Document:

Exhibit 10.28

 

FIRST
AMENDMENT TO CREDIT AGREEMENT

 

FIRST AMENDMENT
(this “Amendment”), dated as of August 6, 2004, among ENERSYS, a
Delaware corporation (“Holdings”), ENERSYS CAPITAL INC., a Delaware
corporation (the “Borrower”), the lenders from time to time party to the
Credit Agreement referred to below (the “Lenders”) and Bank of America,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”).  All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings provided such terms
in the Credit Agreement.

 

WITNESSETH:

 

WHEREAS, Holdings,
the Borrower, the Lenders, the Administrative Agent, Morgan Stanley Senior
Funding, Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as
Documentation Agent, are parties to a Credit Agreement, dated as of
March 17, 2004 (the “Credit Agreement”); and

 

WHEREAS, subject
to the terms and conditions of this Amendment, the parties hereto wish to amend
or otherwise modify certain provisions of the Credit Agreement as herein
provided;

 

NOW, THEREFORE, IT
IS AGREED:

 

I.                                         Amendments to Credit Agreement.

 

1.             Section 1.01 of the Credit
Agreement is hereby amended by inserting the following new clause (e)
immediately following clause (d) of said section:

 

“(e)  (A)  Subject to and upon the terms and conditions
set forth herein, (i) each Consenting Term Lender severally agrees to convert
(the “Term Loan Conversion”), on the First Amendment Effective Date,
Term Loans of such Consenting Term Lender outstanding on the First Amendment
Effective Date (immediately prior to giving effect thereto) in an aggregate
principal amount equal to the Converted Term Loan Amount of such Consenting
Term Lender into new term loans hereunder owing by the Borrower (each such term
loan, a “Converted Term Loan” and, collectively, the “Converted Term
Loans”) and (ii) each Lender with a New Term Loan Commitment severally
agrees to make, on the First Amendment Effective Date, a term loan or term
loans (each, an “Additional New Term Loan” and, collectively, the “Additional
New Term Loans”, and, together with the Converted Term Loans, the “New
Term Loans”) to the Borrower, which New Term Loans:

 

(i)            shall be incurred by the Borrower
pursuant to a single drawing on the First Amendment Effective Date for the
purposes described in Section 7.05(e);

 

(ii)           shall be denominated in U.S. Dollars;

 

 

(iii)          except as hereafter provided, shall,
at the option of the Borrower, be incurred and maintained as, and/or converted
into, Base Rate Loans or Eurodollar Loans, provided that, (x) except as
otherwise specifically provided in Section 1.10(b), all New Term Loans
made as part of the same Borrowing shall at all times consist of New Term Loans
of the same Type and (y) Borrowings of New Term Loans on the First Amendment
Effective Date shall be subject to the rules set forth in clause (B) of this
Section 1.01(e) below; and

 

(iv)          shall not exceed for any Lender, in
initial principal amount, that amount which equals the sum of (x) the Converted
Term Loan Amount of such Lender plus (y) the New Term Loan Commitment of such
Lender (if any) as in effect on the First Amendment Effective Date (before
giving effect to the termination thereof on such date pursuant to
Section 3.03(f)).

 

Once
repaid, New Term Loans incurred hereunder may not be reborrowed.

 

(B)(i)       The
Interest Period applicable to each Borrowing of Term Loans existing on the
First Amendment Effective Date immediately prior to the Term Loan Conversion
and maintained as Eurodollar Loans shall, simultaneously with the occurrence of
the Term Loan Conversion, be broken and (ii) the New Term Loans shall be
initially incurred or continued, as the case may be, pursuant to four new
Borrowings with (x) Interest Periods maintained in accordance with the
following sentence and (y) the Lenders with outstanding New Term Loans (after
giving effect to the Term Loan Conversion and the incurrence of Additional New
Term Loans pursuant to Section 1.01(e)(A)) to participate in each such new
Borrowing of New Term Loans on a pro  rata basis (based upon their
respective New Term Loan Borrowing Amounts as in effect on the First Amendment
Effective Date).  Notwithstanding
anything to the contrary contained in Sections 1.06, 1.08(f) and 1.09 of the
Credit Agreement and the definitions of “Eurodollar Rate” and “Interest Period”
contained therein, (i) $60.0 million of principal of New Term Loans shall be
continued or incurred, as the case may be, pursuant to a Borrowing of
Eurodollar Loans on the First Amendment Effective Date subject to an interest period
commencing on the First Amendment Effective Date and ending on August 23,
2004 (with the Eurodollar Rate for such interest period to be determined by the
Administrative Agent on the Interest Determination Date therefor in accordance
with the definition of “Eurodollar Rate” as is if such interest period were a
one-month period), (ii) an additional $60.0 million of principal of New Term
Loans shall be continued or incurred, as the case may be, pursuant to a
Borrowing of Eurodollar Loans on the First Amendment Effective Date subject to
an interest period commencing on the First Amendment Effective Date and ending
on November 5, 2004 (with the Eurodollar Rate for such interest period to
be determined by the Administrative Agent on the Interest Determination Date
therefor in accordance with the definition of “Eurodollar Rate” as is if such
interest period were a three-month period) and (iii) the remaining $245.0
million of principal of New Term Loans shall be continued or incurred, as the
case may be, pursuant to two separate Borrowings of Eurodollar Loans on the
First Amendment Effective Date (in amounts determined by the Borrower) subject
to an interest period commencing on the First Amendment Effective Date of such
duration as may be elected by the Borrower in accordance with the requirements
of Section 1.09.  The interest
periods described in

 

2

 

clauses (i) and (ii) of the preceding sentence shall
be “Interest Periods” for all purposes of the Credit Agreement.

 

(C)           In
connection with the Term Loan Conversion and the incurrence of Additional New
Term Loans pursuant to Section 1.01(e)(A), the Lenders and the Borrower
hereby agree that, notwithstanding anything to the contrary contained in this
Agreement, the Borrower shall be obligated to pay to the respective Lenders
breakage or other costs of the type referred to in Section 1.11 (if any)
incurred in connection with the Term Loan Conversion and/or the actions taken
pursuant to preceding clause (B) of this Section 1.01(e).

