EXHIBIT 10.2
AMENDMENT NUMBER TWO
TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT (the
"Amendment") is entered into as of November 13, 2001, between and among, on the
one hand, the lenders identified on the signature pages hereof (such lenders,
together with their respective successors and assigns, are referred to
hereinafter each individually as a "Lender" and collectively as the "Lenders"),
FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and
administrative agent for the Lenders ("Agent"), and, on the other hand, HYPERCOM
CORPORATION, a Delaware corporation ("Parent"), and each of Parent's
Subsidiaries identified on the signature pages hereof (such Subsidiaries are
referred to hereinafter each individually as a "Borrower", and individually and
collectively, jointly and severally, as the "Borrowers"), with reference to the
following:
WHEREAS, Borrowers and Parent previously entered into that certain Loan
and Security Agreement, dated as of July 31, 2001, as amended by Amendment
Number One to Loan and Security Agreement dated October 3, 2001 (as the same may
be further amended, restated, supplemented, or otherwise modified from time to
time, the "Loan Agreement"), with Agent and Lenders pursuant to which Lenders
have made certain loans and financial accommodations available to Borrowers and
Parent;
WHEREAS, certain Events of Default have occurred and are continuing;
WHEREAS, the Borrowers and Parent have requested that Agent and the
Lenders waive such Events of Default and amend the Loan Agreement in accordance
with the terms and conditions hereof; and
WHEREAS, Agent and the Lenders are willing to waive such Events of
Default and amend the Loan Agreement in accordance with the terms and conditions
hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Defined Terms. All terms used herein and not otherwise defined shall
have the meanings ascribed thereto in the Loan Agreement.
2. Amendments To The Agreement.
(a) Section 3.2 of the Loan Agreement is hereby amended by
deleting the period "." at the end of 3.2(e) and inserting ";" in lieu thereof
and adding the following subsections:
"(f) no later than November 15, 2001, Parent and the Borrowers
shall deliver to the Initial Lenders a listing of the unencumbered
assets of (1) Hypercom do Brasil Industria e Comercio Limitada; (2)
Hypercom Asia Limited;
(3) Hypercom Australia Pty. Ltd.; (4) Hypercom EMEA, Inc. (f/k/a
Hypercom Europe Limited, Inc.) located outside of the United States;
and (5) Hypercom Electronic Manufacturing (Shenzhen) Co. Ltd; and
(g) no later than November 30, 2001, Parent and the Borrowers
shall:
(i) (A) deliver such agreements, instruments or other
documents as any Initial Lender may reasonably require in order to
subject to valid and perfected Liens any or all of the assets of
Hypercom do Brasil Industria e Comercio Limitada and (B) use their best
efforts to deliver (1) a guaranty of the Borrowers' Obligations by the
entities described in clause (f) of this Section 3.2 as the Initial
Lenders may reasonably require and (2) such agreements, instruments or
other documents as any Initial Lender may reasonably require in order
to subject to valid and perfected Liens any or all of the assets of
such of the other entities described in clause (f) of this Section 3.2
as the Initial Lenders may reasonably require, provided that Initial
Lenders, Parent and Borrowers agree that Parent and Borrowers shall not
be required to take any action that will cause any such entity (other
than Hypercom do Brasil Industria e Comercio Limitada) to recognize a
material deemed dividend under Section 956 of the IRC or otherwise
suffer any material tax liability or which would violate any existing
agreement to which such entity is a party;
(ii) pursuant to Section 3(e) of the Stock Pledge
Agreement, deliver evidence satisfactory to Agent that the pledged
interest in all uncertificated stock has been registered on the
applicable stock ledger books and records of each of such pledged
entity;
(iii) pursuant to Section 3(e) of the Stock Pledge
Agreement, provide evidence satisfactory to Agent that the security
interest in the uncertificated stock of (1) Hypercom do Brasil
Industria e Comercio Limitada; (2) Hypercom Australia Pty., Ltd.; (3)
Hypercom Electronic Manufacturing (Shenzhen) Co. Ltd.; (4) Hypercom de
Argentina; and (5) Hypercom Gmbh has been perfected in accordance with
applicable law;
(iv) deliver a fully executed Collateral Access
Agreement with respect to it leased property in Miami, Florida; and
(v) provide, at the expense of the Borrowers, a legal
opinion, in form and substance satisfactory to the Initial Lenders,
from Brazilian counsel selected by the Initial Lenders, addressed to
the Initial Lenders, among other things, (A) that the pledge to the
Agent of the stock of Hypercom do Brasil Industria e Comercio Limitada
has been perfected in accordance with applicable law, (B) that the
Guaranty as executed by Hypercom do Brasil Industria e Comercio
Limitada is legal, valid and enforceable, (C) that the assets of
Hypercom do Brasil Industria e Comercio Limitada are subject to valid
and perfected Liens of the Lenders and (D) as to such other matters as
the Initial Lenders may reasonably request."
