Exhibit 10.1

 

EXECUTION VERSION

 

SECOND AMENDMENT TO LOAN AGREEMENT

 

THIS SECOND AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is entered into as of
February 4, 2011, among Vitesse Semiconductor Corporation, a Delaware
corporation (the “Borrower”), the other Loan Parties (as defined below), and
Whitebox VSC Ltd., a British Virgin Islands business company (the “Agent”). 
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Loan Agreement dated as of August 23, 2007, as
amended by that First Amendment to Loan Agreement, dated as of October 16, 2009
(the “First Amendment”; such Loan Agreement as amended by the First Amendment,
the “Existing Loan Agreement”), and as further amended hereby, by and among the
lenders from time to time signatory thereto (collectively the “Lenders” and
individually each a “Lender”), the Borrower, and the Agent, as one of the
Lenders and as agent for the Lenders (the “Loan Agreement”).

 

RECITALS

 

WHEREAS, the Borrower desires to make certain amendments to the Loan Agreement
as set forth herein, and pursuant to Section 9.1 of the Loan Agreement such
amendments may only be made with the written consent of the Required Lenders.

 

WHEREAS, the Required Lenders hereby consent to such amendments as set forth
herein.

 

AGREEMENT

 

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

 

1.                                       Amendments to the Loan Agreement.

 

(a)                                  The Table of “Exhibits and Schedules” shall
be amended by replacing the table in its entirety with the following:

 

EXHIBITS AND SCHEDULES

 

 

Exhibit A

 

[Reserved]

Exhibit B

 

Form of Opinion of Counsel

Exhibit C

 

Form of Assignment Agreement

Exhibit D

 

Form of Letters of Consent

Exhibit E

 

Form of Term A Note

Exhibit F

 

Form of Term B Note

Exhibit G

 

Form of Repurchase Event Purchase Notice

Exhibit H

 

Form of Conversion Notice

Exhibit I

 

Form of Fundamental Change Conversion Notice

 

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Schedule 1.1

 

Term Loan Commitment Amounts

Schedule 3.1

 

Locations of Collateral

Schedule 4.3

 

Conflicts and Defaults

Schedule 4.5

 

Existing Litigation

Schedule 4.6

 

Environmental Disclosures

Schedule 4.8

 

Lease Defaults

Schedule 4.9

 

Taxes

Schedule 4.11

 

Burdensome Restrictions

Schedule 4.16

 

Subsidiaries

Schedule 6.2

 

Permitted Dispositions

Schedule 6.11

 

Investments

Schedule 6.12

 

Existing Indebtedness

Schedule 6.13

 

Existing Liens

Schedule 6.14

 

Existing Contingent Liabilities

 

(b)                                 Section 1.1 of the Loan Agreement is hereby
amended by adding the following definitions in alphabetical order:

 

“2.6(a)(ii) Prepayment Date”:  As defined in Section 2.6(a)(iv).

 

“2.6(b) Prepayment Date”:  As defined in Section 2.6(b).

 

“Additional Shares” As defined in Section 11.2(c)(iii).

 

“Applicable Stock Price”:  As defined in Section 10.12(e).

 

“Board of Directors”:  Either the board of directors of the Borrower or any
committee of that board empowered to act for it with respect to this Loan
Agreement.

 

“Board Resolution”:  A resolution duly adopted by the Board of Directors, a copy
of which, certified by the Secretary or an Assistant Secretary of the Borrower
to be in full force and effect on the date of such certification, shall have
been delivered to the Agent.

 

“Cash-Only Settlement Amount” has the meaning specified in Section 10.12(e).

 

“Cash Settlement Averaging Period” has the meaning specified in Section 10.12.

 

“Closing Sale Price”:  The closing sale price of any share of Common Stock on
any Trading Day (or if no closing sale price is reported, the average of the
closing bid and closing ask prices or, if more than one in either case, the
average of the average closing bid

 

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and the average closing ask prices) on such date as reported in composite
transactions for the principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national or regional securities exchange, as reported by the Nasdaq System or by
the National Quotation Bureau Incorporated.  In the absence of such a quotation,
the Borrower shall determine the Closing Sale Price on the basis it considers
appropriate.

 

“Collateral Documents”:  The Security Documents.

 

“Conversion Agent”:  Any Person authorized by the Borrower to convert Term B
Loans in accordance with Article X.

 

“Conversion Price”:  As defined in Section 10.1.

 

“Conversion Retraction Period”:  As defined in Section 10.12(c).

 

“corporation”:  means corporations, associations, limited liability companies,
companies and business associations.

 

“Current Market Price”:  As defined in Section 10.4(g).

 

“Determination Date”:  As defined in Section 10.12(d).

 

“Exchange Act”:  The Securities Exchange Act of 1934, as amended.

 

“Existing Term Loans”:  The Term Loans (as defined in the Existing Loan
Agreement) outstanding under the First Amended Loan Agreement immediately prior
to the effectiveness of the Second Amendment.

 

“Existing Term Notes”:  The Term Notes outstanding immediately prior to the
effectiveness of the Second Amendment, evidencing obligations of the Borrower to
repay the Existing Term Loans.

 

“Expiration Time”:  As defined in Section 10.4(f).

 

“fair market value”:  As defined in Section 10.4(g).

 

“First Amended Loan Agreement”:  This Agreement as amended by the First
Amendment and as may have been further amended, supplemented or modified prior
to the date hereof.

 

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“Fundamental Change”:  Any transaction or event (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) in connection with which 50% or
more of the Common Stock is exchanged for, converted into, acquired for or
constitutes solely the right to receive, consideration which is not at least 90%
common stock that is (i) listed on, or immediately after the transaction or
event will be listed on, a United States national securities exchange or
(ii) approved, or immediately after the transaction or event will be approved,
for quotation on the Nasdaq National Market or any similar United States system
of automated dissemination of quotations of securities prices.

 

“Fundamental Change Conversion” As defined in Section 10.2.

 

“Make-Whole Premium”:  As defined in Section 11.2(b).

 

“Make-Whole Table”:  As defined in Section 11.2(c)(iii).

 

“Merger Amendment”:  As defined in Section 10.11(c).

 

“Nasdaq National Market”:  The National Association of Securities Dealers
Automated Quotation National Market or any successor national securities
exchange or automated over-the-counter trading market in the United States.

 

“Optional Prepayment Fee”:  As defined in Section 2.6(a)(v).

 

“Place of Conversion”:  Any city in which any Conversion Agent is located.

 

“Prepayment Event Notice”:  As defined in Section 2.6(b)(i)(A).

 

“Purchased Shares”:  As defined in Section 10.4(f).

 

“Record Date”:  As defined in Section 10.4(g).

 

“Reference Dealer”:  A dealer engaged in the trading of convertible securities.

 

“Reference Period”:  As defined in Section 10.4(d).

 

“Repurchase Date”: As defined in Section 12.1(a).

 

“Repurchase Event”:  As defined in Section 12.1(a).

 

“Repurchase Event Notice”:  As defined in Section 12.3.

 

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“Repurchase Event Purchase Notice”:  As defined in Section 12.3.

 

“Repurchase Price”:  As defined in Section 12.1(a).

 

“Repurchase Right”:  As defined in Section 12.1(a).

 

“Required Term A Lenders”:  As defined in Section 7.2.

 

“Securities Act”:  the Securities Act of 1933, as amended.

 

“Second Amendment”:  The Second Amendment to Loan Agreement dated as of
February 4, 2011.

 

“Second Amendment Effective Date”:  February 4, 2011.

 

“Stock Price”:  As defined in Section 11.2(c).

 

“Stock Price Cap”  As defined in Section 11.2(b).

 

“Stock Price Threshold”  As defined in Section 11.2(b).

 

“Term A Lender”:  a Lender with outstanding Term A Loans.

 

“Term B Lender”:  a Lender with outstanding Term B Loans.

 

“Term A Loan”  Each Existing Term Loan that is not converted to a Term B Loan
pursuant to Section 2.1(c) on the Second Amendment Effective Date.

 

“Term B Loan”  Each Existing Term Loan that is converted to a Term B Loan
pursuant to Section 2.1(c) on the Second Amendment Effective Date.

 

“Term A Loan Maturity Date”:  February 4, 2014.

 

“Term B Loan Maturity Date”:  October 30, 2014.

 

“Term A Loan Percentage”: With respect to the Term A Lenders the percentage
equivalent of a fraction, the numerator of which is the principal amount of the
then outstanding Term A Loans and the denominator of which is the sum of the
then outstanding Term Loans.

 

“Term B Loan Percentage”:  With respect to the Term B Lenders the percentage
equivalent of a fraction, the numerator of which is the principal amount of the
then outstanding Term B Loans and the denominator of which is the sum of the
then outstanding Term Loans.

 

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“Term A Notes”:  The promissory notes of the Borrower, in the form of Exhibit E
hereto, evidencing the obligation of the Borrower to repay the Term A Loans (as
the same may be amended, restated or otherwise modified from time to time).

 

“Term B Notes”:  The promissory notes of the Borrower, in the form of Exhibit F
hereto, evidencing the obligation of the Borrower to repay the Term B Loans (as
the same may be amended, restated or otherwise modified from time to time).

 

“Term A Prepayment Date”:  As defined in Section 2.6(a)(i).

 

“Term B Prepayment Date”:  As defined in Section 2.6(a)(ii).

 

“Trading Day”:

 

(1)                                  if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national security
exchange, a day on which the New York Stock Exchange or such other national
security exchange is open for business;

 

(2)                                  if the applicable security is quoted on the
Nasdaq National Market, a day on which trades may be made thereon; or

 

(3)                                  if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.

 

“Trading Price” of a security on any date of determination means:

 

(1)                                  the closing sale price (or, if no closing
sale price is reported, the last reported sale price) of such security (regular
day) on the New York Stock Exchange on such date;

 

(2)                                  if such security is not listed for trading
on the New York Stock Exchange on any such date, the closing sale price as
reported in the composite transactions for the principal U.S. securities
exchange on which such security is so listed;

 

(3)                                  if such security is not so listed on a U.S.
national or regional securities exchange, the closing sale price as reported by
the Nasdaq National Market;

 

(4)                                  if such security is not so reported, the
last price quoted by Interactive Data Corporation for such security or, if
Interactive

 

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Data Corporation is not quoting such price, a similar quotation service selected
by the Borrower;

 

(5)                                  if such security is not so quoted, the
average of the mid-point of the last bid and ask prices for such security from
at least two dealers recognized as market-makers for such security; or

 

(6)                                  if such security is not so quoted, the
average of the last bid and ask prices for such security from a Reference
Dealer.

 

“Transfer Agent”:  means any Person, which may be the Borrower, authorized by
the Borrower to exchange or register the transfer of the Term B Loans.

 

“Trigger Event”:  As defined in Section 10.4(d).

 

(c)                                  Section 1.1 of the Loan Agreement is hereby
amended by deleting the existing definition of the following terms and replacing
them with the following:

 

“Asset Sale”:  The sale by the Borrower or any of its Subsidiaries to any Person
(other than a sale between any Borrower and any Subsidiary) of (i) any of the
Equity Interests of any of the Borrower’s Subsidiaries, (ii) substantially all
of the assets of any division or line of business of the Borrower or any of its
Subsidiaries or (iii) any other assets (whether tangible or intangible) of any
Borrower or any of its Subsidiaries to the extent that the aggregate value of
all such assets sold exceeds $1,000,000 in any one fiscal year (but only to such
extent).

 

“Business Day”:  When used with respect to any Place of Payment or Place of
Conversion, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment or Place of
Conversion, as the case may be, are authorized or obligated by law to close;
otherwise any day (other than a Saturday, Sunday or legal holiday in the State
of Minnesota) on which banks are permitted to be open in New York, New York.

 

“Common Stock”:  Any stock of any class of the Borrower which has no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Borrower and which is
not subject to redemption by the Borrower.  However, subject to the provisions
of Section 10.11, shares issuable on conversion of Term B Loans shall include
only shares of the class designated as Common Stock, par value $0.01 per share,
of the Borrower at the Second Amendment Effective Date or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of

 

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dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Borrower and which are not subject
to redemption by the Borrower; provided, however, that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.

 

“Effective Rate”:  With respect to the Term A Loans, 10.50% per annum, and with
respect to the Term B Loans, 8.00% per annum.

 

“Immediately Available Funds”:  With respect to interest payments on the Term
Loans, cash; with respect to all other payments, funds with good value on the
day and in the city in which payment is received.

 

“Loan Documents”:  This Agreement, the Term Notes and the Security Documents, in
each case as amended, supplemented or otherwise modified from time to time.

