Exhibit 10.4
LOAN AGREEMENT
This Loan Agreement (this "Agreement"), dated as of March 31, 2001,
is between Xxxxxxxx Corporation, a Delaware corporation, and the Borrower
described below.
In consideration of the Loan or Loans described below and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, Xxxxxxxx Corporation and Borrower agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other
terms defined herein, the following terms shall have the meaning set forth
with respect thereto:
A. BORROWER: Xxxxxx X. Xxxx
B. BORROWER'S ADDRESS:
0000 Xxxxxxxxxx
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000-0000
C. LOAN. The loan described in Section 2 hereof.
D. LOAN DOCUMENTS. Loan Documents means this Agreement,
the Pledge Agreement ("Pledge Agreement") between Xxxxxxxx Corporation and
Borrower of even date herewith, and any and all promissory notes executed by
Borrower in favor of Xxxxxxxx Corporation and all other documents,
instruments, guarantees, certificates and agreements executed and/or
delivered by Borrower, any guarantor or third party in connection with any
Loan.
E. ACCOUNTING TERMS. All accounting terms not
specifically defined or specified herein shall have the meanings generally
attributed to such terms under generally accepted accounting principles
("GAAP"), as in effect from time to time, consistently applied, with respect
to the financial statements referenced in Section 3.H. hereof.
2. LOAN. Xxxxxxxx Corporation hereby agrees to make one loan
to Borrower on the date hereof (or as soon as the conditions stated in this
Section 2 have been met) in the aggregate principal amount of $500,000.00.
The obligation to repay the loan is evidenced by a promissory note dated of
even date herewith (the promissory note, together with any and all renewals,
extensions or rearrangements thereof, being hereafter collectively referred
to as the "Note") having a maturity date, repayment terms and interest rate
as set forth in the Note. Funding of the loan is conditioned upon and subject
to the following conditions, Xxxxxxxx Corporation acknowledging that all
other conditions have been met: (1) execution of the Loan Documents by
Borrower, (2) execution of the Pledge Agreement by the spouse of Borrower,
and (3) physical delivery to Xxxxxxxx Corporation of Borrower's 589,040
shares of common stock in Exchange Applications, Inc. represented by
Certificate No. EA 1159, CUSIP No. 300867 10 8, together with an executed,
original stock power of Borrower in form and substance satisfactory to
Xxxxxxxx Corporation.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants to Xxxxxxxx Corporation as follows:
A. RESIDENCY. Borrower is a natural person of the
full age of majority and a resident of the State of Texas.
B. AUTHORITY AND COMPLIANCE. Borrower has full power
and authority to execute and deliver the Loan Documents and to incur and
perform the obligations provided for therein. No consent or approval of any
public authority or other third party is required as a condition to the
validity of any Loan Document.
C. BINDING AGREEMENT. This Agreement and the other
Loan Documents executed by Borrower constitute valid and legally binding
obligations of Borrower, enforceable in accordance with their terms.
D. LITIGATION. There is no proceeding involving
Borrower pending or, to the knowledge of Borrower, threatened before any
court or governmental authority, agency or arbitration authority, except as
disclosed to Xxxxxxxx Corporation in writing and acknowledged by Xxxxxxxx
Corporation prior to the date of this Agreement.
E. NO CONFLICTING AGREEMENTS. There is no provision
of any existing agreement, mortgage, indenture or contract binding on
Borrower or affecting Borrower's property, which would conflict with or in
any way prevent the execution, delivery or carrying out of the terms of this
Agreement and the other Loan Documents.
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F. OWNERSHIP OF ASSETS. Borrower has good title to
the assets purported to be owned by him, and his assets are free and clear of
liens, except those granted to Xxxxxxxx Corporation or as disclosed to
Xxxxxxxx Corporation in writing prior to the date of this Agreement.
G. TAXES. All taxes and assessments due and payable
by Borrower have been paid or are being contested in good faith by
appropriate proceedings. Borrower has filed all tax returns which he is
required to file.
H. FINANCIAL STATEMENTS. All factual information
furnished by Borrower to Xxxxxxxx Corporation in connection with this
Agreement and the other Loan Documents is and will be accurate and complete
on the date as of which such information is delivered to Xxxxxxxx Corporation
and is not and will not be incomplete by the omission of any material fact
necessary to make such information not misleading. No representation or
warranty contained in this Agreement or information appearing in any writing
furnished by Borrower or his counsel to Xxxxxxxx Corporation or its
representatives pursuant hereto or in connection with the loan made by
Xxxxxxxx Corporation hereunder contains any untrue statement of material fact
or omits to state a material fact necessary to make the statements herein or
therein not misleading.
I. LOAN FROM EXCHANGE APPLICATIONS, INC. Borrower
represents to Xxxxxxxx Corporation that Borrower is borrowing, for cash
proceeds, $350,000 from Exchange Applications, Inc. on the same date of this
Agreement. Borrower represents that Borrower will be using the proceeds from
the loan contemplated by this Agreement for charitable donations and savings.
4. [INTENTIONALLY DELETED]
5. DEFAULT. Borrower shall be in default under this Agreement
and under each of the other Loan Documents if a default or event of default
shall occur under the Note.
