Document:

Exhibit 10.42.1

 

	
   

  	
  BORROWER

  	
   

  
	
   

  	
  DTS. Inc.

  	
   

  
	
   

  	
   

  	
  LOAN

  
	
   

  	
   

  	
  REVISION/EXTENSION

  
	
  Comerica Bank

  	
   

  	
  AGREEMENT

  
	
   

  	
  3171 Clareton Drive

  	
   

  
	
   

  	
  Agoura Hills, California 91301

  	
   

  
	
  (Herein called “Bank”)

  	
   

  	
   

  
	
   

  	
  (Herein called “Borrower”)

  	
   

  

 

 

	
  ORIGINAL NOTE

  INFORMATION

  	
   

  	
  INTEREST RATE

  	
   

  	
  AMOUNT

  	
   

  	
  NOTE DATE

  	
   

  	
  MATURITY DATE

  	
   

  	
  OBLIGOR
  #

  	
   

  	
  NOTE*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8-0.500

  	
  %

  	
  $

  	
  10,000,000.00

  	
   

  	
  05/31/04

  	
   

  	
  06/30/05

  	
   

  	
  2259153021

  	
   

  	
  18/26

  	
   

  

 

This Agreement is effective as of: June 30, 2005

 

ORIGINAL OBLIGATION:

This Loan
Revision Agreement refers to the loan evidenced by the above Note dated May 31,
2004 in favor of Bank executed by DTS, Inc. in the amounts of $ 10,000,000.00
payable in full on June 30, 2005. o
Said Note is secured by Deed of Trust dated N/A (hereinafter referred to as the
“Encumbrance”), recorded on N/A as Instrument No. N/A in the Office of County
Recorder of N/A County California.

 

CURRENT OBLIGATION:

This unpaid
principal balance of said Note as of July 07, 2005 is $ 0.00 on which interest
is paid to May 31, 2004, with a maturity of June 30, 2005. o
As modified by previous N/A dated N/A.

 

REVISION

The
undersigned Borrower hereby requests Bank to revise the terms of said Note, and
said Bank to accept payment thereof at the time, or times, in the following
manner:

 

The maturity date is hereby amended
from June 30, 2005 to June 30, 2006.

The interest rate of the Note
forming unchanged at Bank’s Base rate from time to time in effect minus one
half of one percent (0.500%) per annum.

*or LIBOR + 2.00%

 

 

In
consideration of Bank’s acceptance of the revision of said Note, including the
time for payment thereof, all as set forth above, the Borrower does hereby
acknowledge and admit to such indebtedness, and further does unconditionally
agree to pay such indebtedness together with interest thereon within the time
and by the manner as revised in accordance with the foregoing, together with
any and all attorney’s fees, cost of collection, and any other sums secured by
the Encumbrance.

 

Any and all security
for said Note including but not limited to the Encumbrance, if any, may be
enforced by Bank concurrently or independently of each other and in such order
as Bank may determine; and with reference to any such security in addition to
the Encumbrance Bank may, without consent of or notice to Borrower, exchange,
substitute or release such security without affecting the liability of the
Borrower, and Bank may release any one of more parties hereto or to the above
obligation or permit the liability of said party or parties to terminate
without affecting the liability of any other party or parties liable thereon.

 

This Agreement
is a revision only, and not a novation; and except as herein provided, all of
the terms and conditions of said Note, said Encumbrance and all related
documents shall remain unchanged and in full force and affect.

 

When one or
more Borrowers signs this Agreement, all agree:

 

a. That where
in this Agreement the word “Borrower” appear, if shall read “each Borrower”;

b. That breach
of any covenant by any Borrower may at the Bank’s option be treated as breach
by all Borrowers;

c. That the
liability and obligations of each Borrower are joint and several.

 

	
   

  	
  DTS, Inc.

  
	
  Dated this 7th
  day of July, 2005.

  	
   

  
	
   

  	
  /s/ Jon E. Kirchner

  	
   

  
	
   

  	
  President
  & CEO

  	
   

  
	
  The
  foregoing agreement is accepted this

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7th day of
  July, 2005.

