LOAN AGREEMENT
 
 
This Loan Agreement dated as of December 23, 2010, is by and between Daktronics,
Inc., a South Dakota corporation (the “Borrower”), and Bank of America, N.A., a
national banking association (the “Lender”).
 
ARTICLE I
 
DEFINITIONS AND ACCOUNTING TERMS
 
Section 1.1 Defined Terms.  As used in this Agreement the following terms shall
have the following respective meanings:
 
“Alternative Borrowing”: As defined in Section 2.1.
 
“Business Day”: Any day (other than a Saturday, Sunday or legal holiday in the
State of South Dakota) on which national banks are permitted to be open for
business in Sioux Falls, South Dakota.
 
“Closing Date”: The date on which the conditions set forth in Section 3.1 have
been satisfied and the Loan is closed.
 
“Default”: Any event which, with the giving of notice (whether such notice is
required under Section 6.1, or under some other provision of this Agreement, or
otherwise) or lapse of time, or both, would constitute an Event of Default.
 
“Default Rate”: As defined in the Revolving Note.
 
“ERISA”: The Employee Retirement Income Security Act of 1974, as amended.
 
“Event of Default”: Any event described in Section 6.1.
 
“Foreign Subsidiaries”: The following foreign, wholly owned subsidiaries of
Borrower: Daktronics Canada, Inc., Daktronics, GmbH, Daktronics UK, Ltd,
Daktronics Hong Kong Ltd, Daktronics Shanghai Ltd, Daktronics France SARL,
Daktronics Beijing, Daktronics Australia PTY LTD, Daktronics Japan, Inc. and
Daktronics FZE.
 
“GAAP”: Generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of any date of determination.
 
“Governmental Requirements”: All laws, statutes, codes, ordinances, and
governmental rules, regulations and requirements applicable to Borrower and
Lender.
 
“Guaranty”: The Guaranty of even date herewith executed by Borrower in favor of
Lender, wherein Borrower unconditionally and without limitation guarantees any
Alternative Borrowing extended to Borrower’s Foreign Subsidiaries.
 
“Loan Documents”: This Agreement, the Revolving Note, the Guaranty and any other
document collateral to or as security for the Revolving Loan.
 
“Obligations”: Borrower’s obligations in respect of the due and punctual payment
of principal and interest on the Revolving Note, or under the Guaranty, when and
as due, whether by acceleration or otherwise and all fees, expenses,
indemnities, reimbursements and other obligations of Borrower under this
Agreement or any other Loan Document, in all cases whether now existing or
hereafter arising or incurred.
 
“Person”: Any natural person, corporation, partnership, limited partnership,
joint venture, firm, association, trust, unincorporated organization, government
or governmental agency or political subdivision or any other entity, whether
acting in an individual, fiduciary or other capacity.
 
“Regulatory Change”: Any change after the date of this Agreement in federal,
state or foreign laws or regulations or the adoption or making after such date
of any interpretations, directives or requests applying to a class of banks
including Lender under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
 
“Revolving Loan”: As defined in Section 2.1.
 
“Revolving Loan Maturity Date”: November 15, 2011.
 
“Revolving Note”: The Revolving Note dated of even date herewith, in the amount
of the Revolving Loan, executed by Borrower and payable to the order of Lender.
 
Section 1.2 Accounting Terms and Calculations.  Except as may be expressly
provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP.
 
Section 1.3 Other Definitional Terms, Terms of Construction.  The words
“hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  References to Sections, Exhibits, Schedules and
like references are to Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise expressly provided.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”.  Unless the context in which used herein otherwise clearly
requires, “or” has the inclusive meaning represented by the phrase
“and/or”.  All incorporations by reference of covenants, terms, definitions or
other provisions from other agreements are incorporated into this Agreement as
if such provisions were fully set forth herein, and include all necessary
definitions and related provisions from such other agreements.  All covenants,
terms, definitions and other provisions from other agreements incorporated into
this Agreement by reference shall survive any termination of such other
agreements until the obligations of Borrower under this Agreement, the Revolving
Note and the Guaranty are irrevocably paid in full.
 
