EX-10.17 4 p67611exv10w17.txt EX-10.17 EXHIBIT 10.17 AMENDMENT NUMBER FIVE TO LOAN AND SECURITY AGREEMENT THIS AMENDMENT NUMBER FIVE TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as of December 23, 2002, is entered into 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: W I T N E S S E T H 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 as of October 3, 2001, by Amendment Number Two to Loan and Security Agreement dated as of November 13, 2001, by Amendment Number Three to Loan and Security Agreement dated as of February 13, 2002, and by Amendment Number Four to Loan and Security Agreement dated as of June 24, 2002 (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, Borrowers have requested that the Lender Group consent to the sale of certain assets of Hypercom GmbH, an organization organized under the laws of Germany, pursuant to that certain Asset Purchase Agreement, dated as of December 27, 2002, by and among Hypercom GmbH and Service Planet GmbH, previously provided to Agent (the "German Transaction"); WHEREAS, Borrowers have requested that the Lender Group consent to the sale of certain assets pursuant to that certain Asset Purchase Agreement, dated as of December 31, 2002, by and among Hypercom U.S.A., Inc., a Delaware corporation ("Hypercom U.S.A.") and MTXEFS, Incorporated, a California corporation, previously provided to Agent (the "MicroTrax Transaction"; the MicroTrax Transaction, together with the German Transaction, are referred to hereinafter collectively as the "Designated Transactions"); WHEREAS, Borrowers have requested that the Loan Agreement be amended as set forth herein; and WHEREAS, subject to the satisfaction of the conditions set forth herein, the Lender Group is willing to so consent to the amendment of the Loan Agreement and to the consummation of the Designated Transactions. 1 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the Loan Agreement as follows: 1. DEFINITIONS. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement, as amended hereby. 2. AMENDMENTS TO LOAN AGREEMENT. (a) Section 1.1 of the Loan Agreement is hereby amended by adding the following defined term in proper alphabetical order: "Fifth Amendment" means that certain Amendment Number Five to Loan and Security Agreement, dated as of December 23, 2002, among Lenders, Agent, Parent and Borrowers. "Fifth Amendment Effective Date" means the date, if ever, that all of the conditions set forth in Section 4 of the Fifth Amendment shall be satisfied (or waived by the Lenders in their sole discretion). "Hypercom Sweden" means Hypercom Financial Terminals AB (Sweden), an organization organized under the laws of Sweden. "Permitted Swedish Transaction Indebtedness" means Indebtedness incurred in respect of the Swedish Transaction. "Swedish Transaction" means that certain loan from Hypercom Sweden to Parent in a maximum aggregate amount outstanding at any one time not to exceed $1,500,000, which amount is due and payable on or before June 30, 2003, which will accrue interest at a per annum rate equal to 5.50%, and which on the terms set forth in that certain promissory note dated December 20, 2002, made by Hypercom Sweden in favor of Parent which was previously provided to Agent. (b) Section 1.1 of the Loan Agreement is hereby amended by amending the definition of "Permitted Investments" as follows: (i) deleting the word "and" before item (d) of such definition, and (ii) deleting the period at the end of item (d) and replacing it with the following language: ", (e) Investments consisting of the Hedging Obligations described in Section 7.1(k), and (f) Investments in respect of the Swedish Loan Transaction." (c) Section 1.1 of the Loan Agreement is hereby amended by amending the definition of "Permitted Liens" as follows: (i) deleting the word "and" before item (l) of such definition, and (ii) deleting the period at the end of item (l) and replacing it with the following language: ", and (m) the deposit of cash and cash equivalents, in an aggregate amount outstanding at any one time not to exceed $1,500,000, to secure the Hedging Obligations described in Section 7.1(k)." 2 (d) Section 2.11 of the Loan Agreement is hereby amended by inserting the following new clause (d) following clause (c): "(d) FIFTH AMENDMENT FEE. On or before the Fifth Amendment Effective Date, Borrower shall pay to Agent an amendment fee of $20,000 in immediately available funds, which fee shall be fully earned when paid." (e) Section 7.1 of the Loan Agreement is hereby amended as follows: (i) deleting the word "and" in item (h), (ii) deleting the period at the end of item (i) and replacing it with ";", and (iii) inserting the following items (j) and (k) following item (i): "(j) Permitted Swedish Loan Transaction Indebtedness; and (k) Hedging Obligations by Borrower in an aggregate amount outstanding at any one time not to exceed $5,000,000." (f) Section 7.20(a)(i) of the Loan Agreement is hereby amended and restated in its entirety as follows: "(i) "MINIMUM EBITDA. EBITDA of Parent, measured on the fiscal period set forth below, of not less than the required amount set forth in the following table for the applicable period set forth opposite thereto:
