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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Date of Report: December 28, 2000
Commission file number: 1-13521
HYPERCOM CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 86-0828608
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2851 West Kathleen Road
Phoenix, Arizona 85053
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(Address of principal executive offices) (Zip Code)
(602) 504-5000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On December 22, 2000, Hypercom Corporation (the "Company") entered into a
Forbearance and Modification Agreement (the "Agreement") with it principal
lenders under its revolving credit agreement, with an effective date of November
14, 2000. The Agreement provides that its lenders will refrain from exercising
their rights and remedies with respect to "Identified Defaults" through December
31, 2000, or, if extended pursuant to the terms of the Forbearance Agreement,
through January 31, 2001. The forbearance is being provided by the lenders to
allow the Company to secure replacement financing. The unpaid principal balance
on this credit facility as of the date of this report amounted to
$48,956,971.24.
The Agreement includes, among other things:
- An increase in interest rates. Through December 31, 2000, the non-default
interest rate is the prime rate plus 2%, and the default rate is the prime
rate plus 5%. As of January 1, 2001, the non-default interest rate is the
prime rate plus 3% and the default rate is the prime rate plus 6%.
- No new advances will be made under the revolving line of credit.
- There is a limitation on capital expenditures through the end of the
forbearance period.
- The Company has been required to provide additional collateral to the
lenders.
- The Company is required to maintain minimum accounts receivable and
inventory levels.
- The Company is required to pursue the sale of certain of its assets and to
seek separate financing on certain of its foreign assets.
- The Company is required to obtain from its principal shareholder and
Chairman of the Board, George Wallner, a cash infusion of at least $1.5
million. Mr. Wallner invested $1.5 million on December 27, 2000, and the
Company issued him a subordinated note due February 1, 2001.
- The Company is required to reimburse certain of the lending groups' costs
and expenses.
- Restrictions have been placed on the Company's ability to use funds for its
Golden Eagle Leasing subsidiary.
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A complete copy of the Forbearance and Modification Agreement is filed herewith
as Exhibit 10-A.
The Company also reported that lenders to its Golden Eagle Leasing subsidiary,
Webster Bank and Tokyo Leasing, have suspended funding further lease
receivables, pending the Company securing a new principal financing facility.
The Company is in the process of seeking to refinance its current lending
arrangements. If the Company is unable to refinance its credit agreements, it
will need to obtain additional waivers from its current lending group. There can
be no assurance that the Company will obtain alternative financing or, that if
it does not, additional waivers will be granted by its current lenders. In such
event, the Company's ability to continue to operate in the ordinary course would
be materially adversely affected.
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Exhibit Number Description
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10-A Forbearance and Modification Agreement, dated
December 22, 2000
10-B Subordinated Promissory Note, dated
December 27, 2000
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HYPERCOM CORPORATION
Date: December 28, 2000 /s/ Jonathon E. Killmer
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Jonathon E. Killmer
Chief Operating Officer and
Chief Financial Officer
