EXHIBIT 10.4
AMENDED AND RESTATED FORBEARANCE AGREEMENT
THIS AMENDED AND RESTATED FORBEARANCE AGREEMENT (the "Agreement") is
made and entered into as of this 18th day of October, 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 Credit Agreement among Borrowers, Agent and
Lenders dated May 21, 1999, as amended (the "Credit Agreement"). Borrowers,
Agent and Lenders are collectively referred to herein as "Parties."
RECITALS
A. Under the Credit Agreement, the Lenders agreed to extend an
aggregate Revolving Credit Commitment to Borrowers in the amount of $25,000,000
($17,141,212.42 of which was outstanding as of October 18, 2002 (plus
$265,981.42 of outstanding letters of credit as of such date))(which Revolving
Credit Commitment is reduced hereby) and a Term Loan in the principal amount of
$13,000,000, $9,467,810.00 of which was outstanding at October 18, 2002).
B. The Events of Default (the "Designated Defaults") listed on EXHIBIT
A hereto exist under the Credit Agreement as of the date hereof. On August 29,
2002, Agent, on behalf of Lenders, delivered to Borrowers a written notice of
Event of Default, which Event of Default included the Designated Default with
respect to Section 5.7(a)(fixed charge coverage ratio) of the Credit Agreement.
By reason of the existence of the Designated Defaults, Lenders had no further
obligation to make additional Revolving Loans under the Credit Agreement and had
full legal right to exercise their rights and remedies under the Credit
Agreement, the Security Documents and other Related Writings. Such remedies
include, but are not limited to, the right to possession and sale of all
collateral pledged as security for the Loans under the Security Documents and
other Related Writings (the "Collateral").
C. On September 16, 2002, Borrowers, Agent and Lenders entered in a
Forbearance Agreement (the "September Forbearance Agreement"), pursuant to which
Agent and Lenders agreed to forbear from exercising their remedies under the
Credit Agreement and agreed to continue to make Revolving Loans to Borrowers
until October 10, 2002, subject to the terms and conditions set forth in the
September Forbearance Agreement. On October 10, 2002, Borrowers, Agent and
Lenders entered into a Forbearance Agreement Addendum extending the forbearance
period under the September Forbearance Agreement to October 18, 2002, subject to
the terms and conditions set forth therein (this Addendum, together with the
September Forbearance Agreement, the "Prior Forbearance Agreement").
D. Borrowers have requested that Lenders continue to make Revolving
Loans and forbear for an additional period of time from exercising their rights
and remedies under the Credit Agreement, the Security Documents and other
Related Writings.
E. Lenders are willing to continue to make Revolving Loans to Borrowers
and to continue to forbear in the exercise of their remedies under the Credit
Agreement, the Security Documents and other Related Writings, on the terms and
conditions set forth herein.
AGREEMENT
In consideration of the Recitals and of the mutual promises and
covenants contained herein, Lenders and Borrowers agree as follows:
1. AGREEMENT TO FORBEAR.
(a) FORBEARANCE. During the period (the "Forbearance Period")
commencing on the date hereof and ending on the earlier to occur of March 31,
2003, or the date that any Forbearance Default (as defined in Section 8 hereof)
occurs, Lenders will forbear in the exercise of their rights and remedies under
the Credit Agreement, the Security Documents and other Related Writings with
respect to the Designated Defaults. Without limiting the generality of the
foregoing, during the Forbearance Period, Lenders will not (i) accelerate the
maturity of the Loans or initiate proceedings for the collection of the Loans;
(ii) file or join in filing any involuntary petition in bankruptcy with respect
to any Borrower, or otherwise initiate similar insolvency, reorganization, or
moratorium proceedings for the benefit of creditors of any Borrower; (iii)
repossess or sell, through judicial proceedings or otherwise, any of the
collateral pledged as security under the Credit Agreement, the Security
Documents or other Related Writings (the "Collateral"), PROVIDED that Lenders
shall continue to collect the Receivables and apply proceeds thereof to the
Loans as provided in the Credit Agreement; or (iv) initiate proceedings to
enforce any Guaranty of Payment.
