Exhibit 10.25
LOAN AND SECURITY AGREEMENT
THIS AGREEMENT is made and entered into this 28th day of April, 1998,
by and among THE INTERCEPT GROUP, INC., a Georgia corporation ("INTERCEPT"),
INTERCEPT SWITCH, INC., a Georgia corporation ("ISI"), PROVESA, INC., a Georgia
corporation ("PROVESA"), PROVESA SERVICES, INC., a Georgia corporation ("PSI")
(InterCept, ISI, Provesa and PSI is each individually referred to as a
"BORROWER" and collectively as the "BORROWERS"), and FIRST UNION NATIONAL BANK,
a national banking association (together with its successors and assigns,
hereinafter referred to as "BANK").
W I T N E S S E T H:
WHEREAS, Borrowers desire a revolving line of credit from Bank up to
the maximum principal sum of $20,000,000.00 (the "CREDIT LIMIT"), on terms and
conditions set forth herein; and
WHEREAS, Bank is willing to extend a revolving line of credit to
Borrowers up to the maximum principal sum of $20,000,000.00, on terms and
conditions set forth herein; and
NOW, THEREFORE, for and in consideration of the premises and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereto, intending to be legally
bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings, unless the context otherwise requires:
1.1 "AFFILIATE" shall mean an (i) individual or entity that, directly
or indirectly, owns, controls, or holds with power to vote, thirty percent (30%)
or more of the outstanding voting interests in a Borrower, (ii) entity, thirty
percent (30%) or more of whose outstanding voting interests are directly or
indirectly owned, controlled, or held with power to vote, by a Borrower, (iii)
entity, thirty percent (30%) or more of whose outstanding voting interests are
directly or indirectly owned, controlled, or held with power to vote, by an
individual or entity that directly or indirectly owns, controls, or holds with
power to vote, thirty percent (30%) or more of the outstanding voting interests
in a Borrower, (iv) individual or entity whose business or substantially all of
whose property is operated under a lease or operating agreement by a Borrower,
(v) individual or entity that operates the
business or substantially all of the property of a Borrower under a lease or
operating agreement, or (vi) immediate family member of any individual that,
directly or indirectly, owns, controls, or holds with power to vote, thirty
percent (30%) or more of the outstanding voting interests in a
Borrower.
1.2 "APPLICABLE MARGIN" shall mean the percentage per annum set forth
below opposite the ratio of Funded Debt/EBITDA:
FUNDED DEBT/EBITDA APPLICABLE MARGIN
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less than or equal to .50 1.25%
greater than .50 less than or equal to 1.0 1.50%
greater than 1.0 less than or equal to 2.0 1.75%
greater than 2.0 less than or equal to 3.0 2.00%
1.3 "AGREEMENT" shall mean this Loan and Security Agreement, together
with any amendments, modifications or supplements hereto and schedules or
exhibits hereto.
1.4 "AUTHORIZED PERSONNEL" shall mean and refer to (i) the chief
executive officer of each Borrower, (ii) the chief financial officer of each
Borrower, and (iii) those other officers of each Borrower authorized by the
board of directors of such Borrower or by the officers listed in subsections (i)
and (ii) hereof in writing from time to time.
1.5 "AVERAGE DAILY OUTSTANDING BALANCE" shall mean a sum equal to the
quotient of the sum of the Daily Balances for each day during the period of such
calculation, divided by the actual number of days in that period.
1.6 "AVERAGE MONTHLY OUTSTANDING BALANCE" shall mean a sum equal to the
quotient of the sum of the Average Daily Outstanding Balances for each month
during the period of such calculation, divided by the number of months in that
period.
1.7 "BUSINESS DAY" shall mean any day, except Saturday, Sunday and
legal holidays, on which Bank is open for business.
1.8 "CLOSING" or "CLOSING DATE" shall mean the time set forth in
Article XII hereof for the closing of the transactions contemplated hereby.
1.9 "COLLATERAL" shall mean and include the Miscellaneous Property,
Receivables, Inventory, Equipment, Intellectual Property, Records and Proceeds.
1.10 "CONSOLIDATED TANGIBLE NET WORTH" of Borrowers shall mean the
Borrowers' Total Assets (not including any Receivables or indebtedness owing to
such party by any stockholders, officers,
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subsidiaries or Affiliates or any loans to any stockholders, officers,
subsidiaries or Affiliates) less the Borrowers' Consolidated Total Liabilities.
1.11 "CONSOLIDATED TOTAL LIABILITIES" of Borrowers shall mean the total
of all items and categories of indebtedness, obligations and liabilities of each
Borrower and its subsidiaries and Affiliates which, in accordance with GAAP,
would be included in determining total liabilities as shown on the liabilities
side of each Borrowers' balance sheet at the date as of which total liabilities
are to be determined (including without limitation all indebtedness owed to
officers, shareholders and employees of such entity, all capitalized leases and
all reserves for deferred taxes and other deferred sums).
1.12 "DAILY BALANCE" shall mean a sum equal to the amount of all
Revolving Loans which remain unpaid as of the beginning of the day of such
calculation, plus all Revolving Loans made on the day of such calculation, less
the portion of any payments or credits applied (subject to final collection) on
the day of such calculation against the unpaid balance of the Revolving Loans.
1.13 "DEFAULT" shall mean any of the events or conditions described in
Article X hereof.
1.14 "EBITDA" shall mean and refer to earnings before interest, taxes,
depreciation and amortization, as calculated in accordance with GAAP.
1.15 "EQUIPMENT" shall mean the property described in Section 5.01(d)
of Article V hereof.
1.16 "FUNDED DEBT" shall mean and include all of each Borrower's
current and long term interest bearing debt.
1.17 "GAAP" shall mean generally accepted accounting principles applied
in a consistent manner from period to period.
1.18 "INTELLECTUAL PROPERTY" shall mean the property described in
Section 5.01(e) of Article V hereof.
1.19 "INTERCEPT" shall have the meaning ascribed to such term in the
preamble hereof. InterCept is the one hundred percent (100%) shareholder of ISI,
Provesa and PSI.
1.20 "INVENTORY" shall mean the property described in Section 5.01(c)
of Article V hereof.
1.21 "LIBOR" shall mean the rate per annum for U.S. dollar deposits of
that many months maturity as quoted by Telerate News Service on page 3750 which
is the official British Bankers
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Association fixing rate recorded at 11:00 a.m. London setting time on the date
two (2) Business Days prior to the first day of such interest period.
1.22 "LIBOR BREAKAGE COSTS" shall mean any loss, cost or expenses
including without limitation lost profit incurred by Bank as a result of the
liquidation or reemployment of deposits or other funds acquired by Bank to fund
or maintain the LIBOR Option for the Revolving Loans in the event the Revolving
Loans are at any time converted (whether upon Default or otherwise) to the Prime
Rate Option.
1.23 "LOAN DOCUMENTS" shall mean and include the Agreement, the Note
and any and all documents, instruments and agreements relating thereto or
executed in connection therewith.