 

“Maturity Date”:  In the case of a Term A Loan, the Term A Loan Maturity Date,
and in the case of a Term B Loan, the Term B Loan Maturity Date, as applicable.

 

“Restricted Payments”:  With respect to the Borrower and its Subsidiaries,
collectively, all dividends (other than dividends from any wholly-owned
subsidiary to another wholly-owned subsidiary of the Borrower) or other
distributions with respect to the Equity Interests of such Borrower or
Subsidiary of any nature (cash, Equity Interests other than common stock, assets
or otherwise), and all payments on any class of Equity Interests (including
warrants, options or rights therefor) issued by the Borrower or such Subsidiary,
whether such Equity Interests are authorized or outstanding on the Closing Date
or at any time thereafter and any redemption or purchase of, or distribution in
respect of, any of the foregoing, whether directly or indirectly.

 

“Term Loan Commitment”:  With respect to a Term A Lender, the commitment of such
Lender to provide Term A Loans to the Borrower, with respect to a Term B Lender,
the commitment of such Lender to provide Term B Loans to the Borrower.

 

“Term Loan Percentage”:  (a) With respect to any Lender and the Term A Loans,
the percentage equivalent of a fraction, the numerator of which is the principal
amount of the Term A Loans of

 

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such Lender and the denominator of which is the sum of the Term A Loans of all
the Lenders and (b) with respect to any Lender and the Term B Loans, the
percentage equivalent of a fraction, the numerator of which is the principal
amount of the Term B Loans of such Lender and the denominator of which is the
sum of the Term B Loans of all the Lenders.

 

“Term Loans”:  The Term A Loans, and the Term B Loans.  “Term Loan” refers to a
Term A Loan or a Term B Loan, as applicable.

 

“Term Notes”:  The Term A Notes and Term B Notes.  “Term Note” refers to a Term
A Note or a Term B Note, as applicable.

 

(d)                                 Section 1.1 shall be further amended by
deleting the definition of “Interest Period” and “Libor Rate”.

 

(e)                                  Section 2.1 is amended to add the
following:

 

(i)                                     Term Loan Conversion.

 

(A)                              Effective as of the Second Amendment Effective
Date, one half of the Existing Term Loans shall be deemed converted into, and
from and after the Second Amendment Effective Date, remain outstanding under
this Agreement as Term A Loans and such Term A Loans shall, for the avoidance of
doubt, have an aggregate initial principal amount of $9,341,806.99, as of the
Second Amendment Effective Date.  The Term A Loans, together with accrued and
unpaid interest thereon, shall become due and payable on the Term A Loan
Maturity Date.

 

(B)                                Effective as of the Second Amendment
Effective Date, the Existing Term Loans not converted into Term A Loans pursuant
to Section 2.1(c)(i), shall be deemed converted into, and from and after the
Second Amendment Effective Date, remain outstanding under this Agreement as
Term B Loans and such Term B Loans shall, for the avoidance of doubt, have an
initial aggregate principal amount of $9,341,806.99, as of the Second Amendment
Effective Date.  The Term B Loans, together with accrued and unpaid interest
thereon, shall become due and payable on the Term B Loan Maturity Date.

 

(f)                                    Section 2.3 of the Loan Agreement is
hereby amended by replacing the Section in its entirety with the following:

 

Notes.  The respective Term A Loans of each Lender, shall be evidenced by a
Term A Note, payable to the order of such Lender in the principal amount equal
to the amount of such Term A Loans held by such Lender.  The respective Term B
Loans of each Lender, shall be evidenced by a Term B Note, payable to the order
of such Lender in

 

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the principal amount equal to the amount of such Term B Loans held by such
Lender.  Upon the Second Amendment Effective Date, the Lenders shall deliver to
the Agent for cancellation their Existing Term Notes.  Each Lender’s Existing
Term Notes shall be replaced by Term Notes evidencing the Term Loans held by
such Lender immediately after the Second Amendment Effective Date.  Each Lender
shall enter in its ledgers and records the amount of its Term A Loans and Term B
Loans and the payments made thereon, and each Lender is authorized by the
Borrower to enter on a schedule attached to its respective Term Notes, a record
of the Term Loans evidenced thereby and payments made thereon; provided,
however, that the failure by any Lender to make any such entry or any error in
making such entry shall not limit or otherwise affect the obligation of the
Borrower hereunder and on the Term Notes, and, in all events, the principal
amounts owing by the Borrower in respect of the Term Notes shall be the
aggregate amount of all Term A Loans and Term B Loans made by the Lenders less
all payments of principal in respect thereof made by the Borrower.

 

(g)                                 Section 2.4(a) is amended to read in its
entirety as follows:

 

Subject to paragraphs (b) and (c) below, the Term Loans shall bear interest on
the unpaid principal amount thereof at the Effective Rate applicable to such
Term Loans.

 

(h)                                 Section 2.6(a) is hereby amended by
replacing it in its entirety with the following:

 

(i)                                     Until six-months after the Second
Amendment Effective Date (the “Term A Prepayment Date”) the Borrower may prepay
outstanding Term A Loans, in whole or from time to time in part, by paying to
the Agent for disbursement to the applicable Lenders an amount equal to 100% of
the principal amount thereof plus accrued but unpaid interest thereon; provided
that Borrower may not prepay any of the Term A Loans after the Term A Prepayment
Date.

 

(ii)                                  On or after October 30, 2011 (the “Term B
Prepayment Date”), the Borrower may prepay outstanding Term B Loans, in whole or
from time to time in part, by paying to the Agent for disbursement to the
applicable Lenders an amount equal to 100% of the principal amount thereof plus
accrued but unpaid interest thereon, but only if the closing sale price of the
Common Stock has been at least 130% of the Conversion Price then in effect for
at least 20 Trading Days during any 30 consecutive Trading Day period ending on
the day prior to the date notice of prepayment is given; provided that no such
prepayment shall be made prior to the Term B Prepayment Date.  The Borrower may
not prepay or provide notice of prepayment of the Term B Loans pursuant to this
Section 2.6(a)(ii) on any date that is (a) subsequent to the execution of

 

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any agreement that is reasonably likely to result in a Fundamental Change and
(b) prior to 45 days after the occurrence of a Fundamental Change resulting from
such agreement or the cancellation of such agreement.

 

(iii)          All prepayments under Section 2.6(a)(i) shall require three
(3) Business Days’ prior written notice to the Agent.  All prepayments under
Section 2.6(a)(ii) shall be made in accordance with clause (iv) hereof and
require not less than twenty (20) Business Days’ and not more than sixty (60)
Business Days’ prior written notice to the Agent. Any written notice by the
Borrower of its election to prepay under either Section 2.6(a)(i) or (ii) shall
be irrevocable. Each partial prepayment shall be in a minimum aggregate amount
for all the Lenders of $100,000 or an integral multiple thereof. Amounts prepaid
on any Term Loan under this Section 2.6(a) shall be for the account of each
Lender in proportion to its respective Term Loan Percentage.

 

(iv)          Any notice of prepayment made under Section 2.6(a)(ii) shall
state: (A) such intended prepayment date (the “2.6(a)(ii) Prepayment Date”);
(B) the aggregate principal amount of Term B Loans being prepaid, plus any
interest accrued and unpaid to, but excluding, the 2.6(a)(ii) Prepayment Date,
if any; (C) if fewer than all Term B Loans are to be prepaid, the aggregate
principal amount of Term B Loans which will be outstanding after such partial
prepayment, (D) that on the 2.6(a)(ii) Prepayment Date the aggregate principal
amount and interest accrued and unpaid to, but excluding the
2.6(a)(ii) Prepayment Date will become due and payable upon each such Term B
Loan to be prepaid, and that interest thereon shall cease to accrue on and after
such date, (E) the Conversion Price, the date on which the right to convert the
principal of the Term B Loans to be prepaid will terminate, whether the Borrower
has elected to settle its obligation upon conversion in cash or a combination of
cash and shares of Common Stock in lieu of shares of Common Stock only (and in
the event that the Borrower has elected to settle all or a portion of its
conversion obligation in cash, the date on which the Cash Settlement Averaging
Period will begin) and the places where the Term B Notes may be surrendered for
conversion, and (F) the place or places where the Term B Notes evidencing the
Term B Loans to be prepaid shall be surrendered for cancellation upon payment of
the outstanding principal, accrued and unpaid interest of such Term B Loans. 
Any 2.6(a)(iii) notice of prepayment at the election of the Borrower shall be
given by the Borrower or, at the Borrower’s request, by the Agent in the name of
and at the expense of the Borrower.

 

(v)           The Borrower shall pay the Lenders holding Term A Loans, in
accordance with their respective Term Loan Percentage in respect of Term A
Loans, a non-refundable prepayment fee on each prepayment made pursuant to
Section 2.6(a)(i)  that is equal to one percent (1%) of the aggregate amount of
principal prepaid (the “Optional

 

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Prepayment Fee”).  The Optional Prepayment Fee shall be paid concurrently with
each prepayment paid pursuant to Section 2.6(a)(i).

 

(i)            Section 2.6(b) is hereby amended as follows:

 

(i)            Subsection i. thereof is hereby amended to read in its entirety
as follows:

 

(A)          If a Prepayment Event occurs on or prior to the Term A Prepayment
Date and the net proceeds realized from such Prepayment Event are less than or
equal to the then outstanding principal balance of the Term A Loans, the
Borrower shall immediately give notice thereof to the Agent (a “Prepayment Event
Notice”) and pay to the Agent for the ratable benefit of the Term A Lenders the
net proceeds realized from such Prepayment Event three (3) Business Days after
the date on which such Prepayment Event Notice is given.

 

(B)           If a Prepayment Event occurs on or prior to the Term A Prepayment
Date and the net proceeds realized from such Prepayment Event are greater than
the then outstanding principal balance of the Term A Loans, the Borrower shall
immediately give a Prepayment Event Notice thereof to the Agent and pay to the
Agent for the ratable benefit of the Term A Lenders the portion of the net
proceeds realized by such Prepayment Event up to the then outstanding principal
balance of the Term A Loans three (3) Business Days after the date on which such
notice is given.  The remainder of the net proceeds shall be paid to the Agent
for the ratable benefit of the Term B Lenders (other than Term B Lenders
electing to convert or waiving prepayment) twenty (20) Business Days after the
date on which notice is given and otherwise in accordance with
Section 2.6(b)(i)(C) below, unless the Term B Lenders entitled thereto shall
waive such requirement in writing.

 

(C)           If a Prepayment Event occurs at anytime after the Term A
Prepayment Date, the Borrower shall immediately give a Prepayment Event Notice
thereof to the Agent and pay to the Agent for the ratable benefit of the Lenders
(other than Term B Lenders electing to convert or waiving such prepayment) the
net proceeds realized from such Prepayment Event twenty (20) Business Days after
the date on which notice is given, unless the Lenders entitled to such
prepayment shall waive such requirement in writing.  Notwithstanding anything
herein to the contrary, any such prepayments shall be applied to the Term Loans
(except Term B Loans as to which a notice of conversion is given pursuant to
Section 10.2(a) or the Term B Lenders waiving such prepayment) in accordance
with their respective principal amounts.  Any Prepayment Event Notice (except
for a notice

 

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under Section 2.6(b)(i)(A) which shall only require the information in (A) and
(B) below) shall state: (A) the prepayment date or dates (if
Section 2.6(b)(i)(B) applies); (B) the aggregate amount available to prepay Term
A Loans and, if applicable, Term B Loans; (C) the Conversion Price, the date on
which the right to convert the principal of the Term B Loans to be prepaid will
terminate, whether the Borrower has elected to settle its obligation upon
conversion in cash or a combination of cash and shares of Common Stock in lieu
of shares of Common Stock only (and in the event that the Borrower has elected
to settle all or a portion of its conversion obligation in cash, the date on
which the Cash Settlement Averaging Period will begin) and the places where the
Term B Notes may be surrendered for conversion.  Any Prepayment Event Notice
pursuant to this Section 2.6(b) at the election of the Borrower shall be given
by the Borrower or, at the Borrower’s request, by the Agent in the name of and
at the expense of the Borrower. If Borrower shall provide a Prepayment Event
Notice pursuant to this Section 2.6(b) on any date that is (a) subsequent to the
execution of any agreement that is reasonably likely to result in a Fundamental
Change and (b) prior to 45 days after the occurrence of a Fundamental Change
resulting from such agreement or the cancellation of such agreement, the Term B
Lenders shall be entitled to Additional Shares upon exercise of any conversion
right hereunder as if such Prepayment Event Notice had been given in connection
with a Fundamental Change (provided that such Fundamental Change has occurred).

