EXHIBIT 10.2.27
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LOAN AND SECURITY AGREEMENT
BY AND AMONG
ADVANCED LIGHTING TECHNOLOGIES, INC.,
A DEBTOR AND DEBTOR-IN-POSSESSION,
AND
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS BORROWERS,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
XXXXX FARGO FOOTHILL, INC.
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF JUNE 30, 2003
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TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION................................................................... 1
1.1 Definitions........................................................................... 1
1.2 Accounting Terms...................................................................... 38
1.3 Code.................................................................................. 38
1.4 Construction.......................................................................... 38
1.5 Schedules and Exhibits................................................................ 39
2. LOAN AND TERMS OF PAYMENT...................................................................... 39
2.1 Revolver Advances..................................................................... 39
2.2 Term Loans............................................................................ 40
2.3 Borrowing Procedures and Settlements.................................................. 41
2.4 Payments.............................................................................. 48
2.5 Overadvances.......................................................................... 55
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations............ 55
2.7 Cash Management....................................................................... 57
2.8 Crediting Payments; Float Charge...................................................... 58
2.9 Designated Account.................................................................... 59
2.10 Maintenance of Loan Account; Statements of Obligations................................ 59
2.11 Fees.................................................................................. 60
2.12 Letters of Credit..................................................................... 60
2.13 LIBOR Option.......................................................................... 64
2.14 Capital Requirements.................................................................. 66
2.15 Joint and Several Liability of Borrowers.............................................. 67
2.16 Dollar Denomination of Advances....................................................... 69
2.17 Foreign Accounts...................................................................... 69
2.18 Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest............ 70
2.19 Currency; Judgment.................................................................... 70
2.20 Registered Notes...................................................................... 71
3. CONDITIONS; TERM OF AGREEMENT.................................................................. 71
3.1 Conditions Precedent to the Initial Extension of Credit............................... 71
3.2 Conditions Subsequent to the Initial Extension of Credit.............................. 76
3.3 Conditions Precedent to all Extensions of Credit...................................... 77
3.4 Term.................................................................................. 77
3.5 Effect of Termination................................................................. 78
3.6 Early Termination by Borrowers........................................................ 78
4. CREATION OF SECURITY INTEREST.................................................................. 78
4.1 Grant of Security Interest............................................................ 78
4.2 Negotiable Collateral................................................................. 79
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral................ 79
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4.4 Delivery of Additional Documentation Required......................................... 79
4.5 Power of Attorney..................................................................... 80
4.6 Right to Inspect...................................................................... 80
4.7 Control Agreements.................................................................... 80
4.8 Administrative Priority............................................................... 81
4.9 No Filings Required................................................................... 81
5. REPRESENTATIONS AND WARRANTIES................................................................. 81
5.1 No Encumbrances....................................................................... 81
5.2 Eligible Accounts..................................................................... 81
5.3 Eligible Inventory.................................................................... 81
5.4 Equipment............................................................................. 81
5.5 Location of Inventory and Equipment................................................... 82
5.6 Inventory Records..................................................................... 82
5.7 Location of Chief Executive Office; FEIN.............................................. 82
5.8 Due Organization and Qualification; Subsidiaries...................................... 82
5.9 Due Authorization; No Conflict........................................................ 83
5.10 Litigation............................................................................ 84
5.11 No Material Adverse Change............................................................ 84
5.12 Fraudulent Transfer................................................................... 84
5.13 Non-operating Borrowers............................................................... 84
5.14 Environmental Condition............................................................... 85
5.15 Brokerage Fees........................................................................ 85
5.16 Intellectual Property................................................................. 85
5.17 Leases................................................................................ 85
5.18 DDAs.................................................................................. 85
5.19 Complete Disclosure................................................................... 85
5.20 Indebtedness.......................................................................... 86
5.21 Appointment of Trustee or Examiner; Liquidation....................................... 86
5.22 Interrelated Entities................................................................. 86
5.23 Taxes................................................................................. 86
5.24 Financing Order....................................................................... 87
5.25 Super-Priority Lien and Administrative Expense........................................ 87
5.26 Material Contracts.................................................................... 87
5.27 ADLT Realty........................................................................... 87
5.28 Employee Benefits..................................................................... 87
5.29 Payments to Employees and Others...................................................... 89
5.30 Withholdings and Remittances.......................................................... 89
6. AFFIRMATIVE COVENANTS.......................................................................... 89
6.1 Accounting System..................................................................... 89
6.2 Collateral Reporting.................................................................. 89
6.3 Financial Statements, Reports, Certificates........................................... 91
6.4 Reserved.............................................................................. 94
6.5 Return................................................................................ 94
6.6 Maintenance of Properties............................................................. 94
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6.7 Taxes................................................................................. 94
6.8 Insurance............................................................................. 95
6.9 Location of Inventory and Equipment................................................... 96
6.10 Compliance with Laws.................................................................. 96
6.11 Leases................................................................................ 96
6.12 Brokerage Commissions................................................................. 96
6.13 Existence............................................................................. 96
6.14 Environmental......................................................................... 96
6.15 Disclosure Updates.................................................................... 97
6.16 Intellectual Property................................................................. 97
6.17 Budget; Minimum Collateral; Certifications............................................ 97
6.18 Monitoring Agent...................................................................... 100
6.19 Foreign Cash.......................................................................... 100
6.20 ERISA................................................................................. 100
6.21 Organizational ID Number; Commercial Tort Claims...................................... 101
7. NEGATIVE COVENANTS............................................................................. 101
7.1 Indebtedness.......................................................................... 101
7.2 Liens................................................................................. 102
7.3 Restrictions on Fundamental Changes................................................... 102
7.4 Disposal of Assets.................................................................... 102
7.5 Change Name........................................................................... 103
7.6 Guarantee............................................................................. 103
7.7 Line of Business...................................................................... 103
7.8 Prepayments and Amendments............................................................ 103
7.9 Change of Control..................................................................... 103
7.10 Consignments.......................................................................... 103
7.11 Distributions......................................................................... 103
7.12 Accounting Methods.................................................................... 103
7.13 Investments........................................................................... 103
7.14 Transactions with Affiliates.......................................................... 104
7.15 Suspension............................................................................ 104
7.16 Compensation.......................................................................... 104
7.17 Use of Proceeds....................................................................... 104
7.18 Change in Location of Chief Executive Office; Inventory and Equipment with Bailees.... 105
7.19 Securities Accounts................................................................... 105
7.20 Financial Covenants................................................................... 105
7.21 Final Financing Order; Administrative Expense Priority; Lien Priority; Payments....... 106
7.22 Gross Profits......................................................................... 106
8. EVENTS OF DEFAULT.............................................................................. 107
9. THE LENDER GROUP'S RIGHTS AND REMEDIES......................................................... 110
9.1 Rights and Remedies................................................................... 110
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9.2 Automatic Stay........................................................................ 112
9.3 Remedies Cumulative................................................................... 113
10. TAXES AND EXPENSES............................................................................. 113
11. WAIVERS; INDEMNIFICATION....................................................................... 113
11.1 Demand; Protest; etc.................................................................. 113
11.2 The Lender Group's Liability for Collateral........................................... 113
11.3 Indemnification....................................................................... 113
12. NOTICES........................................................................................ 114
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..................................................... 116
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..................................................... 116
14.1 Assignments and Participations........................................................ 116
14.2 Successors............................................................................ 120
15. AMENDMENTS; WAIVERS............................................................................ 120
15.1 Amendments and Waivers................................................................ 120
15.2 Replacement of Holdout Lender......................................................... 121
15.3 No Waivers; Cumulative Remedies....................................................... 122
16. AGENT; THE LENDER GROUP........................................................................ 122
16.1 Appointment and Authorization of Agent................................................ 122
16.2 Delegation of Duties.................................................................. 123
16.3 Liability of Agent.................................................................... 123
16.4 Reliance by Agent..................................................................... 124
16.5 Notice of Default or Event of Default................................................. 124
16.6 Credit Decision....................................................................... 124
16.7 Costs and Expenses; Indemnification................................................... 125
16.8 Agent in Individual Capacity.......................................................... 126
16.9 Successor Agent....................................................................... 126
16.10 Lender in Individual Capacity......................................................... 126
16.11 Withholding Taxes..................................................................... 127
16.12 Collateral Matters.................................................................... 129
16.13 Restrictions on Actions by Lenders; Sharing of Payments............................... 129
16.14 Agency for Perfection................................................................. 130
16.15 Payments by Agent to the Lenders...................................................... 130
16.16 Concerning the Collateral and Related Loan Documents.................................. 130
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information................................................ 131
16.18 Several Obligations; No Liability..................................................... 132
17. GENERAL PROVISIONS............................................................................. 132
17.1 Effectiveness......................................................................... 132
17.2 Section Headings...................................................................... 132
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17.3 Interpretation........................................................................ 132
17.4 Severability of Provisions............................................................ 133
17.5 Amendments in Writing................................................................. 133
17.6 Counterparts; Telefacsimile Execution................................................. 133
17.7 Revival and Reinstatement of Obligations.............................................. 133
17.8 Integration........................................................................... 133
17.9 Parent as Agent for Borrowers......................................................... 133
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of June 30, 2003, by and among, on the one hand, the lenders
identified on the signature pages hereof (such lenders, together with their
respective successors and assigns, are referred to hereinafter each individually
as a "Lender" and collectively as the "Lenders"), XXXXX FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders
("Agent"), and, on the other hand, ADVANCED LIGHTING TECHNOLOGIES, INC., an Ohio
corporation, a debtor and debtor-in-possession, ("Parent"), and each of Parent's
Subsidiaries identified as a borrower on the signature pages hereof (such
Subsidiaries, together with Parent, are referred to hereinafter each
individually as a "Borrower", and individually and collectively, jointly and
severally, as "Borrowers").
WHEREAS, each Borrower has previously filed a Chapter 11 case
under the Bankruptcy Code (as hereinafter defined), which Chapter 11 cases are
being jointly administered under case number 03-05255 currently pending in the
United States Bankruptcy Court for the Northern District of Illinois
(collectively, the "Chapter 11 Cases"); and
WHEREAS, Borrowers and Guarantors (as hereinafter defined)
have requested that Agent and Lenders enter into certain financing arrangements
with Borrowers and Guarantors pursuant to which Agent and Lenders may make loans
and provide other financial accommodations to Borrowers during the pendency of
the Chapter 11 Cases; and
WHEREAS, Agent and Lenders are willing to make such loans and
provide such other financial accommodations on the terms and conditions set
forth herein, in the Final Financing Order (as hereinafter defined) and in the
other Loan Documents (as hereinafter defined).
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"Ableco" shall mean Ableco Finance LLC, a Delaware limited
liability company.
"Account Debtor" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account, chattel paper,
or a General Intangible.
"Accounts" means, as to any Person, all of such Person's now
owned or hereafter acquired right, title, and interest with respect to
"accounts" (as that term is defined in the Code), and any and all supporting
obligations in respect thereof.
"ACH Transactions" means any cash management or related
services (including the Automated Clearing House processing of electronic funds
transfers through the direct Federal Reserve Fedline system) provided by Xxxxx
Fargo or its Affiliates for the account of Administrative Borrower or its
Subsidiaries.
"Accumulated Funding Deficiency" shall have the meaning
ascribed to that term in Section 302 of ERISA.
"ADLT Line of Business" means Parent's business unit as
included in the Budget.
"ADLT Realty" means ADLT Realty Corp. I, Inc., an Ohio
corporation.
"APL" means APL Engineered Materials, Inc., an Illinois
corporation, a debtor and debtor-in-possession.
"APL Line of Business" means the aggregate operations of APL
and APL Japan Co. Ltd., as detailed in the Budget.
"Additional Documents" has the meaning set forth in Section
4.4.
"Additional Foreign Subsidiaries" means Venture Lighting
International Pty. Ltd., incorporated under the laws of South Africa, Venture
Lighting International FZE (Dubai), incorporated under the laws of the United
Arab Emirates, Advanced Lighting Technologies Canada, Inc., an Ontario
corporation, Ruud Lighting Europe Ltd. and ADLT Logistics Limited, each
incorporated under the laws of the United Kingdom, and Advanced Cablelite
Corporation, an Ohio corporation.
"Adjusted EBITDA" means, for any period, Parent's and its
Subsidiaries consolidated net earnings (or loss) for such period plus (a)
interest expense, (b) income taxes, (c) depreciation and amortization expense,
(d) losses from minority interest and investments accounted for in the equity
method, up to a maximum of $500,000, (e) non-recurring, non-cash charges, as
approved in Lenders' Permitted Discretion, (f) the amount of professional, bank
and refinancing fees related to the reorganization of Borrowers, which amount
shall not exceed the amount set forth in the approved Closing Date Business
Plan, minus (g) interest income, (h) income tax benefit (i) extraordinary gains,
(j) gains resulting from minority interests or investments accounted for on the
equity method. All of the foregoing only to the extent included in the
calculation of consolidated net earnings (or loss), without duplication, and
determined in accordance with GAAP.
"Administrative Borrower" has the meaning set forth in Section
17.9.
"Advances" has the meaning set forth in Section 2.1(a).
"Affiliate" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the
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power to direct the management and policies of a Person, whether through the
ownership of Stock, by contract, or otherwise; provided, however, that, for
purposes of the definition of Eligible Accounts and Section 7.14 hereof: (a) any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other members of the
governing body of a Person or 10% or more of the partnership or other ownership
interests of a Person (other than as a limited partner of such Person) shall be
deemed to control such Person; (b) each director (or comparable manager) of a
Person shall be deemed to be an Affiliate of such Person; and (c) each
partnership or joint venture in which a Person is a partner or joint venturer
shall be deemed to be an Affiliate of such Person.
"Agent" means Foothill, solely in its capacity as agent for
the Lenders hereunder, and any successor thereto.
"Agent Advances" has the meaning set forth in Section
2.3(e)(i).
"Agent's Account" means the account identified on Schedule
A-1.
"Agent's Liens" means the Liens granted by Loan Parties to
Agent for the benefit of the Lender Group under this Agreement or the other Loan
Documents.
"Agent-Related Persons" means Agent, together with its
Affiliates, officers, directors, employees, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"Assignee" has the meaning set forth in Section 14.1(a).
"Assignment and Acceptance" means an Assignment and Acceptance
in the form of Exhibit A-1.
"Authorized Person" means any officer or other employee of
Administrative Borrower.
"Avoidance Actions" means, collectively, all of Borrowers'
causes of action, as debtors and debtors-in-possession, arising under Chapter 5
of the Bankruptcy Code.
"Availability" means, as of any date of determination if such
date is a Business Day, and determined at the close of business on the
immediately preceding Business Day if such date of determination is not a
Business Day, the amount that Borrowers are entitled to borrow as Advances under
Section 2.1 (after giving effect to all then outstanding Obligations (other than
Bank Products Obligations) and all sublimits and reserves applicable hereunder).
"Bank Product Agreements" means those certain cash management
service agreements entered into from time to time by Administrative Borrower or
its Subsidiaries in connection with any of the Bank Products.
"Bank Product Obligations" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Administrative
Borrower or its
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Subsidiaries to Xxxxx Fargo or its Affiliates pursuant to or evidenced by the
Bank Product Agreements and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that a Borrower or
any of its Subsidiaries is obligated to reimburse to Agent or any member of the
Lender Group as a result of Agent or such member of the Lender Group purchasing
participations or executing indemnities or reimbursement obligations with
respect to the Bank Products provided to Administrative Borrower or its
Subsidiaries pursuant to the Bank Product Agreements.
"Bank Products" means any service or facility extended to
Administrative Borrower, any Guarantor or any of their respective Subsidiaries
by Xxxxx Fargo or any Affiliate of Xxxxx Fargo including: (a) credit cards, (b)
credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH
Transactions, (f) cash management, including controlled disbursement, accounts
or services, or (g) Hedge Agreements.
"Bank Product Reserves" means, as of any date of
determination, the amount of reserves that Agent has established (based upon
Xxxxx Fargo's or its Affiliate's reasonable determination of the credit exposure
in respect of then extant Bank Products) for Bank Products then provided or
outstanding, provided that such reserves are established at the time Xxxxx Fargo
or its Affiliates provides the applicable Bank Products.
"Bankruptcy Code" means the United States Bankruptcy Code;
provided that, when the context requires, (a) with respect to Canadian
Guarantor, "Bankruptcy Code" shall mean the Bankruptcy and Insolvency Act
(Canada) or the Companies' Creditors Arrangement Act (Canada), and (b) with
respect to UK Guarantors, "Bankruptcy Code" shall mean any similar legislation
in the UK, in each case as in effect from time to time.
"Bankruptcy Court" means the United States Bankruptcy Court
for the Northern District of Illinois.
"Base LIBOR Rate" means the rate per annum, determined by
Agent in accordance with its customary procedures, and utilizing such electronic
or other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/16%), on the basis of the rates at which Dollar
deposits are offered to major banks in the London interbank market on or about
2:00 p.m. (New York time) 2 Business Days prior to the commencement of the
applicable Interest Period, for a term and in amounts comparable to the Interest
Period and amount of the LIBOR Rate Loan requested by Administrative Borrower in
accordance with this Agreement, which determination shall be conclusive in the
absence of manifest error.
"Base Rate" means, the rate of interest announced within Xxxxx
Fargo at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of Xxxxx Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as Xxxxx Fargo may designate.
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"Base Rate Loan" means each portion of an Advance or the Term
Loan that bears interest at a rate determined by reference to the Base Rate.
"Base Rate Margin" means one (1) percentage point.
"Base Rate Term Loan A Margin" means two (2) percentage
points.
"Base Rate Term Loan B Margin" means six (6) percentage
points.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA or a benefit plan under Canadian Employee Benefit Laws)
for which any Loan Party or any Subsidiary of a Loan Party or ERISA Affiliate of
any Loan Party has been an "employer" (as defined in Section 3(5) of ERISA or
has held equivalent status under Canadian Employee Benefit Laws) within the past
six years.
"Board of Directors" means the board of directors (or
comparable managers) of Parent or any committee thereof duly authorized to act
on behalf thereof.
"Books" means all of each Loan Party's and its respective
Subsidiaries' now owned or hereafter acquired books and records (including all
of its Records indicating, summarizing, or evidencing its assets (including the
Collateral) or liabilities, all of each Loan Party's or its respective
Subsidiaries' Records relating to its or their business operations or financial
condition, and all of its or their goods or General Intangibles related to such
information).
"Borrower" and "Borrowers" have the respective meanings set
forth in the preamble to this Agreement.
"Borrowing" means a borrowing hereunder consisting of Advances
(or term loans, in the case of a Term Loan) made on the same day by the Lenders
(or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or
by Agent in the case of an Agent Advance.
"Borrowing Base" means, collectively, as of any date of
determination the sum of:
(a) the lower of
(x) eighty-five percent (85%) of
the amount of Eligible Accounts of each of
Borrowers and DSI, it being acknowledged
that the aggregate amount of outstanding
Advances at any one time made in respect of
Eligible Accounts created by DSI shall not
exceed $1,500,000; less the aggregate
amount, if any, of the Dilution Reserve, and
(y) an amount equal to Collections
of Borrowers and DSI with respect to
Accounts for the immediately preceding 90
days,
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plus
(b) the lowest of
(w) $5,000,000,
(x) fifty percent (50%) of the
Value of Eligible Inventory of Borrowers and
DSI,
(y) eighty percent (80%) of the
then extant Net Liquidation Percentage of
the Value of Eligible Inventory of Borrowers
and DSI, and
(z) 100 percent (100%) of the
amount of credit availability created by
clause (a) above,
plus
(c) the Canadian Guarantor Base, it being
acknowledged the aggregate amount of
outstanding Advances at any one time made in
respect of the Canadian Guarantor Base shall
not exceed an amount equal to the sum of the
Canadian Intercompany Loan plus $1,500,000,
plus
(d) the UK Guarantor Base, it being acknowledged
that the aggregate amount of outstanding
Advances at any one time made in respect of
the UK Guarantor Base shall not exceed an
amount equal to the UK Intercompany Loan,
minus
(e) the sum of
(x) the Bank Products Reserve,
(y) the Professional Fee Carve-Out,
and
(z) without duplication, the
aggregate amount of reserves, if any,
established by Agent under Section 2.1(b);
"Budget" means the written budget, as more fully defined in
the Final Financing Order, prepared by Borrowers, together with the detailed
schedules thereto prepared by Borrowers and delivered to Lender Group, and
satisfactory to Lender Group in its sole discretion, as modified from time to
time provided such modifications are satisfactory to Lender Group in its sole
discretion.
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"Business Day" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term "Business Day" also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market.
"Canadian Dilution" means, as of any date of determination, a
percentage, based upon the experience of the immediately prior three (3) month
period, that is the result of dividing (a) the Dollar equivalent amount of bad
debt write-downs, discounts, advertising allowances, credits, or other dilutive
items with respect to the Canadian Guarantor's Accounts during such period, by
(b) Canadian Guarantor's xxxxxxxx with respect to Accounts during such period.
"Canadian Dilution Reserve" means, as of any date of
determination, an amount sufficient to reduce the advance rate against Eligible
Accounts of Canadian Guarantor by one percentage point for each percentage point
by which Canadian Dilution is in excess of 5%.
"Canadian Employee Benefit Laws" mean the Canadian Pension
Plan Act (Canada), the Pension Benefits Act (Nova Scotia), and any federal,
provincial or local counterparts or equivalents, in each case, as amended from
time to time.
"Canadian Guarantee" means that certain Guarantee executed and
delivered by the Canadian Guarantor in favor of Agent, for the benefit of the
Lender Group in form and substance satisfactory to Agent.
"Canadian Guarantor" means Venture Lighting Power Systems,
North America Inc., a corporation organized under the laws of the Province of
Nova Scotia.
"Canadian Guarantor Base" means, collectively, as of any date
of determination the sum of:
(a) the least of
(x) $3,000,000,
(y) eighty-five percent (85%) of
the amount of Eligible Accounts of Canadian
Guarantor, less the aggregate amount, if
any, of the Canadian Dilution Reserve, and
(z) an amount equal to Collections
of Canadian Guarantor with respect to
Accounts for the immediately preceding 90
days,
plus
(b) the least of
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(i) $1,500,000,
(ii) fifty percent (50%) of the
Value of Eligible Inventory of Canadian
Guarantor,
(iii) eighty percent (80%) of
the then extant Net Liquidation Percentage
of the Value of Canadian Guarantor's
Eligible Inventory, and
(iv) one hundred percent (100%)
of the amount of credit availability created
by clause (a) above,
minus
(c) the aggregate amount of reserves,
if any, established by Agent under Section
2.1(b).
"Canadian Income Tax Act" means the Income Tax Act (Canada),
R.S.C. 1985 c.1 (5th Supp.), as amended from time to time.
"Canadian Intercompany Loan" means a loan made by
Administrative Borrower to Canadian Guarantor on the Closing Date in an amount
sufficient to pay in full all obligations of Canadian Guarantor to the Prior
Lenders but in any event not exceeding $1,825,000. The Canadian Intercompany
Loan shall remain fully outstanding until, and shall be due and payable on, the
date of termination of this Agreement, whether by its terms, by prepayment, or
by acceleration.
"Capital Expenditures" means, with respect to any Person for
any period, the sum of (a) the aggregate of all expenditures by such Person and
its Subsidiaries during such period that in accordance with GAAP are or should
be included in "property, plant and equipment" or in a similar fixed asset
account on its balance sheet, whether such expenditures are paid in cash or
financed, and including all Capitalized Lease Obligations incurred during such
period, and (b) to the extent not covered by clause (a) above, the aggregate of
all expenditures by such Person and its Subsidiaries during such period to
acquire by purchase or otherwise the business or fixed assets of, or the capital
stock of, any other Person.
"Canadian Security Agreement" means that certain Security
Agreement executed and delivered by the Canadian Guarantor in favor of Agent,
for the benefit of the Lender Group in form and substance satisfactory to Agent.
"Capital Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means any Indebtedness
represented by obligations under Capital Lease.
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"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or Xxxxx'x,
(c) commercial paper maturing no more than 270 days from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or Xxxxx'x, and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United States or any
state thereof which bank has a rating of A or A2, or better, from S&P or
Xxxxx'x, or (ii) certificates of deposit less than or equal to $100,000 in the
aggregate issued by any other bank insured by the Federal Deposit Insurance
Corporation.
"Cash Management Bank" has the meaning set forth in Section
2.7(a).
"Cash Management Account" has the meaning set forth in Section
2.7(a).
"Cash Management Agreements" means those certain cash
management service agreements, in form and substance satisfactory to Agent, each
of which is among Administrative Borrower or other applicable Loan Party, Agent,
and one of the Cash Management Banks.
"Change of Control" means (a) any "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than
Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 10%, or more, of the Stock of
Parent having the right to vote for the election of members of the Board of
Directors, or (b) a majority of the members of the Board of Directors do not
constitute Continuing Directors, or (c) any Borrower ceases to own and control,
directly or indirectly, 100% of the outstanding capital Stock of each of its
Subsidiaries extant as of the Closing Date, except as set forth on Schedule
5.8(c).
"Chapter 11 Cases" means the Chapter 11 cases filed by
Borrowers in the Bankruptcy Court, jointly administered under the U.S.
Bankruptcy Code, referred to as In re: Venture Lighting International, Inc., et
al., Jointly Administered Case No. 03-05255.
"Claim" has the meaning set forth in Section 101(5) of the
Bankruptcy Code.
"Closing Date" means the date of the making of the initial
Advance (or other extension of credit) hereunder.
"Closing Date Business Plan" means the set of Projections of
Borrowers for the twelve (12) month period following the Closing Date (on a
month by month basis), in form and substance (including as to scope and
underlying assumptions) satisfactory to Lenders.
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"Code" means the New York Uniform Commercial Code, as in
effect from time to time.
"Collateral" means all of each Loan Party's now owned or
hereafter acquired property, including without limitation, all of each Loan
Party's right, title, and interest in and to each of the following:
(a) Accounts,
(b) Books,
(c) Equipment,
(d) General Intangibles,
(e) Inventory,
(f) Investment Property,
(g) Negotiable Collateral,
(h) Real Property Collateral,
(i) Commercial Tort Claims,
(j) money or other assets of each such Loan Party that now or
hereafter come into the possession, custody, or control of any member of the
Lender Group,
(k) all present and future claims, rights, interests, assets
and properties recovered by or on behalf of any Loan Party or any trustee of any
Loan Party (whether in the Chapter 11 Cases or any subsequent case to which the
Chapter 11 Cases are converted), including, without limitation, all property
recovered as a result of Avoidance Actions, and
(l) the proceeds and products, whether tangible or intangible,
of any of the foregoing, including proceeds of insurance covering any or all of
the foregoing, and any and all Accounts, Books, Equipment, General Intangibles,
Inventory, Investment Property, Negotiable Collateral, Real Property, money,
deposit accounts, or other tangible or intangible property resulting from the
sale, exchange, collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds thereof.
"Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of a lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment or Inventory, in each case, in form and
substance satisfactory to Agent and from such Persons as required by Agent.
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"Collections" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds) of any Loan Party.
"Commercial Tort Claim" means, as to any Person, all of such
Person's now owned or hereafter acquired right, title and interest with respect
to "commercial tort claims" (as that term is defined in the Code).
"Committee" means any official committee of unsecured
creditors appointed in the Chapter 11 Cases.
"Commitment" means, with respect to each Lender, its Revolver
Commitment, its Term Loan A Commitment, its Term Loan B Commitment, or its Total
Commitment, as the context requires, and, with respect to all Lenders, their
Revolver Commitments, their Term Loan A Commitments, their Term Loan B
Commitments, or their Total Commitments, as the context requires, in each case
as such Dollar amounts are set forth beside such Lender's name under the
applicable heading on Schedule C-1 or on the signature page of the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder in
accordance with the provisions of Section 14.1.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 delivered by the chief financial officer or, if no chief
financial officer is then employed by Parent, the chief accounting officer, of
Parent to Agent.
"Continuing Director" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Parent on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Parent (as such terms are used in Rule 14a-11 under the
Exchange Act) and whose initial assumption of office resulted from such contest
or the settlement thereof.
"Control Agreement" means a control agreement, in form and
substance satisfactory to Agent, executed and delivered by a Loan Party, Agent,
and the applicable securities intermediary with respect to a Securities Account
or a bank with respect to a DDA.
"Credit Facility Deficit" has the meaning set forth in Section
2.1(c)(i).
"Credit Facility Obligations" means, as of the date of any
Borrowing or the issuance of any Letter of Credit, the sum of the Revolver Usage
and the aggregate outstanding principal amount of Term Loan A.
"Credit Facility Shortfall" has the meaning set forth in
Section 2.4(b)(vi)(B).
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"Copyright Security Agreement" means each copyright security
agreement executed and delivered by a Loan Party and Agent, the form and
substance of which is satisfactory to Agent.
"Daily Balance" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand deposit account
maintained by any Loan Party.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"Defaulting Lender Rate" means (a) the Base Rate for the first
3 days from and after the date the relevant payment is due, and (b) thereafter,
at the interest rate then applicable to Advances that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto).
"Designated Account" means that certain DDA of Administrative
Borrower identified on Schedule D-1.
"Dilution" means, as of any date of determination, a
percentage, based upon the experience of the immediately prior three (3) month
period, that is the result of dividing (a) the Dollar amount of bad debt
write-downs, discounts, advertising allowances, credits, or other dilutive items
with respect to the Borrowers' Accounts and DSI's Accounts during such period,
by (b) Borrowers' and DSI's xxxxxxxx with respect to Accounts during such
period.
"Dilution Reserve" means, as of any date of determination, an
amount sufficient to reduce the advance rate against Eligible Accounts of
Borrowers and DSI by one percentage point for each percentage point by which
Dilution is in excess of 5%.
"Disbursement Letter" means an instructional letter executed
and delivered by Administrative Borrower to Agent regarding the extensions of
credit to be made on the Closing Date, the form and substance of which is
satisfactory to Agent.
"DOL" means the United States Department of Labor and any
successor department or agency.
"Dollars" or "$" means United States dollars.
"DSI" means Deposition Sciences, Inc., an Ohio corporation.
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"DSI Line of Business" means the aggregate operations of DSI
as detailed in the Budget.
"Due Diligence Letter" means the due diligence letter sent by
Agent's counsel to counsel to Administrative Borrower, together with
Administrative Borrower's completed responses to the inquiries set forth
therein, the form and substance of such responses to be satisfactory to Agent.
"EBITDA Deficit" has the meaning set forth in Section
2.1(c)(iii).
"Eligible Accounts" means those Accounts created by a
Borrower, Canadian Guarantor, a UK Guarantor or DSI in the ordinary course of
its business, that arise out of its sale of goods or rendition of services, that
comply with each of the representations and warranties respecting Eligible
Accounts made by such Borrower, Canadian Guarantor, UK Guarantor, or DSI under
the Loan Documents, and that are not excluded as ineligible by virtue of one or
more of the criteria set forth below; provided, however, that such criteria may
be fixed and revised from time to time by Agent in Agent's Permitted Discretion
to address the results of any audit performed by Agent from time to time after
the Closing Date. In determining the amount to be included, Eligible Accounts
shall be calculated net of all customer deposits, unapplied cash, cash on
delivery and cash in advance remitted to Borrowers or Guarantors. Eligible
Accounts shall not include the following:
(a) Accounts that the Account Debtor has failed
to pay within ninety (90) days of the invoice date or sixty (60) days of the due
date or Accounts with selling terms of more than sixty (60) days, except that,
notwithstanding the foregoing, for purposes of this subclause (a), Eligible
Accounts of UK Guarantor shall not include Accounts that the Account Debtor has
failed to pay within one hundred twenty (120) days of the invoice date or thirty
(30) days of the due date or Accounts with selling terms of more than ninety
(90) days,
(b) Accounts owed by an Account Debtor (or its
Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or
its Affiliates) are deemed ineligible under clause (a) above,
(c) Accounts with respect to which the Account
Debtor is an employee, Affiliate (expressly including General Electric Company,
Ruud Lighting, Inc. and Fiberstars, Inc.), or agent of any Borrower or any
Subsidiary of a Borrower,
(d) Accounts arising in a transaction wherein
goods remain on consignment or are sold pursuant to a guaranteed sale, a sale or
return, a sale on approval, a xxxx and hold, or any other terms by reason of
which the payment by the Account Debtor may be conditional,
(e) Accounts that are not payable in Dollars,
Canadian Dollars, or pounds Sterling,
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(f) Accounts with respect to which the Account
Debtor either (i) does not maintain its chief executive office in the United
States or with respect to Canadian Guarantor, Canada or the United States or,
with respect to any UK Guarantor, the United Kingdom or the United States
(provided, that, at any time promptly upon Agent's request, Canadian Guarantor
and UK Guarantors, as applicable, shall execute and deliver, or cause to be
executed and delivered, such other agreements, documents and instruments as may
be required by Agent to perfect the security interests of Agent in those
Accounts of an Account Debtor with its chief executive office or principal place
of business in Canada or the United Kingdom, as the case may be, in accordance
with the applicable laws of Canada or any province or territory of Canada or the
United Kingdom, as the case may be, in which such chief executive office or
principal place of business is located and take or cause to be taken such other
and further actions as Agent may request to enable Agent as secured party with
respect thereto to collect such Accounts under the applicable laws of Canada or
any province or territory of Canada or the United Kingdom, as the case may be)
or (ii) is not organized under the laws of the United States or any state
thereof or Canada or any province or territory thereof or the United Kingdom, or
(iii) is the government of any foreign country or sovereign state, or of any
state, province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof, unless
the Account is supported by an irrevocable letter of credit satisfactory to
Agent (as to form, substance, and issuer or domestic confirming bank) that has
been delivered to Agent and is directly drawable by Agent,
(g) Accounts with respect to which the Account
Debtor is either (i) the United States, or any department, agency, or
instrumentality of the United States, or (ii) any state of the United States
(exclusive, however, of Accounts owed by any state or province that does not
have a statutory counterpart to the Assignment of Claims Act), or (iii) Canada,
any province, territory, political subdivision, department, agency or
instrumentality thereof, unless the account debtor is Her Majesty in right of
Canada or any provincial or local Governmental Authority, or any ministry
thereof, and upon Agent's request, the Financial Administration Act, R.S.C. 185,
C.F-11, as amended or any similar applicable provincial or local law, regulation
or requirement, if applicable has been complied with in a manner reasonably
satisfactory to Agent, or (iv) Accounts owed by any province that does not have
a statutory counterpart to the Financial Administration Act, R.S.C. 185, C.F-11,
as amended, as to which such Borrower has complied to Agent's satisfaction.
(h) Accounts with respect to which the Account
Debtor is a creditor of any Loan Party, has or has asserted a right of setoff,
has disputed its liability, has made any claim with respect to its obligation to
pay the Account, or is subject to a chargeback, debit memo, accrued rebate or
other accrued liability to the extent of such claim, right of setoff, dispute,
chargeback, debit memo, accrued rebate or other accrued liability, unless such
creditor has delivered a non-offset letter in form and substance satisfactory to
Lenders,
(i) Accounts with respect to an Account Debtor
whose total obligations owing to Loan Parties in the aggregate exceed 10% (such
percentage as applied to a particular Account Debtor, provided, that, such
percentage shall be fifteen (15%) percent in the case where either Osram
Sylvania Lighting and its Affiliates or Philips Electronics
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Xxxxx Xxxxxxx Corporation and its Affiliates are, respectively, the Account
Debtors, in any case, being subject to reduction by Agent in its Permitted
Discretion if the creditworthiness of such Account Debtor deteriorates) of all
Eligible Accounts, to the extent of the obligations owing by such Account Debtor
in excess of such percentage,
(j) Accounts with respect to which the Account
Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of
business, or as to which a Loan Party has received notice of an imminent
Insolvency Proceeding or a material impairment of the financial condition of
such Account Debtor,
(k) Accounts with respect to which the Account
Debtor is located in the states of New Jersey, Minnesota, or West Virginia (or
any other state that requires a creditor to file a business activity report or
similar document in order to bring suit or otherwise enforce its remedies
against such Account Debtor in the courts or through any judicial process of
such state), unless the applicable Loan Party has qualified to do business in
New Jersey, Minnesota, West Virginia, or such other states, or has filed a
business activities report with the applicable division of taxation, the
department of revenue, or with such other state offices, as appropriate, for the
then-current year, or is exempt from such filing requirement,
(l) Accounts, the collection of which, Agent, in
its Permitted Discretion, believes to be doubtful by reason of the Account
Debtor's financial condition,
(m) Accounts that are not subject to a valid and
perfected first priority Agent's Lien,
(n) Accounts with respect to which (i) the goods
giving rise to such Account have not been shipped and billed to the Account
Debtor, or (ii) the services giving rise to such Account have not been performed
and billed to the Account Debtor,
(o) Accounts that represent the right to receive
progress payments (other than progress payments of DSI for work that has been
completed) or other advance xxxxxxxx that are due prior to the completion of
performance by the applicable Borrower of the subject contract for goods or
services,
(p) Accounts not payable to a Borrower, Canadian
Guarantor, a UK Guarantor or DSI, or
(q) Accounts of a Non-operating Borrower.
Notwithstanding anything in this definition to the
contrary, in the event that an Insolvency Proceeding is commenced by or against
Canadian Guarantor, DSI, or any UK Guarantor, without limitation of Lender
Group's other rights and remedies hereunder, no Accounts of such Canadian
Guarantor, DSI or UK Guarantor, as applicable, shall be deemed Eligible Accounts
until such time as a court having jurisdiction over such Insolvency Proceeding
enters an appropriate order recognizing the first priority of Agent's Lien on
such Accounts and allowing for collection of the proceeds of such Accounts by
Agent for
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application to the Obligations, which Obligations shall be joint and several
obligations of Canadian Guarantor, DSI, and UK Guarantors, as applicable.
"Eligible Equipment" means Equipment of Borrowers, DSI and
Canadian Guarantor located at one of the business locations of such Persons set
forth on Schedule E-2, that complies with each of the representations and
warranties respecting Eligible Equipment made by Borrower in the Loan Documents,
and that is not excluded as ineligible by virtue of one or more of the criteria
set forth below; provided, however, that such criteria may be established and
revised from time to time by Agent in Agent's Permitted Discretion to address
the results of any audit or appraisal performed by Agent from time to time after
the Closing Date. In determining the amount to be included, Equipment shall be
valued based upon the Net Liquidation Percentage times the most recent appraised
value of such Equipment, which appraisal shall be based upon the orderly
liquidation value of such Equipment. An item of Equipment shall not be included
in Eligible Equipment if:
(a) Borrowers, DSI or Canadian Guarantor do not
have good, valid, and marketable title thereto,
(b) it is not located at one of the locations
set forth on Schedule E-2,
(c) it is located on real property leased by
Borrowers, DSI or Canadian Guarantor, unless it is subject to a Collateral
Access Agreement executed by the lessor, or other third party, as the case may
be, and unless it is segregated or otherwise separately identifiable from goods
of other Persons, if any, stored on the premises,
(d) it is not subject to a valid and perfected
first priority Agent's Lien,
(e) it is substantially worn, damaged, defective
or obsolete, or it constitutes furnishings, parts, fixtures or is affixed to
real property, unless such Equipment is affixed to Real Property that comprises
Real Property Collateral,
(f) the Agent has not received evidence of the
property insurance required by this Agreement with respect to such Equipment, or
(g) it is subject to a lease with any person.
Notwithstanding anything in this definition to the contrary,
in the event that an Insolvency Proceeding is commenced by or against Canadian
Guarantor or DSI, without limitation of Lenders Group's other rights and
remedies hereunder, no Equipment of such Canadian Guarantor or DSI, as
applicable, shall be deemed Eligible Equipment until such time as a Court having
jurisdiction over such Insolvency Proceeding enters an appropriate order
recognizing the first priority of Agent's Lien on such Equipment and allowing
for collection of the proceeds of such Equipment by Agent for application to the
Obligations,
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which Obligations shall be joint and several obligations of Canadian Guarantor
and DSI, as applicable.
"Eligible Inventory" means Inventory of Borrowers, Canadian
Guarantor and DSI consisting of raw materials and first quality finished goods
held for sale in the ordinary course of such Borrowers', DSI's or Canadian
Guarantor's business located at one of the business locations of such Borrowers,
DSI or Canadian Guarantor set forth on Schedule E-1 that complies with each of
the representations and warranties respecting Eligible Inventory made by such
Borrowers, DSI or Canadian Guarantor in the Loan Documents, and that is not
excluded as ineligible by virtue of the one or more of the criteria set forth
below; provided, however, that such criteria may be fixed and revised from time
to time by Agent in Agent's Permitted Discretion to address the results of any
audit or appraisal performed by Agent from time to time after the Closing Date.
In determining the amount to be so included, Inventory shall be valued at the
lower of cost or market on a basis consistent with such Borrowers', DSI's or
Canadian Guarantor's historical accounting practices. An item of Inventory shall
not be included in Eligible Inventory if:
(a) a Borrower, Canadian Guarantor, or DSI does
not have good, valid, and marketable title thereto,
(b) it is not located at one of the locations in
the United States (in the case of Borrowers and DSI) or Canada (in the case of
Canadian Guarantor) set forth on Schedule E-1,
(c) it is located on real property leased by a
Borrower, Canadian Guarantor or DSI or in a contract warehouse, in each case,
unless it is subject to a Collateral Access Agreement executed by the lessor,
warehouseman, or other third party, as the case may be, and unless it is
segregated or otherwise separately identifiable from goods of others, if any,
stored on the premises,
(d) it is not subject to a valid and perfected
first priority security Agent's Lien,
(e) it consists of goods returned or rejected,
(f) it consists of goods that are obsolete or
slow moving, restrictive or custom items, work-in-process, or goods that
constitute spare parts, packaging and shipping materials, supplies used or
consumed in a Borrower's, Canadian Guarantor's or DSI's business, xxxx and hold
goods, defective goods, "seconds," or Inventory acquired on consignment,
provided that in Agent's Permitted Discretion, up to $500,000 of Inventory on
consignment may be Eligible Inventory if such Inventory is located in the
continental United States and is subject to a Collateral Access Agreement, or
(g) Inventory of a Non-operating Borrower.
Notwithstanding anything in this definition to the
contrary, in the event that an Insolvency Proceeding is commenced by or against
Canadian Guarantor or DSI,
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without limitation of Lender Group's other rights and remedies hereunder, no
Inventory of such Canadian Guarantor or DSI shall be deemed Eligible Inventory
until such time as a court having jurisdiction over such Insolvency Proceeding
enters an appropriate order recognizing the first priority of Agent's Lien on
such Inventory and allowing for collection of the proceeds of such Inventory by
Agent for application to the Obligations, which Obligations shall be joint and
several obligations of Canadian Guarantor and DSI, as applicable.
"Eligible Transferee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of
a Lender that was party hereto as of the Closing Date, including, without
limitation, a fund or account managed by such Lender or an Affiliate of such
Lender or its investment manager (a "Related Fund"), (e) so long as no Event of
Default has occurred and is continuing, any other Person approved by Agent and
Administrative Borrower, and (f) during the continuation of an Event of Default,
any other Person approved by Agent.
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations or alleged
violations of Environmental Law or releases of Hazardous Materials from (a) any
assets, properties, or businesses of any Loan Party or any predecessor in
interest, (b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by any Loan Party or any
predecessor in interest.
"Environmental Law" means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
permit, binding and enforceable guideline, binding and enforceable written
policy or rule of common law now or hereafter in effect and in each case as
amended, or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, to the extent
binding on any Loan Party, relating to the environment, human health, employee
health and safety, or Hazardous Materials, including CERCLA; RCRA; the Federal
Water Pollution Control Act, 33 USC Section 1251 et seq; the Toxic Substances
Control Act, 15 USC, Section 2601 et seq; the Clean Air Act, 42 USC Section 7401
et seq.; the Safe Drinking Water Act, 42 USC. Section 3803 et seq.; the Oil
Pollution Act of 1990, 33 USC. Section 2701 et seq.; the Emergency Planning and
the Community Right-to-Know Act of 1986, 42 USC. Section 11001 et seq.; the
Hazardous Material Transportation Act, 49 USC Section 1801 et seq.; and the
Occupational Safety and Health Act, 29 USC. Section 651 et seq. (to the extent
it regulates occupational exposure to Hazardous
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Materials); the Canadian Environmental Protection Act (Canada); the Fisheries
Act (Canada); the Transportation of Dangerous Goods Act (Canada); the
Environment Act (Nova Scotia); and any state, provincial and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants,
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"Equipment" means all of Borrowers' now owned or hereafter
acquired right, title, and interest with respect to equipment, machinery,
machine tools, motors, furniture, furnishings, fixtures, vehicles (including
motor vehicles), computer hardware, tools, parts, and goods (other than consumer
goods, farm products, or Inventory), wherever located, including all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Loan Party under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
a Loan Party under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which a Loan Party is a member under
IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any Person subject to ERISA that is a party to an
arrangement with a Loan Party and whose employees are aggregated with the
employees of a Loan Party under IRC Section 414(o).
"ERISA Termination Event" shall mean (a) a Reportable Event
with respect to any Benefit Plan or Multiemployer Plan; (b) the withdrawal of
any Loan Party, any Subsidiary of any Loan Party or any ERISA Affiliate from a
Benefit Plan during a plan year in which such entity was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA; (c) the providing of notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA or the treatment of any amendment as a termination
under Section 4041(e) of ERISA; (d) the institution by the PBGC of proceedings
to terminate a Benefit Plan or Multiemployer Plan; (e) any event or condition
(i) that might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (ii) that may result in
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termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (f)
the partial or complete withdrawal, within the meaning of Sections 4203 and 4205
of ERISA, of any Loan Party, any Subsidiary of any Loan Party or any ERISA
Affiliate from a Multiemployer Plan.
"Event of Default" has the meaning set forth in Section 8.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to Availability minus the aggregate
amount, if any, of all trade payables of Canadian Guarantor and UK Guarantor
aged in excess of their historical levels with respect thereto and all book
overdrafts in excess of their historical practices with respect thereto, all
post-petition trade payables of Borrowers aged in excess of their historical
post-petition levels with respect thereto and all book overdrafts in excess of
their historical post-petition practices with respect thereto, in each case as
determined by Agent in its Permitted Discretion.
"Exchange Act" means the Securities Exchange Act of 1934, as
in effect from time to time.
"Expenses Letter" means that certain letter regarding expenses
of Agent and the Lender Group, dated as of May 13, 2003, from Parent to Agent
and Ableco.
"Extraordinary Receipts" means any Collections received by a
Loan Party or any of its Subsidiaries not in the ordinary course of business
(and not consisting of proceeds described in Section 2.4(c)(ii) hereof),
including, (a) foreign, United States, state or local tax refunds, (b) pension
plan reversions, (c) proceeds of insurance (including proceeds of the key man
life insurance policies), (d) judgments, proceeds of settlements or other
consideration of any kind in connection with any cause of action, (e)
condemnation awards (and payments in lieu thereof), (f) indemnity payments and
(g) any purchase price adjustment received in connection with any purchase
agreement.
"Family Member" means, with respect to any individual, any
other individual having a relationship by blood (to the second degree of
consanguinity), marriage, or adoption to such individual.
"Family Trusts" means, with respect to any individual, trusts
or other estate planning vehicles established for the benefit of Family Members
of such individual and in respect of which such individual serves as trustee or
in a similar capacity.
"FEIN" means Federal Employer Identification Number.
"Final Financing Order" means the Final Order Pursuant to
Section 364(c) of the Bankruptcy Code and Rule 4001 of the Federal Rules of
Bankruptcy Procedure Authorizing Debtors to Obtain Post-Petition Financing,
Granting Senior Liens and Priority Administrative Expense Status, modifying the
Automatic Stay and Authorizing Debtor to Enter Into Agreements with Lender
Group, entered by the Bankruptcy Court in the Chapter 11 Cases, which order
shall be in form, scope and substance acceptable to Lender Group and
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which order shall be in full force and effect and shall not have been vacated,
modified, amended (without the express written joinder or consent of Lender
Group), reversed, overturned or stayed in any respect, and, in the event that
such order is the subject of a stay pending appeal, the performance of any
obligation of Borrowers shall not be the subject of a stay pending appeal.
"Foothill" means Xxxxx Fargo Foothill, Inc., a California
corporation.
"Foreign Subsidiaries" means, collectively, the Other Foreign
Subsidiaries and the Additional Foreign Subsidiaries.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section
2.13(b)(ii).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"General Intangibles" means, with respect to any Person, all
of such Person's now owned or hereafter acquired right, title, and interest with
respect to general intangibles (including payment intangibles, contract rights,
rights to payment, rights arising under common law, statutes, or regulations,
choses or things in action, goodwill, patents, trade names, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, infringement claims,
computer programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, money, deposit accounts, insurance premium
rebates, tax refunds, and tax refund claims), and any and all supporting
obligations in respect thereof, and any other personal property other than
goods, Accounts, Investment Property, and Negotiable Collateral.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, national, state,
provincial, local, or other governmental or administrative body,
instrumentality, department, or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body.
"Guarantor" means the direct and indirect Subsidiaries of
Parent designated as "Guarantors" on Schedule G-1 attached hereto.
"Guaranty" means a general continuing guaranty executed and
delivered by a Guarantor in favor of Agent, for the benefit of the Lender Group,
in form and substance satisfactory to Agent.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous
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substances," "hazardous materials," "hazardous wastes," "toxic substances," or
any other formulation intended to define, list, or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, or "EP toxicity", (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids, synthetic gas,
drilling fluids, produced waters, and other wastes associated with the
exploration, development, or production of crude oil, natural gas, or geothermal
resources, (c) any flammable substances or explosives or any radioactive
materials, and (d) asbestos in any form or electrical equipment that contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of 50 parts per million, and any other substance, the storage,
manufacture, disposal, treatment, generation, use, transportation, remediation,
release into or concentration in the environment of which is prohibited,
controlled, regulated or licensed by any Governmental Authority with
jurisdiction over a Loan Party under any Environmental Law applicable to such
Loan Party.
"Hedge Agreement" means any and all transactions, agreements,
or documents now existing or hereafter entered into between Administrative
Borrower or its Subsidiaries and Xxxxx Fargo or its Affiliates, which provide
for an interest rate, credit, commodity or equity swap, cap, floor, collar,
forward foreign exchange transaction, currency swap, cross currency rate swap,
currency option, or any combination of, or option with respect to, these or
similar transactions, for the purpose of hedging Administrative Borrower's or
its Subsidiaries' exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.
"Xxxxxxx Note" means that certain Secured Promissory Note
dated October 8, 1996, made by Xxxxx Xxxxxxx in favor of Parent, in the original
principal amount of $9,000,000 pursuant to that certain Loan Agreement dated as
of October 8, 1998, by and between Xxxxx Xxxxxxx and Parent, as amended,
modified, supplemented and extended from time to time.
"Indebtedness" means (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, interest rate swaps, Hedge Agreements, or other
financial products, (c) all obligations under Capital Leases, (d) all
obligations or liabilities of others secured by a Lien on any asset of
Administrative Borrower or its Subsidiaries, irrespective of whether such
obligation or liability is assumed, (e) all obligations for the deferred
purchase price of assets (other than trade debt incurred in the ordinary course
of business and repayable in accordance with customary trade practices), and (f)
any obligation guaranteeing or intended to guarantee (whether directly or
indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any
obligation of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section
11.3.
"Indemnified Person" has the meaning set forth in Section
11.3.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
national, state
-22-
provincial, territorial or federal bankruptcy or insolvency law, assignments for
the benefit of creditors, formal or informal moratoria, compositions, extensions
generally with creditors, or proceedings seeking reorganization, arrangement, or
other similar relief.
"Intangible Assets" means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be treated
as intangibles under GAAP.
"Intercompany Subordination Agreement" means a subordination
agreement executed and delivered by a Loan Party and certain Guarantors, as
applicable, and Agent, the form and substance of which is satisfactory to Agent.
"Interest Period" means, with respect to each LIBOR Rate Loan,
a period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, or 3 months thereafter; provided, however, that (a) if any Interest Period
would end on a day that is not a Business Day, such Interest Period shall be
extended (subject to clauses (c)-(e) below) to the next succeeding Business Day,
(b) interest shall accrue at the applicable rate based upon the LIBOR Rate from
and including the first day of each Interest Period to, but excluding, the day
on which any Interest Period expires, (c) any Interest Period that would end on
a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, or 3 months
after the date on which the Interest Period began, as applicable, and (e)
Borrowers (or Administrative Borrower on behalf thereof) may not elect an
Interest Period which will end after the Maturity Date.
"Internal Revenue Service" or "IRS" means the United States
Internal Revenue Service and any successor agency.
"Inventory" means, with respect to any Person, all of such
Person's now owned or hereafter acquired right, title, and interest with respect
to inventory, including goods held for sale or lease or to be furnished under a
contract of service, goods that are leased by such Person as lessor, goods that
are furnished by such Person under a contract of service, and raw materials,
work in process, or materials used or consumed in such Person's business.
"Inventory Reserves" means reserves (determined from time to
time by Agent in its Permitted Discretion) for (a) the estimated costs relating
to unpaid freight charges, warehousing or storage charges, taxes, duties, and
other similar unpaid costs, the payment of which is not stayed pursuant to
Section 362 of the Bankruptcy Code, associated with the acquisition of Eligible
Inventory by Loan Parties, plus (b) the estimated reclamation claims of unpaid
sellers of Inventory sold to Loan Parties.
"Investment" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances,
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or capital contributions (excluding (a) commission, travel, and similar advances
to officers and employees of such Person made in the ordinary course of
business, and (b) bona fide Accounts arising in the ordinary course of business
consistent with past practices), purchases or other acquisitions for
consideration of Indebtedness or Stock, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Investment Property" means, with respect to any Person, all
of such Person's now owned or hereafter acquired right, title, and interest with
respect to "investment property" as that term is defined in the Code, and any
and all supporting obligations in respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
"Law (or Laws)" means, in respect of Canada, the United States
of America and any other country, all published laws, statutes, codes,
ordinances, decrees, rules, regulations, by-laws, judicial or arbitral or
administrative or ministerial or departmental or regulatory judgments, orders,
decisions, rulings or awards, including general principles of common and civil
law, and conditions of any grant of approval, permission, authority or license
of any court, Governmental Authority, statutory body or self-regulatory
authority, and the term "applicable" with respect to those Laws and in the
context that refers to one or more Persons, means that those Laws apply to that
Person or Persons or its or their business, undertaking, property or securities.
"Issuing Lender" means Foothill or any other Lender that, at
the request of Administrative Borrower and with the consent of Agent agrees, in
such Lender's sole discretion, to become an Issuing Lender for the purpose of
issuing L/Cs or L/C Undertakings pursuant to Section 2.12.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section
2.12(a).
