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EXHIBIT 10-A
FORBEARANCE AND MODIFICATION AGREEMENT
EFFECTIVE DATE. AS OF NOVEMBER 14, 2000
PARTIES.
BANK ONE, ARIZONA, NA, as administrative
agent for Banks that are parties to the
Credit Agreement (defined below) and as a
Bank ("Bank One"); FLEET NATIONAL BANK, as
Documentation Agent, and as a Bank
("Fleet"); and IMPERIAL BANK ("Imperial"),
as a Bank. Bank One, Fleet, and Imperial are
sometimes individually referred to as a Bank
and collectively as the "Banks".
HYPERCOM CORPORATION, a Delaware corporation
("Hypercom"), and each of its undersigned
Subsidiaries, Affiliates, and other parties
obligated under the Credit Documents to
Banks (hereinafter individually and
collectively referred to as "Borrower").
RECITALS.
A. Loans from Banks to Borrower. Banks and Hypercom are parties to the
"Credit Agreement" dated as of August 31, 2000 (the "Credit Agreement"). Under
the Credit Agreement, Banks have made available to Hypercom loans and other
financial accommodations (including an RLC and Letters of Credit, collectively,
the "Loans") in the committed amount of $60,000,000.
B. Obligations Owing from Borrower to Banks. Computed as of December
18, 2000, Hypercom is indebted as follows to Banks: (i) in the amount of
$48,956,971.24 for unpaid principal; (ii) in the amount of $167,949.02 in
interest accrued at the non-default rate (exclusive of any adjustment in the
interest rates owed by Borrower under Section 6.1 below); and (iii) in
additional amounts for accrued and accruing interest, recoverable costs
(including reasonable attorneys' fees), certain indemnities, and other expenses.
C. Collateral Held By Banks for Satisfaction of Obligations Owing from
Borrower. As security for satisfaction of the Obligations owing from Borrower,
Banks hold valid and perfected, first and prior liens in (among other things)
the Collateral described in the Security Agreements executed by Borrower in
conjunction with the Credit Agreement. The lien and security interests held by
the Banks are evidenced by (among other things) the Security Documents and all
other related Credit Documents executed and delivered by Borrower in connection
with the Credit Agreement.
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D. No Defenses. Borrower has no defenses, offsets, counterclaims, or
adverse claims of any kind or amount with respect to the Obligations. In
addition, Borrower has no defenses, offsets, counterclaims, or adverse claims of
any kind with respect to the Collateral interests held by Banks as security for
satisfaction of the Obligations.
E. Identified Defaults. As identified on Exhibit "A" to this
Forbearance Agreement, Borrower is in default of certain of the financial
covenants contained in the Credit Agreement (the "Identified Defaults").
F. Request for Certain Forbearance and Loan Modifications. Borrower has
requested that Banks forbear from exercising their rights and remedies with
respect to the "Identified Defaults" through December 31, 2000, or, if extended
pursuant to the terms of this Forbearance Agreement, through January 31, 2001.
In addition, Borrower has requested that Banks modify certain terms and
conditions of the Credit Documents. Although Banks are under no obligation to do
so, Banks are willing to provide Borrower with limited forbearance, and Banks
are willing to provide limited modification of the Credit Documents upon the
terms and conditions set forth herein. The forbearance is being provided by
Banks to allow Borrower to secure replacement financing to satisfy indefeasibly
the entire amount of the Obligations owing to Banks under the Credit Documents.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
PROVISIONS.
1. Accuracy of Recitals. Borrower acknowledges that the Recitals set
forth above are true, accurate and correct. The Recitals are incorporated into
these Provisions without any difference or distinction between the two (2)
segments of this Forbearance Agreement.
2. Capitalized Terms. Unless otherwise indicated, all capitalized terms
used in this Forbearance Agreement will correspond to the defined terms used in
the Credit Agreement.
3. Reaffirmation of Loans. Except as modified by this Forbearance
Agreement, Borrower reaffirms all of its Obligations under the Credit Documents.
4. Forbearance. Provided that Borrower satisfies all of the conditions
set forth in paragraph 5 below, Banks hereby agree to forbear from exercising
their rights and remedies with respect to the Identified Defaults from the
effective date of the Forbearance Agreement through December 31, 2000, unless
extended further through January 31, 2001 (the "Forbearance Period") by the
payment by Borrower of the Extension Fee (defined below) and by the further
modification of the Credit Agreement to provide for an additional 100 basis
points increase in the non-default interest rate and in the Default Rate. In
addition, the forbearance provided by Banks to Borrower
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is limited as follows:
4.1 Forbearance Limited to Identified Defaults. Banks'
forbearance is limited solely to the suspended exercise of their respective
rights and remedies arising under the Credit Documents as a result of the
Identified Defaults, and Banks shall not be deemed to have suspended or waived
any rights or remedies they may have with respect to any other existing breach,
default or Event of Default under the Credit Documents, any new breach, default
or Event of Default occurring thereunder during the Forbearance Period, or any
breach of this Forbearance Agreement.
4.2 No New Events of Default. During the Forbearance Period,
there shall occur no new Event of Default or an event which, with the passage of
time or the giving of notice or both, would constitute an Event of Default under
any one or more of the Credit Documents or this Forbearance Agreement, nor shall
there be a breach or failure of any warranty, representation or covenant as
described in this Forbearance Agreement.
4.3 Agreement in the Nature of Forbearance Only. Borrower
hereby acknowledges that Banks' obligations under this Forbearance Agreement are
in the nature of a conditional forbearance only, and that Banks have made no
agreement or commitment to provide additional forbearance, to modify further or
to extend the Credit Documents beyond the Forbearance Period. Borrower also
acknowledges that the Identified Defaults are not cured as a result of this
Forbearance Agreement.
4.4 Termination of the Forbearance Period. The Forbearance
Period shall end on the first to occur of the following:
4.4.1 December 31, 2000, unless the Forbearance
Period is extended through January 31, 2001 as provided above;
4.4.2 A breach by Borrower of any of the covenants,
representations and/or warranties set forth in this Forbearance Agreement.
4.4.3 The occurrence of any new Event of Default
under any of the Credit Documents, or the occurrence of any event which, with
the passage of time or giving of notice or both, would constitute an Event of
Default thereunder.
4.4.4 Any bankruptcy petition is filed by or against
Borrower.
4.4.6 Borrower makes any assignment for the benefit
of its creditors, or a receiver is appointed for Borrower's business.
4.5 Exercise of Rights and Remedies Upon Termination
of Forbearance Period. Upon termination of the Forbearance Period, Banks are
free to exercise all of their rights and
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remedies under the Credit Documents, including but not limited to, the rights
and remedies available to the Banks as a result of the Identified Defaults.
5. Conditions to Forbearance. In addition to all other conditions set
forth in Section 4 above, the forbearance provided by Banks under this
Forbearance Agreement is strictly conditioned upon satisfaction by Borrower of
the following:
5.1 No New Defaults. During the Forbearance Period, there will
occur no new event which would allow Banks with or without notice to accelerate
Obligations, to discontinue extending credit to Borrower under applicable Credit
Documents, or to exercise any rights or remedies against any collateral for
Obligations owed to any Bank or an event which, with the passage of time or the
giving of notice or both, would constitute an Event of Default under any one or
more of the Credit Documents, or a default occurs under the Forbearance
Agreement (collectively, an "Incipient Default"), and there will be no breach or
failure of any warranty, representation or covenant contained in this
Forbearance Agreement.
5.2 Forbearance From Other Lenders. During the Forbearance
Period, and except for an Amortization Event claimed by Bank One Capital Markets
Conduit Financing, no other lender, creditor, or lessor will enforce its rights
or remedies in relation to any default committed by Borrower under any loan
agreement, lease agreement, security agreement, or other financial agreement. In
addition, and consistent in scope and time with the forbearance provided by the
Banks, Borrower will obtain and maintain at least through the Forbearance Period
forbearance for defaults of obligations owing to its other major lenders (the
"Other Forbearance Agreements"), including direct lenders and conduit lenders
(like Xxxxxxx Bank, Tokyo Leasing, Bank One Capital Markets Conduit Financing,
and Bank One, Arizona, NA) that provide financing for Borrower and its
Subsidiaries and Affiliates, including Golden Eagle. Copies of the Other
Forbearance Agreements will be delivered to the Banks.
