Exhibit 10.1
AMENDMENT TO AMENDED AND RESTATED FORBEARANCE AGREEMENT
THIS AMENDMENT TO AMENDED AND RESTATED FORBEARANCE AGREEMENT (this
"Amendment") is made and entered into as of this 19th day of November, 2002,
among Advanced Lighting Technologies, Inc., Venture Lighting Power Systems North
America Inc., Parry Power Systems Limited, and Venture Lighting Europe Ltd.
(collectively, "Borrowers"), PNC Bank, National Association, as Agent ("Agent")
and PNC Bank, National Association, National City Commercial Finance, Inc. and
Sovereign Bank (collectively, "Lenders"). Capitalized terms used herein without
definition have the meanings ascribed thereto in the Amended and Restated
Forbearance Agreement among the parties hereto dated October 18, 2002 (the
"Forbearance Agreement").
RECITALS
A. Borrowers, Agent and Lenders entered into the Forbearance Agreement
on October 18 2002. At October 18, 2002, Borrowers had not yet determined
compliance under Section 5.7 (a) of the Credit Agreement (fixed charge coverage
ratio) for the period ended September 30, 2002.
B. Borrowers have advised Agent and Lenders that they have failed to
comply with Section 5.7 of the Credit Agreement for the period ended September
30, 2002 (the "September 30, 2002 FCCR Violation"). Borrowers have requested
that Agent and Lenders agree to modify the Forbearance Agreement to include the
September 30, 2002 FCCR Violation as a "Designated Default" thereunder.
C. Borrowers have further advised Agent and Lenders that (a) there has
occurred a "Second Occurrence Failure" under, and as defined in, the Contingent
Warrant Agreement among U.S. Borrower., General Electric Company, Xxxxx X.
Hellman, Hellman, Ltd., Xxxxx X. Xxxxxxx, as voting trustee under a Voting Trust
Agreement dated October 10, 1995, Xxxx X. Xxxx, and Xxxx X. Xxxx, as voting
trustee under a Voting Trust Agreement dated January 2, 1998, and (b) General
Electric Company is not waiving its rights under the aforementioned Contingent
Warrant Agreement or otherwise as they relate to the Second Occurrence Failure.
D. Section 7.7 of the Credit Agreement provides that a Change of
Control is an Event of Default. As defined in the Credit Agreement, a "Change of
Control" includes "such time as...(A) a "person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the ultimate
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of more than thirty-five percent (35%) of the total voting power of the
Voting Stock of U.S. Borrower on a fully diluted basis and (B) such ownership
represents a greater percentage of the total voting power of the Voting Stock of
U.S. Borrower, on a fully diluted basis, than may then be voted by the Existing
Stockholders on such date."
Borrowers have indicated, and acknowledge and agree, that General Electric
Company's rights to vote and purchase capital stock of U.S. Borrower arising as
a result of the Second Occurrence Failure, when combined with the capital stock
of U.S. Borrower owned by General Electric Company, give rise to a Change of
Control as described above and therefore an Event of Default under the Credit
Agreement.
E. Borrowers have requested that Agent and Lenders agree to modify the
Forbearance Agreement to add the Event of Default arising as a result of the
Second Occurrence Failure to the "Designated Defaults" thereunder.
AGREEMENT
In consideration of the Recitals and of the mutual promises and
covenants contained herein, Lenders and Borrowers agree as follows:
1. DESIGNATED DEFAULTS. Exhibit A to the Forbearance Agreement is
hereby amended to add thereto the following:
"An Event of Default under Section 7.2 of the Credit Agreement due to a
violation of Section 5.7(a) (fixed charge coverage ratio) for the period ended
and at September 30, 2002.
An Event of Default under Section 7.7 (Change of Control) and
subsection (a) of Section 7.11 (Indenture) of the Credit Agreement arising as a
result of the Second Occurrence Failure under, and as defined in, that certain
Contingent Warrant Agreement dated September 30, 1999, among U.S. Borrower,
General Electric Company, Xxxxx X. Hellman, Hellman, Ltd., Xxxxx X. Xxxxxxx, as
voting trustee under Voting Trust Agreement dated October 10, 1995, Xxxx X.
Xxxx, and Xxxx X. Xxxx, as voting trustee under Voting Trust Agreement dated
January 2, 1998."
1A. SECTION 2(e) AMENDMENT. Section 2(e) of the Forbearance is hereby
deleted and the following substituted in lieu thereof:
"(e) INDENTURE INTEREST AND CHANGE OF CONTROL PAYMENTS. The interest
payment due on September 16, 2002, under the Indenture dated March 18, 1998,
between U.S. Borrower and The Bank of New York, as Trustee (the "Indenture"),
the payment due under Section 4.12 of the Indenture in connection with a Change
of Control (as defined in the Indenture), and any other payments under the
Indenture or the notes issued thereunder (the "Senior Notes") shall not be
made."
2. INTEGRATION. Except with respect to the amendments to the
Forbearance Agreement as set forth in Sections 1 and 1A of this Amendment, the
Forbearance Agreement remains in full force and effect and is integrated in its
entirety into this Amendment. References in the Forbearance Agreement to "this
Agreement" are hereby deemed to include this Amendment.
