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Exhibit 10.4
SECOND AMENDMENT AGREEMENT
This Second Amendment Agreement is effective as of the 18th day of
August, 1999, by and among ADVANCED LIGHTING TECHNOLOGIES, INC., an Ohio
corporation ("U.S. Borrower"), VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA
INC. (f.k.a. Ballastronix Incorporated), a corporation organized under the laws
of the Province of Nova Scotia, CANADIAN LIGHTING SYSTEMS HOLDING, INCORPORATED,
a corporation organized under the laws of the Province of Nova Scotia
(collectively, "Canadian Borrowers" and, individually, "Canadian Borrower"),
PARRY POWER SYSTEMS LIMITED (Company No. 2833448, f.k.a. Venture Lighting Europe
Ltd.), incorporated under the laws of England, VENTURE LIGHTING EUROPE LTD.
(Company No. 3341889, f.k.a. Parry Power Systems Limited), incorporated under
the laws of England (collectively, "UK Borrowers" and, individually, "UK
Borrower"; and together with U.S. Borrower and Canadian Borrowers, collectively,
"Borrowers" and, individually, "Borrower"), the banking institutions listed on
Schedule 1 to the Credit Agreement, as hereinafter defined ("Banks"), and PNC
BANK, NATIONAL ASSOCIATION, as agent for the Banks ("Agent"):
WHEREAS, Borrowers, Agent and the Banks are parties to a certain Credit
Agreement dated as of May 21, 1999, as amended, that provides, among other
things, for loans aggregating Seventy- Five Million Dollars ($75,000,000), all
upon certain terms and conditions stated therein ("Credit Agreement");
WHEREAS, Borrowers, Agent and the Banks desire to amend the Credit
Agreement to reduce the amount of the credit facility and to add and modify
certain provisions thereof; and
WHEREAS, each term used herein shall be defined in accordance with the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other valuable considerations, Borrowers,
Agent and the Banks hereby agree as follows:
1. Article I of the Credit Agreement is hereby amended to delete the
definitions of "Applicable Margin", "Canadian Revolving Credit Commitment",
"Commitment Percentage", "Equity Event", "Maximum Amount", "Maximum Revolving
Credit Commitment Amount", "Maximum Term Loan Commitment Amount", "Revolving
Credit Commitment", "Term Loan Commitment" and "Total Commitment Amount" in
their entirety and to insert in place thereof the following:
"Applicable Margin" shall mean:
(a) for the period from the Closing Date through August 17,
1999, (i) two hundred fifty (250) basis points for Revolving Loans, and
(ii) three hundred (300) basis points for the Term Loan;
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(b) for the period from August 18, 1999 until the day that the
Fixed Charge Coverage Ratio equals or exceeds 1.00 to 1.00 for the most
recently completed four (4) fiscal quarters, (i) two hundred
seventy-five (275) basis points for Revolving Loans, and (ii) three
hundred twenty-five (325) basis points for the Term Loan; and
(c) commencing on the day that the Fixed Charge Coverage Ratio
equals or exceeds 1.00 to 1.00 for the most recently completed four (4)
fiscal quarters and thereafter, (i) two hundred twenty-five (225) basis
points for Revolving Loans, and (ii) two hundred seventy-five (275)
basis points for the Term Loan.
"Canadian Revolving Credit Commitment" shall mean the
obligation hereunder of the Canadian Bank to make Canadian Revolving
Loans and to participate in the issuance of Canadian Letters of Credit
up to an aggregate principal amount outstanding at any time equal to
the lesser of (a) (i) from the Closing Date through September 29, 1999,
Six Million Dollars ($6,000,000), and (ii) on September 30, 1999 and
thereafter, Four Million Dollars ($4,000,000), or (b) the Canadian
Borrowing Base (or such lesser amount as shall be determined pursuant
to Section 2.8 hereof).
"Commitment Percentage" shall mean, for each Bank, the
percentage set forth opposite such Bank's name under the applicable
column headed "Commitment Percentage" as set forth in SCHEDULE 1
hereto.
"Equity Event" shall mean the occurrence of both of the
following events: (a) U.S. Borrower shall have received the General
Electric Equity, and (b) the proceeds of the General Electric Equity
shall have been applied to the repayment of the Debt pursuant to
Section 2.10 hereof.
"Maximum Amount" shall mean, for each Bank, the amount set
forth opposite such Bank's name under the applicable column headed
"Maximum Amount" as listed on SCHEDULE 1 hereto.
