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

CREDIT AGREEMENT
by and among
SILICON GRAPHICS INTERNATIONAL CORP., and
SILICON GRAPHICS FEDERAL, INC.
as Borrowers,
THE LENDERS THAT ARE SIGNATORIES HERETO
as the Lenders,
and
WELLS FARGO CAPITAL FINANCE, LLC
as the Agent
Dated as of December 5, 2011

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

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

TABLE OF CONTENTS

 
 
 
Page
1.
DEFINITIONS AND CONSTRUCTION
1
 
1.1
Definitions
1
 
1.2
Accounting Terms
1
 
1.3
Code
1
 
1.4
Construction
1
 
1.5
Schedules and Exhibits
2
2.
LOANS AND TERMS OF PAYMENT
2
 
2.1
Revolver Advances
2
 
2.2
[Reserved]
3
 
2.3
Borrowing Procedures and Settlements
3
 
2.4
Payments; Reductions of Commitments; Prepayments
8
 
2.5
Overadvances
11
 
2.6
Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations
11
 
2.7
Crediting Payments
12
 
2.8
Designated Account
13
 
2.9
Maintenance of Loan Account; Statements of Obligations
13
 
2.10
Fees
13
 
2.11
Letters of Credit
14
 
2.12
LIBOR Option
18
 
2.13
Capital Requirements
20
 
2.14
Joint and Several Liability of Borrowers
21
 
2.15
Increase in Revolver Commitments
23
3.
CONDITIONS; TERM OF AGREEMENT
24
 
3.1
Conditions Precedent to the Initial Extension of Credit
24
 
3.2
Conditions Precedent to all Extensions of Credit
24
 
3.3
Maturity
24
 
3.4
Effect of Maturity
24
 
3.5
Early Termination by Borrowers
24
 
3.6
Conditions Subsequent
25
4.
REPRESENTATIONS AND WARRANTIES
25
 
4.1
Due Organization and Qualification; Subsidiaries
25
 
4.2
Due Authorization; No Conflict
26
 
4.3
Governmental Consents
26

-i-

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

TABLE OF CONTENTS
(continued)
 
 
 
Page
 
4.4
Binding Obligations; Perfected Liens
26
 
4.5
Title to Assets; No Encumbrances
27
 
4.6
Jurisdiction of Organization; Location of Chief Executive Office; Organizational
Identification Number; Commercial Tort Claims
27
 
4.7
Litigation
27
 
4.8
Compliance with Laws
27
 
4.9
No Material Adverse Change
28

 
4.10
Fraudulent Transfer
28
 
4.11
Employee Benefits
28
 
4.12
Environmental Condition
28
 
4.13
Reserved
28
 
4.14
Leases
28
 
4.15
Deposit Accounts and Securities Accounts
29
 
4.16
Complete Disclosure
29
 
4.17
Reserved
29
 
4.18
Patriot Act
29
 
4.19
Indebtedness
29
 
4.20
Payment of Taxes
29
 
4.21
Margin Stock
30
 
4.22
Governmental Regulation
30
 
4.23
OFAC
30
 
4.24
Employee and Labor Matters
30
 
4.25
Inactive Subsidiaries
31
 
4.26
[Reserved]
31
 
4.27
[Reserved]
31
 
4.28
Eligible Accounts
31
 
4.29
Eligible Inventory
31
 
4.30
Locations of Inventory and Equipment
31
 
4.31
Inventory Records
31
5.
AFFIRMATIVE COVENANTS
31
 
5.1
Financial Statements, Reports, Certificates
31
 
5.2
Collateral Reporting
32
 
5.3
Existence
32
 
5.4
Maintenance of Properties
32

-ii-

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

TABLE OF CONTENTS
(continued)
 
 
 
Page
 
5.5
Taxes
32
 
5.6
Insurance
32
 
5.7
Inspection
33
 
5.8
Compliance with Laws
33
 
5.9
Environmental
33
 
5.10
Disclosure Updates
34
 
5.11
Formation of Subsidiaries
34
 
5.12
Further Assurances
34
 
5.13
Lender Meetings
34
 
5.14
[Reserved]
35
 
5.15
Location of Inventory and Equipment
35
6.
NEGATIVE COVENANTS
35
 
6.1
Indebtedness
35
 
6.2
Liens
35
 
6.3
Restrictions on Fundamental Changes
35
 
6.4
Disposal of Assets
36
 
6.5
Change Name
36
 
6.6
Nature of Business
36
 
6.7
Prepayments and Amendments
36
 
6.8
Change of Control
36
 
6.9
Restricted Junior Payments
37
 
6.10
Accounting Methods
37
 
6.11
Investments; Controlled Investments
37
 
6.12
Transactions with Affiliates
38
 
6.13
Use of Proceeds
38
 
6.14
[Reserved]
38
 
6.15
Inactive Subsidiaries
39
 
6.16
Consignments
39
 
6.17
Inventory and Equipment with Bailees
39
7.
FINANCIAL COVENANTS
39
8.
EVENTS OF DEFAULT
39
9.
RIGHTS AND REMEDIES
41
 
9.1
Rights and Remedies
41

    

-iii-

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

TABLE OF CONTENTS
(continued)
 
 
 
Page
 
9.2
Remedies Cumulative
42
10.
WAIVERS; INDEMNIFICATION
42
 
10.1
Demand; Protest; etc
42
 
10.2
The Lender Group's Liability for Collateral
42
 
10.3
Indemnification
42
11.
NOTICES
43
12.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
44
13.
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS
45
 
13.1
Assignments and Participations
45
 
13.2
Successors
48
14.
AMENDMENTS; WAIVERS
48
 
14.1
Amendments and Waivers
48
 
14.2
Replacement of Certain Lenders
50
 
14.3
No Waivers; Cumulative Remedies
50
15.
AGENT; THE LENDER GROUP
50
 
15.1
Appointment and Authorization of Agent
50
 
15.2
Delegation of Duties
51
 
15.3
Liability of Agent
51
 
15.4
Reliance by Agent
52
 
15.5
Notice of Default or Event of Default
52
 
15.6
Credit Decision
52
 
15.7
Costs and Expenses; Indemnification
53
 
15.8
Agent in Individual Capacity
53
 
15.9
Successor Agent
54
 
15.10
Lender in Individual Capacity
54
 
15.11
Collateral Matters
55
 
15.12
Restrictions on Actions by Lenders; Sharing of Payments
56
 
15.13
Agency for Perfection
56
 
15.14
Payments by Agent to the Lenders
57
 
15.15
Concerning the Collateral and Related Loan Documents
57
 
15.16
Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information
57
 
15.17
Several Obligations; No Liability
58
16.
WITHHOLDING TAXES
58

-iv-

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

TABLE OF CONTENTS
(continued)
 
 
 
Page
17.
GENERAL PROVISIONS
61
 
17.1
Effectiveness
61
 
17.2
Section Headings
61
 
17.3
Interpretation
61
 
17.4
Severability of Provisions
61
 
17.5
Bank Product Providers
61
 
17.6
Debtor-Creditor Relationship
62
 
17.7
Counterparts; Electronic Execution
62
 
17.8
Revival and Reinstatement of Obligations
62
 
17.9
Confidentiality
62
 
17.10
Lender Group Expenses
63
 
17.11
Survival
63
 
17.12
Patriot Act
64
 
17.13
Integration
64
 
17.14
Parent as Agent for Borrowers
64
EXHIBITS AND SCHEDULES
 
Exhibit A-1
Form of Assignment and Acceptance
 
Exhibit B-1
Form of Borrowing Base Certificate
 
Exhibit B-2
Form of Bank Product Provider Letter Agreement
 
Exhibit C-1
Form of Compliance Certificate
 
Exhibit L-1
Form of LIBOR Notice
 
Schedule A-1
Agent’s Account
 
Schedule C-1
Commitments
 
Schedule 1.1
Definitions
 
Schedule 3.1
Conditions Precedent
 
Schedule 3.6
Conditions Subsequent
 
Schedule 5.1
Financial Statements, Reports, Certificates
 
Schedule 5.2
Collateral Reporting
 

-v-

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

CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of December 5, 2011
by and among the lenders identified on the signature pages hereof (each of such
lenders, together with their respective successors and permitted assigns, is
referred to hereinafter as a “Lender”, as that term is hereinafter further
defined), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability
company, as administrative agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, “Agent”), and SILICON GRAPHICS
INTERNATIONAL CORP., a Delaware corporation (“Parent”), SILICON GRAPHICS
FEDERAL, INC., a Delaware corporation (“Silicon Federal”; and together with
Parent each individually a “Borrower”, and individually and collectively,
jointly and severally, the “Borrowers”).
The parties agree as follows:
 
1.
DEFINITIONS AND CONSTRUCTION.

 
1.1    Definitions. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.
 
1.2    Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP; provided, however, that if any
Borrower notifies Agent that such Borrower requests an amendment to any
provision hereof to eliminate the effect of any Accounting Change occurring
after the Closing Date or in the application thereof on the operation of such
provision (or if Agent notifies any Borrower that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such Accounting Change or in the
application thereof, then Agent and such Borrower agree that they will negotiate
in good faith amendments to the provisions of this Agreement that are directly
affected by such Accounting Change with the intent of having the respective
positions of the Lenders and such Borrower after such Accounting Change conform
as nearly as possible to their respective positions as of the date of this
Agreement and, until any such amendments have been agreed upon and agreed to by
the Required Lenders, the provisions in this Agreement shall be calculated as if
no such Accounting Change had occurred. Notwithstanding anything in this
Agreement to the contrary, for the purposes of calculating compliance with the
financial covenants of this Agreement, no effect shall be given to any change in
GAAP arising out of a change described in the Proposed Accounting Standards
Update to Leases (Topic 840) dated August 17, 2010 or a substantially similar
pronouncement. When used herein, the term “financial statements” shall include
the notes and schedules thereto. Whenever the term “Parent” is used in respect
of a financial covenant or a related definition, it shall be understood to mean
Parent and its Subsidiaries, on a consolidated basis, unless the context clearly
requires otherwise.
 
1.3    Code. Any terms used in this Agreement that are defined in the Code shall
be construed and defined as set forth in the Code unless otherwise defined
herein; provided, however, that to the extent that the Code is used to define
any term herein and such term is defined differently in different Articles of
the Code, the definition of such term contained in Article 9 of the Code shall
govern.
 
1.4    Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or

1

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

such other Loan Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such other Loan Document, as the case
may be. Section, subsection, clause, schedule, and exhibit references herein are
to this Agreement unless otherwise specified. Any reference in this Agreement or
in any other Loan Document to any agreement, instrument, or document shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto and
thereof, as applicable (subject to any restrictions on such alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein). The words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties. Any
reference herein or in any other Loan Document to the satisfaction, repayment,
or payment in full of the Obligations shall mean the repayment in full in cash
or immediately available funds (or, (a) in the case of contingent reimbursement
obligations with respect to Letters of Credit, providing Letter of Credit
Collateralization, and (b) in the case of obligations with respect to Bank
Products (other than Hedge Obligations), providing Bank Product
Collateralization) of all of the Obligations (including the payment of any
Lender Group Expenses that have accrued irrespective of whether demand has been
made therefore and the payment of any termination amount then applicable (or
which would or could become applicable as a result of the repayment of the other
Obligations) under Hedge Agreements provided by Hedge Providers) other than (i)
unasserted contingent indemnification Obligations, (ii) any Bank Product
Obligations (other than Hedge Obligations) that, at such time, are allowed by
the applicable Bank Product Provider to remain outstanding without being
required to be repaid or cash collateralized, and (iii) any Hedge Obligations
that, at such time, are allowed by the applicable Hedge Provider to remain
outstanding without being required to be repaid. Any reference herein to any
Person shall be construed to include such Person’s successors and assigns. Any
requirement of a writing contained herein or in any other Loan Document shall be
satisfied by the transmission of a Record.
 
1.5    Schedules and Exhibits. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
 
2.
LOANS AND TERMS OF PAYMENT.

 
2.1    Revolver Advances.
(a)Subject to the terms and conditions of this Agreement, and during the term of
this Agreement, each Lender with a Revolver Commitment agrees (severally, not
jointly or jointly and severally) to make revolving loans (“Advances”) to
Borrowers in an amount at any one time outstanding not to exceed the lesser of:
(i)such Lender’s Revolver Commitment, or
(ii)such Lender’s Pro Rata Share of an amount equal to the lesser of:
(A)the Maximum Revolver Amount less the sum of (1) the Letter of Credit Usage at
such time, plus (2) the principal amount of Swing Loans outstanding at such
time, and
(B)the Borrowing Base at such time less the sum of (1) the Letter of Credit
Usage at such time, plus (2) the principal amount of Swing Loans outstanding at
such time.
(b)Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowed at any time during the
term of this Agreement. The outstanding principal amount of the Advances,
together with interest accrued and unpaid thereon, shall be

2

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

due and payable on the Maturity Date or, if earlier, on the date on which they
are declared due and payable pursuant to the terms of this Agreement.
(c)Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right (but not the obligation) to establish, increase, reduce,
eliminate, or otherwise adjust reserves from time to time against the Borrowing
Base or the Maximum Revolver Amount in such amounts, and with respect to such
matters, as Agent in its Permitted Discretion shall deem necessary or
appropriate, including (i) reserves in an amount equal to the Bank Product
Reserve Amount, (ii) Rent Reserves, and (iii) reserves with respect to (A) sums
that Parent is or its Subsidiaries are required to pay under this Agreement or
any other Loan Document (such as taxes, assessments, insurance premiums, or, in
the case of leased assets, rents or other amounts payable under such leases) and
has failed to pay when due, and (B) amounts owing by Parent or its Subsidiaries
to any Person to the extent secured by a Lien on, or trust over, any of the
Collateral (other than a Permitted Lien which is a permitted purchase money Lien
or the interest of a lessor under a Capital Lease), which Lien or trust, in the
Permitted Discretion of Agent likely would have a priority superior to Agent’s
Liens (such as the Wisconsin Wage Lien, Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens
or trusts for ad valorem, excise, sales, or other taxes where given priority
under applicable law) in and to such item of the Collateral.
 
2.2    [Reserved].
 
