Exhibit 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”), dated as of
January 14, 2011, by and between ULTRALIFE CORPORATION, a Delaware corporation
(“Ultralife”), McDOWELL RESEARCH CO., INC., a Delaware corporation (“McDowell”),
REDBLACK COMMUNICATIONS, INC., a Maryland corporation (“RedBlack
Communications”), and ULTRALIFE ENERGY SERVICES CORPORATION, a Florida
corporation (“Ultralife Energy”, and together with Ultralife, McDowell and
RedBlack Communications, each individually a “Borrower” and collectively, the
“Borrowers”), and RBS BUSINESS CAPITAL, a division of RBS Asset Finance, Inc., a
New York corporation (the “Lender”).
RECITALS:
The Borrowers and the Lender are parties to a Credit Agreement dated as of
February 17, 2010, as amended by that certain letter agreement dated
September 8, 2010 (the “Credit Agreement”), pursuant to which the Lender has
agreed to provide a revolving credit facility in an aggregate principal amount
not to exceed Thirty-Five Million Dollars ($35,000,000) to the Borrowers subject
to the terms and conditions set forth in the Credit Agreement.
By letter agreement dated July 28, 2010, the Lender consented to the name change
made by Stationary Power Services, Inc. to Ultralife Energy Services
Corporation.
The Borrowers have requested that the Lender modify pricing under the Credit
Agreement and the Lender is willing to do so upon the terms and subject to the
conditions set forth in this First Amendment.
NOW THEREFORE, the parties to this First Amendment, in consideration of their
mutual covenants and agreements contained in this First Amendment and the Credit
Agreement, and intending to be legally bound hereby, covenant and agree as
follows:
1. Definitions. (a) Article 1 “Definitions” of the Credit Agreement is hereby
amended to include the following definitions:
“Excess Availability Average” means, as of the date of determination, a sum
equal to the mathematical average of the weekly average Excess Availability
calculated for each week of the twelve (12) week period ended on the date of
determination.
“First Amendment” shall mean the First Amendment to Credit Agreement dated as of
January 14, 2011 between the Borrowers and the Lender.

 

 

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“First Amendment Closing Date” shall mean on or about January 14, 2011 or, if
all the conditions specified in the First Amendment to Credit Agreement have not
been satisfied or waived by such date, such later date as the Lender and the
Borrowers shall mutually agree.
“Prime Rate Loan” shall mean any loan or advance for which the applicable rate
of interest is based upon the Prime Rate.
“Prime Rate Margin” means, effective as of the date of the First Amendment, 1.0%
(100 basis points) per annum.
“Ultralife Energy” means Ultralife Energy Services Corporation, a Florida
corporation formerly known as Stationary Power Services, Inc., with its chief
executive offices located at 4902 113th Avenue North, Clearwater, Florida 33760.
(b) The following definitions contained in Article 1 “Definitions” of the Credit
Agreement are amended and restated in their entirety as follows:
“Borrowers” means, collectively, the following (together with their respective
successors and assigns) (a) Ultralife Corporation, a Delaware corporation;
(b) McDowell Research Co., Inc., a Delaware corporation; (c) RedBlack
Communications, Inc., a Maryland corporation; (d) Ultralife Energy Services
Corporation, a Florida corporation formerly known as Stationary Power Services,
Inc.; and (e) any Person that at any time after the date hereof becomes a
Borrower. Each of the Borrowers is sometimes referred to in this Agreement
individually as a “Borrower”.
“LA Margin” means, effective as of the date of the First Amendment, 3.0% (300
basis points) per annum.
“LIBOR Rate Margin” means, effective as of the date of the First Amendment, 3.0%
(300 basis points) per annum.
2. Eligible Accounts. Without limiting the current definition in the Credit
Agreement, “Eligible Accounts” under the Credit Agreement shall include an
Account arising from a sale of goods that are delivered or to be delivered
outside the United States of America, and an Account arising from a sale of
goods to an account debtor domiciled outside the United States of America,
provided that such Account is subject to credit insurance payable to the Lender
and issued by an insurer and on terms and in an amount satisfactory to the
Lender. To initiate advances against Eligible Accounts under this Section 2, the
Borrowers shall deliver to the Lender copies of its credit insurance policy(ies)
together with loss payable endorsements to such policy(ies) confirming the
Lender as loss payee on such credit insurance on terms satisfactory to the
Lender. The terms of this Section 2 replace the terms of that certain letter
agreement dated as of September 8, 2010 pursuant to which the Lender notified
the Borrowers of the foregoing revision to the specifications for Eligible
Accounts.

