Exhibit 14(a)
SECOND AMENDMENT
TO THE
COMMERCIAL LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO THE COMMERCIAL LOAN AND SECURITY AGREEMENT (the
"Second Amendment"), dated June 3, 2004 is entered into by and among TRANS-LUX
CORPORATION, a Delaware corporation with an address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), PEOPLE'S BANK, a Connecticut state
chartered banking corporation with an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("People's"), and THE BANK OF NEW YORK, a New York state
chartered banking corporation with an address at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BNY" and, together with People's and their respective
successors and assigns, the "Lenders" and each individually a "Lender"), and
PEOPLE'S BANK, a Connecticut state chartered banking corporation with an office
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent for the Lenders,
(hereinafter referred to in this capacity as the "Agent").
Background
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A. Reference is hereby made to that certain Commercial Loan and Security
Agreement, dated February 12, 2003, by and among the Borrower, Lenders and the
Agent (the "Loan Agreement"), pursuant to which the Lenders agreed to make loans
to and otherwise extend credit for the benefit and/or account of the Borrower,
in the amounts and subject to the terms and conditions set forth in the Loan
Agreement. The Loan Agreement, and all agreements, documents and instruments
entered into in connection therewith, shall be collectively referred to herein
as the "Original Loan Documents."
B. Reference is further made to that certain First Amendment to Commercial
Loan and Security Agreement and Waiver Agreement, dated May 13, 2003 (the "First
Amendment"), pursuant to which the Borrower, Lenders and Agent agreed to amend
the terms of the Original Loan Documents. The Original Loan Documents, as
amended by the First Amendment, shall be hereinafter referred to as the
"Existing Loan Documents." Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Existing Loan Documents.
C. The Borrower has arranged to sell real property located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ (the "Property") to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC (the
"Purchaser"), the successor to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, for a sale price of
$8,080,000, including a purchase money note of $2,580,000 (the "Purchase Money
Note"), which Purchase Money Note shall be secured by a Purchase Money Mortgage
Deed on the Property securing the principal amount of $2,580,000 (the "Purchase
Money Mortgage"). The Borrower anticipates net cash proceeds from the sale of
the Property of not less than $4,900,000 after expenses, commissions and taxes.
Simultaneously with the sale, the Borrower will enter into consecutive lease
agreements with the Purchaser.
D. Borrower has requested that Lenders: (i) release their mortgage on the
Property so that the sale can take place on or before June 4, 2004; and (ii)
amend the Existing Loan Documents to reflect: (a) the pledge by the Borrower to
the Lenders of the Purchase Money Note, which Purchase Money Mortgage shall be
Collateral, as that term is defined in the Loan Agreement; (b) the assignment by
the Borrower to the Lenders of the Purchase Money Mortgage, which Purchase Money
Mortgage shall be Collateral, as that term is defined in the Loan Agreement; and
(c) such other changes as may be necessitated by the sale of the Property.
E. Lenders have agreed to Borrower's request, subject to the terms and
conditions contained in this Agreement.
Agreement
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In consideration of the Background, which is incorporated by this reference,
other good and valuable consideration, the receipt and sufficiency of which is
acknowledged, and the mutual promises and covenants contained in this Second
Amendment, the parties, intending to be bound legally, agree as follows:
1. Pledge Agreement and Assignment of Mortgage. Simultaneously with the
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execution and delivery of this Second Amendment, Borrower is executing and
delivering to Lenders (a) that certain Pledge Agreement by and among Borrower
and Lenders (the "Pledge Agreement") whereby Borrower grants to the Lenders a
security interest in all of its rights, title and interest now owned or
hereafter acquired in and to the Purchase Money Note; and (b) that certain
Collateral Assignment of Note, Mortgage, and Loan Documents by and among
Borrower and Lenders (the "Assignment of Mortgage") whereby Borrower grants to
the Lenders a security interest in all of its rights, title and interest now
owned or hereafter acquired in and to the Purchase Money Mortgage.
2. Amendments. All of the provisions of the Loan Agreement shall remain in
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full force and effect except as follows:
(a) Section 1.1 of the Loan Agreement is hereby amended by:
(i) Inserting the following definitions in appropriate alphabetical order
therein:
"Assignment of Mortgage" means that certain Collateral
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Assignment of Note, Mortgage, and Loan Documents dated as of
June 3, 2004 by and among the Borrower and Lenders.
"Pledge Agreement" means that certain Pledge Agreement dated
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as of June 3, 2004 by and among Borrower and Lenders.
and
(ii) Deleting the definition of "Loan Documents" therein and replacing it
with the following:
"Loan Documents" means this Agreement, the Notes, the Pledge
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Agreement, the Assignment of Mortgage, the Guaranty, the
Guarantor Security Agreement, the Letters of Credit, and all
other agreements or documents, whenever executed and
delivered to Lenders, with respect to the transactions
contemplated by this Agreement, together with any
amendments, supplements or modifications hereto or thereto.
