Exhibit 10.37


 


SECOND AMENDMENT TO CREDIT AGREEMENT


 


THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”),
dated as of December 13,
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 (as amended by that First Amendment to Credit Agreement, Security
Agreement and Waiver, dated as of December 3, 2004, entered into by and
among the Borrower and WFF, in its capacity as Agent and a Lender,
collectively, 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
intends to enter into that certain Shareholders Agreement (the “Shareholders
Agreement”) by and among Borrower, a subsidiary of Borrower to be formed
under the laws of the Cayman Islands (“InFocus Cayman”), TCL
Corporation, a company organized under the laws of the People’s Republic of
China (“TCL”), TCL Optoelectronic Tech (Shenzhen) Co., Ltd., a limited
liability company organized under the laws of the People’s Republic of China (“TCL
Optoelectronic”), pursuant to which, among other things, InFocus Cayman and
TCL Optoelectronic shall establish South Mountain Technologies, Ltd., a limited
liability company organized under the laws of the Cayman Islands (the “JV
Company”) as a joint venture owned 50% by InFocus Cayman and 50% by TCL
Optoelectronic (the “JV Investment”).


 


C.                                     Pursuant
to the Shareholders Agreement, Borrower intends to enter into a Technology
License Agreement (the “License Agreement” and together with the
Shareholders Agreement and any other document related thereto, collectively,
the “JV Investment Documents”) with JV Company, pursuant to which, among
other things, Borrower shall license certain intellectual property to the JV
Company.


 


D.                                    Borrower has requested that Agent and the
Lender Group (i) waive the requirement that Borrower shall have Excess
Availability plus Qualified Cash of $25,000,000 (y) for the 30 consecutive day
period immediately prior to giving effect to an Investment permitted under
clause (g) of the defined term “Permitted Investments” and (z) immediately
after giving effect to such Investment (the “Liquidity Test”), (ii)
permit Borrower to enter into the License Agreement and (iii) amend the Credit
Agreement on the terms and conditions set forth herein.


 


E.                                      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.


 


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 shall be added to the definition of “Permitted Dispositions” as set
forth in Schedule 1.1 of the Credit Agreement:


 





















 


“(f)                              the
licensing of patents, trademarks, copyrights and other intellectual property
rights as evidenced in that certain Technology License Agreement, in the form provided
to and approved by Agent, without any amendments, supplements, waivers or
modifications, entered into by and between the Borrower and South Mountain
Technologies, Ltd., a limited liability company organized under the laws of the
Cayman Islands.”


 


(b)                                 Schedule 5.2
to the Credit Agreement is hereby amended by adding the following item thereto:


 


	
  as soon as
  available, but in any event within 30 days after the end of each fiscal
  quarter during each of Borrower’s fiscal years

  	
  (o)  an Inventory channel report of the Borrower
  reflecting the Inventory sold to customers.

  



 


(c)                                  Schedule 5.3
of the Credit Agreement, the form of which is attached to this Amendment as Schedule 5.3,
is replaced by Schedule 5.3 hereto.


 


2.                                       Additional
Agreements.  Notwithstanding the
terms of clause (g) of the defined term “Permitted Investments” set forth in
the Credit Agreement, Borrower shall be permitted to (a) make up to $1,500,000
of the JV Investment so long as such Investment is made prior to January 31,
2005 and (b) subject to the limits set forth in such clause (g) of the
definition of “Permitted Investments”, shall be permitted to make an additional
Investment in respect of the JV Investment upon Agent’s receipt of (i) a copy
of the final JV Investment Documents, each in form and substance satisfactory
to Agent and (ii) to the extent there are any updates thereto, updated copies
of the Projections and projections for the JV Company as presented to the Board
of Directors of the JV Company, each in form and substance (including as to
scope and underlying assumption) satisfactory to Agent.  Nothing contained herein shall be deemed to
increase the amount of Investments permitted to be made by the Borrower
pursuant to the aforementioned clause (g) of the defined term “Permitted
Investments.”


 


3.                                       Waiver of the Liquidity Test.  The Lender
Group hereby waives enforcement of the Liquidity Test only for the period
commencing as of the date hereof and ending on January 14, 2005; provided,
however, nothing herein shall be deemed a waiver with respect to any other
failure of Borrower to comply fully with the provisions set forth in the
defined term of “Permitted Investments”, Section 6.12 of the Credit
Agreement (as amended or modified by this Amendment) and any other provision of
the Loan Documents (as amended or modified by this Amendment).  This waiver shall be effective only with
respect to the specific JV Investment, and in no event shall this waiver be
deemed to be a waiver of enforcement of the Lender Group’s  rights with respect to any other provision set
forth in the Loan Documents (as amended or modified by this Amendment).  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 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.                                       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)                                 All
Documents and Legal Matters.  All
other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered or executed or
recorded.


 


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5.                                       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 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.


 


6.                                       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.


 


7.                                       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.


 


8.                                       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.


 


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9.                                       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.


 


10.                                 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.


 


11.                                 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.


 


12.                                 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.


