EXHIBIT 10.142
AMENDMENT NO. 1
TO
LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is made this 3rd day of March, 2000, between DISPLAY TECHNOLOGIES, INC., a
Nevada corporation, and its wholly-owned subsidiaries ("Borrower"), and
SOUTHTRUST BANK, NATIONAL ASSOCIATION ("Bank"), with its principal office in
Birmingham, Alabama ("Bank") to record their agreement regarding modification of
the Loan Agreement dated June 2, 1999, between Bank and Borrower (the "Loan
Agreement"). Bank and Borrower agree as follows:
1. BACKGROUND. Pursuant to the terms and conditions of the Loan
Agreement, Bank committed to make available, among other credit facilities, a
revolving line of credit up to $10,000,000 (the "Revolving Loan"). To evidence
the Revolving Loan, Borrower executed in favor of Bank a Revolving Loan
Promissory Note (the "Note") in the amount of $10,000,000. Borrower has
requested an increase in the amount of the Revolving Loan, and Bank has agreed
to grant that increase under the terms and conditions provided in this
Amendment.
2. MODIFICATION. The Loan Agreement is amended as follows:
(a) Section 1.4 is amended by deleting reference to
"$10,000,000" and replacing it with "$23,000,000."
(b) Section 1.42 is amended by deleting reference to
"$10,000,000" and replacing it with "$23,000,000."
(c) Section 1.46(h) is amended in its entirety to read as
follows: "(h) not Inventory deemed ineligible by Bank in its sole
discretion; provided, however, the Loan Value of Inventory shall not at
any time exceed the lesser of $11,500,000 or one-half (1/2) of the
aggregate outstanding balance of the Revolving Loan, unless otherwise
agreed in writing by Bank at any time in its sole discretion."
(d) Section 2.1(a) is amended by deleting reference to
"$10,000,000" and replacing it with $23,000,000." This Section is
further amended the second to the last sentence in its entirety to read
as follows: "Notwithstanding any other provision of this Agreement, the
Loan Value of Inventory shall not at any time exceed the lesser of
$11,500,000 or one-half (1/2) of the aggregate outstanding balance of
the Revolving Loan."
(e) Section 2.1(c) is amended by deleting reference to
"December 31, 1999" and replacing it with "June 30, 2000."
(f) Section 2.1(f) is amended by deleting "$10,000,000" and
replacing it with "$23,000,000."
(g) Section 2.1(g) is amended by deleting "June 30, 2002" and
replacing it with "July 1, 2002."
(h) Section 2.9 is amended by adding the following sentence:
"Further, Borrower shall pay to Bank an agent fee of $5,000 that will
be assessed annually throughout the term of the Loans, and shall be due
and payable on the day of the closing of this Amendment and on the 1st
day of the March of each year of the term thereafter."
(i) Section 6.23(e) is amended by deleting "$5,000,000" and
replacing it with "$7,500,000."
(j) Section 7.10 is amended by deleting "$1,000,000" and
replacing it with "$2,000,000."
(k) Section 7.11 is amended by deleting the last sentence and
replacing it with:
Borrower acknowledges that Bank, in its sole and
absolute discretion, will determine whether or not the
addition of acquired assets will result in more eligible
Inventory and Eligible Accounts for borrowing base purposes.
In making this determination, Borrower agrees to make
available to Bank any and all information Bank deems necessary
or appropriate to conduct its due diligence investigation
concerning the acquired assets.
(k) New Sections 2.11 through 2.13 are added to the Loan
Agreement which read as follows:
2.11. DEPOSITS UNAVAILABLE. If Bank determines that
(a) dollar deposits in the relevant amount and for the
relevant Interest Period are not available to Bank in its
relevant market; or (b) by reason of circumstances affecting
Bank's relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBOR
Loans, then, upon notice from Bank to Borrower, the
obligations of Bank to make or continue any Revolving Loans
as, or to convert any Loans into, LIBOR Loans will be
suspended until Bank notifies Borrower that the circumstances
causing this suspension no longer exist.
