Exhibit 10.2

 

AMENDMENT NUMBER FIVE TO LOAN AND
SECURITY AGREEMENT AND WAIVER

 

This Amendment Number Five to Loan and Security Agreement and Waiver (“Fifth
Amendment”) is entered into as of July 16, 2003, by and between WELLS FARGO
FOOTHILL, INC., a California corporation, f/k/a/ Foothill Capital Corporation
(“Foothill”), and EVANS & SUTHERLAND COMPUTER CORPORATION, a Utah corporation
(“Borrower”), in light of the following:

 

A.                                   Borrower and Foothill have previously
entered into that certain Loan and Security Agreement, dated as of December 14,
2000 (“Agreement”);

 

B.                                     On or about June 19, 2001, Borrower and
Foothill entered into that certain amending Letter Agreement, whereby certain
terms and conditions of the Agreement were temporarily amended;

 

C.                                     On or about February 22, 2002, Borrower
and Foothill entered into that certain Amendment Number One to Loan and Security
Agreement and Waiver whereby certain terms and conditions of the Agreement were
amended;

 

D.                                    On or about August      , 2002, Borrower
and Foothill entered into that certain Amendment Number Two to Loan and Security
Agreement and Waiver whereby certain terms and conditions of the Agreement were
further amended

 

E.                                      On or about December 11, 2002, Borrower
and Foothill entered into that certain Amendment Number Three to Loan and
Security Agreement and Waiver whereby certain terms and conditions of the
Agreement were further;

 

F.                                      On or about January 8, 2003, Borrower
and Foothill entered into that certain Amendment Number Four to Loan and
Security Agreement and Waiver whereby certain terms and conditions of the
Agreement were further amended;

 

G.                                     On or about March 14, 2003, Borrower and
Foothill entered into that certain amending Consent Letter, whereby certain
terms and conditions of the Agreement were temporarily amended (the Agreement,
as amended by the letter agreement, the first amendment, the second amendment,
the third amendment, the fourth amendment, and the consent letter, all as
referenced above, is hereinafter referred to as the “Loan Agreement”); and

 

H.                                    Borrower and Foothill desire to further
amend the Loan Agreement as provided for and on the conditions herein.

 

NOW, THEREFORE, Borrower and Foothill hereby amend and supplement the Loan
Agreement as follows:

 

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1.                                      DEFINITIONS.  All initially capitalized
terms used in this Fifth Amendment shall have the meanings given to them in the
Agreement unless specifically defined herein.

 

2.                                      AMENDMENTS.

 

(a)                                  The definition of “Amortizing Base Amount”
as set froth in Section 1.1 of the Loan Agreement is amended by deleting it in
its entirety and substituting the following in its place and stead:

 

““Amortizing Base Amount” means the lesser of:  (i) Twelve Million Five Hundred
Thousand Dollars ($12,500,000), or (ii) Fifty-Seven Point Four Per Cent (57.4%)
of Foothill’s most recent appraised value of the Real Property Collateral, both
of which are further reduced by subtracting the following: (y) commencing
January 1, 2003, and for each and every full or partial month thereafter, the
sum of One Hundred Twenty-Five Thousand Dollars ($125,000.00) for each and every
partial or full month; and further subtracting (z) each Adjusted Allocated
Auction Value for each parcel of Real Property Collateral sold during the term
hereof.”

 

(b)                                 There is added a new definition to Section
1.1 of the Loan Agreement as follows:

 

““Availability” means, as of any date of determination, the amount that Borrower
is entitled to borrow as Advances hereunder (after giving effect to all then
outstanding Obligations, and all sublimits and reserves then applicable
hereunder).”

 

(c)                                  There is added a new definition to Section
1.1 of the Loan Agreement as follows:

 

““Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least

 

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A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit or
bankers’ acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United Kingdom of Great
Britain, the United States, or any state thereof having at the date of
acquisition thereof combined capital and surplus of not less than $250,000,000,
(e) demand Deposit Accounts maintained with any bank organized under the laws of
the United Kingdom of Great Britain, the United States, or any state thereof,
and (f) Investments in money market funds substantially all of whose assets are
invested in the types of assets described in clauses (a) through (e) above.

