Exhibit 10.28
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT dated as of March 29, 2002 (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") party hereto, 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 and that
certain Amended and Restated Second Amendment to Credit Agreement dated as of
September 11, 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 certain
amendments to the Existing Credit Agreement and (for the avoidance of doubt)
consent to and confirm the characterization and treatment of the SAILS
Transaction (as defined below) under the Existing Credit Agreement.
C. The Banks party hereto are willing to amend the Existing Credit
Agreement and to consent to and confirm the characterization and treatment of
the SAILS Transaction under 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 in the Recitals hereof) shall have the meanings, if any,
assigned to them in the Existing Credit Agreement.
2. Amendment to Credit Agreement. Subject to the terms and conditions
hereof, the Existing Credit Agreement is amended as follows, effective as of the
Effective Date (as defined below):
(a) The definition of "EBITDA" as set forth in Section 1.01 of the
Existing Credit Agreement shall be amended and restated to read in its entirety
as follows:
""EBITDA" means, for any period, for the Company and its Subsidiaries
on a consolidated basis, the sum of (a) Operating Income for such period
plus (b) all amounts treated as expenses for depreciation and the
amortization of intangibles of any kind to the extent included in the
determination of Operating Income for such period plus (c) other non-cash
expenses to the extent included in the determination of Operating Income
for such period; provided, however, that except as provided in the
definition of Operating Income herein, "EBITDA" shall be computed without
giving effect to any unusual or non-recurring material charges or other
items arising after September 30, 2001 (including
1.
but not limited to merger related charges, restructuring charges, gains
or losses from dispositions of assets and other extraordinary items)."
(b) The definition of "Operating Income" as set forth in Section 1.01
of the Existing 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,
calculated in accordance with the methodology used for calculating
"Earnings from Operations" in the financial statements referenced in
Section 6.10; provided, however,
(a) that only for the fiscal quarter ending March 31, 2002 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 quarter, the Company shall
be permitted to add back to the calculation thereof the Q2 2001 Special
Charges. As used in this definition, "Q2 2001 Special Charges" means an
amount (not exceeding $126,000,000 before taxes) equal to the aggregate of
special charges associated with the Company's write down of company-owned
inventory and probable losses expected to be incurred as a result of the
Company's OEM partners not being able to sell Company product inventory, to
the extent deducted in arriving at Operating Income for the fiscal quarter
ended June 30, 2001; and
(b) that only for the fiscal quarters ending September 30, 2001,
December 31, 2001, March 31, 2002 and June 30, 2002 and solely for the
purposes of complying with the financial covenants set forth in Section
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 Q3 2001 Restructuring
Charges. As used in this definition, "Q3 2001 Restructuring Charges" means
an amount (not exceeding $20,700,000 before taxes) equal to the aggregate
amount of expenses relating to severance and lease terminations associated
with the Company moving its volume production from Bohemia, New York to
Reynosa, Mexico and consolidating several of its disparate warehouses into
a new global distribution center located in McAllen, Texas, to the extent
deducted in arriving at Operating Income for the fiscal quarter ending
September 30, 2001."
(c) Subsection (c) of Section 2.13 of the Existing Credit Agreement
shall be amended and restated to read in its entirety as follows:
"(c) Utilization Fees. The Company shall pay to the Agent for the
account of each Bank a utilization fee on the actual daily Dollar
Equivalent Amount of the Effective Amount of such Bank's Committed and Bid
Loans and Pro Rata Share of the Effective Amount of L/C Obligations
outstanding hereunder with respect to each day on which the Dollar
Equivalent Amount of the Effective Amount of Committed Loans, Bid Loans and
L/C Obligations then outstanding exceed 33% of the combined Commitments
(each such day, a "Utilization Fee Day"). Such fee shall be computed with
respect to each Utilization Fee Day at a rate equal to 0.25% per annum, and
shall accrue with respect to each Utilization Fee Day occurring on and
after the Closing Date to the later to occur of (i) the Revolving
Termination Date and (ii) the date on which all Loans and L/C
2.
Obligations and interest thereon are paid in full, and, to the extent
accrued during such period, shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter through the later to
occur of (x) the Revolving Termination Date and (y) the date on which all
Loans and L/C Obligations and interest thereon are paid in full, with the
final payment to be made on the latest to occur of such dates."
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 offset.