5.3 Delivery Of Outstanding Items. By the time of execution of
the Forbearance Agreement, and except for the delivery of certain stock
certificates identified on Exhibit "A", Borrower will have delivered to Banks
any outstanding property or documents relating to the Collateral and Obligations
presently covered by the Credit Agreement, including, but not limited to, the
delivery of Stock pledged as security for repayment of the Obligations.
5.4 Delivery of Consents. As evidenced by its signature below,
any Guarantor which has guaranteed repayment of the Obligations expressly
consents to the terms and conditions of this Forbearance Agreement, and confirms
that its guarantee remains in full force and effect. Likewise, Borrower will
deliver to Banks the consent to the Forbearance Agreement by any holder of
Subordinated Debt and by any party to any intercreditor agreement with any of
the Banks.
5.5 Delivery of Financing Term Sheets. By December 22, 2000,
Borrower will deliver to Banks signed term sheets or similar evidence to confirm
that Borrower is pursuing from
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a lending source (or sources) financing in an amount sufficient to pay by
January 31, 2001 the entire amount of the outstanding Obligations (or such other
amount of the Obligations acceptable to Banks in their sole and absolute
discretion). In this regard, Borrower will provide Banks by December 22, 2000
copies of the term sheets or such other documents which reflect the terms,
conditions, and amount of the financing sought by Borrower.
5.6 Pursuit of Certain Sales and Financings. Upon execution of
the Forbearance Agreement, Borrower will seek financing or sales of certain of
its domestic and Foreign Affiliates and assets. Each of the Banks will have the
right to approve the financing and sales of Borrower's domestic and foreign
Affiliates and assets. In the event of an Incipient Default, Borrower will not
have the right to sell or refinance its domestic or Foreign Affiliates or
assets. Except in the case of a sale of Borrower's Horizon Subsidiary or the
financing of a Hong Kong facility (the "HK Facility") owned by a Subsidiary of
Borrower, Borrower will deliver to the Banks eighty percent (80%) of the net
proceeds of any asset sales, new financing, equity sales, or equity infusions
(other than the Xxxxxxx Cash Infusion, defined below) obtained by Borrower, and
such proceeds will be used to pay down permanently the Obligations owing to the
Banks. In the event of a sale of the Horizon Subsidiary, Borrower will deliver
to Banks eighty percent (80%) of the value of any Eligible Accounts Receivable
and fifty percent (50%) of any Eligible Inventory sold (collectively, the
"Accounts and Inventory Lien Release Price") as well as eighty percent (80%) of
any additional proceeds (if any) over and above the Accounts and Inventory Lien
Release Price. The Borrower may use in its operations all of the proceeds of a
financing of the HK Facility which occurs during the Forbearance Period.
5.7 Full Cooperation with Consultants. During the Forbearance
Period, Borrower will cooperate fully with representatives of Xxxxxxx & Marsal,
Inc., consultants engaged by Banks to assess and address matters germane to
Borrower's performance under the Credit Documents.
5.8 Minimum Accounts and Inventory Levels. During the
Forbearance Period, Borrower will maintain Eligible Accounts Receivable in an
amount of at least $20,000,000 tested weekly, and Borrower will maintain a
combined level of Eligible Accounts and Eligible Inventory in an amount of at
least $50,000,000 tested monthly.
5.9 Xxxxxxx Cash Infusions. Within two (2) business days of
the execution of the Forbearance Agreement, Borrower will obtain from Xxxxxx
Xxxxxxx a cash infusion of at least $1,500,000 (the "Xxxxxxx Cash Infusion")
which may be used for working capital or for the limited funding of Golden Eagle
permitted under Section 6.9 below. The Xxxxxxx Cash Infusion may take the form
of an equity infusion, or the Xxxxxxx Cash Infusion may take the form of
subordinated unsecured debt. In all events, the Xxxxxxx Cash Infusion will be
subordinated in all respects to the Obligations owing to the Banks, and the
Xxxxxxx Cash Infusion may not be repaid by Borrower unless and until all of the
Obligations owing to the Banks are repaid indefeasibly and in full.
6. Modifications. The Credit Documents are hereby modified and amended
as described
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below. In the event of any conflict between the terms of the Credit Documents
and the terms of this Forbearance Agreement, this Forbearance Agreement shall
control.
6.1 Increase in Certain Interest Rates. Effective as of
November 1, 2000, the non-default interest rate on the RLC is Prime Rate plus 2%
per annum, the Default Rate on the RLC is Prime Rate plus 5% per annum, and all
interest and related charges are based on the Prime Rate and not on any LIBOR
Based Rate. In the event that the Forbearance Period is extended beyond December
31, 2000, then, effective as of January 1, 2001, the non-default interest rate
on the RLC is Prime Rate plus 3% per annum, the Default Rate on the RLC is Prime
Rate plus 6% per annum.
6.2 Elimination of RLC Borrowing Base Exclusion. The RLC
Borrowing Base Exclusion is eliminated.
6.3 Reduction of RLC Commitment. The RLC Commitment is limited
to the lowest amount of Obligations owing from Borrower to Banks during the
Forbearance Period.
6.4 Liquidation of Marketable Securities. Banks may
immediately liquidate the approximately $3,000,000 of Marketable Securities in
the possession of Bank One as Agent, and the net proceeds of the Marketable
Securities will be applied to reduce permanently the Obligations owing from
Borrower to Banks.
6.5. No New Advances. No new advances will be made under the
RLC. During the Forbearance Period, Borrower's cash requirements will be
satisfied out of collections of Accounts, the Xxxxxxx Cash Infusion, and the
portion of proceeds made available to Borrower under this Forbearance Agreement
from the approved sale or financing of domestic or Foreign Affiliates or assets.
6.6 Sequestration of Excess Cash Flow. Upon the execution of
the Forbearance Agreement, Borrower will establish and maintain at Bank One as
Agent for the Banks a sequestered cash collateral account (the "Sequestered
Account"). Bank One, as Agent for Banks, is hereby granted a security interest
in the Sequestered Account. Bank One, as Agent for Banks, will have sole and
exclusive dominion and control over the Sequestered Account, including, but not
limited to, the sole and exclusive right to withdraw funds from the Sequestered
Account. Beginning with the week of December 18, 2000, and at the end of each
week during the Forbearance Period which corresponds to a payroll period for
Borrower, and after reserving for a rolling cash reserve of $3,000,000, Borrower
will deposit into the Sequestered Account sixty percent (60%) of all cash
actually collected in excess of cash actually disbursed. In addition, Borrower
is limited to payment of the expenses (in kind and in amount) listed on the Cash
Flow Forecast attached as Exhibit "C", along with the payment of the
Obligations, the Forbearance Fee, the Extension Fee, and the Reimbursable Costs
as set forth herein. From time to time, Bank may apply the funds in the
Sequestered Account to reduce permanently the amount of the Obligations owing
from Borrower.
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6.7 Capital Expenditures. From November 30, 2000, through the
end of the Forbearance Period, and unless otherwise agreed to in writing by
Banks, Borrower will not incur any liability or expend cash for capital
expenditures over and above the $1,050,000 in capital expenditures incurred and
to be paid during the fourth quarter of 2000.
6.8 Additional Collateral. As additional security for
satisfaction of the Obligations, Borrower hereby grants to Banks Liens and
security interests in all assets and Stock owned by Borrower which do not
currently serve as Collateral (including, but not limited to, all equipment and
intellectual property owned by Borrower), as well as Liens and security
interests in all of the assets and Stock (other than Golden Eagle Stock or
Golden Eagle assets if prohibited by direct lenders of Golden Eagle) of each of
Borrower's Subsidiaries and Affiliates, including the Foreign Affiliates which
were not originally parties to the Credit Agreement (collectively, the
"Additional Collateral"). In this regard: (i) upon execution of the Forbearance
Agreement: (a) Banks are hereby granted a Lien and security interest on all
equipment in the schedule delivered to Banks on November 10, 2000 by Borrower,
(b) Banks are hereby granted a Lien and security interest on intellectual
property (including, but not limited to, all patents, patent applications,
trademarks, trademark applications, copyrights, and copyright applications)
owned by the Borrower, (c) and Borrower hereby confirms that the so-called UK
Leases have been and remain part of the Banks' Collateral; and (ii) effective as
of January 31, 2001, Banks will receive (and are hereby granted) Liens on the
balance of the Additional Collateral. In addition, by January 31, 2001, Borrower
will obtain credit insurance (the "Credit Insurance")for the accounts receivable
pledged by Hypercom Europe and Hypercom Latin America. The Credit Insurance will
name as an additional insured Bank One as Agent for the Banks, and the Credit
Insurance will be in form and substance reasonably satisfactory to the Banks.
