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THIRD AMENDMENT
TO LOAN AND SECURITY AGREEMENT

 
 
 
Date: March 31, 2008
 

This Third Amendment to Loan and Security Agreement (this "Amendment") is made
as of the above date by and between Sonic Solutions ("Borrower") and Union Bank
of California, N.A. ("Bank"), with reference to the following facts:

A. Borrower and Bank are parties to that certain Loan and Security Agreement
dated as of December 13, 2004, as amended from time to time, including by the
First Amendment to Loan and Security Agreement dated as of December 20, 2005 and
the Second Amendment to Loan and Security Agreement dated as of September 28,
2007 (the "Agreement"). Pursuant to the Agreement, Bank has made loans and has
extended other credit accommodations to Borrower for the purposes permitted
under the Agreement.

B. Borrower is currently in default of the Agreement for failing to comply with
the Quick Ratio covenant set forth in Section 6.7(a) of the Agreement for the
period ending December 31, 2007 and for failing to comply with the minimum
EBITDA covenant set forth in Section 6.7(c) of the Agreement for the quarter
ending December 31, 2007 (the "Existing Defaults").

C. Borrower has requested that Bank amend the Agreement to (i) waive the
Existing Defaults, and (ii) extend the maturity date for the Revolving Line.

D. Although Bank is under no obligation to do so, Bank is willing to waive the
Existing Defaults on the terms and conditions set forth in this Amendment, so
long as Borrower complies with the terms, covenants and conditions set forth in
this Amendment in a timely manner.

F. Bank has agreed to so amend certain provisions of the Agreement, but only to
the extent, in accordance with the terms, subject to the conditions and in
reliance upon the representations and warranties set forth below and in the
Agreement.

Therefore, the parties hereto agree as follows:
 
1. Amendments to the Agreement.

1.1 Section 1.1 of the Agreement is hereby amended by adding or revising the
following defined terms in their entirety to read as follows:

"Revolving Maturity Date" means June 30, 2008.

1.2 The Agreement is hereby amended by inserting a new Section 5.18 to read as
follows:

5.18 Patriot Act. Borrower and each of its Subsidiaries are in compliance, in
all material respects, with (i) the Trading with the Enemy Act, as amended, 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, and (ii) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001) and the USA PATRIOT Improvement and
Reauthorization Act of 2005 (Pub. L. 109-177) (the "Patriot Act")). No part of
the proceeds of the Advances or other credit extensions will be used, directly
or
 
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indirectly, for any payments to any governmental 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, as amended.

2. Limited Waivers of Existing Defaults. Subject to terms and conditions set
forth herein, the Bank hereby waive its default rights with respect to the
Existing Defaults, provided, however, that this waiver applies only to the
specific instances described above and for the time periods stated, and is not a
waiver of any subsequent breach of any provision of the Agreement, nor is it a
waiver of any breach of any other provision of the Agreement. Borrower
acknowledges and agrees that the Bank is not obligated to grant this or any
other waiver. .Further, the Bank reserves all of the rights, powers and remedies
available to it under the Agreement and any other contracts or instruments
executed by Borrower, including the right to cease making advances to Borrower
and to accelerate any or all of Borrower's indebtedness to the Bank if any
subsequent breach of the same provisions or any other provision of the Agreement
should occur.

3. Additional Provisions.

3.1 Patriot Act Notice. Bank is subject to the USA Patriot Act and hereby
notifies Borrower that pursuant to the requirements of that Act, Bank is
required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other
information that will allow Bank to identify Borrower in accordance with that
Act.

3.2 Affirmation of Indebtedness. Borrower affirms and admits the indebtedness
evidenced by the Agreement and the other Loan Documents. Borrower acknowledges
that it has no claims, offsets or defenses with respect to the payments of sums
due under the Agreement or the other Loan Documents. Borrower ratifies and
confirms each and all of the terms, conditions and covenants of the Agreement
and other Loan Documents as amended or modified by this Amendment and those
provisions not so amended or modified and, except as specifically amended or
modified hereby, the Loan Documents remain in full force and effect. The
execution, delivery, and performance of this Amendment shall not operate as a
waiver of, or as an amendment of, any right, power, or remedy of Bank under the
Agreement or any other Loan Document, as in effect prior to the date hereof.
Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement.

3.3 Representations and Warranties. Borrower represents and warrants that the
representations and warranties contained in the Agreement are true and correct
in all material respects as of the date of this Amendment, and, with the
exception of the Existing Defaults, that no Event of Default has occurred and is
continuing.

3.4 Effectiveness of Agreement; Post-Closing Covenant. This Amendment shall
become effective when the Bank has received this Amendment, duly executed by
Borrower, and all other required documents, fully executed, all required title
insurance endorsements, and sufficient funds to pay all fees and costs
associated with this Amendment.

3.5 Counterparts. This Amendment may be executed in counterparts, each of which
shall be deemed an original but all of which together, shall constitute one and
the same agreement.

3.6 Successors. This Amendment shall inure to the successors and assigns of Bank
and the permitted successors and assigns of Borrower.
 
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first written above.
 
BORROWER:
SONIC SOLUTIONS, a California corporation
 
By: /s/ Paul Norris                                                   
Name: Paul Norris                                                    
Title: EVP, Interim CFO & General Counsel       
 
By: /s/ A. Clay Leighton                                        
Name: A. Clay Leighton                                         
Title: COO                                                                 
 
BANK:
UNION BANK OF CALIFORNIA, N.A.
 
By: /s/ Allan B. Miner                                            
Name: Allan B. Miner                                             
Title: Vice President                                               

 
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AFFIRMATION OF GUARANTY
 
This AFFIRMATION OF GUARANTY is made as of March 31, 2008, by the undersigned
("Guarantor") for the benefit of Union Bank of California. N.A. (`Bank").

RECITALS

Bank and Sonic Solutions ("Borrower") are parties to that certain Loan and
Security Agreement dated as of December 13, 2004, as amended from time to time
(collectively, the "Loan Agreement"). Guarantor executed for the benefit of Bank
an Unconditional Guaranty dated as of even date with the Loan Agreement (the
"Guaranty"), guarantying all amounts owing by Borrower to Bank. Borrower and
Bank propose to enter into a Third Amendment to Loan and Security Agreement of
even date herewith (the "Amendment"), which amends the Loan Agreement by, among
other things, extending the term of the loan facilities provided by Bank and
waiving certain specific financial covenant violations. Bank has agreed to enter
into the Amendment provided, among other things, that Guarantor consents to the
entry by Borrower into the Amendment and related documents and agrees that the
Guaranty will remain effective.

AGREEMENT

NOW, THEREFORE, Guarantor agrees as follows:

1. Guarantor consents to the execution, delivery and performance by Borrower of
the Amendment and the documents and instruments executed in connection
therewith, as well as all other amendments, modifications and restatements to
the Loan Agreement.

2. The Guaranty is and shall remain in full force and effect with respect to all
of Borrower's Obligations (as defined in the Loan Agreement) as modified by the
Amendment and otherwise. Guarantor confirms that Guarantor has no defenses
against its obligations under the Guaranty.

3. Guarantor represents and warrants that the Representations and Warranties
contained in the Guaranty are true and correct as of the date of this
Affirmation. Unless otherwise defined, all capitalized terms in this Affirmation
shall be as defined in the Guaranty.

IN WITNESS WHEREOF, the undersigned Guarantor has executed this Affirmation of
Guaranty as of the first date above written.

INTERACTUAL TECHNOLOGIES, INC.,
a California corporation
 
/s/ A. Clay Leighton                                            
By: A. Clay Leighton
Its: CFO
 
 
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