ARTICLE II
 
TERMS OF REVOLVING LOAN AND ALTERNATIVE BORROWING
 
Section 2.1 Revolving Loan.  Upon the terms and subject to the conditions
hereof, Lender agrees to make available a revolving loan (the “Revolving Loan”)
to Borrower of Ten Million and No/100 Dollars ($10,000,000.00) on the Closing
Date.  Borrower may obtain advances, prepay and obtain new advances under the
Revolving Loan, subject to the prepayment provisions of Section 2.2.  Lender
also agrees to made available to the Foreign Subsidiaries letters of credit,
multicurrency borrowings and bank guarantees (“Alternative Borrowing”), in an
amount not to exceed the Revolving Loan amount, it being understood and agreed
that the amount available to be borrowed under the Revolving Loan shall be
correspondingly reduced by the face amount of all Alternative Borrowing
issued.  Lender shall charge an origination fee equal to a per annum basis of
.50% of the face amount of any international letters of credit issued hereunder,
payable in advance quarterly on the last day of the prior calendar quarter, as
well as charge its standard issuance, documentation and examination fees
therefor.  All Alternative Borrowing shall have an expiration date on or before
November 15, 2011.  Lender shall have no obligation to issue Alternative
Borrowing, or to amend, extend, renew or replace any Alternative Borrowing,
unless it is in form and substance acceptable to Lender.  The Alternative
Borrowing shall be guaranteed by Borrower’s Guaranty.
 
Section 2.2 The Revolving Note; Interest and Repayment.  The Revolving Loan
shall be evidenced by the Revolving Note.  Lender shall enter in its ledgers and
records the payments made on the Revolving Loan, and Lender is authorized by
Borrower to enter on a schedule attached to the Revolving Note a record of such
payments.  The Revolving Note shall accrue interest and shall be payable,
together with interest thereon, and may be prepaid, in whole or in part at any
time without penalty.  If not sooner paid, the Revolving Note, together with all
accrued and unpaid interest thereon, shall be due and payable in full on the
Revolving Loan Maturity Date.  Lender shall not be required to permit advances
under the Revolving Loan or to extend Alternative Borrowing if Borrower remains
in default following the occurrence of an Event of Default that remains uncured
subsequent to the expiration of any applicable cure period.
 
Section 2.3 Use of Proceeds.  The proceeds of the Revolving Loan shall be used
for operations in the ordinary course of business and for capital expenditures.
 
Section 2.4 Unused Commitment Fee.  Borrower shall pay Lender an unused
commitment fee in the amount of 0.125% of the difference between the maximum
amount of the Revolving Loan amount and the average principal amount outstanding
under the Revolving Loan amount for the preceding quarterly period, which shall
include amounts allocated to Alternative Borrowing.  Such fee shall be payable
on or before the 30th day after the end of each calendar quarter.
 
ARTICLE III
 
CONDITIONS PRECEDENT
 
Section 3.1 Conditions of the Loan.  The obligation of Lender to make the
Revolving Loan hereunder shall be subject to the prior or simultaneous
fulfillment of each of the following conditions:
 
3.1(a) Documents.  Lender shall have received the following documents:
 
(i) The opinion of counsel to Borrower covering such matters as Lender may
request.
 
(ii) A copy of the corporate resolutions authorizing the execution, delivery and
performance of the Loan Documents by Borrower, and containing an incumbency
certificate showing the names and titles, and bearing the signatures of, the
officers of Borrower authorized to execute the Loan Documents, certified as of
the Closing Date by the Secretary or an Assistant Secretary of Borrower.
 
(iii) A certificate of good standing for Borrower in the jurisdiction of its
incorporation, certified by the appropriate governmental officials as of a date
not more than 15 days prior to the Closing Date.
 
3.1(b) Other Matters.  All organizational and legal proceedings relating to
Borrower and all instruments and agreements in connection with the transactions
contemplated by this Agreement shall be satisfactory in scope, form and
substance to Lender and its counsel, and Lender shall have received all
information and copies of all documents, including records of corporate
proceedings, which it may reasonably have requested in connection therewith,
such documents where appropriate to be certified by Borrower or governmental
authorities.
 
3.1(c) Fees and Expenses.  Lender shall have received amounts due and payable by
Borrower on or prior to the Closing Date, including the reasonable fees and
expenses of counsel to Lender payable pursuant to Section 7.2.
 
3.1(d) No Default.  All representations and warranties of Borrower made in this
Agreement shall remain true and correct and no Default or Event of Default shall
exist.
 
