EXHIBIT 10.4
ADVANCED LIGHTING TECHNOLOGIES, INC.
00000 Xxxxxx Xxxx
Xxxxx, Xxxx 00000
As of December 30, 2003
XXXXX FARGO FOOTHILL, INC., as Agent and Lender
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: Amendment and Consents to Agreements
Ladies and Gentlemen:
Xxxxx Fargo Foothill, Inc., as Arranger and Administrative Agent
("Agent") the lenders ("Lenders") from time to time parties to the Loan
Agreement (as defined below), and Advanced Lighting Technologies, Inc., an Ohio
corporation ("Parent") and each of Parent's Subsidiaries identified as a
borrower on the signature pages hereof (such Subsidiaries, together with Parent,
are referred to hereafter each individually as a "Borrower", and individually
and collectively, jointly and severally, as "Borrowers") have entered into
certain financing arrangements pursuant to the Amended and Restated Loan and
Security Agreement dated as of the date hereof, among Agent, Lenders, Borrowers
and the other Loan Parties (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, the "Loan
Agreement"), and all other Loan Documents at any time executed and/or delivered
in connection therewith or related thereto. All capitalized terms used herein
shall have the meaning assigned thereto in the Loan Agreement, unless otherwise
defined herein.
Reference is made to that certain Amended and Restated Stock Pledge
Agreement, dated December 10, 2003 between Agent and Parent (as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, the "Stock Pledge Agreement"). Reference is also made to
that certain Amended and Restated Collateral Assignment of Notes, dated December
10, 2003 between Agent and Parent (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Collateral Assignment of Notes").
Borrowers and the other Loan Parties have advised Agent that APL
Engineered Materials, Inc. ("APL") intends to acquire one hundred percent (100%)
of the outstanding shares of capital stock of H & F Five, Inc. ("HF5") by
forming AAPL Holdings Inc. ("AAPL Holdings"), a wholly owned subsidiary of APL
(the "Formation of AAPL Holdings") and merging AAPL Holdings with and into HF5
(the "Merger") pursuant to the Agreement and Plan of Merger, dated as of the
date hereof, by and among HF5, AAPL Holdings and APL (the "Merger Agreement").
In connection with the Merger and pursuant to the Merger Agreement, Borrowers
shall pay to the existing shareholders of HF5 an amount equal to Two Hundred
Forty One Thousand ($241,000) Dollars (the "Investment"). The consideration to
be given Xxxxx X. Xxxxxxx ("Xxxxxxx") and Xxxxx
1
S. Fisi ("Fisi") for their respective shares shall be (i) with respect to
Xxxxxxx, in the form of a credit by Parent in an amount equal to One Hundred
Twenty Thousand Five Hundred ($120,500) Dollars to the outstanding indebtedness
which remains owing by Xxxxxxx to Parent under that certain Secured Promissory
Note, dated October 8, 1998, by Xxxxxxx in favor of Parent in the original
principal amount of Nine Million ($9,000,000.00) Dollars, as amended to date
(the "Xxxxxxx Debt"), and (ii) with respect to Fisi, in the form of a credit by
Parent, as the assignee of Xxxxxxx'x rights with respect to the Fisi Debt (as
defined and further described below), in an amount equal to Thirty Six Thousand
One Hundred Fifty ($36,150) Dollars to the outstanding indebtedness which
remains owing by Fisi (the "Fisi Debt") with respect to Xxxxxxx'x December 24,
1998 payment on Fisi's behalf, with proceeds from a further borrowing by Hellman
under his then margin account with Prudential Securities Incorporated
("Prudential"), of the full Two Million Four Hundred Eighty Two Thousand
($2,482,000) Dollar margin loan then owed by Fisi to Prudential, Xxxxxxx'x
rights to which Fisi Debt are being assigned by Xxxxxxx to Parent in
consideration of Parent's making of a further Fifteen Thousand ($15,000) Dollar
credit against the Xxxxxxx Debt (such credits against the Xxxxxxx Debt and the
Fisi Debt are collectively referred to as the "Debt Forgiveness").
Borrowers and the other Loan Parties have requested that the Agent
consent to the Formation of AAPL Holdings, the Merger, the Investment and the
Debt Forgiveness. Agent has agreed to consent to the Formation of AAPL Holdings,
the Merger, the Investment and the Debt Forgiveness subject to the terms and
provisions hereof.
In consideration of the foregoing, and other good and valuable
consideration, Agent, Lenders, Borrowers and the other Loan Parties hereby agree
as follows:
1. Consent. Notwithstanding anything to the contrary contained in
the Loan Agreement, including Section 5.8(c) (Subsidiaries), Section 7.3
(Restrictions on Fundamental Changes) and Section 7.13 (Investments), or the
Collateral Assignment of Notes, including Sections 3(c) and 3(e) thereof, Agent
hereby consents to the Formation of AAPL Holdings, the Merger, the Investment
and the Debt Forgiveness.
2. Amendment. As of the effective date of this letter agreement,
Exhibit A to the Stock Pledge Agreement is hereby amended by adding the
following below the heading "APL Engineered Materials, Inc.":
"H & F Five, Inc. Ohio 10 100"
3. Effect of this Agreement. Except as specifically set forth
herein, no other changes or modifications to the Loan Agreement, the Stock
Pledge Agreement or the Collateral Assignment of Notes are intended or implied,
and, in all other respects, the Loan Agreement, the Stock Pledge Agreement and
the Collateral Assignment of Notes shall continue to remain in full force and
effect in accordance with its terms as of the date hereof. Except as
specifically set forth herein, nothing contained herein shall evidence a waiver
or amendment by the Agent or Lenders of any other provision of the Loan
Agreement, the Stock Pledge Agreement or Collateral Assignment of Notes nor
shall
2
anything contained herein be construed as a consent by the Agent or Lenders to
any transaction other than those specifically consented to herein.
