EXHIBIT 10.1
AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT
As of June 30, 2002
Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Congress Financial Corporation ("Lender") has entered into financing
arrangements with Golden Eagle Leasing, Inc., an Arizona corporation
("Borrower"), and Hypercom Corporation, an Arizona corporation ("Guarantor"),
pursuant to which Lender has made and may make loans and advances to Borrower as
set forth in the Loan and Security Agreement, dated as of August 28, 2001,
between Borrower and Lender, as amended by Amendment No. 1 to Loan and Security
Agreement, dated as of March 31, 2002, between Borrower, Guarantor and Lender
(as the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement"), and other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto (together
with this Amendment, all of the foregoing, including the Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to herein as the
"Financing Agreements"). All capitalized terms used herein shall have the
respective meanings assigned thereto in the Loan Agreement, unless otherwise
defined herein.
Borrower has requested certain amendments to the Loan Agreement and
Lender is willing to agree to such amendments, subject to the terms and
conditions contained herein. By this Amendment, Lender, Borrower and Guarantor
desire and intend to evidence such amendments.
In consideration of the foregoing, and the respective agreements and
covenants contained herein, the parties hereto agree as follows:
1. Amendments to Loan Agreement.
(a) Section 1.4 of the Loan Agreement is hereby amended by
deleting such Section in its entirety and substituting the following therefor:
"1.4 `Adjusted Tangible Net Worth' shall mean as to any
Person, at any time, in accordance with GAAP (except as
otherwise specifically set forth below),
on a consolidated basis for such Person and its Subsidiaries
(if any), the amount equal to the difference between: (a) the
aggregate net book value of all assets of such Person and its
Subsidiaries (excluding the value of patents, trademarks,
tradenames, copyrights, licenses, goodwill, leasehold
improvements, prepaid assets and other intangible assets),
calculating the book value of Inventory for this purpose on a
first-in-first-out basis, after deducting from such book
values all appropriate reserves in accordance with GAAP
(including all reserves for doubtful receivables,
obsolescence, depreciation and amortization) and (b) the
aggregate amount of the Indebtedness and other liabilities of
such Person and its Subsidiaries (including tax and other
proper accruals)."
(b) Section 9.21 of the Loan Agreement is hereby amended by
deleting such Section in its entirety and substituting the following therefor:
"9.21 Adjusted Tangible Net Worth. Borrower shall, at
all times, maintain Adjusted Tangible Net Worth of not less
than $21,000,000."
2. Amendment Fee. In addition to all other fees, charges, interest and
expenses payable by Borrower to Lender, Borrower shall pay to Lender, an
amendment fee in an amount equal to $2,500 (the "Amendment Fee"), which shall be
fully earned and nonrefundable as of the date hereof and shall be due and
payable on the date hereof. Lender may, at its option, charge the Amendment Fee
directly to any loan account of Borrower.
3. Representations, Warranties and Covenants. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrower to Lender pursuant to the other Financing Agreements, Borrower
and Guarantor hereby represent, warrant and covenant with and to Lender as
follows (which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof and shall be incorporated into
and made a part of the Financing Agreements):
(a) The failure of Borrower to comply with the covenants,
conditions and agreements contained herein or in any other agreement, document
or instrument at any time executed and/or delivered by Borrower with, to or in
favor of Lender shall constitute an Event of Default under the Financing
Agreements.
(b) This Amendment has been duly executed and delivered by
Borrower and Guarantor and is in full force and effect as of the date hereof,
and the agreements and obligations of Borrower and Guarantor contained herein
constitute legal, valid and binding obligations of Borrower and Guarantor
enforceable against Borrower and Guarantor in accordance with their respective
terms.
(c) As of the date hereof, no Event of Default or act, condition
or event which with notice or passage of time or both would constitute an Event
of Default, has occurred or is continuing.
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4. Conditions Precedent. The effectiveness of the other terms and
provisions contained herein shall be subject to the following conditions
precedent:
(a) the receipt by Lender of an original of this Amendment, in
form and substance satisfactory to Lender, duly authorized, executed and
delivered by Borrower and Guarantor; and
(b) as of the date hereof, no Event of Default or act, condition
or event which with notice or passage of time or both would constitute an Event
of Default, shall exist or have occurred and be continuing.
5. Effect of this Agreement. Except as modified pursuant hereto, no
other changes or modifications in the Loan Agreement or the other Financing
Agreements are intended or implied and the Financing Agreements are hereby
specifically ratified, restated and confirmed by the parties hereto as of the
effective date hereof. To the extent of conflict between the terms of this
Amendment and the other Financing Agreements, the terms of this Amendment shall
control.
6. Governing Law. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York without regard to principals of conflicts
of laws, but excluding any rule of law that would cause the application of the
law of any jurisdiction other that the laws of the State of New York.
7. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns.
8. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto. This Amendment may be executed and delivered by telecopier
with the same force and effect as if it were a manually executed and delivered
counterpart.
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9. Further Assurances. The parties hereto shall execute and deliver
such additional documents and take such additional action as may be necessary or
reasonably desirable to effectuate the provisions and purposes of this
Amendment.
Very truly yours,
GOLDEN EAGLE LEASING, INC.
By: /s / Xxxxx Xxxxxxx
-------------------
Title: Senior Executive Officer
HYPERCOM CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------
Title: CFO
AGREED:
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxxx
Title: Vice President
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