 

(d)                                 There is added a new definition to Section
1.1 of the Loan Agreement as follows:

 

““Excess Availability” means, as of any date of determination, the amount equal
to Availability minus the aggregate amount, if any, of all trade payables of
Borrower and its Subsidiaries aged in excess of historical levels with respect
thereto and all book overdrafts of Borrower and its Subsidiaries in excess of
historical practices with respect thereto, in each case as determined by Agent
in its Permitted Discretion.

 

(e)                                  There is added a new definition to Section
1.1 of the Loan Agreement as follows:

 

““Fifth Amendment” means that certain Amendment Number Five to Loan and Security
Agreement dated as of June      , 2003, entered into between Borrower and
Foothill.”

 

(f)                                    The definition of “Foothill Expenses” as
set froth in Section 1.1 of the Loan Agreement is amended by adding the
following clause at the conclusion thereof:

 

“consultants’ or other professionals’ fees and expenses incurred in reviewing
and advising Foothill on the business plan and operations of Borrower and
Borrower’s Affiliates, which such sum are not expected to exceed sixty thousand
dollars ($60,000) plus out of pocket expenses during the first sixty (60) days
following the date hereof; provided, however, that if on the basis of the review
performed during such sixty day period Foothill believes it prudent in the
exercise of its Permitted Discretion for further review to occur, the Sixty
Thousand Dollar ($60,000) figure and time periods for review may be exceeded.”

 

(g)                                 Section 2.5(a) of the Loan Agreement shall
be amended by deleting it in its entirety and substituting the following in its
place and stead:

 

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“(a)                            Interest Rate.  Except as provided in clause (c)
below, all Obligations as reflected in the Loan Account (except for undrawn
Letters of Credit) shall bear interest at the per annum rate set forth below:

 

(i)                                     if the sum of outstanding Advances,
outstanding Letters of Credit and L/C Guarantees, is less than Fifteen Million
Dollars ($15,000,000), three (3) percentage points above the Reference Rate;

 

(ii)                                  if the sum of outstanding Advances,
outstanding Letters of Credit, and L/C Guarantees, is greater than or equal to
Fifteen Million Dollars ($15,000,000), and equal to or less than Twenty Million
Dollars ($22,000,000), three and one-half (3 1/2) percentage points above the
Reference Rate;

 

(iii)                               if the sum of outstanding Advances,
outstanding Letters of Credit, and L/C Guarantees, exceeds Twenty Million
Dollars ($22,000,000), four and one-half (4 1/2) percentage points above the
Reference Rate.”

 

(h)                                 Section 2.5(b) of the Loan Agreement shall
be amended by deleting it in its entirety and substituting the following in its
place and stead:

 

“(b)                           Letter of Credit Fee.  Borrower shall pay
Foothill a fee, payable monthly, (in addition to the charges, commissions, fees,
and costs set forth in Section 2.2(d)) equal to the amount set forth below:

 

(i)                                     if the sum of outstanding Advances,
outstanding Letters of Credit, and L/C Guarantees, is less than Fifteen Million
Dollars ($15,000,000), three and one-half (3 1/2) percent per annum times the
daily balance of outstanding Letters of Credit;

 

(ii)                                  if the sum of outstanding Advances,
outstanding Letters of Credit, and L/C Guarantees, is between Fifteen Million
Dollars ($15,000,000) and Twenty Million Dollars ($22,000,000), three and
three-quarters (3 3/4) percent per annum times the daily balance of outstanding
Letters of Credit;

 

(iii)                               if the sum of outstanding Advances,
outstanding Letters of Credit, and L/C Guarantees, exceeds Twenty Million
Dollars ($22,000,000), five (5) percent per

 

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annum times the daily balance of outstanding Letters of Credit.

