Exhibit 10.28
WAIVER AND AMENDMENT NO. 1
TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 1 ("Amendment") is entered into as of
October 30, 2001, by and among TransAct Technologies Incorporated, a Delaware
corporation having its principal place of business at 0 Xxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxxxx 00000 ("Borrower"), LaSalle Business Credit, Inc. having its
principal place of business at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
with an office located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("LaSalle"), the undersigned financial institutions (each individually a
"Lender" and, collectively, "Lenders") and LaSalle as agent for the Lenders
(LaSalle, in such capacity, "Agent").
BACKGROUND
Pursuant to a Loan and Security Agreement dated as of May 25, 2001,
(as may be amended, restated, supplemented or otherwise modified from time to
time, the "Loan Agreement") by and among Borrower, Agent and Lenders, Agent and
Lenders provide Borrower with certain financial accommodations.
Borrower has requested that, among other things, Agent and Lenders
(i) waive an existing Event of Default with respect to Minimum EBITDA contained
in the Loan Agreement, (ii) amend certain financial covenants contained in the
Loan Agreement and (iii) amend certain other provisions of the Loan Agreement
and Agent and Lenders are willing to do so on the terms and conditions hereafter
set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrower by Agent
and Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 5 below, the Loan Agreement is hereby
amended as follows:
(a) Article 1 is hereby amended as follows:
(i) the following defined terms are hereby added in their
appropriate alphabetical order:
"Amendment No. 1" shall mean the Waiver and Amendment No. 1 to this
Agreement dated as of October 30, 2001.
"Amendment No. 1 Effective Date" shall mean the date on which all of
the conditions precedent contained in Section 5 of Amendment No. 1 shall have
been satisfied.
(ii) the following defined term is hereby amended in its entirety to
provide as follows:
"APPLICABLE MARGIN" shall mean the percentage set forth below for
the applicable Type and Kind of Loan calculated based on Borrower achieving the
financial test set forth below:
APPLICABLE MARGIN
Revolving Loans Term Loans Equipment Loans
Level Prime LIBOR Prime LIBOR Prime LIBOR
1 1.00% 3.50% 1.50% 4.00% 1.50% 4.00%
2 .75% 3.25% 1.25% 3.75% 1.25% 3.75%
The Applicable Margin shall be set at Level 1 on the Closing Date
and shall not be subject to decrease prior to the receipt by Agent of the annual
financial statements of Borrower as required under paragraph 12(d) hereof for
the Fiscal Year ending December 31, 2001 (the "2001 Annual Financial
Statements"). If (a) Borrower's EBITDA for the Fiscal Year ending December 31,
2001 as calculated using the financial information from the 2001 Annual
Financial Statements, is equal to or greater than $2,650,000, (b) the 2001
Annual Financial Statements have been delivered in accordance with the
requirements set forth in paragraph 12(d) hereof and (c) no Default or Event of
Default has occurred and is continuing on the date the 2001 Annual Financial
Statements are delivered, the Applicable Margin shall be adjusted to Level 2. If
any of the foregoing conditions are not satisfied, the Applicable Margin shall
permanently remain at Level 1. If the Applicable Margin is adjusted to Level 2
in accordance with this paragraph, such change shall be effective thirty (30)
days after Agent receives the 2001 Annual Financial Statements.
(b) Paragraph 12(e) is hereby amended in its entirety as follows:
"(e) As soon as practicable and in any event not later than
(i) November 30, 2001 with respect to the Fiscal Year commencing January 1, 2002
and (ii) thirty (30) days after the beginning of each Fiscal Year thereafter,
projected balance sheets, statements of income and cash flow for Borrower on a
consolidated basis and a consolidating basis, for each of the twelve (12) months
during such Fiscal Year, which shall include the assumptions used therein,
together with appropriate supporting details as requested by Agent (hereinafter
referred to as "Projections")."
(c) Paragraph 15(p) is hereby amended in its entirety to provide as
follows:
"(p) Borrower on a consolidated basis shall maintain and keep in
full force and effect each of the financial covenants set forth below. The
calculation and determination of each such financial covenant, and all
accounting terms contained therein, shall be so calculated and construed in
accordance with GAAP, applied on a basis consistent with the financial
statements of Borrower delivered on or before the Closing Date:
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(i) Tangible Net Worth. Borrower on a consolidated basis shall
maintain as of the end of each month a Tangible Net Worth of not less than the
amount set forth below shown opposite such month:
MONTH ENDED TANGIBLE NET WORTH
November 30, 2001 $10,200,000
December 31, 2001 $9,340,000
January 31, 2002 $10,100,000
February 28, 2002 $10,100,000
March 31, 2002 $10,100,000
April 30, 2002 $10,200,000
May 31, 2002 $10,200,000
June 30, 2002 $10,200,000
July 31, 2002 $10,900,000
August 31, 2002 $10,900,000
September 30, 2002 $10,900,000
October 31, 2002 $11,100,000
November 30, 2002 $11,100,000
December 31, 2002 $11,100,000
March 31, 2003 and each month The sum of (A) $11,100,000
thereafter (each such month, plus (B) an aggregate amount equal to
the "current month") eighty five percent (85%) of the
cumulative net income after taxes of
Borrower on a consolidated basis for
the period commencing on January 1,
2003 through and including the last
day of the current month, provided,
however, that such cumulative amount
shall not be reduced by the amount of
any net loss before taxes of Borrower
on a consolidated basis for any
preceding month.
