EXHIBIT 10.28

EXECUTION VERSION

 

 

€ 80,000,000

CREDIT AGREEMENT

Dated as of June 17, 2009

between

NOVELLUS SYSTEMS, INC.

and

BANK OF AMERICA, N.A.

 

 

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TABLE OF CONTENTS

 

Section

      Page ARTICLE I.   DEFINITIONS AND ACCOUNTING TERMS   1

  1.01

  Defined Terms   1

  1.02

  Other Interpretive Provisions   10

  1.03

  Accounting Terms   10

  1.04

  Rounding   10

  1.05

  Exchange Rates; Currency Equivalents   11

  1.06

  Change of Currency   11

  1.07

  Times of Day   11 ARTICLE II.   THE COMMITMENT AND CREDIT EXTENSIONS   11

  2.01

  Loans   11

  2.02

  Borrowings and Continuations of Loans   11

  2.03

  Prepayments   12

  2.04

  Termination of Commitment   12

  2.05

  Repayment of Loans   12

  2.06

  Interest   12

  2.07

  Fee   13

  2.08

  Computation of Interest and Fees   13

  2.09

  Evidence of Debt   13

  2.10

  Payments Generally   13 ARTICLE III.   TAXES, YIELD PROTECTION AND ILLEGALITY
  13

  3.01

  Taxes   13

  3.02

  Illegality   14

  3.03

  Inability to Determine Eurocurrency Rate   15

  3.04

  Increased Costs; Reserves on Loans   15

  3.05

  Compensation for Losses   16

  3.06

  Requests for Compensation   16

  3.07

  Mitigation Obligations   16

  3.08

  Survival   16 ARTICLE IV.   CONDITIONS PRECEDENT TO CREDIT EXTENSIONS   16

  4.01

  Conditions of Initial Credit Extension   16

  4.02

  Conditions to all Credit Extensions   17 ARTICLE V.   REPRESENTATIONS AND
WARRANTIES   18

  5.01

  Existence, Qualification and Power; Compliance with Laws   18

  5.02

  Authorization; No Contravention   18

  5.03

  Governmental Authorization; Other Consents   18

  5.04

  Binding Effect   18

  5.05

  Financial Statements; No Material Adverse Effect   18

  5.06

  Litigation   19

  5.07

  No Default   19

  5.08

  Ownership of Property   19

 

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  5.09

  Environmental Compliance   19

  5.10

  Insurance   19

  5.11

  Taxes   19

  5.12

  ERISA Compliance   19

  5.13

  Subsidiaries   19

  5.14

  Margin Regulations; Investment Company Act   20

  5.15

  Disclosure   20

  5.16

  Compliance with Laws   20

  5.17

  Intellectual Property   20

  5.18

  Security   20 ARTICLE VI.   AFFIRMATIVE COVENANTS   20

  6.01

  Financial Statements   20

  6.02

  Certificates; Other Information   21

  6.03

  Notices   21

  6.04

  [Reserved]   22

  6.05

  Preservation of Existence, Etc   22

  6.06

  Maintenance of Properties   22

  6.07

  Maintenance of Insurance   22

  6.08

  Compliance with Laws   22

  6.09

  Books and Records   22

  6.10

  Inspection Rights   22

  6.11

  Use of Proceeds   22

  6.12

  Collateral Records   22

  6.13

  Security Interests   23 ARTICLE VII.   NEGATIVE COVENANTS   23

  7.01

  Liens on Collateral   23

  7.02

  [Reserved]   23

  7.03

  Fundamental Changes   23

  7.04

  Change in Nature of Business   23

  7.05

  Transactions with Affiliates   23

  7.06

  Use of Proceeds   23

  7.07

  Financial Covenant   24 ARTICLE VIII.   EVENTS OF DEFAULT AND REMEDIES   24

  8.01

  Events of Default   24

  8.02

  Remedies Upon Event of Default   25

  8.03

  Application of Funds   25 ARTICLE IX.   [RESERVED]   25 ARTICLE X.  
MISCELLANEOUS   25

  10.01

  Amendments; Etc   25

  10.02

  Notices and Other Communications; Facsimile Copies   25

  10.03

  No Waiver; Cumulative Remedies   26

  10.04

  Expenses; Indemnity; Damage Waiver   26

 

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  10.05

  Payments Set Aside   27

  10.06

  Successors and Assigns   27

  10.07

  Treatment of Certain Information; Confidentiality   28

  10.08

  Right of Setoff   29

  10.09

  Interest Rate Limitation   29

  10.10

  Counterparts; Integration; Effectiveness   29

  10.11

  Survival of Representations and Warranties   29

  10.12

  Severability   29

  10.13

  Governing Law; Jurisdiction; Etc   30

  10.14

  Waiver of Jury Trial   30

  10.15

  California Judicial Reference   31

  10.16

  Judgment Currency   31

  10.17

  USA Patriot Act Notice   31

SCHEDULES

 

1.01(a)   Approved Collateral 5.05   Supplement to Interim Financial Statements
5.06   Litigation 5.09   Environmental Matters 5.13   Subsidiaries 10.02  
Notice Addresses and Lending Office

EXHIBITS

Form of

 

A   Loan Notice B   Compliance Certificate C   Opinion Matters D   Borrowing
Base Certificate

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) dated as of June 17, 2009 by and between
Novellus Systems, Inc., a California corporation (the “Borrower”, or the
“Company”), and Bank of America, N.A. (the “Lender”).

The Borrower has requested that the Lender provide a term loan credit facility,
and the Lender is willing to do so on the terms and conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

“Agreement” means this Credit Agreement.

“Applicable Rate” means 0.75% per annum.

“Applicable Time” means, with respect to any borrowings and payments in Euros,
the local time in the place of settlement for Euros as may be determined by the
Lender to be necessary for timely settlement on the relevant date in accordance
with normal banking procedures in the place of payment.

“Approved Collateral” means (i) Cash Collateral, and (ii) other Collateral of
the type(s) shown in Schedule 1.01(a) hereto, provided such other Collateral
shall be maintained either in an investment account with Bank of America, or
with one or more Affiliates of Bank of America, or with not more than one
non-Affiliate of Bank of America.

“Approved Fund” has the meaning specified in Section 10.06(f).

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

“Audited Financial Statements” means the audited consolidated balance sheet of
the Company and its Subsidiaries for the fiscal year ended December 31, 2008,
and the related consolidated statements of income and cash flows for such fiscal
year of the Company and its Subsidiaries, including the notes thereto.

“Bank of America” means Bank of America, N.A.

“Bankruptcy Code” means the U.S. Bankruptcy Code (11 U.S.C. § 101, et seq.).

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrowing” means a borrowing consisting of simultaneous Loans to the Borrower
and having the same Interest Period made by the Lender pursuant to Section 2.01.

“Borrowing Base Certificate” means a certificate made by the Company in favor of
the Lender, substantially in the form of Exhibit D.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state or country where the Lending Office is located and, if such
day relates to any interest rate settings as to a Loan, any fundings,
disbursements, settlements and payments in Euro in respect of any such Loan, or
any other dealings in Euro to be carried out pursuant to this Agreement in
respect of any such Loan, means a TARGET Day.

 

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“Cash Collateral” means time and demand deposit account balances maintained by
the Company at a Bank of America branch.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the equity securities of the Company entitled to
vote for members of the board of directors or equivalent governing body of the
Company on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right);

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of the Company cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

(c) any Person or two or more Persons acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Company, or control over the equity securities of
the Company entitled to vote for members of the board of directors or equivalent
governing body of the Company on a fully-diluted basis (and taking into account
all such securities that such Person or group has the right to acquire pursuant
to any option right) representing 35% or more of the combined voting power of
such securities.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived by the Lender.

“Code” means the Internal Revenue Code of 1986.

“Collateral” shall mean any and all assets and rights and interests in or to
property of the Borrower, whether real or personal, tangible or intangible, in
which a Lien is granted or purported to be granted pursuant to the Collateral
Documents.

“Collateral Documents” means the Security Agreement, together with all other
agreements, instruments and documents now or hereafter executed and delivered in
connection with this Agreement pursuant to which Liens are granted or purposed
to be granted to Lender in Collateral securing all or part of the Obligations,
including control agreements, each in form and substance satisfactory to Lender.

“Collateral Value” means, with respect to each type of Approved Collateral, the
amount determined by Lender at any given time, as follows:

(a) If the Collateral is a mutual fund, the Collateral Value shall be determined
by the Lender by multiplying (i) the most recent per share net asset value of
such mutual fund obtained from the Wall Street Journal or Barron’s, times
(ii) the number of shares of such mutual fund held by the Lender as Collateral.
In the event that such net asset value is not available in the Wall Street
Journal or Barron’s, the Collateral Value shall be the value quoted to the
Lender by a reputable brokerage firm selected by the Lender.

(b) If the Collateral is corporate bonds, the Collateral Value shall be
determined by the Lender from the most recent closing price for such bonds
obtained from the Wall Street Journal. If such closing price is not available in
the Wall Street Journal, the Collateral Value shall be the value quoted to the
Lender by a reputable brokerage firm selected by the Lender.

 

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(c) If the Collateral is government or agency obligations or bonds, the
Collateral Value shall be determined by the Lender from the most recent closing
bid price for such bonds obtained from the Wall Street Journal. If such closing
bid price is not available in the Wall Street Journal, the Collateral Value
shall be the value quoted to the Lender by a reputable brokerage firm selected
by the Lender.

(d) If the Collateral is Cash Collateral, the Collateral Value shall be the
stated balance of the applicable deposit account.

(e) For all other Collateral, the Collateral Value shall be determined by the
Lender in its sole discretion.

“Commitment” means the obligation of the Lender to make Loans hereunder on the
Closing Date in an aggregate principal amount not to exceed EUR80,000,000.

“Company” has the meaning specified in the introductory paragraph hereto.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit B.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Credit Extension” means a borrowing of a Loan, or a continuation of an Interest
Period in respect of a Loan.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means (a) when used with respect to a Loan, an interest rate
equal to the interest rate (including any Applicable Rate) otherwise applicable
to such Loan plus 2% per annum, and (b) when used with respect to any other
Obligations, a rate equal to the Prime Rate plus 2% per annum.

“Dispose” has the meaning specified in Section 7.03.

“Dollar” and “$” mean lawful money of the United States.

“Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in Euros, the equivalent amount thereof in Dollars as determined by
the Lender at such time on the basis of the Spot Rate (determined in respect of
the most recent Revaluation Date) for the purchase of Dollars with Euros.