"Lender" and "Lenders" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by a Loan Party
under any of the Loan Documents that are paid or incurred by any one or more
members of the Lender Group, (b) fees or charges paid or incurred by any one or
more members of the Lender Group in
-24-
connection with the Lender Group's transactions with the Loan Parties,
including, fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
judgment, and UCC and PPSA searches and searches with the patent and trademark
office, the copyright office, or the department of motor vehicles), filing,
recording, publication, appraisal (including periodic Collateral appraisals or
business valuations to the extent of the fees and charges contained in this
Agreement, real estate surveys, real estate title policies and endorsements, and
environmental audits, (c) costs and expenses incurred by any one or more members
of the Lender Group in the disbursement of funds to or for the account of
Borrowers (by wire transfer or otherwise), (d) charges paid or incurred by Agent
resulting from the dishonor of checks, (e) reasonable costs and expenses paid or
incurred by any one or more members of the Lender Group to correct any default
or enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses of
any one or more members of the Lender Group related to audit examinations of the
Books to the extent of the fees and charges contained in this Agreement, (g)
fees and expenses of consultants retained by Lenders, (h) reasonable costs and
expenses of third party claims or any other suit paid or incurred by any one or
more members of the Lender Group in enforcing or defending the Loan Documents or
in connection with the transactions contemplated by the Loan Documents or any
one or more members of the Lender Group's relationship with any Borrower or any
guarantor of the Obligations, (i) Agent's and each Lender's reasonable fees and
expenses (including attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering, or amending the Loan Documents, and (j) Agent's and
each Lender's reasonable fees and expenses (including attorneys fees) incurred
in terminating, enforcing (including attorneys fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning any Loan Party or in exercising rights or remedies under the Loan
Documents), or defending the Loan Documents, irrespective of whether suit is
brought, or in taking any Remedial Action concerning the Collateral.
"Lender-Related Person" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, and the officers,
directors, employees, and agents of such Lender.
"Letter of Credit" means an L/C or an L/C Undertaking, as the
context requires.
"Letter of Credit Usage" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of Credit
plus 100% of the amount of outstanding time drafts accepted by an Underlying
Issuer as a result of drawings under Underlying Letters of Credit.
"LIBOR Deadline" has the meaning set forth in Section
2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit
L-1.
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"LIBOR Rate" means, for each Interest Period for each LIBOR
Rate Loan, the rate per annum determined by Agent (rounded upwards, if
necessary, to the next 1/16%) by dividing (a) the Base LIBOR Rate for such
Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage.
"LIBOR Rate Loan" means each portion of an Advance or Term
Loan that bears interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means three (3) percentage points.
"LIBOR Rate Term Loan A Margin" means five (5) percentage
points.
"Lien" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Lines of Business" means, collectively the ADLT Line of
Business, the APL Line of Business, the DSI Line of Business and the VL Line of
Business, and "Line of Business" means each of the foregoing, individually.
"Liquidation Proceeding" means any proceeding commenced by or
against any Loan Party under any provision of the Bankruptcy Code or other
insolvency law seeking liquidation of any Loan Party or substantially all of its
property or business or conversion of any of the Chapter 11 Cases to a case
under Chapter 7 of the Bankruptcy Code, or the appointment or designation of a
trustee, examiner, receiver or the like with respect to any Loan Party or its
business, properties or assets, including the Collateral in which Agent is
granted a Lien pursuant to this Agreement, the other Loan Documents or the Final
Financing Order, or similar relief.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the Bank Product
Agreements, the Cash Management Agreements, the Control Agreements, the
Copyright Security Agreement, the Guaranties, the Canadian Security Agreement,
the Letters of Credit, the Officers' Certificate, the Patent Security Agreement,
the Stock Pledge Agreement, the Trademark Security Agreement, the Intercompany
Subordination Agreement, Collateral Assignment of the Xxxxxxx Note and the Ruud
Notes and all collateral securing the Xxxxxxx Note and the Ruud Notes,
Collateral Assignment of any intercompany notes, any security agreements, or
pledge agreements, securing obligations of Guarantors to Agent and the Lender
Group, any
-26-
debentures securing obligations of UK Guarantors to Agent and the Lender Group,
any note or notes executed by a Borrower in connection with this Agreement and
payable to a member of the Lender Group, and any other agreement entered into,
now or in the future, by any Loan Party and the Lender Group in connection with
this Agreement.
"Loan Parties" means, collectively, Borrowers, DSI, Canadian
Guarantor and UK Guarantors and their respective successors and assigns. "Loan
Party" shall mean each such Person, individually, and such Person's permitted
successors and assigns.
"Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of any Loan Party (other than
Non-operating Borrowers), (b) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of any Line of Business individually or all Lines of
Business taken as a whole, (c) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or conditions
(financial or otherwise) of Parent and its Subsidiaries taken as a whole, (d) a
material impairment of a Loan Party's ability to perform its obligations under
the Loan Documents to which it is a party or of the Lender Group's ability to
enforce the Obligations or realize upon the Collateral, (e) a material
impairment of the enforceability or priority of the Agent's Liens with respect
to the Collateral as a result of an action or failure to act on the part of a
Loan Party, or (f) a material decline in the value of the Collateral taken as a
whole or the amount which Lender Group would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of the Collateral taken as a whole.
"Material Contract" means those contracts described on
Schedule M-1 and any contract or other arrangement (other than the Loan
Documents and related documents), whether written or oral, to which any Loan
Party is a party with respect to which breaches, non-performances, cancellations
or failures to renew by any party thereto singly or in the aggregate could
reasonably be expected to cause a Material Adverse Change.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means $18,500,000.
"Mortgages" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a
Borrower, Canadian Guarantor, and/or ADLT Realty in favor of Agent, for the
benefit of the Lender Group, in form and substance satisfactory to Agent, that
encumber the Real Property Collateral and the related improvements thereto.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA and (a) which is, or within the immediately
preceding six (6) years was, contributed to by a Loan Party or any ERISA
Affiliate or (b) with respect to which any Loan Party or any Subsidiary of any
Loan Party may incur any liability.
-27-
"Negotiable Collateral" means all of Borrowers' now owned and
hereafter acquired right, title, and interest with respect to letters of credit,
letter of credit rights, instruments, promissory notes, drafts, documents, and
chattel paper (including electronic chattel paper and tangible chattel paper),
and any and all supporting obligations in respect thereof.
"Net Cash Proceeds" means, with respect to any sale or
disposition by any Person or any Subsidiary thereof of property or assets, the
amount of Collections received (directly or indirectly) from time to time
(whether as initial consideration or through the payment of deferred
consideration) by or on behalf of such Person or such Subsidiary, in connection
therewith after deducting therefrom only (i) the amount of any Indebtedness
secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to
Agent or any Lender under this Agreement or the other Loan Documents and (B)
Indebtedness assumed by the purchaser of such asset) which is required to be,
and is, repaid in connection with such disposition, (ii) reasonable expenses
related thereto incurred by such Person or such Subsidiary in connection
therewith, and (iii) taxes paid or payable to any taxing authorities by such
Person or such Subsidiary in connection therewith, in each case to the extent,
but only to the extent, that the amounts so deducted are, at the time of receipt
of such cash, actually paid or payable to a Person that is not an Affiliate and
are properly attributable to such transaction.
"Net Liquidation Percentage" means the percentage of the Value
of Inventory or the appraised Value of Equipment, as the case may be, of the
applicable Loan Party that is estimated to be recoverable net of all liquidation
fees and expenses in an orderly liquidation of such Inventory or Equipment, as
the case may be, each such percentage to be as determined from time to time by a
qualified appraisal company selected by Agent after consultation with
Administrative Borrower.
"Non-operating Borrower" means any or all of Ballastronix
(Delaware), Inc., a Delaware corporation, Microsun Technologies Inc., an Ohio
corporation, Lighting Resources International, Inc., an Ohio corporation, and
ADLT Services, Inc., an Ohio corporation, each a debtor and a
debtor-in-possession.
"Obligations" means (a) all loans (including the Term Loans),
Advances, debts, principal, interest (including any interest (including interest
paid-in-kind) that, but for the provisions of the Bankruptcy Code, would have
accrued), contingent reimbursement obligations with respect to outstanding
Letters of Credit, premiums, liabilities (including all amounts charged to
Borrowers' Loan Account pursuant hereto), obligations, fees, charges, costs,
Lender Group Expenses (including any fees or expenses that, but for the
provisions of the Bankruptcy Code, would have accrued), lease payments,
guaranties, covenants, and duties of any kind and description owing by the Loan
Parties to the Lender Group pursuant to or evidenced by the Loan Documents and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including all interest not paid when due and all Lender Group Expenses that
the Loan Parties are required to pay or reimburse by the Loan Documents, by law,
or otherwise, and (b) all Bank Product Obligations. Any reference in this
Agreement or in the
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Loan Documents to the Obligations shall include all amendments, changes,
extensions, modifications, renewals replacements, substitutions, and
supplements, thereto and thereof, as applicable, both prior and subsequent to
any Insolvency Proceeding.
"Officers' Certificate" means the representations and
warranties of officers form submitted by Agent to Administrative Borrower,
together with Borrowers' completed responses to the inquiries set forth therein,
the form and substance of such responses to be satisfactory to Agent.
"Other Foreign Subsidiaries" means any of DSI India Private
Ltd., Venture Lighting India Limited and Venture Power Systems Private Ltd.,
each incorporated under the laws of India, APL Japan Co. Ltd., incorporated
under the laws of Japan, Lampway Direct Pty Ltd., incorporated under the laws of
Australia, Advanced Lighting Technologies (NZ) Ltd, incorporated under the laws
of New Zealand, Lighting Resources Holdings (Mauritius) Limited, incorporated
under the laws of Mauritius, Venture Lighting Southeast Asia Pty Ltd.,
incorporated under the laws of Singapore, and Advanced Lighting Technologies
Australia, Inc., an Ohio corporation.
"Originating Lender" has the meaning set forth in Section
14.1(e).
"Overadvance" has the meaning set forth in Section 2.5.
"Parent" has the meaning set forth in the preamble to this
Agreement.
"Participant" has the meaning set forth in Section 14.1(e).
"Participant Register" has the meaning set forth in Section
14.1(i).
"Patent Security Agreement" means a patent security agreement
executed and delivered by the Loan Parties and Agent, the form and substance of
which is satisfactory to Agent.
"Pay-Off Letter" means a letter, in form and substance
satisfactory to Agent, from Existing Lenders to Agent respecting the amount
necessary to repay in full all of the obligations of Borrowers owing to Existing
Lenders and obtain a release of all of the Liens existing in favor of Existing
Lender in and to the assets of the Loan Parties.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any Person succeeding to the functions thereof.
"Permitted Discretion" means a determination made in good
faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment.
"Permitted Dispositions" means (a) sales or other dispositions
by Loan Parties of Equipment that is substantially worn, damaged, or obsolete in
the ordinary course of business, (b) sales by a Loan Party of Inventory to
buyers in the ordinary course of business, (c) the use or transfer of money or
Cash Equivalents by Loan Parties and their Subsidiaries in
-29-
a manner that is not prohibited by the terms of this Agreement or the other Loan
Documents, and (d) the licensing by Loan Parties and their Subsidiaries, on a
non-exclusive basis, of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business.
"Permitted Expenses" means, collectively, (a) expenses of the
respective Borrowers and Guarantors, to the extent included in the Budget, (b)
fees required to be paid to the Office of the United States Trustee pursuant to
28 U.S.C. Section 1930(x), (c) fees payable to the clerk of the Bankruptcy
Court, and (d) compensation for services rendered or reimbursement of expenses
incurred that are permitted by the Bankruptcy Court to be paid under Sections
330 or 331 of the Bankruptcy Code to professionals retained pursuant to an order
of the Bankruptcy Court by the Borrowers or the Committee, but only to the
extent permitted in the applicable order of the Bankruptcy Court.
"Permitted Holder" means Xxxxx Xxxxxxx and his Family Members
and Family Trusts, Xxxx X. Xxxx and his Family Members and Family Trusts and
General Electric Company.
"Permitted Investment" means any of the following: (a) any
endorsement of a check or other medium of payment for deposit or collection
through normal banking channels or similar transaction in the normal course of
business; (b) any investment in direct obligations of the United States of
America or in certificates of deposit issued by a member bank of the Federal
Reserve System; (c) any investment in commercial paper or securities which at
the time of such investment is assigned the highest quality rating in accordance
with the rating systems employed by either Xxxxx'x or Standard & Poor's; (d) the
holding of the Subsidiaries, each of which is listed on Schedule 5.8(c); (e) the
making of loans or advances permitted under Section 7.13; (f) the Canadian
Intercompany Loan; (g) the UK Intercompany Loan; and (h) other Investments set
forth on Schedule 5.8(c).
"Permitted Liens" means (a) Liens held by Agent for the
benefit of Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are
not yet delinquent, or (ii) do not constitute an Event of Default hereunder and
are the subject of Permitted Protests, (c) Liens existing on the Petition Date
set forth on Schedule P-1, (d) the interests of lessors under operating leases,
(e) purchase money Liens or the interests of lessors under Capital Leases to the
extent that such Liens or interests secure Permitted Purchase Money Indebtedness
and so long as such Lien attaches only to the asset purchased or acquired and
the proceeds thereof, (f) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business and not in connection
with the borrowing of money, and which Liens either (i) are for sums not yet
delinquent, or (ii) are the subject of Permitted Protests, (g) Liens arising
from deposits made in connection with obtaining worker's compensation or other
unemployment insurance, (h) Liens or deposits to secure performance of bids,
tenders, or leases incurred in the ordinary course of business and not in
connection with the borrowing of money, (i) Liens granted as security for surety
or appeal bonds in connection with obtaining such bonds in the ordinary course
of business, (j) Liens resulting from any judgment or award that is not an Event
of Default hereunder, (k) Liens with respect to the Real Property Collateral
that are
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exceptions to the commitments for title insurance issued in connection with the
Mortgages, as accepted by Lenders, (l) with respect to any Real Property,
easements, rights of way, and zoning restrictions that do not materially
interfere with or impair the use or operation thereof, (m) Liens on cash
collateral securing the letters of credit issued by PNC Bank, N.A. in the Dollar
equivalent of L39,000.00 as set forth on Schedule P-2, and (n) Liens on
cash collateral securing certain value added tax obligations of the Loan Parties
in favor of Barclays Bank plc in the Dollar equivalent of L120,000.
"Permitted Protest" means the right of Administrative Borrower
or any of its Subsidiaries, as applicable, to protest any Lien (other than any
such Lien that secures the Obligations), taxes (other than payroll taxes or
taxes that are the subject of a United States or Canadian federal or provincial
tax lien), or rental payment, provided that (a) a reserve with respect to such
obligation is established on the Books in such amount as is required under GAAP,
(b) any such protest is instituted promptly and prosecuted diligently by
Administrative Borrower or any of its Subsidiaries, as applicable, in good
faith, and (c) Lenders are reasonably satisfied that, while any such protest is
pending, there will be no impairment of the enforceability, validity, or
priority of any of the Agent's Liens.
"Permitted Purchase Money Indebtedness" means, as of any date
of determination, Purchase Money Indebtedness incurred after the Closing Date in
an aggregate amount outstanding at any one time not in excess of $25,000.
"Person" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"Personal Property Collateral" means all Collateral other than
Real Property.
"Petition Date" means February 5, 2003.
"Petitions" means the petitions for relief under Chapter 11 of
the Bankruptcy Code filed by the Borrowers.
"PPSA" means the Personal Property Security Act of the
applicable Canadian province or provinces in respect of the Canadian Guarantor.
"Prior DIP Facility" means the debtor-in-possession credit
facility provided to Borrowers during the Chapter 11 Cases as evidenced by and
set forth in that certain Post-Petition Credit Agreement dated as of February 5,
2003, and all related agreements and documents, as thereafter amended and/or
assigned, by and among Borrowers, as borrowers, and the Prior Lenders, as
lenders, as approved by order of the Bankruptcy Court entered on March 13, 2003.
"Prior Lenders" means, collectively, PNC Bank, N.A., Sovereign
Bank and National City Commercial Finance, Inc.
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"Professional Fee Carve-Out" means a carve-out in an amount
acceptable to the Lenders for unpaid professional fees allowed by the Bankruptcy
Court in an amount to be determined, but in no event greater than $2,500,000.
"Prohibited Transaction" shall mean any transaction that is
prohibited under IRC Section 4975 or ERISA Section 408.
"Projections" means Parent's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with Parent's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions,
including, without limitation, the Closing Date Business Plan, and the Budget.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to
make Advances and receive payments of principal, interest, fees, costs, and
expenses with respect thereto, (x) prior to the Revolver Commitment being
reduced to zero, the percentage obtained by dividing (i) such Lender's Revolver
Commitment, by (ii) the aggregate Revolver Commitments of all Lenders, and (y)
from and after the time that the Revolver Commitment has been terminated or
reduced to zero, the percentage obtained by dividing (I) the aggregate principal
amount of such Lender's Advances by (II) the aggregate principal amount of all
Advances,
(b) with respect to a Lender's obligation to
participate in Letters of Credit, to reimburse the Issuing Lender, and to
receive payments of fees with respect thereto, (x) prior to the Revolver
Commitment being reduced to zero, the percentage obtained by dividing (i) such
Lender's Revolver Commitment, by (ii) the aggregate Revolver Commitments of all
Lenders, and (y) from and after the time that the Revolver Commitment has been
terminated or reduced to zero, the percentage obtained by dividing (I) the
aggregate principal amount of such Lender's Advances by (II) the aggregate
principal amount of all Advances,
(c) with respect to a Lender's obligation to
make Term Loan A and receive payments of interest, fees, and principal with
respect thereto, (i) prior to the making of Term Loan A, the percentage obtained
by dividing (x) such Lender's applicable Term Loan A Commitment, by (y) the
aggregate amount of all Lenders' applicable Term Loan A Commitments, and (ii)
from and after the making of Term Loan A, the percentage obtained by dividing
(x) the principal amount of such Lender's portion of the Term Loan A Amount by
(y) the Term Loan A Amount,
(d) with respect to a Lender's obligation to
make Term Loan B and receive payments of interest, fees, and principal with
respect thereto, (i) prior to the making of Term Loan B, the percentage obtained
by dividing (x) such Lender's applicable Term Loan B Commitment, by (y) the
aggregate amount of all Lenders' applicable Term Loan B Commitments, and (ii)
from and after the making of Term Loan B, the percentage obtained
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by dividing (x) the principal amount of such Lender's portion of the Term Loan B
Amount by (y) the Term Loan B Amount,
(e) with respect to all other matters as to a
particular Lender (including the indemnification obligations arising under
Section 16.7), the percentage obtained by dividing (i) such Lender's Revolver
Commitment plus the unpaid principal amount of such Lender's portion of the Term
Loan A Amount plus the unpaid principal amount of such Lender's portion of the
Term Loan B Amount, by (ii) the aggregate amount of Revolver Commitments of all
Lenders plus the Term Loan A Amount plus the Term Loan B Amount; provided,
however, that in the event the Revolver Commitments have been terminated or
reduced to zero, Pro Rata Share shall be the percentage obtained by dividing (A)
the principal amount of such Lender's Advances plus the unpaid principal amount
of such Lender's portion of the Term Loan A Amount plus the unpaid principal
amount of such Lender's portion of the Term Loan B Amount by (B) the principal
amount of all outstanding Advances plus the Term Loan A Amount plus the Term
Loan B Amount.
"Purchase Money Indebtedness" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations) incurred at the
time of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"Real Property" means, with respect to any Person, any estates
or interests in real property of such Person now owned or hereafter acquired and
the improvements thereto.
"Real Property Collateral" means the parcel or parcels of Real
Property identified on Schedule R-1 and any Real Property hereafter acquired by
a Loan Party.
"Record" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Register" has the meaning set forth in Section 14.1(h).
"Registered Loan" has the meaning set forth in Section 2.20.
"Registered Note" has the meaning set forth in Section 2.20.
"Related Fund" has the meaning set forth in the definition of
"Eligible Transferee".
"Remedial Action" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
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"Report" has the meaning set forth in Section 16.17.
"Reportable Event" shall mean any of the events described in
Section 4043 of ERISA and the regulations thereunder.
"Required Availability" means Excess Availability in an amount
of not less than $3,500,000.
"Required Lenders" means, at any time, Lenders whose Pro Rata
Share aggregate 51% or more as determined pursuant to clause (e) of the
definition of "Pro Rata Share"; provided that (a) so long as Foothill and its
Affiliates hold not less than 30% of the aggregate principal amount of the sum
of (i) the Revolver Commitment, or if this Revolver Commitment has been
terminated or reduced to zero, the extent Revolver Usage and (ii) the Term Loan
A, "Required Lenders" shall include Foothill, and (b) so long as Ableco and its
Affiliates or funds, money market accounts, investment accounts, or other
account managed by Ableco or its Affiliates hold not less than 30% of the
aggregate principal amount of the Term Loan B, "Required Lenders" shall include
Ableco.
"Required Revolver Lenders" means Lenders whose Pro Rata
Shares aggregate 51% of the Revolver Commitment and the Term Loan A Commitment.
"Reserve Percentage" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Revolver Commitment" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Revolver Usage" means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, plus (b) the then
extant amount of the Letter of Credit Usage.
"Risk Participation Liability" means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
by Borrowers, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
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"Ruud Notes" means, collectively, that certain Callable
Promissory Note dated December 12, 2001 made by Xxxx X. Xxxx in favor of Parent
in the original principal amount of $1,503,000, that certain Callable Promissory
Note dated December 12, 2001 made by Xxxxxxxxxxx X. Xxxx in favor of Parent in
the original principal amount of $897,000, that certain Callable Promissory Note
dated December 12, 2001 made by Xxxxxxxx X. Xxxxxx in favor of Parent in the
original principal amount of $300,000, that certain Callable Promissory Note
dated December 12, 2001 made by Xxxxxxx X. Xxxxxxx in favor of Parent in the
original principal amount of $300,000, and that certain Subordinated Promissory
Note dated December 12, 2001, made by Ruud Lighting, Inc. in favor of Parent, in
the original principal amount of $3,000,000.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"Securities Account" means a "securities account" as that term
is defined in the Code.
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section
2.3(f)(i).
"Solvent" means, with respect to any Person on a particular
date, that such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"Special Administrative Claims" means, collectively, any
administrative claims in the Chapter 11 Cases, the non-payment of which Lenders
determine, in their Permitted Discretion, might cause an impairment in the value
of the Collateral, including, without limitation, administrative claims that
will be payable in the Chapter 11 Cases that are identified by Borrowers.
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"Stock Pledge Agreement" means a stock pledge agreement, in
form and substance satisfactory to Agent, executed and delivered by each Loan
Party and Guarantor that owns Stock of a Subsidiary of Parent; it being
acknowledged that, the stock pledge agreement delivered with respect to each
Subsidiary that is not a Loan Party or Guarantor will xxxxx x Xxxx in favor of
Agent on 66-2/3% of each such Subsidiary's Stock.
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
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"Swing Lender" means Foothill or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Taxes" has the meaning set forth in Section 16.11.
"Term Loan" means, individually, Term Loan A and Term Loan B,
as appropriate, and "Term Loans" means, collectively, Term Loan A and Term Loan
B.
"Term Loan A" has the meaning set forth in Section 2.2(a).
"Term Loan A Amount" means an amount equal to the lesser of
(a) $5,000,000 and (b) the sum of 80% times the Net Liquidation Percentage times
the net appraised value of Eligible Equipment.
"Term Loan A Commitment" means, with respect to each Lender,
its Term Loan A Commitment, and, with respect to all Lenders, their Term Loan A
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Term Loan B" has the meaning set forth in Section 2.2(b).
"Term Loan B Amount" means $13,500,000.
"Term Loan B Commitment" means, with respect to each Lender,
its Term Loan B Commitment, and, with respect to all Lenders, their Term Loan B
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Total Commitment" means, with respect to each Lender, its
Total Commitment, and, with respect to all Lenders, their Total Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-1 attached hereto or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"Trademark Security Agreement" means a trademark security
agreement executed and delivered by each of the Loan Parties and Guarantors and
Agent, the form and substance of which is satisfactory to Agent.
"UK Dilution" means, as of any date of determination, a
percentage, based upon the experience of the immediately prior three (3) month
period, that is the result of
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dividing (a) the Dollar equivalent amount of bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to the UK
Guarantors' Accounts during such period, by (b) UK Guarantors' xxxxxxxx with
respect to Accounts during such period.
"UK Dilution Reserve" means, as of any date of determination,
an amount sufficient to reduce the advance rate against Eligible Accounts of UK
Guarantors by one percentage point for each percentage point by which UK
Dilution is in excess of 5%.
"UK Guarantor Base" means, collectively, as of any date of
determination the sum of:
(a) the least of
(x) $4,000,000,
(y) eighty-five percent (85%)
of the amount of Eligible Accounts of UK
Guarantors, less the aggregate amount, if
any, of the UK Dilution Reserve, and
(z) an amount equal to
Collections of UK Guarantors with respect to
Accounts for the immediately preceding 90
days,
minus
(b) the aggregate amount of reserves, if any,
established by Agent under Section 2.1(b ).
"UK Guarantors" means, collectively, Parry Power Systems
Limited and Venture Lighting Europe Ltd., each incorporated under the laws of
the United Kingdom.
"UK Intercompany Loan" means a loan made by Administrative
Borrower to UK Guarantors on the Closing Date in an amount sufficient to pay in
full all obligations of UK Guarantors to the Prior Lenders but in any event not
exceeding $3,950,000. The UK Intercompany Loan shall remain fully outstanding
until, and shall be due and payable on, the date of termination of this
Agreement whether by its terms, by prepayment or by acceleration.
"Underlying Issuer" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the benefit of Borrowers.
"Underlying Letter of Credit" means a letter of credit that
has been issued by an Underlying Issuer.
"Value" means the Dollar equivalent, as determined by Agent in
good faith, with respect to Inventory, of the lower of (a) cost computed on a
first-in first-out basis in accordance with GAAP or (b) market value, provided,
that, for purposes of the calculation
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of the Borrowing Base, (i) the Value of the Inventory shall not include
write-ups or write-downs in value with respect to currency exchange rates and
(ii) notwithstanding anything to the contrary contained herein, the cost of the
Inventory shall be computed in the same manner and consistent with the most
recent appraisal and/or audit of the Inventory received and accepted by Agent
prior to the date hereof, if any.
"VL" means Venture Lighting International, Inc., an Ohio
corporation, a debtor and debtor-in-possession.
"VL Line of Business" means the aggregate operations of VL,
Venture Lighting Europe, Ltd., Venture Lighting India Limited, Venture Lighting
Systems, North America Inc., and Advanced Lighting Technologies Australia, Inc.
as detailed in the Budget.
"Voidable Transfer" has the meaning set forth in Section 17.7.
"Weekly Budget" means the Budget (including for each of the
ADLT Line of Business, the APL Line of Business, the DSI Line of Business, and
the VL Line of Business, sales, collections and disbursements) for the Borrowers
and DSI, on an aggregated basis, for the applicable week, as reviewed by the
Parkland Group or another financial consultant acceptable to Lender Group in its
sole discretion.
"Xxxxx Fargo" means Xxxxx Fargo Bank, National Association, a
national banking association.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrowers" or the term "Parent" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals,
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replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein to any Person shall be construed to include such Person's
successors and assigns. Any requirement of a writing contained herein or in the
other Loan Documents shall be satisfied by the transmission of a Record and any
Record transmitted shall constitute a representation and warranty as to the
accuracy and completeness of the information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances ("Advances")
to the Administrative Borrower for the benefit of Borrowers in an amount at any
one time outstanding not to exceed such Lender's Pro Rata Share of an amount
equal to the lesser of (i) the Maximum Revolver Amount less the Letter of Credit
Usage, or (ii) the Borrowing Base less the Letter of Credit Usage and the
aggregate amount of the Inventory Reserves, if any, applicable to such
Borrowers.
(b) Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right to establish reserves (and shall
establish reserves pursuant to clause (iii) below upon the request of Ableco) in
such amounts, and with respect to such matters, as Agent (or Ableco, in respect
of clause (iii) hereinbelow) in its Permitted Discretion shall deem necessary or
appropriate, against the Borrowing Base, including reserves with respect to (i)
sums that any Loan Party is required to pay (such as taxes, assessments,
insurance premiums, or, in the case of leased assets, rents or other amounts
payable under such leases including any amounts subject to a Permitted Protest)
and has failed to pay under any Section of this Agreement or any other Loan
Document, (ii) amounts owing by any Loan Party to any Person to the extent
secured by a Lien on, or trust over, any of the Collateral (other than any
existing Permitted Lien set forth on Schedule P-1 which is specifically
identified thereon as entitled to have priority over the Agent's Liens), which
Lien or trust, in the Permitted Discretion of Agent likely would have a priority
superior to the Agent's Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral, (iii) to reflect
the Special Administrative Claims, (iv) to reflect the amount by which the UK
Intercompany Loan exceeds the UK Guarantor Base at any time and from time to
time, and (v) to reflect the amount by which the Canadian Intercompany Loan
exceeds the Canadian Guarantor Base at any time and from time to time. In
addition to the foregoing, Agent shall have the right to have the Inventory
reappraised by a qualified appraisal company selected by Agent after
consultation with Administrative Borrower from time to time after the Closing
Date for the purpose of redetermining the Net Liquidation Percentage of the
Eligible Inventory portion of the Collateral and, as a result, redetermining the
Borrowing Base.
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(c) Lenders with Revolver Commitments shall have no obligation
to make additional Advances to Administrative Borrower or any Borrower hereunder
to the extent such additional Advances (i) would cause Revolver Usage to exceed
the Borrowing Base (the amount of such excess hereafter referred to as the
"Credit Facility Deficit") or (ii) would cause the Revolver Usage to exceed the
Maximum Revolver Amount, or (iii) would cause the sum of the Revolver Usage plus
the aggregate principal amount of the Term Loans (including capitalized interest
paid-in-kind in respect of Term Loan B) then outstanding to exceed 2.75 times
the trailing 12 month Adjusted EBITDA of Parent and its Subsidiaries for the
immediately preceding 12 month period (the amount of such excess is hereafter
referred to as the "EBITDA Deficit").
(d) Amounts borrowed pursuant to this Section may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed at any
time during the term of this Agreement.
(e) Agent may disburse Advances to such bank account of
Administrative Borrower or a Borrower or otherwise make such Advances to a
Borrower and provide such Letters of Credit to a Borrower as Administrative
Borrower may designate or direct, without notice to any other Borrower.
Notwithstanding anything to the contrary contained herein, Agent may at any time
and from time to time require that Advances to or for the account of any
Borrower be disbursed directly to an operating account of such Borrower.
2.2 TERM LOANS.
(a) TERM LOAN A. Subject to the terms and conditions of this
Agreement, on the Closing Date each Lender with a Term Loan A Commitment agrees
(severally, not jointly or jointly and severally) to make term loans
(collectively, "Term Loan A") to Borrowers in an amount equal to such Lender's
Pro Rata Share of the Term Loan A Amount. Term Loan A shall be repaid in
consecutive monthly installments commencing on the first day of the calendar
month occurring 90 days after the Closing Date, in an amount equal to $83,334
each. The outstanding unpaid principal balance and all accrued and unpaid
interest under Term Loan A shall be due and payable on the date of termination
of this Agreement, whether by its terms, by prepayment, or by acceleration. All
amounts outstanding under Term Loan A shall constitute Obligations.
(b) TERM LOAN B. Subject to the terms and conditions of this
Agreement, on the Closing Date each Lender with a Term Loan B Commitment agrees
(severally, not jointly or jointly and severally) to make term loans
(collectively, "Term Loan B") to Borrowers in an amount equal to such Lender's
Pro Rata Share of the Term Loan B Amount. The outstanding unpaid principal
balance and all accrued and unpaid interest under Term Loan B shall be due and
payable on the date of termination of this Agreement, whether by its terms, by
prepayment, or by acceleration. All amounts outstanding under Term Loan B shall
constitute Obligations.
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2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by
an irrevocable written request by an Authorized Person delivered to Agent (which
notice must be received by Agent no later than 1:00 p.m. (New York time) on the
Business Day prior to the date that is the requested Funding Date (or in the
case of a request for an Advance in an amount of $1,000,000 or less, 1:00 p.m.
(New York time) on such requested Funding Date) in the case of a request for an
Advance specifying (i) the amount of such Borrowing, and (ii) the requested
Funding Date, which shall be a Business Day; provided, however, that in the case
of a request for Swing Loan in an amount of $1,850,000, or less, such notice
will be timely received if it is received by Agent no later than 1:00 p.m. (New
York time) on the Business Day that is the requested Funding Date). At Agent's
election, in lieu of delivering the above-described written request, any
Authorized Person may give Agent telephonic notice of such request by the
required time, with such telephonic notice to be confirmed in writing within 24
hours of the giving of such notice.
(b) AGENT'S ELECTION. Promptly after receipt of a request for
a Borrowing pursuant to Section 2.3(a), Agent shall elect, in its discretion,
(i) to have the terms of Section 2.3(c) apply to such requested Borrowing, or
(ii) if the Borrowing is for an Advance, to request Swing Lender to make a Swing
Loan pursuant to the terms of Section 2.3(d) in the amount of the requested
Borrowing; provided, however, that if Swing Lender declines in its sole
discretion to make a Swing Loan pursuant to Section 2.3(d), Agent shall elect to
have the terms of Section 2.3(c) apply to such requested Borrowing.
(c) MAKING OF ADVANCES.
(i) In the event that Agent shall elect to have
the terms of this Section 2.3(c) apply to a requested
Borrowing as described in Section 2.3(b), then promptly after
receipt of a request for a Borrowing pursuant to Section
2.3(a), Agent shall notify the Lenders, not later than 4:00
p.m. (New York time) on the Business Day immediately preceding
the Funding Date applicable thereto, by telecopy, telephone,
or other similar form of transmission, of the requested
Borrowing. Each Lender shall make the amount of such Lender's
Pro Rata Share of the requested Borrowing available to Agent
in immediately available funds, to Agent's Account, not later
than 1:00 p.m. (New York time) on the Funding Date applicable
thereto. After Agent's receipt of the proceeds of such
Advances upon satisfaction of the applicable conditions
precedent set forth in Section 3 hereof, Agent shall make the
proceeds thereof available to Administrative Borrower on the
applicable Funding Date by transferring immediately available
funds equal to such proceeds received by Agent to
Administrative Borrower's Designated Account; provided,
however, that, subject to the provisions of Section 2.3(i),
Agent shall not request any Lender to make, and no Lender
shall make, any Advance if Agent shall have actual knowledge
that (1) one or more of the applicable conditions precedent
set forth in Section 3 will not be satisfied on the requested
Funding Date for the
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applicable Borrowing unless such condition has been waived, or
(2) the requested Borrowing would exceed the Availability on
such Funding Date.
(ii) Unless Agent receives notice from a Lender
on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least 1 Business Day
prior to the date of such Borrowing, that such Lender will not
make available as and when required hereunder to Agent for the
account of Borrowers the amount of that Lender's Pro Rata
Share of the Borrowing, Agent may assume that each Lender has
made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may
(but shall not be so required), in reliance upon such
assumption, make available to Borrowers on such date a
corresponding amount. If and to the extent any Lender shall
not have made its full amount available to Agent in
immediately available funds and Agent in such circumstances
has made available to Borrowers such amount, that Lender shall
on the Business Day following such Funding Date make such
amount available to Agent, together with interest at the
Defaulting Lender Rate for each day during such period. A
notice submitted by Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available,
such payment to Agent shall constitute such Lender's Advance
on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify
Administrative Borrower of such failure to fund and, upon
demand by Agent, Borrowers shall pay such amount to Agent for
Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable at the time to the
Advances composing such Borrowing. The failure of any Lender
to make any Advance on any Funding Date shall not relieve any
other Lender of any obligation hereunder to make an Advance on
such Funding Date, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by
such other Lender on any Funding Date.
(iii) Agent shall not be obligated to transfer to
a Defaulting Lender any payments made by Borrowers to Agent
for the Defaulting Lender's benefit, and, in the absence of
such transfer to the Defaulting Lender, Agent shall transfer
any such payments to each other non-Defaulting Lender member
of the Lender Group ratably in accordance with their
Commitments (but only to the extent that such Defaulting
Lender's Advance was funded by the other members of the Lender
Group) or, if so directed by Administrative Borrower and if no
Default or Event of Default had occurred and is continuing
(and to the extent such Defaulting Lender's Advance was not
funded by the Lender Group), retain same to be re-advanced to
Borrowers as if such Defaulting Lender had made Advances to
Borrowers. Subject to the foregoing, Agent may hold and, in
its Permitted Discretion, re-lend to Borrowers for the account
of such Defaulting Lender the amount of all such payments
received and
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retained by it for the account of such Defaulting Lender.
Solely for the purposes of voting or consenting to matters
with respect to the Loan Documents, such Defaulting Lender
shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero. This Section shall
remain effective with respect to such Lender until (x) the
Obligations under this Agreement shall have been declared or
shall have become immediately due and payable, (y) the
non-Defaulting Lenders, Agent, and Administrative Borrower
shall have waived such Defaulting Lender's default in writing,
or (z) the Defaulting Lender makes its Pro Rata Share of the
applicable Advance and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this
Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of
its duties and obligations hereunder, or to relieve or excuse
the performance by Borrowers of their duties and obligations
hereunder to Agent or to the Lenders other than such
Defaulting Lender. Any such failure to fund by any Defaulting
Lender shall constitute a material breach by such Defaulting
Lender of this Agreement and shall entitle Administrative
Borrower at its option, upon written notice to Agent, to
arrange for a substitute Lender to assume the Commitment of
such Defaulting Lender, such substitute Lender to be
acceptable to Agent. In connection with the arrangement of
such a substitute Lender, the Defaulting Lender shall have no
right to refuse to be replaced hereunder, and agrees to
execute and deliver a completed form of Assignment and
Acceptance Agreement in favor of the substitute Lender (and
agrees that it shall be deemed to have executed and delivered
such document if it fails to do so) subject only to being
repaid its share of the outstanding Obligations (other than
Bank Product Obligations) (including an assumption of its Pro
Rata Share of the Risk Participation Liability) without any
premium or penalty of any kind whatsoever; provided further,
however, that any such assumption of the Commitment of such
Defaulting Lender shall not be deemed to constitute a waiver
of any of the Lender Groups' or Borrowers' rights or remedies
against any such Defaulting Lender arising out of or in
relation to such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the
consent of Swing Lender, as a Lender, to have the terms of
this Section 2.3(d) apply to a requested Borrowing as
described in Section 2.3(b), Swing Lender as a Lender shall
make such Advance in the amount of such Borrowing (any such
Advance made solely by Swing Lender as a Lender pursuant to
this Section 2.3(d) being referred to as a "Swing Loan" and
such Advances being referred to collectively as "Swing Loans")
available to Borrowers on the Funding Date applicable thereto
by transferring immediately available funds to Administrative
Borrower's Designated Account. Each Swing Loan is an Advance
hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that no such Swing Loan
shall be eligible
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for the LIBOR Option and all payments on any Swing Loan shall
be payable to Swing Lender as a Lender solely for its own
account (and for the account of the holder of any
participation interest with respect to such Swing Loan).
Subject to the provisions of Section 2.3(i), Agent shall not
request Swing Lender as a Lender to make, and Swing Lender as
a Lender shall not make, any Swing Loan if Agent has actual
knowledge that (i) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless
such condition has been waived, or (ii) the requested
Borrowing would exceed the Availability on such Funding Date.
Swing Lender as a Lender shall not otherwise be required to
determine whether the applicable conditions precedent set
forth in Section 3 have been satisfied on the Funding Date
applicable thereto prior to making, in its sole discretion,
any Swing Loan.
(ii) The Swing Loans shall be secured by the
Agent's Liens, shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Loan Parties
and the Lenders, from time to time in Agent's sole discretion,
(1) after the occurrence and during the continuance of a
Default or an Event of Default, or (2) at any time that any of
the other applicable conditions precedent set forth in Section
3 have not been satisfied, to make Advances to Borrowers on
behalf of the Lenders that Agent, in its Permitted Discretion
deems necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the
likelihood of repayment of the Obligations (other than the
Bank Product Obligations), or (C) to pay any other amount
chargeable to Borrowers pursuant to the terms of this
Agreement, including Lender Group Expenses and the costs,
fees, and expenses described in Section 10 (any of the
Advances described in this Section 2.3(e) shall be referred to
as "Agent Advances"); provided, that notwithstanding anything
to the contrary contained in this Section 2.3(e), the
aggregate principal amount of Agent Advances outstanding at
any time, when taken together with the aggregate principal
amount of Overadvances made in accordance with Section 2.3(i)
hereof outstanding at such time, shall not exceed an amount
equal to the lesser of (x) 10% of the Borrowing Base then in
effect and (y) $1,850,000. Each Agent Advance is an Advance
hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that no such Agent
Advance shall be eligible for the LIBOR Option and all
payments thereon shall be payable to Agent solely for its own
account (and for the account of the holder of any
participation interest with respect to such Agent Advance).
(ii) The Agent Advances shall be repayable by
Borrowers on demand and secured by the Agent's Liens granted
to Agent under the Loan
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Documents, shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans.
(f) SETTLEMENT. It is agreed that each Lender's funded portion
of the Advances is intended by the Lenders to equal, at all times, such Lender's
Pro Rata Share of the outstanding Advances. Such agreement notwithstanding,
Agent, Swing Lender, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Swing Loans, and the Agent Advances shall take
place on a periodic basis in accordance with the following provisions:
(i) Agent shall request settlement
("Settlement") with the Lenders on a weekly basis, or on a
more frequent basis if so determined by Agent, (1) on behalf
of Swing Lender, with respect to each outstanding Swing Loan,
(2) for itself, with respect to each Agent Advance, and (3)
with respect to Collections received, as to each by notifying
the Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 5:00
p.m. (New York time) on the Business Day immediately prior to
the date of such requested Settlement (the date of such
requested Settlement being the "Settlement Date"). Such notice
of a Settlement Date shall include a summary statement of the
amount of outstanding Advances, Swing Loans, and Agent
Advances for the period since the prior Settlement Date.
Subject to the terms and conditions contained herein
(including Section 2.3(c)(iii)): (y) if a Lender's balance of
the Advances, Swing Loans, and Agent Advances exceeds such
Lender's Pro Rata Share of the Advances, Swing Loans, and
Agent Advances as of a Settlement Date, then Agent shall, by
no later than 3:00 p.m. (New York time) on the Settlement
Date, transfer in immediately available funds to the account
of such Lender as such Lender may designate, an amount such
that each such Lender shall, upon receipt of such amount, have
as of the Settlement Date, its Pro Rata Share of the Advances,
Swing Loans, and Agent Advances, and (z) if a Lender's balance
of the Advances, Swing Loans, and Agent Advances is less than
such Lender's Pro Rata Share of the Advances, Swing Loans, and
Agent Advances as of a Settlement Date, such Lender shall no
later than 3:00 p.m. (New York time) on the Settlement Date
transfer in immediately available funds to the Agent's
Account, an amount such that each such Lender shall, upon
transfer of such amount, have as of the Settlement Date, its
Pro Rata Share of the Advances, Swing Loans, and Agent
Advances. Such amounts made available to Agent under clause
(z) of the immediately preceding sentence shall be applied
against the amounts of the applicable Swing Loan or Agent
Advance and, together with the portion of such Swing Loan or
Agent Advance representing Swing Lender's Pro Rata Share
thereof, shall constitute Advances of such Lenders. If any
such amount is not made available to Agent by any Lender on
the Settlement Date applicable thereto to the extent required
by the terms hereof, Agent shall be entitled to recover for
its account such amount on
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demand from such Lender together with interest thereon at the
Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of
the Advances, Swing Loans, and Agent Advances is less than,
equal to, or greater than such Lender's Pro Rata Share of the
Advances, Swing Loans, and Agent Advances as of a Settlement
Date, Agent shall, as part of the relevant Settlement, apply
to such balance the portion of payments actually received in
good funds by Agent with respect to principal, interest, and
fees payable by Borrowers and allocable to the Lenders
hereunder, and proceeds of Collateral. To the extent that a
net amount is owed to any such Lender after such application,
such net amount shall be distributed by Agent to that Lender
as part of such next Settlement.
(iii) Between Settlement Dates, Agent, to the
extent no Agent Advances or Swing Loans are outstanding, may
pay over to Swing Lender any payments received by Agent, that
in accordance with the terms of this Agreement would be
applied to the reduction of the Advances, for application to
Swing Lender's Pro Rata Share of the Advances. If, as of any
Settlement Date, Collections received since the then
immediately preceding Settlement Date have been applied to
Swing Lender's Pro Rata Share of the Advances other than to
Swing Loans, as provided for in the previous sentence, Swing
Lender shall pay to Agent for the accounts of the Lenders, and
Agent shall pay to the Lenders, to be applied to the
outstanding Advances of such Lenders, an amount such that each
Lender shall, upon receipt of such amount, have, as of such
Settlement Date, its Pro Rata Share of the Advances. During
the period between Settlement Dates, Swing Lender with respect
to Swing Loans, Agent with respect to Agent Advances, and each
Lender (subject to the effect of letter agreements between
Agent and individual Lenders) with respect to the Advances
other than Swing Loans and Agent Advances, shall be entitled
to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing
Lender, Agent, or the Lenders, as applicable.
(g) NOTATION. Agent shall record on its books the principal
amount of the Advances owing to each Lender, including the Swing Loans owing to
Swing Lender, and Agent Advances owing to Agent, and the interests therein of
each Lender, from time to time. In addition, each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Advances in its books and records, including computer
records, such books and records constituting conclusive evidence, absent
manifest error, of the accuracy of the information contained therein.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other than
Swing Loans and Agent Advances) shall be made by the Lenders contemporaneously
and in accordance with their Pro Rata Shares. It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Advance (or other extension of
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credit) hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of any failure by any other Lender to perform its
obligations hereunder, and (ii) no failure by any Lender to perform its
obligations hereunder shall excuse any other Lender from its obligations
hereunder.
(i) OPTIONAL OVERADVANCES.
(i) Any contrary provision of this Agreement
(including, without limitation, Section 2.3(i)(iii))
notwithstanding, the Lenders hereby authorize Agent or Swing
Lender, as applicable, and Agent or Swing Lender, as
applicable, may, but is not obligated to, knowingly and
intentionally, continue to make Advances (including Swing
Loans) to Borrowers notwithstanding that an Overadvance exists
or thereby would be created, so long as (A) after giving
effect to such Advances (including a Swing Loan), the Revolver
Usage does not exceed the Borrowing Base by more than the
lesser of (x) $1,850,000, and (y) 10% of the Borrowing Base
then in effect, (B) after giving effect to such Advances
(including a Swing Loan) the outstanding Revolver Usage
(except for and excluding amounts charged to the Loan Account
for interest, fees, or Lender Group Expenses) does not exceed
the Maximum Revolver Amount, (C) the aggregate principal
amount of Overadvances made pursuant to this Section 2.3(i)
when taken together with the aggregate principal amount of
Agent Advances made pursuant to Section 2.3(e) does not exceed
at any time an amount equal to the lesser of (x) 10% of the
Borrowing Base then in effect and (y) $1,850,000, and (D) at
the time of the making of any such Advance (including a Swing
Loan), Agent does not believe, in good faith, that the
Overadvance created by such Advance will be outstanding for
more than 90 days. The foregoing provisions are for the
exclusive benefit of Agent, Swing Lender, and the Lenders and
are not intended to benefit Borrowers in any way. The Advances
and Swing Loans, as applicable, that are made pursuant to this
Section 2.3(i) shall be subject to the same terms and
conditions as any other Advance or Swing Loan, as applicable,
except that they shall not be eligible for the LIBOR Option
and the rate of interest applicable thereto shall be the rate
applicable to Advances that are Base Rate Loans under Section
2.6(c) hereof without regard to the presence or absence of a
Default or Event of Default.
(ii) In the event Agent obtains actual knowledge
that the Revolver Usage exceeds the amounts permitted by the
preceding paragraph, regardless of the amount of, or reason
for, such excess, Agent shall notify Lenders as soon as
practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice
would result in imminent harm to the Collateral or its value),
and the Lenders with Revolver Commitments thereupon shall,
together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrowers and
intended to reduce, within a reasonable time, the
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outstanding principal amount of the Advances to Borrowers to
an amount permitted by the preceding paragraph. In the event
Agent or any Lender disagrees over the terms of reduction or
repayment of any Overadvance, the terms of reduction or
repayment thereof shall be implemented according to the
determination of the Required Lenders.
(iii) Each Lender with a Revolver Commitment shall
be obligated to settle with Agent as provided in Section
2.3(f) for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender,
any intentional Overadvances made as permitted under this
Section 2.3(i), and any Overadvances resulting from the
charging to the Loan Account of interest, fees, or Lender
Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWERS.
(i) Except as otherwise expressly
provided herein, all payments by Borrowers shall be made to
Agent's Account for the account of the Lender Group and shall
be made in immediately available funds, no later than 2:00
p.m. (New York time) on the date specified herein. Any payment
received by Agent later than 2:00 p.m. (New York time), shall
be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue
until such following Business Day.
(ii) Unless Agent receives notice from
Administrative Borrower prior to the date on which any payment
is due to the Lenders that Borrowers will not make such
payment in full as and when required, Agent may assume that
Borrowers have made (or will make) such payment in full to
Agent on such date in immediately available funds and Agent
may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the
extent Borrowers do not make such payment in full to Agent on
the date when due, each Lender severally shall repay to Agent
on demand such amount distributed to such Lender, together
with interest thereon at the Defaulting Lender Rate for each
day from the date such amount is distributed to such Lender
until the date repaid.
(b) APPORTIONMENT AND APPLICATION OF PAYMENTS.
(i) Except as otherwise provided with respect to
Defaulting Lenders and except as otherwise provided in the
Loan Documents (including in letter agreements between Agent
and individual Lenders), aggregate principal and interest
payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Obligations
to which such payments relate held by each Lender) and
payments of fees and expenses (other than fees or expenses
that are for Agent's separate account, after giving
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effect to any letter agreements between Agent and individual
Lenders) shall be apportioned ratably among the Lenders having
a Pro Rata Share of the type of Commitment or Obligation to
which a particular fee relates. Except as otherwise
specifically provided in paragraph (b)(iii) below or Section
2.4(d), all payments shall be remitted to Agent and all such
payments (other than payments received while no Event of
Default has occurred and is continuing and which relate to the
payment of principal or interest of specific Obligations or
which relate to the payment of specific fees or other
amounts), and all proceeds of Accounts or other Collateral
received by Agent, shall be applied as follows:
A. first, to pay any Lender Group Expenses
then due to Agent under the Loan Documents, until
paid in full,
B. second, to pay any Lender Group Expenses
then due to the Lenders under the Loan Documents, on
a ratable basis, until paid in full,
C. third, to pay any fees then due to Agent
(for its separate account, after giving effect to any
letter agreements between Agent and the individual
Lenders) under the Loan Documents, until paid in
full,
D. fourth, to pay any fees then due to any
or all of the Lenders (after giving effect to any
letter agreements between Agent and individual
Lenders) under the Loan Documents, on a ratable
basis, until paid in full, provided that, if an Event
of Default has occurred and is continuing, the
priority of the payment of any fee payable to any
Lender in respect of Term Loan B shall, unless the
Required Revolver Lenders agree in their sole
discretion to forgo deferring such payment, be
deferred to item "seventeenth" below,
E. fifth, to pay interest due in respect of
all Agent Advances, until paid in full,
F. sixth, ratably to pay interest due in
respect of the Advances (other than Agent Advances),
the Swing Loans, and Term Loan A until paid in full,
G. seventh, so long as no Event of Default
has occurred and is continuing or, if an Event of
Default has occurred and is continuing and the
Required Revolver Lenders agree in their sole
discretion, ratably to pay interest (other than
interest that is required to be paid-in-kind pursuant
to Section 2.6(a)) due in respect of Term Loan B,
until paid in full (if an Event of Default has
occurred and is continuing and the Required Revolving
Lenders have not agreed to allow the payment of
interest due in respect of Term Loan B), the priority
of the payment of interest on Term Loan B is deferred
to item "eighteenth" below),
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H. eighth, to pay the principal of all Agent
Advances until paid in full,
I. ninth, to pay all principal amounts then
due and payable (other than as a result of an
acceleration thereof) with respect to Term Loan A
until paid in full,
J. tenth, so long as no Event of Default has
occurred and is continuing or, if an Event of Default
has occurred and is continuing and the Required
Revolver Lenders agree in their sole discretion,
ratably to pay all principal amounts then due and
payable (other than as a result of an acceleration
thereof) with respect to Term Loan B, until paid in
full (if an Event of Default has occurred or is
continuing and the Required Revolving Lenders have
not agreed to allow the payment of interest due in
respect of Term Loan B, the priority of the payment
of principal then due with respect to Term Loan B,
including principal attributable to capitalized
interest paid-in-kind in respect of Term Loan B, is
deferred to item "nineteenth" below),
K. eleventh, to pay the principal of all
Swing Loans until paid in full,
L. twelfth, so long as no Event of Default
has occurred and is continuing, and at Agent's
election (which election Agent agrees will not be
made if an Overadvance would be created thereby), to
pay amounts then due and owing by Parent or its
Subsidiaries in respect of all Bank Products, until
paid in full,
M. thirteenth, so long as no Event of
Default has occurred and is continuing, to pay,
first, the principal of all Advances that are Base
Rate Loans and, second, the principal of all Advances
that are LIBOR Rate Loans, until paid in full,
N. fourteenth, if an Event of Default has
occurred and is continuing, ratably (i) to pay the
principal of all Advances until paid in full, and
(ii) to Agent, to be held by Agent, for the benefit
of Xxxxx Fargo or its Affiliates, as applicable, as
cash collateral in an amount up to the amount of the
Bank Products Reserve established prior to the
occurrence of, and not in contemplation of, the
subject Event of Default until Parent's and its
Subsidiaries' obligations in respect of the then
extant Bank Products have been paid in full or the
cash collateral amount has been exhausted,
O. fifteenth, if an Event of Default has
occurred and is continuing, to pay the outstanding
principal balance of Term Loan A (in the inverse
order of the maturity of the installments due
thereunder) until Term Loan A is paid in full,
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P. sixteenth, if an Event of Default has
occurred and is continuing, to Agent, to be held by
Agent, for the ratable benefit of Issuing Lender and
those Lenders having a Revolver Commitment, as cash
collateral in an amount up to 105% of the then extant
Letter of Credit Usage until paid in full,
Q. seventeenth, if an Event of Default has
occurred and is continuing, to pay fees due in
respect of Term Loan B, until paid in full,
R. eighteenth, if an Event of Default has
occurred and is continuing, to pay interest due in
respect of Term Loan B, including capitalized
interest paid-in-kind in respect of Term Loan B,
until paid in full,
S. nineteenth, if an Event of Default has
occurred and is continuing, to pay the outstanding
principal balance of Term Loan B (including, among
other things, any capitalized interest), until Term
Loan B is paid in full,
T. twentieth, to pay any other Obligations
(including Bank Product Obligations) until paid in
full, and
U. twenty-first, to Borrowers (to be
remitted by wire transfer to the Designated Account)
or such other Person entitled thereto under
applicable law.
(ii) Agent promptly shall distribute to each
Lender, pursuant to the applicable wire instructions received
from each Lender in writing, such funds as it may be entitled
to receive, subject to a Settlement delay as provided in
Section 2.3(f).