(b) REVOLVING LOANS. During the Forbearance Period, Lenders will
continue to make Revolving Loans to Borrowers not to exceed the amount of the
U.S. Borrowing Base, the EXIM Borrower Base, the Canadian Borrowing Base, and
the U.K. Borrowing Base, as the case may be, and subject to all reserves
established or to be established by, and other rights of, Lenders and Agent, and
all other restrictions and limitations on Borrowers and Loans, as provided in
the Credit Agreement.
(c) INTEREST. During the Forbearance Period, interest shall accrue
on the Loans at the Default Rate.
2. CONDITIONS TO FORBEARANCE. Agent's and Lender's agreement to forbear
as provided in this Agreement is conditioned on the satisfaction of each of the
following conditions on or before the date specified for the satisfaction
thereof as provided below in this Section 2 or as otherwise provided in this
Section 2. Failure to satisfy any of the conditions contained in this Section 2
shall constitute a Forbearance Default.
(a) GUARANTOR'S CONSENT. The U.S. Guarantors shall have executed the
consent at the end of this Agreement as a condition to the initial effectiveness
of this Agreement.
(b) COMMITMENT REDUCTION. Borrowers agree to a reduction in the
Revolving Credit Commitment as more fully set forth in Section 4 of this
Agreement.
(c) INFORMATION REQUIREMENTS. Borrowers shall provide to Lenders and
Agent:
(i) monthly projections and an executive summary prepared by
management for each line of business (corporate, Venture Lighting, APL
and DSI) and as otherwise requested by a Lender or Agent (the "Monthly
Financial Forecast") no later than the 15th day of the immediately
preceding month, which Monthly Financial Forecast shall be reasonably
acceptable to Agent and Lenders;
(ii) 13 week rolling cash flow reports for each line of business
(corporate, Venture Lighting, APL and DSI) and as otherwise requested
by a Lender or Agent on a bi-weekly basis no later than Friday of each
such week;
(iii) a detailed report validated by The Parkland Group of the
future cash sources and uses of Deposition Sciences, Inc. ("DSI") prior
to the date of this Agreement which shall be updated not less often
than monthly and validated by The Parkland Group and, as updated, shall
be satisfactory to Agent and Lenders in form and substance;
(iv) monthly updates of the previously delivered written summary
of all job contracts in progress for DSI and monthly updates of the
previously delivered report from The Parkland Group, in form and
substance satisfactory to Agent and Lenders, as to DSI, which up-dates
shall include (a) for job contracts involving in excess of $500,000,
sources and uses and the impact on cash flow of each contract and the
impact on profitability of each contract, and (b) for job contracts
involving less than $500,000, sources and uses and the impact on cash
flow and the impact on profitability of the contracts on an aggregate
basis;
(v) a list of potential asset sales by Borrowers and proceeds to
be received from such sales have previously been delivered to Agent and
Lenders;
(vi) a copy of the executed engagement letter entered into with
The Parkland Group prior to the date of this Agreement;
(vii) a copy of the engagement letter entered in with Brown,
Gibbons, Lang & Company Securities, Inc. ("Xxxxx Xxxxxxx") and evidence
of the due approval by U.S. Borrower's Board of Directors of the
engagement of Xxxxx Xxxxxxx as lead investment banker, in each case
prior to the date of this Agreement; and
(viii) copies of any other engagement letters presently existing
or hereafter entered into with consultants or outside business
professionals.
(d) FOREIGN CASH. Borrowers caused not less than $1,000,000 of cash
held by foreign Subsidiaries to be transferred to U.S. Borrower and applied to
the outstanding balance under the U.S. Revolving Loan on or before September 20,
2002. Borrowers and each of their respective foreign Subsidiaries will not, at
any time, maintain more than $1,500,000 in cash in the aggregate for all
non-U.S. facilities and operations. Semi-monthly, commencing not later than
October 25, 2002, Borrowers shall cause all cash held by foreign Subsidiaries in
excess of $1,500,000 in the aggregate to be transferred to U.S. Borrower and
applied to the outstanding balance under the U.S. Revolving Loan. Borrowers will
provide to Agent and Lenders upon request information regarding foreign
Subsidiary cash.