4. Representations, Warranties and Covenants. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrowers to Agent or Lenders pursuant to the Loan Agreement and the
other Loan Documents, Borrowers hereby represent, warrant and covenant with and
to Agent and Lenders as follows (which representations, warranties and covenants
are continuing and shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Loan Documents):
(a) No Event of Default or act, condition or event, which
with notice or passage of time or both, would constitute an Event of Default,
exists on the date of this letter agreement.
(b) This letter agreement has been duly executed and
delivered by Borrowers and the other Loan Parties and is in full force and
effect as of the date hereof, and the agreements and obligations of Borrowers
and the other Loan Parties contained herein constitute their respective legal,
valid and binding obligations enforceable against each in accordance with the
terms hereof.
(c) Borrowers hereby acknowledge, confirm and agree that
Borrowers shall deliver to Agent, within five (5) Business Days of the date
hereof, all original stock certificates of HF5 and original stock powers, in
form and substance satisfactory to Agent, duly executed and delivered by APL.
(d) Borrowers hereby acknowledge, confirm and agree that
Borrowers shall deliver to Agent, within five (5) days of Borrowers receipt
thereof, (i) evidence of the filing of the corporate formation documents of AAPL
Holdings with the Secretary of State of Ohio, and (ii) evidence of the filing of
the Merger Agreement with the Secretary of State of Ohio.
(e) The execution, delivery, and performance by each
Borrower or Loan Party of (i) the Merger Agreement or any other documents or
agreements executed in connection therewith or related thereto, and (ii) this
letter agreement, do not and will not require any approval of any Borrower's or
any Loan Party's interestholders or any approval or consent of any Person under
any material contractual obligation of any Borrower or any Loan Party, other,
than any such approval or consent which has previously been obtained by
Borrowers and Loan Parties prior to the date hereof.
(f) The security interests in and liens of Agent and
Lenders upon all assets and properties of Borrowers and the other Loan Parties,
are and shall continue to be in full force and effect and hereby are ratified
and confirmed in all respects.
5. Conditions Precedent. This letter agreement shall not be
effective unless and until Agent shall have received:
3
(a) an original hereof, in form and substance
satisfactory to Agent, duly executed and delivered by all Borrowers and other
Loan Parties; and
(b) an original Collateral Assignment of Notes, dated as
of the date hereof between Agent and APL, duly executed and delivered by APL,
together with an original Acknowledgement of Assignment and Waiver of Defense as
to Assignee, dated as of the date hereof, by HF5 in favor of Agent, duly
executed and delivered by HF5, each in form and substance satisfactory to Agent.
6. Binding Effect. The terms and provisions of this agreement
shall be for the benefit of the parties hereto and their respective successors
and assigns; no other person, firm, entity or corporation shall have any right,
benefit or interest under this agreement.
7. Counterparts. This letter agreement may be signed in
counterparts, each of which shall be an original and all of which taken together
constitute one agreement. In making proof of this letter agreement, it shall not
be necessary to produce or account for more than one counterpart signed by the
party to be charged. Delivery of an executed counterpart of this letter
agreement by telefacsimile shall have the same force and effect as the delivery
of an original executed counterpart of this letter agreement. Any party
delivering an executed counterpart of this letter agreement by telefacsimile
shall also deliver an original executed counterpart, but the failure to do so
shall not affect the validity, enforceability or binding effect of this letter
agreement.
8. Further Assurances. The parties hereto shall execute and
deliver such additional documents and take such additional actions as may be
necessary or desirable to effectuate the provisions and purposes of this letter
agreement.
9. Governing Law. The validity, interpretation and enforcement of
this letter agreement and any dispute arising out of the relationship between
the parties hereto, whether in contract, tort, equity or otherwise, shall be
governed by the internal laws of the state of New York (without giving effect to
principles of conflicts of law).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
10. Entire Agreement. This letter agreement sets forth the entire
agreement and understanding of the parties with respect to the matters set forth
herein. This letter agreement cannot be changed, modified, amended or terminated
except in a writing executed by the party to be charged.
Very truly yours,
ADVANCED LIGHTING
TECHNOLOGIES, INC., an Ohio corporation, as
a Borrower and a Loan Party
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
APL ENGINEERED MATERIALS, INC.,
an Illinois corporation, as a Borrower and
a Loan Party
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Board
VENTURE LIGHTING
INTERNATIONAL, INC., an Ohio corporation,
as a Borrower and a Loan Party
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
BALLASTRONIX (DELAWARE), INC.,
a Delaware corporation, as a Borrower and
a Loan Party
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
[SIGNATURES CONTINUED ON NEXT PAGE]
5
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
MICROSUN TECHNOLOGIES INC.,
an Ohio corporation, as a Borrower and
a Loan Party
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
LIGHTING RESOURCES
INTERNATIONAL, INC., an Ohio corporation,
as a Borrower and a Loan Party
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
ADLT SERVICES, INC., an Ohio
corporation, as a Borrower and a Loan Party
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
DEPOSITION SCIENCES, INC.,
an Ohio corporation, as a Borrower and
a Loan Party
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
6
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
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: V. P. Finance & Administration
PARRY POWER SYSTEMS LIMITED,
a corporation organized under the laws of
the United Kingdom, as a Loan Party
By:/s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Director
VENTURE LIGHTING EUROPE LTD.,
a corporation organized under the laws of
the United Kingdom, as a Loan Party
By:/s/ S. D. Xxxxxx
----------------------------------------
Name: S. D. Xxxxxx
Title: Director
ACKNOWLEDGED AND AGREED:
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent and as a Lender
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: A. V. P.
7
