Exhibit 10.1

 

TERM LOAN AGREEMENT

This Term Loan Agreement (the “Agreement”), dated as of September 28, 2006, is
between Power-One, Inc., a Delaware corporation (“Borrower”), PWER Bridge, LLC,
a Nevada limited liability company (“Lender”), and, with respect to Section 1.7,
Stephens Investment Holdings, LLC, an Arkansas limited liability company
(“Guarantor”).

SECTION 1
LOAN TERMS

1.1.                              AMOUNT AND PURPOSE.  LENDER WILL MAKE A LOAN
TO BORROWER IN THE PRINCIPAL AMOUNT OF FIFTY MILLION DOLLARS ($50,000,000) (THE
“LOAN”) TO BE USED FOR FUNDING A PORTION OF THE ACQUISITION BY BORROWER OR AN
AFFILIATE THEREOF CONTEMPLATED BY THAT CERTAIN AGREEMENT OF PURCHASE AND SALE
BETWEEN BORROWER AND MAGNETEK, INC. OF EVEN DATE HEREWITH (THE “PURCHASE
AGREEMENT”).  THE LOAN IS NOT REVOLVING.  ANY AMOUNT REPAID MAY NOT BE
REBORROWED. THE CLOSING OF THE LOAN (THE “LOAN CLOSING”) WILL OCCUR
CONTEMPORANEOUSLY WITH THE CLOSING (AS SUCH TERM IS DEFINED IN THE PURCHASE
AGREEMENT). IF THE PURCHASE AGREEMENT TERMINATES FOR ANY REASON, THEN THIS
AGREEMENT SHALL TERMINATE CONCURRENTLY THEREWITH.

1.2.                              PROMISSORY NOTE.  THE LOAN WILL BE EVIDENCED
BY A PROMISSORY NOTE (THE “NOTE”) PAYABLE TO LENDER IN THE ORIGINAL PRINCIPAL
AMOUNT OF THE LOAN.

1.3.                              DOCUMENTATION.  AT OR PRIOR TO THE LOAN
CLOSING, BORROWER MUST DELIVER THE FOLLOWING DOCUMENTS AND OTHER ITEMS, EXECUTED
AND ACKNOWLEDGED AS APPROPRIATE, ALL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO LENDER:

(A)                                  THE NOTE;

(B)                                 EVIDENCE OF BORROWER’S DUE FORMATION AND
GOOD STANDING, AS WELL AS DUE AUTHORIZATION AND EXECUTION OF THE LOAN DOCUMENTS;

(C)                                  A LOAN FEE (THE “LOAN FEE”) IN THE AMOUNT
OF TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000);

(D)                                 ALL REASONABLE OUT-OF-POCKET CLOSING COSTS
INCURRED BY LENDER IN CONNECTION WITH THE CLOSING OF THE LOAN (PROVIDED THAT
LENDER GIVES BORROWER A REASONABLY ITEMIZED ESTIMATE THEREOF AT LEAST THREE
BUSINESS DAYS BEFORE CLOSING); AND

(E)                                  A LEGAL OPINION LETTER FROM BORROWER’S
COUNSEL SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT A.

1.4.                              LOAN DOCUMENTS.  THIS AGREEMENT AND THE NOTE
ARE REFERRED TO AS THE “LOAN DOCUMENTS.”

1.5.                              DISBURSEMENT PROCEDURES.  LENDER WILL DISBURSE
THE LOAN PROCEEDS TO AN ACCOUNT DESIGNATED BY BORROWER AT THE LOAN CLOSING.

1.6.                              MAINTENANCE FEE.  ONE THE FIRST (1ST)
ANNIVERSARY OF THE LOAN CLOSING, BORROWER SHALL PAY TO LENDER A MAINTENANCE FEE
IN AN AMOUNT EQUAL TO ONE PERCENT (1%) OF THE OUTSTANDING PRINCIPAL BALANCE OF
THE LOAN AS OF SUCH DATE.

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1.7.                              GUARANTY OF LENDER’S OBLIGATIONS.   GUARANTOR
UNCONDITIONALLY GUARANTEES THE PAYMENT AND PERFORMANCE BY LENDER OF ALL OF
LENDER’S OBLIGATIONS HEREUNDER (THE “OBLIGATIONS”) FOR THE BENEFIT OF BORROWER
AND ITS ASSIGNEES.  BORROWER OR ITS ASSIGNEE MAY PROCEED DIRECTLY AGAINST
GUARANTOR FOR ANY FUNDING OBLIGATION OR MONETARY DAMAGE CLAIMED HEREUNDER
WITHOUT FIRST PROCEEDING AGAINST LENDER. GUARANTOR AGREES THAT ITS OBLIGATIONS
HEREUNDER ARE IRREVOCABLE, ABSOLUTE, INDEPENDENT AND UNCONDITIONAL AND SHALL NOT
BE SUBJECT TO ANY LIMITATION, IMPAIRMENT OR DISCHARGE FOR ANY REASON, INCLUDING
ANY CIRCUMSTANCE WHICH CONSTITUTES A LEGAL OR EQUITABLE DISCHARGE OF A GUARANTOR
OR SURETY OTHER THAN INDEFEASIBLE PERFORMANCE IN FULL OF THE OBLIGATIONS.
GUARANTOR HEREBY WAIVES NOTICE OF ACCEPTANCE OF THIS GUARANTY, PRESENTMENTS,
NOTICES OF DEFAULT, NONPAYMENT, PARTIAL PAYMENTS AND PROTEST, ALL OTHER NOTICES
OR FORMALITIES, ANY RIGHT TO REQUIRE PROSECUTION OF COLLECTION OR REMEDIES
AGAINST ANY PERSON OR ENTITY OR TO PURSUE ANY OTHER REMEDY IN ITS POWER. 
GUARANTOR AGREES THAT ONE OR MORE, AND SUCCESSIVE AND/OR CONCURRENT, ACTIONS MAY
BE BROUGHT AGAINST IT, AND THAT THE CESSATION OF THE LIABILITY FOR ANY REASON,
OTHER THAN FULL SATISFACTION OF THE OBLIGATIONS, SHALL NOT IN ANY WAY AFFECT THE
LIABILITY OF THE GUARANTOR HEREUNDER. THE GUARANTY SET FORTH IN THIS SECTION IS
A CONTINUING GUARANTY AND SHALL REMAIN IN EFFECT UNTIL ALL OF THE OBLIGATIONS
ARISING UNDER THIS GUARANTY HAVE BEEN PAID IN FULL OR OTHERWISE SATISFIED OR
DISCHARGED. GUARANTOR HEREBY WAIVES, FOR THE BENEFIT OF THE BORROWER AND ITS
SUCCESSORS AND ASSIGNS:  (I) ANY DEFENSE ARISING BY REASON OF INCAPACITY OR LACK
OF AUTHORITY; (II) ANY DEFENSE BASED UPON ANY STATUTE OR RULE OF LAW WHICH
PROVIDES THAT THE OBLIGATION OF A SURETY MUST BE NEITHER LARGER IN AMOUNT NOR IN
OTHER RESPECTS MORE BURDENSOME THAN THAT OF THE PRINCIPAL; AND (III) ANY
PRINCIPLES OR PROVISIONS OF LAW, STATUTORY OR OTHERWISE, WHICH ARE OR MIGHT BE
IN CONFLICT WITH THE TERMS OF THIS GUARANTY AND ANY LEGAL OR EQUITABLE DISCHARGE
OF THE OBLIGATIONS HEREUNDER.