(b) Section 6.4 of the Loan Agreement is hereby deleted and replaced by the
following:
Section 6.4 Leases. Create, incur, assume, or suffer to exist any
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obligation as lessee for the rental or hire of any real or personal
property, except: (a) leases existing on the date of this Agreement as
set forth in Schedule 6.4 and any extensions or renewals thereof; (b)
Capital Leases in an aggregate amount not to exceed $1,000,000 at any
time; (c) those leases described on Schedule 6.4(a); and (d) operating
leases in the ordinary course of business.
(c) Schedule 6.4(a) hereto is hereby attached to the Loan Agreement as
Schedule 6.4(a) thereto.
(d) Section 6.5 of the Loan Agreement is hereby deleted and replaced by the
following:
Section 6.5 Sale and Leaseback. Except for the sale of the Property to
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▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC and leaseback pursuant to the leases described
on Schedule 6.4(a) hereto, sell, transfer, or otherwise dispose of any
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real or personal property to any Person and thereafter directly or
indirectly lease back the same or similar property.
(e) Section 8.2 of the Loan Agreement is hereby deleted and replaced by the
following:
Section 8.2 Pledge Agreement and Assignment of Mortgage. As additional
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collateral security for the prompt and complete payment and performance
of the Obligations, the Borrower hereby grants to the Lenders (a)
pursuant to the Pledge Agreement, all of its rights, title and interest
now owned or hereafter acquired in and to that certain Promissory Note,
dated June 3, 2004, in the original principal amount of Two Million,
Five Hundred Eighty Thousand Dollars ($2,580,000.00) made and given by
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC in favor of Borrower; and (b) pursuant to the
Assignment of Mortgage, all of its rights, title and interest now owned
or hereafter acquired in and to that certain Purchase Money Mortgage
Deed by and among ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC as mortgagor and Borrower as
mortgagee, securing the property known as ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇.
(f) All Schedules attached hereto shall replace those Schedules attached to
the Loan Agreement.
3. Reservation of Rights. Lenders hereby reserve all of their rights and
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remedies under the Loan Agreement and under applicable law. No action or
inaction on the part of the Lenders or Agent shall constitute a waiver of any
Event of Default or of the Lenders' rights and remedies in respect thereof.
4. Representations and Warranties. Borrower represents and warrants that
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all of the representations and warranties contained in the Existing Loan
Documents are true and correct on and as of the date hereof, are incorporated
herein by this reference, and are remade. Without limiting the generality of
the foregoing, the Borrower specifically represents, warrants and covenants
that:
(a) Loan Balances. As of the close of business on June 3, 2004 (i) the
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amount due in respect of the Revolving Loans is $0 of principal, plus
accrued and unpaid interest, (ii) the amount due in respect of Term Loan A is
$6,299,999.98 of principal, plus accrued and unpaid interest, (iii) the amount
due in respect of Term Loan B is $7,857,142.84 of principal, plus accrued and
unpaid interest, and (iv) the aggregate undrawn face amount of all Letters of
Credit issued for the account of the Borrower is $0. All amounts set forth in
the preceding sentence and all costs and expenses thereon are due under the Loan
Agreement without defense, off-set or counterclaim. Borrower acknowledges that
it is legally, validly and enforceably liable to Lenders for all costs and
expenses of collection and reasonable attorneys' fees related to or in any way
arising out of the Loan Agreement, as amended by the First Amendment and this
Second Amendment, or out of the other Loan Documents, and that Borrower has no
claims, demands or rights of set-off against Lenders in connection with the
Loans or the Letters of Credit. Borrower further acknowledges that all
indebtedness, liabilities and obligations of Borrower to Lenders, whenever and
however arising including, without limitation, the Loans, are secured by a first
lien on and security interest in the Collateral. Borrower further acknowledges
that in accordance with the terms of the Loan Agreement, Borrower may borrow,
repay and reborrow revolving loan funds, and accordingly the principal balance
of the Revolving Loans may increase or decrease from time to time.
(b) No Default. Borrower is not in default under the Existing Loan
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Documents. No event has occurred which would constitute a Default or an Event
of Default.
(c) No Liquidation. There are no liquidation or dissolution proceedings
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pending or threatened against Borrower or any Secured Guarantor and no other
event has occurred which affects or threatens the corporate existence of
Borrower or any Secured Guarantor.