  	
   

  	
   

  
	
   

  	
  /s/ Melvin
  L. Flanigan

  	
   

  
	
   

  	
  CFO

  	
   

  
	
  By:

  	
  /s/ Jonathan
  Heine

  	
   

  	
   

  	
   

  
	
   

  	
  Jonathan Heine

  	
   

  	
   

  
	
   

  	
  Assistant Vice President-Entertainment Comerica Bank

  	
   

  
					

 

 

	
  Each of the undersigned agree and consent to the foregoing revisions
  to this Agreement and the Encumbrance, if any.

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

MODIFICATION TO LOAN DOCUMENTS

 

This
Modification to Loan Documents (this “Modification”) is entered into by and
between DTS, INC., a Delaware corporation FORMERLY KNOWN AS Digital Theater
Systems, Inc., a Delaware corporation (“Borrower”) and COMERICA BANK (“Bank”)
as of this 7th day of July, 2005, at Bank’s
headquarters office at 333 West Santa Clara Street, San Jose, California 95113.

 

RECITALS

 

This
Modification is entered into upon the basis of the following facts and
understandings of the parties, which facts and understandings are acknowledged
by the parties to be true and accurate:

 

Bank and
Borrower previously entered into a Master Revolving Note Variable Rate-Maturity
Date dated May 31, 2004. The Master Revolving Note Variable Rate-Maturity Date
and each modification shall collectively be referred to herein as the “Note.”

 

The Note(s)
referred to herein, together with all other documents, instruments and
agreements executed in connection with the Note(s), are hereinafter referred to
collectively as the “Loan Documents.”

 

On May 23,
2005, Borrower filed an amendment to its Articles of Incorporation which
provides for a change in the name of Borrower from Digital Theater Systems,
Inc. to DTS, Inc., (the “Amendment”). The Amendment was filed in the Office of
the Delaware Secretary of State on May 23, 2005.

 

Notwithstanding
any provisions of the Loan Documents to the contrary, Borrower has requested
that Bank consent to the Amendment and refrain from exercising its rights and
remedies under the Loan Documents. Banks hereby consents to the Amendment,
subject to the terms and conditions set forth below.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.

 

AGREEMENT

 

1.             Incorporation by Reference.
The Recitals and the documents referred to therein are incorporated herein by
this reference. Except as otherwise noted, the terms not defined herein shall
have the meaning set forth in the Loan Documents.

 

2.             Modifications to the Loan
Documents. Subject to the satisfaction of the conditions precedent as set
forth in

Section 3 hereof, the Loan Documents are hereby modified as set forth below.

 

Wherever the name of Borrower is used in the Loan Documents, it shall
hereafter mean DTS, Inc.

 

3.             Legal Effect. The
effectiveness of this Modification is conditioned upon receipt by Bank of this
Modification, and any other documents which Bank may require to carry out the
terms hereof. Bank’s agreement to consent to the Amendment shall only be with
respect to Borrower’s name change as evidenced in the Amendment and, except as
specifically set forth in this Modification, all of the terms and conditions of
the Loan Documents remain in full force and effect.

 

4.             Integration. This is an integrated
Modification and supersedes all prior negotiations and agreements regarding the
subject matter hereof. All amendments hereto must be in writing and signed by
the parties.

 

IN WITNESS WHEREOF,
the parties have agreed of the date first set forth above.

 

	
  BORROWER:

  	
  BANK:

  
	
   

  	
   

  
	
  DTS, Inc.

  	
   

  	
  COMERICA BANK

  
	
  FORMERLY KNOWN AS

  	
   

  	
   

  
	
   DIGITAL THEATER SYSTEMS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Melvin L. Flanigan

  	
   

  	
  By:

  	
  /s/ Jonathan Heine

  	
   

  
	
   

  	
   

  	
   

  	
  Jonathan Heine

  	
   

  
	
  Title:

  	
  CFO

  	
   

  	
  Title: 

  	
  Assistant Vice President-Entertainment

  	
   

  
	
   

  	
   

  	
   

  	
  Comerica Bank

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jon E. Kirchner

  	
   

  	
   

  
	
  Title:

  	
  President & CEOExhibit 10.13.1

 

Execution
Copy

 

AMENDMENT

 

