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FIFTH AMENDMENT TO CREDIT AGREEMENT
AND
FORBEARANCE AGREEMENT
This Fifth Amendment to Credit Agreement and Forbearance Agreement
(this "Amendment") is made and entered into as of June 1, 2001, by and among THE
CHASE MANHATTAN BANK, a New York state banking association, formerly known as
CHASE BANK OF TEXAS, N.A., a national banking association ("Lender"), TIDEL
ENGINEERING, L.P. ("Borrower"), a Delaware limited partnership, and TIDEL
TECHNOLOGIES, INC., a Delaware corporation ("Ultimate Parent").
R E C I T A L S:
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A. On April 1, 1999, Lender, Borrower, and Ultimate Parent entered into
that certain Credit Agreement (including all amendments thereto, the "Credit
Agreement") pursuant to which Lender agreed to make loans and advances
(collectively the "Loans") to Borrower and Ultimate Parent in accordance with
the terms thereof. Lender, Borrower and Ultimate Parent entered into that
certain First Amendment to Credit Agreement, effective as of September 30, 1999,
that certain Second Amendment to Credit Agreement, effective as of September 8,
2000; that certain Third Amendment to Credit Agreement, effective as of
September 8, 2000; and that certain Fourth Amendment to Credit Agreement,
effective as of November 28, 2000.
B. The Loans are evidenced by that certain Revolving Credit Note dated
November 28, 2000 in the stated principal amount of $10,000,000.00, and that
certain Term Note of even date with the Credit Agreement, in the stated
principal amount of $544,000.00, each bearing interest and being payable to the
order of Lender as therein provided (collectively, the "Notes"). The Credit
Agreement, the Notes and the documents, instruments and agreements executed in
connection therewith are collectively referred to herein as the "Loan
Documents".
C. Borrower and Ultimate Parent have requested Lender to consent to a
temporary increase in the cap on the Eligible Inventory component of the
Borrowing Base, from $2,500,000 to $3,500,000, so long as the Eligible Inventory
component of the Borrowing Base does not exceed the Eligible Receivables
component of the Borrowing Base.
D. Lender, at the request of Borrower and Ultimate Parent, for good and
valuable consideration, is willing to enter into this Amendment and to consent
to the temporary increase in the cap on the Eligible Inventory component of the
Borrowing Base, from $2,500,000 to $3,500,000, so long as the Eligible Inventory
component of the Borrowing Base does not exceed the Eligible Receivables
component of the Borrowing Base.
E. An Event of Default has occurred under the Credit Agreement by
reason of the occurrence of a "Default", as such term is defined in the Credit
Card Center Promissory Note (the "Specific Event of Default").
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F. Borrower and Ultimate Parent have requested that Lender agree to
forbear temporarily from exercising Lender's rights and remedies under the
Credit Agreement in response to the Specific Event of Default.
G. Lender has agreed to forbear temporarily, as set forth in
this Forbearance Agreement, subject to the terms and conditions of this
Amendment.
A G R E E M E N T:
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NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrower, Ultimate Parent, and Lender hereby
agree to the Recitals stated above and further covenant and agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Credit Agreement.
2. Borrowing Base. Clause (b) of the definition of "Borrowing Base" in
Section 1.1 of the Credit Agreement is hereby amended, on a temporary basis for
the limited period of time beginning effective June 1, 2001 and ending on August
31, 2001, to read in its entirety as follows:
"(b) the least of
(i) fifty percent (50%) of the Eligible Inventory,
(ii) Three Million Five Hundred Thousand Dollars
($3,500,000), and
(iii) one hundred percent (100%) of the amount
determined at any time and from time to time by the
calculation in clause (a) above (it being the intention of the
parties that the dollar contribution to the Borrowing Base
based on the percentage of Eligible Inventory will not exceed
the dollar contribution to the Borrowing Base that is based on
the percentage of Eligible Receivables)."
Beginning September 1, 2001, and continuing thereafter, the above clause (b) of
the definition of "Borrowing Base" will read as it did prior to giving effect to
this Amendment.
3. Borrowing Base Certificate. Exhibit H to the Credit Agreement, the
form of Borrowing Base Certificate, is hereby is hereby amended, on a temporary
basis for the limited period of time beginning effective June 1, 2001 and ending
on August 31, 2001, to read in its entirety as set forth on Exhibit H attached
hereto. Beginning September 1, 2001, and continuing thereafter, the form of the
Borrowing Base Certificate will be as it existed prior to giving effect to this
Amendment.
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4. Conditions Precedent to Consent to Amendment. The effectiveness of
this Amendment is subject to the satisfaction of the following conditions
precedent, unless specifically waived in writing by Lender:
(1) The representations and warranties contained herein
and in all Loan Documents, as amended hereby, shall
be true and correct in all material respects as of
the date hereof as if made on the date hereof;
(2) No Event of Default by Borrower or Ultimate Parent
under the Loan Documents, as amended hereby, as of
the date hereof, shall have occurred and be
continuing and no event or conditions shall have
occurred that with the giving of notice or lapse of
time or both would be an Event of Default by Borrower
or Ultimate Parent under the Loan Documents, as
amended hereby, as of the date hereof, unless such
Event of Default is covered by the forbearance
provisions set forth in Section 5, below, or has been
specifically waived in writing by Lender; and
(3) Lender shall have received evidence reasonably
satisfactory to Lender that the increase in the
Revolving Commitment has been duly approved by
Borrower, Ultimate Parent, and the Other Guarantors.
