AMENDMENT NUMBER NINE TO CREDIT AGREEMENT dated as of August 15, 2007 between ULTRALIFE BATTERIES, INC. and THE LENDERS PARTY THERETO and JPMORGAN CHASE BANK, N.A., as Administrative Agent
Exhibit 10.1
AMENDMENT NUMBER NINE TO CREDIT AGREEMENT
dated as of August 15, 2007
between
ULTRALIFE BATTERIES, INC.
and
THE LENDERS PARTY THERETO
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
as Administrative Agent
AMENDMENT NUMBER NINE TO CREDIT AGREEMENT
This Amendment, dated as of August 15, 2007 (“Amendment”), is made by and between ULTRALIFE
BATTERIES, INC. (the “Borrower”) and the Lenders party to the Credit Agreement and JPMORGAN
CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank) as Administrative Agent for the Lenders
(in such capacity, the “Agent”).
Statement of the Premises
The Borrower, the Lenders and the Agent have previously entered into, among other agreements,
a Credit Agreement, dated as of June 30, 2004, which was amended by Amendment Number One dated as
of September 24, 2004, Amendment Number Two dated as of May 4, 2005, Amendment Number Three dated
as of August 5, 2005 and Amendment Number Four dated as of November 1, 2005 and that certain waiver
letter dated May 3, 2006, Amendment Number Five dated June 29, 2006, that certain waiver letter
dated October 20, 2006, that certain waiver letter dated November 30, 2006 as extended, that
certain Forbearance and Amendment Number Six to Credit Agreement dated February 14, 2007 and that
certain Extension of Forbearance and Amendment Number Seven to Credit Agreement dated as of March
23, 2007 and that certain Extension of Forbearance and Amendment Number Eight to Credit Agreement
dated as of May 18, 2007 (collectively, the “Credit Agreement’). The Borrower has advised
the Agent and the Lenders that the Borrower wishes to extend the maturity of the Revolving Loan and
amend certain financial covenants contained therein. The Borrower, the Lenders and the Agent
desire to amend the Credit Agreement to extend the Maturity Date with respect to the Revolving
Loans and to amend the financial covenants under the Credit Agreement.
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:
Agreement
1. Defined Terms. The terms “this Agreement”, “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. Amendment. Effective upon the satisfaction of all conditions specified in Section 4
hereof, the Credit Agreement is hereby amended as follows:
A. The Definition “Maturity Date” as set forth in Section 1.01 of the Credit Agreement
is hereby superseded and replaced in its entirety and amended to read:
“Maturity Date” means (i) in respect of the Revolving Loans (including any
reference in respect of Letters of Credit), January 31, 2009, and (ii) in respect of
the Term Loans, July 1, 2009.
B. The following Definitions are hereby added to Section 1.01 of the Credit Agreement in the
appropriate alphabetical order:
“Capital Expenditures” means the gross dollar amount of expenditures made
for fixed assets, real property, plant and equipment, and all renewals, improvements
and replacements thereto (but not repairs thereto) incurred for any period, but
excluding any expenditures made in connection with the removal, improvement or
replacement of
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assets to the extent financed (i) from insurance proceeds of other similar
recoveries paid on account of the loss or damage to assets being replaced or
restored, or (ii) with awards of compensation arising from the taking by eminent
domain or condemnation of the assets being replaced. Capital Expenditures shall not
include any amounts paid on Capital Lease Obligations.
“Fixed Charges” means, for any period, the sum of (i) the aggregate of all
interest paid in cash by the Borrower during such period, including all interest,
fees and costs payable with respect to the Indebtedness (including the interest
portion of Capital Lease Obligations) of the Borrower (other than fees and costs
that may be capitalized as transaction costs in accordance with GAAP consistently
applied), (ii) all Taxes paid in cash by the Borrower for such period, (iii) all
principal payments on Indebtedness (including the principal portion of Capital Lease
Obligations, but excluding Revolving Loan payments) of the Borrower actually made
for such period by the Borrower, (iv) all Capital Expenditures paid by the Borrower
for such period, and (v) all earn out payments paid in cash by the Borrower during
such period.
