EXHIBIT 10.17
LOAN AGREEMENT
THIS AGREEMENT made and entered into as of the 17th day of June, 1996, by and
between Georgia State Bank (hereinafter referred to as "Lender"), a banking
corporation organized under the laws of Georgia, and Intercept Holdings, Inc.
(hereinafter referred to as "Borrower"), a Georgia corporation and Xxxx X.
Xxxxxxx, Guarantor, Data Services Corp., Guarantor and Intercept Systems, Inc.,
Guarantor.
RECITALS
Borrower wishes to obtain from Lender a loan in the principal amount of
$3,000,000.00 and Lender, on the terms and conditions hereinafter set forth, is
willing to lend such sum to Borrower.
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements, warranties, and representations herein made, Lender and Borrower
agree as follows:
ARTICLE I - DEFINITIONS
1.1 "Tangible Net Worth" means the total of Stockholder's Equity, minus loans
or advances to affiliated entities, minus intangible assets plus subordinated
debt.
1.2 "Capital" means all primary capital or all primary components of capital
as defined from time to time in accordance with generally accepted accounting
principles.
1.3 "Borrower's Stock" means all of the issued and outstanding capital stock
of Data Services Corp. and Intercept Systems, Inc. that is issued and
outstanding at the time of the closing.
1.4 "Collateral" means and includes all property assigned or pledged to Lender
or in which Lender has been granted security interest or to which Lender has
been granted security title under this Agreement or the other Financing
Documents and the proceeds thereof.
1.5 "Financing Documents" means and includes this Agreement, the Note, the
Pledge Agreements, Security Agreement, and any extensions, renewals,
modifications, or substitutions thereof or therefor, and all other associated
loan and collateral documents, including, without limitation, all guaranties,
suretyship agreements, exhibits, schedules, attachments, financing statements,
notices, consents, waivers, opinions, letters, reports, records, assignments,
documents, instruments, information and other writings related thereto, or
furnished by Borrower or Guarantors to Lender in connection therewith or in
connection with any of the Collateral.
1.6 "Lender" shall include transferees, assignees, and successors of Lender,
and all rights of Lender under the Financing Documents shall inure to the
benefit of its transferees, successors, and assigns. All obligations of
Borrower under the Financing Documents shall bind its heirs, legal
representatives, successors, and permitted assigns.
1.7 "Liabilities" mean all indebtedness, liabilities, and obligations of
Borrower and Subsidiaries of any nature whatsoever which Lender may now or
hereafter have, own or hold, and which are now or hereafter owing to Lender
regardless of however and whenever created, arising or evidenced, whether now,
heretofore or hereafter incurred, whether now, heretofore or hereafter due and
payable, whether alone or together with another or others, whether direct or
indirect, primary or secondary, absolute or contingent, or joint or several, and
whether as principal, maker, endorser, guarantor, surety or otherwise, and also
regardless of whether such Liabilities are from time to time reduced and
thereafter increased or entirely extinguished and thereafter reincurred,
including without limitation the Note (as hereinafter defined), and any
extensions, renewals, modifications, or substitutions thereof or therefor.
1.8 "Guarantors" mean Xxxx X. Xxxxxxx, Data Services Corp., and Intercept
Systems, Inc. (Personal Guarantor means Xxxx X. Xxxxxxx). (Corporate Guarantors
mean Data Services Corp. and Intercept Systems, Inc.)
1.9 "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
1.10 All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with the generally accepted accounting principles
in effect from time to time.
1.11 Subsidiaries mean Data Services Corp. and Intercept Systems, Inc.
ARTICLE II - THE LOAN
2.1 Subject to the terms and conditions of this Agreement, Lender agrees to
lend the Borrower the principal sum of $3,000,000.00 (the "Loan").
2.2 The Loan shall be evidenced by a promissory note, in form and substance
satisfactory to Lender, duly executed and delivered by Borrower in favor of
Lender. Said promissory note or any extension(s), renewal(s), modifications(s),
or substitutions(s), thereof or therefor which is in effect at any particular
time is hereinafter called the "Note". The Note shall provide that:
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(a) The Loan shall bear interest at a rate per annum, calculated on
the basis of a 360-day year and actual days elapsed, equal to the
Prime Rate, plus 2.5% (adjusted daily).
(b) The Principal balance owing under the Note shall be payable at
the rate of $41,202.22 per month, commencing on July 20, 1996 and
continuing on the twentieth day of each successive month
thereafter until paid in full.
(c) All accrued, but unpaid interest shall be payable in full each
month commencing on July 20, 1996 and on the twentieth day of
every successive month thereafter.
