EXHIBIT 10.20
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT dated as of July
25, 2001 (the "Amendment"), is entered into by and among Symbol
Technologies, Inc., a Delaware corporation (the "Company"), the
several financial institutions party to the Credit Agreement
(collectively, the "Banks"), and Bank of America, N.A., as agent for
the Banks (in such capacity, the "Agent").
RECITALS
A. The Company, Banks and Agent are parties to that
certain 2000 Amended and Restated Credit Agreement dated as of
August 3, 2000 (as amended by that certain First Amendment to Credit
Agreement dated as of March 28, 2001, the "Existing Credit
Agreement") pursuant to which the Banks have extended certain credit
facilities.
B. The Company has requested that the Majority Banks
agree to a one-time amendment to the Existing Credit Agreement to
permit and allow the company to add back the non-recurring charges
related to the Company's write down of inventory in the fiscal
quarter ended June 30, 2001 to its calculation of Operating Income
solely for the purposes of complying with the financial covenants
set forth in Sections 8.15 and 8.16 of the Credit Agreement for the
fiscal quarters ending June 30, 2001, September 30, 2001, December
31, 2001 and March 31, 2002.
C. The Majority Banks are willing to amend the Existing
Credit Agreement, subject to the terms and conditions of this
Amendment.
NOW, THEREFORE, for valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein (including the Recitals hereof) shall
have the meanings, if any, assigned to them in the Existing Credit
Agreement.
2. Amendment to Credit Agreement. The definition of
"Operating Income" as set forth in Section 1.01 of the Credit
Agreement shall be amended and restated to read in its entirety as
follows:
"Operating Income" means, for any period, for
the Company and its Subsidiaries on a consolidated
basis, earnings (or losses) from operations, calcu-
lated in accordance with the methodology used for
calculating "Earnings from Operations" in the xxxxx-
cial statements referenced in Section 6.10; provided,
however,
(a) that only for the fiscal quarters ending
December 31, 2000 and March 31, 2001 and solely for
the purposes of complying with the financial
covenants set forth in Sections 8.15 and 8.16 of the
Credit Agreement (Leverage Ratio and Fixed Charge
Coverage Ratio) for the foregoing fiscal quarters,
the Company shall be permitted to add back to the
calculation thereof the Telxon Special Charges. As
used in this definition, "Telxon Special Charges"
means an amount (not exceeding $274,000,000 before
taxes) equal to the aggregate of special charges
associated with the Company's acquisition of Telxon
Corporation, to extent deducted in arriving at
Operating Income for the fiscal quarter ended
December 31, 2000;
(b) that only for the fiscal quarters ending
June 30, 2001 and September 30, 2001 and solely for
the purposes of complying with the financial
covenants set forth in Sections 8.15 and 8.16 of the
Credit Agreement (Leverage Ratio and Fixed Charge
Coverage Ratio) for the foregoing fiscal quarters,
the Company shall be permitted to add back to the
calculation thereof the Telxon Special Charges and
the Q2 2001 Special Charges. As used in this
definition, "Q2 2001 Special Charges" means an amount
(not exceeding $100,000,000 before taxes) equal to
the aggregate of special charges associated with the
Company's write down of inventory, to the extent
deducted in arriving at Operating Income for the
fiscal quarter ended June 30, 2001; and
(c) that only for the fiscal quarters ending
December 31, 2001 and March 31, 2002 and solely for
the purpose of complying with the financial covenants
set forth in Sections 8.15 and 8.16 of the Credit
Agreement (Leverage Ratio and Fixed Charge Coverage
Ratio) for the foregoing fiscal quarters, the Company
shall be permitted to add back to the calculation
thereof the Q2 2001 Special Charges.
3. Representations and Warranties. The Company hereby
represents and warrants to the Agent and the Banks as follows:
(a) No Default or Event of Default has occurred
and is continuing.