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(b) Section 6.3(c) of the Loan Agreement is hereby amended by
adding the following text at the end thereof immediately before the last comma
(,):
"; provided, however that with respect to Parent's fiscal year
ending December 31, 2001, Parent shall additionally deliver, as soon as
available, but in any event on or prior to January 31, 2002, a
Compliance Certificate together with the financial statements of Parent
and its Subsidiaries prepared by Parent and certified by Parent and
Borrowers to have been prepared in accordance with GAAP (such year-end
financial statements to include a balance sheet, income statement, and
statement of cash flow)"
(c) Section 7.20(a)(i) of the Loan Agreement is hereby amended
and restated in its entirety by the following:
"MINIMUM EBITDA. EBITDA of Parent, measured on the
fiscal period set forth below, of not less than the required
amount set forth in the following table for the applicable
period set forth opposite thereto:
Applicable Amount Applicable Period
$1,870,000 For the 3 month period
ending June 30, 2001
$6,885,000 For the 3 month period
ending September 30, 2001
$(556,000) For the one month period
ending October 31, 2001
$3,524,000 For the two month period
ending November 30, 2001
$13,940,000 For the 6 month period
ending December 31, 2001
$17,765,000 For the 9 month period
ending March 31, 2002
$22,610,000 For the 12 month period
ending June 30, 2002
$24,310,000 For the 12 month period
ending September 30, 2002
$26,265,000 For the 12 month period
ending December 31, 2002
$27,115,000 For the 12 month period
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ending March 31, 2003
$28,390,000 For the 12 month period
ending June 30, 2003
$29,835,000 For the 12 month period
ending September 30, 2003
$31,365,000 For the 12 month period
ending December 31, 2003"
3. Waiver.
(a) The Borrowers and Parent hereby acknowledge that the
following Events of Default (the "Designated Events of Default") have occurred:
(1) in violation of Section 7.20(a)(i) of the Loan
Agreement Parent has failed to maintain EBITDA of not less than
$6,885,000 for the period from July 1, 2001 through September 30, 2001;
(2) in violation of Section 7.20(a)(ii) of the Loan
Agreement Parent has failed to maintain EBITDA (excluding Golden Eagle
and any Subsidiaries of Golden Eagle) of not less than $5,270,000 for
the period from July 1, 2001 through September 30, 2001; and
(3) in violation of Section 3.2(a) of the Loan
Agreement Borrowers have failed to deliver to the Initial Lenders a
listing of the unencumbered assets of each of their CFCs within 45 days
of the Closing Date and to use their best efforts to take such actions
as reasonably requested by any Initial Lender in order to subject such
assets to a valid and perfected Lien of the Lenders.
(b) Subject to the receipt by Agent and Lenders of this
Amendment duly executed by the Borrowers and Parent and the satisfaction of the
conditions precedent set forth in Section 4, and anything in the Loan Agreement
or the other Loan Documents to the contrary notwithstanding, the Agent and the
Lenders hereby waive the Designated Events of Default.
4. Conditions Precedent. The satisfaction of each of the
following, unless waived or deferred in writing by the Agent and the Lenders in
their sole discretion, shall constitute conditions precedent to the
effectiveness of this Amendment and each and every provision hereof:
(a) the Agent shall have received this Amendment, duly
executed by the parties hereto, and the same shall be in full force and effect;
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(b) other than as waived hereby, no Default or Event of
Default shall have occurred and be continuing on the date hereof, or shall
result from the consummation of the transactions contemplated herein;
(c) other than as waived hereby, each of the representations
and warranties contained in the Loan Agreement shall be true and correct in all
respects on and as of the effectiveness hereof, as though made on and as of such
date; and
(d) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the consummation of the
transactions contemplated herein shall have been issued and remain in force by
any governmental authority against any party hereto.