2.3    Borrowing Procedures and Settlements.
(a)    Procedure for Borrowing. Each Borrowing shall be made by a written
request by an Authorized Person delivered to Agent. Unless Swing Lender is not
obligated to make a Swing Loan pursuant to Section 2.3(b) below, such notice
must be received by Agent no later than 10:00 a.m. (California time) on the
Business Day that is the requested Funding Date specifying (i) the amount of
such Borrowing, and (ii) the requested Funding Date, which shall be a Business
Day; provided, however, that if Swing Lender is not obligated to make a Swing
Loan as to a requested Borrowing, such notice must be received by Agent no later
than 10:00 a.m. (California time) on the Business Day prior to the date that is
the requested Funding Date. At Agent’s election, in lieu of delivering the
above-described written request, any Authorized Person may give Agent telephonic
notice of such request by the required time. In such circumstances, each
Borrower agrees that any such telephonic notice will be confirmed in writing
within 24 hours of the giving of such telephonic notice, but the failure to
provide such written confirmation shall not affect the validity of the request
or give rise to a Default or Event of Default.
(b)    Making of Swing Loans. In the case of a request for an Advance and so
long as either (i) the aggregate amount of Swing Loans made since the last
Settlement Date, minus the amount of Collections or payments applied to Swing
Loans since the last Settlement Date, plus the amount of the requested Advance
does not exceed $15,000,000, or (ii) Swing Lender, in its sole discretion, shall
agree to make a Swing Loan notwithstanding the foregoing limitation, Swing
Lender shall make an Advance in the amount of such requested Borrowing (any such
Advance made solely by Swing Lender pursuant to this Section 2.3(b) being
referred to as a “Swing Loan” and such Advances being referred to as “Swing
Loans”) available to Borrowers on the Funding Date applicable thereto by
transferring immediately available funds to the Designated Account. Anything
contained herein to the contrary notwithstanding, the Swing Lender may, but
shall not be obligated to, make Swing Loans at any time that one or more of the
Lenders is a Defaulting Lender. Each Swing Loan shall be deemed to be an Advance
hereunder and shall be subject to all the terms and conditions (including
Section 3) applicable to other Advances, except that all payments on any Swing
Loan shall be payable to Swing Lender solely for its own account. Subject to the
provisions of

3

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

Section 2.3(d)(ii), Swing Lender shall not make and shall not be obligated to
make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of
the applicable conditions precedent set forth in Section 3 will not be satisfied
on the requested Funding Date for the applicable Borrowing, or (ii) the
requested Borrowing would exceed the Availability on such Funding Date. Swing
Lender shall not otherwise be required to determine whether the applicable
conditions precedent set forth in Section 3 have been satisfied on the Funding
Date applicable thereto prior to making any Swing Loan. The Swing Loans shall be
secured by Agent’s Liens, constitute Advances and Obligations hereunder, and
bear interest at the rate applicable from time to time to Advances that are Base
Rate Loans.
(c)    Making of Loans.
(i)    In the event that Swing Lender is not obligated to make a Swing Loan,
then promptly after receipt of a request for a Borrowing pursuant to Section
2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m. (California
time) on the Business Day immediately preceding the Funding Date applicable
thereto, by telecopy, telephone, or other similar form of transmission, of the
requested Borrowing. Each Lender shall make the amount of such Lender’s Pro Rata
Share of the requested Borrowing available to Agent in immediately available
funds, to Agent’s Account, not later than 10:00 a.m. (California time) on the
Funding Date applicable thereto. After Agent’s receipt of the proceeds of such
Advances, Agent shall make the proceeds thereof available to Borrowers on the
applicable Funding Date by transferring immediately available funds equal to
such proceeds received by Agent to the Designated Account; provided, however,
that, subject to the provisions of Section 2.3(d)(ii), Agent shall not request
any Lender to make any Advance if it has knowledge that, and no Lender shall
have the obligation to make, any Advance if (1) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless such condition has
been waived, or (2) the requested Borrowing would exceed the Availability on
such Funding Date.
(ii)    Unless Agent receives notice from a Lender prior to 9:00 a.m.
(California time) on the date of a Borrowing, that such Lender will not make
available as and when required hereunder to Agent for the account of Borrowers
the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume
that each Lender has made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may (but shall not be
so required), in reliance upon such assumption, make available to Borrowers on
such date a corresponding amount. If any Lender shall not have made its full
amount available to Agent in immediately available funds and if Agent in such
circumstances has made available to Borrowers such amount, that Lender shall on
the Business Day following such Funding Date make such amount available to
Agent, together with interest at the Defaulting Lender Rate for each day during
such period. A notice submitted by Agent to any Lender with respect to amounts
owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest error.
If such amount is so made available, such payment to Agent shall constitute such
Lender’s Advance on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to Agent on the Business Day following the
Funding Date, Agent will notify Borrowers of such failure to fund and, upon
demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Advances composing such Borrowing.
(d)    Protective Advances and Optional Overadvances.
(i)    Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.3(d)(iv), Agent hereby is authorized
by Borrowers and the Lenders, from time to time in Agent’s sole discretion, (A)
after the occurrence and during the continuance of a Default

4

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

or an Event of Default, or (B) at any time that any of the other applicable
conditions precedent set forth in Section 3 are not satisfied, to make Advances
to, or for the benefit of, Borrowers on behalf of the Lenders that Agent, in its
Permitted Discretion deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, or (2) to enhance the likelihood of
repayment of the Obligations (other than the Bank Product Obligations) (any of
the Advances described in this Section 2.3(d)(i) shall be referred to as
“Protective Advances”).
(ii)    Any contrary provision of this Agreement or any other Loan Document
notwithstanding, but subject to Section 2.3(d)(iv), the Lenders hereby authorize
Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as
applicable, may, but is not obligated to, knowingly and intentionally, continue
to make Advances (including Swing Loans) to Borrowers notwithstanding that an
Overadvance exists or would be created thereby, so long as (A) after giving
effect to such Advances, the outstanding Revolver Usage does not exceed the
Borrowing Base by more than $10,000,000, and (B) after giving effect to such
Advances, the outstanding Revolver Usage (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender Group Expenses) does
not exceed the Maximum Revolver Amount. In the event Agent obtains actual
knowledge that the Revolver Usage exceeds the amounts permitted by the
immediately foregoing provisions, regardless of the amount of, or reason for,
such excess, Agent shall notify the Lenders as soon as practicable (and prior to
making any (or any additional) intentional Overadvances (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value, in which case Agent may make such
Overadvances and provide notice as promptly as practicable thereafter), and the
Lenders with Revolver Commitments thereupon shall, together with Agent, jointly
determine the terms of arrangements that shall be implemented with Borrowers
intended to reduce, within a reasonable time, the outstanding principal amount
of the Advances to Borrowers to an amount permitted by the preceding sentence.
In such circumstances, if any Lender with a Revolver Commitment objects to the
proposed terms of reduction or repayment of any Overadvance, the terms of
reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders. The foregoing provisions are meant for
the benefit of the Lenders and Agent and are not meant for the benefit of
Borrowers, which shall continue to be bound by the provisions of Section 2.5.
Each Lender with a Revolver Commitment shall be obligated to settle with Agent
as provided in Section 2.3(e) (or Section 2.3(g), as applicable) for the amount
of such Lender’s Pro Rata Share of any unintentional Overadvances by Agent
reported to such Lender, any intentional Overadvances made as permitted under
this Section 2.3(d)(ii), and any Overadvances resulting from the charging to the
Loan Account of interest, fees, or Lender Group Expenses.
(iii)    Each Protective Advance and each Overadvance shall be deemed to be an
Advance hereunder, except that no Protective Advance or Overadvance shall be
eligible to be a LIBOR Rate Loan and, prior to Settlement therefor, all payments
on the Protective Advances shall be payable to Agent solely for its own account.
The Protective Advances and Overadvances shall be repayable on demand, secured
by Agent’s Liens, constitute Obligations hereunder, and bear interest at the
rate applicable from time to time to Advances that are Base Rate Loans. The
ability of Agent to make Protective Advances is separate and distinct from its
ability to make Overadvances and its ability to make Overadvances is separate
and distinct from its ability to make Protective Advances. For the avoidance of
doubt, the limitations on Agent’s ability to make Protective Advances do not
apply to Overadvances and the limitations on Agent’s ability to make
Overadvances do not apply to Protective Advances. The provisions of this Section
2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the Lenders and
are not intended to benefit Borrowers in any way.
(iv)    Notwithstanding anything contained in this Agreement or any other Loan
Document to the contrary: (A) no Overadvance or Protective Advance may be made
by Agent if such

5

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

Advance would cause the aggregate principal amount of Overadvances and
Protective Advances outstanding to exceed $10,000,000; and (B) to the extent any
Protective Advance causes the aggregate Revolver Usage to exceed the Maximum
Revolver Amount, such portion of such Protective Advance shall be for Agent’s
sole and separate account and not for the account of any Lender and shall be
entitled to priority in repayment in accordance with Section 2.4(b).
(e)    Settlement. It is agreed that each Lender’s funded portion of the
Advances is intended by the Lenders to equal, at all times, such Lender’s Pro
Rata Share of the outstanding Advances. Such agreement notwithstanding, Agent,
Swing Lender, and the other Lenders agree (which agreement shall not be for the
benefit of Borrowers) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among the Lenders as to the
Advances, the Swing Loans, and the Protective Advances shall take place on a
periodic basis in accordance with the following provisions:
(i)    Agent shall request settlement (“Settlement”) with the Lenders on a
weekly basis, or on a more frequent basis if so determined by Agent (1) on
behalf of Swing Lender, with respect to the outstanding Swing Loans, (2) for
itself, with respect to the outstanding Protective Advances or Overadvances, and
(3) with respect to Borrowers’ or their Subsidiaries’ Collections or payments
received, as to each by notifying the Lenders by telecopy, telephone, or other
similar form of transmission, of such requested Settlement, no later than 2:00
p.m. (California time) on the Business Day immediately prior to the date of such
requested Settlement (the date of such requested Settlement being the
“Settlement Date”). Such notice of a Settlement Date shall include a summary
statement of the amount of outstanding Advances, Swing Loans, Overadvances, and
Protective Advances for the period since the prior Settlement Date. Subject to
the terms and conditions contained herein (including Section 2.3(g)): (y) if the
amount of the Advances (including Swing Loans, Overadvances, and Protective
Advances) made by a Lender that is not a Defaulting Lender exceeds such Lender’s
Pro Rata Share of the Advances (including Swing Loans, Overadvances, and
Protective Advances) as of a Settlement Date, then Agent shall, by no later than
12:00 p.m. (California time) on the Settlement Date, transfer in immediately
available funds to a Deposit Account of such Lender (as such Lender may
designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances
(including Swing Loans, Overadvances, and Protective Advances), and (z) if the
amount of the Advances (including Swing Loans, Overadvances, and Protective
Advances) made by a Lender is less than such Lender’s Pro Rata Share of the
Advances (including Swing Loans, Overadvances, and Protective Advances) as of a
Settlement Date, such Lender shall no later than 12:00 p.m. (California time) on
the Settlement Date transfer in immediately available funds to Agent’s Account,
an amount such that each such Lender shall, upon transfer of such amount, have
as of the Settlement Date, its Pro Rata Share of the Advances (including Swing
Loans, Overadvances, and Protective Advances). Such amounts made available to
Agent under clause (z) of the immediately preceding sentence shall be applied
against the amounts of the applicable Swing Loans, Overadvances, or Protective
Advances and, together with the portion of such Swing Loans, Overadvances, or
Protective Advances representing Swing Lender’s Pro Rata Share thereof, shall
constitute Advances of such Lenders. If any such amount is not made available to
Agent by any Lender on the Settlement Date applicable thereto to the extent
required by the terms hereof, Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate.
(ii)    In determining whether a Lender’s balance of the Advances, Swing Loans,
Overadvances, and Protective Advances is less than, equal to, or greater than
such Lender’s Pro Rata Share of the Advances, Swing Loans, Overadvances, and
Protective Advances as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments actually
received in good funds by Agent with respect to principal, interest, fees
payable by Borrowers and allocable to the Lenders hereunder, and proceeds of
Collateral.

6

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

(iii)    Between Settlement Dates, Agent, to the extent Protective Advances,
Overadvances, or Swing Loans are outstanding, may pay over to Agent or Swing
Lender, as applicable, any Collections or payments received by Agent, that in
accordance with the terms of this Agreement would be applied to the reduction of
the Advances, for application to the Protective Advances, Overadvances, or Swing
Loans. Between Settlement Dates, Agent, to the extent no Protective Advances,
Overadvances, or Swing Loans are outstanding, may pay over to Swing Lender any
Collections or payments received by Agent, that in accordance with the terms of
this Agreement would be applied to the reduction of the Advances, for
application to Swing Lender’s Pro Rata Share of the Advances. If, as of any
Settlement Date, Collections or payments of Parent Borrowers or its Subsidiaries
received since the then immediately preceding Settlement Date have been applied
to Swing Lender’s Pro Rata Share of the Advances other than to Swing Loans, as
provided for in the previous sentence, Swing Lender shall pay to Agent for the
accounts of the Lenders, and Agent shall pay to the Lenders (other than a
Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)), to
be applied to the outstanding Advances of such Lenders, an amount such that each
such Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Advances. During the period between Settlement
Dates, Swing Lender with respect to Swing Loans, Agent with respect to
Protective Advances and Overadvances, and each Lender with respect to the
Advances other than Swing Loans, Overadvances, and Protective Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.
(iv)    Anything in this Section 2.3(e) to the contrary notwithstanding, in the
event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain
from remitting settlement amounts to the Defaulting Lender and, instead, shall
be entitled to elect to implement the provisions set forth in Section 2.3(g).
(f)    Notation. Agent, as a non-fiduciary agent for Borrowers, shall maintain a
register showing the principal amount (and stated interest) of the Advances,
owing to each Lender, including the Swing Loans owing to Swing Lender, and
Protective Advances and Overadvances owing to Agent, and the interests therein
of each Lender, from time to time and such register shall, absent manifest
error, conclusively be presumed to be correct and accurate.
(g)    Defaulting Lenders. Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by any Borrower to Agent for the Defaulting
Lender’s benefit or any Collections or proceeds of Collateral that would
otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of
such transfer to the Defaulting Lender, Agent shall transfer any such payments
(A) first, to Swing Lender to the extent of any Swing Loans that were made by
Swing Lender and that were required to be, but were not, paid by the Defaulting
Lender, (B) second, to the Issuing Lender, to the extent of the portion of a
Letter of Credit Disbursement that was required to be, but was not, paid by the
Defaulting Lender, (C) third, to each non-Defaulting Lender ratably in
accordance with their Commitments (but, in each case, only to the extent that
such Defaulting Lender’s portion of an Advance (or other funding obligation) was
funded by such other non-Defaulting Lender), (D) to a suspense account
maintained by Agent, the proceeds of which shall be retained by Agent and may be
made available to be re-advanced to or for the benefit of Borrowers as if such
Defaulting Lender had made its portion of Advances (or other funding
obligations) hereunder, and (E) from and after the date on which all other
Obligations have been paid in full, to such Defaulting Lender in accordance with
tier (L) of Section 2.4(b)(ii). Subject to the foregoing, Agent may hold and, in
its discretion, re-lend to Borrowers for the account of such Defaulting Lender
the amount of all such payments received and retained by Agent for the account
of such Defaulting Lender. Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents (including the calculation of Pro
Rata Share in connection therewith) and for the purpose of calculating the fee
payable under Section 2.10(b), such

7

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

Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s
Commitment shall be deemed to be zero. The provisions of this Section 2.3(g)
shall remain effective with respect to such Defaulting Lender until the earlier
of (y) the date on which all of the non-Defaulting Lenders, Agent, Issuing
Lender, and Borrowers shall have waived, in writing, the application of this
Section 2.3(g) to such Defaulting Lender, or (z) the date on which such
Defaulting Lender makes payment of all amounts that it was obligated to fund
hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of
the amounts that it was obligated to fund hereunder, and, if requested by Agent,
provides adequate assurance of its ability to perform its future obligations
hereunder. The operation of this Section 2.3(g) shall not be construed to
increase or otherwise affect the Commitment of any Lender, to relieve or excuse
the performance by such Defaulting Lender or any other Lender of its duties and
obligations hereunder, or to relieve or excuse the performance by Borrowers of
their duties and obligations hereunder to Agent, Issuing Lender, or to the
Lenders other than such Defaulting Lender. Any failure by a Defaulting Lender to
fund amounts that it was obligated to fund hereunder shall constitute a material
breach by such Defaulting Lender of this Agreement and shall entitle Borrowers,
at their option, upon written notice to Agent, to arrange for a substitute
Lender to assume the Commitment of such Defaulting Lender, such substitute
Lender to be reasonably acceptable to Agent. In connection with the arrangement
of such a substitute Lender, the Defaulting Lender shall have no right to refuse
to be replaced hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if it fails to do
so) subject only to being paid its share of the outstanding Obligations (other
than Bank Product Obligations, but including (1) all interest, fees, and other
amounts that may be due and payable in respect thereof, and (2) an assumption of
its Pro Rata Share of its participation in the Letters of Credit); provided,
however, that any such assumption of the Commitment of such Defaulting Lender
shall not be deemed to constitute a waiver of any of the Lender Groups’ or any
Borrower’s rights or remedies against any such Defaulting Lender arising out of
or in relation to such failure to fund. In the event of a direct conflict
between the priority provisions of this Section 2.3(g) and any other provision
contained in this Agreement or any other Loan Document, it is the intention of
the parties hereto that such provisions be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 2.3(g) shall control and govern.
(h)    Independent Obligations. All Advances (other than Swing Loans,
Overadvances, and Protective Advances) shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Advance (or other extension of credit)
hereunder, nor shall any Commitment of any Lender be increased or decreased as a
result of any failure by any other Lender to perform its obligations hereunder,
and (ii) no failure by any Lender to perform its obligations hereunder shall
excuse any other Lender from its obligations hereunder.
 