Borrower and its Affiliates and Subsidiaries will execute such security
agreements, financing statements, and other documents reasonably requested by
Banks to cause the Obligations owing to Banks to be secured by valid and
enforceable first priority Liens and security interests in the Additional
Collateral. In addition, Banks are granted the same rights and remedies with
respect to the Additional Collateral as Banks were granted with respect to the
Collateral under the Credit Documents.
6.9 Limits On Funding Of Golden Leasing. During the
Forbearance Period, no more than $750,000 of Hypercom cash will be used for the
funding of Golden Eagle Leasing. In addition, out of financings received from
Xxxxxxx Bank, Tokyo Leasing, CIT, or other third party lenders, Golden Eagle
will reimburse Borrower (the "Golden Eagle Reimbursements") to the extent that
it funded Golden Eagle leases from November 1, 2000 through the execution of the
Forbearance Agreement. The Golden Eagle Reimbursements will be delivered to
Banks to be applied to reduce permanently the outstanding Obligations owing from
Borrower.
6.10 Limits On Golden Eagle Indebtedness. Section 8.1(j) of
the Credit Agreement is modified to provide the following: "Indebtedness for
borrowed money of Golden Eagle not to exceed $30,000,000 during the Forbearance
Period;"...
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6.11 Financial Information. In addition to any reports or
financial information required under the Credit Documents, Borrower will furnish
to each of the Banks on a monthly basis the following covering the months of
October 2000 and each succeeding month during the Forbearance Period:
6.11.1 Borrower prepared consolidating and
consolidated financial statements broken down by divisions of Borrower (balance
sheet and income and expense statement) due within 15 business days of each
month end.
6.11.2 An RLC Borrowing Base Certificate every month
due within 16 business days of each month end.
6.11.3 Compliance Certificate due within 16 business
days of each month end.
6.11.4 Weekly Accounts Receivable and Payable Agings
(broken down by divisions of Borrowers) due within 2 business days of each
week's end.
6.11.5 Weekly domestic sales reports (broken down by
divisions of Borrower) and monthly consolidated sales reports due within 3
business days of each week's or month's end.
6.11.6 Inventory listings (broken down by divisions
of Borrower) due for domestic assets and for Foreign assets within 16 business
days of each month end; and, with respect to Inventory, listings will be broken
down by location and Borrower will specify whether Inventory located at leased
locations is subject to landlord lien waivers.
6.11.7 Rolling 13 Week Cash Flow Reports (in summary
form consistent with the Cash Flow Report attached as Exhibit "C") due within 2
business days of each week end.
6.11.8 Backlog reports due within 20 days of each
month end.
6.11.9 On January 16, 2001, Borrower will deliver to
Banks a statement reflecting Borrower's compliance with the financial covenants
under the Credit Agreement for the quarter ending on December 31, 2000.
6.11.10 Without limiting any other rights of Banks
under the Credit Documents, during the Forbearance Period, and upon 48 hours'
telephonic or written notice from any of the Banks, Borrower will provide Banks
and their consultants with access to the books, records, and property of
Borrower.
6.12 Negative Covenants. During the term of the Forbearance
Period:
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6.12.1 Other than trade credit incurred in the
ordinary course of business, financing for the HK Facility, financing for Golden
Eagle, and financing for the UK Leases, and except as otherwise provided in this
Forbearance Agreement, Borrower will not incur any additional debt in excess of
the Obligations; provided, however that Borrower may incur debt from Affiliates,
Subsidiaries, or shareholders ("Affiliate Debt") so long as: (i) the Affiliate
Debt is on terms acceptable to Banks; (ii) the Affiliate Debt is subordinated in
priority and payment to the Obligations; and (iii) no payments are made by
Borrower with respect to the Affiliate Debt unless and until all of the
Obligations are paid in full and the RLC Commitment is terminated. In addition,
and except as otherwise provided in this Forbearance Agreement, Borrower will
not make any capital contributions, loans, or other advances to Golden Eagle
Leasing. Furthermore, Borrower will not make any capital contributions, loans,
or other advances to any of its other Subsidiaries or Affiliates outside of the
ordinary course of business.
6.12.2 Borrower will not make any payments of any
kind (including principal, interest, or other amounts owed) on any existing or
future loans from shareholders.
6.12.3 Except for Liens arising under the Credit
Documents, and except for purchase money liens or security interests agreed to
in writing by Banks for newly acquired or leased equipment, Borrower will not
allow any new liens to be
secured by property which is presently owned or hereafter acquired by Borrower
or any of its Subsidiaries or Affiliates.
6.12.4 Borrower will not enter into any acquisitions
without the prior approval of Banks.
6.12.5 Borrower will not declare or pay any
dividends, Borrower will not pay any bonuses, and Borrower will not repurchase
any of its stock.
6.13 No Excluded Foreign Leases. Borrower confirms that there
are no Excluded Foreign Leases under Section 4.1(c) of the Credit Agreement. In
addition,Section 4.1(c) of the Credit Agreement is hereby deleted.
6.14 Limitation on Borrowing Base Default. During the
Forbearance Period, the failure of the Borrower to maintain a certain level of
assets in its Borrowing Base will not constitute an Incipient Default so long as
Borrower complies with the terms and conditions of Section 5.8 above.
7. Conditions Precedent. Before this Forbearance Agreement becomes
effective and Banks become obligated under it, and in addition to any other
conditions stated in this Forbearance Agreement, all of the following conditions
shall have been satisfied at Borrower's sole cost and expense in a manner
acceptable to Banks:
7.1 Receipt of Documents. Banks will have received fully
executed originals of
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this Forbearance Agreement and any other documents that Banks may require or
request in accordance with this Forbearance Agreement and the Credit Documents,
all in such form as Banks may require in their reasonable discretion.
7.2 Reimbursement of Banks' Costs and Expenses. Banks will
have received reimbursement, in immediately available funds, of all reasonable
costs and expenses incurred by Banks in connection with this Forbearance
Agreement, including charges for legal fees and expenses of Banks' counsel
("Reimbursable Costs"). Reimbursable Costs will include the allocated costs for
services for each Lender's outside counsel and in-house staffs, such as legal
and appraisal, and Reimbursable Costs will be paid upon the execution of this
Forbearance Agreement and thereafter as provided below. Upon execution of this
Agreement, Borrower will pay Banks their current Reimbursable Costs in the
aggregate amount of $225,676.74, payable as follows: (i) $35,000 to Xxxxxxx &
Xxxxx/Xxxxxxx Xxxx for services rendered through December 18, 2000 as counsel
for the Banks as a group; (ii) $156,676.74 to Xxxxxxx & Marsal, Inc., for
services rendered through December 15, 2000 as financial consultants for the
Banks; and (iii) $6,500, payable to Bank One as and for its Reimbursable Costs;
and (iv) $27,500 payable to Fleet as and for its Reimbursable Costs. Thereafter,
Borrower will pay all additional Reimbursable Costs incurred by Banks during the
course of the Forbearance Period within seven (7) business days of delivery of
any invoice for payment of Reimbursable Costs.
7.3 Payment of Forbearance Fee and Past Due Interest. Banks
will have received from Borrower payment of the Forbearance Fee provided in
paragraph 10 below, along with any past due interest owing with respect to the
Obligations, including, but not limited to interest owing as a result of
Section 6.1 below.
8. Borrower's Representations and Warranties. Borrower represents and
warrants to Banks as follows:
8.1 Accuracy of Representations in Forbearance Agreement and
Credit Documents. All representations and warranties made and given by Borrower
in this Forbearance Agreement and in the Credit Documents are accurate and
correct.