1.24 "MATERIAL ADVERSE EFFECT" shall mean any act, omission, event or
undertaking which would, singly or in the aggregate, have a material adverse
effect upon (a) the business, assets, properties, liabilities, condition
(financial or otherwise), results of operations or business prospects of
Borrowers, taken as a whole, (b) the respective ability of any Borrower to
perform any obligations under this Agreement or any other Loan Document to which
it is a party, or (c) the legality, validity, binding effect, enforceability or
admissibility into evidence of any Loan Document or the ability of Bank to
enforce any rights or remedies under or in connection with any Loan Document.
1.25 "MATURITY DATE" shall have the meaning set forth in Section
2.01(d) of Article II hereof.
1.26 "MISCELLANEOUS PROPERTY" shall mean the property described in
Section 5.01(a) of Article V hereof.
1.27 "NET PROFIT" of an entity shall mean the excess of such entity's
total revenues over its total expenses after giving effect to taxes.
1.28 "NOTE" shall mean the Revolving Note.
1.29 "OBLIGATIONS" shall mean any and all indebtedness, liabilities and
obligations of Borrowers to Bank whatsoever, including without limiting the
generality of the foregoing: any and all indebtedness, liabilities and
obligations of Borrowers to Bank arising out of the Note; all Bank's fees,
charges and expenses of or incidental to the preparation, renewal, modification
or enforcement of Borrowers' obligations arising out of the Note, and any and
all extensions or renewals thereof in whole or in part; and any indebtedness,
liability or obligation of any Borrower to Bank under any later or future
advances or loans made by Bank to a Borrower, and any and all extensions or
renewals thereof in whole
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or in part, joint or several, and in any event whether existing as of the date
hereof or hereafter arising and whether direct, indirect, absolute or
contingent, as maker, endorser, guarantor or otherwise, including without
limitation Bank's participation in others' loans; and all charges, interest,
expenses, and costs of collection in connection with the foregoing, including,
but not limited to, fifteen percent (15%) of the total amount due (including
principal and interest) as attorneys' fees in the event that such amounts are
collected by or through an attorney-at-law, and also other legal and court
costs, which in no event shall exceed actual costs incurred.
1.30 "PRIME RATE" shall mean the interest rate established by Bank from
time to time in its sole discretion as its prime rate, provided that in the
event that Bank shall abolish or abandon the practice of establishing a prime
rate, or should the same become unascertainable, Bank shall designate a
comparable reference rate which shall be deemed to be the Prime Rate hereunder.
The Prime Rate is not the lowest rate available on loans made by Bank. Bank
lends money at interest rates at, above and below the Prime Rate.
1.31 "PROCEEDS" shall mean the property described in Section 5.02 of
Article V hereof.
1.32 "RECEIVABLES" shall mean the property described in Section 5.01(b)
of Article V hereof.
1.33 "RECORDS" shall mean the property described in Section 5.01(f) of
Article V hereof.
1.34 "REVOLVING LOAN" AND "REVOLVING LOANS" shall have the same meaning
ascribed to such terms in Section 2.01(a) of Article II hereof.
1.35 "REVOLVING NOTE" shall mean Borrowers' promissory note to Bank
evidencing the Revolving Loans, as amended from time to time by the execution by
Borrowers and Bank of a written instrument in form and substance satisfactory to
Bank.
1.36 "SEC FILINGS" shall mean all forms, reports and documents filed
and required to be filed by Borrowers with the United States Securities and
Exchange Commission (the "SEC"), including: (i) the Registration Statement on
Form S-1 as filed March 2, 1998 and the prospectus related thereto, as amended
and to be amended, (ii) all proxy statements relating to meetings of
shareholders (whether annual or special), (iii) all Annual Reports on Form 10-K
as filed or to be filed with the SEC, (iv) all Current Reports on Forms 8-K, (v)
all Quarterly Reports on Forms 10-Q, (vi) the exhibits, schedules and documents
attached to any of the foregoing or incorporated by reference therein, and (vii)
all amendments, modifications and replacements of any of the foregoing.
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1.37 "SUBORDINATED DEBT" shall mean all debt owed by a Borrower to any
officer of any Borrower, any shareholder of any Borrower, any Affiliate of any
Borrower or any subsidiary of any Borrower (each a "RELATED PARTY" and
collectively the "RELATED PARTIES"), which debt has been subordinated by the
applicable Related Party in favor of Bank pursuant to a subordination agreement
in form and substance satisfactory to Bank.
1.38 "SUBORDINATION AGREEMENTS" shall individually and collectively
mean agreements in form and substance satisfactory to Bank, pursuant to which
the Related Parties subordinate in favor of Bank all debt owing by any Borrower
to the Related Parties and all security therefor.
1.39 "TOTAL ASSETS" of an entity shall mean the total of all items and
categories of properties which, in accordance with GAAP, would be included in
determining total assets as shown on the assets side of such entity's balance
sheet (excluding any value for goodwill, trademarks, patents, copyrights,
organization expense, non-competition agreements and other similar intangible
items).
1.40 "TOTAL CAPITALIZATION" shall mean total Funded Debt PLUS Tangible
Net Worth.
ARTICLE II
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FINANCING
2.01 TERMS AND AMOUNT OF REVOLVING LOANS. (a) Upon the execution of
this Agreement and provided that Borrowers are in compliance with its terms and
conditions, Bank hereby extends a line of credit to Borrowers in the amount of
up to the aggregate principal sum outstanding of TWENTY MILLION AND NO/100THS
DOLLARS ($20,000,000.00), which may be borrowed, repaid and reborrowed, from
time to time in one or more borrowings prior to the maturity date of the
Revolving Note (each advance under such line of credit a "REVOLVING LOAN" and
all advances collectively referred to as "REVOLVING LOANS"), subject to the
terms and conditions of this Agreement. The Revolving Loans shall be evidenced
by the Revolving Note payable to the order of Bank in form and substance
satisfactory to Bank. The unpaid principal balance of the Revolving Loans shall
bear interest, at the option of Borrowers, at either: (i) a floating rate equal
to the Prime Rate MINUS one-quarter of one percent (0.25%) (the "PRIME RATE
OPTION"), or (ii) a fixed rate for interest periods of one-, two- or three-whole
months (the "LIBOR OPTION PERIOD") equal to the reserved adjusted thirty (30)
day LIBOR PLUS the Applicable Margin (the LIBOR OPTION"). Interest on the
Revolving Note will be based on the actual number of days elapsed over a year of
360 days. Any change in such interest rate resulting from a change in the Prime
Rate shall be effective on the Business Day on which such change in the Prime
Rate occurs.
(b) The LIBOR Option may be exercised by Borrowers for all, but not
less than all, of the then outstanding amounts of the Revolving Loans, no later
than the second (2nd) full Business Day preceding the first (1st) day of any
calendar month which commences an interest period selected by Borrowers in
respect of the LIBOR Option. Upon such exercise, the LIBOR Option shall remain
in effect until the expiration of the LIBOR Option Period selected, at which
time, unless an additional LIBOR Option shall have been timely exercised, the
rate upon such expiration shall be the Prime Rate Option, PROVIDED, HOWEVER,
that Bank will permit Borrowers to submit in writing a standing election to
select the LIBOR Option or the Prime Rate Option which will automatically renew
until Bank receives written notice from Borrowers terminating such election.
