Exhibit 10.1

 

Execution Version

 

AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT

 

AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT, dated as of July 30, 2018 (this
“Amendment No. 1”), is by and among SECURUS 365, INC., a Delaware corporation,
EVANCE, INC., a Delaware corporation, EVANCE CAPITAL, INC., a Delaware
corporation, OMNISOFT, INC., a Delaware corporation and CROWDPAY.US, INC., a New
York corporation, as borrowers (each a “Borrower” and collectively,
“Borrowers”), THE OLB GROUP, INC., a Delaware corporation, as parent guarantor
(“Parent Guarantor”), the financial institutions or other entities from time to
time party hereto, each as a Lender and GACP FINANCE CO., LLC as agent for the
Lenders (in such capacity, the “Agent”).

 

W I T N E S S E T H :

 

WHEREAS, Agent, Lenders, Borrowers and others have entered into financing
arrangements pursuant to which Lenders (or Agent on behalf of Lenders) have made
and may make loans and advances and provide other financial accommodations to
Borrowers as set forth in the Loan and Security Agreement, dated as of April 9,
2018 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”) and the other Loan
Documents;

 

WHEREAS, an Event of Default has occurred under the Credit Agreement (the “First
Prepayment Default”) pursuant to Section 7.1(a) of the Credit Agreement as a
result of Borrowers’ failure to make the First Repayment on July 15, 2018 as
required by Section 1.1(b) of the Credit Agreement;

 

WHEREAS, Events of Default have occurred under the Credit Agreement (the
“Reporting Defaults”) pursuant to Section 7.1(c) of the Credit Agreement as a
result of (i) Borrowers’ failure to deliver to Agent all such monthly financial
statements, information and certifications required by Section 5.15(b)(ii) of
the Credit Agreement and (ii) Borrowers’ failure to deliver to Agent a
Compliance Certificate signed by an Authorized Officer of Parent Guarantor,
confirming compliance with the financial covenants set forth in Section 5.24 of
the Credit Agreement as of the end of May, 2018 and June, 2018 as required by
Section 5.15(c)(iv) of the Credit Agreement (the First Repayment Default and the
Reporting Defaults being referred to together as the “Existing Defaults”);

 

WHEREAS, Section 10.5 of the Credit Agreement provides that, among other things,
the Borrowers, the Agent and the Required Lenders may (i) make certain
amendments to the Credit Agreement and the other Loan Documents for certain
purposes and (ii) waive or release an Event of Default;

 

WHEREAS, the Loan Parties have requested that Agent and the Lenders waive the
Existing Defaults and make certain amendments to the Credit Agreement, and Agent
and the Lenders are agreeable to such request only on the terms and conditions
set forth herein; and

 

WHEREAS, by this Amendment No. 1, Agent, Lenders signatory hereto and Loan
Parties signatory hereto intend to evidence such amendments;

 

 

 

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and
covenants contained herein, the parties hereto agree as follows:

 

1. Interpretation. For purposes of this Amendment No. 1, all terms used herein
which are not otherwise defined herein, including, but not limited to, those
terms used in the recitals hereto, shall have the respective meanings assigned
thereto in the Credit Agreement as amended by this Amendment No. 1.

 

2. Waiver of Existing Defaults. In reliance upon the representations and
warranties of the Loan Parties set forth in Section 4 below and subject to the
conditions to effectiveness set forth in Section 5 below, Agent and the Lenders
hereby irrevocably waive the Existing Defaults. Each Loan Party acknowledges and
agrees that (a) the waiver contained herein relates only to the Existing
Defaults and is effective solely for the purposes set forth herein and shall be
limited precisely as written and shall not be deemed to (x) waive, release,
modify or limit any Loan Party’s obligations to otherwise comply with all terms
and conditions of the Credit Agreement and the other Loan Documents, (y) waive
any other existing or future Events of Default, or (z) prejudice any right or
rights that Agent or the Lenders may have or may have in the future under or in
connection with the Credit Agreement or any other Loan Document (all of which
rights and remedies are expressly reserved), except as expressly provided
herein, and (b) the granting of the waiver hereunder shall not impose or imply
an obligation on Agent or the Lenders to grant a waiver on any future occasion,
whether on a similar matter or otherwise.

 

3. Amendments.

 

(a) Section 1.1(b)(i) of the Credit Agreement is hereby amended by replacing the
reference to “July 15, 2018” therein with “July 30, 2018”.