AMENDMENT (this “Amendment”),
dated as of January 30, 2006, by and among MID-STATE TRUST IX, as borrower
(the “Borrower”), YC SUSI TRUST, as a lender (a “Lender”), ATLANTIC ASSET
SECURITIZATION LLC, as a lender (a “Lender,” and together with YC SUSI Trust,
the “Lenders”), WACHOVIA BANK, NATIONAL ASSOCIATION, as custodian/collateral
agent (the “Collateral Agent”), BANK OF AMERICA, NATIONAL ASSOCIATION, as agent
(the “Agent”), a managing agent (a “Managing Agent”) and a bank investor (a “Bank
Investor”), CALYON NEW YORK BRANCH, as a managing agent (a “Managing Agent”,
and together with Bank of America, National Association, the “Managing Agents”)
and a bank investor (a “Bank Investor”) and the other signatories hereto.

 

Capitalized terms used and not defined in this Amendment or in any of
the Operative Documents shall have the meanings given such terms in Annex A to
the Amended and Restated Variable Funding Loan Agreement, dated as of November 19,
2004, as amended from time to time (the “Loan Agreement”), among the Lenders,
the Borrower, the Collateral Agent, the Agent, each Bank Investor and the
Managing Agents.

 

PRELIMINARY STATEMENTS

 

WHEREAS, each of the signatories hereto is party to one or more of the
Operative Documents; and

 

WHEREAS, each of the signatories hereto wish to amend certain of the
Operative Documents, as hereinafter provided;

 

NOW, THEREFORE, in consideration of the mutual covenants contained
herein and in the Loan Agreement, and other good and valuable consideration,
the receipt and adequacy of which is hereby expressly acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:

 

SECTION 1.                                Amendments to the Loan Agreement.  The Loan Agreement is hereby amended as follows:

 

(a)                                  by inserting the following new section 2.18:

 

“Section 2.18.  Interest Rate Protection Agreements.  The Borrower agrees that (i) from and
after the occurrence of an Interest Rate Protection Date, it shall provide to
the Agent for the benefit of the Lenders and the Bank Investors promptly, and
in any event not later than three (3) Business Days after such Interest
Rate Protection Date, an Interest Rate Protection Agreement approved by each
Managing Agent and (ii) prior to the execution of any Interest Rate
Protection Agreement at any other time, it shall provide a copy of the proposed
Interest Rate Protection Agreement to the Agent for approval by each Managing
Agent.  Any such Interest Rate Protection
Agreement shall be provided and maintained at the Borrower’s sole cost and
expense from funds other than Collections.”

 

1

 

(b)                                 by deleting “and” at the end of
clause “(c)” in the definition of “Collections” and adding the following
clause  “(e)” thereto:

 

“and (e) all
amounts received by the Borrower from an Interest Rate Protection Counterparty.”

 

(c)                                  by inserting the following
definitions in alphabetical order in Annex A:

 

“Estimated Swap Rate” means, for any
Collection Period, the mid-rate for swaps having a duration proposed by the
Borrower and approved by the Agent, each Managing Agent and the Controlling
Party, as taken from the Bloomberg service using the USSW Screen (or such other
page as may replace that page on that service, or such other service
that may be nominated by the Agent and approved by each Managing Agent as the
information vendor for the purpose of displaying comparable rates or prices) as
of the last day of such Collection Period.

 

“Excess Spread” means, for any
Collection Period, the percentage computed as of the last day of such
Collection Period equal to (a) the Portfolio Yield for such Collection
Period minus (b) the sum of
the Estimated Swap Rate plus the Program Fee plus the Servicing Fee (in each case expressed on an
annualized percentage basis).

 

“Full Documentation Account”
means any Account with respect to which the related mortgage file includes at a
minimum an application completed and fully executed and verification of
employment and which shall include, as applicable, either a verification of
assets or a verification of mortgage and/or rent payments.