“Eligible Assignee” has the meaning specified in Section 10.06(f).

“EMU” means the economic and monetary union in accordance with the Treaty of
Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of
1992 and the Amsterdam Treaty of 1998.

“EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.

“Environmental Laws” means any and all applicable Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
restrictions by, from or with any Governmental Authority relating to pollution
and the protection of the environment or the release of any Hazardous Materials
into the environment, including those related to hazardous substances or wastes,
air emissions and discharges to waste or public systems.

 

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“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract or agreement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“Euro” and “EUR” mean the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation.

“Euro Equivalent” means, at any time, with respect to any amount denominated in
Dollars, the equivalent amount thereof in Euros as determined by the Lender at
such time on the basis of the Spot Rate (determined in respect of the most
recent Revaluation Date) for the purchase of Euros with Dollars.

“Eurocurrency Rate” means, for any Interest Period with respect to a Loan, the
rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Lender from time to time)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for deposits in the relevant currency (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period. If such rate is not available at such time for any reason,
then the “Eurocurrency Rate” for such Interest Period shall be the rate per
annum determined by the Lender to be the rate at which deposits in the relevant
currency for delivery on the first day of such Interest Period in Same Day Funds
in the approximate amount of the Loan being made or continued and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch (or other Bank of America branch or Affiliate) to major banks in the
London or other offshore interbank market for such currency at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Taxes” means, with respect to the Lender or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
(a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes),
by the jurisdiction (or any political subdivision thereof) under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of the Lender, in which its applicable Lending Office is
located, (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which the Borrower is located,
and (c) any backup withholding tax that is required by the Code to be withheld
from amounts payable to Lender if it has failed to comply with clause (A) of
Section 3.01(e)(ii).

 

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“Existing Credit Agreement” means that certain Credit Agreement, dated as of
June 25, 2004, among the Company, certain of its Subsidiaries, the lenders from
time to time party thereto and JPMorgan Chase Bank, as administrative agent, as
the same may be amended, restated, supplemented or otherwise modified.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fund” has the meaning specified in Section 10.06(f).

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, friable asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, and infectious or medical
wastes.

“Inactive Subsidiary” means, at any time of determination, any Subsidiary that
(a) has assets of less than $100,000 and (b) conducts no ongoing business
activity.

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than 60 days after the date
on which such trade account payable was created);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) capital leases and Synthetic Lease Obligations;

 

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(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07(b).

“Intellectual Property” means, collectively, all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including copyrights,
copyright licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.

“Interest Payment Date” means, as to any Loan, the last day of each Interest
Period applicable to such Loan and the Maturity Date; provided, however, that if
any Interest Period for a Loan exceeds three months, the respective dates that
fall every three months after the beginning of such Interest Period shall also
be Interest Payment Dates.

“Interest Period” means, as to each Loan, the period commencing on the date such
Loan is disbursed or continued as a Loan and ending on the date one, two, three
or six months thereafter, as selected by Borrower in its Loan Notice; provided
that:

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

“IRS” means the United States Internal Revenue Service.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lender” has the meaning specified in the introductory paragraph hereto.

“Lending Office” means the office or offices of the Lender described as such on
Schedule 10.02, or such other office or offices as the Lender may from time to
time notify the Borrower.

“License and Manufacturing Transactions” means those transactions entered into
pursuant to agreements in place on or prior to the Closing Date (and any
amendments or modifications thereto) among the Borrower and/or its Subsidiaries,
entered into on an arms’ length basis, related to the licensing of intellectual
property, manufacturing of products or provision of administration services.

 

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“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” has the meaning specified in Section 2.01.

“Loan Documents” means this Agreement, the Collateral Documents, and each
certificate delivered by the Borrower hereunder or thereunder.

“Loan Notice” means a notice of (a) a borrowing of a Loan, or (b) a continuation
of a Loan, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A.

“Maintenance Borrowing Base” means, as of any date of determination, the amount
determined by multiplying the applicable Collateral Value by the Maintenance
Borrowing Base Percentage shown for that type of Approved Collateral in the
table on Schedule 1.01(a), and dividing the result by 1.15. The Maintenance
Borrowing Base shall be calculated separately for each type of Collateral. Where
there is more than one type of Approved Collateral, the Maintenance Borrowing
Base shall be the sum of the amounts determined by such calculations.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the business, properties, liabilities (actual or
contingent), or financial condition of the Company and its Subsidiaries taken as
a whole; (b) a material impairment of the ability of the Borrower to perform its
obligations under any Loan Document to which it is a party; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against the Borrower of any Loan Document to which it is a party or upon the
perfection or priority of any material Lien under any Collateral Document.

“Material Subsidiary” means, on any date, (a) Peter Wolters GmbH, and (b) any
Subsidiary that is (i) organized under the laws of any state of the United
States or the District of Columbia and (ii) that, for the four fiscal quarter
period most recently ended, based upon the then most recently delivered
financial statements under this Agreement, has (A) gross revenues constituting
ten percent or more of the consolidated gross revenues of the Company and its
Subsidiaries for such period, as determined in accordance with GAAP, or
(B) total assets constituting ten percent or more of the consolidated assets of
the Company and its Subsidiaries for such period, as determined in accordance
with GAAP.

“Maturity Date” means June 22, 2012.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“NY Process Agent” has the meaning specified in Section 10.13(e).

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, the Borrower arising under any Loan Document or
otherwise with respect to any Loan, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against the Borrower or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

 

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“Outstanding Amount” means, as of any date, with respect to Loans made to the
Borrower, the aggregate outstanding principal amount thereof, determined in
accordance with Section 1.05, after giving effect to any borrowings and
prepayments or repayments of Loans by the Borrower occurring on such date.

“Participant” has the meaning specified in Section 10.06(c).

“Participating Member State” means each state so described in any EMU
Legislation.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company or
any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

“Permitted Liens” has the meaning specified in Section 7.01.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Company or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

“Prime Rate” means the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate.” The “prime
rate” is a rate set by Bank of America based upon various factors including Bank
of America’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.

“Registered Public Accounting Firm” has the meaning specified in the Securities
Laws and shall be independent of the Company as prescribed by the Securities
Laws.

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30-day notice period has been waived.

“Request for Credit Extension” means with respect to a Borrowing or continuation
of a Loan, a Loan Notice.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, vice president corporate finance, treasurer or assistant
treasurer of the Borrower, and, in addition, solely for purposes of delivery of
Requests for Credit Extension and any Borrowing Base Certificate relating
thereto, the Investment Manager and the Senior Treasury Manager, acting
together, of the Borrower. Any document delivered hereunder that is signed by a
Responsible Officer of the Borrower shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of the Borrower and such Responsible Officer shall be conclusively presumed
to have acted on behalf of the Borrower.

“Revaluation Date” means each of the following: (i) each date of a Borrowing of
a Loan by the Borrower, (ii) each date of a continuation of a Loan by the
Borrower pursuant to Section 2.02, (iii) the last Business Day of each calendar
month, and (iv) such additional dates as the Lender shall determine.

“Same Day Funds” means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in Euros, same day or other funds as may be determined by the Lender to
be customary in the place of disbursement or payment for the settlement of
international banking transactions in Euros.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

 

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“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the Public Company Accounting Oversight Board, as each of the foregoing may
be amended and in effect on any applicable date hereunder.

“Security Agreement” means that certain Security and Pledge Agreement, dated as
of the date hereof, made by the Company in favor of Lender, in form and
substance satisfactory to the Lender.

“Spot Rate” for a currency means the rate determined by Bank of America to be
the spot rate for the purchase by such Person of such currency with another
currency through its principal foreign exchange trading office at approximately
11:00 a.m. on the date two Business Days prior to the date as of which the
foreign exchange computation is made; provided that Bank of America may obtain
such spot rate from another financial institution designated by Bank of America
if the Person acting in such capacity does not have as of the date of
determination a spot buying rate for any such currency.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Company.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Lender or any Affiliate of
the Lender).

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, including a
Japanese operating lease, or (b) an agreement for the use or possession of
property (including sale and leaseback transactions), in each case, creating
obligations that do not appear on the balance sheet of such Person but which,
upon the application of any Debtor Relief Laws to such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).

“TARGET Day” means any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by the
Lender to be a suitable replacement) is open for the settlement of payments in
Euros.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Threshold Amount” means $25,000,000.

“Total Outstandings” means, as of any date, the aggregate Outstanding Amount of
all Loans.

 

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“UCC” has the meaning set forth in Section 4.01(a)(ii)(A).

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

“United States” and “U.S.” mean the United States of America.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP as in
effect from time to time, applied in a manner consistent with that used in
preparing the Audited Financial Statements, except as otherwise specifically
prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Company or the Lender shall so request, the Lender and
the Company shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Lender), provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Company shall provide to the Lender financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.

(c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of the Company and its Subsidiaries or to the
determination of any amount for the Company and its Subsidiaries on a
consolidated basis or any similar reference shall, in each case, be deemed to
include each variable interest entity that the Company is required to
consolidate pursuant to FASB Interpretation No. 46 – Consolidation of Variable
Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such
variable interest entity were a Subsidiary as defined herein.

1.04 Rounding. Any financial ratios required to be maintained by the Company
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

 

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1.05 Exchange Rates; Currency Equivalents.

(a) The Lender shall determine the Spot Rates as of each Revaluation Date to be
used for calculating Dollar Equivalent amounts of Credit Extensions and
Outstanding Amounts denominated in Euros. Such Spot Rates shall become effective
as of such Revaluation Date and shall be the Spot Rates employed in converting
any amounts between the applicable currencies until the next Revaluation Date to
occur. Except for purposes of financial statements delivered by the Borrower
hereunder or calculating financial covenants hereunder or except as otherwise
provided herein, the applicable amount of any currency (other than Dollars) for
purposes of the Loan Documents shall be such Dollar Equivalent amount as so
determined by the Lender.

(b) Wherever in this Agreement in connection with a Borrowing, continuation or
prepayment of a Loan, an amount, such as a required minimum or multiple amount,
is expressed in Dollars, but such Borrowing, or Loan is denominated in Euros,
such amount shall be the Euro Equivalent of such Dollar amount (rounded to the
nearest unit of Euros, with 0.5 of a unit being rounded upward), as determined
by the Lender.