SECTION 2
COVENANTS OF BORROWER

So long as the Loan is outstanding:

2.1.                              COMPLIANCE WITH LAW.  BORROWER AND ITS
SUBSIDIARIES WILL COMPLY WITH ALL EXISTING AND FUTURE LAWS, REGULATIONS, ORDERS
AND REQUIREMENTS OF, AND ALL PERMITS AND APPROVALS FROM, AND AGREEMENTS WITH AND
COMMITMENTS TO, ALL GOVERNMENTAL, JUDICIAL OR LEGAL AUTHORITIES HAVING
JURISDICTION OVER BORROWER AND BORROWER’S BUSINESS, EXCEPT TO THE EXTENT SUCH
NON-COMPLIANCE WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.  AS USED IN THIS
AGREEMENT, “MATERIAL ADVERSE EFFECT” SHALL MEAN ANY EVENT OR CIRCUMSTANCES THAT
WOULD BE REASONABLY EXPECTED TO (A) HAVE A MATERIAL ADVERSE EFFECT ON THE
BUSINESS CONDITION (FINANCIAL OR OTHERWISE), OPERATIONS, OR PROPERTIES OF
BORROWER AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, OR (B) MATERIALLY ADVERSELY
AFFECT BORROWER’S ABILITY TO REPAY THE LOAN.

2.2.                              USE OF PROCEEDS.  BORROWER SHALL USE THE LOAN
PROCEEDS FOR THE PURPOSE SET FORTH IN SECTION 1.1 ABOVE AND FOR NO OTHER PURPOSE
WHATSOEVER.

2.3.                              SITE VISITS.  BORROWER SHALL PERMIT LENDER,
ITS AGENTS AND REPRESENTATIVES THE RIGHT TO ENTER AND VISIT BORROWER’S OFFICES
AT ANY REASONABLE TIME TO INSPECT BORROWER’S BOOKS AND RECORDS AND MAKE COPIES
THEREOF AND TO CONFIRM COMPLIANCE WITH THE TERMS OF THIS AGREEMENT, AND AT SUCH
REASONABLE TIMES DURING NORMAL BUSINESS HOURS AND AS OFTEN AS MAY BE REASONABLY
DESIRED, UPON REASONABLE ADVANCE WRITTEN NOTICE TO BORROWER, AND BORROWER SHALL
PAY THE REASONABLE OUT-OF-POCKET EXPENSES OF LENDER IN CONNECTION WITH ONE SUCH
SITE VISIT PER 12-MONTH PERIOD.  LENDER IS UNDER NO DUTY TO EXAMINE ANY BOOKS OR
RECORDS AND LENDER SHALL NOT INCUR ANY OBLIGATION OR LIABILITY BY REASON OF NOT
MAKING ANY SUCH INSPECTION OR INQUIRY.  ANY SITE VISIT, OBSERVATION OR
EXAMINATION BY LENDER IS SOLELY FOR THE PURPOSE OF PROTECTING AND PRESERVING
LENDER’S RIGHTS UNDER THE LOAN DOCUMENTS.  LENDER SHALL USE REASONABLE EFFORTS
TO AVOID INTERFERING WITH BORROWER’S BUSINESS IN CONNECTION WITH THE ACTIVITIES
PERMITTED UNDER THIS SECTION.

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2.4.                              INSURANCE.  BORROWER, FOR ITSELF AND ON BEHALF
OF ITS SUBSIDIARIES MUST MAINTAIN INSURANCE ON THE RESPECTIVE BUSINESSES SIMILAR
IN ALL MATERIAL RESPECTS TO THAT HISTORICALLY MAINTAINED PURSUANT TO THEIR
STANDARD OPERATING PRACTICES.

2.5.                              PRESERVATION OF RIGHTS.  BORROWER AND ITS
SUBSIDIARIES MUST OBTAIN, PRESERVE AND MAINTAIN IN GOOD STANDING, AS APPLICABLE,
ALL MATERIAL LEGAL RIGHTS, PRIVILEGES AND FRANCHISES NECESSARY OR DESIRABLE FOR
THE CONDUCT OF THEIR BUSINESSES, EXCEPT TO THE EXTENT FAILURE TO SO OBTAIN WOULD
NOT HAVE A MATERIAL ADVERSE EFFECT.

2.6.                              PAYMENT OF EXPENSES.  BORROWER MUST PAY ALL
REASONABLE OUT-OF-POCKET COSTS AND EXPENSES INCURRED BY LENDER IN CONNECTION
WITH THE MAKING, DISBURSEMENT AND ADMINISTRATION OF THE LOAN, AS WELL AS ANY
REVISIONS, EXTENSIONS, RENEWALS OR “WORKOUTS” OF THE LOAN, AND IN THE EXERCISE
OF ANY OF LENDER’S RIGHTS OR REMEDIES UNDER THIS AGREEMENT.  SUCH COSTS AND
EXPENSES INCLUDE REASONABLE OUT-OF-POCKET LEGAL FEES AND EXPENSES OF LENDER PAID
TO LENDER’S OUTSIDE COUNSEL AND ANY OTHER REASONABLE OUT-OF-POCKET FEES AND
COSTS FOR SERVICES.  BORROWER ACKNOWLEDGES THAT THE LOAN FEE DOES NOT INCLUDE
AMOUNTS PAYABLE BY BORROWER UNDER THIS SECTION.  ALL SUCH SUMS INCURRED BY
LENDER AND NOT REIMBURSED BY BORROWER WITHIN 30 DAYS OF LENDER’S WRITTEN REQUEST
TO BORROWER ARE CONSIDERED ADDITIONAL LOANS TO BORROWER AND BEARING INTEREST AT
THE PAST-DUE RATE PROVIDED IN THE NOTE.

2.7.                              FINANCIAL AND OTHER INFORMATION.

(A)                                  BORROWER WILL MAKE ALL REQUIRED REGULATORY
FILINGS ON A TIMELY BASIS, INCLUDING FILING ON SECURITIES EXCHANGE COMMISSION
(“SEC”) FORMS 10-K AND 10-Q.  SUCH FILINGS WILL, IN ALL MATERIAL RESPECTS, BE IN
THE FORM REQUIRED BY APPLICABLE SEC RULES AND REGULATIONS AND INCLUDE THE
FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION THAT ARE REQUIRED BY
APPLICABLE LAW AND REGULATIONS TO BE INCLUDED THEREIN BY BORROWER.

(B)                                 BORROWER SHALL PROVIDE TO LENDER COPIES OF
ITS UNITED STATES FEDERAL TAX RETURNS, AND ANY EXTENSIONS THEREOF, TOGETHER WITH
ALL SUPPORTING SCHEDULES, WITHIN THIRTY (30) DAYS OF FILING DATE.

(C)                                  ON WRITTEN REQUEST BY LENDER TO BORROWER,
BORROWER MUST PROMPTLY PROVIDE LENDER WITH ANY OTHER FINANCIAL OR OTHER
INFORMATION CONCERNING ITS AFFAIRS AND PROPERTIES AS LENDER MAY REASONABLY
REQUEST.

2.8.                              NOTICES.  BORROWER MUST PROMPTLY NOTIFY LENDER
IN WRITING OF:

(A)                                  ANY LITIGATION AFFECTING BORROWER OR ANY OF
ITS SUBSIDIARIES WHERE THE AMOUNT CLAIMED IS FIVE HUNDRED THOUSAND DOLLARS
($500,000) OR MORE;

(B)                                 ANY NOTICE THAT BORROWER’S OR ANY OF ITS
SUBSIDIARIES’ BUSINESS FAILS IN ANY RESPECT TO COMPLY WITH ANY APPLICABLE LAW,
REGULATION OR COURT ORDER, IF SUCH NON-COMPLIANCE WOULD HAVE A MATERIAL ADVERSE
EFFECT; AND

(C)                                  THE OCCURRENCE OF ANY MATERIAL ADVERSE
EFFECT.

