WAIVER
AND
AMENDMENT NUMBER ONE
TO
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 28,
2009
THE LENDERS PARTY THERETO
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
WAIVER
AND
AMENDMENT NUMBER ONE
TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Waiver and
Amendment Number One to Amended and Restated Credit Agreement (the
“ Amendment ”), dated as of June 28, 2009,
is made by and between ULTRALIFE CORPORATION (the “
Borrower ”) and the Lenders party to the Credit
Agreement and JPMORGAN CHASE BANK, N.A., as Administrative Agent
for the Lenders (in such capacity, the “ Agent
”).
The Borrower, the
Lenders and the Agent have previously entered into, among other
agreements, an Amended and Restated Credit Agreement, dated as of
January 27, 2009 (the “ Credit Agreement
”). The total aggregate amount of the Lenders’
Commitments thereunder is $35,000,000, and as of June 28,
2009, the Borrower owed the Lenders under the Credit Agreement an
outstanding aggregate principal amount of $24,219,060 under the
Revolving Loans and Letters of Credit and $166,666.07 under the
Term Loan and owes Agent and Lenders interest, costs, fees and
expenses as set forth therein. The Borrower has notified the Agent
that the Borrower has failed to meet the financial covenants
described in the Credit Agreement. The Borrower has requested that
the Lenders and Agent waive compliance with certain covenants
contained the Credit Agreement and the Borrower, the Lenders and
the Agent desire to amend the Credit Agreement as referenced
herein. Each Subsidiary that has provided a Guarantee derives a
financial benefit from its relationship with the Borrower and will
continue to enjoy such benefit as a result of the waiver and
amendments.
Statement of
Consideration
Accordingly, in
consideration of the premises and under the authority of
Section 5-1103 of the New York General Obligations Law, the
parties agree as follows:
1.
Defined Terms . The terms “ this
Amendment ”, “ hereunder ” and similar
references in the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended by this Amendment. Capitalized terms
used and not otherwise defined herein shall have the meanings
ascribed to such terms in the Credit Agreement.
2.
Amendments . Effective upon the satisfaction of all
conditions specified in Section 4 hereof, the Credit Agreement is
hereby amended as follows:
A.
The following definitions are hereby added to Section 1.01 of
the Credit Agreement in the appropriate alphabetical
order:
“
Amendment No. 1 ” means that certain Waiver and
Amendment Number One to Amended and Restated Credit Agreement dated
as of June 28, 2009 among Borrower, Administrative Agent and
Lenders.
“
Banking Services Obligations ” means each and all
obligations whether absolute or contingent and however and whenever
created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefore)
in connection with Banking Services.
“
Banking Services ” means each and any of the following
bank services to Borrower or any Subsidiary by a Lender or any of
its Affiliates: (a) credit cards for commercial customers
(including, without limitation, “commercial credit
cards” and purchasing cards), (b) stored value cards and
(c) treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository
network services).
“
Report(s) ” means report(s) prepared by the Agent or
another Person showing the results of appraisals, field
examinations or audits pertaining to the Borrower’s assets
from information furnished by or on behalf of the
Borrower.
B.
The definition of “ Applicable Revolving Rate ”
as set forth in Section 1.01 of the Credit Agreement is hereby
amended so that the following provision is added to the end
thereof:
Provided
further, however, commencing on the date of Amendment No. 1
and continuing thereafter, the Applicable Revolving Rate with
respect to the Facility Fee Rate shall be 100 basis points, the
Eurodollar Spread shall be 500 basis points, the ABR
1 Spread shall be 200 basis points and the
ABR 2
Spread shall be 400 basis
points.
C.
Section 5.01 of the Credit Agreement is hereby amended so
that: (i) in subsection (f) thereof the word “and”
at the end of such subsection is hereby deleted, (ii) in
subsection (g) thereof the period “.” at the end of
such subsection is hereby deleted and replaced with “;
and” , and (iii) the following subsection is added
thereto in the appropriate alphabetical order:
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(h)
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On
a weekly basis, the Borrower’s rolling thirteen
(13) week cash forecast, in form historically prepared by
Borrower.