1.06 Change of Currency.

(a) Each obligation of the Borrower to make a payment denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the date hereof shall be redenominated into
Euro at the time of such adoption (in accordance with the EMU Legislation). If,
in relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London interbank market for
the basis of accrual of interest in respect of the Euro, such expressed basis
shall be replaced by such convention or practice with effect from the date on
which such member state adopts the Euro as its lawful currency; provided that if
any Borrowing in the currency of such member state is outstanding immediately
prior to such date, such replacement shall take effect, with respect to such
Borrowing, at the end of the then current Interest Period.

(b) Each provision of this Agreement shall be subject to such reasonable changes
of construction as the Lender may from time to time specify to be appropriate to
reflect the adoption of the Euro by any member state of the European Union and
any relevant market conventions or practices relating to the Euro.

1.07 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Pacific time (daylight or standard, as applicable).

ARTICLE II.

THE COMMITMENT AND CREDIT EXTENSIONS

2.01 Loans. Subject to the terms and conditions set forth herein, the Lender
agrees to make loans, each of which shall bear interest at a rate based on the
Eurocurrency Rate, denominated in Euros (the “Loans”, each, a “Loan”), to the
Borrower, on the Closing Date; provided, however, that after giving effect to
any Borrowing, the Total Outstandings shall not exceed the Commitment or the
Maintenance Borrowing Base.

2.02 Borrowings and Continuations of Loans.

(a) Each Borrowing, and each continuation of Loans shall be made upon Borrower’s
irrevocable notice to Lender, which may be given by telephone. Each telephonic
notice by Borrower pursuant to this Section 2.02(a) must be confirmed promptly
by delivery to Lender of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of Borrower. Each such notice must be received
by Lender not later than 11:00 a.m. (i) three Business Days prior to the
requested date of any Borrowing or continuation of Loans. Each Borrowing or
continuation of Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Each Loan Notice (whether telephonic
or written) shall specify (i) whether the Borrower is requesting a Borrowing or
a continuation of Loans, (ii) the requested date of the Borrowing or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of the Loans to be borrowed or continued, and (iv) the duration
of the Interest Period with respect thereto. If Borrower fails to give a timely
notice requesting continuation, then the applicable Loans shall be continued
with one month Interest Periods. If Borrower requests a borrowing or
continuation of Loans in any such Loan Notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month.

(b) Following receipt of a Loan Notice, upon satisfaction of the applicable
conditions set forth in Section 4.02 (and, if such Borrowing is the initial
Credit Extension, Section 4.01), Lender shall make funds available to Borrower
either by (i) crediting the account of Borrower on the books of Bank of America
with the amount of such funds or (ii) wire transfer of such funds, in each case
in accordance with instructions provided to (and reasonably acceptable to)
Lender by Borrower.

 

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(c) Except as otherwise provided herein, Loans may be continued only on the last
day of an Interest Period for such Loans. During the existence of a Default, no
Loans may be continued for Interest Periods exceeding one month without the
consent of the Lender.

(d) Upon request of the Borrower, the Lender shall promptly notify the Borrower
of the interest rate applicable to any Interest Period for Loans upon
determination of such interest rate.

(e) After giving effect to all Borrowings and all continuations of Loans, there
shall not be more than two Interest Periods in effect with respect to Loans.

2.03 Prepayments.

(a) Borrower may, upon notice to the Lender, at any time or from time to time
voluntarily prepay Loans in whole or in part without premium or penalty;
provided that (i) such notice must be received by Lender not later than 11:00
a.m. three Business Days prior to any date of prepayment of Loans; and (ii) any
prepayment of Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof or, if less, the entire principal
amount thereof then outstanding (or, if such prepayment is made in connection
with a revaluation pursuant to Section 2.03(b), the amount to be so prepaid).
Each such notice shall specify the date and amount of such prepayment and, the
Interest Period(s) of such Loans. If such notice is given by Borrower, Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein. Any prepayment of a Loan shall
be accompanied by all accrued interest on the amount prepaid, together with any
additional amounts required pursuant to Section 3.05.

(b) If on any Revaluation Date the Total Outstandings at such time exceed 105%
of the Maintenance Borrowing Base then in effect, then, within three Business
Days, the Company shall pledge additional Cash Collateral or shall prepay Loans
in an aggregate amount sufficient to reduce such Outstanding Amount as of such
date of pledge or payment to an amount not to exceed 100% of the Maintenance
Borrowing Base then in effect.

(c) Any prepayment of Loans shall be accompanied by all accrued interest on the
amount repaid, together with any additional amounts required pursuant to
Section 3.05.

2.04 Termination of Commitment. The Commitment will terminate immediately and
automatically upon the extension of the Loans on the Closing Date.

2.05 Repayment of Loans. The Borrower shall repay to the Lender on the Maturity
Date the aggregate principal amount of Loans outstanding on such date.

2.06 Interest.

(a) Subject to the provisions of subsection (b) below, each Loan shall bear
interest on the outstanding principal amount thereof for each Interest Period at
a rate per annum equal to the Eurocurrency Rate for such Interest Period plus
the Applicable Rate.

(b) (i) If any amount of principal of any Loan is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by the Borrower
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then
such amount shall thereafter bear interest at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

(iii) While any Event of Default exists, the Borrower shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable on demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

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2.07 Fee. The Borrower shall pay to the Lender an up-front fee of $100,000, such
fee to be paid on the Closing Date, and shall be deemed fully earned when paid
and shall not be refundable.

2.08 Computation of Interest and Fees. All computations of interest based upon
the Prime Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed. All other computations of interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.06(a),
bear interest for one day. Each determination by the Lender of an interest rate
or fee hereunder shall be conclusive and binding for all purposes, absent
manifest error.

2.09 Evidence of Debt. The Credit Extensions made by the Lender shall be
evidenced by one or more accounts or records maintained by the Lender in the
ordinary course of business. The accounts or records maintained by the Lender
shall be conclusive absent manifest error of the amount of the Credit Extensions
made by the Lender to the Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations.

2.10 Payments Generally.

(a) All payments to be made by Borrower shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein and except with respect to principal of and
interest on Loans denominated in Euros, all payments by the Borrower hereunder
shall be made to the Lender, at the applicable Lending Office in Dollars and in
Same Day Funds not later than 2:00 p.m. on the date specified herein. Except as
otherwise expressly provided herein, all payments by Borrower hereunder with
respect to principal and interest on Loans denominated in Euros shall be made to
the Lender, at the applicable Lending Office in Euros and in Same Day Funds not
later than the Applicable Time specified by the Lender on the dates specified
herein. Without limiting the generality of the foregoing, the Lender may require
that any payments due under this Agreement be made in the United States. If, for
any reason, Borrower is prohibited by any Law from making any required payment
hereunder in Euros, Borrower shall make such payment in Dollars in the Dollar
Equivalent of the Euro payment amount. All payments received by the Lender
(i) after 2:00 p.m., in the case of payments in Dollars, or (ii) after the
Applicable Time specified by the Lender in the case of payments in Euros, shall
in each case be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.

(b) If any payment to be made by the Borrower shall come due on a day other than
a Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be.

(c) Nothing herein shall be deemed to obligate the Lender to obtain the funds
for any Loan in any particular place or manner or to constitute a representation
by the Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes. (i) Any and all payments by the Borrower to or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall to
the extent permitted by applicable Laws be made free and clear of and without
reduction or withholding for any Taxes. If, however, applicable Laws require the
Borrower or Lender to withhold or deduct any Tax, such Tax shall be withheld or
deducted in accordance with such Laws as determined by the Borrower or Lender,
as the case may be, upon the basis of the information and documentation to be
delivered pursuant to subsection (e) below.

(ii) If the Borrower or Lender shall be required by the Code to withhold or
deduct any Taxes, including both United States Federal backup withholding and
withholding taxes, from any payment, then (A) Lender shall withhold or make such
deductions as are determined by Lender to be required based upon the information
and documentation it has received pursuant to subsection (e) below, (B) Lender
shall timely pay the full amount withheld or deducted to the relevant
Governmental Authority in accordance with the Code, and (C) to the extent that
the withholding or deduction is made on account of Indemnified Taxes or Other
Taxes, the sum payable by the Borrower shall be increased as necessary so that
after any required withholding or the making of all required deductions
(including deductions applicable to additional sums payable under this Section)
Lender receives an amount equal to the sum it would have received had no such
withholding or deduction been made.

 

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(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable Laws.

(c) Tax Indemnifications. (i) Without limiting the provisions of subsection
(a) or (b) above, the Borrower shall, and does hereby, indemnify Lender and
shall make payment in respect thereof within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) withheld or deducted by the Borrower or paid by Lender, and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of any such payment or liability delivered to the
Borrower by Lender, shall be conclusive absent manifest error.

(ii) Without limiting the provisions of subsection (a) or (b) above, Lender
shall, and does hereby, indemnify the Borrower, and shall make payment in
respect thereof within 10 days after demand therefor, against any and all Taxes
and any and all related losses, claims, liabilities, penalties, interest and
expenses (including the fees, charges and disbursements of any counsel for the
Borrower) incurred by or asserted against the Borrower by any Governmental
Authority as a result of the failure by Lender to deliver, or as a result of the
inaccuracy, inadequacy or deficiency of, any documentation required to be
delivered by Lender to the Borrower pursuant to subsection (e). The agreements
in this clause (ii) shall survive the termination of the Commitment and the
repayment, satisfaction or discharge of all Obligations.

(d) Evidence of Payments. Upon request by the Borrower, after any payment of
Taxes by the Borrower to a Governmental Authority as provided in this
Section 3.01, the Borrower shall deliver to Lender or Lender shall deliver to
the Borrower, as the case may be, the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of any
return required by Laws to report such payment or other evidence of such payment
reasonably satisfactory to the Borrower.

(e) Status of Lender. (i) Lender shall deliver to the Borrower, at the time or
times prescribed by applicable Laws or when reasonably requested by the
Borrower, such properly completed and executed documentation prescribed by
applicable Laws or by the taxing authorities of any jurisdiction and such other
reasonably requested information as will permit the Borrower to determine
(A) whether or not payments made hereunder or under any other Loan Document are
subject to Taxes, (B) if applicable, the required rate of withholding or
deduction, and (C) Lender’s entitlement to any available exemption from, or
reduction of, applicable Taxes in respect of all payments to be made to Lender
by the Borrower pursuant to this Agreement or otherwise to establish Lender’s
status for withholding tax purposes in the applicable jurisdiction.