2.4    Payments; Reductions of Commitments; Prepayments.
(a)    Payments by Borrowers.
(i)    Except as otherwise expressly provided herein, all payments by any
Borrower shall be made to Agent’s Account for the account of the Lender Group
and shall be made in immediately available funds, no later than 11:00 a.m.
(California time) on the date specified herein. Any payment received by Agent
later than 11:00 a.m. (California time) shall be deemed to have been received on
the following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.
(ii)    Unless Agent receives notice from Administrative Borrower prior to the

8

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

date on which any payment is due to the Lenders that Borrowers will not make
such payment in full as and when required, Agent may assume that Borrowers have
made (or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent Borrowers do not make such
payment in full to Agent on the date when due, each Lender severally shall repay
to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
(b)    Apportionment and Application.
(i)    So long as no Application Event has occurred and is continuing and except
as otherwise provided herein with respect to Defaulting Lenders, all principal
and interest payments received by Agent shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Obligations to which
such payments relate held by each Lender) and all payments of fees and expenses
received by Agent (other than fees or expenses that are for Agent’s separate
account or for the separate account of the Issuing Lender) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type of Commitment or
Obligation to which a particular fee or expense relates. All payments to be made
hereunder by Borrowers shall be remitted to Agent and all (subject to Section
2.4(b)(iv)) such payments, and all proceeds of Collateral received by Agent,
shall be applied, so long as no Application Event has occurred and is
continuing, to reduce the balance of the Advances outstanding and, thereafter,
to Borrowers (to be wired to the Designated Account) or such other Person
entitled thereto under applicable law.
(ii)    At any time that an Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
payments remitted to Agent and all proceeds of Collateral received by Agent
shall be applied as follows:
(A)    first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until
paid in full,
(B)    second, to pay any fees or premiums then due to Agent under the Loan
Documents until paid in full,
(C)    third, to pay interest due in respect of all Protective Advances until
paid in full,
(D)    fourth, to pay the principal of all Protective Advances until paid in
full,
(E)    fifth, ratably, to pay any Lender Group Expenses (including cost or
expense reimbursements) or indemnities then due to any of the Lenders under the
Loan Documents, until paid in full,
(F)    sixth, ratably, to pay any fees or premiums then due to any of the
Lenders under the Loan Documents until paid in full,
(G)    seventh, to pay interest accrued in respect of the Swing Loans until paid
in full,
(H)    eighth, to pay the principal of all Swing Loans until paid in full,

9

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

(I)    ninth, ratably, to pay interest accrued in respect of the Advances (other
than Protective Advances) until paid in full,
(J)    tenth, ratably (i) to pay the principal of all Advances until paid in
full, (ii) to Agent, to be held by Agent, for the benefit of Issuing Lender (and
for the ratable benefit of each of the Lenders that have an obligation to pay to
Agent, for the account of the Issuing Lender, a share of each Letter of Credit
Disbursement), as cash collateral in an amount up to 105% of the Letter of
Credit Usage (to the extent permitted by applicable law, such cash collateral
shall be applied to the reimbursement of any Letter of Credit Disbursement as
and when such disbursement occurs and, if a Letter of Credit expires undrawn,
the cash collateral held by Agent in respect of such Letter of Credit shall, to
the extent permitted by applicable law, be reapplied pursuant to this Section
2.4(b)(ii), beginning with tier (A) hereof), and (iii) ratably, to the Bank
Product Providers based upon amounts then certified by the applicable Bank
Product Provider to Agent (in form and substance satisfactory to Agent) to be
due and payable to such Bank Product Providers on account of Bank Product
Obligations,
(K)    eleventh, to pay any other Obligations other than Obligations owed to
Defaulting Lenders,
(L)    twelfth, ratably to pay any Obligations owed to Defaulting Lenders; and
(M)    thirteenth, to Borrowers (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law.
(iii)    Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such funds as
it may be entitled to receive, subject to a Settlement delay as provided in
Section 2.3(e).
(iv)    In each instance, so long as no Application Event has occurred and is
continuing, Section 2.4(b)(i) shall not apply to any payment made by any
Borrower to Agent and specified by such Borrower to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement or any other Loan Document.
(v)    For purposes of Section 2.4(b)(ii), “paid in full” of a type of
Obligation means payment in cash or immediately available funds of all amounts
owing on account of such type of Obligation, including interest accrued after
the commencement of any Insolvency Proceeding, default interest, interest on
interest, and expense reimbursements, irrespective of whether any of the
foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.
(vi)    In the event of a direct conflict between the priority provisions of
this Section 2.4 and any other provision contained in this Agreement or any
other Loan Document, it is the intention of the parties hereto that such
provisions be read together and construed, to the fullest extent possible, to be
in concert with each other. In the event of any actual, irreconcilable conflict
that cannot be resolved as aforesaid, if the conflict relates to the provisions
of Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g)
shall control and govern, and if otherwise, then the terms and provisions of
this Section 2.4 shall control and govern.
(c)    Reduction of Commitments. The Revolver Commitments shall terminate on the
Maturity Date. Borrowers may reduce the Revolver Commitments, without premium or
penalty, to an amount not less than the greater of (A) $20,000,000, or (B) the
sum of (1) the Revolver Usage as of such date, plus

10

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

(2) the principal amount of all Advances not yet made as to which a request has
been given by Borrowers under Section 2.3(a), plus (3) the amount of all Letters
of Credit not yet issued as to which a request has been given by Borrowers
pursuant to Section 2.11(a). Each such reduction shall be in an amount which is
not less than $5,000,000 and integral multiples of $1,000,000 in excess thereof
(unless the Revolver Commitments are being reduced to $20,000,000 and the amount
of the Revolver Commitments in effect immediately prior to such reduction is
less than $25,000,000, in which case such reduction shall be in an amount equal
to the difference between $20,000,000 and the Revolver Commitments in effect
immediately prior to such reduction), shall be made by providing not less than
10 Business Days prior written notice to Agent and shall be irrevocable. Once
reduced, the Revolver Commitments may not be increased. Each such reduction of
the Revolver Commitments shall reduce the Revolver Commitments of each Lender
proportionately in accordance with its ratable share thereof.
(d)    Optional Prepayments. Borrowers may prepay the principal of any Advance
at any time in whole or in part without premium or penalty.
 

2.5    Overadvances. If, at any time or for any reason, the amount of
Obligations owed by Borrowers to the Lender Group pursuant to Section 2.1 or
Section 2.11 is greater than any of the limitations set forth in Section 2.1 or
Section 2.11, as applicable (an “Overadvance”), Borrowers shall immediately pay
to Agent, in cash, the amount of such excess, which amount shall be used by
Agent to reduce the Obligations in accordance with the priorities set forth in
Section 2.4(b). Borrowers promise to pay the Obligations (including principal,
interest, fees, costs, and expenses) in full on the Maturity Date or, if
earlier, on the date on which the Obligations (other than the Bank Product
Obligations) become due and payable pursuant to the terms of this Agreement.
 
2.6    Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations.
(a)    Interest Rates. Except as provided in Section 2.6(c), all Obligations
(except for undrawn Letters of Credit) that have been charged to the Loan
Account pursuant to the terms hereof shall bear interest on the Daily Balance
thereof as follows:
(i)    if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate
equal to the LIBOR Rate plus the LIBOR Rate Margin, and
(ii)    otherwise, at a per annum rate equal to the Base Rate plus the Base Rate
Margin.
(b)    Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit
of the Lenders with a Revolver Commitment), a Letter of Credit fee (in addition
to the charges, commissions, fees, and costs set forth in Section 2.11(f)) which
shall accrue at a per annum rate equal to the LIBOR Rate Margin times the Daily
Balance of the undrawn amount of all outstanding Letters of Credit.
(c)    Default Rate. Upon the occurrence and during the continuation of an Event
of Default and at the election of the Required Lenders,
(i)    all Obligations (except for undrawn Letters of Credit) that have been
charged to the Loan Account pursuant to the terms hereof shall bear interest on
the Daily Balance thereof at a per annum rate equal to 2 percentage points above
the per annum rate otherwise applicable thereunder, and

11

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

(ii)    the Letter of Credit fee provided for in Section 2.6(b) shall be
increased to 2 percentage points above the per annum rate otherwise applicable
hereunder.
(d)    Payment. Except to the extent provided to the contrary in Section 2.10 or
Section 2.12(a), all interest, all Letter of Credit fees, all other fees payable
hereunder or under any of the other Loan Documents, all costs and expenses
payable hereunder or under any of the other Loan Documents, and all Lender Group
Expenses shall be due and payable, in arrears, on the first day of each month at
any time that Obligations or Commitments are outstanding. Each Borrower hereby
authorizes Agent, from time to time (i) upon 3 Business Days prior notice to
such Borrower, to charge all interest, Letter of Credit fees, all fees provided
for in Section 2.10(a) or 2.10(b) and all other fees payable hereunder or under
any of the other Loan Documents (in each case, as and when due and payable), all
charges, commissions, fees, and costs provided for in Section 2.11(e) (as and
when accrued or incurred), and all other payment obligations (excluding the
payment obligations described in clause (ii) below) as and when due and payable
under any Loan Document or any Bank Product Agreement (including any amounts due
and payable to the Bank Product Providers in respect of Bank Products) to the
Loan Account, which amounts thereafter shall constitute Advances hereunder and,
initially, shall accrue interest at the rate then applicable to Advances that
are Base Rate Loans, and (ii) upon 10 Business Days prior notice to such
Borrower, to charge all fees and costs provided for in Section 2.10(c) and any
other Lender Group Expenses (as and when accrued or incurred) (excluding Lender
Group Expenses set forth in clause (j) of the definition of “Lender Group
Expenses”, which are covered in clause (i) above) to the Loan Account, which
amounts thereafter shall constitute Advances hereunder and, initially, shall
accrue interest at the rate then applicable to Advances that are Base Rate
Loans; provided, that the applicable delays set forth in the foregoing clauses
(i) and (ii) shall not be applicable (and Agent shall be entitled to immediately
charge to the Loan Account) at any time that an Event of Default has occurred
and is continuing. Any interest, fees, costs, expenses, Lender Group Expenses,
or other amounts payable hereunder or under any other Loan Document or under any
Bank Product Agreement that are charged to the Loan Account shall thereupon
constitute Advances hereunder and shall initially accrue interest at the rate
then applicable to Advances that are Base Rate Loans (unless and until converted
into LIBOR Rate Loans in accordance with the terms of this Agreement).
(e)    Computation. All interest and fees chargeable under the Loan Documents
shall be computed on the basis of a 360 day year, in each case, for the actual
number of days elapsed in the period during which the interest or fees accrue;
provided, that the per annum interest rate with respect to Base Rate Loans shall
be calculated on the basis of a 365 or 366 day year, as applicable, and the
actual number of days elapsed in the period during which the interest accrues.
In the event the Base Rate is changed from time to time hereafter, the rates of
interest hereunder based upon the Base Rate automatically and immediately shall
be increased or decreased by an amount equal to such change in the Base Rate.
(f)    Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Each Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if such rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum amount as is allowed by law, and payment received from
Borrowers in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such excess.
 
2.7    Crediting Payments. The receipt of any payment item by Agent shall not be
considered a

12

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

payment on account unless such payment item is a wire transfer of immediately
available federal funds made to Agent’s Account or unless and until such payment
item is honored when presented for payment. Should any payment item not be
honored when presented for payment, then Borrowers shall be deemed not to have
made such payment and interest shall be calculated accordingly. Anything to the
contrary contained herein notwithstanding, any payment item shall be deemed
received by Agent only if it is received into Agent’s Account on a Business Day
on or before 11:00 a.m. (California time). If any payment item is received into
Agent’s Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
 
2.8    Designated Account. Agent is authorized to make the Advances, and Issuing
Lender is authorized to issue the Letters of Credit, under this Agreement based
upon telephonic or other instructions received from anyone purporting to be an
Authorized Person or, without instructions, if pursuant to Section 2.6(d).
Borrowers agree to establish and maintain the Designated Account with the
Designated Account Bank for the purpose of receiving the proceeds of the
Advances requested by Borrowers and made by Agent or the Lenders hereunder.
Unless otherwise agreed by Agent and Borrowers, any Advance or Swing Loan
requested by Borrowers and made by Agent or the Lenders hereunder shall be made
to the Designated Account.
 
2.9    Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Borrowers (the “Loan Account”)
on which Borrowers will be charged with all Advances (including Protective
Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to
Borrowers or for Borrowers’ account, the Letters of Credit issued or arranged by
Issuing Lender for Borrowers’ account, and with all other payment Obligations
hereunder or under the other Loan Documents, including, accrued interest, fees
and expenses, and Lender Group Expenses. In accordance with Section 2.7, the
Loan Account will be credited with all payments received by Agent from Borrowers
or for any Borrower’s account. Agent shall render monthly statements regarding
the Loan Account to Borrowers, including principal, interest, fees, and
including an itemization of all charges and expenses constituting Lender Group
Expenses owing, and such statements, absent manifest error, shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrowers and the Lender Group unless, within 30 days after
receipt thereof by Borrowers, Borrowers shall deliver to Agent written objection
thereto describing the error or errors contained in any such statements.
 
2.10    Fees. Borrowers shall pay to Agent,
(a)    for the account of Agent, as and when due and payable under the terms of
the Fee Letter, the fees set forth in the Fee Letter.
(b)    for the ratable account of those Lenders with Revolver Commitments, on
the first day of each month from and after the Closing Date up to the first day
of the month prior to the Payoff Date and on the Payoff Date, an unused line fee
in an amount equal to 0.40% per annum times the result of (i) the aggregate
amount of the Revolver Commitments, less (ii) the average Daily Balance of the
Revolver Usage during the immediately preceding month (or portion thereof).
(c)    Audit and appraisal fees and charges, as and when incurred or chargeable,
as follows: (i) a fee of $1,000 per day, per auditor, plus out-of-pocket
expenses for each financial audit of Loan Parties performed by personnel
employed by Agent, (ii) if implemented, a fee of $1,000 per day, per applicable
individual, plus out-of-pocket expenses for the establishment of electronic
collateral reporting systems, and (iii) the actual charges paid or incurred by
Agent if it elects to employ the services of one or more third

13

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

Persons to perform financial audits of Parent or its Subsidiaries, to establish
electronic collateral reporting systems, or to appraise the Collateral, or any
portion thereof; provided, however, that so long as (x) no Event of Default
shall have occurred and be continuing, and (y) there is no Revolver Usage during
any calendar year, Borrower shall not be obligated to reimburse Agent for more
than 1 audit and 1 appraisal of the Collateral during such calendar year;
provided further, however, that if there is any Revolver Usage during any
calendar year, and so long as no Event of Default shall have occurred and be
continuing, Borrower shall not be obligated to reimburse Agent for more than 2
audits and 2 appraisals of the Collateral during such calendar year.
 
