FOR IMMEDIATE RELEASE: NEWS
September 29, 2000 OTC - VARLE
VARI-L COMPANY ANNOUNCES
FORBEARANCE AGREEMENT WITH BANK ONE
DENVER, Colorado -- Vari-L Company, Inc. (OTC - VARLE), a leading provider
of advanced components for the wireless telecommunications industry, today
announced it has reached an agreement with its primary lender, Bank One
Colorado, N.A., whereby the bank has agreed to not pursue a default on
account of violations by the Company of various covenants and warranties
in its revolving credit agreement.
None of the covenant and warranty violations by the Company involved non-
payment. In the forbearance agreement, the bank agreed that it would not
pursue any events of default on account of the existing violations, would
not accelerate the loan payments and would refrain from exercising its
rights and remedies under the original loan agreements until December 15,
2000. In return, Vari-L made a $1.6 million paydown of principal on the
loan to bring the outstanding balance down to $9.9 million and agreed to
pay a higher interest rate on outstanding loan amounts. It also agreed to
comply with a borrowing base and to reduce the maximum revolving loan
amount from $20 million to $9.9 million. The forbearance agreement does
not provide for any other scheduled reductions.
"This is one more important step in our process of resolving the non-
operational issues that have faced Vari-L since the accounting problems
surfaced this summer," said Pete Pappas, Vari-L Chief Executive Officer.
"This agreement will help us concentrate our efforts on ensuring that
sales and production operations continue without interruption, while we
work to resolve the outstanding legal and regulatory issues and restore
shareholder value."
Through its headquarters in Denver, Vari-L designs, manufactures and
markets wireless communications components that generate or process radio
frequency (RF) and microwave frequency signals. Vari-L's patented
products are used in commercial infrastructure equipment (including
cellular/paging/PCS base stations and repeaters, fixed terminal point to
point/multi-point data radios including LMDS/MMDS), consumer subscriber
products (advanced cellular/PCS/satellite handsets, web-enabled smart
phones, 2-way pagers, wireless PDAs, home networking), and
military/aerospace platforms (satellite communications/telemetry, missile
guidance, electronic warfare, electronic countermeasures, battlefield
communications). Vari-L serves a diverse customer base of the world's
leading technology companies, including Adaptive Broadband, Agilent
Technologies, Digital Microwave, Ericsson, Glenayre Technologies (Wireless
Access), Harris, Hughes, Lockheed Martin, Lucent Technologies, Microwave
Data Systems, Mitsubishi, Motorola, NEC, NeoPoint, Netro, Newbridge
Networks, Nokia, Northrop Grumman, Novatel Wireless, Raytheon, Samsung,
and Siemens.
Some of the statements contained in this news release are forward-looking
statements. The accuracy of these statements cannot be guaranteed as they
are subject to a variety of risks, including but not limited to the
success of the products into which the Company's products are integrated,
governmental action relating to wireless communications licensing and
regulation, the accuracy of the Company's internal projections as to the
demand for certain types of technological innovation, competitive products
and pricing, the success of new product development efforts, the timely
release for production and the delivery of products under existing
contracts, the outcome of pending and threatened litigation and regulatory
actions, the success of the Company' s efforts to re-audit prior years'
financial statements, future economic conditions generally, as well as
other factors.
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CONTACTS:
Vari-L Company, Inc. Johnston Wells
Pete Pappas, CEO Marj Charlier
303/371-1560 303/623-3366
Pfeiffer Public Relations, Inc.
Jay Pfeiffer
303/393-7044