8.2 No Default. Other than the Identified Defaults, no Event
of Default has occurred and is continuing under the Credit Documents, and no
event has occurred and is continuing which, with notice or the passage of time
or both, would be an Event of Default.
8.3 Property. To the extent applicable, Borrower lawfully
possesses and holds a 100% ownership interest in all of the Collateral for the
Obligations. Borrower owns all of the Collateral for the Obligations free and
clear of any defects, reservations of title and conditional sales contracts, and
free and clear of any Liens and security interests other than the Liens and
security interests in favor of Banks. There is no financing statement affecting
any Collateral for the Obligations on file in any public office except for
financing statements in favor of Banks.
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8.4 Borrowing Entity. Each Borrower entity is a corporation
which is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation. There have been no changes in the
organization, composition, ownership, structure or formation documents of
Borrower since the inception of the Obligations. In each state and country in
which Borrower does business, it is properly licensed, in good standing, and,
where required, in compliance with fictitious name statutes.
8.5 Authorization. This Forbearance Agreement, and any
instrument or agreement required hereunder, are within Borrower's powers, have
been duly authorized, and do not conflict with any of its organizational papers.
8.6 Enforceable Credit Documents/No Conflicts. The Credit
Documents and this Forbearance Agreement, are legal, valid and binding
agreements of Borrower, enforceable in accordance with their respective terms,
and any instrument or agreement required hereunder or thereunder, when executed
and delivered, is (or will be) similarly legal, valid, binding and enforceable.
This Forbearance Agreement does not conflict with any law, agreement, or
obligation by which Borrower is bound.
8.7 Financial Information. All financial and other information
(including, but not limited to the Cash Flow Reports) that has been or will be
supplied to Banks is:
(a) Sufficiently complete to give Banks accurate
knowledge of Borrower's financial condition;
(b) In form and content required by Banks; and
(c) In compliance with all government regulations
that apply.
9. Borrower Acknowledgments. Borrower hereby acknowledges and agrees
that:
9.1 No Breach By Banks. Each of the Banks (including all of
its predecessors) has not breached any duty to Borrower in connection with the
Obligations or the Credit Documents, and each Bank (including all of its
predecessors) has fully performed all obligations it may have had or now has to
Borrower.
9.2 Interest, Fees, and Other Charges. All interest, fees
(including the Forbearance Fee under paragraph 10 below) or other charges
(including the Reimbursable Costs under paragraph 7.2 above) imposed, accrued,
or collected by Banks (including all their predecessors) under the Credit
Documents or this Forbearance Agreement, and the method of computing the
interest, fees, or other charges, were and are reasonable, proper, and agreed to
by Borrower and were properly computed and collected.
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9.3 No Waiver. By entering into this Forbearance Agreement,
Banks do not waive any existing defaults (including the Identified Defaults) or
any defaults hereafter occurring, and Banks do not become obligated to waive any
condition or obligation in any agreement between or among any of the parties
hereto.
9.4 No Future Obligations. Banks have no obligation to make
any additional loan or extension of credit to or for the benefit of Borrower,
and Banks have no obligation to provide additional forbearance or to extend
further accommodations to Borrowers.
9.5 No Third Party Beneficiaries. This Forbearance Agreement
is not intended for, and shall not be construed to be for, the benefit of any
person not a signatory hereto.
9.6 Loan Balances. The outstanding balances owing on the
Obligations, as described in this Forbearance Agreement, are true and correct.
9.7 Fair Consideration. All payments made and Liens granted by
Borrower to Banks under the Credit Documents and this Forbearance Agreement are
for fair consideration and reasonably equivalent value.
9.10 Notice of Indentified Defaults. Borrower has received or
waives all notice required from Banks under the Credit Documents with respect to
the Identified Defaults; and, subject to the terms and conditions of this
Forbearance Agreement, Banks presently are free to exercise all of their rights
and remedies under the Credit Agreement as a result of the Identified Defaults
committed by Borrower.
10. Forbearance and Extension Fees. In consideration of the forbearance
provided by Banks, Borrower will pay a fee of $125,000 (the "Forbearance Fee")
which will be divided pro rata among the Banks in accordance with their
respective amounts of the outstanding principal amount of the Obligations. The
Forbearance Fee is earned and will be paid upon the execution of this
Forbearance Agreement. In the event that Borrower wishes to extend the
Forbearance Period beyond December 31, 2000 and until January 31, 2001, Borrower
will pay an extension fee of $250,000 (the "Extension Fee") to be divided pro
rata among the Banks in accordance with their respective amounts of the
outstanding principal amount of the Obligations. The Extension Fee will be paid
in either two (2) or three (3) installments as follows: (i) $50,000 of the
Extension Fee will be paid on December 29, 2000; (ii) $75,000 of the Extension
Fee will be paid on January 15, 2001; and (iii) in the event that Borrower
delivers to Banks by January 15, 2000 a binding commitment (the "Financing
Commitment") reasonably acceptable to Banks for financing in amount sufficient
to satisfy the Obligations in full by January 31, 2001, the $125,000 balance of
the Extension Fee will be paid on January 31, 2001. In the event that the
Financing Commitment is not delivered in a timely manner to Banks, then the
$125,000 balance of the Extension Fee will be payable on January 15, 2001. In
the event that the Obligations are satisfied indefeasibly and in full prior to
December 31, 2000, the entire
Page 12 of 21
13
Extension Fee will be waived. In the event that the Obligations are satisfied
indefeasibly and in full after December 31, 2000, but prior to January 31, 2001,
then $125,000 of the Extension Fee will be waived. The Extension Fee may be paid
from funds on deposit in the Sequestered Account.
11. Release of Banks. In consideration of the agreements of Banks set
forth in this Forbearance Agreement, Borrower and all of its respective heirs,
personal representatives, predecessors, successors and assigns (individually and
collectively, the "Releasors"), hereby fully release, remise, and forever
discharge Banks, the parents of Banks and all other affiliates and predecessors
of Banks, and all past and present officers, directors, agents, employees,
servants, partners, shareholders, attorneys and managers of Banks, for, from,
and against any and all claims, counterclaims, liens, demands, causes of action,
controversies, offsets, obligations, losses, damages and liabilities of every
kind and character whatsoever, including, without limitation, any action,
omission, misrepresentation or other basis of liability founded either in tort
or contract and the duties arising thereunder, that the Releasors, or any one of
more of them, has had in the past, or now has, whether known or unknown, whether
asserted or unasserted, by reason of any matter, cause or thing set forth in,
relating to or arising out of, of in any way connected with or resulting from,
the Loans, the Obligations, the Credit Documents, or this Forbearance Agreement.
12. No Prejudice; Reservation of Rights. Except for the limited
forbearance specifically set forth herein, this Forbearance Agreement shall not
prejudice any rights or remedies of Banks under the Credit Documents. Except for
the limited forbearance specifically set forth herein, each Bank reserves,
without limitation, all of its rights against any Borrower, indemnitor,
guarantor, or endorser of any of the Credit Documents and any other party liable
in any way for satisfaction of the Obligations or other losses suffered by
Banks.
13. No Impairment/Security. Except as otherwise specifically set forth
herein, the Credit Documents remain unaffected by this Forbearance Agreement and
all of the Credit Documents shall remain in full force and effect. Borrower's
payment and performance of Borrower's various Obligations to Banks under the
Credit Documents, including all extensions, amendments, renewals or replacements
thereof, continue to be and shall be secured by the Liens arising under the
Credit Documents. Nothing contained herein shall be deemed a waiver of any of
the rights and remedies that any of the Banks may have against Borrower or any
other party, or of any of Banks' rights and remedies arising out of the Credit
Documents.
14. Purpose and Effect of Banks' Approval. Banks' approval of any matter
in connection with the Loans shall be for the sole purpose of protecting Banks'
security, rights, and remedies under the Credit Documents. No such approval
shall result in a waiver of any default of Borrower. In no event shall Banks'
approval be a representation of any kind by Banks with regard to the matter
being approved.