(d) Prepayment: No penalty or premium shall be imposed for the
prepayment in whole or in part of the principal balance of the
Loan, but each such prepayment shall be applied in the manner
provided in the Note.
In the event of conflict between the terms of this Section 2.2
and those of the Note, the Note shall control.
(e) Hedge waived in lieu of 60 month call.
2.3 The proceeds of the Loan shall be used by Borrower as follows:
(a) Intercept Holdings, Inc. shall acquire all of the common stock of
Intercept Systems, Inc. and Data Services Corp.
(b) An outstanding indebtedness in the amount of $686,421.12 shall be
used to satisfy an existing indebtedness to Georgia Bankers Bank.
(c) Additional funds shall be used to restructure and improve the
corporate business.
2.4 To secure the repayment of the Loan:
(i) Borrower shall execute and deliver to Lender a stock pledge
agreement (the "Stock Pledge Agreement") in form and substance
satisfactory to Lender, and pursuant to which Borrower shall
grant to Lender a security interest in all Borrower's Stock.
On or before the day the loan is made, Borrower shall deliver
to the Lender the certificate(s) representing the Borrower's
Stock together with stock transfer powers for same in form and
substance satisfactory to Lender. If at
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any time prior to repayment in full of the Loan, should
Borrower acquire any additional shares of the stock, Borrower
shall promptly deliver certificates evidencing such shares of
stock to Lender and such additional shares shall be added to
the collateral already pledged to Lender under the Pledge
Agreement, and Lender shall have a security interest in such
additional shares.
(ii) Intercept Systems, Inc. shall execute and deliver to Lender a
security agreement pledging said Subsidiaries accounts
receivables, contracts, furniture, fixtures, inventory,
equipment, general intangibles, specifically including the
computer programs comprising the Intercept ATM/Network
Interface Software System" (also known as I.A.N.I.S.S.) and all
other intellectual properties.
(iii) Personal Guaranty of Xxxx X. Xxxxxxx;
(iv) Corporate Guaranty of Intercept Systems, Inc.;
(v) Corporate Guaranty of Data Services Corp.; and
(vi) At the time of closing of this transaction, Xxxx X. Xxxxxxx
shall deliver to Lender, Assignments of Life Insurance Policies
on his life in the face amount of $1,000,000.00 showing Lender
as beneficiary thereunder.
(vii) Xxxxx X. Xxxxxxxxx shall subordinate his right to compensation
under his employment agreement and agreements to non-compete,
to Georgia State Bank, and its assigns, which shall result in
funds due under this loan being paid prior to any obligations
of Intercept Holdings, Inc. and/or Intercept Systems, Inc. to
Xxxxx X. Xxxxxxxxx under said employment agreement, in the
event of default by Borrower under the terms of this Loan
Agreement, Note or other documents.
(viii) Such agreements and documents as may be reasonably required by
Lender or Lender's counsel in connection with the loan
hereunder.
2.5 In connection with the Loan, Borrower will also deliver to Lender the
resolutions and other agreements or instruments specified in Section 6.5 hereof
and such other documents as may be reasonably required by Lender.
2.6 Upon execution of the Loan Agreement, Security Agreement and Financing
Documents, Borrower shall reimburse Lender for the
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attorney's fees and closing costs as shown on the Closing and Disbursement
Agreement of even date herewith.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that each of the following is true,
correct, complete and accurate in all respects:
3.1 Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia, and is qualified to do business
in all jurisdictions where such qualification is necessary. Borrower has its
principal place of business located at 0000 Xxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxx Xxxxxx, Xxxxxxx 00000.
3.2 Each financial statement of Borrower and Subsidiaries which has been
delivered to Lender presents fairly the financial condition of Borrower and
Subsidiaries as of the date indicated therein and the results of its operations
for the period(s) shown therein. There has been no material adverse change,
either existing or threatened, in the financial condition or operations of
Borrower and Subsidiaries since the date of said financial statement.
3.3 Borrower has full power and authority to make, execute and perform in
accordance with the respective terms thereof each of the Closing and Financing
Documents. The execution and performance by Borrower and Subsidiaries of each
and every one of the Financing Documents have been duly authorized by all
requisite action, and each and every one of them constitutes the legal, valid
and binding obligation of Borrower and Subsidiaries enforceable in accordance
with its respective terms.
3.4 Execution, delivery and performance by Borrower and Subsidiaries of each
and every one of the Financing Documents does not violate any provision of law
or regulations and will not result in a breach of or constitute a default under
any agreement, indenture or other instrument to which Borrower and Subsidiaries
are a party or by which Borrower and Subsidiaries are bound.
