Exhibit 10.21
FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT (this "Amendment") is made this September 19, 2001 by
and between GOLDEN EAGLE LEASING, INC., an Arizona corporation ("Borrower"), and
XXXXXXX BANK, a federally chartered savings bank ("Lender").
Background
A. Lender has extended a revolving credit loan in the maximum amount of
$10,000,000 (the "Loan") to Borrower pursuant to the terms of the Loan and
Security Agreement dated August 24, 2001 (the "Loan Agreement").
B. The Revolving Credit Loan is evidenced by the revolving credit note
dated August 24, 2001 in the original principal amount of $10,000,000 (the
"Note"). The indebtedness of the Note is secured by Borrower's grant to Lender
of a security interest in the Collateral, as such term is defined in the Loan
Agreement.
C. The Loan has been guarantied by Hypercom Corporation, the Borrower's
parent corporation, pursuant to that certain guaranty dated as of August 24,
2001 (the "Guaranty" and together with the Loan Agreement, the Note, and all
other documents relating thereto, the "Loan Documents").
D. Borrower has requested that Lender modify the terms of the Loan
Documents to provide for the release of Lender's security interest in certain
Collateral under certain circumstances.
E. Lender has agreed to Borrower's request, subject to the terms and
conditions contained in this Amendment.
Agreement
In consideration of the Background, which is incorporated by this
reference, other good and valuable consideration, the receipt and sufficiency of
which is acknowledged, and the mutual promises and covenants contained in this
Amendment, the parties, intending to be bound legally, agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Loan Agreement.
2. Amendment of Definition of Eligible Lease Receivables. Section 1.(ai)
of the Loan Agreement is amended to read as follows:
"Eligible Lease Receivables" shall mean at the time of calculation or
determination, any bona fide Lease Receivables in which the Lender has a first
priority perfected security interest and assignment, and which arise from or in
connection with any bona fide Lease in which the Lender has a first priority
perfected security interest and assignment, and which Lease Receivables and/or
Leases, as the case may be, satisfy all of the following requirements:
(i) It is owing to Borrower and is subject to a validly perfected
security interest and assignment in favor of Lender having
priority over any other liens or encumbrances thereon;
(ii) It is a valid, legally enforceable obligation of the Account
Debtor thereunder and is not and may not become subject to any
offset, counterclaim or, in the opinion of Lender,
counterclaims, claims or other defense on the part of such
Account Debtor or to any claim on the part of such Account
Debtor denying liability thereunder;
(iii) It is subject to no Liens whatsoever, except for the security
interest or assignment of Lender hereunder (except for any
applicable rights of the lessee under such Lease);
(iv) The Leased Equipment regarding the Leases is subject to no
Liens whatsoever, except for the security interest or
assignment of Lender hereunder (and except for any applicable
rights of the lessee under such Lease), and the Borrower has
good and merchantable title to all of such Leased Equipment;
(v) It has (or any payment thereunder) not remained unpaid for a
period exceeding sixty (60) days from the date of the invoice
and/or any payment due date and the first scheduled payment is
due within thirty (30) days of the date of the Lease;
(vi) It does not arise out of transactions with any Account Debtor
located outside the United States of America or any
Governmental Authority;
(vii) Each Lease shall have an aggregate Gross Lease Receivable of
no more than $100,000.00;
(viii) The applicable Code Financing Statements in favor of the
Lender and/or the Borrower, as the case may be, regarding the
Leases, the Gross Lease Receivables and/or the Leased
Equipment under the applicable Lease are duly filed and record
in all appropriate offices and/or records;
(ix) Borrower is the sole and absolute owner of all the applicable
Leases, Gross Lease Receivables and Leased Equipment (subject
only to the Liens of the Lender hereunder);
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(x) The applicable Leased Equipment under each Lease shall have
been delivered and/or installed, shall be in good working
order and shall have been fully and duly accepted by the
lessee under the applicable Lease;
(xi) It has been newly originated by the Borrower and is not part
of a rewritten Lease;
(xii) It shall be duly and fully insured under such liability and
hazard insurance policies as the Lender may require in its
sole discretion, which policies shall be in such amounts, with
insurance carriers and on terms and conditions acceptable to
the Lender in its sole discretion, including, without
limitation, insuring the interest of the Borrower and its
successors and assigns and upon the Lender's request or
demand, naming the Lender as loss-payee and/or additional
inured, as appropriate;
(xiii) It shall be, or arise from, a commercial transaction only;
(xiv) Each of the Leases and any documentation relating thereto
shall be marked, and contain a legend, that the executed
counterpart marked "original" of the Lease and any
documentation related thereto is the original of the Lease and
