Document:

Exhibit 10.4.4

 

Loan No. ML0936T2A

 

FIRST AMENDMENT TO PROMISSORY NOTE AND SUPPLEMENT

 

THIS FIRST AMENDMENT TO PROMISSORY NOTE AND SUPPLEMENT   (this “Amendment”) is
entered into as of September 12, 2005, between MONARCH
UTILITIES I L.P. (formerly known as Tecon Water Company, L.P.), a
Texas limited partnership (the “Company”), and CoBANK,
ACB,  a federally chartered
instrumentality of the United States (“CoBank”).

 

BACKGROUND

 

The Company and CoBank are parties to a Promissory
Note and Supplement dated as of May 1, 2002 and numbered ML0936T2 (the “Supplement”).
Since the date of the Supplement, the Company has changed its name from Tecon
Water Company, L.P. to Monarch Utilities I L.P. The parties now desire to amend
the Supplement to reflect the change in the Company’s name.

 

NOW, THEREFORE, for
good and valuable other consideration, the receipt and sufficiency of which are
hereby established, the parties agree as follows:

 

SECTION 1.         Amendment.  The
name of the Company is hereby amended from “Tecon Water Company, L.P.” to “Monarch
Utilities I L.P.”. Wherever in the Supplement the name “Tecon Water Company,
L.P.” appears, it shall be deemed to mean “Monarch Utilities I L.P.”

 

SECTION 2.         Confirmation. This Amendment reflects the entire understanding between the parties
with respect to the subject matter hereof. Except as modified hereby, the
Supplement shall remain in full force and effect as written.

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date
shown above by their duly authorized officers:

 

	
   

  	
   

  	
  CoBANK, ACB,

  
	
   

  	
   

  	
  a federally chartered instrumentality

  
	
   

  	
   

  	
  of the United States

  
	
   

  	
   

  	
  By:

  	
  /s/ Illegible

  
	
   

  	
   

  	
  Name:

  	
  Illegible

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MONARCH UTILITIES I L.P.,

  
	
   

  	
   

  	
  a Texas limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Texas Water Services Group, LLC,

  
	
   

  	
   

  	
   

  	
  a Texas limited liability company

  
	
   

  	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Michael O. Quinn

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael O. Quinn

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice PresidentExhibit 10.4.5

 

Loan No. RX0936T3

 

PROMISSORY NOTE AND SUPPLEMENT

(Single Advance Term Loan)

 

THIS
PROMISSORY NOTE AND SUPPLEMENT (this “Promissory Note and
Supplement”) is entered into as of September 12, 2005, between MONARCH UTILITIES I L.P., a Texas limited partnership (the “Company”),
and CoBANK, ACB,  a federally chartered instrumentality of the
United States (“CoBank”), and supplements that certain Amended and Restated
Master Loan Agreement dated as of September 12, 2005, between the Company
and CoBank (as amended or restated from time to time, the “MLA”).

 

SECTION 1.         The Term Loan Commitment.  On the terms and conditions set forth in the
MLA and this Promissory Note and Supplement, CoBank agrees to make a loan (the “Loan”)
to the Company in a amount up to $20,000,000.00 (the “Commitment”). CoBank’s obligation to make the Loan shall
expire at 12:00 Noon, Company’s local time, on September 30, 2005, or such
later date as CoBank may, in its sole discretion, authorize in writing. Under
the Commitment, amounts borrowed and later repaid may not be reborrowed.

 

SECTION 2.         Purpose.  The purpose of the Commitment is to: (A) refinance
all of the Company’s indebtedness to Southwest Water Company (“Southwest”);
(B) finance capital expenditures; and (C) other corporate purposes.

 

SECTION 3.         Availability.
Notwithstanding Section 2.02 of the MLA, the Loans will be made available: (A) on written request of an
authorized officer of the Company in form and content prescribed by CoBank (the
“Request  for  Loan”); (B) on a date to be agreed upon
by the parties (the “Closing  Date”); (C) in a single
advance; and (D) by wire transfer of immediately available funds to “Republic
Title” (as defined in the MLA), as provided in the “Closing Agreement” (as
defined in the MLA). Notwithstanding the foregoing, the initial Loan to be made
hereunder shall be made for the purpose of refinancing all of the Company’s
indebtedness to Southwest.

 

SECTION 4.         Interest. The
Loan will bear interest at a rate per annum to be quoted by CoBank in its sole
discretion on the date the Loan is made. Interest shall be calculated on the
actual number of days the Loan is outstanding on the basis of a year consisting
of 360 days and shall be payable monthly in arrears by the 20th day
of the following month.

