Exhibit 10.5

 

ASSUMPTION AND JOINDER AGREEMENT, dated as of May 1, 2019 (this “Joinder”), is
executed in connection with that certain FIRST AMENDMENT AGREEMENT dated as of
the date hereof (the “First Amendment”) among ULTRALIFE CORPORATION, a Delaware
corporation (“Existing Borrower”), SOUTHWEST ELECTRONIC ENERGY CORPORATION, a
Texas corporation (“Southwest”), CLB, INC., a Texas corporation (“CLB”)
(collectively, together with Southwest, the “Joining Borrowers”, and each
individually, a “Joining Borrower”), each other Person which may be added as a
“Borrower” thereto, subsequent to the date hereof (collectively, together with
the Existing Borrower and the Joining Borrowers, the “Borrowers”, and each
individually, a “Borrower”), the lending institutions currently a party to the
Credit Agreement (as hereinafter defined) (each, a “Lender” and collectively,
the “Lenders”), and KEYBANK NATIONAL ASSOCIATION (“KeyBank”, and in its capacity
as agent for the Lenders under the Credit Agreement, “Agent”), and is executed
by and among (i) the Existing Borrower, (ii) the Joining Borrowers, (iii) Agent
and (iv) Lenders. All capitalized terms used herein and not otherwise defined
herein shall have the same meanings assigned to such terms in the First
Amendment.

 

BACKGROUND

 

A.     WHEREAS, Existing Borrower, Lenders and Agent are parties to a certain
Credit and Security Agreement dated as of the May 31, 2017 (as amended and as
may be further amended, supplemented or otherwise modified from time to time
prior to the date hereof, the “Credit Agreement”);

 

B.    WHEREAS, on the date hereof, Existing Borrower shall acquire and purchase
from Southwest Seller, directly or indirectly, one hundred percent (100%) of all
of the issued and outstanding Capital Stock of Joining Borrowers pursuant to the
Southwest Acquisition Agreement;

 

C.    WHEREAS, in connection with the Southwest Acquisition, Existing Borrower,
Lenders and Agent have agreed to make certain amendments and modifications to
the Credit Agreement, including, without limitation, making certain new loans
available in connection therewith in order to enable the Existing Borrower to
complete the Southwest Acquisition and the joining of the Joining Borrowers
immediately thereafter;

 

D.    WHEREAS, Existing Borrower, Lenders and Agent desire to evidence the
amendments and modifications described above by entering into the First
Amendment;

 

E.     WHEREAS, it is a condition to the execution and delivery of the First
Amendment that the Joining Borrowers assume the obligations and undertakings as
a Borrower under the Credit Agreement and the other Loan Documents, as
applicable; and

 

F.     WHEREAS, the Joining Borrowers have determined that the execution,
delivery and performance of this Joinder directly benefits, and is within the
corporate purpose and in the best interest of, the Joining Borrowers.

 

 NOW THEREFORE, with the foregoing background hereinafter deemed incorporated by
reference herein and made part hereof, the parties hereto, intending to be
legally bound, promise and agree as follows:

 

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1.   Joinder; Amendment. Upon the effectiveness of this Joinder, each of the
Joining Borrowers joins in as, assumes the duties, obligations, indebtedness,
liabilities, covenants and undertakings of, adopts the obligations, liabilities
and role of and becomes a Borrower under the Credit Agreement and the other Loan
Documents. All references to “Borrower” or “Borrowers” contained in the Credit
Agreement and the other Loan Documents are hereby deemed for all purposes to
also refer to and include each of the Joining Borrowers as a Borrower, as the
case may be, and each of the Joining Borrowers hereby agrees to be bound by and
to comply with all terms and conditions of the Credit Agreement and the other
Loan Documents as if it were an original signatory to the Credit Agreement and
the other Loan Documents in such capacities, and the Credit Agreement and the
other Loan Documents are hereby deemed amended, as appropriate, to so provide.
Without limiting the generality of the provisions of this paragraph, each of the
Joining Borrowers hereby agrees that it is, and will be, jointly and severally
liable as a Borrower for all Loans and other Secured Debt incurred prior to the
date hereof by Existing Borrower in Existing Borrower’s capacity a Borrower
under the Credit Agreement and the other Loan Documents.

 

2.    Security Interest. Without limiting the generality of Section 1 of this
Joinder, to secure the prompt payment and performance of the Secured Debt to
Agent, each of the Joining Borrowers (in its capacity as a Borrower under the
Credit Agreement) hereby pledges and grants to Agent, for its benefit and the
benefit of the other Lenders, a continuing security interest in and to and Lien
on all of its Collateral, whether now owned or existing or hereafter acquired or
arising and wheresoever located.