 

(b) Section 1.8(a) of the Credit Agreement is hereby amended by replacing the
first sentence thereof in its entirety with the following:

 

“Within one Business Day of the date of receipt by any Loan Party or any of its
Subsidiaries of the Net Cash Proceeds of any voluntary or involuntary sale or
disposition in excess of $100,000 in any calendar year by any Loan Party or any
of its Subsidiaries (including Net Cash Proceeds of insurance or arising from
casualty losses or condemnations and payments in lieu thereof) of assets or
other property other than sales of Inventory in the ordinary course of business
and the Permitted MOMT Share Sale; provided, that, in the case of the Permitted
MOMT Share Sale no Default or Event of Default has occurred or is continuing at
the time such sale is consummated, then Borrowers shall prepay the outstanding
principal amount of the Term Loan, in an amount equal to 100% of such Net Cash
Proceeds (including condemnation awards and payments in lieu thereof) received
by such Person in connection with such sales or dispositions.”

 

(c) Section 5.15(a) of the Credit Agreement is hereby amended and restated in
its entirety to read:

 

“(a) Annual Financial Statements. (i) For the Fiscal Years ended December 31,
2016 and December 31, 2017, not later than August 23, 2018 and (ii) not later
than ninety days after the close of each Fiscal Year thereafter, audited,
consolidated financial statements of Parent Guarantor and its Subsidiaries as of
the end of such Fiscal Year, including balance sheet, income statement, and
statement of cash flow for such Fiscal Year audited (without qualification) by a
firm of independent certified public accountants of recognized standing selected
by Parent Guarantor but acceptable to Agent, together with a copy of any
management letter issued in connection therewith. Concurrently with the delivery
of such financial statements, Parent Guarantor shall deliver to Agent a
Compliance Certificate, (A) indicating whether Parent Guarantor is in compliance
with each of the covenants specified in Section 5.24, and setting forth a
detailed calculation of such covenants, and (B) indicating whether any Default
or Event of Default is then in existence.”

 

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(d) Section 5.15(b)(ii) of the Credit Agreement is hereby amended and restated
in its entirety to read:

 

“(ii) (A) (1) not later than July 30, 2018 for the month ended May, 2018 and (2)
not later than forty-five (45) days after the end of each month thereafter,
including the last fiscal month of each Fiscal Year, unaudited interim
consolidated financial statements of Parent Guarantor and its Subsidiaries as of
the end of such fiscal month and of the portion of such Fiscal Year then
elapsed, including balance sheet, income statement, statement of cash flow, and
results of their respective operations during such fiscal month and the
then-elapsed portion of the Fiscal Year, together with comparative figures for
the same periods in the immediately preceding Fiscal Year, in each case on a
consolidated and consolidating basis, certified by an Authorized Officer of
Parent Guarantor as prepared in accordance with GAAP. Concurrently with the
delivery of such financial statements, Parent Guarantor shall deliver to Agent a
Compliance Certificate, indicating whether (A) Parent Guarantor is in compliance
with each of the covenants specified in Section 5.24, and setting forth a
detailed calculation of such covenants, and (B) any Default or Event of Default
is then in existence;”

 

(e) Section 5.15(c)(iv) of the Credit Agreement is hereby deleted in its
entirety.

 

(f) Section 5.23(d) of the Credit Agreement is hereby amended and restated in
its entirety to read:

 

“(d) sell, transfer, return, or dispose of any Collateral or other assets with
an aggregate value in excess of $100,000 in any calendar year other than
Permitted Investments, the Permitted MOMT Share Sale and sales of Inventory in
the ordinary course of business;”

 

(g) Section 5.23(n) of the Credit Agreement is hereby amended and restated in
its entirety to read:

 

“(n) make, or cause or suffer to permit any Loan Party or any of its
Subsidiaries to make, any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness (except the Permitted Bridge Loan Indebtedness
including payments of monthly interest as set forth in the Bridge Loan Note, or
to the extent permitted pursuant to the terms of the definitive documentation
evidencing such subordination, which documentation shall be reasonably
acceptable to the Agent in all respects); provided, that no payment shall be
permitted in respect of any Subordinated Indebtedness described in clause (b) of
the definition thereof without the prior written consent of the Agent whether or
not any express subordination arrangement exists in respect thereof and provided
further, that, no payment shall be permitted in respect of any principal amount
of Permitted Bridge Loan Indebtedness unless (i) (A) such payment is comprised
solely of Net Cash Proceeds from the sale of MOMT Shares or (B) such payment
occurs after the Second Repayment and (ii) no Default or Event of Default has
occurred or is continuing at the time such payment is made;”

