days to cure. After cure, Pledgor shall
present proof of such cure to Pledgee in the form of an amended monthly
report.
6. Termination.
Upon
full satisfaction of the Note or such earlier date as Pledgee voluntarily
releases the Collateral to Pledgor, this Agreement shall terminate.
7. Successors
and Assigns.
This
Agreement and all obligations of Pledgor hereunder shall be binding upon Xxxxxxx
and his successors and assigns and shall inure to the benefit of Pledgee and
its
respective successors and assigns.
8. General.
This
Agreement shall be governed by the laws of the State of Indiana. Wherever
possible each provision of this Agreement shall be interpreted in such manner
as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under such law, such provision
shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this
Agreement.
9. Notices.
All
notices, requests, demands, claims, and other communications hereunder will
be
in writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given two business days after it is sent by registered
or
certified mail, return receipt requested, postage prepaid, and addressed to
the
intended recipient as set forth below:
|
To
the Pledgee:
|
Fifth
Third Bank
000
X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx,
Xxxxxxx 00000
Attn:
Xxxxxx Xxxxx, Vice President
|
|
To
the Pledgor:
|
Interactive
Intelligence, Inc.
0000
Xxxxxxxxxxx Xxx
Xxxxxxxxxxxx,
XX 00000
Attn:
Xxxxxxx
X. Xxxx, CFO
|
Either party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly
given unless and until it actually is received by the intended recipient. Either
party may change the address to which notices, requests, demands, claims, and
other communications are to be delivered by giving the other party written
notice of same.
10. Attorney's
Fees.
In any
action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the prevailing
party’s attorney's fees shall be paid by the other party to such action or
proceeding, in addition to any other remedy provided for in the
Note.
11. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original and all of which shall constitute one and the same
Agreement.
Executed
and delivered as of this 2nd day of November 2005.
PLEDGOR:
By:
/s/
Xxxxxxx X. Xxxx
Its:
CFO
PLEDGEE:
FIFTH
THIRD BANK (Central Indiana)
a
Michigan banking corporation
By:
/s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx, Vice President
CONTROL
AGREEMENT
Re:
Account No.
FIFTH
THIRD BANK (CENTRAL INDIANA)
Secured
Party FBO
INTERACTIVE
INTELLIGENCE, INC.
This
Agreement refers to the above-referenced and entitled Fifth Third Securities
(“Securities”) Account (together with any substitution or replacement thereof,
the “Investment Account”) which the undersigned account holder (the “Account
Holder”) has instructed Securities to entitle as referenced above and hold
certain of the Account Holder’s assets. The Account Holder and Securities hereby
acknowledge and agree that the Investment Account is a cash securities account
and is not a DVP account, a retirement account or a margin account.
The
Account Holder and Fifth Third Bank (Central Indiana) (“Secured Party”) hereby
notify Securities that the Account Holder has granted the Secured Party a
security interest in the Investment Account, all financial assets and other
items therein, all proceeds thereof and distributions in connection therewith
and income received thereon (the “Collateral”) in the minimum face value of
Three Million Five Hundred Thousand and no/100ths Dollars ($3,500,000.00) (the
“Minimum Value”) pursuant to a Security and Pledge Agreement dated even date
herewith made by the Account Holder in favor of the Secured Party (as amended,
supplemented or otherwise modified from time to time, the “Security Agreement”).
Securities hereby acknowledges being so notified and confirms that it has
recorded such security interest on its books and records. Further, Securities
confirms that as of the date hereof, its personnel generally responsible for
maintaining records of liens or security interests with respect to customer
securities accounts, have no knowledge of any restraint, security interest,
lien
or other adverse claim in or to the Investment Account or any item therein;
provided
that
Securities may retain a subordinated lien in connection with any obligations
that Account Holder may have incurred with Securities. In addition, Securities
agrees to use reasonable efforts to notify the Secured Party and the Account
Holder in the event it receives any written notice of any lien, encumbrance
or
adverse claim against the Investment Account or any of the other
Collateral.