2.12. INCREASED LIBOR LOAN COSTS, ETC. Borrower shall
reimburse Bank for any increase in the cost to Bank of, or any
reduction in the amount of any sum receivable by Bank in
respect of, making, continuing or maintaining (or of its
obligation to make, continue or maintain) Loans as, or of
converting (or of its obligation to convert) any Loans into,
LIBOR Loans as a result of any change in any
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law, rule, regulation, treaty or directive or in the
interpretation or administration thereof, or compliance by
Bank with any request or directive (whether or not having the
force of law) from any court, central bank, governmental
authority, agency or instrumentality, or comparable agency,
including but not limited to:
(a) any tax, duty or other charge with respect to any
LIBOR Loan, the Revolving Note or any Bank's obligation to
make any LIBOR Loan is imposed, modified or deemed applicable,
or the basis of taxation of payments to Bank of the principal
of, or interest on, any LIBOR Loan (other than taxes imposed
on the overall net income of such Bank by the jurisdiction in
which such Bank has its principal office) is changed after the
date hereof;
(b) any reserve, special deposit, special assessment
or similar requirement against assets of, deposits with or for
the account of, or credit extended by, Bank is imposed,
modified or is changed after the date hereof; or
(c) any other condition affecting this Agreement or
any LIBOR Loan is imposed on Bank or its relevant market after
the date hereof.
Bank shall promptly notify Borrower in writing of the
occurrence of any such change, such notice to state, in
reasonable detail, the reasons therefor and the additional
amount required fully to compensate Bank for such increased
cost or reduced amount. Borrower shall not be obligated to
Bank for any cost incurred pursuant to this section before 30
days prior to the later of (y) the incurrence of the cost or
(z) the retroactive application of such a change causing such
incurrence. Such additional amounts shall be payable by
Borrower directly to Bank within 15 days of its receipt of
such notice, and such notice shall be rebuttable presumptive
evidence of that additional amounts are due.
2.13 INCREASED CAPITAL COSTS. If any change in, or
the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the
amount of capital required or expected to be maintained by
Bank or any Person controlling Bank, and Bank determines (in
its sole and absolute discretion) that the rate of return on
its or such controlling Person's capital as a consequence of
the Loans made by Bank is reduced to a level below that which
Bank or such controlling Person could have achieved but for
the occurrence of any such circumstance, Borrower shall,
within 15 days of its receipt of notice from Bank, pay
directly to Bank additional amounts sufficient to compensate
Bank or such controlling Person for such reduction in rate of
return; provided, that Borrower shall not be obligated to
reimburse Bank for any cost incurred pursuant to this section
more than 30 days prior to the later of (y) the incurrence of
the cost or (z) the retroactive application of such a change
causing such incurrence. A statement of Bank as to
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any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on Borrower. In
determining such amount, Bank may use any commercially
reasonable method of averaging and attribution.
3. CONDITIONS PRECEDENT TO THIS AMENDMENT. In addition to any other
requirements set forth in this Amendment and in the Loan Agreement, Bank's
obligation to fund the increased amount of the Revolving Loan will be subject to
satisfaction of the following conditions precedent:
(a) CORPORATE PROCEEDINGS. All proper corporate proceedings
shall have been taken by Borrower to authorize this Amendment and the
transactions contemplated hereby.
(b) DOCUMENTATION. All instruments and proceedings in
connection with the transactions contemplated by this Amendment shall
be satisfactory in form and substance to Bank, and Bank shall have
received on the date of this Amendment copies of all documents
including records of corporate proceedings, which it may have requested
in connection therewith, including an opinion of counsel of Borrower
(reasonably acceptable as to form and content to Bank's counsel),
certified copies of resolutions adopted by the Board of Directors of
Borrower, certificates of good standing, and certified copies of the
Articles of Incorporation and Bylaws, and all amendments thereto, of
Borrower. Bank shall have received executed copies of the Amended and
Restated Revolving Loan Promissory Note.