15. Integration. The Credit Documents and this Forbearance Agreement and
its exhibits: (a) integrate all the terms and conditions mentioned in or
incidental to the Credit Documents; (b)
Page 13 of 21
14
supersede all oral negotiations and prior and other writings with respect to
their subject matter; and (c) are intended by the parties as the final
expression of the agreement with respect to the terms and conditions set forth
in those documents and as the complete and exclusive statement of the terms
agreed to by the parties. If there is any conflict between the terms, conditions
and provisions of this Forbearance Agreement and the terms, conditions, or
provisions of any other agreement or instrument, including any of the other
Credit Documents, the terms, conditions and provisions of this Forbearance
Agreement shall prevail. No modification of this Forbearance Agreement or the
Credit Documents shall be effective unless in writing and signed by the
applicable parties to be bound thereby.
16. Notices. All notices, reports, and other communications provided
for herein (collectively, for purposes of this paragraph 16, "notices") will be
in writing and will be delivered: (a) in person; (b) by telecopier, telefax, or
other facsimile communication; or (c) by overnight courier, postage prepaid,
addressed as follows: If to Borrower:
Hypercom Corporation
Attn: Xxxxxxxx X. Xxxxxxx
0000 X. Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxx Xxxxx, Esq.
Xxxxx & Xxxxxx
One S. Church Avenue, # 1500
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Banks:
Bank One, Arizona, NA, for itself and as Administrative Agent for
Banks
Attn: Xxxxxx Xxxxxx
Western Region Managed Assets Department
AZ1 1283
XX Xxx 00
Xxxxxxx, XX 00000-0000
Phone (602) 000- 0000
Fax (000) 000-0000
Page 14 of 21
15
Fleet National Bank
Attn: Xxxxxxx Xxxxxxxx
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax (000) 000-0000
Imperial Bank
Attn: Xxxxxx Xxxxxxx
000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Phone (000) 000-0000
Fax (000) 000-0000
with a copy to:
Xxxx X. Clemency, Esq.
Xxxxxxx & Xxxxx/Xxxxxxx Xxxx, LLP
Xxx Xxxxxxxxxxx Xxxxxx
0 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Phone (000) 000-0000
Fax (000) 000-0000
The addresses and facsimile numbers provided herein are conclusively deemed to
be valid, and notices given in compliance with this paragraph 16 will be
conclusively presumed to be proper and adequate, unless a written change of
address or facsimile number is provided to all parties listed above. Notices
will be conclusively presumed to be received upon delivery by overnight mail, by
hand-delivery, or upon communication during regular business hours of the
recipient by facsimile, telecopier, or telefax.
17. Counterparts. This Forbearance Agreement and any attached consents
or exhibits requiring signatures may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate counterparts
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same agreement.
18. Invalidity. If any court of competent jurisdiction determines any
provision of this Forbearance Agreement or any of the Credit Documents to be
invalid, illegal or unenforceable, that portion shall be deemed severed from the
rest, which shall remain in full force and effect as though the invalid, illegal
or unenforceable portion had never been a part of the Forbearance Agreement or
the Credit Documents.
Page 15 of 21
16
19. Governing Law, Venue, Forbearance of Jury Trial. This Forbearance
Agreement shall be governed by and construed according to the laws of the State
of Arizona. Borrower hereby submits to jurisdiction and venue in Maricopa
County, Arizona, and agrees that any and all pending or future litigation,
arbitration, or bankruptcy proceedings relating to the Obligations shall be
venued and maintained in Maricopa County, Arizona. In the event of judicial
proceedings relating to disputes arising under this Forbearance Agreement,
Borrower agrees that all issues (including defenses, cross-claims and
counter-claims) shall be resolved by a judge and not a jury; and, therefore,
Borrower waives its rights to a jury trial which it otherwise would have had.
20. [Intentionally Omitted.]
21. Successors and Assigns. This Forbearance Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, Borrower may not transfer its rights
under the Forbearance Agreement or the Credit Documents without the prior
written consent of Banks. Each of the Banks may transfer its rights under this
Forbearance Agreement or the Credit Documents to any successor in interest.
22. Construction. As used herein, the word "include(s)" means
"include(s), without limitation", and the word "including" means "including, but
not limited to".
23. Default. The failure of Borrower to comply with any provision of
this Forbearance Agreement or the failure of Borrower to comply with the terms
and conditions of the Credit Documents (other than the Identified Defaults)
shall constitute an Event of Default and shall entitle Banks to exercise any and
all of their rights and remedies under the Credit Documents and this Forbearance
Agreement.
24. No Waiver. No failure to exercise, and no delay in exercising any
right, power or remedy under any of the Credit Documents or under this
Forbearance Agreement shall impair any right, power or remedy that Banks may
have, nor shall such delay be construed to be a waiver of any of such rights,
powers or remedies. No waiver of any default or breach of Borrower shall be a
waiver of any other default or breach or of any default or breach subsequently
occurring. Banks shall not be deemed to have waived any right, power, or remedy
except in writing signed by an officer of Banks expressly stating that it is a
waiver of same right, power or remedy.
25. No Consent. Except as specifically provided in this Forbearance
Agreement, no express or implied consent to any further forbearance or
modifications involving any of the matters set forth in this Forbearance
Agreement or otherwise shall be inferred or implied by Banks' execution of this
Forbearance Agreement or any other action of Banks. Banks' execution of this
Forbearance Agreement shall not constitute a waiver, either express or implied,
of the requirement that any further forbearance or modification of the Credit
Documents shall require the express written approval of Banks. Each of the Banks
must provide any consent required from the Banks under this Forbearance
Agreement.
Page 16 of 21
17
26. Cumulative Remedies. The rights and remedies of Banks under this
Forbearance Agreement and the Credit Documents are cumulative and not exclusive
of any rights or remedies that Banks would otherwise have, and may be pursued at
any time and from time to time and in such order as Banks shall determine in
their sole discretion.
27. Mutual Agreement. The parties hereto agree that the terms and
provisions of this Forbearance Agreement embody their mutual intent and that
such terms and provisions are not to be construed more liberally in favor, or
more strictly against, any party. This Forbearance Agreement shall not be
construed as if it had been prepared by one of the parties, but rather as if it
had been prepared by all of the parties.
28. Time is of the Essence. Time is of the essence of this Forbearance
Agreement and the Credit Documents.
29. Headings. Section headings are for reference only and shall not
affect the interpretation or meaning of any provisions of this Forbearance
Agreement.
30. Further Performance. Borrower, whenever and as often as shall be
requested by the Banks, shall execute, acknowledge, and deliver, or cause to be
executed, acknowledged, and delivered such further instruments and documents and
to do any and all things as may be requested by Banks in order to carry out the
intent and purpose of this Forbearance Agreement and the Credit Documents.
31. Survival. The representations, warranties, acknowledgments, and
agreements set forth herein shall survive the date of this Forbearance
Agreement.
32. Binding Effect. This Forbearance Agreement shall be binding upon
and inure to the benefit of Banks, Borrower, and their respective successors and
assigns.
33. Sharing of Information. Borrower authorizes each Bank (i) to
disclose to other Banks any and all information which is now or hereafter in the
disclosing Bank's possession concerning Borrower (the "Information"), including,
without limitation, all cash deposits, account balances, financial statements,
and other reports and information regarding the businesses, financial condition,
operations, and creditworthiness of Borrower; and (ii) to discuss with other
Banks any matters which such Bank considers relevant to this Forbearance
Agreement. Borrower consents to all prior disclosures of Information between or
among Banks and to all prior discussions between or among Banks regarding
matters which they considered relevant to this Forbearance Agreement. Borrower
waives: (i) any and all claims that Borrower may have against Banks based upon
any prior or future communication between or among Banks; and (ii) any and all
rights that Borrower may now or hereafter have to require the disclosure to it
of (A) the nature or contents of communication between or among Banks, (B) the
date or time of such communications, or (C) the identities of Banks
Page 17 of 21
18
sharing Information or participating in such communications. Each Bank agrees to
hold and preserve any confidential Information it may receive regarding Borrower
which is not already public, except for disclosure: (1) to its affiliates and to
other Banks; (2) to its attorneys and other consultants engaged to render
services in connection with the Obligations and deemed by Bank to need such
information; (3) to its auditors in connection with any audit of its books and
records; (4) to any person as requested pursuant to or as required by law,
regulation or legal process; (5) to any person in connection with any legal
proceeding in which a Bank or any of its affiliates, directors, officers,
employees or agents is a defendant; (6) to any person who is already in
possession of such Information; (7) to any purchaser or any prospective
purchaser of an interest in the Obligations and to any assignee or prospective
assignee of any Bank, provided that such person agrees in advance to be bound by
the terms of this section; (8) to any person to whom it is permitted pursuant to
this Forbearance Agreement to disclose such Information; and (9) in any
proceeding involving the exercise of the rights and remedies of any of the Banks
under the Credit Documents or under this Forbearance Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Forbearance
Agreement to be executed on the dates set forth below to be effective as of the
day and year set forth above.
