EXHIBIT 4.1
SEVENTH AMENDMENT TO CREDIT AGREEMENT
AND
WAIVER AGREEMENT
This Seventh Amendment to Credit Agreement and Waiver Agreement (this
"Amendment") is made and entered into as of April 30, 2002, by and among ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ BANK, a New York state banking association, formerly known as CHASE
BANK OF TEXAS, N.A., a national banking association ("Lender"), TIDEL
ENGINEERING, L.P. ("Borrower"), a Delaware limited partnership, and TIDEL
TECHNOLOGIES, INC., a Delaware corporation ("Ultimate Parent").
RECITALS:
A. On April 1, 1999, Lender, Borrower, and Ultimate Parent entered into
that certain Credit Agreement (including all amendments thereto, the "Credit
Agreement") pursuant to which Lender agreed to make loans and advances
(collectively the "Loans") to Borrower and Ultimate Parent in accordance with
the terms thereof. Lender, Borrower and Ultimate Parent entered into that
certain First Amendment to Credit Agreement, effective as of September 30, 1999,
that certain Second Amendment to Credit Agreement, effective as of September 8,
2000; that certain Third Amendment to Credit Agreement, effective as of
September 8, 2000; that certain Fourth Amendment to Credit Agreement, effective
as of November 28, 2000; and that certain Fifth Amendment to Credit Agreement
and Forbearance Agreement, effective as of June 1, 2001.
B. The Loans are evidenced by that certain Revolving Credit Note dated
November 28, 2000 in the stated principal amount of $10,000,000.00, and that
certain Term Note of even date with the Credit Agreement, in the stated
principal amount of $544,000.00, each bearing interest and being payable to the
order of Lender as therein provided (collectively, the "Notes"). The Credit
Agreement, the Notes and the documents, instruments and agreements executed in
connection therewith are collectively referred to herein as the "Loan
Documents".
C. Borrower and Ultimate Parent have requested Lender to amend the
Credit Agreement to provide for various modifications, including without
limitation, the following:
(1) a waiver of application of the financial covenants set
forth in the Sections 8.11, dealing with the Interest Coverage Ratio,
and 8.12, dealing with Tangible Net Worth, of the Credit Agreement;
(2) reducing the Revolving Commitment from $7,000,000 to
$4,680,000 from the date of this Amendment to May 10, 2002, and then
from $4,680,000 to $2,000,000 effective May 10, 2002 and thereafter;
(3) an extension of the Revolving Loan Maturity Date from
April 30, 2002 to August 30, 2002; and
(4) a pledge of a $2,200,000 money market account to Lender
by Ultimate Parent.
D. Lender, at the request of Borrower and Ultimate Parent, for good and
valuable consideration, is willing to enter into this Amendment and to consent
to amendments and the modifications to the Credit Agreement, as requested by
Borrower and Ultimate Parent, subject to the terms and conditions of this
Amendment.
AGREEMENT:
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrower, Ultimate Parent, and Lender hereby
agree to the Recitals stated above and further covenant and agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Credit Agreement.
2. Borrowing Base. Clause (b) of the definition of "Borrowing Base" in
Section 1.1 of the Credit Agreement is hereby amended to read in its entirety as
follows:
"(b) the lesser of
(i) fifty percent (50%) of the Eligible Inventory, or
(ii) one hundred percent (100%) of the amount
determined at any time and from time to time by the
calculation in clause (a) above (it being the intention of the
parties that the dollar contribution to the Borrowing Base
based on the percentage of Eligible Inventory will not exceed
the dollar contribution to the Borrowing Base that is based on
the percentage of Eligible Receivables)."
3. Interest Payment Dates. The definition of "Interest Payment Dates"
in Section 1.1 of the Credit Agreement is hereby amended to make interest
payable on the last day of each calendar month, instead of the first Business
Day of each calendar month, and to read in its entirety as follows:
"Interest Payment Dates shall mean (a) the last day
of each calendar month prior to the Revolving Loan Maturity
Date, commencing on May 31, 2002, and (b) the Revolving Loan
Maturity Date."