Borrowers shall not be entitled to select a LIBOR Option for the Revolving Loans
if a Default exists hereunder. Following the exercise of a LIBOR Option (subject
to the foregoing terms) and for and during the LIBOR Option Period selected by
Borrowers, Borrowers may request additional Revolving Loans in any amount at the
LIBOR Option rate of interest applicable at the beginning of the month in which
such additional advance or advances were requested. If a Default shall occur
during a LIBOR Option Period, the Revolving Loans shall, at the option of Bank,
convert to the Prime Rate Option and Borrowers shall be responsible for any and
all LIBOR Breakage Costs. Borrowers shall also be obligated to pay all LIBOR
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Breakage Costs in the event the Revolving Loans are paid prior to the expiration
of the applicable LIBOR Option Period.
(c) Beginning on the first (1st) day of the first (1st) month after the
date of the Revolving Note and continuing on the first (1st) day of each and
every month thereafter so long as there is any principal balance or accrued and
unpaid interest outstanding under the Revolving Note, accrued and unpaid
interest on the unpaid principal balance of the Revolving Note shall be due and
payable.
(d) The entire unpaid principal balance of the Revolving Note, together
with all accrued and unpaid interest thereon, shall be due and payable on April
28, 2001 (the "MATURITY DATE") or such other date to which the maturity of the
Revolving Note may be extended by written amendment thereto executed by
Borrowers and Bank or by a renewal note executed by Borrowers and delivered to
and accepted by Bank.
(e) In consideration of Bank's agreeing to make Revolving Loans on
terms and conditions set forth in this Agreement, Borrowers shall pay to Bank,
not as interest but as compensation for underwriting and other services rendered
in connection with the Revolving Loans, a quarterly service fee equal to
one-sixteenth of one percent (0.0625%) of (i) the Credit Limit MINUS (ii) the
Average Monthly Outstanding Balance of the Revolving Note during the previous
quarter, which shall be due and payable on the first (1st) day of the third
(3rd) month after the date hereof and continuing on the first (1st) day of each
and every quarter thereafter.
2.02 LATE PAYMENTS. If Borrowers shall fail to pay any installment of
principal or interest within ten (10) days after the date such installment
originally becomes due (excluding any applicable cure period), a late charge
equal to five percent (5%) of the total amount of such past due installment
shall immediately be due and payable to Bank in addition to such past due
installment, not as interest but as compensation for administrative and other
costs incurred by Bank as a result of such late payment.
2.03 PROCEEDS. Proceeds of the Revolving Loans shall be used by
Borrowers solely for the purpose of acquiring the assets or capital stock of an
entity engaged in a similar or compatible line of business as that of Borrowers
and for working capital in accordance with Section 2.04 hereof.
2.04 WORKING CAPITAL LINE. Borrowers shall have the option, during the
term hereof, to request that a certain portion of the Revolving Loans (in an
amount not to exceed $2,000,000 in the aggregate outstanding at any one time)
shall be used as working capital by Borrowers in the ordinary course of their
business and shall be made under substantially the same terms and conditions a
those contained herein. In the event Borrowers choose to exercise
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such option, amendment documentation shall be prepared by Bank's counsel and
executed by Borrowers and Bank, which documentation shall allow a certain
portion of the Revolving Loans to be used by Borrowers as working capital in the
ordinary course of their business and shall otherwise be in form and substance
satisfactory to Bank in its reasonable discretion.
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ARTICLE III
CONDITIONS TO INITIAL REVOLVING LOAN
Bank shall not be obligated to make the initial Revolving Loan unless:
3.01 Each of the conditions set forth in Article IV hereof shall have
been satisfied;
3.02 The representations and warranties made by or on behalf of
Borrowers in connection with such Revolving Loan, and the representations and
warranties of Borrowers contained in this Agreement, are true and correct in all
material respects on and as of the date of the request for such Revolving Loan;
3.03 Bank shall have received originals, duplicates, or confirmation
satisfactory to Bank of all insurance policies required to be maintained by
Borrowers pursuant to the terms and conditions hereof;
3.04 Bank shall have received payment in full of all fees, charges, and
expenses due in connection with this Agreement, including without limitation
attorneys' fees and expenses;
3.05 Bank shall have received originals of the Subordination Agreements
from the Related Parties;
3.06 Bank shall have received the original of a favorable opinion
letter from counsel for Borrowers in form and substance reasonably satisfactory
to Bank;
3.07 Bank shall have received an original Conditions Subsequent Rider,
as executed by each Borrower, which Conditions Subsequent Rider shall be in form
and substance reasonably satisfactory to Bank;
3.08 Bank shall have received originals of a landlord's waiver and
consent agreement executed by the record owner of any real property leased to
any Borrower, pursuant to which, among other things, such record owner
subordinates in favor of Bank any interest which it may have in the Collateral,
waives all right of levy, sale or distraint for non-payment of rent, agrees that
any Inventory or Equipment affixed to such real property shall remain personal
property of such Borrower and agrees that Bank shall be permitted to enter such
real property to inspect or, upon a Default, remove the Collateral therefrom,
all in form and substance satisfactory to Bank;
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3.09 Bank shall have received a commitment fee in the amount of
Seventy-Five Thousand and No/100ths Dollars ($75,000.00) in consideration of
Bank's agreement to make Revolving Loans to Borrowers upon the terms and
conditions of this Agreement, not as interest but as compensation for
underwriting and other services rendered in connection with the Revolving Loans
(Bank acknowledges receipt of $37,500.00 of the commitment fee prior to the date
hereof);
3.10 Bank shall have received a copy of each Borrower's federal
corporate income tax returns for its fiscal year last ended and financial
statements for each Borrower, all in form and substance reasonably satisfactory
to Bank; and
3.11 Bank shall have received such other loan documentation as deemed
reasonably necessary by Bank or its counsel, satisfactory in form and substance
to Bank, providing for the Revolving Loans to be extended, secured, and
guaranteed.
ARTICLE IV
CONDITIONS TO ALL REVOLVING LOANS
Bank shall not be obligated to make any Revolving Loan, unless:
4.01 The representations and warranties made by or on behalf of
Borrowers in connection with such Revolving Loan and the representations and
warranties of Borrowers contained in this Agreement are true and correct on and
as of the date of the request for such Revolving Loan;
4.02 The amount of the Revolving Loan requested, when aggregated with
the outstanding principal balance of all Revolving Loans, does not exceed
$20,000,000.00; PROVIDED, HOWEVER, any Revolving Loans in excess of
$6,000,000.00 in the aggregate in any one fiscal year shall only be made with
the prior written consent of Bank;
4.03 The Revolving Loan was requested by any Authorized Personnel
member;
4.04 Borrowers shall have provided Bank with written notice of
Borrowers' request for such Revolving Loan, in form and substance reasonably
satisfactory to Bank;
4.05 At the time of the request for the Revolving Loan, there shall
have been no material adverse change in any Borrower's financial condition from
its financial condition as shown in its last financial statement furnished to
Bank;
4.06 At the time of the request for such Revolving Loan,
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Borrowers shall be in substantial compliance with all of the terms and
provisions of this Agreement;
4.07 At the time of the request for such Revolving Loan, no Default or
an event that upon notice or lapse of time or both would constitute a Default
shall have occurred, and there will be no claim, action, suit or proceeding
pending or threatened against any Borrower that would be reasonably likely to
have a Material Adverse Effect; and
4.08 Bank shall have received a certificate from Borrowers, as executed
by the chief executive officer or chief financial officer of InterCept,
certifying that Borrowers will remain in compliance with Article IX hereof
following the applicable acquisition by Borrowers which certificate shall be
supported by the financial statements of the acquired entity (which financial
statements shall be in the form required to be filed with the SEC Filings
related to such transaction).