2.9.                              NOTICE OF CHANGE.  BORROWER MUST GIVE LENDER
PRIOR WRITTEN NOTICE OF ANY CHANGE IN:

(A)                                  THE LOCATION OF ITS CHIEF EXECUTIVE OFFICE;
AND

(B)                                 BORROWER’S NAME, BUSINESS STRUCTURE OR STATE
OF FORMATION.

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SECTION 3
NEGATIVE COVENANTS OF BORROWER

 

SO LONG AS THE LOAN REMAINS OUTSTANDING:

3.1.                              NEGATIVE COVENANTS.  WITHOUT LENDER’S PRIOR
WRITTEN CONSENT, BORROWER MUST NOT ENGAGE IN OR DO ANY OF THE FOLLOWING:

(A)                                  SELL ANY ASSETS FOR LESS THAN FAIR MARKET
PRICE EXCEPT IN THE ORDINARY COURSE OF BUSINESS;

(B)                                 CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY
FURTHER INDEBTEDNESS, WHETHER SECURED OR UNSECURED, OR PERMIT ANY OF ITS
SUBSIDIARIES TO CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY FURTHER
INDEBTEDNESS, WHETHER SECURED OR UNSECURED, OTHER THAN (1) INDEBTEDNESS EXISTING
AT MAGNETEK S.P.A OR ANY SUBSIDIARY THEREOF AS OF THE CLOSING (THE “ACQUISITION
DEBT”), (2) INDEBTEDNESS DESCRIBED IN THE FINANCIAL STATEMENTS DESCRIBED IN
SECTION 4.6, AND (3) ADDITIONAL JUNIOR OR SUBORDINATED INDEBTEDNESS OF NO MORE
THAN FIVE MILLION US DOLLARS (US$5,000,000) IN THE AGGREGATE;

(C)                                  MERGE, DISSOLVE, LIQUIDATE, COMBINE,
CONSOLIDATE WITH OR INTO ANOTHER ENTITY, LEASE OR DISPOSE OF (WHETHER IN ONE
TRANSACTION OR IN A SERIES OF RELATED TRANSACTIONS) ALL OR SUBSTANTIALLY ALL OF
ITS ASSETS (WHETHER NOW OWNED OR HEREAFTER ACQUIRED) TO OR IN FAVOR OF ANY OTHER
PERSON OR ENTITY, EXCEPT FOR (1) TRANSACTIONS IN WHICH BORROWER IS THE SURVIVOR
THAT DO NOT CAUSE A MATERIAL ADVERSE EFFECT, AND (2) TRANSACTIONS BY AND AMONG
BORROWER’S SUBSIDIARIES AS PART OF A REORGANIZATION;

(D)                                 ENGAGE IN ANY MATERIAL LINE OF BUSINESS
SUBSTANTIALLY DIFFERENT FROM THOSE LINES OF BUSINESS CONDUCTED BY BORROWER OR
ANY LINES OF BUSINESS ACQUIRED BY BORROWER PURSUANT TO THE ACQUISITION AGREEMENT
AS OF THE CLOSING OF THE LOAN OR ANY BUSINESS REASONABLY RELATED OR INCIDENTAL
THERETO;

(E)                                  ENGAGE IN ANY PRIVATE OR OPEN-MARKET
PURCHASE OF ITS OUTSTANDING CAPITAL STOCK OR PAY ANY DIVIDENDS WITH RESPECT TO
ITS OUTSTANDING CAPITAL STOCK, EXCEPT PURSUANT TO THE STOCK REPURCHASE PROGRAM
CURRENTLY AUTHORIZED BY BORROWER; OR

(F)                                    AMEND, MODIFY OR CHANGE ITS CERTIFICATE
OF INCORPORATION OR BYLAWS IN A MANNER MATERIALLY ADVERSE TO LENDER.

SECTION 4
REPRESENTATIONS AND WARRANTIES BY BORROWER

Borrower represents and warrants to Lender that:

4.1.                              FORMATION.  BORROWER (A) IS A CORPORATION DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF
DELAWARE, (B) HAS ALL REQUISITE POWER AND AUTHORITY AND ALL REQUISITE
GOVERNMENTAL LICENSES, AUTHORIZATIONS, CONSENTS AND APPROVALS TO (I) OWN 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, AND (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, EXCEPT WHERE THE
FAILURE TO BE SO LICENSED WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.

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4.2.                              AUTHORITY.  THE EXECUTION, DELIVERY AND
PERFORMANCE BY BORROWER OF EACH LOAN DOCUMENT TO WHICH IT IS PARTY HAVE BEEN
DULY AUTHORIZED BY ALL NECESSARY CORPORATE, COMPANY OR OTHER ORGANIZATIONAL
ACTION, AND DO NOT (A) CONTRAVENE THE TERMS OF BORROWER’S CERTIFICATE OF
INCORPORATION OR BYLAWS; (B) CONFLICT WITH OR RESULT IN ANY BREACH OR
CONTRAVENTION OF, OR THE CREATION OF ANY LIEN UNDER (I) ANY CONTRACTUAL
OBLIGATION TO WHICH BORROWER IS A PARTY, OR (II) ANY ORDER, INJUNCTION, WRIT OR
DECREE OF ANY GOVERNMENTAL AUTHORITY OR ANY ARBITRAL AWARD TO WHICH BORROWER OR
ITS PROPERTY IS SUBJECT; (C) VIOLATE ANY LAW; OR (D) RESULT IN A LIMITATION ON
ANY LICENSES, PERMITS OR OTHER APPROVALS APPLICABLE TO THE BUSINESS, OPERATIONS
OR PROPERTIES OF BORROWER, EXCEPT, IN THE CASE OF (B), (C) OR (D), WHERE THE
CONFLICT, BREACH, VIOLATION OR LIMITATION WOULD NOT HAVE A MATERIAL ADVERSE
EFFECT.

4.3.                              GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. 
NO APPROVAL, CONSENT, EXEMPTION, AUTHORIZATION, OR OTHER ACTION BY, OR NOTICE
TO, OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR ANY OTHER PERSON WITH RESPECT
TO ANY MATERIAL CONTRACTUAL OBLIGATION IS NECESSARY OR REQUIRED IN CONNECTION
WITH THE EXECUTION, DELIVERY OR PERFORMANCE BY, OR ENFORCEMENT AGAINST, BORROWER
OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OTHER THAN THOSE THAT HAVE ALREADY
BEEN OBTAINED AND ARE IN FULL FORCE AND EFFECT AND OTHER THAN THOSE WHICH THE
FAILURE TO OBTAIN WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.

4.4.                              BINDING EFFECT.  THIS AGREEMENT AND EACH OTHER
LOAN DOCUMENT HAS BEEN DULY EXECUTED AND DELIVERED BY BORROWER.  THIS AGREEMENT
AND EACH OTHER LOAN DOCUMENT CONSTITUTES A LEGAL, VALID AND BINDING OBLIGATION
OF BORROWER, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS EXCEPT AS ENFORCEABILITY
MAY BE LIMITED BY APPLICABLE BANKRUPTCY OR SIMILAR LAWS OR BY EQUITABLE
PRINCIPLES RELATING TO ENFORCEABILITY.