3.1(e) No Material Adverse Change.  There shall not have occurred a material
adverse change since July 31, 2010, in the business, assets, liabilities (actual
or contingent), operations, condition (financial or otherwise) or prospects of
Borrower or its subsidiaries, taken as a whole or in the facts an information
regarding such entities as represented to date.
 
3.1(f) No Actions.  The absence of any action, suit, investigation or proceeding
pending or threatened in any court or before any arbitrator or Government
Authority that purports (a) to materially and adversely affect Borrower or its
subsidiaries or (b) to affect any transaction contemplated hereby or the ability
of Borrower and its subsidiaries or any other obligor under the guarantees or
security documents to perform their respective obligations under the Loan
Documents.
 
3.1(g) Intercreditor Agreement.  Receipt by Lender of an Intercreditor Agreement
between Lender and US Bank on terms acceptable to Lender wherein, among other
things, all debt will be cross-defaulted.
 
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES
 
Borrower represents and warrants to Lender as follows:
 
Section 4.1 Organization, Standing, Etc.  Borrower is a corporation duly
incorporated and validly existing and in good standing under the laws of the
state of South Dakota, and has all requisite corporate power and authority to
own its properties and to carry on its business as now conducted, to enter into
this Agreement and the other Loan Documents to which it is a party and to issue
the Revolving Note and Guaranty and to perform its obligations hereunder and
thereunder.  This Agreement, the Revolving Note, the Guaranty and the other Loan
Documents to which it is a party have been duly authorized by all necessary
corporate action and when executed and delivered will be the legal and binding
obligations of Borrower.  The execution, delivery and performance of this
Agreement, the Revolving Note, the Guaranty and the other Loan Documents to
which it is a party will not violate Borrower’s Articles of Incorporation or
Bylaws or any law applicable to Borrower, and will not violate or cause a
default under or permit acceleration of any agreement to which Borrower is a
party.  Except for consents, approvals and exemptions previously obtained
(copies of which have been delivered to Lender), no approval of or exemption by
any Person is required in connection with Borrower’s execution, delivery and
performance of this Agreement, the Revolving Note, the Guaranty and the other
Loan Documents to which it is a party.  To Borrower’s knowledge, it is not in
material default (beyond any applicable grace period) in the performance of any
material agreement, order, writ, injunction, decree or demand to which it is a
party or by which it is bound.
 
Section 4.2 Financial Statements and No Material Adverse Change.  Borrower’s
audited financial statements as of May 1, 2010, and its unaudited financial
statements as of October 30, 2010, as filed with the Securities and Exchange
Commission, have been prepared in accordance with GAAP.  Borrower has no
material obligation, liability or asset not disclosed in such financial
statements, and there has been no material adverse change in the condition of
Borrower since the dates of such financial statements.
 
Section 4.3 Litigation.  Except as otherwise disclosed to Lender, there are no
actions, suits or proceedings pending or, to the knowledge of Borrower,
threatened against or affecting Borrower which, if determined adversely to
Borrower, would have a material adverse effect on the condition of Borrower or
on the ability of Borrower to perform its obligations under the Loan
Documents.  Borrower is not in violation of any Governmental Requirement where
such violation could reasonably be expected to impose a material liability on
Borrower.
 
Section 4.4 Taxes.  Borrower has filed all federal, state and local tax returns
required to be filed and has paid or made provision for the payment of all taxes
due and payable pursuant to such returns and pursuant to any assessments made
against it or any of its property (other than taxes, fees or charges the amount
or validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of Borrower).
 
Section 4.5 Subsidiaries.  Except for the Foreign Subsidiaries, Borrower has no
operating subsidiaries except Daktronics Installation, Inc. (all of such
subsidiaries being hereinafter referred to collectively as the “Subsidiaries”).
 
Section 4.6 Employee Benefit Plans.  Except as disclosed in writing to Lender:
(a) Borrower is not an employee benefit plan as defined in Section 3(1) of
ERISA, whether or not subject to ERISA; (b) no assets of Borrower constitute
assets of any such plan under ERISA regulations or rulings; (c) with respect to
any such plan that Borrower sponsors, participates in or has fiduciary duties
with respect to, Borrower has materially complied with all federal and state
laws, plan documents and funding requirements; (d) Borrower does not sponsor,
participate in, or have fiduciary duties with respect to any defined benefit
pension plan subject to Title IV of ERISA or any multi-employer pension plan as
defined in Section 3(37)(A) of ERISA or any plan providing medical or other
welfare benefits to retirees or other former employees (except as required by
federal or state law); and (e) Borrower is not (and has not ever been) a member
of a group of trades or businesses (whether or not incorporated) that is treated
as a single employer under Section 414 of the Internal Revenue Code.
 