(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. Consent to SAILS Transaction. In connection with the SAILS Transaction,
subject to the terms and conditions hereof, for the avoidance of doubt the Banks
party hereto hereby consent to and confirm the following, effective as of the
Effective Date:
(i) to the extent that the forward sale of securities pursuant to the
SAILS Transaction is characterized as an asset disposition under the Existing
Credit Agreement, the consummation of the SAILS Transaction shall not be deemed
to have violated the restrictions on asset dispositions set forth in Section
8.02 of the Credit Agreement;
(ii) to the extent that the payment obligations of the Company and
Telxon Systems Services, Inc. ("Telxon") pursuant to the SAILS Transaction are
characterized as Indebtedness under the Existing Credit Agreement, the amount of
such Indebtedness as of any date of determination shall be the net amount of
indebtedness reflected on the Company's consolidated balance sheet (prepared in
accordance with GAAP) with respect thereto, offset by the fair market value of
the Cisco Shares (as defined below) as of such date of determination;
(iii) the Liens in favor of CSFBI (as defined below) pursuant to the
SAILS Transaction shall not be deemed to have violated the restrictions on Liens
set forth in Section 8.01 of the Credit Agreement; and
3.
(iv) the Swap Contracts entered into as part of the SAILS Transaction
shall constitute Permitted Swap Obligations under the Existing Credit Agreement.
The parties hereto agree and acknowledge that the foregoing consent and
confirmation in respect of the SAILS Transaction is limited solely to SAILS
Transaction as described herein. As used herein, the "SAILS Transaction" means
the SAILS (Shared Appreciation Income Linked Securities) transactions
contemplated by the SAILS Mandatorily Exchangeable Securities Contract, dated as
of January 4, 2001, entered into among Telxon, the Company, Credit Suisse First
Boston International ("CSFBI") and Credit Suisse First Boston Corporation
("CSFBC"), and the related SAILS Pledge Agreement, dated as of January 4, 2001,
among Telxon, CSFBI and CSFBC, which transactions included the forward sale by
Telxon of certain shares of Cisco Systems, Inc. (the "Cisco Shares"), the
Company's guaranty of Telxon's obligations in connection therewith, Telxon's
pledge of the Cisco Shares to secure its obligations in connection therewith,
and the incurrence of certain related Swap Contract obligations in connection
therewith, all as previously disclosed by the Company in its September 30, 2001
10-Q filing with the SEC.
5. Amendment and Consent Fee. The Company shall pay (through the Agent) to
each Bank that executes and delivers this Amendment by no later than 12:00 p.m.
Pacific time on March 29, 2002, a non-refundable amendment fee equal to 0.075%
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.
6. Effectiveness. Upon receipt by the Agent of (i) the amendment fee
referred to in Section 5, (ii) counterparts of this Amendment executed by the
Company and the Majority Banks, (iii) a Guarantor Consent Agreement, in form and
substance satisfactory to the Agent, executed by the Guarantors, and (iv)
payment of all amounts owing under Section 8(g), including in respect of all
fees and disbursements of legal counsel to the Agent, this Amendment shall
become effective as of the date hereof (the "Effective Date").
7. 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.
8. 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.
4.
(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 together 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 provision 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.
(remainder of page intentionally left blank)
5.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, as of the date first above written.
THE BORROWER
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SYMBOL TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
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Title: Vice President & Treasurer
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THE AGENT
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BANK OF AMERICA, N.A.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Managing Director
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THE BANKS
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BANK OF AMERICA, N.A., as a Bank, as
Fronting Bank and as Issuing Bank
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Managing Director
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JPMORGAN CHASE BANK (formerly known as
The Chase Manhattan Bank), as
Documentation Agent and as a Bank
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Vice President
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BANK HAPOALIM BM
By: /s/ Xxxxx Briedbart
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Name: Xxxxx Briedbart
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Title: Vice President
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By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: Vice President
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INTESA BCI, LOS ANGELES FOREIGN BRANCH
(formerly known as BANCA COMMERCIALE
ITALIANA, NEW YORK BRANCH)
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: Vice President
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By: /s/ X. Xxxxxxx
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Name: X. Xxxxxxx
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Title: FVP/Deputy Manager
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BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ Xxxxxxx Xxx
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Name: Xxxxxxx Xxx
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Title: Vice President
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BNP PARIBAS
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
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Title: Managing Director
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By: /s/ illegible
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Name:
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Title: Managing Director
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COMERICA BANK
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Assistant Vice President
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DZ BANK AG DEUTSCHEZENTRAL-
GENOSSENSCHAFTSBANK, FRANKFURT AM
MAIN, (successor by merger to DZ BANK
DEUTSCHE GENOSSENSCHAFTSBANK AG), as a
Bank
By: /s/ Bernd Xxxxxx Xxxxxx
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Name: Bernd Xxxxxx Xxxxxx
-----------------------------
Title: Vice President
----------------------------
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxxx
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Title: Vice President
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FLEET NATIONAL BANK (formerly known as
FLEET BANK N.A.)
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxxxxx X. Xxxxxxxxxx
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Title: SVP
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MELLON BANK, N.A.
By: /s/ Xxxxx X. XxXxxxx
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Name: Xxxxx X. XxXxxxx
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Title: Assistant Vice President
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THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: Vice President
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THE BANK OF NOVA SCOTIA
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Director
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WACHOVIA BANK, N.A.
By: /s/ Xxxxx X. Heatville
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Name: Xxxxx X. Heatville
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