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EXHIBIT 10.3.4.c
SECOND FURTHER CONSENT AND AGREEMENT
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SECOND FURTHER CONSENT AND AGREEMENT (this "Consent"), dated
as of March 26, 1999, given under the Business Purpose Revolving Promissory Note
("Swing Line"), dated August 4, 1998 (the "Note"), by Telxon Corporation (the
"Borrower") in favor of Bank One, NA ("Bank One").
RECITALS
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1. Capitalized terms used herein which are not otherwise defined herein shall
have the respective meanings ascribed thereto in the Note.
2. 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.
3. The outstanding balance on the Note as of December 29, 1998 was $3,990,000.
4. 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 even date with the Original Consent (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 supplemented or
otherwise modified from time to time, the "Credit Agreement").
5. 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 the Bank
has consented to the Waiver Extension and Agreement dated as of even date with
the Further Consent (the "Further Amendment"), under the Credit Agreement.
6. 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 and Further Amendment, such
further waiver being substantially in the form of the Second Waiver Extension
Agreement and Amendment No. 4 attached as Exhibit A hereto (the "Second Waiver
and Extension"), and accordingly, has requested that Bank One consent to the
Second Waiver and Extension.
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7. 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 Second Waiver and Extension 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 Second Waiver and Extension, provided
that this Consent shall not become effective unless and until the Borrower
shall have provided Bank One with written certification that the Borrower's
Eligible Accounts Receivable and Eligible Inventory (as such terms are
defined in the Credit Agreement) as of February 28, 1999, are sufficient
under the formula set forth in Section 2(i) of the Amendment, as modified
by the Further Amendment and the Second Waiver and Extension, to support
the Borrower's currently outstanding borrowings under the Credit Agreement.
Subject to Bank One's receipt of the foregoing certification, this Consent
will be effective for the Extended Waiver Period (as defined in and
determined in accordance with the Second Waiver and Extension). Bank One
further agrees that the effectiveness of the Original Consent and the
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. As consideration for Bank One's consent to waiver of defaults under
the Note, Borrower agrees as follows:
(a) Upon the occurrence of the Effective Date of the Second
Waiver and Extension, Borrower agrees to pay a consent fee to Bank One
equal to 50 basis points of the outstanding principal balances of the
Note and the Bank One Letter of Credit, which fee shall be payable (x)
on the Effective Date of the Second Waiver and Extension in an amount
equal to 35 basis points of the outstanding principal balances of the
Note and the Bank One Letter of Credit, as of the Effective Date and
(y) on June 1, 1999 in an amount equal to 15 basis points of the
outstanding principal balances of the Note and the Bank One Letter of
Credit, as of June 1, 1999, if Borrower has not delivered to the Agent
or Bank One, on or before such date, a binding written commitment
letter for the refinancing of the Swing Line, on terms reasonably
acceptable to Bank One, PROVIDED, that should such commitment letter
be terminated, the balance of the consent fee shall be payable at the
time of such termination.
(b) From and after December 29, 1998, any indebtedness
outstanding under the Note shall bear interest on the unpaid balance
thereof at a rate per annum equal to 200 basis points plus Bank One's
Prime Rate (which may vary from time to
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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.
(c) The Borrower shall within thirty (30) days execute an Amended
and Restated Security Agreement, Patent and Trademark Security
Agreement and Deed of Trust in favor of Bank One in forms acceptable
to Bank One as well as UCC Financing Statements which may be required
to be filed in any public office in order to perfect Bank One's
interest in the Collateral to secure repayment of the Borrower's
obligations under the Swing Line, including the Note and Bank One
Letter of Credit; in each case, however, subject to the Intercreditor
Agreement
3. 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 and the
Second Waiver and Extension) 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 the 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. The Borrower shall enter into an Amended and
Restated Security Agreement, Patent and Trademark Security Agreement and Deed of
Trust with Bank One (the "Bank One Collateral Documents") pursuant to which the
Borrower shall grant to Bank One a security interest in the Collateral (as
defined in the Credit Agreement) in order to secure all of the Borrower's
obligations to Bank One in respect of the Note and Bank One Letter of Credit
(the "Bank One Obligations"). Notwithstanding the date, manner, or order of
attachment or perfection, the description of any collateral or security
interests, liens, claims or encumbrances covered or granted by the Loan
Documents (as defined in the Credit Agreement ) or the Bank One Collateral
Documents, or any provision of the Uniform Commercial Code or other applicable
law as in effect in any State, Bank One hereby agrees that its rights under the
Bank One Collateral Documents are and shall be subordinate, to the extent and in
the manner set forth in the Intercreditor Agreement, to all rights of the Agent
under the Loan Documents, and that the Agent shall have at all times a Lien
prior and superior to that of Bank One in all Collateral securing the
Obligations under the Credit Agreement until the indefeasible payment in full,
in cash, of all Obligations under the Credit Agreement. Bank One hereby
reaffirms and admits to the validity and enforceability of the Intercreditor
Agreement.
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4. CONSENT LIMITED. In all other respects, the Note and Bank One Letter of
Credit shall remain in full force and effect.
5. 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.
6. RELEASE. The Borrower releases Bank One, BANK ONE CORPORATION and each
of their respective directors, officers, employees, attorneys, agents, advisors,
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 Note or Bank One Letter of Credit, and/or any
actions taken or omitted to be taken by Bank One with respect thereto on or
prior to the Effective 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 with respect thereto (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.
7. 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
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OF THE STATE OF OHIO, WITHOUT REGARD TO PRINCIPLES FOR 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
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Name: XXXXXX X. XXXXXX
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Title: VICE PRESIDENT
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TELXON CORPORATION
By: /s/ XXXXXX X. XXXXXXX
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Name: XXXXXX X. XXXXXXX
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Title: SENIOR VICE PRESIDENT
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