 

SECTION 5.         Loan Origination Fee.
In consideration of the Commitment, the Company agrees to pay to CoBank on the
date hereof, a loan origination fee in the amount of $50,000.00.

 

SECTION 7.         Promissory Note.  The Company promises to repay the Loan on June 30,
2031. Until such date, no principal payments shall be due. In addition to the
above, the Company promises to pay interest on the unpaid principal balance of
the Loan at the times and in accordance with the provisions set forth above.
Notwithstanding the foregoing, if any date on which principal and interest are
due is not a “Business  Day” (as defined in the MLA), then such
payment shall be due and payable on the next Business Day and, during such
period, interest shall continue to accrue on the principal amount thereof.

 

SECTION 8.         Security. The Company’s
obligations hereunder and, to the extent related hereto, the MLA shall be
secured as provided in Section 2.04 of the MLA.

 

1

 

SECTION 9.         Prepayment. The
Company may, on one Business Day’s prior written notice, prepay the Loan in
whole or in increments of $1,000,000. Any prepayment shall be accompanied by a
payment of accrued interest on the amount prepaid to the date of payment and a
surcharge equal to the present value of the sum of: (1) the difference, if
(a) is larger than (b), between: (a) the rate estimated by CoBank in
accordance with its standard methodology to be its all-in cost to fund the
Loan; minus (b) the rate estimated by CoBank on the date of the prepayment
(in accordance with its then standard methodology) to be its all-in cost to
fund a new loan having a weighted average life equal to the weighted average
life of the balance of the Loan being prepaid; plus (2) an amount equal to
a yield of 1⁄2 of 1% on the amount being prepaid, calculated on a per annum basis
through the final maturity of the Loan. In calculating the surcharge, the
discount rate shall be the rate determined in accordance with (1)(b) above.

 

SECTION 10.       Conditions Precedent. In
addition to the conditions precedent set forth in Article 3 of the MLA,
CoBank’s obligation to make the Loan is subject to the condition precedent that
CoBank shall have received a duly executed original copy of the Request for
Loan.

 

IN
WITNESS WHEREOF, the parties have caused this Promissory Note
and Supplement to the MLA to be executed by their duly authorized officers as
of the date shown above.

 

	
  CoBANK,
  ACB

  	
   

  	
  MONARCH
  UTILITIES I L.P.

  
	
   

  	
   

  	
  a Texas limited
  partnership

  
	
   

  	
   

  	
  By: Texas Water
  Services Group, LLC

  
	
   

  	
   

  	
  a Texas limited
  liability company

  
	
   

  	
   

  	
  Its: General
  Partner

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Illegible

  	
   

  	
   

  	
  By:

  	
  /s/ Michael O.
  Quinn

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  	
  Title:

  	
  President

  	
   

  

 

2EXHIBIT 10.2

FOURTH AMENDMENT TO
CREDIT AGREEMENT, SECOND AMENDMENT TO SECURITY AGREEMENT AND WAIVER

THIS FOURTH AMENDMENT TO CREDIT
AGREEMENT, SECOND AMENDMENT TO SECURITY AGREEMENT AND WAIVER (this “Amendment”), dated as of
November 4, 2005, is 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, as administrative agent for the persons designated in
the Credit Agreement referred to below (in such capacity, together with its
successors and assigns in such capacity, “Agent”), and INFOCUS CORPORATION, an Oregon corporation (“Borrower”).

RECITALS

A.            Borrower,
Agent and the Lenders have previously entered into that certain Credit
Agreement dated as of October 25, 2004, as amended by that certain First
Amendment to Credit Agreement, Security Agreement and Waiver, dated as of
December 3, 2004, entered into by and among Borrower, Agent and the Lenders,
that certain Second Amendment to Credit Agreement, dated as of December 13,
2004, by and among Borrower, Agent and the Lenders and that certain Third
Amendment to Credit Agreement and Waiver dated May 6, 2005, entered into by and
among Borrower, Agent and the Lenders (as so amended or otherwise modified or
supplemented from time to time, 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 have previously entered into that certain Security Agreement dated as
of October 25, 2004, as amended by that certain First Amendment to Credit
Agreement, Security Agreement and Waiver, dated as of December 3, 2004, entered
into by and among Borrower, Agent and the Lenders (as so amended or otherwise
modified or supplemented from time to time, the “Security Agreement”).