 

(ii)           The last sentence of subsection ii. thereof is hereby amended to
read in its entirety as follows:

 

Any such prepayments shall be applied to the Term Loans in accordance with their
respective principal amounts.

 

(j)                                     Article 2 is hereby amended by adding
the following as Section 2.12

 

Cancellation.  All Term Notes surrendered for payment, prepayment, repurchase,
conversion, registration of transfer or exchange shall, if surrendered to any
Person other than the Agent, be delivered to the Agent.  All Term Notes so
delivered shall be canceled promptly by the Agent, and no Term Notes shall be
issued in lieu thereof except as expressly permitted by any of the provisions of
this Agreement.  The Agent shall destroy canceled Term Notes and, after such
destruction, shall deliver a certificate of such destruction to the Borrower. 
If the Borrower shall acquire any of the Term Notes, such acquisition shall not
operate as a prepayment or satisfaction of the indebtedness represented by such
Term Notes unless the same are delivered to the Agent for cancellation.

 

(k)           Article V is hereby amended by adding the following:

 

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Section 5.13           Covenant to Obtain Shareholder Approval.

 

The Borrower shall not enter into any transaction, or take any other action,
that will require additional adjustment to the shares issuable upon conversion
(including shares issuable pursuant to Section 11.2) such that the Borrower
would require shareholder approval to authorize additional shares without having
obtained prior stockholder approval of such increase.  In addition, the Borrower
will not make any election to pay converting Term B Lenders in stock in
connection with a conversion between a notice of prepayment under
Section 2.6(a)(ii) and Term B Prepayment Date or during a period in which a Term
B Lender can elect to use a Fundamental Change Conversion unless such election
provides for available authorized shares sufficient to satisfy the conversion of
each and every Term B Lender electing to convert during such time period,
assuming all Term B Lenders convert all Term B Loans during such a period.

 

(l)            Section 7.1 is hereby amended by adding the following:

 

(p) The Borrower fails to deliver Common Stock, cash or a combination of the
foregoing, as required pursuant to Article X or Article XI upon the conversion
of the Term B Notes, and such failure continues for 5 days following the
scheduled settlement date for such conversion.

 

(q) The Borrower fails to provide notice of the anticipated or actual effective
date of a Fundamental Change or distribution pursuant to Section 12.3 or 12.4,
in each case, on a timely basis as required under this Agreement.

 

(m)          Section 7.2 is hereby amended by replacing it in its entirety with
the following:

 

Remedies. If (a) any Event of Default described in Sections 7.1(e), (f) or
(g) shall occur with respect to the Borrower, the Term Notes and all other
Obligations shall automatically become immediately due and payable; or (b) any
other Event of Default shall occur and be continuing, then, upon receipt by the
Agent of a request in writing from the Required Lenders, the Agent shall declare
the outstanding unpaid principal balance of the Term Notes, the accrued and
unpaid interest thereon and all other Obligations to be forthwith due and
payable.  Notwithstanding the foregoing, in the case of any Event of Default
under Section 7.1(l) that also constitutes a Fundamental Change and if (and only
if) no other Event of Default then has occurred and is continuing, (i) the Agent
shall declare the outstanding unpaid principal balance of the Term A Notes, the
accrued and unpaid interest thereon and all other Obligations (other than Term B
Notes and Term B Loans and accrued and unpaid interest thereon) to be forthwith
due and payable, upon receipt by the Agent of a request in

 

14

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writing from Term A Lenders holding at least 51% of the aggregate unpaid
principal amount of the Term A Notes, excluding Term A Notes held by Defaulting
Lenders (the “Required Term A Lenders”), and (ii) the Agent shall declare the
outstanding unpaid principal balance of the Term B Notes, and the accrued and
unpaid interest thereon and all other Obligations to be forthwith due and
payable, upon receipt (and only upon such receipt) by the Agent of both the
request under clause (i) and a request in writing from the Required Lenders.  
Upon any such declaration by the Agent, the relevant Term Notes, all accrued and
unpaid interest thereon and all other Obligations declared due and payable shall
immediately become due and payable, in each case without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in the Term Notes to the contrary
notwithstanding.  Upon the occurrence of any of the events described in clause
(a) of the first sentence of this Section 7.2, or upon the occurrence of any of
the events described in clause (b) of such sentence or clause (i) of the second
sentence of this Section 7.2, when so requested by the Required Lenders or the
Required Term A Lenders (in the case of clause (i) of the second sentence), the
Agent may exercise all rights and remedies under any of the Loan Documents, and
enforce all rights and remedies under any applicable law.

 

(n)           Section 8.10 is hereby amended by replacing it in its entirety
with the following:

 

Payments and Collections. All funds received by the Agent in respect of any
payments made by the Borrower on the Term Notes shall be distributed forthwith
by the Agent to the Term A Lenders and the Term B Lenders, respectively, pro
rata based on the Term A Loan Percentage and the Term B Loan Percentage as
applicable, and further among the Term A Lenders according with their applicable
Term Loan Percentage and to the Term B Lenders in accordance with their
applicable Term Loan Percentage, in like currency and funds as received. After
any Event of Default has occurred, all funds received by the Agent, whether as
payments by the Borrower or as realization on collateral or on any guaranties,
shall (except as may otherwise be required by law) be distributed by the Agent
in the following order: (a) first to the Agent or any Lender that has incurred
unreimbursed costs of collection with respect to any Obligations hereunder,
ratably to the Agent and each Lender in the proportion that the costs incurred
by the Agent or such Lender bear to the total of all such costs incurred by the
Agent and all Lenders; (b) next to the Agent for the account of the Lenders for
payment of accrued and unpaid interest on the Term Loans pro rata based on the
amounts owed to them; (c) next to the Agent for the account of the Term A
Lenders and the Term B Lenders, respectively, for the payment of principal on
the Term A Loans and Term B Loans, respectively, pro rata based on the Term A
Loan Percentage and the Term B Loan Percentage as applicable, and

 

15

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further among the Term A Lenders according with their applicable Term Loan
Percentage for application on the Term A Notes and to the Term B Lenders in
accordance with their applicable Term Loan Percentage for application on the
Term B Notes; and (d) last to the Agent for the account of the Lenders (in
accordance with the respective amounts owed to them) for any unpaid fees or
other Obligations owing by the Borrower hereunder.

 

(o)           Section 8.11 is hereby amended by replacing it in its entirety
with the following:

 

Sharing of Payments. If any Lender shall receive and retain any payment,
voluntary or involuntary, whether by setoff, application of deposit balance or
security, or otherwise, in respect of Indebtedness under this Agreement or the
Term Notes in excess of such Lender’s share thereof as determined under this
Agreement, then such Lender shall purchase from the other Lenders for cash and
at face value and without recourse, such participation in the applicable class
of Term Loans or Term Notes or other Obligations for which such payment was
received as shall be necessary to cause such excess payment to be shared ratably
as aforesaid with such other Lenders holding Term Loans and Term Notes of the
class, or holding such other Obligations, for which such excess payments were
received; provided, that if such excess payment or part thereof is thereafter
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without interest. Subject to
the participation purchase obligation above, each Lender agrees to exercise any
and all rights of setoff, counterclaim or banker’s lien first fully against any
Term Notes and participations therein held by such Lender (ratably between Term
A Notes and Term B Notes), next to any other Obligations of the Borrower to such
Lender arising under or pursuant to this Agreement and to any participations
held by such Lender in Obligations of the Borrower arising under or pursuant to
this Agreement, and only then to any other Indebtedness of the Borrower to such
Lender.

 

(p)           Section 9.1 is hereby modified by adding the following after the
semicolon in clause (e):

 

(f) except as permitted by Section 10.11, adversely affect the Repurchase Right
or the right to convert any Term B Loan in Article X;

 

(g) modify the provisions in Article XI in a manner adverse to the holders of
Term B Loans; and

 

Section of 9.1(f) of the Existing Loan Agreement shall be renumbered as
Section 9.1(h) of the Second Amended Loan Agreement.

 

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(q)           The Loan Agreement is hereby amended by adding a new Article X
thereto to read in its entirety as follows:

 

ARTICLE X

CONVERSION OF TERM B LOANS

 

Section 10.1           Conversion Right and Conversion Price.

 

(a)            Subject to and upon compliance with the provisions of this
Article and at any time prior to the Term B Loan Maturity Date, at the option of
any Term B Lenders, the Term B Loan of such Lender or any portion of the
principal amount thereof which is an integral multiple of $1,000 may be
converted at the principal amount thereof, or of such portion thereof, into duly
authorized, fully paid and nonassessable shares of Common Stock (such shares of
Common Stock to meet the conditions set forth in Section 10.14), at the
Conversion Price, determined as hereinafter provided, in effect at the time of
conversion.  Such conversion right shall expire at the close of business on the
Business Day immediately preceding October 30, 2014.  Additional consideration
may be due upon conversion as required herein.

 

(b)           In case a notice of prepayment is issued for a Term B Lender’s
Term B Loans or portion thereof pursuant to Section 2.6(a)(ii) or (b), such
conversion right in respect of the Term B Loan or the portion so called, shall
expire at the close of business on the second Business Day preceding the date of
prepayment, unless the Borrower defaults in making the payment due on the
prepayment date; provided, that in no event shall the Term B Lenders have less
than 20 Business Days from the receipt of a notice of prepayment to exercise its
conversion right in respect of the Term B Loans or the portion thereof being
prepaid.

 

(c)            In the event of a Fundamental Change, each Term B Lender’s right
to convert through a Fundamental Change Conversion shall expire at the close of
business on the Business Day immediately preceding the Repurchase Date, unless
the Borrower defaults in making the payment due on the Repurchase Date;
provided, that in no event shall the Term B Lenders have less than 20 Business
Days from the receipt of a notice of a Fundamental Change to exercise its
conversion right via a Fundamental Change Conversion.

 

(d)           The price at which shares of Common Stock shall be delivered upon
conversion (the “Conversion Price”) shall be initially equal to $4.95 per share
of Common Stock.  The Conversion Price shall be adjusted in certain instances as
provided in paragraphs (a), (b), (c), (d), (e), (f), (h) and (1) of
Section 10.4.  Additional shares may also be deliverable upon conversion as
required under Article XI of the Loan Agreement.

 

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Section 10.2           Exercise of Conversion Right.

 

(a)            To exercise the conversion right, the Term B Lender holding any
Term B Loan to be converted shall surrender the related Term B Note duly
endorsed or assigned to the Borrower or in blank, at the office of any
Conversion Agent, accompanied by a duly signed Conversion Notice substantially
in the form attached hereto as Exhibit H, to the Borrower, with a copy to the
Agent, stating that the Term B Lender elects to convert such Term B Loan or, if
less than the entire principal amount thereof is to be converted, the portion
thereof to be converted.

 

(b)           In the event of a Fundamental Change, Term B Lenders will have the
right to elect to convert and receive Additional Shares as per Section 11.2 (a
“Fundamental Change Conversion”) from the date of the Repurchase Event Notice
through the Repurchase Date.  To exercise the conversion right in the event of a
Fundamental Change and receive Additional Shares pursuant to Section 11.2, the
Term B Lender holding any Term B Loan  to be converted shall surrender the
corresponding Term B Note duly endorsed or assigned to the Borrower or in blank,
at the office of any Conversion Agent, accompanied by a duly signed Fundamental
Change Conversion Notice substantially in the form attached hereto as Exhibit I,
to the Borrower, with a copy to the Agent, stating that the Lender elects to
convert such Term B Loan  or, if less than the entire principal amount thereof
is to be converted, the portion thereof to be converted.

 

(c)            Term B Loans shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Term B Notes for
conversion in accordance with the provisions of this Article X, and at such time
the rights of the Term B Lender of such Term B Loans as Term B Lenders shall
cease, and the Person or Persons entitled to receive the Common Stock issuable
upon conversion shall be treated for all purposes as the record holder or
holders of such Common Stock at such time.  As promptly as practicable on or
after the conversion date, the Borrower shall cause to be issued and delivered
to such Conversion Agent a stock certificate or stock certificates representing
the number of full shares of Common Stock issuable upon conversion of such Term
B Loans, together with payment in lieu of any fraction of a share as provided in
Section 10.3.

 

(d)           In the case of any Term B Loan which is converted in part only,
upon such conversion the Borrower shall execute and the Agent shall authenticate
and deliver to the Term B Lender thereof, at the expense of the Borrower, a new
Term B Note or Term B Notes of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such Term B
Loan.

