Document:

Exhibit 10.28

 

SIXTH AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

This Sixth Amendment to Loan and Security Agreement is entered into as of May 15, 2014 (the “Amendment”), by and between AVIDBANK CORPORATE FINANCE, a division of AVIDBANK (“Bank”), and USA TECHNOLOGIES, INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of June 21, 2012 and that certain First Amendment to Loan and Security Agreement dated as of January 1, 2013, that certain Second Amendment to Loan & Security Agreement dated as of April 2, 2013, that certain Third Amendment to Loan and Security Agreement dated as of April 11, 2013, that certain Fourth Amendment to Loan and Security Agreement dated as of April 29, 2013 and that certain Fifth Amendment to Loan and Security Agreement dated as of September 26, 2013 (collectively, the “Agreement”).  Borrower desires to enter into one or more equipment financing arrangements in the aggregate principal amount of up to $8,000,000, whereby Borrower shall sell certain point of sale equipment (the “Equipment”) and subsequently leaseback such equipment (collectively, the “Sale/Leaseback Transactions”).  Bank has agreed to consent to the Sale/Leaseback Transactions and amend the Agreement, in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.           Notwithstanding the prohibition set forth in Section 7.1 of the Loan Agreement, Bank hereby consents to the sale and disposition of the Equipment in connection with the Sale/Leaseback Transactions; provided that Borrower provides Bank with the following, in form and substance satisfactory to Bank, in connection with the closing of each Sale/Leaseback Transaction: (i) evidence of Borrower’s receipt of in up-front cash proceeds from the disposition of such Equipment (with a cumulative amount for all Sale/Leaseback Transactions of up to $8,000,000), (ii) promptly (and in any event within two Business Days of entering into such documents), fully executed copies of the definitive documents entered into in connection with the Sale/Leaseback Transactions; and (iii) the drafts of any UCC financing statement that the buyer and lessor of the Equipment contemplates filing prior to such filing taking place (the “UCC-1”).

 

2.            Borrower’s Indebtedness obligations under the lease agreements being entered into with the purchaser of the Equipment (the “Lessor”) as part of the Sale/Leaseback Transactions, on the terms previously disclosed to Bank, are hereby deemed “Permitted Indebtedness” under the Agreement; and any Lien filed against the Equipment by the Lessor as set forth in the UCC-1 constitutes a “Permitted Lien” under the Agreement.

 

3.           Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement.  The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects.  Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.  Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

 

4.           Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

 

5.           This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof.  Notwithstanding the foregoing, Borrower shall deliver all original signed documents no later than ten (10) Business Days following the date of execution.

 

    	  

    	 

    
 

 

6.           As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

 

   (a)           this Amendment, duly executed by Borrower;

 

   (b)           final drafts of the definitive documents to be entered into in connection with the Sale/Leaseback Transaction; and

 

   (c)           an amendment fee equal to $1,000.

 

7.           Borrower shall promptly pay all Bank Expenses incurred by Bank in connection with the preparation, negotiation, and execution of this Amendment.

 

[signature page follows]

 

    	  

    	 

    
 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

	 	 	 
	 	USA TECHNOLOGIES, INC.
	 	 	 
	 	By:	/s/ David M. DeMedio
	 	 	 
	 	Title:  	Chief Financial Officer
	 	 	 
	 	 	 
	 	AVIDBANK CORPORATE FINANCE,
	 	a division of AVIDBANK
	 	 	 
	 	By:	/s/ Jeffrey Javier
	 	 	 
	 	Title:  	Senior Vice PresidentExhibit 10.29

 

SEVENTH AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

This Seventh Amendment to Loan and Security Agreement is entered into as of June 17, 2014 (the “Amendment”), by and between AVIDBANK CORPORATE FINANCE, a division of AVIDBANK (“Bank”), and USA TECHNOLOGIES, INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of June 21, 2012 and that certain First Amendment to Loan and Security Agreement dated as of January 1, 2013, that certain Second Amendment to Loan & Security Agreement dated as of April 2, 2013, that certain Third Amendment to Loan and Security Agreement dated as of April 11, 2013, that certain Fourth Amendment to Loan and Security Agreement dated as of April 29, 2013, that certain Fifth Amendment to Loan and Security Agreement dated as of September 26, 2013 and that certain Sixth Amendment to Loan and Security Agreement dated as of May 15, 2014 (collectively, the “Agreement”).  Borrower and Bank desire to amend the Agreement in accordance with the terms set forth herein.

 

NOW, THEREFORE, the parties agree as follows:

 

1.           The following definitions in Section 1.1 of the Agreement are amended in their entirety to read as follows:

 

“Adjusted EBITDA” means net income (loss) before interest income, interest expense, income taxes, depreciation, amortization, rent/lease expense pursuant to Sale/Leaseback Transactions, and change in fair value of warrant liabilities and stock-based compensation expense.