SIGNATURE PAGE TO FOLLOW
Page 18 of 21
19
"BANKS"
BANK ONE, ARIZONA, NA,
Dated: 12-22-00 /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: 1st Vice President
FLEET NATIONAL BANK
Dated: Dec. 22, 2000 By:/s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
IMPERIAL BANK
Dated: December 26, 2000 By: Xxxxx X. Xxxxxx
Name: Xxxxx Xxxxxx
Title: Senior Vice President
Page 19 of 21
20
"BORROWER"
HYPERCOM CORPORATION,
a Delaware corporation
Dated: December 22, 2000
By: /s/Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Executive VP & COO
HYPERCOM U.S.A., INC.,
a Delaware corporation
Dated: December 22, 2000
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
GOLDEN EAGLE LEASING, INC.,
f/k/a Hypercom Financial, Inc. (Arizona),
an Arizona corporation
Dated: December 22, 2000
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: President
HYPERCOM HORIZON, INC.,
a Missouri corporation
Dated: December 22, 2000
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
HYPERCOM INC., a/k/a Hypercom (Arizona), Inc.,
an Arizona corporation
Dated: December 22,2000
By: /s/Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Executive VP & COO
Page 20 of 21
21
HYPERCOM TRANSACTION NETWORK, INC. (Arizona),
an Arizona corporation
Dated: December 22, 2000
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
HYPERCOM MANUFACTURING RESOURCES, INC., (Arizona)
an Arizona corporation
Dated: December 22, 20000
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
HYPERCOM LATINO AMERICA, INC. (Arizona),
an Arizona corporation
Dated: December 22, 2000
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
ePICNETZ, INC., a Nevada corporation
Dated: December 22, 2000
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
HYPERCOM EUROPE LIMITED, INC. (Arizona)
Dated: December 22, 2000
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
Page 21 of 21
22
EXHIBIT "A"
(IDENTIFIED DEFAULTS)
23
EXHIBIT "A"
LIST OF IDENTIFIED DEFAULTS
Credit Agreement (and related documents)
1. Sections 2.1 and 2.2. Amount of draw in excess of RLC Borrowing Base.
2. Section 2.5. Borrower has not repaid excess of RLC Balance over RLC Borrowing
Base.
3. Section 4.1(b). The following stock certificates are missing and are to be
delivered as soon as practicable:
(a) Hypercom de Argentina.
(b) Hypercom Network Systems Ltd. (Hong Kong).
4. Section 7.6. Borrower is in default of the Agreements referenced herein. See
also Sections 9.1(e) and (f).
5. Section 7.19(b) and (c). Borrower is not in compliance with the financial
covenants set forth in Section 7.19(b) and (c). See also Section 9.1(b).
24
EXHIBIT "B"
(INTELLECTUAL PROPERTY)
25
HYPERCOM U.S.ISSUED PATENTS/APPLICATIONS
App No./Patent No. Title
------------------ -----
5,696,909 Virtual POS Terminal
5,844,219 POS Terminal With Replaceable Printer Cartridge
5,969,319 POS Terminal with Replaceable Printer Cartridge
60/097,988 Hybrid Transport Switching protocol
09/383,714 Methods and Apparatus for Data Communication using a Hybrid
Switching Protocol
09/130,737 Methods and Apparatus for a Past-Train Modem System
09/184,201 Systems and Methods for Determining Optimal Dialing Parameters
09/460,653 POS Connect E-Commerce
09/578,356 Pre-Paid Card System Method
09/610,824 POS Terminal Cover
26
HYPERCOM FOREIGN ISSUED PATENTS/APPLICATIONS
App. No./Patent No. Country Title
------------------- ------- -----
684417 Australia Virtual POS Terminal
2,210,535 Canada Virtual POS Terminal
96904547.5 EPO Virtual POS Terminal
98104709.7 Hong Kong Virtual POS Terminal
2,968,047 Japan Virtual POS Terminal
266951 Korea Virtual POS Xxxxxxxx
000000 Xxxxxx Virtual POS Terminal
302548 New Zealand Xxxxxxx XXX Xxxxxxxx
X0000 00000 Xxxxxxxxx Virtual POS Xxxxxxxx
XX 0000000-0 Xxxxxx Virtual POS Terminal
95191614.1 China Virtual POS Xxxxxxxx
000 000 Xxxxxxxxxxxxxx Virtual XXX Xxxxxxxx
000 000 Xxxxxxx Xxxxxxx XXX Xxxxxxxx
X-000000 Xxxxxxxxx Virtual POS Terminal
973437 Norway Virtual POS Terminal
31351 Philippines Virtual POS Terminal
179048 Poland Virtual POS Xxxxxxxx
0000000 Xxxxxx Virtual POS Xxxxxxxx
00000 Xxxxxxxxx Virtual XXX Xxxxxxxx
000000 Xxxxx Xxxxxx Virtual POS Terminal
000000 Xxxxxxxx Virtual POS Xxxxxxxx
XX 0000 00000 X Xxxxxx Virtual POS Terminal
PI 9600289 Malaysia Virtual POS Terminal
97084363M Ukraine Virtual POS Terminal
702062 Australia POS Terminal with Replaceable Printer
Cartridge
96921755.3 European Union POS Terminal with Replaceable Printer
Cartridge
98105101.8 Hong Kong POS Terminal with Replaceable Printer
Cartridge
0000000 Xxxxxx POS Terminal with Replaceable Printer
Cartridge
311533 New Zealand POS Terminal with Replaceable Printer
Cartridge
PCT/US96/10745 PCT POS Terminal with Replaceable Printer
Cartridge
X 00 00 00000 Xxxxxxxxx POS Terminal with Replaceable Printer
Cartridge
P-961799 Indonesia POS Terminal with Replaceable Printer
Cartridge
00000 Xxxxxxxxxxx POS Terminal with Replaceable Printer
Cartridge
27
9705274 Singapore POS Terminal with Replaceable Printer
Xxxxxxxxx
00/0000 Xxxxx Xxxxxx POS Terminal with Replaceable Printer
Cartridge
08/494,263 Thailand POS Terminal with Replaceable Printer
Cartridge
PI 9602522 Malaysia POS Terminal with Replaceable Printer
Cartridge
PCT/US97/15693 PCT Method and Apparatus for Interfacing an IC
Card with a Perso
28
HYPERCOM COPYRIGHTS
-------------------
Reg. No. Title
-------- -----
TX 3458 088 Networking Cookbook 4 Network
29
HYPERCOM U.S. REGISTERED/PENDING TRADEMARKS
-------------------------------------------
Serial No./Reg. No. Title
------------------- -----
1,797,642 HYPERCOM
1,796,301 HYPERCOM (Design)
2,074,607 VIRTUAL POS
1,658,115 MEGANAC
1,751,043 MININAC
1,956,902 MINIROUTER
1,921,780 TERM-MASTER
1,878,312 VIRTUAL MAPPED SNA
2,196,537 CHIPSTRIPE
75/444,040 REALPLAY
2,322,397 ASCENDENT
75/487,131 EPASSAGE
75/496,840 HYPERCOM FASTPOS
2,407,094 ICE-PAC
75/652,010 IENVIEW
75/662,922 IEN 2000
75/662,636 ICE
75/676,749 HYPERWARE
2,411,537 THE GLOBAL LEADER IN ELECTRONIC TRANSACTION
SOLUTIONS
75/767,521 SMARTICE
75/804,442 XXXXXXXX.XXX
75/804,440 THE COM IN DOT-COM
75/837,231 CLICKS AND MORTAR
75/847,737 EPIC (Stylized)
75/867,705 EPOS-INFOCOMMERCE
76/151,181 MICROTRAX
75/909,019 SHOPHOSTZ
75/916,994 EPICPORTZ
76/151,183 WINEPS
