EXHIBIT 10.1
AMENDMENT NUMBER THREE
TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT (the
"Amendment") is entered into as of February 13, 2002, 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, and by
Amendment Number Two to Loan and Security Agreement dated November 13, 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, the Borrowers and Parent have requested that Agent and the
Lenders amend certain provisions of the Loan Agreement as provided herein; and
WHEREAS, Agent and the Lenders are willing to 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 1.1 of the Loan Agreement is amended by adding the
following defined terms:
"Preferred Stock" means, as applied to the capital stock of any
Person, the capital stock of any class or classes (however
designated) that is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Person, over shares of capital
stock of any other class of such Person.
"Prohibited Preferred Stock" means any Preferred Stock that by its
terms is mandatorily redeemable or subject to any other payment
obligation (including any obligation to pay dividends, other than
dividends of shares of Preferred Stock of the same class and series
payable in kind or dividends of shares of common stock) on or before
a date that is more than one year after the Maturity Date, or, on or
before the date that is more than one year after the Maturity Date,
is redeemable at the option of the holder thereof for cash or assets
or securities (other than distributions in kind of shares of
Preferred Stock of the same class and series or of shares of common
stock).
(b) Section 3.2(g) of the Loan Agreement hereby is amended and
restated in its entirety to read as follows:
"(g) no later than February 28, 2002, Parent and the Borrowers
shall, 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;"
(c) The following Sections 3.2(h) and 3.2(i) are hereby added to
the Loan Agreement immediately following Section 3.2(g) thereto:
"(h) no later than February 28, 2002, Parent and the Borrowers
shall:
(i) deliver such agreements, instruments or other documents
as any Initial Lender may reasonably request in order to subject to valid
and enforceable liens in favor of the Agent, for the benefit of the
Lenders, on (A) the accounts receivables of Hypercom do Brasil Industria e
Comercio Limitada, (B) the inventory of Schalter Eletronica Limitada,
Netset SP Tecnologia e Servicos em Teleinformatica Limitada and Hypercom
do Brasil Industria e Comercio Limitada and (C) the assets of Hypercom
EMEA located in the U.K., each in a form that is valid and effective in
accordance with applicable law;
(ii) deliver such agreements, instruments or other documents
as any Initial Lender may reasonably request in order to pledge the stock
of (a) Hypercom Electronic Manufacturing (Shenzhen) Co. Ltd.; (b) Hypercom
Argentina S.A.; and (c) Hypercom Gmbh in favor of the Agent, for the
benefit of the Lenders, in a form that is valid and enforceable in
accordance with applicable law; and
(iii) 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, that the accounts receivables and
inventory of Hypercom do Brasil Industria e Comercio Limitada are subject
to valid and enforceable liens of the
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Agent, for the benefit of the Lenders, and as to such other matters as the
Initial Lenders may reasonably request; and
(iv) simultaneously with title passing on the Brazilian
Atibaia plant to Parent or any of its Subsidiaries, Borrower and Parent
will deliver such agreements, instruments or other documents as any
Initial Lender may reasonably request in order to subject such plant to
valid and perfected second lien of the Agent for the benefit of the
Lenders."
(d) Schedule 5.8(c) to the Loan Agreement is amended in its
entirety by the schedule attached hereto as Exhibit A.
(e) Schedule A to the Stock Pledge Agreement is amended in its
entirety by the schedule attached hereto as Exhibit B.
3. Waiver.
(a) The Borrowers and Parent hereby acknowledge that in violation
of Section 3.2(g) of the Loan Agreement (prior to the effectiveness of this
Amendment) Borrowers have failed to deliver to the Initial Lenders certain
required deliveries required to be made by the terms thereof (the "Designated
Events of Default").
(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;
(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.
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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 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
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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
Three 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/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive VP & COO
BORROWERS:
HYPERCOM U.S.A., INC., HYPERCOM MANUFACTURING RESOURCES, INC.,
a Delaware corporation an Arizona corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: Secretary
HYPERCOM HORIZON, INC., EPICNETZ, INC.,
a Missouri corporation a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: Secretary
Signature page to Amendment Number Three to Loan and Security Agreement
(continued)
BORROWERS (continued)
HYPERCOM LATINO AMERICA, INC., HYPERCOM EMEA, INC.,
an Arizona corporation an Arizona corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: Secretary
HYPERCOM (ARIZONA), INC.,
an Arizona corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
LENDERS:
FOOTHILL CAPITAL CORPORATION, ABLECO FINANCE LLC,
a California corporation, as Agent a Delaware limited liability company,
and as a Lender as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. Genda
Name: ▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. Genda
Title: Vice President Title: SVP & Chief Credit Officer