 

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(e)            Notwithstanding the foregoing, a Term B Lender will only be
entitled to exercise its conversion rights herein to the extent (and only to the
extent) that the receipt of shares of Common Stock upon exercise of the
conversion right would not cause such Term B Lender (including its Affiliates)
to become, directly or indirectly, a “beneficial owner” (within the meaning of
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder) of more than 9.99% of the shares of the Common Stock outstanding at
such time.  Any purported delivery of shares of Common Stock upon exercise of
this conversion right shall be void and have no effect to the extent (but only
to the extent) that such delivery would result in such Term B Lender (including
its Affiliates) becoming the beneficial owner of more than 9.99% of the shares
of Common Stock outstanding at such time.  Notwithstanding anything to the
contrary herein, no Term B Lender shall be entitled, with or without the consent
of the Borrower, to waive the restrictions set forth in this Section 10.2.

 

(f)            The Borrower hereby initially appoints the Agent as the
Conversion Agent.

 

Section 10.3           Fractions of Shares.  No fractional shares of Common
Stock shall be issued upon conversion of any Term B Loan.  If more than one
Term B Note shall be surrendered for conversion at one time by the same Term B
Lender, the number of full shares which shall be issued upon conversion thereof
shall be computed on the basis of the aggregate principal amount of the Term B
Loans (or specified portions thereof) evidenced by the surrendered Term B
Notes.  Instead of any fractional share of Common Stock which would otherwise be
issued upon conversion of any Term B Loan (or specified portions thereof), the
Borrower shall pay a cash adjustment in respect of such fraction (calculated to
the nearest one-100th of a share) in an amount equal to such fraction multiplied
by the Trading Price of the Common Stock as of the last Trading Day preceding
the date of conversion.

 

Section 10.4           Adjustment of Conversion Price.  The Conversion Price
shall be subject to adjustment, calculated by the Borrower, from time to time as
follows:

 

(a)            In case the Borrower shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction:

 

(i)             the numerator of which shall be the number of shares of Common
Stock outstanding at the close of business on the

 

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Record Date (as defined in Section 10.4(g)) fixed for such determination; and

 

(ii)            the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution.

 

Such reduction shall become effective immediately after the opening of business
on the day following the Record Date.  If any dividend or distribution of the
type described in this Section 10.4(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.

 

(b)           In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.

 

(c)            In case the Borrower shall issue rights or warrants (other than
any rights or warrants referred to in Section 10.4(d)) to all holders of its
outstanding shares of Common Stock exercisable for not more than 60 days
entitling them to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price on the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect at the opening of
business on the date after such Record Date by a fraction:

 

(i)             the numerator of which shall be the number of shares of Common
Stock outstanding at the close of business on the Record Date, plus the number
of shares which the aggregate offering price of the total number of shares so
offered for subscription or purchase (or the aggregate conversion price of the
convertible securities so offered) would purchase at such Current Market Price;
and

 

(ii)            the denominator of which shall be the number of shares of Common
Stock outstanding on the close of business on the Record Date, plus the total
number of additional shares of Common Stock

 

20

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so offered for subscription or purchase (or into which the convertible
securities so offered are convertible).

 

Such adjustment shall become effective immediately after the opening of business
on the day following the Record Date fixed for determination of stockholders
entitled to receive such rights or warrants.  To the extent that shares of
Common Stock (or securities convertible into Common Stock) are not delivered
pursuant to such rights or warrants, upon the expiration or termination of such
rights or warrants, the Conversion Price shall be readjusted to the Conversion
Price which would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made on the basis of the delivery of only the
number of shares of Common Stock (or securities convertible into Common Stock)
actually delivered.  In the event that such rights or warrants are not so
issued, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been fixed.  In
determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than such Current Market Price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received for such rights or
warrants, the value of such consideration if other than cash, to be determined
by the Board of Directors.

 

Notwithstanding the foregoing, in the event that the Borrower shall make a
distribution subject to this Section 10.4(c) the Borrower may, in lieu of making
any adjustment required pursuant to this Section 10.4(c), make proper provision
so that each Term B Lender who converts such Term B Loan (or any portion
thereof) after the Record Date for such distribution shall be entitled to
receive upon such conversion, in addition to the shares of Common Stock issuable
upon such conversion, the securities such Term B Lender would have received had
such Term B Lender converted such Term B Loan (or portion thereof) immediately
prior to such Record Date.

 

(d)                                  In case the Borrower shall, by dividend or
otherwise, distribute to all holders of its Common Stock shares of any class of
capital stock of the Borrower (other than any dividends or distributions to
which Section 10.4(a) applies) or evidences of its indebtedness, cash or other
assets, including securities, but excluding (i) any rights or warrants referred
to in Section 10.4(c), (ii) any stock, securities or other property or assets
(including cash) distributed in connection with a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance
to which Section 10.11 applies and (iii) dividends and distributions paid
exclusively in cash (the securities described in foregoing clauses (i), (ii) and
(iii) hereinafter in this Section 10.4(d) called the

 

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“securities”), then, in each such case, subject to the second succeeding
paragraph of this Section 10.4(d), the Conversion Price shall be reduced so that
the same shall be equal to the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on the Record Date
with respect to such distribution by a fraction:

 

(i)                                      the numerator of which shall be the
Current Market Price on such date, less the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and set forth in
a Board Resolution) on such date of the portion of the securities so distributed
applicable to one share of Common Stock (determined on the basis of the number
of shares of the Common Stock outstanding on the Record Date); and

 

(ii)                                   the denominator of which shall be such
Current Market Price.

 

Such reduction shall become effective immediately prior to the opening of
business on the day following the Record Date.  However, in the event that
(x) the then fair market value (as so determined) of the portion of the
securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price on the Record Date or (y) the Current
Market Price on the Record Date exceeds the fair market value of such
distribution by less than $1.00, then, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Term B Lender shall have the right
to receive upon conversion of a Term B Loan (or any portion thereof) the amount
of securities such Term B Lender would have received had such Term B Lender
converted such Term B Loan (or portion thereof) immediately prior to such Record
Date.  In the event that such dividend or distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such dividend or distribution had not been declared.

 

If the Board of Directors determines the fair market value of any distribution
for purposes of this Section 10.4(d) by reference to the actual or when issued
trading market for any securities comprising all or part of such distribution,
it must in doing so consider the prices in such market over the same period (the
“Reference Period”) used in computing the Current Market Price pursuant to
Section 10.4(g) to the extent possible, unless the Board of Directors in a Board
Resolution determines in good faith that determining the fair market value
during the Reference Period would not be in the best interest of the Term B
Lenders.

 

Notwithstanding the foregoing, in the event that the Borrower shall make a
distribution subject to this Section 10.4(d) the Borrower may, in lieu of making
any adjustment required pursuant to this Section 10.4(d),

 

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make proper provision so that each Term B Lender who converts such Term B Loan
(or any portion thereof) after the Record Date for such distribution shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the securities such Term B Lender would
have received had such Term B Lender converted such Term B Loan (or portion
thereof) immediately prior to such Record Date.

 

Rights or warrants distributed by the Borrower to all holders of Common Stock
entitling the holders thereof to subscribe for or purchase shares of the
Borrower’s capital stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
(“Trigger Event”):

 

(A)                              are deemed to be transferred with such shares
of Common Stock;

 

(B)                                are not exercisable; and

 

(C)                                are also issued in respect of future
issuances of Common Stock; shall be deemed not to have been distributed for
purposes of this Section 10.4(d) (and no adjustment to the Conversion Price
under this Section 10.4(d) will be required) until the occurrence of the
earliest Trigger Event.  If such right or warrant is subject to subsequent
events, upon the occurrence of which such right or warrant shall become
exercisable to purchase different securities, evidences of indebtedness or other
assets or entitle the holders to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase price,
then the occurrence of each such event shall be deemed to be the date of
issuance and record date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holders thereof).  In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Conversion Price under this Section 10.4(d):

 

(1)                                in the case of any such rights or warrants
which shall all have been redeemed or repurchased without exercise by any holder
thereof, the Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase; and

 

23

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(2)                                in the case of such rights or warrants all of
which shall have expired or been terminated without exercise, the Conversion
Price shall be readjusted as if such rights and warrants had never been issued.

 

For purposes of this Section 10.4(d) and Sections 10.4(a), 10.4(b) and 10.4(c),
any dividend or distribution to which this Section 10.4(d) is applicable that
also includes shares of Common Stock, a subdivision or combination of Common
Stock to which Section 10.4(c) applies, or rights or warrants to subscribe for
or purchase shares of Common Stock to which Section 10.4(c) applies (or any
combination thereof), shall be deemed instead to be:

 

(a)                                     a dividend or distribution of the
evidences of indebtedness, assets, shares of capital stock, rights or warrants
other than such shares of Common Stock, such subdivision or combination or such
rights or warrants to which Sections 10.4(a), 10.4(b) and 10.4(c) apply,
respectively (and any Conversion Price reduction required by this
Section 10.4(d) with respect to such dividend or distribution shall then be
made), immediately followed by

 

(b)                                    a dividend or distribution of such shares
of Common Stock, such subdivision or combination or such rights or warrants (and
any further Conversion Price reduction required by Sections 10.4(a), 10.4(b) and
10.4(c) with respect to such dividend or distribution shall then be made),
except:

 

(I)                                   the Record Date of such dividend or
distribution shall be substituted as (x) “the date fixed for the determination
of stockholders entitled to receive such dividend or other distribution,”
“Record Date fixed for such determinations” and “Record Date” within the meaning
of Section 10.4(a), (y) “the day upon which such subdivision becomes effective”
and “the day upon which such combination becomes effective” within the meaning
of Section 10.4(b), and (z) as “the date fixed for the determination of
stockholders entitled to receive such rights or warrants,” “the Record Date
fixed for the determination of the stockholders entitled to receive such rights
or warrants” and such “Record Date” within the meaning of Section 10.4(c); and

 

(II)                               any shares of Common Stock included in such
dividend or distribution shall not be deemed “outstanding at the close of
business on the date fixed for such determination” within the meaning of
Section 10.4(a) and any reduction or increase in the number of shares of Common
Stock resulting from such subdivision or combination shall be disregarded in
connection with such dividend or distribution.

 

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(e)                                   In case the Borrower shall, by dividend or
otherwise, distribute to all or substantially all holders of its Common Stock
cash (excluding any cash that is distributed upon a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance
to which Section 10.11 applies or as part of a distribution referred to in
Section 10.4(d)), then, and in each such case, immediately after the close of
business on such date, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on such Record Date by a fraction:

 

(i)                                      the numerator of which shall be equal
to the Current Market Price on the Record Date less an amount equal to the
quotient of (x) the amount of such distribution and (y) the number of shares of
Common Stock outstanding on the Record Date, and

 

(ii)                                   the denominator of which shall be equal
to the Current Market Price on such date.

 

In the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.

 

(f)                                     In case a tender offer made by the
Borrower or any of its subsidiaries for all or any portion of the Common Stock
shall expire and such tender offer (as amended upon the expiration thereof)
shall require the payment to stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender offer) of Purchased Shares (as
defined below)) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and set forth in a Board Resolution) that combined together with:

 

(i)                                      the aggregate of the cash plus the fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and set forth in a Board Resolution), as of the expiration of such
tender offer, of consideration payable in respect of any other tender offers, by
the Borrower or any of its subsidiaries for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to this Section 10.4(f) has
been made;

 

(ii)                                   the aggregate amount of any distributions
to all holders of the Borrower’s Common Stock made exclusively in cash within 12
months preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to Section 10.4(e) has been

 

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made; and exceeds 10% of the product of the Current Market Price as of the last
time (the “Expiration Time”) tenders could have been made pursuant to such
tender offer (as it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time, then, and in
each such case, immediately prior to the opening of business on the day after
the date of the Expiration Time, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to close of business on the date of the Expiration Time
by a fraction:

 

(A)                                   the numerator of which shall be the number
of shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time; and

 

(B)                                     the denominator shall be the sum of
(x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the “Purchased Shares”) and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time.

 

Such reduction (if any) shall become effective immediately prior to the opening
of business on the day following the Expiration Time.  In the event that the
Borrower is obligated to purchase shares pursuant to any such tender offer, but
the Borrower is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made.  If the application of this Section 10.4(f) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 10.4(f).