 

(D)          After
the First Amendment Effective Date, each Consenting Term Lender which holds a
Term Note and has not requested and received a New Term Note on the First
Amendment Effective Date shall be entitled to surrender such Term Note to the
Borrower against delivery of a New Term Note completed in conformity with
Section 1.05; provided that if any such Term Note is not so
surrendered, then from and after the First Amendment Effective Date such Term
Note shall be deemed to evidence the Converted Term Loans into which the Term
Loans theretofore evidenced by such Term Note have been converted.”.

 

2.             Section 1.04(a) of the Credit
Agreement is hereby amended by deleting the parenthetical “(or, in the case of
Swingline Loans, the Swingline Lender shall make available the full amount
thereof)” appearing in the first sentence of said Section and inserting the
text “(or (I) in the case of Swingline Loans, the Swingline Lender shall make
available the full amount thereof and (II) in the case of Additional New Term
Loans, each Lender with a New Term Loan Commitment will make available an
amount thereof equal to its New Term Loan Commitment on the First Amendment
Effective Date)” in lieu thereof.

 

3.             Section 1.03(a) of the Credit
Agreement is hereby amended by inserting the text “New” immediately before the
text “Term Loans” appearing in said Section.

 

4.             Section 1.05(a) of the Credit
Agreement is hereby amended by (i) deleting the word “and” appearing prior to
the text “(iii)” appearing in said Section and inserting a comma in lieu
thereof and (ii) inserting the following new text before the period at the end
of said Section:

 

“and (iv) if New
Term Loans, by a promissory note substantially in the form of Exhibit B-4 with
blanks appropriately completed in conformity herewith (each, a “New Term
Note” and, collectively, the “New Term Notes”).”.

 

5.             Section 1.05 of the Credit
Agreement is hereby further amended by inserting the following clause (g) at
the end of said Section:

 

“(g) The New Term Note issued to each Lender with a New Term Loan
Commitment shall (i) be executed by the Borrower, (ii) be payable to such
Lender or its registered assigns and be dated the First Amendment Effective
Date (or, in the case of any New Term Note issued after the First Amendment
Effective Date, the date of issuance thereof), (iii) be in a stated principal
amount equal to the sum of the New Term

 

3

 

Loan Commitment of
such Lender on the First Amendment Effective Date before giving effect to any
reductions thereto on such date plus the aggregate principal amount of
all Converted Term Loans of such Lender on the First Amendment Effective Date
(or, in the case of any New Term Note issued after the First Amendment
Effective Date, in a stated principal amount equal to the outstanding principal
amount of the New Term Loans of such Lender on the date of issuance thereof)
and be payable in the principal amount of New Term Loans evidenced thereby from
time to time, (iv) mature on the New Term Loan Maturity Date, (v) bear interest
as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary repayment as provided in Section 4.01 and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.”.

 

6.             Section 1.07 of the Credit
Agreement is hereby amended by (i) deleting the text “Term Loans” in said
Section and inserting the text “New Term Loans” in lieu thereof and (ii)
deleting the text “Term Loan Commitments” appearing in said Section and
inserting the text “New Term Loan Borrowing Amounts” in lieu thereof.

 

7.             Section 1.09 of the Credit
Agreement is hereby amended by (i) deleting the text “and” appearing after the
text “Section 1.01(a)(iii)” and inserting a comma in lieu thereof, (ii)
inserting the text “and 1.01(e)(ii)” immediately following the text
“1.01(b)(ii)” appearing in said Section, (iii) inserting the text “New”
immediately before each appearance of the text “Term” appearing in said Section
and (iv) inserting the text “New Term Loan” immediately before each appearance
of the text “Scheduled Repayment” in said Section.

 

8.             Sections 1.13 and 3.02(b) of the
Credit Agreement are hereby amended by inserting the text “New” immediately
before each appearance of the text “Term” appearing in said Sections.

 

9.             Section 3.01 of the Credit
Agreement is hereby amended by inserting the following new clause (g) at the
end of said Section:

 

“(g) All prepayments of principal of New Term Loans
(whether voluntary or mandatory) made in connection with a Repricing
Transaction prior to the first anniversary of the First Amendment Effective
Date will be subject to payment to the Administrative Agent, for the ratable
account of each Lender with outstanding New Term Loans, of a fee in an amount
equal to 1.0% of the aggregate principal amount of the New Term Loans so
prepaid.  Such prepayment fees shall be
due and payable upon the date of any such prepayment of New Term Loans in
connection with a Repricing Transaction.”

 

10.           Section 3.03 of the Credit
Agreement is hereby amended by (i) inserting the text “, the Total New
Term Loan Commitment” immediately after the text “Total Term Loan Commitment”
appearing in clause (e) of said Section, (ii) inserting the text “, the New
Term Loan Commitment” immediately after the text “Term Loan Commitment”
appearing in clause (e) of said Section and (iii) inserting the following new
clause (f) immediately following clause (e) of said Section:

 

4

 

“(f)          The
Total New Term Loan Commitment (and the New Term Loan Commitment of each
Lender) shall terminate in its entirety on the First Amendment Effective Date
(after giving effect to the making of Additional New Term Loans on such
date).”.

 

11.           Section 4.01 of the Credit
Agreement is hereby amended by (i) inserting the text “, New Term Loans”
immediately after the first appearance of the text “Swingline Loans” appearing
in said Section, (ii) inserting the text “New Term Loans,” immediately after
the text “Term Loans” appearing in subclause (i) of said Section, (iii)
inserting the text “, New Term Loans” immediately after the text “Revolving
Loans” appearing in subclause (ii) of said Section, (iv) inserting the text
“New” immediately before each appearance of the text “Term” appearing in
subclause (v) of said Section, (v) inserting the text “New Term Loan”
immediately before each appearance of the text “Scheduled Repayments” appearing
in subclause (v) of said Section, (vi) deleting the word “and” appearing at the
end of subclause (v) of said Section, (vii) deleting the period at the end of
subclause (vi) of said Section and inserting the text “; and” in lieu
thereof and (viii) inserting the following new clause (vii) at the end of said
Section:

 

“(vii)       each prepayment of
New Term Loans pursuant to this Section 4.01 made prior to the first
anniversary of the First Amendment Effective Date in connection with a Repricing
Transaction shall be subject to the payment of the fee described in
Section 3.01(g).”.

