AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT, dated as of March 30,
2006 (this "Amendment"), to the Loan and Security Agreement, dated as of
December 7, 2005 (as amended, restated or otherwise modified from time to time,
the "Loan Agreement"), by and among C&D Technologies, Inc., a Delaware
corporation ("Parent"), C&D Technologies (Datel), Inc., a Delaware corporation
("Datel"), C&D Technologies (CPS) LLC, a Delaware limited liability company
("CPS, and together with Parent and Datel, each individually a "Borrower" and
collectively, "Borrowers" as hereinafter further defined), C&D Charter Holdings,
Inc., a Delaware corporation ("Charter"), C&D Dynamo Corp., a Delaware
corporation ("Dynamo"), Dynamo Acquisition Corp., a Delaware corporation
("Acquisition"), C&D International Investment Holdings Inc., a Delaware
corporation ("International") and Datel Holding Corporation, a Delaware
corporation ("Datel Holding", and together with Charter, Dynamo, Acquisition and
International, each individually a "Guarantor" and collectively, "Guarantors" as
hereinafter further defined), the parties hereto from time to time as lenders,
whether by execution of this Agreement or an Assignment and Acceptance (each
individually, a "Lender" and collectively, "Lenders" as hereinafter further
defined) and Wachovia Bank, National Association, a national banking
association, in its capacity as agent for Lenders (in such capacity, "Agent").
Capitalized terms used but not defined herein have the meanings ascribed thereto
in the Loan Agreement.
WHEREAS, the Borrowers have requested that the Agent and the Lenders amend
the Loan Agreement to, among other things, (a) modify certain definitions, and
(b) modify certain covenants.
WHEREAS, the Agent and the Lenders are willing to amend the Loan Agreement
subject to the terms and conditions contained herein.
1. Definitions. All terms used herein which are defined in the Loan
Agreement and not otherwise defined herein are used herein as defined
therein.
2. Amendment of Defined Terms.
(a) Section 1.10 of the Loan Agreement is deleted in its entirety and
the following substituted therefor:
"'Availability Block' shall mean $10,000,000; provided, that, the
Availability Block shall be zero if as of December 31, 2006 no Default or
Event of Default shall exist or have occurred and be continuing.
Notwithstanding the foregoing, in no event shall the Availability Block be
less than $10,000,000 prior to December 31, 2006."
(b) Section 1.53 of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
"'Excess Availability' shall mean the amount, as determined by Agent,
calculated at any date, equal to: (a) the lesser of: (i) the Borrowing Base
and (ii) the Maximum Credit (in each case under (i) or (ii) after giving
effect to any Reserves other than any Reserves in respect of Letter of
Credit Obligations or the Availability Block (except, that, effect shall be
given to Reserves in respect of the Availability Block for purposes of
calculating Excess Availability under Sections 1.107(f) and 9.11(c)
hereof)), minus (b) the sum of: (i) the amount of all then outstanding and
unpaid Obligations (but not including for this purpose Obligations arising
pursuant to any guarantees in favor of Agent and Lenders of the Obligations
or the then outstanding aggregate principal amount of any outstanding
Letter of Credit Obligations), plus (ii) the amount of all Reserves then
established in respect of Letter of Credit Obligations."
3. Affirmative and Negative Covenants.
(a) Section 9.9(i) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
"(i) Indebtedness of any Borrowers evidenced by or arising under the
Convertible Note Indenture as in effect on the date hereof, provided, that:
(i) the aggregate principal amount of such Indebtedness shall not
exceed $75,000,000, less the aggregate amount of all repayments,
repurchases or redemptions thereof from and after such date, whether
optional or mandatory, plus interest thereon at any of the applicable rates
provided in the Convertible Note Indenture and/or in the Registration
Rights Agreement executed in connection with the Convertible Note
Indenture, each as in effect on the date hereof;
(ii) Agent shall have received a true, correct and complete copy of
the Convertible Note Indenture as in effect on the day hereof;
(iii) such Indebtedness is and shall remain unsecured;
(iv) Borrowers and Guarantors shall not, directly or indirectly, make,
or be required to make, any payments in respect of such Indebtedness,
except, that, Borrowers may make regularly scheduled payments of interest
and fees, on an unaccelerated basis, in respect of such Indebtedness in
accordance with the terms of the Convertible Note Indenture and/or the
Registration Rights Agreement, in each case as in effect on the date
hereof;
(v) Borrowers shall not , directly or indirectly, (A) amend, modify,
alter or change any of the material terms of such Indebtedness or of any of
the Convertible Note Indenture as in effect on the date hereof, except,
that, Borrowers may, after prior written notice to Agent, amend, modify,
alter or change the terms thereof so as to extend the maturity thereof or
defer the timing of any payments in respect thereof, or to forgive or
cancel any portion of such Indebtedness other than pursuant to payments
thereof, or to reduce the interest rate or any fees in connection
therewith, or to make the provisions thereof less restrictive or burdensome
than the terms or conditions of the Convertible Note Indenture as in effect
on the date hereof, or (B) make optional prepayments of principal or
interest or redeem, retire, defease, purchase or otherwise acquire such
Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose;"
4. EBITDA. Schedule 1.41 to the Loan Agreement is hereby deleted in
its entirety and replaced with the revised Schedule 1.41 attached hereto.