 

(g)                                  For purposes of this Section 10.4, the
following terms shall have the meanings indicated:

 

(i)                                      “Current Market Price” shall mean the
average of the daily Trading Prices per share of Common Stock for the ten
consecutive Trading Days immediately prior to the date in question; provided,
however, that if:

 

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(A)                            the “ex” date (as hereinafter defined) for any
event (other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Section 10.4(a), (b),
(c), (d), (e) or (f) occurs during such ten consecutive Trading Days, the
Trading Price for each Trading Day prior to the “ex” date for such other event
shall be adjusted by multiplying such Trading Price by the same fraction by
which the Conversion Price is so required to be adjusted as a result of such
other event;

 

(B)                              the “ex” date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Section 10.4(a), (b), (c), (d), (e) or
(f) occurs on or after the “ex” date for the issuance or distribution requiring
such computation and prior to the day in question, the Trading Price for each
Trading Day on and after the “ex” date for such other event shall be adjusted by
multiplying such Trading Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such other event;
and

 

(C)                              the “ex” date for the issuance or distribution
requiring such computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (A) or (B) of this proviso,
the Trading Price for each Trading Day on or after such “ex” date shall be
adjusted by adding thereto the amount of any cash and the fair market value (as
determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 10.4(d) or (f), whose
determination shall be conclusive and set forth in a Board Resolution) of the
evidences of indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on the day
before such “ex” date.

 

For purposes of any computation under Section 10.4(f), the Current Market Price
of the Common Stock on any date shall be deemed to be the average of the daily
Trading Prices per share of Common Stock for such day and the next two
succeeding Trading Days; provided, however, that if the “ex” date for any event
(other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 10.4(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the Trading
Price for each Trading Day on and after the “ex” date for such other event shall
be adjusted by multiplying such Trading Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a result of such
other event.  For purposes of this paragraph, the term “ex” date, when used:

 

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(1)                                with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the Trading Price was
obtained without the right to receive such issuance or distribution;

 

(2)                                with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the Common
Stock trades regular way on such exchange or in such market after the time at
which such subdivision or combination becomes effective; and

 

(3)                                with respect to any tender or exchange offer,
means the first date on which the Common Stock trades regular way on such
exchange or in such market after the Expiration Time of such offer.

 

Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Price are called for pursuant to this Section 10.4, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 10.4 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.

 

(ii)                                   “fair market value” shall mean the amount
which a willing buyer would pay a willing seller in an arm’s length transaction
which, in the absence of a current market for such transaction, shall be
determined in good faith by the Board of Directors.

 

(iii)                                “Record Date” shall mean, with respect to
any dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security ) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).

 

(h)                                  The Borrower may make such reductions in
the Conversion Price, in addition to those required by Sections 10.4(a), (b),
(c), (d), (e) or (f), as the Board of Directors considers to be advisable to
avoid or diminish any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.

 

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To the extent permitted by applicable law, the Borrower from time to time may
reduce the Conversion Price by any amount for any period of time if the period
is at least 20 days and the reduction is irrevocable during the period and the
Board of Directors determines in good faith that such reduction would be in the
best interests of the Borrower, which determination shall be conclusive and set
forth in a Board Resolution; provided, however, that the Board of Directors
shall not be permitted to reduce the Conversion Price pursuant to this sentence
in such a manner that will violate NASD Rule 4350(i) or any similar or successor
rule then in effect.  Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Borrower shall mail to the Agent and each Term B Lender
at the address of such Term B Lender as it appears in the Register a notice of
the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.

 

(i)                                      No adjustment in the Conversion Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments which by
reason of this Section 10.4(i) are not required to be made shall be carried
forward and taken into account (i) in any subsequent adjustment; (ii) if and
when the Borrower has given a notice of prepayment in respect of the Term B
Loans pursuant to Section 2.6(a)(ii) or 2.6(b); or (iii) on the Maturity Date of
the Term B Loans.  All calculations under this Article X shall be made by the
Borrower and shall be made to the nearest cent or to the nearest one-100th of a
share, as the case may be.  No adjustment need be made for a change in the par
value or no par value of the Common Stock.

 

(j)                                      In any case in which this Section 10.4
provides that an adjustment shall become effective immediately after a Record
Date for an event, the Borrower may defer until the occurrence of such event
(i) issuing to the Term B Lender holding any Term B Loan converted after such
Record Date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (ii) paying to such Term B Lender
any amount in cash in lieu of any fraction pursuant to Section 10.3.

 

(k)                                   For purposes of this Section 10.4, the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Borrower but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock.  The Borrower will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Borrower.

 

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(l)                                      If the distribution date for the rights
provided in the Borrower’s rights agreement, if any, occurs prior to the date a
Term B Loan  is converted, and the Term B Lender holding such Term B Loan after
the distribution date is not entitled to receive the rights that would otherwise
be attached (but for the date of conversion) to the shares of Common Stock
received upon such conversion, then an adjustment shall be made to the
Conversion Price pursuant to Section 10.4(b) as if the rights were being
distributed to the holders of Common Stock immediately prior to such
conversion.  If such an adjustment is made and the rights are later redeemed,
invalidated or terminated, then a corresponding reversing adjustment shall be
made to the Conversion Price, on an equitable basis, to take account of such
event.

 

Section 10.5                                 Notice of Adjustments of Conversion
Price.  Whenever the Conversion Price is adjusted as herein provided (other than
in the case of an adjustment pursuant to the second paragraph of
Section 10.4(h) for which the notice required by such paragraph has been
provided), the Borrower shall promptly file with the Agent and any Conversion
Agent other than the Agent an Officers’ Certificate setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon which such
adjustment is based.  Unless and until the Agent and any Conversion Agent other
than the Agent receive an Officer’s Certificate setting forth an adjustment to
the Conversion Price, the Agent and such Conversion Agent may assume without
inquiry that the Conversion Price has not and is not required to be adjusted and
that the last Conversion Price of which the Agent and such Conversion Agent have
knowledge remains in effect.  Promptly after delivery of such Officers’
Certificate, the Borrower shall prepare a notice stating that the Conversion
Price has been adjusted and setting forth the adjusted Conversion Price and the
date on which each adjustment becomes effective, and shall mail such notice to
each Term B Lender at the address of such Term B Lender as it appears in the
Register within 20 days of the effective date of such adjustment.  Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.

 

Section 10.6                                 Notice Prior to Certain Actions. 
In case at any time after the date hereof:

 

(a)                                   the Borrower shall declare a dividend (or
any other distribution) on its Common Stock payable otherwise than in cash out
of its capital surplus or its consolidated retained earnings;

 

(b)                                  the Borrower shall authorize the granting
to the holders of its Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class (or of securities convertible
into shares of capital stock of any class) or of any other rights;

 

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(c)                                   there shall occur any reclassification of
the Common Stock of the Borrower (other than a subdivision or combination of its
outstanding Common Stock, a change in par value, a change from par value to no
par value or a change from no par value to par value), or any merger,
consolidation, statutory share exchange or combination to which the Borrower is
a party and for which approval of any shareholders of the Borrower is required,
or the sale, transfer or conveyance of all or substantially all of the assets of
the Borrower; or

 

(d)                                  there shall occur the voluntary or
involuntary dissolution, liquidation or winding up of the Borrower; the Borrower
shall cause to be provided to the Agent and all Term B Lenders in accordance
with Section 9.4, at least 20 days (or 10 days in any case specified in clause
(a) or (b) above) prior to the applicable record or effective date hereinafter
specified, a notice stating:

 

(i)                                      the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or warrants, or, if
a record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined; or

 

(ii)                                   the date on which such reclassification,
merger, consolidation, statutory share exchange, combination, sale, transfer,
conveyance, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
merger, consolidation, statutory share exchange, sale, transfer, dissolution,
liquidation or winding up.

 

Neither the failure to give such notice nor any defect therein shall affect the
legality or validity of the proceedings or actions described in clauses
(a) through (d) of this Section 10.6.

 

Section 10.7                                 Borrower to Reserve Common Stock. 
The Borrower shall at all times use its best efforts to reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of Term B Loans, the
full number of shares of fully paid and nonassessable Common Stock then issuable
upon the conversion of all outstanding Term B Loans.

 

Section 10.8                                 Taxes on Conversions.  Except as
provided in the next sentence, the Borrower will pay any and all taxes (other
than taxes on income) and duties that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Term B Loans pursuant
hereto.  A Term B Lender delivering a Term B Note for conversion shall

 

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be liable for and will be required to pay any tax or duty which may be payable
in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that of the Term B Lender holding the Term B
Loan or Term B Loans to be converted, and no such issue or delivery shall be
made unless the Person requesting such issue has paid to the Borrower the amount
of any such tax or duty, or has established to the satisfaction of the Borrower
that such tax or duty has been paid.

 

Section 10.9                                 Covenant as to Common Stock.  The
Borrower covenants that all shares of Common Stock which may be issued upon
conversion of Term B Loans will upon issuance be fully paid and nonassessable
and that the Borrower will pay all taxes, liens and charges with respect to the
issuance thereof, except (a) as provided in Section 10.8 or (b) with respect to
any liens or charges created by or imposed upon such Common Stock by the Term B
Lender of the Term B Loans to be converted.

 

Section 10.10                           Cancellation of Converted Term B Notes. 
All Term B Loans delivered for conversion shall be delivered to the Agent to be
canceled by or at the direction of the Agent, which shall dispose of the same as
provided in Section 2.12.

 

Section 10.11                           Effect of Reclassification,
Consolidation, Merger or Sale.  If any of following events occur, namely:

 

(a)                                   any reclassification or change of the
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination);

 

(b)                                  any merger, consolidation, statutory share
exchange or combination of the Borrower with another corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock; or

 

(c)                                   any sale or conveyance of the properties
and assets of the Borrower as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock; the Borrower or the successor
or purchasing corporation, as the case may be, shall execute with the Agent an
amendment of this Agreement (the “Merger Amendment”) providing that each Term B
Lender shall have the right to convert its Term B Loans into the kind and amount
of shares of stock and other securities or property or assets (including cash)
receivable on such reclassification, change,

 

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merger, consolidation, statutory share exchange, combination, sale or conveyance
by a holder of the Common Stock immediately prior to such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance; provided that notwithstanding anything in Section 9.1 hereof to the
contrary, the consent of the Required Lenders shall not be required for such
amendment.  In the event the holders of Common Stock have the opportunity to
elect the form of consideration to be received in such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance, the Borrower will make adequate provisions whereby the Term B
Lenders shall have, on a timely basis, the right to determine the form of
consideration into which all Term B Loans, treated as a single class, shall be
convertible.  The form of consideration into which all Term B Loans, treated as
a single class, shall be convertible shall be determined by the Term B Lenders
holding a majority of the Term B Loans (based on principal outstanding
thereunder) who have made an election as to such form of consideration and shall
be subject to any limitations to which all of the holders of Common Stock are
subject, such as pro rata reductions or fractional share limitations applicable
to any portion of the consideration paid.  To the extent a majority of the Term
B Lenders did not make such election on or prior to the date that is 10 days
after receipt of notice that such election is required, then for purposes of
this Section 10.11 the kind or amount of securities, cash or other property
receivable upon such merger, consolidation, statutory share exchange, sale or
conveyance shall be deemed to be the kind and amount so receivable per share by
the holders of a plurality of the Common Stock.  Such Merger Amendment shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article X.  If, in the case
of any such reclassification, change,merger, consolidation, statutory share
exchange, combination, sale or conveyance, the stock or other securities and
assets receivable thereupon by a holder of shares of Common Stock includes
shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such Merger Amendment shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Term B Lenders as the Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provision providing for the Repurchase Rights set forth
in Article XII.

 

The Borrower shall cause notice of the execution of such Merger Amendment to be
mailed to each Term B Lender, at the address of such Term B Lender as it appears
on the Register, within 20 days after execution thereof.  Failure to deliver
such notice shall not affect the legality or validity of such Merger Amendment.

 

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The above provisions of this Section shall similarly apply to successive
reclassifications, mergers, consolidations, statutory share exchanges,
combinations, sales and conveyances.

 

If this Section 10.11 applies to any event or occurrence, Section 10.4 shall not
apply.

 

Section 10.12                           Cash Conversion Option.

 

(a)                                   Subject to the Borrower’s right to
irrevocably elect to make a cash payment of principal upon conversion pursuant
to Section 10.12(f), in lieu of delivery of shares of Common Stock in
satisfaction of its obligation upon conversion of the Term B Loans, the Borrower
may elect to deliver cash or a combination of cash and shares of Common Stock. 
Except to the extent that the Borrower has irrevocably elected to make a cash
payment of principal upon conversion pursuant to Section 10.12(f), the Borrower
shall inform the Lenders through the Agent of the method it elects to satisfy
its obligation upon conversion:

 

(i)                                      if the Borrower has elected to prepay
the Term B Loans pursuant to Section 2.6(a) or is making a mandatory prepayment
pursuant to Section 2.6(b), in its notice of prepayment;

 

(ii)                                   if a Fundamental Change has occurred, in
its Repurchase Event Notice;

 

(iii)                                in respect of Term B Loans to be converted
during the period beginning 25 Trading Days preceding the Term B Maturity Date
and ending one Trading Day preceding such Term B Maturity Date, 26 Trading Days
preceding such Maturity Date; and

 

(iv)                               in all other cases, no later than two Trading
Days following the conversion date.