3.5 Except for the security interest created by the Stock Pledge Agreements,
Intercept Systems, Inc. and Data Services Corp.'s Stock pledged hereunder is
free and clear of all liens, charges and encumbrances. Intercept Systems, Inc.
and Data Services Corp.'s Stock is duly issued, fully paid and non-assessable,
and Borrower has the unencumbered right to pledge the Subsidiaries' Stock. Xxxx
X. Xxxxxxx agrees not to pledge his Stock of Intercept Holdings, Inc. so long as
this Loan and the Note are in effect.
3.6 There is no claim, action, suit, arbitration, investigation, condemnation
or other proceeding at law or in equity, or by or before any federal, state,
local or other governmental agency, or by or before any other agency or
arbitrator, nor is there any judgment, order, writ, injunction or decree of any
court pending,
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anticipated, or threatened against Borrower or Subsidiaries or against any
properties or assets which might have a material adverse effect on Borrower,
Subsidiaries, or their respective properties or assets, or which might call into
question the validity or enforceability of any of the Financing Documents, or
which might involve the alleged violation by Borrower or the Subsidiaries of any
federal, state, local or other law, rule or regulation.
3.7 All of Borrower's and Subsidiaries' outstanding capital stock has been
validly issued, fully paid and is non-assessable. Borrower and Subsidiaries are
not in violation of any applicable federal, state, local, or other securities
law and regulations with respect to the issuance of any of its capital stock or
any other of its securities.
3.8 Borrower, Subsidiaries and Guarantor Xxxx X. Xxxxxxx have filed or caused
to be filed all required federal, state, local or other tax returns and have
paid (except as otherwise permitted by Section 4.3 hereof) all governmental
taxes and other charges imposed upon it or on any of its properties or assets.
Borrower, Subsidiaries and Guarantors do not know of any proposed additional tax
assessments.
3.9 No consent, approval, order, authorization, designation, registration,
declaration, or filing with or of any federal, state, local, or other
governmental authority or public body on the part of the Borrower and
Subsidiaries is required in connection with Borrower's or Subsidiaries'
execution, delivery, or performance of any of the Financing Documents; or if
required, all such prerequisites have been, or as of the date the Loan is
advanced will be fully satisfied. Without limiting the generality of the
foregoing, Borrower has (or, as of the date the Loan is advanced, Borrower will
have) received all authorizations, consents, or approvals of all governmental
agencies, authorities or bodies required under applicable federal or state law
for its acquisition of the Xxxxxxxxx'x Stock, and a true and correct copy of
each such authorization, consent and approval has been or will be delivered by
Borrower to Lender prior to the Loan's funding, and all required waiting periods
with respect thereto have (or, as of the date the Loan is advanced, will have)
expired. All conditions or requirements (if any) imposed by each governmental
agency, authority or body in connection with its approval have been (or, as of
the date the Loan is advanced, will have been) met.
3.10 Neither Borrower nor Subsidiaries have incurred any material accumulated
funding deficiency within the meaning of the Employee Retirement Income Security
Act of 1974, P. L. No. 93-406, as amended ("ERISA"), nor have they incurred any
material liability to the Pension Benefit Guaranty Corporation established under
ERISA (or any successor thereto under such Act) in connection with any employee
benefit plan established or maintained by Borrower or its Subsidiaries.
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3.11 None of the transactions contemplated in this Agreement (including without
limitation, the use of the proceeds of the Loan) will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or
any regulations issued pursuant thereto, including, without limitation,
Regulations U and X of the Board of Governors of The Federal Reserve System, 12
C.F.R., Chapter II. None of the proceeds of the loan hereunder will be used to
purchase or carry (or refinance any borrowing the proceeds of which were used to
purchase or carry) any "margin stock" within the meaning of said Regulation U.
ARTICLE IV - AFFIRMATIVE COVENANTS
For so long as this Agreement is in effect, and unless Lender expressly consents
in writing otherwise or to the contrary, Borrower hereby expressly covenants and
agrees as follows:
4.1 Upon request of Lender, Borrower and Subsidiaries shall make available its
officers and employees to Lender to discuss the financial affairs of Borrower
and Subsidiaries at such times and intervals as Lender may request, and Borrower
and Subsidiaries shall promptly confirm or furnish in reasonable detail whatever
information relative to Borrower and Subsidiaries as Lender's authorized
representative, auditor or counsel may reasonably request.