"Maximum Revolving Credit Commitment Amount" shall mean (a)
from the Closing Date through September 29, 1999, Fifty Million Dollars
($50,000,000), (b) from September 30, 1999 through the day before the
Equity Date, Thirty Five Million Dollars ($35,000,000), and (c) on the
Equity Date and thereafter, Forty Million Dollars ($40,000,000); or
such lesser amounts as shall be determined pursuant to Section 2.8
hereof.
"Maximum Term Loan Commitment Amount" shall mean (a) from the
Closing Date through the day before the Equity Date, Twenty Five
Million Dollars ($25,000,000), and (b) on the Equity Date and
thereafter, Twenty Million Dollars ($20,000,000).
"Revolving Credit Commitment" shall mean the obligation
hereunder, during the applicable Commitment Period (but, with respect
to the Canadian Revolving Credit
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Commitment, subject to the provisions of Section 2.11 hereof), of (a)
each Bank to participate in the making of U.S. Revolving Loans pursuant
to the U.S. Revolving Credit Commitment up to an aggregate amount set
forth opposite such Bank's name under the applicable column headed
"Revolving Commitment Amount" as set forth on SCHEDULE 1 hereto, (b)
each Canadian Bank to participate in the making of Canadian Revolving
Loans and the issuance of Canadian Letters of Credit pursuant to the
Canadian Revolving Credit Commitment up to an aggregate amount set
forth opposite such Canadian Bank's name under the applicable column
headed "Canadian Revolving Credit Commitment Amount" as set forth on
SCHEDULE 1 hereto, (c) each Bank to participate in the making of UK
Revolving Loans and the issuance of UK Letters of Credit pursuant to
the UK Revolving Credit Commitment up to an aggregate amount set forth
opposite such Bank's name under the applicable column headed "UK
Revolving Credit Commitment Amount" as set forth on SCHEDULE 1 hereto,
and (d) each Bank to participate in the issuance of U.S. Letters of
Credit pursuant to the U.S. Letter of Credit Commitment
"Term Loan Commitment" shall mean the obligation hereunder of
each Bank to participate in the making of the Term Loan, up to the
amount set forth opposite such Bank's name under the applicable column
headed "Term Loan Commitment Amount" as set forth on SCHEDULE 1 hereto.
"Total Commitment Amount" shall mean (a) from the Closing Date
through September 29, 1999, Seventy Five Million Dollars ($75,000,000),
and (b) on September 30, 1999 and thereafter, Sixty Million Dollars
($60,000,000); or such lesser amounts as shall be determined pursuant
to Section 2.8 hereof.
2. Article I of the Credit Agreement is hereby amended to add the
following new definition thereto:
"Equity Date" shall mean the date on which the Equity Event
occurs.
3. The Credit Agreement is hereby amended to delete Section 5.7(b)
therefrom in its entirety and to insert in place thereof the following:
(b) The Total Unused Credit Availability shall be at least
(i) Ten Million Dollars ($10,000,000) at all times from the Closing
Date through September 29, 1999, and (ii) Fifteen Million Dollars
($15,000,000) on September 30, 1999 and thereafter; provided, however,
that the requirements of this Section 5.7(b) shall terminate at such
time as the Fixed Charge Coverage Ratio equals or exceeds 1.00 to 1.00
for the most recently completed four (4) fiscal quarters.
4. The Credit Agreement is hereby amended to delete Section 5.11(viii)
therefrom in its entirety.
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5. With the exception of the "Commitment Percentage" definition set
forth in Article I of the Credit Agreement, the Credit Agreement is hereby
amended to add the word "applicable" in front of the words "Commitment
Percentage" wherever "Commitment Percentage" appears.
6. The Credit Agreement is hereby amended to delete Schedule 1 thereto
in its entirety and to insert in place thereof a new Schedule 1 in the form of
Schedule 1 attached hereto.