Absent
written instructions from the Secured Party to the contrary (see“Notice
of Exclusive Control” discussed below), the Account Holder shall be authorized
to operate the Investment Account in accordance with the terms of this Control
Agreement and the Account Holder's existing agreements with Securities (the
“Account Agreements”), subject to Secured Party's security interest in the
Collateral; provided,
that
the Account Holder may not withdraw or transfer any Collateral from the
Investment Account other than in connection with Permitted Trading. “Permitted
Trading” for purposes of this Control Agreement is the right of the Account
Holder to sell Collateral in the Investment Account and invest the proceeds
of
such sale, as well as other cash available in the Investment Account from time
to time, in marketable securities, cash or cash equivalents, so long as no
Collateral is released from the Investment Account as a result of such sale,
and
so long as the Minimum Value is maintained at al times. However, the Account
Holder hereby acknowledges and agrees that the Secured Party's consent to
Permitted Trading in no way constitutes a waiver of any of its rights under
the
Security Agreement and that it is the Account Holder’s obligation to ensure at
all times that the type and amount of the Collateral in the Investment Account
meets the maintenance requirements contained in the Security
Agreement.
Notwithstanding
anything herein to the contrary, upon written notice at any time from the
Secured Party to Securities (the “Notice of Exclusive Control”): (a) the Account
Holder shall have no right, and Securities will not permit the Account Holder,
to trade or in any other manner withdraw or transfer any or all financial assets
or credit balances in the Investment Account, without the Secured Party’s prior
written consent in each instance; and (b) Securities shall not accept or honor
any instructions from or on behalf of the Account Holder in respect of the
Investment Account, without the Secured Party’s prior written consent.
Securities agrees that all property in the Investment Account at any time shall
be treated as a financial asset for purposes of the Uniform Commercial Code
in
effect in Indiana as of the date hereof.
The
Account Holder hereby authorizes Securities to, and Securities shall, provide
the Secured Party with monthly account statements and trade confirmations when
issued, and to disclose to the Secured Party such information relative to the
Investment Account and the financial assets and credit balances therein as
the
Secured Party may at any time and from time to time request, without any
reference to any further authority for, or inquiry as to the justification
for,
such disclosure. The parties hereby agree that Securities will provide
Investment Account information to Secured Party as frequently as Secured Party
may require to permit it to monitor the Collateral for compliance with the
Security Agreement.
Securities
will comply with all entitlement orders originated by the Secured Party without
further action or consent by Account Holder or any other person and will (1)
as
frequently as required in writing by the Secured Party, transfer all available
credit balances and financial assets in the Investment Account to such account
as may be designated by the Secured Party by wire transfer, depository transfer
check, automatic clearing house electronic transfer, or otherwise, as the
Secured Party may direct in its sole discretion; and (2) maintain the Investment
Account and all financial assets and other items therein as the Secured Party
may direct in writing from time to time (including using its best efforts to
place or negotiate orders to sell securities in the Investment Account,
including but not limited to sell orders pursuant to stock powers issued in
favor of Securities, and transferring the proceeds of sale to the Secured Party
in accordance herewith), in each case until such time (if any) as the Secured
Party withdraws or rescinds the Notice of Exclusive Control.
