Exhibit 10.2
AMENDMENT NUMBER TEN TO
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Amendment Number Ten to Second Amended and Restated Loan and
Security Agreement ("Amendment") is entered into as of October 29, 2002, by and
between CONGRESS FINANCIAL CORPORATION (WESTERN), a California corporation
("Lender"), on the one hand, and SENSORY SCIENCE CORPORATION, a Delaware
corporation ("Sensory"), and CALIFORNIA AUDIO LABS, LLC, a California limited
liability company ("Cal-Audio", and collectively, jointly and severally, with
Sensory, "Borrowers"), on the other hand, in light of the following:
A. Borrowers and Lender have previously entered into that certain Second
Amended and Restated Loan and Security Agreement, dated as of August 19, 1998
(as amended and modified, from time to time, the "Agreement").
B. Pursuant to Section 9.18 of the Agreement, Parent's ownership
interest in United Micorelectronics Corp. ("UMC") must be greater than
$40,000,000 (the "UMC Covenant"). It has come to Lender's attention that
Parent's ownership interest in UMC was less than $40,000,000 for the period
ended September 30, 2002 (the "UMC Default") and Borrowers have informed Lender
that Parent will not be able to meet the UMC Covenant on a going forward basis.
C. Borrowers have requested, and Lender has agreed, to waive the UMC
Default and further compliance with the UMC Covenant and amend the Agreement as
provided for herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Borrowers and Lender hereby amend
and supplement the Agreement as follows:
1. DEFINITIONS. All initially capitalized terms used in this Amendment
shall have the meanings given to them in the Agreement unless specifically
defined herein.
2. AMENDMENTS.
(a) The definition of "Availability Reserves" in Section 1 of
the Agreement is hereby amended to read as follows:
"Availability Reserves" shall mean, as of any
date of determination, such amounts as Lender may from time to
time establish and revise in good faith reducing the amount of
Revolving Loans and Letter of Credit Accommodations which would
otherwise be available to Borrowers under the lending formula(s)
provided for herein: (a) to reflect events, conditions,
contingencies or risks which, as determined by Lender in good
faith, do or may
affect either (i) the Collateral or any other property which is
security for the Obligations or its value, (ii) the assets,
business or prospects of Borrowers or any Obligor or (iii) the
security interests and other rights of Lender in the Collateral
(including the enforceability, perfection and priority thereof)
or (b) to reflect Lender's good faith belief that any collateral
report or financial information furnished by or on behalf of
Borrowers or any Obligor to Lender is or may have been
incomplete, inaccurate or misleading in any material respect or
(c) to reflect outstanding Letter of Credit Accommodations as
provided in Section 2.2 hereof or (d) in respect of any state of
facts which Lender determines in good faith constitutes an Event
of Default or may, with notice or passage of time or both,
constitute an Event of Default. Without limiting its ability to
set other reserves in accordance with the foregoing, Lender
shall establish a reserve based upon a percentage (initially 4%,
but subject to increase or decrease in Lender's good faith
discretion) of Borrowers' gross sales since October 1, 2002.
Such reserve shall commence on October __, 2002, and shall be
reset from time to time thereafter (but not less frequently than
on a monthly basis).
(b) The definition of "Orderly Liquidation Value" in Section 1
of the Agreement is hereby amended to read as follows:
"Orderly Liquidation Value" means, for any
asset, the "Orderly Liquidation Value" thereof, net of any and
all costs and expenses of such asset's liquidation, as
established by third party appraisals conducted pursuant to the
terms of Section 7.3(d) or 7.4 hereof, as the case may be.
Without limiting the forgoing, the "Orderly Liquidation Value"
of any asset shall be measured, at all times, at the low season
valuation determined by such appraisals.
(c) Section 9.18 of the Agreement is hereby deleted in its
entirety.
3. REPRESENTATIONS AND WARRANTIES. Borrowers hereby affirm to Lender
that all of Borrowers' representations and warranties set forth in the Agreement
are true, complete and accurate in all respects as of the date hereof.
4. LIMITED WAIVER. Lender hereby waives the UMC Default for the period
ended September 30, 2002. The limited waiver set forth herein shall be limited
precisely as written and shall not be deemed to (a) be a waiver or modification
(i) of any other term or condition of the Agreement or (ii) of any other period
other than the period specifically prescribed herein, or (b) prejudice any right
or remedy which Lender may now or in the future have under or in connection with
the Agreement.
5. NO DEFAULTS. Borrowers hereby affirm to Lender that, other than the
UMC Default, no Event of Default has occurred and is continuing as of the date
hereof.
6. CONDITIONS PRECEDENT.
(a) The effectiveness of this Amendment is expressly conditioned
upon the receipt by Lender of an executed copy of this Amendment.
(b) No amendment fee shall be charged to Borrowers' loan account
in connection with this Amendment.
7. COSTS AND EXPENSES. Borrowers shall pay to Lender all of Lender's
out-of-pocket costs and expenses (including, without limitation, the fees and
expenses of its counsel, which counsel may include any local counsel deemed
necessary, search fees, filing and recording fees, documentation fees, appraisal
fees, travel expenses, and other fees) arising in connection with the
preparation, execution, and delivery of this Amendment and all related
documents.
8. LIMITED EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement, the
terms and provisions of this Amendment shall govern. In all other respects, the
Agreement, as amended and supplemented hereby, shall remain in full force and
effect.
9. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which when so executed and delivered shall be deemed to be an original. All
such counterparts, taken together, shall constitute but one and the same
Amendment. This Amendment shall become effective upon the execution of a
counterpart of this Amendment by each of the parties hereto.
[the remainder of this page left blank intentionally; signatures to follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
CONGRESS FINANCIAL CORPORATION
(WESTERN),
a California corporation
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title: V.P.
--------------------------------
SENSORY SCIENCE CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: CFO
--------------------------------
CALIFORNIA AUDIO LABS, LLC,
a California limited liability company
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: CFO
--------------------------------
Each of the undersigned has executed a continuing guaranty (each,
individually, a "Guaranty") in favor of CONGRESS FINANCIAL CORPORATION
(WESTERN), a California corporation ("Lender"), respecting the obligations of
SENSORY SCIENCE CORPORATION, a Delaware corporation ("Sensory"), and CALIFORNIA
AUDIO LABS, LLC, a California limited liability company ("Cal-Audio", and
collectively, jointly and severally, with Sensory, the "Borrowers") owing to
Lender. Each of the undersigned acknowledges the terms of the above Amendment
and reaffirms and agrees that: its Guaranty remains in full force and effect;
nothing in such Guaranty obligates Lender to notify the undersigned of any
changes in the financial accommodations made available to the Borrowers or to
seek reaffirmations of the Guaranty; and no requirement to so notify the
undersigned or to seek reaffirmations in the future shall be implied by the
execution of this reaffirmation.
SONICBLUE INCORPORATED,
a Delaware corporation
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: CFO
--------------------------------
SENSORY SCIENCE CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: CFO
--------------------------------
CALIFORNIA AUDIO LABS, LLC,
a California limited liability company
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
---------------------------------
Title: CFO
--------------------------------
