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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT TO
FORM 8-K/A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) April 24, 1996
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(April 18, 1996)
Teltronics, Inc.
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(Exact Name of Registrant as specified in its charter)
Delaware 0-17893 59-2937938
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(State or other jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification
Number)
2150 Whitfield Industrial Way Sarasota, Florida 34243-9706
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (941) 753-5000
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This document consists of 9 pages.
The Exhibit Index appears on page 2.
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Item 5. Other Events.
On April 18, 1996, ISL, Inc. ("ISL"), a Delaware corporation and a
wholly owned subsidiary of the Registrant acquired certain assets and
technology from Interactive Solutions, LLC, a Kentucky limited liability
company and its three members (the "Members") pursuant to an Agreement of Sale
dated March 27, 1996, attached as an Exhibit to Registrant's Report on Form 8-K
filed April 5, 1996 as amended by an Amendment to Agreement of Sale dated April
18, 1996 ("Agreement") attached as an Exhibit to this Report. Under the
Agreement, ISL acquired all of Interactive's and its Members' rights to and in
certain technology for a small, self-contained, voice activated, portable,
pentium(R) processor driven, multimedia computer ("Technology") and other
Purchased Assets described in the Agreement in exchange for the assumption of
certain indebtedness of Interactive and its Members and possible future
issuance of up to 1,000,000 shares of the Registrant's Non-Voting Common Stock
(the "NVC Shares"), if authorized, upon the satisfaction of certain conditions,
including the award of significant contracts ("Contract") to ISL utilizing the
Technology. The NVC Shares, if issued, would be subject to several conditions,
including an escrow to secure certain indemnification obligations of
Interactive and its Members. There can be no assurance that a Contract will be
awarded or, if awarded, that the Contract will contain the terms and conditions
required to obligate ISL to deliver any or all of the NVC Shares.
There are numerous other provisions in the Agreement filed as Exhibits
to Registrant's Report on Form 8-K filed April 5, 1996 and this Report which
are important in order to derive a full understanding of the acquisition of the
Technology. The above summary is qualified in its entirety by reference to
text and the terms and conditions of the Agreement.
Item 7. Financial Statements and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits.
(1) Amendment to Agreement of Sale dated the 18th day of April, 1996
by and among Interactive, its Members and ISL.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Teltronics, Inc.
(Registrant)
Dated: April 24, 1996
By: /s/ Ewen Cameron
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Ewen Cameron
President and Chief Executive Officer
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AMENDMENT TO AGREEMENT OF SALE
THIS AMENDMENT ("Amendment") dated the 18th day of April, 1996 by and
among Interactive Solutions, LLC, a Kentucky limited liability company
("Interactive") with principal offices located at 191 West Lowry Lane, Suite A,
Lexington, Kentucky 40503, and its members Bruce W. Hanks residing at 3500
Beaver Place Road, #167, Lexington, Kentucky 40503, Kevin B. Rogers residing at
2120 Harbourside Drive, Longboat Key, Florida 34228, Michael P. Jonas residing
at 4142 Waikiki Drive, Sarasota, Florida 34241, (the three members are
hereinafter referred to as "Members") (the Members and Interactive are
sometimes hereinafter referred to collectively as "Sellers") and ISL, Inc., a
Delaware corporation (the "Buyer") with principal offices located at 2150
Whitfield Industrial Way, Sarasota, Florida 34243.
W I T N E S S E T H:
WHEREAS, Sellers and Buyer entered into an Agreement of Sale dated as of
the 27th day of March, 1996 ("Agreement"); and
WHEREAS, Sellers and Buyer desire to amend certain portions of the
Agreement to among other things clarify the timing of certain portions of the
transactions contemplated by the Agreement and provide for a second closing
upon satisfaction of and subject to certain conditions.
NOW, THEREFORE, in consideration of the mutual promises herein set forth,
and other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1. Section 1 of the Agreement is amended as follows:
(a) The following definitions are amended as follows:
(i) "Closing" shall mean the closing of the transactions
contemplated by this Agreement except the transactions contemplated by the Post
Closing Matters Section;
(ii) The term "Escrow/Indemnity Agreement" is amended to "Indemnity
Agreement" and shall read as follows: "Indemnity Agreement" shall mean the
Indemnity Agreement to be executed and delivered by Sellers at the Closing; and
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(iii) "Convertible Common Consideration" shall mean 1,000,000
non-voting convertible common shares of Teltronics, Inc. ("Teltronics"), a
Delaware corporation, as set forth in subsection (a) of Section 14A hereof;
(b) By adding the following new definitions:
(i) "Second Closing" shall mean the closing of the transactions
contemplated by the Post Closing Matters Section of this Agreement;
(ii) "Second Closing Date" shall mean a date on or after all of the
conditions specified in subsections (d) and (e) of Section 14A hereof have been
satisfied or waived; and
(iii) "Escrow Agreement" shall mean the Escrow Agreement to be
executed and delivered by Buyer and Sellers at the Second Closing.