(ii) Lender shall promptly (A) notify the Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction, and (B) take such steps as shall not be materially disadvantageous to
it, in the reasonable judgment of Lender, and as may be reasonably necessary
(including the redesignation of its Lending Office) to avoid any requirement of
applicable Laws of any jurisdiction that the Borrower make any withholding or
deduction for taxes from amounts payable to the Lender.

(f) Treatment of Certain Refunds. If Lender determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower have paid
additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses incurred by Lender, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided
that the Borrower, upon the request of Lender, agree to repay the amount paid
over to the Borrower (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to Lender in the event Lender is required
to repay such refund to such Governmental Authority. This subsection shall not
be construed to require Lender to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Borrower or
any other Person.

3.02 Illegality. If Lender determines that any Law has made it unlawful, or that
any Governmental Authority has asserted that it is unlawful, for Lender or its
applicable Lending Office to make, maintain or fund Loans, or to determine or
charge interest rates based upon the Eurocurrency Rate, or any Governmental
Authority has imposed material restrictions on the authority of Lender to
purchase or sell, or to take deposits of, Euros in the London interbank market,
then, on notice thereof by Lender to Borrower, any obligation of Lender to make
or continue Loans shall be suspended until Lender notifies Borrower that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, Borrower shall, upon demand from Lender prepay all Loans, either on
the last day of the Interest Period therefor, if Lender may lawfully continue to
maintain such Loans to such day, or immediately, if Lender may not lawfully
continue to maintain such Loans. Upon any such prepayment, Borrower shall also
pay accrued interest on the amount so prepaid and all amounts due under
Section 3.05 in accordance with the terms thereof due to such prepayment. The
Lender agrees to designate a different Lending Office if such designation will
avoid the need for such notice and will not, in the good faith judgment of the
Lender, otherwise be materially disadvantageous to the Lender.

 

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3.03 Inability to Determine Eurocurrency Rate.

(a) If Lender determines in connection with any request for Loans or a
continuation thereof that (a) Euro deposits are not being offered to banks in
the London interbank eurocurrency market for the applicable amount and Interest
Period of such Loans, (b) adequate and reasonable means do not exist for
determining the Eurocurrency Rate for any requested Interest Period with respect
to a proposed Loan, or (c) the Eurocurrency Rate for any requested Interest
Period with respect to a proposed Loan does not adequately and fairly reflect
the cost to Lender of funding such Loan, Lender will promptly so notify
Borrower. Thereafter, the obligation of Lender to make or maintain Loans shall
be suspended until Lender revokes such notice. Upon receipt of such notice,
Borrower may revoke any pending request for a Borrowing or continuation of
Loans.

3.04 Increased Costs; Reserves on Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, the Lender
(except any reserve requirement contemplated by Section 3.04(e);

(ii) subject the Lender to any tax of any kind whatsoever with respect to this
Agreement, or any Loan made by it, or change the basis of taxation of payments
to the Lender in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.01 and the imposition of, or any change in the rate of, any
Excluded Tax payable by the Lender); or

(iii) impose on the Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or Loans made by the Lender;

and the result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining any Loan (or of maintaining its obligation to
make any such Loan), or to reduce the amount of any sum received or receivable
by the Lender hereunder (whether of principal, interest or any other amount)
then, upon request of the Lender, the Borrower will pay to the Lender such
additional amount or amounts as will compensate the Lender for such additional
costs incurred or reduction suffered.

(b) Capital Requirements. If the Lender determines that any Change in Law
affecting the Lender or any Lending Office of the Lender or the Lender’s holding
company, if any, regarding capital requirements has or would have the effect of
reducing the rate of return on the Lender’s capital or on the capital of the
Lender’s holding company, if any, as a consequence of this Agreement, the
Commitment of the Lender or the Loans made by the Lender, to a level below that
which the Lender or the Lender’s holding company could have achieved but for
such Change in Law (taking into consideration the Lender’s policies and the
policies of the Lender’s holding company with respect to capital adequacy), then
from time to time the Borrower will pay to the Lender such additional amount or
amounts as will compensate the Lender or the Lender’s holding company for any
such reduction suffered.

(c) Certificates for Reimbursement. A certificate of the Lender setting forth
the amount or amounts necessary to compensate the Lender or its holding company,
as the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error. The
Borrower shall pay the Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of the Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of the Lender’s right to demand such compensation, provided
that the Borrower shall not be required to compensate the Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than six months prior to the date that the Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of the Lender’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the six-month period referred to above shall be
extended to include the period of retroactive effect thereof).

(e) Additional Reserve Requirements. The Borrower shall pay to the Lender,
(i) as long as the Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits,
additional interest on the unpaid principal amount of each Loan of the Borrower
equal to the actual costs of such reserves allocated to such Loan by the Lender
(as determined by the Lender in good faith, which determination shall be
conclusive), and (ii) as long as the Lender shall be required to comply with any
reserve ratio requirement or analogous requirement of any central banking or
financial regulatory authority imposed in respect of the maintenance of the
Commitment or the funding of the Loans, such additional costs (expressed as a
percentage per annum and rounded upwards, if necessary, to the nearest five
decimal places) equal to the actual costs allocated to such Commitment or Loan
of the Borrower by the Lender (as determined by the Lender in good faith, which
determination shall be conclusive), which in each case shall be due and payable
on each date on which interest is payable on such Loan, provided the

 

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Borrower shall have received at least 10 days’ prior notice (with a copy to the
Lender) of such additional interest or costs from the Lender. If Lender fails to
give notice 10 days prior to the relevant Interest Payment Date, such additional
interest or costs shall be due and payable 10 days from receipt of such notice.

3.05 Compensation for Losses. Upon demand of the Lender from time to time, the
Borrower shall promptly compensate the Lender for and hold the Lender harmless
from any loss, cost or expense incurred by it as a result of:

(a) any continuation, payment or prepayment of any Loan of the Borrower on a day
other than the last day of the Interest Period for such Loan (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise), or

(b) any failure by the Borrower (for a reason other than the failure of the
Lender to make a Loan) to prepay, borrow, or continue any Loan on the date or in
the amount notified by the Borrower;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by the
Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lender under
this Section 3.05, the Lender shall be deemed to have funded each Loan at the
Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurocurrency market for a comparable amount and for a
comparable period, whether or not such Loan was in fact so funded.

3.06 Requests for Compensation. A certificate of the Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Lender may use any reasonable
averaging and attribution methods.

3.07 Mitigation Obligations. If the Lender requests compensation under
Section 3.04, or the Borrower is required to pay any additional amount to the
Lender or any Governmental Authority for the account of the Lender pursuant to
Section 3.01, or the Lender gives a notice pursuant to Section 3.02, then the
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of the Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the
future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable, and (ii) in each case, would not subject the Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to the
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by the Lender in connection with any such designation or assignment.

3.08 Survival. The Borrower’s obligations under this Article III shall survive
termination of the Commitment and repayment of all other Obligations hereunder.

ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Initial Credit Extension. The obligation of the Lender to
make the Loans hereunder is subject to satisfaction of the following conditions
precedent:

(a) The Lender’s receipt of the following, each of which shall be originals or
telecopies (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the Borrower, each dated the
Closing Date (or, in the case of certificates of governmental officials, a
recent date before the Closing Date) and each in form and substance satisfactory
to the Lender and its legal counsel:

(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Lender and the Borrower;

(ii) executed counterparts of the Security Agreement by the Company, together
with:

(A) proper financing statements (Form UCC-1 or the equivalent) for filing under
the Uniform Commercial Code (“UCC”) in the office of the Secretary of State of
California, covering the Collateral described in the Security Agreement;

(B) copies of requests for information or copies, or equivalent reports as of a
recent date, listing all effective financing statements that name the Company as
debtor and that are filed in the jurisdiction referred to in clause (A) above
and shall be in form and substance satisfactory to the Lender; and

 

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(C) evidence that all other actions necessary or, in the reasonable opinion of
the Lender, desirable to perfect and protect the security interests purported to
be created by the Collateral Documents have been, or will be, substantially
contemporaneously with the Closing Date, taken, and the Collateral Documents
shall be in full force and effect;

(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of the Borrower as the Lender
may require evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with
this Agreement and the other Loan Documents;

(iv) such documents and certifications as the Lender may reasonably require to
evidence that the Borrower is duly organized or formed, and that the Borrower is
validly existing, in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;

(v) favorable opinion of Morrison & Foerster LLP, counsel to the Company,
addressing the matters set forth in Exhibit C and such other matters concerning
the Borrower and the Loan Documents as the Lender may reasonably request;

(vi) a certificate of a Responsible Officer of the Borrower either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by the Borrower and the validity against the
Borrower of the Loan Documents to which it is a party, and such consents,
licenses and approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required;

(vii) a certificate signed by a Responsible Officer of the Company certifying
(A) that (1) all representations and warranties of the Borrower contained in
this Agreement and each of the other Loan Documents are true and correct on and
as of such date and (2) no Default exists or would result from such proposed
Borrowing, and (B) that there has been no event or circumstance since the date
of the Audited Financial Statements that has had or could be reasonably expected
to have, either individually or in the aggregate, a Material Adverse Effect;

(viii) evidence that the Existing Credit Agreement has been or concurrently with
the Closing Date is being terminated and all Liens securing obligations under
the Existing Credit Agreement have been or concurrently with the Closing Date
are being released;

(ix) a Borrowing Base Certificate signed by a Responsible Officer of the
Company, certifying the Maintenance Borrowing Base as of the Closing Date;

(x) satisfactory evidence of the acceptance by the NY Process Agent of its
appointment as agent for service of process by the Borrower; and

(xi) such other assurances, certificates, documents, consents or opinions as the
Lender reasonably may require.

(b) Any fees required to be paid on or before the Closing Date shall have been
paid.

(c) The Borrower shall have paid all fees, charges and disbursements of counsel
to the Lender to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of such fees, charges and disbursements as shall constitute
its reasonable estimate of such fees, charges and disbursements incurred or to
be incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrower
and the Lender).

(d) The Closing Date shall have occurred on or before June 22, 2009.

4.02 Conditions to all Credit Extensions. The obligation of the Lender to honor
any Request for Credit Extension is subject to the following conditions
precedent:

(a) After giving effect to the proposed Credit Extension, the Total Outstandings
shall not exceed the Maintenance Borrowing Base.

(b) The Lender shall have received a Request for Credit Extension in accordance
with the requirements hereof.