(iii) In each instance, so long as no Event of
Default has occurred and is continuing, Section 2.4(b) shall
not be deemed to apply to any payment by any Loan Party
specified by such Loan Party to be for the payment of specific
Obligations then due and payable (or prepayable) under any
provision of this Agreement.
(iv) For purposes of the foregoing (other than
clause (T)), "paid in full" means payment of all amounts owing
under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest
(and specifically including interest accrued after the
commencement of any Insolvency Proceeding), default interest,
interest on interest, and expense reimbursements, except to
the extent that default or overdue interest (but not any other
interest) and loan fees, each arising from or related to a
default, are disallowed in any Insolvency Proceeding;
provided, however, that for the purposes of clause (T), "paid
in full" means payment of
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all amounts owing under the Loan Documents according to the
terms thereof, including loan fees, service fees, professional
fees, interest (and specifically including interest accrued
after the commencement of any Insolvency Proceeding), default
interest, interest on interest, and expense reimbursements,
whether or not the same would be or is allowed or disallowed
in whole or in part in any Insolvency Proceeding.
(v) In the event of a direct conflict between
the priority provisions of this Section 2.4 and other
provisions contained in any other Loan Document, it is the
intention of the parties hereto that such priority provisions
in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this
Section 2.4 shall control and govern.
(c) MANDATORY PREPAYMENTS.
(i) If on any day an EBITDA Deficit exists,
Borrowers shall immediately pay to Agent an amount equal to
such EBITDA Deficit to be applied to the outstanding principal
amount of the Term Loans and the Revolver Usage in accordance
with clause (d) below.
(ii) Immediately upon any sale or disposition by
any Loan Party or any of its Subsidiaries of property or
assets (other than sales or dispositions of Inventory in the
ordinary course of business), Borrowers shall prepay the
outstanding principal amount of the Term Loans and the
Advances and cash collateralization of the Letters of Credit
in accordance with clause (d) below in an amount equal to 100%
of the Net Cash Proceeds received by such Person in connection
with such sales or dispositions to the extent that the
aggregate amount of Net Cash Proceeds received by all Loan
Parties and their Subsidiaries (and not paid to Agent as a
prepayment of the Term Loans and the Advances and cash
collateralize the Letters of Credit) for all such sales or
dispositions shall exceed $100,000 in any Fiscal Year (other
than sales or dispositions of Inventory or insurance proceeds
or condemnation awards with respect to Inventory, which shall
not be subject to such threshold). Nothing contained in this
subclause (ii) shall permit any Loan Party or any of its
Subsidiaries to sell or otherwise dispose of any property or
assets other than in accordance with Section 7.4.
(iii) Upon the receipt by any Loan Party or any of
its Subsidiaries of any Extraordinary Receipts, Borrowers
shall prepay the outstanding principal of the Term Loans and
the Advances and cash collateralize the Letters of Credit in
accordance with clause (d) below in an amount equal to 100% of
such Extraordinary Receipts, net of any reasonable expenses
incurred in collecting such Extraordinary Receipts.
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(d) APPLICATION OF PAYMENTS.
(i) Each prepayment pursuant to subclause (c)(i)
above shall, (A) so long as no Event of Default shall have
occurred and be continuing, be applied, first, to the
outstanding principal amount of the Advances and cash
collateral in an amount equal to 105% at the then extant
Letter of Credit Usage, until paid in full, second, to the
outstanding principal amount of Term Loan A, until paid in
full, and third, to the outstanding principal amount of the
Term Loan B, until paid in full, and (B) if an Event of
Default shall have occurred and be continuing, be applied in
the manner set forth in Section 2.4(b)(i). Each such
prepayment of the Term Loans shall be applied against the
remaining installments of principal of the applicable Term
Loan (if any) in the inverse order of maturity.
(ii) Each prepayment pursuant to subclause (c)
(iii) above (except with respect to insurance proceeds and
condemnation awards related to a casualty or loss of
Collateral) shall, (A) so long as no Event of Default shall
have occurred and be continuing, be applied, first, to the
outstanding principal amount of the Term Loan A, until paid in
full, second, to the outstanding principal amount of the Term
Loan B, until paid in full, and third, to the outstanding
principal amount of the Advances and cash collateral in an
amount equal to 105% at the then extant Letter of Credit Usage
and (B) if an Event of Default shall have occurred and be
continuing, be applied in the manner set forth in Section
2.4(b)(i). Each such prepayment of the Term Loans shall be
applied against the remaining installments of principal of the
applicable Term Loan (if any) in the inverse order of
maturity.
(iii) Each prepayment pursuant to subclauses (c)
(ii) above and (c)(iii) with respect to insurance proceeds and
condemnation awards related to a casualty or loss of
Collateral, shall, (A) so long as no Event of Default shall
have occurred and be continuing, be applied as follows:
(1) if the proceeds are from any sale
or disposition of any Accounts or Inventory or any insurance
policy or condemnation award with respect to Inventory, such
proceeds shall be applied, first, to the outstanding principal
amount of the Advances and cash collateral in an amount equal
to 105% at the then extant Letter of Credit Usage, until paid
in full, second, to the outstanding principal amount of Term
Loan A, until paid in full, and third, to the outstanding
principal amount of Term Loan B, until paid in full. Each such
prepayment of the Term Loans shall be applied against the
remaining installments of principal of the applicable Term
Loan (if any) in the inverse order of maturity;
(2) subject to clause (3) below, if the
proceeds are from the sale or disposition of any other assets
or any insurance policy or condemnation award not described in
clause (1) above, such proceeds shall be applied, first,
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to the outstanding principal amount of Term Loan A, until paid
in full, second to the outstanding principal amount of Term
Loan B, until paid in full, and third, to the outstanding
principal amount of the Advances and cash collateral in an
amount equal to 105% at the then extant Letter of Credit
Usage; provided, that, except during the continuance of a
Default or an Event of Default, such proceeds shall not be
required to be so applied to the extent that such proceeds are
used to replace, repair or restore the properties or assets in
respect of which such proceeds were paid if (i) the amount of
proceeds received in respect of such sales, dispositions or
insurance policies or condemnation awards are less than
$500,000 in the aggregate during the term of this Agreement
for the term of the Agreement, (ii) Administrative Borrower
delivers a certificate to Agent within 10 days after such sale
or 30 days after the date of such loss, destruction or taking,
as the case may be, stating that such proceeds shall be used
to replace, repair or restore such properties or assets within
a period specified in such certificate not to exceed the
earlier of (x) 180 days after the receipt of such proceeds and
(y) the Maturity Date (which certificate shall set forth
estimates of the proceeds to be so expended) and (iii) such
proceeds are immediately deposited in a DDA subject to a
Control Agreement. If all or any portion of such proceeds not
so applied to the prepayment of the Term Loans and Advances
and to cash collateralize the Letters of Credit in accordance
with this clause (2) are not used in accordance with the
preceding sentence within the period specified in the relevant
certificate furnished pursuant hereto, such remaining portion
shall be applied to the Term Loans and Revolver Usage in
accordance with this clause (2) on the last day of such
specified period. Each such prepayment of the Term Loans shall
be applied against the remaining installments of principal of
the applicable Term Loan (if any) in the inverse order of
maturity; and
(3) if the proceeds are from a sale or
disposition of all or substantially all of the assets or Stock
of any Person or any insurance, which sale, disposition or
proceeds of insurance includes both Accounts or Inventory and
other assets, such proceeds shall be applied as follows: (x)
an amount equal to the net book value of such Accounts and
Inventory, or if greater, an amount equal to the Revolver
Usage supported by such assets determined using the effective
advance rate under the Borrowing Base against such Accounts
and Inventory (determined at the time of such sale or
disposition or event resulting in such insurance proceeds),
shall be applied to the outstanding principal amount of the
Advances and to cash collateralize the Letters of Credit and
(y) the remaining proceeds shall be applied, first, to the
outstanding principal amount of Term Loan A, until paid in
full, second to the outstanding principal amount of Term Loan
B, until paid in full, and third, to the outstanding principal
amount of the Advances and to cash collateral in an amount
equal to 105% at the then extant Letter of Credit Usage, until
paid in full. Each such prepayment of the Term Loans shall be
applied against the remaining installments of principal of the
applicable Term Loan (if any) in the inverse order of
maturity; and
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(B) if an Event of Default shall have
occurred and be continuing, be applied in the manner set forth
in Section 2.4(b)(i).
(iv) Notwithstanding anything to the contrary
contained herein, if Excess Availability is less than or equal
to $3,500,000 either (x) at any time during the 30 consecutive
day period immediately prior to the date of any prepayment of
the Term Loan B or (y) immediately after giving effect to any
prepayment of the Term Loan B pursuant to clauses (c)(ii) and
(c)(iii) above, no such prepayment of the Term Loan B shall be
made and (1) Agent shall apply such amounts to the payment of
the Advances and to cash collateralize the Letters of Credit
and, concurrently with such payment of the Advances and to
cash collateralization of the Letters of Credit, establish and
maintain a corresponding reserve against the Borrowing Base
and the Maximum Revolver Amount in an amount equal to the
amount that would have otherwise been applied by Borrowers to
the prepayment of the Term Loan B, and (2) the amount that is
applied to the Advances and to cash collateralize the Letters
of Credit pursuant to subclause (1) shall be applied to the
prepayment of the Term Loan B, and the corresponding reserve
against the Borrowing Base and the Maximum Revolver Amount
shall be released, at such time and from time to time as
Excess Availability is greater than $3,500,000 both for (x)
the 30 consecutive day period immediately prior to the date of
such prepayment of the Term Loan B and (y) immediately after
giving effect to such prepayment of the Term Loan B.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrowers to the
Lender Group pursuant to Sections 2.1 and 2.12 is greater than either the Dollar
or percentage limitations set forth in Sections 2.1 or 2.12, (an "Overadvance"),
Borrowers immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in accordance with
the priorities set forth in Section 2.4(b). Borrowers hereby promise to pay the
Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full to the Lender Group as and when due and payable under the terms
of this Agreement and the other Loan Documents. Additionally, to the extent
Advances to Administrative Borrower exceed those permitted to be made under
Section 2.1(a) (including, without limitation, as a result of any voluntary
permanent reduction or termination of the Commitments), then the amount of such
excess Advances shall be immediately due and payable without the necessity of
any notice or demand.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c) below,
all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof as follows (i) if
the relevant Obligation is an Advance that is a LIBOR Rate Loan, at a per annum
rate equal to the LIBOR Rate plus the LIBOR Rate Margin, (ii) if the relevant
Obligation is a portion of Term Loan A that is a LIBOR Rate Loan, at a per
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annum rate equal to the LIBOR Rate plus the LIBOR Rate Term Loan A Margin, (iii)
if the relevant Obligation is a portion of a Term Loan that is a Base Rate Loan,
at a per annum rate equal to the Base Rate plus the Base Rate Term Loan A Margin
or the Base Rate Term Loan B Margin, as appropriate, provided, that, 2% per
annum of such interest on Term Loan B shall be capitalized and shall bear
interest in accordance with this Section 2.6(a), and (iv) otherwise, at a per
annum rate equal to the Base Rate plus the Base Rate Margin.
The foregoing notwithstanding, at no time shall any
portion of the Obligations (other than Term Loan B) bear interest on the Daily
Balance thereof at a per annum rate less than 5.25% and at no time shall any
portion of the Obligations due to a Lender with a Term Loan B Commitment bear
interest at a per annum rate less than 10.25%. To the extent that interest
accrued hereunder at the rates set forth herein would be less than the foregoing
minimum rates, the interest rates chargeable hereunder for such day
automatically shall be deemed increased to the minimum rates.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the
ratable benefit of the Lenders with a Revolver Commitment, subject to any letter
agreement between Agent and individual Lenders), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in Section
2.12(e)) which shall accrue at a rate equal to 2 % per annum times the Daily
Balance of the undrawn amount of all outstanding Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Agent or the
Required Lenders in the case of all Obligations other than Obligations
attributable to Term Loan B and, at the election of Ableco, in the case of
Obligations attributable to Term Loan B),
(i) all Obligations (except for undrawn
Letters of Credit and except for Bank Product
Obligations) that have been charged to the Loan
Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum
rate equal to 3 percentage points above the per annum
rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided
for above shall be increased to 3 percentage points
above the per annum rate otherwise applicable
hereunder.
(d) PAYMENT. Interest, Letter of Credit fees, and all other
fees payable hereunder shall be due and payable, in arrears, on the first day of
each month at any time that Obligations or Commitments are outstanding.
Borrowers hereby authorize Agent, from time to time, without prior notice to
Borrowers, to, and Agent agrees that it will, charge such interest and fees, all
Lender Group Expenses (as and when incurred), the charges, commissions, fees,
and costs provided for in Section 2.12(e) (as and when accrued or incurred), the
fees and costs provided for in Section 2.11 (as and when accrued or incurred),
and all other payments as and when due and payable under any Loan Document
(including the installments due and payable with respect to the Term Loan and
including any amounts due and payable to Xxxxx Fargo or its Affiliates in
respect of Bank Products up to the amount of the then extant Bank Products
Reserve) to Borrowers' Loan Account, which amounts
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thereafter shall constitute Advances hereunder and shall accrue interest at the
rate then applicable to Advances hereunder. Any interest not paid when due shall
be compounded by being charged to Borrowers' Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Base Rate Loans hereunder.
(e) COMPUTATION. All interest and fees chargeable under the
Loan Documents shall be computed on the basis of a 360 day year for the actual
number of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrowers and the Lender Group, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; provided, however, that,
anything contained herein to the contrary notwithstanding, if said rate or rates
of interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Borrowers in excess of such legal maximum, whenever received,
shall be applied to reduce the principal balance of the Obligations to the
extent of such excess.
2.7 CASH MANAGEMENT.
(a) Borrowers shall, and shall cause DSI to, (i) establish and
maintain cash management services of a type and on terms satisfactory to Agent
at one or more of the banks set forth on Schedule 2.7(a) (each a "Cash
Management Bank"), and shall request in writing and otherwise take such
reasonable steps to ensure that all of its Account Debtors forward payment of
the amounts owed by them directly to such Cash Management Bank, and (ii) deposit
or cause to be deposited promptly, and in any event no later than the first
Business Day after the date of receipt thereof, all Collections (including those
sent directly by Account Debtors to a Cash Management Bank) into a bank account
in Agent's name (a "Cash Management Account") at one of the Cash Management
Banks.
(b) Each Cash Management Bank shall establish and maintain
Cash Management Agreements with Agent and Borrowers or DSI, in form and
substance acceptable to Agent. Each such Cash Management Agreement shall
provide, among other things, that (i) all items of payment deposited in such
Cash Management Account and proceeds thereof are held by such Cash Management
Bank as agent or bailee-in-possession for Agent, (ii) the Cash Management Bank
has no rights of setoff or recoupment or any other claim against the applicable
Cash Management Account, other than for payment of its service fees and other
charges directly related to the administration of such Cash Management Account
and for returned checks or other items of payment, and (iii) it
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immediately will forward by daily sweep all amounts in the applicable Cash
Management Account to the Agent's Account. So long as no Default or Event of
Default has occurred and is continuing, Administrative Borrower may amend
Schedule 2.7(a) or (b) to add or replace a Cash Management Account Bank or Cash
Management Account; provided, however, that (i) such prospective Cash Management
Bank shall be satisfactory to Agent and Agent shall have consented in writing in
advance to the opening of such Cash Management Account with the prospective Cash
Management Bank, and (ii) prior to the time of the opening of such Cash
Management Account, Borrowers and such prospective Cash Management Bank shall
have executed and delivered to Agent a Cash Management Agreement. Borrowers
shall close any of their Cash Management Accounts (and establish replacement
cash management accounts in accordance with the foregoing sentence) promptly and
in any event within 30 days of notice from Agent that the creditworthiness of
any Cash Management Bank is no longer acceptable in Agent's reasonable judgment,
or as promptly as practicable and in any event within 60 days of notice from
Agent that the operating performance, funds transfer, or availability procedures
or performance of the Cash Management Bank with respect to Cash Management
Accounts or Agent's liability under any Cash Management Agreement with such Cash
Management Bank is no longer acceptable in Agent's reasonable judgment.
(c) The Cash Management Accounts shall be cash collateral
accounts, with all cash, checks and similar items of payment in such accounts
securing payment of the Obligations, and in which Borrowers are hereby deemed to
have granted a Lien to Agent.
(d) On or prior to the Closing Date, Canadian Guarantor shall
(i) establish and maintain one or more depository accounts, under the dominion
and control of Agent pursuant to a lockbox agreement among Agent, Canadian
Guarantor and the applicable Canadian financial institution described on
Schedule 2.7(d), in form and substance satisfactory to Agent, in respect of its
Collections and (ii) instruct all of its Account Debtors to remit all such
Collections to such depository accounts. Canadian Guarantor shall at all times
deposit all Collections into such accounts that are received by it from any
source promptly, and in any event no later than the first Business Day, after
the date of receipt thereof.
(e) On or prior to the Closing Date, UK Guarantors shall (i)
establish and maintain one or more depository accounts, under the dominion and
control of Agent pursuant to a lockbox agreement among Agent, UK Guarantors and
the applicable UK financial institution described on Schedule 2.7(e), in form
and substance satisfactory to Agent, in respect of its Collections and (ii)
instruct all of its Account Debtors to remit all such Collections to such
depository accounts. UK Guarantors shall at all times deposit all Collections
into such accounts that are received by it from any source promptly, and in any
event no later than the first Business Day, after the date of receipt thereof.
(f) Agent will not exercise its control over Cash Management
Accounts established by Canadian Guarantor and UK Guarantors until such time as
an Event of Default has occurred and is continuing.
2.8 CREDITING PAYMENTS; FLOAT CHARGE. The receipt of any payment item
by Agent (whether from transfers to Agent by the Cash Management Banks pursuant
to the Cash
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Management Agreements or otherwise) shall not be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 2:00 p.m. (New York time). If any payment item is received into the
Agent's Account on a non-Business Day or after 2:00 p.m. (New York time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day. From and after
the Closing Date, Agent shall be entitled to charge Borrowers for one (1)
Business Day of 'clearance' or 'float' at the rate applicable to Base Rate Loans
under Section 2.6 on all Collections that are received by Borrowers (regardless
of whether forwarded by the Cash Management Banks to Agent). This
across-the-board one Business Day clearance or float charge on all Collections
is acknowledged by the parties to constitute an integral aspect of the pricing
of the financing of Borrowers and shall apply irrespective of whether or not
there are any outstanding monetary Obligations; the effect of such clearance or
float charge being the equivalent of charging one (1) Business Day of interest
on such Collections. The parties acknowledge and agree that the economic benefit
of the foregoing provisions of this Section 2.8 shall be for the exclusive
benefit of Agent.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances and
the Term Loan, and Issuing Lender is authorized to issue the Letters of Credit,
under this Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person, or without instructions if
pursuant to Section 2.6(d). Administrative Borrower agrees to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Advances requested by Borrowers and made by
Agent or the Lenders hereunder. So long as no Default or Event of Default has
occurred and is continuing, Administrative Borrower may add or replace, the
Designated Account Bank or the Designated Account on 30 days prior written
notice to Agent; provided, however, that (i) such prospective Designated Account
Bank shall be satisfactory to Agent and Agent shall have consented in writing in
advance to the opening of such Designated Account with the prospective
Designated Account Bank, and (ii) prior to the time of the opening of such
Designated Account, Borrowers and such prospective Designated Account Bank shall
have executed and delivered to Agent a Control Agreement. Unless otherwise
agreed by Lender and Administrative Borrower, any Advance requested by Borrowers
and made by Lender hereunder shall be made to the Designated Account. Unless
otherwise agreed by Agent and Administrative Borrower, any Advance, Agent
Advance, or Swing Loan requested by Borrowers and made by Agent or the Lenders
hereunder shall be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrowers (the "Loan
Account") on which Borrowers will be charged with the Term Loan, all Advances
(including Agent Advances and Swing Loans) made by Agent, Swing Lender, or the
Lenders to Borrowers or for
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Borrowers' account, the Letters of Credit issued by Issuing Lender for
Borrowers' account, and with all other payment Obligations hereunder or under
the other Loan Documents (except for Bank Product Obligations), including,
accrued interest, fees and expenses, and Lender Group Expenses. In accordance
with Section 2.8, the Loan Account will be credited with all payments received
by Agent from Borrowers or for Borrowers' account, including all amounts
received in the Agent's Account from any Cash Management Bank. Agent shall
render statements regarding the Loan Account to Administrative Borrower,
including principal, interest, fees, and including an itemization of all charges
and expenses constituting Lender Group Expenses owing, and such statements shall
be conclusively presumed to be correct and accurate and constitute an account
stated between Borrowers and the Lender Group unless, within 30 days after
receipt thereof by Administrative Borrower, Administrative Borrower shall
deliver to Agent written objection thereto describing the error or errors
contained in any such statements.
2.11 FEES. Borrowers shall pay to Agent the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter) and shall be apportioned among
the Lenders in accordance with the terms of letter agreements between Agent and
individual Lenders:
(a) UNUSED LINE FEE. On the first day of each month during the
term of this Agreement, an unused line fee in the amount equal to .5% per annum
times the result of (a) the Maximum Revolver Amount, less (b) the sum of (i) the
average Daily Balance of Advances that were outstanding during the immediately
preceding month, plus (ii) the average Daily Balance of the Letter of Credit
Usage during the immediately preceding month,
(b) CLOSING FEE. On the Closing Date, a closing fee in the
amount of $550,000, which closing fee shall be fully earned as of the date of
entry of the Final Financing Order by the Bankruptcy Court,
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. For the separate
account of Agent (or, in the case of clauses (ii) and (iii) below, Ableco),
audit, appraisal, and valuation fees and charges as follows, (i) a fee of $850
per day, per auditor, plus out-of-pocket expenses for each financial audit of a
Loan Party performed by personnel employed by Agent and the establishment of
electronic collateral reporting systems, (ii) a fee of $1,500 per day per
appraiser, plus out-of-pocket expenses, for each appraisal of the Collateral
performed by personnel employed by Agent, and (iii) the actual charges paid or
incurred by Agent if it elects to employ the services of one or more third
Persons to perform financial audits of Loan Parties, to appraise the Collateral,
or any portion thereof, or to assess a Loan Party's business valuation, and
(d) COLLATERAL MONITORING FEE. For the account of Agent, on
the first day of each month for the immediately preceding month during the term
of this Agreement, a collateral monitoring fee in the amount of $7,500 per
month, which collateral monitoring fee shall be fully earned on the first day of
each applicable month for which it is payable.
2.12 LETTERS OF CREDIT
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(a) Subject to the terms and conditions of this Agreement, the
Issuing Lender agrees to issue letters of credit for the account of Borrowers
(each, an "L/C") or to purchase participations or execute indemnities or
reimbursement obligations (each such undertaking, an "L/C Undertaking") with
respect to letters of credit issued by an Underlying Issuer (as of the Closing
Date, the prospective Underlying Issuer is to be Xxxxx Fargo) for the account of
Borrowers. To request the issuance of an L/C or an L/C Undertaking (or the
amendment, renewal, or extension of an outstanding L/C or L/C Undertaking),
Administrative Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Lender) to the Issuing Lender and Agent (reasonably in advance of the
requested date of issuance, amendment, renewal, or extension) a notice
requesting the issuance of an L/C or L/C Undertaking, or identifying the L/C or
L/C Undertaking to be amended, renewed, or extended, the date of issuance,
amendment, renewal, or extension, the date on which such L/C or L/C Undertaking
is to expire, the amount of such L/C or L/C Undertaking, the name and address of
the beneficiary thereof (or of the Underlying Letter of Credit, as applicable),
and such other information as shall be necessary to prepare, amend, renew, or
extend such L/C or L/C Undertaking. If requested by the Issuing Lender,
Borrowers also shall be an applicant under the application with respect to any
Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The
Issuing Lender shall not issue a Letter of Credit if any of the following would
result after giving effect to the requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the
Borrowing Base less the then extant amount of outstanding
Advances, or
(ii) the Letter of Credit Usage would exceed
$5,000,000, or
(iii) the Letter of Credit Usage would exceed the
Maximum Revolver Amount less the then extant amount of
outstanding Advances.
Borrowers and the Lender Group acknowledge and agree
that certain Underlying Letters of Credit may be issued to support letters of
credit that already are outstanding as of the Closing Date. Each Letter of
Credit (and corresponding Underlying Letter of Credit) shall be in form and
substance acceptable to the Issuing Lender (in the exercise of its Permitted
Discretion), including the requirement that the amounts payable thereunder must
be payable in Dollars. If Issuing Lender is obligated to advance funds under a
Letter of Credit, Borrowers immediately shall reimburse such L/C Disbursement to
Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not
later than 2:00 p.m., New York time, on the date that such L/C Disbursement is
made, if Administrative Borrower shall have received written or telephonic
notice of such L/C Disbursement prior to 1:00 p.m., New York time, on such date,
or, if such notice has not been received by Administrative Borrower prior to
such time on such date, then not later than 2:00 p.m., New York time, on (i) the
Business Day that Administrative Borrower receives such notice, if such notice
is received prior to 1:00 p.m., New York time, on the date of receipt, and, in
the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans
under Section 2.6. To the extent an L/C
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Disbursement is deemed to be an Advance hereunder, Borrowers' obligation to
reimburse such L/C Disbursement shall be discharged and replaced by the
resulting Advance. Promptly following receipt by Agent of any payment from
Borrowers pursuant to this paragraph, Agent shall distribute such payment to the
Issuing Lender or, to the extent that Lenders have made payments pursuant to
Section 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the
Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Borrowers had requested such
Advance and Agent shall promptly pay to Issuing Lender the amounts so received
by it from the Lenders. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Lender or the Lenders with Revolver
Commitment, the Issuing Lender shall be deemed to have granted to each Lender
with a Revolver Commitment, and each Lender with a Revolver Commitment shall be
deemed to have purchased, a participation in each Letter of Credit, in an amount
equal to its Pro Rata Share of the Risk Participation Liability of such Letter
of Credit, and each such Lender agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing
Lender under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender,
such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender
and not reimbursed by Borrowers on the date due as provided in clause (a) of
this Section, or of any reimbursement payment required to be refunded to
Borrowers for any reason. Each Lender with a Revolver Commitment acknowledges
and agrees that its obligation to deliver to Agent, for the account of the
Issuing Lender, an amount equal to its respective Pro Rata Share pursuant to
this Section 2.12(b) shall be absolute and unconditional and such remittance
shall be made notwithstanding the occurrence or continuation of an Event of
Default or Default or the failure to satisfy any condition set forth in Section
3 hereof. If any such Lender fails to make available to Agent the amount of such
Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of
such Letter of Credit as provided in this Section, Agent (for the account of the
Issuing Lender) shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Defaulting Lender Rate until paid
in full.
(c) Each Borrower hereby agrees to indemnify, save, defend,
and hold the Lender Group harmless from any loss, cost, expense, or liability,
and reasonable attorneys fees incurred by the Lender Group arising out of or in
connection with any Letter of Credit; provided, however, that no Borrower shall
be obligated hereunder to indemnify for any loss, cost, expense, or liability
that is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound
by the Underlying Issuer's regulations and interpretations of any Underlying
Letter of Credit or by Issuing Lender's interpretations of any L/C issued by
Issuing Lender to or for such Borrower's account, even though this
interpretation may be different from such Borrower's own, and each Borrower
understands and agrees that the Lender Group shall not
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be liable for any error, negligence, or mistake, whether of omission or
commission, in following Borrowers' instructions or those contained in the
Letter of Credit or any modifications, amendments, or supplements thereto. Each
Borrower understands that the L/C Undertakings may require Issuing Lender to
indemnify the Underlying Issuer for certain costs or liabilities arising out of
claims by Borrowers against such Underlying Issuer. Each Borrower hereby agrees
to indemnify, save, defend, and hold the Lender Group harmless with respect to
any loss, cost, expense (including reasonable attorneys fees), or liability
incurred by the Lender Group under any L/C Undertaking as a result of the Lender
Group's indemnification of any Underlying Issuer; provided, however, that no
Borrower shall be obligated hereunder to indemnify for any loss, cost, expense,
or liability that is caused by the gross negligence or willful misconduct of the
Issuing Lender or any other member of the Lender Group.
(d) Each Borrower hereby authorizes and directs any Underlying
Issuer to deliver to the Issuing Lender all instruments, documents, and other
writings and property received by such Underlying Issuer pursuant to such
Underlying Letter of Credit and to accept and rely upon the Issuing Lender's
instructions with respect to all matters arising in connection with such
Underlying Letter of Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred
by the Issuing Lender relating to Underlying Letters of Credit shall be Lender
Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is .825% per annum
times the face amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
(f) If by reason of (i) any change in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement
is or shall be imposed or modified in respect of any Letter of
Credit issued hereunder, or
(ii) there shall be imposed on the Underlying
Issuer or the Lender Group any other condition regarding any
Underlying Letter of Credit or any Letter of Credit issued
pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on
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demand such amounts as Agent may specify to be necessary to compensate the
Lender Group for such additional cost or reduced receipt, together with interest
on such amount from the date of such demand until payment in full thereof at the
rate then applicable to Base Rate Loans hereunder. The determination by Agent of
any amount due pursuant to this Section, as set forth in a certificate setting
forth the calculation thereof in reasonable detail, shall, in the absence of
manifest or demonstrable error, be final and conclusive and binding on all of
the parties hereto.
2.13 LIBOR OPTION
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu of having
interest charged at the rate based upon the Base Rate, Borrowers shall have the
option (the "LIBOR Option") to have interest on all or a portion of the Advances
or Term Loan A be charged at a rate of interest based upon the LIBOR Rate.
Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last
day of the Interest Period applicable thereto, (ii) the occurrence of an Event
of Default in consequence of which the Required Lenders or Agent on behalf
thereof elect to accelerate the maturity of all or any portion of the
Obligations, or (iii) termination of this Agreement pursuant to the terms
hereof. On the last day of each applicable Interest Period, unless
Administrative Borrower properly has exercised the LIBOR Option with respect
thereto, the interest rate applicable to such LIBOR Rate Loan automatically
shall convert to the rate of interest then applicable to Base Rate Loans of the
same type hereunder. At any time that an Event of Default has occurred and is
continuing, Borrowers no longer shall have the option to request that Advances
or Term Loan A bear interest at the LIBOR Rate and Agent shall have the right to
convert the interest rate on all outstanding LIBOR Rate Loans to the rate then
applicable to Base Rate Loans hereunder.
(b) LIBOR ELECTION.
(i) Administrative Borrower may, at any time and
from time to time, so long as no Event of Default has occurred
and is continuing, elect to exercise the LIBOR Option by
notifying Agent prior to 2:00 p.m. (New York time) at least 3
Business Days prior to the commencement of the proposed
Interest Period (the "LIBOR Deadline"). Notice of
Administrative Borrower's election of the LIBOR Option for a
permitted portion of the Advances or the Term Loan and an
Interest Period pursuant to this Section shall be made by
delivery to Agent of a LIBOR Notice received by Agent before
the LIBOR Deadline, or by telephonic notice received by Agent
before the LIBOR Deadline (to be confirmed by delivery to
Agent of a LIBOR Notice received by Agent prior to 5:00 p.m.
(New York time) on the same day). Promptly upon its receipt of
each such LIBOR Notice, Agent shall provide a copy thereof to
each of the Lenders having a Revolver Commitment.
(ii) Each LIBOR Notice shall be irrevocable and
binding on Borrowers. In connection with each LIBOR Rate Loan,
each Borrower shall indemnify, defend, and hold Agent and the
Lenders harmless against any loss, cost, or expense incurred
by Agent or any Lender as a result of (a) the payment
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of any principal of any LIBOR Rate Loan other than on the last
day of an Interest Period applicable thereto (including as a
result of an Event of Default), (b) the conversion of any
LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date
specified in any LIBOR Notice delivered pursuant hereto (such
losses, costs, and expenses, collectively, "Funding Losses").
Funding Losses shall, with respect to Agent or any Lender, be
deemed to equal the amount determined by Agent or such Lender
to be the excess, if any, of (i) the amount of interest that
would have accrued on the principal amount of such LIBOR Rate
Loan had such event not occurred, at the LIBOR Rate that would
have been applicable thereto, for the period from the date of
such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest
Period therefor), minus (ii) the amount of interest that would
accrue on such principal amount for such period at the
interest rate which Agent or such Lender would be offered were
it to be offered, at the commencement of such period, Dollar
deposits of a comparable amount and period in the London
interbank market. A certificate of Agent or a Lender delivered
to Administrative Borrower setting forth any amount or amounts
that Agent or such Lender is entitled to receive pursuant to
this Section shall be conclusive absent manifest error.
(iii) Borrowers shall have not more than 5 LIBOR
Rate Loans in effect at any given time. Borrowers only may
exercise the LIBOR Option for LIBOR Rate Loans of at least
$1,000,000 and integral multiples of $500,000 in excess
thereof.
(c) PREPAYMENTS. Borrowers may prepay LIBOR Rate Loans at any
time; provided, however, that in the event that LIBOR Rate Loans are prepaid on
any date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required
application by Agent of proceeds of Collections in accordance with Section
2.4(b) or for any other reason, including early termination of the term of this
Agreement or acceleration of all or any portion of the Obligations pursuant to
the terms hereof, each Borrower shall indemnify, defend, and hold Agent and the
Lenders and their Participants harmless against any and all Funding Losses in
accordance with clause (b) above.
(d) Special Provisions Applicable to LIBOR Rate.
(i) The LIBOR Rate may be adjusted by Agent with
respect to any Lender on a prospective basis to take into
account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased
costs due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general
applicability in corporate income tax laws) and changes in the
reserve requirements imposed by the Board of Governors
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of the Federal Reserve System (or any successor), excluding
the Reserve Percentage, which additional or increased costs
would increase the cost of funding loans bearing interest at
the LIBOR Rate. In any such event, the affected Lender shall
give Administrative Borrower and Agent notice of such a
determination and adjustment and Agent promptly shall transmit
the notice to each other Lender and, upon its receipt of the
notice from the affected Lender, Administrative Borrower may,
by notice to such affected Lender (y) require such Lender to
furnish to Administrative Borrower a statement setting forth
the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (z) repay the
LIBOR Rate Loans with respect to which such adjustment is made
(together with any amounts due under clause (b)(ii) above).
(ii) In the event that any change in market
conditions or any law, regulation, treaty, or directive, or
any change therein or in the interpretation of application
thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Advances
or to continue such funding or maintaining, or to determine or
charge interest rates at the LIBOR Rate, such Lender shall
give notice of such changed circumstances to Agent and
Administrative Borrower and Agent promptly shall transmit the
notice to each other Lender and (y) in the case of any LIBOR
Rate Loans of such Lender that are outstanding, the date
specified in such Lender's notice shall be deemed to be the
last day of the Interest Period of such LIBOR Rate Loans, and
interest upon the LIBOR Rate Loans of such Lender thereafter
shall accrue interest at the rate then applicable to Base Rate
Loans, and (z) Borrowers shall not be entitled to elect the
LIBOR Option until such Lender determines that it would no
longer be unlawful or impractical to do so.
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to the
contrary contained herein notwithstanding, neither Agent, nor any Lender, nor
any of their Participants, is required actually to acquire eurodollar deposits
to fund or otherwise match fund any Obligation as to which interest accrues at
the LIBOR Rate. The provisions of this Section shall apply as if each Lender or
its Participants had match funded any Obligation as to which interest is
accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest
Period in the amount of the LIBOR Rate Loans.
2.14 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), will have the effect of reducing the return on such Lender's
or such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such
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adoption, change, or compliance (taking into consideration such Lender's or such
holding company's then existing policies with respect to capital adequacy and
assuming the full utilization of such entity's capital) by any amount deemed by
such Lender to be material, then such Lender may notify Administrative Borrower
and Agent thereof. Following receipt of such notice, Borrowers agree to pay such
Lender on demand the amount of such reduction of return of capital as and when
such reduction is determined, payable within 90 days after presentation by such
Lender of a statement in the amount and setting forth in reasonable detail such
Lender's calculation thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent manifest error).
In determining such amount, such Lender may use any reasonable averaging and
attribution methods.
2.15 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each Borrower is accepting joint and several
liability hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Agent and the Lenders under this
Agreement, for the mutual benefit, directly and indirectly, of each Borrower and
in consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.
(b) Each Borrower, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.15), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each Person composing Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of Borrowers shall fail
to make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Persons composing Borrowers will make such payment
with respect to, or perform, such Obligation.
(d) The Obligations of each Person composing Borrowers
under the provisions of this Section 2.15 constitute the absolute and
unconditional, full recourse Obligations of each Person composing Borrowers
enforceable against each such Borrower to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this
Agreement, each Person composing Borrowers hereby waives notice of acceptance of
its joint and several liability, notice of any Advances or Letters of Credit
issued under or pursuant to this Agreement, notice of the occurrence of any
Default, Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by Agent or Lenders
under or in respect of any of the Obligations, any requirement of diligence or
to mitigate damages and, generally, to the extent permitted by applicable law,
all demands, notices and other formalities of every kind in connection with this
Agreement (except as otherwise
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provided in this Agreement). Each Person composing Borrowers hereby assents to,
and waives notice of, any extension or postponement of the time for the payment
of any of the Obligations, the acceptance of any payment of any of the
Obligations, the acceptance of any partial payment thereon, any waiver, consent
or other action or acquiescence by Agent or Lenders at any time or times in
respect of any default by any Person composing Borrowers in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or Lenders in respect of any
of the Obligations, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any Person
composing Borrowers. Without limiting the generality of the foregoing, each
Borrower assents to any other action or delay in acting or failure to act on the
part of any Agent or Lender with respect to the failure by any Person composing
Borrowers to comply with any of its respective Obligations, including, without
limitation, any failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with applicable laws or regulations thereunder,
which might, but for the provisions of this Section 2.15 afford grounds for
terminating, discharging or relieving any Person composing Borrowers, in whole
or in part, from any of its Obligations under this Section 2.15, it being the
intention of each Person composing Borrowers that, so long as any of the
Obligations hereunder remain unsatisfied, the Obligations of such Person
composing Borrowers under this Section 2.15 shall not be discharged except by
performance and then only to the extent of such performance. The Obligations of
each Person composing Borrowers under this Section 2.15 shall not be diminished
or rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any Person
composing Borrowers or any Agent or Lender. The joint and several liability of
the Persons composing Borrowers hereunder shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, constitution or place of formation of any of the Persons
composing Borrowers or any Agent or Lender.
(f) Each Person composing Borrowers represents and
warrants to Agent and Lenders that such Borrower is currently informed of the
financial condition of Borrowers and of all other circumstances which a diligent
inquiry would reveal and which bear upon the risk of nonpayment of the
Obligations. Each Person composing Borrowers further represents and warrants to
Agent and Lenders that such Borrower has read and understands the terms and
conditions of the Loan Documents. Each Person composing Borrowers hereby
covenants that such Borrower will continue to keep informed of Borrowers'
financial condition, the financial condition of other guarantors, if any, and of
all other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.
(g) The provisions of this Section 2.15 are made for the
benefit of the Agent, the Lenders and their respective successors and assigns,
and may be enforced by it or them from time to time against any or all of the
Persons composing Borrowers as often as occasion therefor may arise and without
requirement on the part of any such Agent, Lender, successor or assign first to
marshal any of its or their claims or to exercise any of its or their rights
against any of the other Persons composing Borrowers or to exhaust any remedies
available to it or them against any of the other Persons composing Borrowers or
to resort to
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any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Section 2.15
shall remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by any Agent or Lender upon the insolvency, bankruptcy or
reorganization of any of the Persons composing Borrowers, or otherwise, the
provisions of this Section 2.15 will forthwith be reinstated in effect, as
though such payment had not been made.
(h) Each of the Persons composing Borrowers hereby agrees
that it will not enforce any of its rights of contribution or subrogation
against the other Persons composing Borrowers with respect to any liability
incurred by it hereunder or under any of the other Loan Documents, any payments
made by it to the Agent or the Lenders with respect to any of the Obligations or
any collateral security therefor until such time as all of the Obligations have
been paid in full in cash. Any claim which any Borrower may have against any
other Borrower with respect to any payments to any Agent or Lender hereunder or
under any other Loan Documents are hereby expressly made subordinate and junior
in right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Borrower, its debts or its assets, whether
voluntary or involuntary, all such Obligations shall be paid in full in cash
before any payment or distribution of any character, whether in cash, securities
or other property, shall be made to any other Borrower therefor.
(i) Each of the Persons composing Borrowers hereby agrees
that, after the occurrence and during the continuance of any Default or Event of
Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Borrower hereby agrees that
after the occurrence and during the continuance of any Default or Event of
Default, such Borrower will not demand, xxx for or otherwise attempt to collect
any indebtedness of any other Borrower owing to such Borrower until the
Obligations shall have been paid in full in cash. If, notwithstanding the
foregoing sentence, such Borrower shall collect, enforce or receive any amounts
in respect of such indebtedness, such amounts shall be collected, enforced and
received by such Borrower as trustee for the Lender Group, and such Borrower
shall deliver any such amounts to Agent for application to the Obligations in
accordance with Section 2.4(b).
2.16 DOLLAR DENOMINATION OF ADVANCES. All Advances shall be made and
all Letters of Credit denominated in Dollars.
2.17 FOREIGN ACCOUNTS. Agent may, in its discretion, discount the
amount of any Accounts that are not payable in Dollars by an amount deemed
appropriate in Agent's Permitted Discretion to account for currency exchange
risks and such other factors affecting perfection, enforceability, collection,
credit risk, or political risk or other risks as Agent may
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determine, or create or apply such reserves in respect of Accounts not payable
in Dollars as Agent deems appropriate in its Permitted Discretion.
2.18 INTEREST ACT (CANADA); CRIMINAL RATE OF INTEREST; NOMINAL RATE OF
INTEREST. Notwithstanding anything to the contrary contained in this Agreement
or in any other Loan Document, solely to the extent that a court of competent
jurisdiction finally determines that the calculation or determination of
interest payable by a Canadian Guarantor in respect of the Obligations pursuant
to this Agreement and the other Loan Documents shall be governed by the laws of
the province of Nova Scotia or the federal laws of Canada:
(a) Whenever interest payable by Canadian Guarantor is
calculated on the basis of a period which is less than the actual number of days
in a calendar year, each rate of interest determined pursuant to such
calculation is, for the purposes of the Interest Act (Canada), equivalent to
such a rate multiplied by the actual number of days in the calendar year in
which such rate is to be ascertained and divided by the number of days used as
the basis of such calculation.
(b) In no event shall the aggregate "interest" (as defined in
Section 347 of the Criminal Code, R.S.C. 1985, c. C-46, as the same shall be
amended, replaced or re-enacted from time to time) payable by Canadian Guarantor
to Agent or any Lender under this Agreement or any other Loan Document exceed
the effective annual rate of interest on the "credit advances" (as defined in
that section) under this Agreement or such other Loan Document lawfully
permitted under that section and, if any payment, collection or demand pursuant
to this Agreement or any other Loan Document in respect of "interest" (as
defined in that section) is determined to be contrary to the provisions of that
section, such payment, collection or demand shall be deemed to have been made by
mutual mistake of Agent, Lenders and Canadian Guarantor and the amount of such
payment or collection shall be refunded by Agent and Lenders to Canadian
Guarantor. For the purposes of this Agreement and each other Loan Document to
which Canadian Guarantor is a party, the effective annual rate of interest
payable by Canadian Guarantor shall be determined in accordance with generally
accepted actuarial practices and principles over the term of the loans on the
basis of annual compounding for the lawfully permitted rate of interest and, in
the event of dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by Agent of the account of Canadian Guarantor will be
conclusive for the purpose of such determination in the absence of evidence to
the contrary.
(c) All calculations of interest payable by Canadian Guarantor
under this Agreement or any other Loan Document are to be made on the basis of
the nominal interest rate described herein and not on the basis of effective
yearly rates or on any other basis which gives effect to the principle of deemed
reinvestment of interest. The parties acknowledge that there is a material
difference between the stated nominal interest rates and the effective yearly
rates of interest and that they are capable of making the calculations required
to determine such effective yearly rates of interest.
2.19 CURRENCY; JUDGMENT. This is an international financial transaction
in which the specification of a currency and payment in New York, New York is of
the essence.
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Dollars shall be the currency of account in the case of all payments pursuant to
or arising under this Agreement or under any other Loan Document, and all such
payments shall be made to Agent's Account in New York, New York in immediately
available funds. To the fullest extent permitted by applicable law, the
obligations of each Borrower to the Lender Group under this Agreement and under
the other Loan Documents shall not be discharged by any amount paid in any other
currency or in a place other than to Agent's Account in New York, New York to
the extent that the amount so paid after conversion under this Agreement and
transfer to New York, New York does not yield the amount of Dollars in New York,
New York due under this Agreement and under the other Loan Documents. If, for
the purposes of obtaining judgement in any court, if it is necessary to convert
a sum due hereunder in Dollars into another currency (the "Other Currency"), to
the fullest extent permitted by applicable law, the rate of exchange shall be
that at which the Other Currency on the business day preceding that on which
final judgement is given. The obligation of each Borrower in respect of any such
sum due from it to the Lender Group hereunder shall, notwithstanding any
judgement in such Other Currency, be discharged only to the extent that, on the
business day immediately following the date on which Agent receives any sum
adjudged to be so due in the Other Currency, Agent may, in accordance with
normal banking procedures, purchase Dollars with the Other Currency. If the
Dollars so purchased are less that the sum originally due to the Lender Group in
Dollars, each Borrower agrees, as a separate obligation and notwithstanding any
such judgement, to indemnify the Lender Group against such loss, and if the
Dollars so purchased exceed the sum originally due to the Lender Group in
Dollars, the Lender Group agrees to remit to Borrowers such excess.
2.20 REGISTERED NOTES. Administrative Borrower agrees to record each
Term Loan and each Advance on the Register referred to in Section 14.1(h). Each
Term Loan and each Advance recorded on the Register (the "Registered Loan") may
not be evidenced by promissory notes other than Registered Notes (as defined
below). Upon the registration of each Term Loan or each Advance, each Borrower
agrees, at the request of any Lender, to execute and deliver to such Lender a
promissory note, in conformity with the terms of this Agreement, in registered
form to evidence such Registered Loan, in form and substance reasonably
satisfactory to such Lender, and registered as provided in Section 14.1(h) (a
"Registered Note"), payable to the order of such Lender and otherwise duly
completed, provided that any Registered Note issued to evidence Advances shall
be issued in the principal amount of the applicable Lender's Revolver
Commitment. Once recorded on the Register, each Term Loan and each Advance may
not be removed from the Register so long as it or they remain outstanding, and a
Registered Note may not be exchanged for a promissory note that is not a
Registered Note.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise to extend any credit provided for hereunder), is subject
to the fulfillment, to the satisfaction of Agent, of each of the conditions
precedent set forth below:
(a) the Closing Date shall occur on or before June 30, 2003;
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(b) Agent shall have received all financing statements
required by Agent, duly authorized by the applicable Loan Parties, and Agent
shall have received confirmation of the filing of all such financing statements;
(c) Lenders shall have received each of the following
documents, in form and substance satisfactory to Lenders, duly executed, and
each such document shall be in full force and effect:
(i) the Cash Management Agreements,
(ii) the Control Agreements,
(iii) the Copyright Security Agreement,
(iv) the Disbursement Letter,
(v) the Due Diligence Letter,
(vi) the Expenses Letter,
(vii) the Guaranties,
(viii) general security agreements securing the
obligations of the Guarantors to the Agent and the Lender
Group in form and substance satisfactory to Agent,
(ix) the Mortgages,
(x) the Officers' Certificate,
(xi) the Patent Security Agreement,
(xii) the Pay-Off Letter, together with UCC and
PPSA termination statements and other documentation evidencing
the termination by Existing Lenders of their Liens in and to
the properties and assets of the Loan Parties, and
(xiii) the Stock Pledge Agreement, together with
all certificates representing the shares of Stock pledged
thereunder, as well as Stock powers with respect thereto
endorsed in blank,
(xiv) the Trademark Security Agreement,
(xv) the Intercompany Subordination Agreement,
(xvi) the inter-lender agreement between Foothill
and Ableco,
(xvii) Collateral Assignments of the Xxxxxxx Note
and the Ruud Notes, together with the originals of such
Xxxxxxx Note and Ruud Notes,
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(xviii) Collateral Assignments of the notes
evidencing the Canadian Intercompany Loan and the UK
Intercompany Loan, and
(xix) the original key man life insurance policy
and Absolute Assignment of the key man life insurance
described in Section 6.8(d).
(d) No trustee, examiner, receiver or the like shall have been
appointed or designated with respect to any Borrower or its businesses,
properties or assets, including, without limitation the Collateral and any other
property which is security for the Obligations;
(e) The Bankruptcy Court shall have entered in the Chapter 11
Cases the Final Financing Order, in form and substance satisfactory to Lender
Group and their counsel, (i) authorizing the execution and performance of the
Loan Documents, (ii) granting to Agent, for the benefit of the Lenders, security
interests and Liens and the super-priority administrative expense claims status,
(iii) modifying the automatic stay and (iv) containing such other terms and
provisions as shall be required by Lenders and by their counsel, and no appeal
or contest with respect to same shall be pending which seeks to (x) reverse,
amend or modify the priority of the post-petition liens and security interests
and super-priority administrative claim status granted in favor of Agent and
Lenders, (y) except for Permitted Liens or as set forth in the Final Financing
Order, grant or permit the grant of a Lien on any of the Collateral, or (iii)
challenge the good faith finding, and/or restrictions granted pursuant to
Section 364(e) in the Bankruptcy Code;
(f) Agent shall have received a certificate from the Secretary
of each Loan Party (i) attesting to the resolutions of such Loan Party's board
of directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Loan Party is a party and
authorizing specific officers of such Loan Party to execute the same and (ii)
certifying the names and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which such Loan Party is a party;
(g) Agent shall have received copies of each Borrower's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Borrower;
(h) Agent shall have received a certificate of status with
respect to each Borrower dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Borrower, which certificate shall indicate that such
Borrower is in good standing in such jurisdiction;
(i) Agent shall have received certificates of status with
respect to each Borrower, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Borrower) in which its failure to
be duly qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Borrower is in good standing in such
jurisdictions;
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(j) Agent shall have received a certificate from the Secretary
of each Guarantor (i) attesting to the resolutions of such Guarantor's Board of
Directors authorizing its execution, delivery, and performance of the Loan
Documents to which such Guarantor is a party and authorizing specific officers
of such Guarantor to execute the same and (ii) certifying the names and true
signatures of the officers of such Guarantor authorized to sign each Loan
Document to which such Guarantor is a party;
(k) Agent shall have received copies of each Guarantor's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Guarantor;
(l) Agent shall have received a certificate of status with
respect to each Guarantor, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Guarantor, which certificate shall indicate that such
Guarantor is in good standing in such jurisdiction;
(m) Agent shall have received certificates of status with
respect to each Guarantor, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Guarantor) in which its failure to
be duly qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Guarantor is in good standing in such
jurisdictions;
(n) Agent shall have received a certificate of insurance,
together with the endorsements thereto, as are required by Section 6.8, the form
and substance of which shall be satisfactory to Agent;
(o) Agent shall have received Collateral Access Agreements
with respect to all locations leased by any Loan Party or owned by any third
party and at which Collateral is located as identified on Schedule 5.5;
(p) Agent shall have received opinions of Borrowers' and
Guarantors' counsel in form and substance satisfactory to Lenders, which opinion
shall include an opinion regarding the validity and enforceability of Lenders'
application of Guarantor Collateral located in Canada and UK to the Obligations;
(q) Agent shall have received satisfactory evidence (including
a certificate of the chief financial officer of Parent) that all tax returns
required to be filed by Loan Parties have been timely filed and all taxes upon
Loan Parties or their properties, assets, income, and franchises (including Real
Property taxes and payroll taxes) have been paid prior to delinquency, except
such taxes that are the subject of Permitted Protests;
(r) Borrowers shall have the Required Availability after
giving effect to the initial extensions of credit hereunder;
(s) Lenders shall have completed their business, legal, and
collateral due diligence, including (i) a collateral audit and review of
Borrowers' books and records and
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verification of Borrowers' representations and warranties to the Lender Group,
the results of which shall be satisfactory to Lenders, (ii) an inspection of
each of the locations where Eligible Inventory is located, the results of which
shall be satisfactory to Agent, (iii) satisfactory review of perfection and tax
lien issues in Canada and the United Kingdom, and (iv) a satisfactory takeover
audit of such matters as Agent shall deem appropriate in its sole discretion,
including, without limitation, a testing of all eligible Collateral located in
the United Kingdom, a review of taxes payable by Borrowers and DSI (including
excise taxes), insurance, rents, inventory reconciliations, transfer pricing and
contra account activity, and the structure and documentation of the indebtedness
owing by DSI to Parent;
(t) Lenders shall have received completed reference checks
with respect to Borrowers' senior management, the results of which are
satisfactory to Lenders in their sole discretion;
(u) Lenders shall have received an appraisal of the Net
Liquidation Percentage applicable to Borrowers', DSI's and Canadian Guarantor's
Eligible Inventory and an appraisal of Loan Parties' Equipment, the results of
which shall be satisfactory to Lenders;
(v) Lenders shall have received the Closing Date Business Plan
and the Budget;
(w) The capitalization and capital structure of Borrowers and
the subsidiaries of Borrowers shall in all respects be satisfactory to Lenders;
(x) The existing and projected liquidity of Borrowers and
their ability to fund ongoing working capital, the cash management structure,
flow of funds and other cash requirements shall be satisfactory to Lenders;
(y) After giving effect to the initial loans under this
Agreement, the Prior DIP Facility shall be fully repaid in cash and terminated
and the obligations of Canadian Guarantor to the Prior Lenders and UK Guarantors
to the Prior Lenders shall be fully repaid in cash and terminated;
(z) Lenders shall have received a field audit examination,
which shall be dated no earlier than sixty (60) days prior to the Closing Date,
the results of which shall be satisfactory to Lenders in all respects,
including, without limitation, Lenders' determination that nothing contained in
such field audit examination has then resulted in, or could reasonably be
expected to result in, a Material Adverse Change;
(aa) No Material Adverse Change shall have occurred
in Borrowers' or DSI's business, assets, financial condition, performance or
prospects, in the value of the Collateral, in the ability of Borrowers or DSI to
operate in accordance with the projections for the period after the Closing Date
most recently delivered to Agent prior to the Closing Date, or in the ability of
Borrowers or DSI to comply with the financial covenants set forth in Section
7.20;
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(ab) Lenders shall have received an enterprise value
report with respect to Borrowers, performed by Deloitte and Touche, LLP, the
results of which must be satisfactory to the Lenders,
(ac) Lenders shall have received and reviewed
Borrowers' Material Contracts, the results of which shall be satisfactory to
Lenders in their sole discretion;
(ad) Lenders shall have reviewed Borrowers' affiliate
and inter-company transactions, the results of which review shall be
satisfactory to Lenders in their sole discretion;
(ae) Lenders shall have received UCC, PPSA, tax lien
(or, for all applicable Canadian jurisdictions, receipt of duly executed consent
form(s) authorizing the Lenders as their Agents to conduct searches), and
litigation searches for all domestic jurisdictions (and the non-domestic
equivalents of such searches) in which Borrowers and Guarantors and Collateral
may be located, the results of which searches shall be satisfactory to Lenders
in their sole discretion;
(af) Borrowers shall pay all Lender Group Expenses
incurred in connection with the transactions evidenced by this Agreement;
(ag) Borrowers shall have received all licenses,
approvals or evidence of other actions required by any Governmental Authority in
connection with the execution and delivery by Borrowers of this Agreement or any
other Loan Document or with the consummation of the transactions contemplated
hereby and thereby;
(ah) Lenders shall have received evidence
satisfactory to Lenders that the Borrowers' and DSI's relationships with their
respective critical vendors and customers are maintained in a satisfactory
manner and consistent with Borrowers' and DSI's representations to Lenders;
(ai) Agent shall have received mortgagee title
insurance policies (or marked commitments to issue the same) for the Real
Property Collateral issued by a title insurance company satisfactory to Agent
(each a "Mortgage Policy" and, collectively, the "Mortgage Policies") in amounts
satisfactory to Agent assuring Agent that the Mortgages on such Real Property
Collateral are valid and enforceable first priority mortgage Liens on such Real
Property Collateral free and clear of all defects and encumbrances except
Permitted Liens, and the Mortgage Policies otherwise shall be in form and
substance satisfactory to Lenders; and
(aj) all other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance satisfactory
to Agent.
