EXHIBIT 10.29
WAIVER AND AMENDMENT NO. 4
TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 4 ("Amendment") is entered into
as of March 24, 2003, by and among TransAct Technologies Incorporated, a
Delaware corporation having its principal place of business at 0 Xxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxxxxxx 00000 ("Borrower"), LaSalle Business Credit, LLC (as
successor by merger to LaSalle Business Credit, Inc.) having its principal place
of business at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 with an office
located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("LaSalle"), the
undersigned financial institutions (each individually a "Lender" and,
collectively, "Lenders") and LaSalle as agent for the Lenders (LaSalle, in such
capacity, "Agent").
BACKGROUND
Pursuant to a Loan and Security Agreement dated as of May 25,
2001, (as the same has been and may further be amended, restated, supplemented
or otherwise modified from time to time, the "Loan Agreement") by and among
Borrower, Agent and Lenders, Agent and Lenders provide Borrower with certain
financial accommodations.
Borrower has requested that, among other things, Agent and
Lenders (i) amend certain financial covenants contained in the Loan Agreement
and (ii) amend certain other provisions of the Loan Agreement and Agent and
Lenders are willing to do so on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or
grant of credit heretofore or hereafter made to or for the account of Borrower
by Agent and Lenders, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Definitions. All capitalized terms not otherwise
defined herein shall have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction
of the conditions precedent set forth in Section 5 below, the Loan Agreement is
hereby amended as follows:
(a) Paragraph 1(a) is hereby amended by adding the
following defined terms in their appropriate alphabetical order:
"Amendment No. 4" shall mean Amendment No. 4 to this
Agreement dated as of March 24, 2003.
"Amendment No. 4 Effective Date" shall mean the date
on which all of the conditions precedent contained in Section 5 of Amendment No.
4 shall have been satisfied.
(b) The "Equipment Loan Commitment" is hereby reduced to
zero.
(c) Paragraph 15(p) is hereby amended in its entirety to
provide as follows:
"(p) Borrower on a consolidated basis shall maintain and
keep in full force and effect each of the financial covenants set forth below.
The calculation and determination of each such financial covenant, and all
accounting terms contained therein, shall be so calculated and construed in
accordance with GAAP, applied on a basis consistent with the financial
statements of Borrower delivered on or before the Closing Date:
(i) Tangible Net Worth. Borrower on a consolidated basis
shall maintain as of the end of each month a Tangible Net Worth of not less than
the amount set forth below shown opposite such month:
MONTH ENDED TANGIBLE NET WORTH
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January 31, 2003 $7,280,000
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February 28, 2003 $7,170,000
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March 31, 2003 $7,060,000
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April 30, 2003 $7,180,000
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May 31, 2003 $7,450,000
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June 30, 2003 $7,800,000
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July 31, 2003 $8,100,000
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August 31, 2003 $8,500,000
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September 30, 2003 $8,850,000
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October 31, 2003 $9,000,000
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November 30, 2003 $9,300,000
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December 31, 2003 $9,400,000
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January 31, 2004 and each month thereafter The sum of (A) $9,400,000 plus
(each such month, the "current month") (B) an aggregate amount equal to
eighty five percent (85%) of the
cumulative net income after
taxes of Borrower on a
consolidated basis for the
period commencing on January 1,
2004 through and including the
last day of the current month,
provided, however, that such
cumulative amount shall not be
reduced by the amount of any net
loss before taxes of Borrower on
a consolidated basis for any
preceding month.
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(ii) Fixed Charge Coverage Ratio. Borrower on a
consolidated basis shall maintain as of the end of each month a Fixed Charge
Coverage Ratio of not less than the ratio set forth below shown opposite such
month with respect to the twelve (12) months then ended:
MONTH ENDED FIXED CHARGE COVERAGE RATIO
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January 31, 2003 1.70 to 1.00
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February 28, 2003 1.85 to 1.00
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March 31, 2003 0.31 to 1.00
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April 30, 2003 0.28 to 1.00
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May 31, 2003 0.54 to 1.00
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June 30, 2003 1.15 to 1.00
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July 31, 2003 2.10 to 1.00
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August 31, 2003 3.30 to 1.00
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September 30, 2003 4.20 to 1.00
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October 31, 2003 and each month thereafter 4.50 to 1.00
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(iii) Capital Expenditures. Borrower on a consolidated
basis shall not make Capital Expenditures of an aggregate amount of more than
two million five hundred thousand dollars ($2,500,000) during any Fiscal Year.