4.2 Borrower and Subsidiaries shall promptly furnish to Lender:
(a) Not later than April 30th of each year and as of the end of each
fiscal year, audited consolidated and consolidating financial
statements of Borrower and Subsidiaries, to include a balance
sheet and statement of income and stockholders' equity, all in
reasonable detail, prepared in accordance with generally accepted
accounting principles and certified by an independent accounting
firm acceptable to Lender;
(b) Not later than thirty (30) days after and as of the end of each
month thereafter, unaudited consolidated and consolidating
financial statements of Borrower and Subsidiaries to include a
balance sheet and statement of income and stockholders' equity,
all in reasonable detail, prepared in accordance with generally
accepted accounting principles (subject to changes resulting from
year-end adjustments), and certified by the chief financial
officer of Borrower and Subsidiaries;
(c) Immediately after the occurrence of a material adverse change in
the business properties, condition, management or prospects,
financial or otherwise, of Borrower and Subsidiaries, a statement
of Borrower's and Subsidiaries' chief
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executive officer or chief financial officer setting forth in
reasonable detail such change and the action which Borrower or
Subsidiaries proposes to take with respect thereto.
(d) Personal Guarantor shall furnish a current financial statement
upon request of the Lender (at least annually) and a copy of his
personal tax returns by August 15th of each year.
(e) From time to time upon request of Lender, such other information
relating to the operations, business, condition, management,
properties and prospects of Borrower and Subsidiaries as Lender
may reasonably request.
4.3 Borrower and Subsidiaries shall punctually pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or upon any of its property, as well as all claims of any kind which, if
unpaid, might by law become a lien or charge upon its property, except taxes,
assessments, charges, levies or claims which are in good faith being timely
litigated or otherwise properly contested by Borrower and Subsidiaries and as to
which the contestant has established an adequate reserve on its books.
4.4 Borrower and Subsidiaries will comply in all material respects with the
requirements of all provisions of constitutions, statutes, rules, regulations,
and orders of governmental bodies or regulatory agencies applicable to it, and
all orders and decrees of all courts and arbitrators in proceedings or actions
to which it is a party or by which it is bound.
4.5 Borrower will immediately report to Lender any change in the beneficial
ownership of Borrower's stock by any officer, director, or 5% or greater
stockholder of Borrower.
ARTICLE V - NEGATIVE COVENANTS
For so long as this Agreement is in effect, and unless Lender expressly consents
in writing otherwise or to the contrary, Borrower hereby expressly covenants and
agrees to the following negative covenants:
5.1 Intercept Systems, Inc.'s tangible net worth shall not be less than
$500,000.00 at all times.
5.2 Borrower shall neither declare nor pay any dividend nor make any
distribution to its shareholders (other than dividends or distributions payable
in shares of stock of Borrower) nor shall Borrower retire, redeem, purchase or
otherwise acquire for value, directly or indirectly, any shares of the capital
stock of Borrower, nor permit if such declaration, payment, distribution,
retirement, purchase, redemption or other acquisition would result
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in an Event of Default hereunder or an event which, with the giving of notice or
passage of time (or both), would constitute such an Event of Default.
5.3 Borrower shall not incur, create, assume, or permit to exist any
indebtedness or liability for borrowed money other than to Lender.
5.4 The Subsidiaries shall not incur, create, assume or permit to exist any
indebtedness or liability for borrowed money in excess of $200,000.00 each,
other than to Lender, without the prior written consent of Lender, which shall
not be unreasonably withheld.
5.5 Borrower and Intercept Systems, Inc. shall not without prior written
consent of Lender in any manner, directly or indirectly, become a guarantor of
any obligation of, or an endorser of, or otherwise assume or become liable upon
any notes, obligations, or other indebtedness of any other person except in
connection with the depositing of checks in the normal and ordinary course of
business.
5.6 Borrower and Subsidiaries shall not without prior written consent of
Lender transfer all or substantially all of its assets to, consolidate with or
merge with any other person to acquire all or substantially all of the
properties or capital stock of any other person or enter into any partnership or
joint venture, or change or amend its articles or certificates of incorporation
or its by-laws.
5.7 Borrower and Subsidiaries shall not issue, sell or otherwise dispose of
any shares of any class of its stock (other than directors' qualifying shares)
except to Borrower.
5.8 Borrower and Subsidiaries shall not incur or suffer to exist any material
accumulated funding deficiency within the meaning of ERISA or incur any material
liability to the Pension Benefit Guaranty Corporation established under ERISA
(or any successor thereto under ERISA).