(e) INDENTURE INTEREST PAYMENT. The interest payment due on
September 16, 2002, and any other payments, under the Indenture dated March 18,
1998, between U.S. Borrower and The Bank of New York, as Trustee (the
"Indenture"), or the notes issued thereunder (the "Senior Notes") shall not be
made.
(f) THE PARKLAND GROUP. Borrowers will continue to engage The
Parkland Group, or other consultant reasonably acceptable to Agent and Lenders,
for purposes of seeking a refinancing of the indebtedness of Borrowers under the
Credit Agreement and to address operational issues.
(g) INVESTMENT BANKER; SALE TRANSACTION.
(i) Commencing on or prior to the date hereof, Borrowers shall
continuously employ, at their sole cost and expense, an investment
banker reasonably acceptable to the Agent and Lenders (the "Lead
Investment Banker") (it being understood and acknowledged by the Agent
and Lenders that Xxxxx Xxxxxxx, an investment banking firm which has
been engaged by Borrowers, is an acceptable Lead Investment Banker),
for the purpose of the repayment and satisfaction of the Debt in full
through the sale or disposition of all or a significant portion of the
assets and/or stock of Borrowers, whether effected in one transaction
or a series of transactions by (i) a merger, consolidation,
reorganization or other business combination pursuant to which the
businesses, assets and/or equity of Borrowers, or a significant portion
thereof, are combined with that of a purchaser; (ii) the acquisition,
directly or indirectly, by a purchaser of all or a significant portion
of the capital stock or assets of Borrowers, by way of tender or
exchange offer, negotiated purchase or otherwise; or (iii) any other
acquisition, directly or indirectly, by a purchaser of control of the
Borrowers, or a significant portion of the Borrowers' assets (each, a
"Sale Transaction");
(ii) Borrowers shall continuously and promptly cooperate with
the Lead Investment Banker to provide all requested financial and other
information as the Lead Investment Banker may reasonably request,
identify prospective purchasers and advise the Lead Investment Banker
of the same, initiate and conduct discussions with prospective
purchasers, negotiate terms and conditions of potential Sale
Transactions and respond to all other reasonable requests made by the
Lead Investment Banker in connection with the performance by the Lead
Investment Banker of its duties to effectuate a Sale Transaction;
(iii) On or before November 18, 2002, Borrowers shall deliver or
cause to be delivered to Agent and Lenders, a sale book prepared by the
Lead Investment Banker, to be delivered to prospective purchasers of
the Borrowers, together with a list of the prospective purchasers to be
contacted by the Lead Investment Banker;
(iv) On or before December 9, 2002, the Lead Investment Banker
shall have initiated direct contacts with prospective purchasers to
discuss the information contained in the sale book, to arrange for
meetings with management and to arrange for the commencement of due
diligence by prospective purchasers;
(v) On or before December 31, 2002, prospective purchasers shall
be provided with all materials and information regarding Borrowers as
may be necessary, or as may be requested by prospective purchasers, to
perform due diligence and to evaluate a purchase of all or any portion
of Borrowers;
(vi) On or before December 31, 2002, there shall have occurred
meetings among the Lead Investment Banker, the Company and prospective
purchasers and the Lead Investment Banker shall have received written
preliminary indications of interest from prospective purchasers;
(vii) On or before January 31, 2003, Borrowers shall deliver or
cause to be delivered to Agent and Lenders one or more bona fide
written letters of intent contemplating a Sale Transaction from one or
more prospective purchasers reasonably satisfactory to Agent and
Lenders, with terms and conditions reasonably satisfactory to Agent and
Lenders;
(viii) On or before February 15, 2003, Borrowers shall deliver
or cause to be delivered to Agent and Lenders, a form of purchase
agreement, in form and substance satisfactory to Agent and Lenders, for
one or more Sale Transactions;
(ix) On or before March 31, 2003, a Sale Transaction consented
to by Agent and Lenders shall be consummated;
(x) Borrowers shall deliver, or cause to be delivered to Agent
for the benefit of Lenders, at the closing of any Sale Transaction, the
net proceeds realized from such Sale Transaction (the "Net Sale
Proceeds"), which proceeds shall be applied against the Debt owed to
Lenders under and in accordance with the provisions of the Credit
Agreement; the Borrowers acknowledge and agree that until such funds
are applied against the Debt, such funds shall continue to be
collateral security for the Debt; and
(xi) During the Sale Transaction process, Borrowers shall
deliver or cause to be delivered to Agent and Lenders, periodic reports
not less often than twice per month and at all times as may be
requested by Agent and Lenders, in writing or by conference call or
both, of the Lead Investment Banker as to the status of the Sale
Transaction process and all other activities of the Company and the
Lead Investment Banker in connection with a recapitalization,
reorganization, restructuring or refinancing of the Company and shall
permit Agent and Lenders to have reasonable direct access to
the Lead Investment Banker, at such times as they may request, to
discuss the Sale Transaction process; and
(xii) On or before March 31, 2003, pursuant to a Sale
Transaction or otherwise, the Debt shall be satisfied and repaid in
full.