 

12.           Section 4.02(b) of the Credit
Agreement is hereby amended by (i) inserting the text “(i)” immediately
following the text “(b)” appearing in said Section and (ii) inserting the
following new text at the end of said Section:

 

“(ii)  In
addition to any other mandatory repayments or commitment reductions pursuant to
this Section 4.02, on each date set forth below, the Borrower shall be
required to repay that principal amount of New Term Loans, to the extent then
outstanding, as is set forth opposite such date (each such repayment, as the
same may be reduced as provided in Sections 4.01 and 4.02(i), a “New Term
Loan Scheduled Repayment”):

 

	
  New Term Loan Scheduled Repayment
  Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  912,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  912,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  912,500

  	
   

  

 

5

 

	
  New Term
  Loan Scheduled Repayment Date

  	
   

  	
  Amount

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  912,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  912,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  912,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  912,500

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  912,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  New Term Loan Maturity Date

  	
   

  	
  $

  	
  341,275,000

  	
   

  

 

13.           Notwithstanding anything to the
contrary contained in Section 4.02(d) of the Credit Agreement or elsewhere
in the Credit Agreement, the proceeds of all Additional New Term Loans shall be
applied on the First Amendment Effective Date (as defined below) exclusively
for the purposes described in Section 7.05(e).

 

14.           Section 4.02(h) of the Credit
Agreement is hereby amended by (i) inserting the text “New” immediately before
each appearance of the text “Term” appearing in said Section, (ii) inserting
the text “New Term Loan” immediately before the first two appearances of the
text “Scheduled Repayments” appearing in said Section and (iii) inserting
the text “New” immediately before the text “Term Loan Scheduled Repayments”
appearing in said Section.

 

15.           Section 7.05 of the Credit
Agreement is hereby amended by inserting the following new clause (e) at the
end of said Section:

 

“(e) All proceeds of the Additional New Term Loans
shall be used on the First Amendment Effective Date (i) first, to repay
in full principal of all outstanding Term Loans of Non-Consenting Term Lenders
(if any), pay all accrued and unpaid interest on all then outstanding Term
Loans and pay all fees and expenses owing in connection with the First
Amendment and (ii) second, after application of such proceeds for the
purposes described in preceding clause (i), for general corporate purposes of
the Borrower and its Subsidiaries.”.

 

6

 

16.           Section 8.16 of the Credit Agreement
is hereby amended by (i) inserting the text “(or, after the repayment thereof,
New Term Loans)” immediately after the text “Term Loans” appearing in clause
(a) of said Section and (ii) inserting the text “New” immediately before
each appearance of the text “Term” appearing in clauses (b) and (c) of said
Section.

 

17.           Section 8 of the Credit Agreement is
hereby further amended by inserting the following new text at the end of said
Section:

 

“Section 8.20         First
Amendment Mortgage Amendments. 
Within 60 days following the First Amendment Effective Date, the
Borrower shall have delivered to the Collateral Agent, or caused to be
delivered to the Collateral Agent, (i) fully executed counterparts of
amendments (the “First Amendment Mortgage Amendments”), in form and
substance reasonably satisfactory to the Collateral Agent, to each of the
Mortgages covering the Mortgaged Properties, together with evidence that
counterparts of each of the First Amendment Mortgage Amendments have been
delivered to the title company insuring the Lien on the Mortgages for recording
in all places to the extent necessary or desirable, in the judgment of the
Collateral Agent, effectively to maintain a valid and enforceable perfected
mortgage lien superior to and prior to the rights of all third parties and
subject to no other Liens (other than Permitted Encumbrances) in favor of the
Collateral Agent for the benefit of the Secured Creditors securing all of the
Obligations (including the New Term Loans) and (ii) at the request of the
Collateral Agent, endorsements of the authorized issuing agent for title
insurers reasonably satisfactory to the Collateral Agent to each Mortgage
Policy assuring the Collateral Agent that each Mortgage is a valid and
enforceable first priority mortgage lien on the respective Mortgaged Properties,
free and clear of all defects and encumbrances except Permitted Encumbrances.”.

 

18.           Section 9.11 of the Credit Agreement
are hereby amended by inserting the text “New” immediately before each
appearance of the text “Term” appearing in said Section.

 

19.           The definition of “Applicable
Margin” appearing in Section 11 of the Credit Agreement is hereby
amended by (i) inserting the text “(v) in the case of New Term Loans (A)
maintained as Base Rate Loans, 1.00% and (B) maintained as Eurodollar Loans,
2.00%;” immediately before subclause (ii)(w) of the first sentence of said
definition, (ii) inserting the text “and New Term Loans” after the text “Term
Loans” appearing in the second sentence of said definition, (iii) deleting the
word “and” appearing immediately prior to subclause (y) in the last sentence of
said definition and inserting a comma in lieu thereof and (iv) inserting the
following new clause (z) before the period at the end of said definition:

 

“and (z) at any
time both (I) “Level V Pricing” (as set forth in the table above) is in effect
for Revolving Loans at such time and (II) the ratings assigned to the Loans by
both Moody’s and S&P at such time are Ba2 (with a stable outlook) or higher
and BB (with a stable outlook) or higher, respectively, then, so long as no
Specified Default and no Event of Default then exists, the “Applicable Margin”
for New Term Loans at such time shall be (A) if maintained as Base Rate Loans,
0.75% and (B) if maintained as Eurodollar Loans, 1.75%”.

 

7

 

20.           The definition of “Borrowing”
appearing in Section 11 of the Credit Agreement is hereby amended by (i)
inserting the text “(x)” immediately after the text “provided, that”
appearing in said definition and (ii) inserting the text “and (y) the term
“Borrowing” shall include each consolidated “borrowing” of New Term Loans
pursuant to the simultaneous conversion of Term Loans and the incurrence of
Additional New Term Loans on the First Amendment Effective Date on the terms provided
in Section 1.01(e)” immediately prior to the period appearing at the end
of said definition.

 

21.           The definition of “Commitment”
appearing in Section 11 of the Credit Agreement is hereby amended by inserting
the text “, New Term Loan Commitment” immediately after the text “Term Loan
Commitment” appearing in said definition.

 

22.           The definition of “Consolidated
EBITDA” appearing in Section 11 of the Credit Agreement is hereby amended
by (i) deleting the word “and” appearing before the text “(iv) in the case”
appearing in said definition and inserting a comma in lieu thereof and (ii)
inserting the following text immediately prior to the text “and (y)
subtracting” appearing in said definition:

 

“and (v) in the case of any period including the
fiscal quarter of Holdings ended nearest to September 30, 2004, the amount
of all prepayment premiums and/or penalties (whether cash or non-cash) paid by
the Borrower in connection with the prepayment of the Term Loans under, and as
defined in, the Second-Lien Credit Agreement”.