 

 

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3. Loan Requests/Conversions. Sections 2.04(a) and 2.04(b) of the Credit
Agreement are hereby amended and restated in their entirety to read as follows:
(a) LIBOR Advantage Loan and Prime Rate Loan Requests. By delivering a borrowing
request to the Lender on or before 10:00 a.m., New York time, on a Business Day,
the Administrative Borrower may from time to time irrevocably request, on not
less than one nor more than three Business Days’ notice, that a LIBOR Advantage
Loan or a Prime Rate Loan be made. On the terms and subject to the conditions of
this Agreement, each LIBOR Advantage Loan and Prime Rate Loan shall be made
available to the Administrative Borrower no later than 11:00 a.m. New York time
on the day such Loan is made by deposit to the account of the Administrative
Borrower as shall have been specified in its borrowing request. Notwithstanding
the foregoing, the Administrative Borrower may provide the Lender with written
notice (in the form and with information required in this Section 2.04) of any
such borrowing request for a LIBOR Advantage Loan or a Prime Rate Loan by
telecopy on the day, and by mail within one Business Day after the day, any such
request is made. The Lender is entitled to rely on any such request made in
accordance with the terms of this Agreement.
(b) Conversion to LIBOR Rate Loans. By delivering a conversion notice to the
Lender on or before 10:00 a.m., New York time, on a Business Day, the
Administrative Borrower may from time to time irrevocably elect, on not less
than two nor more than five Business Days’ notice, that all, or any portion, in
an aggregate minimum amount of $1,000,000 and integral multiples of $500,000, of
any LIBOR Advantage Loan or Prime Rate Loan be converted on any day into a LIBOR
Rate Loan, with a LIBOR Interest Period of one, two or three months; provided,
however, that no portion of the outstanding principal amount of any LIBOR
Advantage Loan or Prime Rate Loan may be converted to LIBOR Rate Loans when any
Event of Default has occurred and is continuing and provided, further, that all
accrued interest on the principal amount of any LIBOR Advantage Loan or Prime
Rate Loan to be converted hereunder shall be paid in full.
4. Interest Rates. Section 3.01 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(a) Interest on the outstanding principal amount of each Revolving Credit Loan,
when classified as a: (i) LIBOR Rate Loan, shall accrue during each LIBOR
Interest Period at a rate per annum equal to the sum of the Adjusted LIBOR Rate
for such LIBOR Interest Period plus the LIBOR Rate Margin, and be due and
payable on each Interest Payment Date and on the Maturity Date; (ii) LIBOR
Advantage Loan, shall accrue at a rate per annum equal to the sum of the LIBOR
Advantage Rate for such LA Interest Period plus the LA Margin, and be due and
payable on each LA Interest Payment Date and on the Maturity Date; and
(iii) Prime Rate Loan, shall accrue at a rate per annum equal to the sum of the
Prime Rate plus the Prime Rate Margin, and be due and payable on each LA
Interest Payment Date and on the Maturity Date. Interest on LIBOR Advantage
Loan(s) and Prime Rate Loans shall be calculated for the actual number of days
elapsed on the basis of a 360-day year, including the first day of the
applicable period to, but not including, the date of repayment. The Borrowers
shall not have the option to select a LIBOR Rate Loan with respect to the Loans
to be made on the Closing Date but may thereafter convert all or any portion to
one or more LIBOR Rate Loans in accordance with the terms of this Article III.