(h) SALE, DISPOSITION OR CAPITAL RESTRUCTURING PROPOSALS. Borrowers
shall not enter into any agreement restricting in any way their ability to
pursue sale, disposition, capital restructuring, or refinancing options unless:
(A) Borrowers have received a written opinion of the Lead Investment Banker to
the effect that, based on a documented process of soliciting bona fide proposals
from qualified bidders (whose qualifications have been verified), such agreement
(x) constitutes a favorable proposal for Borrowers, (y) is sufficient to satisfy
on a timely basis the Debt in full, and (z) is not subject to any conditions the
timely satisfaction of which is not anticipated, and (B) a copy of the agreement
has been provided to Agent and Lenders and such agreement provides for the
satisfaction in full of the Debt within not more than thirty (30) days from the
date of execution thereof.
(i) COPIES OF REPORTS, ETC. Borrowers shall deliver, or cause to be
delivered, to Agent and Lenders, copies of all reports, analyses and other
documents furnished by the Borrowers or any of their Affiliates to the Lead
Investment Banker, or to any prospective third party lender, investor or
purchaser with respect to a possible Sale Transaction or the refinancing of the
Debt owed to Agent and Lenders within one (1) business day of the date such
reports, analyses and other documents are furnished to the Lead Investment
Banker, or any prospective third party lender, investor or purchaser.
(j) VARIANCES FROM PLAN. The financial condition and performance of
Borrowers (inclusive of DSI) shall not at any time or for any monthly period, as
applicable, vary adversely from the Monthly Financial Forecast delivered the
immediately preceding month for that period by more than 10% as to any
performance measure set forth in the forecast.
(k) NO ACTION BY OTHER CREDITORS. No action shall be taken by any
holder of the Senior Notes or any other holder of indebtedness of any Borrower
for borrowed money, and no holder of the Senior Notes, or of indebtedness of any
Borrower for borrowed money, shall notify (orally or in writing) any Borrower of
its intent to take any action, to (A) accelerate the maturity of the obligations
owed to such party by any Borrower, (B) initiate proceedings to enforce or
collect the obligations owed to such party by any Borrower, (C) file or join in
filing any involuntary petition in bankruptcy with respect to any Borrower, or
otherwise initiate or participate in any similar insolvency, reorganization or
moratorium proceeding for the benefit of any creditor of any Borrower, (D)
repossess or sell, or initiate any proceedings (whether judicial or otherwise)
to repossess or sell any assets of, or collateral pledged as security by, any
Borrower, or (E) initiate proceedings to enforce any guaranty provided by
Borrower.
(l) MINIMUM EXCESS AVAILABILITY. Borrower shall comply at all times
during the Forbearance Period with the Total Unused Credit Availability
requirement of $3,000,000.
(m) PAYMENT OF EXPENSES. Borrowers reimburse Agent and each of the
Lenders, on a current and past due basis immediately upon presentation of an
invoice, for all
costs and expenses (including attorneys' fees) incurred by Agent or any of the
Lenders in connection with the preparation of this Agreement, the Prior
Forbearance Agreement, amendments to the Credit Agreement, the Export Credit
Agreement or otherwise related to the Debt or the Credit Agreement; without
limitation, any such costs and expenses evidenced by invoices presented to the
Borrowers on or before the date of this Agreement shall be paid no later than
October 18, 2002.
(n) NO ADDITIONAL EVENTS OF DEFAULT. There shall not occur any Event
of Default other than the Designated Defaults.