2.11    Letters of Credit.
(a)    Subject to the terms and conditions of this Agreement, upon the request
of Administrative Borrower made in accordance herewith, the Issuing Lender
agrees to issue, or to cause an Underlying Issuer (including, as Issuing
Lender’s agent) to issue, a requested Letter of Credit. If Issuing Lender, at
its option, elects to cause an Underlying Issuer to issue a requested Letter of
Credit, then Issuing Lender agrees that it will enter into arrangements relative
to the reimbursement of such Underlying Issuer (which may include, among, other
means, by becoming an applicant with respect to such Letter of Credit or
entering into undertakings which provide for reimbursements of such Underlying
Issuer with respect to such Letter of Credit; each such obligation or
undertaking, irrespective of whether in writing, a “Reimbursement Undertaking”)
with respect to Letters of Credit issued by such Underlying Issuer. By
submitting a request to Issuing Lender for the issuance of a Letter of Credit,
Borrowers shall be deemed to have requested that Issuing Lender issue or that an
Underlying Issuer issue the requested Letter of Credit and to have requested
Issuing Lender to issue a Reimbursement Undertaking with respect to such
requested Letter of Credit if it is to be issued by an Underlying Issuer (it
being expressly acknowledged and agreed by each Borrower that Borrowers are and
shall be deemed to be applicants (within the meaning of Section 5-102(a)(2) of
the Code) with respect to each Underlying Letter of Credit). Each request for
the issuance of a Letter of Credit, or the amendment, renewal, or extension of
any outstanding Letter of Credit, shall be made in writing by an Authorized
Person and delivered to the Issuing Lender via hand delivery, telefacsimile, or
other electronic method of transmission reasonably in advance of the requested
date of issuance, amendment, renewal, or extension. Each such request shall be
in form and substance reasonably satisfactory to the Issuing Lender and shall
specify (i) the amount of such Letter of Credit, (ii) the date of issuance,
amendment, renewal, or extension of such Letter of Credit, (iii) the proposed
expiration date of such Letter of Credit, (iv) the name and address of the
beneficiary of the Letter of Credit, and (v) such other information (including,
the conditions of drawing, and, in the case of an amendment, renewal, or
extension, identification of the Letter of Credit to be so amended, renewed, or
extended) as shall be necessary to prepare, amend, renew, or extend such Letter
of Credit. Anything contained herein to the contrary notwithstanding, the
Issuing Lender may, but shall not be obligated to, issue or cause the issuance
of a Letter of Credit or to issue a Reimbursement Undertaking in respect of an
Underlying Letter of Credit, in either case, that supports the obligations of
Parent or its Subsidiaries (1) in respect of (A) a lease of real property, or
(B) an employment contract, or (2) at any time that one or more of the Lenders
is a Defaulting Lender. The Issuing Lender shall have no obligation to issue a
Letter of Credit or a Reimbursement Undertaking in respect of an Underlying
Letter of Credit, in either case, if any of the following would result after
giving effect to the requested issuance:
(i)    the Letter of Credit Usage would exceed the Borrowing Base less the
outstanding amount of Advances (inclusive of Swing Loans) at such time, or
(ii)    the Letter of Credit Usage would exceed $10,000,000, or
(iii)    the Letter of Credit Usage would exceed the Maximum Revolver Amount

14

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

less the outstanding amount of Advances (including Swing Loans) at such time.
Each Letter of Credit shall be in form and substance reasonably acceptable to
the Issuing Lender, including the requirement that the amounts payable
thereunder must be payable in Dollars. If Issuing Lender makes a payment under a
Letter of Credit or an Underlying Issuer makes a payment under an Underlying
Letter of Credit, Borrowers shall pay to Agent an amount equal to the applicable
Letter of Credit Disbursement on the date such Letter of Credit Disbursement is
made and, in the absence of such payment, the amount of the Letter of Credit
Disbursement immediately and automatically shall be deemed to be an Advance
hereunder and, initially, shall bear interest at the rate then applicable to
Advances that are Base Rate Loans. If a Letter of Credit Disbursement is deemed
to be an Advance hereunder (notwithstanding any failure to satisfy any condition
precedent set forth in Section 3), Borrowers’ obligation to pay the amount of
such Letter of Credit Disbursement to Issuing Lender shall be automatically
converted into an obligation to pay the resulting Advance. Promptly following
receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent
shall distribute such payment to the Issuing Lender or, to the extent that
Lenders have made payments pursuant to Section 2.11(b) to reimburse the Issuing
Lender, then to such Lenders and the Issuing Lender as their interests may
appear.
(b)    Promptly following receipt of a notice of a Letter of Credit Disbursement
pursuant to Section 2.11(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to Section 2.11(a)
on the same terms and conditions as if Borrowers had requested the amount
thereof as an Advance and Agent shall promptly pay to Issuing Lender the amounts
so received by it from the Lenders. By the issuance of a Letter of Credit or a
Reimbursement Undertaking (or an amendment, renewal, or extension of a Letter of
Credit or a Reimbursement Undertaking) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitments, the Issuing
Lender shall be deemed to have granted to each Lender with a Revolver
Commitment, and each Lender with a Revolver Commitment shall be deemed to have
purchased, a participation in each Letter of Credit issued by Issuing Lender and
each Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such
Letter of Credit or Reimbursement Undertaking, and each such Lender agrees to
pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata
Share of any Letter of Credit Disbursement made by Issuing Lender or an
Underlying Issuer under the applicable Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Revolver Commitment hereby
absolutely and unconditionally agrees to pay to Agent, for the account of the
Issuing Lender, such Lender’s Pro Rata Share of each Letter of Credit
Disbursement made by Issuing Lender or an Underlying Issuer and not reimbursed
by Borrowers on the date due as provided in Section 2.11(a), or of any
reimbursement payment required to be refunded (or that Agent or Issuing Lender
elects, based upon the advice of counsel, to refund) to Borrowers for any
reason. Each Lender with a Revolver Commitment acknowledges and agrees that its
obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each Letter of Credit Disbursement
pursuant to this Section 2.11(b) shall be absolute and unconditional and such
remittance shall be made notwithstanding the occurrence or continuation of an
Event of Default or Default or the failure to satisfy any condition set forth in
Section 3. If any such Lender fails to make available to Agent the amount of
such Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in
this Section, such Lender shall be deemed to be a Defaulting Lender and Agent
(for the account of the Issuing Lender) shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the Defaulting
Lender Rate until paid in full.
(c)    Each Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group and each Underlying Issuer harmless from any damage, loss, cost,
expense, or liability (other than Taxes, which shall be governed by Section 16,
and Excluded Taxes), and reasonable attorneys fees incurred by Issuing Lender,
any other member of the Lender Group, or any Underlying Issuer arising out of or
in

15

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

connection with any Reimbursement Undertaking or any Letter of Credit; provided,
however, that no Borrower shall be obligated hereunder to indemnify for any
loss, cost, expense, or liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful misconduct of
the Issuing Lender, any other member of the Lender Group, or any Underlying
Issuer. Each Borrower agrees to be bound by the Underlying Issuer’s regulations
and interpretations of any Letter of Credit or by Issuing Lender’s
interpretations of any Reimbursement Undertaking even though this interpretation
may be different from such Borrower’s own, and each Borrower understands and
agrees that none of the Issuing Lender, any other member of the Lender Group, or
any Underlying Issuer shall be liable for any error, negligence, or mistake,
whether of omission or commission, in following any Borrower’s instructions or
those contained in the Letter of Credit or any modifications, amendments, or
supplements thereto. Each Borrower understands that the Reimbursement
Undertakings may require Issuing Lender to indemnify the Underlying Issuer for
certain costs or liabilities arising out of claims by a Borrower against such
Underlying Issuer. Each Borrower hereby agrees to indemnify, save, defend, and
hold Issuing Lender and the other members of the Lender Group harmless with
respect to any loss, cost, expense (including reasonable attorneys fees), or
liability (other than Taxes, which shall be governed by Section 16, and Excluded
Taxes) incurred by them as a result of the Issuing Lender’s indemnification of
an Underlying Issuer; provided, however, that no Borrower shall be obligated
hereunder to indemnify for any such loss, cost, expense, or liability to the
extent that it is caused by the gross negligence or willful misconduct of the
Issuing Lender or any other member of the Lender Group. Each Borrower hereby
acknowledges and agrees that none of the Issuing Lender, any other member of the
Lender Group, or any Underlying Issuer shall be responsible for delays, errors,
or omissions resulting from the malfunction of equipment in connection with any
Letter of Credit.
(d)    The obligation of Borrowers to reimburse the Issuing Lender for each
drawing under each Letter of Credit shall be absolute, unconditional, and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:
(i)any lack of validity or enforceability of such Letter of Credit, this
Agreement, or another Loan Document,
(ii)the existence of any claim, counterclaim, setoff, defense, or other right
that Parent or any of its Subsidiaries may have at any time against any
beneficiary or transferee of such Letter of Credit (or any Person for whom any
such beneficiary or any such transferee may be acting), the Issuing Lender or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby, or such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction,
(iii)any draft, demand, certificate, or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect,
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit,
(iv)any payment by the Issuing Lender under such Letter of Credit against
presentation of a draft or certificate that does not substantially or strictly
comply with the terms of such Letter of Credit (including, without limitation,
any requirement that presentation be made at a particular place or by a
particular time of day), or any payment made by the Issuing Lender under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver, or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit,
(v)any other circumstance or happening whatsoever, whether or not similar to

16

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

any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to , or discharge of, Parent or any of its
Subsidiaries, or
(vi)the fact that an Event of Default shall have occurred and be continuing.
(e)    Each Borrower hereby authorizes and directs any Underlying Issuer to
deliver to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender’s instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
(f)    Each Borrower acknowledges and agrees that any and all issuance charges,
usage charges, commissions, fees, and costs incurred by the Issuing Lender
relating to Underlying Letters of Credit shall be Lender Group Expenses for
purposes of this Agreement and shall be reimbursable immediately by Borrowers to
Agent for the account of the Issuing Lender; it being acknowledged and agreed by
Borrowers that, as of the Closing Date, the usage charge imposed by the
Underlying Issuer is .825% per annum times the undrawn amount of each Underlying
Letter of Credit, that such usage charge may be changed from time to time, and
that the Underlying Issuer also imposes a schedule of charges for amendments,
extensions, drawings, and renewals.
(g)    If by reason of (i) any change after the Closing Date in any applicable
law, treaty, rule, or regulation or any change in the interpretation or
application thereof by any Governmental Authority, or (ii) compliance by the
Issuing Lender, any other member of the Lender Group, or Underlying Issuer with
any direction, request, or requirement (irrespective of whether having the force
of law) of any Governmental Authority or monetary authority including,
Regulation D of the Federal Reserve Board as from time to time in effect (and
any successor thereto):
(i)    any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Letter of Credit issued or caused to be issued
hereunder or hereby, or
(ii)    there shall be imposed on the Issuing Lender, any other member of the
Lender Group, or Underlying Issuer any other condition regarding any Letter of
Credit or Reimbursement Undertaking,
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Issuing Lender, any other member of the Lender Group, or an Underlying
Issuer of issuing, making, participating in, or maintaining any Reimbursement
Undertaking or Letter of Credit or to reduce the amount receivable in respect
thereof, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay within 30 days after
demand therefor, such amounts as Agent may specify to be necessary to compensate
the Issuing Lender, any other member of the Lender Group, or an Underlying
Issuer for such additional cost or reduced receipt, together with interest on
such amount from the date of such demand until payment in full thereof at the
rate then applicable to Base Rate Loans hereunder; provided, however, that no
Borrower shall be required to provide any compensation pursuant to this Section
2.11(g) for any such amounts incurred more than 180 days prior to the date on
which the demand for payment of such amounts is first made to Borrowers;
provided further, however, that if an event or circumstance giving rise to such
amounts is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof. The determination
by Agent of any amount due pursuant to this Section 2.11(g), as set forth in a
certificate setting forth the calculation thereof in reasonable detail, shall,
in the absence of manifest or demonstrable error, be final and conclusive and
binding on all of the parties hereto.

17

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

 
2.12    LIBOR Option.
(a)    Interest and Interest Payment Dates. In lieu of having interest charged
at the rate based upon the Base Rate, Borrowers shall have the option, subject
to Section 2.12(b) below (the “LIBOR Option”) to have interest on all or a
portion of the Advances be charged (whether at the time when made (unless
otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR
Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a
rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall
be payable on the earliest of (i) the last day of the Interest Period applicable
thereto; (ii) the date on which all or any portion of the Obligations are
accelerated pursuant to the terms hereof, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Borrowers properly have exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, at the written request of the Required Lenders,
Borrowers no longer shall have the option to request that Advances bear interest
at a rate based upon the LIBOR Rate.
(b)    LIBOR Election.
(i)    Borrower may, at any time and from time to time, so long as Borrower has
not received a notice from Agent (which notice Agent may elect to give or not
give in its discretion unless Agent is directed to give such notice by the
Required Lenders, in which case, it shall give the notice to Borrower), after
the occurrence and during the continuance of an Event of Default, to terminate
the right of Borrower to exercise the LIBOR Option during the continuance of
such Event of Default, elect to exercise the LIBOR Option by notifying Agent
prior to 11:00 a.m. (California time) at least 3 Business Days prior to the
commencement of the proposed Interest Period (the “LIBOR Deadline”). Notice of
Borrowers’ election of the LIBOR Option for a permitted portion of the Advances
and an Interest Period pursuant to this Section shall be made by delivery to
Agent of a LIBOR Notice received by Agent before the LIBOR Deadline, or by
telephonic notice received by Agent before the LIBOR Deadline (to be confirmed
by delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m.
(California time) on the same day). Promptly upon its receipt of each such LIBOR
Notice, Agent shall provide a copy thereof to each of the affected Lenders.
(ii)    Each LIBOR Notice shall be irrevocable and binding on each Borrower. In
connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and
hold Agent and the Lenders harmless against any loss, cost, or expense actually
incurred by Agent or any Lender as a result of (A) the payment of any principal
of any LIBOR Rate Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (B) the
conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (C) the failure to borrow, convert, continue or
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, or expenses, “Funding Losses”). A
certificate of Agent or a Lender delivered to Borrowers setting forth in
reasonable detail any amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section 2.12 shall be conclusive absent manifest error.
Borrowers shall pay such amount to Agent or the Lender, as applicable, within 30
days of the date of its receipt of such certificate. If a payment of a LIBOR
Rate Loan on a day other than the last day of the applicable Interest Period
would result in a Funding Loss, Agent may, in its sole discretion at the request
of Borrowers, hold the amount of such payment as cash collateral in support of
the Obligations until the last day of such Interest Period and apply such
amounts to the payment of the applicable LIBOR Rate Loan on such last day, it
being agreed that Agent has no obligation to so defer the application of
payments to any LIBOR Rate Loan and that, in

18

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

the event that Agent does not defer such application, Borrowers shall be
obligated to pay any resulting Funding Losses.
(iii)    Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any
given time. Borrowers only may exercise the LIBOR Option for proposed LIBOR Rate
Loans of at least $1,000,000.
(c)    Conversion. Borrowers may convert LIBOR Rate Loans to Base Rate Loans at
any time; provided, however, that in the event that LIBOR Rate Loans are
converted or prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any automatic prepayment through
the required application by Agent of proceeds of Parent’s and its Subsidiaries’
Collections in accordance with Section 2.4(b) or for any other reason, including
early termination of the term of this Agreement or acceleration of all or any
portion of the Obligations pursuant to the terms hereof, each Borrower shall
indemnify, defend, and hold Agent and the Lenders and their Participants
harmless against any and all Funding Losses in accordance with Section 2.12
(b)(ii).
(d)    Special Provisions Applicable to LIBOR Rate.
(i)    The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs,
in each case, due to changes in applicable law (other than changes in laws
relative to Taxes, which shall be governed by Section 16, and Excluded Taxes)
occurring subsequent to the commencement of the then applicable Interest Period,
and changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), which additional or increased costs
would increase the cost of funding or maintaining loans bearing interest at the
LIBOR Rate. In any such event, the affected Lender shall give Borrowers and
Agent notice of such a determination and adjustment and Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the notice
from the affected Lender, Borrowers may, by notice to such affected Lender (y)
require such Lender to furnish to Borrowers a statement setting forth the basis
for adjusting such LIBOR Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to which such
adjustment is made (together with any amounts due under Section 2.12(b)(ii)).
(ii)    In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation
or application thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and Borrowers
and Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so.
(e)    No Requirement of Matched Funding. Anything to the contrary contained
herein notwithstanding, neither Agent, nor any Lender, nor any of their
Participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.
 