(c) NO DEFAULT. No event shall have occurred or be continuing
which constitutes an Event of Default or which would constitute an
Event of Default with the giving of notice or the lapse of time or
both.
(d) INCUMBENCY CERTIFICATE. Bank shall have received an
incumbency certificate, dated as of the date of this Amendment,
executed by the Secretary or Assistant Secretary of Borrower, which
shall identify by name and title and bear the signature of the officer
of Borrower authorized to sign this Amendment and the Amended and
Restated Revolving Loan Promissory Note on behalf of Borrower. Bank
shall be entitled to rely upon such incumbency certificate in
completing the transactions contemplated herein or in any Loan
Document.
(e) NO ADVERSE CHANGE. There shall have been no material
adverse change in the condition, financial or other, of Borrower, from
such condition as it existed on the date of the most recent financial
statements of such Person delivered before the date of this Amendment.
(f) COMMITMENT FEE/EXPENSES. Bank shall have received payment
from Borrower of a commitment fee in the amount of $32,500. Further,
Borrower shall have paid all expenses of Bank (including fees and
expenses of its counsel) in connection with the
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preparation of this Amendment, the Amended and Restated Revolving Loan
Promissory Note, and the other documents related to this Amendment.
(g) AVAILABILITY UNDER THE LOAN. Borrower must have at least
$1,000,000 available to it under the Revolving Loan on the date of this
Amendment.
(h) ADDITIONAL DOCUMENTS. Bank shall have received such
additional legal opinions, certificates, proceedings, instruments, and
other documents as Bank or its counsel may reasonably request to
evidence (i) compliance by Borrower with legal requirements, (ii) the
truth and accuracy, as of the date of this Amendment, of the
representations of Borrower contained herein, and (iii) the due
performance or satisfaction by Borrower, at or prior to the date
hereof, of all agreements required to be performed and all conditions
required to be satisfied by borrower pursuant hereto.
4. REPRESENTATIONS AND WARRANTIES. Borrower represents to Bank the
following as of the effective date of this Amendment:
(a) Borrower has all requisite power, authority, and legal
right to execute, deliver and perform this Amendment;
(b) The execution, delivery, and performance of this Amendment
by Borrower has been duly authorized by all requisite corporate action
and will not (i) violate any Requirement of Law, (ii) conflict with the
articles of incorporation or bylaws of Borrower, (iii) accelerate the
maturity of, or result in any lien, penalty, security interest, or
encumbrance in, on, or under, any mortgage, indebtedness, security
agreement, or contingent obligation, (iv) result in a default or breach
of any material order, lease, contract, indenture, mortgage, judgment,
promissory note, or other agreement or instrument to which Borrower is
a party or any of Borrower's property is subject, or (v) require any
filing with, or consent, license, authorization, or approval of, any
Person;
(c) Borrower has complied with all the terms and conditions of
the Loan Agreement and the other Loan Documents, that there does not
exist any fact or event that constitutes, or with notice or lapse of
time or both would constitute, an Event of Default under the Loan
Agreement;
(d) This Amendment is a valid and binding obligation of
Borrower legally enforceable by Bank against Borrower in accordance
with its terms; and
(e) The following subsidiaries of Display Technologies, Inc.
have no assets, and are not currently conducting operations (nor do
they intend to start operations in the future): (i) ESC of Nevada,
Inc., (ii) Xxx Xxxx Industries of Nevada, Inc., and (iii) Nevada Semco,
Inc. (the "Inactive Corporations").
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5. COVENANT OF BORROWER.