Applicable Amount Applicable Period ----------------- ----------------- $1,870,000 For the 3 month period ending June 30, 2001 $6,885,000 For the 3 month period ending September 30, 2001 $(556,000) For the one month period ending October 31, 2001 $3,524,000 For the two month period ending November 30, 2001 $13,940,000 For the 6 month period ending December 31, 2001 $17,765,000 For the 9 month period ending March 31, 2002 $22,610,000 For the 12 month period ending June 30, 2002 $24,310,000 For the 12 month period ending September 30, 2002
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Applicable Amount Applicable Period ----------------- ----------------- $22,850,000 For the 12 month period ending December 31, 2002 $27,115,000 For the 12 month period ending March 31, 2003 $28,390,000 For the 12 month period ending June 30, 2003 $29,835,000 For the 12 month period ending September 30, 2003 $31,365,000 For the 12 month period ending December 31, 2003"
3. OTHER AGREEMENTS; CONSENT. Subject to the satisfaction of each of the conditions listed in Section 4, the Lender Group hereby consents to the consummation of the Designated Transactions so long as (a) the Designated Transactions occur on or before January 15, 2002; and (b) 100% of the proceeds of each of the Designated Transactions are paid to Agent for application in accordance with the terms of the Loan Agreement. 4. CONDITIONS PRECEDENT TO THIS AMENDMENT. The satisfaction of each of the following shall constitute conditions precedent to the effectiveness of this Amendment and each and every provision hereof: (a) The representations and warranties in the Loan Agreement and the other Loan Documents shall be true and correct in all respects on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date); (b) Agent shall have received the reaffirmation and consent of each Guarantor, attached hereto as Exhibit A, duly executed and delivered by an authorized official of Guarantor; (c) No Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment; and 4 (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 Borrower, Guarantors, or the Lender Group. 5. CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF CALIFORNIA. 6. ENTIRE AMENDMENT; EFFECT OF AMENDMENT. This Amendment, and terms and provisions hereof, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes any and all prior or contemporaneous amendments relating to the subject matter hereof. Except for the amendments to the Loan Agreement expressly set forth in Section 2 hereof, the Loan Agreement and other Loan Documents shall remain unchanged and in full force and effect. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of any right, power, or remedy of the Lender Group as in effect prior to the date hereof. The agreements set forth 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. To the extent any terms or provisions of this Amendment conflict with those of the Loan Agreement or other Loan Documents, the terms and provisions of this Amendment shall control. This Amendment is a Loan Document. 7. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment. 8. MISCELLANEOUS. (a) Upon 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 shall mean and refer to the Loan Agreement as amended by this Amendment. (b) Upon the effectiveness of this Amendment, each reference in the Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or words of like 5 import referring to the Loan Agreement shall mean and refer to the Loan Agreement as amended by this Amendment. [Signature page follows.] 