 

Such Letter of Credit fees shall continue to be owing and paid so long as any
Letters of Credit remain outstanding (even after the termination or expiration
of this Agreement), and even if Borrower cannot request the issuance of any
additional Letters of Credit.”

 

(i)                                     Section 2.5(d) of the Loan Agreement
shall be amended by deleting it in its entirety and substituting the following
in its place and stead:

 

“(d)                           Minimum Interest.  In no event shall the rate of
interest chargeable hereunder for any day be less than ten and one-quarter
percent (10 1/4%) per annum.  To the extent that interest accrued hereunder at
the rate set forth herein would be less than the foregoing minimum daily rate,
the interest rate chargeable hereunder for such day automatically shall be
deemed increased to the minimum rate.

 

(j)                                     Section 2.10 of the Loan Agreement shall
be amended by adding the following subsection (g):

 

“(g)                           Fifth Amendment Fee.  Upon mutual execution of
the Fifth Amendment, a fee as consideration for entering into the Fifth
Amendment, in the amount of Sixty Thousand Dollars ($60,000.00), which such fee
Foothill can charge to Borrower’s Loan Account.”

 

(k)                                  Section 7.17 of the Loan Agreement is
deleted in its entirety, and the following substituted in its place and stead:

 

“7.17  FINANCIAL COVENANTS.

 

Fail to maintain amounts equal to the sum of: (i) Cash Equivalents, and (ii)
Excess Availability of at least the required amounts set forth in the following
table as of the applicable dates set forth opposite thereto:

 

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Applicable Amount

 

Applicable Date

$11,500,000

 

6/30/03

$11,000,000

 

9/30/03

$14,000,000

 

12/31/03, and the last day of each fiscal quarter thereafter

 

3.                                      REPRESENTATIONS AND WARRANTIES. 
Borrower hereby affirms to Foothill that all of Borrower’s representations and
warranties set forth in the Agreement are true, complete and accurate in all
respects as of the date hereof.

 

4.                                      NO DEFAULTS.  Borrower hereby affirms to
Foothill that, other than  Events of Default having been expressly waived by
Foothill in writing, no Event of Default has occurred and is continuing as of
the date hereof.

 

5.                                      CONDITION PRECEDENT.  The effectiveness
of this Fifth Amendment is expressly conditioned upon the  receipt by Foothill
of an executed copy of this Fifth Amendment.

 

6.                                      COSTS AND EXPENSES.  Borrower shall pay
to Foothill all of Foothill’s out-of-pocket costs and expenses (including,
without limitation, the fees and expenses of its counsel, which counsel may
include any local counsel deemed necessary, search fees, filing and recording
fees, documentation fees, appraisal fees, travel expenses, and other fees)
arising in connection with the preparation, execution, and delivery of this
Fifth Amendment and all related documents.

 

7.                                      LIMITED EFFECT.  In the event of a
conflict between the terms and provisions of this Fifth Amendment and the terms
and provisions of the Agreement, the terms and provisions of this Fifth
Amendment shall govern.  In all other respects, the Agreement, as amended and
supplemented hereby, shall remain in full force and effect.

 

8.                                      COUNTERPARTS; EFFECTIVENESS.  This Fifth
Amendment may be executed in any number of counterparts and by different parties
on separate counterparts, each of which when so executed and delivered shall be
deemed to be an original.  All such counterparts, taken together, shall
constitute but one and the same Fifth Amendment.  This Fifth Amendment shall
become effective upon the execution of a counterpart of this Fifth Amendment by
each of the parties hereto.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment Number Five
to Loan and Security Agreement as of the date first set forth above.

 

 

WELLS FARGO FOOTHILL, INC.,

 

a California corporation, f/k/a Foothill Capital
Corporation

 

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By:

/s/ Charles Kim

 

 

Charles Kim, V.P.

 

 

 

 

 

EVANS & SUTHERLAND COMPUTER,
a Utah corporation

 

 

 

 

 

By:

/s/ E. Thomas Atchison

 

 

Title:

  CFO

 

 

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