Section 4.7 Federal Reserve Regulations.  Borrower is not engaged principally or
as one of its important activities in the business of extending credit for the
purpose of purchasing or carrying margin stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System or any successor
thereto).  The value of all margin stock owned by Borrower does not constitute
more than 25% of the value of the assets of Borrower.
 
Section 4.8 OFAC.  Borrower and each Subsidiary of Borrower is and will remain
in compliance in all material respects with all U.S. economic sanctions laws,
Executive Orders and implementing regulations as promulgated by the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”), and all
applicable anti-money laundering and counter-terrorism financing provisions of
the Bank Secrecy Act and all regulations issued pursuant to it.  Neither
Borrower nor any Subsidiary of Borrower (i) is a Person designated by the U.S.
government on the list of the Specially Designated Nationals and Blocked Persons
(the “SDN List”) with which a U.S. Person cannot deal with or otherwise engage
in business transactions, (ii) is a Person who is otherwise the target of U.S.
economic sanctions laws such that a U.S. Person cannot deal or otherwise engage
in business transactions with such Person or (iii) is controlled by (including
without limitation by virtue of such person being a director or owning voting
shares or interests), or acts, directly or indirectly, for or on behalf of, any
person or entity on the SDN List or a foreign government that is the target of
U.S. economic sanctions prohibitions such that the entry into, or performance
under, this Agreement or any other Loan Document would be prohibited under U.S.
law.
 
Section 4.9 Patriot Act.  Borrower and each of its Subsidiaries are in
compliance with (a) the Trading with the Enemy Act, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, (b) the Patriot Act and (c) other federal or
state laws relating to “know your customer” and anti-money laundering rules and
regulations.  No part of the proceeds of any Loan will be used directly or
indirectly for any payments to any government official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977.
 
ARTICLE V
 
COVENANTS
 
Until the Revolving Note, Guaranty and all of Borrower’s other Obligations shall
have been paid and performed in full, unless Lender shall otherwise consent in
writing:
 
Section 5.1 Financial Statements and Reports.  Borrower will furnish to Lender:
 
5.1(a) As soon as available and in any event within one hundred and twenty (120)
days after the end of each fiscal year of Borrower, financial statements of
Borrower consisting of at least statements of income, cash flow and changes in
stockholders’ equity, a balance sheet as at the end of such year, and a
statement of contingent liabilities as at the end of such year, setting forth in
each case in comparative form corresponding figures from the previous annual
audit, certified without qualification by an independent Certified Public
Accountant or other independent certified public accountants of recognized
regional standing selected by Borrower, as the case may be, and acceptable to
Lender.  Notwithstanding the foregoing, if Borrower is in compliance with all
filing requirements of the Securities and Exchange Commission (“SEC”) and timely
files all of the foregoing information with the SEC, Borrower shall not be
obligated to also provide such financial information to Lender.
 
5.1(b) As soon as available and in any event within forty-five (45) days after
the end of each fiscal quarter of Borrower, unaudited financial statements for
Borrower for such quarter and for the period from the beginning of such fiscal
year to the end of such quarter, substantially similar to the annual audited
statements.  Notwithstanding the foregoing, if Borrower is in compliance with
all filing requirements of the SEC and timely files all of the foregoing
information with the SEC, Borrower shall not be obligated to also provide such
financial information to Lender.
 
5.1(c) Immediately upon any officer of Borrower becoming aware of any Default or
Event of Default, a notice describing the nature thereof and what action
Borrower proposes to take with respect thereto.
 
5.1(d) From time to time, such other information regarding the business,
operation and financial condition of Borrower as Lender may reasonably request.
 
Section 5.2 Books and Records.  Borrower will keep adequate and proper records
and books of account in which full and correct entries will be made of its
dealings, business and affairs.
 
Section 5.3 Inspection.  Borrower will permit any Person designated by Lender to
visit and inspect any of the properties, books and financial records of
Borrower, to examine and to make copies of the books of accounts and other
financial records of Borrower, and to discuss the affairs, finances and accounts
of Borrower with its President/Chief Executive Officer and Chief Financial
Officer/Treasurer at such reasonable times and intervals as Lender may
designate.
 