3. COUNTERPARTS; TELECOPIED SIGNATURES. This Amendment may be executed
in any number of counterparts and by different parties to this Amendment on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall
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constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature hereto.
4. RELEASE OF CLAIMS AND WAIVER. Borrowers and U.S. Guarantors hereby
release, remise, acquit and forever discharge Agent and Lender and Agent's and
Lenders' employees, agents, representatives, consultants, attorneys,
fiduciaries, servants, officers, directors, partners, predecessors, successors
and assigns, subsidiary corporations, parent corporations, and related corporate
divisions (all of the foregoing hereinafter called the "Released Parties"), from
any and all actions and causes of action, judgments, executions, suits, debts,
claims, demands, liabilities, obligations, damages and expenses of any and every
character, known or unknown, direct and/or indirect, at law or in equity, of
whatsoever kind or nature, whether heretofore or hereafter arising, for or
because of any matter or things done, omitted or suffered to be done by any of
the Released Parties prior to and including the date of execution hereof, and in
any way directly or indirectly arising out of or in any way connected to this
Amendment, the Forbearance Agreement, the Credit Agreement, the Security
Documents and other Related Writings (all of the foregoing hereinafter called
the "Released Matters"). Borrowers and U.S. Guarantors acknowledge that the
agreements in this paragraph are intended to be in full satisfaction of all or
any alleged injuries or damages arising in connection with the Released Matters.
Each of the Borrowers and U.S. Guarantors represent and warrant to Lenders and
Agent that it has not purported to transfer, assign or otherwise convey any
right, title or interest of Borrowers or U.S. Guarantors in any Released Matter
to any other Person and that the foregoing constitutes a full and complete
release of all Released Matters.
5. LEGAL REPRESENTATION OF PARTIES. This Amendment was negotiated and
agreed to by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring this Amendment or any
other Loan Document to be construed or interpreted against any party shall not
apply to any construction or interpretation hereof or thereof.
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6. GOVERNING LAW. This Amendment is governed by the laws of the State
of Ohio.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
U.S. BORROWER:
Address: 00000 Xxxxxx Xxxx ADVANCED LIGHTING
Xxxxx, Xxxx 00000 TECHNOLOGIES, INC.
Attention: Treasurer
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Title: Chief Financial Officer
------------------------------
CANADIAN BORROWER:
Address: 00 Xxxxxxxx Xxxx VENTURE LIGHTING POWER
P.O. Box 250 SYSTEMS NORTH AMERICA, INC.
Xxxxxxx, Xxxx Xxxxxx XX0 0X0
Attention: Treasurer
By: /s/ R. Xxxxxxx Xxxxxx
---------------------------------
Title: VP - Finance and Administration
------------------------------
UK BORROWERS:
Address: Xxxxxxxx Xxxxx PARRY POWER SYSTEMS XXXXXXX
Xxxxxxxx
Xxxxx XX00 0XX Xxxxxxx
Attention: Treasurer By: /s/ X. Xxxxx
---------------------------------
Title: Director
------------------------------
Address: Xxxxxxxx Xxxxx VENTURE LIGHTING EUROPE LTD.
Xxxxxxxx
Xxxxx XX00 0XX Xxxxxxx
Attention: Treasurer By: /s/ X. Xxxxx
---------------------------------
Title: Director
------------------------------
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AGENT AND THE BANKS:
Address: PNC Bank, National Association PNC BANK, NATIONAL ASSOCIATION,
1 PNC Plaza as Agent and as a Bank
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx, Xx. By: /s/ Xxxxxxx X. Xxxx, Xx.
---------------------------------
Title: Vice President
------------------------------
Address: Sovereign Bank SOVEREIGN BANK
Xxxxxx 00 & 000-Xxxxxx Xxx
Xxxxxxxxx, XX 00000
Mailcode 20-536-ARO By: /s/ Xxxxx X. Xxxxxxx, Xx.
Attention: Xxxxx Xxxxxxx --------------------------------
Title: Vice President
------------------------------
Address: National City Commercial NATIONAL CITY COMMERCIAL
Finance, Inc. FINANCE, INC.
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Title: Vice President
------------------------------
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CONSENT OF GUARANTOR
The undersigned are the U.S. Guarantors referred to in the Credit
Agreement. The undersigned do hereby consent to the terms of this Amendment and
do hereby ratify and confirm the Guaranty of Payment in all respects. The
undersigned further specifically consent to and join in the agreements, waivers
and releases contained this Amendment.
ADLT Realty Corp. I, Inc.
ADLT Services, Inc.
APL Engineered Materials, Inc.
Ballastronix (Delaware, Inc.)
Lighting Resources International, Inc.
Microsun Technologies, Inc.
Venture Lighting International, Inc.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
-------------------------
Title: Chief Financial Officer
------------------------
of each of the companies listed above
Deposition Sciences, Inc.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
-------------------------
Title: Chief Financial Officer
------------------------
signing for each of the companies listed above
by Power of Attorney
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