Exhibit 10.1



 






Exhibit 10.1



 





AMENDMENT NUMBER FOUR TO CREDIT AGREEMENT




dated as of November 1, 2005




between




ULTRALIFE BATTERIES, INC.




and




THE LENDERS PARTY THERETO




and




JPMORGAN CHASE BANK, N.A.,

as Administrative Agent



 


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AMENDMENT NUMBER FOUR TO CREDIT AGREEMENT




     This Amendment is dated as of November 1, 2005, 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 and Amendment Number Three
dated as of August 5, 2005 (the “Credit Agreement”). The Borrower, the Lenders and the Agent
desire to amend the Credit Agreement as referenced herein.



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
Number Three. 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
5 hereof, the Credit Agreement is hereby amended as follows:



          A. Section 6.09(a), Debt to Earnings Ratio, is superseded and replaced in its entirety
and amended to read:





	 	(a)	 	Minimum EBITDA and Debt to Earnings Ratio. The Borrower shall:
	 
	 	 	 	at the Fiscal Quarter ending October 1, 2005, attain EBITDA for the Fiscal Quarter
of not less than ($775,000);
	 
	 	 	 	at the Fiscal Quarter ending December 31, 2005, attain EBITDA for the Fiscal Quarter
of not less than ($275,000);
	 
	 	 	 	maintain the ratio at the Fiscal Quarter ending April 1, 2006 of (x) Consolidated
Total Funded Debt measured at the subject Fiscal Quarter end, to (y) EBITDA for the
four Fiscal Quarter period then ended taken together as a single accounting period,
at or below 5.25 to 1;
	 
	 	 	 	maintain the ratio at the Fiscal Quarter ending July 1, 2006 of (x) Consolidated
Total Funded Debt measured at the subject Fiscal Quarter end, to (y) EBITDA for the
four Fiscal Quarter period then ended taken together as a single accounting period,
at or below 3.00 to 1;




maintain the ratio at the Fiscal Quarter ending September 30, 2006 of (x) Consolidated Total Funded
Debt measured at the subject Fiscal Quarter end, to (y) EBITDA for the four Fiscal Quarter period
then ended taken together as a single accounting period, at or below 2.50 to 1;




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	 	 	 	thereafter at each Fiscal Quarter end of (X) Consolidated Total 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
2.00 to 1.





            B. Section 6.09(b), EBIT to Interest Expense Ratio, is superseded and replaced in its
entirety and amended to read:





	 	(b)	 	Minimum EBIT and EBIT to Interest Expense Ratio. The Borrower shall:
	 
	 	 	 	at the Fiscal Quarter ending October 1, 2005, attain EBIT for the Fiscal Quarter of
not less than ($1,520,000);
	 
	 	 	 	at the Fiscal Quarter ending December 31, 2005, attain EBIT for the Fiscal Quarter
of not less than ($1,050,000);
	 
	 	 	 	at the Fiscal Quarter ending April 1, 2006, attain EBIT for the Fiscal Quarter of
not less than $700,000;
	 
	 	 	 	at the Fiscal Quarter ending July 1, 2006, attain EBIT for the Fiscal Quarter of not
less than $950,000;
	 
	 	 	 	at the Fiscal Quarter ending September 30, 2006 of (x) EBIT measured for the four
Fiscal Quarter period then ended, taken together as a single accounting period, to
(y) interest expense measured for the four Fiscal Quarter period then ended, taken
together as a single accounting period, at or above 2.25 to 1;
	 
	 	 	 	thereafter at each Fiscal Quarter end of (I) EBIT, measured for the four Fiscal
Quarter period then ended, taken together as a single accounting period to (II)
interest expense, measured for the four Fiscal Quarter period then ended, taken
together as a single accounting period, at or above 5.00 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) except the Existing Event of Default, defined and waived herein
below, 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
Agent; (iv) the making and performance by the Borrower of this Amendment have been duly authorized
by all necessary corporate action; and (v) the security interests and charges granted by the
Borrower and its Subsidiary 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. This Amendment shall become effective when and only
when Agent shall have received counterparts of this Amendment executed by Borrower, Lenders and
Agent, and Agent shall have additionally received the following:



          A secretarial certificate of the Borrower in a form reasonably acceptable to Agent, certifying
that the June 30, 2004 secretary’s certificate of Borrower is true and correct as of the date of
execution hereof, and the authorizing resolutions and the incumbency of officers of the Borrower
remain in full force and effect.




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     5. 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.




          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 execution, delivery and effectiveness of this Amendment shall not operate as a waiver
of any right, power or remedy of Agent and Lenders under any of the Loan Documents, nor constitute
a waiver of any provision of any of the Loan Documents.




     6. 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.



     7. 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.



     8. 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.



     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.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert W. Fishback	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert W. Fishback	 	 
	 	 	Title: VP – Finance & CFO	 	 






[Additional Signature Pages follow]




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	 	 	JPMORGAN CHASE BANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Hollie E. Calderon	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Hollie E. Calderon, Vice President	 	 
	 
	 	 	 	 	 	 
	ADMINISTRATIVE AGENT:	 	JPMORGAN CHASE BANK, N.A., as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Hollie E. Calderon	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Hollie E. Calderon, Vice President	 	 






[Additional Signature Page follows]




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	 	 	MANUFACTURERS AND TRADERS TRUST COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jon Fogle	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Jon Fogle, Vice President	 	 






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