Exhibit 10.2
CONSENT, WAIVER AND AMENDMENT NO. 2
TO
LOAN AND SECURITY AGREEMENT
CONSENT, WAIVER AND AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT dated as
of June 14, 2006, (this "Amendment"), 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 Ableco Finance LLC, a Delaware limited liability company, 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.
W I T N E S S E T H :
WHEREAS, Agent, Lenders, Borrowers and Guarantors have entered into
financing arrangements pursuant to which Lenders (or Agent on behalf of Lenders)
have made and may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Loan and Security Agreement,
dated December 7, 2005, by and among Agent, Lenders, Borrowers and Guarantors
(as amended by Amendment No. 1 to Loan and Security Agreement, dated March 30,
2006, by and among Agent, Lenders, Borrowers and Guarantors ("Amendment No. 1")
and as the same may hereafter be further amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement"), and the other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto, including,
but not limited to, this Amendment (all of the foregoing, together with the Loan
Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the "Financing Agreements");
WHEREAS, Borrowers have advised Agent that Danescroft Commercial
Developments Limited 2 ("Purchaser") is negotiating to enter into an Agreement,
by and between C&D Technologies (NCL) Ltd., as seller ("Seller") and Purchaser
(the "Purchase Agreement" and, together with all agreements, documents and
instruments referred to therein or at any time executed and/or delivered in
connection therewith or related thereto, collectively the "Purchase Documents")
pursuant to which Seller will sell to Purchaser all of the right, title and
interest of Seller in the real property located at Milton Keynes, England (the
"Milton Keynes Property"); and
WHEREAS, Borrowers have requested that Agent and Lenders (i) consent to the
sale of the Milton Keynes Property, (ii) waive the Events of Default arising
from the failure of the Borrowers to deliver to the Working Capital Agent a
Mortgage on the Real Property of Datel located in Mansfield, Massachusetts (the
"Mansfield Property") pursuant to the terms of Amendment No. 1, and (iii) make
certain other amendments to the Loan Agreement, and Lenders are willing to
provide such consent and make such amendments, subject to the terms conditions
contained herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Additional Definition. As used herein, the following term shall have the
meaning given to it below and the Loan Agreement shall be deemed and is hereby
amended to include, in addition and not in limitation, the following definition:
"'Milton Keynes Property Proceeds' shall mean the
term "Milton Keynes Property Proceeds" as defined,
together with terms used therein, in the Working
Capital Loan Agreement as in effect on the date
hereof."
2. Amendment of Defined Term.
Section 1.10 of the Loan Agreement is deleted in its entirety and the
following substituted therefor:
"'Availability Block' shall mean $10,000,000 as
increased by the Milton Keynes Property Proceeds;
provided, that, the Availability Block shall be zero
plus the amount of the Milton Keynes Property
Proceeds if as of December 31, 2006 (a) the Leverage
Ratio shall be equal to or less than 3:00:1:00 and
(b) 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 plus the amount of the
Milton Keynes Property Proceeds prior to December 31,
2006."
3. Consent. Subject to the terms and conditions contained herein, Agent and
Lenders hereby consent to the sale by Seller of the Milton Keynes Property to
Purchaser in accordance with the terms and conditions of the Purchase Agreement;
provided, that, each of the following conditions shall be satisfied as
determined by Agent:
(a) all of the Milton Keynes Property Proceeds (which shall in any
event be not less than the US Dollar Equivalent of $275,000) shall be
remitted to Working Capital Agent for application to the outstanding
principal amount of the Working Capital Debt, it being agreed that the
Availability Block shall be increased by the full amount thereof; and
- 2 -
(b) Agent shall have received (i) an executed copy of the Deed by
Seller transferring the Milton Keynes Property to Purchaser duly executed
by the parties thereto, and (ii) an executed copy of the Purchase Agreement
and all other material Purchase Documents, duly executed by the parties
thereto.
4. Waiver of Events of Default.
(a) Subject to the satisfaction of each of the conditions precedent
set forth in Section 4 hereof, Lender hereby waives the Event of Defaults
described on Schedule 1 hereto (collectively, the "Existing Defaults").