all other counterparts are duplicates and to the extent, if
any, that the Lease and any documentation related thereto
constitutes Chattel Paper no security interest in the Lease
and documentation related thereto may be created through the
transfer or possession of any counterpart other than the
counterpart marked "Original";
(xv) Each Lease shall comply with all of the Borrower's credit
standards, policies and procedures, including, without
limitation, all risk acceptance criteria, which have been
previously submitted to, and approved by, the Lender prior to
the date of this Agreement;
(xvi) It does not arise out of any Lease regarding used or residual
equipment which has been returned or delivered to the Borrower
for any reason whatsoever or has been repossessed by the
Borrower;
(xvii) It shall not arise out of any restructured or rewritten Leases
or any Lease in default;
(xviii) It shall not be due from an Account Debtor which is affiliated
in any way whatsoever with any other Account Debtor with past
due payments of more than sixty (60) days;
(xix) Each Lease shall be in form and substance satisfactory in all
respects to the Lender, and shall contain, among other things,
"waiver-of-defense", "consent to assignment" and "consent to
security interest" provisions, and
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any similar or like provisions, in favor of an assignee or a
lender, as the case may be;
(xx) It shall be in full compliance with all laws, statutes, rules,
ordinances or governmental regulations of any kind whatsoever
including, without limitation, any broker, truth-in-lending or
leases or banking laws, rules or regulations;
(xxi) It shall be assigned to the Lender by the Borrower pursuant to
a duly executed collateral assignment which collateral
assignment shall be in form and substance acceptable to the
Lender in its sole discretion;
(xxii) That no power of attorney is used in connection with the
applicable Lease Receivable and/or Lease;
(xxiii) A notice of assignment letter regarding the Lease Receivables,
the Lease and the Leased Equipment in connection with any
Lease having aggregate Gross Lease Receivable of $50,000.00 or
more (or such lesser amount as lender, in its sole discretion,
may hereafter designate) shall be duly executed by the Account
Debtor, which notice of assignment letter shall be in form and
substance satisfactory in all respects to the Lender;
(xxiv) It does not arise out of transactions with any creditor of the
Borrower or any Guarantor or any employee, officer, partner,
Affiliate or Subsidiary of the Borrower and/or or any
Guarantor;
(xxv) The original Leases, schedules, acceptance certificates,
riders, supplements, purchase options, exhibits, addendum, and
any and all other documents or instruments executed and/or
delivered in connection with, the Leases (including, without
limitation, any guarantees or undertakings of any kind
whatsoever of the same), shall have been delivered to the
Lender or, if acceptable to the Lender (in its sole
discretion), to the Trustee, on the Lender's behalf pursuant
to the terms of this Agreement and/or the Trust Agreement, or
any of the same which the Lender does not require to be
delivered to it or to the Trustee shall be held by the
Borrower in trust as trustee of an express trust for the
Lender shall be promptly delivered to the Lender upon the
Lender's request or demand for the same; and
(xxvi) That any and all documents and/or instruments that the Lender
shall request in connection with each such applicable Lease
Receivable and/or Lease and/or Leased Equipment shall be
promptly executed and/or delivered to the Lender or, if
acceptable to the Lender (in its sole discretion), to the
Trustee, on the Lender's behalf pursuant to the terms of this
Agreement and/or the Trust Agreement, upon the Lender's
request for the same.
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In the event of any dispute as to whether a Lease Receivable
is or has ceased to be an Eligible Lease Receivable, the
decision of the Lender shall control in its sole discretion.
Any Eligible Lease Receivable which the Lender subsequently
determines to be no longer eligible or acceptable hereunder at
any time shall nevertheless be and remain at all times part of
the Collateral except as otherwise provided in Section 7.5
hereof.
3. Release of Ineligible Lease Receivables. The following shall be
added as Section 7.5:
7.5 Release of Ineligible Lease Receivables Once per calendar
month, Borrower may request the release of the Lender's
security interest in those Eligible Lease Receivables which no
longer meet the qualifications of an Eligible Lease Receivable
and are no longer listed in any Lease Certificate or Borrowing
Base Certificate upon which a Revolving Credit Advance has
been based (an "Ineligible Lease Receivable"). Upon receipt of
such request, and provided that (i) the then outstanding
balance of the Loan does not exceed the Borrowing
Availability, and (ii) no Defaults shall have occurred not
cured within the applicable cure period if any, or waived by
Lender, Lender shall agree to release its security interest in
such Ineligible Lease Receivable by notifying Custodian of its
approval of the Borrower's request. Any Ineligible Lease
Receivable for which release is requested, but not approved by
Lender shall remain part of the Collateral.
