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EXHIBIT 10.3.2.a
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THIRD FURTHER CONSENT AND NOTE MODIFICATION AGREEMENT
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This THIRD FURTHER CONSENT AND NOTE MODIFICATION AGREEMENT (this "Consent"),
dated as of June 29, 1999, ("Agreement Date") is given under the Business
Purpose Revolving Promissory Note, dated August 4, 1998 (the "Note"), by Telxon
Corporation (the "Borrower") in favor of Bank One, NA ("Bank One").
RECITALS
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A. Capitalized terms used herein which are not otherwise defined herein shall
have the respective meanings ascribed thereto in the Note.
B. Pursuant to Amendment No. 1 to the Credit Agreement which Amendment was dated
as of August 6, 1996 by and between the Borrower, the lenders thereto and The
Bank of New York, as Issuer, Swing Line Lender and Agent (the "Agent") and the
Intercreditor Agreement dated as of August 6, 1996, by and between Bank One and
the Agent, as acknowledged by the Borrower (the "Intercreditor Agreement"),
Bank One extended to Borrower a certain Twenty Million Dollar ($20,000,000.00)
revolving line of credit (the "Swing Line") which is evidenced by the Note and a
Standby Letter of Credit No. 047769 dated April 25, 1996 in the amount of
$75,608.33 ("Bank One Letter of Credit"). The Borrower granted Bank One a
security interest in certain collateral pursuant to the Bank One Security
Agreement dated as of August 6, 1996 ("Original Security Agreement").
C. The Borrower and Bank One are parties to a Consent, dated as of December 29,
1998 (the "Original Consent") pursuant to which Bank One has consented to the
Waiver and Agreement, dated as of December 29, 1996 (the "Amendment"), under the
Credit Agreement dated as of March 8, 1996, by and among the Borrower, the
lenders party thereto, and the Agent (as amended from time to time, the "Credit
Agreement").
D. The Borrower and Bank One are also parties to that certain Further Consent
dated as of February 12, 1999 (the "Further Consent") pursuant to which Bank One
has consented to the Waiver Extension Agreement dated as of even date with the
Further Consent (the "Further Amendment"), under the Credit Agreement.
E. The Borrower and Bank One are also parties to that certain Second Further
Consent executed on or about March 26, 1999 (the "Second Further Consent")
pursuant to which Bank One has consented to the Second Waiver Extension
Agreement and Amendment No. 4 dated as of March 26, 1999 (the "Second Further
Amendment") under the Credit Agreement. The Borrower granted Bank One a security
interest in additional collateral pursuant to the Amended and Restated Security
Agreement, Patent and Trademark Security Agreement and Deed of Trust dated as of
March 26, 1999. (These documents, together with the Original Security Agreement,
are referred to as the "Bank One Collateral Documents".)
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F. The outstanding balance on the Note as of the Agreement Date was $3,990,000.
The maturity date is August 3, 1999 (the "Maturity Date").
G. The outstanding balance of the commitment under the Bank One Letter of Credit
as of the Agreement Date was $75,608.
H. The Borrower has requested that the parties to the Credit Agreement grant a
further waiver to the Borrower under the Credit Agreement, including an
extension of the waiver granted under the Amendment, Further Amendment and
Second Further Amendment such further waiver being substantially in the form of
the Third Waiver Extension Agreement and Amendment No. 5 attached as Exhibit A
hereto (the "Third Waiver"), and accordingly, has requested that Bank One
consent to the Third Waiver and to extend the Maturity Date of the Note.
I. Certain defaults have occurred or may occur under the Credit Agreement and
the Note, which defaults are being waived in the manner, and for the period,
provided in the Third Waiver and hereunder.
Accordingly, in consideration of the Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Borrower and Bank One do hereby agree as follows:
1. BANK ONE'S CONSENT. Bank One does hereby consent to the
execution and delivery by the Borrower of the Third Waiver. This
Consent will be effective for the Extended Waiver Period (as defined in
and determined in accordance with the Third Waiver). Bank One further
agrees that the effectiveness of the Original Consent, the Further
Consent and the Second Further Consent shall not expire as of the time
provided therein but shall be extended and remain in effect for and
until the end of the Extended Waiver Period.
2. EXTENSION OF THE MATURITY DATE. The Note is hereby amended
to extend the Maturity Date to August 30, 1999. Except as modified by
this Agreement, all other terms and conditions of the Note remain
unchanged and in full force and effect.