(b) Agent and Lenders have not waived, are not by this Amendment
waiving, and have no intention of waiving any Event of Default which may
have occurred on or prior to the date hereof, whether or not continuing on
the date hereof, or which may occur after the date hereof (whether the same
or similar to the Events of Default referred to in Section 4(a) above or
otherwise), other than the Existing Defaults (subject to the terms and
conditions set forth in Section 4(a) above). The foregoing waiver shall not
be construed as a bar to or a waiver of any other or further Event of
Default on any future occasion, whether similar in kind or otherwise and
shall not constitute a waiver, express or implied, of any of the rights and
remedies of Agent and Lenders arising under the terms of the Loan Agreement
or any other Financing Agreements on any future occasion or otherwise,
other than with respect to the Existing Defaults (subject to the terms and
conditions set forth in Section 4(a) above).
5. Representations, Warranties and Covenants. Borrowers and Guarantors
represent, warrant and covenant with and to Agent and Lenders as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof, and the truth and accuracy of, or compliance with
each, together with the representations, warranties and covenants in the other
Financing Agreements, being a continuing condition of the making of Loans by
Lenders (or Agent on behalf of Lenders) to Borrowers:
(a) neither the execution, delivery and performance of this Amendment,
or any other Financing Agreements in connection herewith, nor the
consummation of the transactions herein or therein contemplated, are in
contravention of law 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, or violates any provision of the Certificate of
Incorporation or By-Laws (or similar governing documents) of any Borrower
or Guarantor;
(b) as of the date of this Amendment, no Default or Event of Default
exists or has occurred and is continuing;
(c) Borrowers and Guarantors have delivered to Agent true, correct and
complete copies of the Purchase Agreement and the other material Purchase
Documents, together with all exhibits and schedules thereto, as executed by
the parties thereto;
(d) Borrowers and Guarantors shall cause the Milton Keynes Property
Proceeds to be paid to the Working Capital Agent, for application to the
outstanding principal amount of the Working Capital Debt, no later than
thirty (30) days after the closing on the sale of the Milton Keynes
Property as contemplated by the Purchase Documents;
- 3 -
(e) in the event any Borrower, any Guarantors or any of their
respective affiliates receives any amounts at any time payable to any
Borrower, any Guarantor or any of their respective affiliates pursuant to
the Purchase Documents, such amounts shall be collected by such Borrower,
Guarantor or affiliate, as the case may be, as the property of Working
Capital Agent and held by it or them in trust for Working Capital Agent and
shall be remitted promptly to Working Capital Agent for application in
accordance herewith;
(f) this Amendment, the Purchase Documents and each other agreement or
instrument to be executed and/or delivered by any Borrower or Guarantor in
connection herewith or therewith have been duly authorized, executed and
delivered by all necessary action on the part of such Borrower or Guarantor
which is a party hereto and thereto and, if necessary, its stockholders or
equity holders, as the case may be, and is in full force and effect as of
the date hereof, and the agreements and obligations of each Borrower and
Guarantor contained herein and therein constitute legal, valid and binding
obligations of such Borrower or Guarantor enforceable against it in
accordance with their terms, except as such enforceability may be limited
by bankruptcy, insolvency, moratorium or similar laws limiting creditors'
rights generally and by general equitable principals;
(g) no action of, or filing with, or consent of any Governmental
Authority, and no approval or consent of any other party, is required to
authorize, or is otherwise required in connection with, the execution,
delivery and performance by any Borrower or Guarantor of this Amendment, or
the transactions contemplated hereby; and
(h) At such time as the note given to Sun Life Assurance Company of
Canada which is secured by the Mansfield Property (the "Sun Life Mortgage")
matures or is otherwise satisfied, if (i) Datel grants a mortgage to
another party on the Mansfield Property on terms and conditions acceptable
to Agent and Working Capital Agent, then Datel shall simultaneously grant a
second mortgage thereon to Working Capital Agent and/or Wachovia as
collateral agent for Lenders and Working Capital Lenders or (ii) Datel does
not then grant a mortgage to another party on the Mansfield Property, then
Datel shall, within forty-five (45) days after the release of the Sun Life
Mortgage, deliver to Working Capital Agent and/or Wachovia as collateral
agent for Lenders and Working Capital Lenders a Mortgage and title searches
on the Mansfield Property, together with a legal opinion with respect to
such Mortgage in substantially the same form as previously delivered by
counsel to Borrowers with respect to Real Property located in the
Commonwealth of Pennsylvania.