 

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(h) Section 5.23(o) of the Credit Agreement is hereby amended and restated in
its entirety to read:

 

“(o) enter into any transaction with an Affiliate (other than a Loan Party)
other than (i) the Bridge Loan and (ii) on arms-length terms disclosed to Agent
in writing;”

 

(i) Schedule B to the Credit Agreement is hereby amended as follows:

 

(i) by adding the following definitions alphabetically:

 

““Bridge Loan Note” means that certain Subordinated Promissory Note dated as of
the date hereof by and among Parent Guarantor, as borrower and John Herzog, an
individual residing in the State of Connecticut, as lender, as in effect on the
date hereof.”

 

““MOMT Shares” means, subject to adjustments for stock splits, stock dividends,
recapitalizations, reclassifications or similar changes to such shares, 100,000
shares of common stock of MoneyOnMobile, Inc. beneficially owned by the Parent
Guarantor.”

 

““Permitted Bridge Loan Indebtedness” means Indebtedness under the Bridge Loan
Note; provided, that, all such Indebtedness is secured only by a Lien on the
MOMT Shares and other property not constituting Collateral.”

 

““Permitted MOMT Share Sale” means the sale of all or substantially all of the
MOMT Shares (in one or more transactions) to one or more Persons that are not
Affiliates of any Loan Party, for fair market value.”

 

(ii) by adding the following new clause (m) to the definition of “Excluded
Property” therein:

 

“; and (m) the MOMT Shares and any dividends or distributions on the MOMT
Shares.”

 

(iii) by replacing the definition of “Permitted Indebtedness” therein in its
entirety to read:

 

““Permitted Indebtedness” means: (i) the Obligations; (ii) the Indebtedness
existing on the date hereof described in Section 6 of the Disclosure Schedule;
in each case along with extensions, refinancings, modifications, amendments and
restatements thereof, provided, that (a) the principal amount thereof is not
increased, and (b) the terms thereof are not modified to impose more burdensome
terms upon any Loan Party; (iii) capitalized leases and purchase money
Indebtedness secured by Permitted Liens in an aggregate amount not exceeding
$100,000 at any time outstanding; (iv) Indebtedness incurred as a result of
endorsing negotiable instruments received in the ordinary course of business;
(v) deferred compensation to officers, employees and directors existing as of
the Closing Date in the amounts set forth on Section 6 of the Disclosure
Schedule; (vi) the Permitted Bridge Loan Indebtedness and (vii) other
Indebtedness in an amount not to exceed $100,000 at any time outstanding.”

 

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(iv) by replacing the definition of “Permitted Liens” therein in its entirety to
read:

 

““Permitted Liens” means (a) purchase money security interests in specific items
of Equipment securing Permitted Indebtedness described under clause (iii) of the
definition of Permitted Indebtedness; (b) Liens disclosed in Section 7 of the
Disclosure Schedule; provided, however, that to qualify as a Permitted Lien, any
such Lien described in Section 7 of the Disclosure Schedule shall only secure
the Indebtedness that it secures on the Closing Date and any permitted
refinancing in respect thereof; (c) liens for taxes, fees, assessments, or other
governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings (which proceedings have the effect of
preventing the enforcement of such lien) for which adequate reserves in
accordance with GAAP are being maintained, provided the same have no priority
over any of Agent’s security interests; (d) liens of materialmen, mechanics,
carriers, or other similar liens arising in the ordinary course of business and
securing obligations which are not delinquent or are being contested in good
faith by appropriate proceedings (which proceedings have the effect of
preventing the enforcement of such lien) for which adequate reserves in
accordance with GAAP are being maintained; (e) liens which constitute banker’s
liens, rights of set-off, or similar rights as to deposit accounts or other
funds maintained with a bank or other financial institution (but only to the
extent such banker’s liens, rights of set-off or other rights are in respect of
customary service charges relative to such deposit accounts and other funds, and
not in respect of any loans or other extensions of credit by such bank or other
financial institution to any Loan Party); (f) cash deposits or pledges of an
aggregate amount not to exceed $100,000 to secure the payment of worker’s
compensation, unemployment insurance, or other social security benefits or
obligations, public or statutory obligations, surety or appeal bonds, bid or
performance bonds, or other obligations of a like nature incurred in the
ordinary course of business; (g) pledges and deposits of cash in the ordinary
course of business securing liability for reimbursement or indemnification
obligations of (including obligations in respect of letters of credit or bank
guarantees for the benefit of) insurance carriers providing property, casualty
or liability insurance; (h) Liens on cash advances in favor of the seller of any
property to be acquired in an Investment not prohibited under this Agreement to
be applied against the purchase price for such Investment permitted by this
Agreement; (i) purported Liens evidenced by the filing of precautionary UCC (or
equivalent statutes) financing statements or similar public filings; (j) Liens
for amounts pledged pursuant to processing agreements in the ordinary course of
business, (k) the Lien in the MOMT Shares securing Permitted Indebtedness
described under clause (vi) of the definition of Permitted Indebtedness and (j)
Liens securing Indebtedness or other obligations in an aggregate principal
amount at any time outstanding not to exceed $100,000.”