(b) The execution, delivery and performance by the
Company of this Amendment have been duly authorized by all necessary
corporate and other action and do not and will not require any
registration with, consent or approval of, notice to or action by,
any Person (including any Governmental Authority) in order to be
effective and enforceable. The Existing Credit Agreement as amended
by this Amendment constitutes the legal, valid and binding
obligations of the Company, enforceable against it in accordance
with its respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable
principles relating to enforceability, without defense, counterclaim
or offet.
(c) All representations and warranties of the
Company contained in the Existing Credit Agreement are true and
correct on and as of the date hereof.
(d) The Company is entering into this Amendment on
the basis of its own investigation and for its own reasons, without
reliance upon the Agent, the Banks or any other Person.
4. Amendment Fee. The Company shall pay (through the
Agent) to each Bank that executes and delivers (i) a copy of the
letter from the Agent dated July 18, 2001 by no later than 5:00 p.m.
Pacific time on July 25, 2001, and (ii) this Amendment by no later
than 11:00 a.m. Pacific time on the Effective Date, a non-refundable
amendment fee equal to 0.05% of such Bank's Commitment as of the
Effective Date. Such amendment fee shall be fully-earned upon
becoming due and payable, shall not be refundable for any reason
whatsoever and shall be in addition to any fee, cost or expense
otherwise payable by the Company pursuant to the Existing Credit
Agreement or this Amendment.
5. Effectiveness. Upon receipt by the Agent (i) the
amendment fee referred to in Section 4, (ii) counterparts of this
Amendment executed by the Company and the Majority Banks, and (iii)
a Guarantor Consent Agreement, in form and substance satisfactory to
the Agent, executed by the Guarantors, this Amendment shall become
effective as of the date hereof (the "Effective Date").
6. Reservation of Rights. The Company acknowledges and
agrees that the execution and delivery by the Agent and the Banks of
this Amendment shall not be deemed to create a course of dealing or
otherwise obligate the Agent or the Banks to enter into amendments
under the same, similar or any other circumstances in the future.
7. Miscellaneous.
(a) Except as herein expressly amended, all terms,
covenants and provisions of the Existing Credit Agreement are and
shall remain in full force and effect and all references therein and
in the other Loan Documents to such Existing Credit Agreement shall
henceforth refer to the Existing Credit Agreement as amended by this
Amendment. This Amendment shall be deemed incorporated into, and a
part of, the Existing Credit Agreement. This Amendment is a Loan
Document.
(b) This Amendment shall be binding upon and inure
to the benefit of the parties hereto and to the Existing Credit
Agreement and their respective successors and assigns. No third
party beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
(d) This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original, but all
such counterparts shall constitute but one and the same instrument.
Each of the parties hereto understands and agrees that this document
(and any other document required herein) may be delivered by any
party thereto either in the form of an executed original or an
executed original sent by facsimile transmission to be followed
promptly by mailing of a hard copy original, and that receipt by the
Agent of a facsimile transmitted document purportedly bearing the
signature of a Bank or the Company shall bind such Bank or the
Company, respectively, with the same force and effect as the
delivery of a hard copy original. Any failure by the Agent to
receive the hard copy executed original of such document shall not
diminish the binding effect of receipt of the facsimile transmitted
executed original of such document of the party whose hard copy page
was not received by the Agent, and the Agent is hereby authorized to
make sufficient photocopies thereof to assemble complete
counterparty documents.
(e) This Amendment, together with the Existing
Credit Agreement, contains the entire and exclusive agreement of the
parties hereto with reference to the matters discussed herein and
therein. This Amendment supersedes all prior drafts and
communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 11.01
of the Existing Credit Agreement.
(f) If any term or provisions of this Amendment
shall be deemed prohibited by or invalid under any applicable law,
such provision shall be invalidated without affecting the remaining
provisions of this Amendment or the Existing Credit Agreement,
respectively.
(g) The Company covenants to pay or reimburse the
Agent, upon demand, for all reasonable out-of-pocket costs and
expenses (including the reasonable fees, charges and disbursements
of counsel (including the allocated costs and expenses of in-house
counsel)) incurred by the Agent in connection with the development,
preparation, negotiation, execution and delivery of this Amendment.
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