EXHIBIT 10.36

 

FIRST AMENDMENT TO CREDIT AGREEMENT,

SECURITY AGREEMENT, AND WAIVER

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT, SECURITY AGREEMENT, AND WAIVER (this
“Amendment”), dated as of November 29, 2004, entered into by and among the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and permitted assigns, are referred to hereinafter
each individually as a “Lender” and collectively as the “Lenders”), WELLS FARGO
FOOTHILL, INC., a California corporation (“WFF”), as the arranger and
administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, “Agent”), and INFOCUS CORPORATION, an
Oregon corporation (“Borrower”).

 

RECITALS

 

A.                                   Borrower and WFF, in its capacity as Agent
and a Lender, previously entered into that certain Credit Agreement dated as of
October 25, 2004 (the “Credit Agreement”), pursuant to which the Lenders have
made certain loans and financial accommodations available to Borrower.  Terms
used herein without definition shall have the meanings ascribed to them in the
Credit Agreement.

 

B.                                     Borrower and Agent (for the Lender Group
and the Bank Product Provider) previously entered into that certain Security
Agreement dated as of October 25, 2004 (the “Security Agreement”), pursuant to
which Borrower granted to Agent, for the benefit of the Lender Group and the
Bank Product Provider, a first priority security interest in all of its
Collateral, subject to the terms thereof.

 

C.                                     Borrower previously entered into that
certain Credit Agreement, dated March 17, 2003 (as amended, supplemented,
modified or waived from time to time, collectively, the “WF Credit Agreement”),
with Wells Fargo Bank, National Association (“Wells Fargo”) pursuant to which
Wells Fargo has provided a letter of credit facility and made other financial
accommodations available to Borrower.

 

D.                                    Borrower intends to enter into (i) a
Security Agreement and an addendum thereto (the “WF Security Agreement”), with
Wells Fargo, pursuant to which Borrower will grant a security interest to Wells
Fargo pursuant to the terms thereof; (ii) a Securities Account Control
Agreement  (the “WF Control Agreement”), with Wells Fargo and Wells Capital
Management as the securities intermediary; and (iii) those other documents
related to the WF Credit Agreement, the WF Control Agreement and the WF Security
Agreement (collectively, the “WF Credit Documents”).

 

E.                                      The following Events of Default have
occurred under the Credit Agreement (collectively, the “Known Existing
Defaults”):

 

(a)                                  Borrower failed to timely deliver to Agent
the list of Intellectual Property Licenses (as such term is defined in the
Security Agreement) to be attached as Schedule 2 of the Security Agreement,
pursuant to Section 3.2(b)(ii) of the Credit Agreement; and

 

(b)                                 Borrower failed to timely deliver to Agent a
Collateral Access Agreement with respect to the location at UPS – SCS Logistics,
2200 Outer Loop Bldg., Louisville, Kentucky 40219-3565, in form and substance
satisfactory to Agent, pursuant to Section 3.2(b)(iii) of the Credit Agreement.

 

F.                                      Borrower has requested that Agent and
the Lender Group (i) waive the Known Existing Defaults, (ii) permit Borrower to
grant the WF Security Interest, and (iii) amend the Credit Agreement on the
terms and conditions set forth herein.

 

G.                                     Borrower is entering into this Amendment
with the understanding and agreement that, except as specifically provided
herein, none of Agent’s and Lender Group’s rights or remedies as set forth in
the Credit Agreement is being waived or modified by the terms of this Amendment.

 

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AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.                                       Amendments to Credit Agreement.

 

(a)                                  The following definitions shall be added to
Schedule 1.1 of the Credit Agreement:

 

 “‘WF Control Agreement’ means that certain Securities Account Control Agreement
entered into by and among the Borrower, Wells Fargo and Wells Capital
Management, as the securities intermediary, with respect to Borrower’s
Securities Account number 15256000 at Wells Capital Management.

 

‘WF Credit Agreement’ means that certain Credit Agreement, dated as of March 17,
2003, entered into by and between Borrower and Wells Fargo, as amended,
supplemented, waived or modified from time to time, in form and substance
satisfactory to Agent.

 

 ‘WF Credit Documents’ means, collectively, the WF Credit Agreement, the WF
Security Agreement, the WF Control Agreement, and any other document related
thereto, each in form and substance satisfactory to Agent.