Each Request for Credit Extension submitted by the Borrower shall be deemed to
be a representation and warranty that the condition specified in Section 4.02(a)
has been satisfied on and as of the date of the applicable Credit Extension. In
addition, each Request for Credit Extension submitted by the Borrower shall be
deemed to be a representation and warranty by the Borrower that all
representations and warranties of the Borrower contained in Article V and any
other Loan Document are true and correct on and as of the date of such borrowing
or continuation of any Loan, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date.

 

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ARTICLE V.

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender that:

5.01 Existence, Qualification and Power; Compliance with Laws. The Borrower and
each Material Subsidiary (a) is duly organized or formed, validly existing and
(to the extent that such a concept is applicable in such jurisdiction) in good
standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own or
lease its assets and carry on its business and (ii) execute, deliver and perform
its obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i),
(c) or (d), to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by
the Borrower of each Loan Document to which such Person is party, have been duly
authorized by all necessary corporate or other organizational action, and do not
and will not (a) contravene the terms of any of such Person’s Organization
Documents; (b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, or require any payment to be made under (i) any
material Contractual Obligation to which such Person is a party or materially
and directly affecting such Person or the properties of such Person or any of
its Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law, except to the extent that such
violation could not reasonably be expected to have a Material Adverse Effect.

5.03 Governmental Authorization; Other Consents. Each approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person that is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower of this Agreement or any other Loan Document has been
obtained or made.

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by the
Borrower. This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of the
Borrower, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP,
except as otherwise expressly noted therein; (ii) fairly present the financial
condition of the Company and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Company and its
Subsidiaries as of the date thereof, including liabilities for taxes, material
commitments and Indebtedness.

(b) The unaudited consolidated balance sheet of the Company and its Subsidiaries
dated March 28, 2009 and the related consolidated statements of income and cash
flows for the fiscal quarter ended on that date (i) were prepared in accordance
with GAAP, except as otherwise expressly noted therein, and (ii) fairly present
the financial condition of the Company and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby, subject,
in the case of clauses (i) and (ii), to the absence of footnotes and to normal
year-end audit adjustments. Schedule 5.05 sets forth all material indebtedness
and other liabilities, direct or contingent, of the Company and its consolidated
Subsidiaries as of the date of such financial statements, including liabilities
for taxes, material commitments and Indebtedness.

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

 

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5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Company after reasonable inquiry,
threatened, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Company or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) except as specifically disclosed in Schedule 5.06, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, and there has been no material adverse change in the
status, or financial effect on the Company or any Subsidiary thereof, of the
matters described on Schedule 5.06.

5.07 No Default. Neither the Company nor any Subsidiary is in default under or
with respect to any Contractual Obligation that could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Loan Document.

5.08 Ownership of Property. Each of the Company and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

5.09 Environmental Compliance. To the extent required by standard industry
practice, the Company and its Subsidiaries conduct in the ordinary course of
business a review of the effect of existing Environmental Laws and claims
alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties, and
as a result thereof the Company has reasonably determined that, except as
specifically disclosed in Schedule 5.09, such Environmental Laws and written
claims would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

5.10 Insurance. The properties of the Company and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Company, in such amounts (after giving effect to any self-insurance compatible
with the following standards), with such deductibles and covering such risks as
are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or the applicable Subsidiary
operates.

5.11 Taxes. The Company and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Company or any Subsidiary that would, if made, have a
Material Adverse Effect.

5.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other applicable Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination or opinion letter from the IRS and, to the best
knowledge of the Company, nothing has occurred which could reasonably be
expected to adversely affect the qualified status of any such Plan. The Company
and each ERISA Affiliate have made all required contributions to each Plan
subject to Section 412 of the Code, and no application for a funding waiver or
an extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.

(b) There are no pending or, to the best knowledge of the Company, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Company nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Company
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

5.13 Subsidiaries. As of the Closing Date, (i) the Company has no Subsidiaries
other than those specifically disclosed in Schedule 5.13, and (ii) all of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or one or more of its
Subsidiaries, in the amounts specified on Schedule 5.13 free and clear of all
Liens.

 

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5.14 Margin Regulations; Investment Company Act.

(a) The Company is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. Following the application of
the proceeds of each Borrowing, not more than 25% of the value of the assets of
the Company subject to the provisions of Section 7.01 or subject to any
restriction contained in any agreement or instrument between the Company and the
Lender or any Affiliate of the Lender relating to Indebtedness and within the
scope of Section 8.01(e) will be margin stock.

(b) None of the Company, any Person Controlling the Company, or any Subsidiary
is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.

5.15 Disclosure. The Company has disclosed to the Lender all agreements,
instruments and corporate or other restrictions to which they or any of its
Subsidiaries is subject, and all other matters known to it, that, in each case,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of the
Company to the Lender in connection with the transactions contemplated hereby
and the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Company represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

5.16 Compliance with Laws. Each of the Company and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

5.17 Intellectual Property. Except as disclosed from time to time in any filing
made by the Company with the SEC, the Company and its Subsidiaries own, or are
licensed to use, all Intellectual Property necessary for the conduct of their
business as currently conducted. No material claim has been asserted and is
pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
the Company know of any valid basis for any such claim.

5.18 Security. Upon satisfaction of the conditions set forth in Section 4.01 and
in any event by no later than two Business Days after the Closing Date, the
Lender has a duly perfected Lien on all Approved Collateral. The Collateral is
subject to no Liens, other than Liens permitted by Section 7.01.

ARTICLE VI.

AFFIRMATIVE COVENANTS

So long as the Commitment shall be in effect, or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied:

6.01 Financial Statements. The Company shall deliver to the Lender, in form and
detail satisfactory to the Lender:

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of the Company, a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, audited and accompanied
by a report and opinion of a Registered Public Accounting Firm of nationally
recognized standing, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and applicable Securities Laws and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit; and

 

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(b) as soon as available, but in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of income and cash
flows for such fiscal quarter and for the portion of the Company’s fiscal year
then ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, certified by a
Responsible Officer of the Company as fairly presenting the financial condition,
results of operations, shareholders’ equity and cash flows of the Company and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.

As to any information contained in materials furnished pursuant to
Section 6.02(c), the Company shall not be separately required to furnish such
information under Section 6.01(a) or (b) above, but the foregoing shall not be
in derogation of the obligation of the Company to furnish the information and
materials described in Section 6.01(a) or (b) above at the times specified
therein.

6.02 Certificates; Other Information. The Company shall deliver to the Lender,
in form and detail satisfactory to the Lender:

(a) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b) a duly completed Compliance Certificate signed by a
Responsible Officer of the Company;

(b) promptly after any request by the Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Company by
independent accountants in connection with the accounts or books of the Company
or any Subsidiary, or any audit of any of them;

(c) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of the Company, and copies of all annual, regular, periodic and special reports
and registration statements which the Company may file or be required to file
with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
and not otherwise required to be delivered to the Lender pursuant hereto;

(d) promptly, and in any event within five Business Days after receipt thereof
by the Company or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
the Company or any Subsidiary thereof; and

(e) promptly, such additional information regarding the business, financial or
corporate affairs of the Company or any Subsidiary, or compliance with the terms
of the Loan Documents, as the Lender may from time to time reasonably request.

Notwithstanding the provisions of Section 10.02, documents required to be
delivered pursuant to Section 6.01(a) or (b) or Section 6.02(c) (to the extent
any such documents are included in materials otherwise filed with the SEC) may
be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Company posts such documents, or provides
a link thereto on the Company’s website on the Internet at the website address
listed on Schedule 10.02; or (ii) on which such documents are posted on the
Company’s behalf on an Internet or intranet website, if any, to which the Lender
has access (whether a commercial, third-party website); provided that: (i) the
Company shall deliver paper copies of such documents to the Lender until a
written request to cease delivering paper copies is given by the Lender and
(ii) the Company shall notify the Lender (by telecopier or electronic mail) of
the posting of any such documents and provide to the Lender by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Company shall be required to
provide paper copies of the Compliance Certificates required by Section 6.02(a)
to the Lender. Except for such Compliance Certificates, the Lender shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Company with any such request for delivery, and the Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

6.03 Notices. The Company shall promptly notify the Lender:

(a) of the occurrence of any Default;

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including any such matter consisting of (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Company or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Company or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary, including pursuant to any applicable Environmental Laws;

(c) of the occurrence of any ERISA Event; and

 

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(d) of any material change in accounting policies or financial reporting
practices by the Company or any Subsidiary.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

6.04 [Reserved]

6.05 Preservation of Existence, Etc. Each of the Company and its Subsidiaries
other than Inactive Subsidiaries shall (a) preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization, except (i) in a transaction permitted by
Section 7.03, or, (ii) other than in respect of the Company or any Material
Subsidiary, to the extent that any such failure to preserve, renew or maintain
could not reasonably be expected to have a Material Adverse Effect; (b) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary in the normal conduct of its business, except to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect (provided, for the
avoidance of doubt, the Company may sell or transfer its rights in, to and under
any of its registered patents, trademarks, trade names and service marks to any
of its wholly-owned Subsidiaries).

6.06 Maintenance of Properties. Each of the Company and Material Subsidiaries
shall maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted.

6.07 Maintenance of Insurance. Each of the Company and its Subsidiaries other
than Inactive Subsidiaries shall maintain with financially sound and reputable
insurance companies not Affiliates of the Company, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts (after giving effect to any self-insurance compatible with the
following standards) as are customarily carried under similar circumstances by
such other Persons.

6.08 Compliance with Laws. Each of the Company and its Subsidiaries other than
Inactive Subsidiaries shall comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or
(b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.

6.09 Books and Records. Each of the Company and its Subsidiaries other than
Inactive Subsidiaries shall (a) maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Company or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Company or such Subsidiary, as the case may be.

6.10 Inspection Rights. Each of the Company and its Subsidiaries other than
Inactive Subsidiaries shall permit representatives and independent contractors
of the Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of the Borrower
and at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that (i) so long as no Event of Default exists, the Borrower shall be
responsible for the Lender’s costs and expenses associated with no more than one
such visit and inspection per year, and (ii) when an Event of Default exists the
Lender (or any of its representatives or independent contractors) may do any of
the foregoing at the expense of the Borrower at any time, and from time to time,
during normal business hours and without advance notice.

6.11 Use of Proceeds. The Borrower shall use the proceeds of the Credit
Extensions solely to refinance the Existing Credit Agreement and to pay costs
and expenses ancillary thereto or hereto.