 

23.           The definition of “Excess Cash
Flow” appearing in Section 11 of the Credit Agreement is hereby
amended by inserting the text “or a New Term Loan Scheduled Repayment”
immediately before the text “Scheduled Repayment” appearing in said definition.

 

24.           The definition of “Loan”
appearing in Section 11 of the Credit Agreement is hereby amended by
inserting the text “each New Term Loan,” immediately before the text “each Term
Loan” appearing in said definition.

 

25.           The definition of “Maturity Date”
appearing in Section 11 of the Credit Agreement is hereby amended by
inserting the text “the New Term Loan Maturity Date,” immediately before the
text “the Term Loan Maturity Date” appearing in said definition.

 

26.           The definition of “Minimum
Borrowing Amount” appearing in Section 11 of the Credit Agreement is
hereby amended by inserting the text “New” immediately before the appearance of
the text “Term Loans” appearing in said definition.

 

27.           The definition of “Net Cash
Proceeds” appearing in Section 11 of the Credit Agreement is hereby
amended by inserting the text “or New Term Loans” immediately after the text
“Term Loans” appearing in said definition.

 

28.           The definition of “Note”
appearing in Section 11 of the Credit Agreement is hereby amended by inserting
the text “each New Term Note,” immediately after the text “Term Note,”
appearing in said Section.

 

8

 

29.           The definition of “Required
Lenders” appearing in Section 11 of the Credit Agreement is hereby
amended by (i) inserting the text “New Term Loans,” immediately before the
first appearance of the text “Term Loans” in said definition and (ii) inserting
the text “New Term Loans and” immediately before the second appearance of the
text “Term Loans” appearing in said definition.

 

30.           The definition of “Total
Commitment” appearing in Section 11 of the Credit Agreement is hereby
amended by inserting the text “the Total New Term Loan Commitment,” immediately
before the text “the Total Term Loan Commitment” appearing in said definition.

 

31.           Section 11 of the Credit
Agreement is hereby further amended by (i) deleting the definition of “Tranche”
appearing in said Section and (ii) inserting in the appropriate
alphabetical order the following new definitions:

 

“Additional New Term Loans” shall have the
meaning provided in Section 1.01(e).

 

“Consenting Term Lender” shall mean each Lender
holding outstanding Term Loans that has (x) theretofore executed and delivered
a counterpart of the First Amendment to the Administrative Agent on or prior to
5:00 P.M. (New York time) on August 16, 2004 and (y) specifically notified
the Administrative Agent of its desire to convert its Term Loans into Converted
Term Loans pursuant to Section 1.01(e)(A).

 

“Converted Term Loan Amount” shall mean, with
respect to each Lender, the amount set forth opposite such Lender’s name in
Schedule I directly below the column entitled “Converted Term Loan
Amount”.

 

“Converted Term Loans” shall have the meaning
provided in Section 1.01(e).

 

 “First
Amendment Effective Date” shall have the meaning provided in the First
Amendment to Credit Agreement, dated as of August 6, 2004, among Holdings,
the Borrower, the Lenders and the Administrative Agent.

 

“First Amendment Mortgage Amendments” shall
have the meaning provided in Section 8.20.

 

“New Term Loan Borrowing Amount” shall mean,
with respect to each Lender, the amount set forth opposite such Lender’s name
in Schedule I directly below the column entitled “New Term Loan Borrowing
Amount”, as the same may be (x) reduced from time to time as a result of
prepayments and repayments pursuant to Section 4.01, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments of New Term Loans to or
from such Lender pursuant to Section 1.13 or 13.04(b).

 

9

 

“New Term Loan Commitment” shall mean, with
respect to each Lender, the amount set forth opposite such Lender’s name in
Schedule I directly below the column entitled “New Term Loan Commitment,”
as the same may be reduced or terminated pursuant to Section 3.03 and/or
10 or otherwise modified pursuant to Section 1.13 and/or 13.04(b).

 

“New Term Loans” shall have the meaning
provided in Section 1.01(e).

 

“New Term Loan Maturity Date” shall mean
March 17, 2011.

 

“New Term Loan Scheduled Repayment” shall have
the meaning provided in Section 4.02(b)(ii).

 

“New Term Note” shall have the meaning provided
in Section 1.05(a).

 

“Non-Consenting Term Lender” shall mean each
Lender that is not a Consenting Term Lender.

 

“Repricing Transaction” shall mean the
incurrence by the Borrower of a new tranche of replacement term loans under
this Agreement (i) having an effective interest rate margin for the respective
Type of such replacement term loan that is less than the Applicable Margin for
New Term Loans of the respective Type (with the comparative determinations of
such margins to be made by the Administrative Agent and to be made after taking
account of all upfront or similar fees or original issue discount (amortized
over the life of such tranche of replacement term loans or New Term Loans, as
the case may be) payable to all Lenders providing such replacement term loans
or New Term Loans, as the case may be, but exclusive of any arrangement,
structuring or other fees payable in connection therewith that are not shared
with all Lenders providing such tranche of replacement term loans or New Term
Loans, as the case may be) and (ii) the proceeds of which are used to repay, in
whole or in part, principal of outstanding New Term Loans. Any such
determination by the Administrative Agent as contemplated by preceding clause
(i) shall be conclusive and binding on all Lenders holding New Term Loans.

 

“Term Loan Conversion” shall have the meaning
provided in Section 1.01(e).

 

“Total New Term Loan Commitment” shall mean, at
any time, the sum of the New Term Loan Commitments of each of the Lenders at
such time.

 

“Tranche” shall mean the respective facility
and commitments utilized in making Loans hereunder, with there being four separate
Tranches: (i) Term Loans, (ii) New Term Loans, (iii) Revolving Loans and (iv)
Swingline Loans.

 

32.           Section 13.01 of the Credit
Agreement is hereby amended by (i) inserting the text “New” immediately before
the text “Term Loans” appearing in clause (z) of the second proviso appearing
in said Section and (ii) inserting the text “New Term Loan” immediately

 

10

 

before the text
“Scheduled Repayment” appearing in clause (z) of the second proviso appearing
in said Section.

