Exhibit(b)(1.2)
BANK OF AMERICA [Logo Omitted]
GA7-293-01-01
October 3,2005 30(degree) Xxxxxxxx Xxxxxxx
XXXXX 000
XXXXXXX, XX 00000
Marlton Technologies, Inc. w 7708592AOO
Sparks Exhibits Environments Corp. 770.357 2947
Sparks Exhibits & Environments, Ltd.
Sparks Exhibits & Environments, Inc.
Sparks Custom Retail LLC
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Re: Loan and Security Agreement dated as of February 6,
2004, as amended ("Loan Agreement"), among Sparks
Exhibits & Environments Corp., Sparks Exhibits &
Environments, Ltd., Sparks Exhibits & Environments,
Inc., Sparks Custom Retail LLC (formerly DMS Store
Fixtures LLC) and Bank of America, N.A, (as successor to
General Electric Capital Corporation)
Ladies and Gentlemen:
The Borrowers and Marlton Technologies, Inc. have informed the Lender that the
Board of Directors of Marlton has approved a reverse stock split of Marlton's
Common Stock ("Stock Split") in order to relieve Marlton of the substantial and
increasing expense of remaining a Securities and Exchange Commission reporting
company. The proposed transaction was publicly disclosed by Marlton in a press
release dated September 22, 2005. Marlton estimates that approximately
$1,600,000 will be paid to its shareholders to complete the Stock Split, if
approved by the shareholders. It is anticipated that funding will be provided by
the Borrowers under the Loan Agreement. If insufficient funds are available
under the Loan Agreement, Messrs. Harrow and Tarte have agreed to provide the
balance of funds necessary to complete the transaction, in the form of a
secured, subordinated shareholder loan to Marlton ("Shareholder Loan"). The
Borrowers and Marlton have requested the consent of the Lender to the foregoing.
The Lender hereby consents to the Stock Split, agrees that the Borrowers may
use Loan proceeds to fund redemptions of Marlton's Common Stock in connection
with the Stock Split, and consents to Marlton's incurrence of the Shareholder
Loan, This consent is conditioned upon the following: (1) Net Borrowing
Availability shall be at least $1,500,000 following consummation of the Stock
Split; (2) the terms of any Shareholder Loan shall be consistent with these
terms and otherwise satisfactory to the Lender in its sole discretion,
including a maturity date at least 90 days after the Stated Expiry Date and
interest paid-in-kind at a rate not greater than the current interest rate on
the Revolving Credit Advances; (3) cash prepayment ofprincipal and PIK interest
on any Shareholder Loan may be made only if (i) no Default or Event of Default
exists, (ii) upon giving effect to the payment, Net Borrowing Availability is
at least $1,500,000 on the payment date and on a pro forma daily average basis
for the preceding 30 days (with no day in such period less than $750,000),
(iii) the Term Loan has been paid in full (currently maturing March 1,2006),
and (iv) the cash payment is included in the denominator when calculating the
Fixed Charge Coverage Ratio for the applicable period; and (4) payment and
performance of the Shareholder
[Graphic Omitted]
Page 2
Loan shall be subordinated to the Obligations consistent with these terms and
otherwise on terms and liabilities being paid in the ordinary course of
business, and no acceleration of sales.
of America, N.A. now constitutes the Lender under the Loan Agreement, and that
the Borrowers and Guarantors have no actual or potential claim or cause of
action against the Lender relating to this waiver, the Loan Agreement or any
other Loan Documents occurring on or before the date hereof, and they hereby
waive and release the right to assert same.
This waiver shall not constitute a waiver of any term, right or event of default
under the Loan Agreement, except as expressly provided herein, and does not
establish a course of dealing among the parties. Terms are used herein as
defined in the Loan Agreement. Please sign in the space provided below to show
your agreement to these matters.
Sincerely,
BANK OF AMERICA, N.A.
/s/ Xxxx Xxxxxxxxx
-------------------------
Title: Vice President
BORROWERS;
SPARKS EXHIBITS & ENVIRONMENTS CORP.
SPARKS EXHIBITS & ENVIRONMENTS, INC.
SPARKS CUSTOM RETAIL LLC (FORMERLY DMS STORE FIXTURES LLC)
By /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
October 3, 2005
Page 3
GUARANTORS;
By /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx, Chief Executive Officer
By /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxxx, Chief Financial Officer
ACKNOWLEDGED AND AGREED TO
services only:
By /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx