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to make
Advances (or otherwise extend credit hereunder) is subject to the fulfillment,
on or before the date applicable thereto,
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of each of the conditions subsequent set forth below (the failure by Borrowers
to so perform or cause to be performed constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to Agent
certified copies of the policies of insurance, together with the endorsements
thereto, as are required by Section 6.8, the form and substance of which shall
be satisfactory to Agent and its counsel; and
(b) on or before October 20, 2003, Borrowers shall have had a
Plan of Reorganization acceptable to Lender Group in its Permitted Discretion
confirmed by the Bankruptcy Court which shall, among other things, provide for
the payment and satisfaction in full in cash of the Obligations.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of
the Lender Group (or any member thereof) to make any Advances (or to extend any
other credit hereunder) shall be subject to the following conditions precedent:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such extension of credit, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof;
(c) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority against
any Loan Party, Agent, any Lender, or any of their Affiliates;
(d) the amount of the Revolver Usage, after giving effect to
the requested Advance, shall not exceed Availability, and
(e) no Material Adverse Change shall have occurred.
3.4 TERM. This Agreement shall become effective upon the execution and
delivery hereof by Borrowers, Agent, and the Lenders and shall continue in full
force and effect for a term ending on the earliest of (a) the effective date of
confirmation by the Bankruptcy Court of Borrowers' plan of reorganization in the
Chapter 11 Cases, (b) October 31, 2003 (the "Maturity Date"), (c) at Lenders'
option the conversion of the Chapter 11 Cases to a case under Chapter 7 of the
Bankruptcy Code, (d) at Lenders' option, the Loan Parties ceasing or
discontinuing their ordinary business operations, and (e) at Lenders' option,
the appointment of a trustee or an examiner with expanded powers under the
Bankruptcy Code. The foregoing notwithstanding, the Lender Group, upon the
election of the Required Lenders, shall have the right to terminate their
obligations under this Agreement immediately and without notice upon the
occurrence and during the continuation of an Event of Default.
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3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrowers with respect to any outstanding Letters of Credit and including all
Bank Products Obligations) immediately shall become due and payable without
notice or demand (including (a) either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing
the original Letters of Credit to be returned to the Issuing Lender, and (b)
providing cash collateral to be held by Agent for the benefit of Xxxxx Fargo or
its Affiliates with respect to the then extant Bank Products Obligations). No
termination of this Agreement, however, shall relieve or discharge Borrowers of
their duties, Obligations, or covenants hereunder and the Agent's Liens in the
Collateral shall remain in effect until all Obligations have been fully and
finally discharged and the Lender Group's obligations to provide additional
credit hereunder have been terminated. When this Agreement has been terminated
and all of the Obligations have been fully and finally discharged and the Lender
Group's obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, Agent will, at Borrowers' sole expense, execute and
deliver any UCC termination statements, lien releases, mortgage releases,
re-assignments of trademarks, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable form)
as are reasonably necessary to release, as of record, the Agent's Liens and all
notices of security interests and liens previously filed by Agent with respect
to the Obligations.
3.6 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at any
time upon 15 days prior written notice by Administrative Borrower to Agent, to
terminate this Agreement by paying to Agent, for the benefit of the Lender
Group, in cash, the Obligations (including (a) either (i) providing cash
collateral to be held by Agent for the benefit of those Lenders with a Revolver
Commitment in an amount equal to 105% of the then extant Letter of Credit Usage,
or (ii) causing the original Letters of Credit to be returned to the Issuing
Lender, and (b) providing cash collateral to be held by Agent for the benefit of
Xxxxx Fargo or its Affiliates with respect to the then extant Bank Products
Obligations), in full. If Administrative Borrower has sent a notice of
termination pursuant to the provisions of this Section, then the Commitments
shall terminate and Borrowers shall be obligated to repay the Obligations
(including (a) either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the then extant Letter of Credit Usage, or (ii) causing the original Letters
of Credit to be returned to the Issuing Lender, and (b) providing cash
collateral to be held by Agent for the benefit of Xxxxx Fargo or its Affiliates
with respect to the then extant Bank Products Obligations), in full on the date
set forth as the date of termination of this Agreement in such notice.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Borrower hereby grants to Agent,
for the benefit of the Lender Group and pursuant to the Final Financing Order
and Section 364(c)(2) and (c)(3) of the Bankruptcy Code, a continuing security
interest in all of its right, title, and interest in all currently existing and
hereafter acquired or arising Personal Property Collateral in order to secure
prompt repayment of any and all of the Obligations in accordance with the
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terms and conditions of the Loan Documents and in order to secure prompt
performance by Borrowers of each of their covenants and duties under the Loan
Documents, in each case subject only to the Professional Fee Carve-Out and
Permitted Liens. The Agent's Liens in and to the Personal Property Collateral
shall attach to all Personal Property Collateral without further act on the part
of Agent or Borrowers. Anything contained in this Agreement or any other Loan
Document to the contrary notwithstanding, except for Permitted Dispositions,
Borrowers have no authority, express or implied, to dispose of any item or
portion of the Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, and if and to
the extent that perfection or priority of Agent's security interest is dependent
on or enhanced by possession, the applicable Borrower, immediately upon the
request of Agent, shall endorse and deliver physical possession of such
Negotiable Collateral to Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the continuation of an
Event of Default, Agent or Agent's designee may (a) notify Account Debtors of
Borrowers that the Accounts, chattel paper, or General Intangibles have been
assigned to Agent or that Agent has a security interest therein, or (b) collect
the Accounts, chattel paper, or General Intangibles directly and charge the
collection costs and expenses to the Loan Account. Each Borrower agrees that it
will hold in trust for the Lender Group, as the Lender Group's trustee, any
Collections that it receives and immediately will deliver said Collections to
Agent or a Cash Management Bank in their original form as received by the
applicable Loan Party.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon the
request of Agent, Borrowers shall authorize and deliver to Agent, any and all
financing statements, original financing statements in lieu of continuation
statements, fixture filings, security agreements, pledges, assignments,
endorsements of certificates of title, and all other documents (the "Additional
Documents") that Agent may request in its Permitted Discretion, in form and
substance satisfactory to Agent, to perfect and continue perfected or better
perfect the Agent's Liens in the Collateral (whether now owned or hereafter
arising or acquired), to create and perfect Liens in favor of Agent in any Real
Property acquired after the Closing Date, and in order to fully consummate all
of the transactions contemplated hereby and under the other Loan Documents. To
the maximum extent permitted by applicable law, each Borrower authorizes Agent
to execute any such Additional Documents in the applicable Borrower's name and
authorize Agent to file such executed Additional Documents in any appropriate
filing office. In addition, on such periodic basis as Agent shall require,
Borrowers shall (a) provide Agent with a report of all new patentable,
copyrightable, or trademarkable materials acquired or generated by Borrowers
during the prior period, (b) cause all patents, copyrights, and trademarks
acquired or generated by Borrowers that are not already the subject of a
registration with the appropriate filing office (or an application therefor
diligently prosecuted) to be registered with such appropriate filing office in a
manner sufficient to impart constructive notice of Borrowers' ownership thereof,
and (c) cause to be prepared, executed, and delivered to Agent supplemental
schedules to the
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applicable Loan Documents to identify such patents, copyrights, and trademarks
as being subject to the security interests created thereunder.
4.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as such Borrower's true and lawful attorney, with
power to (a) if such Borrower refuses to, or fails timely to execute and deliver
any of the documents described in Section 4.4, sign the name of such Borrower on
any of the documents described in Section 4.4, (b) at any time that an Event of
Default has occurred and is continuing, sign such Borrower's name on any invoice
or xxxx of lading relating to the Collateral, drafts against Account Debtors, or
notices to Account Debtors, (c) send requests for verification of Accounts, (d)
endorse such Borrower's name on any Collection item that may come into the
Lender Group's possession, (e) at any time that an Event of Default has occurred
and is continuing, make, settle, and adjust all claims under such Borrower's
policies of insurance and make all determinations and decisions with respect to
such policies of insurance, and (f) at any time that an Event of Default has
occurred and is continuing, settle and adjust disputes and claims respecting the
Accounts, chattel paper, or General Intangibles directly with Account Debtors,
for amounts and upon terms that Agent determines to be reasonable, and Agent may
cause to be executed and delivered any documents and releases that Agent
determines to be necessary. The appointment of Agent as each Borrower's
attorney, and each and every one of its rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully and
finally repaid and performed and the Lender Group's obligations to extend credit
hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their
respective officers, employees, or agents) shall have the right, from time to
time hereafter to inspect the Books and to check, test, and appraise the
Collateral in order to verify Loan Parties' and Foreign Subsidiaries' financial
condition or the amount, quality, value, condition of, or any other matter
relating to, the Collateral.
4.7 CONTROL AGREEMENTS. Each Loan Party agrees that it will not
transfer assets out of any Securities Accounts other than as permitted under
Section 7.19 and, if to another securities intermediary, unless each of the
applicable Borrower, Agent, and the substitute securities intermediary have
entered into a Control Agreement. Loan Parties hereby agree to take any and all
actions that Agent requests in order for Agent to obtain control in accordance
with Sections 9-104, 9-105, 9-106 and 9-107 of the Code with respect to any
Securities Account, DDA's, chattel paper, Investment Property and
letter-of-credit rights. No arrangement contemplated hereby or by any Control
Agreement in respect of any Securities Accounts or other Investment Property or
any DDA, electronic chattel paper or letter-of-credit rights shall be modified
by Borrowers without the prior written consent of Agent. Upon the occurrence and
during the continuance of a Default or Event of Default, Agent may notify any
securities intermediary or depository to liquidate the applicable Securities
Account or any related Investment Property maintained or held thereby and remit
the proceeds thereof to the Agent's Account.
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4.8 ADMINISTRATIVE PRIORITY. Borrowers hereby agree that the
Obligations shall constitute allowed administrative expenses in the Chapter 11
Cases having priority over all administrative expenses of and unsecured claims
against Borrowers now existing or hereafter arising, of any kind or nature
whatsoever, including without limitation all administrative expenses of the kind
specified in Sections 503(b) and 507(b) of the Bankruptcy Code, subject, as to
priority, only to the Professional Fee Carve-Out having priority over any
Obligations to the extent set forth in the Final Financing Order.
4.9 NO FILINGS REQUIRED. The Liens and security interests granted by
Borrowers to Agent herein and the administrative priority provided herein shall
not be modified, altered or impaired in any manner by any other financing or
extension of credit or incurrence of debt by Borrowers (pursuant to Section 364
of the Bankruptcy Code or otherwise), or by any dismissal or conversion of the
Chapter 11 Cases, or by any other act or omission whatsoever.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, each Borrower makes the following representations and warranties to
the Lender Group which shall be true, correct, and complete, in all material
respects, as of the date hereof, and shall be true, correct, and complete, in
all material respects, as of the Closing Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter, as though
made on and as of the date of such Advance (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Each Loan Party has good and indefeasible title to
its Collateral and its Real Property, free and clear of Liens except for
Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are bona fide existing
payment obligations of Account Debtors created by the sale and delivery of
Inventory or the rendition of services to such Account Debtors in the ordinary
course of Borrowers' business, owed to Borrowers without defenses, disputes,
offsets, counterclaims, or rights of return or cancellation. As to each Account
that is identified by Administrative Borrower as an Eligible Account in a
borrowing base report submitted to Agent, such Account is not excluded as
ineligible by virtue of one or more of the excluding criteria set forth in the
definition of Eligible Accounts.
5.3 ELIGIBLE INVENTORY. All Eligible Inventory is of good and
merchantable quality, free from defects. As to each item of Inventory that is
identified by Administrative Borrower as Eligible Inventory in a borrowing base
report submitted to Agent, such inventory is not excluded as ineligible by
virtue of one or more of the excluding criteria set forth in the definition of
Eligible Inventory.
5.4 EQUIPMENT. All of the Equipment of Loan Parties is used or held for
use in each such party's business and is fit for such purposes.
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5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment of
Loan Parties are not stored with a bailee, warehouseman, or similar party,
except as set forth on Schedule 5.5 and are located only at the locations
identified on Schedule 5.5.
5.6 INVENTORY RECORDS. Each Loan Party keeps correct and accurate
records itemizing and describing the type, quality, and quantity of its
Inventory and the book value thereof.
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of each Loan Party is located at the address indicated in Schedule 5.7,
and each Loan Party's FEIN is identified in Schedule 5.7.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES
(a) Each Loan Party is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization and qualified to
do business in any state or province where the failure to be so qualified
reasonably could be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.8(b), is a complete and accurate
description of the authorized capital Stock of each Loan Party and each
Subsidiary of each Loan Party, by class, and, as of the Closing Date, a
description of the number of shares of each such class that are issued and
outstanding. Other than as described on Schedule 5.8(b), there are no
subscriptions, options, warrants, or calls relating to any shares of each
Borrower's capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. No Loan Party is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on Schedule 5.8(c), is a complete and accurate
list of each Loan Party's direct and indirect Subsidiaries, showing: (A) the
jurisdiction of their organization; (B) the number of shares of each class of
common and preferred Stock authorized for each of such Subsidiaries; and (C) the
number and the percentage of the outstanding shares of each such class owned
directly or indirectly by the applicable Loan Party. All of the outstanding
capital Stock of each such Subsidiary has been validly issued and is fully paid
and non-assessable.
(d) Set forth on Schedule 5.8(c) is a complete and accurate
list of each Loan Party's direct and indirect Investments in Persons other than
Subsidiaries.
(e) Except as set forth on Schedule 5.8(c), there are no
subscriptions, options, warrants, or calls relating to any shares of any Loan
Party's Subsidiaries' capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. No Loan Party or
any of its respective Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of any Loan
Party's Subsidiaries' capital Stock or any security convertible into or
exchangeable for any such capital Stock.
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5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the Loan Documents to which
it is a party have been duly authorized by all necessary action on the part of
such Borrower.
(b) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the Loan Documents to which
it is a party do not and will not (i) subject to the entry of the Final
Financing Order by the Bankruptcy Court violate any provision of federal, state,
or local law or regulation applicable to any Borrower, the Governing Documents
of any Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on any Borrower, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation of any Borrower other than defaults
arising solely as a result of the commencement of the Chapter 11 Cases, the
effect of which contravention will not be subject to Section 362 of the
Bankruptcy Code, (iii) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any properties or assets of Borrower, other
than Permitted Liens, or (iv) require any approval of any Borrower's
interestholders or any approval or consent of any Person under any material
contractual obligation of any Borrower.
(c) Other than the filing of financing statements, fixture
filings, and Mortgages and the entry of the Final Financing Order, the
execution, delivery, and performance by each Borrower of this Agreement and the
Loan Documents to which such Borrower is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority or other Person.
(d) As to each Borrower, this Agreement and the other Loan
Documents to which such Borrower is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by such Borrower
and upon the entry of the Final Financing Order will be the legally valid and
binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally.
(e) Upon entry of the Final Financing Order, as applicable,
the provisions of the Loan Documents executed by the Borrowers are sufficient to
create valid Liens in favor of Agent on behalf of the Lenders which, pursuant to
Section 364 of the Bankruptcy Code and the Orders, will be perfected and first
priority Liens, subject only to the Permitted Liens.
(f) The execution, delivery, and performance by each Guarantor
of the Loan Documents to which it is a party have been duly authorized by all
necessary action on the part of such Guarantor.
(g) The execution, delivery, and performance by each Guarantor
of the Loan Documents to which it is a party do not and will not (i) violate any
provision of federal, state, provincial or local law or regulation applicable to
Guarantor, the Governing Documents of
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Guarantor, or any order, judgment, or decree of any court or other Governmental
Authority binding on Guarantor, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation of Guarantor, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of Guarantor, other than Permitted Liens, or (iv) require any approval
of Guarantor's interestholders or any approval or consent of any Person under
any material contractual obligation of Guarantor.
(h) The execution, delivery, and performance by each Guarantor
of the Loan Documents to which such Guarantor is a party do not and will not
require any registration with, consent, or approval of, or notice to, or other
action with or by, any Governmental Authority or other Person.
(i) The Loan Documents to which each Guarantor is a party, and
all other documents contemplated hereby and thereby, when executed and delivered
by such Guarantor will be legally valid and binding obligations of such
Guarantor, enforceable against such Guarantor in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
5.10 LITIGATION. Other than those matters disclosed on Schedule 5.10,
there are no actions, suits, or proceedings pending or, to the best knowledge of
Borrowers, threatened against any Loan Party, or any of their Subsidiaries, as
applicable, except for (a) matters that are fully covered by insurance (subject
to customary deductibles), and (b) matters arising after the Closing Date that,
in Lenders' Permitted Discretion, reasonably could not be expected to result in
a Material Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Loan Parties and their Subsidiaries that have been delivered by any such Loan
Parties to the Lender Group have been prepared in accordance with GAAP (except
as otherwise permitted in Section 5.19, and in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, such Loan Parties' and
their Subsidiaries' financial condition as of the date thereof and results of
operations for the period then ended. There has not been a Material Adverse
Change since the Petition Date.
5.12 FRAUDULENT TRANSFER. No transfer of property is being made by any
Loan Party and no obligation is being incurred by any Loan Party in connection
with the transactions contemplated by this Agreement or the other Loan Documents
with the intent to hinder, delay, or defraud either present or future creditors
of Loan Parties.
5.13 NON-OPERATING BORROWERS. No Non-operating Borrower other than as
set forth in Schedule 5.13 has or will have ongoing business operations (other
than minimal activity required to maintain its corporate existence and standing)
or owns or will own Collateral in excess of (a) $25,000 individually for each
Non-operating Borrower and (b) $100,000 in the aggregate for all Non-operating
Borrowers, or will receive any proceeds of Advances or Term Loans hereunder or
apply for any Letter of Credit hereunder.
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5.14 ENVIRONMENTAL CONDITION. Except as set forth on Schedule 5.14, (a)
to Loan Parties' knowledge, none of the Loan Parties' or ADLT Realty's
properties or assets has ever been used by the Loan Parties or ADLT Realty or by
previous owners or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials, where such production,
storage, handling, treatment, release or transport was in violation, in any
material respect, of applicable Environmental Law, (b) to Loan Parties'
knowledge, none of Loan Parties' or ADLT Realty's properties or assets has ever
been designated or identified in any manner pursuant to any Environmental Law
statute as a Hazardous Materials disposal site, (c) none of Loan Parties or ADLT
Realty have received notice that a Lien arising under any Environmental Law has
attached to any revenues or to any Real Property owned or operated by Loan
Parties or ADLT Realty, and (d) none of Loan Parties or ADLT Realty have
received a summons, citation, order, notice, notice of Environmental Action or
directive from the Environmental Protection Agency or any other Governmental
Authority concerning any action or omission by any Loan Party or ADLT Realty
resulting in the releasing or disposing of Hazardous Materials into the
environment, provided that receipt of a notice of an Environmental Action shall
not violate the representation set forth in this clause (d) or otherwise be or
be deemed an Event of Default unless such Environmental Action ripens into a
violation of Environmental Law or otherwise violates a provision of this Section
5.14.
5.15 BROKERAGE FEES. Loan Parties have not utilized the services of any
broker or finder in connection with Loan Parties' obtaining financing from the
Lender Group under this Agreement and no brokerage commission or finders fee is
payable by Loan Parties in connection herewith.
5.16 INTELLECTUAL PROPERTY. Each Loan Party owns, or holds licenses in,
all trademarks, trade names, copyrights, patents, patent rights, and licenses
that are necessary to the conduct of its business as currently conducted.
Attached hereto as Schedule 5.16 is a true, correct, and complete listing of all
material patents, patent applications, trademarks, trademark applications,
copyrights, and copyright registrations as to which each Loan Party is the owner
or is an exclusive licensee.
5.17 LEASES. Loan Parties enjoy peaceful and undisturbed possession
under all leases material to the business of Loan Parties and to which Loan
Parties are a party or under which Loan Parties are operating. All of such
leases are valid and subsisting and no material default by Loan Parties exists
under any of them, other than material defaults that are properly challenged
pursuant to a Permitted Protest or otherwise permitted to exist under this
Agreement.
5.18 DDAs. Set forth on Schedule 5.18 are all of the DDAs of each Loan
Party, including, with respect to each depository (i) the name and address of
that depository, and (ii) the account numbers of the accounts maintained with
such depository.
5.19 COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of Loan Parties in writing to Agent or any Lender
(including all information contained in the Schedules hereto or in the other
Loan Documents) for purposes of or in connection with this Agreement, the other
Loan Documents or any transaction contemplated
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herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of Loan Parties in writing to the Agent or
any Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. Loan Parties have furnished to
Lenders the audited Financial Statements previously delivered for the year ended
June 30, 2002, unaudited financial statements for the quarter ended March 31,
2003, which financial statements have been prepared in accordance with GAAP
(subject to normal year end adjustments) consistently applied throughout the
period involved, and the monthly financial statements for each month of fiscal
year 2003 through May 31, 2003, which financial statements are in the form
customarily prepared by Parent for internal review by senior management. On the
Closing Date, the Projections delivered as of such date represent, and as of the
date on which any other Projections are delivered to Agent, such additional
Projections represent Loan Parties' good faith best estimate of its future
performance for the periods covered thereby.
5.20 INDEBTEDNESS. Set forth on Schedule 5.20 is a true and complete
list of all Indebtedness of each Loan Party outstanding immediately prior to the
Closing Date that is to remain outstanding after the Closing Date and such
Schedule accurately reflects the aggregate principal amount of such Indebtedness
and the principal terms thereof.
5.21 APPOINTMENT OF TRUSTEE OR EXAMINER; LIQUIDATION. No order has been
entered in the Chapter 11 Cases (i) for the appointment of a chapter 11 trustee,
(i) for the appointment of an examiner with enlarged powers (beyond those set
forth in Sections 1106(a)(3) and (4) of the Bankruptcy Code) under Section
1106(b) of the Bankruptcy Code or (iii) to convert the Chapter 11 Cases to a
chapter 7 case or to dismiss the Chapter 11 Cases.
5.22 INTERRELATED ENTITIES. Parent is the direct and beneficial owner
or indirect owner and holder of all of the issued and outstanding Stock of the
other Borrowers and Guarantors. Parent and the other Borrowers and Guarantors
make up a related organization of various entities constituting a single
economic and business enterprise so that Borrowers and Guarantors share economic
interests such that benefits received by any one of them benefits the others.
Certain of Borrowers and Guarantors render services to or for the benefit of
other Borrowers and Guarantors, purchase or sell and supply goods to or from or
for the benefit of the others, make loans, advances and provide other financial
accommodations to or for the benefit of the other Borrowers and Guarantors
(including, inter alia, the guarantees by Borrowers and Guarantors of
Indebtedness of the other Borrowers and Guarantors) and provide administrative,
marketing, payroll and management services to or for the benefit of the other
Borrowers and Guarantors. Borrowers and Guarantors have centralized accounting
and legal service and certain common officers and directors.
5.23 TAXES. Except as set forth on Schedule 5.23, Borrowers and DSI
have paid all assessments and taxes arising prior to the commencement of the
Chapter 11 Cases (including, without limitation, all ad valorem, sales, use and
excise taxes) that are due and
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payable by such Borrower and DSI prior to such commencement before delinquency
or the expiration of any extension period, except to the extent that the
validity of such assessment or tax is the subject of a Permitted Protest.
Borrowers and DSI have paid all assessments and taxes arising on and after the
commencement of the Chapter 11 Cases (including, without limitation, all ad
valorem, sales and excise taxes) that are due and payable by such Borrowers and
DSI before delinquency or the expiration of any extension period, except to the
extent that the validity of such assessment or tax is the subject of a Permitted
Protest.
5.24 FINANCING ORDER. The Final Financing Order has been duly entered,
is valid, subsisting and continuing and (unless consented to by Lenders) has not
been vacated, modified, reversed on appeal, or vacated or modified by any
Bankruptcy Judge or District Court Judge and is not subject to any pending stay.
5.25 SUPER-PRIORITY LIEN AND ADMINISTRATIVE EXPENSE. All Obligations of
Borrowers to Agent and Lenders incurred during the pendency of the Chapter 11
Cases or thereafter are and (a) shall be secured by a first and prior Lien in
favor of Agent on behalf of Lenders upon the Collateral, (other than Liens set
forth on Schedule P-1 with respect thereto which are senior to Agent's Lien
therein and the Professional Fee Carve-Out) pursuant to the Final Financing
Order, including, without limitation, a Lien in favor of Agent on (i) all
property of the estate of each Borrower that is not otherwise subject to a Lien
of any other Person pursuant to Section 364(c)(2) of the Bankruptcy Code, and
(ii) all property of the estate of each Borrower that is subject to a prior Lien
of any other Person, and (b) shall constitute claims entitled to super-priority
under Section 364(c)(1) of the Bankruptcy Code, subject to the Professional Fee
Carve-Out, all as more fully set forth in the Final Financing Order.
5.26 MATERIAL CONTRACTS. As of the Closing Date, except as set forth on
Schedule 5.26, all of the Material Contracts are in full force and effect and no
material defaults currently exist thereunder by any Loan Party that is a party
thereto (other than defaults that need not be cured under Section 365(b)(2) of
the Bankruptcy Code and as otherwise permitted under Title 11 of the Bankruptcy
Code) or, to the knowledge of Loan Parties, any other party thereto.
5.27 ADLT REALTY. ADLT Realty does not have, and will at no time have,
any material operating, intellectual property or personal property assets. ADLT
Realty's only assets constitute owned real property.
5.28 EMPLOYEE BENEFITS.
(a) Except as set forth in Schedule 5.28(b-1), Canadian
Guarantor does not have, nor is Canadian Guarantor subject to, any present or
future obligation or liability under, any pension plan, deferred compensation
plan, retirement income plan, stock option or stock purchase plan, profit
sharing plan, bonus plan or policy, employee group insurance plan, program
policy or practice, formal or informal, with respect to its employees. Except as
set forth in Schedule 5.28 (b-2), the Loan Parties other than Canadian Guarantor
do not have any liability under any Benefit Plan.
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(b) Schedule 5.28 (b-1) lists all the employee benefit,
health, welfare, supplemental unemployment benefit, bonus, pension, profit
sharing, deferred compensation, stock compensation, stock purchase, retirement,
hospitalization insurance, medical, dental, legal, disability and similar plans
or arrangements or practices relating to the employees or former employees of
each Loan Party which are currently maintained or were maintained at any time in
the last five calendar years (the "Canadian Employee Plans"). Schedule 5.28
(B-2) lists all Benefit Plans of the Loan Parties other than Canadian Guarantor.
(c) All of the Canadian Employee Plans are and have been
established, registered, qualified, invested and administered in all respects in
accordance with all Laws applicable to the Canadian Employee Plans. No fact or
circumstance exists that could adversely affect the tax-exempt status of a
Canadian Employee Plan. Each Benefit Plan is in compliance in all material
respects with the applicable provisions of ERISA, the IRC and other Federal or
State law. Each Benefit Plan which is intended to qualify under Section 401(a)
of the IRC has received a favorable determination letter from the IRS and to the
best of each Loan Party's knowledge, nothing has occurred which would cause the
loss off such qualification.
(d) All obligations regarding the Canadian Employee Plans have
been satisfied, there are no outstanding defaults or violations by any part to
any Canadian Employee Plan and no taxes, penalties or fees are owing or eligible
under any of the Canadian Employee Plans. There are no pending, or to the best
of any Loan Party's knowledge, threatened claims, actions or lawsuits, or action
by any Governmental Authority, with respect to any Benefit Plan. There has been
no non-exempt prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Benefit Plan which could be reasonably
expected to subject the Loan Parties to any material liability.
(e) No amendments have been made to any Canadian Employee Plan
and no improvements to any Canadian Employee Plan have been promised and no
amendments or improvements to an Canadian Employee Plan will be made or promised
by any Canadian Guarantor before the Closing Date.
(f) Canadian Guarantor has furnished to the Lenders true,
correct and complete copies of all the Canadian Employee Plans as amended as of
the date hereof together with all related documentation including funding
agreements, actuarial reports, funding and financial information returns and
statements, all professional opinions (whether or not internally prepared) with
respect to each Canadian Employee Plan, all material internal memoranda
concerning the Employee Plans, copies of material correspondence with all
regulatory authorities with respect to each Canadian Employee Plan and plan
summaries, booklets and personnel manuals. No material changes have occurred to
the Canadian Employee Plans or are expected to occur which would affect the
actuarial reports or financial statements required to be provided to the Lenders
pursuant to this Section 5.28.
(g) Each Loan Party other than Canadian Guarantor has
furnished to the Lenders true, correct and complete copies of all the Benefit
Plans subject to ERISA as
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amended as of the date hereof and such other documentation and information with
respect to such Benefit Plans as Lenders may request from time to time.
(h) Each Canadian Employee Plan is fully funded or fully
insured on both an ongoing and solvency basis pursuant to the actuarial
assumptions and methodology set out in Schedule 5.28(b-1). Each Loan Party other
than Canadian Guarantor has made all required contributions to any Benefit Plan
subject to Section 412 of the IRC, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the IRC has been
made with respect to any Benefit Plan.
(i) Except as disclosed in Schedule 5.28(b-1), none of the
Canadian Employee Plans or Benefit Plans provides benefits to retired employees
or to the beneficiaries or dependents of retired employees.
5.29 PAYMENTS TO EMPLOYEES AND OTHERS. Canadian Guarantor has paid or
accrued as a liability on the books of such Canadian Guarantor, all material
payments due from any Canadian Guarantor to any employee, independent
contractor, Person or Governmental Authority on account of workers'
compensation, wages or other compensation and, as applicable, employee health
and welfare insurance and other benefits.
5.30 WITHHOLDINGS AND REMITTANCES. Canadian Guarantor has withheld from
each payment made to any of its present or former employees, officers and
directors, and to all persons who are non-residents of Canada for the purposes
of the Canadian Income Tax Act all amounts required by Law to be withheld,
including without limitation all payroll deductions required to be withheld, and
furthermore, has remitted such withheld amounts within the prescribed periods to
the appropriate Governmental Authority. Canadian Guarantor has remitted all
Canadian Pension Plan contributions, provincial pension plan contributions,
employment insurance premiums, employer health taxes and other taxes payable by
it in respect of its employees and has remitted such amounts to the proper
Governmental Authority within the time required under the applicable.
6. AFFIRMATIVE COVENANTS.
Each Loan Party covenants and agrees that, so long as any
credit hereunder shall be available and until full and final payment of the
Obligations (other than contingent, unliquidated indemnification Obligations),
and the termination of this Agreement, Loan Parties shall and shall cause each
of their respective Subsidiaries to do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Loan Parties to produce financial statements in accordance with GAAP and
maintain records pertaining to the Collateral that contain information as from
time to time reasonably may be requested by Agent. Loan Parties also shall keep
an inventory reporting system that shows all additions, sales, claims, returns,
and allowances with respect to the Inventory.
6.2 COLLATERAL REPORTING. Provide Agent, (with copies for each Lender)
with the following documents at the following times in form satisfactory to
Lenders:
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Weekly (a) a consolidating roll forward of Accounts aging from the
prior week with supporting documentation as requested by
Agent,
(b) detailed aging, by total, of the Accounts, it being
acknowledged that such report shall be delivered
electronically,
(c) notice of all returns, disputes or claims in excess of
$50,000 individually or $100,000 in the aggregate,
(d) Inventory reports specifying each Loan Party's cost of its
Inventory, by category, it being acknowledged that such
reports shall be delivered electronically,
(e) a Borrowing Base certificate signed by Parent's Chief
Financial Officer confirming the calculation of the then
applicable Borrowing Base as computed electronically by Agent,
(f) a Budget to actual analysis of cash receipts, cash
disbursements and sales,
(g) a Compliance Certificate, and
(h) a detailed aging, by vendor, of each Loan Party's accounts
payable (including any intercompany accounts payable), it
being acknowledged that such report shall be delivered
electronically.
Monthly (not (i) a consolidating roll forward of Accounts aging from the
later than the prior month with supporting documentation, including a
15th Business separate sales journal for each reporting entity, and a
Day of each collection journal and credit register since the last such
month except as schedule,
noted)
(j) a detailed calculation of the Borrowing Base (including
detail regarding those Accounts that are not Eligible Accounts
and Inventory that is not Eligible Inventory),
(k) a monthly detailed aging, by total, of the Accounts, it
being acknowledged that such report shall be delivered
electronically,
(l) a monthly reconciliation of actual Accounts to the
Accounts reported on Parent's consolidated financial
statements, it being acknowledged that such reconciliation
shall be delivered with the statements required under Section
6.3(a),
(m) Month-end final Inventory reports and a reconciliation of
actual month-end final Inventory reports to the Inventory
reported on Parent's consolidated financial statements, it
being acknowledged that such reconciliation shall be delivered
with the statements required under
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Section 6.3(a),
(n) Month-end payable reports and a reconciliation of actual
payables to the payables reported on Parent's consolidated
financial statements, it being acknowledged that such
reconciliation shall be delivered with the statements required
under Section 6.3(a),
(o) copies of tax receipts evidencing the payment of Taxes by
Canadian Guarantor and UK Guarantors and satisfactory tax
reporting, including payroll, real estate and excise taxes,
(p) a report of cash balances of UK Guarantors, Canadian
Guarantor and the Foreign Subsidiaries,
(q) monthly professional fee statements and U.S. Trustee
operating reports when and as provided to the U.S. Trustee,
and
(r) monthly cash flow statements (prepared by week) analyzing
actual cash flow vs. projected cash flow in the Budget,
together with a narrative explanation of material variances.
Quarterly (s) a detailed listing of each Loan Party's customers,
including the address, telephone numbers and contact
personnel, and
(t) a report regarding each Loan Party's accrued, but unpaid,
ad valorem taxes,
Upon request by (u) copies of invoices in connection with the Accounts, credit
any Lender memos, remittance advices, deposit slips, shipping and
delivery documents in connection with the Accounts and, for
Inventory and Equipment acquired by Borrowers, Canadian
Guarantor and DSI purchase orders and invoices, and
(v) such other reports as to the Collateral, or the financial
condition of Borrowers or Guarantors as any Lender may
request.
Borrowers shall promptly give or cause to be given or served
on Agent and Lenders and their counsel copies of all pleadings, motions,
applications, financial information and other documents and papers filed by
Borrowers in the Chapter 11 Cases. Promptly after the sending thereof, Borrowers
shall give Agent and Lenders copies of all written responses given by Borrowers
to any official or unofficial creditors' committee in the Chapter 11 Cases. In
addition, each Borrower agrees to cooperate fully with Agent to facilitate and
implement a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth above.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent, with
copies to each Lender:
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(a) as soon as available, but in any event within 30 days (45
days in the case of a month that is the end of a fiscal quarter in a fiscal
year) after the end of each month during each of Parent's fiscal years,
(i) a company prepared consolidated and
consolidating balance sheet, income statement, and statement
of cash flow covering Parent's and its Subsidiaries'
operations during such period, which financial statements
shall, among other things, detail all adjustments to EBITDA,
(ii) a certificate signed by the chief financial
officer of Parent to the effect that:
A. the financial statements delivered
hereunder have been prepared in accordance with GAAP
(except as permitted in Section 5.19 and except for
the lack of footnotes and being subject to year-end
audit adjustments) and fairly present in all material
respects the financial condition of Parent and its
Subsidiaries,
B. the representations and warranties of the
Loan Parties contained in this Agreement and the
other Loan Documents are true and correct in all
material respects on and as of the date of such
certificate, as though made on and as of such date
(except to the extent that such representations and
warranties relate solely to an earlier date), and
C. there does not exist any condition or
event that constitutes a Default or Event of Default
(or, to the extent of any non-compliance, describing
such non-compliance as to which he or she may have
knowledge and what action Borrowers have taken, are
taking, or propose to take with respect thereto), and
(iii) for each month that is the date on which a
financial covenant in Section 7.20 is to be tested, a
Compliance Certificate demonstrating, in reasonable detail,
compliance at the end of such period with the applicable
financial covenants contained in Section 7.20,
(b) as soon as available, but in any event within 90 days
after the end of each of Parent's fiscal years,
(i) financial statements of Parent and its
Subsidiaries for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Agent
and certified, by such accountants to have been prepared in
accordance with GAAP (such audited financial statements to
include a balance sheet, income statement, and statement of
cash flow and, if prepared, such accountants' letter to
management),
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(ii) a certificate of such accountants addressed
to Agent and the Lenders stating that such accountants do not
have knowledge of the existence of any Default or Event of
Default under Section 7.20,
(c) as soon as available, but in any event within 30 days
prior to the start of each of Parent's fiscal years,
(i) copies of Borrowers' Projections, in form
and substance (including as to scope and underlying
assumptions) satisfactory to Agent, in its sole discretion,
for the forthcoming fiscal year, month by month, certified by
the chief financial officer of Parent as being such officer's
good faith best estimate of the financial performance of
Parent and its Subsidiaries during the period covered thereby,
it being acknowledged that for fiscal year ending June 30,
2003, the Closing Date Business Plan satisfies this subclause
(c)(i),
(d) promptly and in any event within four (4) days after the
end of each week included in the Budget, a comparison of actual cash
disbursements and collections for such week, categorized in accordance with the
categories contained in the Budget, versus expenses and collections included in
the Budget for such week,
(e) if and when filed by any Loan Party,
(i) 10-Q quarterly reports, Form 10-K annual
reports, and Form 8-K current reports,
(ii) any other filings made by any Loan Party
with the SEC,
(iii) copies of Loan Parties' federal income tax
returns, and any amendments thereto, filed with the Internal
Revenue Service, and
(iv) any other information that is provided by
Parent to its shareholders generally,
(f) if and when filed by any Loan Party and as requested by
Agent, satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which (i) any Loan Party conducts business or is required to
pay any such excise tax, (ii) where any Loan Party's failure to pay any such
applicable excise tax would result in a Lien on the properties or assets of any
Loan Party, or (iii) where any Loan Party's failure to pay any such applicable
excise tax reasonably could be expected to result in a Material Adverse Change,
(g) promptly after the commencement thereof, but in any event
within five days after the service of process with respect thereto on any Loan
Party, notice of all actions, suits or proceedings brought by or against any
Loan Party before any Governmental Authority which could reasonably be expected
to result in a Material Adverse Change,
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(h) as soon as a Loan Party has knowledge of any event or
condition that constitutes a Default or an Event of Default, notice thereof and
a statement of the curative action that Borrowers propose to take with respect
thereto, and
(i) upon the request of Agent, any other report reasonably
requested relating to the financial condition of Loan Parties.
In addition to the financial statements referred to above,
Loan Parties agree to deliver financial statements prepared on both a
consolidated and consolidating basis and that no Loan Party will have a fiscal
year different from that of Parent. Loan Parties agree that their independent
certified public accountants are authorized to communicate with Agent and to
release to Agent whatever financial information concerning Loan Parties that
Agent reasonably may request. Each Loan Party waives the right to assert a
confidential relationship, if any, it may have with any accounting firm or
service bureau in connection with any information requested by Agent pursuant to
or in accordance with this Agreement, and agree that Agent may contact directly
any such accounting firm or service bureau in order to obtain such information.
6.4 FINANCIAL REPRESENTATIVES. Loan Parties shall, upon the request of
Agent or any Lender from time to time, make available to Agent or such Lender,
Loan Parties' finance personnel (including The Parkland Group and other outside
advisors) and Loan Parties hereby authorize and direct such finance personnel to
respond to all requests of Agent and Lenders regarding the Loan Parties'
finances and financial information.
6.5 RETURN. Cause returns and allowances as between Loan Parties and
their Account Debtors, to be on the same basis and in accordance with the usual
customary practices of the applicable Loan Party, as they exist at the time of
the execution and delivery of this Agreement. If, at a time when no Event of
Default has occurred and is continuing, any Account Debtor returns any Inventory
to any Loan Party, the applicable Loan Party promptly shall determine the reason
for such return and, if the applicable Loan Party accepts such return, issue a
credit memorandum (with a copy to be sent to Agent) in the appropriate amount to
such Account Debtor. If, at a time when an Event of Default has occurred and is
continuing, any Account Debtor returns any Inventory to any Loan Party, the
applicable Loan Party promptly shall determine the reason for such return and,
if Agent consents (which consent shall not be unreasonably withheld), issue a
credit memorandum (with a copy to be sent to Agent) in the appropriate amount to
such Account Debtor.
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of Loan
Parties properties which are material to the conduct to their business in good
working order and condition, ordinary wear and tear excepted, and comply at all
times with the provisions of all leases to which it is a party as lessee, so as
to prevent any loss or forfeiture thereof or thereunder.
6.7 TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Loan
Parties or any of their assets to be paid in full, before delinquency or before
the expiration of any extension period, except to the extent that the validity
of such assessment or tax shall be the subject of a Permitted Protest or is
stayed by Section 362 of the Bankruptcy Code. Loan Parties will make timely
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payment or deposit of all tax payments and withholding taxes required of it by
applicable laws, including the Canadian Income Tax Act and, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, provincial,
and federal income taxes, and will, upon request, furnish Agent with proof
satisfactory to Agent indicating that the applicable Loan Party has made such
payments or deposits. Loan Parties shall deliver satisfactory evidence of
payment of applicable excise taxes in each jurisdictions in which any Loan Party
is required to pay any such excise tax.
6.8 INSURANCE.
(a) At Borrowers' expense, maintain insurance respecting the
Loan Parties, property and assets wherever located, covering loss or damage by
fire, theft, explosion, and all other hazards and risks as ordinarily are
insured against by other Persons engaged in the same or similar businesses. The
Loan Parties also shall maintain business interruption, public liability, and
product liability insurance, as well as insurance against larceny, embezzlement,
and criminal misappropriation. All such policies of insurance shall be in such
amounts and with such insurance companies as are reasonably satisfactory to
Agent. Borrowers shall deliver copies of all such policies to Agent with a
satisfactory lender's loss payable endorsement naming Agent as sole loss payee
or additional insured, as appropriate. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 30 days prior
written notice to Agent in the event of cancellation of the policy for any
reason whatsoever.
(b) Administrative Borrower shall give Agent prompt notice of
any loss covered by such insurance. Agent shall have the exclusive right to
adjust any losses payable under any such insurance policies in excess of
$50,000, without any liability to the Loan Parties whatsoever in respect of such
adjustments. Any monies received as payment for any loss under any insurance
policy mentioned above (other than liability insurance policies) or as payment
of any award or compensation for condemnation or taking by eminent domain, shall
be paid over to Agent to be applied at the option of the Required Lenders either
to the prepayment of the Obligations or shall be disbursed to Administrative
Borrower under staged payment terms reasonably satisfactory to the Required
Lenders for application to the cost of repairs, replacements, or restorations.
Any such repairs, replacements, or restorations shall be effected with
reasonable promptness and shall be of a value at least equal to the value of the
items or property destroyed prior to such damage or destruction.
(c) Loan Parties shall not take out separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained under this Section 6.8, unless Agent is included thereon as named
insured with the loss payable to Agent under a lender's loss payable endorsement
or its equivalent. Administrative Borrower immediately shall notify Agent
whenever such separate insurance is taken out, specifying the insurer thereunder
and full particulars as to the policies evidencing the same, and copies of such
policies promptly shall be provided to Agent.
(d) At Borrowers' expense, maintain key man life insurance
policies with respect to the following individuals and in the following amounts:
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Name Amount
Xxxxx Xxxxxxx $8,000,000
Borrowers shall furnish Agent with an "Absolute Assignment" of such key man life
insurance policy, shall record such "Absolute Assignment" with the issuer of the
respective policy, and shall furnish proof of such issuer's acceptance of such
assignment. All proceeds payable under such key man life insurance policies
shall be payable to Agent to be applied on account of the Obligations in
accordance with Section 2.4(b).
6.9 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment of Loan Parties and ADLT Realty only at the locations identified on
Schedule 5.5 or in transit between such locations; provided, however, that
Administrative Borrower may amend Schedule 5.5 so long as such amendment occurs
by written notice to Agent not less than 30 days prior to the date on which the
Inventory or Equipment is moved to such new location, so long as such new
location is within the continental United States and, with respect to Canadian
Guarantor, Canada, and with respect to UK Guarantor, the United Kingdom, and so
long as, at the time of such written notification, the applicable Loan Party
provides any financing statements or fixture filings necessary to perfect and
continue perfected the Agent's Liens on such assets and also provides to Agent a
Collateral Access Agreement.
6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not result in and reasonably could not
be expected to result in a Material Adverse Change.
6.11 LEASES. Pay when due all rents and other amounts payable under any
leases to which any Loan Party is a party or by which any Loan Party's
properties and assets are bound, unless such payments are the subject of a
Permitted Protest or cured within any applicable grace period under such lease.
6.12 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or
finders fees incurred in connection with or as a result of Loan Parties'
obtaining financing from the Lender Group under this Agreement. Borrowers agree
and acknowledge that payment of all such brokerage commissions or finders fees
shall be the sole responsibility of Borrowers, and each Borrower agrees to
indemnify, defend, and hold Agent and the Lender Group harmless from and against
any claim of any broker or finder arising out of Loan Parties' obtaining
financing from the Lender Group under this Agreement.
6.13 EXISTENCE. At all times preserve and keep in full force and effect
each Loan Party's valid existence and good standing and any rights and
franchises material to each such Loan Party's businesses except as consented to
by Lenders in their Permitted Discretion upon written notice.
6.14 ENVIRONMENTAL.
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(a) The Loan Parties and ADLT Realty shall keep any property
either owned or operated by any Loan Party free of any Environmental Liens or
post bonds or other financial assurances sufficient to satisfy the obligations
or liability evidenced by such Environmental Liens, (b) comply, in all material
respects, with Environmental Laws and provide to Agent documentation of such
compliance which Agent reasonably requests, (c) promptly notify Agent of any
release of a Hazardous Material of any reportable quantity from or onto property
owned or operated by any Loan Party or ADLT Realty and take any Remedial Actions
required to xxxxx said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly provide Agent with written notice
within 10 days of the receipt of any of the following: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of any Loan Party or ADLT Realty, (ii) commencement of any Environmental Action
or notice that an Environmental Action will be filed against any Loan Party or
ADLT Realty, and (iii) notice of a violation, citation, or other administrative
order which reasonably could be expected to result in a Material Adverse Change.
6.15 DISCLOSURE UPDATES. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, (a) notify Agent if any written
information, exhibit, or report furnished to the Lender Group contained any
untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof.
6.16 INTELLECTUAL PROPERTY. Each Loan Party shall, and shall cause each
of its Subsidiaries to, do and cause to be done all things necessary to preserve
and keep in full force and effect all registrations of patents, copyrights,
trademarks, service marks and other marks, trade names or other trade rights,
except where the failure to preserve would not cause a Material Adverse Change.
6.17 BUDGET; MINIMUM COLLATERAL; CERTIFICATIONS.
(a) Borrowers and DSI, in the aggregate, shall maintain
Collections of their Accounts and other cash receipts, on a cumulative basis
from February 1, 2003 to the end of each applicable week as measured at the end
of each week, in amounts no less than ninety percent (90%) of the cumulative
amount calculated from the "Weekly Cash Receipt Projection" included in the
Budget, except however, if the measured amounts for a given week period are less
than ninety percent (90%) but greater than eighty-five percent (85%) of such
amount, such entities, in the aggregate, shall not violate this Section 6.17(a)
if they maintain Collections of their accounts and other cash receipts as
measured at the end of the week two (2) weeks thereafter, taking into account
Collections and cash receipts from February 1, 2003 through such measurement
date two (2) weeks thereafter, in amounts no less than ninety percent (90%) of
the cumulative amount calculated from the "Weekly Cash Receipt Projection"
included in the Budget.
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(b) Borrowers and DSI, in the aggregate, shall maintain
Collections of their Accounts and other cash receipts, on a cumulative basis as
measured at the end of each week on a rolling 4 week basis in amounts no less
than eighty-five percent (85%) of the cumulative amount in the "Weekly Cash
Receipt Projection" included in the Budget for such rolling 4-week period,
except however, if the measured amounts in a given week are less than
eighty-five percent (85%) but greater than eighty percent (80%) of such
cumulative amount, such entities shall not violate this Section 6.17(b) if they
maintain Collections of their Accounts and other cash receipts as measured on a
rolling four (4) week basis at the end of the week occurring two (2) weeks
thereafter of no less than eighty percent (80%) of the cumulative amount
calculated from the "Weekly Cash Receipt Projection" included in the Budget.
(c) Borrowers shall maintain, and cause Parent, APL, DSI and
VL to maintain, for each of the ADLT Line of Business, the APL Line of Business,
the DSI Line of Business and the VL Line of Business, Collections of their
Accounts and other cash receipts, on a cumulative basis from February 1, 2003 to
the end of each applicable week as measured at the end of each week, in amounts
no less than ninety percent (90%) of the cumulative amount calculated from the
"Weekly Cash Receipt Projection" included in the Budget, except, however, if the
measured amounts for a given week are less than ninety percent (90%) but greater
than eighty-five percent (85%) of such cumulative amount, such entities shall
not violate this Section 6.17(c) if they maintain Collections of their Accounts
and other cash receipts as measured at the end of the week occurring two (2)
weeks thereafter, taking into account Collections and cash receipts from
February 1, 2003 through such measurement date two (2) weeks thereafter, in
amounts no less than ninety percent (90%) of the cumulative amount calculated
from the "Weekly Cash Receipt Projection" included in the Budget.
(d) Borrowers and DSI, in the aggregate, shall cause
cumulative disbursements on a rolling four (4) week basis, as measured at the
end of each week, to be in amounts no more than one hundred seven and one-half
percent (107.5%) of the cumulative amount calculated from the "Weekly
Disbursement Projection" included in the Budget.
(e) Borrowers shall maintain, and cause Parent, APL, DSI and
VL to maintain, for each of the ADLT Line of Business, the APL Line of Business,
the DSI Line of Business and the VL Line of Business, cumulative disbursements
on a rolling four (4) week basis (a) as measured at the end of each week, to be
in amounts no more than one hundred ten percent (110%) of the cumulative amount
calculated from the "Weekly Disbursement Projection" included in the Budget,
except however, if the measured amounts for a given week are greater than one
hundred and ten percent (110%) but less than one hundred and fifteen percent
(115%) of such disbursements, such entities shall not violate this Section
6.17(e) if they cause cumulative disbursements on a rolling four (4) week basis
as measured on a rolling four (4) basis at the end of the week occurring two (2)
weeks thereafter of no greater than one hundred ten percent (110%) of the
cumulative amount calculated from the "Weekly Disbursement Projection" included
in the Budget.
(f) Loan Parties, in the aggregate, shall maintain
"Intercompany Disbursements" (as reflected in the Budget) to Additional Foreign
Subsidiaries and Other
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Foreign Subsidiaries on a rolling four (4) week basis, as measured at the end of
each week, to be in amounts no more than one hundred ten percent (110%) of the
cumulative amount calculated as "Intercompany Disbursements" (as reflected in
the Budget) in the "Weekly Disbursement Projection" included in the Budget.
(g) Borrowers, in the aggregate, shall maintain total sales
and total sales net of all intercompany sales, respectively, on a cumulative
basis from February 1, 2003 to the end of each applicable week (a) as measured
at the end of each week, in amounts no less than ninety percent (90%) of the
cumulative amount calculated from the "Weekly Sales Projection" included in the
Budget, except however, if the measured amounts for a given week are less than
ninety percent (90%) but greater than eighty-five percent (85%) of such sales,
the Borrowers, in the aggregate, shall not violate this Section 6.17(g) if they
maintain total sales and total sales net of intercompany sales as measured at
the end of the week two (2) weeks thereafter, in amounts no less than ninety
percent (90%) of the cumulative amount calculated as of such measurement date
from the "Weekly Sales Projection" included in the Budget. All sales included in
the calculation of total sales for the purposes of this Section 6.17(f) shall be
bona fide sales made pursuant to arms' length transactions.
(h) Borrowers, in the aggregate, shall maintain i) total sales
and ii) total sales net of intercompany sales, respectively, measured at the end
of each week on a rolling four (4) week basis, in amounts no less than
eighty-five percent (85%) of the cumulative amount calculated from the "Weekly
Sales Projection" included in the Budget, except however, if the measured
amounts for a given week are less than eighty-five percent (85%) but greater
than eighty percent (80%) of such sales, the Borrowers, in the aggregate, shall
not violate this Section 6.17(h) if they maintain i) total sales and ii) total
sales net of intercompany sales, respectively, as measured at the end of the
week two (2) weeks thereafter, in amounts no less than eighty-five percent (85%)
of the cumulative amount calculated from the "Weekly Sales Projection" included
in the Budget. All sales included in the calculation of total sales for the
purposes of this Section 6.17(h) shall be bona fide sales made pursuant to arms'
length transactions.
(i) The Collateral granted to Agent and Lenders by Loan
Parties at all times prior to the Maturity Date and taking into account, without
limitation, any asset dispositions, market conditions, casualty losses, theft or
damage, shall not suffer a material diminution in value from the value on the
Petition Date.
(j) Borrowers and DSI shall deliver to Agent and Lenders on a
weekly basis, with the financial statements required under Section 6.3(a), a
certificate verifying in writing and with such detail as the Agent and Lenders
may request, compliance with the provisions of Section 6.17(a), (b), (c), (d),
(e), (f), (g) and (h). In the event that Borrowers and DSI have failed to comply
in all material respects with the provisions of Section 6.17(a), (b), (c), (d),
(e), (f), (g) and (h), Borrowers and DSI shall immediately notify Agent of such
failure in writing.
(k) Borrowers and DSI shall deliver to Agent and Lenders on a
monthly basis, no later than the 30th Day of each month for the prior month a
certificate verifying in writing
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and with such detail as the Agent and Lenders may request, compliance with the
provisions of Section 6.17(i). In the event that Borrowers and DSI have failed
to comply in all material respects with the provisions of Section 6.17(i),
Borrowers and DSI shall immediately notify Agent of such failure in writing. The
certificate delivered pursuant to this subsection shall include, without
limitation, a summary of all capital dispositions and Capital Expenditures made
by or on behalf of Borrowers during the applicable period.
6.18 CONSULTANT. Upon the earlier to occur of (a) an Event of Default,
(b) Excess Availability of less than $1,000,000 occurring once or more
frequently in any week for any two consecutive weeks, or (c) the request by
Administrative Borrower for Lenders to review and analyze any proposed plan of
reorganization or, disclosure statement for the Borrowers or business plan
prepared in connection with any post-chapter 11 financing of the Borrowers,
Borrowers acknowledge that Agent and Lenders may at their option, retain a
consultant, selected by Agent and Lenders, who shall have full and unfettered
access to all finance personnel (including The Parkland Group and other outside
advisors) of the Loan Parties and their Subsidiaries and financial information
concerning the Borrowers and their Subsidiaries, including, without limitation,
all books and records and other information regarding cash disbursements,
collections, accounts payable, accounts receivable, Inventory acquisition,
disposition and valuation, and vendor pricing. The consultant shall have access
to the Loan Parties' premises on a full time basis. The costs and expenses of
the consultant shall be borne by Loan Parties.
6.19 FOREIGN CASH. Borrowers shall cause (a) each of the UK Guarantors,
Canadian Guarantor, and Other Foreign Subsidiaries not to maintain, at any time,
more than One Million Five Hundred Thousand Dollars ($1,500,000) in cash in the
aggregate and (b) each of the Additional Foreign Subsidiaries not to maintain,
at any time, more than Four Hundred Thousand Dollars ($400,000) in cash in the
aggregate. On the Closing Date and on the first and fifteenth day of each month
thereafter, commencing July 15, 2003, Borrowers shall cause all cash held by UK
Guarantors, Canadian Guarantor and the Other Foreign Subsidiaries in excess of
One Million Five Hundred Thousand Dollars ($1,500,000) in the aggregate and all
cash held by the Additional Foreign Subsidiaries in excess of Four Hundred
Thousand Dollars ($400,000) in the aggregate to be transferred to Parent and
applied to the outstanding balance of the Obligations. Borrowers shall provide
to Agent and Lenders within five (5) days of request, but no less often than
monthly, information regarding cash balances of UK Guarantors, Canadian
Guarantor, and the Foreign Subsidiaries.
6.20 ERISA. Each Loan Party shall deliver to Agent and each of the
Lenders, at such Borrower's expense, the following information at the times
specified below:
(a) within thirty (30) days after the filing thereof with the
DOL, Internal Revenue Service or PBGC, copies of each annual report (form 5500
series), including Schedule B thereto, filed with respect to each Benefit Plan;
(b) within thirty (30) days after receipt by such Borrower,
any Subsidiary of such Loan Party or any ERISA Affiliate of each actuarial
report for any Benefit Plan or
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Multiemployer Plan and each annual report for any Multiemployer Plan, copies of
each such report;
(c) within ten (10) days after the occurrence thereof,
notification of any increase in the benefits of any existing Benefit Plan or the
establishment of any new Multiemployer Plan or Benefit Plan or the commencement
of contributions to any Multiemployer Plan or Benefit Plan to which such Loan
Party, any Subsidiary of such Loan Party or any ERISA Affiliate was not
previously contributing;
(d) within three (3) days upon the occurrence thereof, written
notice of any event or condition referred to in clauses (a) through (g) of
Section 8.26, whether or not such event or condition shall constitute an Event
of Default;
Each Loan Party shall establish, maintain and operate all Benefit Plans
to comply in all material respects with the provisions of ERISA, the Code, and
all other Requirements of Law, other than to the extent that such Loan Party (i)
is in good faith contesting by appropriate proceedings the validity or
application of any such provision, law, rule, regulation or interpretation and
(ii) has made an adequate reserve or other appropriate provision therefor as
required in order to be in conformity with GAAP.
6.21 ORGANIZATIONAL ID NUMBER; COMMERCIAL TORT CLAIMS. Immediately, (a)
but in any event within 5 Business Days, upon obtaining an organizational
identification number (to the extent that any Loan Party has not been issued
such number on or prior to the Closing Date), notify Agent in writing and (b)
but in any event within 10 days, upon obtaining any Commercial Tort Claim (the
gross recovery from which could reasonably be expected to exceed $100,000),
deliver to Agent all documents and financing statements reasonably required by
Agent to perfect is liens in such Commercial Tort Claim.
7. NEGATIVE COVENANTS.
Each Loan Party covenants and agrees that, so long as any
credit hereunder shall be available and until full and final payment of the
Obligations (other than contingent, unliquidated, indemnification Obligations)
and the termination of this Agreement, Loan Parties will not and will not permit
any of their respective Subsidiaries to do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other
Loan Documents, together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit;
(b) Indebtedness set forth on Schedule 5.20;
(c) Permitted Purchase Money Indebtedness;
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(d) refinancings, renewals, or extensions of Indebtedness
permitted under clauses (b) and (c) of this Section 7.1 (and continuance or
renewal of any Permitted Liens associated therewith) so long as: (i) the terms
and conditions of such refinancings, renewals, or extensions do not, in Agent's
reasonable judgment, materially impair the prospects of repayment of the
Obligations by Loan Parties or materially impair Loan Parties' creditworthiness,
(ii) such refinancings, renewals, or extensions do not result in an increase in
the principal amount of the Indebtedness so refinanced, renewed, or extended or
add one or more of the Loan Parties as liable with respect thereto if such
additional Borrowers were not liable with respect to the original Indebtedness,
(iii) such refinancings, renewals, or extensions do not result in a shortening
of the average weighted maturity of the Indebtedness so refinanced, renewed, or
extended, nor are they on terms or conditions, that, taken as a whole, are
materially more burdensome or restrictive to the applicable Loan Party, and (iv)
if the Indebtedness that is refinanced, renewed, or extended was subordinated in
right of payment to the Obligations, then the terms and conditions of the
refinancing, renewal, or extension Indebtedness must be include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness; and
(e) Indebtedness composing Permitted Investments.
(f) Indebtedness of DSI to Parent at any time in an amount not
to exceed $2,400,000.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced, renewed, or
extended under Section 7.1(d) and so long as the replacement Liens only encumber
those assets that secured the refinanced, renewed, or extended Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock.
(b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution).
(c) Convey, sell, lease, license, assign, transfer, or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its assets.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of the
assets of any Loan Party, unless such disposition (a) is approved by the
Required Lenders and (b) is for fair value and approved by the Bankruptcy Court;
and in the case of all dispositions permitted hereunder the aggregate
consideration therefor is paid in cash at the time of such disposition and is
thereupon delivered to Agent for application pursuant to Section 2.4(b).
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7.5 CHANGE NAME. Change any Loan Party's name, organizational
identification number, state of incorporation, FEIN, corporate structure or
identity, or add any new fictitious name; provided, however, that a Loan Party
may change its name upon at least 30 days prior written notice by Administrative
Borrower to Agent of such change and so long as, at the time of such written
notification, such Loan Party authorized any financing statements or fixture
filings necessary to perfect and continue perfected Agent's Liens.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable with
respect to the obligations of any third Person except by endorsement of
instruments or items of payment for deposit to the account of Loan Parties or
which are transmitted or turned over to Agent.
7.7 LINE OF BUSINESS. Engage in any Line of Business materially
different a Line of Business engaged in by the Loan Parties as of the Closing
Date.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by
Section 7.1(d), prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Loan Party, other than the Obligations in accordance with
this Agreement, and
(b) Except in connection with a refinancing permitted by
Section 7.1(d), directly or indirectly, amend, modify, alter, increase, or
change any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning Indebtedness permitted
under Sections 7.1(b) or (c).
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.10 CONSIGNMENTS. The Loan Parties shall not consign any Inventory in
excess of the aggregate Dollar Value of $2,500,000 at any time or sell any
Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale.
7.11 DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or other property, other than common Stock) on, or purchase,
acquire, redeem, or retire any of any Borrower's Stock or any Guarantor's Stock,
of any class, whether now or hereafter outstanding.
7.12 ACCOUNTING METHODS. Modify or change its method of accounting
(other than as may be required to conform to GAAP) or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter entered
into with any third party accounting firm or service bureau for the preparation
or storage of Loan Parties accounting records without said accounting firm or
service bureau agreeing to provide Agent information regarding the Collateral or
Loan Parties' financial condition.
7.13 INVESTMENTS. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment, or incur any liabilities (including
contingent obligations) for or in connection with any Investment; provided,
however, that Loan Parties shall not have
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Permitted Investments (other than in the Cash Management Accounts) in deposit
accounts or Securities Accounts in excess of $25,000 outstanding at any one time
unless such Loan Party and the applicable securities intermediary or bank have
entered into Control Agreements or similar arrangements governing such Permitted
Investments, as Agent shall determine in its Permitted Discretion, to perfect
(and further establish) the Agent's Liens in such Permitted Investments.
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of any Loan Party (including,
without limitation, any transaction giving rise to an intercompany account
payable) except as set forth on Schedule 7.14 and for transactions that are in
the ordinary course of any Loan Party's business, upon fair and reasonable
terms, that are fully disclosed to Agent, and that are no less favorable to Loan
Party than would be obtained in an arm's length transaction with a
non-Affiliate, or make any cash payments to holders of the Stock of Parent or
any Subsidiary or Affiliate, other than for products sold in the ordinary course
of business. Notwithstanding anything to the contrary set forth herein, in no
event shall any Loan Party make any payments to any Affiliate in respect of any
prepetition Indebtedness unless authorized by the Bankruptcy Court and in the
Budget or consented to by Lenders.
7.15 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16 COMPENSATION. Increase the annual fee or per-meeting fees paid to
the members of its Board of Directors during any year by more than 15% over the
prior year; pay or accrue total cash compensation, during any year, to its
officers and senior management employees in an aggregate amount in excess of
115% of that paid or accrued in the prior year.
7.17 USE OF PROCEEDS. Use the proceeds of the Advances and the Term
Loans for any purpose other than (a) on the Closing Date, (i) to repay in full
the outstanding principal, accrued interest, and accrued fees and expenses owing
to Prior Lenders under the Prior DIP Facility and Indebtedness owing to Prior
Lenders by Canadian Guarantor and UK Guarantors, (ii) to make the Canadian
Intercompany Loan and the UK Intercompany Loan, in each case solely for purposes
of repaying in full obligations of the Canadian Guarantor or UK Guarantors, as
applicable, owing to the Prior Lenders, and (iii) to pay transactional fees,
costs, and expenses incurred in connection with this Agreement, the other Loan
Documents, and the transactions contemplated hereby and thereby, and (b)
thereafter, consistent with the terms and conditions hereof, for its lawful and
permitted purposes and to pay Permitted Expenses in all cases subject to the
approval of the Bankruptcy Court and only as set forth in the Budget and the
Closing Date Business Plan. No proceeds from any Advances or the Term Loans
shall be paid or used, and Permitted Expenses shall not include, fees and
disbursements incurred by professionals, including, without limitation, any
professionals retained by Borrowers, or any Subsidiaries, for the purpose of
contesting in any proceeding or any other action, (a) the validity, binding
effect or enforceability of any of the Loan Documents or the amount of the loans
or the other Obligations outstanding hereunder or (b) any other rights or
interests of Agent or any Lender under the Loan Documents. Nothing herein shall
in any way prejudice or prevent Agent or any Lender from objecting, for any
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reason, to any requests or applications made by any party for compensation or
reimbursement of expenses pursuant to Section 330 or 331 of the Bankruptcy Code
for which Borrowers may seek to use proceeds of Advances the Term Loans or
Collections as a Permitted Expense.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new location
without Administrative Borrower providing 30 days prior written notification
thereof to Agent and so long as, at the time of such written notification, the
applicable Loan Party authorizes any financing statements or fixture filings
necessary to perfect and continue perfected the Agent's Liens and also provides
to Agent a Collateral Access Agreement with respect to such new location. Except
as set forth on Schedule E-1 and Schedule E-2, the Inventory and Equipment of a
Loan Party shall not at any time now or hereafter be stored with a bailee,
warehouseman, or similar party without Agent's prior written consent.
7.19 SECURITIES ACCOUNTS. Establish or maintain any Securities Account
by any Loan Party unless Agent shall have received a Control Agreement in
respect of such Securities Account. Loan Parties agree to not transfer assets
out of any Securities Account; provided, however, that, so long as no Event of
Default has occurred and is continuing or would result therefrom, Borrowers may
use such assets (and the proceeds thereof) to the extent not prohibited by this
Agreement.
7.20 FINANCIAL COVENANTS.
(a) Fail to maintain:
(i) MINIMUM ADJUSTED EBITDA. Adjusted EBITDA,
measured on a monthly basis, of not less than the required
amount set forth in the following table for the applicable
period set forth opposite thereto;
------------------------------------------------------------------------------
Applicable Amount Applicable Period
------------------------------------------------------------------------------
$1,200,000 One month ending May 31, 2003
------------------------------------------------------------------------------
$2,500,000 Two months ending June 30, 2003
------------------------------------------------------------------------------
$4,000,000 Three months ending July 31, 2003
------------------------------------------------------------------------------
$5,400,000 Four months ending August 31, 2003
------------------------------------------------------------------------------
$6,900,000 Five months ending September 30, 2003
------------------------------------------------------------------------------
$9,100,000 Six months ending October 31, 2003
------------------------------------------------------------------------------
(ii) DEBT RATIO. As of the last day of each
calendar month, a ratio of (A) outstanding principal
Obligations to (B) Adjusted EBITDA, determined on a trailing
twelve-month basis, at all times of not more than 2.75 to 1.
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(b) CAPITAL EXPENDITURES. Make Capital Expenditures for any
two consecutive month period in an amount in excess of $1,000,000.
7.21 FINAL FINANCING ORDER; ADMINISTRATIVE EXPENSE PRIORITY; LIEN
PRIORITY; PAYMENTS.
(a) Seek, consent to or suffer to exist at any time any
modification, stay, vacation, extension or amendment of the Final Financing
Order except for modifications and amendments joined in or agreed to in writing
by Agent and Lenders (and each Borrower irrevocably waives its rights to do any
of the foregoing unless agreed to in writing by Agent and the Lenders).
(b) Suffer to exist at any time a priority for any
administrative expense or unsecured claim against Borrowers (now existing or
hereafter arising of any kind or nature whatsoever, including, without
limitation, any administrative expenses of the kind specified in Sections 503(b)
and 507(b) of the Bankruptcy Code) equal or superior to the priority of the
Agent and Lenders in respect of the Obligations, except for the fees and
expenses subject to the Professional Fee Carve-Out having a priority over the
Obligations to the extent set forth in the Final Financing Order.
(c) Prior to the date on which the Obligations have been paid
in full in cash, and this Agreement has been terminated, pay any administrative
expenses, except administrative expenses incurred in the ordinary course of the
business of each Borrower and, prior to the occurrence of an Event of Default,
compensation and reimbursement of expenses to professionals allowed and payable
under Sections 330 and 331 of the Bankruptcy Code, in each case subject to the
extent and having the order of priority set forth in the Final Financing Order.
(d) Notwithstanding the foregoing, Borrowers shall be
permitted to pay as the same may become due and payable (i) administrative
expenses of the kind specified in Section 503(b) of the Bankruptcy Code incurred
in the ordinary course of business and (ii) compensation and reimbursement of
expenses to professionals allowed and payable under Sections 330 and 331 of the
Bankruptcy Code upon the occurrence and during the continuance of an Event of
Default, to the extent such fees and expenses do not exceed the Professional Fee
Carve-Out.
7.22 GROSS PROFITS. Permit the gross profit margin for the Parent and
its Subsidiaries on a consolidated basis and determined in accordance with GAAP
to decline below 30% for the 3 month period most recently ended for which
Borrowers have delivered to Agent the financial statements required pursuant to
Section 6.3(a). If such decline occurs, Agent may establish additional reserves
in an amount sufficient to reduce the advance rate against Eligible Inventory by
one (1) percentage point for each percentage point by which the gross profit
margin is less than 30%.
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8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 If Borrowers fail to pay when due and payable or when declared due
and payable, all or any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due the Lender
Group, reimbursement of Lender Group Expenses, or other amounts constituting
Obligations);
8.2 (i) If any Loan Party fails to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in Sections 5.28, 6.1,
6.5, and 6.14 of this Agreement, or comparable provisions of the other Loan
Documents, and such failure continues for 10 Business Days, (ii) if any Loan
Party fails to perform, keep, or observe any term, provision, condition,
covenant or agreement contained in Sections 6.2 (except for weekly reporting,
which continues for 2 calendar days), 6.3 and 6.9 of this Agreement, or
comparable provisions of the other Loan Documents, and such failure continues
for 5 Business Days, (iii) if any Loan Party fails to perform, keep, or observe
any term, provision, condition, covenant, or agreement contained in Section 7.2
except to the extent such failure is expressly permitted under Section 8.18, or
(iv) if any Loan Party otherwise fails to perform, keep, or observe any other
term, provision, condition, covenant, or agreement contained in this Agreement
or in any of the other Loan Documents;
8.3 If any material portion of any Loan Party's, or any of its
Subsidiaries assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;
8.4 If any condition or event shall occur which permits Agent and
Lenders to exercise any of the remedies set forth in the Final Financing Order;
8.5 If an order with respect to any Chapter 11 Case shall be entered by
any Bankruptcy Judge or District Court Judge which (i) revokes, remands,
vacates, reverses, stays, rescinds, modifies or amends the Final Financing
Order, or (ii) permits any administrative expense or any claim (now existing or
hereafter arising, of any kind or nature whatsoever) to have administrative
priority as to any Borrower equal or superior to the priority of Agent and
Lenders in respect of the Obligations, except for fees and expenses subject to
the Professional Fee Carve-Out and Permitted Liens having a priority over the
Obligations to the extent set forth in the Final Financing Order;
8.6 If the Final Financing Order terminates or expires, without any
extension or renewal thereof.
8.7 If a Liquidation Proceeding is commenced against any Loan Party and
any of the following events occur: (a) Loan Party consents to the institution of
the Liquidation Proceeding against it; (b) the motion seeking to commence the
Liquidation Proceeding is not timely controverted; (c) the motion seeking to
commence the Liquidation Proceeding is not
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dismissed within thirty (30) calendar days of the date of the filing thereof;
provided, however, that, during the pendency of such period, Agent and Lenders
shall be relieved of their obligations to extend credit hereunder; (d) an
interim trustee is appointed to take possession of all or a substantial portion
of the properties or assets of, or to operate all or any substantial portion of
the business of, any Loan Party; or (e) an order granting relief shall have been
issued or entered in respect thereof;
8.8 If any of the Chapter 11 Cases is converted to a case under Chapter
7 of the Bankruptcy Code;
8.9 If any of the Chapter 11 Cases or any successor case of Borrowers
under Chapter 7 of the Bankruptcy Code is dismissed, whether voluntarily or
involuntarily;
8.10 If any Borrower fails to perform or observe any of the material
terms or conditions of any material order or stipulation approved by the
Bankruptcy Court entered by or with the Bankruptcy Court in the Chapter 11
Cases;
8.11 If the automatic stay under Section 362 of the Bankruptcy Code is
vacated in respect of any Indebtedness in the aggregate in excess of $500,000 or
Lien in respect of or pursuant to any material pre-petition agreements to which
any Borrower is a party, or any Lien securing same, or any document, instrument
or agreement related to any of the foregoing;
8.12 If a Trustee, an examiner or other disinterested Person with
expanded powers pursuant to Section 1104(c) of the Bankruptcy Code is appointed
in the Chapter 11 Cases;
8.13 If any Borrower files a plan of reorganization in the Chapter 11
Cases which does not provide for the payment and satisfaction in full in cash of
all Obligations of Borrowers to Agent and Lenders on the effective date of such
plan;
8.14 If an application for any of the orders described in Section 8.5,
8.6, 8.7, 8.8, or 8.9, herein shall be made by any Borrower or any other Person
and such application (if made by any Person other than such Borrower) is not
contested by such Borrower in good faith or the relief requested is granted in
an order that is not stayed pending appeal;
8.15 If an Insolvency Proceeding is commenced by any Guarantor or any
Subsidiary of a Borrower not subject to an Insolvency Proceeding as of the
Closing Date;
8.16 If an Insolvency Proceeding is commenced against any Guarantor or
any Subsidiary of a Borrower not subject to an Insolvency Proceeding as of the
Closing Date, and any of the following events occur: (a) the applicable
Guarantor or the Subsidiary consents to the institution of the Insolvency
Proceeding against it, (b) the petition commencing the Insolvency Proceeding is
not timely controverted, (c) the petition commencing the Insolvency Proceeding
is not dismissed within 45 calendar days of the date of the filing thereof;
provided, however, that, during the pendency of such period, Agent (including
any successor agent) and each other member of the Lender Group shall be relieved
of their obligation to extend credit hereunder, (d) an interim trustee is
appointed to take possession of
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all or any substantial portion of the properties or assets of, or to operate all
or any substantial portion of the business of, any Guarantor or any Subsidiary
of a Borrower not subject to an Insolvency Proceeding as of the Closing Date, or
(e) an order for relief shall have been entered therein;
8.17 If any Loan Party or any of its Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;
8.18 If a notice of Lien, levy, or assessment is filed of record with
respect to any Loan Party's or any of its Subsidiaries' assets by the United
States, Canada or any department, agency, or instrumentality thereof, or by any
state, provincial, county, municipal, or governmental agency, or if any taxes or
debts owing at any time hereafter to any one or more of such entities becomes a
Lien, whether xxxxxx or otherwise, upon any Loan Party's or any such
Subsidiary's assets to secure an aggregate amount in excess of $25,000 and the
same is not paid on the payment date thereof;
8.19 If a judgment or other claim becomes a Lien or encumbrance upon
any material portion of any Loan Party's or any of its Subsidiaries' properties
or assets;
8.20 If there is a default in any material agreement to which any Loan
Party or any of its Subsidiaries is a party and such default (a) (i) occurs at
the final maturity of the obligations thereunder, or (ii) results in a right by
the other party thereto, irrespective of whether exercised, to accelerate the
maturity of the applicable Loan Party's or its Subsidiaries' obligations
thereunder, to terminate such agreement, or to refuse to renew such agreement
pursuant to an automatic renewal right therein and (b) the enforcement of such
agreement is not stayed by the commencement of the Chapter 11 Cases;
8.21 If any Loan Party or any of its Subsidiaries makes any payment on
account of Indebtedness that has been contractually subordinated in right of
payment to the payment of the Obligations, except to the extent such payment is
permitted by the terms of the subordination provisions applicable to such
Indebtedness or otherwise expressly permitted by this Agreement;
8.22 If any misrepresentation or material misstatement exists now or
hereafter in any warranty, representation, statement, or Record made to the
Lender Group by any Loan Party, its Subsidiaries, or any officer, employee,
agent, or director of any Loan Party or any of its Subsidiaries;
8.23 If the obligation of any Guarantor under its Guaranty is limited
or terminated by operation of law or by such Guarantor thereunder;
8.24 If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby;
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8.25 Any provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Borrower, or a proceeding shall be commenced
by any Loan Party, or by any Governmental Authority having jurisdiction over any
Loan Party, seeking to establish the invalidity or unenforceability thereof, or
any Loan Party shall deny that any Loan Party has any liability or obligation
purported to be created under any Loan Document; or
8.26 If (a) any ERISA Termination Event shall occur with respect to any
Benefit Plan of any Loan Party or any Subsidiary of a Loan Party or any ERISA
Affiliate, (b) any Accumulated Funding Deficiency, whether or not waived, shall
exist with respect to any such Benefit Plan, (c) any Person shall engage in any
Prohibited Transaction involving any such Benefit Plan, (d) any Loan Party or
any Subsidiary of a Loan Party or any ERISA Affiliate shall be in "default" (as
defined in ERISA Section 4219(c)(5)) with respect to payments owing to any such
Benefit Plan that is a Multiemployer Plan as a result of such Person's complete
or partial withdrawal (as described in ERISA Section 4203 or 4205) therefrom,
(e) any Loan Party or any Subsidiary of a Loan Party or any ERISA Affiliate
shall fail to pay when due an amount that is payable by it to the PBGC or to any
such Benefit Plan under Title N of ERISA, (f) a proceeding shall be instituted
by a fiduciary of any such Benefit Plan against any Borrower, any Subsidiary of
any Borrower or any ERISA Affiliate to enforce ERISA Section 515 and such
proceeding shall not have been dismissed within 30 days thereafter or (g) any
other event or condition shall occur or exist with respect to any such Benefit
Plan, except that no event or condition referred to in clauses (a) through (g)
shall constitute an Event of Default if it, together with all other such events
or conditions at the time existing, has not subjected, and in the reasonable
determination of the Required Lenders will not subject, any Borrower or any
Subsidiary thereof, or any Loan Party or any Subsidiary of a Loan Party to any
liability.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), all of which are authorized by Loan
Parties:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
(b) Cease advancing money or extending credit to or for the
benefit of Borrowers under this Agreement, under any of the Loan Documents, or
under any other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent's Liens in the Collateral and without
affecting the Obligations;
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(d) Settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which Agent considers advisable, and in such
cases, Agent will credit the Loan Account with only the net amounts received by
Agent in payment of such disputed Accounts after deducting all Lender Group
Expenses incurred or expended in connection therewith;
(e) Cause Loan Parties to hold all returned Inventory in trust
for the Lender Group, segregate all returned Inventory from all other assets of
Loan Parties or in Loan Parties' possession and conspicuously label said
returned Inventory as the property of the Lender Group;
(f) Without notice to or demand upon any Loan Party, make such
payments and do such acts as Agent considers necessary or reasonable to protect
its security interests in the Collateral. Each Loan Party agrees to assemble the
Personal Property Collateral if Agent so requires, and to make the Personal
Property Collateral available to Agent at a place that Agent may designate which
is reasonably convenient to both parties. Each Loan Party authorizes Agent to
enter the premises where the Personal Property Collateral is located, to take
and maintain possession of the Personal Property Collateral, or any part of it,
and to pay, purchase, contest, or compromise any Lien that in Agent's
determination appears to conflict with the Agent's Liens and to pay all expenses
incurred in connection therewith and to charge Loan Parties' Loan Account
therefor. With respect to any of Loan Parties' owned or leased premises, each
Loan Party hereby grants Agent a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of the
Lender Group's rights or remedies provided herein, at law, in equity, or
otherwise;
(g) Without notice to any Loan Party (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of any Loan Party
held by the Lender Group (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or the
account of any Loan Party held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and
deposits of any Loan Party held by the Lender Group, and any amounts received in
the Cash Management Accounts, to secure the full and final repayment of all of
the Obligations;
(i) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Personal Property Collateral. Agent is hereby granted a license or
other right to use, without charge, for the benefit of the Lender Group, such
Loan Party's labels, patents, copyrights, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Personal Property Collateral, in completing
production of, advertising for sale, and selling any Personal Property
Collateral and such Loan Party's rights under all licenses and all franchise
agreements shall inure to the Lender Group's benefit;
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(j) Sell the Personal Property Collateral at either a public
or private sale, or both, by way of one or more contracts or transactions, for
cash or on terms, in such manner and at such places (including any Loan Party's
premises) as Agent determines is commercially reasonable. It is not necessary
that the Personal Property Collateral be present at any such sale;
(k) Agent shall give notice of the disposition of the Personal
Property Collateral as follows:
(i) Agent shall give Administrative Borrower
(for the benefit of the applicable Loan Party) a notice in
writing of the time and place of public sale, or, if the sale
is a private sale or some other disposition other than a
public sale is to be made of the Personal Property Collateral,
the time on or after which the private sale or other
disposition is to be made; and
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Administrative Borrower as
provided in Section 12, at least 10 days before the earliest
time of disposition set forth in the notice; no notice needs
to be given prior to the disposition of any portion of the
Personal Property Collateral that is perishable or threatens
to decline speedily in value or that is of a type customarily
sold on a recognized market;
(l) Agent, with the consent of Lenders, may credit bid and
purchase at any public sale;
(m) Agent may seek the appointment of a receiver or keeper to
take possession of all or any portion of the Collateral or to operate same and,
to the maximum extent permitted by law, may seek the appointment of such a
receiver without the requirement of prior notice or a hearing;
(n) The Lender Group shall have all other rights and remedies
available to it at law or in equity pursuant to any other Loan Documents; and
(o) Any deficiency that exists after disposition of the
Personal Property Collateral as provided above will be paid immediately by Loan
Parties. Any excess will be returned, without interest and subject to the rights
of third Persons, by Agent to Administrative Borrower (for the benefit of the
applicable Loan Party).
9.2 AUTOMATIC STAY. After five (5) Business Days' written notice by
Agent to Administrative Borrower, the United States Trustee and the Committee,
the automatic stay provided by Section 362 of the Bankruptcy Code shall be
deemed automatically vacated without further order of the Bankruptcy Court and
Agent and Lenders shall be immediately permitted to, inter alia, pursue any and
all of their remedies against Borrowers and the Collateral and Guarantors and
seek payment in respect of all Obligations. Upon the occurrence and during the
continuation of an Event of Default, Agent, at the direction of the Required
Lenders, shall exercise all rights and remedies provided to Agent in the Final
Financing Order.
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9.3 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Loan Party fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to any Loan Party, may do any or all of the following:
(a) make payment of the same or any part thereof, (b) set up such reserves in
Borrowers' Loan Account as Agent deems necessary to protect the Lender Group
from the exposure created by such failure, or (c) in the case of the failure to
comply with Section 6.8 hereof, obtain and maintain insurance policies of the
type described in Section 6.8 and take any action with respect to such policies
as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Each Loan Party waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of documents, instruments, chattel paper, and guarantees at any time
held by the Lender Group on which each such Loan Party may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Each Loan Party
hereby agrees that: (a) so long as the Lender Group complies with its
obligations, if any, under the Code, Agent shall not in any way or manner be
liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Collateral shall be borne by Loan
Parties.
11.3 INDEMNIFICATION. Each Loan Party shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons with respect to each
Lender, each Participant, and each of their respective officers, directors,
employees, agents, and attorneys-in-fact (each, an "Indemnified Person")
harmless (to the fullest extent permitted by law) from
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and against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees and disbursements
and other costs and expenses actually incurred in connection therewith (as and
when they are incurred and irrespective of whether suit is brought), at any time
asserted against, imposed upon, or incurred by any of them (a) in connection
with or as a result of or related to the execution, delivery, enforcement,
performance, or administration of this Agreement, any of the other Loan
Documents, or the transactions contemplated hereby or thereby, and (b) with
respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event, or circumstance in any manner related
thereto (all the foregoing, collectively, the "Indemnified Liabilities"). The
foregoing to the contrary notwithstanding, Loan Parties shall have no obligation
to any Indemnified Person under this Section 11.3 with respect to any
Indemnified Liability that a court of competent jurisdiction finally determines
to have resulted from the gross negligence or willful misconduct of such
Indemnified Person. This provision shall survive the termination of this
Agreement and the repayment of the Obligations. If any Indemnified Person makes
any payment to any other Indemnified Person with respect to an Indemnified
Liability as to which Loan Parties were required to indemnify the Indemnified
Person receiving such payment, the Indemnified Person making such payment is
entitled to be indemnified and reimbursed by Loan Parties with respect thereto.
WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED
PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART CAUSED
BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR
OF ANY OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrowers or Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as the Administrative Borrower or Agent, as applicable,
may designate to each other in accordance herewith), or telefacsimile to
Borrowers in care of Administrative Borrower or to Agent, as the case may be, at
its address set forth below:
If to Administrative
Borrower: ADVANCED LIGHTING TECHNOLOGIES, INC.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attn: Treasurer
Fax No. 000.000.0000
with copies to: COWDEN, HUMPHREY, NAGORNEY & XXXXXX
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Suite 0000 Xxxxxxxx Xxxxx, 00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-00000
Attn: Xxxxx X. Xxxx, Esq.
Fax No. 000.000.0000
And JENNER & BLOCK
Xxx XXX Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxxxx, Esq.
Fax No. 312.923-2932
If to Agent: XXXXX FARGO FOOTHILL, INC.
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx
Attn: Business Finance Division Manager
Fax No. 000.000.0000
with copies to: OTTERBOURG, STEINDLER, HOUSTON & XXXXX, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax No. 000.000.0000
If to Ableco: ABLECO FINANCE LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Fax No. 000.000.0000
with copies to: XXXXXXX XXXX & XXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxx, Esq.
Fax No. 000.000.0000
Agent and Borrowers may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing manner given
to the other party. All notices or demands sent in accordance with this Section
12, other than notices by Agent in connection with enforcement rights against
the Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or
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personally delivered, or, where permitted by law, transmitted by telefacsimile
or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF NEW YORK, STATE OF NEW YORK (EXCEPT AS PROVIDED UNDER THE BANKRUPTCY CODE),
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. BORROWERS AND THE LENDER GROUP WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).
BORROWERS AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND THE LENDER GROUP REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
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(a) Any Lender may, with the written consent of Agent
(provided that no written consent of Agent shall be required in connection with
any assignment and delegation by a Lender to an Eligible Transferee), assign and
delegate to one or more assignees (each an "Assignee") all, or any part of all,
of the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$5,000,000 (except such minimum amount shall not apply to an Affiliate of a
Lender or a Related Fund); provided, however, that Borrowers and Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Administrative Borrower and Agent by
such Lender and the Assignee, (ii) such Lender and its Assignee have delivered
to Administrative Borrower and Agent an Assignment and Acceptance in form and
substance satisfactory to Agent, and (iii) the assignor Lender or Assignee has
paid to Agent for Agent's separate account a processing fee in the amount of
$5,000. Anything contained herein to the contrary notwithstanding, the consent
of Agent shall not be required (and payment of any fees shall not be required)
if (x) such assignment is in connection with any merger, consolidation, sale,
transfer, or other disposition of all or any substantial portion of the business
or loan portfolio of such Lender or (y) the assignee is an Affiliate of Lender
or a Related Fund.
(b) From and after the date that Agent notifies the assignor
Lender (with a copy to Administrative Borrower) that it has received an executed
Assignment and Acceptance and payment (if applicable) of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall affect
a novation between Borrowers and the Assignee.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance or observance by Borrowers of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (3) such Assignee confirms that it has received a copy
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of this Agreement, together with such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance, (4) such Assignee will, independently and
without reliance upon Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement, (5) such Assignee appoints and authorizes Agent to take
such actions and to exercise such powers under this Agreement as are delegated
to Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance and receipt and acknowledgment by
Agent of such fully executed Assignment and Acceptance, this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time, sell to one or more commercial
banks, financial institutions, or other Persons not Affiliates of such Lender (a
"Participant") participating interests in its Obligations owing to such Lender,
the Commitment of such Lender, and the other rights and interests of that Lender
(the "Originating Lender") hereunder and under the other Loan Documents;
provided, however, that (i) the Originating Lender shall remain a "Lender" for
all purposes of this Agreement and the other Loan Documents and the Participant
receiving the participating interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder shall not
constitute a "Lender" hereunder or under the other Loan Documents and the
Originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to
deal solely and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under this Agreement and the other
Loan Documents, (iv) no Originating Lender shall transfer or grant any
participating interest under which the Participant has the right to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (A)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (B) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (C) release
all or a material portion of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant; (E) change the amount or due dates of scheduled principal
repayments or prepayments or premiums in respect of the Obligations hereunder in
which such Participant is participating, or (F) subordinate the Liens of Agent
for the benefit of the Lender Group to the Liens of any other creditor of any
Loan Party; and (v) all amounts payable by Borrowers hereunder shall be
determined as if such Lender had
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not sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Agent, Borrowers, the
Collections, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves. The provisions of this Section
14.1(e) are solely for the benefit of the Lender Group, and none of the
Borrowers shall have any rights as a third party beneficiary of any such
provisions.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose to a third party all
documents and information which it now or hereafter may have relating to
Borrowers or Borrowers' business.
(g) Any other provision in this Agreement notwithstanding, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank
or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
(h) Administrative Borrower shall maintain, or cause to be
maintained, a register (the "Register") on which it enters the name of a Lender
as the registered owner of each Term Loan and each Advance, as the case may be,
held by such Lender. A Registered Loan (and the Registered Note, if any,
evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (and each Registered
Note shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the Registered Note, if any, evidencing the same) may be
effected only by registration of such assignment or sale on the Register (other
than with respect to an assignment or delegation covered by Section 14.1(a)(y)),
together with the surrender of the Registered Note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such Registered Note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new Registered Notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the registration of assignment or sale of
any Registered Loan (and the Registered Note, if any evidencing the same),
Borrowers shall treat the Person in whose name such Loan (and the Registered
Note, if any, evidencing the same) is registered as the owner thereof for the
purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary. In the case of an assignment or
delegation covered by Section 14.1(a)(y), the assigning Lender shall maintain a
comparable Register, on behalf of Administrative Borrower.
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(i) In the event that a Lender sells participations in the
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the "Participant
Register"). A Registered Loan (and the Registered Note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each Registered Note shall
expressly so provide). Any participation of such Registered Loan (and the
Registered Note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit
of the respective successors and assigns of each of the parties hereto,
including, without limitation, any Trustee or other fiduciary hereafter
appointed as a legal representative of Borrowers or with respect of property of
the respective estates of Borrower, whether under Chapter 11 of the Bankruptcy
Code or any successor case filed under Chapter 7 of the Bankruptcy Code, and
shall also be binding upon all creditors of Borrowers and other parties in
interest in the Chapter 11 Cases; provided, however, that Borrowers may not
assign this Agreement or any rights or duties hereunder without the Lenders'
prior written consent and any prohibited assignment shall be absolutely void ab
initio. No consent to assignment by the Lenders shall release any Borrower from
its Obligations. A Lender may assign this Agreement and the other Loan Documents
and its rights and duties hereunder and thereunder pursuant to Section 14.1
hereof and, except as expressly required pursuant to Section 14.1 hereof, no
consent or approval by any Borrower is required in connection with any such
assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by Borrowers therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by Agent at the
written request of the Required Lenders) and Administrative Borrower (on behalf
of all Borrowers) and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all of the Lenders affected thereby and Administrative Borrower (on
behalf of all Borrowers), do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees, or other
amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any
loan or other extension of credit hereunder, or reduce any fees or other amounts
payable hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is required
to take any action hereunder,
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(e) amend, modify or waive this Section or any provision of
the Agreement providing for consent or other action by all Lenders,
(f) release Collateral other than as permitted by Section
16.12,
(g) change the definition of "Required Lenders" or "Pro Rata
Share",
(h) contractually subordinate any of the Agent's Liens,
(i) release any Borrower or Guarantor from any obligation for
the payment of money, or
(j) change the definitions of Borrowing Base, Dilution,
Dilution Reserve, Eligible Accounts, Eligible Inventory, Maximum Revolver
Amount, or Net Liquidation Percentage, in a manner that would result in an
increase in the Borrowing Base (or in any definition contained in this Agreement
used in connection with the definition of the foregoing terms that would result
in an increase in the Borrowing Base), or the definitions of Term Loan A Amount
or Term Loan B Amount in a manner that would result in an increase in the Term
Loan A Amount or the Term Loan B Amount (or in any definition contained in this
Agreement used in connection with the definition of the foregoing terms that
would result in an increase in the Term Loan A Amount or the Term Loan B
Amount), or
(k) amend, modify or waive any of the provisions of Section 16
or Section 2.1(a), Section 2.1(b), Section 2.1(c), Section 2.2, Section 2.3(e),
Section 2.3(i), or Section 2.4(b) (or change any definition of a term used in
any such Section in a manner adverse to any Lender);
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, affect
the rights or duties of Agent, Issuing Lender, or Swing Lender, as applicable,
under this Agreement or any other Loan Document. The foregoing notwithstanding,
any amendment, modification, waiver, consent, termination, or release of, or
with respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers.
15.2 REPLACEMENT OF HOLDOUT LENDER. If any action to be taken by
the Lender Group or Agent hereunder requires the unanimous consent,
authorization, or agreement of all Lenders, and a Lender ("Holdout Lender")
fails to give its consent, authorization, or agreement, then Agent, upon at
least 5 Business Days prior irrevocable notice to the Holdout Lender, may
permanently replace the Holdout Lender with one or more substitute Lenders
(each, a "Replacement Lender"), and the Holdout Lender shall have not right to
refuse to be replaced hereunder. Such notice to replace the Holdout Lender shall
specify an effective date for such replacement, which date shall not be later
than 15 Business Days after the date such notice is given.
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Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance Agreement, subject only to the Holdout Lender being repaid its share
of the outstanding Obligations (including an assumption of its Pro Rata Share of
the Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance Agreement prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance Agreement. The replacement of any Holdout Lender
shall be made in accordance with the terms of Section 14.1. Until such time as
the Replacement Lenders shall have acquired all of the Obligations, the
Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make the Holdout Lender's Pro Rata Share of Advances and to
purchase a participation in each Letter of Credit, in an amount equal to its Pro
Rata Share of the Risk Participation Liability of such Letter of Credit.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement or, any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or
diminish Agent's and each Lender's rights thereafter to require strict
performance by Borrowers of any provision of this Agreement. Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints Foothill as its representative under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Section 16.
The provisions of this Section 16 are solely for the benefit of Agent, and the
Lenders, and Borrowers shall have no rights as a third party beneficiary of any
of the provisions contained herein. Any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "Agent" is for convenience only, that Foothill
is merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole
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discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents. Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect: (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections as
provided in the Loan Documents, (e) open and maintain such bank accounts and
cash management accounts as Agent deems necessary and appropriate in accordance
with the Loan Documents for the foregoing purposes with respect to the
Collateral and the Collections, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections, or otherwise related to any of
same as provided in the Loan Documents, and (g) incur and pay such Lender Group
Expenses as Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by any Loan Party or any
Subsidiary or Affiliate of any Loan Party, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the Books or properties of
any Loan Party or the books or records or properties of any of Loan Parties'
Subsidiaries or Affiliates.
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16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrowers
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders,
except in the case of Agent with respect to actual knowledge of the existence of
any Overadvance and except with respect to Defaults and Events of Default of
which Agent has actual knowledge, unless Agent shall have received written
notice from a Lender or Administrative Borrower referring to this Agreement,
describing such Default or Event of Default, and stating that such notice is a
"notice of default." Agent promptly will notify the Lenders of its receipt of
any such notice or of any Event of Default of which Agent has actual knowledge.
If any Lender obtains actual knowledge of any Event of Default, such Lender
promptly shall notify the other Lenders and Agent of such Event of Default. Each
Lender shall be solely responsible for giving any notices to its Participants,
if any. Subject to Section 16.4, Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with Section 9; provided, however, that unless and until Agent has
received any such request, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Loan
Parties and their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of each Loan Party and any other Person (other than the Lender
Group) party to a Loan Document, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made
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its own decision to enter into this Agreement and to extend credit to each Loan
Party. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of each Loan Party
and any other Person (other than the Lender Group) party to a Loan Document.
Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Agent, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Loan Parties and any other Person party to a
Loan Document that may come into the possession of any of the Agent-Related
Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, reasonable
attorneys fees and expenses, costs of collection by outside collection agencies
and auctioneer fees and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to the Loan Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
Collections received by Agent to reimburse Agent for such out-of-pocket costs
and expenses prior to the distribution of any amounts to Lenders. In the event
Agent is not reimbursed for such costs and expenses from Collections received by
Agent, each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender's Pro Rata Share thereof. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or on behalf of Borrowers and without limiting the obligation of Borrowers to do
so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Lender shall be liable for
the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct nor shall any Lender be liable for the obligations of any Defaulting
Lender in failing to make an Advance or other extension of credit hereunder.
Without limitation of the foregoing, each Lender shall reimburse Agent upon
demand for such Lender's ratable share of any costs or out-of-pocket expenses
(including attorneys fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrowers. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
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16.8 AGENT IN INDIVIDUAL CAPACITY. Foothill and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking,
lending, trust, financial advisory, underwriting, or other business with Loan
Parties and their Subsidiaries and Affiliates and any other Person party to any
Loan Documents as though Foothill were not Agent hereunder, and, in each case,
without notice to or consent of the other members of the Lender Group. The other
members of the Lender Group acknowledge that, pursuant to such activities, Agent
or its Affiliates may receive information regarding Loan Parties or their
Affiliates and any other Person (other than the Lender Group) party to any Loan
Documents that is subject to confidentiality obligations in favor of Loan
Parties or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include Foothill in its individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice
to the Lenders. If Agent resigns under this Agreement, the Required Lenders
shall appoint a successor Agent for the Lenders. If no successor Agent is
appointed prior to the effective date of the resignation of Agent, Agent may
appoint, after consulting with the Lenders, a successor Agent. If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Required Lenders may agree in writing to
remove and replace Agent with a successor Agent from among the Lenders. In any
such event, upon the acceptance of its appointment as successor Agent hereunder,
such successor Agent shall succeed to all the rights, powers, and duties of the
retiring Agent and the term "Agent" shall mean such successor Agent and the
retiring Agent's appointment, powers, and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 16 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. If no successor Agent
has accepted appointment as Agent by the date which is 45 days following a
retiring Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Lenders appoint a
successor Agent as provided for above.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person (other than
the Lender Group) party to any Loan Documents as though such Lender were not a
Lender hereunder without notice to or consent of the other members of the Lender
Group. The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Borrowers or their Affiliates and any other Person (other than the
Lender Group) party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such
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confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender not shall be under any obligation to
provide such information to them. With respect to the Swing Loans and Agent
Advances, Swing Lender shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the sub-agent of the Agent.
16.11 WITHHOLDING TAXES. If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the IRC and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the IRC, such Lender agrees with and in favor of Agent and Borrowers, to
deliver to Agent and Administrative Borrower:
(i) if such Lender claims an exemption from
withholding tax pursuant to its portfolio interest exception,
(a) a statement of the Lender, signed under penalty of
perjury, that it is not a (I) a "bank" as described in Section
881(c)(3)(A) of the IRC, (II) a 10% shareholder (within the
meaning of Section 881(c)(3)(B) of the IRC), or (III) a
controlled foreign corporation described in Section
881(c)(3)(C) of the IRC, and (B) a properly completed IRS Form
W-8BEN, before the first payment of any interest under this
Agreement and at any other time reasonably requested by Agent
or Administrative Borrower;
(ii) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States tax
treaty, properly completed IRS Form W-8BEN before the first
payment of any interest under this Agreement and at any other
time reasonably requested by Agent or Administrative Borrower;
(iii) if such Lender claims that interest paid
under this Agreement is exempt from United States withholding
tax because it is effectively connected with a United States
trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before the first payment of
any interest is due under this Agreement and at any other time
reasonably requested by Agent or Administrative Borrower;
(iv) such other form or forms as may be required
under the IRC or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrowers to such Lender, such
Lender agrees to notify Agent of the percentage amount in which it is no longer
the beneficial owner of Obligations of Borrowers to such Lender. To the extent
of such percentage amount, Agent will treat such Lender's IRS Form W-8BEN as no
longer valid.
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(c) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless for all amounts
paid, directly or indirectly, by Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Agent under this Section, together with all costs and expenses
(including attorneys fees and expenses). The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of Agent.
(e) All payments made by Borrowers hereunder or under any note
or other Loan Document will be made without setoff, counterclaim, or other
defense, except as required by applicable law other than for Taxes (as defined
below). All such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction (other than the United States) or by any political subdivision or
taxing authority thereof or therein (other than of the United States) with
respect to such payments (but excluding, any tax imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein (i) measured
by or based on the net income or net profits of a Lender, or (ii) to the extent
that such tax results from a change in the circumstances of the Lender,
including a change in the residence, place of organization, or principal place
of business of the Lender, or a change in the branch or lending office of the
Lender participating in the transactions set forth herein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed,
each Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any note, including any amount paid pursuant to this Section
16.11(e) after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein; provided, however, that Borrowers
shall not be required to increase any such amounts payable to Agent or any
Lender (i) that is not organized under the laws of the United States, if such
Person fails to comply with the other requirements of this Section 16.11, or
(ii) if the increase in such amount payable results from Agent's or such
Lender's own willful misconduct or gross negligence. Borrowers will furnish to
Agent as promptly as possible after the date the payment of any Taxes is due
pursuant to applicable law certified copies of tax receipts evidencing such
payment by Borrowers.
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16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
Loan Parties, of all Obligations, (ii) constituting property being sold or
disposed of if a release is required or desirable in connection therewith and if
Administrative Borrower certifies to Agent that the sale or disposition is
permitted under Section 7.4 of this Agreement or the other Loan Documents (and
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which no Loan Party owned any interest at the
time the security interest was granted or at any time thereafter, or (iv)
constituting property leased to a Loan Party under a lease that has expired or
is terminated in a transaction permitted under this Agreement. Except as
provided above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of (y) if the release is of
all or any substantial portion of the Collateral, all of the Lenders, or (z)
otherwise, the Required Lenders. Upon request by Agent or Administrative
Borrower at any time, the Lenders will confirm in writing Agent's authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 16.12; provided, however, that (1) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of Loan Party in respect of) all
interests retained by any Loan Party, including, the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by Loan Party or is
cared for, protected, or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, absent
Agent's gross negligence or willful misconduct in its sole discretion given
Agent's own interest in the Collateral in its capacity as one of the Lenders and
that Agent shall have no other duty or liability whatsoever to any Lender as to
any of the foregoing, except as otherwise provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to any Loan Party or any deposit accounts of
any Loan Party now or hereafter maintained with such Lender.
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Each of the Lenders further agrees that it shall not, unless specifically
requested to do so by Agent, take or cause to be taken any action, including,
the commencement of any legal or equitable proceedings, to foreclose any Lien
on, or otherwise enforce any security interest in, any of the Collateral the
purpose of which is, or could be, to give such Lender any preference or priority
against the other Lenders with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender
as its agent (and each Lender hereby accepts such appointment) for the purpose
of perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the Code can be perfected only by possession. Should any Lender obtain
possession of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor shall deliver such Collateral to Agent or
in accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
benefit of the Lender Group. Each member of the Lender Group agrees that any
action taken by Agent in accordance with the terms of this Agreement or the
other Loan Documents relating to the Collateral and the exercise by Agent of its
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
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16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by or
at the request of Agent, and Agent shall so furnish each Lender with such
Reports,
(b) expressly agrees and acknowledges that Agent does not (i)
make any representation or warranty as to the accuracy of any Report, and (ii)
shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Loan
Parties and will rely significantly upon the Books, as well as on
representations of Loan Parties' personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Loan Parties and their Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner;
it being understood and agreed by Borrowers that in any event such Lender may
make disclosures (a) to counsel for and other advisors, accountants, and
auditors to such Lender, (b) reasonably required by any bona fide potential or
actual Assignee or Participant in connection with any contemplated or actual
assignment or transfer by such Lender of an interest herein or any participation
interest in such Lender's rights hereunder, (c) of information that has become
public by disclosures made by Persons other than such Lender, its Affiliates,
assignees, transferees, or Participants, or (d) as required or requested by any
court, governmental or administrative agency, pursuant to any subpoena or other
legal process, or by any law, statute, regulation, or court order; provided,
however, that, unless prohibited by applicable law, statute, regulation, or
court order, such Lender shall notify Administrative Borrower of any request by
any court, governmental or administrative agency, or pursuant to any subpoena or
other legal process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Borrowers; and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as
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the direct or indirect result of any third parties who might obtain all or part
of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by a Loan Party to Agent that has not been contemporaneously
provided by such Loan Party to such Lender, and, upon receipt of such request,
Agent shall provide a copy of same to such Lender, (y) to the extent that Agent
is entitled, under any provision of the Loan Documents, to request additional
reports or information from a Loan Party, any Lender may, from time to time,
reasonably request Agent to exercise such right as specified in such Lender's
notice to Agent, whereupon Agent promptly shall request of Administrative
Borrower the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Administrative Borrower, Agent promptly
shall provide a copy of same to such Lender, and (z) any time that Agent renders
to Administrative Borrower a statement regarding the Loan Account, Agent shall
send a copy of such statement to each Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of the Lenders to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to any Loan Party or any other Person for any
failure by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrowers, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrowers, whether under
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any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing in accordance with Section 15.1.
17.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Borrower or Guarantor or the transfer to the
Lender Group of any property should for any reason subsequently be declared to
be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a "Voidable Transfer"), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or Guarantors automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
17.8 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.9 PARENT AS AGENT FOR BORROWERS. Each Borrower hereby
irrevocably appoints Parent as the borrowing agent and attorney-in-fact for all
Borrowers (the "Administrative Borrower") which appointment shall remain in full
force and effect unless and until Agent shall have received prior written notice
signed by each Borrower that such appointment has been revoked and that another
Borrower has been appointed Administrative Borrower. Each Borrower hereby
irrevocably appoints and authorizes the Administrative Borrower (i) to provide
Agent with all notices with respect to Advances and Letters of Credit obtained
for
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the benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group's relying on any instructions of the
Administrative Borrower, or (c) any other action taken by the Lender Group
hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under
this Section 17.9 with respect to any liability that has been finally determined
by a court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of such Agent-Related Person or Lender-Related
Person, as the case may be.
[Signature pages to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
ADVANCED LIGHTING TECHNOLOGIES,
INC., an Ohio corporation, debtor and debtor-in-
possession, as a Borrower and a Loan Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CFO, Secretary and Treasurer
APL ENGINEERED MATERIALS, INC.,
an Illinois corporation, debtor and debtor-in-
possession, as a Borrower and a Loan Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CFO, and Vice President
VENTURE LIGHTING INTERNATIONAL, INC.,
an Ohio corporation, debtor and debtor-in-
possession, as a Borrower and a Loan Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CFO, Secretary and Treasurer
BALLASTRONIX (DELAWARE), INC.,
a Delaware corporation, debtor and debtor-in-
possession, as a Borrower and a Loan Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CFO, Secretary and Treasurer
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MICROSUN TECHNOLOGIES, INC.,
an Ohio corporation, debtor and debtor-in-
possession, as a Borrower and a Loan Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CFO, Secretary and Treasurer
LIGHTING RESOURCES INTERNATIONAL, INC.,
an Ohio corporation, debtor and debtor-in-
possession, as a Borrower and a Loan Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CFO, Secretary and Treasurer
ADLT SERVICES, INC., an Ohio corporation, debtor
and debtor-in-possession, as a Borrower and a
Loan Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: CFO, Secretary and Treasurer
VENTURE LIGHTING POWER SYSTEMS,
NORTH AMERICA INC., a Nova Scotia
corporation, as a Loan Party
By: /s/ R.G. Xxxxxxx Xxxxxx
---------------------------------------------
Name: R.G. Xxxxxxx Xxxxxx
Title: Secretary and Treasurer
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PARRY POWER SYSTEMS LIMITED,
a corporation organized under the laws of the
United Kingdom, as a Loan Party
By: /s/ Xxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxx Xxxxx
Title: Director
VENTURE LIGHTING EUROPE LTD.,
a corporation organized under the laws of the
United Kingdom, as a Loan Party
By: /s/ Xxxxxx Xxxxx
---------------------------------------------
Name: Xxxxxx Xxxxx
Title: Director
DEPOSITION SCIENCES, INC.,
an Ohio corporation, as a Loan Party
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent and as a
Lender
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: VP
ABLECO FINANCE LLC, a Delaware limited
liability company, as a Lender
By: /s/ Xxxxx Xxxxx
---------------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
-137-
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule E-1 Eligible Inventory Locations
Schedule E-2 Eligible Equipment Locations
Schedule G-1 Guarantors
Schedule M-1 Material Contracts
Schedule P-1 Permitted Liens
Schedule P-2 Liens on Cash Collateral
Schedule R-1 Real Property Collateral
Schedule 2.7(a) Cash Management Banks
Schedule 2.7(b) Cash Management Accounts
Schedule 2.7(d) Canadian Cash Management Banks
Schedule 2.7(e) UK Cash Management Banks
Schedule 5.5 Locations of Inventory and Equipment
Schedule 5.7 Chief Executive Office; FEIN
Schedule 5.8(b) Capitalization of Borrowers
Schedule 5.8(c) Capitalization of Borrowers' Subsidiaries
Schedule 5.10 Litigation
Schedule 5.13 Assets of Non-Operating Borrowers
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.18 Demand Deposit Accounts
Schedule 5.20 Permitted Indebtedness
Schedule 5.23 Taxes
Schedule 5.26 Material Contract Defaults
Schedule 5.28 Employee Benefits
Schedule 7.14 Transactions with Affiliates
-1-
EXHIBIT A-1
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Assignment Agreement") is
entered into as of____________________________between___________________________
("Assignor") and_____________________________________("Assignee"). Reference is
made to the Agreement described in Item 2 of Annex I annexed hereto (the "Loan
Agreement"). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Loan Agreement.
1. In accordance with the terms and conditions of Section 14 of the Loan
Agreement, the Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, that
interest in and to the Assignor's rights and obligations under the Loan
Documents as of the date hereof with respect to the Obligations owing
to the Assignor, and Assignor's portion of the Total Commitments, the
Revolver Commitments, and the Term Loan Commitments, all as specified
in Item 4.b and Item 4.c of Annex I. After giving effect to such sale
and assignments, the Assignee's portion of the Total Commitments,
Revolver Commitments, and the Term Loan Commitments will be as set
forth in Item 4.b of Annex I. After giving effect to such sale and
assignment the Assignor's amount and portion of the Total Commitments,
Revolver Commitments, and the Term Loan Commitments will be as set
forth in Item 4.d and Item 4.e of Annex I.
2. The Assignor (a) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any other instrument or document furnished pursuant
thereto; and (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or
the performance or observance by Borrower of any of its obligations
under the Loan Documents or any other instrument or document furnished
pursuant thereto.
3. The Assignee (a) confirms that it has received copies of the Loan
Agreement and the other Loan Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement; (b)
agrees that it will, independently and without reliance, as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents; (c) confirms
that it is eligible as an assignee under the terms of the Loan
Agreement; (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to
1
exercise such powers under the Loan Documents as are delegated to Agent
by the terms thereof, together with such powers as are reasonably
incidental thereto; (e) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a Lender [and (f)
attaches the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect
to all payments to be made to the Assignee under the Loan Agreement or
such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable
tax treaty.]
4. Following the execution of this Assignment Agreement by the Assignor
and Assignee, it will be delivered by the Assignor to the Agent for
recording by the Agent. The effective date of this Assignment (the
"Settlement Date") shall be the later of (a) the date of the execution
hereof by the Assignor and the Assignee, the payment by Assignor or
Assignee to Agent for Agent's sole and separate account a processing
fee in the amount of $5,000, and the receipt of any required consent of
the Agent, and (b) the date specified in item 5 of Annex I.
5. Upon recording by the Agent, as of the Settlement Date (a) the Assignee
shall be a party to the Loan Agreement and, to the extent of the
interest assigned pursuant to this Assignment Agreement, have the
rights and obligations of a Lender thereunder and under the other Loan
Documents, and (b) the Assignor shall, to the extent of the interest
assigned pursuant to this Assignment Agreement, relinquish its rights
and be released from its obligations under the Loan Agreement and the
other Loan Documents.
6. Upon recording by the Agent, from and after the Settlement Date, the
Agent shall make all payments under the Loan Agreement and the other
Loan Documents in respect of the interest assigned hereby (including,
without limitation, all payments or principal, interest and commitment
fees (if applicable) with respect thereto) to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor the Assigned
Share (as set forth in Item 4.b of Annex I) of the principal amount of
any outstanding loans under the Loan Agreement and the other Loan
Documents. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Loan Agreement and the other Loan
Documents for periods prior to the Settlement Date directly between
themselves on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF___________________ .
[Remainder of page left intentionally blank.]
2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement and Annex I hereto to be executed by their respective officers
thereunto duly authorized, as of the first date above written.
[NAME OF ASSIGNOR]
as Assignor
By:_____________________________________________
Title:__________________________________________
[NAME OF ASSIGNEE]
as Assignee
By:_____________________________________________
Title:__________________________________________
ACCEPTED THIS __________ DAY OF
_______________
XXXXX FARGO FOOTHILL, INC.,
as Agent
By:__________________________________________
Title:_______________________________________
3
ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
1. Borrowers: Advanced Lighting Technologies, Inc. and certain of
its Subsidiaries
2. Name and Date of Loan Agreement:
Loan and Security Agreement, dated as of June __, 2003, among
Borrowers, the lenders signatory thereto as the Lenders, and
Xxxxx Fargo Foothill, Inc., a California corporation, as the
arranger and administrative agent for the Lenders.
3. Date of Assignment Agreement:
4. Amounts:
a. Assignor's Total Commitment $________________
i. Assignor's Revolver Commitment $________________
ii. Assignor's Term Loan A Commitment $________________
iii. Assignor's Term Loan B Commitment $________________
b. Assigned Share of Total Commitment ___________%
i. Assigned Share of Revolver
Commitment ___________%
ii. Assigned Share of Term Loan A
Commitment ___________%
iii. Assigned Share of Term Loan B
Commitment ____________%
c. Assigned Amount of Total Commitment $________________
i. Assigned Amount of Revolver Credit
Commitment to make $________________
ii. Assigned Amount of Term Loan A
Commitment $________________
iii. Assigned Amount of Term Loan B
Commitment $________________
d. Resulting Amount of Assignor's Total Commitment after
giving effect to the sale and Assignment to Assignee $________________
4
i. Resulting Amount of Assignor's
Revolver Commitment $________________
ii. Resulting Amount of Assignor's
Term Loan A Commitment $________________
ii. Resulting Amount of Assignor's
Term Loan B Commitment $________________
e. Assignor's Resulting Share of Total Commitment after
giving effect to the Assignment to Assignee ____________%
i. Assignor's Resulting Share of
Revolving Credit Commitment ____________%
ii. Assignor's Resulting Share of the
Term Loan A Commitment ____________%
ii. Assignor's Resulting Share of the
Term Loan B Commitment ____________%
5. Settlement Date:
6. Notice and Payment Instructions, etc.
Assignee: Assignor:
7. Agreed and Accepted:
[ASSIGNOR] [ASSIGNEE]
By: _____________________________ By: ______________________________
Title: __________________________ Title: ___________________________
5
Accepted:
XXXXX FARGO FOOTHILL, INC.,
as Agent
By: _______________________________________
Title: _____________________________________
6
EXHIBIT C-1
FORM OF COMPLIANCE CERTIFICATE
ON COMPANY LETTERHEAD
Date ______________________
Xxxxx Fargo Foothill, Inc., as Agent
Xxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
RE: COMPLIANCE CERTIFICATE
MONTH ENDED ##/##/##
In accordance with our Loan and Security Agreement ("Agreement") dated June 30,
2003, I hereby certify:
All reports, statements or computer prepared information of any kind or
nature delivered or caused to be delivered to Lenders have been
prepared in accordance with GAAP consistently applied and fairly
present the financial condition of Borrowers, except as follows:
Borrower is in timely compliance with all representations, warranties,
and covenants as defined within the Agreement, except as follows:
On the date of delivery of such certificate to Foothill there does not
exist any condition or event which constitutes an Event of Default, as
defined within the Agreement, except as follows:
ADVANCED LIGHTING TECHNOLOGIES, INC., as Administrative Borrower
By: ________________________________________
Authorized Signer
EXHIBIT L-1
FORM OF LIBOR NOTICE
Xxxxx Fargo Foothill, Inc., as Agent
under the below referenced Loan Agreement
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance Division Manager
Ladies and Gentlemen:
Reference hereby is made to that certain Loan and Security
Agreement, dated as of June __, 2003 (the "Loan Agreement"), among Advanced
Lighting Technologies, Inc., a Delaware corporation, Debtor and
Debtor-in-Possession ("Parent"), and certain of its subsidiaries as borrowers
(collectively, with Parent, "Borrowers"), the lenders signatory thereto (the
"Lenders"), and Xxxxx Fargo Foothill, Inc., a California corporation, as the
arranger and administrative agent for the Lenders ("Agent"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed to
them in the Loan Agreement.
This LIBOR Notice represents Borrower's request to elect the
LIBOR Option with respect to [outstanding Advances/a portion of Term Loan A] in
the amount of $________________________ (the "LIBOR Rate Advance")[, and is a
written confirmation of the telephonic notice of such election given to Agent].
Such LIBOR Rate Advance will have an Interest Period of 1, 2,
3 or 6 month(s) commencing on______________________.
This LIBOR Notice further confirms Borrower's acceptance, for
purposes of determining the rate of interest based on the LIBOR Rate under the
Loan Agreement, of the LIBOR Rate as determined pursuant to the Loan Agreement.
Borrowers represents and warrants that (i) as of the date
hereof, each representation or warranty contained in or pursuant to any Loan
Document, any agreement, instrument, certificate, document or other writing
furnished at any time under or in connection with any Loan Document, and as of
the effective date of any advance, continuation or conversion requested above is
true and correct in all material respects (except to the extent any
representation or warranty expressly related to an earlier date), (ii) each of
the covenants and agreements contained in any Loan Document have been performed
(to the extent required to be performed on or before the date hereof or each
such effective date), and (iii) no Default or Event of Default has occurred and
is continuing on the date hereof, nor will any thereof occur after giving effect
to the request above.
Dated: _________________________________________
ADVANCED LIGHTING TECHNOLOGIES,
INC., an Ohio corporation, as Administrative
Borrower
By ____________________________________________
Name:___________________________________________
Title: _________________________________________
Acknowledged by:
XXXXX FARGO FOOTHILL, INC.
as Agent
By: ___________________________
Name: __________________________
Title: _________________________
2
SCHEDULE A-1
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as
the account into which Borrowers shall make all payments to Agent for the
benefit of the Lender Group and into which the Lender Group shall make all
payments to Agent under this Agreement and the other Loan Documents; unless and
until Agent notifies Administrative Borrower and the Lender Group to the
contrary, Agent's Account shall be that certain deposit account bearing account
number 323-266193 and maintained by Agent with JPMorgan Chase Bank, 0 Xxx Xxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA #000000000.
SCHEDULE C-1
COMMITMENTS
REVOLVER TERM LOAN A TERM LOAN B TOTAL
LENDER COMMITMENT COMMITMENT COMMITMENT COMMITMENT
------------------------------------------------------------------------------------------------------------
Xxxxx Fargo Foothill, Inc. $18,500,000 $5,000,000 $ 0 $23,500,000
------------------------------------------------------------------------------------------------------------
Ableco Finance LLC $ 0 $ 0 $13,500,000 $13,500,000
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
All Lenders $18,500,000 $5,000,000 $13,500,000 $37,000,000
------------------------------------------------------------------------------------------------------------
SCHEDULE D-1
DESIGNATED ACCOUNT
Account number 0000000000 of Administrative Borrower
maintained with Administrative Borrower's Designated Account Bank, or such other
deposit account of Administrative Borrower (located within the United States)
that has been designated as such, in writing, by Administrative Borrower to
Agent.
"Designated Account Bank" means PNC Bank, whose office is
located at East Brunswick, New Jersey, and whose ABA number is 031 207 607.
-4-
SCHEDULE E-1
ELIGIBLE INVENTORY LOCATIONS
ADVANCED LIGHTING TECHNOLOGIES, INC.
None.
APL ENGINEERED MATERIALS, INC.
0000 Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Osram Sylvania Inc.*
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
GE Lighting*
Ravenna Lamp Plant #3949
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Philips Lighting Company*
0000 Xxxxx 00
Xxxx, Xxx Xxxx 00000
VENTURE LIGHTING INTERNATIONAL, INC.
00000 Xxxxxx Xxxx**
Xxxxx, Xxxx 00000
0000 Xxxxx Xxxxxxx, Xxxx X**
Xxxxxx, Xxxxxxxxxx 00000-0000
Parcel 00
Xxxxxxx Xxxxxxxxxx Xxxx
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx
Xxxxxxx Sales Company*
000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
CEW Lighting*
00000 Xxxxx Xxxx
Xxxxxx, Xxxxx 00000
CEW Lighting*
0000 X. Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Nevada Sales*
0000 Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Duraguard Products*
00000 XX Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Lighting & Electrical Assoc.*
3925 North X-00 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000-0000
Fiberstars, Inc.*
00000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Diversified Electrical Sales*
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Kenall*
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Gigar Sales Agency, Inc.*
0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx, X-000
Xxx Xxxxx, Xxxxxx 00000
North Star Lighting*
0000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Innovative Lighting Systems*
000 Xxxx Xxxxx Xxxxxxxx, Xxxxx X
Xxxxxxxxxx, Xxxx 00000
SL Fixture Manufacturing*
0000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
X X Xxxxxxx Company*
N. 56 West 27126 Highway K
Xxxxxx, Xxxxxxxxx 00000
QSSI/Pacific Die Cast Inc.*
0000 Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx, Inc.*
00 Xxxxxxxxxxx Xxxxxxxx
Xxxxxxxx, Xxx Xxxxxxxxx 00000
QSSI/Pacific Die*
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxx 00000
Widelite*
Division of Genlyte Companies
000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxxxx, Xxxxx 00000
BALLASTRONIX (DELAWARE), INC.
None.
MICROSUN TECHNOLOGIES, INC.
None.
LIGHTING RESOURCES INTERNATIONAL, INC.
None.
ADLT SERVICES, INC.
None.
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC.
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxxxx X0X 0X0
Xxxxxx
0000 Xxxxxxx Xxxx, Xxxxx 0 & 0**
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Ruud Lighting, Inc.*
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Xxxxx Sports Lighting*
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000-0000
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Hydrofarm Gardening Products*
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxx Business Inc.**
00 Xxxxx Xxxxxx Xxxx 0
Xxxxxxx, Xxxx Xxxxxx
X0X 0X0
DEPOSITION SCIENCES, INC.
0000 Xxxxxx Xxxx**
Xxxxx Xxxx, Xxxxxxxxxx 00000
*Consigned inventory will only be eligible up to $500,000 if an acceptable
consignment agreement is obtained and Agent obtains a first priority lien on
such consigned inventory.
**Inventory at a leased location will be eligible only if an acceptable
landlord/mortgagee waiver is obtained.
SCHEDULE E-2
ELIGIBLE EQUIPMENT
ADVANCED LIGHTING TECHNOLOGIES, INC.
None.
APL ENGINEERED MATERIALS, INC.
0000 Xxxxx Xxxxxx Xxxx*
Xxxxxx, Xxxxxxxx 00000-0000
VENTURE LIGHTING INTERNATIONAL, INC.
00000 Xxxxxx Xxxx*
Xxxxx, Xxxx 00000
BALLASTRONIX (DELAWARE), INC.
None.
MICROSUN TECHNOLOGIES, INC.
None.
LIGHTING RESOURCES INTERNATIONAL, INC.
None.
ADLT SERVICES, INC.
None.
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC.
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxxxx X0X 0X0
Xxxxxx
0000 Xxxxxxx Xx., Xxxxx 0 & 0*
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
DEPOSITION SCIENCES, INC.
0000 Xxxxxx Xxxx*
Xxxxx Xxxx, Xxxxxxxxxx 00000
*Equipment at these locations will only be eligible if an acceptable
landlord/mortgagee waiver is obtained.
SCHEDULE G-1
GUARANTORS
ADLT Realty Corp. 1, Inc.
Deposition Sciences, Inc.
Parry Power Systems Limited
Unison Fiber Optic Lighting Systems LLC
Venture Lighting Europe Ltd.
Venture Lighting Power Systems, North America, Inc.
Schedule M-1
MATERIAL CONTRACTS
NOTE INDENTURE
Indenture between Advanced Lighting Technologies, Inc. and The Bank of New York,
as Trustee, dated as of March 18, 1998; Uncured Payment Default
First Supplemental Indenture dated September 25, 1998 between Advanced Lighting
Technologies, Inc. and The Bank of New York amending the Indenture dated March
18, 1998
VOTING TRUST AGREEMENTS
Amended and Restated Voting Trust Agreement dated as of October 1, 1999 by and
among Xxxxx X. Xxxxxxx, as voting trustee, and the Shareholders listed on
Exhibit A thereto
Amended and Restated Voting Trust Agreement dated as of October 1, 1999 among
Xxxx X. Xxxx, as voting trustee, and the Shareholders listed on Exhibit A
thereto
MANAGEMENT CONTRACTS, COMPENSATORY PLANS AND ARRANGEMENTS
Loan Agreement dated as of October 8, 1998 between Advanced Lighting
Technologies, Inc. and Xxxxx X Xxxxxxx
Secured Promissory Note of Xxxxx X. Xxxxxxx dated as of October 8, 1998 in the
amount of $9,000,000 to Advanced Lighting Technologies, Inc.
First Amendment to Loan Agreement, Secured Promissory Note and Security
Agreement between Xxxxx X. Xxxxxxx and Advanced Lighting Technologies, Inc.
dated as of November 22, 2000
Second Amendment to Loan Agreement, Secured Promissory Note and Security
Agreement between Xxxxx X. Xxxxxxx and Advanced Lighting Technologies, Inc.
dated as of March 15, 2001
Third Amendment to Loan Agreement, Secured Promissory Note and Security
Agreement between Xxxxx X. Xxxxxxx and Advanced Lighting Technologies, Inc.
dated as of April 25, 2002
Amended and Restated Employment Agreement between Xxxxx X. Xxxxxxx and Advanced
Lighting Technologies, Inc. dated as of October 8, 1998
Advanced Lighting Technologies, Inc. Amended and Restated 1995 Incentive Award
Plan
Advanced Lighting Technologies, Inc. 1997 Billion Dollar Market Capitalization
Incentive Award Plan
Advanced Lighting Technologies, Inc. Amended and Restated 1998 Incentive Award
Plan
Deposition Sciences, Inc. 2001 Equity Incentive Plan
Mutual Release and Indemnification Agreement by and between Advanced Lighting
Technologies, Inc. and Xxxxx X. Xxxx dated as of December 31, 1999
Consulting Agreement by and between Advanced Lighting Technologies, Inc. and
Xxxxx X. Xxxx dated as of December 31, 1999
Release and Settlement Agreement by and between Advanced Lighting Technologies,
Inc. and Xxxxxx X. Xxxxx dated as of May 29, 2002
Addendum to Release and Settlement Agreement by and between Advanced Lighting
Technologies, Inc. and Xxxxxx X. Xxxxx dated as of September 6, 2002
Addendum to Release and Settlement Agreement by and between Advanced Lighting
Technologies, Inc. and Xxxxxx X. Xxxxx dated as of January 2, 2003
Addendum to Release and Settlement Agreement by and between Advanced Lighting
Technologies, Inc. and Xxxxxx X. Xxxxx dated as of April 15, 2003
OTHER AGREEMENTS
Lease Agreement by and between Xxxxxx Associates and Deposition Sciences,
Incorporated dated March 2, 2001
Agreement dated April 16, 2001 by and between Xxxxxx Associates and Deposition
Sciences, Inc. amending the Lease Agreement by and between the same parties
dated March 2, 2001
Second Amendment to Lease dated June 20, 2001 by and between Xxxxxx Associates
and Deposition Sciences, Inc. amending the Lease Agreement by and between the
same parties dated March 2, 2001
Option Agreement to Purchase Real Property dated March 2, 2001 by and between
Xxxxxx Associates and Deposition Sciences, Incorporated with respect to the
premises leased by the second party from the first party pursuant to the Lease
Agreement by and between them dated March 2, 2001
Agreement dated May 29, 2001 by and between Xxxxxx Associates and Deposition
Sciences, Inc. amending the Option Agreement to Purchase Real Property by and
between the same parties dated Xxxxx 0, 0000
Xxxxx Purchase Agreement by and between Advanced Lighting Technologies, Inc. and
General Electric Company dated as of September 28, 1999
Contingent Warrant Agreement dated as of September 30, 1999 by and among
Advanced Lighting Technologies, Inc., General Electric Company, Xxxxx X.
Xxxxxxx, individually and as voting trustee under Voting Trust Agreement dated
October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually and as voting
trustee under Voting Trust Agreement dated January 2, 1998, as subsequently
amended and restated October 1, 2000
Amendment to Contingent Warrant Agreement dated as of August 31, 2000 by and
among Advanced Lighting Technologies, Inc., General Electric Company, Xxxxx X.
Xxxxxxx, individually and as voting trustee under Voting Trust Agreement dated
October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually and as voting
trustee under Voting Trust Agreement dated January 2, 1998
Second Amendment to Contingent Warrant Agreement dated as of June 29, 2001 by
and among Advanced Lighting Technologies, Inc., General Electric Company, Xxxxx
X. Xxxxxxx, individually and as voting trustee under Voting Trust Agreement
dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually and as
voting trustee under Voting Trust Agreement dated January 2, 1998
Third Amendment to Contingent Warrant Agreement dated as of September 28, 2001
by and among Advanced Lighting Technologies, Inc., General Electric Company,
Xxxxx X. Xxxxxxx, individually and as voting trustee under Voting Trust
Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually
and as voting trustee under Voting Trust Agreement dated January 2, 0000
Xxxxxx Xxxxxxxxx to Contingent Warrant Agreement dated as of December 31, 2001
by and among Advanced Lighting Technologies, Inc., General Electric Company,
Xxxxx X. Xxxxxxx, individually and as voting trustee under Voting Trust
Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually
and as voting trustee under Voting Trust Agreement dated January 2, 1998 (Form
10-Q Exhibit 10.2)
Fifth Amendment to Contingent Warrant Agreement dated as of March 31, 2002 by
and among Advanced Lighting Technologies, Inc., General Electric Company, Xxxxx
X. Xxxxxxx, individually and as voting trustee under Voting Trust Agreement
dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually and as
voting trustee under Voting Trust Agreement dated January 2, 1998
Sixth Amendment to Contingent Warrant Agreement dated as of June 30, 2002 by and
among Advanced Lighting Technologies, Inc., General Electric Company, Xxxxx X.
Xxxxxxx, individually and as voting trustee under Voting Trust Agreement dated
October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually and as voting
trustee under Voting Trust Agreement dated January 2, 1998
Patent and Technical Assistance Agreement by and among Advanced Lighting
Technologies, Inc., APL Engineered Materials, Inc. and General Electric Company,
acting through its GE Lighting business, dated as of September 30, 1999
Series A1 Warrant to Purchase Common Shares of Advanced Lighting Technologies,
Inc. issued to General Electric Company dated as of October 6, 1999
Contract Hire Agreement by and between Venture Lighting Europe Limited and Arval
Limited dated July 18, 2001
Contract Hire Agreement by and between Venture Lighting Europe Limited and
Network Vehicles Limited dated August 28, 2002
Contract Hire Agreement by and between Venture Lighting Europe Limited and
Capital Bank Vehicle Management Limited dated April 23, 2001
Contract Hire Agreement by and between Venture Lighting Europe Limited and
Shogun Finance Limited dated December 8, 2000
Consolidated Agreement by and between Parry Power Systems Limited and Symix (UK)
Limited dated June 10, 1998
Contract Agreement by and between Venture Lighting Europe Limited and GasForce
Limited dated April 1, 2003
Software License Agreement by and between Venture Lighting Europe Limited and
Xxxxxxxxxx Xxxx Plc dated March 9, 2000
Fixed Term Hire Agreement by and between Venture Lighting Europe Limited and
Copystatic Midlands Limited dated June 6, 2001
Hire Agreement by and between Venture Lighting Europe Limited and Neopost
Finance Limited dated October 10, 2002
Maintenance contract by and between Parry Power Systems Limited and Netserv
Limited dated August 5, 1998
Consignment Agreement by and between Parry Power Systems Limited and Whitecroft
Lighting Limited dated February 17, 1999
Consignment Agreement by and between XX Xxxxx & Co. (Nottingham) Ltd. and X. X.
Xxxxxxx Limited dated January 17, 1996
Service Agreement by and between Parry Power Systems Limited and Continental
Airlines Inc. dated September 19, 1997
Agency Agreement by and among Venture Lighting Europe Limited, Advanced Lighting
Technologies Europe Limited and Xxxxxxx Xxxxxxx dated May 1, 1999
Agency Agreement by and between Venture Lighting Europe Limited and Erressee
Light SRL dated June 29, 2000
Maintenance Agreement by and between Venture Lighting Europe Limited and ADT
Fire and Security Plc
Supply contract by and between Venture Lighting Europe Limited and NUS
Consulting Group Limited dated November 25, 2002
Settlement Agreement by and between Venture Lighting Europe Limited and
Technische Verlichting B.V. dated February 4, 2002
Distribution Agreement by and among Venture Lighting Power Systems, North
America Inc. (formerly Ballastronix Inc.) and Advanced Lighting Technologies,
Canada Inc. and Osram Sylvania Ltd./Ltee. dated May 8, 1998.
Component Purchase Agreement by and among Ruud Lighting, Inc., Venture Lighting
International Inc. and Advanced Lighting Technologies, Inc. dated December 3,
2001. (Although Venture Lighting Power Systems, North America Inc. is not a
party to this agreement, it would be adversely impacted by its cancellation).
First Amendment to Component Purchase Agreement by and among Ruud Lighting Inc.,
Venture Lighting International Inc. and Advanced Lighting International, Inc.
dated November 18, 2002.
Second Amendment to Component Purchase Agreement by and among Ruud Lighting
Inc., Venture Lighting International Inc. and Advanced Lighting International,
Inc. dated April 21, 2003.
Lease by and between Nova Scotia Business Incorporated and Venture Lighting
Power Systems, North America Inc. respecting Xxxx #0 xx xxx Xxxxxxx Xxxx
Xxxxxxxxxx Xxxx dated as of February 28, 2003 for a term commencing March 1,
2003 and ending February 29, 2004.
Consignment Agreement by and between Venture Power Lighting Systems, North
America Inc. and Rea Magnet Wire Company, Inc. dated June 1, 2002 for a term
commencing July 1, 2002 through September 30, 2004 for supply of copper and
aluminum magnet wire on consignment at our location in Amherst, with 60 day
payment terms and a volume rebate.
Lease Agreement by and between Ballastronix Inc., which subsequently amalgamated
to form Venture Lighting Power Systems, North America Inc. and Erinview Holdings
Limited dated June 30, 1993 and extended by an agreement dated March 3, 1994,
for a term commencing July 1, 1993 and expiring June 30, 1994 followed by
consecutive terms commencing July 1, 1994 and expiring June 30, 2003 respecting
Units 6 and 7, 0000 Xxxxxxx Xxxx, Xxxxxxxxxxx, XX.
Lease Extension and Amendment Agreement by and between Erinview Holdings Limited
and Venture Lighting Power Systems, North America Inc. dated May 2, 2003 for the
period
commencing July 1, 2003 through June 30, 2006 respecting Units 6 and 7, 0000
Xxxxxxx Xxxx, Xxxxxxxxxxx, XX.
Assignment of goodwill between Parry Power Systems Limited and Venture Lighting
Europe Limited dated July 21, 1999
Assignment of debts between Parry Power Systems Limited and Venture Lighting
Europe Limited dated July 21, 1999
Asset Sale Agreement between Parry Power Systems Limited and Venture Lighting
Europe Limited dated July 21, 1999
Assignment of goodwill between ADLT Logistics Limited and Venture Lighting
Europe Limited dated July 21, 1999
Assignment of debts between ADLT Logistics Limited and Venture Lighting Europe
Limited dated July 21, 1999
Asset Sale Agreement between ADLT Logistics Limited and Venture Lighting Europe
Limited dated July 21, 1999
Tenancy Agreement between Xxxxxxxxxxx Xxxxxx Xxxxxxx and Venture Lighting Europe
dated April 25, 2003 relating to Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx, Xxxxxx
Xxxxxxx.
SCHEDULE P-1
PERMITTED LIENS
U.S. ENTITIES
Charge Over Shares granted by Advanced Lighting Technologies, Inc. ("ADLT") in
favor of PNC Bank, National Association dated May 21, 1999.*
Open End Mortgage, Security Agreement and Assignment of Rents in favor of First
Merit Bank, N.A. (f/k/a Security Federal Savings and Loan Association of
Cleveland) dated March 26, 1997 for the property located at 00000 Xxxx-Xxxxx #0,
Xxxxxxxxx, Xxxx 00000 for the original principal sum of $185,000. Assignment of
Rents and Leases dated March 26, 1997 for the original principal sum of $185,000
in favor of First Merit Bank, N.A. (f/k/a Security Federal Savings and Loan
Association of Cleveland).
Mortgage between APL Engineered Materials, Inc. and Bank Illinois (f/k/a The
Champaign National Bank) April 21, 1992 to secure indebtedness for the original
principal sum of $1,100,000 on the real property of APL Engineered Materials,
Inc. located at 0000 X. Xxxxxx Xxxx, Xxxxxx, XX 00000.
Mortgage, Security Agreement and Assignment of Leases and Rents between ADLT
Realty Corp. I, Inc. and Midland Loan Services dated May 31, 1996 to secure
indebtedness for the original principal sum of $4,900,000 on the real property
of ADLT Realty Corp. I, Inc. located at 00000 Xxxxxx Xxxx, Xxxxx Xxxx 00000.
Shareholders Agreement dated August 17, 1998 by and among Hexagram, Inc.
("Hexagram") and the shareholders of ADLT restricts the ability of ADLT to
assign or grant a security interest in the stock of Hexagram.
Restated Investor Agreement among Fiberstars, Inc., ADLT and Unison Fiber Optic
Lighting Systems LLC dated as of January 31, 2000 restricts the ability of ADLT
to assign or grant a security interest in the Fiberstars, Inc. stock.
Please also see Attachment A.
VENTURE LIGHTING EUROPE LIMITED
1. Debenture dated May 21, 1999 in favor of PNC Bank, National Association
in its capacity as Agent and Trustee for the lenders of the security constituted
by the Debenture registered at Companies House, Cardiff on May 25, 1999.*
2. Debenture dated February 6, 2003 in favor of PNC Bank, National
Association in its capacity as Agent and Trustee for the lenders of the security
constituted by the Debenture.*
PARRY POWER SYSTEMS LIMITED
1. Debenture dated May 21, 1999 in favor of PNC Bank, National Association
in its capacity as Agent and Trustee for the lenders of the security constituted
by the Debenture registered at Companies House, Cardiff on May 25, 1999.*
2. Debenture dated February 6, 2003 in favor of PNC Bank, National
Association in its capacity as Agent and Trustee for the lenders of the security
constituted by the Debenture.*
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC.
1. A financing statement between Venture Lighting Power Systems, North
America Inc. ("VLNA") as debtor and Praxair Canada Inc. as secured party
registered on March 31, 2003, as Registration Number 6606531, expiring on March
31, 2009, with respect to certain equipment, bulk cyrogenic storage tanks used
for the storage filing and delivery of industrial and medical gases, related
equipment and proceeds therefrom (filed in Nova Scotia).
2. A Financing Statement between VLNA as debtor and Royal Bank of Canada
as secured party registered on December 16, 2002, as Registration Number
6237645, expiring on December 16, 2007, with respect to monies or amounts that
may from time to time be on deposit in the name of VLNA with or owed to VLNA by
the secured party, Royal Bank Mortgage Corporation, The Royal Trust Company or
Royal Trust Corporation of Canada or any two or more of them, and VLNA's rights
to such moneys and all proceeds (filed in Nova Scotia) (Subject to a priorities
agreement that caps the lien at 15,000 Canadian dollars).
3. A Financing Statement between VLNA as debtor and Rea Magnet Wire
Company Inc. as secured party registered on October 31, 2002, as Registration
Number 60823249, expiring on October 31, 2007, all products supplied to VLNA by
the secured party and proceeds of sales thereof (filed in Nova Scotia) (This is
a consignment arrangement).
4. A Financing Statement between VLNA as debtor and Atlantic Air Cleaning
Specialists Ltd. as secured party registered on January 7, 2002, as Registration
Number 4911313, expiring on January 7, 2005, with respect to a Dust Hog Cyclone
Model #C-3015 (filed in Nova Scotia).
5. A Financing Statement between VLNA as debtor and CIT Financial Ltd. as
secured party registered on December 10, 1998, as Registration Number 1215018,
expiring on December 10, 2004, with respect to a Lucent Definity System with
audix, together with all accessions, attachments and accessories, and proceeds
in any form (filed in Nova Scotia).
6. A Financing Statement between VLNA as debtor and PNC Bank (National
Association as Agent) as secured party registered on May 20, 1999, as
Registration Number 1810963 without expiration (an infinite registration), with
respect to all of VLNA's present and after-acquired personal property (filed in
Nova Scotia).*
7. A Financing Statement between Canadian Lighting Systems Holding,
Incorporated as debtor and PNC Bank (National Association, as Agent) as secured
party registered on May 20,
1999, as Registration Number 1810963, without expiration (an infinite
registration), with respect to all of the debtor's present and after-acquired
personal property except shares in Ballastronix Incorporated (filed in Nova
Scotia).*
8. A Financing Statement between VLNA as debtor and PNC Bank (National
Association as Agent) as secured party registered on May 20, 1999 filed in
Ontario against VLNA.*
9. A Financing Statement between Canadian Lighting Systems Holding,
Incorporated as debtor and PNC Bank (National Association, as Agent) as secured
party registered on May 20, 1999 filed in Ontario filed against Ballastronix.*
*Liens in favor of PNC Bank, National Association, as Agent shall be terminated
and released pursuant to the pay-off letter between PNC Bank, National
Association and Advanced Lighting Technologies, Inc. dated June 30, 2003.
ATTACHMENT A
to
SCHEDULE P-1
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
ADVANCED LIGHTING TECHNOLOGIES, INC.
SECURED PARTY JURISDICTION TYPE OF UCC
------------- ------------ -----------
-------- ----------------------------------- ------------------------------ ---------------------------
1 Security Federal Savings & Loan Ohio S/S UCC-1
Association of Cleveland
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
2 Security Federal Savings & Loan Ohio S/S UCC-1
Association of Cleveland
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
3 Commerce Exchange Bank Ohio S/S UCC-1
(assigned by Dove Management
Ser, Inc.)
-------- ----------------------------------- ------------------------------ ---------------------------
4 Hinsbrook Bank & Trust Ohio S/S UCC-1
(assigned by Oakcreek Funding
Corp.)
-------- ----------------------------------- ------------------------------ ---------------------------
5 PNC Bank, National Association, Ohio S/S UCC-1
as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
6 Citicorp Del Lease, Inc. Ohio S/S UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
7 Citicorp Del Lease, Inc. Ohio S/S UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
8 General Electric Capital Ohio S/S UCC-1
Corporation
UCC-3 Amendment
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
9 General Electric Capital Ohio S/S UCC-1
Corporation
-------- ----------------------------------- ------------------------------ ---------------------------
10 Security Federal Savings & Loan Cuyahoga County, OH UCC-1
Association of Cleveland
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
11 Commerce Exchange Bank Cuyahoga County, OH UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 Security Federal Savings & Loan AM88264 Equipment
Association of Cleveland filed 07/15/1996
20011170266 Continuation
filed 03/12/2001
-------- ----------------------------------- ---------------------- --------------------------------------
2 Security Federal Savings & Loan AN08872 Equipment
Association of Cleveland filed 10/07/1996
20011310280 Continuation
filed 04/10/2001
-------- ----------------------------------- ---------------------- --------------------------------------
3 Commerce Exchange Bank AP0109481 Equipment (computer)
(assigned by Dove Management filed 12/21/1998
Ser, Inc.)
-------- ----------------------------------- ---------------------- --------------------------------------
4 Hinsbrook Bank & Trust AP0116266 Equipment lease.
(assigned by Oakcreek Funding filed 01/21/1999
Corp.)
-------- ----------------------------------- ---------------------- --------------------------------------
5 PNC Bank, National Association, AP0145769 Blanket lien.
as Agent(1) filed 05/24/1999
-------- ----------------------------------- ---------------------- --------------------------------------
6 Citicorp Del Lease, Inc. AP0241946 Equipment (GENICLIFT)
filed 05/22/2000
-------- ----------------------------------- ---------------------- --------------------------------------
7 Citicorp Del Lease, Inc. AP0242171 Equipment (GENICLIFT)
filed 05/23/2000
-------- ----------------------------------- ---------------------- --------------------------------------
8 General Electric Capital AP0083123
Corporation filed 09/15/1998
20030760168 Debtor name change from
filed 03/14/2003 Advanced Lighting, Inc.
20030760170 Continuation
filed 03/14/2003
-------- ----------------------------------- ---------------------- --------------------------------------
9 General Electric Capital OH00062869125 In Lieu of Continuation Statement to
Corporation filed 04/25/2003 continue effectiveness of Cuyahoga
County filings.
-------- ----------------------------------- ---------------------- --------------------------------------
10 Security Federal Savings & Loan 1349903 Equipment
Association of Cleveland filed 07/23/1996
200103219045 Continuation.
filed 03/21/2001
-------- ----------------------------------- ---------------------- --------------------------------------
11 Commerce Exchange Bank 0000000 Equipment (computer).
filed 05/08/1998
-------- ----------------------------------- ---------------------- --------------------------------------
-1-
SECURED PARTY JURISDICTION TYPE OF UCC
------------- ------------ -----------
-------- ----------------------------------- ------------------------------ ---------------------------
12 Commerce Exchange Bank Cuyahoga County, OH UCC-1
(assigned by Dove Management
Ser, Inc.)
-------- ----------------------------------- ------------------------------ ---------------------------
13 Dove Management Ser, Inc. Cuyahoga County, OH UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
14 PNC Bank, National Association, Cuyahoga County, OH UCC-1
as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
15 Citicorp Del Lease, inc. Cuyahoga County, OH UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
16 Cuyahoga County, OH State Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
17 Cuyahoga County, OH Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
18 Cuyahoga County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
19 Cuyahoga County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
20 Security Federal Savings & Loan Summit County, OH UCC-1
Association of Cleveland
UCC-3
-------- ----------------------------------- ------------------------------ ---------------------------
21 Security Federal Savings & Loan Summit County, OH UCC-1
Association of Cleveland
UCC-3
-------- ----------------------------------- ------------------------------ ---------------------------
22 Summit County, OH State Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx Xxxxxx Xxxxxx, XX Judgment lien
Taxation
-------- ----------------------------------- ------------------------------ ---------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx Xxxxxx Xxxxxx, XX Judgment lien
Taxation
-------- ----------------------------------- ------------------------------ ---------------------------
25 Summit County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
26 Summit County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
27 Middletown City, RI UCC
-------- ----------------------------------- ------------------------------ ---------------------------
00 Xxxxxxxxxx Xxxx, XX Xxxxx Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
29 Middletown City, RI Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
30 Citizens Leasing Corporation Middletown City, RI Fixture
-------- ----------------------------------- ------------------------------ ---------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
12 Commerce Exchange Bank 199812189021 Equipment (computer).
(assigned by Dove Management filed 12/18/1998
Ser, Inc.)
-------- ----------------------------------- ---------------------- --------------------------------------
13 Dove Management Ser, Inc. 199903109079 Office furniture.
filed 03/10/1999
-------- ----------------------------------- ---------------------- --------------------------------------
14 PNC Bank, National Association, 199905259067 Blanket lien.
as Agent(1) filed 05/25/1999
-------- ----------------------------------- ---------------------- --------------------------------------
15 Citicorp Del Lease, inc. 200005249009 Equipment (GENICLIFT)
filed 05/24/2000
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
20 Security Federal Savings & Loan 506390 Equipment
Association of Cleveland filed 07/11/1996
21052013 Continuation
filed 03/17/2001
-------- ----------------------------------- ---------------------- --------------------------------------
21 Security Federal Savings & Loan 509001 Equipment
Association of Cleveland filed 10/01/1996
21052913 Continuation
filed 04/10/2001
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
23 State of Ohio Department of 98-2416 Withholding Tax
Taxation filed 10/24/1997 $938.53
-------- ----------------------------------- ---------------------- --------------------------------------
24 State of Ohio Department of 98-4753 Withholding Tax
Taxation filed 04/24/1998 $4,176.54
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
30 Citizens Leasing Corporation 494/109 Equipment at 85 Xxxxxx Cake Xxxx
filed 00/00/0000 Xxxx, Xxxxxxxxxx, XX
-------- ----------------------------------- ---------------------- --------------------------------------
-2-
SECURED PARTY JURISDICTION TYPE OF UCC
------------- ------------ -----------
-------- ----------------------------------- ------------------------------ ---------------------------
31 Citizens Leasing Corporation Middletown City, RI Fixture
-------- ----------------------------------- ------------------------------ ---------------------------
32 Middletown City, RI Federal Tax lien
-------- ----------------------------------- ------------------------------ ---------------------------
--------------------------------------------------------------------------------------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
31 Citizens Leasing Corporation 494/218 Equipment at 85 Xxxxxx Cake Hill
filed 00/00/0000 Xxxx, Xxxxxxxxxx, XX
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
------------------------------------------------------------------------------------------------------------
NOTES:
1. This financing statement will be terminated pursuant to the PNC Bank,
National Association, pay-off letter to Advanced Lighting Technologies, Inc.
dated June 30, 2003.
-3-
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
ADLT REALTY CORP. I, INC.
SECURED PARTY JURISDICTION TYPE OF UCC
------------- ------------ -----------
-------- ----------------------------------- ------------------------------ ---------------------------
1 LaSalle National Bank, as Ohio S/S UCC-1
Trustee
-------- ----------------------------------- ------------------------------ ---------------------------
2 PNC Bank, National Association, Ohio S/S UCC-1
as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
3 LaSalle National Bank, as Cuyahoga County, OH UCC-1
Trustee
-------- ----------------------------------- ------------------------------ ---------------------------
4 PNC Bank, National Association, Cuyahoga County, OH UCC-1
as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
5 Cuyahoga County, OH State Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
6 Cuyahoga County, OH Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
7 Cuyahoga County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
8 Cuyahoga County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
---------------------------------------------------------------------------------------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 LaSalle National Bank, as AP0035069 Fixtures at property in Solon, Ohio.
Trustee filed 03/23/1998
-------- ----------------------------------- ---------------------- --------------------------------------
2 PNC Bank, National Association, AP0145782 Blanket lien.
as Agent(1) filed 05/24/1999
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
3 LaSalle National Bank, as 0000000 Fixtures at property in Solon, Ohio.
Trustee filed 03/11/1998
-------- ----------------------------------- ---------------------- --------------------------------------
4 PNC Bank, National Association, 199905259054 Blanket lien.
as Agent(1) filed 05/25/1999
-------- ----------------------------------- ---------------------- --------------------------------------
5 None None
-------- ----------------------------------- ---------------------- --------------------------------------
6 None None
-------- ----------------------------------- ---------------------- --------------------------------------
7 None None
-------- ----------------------------------- ---------------------- --------------------------------------
8 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
------------------------------------------------------------------------------------------------------------
NOTES:
1. Liens filed by PNC Bank, National Association, as Agent will be terminated
pursuant to the PNC Bank, National Association pay-off letter to Advanced
Lighting Technologies, Inc. dated June 30, 2003.
-1-
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
ADLT SERVICES, INC.
SECURED PARTY JURISDICTION TYPE OF UCC
------------- ------------ -----------
-------- ----------------------------------- ------------------------------ ---------------------------
1 PNC Bank, National Association, Ohio S/S UCC-1
as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
2 PNC Bank, National Association, Cuyahoga County, OH UCC-1
as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
3 Cuyahoga County, OH State Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
4 Cuyahoga County, OH Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
5 Cuyahoga County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
6 Cuyahoga County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
---------------------------------------------------------------------------------------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 PNC Bank, National Association, AP0145785 Blanket lien.
as Agent(1) filed 05/24/1999
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
2 PNC Bank, National Association, 199905259051 Blanket lien.
as Agent(1) filed 05/25/1999
-------- ----------------------------------- ---------------------- --------------------------------------
3 None None
-------- ----------------------------------- ---------------------- --------------------------------------
4 None None
-------- ----------------------------------- ---------------------- --------------------------------------
5 None None
-------- ----------------------------------- ---------------------- --------------------------------------
6 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
------------------------------------------------------------------------------------------------------------
NOTES:
1. Liens filed by PNC Bank, National Association, as Agent will be terminated
pursuant to the PNC Bank, National Association pay-off letter to Advanced
Lighting Technologies, Inc. dated June 30, 2003.
-1-
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
APL ENGINEERED MATERIALS, INC.
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
1 The Champaign National Illinois S/S UCC-1
Bank
UCC-3 Continuation
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
2 PNC Bank, National Illinois S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
3 Illinois S/S Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
4 Champaign County, IL State Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
5 Champaign County, IL Judgment liens.
-------- ----------------------------------- ------------------------------ ---------------------------
6 Champaign County, IL Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
7 Champaign County, IL Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
8 Ohio S/S UCC
-------- ----------------------------------- ------------------------------ ---------------------------
9 Cuyahoga County, OH UCC
-------- ----------------------------------- ------------------------------ ---------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx Xxxxxxxx Xxxxxx, XX Xxxxx tax lien
Taxation
-------- ----------------------------------- ------------------------------ ---------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx Xxxxxxxx Xxxxxx, XX Xxxxx tax lien
Taxation
-------- ----------------------------------- ------------------------------ ---------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx Xxxxxxxx Xxxxxx, XX Judgment lien
Taxation v. APL Engineered
Materials
-------- ----------------------------------- ------------------------------ ---------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx Xxxxxxxx Xxxxxx, XX Judgment lien
Taxation v. APL Engineered
Materials
-------- ----------------------------------- ------------------------------ ---------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 The Champaign National 2883308 Assignment of Rents for
Bank filed 08/14/1991 property in Champaign County,
Illinois.
3562595 Continued.
filed 07/09/1996
4349714 Continued.
filed 03/06/2001
-------- ----------------------------------- ---------------------- --------------------------------------
2 PNC Bank, National 4040182 Blanket lien.
Association, as Agent(1) filed 05/24/1999
-------- ----------------------------------- ---------------------- --------------------------------------
3 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
4 None None
-------- ----------------------------------- ---------------------- --------------------------------------
5 None None
-------- ----------------------------------- ---------------------- --------------------------------------
6 None None
-------- ----------------------------------- ---------------------- --------------------------------------
7 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
8 None None
-------- ----------------------------------- ---------------------- --------------------------------------
9 None None
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx 00000 $4,384.17
Taxation 04/21/1993 Corporate Franchise Tax.
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx XX00000000 $1,102.00
Taxation filed 11/15/1995 Corporate Franchise Tax.
-------- ----------------------------------- ---------------------- --------------------------------------
12 State of Ohio Department of 415/345A $4,384.17
Taxation v. APL Engineered 04/21/1993
Materials
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxxx xx Xxxx Xxxxxxxxxx xx XX-00-000000 $1,102.00
Taxation v. APL Engineered filed 11/15/1995
Materials
-------- ----------------------------------- ---------------------- --------------------------------------
-1-
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
14 Cuyahoga County, OH Fixture
-------- ----------------------------------- ------------------------------ ---------------------------
15 Cuyahoga County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
--------------------------------------------------------------------------------------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
------------------------------------------------------------------------------------------------------------
NOTES:
1. Liens filed by PNC Bank, National Association, as Agent will be terminated
pursuant to the PNC Bank, National Association pay-off letter to Advanced
Lighting Technologies, Inc. dated June 30, 2003.
-2-
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
BALLASTRONIX (DELAWARE), INC.
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
1 PNC Bank, National Delaware S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
2 Delaware S/S Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
3 Ohio S/S UCC
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
4 Cuyahoga County, OH UCC
-------- ----------------------------------- ------------------------------ ---------------------------
5 Cuyahoga County, OH State tax lien
-------- ----------------------------------- ------------------------------ ---------------------------
6 Cuyahoga County, OH Judgment lien
-------- ----------------------------------- ------------------------------ ---------------------------
7 Cuyahoga County, OH Fixture
-------- ----------------------------------- ------------------------------ ---------------------------
8 Cuyahoga County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 PNC Bank, National 9924928 Blanket lien.
Association, as Agent(1) filed 05/24/1999
-------- ----------------------------------- ---------------------- --------------------------------------
2 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
3 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
4 None None
-------- ----------------------------------- ---------------------- --------------------------------------
5 None None
-------- ----------------------------------- ---------------------- --------------------------------------
6 None None
-------- ----------------------------------- ---------------------- --------------------------------------
7 None None
-------- ----------------------------------- ---------------------- --------------------------------------
8 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
NOTES:
1. Liens filed by PNC Bank, National Association, as Agent will be terminated
pursuant to the PNC Bank, National Association pay-off letter to Advanced
Lighting Technologies, Inc. dated June 30, 2003.
-1-
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
DEPOSITION SCIENCES, INC.
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
1 Xxxxxxx Xxxxx Business California S/S UCC-1
Financial Service Inc.
UCC-3 Amendment
UCC-3
-------- ----------------------------------- ------------------------------ ---------------------------
2 New England Capital California S/S UCC-1
Corporation(2)
UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
3 The Manifest Group California S/S UCC-1
(assigned by Acceptance
Leasing)
-------- ----------------------------------- ------------------------------ ---------------------------
4 Trinity Capital Corporation California S/S UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
5 PNC Bank, National California S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
6 Safeco Credit Co. Inc. DBA California S/S UCC-1
SAFELINE Leasing
-------- ----------------------------------- ------------------------------ ---------------------------
7 Osram Gmbh California S/S UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
8 Osram Sylvania Inc. California S/S UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
9 California S/S State tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
10 California S/S Judgment liens.
-------- ----------------------------------- ------------------------------ ---------------------------
11 California S/S Federal tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
12 Sonoma County, CA State Tax lien.
-------- ----------------------------------- ------------------------------ ---------------------------
13 Sonoma County, CA Judgment liens.
-------- ----------------------------------- ------------------------------ ---------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 Xxxxxxx Xxxxx Business 93233934 Blanket lien.
Financial Service Inc. filed 11/19/1993
96052C0556 One piece of equipment added.
filed 02/20/1996
98159C0079 Continuation.
filed 06/04/1998
-------- ----------------------------------- ---------------------- --------------------------------------
2 New England Capital 93234944 Equipment lease.
Corporation(2) filed 11/19/1993
98245C0341 Continuation.
filed 08/31/1998
Terminated2
-------- ----------------------------------- ---------------------- --------------------------------------
3 The Manifest Group 9903360620 Equipment lease.
(assigned by Acceptance filed 01/26/1999
Leasing)
-------- ----------------------------------- ---------------------- --------------------------------------
4 Trinity Capital Corporation 9912461383 Equipment lease.
filed 04/28/1999
-------- ----------------------------------- ---------------------- --------------------------------------
5 PNC Bank, National 9914560603 Blanket lien.
Association, as Agent(1) filed 05/24/1999
-------- ----------------------------------- ---------------------- --------------------------------------
6 Safeco Credit Co. Inc. DBA 0107360009 Equipment lease (forklift).
SAFELINE Leasing filed 03/08/2001
-------- ----------------------------------- ---------------------- --------------------------------------
7 Osram Gmbh 0131260677 Equipment (Contract Machine)
filed 10/07/2001
-------- ----------------------------------- ---------------------- --------------------------------------
8 Osram Sylvania Inc. 0135360118 Equipment (Contract Machine)
filed 12/18/2001
-------- ----------------------------------- ---------------------- --------------------------------------
9 None None
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
12 2002-4471 Property Tax lien for $97.53.
filed 12/19/2002
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-1-
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
14 Sonoma County, CA Fixtures.
-------- ----------------------------------- ------------------------------ ---------------------------
15 Sonoma County, CA Federal Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
16 PNC Bank, National Ohio S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
17 Osram Sylvania Products, Ohio S/S UCC-1
Inc.
-------- ----------------------------------- ------------------------------ ---------------------------
18 PHILIPS GmbH Ohio S/S UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
19 PNC Bank, National Cuyahoga County, OH UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
20 Cuyahoga County, OH State tax lien
-------- ----------------------------------- ------------------------------ ---------------------------
21 Cuyahoga County, OH Judgment lien
-------- ----------------------------------- ------------------------------ ---------------------------
22 Cuyahoga County, OH Fixture
-------- ----------------------------------- ------------------------------ ---------------------------
23 Cuyahoga County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
--------------------------------------------------------------------------------------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
16 PNC Bank, National AP0145771 Blanket lien.
Association, as Agent(1) filed 05/24/1999
-------- ----------------------------------- ---------------------- --------------------------------------
17 Osram Sylvania Products, OH00046144210 Equipment (Coating Machine)
Inc. filed 03/07/2002
-------- ----------------------------------- ---------------------- --------------------------------------
18 PHILIPS GmbH OH00048638542 Equipment (DSI Microdyn M-117
filed 05/01/2002 Machine)
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
19 PNC Bank, National 199905259065 Blanket lien.
Association, as Agent(1) filed 05/25/1999
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
------------------------------------------------------------------------------------------------------------
NOTES:
1. Liens filed by PNC Bank, National Association, as Agent will be terminated
pursuant to the PNC Bank, National Association pay-off letter to Advanced
Lighting Technologies, Inc. dated June 30, 2003.
2. This financing statement was terminated by #63290, filed with the California
Secretary of State, however, the financing statement record still showed up as
an active lien in our search results. Please note that it has been terminated.
-2-
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
LIGHTING RESOURCES INTERNATIONAL, INC.
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
1 PNC Bank, National Ohio S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
2 PNC Bank, National Cuyahoga County, OH UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
3 Cuyahoga County, OH State tax lien
-------- ----------------------------------- ------------------------------ ---------------------------
4 Cuyahoga County, OH Judgment lien
-------- ----------------------------------- ------------------------------ ---------------------------
5 Cuyahoga County, OH Fixture
-------- ----------------------------------- ------------------------------ ---------------------------
6 Cuyahoga County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
7 PNC Bank, National Huron County, OH UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
8 Huron County, OH State tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
9 Huron County, OH Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
10 Huron County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
11 Huron County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
12 Sandusky County, OH UCC
-------- ----------------------------------- ------------------------------ ---------------------------
13 Sandusky County, OH State Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
14 Sandusky County, OH Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
15 Sandusky County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
16 Sandusky County, OH Federal Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
---------------------------------------------------------------------------------------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 PNC Bank, National AP0145784 Blanket lien.