19

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

2.13    Capital Requirements.
(a)    Other than pursuant to FATCA (as in effect with respect to any Lender as
of the date such Lender becomes a party to this Agreement), if, after the date
hereof, any Lender determines that (i) the adoption of or change in any law,
rule, regulation or guideline regarding capital or reserve requirements for
banks or bank holding companies, or any change in the interpretation,
implementation, or application thereof by any Governmental Authority charged
with the administration thereof, or (ii) compliance by such Lender or its parent
bank holding company with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law), has the
effect of reducing the return on such Lender’s or such holding company’s capital
as a consequence of such Lender’s Commitments hereunder to a level below that
which such Lender or such holding company could have achieved but for such
adoption, change, or compliance (taking into consideration such Lender’s or such
holding company’s then existing policies with respect to capital adequacy and
assuming the full utilization of such entity’s capital) by any amount deemed by
such Lender to be material, then such Lender may notify Administrative Borrower
and Agent thereof. Following receipt of such notice, Borrowers agree to pay such
Lender on demand the amount of such reduction of return of capital as and when
such reduction is determined, payable within 30 days after presentation by such
Lender of a statement in the amount and setting forth in reasonable detail such
Lender’s calculation thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent manifest error).
In determining such amount, such Lender may use any reasonable averaging and
attribution methods. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s right to demand such compensation; provided that no Borrower shall be
required to compensate a Lender pursuant to this Section for any reductions in
return incurred more than 180 days prior to the date that such Lender notifies
Borrowers of such law, rule, regulation or guideline giving rise to such
reductions and of such Lender’s intention to claim compensation therefor;
provided further that if such claim arises by reason of the adoption of or
change in any law, rule, regulation or guideline that is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
(b)    If any Lender requests additional or increased costs referred to in
Section 2.12(d)(i) or amounts under Section 2.13(a), sends a notice under
Section 2.12(d)(ii) relative to changed circumstances or makes a claim for
compensation under Section 16 (any such Lender, an “Affected Lender”), then such
Affected Lender shall use reasonable efforts to promptly designate a different
one of its lending offices or to assign its rights and obligations hereunder to
another of its offices or branches, if (i) in the reasonable judgment of such
Affected Lender, such designation or assignment would eliminate or reduce
amounts payable pursuant to Section 2.12(d)(i), Section 2.13(a) or Section 16,
as applicable, or would eliminate the illegality or impracticality of funding or
maintaining LIBOR Rate Loans and (ii) in the reasonable judgment of such
Affected Lender, such designation or assignment would not subject it to any
material unreimbursed cost or expense and would not otherwise be materially
disadvantageous to it. Borrowers agree to pay all reasonable out-of-pocket costs
and expenses incurred by such Affected Lender in connection with any such
designation or assignment. If, after such reasonable efforts, such Affected
Lender does not so designate a different one of its lending offices or assign
its rights to another of its offices or branches so as to eliminate Borrowers’
obligation to pay any future amounts to such Affected Lender pursuant to Section
2.12(d)(i), Section 2.13(a) or Section 16, as applicable, or to enable Borrowers
to obtain LIBOR Rate Loans, then Borrowers (without prejudice to any amounts
then due to such Affected Lender under Section 2.12(d)(i), Section 2.13(a) or
Section 16, as applicable) may, unless prior to the effective date of any such
assignment the Affected Lender withdraws its request for such additional amounts
under Section 2.12(d)(i), Section 2.13(a) or Section 16, as applicable, or
indicates that it is no longer unlawful or impractical to fund or maintain LIBOR
Rate Loans, may seek a substitute Lender reasonably acceptable to Agent to
purchase the Obligations owed to such Affected Lender and such Affected Lender’s
Commitments hereunder

20

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

(a “Replacement Lender”), and if such Replacement Lender agrees to such
purchase, such Affected Lender shall assign to the Replacement Lender its
Obligations and Commitments, pursuant to an Assignment and Acceptance Agreement,
and upon such purchase by the Replacement Lender, such Replacement Lender shall
be deemed to be a “Lender” for purposes of this Agreement and such Affected
Lender shall cease to be a “Lender” for purposes of this Agreement.
(c)    Notwithstanding anything to the contrary herein, it is understood and
agreed that the Dodd–Frank Wall Street Reform and Consumer Protection Act
(Pub.L. 111-203, H.R. 4173), all requests, rules, guidelines and directives
relating thereto, all interpretations and applications thereof and any
compliance by a Lender with any request or directive relating thereto, shall,
for the purposes of Sections 2.12 and 2.13, be deemed to be adopted subsequent
to the date hereof, and the protection of Sections 2.12 and 2.13 shall be
available to each Lender in connection therewith.
 
2.14    Joint and Several Liability of Borrowers.
(a)    Each Borrower is accepting joint and several liability hereunder and
under the other Loan Documents in consideration of the financial accommodations
to be provided by the Lender Group under this Agreement, for the mutual benefit,
directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations.
(b)    Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including any Obligations arising under
this Section 2.14), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Borrower without
preferences or distinction among them.
(c)    If and to the extent that any Borrower shall fail to make any payment
with respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event the
other Borrowers will make such payment with respect to, or perform, such
Obligation until such time as all of the Obligations are paid in full.
(d)    The Obligations of each Borrower under the provisions of this Section
2.14 constitute the absolute and unconditional, full recourse Obligations of
each Borrower enforceable against each Borrower to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of the provisions of this Agreement (other than this Section
2.14(d)) or any other circumstances whatsoever.
(e)    Except as otherwise expressly provided in this Agreement, each Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Advances or Letters of Credit issued under or pursuant to this Agreement,
notice of the occurrence of any Default, Event of Default, or of any demand for
any payment under this Agreement, notice of any action at any time taken or
omitted by Agent or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Agreement (except as otherwise provided in this
Agreement). Each Borrower hereby assents to, and waives notice of, any extension
or postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement, any and all other indulgences whatsoever by Agent or

21

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

Lenders in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of the Obligations or the addition, substitution or release, in
whole or in part, of any Borrower. Without limiting the generality of the
foregoing, each Borrower assents to any other action or delay in acting or
failure to act on the part of any Agent or Lender with respect to the failure by
any Borrower to comply with any of its respective Obligations, including,
without limitation, any failure strictly or diligently to assert any right or to
pursue any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section 2.14 afford
grounds for terminating, discharging or relieving any Borrower, in whole or in
part, from any of its Obligations under this Section 2.14, it being the
intention of each Borrower that, so long as any of the Obligations hereunder
remain unsatisfied, the Obligations of each Borrower under this Section 2.14
shall not be discharged except by performance and then only to the extent of
such performance. The Obligations of each Borrower under this Section 2.14 shall
not be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
any other Borrower or any Agent or Lender.
(f)    Each Borrower represents and warrants to Agent and Lenders that such
Borrower is currently informed of the financial condition of Borrowers and of
all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further represents
and warrants to Agent and Lenders that such Borrower has read and understands
the terms and conditions of the Loan Documents. Each Borrower hereby covenants
that such Borrower will continue to keep informed of Borrowers’ financial
condition and of all other circumstances which bear upon the risk of nonpayment
or nonperformance of the Obligations.
(g)    The provisions of this Section 2.14 are made for the benefit of Agent,
each member of the Lender Group, each Bank Product Provider, and their
respective successors and assigns, and may be enforced by it or them from time
to time against any or all Borrowers as often as occasion therefor may arise and
without requirement on the part of Agent, any member of the Lender Group, any
Bank Product Provider, or any of their successors or assigns first to marshal
any of its or their claims or to exercise any of its or their rights against any
Borrower or to exhaust any remedies available to it or them against any Borrower
or to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
Section 2.14 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by Agent or any Lender upon the insolvency,
bankruptcy or reorganization of any Borrower, or otherwise, the provisions of
this Section 2.14 will forthwith be reinstated in effect, as though such payment
had not been made.
(h)    Each Borrower hereby agrees that it will not enforce any of its rights of
contribution or subrogation against any other Borrower with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to Agent or Lenders with respect to any of the Obligations
or any collateral security therefor until such time as all of the Obligations
have been paid in full in cash. Any claim which any Borrower may have against
any other Borrower with respect to any payments to any Agent or any member of
the Lender Group hereunder or under any of the Bank Product Agreements are
hereby expressly made subordinate and junior in right of payment, without
limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations and, in the
event of any insolvency, bankruptcy, receivership, liquidation, reorganization
or other similar proceeding under the laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such
Obligations shall be paid in full in cash before any payment or distribution of
any character, whether in cash, securities or other property, shall be made to
any other Borrower therefor.
(i)    Each Borrower hereby agrees that after the occurrence and during the
continuance

22

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

of any Default or Event of Default, such Borrower will not demand, sue for or
otherwise attempt to collect any indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for Agent, and such
Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.4(b).
 
2.15    Increase in Revolver Commitments.
(a)At any time during the 18 month period following the Closing Date (but not
more than on 3 occasions), the existing Revolver Commitments and the Maximum
Revolver Amount may be increased (such increase that satisfies the terms and
conditions herein, an “Approved Increase”) by an amount not in excess of
$15,000,000 at the option of Borrowers by delivery of a written notice of the
proposed increase to Agent (the “Increase Notice”) so long as each of the
following conditions precedent set forth are satisfied as of the Increase
Effective Date:
(i)each of the conditions precedent set forth in Section 3.2 is satisfied as of
the Increase Effective Date (both before and after giving effect to the proposed
increase) and Parent shall have delivered to Agent a certificate as to the same,
(ii)Borrowers have delivered to Agent updated pro forma Projections (after
giving effect to the proposed increase) for Parent and its Subsidiaries
reflecting compliance on a pro forma basis with the financial covenants in
Section 7 for the most recently completed fiscal quarter period, in form and
content reasonably acceptable to Agent,
(iii)Agent shall have completed any business and legal due diligence that it
determines, in its sole discretion, is necessary (including, without limitation,
a field exam and an inventory appraisal) and the results of such due diligence
shall be satisfactory to Agent, and
(iv)The Increase Notice shall specify the date on which the Approved Increase is
to be effective (the “Increase Effective Date”), which date shall not be less
than 15 Business Days after the date of such notice.
(b)The Approved Increase shall not be in an amount less than $5,000,000 plus any
increments of $5,000,000 and shall be subject to the maximum amounts set forth
in Section 2.15(a).
(c)So long as each of the requirements set forth in this Section 2.15 is
satisfied, the increased Revolver Commitments with respect to the Approved
Increase shall become effective, as of the Increase Effective Date.
(d)Unless otherwise specifically provided herein, all references in this
Agreement and any other Loan Document to Advances shall be deemed, unless the
context otherwise requires, to include Advances made pursuant to the increased
Revolver Commitments and Maximum Revolver Amount pursuant to this Section 2.15.
(e)The Advances, Revolver Commitments, and Maximum Revolver Amount established
pursuant to this Section 2.15 shall constitute Advances, Revolver Commitments,
and Maximum Revolver Amount under, and shall be entitled to all the benefits
afforded by, this Agreement and the other Loan Documents, and shall, without
limiting the foregoing, benefit equally and ratably from the guarantees and
security interests created by the Loan Documents. Borrowers shall take any
actions reasonably required

23

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

by Agent to ensure and demonstrate that the Liens granted by the Loan Documents
continue to be perfected under the Code or otherwise after giving effect to the
establishment of any such new Revolver Commitments and Maximum Revolver Amount.
  
3.
CONDITIONS; TERM OF AGREEMENT.

 
3.1    Conditions Precedent to the Initial Extension of Credit. The obligation
of each Lender to make its initial extension of credit provided for hereunder is
subject to the fulfillment, to the satisfaction of Agent and each Lender, of
each of the conditions precedent set forth on Schedule 3.1. Agent, each Lender
and each Borrower acknowledge and agree that the requirements set forth on
Schedule 3.1 have been satisfied as of the Closing Date.
 
3.2    Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder (or to
extend any other credit hereunder) at any time shall be subject to the following
conditions precedent:
(a)the representations and warranties of Parent or its Subsidiaries contained in
this Agreement or in the other Loan Documents shall be true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) on and as of the date of such
extension of credit, as though made on and as of such date (except to the extent
that such representations and warranties relate solely to an earlier date); and
(b)no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof.
 
3.3    Maturity. This Agreement shall continue in full force and effect for a
term ending on December 5, 2016 (the “Maturity Date”). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders,
shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.
 
3.4    Effect of Maturity. On the Maturity Date, all commitments of the Lender
Group to provide additional credit hereunder shall automatically be terminated
and all of the Obligations immediately shall become due and payable without
notice or demand and Borrowers shall be required to repay all of the Obligations
in full. No termination of the obligations of the Lender Group (other than
payment in full of the Obligations and termination of the Commitments) shall
relieve or discharge any Loan Party of its duties, obligations, or covenants
hereunder or under any other Loan Document and Agent’s Liens in the Collateral
shall continue to secure the Obligations and shall remain in effect until all
Obligations have been paid in full and the Commitments have been terminated.
When all of the Obligations have been paid in full and the Lender Group’s
obligations to provide additional credit under the Loan Documents have been
terminated irrevocably, Agent will, at Borrowers’ sole expense, execute and
deliver any termination statements, lien releases, discharges of security
interests, and other similar discharge or release documents (and, if applicable,
in recordable form) as are reasonably necessary to release, as of record,
Agent’s Liens and all notices of security interests and liens previously filed
by Agent.
 
3.5    Early Termination by Borrowers. Borrowers have the option, at any time
upon 10 Business Days prior written notice to Agent, to terminate this Agreement
and terminate the Commitments hereunder by repaying to Agent all of the
Obligations in full.

24

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

 
3.6    Conditions Subsequent. The obligation of the Lender Group (or any member
thereof) to continue to make Advances (or otherwise extend credit hereunder) is
subject to the fulfillment, on or before the date applicable thereto, of the
conditions subsequent set forth on Schedule 3.6 (the failure by Borrowers to so
perform or cause to be performed such conditions subsequent as and when required
by the terms thereof, shall constitute an Event of Default).
 