ARTICLE V
SECURITY
5.01 COLLATERAL PLEDGED BY BORROWERS. As security for the full payment
and performance of the Obligations, each Borrower hereby grants to Bank a
security interest in the following described personal property:
(a) MISCELLANEOUS PROPERTY. All property of such Borrower now or
hereafter in the possession, custody, or control of Bank, and all monies,
collection items, deposits, savings accounts, certificates, and other amounts
now or hereafter due, owing or issued by or from Bank to such Borrower, whether
matured or not (all of the foregoing hereinafter collectively called
"MISCELLANEOUS PROPERTY").
(b) RECEIVABLES AND OTHER COLLATERAL. All accounts, accounts
receivable, contract rights, general intangibles (including without limitation
the Intellectual Property), notes, documents, chattel paper, instruments,
acceptances, and drafts, whether or not the same is subject to, or defined by,
Article 9 of the Uniform Commercial Code or whether or not the same constitutes
by reason of one or more of the foregoing clauses, a right to the payment of
money or other form of consideration of any kind at any time existing now or
hereafter owing or to be owing to such Borrower, whether or not the same are
listed on any scheduled assignments or reports furnished to Bank from time to
time, whether now existing or created or acquired at any time hereafter; any and
all liens securing the foregoing, any and all guaranties and securities securing
the foregoing and all proceeds thereof (all of the foregoing hereinafter
collectively called "Receivables").
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(c) INVENTORY. All inventory of such Borrower, whether now owned or
hereafter acquired, including, without limitation, all goods held by such
Borrower for sale or lease or to be furnished under contracts of service or so
furnished, and all raw materials, work in process, supplies and finished goods,
and all materials used or consumed in such Borrower's business (all of the
foregoing hereinafter collectively called "INVENTORY").
(d) EQUIPMENT. All equipment, machinery, furniture, leasehold
improvements and fixtures of such Borrower, whether now owned or hereafter
acquired, including, without limitation, all replacements thereof and all
accessions, parts and equipment now or hereafter affixed thereto or used in
connection therewith (all of the foregoing hereinafter collectively called
"EQUIPMENT").
(e) INTELLECTUAL PROPERTY. All presently existing and hereafter issued,
filed, acquired or licensed patents and patent applications, including, without
limitation, divisional, continuations and continuations-in-part, copyrights,
trade names, trademarks and service marks, as well as all registrations and
applications for registration thereof, all income, royalties, damages and
payments now or hereafter due or payable under and with respect to any of the
foregoing, including without limitation damages and payments for past or future
infringements thereof, the right to xxx and recover for past, present and future
infringements of any of the foregoing, all rights throughout the world
corresponding to any of the foregoing, whether existing or granted under the
laws of the United States or any other domestic or foreign jurisdiction (all of
the foregoing hereinafter collectively called "INTELLECTUAL PROPERTY").
(f) BOOKS AND RECORDS. All present and future books, records, customer
lists, supplier lists, ledgers, invoices, purchase orders, sales orders, and
other evidence of such Borrower's business records, including, but not limited
to, all cabinets, drawers, files, correspondence, etc., that may hold same;
computer records, lists, software, programs, tapes and disks, all wherever
located and all whether now existing or hereafter arising or acquired (all of
the foregoing hereinafter collectively called "RECORDS").
5.02 PROCEEDS. All proceeds of any of the Miscellaneous Property,
Receivables, Inventory, Equipment, Intellectual Property and Records, including,
but not limited to, accounts, contract rights, chattel paper, notes, drafts,
instruments, general intangibles, inventory, equipment, fixtures, money deposit
accounts, goods, the proceeds of insurance or other tangible or intangible
property, resulting from the sale or other disposition of any of the foregoing
or the rendition of services by such Borrower, and the proceeds thereof (all of
the foregoing hereinafter collectively called "PROCEEDS").
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5.03 NEGATIVE PLEDGE. Each Borrower hereby covenants and agrees not to
encumber, in any manner whatsoever, whether voluntarily or involuntarily, any
real estate now owned or hereafter acquired by such Borrower in favor of any
party other than Bank, except for those encumbrances listed on EXHIBIT "A," as
attached hereto.
5.04 ADDITIONAL COLLATERAL. Each Borrower hereby covenants and agrees
to provide to Bank, no later than two (2) Business Days after its acquisition of
additional Collateral (whether by acquisition of the stock or assets of another
entity or otherwise), a list of such Collateral, which list shall indicate the
physical location of such Collateral. Each Borrower hereby further covenants and
agrees to take any and all actions reasonably requested by Bank in regards to
obtaining and maintaining Bank's first-priority perfected security interest in
such Collateral, which actions shall be at the sole cost and expense of
Borrowers.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce Bank to enter into this Agreement and to make or
extend the Revolving Loans, all as contemplated hereby, each Borrower represents
and warrants to Bank, as to itself and except as disclosed in the SEC Filings
(which SEC Filings have been provided by InterCept to Bank), each of which
representations and warranties is deemed to be material, that:
6.01 ORGANIZATION. Borrower is a corporation duly organized and validly
existing in Georgia and is in good standing under the laws of the State of
Georgia and has full right, power and authority to conduct its business as
currently conducted; Borrower's principal place of business and chief executive
office is located at 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx
00000.
6.02 POWER AND AUTHORITY OF EACH BORROWER. Borrower has full right,
power and authority to enter into the Loan Documents to which it is a party and
to consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and the documents contemplated to be executed and delivered hereby.
6.03 FOREIGN QUALIFICATION. Borrower is qualified to do business in all
states where required by applicable law, except where the failure to be so
qualified would not have a Material Adverse Effect; PROVIDED, HOWEVER, that
Borrower will provide notice to Bank of each and every instance where Borrower
is not qualified to do business in any state where required by applicable law.
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6.04 ENFORCEABILITY. The Loan Documents constitute valid obligations of
the party executing the same, legally binding upon it and enforceable in
accordance with their respective terms, except as the same may be limited by
bankruptcy, insolvency, moratorium or other laws affecting generally the
enforcement of creditor's rights and the availability of equitable remedies. No
consent, license, or approval of any governmental authority, bureau or agency is
required in connection with the execution, delivery, performance, validity or
enforceability of the Loan Documents.
6.05 VIOLATION OF ARTICLES OR BYLAWS. The execution, delivery and
performance of the Loan Documents will not violate the provisions of the
Articles of Incorporation or By-Laws of Borrower.
6.06 CONFLICTS. The execution, delivery and performance of the Loan
Documents will not violate the provisions of any mortgage, indenture, security
agreement, contract, undertaking or other agreement to which Borrower is a
party, or which purports to be binding upon Borrower or any of its respective
properties or assets.