4. Representations and Warranties. All of the representations,
warranties and covenants contained in the Loan Documents are true and correct on
and as of the date hereof.
5. Conditions Precedent. Lender's obligations hereunder are subject to
the satisfaction as of the date of this Amendment of each of the following
conditions precedent which shall be in form, scope and substance satisfactory to
Lender and its counsel:
(a) Evidence of Corporate Action. Lender shall have received
certified copies of all Board of Director resolutions (in form and substance
satisfactory to Lender) made by Borrower to authorize the execution, delivery
and performance of this Amendment, together with copies of all amendments to
Borrower's Articles of Incorporation and By-Laws adopted since August 24, 2001,
and such other papers as Lender or its counsel may reasonably require.
(b) Guarantor's Documents. Lender shall have received a
Reaffirmation of Guaranty, duly executed by the Guarantor, in form and substance
satisfactory to Lender and its counsel.
(c) Legal Fees. Borrower shall have reimbursed Lender for the legal
fees and disbursements of Xxxxxxx & Xxxxxxx LLP, counsel to Lender, in
connection with the negotiation, review, execution and delivery of all of the
documents prepared with respect to the transactions contemplated herein, plus
related disbursements.
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(d) Other Documents. Borrower shall have delivered to Lender such
other documents as Lender or its counsel reasonably require.
5. Reaffirmation of the Obligations. The Borrower acknowledges and
reaffirms the Obligations, the Borrower's liability for repayment thereof and
all previous grants of collateral by the Borrower to secure the Obligations. The
Borrower acknowledges that no setoff, counterclaim or defense exists with
respect to the Borrower's liability under the Obligations and that no claim
against the Lender exists, and waives its right to raise any such setoff,
counterclaim, defense or claim against the Lender arising out of occurrences on
or prior to the date hereof.
6. Loan Documents. Except to the extent explicitly modified by this
Amendment or by any document contemplated by, or executed pursuant to the
provisions of this Amendment, all of the provisions of the Loan Documents shall
remain in full force and effect, including, without limitation, all
representations, warranties, negative covenants, affirmative covenants, and
events of default. In addition, as of the date hereof, the Borrower represents
that the Borrower is in full compliance with all provisions of the Loan
Document, and no Event of Default, as specified in the Loan Documents, and no
event which, with the giving of notice or passage of time or both, would
constitute an Event of Default, has occurred. Any default under any of the Loan
Documents shall constitute a default hereunder.
7. Other.
(a) Prejudgement Remedy Waiver. THE BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS TO WHICH THIS AMENDMENT RELATE ARE COMMERCIAL TRANSACTIONS. THE
BORROWER HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ITS RIGHTS TO NOTICE AND
HEARING UNDER CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES, AS AMENDED AND
IN EFFECT ON THE DATE HEREOF, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL
LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY OR OTHER RIGHT OR REMEDY THAT THE
LENDER MAY ELECT TO USE OR OF WHICH IT MAY AVAIL ITSELF. THE BORROWER FURTHER
WAIVES, TO THE GREATEST EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL PRESENT AND
FUTURE VALUATION, APPRAISEMENT, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS.
THE BORROWER FURTHER WAIVES ANY REQUIREMENT THAT LENDER OBTAIN A BOND OR OTHER
SIMILAR DEVICE IN CONNECTION WITH THE EXERCISE OF ANY REMEDY OR THE ENFORCEMENT
OF ANY RIGHT HEREUNDER.
(b) Governing Law. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS ARISING UNDER
THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT APPLICABLE TO CONTRACTS
MADE AND
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PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
(c) Jury Waiver. THE BORROWER WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AMENDMENT OR
UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED
HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE
LOAN PROVIDED FOR HEREIN, OR ANY CONDUCT RELATING TO THE NEGOTIATION,
ADMINISTRATION OR ENFORCEMENT OF SUCH LOAN OR ARISING FROM THE DEBTOR/CREDITOR
RELATIONSHIP OF THE BORROWER AND THE LENDER HERETO. THE BORROWER ACKNOWLEDGES
THAT THIS WAIVER MAY DEPRIVE IT OF AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS
KNOWINGLY BEEN AGREED TO BY THE BORROWER.
SIGNATURE PAGE TO FOLLOW
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The parties hereto have executed this Amendment as of the date first
written above.
GOLDEN EAGLE LEASING, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxxx
Title:
XXXXXXX BANK
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Assistant Vice President
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