EXHIBIT 10.14
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is made and entered into as of this
31st day of December, 2001, by and between XXXXX X. XXXXXX ("Xxxxxx") and
TEKGRAF, INC., a Georgia corporation ("Tekgraf")
RECITALS:
1. The Board of Directors of Tekgraf has determined it to be in the best
interest of Tekgraf and its shareholders to sell its Channel Business Unit to a
newly created South Carolina limited liability company known as SCB
Acquisitions, LLC ("SCB Acquisitions");
2. SCB Acquisitions and Tekgraf have entered into that certain Asset Purchase
Agreement dated as of October 29, 2001 (the "Asset Purchase Agreement") pursuant
to which SCB Acquisitions will purchase substantially all of the operating
assets of Tekgraf's Channels Business Unit;
3. Xxxxxx is the president and chief executive officer of SCB Acquisitions as
well as a substantial investor in SCB Acquisitions;
4. In connection with the transactions contemplated by the Asset Purchase
Agreement, Tekgraf agreed to make this loan to Xxxxxx.
NOW, THEREFORE, Tekgraf and Xxxxxx, each in consideration of the
mutual covenants and agreements of the other contained in this Agreement and,
intending to be legally bound agree as follows:
1. THE LOAN. Tekgraf hereby agrees to loan to xxxxxx, and Xxxxxx hereby agrees
to, and hereby does, borrow from Tekgraf, in reliance on and subject to the
terms and conditions contained in this Agreement, the principal amount of
$200,000 (the "Loan"). The Loan is evidenced by that certain Secured Promissory
Note attached to this Agreement as EXHIBIT A, and by this reference incorporated
herein and made a part hereof (the "Note").
2. INTEREST RATE. The outstanding principal balance of the Loan shall bear
interest at the rate per annum that is one fourth of a percentage point (.25%)
above the rate paid by Tekgraf from time to time under its Amended and Restated
Loan and Security Agreement dated as of June 9, 2000, as amended from time to
time, between Tekgraf and Wachovia Bank, National Association.
3. PAYMENT. The principal of and all interest accrued on the Loan shall be due
and payable on December 31, 2003, or on the next business day if December 31,
2003 falls on a weekend or holiday on which national banks are closed.
4. PREPAYMENT. Xxxxxx may prepay the Loan, in whole or in part, at any time
without penalty. Prepayments shall be applied consistent with the terms of the
Note.
5. SECURITY FOR NOTE. As security for the payment of the Loan, Xxxxxx has
entered into a Pledge and Security Agreement of even date with this Agreement
(the "Pledge and Security Agreement") pursuant to which he has pledged 100,000
shares of Class A Common Stock of Tekgraf
6. DEFAULT. The occurrence of any one of the following events shall constitute
an event of default under this Agreement (each, an "Event of Default"):
6.1. FAILURE TO MAKE TIMELY PAYMENTS. Xxxxxx shall fail to pay when
due any installments of interest or principal under the Note and
such failure shall continue for a period of fifteen (15) days.
6.2. FAILURE TO PERFORM OTHER OBLIGATIONS. Xxxxxx shall fail to
observe or perform any other obligations, covenants, agreements,
undertakings or conditions to be observed and performed by Xxxxxx
under this Agreement, the Note or the Pledge and Security
Agreement and such failure has not been remedied to Tekgraf's
satisfaction within thirty (30) days after the notice of such
failure from Tekgraf.
6.3. DETERMINATION OF IMPAIRMENT. Tekgraf, in good faith, determines
that the prospect of payment or the observance or performance of
any other obligations, covenants, agreements, undertakings or
conditions in this Agreement is impaired and, immediately upon
request by Tekgraf, Xxxxxx has not given Tekgraf adequate
assurances of payment, observance or performance.
6.4. FAILURE TO PROVIDE TRUTHFUL AND COMPLETE INFORMATION. Any
information or representation furnished or made in or pursuant to
this Agreement or any related document by Xxxxxx shall be false,
incorrect, incomplete, or misleading when furnished or made.
7. EFFECT OF DEFAULT. Upon the occurrence of an Event of Default, as described
in Paragraph 6, this Agreement immediately and automatically shall terminate,
and any outstanding loan balance owed by Xxxxxx to Tekgraf shall immediately
become immediately due and payable without presentment, protest or further
demand of notice of any further action of any kind, all of which are hereby
expressly waived. In addition, Tekgraf shall have all of the rights accruing to
it under the Pledge and Security Agreement. All rights and remedies of Tekgraf
hereunder are cumulative and may be exercised successively or concurrently with
other rights Tekgraf may have at law or in equity.
8. RECOURSE. The Loan shall be a full recourse loan; PROVIDED, HOWEVER, that in
the event that Tekgraf shall file a petition in bankruptcy, a petition seeking
any reorganization, arrangement, composition or similar relief, or takes any
action of similar intent under any law regarding insolvency or relief for
debtors, or makes an assignment for the benefit of creditors or similar
undertaking then the Loan shall, without further action on the part of Tekgraf
or Xxxxxx, become limited in recourse to the security provided by the Pledge and
Security Agreement.
9. MISCELLANEOUS.
9.1. ENTIRE AGREEMENT. This Agreement and the instruments, agreements
and other documents contemplated hereby supersede all prior
discussions, understandings and agreements between and among the
parties with respect to the matters contained herein, and this
Agreement and the instruments, agreements and other documents
contemplated hereby contain the sole and entire agreement between
the parties hereto with respect to the matters contemplated
herein.
9.2. AMENDMENTS. This Agreement may not be amended or supplemented
except in writing by the parties hereto.
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9.3. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of
which together shall constitute one and the same document.
9.4. EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction or
interpretation of this Agreement.
9.5. BINDING EFFECT. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties to this Agreement
and any successors to Tekgraf, but neither this Agreement nor any
rights under this Agreement shall be assignable by Xxxxxx without
the express prior written approval of Tekgraf.
9.6. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the United States of America and
the State of Illinois. Tekgraf and Xxxxxx irrevocably consent to
the exclusive jurisdiction and venue of the courts of any county
in the State of Illinois and the United States District Court for
the Northern District of Illinois, in any judicial proceeding
brought to enforce this Agreement. The parties agree that any
forum other than the State of Illinois is an inconvenient forum
and that a lawsuit (or non0complusory counterclaim) brought by
one party against another party in a court of any jurisdiction
other than the State of Illinois should be forthwith dismissed or
transferred to a court located in the State of Illinois.
9.7. NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted
by confirmed facsimile, electronic or digital transmission
method; the day after it is sent, if sent for next-day delivery
to a domestic address by a recognized overnight delivery service
(e.g., Federal Express); and upon receipt if sent by certified or
registered mail, return receipt requested. In each case notice
shall be sent to:
If to Tekgraf: 000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
With a copy to: Xxxxxxx, Carton & Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
If to Xxxxxx: 000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone:
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With a copy to: Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A.
00 X. Xxxxxxxxxx Xxx (29601)
X.X. Xxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxx
or to such other place and with such other copies as either party may designate
as to itself by written notice to the other.
9.8. SEVERABILITY. If any provision of this Agreement shall be held
invalid under applicable laws, such invalidity shall not affect
any other provision of this Agreement that can be given effect
without the invalid provision, and, to this end, the provisions
of this Agreement are severable.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE TO LOAN AGREEMENT]
IN WITNESS WHEREOF, each of the parties have caused this Agreement to
be duly executed and delivered as of the date and year first above written.
TEKGRAF, INC.
By: /s/ Xxxxxx X. Xxxxx
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Its: Chief Financial Officer
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
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