7. Borrowers, Agent and the Banks hereby agree that:
(a) if the Equity Event shall not have occurred on or before
September 30, 1999, U.S. Borrower shall execute and deliver to Agent for
delivery to the Banks on or before September 30, 1999, new Revolving Credit
Notes dated as of September 30, 1999, and such Revolving Credit Notes shall be
in the form and substance of Exhibit A to the Credit Agreement, reflecting the
respective change, as of September 30, 1999, in the Revolving Credit Commitment
of each Bank; provided, however, that, upon each Bank's receipt of a new
Revolving Credit Note from U.S. Borrower, such Bank shall ▇▇▇▇ its Revolving
Credit Note being replaced thereby "Replaced" and return the same to Agent for
delivery to U.S. Borrower;
(b) Canadian Borrowers shall execute and deliver to Agent for
delivery to the Banks on or before September 30, 1999, new Canadian Revolving
Credit Notes dated as of September 30, 1999, and such Canadian Revolving Credit
Notes shall be in the form and substance of Exhibit C to the Credit Agreement,
reflecting the respective change, as of September 30, 1999, in the Canadian
Revolving Credit Commitment of each Bank; provided, however, that, upon each
Bank's receipt of a new Canadian Revolving Credit Note from Canadian Borrowers,
such Bank shall ▇▇▇▇ its Canadian Revolving Credit Note being replaced thereby
"Replaced" and return the same to Agent for delivery to Canadian Borrowers; and
(c) on or immediately after the Equity Date, Borrowers shall
execute and deliver to Agent for delivery to the Banks new Revolving Credit
Notes and new Term Notes, in the form and substance of Exhibit A and Exhibit D,
respectively, to the Credit Agreement, each reflecting the respective change, as
of the Equity Date, in the Revolving Credit Commitment and the Term Loan
Commitment.
8. Concurrently with the execution of this Second Amendment Agreement:
(a) Borrowers shall pay to Agent, for the pro rata benefit of
the Banks, an amendment fee of One Hundred Thousand Dollars ($100,000);
(b) Borrowers shall cause each Guarantor of Payment to
consent and agree to and acknowledge the terms of this Second Amendment
Agreement;
(c) Borrowers shall deliver such other documents as may
reasonably be required by Agent in connection with this Second Amendment
Agreement; and
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(d) Borrowers shall pay all legal fees and expenses of Agent
in connection with this Second Amendment Agreement.
9. Borrowers hereby represent and warrant to Agent and the Banks that
(a) each Borrower has the legal power and authority to execute and deliver this
Second Amendment Agreement; (b) the officers executing this Second Amendment
Agreement have been duly authorized to execute and deliver the same and bind
such Borrower with respect to the provisions hereof; (c) the execution and
delivery hereof by Borrowers and the performance and observance by Borrowers of
the provisions hereof do not violate or conflict with the organizational
agreements of any Borrower or any law applicable to any Borrower or result in a
breach of any provision of or constitute a default under any other agreement,
instrument or document binding upon or enforceable against any Borrower; (d) no
Unmatured Event of Default or Event of Default exists under the Credit
Agreement, nor will any occur immediately after the execution and delivery of
this Second Amendment Agreement or by the performance or observance of any
provision hereof; (e) neither Borrower nor any Guarantor of Payment is aware of
any claim or offset against, or defense or counterclaim to, any of Borrowers' or
any Guarantor of Payment's obligations or liabilities under the Credit Agreement
or any Related Writing; and (f) this Second Amendment Agreement constitutes a
valid and binding obligation of each Borrower in every respect, enforceable in
accordance with its terms.
10. Each reference that is made in the Credit Agreement or any other
writing to the Credit Agreement shall hereafter be construed as a reference to
the Credit Agreement as amended hereby. Except as herein otherwise specifically
provided, all provisions of the Credit Agreement shall remain in full force and
effect and be unaffected hereby. This Second Amendment Agreement is a Related
Writing as defined in the Credit Agreement.
11. Each Borrower and each Guarantor of Payment, by signing below,
hereby waives and releases Agent and each of the Banks and their respective
directors, officers, employees, attorneys, affiliates and subsidiaries from any
and all claims, offsets, defenses and counterclaims of which any Borrower and
any Guarantor of Payment is aware, such waiver and release being with full
knowledge and understanding of the circumstances and effect thereof and after
having consulted legal counsel with respect thereto.
12. This Second Amendment Agreement may be executed in any number of
counterparts, by different parties hereto in separate counterparts and by
facsimile signature, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
13. The rights and obligations of all parties hereto shall be governed
by the laws of the State of Ohio, without regard to principles of conflicts of
laws.
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14. JURY TRIAL WAIVER. BORROWERS, AGENT AND EACH OF THE BANKS WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG ANY BORROWER, AGENT AND THE BANKS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT
IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY AGENT'S OR ANY BANK'S ABILITY
TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION
CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG
BORROWERS, AGENT AND THE BANKS, OR ANY THEREOF.
ADVANCED LIGHTING TECHNOLOGIES,
INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
VENTURE LIGHTING POWER SYSTEMS, CANADIAN LIGHTING SYSTEMS
NORTH AMERICA INC. (f.k.a. HOLDING, INCORPORATED
Ballastronix Incorporated)
By: /s/ R. G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ R. G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- ------------------------------
Title: VP Finance Title: VP Finance
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PARRY POWER SYSTEMS LIMITED VENTURE LIGHTING EUROPE LTD.