 

“Interest Rate Protection
Agreement” means, with respect to any or all of the Accounts, an amortizing
swap agreement, fixed notional swap, cap, collar or similar arrangement between
any Person and an Interest Rate Protection Counterparty providing for the
transfer or mitigation of interest risks either generally or under specific
contingencies, which arrangement shall be satisfactory in form and substance to
the Controlling Party and the Agent in their sole discretion. For purposes
hereof, the “exposure” at any time of any Person under an Interest Rate
Protection Agreement to which such Person is a party shall be determined at
such time in accordance with the standard methods of calculating such exposure
under similar arrangements as prescribed from time to time by the Controlling
Party and the Agent and approved by each Managing Agent, taking into account
the respective termination provisions set forth therein, the notional principal
amount and term thereof and assuming that U.S. Treasury rates generally are
equal to the per annum rate of interest which the Agent at such time determines
to be the most probable lowest U.S. Treasury rate to occur in the relevant
period following such date.

 

“Interest Rate Protection
Counterparty” means a financial institution satisfactory to each of the
Agent and the Managing Agents in their sole discretion

 

2

 

providing an Interest Rate Protection Agreement
pursuant to Section 2.18 of the Loan Agreement.

 

“Interest Rate Protection
Date” means the date on which the Excess Spread is first less than 1.50%.

 

“Jumbo Account” means
any Account the amount of which exceeds the size limit set for purchase or securitization
by the Federal National Mortgage Association.

 

“Low Documentation Account”
means, any Account with respect to which the related mortgage file does not
include each item listed in the definition of Full Documentation Account.

 

“Manufactured Home”
means a single family residential unit that is constructed in a factory in
sections and that is intended to be so constructed in accordance with the
Federal Manufactured Home Construction and Safety Standards adopted on June 15,
1976, by the Department of Housing and Urban Development (“HUD Code”), as
amended in 2000, which preempts state and local building codes. The
manufactured home is built on a non-removable, permanent frame chassis that
supports the complete unit of walls, floors, and roof.

 

“Manufactured Home Account”
means, any Mortgage Loan with respect to which the related Mortgaged Property
is a Manufactured Home.

 

“Portfolio Yield” means for any Collection Period, the
percentage computed as of the last day of such Collection Period equal to the
product of (a) (1) the aggregate amount of Finance Charges for such
Collection Period, divided by (2) the aggregate Principal Balance at the
beginning of such Collection Period, times (b) 12.

 

(d)           by deleting clause (u) in the definition of “Eligible Account”
in Annex A in its entirety and substituting in lieu thereof the following new
clause (u):

 

“(u)         which
the aggregate Principal Balance for Jumbo Accounts does not represent greater
than 15% of the Borrowing Base; provided, however, that a Jumbo
Account which satisfies the criteria specified hereunder shall cease to be an
Eligible Account if it causes the average Principal Balance of all Eligible
Accounts to be greater than $115,000;”

 

(e)           by deleting clause (bb) in the definition of “Eligible
Account” in Annex A in its entirety and substituting in lieu thereof the
following new clause (bb):

 

“(bb)       with
respect to any Account originated (or in the case of Walter Mortgage Company,
originated or purchased) by an Eligible Originator, such Account was originated
(or in the case of Walter Mortgage Company, originated or purchased) in
accordance with the applicable Credit and Collection Policy;”

 

3

 

(f)            by deleting clause (gg) in the
definition of “Eligible Account” in Annex A in its entirety and replacing it
with the following new clause (gg):

 

“(gg)       which
is a Full Documentation Account; provided, however, if such
Account is a Low Documentation Account, the Principal Balance thereof, together
with the Principal Balance of all other such Accounts, may not represent
greater than 20% of the Borrowing Base;”

 

(g)           by deleting clause (kk) in the definition of “Eligible
Account” in Annex A in its entirety and replacing it with the following clause
(kk):

 

“(kk)       with
respect to which, if the related Account is an Adjustable Rate Account, the
Account Note evidences an Account that (i) has fully amortizing monthly
payments, (ii) has no negative amortization, (iii) is not an
interest-only loan, (iv) is not secured by a lien on a Manufactured Home
and (v) the Principal Balance thereof together with the aggregate
Principal Balance of all other Adjustable Rate Accounts does not exceed 45% of
the aggregate Principal Balance of all Eligible Accounts; provided, however,
that an Adjustable Rate Account which satisfies the criteria specified
hereunder shall cease to be an Eligible Account upon the earlier to occur of
(x) the date that is three months prior to the date on which the related
interest rate adjusts, (y) a Take-Out and (z) a Facility Termination Event.”