 


13.                                 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:

  	
  /s/Michael
  Yonker

  	
   

  
	
   

  	
  Name: Michael
  Yonker

  
	
   

  	
  Title: Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO
  FOOTHILL, INC.,

  
	
   

  	
  a California
  corporation, as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd
  Nakamoto

  	
   

  
	
   

  	
  Name: Todd
  Nakamoto

  
	
   

  	
  Title: Vice
  President

  



 


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SCHEDULE 5.3


 


Deliver to Agent, with
copies to each Lender, each of the financial statements, reports, or other
items set forth set forth below at the following times in form satisfactory to
Agent:


 


	
  as soon as available,
  but in any event within 30 days after the end of each month during each of
  Borrower’s fiscal years

  	
   

  	
  (a)  an unaudited consolidated balance sheet,
  income statement, and statement of cash flow covering Borrower’s and its
  Subsidiaries’ operations during such period,

  

  (b)  a Compliance Certificate, and

  

  (c)  a company prepared consolidated
  and consolidating balance sheet, income statement, and statement of cash flow
  covering South Mountain Technologies, Ltd., a limited liability company
  organized under the laws of the Cayman Islands, and its Subsidiaries.

  
	
   

  	
   

  	
   

  
	
  as soon as
  available, but in any event within 45 days after the end of each fiscal
  quarter during each of Borrower’s fiscal years

  	
   

  	
  (d)  an
  unaudited consolidated and consolidating balance sheet, income statement, and
  statement of cash flow covering Borrower’s and its Subsidiaries’ operations
  during such period, and

  

  (e)  a Compliance Certificate.

  
	
   

  	
   

  	
   

  
	
  as soon as
  available, but in any event within 90 days after the end of each of
  Borrower’s fiscal years

  	
   

  	
  (f) consolidated and consolidating financial
  statements of Borrower and its Subsidiaries for each such fiscal year,
  audited by independent certified public accountants reasonably acceptable to
  Agent and certified, without any qualifications (including any (A) “going
  concern” or like qualification or exception, (B) qualification or exception
  as to the scope of such audit, or (C) qualification which relates to the
  treatment or classification of any item and which, as a condition to the
  removal of such qualification, would require an adjustment to such item, the
  effect of which would be to cause any noncompliance with the provisions of Section 6.16),
  by such accountants to have been prepared in accordance with GAAP (such
  audited financial statements to include a balance sheet, income statement,
  and statement of cash flow and, if prepared, such accountants’ letter to
  management),

  

  (g)  consolidated and consolidating
  financial statements of South Mountain Technologies, Ltd., a limited
  liability company organized under the laws of the Cayman Islands, and its
  Subsidiaries (if any), for each of its fiscal years beginning with its fiscal
  year ending 2005, audited by independent certified public accountants
  reasonably acceptable to Agent and certified, without any qualifications
  (including any qualification or exception as to the scope of such audit), by
  such accountants to have been prepared in accordance with GAAP (such audited
  financial statements to include a balance sheet, income statement, and
  statement of cash flow and, if prepared, such accountants’ letter to
  management), and

  

  (h)  a Compliance Certificate.

  
	
   

  	
   

  	
   

  
	
  as soon as
  available, but in any event within 15 days prior to the start of each of
  Borrower’s fiscal years,

  	
   

  	
  (i)  copies of
  Borrower’s Projections, in form and substance (including as to scope and
  underlying assumptions) satisfactory to Agent, in its Permitted Discretion,
  for the forthcoming 2 years, year by year, and for the forthcoming fiscal
  year, on a quarterly basis, certified by the chief financial officer of
  Borrower as being such officer’s good faith estimate of the financial
  performance of Borrower during the period covered thereby.

  
	
   

  	
   

  	
   

  
	
  as soon as
  available, but

  	
   

  	
  (j)  copies of
  the projections for South Mountain Technologies, Ltd., a limited liability

  



 


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  in any event
  within 30 days after the end of each fiscal quarter,

  	
   

  	
  company organized under the laws of the Cayman
  Islands, and its Subsidiaries in form and substance (including as to scope
  and underlying assumptions) satisfactory to Agent, in its Permitted
  Discretion, for the forthcoming four quarters, on a quarterly basis.

  
	
   

  	
   

  	
   

  
	
  if and when
  filed by Borrower,

  	
   

  	
  (k)  Form 10-Q
  quarterly reports, Form 10-K annual reports, and Form 8-K current reports,

  

  (l)  any other filings made by Borrower
  with the SEC, and

  

  (m)  any other information that is
  provided by Borrower to its shareholders generally.

  
	
   

  	
   

  	
   

  
	
  promptly, but in
  any event within 5 days after Borrower has knowledge of any event or
  condition that constitutes a Default or an Event of Default,

  	
   

  	
  (n)  notice of
  such event or condition and a statement of the curative action that Borrower
  proposes to take with respect thereto.

  
	
   

  	
   

  	
   

  
	
  promptly after
  the commencement thereof, but in any event within 5 days after the service of
  process with respect thereto on Borrower or any of its Subsidiaries,

  	
   

  	
  (o)  notice of
  all actions, suits, or proceedings brought by or against Borrower or any of
  its Subsidiaries before any Governmental Authority which reasonably could be
  expected to result in a Material Adverse Change.

  
	
   

  	
   

  	
   

  
	
  upon the request
  of Agent,

  	
   

  	
  (p)  any other
  information reasonably requested relating to the financial condition of
  Borrower or its Subsidiaries.

  



 


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