4.
REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, each Borrower
makes the following representations and warranties to the Lender Group which
shall be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date, and shall be true, correct, and complete, in
all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the date of the making of
each Advance (or other extension of credit) made thereafter, as though made on
and as of the date of such Advance (or other extension of credit) (except to the
extent that such representations and warranties relate solely to an earlier
date) and such representations and warranties shall survive the execution and
delivery of this Agreement:
 
4.1    Due Organization and Qualification; Subsidiaries.
(a)    Each Loan Party (i) is duly organized and existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is qualified to do
business in any state where the failure to be so qualified could reasonably be
expected to result in a Material Adverse Change, and (iii) has all requisite
power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Loan
Documents to which it is a party and to carry out the transactions contemplated
thereby.
(b)    Set forth on Schedule 4.1(b) of the Disclosure Letter (as such Schedule
may be updated from time to time to reflect changes resulting from transactions
permitted under this Agreement) is a complete and accurate description of the
authorized capital Stock of each Loan Party (other than Parent to the extent it
is a publically traded company), by class, and, as of the Closing Date, a
description of the number of shares of each such class that are issued and
outstanding. Other than as described on Schedule 4.1(b) of the Disclosure
Letter, there are no subscriptions, options, warrants, or calls relating to any
shares of any Loan Party’s capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. No Loan Party is
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital Stock or any security convertible
into or exchangeable for any of its capital Stock.
(c)    Set forth on Schedule 4.1(c) of the Disclosure Letter (as such Schedule
may be updated from time to time to reflect changes resulting from transactions
permitted under this Agreement), is a complete and accurate list of each Loan
Parties’ direct Subsidiaries, showing: (i) the number of shares of each class of
common and preferred Stock authorized for each of such Subsidiaries, and (ii)
the number and the percentage of the outstanding shares of each such class owned
directly or indirectly by such Loan Party. All of the outstanding capital Stock
of each such Subsidiary has been validly issued and is fully paid and
non-assessable.
(d)    Except as set forth on Schedule 4.1(c) of the Disclosure Letter, there
are no

25

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

subscriptions, options, warrants, or calls relating to any shares of the Loan
Parties’ direct Subsidiaries’ capital Stock, including any right of conversion
or exchange under any outstanding security or other instrument. Neither Parent
nor any of its Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of Parent’s
Subsidiaries’ capital Stock or any security convertible into or exchangeable for
any such capital Stock.
 
4.2    Due Authorization; No Conflict.
(a)    As to each Loan Party, the execution, delivery, and performance by such
Loan Party of the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of such Loan Party.
(b)    As to each Loan Party, the execution, delivery, and performance by such
Loan Party of the Loan Documents to which it is a party do not and will not (i)
violate any material provision of federal, state, or local law or regulation
applicable to any Loan Party or its Subsidiaries, the Governing Documents of any
Loan Party or its Subsidiaries, or any order, judgment, or decree of any court
or other Governmental Authority binding on any Loan Party or its Subsidiaries,
(ii) conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any Material Contract of any Loan Party
or its Subsidiaries except to the extent that any such conflict, breach or
default could not individually or in the aggregate reasonably be expected to
have a Material Adverse Change, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any assets of any Loan
Party, other than Permitted Liens, or (iv) require any approval of any Loan
Party’s interestholders or any approval or consent of any Person under any
Material Contract of any Loan Party, other than consents or approvals that have
been obtained and that are still in force and effect and except, in the case of
Material Contracts, for consents or approvals, the failure to obtain could not
individually or in the aggregate reasonably be expected to cause a Material
Adverse Change.
 
4.3    Governmental Consents. The execution, delivery, and performance by each
Loan Party of the Loan Documents to which such Loan Party is a party and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority, (a) other than
registrations, consents, approvals, notices, or other actions that (i) have been
obtained and that are still in force and effect, or (ii) the failure of which to
obtain or perform could not reasonably be expected to result in a Material
Adverse Change, and (b) except for filings and recordings with respect to the
Collateral to be made, or otherwise delivered to Agent for filing or
recordation, as of the Closing Date.
 
4.4    Binding Obligations; Perfected Liens.
(a)    Each Loan Document has been duly executed and delivered by each Loan
Party that is a party thereto and is the legally valid and binding obligation of
such Loan Party, enforceable against such Loan Party in accordance with its
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors’ rights generally.
(b)    Agent’s Liens are validly created, perfected (other than (i) in respect
of motor vehicles that are subject to a certificate of title and as to which
Agent has not caused its Lien to be noted on the applicable certificate of
title, and (ii) any Deposit Accounts and Securities Accounts not subject to a
Control Agreement as permitted by Section 6.11, and subject only to the filing
of financing statements, the recordation of the Copyright Security Agreement,
and the recordation of the Mortgages, in each case, in the

26

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

appropriate filing offices), and first priority Liens, subject only to Permitted
Liens which are non-consensual Permitted Liens, permitted purchase money Liens
or the interests of lessors under Capital Leases.
 
4.5    Title to Assets; No Encumbrances. Each of the Loan Parties has (a) good,
sufficient and legal title to (in the case of fee interests in Real Property),
(b) valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (c) good and marketable title to (in the case of all
other personal property), all of their respective assets reflected in their most
recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements to the
extent permitted hereby. All of such assets are free and clear of Liens except
for Permitted Liens.
 
4.6    Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.
(a)    The name of (within the meaning of Section 9-503 of the Code) and
jurisdiction of organization of each Loan Party and each of its direct
Subsidiaries is set forth on Schedule 4.6(a) of the Disclosure Letter (as such
Schedule may be updated from time to time to reflect changes resulting from
transactions permitted under this Agreement).
(b)    The chief executive office of each Loan Party is located at the address
indicated on Schedule 4.6(b) of the Disclosure Letter (as such Schedule may be
updated from time to time to reflect changes resulting from transactions
permitted under this Agreement).
(c)    Each Loan Party’s tax identification numbers and organizational
identification numbers, if any, are identified on Schedule 4.6(c) of the
Disclosure Letter (as such Schedule may be updated from time to time to reflect
changes resulting from transactions permitted under this Agreement).
(d)    As of the Closing Date, no Loan Party holds any commercial tort claims
that exceed $500,000 in amount, except as set forth on Schedule 4.6(d) of the
Disclosure Letter.
 
4.7    Litigation.
(a)    There are no actions, suits, or proceedings pending or, to the knowledge
of Borrowers, after due inquiry, threatened in writing against a Loan Party or
any of its Subsidiaries that either individually or in the aggregate could
reasonably be expected to result in a Material Adverse Change.
(b)    Schedule 4.7(b) of the Disclosure Letter sets forth a complete and
accurate description, with respect to each of the actions, suits, or proceedings
that could reasonably be expected to result in liabilities in excess of,
$1,000,000 that, as of the Closing Date, is pending or, to the knowledge of
Borrowers, after due inquiry, threatened in writing against a Loan Party or any
of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings,
(ii) the nature of the dispute that is the subject of such actions, suits, or
proceedings, (iii) the status, as of the Closing Date, with respect to such
actions, suits, or proceedings, and (iv) whether any liability of the Loan
Parties’ and their Subsidiaries in connection with such actions, suits, or
proceedings is covered by insurance.
 
4.8    Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is in
violation of any applicable laws, rules, regulations, executive orders, or codes
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Change, or (b) is subject
to or in default with respect to any final judgments, writs, injunctions,
decrees, rules or regulations of any court or any federal, state, municipal or
other governmental department, commission,

27

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

board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Change.
 
4.9    No Material Adverse Change. All historical financial statements relating
to the Loan Parties and their Subsidiaries that have been delivered by any of
the Borrowers to Agent have been prepared in accordance with GAAP (except, in
the case of unaudited financial statements, for the lack of footnotes and being
subject to year-end audit adjustments) and present fairly in all material
respects, the Loan Parties’ and their Subsidiaries’ consolidated financial
condition as of the date thereof and results of operations for the period then
ended. Since June 30, 2011, no event, circumstance, or change has occurred that
has or could reasonably be expected to result in a Material Adverse Change with
respect to the Loan Parties and their Subsidiaries.
 
4.10    Fraudulent Transfer.
(a)    Parent and its Subsidiaries, on a consolidated basis, are Solvent.
(b)    No transfer of property is being made by any Loan Party and no obligation
is being incurred by any Loan Party in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of such Loan Party.
 
4.11    Employee Benefits. Other than employee benefit plans maintained by the
Foreign Subsidiaries set forth on Schedule 4.11 of the Disclosure Letter for the
benefit of their non-resident alien employees, the liability of which is not the
responsibility of, nor otherwise effects any Loan Party or any portion of the
Collateral, no Loan Party, none of their Subsidiaries, nor any of their ERISA
Affiliates maintains or contributes to any Benefit Plan.
 
4.12    Environmental Condition. Except as set forth on Schedule 4.12 of the
Disclosure Letter, (a) to Borrowers’ knowledge, no Loan Party’s nor any of its
Subsidiaries’ properties or assets has ever been used by a Loan Party, its
Subsidiaries, or by previous owners or operators in the disposal of, or to
produce, store, handle, treat, release, or transport, any Hazardous Materials,
where such disposal, production, storage, handling, treatment, release or
transport was in violation, in any material respect, of any applicable
Environmental Law, (b) to Borrowers’ best knowledge, no Loan Party’s nor any of
its Subsidiaries’ properties or assets has ever been designated or identified in
any manner pursuant to any environmental protection statute as a Hazardous
Materials disposal site, (c) no Loan Party nor any of its Subsidiaries has
received written notice that a Lien arising under any Environmental Law has
attached to any revenues or to any Real Property owned or operated by a Loan
Party or its Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor
any of their respective facilities or operations is subject to any outstanding
written order, consent decree, or settlement agreement with any Person relating
to any Environmental Law or Environmental Liability that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Change.
 
4.13    Reserved.
 
4.14    Leases. Each Loan Party enjoy peaceful and undisturbed possession under
all leases material to their business and to which they are parties or under
which they are operating, and, subject to Permitted Protests, all of such
material leases are valid and subsisting and no material default by the
applicable Loan Party exists under any of them.
 

28

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

4.15    Deposit Accounts and Securities Accounts. Set forth on Schedule 4.15 of
the Disclosure Letter (as updated pursuant to the provisions of the Security
Agreement from time to time) is a listing of all of the Loan Parties’ Deposit
Accounts and Securities Accounts, including, with respect to each bank or
securities intermediary (a) the name and address of such Person, and (b) the
account numbers of such Deposit Accounts or Securities Accounts maintained with
such Person.
 
4.16    Complete Disclosure. All factual information taken as a whole (other
than forward-looking information and projections and information of a general
economic nature and general information about Borrowers’ industry) furnished by
or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any
Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement or
the other Loan Documents, and all other such factual information taken as a
whole (other than forward-looking information and projections and information of
a general economic nature and general information about Borrowers’ industry)
hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in
writing to Agent or any Lender will be, true and accurate, in all material
respects, on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided. The Projections
delivered to Agent on September 28, 2011 represent, and as of the date on which
any other Projections are delivered to Agent, such additional Projections
represent, Borrowers’ good faith estimate, on the date such Projections are
delivered, of the Loan Parties’ and their Subsidiaries’ future performance for
the periods covered thereby based upon assumptions believed by Borrowers to be
reasonable at the time of the delivery thereof to Agent (it being understood
that such Projections are subject to uncertainties and contingencies, many of
which are beyond the control of the Loan Parties and their Subsidiaries, that no
assurances can be given that such Projections will be realized, and that actual
results may differ in a material manner from such Projections).
 
4.17    Reserved.
 
4.18    Patriot Act. To the extent applicable, each Loan Party is in compliance,
in all material respects, with the (a) Trading with the Enemy Act, as amended,
and each of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (b) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”). No part of the
proceeds of the loans made hereunder will be used by any Loan Party or any of
their Affiliates, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.
 
4.19    Indebtedness. Set forth on Schedule 4.19 of the Disclosure Letter is a
true and complete list of all Indebtedness of each Loan Party and each of its
Subsidiaries outstanding immediately prior to the Closing Date that is to remain
outstanding immediately after giving effect to the closing hereunder on the
Closing Date and such Schedule accurately sets forth the aggregate principal
amount of such Indebtedness as of the Closing Date.
 
4.20    Payment of Taxes. Except (a) as otherwise permitted under Section 5.5,
or (b) with respect to tax controversies and delinquencies, in existence as of
the Closing Date, relating to Parent’s and its Subsidiaries’ operations in the
jurisdictions set forth in Schedule 4.20 of the Disclosure Letter (collectively,
the “Foreign Tax Controversies”), pursuant to which the non-payment of any taxes
could not, individually

29

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

or in the aggregate, reasonably be expected to result in a Material Adverse
Change, all material tax returns and reports of each Loan Party and its
Subsidiaries required to be filed by any of them have been timely filed (after
giving effect to any duly filed extension), and all taxes shown on such tax
returns to be due and payable and all material assessments, fees and other
governmental charges upon a Loan Party and its Subsidiaries and upon their
respective assets, income, businesses and franchises that are due and payable
have been paid when due and payable. As of the Closing Date, the aggregate
unpaid amount with respect to all Foreign Tax Controversies (other than the
Foreign Tax Controversies relating to Parent’s and its Subsidiaries’ operations
in Canada) does not exceed $500,000. Each Loan Party and each of its
Subsidiaries have made adequate provision in accordance with GAAP for all taxes
not yet due and payable. Other than the Foreign Tax Controversies, no Borrower
knows of any proposed tax assessment against a Loan Party or any of its
Subsidiaries that is material to the business of the Loan Parties and their
Subsidiaries (taken as a whole) and that is not being actively contested by such
Loan Party or such Subsidiary diligently, in good faith, and by appropriate
proceedings; provided such reserves or other appropriate provisions, if any, as
shall be required in conformity with GAAP shall have been made or provided
therefor.
 
4.21    Margin Stock. No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the loans made to Borrowers will be used to purchase or carry
any such Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that violates
the provisions of Regulation T, U or X of the Board of Governors of the United
States Federal Reserve.
 
4.22    Governmental Regulation. No Loan Party nor any of its Subsidiaries is
subject to regulation under the Federal Power Act or the Investment Company Act
of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable. No Loan Party nor any of its
Subsidiaries is a “registered investment company” or a company “controlled” by a
“registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.
 
4.23    OFAC. No Loan Party nor any of its Subsidiaries is in violation of any
of the country or list based economic and trade sanctions administered and
enforced by OFAC. No Loan Party nor any of its Subsidiaries (a) is a Sanctioned
Person or a Sanctioned Entity, (b) has its assets located in Sanctioned
Entities, or (c) derives revenues from investments in, or transactions with
Sanctioned Persons or Sanctioned Entities. No proceeds of any loan made
hereunder will be used to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned
Entity.
 
4.24    Employee and Labor Matters. There is (i) no unfair labor practice
complaint pending or, to the knowledge of Borrowers, threatened against Parent
or its Subsidiaries before any Governmental Authority and no grievance or
arbitration proceeding pending or threatened against Parent or its Subsidiaries
which arises out of or under any collective bargaining agreement and that could
reasonably be expected to result in a material liability, (ii) no strike, labor
dispute, slowdown, stoppage or similar action or grievance pending or threatened
in writing against Parent or its Subsidiaries that could reasonably be expected
to result in a material liability, or (iii) to the knowledge of Parent or any
Borrower, after due inquiry, no union representation question existing with
respect to the employees of Parent or its Subsidiaries and no union organizing
activity taking place with respect to any of the employees of Parent or its
Subsidiaries. Neither Parent nor any of its Subsidiaries has incurred any
liability or obligation under the Worker Adjustment and Retraining Notification
Act or similar state law, which remains unpaid or unsatisfied. The hours worked
and payments made to employees of Parent or its Subsidiaries have not been in
violation of the Fair Labor

30

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

Standards Act or any other applicable legal requirements, except to the extent
such violations could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change. All material payments due from
Parent or its Subsidiaries on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of Parent or its Subsidiaries, except where the failure to do so could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.
 
4.25    Inactive Subsidiaries. None of the Subsidiaries listed on Schedule 4.25
of the Disclosure Letter (each, an “Inactive Subsidiary”) engages in any
operations or business, owns any material assets, or has any material
liabilities.
 
4.26    [Reserved].
 
4.27    [Reserved].
 
4.28    Eligible Accounts. As to each Account that is identified by any Borrower
as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such
Account is (a) a bona fide existing payment obligation of the applicable Account
Debtor created by the sale and delivery of Inventory or the rendition of
services to such Account Debtor in the ordinary course of Borrowers’ business,
(b) owed to one or more of the Borrowers, and (c) not excluded as ineligible by
virtue of one or more of the excluding criteria (other than Agent-discretionary
criteria) set forth in the definition of Eligible Accounts.
 
