BANK OF MONTREAL
CORPORATE FINANCE
PERSONAL AND COMMERCIAL FINANCIAL SERVICES
000 Xx. Xxxxxxx Xxxxxx, 0xx xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Telephone No (000) 000-0000
Telecopier No (514) 877-7704
December 15th, 1999
Xx. Xxxxx Xxxxx
Genlyte Xxxxxx Group Nova Scotia XXX
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
P.O. Box 35120
Louisville, Kentucky
USA, 40232
SUBJECT: FINANCING AGREEMENT
Dear Xx. Xxxxx,
We are pleased to offer Genlyte Xxxxxx Group Nova Scotia ULC the
following credit facility, subject to the terms and conditions outlined below.
This Financing Agreement replaces and supercedes our initial Offer dated
November 23rd, 1999:
BORROWER: Genlyte Xxxxxx Group Nova Scotia ULC (referred to
herein as the "Borrower").
LENDER: Bank of Montreal, at its Branch located 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx, XXX, 00000 (the "Bank").
TYPE OF CREDIT
AND AMOUNT:
364 day, Committed non-revolving facility for up to
CDN$10,000,000 and/or its US $ equivalent, by way of:
Canadian Prime Rate Based Loan in CDN $ ("Prime Based
Loan"); and/or
US Prime Rate Based Loan in US$ ("US Prime Based Loan");
and/or
London InterBank Offered Rate Notes in CDN $ and/or US $
("LIBOR");
(called the "Facility")
Page 1 of 14
Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
PURPOSE: To provide funds to repay 33.3% of a Bridge Loan
outstanding with The Toronto-Dominion Bank used for the
acquisition of the assets (including goodwill) of Ledalite
Architectural Products Inc.
AVAILABILITY: By way of one single advance (referred to herein as the
"Loan").
REPAYMENT: The loan shall be repayable on the Maturity Date.
MATURITY
DATE: 1 Business day prior to the first anniversary date of the
acceptance by the Borrower of this Financing Agreement
unless extended as provided herein (the "Maturity Date").
Any extension (Maximum 4) of the Maturity Date shall be
conditional upon the Borrower repaying on the last day of
the then current Maturity Date an amount equal to:
First extension: CDN$ 500,000
Second extension CDN$1,000,000
Third extension CDN$1,500,000
Fourth extension CDN$2,000,000
Final Maturity Date CDN$5,000,000
EXTENSION OF
MATURITY DATE:
The Borrower is deemed to have requested the Bank at least
60 days prior to the then current Maturity Date to extend
the Maturity Date for a period of no more than 364 days
starting on the day of the then current Maturity Date.
The Bank shall be deemed to have granted such extension if
the Bank has not otherwise advised the Borrower in writing
30 days prior to the current Maturity Date. The Bank shall
have entire discretion to grant or not to grant any such
extension and upon such terms and conditions as it deems
appropriate.
Page 2 of 14
Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
INTEREST RATES
AND SPREADS: CDN Prime / US Prime Spread: 0 Basis points
LIBOR Spread: 50 Basis points
US Prime Rate means the rate of interest per annum (based
on a 365/366 day year) established by the Bank from time to
time as the reference rate of interest for the
determination of interest rates that the Bank charges to
customers of varying degrees of creditworthiness for US
dollar loans made by it in the United States.
CDN Prime Rate means the rate of interest per annum (based
on a 365/366 day year) established by the Bank from time to
time as the reference rate of interest for determination of
interest rates that the Bank charges to customers of
varying degrees of creditworthiness for Canadian dollar
loans made by it in the United States.
LIBOR in respect of a LIBOR advance means the rate of
interest per annum (based on a 360 day year) as determined
by the Bank (rounded upwards, if necessary to the nearest
whole multiple of 1/16th of 1%) at which the Bank may make
available United States dollars or Canadian Dollars, as the
case may be, which are obtained by the Bank in the
InterBank Euro Currency Market, London, England at
approximately 11:00 a.m. (Toronto time) on the second
business day before the first day of, and in an amount
similar to, and for the period similar to the interest
period of, such LIBOR advance.