4. Revolving Commitment. The definition of "Revolving Commitment" in
Section 1.1 of the Credit Agreement is hereby amended to read in its entirety as
follows:
"Revolving Commitment shall mean the obligation of the Lender
to make Revolving Loans and incur liability for the Letter of Credit
Exposure Amount in an aggregate principal amount at any one time
outstanding up to, but not exceeding,
(a) Four Million Six Hundred Eighty Thousand Dollars
($4,680,000) from April 30,
2002 to May 10, 2002, and
(b) Two Million Dollars ($2,000,000) from and after
May 10, 2002,
in all instances, as the same may be reduced from time to time pursuant
to Section 2.4 hereof."
5. Revolving Loan Maturity Date. The definition of "Revolving Loan
Maturity Date" in Section 1.1 of the Credit Agreement is hereby amended to read
in its entirety as follows:
"Revolving Loan Maturity Date shall mean the earlier
of (a) ▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) any date that the Revolving
Commitment is terminated in full by the Borrower pursuant to
Section 2.4 hereof, and (c) any date the Revolving Loan
Maturity Date is accelerated by the Lender pursuant to Section
9.1 hereof."
6. Termination of LIBOR Option. Section 2.8(a) of the Loan Agreement is
amended to delete the Interest Option that otherwise would allow any portion of
the principal balances outstanding under the Revolving Note to bear interest at
the Adjusted LIBOR Rate, and to read in full as follows:
"(a) Subject to Section 10.6 hereof, the
Revolving Note shall bear interest on their respective
outstanding principal balances at the Alternate Base Rate;
provided, that all past due principal and interest shall bear
interest at the Past Due Rate, which shall be payable on
demand."
In addition, Section 2.8(b) of the Credit Agreement is deleted in its entirety.
7. Interest Coverage Ratio and Tangible Net Worth. Lender hereby waives
application of the financial covenants set forth in the Credit Agreement in
Section 8.11, dealing with the Interest Coverage Ratio, and Section 8.12,
dealing with Tangible Net Worth, for the period beginning the date of this
Amendment up to August 30, 2002.
8. Borrowing Base Certificate. Exhibit H to the Credit Agreement, the
form of Borrowing Base Certificate, is hereby is hereby amended to read in its
entirety as set forth on Exhibit H attached hereto.
9. Conditions Precedent to Consent to Amendment. The effectiveness of
this Amendment is subject to the satisfaction of the following conditions
precedent, unless specifically waived in writing by Lender:
(1) The representations and warranties contained herein
and in all Loan Documents, as amended hereby, shall
be true and correct in all material respects as of
the date hereof as if made on the date hereof;
(2) No Event of Default by Borrower or Ultimate Parent
under the Loan Documents, as amended hereby, as of
the date hereof, shall have occurred and be
continuing and no event or conditions shall have
occurred that with the giving of notice or lapse of
time or both would be an Event of Default by Borrower
or Ultimate Parent under the Loan Documents, as
amended hereby, as of the date hereof, unless such
Event of Default is covered by the forbearance
provisions set forth in Section 5, below, or has been
specifically waived in writing by Lender; and
(3) Lender shall have received a security agreement
covering and a pledge of the money market account of
Ultimate Parent at ▇▇ ▇▇▇▇▇▇ Securities of Texas,
Inc., account number 343420, with a "Settlement
Amount" of at least $2,200,000, in form and substance
evidence reasonably satisfactory to Lender, together
with a control agreement and any applicable financing
statements, as may be appropriate under the Uniform
Commercial Code.
(4) Lender shall have received evidence reasonably
satisfactory to Lender that Ultimate Parent's pledge
of the money market account referenced above been
duly approved by Ultimate Parent.
10. Costs and Expenses. Borrower agrees to reimburse Lender for
Lender's costs and expenses, including, but not limited to, reasonable
attorneys' fees and legal expenses, incurred by Lender in connection with the
preparation of this Amendment and in connection with the negotiation and
consummation of the transaction contemplated hereby.