(a) Borrower covenants and agrees that the existing line of
credit between Xxxxxxxx Sign Group, Inc. and Branch Bank & Trust in the
principal amount of approximately $2,000,000 will be paid and satisfied
in full (including the recording of all documents and instruments
necessary to evidence this satisfaction and the release of all
collateral), and that all agreements and documents evidencing that line
of credit shall be terminated within thirty (30) days of the date of
this Amendment. Evidence of the satisfaction of this line of credit and
release of all collateral shall be provided to Bank within this thirty
(30) day period. Failure to pay off the line of credit, satisfy the
same in full, obtain a release of all collateral and terminate all
agreements evidencing the line of credit in the thirty (30) day period
shall constitute an Event of Default under the Loan Agreement. Bank
recognizes the satisfaction of this line of credit is a permitted use
of proceeds under Section 2.6 of the Loan Agreement.
(b) Borrower acknowledges that Bank may, at its option, sell
participation interests in the Loans to participating banks pursuant to
Section 12.11 of the Loan Agreement. In addition to the covenants
relating to such participation rights set forth in the Loan Agreement,
Borrower shall execute any participation agreement reasonably requested
by Bank and a participating bank to evidence the terms of the
participating bank's relationship with Bank and Borrower.
6. JOINDER. Xxxxxxxx Sign Group, Inc. agrees to be bound as Borrower
under the Loan Agreement, this Amendment and all other loan documents as if it
were an original party to the Loan Agreement.
7. OTHER PROVISIONS. All capitalized terms that are used but not
expressly defined in this Amendment have the respective meanings ascribed to
them in the Loan Agreement, and the definitions of those terms in the Loan
Agreement are incorporated by reference in this Amendment. This Amendment and
the documents contemplated by it record the final, complete, and exclusive
understanding between Bank and Borrower regarding the modification of the Loan
Agreement. Except as amended and modified by this Amendment, the Loan Agreement,
and the other Loan Documents remain in full force and effect in accordance with
their respective terms and this Amendment shall not constitute a novation.
Borrower acknowledges that the Loan Agreement and the other Loan Documents are
not subject to any defenses, counterclaims, or rights of set-off. Bank has not
waived, and does not waive, any of its rights under the Loan Agreement or any
other Loan Document. This Amendment will become effective when it or a
counterpart of it has been executed by Bank and Borrower.
8. COUNTERPARTS. This Amendment may be executed in counterparts. Each
executed counterpart will constitute an original document, and all executed
counterparts, together, will constitute the same agreement.
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IN WITNESS WHEREOF, each of Borrower and Bank has caused this
instrument to be executed by its duly authorized officer.
BORROWER:
DISPLAY TECHNOLOGIES, INC. LA-MAN CORPORATION
By: By:
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J. Xxxxxxx Xxxxxxxx, J. Xxxxxxx Xxxxxxxx,
President/Chief Executive Officer Chairman
AD ART ELECTRONIC SIGN X.X. XXXXXXX CORPORATION
CORPORATION
By: By:
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J. Xxxxxxx Xxxxxxxx, J. Xxxxxxx Xxxxxxxx,
Chairman Vice-President
X.X. XXXXXXX MANUFACTURING, VISION TRUST MARKETING, INC.
INC.
By: By:
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J. Xxxxxxx Xxxxxxxx, J. Xxxxxxx Xxxxxxxx,
Chairman President
XXX XXXX INDUSTRIES, INC. X.X. XXXXXXX INDUSTRIES, INC.
By: By:
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J. Xxxxxxx Xxxxxxxx, J. Xxxxxxx Xxxxxxxx,
Chairman Vice-President
CERTIFIED MAINTENANCE XXXXXXXX SIGN GROUP, INC.
SERVICE, INC.
By: By:
--------------------------------- ---------------------------------
J. Xxxxxxx Xxxxxxxx, J. Xxxxxxx Xxxxxxxx,
Chairman Chairman
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BANK:
SOUTHTRUST BANK,
NATIONAL ASSOCIATION
By:
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Name:
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Title:
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