5.9 Borrower and Subsidiaries shall not issue any additional stock of Borrower
or Subsidiaries, nor shall Borrower or Subsidiaries increase the compensation,
in any form whatsoever, more than fifteen (15%) percent annually including the
salary, paid to any officers or directors of Borrower or Subsidiaries from the
date hereof up through the date of full satisfaction of the Loan without the
written consent of Lender, which consent shall not be unreasonably withheld.
5.10 Borrower shall not voluntarily change its Chief Executive Officer without
Lender's prior written consent, which consent shall not be unreasonably
withheld.
5.11 Borrower and Intercept Systems, Inc. shall make no capital improvements in
the aggregate in excess of $350,000.00 per year,
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without the written consent of Lender, which consent shall not be unreasonably
withheld.
ARTICLE VI - CONDITIONS
All of the Lender's obligation under this Agreement, including without
limitation, any obligations to make the Loan to Borrower are subject to the
prior fulfillment of each of the following conditions and Borrower shall exert
its best efforts to cause each of the following conditions to be so fulfilled.
6.1 All representations and warranties of Borrower and Guarantors contained in
this Agreement and in each and every one of the other Financing Documents shall
be true, correct, complete and accurate in all respects on and as of the date
the Loan is advanced.
6.2 Borrower and Guarantors have duly and properly performed in all respects
all covenants, agreements, and obligations required by the terms of this
Agreement or any of the other Financing Documents to be performed by Borrower
and Guarantors.
6.3 Borrower and Guarantors have not taken nor permitted to be taken any
actions which would conflict with any of the provisions of Article V of this
Agreement.
6.4 Since the date of the Loan Application, no significant adverse changes
have occurred in Borrower's condition (financial or otherwise), or in the
business, properties, assets, liabilities, prospects, or management of Borrower
other than the effects of the transactions affected through this Closing.
6.5 Borrower has delivered to Lender the following described documents:
(a) This Agreement duly executed by Borrower;
(b) A Note dated the 17th day of June, 1996 in the original principal
amount of $3,000,000.00 executed and delivered to Lender by
Borrower;
(c) The Stock Pledge Agreements duly executed by Borrower hereunder;
(d) The Certificate(s) representing the Subsidiaries' Stock pledged
by the Borrower together with a stock power for each certificate
duly executed by Borrower or the appropriate stockholder;
(e) A Certificate of Borrower's and Subsidiaries' President or Vice
President and its Secretary or Assistant Secretary, in form and
substance satisfactory to Lender, with respect to the resolutions
of Borrower's and Subsidiaries' directors authorizing execution
of this Agreement
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and the other Financing Documents, and such other matters as
Lender may reasonably require;
(f) A certificate of the Secretary of State of the state of
Borrower's and Subsidiaries' incorpor-ations certifying that
Borrower and Subsidiaries are corporations duly organized and in
good standing under the laws of such state;
(g) A Security Agreement for each Subsidiary, pledging Subsidiaries'
accounts receivables, contracts, fur-xxxxxx, inventory, fixtures,
equipment and intellectual properties to Lender;
(h) Personal Guaranty of Xxxx X. Xxxxxxx;
(i) Corporate Guaranty of Intercept Systems, Inc.;
(j) Corporate Guaranty of Data Services Corp.; and
(k) Such agreements as may be reasonably required by Lender or
Lender's counsel in connection with the Loan hereunder.
(l) A Subordination Agreement from Xxxxx X. Xxxxxxxxx to Lender,
subordinating the indebtedness of Intercept Systems, Inc. to
Xxxxx X. Xxxxxxxxx.
(m) A Subordination Agreement from Intercept Holdings, Inc. to
Lender, subordinating the indebtedness of Intercept Systems, Inc.
to Intercept Holdings, Inc.
6.6 Guarantor Xxxxxxx shall deliver the Assignments of Life Insurance Policies
referenced in paragraph 2.4 (vi) prior to or at the time of closing.
6.7 No Event of Default or event which, with the giving of notice or passage
of time (or both), would constitute an Event of Default under the terms of this
Agreement, shall have occurred.
6.8 All other matters incidental to the Loan hereunder shall be satisfactory
to Lender.
ARTICLE VII - EVENTS OF DEFAULT
The occurrence of any one or more of the following events will constitute an
event of default (herein called an "Event of Default") by Borrower under this
Agreement:
7.1 Failure of Borrower punctually to make payment of any amount payable,
whether principal or interest, on any of the Liabilities within five (5) days
after the same becomes due and payable, whether at maturity, or at a date fixed
for any prepayment or partial prepayment, or by acceleration or otherwise.