6.07 TITLE. Borrower has full and absolute title to the Collateral
owned by it, except as set forth specifically on EXHIBIT A hereto.
6.08 EXISTENCE OF LIENS. No financing statement, mortgage, notice of
lien, deed of trust, security agreement, deed to secure debt, or any other
agreement or instrument creating or giving notice of a security interest in or
an encumbrance, lien, or charge against any of the Collateral owned by it is in
existence or on file in any public office, except as specifically set forth on
EXHIBIT A hereto.
6.09 FINANCIAL CONDITION. The most recent consolidated financial
statements of Borrower furnished to Bank and in the SEC Filings furnished to
Bank are complete and correct and accurately reflect their respective financial
conditions and the results of operations for the respective periods to which
such statements relate. There are no material liabilities, direct or indirect,
fixed or contingent, of Borrower that are not reflected therein or in the notes
thereto.
6.10 LITIGATION. There is no litigation, proceeding, or investigation
pending or, to the knowledge of Borrower, threatened, that is reasonably likely
to result in a Material Adverse Effect, nor does Borrower know or have any
reasonable grounds to know the basis for the institution of any such litigation,
proceeding or investigation.
6.11 TAX OBLIGATIONS. Borrower has no knowledge of any tax return
required to be filed by it that has not been filed with the
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appropriate governmental agency or for which it has not received an extension
beyond the date hereof; Borrower will not be, as of the Closing, in default with
respect to such filings. Borrower has paid or will have paid as of the Closing
Date all taxes now or then claimed to be due by any federal, state or local
taxing authority, except those disclosed to Bank in writing at Closing and if
the amount, applicability or validity thereof shall currently be contested in
good faith by appropriate proceedings, and if it shall have either: (i) set
aside on its books reserves (segregated to the extent required by sound
accounting practice) deemed by Bank adequate with respect thereto, or (ii) if
requested in writing by Bank, established a deposit with Bank sufficient to pay
or discharge such tax, if such proceedings are adversely determined. Neither the
Internal Revenue Service nor any other taxing authority is now asserting, or to
the knowledge of Borrower, has threatened to assert, any deficiency claim for
additional taxes against it; and no waiver of any applicable statute of
limitations has been granted to the Commissioner of Internal Revenue or any
other taxing authority by Borrower.
6.12 STOCK. The authorized capital stock of Borrower is as set forth on
EXHIBIT "B" hereto. There are no outstanding warrants, options or other rights
to acquire the capital stock of Borrower, other than as disclosed on EXHIBIT "B"
hereto and in the SEC Filings furnished by InterCept to Bank.
6.13 MISREPRESENTATIONS. No representation or warranty by Borrower made
herein and no statement or certificate to be furnished to Bank pursuant hereto
in connection with the transactions contemplated hereby contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained therein not misleading.
ARTICLE VII
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees with Bank, on its own behalf, that
from and after the date hereof, so long as the Obligations remain outstanding or
this Agreement remains in effect, that:
7.01 LOCATION OF RECORDS. Borrower shall maintain its books and
records, including, without limitation, all books and records evidencing or
relating to the Collateral, at its chief executive office as set forth in this
Agreement, and shall not remove said books and records from such address without
the prior written consent of Bank (which consent shall not be unreasonably
withheld, conditioned or delayed).
7.02 INSPECTION. Borrower shall permit Bank or any persons duly
designated by it to call at its places of business at any
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reasonable time, and without hindrance or delay, to inspect, audit, check and
make extracts from their books, records, journals, orders, receipts and any
correspondence or other data relating to their businesses or any other
transactions between or among the parties hereto. Bank shall endeavor to provide
at least two (2) Business Days notice of any such inspections and shall attempt
to minimize the disruption to Borrower's business.
7.03 FINANCIAL STATEMENTS AND OTHER INFORMATION. Borrower (as a part of
the consolidated financial statements of InterCept) shall furnish to Bank the
following financial information:
(a) Borrower shall furnish to Bank quarterly, within forty-five (45)
days after the end of each quarter, its financial statements (as a part of the
consolidated financial statements of InterCept), including balance sheets,
income and expense statements and detailed statements of profit and loss and
retained earnings, in form and content reasonably acceptable to Bank, all
certified by its chief financial or chief executive officer. After the effective
date of InterCept's initial public offering, all financial statements delivered
to Bank shall be in the same form as filed with the Securities and Exchange
Commission and the SEC Filings. The chief financial or chief executive officer
of such entity shall certify with respect to all such financial statements,
whether delivered prior to or after the effective date of InterCept's initial
public offering, that the financial statements submitted (i) are in accordance
with such entity's books and records; (ii) present fairly the financial position
and results of operations as of and for the periods specified; (iii) set forth
all material claims and liabilities, contingent or otherwise; and (iv) fully
disclose the existence of any Default hereunder, including the nature and period
of existence thereof.
(b) Borrower shall furnish to Bank annually, a copy of its federal
corporate income tax return, not later than ninety (90) days after filing with
the appropriate tax authorities; and Borrower shall furnish to Bank annually its
annual financial statements, including a balance sheet, income and expense
statement and detailed statement of profit and loss and retained earnings, in
form and content reasonably acceptable to Bank, within ninety (90) days after
the end of its fiscal year end, all of which shall be audited by an independent
practicing certified public accountant acceptable to Bank, together with an
unqualified opinion letter of such accountant, all in form and substance
satisfactory to Bank. After the effective date of InterCept's initial public
offering, such financials shall be in the same form as those filed with the
Securities and Exchange Commission.
(c) Borrower will furnish to Bank, no later than sixty (60) days
following the end of each fiscal year, a list of all of the locations of the
Collateral, which list shall clearly reflect all
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additional and changed locations of the Collateral since the last such list was
provided to Bank hereunder.
(d) Borrower will furnish to Bank such other or more frequent data,
information, and reports as Bank may reasonably request from time to time.
7.04 GOVERNMENTAL OBLIGATIONS. Borrower will pay and discharge promptly
or cause to be paid and discharged promptly all taxes, assessments, and
governmental charges for levies imposed upon its income or property, real,
personal, or mixed, or upon any part thereof, as well as all claims of any kind
(including claims for labor, materials and supplies), which, if unpaid, might by
law become a lien or charge against said property; provided, however, that
Borrower shall not be required to pay any such tax, assessment, charge, levy, or
claim if the amount, applicability or validity thereof shall currently be
contested in good faith by appropriate proceedings, and if it shall have either:
(i) set aside on its books reserves (segregated to the extent required by sound
accounting practice) deemed by Bank adequate with respect thereto, or (ii) if
requested in writing by Bank, established a deposit with Bank sufficient to pay
or discharge such tax, assessment, charge, levy or claim, if such proceedings
are adversely determined.
7.05 PROTECTION OF BUSINESS. Borrower shall take all appropriate action
necessary to protect its business and assets consistent with normal practices;
conduct its business in a sound and businesslike manner; and Borrower shall do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and all its rights necessary to the conduct of
its business.
7.06 MAINTENANCE OF RECORDS. Borrower shall keep adequate records and
books of accounts, in which complete entries will be made, reflecting all its
financial transactions.