Any interest rate based on a period less than a year
expressed as an annual rate for the purposes of the
Interest Act (Canada) is equivalent to such determined rate
multiplied by the actual number of days in the calendar
year in which the same is to be ascertained and divided by
the number of days in the period upon which it was based.
INTEREST
CALCULATION
AND PAYMENT: Interest on CDN Prime Based Loans and US Prime Based Loans
is calculated daily and payable monthly in arrears based on
the number of days which the loan is outstanding.
Interest on LIBOR Loans is calculated and payable on the
earlier of contract maturity or quarterly in arrears and on
contract maturity, for the number of days in the LIBOR
interest period.
Interest is payable both before and after demand, default
and judgment. All interest shall be payable at the above
referred to rates plus applicable spreads mentioned above.
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Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
DRAWDOWN: As required upon satisfaction of conditions precedent, but
no later than December 31st, 1999 (to coincide with expiry
of the 90 day Bridge loan with the Toronto-Dominion Bank).
CDN PRIME RATE BASED LOANS AND/OR
US PRIME RATE BASED LOANS
The minimum amount of drawdown by way of CDN Prime Based
Loans and/or US Prime Based Loans is $500,000.
LIBOR
The Borrower shall advise the Bank of the requested LIBOR
contract maturity or interest period. The Bank shall have
the discretion to restrict the LIBOR contract maturity, for
periods between 30 to 180 days, subject to availability.
The minimum amount of a drawdown by way of a LIBOR loan is
$1,000,000, and shall be in multiples of $500,000
thereafter.
The Borrower will provide the Bank with 2 business days
notice of a requested LIBOR loan.
TAXATION
ON PAYMENTS: All payments made be the Borrower to the Bank will be made
free and clear of all present and future taxes (excluding
the taxes on the net income of the Bank), withholdings or
deductions of whatever nature. If these taxes, withholdings
or deductions are required by applicable law and are made,
the Borrower, shall as a separate and independent
obligation pay to the Bank all such additional amounts as
shall fully indemnify the Bank from any such taxes,
withholding or deduction.
SECURITY: The following security shall be provided prior to first
drawdown, and shall be acceptable to the Bank and its legal
counsel:
1) Irrevocable and Unconditional Standby Letter of Credit
(L/C) in favour of the Bank for an amount of
CDN$10,000,000 or its US$ equivalent issued by Bank of
America, N.A. The letter shall bear an initial term of
no less than 364 days, with a provision for automatic
renewal without amendment unless notified via tested
telex/authenticated swift at least 60 days prior to the
Maturity Date, subject to the satisfaction of the Bank.
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Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
If the Letter of Credit is issued in US$, to the extent
if any, that at any time the Letter of Credit value is
less than the equivalent amount of the facility due to
fluctuations in the exchange rate by which such
equivalence is determined (a "deficiency"), then upon
demand by the Bank the Borrower shall:
a) Immediately prepay the amount of the deficiency, or
b) Deposit the amount of the deficiency with the Bank
and grant it a security interest in the cash
collateral, or
c) Immediately increase the amount of the outstanding
Letter of Credit sufficient enough to satisfy the
Bank.
2) To ensure that there is appropriate coverage in favor of
the Bank in the event of an adverse currency fluctuation
between the US$ and CDN$, Genlyte Xxxxxx Group LLC shall
upon issuance of the Letter of Credit, provide the Bank
with a written undertaking to pay to the Bank on the
date the Bank demands payment from Bank of America, N.A.
under the Letter of Credit, a sum equal to the
difference, if any, between the proceeds received from
the financial institution which issued the letter of
credit and the then outstanding indebtedness owing by
the Borrower to the Bank as expressed in CDN$. This
undertaking shall remain in full force and effect as
long as there exists any outstanding indebtedness owing
to the Bank by the Borrower.