 

 ‘WF Security Agreement’ means that certain security agreement and an addendum
thereto entered into by and between Borrower and Wells Fargo, as amended,
supplemented, waived or modified from time to time, in form and substance
satisfactory to Agent.

 

‘WF Security Interest’ means the security interest granted by the Borrower to
Wells Fargo pursuant to the terms of the WF Credit Documents.”

 

(b)                                 The following shall be added to the
definition of “Permitted Liens” as set forth in Schedule 1.1 of the Credit
Agreement:

 

“(m)                         the Lien in favor of Wells Fargo consisting of the
WF Security Interest.

 

2.                                       Amendments to Security Agreement.

 

(a)                                  Sections 5(d) and 5(e) of the Security
Agreement shall be amended and restated in their entirety to read as follows:

 

“(d) This Agreement creates a valid security interest in the Collateral of each
of Grantors, to the extent a security interest therein can be created under the
Code, securing the payment of the Secured Obligations.  All filings and other
actions necessary or desirable to perfect and protect the Security Interest in
the Perfected Collateral have been duly taken or will have been taken upon the
filing of financing statements listing each applicable Grantor, as a debtor, and
Agent, as secured party, in the jurisdictions listed next to such Grantor’s name
on Schedule 8 attached hereto.  Upon the making of such filings, and subject to
Permitted Liens, Agent shall have a first priority perfected security interest
in the Perfected Collateral of each Grantor and shall have a first priority
perfected security interest in the other Collateral to the extent such security
interest can be perfected by the filing of a financing statement.”

 

“(e) (i) Except for the Security Interest created hereby, each Grantor is and
will at all times be the sole holder of record and the legal and beneficial
owner, free and clear of all Liens other than

 

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Permitted Liens, of the Pledged Interests indicated on Schedule 4 as being owned
by such Grantor and, when acquired by such Grantor, any Pledged Interests
acquired after the Closing Date; (ii) all of the Pledged Interests are duly
authorized, validly issued, fully paid and nonassessable and the Pledged
Interests constitute or will constitute the percentage of the issued and
outstanding Equity Interests of the Pledged Companies of such Grantor identified
on Schedule 4 hereto as supplemented or modified by any Pledged Interests
Addendum or any Supplement to this Agreement; (iii) such Grantor has the right
and requisite authority to pledge, the Investment Related Property pledged by
such Grantor to Agent as provided herein; (iv) all actions necessary or
desirable to perfect, establish the first priority of (subject to Permitted
Liens), or otherwise protect, Agent’s Liens in the Investment Related Property,
and the proceeds thereof, have been duly taken, (A) upon the execution and
delivery of this Agreement; (B) upon the taking of possession by Agent of any
certificates constituting the Pledged Interests, to the extent such Pledged
Interests are represented by certificates, together with undated powers endorsed
in blank by the applicable Grantor; (C) upon the filing of financing statements
in the applicable jurisdiction set forth on Schedule 8 attached hereto for such
Grantor with respect to the Pledged Interests of such Grantor that are not
represented by certificates, and (D) with respect to any Securities Accounts,
upon the delivery of Control Agreements with respect thereto; and (v) each
Grantor has delivered to and deposited with Agent (or, with respect to any
Pledged Interests created after the Closing Date, will deliver and deposit in
accordance with Sections 6(a) and 8 hereof) all certificates representing the
Pledged Interests owned by such Grantor to the extent such Pledged Interests are
represented by certificates, and undated powers endorsed in blank with respect
to such certificates.”

 

(b)                                 Section 8(b) of the Security Agreement shall
be amended and restated in its entirety to read as follows:

 

“(b) With respect to any other Collateral, in the event (1) the parties hereto
agree that the steps necessary to perfect and protect Agent’s security interest
in such Collateral are reasonable or (2) a Triggering Event shall have occurred,
each Grantor agrees that, subject to Section 5.15 of the Credit Agreement, from
time to time, at its own expense, such Grantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or that Agent may request, in order to perfect and protect any
Security Interest granted or purported to be granted hereby or to enable Agent
to exercise and enforce its rights and remedies hereunder with respect to any of
the Collateral.”