4.5.                              LITIGATION.  THERE ARE NO ACTIONS, SUITS,
INVESTIGATIONS, CRIMINAL PROSECUTIONS, CIVIL INVESTIGATIVE DEMANDS, IMPOSITIONS
OF CRIMINAL OR CIVIL FINES AND PENALTIES, PROCEEDINGS, CLAIMS OR DISPUTES
PENDING OR, TO THE ACTUAL KNOWLEDGE OF BORROWER (WITHOUT ANY OBLIGATION TO TAKE
ANY INVESTIGATION OR INQUIRY), THREATENED IN WRITING, AT LAW, IN EQUITY, IN
ARBITRATION OR BEFORE ANY GOVERNMENTAL AUTHORITY, BY OR AGAINST BORROWER OR
AGAINST ANY OF THEIR PROPERTIES OR REVENUES THAT (A) PURPORT TO PROHIBIT OR
RESTRAIN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR (B) IF DETERMINED
ADVERSELY, COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

4.6.                              FINANCIAL INFORMATION.  THE UNAUDITED
FINANCIAL STATEMENTS FOR THE FISCAL QUARTER ENDED JUNE 30, 2006 INCLUDED IN THE
QUARTERLY REPORT ON FORM 10-Q FILED BY BORROWER ON AUGUST 9TH, 2006 FAIRLY AND
ACCURATELY REPRESENT IN ALL MATERIAL RESPECTS THE FINANCIAL CONDITION (INCLUDING
ALL MATERIAL CONTINGENT LIABILITIES) OF BORROWER AS OF JUNE 30, 2006 IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED
(EXCEPT FOR THE ABSENCE OF FOOTNOTES AND FOR YEAR-END ADJUSTMENTS), UNLESS
OTHERWISE NOTED THEREIN.  SINCE THE DATES OF SUCH FINANCIAL STATEMENTS, THERE
HAS BEEN NO MATERIAL ADVERSE EFFECT.

4.7.                              BORROWER NOT A “FOREIGN PERSON”.  BORROWER IS
NOT A “FOREIGN PERSON” WITHIN THE MEANING OF SECTION 1445(F)(3) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED FROM TIME TO TIME.

4.8.                              STATUS OF PROPERTY AND ASSETS.  TO BORROWER’S
KNOWLEDGE, BORROWER AND ITS SUBSIDIARIES HAVE (A)  GOOD AND MARKETABLE TITLE TO
ITS OWNED REAL PROPERTIES, (B) VALID TITLE TO ALL OTHER ASSETS REFLECTED IN ITS
FINANCIAL STATEMENTS AS BEING OWNED BY THEM, SUBJECT TO NO LIEN, MORTGAGE,
PLEDGE, CHARGE OR ENCUMBRANCE OF ANY KIND EXCEPT THOSE SECURING INDEBTEDNESS
DESCRIBED IN SUCH FINANCIAL STATEMENTS OR WHICH DO NOT MATERIALLY AFFECT THE
PRESENT OR PROPOSED USE OF SUCH PROPERTIES OR ASSETS OR WOULD NOT CAUSE A
MATERIAL ADVERSE EFFECT, AND (C) VALID AND SUBSISTING LEASES WITH RESPECT TO
LEASED PROPERTIES, WITH ONLY SUCH EXCEPTIONS AS IN THE AGGREGATE ARE NOT
MATERIAL AND DO NOT INTERFERE WITH THE CONDUCT OF THE BUSINESS OF BORROWER AND
ITS SUBSIDIARIES OR WOULD NOT CAUSE A MATERIAL ADVERSE EFFECT.  TO BORROWER’S
ACTUALLY

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KNOWLEDGE, THERE EXISTS NO DEFAULT UNDER THE PROVISIONS OF ANY LEASE, CONTRACT
OR OTHER OBLIGATION TO WHICH BORROWER IS A PARTY WHICH MAY RESULT IN A MATERIAL
ADVERSE EFFECT.

4.9.                              TAX MATTERS.  BORROWER AND ITS SUBSIDIARIES
HAVE FILED ALL FEDERAL, STATE AND OTHER TAX RETURNS AND REPORTS WHICH HAVE BEEN
REQUIRED TO BE FILED AND HAVE PAID ALL MATERIAL TAXES INDICATED BY SAID RETURNS
AND ALL ASSESSMENTS RECEIVED BY THEM TO THE EXTENT THAT SUCH TAXES HAVE BECOME
DUE AND THERE IS NO TAX DEFICIENCY THAT HAS BEEN ASSERTED IN WRITING AGAINST
BORROWER THAT MIGHT HAVE A MATERIAL ADVERSE EFFECT.  ALL MATERIAL TAX
LIABILITIES ARE ADEQUATELY PROVIDED FOR ON THE BOOKS OF BORROWER AND ITS
SUBSIDIARIES.

4.10.                        LICENSES AND INTELLECTUAL PROPERTY.  BORROWER AND
ITS SUBSIDIARIES HOLD ALL LICENSES, AUTHORIZATIONS, CHARTERS, CERTIFICATES AND
PERMITS FROM GOVERNMENTAL AUTHORITIES WHICH ARE NECESSARY TO THE CONDUCT OF
THEIR BUSINESSES, EXCEPT TO THE EXTENT FAILURE TO HOLD WOULD NOT HAVE A MATERIAL
ADVERSE EFFECT, AND NEITHER BORROWER NOR ANY OF ITS SUBSIDIARIES HAS RECEIVED
WRITTEN NOTICE OF ANY PROCEEDING RELATING TO THE REVOCATION OR MODIFICATION OF
ANY OF SUCH LICENSES, AUTHORIZATIONS, CHARTERS, CERTIFICATES OR PERMITS. 
BORROWER AND ITS SUBSIDIARIES OWN OR OTHERWISE POSSESS RIGHTS TO THE PATENTS,
PATENT RIGHTS, LICENSES, INVENTIONS, COPYRIGHTS, TRADEMARKS, SERVICE MARKS AND
TRADE NAMES PRESENTLY EMPLOYED BY THEM IN CONNECTION WITH THE BUSINESSES NOW
OPERATED BY THEM, AND NEITHER BORROWER NOR ANY OF ITS SUBSIDIARIES HAS RECEIVED
ANY NOTICE OF INFRINGEMENTS OF OR CONFLICT WITH ASSERTED RIGHTS OF OTHERS WITH
RESPECT TO ANY OF THE FOREGOING, EXCEPT WHERE SUCH INFRINGEMENT OR CONFLICT
WOULD NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

4.11.                        LABOR MATTERS.  NO LABOR DISPUTE IS PENDING OR, TO
THE KNOWLEDGE OF BORROWER, THREATENED IN WRITING AGAINST BORROWER’S OR ANY OF
ITS SUBSIDIARIES’ EMPLOYEES WHICH COULD RESULT IN A MATERIAL ADVERSE EFFECT.  NO
COLLECTIVE BARGAINING AGREEMENT EXISTS WITH ANY OF BORROWER’S UNITED STATES
EMPLOYEES AND, TO BORROWER’S KNOWLEDGE, AS OF THE DATE HEREOF, THERE IS NO UNION
ORGANIZING EFFORTS PENDING WITH RESPECT TO BORROWER’S UNITED STATES EMPLOYEES.