(d) Advised by Counsel. Borrower acknowledges that (i) it has been advised
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by counsel in the negotiation, execution and delivery of this Second Amendment,
(ii) it has made an independent decision to enter into this Second Amendment
without reliance on any representation, warranty, covenant or undertaking by
Agent or Lenders, (iii) Lenders have no fiduciary obligation toward Borrower
with respect to this Second Amendment or the Existing Loan Documents, (iv) the
relationship between Borrower and Lenders pursuant to this Second Amendment and
the Existing Loan Documents is and shall be solely that of debtor and creditors,
respectively, and (v) it understands the meaning and legal effect of this Second
Amendment.
(e) No Adverse Developments. There has not been any change in the business
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or financial condition of Borrower since February 12, 2003 which would have a
Material Adverse Effect or adversely impair the ability of Borrower to comply
with its obligations under the Existing Loan Documents, as amended hereby.
(f) No Litigation. Except as disclosed on Schedule 4.6 to the Loan
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Agreement, there are no pending, or to Borrower's knowledge threatened,
proceedings before any court, Governmental Authority, board of arbitration, or
arbitrator to which Borrower or any Guarantor is a party and which would
materially and adversely affect the transactions contemplated by this Second
Amendment or the Existing Loan Documents, as amended hereby, or materially and
adversely affect Borrower's ability to conduct its business.
(g) No Conflict. The execution and delivery of this Second Amendment, the
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consummation of the transactions contemplated herein, and the fulfillment of or
compliance with the terms and conditions of this Second Amendment and of the
Existing Loan Documents, as amended hereby, are not prevented or limited by, and
do not conflict with or result in a breach of the terms, conditions or
provisions of Borrower's Certificate of Incorporation or By-Laws, any law, rule,
regulation, judgment, order or decree applicable to or binding on the Borrower
or any Guarantor or any evidence of indebtedness, agreement or instrument of any
nature to which Borrower or any Guarantor is now a party or by which Borrower or
any Guarantor is bound, or constitute a default under any of the foregoing.
(h) No Violation of Law. To the best of its knowledge, neither the Borrower
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nor any Guarantor is in violation of any federal, state or local law, regulation
or order, which violation would have a Material Adverse Effect and Borrower has
not received any notice of any such violation.
(i) Corporate Authority. The Borrower has full corporate power and
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authority to enter into and perform its obligations under this Second Amendment,
the Loan Agreement as amended hereby, and to incur the obligations provided for
herein and therein, all of which have been duly authorized by all necessary and
proper corporate action. No other consent or approval, or the taking of any
other action, in respect of shareholders, members or any public authority, is
required as a condition to the validity or enforceability of this Second
Amendment, the Loan Agreement as amended hereby, or any of the other Existing
Loan Documents.
5. Conditions Precedent. Lenders' obligations hereunder are subject to the
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satisfaction as of the date of this Second Amendment of each of the following
conditions precedent which shall be in form, scope and substance satisfactory to
Lenders and their counsel:
(a) Evidence of Corporate Action. Lenders shall have received certified
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copies of all Board of Director resolutions adopted by Borrower to authorize the
execution, delivery and performance of this Second Amendment, together with
copies of all amendments to Borrower's Certificate of Incorporation and By-Laws
adopted since February 12, 2003, and such other papers as Agent or its counsel
may reasonably require.
(b) Receipt of Cash. Lenders shall have received the net cash proceeds from
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the sale of the Property, in a form and manner acceptable to the Lenders in
their sole discretion and in an amount equal to $4,900,000 after expenses,
commissions and taxes, to be applied as a prepayment of the outstanding
principal amount of Term Loan A in, notwithstanding anything to the contrary in
the Loan Agreement, the inverse order of maturity.
(c) Purchase Money Note. Lenders shall have received the original executed
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Purchase Money Note, together with the original Allonge to Note in the form
attached as Exhibit 1 to the Pledge Agreement.
(d) Pledge Agreement and Assignment of Mortgage. Lenders shall have
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received the duly executed Pledge Agreement and Assignment of Mortgage.
(e) Notification Letter from Borrower to Purchaser. Lenders shall have
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received a copy of a notification letter from Borrower to Purchaser notifying
Purchaser of the Pledge Agreement and the terms thereof.
(f) Non Disturbance Agreement. Lenders shall have received a copy of the
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Non-Disturbance Agreement entered into by Borrower, Purchaser and Purchaser's
lender, such Non-Disturbance Agreement to be in a form and substance acceptable
to Lenders in its sole discretion.
(g) Legal Fees. Borrower shall have reimbursed Agent for the reasonable
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legal fees of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to Agent, in connection with the
negotiation, review, execution and delivery of all of the documents prepared
with respect to the transactions contemplated herein, plus related
disbursements.
(h) Other. Borrower shall have delivered to Lenders such other documents as
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Agent or its counsel reasonably require.
6. Notices. All notices, requests, consents, demands and other
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communications hereunder shall be in writing and shall be mailed by registered
or certified first class mail or delivered by an overnight courier to the
respective parties to this Second Amendment as set forth in the Loan Agreement.