76/011,067 EPICRECEIPTS
76/008,042 EPICWALL
76/011,557 EPICCOMMERCE
76/008,076 EPICPACK
76/012,321 EPICMAIL
76/017,404 EPICNETZ
76/021,456 IEN 2500 ,
76/021,457 IEN 4000
76/022,404 IEN 6000
76/053,859 BROWSER POWERED
76/064,254 EPICTRANZ
76/161,777 FASTCOM
30
76/152,557 SMARTCAR REDE (Stylized)
76/161,635 E SMARTCARD (Stylized)
31
HYPERCOM FOREIGN REGISTERED/PENDING TRADEMARKS
Serial No./Reg. No. Country Title
635,530 Australia HYPERCOM
TMA503,528 Canada HYPERCOM
TMA504,377 Canada HYPERCOM
95555452 France HYPERCOM
395 05 276.9 Germany HYPERCOM
13321 of 1999 Hong Kong HYPERCOM
349362 S. Korea HYPERCOM
639987 Mexican HYPERCOM
276729 New Zealand HYPERCOM
719229 Taiwan HYPERCOM
2008608 United Kingdom HYPERCOM
1,582,365 Argentina HYPERCOM
565490 Benelux HYPERCOM
C-63093 Bolivia HYPERCOM
950110266 China HYPERCOM
000000 Xxxxxxxx HYPERCOM
94.280 Costa Rica HYPERCOM
0000-00 Xxxxxxx HYPERCOM
240 El Salvador HYPERCOM
90,738 Guatemala HYPERCOM
64,050 Honduras HYPERCOM
148,716 Xxxxxxx XXXXXXXX
000000 Xxxxx HYPERCOM
000000 Xxxxxxxxx HYPERCOM
166137 Ireland HYPERCOM
000000 Xxxxx HYPERCOM
30,889 Nicaragua HYPERCOM
00000 Xxxxxx HYPERCOM
185,081 Paraguay HYPERCOM
000000 Xxxx HYPERCOM
0-0000-000000 Philippines HYPERCOM
307013X Portugal HYPERCOM
000000 Xxxxxx HYPERCOM
4167/95 Singapore HYPERCOM
1947429 Spain HYPERCOM
74364 Sri Lanka HYPERCOM
277,555 Uruguay HYPERCOM
8856-95 Venezuela HYPERCOM
28,489 Jamaica HYPERCOM
000000 Xxxxxxxx HYPERCOM
95/08246 Malaysia HYPERCOM
635,529 Australia HYPERCOM (Design)
32
95555453 France HYPERCOM (Design)
39505266.1 Germany HYPERCOM (Design)
13322 of 1999 Hong Kong HYPERCOM (Design)
349361 S. Korea HYPERCOM (Design)
000000 Xxxxxx HYPERCOM (Design)
276730 New Zealand HYPERCOM (Design)
719288 Taiwan HYPERCOM (Design)
2008604 United Kingdom HYPERCOM (Design)
567020 Benelux HYPERCOM (Design)
C-63092 Bolivia HYPERCOM (Design)
NYA Brazil HYPERCOM (Design)
1331302 China HYPERCOM (Design)
000000 Xxxxxxxx HYPERCOM (Design)
00.000 Xxxxx Xxxx HYPERCOM (Design)
000-00 Xxxxxxx HYPERCOM (Design)
00133 El Salvador HYPERCOM (Design)
00000 Xxxxxxxxx HYPERCOM (Design)
64,049 Honduras HYPERCOM (Design)
148 736 Hungary HYPERCOM (Design)
000000 Xxxxx HYPERCOM (Design)
000000 Xxxxxxxxx HYPERCOM (Design)
166138 Ireland HYPERCOM (Design)
000000 Xxxxx HYPERCOM (Design)
30,875 Nicaragua HYPERCOM (Design)
00000 Xxxxxx HYPERCOM (Design)
185,082 Paraguay HYPERCOM (Design)
00000 Xxxx HYPERCOM (Design)
0-0000-000000 Philippines HYPERCOM (Design)
000000X Xxxxxxxx HYPERCOM (Design)
0000/00 Xxxxxxxxx HYPERCOM (Design)
19477428 Spain HYPERCOM (Design)
74365 Sri Lanka HYPERCOM (Design)
TM51614 Thailand HYPERCOM (Design)
000000 Xxxxxxx HYPERCOM (Design)
8855-95 Venezuela HYPERCOM (Design)
29,300 Jamaica HYPERCOM (Design)
000000 Xxxxxxxx HYPERCOM (Design)
95/08247 Malaysia HYPERCOM (Design)
2.219.133 Spain HYPERCOM (Design)
335.924 Portugal HYPERCOM (Design)
851481 Australia ICE
1882927 EPO ICE
624292 New Zealand ICE
NYA Brazil ICE
001860428 EPO EPICRECEIPTS
00000 Xxxxxx EPICRECEIPTS
33
00000 Xxxxxx EPICWALL
00000 Xxxxxx EPICCOMMERCE
00000 Xxxxxx EPICPACK
001860154 EPO EPICMAIL
00000 Xxxxxx EPICMAIL
001861186 EPO EPICNETZ
00000 Xxxxxx EPICNETZ
00
XXXXXXX "X"
(XXXX FLOW PROJECTIONS)
35
HYPERCOM CORPORATION
--------------------
CASH FLOW FORECAST (U.S. OPERATIONS)
BUDGET
(DOLLARS IN THOUSANDS)
ACTUAL DECEMBER 2000-JANUARY 2001 FORECAST
------ ------------------------------------------------------------------------------------------
WEEKLY
---------------------------------------------------------------------------------------------------
WEEK BEGINNING DEC 04 DEC 11 DEC 18 DEC 25 TOTAL JAN 01 JAN 08 JAN 15 JAN 22 JAN 29 JAN (5 WKS)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ----------
BEGINNING CASH BALANCE [1] $ 6,978 $ 3,476 $ 2,096 $ 941 $ 6,978 $ 336 $ (579) $ (384) $(2,264) $ (569) $ 336
CASH RECEIPTS:
Collections 2,941 3,320 2,470 2,320 11,051 2,560 3,070 2,570 4,070 3,570 15,840
HK mortgage proceeds -- -- 1,600 -- 1,600 -- -- -- -- -- --
Shareholder contribution -- -- 1,500 -- 1,500 -- -- -- -- -- --
Golden Eagle lease
receipts [3] -- -- -- -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
2,941 3,320 5,570 2,320 14,151 2,560 3,070 2,570 4,070 3,570 15,840
CASH DISBURSEMENTS:
Vendors-PO's 2,833 1,850 2,850 2,850 10,383 1,850 1,850 1,350 1,350 1,350 7,750
Vendors-Non PO's 898 850 850 850 3,448 850 850 850 850 850 4,250
HCL (China) transfer [4] -- 1,000 -- (1,000) -- -- -- -- -- -- --
Payroll 1,992 -- 2,100 -- 4,092 2,000 -- 2,000 -- 2,100 6,100
Benefit transfers 95 50 50 50 245 50 50 50 50 50 250
Golden Eagle lease
fundings [3] 525 700 750 -- 1,975 -- -- -- -- -- --
Foreign subsidiary fundings 100 125 125 125 475 125 125 125 125 125 625
Forbearance fee -- 125 -- 50 175 -- -- 75 -- 125 200
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
6,442 4,700 6,725 2,925 20,792 4,875 2,875 4,450 2,375 4,600 19,175
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NET OPERATING CASH FLOW (3,502) (1,380) (1,155) (605) (6,642) (2,315) 195 (1,880) 1,695 (1,030) (3,335)
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
ENDING CASH BALANCE [2] $ 3,476 $ 2,096 $ 941 $ 336 $ 336 $(1,979) $ (384) $(2,264) $ (569) $(1,599) $(2,999)
====== ======= ======= ======= ======= ------- ------- ------- ------- ------- -------
ASSET SALES:
UK lease proceeds -- -- -- 7,000 -- -- -- -- 7,000
Bank group paydown (at 80%) -- -- -- (5,600) -- -- -- -- (5,600)
------ ------- ------- ------ ------ ------- ------- ------- -------
-- -- -- 1,400 -- -- -- -- 1,400
------ ------- ------- ------ ------ ------- ------- ------- -------
ENDING CASH BALANCE AFTER ASSET
SALE PROCEEDS 941 336 336 (579) (384) (2,264) (569) (1,599) (1,599)
ENDING CUSHION PAYDOWN:
Net Operating Cash Balance -- -- -- -- -- --
------ ------- ------ ------- ------- -------
-- -- -- -- -- --
ENDING CASH BALANCE AFTER ASSET
SALE PROCEEDS AND ROLLING
CUSHION PAYDOWNS $ 941 $ 336 $ 336 $ (579) $ (384) $(2,264) $ (569) $(1,599) $(1,599)
------ ------- ------- ------ ------ ------- ------- ------- -------
------------------------------------------------------------------
[1] Represents the operating cash flow balance including asset sale proceeds.