4.29    Eligible Inventory. As to each item of Inventory that is identified by
any Borrower as Eligible Inventory in a Borrowing Base Certificate submitted to
Agent, such Inventory is (a) of good and merchantable quality, free from known
defects (other than defects that do not prevent satisfaction of the standard
requirements for delivery and acceptance of such Inventory), and (b) not
excluded as ineligible by virtue of one or more of the excluding criteria (other
than Agent-discretionary criteria) set forth in the definition of Eligible
Inventory.
 
4.30    Locations of Inventory and Equipment. The Inventory and Equipment (other
than vehicles or Equipment out for repair, Shipped Goods and other Inventory
having a value of less than (i) $5,000,000 with respect to any one location at
any one time, or (ii) $15,000,000 in the aggregate at any one time) of the Loan
Parties and their Subsidiaries are not stored with a bailee, warehouseman, or
similar party (unless such bailee, warehouseman, or similar party is identified
on Schedule 4.30 of the Disclosure Letter) and are located only at, or
in-transit between or to, the locations identified on Schedule 4.30 of the
Disclosure Letter (as such Schedule may be updated pursuant to Section 5.15).
 
4.31    Inventory Records. Each Loan Party keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Subsidiaries’ Inventory and the book value thereof.
 
5.
AFFIRMATIVE COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties shall and
shall cause each of their Subsidiaries to comply with each of the following:
 
5.1    Financial Statements, Reports, Certificates. Deliver to Agent, with
copies to each Lender, each of the financial statements, reports, and other
items set forth on Schedule 5.1 no later than the times specified therein. In
addition, each Borrower agrees that no Loan Party will have a fiscal year
different from

31

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

that of Parent. In addition, Parent agrees to maintain a system of accounting
that enables Parent to produce financial statements in accordance with GAAP.
Each Loan Party shall also (a) keep a reporting system that shows all additions,
sales, claims, returns, and allowances with respect to its and its Subsidiaries’
sales, and (b) maintain its billing systems/practices substantially as in effect
as of the Closing Date and shall only make material modifications thereto with
notice to Agent.
 
5.2    Collateral Reporting. Provide Agent (and if so requested by Agent, with
copies for each Lender) with each of the reports set forth on Schedule 5.2 at
the times specified therein.
 
5.3    Existence. Except as otherwise permitted under Section 6.3 or Section
6.4, at all times maintain and preserve in full force and effect its existence
(including being in good standing in its jurisdiction of organization) and all
rights and franchises, licenses and permits material to its business; provided,
however, that no Loan Party or any of its Subsidiaries shall be required to
preserve any such right or franchise, licenses or permits if such Person’s board
of directors (or similar governing body) shall determine that the preservation
thereof is no longer desirable in the conduct of the business of such Person,
and that the loss thereof is not disadvantageous in any material respect to such
Person or to the Lenders.
 
5.4    Maintenance of Properties. Maintain and preserve all of its assets that
are necessary or useful in the proper conduct of its business in good working
order and condition, ordinary wear, tear, and casualty excepted and Permitted
Dispositions excepted, and comply with the material provisions of all material
leases to which it is a party as lessee, so as to prevent the loss or forfeiture
thereof, unless such provisions are the subject of a Permitted Protest.
 
5.5    Taxes. Cause all assessments and taxes imposed, levied, or assessed
against any Loan Party or its Subsidiaries, or any of their respective assets or
in respect of any of its income, businesses, or franchises to be paid in full,
before delinquency or before the expiration of any extension period, except (a)
in relation to the Foreign Tax Controversies as to which the non-payment of any
taxes could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Change, or (b) to the extent that the validity of
such assessment or tax shall be the subject of a Permitted Protest and so long
as, in the case of an assessment or tax that has become a Lien against any of
the Collateral, such contest proceedings conclusively operate to stay the sale
of any portion of the Collateral to satisfy such assessment or tax. Other than
with respect to the Foreign Tax Controversies, which are subject to the
preceding sentence, Parent will and will cause each of its Subsidiaries to make
timely payment or deposit of all tax payments and withholding taxes required of
it and them by applicable laws, including those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal income taxes, and
will, upon request, furnish Agent with proof reasonably satisfactory to Agent
indicating that Parent and its Subsidiaries have made such payments or deposits.
 
5.6    Insurance. At Borrowers’ expense, maintain insurance respecting each of
the Loan Parties’ and their Subsidiaries’ assets wherever located, covering loss
or damage by fire, theft, explosion, and all other hazards and risks as
ordinarily are insured against by other Persons engaged in the same or similar
businesses. Borrowers also shall maintain (with respect to each of the Loan
Parties and their Subsidiaries) business interruption, general liability,
product liability insurance, director’s and officer’s liability insurance,
fiduciary liability insurance, and employment practices liability insurance, as
well as insurance against larceny, embezzlement, and criminal misappropriation.
All such policies of insurance shall be with responsible and reputable insurance
companies acceptable to Agent and in such amounts as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and located and in any event in amount, adequacy and scope
reasonably satisfactory to Agent. All property insurance policies covering the
Collateral are to be made payable to Agent for the benefit of Agent and the
Lenders, as their interests may appear, in case of loss, pursuant to a standard
loss payable endorsement with

32

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

a standard non contributory “lender” or “secured party” clause and are to
contain such other provisions as Agent may reasonably require to fully protect
the Lenders’ interest in the Collateral and to any payments to be made under
such policies. All certificates of property and general liability insurance are
to be delivered to Agent, with the loss payable (but only in respect of
Collateral) and additional insured endorsements in favor of Agent and shall
provide for not less than 30 days (10 days in the case of non-payment) prior
written notice to Agent of the exercise of any right of cancellation. If any
Borrower fails to maintain such insurance, Agent may arrange for such insurance,
but at such Borrower’s expense and without any responsibility on Agent’s part
for obtaining the insurance, the solvency of the insurance companies, the
adequacy of the coverage, or the collection of claims. Borrowers shall give
Agent prompt notice of any loss exceeding $500,000 covered by its casualty or
business interruption insurance. Upon the occurrence and during the continuance
of an Event of Default, Agent shall have the sole right to file claims under any
property and general liability insurance policies in respect of the Collateral,
to receive, receipt and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.
 
5.7    Inspection. Permit Agent and each of its duly authorized representatives
or agents to visit any of its properties and inspect any of its assets or books
and records, to conduct appraisals and valuations, to examine and make copies of
its books and records, and to discuss its affairs, finances, and accounts with,
and to be advised as to the same by, its officers and employees at such
reasonable times and intervals as Agent may designate and, so long as no Default
or Event of Default exists, with reasonable prior notice to Administrative
Borrower.
 
5.8    Compliance with Laws. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Change.
 
5.9    Environmental.
(a)    Keep any property either owned or operated by Parent or its Subsidiaries
free of any Environmental Liens or post bonds or other financial assurances
sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens,
(b)    Comply, in all material respects, with Environmental Laws and provide to
Agent documentation of such compliance which Agent reasonably requests,
(c)    Promptly notify Agent of any release of which Parent or any Borrower has
knowledge of a Hazardous Material in any reportable quantity from or onto
property owned or operated by Parent or its Subsidiaries and take any Remedial
Actions required to abate said release or otherwise to come into compliance, in
all material respects, with applicable Environmental Law, and
(d)    Promptly, but in any event within 5 Business Days of its receipt thereof,
provide Agent with written notice of any of the following: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of Parent any or its Subsidiaries, (ii) commencement of any Environmental Action
or written notice that an Environmental Action will be filed against Parent or
its Subsidiaries, and (iii) written notice of a material violation, citation, or
other administrative order from a Governmental Authority in respect of any Loan
Party or any of its Subsidiaries.
 

33

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

5.10    Disclosure Updates. Promptly and in no event later than 5 Business Days
after obtaining knowledge thereof, notify Agent if any written information,
exhibit, or report furnished to Agent or the Lenders contained, at the time it
was furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.
 
5.11    Formation of Subsidiaries. At the time that any Loan Party forms any
direct or indirect Subsidiary or acquires any direct or indirect Subsidiary
after the Closing Date, such Loan Party shall (a) within 30 days of such
formation or acquisition (or such later date as permitted by Agent in its sole
discretion) cause any such new Subsidiary to provide to Agent a joinder to the
Guaranty and the Security Agreement, together with such other security documents
(including mortgages with respect to any Real Property owned in fee of such new
Subsidiary with a fair market value of at least $1,000,000), as well as
appropriate financing statements (and with respect to all property subject to a
mortgage, fixture filings), all in form and substance reasonably satisfactory to
Agent (including being sufficient to grant Agent a first priority Lien (subject
to Permitted Liens) in and to the assets of such newly formed or acquired
Subsidiary); provided that the Guaranty, the Security Agreement, and such other
security documents shall not be required to be provided to Agent with respect to
any Subsidiary of Parent that is a CFC or CFC Holding Company, and (b) within 30
days of such formation or acquisition (or such later date as permitted by Agent
in its sole discretion) provide to Agent all other documentation, including one
or more opinions of counsel reasonably satisfactory to Agent, which in its
opinion is appropriate with respect to the execution and delivery of the
applicable documentation referred to above (including policies of title
insurance or other documentation with respect to all Real Property owned in fee
and subject to a Mortgage). Any document, agreement, or instrument executed or
issued pursuant to this Section 5.11 shall be a Loan Document.
 
5.12    Further Assurances. At any time upon the reasonable request of Agent,
execute or deliver to Agent any and all financing statements, fixture filings,
security agreements, pledges, assignments (excluding intellectual property
assignments), endorsements of certificates of title, mortgages, deeds of trust,
opinions of counsel, and all other documents (the “Additional Documents”) that
Agent may reasonably request in form and substance reasonably satisfactory to
Agent, to create, perfect, and continue perfected or to better perfect Agent’s
Liens in all of the assets of the Loan Parties (whether now owned or hereafter
arising or acquired, tangible or intangible, real or personal, but excluding any
assets that are expressly excluded from the Collateral pursuant to the Security
Agreement and this Section 5.12 with respect to Real Property), to create and
perfect Liens in favor of Agent in any Real Property acquired by any Loan Party
after the Closing Date with a fair market value in excess of $1,000,000 and in
order to fully consummate all of the transactions contemplated hereby and under
the other Loan Documents; provided that the foregoing shall not apply to any
Subsidiary of any Loan Party that is a CFC or CFC Holding Company. To the
maximum extent permitted by applicable law, if Parent or any Subsidiary refuses
or fails to execute or deliver any reasonably requested Additional Documents
within a reasonable period of time following the request to do so, each Borrower
hereby authorize Agent to execute any such Additional Documents in the
applicable Loan Party’s or its Subsidiary’s name, as applicable, and authorizes
Agent to file such executed Additional Documents in any appropriate filing
office. In furtherance and not in limitation of the foregoing, each Loan Party
shall take such actions as Agent may reasonably request from time to time to
ensure that the Obligations are guarantied by the Guarantors and are secured by
substantially all of the assets of each Loan Party.
 
5.13    Lender Meetings. Within 90 days after the close of each fiscal year of
Parent, at the request of Agent or of the Required Lenders and upon reasonable
prior notice, hold a meeting (at a mutually agreeable

34

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

location and time or, at the option of Agent, by conference call) with all
Lenders who choose to attend such meeting at which meeting shall be reviewed the
financial results of the previous fiscal year and the financial condition of
Parent and its Subsidiaries and the projections presented for the current fiscal
year of Parent.
 
5.14    [Reserved].
 
5.15    Location of Inventory and Equipment. Keep each Loan Party’s Inventory
and Equipment (other than vehicles and Equipment out for repair, Shipped Goods
and other Inventory having a value of less than (i) $5,000,000 with respect to
any one location at any one time, or (ii) $15,000,000 in the aggregate at any
one time) only at the locations identified on Schedule 4.30 of the Disclosure
Letter and their chief executive offices only at the locations identified on
Schedule 4.6(b) of the Disclosure Letter; provided, however, that any Borrower
may amend Schedule 4.30 of the Disclosure Letter or Schedule 4.6(b) of the
Disclosure Letter so long as (i) such amendment occurs by written notice to
Agent not less than 10 days prior to the date on which such Inventory or
Equipment is moved to such new location or such chief executive office is
relocated (or by such later date as may be agreed upon by Agent in its sole
discretion), (ii) such new location is within the continental United States, and
(iii) to the extent such new location is also set forth on Schedule E-1 of the
Disclosure Letter or Schedule 4.6(b) of the Disclosure Letter, at the time of
such written notification, such Borrower provides Agent a Collateral Access
Agreement with respect thereto or a Rent Reserve has been established with
respect thereto.
 
6.
NEGATIVE COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties will not
and will not permit any of their Subsidiaries to do any of the following:
 
6.1    Indebtedness. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except for Permitted Indebtedness.
 
6.2    Liens. Create, incur, assume, or suffer to exist, directly or indirectly,
any Lien on or with respect to any of its assets, of any kind, whether now owned
or hereafter acquired, or any income or profits therefrom, except for Permitted
Liens.
 
6.3    Restrictions on Fundamental Changes.
(a)    Other than in order to consummate a Permitted Acquisition, enter into any
merger, consolidation, reorganization, or recapitalization, or reclassify its
Stock except for (i) any mergers or consolidations between Loan Parties,
provided that a Borrower must be the surviving entity of any such merger to
which it is a party, (ii) any merger between a Loan Party and Subsidiaries of
such Loan Party that are not Loan Parties, so long as (y) such Loan Party is the
surviving entity of any such merger, and (z) the Accounts and Inventory of such
Subsidiary shall not be Eligible Accounts or Eligible Inventory until such time
as the Agent and the Lenders shall have completed an audit of such assets and
such other due diligence reasonably requested by the Agent, in a manner and with
results reasonably satisfactory to the Agent and (iii) any merger between
Subsidiaries of Parent that are not Loan Parties,
(b)    Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), except for (i) the liquidation or dissolution of any Inactive
Subsidiary, (ii) the liquidation or dissolution of a Loan Party (other than
Parent) or any of such Loan Party’s wholly-owned Subsidiaries so long as all of
the assets (including any interest in any Stock) of such liquidating or
dissolving Loan Party or Subsidiary are transferred

35

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

to a Loan Party that is not liquidating or dissolving, or (iii) the liquidation
or dissolution of a Subsidiary of Parent that is not a Loan Party (other than
any such Subsidiary the Stock of which (or any portion thereof) is subject to a
Lien in favor of Agent) so long as all of the assets of such liquidating or
dissolving Subsidiary are transferred to a Subsidiary of Parent that is not
liquidating or dissolving, or
(c)    Suspend or go out of a substantial portion of its or their business,
except as permitted pursuant to clauses (a) or (b) above or in connection with
the transactions permitted pursuant to Section 6.4.
 
6.4    Disposal of Assets. Other than Permitted Dispositions or transactions
expressly permitted by Sections 6.3, 6.9 or 6.11, convey, sell, lease, license,
assign, transfer, or otherwise dispose of (or enter into an agreement to convey,
sell, lease, license, assign, transfer, or otherwise dispose of) any of Parent’s
or its Subsidiaries’ assets.
 
6.5    Change Name. Change its name, organizational identification number, state
of organization or organizational identity; provided, however, that Parent or
its Subsidiaries may change their names upon at least 10 days prior written
notice to Agent of such change.
 
6.6    Nature of Business. Make any change in the nature of its or their
business as described in Schedule 6.6 of the Disclosure Letter or acquire any
properties or assets that are not reasonably related to the conduct of such
business activities; provided, however, that the foregoing shall not prevent
Parent and its Subsidiaries from (a) engaging in any business that is reasonably
related or ancillary to its or their business, or (b) discontinuing any line of
business if in the reasonable business and commercial judgment of the officers
of Borrower, it is no longer desirable to be engaged in such business.
 
