EXHIBIT 10.25
AMENDMENT NO. 2
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 2 ("Amendment") is entered into as of December
21, 2001, by and among TransAct Technologies Incorporated, a Delaware
corporation having its principal place of business at 0 Xxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxxxx 00000 ("Borrower"), LaSalle Business Credit, Inc. having its
principal place of business at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
with an office located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("LaSalle"), the undersigned financial institutions (each individually a
"Lender" and, collectively, "Lenders") and LaSalle as agent for the Lenders
(LaSalle, in such capacity, "Agent").
BACKGROUND
Pursuant to a Loan and Security Agreement dated as of May 25, 2001,
(as 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 4 below, the Loan Agreement is hereby
amended as follows:
(a) Paragraph 1(a) is hereby amended as follows:
(i) the following defined term is hereby added in its
appropriate alphabetical order:
"Amendment No. 2" shall mean Amendment No. 2 to this Agreement
dated as of December 21, 2001.
"Amendment No. 2 Effective Date" shall mean the date on which
all of the conditions precedent contained in Section 4 of Amendment No. 2 shall
have been satisfied.
"Miscellaneous Charges" shall mean the sum of (a) the
aggregate amount of restructuring charges incurred by Borrower in connection
with the closing of Borrower's plant in Wallingford, Connecticut during the
Fiscal Year ending December 31, 2001, plus (b) the aggregate amount of charges
incurred by Borrower in connection with the discontinuance of the product line
consisting of model 181 front exit thermal printers during the Fiscal Year
ending December 31, 2001.
(ii) the following defined term is hereby amended in its
entirety to provide as follows:
"EBITDA" shall mean, with respect to any applicable fiscal
period, the following for Borrower on a consolidated basis, each calculated for
such period: net income before taxes for such period (excluding pre-tax gains or
losses on the sale of assets (other than the sales of Inventory in the ordinary
course of business) and excluding other pre-tax extraordinary gains), plus
interest expense, depreciation, amortization and other non-cash charges deducted
in determining net income for such period, plus the Miscellaneous Charges, minus
interest income calculated in determining net income for such period.
(iii) the defined term "Wallingford Restructuring Charges" is
hereby deleted in its entirety.
(b) 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
December 31, 2001 $8,900,000
March 31, 2002 The difference of (A) the Tangible Net
Worth as of the Fiscal Year ending
December 31, 2001 as calculated based on
the 2001 Annual Financial Statements
minus (B) $750,000 (the difference of
(A) and (B), the "Base Amount")
April 30, 2002 and each month The sum of (A) the Base Amount plus (B)
thereafter (each such month, an aggregate amount equal to eighty five
the "current month") percent (85%) of the cumulative net
income after taxes of Borrower on a
consolidated basis for the period
commencing on April 1, 2002 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.
-2-
(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, provided that the applicable period being
tested on the month ending (i) June 30, 2002 shall be for the six month period
then ended, (ii) July 31, 2002 shall be for the seven month period then ended,
(iii) August 31, 2002 shall be for the eight month period then ended, (iv)
September 30, 2002 shall be for the nine month period then ended, (v) October
31, 2002 shall be for the ten month period then ended and (vi) November 30, 2002
shall be for the eleven month period then ended:
MONTH ENDED FIXED CHARGE COVERAGE RATIO
June 30, 2002 1.0 to 1.0
July 31, 2002 1.25 to 1.0
August 31, 2002 1.25 to 1.0
September 30, 2002 and 1.5 to 1.0
each month thereafter
(iii) Capital Expenditures. Borrower on a consolidated basis shall
not make Capital Expenditures of an aggregate amount of more than (x) two
million two hundred thousand dollars ($2,200,000) during the Fiscal Year ending
December 31, 2001 and (y) two million five hundred thousand dollars ($2,500,000)
during any Fiscal Year thereafter.
(iv) Minimum Consolidated EBITDA. Borrower on a consolidated basis
shall maintain EBITDA of not less than the amounts set forth below shown
opposite such month with respect to the twelve (12) months then ended, provided
that the applicable period being tested on the month ending (i) January 31, 2002
shall be for the one month period then ended, (ii) February 28, 2002 shall be
for the two month period then ended, (iii) March 31, 2002 shall be for the three
month period then ended, (iv) April 30, 2002 shall be for the four month period
then ended, (v) May 31, 2002 shall be for the five month period then ended, (vi)
June 30, 2002 shall be for the six month period then ended, (vii) July 31, 2002
shall be for the seven month period then ended, (viii) August 31, 2002 shall be
for the eight month period then ended, (ix) September 30, 2002 shall be for the
nine month period then ended, (x) October 31, 2002 shall be for the ten month
period then ended and (xi) November 30, 2002 shall be for the eleven month
period then ended:
MONTH ENDED MINIMUM CONSOLIDATED EBITDA
January 31, 2002 ($500,000)
February 28, 2002 ($315,000)
March 31, 2002 ($50,000)
April 30, 2002 $125,000
May 31, 2002 $300,000
June 30, 2002 $715,000
July 31, 2002 $1,175,000
August 31, 2002 $1,375,000
September 30, 2002 $1,765,000
October 31, 2002 $1,850,000
November 30, 2002 $2,000,000
December 31, 2002 $2,175,000"
and each month thereafter
-3-
3. Amendment Fee. On the Amendment No. 2 Effective Date, Borrower
shall pay Agent for the benefit of Lenders an amendment fee of $5,000 (the
"Amendment Fee"). The Amendment Fee shall be deemed fully earned on the
Amendment No. 2 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 Amendment Fee on the Amendment No. 2
Effective Date.
4. 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,
TransAct UK and TransAct Barbados as Guarantors and (ii) such other
certificates, instruments, documents, agreements and opinions of counsel as may
be required by Agent or its counsel, each of which shall be in form and
substance satisfactory to Agent and its counsel.
5. 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.
-4-
6. 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 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.
7. 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.
8. 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.
9. 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]
-5-
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, INC., as Agent
and Lender
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: First Vice President
CONSENTED AND AGREED TO:
XXXXXXXX.XXX, INC., as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
TRANSACT TECHNOLOGIES LIMITED, as Guarantor
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
TRANSACT TECHNOLOGIES INTERNATIONAL LTD., as Guarantor
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
-6-