6.12 Collateral Records. The Company shall execute and deliver promptly to
Lender, from time to time, solely for Lender’s convenience in maintaining a
record of the Collateral, such written statements and schedules as Lender may
reasonably require designating, identifying or describing the Collateral. The
failure by Company, however, to promptly give Lender such statements or
schedules shall not affect, diminish, modify or otherwise limit the Liens on the
Collateral granted pursuant to the Collateral Documents.

 

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6.13 Security Interests. The Company shall (a) defend the Collateral against all
claims and demands of all Persons (other than Liens permitted as to the
Collateral by Section 7.01) at any time claiming the same or any interest
therein, (b) comply with the requirements of all state and federal laws in order
to grant to Lender valid and perfected first priority security interests in the
Collateral, with perfection, in the case of any investment property, or deposit
account, being effected by giving Lender control of such investment property or
deposit account, rather than or in addition to by the filing of a UCC financing
statement with respect to such investment property or deposit account, and
(c) do whatever Lender may reasonably request, from time to time, to effect the
purposes of this Agreement and the other Loan Documents, including filing
notices of liens, UCC financing statements, and amendments, renewals and
continuations thereof; cooperating with Lender’s representatives; keeping
brokerage records; and paying claims which might, if unpaid, become a Lien on
the Collateral. Lender is hereby authorized by Company to file any UCC financing
statements covering the Collateral whether or not Company’s signature appears
thereon.

ARTICLE VII.

NEGATIVE COVENANTS

So long as the Commitment shall be in effect, or any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied:

7.01 Liens on Collateral. The Company shall not, directly or indirectly, create,
incur, assume or suffer to exist any Lien (other than in favor of the Lender)
upon any Collateral, whether now owned or hereafter acquired, other than the
following (“Permitted Liens”):

(a) Liens (other than Liens imposed under ERISA) for taxes, assessments or
governmental charges or levies not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(b) normal and customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions; and

(c) Liens of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection.

7.02 [Reserved]

7.03 Fundamental Changes. The Company shall not, nor shall it permit any
Material Subsidiary to, directly or indirectly, merge, dissolve, liquidate,
consolidate with or into another Person, or sell, assign, transfer or otherwise
dispose of (whether in one transaction or in a series of transactions)
(together, “Dispose”) all or substantially all of its assets (whether now owned
or hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:

(a) any Subsidiary or other Person may merge with (i) the Company, or (ii) any
one or more other Subsidiaries; provided that when the Company is merging with
another Person, the Company shall be the continuing or surviving Person; and

(b) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Company or to another Subsidiary.

7.04 Change in Nature of Business. The Company shall not, nor shall it permit
any Subsidiary to, directly or indirectly, engage in any material line of
business substantially different from those lines of business conducted by the
Company and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.

7.05 Transactions with Affiliates. The Company shall not, nor shall it permit
any Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction or series of transactions with any officer, director or Affiliate of
such Person other than (a) advances of working capital to the Company,
(b) transfers of cash and assets to the Company, (c) indemnification of
directors and officers in the ordinary course of business, (d) intercompany
transactions solely among the Company and its wholly-owned Subsidiaries
(e) normal and reasonable compensation and reimbursement and advance of expenses
of officers and directors in the ordinary course of business, (f) any License
and Manufacturing Transaction and (g) except as otherwise specifically limited
in this Agreement, other transactions which are entered into in the ordinary
course of such Person’s business on terms and conditions substantially as
favorable to such Person as would be obtainable by it in a comparable
arm’s-length transaction with a Person other than an officer, director or
Affiliate.

7.06 Use of Proceeds. The Company shall not, nor shall it permit any Subsidiary
to, use the proceeds of any Credit Extension, whether directly or indirectly,
and whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.

 

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7.07 Financial Covenant. The Company, together with its consolidated
Subsidiaries, shall not fail to maintain at any time, cash, cash equivalents,
and short term investments (to the extent comprising debt of the issuer) that
(i) are unrestricted, (ii) are not Collateral and (iii) are not subject to any
Lien other than Permitted Liens, of at least $100,000,000.

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. The Borrower fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan, or (ii) within three days after the
same becomes due, any interest on any Loan, or any fee due hereunder, or
(iii) within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or

(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03(a), 6.05,
6.10, or 6.11 or Article VII; or

(c) Other Defaults. The Borrower fails to perform or observe any other covenant
or agreement (not specified in subsection (a) or (b) above) contained in any
Loan Document on its part to be performed or observed and such failure continues
for 30 days; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower herein,
or in any other Loan Document, shall be incorrect or misleading in any material
respect when made or deemed made; or

(e) Cross-Default. (i) The Company or any Subsidiary, other than an Inactive
Subsidiary whose obligations are not Guaranteed by the Company or any other
Subsidiary, (A) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect of
any Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
the Threshold Amount, or (B) fails to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any
Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which the
Company or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract
as to which the Company or any Subsidiary is an Affected Party (as so defined)
and, in either event, the Swap Termination Value owed by the Company or such
Subsidiary as a result thereof is greater than the Threshold Amount; or

(f) Insolvency Proceedings, Etc. The Company or any of its Subsidiaries, other
than an Inactive Subsidiary whose obligations are not Guaranteed by the Company
or any other Subsidiary, institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for 60 calendar days; or any proceeding under
any Debtor Relief Law relating to any such Person or to all or any material part
of its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) The Company or any Subsidiary, other
than an Inactive Subsidiary whose obligations are not Guaranteed by the Company
or any other Subsidiary, becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due, or (ii) any writ or warrant
of attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issue or levy; or

 

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(h) Judgments. There is entered against the Company or any Subsidiary, other
than an Inactive Subsidiary whose obligations are not Guaranteed by the Company
or any other Subsidiary, (i) a final judgment or order for the payment of money
in an aggregate amount exceeding the Threshold Amount (to the extent not covered
by independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 10 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Company or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; or the Company or any Affiliate thereof contests
in any manner the validity or enforceability of any Loan Document; or the
Company denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or

(k) Change of Control. There occurs any Change of Control with respect to the
Company.

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Lender may take any or all of the following actions:

(a) declare the Commitment to be terminated, whereupon the Commitment shall be
terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; and

(c) exercise all rights and remedies available to it under the Loan Documents or
applicable law;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Company under the Bankruptcy Code of the
United States, the Commitment shall automatically terminate, the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable, in each case without
further act of the Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable), any amounts received on account of the Obligations shall be applied by
the Lender in such order as it elects in its sole discretion.

ARTICLE IX.

[RESERVED]

ARTICLE X.

MISCELLANEOUS

10.01 Amendments; Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by the Company
therefrom, shall be effective unless in writing signed by the Lender and the
Company, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

10.02 Notices and Other Communications; Facsimile Copies.

(a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the address, facsimile number or (subject to subsection (c) below)
electronic mail address specified for notices to the applicable party on
Schedule 10.02; or to such other address, facsimile number or electronic mail
address as shall be designated by such party in a notice to the other party;
provided all email and fax communications are promptly followed by delivery of
originals. All notices and other

 

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communications expressly permitted hereunder to be given by telephone shall be
made to the telephone number specified for notices to the applicable party on
Schedule 10.02, or to such other telephone number as shall be designated by such
party in a notice to the other party. All such notices and other communications
shall be deemed to be given or made upon the earlier to occur of (i) actual
receipt by the relevant party hereto and (ii) (A) if delivered by hand or by
courier, when signed for by or on behalf of the relevant party hereto; (B) if
delivered by mail, four Business Days after deposit in the mails, postage
prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed
by telephone; and (D) if delivered by electronic mail (which form of delivery is
subject to the provisions of subsection (c) below), when delivered; provided,
however, that notices and other communications to the Lender pursuant to Article
II shall not be effective until actually received by the Lender. In no event
shall a voicemail message be effective as a notice, communication or
confirmation hereunder.

(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents
and signatures shall, subject to applicable Law, have the same force and effect
as manually-signed originals and shall be binding on the Company and the Lender.
The Lender may also require that any such documents and signatures be confirmed
by a manually-signed original thereof; provided, however, that the failure to
request or deliver the same shall not limit the effectiveness of any facsimile
document or signature.

(c) Limited Use of Electronic Mail. Electronic mail and Internet and intranet
websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.

(d) Reliance by Lender. The Lender shall be entitled to rely and act upon any
notices (including telephonic Loan Notices) purportedly given by or on behalf of
the Company even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Company shall indemnify the Lender,
its Affiliates, and their respective officers, directors, employees, agents and
attorneys-in-fact from all losses, costs, expenses and liabilities resulting
from the reliance by such Person on each notice purportedly given by or on
behalf of the Company. All telephonic notices to and other communications with
the Lender may be recorded by the Lender, and the Company hereby consents to
such recording.

10.03 No Waiver; Cumulative Remedies. No failure by the Lender to exercise, and
no delay by the Lender in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Company shall pay (i) all reasonable out of pocket
expenses incurred by the Lender and its Affiliates (including the reasonable
fees, charges and disbursements of counsel for the Lender), in connection with
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), and (ii) all out of pocket
expenses incurred by the Lender (including the fees, charges and disbursements
of any counsel for the Lender), in connection with the enforcement or protection
of its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection with
the Loans made hereunder, including all such out of pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans.

(b) Indemnification by the Company. The Company shall indemnify the Lender and
each Related Party of Lender (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Company arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Lender and its Related
Parties only, the administration of this Agreement and the other Loan Documents
(provided that any indemnification in respect of Indemnified Taxes or Other
Taxes shall be limited by the terms and provisions of Section 3.01), (ii) any
Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property owned
or operated by the Company or any of its Subsidiaries, or any Environmental
Liability related in any way to the Company or any of its Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by the Company, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related

 

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expenses (x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by the Company
against an Indemnitee for gross negligence or breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Company has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.

(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Company shall not assert, and hereby waive, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby, except
to the extent that such damages are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee, or to the extent that such
information or other materials are obtained as a result of a breach by such
Indemnitee of its obligations under Section 10.07.

(d) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

(e) Survival. The agreements in this Section shall survive the termination of
the Commitment and the repayment, satisfaction or discharge of all the other
Obligations.

10.05 Payments Set Aside. To the extent that any payment by or on behalf of the
Company is made to the Lender, or the Lender exercises its right of set-off, and
such payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then,
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred.