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7.2 If any statement, representation, or warranty of Borrower, of
Subsidiaries, or of Guarantor made in this Agreement or in any of the other
Financing Documents at any time furnished by or on behalf of Borrower,
Subsidiaries, or Guarantor to Lender proves to have been untrue, incorrect,
misleading, or incomplete in any material respect as of the date made.
7.3 Failure of Borrower, Subsidiaries, or Guarantor punctually and fully to
perform, observe, discharge, or comply with any of the covenants set forth in
Article V of this Agreement.
7.4 Failure of Borrower or Guarantor punctually and fully to perform, observe,
discharge or comply with any of the other covenants set forth in this Agreement,
which failure is not cured within thirty (30) days after notice from Lender to
Borrower.
7.5 The occurrence of a default, an Event of Default, or an Event of Default
under any of the other Financing Documents or under any other agreement to which
Borrower, Guarantor and Lender are parties or under any other instrument
executed by Borrower in favor of Lender.
7.6 If Borrower, or any Guarantor becomes insolvent as defined in the Georgia
Uniform Commercial Code or makes an assignment for the benefit of creditors; or
if any action is brought by Borrower or any Guarantor seeking dissolution of
Borrower, or any Guarantor, or liquidation of its assets or seeking the
appointment of a trustee, interim trustee, receiver, or other custodian for any
of its property; or if Borrower or any Guarantor commences a voluntary case
under the Federal Bankruptcy Code; or if any reorganization or arrangement
proceeding is instituted by Borrower or any Guarantor for the settlement,
readjustment, composition or extension of any of its debts upon any terms; or if
any action or petition is otherwise brought by Borrower or any Guarantor seeking
similar relief or alleging that it is insolvent or unable to pay its debts as
they mature.
7.7 If any action is brought against Borrower or any Guarantor seeking
dissolution of Borrower or any Guarantor or liquidation of any of its assets or
seeking the appointment of a trustee, interim trustee, receiver or other
custodian for any of its property, and such action is consented to or acquiesced
in by Borrower or any Guarantor or is not dismissed within ninety (90) days of
the date upon which it was instituted; or if any proceeding under the Federal
Bankruptcy Code is instituted against Borrower or any Guarantor and (i) an order
for relief is entered in such proceeding or (ii) such proceeding is consented to
or acquiesced in by Borrower or any Guarantor or is not dismissed within ninety
(90) days of the date upon which it was instituted; or if any reorganization or
arrangement proceeding is instituted against Borrower or any Guarantor for the
settlement, readjustment, composition, or extension of any of its debts upon any
terms, and such proceeding is consented or acquiesced in by Borrower or any
Guarantor or is not dismissed within ninety (90) days of the date
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upon which it was instituted; or if any action or petition is otherwise brought
against Borrower or any Guarantor seeking similar relief or alleging that it is
insolvent, unable to pay its debts as they mature, or generally not paying its
debts as they become due, and such action or petition is consented to or
acquiesced in by Borrower or any Guarantor or is not dismissed within ninety
(90) days of the date upon which it was brought.
7.8 If Borrower or any Guarantor is in default on any indebtedness to another
person or an event has occurred which, with the giving of notice or passage of
time, or both, will cause Borrower or any Guarantor to be in default on any
indebtedness to another person, and the acceleration of the maturity of such
indebtedness would have a material adverse effect upon Borrower or any
Guarantor.
7.9 Any other material adverse change occurs in Borrower's or any Guarantor's
financial condition or means or ability to pay the Liabilities.
7.10 Sale, transfer or exchange either directly or indirectly, voluntarily or
involuntarily, of a twenty-five percent (25%) or greater stock interest of
Borrower or Guarantor.
7.11 Failure of Guarantor Xxxxxxx to provide to Lender Assignments of Life
Insurance Policies on his life in the face amount of $1,000,000.00. Failure to
maintain said coverage shall also constitute a default.
ARTICLE VIII - REMEDIES UPON DEFAULT
8.1 Upon the occurrence of an Event of Default:
(a) Any of the liabilities may (notwithstanding any provisions
contained therein or herein to the contrary), at the option of
Lender and upon thirty (30) days written notice to Borrower at
the Borrower's address provided herein by regular mail, which if
said default is not cured within said thirty (30) days, the
liabilities shall be declared due and payable, whereupon they
immediately will become due and payable.
(b) Lender may also, at its option, and upon notice as set forth in
8.1 (a), exercise from time to time any and all rights and
remedies available to it under this Agreement or under any of the
other Financing Documents, as well as exercise from time to time
any and all rights and remedies available to a secured party when
a debtor is in default under a security agreement as provided in
the Uniform Commercial Code of Georgia, or available to Lender
under any other applicable law or in equity, including without
limitation the right to any
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deficiency remaining after disposition of the Collateral.