 

“Revolving Line” means a Credit Extension of up to Seven Million Dollars ($7,000,000).

 

“Revolving Maturity Date” means June 21, 2015.

 

2.           Section 6.10 of the Agreement is amended in its entirety to read as follows:

 

 6.10           Adjusted EBITDA.  Borrower shall achieve a minimum Adjusted EBITDA, measured on a quarterly basis, in the following amounts:

 

	
Fiscal Quarter

	
Minimum Adjusted

EBITDA

	
Fiscal quarter ending June 30, 2014:

	
$2,200,000

	
Fiscal quarter ending September 30, 2014:

	
$1,600,000

	
Fiscal quarter ending December 31, 2014:

	
$1,800,000

	
Fiscal quarter ending March 31, 2015:

	
$2,100,000

	
Fiscal quarter ending June 30, 2015:

	
$2,600,000

Borrower shall achieve a minimum Adjusted EBITDA for the remaining fiscal quarters in 2015 and beyond in such amounts as may be mutually agreed upon by Borrower and Bank with reference to Borrower’s annual operating projections for such year(s) delivered to Bank in accordance with Section 6.3(f).

3.           Exhibits B, C and D to the Agreement are replaced in their entirety with Exhibits B, C and D attached hereto.

 

4.           Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement.  The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects.  Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.  Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

 

    	  

    	 

    
 

 

5.           Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

 

6.           This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof.  Notwithstanding the foregoing, Borrower shall deliver all original signed documents no later than ten (10) Business Days following the date of execution.

 

7.           As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

 

(a)           this Amendment, duly executed by Borrower;

 

(b)           affirmation of guarantees; and

 

(c)           payment of an amendment and renewal fee equal to $35,000, plus payment of all Bank Expenses incurred by Bank through the date hereof.

 

[signature page follows]

 

    	  

    	 

    
 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

	  	  	  	  
	  	
USA TECHNOLOGIES, INC.

	 	 
	  	
By:

	  	/s/ David M. DeMedio
	 	 	 
	  	
Title:

	Chief Financial
Officer
	  	  	  	  
	  	
AVIDBANK CORPORATE FINANCE,

	  	
a division of AVIDBANK

	  	  	  	  
	  	
By:

	  	/s/ Linh Phan
	  	  	  	  
	  	
Title:

	VP
Relationship Manager

 

    	  

    	 

    
 

 

Exhibit B

Date:

ADVANCE/PAYDOWN FORM

	 	 	 	 	 	 	
 

	 	 	 	 	 	 	 
	Borrower:	
  USA Technologies, Inc.

	 	 	Lender: 	 	
   Avidbank Corporate Finance

	 	 	 
	 	 	 	 	 	 	
A Division of Avidbank                   

	 	 
	
Commitment Amount:

	
  $7,000,000.00

	 	 	 	 	 	 	 	 	 	 
	  	  	  	  	  	  	  Tran Code	  	  	  	  	  	  	  
	  	  	
ADVANCE

	  	  	  	  	  	  	  	  	  	  
	  	
1

	
Client’s Outstanding Balance on HORIZON

	  	  	  	  	  	  	  
	  	
2

	
Loan number

	  	  	
55

	  	  	  	  	  
	  	
3

	
Credit to DDA #

	  	  	
30

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	
Client’s New Outstanding Balance

	  	  	  	  	
$0.00  

	  	  
	  	  	  	  	  	  	  	 	 	  	  	  
	  	  	
PAYDOWN

	  	  	  	  	  	  	  	  	  	  
	  	
4

	
Client’s Outstanding Balance on HORIZON

	  	  	  	  	  	  	  
	  	
5

	
Debit DDA #

	  	  	
60

	  	  	  	  	  
	  	
6

	
Apply to Loan number

	  	  	
20

	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  
	  	  	
Client’s New Outstanding Balance

	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  
	  	  	
Borrowing Base Update

	  	  	  	  	  	  	  
	  	
7

	
Total Borrowing Capacity

	  	  	  	  	  	  
	  	
8

	
Less: Present Balance owing on Line of Credit

	  	  	  	  	  	  
	  	
9

	
Less: Issued Letters of Credit

	  	  	  	
$0.00  

	  	  
	  	
10

	
Remaining Availability (# 7 minus # 8 & # 9)

	  	  	  	
$0.00  

	  	  

 

	
The undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Loan and Security Agreement between the undersigned and Avidbank Corporate Banking, a Division of Avidbank.