 

(c)                                  Section 8(c)(2) of the Security Agreement
shall be amended and restated in its entirety to read as follows:

 

“(c)(2) Each Grantor authorizes Agent to file, transmit, or communicate, as
applicable, financing statements and amendments describing the Collateral as
“all personal property of debtor, except Excluded Collateral” or “all assets of
debtor, except Excluded Collateral” or words of similar effect, in order to
perfect Agent’s security interest in the Collateral (to the extent that Agent’s
security interest in such Collateral can be perfected by filing) without such
Grantor’s signature.  Each Grantor also hereby ratifies its authorization for
Agent to have filed in any jurisdiction any financing statements filed prior to
the date hereof.”

 

3.                                       Waiver of Known Existing Defaults.  The
Lender Group hereby waives enforcement of its rights against Borrower arising
from the Known Existing Defaults; provided, however, nothing herein shall be
deemed a waiver with respect to any other failure of Borrower to comply fully
with Section 3.2(b) of the Credit Agreement (as amended or modified by this
Amendment).  This waiver shall be effective only for the specific defaults
comprising the Know Existing Defaults, and in no event shall this waiver be
deemed to be a waiver of enforcement of Lender Group’s  rights with respect to
any other Defaults or Events of Default now existing or hereafter arising. 
Nothing contained in this Amendment nor any communications between Borrower and
Lender Group or Agent shall be a waiver of any rights or remedies Lender Group
has or may have against Borrower, except as specifically provided

 

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herein.  Except as specifically provided herein, Agent and Lender Group hereby
reserve and preserve all of their rights and remedies against Borrower under the
Credit Agreement and the other Loan Documents.

 

4.                                       Release; Covenant Not to Sue.

 

(a)                                  Borrower hereby absolutely and
unconditionally releases and forever discharges the Agent and the Lender Group,
and any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof,
together with all of the present and former directors, officers, agents and
employees of any of the foregoing (each a “Released Party”), from any and all
claims, demands or causes of action of any kind, nature or description, whether
arising in law or equity or upon contract or tort or under any state or federal
law or otherwise, which Borrower has had, now has or has made claim to have
against any such person for or by reason of any act, omission, matter, cause or
thing whatsoever arising from the beginning of time to and including the date of
this Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.  It is the intention of Borrower in providing
this release that the same shall be effective as a bar to each and every claim,
demand and cause of action specified, and in furtherance of this intention it
waives and relinquishes all rights and benefits under Section 1542 of the Civil
Code of the State of California, which provides:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him might have materially affected his settlement with the debtor.”

 

Borrower acknowledges that it may hereafter discover facts different from or in
addition to those now known or believed to be true with respect to such claims,
demands, or causes of action and agree that this instrument shall be and remain
effective in all respects notwithstanding any such differences or additional
facts.  Borrower understands, acknowledges and agrees that the release set forth
above may be pleaded as a full and complete defense and may be used as a basis
for an injunction against any action, suit or other proceeding which may be
instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)                                 Borrower, on behalf of itself and its
successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably, covenants and agrees with and in favor of each
Released Party above that it will not sue (at law, in equity, in any regulatory
proceeding or otherwise) any Released Party on the basis of any claim released,
remised and discharged by Borrower pursuant to the above release.  If Borrower
or any of its successors, assigns or other legal representations violates the
foregoing covenant, Borrower, for itself and its successors, assigns and legal
representatives, agrees to pay, in addition to such other damages as any
Released Party may sustain as a result of such violation, all attorneys’ fees
and costs incurred by such Released Party as a result of such violation.

 

5.                                       Effectiveness of this Amendment.  Agent
must have received the following items, in form and content acceptable to Agent,
before this Amendment, and the waivers provided for herein, are effective.

 

(a)                                  Amendment; Acknowledgements and Releases. 
This Amendment fully executed in a sufficient number of counterparts for
distribution to all parties.

 

(b)                                 Other Required Documentation.  Within 10
Business Days of the date hereof, copy of the fully executed WF Credit
Documents, each in form and substance satisfactory to Agent, and all other
documents and legal matters in connection with the transactions contemplated by
this Amendment shall have been delivered or executed or recorded and shall be in
form and substance satisfactory.