3. AGREEMENTS BY THE BORROWER. As consideration for Bank One's
consent to waiver of defaults under the Note and the extension of the
Maturity Date, Borrower agrees as follows:
a) upon the occurrence of the effective date of
the Third Waiver, Borrower agrees to pay a
consent fee to Bank One equal to one percent
(1.00%) of the outstanding balance (or to
the extent that Bank One Letter of Credit
has not been drawn upon, the outstanding
commitment thereunder) on the Note and Bank
One Letter of Credit (the "Bank One
Indebtedness") as follows: (i) on the
effective date of the Third Waiver, in an
amount equal to .35% of the Bank One
Indebtedness (as of the effective date of
the Third
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Waiver), (ii) on July 31, 1999 in an amount
equal to .15% of the Bank One Indebtedness
(as of such date) if the Borrower shall not
have delivered to Bank One, on or before
such date, a binding written commitment
letter for an equity investment in, or
subordinated financing of, the Borrower
which would refinance the Bank One
Indebtedness on terms reasonably acceptable
to Bank One, provided that, should such
commitment letter be terminated, such
portion of the consent fee shall be payable
at the time of such termination and (iii) on
August 30, 1999 in an amount equal to .50%
of the Bank One Indebtedness (as of such
date) if the Borrower has not refinanced on
or before such date in whole the obligations
under the Bank One Indebtedness, on terms
reasonably acceptable to Bank One.
b) from and after the Agreement Date, any
indebtedness outstanding under the Note
shall bear interest on the unpaid balance
thereof at a rate per annum equal to four
percent (4.00%) plus Bank One's Prime Rate
(which may vary from time to time). Interest
shall be calculated on the basis of a
360-day year for actual days elapsed. Any
change in the interest rate due to a change
in Bank One's Prime rate shall take effect
without notice to the Borrower on the date
the change in Bank One's Prime Rate occurs.
Bank One's Prime Rate is the rate announced
by Bank One as its Prime Rate and is not
necessarily the lowest rate charged by Bank
One.
4. AFFIRMATION; ACKNOWLEDGEMENTS. The Borrower hereby (i)
reaffirms and admits the validity and (subject to the terms of the
Credit Agreement as referenced in and made a part of the terms of the
Note, as such Credit Agreement terms are waived or modified by the
Amendment, the Further Amendment, the Second Further Amendment and
Third Waiver) enforceability of the Note and Bank One Letter of Credit
and all of its obligations thereunder as of the date hereof, (ii)
acknowledges that Bank One is in compliance with all of its obligations
under the Note and Bank One Letter of Credit as of the date hereof and,
(iii) acknowledges that no further draws can be made by the Borrower
under the Note without the consent of Bank One.
5. CONSENT LIMITED. In all other respects, the Note and Bank
One Letter of Credit shall remain in full force and effect.
6. COUNTERPARTS. This Consent may be executed in any number of
counterparts all of which, taken together shall constitute one Consent.
In making proof of this Consent, it shall only be necessary to produce
the counterpart executed and delivered by the party to be charged.
7. RELEASE. The Borrower releases Bank One, BANK ONE
CORPORATION and each of their respective directors, officers,
employees, attorneys, agents, advisors,
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attorneys-in-fact, experts and Affiliates, from and against any and all
penalties, fines, expenses, losses, settlements, costs, claims, causes
of action, debts, dues, sums of money, accounts, accountings,
reckonings, acts, omissions, demands, liabilities, obligations,
damages, actions, judgments, suits, proceedings or disbursements of any
kind or nature whatsoever, known or unknown, contingent or otherwise
which may be imposed on, incurred by or asserted against any of them in
any way relating to or arising out of or with respect to this
Agreement, the Bank One Indebtedness or the collateral as identified in
the Bank One Collateral Documents, and/or any actions taken or omitted
to be taken by Bank One with respect thereto, on or prior to the
Agreement Date (except to the extent that any of the foregoing arises
solely from the gross negligence or willful misconduct of the party
which would be so released as determined by a final order or judgment
of a court of competent jurisdiction), and the Borrower hereby agrees
to hold Bank One, BANK ONE CORPORATION and their respective directors,
officers, employees, attorneys, agents, advisors, attorneys-in-fact,
experts and Affiliates harmless from and against any and all penalties,
fines, expenses, losses, settlements, costs, claims, causes of action,
debts, dues, sums of money, accounts, accountings, reckonings, acts,
omissions, demands, liabilities, obligations, damages, actions,
judgments, suits, proceedings or disbursements of any kind or nature
whatsoever, known or unknown, contingent or otherwise which may be
imposed on, incurred by or asserted against any of them (except to the
extent that any of the foregoing arises solely from the gross
negligence or willful misconduct of the party which would be so
released as determined by a final order or judgment of a court of
competent jurisdiction). The agreements of the Borrower contained in
this Section shall survive the payment in full in cash, the expiration
or cancellation of the Bank One Letter of Credit, the expiration or
termination of the Swing Line and the repayment of the Note.
8. GOVERNING LAW. THIS CONSENT IS BEING EXECUTED AND DELIVERED
IN, AND IS INTENDED TO BE PERFORMED IN, THE STATE OF OHIO AND SHALL BE
CONSTRUED AND ENFORCEABLE IN ACCORDANCE WITH, AND BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
IN WITNESS WHEREOF, each of the undersigned have caused this Consent to be
executed on its behalf as of the date first above written.
BANK ONE, NA
By: /s/ Xxxxxx X. Xxxxxx, V.P.
Name: Xxxxxx X. Xxxxxx
Title: Vice President
TELXON CORPORATION
By: /s/ Xxxxx X. XxXxx
Name: Xxxxx X. XxXxx
Title: Vice President, Chief Financial Officer
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