5. Conditions to Effectiveness. This Amendment shall become effective
only upon satisfaction in full, in a manner satisfactory to the Agent, of
the following conditions precedent (the first date upon which all such
conditions have been satisfied being herein called the "Amendment No. 1
Effective Date"):
(a) The Term Loan Agreement shall have been amended contemporaneously
herewith pursuant to an amendment in form and substance satisfactory to
Agent.
(b) The representations and warranties of the Borrowers and Guarantors
contained herein and in the other Financing Agreements shall be true and
correct on and as of the Amendment No. 1 Effective Date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall have
been true and correct on and as of such earlier date, and no Default or
Event of Default shall have occurred after giving effect to this Amendment.
(c) The Agent shall have received counterparts of this Amendment which
bears the signatures of each Borrower, each Guarantor, the Agent and the
Lenders.
(d) The Borrowers shall have paid to the Agent, for the account of the
Lenders, an amendment fee equal to $37,500, such fee to be distributed pro
rata among the Lenders.
(e) Post-Effective to Amendment. Without limitation upon any of the
provisions of Section 4 of the Loan Agreement or any other provision of the
Loan Agreement or any of the other Financing Agreements, the obligation of
the Lenders to continue to make Loans and issue Letters of Credit is
subject to the qualification that (a) within forty-five (45) days after the
Amendment No.1 Effective Date, the Borrowers shall have delivered to
Agent, Mortgages and title searches with respect to the Real Property of
Parent located in each of Leola, Pennsylvania and Mansfield, Massachusetts
and (b) within forty-five (45) days of any request by Agent therefor,
Borrowers shall deliver to Agent a Mortgage and title search with respect
to the Real Property of Parent located in Conyers, Georgia. The failure by
the Borrowers and the Guarantors to perform or cause to be performed the
foregoing obligations will constitute an Event of Default.
6. Representations and Warranties. Each Borrower and Guarantor
represents and warrants to the Agent and the Lenders as follows:
(a) Each Borrower and Guarantor is a corporation or limited liability
company, as the case may be, duly organized and in good standing under the
laws of its jurisdiction of organization and is duly qualified as a foreign
corporation or limited liability company, as the case may be, and in good
standing in all states or other jurisdictions where the nature and extent
of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the
failure to so qualify would not have a Material Adverse Effect.
(b) The execution, delivery and performance of this Amendment and the
performance by each Borrower and Guarantor of the Loan Agreement, as
amended hereby, (i) are all within each Borrower's and Guarantor's
organizational powers, (ii) have been duly authorized, (iii) are not in
contravention of law or the terms of any Borrower's or Guarantor's
certificate of incorporation, by laws, or other organizational
documentation, or any indenture, agreement or undertaking to which any
Borrower or Guarantor is a party or by which any Borrower or Guarantor or
its property are bound and (iv) will not result in the creation or
imposition of, or require or give rise to any obligation to grant, any
lien, security interest, charge or other encumbrance upon any property of
any Borrower or Guarantor, except for liens in favor of Agent and Term Loan
Agent.
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority which has not already been
obtained is required in connection with the (i) due execution, delivery and
performance by any Borrower or Guarantor of this Amendment or (ii)
performance by each Borrower and Guarantor of the Loan Agreement, as
amended hereby, or any Financing Agreements to which it is or will be a
party.
(d) Each of this Amendment and the Loan Agreement, as amended hereby,
and the other Financing Agreements to which any Borrower or Guarantor is a
party constitute the legal, valid and binding obligations of such Borrower
or Guarantor enforceable in accordance with their respective terms, except
as such enforceability may be limited by bankruptcy, insolvency, moratorium
or similar laws affecting creditors' rights generally and by general
equitable principles.
(e) The representations and warranties contained herein, in the Loan
Agreement and in each of the other Financing Agreements are true and
correct on and as of the date hereof as though made on and as of such date,
except to the extent that any such representation or warranty expressly
relates solely to an earlier date (in which case such representation or
warranty shall be true and correct on and as of such earlier date); and no
Default or Event of Default shall have occurred and be continuing on the
Amendment No. 1 Effective Date after giving effect to this Amendment in
accordance with its terms.