Section 5.4 Existence.  Borrower will maintain its existence in good standing
under the laws of its jurisdiction of incorporation or formation, and its
qualification to transact business in each jurisdiction where failure so to
qualify would permanently preclude Borrower from enforcing its rights with
respect to any material asset or would expose Borrower to any material
liability.
 
Section 5.5 Notice of Litigation.  Borrower will give prompt written notice to
Lender of the commencement of any action, suit or proceeding affecting Borrower
alleging claims of Five Hundred Thousand and No/100 Dollars ($500,000.00) or
more which Borrower reasonable believes may result in a material loss. To the
extent Borrower discloses such litigation in its Securities and Exchange
Commission filings, such filing shall be considered written notice.
 
Section 5.6 Employee Benefit Plans.  Borrower shall neither take any action, nor
omit to take any action, if such action or omission would result in any of the
statements set forth in Section 4.6 (including any written disclosures made by
Borrower to Lender under Section 4.6) becoming inaccurate or misleading at any
time while the Revolving Note and Guaranty remain outstanding.
 
Section 5.7 Insurance.  Borrower will maintain with financially sound and
reputable insurance companies such insurance as may be required by law and such
other insurance in such amounts and against such hazards as is customary in the
case of reputable companies engaged in the same or similar business.
 
Section 5.8 Payment of Taxes.  Borrower will file all tax returns and reports
which are required by law to be filed by it and will pay before they become
delinquent, all taxes, assessments and governmental charges and levies imposed
upon it or its property and all claims or demands of any kind (including those
of suppliers, mechanics, carriers, warehousemen, landlords and other like
Persons) which, if unpaid, might result in the creation of a Lien upon its
property.
 
Section 5.9 Maintenance of Properties, Compliance.  Borrower will maintain its
properties in good condition, repair and working order, and supplied with all
necessary equipment, and make all necessary repairs, renewals, replacements,
betterments and improvements thereto, all as may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.  Borrower will comply in all material respects with all
laws, rules and regulations to which it may be subject.
 
Section 5.10 Sale of Assets.  Borrower will not sell, transfer, lease or
otherwise convey all or any substantial part of its assets except for sales and
leases of inventory in the ordinary course of business, except for the sale of
demonstration equipment, and except for advertising rights.
 
Section 5.11 Financial Covenants.  Borrower shall comply at all times with the
following financial covenants:
 
Basic Fixed Charge Coverage Ratio.  Maintain on a consolidated basis a Basic
Fixed Charge Coverage Ratio of at least 2.0:1.0 tested on an annual basis as of
the end of each fiscal year.  “Basic Fixed Charge Coverage Ratio” means the
ratio of (a) EBITDA minus the sum of (i) any dividends or other distributions
(with the exception of the special cash dividend of $0.50 per share of common
stock to be paid at the end of the second quarter of fiscal year 2011), (ii) a
reserve for maintenance capital expenditures in the amount of $6,000,000.00, and
(iii) tax expense to (b) all required principal and interest payments with
respect to Indebtedness (including but not limited to all payments with respect
to capitalized lease obligations of Borrower.)  “EBITDA” means for any period of
determination, the net income of Borrower before deductions for income taxes,
interest expense, depreciation and amortization, all as determined in accordance
with GAAP.  “Indebtedness” means all interest-bearing obligations, including
those represented by bonds, debentures, or other debt securities, except
principal reductions on the Revolving Note.
 
Funded Debt to EBITDA Ratio.  Maintain on a consolidated basis a ratio of Funded
Debt to EBITDA not exceeding 1.00:1.0 tested on a fiscal quarterly
basis.  “Funded Debt” means all interest bearing obligations, including those
represented by bonds, debentures, or other debt securities, excluding any
long-term contractual obligations related to marketing transactions whose source
of payment is underlying advertising agreements.  This ratio will be calculated
at the end of each reporting period for which Lender requires financial
statements from Borrower, using the results of the twelve-month period ending
with that reporting period.
 
Dividends.  With the exception of a special cash dividend of $0.50 per share of
common stock approved by Borrower’s board of directors to be paid at the end of
the second quarter of fiscal 2011, Borrower will not pay in excess of the
current year’s net profit after tax any dividends or otherwise make any
distributions or, or redemptions of, any of its outstanding stock.
 