7.07 ADVERSE CHANGES. Borrower shall, as soon as possible, and in any
event within five (5) business days after they become aware of the occurrence of
a Material Adverse Effect, which could reasonably be expected to impair
substantially their ability to perform its Obligations pursuant to this
Agreement, furnish to Bank a statement setting forth details of such Material
Adverse Effect and the action that they propose to take with respect thereto.
7.08 NOTICE OF LITIGATION. Borrower shall promptly notify Bank in the
event of any legal action filed against Borrower.
7.09 PAYMENT OF OBLIGATIONS. Borrower shall pay or cause to be paid the
principal of, and, if any, the interest and premium on all indebtedness
heretofore or hereafter incurred or assumed by it when and as the same shall
become due and payable, unless such
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indebtedness be renewed or extended; and faithfully observe, perform and
discharge all the covenants, conditions and obligations that are imposed upon it
by any and all indentures and other agreements securing or evidencing such
indebtedness or pursuant to which such indebtedness is issued, and not permit
the continuance of any act or omission that is, or under the provisions thereof
may be declared to be, a default, whether in the payment of principal and
interest or otherwise, unless waived pursuant to the provisions thereof;
provided, however, that Borrower shall not be required to make any payment or to
take any other action pursuant to this paragraph at any time while it shall be
currently contesting in good faith by appropriate proceedings its obligations to
make such a payment or to take such action, if it shall have either: (i) set
aside on its books, reserves (segregated to the extent required by sound
accounting practices) deemed by Bank adequate with respect thereto, or (ii) if
requested in writing by Bank, established a deposit with Bank sufficient to pay
any such amount if such proceedings are adversely determined.
7.10 FREE OF LIENS. Borrower will at all times hereafter keep the
Collateral owned by it free of all security interests, liens and claims
whatsoever, other than those in favor of Bank and those indicated on EXHIBIT A
hereto.
7.11 ADDITIONAL DOCUMENTATION. Borrower will from time to time, on
request of Bank, execute such financing statements, notices and other documents,
and pay the cost of filing or recording the same in all public offices deemed
necessary by Bank and do such other acts as Bank may request to establish and
maintain a valid and perfected security interest in the Collateral, including,
without limitation, delivery to Bank of any certificate of title or other
instrument issuable with respect to any of the Collateral and notation thereon
of the security interest and security title hereunder.
7.12 RECEIVABLES. The face amount of each Receivable shown on any
account report or aging now or hereafter provided to Bank, and all invoices and
statements now or hereafter delivered to Bank with respect to any such
Receivable, is and will be as it arises actually and absolutely owing without
defense, offset, or counterclaim and will not be contingent for any reason
(unless otherwise stated in such report). Borrower will notify Bank of any
defense, offset or counterclaim which is asserted with respect to any Receivable
within five (5) days of Borrower's receiving notice of the assertion of such
defense, offset or counterclaim.
7.13 ACCOUNTS. Borrower shall maintain all of its primary deposits and
similar transaction accounts with Bank, including without limitation all of its
checking and operating accounts, except for accounts maintained for convenience
at locations of Borrower not maintained in the State of Georgia. Borrower will
make all payments of interest on the Note from accounts maintained
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at Bank.
7.14 BUSINESS AND COLLATERAL INSURANCE. Borrower shall insure the
Collateral owned by it until Bank's security interest is terminated against all
risks to which it is exposed, including without limitation loss, damage, fire,
theft and all other such risks, and shall obtain liability insurance, business
interruption and worker's compensation insurance, all in such amounts, with such
companies, under such policies and in such form as shall be reasonably
satisfactory to Bank, which policies shall provide that loss thereunder shall be
payable to Bank as its interests may appear (upon a New York standard mortgage
clause [long form] acceptable to Bank in its reasonable discretion), and Bank
may apply any proceeds of such insurance which may be received by it for payment
of the Obligations, whether or not due, in such order of application as Bank may
reasonably determine, and such policies or certificates thereon or duplicates
thereof shall immediately be deposited with Bank.
7.15 LOCATION OF INVENTORY AND EQUIPMENT. Borrower shall at all times
keep the Inventory and Equipment at the location of its principal place of
business and chief executive offices, except as set forth on EXHIBIT "C," and
shall give notice of Bank's security interest in the Inventory and Equipment to
the person in possession of each location.
7.16 CONDITION OF EQUIPMENT. Borrower shall at all times keep its
Equipment in good order and repair, excepting normal wear and tear and any loss,
damage or destruction which is fully covered by insurance.
7.17 PERSONAL PROPERTY. The Equipment owned by Borrower is and shall be
maintained as personal property and shall not, by reason of attachment or
connection to any realty, either become or be deemed to be a fixture or
appurtenant to such realty and shall at all times be severable therefrom without
material change or damage to the realty.
ARTICLE VIII
NEGATIVE COVENANTS
Each Borrower covenants and agrees with Bank, on its own behalf, that
from and after the date hereof, and so long as the Obligations remain
outstanding or this Agreement remains in effect, that, without Bank's prior
written consent (which consent shall not be unreasonably withheld, conditioned
or delayed):
8.01 GUARANTIES. Borrower shall not guarantee, endorse, become surety
with respect to, or otherwise become directly or contingently liable for, or in
connection with, the obligations of any other person, firm, or corporation,
except for guaranties in
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favor of Bank and the endorsement of checks in the ordinary course of business.
8.02 MERGER, CONSOLIDATION, ETC. Borrower shall not enter into any
merger, reorganization or consolidation (except for such transactions with other
Borrowers or wherein (i) the consideration paid does not exceed $6,000,000 and
(ii) a Borrower is the surviving entity), nor will Borrower make any substantial
change in the basic type of business now conducted by it.
8.03 SALE OF ASSETS. Borrower shall not sell all or substantially all
of its assets or take any action that would make it impossible for it to carry
out its business as now conducted.
8.04 JUDGMENTS. Borrower shall not allow any single judgment for the
payment of money in excess of $50,000.00 or of any number of judgments for the
payment of money in excess of the aggregate sum of $100,000.00, excluding
amounts in either case with respect to which an insurance carrier admits full
coverage (except for applicable deductibles), to remain unsatisfied against it
for a period of thirty (30) consecutive days, unless execution thereof is
stayed.
8.05 INDEBTEDNESS. Borrower will not obtain from any party other than
from Bank any loans, advances, or other financial accommodations or
arrangements, except for loans or other financial accommodations relating to
trade debt incurred by Borrower in the ordinary course of business.
8.06 ENCUMBRANCES; DISPOSITION OF ASSETS. Borrower will not sell,
transfer, lease, pledge, abandon, or otherwise dispose of any of the Collateral
or any interest therein, except for Inventory, which Borrower may sell in the
ordinary course of its business.
8.07 ADVANCES AND LOANS. Borrower shall not make any loans, advances,
or extensions of credit to any of its stockholders, directors, officers,
executives, employees or any other Affiliate in excess of $500,000 in the
aggregate outstanding at any one time, except for credit extended for goods sold
in the ordinary course of Borrower's business and advances to employees of
Borrower for travel and other expenses incurred in the ordinary course of
Borrower's business.