 

 

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(b) The interest rates under Section 3.01(a) above hereof shall from time to
time be increased or decreased, as the case may be, based on the then applicable
Excess Availability Average and in accordance with the following pricing grid:

                      LA Margin     Excess Availability Average   LIBOR Rate
Plus   Rate Plus   Prime Rate Plus
Greater than $10,000,000
  300 basis points   300 basis points   100 basis points
 
           
Greater than $6,000,000 but less than or equal to $10,000,000
  325 basis points   325 basis points   125 basis points
 
           
Greater than $3,000,000 but less than or equal to $6,000,000
  350 basis points   350 basis points   150 basis points

The Excess Availability Average shall be determined as of the end of each
quarter, commencing as of the end of the first fiscal quarter following the date
of the First Amendment. The Excess Availability Average as of the end of each
fiscal quarter shall be calculated for the twelve (12) week period then ended
and shall be as shown on the certificates to be delivered pursuant to
Section 6.01 hereof. Any interest rate adjustments made based on the foregoing
pricing grid shall be applicable to the Borrowers only for so long as the
applicable Excess Availability Average (as shown on the foregoing pricing grid)
is maintained and, in the event the applicable ratio is no longer maintained,
the interest rates under Section 3.01(b) above shall increase to the rates
applicable to the Excess Availability Average achieved by the Borrowers. Any
applicable reduction or increase shall be effective as of the first Business Day
of the month following receipt by the Lender of the financial statements and
certificate showing the Excess Availability Average, provided that in the event
the financial statements and certificates are not timely delivered, any rate
reduction then in effect shall be immediately discontinued as of the day such
documents were due until the first Business Day of the month following receipt
by the Lender of proper documents indicating that a reduction is applicable.

 

 

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5. Interest After Default. Section 3.02(b) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
(b) each other Obligation hereunder if not paid when due shall bear interest at
a rate per annum equal to the sum of the rate of interest applicable to LIBOR
Advantage Loans and Prime Rate Loans plus two percent (2.0%) per annum from the
time such Obligation becomes due and payable and until it is paid in full.
6. Repayments and Interest. Sections 3.10(a) and 3.10(b) of the Credit Agreement
are hereby amended and restated in their entirety to read as follows:
(a) LIBOR Advantage and Prime Rate Loans. Interest on the LIBOR Advantage Loans
and the Prime Rate Loans will be due and payable on each LA Interest Payment
Date and on the Maturity Date.
(b) Repayments Continuations and Conversions. LIBOR Rate Loans shall mature and
become payable in full on the last day of the LIBOR Interest Period relating to
such LIBOR Rate Loan. Upon maturity, a LIBOR Rate Loan may be continued for an
additional LIBOR Interest Period or may be converted to LIBOR Advantage Loan or
a Prime Rate Loan.
7. Intercompany Loans. Section 7.04(b) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(b) loans or other advances and/or investments made by Ultralife after the
Closing Date to or in any of the other Borrowers in an aggregate amount not to
exceed $3,000,000 at any one time outstanding.
8. Representations and Warranties. The Borrowers represent and warrant to the
Lender that:
(a) Each of the Borrowers have and will continue to have corporate power and
authority to execute, deliver and perform the provisions of this First Amendment
and the Credit Agreement, as amended hereby, and to execute and deliver the
instruments required by any of the provisions of this First Amendment and the
Credit Agreement, as amended hereby, to be executed and delivered by the
Borrowers; and all such action has been duly and validly authorized by all
necessary corporate proceedings on the part of each of the Borrowers.
(b) The execution, delivery and performance of this First Amendment, as amended
hereby, will not conflict with, constitute a default under or result in the
breach of, any provisions of Law or the articles of incorporation or the by-laws
of any of the Borrowers or of any material agreement or other instrument to
which any of the Borrowers is a party or by which it is bound or to which any of
them is subject.