 

3.    Representations and Warranties of the Joining Borrower. Each of the
Joining Borrowers hereby:

 

(a)     reaffirms and restates as of the date hereof all representations and
warranties made by any Borrower under the Credit Agreement and the other Loan
Documents;

 

(b)     reaffirms all of the covenants applicable to any Borrower contained in
the Credit Agreement and the other Loan Documents, in each case as amended by
this Joinder, and covenants to abide thereby until the satisfaction in full of
the Secured Debt and the termination of the commitments of Agent and Lenders to
extend credit under the Credit Agreement or any other Loan Document; and

 

(c)     represents and warrants that (i) it has full power, authority and legal
right to enter into this Joinder and to perform all its respective duties,
obligations, indebtedness, liabilities, covenants and undertakings hereunder,
(ii) this Joinder has been duly executed and delivered by such Joining Borrower,
and this Joinder constitutes the legal, valid and binding obligation of such
Joining Borrower enforceable in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally and the
principle that equitable remedies may be granted or refused at the discretion of
a court and the limitation of enforcement by laws relating to insolvency,
reorganization and other laws generally affecting the rights of creditors; (iii)
the execution, delivery and performance of this Joinder (1) are within such
Joining Borrower’s corporate or company powers, as applicable, have been duly
authorized by all necessary corporate or company action, as applicable, are not
in contravention of the terms of such Joining Borrower’s Organizational
Documents or of any material agreement or undertaking to which such Joining
Borrower is a party or by which it is bound, (2) will not conflict with or
violate any applicable law, or any applicable judgment, order or decree of any
Governmental Authority, (3) will not require the consent, authorization or
approval of any Governmental Authority, or any other Person, except those
consents, authorizations or approvals the failure of which to obtain would not
be reasonably likely to have a Material Adverse Effect, all of which will have
been duly obtained, made or compiled prior to the First Amendment Closing Date
and which are in full force and effect and (4) will not conflict with, nor
result in any breach in any of the provisions of or constitute a default under
or result in the creation of any Lien except Permitted Liens upon any asset of
such Joining Borrower under the provisions of any agreement, contract, document,
undertaking or other instrument to which such Joining Borrower is a party or by
which it or its property is a party or by which it may be bound.

 

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4.    Existing Borrower’s Pledge Agreement. Pursuant to Existing Borrower’s
Pledge Agreement (the “Pledge Agreement”), Existing Borrower hereby confirms its
grant of a security interest in the Capital Stock of Southwest as security for
the Debt, and confirms that such Capital Stock of Southwest shall be considered
Pledged Collateral (as defined in the Pledge Agreement) thereunder. As of the
date hereof, Existing Borrower hereby reaffirms the representations and
warranties contained in the Pledge Agreement.

 

5.     Conditions Precedent/Effectiveness Conditions. This Joinder shall be
effective upon:

 

(a)     The satisfaction of all of the conditions precedent set forth in the
First Amendment; and

 

(b)     Execution and delivery of this Joinder by all parties hereto.

 

6.    Reaffirmation of Credit Agreement and the Other Loan Documents. Except as
modified by the terms hereof, all of the terms and conditions of the Credit
Agreement and the other Loan Documents are hereby reaffirmed and shall continue
in full force and effect as therein written.

 

7.    Miscellaneous.

 

(a)     Successors and Assigns. This Joinder shall be binding upon and inure to
the benefit of each of the Joining Borrowers, each other Borrower, Agent, each
Lender and all future holders of the Secured Debt (or any portion thereof) and
their respective successors and assigns, except that the Joining Borrowers may
not assign or transfer any of their rights or obligations under this Joinder
without the prior written consent of Agent and each Lender.

 

(b)     Third Party Rights. No rights are intended to be created hereunder for
the benefit of any third party donee, creditor, or incidental beneficiary.

 

(c)     Headings. The headings of any paragraph of this Joinder are for
convenience only and shall not be used to interpret any provision hereof.

 

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(d)     Governing Law. This Joinder shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws (other than Sections 5-1401 and 5-1402 of the New York
General Obligations Law).

 

(e)     Counterparts. This Joinder may be executed in any number of and by
different parties hereto on separate counterparts, all of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. Any signature delivered by a party by
facsimile or electronic transmission (including email transmission of a PDF
copy) shall be deemed to be an original signature hereto.

 

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties have caused this Joinder to be executed and
delivered by their duly authorized officers as of the date first above written.

 

 

JOINING BORROWERS:

 

SOUTHWEST ELECTRONIC ENERGY

CORPORATION

          By: /s/ Linda S. Saunders                                  Name: Linda
S. Saunders   Title: Vice President of Finance           CLB, INC.          
By: /s/ Linda S. Saunders                                  Name: Linda S.
Saunders   Title: Vice President of Finance

 

 

 

 

[Signature Page to Assumption and Joinder Agreement (Southwest and CLB) –
KeyBank/Ultralife]

 

 

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EXISTING BORROWER:

 

ULTRALIFE CORPORATION

          By: /s/ Philip A. Fain                                     Name:
Philip A. Fain   Title: Chief Financial Officer and Treasurer

 

 

 

 

[Continuation of Signature Page to Assumption and Joinder Agreement (Southwest
and CLB) – KeyBank/Ultralife]

 

 

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AGENT AND LENDERS:

KEYBANK NATIONAL ASSOCIATION,

as Agent and as a Lender

          By: /s/ Peter F. Leonard                                 Name: Peter
F. Leonard  

Title: Senior Vice President

             

 

 

 

[Continuation of Signature Page to Assumption and Joinder Agreement (Southwest
and CLB) – KeyBank/Ultralife]

 

 

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ASSUMPTION AND JOINDER AGREEMENT (SOUTHWEST & CLB) – KEYBANK/ULTRALIFE