Exhibit 10.28
WAIVER AND AMENDMENT NO. 3
TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 3 ("Amendment") is entered into as of
November 12, 2002, by and among TransAct Technologies Incorporated, a Delaware
corporation having its principal place of business at 7 Laser Lane, Wallingford,
Connecticut 06492 ("Borrower"), LaSalle Business Credit, Inc. having its
principal place of business at 135 South LaSalle Street, Chicago, Illinois 60603
with an office located at 565 Fifth Avenue, New York, New York 10017
("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)
waive existing Events of Default with respect to the minimum consolidated
EBITDA, tangible net worth and fixed charge coverage financial covenants
contained in the Loan Agreement and (ii) exclude from the calculation of the
financial covenants the restructuring charges incurred by Borrower in connection
with the closing of Borrower's plant in Wallingford, Connecticut 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 5 below, the Loan Agreement is hereby amended as
follows: (a) Article 1 is hereby amended by adding the following defined terms
in their appropriate alphabetical order:
"Amendment No. 3" shall mean the Waiver and Amendment No. 3 to this
Agreement dated as of November 12, 2002.
"Amendment No. 3 Effective Date" shall mean the date on which all of the
conditions precedent contained in Section 5 of Amendment No. 3 shall have been
satisfied.
(b) the $900,000 restructuring charge accrued by Borrower during the
Fiscal Year ending December 31, 2002 in connection with the closing of
Borrower's plant in Wallingford, Connecticut shall be excluded when calculating
the financial covenants set forth in paragraphs 15(p)(i), 15(p)(ii) and
15(p)(iv) of the Loan Agreement.
3. Waiver. Subject to satisfaction of the conditions precedent set forth
in Section 5 below, Agent and Lenders hereby waive, solely with respect to the
fiscal quarter ending September 30, 2002, compliance by Borrower with (a) the
Tangible Net Worth covenant set forth in paragraph 15(p)(i) of the Loan
Agreement pursuant to which Borrower was required to maintain a Tangible Net
Worth of not less than $8,678,000 as of September 30, 2002, (b) the Fixed Charge
Coverage Ratio covenant set forth in paragraph 15(p)(ii) of the Loan Agreement
pursuant to which Borrower was required to maintain a Fixed Charge Coverage
Ratio of not less than 1.50 to 1.00 for the nine (9) months ended September 30,
2002 and (c) the Minimum Consolidated EBITDA financial covenant set forth in
paragraph 15(p)(iv) of the Loan Agreement pursuant to which Borrower was
required to maintain Minimum Consolidated EBITDA of not less than $1,765,000 for
the nine (9) months ended September 30, 2002.
4. Amendment and Waiver Fee. On the Amendment No. 3 Effective Date,
Borrower shall pay Agent for the benefit of Lenders an amendment and waiver fee
of $20,000 (the "Amendment and Waiver Fee"). The Amendment and Waiver Fee shall
be deemed fully earned on the Amendment No. 3 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 and Waiver Fee on the Amendment No. 3 Effective Date.
5. Conditions of Effectiveness. This Amendment shall become effective
November 12, 2002, 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 TransAct.com,
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.
6. 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.
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(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.
7. 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, except as expressly provided in Section 3, 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.
8. 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.
9. 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.
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10. 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.
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/ Richard L. Cote
-------------------------------------------
Name: Richard L. Cote
Title: Executive Vice President and CFO
LASALLE BUSINESS CREDIT, INC., as Agent and
Lender
By: /s/ Michael A. Kurshuk
--------------------------------------------
Name: Michael A. Kurshuk
Title: Vice President
CONSENTED AND AGREED TO:
TRANSACT. COM, INC., as a Guarantor
By: /s/ Bart C. Shuldman
-------------------------
Name: Bart C. Shuldman
Title: President
TRANSACT TECHNOLOGIES LIMITED, as a Guarantor
By: /s/ Bart C. Shuldman
-------------------------
Name: Bart C. Shuldman
Title: Director
TRANSACT TECHNOLOGIES INTERNATIONAL LTD., as a Guarantor
By: /s/ Richard L. Cote
-------------------------
Name: Richard L. Cote
Title: President
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