 

6.                                       Representations and Warranties. 
Borrower represents and warrants as follows:

 

(a)                                  Authority.  Borrower has the requisite
corporate power and authority to execute and deliver this Amendment, and to
perform its obligations hereunder and under the Loan Documents (as amended or
modified hereby) to which it is a party.  The execution, delivery and
performance by Borrower of this Amendment

 

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have been duly approved by all necessary corporate action and no other corporate
proceedings are necessary to consummate such transactions.

 

(b)                                 Enforceability.  This Amendment has been
duly executed and delivered by Borrower.  This Amendment and each Financing
Agreement (as amended or modified hereby) is the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, and is in full force and effect.

 

(c)                                  Representations and Warranties.  The
representations and warranties contained in each Loan Document (other than any
such representations or warranties that, by their terms, are specifically made
as of a date other than the date hereof) are correct on and as of the date
hereof as though made on and as of the date hereof.

 

(d)                                 Due Execution.  The execution, delivery and
performance of this Amendment are within the power of Borrower, have been duly
authorized by all necessary corporate action, have received all necessary
governmental approval, if any, and do not contravene any law or any contractual
restrictions binding on Borrower.

 

(e)                                  No Default.  After giving effect to the
waivers contained in this Amendment, no event has occurred and is continuing
that constitutes an Event of Default.

 

7.                                       Choice of Law.  The validity of this
Amendment, its construction, interpretation and enforcement, the rights of the
parties hereunder, shall be determined under, governed by, and construed in
accordance with the internal laws of the State of New York governing contracts
only to be performed in that State.

 

8.                                       Counterparts.  This Amendment may be
executed in any number of counterparts and by different parties and separate
counterparts, each of which when so executed and delivered, shall be deemed an
original, and all of which, when taken together, shall constitute one and the
same instrument.  Delivery of an executed counterpart of a signature page to
this Amendment by telefacsimile shall be effective as delivery of a manually
executed counterpart of this Amendment.

 

9.                                       Reference to and Effect on the Loan
Documents.

 

(a)                                  Upon and after the effectiveness of this
Amendment, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof” or words of like import referring to the Credit Agreement,
and each reference in the other Loan Documents to “the Credit Agreement”,
“thereof” or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as modified and amended hereby.

 

(b)                                 Except as specifically amended above, the
Credit Agreement and all other Loan Documents, are and shall continue to be in
full force and effect and are hereby in all respects ratified and confirmed and
shall constitute the legal, valid, binding and enforceable obligations of
Borrower to the Lender Group.

 

(c)                                  The execution, delivery and effectiveness
of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of the Agent  and Lender Group under any of
the Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

 

(d)                                 To the extent that any terms and conditions
in any of the Loan Documents shall contradict or be in conflict with any terms
or conditions of the Credit Agreement, after giving effect to this Amendment,
such terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Credit Agreement as modified or amended
hereby.

 

10.                                 Ratification.  Borrower hereby restates,
ratifies and reaffirms each and every term and condition set forth in the Credit
Agreement, as amended hereby, and the Loan Documents effective as of the date
hereof.

 

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11.                                 Estoppel.  To induce Agent and Lender Group
to enter into this Amendment and to continue to make advances to Borrower under
the Credit Agreement, Borrower hereby acknowledges and agrees that, as of the
date hereof, there exists no right of offset, defense, counterclaim or objection
in favor of Borrower as against any Lender with respect to the Obligations.

 

12.                                 Integration.  This Amendment, together with
the other Loan Documents, incorporates all negotiations of the parties hereto
with respect to the subject matter hereof and is the final expression and
agreement of the parties hereto with respect to the subject matter hereof.

 

13.                                 Severability.  In case any provision in this
Amendment shall be invalid, illegal or unenforceable, such provision shall be
severable from the remainder of this Amendment and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

 

14.                                 Submission of Amendment.  The submission of
this Amendment to the parties or their agents or attorneys for review or
signature does not constitute a commitment by Agent or Lender Group to waive any
of their rights and remedies under the Loan Documents, and this Amendment shall
have no binding force or effect until all of the conditions to the effectiveness
of this Amendment have been satisfied as set forth herein.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date
first above written.

 

 

INFOCUS CORPORATION,

 

an Oregon corporation

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

WELLS FARGO FOOTHILL, INC.,

 

a California corporation, as Agent and a Lender

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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