11. The Credit Agreement. All references to the Credit Agreement in the
Loan Documents shall be deemed to be the Credit Agreement, as modified hereby.
Borrower expressly promises to perform all of its obligations under the Credit
Agreement and other Loan Documents, as modified by this Amendment.
12. Acknowledgments of Borrower and Ultimate Parent. Borrower and
Ultimate Parent each hereby acknowledge and agree that (a) Lender is not in
default in the performance of its obligations under the Loan Documents; (b)
Borrower and Ultimate Parent have no claims, counterclaims, offsets, credits or
defenses to the Loan Documents and the performance of their respective
obligations thereunder, or if Borrower or Ultimate Parent have any such claims,
counterclaims, offsets, credits or defenses to the Loan Documents or any
transaction related to the Loans and/or the Loan Documents, same are hereby
waived, relinquished and released in consideration of Lender's execution and
delivery of this Amendment; (c) all of the provisions of the Loan Documents,
except as amended hereby, are in full force and effect; and (d) upon the
execution hereof, the Credit Agreement, the Notes, and the other Loan Documents,
as amended herein, are not in default by Borrower or Ultimate Parent.
13. Full Force and Effect. Except as expressly modified and amended in
this Amendment, all of the terms, provisions and conditions of the Credit
Agreement, the Notes, and all other Loan Documents are and shall remain in full
force and effect and are incorporated herein by reference.
14. Counterparts and Facsimile Signatures. This Amendment may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original, and all of which taken together shall constitute but one and the
same instrument. Any party to this Amendment may indicate its intention to be
bound by this Amendment by its signature to the signature page hereof and the
delivery of the signature page hereof to the other party or its representatives
by facsimile transmission or telecopy. The delivery of a party's signature page
on the signature page hereof by facsimile transmission or telecopy shall have
the same force and effect as if such party signed and delivered this Amendment
in person.
15. No Oral Agreements. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS
EMBODY THE ENTIRE AGREEMENT AMONG THE PARTIES AND SUPERSEDES ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER HEREOF.
THIS WRITTEN AMENDMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this Sixth Amendment to
Credit Agreement as of the day and year first above written.
LENDER:
▇▇ ▇▇▇▇▇▇ CHASE BANK, formerly
known as CHASE BANK OF TEXAS, N.A.,
a New York state banking association
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
BORROWER:
TIDEL ENGINEERING, L.P.,
a Delaware limited partnership
By: Tidel Cash Systems, Inc., its sole
general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President and Chief Executive Officer
ULTIMATE PARENT:
TIDEL TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇,
Chief Executive Officer
By its execution below, each of Tidel Technologies, Inc., a Delaware
corporation, Tidel Services Inc., a Delaware corporation, and Tidel Cash
Systems, Inc., a Delaware corporation (each individually, a "Guarantor"),
acknowledges and consents to all of the terms and conditions of this Amendment,
and ratifies and confirms its respective Guaranty to and for the benefit of
Lender. Each Guarantor acknowledges that such Guarantor has no claims,
counterclaims, offsets, credits or defenses to the Loan Documents and the
performance of its obligations thereunder, or if such Guarantor does have any
such claims, counterclaims, offsets, credits or defenses to the Loan Documents
or any transaction related to the Loans and/or the Loan Documents, same are
hereby waived, relinquished and released in consideration of Lender's execution
and delivery of this Amendment. Further, each Guarantor agrees that nothing
contained in this Amendment shall adversely affect any right or remedy of Lender
under its respective Guaranty and that with respect to such Guaranty, all
references in such Guaranty to the "Obligations" shall mean the "Obligations",
as amended by this Amendment; that the execution and delivery of this Amendment
shall in no way change or modify such Guarantor's obligations as Guarantor
pursuant to its Guaranty; and that the execution and delivery of any agreements
by Borrower and Lender in connection with this Amendment shall not constitute a
waiver by Lender of any of Lender's rights against any Guarantor.
TIDEL TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇,
Chief Executive Officer
TIDEL SERVICES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
TIDEL CASH SYSTEMS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
