Exhibit 10.5
people's bank People's Bank
People's Financial Plaza
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
November 16, 2006
Xx. Xxxxxx Xxxxx
Chief Financial Officer
Trans-Lux Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Dear Xx. Xxxxx:
Reference is made to the $21,150,000 Commercial Loan and Security dated December
23, 2004 between People's Bank and Trans-Lux Corporation and Amendment number 1
to amend and restate the commercial loan and security agreement dated May 9,
2006 between People's Bank and Trans-Lux Corporation. Upon your acknowledgement
and effective the date of your acknowledgement and agreement below, the Bank
agrees to amend and modify the following terms and conditions under the Loan
Documents subject to the terms and conditions contained herein (the "Amendment
and Modification"). Note that this letter may be superseded by an Amendment and
Modification Agreement prepared by People's Bank counsel, subject to the sole
discretion of People's Bank.
Covenants:
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* The following covenants will be modified for the rolling 4 quarters ended
September 30, 2006 and the rolling 4 quarters ending December 31, 2006 and
all rolling 4 quarter periods thereafter:
(1) The definition of Fixed Charge Coverage shall mean: Earnings before
Interest Taxes Depreciation and Amortization minus total capital
expenditures less $2,500,000, minus total dividends (the numerator),
divided by total interest expense plus prior period current portion of
long-term debt plus any provision for income taxes (the denominator).
"Prior period current portion of long-term debt" shall mean current
portion of long-term debt due during the 4 quarters then ended.
(2) The Fixed Charge Coverage covenant shall be no less than 1.10x for the
rolling 4 quarters ended September 30, 2006, the rolling 4 quarters
ending December 31, 2006, and all quarters thereafter.
(3) Tangible Net Work shall be no less than $18,500,000 at all times.
Additional Conditions:
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* All other terms and conditions will remain unchanged.
The undersigned agrees and acknowledges that the Amendment and Modification of
the Loan Agreement may be superseded by a formal Amendment and Modification
Agreement subject to the sole discretion of People's Bank to be prepared by
People's Bank counsel. Failure to execute the formal Amendment and Modification
Agreement, if required by People's Bank, within 5 business days of receipt of
such agreement shall render the terms of this letter null and void. All related
legal fees and closing costs in conjunction with the preparation of this letter
and the legal documents to follow will be paid by the Borrower.
Furthermore, the foregoing shall not be deemed a waiver of, or in prejudice to,
any other rights of the Bank under the Loan Documents or any other documents
executed in connection therewith. This Amendment and Modification shall be
applicable only to the specific terms and conditions referred to herein and
shall not modify any other obligations of Trans-Lux Corporation to the Bank.
Upon your acceptance of the below, please sign and date and return a copy of
this agreement along with a check made payable to People's Bank on the amount of
$5,000.00 representing the "Amendment Fee" for this agreement.
People's Bank
By /s/ Xxxxxx Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Vice President
Agreed and Accepted to:
Trans-Lux Corporation
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By /s/ Xxxxxx X. Xxxxx Date: 11/16/06
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Xxxxxx Xxxxx,
Chief Financial Officer, duly authorized
people's bank People's Bank
People's Financial Plaza
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
April 2, 2007
Xx. Xxxxxx Xxxxx
Chief Financial Officer
Trans-Lux Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Dear Xx. Xxxxx:
Reference is made to the $21,150,000 Commercial Loan and Security dated December
23, 2004 between People's Bank and Trans-Lux Corporation, Amendment Number 1 to
Amend and Restate the Commercial Loan and Security Agreement dated May 9, 2006
and the Amendment & Waiver Agreement dated November 16, 2006 between People's
Bank and Trans-Lux Corporation. Upon your acknowledgement and effective the
date of your acknowledgement and agreement below, the Bank hereby agrees to
Extend, Waive and Modify the following terms and conditions under the Loan
Documents subject to the terms and conditions contained herein (the "Extension,
Waiver and Modification"). Note that this letter will be superseded by an
Extension, Waiver and Modification Agreement prepared by People's Bank counsel,
subject to the sole discretion of People's Bank.
1. The December 31, 2006 company-prepared compliance certificate reported
capital expenditures of $1,681,000 for the 3-month period then ended.
Amendment Number 1 to Amend and Restate the Commerical Loan and Security
Agreement dated May 9, 2006 states that Capital Expenditures must not be
more than $1,000,000 per quarter.
2. The maturity date of the loan agreement will be hereby extended from January
1, 2008 to April 1, 2008. As part of this extension agreement, the
"Forbearance and Amendment Fee" of $350,000 will be enforced if there is an
"Additional Mandatory Prepayment Event" of the loans on or prior to April 1,
2008.
Additional Conditions:
* All other terms and conditions will remain unchanged.
The undersigned agrees and acknowledges that the Extension, Waiver and
Modification of the Loan Agreement will be superseded by a formal Extension,
Waiver and Modification Agreement subject to the sole discretion of People's
Bank to be prepared by People's Bank counsel. Failure to execute the formal
Amendment and Modification Agreement, if required by Peoples Bank, within 5
business days of receipt of such agreement shall render the terms of this letter
null and void. All related legal fees and closing costs in conjunction with the
preparation of this letter and the legal documents to follow will be paid by the
Borrower.
Furthermore, the foregoing shall not be deemed a waiver of, or in prejudice to,
any other rights of the Bank under the Loan Documents or any other documents
executed in connection therewith. This Extension, Waiver and Modification shall
be applicable only to the specific terms and conditions referred to herein and
shall not modify any other obligations of Trans-Lux Corporation to the Bank.
Upon your acceptance of the below, please sign and date and return a copy of
this agreement along with a check made payable to People's Bank in the amount of
$22,500.00 representing the "Extension Fee" for this agreement. Upon executing
the Formal Extension, Waiver and Modification prepared by People's Bank counsel,
an additional $22,500.00 will be due and Payable to People's Bank.
People's Bank
By /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Vice President
Agreed and Accepted to:
Trans-Lux Corporation
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By /s/ Xxxxxx Xxxxx Date: 04/02/07
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Xxxxxx Xxxxx,
Chief Financial Officer, duly authorized