 

33.           Section 13.07(b) of the Credit
Agreement is hereby amended by inserting the text “New” immediately before the
text “Term Loans” appearing in said Section.

 

34.           Schedule I to the Credit
Agreement is hereby amended by deleting same in its entirety and inserting in
lieu thereof a new Schedule I in the form of Schedule I attached
hereto.

 

35.           Exhibits A-1, A-2 and K to the Credit
Agreement are hereby amended by inserting the text “New” immediately before
each appearance of the text “Term” appearing is said Exhibits.

 

36.           The Credit Agreement is hereby
further amended by adding thereto new Exhibit B-4 in the form of Exhibit B-4
attached hereto.

 

II.                                     Miscellaneous Provisions.

 

1.             In order to induce the Lenders to
enter into this Amendment, each Credit Agreement Party hereby represents and
warrants that:

 

(a)           no Default or Event
of Default exists as of the First Amendment Effective Date, both before and
after giving effect to this Amendment;

 

(b)           all of the
representations and warranties contained in the Credit Agreement or the other
Credit Documents are true and correct in all material respects on the First
Amendment Effective Date both before and after giving effect to this Amendment,
with the same effect as though such representations and warranties had been
made on and as of the First Amendment Effective Date (it being understood that
any representation or warranty made as of a specific date shall be true and
correct in all material respects as of such specific date);

 

(c)           concurrently with
the effectiveness of this First Amendment, the proceeds of the Additional New
Term Loans shall be applied by the Borrower as required by Section 7.05(e)
of the Credit Agreement (as amended hereby).

 

2.             This Amendment is limited as
specified and shall not constitute a modification, acceptance, consent to
deviation from or waiver of any other provision of the Credit Agreement or any
other Credit Document.

 

3.             This Amendment may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which counterparts when executed and delivered shall be
an original, but all of which shall together constitute one and the same
instrument.  A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.

 

11

 

4.             THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.

 

5.             This Amendment shall become effective
on the date (the “First Amendment Effective Date”) when each of the
following conditions shall have been satisfied:

 

(i) Holdings, the Borrower, Lenders constituting the
Required Lenders and each Lender with a New Term Loan Commitment and/or converting
Term Loans into Converted Term Loans pursuant to the Term Loan Conversion shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered (including by way of facsimile transmission) the same
to White & Case LLP, 1155 Avenue of the Americas, New York, NY 10036
Attention:  Aditi Chawla (facsimile
number 212-354-8113);

 

(ii) there shall have been delivered to the
Administrative Agent for the account of each Consenting Term Lender and each
Lender with a New Term Loan Commitment which has requested same, an appropriate
New Term Note executed by the Borrower in each case in the amount, maturity and
otherwise as provided in the Credit Agreement;

 

(iii) (x) all accrued and unpaid interest on
all Term Loans shall have been paid in full (regardless of whether or not the
Credit Agreement otherwise requires a payment of such interest at such time),
(y) all fees, costs and expenses with respect to the Term Loans shall have been
paid in full and (z) the principal of all outstanding Term Loans of
Non-Consenting Term Lenders shall have been repaid in full;

 

(iv) there shall have been delivered to
Administrative Agent copies of resolutions of the board of directors of each
Credit Party approving and authorizing the execution, delivery and performance
of this First Amendment and the Credit Documents as amended by this First
Amendment, certified as of the First Amendment Effective Date by the corporate
secretary or an assistant secretary of such Credit Party as being in full force
and effect without modification or amendment; and

 

(v)           an
opinion of counsel from Gibson, Dunn & Crutcher LLP in form and substance
reasonably satisfactory to the Administrative Agent, covering such matters in
connection with this Amendment and the transactions contemplated hereby as the
Administrative Agent may reasonably request.

 

6.             By executing and delivering a copy
hereof, each Credit Party hereby agrees that all Loans (including, without
limitation, the New Term Loans) shall be fully guaranteed pursuant to the
Subsidiaries Guaranty in accordance with the terms and provisions thereof and
shall be fully secured pursuant to the Security Documents.

 

7.             From and after the First Amendment
Effective Date, all references in the Credit Agreement and each of the other
Credit Documents to the Credit Agreement shall be deemed to be references to
the Credit Agreement as modified hereby.

 

*         
*          *

 

12

 

IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.

 

 

	
   

  	
  ENERSYS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Michael G. Hastings

  
	
   

  	
   

  	
  Title:  Vice President, Treasurer and

  Assistant Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ENERSYS
  CAPITAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Michael G. Hastings

  
	
   

  	
   

  	
  Title:  Vice President, Treasurer and

  Assistant Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A, as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Charles
  Graber

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MORGAN STANLEY SENIOR FUNDING, INC.,

  Individually and as Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Eugene
  F. Martin

  
	
   

  	
   

  	
  Title:  Vice
  President

  
				

 

 

	
   

  	
  LEHMAN COMMERCIAL PAPER INC.,

  Individually and as Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Francis
  J. Chang

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  

 

 

	
   

  	
  BANK
  OF AMERICA, N.A., in its capacity as a

  Lender with a New Term Loan Commitment

  (and not as a Consenting Term Lender)

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Ed
  Hamilton

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SIGNATURES OF LENDER PARTIES NOT

  INCLUDE

  

 

 

Each of the
undersigned, each being a Subsidiary Guarantor under, and as defined in, the
Credit Agreement referenced in the foregoing First Amendment, hereby consents
to the entering into of the First Amendment and agrees to the provisions
thereof (including, without limitation, Part II, Section 6 thereof).

 

 

	
   

  	
  ENERSYS
  DELAWARE INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  G. Hastings

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  Vice
  President, Treasurer and Assistant

  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ESFINCO,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Phillips

  	
   

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ESRMCO, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Phillips

  	
   

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ENERSYS
  ENERGY PRODUCTS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  T. Philion

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President, Treasurer and Assistant

  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAWKER POWER
  SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Michael
  T. Philion

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President, Treasurer and Assistant

  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAWKER
  POWERSOURCE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  T. Philion

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President, Treasurer and Assistant

  Secretary

  
						

 

 

	
   

  	
  NEW PACIFICO
  REALTY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard
  W. Zuidema

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
					

 

 

SCHEDULE I

LIST OF LENDERS AND COMMITMENTS

 

	
  Lender

  	
   

  	
  Revolving
  Loan

  Commitment

  	
   

  	
  Converted
  Term

  Loan Amount

  	
   

  	
  New Term
  Loan

  Commitment

  	
   

  	
  New Term Loan

  Borrowing

  Amount

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  258,108,134.54

  	
   

  	
  $

  	
  258,108,134.54

  	
   

  
	
  Morgan Stanley Senior Funding, Inc.