By: /s/ W. ▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
-------------------------------- ------------------------------
Title: Director Title: Director
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PNC BANK, NATIONAL ASSOCIATION, BANKBOSTON, N.A., as a Bank
as Agent and as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------- ------------------------------
Title: Vice President Title: Vice President
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SCHEDULE 1
Financial Commitment Revolving Credit Canadian UK Revolving Term Loan Maximum Amount
Institution Percentage Commitment Revolving Credit Credit Commitment (from 08/17/99
Amount Commitment Commitment Amount through 09/29/99)
(from 08/17/99 Amount Amount (from 08/17/99
through 09/29/99 (from 08/17/99 (from 08/17/99 through 09/29/99)
through 09/29/99) through 09/29/99)
PNC Bank, 80% $40,000,000 $4,800,000 $4,800,000 $20,000,000 $60,000,000
National
Association
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BankBoston, N.A. 20% $10,000,000 $1,200,000 $1,200,000 $ 5,000,000 $15,000,000
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Total 100% $50,000,000 $6,000,000 $6,000,000 $25,000,000 $75,000,000
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Maximum $50,000,000
Revolving Credit
Commitment
Amount
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Maximum Term $25,000,000
Loan Commitment
Amount
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Total Commitment $75,000,000
Amount
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Page 1 of 3
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SCHEDULE 1
Financial Commitment Revolving Canadian UK Revolving Term Loan Maximum
Institution Percentage Credit Revolving Credit Credit Commitment Amount (from
Commitment Commitment Commitment Amount (from 09/30/99
Amount (from Amount Amount 09/30/99 through the
09/30/99 (from 09/30/99 (from 09/30/99 through the day prior to
through the through the day through the day day prior to the Equity
day prior to prior to the prior to the the Equity Date)
the Equity Equity Date) Equity Date) Date)
Date)
PNC Bank, 80% $28,000,000 $3,200,000 $4,800,000 $20,000,000 $48,000,000
National
Association
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BankBoston, N.A. 20% $ 7,000,000 $ 800,000 $1,200,000 $ 5,000,000 $12,000,000
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Total 100% $35,000,000 $4,000,000 $6,000,000 $25,000,000 $60,000,000
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Maximum $35,000,000
Revolving Credit
Commitment
Amount
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Maximum Term $25,000,000
Loan Commitment
Amount
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Total Commitment $60,000,000
Amount
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Page 2 of 3
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SCHEDULE 1
Financial Commitment Revolving Credit Canadian UK Revolving Term Loan Maximum Amount
Institution Percentage Commitment Revolving Credit Credit Commitment (on the Equity Date
Amount (on the Commitment Commitment Amount (on the and thereafter)
Equity Date and Amount (on the Amount (on the Equity Date
thereafter) Equity Date Equity Date and thereafter)
and thereafter) and thereafter)
PNC Bank, 80% $32,000,000 $3,200,000 $4,800,000 $16,000,000 $48,000,000
National
Association
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BankBoston, N.A. 20% $ 8,000,000 $ 800,000 $1,200,000 $ 4,000,000 $12,000,000
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Total 100% $40,000,000 $4,000,000 $6,000,000 $20,000,000 $60,000,000
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Maximum $40,000,000
Revolving Credit
Commitment
Amount
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Maximum Term $20,000,000
Loan Commitment
Amount
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Total Commitment $60,000,000
Amount
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GUARANTOR ACKNOWLEDGMENT
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Each of the undersigned consents and agrees to and acknowledges the
terms of the foregoing Second Amendment Agreement. Each of the undersigned
further agrees that the obligations of each of the undersigned pursuant to the
Guaranty of Payment executed by each of the undersigned shall remain in full
force and effect and be unaffected hereby.
ADLT Realty Corp. I, Inc.
ADLT Services, Inc.
Advanced Lighting, Inc.
Advanced Lighting Systems, Inc.
APL Engineered Materials, Inc.
Ballastronix (Delaware), Inc.
Bio Light, Inc.
Bright Ideas Advertising and Design, Inc.
Energy Efficient Products, Inc.
HID Recycling, Inc.
Light Resources International, Inc.
Metal Halide Controls, Inc.
Metal Halide Technologies, Inc.
Microsun Technologies, Inc.
Specialty Discharge Lighting, Inc.
Venture Lighting International, Inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President of
each of the companies listed above
Deposition Sciences, Inc.
▇▇▇▇▇▇ Lighting, Inc.
Ruud Lighting, Inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, signing for each of
companies listed above by Power of
Attorney
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