Any
security interest in or lien on the Investment Account or other Collateral,
as
defined in this Control Agreement, granted to or otherwise obtained by
Securities (including, without limitation, setoff rights) shall be junior and
subordinate to the security interest and lien of the Secured Party in and on
the
Investment Account and other Collateral, as defined in this Control Agreement,
regardless of the order of perfecting any such security interest or lien, the
filing or absence of filing any financing statement or the taking or failure
to
take any other action. Securities acknowledges the Secured Party's perfected
security interest in the Investment Account and other Collateral, as defined
in
this Control Agreement, and agrees that, except as provide herein, it will
not
(i) foreclose upon, sell or otherwise dispose of the Investment Account or
any
such other Collateral, or exercise any bankers' or other lien or right of setoff
or similar right in connection with the Investment Account or any such other
Collateral, in each case without the Secured Party’s prior written consent; or
(ii) receive, accept or apply any proceeds of the Investment Account or any
such
other Collateral to or on account of any indebtedness or obligation of the
Account Holder to Securities, in each case until the Secured Party has released
its security interest in the Investment Account and any such other Collateral,
provided,
however,
that
nothing herein shall limit Securities's right to debit the Investment Account
in
payment of its then current commissions, charges and other such fees associated
with the Investment Account and due to Securities, and from time to time to
debit the Investment Account in an amount equal to the amount of any deposit
that Securities has credited to the Investment Account that is thereafter
returned to Securities because of insufficient funds or is otherwise unpaid.
Securities shall neither advance margin or other credit against the Investment
Account, nor hypothecate any financial assets or other items carried in the
Investment Account, without the prior written consent of the Secured Party.
Securities shall not agree with any other person or entity that it will comply
(and Securities shall not comply) with any withdrawal, transfer, payment or
redemption instruction, or any other entitlement order or other order, from
such
person or entity concerning the Investment Account or any financial assets
or
other items therein, without the Secured Party’s prior written consent, and any
such agreement entered into without such consent shall be null and
void.
The
Account Holder acknowledges and agrees that this Control Agreement constitutes
written notification to Securities with respect to the Secured Party's security
interest in the Collateral pursuant to Articles 8 and 9 of the Uniform
Commercial Code in effect in Indiana as of the date hereof and any applicable
federal regulations for the Federal Reserve Book Entry System. The Account
Holder and the Secured Party each acknowledges and agree that Securities shall
not be held responsible for (A) any decline in the market value of the
Collateral or the failure to notify the Account Holder or the Secured Party
thereof; or (B) Securities’s failure to take any action with respect to the
Collateral, except as expressly provided in this Control Agreement, or as
instructed by the Secured Party to Securities in accordance with this Control
Agreement (which instructions may be oral followed by written confirmation);
(C)
and, except as expressly provided in this Control Agreement, this Control
Agreement shall not abridge any rights Securities otherwise may have. To the
extent that any provisions of this Control Agreement conflicts with any
provisions of the Account Agreements, the provisions of this Control Agreement
shall control.
Except
with respect to the obligations and duties expressly provided in this Control
Agreement, this Control Agreement shall not impose or create any obligations
or
duties upon Securities that are greater than or in the addition to the usual
and
customary obligations and duties, if any, of Securities with respect to the
Investment Account or the Account Holder. Except as expressly provide in this
Control Agreement, Securities shall have no obligation or duty whatsoever to
interpret the terms of any other agreements between the Account Holder and
the
Secured Party or to determine whether any default exists
thereunder.
The
Account Holder hereby irrevocably authorizes and instructs Securities to perform
and comply with the terms of this Control Agreement and to the extent there
is
any conflict between the Control Agreement and the Account Agreements, the
provisions of this Control Agreement will control. The Account Holder hereby
indemnifies and holds harmless Securities from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including reasonable attorney's fees) and liabilities of every nature
and character arising out of or related to this Control Agreement or the
transactions contemplated hereby or any actions taken or omitted to be taken
by
Securities hereunder, including, without limitation, claims arising out of
Securities's failure to permit the Account Holder or any other party to withdraw
funds from the Investment Account other than in strict compliance with the
terms
of this Control Agreement, except to the extent directly caused by Securities's
gross negligence or willful misconduct. The Secured Party shall indemnify and
hold harmless Securities from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
reasonable attorney's fees) and liabilities of every nature and character that
may result from Securities’s compliance with the Secured Party’s instructions or
requests as permitted or required under this Control Agreement, except to the
extent directly caused by Securities’s gross negligence or willful misconduct.
The foregoing indemnifications shall survive any termination of this Control
Agreement.