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Lehman Commercial Paper Inc.

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Sovereign Bank

  	
   

  	
  $

  	
  14,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  National City Bank

  	
   

  	
  $

  	
  14,000,000.00

  	
   

  	
  $

  	
  5,702,163.16

  	
   

  	
  $

  	
  297,863.84

  	
   

  	
  $

  	
  6,000,000.00

  	
   

  
	
  National Penn Bank

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  RZB Finance LLC

  	
   

  	
  $

  	
  4,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  	
  $

  	
  6,652,523.68

  	
   

  	
  $

  	
  847,476.32

  	
   

  	
  $

  	
  7,500,000.00

  	
   

  
	
  Bank of Tokyo-Mitsubishi Trust Company

  	
   

  	
  $

  	
  14,000,000.00

  	
   

  	
  $

  	
  2,851,081.58

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,851,081.58

  	
   

  
	
  Fleet National Bank

  	
   

  	
  $

  	
  14,000,000.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Babson CLO Ltd. 2003-I

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  417,231.45

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  417,231.45

  	
   

  
	
  Babson CLO Ltd. 2004-I

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,900,721.05

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,900,721.05

  	
   

  
	
  Suffield CLO, Limited

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  
	
  Seaboard CLO 2000Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  

 

 

	
  Lender

  	
   

  	
  Revolving
  Loan

  Commitment

  	
   

  	
  Converted
  Term

  Loan Amount

  	
   

  	
  New Term
  Loan

  Commitment

  	
   

  	
  New Term Loan

  Borrowing

  Amount

  	
   

  
	
  Simsbury CLO, Limited

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  
	
  Maplewood (Cayman) Limited

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  
	
  APEX (IDM) CDO I, Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  695,385.78

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  695,385.78

  	
   

  
	
  ELC (Cayman) Ltd. 1999-II

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  
	
  ELC (Cayman) Ltd. 1999-III

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  
	
  ELC (Cayman) Ltd. 2000-I

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  
	
  TRYON CLO Ltd. 2000-I

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  556,308.60

  	
   

  
	
  Massachusetts Mutual Life Insurance Company

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  139,077.15

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  139,077.15

  	
   

  
	
  Braymoor & Co.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,851,081.58

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,851,081.58

  	
   

  
	
  Gallatin Funding I Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,900,721.05

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,900,721.05

  	
   

  
	
  Grayston CLO 2001-01 Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,900,721.05

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,900,721.05

  	
   

  
	
  Grayston CLO II 2004-1 Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,851,081.58

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,851,081.58

  	
   

  
	
  Laguna Funding LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  

 

2

 

	
  Lender

  	
   

  	
  Revolving
  Loan

  Commitment

  	
   

  	
  Converted
  Term

  Loan Amount

  	
   

  	
  New Term
  Loan

  Commitment

  	
   

  	
  New Term Loan

  Borrowing

  Amount

  	
   

  
	
  Callidus Debt Partners CLO Fund III, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,807,396.74

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,807,396.74

  	
   

  
	
  Sierra CLO I

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  5,702,163.16

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  5,702,163.16

  	
   

  
	
  Gulf Stream-Compass CLO 2003-1Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,425,540.79

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,425,540.79

  	
   

  
	
  Gulf Stream-Compass CLO 2004-1Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,378,283.17

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,378,283.17

  	
   

  
	
  ING Prime Rate Trust

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  4,276,622.37

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  4,276,622.37

  	
   

  
	
  ING Senior Income Fund

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,326,261.85

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,326,261.85

  	
   

  
	
  Sequils-Pilgrim I, Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.52

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.52

  	
   

  
	
  LCMI Limited Partnership

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,815,081.58

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,815,081.58

  	
   

  
	
  LCMII Limited Partnership

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,815,081.58

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,815,081.58

  	
   

  
	
  Octagon Investment Partners
  III, Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  6,652,523.68

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  6,652,523.68

  	
   

  
	
  Foxe Basin CLO 2003, Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,801,442.11

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,801,442.11

  	
   

  
	
  C-Squared CDO Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  
	
  Celerity CLO Limited

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,425,540.79

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,425,540.79

  	
   

  

 

3

 

	
  Lender

  	
   

  	
  Revolving
  Loan

  Commitment

  	
   

  	
  Converted
  Term

  Loan Amount

  	
   

  	
  New Term
  Loan

  Commitment

  	
   

  	
  New Term Loan

  Borrowing

  Amount

  	
   

  
	
  KZH Crescent-2 LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  
	
  KZH Crescent-3 LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  
	
  Loan Funding I LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  
	
  TCW Select Loan Fund, Limited

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,375,901.32

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,375,901.32

  	
   

  
	
  NYLIM Flatiron CLO 2003-1 Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  
	
  NYLIM Flatiron CLO 2004-1 Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  
	
  ELF Funding Trust II

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  
	
  New York Life Insurance Company

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,815,081.58

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,815,081.58

  	
   

  
	
  New York Life Insurance and
  Annuity Corporation

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  
	
  Avalon Capital Ltd. 2

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,187,950.66

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,187,950.66

  	
   

  
	
  Champlain CLO, Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,187,950.66

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,187,950.66

  	
   

  
	
  Diversified Credit Portfolio
  Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  142,554.08

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  142,554.08

  	
   

  
	
  AIM Floating Rate Fund

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  
	
  Invesco European CDO I S.A.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  

 

4

 

	
  Lender

  	
   

  	
  Revolving
  Loan

  Commitment

  	
   

  	
  Converted
  Term

  Loan Amount

  	
   

  	
  New Term
  Loan

  Commitment

  	
   

  	
  New Term Loan

  Borrowing

  Amount

  	
   

  
	
  Sagamore CLO Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  950,360.53

  	
   

  
	
  Saratoga CLO I, Limited

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  475,180.26

  	
   

  
	
  Charter View Portfolio

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,995,757.11

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,995,757.11

  	
   

  
	
  Sequils-Liberty, Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  712,770.39