5. Representations and Warranties. Each of the Borrowers and the Parent
hereby represents and warrants to the Agent and the Lenders that (a) the
execution, delivery, and performance of this Amendment and of the Loan
Agreement, as amended hereby, are within its powers, have been duly authorized
by all necessary action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or Governmental Authority, or of the terms of its Governing
Documents, or of any contract or undertaking to which it is a party or by which
any of its properties may be bound or affected, (b) this Amendment and the Loan
Agreement, as amended hereby, constitute its legal, valid, and binding
obligation, enforceable against it in accordance with its terms, and (c) this
Amendment has been duly executed and delivered by it.
6. Choice of Law and Venue; Jury Trial Waiver. This Amendment shall be
governed by and construed in accordance with the laws of the State of
California. The parties hereto agree that the provisions of Section 13 of the
Loan Agreement are hereby incorporated herein by this reference mutatis
mutandis.
7. Counterparts; Telefacsimile Execution. This Amendment may be
executed in any number of counterparts and by different parties and separate
counterparts, each of which when so executed and delivered, shall be deemed an
original, and all of which, when taken together, shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telefacsimile shall be effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment, but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.
8. Effect on Loan Documents.
(a) The Loan Agreement, as amended hereby, and each of the
other Loan Documents shall be and remain in full force and effect in accordance
with its respective terms and hereby is ratified and confirmed in all respects.
The execution, delivery, and performance of this Amendment shall not, except as
expressly set forth
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herein, operate as a waiver of or, except as expressly set forth herein, as an
amendment of, any right, power, or remedy of Agent or any Lender under the Loan
Agreement, as in effect prior to the date hereof. The waivers, consents, and
modifications herein are limited to the specifics hereof, shall not apply with
respect to any facts or occurrences other than those on which the same are
based, shall not excuse future non-compliance with the Loan Agreement, and shall
not operate as a consent to any further or other matter, under the Loan
Documents.
(b) Upon and after the effectiveness of this Amendment, each
reference in the Loan Agreement to "this Agreement", "hereunder", "herein",
"hereof" or words of like import referring to the Loan Agreement, and each
reference in the other Loan Documents to "the Agreement", "thereunder",
"therein", "thereof" or words of like import referring to the Loan Agreement,
shall mean and be a reference to the Loan Agreement as modified and amended
hereby.
(c) To the extent that any terms and conditions in any of the
Loan Documents shall contradict or be in conflict with any terms or conditions
of the Loan Agreement, after giving effect to this Amendment, such terms and
conditions are hereby deemed modified or amended accordingly to reflect the
terms and conditions of the Loan Agreement as modified or amended hereby.
9. Further Assurances. Each of the Borrowers and Parent shall execute
and deliver all agreements, documents, and instruments, in form and substance
satisfactory to Agent, and take all actions as Agent may reasonably request from
time to time, to perfect and maintain the perfection and priority of Agent's
security interests in the Collateral (for the benefit of the Lenders) and to
fully consummate the transactions contemplated under this Amendment and the Loan
Agreement.
10. Entire Agreement. This Amendment, together with all other
instruments, agreements, and certificates executed by the parties in connection
herewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings,
and inducements, whether express or implied, oral or written.
11. Costs and Expenses. The Borrowers shall pay all out-of-pocket costs
and expenses of the Initial Lenders (including, without limitation, the fees and
expenses of counsel to the Initial Lenders) in connection with this Amendment
(including, without limitation, in connection with each of the conditions
subsequent described in Section 3.2 of the Loan Agreement (as amended hereby)).
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Number Two to Loan and Security Agreement to be executed and delivered as of the
date first above written.
PARENT:
HYPERCOM CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Executive Vice President
BORROWERS:
HYPERCOM U.S.A., INC., HYPERCOM MANUFACTURING RESOURCES, INC.,
a Delaware corporation an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------- -------------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary Title: Secretary
HYPERCOM HORIZON, INC., EPICNETZ, INC.,
a Missouri corporation a Nevada corporation
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------- -------------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary Title: Secretary
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Signature page to Amendment Number Two to Loan and Security Agreement(continued)
BORROWERS (continued)
HYPERCOM LATINO AMERICA, INC., HYPERCOM EUROPE LIMITED, INC.,
an Arizona corporation an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------- -------------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary Title: Secretary
HYPERCOM (ARIZONA), INC.,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
LENDERS:
FOOTHILL CAPITAL CORPORATION, ABLECO FINANCE LLC,
a California corporation, a Delaware limited liability company,
as Agent and as a Lender as a Lender
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxx Xxxxx
------------------------- ----------------------------
Name: Xxxx Xxxxxx Name: Xxxxx Xxxxx
Title: Vice President Title: Senior Vice President and
Chief Credit Officer
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