A123 Systems Inc. in a regulatory filing said it recently entered into a consent and waiver agreement with Wanxiang America Corp., the agent and lender under its $75 million loan agreement.
Under the first loan consent and waiver agreement, the lender waived the event of default that would result from the failure by the company to pay an interest of about $2.7 million due on October 15 with respect to the 3.75% convertible subordinated notes due 2016 issued by the company in the aggregate principal amounts of $143.750 million until the end of the 30-day grace period under the 2016 Notes.
Further, the company said it entered into a second consent and waiver agreement with the lender. Under this, the lender waived the event of default that would result if the company failed to make any payment of principal and interest in respect of its 6% Senior Convertible Notes issued by the company on May 24, 2012 on the 1st and 15th day of each calendar month, any other default under the 6% Notes, or any failure by the company to redeem the 6% Notes pursuant to an "event of default redemption notice" under the 6% Notes during the period of time until November 15, 2012.
The agreement also stipulates that unless the company makes all of the 6% P&I Payments that are due through November 15, 2012 and otherwise cures all defaults under the 6% Notes on or prior to November 15, 2012, an event of default under the loan agreement would occur immediately.
Waltham, Massachusetts-based A123 Systems Inc. makes rechargeable lithium-ion batteries and energy storage systems.
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