2. Subsections (a) and (b) of Section 3 of the Agreement are deleted and
Section 3 is amended to read as follows:
"3. Purchase Price. The aggregate purchase price to be paid at the
Closing by the Buyer for the Purchased Assets shall consist of the assumption
by the Buyer of the Assumed Liabilities as described in this Section 3. The
Sellers and the Buyer agree that the aggregate purchase price of the Purchased
Assets shall be allocated based upon the book value of the Purchased Assets as
reflected in a balance sheet to be prepared by Sellers as of the Closing Date
("Allocation"). Buyer and Sellers agree to utilize the Allocation for all
purposes, including without limitations, financial reporting and federal income
tax purposes and execute IRS Form 8594 with respect thereto. At the Closing,
the Buyer will assume the Assumed Liabilities. Except for the Assumed
Liabilities, Buyer shall not assume and shall not be responsible for any other
obligation or Liability of Sellers, direct or indirect, known or unknown,
absolute or contingent."
3. Section 4, subsection (a)(ix) is amended to read as follows:
"(ix) The Indemnity Agreement duly executed and delivered by Sellers."
4. Section 4, subsection (b) is amended to read as follows:
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"(b) Buyer's Deliveries. At the Closing, the Buyer shall deliver to the
Sellers:
(i) Assumption instruments in form reasonably satisfactory to
Sellers whereby the Buyer agrees to assume the Assumed Liabilities;
(ii) Indemnity Agreement;
(iii) The Employment Agreements duly executed and delivered by
the Buyer; and
(iv) Evidence of the authorization of the transactions contem-
plated hereby by the Buyer and the Buyer's shareholder together with certi-
ficates of incumbency and other corporate documents, as the Sellers shall
reasonably request."
5. A new Section 14A entitled "Post Closing Matters" is hereby added as
follows:
"14A. POST CLOSING MATTERS.
(a) Convertible Common Consideration. Purchaser shall at the
Second Closing, deliver to the Escrow Agent the Convertible Common
Consideration which shall be subject to and issued in accordance with the Terms
described in Exhibit C to this Agreement and the Escrow Agreement.
(b) Sellers' Deliveries at Second Closing. At the Second
Closing, the Sellers shall deliver to the Buyer:
(i) the certificates described in Subsection (d)(ii) of
this Section 14A;
(ii) the Shareholder Agreement contemplated by the Terms
described in Exhibit C;
(iii) the Escrow Agreement; and
(iv) any and all other transfer instruments described in
Section 4(d) of the Agreement.
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(c) Buyer's Deliveries at the Second Closing. At the Second
Closing the Buyer shall deliver:
(i) the Escrow Agreement; and
(ii) the Convertible Common Consideration to the Escrow
Agent pursuant to the Escrow Agreement.
(d) Conditions Precedent to Second Closing. All obligations of
Buyer under this Section 14A of the Agreement are subject to the fulfillment,
at or prior to the Second Closing Date of each of the following conditions, any
or all of which may be waived in whole or in part at or prior to the Second
Closing by the Buyer:
(i) Material Contract. The Buyer shall have been awarded
and entered into on terms and conditions acceptable to Teltronics' Board of
Directors: (x) a major contract from the U.S. Department of Defense, utilizing
the intellectual property included in the Purchased Assets, with contract
revenues of no less than $50,000,000; or (y) fully executed major contracts
utilizing the intellectual property included in the Purchased Assets with
aggregate contract revenues of $50,000,000 within any 12 month period; and
(ii) each of the conditions described in Section 8
subsections (a) through (i) shall be restated and reaffirmed as of the Second
Closing Date and there shall be no breach or violation of any of those
conditions.
(e) Conditions Precedent to Second Closing. All the obligations
of Sellers under this Section 14A of this Agreement are subject to the
fulfillment, at or prior to the Second Closing Date of each of the following
conditions, any or all of which may be waived in whole or in part at or prior
to the Second Closing by the Sellers:
(i) each of the conditions described in Section 8.A
subsections (a) and (b) shall be restated and reaffirmed as of the Second
Closing Date."
6. Schedule 5(k) is amended as described on the Schedule 5(k) attached
hereto and made a part hereof.
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7. Except as expressly modified by this Amendment, the Agreement is hereby
ratified and its terms and conditions shall remain in full force and effect as
described therein.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Amendment the date first written above.
SELLER:
INTERACTIVE SOLUTIONS, LLC
a Kentucky Limited Liability Company
By: /s/ Bruce W. Hanks
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Bruce W. Hanks, President
/s/ Bruce W. Hanks /s/ Bruce W. Hanks
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Bruce W. Hanks, Individually Bruce W. Hanks, Member
/s/ Kevin B. Rogers /s/ Kevin B. Rogers
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Kevin B. Rogers, Individually Kevin B. Rogers, Member
/s/ Michael P. Jonas /s/ Michael P. Jonas
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Michael P. Jonas, Individually Michael P. Jonas, Member
BUYER:
ISL, INC.
By: /s/ Ewen R. Cameron
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Ewen R. Cameron, President
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Schedule 5(k)
Financial Condition
A. Worlds Agreement
Under the Worlds Agreement the aggregate amounts for Sellers' work:
1. Performed, invoiced and paid is $_________.
2. Performed, invoiced and not paid (outstanding) is $________.
3. Performed, but not yet invoiced is $__________.
4. To be performed is $__________.
B. Phoenix License
Under the Phoenix License amounts:
1. Already paid by Sellers is $__________.
2. Billed to Sellers, but not yet paid is $__________.
3. To be billed to Sellers is $__________.