Section 5.12 Liens.  Create, incur, assume or suffer to exist any lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
including, but not limited to, any lien to US Bank, other than the following:
 
(a) Liens pursuant to any Loan Document;
 
(b) Liens existing on the date hereof and fully disclosed to Lender and any
renewals or extensions thereof, provided that the property covered thereby is
not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted hereunder.
 
(c) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
 
(d) Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;
 
(e) Pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any lien imposed by ERISA;
 
(f) Easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person; and
 
(g) Liens securing judgments for the payment of money not constituting an Event
of Default hereunder or securing appeal or other surety bonds related to such
judgments.
 
Section 5.13 Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:
 
(a) Indebtedness under the Loan Documents;
 
(b) Indebtedness to other parties (excepting therefrom any Indebtedness to US
Bank) which in the aggregate exceeds $10,000,000.00.
 
Section 5.14 Change in Ownership, Management or Nature of Business.  Change its
ownership, management or line of business in a manner substantially different
than exists on the date hereof.
 
ARTICLE VI
 
EVENTS OF DEFAULT AND REMEDIES
 
Section 6.1 Events of Default.  The occurrence of any one or more of the
following events shall constitute an Event of Default:
 
6.1(a) Borrower shall fail to make when due, whether by acceleration or
otherwise, any payment of principal of or interest on the Revolving Note, the
Guaranty or any other obligations of Borrower to Lender pursuant to this
Agreement or any of the other Loan Documents.
 
6.1(b) Any representation or warranty made by or on behalf of Borrower in this
Agreement or any of the other Loan Documents or by or on behalf of Borrower in
any certificate, statement, report or document herewith or hereafter furnished
to Lender pursuant to this Agreement or any of the other Loan Documents shall
prove to have been false or misleading in any material respect on the date as of
which the facts set forth are stated or certified.
 
6.1(c) Borrower shall fail to comply with any covenant contained herein.
 
6.1(d) A sale, transfer, conveyance or encumbrance of Borrower’s properties
except as permitted under Section 5.10.
 
6.1(e) Borrower shall fail to comply with any other agreement, covenant,
condition, provision or term contained in this Agreement or any of the other
Loan Documents (other than those hereinabove set forth in this Section 6.1) and
such failure to comply shall continue for thirty (30) calendar days after
whichever of the following dates is the earliest: (i) the date Borrower gives
notice of such failure to Lender, (ii) the date Borrower should have given
notice of such failure to Lender pursuant to Section 5.1, or (iii) the date
Lender gives notice of such failure to Borrower.
 
6.1(f) Borrower shall become insolvent or shall generally not pay its debts as
they mature or shall apply for, shall consent to, or shall acquiesce in the
appointment of a custodian, trustee or receiver of itself or for a substantial
part of its property, or, in the absence of such application, consent or
acquiescence, a custodian, trustee or receiver shall be appointed for Borrower
or for a substantial part of the property thereof and shall not be discharged
within forty-five (45) days, or Borrower shall make an assignment for the
benefit of creditors.
 
6.1(g) Any bankruptcy, reorganization, debt arrangement or other proceedings
under any bankruptcy or insolvency law shall be instituted by or against
Borrower and, if instituted against Borrower, shall have been consented to or
acquiesced in by Borrower, as the case may be, or shall remain undismissed for
sixty (60) days, or an order for relief shall have been entered against
Borrower.
 
6.1(h) Any dissolution or liquidation proceeding shall be instituted by or
against Borrower and, if instituted against Borrower, shall be consented to or
acquiesced in by Borrower, as the case may be, or shall remain for forty-five
(45) days undismissed.
 
6.1(i) A judgment or judgments for the payment of money in excess of the sum of
One Million and No/100 Dollars ($1,000,000.00) in the aggregate, excluding any
amount covered by insurance, shall be rendered against Borrower and either (i)
the judgment creditor executes on such judgment or (ii) such judgment remains
unpaid or undischarged for more than sixty (60) days from the date of entry
thereof or such longer period during which execution of such judgment shall be
stayed during an appeal from such judgment.
 