Association, as Agent(1) filed 05/24/1999
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
2 PNC Bank, National 199905259052 Blanket lien.
Association, as Agent(1) filed 05/25/1999
-------- ----------------------------------- ---------------------- --------------------------------------
3 None None
-------- ----------------------------------- ---------------------- --------------------------------------
4 None None
-------- ----------------------------------- ---------------------- --------------------------------------
5 None None
-------- ----------------------------------- ---------------------- --------------------------------------
6 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
7 PNC Bank, National 000080976 Blanket lien.
Association, as Agent(1) filed 05/25/1999
-------- ----------------------------------- ---------------------- --------------------------------------
8 None None
-------- ----------------------------------- ---------------------- --------------------------------------
9 None None
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
------------------------------------------------------------------------------------------------------------
NOTES:
1. Liens filed by PNC Bank, National Association, as Agent will be terminated
pursuant to the PNC Bank, National Association pay-off letter to Advanced
Lighting Technologies, Inc. dated June 30, 2003.
-1-
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
MICROSUN TECHNOLOGIES, INC.
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
1 PNC Bank, National New Jersey S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
2 PNC Bank, National New Jersey S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
3 Xxxxxx County, NJ State Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
4 Xxxxxx County, NJ Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
5 Xxxxxx County, NJ Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
6 Xxxxxx County, NJ Federal Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
7 Associates Leasing, Inc. Ohio S/S UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
8 PNC Bank, National Ohio S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
9 PNC Bank, National Ohio S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
10 Associates Leasing, Inc. Cuyahoga County, OH UCC-1
-------- ----------------------------------- ------------------------------ ---------------------------
11 PNC Bank, National Cuyahoga County, OH UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
12 PNC Bank, National Cuyahoga County, OH UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 PNC Bank, National 01907564 Blanket lien.
Association, as Agent(1) filed 05/24/1999 *filed against Web Design
Associates, Inc. a d/b/a of
Microsun Technologies, Inc.
-------- ----------------------------------- ---------------------- --------------------------------------
2 PNC Bank, National 01907575 Blanket lien.
Association, as Agent(1) filed 05/24/1999 *filed against Microsun
Technologies, Inc. d/b/a Web
Design Associates, Inc.
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
3 None None
-------- ----------------------------------- ---------------------- --------------------------------------
4 None None
-------- ----------------------------------- ---------------------- --------------------------------------
5 None None
-------- ----------------------------------- ---------------------- --------------------------------------
6 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
7 Associates Leasing, Inc. AP0019296 Equipment lease.
filed 01/21/1998
-------- ----------------------------------- ---------------------- --------------------------------------
8 PNC Bank, National XX0000000 Blanket lien.
Association, as Agent(1) filed 05/24/1999 *filed against Microsun
Technologies, Inc. d/b/a Web
Design Associates, Inc.
-------- ----------------------------------- ---------------------- --------------------------------------
9 PNC Bank, National AP0145776 Blanket lien.
Association, as Agent(1) filed 05/24/1999 *filed against Web Design
Associates, Inc. a d/b/a of
Microsun Technologies, Inc.
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
10 Associates Leasing, Inc. 1408863 Equipment lease.
filed 01/26/1998
-------- ----------------------------------- ---------------------- --------------------------------------
11 PNC Bank, National 199905259061 Blanket lien.
Association, as Agent(1) filed 05/25/1999 *filed against Microsun
Technologies, Inc. d/b/a Web
Design Associates, Inc.
-------- ----------------------------------- ---------------------- --------------------------------------
12 PNC Bank, National 199905259060 Blanket lien.
Association, as Agent(1) filed 05/24/1999 *filed against Web Design
Associates, Inc. a d/b/a of
Microsun Technologies, Inc.
-------- ----------------------------------- ---------------------- --------------------------------------
-1-
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
13 Cuyahoga County, OH State tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
14 Cuyahoga County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
15 Cuyahoga County, OH Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
16 Cuyahoga County, OH Federal Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
17 PNC Bank, National Portage County, OH UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
18 PNC Bank, National Portage County, OH UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
19 Portage County, OH State Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
20 Portage County, OH Judgment liens.
-------- ----------------------------------- ------------------------------ ---------------------------
21 Portage County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
22 Portage County, OH Federal Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
--------------------------------------------------------------------------------------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
17 PNC Bank, National 134563 Blanket lien.
Association, as Agent(1) filed 05/25/1999* *filed against Microsun
date is illegible. Technologies, Inc. d/b/a Web
Design Associates, Inc.
-------- ----------------------------------- ---------------------- --------------------------------------
18 PNC Bank, National 134562 Blanket lien.
Association, as Agent(1) filed 05/25/1999* *filed against Web Design
date is illegible. Associates, Inc. a d/b/a of
Microsun Technologies, Inc.
-------- ----------------------------------- ---------------------- --------------------------------------
19 None None
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
------------------------------------------------------------------------------------------------------------
NOTES:
1. Liens filed by PNC Bank, National Association, as Agent will be terminated
pursuant to the PNC Bank, National Association pay-off letter to Advanced
Lighting Technologies, Inc. dated June 30, 2003.
-2-
SUMMARY OF OFFICIAL UCC SEARCH RESULTS
VENTURE LIGHTING INTERNATIONAL, INC.
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
1 PNC Bank, National California S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
2 California S/S State Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
3 California S/S Judgment liens.
-------- ----------------------------------- ------------------------------ ---------------------------
4 California S/S Federal Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
5 Orange County, CA State Tax liens
-------- ----------------------------------- ------------------------------ ---------------------------
6 Orange County, CA Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
7 Orange County, CA Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
8 Orange County, CA Federal Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
-------- ----------------------------------- ------------------------------ ---------------------------
9 General Electric Company, Ohio S/S UCC-1
GE Lighting
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
10 Osram Sylvania Inc. Ohio S/S UCC-1
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
11 Security Federal Savings & Ohio S/S UCC-1
Loan Association of
Cleveland
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
12 Security Federal Savings & Ohio S/S UCC-1
Loan Association of
Cleveland
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
13 PNC Bank, National Ohio S/S UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
1 PNC Bank, National 0000000000 Blanket lien.
Association, as Agent(1) filed 05/25/1999
-------- ----------------------------------- ---------------------- --------------------------------------
2 None None
-------- ----------------------------------- ---------------------- --------------------------------------
3 None None
-------- ----------------------------------- ---------------------- --------------------------------------
4 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
5 None None
-------- ----------------------------------- ---------------------- --------------------------------------
6 None None
-------- ----------------------------------- ---------------------- --------------------------------------
7 None None
-------- ----------------------------------- ---------------------- --------------------------------------
8 None None
-------- ----------------------------------- ---------------------- --------------------------------------
-------- ----------------------------------- ---------------------- --------------------------------------
9 General Electric Company, AK61791 Light bulbs and other lighting
GE Lighting filed 11/29/1993 equipment and inventory.
19982020012 Continued.
filed 07/13/1998
-------- ----------------------------------- ---------------------- --------------------------------------
10 Osram Sylvania Inc. AM00016 Inventory incl. light bulbs.
filed 07/13/1995 (Illegible)
20001270005 Continued.
filed 05/04/2000
-------- ----------------------------------- ---------------------- --------------------------------------
11 Security Federal Savings & AM88264 Equipment.
Loan Association of filed 07/15/1996
Cleveland
20011170266 Continued.
filed 03/12/2001
-------- ----------------------------------- ---------------------- --------------------------------------
12 Security Federal Savings & AN08873 Equipment (flare machine)
Loan Association of filed 10/07/1996
Cleveland
20011310274 Continued.
filed 04/10/2001
-------- ----------------------------------- ---------------------- --------------------------------------
13 PNC Bank, National AP0147162 Blanket lien.
Association, as Agent(1) filed 05/25/1999
-------- ----------------------------------- ---------------------- --------------------------------------
-1-
SECURED PARTY JURISDICTION TYPE OF SEARCH
------------- ------------ --------------
-------- ----------------------------------- ------------------------------ ---------------------------
14 General Electric Company, Cuyahoga County, OH UCC-1
GE Lighting
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
15 Osram Sylvania Inc. Cuyahoga County, OH UCC-1
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
16 Security Federal Savings & Cuyahoga County, OH UCC-1
Loan Association of
Cleveland
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
17 Security Federal Savings & Cuyahoga County, OH UCC-1
Loan Association of
Cleveland
UCC-3 Continuation
-------- ----------------------------------- ------------------------------ ---------------------------
18 PNC Bank, National Cuyahoga County, OH UCC-1
Association, as Agent(1)
-------- ----------------------------------- ------------------------------ ---------------------------
19 Cuyahoga County, OH State tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
20 Cuyahoga County, OH Fixtures
-------- ----------------------------------- ------------------------------ ---------------------------
21 Cuyahoga County, OH Judgment liens
-------- ----------------------------------- ------------------------------ ---------------------------
22 Cuyahoga County, OH Federal Tax liens.
-------- ----------------------------------- ------------------------------ ---------------------------
--------------------------------------------------------------------------------------------------------
FILING NO./
SECURED PARTY FILING DATE DESCRIPTION OF FILING
------------- ----------- ---------------------
-------- ----------------------------------- ---------------------- --------------------------------------
14 General Electric Company, 1266087 Light bulbs and other lighting
GE Lighting filed 11/29/1993 equipment and inventory;
Accounts Receivable, proceeds
1426511 Continued.
filed 07/14/1998
-------- ----------------------------------- ---------------------- --------------------------------------
15 Osram Sylvania Inc. 1317922 Light bulbs and other lighting
filed 07/13/1995 equipment and inventory;
Accounts Receivable, proceeds
200005039068 Continued.
filed 05/03/2000
-------- ----------------------------------- ---------------------- --------------------------------------
16 Security Federal Savings & 1349903 Equipment.
Loan Association of filed 07/23/1996
Cleveland
200103219045 Continued.
filed 03/21/2001
-------- ----------------------------------- ---------------------- --------------------------------------
17 Security Federal Savings & 1355917 Equipment (flare machine)
Loan Association of filed 10/07/1995
Cleveland
200104109107 Continued.
filed 04/10/2001
-------- ----------------------------------- ---------------------- --------------------------------------
18 PNC Bank, National 199905269032 Blanket lien.
Association, as Agent(1) filed 05/26/1999
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
00 Xxxx Xxxx
-------- ----------------------------------- ---------------------- --------------------------------------
------------------------------------------------------------------------------------------------------------
NOTES:
1. Liens filed by PNC Bank, National Association, as Agent will be terminated
pursuant to the PNC Bank, National Association pay-off letter to Advanced
Lighting Technologies, Inc. dated June 30, 2003.
-2-
SCHEDULE X-0
XXXXX XX CASH COLLATERAL
PNC Bank, National Association, has also issued a letter of credit in relation
to Venture Lighting Europe Limited's directors' credit cards in Favor of
Barclay's Bank, Expiring May 21, 2004 $64,350 (L39,000).
SCHEDULE R-1
REAL PROPERTY
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxxxx X0X 0X0
Xxxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
SCHEDULE 2.7(a)
CASH MANAGEMENT BANKS
PNC Bank, National Association
1 PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Westamerica Bank
Xxxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000
SCHEDULE 2.7(b)
CASH MANAGEMENT ACCOUNTS
ADVANCED LIGHTING TECHNOLOGIES, INC.
PNC Bank, National Association
Account #8011369184
PNC Bank, National Association
Account #0000000000
APL ENGINEERED MATERIALS, INC.
PNC Bank, National Association
Account #771032 (lockbox deposited into ADLT's collection account #8011369184)
DEPOSITION SCIENCES, INC.
Westamerica Bank
Account #0404140972
PNC Bank, National Association
Account #0000000000 and #910758 (lockbox deposited into DSI's collection account
#0000000000)
VENTURE LIGHTING INTERNATIONAL, INC.
PNC Bank, National Association
Account #2533 (lockbox deposited into ADLT's collection account #8011369184)
BALLASTRONIX (DELAWARE), INC.
None.
MICROSUN TECHNOLOGIES, INC.
None.
LIGHTING RESOURCES INTERNATIONAL, INC.
None.
ADLT SERVICES, INC.
None.
SCHEDULE 2.7(d)
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC.
CASH MANAGEMENT BANK/ACCOUNTS
Royal Bank of Canada
Truro, Nova Scotia
Account #100 0000
Xxxxx Xxxx xx Xxxxxx
Xxxxx, Xxxx Xxxxxx
Account #400 1095
SCHEDULE 2.7(e)
UK GUARANTORS
CASH MANAGEMENT BANK/ACCOUNTS
VENTURE LIGHTING EUROPE LIMITED
Barclays Bank plc
Hanover Square Corporate Banking Centre
P.O. Box 15163H
00 Xxxx Xxxx
Xxxxxx XX0 0XX
Account #00000000
Barclays Bank plc
Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx
X.X. Xxx 00000X
00 Xxxx Xxxx
Xxxxxx XX0 0XX
Account #00000000
Barclays Bank plc
Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx
X.X. Xxx 00000X
00 Xxxx Xxxx
Xxxxxx XX0 0XX
Account #00000000
PARRY POWER SYSTEMS LIMITED
None.
SCHEDULE 5.5
LOCATIONS OF INVENTORY AND EQUIPMENT
ADVANCED LIGHTING TECHNOLOGIES, INC.
None.
APL ENGINEERED MATERIALS, INC.
0000 Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
GE Lighting Ltd.
Xxxxxx Xxxx
Xxxxxxxxx XX0 0XX, Xxxxxxx
Osram Sylvania Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
GE Hungary XX
Xxxx Ut 77
1340 Xxxxxxxx X-0000
Xxxxxxx
GE Lighting
Ravenna Lamp Plant #3949
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Philips Lighting Company
0000 Xxxxx 00
Xxxx, Xxx Xxxx 00000
Mido Elphan Building
0/X 0-00 Xxxxxxx Xxxxx
0 Xxxxxx Xxxx-Xx
Xxxxx, Xxxxx 541-0059
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Own Your Own Storage Condos
0000 X. Xxxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
VENTURE LIGHTING INTERNATIONAL, INC.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
0000 Xxxxx Xxxxxxx, Xxxx X
Xxxxxx, Xxxxxxxxxx 00000-0000
Parcel 00
Xxxxxxx Xxxxxxxxxx Xxxx
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx
Xxxxxxx Sales Company
000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
CEW Lighting
00000 Xxxxx Xxxx
Xxxxxx, Xxxxx 00000
CEW Lighting
0000 X. Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Nevada Sales
0000 Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Duraguard Products
00000 XX Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Lighting & Electrical Assoc.
3925 North X-00 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000-0000
Fiberstars, Inc.
00000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Diversified Electrical Sales
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Kenall
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Gigar Sales Agency, Inc.
0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx, X-000
Xxx Xxxxx, Xxxxxx 00000
North Star Lighting
0000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Innovative Lighting Systems
000 Xxxx Xxxxx Xxxxxxxx, Xxxxx X
Xxxxxxxxxx, Xxxx 00000
SL Fixture Manufacturing
0000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
X X Xxxxxxx Company
N. 00 Xxxx 00000 Xxxxxxx X
Xxxxxx, Xxxxxxxxx 00000
QSSI/Pacific Die Cast Inc.
0000 Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx, Inc.
00 Xxxxxxxxxxx Xxxxxxxx
Xxxxxxxx, Xxx Xxxxxxxxx 00000
QSSI/Pacific Die
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxx 00000
Widelite
Division of Genlyte Companies
000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxxxx, Xxxxx 00000
00X Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxxxxx 00000
BALLASTRONIX (DELAWARE), INC.
None.
MICROSUN TECHNOLOGIES, INC.
None.
LIGHTING RESOURCES INTERNATIONAL, INC.
None.
ADLT SERVICES, INC.
None.
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC.
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxxxx X0X 0X0
Xxxxxx
0000 Xxxxxxx Xxxx, Xxxxx 0 & 0
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Ruud Lighting, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Xxxxx Sports Lighting
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000-0000
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Hydrofarm Gardening Products
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxx Business Inc.
00 Xxxxx Xxxxxx Xxxx 0
Xxxxxxx, XX
X0X 0X0
PARRY POWER SYSTEMS LIMITED
None.
VENTURE LIGHTING EUROPE LIMITED
Xxxxxxxx Xxxxx
Draycott, Xxxxx XX00 0XX
Xxxxxx Xxxxxxx
X.X. Xxxxxxx Ltd
Xxxxxx Xxxx, Xxxxxxxxx
Xxxxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Southgate Lighting Ltd.
Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxx
Xxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Whitecroft Lighting Ltd.
Burlington Street
Ashton Under Lyne
Xxxxxxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Venture Lighting International PTY
Suite 134
Postnet Bag X18
Tokai 0000
Xxxx Xxxx
Xxxxx Xxxxxx
Venture Lighting International FZE
XX Xxx 00000
Jebel Ali Free Zone
Dubai
UAE
DEPOSITION SCIENCES, INC.
0000 Xxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
ADLT REALTY CORP. I, INC.
None.
SCHEDULE 5.7
CHIEF EXECUTIVE OFFICE AND FEIN
ADVANCED LIGHTING TECHNOLOGIES, INC. (OHIO CORPORATION)
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
FEIN: 00-0000000
ADLT SERVICES, INC. (OHIO CORPORATION)
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
FEIN: None
APL ENGINEERED MATERIALS, INC. (ILLINOIS CORPORATION)
0000 Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
FEIN: 00-0000000
BALLASTRONIX (DELAWARE), INC. (DELAWARE CORPORATION)
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
FEIN: 00-0000000
DEPOSITION SCIENCES, INC. (OHIO CORPORATION)
0000 Xxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
FEIN: 00-0000000
LIGHTING RESOURCES INTERNATIONAL, INC. (OHIO CORPORATION)
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
FEIN: 00-0000000
MICROSUN TECHNOLOGIES, INC. (OHIO CORPORATION)
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
FEIN: 00-0000000
VENTURE LIGHTING INTERNATIONAL, INC. (OHIO CORPORATION)
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
FEIN: 00-0000000
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC. (NOVA SCOTIA CORPORATION)
00 Xxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxxxx X0X 0X0
Xxxxxx
Canadian FEIN: 87592 7766 RC0002
PARRY POWER SYSTEMS LIMITED (UK CORPORATION)
Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxx XX00 0XX
XX FEIN: 532/44599/67620
VENTURE LIGHTING EUROPE LIMITED (UK CORPORATION)
Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxx XX00 0XX
XX FEIN: 532/88585/08886
SCHEDULE 5.8(b)
CAPITALIZATION OF BORROWERS
SHARES
LOAN PARTY SHARES ISSUED AND
(US) JUR. CLASS AUTHORIZED OUTSTANDING
----------------------------------------------------------------------------------------------------
Advanced Lighting OH Common 80,000,000 23,803,985 (6/2/03)
Technologies, Inc.
("ADLT") Preferred 1,000,000 761,250
ADLT Services, Inc. OH Common 850 100
APL Engineered Materials, IL Common 127,273 68,515
Inc. ("APL")
Ballastronix (Delaware), DE Common 1,500 100
Inc.
Lighting Resources OH Common 750 10
International, Inc.
Microsun Technologies, OH Common 1,000 100
Inc.
Venture Lighting OH Common 10,000 6,000
International, Inc.
("VLI")
SHARES
LOAN PARTY SHARES ISSUED AND
(FOREIGN) JUR. CLASS AUTHORIZED OUTSTANDING
----------------------------------------------------------------------------------------------------
Parry Power Systems UK Ordinary 1,000 10
Limited
Venture Lighting Europe UK Ordinary 100,000 of L0.01 each 200
Ltd.
Red. "A" 19,999,000 of L1 each 5,500,000
Preference
10,000,000 of L1 each
Red. "B" 9,640,591
Preference
Venture Lighting Power Nova Common 10,000,000 20,000
Systems, North America Scotia,
Inc. Canada
SHARES
SUBSIDIARY SHARES ISSUED AND
(US) JUR. CLASS AUTHORIZED OUTSTANDING
------------------------------------------------------------------------------------------------------
ADLT Realty Corp. I, Inc. OH Common 850 100
Advanced Lighting OH Common 850 100
Technologies Australia,
Inc.
Advanced Cable Lite OH Common 850 100
Corporation
Deposition Sciences, Inc. OH Common 100,000,000 50,000,000
Preferred 10,000,000 0
Unison Fiber Optic DE Membership 100% 100%
Lighting Systems, LLC Interests (uncertificated) (uncertificated)
SHARES
SUBSIDIARY SHARES ISSUED AND
(FOREIGN) JUR. CLASS AUTHORIZED OUTSTANDING
---------------------------------------------------------------------------------------------------
ADLT Logistics Limited UK Ordinary 1,000 2
Advanced Lighting Ontario, Common: Unlimited 9,000,000
Technologies, Canada Inc. Canada
1 Preferred: Unlimited 1,000,000
2 Preferred: 4,000 None
Advanced Lighting UK Ordinary 1,000 of L1 each 12
Technologies Europe,
Limited
Red. "A"
Preference 19,999,000 of L1 each 5,500,000
Red. "B"
Preference 10,000,000 L1 each 9,640,591
Advanced Lighting New Ordinary 10 10
Technologies (NZ) Ltd. Zealand
APL Japan Co. Limited Japan Common 800 1
Lampway Direct Pty. Australia Ordinary 10,000 2
Limited
Lighting Resources Mauritias Ordinary 10 10
Holdings (Mauritias)
Limited
Venture Lighting India India Equity Auth. Capital (Rs.)
Limited Shares 14,50,00,000
Shares:
1,45,00,000 1,41,78,640
Venture Power Systems India Equity Auth. Capital (rs.):
Private, Limited Shares 50,00,000
Shares:
5,00,000 4,78,500
Venture Lighting South Singapore Ordinary 100,000 100,000
East Asia Pty Limited
Venture Lighting Dubai, Ordinary 1,000,000 1,000,000
International FZE UAE (UAE Dirhams) (UAE Dirhams)
Venture Lighting South Ordinary 1,000 60
International Pty Limited Africa
Ruud Lighting Europe UK Ordinary 1,000 2
Limited
SCHEDULE 5.8(c)
CAPITALIZATION OF BORROWERS' SUBSIDIARIES
I. SUBSIDIARIES
LOAN PARTY:
ADVANCED LIGHTING TECHNOLOGIES, INC.
SHARES
PLACE SHARES OWNED
OF SHARES ISSUED & DIRECTLY/
SUBSIDIARY ORG. AUTHORIZED OUTSTDG. INDIRECTLY (%)
------------------------------------------------------------------------------------------------------------------
UNITED STATES:
ADLT Realty Corp. I, Inc. OH 850 100 100 100%
ADLT Services, Inc. OH 850 100 100 100%
Advanced Lighting OH 850 100 100 100%
Technologies Australia,
Inc.
Ballastronix (Delaware), DE 1,500 100 100 100%
Inc.
Deposition Sciences, Inc. OH Common: Common: Common: 100%
100,000,000 50,000,000 50,000,000
Preferred: Preferred: Preferred:
10,000,000 0 0
Microsun Technologies, OH 1,000 100 100 100%
Inc.
Venture Lighting OH 10,000 6,000 6,000 100%
International, Inc.
FOREIGN:
ADLT Logistics Limited UK 1,000 2 2 100%
Advanced Lighting UK Ordinary of L1 12 12 100%
Technologies Europe Ltd. each: 1,000
Red. "A" Preference of 5,500,000 5,500,000
L1 each: 19,900,000
Red. "B" of L1 each 9,640,591 9,640,591
Preference: 10,000,000
Advanced Lighting New 10 10 10 100%
Technologies (NZ) Ltd. Zealand
Lampway Direct Pty. AUS 10,000 2 2 100%
Limited
Lighting Resources Mauritias 10 10 10 100%
Holdings (Mauritias)
Limited
Parry Power Systems UK 1,000 10 10 100%
Limited
Venture Lighting UK Ordinary: 200 200 100%
Europe Ltd. 100,000 of
L0.01 each
Red. "A"
Preference of 5,500,000 5,500,000
L1 each:
19,999,000
Red. B Preference 9,640,591 9,640,591
L1 each:
10,000,000
Venture Lighting India India Capital (Rs) 89%
Limited 14, 50,00,000
Shares
1,45,00,000 1,41,78,640 1,26,22,070
Venture Lighting South Singapore 100,000 100,000 100,000 100%
East Asia Pty Limited
Venture Lighting Dubai (UAE) 1,000,000 (UAE 1,000,000 (UAE 1,000,000 (UAE 100%
International FZE Dirhams) Dirhams) Dirhams)
Venture Lighting South 1,000 60 60 100%
International Pty Limited Africa
Venture Lighting Power Nova 10,000,000 20,000 20,000 100%
Systems, North America Scotia,
Inc. Canada
Ruud Lighting Europe UK 1,000 of L1 2 2 100%
Limited each
LOAN PARTY:
VENTURE LIGHTING INTERNATIONAL, INC.
SHARES
PLACE SHARES OWNED
OF SHARES ISSUED & DIRECTLY/
SUBSIDIARY ORG. AUTHORIZED OUTSTDG. INDIRECTLY (%)
---------------------------------------------------------------------------------------------------------
UNITED STATES:
Advanced Cable Lite OH 850 100 100 100%
Corporation
APL Engineered Materials, IL 127,273 68,515 68,515 100%
Inc.
Lighting Resources OH 750 10 10 100%
International, Inc.
Unison Fiber Optic DE Membership 100% 100% 100%
Lighting Systems LLC Interests
(LLC)
FOREIGN:
Advanced Lighting Ontario, Common: Common: Common: 100%
Technologies, Canada Inc. Canada (unlimited) 9,000,000 9,000,000
1 Preferred: 1 Preferred: 1 Preferred:
(unlimited) 1,000,000 1,000,000
2 Preferred 2 Preferred: 2 Preferred:
4,000 None None
Venture Power Systems India Capital (Rs) 100%
Private, Ltd. 50,00,000
Shares
5,00,000 4,78,500 4,78,500
LOAN PARTY:
APL ENGINEERED MATERIALS, INC.
SHARES
PLACE SHARES OWNED
OF SHARES ISSUED & DIRECTLY/
SUBSIDIARY ORG. AUTHORIZED OUTSTDG. INDIRECTLY (%)
---------------------------------------------------------------------------------------------------------
APL Japan Co., Ltd. Japan 800 1 1 100%
*all shares are common or ordinary unless otherwise noted
THE FOLLOWING LOAN PARTIES DO NOT HAVE OWNERSHIP OF ANY "SUBSIDIARIES" AS THAT
TERM IS DEFINED IN THE AGREEMENT:
ADLT SERVICES, INC.
BALLASTRONIX (DELAWARE), INC.
LIGHTING RESOURCES INTERNATIONAL, INC.
MICROSUN TECHNOLOGIES, INC.
PARRY POWER SYSTEMS LIMITED
VENTURE LIGHTING EUROPE LTD.
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC.
SCHEDULE 5.8(c)
PART II. INVESTMENTS IN PERSONS OTHER THAN SUBSIDIARIES
1. ADVANCES, LOANS, GUARANTEES 6/04/2003
Principal
Company Advanced To Amount Description
------- ----------- ------ -----------
ADLT Xxxxx Xxxxxxx $12,789,350 Loan (Promissory Note)
ADLT Ruud Lighting $ 6,000,000 Loan (Promissory Note)
ADLT MHTI (BVI) $ 1,202,583 Advance
APL H & F V $ 220,000 Loan (Promissory Note)
2. INVESTMENTS 06/04/2003
Investment Book Value
---------- ----------
Fiberstars, Inc. $3,465,727
Unison (Fiberstars Warrants) $2,895,355
Hexagram, Inc. $1,600,581
Gesellschaft Fur Lichttechnische Erzeugnisse (GLE) $ 127,298
Shanghai Y & L Lighting $ 80,000
*As part of its purchasing agreement with its supplier of copper, Venture
Lighting Power Systems, North America Inc. purchases forward copper contracts
for approximately three (3) months at a time.
3. LETTERS OF CREDIT OUTSTANDING 06/04/2003
In Favor of Barclay's Bank, expiring May 21, 2004, for an aggregate face amount
of L39,000 (approximately $64,350) for the benefit of Parry Power Systems
Limited.
4. OBLIGATIONS TO LEND 06/04/2003
None.
SCHEDULE 5.10
LITIGATION
1. Gobble x. Xxxxxxx, Xxxxxx x. Xxxxxxx and In re Advanced Lighting
Technologies, Inc. Securities Litigation (U.S. District Court of the
Northern District of Ohio). These lawsuits, including shareholder class
actions and derivative suits, described in the Advanced Lighting
Technology, Inc.'s ("ADLT") Quarterly Report on Form 10-Q for the
quarter ended September 30, 2002, were dismissed with prejudice in mid
January 2003 based on the described settlement. The agreement called
for an $8.4 million payment by ADLT's insurance carriers. The
settlement agreement does not constitute an admission of wrongdoing.
Class Plaintiffs' counsel received a letter from Xxxxxx Xxxxxxx, who
obtained 571,429 shares of common stock in connection with ADLT's
acquisition of Ruud Lighting, Inc., stating that Xx. Xxxxxxx did not
believe he was a member of the class in the class action, but, if he
was, he was "opting out" of the class. ADLT has no information as to
whether Xx. Xxxxxxx intends to make a claim against ADLT.
2. The shareholders of Ruud Lighting, Inc. and ADLT have not completed the
settlement of the final purchase price pursuant to the agreement
pursuant to which ADLT sold Ruud Lighting, Inc. In addition, the
shareholders have made claims with respect to various alleged breaches
of warranty.
3. Xxxxxxx v. Venture Lighting International, Inc. and Xxxxxxx v. ADLT
Realty Corp. I, Inc. and related matters (Cuyahoga County Common Pleas
Court). In April 2002, Xxxxxxx Xxxxxxx, an employee of Venture Lighting
International, Inc. died from a fall at the Solon, Ohio facility.
Another employee was injured. The estate of Xx. Xxxxxxx has filed a
lawsuit related to this incident. Both companies intend to vigorously
dispute any allegation of negligence or wrongful intentional conduct in
connection with this matter. Neither company can predict whether this
lawsuit will result in a Material Adverse Change.
4. Secretary of Labor v. Venture Lighting International, Inc. Occupational
Safety and Health Administration of the US Department of Labor ("OSHA")
inspected the Solon office after the Xxxxxxx accident and issued
certain alleged violations related and unrelated to the accident. The
case never went before an administrative law judge, as a settlement
agreement was reached with the OSHA attorneys.
5. Venture Lighting International, Inc. Xxxxxxxx Xxxxxx (VSSR Claim). BWC
claim for fractured hand that occurred on July 19, 1999. BWC claim and
VSSR claim settled by the state for $250.00.
6. APL Engineered Materials, Inc. v. Taeshik Min (Court of the Sixth
Judicial Circuit, Champaign, Illinois). In December 2000, Min resigned
from APL after 20 years of employment. Min refused to execute an
agreement acknowledging his duty to maintain APL's proprietary
information in confidence. During the later part of his employment at
APL, Min was observed copying sensitive customer information, attempted
to access
several secured databases, and was observed making critical parts for
APL's particle formation process which remain unaccounted for. APL has
obtained a preliminary injunction against Min and discovery is
on-going.
7. Rebtex x. Xxxxxx Industries, Inc. and Venture Lighting International,
Inc. (United States District Court for the District of New Jersey).
This products liability case was settled.
8. Tanigawa x. Xxxx, et al. (United States District Court for the Northern
District of Ohio). This derivative suit was voluntarily dismissed by
plaintiffs.
9. A complaint was filed under the Labour Standards Code (Nova Scotia) on
November 13, 2002, against Venture Lighting Power Systems, North
America, Inc., in respect of a claim by a former employee, Xxxxx Xxxxx.
The employee was dismissed with cause, but is claiming an entitlement
to two weeks pay in lieu of notice of termination. Her gross weekly pay
at the time of her termination was $400/week. This matter is ongoing.
10. A complaint was filed under the Labour Standards Code (Nova Scotia) on
December 9, 2002, against Venture Lighting Power Systems, North
America, Inc., in respect of a claim by a former employee, Xxxxx Xxxxx.
The employee was dismissed with cause, but is claiming an entitlement
to two weeks pay in lieu of notice of termination. This matter is
ongoing.
11. A complaint was filed under the Labour Standards Code (Nova Scotia) on
February 12, 2003, against Venture Lighting Power Systems, North
America, Inc., in respect of a claim by a former employee, Xxxxx Xxx
Smiley. This matter is ongoing.
12. Xxxxxxx v. Venture Lighting International, Inc., civil lawsuit filed in
the U.S. District Court of the Northern District of Ohio on July 19,
1990. The last activity on record on the case was on August 1, 1990.
13. Rush v. Venture Lighting International, Inc., a workers compensation
lawsuit filed on January 22, 2003.
14. Xxx x. Venture Lighting International, Inc., a workers compensation
lawsuit filed on November 29, 2002.
15. Xxxxxx v. Venture Lighting International, Inc., a workers compensation
lawsuit filed on June 5, 2002.
16. Optical Coating Lab v. Deposition Sciences, Inc., a lawsuit filed in
the U.S. District Court of the Northern District of California on
August 31, 1990. The last activity on record on the case was on
September 8, 1994.
17. Venture Lighting Europe Limited received a claim from Industrial
Technische Verlichting B.V. relating to faulty goods. A settlement was
reached in 2002 between the parties on the basis of a payment of
275,000 Euros by Venture Lighting Europe Limited
in full and final settlement. Payment of the agreed settlement sum is
to be reached by the rebate of 20% on all goods supplied to Industria
Technische Verlichting B.V. until the agreed settlement figure has been
reached.
18. Rosdev Construction Inc. v. Spectro Electric Inc. and Advanced Lighting
Technologies, Canada Inc., Court File No: 97-CU-132880, Ontario
Superior Court. Case regarding Spectro Electric Inc. a now defunct
subsidiary of Advanced Lighting Technologies, Canada Inc. for breach of
lease and breach of agreement for termination of lease. Advanced
Lighting Technologies, Canada Inc. is an inactive subsidiary of VLI
with no substantial assets.
19. Deposition Sciences, Inc. x. Xxxxxxx et al., Case No. 226354 filed on
March 7, 2001. Deposition Sciences, Inc. ("DSI") sued former employees
Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxx Xxxx and Xxxxx Xxxxx for breach
of contract, interference with contract/business relations,
interference with prospective economic advantage, negligent
interference with prospective economic advantage, inducement to breach
contract and unfair competition. A preliminary injunction was issued
against the defendants preventing the individuals from working for the
company they formed called Sonoma Photonics, Inc. On June 29, 2001 the
parties entered into a Confidential Settlement Agreement, which called
for an initial payment of $800,000 and a second payment of $525,000 12
months later. Sonoma Photonics, Inc. was a party to the Confidential
Settlement Agreement and the first payment of such agreement was made.
However, the release did not release the individuals or Sonoma
Photonics, Inc. from claims of infringement or trade secret
misappropriation, but called for a trade secret audit to take place
prior to the commencement of any subsequent litigation. In 2002, Sonoma
Photonics, Inc. filed for bankruptcy due to its inability to make the
payment required under the Confidential Settlement Agreement. The case
has not been dismissed and is still pending until the Confidential
Settlement Agreement has been fully complied with. It is set for
further status conference in the fall of 2004.
20. DSI. filed a proof claim against Sonoma Photonics, Inc. in the case In
re Sonoma Photonics, Inc., Case No. 02-11633 in the United States
District Court for the Northern District of California. The proof of
claim arises from infringement of patents and misappropriation of trade
secrets. The proof of claim asserts that the damages are unliquidated
and estimated at $1,000,000. It only relates to pre-petition claims.
This is the adversary proceeding and DSI has requested that the
reference to the bankruptcy court on this claim be removed to district
court so the infringement and misappropriation claims can be litigated
in that forum as opposed to before a bankruptcy judge. The trade secret
audit called for under the Confidential Settlement Agreement was
concluded in January 2003.
21. Ruud Lighting, Inc. has incorporated certain of the Company's power
supply components into an innovative metal halide fixture. Although the
rate of failure of the Company's power supply components is consistent
with historical and industry failure rates, Ruud Lighting, Inc. has
advised the Company that it has received some complaints from customers
due to a particular mode of failure. Certain customers have requested
replacements to prevent any additional such failures. On May 29, 2003,
Ruud Lighting, Inc., filed a "contingent warranty" claim with the
Bankruptcy Court relating to replacements for all such fixtures and
estimated the total cost of these replacements to be approximately
$50,000,000. The Company believes the claim is without merit and
intends to vigorously contest any liability for the replacement of
these products.
22. DSI obtained a judgment against RTC Systems Limited ("RTC") in the
amount of $602,865.10. RTC failed to pay DSI the money on the date it
was due. DSI is seeking to enforce the judgment against RTC, and RTC
claims it has a counterclaim against DSI for approximately $1,600,000.
It is unclear whether RTC's claim has merit.
SCHEDULE 5.13
ASSETS OF NON-OPERATING BORROWERS
1. Ballastronix (Delaware), Inc.
a. Intellectual Property Identified as owned by Ballastronix (Delaware),
Inc. on Schedule 5.16
b. Intercompany Receivable from Venture Lighting Power Systems, North
America Inc. in the amount of $485,863 at May 31, 2003.
2. Microsun Technologies, Inc.- None
3. Lighting Resources International, Inc.
a. All of the Company's investment in Shanghai Y&L Lighting
b. Receivable from LR Holdings (BVI) in the amount of $525,074 at May 31,
2003
4. ADLT Services, Inc.- None
SCHEDULE 5.14
ENVIRONMENTAL MATTERS
1. In 1993, ADLT entered into a consent decree with the City of Solon
Sewer District ("Solon") with respect to the discharge of mercury into the sewer
system from its Solon, Ohio plant operations. ADLT instituted procedures to
comply with this consent decree, and the consent decree expired by its terms due
to ADLT's operation within required discharge limits for the period required by
the decree. However, routine sampling of the effluent between September 1995 and
September 1996 revealed instances of mercury discharge in excess of the limits
imposed by Solon. Subsequent tests conducted by Solon showed mercury discharges
within the required limits. ADLT implemented a plan intended to prevent
intermittently exceeding Solon's mercury standards in the future. ADLT believes
the cost of continued compliance will not have a material effect on its
financial position or results of operations.
2. Secretary of Labor v. Venture Lighting International, Inc. Occupational
Safety and Health Administration of the US Department of Labor ("OSHA")
inspected the Solon office after the Xxxxxxx accident and issued certain alleged
violations related and unrelated to the accident. The case never went before an
administrative law judge, as a settlement agreement was reached with the OSHA
attorneys.
3. The Nuclear Regulatory Commission ("NRC") issued a notice on December
18, 1995 to Venture Lighting International, Inc. under environmental law 10 CFR
2001. In connection with a routine audit in 1995, the NRC cited Venture Lighting
International, Inc. for two problems: (i) the enclosed box in which the metal
halide salts are stored included thorium. The citation states that one time an
employee discarded the air filter for the box without checking for radiation
(the checks routinely are negative and the filters are disposed of in the same
manner) and (ii) eight employees in the arc tube department were not wearing
radiation badges. Employees are now routinely required to wear badges, which are
tested monthly.
4. APL Engineered Materials was cited for a TSCA violation by the USEPA
(Region 5) related to improper labeling of hazardous chemicals on December 14,
1992. The matter (Docket: TSCA-V-C 009-93 BD050694T16) was settled as of January
18, 1994.
SCHEDULE 5.16
INTELLECTUAL PROPERTY
LIST OF PATENTS AND PATENT APPLICATIONS
ADVANCED LIGHTING TECHNOLOGIES, INC.
FILING ISSUE
COUNTRY SHORT TITLE SERIAL NO. DATE PATENT NO. DATE
----------------------------------------------------------------------------------------------------------------
U.S. Method Of Flushing Outer 09/973,916 10/11/01
Lamp Jackets
----------------------------------------------------------------------------------------------------------------
U.S. Coatings On Plasma Lamps 10/112,024 4/1/02
----------------------------------------------------------------------------------------------------------------
U.S. Coatings On Plasma Lamps 60/446,535 2/12/03
----------------------------------------------------------------------------------------------------------------
PCT Coatings On Plasma Lamps PCT/US02/09979 4/1/02
----------------------------------------------------------------------------------------------------------------
U.S. Helical Coil Resonator 10/112,349 4/1/02
----------------------------------------------------------------------------------------------------------------
U.S. Silver Amalgam 10/153,787 5/24/02
----------------------------------------------------------------------------------------------------------------
U.S. Thermal Protection Apparatus 60/446,252 2/11/03
----------------------------------------------------------------------------------------------------------------
U.S. Thermally Protected Ballast 60/448,144 2/20/03
----------------------------------------------------------------------------------------------------------------
U.S. Method Of Strengthening 09/434,462 11/5/99 6,284,165 9/4/01
Pellets
----------------------------------------------------------------------------------------------------------------
U.S. High Intensity Arc 08/354,425 12/12/94 5,539,271 7/23/96
Discharge Lamp
----------------------------------------------------------------------------------------------------------------
U.S. Auxiliary Lighting Control 08/600,262 2/12/96 5,896,013 4/20/99
----------------------------------------------------------------------------------------------------------------
U.S. Weldless Lamp Mount 09/534,443 3/24/00
----------------------------------------------------------------------------------------------------------------
Germany Weldless Lamp Mount 101 14 289.7 3/23/01
----------------------------------------------------------------------------------------------------------------
United Kingdom Weldless Lamp Mount 0030398.2 12/13/00
----------------------------------------------------------------------------------------------------------------
U.S. Low Halide Doses 09/801,653 3/9/01
----------------------------------------------------------------------------------------------------------------
PCT Low Halide Doses PCT/US01/07433 3/9/01
----------------------------------------------------------------------------------------------------------------
U.S. Horizontal Burning HID Lamps 09/597,547 6/19/00
Arc Tubes
----------------------------------------------------------------------------------------------------------------
Canada Horizontal Burning HID Lamps 2,350,981 6/18/01
and Arc Tubes
----------------------------------------------------------------------------------------------------------------
FILING ISSUE
COUNTRY SHORT TITLE SERIAL NO. DATE PATENT NO. DATE
-----------------------------------------------------------------------------------------------------------------
Europe Horizontal Burning HID Lamps 01114655.2 6/19/01
and Arc Tubes
-----------------------------------------------------------------------------------------------------------------
U.S. Auxiliary Lighting Control 08/899,881 7/24/97 6072286 6/6/00
-----------------------------------------------------------------------------------------------------------------
U.S. Zinc Amalgam 10/044,907 1/15/02
-----------------------------------------------------------------------------------------------------------------
U.S. Zinc Amalgam 08/299,292 9/1/94 6,339,287 1/15/02
-----------------------------------------------------------------------------------------------------------------
Brazil Zinc Amalgam Pl 9405796-6 8/10/95 Pl 9405796-6 5/15/01
-----------------------------------------------------------------------------------------------------------------
Germany Zinc Amalgam 69425559.9 5/3/95 69425559.9 8/16/00
-----------------------------------------------------------------------------------------------------------------
U.S. Zinc Amalgam 08/833,256 4/4/97 5882237 3/16/99
-----------------------------------------------------------------------------------------------------------------
France Zinc Amalgam 683919 5/4/95 683919 8/16/00
-----------------------------------------------------------------------------------------------------------------
United Kingdom Zinc Amalgam 683919 5/5/95 683919 8/16/00
-----------------------------------------------------------------------------------------------------------------
Japan Zinc Amalgam 518396 2/14/94 3027006 1/28/00
-----------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx Xxxx Xxxxxxx 000000 2/14/94 324090 1/29/02
-----------------------------------------------------------------------------------------------------------------
Netherlands Zinc Amalgam 683919 5/6/95 683919 8/16/00
-----------------------------------------------------------------------------------------------------------------
U.S. Barrier Coatings 60/424,714 11/8/02
-----------------------------------------------------------------------------------------------------------------
U.S. Power Supply For Gas 319217 2/21/95 5530321 6/25/96
Discharge Lamp
-----------------------------------------------------------------------------------------------------------------
U.S. Mercury Alloys As 09/832,875 4/12/01
Dispensers For Mercury For
Discharge Lamps
-----------------------------------------------------------------------------------------------------------------
Japan Mercury Alloys As 2001-576152 9/24/02
Dispensers For Mercury For
Discharge Lamps
-----------------------------------------------------------------------------------------------------------------
Korea Mercury Alloys As 2002-7013759 10/12/02
Dispensers For Mercury For
Discharge Lamps
-----------------------------------------------------------------------------------------------------------------
U.S. Halogen Lamps, Fill 09/782,204 2/14/01
Material And Method Of
Dosing Halogen Lamps
-----------------------------------------------------------------------------------------------------------------
PCT Halogen Lamps, Fill PCT/US02/04279 2/14/02
Material And Method Of
Dosing Halogen Lamps
-----------------------------------------------------------------------------------------------------------------
U.S. Strengthening Agent 08/702,031 8/23/96 5972442 10/26/99
-----------------------------------------------------------------------------------------------------------------
Europe Strengthening Agent 97935219.2 3/23/99
-----------------------------------------------------------------------------------------------------------------
Japan Strengthening Agent 10-510759 2/23/99
-----------------------------------------------------------------------------------------------------------------
FILING ISSUE
COUNTRY SHORT TITLE SERIAL NO. DATE PATENT NO. DATE
-----------------------------------------------------------------------------------------------------------------
U.S. Method Of Making Arc Tubes 09/597,549 6/19/00
-----------------------------------------------------------------------------------------------------------------
Canada Method Of Making Arc Tubes 2,350,997 6/18/01
-----------------------------------------------------------------------------------------------------------------
Europe Methods Of Improving The 01114654.5 6/19/01
Performance Of Horizontally
Burning HID Lamps
-----------------------------------------------------------------------------------------------------------------
U.S. Methods Of Improving The 09/597,548 6/19/00
Performance Of Horizontally
Burning HID Lamps
-----------------------------------------------------------------------------------------------------------------
Canada Methods Of Improving The 2,350,963 6/18/01
Performance Of Horizontally
Burning HID Lamps
-----------------------------------------------------------------------------------------------------------------
Europe Metal Halide Lamp And 01114656.0 6/19/01
Method For Making Such
-----------------------------------------------------------------------------------------------------------------
U.S. Oxidation Resistant Foil 60/424,338 11/7/02
-----------------------------------------------------------------------------------------------------------------
U.S. Tipless Arc Tubes 09/800,669 3/8/01
-----------------------------------------------------------------------------------------------------------------
PCT Tipless Arc Tubes PCT/US02/11053 4/9/02
-----------------------------------------------------------------------------------------------------------------
U.S. Efficient Directional 09/565,257 5/5/00 6,554,456 4/29/03
Lighting System
-----------------------------------------------------------------------------------------------------------------
U.S. High Pressure Tipless Arc 09/866,700 5/30/01 6,517,404 2/11/03
Tubes
-----------------------------------------------------------------------------------------------------------------
PCT High Pressure Tipless Arc PCT/US02/11052 4/9/02
Tubes
-----------------------------------------------------------------------------------------------------------------
U.S. Dimming System 09/227,831 1/11/99 6,271,635 8/7/01
-----------------------------------------------------------------------------------------------------------------
U.S. Electrodes For Single Ended 07/018,468 2/25/87 5055740 10/8/91
Arc Discharge Tubes
-----------------------------------------------------------------------------------------------------------------
U.S. Gear Pack 08/958,933 10/28/97 6022125 2/8/00
-----------------------------------------------------------------------------------------------------------------
Canada Gear Pack 2307666 10/27/98
-----------------------------------------------------------------------------------------------------------------
U.S. DC Ballast 09/695,257 10/25/00
-----------------------------------------------------------------------------------------------------------------
U.S. Gear Pack Design 09/078,976 11/5/97 DES 403,100 12/22/98
-----------------------------------------------------------------------------------------------------------------
China Gear Pack Design 98307670.7 5/4/98 Z98307670.7 5/26/99
-----------------------------------------------------------------------------------------------------------------
Germany Gear Pack Design M9804538.5 5/5/98 M9804538.5 11/16/98
-----------------------------------------------------------------------------------------------------------------
FILING ISSUE
COUNTRY SHORT TITLE SERIAL NO. DATE PATENT NO. DATE
-----------------------------------------------------------------------------------------------------------------
U.S. Metal Halide Lamps And 08/645,115 5/13/96 5924787 7/20/99
Method Of Manufacture
-----------------------------------------------------------------------------------------------------------------
U.S. Low Pressure Tipless Arc Not yet assigned 6/9/03
Tubes
-----------------------------------------------------------------------------------------------------------------
DEPOSITION SCIENCES, INC.
FILING ISSUE
COUNTRY SHORT TITLE SERIAL NO. DATE PATENT NO. DATE
------------------------------------------------------------------------------------------------------------------
U.S. Method And Apparatus For 60/436,658 12/30/02
Making Precision Optical
Filters Using A Sputter
Deposition
------------------------------------------------------------------------------------------------------------------
U.S. Method And Apparatus For 60/330,079 11/15/02
Adjusting The Pass
Bandwidth Of An Optical
Filter
------------------------------------------------------------------------------------------------------------------
U.S. Red, Orange, And Yellow 60/468,265 5/7/03
Emitting Lamp Burners With
Improved Color Purity And
Lumen Output
------------------------------------------------------------------------------------------------------------------
U.S. Masks For Improved Sputter 60/468,264 5/7/03
Deposition Uniformity On
Non-Planar Substrates
------------------------------------------------------------------------------------------------------------------
U.S. System And Method For 09/473980 12/29/99 6,485,616 11/26/02
Coating Substrates With
Improved Capacity And
Uniformity
------------------------------------------------------------------------------------------------------------------
U.S. Method For Making Pigment 07/274380 11/21/88 4,879,140 11/7/89
Flakes
------------------------------------------------------------------------------------------------------------------
U.S. An Optical Interference 08/753574 11/26/96 5,923,471 7/13/99
Coating Capable Of
Withstanding Severe
Temperature Environments
------------------------------------------------------------------------------------------------------------------
FILING ISSUE
COUNTRY SHORT TITLE SERIAL NO. DATE PATENT NO. DATE
------------------------------------------------------------------------------------------------------------------
Europe An Optical Interference 9794850.2 11/26/97
Coating Capable Of
Withstanding Severe
Temperature Environments
------------------------------------------------------------------------------------------------------------------
Japan An Optical Interference 98-524862 11/26/97
Coating Capable Of
Withstanding Severe
Temperature Environments
------------------------------------------------------------------------------------------------------------------
U.S. An Optical Interference 09/332,092 6/14/99 6,331,914 12/18/01
Coating Capable Of
Withstanding Severe
Temperature Environments
------------------------------------------------------------------------------------------------------------------
U.S. Apparatus And Method For A 08/388,191 2/13/95 6,402,902 6/11/02
Reliable Return Current
Path For Sputtering
Processes
------------------------------------------------------------------------------------------------------------------
Europe Apparatus And Method For A 96-906309.8 2/5/96
Reliable Return Current
Path For Sputtering
Processes
------------------------------------------------------------------------------------------------------------------
Japan Apparatus And Method For A 96-524999 2/5/96
Reliable Return Current
Path For Sputtering
Processes
------------------------------------------------------------------------------------------------------------------
U.S. Apparatus For Generating 08/371,195 1/11/95 5,714,009 2/3/98
Large Distributed Plasmas
By Means Of Plasma-Guided
Microwave Power
------------------------------------------------------------------------------------------------------------------
Europe Apparatus For Generating 96906164.7 1/11/96
Large Distributed Plasmas
By Means Of Plasma-Guided
Microwave Power
------------------------------------------------------------------------------------------------------------------
FILING ISSUE
COUNTRY SHORT TITLE SERIAL NO. DATE PATENT NO. DATE
------------------------------------------------------------------------------------------------------------------
Japan Apparatus For Generating 96-521819 1/11/96
Large Distributed Plasmas
By Means Of Plasma-Guided
Microwave Power
------------------------------------------------------------------------------------------------------------------
U.S. Apparatus For Reducing The 08/437,816 5/9/95 5,616,224 4/1/97
Intensity And Frequency Of
Arcs Which Occur During A
Sputtering Process
------------------------------------------------------------------------------------------------------------------
Europe Apparatus For Reducing The 96915638.9 5/8/96
Intensity And Frequency Of
Arcs Which Occur During A
Sputtering Process
------------------------------------------------------------------------------------------------------------------
Japan Apparatus For Reducing The 96-534243 5/8/96
Intensity And Frequency Of
Arcs Which Occur During A
Sputtering Process
------------------------------------------------------------------------------------------------------------------
U.S. Multi-Spectral Filter 728,724 7/11/91 5,164,858 11/17/92
------------------------------------------------------------------------------------------------------------------
U.S. Gemstones And Decorative 08/296,779 8/26/94 6,197,428 3/6/01
Objects Comprising A
Substrate And An Optical
Interference Film
------------------------------------------------------------------------------------------------------------------
U.S. Objects Comprising A 09/901,671 7/11/01
Substrate And Optical
Interference Film
------------------------------------------------------------------------------------------------------------------
U.S. Photocell Array With 5,072,109 12/10/91
Multi-Spectral Filter
------------------------------------------------------------------------------------------------------------------
U.S. Wear Resistant Transparent 08/869,621 4/16/92 5,234,769 8/10/93
Dielectric Coatings
------------------------------------------------------------------------------------------------------------------
U.S. System And Method Of 09/537,095 3/29/00
Coating Substrates And
Assembling Devices Having
Coated Elements
------------------------------------------------------------------------------------------------------------------
FILING ISSUE
COUNTRY SHORT TITLE SERIAL NO. DATE PATENT NO. DATE
-----------------------------------------------------------------------------------------------------------------
Japan Sputtering Device 139282/92 5/29/92
-----------------------------------------------------------------------------------------------------------------
Europe Sputtering Device 0516436 AZ 12/97
-----------------------------------------------------------------------------------------------------------------
U.S. Sputtering Device 08/428,612 4/25/95 5,849,162 12/15/98
-----------------------------------------------------------------------------------------------------------------
Europe Sputtering Device 96913025.1 4/23/96
-----------------------------------------------------------------------------------------------------------------
Japan Sputtering Device 96-532634 4/23/96
-----------------------------------------------------------------------------------------------------------------
U.S. Solar Cell Cover And Coating 08/972,372 11/18/97 6,107,564 8/22/00
-----------------------------------------------------------------------------------------------------------------
U.S. Apparatus And Process For 07/485,556 4/15/83 4,420,385 12/13/83
Sputter Deposition Of
Reacted Thin Films
-----------------------------------------------------------------------------------------------------------------
SCHEDULE 5.16
INTELLECTUAL PROPERTY
LIST OF REGISTERED TRADEMARKS AND TRADEMARK APPLICATIONS
ADVANCED LIGHTING TECHNOLOGIES, INC.