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  712,770.39

  	
   

  
	
  Merrill Lynch Capital, a
  division of Merrill Lynch Business Financial Services Inc.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,801,442.11

  	
   

  	
  $

  	
  1,198,557.89

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  
	
  Mountain Capital CLO II Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,326,261.83

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,326,261.83

  	
   

  
	
  Mountain Capital CLO III Ltd.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,425,540.79

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1,425,540.79

  	
   

  
	
  The Sumitomo Trust and Banking
  Co., Ltd., New York Branch

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  4,751,802.63

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  4,751,802.63

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  100,000,000.00

  	
   

  	
  $

  	
  104,547,994.41

  	
   

  	
  $

  	
  260,452,005.59

  	
   

  	
  $

  	
  365,000,000.00

  	
   

  

 

5

 

EXHIBIT B-4

 

FORM
OF NEW TERM NOTE

 

	
  U.S. $

  	
   

  	
   

  	
  New York, New York

  
	
   

  	
                   

  	
         ,

  	
         

  
	
   

  	
   

  
	
   

  	
   

  

 

FOR VALUE
RECEIVED, ENERSYS CAPITAL INC., a Delaware  corporation
(the “Borrower”), hereby promises to pay to the order of
[                                      ]
(the “Lender”), in lawful money of the United States of America in
immediately available funds, at the Payment Office (as defined in the Agreement
referred to below) initially located at Mailcode NC1-001-15-04, 101 North Tryon
Street, Charlotte, NC 28255 on the New Term Loan Maturity Date (as defined in
the Agreement) the principal sum of
                                                            
DOLLARS ($                    )
or, if less, the unpaid principal amount of all New Term Loans (as defined in
the Agreement) made by the Lender pursuant to the Agreement, payable at such
times and in such amounts as are specified in the Agreement.

 

The Borrower
promises also to pay interest on the unpaid principal amount of each New Term
Loan made by the Lender in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the
Agreement.

 

This Note is one
of the New Term Notes referred to in the Credit Agreement, dated as of March 17, 2004, among EnerSys, the Borrower, the
lenders from time to time party thereto (including the Lender), Lehman
Commercial Paper Inc., as Documentation Agent, Morgan Stanley Senior Funding,
Inc., as Syndication Agent, and Bank of America, N.A., as Administrative Agent
(as amended, restated, modified and/or supplemented from time to time, the “Agreement”)
and is entitled to the benefits thereof and of the other Credit Documents (as
defined in the Agreement).  This Note is
secured by the Security Documents (as defined in the Agreement) and is entitled
to the benefits of the Guaranties (as defined in the Agreement).  As provided in the Agreement, this Note is
subject to voluntary prepayment and mandatory repayment prior to the New Term
Loan Maturity Date, in whole or in part, and New Term Loans may be converted
from one Type (as defined in the Agreement) into another Type to the extent
provided in the Agreement.

 

In case an Event
of Default (as defined in the Agreement) shall occur and be continuing, the principal
of and accrued interest on this Note may be declared to be due and payable in
the manner and with the effect provided in the Agreement.

 

The Borrower
hereby waives presentment, demand, protest or notice of any kind in connection
with this Note.

 

 

Schedule I

 

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

 

	
   

  	
  ENERSYS
  CAPITAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

2Exhibit
10.1

 

CASELLA WASTE SYSTEMS, INC.

 

Incentive Stock Option Agreement

Granted
Under 1997 Amended & Restated Stock Incentive Plan

 

1.                                       Grant
of Option.

 

This agreement evidences the grant by Casella Waste
Systems, Inc., a Delaware corporation (the “Company”), on XXXX, XXXX (the “Grant Date”)
to XXXXXXX,
an employee of the Company (the “Participant”), of an option to purchase, in
whole or in part, on the terms provided herein and in the Company’s Amended and
Restated 1997 Stock Incentive Plan (the “Plan”), a total of XXXXX
shares of common stock, $0.01 par value per share, of the Company (the “Common
Stock” or the “Shares”) at $XXXX per Share.  Unless earlier terminated, this option shall expire on XXXXX, XXXX
(the “Final Exercise Date”).

 

It is intended that the option evidenced by this
agreement shall be an incentive stock option as defined in Section 422 of the
Internal Revenue Code of 1986, as amended and any regulations promulgated
thereunder (the “Code”).  Except as
otherwise indicated by the context, the term “Participant”, as used in this
option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.

 

2.                                       Vesting
Schedule.

 

This option is XXXX. 
This option shall expire upon, and will not be exercisable after, the
Final Exercise Date.

 

The right of exercise shall be cumulative so that to
the extent the option is not exercised in any period to the maximum extent
permissible it shall continue to be exercisable, in whole or in part, with
respect to all Shares which are then exercisable, until the earlier of the
Final Exercise Date or the termination of this option under Section 3
hereof or the Plan.

 

3.                                       Exercise
of Option.

 

(a)                                  Form
of Exercise.  Each election to
exercise this option shall be in writing, signed by the Participant, and
received by the Company at its principal office, accompanied by this agreement,
and payment in full in the manner provided in the Plan, including:

 

(i)                                     in
cash or by check, payable to the order of the Company;

 

(ii)                                  by
delivery of an irrevocable and unconditional undertaking by a credit-worthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price, or delivery by the Participant to the Company of a copy of irrevocable
and unconditional instructions to a credit-worthy

 

1

 

broker to deliver promptly to the Company cash or a
check sufficient to pay the exercise price, or by delivery of shares of Common
Stock owned by the Participant valued at their fair market value as determined
by the Board of Directors of the Company (the “Board”) in good faith (the “Fair
Market Value”), which Common Stock was owned by the Participant at least six
months prior to such delivery; or

 

(iii)                               any
combination of the above permitted forms of payment.

 

The Participant may purchase less than the number of
Shares covered hereby, provided that no partial exercise of this option may be
for any fractional Share.

 

(b)                                 Continuous
Relationship with the Company Required. 
Except as otherwise provided in this Section 3, this option may not
be exercised unless the Participant, at the time he or she exercises this
option, is, and has been at all times since the Grant Date, an employee,
officer or director of, or consultant or advisor to, the Company or any parent
or subsidiary of the Company as defined in Section 424(e) or (f) of the Code
(an “Eligible Participant”).