C.            Certain Events of Default have occurred
and are continuing as a result of Borrower’s (i) failure to achieve EBITDA of
$(29,250,000) or more for the 9-month period ending June 30, 2005 and Borrower’s
failure to achieve EBITDA of $(38,500,000) or more for the 12-month period
ending September 30, 2005, in each case, as required pursuant to Section
6.16(a)(i) of the Credit Agreement, (ii) failure to timely provide to Agent
the Projections and supporting financial documents as required pursuant to
items (g) and (m) of Schedule 5.3 referenced in Section 5.3 of
the Credit Agreement, and (iii) having consigned Inventory in excess of the
lesser of $10,000,000 in the aggregate or 10% of all finished goods Inventory
of Borrower in contravention of the provisions of Section 6.9 of the Credit
Agreement (the “Known Existing Defaults”).

D.            Borrower has requested that Agent
and the Lenders waive the Known Existing Defaults and amend the Credit
Agreement and Security 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 or any member of the Lender Group’s rights or
remedies set forth in the Credit Agreement or any other Loan Document 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 defined terms are
hereby added to Schedule 1.1 to the Credit Agreement, in their proper
alphabetical order:

“ ‘Applicable
Consignment Allowance’ means, with respect to the aggregate amount of
Inventory of Borrower and its Domestic Subsidiaries out on consignment as of
any date of determination: (a) $13,000,000 at all times through and including
February 27, 2006; (b) $10,000,000 beginning February 28, 2006 and through and
including July 30, 2006; and (c) $8,000,000 at all times on and after July 31,
2006.

‘Availability
Block’ means, as of any date of determination, the sum of (a) $15,000,000
and (b) upon the sale of the Real Property owned by Borrower in the City of
Wilsonville, County of Clackamas, State of Oregon and more fully described as
set forth on Schedule R hereto, the greater of (i) $5,000,000 or (ii)
the net sale proceeds received by Borrower with respect thereto, rounded to the
nearest $100,000.”

(b)           The definition of “Base Rate Margin”
set forth in Schedule 1.1 to the Credit Agreement is hereby amended and
restated to read as follows:

“ ‘Base Rate Margin’ means 1.5 percentage
points.”

(c)           The definition of “Dilution” set
forth in Schedule 1.1 to the Credit Agreement is hereby amended by
changing “180 consecutive days” to “90 consecutive days” in each place where
such words appear therein.

(d)           The definition of “Dilution Reserve”
set forth in Schedule 1.1 to the Credit Agreement is hereby amended and
restated to read as follows:

“ ‘Dilution Reserve’ means: (a) with respect to
Eligible Accounts, an amount sufficient to reduce the advance rate against
Eligible Accounts by 1 percentage point for each percentage point by which
Dilution with respect to Accounts other than Thomson RCA France Accounts is in
excess of 10% or (b) with respect to Eligible Thomson RCA France Accounts, an
amount sufficient to reduce the advance rate against Eligible Thomson RCA France
Accounts by 1 percentage point for each percentage point by which Dilution with
respect to Thomson RCA France Accounts is in excess of 10%; provided, that,
with respect to each of (a) and (b) above, during the period commencing
December 1 and ending February 28 of each year, in each case, Dilution Reserve
shall mean an amount sufficient to reduce the advance rate against such
Accounts by 1.75 percentage points for each percentage point by which Dilution
with respect to such Accounts is in excess of 10%.”

(e)           Clause (g) of the definition of “Permitted
Dispositions” set forth in Schedule 1.1 to the Credit Agreement is
hereby amended and restated to read as follows:

“(g) the sale or other
disposition of the Real Property owned by Borrower in the City of Wilsonville,
County of Clackamas, State of Oregon and more fully described as set forth on Schedule
R hereto, in which case Agent shall release its Lien with respect to such
Real Property, if: (i) the net proceeds thereof are immediately transferred to
an account of the Borrower which is maintained with a financial institution or
securities intermediary located within the United States and is subject to a
Control Agreement, (ii) all such net proceeds are used by Borrower to repay any
Obligations which may then be outstanding and thereafter for working capital
purposes, and (iii) Agent has received copies of all documentation reasonably
requested by Agent with regard to such sale or disposition and is satisfied
with the terms thereof.”