 

	
Requested by:  

	 	  	  	  	  	  	  	  	  	  	  
	  	  	
Authorized Signer

	  	  	  	  	  	  	  	  
	  	
Title:

	 	  	  	  	  	  	  	  	  	  	  	  
	  	  	
Title of Authorized Signer

	  	  	  	  	  	  	  	  

 

	  	  	  	  	  	  	  	  	  	  	  	  
	
BANK SECTION 

	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  
	  	
Reviewed by:

	  	  	  	  	
Approved by:

	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  
	  	
Posted by:

	  	  	  	  	
Call back:

	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  	  

 

    	  

    	 

    
 

EXHIBIT C

BORROWING BASE CERTIFICATE

 

	
Borrower:  USA TECHNOLOGIES, INC.                                                                                                    Lender:  Avidbank Corporate Finance,

                         a division of Avidbank

Commitment Amount:  $7,000,000

	  	  	  
	
REVENUES FROM NON-INVOICED ACCOUNTS RECEIVABLES

	  	  
	
1.           Prior three-months networking service fees/transaction processing revenues

	  	
$___________

	
2.           Adjustments to Revenues, if any

	  	
$___________

	
3.           Total Processing Revenues (#1 minus #2)

	  	
$___________

	
4.           Loan Value of Processing Revenues (80% of #3)

	  	
$___________

	
 

BALANCES

	  	  
	
5.           Maximum Loan Amount

	  	
$7,000,000

	
6.           Total Funds Available [Lesser of #4 or (#5)]

	  	
$___________

	
7.           Present balance owing on Revolving Line

	  	
$___________

	
8.           AVAILABLE BORROWING / RESERVE POSITION (#6 minus #7)

	  	
$___________

	  	  	  

The undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Loan and Security Agreement between the undersigned and Avidbank Corporate Finance, a division of Avidbank.

 

	USA TECHNOLOGIES, INC.	  	  
	 	  	  	  
	
By:

	
 

	  	  
	 	
Authorized Signer

	  	  

 

    	  

    	 

    
 

 

EXHIBIT D

COMPLIANCE CERTIFICATE

 

	
TO:

	
AVIDBANK CORPORATE FINANCE, A DIVISION OF AVIDBANK

 

	
FROM:

	
USA TECHNOLOGIES, INC.

 

The undersigned authorized officer of USA TECHNOLOGIES, INC. hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct as of the date hereof.  Attached herewith are the required documents supporting the above certification.  The officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

	
Reporting Covenant

	
Required

	
Complies

	  	  	  	  
	
Schedule of Revenue Proceeds

	
Weekly

	
Yes

	
No

	
Transaction Report of Cash Disbursements &  Collections

	
Weekly

	
Yes

	
No

	
A/R & A/P Agings

	
Monthly within 20 days

	
Yes

	
No

	
Borrowing Base Certificate and Compliance Certificate

	
Monthly within 20 days

	  	  
	
Monthly statements from JPMorgan Chase

	
Monthly within 5 days of receipt

	
Yes

	
No

	
Monthly financial statements

	
Monthly within 20 days

	
Yes

	
No

	
Annual financial statements (CPA Audited)

	
FYE within 120 days

	
Yes

	
No

	
Annual Projections

	
within 30 days of Fiscal Year beginning

	
Yes

	
No

	
10K and 10Q

	
(as applicable)

	
Yes

	
No

	
A/R Audit

	
Semi-Annual

	
Yes

	
No

	
IP Notices

	
As required under Section 6.11

	
Yes

	
No

	  	  	  	  
	
Financial Covenant

	
Required

	
Actual

	
Complies

	  	  	  	  	  
	
RML for month ended _______________

	  	
$__________

	
Yes

	
No

	 	 	 	 	 
	
When RML is negative, Minimum Liquidity of at least:

	
6 months RML

	
$__________

	
Yes

	
No

	 	 	 	 	 
	
When RML is positive, ratio of Current Assets to Current Liabilities of at least:

	
1.00 to 1.00

	
________ : 1.00

	
Yes

	
No

	 	 	 	 	 
	
Minimum Adjusted EBITDA for quarters ending:

	  	  	  	  
	
June 30, 2014:

	
$2,200,000

	
$__________

	
Yes

	
No

	
September 30, 2014:

	
$1,600,000

	
$__________

	
Yes

	
No

	
December 31, 2014:

	
$1,800,000

	
$__________

	
Yes

	
No

	
March 31, 2015:

	
$2,100,000

	
$__________

	
Yes

	
No

	
June 30, 2015:

	
$2,600,000

	
$__________

	
Yes

	
No

 

	
Comments Regarding Exceptions:  See  Attached.

	
  BANK USE ONLY

	 	 	 
	  	  	  	 
	  	  	
Received by:

	 	 	 	 	 
	
Sincerely,

	  	
AUTHORIZED SIGNER

	 
	  	  	  	 
	  	  	
Date: 

	 	 	 	 	
 

	 
	  	  	  	 
	  	  	
Verified:

	 	 	 	 
	
SIGNATURE

	  	
AUTHORIZED SIGNER

	 
	  	  	  	 
	  	  	  	 
	  	  	
Date: 

	 	 	 	 	 	 
	
TITLE

	  	  	 
	  	  	
Compliance Status

	
Yes         

	
No 

	 
	  	  	  	 
	
DATE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00235-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00235-of-00352.parquet"}]]