8.08 CAPITAL EXPENDITURES. Borrowers shall not make net capital
expenditures or incur lease obligations in excess of $1,000,000.00 in the
aggregate for all items in any single fiscal year; PROVIDED, HOWEVER, that
Borrowers may make an additional $1,700,000.00 in capital expenditures during
the term hereof as long as such amounts are used solely by Borrowers to enhance
their frame relay network.
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8.09 DIVIDENDS. Borrower shall not declare or pay any dividends on its
capital stock, nor shall any Borrower redeem, repurchase or otherwise acquire
any of its outstanding capital stock; PROVIDED, HOWEVER, that Borrower may issue
additional stock and declare dividends consisting solely of stock.
8.10 CHANGE OF LOCATION OF BORROWER. Borrower will not change its
principal place of business or chief executive office, unless (i) Borrower is
changing its principal place of business or chief executive office to another
location within the State of Georgia, and (ii) Borrower delivers written notice
to Bank at least thirty (30) days in advance of such change.
ARTICLE IX
FINANCIAL COVENANTS
Borrowers covenant and agree with Bank that from and after the date
hereof, and so long as the Obligations remain outstanding or this Agreement
remains in effect, that:
9.01 FUNDED DEBT/EBITDA. Borrowers shall maintain a ratio of their
consolidated Funded Debt to EBITDA, as calculated on a rolling four-quarter
basis, of less than or equal to 3.0 to 1.0 at each quarter end.
9.02 FUNDED DEBT/TOTAL CAPITALIZATION. Borrowers shall maintain a
ratio of their consolidated Funded Debt to Total Capitalization at all times no
greater than 0.50 to 1.0.
9.03 CONSOLIDATED TANGIBLE NET WORTH. Borrowers shall have a
Consolidated Tangible Net Worth as of the Closing of at least $16,000,000.00,
and such minimum Consolidated Tangible Net worth shall increase by 100% of its
Net Profit for each fiscal year thereafter.
ARTICLE X
DEFAULT
Each of the following shall constitute a Default hereunder:
10.01 Failure of Borrowers to make any payment of principal or interest
on the Note evidencing the Revolving Loans within ten (10) days of its due date;
10.02 Failure of any Borrower to make any payment of principal or
interest on any other Obligations within ten (10) days of its due date;
10.03 Any statement, representation or warranty made orally
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or in writing by any Borrower in this Agreement, or in connection with any
document, certificate, or financial or other statement furnished by a Borrower
at any time under or in connection with this Agreement, is untrue in any
material respect when made or furnished;
10.04 Default by any Borrower under, or in the observance or
performance of any of the covenants or agreements contained in, this Agreement
or in any documents executed in connection with the consummation of the
transactions contemplated hereby, which continues uncured for sixty (60) days
after the occurrence thereof;
10.05 Default by any Borrower under, or in the observance or
performance of any of the covenants contained in, any other agreement or
document now or hereafter effective between such party and Bank, which continues
uncured for thirty (30) days after the occurrence thereof;
10.06 The filing by any Borrower of a petition under any chapter of the
Federal Bankruptcy Code, as amended, or of any proceeding seeking any relief
under any other insolvency or debtor relief act or law, state or federal, now or
hereafter existing;
10.07 The filing against any Borrower of a petition under any chapter
of the Federal Bankruptcy Code, as amended, or of any proceeding seeking any
relief under any other insolvency or debtor relief act or law, state or federal,
now or hereafter existing, which is not dismissed within one hundred twenty
(120) days;
10.08 The application by any Borrower or the consent or acquiescence of
any Borrower in, the appointment of a custodian, receiver, trustee or similar
official for all or a substantial part of any of their respective properties;
10.09 The involuntary appointment of a custodian, receiver, trustee or
similar official for all or a substantial part of any Borrower's property or
assets, or the issuance of a warrant, attachment, execution or similar process
against a substantial part of the property of any Borrower, which is not
dismissed within one hundred twenty (120) days;
10.10 Any Borrower shall become insolvent or unable to pay debts as
they mature, or admits in writing to such effect, makes a conveyance fraudulent
as to creditors under any state or federal law, makes an assignment for the
benefit of creditors, or a proceeding is instituted by or against any Borrower
alleging that any of them is insolvent or unable to pay debts as they mature,
which is not dismissed within one hundred twenty (120) days;
10.11 Xxxx X. Xxxxxxx ceases to be Chief Executive Officer and Chairman
of the Board of Directors of InterCept, without Bank's prior written consent;
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10.12 Suspension or material alteration of any Borrower's present
business;
10.13 Sale, transfer or exchange of a substantial part of the property
of any Borrower or dissolution, merger or consolidation of any Borrower (other
than as permitted under this Agreement);
10.14 Seizure of the Collateral by any third party;
10.15 Use of the Collateral which constitutes a violation of any law or
governmental rule or regulation applicable to Borrowers; and
10.16 Bank in good xxxxx xxxxx itself insecure, notifies Borrowers in
writing of such insecurity and provides Borrowers at least sixty (60) days to
cure the stated reasons for Bank's insecurity.
ARTICLE XI
RIGHTS AND REMEDIES
11.01 PRIOR TO DEFAULT. Before or after the occurrence of a Default:
Bank may, examine, audit or inspect any Borrower's books and records
constituting, evidencing or otherwise relating to the Collateral, wherever
located, at any time or times, and may enter upon any Borrower's premises for
such purposes consistent with Section 7.02 hereof. Each Borrower shall assist
Bank in a commercially reasonable manner to make each such examination, audit
and inspection.
11.02 SUBSEQUENT TO DEFAULT. Upon the occurrence of any one or more
Defaults (including the lapse of any applicable cure period): Bank may terminate
this Agreement and may declare the Obligations, notwithstanding any provisions
thereof, without demand or notice of any kind, immediately due and payable,
whereupon the Obligations shall become immediately due and payable and may be
collected forthwith; Borrowers shall assemble the Collateral and make it
available to Bank at such time or times and such location or locations as Bank
may designate in its discretion; Bank shall have the right to take immediate
possession of the Collateral without notice or resort to legal process and
without demand or notice of any kind to set off and deduct the outstanding
balance of the Obligations from sums, if any, which now are or hereafter may be
owing by Bank to Borrowers, including without limitation the Miscellaneous
Property; and Bank may exercise from time to time any rights and remedies
available to it under the Uniform Commercial Code and other applicable law in
the State of Georgia; PROVIDED, HOWEVER, that in the event that Bank elects in
its sole discretion not to accelerate the Obligations, or that Bank is
prohibited from
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accelerating the Obligations during any applicable cure period, upon the
occurrence of a Default, then, notwithstanding the existence of any applicable
cure period, without demand or notice of any kind, interest shall accrue on the
outstanding principal balance of the Note at the then applicable rate thereunder
PLUS two percent (2.0%) per annum commencing from the date such Default occurs
and continuing for so long as such Default continues, whether or not such
Default is cured pursuant to any applicable cure period or otherwise. Without
limiting the generality of the foregoing, upon the occurrence of a Default, Bank
shall have the right to notify the account debtors or obligors on the
Receivables to pay Bank directly, and, at Bank's request, each Borrower agrees
to notify all of its account debtors or obligors on the Receivables to pay Bank
directly. After a Default, Bank, from time to time, at its option, may perform
any agreement of any Borrower hereunder which such party shall fail to perform
and take any other action which Bank deems necessary for the maintenance or
preservation of any of the Collateral or its interest therein, and each Borrower
agrees to reimburse forthwith Bank for all reasonable costs and expenses of Bank
in connection with the foregoing (including without limitation Bank's internal
administrative costs). Without limiting the generality of the foregoing, Bank
shall have the right, without demand or notice of any kind, to set off and
deduct sums due to Bank under this Agreement from sums, if any, which now are or
hereafter may be owing by Bank to any Borrower, including without limitation the
Miscellaneous Property. After a Default, each Borrower hereby constitutes Bank
or its designee as its attorney-in-fact: to receive, open, and dispose of all
mail addressed to such Borrower; to notify the postal authorities to change the
address and delivery of mail addressed to such Borrower to such address as Bank
may designate; to endorse such Borrower's name upon any notes, acceptances,
checks, drafts, money orders and other remittances that may come into Bank's
possession and to deposit or otherwise collect the same; to sign such Borrower's
name on any invoice or xxxx of lading, on drafts against customers, and notices
to customers; to send verifications of accounts to customers; to execute in such
Borrower's name any affidavits and notices with regard to any and all lien
rights; and to do all other acts and things necessary to carry out this
Agreement. Each Borrower hereby waives notice of presentment, protest and
dishonor of any instrument so endorsed. All acts of said attorney-in-fact or
designee are hereby authorized and ratified, and said attorney-in-fact or
designee shall not be liable for any acts of omission or commission, nor for any
error of judgment or mistake of fact or law, unless resulting from Bank's gross
negligence or intentional misconduct; this power being coupled with an interest
is irrevocable while the Obligations remain outstanding.
