Exhibit 10.2
AMENDMENT NO. 1 TO
AMENDED AND RESTATED COMMERCIAL LOAN AND
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SECURITY AGREEMENT
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This
AMENDMENT NO. 1 TO AMENDED AND RESTATED COMMERCIAL LOAN AND
SECURITY
AGREEMENT (this "Agreement") is made as of the 9th day of May,
2006, by and
among TRANS-LUX CORPORATION, a Delaware corporation, with its chief
executive
office and principal place of business located at 110 Richards
Avenue, Norwalk,
Connecticut 06854 ("Borrower"), each of the other corporations
signatory hereto
as guarantors (collectively, the "Guarantors"), and PEOPLE'S BANK,
a Connecticut
chartered banking corporation with an office located at 350 Bedford
Street,
Stamford, Connecticut 06901 ("Lender").
WITNESSETH:
WHEREAS,
Lender has made certain loans (collectively, the "Loans") to
Borrower pursuant to a certain Amended and Restated Commercial Loan
and Security
Agreement dated as of December 23, 2004 (as amended from time to
time, the
"LSA");
WHEREAS,
capitalized terms not otherwise defined in this Agreement shall
have the meanings ascribed to them in the LSA;
WHEREAS,
the Guarantors have guaranteed all obligations of the Borrower
to
the Lender under the LSA and related Loan Documents pursuant to a
certain
Amended and Restated Unlimited Guaranty dated as of December 23,
2004 (as the
same may be amended or reaffirmed from time to time, the "Guaranty
Agreement");
WHEREAS,
as security for its obligations to the Lender, including,
without
limitation, those arising under the LSA the Borrower has, among
other things,
granted to the Lender a lien on and security interest in all of its
personal
property assets pursuant to the LSA; and WHEREAS, as security for
their
respective obligations to the Lender under the Guaranty Agreement,
each Secured
Guarantor has granted to the Lender a lien on and security interest
in all if
its personal property assets pursuant to a certain Amended and
Restated
Guarantor Security Agreement dated as of December 23, 2004 (the
"Guarantor
Security Agreement"); and
WHEREAS,
Borrower and the Guarantors (collectively, the "Obligors") have
requested Lender (i) to retroactively amend certain financial
covenants for the
quarters ended December 31, 2005 and March 31, 2006; (ii) to
prospectively amend
certain financial covenants for the quarters ending June 30, 2006,
September 30,
2006, December 31, 2006 and all quarters thereafter; (iii) to amend
the maturity
dates of all Loans to January 1, 2008; (iv) to modify the interest
rate
applicable to the Line of Credit Loan as well as certain terms and
conditions
relating to advances under said Line of Credit Loan; (v) to amend
and restate
the Term Loan Note to reflect the modification of the maturity date
applicable
thereto; (vi) to modify covenants relating to the maximum amount of
non-
financed capital expenditures; (vii) to clarify that the proceeds
of the
Revolving Loans shall not be used to repay Subordinated Debt; and
(viii) to add
an additional mandatory prepayment event and a forbearance and
amendment fee;
and
<PAGE>
WHEREAS,
Section 10.1 of the LSA provides that no modification or
amendment
of the Credit Agreement shall be effective unless the same shall be
in writing
and signed by the Lender and Borrower.
NOW,
THEREFORE, in consideration of One Dollar ($1.00) and other good
and
valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, Lender and each Obligor agree as follows:
1. Acknowledgments,
Affirmations and Representations and Warranties.
a.
The Obligors acknowledge, affirm, represent and warrant that:
(i) All of the
statements contained herein are true and correct and
that each understands that the Lender is relying on the truth and
completeness
of such statements to enter into this Agreement.
(ii) As of May 1,
2006, the Borrower is legally and validly indebted to
the Lender: (A) by
virtue of the Term Loan in the principal amount of
$8,750,000.00, (B) by virtue of the Revolving Loan in the principal
outstanding
amount of $850,000.00, (C) by virtue of the Line of Credit Loan in
the principal
outstanding amount of $0.00, (D) by virtue of the Converted Term
Loan in the
principal amount of $0.00, plus interest and fees accrued and
accruing on each
of the foregoing and costs and expenses of collection, including
without
limitation, attorneys' fees, relating thereto and there is no
defense, offset or
counterclaim with respect to any of the foregoing or independent
claim or action
against the Lender.
(iii) Each Guarantor
is legally and validly indebted to the Lender by
virtue of the Guaranty Agreement and there is no defense, offset or
counterclaim
with respect thereto or independent claim or action against the
Lender.
(iv) The resolutions
previously adopted by the Board of Directors of
the Borrower and provided to the Lender have not in any way been
rescinded or
modified and have been in full force and effect since their
adoption to and
including the date hereof and are now in full force and effect,
except to the
extent that they have been modified or supplemented to authorize
this Agreement
and the documents and transactions described herein.
(v) The Borrower has
the power and authority to enter into, and has
taken all necessary corporate action to authorize, this Agreement
and the
transactions contemplated hereby and thereby.
