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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): December 16, 1996
TELXON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-11402 74-1666060
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
3330 WEST MARKET STREET, AKRON, OHIO 44333
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (330) 664-1000
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ITEM 5. OTHER EVENTS.
As of December 16, 1996, certain terms of the $100 million
revolving credit facility maintained by Telxon Corporation (the "Company"
or the "Registrant") with The Bank of New York, as Agent for an eight-bank
lending group, were amended as set forth in the agreement attached as Exhibit
10.3.2.c to this Current Report, which is by this reference incorporated
herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
10.3.2.c Amendment No. 2, dated as of December 16, 1996, to the Credit
Agreement between the Registrant, the lenders party thereto
from time to time and The Bank of New York, as letter of
credit issuer, swing line lender and agent for the lenders,
dated as of March 8, 1996, filed herewith.
SIGNATURES
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.
TELXON CORPORATION
DATE: January 15, 1997 By: /s/ Glenn S. Hansen
-------------------
Glenn S. Hansen
Vice President, Legal Administration
and Corporate Counsel
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INDEX TO EXHIBITS
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Telxon Corporation
Current Report on Form 8-K
(Earliest Event Reported: December 16, 1996)
10.3.2.c Amendment No. 2, dated as of December 16, 1996, to the Credit
Agreement between the Registrant, the lenders party thereto
from time to time and The Bank of New York, as letter of credit
issuer, swing line lender and agent for the lenders, dated as
of March 8, 1996, filed herewith.
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Exhibit 10.3.2.c
AMENDMENT NO. 2
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AMENDMENT NO. 2 (this "AMENDMENT"), dated as of December 16, 1996, to
the Credit Agreement, dated as of March 8, 1996, by and among Telxon Corporation
(the "BORROWER"), the Lenders party thereto, and The Bank of New York, as
Issuer, Swing Line Lender and Agent (as amended, the "AGREEMENT").
RECITALS
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I. Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Agreement.
II. The Borrower has requested that the Agent, the Issuer and the Swing
Line Lender agree to amend the Agreement upon the terms and conditions contained
herein, and the Agent, the Issuer and the Swing Line Lender are willing so to
agree.
Accordingly, in consideration of the Recitals and the covenants and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Borrower, the
Agent, the Issuer and the Swing Line Lender hereby agree as follows:
1. The defined term "Borrowing Base Amount" contained in Section 1.1 of
the Agreement is amended and restated in its entirety as follows:
"BORROWING BASE AMOUNT": as of any date, the sum of (i) 70% of
an amount equal to Eligible Accounts Receivable MINUS $8,000,000, (ii)
40% of Eligible Inventory, and (iii) 100% of all cash and cash
equivalents on the Consolidated balance sheet of the Borrower and its
Subsidiaries, all as set forth in the Borrowing Base Certificate most
recently delivered to the Agent and the Lenders pursuant to this
Agreement.
2. The defined term "Current Ratio" contained in Section 1.1 of the
Agreement is amended and restated in its entirety as follows:
"CURRENT RATIO": as of any date, and with respect to the
Borrower and the Subsidiaries on a Consolidated basis, the ratio of (a)
accounts receivable PLUS
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inventory PLUS cash and cash equivalents as would be set forth on the
Consolidated balance sheet of the Borrower and its Subsidiaries as of
the calendar month ended on of immediately preceding such date to (b)
the sum of, without duplication, accounts payable, accrued liabilities,
notes payable, the aggregate Outstandings of the Issuer, the Swing Line
Lender and each Lender, and the current maturities of all long-term
Indebtedness, in each case as such amounts would be included in a
balance sheet as at such date prepared in accordance with GAAP.
3. The defined term "Disposition" contained in Section 1.1 of the
Agreement is amended by deleting the phrase "(I) all sales of inventory" and
inserting in its place the phrase "(I) all sales of accounts receivable by
Foreign Subsidiaries in connection with a factoring arrangement and all sales of
inventory by any Person".
4. Section 7.7(n) of the Agreement is amended and restated in its
entirety as follows:
(n) and to each Lender, as soon as available, but in any event not
later than (x) in the event that the Aggregate Revolving Credit
Exposure shall exceed zero ($0.00) at the end of any month, 20 days
after the end of such month, a Borrowing Base Certificate setting forth
the Borrowing Base Amount as of the last day of such month, and (y) 20
days after the end of each fiscal quarter, a Borrowing Base Certificate
setting forth the Borrowing Base Amount as of the last day of such
fiscal quarter.
5. Section 8.1(j) of the Agreement is amended by adding the phrase "the
Bank One Credit Line and/or" immediately prior to the words "unsecured
short-term lines" appearing therein.
6. Section 8.1 of the Agreement is further amended by deleting the word
"and" following subsection (k) thereof, deleting the period at the end of
subsection (l) thereof, adding a comma and the word "and" to the end of such
subsection (l), and adding a new subsection (m) as follows:
(m) Indebtedness of one or more Foreign Subsidiaries in an aggregate
amount not in excess of $10,000,000 at any one time outstanding in
respect of short-term lines of credit.
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7. Section 8.2 of the Agreement is amended by deleting the word "and"
immediately preceding subsection (r) thereof, by deleting the period after the
word "Transaction" at the end of such subsection (r) and replacing the period
with a comma, and by adding a new subsection (s) to the end of Section 8.2 of
the Agreement as follows:
(s) Liens on assets of one or more Foreign Subsidiaries which secure
Indebtedness permitted pursuant to Section 8.1(m) only.