6. Conditions Precedent. The effectiveness of the consent and amendments
contained herein shall only be effective upon the satisfaction of each of the
following conditions precedent in a manner satisfactory to Agent:
(a) Agent shall have received counterparts of this Amendment, duly
authorized, executed and delivered by Borrowers, Guarantors and Lenders;
(b) Agent shall have received a true and correct copy of any consent,
waiver or approval to or of this Amendment, which any Borrower or Guarantor
is required to obtain from any other Person, and such consent, approval or
waiver shall be in form and substance satisfactory to Agent;
- 4 -
(c) Agent shall have received a true, complete and correct copy of an
amendment to the Working Capital Loan Agreement with respect to the subject
matter hereof, as duly authorized, executed and delivered by the parties
thereto; and
(d) after giving effect to this Amendment no Default or Event of
Default shall exist or have occurred and be continuing.
7. Effect of this Amendment. This Amendment and the instruments and
agreements delivered pursuant hereto constitute the entire agreement of the
parties with respect to the subject matter hereof and thereof, and supersede all
prior oral or written communications, memoranda, proposals, negotiations,
discussions, term sheets and commitments with respect to the subject matter
hereof and thereof. Except as expressly provided herein, no other changes or
modifications or waivers or consents to the Financing Agreements are intended or
implied, and in all other respects the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent that any provision of the Loan Agreement or
any of the other Financing Agreements is inconsistent with the provisions of
this Amendment, the provisions of this Amendment shall control.
8. Further Assurances. Each Borrower and Guarantor shall execute and
deliver such additional documents and take such additional action as may be
requested by Agent or Lenders to effectuate the provisions and purposes of this
Amendment.
9. Governing Law. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with 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 laws of the State of New York.
10. Binding Effect. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
11. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto. Delivery of an executed counterpart of this Amendment by
telecopier or other method of electronic transmission shall have the same force
and effect as delivery of an original executed counterpart of this Amendment.
Any party delivering an executed counterpart of this Amendment by telecopier or
other method of electronic transmission also shall deliver an original executed
counterpart of this Amendment, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment as to such party or any other party.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 5 -
Schedule 1
to
Consent, Waiver and Amendment No. 2 to Loan and Security Agreement
1. Event of Default under Section 10.1(a)(iii) of the Loan Agreement as a
result of the failure by borrowers to observe their covenant set forth
in Amendment No. 1 to deliver not later than forty-five (45) days
after on the date thereof, a Mortgage with respect to certain Real
Property of Datel located in Mansfield, Massachusetts.
2. Event of Default under Section 10.1(i) of the Loan Agreement as a
result of the default under the Working Capital Loan Agreement
resulting from the failure to deliver the Mortgage referred to in
paragraph 1., above.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the day and year
first above written.
AGENT AND LENDER BORROWERS
ABLECO FINANCE LLC, C&D TECHNOLOGIES, INC.
on behalf of itself and its Affiliate assigns
By: /s/ Robert T. Marley
By: /s/ Daniel E. Wolf -----------------------------
------------------------------------
Title: V.P. TREASURER
Title: Senior Vice President --------------------------
---------------------------------
C&D TECHNOLOGIES (DATEL), INC.
LENDERS By: /s/ Robert T. Marley
-----------------------------
LBC CREDIT PARTNERS, L.P.
Title: V.P. TREASURER
By: /s/ C.J. Calabrese --------------------------
------------------------------------
Title: Executive Vice President C&D TECHNOLOGIES (CPS) LLC
---------------------------------
By: /s/ Robert T. Marley
-----------------------------
LBC CREDIT PARTNERS PARALLEL, L.P.
Title: V.P. TREASURER
By: /s/ C.J. Calabrese --------------------------
------------------------------------
Title: Executive Vice President
---------------------------------
FORTRESS CREDIT OPPORTUNITIES I LP
By: Fortress Credit Opportunities I GP LLC,
its general partner
By: /s/ Constantine Dakolias
------------------------------------
Title: Chief Credit Officer
---------------------------------
GUARANTORS
C&D CHARTER HOLDINGS, INC.
By: /s/ Robert T. Marley
----------------------------------------
Title: V.P. TREASURER
-------------------------------------
C&D DYNAMO CORP.
By: /s/ Robert T. Marley
----------------------------------------
Title: V.P. TREASURER
-------------------------------------
DYNAMO ACQUISITION CORP.
By: /s/ Robert T. Marley
----------------------------------------
Title: V.P. TREASURER
-------------------------------------
C&D INTERNATIONAL INVESTMENT HOLDINGS INC.
By: /s/ Robert T. Marley
----------------------------------------
Title: V.P. TREASURER
-------------------------------------
DATEL HOLDING CORPORATION
By: /s/ Robert T. Marley
----------------------------------------
Title: TREASURER
-------------------------------------