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EXHIBIT 10.3
ADVANCED LIGHTING TECHNOLOGIES, INC.
00000 XXXXXX XXXX
XXXXX, XXXX 00000
Dated as of December 22, 1998
To the Administrative Agent
and each of the Lenders party to
the Credit Agreement
referred to below
RE: CREDIT AGREEMENT, DATED AS OF JANUARY 2, 1998,
WITH ADVANCED LIGHTING TECHNOLOGIES, INC.
Ladies and Gentlemen:
Referring to (i) the Credit Agreement, dated as of January 2, 1998, as
amended (the "CREDIT AGREEMENT"; with the terms defined therein being used
herein with the same meanings unless otherwise defined herein), among Advanced
Lighting Technologies, Inc., an Ohio corporation (the "BORROWER"), the Lenders
named therein (the "LENDERS"), and National City Bank, as Administrative Agent
(the "ADMINISTRATIVE AGENT") for the Lenders thereunder, and (ii) the Borrower's
request made December 18, 1998, for a temporary amendment to sections 9.7, 9.8
and 9.11 of the Credit Agreement, this letter will confirm that during the
period (the "TEMPORARY AMENDMENT PERIOD") from the date hereof through the
earlier of (1) February 14, 1999, and (2) the effective date of any amendment of
the Credit Agreement which may be entered into by the parties hereto subsequent
to the date hereof in accordance with section 13.12 of the Credit Agreement, the
Credit Agreement is hereby amended to reflect the following:
1. The maximum ratio of Total Indebtedness to EBITDA, as
referred to in section 9.7(a) of the Credit Agreement, shall be 7.50 to
1.00.
2. The maximum ratio of Total Adjusted Senior Secured
Indebtedness to EBITDA, as referred to in section 9.7(b) of the Credit
Agreement, shall be 2.50 to 1.00.
3. The minimum Interest Coverage Ratio, as referred to in
section 9.8 of the Credit Agreement, shall be 2.00 to 1.00.
4. The minimum Consolidated Tangible Net Worth, as referred to
in section 9.11 of the Credit Agreement, shall be $65,000,000.
5. The computations of the covenants referred to in the
preceding paragraphs 1, 2 and 3 shall be made after excluding special
charges for the fiscal quarter ended December 31, 1998 in an amount not
to exceed $21,000,000. The computations of the covenants referred to in
the preceding paragraphs 1, 2, 3 and 4 shall be made after excluding a
charge made in or for such fiscal
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quarter related to discontinued operations in an amount not to exceed
$3,000,000. In determining compliance with the covenant referred to in
paragraph 4 above, there shall be no deduction from Consolidated
Tangible Net Worth in respect of a promissory note in the original
principal amount of $9,000,000 issued by Xxxxx Xxxxxxx to the
Borrower.
After the expiration of the Temporary Amendment Period, the amendments to the
Credit Agreement set forth in paragraphs 1 through 5 above shall have no further
force or effect, and the Credit Agreement shall remain in full force and effect
without regard to any changes or modifications thereto effected pursuant to the
above paragraphs 1 through 5 of this letter.
Notwithstanding anything to the contrary contained in section 2.7(g) of
the Credit Agreement, effective on December 22, 1998 and continuing thereafter
until changed by the Borrower, all of the Lenders and the Administrative Agent
pursuant to an amendment to the Credit Agreement entered enter into as
contemplated by section 13.12 of the Credit Agreement, as to all Loans then or
thereafter outstanding, the Applicable Prime Rate Margin will be 50 basis points
per annum and the Applicable Eurocurrency Margin will be 300 basis points per
annum.
Notwithstanding anything to the contrary contained in the Credit
Agreement, effective on December 22, 1998 and continuing thereafter until
changed by the Borrower, all of the Lenders and the Administrative Agent
pursuant to an amendment to the Credit Agreement entered enter into as
contemplated by section 13.12 of the Credit Agreement, no additional Borrowings
may be incurred, or Letters of Credit issued or increased in amount, if after
giving effect thereto the sum of (x) the aggregate principal amount of all
outstanding Loans, and (y) the Letter of Credit Outstandings, would exceed
$55,000,000.
The Borrower hereby confirms that the Lenders and the Administrative
Agent have made no promises or other undertakings, written or oral, to enter
into any amendment or other modification of the Credit Agreement, except (if
this letter becomes effective as provided below) for the specific amendments set
forth in this letter.
This letter may be executed in multiple counterparts, and by different
parties on separate counterparts, each of which shall be an original and all of
which collectively shall constitute one and the same agreement.
If you are in agreement with the foregoing, please sign a counterpart
of this letter and return it to the Administrative Agent. Upon receipt by the
Administrative Agent of (i) a counterpart of this letter manually signed by the
Borrower, and original or facsimile counterparts of this letter signed by all of
the Lenders and the Administrative Agent, and (ii) payment by the Borrower to
the Administrative Agent of a nonrefundable amendment fee of $75,000, for prompt
distribution PRO RATA to the Lenders in proportion to their Commitments, this
letter shall become effective and shall constitute a binding obligation of the
Borrower, the Lenders and the Administrative Agent.
Very truly yours,
ADVANCED LIGHTING TECHNOLOGIES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
Chief Financial Officer
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Accepted and Agreed:
NATIONAL CITY BANK, NBD BANK
individually and as Administrative Agent
By:/s/ By: /s/
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Senior Vice President Title:
PNC BANK, NATIONAL ASSOCIATION NATIONAL BANK OF CANADA,
a Canadian Chartered Bank,
Cleveland Representative Office
By:/s/ By: /s/
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Title Title:
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