(c) Borrower shall pay all of the reasonable costs and expenses
incurred by Lender in enforcing its rights under this Agreement
and the other Financing Documents. In the event any claim under
this Agreement or under any of the other Financing Documents is
referred to an attorney for collection, or collected by or
through an attorney, Borrower will be liable to Lender for all
expenses incurred by it in seeking to collect the liabilities or
to enforce its rights hereunder, in the other Financing Documents
or in the Collateral, including without limitation, reasonable
attorney's fees.
8.2 Any proceeds from disposition of any of the Collateral may be applied by
Lender first to the payment of all expenses and costs incurred by the Lender in
collecting such liabilities, in enforcing the rights of Lender under each and
every one of the Financing Documents and in collecting, retaking, holding,
preparing the Collateral for and advertising the sale or other disposition of
and realizing upon the Collateral, including, without limitation, reasonable
attorneys' fees as well as all other legal expenses and court costs. The balance
of such proceeds remaining may be applied by Lender toward the payment of such
of the liabilities and in such order of application as the Lender may from time
to time elect. Lender shall pay the surplus, if any, to Borrower. Borrower or
Guarantors shall pay the deficiency, if any, to Lender.
ARTICLE IX - MISCELLANEOUS
9.1 Time is of the essence of this Agreement.
9.2 This Agreement, together with all of the other Financing Documents,
supersedes all prior discussions, understandings and agreements by and between
Borrower, Guarantors and Lender with respect to the Loan and the Collateral, and
together they constitute the sole and entire agreement between the parties.
9.3 This Agreement and the security interests and security title conveyed
under the Financing Documents shall remain in full force and effect until such
time as (i) the liabilities are repaid in full, (ii) Lender is under no
obligation to make loans or other financial accommodations to Borrower, and
(iii) either party in writing notifies the other that it is thereby terminating
this Agreement.
9.4 Lender will not be deemed as a consequence of any act, delay, failure,
omission, or forbearance (including without limitation failure to exercise its
rights of accelerating the maturity of any of the Liabilities or other
indulgences granted from time to time by Lender) for any other reason:
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(1) to have waived, or to be estopped from exercising, any of its
rights or remedies under this Agreement or under any of the other
Financing Documents, or
(2) to have modified, changed, amended, terminated, rescinded, or
superseded any of the terms of this Agreement or of any of the
other Financing Documents unless such waiver, modification,
amendment, change, termination, rescission, or supersession is
expressed, in writing and signed by a duly authorized officer of
Lender. No single or partial exercise by Lender of any right or
remedy will preclude other or further exercise thereof or
preclude the exercise of any right or remedy, and a waiver
expressly made in writing on one occasion will be effective only
in that specific instance and only for the precise purpose for
which given, and will not be construed as a consent to or a
waiver of any right or remedy on any future occasion.
9.5 Except as provided otherwise in this Agreement, all notices and other
communications under this Agreement are to be in writing and are to be deemed to
have been duly given and to be effective upon delivery to the party to whom they
are directed. If sent by U.S. mail, first class, certified, return receipt
requested, postage prepaid, and addressed to Lender or to Borrower at their
respective addresses set forth below, such notices, demands and other
communications are to be deemed to have been delivered on the second business
day after being so posted. Either Lender or Borrower may, by written notice to
the other, designate a different address for receiving notices under this
Agreement; provided, however, that no such change of address will be effective
until written notice thereof is actually received by the party to whom such
change of address is sent.
9.6 Borrower may not, without the consent of Lender, assign any of its rights
or duties hereunder or any of the other Financing Documents.
9.7 All statements, reports, certificates, opinions and other documents or
information furnished to Lender under the Financing Documents shall be supplied
by Borrower and Guarantor without cost to Lender. Further, Borrower shall
reimburse Lender on demand for all out-of-pocket costs and expenses (including
legal fees) incurred by the Lender in connection with the preparation,
establishment, operation, and enforcement of the Financing Documents or the
protection or preservation of any right or claim of the Lender with respect to
the Financing Documents.
9.8 Borrower will pay all taxes (if any) in connection with this Agreement,
any of the other Financing Documents, any loan made in connection with this
Agreement, or the issuance or ownership of any of the Financing Documents and in
connection with any modification
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of said loan, this Agreement, or any of the Financing Documents (excluding,
however, any taxes imposed upon or measured by the net income of the Lender) and
will save the Lender harmless without limitation as to time against any and all
liabilities with respect to all such taxes. The obligations of Borrower under
this section shall survive the payment of the liabilities and the termination of
this Agreement.