 

(b)                                  If the Borrower elects to satisfy any
portion of its conversion obligation in cash, the Borrower shall specify the
amount to be satisfied in cash as a percentage of the conversion obligation or a
fixed dollar amount.  The Borrower shall treat all Term B Lenders converting on
the same Trading Day in the same manner.  The Borrower shall not, however, have
any obligation to settle its conversion obligations arising on different Trading
Days in the same manner.

 

(c)                                   If the Borrower elects to satisfy any
portion of its conversion obligation in cash (other than cash in lieu of
fractional shares), a Term B Lender may retract its conversion notices at any
time during the two Trading Day period beginning on the Trading Day after the
Borrower has notified the Agent of its method of settlement (such period, the

 

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“Conversion Retraction Period”).  However, a Term B Lender shall not be
permitted to retract its conversion notice if:

 

(i)                                      the Borrower has irrevocably elected to
make a cash payment of principal upon conversion and has given notice thereof as
provided above before such Term B Lender delivered its conversion notice;

 

(ii)                                   such Term B Lender is converting its Term
B Loans in connection with a prepayment pursuant to Section 2.6(a)(ii) or
2.6(b);

 

(iii)                                such Term B Lender is converting its Term B
Loans during the period beginning 25 Trading Days preceding the Maturity Date
and ending one Trading Day preceding the Maturity Date; or

 

(iv)                               the Borrower has not elected to satisfy any
portion of its conversion obligation in cash.

 

(d)                                  Settlement in shares of Common Stock shall
occur as soon as practicable after the Borrower has notified the Term B Lenders
that it has elected this method of settlement.  Settlement in cash or in a
combination of cash and shares of Common Stock shall occur on the second Trading
Day following the final Trading Day (the “Determination Date”) of the Cash
Settlement Averaging Period.  The Determination Date shall be the 26th Trading
Day following the Borrower’s receipt of a Term B Lender’s conversion notice (if
such Term B Lender does not retract its conversion notice and has satisfied all
other conversion requirements), unless conversion is:

 

(i)                                      in connection with a prepayment
pursuant to Section 2.6(a)(ii) or (b), in which case the Determination Date
shall be the date specified for prepayment in the notice of prepayment;

 

(ii)                                   in connection with a Fundamental Change,
in which case the Determination Date shall be the Repurchase Date;

 

(iii)                                subject to the succeeding clause (D), after
the Borrower has irrevocably elected to make a cash payment of principal upon
conversion, in which case the Determination Date shall be the 22nd Trading Day
following the Borrower’s receipt of such Lender’s conversion notice; or

 

(iv)                               during the period beginning 25 Trading Days
preceding the Term B Maturity Date and ending one Trading Day preceding the Term
B Maturity Date, in which case the Determination Date shall be the Term B
Maturity Date.

 

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(e)                                   The settlement amount shall be computed as
follows:

 

(i)                                      If the Borrower elects to satisfy the
entire conversion obligation in shares of Common Stock, the Borrower shall
deliver to the Lender a number of shares of Common stock equal to the sum of
(X): shares equal to (i) the aggregate principal amount of Term B Loans to be
converted divided by (ii) the Conversion Price then in effect (substituting cash
in lieu of fractional shares) and (Y) any Additional Shares required pursuant to
Section 11.2 .

 

(ii)                                   If the Borrower elects to satisfy the
entire conversion obligation in cash, the Borrower shall deliver to the Lenders
cash in an amount (the “Cash-Only Settlement Amount”) equal to the product of:

 

(A)                             the sum of (X): shares equal to (i) the
aggregate principal amount of Term B Loans to be converted divided by (ii) the
Conversion Price then in effect and (Y) any Additional Shares required pursuant
to Section 11.2; and

 

(B)                               the Applicable Stock Price.

 

(C)                               If the Borrower elects to satisfy the
conversion obligation in a combination of cash and shares of Common Stock, the
Borrower shall deliver to the Term B Lender:

 

(1)                                    (i) the fixed dollar amount per $1,000
principal amount of Term B Loans specified in the notice regarding the
Borrower’s chosen method of settlement multiplied by the quotient of the
aggregate principal amount of Term B Loans to be converted divided by 1,000 or
(ii) the percentage of the conversion obligation specified in the notice
regarding the Borrower’s chosen method of settlement multiplied by the amount of
cash that would be paid pursuant to clause (B) above, as the case may be (the
“Cash Amount”); and

 

(2)                                    a number of shares equal to (i) the
Cash-Only Settlement Amount minus the Cash Amount divided by (ii) the Applicable
Stock Price (substituting cash in lieu of fractional shares).

 

The “Applicable Stock Price” means, in respect of a Determination Date, the
average Closing Sale Price (as defined below) of the Common Stock over the 20
Trading Day period (the “Cash Settlement Averaging Period”):

 

(iii)                                ending on the second Trading Day preceding
the date specified for prepayment in the notice of prepayment, if the

 

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Borrower has given a notice of prepayment with respect to Term B Loans pursuant
to Section 2.6(a)(ii) or (b);

 

(iv)                               ending on the second Trading Day preceding
the Repurchase Date, if a Fundamental Change has occurred;

 

(v)                                  subject to the succeeding clause (iv),
beginning on the Trading Day following the Borrower’s receipt of the Term B
Lender’s conversion notice, if the Borrower has irrevocably elected to make a
cash payment of principal upon conversion;

 

(vi)                               ending on the second Trading Day preceding
the Term B Maturity Date, with respect to conversion notices received during the
period beginning 25 Trading Days preceding the Term B Maturity Date and ending
one Trading Day preceding the Term B Maturity Date; and

 

(vii)                            beginning on the Trading Day following the
final Trading Day of the Conversion Retraction Period, in all other cases.

 

(f)                                     At any time on or prior to the
26th Trading Day preceding the Term B Maturity Date, the Borrower may
irrevocably elect to satisfy in cash its conversion obligation with respect to
the principal amount of the Term B Loans to be converted after the date of such
election, with any remaining amount to be satisfied in shares of Common Stock. 
Such election shall be in the Borrower’s sole discretion without the consent of
the Term B Lenders.  If the Borrower makes such election, the Borrower shall
notify the Agent and the Term B Lenders at their addresses shown in the
Register.

 

If the Borrower irrevocably elects to pay the principal amount of the Term B
Loans in cash upon conversion, the settlement amount shall be computed as
follows:

 

(A)                               a cash amount equal to the lesser of (i) the
aggregate principal amount of Term B Loans to be converted and (ii) the
Cash-Only Settlement Amount; and

 

(B)                     if the Cash-Only Settlement Amount exceeds the aggregate
principal amount of Term B Loans to be converted, a number of shares of Common
Stock equal to (i) the Cash-Only Settlement Amount minus the aggregate principal
amount of Term B Loans to be converted divided by (ii) the Applicable Stock
Price.

 

Section 10.13                           Responsibility of Agent for Conversion
Provisions.  The Agent, subject to the provisions of Section 8.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Term B Lender to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or

 

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intent of any such adjustments when made, or with respect to the method
employed, or herein or in any supplemental Loan Agreement provided to be
employed, in making the same.  Neither the Agent, subject to the provisions of
Section 8.1, nor any Conversion Agent shall be accountable with respect to the
validity or value (of the kind or amount) of any Common Stock, or of any other
securities or property, which may at any time be issued or delivered upon the
conversion of any Term B Loan ; and it or they do not make any representation
with respect thereto.  Neither the Agent, subject to the provisions of
Section 8.1, nor any Conversion Agent shall be responsible for any failure of
the Borrower to make any cash payment or to issue, transfer or deliver any
shares of stock or share certificates or other securities or property upon the
surrender of any Term B Loans  for the purpose of conversion; and the Agent,
subject to the provisions of Section 8.1, and any Conversion Agent shall not be
responsible or liable for any failure of the Borrower to comply with any of the
covenants of the Borrower contained in this Article.

 

Section 10.14                           Shares of Common Stock to be Issued. 
Any shares of Common Stock issued by the Borrower to the Term B Lenders:

 

(a)                                   (i)                                    
shall not require registration under any federal securities law before such
shares may be freely transferable without being subject to any transfer
restrictions under the Securities Act upon repurchase or redemption, as the case
may be, or if such registration is required, such registration shall be
completed and shall become effective prior to the Repurchase Date; and

 

(ii)                                   shall not require registration with, or
approval of, any governmental authority under any state law or any other federal
law before shares may be validly issued or delivered upon repurchase or
redemption or if such registration is required or such approval must be
obtained, such registration shall be completed or such approval shall be
obtained prior to the Repurchase Date.

 

(b)                                  The shares of Common Stock to be listed
upon repurchase of Term B Loans hereunder are, or shall have been, approved for
listing on the Nasdaq National Market or the New York Stock Exchange or listed
on another national securities exchange, in any case, prior to the Repurchase
Date.

 

(c)                                   All shares of Common Stock which may be
issued upon conversion of Term B Loans will be issued out of the Borrower’s
authorized but unissued Common Stock or treasury stock and will, upon issue, be
duly and validly issued and fully paid and nonassessable and free of any
preemptive or similar rights.

 

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(d)                                  If such payment in shares of Common Stock
would cause any Term B Lender (including its Affiliates) to become, directly or
indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder) of more than
9.99% of the shares of the Common Stock outstanding at such time, than any
purported payment made by the Borrower by delivery of shares of Common Stock
shall be void, and any amounts owed to such Term B Lender (in excess of the
9.99%) shall be payable by the Borrower in cash.

 

* * * * *

 

(k)                                  The Loan Agreement is hereby amended by
adding the following as Article XI:

 

ARTICLE XI
MAKE-WHOLE PREMIUM

 

Section 11.1                                [Intentionally Omitted].

 

Section 11.2                                Make-Whole Premium.

 

(a)                                  If a Fundamental Change occurs, the
Borrower shall pay the Make-Whole Premium, if any, to Term B Lenders who convert
their Term B Loans pursuant to the Fundamental Change (by submitting a
Fundamental Change Conversion Notice substantially similar in form to
Exhibit I).  Accrued but unpaid interest and the Make-Whole Premium, if any,
shall be paid on the Repurchase Date to Term B Lenders who exercise such
conversion right.

 

(b)                                 The “Make-Whole Premium” shall be determined
as follows:

 

(i)                                  [Intentionally Omitted];

 

(ii)                               If the Stock Price is less than $3.20
(subject to adjustment pursuant to Section 11.2) (the “Stock Price Threshold”),
no Make-Whole Premium shall be paid;

 

(iii)                            If the Stock Price exceeds $16.00 (subject to
adjustment pursuant to Section 11.2) (the “Stock Price Cap”), no Make-Whole
Premium shall be paid; and

 

(iv)                           In all other cases, the shares delivered with
respect to each Term B Note surrendered for conversion in connection with a
Fundamental Change shall be increased by an additional number of shares of
Common Stock (the “Additional Shares”) as described in
Section 11.2(c)(iii) below.

 

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(c)                                  For purposes of Section 11.2(c), the
following terms shall have the meaning indicated:

 

“Effective Date” means the date that a Fundamental Change becomes effective.

 

“Stock Price” means the price paid per share of Common Stock in the transaction
constituting the Fundamental Change, determined as follows:

 

(i)                                  If holders of the Common Stock receive only
cash in the transaction constituting the Fundamental Change, the Stock Price
shall equal the cash amount paid per share of Common Stock; and

 

(ii)                               In all other cases, the Stock Price shall be
the average of the daily Trading Prices per share of Common Stock for the ten
consecutive Trading Day period ending on the Trading Day immediately preceding
the Effective Date.

 

“Additional Shares” means the additional shares to be paid in connection with
the Make-Whole Premium (the “Make-Whole Premium”), as set forth on the table
below (the “Make-Whole Table”) for the Stock Price and the Effective Date.  The
Number of Additional Shares set forth in the Make-Whole Table shall be adjusted
as of any date on which the Conversion Price is adjusted pursuant to
Section 10.4, such that the Additional Shares shall be the Additional Shares
immediately prior to such adjustment, multiplied by a fraction, the numerator of
which is the Conversion Price immediately prior to the adjustment and the
denominator of which shall be the Conversion Price as so adjusted.  The Stock
Prices set forth in the first row of the table below (i.e., the column headers)
shall be adjusted as of any date on which the Conversion Price is adjusted to
equal the Stock Prices applicable immediately prior to such adjustment,
multiplied by a fraction, the numerator of which shall be the Conversion Price
as so adjusted and the denominator of which shall be the Conversion Price
immediately prior to the adjustment.