 

(c)                                  Termination
of Relationship with the Company. 
If the Participant ceases to be an Eligible Participant for any reason,
then, except as provided in paragraphs (d) and (e) below, the right to
exercise this option shall terminate 30 days after such cessation (but in no
event after the Final Exercise Date), provided  that this option
shall be exercisable only to the extent that the Participant was entitled to
exercise this option on the date of such cessation.  Notwithstanding the foregoing, if the Participant, prior to the
Final Exercise Date, violates the non-competition or confidentiality provisions
set forth in Section 4 hereof, or of any other agreement, the right to exercise
this option shall terminate immediately upon such violation.

 

(d)                                 Exercise
Period Upon Death or Disability.  If
the Participant dies or becomes disabled (within the meaning of
Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or
she is an Eligible Participant and the Company has not terminated such
relationship for “cause” as specified in paragraph (e) below, this option shall
be exercisable, within 90 days following the date of death or disability of the
Participant, provided  that this option shall be exercisable only
to the extent that this option was exercisable by the Participant on the date
of his or her death or disability, and further provided that this option shall
not be exercisable after the Final Exercise Date.

 

(e)                                  Discharge
for Cause.  If the Participant,
prior to the Final Exercise Date, is discharged by the Company for “cause” (as
defined below), the right to exercise this option shall terminate immediately
upon the effective date of such discharge. 
“Cause” shall mean willful misconduct by the Participant or willful
failure by the Participant to perform his or her responsibilities to the
Company (including, without limitation, breach by the Participant of Section 4
hereof, or of any provision of any employment, consulting or other similar
agreement), as

 

2

 

determined by the Company, which determination shall
be conclusive.  The Participant shall be
considered to have been discharged for “Cause” if the Company determines,
within 30 days after the Participant’s resignation, that discharge for cause
was warranted.

 

4.                                       Non-Competition.

 

(a)                                  To
the extent the Participant is not bound by a more stringent non-competition requirement
in an Employment Agreement or other enforceable document, the Participant
agrees that, during the period that the Participant is an employee of the
Company and for a period of one year following the termination thereof (the
“Term”), he will not directly or indirectly:

 

(i)                                     as
an individual proprietor, partner, stockholder, officer, employee, director,
joint venturer, investor, lender, consultant, or in any other capacity
whatsoever (other than as the holder of not more than one percent of the combined
voting power of the outstanding stock of a publicly held company), market, sell
or render (or assist any other person in marketing, selling or rendering) any
solid or liquid waste collection, disposal, transfer or recycling services
located within a 50-mile radius of any operating division of the Company then
in existence; or

 

(ii)                                  solicit,
divert or take away, or attempt to divert or to take away, the solid or liquid
waste collection, disposal, transfer or recycling business or patronage of any
of the clients, customers or accounts, or prospective clients, customers or
accounts, of the Company located within a 50-mile radius of any operating
division of the Company then in existence; or

 

(iii)                               recruit,
solicit or induce, or attempt to induce, any employee of the Company to
terminate his or her employment with, or otherwise cease his or her
relationship with, the Company.

 

For purposes of this Section 4, “Company” means
Casella Waste Systems, Inc., together with its subsidiaries and other
affiliates.

 

5.                                       Withholding.

 

No Shares will be issued pursuant to the exercise of
this option unless and until the Participant pays to the Company, or makes
provision satisfactory to the Company for payment of, any federal, state or
local withholding taxes required by law to be withheld in respect of this
option.  Such withholding taxes may be
satisfied, at the discretion of the Board, by the withholding of Shares of
Common Stock of the Company.

 

3

 

6.                                       Nontransferability
of Option.

 

This option may not be sold, assigned, transferred,
pledged or otherwise encumbered by the Participant, either voluntarily or by
operation of law, except by will or the laws of descent and distribution, and,
during the lifetime of the Participant, this option shall be exercisable only
by the Participant.

 

7.                                       Disqualifying
Disposition.

 

If the Participant disposes of Shares acquired upon
exercise of this option within two years from the date of grant of the option
or one year after such Shares were acquired pursuant to exercise of this
option, the Participant shall notify the Company in writing of such
disposition.

 

8.                                       Provisions
of the Plan.

 

This option is subject to the provisions of the Plan,
a copy of which is furnished to the Participant with this option.

 

IN WITNESS WHEREOF, the Company has caused this option
to be executed under its corporate seal by its duly authorized officer.  This option shall take effect as a sealed
instrument.

 

 

	
   

  	
  Casella Waste Systems, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated as of XXXXXXX

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Chairman &

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

PARTICIPANT’S ACCEPTANCE

 

The undersigned
hereby accepts the foregoing option and agrees to the terms and conditions
thereof.  The undersigned hereby
acknowledges receipt of a copy of the Company’s 1997 Stock Incentive Plan.

 

 

	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  XXXXXX

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

4

 

NOTICE OF STOCK OPTION EXERCISE

(To Be Completed Only Upon Exercise
of Options)

 

Casella Waste Systems, Inc.

Attn:                    XXXXXXXXXXXXXX
25 Greens Hill Lane
Rutland, VT 05701

 

Dear XXXXX

 

I, XXXXXXXXXXX am the holder of an Incentive
Stock Option granted to me under the Casella Waste Systems, Inc. (the
“Company”) Amended and Restated 1997 Stock Incentive Plan on XXXXX, XXXX
for the purchase of XXXXXXXXX shares of Common Stock of the
Company at a purchase price of $XXXX per share.

 

I hereby exercise my option to purchase
                         
shares of Common Stock (the “Shares”), for which I have enclosed a check in the
amount of $                         .

 

Please complete the following information (if
you are not using a broker, please disregard information pertaining to broker):
*Note – If you do not use a broker,
your stock certificate will be mailed to you at the address you list in (b)
below

 

(a)                                  Your Name:

 

(b)                                 Your Address:

 

(c)                                  Your Social Security #:

 

(d)                                 Name of Broker:

 

(e)                                  Contact at Broker:

 

(f)                                    Broker’s Telephone #:

 

(g)                                 Broker’s Fax#:

 

(h)                                 Broker’s Email Address:

 

(i)                                     Broker’s Address:

 

(j)                                     Broker’s preference as to delivery of
certificate (physical or electronic DWAC):

 

 

 

	
   

  	
   

  
	
  (Signature of Option Holder)

  

 

	
  Print Name:

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  

 

5

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