6.1(j) The maturity of any material indebtedness of Borrower (other than the
Revolving Loan and Guaranty) shall be accelerated, or Borrower shall fail to pay
any such material indebtedness when due (after the lapse of any applicable grace
period) or any event shall occur or condition shall exist and shall continue for
more than the period of grace, if any, applicable thereto and shall have the
effect of causing, or permitting the holder of any such indebtedness to cause,
such material indebtedness to become due prior to its stated maturity or to
realize upon any collateral given as security therefor. For purposes of this
Section, indebtedness shall be deemed “material” if it exceeds Five Hundred
Thousand and No/100 Dollars ($500,000.00) as to any item of indebtedness or in
the aggregate for all items of indebtedness with respect to which any of the
events described in this Section has occurred.
 
6.1(k) Any execution or attachment shall be issued whereby any substantial part
of the property of Borrower shall be taken or attempted to be taken and the same
shall not have been vacated or stayed within thirty (30) days after the issuance
thereof.
 
6.1(l) Any default shall occur under any other Loan Document, and shall continue
beyond any grace or cure period provided therein with respect to such default.
 
Section 6.2 Remedies.  If (a) any Event of Default described in Sections 6.1
(f), (g) or (h) shall occur with respect to Borrower, the Revolving Note, the
Guaranty and all other obligations of Borrower to Lender under this Agreement
and the other Loan Documents shall automatically become immediately due and
payable, or (b) any other Event of Default shall occur and be continuing, then
Lender may declare the Revolving Note, the Guaranty and all other obligations of
Borrower to Lender under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the same shall immediately become due and
payable, in each case without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived, anything in this Agreement
or in the Revolving Note or Guaranty or in any of the other Loan Documents to
the contrary notwithstanding. Upon the occurrence of any of the events described
in clauses (a) or (b) of the preceding sentence Lender may exercise all rights
and remedies under this Agreement, the Revolving Note, the Guaranty and any of
the other Loan Documents and under any applicable law.  In addition, Lender may
cure the Event of Default on behalf of Borrower, and, in doing so, may enter
upon Borrower’s properties, and may expend such sums as it may deem desirable,
including attorneys’ fees, all of which shall be deemed to be advances hereunder
and under the Revolving Note, even though causing the Loan to exceed the face
amount of the Revolving Note, shall bear interest at the Default Rate and shall
be payable by Borrower on demand.
 
Section 6.3 Setoff.  From time to time, in connection with the payment of
principal and interest due and payable under the Revolving Note or Guaranty, and
in all other instances after the occurrence and during the continuance of an
Event of Default, Borrower hereby irrevocably authorizes and directs Lender, to
charge Borrower’s accounts and deposits with Lender (general or special, time or
demand, provisional or final), other than third party security accounts, and to
pay over to Lender an amount equal to all amounts from time to time due and
payable to the Lender hereunder, under the Revolving Note or Guaranty, or under
any of the Loan Documents or other promissory notes or instruments.  Borrower
hereby grants to Lender a security interest in and to all such accounts and
deposits maintained by the Borrower with Lender.
 
ARTICLE VII
 
MISCELLANEOUS
 
Section 7.1 Costs and Expenses.  Whether or not the transactions contemplated
hereby are consummated, Borrower agrees to reimburse Lender upon demand for all
reasonable out-of-pocket expenses paid or incurred by Lender (including fees and
expenses of Lender’s internal attorneys and those of Belin McCormick P.C.,
outside counsel to Lender, not to exceed $10,000.00, providing the Loan
Documents are not heavily negotiated by Borrower, as  reasonably determined by
Lender) in connection with the negotiation, preparation, approval, review,
execution, delivery, amendment, modification, interpretation, collection and
enforcement of this Agreement, the Revolving Note, the Guaranty, and the other
Loan Documents, whether or not the Loan is closed.  The obligations of Borrower
under this Section shall survive any termination of this Agreement.
 
Section 7.2 Waivers, etc.  No failure on the part of Lender or the holder of the
Revolving Note or Guaranty to exercise and no delay in exercising any power or
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any power or right preclude any other or further exercise
thereof or the exercise of any other power or right.  The rights and remedies of
Lender hereunder are cumulative and not exclusive of any right or remedy Lender
otherwise has.
 
Section 7.3 Notices.  Except when telephonic notice is expressly authorized by
this Agreement, any notice or other communication to any party in connection
with this Agreement shall be in writing and shall be sent by manual delivery,
electronic mail, telegram, telex, facsimile transmission, overnight courier or
United States mail (postage prepaid) addressed to such party at the address
specified on the signature page hereof, or at such other address as such party
shall have specified to the other party hereto in writing.  All periods of
notice shall be measured from the date of delivery thereof if manually
delivered, from the date of sending thereof if sent by electronic mail,
telegram, telex or facsimile transmission, from the first Business Day after the
date of sending if sent by overnight courier, or from four days after the date
of mailing if mailed.  Either party may change its address for notices by a
notice given not less than five (5) Business Days prior to the effective date of
the change.
 