 

The following table illustrates what the Additional Shares would be for various
Stock Prices.

 

Additional Shares Upon Fundamental Change
(shares per $1,000 principal amount of Term B Loans)

 

STOCK PRICE

 

Effective Date

 

$

3.20

 

$

3.60

 

$

4.00

 

$

4.40

 

$

4.80

 

$

5.20

 

$

5.60

 

$

6.00

 

$

6.40

 

$

6.80

 

$

7.20

 

$

7.60

 

$

8.00

 

$

10.00

 

$

12.00

 

$

14.00

 

$

16.00

 

Nov. 15, 2010

 

100

 

89

 

80

 

73

 

67

 

62

 

57

 

53

 

25

 

24

 

22

 

21

 

20

 

16

 

13

 

11

 

10

 

Nov. 15, 2011

 

75

 

67

 

60

 

55

 

50

 

50

 

46

 

43

 

40

 

13

 

12

 

11

 

10

 

8

 

7

 

6

 

5

 

Nov. 15, 2012

 

50

 

44

 

40

 

36

 

33

 

31

 

29

 

27

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

Nov. 15, 2013

 

25

 

22

 

20

 

18

 

17

 

15

 

14

 

13

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

Nov. 15, 2014

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

40

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The exact Stock Price and Effective Date may not be set forth on the table.  In
such event if the Stock Price is between two Stock Prices on the table or the
Effective Date is between two dates on the table, the Additional Shares will be
determined by straight-line interpolation between Additional Shares amounts set
forth for the higher and lower Stock Prices and the two dates, as applicable,
based on a 365-day year.

 

A calculation agent (not the Agent) appointed from time to time by the Borrower
(the “Calculation Agent”) shall, on behalf of and on request by the Borrower or
the Agent, calculate (A) the Stock Price and (B) the Make-Whole Premium with
respect to such Stock Price, based on the Effective Date specified by the
Borrower or the Agent, and shall deliver its calculation of the Stock Price and
Make-Whole Premium to the Borrower and the Agent within three Business Days of
the request by the Borrower or the Agent.  In addition, the Calculation Agent
shall, on behalf of and upon request by the Borrower or the Agent no less than
three Business Days prior to a Repurchase Date, make the determinations
described above and deliver its calculations to the Borrower or the Agent by
9 p.m. (New York City time) on the Trading Day preceding the Repurchase Date. 
The Borrower, or at the Borrower’s request, the Agent in the name and at the
expense of the Borrower, (X) shall notify the Term B Lenders, in the manner
provided in Section 9.4, of the Stock Price and Make-Whole Premium per $1,000
original principal amount of Term B Loans with respect to a Fundamental Change
as part of the Repurchase Event Purchase Notice delivered in connection with the
Fundamental Change and (Y) shall notify the Term B Lenders, in the manner
provided in Section 9.4, promptly by 9 a.m. (New York City time) on the
Repurchase Date of the number or amount of such securities, assets or property
into which the shares of Common Stock have been converted or exchanged as of the
Effective Date in connection with any Fundamental Change.  Any notice so given
shall be conclusively presumed to have been duly given, whether or not the Term
B Lender receives such notice.

 

Section 11.3           Adjustments Relating to the Make-Whole Premium.  Whenever
the Conversion Price shall be adjusted from time to time by the Borrower
pursuant to Section 10.4, the Stock Price Threshold and the Stock Price Cap
shall be adjusted and each of the Stock Prices set forth in the Make-Whole Table
shall be adjusted

 

41

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by multiplying each such amount by a fraction, the numerator of which is the
Conversion Price as so adjusted and the denominator of which is the Conversion
Price immediately prior to such adjustments.

 

* * * * *

 

(l)             The Loan Agreement is hereby amended by adding a new Article XI
thereto to read in its entirety as follows:

 

ARTICLE XII

REPURCHASE AT THE OPTION OF A LENDER UPON A
FUNDAMENTAL CHANGE

 

Section 12.1           Repurchase Right.

 

(a)           In the event that a Fundamental Change (a “Repurchase Event”)
shall occur, each Term B Lender shall have the right (the “Repurchase Right”),
at such Term B Lender’s option, to require the Borrower to repurchase, and upon
the exercise of such right the Borrower shall repurchase, all of such Term B
Lender’s Term B Loans for which a notice of prepayment has not previously been
given, or any portion of the principal amount thereof that is equal to $1,000 or
an integral multiple thereof as directed by such Term B Lender pursuant to
Section 12.3, on a date (the “Repurchase Date”) that is not less than 25 nor
more than 35 Business Days after the date of the Repurchase Event Notice for an
amount equal to 100% of the principal amount of the Term B Loans to be
repurchased (the  “Repurchase Price”) plus accrued and unpaid interest, to, but
excluding, the date on which such Term B Loans are repurchased pursuant to this
Section.

 

Section 12.2           [Intentionally Omitted].

 

Section 12.3           Repurchase Event Notice.

 

No later than 10 Business Days after the occurrence of a Fundamental Change, the
Borrower shall mail a written notice of the Repurchase Event (the “Repurchase
Event Notice”) by first-class mail to the Agent and to each Term B Lender
pursuant to Section 9.4.  The Repurchase Event Notice shall include a form of
notice (the “Repurchase Event Purchase Notice”) to be completed by the Term B
Lender and delivered to the Agent pursuant to Section 12.4, and shall state the
following:

 

(A)      that it is a Repurchase Event Notice pursuant to this Section;

 

(B)       the event causing the Repurchase Event and the date of such Repurchase
Event;

 

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(C)       the procedures with which such Term B Lender must comply to exercise
its right to have its Term B Loans purchased pursuant to Section 12.1, including
the date by which the completed Repurchase Event Purchase Notice pursuant to
Section 12.4 and the Term B Loans such Term B Lender elects to have purchased
pursuant to Section 12.1 must be delivered to the Agent in order to have such
Term B Loans purchased by the Borrower pursuant to Section 12.1, the name and
address of the Agent and that the Term B Loans as to which a Repurchase Event
Purchase Notice has been given may be converted, if they are otherwise
convertible pursuant to Article X, only if the completed and delivered
Repurchase Event Purchase Notice has been withdrawn in accordance with the terms
of the Agreement;

 

(D)       the Repurchase Date and the Repurchase Price;

 

(E)       [Intentionally Omitted];

 

(F)       the Conversion Price, the date on which the right to convert the
principal of the Term B Loans to be prepaid will terminate, the date on which
the Cash Settlement Averaging Period will begin (if the Borrower has elected to
deliver cash in lieu of all or a part of the shares of Common Stock to be issued
on conversion); and

 

(G)       that, unless the Borrower defaults in making payment of such
Repurchase Price, and interest, on the Term B Loans surrendered for purchase by
the Borrower will cease to accrue on and after the Repurchase Date, if
applicable.

 

No failure by the Borrower to give the foregoing Repurchase Event Notice shall
limit any Term B Lender’s right to exercise its rights pursuant to Section 12.1
or affect the validity of the proceedings for the purchase of its Term B Loans
hereunder.

 

Section 12.4           Delivery of Repurchase Event Purchase Notice; Form of
Repurchase Event Purchase Notice; Withdrawal of Repurchase Event Purchase
Notice.

 

(a)           The Borrower shall deliver, or cause the Agent to deliver, to all
Term B Lenders a form of Repurchase Event Purchase Notice, which with respect to
the Term B Lender’s Repurchase Rights set forth in Section 12.1, shall be
delivered to such Term B Lenders at least 20 Business Days prior to the
Repurchase Event Purchase Date and, as set forth in Section 12.3, shall be
included in the Repurchase Event Notice; provided, that the delivery of such
form of Repurchase Event Purchase Notice to the Term B Lenders shall be made in
the Borrower’s name and at the Borrower’s expense and the text of such form of
Repurchase Event

 

43

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Purchase Notice shall be prepared by the Borrower pursuant to clause (b) of this
Section.

 

(b)           The form of Repurchase Event Purchase Notice shall provide
instructions regarding procedures with which Term B Lenders must comply to
exercise their rights pursuant to Section 12.1 and the completion of the
Repurchase Event Purchase Notice and also shall state:

 

(A)          that it is the Repurchase Event Purchase Notice pursuant to
Sections 12.3 and 12.4 of this Agreement and must be completed by each Term B
Lender and delivered to the Agent, together with the delivery of the Term B
Lender’s Term B Notes for which the Term B Lender will exercise its Repurchase
Rights pursuant to Section 12.1, for such Term B Lender to receive the
Repurchase Price;

 

(B)           the name and address of the Agent to, and the date by, which the
completed Repurchase Event Purchase Notice and Term B Notes must be delivered in
order for the Term B Lender to receive the applicable purchase price;

 

(C)           the portion of the principal amount of the Term B Loan which the
Term B Lender will deliver to be repurchased, which portion must be in a
principal amount of $1,000 or an integral multiple thereof;

 

(D)          any other procedures then applicable that the Term B Lender must
follow to exercise rights under Article XII and a brief description of those
rights;

 

(E)           the Repurchase Date and the Repurchase Price;

 

(F)           the Conversion Price, the date on which the Cash Settlement
Averaging Period will begin (if the Borrower has elected to deliver cash in lieu
of all or part of the shares of Common Stock to be issued on conversion) and the
places where such Term B Notes may be surrendered for conversion;

 

(G)           the procedures with which such Term B Lender must comply to
exercise its right to have its Term B Loans repurchased pursuant to
Section 12.1, including the date by which the completed Repurchase Event
Purchase Notice pursuant to Section 12.4 and the Term B Loans the Term B Lender
elects to have repurchased pursuant to Section 12.1 must be delivered to Agent
in order to have such Term B Loans repurchased by the Borrower pursuant to
Section 12.1, the name and address of the Agent and that the Term B Loans as to
which a Repurchase Event Purchase Notice has been given may be converted, if
they are otherwise convertible pursuant to Article X, only if the completed and
delivered Repurchase Event Purchase Notice has been

 

44

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withdrawn in accordance with the terms of this Agreement, the Term B Lender’s
conversion rights pursuant to Article X, the Conversion Price then in effect and
any adjustments thereto;

 

(H)          the Term B Lender’s right to withdraw a completed and delivered
Repurchase Event Purchase Notice, the procedures for withdrawing a Repurchase
Event Purchase Notice, pursuant to clause (c) below and that Term B Loans as to
which a completed and delivered Repurchase Event Purchase Notice may be
converted, if they are convertible only in accordance with Article X, if the
applicable completed and delivered Repurchase Event Purchase Notice has been
withdrawn; and

 

(I)            that, unless the Borrower defaults in making payment on Term B
Loans for which a Repurchase Event Purchase Notice has been submitted, interest
on such Term B Loans will cease to accrue on the Repurchase Event Purchase Date.

 

(c)           Notwithstanding anything herein to the contrary, any Term B Lender
which has delivered a completed Repurchase Event Purchase Notice to the Agent
shall have the right to withdraw such Repurchase Event Purchase Notice by
delivery of a written notice of withdrawal delivered to the office of the Agent
in accordance with the Repurchase Event Purchase Notice at any time prior to the
close of business on the Business Day prior to the Repurchase Date specifying:

 

(A)          the certificate number, if any, of the Term B Note in respect of
which such notice of withdrawal is being submitted;

 

(B)           the principal amount of the Term B Loan with respect to which such
notice of withdrawal is being submitted; and

 

(C)           the principal amount, if any, of such Term B Loan which remains
subject to the original Repurchase Event Purchase Notice and which has been or
will be delivered for purchase by the Borrower.

 

The Agent shall promptly notify the Borrower of the receipt by it of any
Repurchase Event Purchase Notice or written notice of withdrawal thereof.

 

Section 12.5           Exercise of Repurchase Rights.

 

To exercise a Repurchase Right pursuant to Section 12.1, a Term B Loan must
deliver to the Agent at its offices on or prior to the Repurchase Date the
following:

 

(a)           a completed Repurchase Event Purchase Notice, the form of which is
provided in Exhibit G hereto; and

 

45

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(b)           the Term B Notes with respect to which the Repurchase Right is
being exercised, with, if the Borrower or the Agent so requires, due endorsement
by, or a written instrument of transfer, in form satisfactory to the Borrower
and the Agent duly executed by, the respective Term B Lender or such Term B
Lender’s attorney duly authorized in writing.

 

Section 12.6           Deposit and Payment of the Repurchase Price.