4.12.                        POLITICAL CONTRIBUTIONS.  TO BORROWER’S KNOWLEDGE,
NEITHER BORROWER NOR ANY OF ITS SUBSIDIARIES HAS AT ANY TIME DURING THE LAST
FIVE (5) YEARS  (A) MADE ANY UNLAWFUL CONTRIBUTION TO ANY CANDIDATE FOR FOREIGN
OFFICE, OR FAILED TO DISCLOSE FULLY ANY CONTRIBUTION IN VIOLATION OF LAW, OR (B)
MADE ANY PAYMENT TO ANY FEDERAL OR STATE GOVERNMENTAL OFFICER OR OFFICIAL, OR
OTHER PERSON CHARGED WITH SIMILAR PUBLIC OR QUASI-PUBLIC DUTIES, OTHER THAN
PAYMENTS REQUIRED OR PERMITTED BY THE LAWS OF THE UNITED STATES OR ANY
JURISDICTION THEREOF, IN ANY CASE THAT WOULD RESULT IN A MATERIAL ADVERSE
EFFECT.

4.13.                        HAZARDOUS SUBSTANCES.  WITHOUT LIMITING THE
GENERALITY OF ANY OF THE FOREGOING REPRESENTATIONS (A) NONE OF THE OPERATIONS OF
BORROWER OR ITS SUBSIDIARIES IS IN VIOLATION OF ANY FEDERAL, STATE OR LOCAL
STATUTE, RULE, REGULATION, DECISION OR ORDER OF ANY REGULATORY AUTHORITY OR
GOVERNMENTAL BODY OR ANY COURT RELATING TO THE USE, DISPOSAL OR RELEASE OF
HAZARDOUS OR TOXIC SUBSTANCES OR RELATING TO THE PROTECTION OF HUMAN HEALTH AND
SAFETY OR THE PROTECTION OR RESTORATION OF THE ENVIRONMENT OR HUMAN EXPOSURE TO
HAZARDOUS OR TOXIC SUBSTANCES OR WASTES, POLLUTANTS OR CONTAMINANTS, EXCEPT TO
THE EXTENT SUCH VIOLATION WOULD NOT HAVE A MATERIAL ADVERSE EFFECT; (B) NEITHER
BORROWER NOR ANY OF ITS SUBSIDIARIES HAS BEEN NOTIFIED IN WRITING THAT IT IS
UNDER INVESTIGATION OR UNDER REVIEW BY ANY REGULATORY AUTHORITY OR GOVERNMENTAL
BODY WITH RESPECT TO COMPLIANCE WITH ANY ENVIRONMENTAL LAW WHICH COULD
REASONABLY BE EXPECTED TO CAUSE A MATERIAL ADVERSE EFFECT; (C) NEITHER BORROWER
NOR ANY OF ITS SUBSIDIARIES HAS ANY LIABILITY IN CONNECTION WITH THE PAST
GENERATION, USE, TREATMENT, STORAGE, DISPOSAL OR RELEASE OF ANY HAZARDOUS
MATERIAL, EXCEPT TO THE EXTENT SUCH LIABILITY WOULD NOT HAVE A MATERIAL ADVERSE
EFFECT; (D) THERE IS NO HAZARDOUS MATERIAL THAT MAY REASONABLY BE EXPECTED TO
POSE ANY MATERIAL RISK TO SAFETY, HEALTH, OR THE ENVIRONMENT, ON, UNDER OR ABOUT
ANY PROPERTY OWNED, LEASED OR OPERATED BY BORROWER OR ANY OF ITS SUBSIDIARIES
OR, TO THE KNOWLEDGE OF BORROWER, ANY PROPERTY ADJACENT TO ANY SUCH PROPERTY,
WHICH LIABILITY

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COULD REASONABLY BE EXPECTED TO CAUSE A MATERIAL ADVERSE EFFECT; AND (E) THERE
HAS HERETOFORE BEEN NO RELEASE OF ANY HAZARDOUS MATERIAL ON, UNDER OR ABOUT SUCH
PROPERTY, OR, TO THE KNOWLEDGE OF BORROWER, ANY SUCH ADJACENT PROPERTY, WHICH
RELEASE COULD REASONABLY BE EXPECTED TO CAUSE A MATERIAL ADVERSE EFFECT.  NONE
OF THE CURRENTLY OWNED REAL PROPERTY OR, TO THE ACTUAL KNOWLEDGE OF BORROWER,
CURRENTLY LEASED OR PREVIOUSLY OWNED REAL PROPERTY OF BORROWER OR ANY OF ITS
SUBSIDIARIES IS LISTED OR PROPOSED FOR LISTING ON THE NATIONAL PRIORITIES LIST
PURSUANT TO THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY
ACT OF 1980, AS AMENDED, OR ON THE COMPREHENSIVE ENVIRONMENTAL RESPONSE
COMPENSATION LIABILITY INFORMATION SYSTEM LIST OR ANY MARKET, SUBJECT ONLY TO
OFFICIAL NOTICE OF ISSUANCE.

4.14.                        ACCOUNTING MATTERS.  BORROWER MAINTAINS SYSTEMS OF
INTERNAL ACCOUNTING AND DISCLOSURE CONTROLS AND PROCEDURES SUFFICIENT TO PROVIDE
IN ALL MATERIAL RESPECTS REASONABLE ASSURANCES THAT (A) MATERIAL TRANSACTIONS
ARE EXECUTED IN ACCORDANCE WITH MANAGEMENT’S GENERAL OR SPECIFIC AUTHORIZATION;
(B) MATERIAL TRANSACTIONS ARE RECORDED AS NECESSARY TO PERMIT PREPARATION OF
FINANCIAL STATEMENTS IN CONFORMITY WITH GAAP AND TO MAINTAIN ACCOUNTABILITY FOR
ASSETS; (C) ACCESS TO MATERIAL ASSETS IS PERMITTED ONLY IN ACCORDANCE WITH
MANAGEMENT’S GENERAL OR SPECIFIC AUTHORIZATION; (D) THE RECORDED ACCOUNTABILITY
FOR MATERIAL ASSETS IS COMPARED WITH EXISTING MATERIAL ASSETS AT REASONABLE
INTERVALS AND APPROPRIATE ACTION IS TAKEN WITH RESPECT TO ANY DIFFERENCES; AND
(E) MATERIAL ACCOUNTS, NOTES AND OTHER RECEIVABLES AND INVENTORY ARE RECORDED
ACCURATELY, AND PROPER AND ADEQUATE PROCEDURES ARE IMPLEMENTED TO EFFECT THE
COLLECTION THEREOF ON A CURRENT AND TIMELY BASIS.  BORROWER HAS COMPLIED WITH
ITS SYSTEMS OF INTERNAL ACCOUNTING AND DISCLOSURE CONTROLS AND PROCEDURES IN ALL
MATERIAL RESPECTS AND HAS NOT RECEIVED A WRITTEN NOTIFICATION FROM ANY
ACCOUNTANTS, INDEPENDENT AUDITORS OR OTHER CONSULTANTS CHALLENGING THE ADEQUACY
OR REQUESTING MODIFICATION OF SUCH SYSTEMS.  BORROWER’S SYSTEMS OF INTERNAL
ACCOUNTING AND DISCLOSURE CONTROLS AND PROCEDURES IN ALL MATERIAL RESPECTS (X)
ARE SUFFICIENT TO ENSURE THAT INFORMATION REQUIRED TO BE DISCLOSED BY BORROWER
IN THE REPORTS THAT IT FILES AND SUBMITS TO THE SEC UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, IS ACCUMULATED, RECORDED, PROCESSED,
COMMUNICATED TO BORROWER’S PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL
OFFICER, SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SEC’S
RULES AND FORMS, (Y) CONTAIN NO DEFICIENCIES IN THE DESIGN OR OPERATION OF SUCH
CONTROLS AND PROCEDURES WHICH COULD MATERIALLY ADVERSELY AFFECT BORROWER’S
ABILITY TO SO ACCUMULATE, RECORD, PROCESS, COMMUNICATE, SUMMARIZE AND REPORT
FINANCIAL AND OTHER RELEVANT INFORMATION AND (Z) ARE SUFFICIENT TO SATISFY
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 AND RELATED RULES PROMULGATED
THEREUNDER.