(f)            Clause (g) of the definition of “Permitted
Investments” set forth in Schedule 1.1 to the Credit Agreement is hereby
amended and restated to read as follows:

“(g) Investments in an
amount not to exceed $15,000,000 in the aggregate at any one time outstanding
with respect to Investments made (directly or indirectly through InFocus
International (Cayman) Limited, a company organized under the laws of the
Cayman Islands) in South Mountain Technologies, Ltd., a limited liability
company organized under the laws of the Cayman Islands (“SMT”) and SMT’s
wholly-owned operating Subsidiaries (which for clarification purposes may
include the repayment of amounts extended to

 

2

 

such Subsidiaries of SMT as a loan or an account and
subsequent re-investment of such amounts in SMT), or $22,000,000 in the
aggregate at any one time outstanding for all such Investments (not including
Investments made by Borrower prior to the Closing Date and Permitted
Investments set forth in clauses (a) through (f)) so long as Agent’s prior
written consent shall have been obtained with respect thereto, such consent to
be granted or withheld in Agent’s sole and absolute discretion.”

(g)           Section 2.1(a) of the Credit
Agreement is hereby amended and restated to read as follows:

“Subject to the terms and
conditions of this Agreement, and during the term of this Agreement, each
Lender agrees (severally, not jointly or jointly and severally) to make
advances (“Advances”) to Borrower in an amount at any one time
outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the result of (A) the Maximum Revolver
Amount less the Availability Block, less (B) the Letter of Credit Usage, or (ii) the Borrowing
Base less the Letter of Credit Usage.”

(h)           The last sentence of Section 2.7(b)
of the Credit Agreement is hereby amended and restated to read as follows:

“Without limiting the
foregoing, Borrower understands and agrees that no later than November 8, 2005,
the Cash Management Bank shall be instructed by Agent to restrict Borrower’s
and its Domestic Subsidiaries’, as applicable, access to their respective Cash
Management Accounts and cause amounts in the Cash Management Accounts to be
swept to Agent’s Account.”

(i)            The last sentence of the first paragraph
of Section 2.12(a) of the Credit Agreement is hereby amended and restated to
read as follows:

“The Issuing Lender shall have no obligation to issue
a Letter of Credit if any of the following would result after giving effect to
the issuance of such requested Letter of Credit:

(x)            the
Letter of Credit Usage would exceed the Borrowing Base less the outstanding
amount of Advances, or

(y)           the
Letter of Credit Usage would exceed $25,000,000, or

(z)            the Letter of Credit Usage would
exceed the Maximum Revolver Amount less the sum of (A) the outstanding amount
of Advances and (B) the Availability Block.”

(j)            Section 2.13 of the Credit
Agreement, the definitions of “Base LIBOR Rate”, “LIBOR Deadline,” “LIBOR
Notice,” “LIBOR Option,” “LIBOR Rate,” “LIBOR Rate Loan,” and “LIBOR Rate
Margin” are hereby deleted in their entirety along with all references in the
Credit Agreement and all other Loan Documents to such Section or such defined
terms.

(k)           Section 5.15 of the Credit Agreement
is hereby amended by deleting the words “provided, however, that,
at Agent’s election, in its discretion, upon the occurrence of a Triggering
Event, Borrower shall comply with the provisions of this Section 5.15
with respect to the Securities Accounts set forth on Schedule 5.15;” set
forth therein and replacing them with “provided, however, that,
at Agent’s election, in its discretion, Borrower shall comply with the
provisions of this Section 5.15 with respect to the Securities Accounts
set forth on Schedule 5.15;”.

(l)            Section 6.9 of the Credit Agreement
is hereby amended and restated to read as follows:

“6.9         Consignments.  Consign any of its or their Inventory or sell
any of its or their Inventory on bill and hold, sale or return, sale on
approval, or other conditional terms of sale; provided, that, upon prior notice
to Agent, Borrower and its Domestic Subsidiaries may consign Inventory which
does not exceed the Applicable Consignment Allowance.”

 

3

 

(m)          Section 6.16(a)(i) of the Credit Agreement
is hereby amended and restated to read as follows:

“(i)          Minimum EBITDA. 
EBITDA, measured on a month-end basis, of at least the required amount
set forth in the following table for the applicable period set forth opposite
thereto:

	
  Applicable Amount

  	
   

  	
  Applicable Period

  	
   

  
	
  $(92,500,000)

  	
   

  	
  For the 12 month period

  ending December 31, 2005

  	
   

  
	
  $(80,500,000)

  	
   

  	
  For the 12 month period

  ending March 31, 2006

  	
   

  
	
  $(61,500,000)

  	
   

  	
  For the 12 month period

  ending June 30, 2006

  	
   

  
	
  $(31,000,000)

  	
   

  	
  For the 12 month period

  ending September 30, 2006”

  	
   

  

 

(n)           Items (a) through (h) of Schedule
5.2 of the Credit Agreement are hereby amended and restated to read as
follows:

	
  Weekly, or more frequently as requested by Agent,

  	
   

  	
  (a) an Account roll-forward with supporting details
  supplied from sales journals, collection journals, credit registers and any
  other records.