Securities
may act upon any instrument or other writing believed by it in good faith to
be
genuine and to have been signed or presented by a person purporting to be the
Secured Party or the Account Holder, as the case may be. Securities shall not
be
liable in connection with the performance or non-performance of its duties
hereunder, except for its own gross negligence or willful misconduct.
Securities's duties shall be determined only with reference to this Control
Agreement and applicable laws, and Securities shall not be charged with
knowledge of, or any duties or responsibilities in connection with, any other
document or agreement. If in doubt as to its duties and responsibilities
hereunder, Securities may consult with counsel of its choice and shall be
protected in any action taken or omitted to be taken in connection with the
advice or opinion of such counsel. Securities shall have no liability to any
party for any incidental, punitive or consequential damages resulting from
any
breach by Securities of its obligations hereunder.
All
notices required to be given pursuant to this Control Agreement shall be in
writing and shall be delivered by hand, mailed by United States registered
or
certified first class mail, postage prepaid and return receipt requested, or
sent by overnight courier, addressed to the applicable party at its address
set
forth on the signature page hereto or, in each case, to such other address
for
notices as any of the parties to this Control Agreement shall last have
furnished in writing to the other parties hereto in accordance with this
paragraph. Any such notice or communication shall be deemed to have been duly
given or made and to have become effective at the time of the receipt thereof
by
the party to which it is directed, or when delivery is duly attempted and
refused.
This
Control Agreement may not be amended or modified without the prior written
consent of Securities, the Account Holder and the Secured Party. This Control
Agreement shall continued in full force until Securities receives written notice
from the Secured Party terminating this Control Agreement. Upon receipt of
such
notice, all Securities’s obligations under this Control Agreement shall cease
including without limitation, any and all obligations hereunder with respect
to
the maintenance of the Investment Account. Thereafter, Securities may take
such
steps as the Account Holder may request to vest full ownership and control
of
the Investment Account in the Account Holder.
No
delay
or omissions by the Secured Party or Securities in exercising any right
hereunder shall operate as a waiver of such right or of any other right under
this Control Agreement. No waiver of any right under this Control Agreement
shall be effective unless in writing and signed by the Secured Party and
Securities, and no waiver on one occasion shall be construed as a bar to or
waiver of any such right on any other occasion.
This
Control Agreement and any waiver or amendment hereto may be executed in
counterparts and by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. This Control Agreement may
be
executed and delivered by telecopier or other facsimile transmission all with
the same force and effect as if the same were fully executed and delivered
original manual counterpart.
The
Control Agreement shall be governed by and construed in accordance with the
laws
of the State of Indiana (without giving effect to the conflicts of law
principles thereof) and shall be binding upon and shall inure to the benefit
of
the parties hereto and their respective successors and assigns.
In
the
event a provision of this Control Agreement is unenforceable, this agreement
shall be construed to the extent possible as if the unenforceable provision
were
omitted.
Please
indicate your agreement with the foregoing by signing below and returning this
Control Agreement to the Secured Party.
ACCOUNT
HOLDER
INTERACTIVE
INTELLIGENCE, INC.
By:
/s/
Xxxxxxx X. Xxxx Date:
11/2/05
Address:
0000 Xxxxxxxxxxx Xxx, Xxxxxxxxxxxx, Xxxxxxx 00000
SECURED
PARTY
FIFTH
THIRD BANK (CENTRAL INDIANA)
By:
/s/ Xxxxxx Xxxxx Date:
11/2/05
Xxxxxx
Xxxxx, Vice President
Address:
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000
ACCEPTED
AND AGREED:
FIFTH
THIRD SECURITIES
Signature:
/s/
Xxxx Xxxxxxxx Date:
11/2/05
Printed
Name: Xxxx
Xxxxxxxx
Title:
Institutional
Investments
Address: 000
X.
Xxxxxxxx Xxxxx 0000
Indianapolis,
IN 46204