(o) FORBEARANCE FEE. Borrowers shall pay Agent, for the benefit of
the Lenders, on or before October 18, 2002, a forbearance fee in the amount of
$300,000.
3. FINANCIAL RESTRUCTURING. Agent and Lenders acknowledge that
Borrowers have indicated their intention to pursue a financial restructuring,
which may be effected through, among other things, raising additional equity,
the conversion of existing non-senior debt to equity, and/or obtaining
replacement debt financing which, when taken together, will be sufficient to
repay and satisfy the Debt in full (a "Restructuring"). Agent and Lenders
acknowledge and agree that Borrowers, at their option and with the assistance of
the Lead Investment Banker, concurrently with the Sale Transaction process set
forth herein in Section 2(g) as a condition to forbearance, may pursue a
Restructuring. Notwithstanding the foregoing, in no event shall the process of
attempting to complete a Restructuring replace, mitigate or diminish in any way
the conditions to forbearance relating to the completion of a Sale Transaction
and the Sale Transaction process contained in Section 2(g) hereof absent the
full repayment and satisfaction of the Debt.
4. COMMITMENT REDUCTION. Borrowers hereby agree to a reduction in the
Total Commitment Amount to $36,000,000, in the Maximum Revolving Credit
Commitment Amount to $23,000,000 and in the U.S. Revolving Credit Commitment to
$13,000,000, as more fully set forth on EXHIBIT C hereto, which EXHIBIT C
contains the amended and restated above definitions and an amended and restated
Schedule I to the Credit Agreement.
5. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and
warrant to Agent and Lenders as follows:
(a) RECITALS. The Recitals in this Agreement are true and correct in
all respects.
(b) INCORPORATION OF REPRESENTATIONS. All representations and
warranties of Borrower in the Credit Agreement are incorporated herein in full
by this reference and are true and correct as of the date hereof except as set
forth as EXHIBIT B hereto.
(c) CORPORATE POWER; AUTHORIZATION. Each Borrower has the power, and
has been duly authorized by all requisite action, to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement has been duly
executed and delivered by Borrowers.
(d) ENFORCEABILITY. This Agreement is the legal, valid and binding
obligation of Borrowers, enforceable against each Borrower in accordance with
its terms.
(e) NO VIOLATION. Borrowers' execution, delivery and performance of
this Agreement do not and will not (i) violate any law, rule, regulation or
court order to which any Borrower is subject; (ii) conflict with or result in a
breach of any Borrower's constituent formation documents or any agreement or
instrument to which any Borrower is party or by which it or its properties are
bound, or (iii) result in the creation or imposition of any lien, security
interest or encumbrance on any property of a Borrower, whether now owned or
hereafter acquired, other than liens in favor of Lenders.
(f) OBLIGATIONS ABSOLUTE. The obligation of Borrowers to repay the
Loans, together with all interest accrued thereon, is absolute and
unconditional, and there exists no right of set off or recoupment, counterclaim
or defense of any nature whatsoever to payment of the obligations.
(g) NO DEFAULTS. There are no Unmatured Events of Default or Events
of Default under the Credit Agreement other than the Designated Defaults.
6. COMPLIANCE WITH CREDIT AGREEMENT. Borrowers agree that, during the
Forbearance Period, they will continue to comply with all covenants and other
obligations of Borrowers under the Credit Agreement, the Security Documents and
the other Related Writings; provided, that the Borrowers shall not be required
to cure the Designated Defaults during the Forbearance Period.
7. COLLATERAL.
(a) DISPOSITION OF COLLATERAL. Each Borrower and each U.S. Guarantor
each hereby renounce and waive all rights that are waivable under Article 9 of
the Uniform Commercial Code (the "UCC") (or similar laws governing secured
transactions in foreign jurisdictions) of any jurisdiction in which any
Collateral may now or hereafter be located. Without limiting the generality of
the foregoing, each Borrower and each U.S. Guarantor each hereby (i) renounce
any right to receive notice of any disposition by Lenders of the Collateral
pursuant to Section 9-611 of the UCC or otherwise upon termination of the
Forbearance Period, whether such disposition is by public or private sale under
the UCC or otherwise, and (ii) waive any rights relating to compulsory
disposition of the Collateral pursuant to Sections 9-620 of the UCC or similar
provision.