 

4. Representations and Warranties. Each Loan Party, jointly and severally,
hereby:

 

(a) reaffirms all representations and warranties made to Agent and Lenders under
the Credit Agreement and all of the other Loan Documents and confirms that each
of the representations and warranties made by Loan Parties in or pursuant to the
Credit Agreement, the other Loan Documents and any related agreements to which
it is a party, and each of the representations and warranties contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement, the other Loan Documents or any
related agreement shall be true and correct in all material respects on and as
of such date as if made on and as of such date (or to the extent any
representations or warranties are expressly made solely as of an earlier date,
such representations and warranties shall be true and correct in all material
respects as of such earlier date); provided that any representation and warranty
that is qualified as to “materiality”, “Material Adverse Effect” or similar
language shall be true and correct (after giving effect to any qualification
therein) in all respects on and as of such date;

 

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(b) reaffirms all of the covenants contained in the Credit Agreement;

 

(c) represents and warrants that, other than the Existing Defaults, no Default
or Event of Default has occurred and is continuing;

 

(d) represents and warrants that the execution, delivery and performance by each
Loan Party of this Amendment No. 1 and the other documents, agreements and
instruments executed by any Loan Party in connection herewith (collectively,
together with this Amendment No. 1, the “Amendment Documents”) and the
consummation of the transactions contemplated hereby or thereby, are within such
Loan Party’s powers, have been duly authorized by all necessary organizational
action, and do not contravene (i) the charter or by-laws or other organizational
or governing documents of such Loan Party or (ii) any law or any contractual
restriction binding on or affecting any Loan Party, except, for purposes of this
clause (ii), to the extent such contravention would not reasonably be expected
to have a Material Adverse Effect;

 

(e) represents and warrants that no authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority or any other
third party is required for the due execution, delivery and performance by any
Loan Party of any Amendment Document to which it is a party that has not already
been obtained if the failure to obtain such authorization, approval or other
action could reasonably be expected to result in a Material Adverse Effect; and

 

(f) represents and warrants that each Amendment Document has been duly executed
and delivered by each Loan Party thereto. This Amendment No. 1 constitutes, and
each other Amendment Document will constitute upon execution, the legal, valid
and binding obligation of each Loan Party thereto enforceable against such Loan
Party in accordance with its respective terms subject to the effect of any
applicable bankruptcy, insolvency, reorganization or moratorium or similar laws
affecting the rights of creditors generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).

 

5. Conditions Precedent. This Amendment No. 1 shall be effective upon the
satisfaction of each of the following conditions precedent:

 

(a) Agent shall have received counterparts of this Amendment No. 1, duly
authorized, executed and delivered by Borrowers, Parent Guarantor, Agent and the
Required Lenders;

 

(b) Agent shall have received counterparts of the Bridge Loan Note, duly
authorized, executed and delivered by all parties thereto;

 

(c) Other than the Existing Defaults, no Default or Event of Default shall have
occurred and be continuing; and

 

(d) The representations and warranties contained in Section 4 and in the Credit
Agreement shall be true and correct in all material respects on and as of such
date as if made on and as of such date (except to the extent expressly relating
to an earlier date, in which case such representation and warranty shall be true
and correct as of such earlier date).

 

6. General.

 

(a) Effect of this Amendment No. 1. Except as expressly provided herein, no
other consents, waivers, changes or modifications to the Loan Documents are
intended or implied, and in all other respects the Loan Documents are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
date hereof.