5. Forbearance. Subject to the terms and conditions set forth in this
Amendment and Borrower's and Guarantors' acknowledgments and agreements set
forth above, and expressly conditioned upon the absence of any additional Events
of Default, Lender agrees that Lender will forbear from demanding payment in
full of the Obligations and forbear from exercising its rights and remedies
under Section 9.1 of the Credit Agreement as a result of the Specific Event of
Default for a period beginning on the date of this Amendment and ending on the
earlier to occur of the following: (1) at 5:00 p.m., September 30, 2001; or (2)
any occurrence of any Event of Default other than the Specific Event of Default
or any re-occurrence of the Specific Event of Default after the date of this
Amendment.
6. Costs and Expenses. Borrower agrees to reimburse Lender for Lender's
costs and expenses, including, but not limited to, reasonable attorneys' fees
and legal expenses, incurred by Lender in connection with the preparation of
this Amendment and in connection with the negotiation and consummation of the
transaction contemplated hereby.
7. The Credit Agreement. All references to the Credit Agreement in the
Loan Documents shall be deemed to be the Credit Agreement, as modified hereby.
Borrower expressly promises to perform all of its obligations under the Credit
Agreement and other Loan Documents, as modified by this Amendment.
8. Acknowledgments of Borrower and Ultimate Parent. Borrower and
Ultimate Parent each hereby acknowledge and agree that (a) Lender is not in
default in the performance of its obligations under the Loan Documents; (b)
Borrower and Ultimate Parent have no claims, counterclaims, offsets, credits or
defenses to the Loan Documents and the performance of their respective
obligations thereunder, or if Borrower or Ultimate Parent have any such claims,
counterclaims, offsets, credits or defenses to the Loan Documents or any
transaction related to
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the Loans and/or the Loan Documents, same are hereby waived, relinquished and
released in consideration of Lender's execution and delivery of this Amendment;
(c) all of the provisions of the Loan Documents, except as amended hereby, are
in full force and effect; and (d) upon the execution hereof, the Credit
Agreement, the Notes, and the other Loan Documents, as amended herein, are not
in default by Borrower or Ultimate Parent.
9. Full Force and Effect. Except as expressly modified and amended in
this Amendment, all of the terms, provisions and conditions of the Credit
Agreement, the Notes, and all other Loan Documents are and shall remain in full
force and effect and are incorporated herein by reference.
10. Counterparts and Facsimile Signatures. This Amendment may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original, and all of which taken together shall constitute but one and the
same instrument. Any party to this Amendment may indicate its intention to be
bound by this Amendment by its signature to the signature page hereof and the
delivery of the signature page hereof to the other party or its representatives
by facsimile transmission or telecopy. The delivery of a party's signature page
on the signature page hereof by facsimile transmission or telecopy shall have
the same force and effect as if such party signed and delivered this Amendment
in person.
11. No Oral Agreements. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS
EMBODY THE ENTIRE AGREEMENT AMONG THE PARTIES AND SUPERSEDES ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER HEREOF.
THIS WRITTEN AMENDMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.
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IN WITNESS WHEREOF, the parties have executed this Fifth Amendment to
Credit Agreement as of the day and year first above written.
LENDER:
THE CHASE MANHATTAN BANK, formerly
known as CHASE BANK OF TEXAS, N.A.,
a New York state banking association
By:
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Name:
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Title:
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BORROWER:
TIDEL ENGINEERING, L.P.,
a Delaware limited partnership
By: Tidel Cash Systems, Inc., its sole
general partner
By:
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Xxxx X. Xxxxxxxx,
President and Chief Executive Officer
ULTIMATE PARENT:
TIDEL TECHNOLOGIES, INC.,
a Delaware corporation
By:
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Xxxxx X. Xxxx, Chief Executive Officer
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By its execution below, each of Tidel Technologies, Inc., a Delaware
corporation, Tidel Services Inc., a Delaware corporation, and Tidel Cash
Systems, Inc., a Delaware corporation (each individually, a "Guarantor"),
acknowledges and consents to all of the terms and conditions of this Amendment,
and ratifies and confirms its respective Guaranty to and for the benefit of
Lender. Each Guarantor acknowledges that such Guarantor has no claims,
counterclaims, offsets, credits or defenses to the Loan Documents and the
performance of its obligations thereunder, or if such Guarantor does have any
such claims, counterclaims, offsets, credits or defenses to the Loan Documents
or any transaction related to the Loans and/or the Loan Documents, same are
hereby waived, relinquished and released in consideration of Lender's execution
and delivery of this Amendment. Further, each Guarantor agrees that nothing
contained in this Amendment shall adversely affect any right or remedy of Lender
under its respective Guaranty and that with respect to such Guaranty, all
references in such Guaranty to the "Obligations" shall mean the "Obligations",
as amended by this Amendment; that the execution and delivery of this Amendment
shall in no way change or modify such Guarantor's obligations as Guarantor
pursuant to its Guaranty; and that the execution and delivery of any agreements
by Borrower and Lender in connection with this Amendment shall not constitute a
waiver by Lender of any of Lender's rights against any Guarantor.
TIDEL TECHNOLOGIES, INC.,
a Delaware corporation
By:
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Xxxxx X. Xxxx,
Chief Executive Officer
TIDEL SERVICES, INC.,
a Delaware corporation
By:
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Xxxx X. Xxxxxxxx, President
TIDEL CASH SYSTEMS, INC.,
a Delaware corporation
By:
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Xxxx X. Xxxxxxxx, President
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