7. Miscellaneous. Except as otherwise expressly provided herein,
(a) (i)The Loan Agreement and the other Financing Agreements are, and
shall continue to be, in full force and effect and are hereby ratified and
confirmed in all respects, except that on and after the Amendment No. 1
Effective Date (A) all references in the Loan Agreement to "this
Agreement", "hereto", "hereof", "hereunder" or words of like import
referring to the Loan Agreement shall mean the Loan Agreement as amended by
this Amendment and (B) all references in the other Financing Agreements to
the "Loan Agreement", "thereto", "thereof", "thereunder" or words of like
import referring to the Loan Agreement shall mean the Loan Agreement as
amended by this Amendment, (ii) to the extent that the Loan Agreement or
any other Financing Agreements purports to pledge to the Agent, or to grant
to the Agent, a security interest in or lien on any collateral as security
for the Obligations, such pledge or grant of a security interest or lien is
hereby ratified and confirmed in all respects, and (iii) except as
expressly agreed to in this Amendment, the execution, delivery and
effectiveness of this Amendment shall not operate as an amendment of any
right, power or remedy of the Agent or the Lenders under the Loan Agreement
or any other Financing Agreement, nor constitute an amendment of any
provision of the Loan Agreement or any other Financing Agreement.
(b) This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which shall
be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
(c) Section and paragraph headings herein are included for convenience
of reference only and shall not constitute a part of this Amendment for any
other purpose.
(d) This Amendment shall be governed by the internal laws of the State
of New York but excluding any principles of conflicts of law or other rule
of law that would cause the application of the law of any jurisdiction
other than the State of New York.
(e) Each Borrower and each Guarantor hereby acknowledges and agrees
that this Amendment constitutes a "Financing Agreement" under the Loan
Agreement. Accordingly, it shall be an Event of Default under the Loan
Agreement if (i) any representation or warranty made by a Borrower or a
Guarantor under or in connection with this Amendment shall have been
untrue, false or misleading in any material respect when made, or (ii) a
Borrower or a Guarantor shall fail to perform or observe any term, covenant
or agreement contained in this Amendment.
(f) This Amendment is not, and shall not be deemed to be, a waiver of,
or a consent to any Event of Default, event with which the giving of notice
or lapse of time or both may result in an Event of Default, or other
noncompliance now existing or hereafter arising under the Loan Agreement
and the other Financing Agreements, and the Agent and the Lenders expressly
reserve all of their rights and remedies under the Loan Agreement and the
other Financing Agreements, under applicable law or otherwise.
8. Waiver of Jury Trial. THE BORROWERS, THE GUARANTORS, THE AGENT AND
THE LENDERS EACH HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE ACTIONS OF
THE AGENT OR THE LENDERS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT HEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be executed as of the date first above written.
AGENT AND LENDER
BORROWERS
WACHOVIA BANK, NATIONAL ASSOCIATION
C&D TECHNOLOGIES, INC.
By:/s/ Georgios C. Kyvernitis
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By: /s/ Robert T. Marley
Title: Director ------------------------
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Title: V.P. Treasurer
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LENDERS
C&D TECHNOLOGIES (DATEL), INC.
LASALLE BANK NATIONAL ASSOCIATION By: /s/ Robert T. Marley
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Title: V.P. Treasurer
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By:/s/ Dusko Marinovic
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Title: Vice President C&D TECHNOLOGIES (CPS) LLC
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By: /s/ Robert T. Marley
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CITIZENS BANK OF PENNSYLVANIA Title: Treasurer
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By: /s/
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Title:
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GUARANTORS
C&D CHARTER HOLDINGS, INC.
By: /s/ Robert T. Marley
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Title: V.P. Treasurer
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C&D DYNAMO CORP.
By:/s/ Robert T. Marley
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Title: V.P. Treasurer
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DYNAMO ACQUISITION CORP.
By: /s/ Robert T. Marley
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Title: V.P. Treasurer
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C&D INTERNATIONAL INVESTMENT HOLDINGS INC.
By: /s/ Robert T. Marley
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Title: V.P. Treasurer
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DATEL HOLDING CORPORATION
By: /s/ Robert T. Marley
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Title: Treasurer
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SCHEDULE 1.41
Adjustments to EBITDA
Cash Expense directly related to any announced closure of a plant or business
classified as a discontinued operation for restructuring charges incurred
prior to March 31, 2007................................................................ $8,750,000
Severance Costs in fiscal 2006 ........................................................ $2,500,000
Inventory write down in PED related to RoHS which occurred in the quarter ended
October 31, 2005....................................................................... $2,400,000
Inventory write down for the quarter ended January 31, 2006 ........................... $1,000,000
Executive Severance Costs charged to the Power Systems Division and incurred
prior to April 30, 2006................................................................ $ 500,000