 

(a)           In the event a Repurchase Right shall be exercised in accordance
with the terms hereof, the Borrower shall pay or cause to be paid to the Agent
the Repurchase Price in cash for payment to the applicable Term B Lenders on the
Repurchase Date, together with accrued and unpaid interest to, but excluding,
the Repurchase Date payable in cash with respect to the Term B Loans as to which
the Repurchase Right has been exercised.

 

(b)           If any Term B Loan (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such Term B
Loan (or portion thereof, as the case may be) shall, until paid, bear interest
to the extent permitted by applicable law from the Repurchase Date at the
applicable interest rate, and each Term B Loan shall remain convertible into
Common Stock until the principal of such Term B Loan (or portion thereof, as the
case may be) shall have been paid or duly provided for.

 

(c)           Any Term B Note which is to be repurchased only in part shall be
surrendered to the Agent (with, if the Borrower or the Agent so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Borrower and the Agent duly executed by the Term B Lender holding such Term B
Notes or his attorney duly authorized in writing), and the Borrower shall
execute, and the Agent shall authenticate and make available for delivery to the
Term B Lender holding such Term B Notes without service charge, a new Term B
Note, containing identical terms and conditions, each in an authorized
denomination in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Term B Loan so surrendered.

 

(d)           [Intentionally Omitted].

 

(e)           [Intentionally Omitted].

 

(f)            [Intentionally Omitted].

 

(g)           All Term B Notes delivered for repurchase shall be delivered to
the Agent to be canceled at the direction of the Agent, which shall dispose of
the same as provided in Section 2.12.

 

46

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(m)          The Exhibits to the Loan Agreement shall be amended in the
following manner:

 

Exhibit A shall be “[reserved]”; and new Exhibits E, F, G, H, I in substantially
the form of Exhibits A, B, C, D, and E respectively, shall be added to the Loan
Agreement.

 

2.             Conditions Precedent to Effectiveness of Amendment.  This
Amendment shall become effective as of the date hereof when, and only when, each
of the following conditions shall have been satisfied (it being understood that
the satisfaction of one or more of the following conditions may occur
concurrently with the effectiveness of this Amendment) or waived, as determined
by the Agent in its sole discretion (such date, the “Second Amendment Effective
Date”).

 

(a)           The Agent shall have received a counterpart of this Amendment duly
executed by the Borrower and each other Loan Party.

 

(b)           The representations and warranties set forth herein shall be true
and correct as of the date hereof and such representations and warranties shall
continue to be true after giving effect to this Amendment and the other
transactions contemplated hereby.

 

(c)           The Borrower shall have received a written invoice for, and shall
have reimbursed, all reasonable fees, costs, and expenses of the Agent and the
Lenders (including filing and recording costs and fees and expenses of Gibson
Dunn & Crutcher LLP, counsel to the Agent) incurred or estimated to be incurred
on or before the Second Amendment Effective Date in connection with this
Amendment and the transactions contemplated hereby.

 

(d)           The Borrower shall have paid to the Agent all accrued and unpaid
interest on the Existing Term Loans.

 

(e)           No Default of Event of Default shall have occurred or be
continuing on the date hereof

 

(f)            The Agent shall have received all Existing Term Notes outstanding
under the Existing Loan Agreement for cancellation.

 

(g)           Each Lender shall receive Term A Notes and Term B Notes, as
applicable, and the aggregate principal amount thereof shall equal the principal
amount of the Existing Term Notes submitted to the Agent pursuant to
Section 2.3, plus all accrued PIK .Interest thereon to the Second Amendment
Effective Date.

 

(h)           The Agent shall have received legal opinions from Borrower’s
counsel in form and substance acceptable to the Agent and the Lenders,
including, without limitation, confirmation that (a) Term A Loans and Term B
Loans, the Term A Notes and Term B Notes constitute “First Lien Lender Claims”
under and are entitled to the benefits of the Intercreditor Agreement dated as
of the October 30, 2009, between the Agent and the Trustee (as defined therein)
(the “Intercreditor Agreement”), (b) the Loan Documents (as such term is
modified by this Amendment) constitute First Lien Loan Documents under and are
entitled to the benefits of

 

47

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the Intercreditor Agreement and (c) such other opinions as the Agent or the
Lenders may require including as to no conflicts with material contracts,
charter documents or law and enforceability.

 

(i)            The Agent shall have received:

 

(i)            a certificate of the secretary or assistant secretary of the
Borrower and the Guarantors (the “Loan Parties”) dated the Second Amendment
Effective Date, certifying (A) that attached thereto is a true and complete copy
of the organizational documents of such Loan Party certified (to the extent
applicable) as of a recent date by the Secretary of State of the state of such
entity’s organization, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such entity authorizing
the execution, delivery and performance of the Amendment and such other
documents as may be executed concurrently herewith to which such person is a
party, and that such resolutions have not been modified, rescinded or amended
and are in full force and effect and (C) as to the incumbency and specimen
signature of each officer executing this Agreement or any other document
delivered in connection herewith on behalf of such entity (together with a
certificate of another officer as to the incumbency and specimen signature of
the secretary or assistant secretary executing the certificate in this
clause (i)); and

 

(ii)           a certificate as to the good standing of each Loan Party (in
so-called “long-form” if available) as of a recent date, from such Secretary of
State (or other applicable Governmental Authority).

 

(j)            The Agent shall have received a certificate, dated the Second
Amendment Effective Date and signed by the chief executive officer and the chief
financial officer of Borrower, certifying that the conditions precedent set
forth herein have been satisfied as of the Second Amendment Effective Date.

 

(k)           The Agent shall have received such other documents as the Lenders
or the Agent, may reasonably request.

 

3.             Representations and Warranties of the Borrower.  The Borrower
hereby represents and warrants to the Lenders that:

 

(a)           To the Borrower’s Knowledge, no Default or Event of Default exists
under the Loan Agreement as of the date hereof.

 

(b)           The execution and delivery of this Amendment by each Loan Party
will result in valid and legally binding obligations of such entity enforceable
against it in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors’ rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.

 

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(c)           The execution, delivery and performance by the Borrower and the
other Loan Parties of this Amendment has been duly authorized by all necessary
corporate or other organizational action, and do not and will not: 
(i) contravene the terms of any of such Person’s organizational documents;
(ii) conflict with or result in any breach or contravention of, or result in or
require the creation of any Lien, or require any payment by the Borrower to be
made under (A) any contractual obligation to which the Borrower is a party or
affecting the Borrower or the properties of the Borrower or any of its
subsidiaries or (B) any order, injunction, writ or decree of any governmental
authority or any arbitral award to which the Borrower or any material portion of
its property is subject; or (iii) violate any applicable law in any material
respect.  No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any governmental authority or any other Person is
necessary or required on the part of the Borrower or the other Loan Parties in
connection with the execution, delivery or performance by, or enforcement
against the Borrower or the other Loan Parties of, this Amendment, other than
the filing of any uniform commercial code financing statements or amendments
thereto and any filings required under federal securities laws.

 

(d)           Each of the representations and warranties made by any Loan Party
set forth in Article IV of the Loan Agreement or in any other Loan Document are
true and correct in all material respects (except that any representation and
warranty that is qualified as to “materiality” or “Material Adverse Occurrence”
are true and correct in all respects) on and as of the Second Amendment
Effective Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date.

 

(e)           The Term A Loans and Term B Loans, the Term A Notes and Term B
Notes constitute “First Lien Lender Claims” under and are entitled to the
benefits of the Intercreditor Agreement.

 

(f)            The Loan Documents (as such term is modified by this Amendment)
constitute First Lien Loan Documents under and are entitled to the benefits of
the Intercreditor Agreement.

 

4.             Releases.  In partial consideration of the Lenders’ willingness
to enter into this Amendment, the Borrower and the other Loan Parties hereby
release the Lenders and the Agent and their respective officers, affiliates,
employees, representatives, agents, financial advisors, counsel and directors
from any and all actions, causes of action, claims, demands, damages and
liabilities of whatever kind or nature, in law or in equity, now known or
unknown, suspected or unsuspected, to the extent that any of the foregoing
arises from any action or failure to act in connection with the Loan Agreement
or any other Loan Document or any document entered into in connection therewith
on or prior to the date hereof.

 

5.             Counterparts.  This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument.  Delivery of an
executed counterpart of a signature page to this Amendment by telecopier or
email shall be effective as delivery of a manually executed counterpart of this
Amendment.

 

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6.             APPLICABLE LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

7.             Entirety.  This Amendment and the Loan Documents, and any
documents entered into in connection herewith, embody the entire agreement
between the parties and supersede all prior agreements and understandings, if
any, relating to the subject matter hereof.  This Amendment, together with the
Loan Documents and any documents entered into in connection herewith, represent
the final agreement between the parties and may not be contradicted by evidence
of prior, contemporaneous or subsequent oral agreements of the parties.  There
are no oral agreements between the parties.  In the event there is a conflict
between this Amendment and the Loan Documents or any documents entered into in
connection herewith, this Amendment shall control.

 

8.             Severability.  In case any provision in or obligation hereunder
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

 

9.             Successors and Assigns; Transfers.  This Amendment shall be
binding upon and inure to the benefit of each of the parties and their
respective successors and assigns.

 

10.           Notices.  Any notice or other communication to any party in
connection with this Amendment shall be in writing and shall be sent by manual
delivery, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing.  All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by facsimile transmission, from the first business
day after the date of sending if sent by overnight courier, or from four days
after the date of mailing if mailed.

 

11.           Costs and Expenses.  Whether or not the Second Amendment Effective
Date occurs, the Borrower agree to pay all reasonable costs and expenses of the
Agent in connection with the preparation, execution and delivery of this
Amendment and the related Term Sheet and the other instruments and documents to
be delivered hereunder, if any (including, without limitation, the reasonable
fees and expenses of Gibson Dunn & Crutcher LLP, counsel to the Agent).

 

12.           Reference to and Effect on the Existing Loan Agreement.  On and
after the Second Amendment Effective Date, each reference in the Existing Loan
Agreement to the “Agreement,” “hereunder,” “hereof’ or words of like import
referring to the Existing Loan Agreement, and each reference in each of the Loan
Documents to “the Loan Agreement,” “thereunder,” “thereof’ or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Existing Loan Agreement, as amended by this Amendment.  The Existing Loan
Agreement and each of the other Loan Documents, as specifically amended by this
Amendment, are and shall continue to be in full force and effect and are hereby
in all respects

 

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ratified and confirmed.  The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Agent under any of the Loan
Documents, or constitute a waiver of any provision of any of the Loan
Documents.  This Amendment is a Loan Document.

 

13.           Reaffirmation.  Each Loan Party hereby confirms its respective
guarantees, pledges, grants of security interests and mortgages and other
obligations, as applicable, under and subject to the terms of each Loan Document
to which it is party, and agrees that, notwithstanding the effectiveness of this
Amendment, such guarantees, pledges, grants of security interests and mortgages
and other obligations, and the terms of each Loan Document to which it is a
party, are not impaired or affected in any manner whatsoever and shall continue
to be in full force and effect after giving effect to this Amendment.  The
undersigned include all Guarantors.

 

14.           Waivers and Amendments.  This Amendment can be waived, modified,
amended, or terminated only explicitly in a writing signed by the Borrower and
the Agent.  A waiver so signed shall be effective only in the specific instance
and for the specific purpose given.

 

15.           Third Party Beneficiaries.  This Amendment is intended for the
benefit of the parties hereto and their respective successors and assigns, and
is not intended to be enforceable by any third parties other than any acquiring
parties under a Definitive Purchase Agreement.

 

16.           Captions.  Captions in this Amendment are for reference and
convenience only and shall not affect the interpretation or meaning of any
provision of this Amendment.

 

[Signature pages follow.]

 

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

 

 

 

VITESSE SEMICONDUCTOR CORPORATION

 

 

 

 

 

 

By:

/s/ Christopher R. Gardner

 

Name: Christopher R. Gardner

 

Title: Chief Executive Officer

 

 

 

 

 

VITESSE MANUFACTURING & DEVELOPMENT CORPORATION

 

 

 

 

 

 

By:

/s/ Christopher R. Gardner

 

Name: Christopher R. Gardner

 

Title: President

 

 

 

 

 

VITESSE SEMICONDUCTOR SALES CORPORATION

 

 

 

 

 

 

By:

/s/ Christopher R. Gardner

 

Name: Christopher R. Gardner

 

Title: President

 

 

 

 

 

WHITEBOX VSC LTD., as Lender and Agent under the Loan Agreement

 

 

 

 

 

 

By:

/s/ Jonathan Wood

 

Name: Jonathan Wood

 

Title: Director

 

[Signature Page to Second Amendment to Loan Agreement]

 

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