EXHIBIT 10.1
AGREEMENT TO EXTEND AND AMEND LOAN AND SECURITY AGREEMENT
This Agreement is entered into this 5th day of November, 2003 by and
between the Estate of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (the "Estate") and Dotronix, Inc., a Minnesota corporation, with its
principal place of business located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ ("Dotronix"), to amend that certain Loan and Security Agreement dated
February 23, 2000 (the "Loan Agreement"), as amended, originally entered into by
and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and Dotronix.
WHEREAS, the Dotronix and the Estate are parties to the Loan Agreement and wish
to extend the term of such Loan Agreement and to alter some of the terms of the
Loan Agreement; and
WHEREAS, the Estate is willing to forgive $850,000 of the $1,000,000 principal
amount currently owing under the Loan Agreement in exchange for the transfer of
certain real property located in Eau Claire, Wisconsin owned by Dotronix; and
WHEREAS, the signing of this agreement to amend and extend the term of such Loan
Agreement is a condition precedent to Dotronix finalizing a revolving credit
agreement with ▇▇▇▇▇ ▇. ▇▇▇▇▇;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
1. In exchange for the other consideration forth in this Agreement and
contingent on Dotronix performing its obligations set forth herein, the
principal amount due and owing under the Loan Agreement is reduced from
$1,000,000 to $150,000 and the fulfillment of the obligations of
Dotronix hereunder (including the transfer of real estate in Section 3
hereof) shall constitute full and final payment for such forgiven
principal amount.
2. The Loan Agreement is hereby amended to reflect the following changes
to the terms of the Loan Agreement:
(a) The Maximum Dollar Amount set forth in Section 2.1.A of the
Schedule, the dollar amount set forth in Section 2.1.C of the
Schedule, the principal amount of the Note, and the amount
secured by the Collateral Documents shall be $150,000.
(b) The Maturity Date set forth in Section 9.1 of the Schedule and
in the Note shall be November 30, 2008.
(c) The interest rate shall be 5% per annum, payable monthly.
(d) The amended Loan Agreement shall be subordinate to the
Revolving Credit Agreement between Dotronix and ▇▇▇▇▇ ▇.
▇▇▇▇▇.
3. The Estate will have an option to convert the principal amount due
under the Loan Agreement into Dotronix common stock at a conversion
price of $1.00 per share issued at any time after the Dotronix stock
has closed at $1.00 per share for 20 consecutive trading days. This
option shall be exercisable no later than sixty (60) days prior to the
end of the term of the Loan Agreement.
4. Dotronix will transfer title and ownership of the Eau Claire, Wisconsin
property, as more fully described in Exhibit A hereto, currently owned
by Dotronix within thirty (30) days of the execution of this Agreement.
5. As further consideration for this Agreement and the amendment of the
Loan Agreement and upon transfer of title and ownership of the Eau
Claire , Wisconsin property, the Estate shall surrender to Dotronix
warrants to purchase up to three hundred sixty five thousand (365,000)
shared of Dotronix common stock that were issued to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
as consideration for loans made to Dotronix, and in exchange, Dotronix
shall grant to the Estate a seven-year warrant to purchase up to three
hundred eighty five thousand (385,000) shares of Dotronix common stock
at an exercise price of five cents ($.05) per share.
6. As a condition precedent to the obligations of the Estate hereunder,
Dotronix must reach an agreement with the ▇▇▇▇▇ ▇. ▇▇▇▇▇ to enter into
a revolving credit agreement, according to the terms set forth in
Exhibit B hereto.
7. In addition:
(a) The parties shall each pay their own fees and expenses related
to the transactions contemplated agreed to herein, including,
without limitation, attorney and accountant fees.
(b) The transactions contemplated herein are confidential and may
not be disclosed to anyone other than the parties' respective
legal and financial representatives, to ▇▇▇▇▇ ▇. ▇▇▇▇▇ and his
legal and financial representatives, and except as required by
law (including the public disclosure obligations of Dotronix),
without the consent of the other party.
(c) The purpose of this Agreement is to set forth the essential
terms and conditions of the agreement of the parties. Upon
execution of this Agreement, the parties shall prepare
definitive documents to fully reflect the parties
understanding and agreement, which definitive documents shall
replace this Agreement.
(d) Time is of the essence to this Agreement and the parties agree
to use their best efforts to complete the documentation agreed
to herein by November 14, 2003.
(e) This Agreement shall be binding upon and insure to the benefit
of the parties, their respective successors and their assigns.
(f) Capitalized terms which are used in this Agreement and are not
otherwise defined in this Agreement have the meanings assigned
to them in the Loan Agreement. Dotronix' secured promissory
note to ▇▇▇▇▇▇ dated February 23, 2000 is referred to as the
"Note", and the documents referred to in Section 5.12 of the
Schedule to the Loan Agreement are referred to as the
"Collateral Documents".
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.
The Estate of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By its Personal Representatives
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
DOTRONIX, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Chief Financial Officer
EXHIBIT A
to that certain
AGREEMENT TO EXTEND AND AMEND LOAN AND SECURITY AGREEMENT
LEGAL DESCRIPTION
▇▇▇▇ ▇, ▇, ▇, ▇, ▇▇▇ ▇, ▇▇▇▇▇ 1, Chamber of Commerce Addition to the City of Eau
Claire, Chippewa County, Wisconsin
EXHIBIT B
REVOLVING CREDIT AGREEMENT TERMS
1. ▇▇▇▇▇ ▇. ▇▇▇▇▇ shall loan to Dotronix an amount up to a
maximum of four hundred fifty thousand dollars ($450,000),
pursuant to a revolving credit agreement, containing usual and
customary terms agreed to by the parties (the "Revolving
Credit Agreement").
2. The term of the Revolving Credit Agreement shall be one year
from the date of its execution by the parties.
3. The interest rate on funds borrowed by Dotronix under the
Revolving Credit Agreement shall be five percent (5%) per
annum, payable monthly on the outstanding balance.