SIXTH AMENDMENT
TO FINANCING AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT (this "Amendment")
is made as of this 16th day of April, 1997, by and among CHARTER POWER SYSTEMS,
INC., a corporation organized and existing under the laws of the State of
Delaware ("Charter Power"), C&D CHARTER POWER SYSTEMS, INC., a corporation
organized and existing under the laws of the State of Delaware ("C&D Charter"),
INTERNATIONAL POWER SYSTEMS, INC., a corporation organized and existing under
the laws of the State of Arizona ("International"), RATELCO ELECTRONICS, INC., a
corporation organized and existing under the laws of the State of Delaware
("Ratelco"), C&D/CHARTER HOLDINGS, INC., a corporation organized and existing
under the laws of the State of Delaware ("Charter Holdings"), CHARTER POWER OF
CALIFORNIA, a corporation organized and existing under the laws of the State of
California ("Charter California"), POWER CONVERTIBLES CORPORATION, a corporation
organized and existing under the laws of the State of Arizona ("PCC"), PCC DE
MEXICO S.A. DE C.V. ("PCC Mexico"), POWER CONVERTIBLES IRELAND LIMITED ("PCC
Ireland") and LH RESEARCH, INCORPORATED, a corporation organized and existing
under the laws of the State of Delaware ("LH Research") (Charter Power, C&D
Charter, International, Ratelco, Charter Holdings and Charter California, PCC,
PCC Mexico, PCC Ireland and LH Research are herein collectively referred to as
the "Borrowers" and individually as a "Borrower"); NATIONSBANK, N.A., a national
banking association, in its capacity as a lender ("NationsBank"), FLEET BANK,
NATIONAL ASSOCIATION, a national banking association and successor in interest
to NatWest Bank N.A., being formerly known as National Westminster Bank NJ
("Fleet"), CORESTATES BANK, N.A., a national banking association ("CoreStates")
(NationsBank, CoreStates, and Fleet are herein collectively referred to as the
"Lenders" and individually, as a "Lender"); and NATIONSBANK, N.A., a national
banking association, in its capacity as agent for the Lenders (the "Agent");
Witnesseth:
RECITALS
A. The Lenders, the Borrowers and the Agent are parties to that certain
Financing and Security Agreement dated September 26, 1994 (as amended, restated,
supplemented or otherwise modified, the "Credit Agreement"). Under and subject
to the provisions of the Credit Agreement, the Lenders agreed to establish
jointly and severally in favor of the Borrowers (i) a revolving credit facility
in a maximum principal amount not to exceed SIXTY-FIVE MILLION DOLLARS
($65,000,000) (the "Total Revolving Credit Committed Amount"), (ii) a term loan
facility (collectively, the "Term Loans") in an original principal amount not to
exceed FIFTEEN MILLION DOLLARS ($15,000,000) (the "Total Term Loan Committed
Amount") and (iii) a letter of credit facility as part of the Revolving Credit
Facility (the "Letter of Credit Facility") in a maximum principal amount not to
exceed EIGHT MILLION DOLLARS ($8,000,000) (the "Letter of Credit Committed
Amount").
B. The Borrowers have requested that the Lenders and the Agent agree to
amend certain terms and conditions of the Credit Agreement, and subject to the
provisions of this Amendment, the Lenders and the Agent have so agreed;
provided, that the Borrowers execute and deliver this Amendment.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrowers, the Lenders and the Agent hereby agree as follows:
1. The recitals set forth above are true and accurate in each and every
respect and are incorporated herein by reference. All capitalized terms used
herein but not specifically defined herein shall have the respective meanings
given such terms in the Credit Agreement, unless the context indicates or
dictates a contrary meaning.
2. The Credit Agreement is hereby amended as follows:
a. Section 2.1.11 of the Credit Agreement (as added by the Second
Amendment to Financing and Security Agreement dated January 26, 1996)
is hereby deleted in its entirety and the following is substituted in
its place:
2.1.11 Conversion of Revolving Loan Advances for Stock Purchases;
Mandatory Reductions in Total Revolving Credit Facility. The Borrowers
jointly and severally covenant and agree that if at any time the
aggregate principal amount of Revolving Loan advances used to purchase
Stock at any time and from time to time equals or exceeds Fifteen
Million Dollars ($15,000,000) and such aggregate principal amount
(each a "Stock Purchase Advance") has not yet been converted to a
Converted Stock Loan in accordance with the provisions of this Section
2.1.11, that portion of the Stock Purchase Advance in excess of Seven
Million Dollars ($7,000,000) shall be converted into a term loan
having a maturity date which is three (3) years after the effective
date of the conversion (each referred to herein as a "Converted Stock
Loan"); provided that (i) all Stock purchased with the proceeds of
such Stock Purchase Advance shall have been purchased by Charter Power
in accordance with the provisions of Section 6.2.4 of this Agreement,
(ii) there shall not exist a Default or an Event of Default under this
Agreement as of the effective date of such conversion, and (iii) the
Borrowers shall have executed and delivered to the Agent a series of
promissory notes (as from time to time extended, amended, restated,
supplemented or otherwise modified, the "Converted Stock Notes" and
individually a "Converted Stock Note") substantially in the form of
Exhibit A-3 attached to and made a part of this Agreement, with
appropriate insertions and such other documents as the Agent and/or
any of the Lenders may reasonably require to confirm the validity of
the Obligations, as converted, and any Liens and security interests.