7. Governing Law. This Second Amendment shall be governed and controlled
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by the internal laws of the State of Connecticut.
8. Amendment and Restatement. Upon the execution of this Second Amendment,
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the Loan Agreement and the other Existing Loan Documents are restated to the
extent that this Second Amendment restates them and are amended to the extent
that this Second Amendment amends them. Except as specifically amended by the
terms of this Second Amendment, all terms and conditions set forth in the
Existing Loan Documents, together with all schedules and exhibits attached
thereto, shall remain in full force and effect. This Second Amendment, to the
extent that it is inconsistent with the Existing Loan Documents, supersedes the
Existing Loan Documents and any and all prior written or oral amendments of the
Existing Loan Documents.
9. Waiver of Prejudgment Remedy. THE BORROWER ACKNOWLEDGES AND AGREES THAT
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THE TRANSACTIONS ARE COMMERCIAL TRANSACTIONS AND IT HEREBY WAIVES ANY RIGHT TO
NOTICE AND HEARING AS MAY BE ALLOWED UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, AS AMENDED, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL
LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY AND PREJUDGMENT REMEDY WITHOUT COURT
ORDER, PROVIDED THE COMPLAINT SETS FORTH A COPY OF THE WAIVER, AND WAIVES ANY
CLAIM IN TORT, CONTRACT OR OTHERWISE AGAINST LENDERS' ATTORNEYS WHICH MAY ARISE
OUT OF SUCH ISSUANCE OF A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER.
FURTHER, TO THE EXTENT ALLOWED UNDER APPLICABLE LAW, BORROWER HEREBY WAIVES
DEMAND, PRESENTMENT FOR PAYMENT, PROTEST, NOTICE OF PROTEST, NOTICE OF DISHONOR,
DILIGENCE IN COLLECTION, NOTICE OF NONPAYMENT OF ANY NOTE AND ANY AND ALL
NOTICES OF A LIKE NATURE. THE BORROWER ACKNOWLEDGES THAT IT MAKES THIS WAIVER
KNOWINGLY, VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
10. Waiver of Jury Trial and Consequential Damages.
(a) THE BORROWER AND THE LENDERS EACH HEREBY EXPRESSLY WAIVES ANY AND
ALL RIGHTS IT MAY HAVE TO TRIAL BY JURY IN ANY COURT OF ANY CLAIM, DEMAND,
ACTION, OR CAUSE OF ACTION (1) ARISING UNDER THIS SECOND AMENDMENT OR ANY OTHER
INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS SECOND AMENDMENT OR ANY OTHER
INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
THE BORROWER AND THE LENDERS EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THE AGENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 10(a) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH OF THEM
TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. THE BORROWER AND THE LENDERS EACH
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND WITHOUT
DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS
WAIVER WITH ITS ATTORNEYS.
(b) NONE OF THE AGENT, ANY LENDER, BORROWER, OR ANY AGENT OR ATTORNEY OF
EITHER OF THEM SHALL BE LIABLE TO ANY OF THE OTHERS FOR PUNITIVE OR
CONSEQUENTIAL DAMAGES ARISING FROM ANY BREACH OF CONTRACT, TORT, OR OTHER WRONG
RELATING TO THE ESTABLISHMENT, ADMINISTRATION, OR COLLECTION OF THE OBLIGATIONS
RELATING IN ANY WAY TO THIS SECOND AMENDMENT, OR ANY OF THE OTHER EXISTING LOAN
DOCUMENTS, OR THE ACTION OR INACTION OF ANY OF SUCH PERSONS UNDER ANY ONE OR
MORE HEREOF OR THEREOF.
(c) IN THE EVENT THE AGENT SEEKS TO TAKE POSSESSION OF ANY OR ALL OF THE
COLLATERAL BY COURT PROCESS OR OTHER METHOD AVAILABLE UNDER THE LAW, BORROWER
IRREVOCABLY WAIVES ANY BOND AND ANY SURETY OR SECURITY RELATING THERETO REQUIRED
BY ANY STATUTE, COURT RULE OR OTHERWISE AS AN INCIDENT TO SUCH POSSESSION, AND
WAIVES ANY DEMAND FOR POSSESSION PRIOR TO THE COMMENCEMENT OF ANY SUIT OR ACTION
TO RECOVER WITH RESPECT THERETO. BORROWER FURTHER WAIVES THE BENEFIT OF ALL
VALUATION, APPRAISEMENT AND EXEMPTION LAWS.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
on the date first written above.
BORROWER:
TRANS-LUX CORPORATION
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Executive Vice President
AGENT:
PEOPLE'S BANK
By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Vice President
LENDERS:
THE BANK OF NEW YORK
By:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Assistant Vice President
PEOPLE'S BANK
By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Vice President