  
	
  Monthly (no later than the 15th day of each month),
  or more frequently as requested by Agent,

  	
   

  	
  (b) a Borrowing Base Certificate,

  (c) a detailed aging, by total, of Borrower’s Accounts, together with a
  reconciliation and supporting documentation for any reconciling items noted
  (delivered electronically in an acceptable format, if Borrower has
  implemented electronic reporting),

  (d) a detailed calculation of those Accounts that are not eligible for the
  Borrowing Base, if Borrower has not implemented electronic reporting,

  (e) a summary aging, by vendor, of Borrower’s and its Domestic Subsidiaries’
  accounts payable and any book overdraft (delivered electronically in an
  acceptable format, if Borrower has implemented electronic reporting) and an
  aging, by vendor, of any held checks,

  (f) a detailed report regarding Borrower’s and its Domestic Subsidiaries’
  cash and Cash Equivalents, including an indication of which amounts constitute
  Qualified Cash,

  (g) a monthly Account roll-forward, in a format acceptable to Agent in its
  discretion, tied to the beginning and ending account receivable balances of
  Borrower’s general ledger, and

  (h) notice of all claims, offsets, or disputes asserted by Account Debtors
  with respect to Borrower’s Accounts.

  

 

4

 

(o)           The following is hereby added to Schedule
5.3 of the Credit Agreement as item (n) thereof:

	
  monthly, no later than
  the 15th day of each month, at any time when the outstanding principal
  balance of the Advances or the Letter of Credit Usage is $0 and weekly, no
  later than the 1st Business Day of each week, at any time when the
  outstanding principal balance of the Advances or the Letter of Credit Usage
  is greater than $0,

  	
   

  	
  (n) a cash flow
  projection covering Borrower’s and its Subsidiaries’ operations for the
  forthcoming thirteen week period.

  

 

2.             Amendments to Security Agreement.

(a)           Schedule 4 to the Security Agreement
is hereby deleted and replaced with the Schedule 4 attached to this Amendment.

(b)           Schedule 7 to the Security Agreement
is hereby deleted and replaced with the Schedule 7 attached to this Amendment.

3.             Waiver of Known Existing
Defaults.  Agent, on behalf of the
Lenders, hereby waives enforcement of its and the Lender Group’s rights against
Borrower arising from the Known Existing Defaults; provided, however,
nothing herein shall be deemed a waiver with respect to any other or future
failure of Borrower to comply fully with Sections 5.3 and 6.16(a)(i) of the
Credit Agreement (as amended or modified by this Amendment).  This waiver shall be effective only for the
specific defaults comprising the Known Existing Defaults, and in no event shall
this waiver be deemed to be a waiver of enforcement of Agent’s or any other
member of the 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 Agent or any other member of the Lender
Group shall be a waiver of any rights or remedies such Persons have or may have
against Borrower, except as specifically provided herein.  Except as specifically provided herein, Agent
hereby reserves and preserves all of its and the Lender Group’s 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, the Lender Group, and any and all of their respective 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

 

5

 

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 (or any comparable provision of
any other applicable law), 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.             Accommodation Fee.  In consideration of the agreements and waiver
set forth herein, Borrower agrees to pay to Agent, for the benefit of the
Lenders, an accommodation fee in the amount of $100,000 (the “Accommodation
Fee”), which fee is non-refundable and fully-earned as of and due on the
date of this Amendment.