10.06 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Company may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Lender and the Lender may not assign or otherwise transfer any of its rights
or obligations hereunder except (i) to an Eligible Assignee in accordance with
the provisions of subsection (b) of this Section, (ii) by way of participation
in accordance with the provisions of subsection (c) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (e) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (c) of this Section and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

(b) The Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of the Commitment, and the Loans at the time owing to it) pursuant to
documentation acceptable to the Lender and the assignee. From and after the
effective date specified in such documentation, such Eligible Assignee shall be
a party to this Agreement and, to the extent of the interest assigned by the
Lender, have the rights and obligations of the Lender under this Agreement, and
the Lender shall, to the extent of the interest so assigned, be released from
its obligations under this Agreement (and, in the case of an assignment of all
of the Lender’s rights and obligations under this Agreement, shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05 and 10.04 with respect to facts and circumstances occurring prior to
the effective date of such assignment). Upon request, the Company (at its
expense) shall execute and deliver any documents reasonably necessary or
appropriate to give effect to such assignment and to provide for the
administration of this Agreement after giving effect thereto; provided in
connection with such documentation prepared pursuant to an assignment of less
than all of the Lender’s rights and obligations hereunder, (i) such
documentation shall be prepared solely at the expense of the Lender, and
(ii) the Lender shall assume the role of administrative agent for itself and
such assignees pursuant to terms and conditions substantially in accordance with
those set forth in the Lender’s standard form of syndicated credit agreement as
then in existence.

(c) The Lender may at any time, without the consent of, or notice to, the
Company, sell participations to any Person (other than a natural person) (each,
a “Participant”) in all or a portion of the Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans); provided that (i) the Lender’s obligations under this Agreement shall

 

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remain unchanged, (ii) the Lender shall remain solely responsible to the Company
for the performance of such obligations and (iii) the Company shall continue to
deal solely and directly with the Lender in connection with the Lender’s rights
and obligations under this Agreement. Any agreement or instrument pursuant to
which the Lender sells such a participation shall provide that the Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that the Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
that would (i) postpone any date upon which any payment of money is scheduled to
be made to such Participant, or (ii) reduce the principal, interest, fees or
other amounts payable to such Participant. Subject to subsection (d) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were the
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were the Lender.

(d) A Participant shall not be entitled to receive any greater payment under
Section 3.01 or 3.04 than the Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Company’s prior written
consent. A Participant that is not a “United States person” within the meaning
of Section 7701(a)(30) of the Code shall not be entitled to the benefits of
Section 3.01 unless the Company is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
provide to the Lender such tax forms prescribed by the IRS as are necessary or
desirable to establish an exemption from, or reduction of, U.S. withholding tax.

(e) The Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of the
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release the
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for the Lender as a party hereto.

(f) As used herein, the following terms have the following meanings:

“Eligible Assignee” means (a) an Affiliate of the Lender; (b) an Approved Fund;
and (c) any other Person (other than a natural person) approved by the Company
(such approval not to be unreasonably withheld or delayed, provided that Lender
acknowledges that such approval may be withheld by the Company in respect of any
such Person that is certified by the Company to be, and that is, materially
engaged in business directly competing with any substantial business of the
Company and its Subsidiaries); provided that no such approval shall be required
if an Event of Default has occurred and is continuing.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Approved Fund” means any Fund that is administered or managed by (a) the Lender
or (b) an Affiliate of the Lender.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any assignment instrument relating
hereto shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

10.07 Treatment of Certain Information; Confidentiality.

(a) The Lender agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (i) to its Affiliates
and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and representatives (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (ii) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners),
(iii) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process (provided that, unless prohibited by
applicable Laws or request of a Governmental Authority, the Lender shall provide
the Company with prompt notice of any such requirement so that the Company may,
at its sole cost, expense and risk, seek a protective order or take other
appropriate action), (iv) to any other party hereto, (v) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (vi) subject to an agreement
containing provisions substantially the same as those of this Section, to
(A) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (B) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the

 

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Borrower and its obligations, (vii) with the consent of the Company or (viii) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the Lender or any
of its Affiliates on a nonconfidential basis from a source other than the
Borrower.

(b) For purposes of this Section 10.07, “Information” means all information
known or that reasonably should have been known by the Lender to be material
non-public information (within the meaning of United States federal securities
laws) and received from the Company or any Subsidiary relating to the Company or
any Subsidiary or any of their respective businesses, other than any such
information that is available to the Lender on a nonconfidential basis prior to
disclosure by the Company or any Subsidiary, and any information that is clearly
identified by the Company at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

(c) The Lender acknowledges that (i) the Information may include material
non-public information concerning the Company or a Subsidiary, as the case may
be, (ii) it has developed compliance procedures regarding the use of material
non-public information and (iii) it will handle such material non-public
information in accordance with applicable Law, including Federal and state
securities Laws.

10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by the Lender or any such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to the Lender, irrespective of whether or
not the Lender shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower may be contingent or
unmatured or are owed to a branch or office of the Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of the Lender and its respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
the Lender or its respective Affiliates may have. The Lender agrees to notify
the Company promptly after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application.

10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Lender exceeds the Maximum Rate, the
Lender may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.

10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Lender,
regardless of any investigation made by the Lender or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default
at the time of any Credit Extension, and shall continue in full force and effect
as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied.

10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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10.13 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND
SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION.

(b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

(e) APPOINTMENT OF AGENT FOR SERVICE OF PROCESS.

(i) The Company hereby irrevocably appoints CT Corporation System, with an
office at 111 Eighth Avenue, New York, NY 10011, as its respective authorized
agent (in such capacity, the “NY Process Agent”) with all powers necessary to
receive on its behalf service of copies of the summons and complaint and any
other process which may be served in any action or proceeding arising out of or
relating to this Agreement and the other Loan Documents in any of the courts in
and of the State of New York. Such service may be made by mailing or delivering
a copy of such process to the Company in care of the NY Process Agent at the NY
Process Agent’s address and the Company hereby irrevocably authorizes and
directs the NY Process Agent to accept such service on their behalf and agree
that the failure of the NY Process Agent to give any notice of any such service
to the Company shall not impair or affect the validity of such service or of any
judgment rendered in any action or proceeding based thereon. As an alternative
method of service, the Company also irrevocably consents to the service of any
and all process in any such action or proceeding by the mailing of copies of
such process to the Company at its address specified on the signature page
hereof. If for any reason CT Corporation System shall cease to act as NY Process
Agent, the Company shall appoint forthwith, in the manner provided for herein, a
successor NY Process Agent qualified to act as an agent for service of process
with respect to all courts in and of the State of New York acceptable to the
Lender.

(ii) Nothing in this Section 10.13(e) shall affect the right of the Lender to
serve legal process in any other manner permitted by law or limit the right of
the Lender to bring any action or proceeding against the Company or its property
in the courts of other jurisdictions.

10.14 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR

 

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ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.15 California Judicial Reference. If any action or proceeding is filed in a
court of the State of California by or against any party hereto in connection
with any of the transactions contemplated by this Agreement or any other Loan
Document, (a) the court shall, and is hereby directed to, make a general
reference pursuant to California Code of Civil Procedure Section 638 to a
referee (who shall be a single active or retired judge) to hear and determine
all of the issues in such action or proceeding (whether of fact or of law) and
to report a statement of decision, provided that at the option of any party to
such proceeding, any such issues pertaining to a “provisional remedy” as defined
in California Code of Civil Procedure Section 1281.8 shall be heard and
determined by the court, and (b) without limiting the generality of
Section 10.04, the Company shall be solely responsible to pay all fees and
expenses of any referee appointed in such action or proceeding.

10.16 Judgment Currency. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Lender could purchase
the first currency with such other currency on the Business Day preceding that
on which final judgment is given. The obligation of the Borrower in respect of
any such sum due from it to the Lender hereunder or under the other Loan
Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance with
the applicable provisions of this Agreement (the “Agreement Currency”), be
discharged only to the extent that on the Business Day following receipt by the
Lender of any sum adjudged to be so due in the Judgment Currency, the Lender may
in accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so purchased
is less than the sum originally due to the Lender from the Borrower in the
Agreement Currency, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Lender, as the case may be,
against such loss. If the amount of the Agreement Currency so purchased is
greater than the sum originally due to the Lender in such currency, the Lender,
as the case may be, agrees to return the amount of any excess to the Borrower
(or to any other Person who may be entitled thereto under applicable law).

10.17 USA Patriot Act Notice. Lender hereby notifies Borrower that pursuant to
the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies Borrower, which information includes the name
and address of Borrower and other information that will allow Lender to identify
Borrower in accordance with the Act. Borrower shall, promptly following a
request by Lender, provide all documentation and other information that Lender
requests in order to comply with its ongoing obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including the
Act.

[Remainder of page intentionally left blank]

 

31

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

NOVELLUS SYSTEMS, INC. By:  

 

  John Hertz   Vice President Corporate Finance

Signature Page 1 to Credit Agreement

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A. By:  

 

Name:  

 

Title:  

 

Signature Page 2 to Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE 1.01(a)

APPROVED COLLATERAL

 

Approved Collateral Types

   Maintenance
Borrowing Base
Percentage  

U.S. Government Obligations*

   95 % 

U.S. Agency Obligations*

   85 % 

State/Municipal Bonds*

  

(A/A2 or higher ratings from Standard & Poor’s Ratings Services and Moody’s
Investors Service, Inc., respectively)

   85 % 

Corporate Bonds*

  

(BBB-/Baa3 or higher ratings from Standard & Poor’s Ratings Services and Moody’s
Investors Service, Inc., respectively)

   85 % 

Commercial Paper with ratings from Standard & Poor’s Ratings Services and
Moody’s Investors Service, Inc., respectively of:

   90 % 

A1/P1

   85 % 

A2/P2

  

Mutual Funds (Quoted in the Wall Street Journal or Barron’s)

  

Money Market

   95 % 

U.S. Government Obligations*

   85 % 

Corporate/Municipal Bonds*

   75 % 

Bank of America, N.A. Deposit Accounts

   100 % 

 

* Having a remaining tenor of no more than the maximum tenor permitted under the
Company’s Investment Policy in the form delivered to the Lender prior to the
Closing Date.

 

1

Schedule 1.01(a)

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SCHEDULE 5.05

SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS

None, except as set forth in the unaudited consolidated balance sheet of the
Company and its Subsidiaries dated March 28, 2009.