SECTION 5
REPRESENTATIONS AND WARRANTIES BY LENDER

Lender represents and warrants to Borrower that:

5.1.                              FORMATION.  LENDER (A) IS A LIMITED LIABILITY
COMPANY DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF
THE STATE OF NEVADA, AND (B) HAS ALL REQUISITE POWER AND AUTHORITY AND ALL
REQUISITE GOVERNMENTAL LICENSES, AUTHORIZATIONS, CONSENTS AND APPROVALS TO (I)
OWN ITS ASSETS AND CARRY ON ITS BUSINESS, AND (II) EXECUTE, DELIVER AND PERFORM
ITS OBLIGATIONS UNDER THIS AGREEMENT.

5.2.                              AUTHORITY.  THE EXECUTION, DELIVERY AND
PERFORMANCE BY LENDER OF THIS AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL
NECESSARY COMPANY ACTION, AND DO NOT (A) CONTRAVENE THE TERMS OF LENDER’S
ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT; (B) CONFLICT WITH OR RESULT IN
ANY BREACH OR CONTRAVENTION OF, OR THE CREATION OF ANY LIEN UNDER (I) ANY
CONTRACTUAL OBLIGATION TO WHICH LENDER IS A PARTY, OR (II) ANY ORDER,
INJUNCTION, WRIT OR DECREE OF ANY GOVERNMENTAL AUTHORITY OR ANY ARBITRAL AWARD
TO WHICH LENDER OR ITS PROPERTY IS SUBJECT; OR (C) VIOLATE ANY LAW.

7

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5.3.                              GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. 
NO APPROVAL, CONSENT, EXEMPTION, AUTHORIZATION, OR OTHER ACTION BY, OR NOTICE
TO, OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR ANY OTHER PERSON WITH RESPECT
TO ANY MATERIAL CONTRACTUAL OBLIGATION IS NECESSARY OR REQUIRED IN CONNECTION
WITH THE EXECUTION, DELIVERY OR PERFORMANCE BY, OR ENFORCEMENT AGAINST, LENDER
OF THIS AGREEMENT, OTHER THAN THOSE THAT HAVE ALREADY BEEN OBTAINED AND ARE IN
FULL FORCE AND EFFECT.

5.4.                              BINDING EFFECT.  THIS AGREEMENT HAS BEEN DULY
EXECUTED AND DELIVERED BY LENDER.  THIS AGREEMENT CONSTITUTES A LEGAL, VALID AND
BINDING OBLIGATION OF LENDER, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS EXCEPT AS
ENFORCEABILITY MAY BE LIMITED BY APPLICABLE BANKRUPTCY OR SIMILAR LAWS OR BY
EQUITABLE PRINCIPLES RELATING TO ENFORCEABILITY.

SECTION 6
DEFAULT AND REMEDIES.

6.1.                              EVENTS OF DEFAULT.  BORROWER WILL BE IN
DEFAULT UNDER THIS AGREEMENT UPON THE OCCURRENCE OF ANY ONE OR MORE OF THE
FOLLOWING EVENTS (“EVENT OF DEFAULT”):

(A)                                  BORROWER FAILS TO MAKE ANY PAYMENT DUE
UNDER THE NOTE, WITHIN FIVE (5) DAYS AFTER THE DATE DUE (PROVIDED THAT SUCH FIVE
(5) DAY PERIOD SHALL NOT APPLY ON ANY PAYMENT DUE ON THE MATURITY DATE, AS
DEFINED IN THE NOTE), OR BORROWER FAILS TO MAKE ANY PAYMENT DEMANDED BY LENDER
UNDER ANY OTHER LOAN DOCUMENT, WITHIN TEN (10) DAYS AFTER THE DATE DUE OR AFTER
WRITTEN DEMAND BY LENDER IF NO DUE DATE IS STATED THEREFOR; OR

(B)                                 BORROWER FAILS TO TIMELY OBSERVE, PERFORM
AND COMPLY WITH ANY COVENANT CONTAINED IN THIS AGREEMENT OTHER THAN THOSE
REFERRED TO IN CLAUSE (A), AND DOES NOT EITHER CURE THAT FAILURE WITHIN THIRTY
(30) DAYS AFTER WRITTEN NOTICE FROM LENDER, OR, IF THE DEFAULT CANNOT BE CURED
IN THIRTY (30) DAYS, WITHIN A REASONABLE TIME BUT NOT TO EXCEED NINETY (90) DAYS
AFTER WRITTEN NOTICE; OR

(C)                                  BORROWER BECOMES INSOLVENT OR THE SUBJECT
OF ANY BANKRUPTCY OR OTHER VOLUNTARY OR INVOLUNTARY PROCEEDING, IN OR OUT OF
COURT, FOR THE ADJUSTMENT OF DEBTOR-CREDITOR RELATIONSHIPS; OR

(D)                                 BORROWER DISSOLVES, TERMINATES, OR
LIQUIDATES; OR

(E)                                  ANY REPRESENTATION OR WARRANTY MADE OR
GIVEN BY BORROWER IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT PROVES TO HAVE
BEEN FALSE OR MISLEADING IN ANY MATERIAL RESPECT AT THE TIME GIVEN; OR

(F)                                    A DEFAULT IS DECLARED OR OCCURS UNDER ANY
OF THE OTHER LOAN DOCUMENTS (AND, IF A CURE PERIOD IS PROVIDED WITH RESPECT TO
SAID DEFAULT, SAID DEFAULT IS NOT FULLY CURED WITHIN THE PERIOD PROVIDED IN SAID
LOAN DOCUMENT FOR CURE OF SAID DEFAULT); OR

(G)                                 A FINAL, NON-APPEALABLE JUDGMENT FROM A
COURT OF COMPETENT JURISDICTION IN AN AMOUNT GREATER THAN FIVE MILLION DOLLARS
($5,000,000) IN EXCESS OF ANY INSURANCE COVERAGE IS ENTERED AGAINST BORROWER; OR

(H)                                 BORROWER OR ANY OF ITS SUBSIDIARIES DEFAULTS
UNDER ANY INSTRUMENT FOR INDEBTEDNESS OR BORROWED MONEY (OTHER THAN ANY
ACQUISITION DEBT, AND OTHER THAN ANY INDEBTEDNESS OF MAGNETEK S.P.A) THAT
RESULTS IN THE ACCELERATION OF SUCH INDEBTEDNESS; OR

(I)                                     BORROWER EXPERIENCES A MATERIAL ADVERSE
EFFECT.