6.             Additional Covenants.  Borrower agrees to provide to Agent:

(a)           on or before November 4, 2005, its
updated revised Projections, in form and substance (including as to scope and
underlying assumptions) satisfactory to Agent, in its Permitted Discretion, 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;

(b)           on or before the date that is 30 days
after the date hereof, a Control Agreement, in form and substance satisfactory
to Agent, with respect to Borrower’s Securities Account number 14-78178
maintained with Morgan Stanley; and

(c)           on or before the date that is 10
Business Days after the date hereof, a Mortgage, in form and substance
satisfactory to Agent duly executed by Borrower with respect to all of its fee
interests in Real Property (the “Real Property Collateral”);

(d)           on or before the date that is 30 days
after the date hereof:

(i)            a mortgagee title insurance policy
(or marked commitment to issue the same) for the Real Property Collateral
issued by a title insurance company satisfactory to Agent (the “Mortgage
Policy”), in an amount satisfactory to Agent, assuring Agent that the
Mortgage on the Real Property Collateral is a valid and enforceable first
priority mortgage Lien thereon free and clear of all defects and encumbrances
except Permitted Liens, and the Mortgage Policy otherwise shall be in form and
substance satisfactory to Agent;

(ii)           a
phase-I environmental report and a real estate survey with respect to
each parcel composing the Real Property Collateral, the environmental
consultants and surveyors retained for such reports or surveys, the scope of
the reports or surveys, and the results thereof shall be acceptable to Agent;
and

 

6

 

(iii)          such other reports and certificates as
to the Real Property Collateral as are customarily obtained by Agent in transactions
of a similar nature; and

(e)           on or before the date that is 10 Business
Days after the date hereof, the original certificates evidencing the Stock of
Motif, Inc., Reflectivity Inc. and VST listed on the attached Schedule 4,
together with stock powers therefor executed in blank.

7.             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)           Executed Amendment.  This Amendment fully executed in a sufficient
number of counterparts for distribution to all parties.

(b)           Amendment to Fee Letter.  An amendment to the Fee Letter, fully
executed in sufficient number of counterparts for distribution to all parties.

(c)           Payment of Accommodation Fee.  The Accommodation Fee, which fee may be paid as
a charge to Borrower’s Loan Account.

(d)           Representations and Warranties.  The representations and warranties contained
herein shall be true and correct as of the date hereof.

(e)           Other 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.

8.             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 and by any amendments thereto referenced herein) to which it is a
party.  The execution, delivery and
performance by Borrower of this Amendment and any amendment to any other Loan
Document referenced herein have been duly approved by all necessary corporate
action and no other corporate proceedings are necessary to consummate such
transactions.

(b)           Enforceability.  This Amendment and any amendment to any other
Loan Document referenced herein have been duly executed and delivered by
Borrower.  This Amendment and each Loan
Document (as amended or modified hereby and by any amendments thereto
referenced herein) are 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.  After giving effect to this Amendment, 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 and any amendment to any other Loan Document referenced herein 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 a Default or an Event of Default.

 

7

 

(f)            No Duress.  This Amendment and any amendment to any other
Loan Document referenced herein have been entered into without force or duress,
of the free will of Borrower.  Borrower’s
decision to enter into this Amendment and any amendment to any other Loan
Document referenced herein is a fully informed decision and Borrower is aware
of all legal and other ramifications of such decision.

(g)           Counsel.  Borrower has read and understands this
Amendment and any amendment to any other Loan Document referenced herein, has
consulted with and been represented by legal counsel in connection herewith and
therewith, and has been advised by its counsel of its rights and obligations
hereunder and thereunder.

(h)           Pledged Stock.  Other than the Stock of InFocus International
(Cayman) Ltd., Motif, Inc., Phoenix Electric Company, Ltd., Pixelworks, Inc.,
Reflectivity Inc. and VST listed on the attached Schedule 4, none of the Stock of
any of the other entities listed thereon is represented by a certificate or
other such instrument.

9.             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.

10.           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 or other similar method of
electronic transmission shall be effective as delivery of a manually executed
counterpart of this Amendment.

11.           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.

12.           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.

13.           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 member of the Lender Group with respect to the
Obligations.

 

8

 

14.           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.

15.           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.

16.           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 any of the Lenders 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.

17.           Agent’s Capacity.  Agent confirms that it is entering into this
Amendment, and has entered into all prior amendments to and waivers of Loan
Documents referenced herein in its capacity as agent for the parties designated
in such Loan Documents.

[Signature Page Follows]

 

9

 

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

	
   

  	
  INFOCUS CORPORATION,

  	
   

  
	
   

  	
  an Oregon corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Roger Rowe

  	
   

  
	
   

  	
  Name: Roger Rowe

  	
   

  
	
   

  	
  Title: Chief Financial
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO FOOTHILL, INC.,

  	
   

  
	
   

  	
  a California
  corporation, as Agent and a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Thomas Forbath

  	
   

  
	
   

  	
  Name: Thomas Forbath

  	
   

  
	
   

  	
  Title: Vice President

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