WAIVER AND AMENDMENT
TO
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS AMENDMENT ("Amendment") is entered into as of April __, 1998, by and
among Batteries Batteries, Inc. ("BATS"), Xxxxxx Electronics, Inc. ("TEI"),
Advanced Fox Antenna, Inc. ("AFA"), Specific Energy Corporation ("SEC"), W.S.
Battery & Sales Company, Inc. ("WSBS"), Battery Network, Inc. ("BN"), Battery
Acquisition Corp. ("BAC"), Cliffco of Tampa Bay, Inc. ("CTB") (BATS, TEI, AFA,
SEC, WSBS, BN, BAC and CTB, each a "Borrower" and collectively the
"Borrowers"), IBJ Xxxxxxxx Business Credit Corporation (successor to IBJ
Xxxxxxxx Bank & Trust Company) ("IBJS"), each of the other financial
institutions named in the Loan Agreement or which hereafter become parties
thereto (IBJS and such financial institutions, the "Lenders") and IBJS as agent
for the Lenders (IBJS in such capacity, the "Agent").
BACKGROUND
Borrowers, Agent and Lenders are parties to a Revolving Credit, Term Loan
and Security Agreement dated as of January 7, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement") pursuant to which
Lenders provide Borrowers with certain financial accommodations.
Borrowers have requested that Agent and Lenders (i) waive certain Events
of Default and (ii) amend certain provisions of the Loan Agreement, and Agent
and Lenders are willing to do so on the terms and conditions hereafter set
forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrowers by Agent and
Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the conditions
precedent set forth in Section 4 below, the Loan Agreement is hereby amended as
follows:
2.1. Subsection (b) of Section 6.5 is amended by adding the following
proviso at that end thereof:
"provided, further, that, for the period commencing on
October 1, 1997 and ending on March 31, 1998 this covenant
shall not be deemed to be breached unless BATS on a
consolidated basis shall have incurred a net loss in an
amount in excess of $175,000 for the fiscal quarter ending
March 31, 1998;"
2.2. Section 6.7 is amended in its entirety to provide as follows:
"6.7 Fixed Charge Coverage Ratio. (a) Maintain as of the end of each
fiscal period set forth below a Fixed Charge Coverage Ratio of not less than
the ratio set opposite such fiscal period below
Fiscal Period Fixed Charge Coverage Ratio
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April 1, 1997 - March 31, 1998 .40 to 1.0
July 1, 1997 - June 30, 1998 .35 to 1.0
October 1, 1997 - September 30, 1998 .65 to 1.0
January 1, 1998 - December 31, 1998 1.20 to 1.0
April 1, 1998 - March 31, 1999 1.20 to 1.0
July 1, 1998 - June 30, 1999 1.20 to 1.0
October 1, 1998 - December 31, 1999 1.20 to 1.0
(b) Maintain as of the end of each fiscal quarter set forth below
a Fixed Charge Coverage Ratio of not less than the ratio set
opposite such fiscal quarter below:
Fiscal Quarter Fixed Charge Coverage Ratio
-------------- ---------------------------
January 1, 1998 - March 31, 1998 (.25 to 1.00)
April 1, 1998 - June 30, 1998 .75 to 1.00
July 1, 1998 - September 30, 1998 2.00 to 1.00
October 1, 1998 - December 31, 1998 2.00 to 1.00
2.3. Section 6.8 is amended by deleting the schedule set forth therein and
replacing it with the following:
Fiscal Period EBITDA
------------- ------
April 1, 1997 - March 31, 1998 $1,700,000
July 1, 1997 - June 30, 1998 $1,450,000
October 1, 1997 - September 30, 1998 $2,100,000
January 1, 1998 - December 31, 1998 $3,300,000
April 1, 1998 - March 31, 1999 $4,000,000
July 1, 1998 - June 30, 1999 $4,000,000
October 1, 1998 - December 31, 1999 $4,000,000
2.4. Section 7.10 is amended in its entirety to provide as follows:
"7.10 Transactions with Affiliates. Directly or indirectly purchase,
acquire or lease any property from, or sell, transfer or lease any
property to, or otherwise deal with, any Affiliate, except (a)
transactions disclosed in the ordinary course of business, on an arm's
length basis on terms no less favorable than terms which
would have been obtainable from a Person other than an Affiliate; (b) the
Management Agreement; (c) the Affiliated Leases; and (d) payments to Xxxxx
Xxxx for fees due to him in connection with his services as Director and
President of AFA; provided, however, no payments shall be made (i) under
the Management Agreement or (ii) to Xxxxx Xxxx, until (x) Agent shall have
received copies of the annual financial statements required to be
delivered pursuant to Section 9.7 hereof of BATS on a consolidated basis
for the fiscal year ending December 31, 1998 indicating (I) no Event of
Default has occurred and is then continuing and (II) a Fixed Charge
Coverage Ratio of at least 1.2 to 1.0 for such Fiscal Year and (y) after
giving effect to (I) the prepayment required pursuant to Section 2.14(b)
hereof and (II) any such payment under the Management Agreement and to
Xxxxx Xxxx, there shall be Undrawn Availability of not less than $700,000,
provided, further, that, Borrowers may pay interest to Xxxxx Xxxx on the
deferred amount at a rate per annum to be determined by Borrowers, but in
any event not more than 10% per annum."
3. Waiver. Subject to satisfaction of the conditions precedent set forth
in Section 4 below, Lender hereby waives the Event of Default that has occurred
as a result of Borrower's non-compliance with Section 6.8 of the Loan
Agreement, to the extent that such Event of Default arose solely as a result of
Borrower's failure to maintain EBITDA of at least $2,850,000 for fiscal period
January 1, 1997 through December 31, 1997.
4. Conditions of Effectiveness. This Amendment shall become effective,
when and only when (a) Lender shall have received an original copy of this
Amendment duly executed by Borrower and (b) Lender shall receive a fee in the
amount of $30,000 which may be charged to Borrowers' loan account on the
effective date of this Amendment.
5. Representations and Warranties. Each Borrower hereby represents and
warrants as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of each Borrower and are
enforceable against each Borrower in accordance with their respective
terms.
(b) Upon the effectiveness of this Amendment, each Borrower hereby
reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that all
such covenants, representations and warranties shall be deemed to have
been remade as of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is continuing or
would exist after giving effect to this Amendment.
(d) No Borrower has any defense, counterclaim or offset with respect
to the Loan Agreement.
6. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference in the
Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Loan Agreement
as amended hereby.
(b) Except as specifically amended herein, the Loan Agreement, and
all other documents, instruments and agreements executed and/or delivered
in connection therewith, shall remain in full force and effect, and are
hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided in Section 3, operate as a waiver of any
right, power or remedy of Lender, nor constitute a waiver of any provision
of the Loan Agreement, or any other documents, instruments or agreements
executed and/or delivered under or in connection therewith.
7. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
8. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. Counterparts. This Amendment may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all of
which taken together shall be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.
BATTERIES BATTERIES, INC.
XXXXXX ELECTRONICS, INC.
ADVANCED FOX ANTENNA, INC.
SPECIFIC ENERGY CORPORATION
BATTERY NETWORK, INC.
W.S. BATTERY & SALES COMPANY, INC.
BATTERY ACQUISITION CORP.
CLIFFCO OF TAMPA BAY, INC.
By:
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Name:
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The of each of the foregoing
Corporations
IBJ XXXXXXXX BUSINESS CREDIT CORPORATION,
as Agent and as Lender
By:
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Name:
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Title:
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