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6.2.                              REMEDIES.  IF AN EVENT OF DEFAULT OCCURS UNDER
THIS AGREEMENT, (A) LENDER MAY EXERCISE ANY RIGHT OR REMEDY WHICH IT HAS UNDER
ANY OF THE LOAN DOCUMENTS, OR WHICH IS OTHERWISE AVAILABLE AT LAW OR IN EQUITY
OR BY STATUTE, AND ALL OF LENDER’S RIGHTS AND REMEDIES SHALL BE CUMULATIVE, (B)
LENDER SHALL HAVE THE RIGHT TO SET-OFF AND APPLY, TO THE EXTENT THEREOF AND TO
THE MAXIMUM EXTENT PERMITTED BY LAW, ANY AND ALL DEPOSITS, FUNDS, OR ASSETS AT
ANY TIME HELD AND ANY AND ALL OTHER INDEBTEDNESS AT ANY TIME OWING BY LENDER TO
OR FOR THE CREDIT OR ACCOUNT OF BORROWER AGAINST ANY INDEBTEDNESS OWNING UNDER
THE NOTE IMMEDIATELY UPON THE OCCURRENCE OF ANY DEFAULT NOTWITHSTANDING ANY
NOTICE REQUIREMENTS, GRACE OR CURE PERIODS, AND (C) ALL OF BORROWER’S
OBLIGATIONS UNDER THE LOAN DOCUMENTS SHALL BECOME IMMEDIATELY DUE AND PAYABLE
WITHOUT NOTICE OF DEFAULT, PRESENTMENT OR DEMAND FOR PAYMENT, PROTEST OR NOTICE
OF NONPAYMENT OR DISHONOR, OR OTHER NOTICES OR DEMANDS OF ANY KIND OR CHARACTER,
ALL AT LENDER’S OPTION, EXERCISABLE IN ITS SOLE DISCRETION.

6.3.                              CURE PERIODS.  ALL NOTICE AND CURE PERIODS
PROVIDED IN THIS AGREEMENT OR IN ANY LOAN DOCUMENT SHALL RUN CONCURRENTLY WITH
ANY NOTICE OR CURE PERIODS PROVIDED BY LAW.

SECTION 7
MISCELLANEOUS PROVISIONS

7.1.                              NO WAIVER; CONSENTS.  NO ALLEGED WAIVER BY
LENDER IS EFFECTIVE UNLESS IN WRITING, AND NO WAIVER MAY BE CONSTRUED AS A
CONTINUING WAIVER.  NO WAIVER IS IMPLIED FROM ANY DELAY OR FAILURE BY LENDER TO
TAKE ACTION ON ACCOUNT OF ANY DEFAULT OF BORROWER.  CONSENT BY LENDER TO ANY ACT
OR OMISSION BY BORROWER MAY NOT BE CONSTRUED AS A CONSENT TO ANY OTHER OR
SUBSEQUENT ACT OR OMISSION.

7.2.                              NO THIRD PARTIES BENEFITED.  THIS AGREEMENT IS
MADE AND ENTERED INTO FOR THE SOLE PROTECTION AND BENEFIT OF LENDER AND BORROWER
AND THEIR SUCCESSORS AND ASSIGNS.  NO TRUST FUND IS CREATED BY THIS AGREEMENT
AND NO OTHER PERSONS OR ENTITIES HAVE ANY RIGHT OF ACTION UNDER THIS AGREEMENT
OR ANY RIGHT TO THE LOAN FUNDS.

7.3.                              NOTICES.  ANY AND ALL NOTICES AND DEMANDS BY
EITHER PARTY HERETO TO THE OTHER PARTY, REQUIRED OR DESIRED TO BE GIVEN
HEREUNDER SHALL BE IN WRITING AND SHALL BE VALIDLY GIVEN ONLY IF (I) PERSONALLY
DELIVERED, (II) DEPOSITED IN THE UNITED STATES MAIL, CERTIFIED OR REGISTERED,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, OR (III) IF MADE BY FEDERAL EXPRESS
OR OTHER DELIVERY SERVICE WHICH KEEPS RECORDS OF DELIVERIES AND ATTEMPTED
DELIVERIES.  SERVICE SHALL BE CONCLUSIVELY DEEMED MADE ON THE FIRST BUSINESS DAY
DELIVERY IS ATTEMPTED OR UPON RECEIPT, WHICHEVER IS SOONER, AND SENT TO THE
ADDRESS SET FORTH BELOW THE RECEIVING PARTY’S SIGNATURE SET FORTH BELOW  THOSE
ADDRESSES MAY BE CHANGED BY EITHER PARTY BY NOTICE TO THE OTHER PARTY, WHICH
NOTICE OF CHANGE SHALL BE EFFECTIVE UPON ACTUAL RECEIPT BY THE OTHER PARTY.

7.4.                              ATTORNEYS’ FEES.  IF ANY LAWSUIT OR
ARBITRATION IS COMMENCED WHICH ARISES OUT OF, OR WHICH RELATES TO THIS
AGREEMENT, THE LOAN DOCUMENTS OR THE LOAN, INCLUDING ANY ALLEGED TORT ACTION,
REGARDLESS OF WHICH PARTY COMMENCES THE ACTION, THE PREVAILING PARTY IS ENTITLED
TO RECOVER FROM EACH OTHER PARTY SUCH SUMS AS THE COURT, REFEREE OR ARBITRATOR
MAY ADJUDGE TO BE REASONABLE ATTORNEYS’ FEES IN THE ACTION OR PROCEEDING, IN
ADDITION TO COSTS AND EXPENSES OTHERWISE ALLOWED BY LAW.  ANY SUCH ATTORNEYS’
FEES INCURRED BY EITHER PARTY IN ENFORCING A JUDGMENT IN ITS FAVOR UNDER THIS
AGREEMENT ARE RECOVERABLE SEPARATELY FROM AND IN ADDITION TO ANY OTHER AMOUNT
INCLUDED IN SUCH JUDGMENT, AND SUCH ATTORNEYS’ FEES OBLIGATIONS ARE INTENDED TO
BE SEVERABLE FROM THE OTHER PROVISIONS OF THIS AGREEMENT AND TO SURVIVE AND NOT
BE MERGED INTO ANY SUCH JUDGMENT.  IN ALL OTHER SITUATIONS, INCLUDING ANY
BANKRUPTCY OR OTHER VOLUNTARY OR INVOLUNTARY PROCEEDING, IN OR OUT OF COURT, FOR
THE ADJUSTMENT OF DEBTOR-CREDITOR RELATIONSHIPS, BORROWER AGREES TO PAY ALL OF
LENDER’S REASONABLE OUT-OF-POCKET COSTS AND EXPENSES, INCLUDING REASONABLE
OUT-OF-POCKET ATTORNEYS’ FEES, WHICH MAY BE INCURRED IN ANY EFFORT TO COLLECT OR
ENFORCE THE LOAN OR ANY PART OF IT OR ANY TERM OF ANY LOAN DOCUMENT.

9

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7.5.                              HEIRS, SUCCESSORS AND ASSIGNS.  THE TERMS OF
THIS AGREEMENT SHALL BIND AND BENEFIT THE HEIRS, LEGAL REPRESENTATIVES,
SUCCESSORS AND ASSIGNS OF THE PARTIES; PROVIDED, HOWEVER, THAT NEITHER LENDER
NOR BORROWER MAY ASSIGN THIS AGREEMENT WITHOUT THE PRIOR WRITTEN CONSENT OF THE
OTHER.

7.6.                              INTERPRETATION.  THE LANGUAGE OF THIS
AGREEMENT MUST BE CONSTRUED AS A WHOLE ACCORDING TO ITS FAIR MEANING, AND NOT
STRICTLY FOR OR AGAINST ANY PARTY.  THE WORD “INCLUDE(S)” MEANS “INCLUDE(S),
WITHOUT LIMITATION,” AND THE WORD “INCLUDING” MEANS “INCLUDING, BUT NOT LIMITED
TO.”