 

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(b) Fees. Borrower agrees to pay on demand all expenses of Agent and Lenders in
connection with the preparation, negotiation, execution, delivery and
administration of this Amendment No. 1.

 

(c) Governing Law. This Amendment No. 1 shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to conflicts
of laws principles thereof.

 

(d) Waiver of Jury Trial. SECTION 10.16 OF THE CREDIT AGREEMENT IS HEREBY
INCORPORATED BY REFERENCE INTO THIS AMENDMENT NO. 1 MUTATIS MUTANDIS AND SHALL
APPLY HERETO AS IF ORIGINALLY MADE A PART HEREOF.

 

(e) Binding Effect. This Amendment No. 1 shall bind and inure to the benefit of
the respective successors and permitted assigns of each of the parties hereto.

 

(f) Counterparts, etc. This Amendment No. 1 may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment No. 1 by telecopier or by
electronic transmission of a pdf formatted counterpart shall be effective as
delivery of a manually executed counterpart of this Amendment No. 1.

 

(g) Loan Document. This Amendment No. 1 constitutes a Loan Document.

 

(h) Reaffirmation. Each of the undersigned Loan Parties acknowledges (i) all of
its Obligations under the Credit Agreement and each other Loan Document to which
it is a party are reaffirmed and remain in full force and effect on a continuous
basis, (ii) its grant of security interests pursuant to the Loan Documents are
reaffirmed and remain in full force and effect after giving effect to this
Amendment No. 1, (iii) the Obligations include, among other things and without
limitation, the due and punctual payment of the principal of, interest on, and
premium (if any) on the Loans and (iv) except as expressly provided herein, the
execution of this Amendment No. 1 shall not operate as a waiver of any right,
power or remedy of Agent or any Lender, constitute a waiver of any provision of
any of the Loan Documents or serve to effect a novation of the Obligations.

 

(i) Release. In consideration of the agreements of Agent and Lenders contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each Loan Party signatory hereto,
on behalf of itself and its respective successors, assigns, and other legal
representatives, hereby absolutely, unconditionally and irrevocably releases,
remises and forever discharges Agent and Lenders, and their successors and
assigns, and their present and former shareholders, affiliates, subsidiaries,
divisions, predecessors, directors, officers, attorneys, employees, agents and
other representatives (Agent, each Lender and all such other Persons being
hereinafter referred to collectively as the “Releasees” and individually as a
“Releasee”), of and from all demands, actions, causes of action, suits,
covenants, contracts, controversies, agreements, promises, sums of money,
accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set off, demands and liabilities whatsoever
(individually, a “Claim” and collectively, “Claims”) of every name and nature,
known as of the date of this Amendment No. 1, both at law and in equity, which
each Loan Party signatory hereto, or any of its respective successors, assigns,
or other legal representatives may now or hereafter own, hold, have or claim to
have against the Releasees or any of them for, upon, or by reason of any
circumstance, action, cause or thing whatsoever which arises at any time on or
prior to the day and date of this Amendment No. 1, in each case for or on
account of, or in relation to, or in any way in connection with any of the
Credit Agreement, or any of the other Loan Documents or transactions thereunder
or related thereto.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be
duly executed and delivered by their authorized officers as of the day and year
first above written.

 

  THE OLB GROUP, INC.,   as Parent Guarantor         By: /s/ Ronny Yakov    
Name: Ronny Yakov     Title: CEO         SECURUS365, INC.,   as a Borrower      
By: /s/ Ronny Yakov     Name: Ronny Yakov     Title: CEO         EVANCE, INC.,  
as a Borrower       By: /s/ Ronny Yakov     Name: Ronny Yakov     Title: CEO    
    EVANCE CAPITAL, INC.,   as a Borrower       By: /s/ Ronny Yakov     Name:
Ronny Yakov     Title: CEO         OMNISOFT, INC.,   as a Borrower       By: /s/
Ronny Yakov     Name: Ronny Yakov     Title: CEO         CROWDPAY.US, INC.,   as
a Borrower       By: /s/ Ronny Yakov     Name: Ronny Yakov     Title: CEO

 

Amendment No. 1 to Credit Agreement

 

 

 

 

AGENT: GACP FINANCE CO., LLC, as Agent         By: /s/ John Ahn_   Name: John
Ahn   Title: President       LENDERS: GACP I, L.P., as Lender         By: /s/
John Ahn_   Name: John Ahn   Title: President

 

Amendment No. 1 to Credit Agreement