8. Section 8.5(j) of the Agreement is amended by deleting the phrase
"existing on the date hereof and" appearing therein.
9. Section 8.5(q) of the Agreement is amended and restated in its
entirety as follows:
(q) Investments in Foreign Subsidiaries in amounts not to exceed
dividends and other distributions received from Foreign Subsidiaries,
10. Each of Schedules 8.3, 8.5 and 8.9 to the Agreement is amended and
restated in its entirety in the form of Schedule 8.3, Schedule 8.5 and Schedule
8.9 to this Amendment, respectively.
11. Each of Exhibit G (Compliance Certificate) and Exhibit J (Borrowing
Base Certificate) to the Agreement is amended and restated in its entirety as
set forth in Exhibit G and Exhibit J, respectively, attached hereto.
12. Paragraphs 1 - 11 of this Amendment shall not be effective until
such date (the "AMENDMENT EFFECTIVE DATE") as each of the following conditions
shall have been satisfied:
(a) The Agent shall have received counterparts of this
Amendment executed by Required Lenders and the Guarantors.
(b) All legal matters incident to the execution and delivery
of the Amendment Documents shall be reasonably satisfactory to Special
Counsel.
(c) The Borrower shall have paid the reasonable fees and
disbursements of Special Counsel which shall have accrued up to the
Amendment Effective Date.
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(d) On and as of the Amendment Effective Date, there shall
exist no Default or Event of Default, and all of the representations
and warranties of the Loan Parties contained in the Loan Documents
shall be true and correct with the same effect as though such
representations and warranties had been made on the Amendment Effective
Date.
13. On each of the date hereof and the Amendment Effective Date, the
Borrower hereby (a) reaffirms and admits the validity and enforceability of the
Loan Documents and all of its obligations thereunder, (b) agrees and admits that
it has no defenses to or offsets against any such obligation, and (c) represents
and warrants that no Default or Event of Default has occurred and is continuing,
and that each of the representations and warranties made by it in the Agreement
is true and correct with the same effect as though such representation and
warranty had been made on such date.
14. In all other respects, the Loan Documents shall remain in full
force and effect, and no amendment in respect of any term or condition of any
Loan Document contained herein shall be deemed to be an amendment in respect of
any other term or condition contained in any Loan Document.
15. This Amendment may be executed in any number of counterparts all of
which, taken together, shall constitute one Amendment. In making proof of this
Amendment, it shall only be necessary to produce the counterpart executed and
delivered by the party to be charged.
16. THIS AMENDMENT IS BEING EXECUTED AND DELIVERED IN, AND IS INTENDED
TO BE PERFORMED IN, THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCEABLE
IN ACCORDANCE WITH, AND BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
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AS EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Amendment to be
executed on its behalf.
TELXON CORPORATION
By: /s/ Kenneth W. Haver
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Name: Kenneth W. Haver
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Title: Senior Vice President and
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Chief Financial Officer
THE BANK OF NEW YORK, in its
capacity as a Lender, as the
Issuer, as the Swing Line Lender
and as the Agent
By: /s/ Robert J. Joyce
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Name: Robert J. Joyce
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Title: Vice President
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Each of the following Lenders consents to the execution and delivery of this
Amendment by the Agent and agrees to all of the terms and conditions hereof:
BANK ONE, AKRON, N.A.
By: /S/ Susan D. Steiger
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Name: Susan D. Steiger
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Title: Vice President
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COMERICA BANK
By: /s/ Charles L. Weddell
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Name: Charles L. Weddell
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Title: Vice President
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THE HUNTINGTON NATIONAL BANK
By: /s/ Timothy M. Ward
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Name: Timothy M. Ward
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Title: A.V.P.
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PNC BANK, N.A.
By: /s/ Bryon A. Pike
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Name: Bryon A. Pike
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Title: Vice President
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SOCIETE GENERALE
By: /s/ Joseph A. Philbin
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Name: Joseph A. Philbin
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Title: Vice President
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UNITED STATES NATIONAL BANK OF OREGON
By: /s/ Chris J. Karlin
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Name: Chris J. Karlin
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Title: Vice President
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THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Hiroaki Nakamura
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Name: Hiroaki Nakamura
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Title: Joint General Manager
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Each of the Guarantors acknowledges the execution and delivery of this Amendment
by the Agent and by signing below, indicates its reaffirmation of the Guarantor
Obligations (as such term is defined in the Subsidiary Guaranty):
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AIRONET WIRELESS COMMUNICATIONS, INC.
By: /s/ Kenneth W. Haver
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Name: Kenneth W. Haver
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Title: Treasurer
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ITRONIX CORPORATION
By: /s/ Kenneth W. Haver
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Name: Kenneth W. Haver
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Title: Treasurer
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PTC AIRCO, INC.
By: /s/ Kenneth W. Haver
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Name: Kenneth W. Haver
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Title: Sr. V.P., C.F.O. and
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Treasurer
META HOLDING CORPORATION
By: /s/ Kenneth W. Haver
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Name: Kenneth W. Haver
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Title: Sr. V.P., C.F.O. and
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Treasurer
TELETRANSACTION, INC.
By: /s/ Kenneth W. Haver
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Name: Kenneth W. Haver
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Title: Sr. V.P., C.F.O. and
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Treasurer
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