(b) CONSENT TO RELIEF FROM AUTOMATIC STAY. Borrowers hereby agree
that if they shall (i) file with any bankruptcy court of competent jurisdiction
or be the subject of any petition under Title 11 of the U.S. Code, as amended,
(ii) be the subject of any order for relief issued under such Title 11 of the
U.S. Code, as amended, (iii) file or be the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency, or other relief for debtors, (iv)
seek, consent to or acquiesce in the appointment of any trustee, receiver,
conservator or liquidator, (v) be the subject of any order, judgment or decree
entered by any court of competent jurisdiction approving a petition filed
against Borrowers for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency, or relief
for debtors, Lenders and Agent shall thereupon be entitled to relief from any
automatic stay imposed by Section 362 of Title 11 of the U.S. Code, as amended,
or from any other stay or suspension of remedies imposed in any other manner
with respect to the exercise of the rights and remedies otherwise available to
Lenders and Agent under the Credit Agreement, the Security Documents or other
Related Writings.
(c) APPOINTMENT OF RECEIVER. Borrowers agree that, upon termination
of the Forbearance Period, Lenders shall be entitled to appointment of a
receiver for the Collateral.
8. DEFAULT. Each of the following shall constitute a "Forbearance
Default" hereunder:
(a) the existence of any Event of Default (other than the Designated
Defaults) under the Credit Agreement;
(b) failure to keep or perform any of the covenants or agreements
contained herein or in the Credit Agreement, the Security Documents or the other
Related Writings;
(c) any representation or warranty of Borrowers herein or in the
Credit Agreement, the Security Documents or the other Related Writings, other
than as set forth on EXHIBIT B hereto, shall be false, misleading or incorrect
in any material respect; or
(d) the failure by Borrowers to satisfy fully and in a timely manner
any condition to Agent's and Lenders' forbearance contained in Section 2 of this
Agreement.
Borrowers agree that the Credit Agreement shall be, and hereby is,
amended to provide that any Forbearance Default hereunder shall constitute an
Event of Default under the Credit Agreement.
9. EFFECT AND CONSTRUCTION OF AGREEMENT. Except as expressly provided
herein, the Credit Agreement, the Security Documents and the other Related
Writings shall remain in full force and effect in accordance with their
respective terms, and this Agreement shall not be construed to:
(i) impair the validity, perfection or priority of any lien or
security interest securing the Debt;
(ii) waive or impair any rights, powers or remedies of Lenders
under the Credit Agreement, the Security Documents and the other
Related Writings upon termination of the Forbearance Period, with
respect to the Designated Defaults or otherwise;
(iii) constitute an agreement by Lenders and/or Agent or
require Lenders and/or Agent to extend the Forbearance Period, or grant
additional forbearance periods, or extend the term of the Credit
Agreement or the time for payment of any of the Debt; or
(iv) make any Loans or other extensions of credit to Borrowers
after termination of the Forbearance Period or otherwise in accordance
with the terms of the Credit Agreement.
In the event of any inconsistency between the terms of this Agreement and the
Credit Agreement, the Security Documents or other Related Writings, this
Agreement shall govern. Borrowers acknowledge that they have consulted with
counsel and with such other experts and advisors as they have deemed necessary
in connection with the negotiation, execution and delivery of this Agreement.
This Agreement shall be construed without regard to any presumption or rule
requiring that it be construed against the party causing this Agreement or any
part hereof to be drafted.
10. EXPENSES. Borrowers agree to pay all costs, fees and expenses of
each of the Lenders and Agent (including the fees of counsel) incurred by each
of the Lenders and Agent in connection with the negotiation, preparation,
administration and enforcement of this Agreement to be paid immediately upon
presentation of the invoice therefor.