(All of the above security shall be referred to
collectively in this agreement as "Bank Security").
CONDITIONS
PRECEDENT: The obligation of the Bank to make and keep on its books
any loan hereunder is subject to the following conditions
precedent :
a) The Bank shall have received the following documents
which shall be in form and substance satisfactory to
the Bank and its legal counsel :
i) Xxxx executed copy of this Financing Agreement
signed by all parties, with the appropriate
resolutions and legal opinions.
ii) A copy of The Genlyte Xxxxxx Group Incorporated
September 30th, 1999 quarterly financial
statements, and related Genlyte Xxxxxx Group LLC
attachments, accompanied by a compliance
certificate from the Chief Financial Officer
confirming that they are in compliance with the
credit agreement dated August 30th, 1999.
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Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
iii) A copy of the last form 10-Q and 10-K for The
Genlyte Group Incorporated and Xxxxxx Industries
Inc, respectively;
iv) All of the Bank Security and supporting
resolutions required hereunder and solicitors
letter of opinion;
v) Any other documents deemed necessary by the Bank
and its legal counsel.
b) The Borrower has paid the Arrangement Fee and all legal
expenses incurred by the Bank in connection with this
Financing Agreement and/or the Bank Security.
c) No Event of Default shall have occurred.
REPRESENTATIONS
AND WARRANTIES:
The Borrower hereby represents and warrants, which
representations and warranties shall be deemed to be
continually repeated so long as any amounts remain
outstanding and unpaid under this agreement or so long as
the commitment under this Agreement remains in effect,
that :
a) The Borrower is a corporation duly incorporated and
organized, validly existing and in good standing under
the laws of Nova Scotia and has adequate corporate
power and authority to carry on its business, own
property, borrow monies and enter into agreements
therefor, execute and deliver the documents required
hereunder, and observe and perform the terms and
provisions of this Agreement.
b) There are no laws, statutes or regulations applicable
to or binding upon the Borrower and no provisions in
its Articles or in any by-laws, resolutions, contracts,
agreements, or arrangements which would contravene,
breach, default or violate the execution, delivery,
performance, observance, of any terms of this
Agreement.
c) No Event of Default has occurred nor has any event
occurred which, in time, would constitute an Event of
Default under this Agreement or which would constitute
a default under any other agreement.
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Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
d) There are no actions, suits or proceedings, including
appeals or applications for review, or any knowledge of
pending actions, etc..., against the Borrower and its
subsidiaries, before any court or administrative agency
which would result in any material adverse change in
the property, assets, financial conditions, and
business or operations of the Borrower.
e) All material authorizations, approvals, consents,
licenses, exemptions, filings, registrations,
notarizations and other requirements of governmental,
judicial and public bodies and authorities required
reasonably necessary to carry on its business have been
or will be obtained or effected and are or will be in
full force and effect.
f) The financial statements delivered to the Bank fairly
present the present financial position of the Borrower
and Genlyte Xxxxxx Group LLC, and have been prepared by
their auditors in accordance with Generally Accepted
Accounting Principles.
g) All the remittances required to be made by the Borrower
to the federal, provincial and municipal governments
have been made, are currently up to date and there are
no outstanding arrears. Without limiting the foregoing,
all employee deductions (including Income Taxes,
Unemployment, insurance and Canada Pension Plan), sales
taxes (both provincial and federal), corporate income
taxes, payroll taxes and workmen's compensation dues
are currently paid and up to date.