 

 

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(c) This First Amendment has been duly and validly executed and delivered by
each of the Borrowers, and this First Amendment and the Credit Agreement, as
amended hereby, constitute legal, valid and binding obligations of the Borrowers
on and after its date of delivery thereof, enforceable against the Borrowers in
accordance with their respective terms, except to the extent that enforceability
of any of this First Amendment and the Credit Agreement, as amended hereby, may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforceability of creditors’ rights generally or
limiting the right of specific performance.
(d) Except as set forth in Section 9 below, the representations and warranties
by the Borrowers contained in Article IV of the Credit Agreement are correct and
accurate in all material respects on and as of the date of this First Amendment
with the same effect as though made on and as of the date of this First
Amendment (except representations and warranties which expressly relate to an
earlier date or time, which representations and warranties shall be true and
correct in all material respects on and as of the specific dates or times
referred to therein).
(e) No event has occurred and is continuing which constitutes an Event of
Default or Potential Default.
9. Update to Schedule 4.08. Pursuant to Section 6.01(s) of the Credit Agreement,
the Borrowers hereby submit an update to Schedule 4.08 of the Credit Agreement,
attached hereto as Amended Schedule 4.08, and the Lender hereby accepts the
updates reflected on Amended Schedule 4.08 and waives any Default or Potential
Default under the Credit Agreement arising from such updates.
10. Conditions to this First Amendment. The obligation of the Lender to enter
into this First Amendment is subject to the accuracy in all material respects as
of the date of this First Amendment of the representations and warranties
contained in this First Amendment, and to the satisfaction of the following
further conditions:
(a) This First Amendment shall be executed by the Borrowers and delivered to the
Lender and shall be in effect and all actions by the Borrowers contemplated
hereby shall have been taken.
(b) The Lender shall have received a certificate in form and substance
satisfactory to the Lender, dated as of the First Amendment Closing Date,
certifying as to the names, true signatures and incumbency of the officers of
the Borrowers to execute this First Amendment and the other documents and
instruments to be executed in connection with this First Amendment. The Lender
may conclusively rely on such certificate unless and until a later certificate
revising the prior certificate has been furnished to the Lender.
(c) Ultralife Energy shall have executed and delivered to the Lender an
Amendment to Security Agreement, satisfactory in terms, form and substance to
the Lender, confirming the change of its name from Stationary Power Services,
Inc. to Ultralife Energy Services Corporation.

 

 

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(d) No action, proceeding, investigation, regulation or legislation shall have
been instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of this First Amendment or the consummation of the transactions
contemplated hereby or which, in the Lender’s sole discretion, would make it
inadvisable to consummate the transactions contemplated by this First Amendment.
11. No Waiver of Existing Defaults. Except as otherwise provided in this First
Amendment, the Lender has not agreed to waive, and have not waived, any past or
present Event of Default or Potential Default under the Credit Agreement, as
amended by this First Amendment, or any of the other Loan Documents. Except as
otherwise provided in this First Amendment, the Lender has not consented to any
departure by the Borrowers from their due performance under the Credit
Agreement, as amended by this First Amendment, or under any of the Loan
Documents. The rights and remedies of the Lender under the Credit Agreement, as
amended by this First Amendment, and the other Loan Documents shall survive the
execution and delivery of this First Amendment and the Lender may exercise such
rights and remedies with respect to any such defaults at any time.
12. First Amendment Expenses. The Borrowers agree to pay, and save the Lender
harmless against liability for the payment, of all reasonable out-of-pocket
expenses of the Lender arising in connection with this First Amendment
including, without limitation, the reasonable fees and expenses of counsel for
the Lender and the expenses of any lien searches or other investigations
conducted for the Lender.
13. Scope of First Amendment. Except as amended by this First Amendment, the
provisions of the Credit Agreement shall remain in full force and effect. The
Loan Documents shall likewise remain in full force and effect. The Credit
Agreement and this First Amendment shall be construed as complementing each
other and as augmenting and not restricting the Lender’s rights, and, except as
specifically amended by this First Amendment, the Credit Agreement shall remain
in full force and effect in accordance with its terms. The Borrowers hereby
ratify, confirm and reaffirm, without condition, all Liens and security
interests granted to the Lender pursuant to the Credit Agreement and the Loan
Documents, and such Liens and security interests shall continue to secure the
Loan or Loans and the Revolving Credit Loans as defined in each of such
agreements.
14. Miscellaneous. This First Amendment will be deemed to be a contract under
the laws of the State of New York and for all purposes will be governed by and
construed and enforced in accordance with the laws of said State. The caption
headings contained in this First Amendment are for convenience of reference and
shall not be deemed to be a part of this First Amendment or used in the
construction of this First Amendment.
15. Counterparts. This First Amendment may be executed in counterparts and by
the Lender and the Borrowers on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]