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D.
The following are hereby added as new Sections 5.10 and 5.11
of the Credit Agreement:
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5.10
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Reports . The Borrower (a) acknowledges
and agrees that the Lenders require a more detailed review and
analysis of the Borrower’s projections and assets and that
the Agent and Lenders shall conduct or shall engage third party
examiners or other professionals to conduct (i) an asset
valuation/appraisal of the Borrower’s and the
Subsidiaries’ inventory, machinery and equipment, and
(ii) a field audit examination of the Borrower’s and
Subsidiaries’ books, records and collateral and prepare a
Report with respect thereto, (b) shall cooperate with the Agent,
Lenders and/or such examiners/professionals in the preparation of
such Reports and shall provide to such parties, in a reasonably
prompt manner, all such documents, reports, agreements, financial
and other information and other items as may be reasonably
requested with respect to the Borrower and its business, and
(c) shall pay and/or reimburse the Agent and Lenders upon
demand, all costs and expenses incurred by the Agent, Lenders
and/or their respective Affiliates in connection with such
appraisals, field examinations and audits (including, without
limitation, examiners fees, travel expenses and duplication costs)
and the preparation of the Reports based on the fees charged by a
third party retained by the Agent or any Lender or the internally
allocated fees for each Person employed
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by the Agent or
any Lender with respect to such asset valuation/appraisal and/or
field audit examination.
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5.11
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Guaranty of Subsidiaries’
Banking Services Obligations . Borrower hereby unconditionally
and irrevocably guarantees, without any setoff or other deduction,
the payment when due whether by acceleration or lapse of time or
otherwise of all Banking Services Obligations of any Subsidiary now
or hereafter existing whether such obligations are arising or
accruing prior or subsequent to any commencement of any case or
other proceeding pursuant to any bankruptcy, insolvency or similar
statute and whether or not allowed as a claim in any such case or
other proceeding. Such guarantee is continuing, absolute and
unconditional and a guaranty of payment rather than collection.
Borrower shall pay to each Lender on demand each cost and expense
(including, but not limited to, if such Lender retains counsel for
advice, litigation or any other purpose, reasonable attorneys fees
and disbursements) hereafter incurred by such Lender in endeavoring
to enforce any Banking Services Obligations of any Subsidiary or
preserve or exercise any right or remedy of any Lender pursuant to
this Agreement or arising as a result of this Agreement. This
Section 5.11 shall remain in full force and effect and shall
terminate only upon (a) the termination of all agreement(s) of
each Lender to extend Banking Services to any Subsidiary and
(b) the final indefeasible payment in full of the obligations
of Borrower under this Agreement and any other agreement executed
in connection herewith, including each cost and expense that
Borrower is obligated to pay pursuant to this section of this
Agreement. Borrower agrees not to exercise any right of
subrogation, indemnification, reimbursement or contribution and
each similar right against such Subsidiary heretofore or hereafter
arising in connection with this Agreement or any other agreements
in connection therewith (including but not limited to pursuant to
any agreement providing any collateral) until the guaranteed
obligation has been satisfied.
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E.
Section 6.01 of the Credit Agreement is hereby amended so that
it is deleted in its entirety and replaced with the
following:
“Section 6.01. Indebtedness .
The Borrower will not, and will not permit, any Subsidiary to,
create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness
created hereunder;
(b) Indebtedness
or Guarantees existing on the date of Amendment No. 1 as set
forth in Schedule 6.01 and extensions, renewals and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof;
(c) [Intentionally
omitted]
(d) [Intentionally
omitted]
(e) Indebtedness
of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or
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capital assets,
including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a
Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that
do not increase the outstanding principal amount thereof; provided
that (i) such Indebtedness is incurred prior to or within
90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal
amount of Indebtedness permitted by this clause (e) shall not
exceed $3,000,000 in the aggregate at any time outstanding owed to
any Lender (excluding those amounts permitted under subsection (g)
hereof) or $1,000,000 in the aggregate at any time outstanding owed
to any other Person;
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