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
--------------------------------------------------------------------------------------------------------------------
U.S. AGRO-LUX 2,134,888 2/3/98 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. C and Design 2,248,816 6/1/99 Registered
--------------------------------------------------------------------------------------------------------------------
United Kingdom CORALUX 2,138,079 1/30/98 Registered
--------------------------------------------------------------------------------------------------------------------
Canada XXXXXXX XXXXX 507,825 2/9/99 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. DATALUX 2,369,013 7/18/00 Registered
--------------------------------------------------------------------------------------------------------------------
Norway DATALUX 192386 8/27/98 Registered
--------------------------------------------------------------------------------------------------------------------
Denmark DATALUX VR 020341998 5/8/98 Registered
--------------------------------------------------------------------------------------------------------------------
Germany DATALUX 39740603 10/28/97 Registered
--------------------------------------------------------------------------------------------------------------------
Australia DATALUX 745,041 9/26/97 Registered
--------------------------------------------------------------------------------------------------------------------
Hong Kong DATALUX 5440 4/1/97 Registered
--------------------------------------------------------------------------------------------------------------------
China DATALUX 1344424 12/14/99 Registered
--------------------------------------------------------------------------------------------------------------------
Taiwan DATALUX 821734 9/24/99 Registered
--------------------------------------------------------------------------------------------------------------------
New Zealand DATALUX 282741 4/1/97 Registered
--------------------------------------------------------------------------------------------------------------------
United Kingdom DATALUX 2143778 11/13/98 Registered
--------------------------------------------------------------------------------------------------------------------
China DESIGNER COLOR 3334543 10/14/02 Pending application
--------------------------------------------------------------------------------------------------------------------
U.S. DESIGNER COLOR 2,414,899 12/26/00 Registered
--------------------------------------------------------------------------------------------------------------------
Germany DESIGNER COLOR 39745124 1/20/98 Registered
--------------------------------------------------------------------------------------------------------------------
Spain DESIGNER COLOR 2126348 11/14/97 Registered
--------------------------------------------------------------------------------------------------------------------
Italy DESIGNER COLOR 812717 5/15/00 Registered
--------------------------------------------------------------------------------------------------------------------
France DESIGNER COLOR 97702082 4/10/98 Registered
--------------------------------------------------------------------------------------------------------------------
Finland DESIGNER COLOR 211,607 10/30/96 Registered
--------------------------------------------------------------------------------------------------------------------
Sweden DESIGNER COLOR 333813 11/19/99 Registered
--------------------------------------------------------------------------------------------------------------------
Norway DESIGNER COLOR 190,243 5/20/98 Registered
--------------------------------------------------------------------------------------------------------------------
Denmark DESIGNER COLOR VR 001331998 1/9/98 Registered
--------------------------------------------------------------------------------------------------------------------
Vietnam DESIGNER COLOR 33 686 4/3/00 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. E-LAMP 76/422,584 6/18/02 Pending application
--------------------------------------------------------------------------------------------------------------------
U.S. ENERGY MASTER 1,715,439 9/15/92 Registered
--------------------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
--------------------------------------------------------------------------------------------------------------------
U.S. ENERGY MASTER PLUS 2,171,151 7/7/98 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. EYE-MATCH 2,663,906 12/17/02 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. Globe Design 2,442,930 4/10/01 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. HIDIRECT and Design 2,424,348 1/30/01 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. IT'S A WHOLE NEW LIGHT 2,410,962 12/5/00 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. MICROSUN 2,099,921 9/23/97 Registered
--------------------------------------------------------------------------------------------------------------------
Canada MICROSUN 506,803 1/19/99 Registered
--------------------------------------------------------------------------------------------------------------------
United Kingdom MICROSUN 2143702 2/27/98 Registered
--------------------------------------------------------------------------------------------------------------------
Denmark MICROSUN VR050181997 11/21/97 Registered
--------------------------------------------------------------------------------------------------------------------
Germany MICROSUN 39740602 9/30/97 Registered
--------------------------------------------------------------------------------------------------------------------
Korea MICROSUN 434,474 12/19/98 Registered
--------------------------------------------------------------------------------------------------------------------
Australia MICROSUN 745,040 9/26/97 Registered
--------------------------------------------------------------------------------------------------------------------
New Zealand MICROSUN 282,742 9/25/97 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. Microsun Logo 2,103,892 10/7/97 Registered
--------------------------------------------------------------------------------------------------------------------
Canada Microsun Logo 516,304 9/14/99 Registered
--------------------------------------------------------------------------------------------------------------------
Norway Microsun Logo 189,020 3/19/98 Registered
--------------------------------------------------------------------------------------------------------------------
United Kingdom Microsun Logo 2143699 2/20/98 Registered
--------------------------------------------------------------------------------------------------------------------
Denmark Microsun Logo VR 050191997 11/21/97 Registered
--------------------------------------------------------------------------------------------------------------------
Germany Microsun Logo 39740600 1/16/97 Registered
--------------------------------------------------------------------------------------------------------------------
Korea Microsun Logo 434,475 12/19/98 Registered
--------------------------------------------------------------------------------------------------------------------
Australia Microsun Logo 745,039 9/27/97 Registered
--------------------------------------------------------------------------------------------------------------------
New Zealand Microsun Logo 282,743 9/25/97 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. OPTI-WAVE 76/422,581 6/18/02 Pending application
--------------------------------------------------------------------------------------------------------------------
China OPTI-WAVE 3334544 12/14/02 Pending application
--------------------------------------------------------------------------------------------------------------------
U.S. PERFORMANCE PLUS 2,167,386 6/23/98 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. PRO ARC 1,351,568 7/30/85 Registered
--------------------------------------------------------------------------------------------------------------------
Canada QUALITY PLUS 507,824 2/9/99 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. XXXXX-VOLT 76/422,582 6/18/02 Pending application
--------------------------------------------------------------------------------------------------------------------
U.S. SMARTPAC 2,241,770 4/27/99 Registered
--------------------------------------------------------------------------------------------------------------------
Canada SMARTPAC TMA 528,350 5/25/00 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. SMARTPAC and Design 2,223,069 2/9/99 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. SPORT 60 2,288,431 10/26/99 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. SUNMASTER 2,355,783 6/6/00 Registered
--------------------------------------------------------------------------------------------------------------------
Argentina SUNMASTER 2,151,651 12/16/99 Registered
--------------------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
--------------------------------------------------------------------------------------------------------------------
Australia SUNMASTER 762,320 11/19/97 Registered
--------------------------------------------------------------------------------------------------------------------
Benelux SUNMASTER 634,629 5/15/98 Registered
--------------------------------------------------------------------------------------------------------------------
Brazil SUNMASTER 8820760226 3/13/01 Registered
--------------------------------------------------------------------------------------------------------------------
Canada SUNMASTER 526,799 4/19/00 Registered
--------------------------------------------------------------------------------------------------------------------
Finland SUNMASTER 213557 3/31/99 Registered
--------------------------------------------------------------------------------------------------------------------
France SUNMASTER 98 732 663 5/15/98 Registered
--------------------------------------------------------------------------------------------------------------------
Germany SUNMASTER 39827526.2 7/17/98 Registered
--------------------------------------------------------------------------------------------------------------------
Xxxxx XXXXXXXXX XX00X 000000 5/11/98 Pending application
--------------------------------------------------------------------------------------------------------------------
Xxx Xxxxxxx XXXXXXXXX 000000 3/9/98 Registered
--------------------------------------------------------------------------------------------------------------------
Norway SUNMASTER 193,695 10/23/98 Registered
--------------------------------------------------------------------------------------------------------------------
Sweden SUNMASTER 336,700 4/20/00 Registered
--------------------------------------------------------------------------------------------------------------------
United Kingdom SUNMASTER 2167101 11/27/98 Registered
--------------------------------------------------------------------------------------------------------------------
Italy SUNMASTER + PLUS 841362 3/22/01 Registered
--------------------------------------------------------------------------------------------------------------------
Argentina SUNMASTER PLUS 2,151,652 12/16/99 Registered
--------------------------------------------------------------------------------------------------------------------
Australia SUNMASTER PLUS 762,319 3/9/98 Registered
--------------------------------------------------------------------------------------------------------------------
Benelux SUNMASTER PLUS 634,630 5/15/98 Registered
--------------------------------------------------------------------------------------------------------------------
Finland SUNMASTER PLUS 213558 3/31/99 Registered
--------------------------------------------------------------------------------------------------------------------
France SUNMASTER PLUS 98 732664 5/15/98 Registered
--------------------------------------------------------------------------------------------------------------------
Germany SUNMASTER PLUS 39827527 7/20/98 Registered
--------------------------------------------------------------------------------------------------------------------
New Zealand SUNMASTER PLUS 292359 11/19/97 Registered
--------------------------------------------------------------------------------------------------------------------
Norway SUNMASTER PLUS 193,696 10/23/98 Registered
--------------------------------------------------------------------------------------------------------------------
Sweden SUNMASTER PLUS 366,701 4/20/00 Registered
--------------------------------------------------------------------------------------------------------------------
United Kingdom SUNMASTER PLUS 2167004 11/13/98 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. THE WORLD'S WHITE LIGHT SOLUTION 2,621,662 9/17/02 Registered
--------------------------------------------------------------------------------------------------------------------
U.S. Triangle Design 2,276,319 9/7/99 Registered
--------------------------------------------------------------------------------------------------------------------
United Kingdom Triangle Design 2113517 7/25/97 Registered
--------------------------------------------------------------------------------------------------------------------
Germany Triangle Design 39645981 4/1/97 Registered
--------------------------------------------------------------------------------------------------------------------
Spain Triangle Design 2060749 11/29/96 Registered
--------------------------------------------------------------------------------------------------------------------
Spain Triangle Design 211229 9/4/97 Registered
--------------------------------------------------------------------------------------------------------------------
Italy Triangle Design 765,215 12/29/98 Registered
--------------------------------------------------------------------------------------------------------------------
France Triangle Design 96648591 10/30/96 Registered
--------------------------------------------------------------------------------------------------------------------
Japan Triangle Design 4124101 3/13/98 Registered
--------------------------------------------------------------------------------------------------------------------
Canada Triangle Design TMA 502,507 10/20/98 Registered
--------------------------------------------------------------------------------------------------------------------
Australia Triangle Design 720076 10/21/96 Registered
--------------------------------------------------------------------------------------------------------------------
New Zealand Triangle Design (Class 11) 268474 10/21/96 Registered
--------------------------------------------------------------------------------------------------------------------
New Zealand Triangle Design (Class 37) 268475 10/21/96 Registered
--------------------------------------------------------------------------------------------------------------------
New Zealand Triangle Design (Class 42) 268476 10/21/96 Registered
--------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
----------------------------------------------------------------------------------------------------------
India Triangle Design 757,860 5/1/97 Pending
application
----------------------------------------------------------------------------------------------------------
Korea Triangle Design (Class 39) 445,374 3/29/99 Registered
----------------------------------------------------------------------------------------------------------
Korea Triangle Design (Class 11) 47035 9/16/98 Registered
----------------------------------------------------------------------------------------------------------
Singapore Triangle Design (Class 11) T97/05096G 5/2/97 Registered
----------------------------------------------------------------------------------------------------------
Singapore Triangle Design (Class 37) T97/05094J 11/1/96 Registered
----------------------------------------------------------------------------------------------------------
Hong Kong Triangle Design B6015 12/8/97 Registered
----------------------------------------------------------------------------------------------------------
China Triangle Design 1201370 8/21/98 Registered
----------------------------------------------------------------------------------------------------------
United Arab Triangle Design 32458 6/23/02 Registered
Emirates
----------------------------------------------------------------------------------------------------------
Finland Triangle Design 210724 8/14/98 Registered
----------------------------------------------------------------------------------------------------------
Sweden Triangle Design 329,697 1/15/99 Registered
----------------------------------------------------------------------------------------------------------
Norway Triangle Design 183,361 4/8/98 Registered
----------------------------------------------------------------------------------------------------------
Denmark Triangle Design VR02.666 6/20/97 Registered
----------------------------------------------------------------------------------------------------------
Vietnam Triangle Design 33 694 4/3/00 Registered
----------------------------------------------------------------------------------------------------------
U.S. Triangle Design (in color) 2,396,124 10/17/00 Registered
----------------------------------------------------------------------------------------------------------
China UNI-FORM 3334542 10/14/02 Pending
application
----------------------------------------------------------------------------------------------------------
U.S. UNI-FORM 2,283,584 10/5/99 Registered
----------------------------------------------------------------------------------------------------------
Japan UNI-FORM 4348185 12/24/99 Registered
----------------------------------------------------------------------------------------------------------
Vietnam UNI-FORM 33 688 4/3/00 Registered
----------------------------------------------------------------------------------------------------------
Japan UNI-FORM (stylized) 4348184 12/24/99 Registered
----------------------------------------------------------------------------------------------------------
U.S. UNI-FORM (stylized) 2,283,585 10/5/99 Registered
----------------------------------------------------------------------------------------------------------
Germany UV GUARD 397 19 957 8/27/98 Registered
----------------------------------------------------------------------------------------------------------
Spain UV GUARD 2097866 12/22/97 Registered
----------------------------------------------------------------------------------------------------------
France UV GUARD 97 676,443 5/5/97 Registered
----------------------------------------------------------------------------------------------------------
Finland UV GUARD 210,835 8/31/98 Registered
----------------------------------------------------------------------------------------------------------
Denmark UV GUARD VR02.664 6/20/97 Registered
----------------------------------------------------------------------------------------------------------
U.S. UV SHIELD 2,396,198 10/17/00 Registered
----------------------------------------------------------------------------------------------------------
Canada UV SHIELD 573,381 1/10/03 Registered
----------------------------------------------------------------------------------------------------------
Vietnam UV SHIELD 35513 8/26/98 Registered
----------------------------------------------------------------------------------------------------------
U.S. VENTURE 1,707,980 8/18/92 Registered
----------------------------------------------------------------------------------------------------------
Japan VENTURE 4152386 6/5/98 Registered
----------------------------------------------------------------------------------------------------------
United VENTURE 1,470,183 7/10/98 Registered
Kingdom
----------------------------------------------------------------------------------------------------------
Vietnam VENTURE 33 687 4/3/00 Registered
----------------------------------------------------------------------------------------------------------
Japan VENTURE LIGHTING 4152387 6/5/98 Registered
----------------------------------------------------------------------------------------------------------
U.S. VENTURE LIGHTING 2,324,735 2/29/00 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
United VENTURE LIGHTING 2131472 5/1/97 Registered
Kingdom (stylized) and Design
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
----------------------------------------------------------------------------------------------------------
Germany VENTURE LIGHTING 39719956 7/8/98 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Spain VENTURE LIGHTING 2097867 6/11/97 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Italy VENTURE LIGHTING FI97C 635 6/20/97 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
France VENTURE LIGHTING 97676221 10/31/97 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Japan VENTURE LIGHTING 4365449 3/3/10 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Canada VENTURE LIGHTING TMA 514,636 8/17/99 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Australia VENTURE LIGHTING 734,043 5/7/97 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
New Zealand VENTURE LIGHTING 276,124 11/1/96 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
India VENTURE LIGHTING 757,856 5/1/97 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Korea VENTURE LIGHTING 433,620 12/15/98 Registered
(stylized) and Design
(Class 39)
----------------------------------------------------------------------------------------------------------
Korea VENTURE LIGHTING 47034 9/16/98 Registered
(stylized) and Design
(Class 11)
----------------------------------------------------------------------------------------------------------
Singapore VENTURE LIGHTING T97/05095I 5/2/97 Registered
(stylized) and Design
(Class 11)
----------------------------------------------------------------------------------------------------------
Singapore VENTURE LIGHTING T97/05093B 5/2/97 Registered
(stylized) and Design
(Class 37)
----------------------------------------------------------------------------------------------------------
Hong Kong VENTURE LIGHTING 12238 12/8/97 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
China VENTURE LIGHTING 1479232 11/21/00 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
United Arab VENTURE LIGHTING 25509 1/22/01 Registered
Emirates (stylized) and Design
----------------------------------------------------------------------------------------------------------
Finland VENTURE LIGHTING 210,836 8/31/98 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Sweden VENTURE LIGHTING 329,698 1/15/99 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Norway VENTURE LIGHTING 973,525 5/2/97 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
----------------------------------------------------------------------------------------------------------
Denmark VENTURE LIGHTING VR 02.665 6/20/97 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
Vietnam VENTURE LIGHTING 33 693 4/3/00 Registered
(stylized) and Design
----------------------------------------------------------------------------------------------------------
U.S. VENTURE LIGHTING 1,396,659 6/10/86 Registered
INTERNATIONAL
----------------------------------------------------------------------------------------------------------
Canada VENTURE LIGHTING 335,094 12/11/87 Registered
INTERNATIONAL
----------------------------------------------------------------------------------------------------------
United VENTURE LIGHTING 1,253,673 11/5/85 Registered
Kingdom INTERNATIONAL
----------------------------------------------------------------------------------------------------------
Italy VENTURE LIGHTING MI98C008178 8/8/95 Registered
INTERNATIONAL
----------------------------------------------------------------------------------------------------------
France VENTURE LIGHTING 96 648 594 10/30/96 Registered
INTERNATIONAL
----------------------------------------------------------------------------------------------------------
Germany VENTURE LIGHTING 396459897 10/23/96 Registered
INTERNATIONAL
----------------------------------------------------------------------------------------------------------
Australia VENTURE LIGHTING 674,038 9/29/95 Registered
INTERNATIONAL
----------------------------------------------------------------------------------------------------------
New Zealand VENTURE LIGHTING 254193 9/29/95 Registered
INTERNATIONAL
----------------------------------------------------------------------------------------------------------
U.S. VLI (stylized) and 1,357,882 9/3/85 Registered
Design
----------------------------------------------------------------------------------------------------------
United VLI (stylized) and Design 2,113,518 10/22/96 Registered
Kingdom
----------------------------------------------------------------------------------------------------------
Italy VLI (stylized) and Design 729,737 10/16/97 Registered
----------------------------------------------------------------------------------------------------------
France VLI (stylized) and Design 96 648 593 10/30/96 Registered
----------------------------------------------------------------------------------------------------------
Germany VLI (stylized) and Design 39645980 12/10/96 Registered
----------------------------------------------------------------------------------------------------------
Australia VLI (stylized) and Design 674,037 9/29/95 Registered
----------------------------------------------------------------------------------------------------------
U.S. WHITE-LUX 1,730,895 11/10/92 Registered
----------------------------------------------------------------------------------------------------------
Germany WHITE-LUX 39645343 12/15/98 Registered
----------------------------------------------------------------------------------------------------------
United WHITE-LUX 2,113,511 10/1/99 Registered
Kingdom
----------------------------------------------------------------------------------------------------------
Vietnam WHITE-LUX 33689 4/3/00 Registered
----------------------------------------------------------------------------------------------------------
France WHITE-LUX 96648592 10/30/96 Registered
----------------------------------------------------------------------------------------------------------
Italy WHITE-LUX 764,806 10/21/96 Registered
----------------------------------------------------------------------------------------------------------
China WHITE-LUX 3334540 10/14/02 Pending
----------------------------------------------------------------------------------------------------------
U.S. WINTERSUN 2,232,711 3/16/99 Registered
----------------------------------------------------------------------------------------------------------
Canada WINTERSUN 539,738 1/16/01 Registered
----------------------------------------------------------------------------------------------------------
Norway WINTERSUN 189,021 3/19/98 Registered
----------------------------------------------------------------------------------------------------------
Denmark WINTERSUN VR 11/21/97 Registered
050201997
----------------------------------------------------------------------------------------------------------
Germany WINTERSUN 39740601 9/30/97 Registered
----------------------------------------------------------------------------------------------------------
Korea WINTERSUN 434476 12/19/98 Registered
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
----------------------------------------------------------------------------------------------------------
Australia WINTERSUN 745,038 9/26/97 Registered
----------------------------------------------------------------------------------------------------------
New Zealand WINTERSUN 282,744 9/25/97 Registered
----------------------------------------------------------------------------------------------------------
U.S. XXXXXXX XXXX and Design 2,247,996 5/25/99 Registered
----------------------------------------------------------------------------------------------------------
U.S. XXXXXXX XXXX 2,104,141 10/7/97 Registered
----------------------------------------------------------------------------------------------------------
DEPOSITION SCIENCES, INC.
----------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
----------------------------------------------------------------------------------------------------------
U.S. ISOPOWER 2,717,245 5/20/03 Registered
----------------------------------------------------------------------------------------------------------
U.S. ISOSPHERE 2,503,471 11/6/01 Registered
----------------------------------------------------------------------------------------------------------
XXX XXXXXXXXX 0000000 7/26/01 Registered
----------------------------------------------------------------------------------------------------------
U.S. ISOFIBER 2,645,378 11/5/02 Registered
----------------------------------------------------------------------------------------------------------
U.S. DSI 2,264,081 7/27/99 Registered
----------------------------------------------------------------------------------------------------------
U.S. TAVALITE 2,163,889 6/9/98 Registered
----------------------------------------------------------------------------------------------------------
CTM TAVALITE 724,831 6/29/99 Registered
----------------------------------------------------------------------------------------------------------
U.S. PASSION FIRE 2,089,963 8/19/97 Registered
----------------------------------------------------------------------------------------------------------
U.S. HEAT BUSTER and 2,081,960 7/22/97 Registered
Design
----------------------------------------------------------------------------------------------------------
U.S. MICRODYN (stylized) 2,091,689 8/26/97 Registered
----------------------------------------------------------------------------------------------------------
U.S. EASS 2,076,076 7/1/97 Registered
----------------------------------------------------------------------------------------------------------
CTM JEALOUS LOVE 724815 7/8/99 Registered
----------------------------------------------------------------------------------------------------------
CTM BLUE ENCHANTMENT 724849 8/30/99 Registered
----------------------------------------------------------------------------------------------------------
BALLASTRONIX (DELAWARE), INC.
----------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
----------------------------------------------------------------------------------------------------------
U.S. BALLASTRONIX INC. 2,134,743 2/3/98 Registered
----------------------------------------------------------------------------------------------------------
VENTURE LIGHTING EUROPE LIMITED
----------------------------------------------------------------------------------------------------------
SERIAL NO./ FILING DATE/
REGISTRATION REGISTRATION
COUNTRY XXXX NO. DATE STATUS
----------------------------------------------------------------------------------------------------------
United PARMAR 2120799 9/5/97 Registered
Kingdom
----------------------------------------------------------------------------------------------------------
SCHEDULE 5.16
INTELLECTUAL PROPERTY
LIST OF REGISTERED COPYRIGHTS
ADVANCED LIGHTING TECHNOLOGIES, INC.
---------------------------------------------------------------------------------------
Title Registration Number Registration Date
---------------------------------------------------------------------------------------
The world leader in high TX-5-704-494 4/29/03
purity materials and
components for the lighting
industry
---------------------------------------------------------------------------------------
DEPOSITION SCIENCES, INC.
---------------------------------------------------------------------------------------
Title Registration Number Registration Date
---------------------------------------------------------------------------------------
DSI-3500/2A MicroDyn TX-3-777-022 2/28/94
sputtering system operating
and service manual
---------------------------------------------------------------------------------------
Tantalite gemstones; celestial TX-3-815-576 5/2/94
firefall; The Iris Collection;
precious art objects of radiant
beauty; Aurora metal jewelry;
tropical twilight
---------------------------------------------------------------------------------------
DSI HeatBuster metal TX-3-883-288 6/30/94
reflector specification
---------------------------------------------------------------------------------------
SCHEDULE 5.18
DEMAND DEPOSIT ACCOUNTS
ADVANCED LIGHTING TECHNOLOGIES, INC.
First Merit Bank*
000 Xxxxx Xxxxx Xxxxxx
Xxxxx, XX 00000
Account #8880 4026
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #8011369184
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #0000000000
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #1008438773
APL ENGINEERED MATERIALS, INC.
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #1008438722
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #771032
BankIllinois
000 Xxxx Xxxxxxxxxx
Xxxxxxxxx, XX 00000
Account #0000000
BankIllinois
000 Xxxx Xxxxxxxxxx
Xxxxxxxxx, XX 00000
Account #0000000
National City Bank*
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Account #523010888-7
National City Bank*
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Account #103-594
Bank One*
Bensenville, IL
Account #1115002149570
DEPOSITION SCIENCES, INC.
Westamerica Bank
Santa Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxx Xxxx, XX 00000
Account #0404134868
Westamerica Bank
Santa Xxxx Office
X.X. Xxx 0000
Xxxxx Xxxx, XX 00000
Account #0404140972
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx.
Xxxx Xxxxxxxxx, XX 00000
Account #1008438781
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #910758
Xxxxxxx Xxxxx*
0000 Xxxxxx Xxxxxx
Xxxx, XX 00000
Account #80C07004
Summit Bank*
000 Xxxxxxx Xxxxxx
Xxxxx X-000
Xxxxxx, XX 00000
Account #220009171
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #0000000000
VENTURE LIGHTING INTERNATIONAL, INC.
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #1008438765
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #2533
PNC Bank, National Association
Xxx Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Account #1008438757
National City Bank
0000 X. 0xx Xxxxxx
Xxxxxxxxx, XX 00000
Account #657058709
First National Bank of Omaha*
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Account #110156718
First National Bank of Omaha*
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Account #00000000
VENTURE LIGHTING EUROPE LIMITED
Barclays Bank plc
Hanover Square Corporate Banking Centre
P.O. Box 15163H
00 Xxxx Xxxx
Xxxxxx XX0 0XX
Account #00000000
Barclays Bank plc
Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx
X.X. Xxx 00000X
00 Xxxx Xxxx
Xxxxxx XX0 0XX
Account #00000000
Barclays Bank plc*
Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx
X.X. Xxx 00000X
00 Xxxx Xxxx
Xxxxxx XX0 0XX
Account #00000000
Barclays Bank plc
Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx
X.X. Xxx 00000X
00 Xxxx Xxxx
Xxxxxx XX0 0XX
Account #00000000
Barclays Bank plc
Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx
X.X. Xxx 00000X
00 Xxxx Xxxx
Xxxxxx XX0 0XX
Account #00000000
Barclays Bank plc
Paris, France
Account #00000000
Barclays Bank plc
Frankfurt, Germany
Account #0736114301
Banca Comm Italiana
Milan, Italy
Account 0000000/01/81
VENTURE LIGHTING POWER SYSTEMS, NORTH AMERICA INC.
Royal Bank of Canada
Truro, Nova Scotia
Account #100 0000
Xxxxx Xxxx xx Xxxxxx
Xxxxx, Xxxx Xxxxxx
Account #400 1095
*Loan Parties represent and covenant that the cash in these accounts shall not
exceed $5,000, with the exception of (i) account number 8880 4026 at First Merit
Bank, which amount shall not exceed $10,000, (ii) account number 0000000 at Bank
Illinois, which amount shall not exceed $250,000 (this is a mortgage
disbursement and payroll account that gets depleted to zero as mortgage
disbursements are made and employees cash their paychecks) and (iii) account
number 00000000 at Barclays Bank plc, which amount shall not exceed
L20,000.
SCHEDULE 5.20
PERMITTED INDEBTEDNESS
1. APL Engineered Materials, Inc. ("APL"): Mortgage dated April 21, 1992
between APL and Bank Illinois (f/k/a The Champaign National Bank) for the
principal sum of $1,100,000 on the real property of APL located at 0000 X.
Xxxxxx Xxxx, Xxxxxx, XX 00000, with the balance of the indebtedness due and
payable on May 1, 2007. Aggregate principal amount outstanding: $359,706.
2. Advanced Lighting Technologies, Inc. ("ADLT"):
a. Promissory Note dated as of January 31, 2000, payable to the
order of RandH Unison Holdings for the principal sum of $2,300,000, and bearing
interest at the rate of 6.65% per annum compounded quarterly. The note was due
and payable on January 31, 2002 and has not been extended. Aggregate principal
amount outstanding: $1,970,000.
b. Indenture dated as of March 18, 1998 issuing 8% Senior Notes
due March 15, 2008 for the aggregate principal amount of $100,000,000. Interest
is payable semiannually in cash on March 15 and September 15 of each year,
commencing on September 15, 1998. The Senior Notes are redeemable at the option
of ADLT, in whole or in part, at any time after March 15, 2003 at the redemption
prices set forth in the Indenture. Upon a Change of Control (as defined in the
Indenture), ADLT will be required to purchase the notes at 101% of their
principal amount, plus accrued interest. The notes are unsecured senior
indebtedness and rank pari passu with existing and future unsubordinated
unsecured indebtedness and are senior in right of payment to all subordinated
indebtedness of ADLT. Aggregate amount outstanding: $100,000,000.
c. Open End Mortgage, Security Agreement and Assignment of Rents
in favor of First Merit Bank, N.A. (f/k/a Security Federal Savings and Loan
Association of Cleveland) dated March 26, 1997 for the property located at 00000
Xxxx-Xxxxx #0, Xxxxxxxxx, Xxxx 00000 for the original principal sum of $185,000.
The original principal sum is payable twenty-five years from the date of the
mortgage and interest is payable quarterly. Assignment of Rents and Leases dated
March 26, 1997 for the original principal sum of $185,000 in favor of First
Merit Bank, N.A. (f/k/a Security Federal Savings and Loan Association of
Cleveland). Aggregate amount outstanding: $153,444.32.
d. ADLT finances its insurance with Imperial Premium Finance,
Inc. ("Imperial"). The Premium Finance Agreement Disclosure State and Security
Agreement with Imperial dated December 11, 2002, requires ADLT to make monthly
payments of $6,622.33, with the final payment due on September 11, 2003. The
Premium Finance Agreement Disclosure Statement and Security Agreement with
Imperial dated December 12, 2001, requires ADLT to make monthly payments of
$57,295.22, with the final payment due on October 11, 2003.
3. Venture Lighting Power Systems, North America Inc.:
a. Grid Promissory Note dated July 2, 2001, executed by VLNA to
ADLT for all advances, which shall not exceed US$5,600,000, plus accrued
interest of $5,600,000, plus accrued interest, due and payable on July 30, 2004.
The note bears interest at 5.5% per annum commencing on July 2, 2001. Aggregate
principal amount outstanding: US$1,796,569.21.
b. Canada Customs and Revenue Agency ("CCRA") requires a 10%
withholding charge on interest payments. VLNA's gross interest payable to ADLT
pursuant to the Grid Promissory Note is US$306,444 (minus the 10% payment to
CCRA of US$30,644) = US$275,800.
c. Consignment Agreement by and between VLNA and Rea Magnet Wire
Company, Inc. dated June 1, 2002, for a term commencing July 1, 2002 through
September 30, 2004 for supply of copper and aluminum magnet wire on consignment
at our location in Amherst, with 60 day payment terms and a volume rebate.
Aggregate amount outstanding: US$206,253.
d. Computer Lease with MTC Leasing Inc., which terminates in
November 2003. Aggregate amount outstanding: US$1,514.15.
e. Royalty payments owed to Ballastronix (Delaware), Inc.
Aggregate amount owed: US$485,863 (minus the 10% payment to CCRA of US$25,060) =
US$460,803.
f. Intercompany Note payable by VLNA to ADLT dated June 30, 2003
in the principal amount of $1,812,277.60.
4. Venture Lighting Europe Limited:
a. Intercompany loan made by Advanced Lighting Technologies
Europe Limited ("ADLT Europe") dated July 1, 2001. Unsecured Demand Loan in the
principal amount of 3,749,924 pounds made by ADLT Europe. The loan bears
interest at 8% per annum accruing daily. Aggregate amount outstanding: 3,030,126
pounds.
b. VLE received a claim from Industrial Technische Verlichting
B.V. relating to faulty goods. A settlement was reached in 2002 between the
parties on the basis of a payment of 275,000 Euros by Venture Lighting Europe
Limited in full and final settlement. Payment of the agreed settlement sum is to
be reached by the rebate of 20% on all goods supplied to Industria Technische
Verlichting B.V. Aggregate amount outstanding: 179,544 Euros.
c. Intercompany Note payable by VLE and Parry Power Systems
Limited ("Parry") to ADLT dated June 30, 2003 in the principal amount of
$3,923,096.90.
d. UK Guarantors' Indebtedness to Barclays Bank plc with regard
to directors' credit card obligations in the amount of $64,350 (L39,000).
5. Parry Power Systems Limited:
a. Intercompany Note payable by VLE and Parry to ADLT dated June
30, 2003 in the principal amount of $3,923,096.90.
b. UK Guarantors' Indebtedness to Barclays Bank plc with regard
to directors' credit card obligations in the amount of $64,350 (L39,000).
SCHEDULE 5.23
TAXES
1. ADLT Services, Inc. is an inactive company with no assets. It never
obtained a Federal ID # and therefore has not filed any tax returns
(Federal or State).
2. Real estate taxes for the first half of 2002 on the corporate condo in
Twinsburg, Ohio, which were due in February were unpaid due to the
bankruptcy filing.
SCHEDULE 5.26
MATERIAL CONTRACT DEFAULTS
NOTE INDENTURE
Indenture between Advanced Lighting Technologies, Inc. and The Bank of New York,
as Trustee, dated as of March 18, 1998; UNCURED INTEREST PAYMENT DEFAULT;
FAILURE TO PAY PRINCIPAL DUE AS A RESULT OF ACCELERATION; CREATION OF LIENS ON
SUBSTANTIALLY ALL OF DEBTORS' PROPERTY IN FAVOR OF THE DIP LENDER.
MANAGEMENT CONTRACTS, COMPENSATORY PLANS AND ARRANGEMENTS
Loan Agreement dated as of October 8, 1998 between Advanced Lighting
Technologies, Inc. and Xxxxx X Xxxxxxx
Secured Promissory Note of Xxxxx X. Xxxxxxx dated as of October 8, 1998 in the
amount of $9,000,000 to Advanced Lighting Technologies, Inc. as amended; NO
INTEREST PAID FOR PERIODS AFTER OCTOBER 6, 1999.
OTHER AGREEMENTS
Stock Purchase Agreement by and between Advanced Lighting Technologies, Inc. and
General Electric Company dated as of September 28, 1999; DEFAULT EXISTS AS A
RESULT OF CREATION OF LIENS ON SUBSTANTIALLY ALL OF DEBTORS' PROPERTY IN FAVOR
OF THE DIP LENDER.
Contingent Warrant Agreement dated as of September 30, 1999 by and among
Advanced Lighting Technologies, Inc., General Electric Company, Xxxxx X.
Xxxxxxx, individually and as voting trustee under Voting Trust Agreement dated
October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually and as voting
trustee under Voting Trust Agreement dated January 2, 1998, as subsequently
amended; FIRST CONTINGENT WARRANT AND SECOND CONTINGENT WARRANT HAVE NOT BEEN
ISSUED IN ACCORDANCE WITH THE CONTINGENT WARRANT AGREEMENT, AS AMENDED.
SCHEDULE 5.28 (b-1)
EMPLOYEE BENEFITS
1. INSURANCE
All employees are covered under the health insurance plan in their
province of residence. Upon completion of a ninety (90) day or extended
probationary period, an employee is able to participate in the
following company group benefits:
GROUP LIFE INSURANCE (Company Paid) The Principal Amount of one year's
annual salary. An employee can apply for optional additional life
insurance for themselves and their spouse at group rates.
ACCIDENTAL DEATH AND DISMEMBERMENT (Company Paid) A form of "double
indemnity" coverage should death result from an accident.
LONG-TERM DISABILITY (Employee Paid) An employee who becomes disabled
by illness or injury while employed at Venture Lighting Power Systems,
North America Inc. ("VLPS,NA") has access to short term disability
benefit through the Employment Insurance Commission. Currently, EI
coverage is available for a maximum of 15 weeks with a two-week waiting
period. The Compulsory Long-Term Disability program is designed to
begin where the Employment Insurance program leaves off. The long-term
disability elimination period has been co-ordinated such that when EI
benefits end the LTD benefits start.
LTD provides a monthly income for employees who are still disabled
before retirement at age sixty-five (65), at a rate of 60% of monthly
earnings up to $5000 per month. Resulting from the fact that employees
pay 100% of the long-term disability premium, long-term disability
benefits are non-taxable in the hands of the employee. Usually you
apply for Canada Pension benefits at the same time as the LTD benefits
and these offset the amounts paid to an all source maximum of 85% of
net pre-disability earnings.
SUN LIFE DENTAL AND EXTENDED HEALTH BENEFITS WITH A CO-PAY PRESCRIPTION
DRUG PLAN (Voluntary basis). If an employee enrols in either of these
plans, the company pays 50% of the premium cost of the plan, while the
employee pays the remaining 50%. Premium rates are based on the group's
"experience rating".
2. PROFIT SHARING PLAN BONUS AND DEFERRED PROFIT SHARING PLAN - Venture
Lighting Power Systems, North America has a Profit Sharing Plan bonus
in place to provide for its employees a retirement plan and to provide
a means to reward those qualified employees with a superior attendance
record. This plan includes a Deferred Profit Sharing Plan
An employee must have attained six months of service with VLPS,NA by
the beginning of any fiscal year, in order to participate in that
year's Profit Sharing Plan, must be employed by VLPS,NA at the end of
the fiscal year in which the plan applies, and must be employed at the
time the payout is made. The Profit Sharing Plan is based on the fiscal
year.
In years when a certain performance target (Operating Dollars) is
attained by the business, qualified employees will share in the profits
of the business, in the form of a percentage of their actual earnings
in that fiscal year. The employee will be informed each year of the
following year's performance target.
This profit share payment will be increased or reduced by applying an
attendance factor to the pay out.
The employee has the option to deposit their entire share into the
Deferred Profit Sharing Plan, which is a Canada Customs and Revenue
Agency Registered Plan, or receive up to 50% of it in cash through
payroll. Only VLPS,NA, on behalf of the employees, may contribute to
this plan and invested funds are held tax free until you withdraw them.
The funds held for the employee within the plan are locked in until the
employee retires or leaves the employ of VLPS,NA.
3. VACATION PAY - All non exempt employees who on June 30 in a current
year have completed less than one year of service or have worked less
than 1,800 hours will receive, in that year, vacation pay equal to
four- (4) percent of their gross earnings. After completing the
probationary period, these employees may be granted vacation time off
in the form of one- (1) day of vacation per month worked (to a maximum
of 10 days). In such circumstances the Department Manager must give
written approval.
All employees who on June 30 in a current year have completed one year
of service or more will receive two- (2) weeks vacation with pay at
four (4) percent of gross earnings. Exempt employees receive two weeks
vacation with pay at their current salary level.
All employees who on June 30 in a current year have completed 5 years
of service with VLPS,NA will receive three (3) weeks vacation with pay
at six (6) percent of gross earnings. Exempt employees receive three
(3) weeks vacation with pay at their current salary level.
Annual plant shutdowns are usually scheduled during the first two weeks
of August to permit eligible employees to take their vacation at the
same time. Exact dates for plant shutdown are announced early enough to
plan vacation trips and other activities.
It is mandatory that most everyone take his or her vacation during the
plant shutdown. The third week of vacation period could be scheduled in
conjunction with the two (2) week scheduled shutdown, depending on
business conditions, as determined by Senior Management.
EMPLOYEES WITH VACATION DAYS OVER AND ABOVE THOSE REQUIRED FOR PLANT
SHUTDOWN WILL BE GIVEN THE OPPORTUNITY TO MAKE THEIR VACATION REQUESTS
FOR THE CURRENT CALENDAR YEAR DURING A THREE-MONTH PERIOD AT THE
BEGINNING OF EACH YEAR. REQUESTS FOR VACATION WILL BE CONSIDERED ON A
FIRST COME FIRST SERVED BASIS AND THEN BY SENIORITY, IN THE EVENT OF
A TIE. ANY EMPLOYEE REACHING THEIR FIVE-YEAR (5) ANNIVERSARY DATE
DURING VLPS,NA'S FISCAL CALENDAR MONTHS OF JANUARY THROUGH TO JUNE WILL
BE ENTITLED TO REQUEST THEIR THIRD WEEK OF VACATION BEFORE THE END OF
DECEMBER OF THAT SAME YEAR. ANY EMPLOYEE REACHING THEIR FIVE-YEAR (5)
ANNIVERSARY DATE DURING VLPS,NA'S FISCAL CALENDAR MONTHS OF JULY
THROUGH TO DECEMBER WILL BE ENTITLED TO REQUEST THEIR THIRD WEEK OF
VACATION BETWEEN JANUARY AND DECEMBER OF THE NEXT FISCAL YEAR.
4. EDUCATIONAL TUITION REIMBURSEMENT - VLPS,NA will reimburse an employee
for the cost of tuition for courses, which are applicable to their job,
taken outside of work. The Company wants to support employees who wish
to further pursue their career objectives with education and training.
Expenses and books are not eligible for reimbursement. Eligible courses
and programs are those which will assist an employee in carrying out
their present tasks or responsibilities or will enable the employee to
acquire the knowledge and skill to compete for other jobs within
VLPS,NA.
5. PROFESSIONAL ASSOCIATION DUES - If you are employed in a professional
capacity by VLPS,NA and your occupation requires that you maintain
current membership status in a professional association or a licensing
body, VLPS,NA will pay for 50% of the annual membership cost.
6. EI PURSUANT TO THE EMPLOYMENT INSURANCE ACT (CANADA)
7. CPP PURSUANT TO THE CANADA PENSION PLAN (CANADA)
8. WORKERS' COMPENSATION BENEFITS PURSUANT TO THE WORKERS' COMPENSATION
ACT (NOVA SCOTIA)
SCHEDULE 5-28(b-2)
EMPLOYEE BENEFITS
ADVANCED LIGHTING TECHNOLOGIES, INC. & VENTURE LIGHTING INTERNATIONAL, INC.
All employees are eligible for health insurance coverage and 401(k) Savings and
Retirement Plan on the date of hire.
GROUP LIFE INSURANCE - (company paid) The amount of two times the employees
annual salary to a maximum of $300,000.
ACCIDENTAL DEATH & DISMEMBERMENT - (company paid) - The amount of two times the
employees annual salary to a maximum of $300,000.
SUPPLEMENTAL VOLUNTARY BENEFITS OFFERED
Voluntary Life - Mutual of Omaha - (Term Life)
- Cincinnati Life - (Universal Life)
Voluntary Long Term Care - AFLAC
SHORT TERM DISABILITY (STD) - In order to provide the opportunity for income in
the event of a short-term disability, full-time employees that have 6 months of
continuous, active, employment are eligible for STD, paid at 80% of the normal
base pay, up to twenty-six weeks. Benefits begin on the fourteenth day of a
covered disability.
LONG TERM DISABILITY (LTD) - LTD pays 60% of the normal base pay after 180-day
waiting period, up to a maximum of $6,000 per month for eligible employees. STD
benefits will cease once LTD begins.
VISION - (Voluntary benefit)
Provided by Vision Service Plan (VSP)
DENTAL
Provided by Delta Dental of Ohio
PPO Plan allowing for Single, employee +1 or family coverage
MEDICAL
Provided by United Health Care
PPO Plan allowing for Single, employee +1 or family coverage
Plan offers two choices - 90/70 or 100/80
Both plans provide the Prescription coverage at $10/$15/$30
EMPLOYEE ASSISTANCE PROGRAM (EAP)
Care 24 is a confidential resource offered and available to all employees and
their family members.
EDUCATIONAL TUITION REIMBURSEMENT - Full-time employees that have one year of
service with the company are eligible. 100% company paid up to $5,250 per
calendar year upon approval.
401(k) SAVINGS AND RETIREMENT PLAN - Full-time employees that are 18 years of
age are eligible to participate upon date of hire. Employee can contribute from
1% - 18% with a company match of 50% up to the first 8% deferred.
VACATIONS
Are earned on an employees anniversary.
1 year through 4 years 10 days
5 years through 6 years 12.5 days
7 years through 14 years 15 days
15 or more years 20 days
PAID HOLIDAYS:
10 through out the year.
ADLT SERVICES, INC.
None.
APL ENGINEERED MATERIALS, INC.
All employees are eligible for health insurance coverage and 401(k) Savings and
Retirement Plan on the date of hire.
GROUP LIFE INSURANCE - (company paid) The amount of two times the employees
annual salary to a maximum of $300,000.
ACCIDENTAL DEATH & DISMEMBERMENT - (company paid) - The amount of two times the
employees annual salary to a maximum of $300,000.
SUPPLEMENTAL VOLUNTARY BENEFITS OFFERED
Voluntary Life - Mutual of Omaha - (Term Life)
- Cincinnati Life - (Universal Life)
Voluntary Long Term Care - AFLAC
SHORT TERM DISABILITY (STD) - In order to provide the opportunity for income in
the event of a short-term disability, full-time employees that have 6 months of
continuous, active, employment are eligible for STD, paid at 80% of the normal
base pay, up to twenty-six weeks. Benefits begin on the fourteenth day of a
covered disability.
LONG TERM DISABILITY (LTD) - LTD pays 60% of the normal base pay after 180-day
waiting period, up to a maximum of $6,000 per month for eligible employees. STD
benefits will cease once LTD begins.
VISION - (Voluntary benefit)
Provided by Vision Service Plan (VSP)
DENTAL
Provided by Delta Dental of Ohio
PPO Plan allowing for Single, employee +1 or family coverage
MEDICAL
Provided by United Health Care
PPO Plan allowing for Single, employee +1 or family coverage
Plan offers two choices - 90/70 or 100/80 coverage
Both plans provide the Prescription coverage at $10/$15/$30
MEDICAL
Personal Care
PPO Plan allowing for Single, employee +1 or Family coverage
Plan offers 90/70 coverage
Plan offers prescription coverage at $7, $15,$50
MEDICAL
Health Alliance
PPO Plan offering Single, Emp+1 & Family
Plan offers 90/70 coverage
Plan offers prescription coverage $10, $20, $40 in network & 50% out of network
EMPLOYEE ASSISTANCE PROGRAM (EAP)
Care 24 is a confidential resource offered and available to all employees and
their family members.
EDUCATIONAL TUITION REIMBURSEMENT - Full-time employees that have one year of
service with the company are eligible. 100% company paid up to $5,250 per
calendar year upon approval.
401(k) SAVINGS AND RETIREMENT PLAN - Full-time employees that are 18 years of
age are eligible to participate upon date of hire. Employee can contribute from
1% - 18% with a company match of 50% up to the first 8% deferred.
PAID VACATION
1 YEAR - 10 DAYS
2 - 10 YEARS - VACATION ACCRUAL ONE DAY FOR EVERY YEAR OF SERVICE
11-15 YEARS - 20 DAYS
16-17 YEARS - 21 DAYS
18-19 YEARS - 22 DAYS
20- 21 YEARS - 23 DAYS
22-23 YEARS - 24 DAYS
24 - 25+ YEARS - 25 DAYS
PAID HOLIDAYS
12 THROUGH OUT THE YEAR
BALLASTRONIX (DELAWARE), INC.
None.
DEPOSITION SCIENCES, INC.
All employees are eligible for health insurance coverage and 401(k) Savings and
Retirement Plan on the date of hire.
GROUP LIFE INSURANCE - (company paid) The amount of two times the employees
annual salary to a maximum of $300,000.
ACCIDENTAL DEATH & DISMEMBERMENT - (company paid) - The amount of two times the
employees annual salary to a maximum of $300,000.
SUPPLEMENTAL VOLUNTARY BENEFITS OFFERED
Voluntary Life - Mutual of Omaha - (Term Life)
- Cincinnati Life - (Universal Life)
Voluntary Long Term Care - AFLAC
SHORT TERM DISABILITY (STD) - In order to provide the opportunity for income in
the event of a short-term disability, full-time employees that have 6 months of
continuous, active, employment are eligible for STD, paid at 80% of the normal
base pay, up to twenty-six weeks. Benefits begin on the fourteenth day of a
covered disability.
LONG TERM DISABILITY (LTD) - LTD pays 60% of the normal base pay after 180-day
waiting period, up to a maximum of $6,000 per month for eligible employees. STD
benefits will cease once LTD begins.
VISION - (Voluntary benefit)
Provided by Vision Service Plan (VSP)
DENTAL
Provided by Delta Dental of Ohio
PPO Plan allowing for Single, employee +1 or family coverage
MEDICAL
Provided by United Health Care
PPO Plan allowing for Single, employee +1 or family coverage
Plan offers two choices - 90/70 or 100/80
Both plans provide the Prescription coverage at $10/$15/$30
MEDICAL
Provided by Xxxxxx Permanente HMO
Plan offers Prescription coverage at $10 &$15
EMPLOYEE ASSISTANCE PROGRAM (EAP)
Care 24 is a confidential resource offered and available to all employees and
their family members.
EDUCATIONAL TUITION REIMBURSEMENT - Full-time employees that have one year of
service with the company are eligible. 100% company paid up to $5,250 per
calendar year upon approval.
401(k) SAVINGS AND RETIREMENT PLAN - Full-time employees that are 18 years of
age are eligible to participate upon date of hire. Employee can contribute from
1% - 18% with a company match of 50% up to the first 8% deferred.
FSA
Medical or Dependent Care Flexible Spending Accounts
Administered by Associates in Excellence.
PAID VACATION
1-5 YEAR - 10 DAYS
5-15 YEARS - 15 DAYS
15 & UP - 20 DAYS
PAID HOLIDAYS
10 THROUGH OUT THE YEAR
LIGHTING RESOURCES INTERNATIONAL, INC.
None.
MICROSUN TECHNOLOGIES, INC.
None.
VENTURE LIGHTING EUROPE LIMITED
Group Medical Plan
Insurer: AXA PPP Healthcare. Current policy number is B73637-0082, expiring in
June 2004. The scheme has 15 members and the monthly payment due
is L724.40.
Life Assurance
Insurer: AIG Life. Current policy number is 397B11831 from 1 July 2002 to June
30, 2003. The policy currently covers 15 lives and provides for a lump sum
assurance of 4 x salary and a spouses death in service pension. Total premium
for 2002/2003 is L9,019.83.
Group Pension Plan
Insurer: Scottish Equitable. Current policy number is 63289, expiring on June
30, 2003. The scheme is a money purchase scheme. Premium for 2002/2003:
L38,960.16.
SCHEDULE 7.14
TRANSACTIONS WITH AFFILIATES
LOANS:
1. Loan Agreement between ADLT and Xxxxx X. Xxxxxxx ("Xxxxxxx") (October
8, 1998).
2. Secured Promissory Note dated as of October 8, 1998 between ADLT and
Xxxxxxx (October 8, 1998).
3. First Amendment to Loan Agreement, Secured Promissory Note and Security
Agreement (November 22, 2000).
4. Second Amendment to Loan Agreement, Secured Promissory Note and
Security Agreement (March 15, 2001).
5. Third Amendment to Loan Agreement, Secured Promissory Note and Security
Agreement (April 25, 2002).
MANAGEMENT CONTRACTS:
1. Amended and Restated Employment Agreement between ADLT and Xxxxxxx
(October 8, 1998).
2. Consulting Agreement between ADLT and Xxxxx X. Xxxx (December 31,
1999).
COMPENSATORY PLANS:
1. Deposition Sciences, Inc. 2001 Equity Incentive Plan
2. Director & Officer Compensation Arrangements are described in ADLT's
Form 10K, dated as of June 30, 2002.
AGREEMENTS WITH SHANGHAI Y&L LIGHTING CO.:
Venture Lighting International, Inc. purchases frame and mounting components for
metal halide lamps from Shanghai Y&L Lighting Co. (China). The standard allowed
time for payment on trade invoices is sixty (60) days from date of shipment,
however, Shanghai Y&L has formally extend the term for VLI to pay trade invoices
to ninety (90) days. All pricing is determined at arm's-length.
AGREEMENTS/ARRANGEMENTS WITH GENERAL ELECTRIC:
1. Stock Purchase Agreement by and between ADLT and General Electric
Company ("GE"), dated as of September 28, 1999.
2. Contingent Warrant Agreement dated as of September 30, 1999 by and
among ADLT, GE, Xxxxxxx, individually and as voting trustee under Voting Trust
Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx, individually
and as voting trustee under Voting Trust Agreement dated January 2, 1998.
3. Amendment to Contingent Warrant Agreement dated as of August 31, 2000,
by and among ADLT, GE, Xxxxxxx, individually and as voting trustee under Voting
Trust Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx,
individually and as voting trustee under Voting Trust Agreement dated January 2,
1998.
4. Second Amendment to Contingent Warrant Agreement dated as of June 29,
2001, by and among ADLT, GE, Xxxxxxx, individually and as voting trustee under
Voting Trust Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx,
individually and as voting trustee under Voting Trust Agreement dated January 2,
1998.
5. Third Amendment to Contingent Warrant Agreement dated as of September
28, 2001, by and among ADLT, GE, Xxxxxxx, individually and as voting trustee
under Voting Trust Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X.
Xxxx, individually and as voting trustee under Voting Trust Agreement dated
January 2, 1998.
6. Fourth Amendment to Contingent Warrant Agreement dated as of December
31, 2001, by and among ADLT, GE, Xxxxxxx, individually and as voting trustee
under Voting Trust Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X.
Xxxx, individually and as voting trustee under Voting Trust Agreement dated
January 2, 1998.
7. Fifth Amendment to Contingent Warrant Agreement dated as of March 31,
2002, by and among ADLT, GE, Xxxxxxx, individually and as voting trustee under
Voting Trust Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx,
individually and as voting trustee under Voting Trust Agreement dated January 2,
1998.
8. Sixth Amendment to Contingent Warrant Agreement dated as of June 30,
2002, by and among ADLT, GE, Xxxxxxx, individually and as voting trustee under
Voting Trust Agreement dated October 10, 1995, Xxxxxxx Ltd. and Xxxx X. Xxxx,
individually and as voting trustee under Voting Trust Agreement dated January 2,
1998.
9. Lamp Materials Purchase Agreement by and among ADLT, GE, GE, acting
through its GE Lighting business, and APL Engineered Materials, Inc. ("APL"),
dated as of September 30, 1999.
10. Patent and Technical Assistance Agreement by and among ADLT, APL, and
GE, acting through its GE Lighting business, dated as of September 30, 1999.
11. Series A1 Warrant to Purchase Common Shares of ADLT issued to GE, dated
as of October 6, 1999.
12. Registration Rights Agreement between ADLT and GE dated as of September
30, 1999
13. Consignment Agreement by and between APL and GE, acting through its GE
Lighting business, dated January 4, 1999.
*Information regarding terms/pricing of sales (lamps) and purchasing (quartz,
tubing, lamps) between VLI/GE are to be provided to Foothill Capital under
separate cover.
INTERCOMPANY LOANS
1. Unsecured Demand Loan in the principal amount of $3,554,376 made by
Advanced Lighting Technologies, Inc. to Advanced Lighting Technologies
Australia, Inc. dated January 1, 2002.
2. Unsecured Demand Loan in the principal amount of L3,749,924 made
by Advanced Lighting Technologies Europe Limited to Venture Lighting Europe
Limited dated July 1, 2001.
3. Unsecured Demand Loan in the principal amount of $6,294,738 made by
Advanced Lighting Technologies, Inc. to Advanced Lighting Technologies Europe
Limited dated July 1, 2001.
4. Grid Promissory Note dated July 2, 2001 executed by Venture Lighting
Power Systems, North America Inc. and payable to Advanced Lighting Technologies,
Inc. all advances, which shall not exceed US$5,600,000, due and payable on July
30, 2004.
5. Intercompany Note payable by Venture Lighting Europe Limited and Parry
Power Systems Limited to Advanced Lighting Technologies, Inc. dated June 30,
2003 in the principal amount of $3,923,096.90.
6. Intercompany Note payable by Venture Lighting Power Systems, North
America Inc. to Advanced Lighting Technologies, Inc. dated June 30, 2003 in the
principal amount of $1,812,277.60.