[2] Represents the operating cash flow balance including asset sale proceeds
except for the specific week in which asset sale proceeds occur and the
total month column which specifically exclude these items.
[3] It is assumed that the Company refinance, with a third party lender, the
Hypercom funded leases (approximately $5.0 million) and that the resulting
financing (approximately $4.0 million at an 80% advance rate) is sufficient
to fund new leases through February 2, 2001.
[4] In order to comply with certain conditions related to tax status in China,
the Company is required to flow a minimum amount of funds through it's
Chinese subsidiary. A transfer of $2.0 million is required by year end which
will be achieved via the transfer of $1.0 million from the US to HCL
(circulated twice) prior to being returned to the US two weeks later.
36
HYPERCOM CORPORATION
CASH FLOW FORECAST (U.S. OPERATIONS)
BUDGET
(Dollars in Thousands)
ACTUAL DECEMBER 2000 - JANUARY 2001 FORECAST
------ ---------------------------------------------------------------------------------------
WEEKLY
-----------------------------------------------------------------------------------------------
WEEK BEGINNING DEC 04 DEC 11 DEC 18 DEC 25 TOTAL JAN 01 JAN 08 JAN 15 JAN 22 JAN 29 JAN (5 WKS)
------ ------ ------ ------ ----- ------ ------ ------ ------ ------ -----------
ROLLING CUSHION:
NET OPERATING CASH BALANCE
--------------------------
Ending Cash Balance After Asset
Sale Proceeds $ 941 $ (579) $(2,264) $(1,599)
Less: cumulative cash from
Asset Sales - (1,400) (1,400) (1,400)
Less: cash due to excess
collections - - - -
------ ------- ------- -------
Operating cash surplus 941 (1,979) (3,664) (2,999)
Less: net operating cash
balance threshold 3,000 3,000 3,000 3,000
------ ------- ------- -------
Amount above threshold - - - -
------ ------- ------- -------
Bank group paydown at 60% $ - $ - $ - $ -
------ ------- ------- -------
37
HYPERCOM CORPORATION
--------------------
CASH FLOW FORECAST (U.S. OPERATIONS)
ACTUAL
(DOLLARS IN THOUSANDS)
ACTUAL DECEMBER 2000 -- JANUARY 2001 FORECAST
------ ------------------------------------------------------------------------------------
WEEKLY
---------------------------------------------------------------------------------------------
JAN
WEEK BEGINNING DEC 04 DEC 11 DEC 18 DEC 25 TOTAL JAN 01 JAN 08 JAN 15 JAN 22 JAN 29 (5 WKS)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
BEGINNING CASH BALANCE [1] $6,978 $3,476 $3,476 $3,191 $6,978 $3,191 $3,076 $3,076 $3,030 $3,030 $3,191
CASH RECEIPTS:
Collections 2,941 -- -- -- 2,941 -- -- -- -- -- --
HK mortgage proceeds -- -- -- -- -- -- -- -- -- -- --
Shareholder contribution -- -- -- -- -- -- -- -- -- -- --
Golden Eagle lease receipts [3] -- -- -- -- -- -- -- -- -- -- --
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
2,941 -- -- -- 2,941 -- -- -- -- -- --
CASH DISBURSEMENTS:
Vendors - PO's 2,833 -- -- -- 2,833 -- -- -- -- -- --
Vendors - Non PO's 898 -- -- -- 898 -- -- -- -- -- --
HCL (China) transfer [4] -- -- -- -- -- -- -- -- -- -- --
Payroll 1,992 -- -- -- 1,992 -- -- -- -- -- --
Benefit transfers 95 -- -- -- 95 -- -- -- -- -- --
Golden Eagle lease fundings [3] 525 -- -- -- 525 -- -- -- -- -- --
Foreign subsidiary fundings 100 -- -- -- 100 -- -- -- -- -- --
Forbearance fee -- -- -- -- -- -- -- -- -- --
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
6,442 -- -- -- 6,442 -- -- -- -- -- --
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
NET OPERATING CASH FLOW (3,502) -- -- -- (3,502) -- -- -- -- -- --
------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
ENDING CASH BALANCE [2] $3,476 $3,476 $3,476 $3,191 $3,476 $3,191 $3,076 $3,076 $3,030 $3,030 $3,191
======= ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
ASSET SALES:
UK lease proceeds -- -- -- -- -- -- -- -- --
Bank group paydown (at 80%) -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
ENDING CASH BALANCE AFTER ASSET
SALE PROCEEDS 3,476 3,191 3,476 3,191 3,076 3,076 3,030 3,030 3,191
------ ------ ------ ------ ------ ------ ------ ------ ------
-- -- -- -- -- -- -- --
ENDING CUSHION PAYDOWN:
Net Operating Cash Balance (286) (286) (114) (46) (18) (178)
------ ------ ------ ------ ------ ------
(286) (286) (114) (46) (18) (178)
ENDING CASH BALANCE AFTER ASSET SALE
PROCEEDS AND ROLLING CUSHION PAYDOWNS $3,191 $3,191 $3,191 $3,076 $3,076 $3,030 $3,030 $3,012 $3,012
------ ------ ------ ------ ------ ------ ------ ------ ------
----------------------------------------------
[1] Represents the operating cash flow balance including asset sale proceeds.
[2] Represents the operating cash flow balance including asset sale proceeds
except for the specific week in which asset sale proceeds occur and the
total month column which specifically exclude these items.
[3] It is assumed that the Company refinance, with a third party lender, the
Hypercom funded leases (approximately $5.0 million) and that the resulting
financing (approximately $4.0 million at an 80% advance rate) is sufficient
to fund new leases through February 2, 2001.
[4] In order to comply with certain conditions related to tax status in China,
the Company is required to flow a minimum amount of funds through its
Chinese subsidiary. A transfer of $2.0 million is required by year end
which will be achieved via the transfer of $1.0 million from the US to HCL
(circulated twice) prior to being returned to the US two weeks later.
38
HYPERCOM CORPORATION
CASH FLOW FORECAST (U.S. OPERATIONS)
ACTUAL
(Dollars in Thousands)
ACTUAL DECEMBER 2000 - JANUARY 2001 FORECAST
------ -----------------------------------------------------------------------------------
WEEKLY
-------------------------------------------------------------------------------------------
Week Beginning DEC 04 DEC 11 DEC 18 DEC 25 TOTAL JAN 01 JAN 08 JAN 15 JAN 22 JAN 29 JAN (5 WKS)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -----------
Rolling Cushion:
NET OPERATING CASH BALANCE
Ending Cash Balance After Asset
Sale Proceeds $3,476 $3,191 $3,076 $3,030
Less: cumulative cash from
Asset Sales -- -- -- --
Less: cash due to excess
collections -- -- -- --
------ ------ ------ ------
Operating cash surplus 3,476 3,191 3,076 3,030
Less: net operating cash balance
threshold 3,000 3,000 3,000 3,000
------ ------ ------ ------
Amount above threshold 476 191 76 30
------ ------ ------ ------
Bank group paydown at 60% $ 286 $ 114 $ 46 $ 18
------ ------ ------ ------