6 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of the date first written above. HYPERCOM CORPORATION, HYPERCOM EMEA, INC., a Delaware corporation fka Hypercom Europe Limited, Inc., an Arizona corporation By: /s/ C.S. Alexander By: /s/ C.S. Alexander _____________________________ _____________________________ Name: C.S. Alexander Name: C.S. Alexander ___________________________ ___________________________ Title: President and CEO Title: President __________________________ __________________________ HYPERCOM U.S.A., INC., HYPERCOM MANUFACTURING RESOURCES, INC., a Delaware corporation an Arizona corporation By: /s/ C.S. Alexander By: /s/ C.S. Alexander _____________________________ ______________________________ Name: C.S. Alexander Name: C.S. Alexander ___________________________ ____________________________ Title: President Title: Chairman __________________________ ___________________________ HYPERCOM HORIZON, INC., EPICNETZ, INC., a Missouri corporation a Nevada corporation By: /s/ C.S. Alexander By: /s/ C.S. Alexander _____________________________ _____________________________ Name: C.S. Alexander Name: C.S. Alexander ___________________________ ___________________________ Title: Chairman Title: President __________________________ __________________________ HYPERCOM LATINO AMERICA, INC., an Arizona corporation By: /s/ C.S. Alexander _____________________________ Name: C.S. Alexander ___________________________ Title: Chairman __________________________ FOOTHILL CAPITAL CORPORATION, a California corporation, as Agent and as a Lender By: /s/ John Nocita _____________________________ Name: John Nocita ___________________________ Title: Vice President __________________________ 1 EXHIBIT A REAFFIRMATION AND CONSENT All capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in that certain Loan and Security Agreement by and among the lenders identified on the signature pages thereof (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 thereof (such Subsidiaries are referred to hereinafter each individually as a "Borrower", and individually and collectively, jointly and severally, as the "Borrowers"), dated as of July 31, 2001, as amended by Amendment Number One to Loan and Security Agreement dated as of October 3, 2001, by Amendment Number Two to Loan and Security Agreement dated as of November 13, 2001, by Amendment Number Three to Loan and Security Agreement dated as of February 13, 2002, by Amendment Number Four to Loan and Security Agreement dated as of June 24, 2002, and by Amendment Number Five to Loan and Security Agreement dated as of December 23, 2002 (as the same may be further amended, restated, supplemented, or otherwise modified from time to time, the "Loan Agreement"), or in Amendment Number Five to Loan and Security Agreement dated as of December 23, 2002 (the "Amendment"), among Parent, the Borrowers and the Lender Group. The undersigned hereby (a) represent and warrant to the Lender Group that the execution, delivery, and performance of this Reaffirmation and Consent 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 charter or bylaws, 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) consents to the transactions contemplated by the Amendment and the execution and delivery thereof; (c) acknowledges and reaffirms its obligations owing to the Lender Group under the Guaranty and any other Loan Documents to which it is a party; and (d) agrees that each of the Loan Documents to which it is a party is and shall remain in full force and effect. Although the undersigned has been informed of the matters set forth herein and has acknowledged and agreed to same, it understands that the Lender Group has no obligations to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty. Delivery of an executed counterpart of this Reaffirmation and Consent by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Reaffirmation and Consent. Any party delivering an executed counterpart of this Reaffirmation and Consent by telefacsimile also shall deliver an original executed counterpart of this Reaffirmation and Consent but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed by the laws of the State of California. IN WITNESS WHEREOF, the undersigned have each caused this Reaffirmation and Consent to be executed as of the date of the Amendment. HYPERCOM CORPORATION, HYPERCOM FINANCIAL TERMINALS AB a Delaware corporation (SWEDEN), an organization organized under the laws of Sweden By: /s/ C.S. Alexander By: /s/ C.S. Alexander ______________________________ ______________________________ Name: C.S. Alexander Name: C.S. Alexander ____________________________ ____________________________ Title: President and CEO Title: Chair ___________________________ ___________________________ HYPERCOM DO BRASIL INDUSTRIA E COMERCIO LIMITADA (BRAZIL), an organization organized under the laws of Brazil By: Hypercom U.S.A., Inc., its shareholder By: /s/ C.S. Alexander ____________________________ Name: C.S. Alexander __________________________ Title: President __________________________ By: Hypercom Latino America, Inc., its shareholder By: /s/ C.S. Alexander ____________________________ Name: C.S. Alexander __________________________ Title: Chairman __________________________