(ii) Fixed Charge Coverage Ratio. Borrower on a consolidated basis
shall maintain as of the end of each month a Fixed Charge Coverage Ratio of not
less than the ratio set forth below shown opposite such month with respect to
the twelve (12) months then ended.
MONTH ENDED FIXED CHARGE COVERAGE RATIO
January 31, 2002 through and 1.0 to 1.0
including March 31, 2002
June 30, 2002 and each month 1.15 to 1.0
thereafter
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(iii) Capital Expenditures. Borrower on a consolidated basis shall
not make Capital Expenditures of an aggregate amount of more than (x) two
million two hundred thousand dollars ($2,200,000) during the Fiscal Year ending
December 31, 2001 and (y) two million five hundred thousand dollars ($2,500,000)
during any Fiscal Year thereafter.
(iv) Minimum Consolidated EBITDA. Borrower on a consolidated basis
shall maintain EBITDA of not less than the amounts set forth below shown
opposite such month with respect to the twelve (12) months then ended, provided
that the applicable period being tested on the fiscal quarter ending November
30, 2001 will be the eleven (11) months then ended:
FISCAL QUARTER ENDED MINIMUM CONSOLIDATED EBITDA
November 30, 2001 ($250,000)
December 31, 2001 ($350,000)
January 31, 2002 $ 2,500,000
February 28, 2002 $ 2,500,000
March 31, 2002 $ 2,500,000
April 30, 2002 $ 2,800,000
May 31, 2002 $ 2,800,000
June 30, 2002 $ 2,800,000
July 31, 2002 $ 3,100,000
August 31, 2002 $ 3,100,000
September 30, 2002 and each
month thereafter $ 3,100,000
(v) Adjustment of Financial Covenants. Within thirty (30) days of
the date on which Agent receives the Projections for the Fiscal Year commencing
January 1, 2002, the parties shall enter into an amendment to this Agreement to
reset the financial covenants set forth on this Paragraph 15(p) to give effect
to such Projections, provided, however, if the parties fail to enter into such
amendment within thirty (30) days of the date on which Agent receives the
Projections for the Fiscal Year commencing January 1, 2002, then Agent shall
have the right to reset the financial covenants to such levels as determined in
its reasonable discretion."
3. Waiver. Subject to satisfaction of the conditions precedent set
forth in Section 5 below, Agent and Lenders hereby waive, solely with respect to
the fiscal quarter ending September 30, 2001, compliance by Borrower with the
Minimum EBITDA financial covenant set forth in paragraph 15(p)(iv) of the Loan
Agreement pursuant to which Borrower was required to maintain Minimum
Consolidated EBITDA of not less than $475,000 for the three (3) fiscal quarters
ended September 30, 2001.
4. Amendment and Waiver Fee. On the Amendment No. 1 Effective
Date, Borrower shall pay Agent for the benefit of Lenders an amendment and
waiver fee of $20,000 (the "Amendment and Waiver Fee"). The Amendment and
Waiver Fee shall be deemed fully earned on the Amendment No. 1 Effective Date
and shall not be subject to reduction, rebate or
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proration whatsoever. Borrower hereby authorizes Agent to automatically charge
Borrower's loan account with Agent for the Amendment and Waiver Fee on the
Amendment No. 1 Effective Date.
5. Conditions of Effectiveness. This Amendment shall become
effective October 30, 2001, when and only when Agent shall have received in form
and substance satisfactory to Agent and its counsel (i) four (4) copies of this
Amendment executed by Borrower and consented and agreed to by XxxxxXxx.xxx,
TransAct UK and TransAct Barbados as Guarantors and (ii) such other
certificates, instruments, documents, agreements and opinions of counsel as may
be required by Agent or its counsel, each of which shall be in form and
substance satisfactory to Agent and its counsel.
6. Representations and Warranties. Borrower hereby represents and
warrants as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective
terms.
(b) Upon the effectiveness of this Amendment, Borrower hereby
reaffirms all covenants, representations and warranties made in the
Loan Agreement to the extent the same are not amended hereby and
agree that all such covenants, representations and warranties shall
be deemed to have been remade as of the effective date of this
Amendment.
(c) After giving effect to this Amendment, no Event of Default
or Default has occurred and is continuing or would exist .
(d) Borrower has no defense, counterclaim or offset with
respect to the Loan Agreement.
7. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Loan Agreement as
amended hereby.
(b) Except as specifically amended herein, the Loan Agreement,
and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided in Section 3, operate as a
waiver of any right, power or remedy of Agent or Lenders, nor constitute a
waiver of any provision of the Loan Agreement, or any other documents,
instruments or agreements executed and/or delivered under or in connection
therewith.
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8. Governing Law. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State
of New York.
9. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
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10. Counterparts; Facsimile. This Amendment may be executed by the
parties hereto in one or more counterparts, each of which shall be deemed an
original and all of which taken together shall be deemed to constitute one and
the same agreement. Any signature delivered by a party hereto by facsimile shall
be deemed to be an original signature hereto.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first written above.
TRANSACT TECHNOLOGIES INCORPORATED, as
Borrower
By: __/s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Exec. VP & CFO
LASALLE BUSINESS CREDIT, INC., as Agent and
Lender
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: First Vice President
CONSENTED AND AGREED TO:
XXXXXXXX.XXX, INC., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: President
TRANSACT TECHNOLOGIES LIMITED, as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: President
TRANSACT TECHNOLOGIES INTERNATIONAL LTD., as Guarantor
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: President
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