 

(h)           by deleting the period at the end of clause (ll) in the
definition of “Eligible Account” in Annex A and replacing it with a semicolon
and by inserting the following new clauses (mm) and (nn):

 

“(mm)     with respect to which, if such Account is a Manufactured
Home Account, the amount thereof, together with the amount of all other
Manufactured Home Accounts, would not represent greater than 5% of the
Borrowing Base; and

 

“(nn) with
respect to which, if such Account is an Account with respect to which the
related Mortgaged Property is a two- to four-family dwelling, an individual
condominium unit in a condominium project or an individual unit in a townhouse
the amount thereof, together with the amount of all other such Accounts, would
not represent greater than 5% of the Borrowing Base;

 

(i)            by adding the following proviso
at the end of the definition of “Eligible Account” in Annex A:

 

“provided,
however that the concentration percentage limitations in clauses (y),
(gg), (kk), (mm) and (nn) of this definition shall not be applicable for 90
days after any Take-Out if the aggregate amount of Loans then outstanding is
less than or equal to $75,000,000.”

 

(j)            by deleting the reference to “January 31,
2006” in the definition of “Scheduled Termination Date” in Annex A and
replacing it with “January 30, 2007.”

 

4

 

SECTION 2.           Conditions Precedent.  This Amendment shall become effective, as of
the date hereof, on the date on which the following conditions precedent shall
have been fulfilled:

 

(a)           This Amendment. Each Managing Agent shall have
received counterparts of this Amendment, duly executed by each of the parties
hereto.

 

(b)           Additional Documents. Each Managing Agent shall have
received all additional approvals, certificates, documents, instruments and
items of information as each Managing Agent may reasonably request and all of
the foregoing shall be in form and substance reasonably satisfactory to each
Managing Agent.

 

(c)           Legal Matters.  All instruments and legal and corporate
proceedings in connection with the transactions contemplated by this Amendment
shall be satisfactory in form and substance to each Managing Agent and each
Managing Agent’s counsel and the fees and expenses of counsel to each Managing
Agent incurred in connection with the execution of this Amendment and the
transactions contemplated hereby shall have been paid in full.

 

SECTION 3.           Severability of Provisions.  Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

SECTION 4.           Captions.  The captions in this Amendment are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.

 

SECTION 5.           Agreement to Remain in Full
Force and Effect.  Except as amended hereby, the Loan Agreement
shall remain in full force and effect and is hereby ratified, adopted and
confirmed in all respects.  All
references in the Loan Agreement to “herein,” or words of like import, and all
references to the Loan Agreement in any agreement or document shall hereafter
be deemed to refer to the Loan Agreement as amended hereby.

 

SECTION 6.           GOVERNING LAW.  EXCEPT WITH RESPECT TO SECTION 8 AND ANY
OTHER SECTIONS HEREIN TO THE EXTENT THAT THEY AFFECT THE TRUST AGREEMENT, WHICH
SECTIONS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

 

SECTION 7.           Execution in Counterparts.  This Amendment may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but
one and the same Amendment.

 

SECTION 8.           Limitation of Liability.  It is expressly understood and agreed by the
parties hereto that (a) this Amendment is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as trustee
of the Trust, in the exercise of the powers and authority conferred and vested
in it under the Trust Agreement, (b) each of the representations,

 

5

 

undertakings and agreements herein or therein
made on the part of the Trust is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose of binding only the Trust and (c) under
no circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Trust under this Amendment.

 

SECTION 9.           Representations and Warranties.  The Borrower hereby certifies that (i) the
representations and warranties made by it in Section 3.1 of the Loan
Agreement are true and correct as of the date hereof, as though made on and as
of the date hereof and (ii) as of the date hereof, there is no Event of
Default or event which, with the passage of time of the giving of notice, could
result in an Event of Default.

 

SECTION 10.         Waiver of Notice.  Each of the parties hereto hereby waives any
notice in connection with the execution and delivery of this Amendment.

 

6

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