(vi) The resolutions
previously adopted by the Board of Directors of
each of the Guarantors and provided to the Lender have not in any
way been
rescinded or modified and have been in full force and effect since
their
adoption to and including the date hereof and are now in full force
and effect,
except to the extent that they have been modified or supplemented
to authorize
this Agreement and the documents and transactions described
herein.
(vii) Each Guarantor
has the power and authority to enter into, and has
taken all necessary corporate action to authorize, this Agreement
and the
transactions contemplated hereby and thereby.
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(viii) All
representations, warranties and covenants contained in, and
schedules and exhibits to, the LSA, the Guaranty Agreement and the
other Loan
Documents are true and correct in all material respects on and as
of the date
hereof, are incorporated herein by reference and are hereby remade
except that
Schedule 4.4(c) to the LSA relating to outstanding indebtedness of
the Borrower
and the Guarantors is hereby updated and replaced with Schedule
4.4(c) attached
hereto.
(ix) After giving
effect to the amendments provided herein, no Default
currently exists under the LSA, the Guaranty Agreement or any of
the other Loan
Documents and no condition exists which would constitute a default
or an event
of default (howsoever defined) under any of the Loan Documents but
for the
giving of notice or passage of time, or both.
(x) The consummation
of the transactions contemplated hereby is not
prevented or limited by, nor does it conflict with or result in a
breach of
terms, conditions or provisions of the Borrower's or any
Guarantor's Certificate
of Incorporation or Bylaws or any evidence of indebtedness,
agreement or
instrument of whatever nature to which the Borrower or any
Guarantor is a party
or by which it is bound, does not constitute a default under any of
the
foregoing and does not violate any federal, state or local law,
regulation or
order or any order of any court or agency which is binding upon the
Borrower or
any Guarantor.
2. Amendment of LSA
and other Loan Documents.
a.
Section 1.1 of the LSA entitled "Defined Terms" is amended as
follows:
(i) by deleting the
definition of "Existing Term Notes" set forth
therein in its entirety and by substituting the following
therefor:
"Existing
Term Note" means that certain Replacement Term Loan
Promissory Note of the
Borrower payable to the Lender dated December
23, 2004 in the
original principal amount of $10,000,000.
(ii) by deleting the
definition of "Maturity Date" set forth therein in
its entirety and by substituting the following therefor:
"Maturity
Date" means: (i) with
respect to the Term Loan, January
1, 2008; (ii) with
respect to all outstanding Line of Credit Loans and
all Converted Term
Loans, January 1, 2008; and (iii) with respect to
all outstanding
Revolving Loans, January 1, 2008.
(iii) by adding the
following defined terms in alphabetical order:
"Additional Mandatory Prepayment Event" shall have the meaning
set
forth in Section 2.19A
hereof.
"Forbearance and Amendment Fee" shall mean the fee to be paid
by
the Borrower to the
Lender in consideration of the amendments and
waivers granted by the
Lender to the Borrower and the Guarantors as set
forth in that certain
Amendment No. 1 to Amended and Restated
Commercial Loan and
Security Agreement among the Borrower, the
Guarantors
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<PAGE>
and the Lender dated
as of May 9, 2006 which Forbearance and Amendment
Fee shall be paid as
follows: (i)
$125,000, if there is an Additional
Mandatory Prepayment
Event on or before October 1, 2006, (ii) $250,000,
if there is an
Additional Mandatory Prepayment Event after October 1,
2006 but on or before
December 31, 2006, and (iii) $350,000, if there
is an Additional
Mandatory Prepayment Event after December 31, 2006.
"Routine
Asset Transfer" means the transfer of assets of the
Borrower and/or any
Guarantor which are permitted under Section 6.6
hereof.
b.
Section 2.2 of the LSA is hereby entitled "Term Loan" is hereby
amended
as follows:
(i) by deleting Section 2.2(a) in its entirety and by substituting
the
following therefor:
"(a) The
Lender extended to the Borrower a term loan in the
original principal amount of $10,000,000 on December 23, 2004 (the
"Term
Loan") which Term Loan has an outstanding principal balance of
$8,750,000.00 as
of May 9, 2006."
(ii) by
deleting Section 2.2(b) therein in its entirety and by
substituting
the following therefor:
"(b) The
Term Loan shall be evidenced by, and repaid in accordance
with the promissory
note of the Borrower, substantially in the form
attached hereto as
Exhibit B (the "Term Loan Note"). The Term Loan
Note issued to Lender
shall (i) be executed by the Borrower, (ii) be
payable to Lender and
be dated as of May 9, 2006, (iii) be in a stated
principal amount equal
to $8,750,000.00 and be payable as provided in
Section 2.2(d), (iv)
mature on the Maturity Date of the Term Loan, (v)
bear interest as
provided in Section 2.5, and (vi) be entitled to the
benefits of this
Agreement and the other Loan Documents. The Term Loan
Note amends, restates
and replaces in its entirety the Existing Term
Note pr