 

 

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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this First Amendment as of the day and year first
above written.

          ATTEST:   ULTRALIFE CORPORATION
 
       
/s/ Peter F. Comerford
  By:   /s/ Philip A. Fain
 
       
Secretary
      Philip A. Fain, CFO and Treasurer
 
       
[CORPORATE SEAL]
       
 
        ATTEST:   McDOWELL RESEARCH CO., INC.
 
       
/s/ Peter F. Comerford
  By:   /s/ Philip A. Fain
 
       
Secretary
      Philip A. Fain, Treasurer
 
       
[CORPORATE SEAL]
       
 
        ATTEST:   REDBLACK COMMUNICATIONS, INC.
 
       
/s/ Peter F. Comerford
  By:   /s/ Philip A. Fain
 
       
Secretary
      Philip A. Fain, Treasurer
 
       
[CORPORATE SEAL]
       
 
        ATTEST:   ULTRALIFE ENERGY SERVICES CORPORATION
 
       
/s/ Peter F. Comerford
  By:   /s/ Philip A. Fain
 
       
Secretary
      Philip A. Fain, Treasurer
 
       
[CORPORATE SEAL]
            RBS BUSINESS CAPITAL,
a division of RBS Asset Finance, Inc.
 
       
 
  By:   /s/ Paul Rebholz
 
       
 
      Paul Rebholz
Vice President

 

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AMENDED SCHEDULE 4.08
OFFICERS AND DIRECTORS
(Updated to January 14, 2011)
Ultralife Corporation
Board of Directors
Bradford T. Whitmore, Chair
Steven M. Anderson
Patricia C. Barron
James A. Croce
Michael D. Popielec
Thomas L. Saeli
Robert W. Shaw II
Ranjit C. Singh
Officers
Michael D. Popielec, President & CEO
Peter F. Comerford, VP Administration, General Counsel & Secretary
Philip A. Fain, CFO & Treasurer
Patrick R. Hanna, Jr., VP Corporate Compliance
Ultralife Batteries (UK) Ltd. (Wholly-Owned Subsidiary)
Directors
Peter F. Comerford
Andrew J. Naukam
ABLE New Energy Co. Limited (Wholly-Owned Subsidiary)
Directors
Xulong Zhang, Chair
David E. Gates
Robert F. Green
ABLE New Energy Co., Ltd (Wholly-Owned by ABLE New Energy Co. Limited)
Directors
Xulong Zhang, Chair
David E. Gates
Robert F. Green

 

 

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McDowell Research Co., Inc. (Wholly-Owned Subsidiary)
Director
Peter F. Comerford
Officers
James J. Rasmussen, Jr., President
Patrick R. Hanna, Jr., Vice President
Philip A. Fain, Treasurer
Peter F. Comerford, Secretary
RedBlack Communications, Inc. (Wholly-Owned Subsidiary)
Director
Peter F. Comerford
Officers
James J. Rasmussen Jr., President
Gene D. McHugh, Vice President
Peter F. Comerford, Secretary
Philip A. Fain, Treasurer
Ultralife Batteries India Private Limited (Fifty-One Percent Owned Subsidiary)
Directors
Andrew J. Naukam, Chair (Ultralife Designee)
Kenneth R. Bird
B.R. Ganesh
Ultralife Energy Services Corporation (Wholly-Owned Subsidiary)
Director
Peter F. Comerford
Officers
John Christopher McComb, President
Philip A. Fain, Treasurer
Peter F. Comerford, Secretary