Each Lender's Converted Stock Note shall be dated as of the date the
Stock Purchase Advance, in part evidenced by such Converted Stock
Note, equals or exceeds Fifteen Million Dollars ($15,000,000), shall
be payable to the order of such Lender at the times provided in the
Converted Stock Note, and shall be in the principal amount of such
Lender's Proportionate Share of that portion of the respective Stock
Purchase Advance exceeding Seven Million Dollars ($7,000,000). If as
of the effective date of any proposed conversion the Borrowers would
not be entitled to convert any Stock Purchase Advance to a Converted
Stock Loan, such Stock Purchase Advance, together with any unpaid and
accrued interest thereon, shall be payable jointly and severally by
the Borrowers ON DEMAND.
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The unpaid principal balance of each Converted Stock Loan shall
bear interest at a floating and fluctuating rate of interest equal to
the Interest Rate or Interest Rates then available for the Converted
Term Loan, as selected by the Borrowers in accordance with the pro-
visions of Section 2.4. The unpaid principal balance of each Converted
Stock Loan, together with unpaid and accrued interest thereon, shall
be due and payable in consecutive quarterly installments on the first
day of each quarterly period commencing with the first such date
following the effective date of the Converted Stock Loan; the
principal amount of each such quarterly installment shall be
sufficient to fully amortize the principal balance of the Converted
Stock Loan in approximately equal quarterly principal installments by
the maturity date of such Converted Stock Loan.
Subject to the terms of Section 2.4.5 of the Credit Agreement,
the Borrowers may, at their option, at any time and from time to time,
prepay, the Converted Stock Loans, in whole or in part, upon at least
five (5) Business Days prior written notice to the Agent, specifying
the date and amount of the proposed prepayment. Subject to the terms
of Section 2.4.5 of the Credit Agreement, each Converted Stock Note
may be prepaid, in whole or in part, without premium or penalty. The
amount to be prepaid, together with unpaid and accrued interest
thereon through the date of prepayment if the prepayment is intended
to prepay the Converted Stock Loans in whole, shall be paid by the
Borrowers to the Agent for the ratable benefit of the Lenders on the
date specified for such prepayment. Partial prepayments shall be in an
amount not less than Two Hundred Thousand Dollars ($200,000) and shall
be applied first to all unpaid and accrued late charges, second to any
unpaid and outstanding Enforcement Costs, third to any billed and
unpaid interest on the Converted Stock Loans, and then to principal
against the principal installments in the inverse order of their
maturities.
The Total Revolving Credit Committed Amount shall be
automatically and permanently reduced by the principal amount of each
Converted Stock Loan as of the effective date of such Converted Stock
Loan. If, after giving effect to any such reduction in the Total
Revolving Credit Committed Amount, the then outstanding principal
amount of the Revolving Loan exceeds the Total Revolving Credit
Committed Amount as so reduced, the Borrowers jointly and severally
shall contemporaneously with such reduction (a) make a mandatory
prepayment of the Revolving Loan in the amount of such excess, and (b)
pay to the Agent for the ratable benefit of the Lenders an amount
equal to unpaid interest on the amount of such excess and the pro rata
portion of the Revolving Credit Unused Line Fee accrued to the date of
such mandatory prepayment. After each such reduction, the Revolving
Credit Unused Line Fee shall be calculated with respect to the Total
Revolving Credit Committed Amount as so reduced.
For purposes of this Agreement, all Stock purchases shall be
deemed to have been financed with the proceeds of the Revolving Loan,
regardless of the actual source of funds for the purchase.
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b. Section 6.2.7 on page 111 of the Credit Agreement is hereby amended to
permit a one-time only increase in the maximum amount of permitted Capital
Expenditures to Twenty Million Dollars ($20,000,000) for the fiscal year ending
January 31, 1998. Any unused portion of this increase above the Eight Million
Dollars ($8,000,000) currently permitted for Capital Expenditures for such
fiscal year, shall not be added to or constitute a part of the Carry Forward
Amount allowed under Section 6.2.7. For all fiscal years ending after January
31, 1998, the Capital Expenditure Ceiling shall remain equal to the amounts
currently permitted under Section 6.2.7.
