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EXHIBIT 10.1
[SIDE LETTER]
PNC BANK, NATIONAL ASSOCIATION
2 PNC Plaza
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August 5, 1999
BankBoston, N.A.
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RE: CREDIT AGREEMENT DATED AS OF MAY 21, 1999 AMONG ADVANCED LIGHTING
TECHNOLOGIES, INC., AS U.S. BORROWER, BALLASTRONIX INCORPORATED (KNA
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC.) AND CANADIAN
LIGHTING SYSTEMS HOLDING, INCORPORATED, AS CANADIAN BORROWERS, PARRY
POWER SYSTEMS LIMITED AND VENTURE LIGHTING EUROPE LTD., AS UK
BORROWERS, VARIOUS FINANCIAL INSTITUTIONS, AS BANKS, AND PNC BANK,
NATIONAL ASSOCIATION, AS AGENT (THE "CREDIT AGREEMENT") (CAPITALIZED
TERMS USED IN THIS LETTER WITHOUT DEFINITION HAVE THE MEANINGS ASCRIBED
THERETO IN THE CREDIT AGREEMENT)
Ladies and Gentlemen:
In connection with BankBoston, N.A. ("BankBoston") entering into that certain
Assignment and Acceptance Agreement pursuant to which it agrees to become a
"Bank" under the Credit Agreement, as more fully set forth in the Assignment and
Acceptance Agreement, PNC Bank, National Association, as Agent ("Agent") and
BankBoston hereby agree as follows:
1. The definition "Required Banks" contained in Article I of the Credit
Agreement shall be amended (the "Amendment") to mean Agent and at least
one other Lender (other than PNC Bank, National Association) which has
a minimum commitment of $10,000,000.
2. Section 5.3 of the Credit Agreement shall be amended to expressly
provide for, among other things:
(a) the weekly delivery of Borrowers assignment of sales and the
monthly delivery of Borrower's Certificate by each Borrower;
(b) the delivery on a monthly basis of an accounts receivable
aging report and an accounts payable report, to be in form of
substance satisfactory to the Agent and the Required Banks;
(c) the consent of the Required Banks for any amendment to the
Indenture, namely that the definition of Indenture contained
in the Credit Agreement will be modified in the third line
thereof to provide for the "prior written consent of the
Required Banks"; and
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(d) the modification of the definition of "Total Unused Credit
Availability" contained in Article I of the Credit Agreement
to read in its entirety as follows: "Total Unused Credit
Availability" shall mean, at any time, the difference between
(a) the sum of (i) the U.S. Borrowing Base, (ii) the UK
Borrowing Base and (iii) the Canadian Borrowing Base, minus
(b) the Revolving Credit Exposure."
3. The Canadian Credit Facility set forth in Section 2.1.A.3 of the Credit
Agreement will be modified under the terms of the Amendment to provide
that:
(a) borrowing requests by Canadian Borrowers shall request Loans
from the Banks in Dollars;
(b) Loans from the Banks to Canadian Borrowers will be made in
Dollars; and
(c) the repayment of Loans made by the Banks to the Canadian
Borrowers will be repaid in Dollars.
The Credit Agreement, the Canadian Revolving Credit Notes and the other
Related Writings, as applicable, will be modified to reflect the
foregoing in a manner satisfactory to Agent and the Banks.
4. Until such time as the Credit Agreement and Related Writings are
modified to reflect the provisions of Paragraphs 3 and 5 herein, no
Loans will be made under Canadian Revolving Credit Commitment. In lieu
thereof, to the extent that there is availability under the U.S.
Borrowing Base, U.S. Borrower may request U.S. Revolving Loans and
advance funds by way of intercompany loans to the Canadian Borrowers as
permitted by the Credit Agreement.
5. The Amendment will provide for the deletion of Section 2.5(e)(ii)(C)
and (D). The Amendment will further provide for the deletion of the
second paragraph under Section 3.2 of the Credit Agreement, and the
addition in place thereof of provisions that will provide that if the
Borrower pays any additional amount under Section 3.2 to a Bank and
such Bank determines in its sole discretion that it has actually
received or realized in connection therewith any refund or any
reduction of, or credit against, its tax liabilities in or with respect
to the taxable year in which the additional amount is paid, such Bank
shall pay to such Borrower an amount that the Bank shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was
obtained by the Bank in such year as a consequence of such tax benefit;
provided, however, that any Bank may determine in its sole discretion
consistent with the policies of such Bank whether to seek a tax
benefit, and nothing in Section 3.2 shall require a Bank to disclose
any confidential information to any Borrower (including, without
limitation, its tax returns). Additionally, in connection with Canadian
Borrowers' withholding tax liability with respect to Canadian Revolving
Loans, the Amendment will contain provisions specifically stating that
(a) Canadian Borrowers are responsible for the timely payment of all
withholding taxes, (b) evidence of the making of those payments in a
timely manner, and (c) Banks and Agent will be indemnified for any loss
or liability resulting from Canadian Borrowers' failure to make such
tax payments in a timely manner.
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6. Notwithstanding the provisions of Section 10.3 of the Credit Agreement
or the definition of "Required Lenders", the Amendment and any related
changes to the Related Writings shall be in a form and substance
satisfactory to Borrower, Agent, BankBoston and any other Banks and
shall address such other matter as are deemed necessary or appropriate
by Agent and the Banks. The parties hereto will use their good faith
efforts to enter into the Amendment no later than August 25, 1999.
The undersigned agree to and acknowledge the foregoing terms, provisions and
conditions of this letter.
PNC BANK, NATIONAL ASSOCIATION, PNC BANK, NATIONAL ASSOCIATION,
as Agent as Bank
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. By: /s/▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
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Title: Vice President Title: Vice President
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Date: 8/4/99 Date: 8/4/99
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BANKBOSTON, N.A., as Bank VENTURE LIGHTING POWER
SYSTEMS, NORTH AMERICA INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (fka Ballastronix Incorporated)
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Title: Vice President By: /s/R. G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Date: 8/5/99 Title: V.P. Finance
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Date: 99/8/7
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ADVANCED LIGHTING TECHNOLOGIES, INC.
PARRY POWER SYSTEMS LIMITED
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President By: /s/▇. ▇. ▇▇▇▇▇▇▇▇
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Date: Title: Technical Director
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Date: 30-7-99
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CANADIAN LIGHTING SYSTEMS HOLDINGS,
INCORPORATED
By: /s/R. G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: V. P. Finance
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Date: 99/8/7
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VENTURE LIGHTING EUROPE, LTD.
By: /s/S. D. ▇▇▇▇▇▇
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Title: Export Sales & Marketing Director
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Date: 30th July, 1999
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