7.7.                              TIME OF THE ESSENCE.  TIME IS OF THE ESSENCE
IN THE PERFORMANCE OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

7.8.                              SEVERABILITY. IF IT IS DETERMINED BY A COURT
OF COMPETENT JURISDICTION, GOVERNMENT ACTION OR BINDING ARBITRATION THAT ANY
PROVISION OF THIS AGREEMENT (OR PART THEREOF) IS INVALID, ILLEGAL, OR OTHERWISE
UNENFORCEABLE IN ANY JURISDICTION, SUCH PROVISION SHALL BE ENFORCED IN SUCH
JURISDICTION AS NEARLY AS POSSIBLE IN ACCORDANCE WITH THE STATED INTENTION OF
THE PARTIES, WHILE THE REMAINDER OF THIS AGREEMENT SHALL REMAIN IN FULL FORCE
AND EFFECT AND BIND THE PARTIES ACCORDING TO ITS TERMS, AND ANY SUCH
DETERMINATION SHALL NOT INVALIDATE OR RENDER UNENFORCEABLE SUCH PROVISION IN ANY
OTHER JURISDICTION.  TO THE EXTENT ANY PROVISION OF THIS AGREEMENT (OR PART
THEREOF) CANNOT BE ENFORCED IN ACCORDANCE WITH THE STATED INTENTIONS OF THE
PARTIES, SUCH PROVISION (OR PART THEREOF) SHALL BE DEEMED NOT TO BE A PART OF
THIS AGREEMENT; PROVIDED THAT IN SUCH EVENT THE PARTIES SHALL USE THEIR
REASONABLE EFFORTS TO NEGOTIATE, IN GOOD FAITH, A SUBSTITUTE, VALID AND
ENFORCEABLE PROVISION WHICH MOST NEARLY EFFECTS THE PARTIES’ INTENT IN ENTERING
INTO THIS AGREEMENT.

7.9.                              COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED
IN ONE OR MORE COUNTERPARTS, EACH OF WHICH IS, FOR ALL PURPOSES DEEMED AN
ORIGINAL AND ALL SUCH COUNTERPARTS TAKEN TOGETHER, CONSTITUTE ONE AND THE SAME
INSTRUMENT.

7.10.                        CHOICE OF LAW; VENUE.  THIS AGREEMENT IS GOVERNED
BY NEVADA LAW WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPALS.  ANY ACTION
BROUGHT HEREUNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS SHALL BE BROUGHT IN
THE STATE OR FEDERAL COURTS LOCATED IN CLARK COUNTY, NEVADA.  EACH PARTY WAIVES
ANY CLAIM OF INCONVENIENT FORUM.

7.11.                        INTEGRATION.  THIS AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS, SETS FORTH THE ENTIRE AGREEMENT AND UNDERSTANDING OF THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND MERGES AND SUPERSEDES ALL
PRIOR UNDERSTANDINGS (WHETHER WRITTEN, VERBAL OR IMPLIED) WITH RESPECT THERETO.

7.12.                        MODIFICATION; AMENDMENT.  NO MODIFICATION OF, OR
AMENDMENT TO, THIS AGREEMENT SHALL BE EFFECTIVE UNLESS IN WRITING SIGNED BY BOTH
PARTIES.  THIS AGREEMENT SHALL NOT BE SUPPLEMENTED OR MODIFIED BY ANY COURSE OF
DEALING OR OTHER TRADE USAGE.

7.13.                        HEADINGS.  ALL SECTION HEADINGS ARE FOR CONVENIENCE
ONLY AND SHALL NOT BE CONSTRUED AS PART OF THIS AGREEMENT OR AS A LIMITATION OR
EXPANSION OF THE SCOPE OF THE SECTIONS TO WHICH THEY REFER.

7.14.                        ACTIONS.  LENDER HAS THE RIGHT, BUT NOT THE
OBLIGATION, TO COMMENCE, APPEAR IN, AND DEFEND ANY ACTION OR PROCEEDING WHICH
MIGHT AFFECT ITS RIGHTS, DUTIES OR LIABILITIES RELATING TO THE LOAN OR ANY OF
THE LOAN DOCUMENTS.  BORROWER MUST PAY WITHIN 30 DAYS OF WRITTEN DEMAND ALL OF
LENDER’S REASONABLE OUT-OF-POCKET COSTS, EXPENSES, AND LEGAL FEES AND EXPENSES
OF LENDER’S COUNSEL INCURRED IN THOSE ACTIONS OR PROCEEDINGS.

10

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7.15.                        LOAN COMMISSION.  LENDER IS NOT OBLIGATED TO PAY
ANY BROKERAGE COMMISSION OR FEE IN CONNECTION WITH OR ARISING OUT OF THE LOAN.

7.16.                        CREDIT VERIFICATION.  BORROWER HEREBY AUTHORIZES
LENDER TO CHECK ANY CREDIT REFERENCES AND OBTAIN CREDIT REPORTS FROM CREDIT
REPORTING AGENCIES OF LENDER’S CHOICE IN CONNECTION WITH ANY MONITORING,
COLLECTION OR FUTURE TRANSACTION CONCERNING THE LOAN, INCLUDING ANY
MODIFICATION, EXTENSION OR RENEWAL OF THE LOAN.

7.17.                        WAIVER OF JURY TRIAL.  BORROWER WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER AND LENDER MAY BE PARTIES,
ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY PERTAINING TO, THIS AGREEMENT,
THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS.  IT IS AGREED AND UNDERSTOOD THAT
THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO THIS AGREEMENT.  THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY BORROWER, AND BORROWER HEREBY REPRESENTS THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. 
BORROWER FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE
SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL
COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.

7.18.                        CONFIDENTIALITY.  LENDER AGREES TO KEEP
CONFIDENTIAL AND NOT USE FOR ANY PURPOSE OTHER THAN EVALUATING AND MONITORING
THE LOAN OR BRINGING ANY ACTION FOR THE ENFORCEMENT OF THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, ANY COLLECTION ACTION, ANY CONFIDENTIAL,
NONPUBLIC OR PROPRIETARY INFORMATION ABOUT BORROWER AND ITS SUBSIDIARIES THAT IT
MAY RECEIVE PURSUANT TO THIS AGREEMENT, EXCEPT TO THE EXTENT IN THE PUBLIC
DOMAIN THROUGH NO FAULT OF LENDER OR ITS AFFILIATES.

SIGNATURE PAGE FOLLOWS.

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IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of the
date first above written.

Borrower:

 

 

 

 

 

Power-One, Inc.,

 

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Paul E. Ross

 

 

Paul E. Ross, Chief Financial Officer

 

 

 

 

 

 

 

Address of Borrower:

 

 

 

 

 

Power-One, Inc.

 

 

740 Calle Plano

 

 

Camarillo, CA 93012

 

 

Attn: General Counsel

 

 

 

 

 

 

 

 

Lender:

 

 

 

 

 

PWER Bridge, LLC,

 

 

a Nevada limited liability company

 

 

 

 

 

By:

/s/ Mark Doramus

 

 

Mark Doramus, Manager

 

 

 

 

 

 

 

Address of Lender:

 

 

 

 

 

PWER Bridge, LLC

 

 

c/o David Knight

 

 

Stephens, Inc.

 

 

111 Center Street

 

 

Little Rock, Arkansas 72201

 

 

 

 

 

Section 1.7 above is agreed to by:

 

 

 

 

 

Stephens Investment Holdings, LLC,

 

 

an Arkansas limited liability company

 

 

 

 

 

By:

/s/ Kathy Bryant

 

 

Kathy Bryant, Vice President

 

 

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