9.9 Upon the occurrence of an Event of Default hereunder, Lender, without
notice or demand of any kind, may hold and set off against such of the
liabilities (whether matured or unmatured) as Lender may elect, any balance or
amount to the credit of Borrower in any deposit, agency, reserve, holdback or
other account of any nature whatsoever maintained by or on behalf of Borrower or
Guarantors with Lender at any of its offices, regardless of whether such
accounts are general or special and regardless of whether such accounts are
individual or joint. Any person purchasing an interest in debt obligations under
this Agreement held by Lender may exercise all rights of offset with respect to
such interest as fully as if such person were a holder of debt obligations
hereunder in the amount of such interest.
9.10 This Agreement and all of the other Financing Documents have been made and
delivered in the State of Georgia, and the terms, provisions and performance
thereof are in all respects, including without limitation all matters of
construction, interpretation, validity, enforcement, and performance, to be
construed in accordance with and governed by the laws of that State, including
without limitation, the Uniform Commercial Code of Georgia, as amended and in
effect on the date of this Agreement. Wherever possible, each provision of this
Agreement and of each and every one of the other Financing Documents is to be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision thereof is prohibited or invalid under such law, such
provision is to be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement or of any of the other Financing
Documents.
9.11 "Herein", "hereof" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular article, paragraph,
section or other subdivision.
9.12 The titles of the Articles appear as a matter of convenience only and
shall not affect the interpretation hereof.
9.13 Words importing the singular number shall include the plural number and
vice versa, and pronouns used shall be deemed to cover all genders.
9.14 Interpretation. No clause, term or provision of the parties hereto as a
--------------
result of such clause, term or provision having been drafted by such party, it
being the intention of the parties hereto
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that there be no presumptions made with respect to the drafting of said
Agreement.
IN WITNESS WHEREOF, Lender has executed this Agreement, and Borrower has
executed this Agreement and placed its seal hereon, all as of the day and year
first above written.
BORROWER:
INTERCEPT HOLDINGS, INC.
By:s/ Xxxx X. Xxxxxxx
-----------------------------
XXXX X. XXXXXXX
Title: Chairman and C.E.O.
Address: 0000 Xxxxxxxxx Xx.
----------------------
Xxxxxx, XX 00000
----------------------
(AFFIX CORPORATE SEAL)
Attest:s/ Xxxxx X. Xxxxxx
-------------------------
Title: Secretary (Assistant)
LENDER:
GEORGIA STATE BANK
By:s/ Xxx X. Xxxxxxx
-----------------------------
XXX XXXXXXX
Title: President
Address: 000 Xxxxxxxx Xxxx
-------------------
Xxxxxxxx, XX 00000
-------------------
GUARANTOR:
s/ Xxxx X. Xxxxxxx
--------------------------------
XXXX X. XXXXXXX, Individually
Address: Same as above
-------------------
___________________
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GUARANTOR:
INTERCEPT SYSTEMS, INC.
By: s/ Xxxx X. Xxxxxxx (SEAL)
----------------------------------
Title: CEO
Address: 0000 Xxx Xxxxxx, Xxxxx 000
--------------------------
Xxxxxxxx, XX 00000
--------------------------
GUARANTOR:
DATA SERVICES CORP.
By: s/ Xxxx X. Xxxxxxx (SEAL)
----------------------------------
Title: CFO/Treasurer
Address: 0000 Xxx Xxxxxx, Xxxxx 000
--------------------------
Xxxxxxxx, XX 00000
--------------------------
Attest:s/ Xxxxx X. Xxxxxx
-----------------------------------
Title: Secretary
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STATEMENT AND CONFIRMATION OF BUSINESS PURPOSE
----------------------------------------------
Commercial Promissory Note in
the original principal sum of
$3,000,000.00 dated the 17th
day of June, 1996.
Borrower: Intercept Holdings, Inc.
Lender: Georgia State Bank
The undersigned warrant, covenant, represent and confirm that the loan
referenced above and all loan proceeds disbursed in accordance with the loan
documentation of even date herewith are solely for business purposes.
No part of the loan or any proceeds resulting therefrom will be used for
personal, family or household purposes.
Signed, sealed and delivered INTERCEPT HOLDINGS, INC.
this 17th day of June, 1996.
s/ Xxx Xxxx By:s/ Xxxx X. Xxxxxxx
--------------------------- -----------------------------
Witness
Title:CEO
--------------------------
s/ Xxxxxx X. Xxxxxx
---------------------------
Notary Public
(AFFIX CORPORATE SEAL)
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