POSITIVE
COVENANTS: As long as any loans or commitment of the Bank remain
outstanding, the Borrower and Genlyte Xxxxxx Group LLC
will :
a) Cause to be paid all amounts, interest and fees on the
dates, times and place specified herein or under any
other agreement between the Bank and the Borrower.
b) Provide The Genlyte Group Incorporated quarterly
audited consolidated financial statements and annual
audited consolidated financial statements within 60 and
120 days of each respective period and related Genlyte
Xxxxxx Group LLC attachments, accompanied by a
compliance certificate from the Chief Financial Officer
confirming that all terms and conditions are in
compliance with this
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Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
Agreement and that no event has occurred that is, or
with the passing of time may become, an Event of
Default under this Agreement or a default under any
other agreement.
c) Provide the Bank with information and financial data as
it may reasonably request from time to time.
d) The Borrower agrees that in the event it provides any
security interest, assignment or other interest in any
of its assets or more favorable covenants and/or
pricing to any other secured party or secured lender,
that it shall provide equal ranking and equal value
security over such assets and covenants and/or pricing
to the Bank.
EVENTS
OF DEFAULT: The Bank has the right to accelerate the payment of
principal and accrued interest under the credit facility
at any time after the occurrence of any one of the
following Events of Default:
a) The failure of the Borrower to provide to the Bank the
renewal of the irrevocable and unconditional standby
letter of credit without amendment as referred to under
the heading "Security", 60 days prior to the then
current expiry date of the said letter of credit.
b) Non-payment of principal when due or non-payment of
interest or fees within 3 business days of when due or
when demanded.
c) The failure of the Borrower and/or Genlyte Xxxxxx Group
LLC to fulfill any of the terms and conditions
contained in this Agreement or any security document(s)
or any other agreement with the Bank and such default
continues unremedied for five (5) business days after
the occurrence.
d) The Borrower or Genlyte Xxxxxx Group LLC become
insolvent or Bankrupt.
e) Any representation or warranty is inaccurate in any
material respect.
f) The Borrower (i) has an order for relief entered with
respect to it under Canadian or United States
bankruptcy laws or any other law, domestic or foreign,
relating to bankruptcy, insolvency or reorganization or
relief of debts as now or hereafter in effect, (ii)
makes an assignment for the benefit of creditors, (iii)
applies for, seeks, consents to, or acquiesces in, the
appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it
Page 8 of 14
Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
or any material part of its property, (iv) institutes
any proceeding seeking an order for relief under
Canadian or United States bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a
bankruptcy or insolvent, or seeking dissolution,
winding up, disestablishment, liquidation,
reorganization, arrangement, adjustment or composition
of it or suspension of its general operations under the
law, domestic or foreign, relating to bankruptcy,
insolvency or reorganization or relief of debtors or
fails to file an answer or other pleading denying the
material allegations of any such proceeding filed
against it, (v) takes any company action to authorize
or effect any of the foregoing actions set forth in
this paragraph (e); (vi) fails to contest in good faith
any appointment or proceeding described in the
following paragraph (f); or (vii) does not pay, or
admits in writing its inability to pay, its debts
generally as they become due;
g) Without application, approval or consent of the
Borrower, a receiver, trustee, examiner, liquidator or
similar official is appointed for the Borrower or any
material part of its property, or any of the proceeding
described above is to be instituted against the
Borrower and such appointment constitutes undischarged
or such proceeding continues undismissed or unstayed
for a period of 60 consecutive days; or
h) Any court, government or governmental agency condems,
seizes or otherwise appropriates, or takes custody or
control of, all or any substantial portion of the
property of the Borrower;
Then, at any time during the existence of such event,
the Bank may, by notice to the Borrower or, in the case
of events under paragraph (f), (g) or (h),
automatically without notice, terminate the credit
facility and/or declare the advance and all other
amount owing under this Financing Agreement to be
immediately due and payable without presentment,
demand, protest, or other notice of any kind, all of
which are hereby expressly waived.
NON-WAIVER: Should there be a breach of or non-compliance with any
term or condition hereof, or should an Event of Default
occur, the Bank may at its option exercise any rights or
remedies it may have hereunder or which may be available
to it and the failure of the Bank to exercise any such
rights or remedies shall not be deemed to be a waiver of
such term or condition and will not prevent the Bank from
exercising such rights and remedies pursuant to that
default or subsequent defaults at any later time.