6. REMEDIES UPON DEFAULT. If a default or an event of default
shall occur, then Xxxxxxxx Corporation shall have all rights, powers and
remedies available under each of the Loan Documents as well as all rights and
remedies available at law or in equity.
7. NOTICES. All notices, requests or demands which any party
is required or may desire to give to any other party under any provision of
this Agreement must be in writing delivered to the other party at the
following address:
Borrower: Xxxxxx X. Xxxx
0000 Xxxxxxxxxx
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000-0000
With a copy to:
Xxx Xxxxxxx
Xxxxxx & Hanger, LLP
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Lender: Xxxxxxxx Corporation
0000 Xxxxxx Xxxx Xxxx, # 0000
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxx, Chief Financial Officer
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or
made as follows:
A. If sent by mail, upon the earlier of the date of
receipt or five (5) days after deposit in the U.S. Mail, first class postage
prepaid;
B. If sent by any other means, upon delivery.
8. [INTENTIONALLY DELETED]
9. MISCELLANEOUS. Borrower and Xxxxxxxx Corporation further
covenant and agree as follows, without limiting any requirement of any other
Loan Document:
A. CUMULATIVE RIGHTS AND NO WAIVER. Each and every
right granted to Xxxxxxxx Corporation under any Loan Document, or allowed it
by law or equity shall be cumulative of each other and may be exercised in
addition to any and all other rights of Xxxxxxxx Corporation, and no delay in
exercising any right shall operate as a waiver thereof, nor shall any single
or partial exercise by Xxxxxxxx Corporation of any right preclude any other
or future exercise thereof or the exercise of any other right. Borrower
expressly waives any presentment, demand, protest or other notice of any
kind, including but not limited to notice of intent to accelerate and notice
of acceleration. No notice to or demand on Borrower in any case shall, of
itself, entitle Borrower to any other or future notice or demand in similar
or other circumstances.
B. APPLICABLE LAW. This Agreement and the rights and
obligations of the parties hereunder shall be deemed to have been made in the
State of Texas at Xxxxxxxx Corporation's address indicated at the beginning
of this Agreement and shall be governed by, and construed in accordance with,
the laws of the State of Texas, and is performable in the City and County of
Texas at the Xxxxxxxx Corporation's address indicated at the beginning of
this Agreement.
C. AMENDMENT. No modification, consent, amendment or
waiver of any provision of this Agreement, nor consent to any departure by
Borrower therefrom, shall be effective unless the same shall be in writing
and signed by an officer of Xxxxxxxx Corporation, and then shall be effective
only in the specified instance and for the purpose for which given. This
Agreement is binding upon Borrower, its successors and assigns, and inures to
the benefit of Xxxxxxxx Corporation, its successors and assigns; however, no
assignment or other transfer of Borrower's rights or obligations hereunder
shall be made or be effective without Xxxxxxxx Corporation's prior written
consent, nor shall it relieve Borrower of any obligations hereunder. There is
no third party beneficiary of this Agreement.
D. DOCUMENTS. All documents, certificates and other
items required under this Agreement to be executed and/or delivered to
Xxxxxxxx Corporation shall be in form and content satisfactory to Xxxxxxxx
Corporation and its counsel.
E. PARTIAL INVALIDITY. The unenforceability or
invalidity of any provision of this Agreement shall not affect the
enforceability or validity of any other provision herein and the invalidity
or unenforceability of any provision of any Loan Document to any person or
circumstance shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.
F. INDEMNIFICATION. Notwithstanding anything to the
contrary contained in Section 9(G), Borrower shall indemnify, defend and hold
Xxxxxxxx Corporation and its successors and assigns harmless from and against
any and all claims, demands, suits, losses, damages, assessments, fines,
penalties, costs or other expenses (including reasonable attorneys' fees and
court costs) arising from or in any way related to any of the transactions
contemplated hereby, including but not limited to personal injury or death,
or property damage. Borrower's obligations under this paragraph shall survive
the repayment of the Loan and any deed in lieu of foreclosure or foreclosure
of any Pledge Agreement or other security document securing the Loan.
G. SURVIVABILITY. All covenants, agreements,
representations and warranties made herein or in the other Loan Documents
shall survive the making of the Loan and shall continue in full force and
effect so long as the Loan is outstanding or the obligation of the Xxxxxxxx
Corporation to make any advances under the Line shall not have expired.
10. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
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A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED
IN THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS
INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL
APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM
ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL
SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE
DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF
CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN
ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) LIMIT THE RIGHT OF XXXXXXXX
CORPORATION HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE
APPOINTMENT OF A RECEIVER. XXXXXXXX CORPORATION MAY EXERCISE SUCH SELF HELP
RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY
REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING
BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS
EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN
ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE
A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH
ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
11. NOTICE OF FINAL AGREEMENT (PURSUANT TO SECTION 26.02 OF THE
TEXAS BUSINESS AND COMMERCE CODE). THIS WRITTEN LOAN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
12. Nothing in this Loan Agreement shall expand Borrower's liability
for money borrowed beyond that specified in Section 13 of the Note.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
BORROWER: LENDER: XXXXXXXX CORPORATION
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx Xxxx
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XXXXXX X. XXXX Its: Senior Vice President
and Managing Director
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