ARTICLE XII
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CLOSING
The transactions contemplated hereby shall be closed at 10:00 a.m., on
April 28, 1998, at the offices of Bank's counsel, 0000 Xxxxxxxxx Xxxxxx, X.X.,
Xxxxx 0000, Xxxxxxx, XX 00000, or at such other time and place as the parties
may mutually agree.
ARTICLE XIII
OTHER FEES AND EXPENSES
Each Borrower shall provide, at its expense, to Bank all documents,
instruments, assurances, and certificates as Bank may deem necessary to
consummate the transactions contemplated hereby. Each Borrower shall be
obligated to Bank to pay all fees, expenses and costs reasonably incurred by
Bank, including without limitation attorneys' fees, in connection with the
entering into and negotiation of this Agreement and consummating the
transactions contemplated hereby, notwithstanding whether the transactions
contemplated hereby in fact are consummated.
ARTICLE XIV
TERM
When executed by each of the parties hereto, this Agreement shall be
effective on the date first above written and shall continue in full force and
effect until the maturity (whether by acceleration or otherwise) of the
Obligations, unless sooner terminated by Bank upon Default. Upon termination,
Borrower shall continue to perform all of its obligations hereunder until the
Obligations have been paid and satisfied in full.
ARTICLE XV
MISCELLANEOUS
15.01 Each and every right granted to Bank under this Agreement, or any
document delivered in connection with consummating the transactions contemplated
hereby or in connection herewith, or allowed to it by law or equity shall be
cumulative and may be exercised, and no delay in exercising any right shall
operate as a waiver thereof, nor shall any single or partial exercise by Bank of
any right preclude any other or future exercise thereof or the exercise of any
other right. No waiver by Bank of any Default hereunder shall constitute a
waiver of any subsequent Default.
15.02 This Agreement is entered into in the State of Georgia and the
rights and obligations of the parties hereunder shall be governed by, construed,
enforced and interpreted in accordance with the laws of the State of Georgia.
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15.03 All representations, warranties and covenants contained herein
shall survive the Closing and the execution and delivery of the Note or any
other documents contemplated hereby until the Obligations are indefeasibly
satisfied in full.
15.04 This Agreement constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof.
15.05 This Agreement shall not be modified or amended except by a
writing executed by the parties hereto.
15.06 This Agreement shall be binding upon the parties hereto, their
heirs, estates, representatives, successors and assigns and shall inure to the
benefit of Bank, its successors and assigns.
15.07 Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
15.08 Article and paragraph headings used in this Agreement are for
convenience of reference only and are not part of this Agreement for any other
purpose.
15.09 Any notice, demand or communication required or permitted to be
given by the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered personally to a party
or to an officer of the party to whom the same is directed, or if sent by United
States Mail, first-class postage and charges prepaid, addressed to such party at
the following address, or to such other address as shall be furnished in writing
by any party to the other, pursuant to the provisions hereof:
If to Bank, to First Union National Bank
000 Xxxxxxxxx Xxxxxx, X.X.
Suite 950, M/C 9071
Xxxxxxx, XX 00000
Attn: Xx. Xxxx X. Xxxxxx
with a copy to: Xxxxx, Xxxxxxxx & Xxxxxxx, LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxx, Esq.
If to Borrower, to c/o The InterCept Group
0000 Xxxxxxx Xxxxxx Xxxx
-00-
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxxxxx and
Xx. Xxxx X. Xxxxxxx
with a copy to: Nelson, Mullins, Xxxxx & Xxxxxxxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Any such notice shall be deemed given as of the date so delivered personally, or
three (3) days after the date on which same was deposited, first-class postage
prepaid, in a regularly maintained receptacle for the deposit of United States
Mail, addressed as aforesaid.
15.10 If any notification of intended disposition of the Collateral or
of any other act by Bank is required by law and a specific time period is not
stated therein, such notification, if given in accordance with Section 15.09
above at least five (5) Business Days before such disposition or act, shall be
deemed reasonably and properly given.
15.11 Time is of the essence of this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
-28-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered in their names and on their behalf, and their seals to be
affixed and attested, all on the day and year first above written.
BORROWERS:
----------
Attest: THE INTERCEPT GROUP, INC.
/s/ Xxxxx X. Xxxxxxxxx /s/ Xxxx X. Xxxxxxx
_________________________________ By:_________________________________
Secretary Title: Chairman & CEO
[CORPORATE SEAL]
Attest: INTERCEPT SWITCH, INC.
/s/ Xxxxxx Xxxxxx /s/ Xxxx X. Xxxxxxx
_________________________________ By:_________________________________
Secretary Title: Chairman & CEO
[CORPORATE SEAL]
Attest: PROVESA, INC.
/s/ Xxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx
_________________________________ By:_________________________________
Secretary Title: Chairman & Secretary
[CORPORATE SEAL]
Attest: PROVESA SERVICES, INC.
/s/ Xxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx
_________________________________ By:_________________________________
Secretary Title: Chairman & Secretary
[CORPORATE SEAL]
BANK:
FIRST UNION NATIONAL BANK
-29-
/s/ Xxxx X. Xxxxxx
By:_________________________________
Vice President
Its:_________________________________
[BANK SEAL]
-30-
EXHIBIT "A"
ENCUMBRANCES AND LIENS
DATE INSTRUMENT AND NUMBER SECURED PARTY
---- --------------------- -------------
COLLATERAL
----------
NONE.
EXHIBIT "B"
CAPITALIZATION OF BORROWERS
---------------------------
[TO BE PROVIDED BY BORROWERS]
-2-