3. The terms, conditions and provisions of this Amendment shall not be
effective until each of the following conditions precedent have been satisfied
fully to the extent and in the manner required by the Agent: (i) the Borrowers,
the Agent and the Lenders execute and deliver this Amendment, (ii) the Borrowers
furnish to the Agent (1) the original stock certificates issued by LH Research
to C&D Charter, together with fully executed, irrevocable blank stock powers for
all such stock certificates and (2) an opinion of counsel from the Borrowers'
counsel and satisfactory to the Agent and its counsel, required in connection
with the execution and delivery of the Third Amendment to Financing and Security
Agreement dated March 13, 1996, and (iii) the Borrowers shall have reimbursed
the Agent for all fees and expenses reasonably incurred by the Agent in
connection with the transactions contemplated by this Amendment (including,
without limitation, attorneys' fees and expenses).
4. The terms "this Agreement" as used in the Credit Agreement and the terms
"Credit Agreement" as used in any of the Financing Documents shall mean the
Credit Agreement as modified herein unless the context clearly indicates or
dictates a contrary meaning.
5. The Borrowers will execute such confirmatory instruments with respect to
the Credit Agreement and/or any of the Financing Documents as the Agent may
reasonably require.
6. The Borrowers ratify and confirm all of their respective liabilities and
obligations under the Credit Agreement and agree that, except as expressly
modified in this Amendment, the Credit Agreement continues in full force and
effect as if set forth specifically herein. The Borrowers, the Agent and the
Lenders agree that this Amendment shall not be construed as an agreement to
extinguish the original obligations under the Credit Agreement and shall not
constitute a novation as to any of the joint and several obligations of the
Borrowers under the Credit Agreement.
7. This Amendment may not be amended, changed, modified, altered or
terminated without in each instance the prior written consent of the Agent, the
Lenders and the Borrowers. This Amendment shall be construed in accordance with,
and governed by, the laws of the State of Maryland.
8. The Borrowers agree that neither the execution and delivery of this
Amendment nor any of the terms, provisions, covenants, or agreements contained
in this Amendment shall in any manner release, impair, lessen, waive, or
otherwise adversely affect the joint and several liability and obligations of
the Borrowers under the terms of the Credit Agreement.
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9. This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and all taken together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the Borrowers, the Agent and the Lenders have caused
this Amendment to be executed under seal as of the date first above written.
ATTEST: CHARTER POWER SYSTEMS, INC.
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
ATTEST: C&D CHARTER POWER SYSTEMS, INC.
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
ATTEST: INTERNATIONAL POWER SYSTEMS, INC.
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
ATTEST: RATELCO ELECTRONICS, INC.
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
ATTEST: C&D/CHARTER HOLDINGS, INC.
/s/ Kerry M.Kane By: /s/ Robert Marley (Seal)
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Name: Kerry Kane Name: Robert T. Marley
Title: President Title: Vice President
ATTEST: CHARTER POWER OF CALIFORNIA
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
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ATTEST: POWER CONVERTIBLES CORPORATION
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
ATTEST: PCC DE MEXICO S.A. DE C.V.
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
ATTEST: POWER CONVERTIBLES IRELAND LIMITED
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
ATTEST: LH RESEARCH, INCORPORATED
/s/ Robert Marley By: /s/ Stephen E. Markert, Jr. (Seal)
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Name: Name:
Title: Treasurer Title: Vice President
WITNESS: NATIONSBANK, N.A.
in its capacity as Agent
/s/ Stacy L. Denson By: /s/ Patrick M. Moore (Seal)
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Stacy L. Denson Name: Patrick M. Moore
Title: Vice President
WITNESS: NATIONSBANK, N.A.
in its capacity as a Lender
/s/ Stacy L. Denson By: /s/ Patrick M. Moore (Seal)
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Stacy L. Denson Name: Patrick M. Moore
Title: Vice President
WITNEESS: CORESTATES BANK, N.A.
in its capacity as a Lender
/s/ By: /s/ Karl F. Schultz (Seal)
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Name: Karl F. Schultz
Title: Vice President
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WITNESS: FLEET BANK, NATIONAL ASSOCIATION
(formerly known as NatWest Bank N.A.)
in its capacity as a Lender
/s/ Shary Seaburg By: /s/ G. Steven Kalin (Seal)
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Shary Seaburg Name: G. Steven Kalin
Title:
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