Page 9 of 14
Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
REPRESENTATIONS:
No representation or warranty or other statement made by
the Bank concerning the credit shall be binding on the
Bank unless made by it in writing as a specific amendment
to this letter.
ADDED COST: If the introduction of or any change in any present or
future law, regulation, treaty, official or unofficial
directive, or regulatory requirement, (whether or not
having the force of law) or in the interpretation or
application thereof, relates to :
i) the imposition or exemption of payments due to the
Bank or on reserves or deemed reserves in respect of
the undrawn portion of any loan made available
hereunder; or
ii) any reserve, special deposit, regulatory or similar
requirement against assets, deposits, or loans or
other acquisition of funds for loans by the Bank; or
iii) the amount of capital required or expected to be
maintained by the Bank as a result of the existence
of the advances or the commitment made hereunder;
and the result or such occurrence is, in the sole
determination of the Bank, to increase the cost of the
Bank or to reduce the income received by the Bank
hereunder, the Borrower shall, on demand by the Bank, pay
to the Bank that amount which the Bank estimates will
compensate it for such additional cost or reduction in
income and the Bank's estimate shall be conclusive, absent
manifest error.
PREPAYMENT: Any portion of the loan which bears interest based on
floating rate may be prepaid at any time without penalty.
No prepayments shall be authorized on LIBOR loan except on
the last day of the applicable interest period of such
LIBOR loan. The Borrower shall compensate the Bank for all
losses, expenses and liabilities which the Bank may
sustain as the result of any prepayment.
YEAR 2000
REPRESENTATION:
1) The Borrower and Genlyte Xxxxxx Group LLC shall use
commercially reasonable efforts to ensure that the
Borrower's products, business systems and revenue
generating systems (the "Systems") are Year 2000
compliant (as defined below) as soon as reasonably
practicable. Upon reasonable
Page 10 of 14
Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
request by the Bank, Borrower shall provide
documentation relating to or evidencing such Year 2000
Compliance.
2) The Borrower and Genlyte Xxxxxx Group LLC shall test
the Systems for Year 2000 Compliance and shall provide
the Bank with the opportunity to review test results at
such date or dates to be mutually agreed by the Bank
and Borrower.
3) The Borrower and Genlyte Xxxxxx Group LLC have taken
the reasonable steps to ensure to their satisfaction
that third party suppliers, subcontractors, agents of
Borrower are Year 2000 Compliant.
"Year 200 Compliant" or "Year 2000 Compliance" means
the Systems will :
a) process, calculate, accept, maintain, store and
output date and time data accurately and without
delay, interruption or error at all times from, into
and between the Twentieth and twenty-first centuries
and in particular during the years 1999 and 2000,
including the leap year calculations; and
b) function accurately and without interruption at all
times before, on and after January 1, 2000
(including through February 29, 2000) without any
change in operations associated with the advent of
1999 or the twenty-first century.
EXPENSES: The Borrower shall pay all reasonable fees (including but
not limited to all legal and documentation fees) and
expenses incurred by the Bank or the Borrower in
connection with the preparation and registration of this
Agreement, Bank Security, and any other document
contemplated thereby, and with the enforcement of the
Bank's rights under this Agreement, the Bank Security and
any other document, whether or not any amounts are
advanced under the Agreement. These fees and expenses
shall include, but not be limited, to all outside counsel
expenses and all in-house legal expenses, if in-house
counsel are used.
The Borrower shall pay interest on unpaid amounts due
pursuant to this paragraph at the CDN Prime Rate plus 2%
per annum.
Page 11 of 14
Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
ARRANGEMENT
FEE: The Borrower will pay prior to initial drawdown a
non-refundable Arrangement Fee of $25,000 (25 Basis
points).
ANNUAL
REVIEW FEE: For the next year and thereafter, the Borrower will pay a
non refundable Annual Review Fee of $10,000 for the Bank
to consider the Borrower's deemed request for extension of
the Maturity Date. Should the review involve any material
change in the general terms and conditions of the Loan,
then this fee could be renegotiated.