11. MISCELLANEOUS.
(a) NO COURSE OF DEALING; COMMUNICATIONS. Except as provided in
this Agreement, Agent and Lenders expressly reserve all rights and remedies they
may have against Borrowers, and any and all additional borrowers, guarantors,
debtors and/or obligors for the Loans. Borrowers specifically acknowledge and
agree that neither Agent nor any Lender has made any promise, commitment or
representation whatsoever, nor has Agent or any Lender any obligation to
Borrowers to modify the terms of the Credit Agreement, any Security Document or
other Relating Writing or the Loans, offer any discounted payoff of the Loans,
refinance the Loans, grant any forbearance (other than as provided in this
Agreement), extend the payment terms of the Loans or extend any other financial
accommodation to Borrowers.
(b) FURTHER ASSURANCE. Borrowers agree to execute such other and
further documents and instruments as Lenders and Agent may request to implement
the provisions of this Agreement and to perfect and protect the liens and
security interests created by the Credit Agreement, the Security Documents and
the other Related Writings.
(c) BENEFIT OF AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. No other person or entity shall be entitled
to claim any right or benefit hereunder, including, without limitation, the
status of a third-party beneficiary of this Agreement.
(d) INTEGRATION. This Agreement, together with the Credit
Agreement, the Security Documents and the other Related Writings, constitutes
the entire agreement and understanding among the parties relating to the subject
matter hereof, and supersedes all prior proposals, negotiations, agreements and
understandings relating to such subject matter, including, without limitation,
the Prior Forbearance Agreement. In entering into this Agreement, Borrowers
acknowledge that they are relying on no statement, representation, warranty,
covenant or agreement of any kind made by the Agent or Lenders (or any employee
or agent thereof), except for the agreements of Lenders and Agent set forth
herein.
(e) SEVERABILITY. The provisions of this Agreement are intended to
be severable. If any provisions of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
enforceability without in any manner affecting the validity or enforceability of
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
(f) COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement may be
executed in any number of counterparts and by different parties to this
Agreement on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
(g) NOTICES. Any notices with respect to this Agreement shall be
given in the manner provided for in the Credit Agreement.
(h) SURVIVAL. All representations, warranties, covenants,
agreements, undertakings, waivers and releases of or given by Borrowers and U.S.
Guarantors contained herein shall survive the termination of the Forbearance
Period and payment in full of the Debt.
(i) AMENDMENT. No amendment, modification, rescission, waiver or
release of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by the parties hereto.
12. 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
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.
13. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
governed by and construed in accordance with the laws of the State of Ohio and
the respective rights and obligations of Borrowers and the Lenders shall be
governed by Ohio law, without regard to
principles of conflict of laws. Each Borrower hereby irrevocably submits to the
non-exclusive jurisdiction of any Ohio state or federal court sitting in
Cleveland, Ohio, over any action or proceeding arising out of or relating to
this Agreement, the Debt or any Related Writing, and each Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Ohio state or federal court. Each Borrower, on
behalf of itself and its Subsidiaries, hereby irrevocably waives, to the fullest
extent permitted by law, any objection it may now or hereafter have to the
laying of venue in any action or proceeding in any such court as well as any
right it may now or hereafter have to remove such action or proceeding, once
commenced, to another court on the grounds of FORUM NON CONVENIENS or otherwise.
Each Borrower agrees that a final, nonappealable judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
14. LEGAL REPRESENTATION OF PARTIES. This Agreement was negotiated by
the parties with the benefit of legal representation and any rule of
construction or interpretation otherwise requiring this Agreement or any other
Loan Document to be construed or interpreted against any party shall not apply
to any construction or interpretation hereof or thereof.
15. JURY TRIAL WAIVER. EACH BORROWER, AGENT AND EACH OF THE LENDERS
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWERS, AGENT AND THE LENDERS,
OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT
IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY AGENT'S OR ANY LENDER'S ABILITY
TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION
CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG
BORROWERS, AGENT AND THE LENDERS, OR ANY THEREOF.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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
X.X. Xxx 000 XXXXXXX, XXXXX XXXXXXX, INC.
Xxxxxxx, Xxxx Xxxxxx XX0 0X0
Attention: Treasurer
By: /s/ R. Xxxxxxx Xxxxxx
----------------------------------
Title: V P Finance and Administration
UK BORROWERS:
Address: Xxxxxxxx Xxxxx PARRY POWER SYSTEMS LIMITED
Draycott
Derby DE72 3PW England
Attention: Treasurer By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Title: Director
Address: Xxxxxxxx Xxxxx VENTURE LIGHTING EUROPE LTD.