(iv) Minimum Consolidated EBITDA. Borrower on a
consolidated basis shall maintain EBITDA of not less than the amounts set forth
below shown opposite such month with respect to the twelve (12) months then
ended:
MONTH ENDED MINIMUM CONSOLIDATED EBITDA
--------------------------------------------------------------------------------
January 31, 2003 $1,445,000
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February 28, 2003 $1,565,000
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March 31, 2003 $1,125,000
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April 30, 2003 $1,225,000
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May 31, 2003 $1,380,000
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June 30, 2003 $1,840,000
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July 31, 2003 $2,430,000
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August 31, 2003 $3,100,000
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September 30, 2003 $3,650,000
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October 31, 2003 $3,950,000
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November 30, 2003 $4,425,000
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December 31, 2003 $4,560,000
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January 31, 2004 and each month thereafter $4,700,000
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3. Waiver and Amendment Fee. On the Amendment No. 4
Effective Date, Borrower shall pay Agent for the benefit of Lenders an amendment
fee of $25,000 (the "Waiver and Amendment Fee"). The Waiver and Amendment Fee
shall be deemed fully earned on the Amendment No. 4 Effective Date and shall not
be subject to reduction, rebate or proration whatsoever. Borrower hereby
authorizes Agent to automatically charge Borrower's loan account with Agent for
the Waiver and Amendment Fee on the Amendment No. 4 Effective Date.
4. Waiver. Subject to satisfaction of the conditions
precedent set forth in Section 5 below, Agent and Lenders hereby waive (a)
solely with respect to the fiscal quarter ending December 31, 2002, compliance
by Borrower with the Minimum Consolidated EBITDA financial covenant set forth in
paragraph 15(p)(iv) of the Loan Agreement pursuant to which Borrower was
required to maintain Minimum Consolidated EBITDA of not less than $2,175,000 for
the twelve (12) months ended December 31, 2002 provided, that such waiver shall
only be effective if the actual Minimum Consolidated EBITDA of Borrower for such
period was not less than $2,035,000 and (b) the Event of Default that has
occurred solely as a result of the dissolution of TransAct Barbados.
5. Conditions of Effectiveness. This Amendment shall
become effective as of the date hereof when and only when Agent shall have
received in form and substance satisfactory to Agent and its counsel (i) four
(4) copies of this Amendment executed by Borrower and consented and agreed to by
XxxxxXxx.xxx and TransAct UK as Guarantors and (ii) such other certificates,
instruments, documents, agreements and opinions of counsel as may be required by
Agent or its counsel, each of which shall be in form and substance satisfactory
to Agent and its counsel.
6. Equipment Loans. Borrower hereby acknowledges that it
shall not request and no Lender shall be under any further obligation to fund
any Equipment Loan.
7. Representations and Warranties. Borrower hereby
represents and warrants as follows:
(a) This Amendment and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, Borrower
hereby reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that all such
covenants, representations and warranties shall be deemed to have been remade as
of the effective date of this Amendment.
(c) After giving effect to this Amendment, no Event of
Default or Default has occurred and is continuing or would exist.
(d) Borrower has no defense, counterclaim or offset with
respect to the Loan Agreement.
(e) The chief executive office of Borrower is 0 Xxxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxx 00000.
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8. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each
reference in the Loan Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Loan
Agreement as amended hereby.
(b) Except as specifically amended herein, the Loan
Agreement, and all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect, and
are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly set forth in Section 4 hereof, operate
as a waiver of any right, power or remedy of Agent or Lenders, nor constitute a
waiver of any provision of the Loan Agreement, or any other documents,
instruments or agreements executed and/or delivered under or in connection
therewith.
9. Governing Law. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns and shall be governed by and construed in accordance with the laws
of the State of New York.
10. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.
11. Counterparts; Facsimile. This Amendment may be
executed by the parties hereto in one or more counterparts, each of which shall
be deemed an original and all of which taken together shall be deemed to
constitute one and the same agreement. Any signature delivered by a party hereto
by facsimile shall be deemed to be an original signature hereto.
[Signature Page to Follow]
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IN WITNESS WHEREOF, this Amendment has been duly executed as
of the day and year first written above.
TRANSACT TECHNOLOGIES INCORPORATED,
as Borrower
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President and CFO
LASALLE BUSINESS CREDIT, LLC, as
Agent and Lender
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
CONSENTED AND AGREED TO:
XXXXXXXX.XXX, INC., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
TRANSACT TECHNOLOGIES LIMITED, as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
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