C. Section 5.01 of the Credit Agreement is hereby amended so that subsections (h) and (i)
contained therein are superseded and replaced in their entirety to read:
| (h) | Until notified to the contrary by Required Lenders, within twenty (20) days after the close of each calendar month end, Borrower’s internally prepared financial statements for such month, including balance sheet and related statements of operating and cash flows in form historically prepared by Borrower. |
| (i) | Until notified to the contrary by Required Lenders, on a weekly basis, the Borrower’s cash forecast, in form historically prepared by Borrower. |
D. Section 6.09(a) of the Credit Agreement entitled “Debt to Earnings Ratio” is
superseded and replaced in its entirety and amended to read:
| (a) | Debt to Earnings Ratio: The Borrower shall maintain at Fiscal Quarter ending September 29, 2007 and at each Fiscal Quarter thereafter, the ratio of (x) Consolidated Senior Funded Debt measured at the subject Fiscal Quarter end, to (y) EBITDA, measured for the four Fiscal Quarter period then ended, taken together as a single accounting period, at or below 2.50 to 1.0. |
E. Section 6.09(b) of the Credit Agreement currently entitled “Minimum EBIT and EBIT to
Interest Expense Ratio” is superseded and replaced in its entirety and amended to read:
| (b) | Fixed Charge Coverage Ratio: The Borrower shall maintain, at Fiscal Quarter ending September 29, 2007 and at each Fiscal Quarter thereafter, a ratio of (i) EBITDA for the four Fiscal Quarter period then ended, taken together as a single accounting period, to (ii) Fixed Charges for the four Fiscal Quarter period then ended, taken together as a single accounting period, at or above 1.25 to 1. |
3. Representations. The Borrower hereby represents and warrants to the Lenders and the
Agent that: (i) the covenants, representations and warranties set forth in the Credit Agreement are
true and correct on and as of the date of execution hereof as if made on and as of said date and as
if each reference therein to the Credit Agreement were a reference to the Credit Agreement as
amended by this Amendment; (ii) no Default or Event of Default specified in the Credit Agreement
has occurred and is continuing, (iii) since the date of the Credit Agreement, there has been no
material adverse change in the financial condition or business operations of the Borrower which has
not been disclosed to Lenders; (iv) the making and performance by the Borrower of this Amendment
have been duly authorized by all necessary corporate action, and do not, and will not, (a)
contravene the Borrower’s certificate of incorporation or by-laws, (b) violate any law, including
without limitation the Securities Act of 1933, as
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amended, or the Securities Exchange Act of 1934, as amended, or any rule, regulation (including
Regulations T, U or X of the Board of Governors of the Federal Reserve System) order, writ,
judgment, injunction, decree, determination or award, and (c) conflict with or result in the breach
of, or constitute a default under, any material contract, loan agreement, indenture, note,
mortgage, deed of trust or any other material instrument or agreement binding on the Borrower or
any Subsidiary or any of their properties or result in or require the creation or imposition of any
lien upon or with respect to any of their properties; (v) this Amendment has been duly executed and
delivered by the Borrower and is the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms; (vi) no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or regulatory body or
any other third party is required for (a) the due execution, delivery or performance by the
Borrower of this Amendment or any other agreement or document related hereto or contemplated hereby
to which the Borrower is or is to be a party or otherwise bound except for required filings and
approvals under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and the rules and
regulations thereunder, or (b) the exercise by the Agent or any Lender of its rights under the
Credit Agreement as modified by this Amendment; and (vii) the security interests and charges
granted by the Borrower and its Subsidiaries pursuant to the Security Agreements continue to
constitute valid, binding and enforceable, first in priority Liens on the Collateral, subject only
to Liens permitted under the terms of the Security Agreements and Credit Agreement.
4. Conditions of Effectiveness of Amendments. The effectiveness of each and all of the
modifications contained in the Amendment is subject to the satisfaction, in form and substance
satisfactory to the Agent, of each of the following conditions precedent:
A. Agent shall have received four (4) duplicate original counterparts of this Amendment
executed by Borrower, Lenders and Agent.
B. Agent shall have received a secretarial certificate of the Borrower in a form reasonably
acceptable to Agent, certifying that the organizational documents and the incumbency of officers of
the Borrower previously delivered to Agent are true and correct as of the date of execution hereof.
C. As of the effective date of this Amendment, no Default or Event of Default shall have
occurred and be continuing.
D. The representations and warranties contained in Section 3 hereof and in the Credit
Agreement shall be true, correct and complete as of the effective date of this Amendment as though
made on such date.
E. The Agent shall have received all fees for the benefit of the Lenders and itself as agent
as set forth in that certain fee letter dated August 15, 2007 by the Agent.
5. Covenants.
A. Borrower hereby covenants and agrees to cooperate with the Agent in any manner reasonably
necessary in order to promptly continue, or in the case of after-acquired property, create a first
lien in favor of the Agent, on behalf of the Lenders, in all personal property assets acquired by
Borrower or its subsidiaries.
B. Borrower agrees to pay all out-of-pocket expenses and fees of the Agent and Lenders in
connection with the negotiation, preparation and execution of this Amendment and any related
document, including the reasonable fees and disbursements of counsel to the Agent.
6. Reference to and Effect on Loan Documents.
A. Upon the effectiveness hereof, each reference in the Credit Agreement to “this Agreement,”
“hereunder,’ “hereof,” “herein,” or words of like import, and each reference in the other Loan
Documents to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.
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B. Except as specifically amended above, the Credit Agreement, and all other Loan Documents
shall remain in full force and effect and are hereby ratified and confirmed.
C. The amendments set forth in Section 2 hereof are only applicable and shall only be
effective in the specific instance and for the specific purpose for which made, are expressly
limited to the facts and circumstances referred to herein, and shall not operate as (i) a waiver
of, or consent to non-compliance with any other provision of the Credit Agreement or any other Loan
Document, (ii) a waiver or modification of any right, power or remedy of either the Agent or any
Lender under the Credit Agreement or any Loan Document, or (iii) a waiver or modification of, or
consent to, any Event of Default or Default under the Credit Agreement or any Loan Document.
7. Governing Law. This Amendment shall be governed and construed in accordance with
the laws of the State of New York without regard to any conflicts-of-laws rules which would require
the application of the laws of any other jurisdiction.
8. Headings. Section headings in this Amendment are included herein for convenience
of reference only and shall not constitute a part of this Amendment for any other purpose.
9. Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all or which taken together shall
constitute but one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by
their respective representatives thereunto duly authorized as of the date first above written.
| ULTRALIFE BATTERIES, INC. |
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| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
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| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
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| Title: | VP-Finance & CFO |
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ADMINISTRATIVE AGENT:
| JPMORGAN CHASE BANK, N.A., as Agent |
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| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ |
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| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ |
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| Title: | Vice President |
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LENDERS:
| JPMORGAN CHASE BANK, N.A. |
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| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ |
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| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ |
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| Title: | Vice President |
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| MANUFACTURERS AND TRADERS TRUST COMPANY |
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| By: | /s/ ▇▇▇ ▇. ▇▇▇▇▇ |
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| ▇▇▇ ▇▇▇▇▇, Vice President |
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