Xxxxxxxx
Xxxxx XX00 0XX Xxxxxxx
Attention: Treasurer By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Title: Director
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
Routes 30 and 000, Xxxxxx Xxx
Xxxxxxxxx, XX 00000
Mailcode 20-536-ARO
Attention: Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx, Xx.
----------------------------------
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
CONSENT OF GUARANTORS
The undersigned are the U.S. Guarantors referred to in the Credit
Agreement. The undersigned do hereby consent to the terms of this Agreement 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 Agreement.
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
EXHIBIT A
EVENTS OF DEFAULT
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 ending and at
June 30, 2002.
An Event of Default under Section 7.11 of the Credit Agreement due to the
non-payment of interest due September 16, 2002, under the Indenture.
An Event of Default under Section 5.3(a) as to failure to deliver annual
financial statements for the fiscal year ended June 30, 2002 as required by
Section 5.3(a).
EXHIBIT B
EXCEPTIONS TO REPRESENTATIONS
AND WARRANTIES
Any exception to the representations and warranties resulting from the existence
of a Designated Default.
Any exception contained in the Disclosure Statement and any transaction entered
into after May 21, 1999, and permitted under the Credit Agreement or otherwise
consented to by Agent and/or Lenders in accordance with the terms of the Credit
Agreement or included in the preliminary financial statements delivered to Agent
prior to the date of this Agreement.
EXHIBIT C
COMMITMENT REDUCTION
"Maximum Revolving Credit Commitment Amount" shall mean Twenty One
Million Dollars ($23,000,000), or such lesser amounts as shall be determined
pursuant to Section 2.8 hereof.
"Total Commitment Amount" shall mean the principal amount of Thirty
Four Million Dollars ($36,000,000), or such lesser amounts as shall be
determined pursuant to Section 2.8 hereof.
"U.S. Revolving Credit Commitment" shall mean the obligation
hereunder of the Banks to make U.S. Revolving Loans and to participate in the
making of U.S. Letters of Credit up to an aggregate principal amount outstanding
at any time equal to the lesser of (a) Thirteen Million Dollars ($13,000,000),
or (b) the U.S. Borrowing Base (or such lesser amount as shall be determined
pursuant to Section 2.8 hereof).
SCHEDULE I
------------------------------------------------------------------------------------------------------------------------------------
Canadian Export
U.S. Revolving Revolving UK Revolving Revolving
Credit Credit Credit Credit Term Loan
Financial Commitment Commitment Commitment Commitment Commitment Commitment
Institution Percentage Amount Amount Amount Amount Amount Maximum Amount
----------------------- ----------- ---------------- -------------- ---------------- ------------- ---------------- ----------------
PNC Bank, National 50% $6,500,000.00 $2,000,000.00 $3,000,000.00 $2,000,000 $6,500,000.00 $18,000,000.00
Association
----------------------- ----------- ---------------- -------------- ---------------- ------------- ---------------- ----------------
National City 25% $3,250,000.00 $1,000,000.00 $1,500,000.00 $1,000,000 $3,250,000.00 $9,000,000.00
Commercial Finance,
Inc.
----------------------- ----------- ---------------- -------------- ---------------- ------------- ---------------- ----------------
Sovereign Bank 25% $3,250,000.00 $1,000,000.00 $1,500,000.00 $1,000,000 $3,250,000.00 $9,000,000.00
----------------------- ----------- ---------------- -------------- ---------------- ------------- ---------------- ----------------
Total 100% $13,000,000.00 $4,000,000.00 $6,000,000.00 $4,000,000 $13,000,000.00 $36,000,000.00
----------------------- ----------- ---------------- -------------- ---------------- ------------- ---------------- ----------------
Maximum Revolving $23,000,000.00
Credit Commitment
Amount
----------------------- ----------- ---------------- -------------- ---------------- ------------- ---------------- ----------------
Maximum Term Loan $13,000,000.00
Commitment Amount
----------------------- ----------- ---------------- -------------- ---------------- ------------- ---------------- ----------------
Total Commitment $36,000,000.00
Amount
----------------------- ----------- ---------------- -------------- ---------------- ------------- ---------------- ----------------