 

1

Schedule 5.05

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SCHEDULE 5.06

LITIGATION

Linear Technology Corporation

In March 2002, Linear Technology Corporation (Linear) filed a complaint against
Novellus, among other parties, in the Superior Court of the State of California
for the County of Santa Clara. The complaint seeks damages (including punitive
damages), declaratory relief and injunctions for causes of actions involving
alleged breach of contract, fraud, unfair competition and breach of warranty.
The Superior Court dismissed Linear’s claims for fraud and unfair competition on
October 5, 2004. The Court of Appeal affirmed this dismissal on June 18, 2007.
Trial on the remaining claims is currently set for September 8, 2009. At this
time, we cannot predict the ultimate outcome of this case, nor can we estimate a
range of potential loss, if any. However, we believe that the ultimate
disposition of these matters will not have a material adverse effect on our
business, financial condition or operating results.

 

1

Schedule 5.06

--------------------------------------------------------------------------------

SCHEDULE 5.09

ENVIRONMENTAL MATTERS

NONE

 

1

Schedule 5.09

--------------------------------------------------------------------------------

SCHEDULE 5.13

SUBSIDIARIES

 

Name

  

Jurisdiction of Organization

Novellus Systems, Inc.

   California

Peter Wolters of America, Inc.

   Illinois

Tmation Inc.

   Delaware

Angstrom Systems Inc

   Delaware

Gamma Precision Technology

   California

Novellus Systems Export, Inc.

   Barbados

Novellus International Holdco Inc.

   Delaware

Gasonics World Trade Inc.

   Barbados

Simation

   Canada

Gasonics Ireland

   Ireland

Gasonics Israel

   Israel

Novellus Development Corporation

   California

Novellus Vietnam LLC

   Vietnam

Novellus Systems Inc. (Singapore Branch)

   Singapore

Novellus Systems (Schweiz) Holding GmbH

   Switzerland

IPEC FSC Ltd

   Barbados

IPEC International Sales FSC Ltd.

   Barbados

Novellus Systems UK Limited

   United Kingdom

Novellus Singapore Pte. Ltd.

   Singapore

Novellus Systems (Israel) Ltd.

   Israel

Novellus Systems BV

   Netherlands

Voumard Machines Co S.A. Neuchatel (VMCH)

   Switzerland

Novellus Systems International BV

   Netherlands

Novellus Systems International Holdings Ltd.

   Cayman Islands

Peter Wolters UK Ltd

   United Kingdom

NHL Sub GmbH

   Germany

Voumard (UK) Limited

   United Kingdom

Voumard, Inc.

   New York

Novellus Systems International Trading (Shanghai) Co. Ltd.

   China

Novellus Systems Semiconductor Equipment Shanghai Co. Ltd.

   China

Novellus Systems Ireland, Limited

   Ireland

Novellus Systems Japan, G.K.

   Japan

Novellus Systems (H.K.) Limited

   Hong Kong

Novellus Systems International BV (Singapore Branch)

   Singapore

Novellus Systems (Malaysia) Sdn. Bhd.

   Malaysia

Novellus Systems Italy SRL

   Italy

Novellus Systems SARL

   France Novellus Systems GmbH    Germany SpeedFam-IPEC International Services,
Inc.    Delaware Novellus Systems International LLC    California Peter Wolters
GmbH    Germany Novellus Systems Taiwan    Taiwan SpeedFam IPEC (Malaysia) Sdn
Bhd    Malaysia Novellus Systems (India) Pvt. Ltd.    India Novellus Singapore
Holdings PTE. LTD.    Singapore Novellus Korea LLC YH    Korea Peter Wolters
Verwaltungs GmbH Rendsburg    Germany

Project Peter Wolters Limited (formerly Peter Wolters U.K.

Limited (formerly SpeedFam-IPEC Limited))

   United Kingdom Peter Wolters Japan Co., Ltd.    Japan

 

1

Schedule 5.13

--------------------------------------------------------------------------------

SCHEDULE 10.02

NOTICE ADDRESSES AND LENDING OFFICE

BORROWER:

NOVELLUS SYSTEMS, INC.

4000 North First Street

San Jose, CA 95134

Attention: John Hertz

Telephone: (408) 943-9700

Facsimile: (408) 943-3422

Electronic Mail: john.hertz@novellus.com

Website Address: www.novellus.com

LENDER

Lending Office for Loans and payments with

respect thereto

BANK OF AMERICA, N.A.

2001 Clayton Rd. 2nd Floor

Mail Code: CA4-702-02-25

Concord, CA 94520

Attn: Adam Stoner

Telephone: (925) 675-8825

Facsimile: (888) 206-6220

Electronic Mail: adam.j.stoner@bankofamerica.com

Bank of America, London

SWIFT: BOFAGB22

Account No. 65280019

Attn: Credit Services

Ref: Novellus Systems Inc.

Notices (other than Requests for Credit Extension)

BANK OF AMERICA, N.S.

315 Montgomery Street, 6th Floor

Mail Code: CA5-704-06-37

San Francisco, CA 94104

Attn: Christina Felsing

Telephone: (415) 913-2790

Facsimile: (415) 913-2358

Electronic Mail: christina.m.felsing@bankofamerica.com

 

1

Schedule 10.02

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF LOAN NOTICE

Date:                     ,

 

To: Bank of America, N.A.

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of June 17, 2009
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), between Novellus Systems, Inc. (the “Company”), and Bank of
America, N.A.

The undersigned hereby requests (select one):

 

¨  A Loan    ¨  A Continuation of a Loan

 

  1. On                                                   (a Business Day).

 

  2. In the amount of €                             .

 

  3. With an Interest Period of              months.

[The borrowing requested herein complies with the proviso to the first sentence
of Section 2.01 of the Agreement.] Attached hereto is a completed Borrowing Base
Certificate, duly executed by the Company.

 

NOVELLUS SYSTEMS, INC. By:  

 

Name:  

 

Title:  

 

By:  

 

Name:  

 

Title:  

 

 

A-1

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                     ,

 

To: Bank of America, N.A.

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of June 17, 2009
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), between Novellus Systems, Inc. (the “Company”), and Bank of
America, N.A. (the “Lender”).

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the                                          of the Company, and that,
as such, he/she is authorized to execute and deliver this Certificate to the
Lender on the behalf of the Company, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.01(a) of the Agreement for the fiscal year of the Company
ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 6.01(b) of the Agreement for the fiscal quarter of the Company ended
as of the above date. Such financial statements fairly present the financial
condition, results of operations and cash flows of the Company and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of the Company
during the accounting period covered by the attached financial statements.

3. A review of the activities of the Company during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period the Company performed and observed all its Obligations
under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned during such fiscal period, the Company
performed and observed each covenant and condition of the Loan Documents
applicable to it and no Default has occurred and is continuing.]

—or—

[the following covenants or conditions have not been performed or observed and
the following is a list of each such Default and its nature and status:]

4. The representations and warranties of the Company contained in Article V of
the Agreement and any representations and warranties of the Company that are
contained in any document furnished at any time under or in connection with the
Loan Documents, are true and correct on and as of the date hereof, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they are true and correct as of such earlier date, and
except that for purposes of this Compliance Certificate, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including
the statements in connection with which this Compliance Certificate is
delivered.

 

B-1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                    ,             .

 

NOVELLUS SYSTEMS, INC. By:  

 

Name:  

 

Title:  

 

 

B-2

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EXHIBIT C

OPINION MATTERS

The matters contained in the following Sections of the Credit Agreement should
be covered by the legal opinions:

 

  •  

Section 5.01(a), (b) and (c)

 

  •  

Section 5.02

 

  •  

Section 5.03

 

  •  

Section 5.04

 

  •  

Section 5.14(b)

 

  •  

Section 5.18

 

C-1

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EXHIBIT D

FORM OF BORROWING BASE CERTIFICATE

Date:                             

 

To: Bank of America, N.A.,

          as Lender

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of June 17, 2009 (as
amended, modified, renewed or extended from time to time, the “Credit
Agreement”), between Novellus Systems, Inc. (the “Company”) and Bank of America,
N.A. (the “Lender”). Unless otherwise defined herein, capitalized terms used
herein have the respective meanings assigned to them in the Credit Agreement.
This Borrowing Base Certificate is made and delivered pursuant to
Section 4.01(a)(ix), Section 4.02(a) or as otherwise required by the Credit
Agreement.

Each of the undersigned Responsible Officers of the Company hereby certifies as
of the date hereof that he/she is the [                        ] of the Company,
and that, as such, he/she is authorized to execute and deliver this Certificate
to the Lender on the behalf of the Company, and that the information set forth
on Schedule 1 hereto is true, accurate and complete as of                     .

IN WITNESS WHEREOF, the undersigned has/have executed this Certificate as the
                     of the Company as of                     .

 

NOVELLUS SYSTEMS, INC. By:  

 

Name:  

 

Title:  

 

By:  

 

Name:  

 

Title:  

 

 

D-1

--------------------------------------------------------------------------------

SCHEDULE 1

to Borrowing Base Certificate

 

Date of Calculation:   

                         

 

A. Total Maintenance Borrowing Base:

 

Approved Collateral

   (1)
Collateral
Value   

(2)
Maintenance
Borrowing Base
Percentage

  

(3)
Adjusted
Amount
((1) x (2))

1.

  U.S. Government Obligations    $                 95%   

 

2.

  U.S. Agency Obligations    $                 85%   

 

3.

 

State/Municipal Bonds

(A/A2 or higher ratings from Standard & Poor’s Ratings Services and Moody’s
Investors Service, Inc., respectively)

   $                 85%   

 

4.

 

Corporate Bonds

(BBB-/Baa3 or higher ratings from Standard & Poor’s Ratings Services and Moody’s
Investors Service, Inc., respectively)

   $                 85%   

 

5.

  Commercial Paper with ratings from Standard & Poor’s Ratings Services and
Moody’s Investors Service, Inc., respectively of:           

A1/P1

   $                 90%   

 

 

A2/P2

   $                 85%   

 

6.

 

Mutual Funds (Quoted in the Wall Street Journal or Barron’s)

          

Money Market

   $                 95%   

 

 

U.S. Government Obligations

   $                 85%   

 

 

Corporate/Municipal Bonds

   $                 75%   

 

7.

 

Bank of America, N.A. Deposit Accounts

   $                 100%   

 

8.

 

Total Adjusted Amount

(Adjusted Amounts of A.1+A.2+A.3+A.4+A.5+A.6+A.7)

     

 

9.

 

Maintenance Borrowing Base (A.8 ÷ 1.15)

     

 

 

B. Borrowing Base Availability:

 

1.      Maintenance Borrowing Base (A.9)

     

2.      Total Outstandings (in Euros)

  €    

3.      Spot Rate as of date of calculation

     

4.      Total Outstandings (in Dollars)

  $    

5.      Deficiency? (Y/N)

     

 

D-2