INDEMNITY: The Borrower shall indemnify and hold the Bank harmless
for all costs, expenses and liabilities in connection with
this credit including the prepayment of any LIBOR loan
prior to the last day of the interest period applicable to
such LIBOR loan.
EVIDENCE OF
INDEBTEDNESS: The Bank shall record on its records the amount of all
loans made hereunder, payments made in respect thereto,
and all other amounts becoming due to the Bank under this
Agreement. The Bank's records constitute, in the absence
of manifest error, conclusive evidence of the indebtedness
of the Borrower to the Bank pursuant to this Agreement.
PROMISSORY
NOTE: The Bank may request that loan made by it be evidenced by
a promissory note. In such event, the Borrower shall
prepare, execute and deliver to the Bank a promissory note
payable to the order of the Bank (or, if requested by the
Bank, to its assigns) and in a form approved by the Bank
and its legal counsel.
OTHER
AGREEMENTS: The Borrower acknowledges that it will sign other Bank
documents relating to the credit facility made available
hereunder, including without limitation the evidence of
debt, and that the terms and conditions contained in such
other documents shall be deemed to be incorporated herein
by reference and shall also apply to the credit facility.
Page 12 of 14
Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
ASSIGNMENT: The Bank may assign or grant participation in all or part
of this Agreement or in any loan made hereunder to any
Canadian financial institution with the Borrower's prior
consent, which shall not be withheld unreasonably.
The Borrower may not assign or transfer all or any part of
its rights or obligations under this Agreement.
LANGUAGE
PREFERENCE: This Agreement has been drawn up in the English language
at the request of all parties. (Cet acte a ete redige en
langue anglaise a la demande de toutes les parties).
GOVERNING LAWS:
The laws of the Province of Quebec and of Canada.
In accepting this commitment you acknowledge that, if in the opinion of
the Bank, a material adverse change in risk occurs, including without limiting
the generality of the foregoing, any material adverse change in the financial
condition of the Borrower and/or Genlyte Xxxxxx Group LLC, any obligation to
advance some or all of the above facility may be withdrawn or cancelled.
On this understanding, we request your acceptance of the following by
signing and returning the enclosed copy of this Financing Agreement by December
24th, 1999. At that point, security documentation will be prepared.
We wish to thank you for approaching Bank of Montreal for you company's
requirements and we look forward to an ongoing mutually beneficial relationship.
Yours truly,
/s/ XXXXXX XXXXXXX
-------------------------------------
Xxxxxx Xxxxxxx
Senior Manager
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Genlyte Xxxxxx Group Nova Scotia ULC
Financing Agreement - December 15th, 1999
ACKNOWLEDGED AND ACCEPTED BY:
Genlyte Xxxxxx Group Nova Scotia ULC
Per : /s/ XXXXX X. XXXXX - TREASURER Date: 12/22/99
--------------------------------------- --------
Xxxxx X. Xxxxx
Per : /s/ XXXXXXX X. XXXXX Date: 12/22/99
--------------------------------------- --------
Xxxxxxx X. Xxxxx
Genlyte Xxxxxx Group LLC hereby intervenes in the present Agreement and
acknowledges that it has taken cognizance of the terms and conditions therein
contained and in particular the provisions contained under the headings
"Security" and "Positive Covenants" by these presents, discloses itself to be
content and satisfied therewith and further agrees and consents to the punctual
fulfillment of all of our obligations in favor of the Bank.
Genlyte Xxxxxx Group LLC
Per : /s/ XXXXX X. XXXXX - TREASURER Date: 12/22/99
--------------------------------------- --------
Xxxxx X. Xxxxx
Per : /s/ XXXXXXX X. XXXXX - VP & CFO Date: 12/22/99
------------------------------- --------
Xxxxxxx X. Xxxxx
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