Section 7.4 Successors and Assigns; Disposition of Revolving Loan.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, legal representatives, successors and assigns,
except that Borrower may not assign its rights or delegate its obligations
hereunder without the prior written consent of Lender.  Lender may at any time
sell, assign, transfer, grant participations in, or otherwise dispose of any
portion of the Revolving Loan to banks or other financial institutions.  Lender
may disclose any information regarding Borrower in Lender’s possession to any
prospective buyer or participant.
 
SECTION 7.5 GOVERNING LAW AND CONSTRUCTION.  THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT, THE REVOLVING NOTE AND GUARANTY SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF SOUTH DAKOTA, WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS OR PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL
LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.  WHENEVER POSSIBLE, EACH
PROVISION OF THIS AGREEMENT AND ANY OTHER STATEMENT, INSTRUMENT OR TRANSACTION
CONTEMPLATED HEREBY OR RELATING HERETO, SHALL BE INTERPRETED IN SUCH MANNER AS
TO BE EFFECTIVE AND VALID UNDER SUCH APPLICABLE LAW, BUT, IF ANY PROVISION OF
THIS AGREEMENT OR ANY OTHER STATEMENT, INSTRUMENT OR TRANSACTION CONTEMPLATED
HEREBY OR RELATING HERETO SHALL BE HELD TO BE PROHIBITED OR INVALID UNDER SUCH
APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE ONLY TO THE EXTENT OF SUCH
PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION
OR THE REMAINING PROVISIONS OF THIS AGREEMENT OR ANY OTHER STATEMENT, INSTRUMENT
OR TRANSACTION CONTEMPLATED HEREBY OR RELATING HERETO.
 
SECTION 7.6 CONSENT TO JURISDICTION.  AT THE OPTION OF LENDER, THIS AGREEMENT,
THE REVOLVING NOTE AND GUARANTY MAY BE ENFORCED IN ANY FEDERAL COURT OR SOUTH
DAKOTA CIRCUIT COURT SITTING IN SIOUX FALLS, SOUTH DAKOTA; AND BORROWER CONSENTS
TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT
VENUE IN SUCH FORUMS IS NOT CONVENIENT.  IN THE EVENT BORROWER COMMENCES ANY
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT,
LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF
THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
 
SECTION 7.7 WAIVER OF JURY TRIAL.  EACH BORROWER AND LENDER IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE REVOLVING NOTE, THE GUARANTY AND ANY OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
 
Section 7.8 Captions.  The captions or headings herein and any table of contents
hereto are for convenience only and in no way define, limit or describe the
scope or intent of any provision of this Agreement.
 
Section 7.9 Number; Gender.  The singular of all terms used herein shall include
the plural and the plural shall include the singular, and the use of any gender
herein shall include all other genders, where the context so requires or
permits.
 
Section 7.10 Entire Agreement.  This Agreement and the other Loan Documents
embody the entire agreement and understanding between Borrower and Lender with
respect to the subject matter hereof and thereof.  This Agreement supersedes all
prior agreements and understandings relating to the subject matter hereof.
 
Section 7.11 Counterparts.  This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart.
 
IMPORTANT: READ BEFORE SIGNING.  THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.  NO OTHER TERMS
OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY
ENFORCED.  YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN
AGREEMENT.
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 

 
DAKTRONICS, INC.
     
By /s/ James B. Morgan
 
Print Name: James B. Morgan
 
Title Chief Executive Officer
     
By /s/ William R. Retterath
 
Print Name: William R. Retterath
 
Title Chief Financial Officer
   
Borrower’s Address:
 
331 – 32nd Avenue
 
Brookings, South Dakota 57006
 

 
BANK OF AMERICA, N.A.
     
By /s/ Michael T. Letsch
 
Print Name: Michael T. Letsch
 
Title: Vice President
   
Lender’s Address:
 
Bank of America, N.A.
 
317 – 6th Avenue
 
Des Moines, Iowa 50309
 

 
 

--------------------------------------------------------------------------------