6.7    Prepayments and Amendments.
(a)    Except in connection with Refinancing Indebtedness permitted by Section
6.1,
(i)    optionally prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of Parent and its Subsidiaries, other than (A) the Obligations in
accordance with this Agreement, and (B) Permitted Intercompany Advances, or
(ii)    make any payment on account of Indebtedness that has been contractually
subordinated in right of payment to the Obligations if such payment is not
permitted at such time under the subordination terms and conditions, or
(b)    Directly or indirectly, amend, modify, or change any of the terms or
provisions of
(i)    any agreement, instrument, document, indenture, or other writing
evidencing or concerning Permitted Indebtedness other than (A) the Obligations
in accordance with this Agreement, (B) Permitted Intercompany Advances, and (C)
Indebtedness permitted under clauses (c), (h), (i) and (j) of the definition of
Permitted Indebtedness, or
(ii)    the Governing Documents of any Loan Party or any of its Subsidiaries if
the effect thereof, either individually or in the aggregate, could reasonably be
expected to be materially adverse to the interests of the Lenders.
 
6.8    Change of Control. Cause, permit, or suffer, directly or indirectly, any
Change of Control.
 

36

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

6.9    Restricted Junior Payments. Make any Restricted Junior Payment; provided,
however, that, so long as (i) it is permitted by law, and (ii) no Default or
Event of Default shall have occurred and be continuing or would result
therefrom,
(a)    Parent may make distributions to former employees, officers, or directors
of Parent (or any spouses, ex-spouses, or estates of any of the foregoing) on
account of redemptions of Stock of Parent held by such Persons, provided that
the aggregate amount of such redemptions made by Parent during the term of this
Agreement does not exceed $500,000 in the aggregate,
(b)    Parent may make distributions to former employees, officers, or directors
of Parent (or any spouses, ex-spouses, or estates of any of the foregoing),
solely in the form of forgiveness of Indebtedness of such Persons owing to
Parent on account of repurchases of the Stock of Parent held by such Persons;
provided, that such Indebtedness was incurred by such Persons solely to acquire
Stock of Parent,
(c)    Parent and any of its Subsidiaries may make payment of cash in lieu of
the issuance of fractional shares upon (i) the exercise of options or warrants,
or (ii) the conversion or exchange of such Person’s Stock;
(d)    Parent may make any other Restricted Junior Payments; provided, however,
that Borrowers have (i) Availability (x) at all times during the 60 day period
immediately before the effective date of each such Restricted Junior Payment as
evidenced by the Borrowing Base Certificates delivered during such 60 day
period, and (y) immediately after giving effect to each such Restricted Junior
Payment, plus (ii) Qualified Cash (x) at all times during the 60 day period
immediately before the effective date of each such Restricted Junior Payment,
and (y) immediately after giving effect to each such Restricted Junior Payment,
in an amount equal to or greater than $25,000,000 (of which at least $15,000,000
shall be in the form of Availability); and
(e)    So long as it constitutes a non-cash transaction, Parent may make
repurchases of Stock deemed to occur (i) upon the exercise of stock options to
the extent such Stock represent a portion of the exercise price of those stock
options, and (ii) upon the withholding of a portion of the Stock granted or
awarded to a current or former officer, director, employee or consultant to pay
for the taxes payable by such Person upon such grant or award (or upon vesting
thereof).
 
6.10    Accounting Methods. Modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP).
 
6.11    Investments; Controlled Investments .
(a)    Except for Permitted Investments, directly or indirectly, make or acquire
any Investment or incur any liabilities (including contingent obligations) for
or in connection with any Investment.
(b)    Other than (i) an aggregate amount of not more than $250,000 at any one
time, in the case of the Loan Parties and their Subsidiaries (other than those
Subsidiaries that are CFCs or CFC Holding Companies, and other than Foreign
Accounts), (ii) amounts deposited into Deposit Accounts specially and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for Loan Parties’ or their Subsidiaries’ employees, and (iii) an
aggregate amount of not more than $70,000,000 (calculated at exchange rates in
effect on any date of determination) at any one time, in the case of
Subsidiaries of the Loan Parties that are CFCs or CFC Holding Companies or in
the case of Foreign Account, no Loan Party nor any of its Subsidiaries shall
make, acquire, or permit to exist Investments

37

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

consisting of cash, Cash Equivalents or other amounts credited to Deposit
Accounts or Securities Accounts unless the applicable Loan Party or the
applicable Subsidiary of a Loan Party and the applicable bank or securities
intermediary have entered into Control Agreements with Agent governing such
Investments; provided that the foregoing restriction shall not be applicable to
Subsidiaries of the Loan Parties that are CFCs or CFC Holding Companies or with
respect to Foreign Accounts so long as Borrower and its Subsidiaries have
Availability plus Qualified Cash in an amount equal to or greater than
$25,000,000 (of which at least $15,000,000 shall be in the form of
Availability); provided further that, if, as of any date of determination, (i)
Permitted Investments in Deposit Accounts and Securities Accounts of CFCs, CFC
Holding Companies and Foreign Accounts that are not subject to Control
Agreements in favor of Agent are in excess of $70,000,000 (calculated at
exchange rates in effect on any date of determination), and (ii) Borrower and
its Subsidiaries have Availability plus Qualified Cash of less than $25,000,000
(of which at least $15,000,000 shall be in the form of Availability), and if
such Permitted Investments in excess of $70,000,000 are deposited in a Deposit
Account or Securities Account subject to a Control Agreement in favor of Agent
within 30 days of such date, Borrower and its Subsidiaries shall be deemed to be
in compliance with the foregoing Section 6.11(b).
 
6.12    Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of Parent or any of
Subsidiary of Parent except for:
(a)    transactions (other than the payment of management, consulting,
monitoring, or advisory fees) between Parent or its Subsidiaries, on the one
hand, and any Affiliate of Parent or such Subsidiary, on the other hand, so long
as such transactions (i) are fully disclosed to Agent prior to the consummation
thereof, if they involve one or more payments by Parent or such Subsidiary in
excess of $5,000,000 for any single transaction or series of related
transactions, and (ii) are no less favorable, taken as a whole, to Parent or
such Subsidiary, as applicable, than would be obtained in an arm’s length
transaction with a non-Affiliate,
(b)    so long as it has been approved by Parent’s or such Subsidiary’s board of
directors (or comparable governing body) in accordance with applicable law, any
indemnity provided for the benefit of directors (or comparable managers) of
Parent or such Subsidiary,
(c)    the payment of reasonable fees and reimbursements of expenses (pursuant
to indemnity arrangements or otherwise), compensation (in cash or otherwise),
severance, or employee benefit arrangements to employees, officers, directors or
consultants of Parent and its Subsidiaries in the ordinary course of business
and consistent with industry practice,
(d)    [Reserved], and
(e)    transactions permitted by Section 6.3 or Section 6.9, or any Permitted
Intercompany Advance.
 
6.13    Use of Proceeds. Use the proceeds of any loan made hereunder for any
purpose other than, consistent with the terms and conditions hereof, for their
lawful and permitted purposes (including to finance Permitted Acquisitions and
that no part of the proceeds of the loans made to Borrowers will be used to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any such margin stock or for any purpose that violates
the provisions of Regulation T, U or X of the Board of Governors of the United
States Federal Reserve).
 
6.14    [Reserved].

38

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

 
6.15    Inactive Subsidiaries. Permit any Inactive Subsidiary to incur any
material liabilities, own or acquire any material assets or engage itself in any
material operations or business.
 
6.16    Consignments. Other than Shipped Goods and Benchmark Inventory, consign
any of its or their Inventory in an amount exceeding (i) $5,000,000 with respect
to any one location at any one time, or (ii) $15,000,000 in the aggregate at any
one time, or sell any of its or their Inventory on bill and hold, sale or
return, sale on approval, or other conditional terms of sale.
 
6.17    Inventory and Equipment with Bailees. Store the Inventory or Equipment
(other than vehicles and Equipment out for repair, Shipped Goods and other
Inventory having a value of less than (i) $5,000,000 with respect to any one
location at any one time, or (ii) $15,000,000 in the aggregate at any one time)
of Parent or its Subsidiaries with a bailee, warehouseman, or similar party
unless (i) the location at which such Inventory or Equipment will be stored is
required under this Agreement to be listed on Schedule 4.30 of the Disclosure
Letter, and (ii) to the extent such location is also set forth on Schedule E-1
of the Disclosure Letter, (a) Borrowers have provided written notice to Agent,
and (b) a Collateral Access Agreement with respect thereto or a Rent Reserve has
been established with respect thereto.
 
7.    FINANCIAL COVENANTS. Each Borrower covenants and agrees that, until
termination of all of the Commitments and payment in full of the Obligations,
commencing on the date on which a Financial Covenant Period begins and measured
as of the end of the fiscal quarter immediately preceding the date on which a
Financial Covenant Period first begins and as of each fiscal quarter end
thereafter during such Financial Covenant Period, such Borrower will have a
Fixed Charge Coverage Ratio, measured on a quarter-end basis, of at least the
required amount set forth in the following table for the applicable period set
forth opposite thereto:
Applicable Ratio
Applicable Period
1.10:1.00
For the 12 month period ending December 31, 2011 and for each 12 month period
ending as of the last day of each quarter thereafter

 
8.
EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:
8.1    If Borrowers fail to pay when due and payable, or when declared due and
payable, (a) all or any portion of the Obligations consisting of interest, fees,
or charges due the Lender Group, reimbursement of Lender Group Expenses, or
other amounts (other than any portion thereof constituting principal)
constituting Obligations (including any portion thereof that accrues after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), and
such failure continues for a period of 3 Business Days, or (b) all or any
portion of the principal of the Obligations;
8.2    If any Loan Party or any of its Subsidiaries:
(a)    fails to perform or observe any covenant or other agreement contained in
any of (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if any Loan Party is not in good
standing in its jurisdiction of organization),

39

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

5.6, 5.7 (solely if any Loan Party refuses to allow Agent or its representatives
or agents to visit such Loan Party’s properties, inspect its assets or books or
records, examine and make copies of its books and records, or discuss such Loan
Party’s affairs, finances, and accounts with officers and employees of such Loan
Party), 5.10, 5.11, 5.13, or 5.15 of this Agreement, (ii) Section 6 of this
Agreement, (iii) Section 7 of this Agreement, or (iv) Section 6 of the Security
Agreement;
(b)    fails to perform or observe any covenant or other agreement contained in
any of Sections 5.3 (other than if any Loan Party is not in good standing in its
jurisdiction of organization), 5.4, 5.5, 5.8, and 5.12 of this Agreement and
such failure continues for a period of 10 days after the earlier of (i) the date
on which such failure shall first become known to any officer of any Loan Party
or (ii) the date on which written notice thereof is given to Administrative
Borrower by Agent; or
(c)    fails to perform or observe any covenant or other agreement contained in
this Agreement, or in any of the other Loan Documents, in each case, other than
any such covenant or agreement that is the subject of another provision of this
Section 8 (in which event such other provision of this Section 8 shall govern),
and such failure continues for a period of 30 days after the earlier of (i) the
date on which such failure shall first become known to any officer of any Loan
Party or (ii) the date on which written notice thereof is given to
Administrative Borrower by Agent;
8.3    If one or more judgments, orders, or awards for the payment of money
involving an aggregate amount of $1,000,000, or more (except (x) judgments,
orders, or awards arising in the jurisdictions identified on Schedule 4.20 of
the Disclosure Letter against any Foreign Subsidiary in connection with a
Foreign Tax Controversy so long as such judgment, order, or award could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change or in a Lien against the Collateral, and (y) to the extent fully
covered (other than to the extent of customary deductibles) by insurance
pursuant to which the insurer has not denied coverage) is entered or filed
against a Loan Party or any of its Subsidiaries, or with respect to any of their
respective assets, and either (a) there is a period of 30 consecutive days at
any time after the entry of any such judgment, order, or award during which (1)
the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2)
a stay of enforcement thereof is not in effect, or (b) enforcement proceedings
are commenced upon such judgment, order, or award;
8.4    If an Insolvency Proceeding is commenced by a Loan Party or any of its
Subsidiaries (other than an Insolvency Proceeding (a) commenced by Silicon
Graphics Limited in connection with the Foreign Tax Controversies, provided that
such Insolvency Proceeding could not reasonably be expected to result in a
Material Adverse Change or in a Lien against the Collateral, or (b) in
connection with the liquidation of an Inactive Subsidiary);
8.5    If an Insolvency Proceeding is commenced against a Loan Party or any of
its Subsidiaries (other than an Insolvency Proceeding commenced against Silicon
Graphics Limited in connection with the Foreign Tax Controversies, provided that
such Insolvency Proceeding could not reasonably be expected to result in a
Material Adverse Change or in a Lien against the Collateral) and any of the
following events occur: (a) such Loan Party or such Subsidiary consents to the
institution of such Insolvency Proceeding against it, (b) the petition
commencing the Insolvency Proceeding is not timely controverted, (c) the
petition commencing the Insolvency Proceeding is not dismissed within 60
calendar days of the date of the filing thereof, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
such Loan Party or its Subsidiary, or (e) an order for relief shall have been
issued or entered therein;
8.6    If a Loan Party or any of its Subsidiaries is enjoined, restrained, or in
any way prevented

40

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

by court order from continuing to conduct all or any material part of the
business affairs of the Loan Parties, taken as a whole;
8.7    If there is a default in one or more agreements to which a Loan Party or
any of its Subsidiaries is a party with one or more third Persons relative to a
Loan Party’s or any of its Subsidiaries’ Indebtedness involving an aggregate
amount of $1,000,000 or more (other than agreements to which Silicon Graphics
Limited is a party and made solely in connection with the Foreign Tax
Controversies, provided that such default could not reasonably be expected to
result in a Material Adverse Change or in a Lien against the Collateral), and
such default (i) occurs at the final maturity of the obligations thereunder, or
(ii) results in a right by such third Person, irrespective of whether exercised,
to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations
thereunder;
8.8    If any warranty, representation, certificate, statement, or Record made
herein or in any other Loan Document or delivered in writing to Agent or any
Lender in connection with this Agreement or any other Loan Document proves to be
untrue in any material respect (except that such materiality qualifier shall not
be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof) as of the date of issuance or
making or deemed making thereof;
8.9    If the obligation of any Guarantor under the Guaranty is limited or
terminated by operation of law or by such Guarantor (other than in accordance
with the terms of this Agreement);
8.10    If the Security Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent of Permitted Liens which are permitted
purchase money Liens or the interests of lessors under Capital Leases, first
priority Lien on the Collateral covered thereby, except (a) as a result of a
disposition of the applicable Collateral in a transaction permitted under this
Agreement, or (b) as the result of an action or failure to act on the part of
Agent; or
8.11    The validity or enforceability of any Loan Document shall at any time
for any reason (other than solely as the result of an action or failure to act
on the part of Agent) be declared to be null and void, or a proceeding shall be
commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority
having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish
the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries
shall deny that such Loan Party or its Subsidiaries has any liability or
obligation purported to be created under any Loan Document.
 
9.
RIGHTS AND REMEDIES.

 
9.1    Rights and Remedies. Upon the occurrence and during the continuation of
an Event of Default, Agent may, and, at the instruction of the Required Lenders,
shall (in each case under clauses (a) or (b) by written notice to Administrative
Borrower), in addition to any other rights or remedies provided for hereunder or
under any other Loan Document or by applicable law, do any one or more of the
following:
(a)    declare the Obligations (other than the Bank Product Obligations),
whether evidenced by this Agreement or by any of the other Loan Documents
immediately due and payable, whereupon the same shall become and be immediately
due and payable and Borrowers shall be obligated to repay all of such
Obligations in full, without presentment, demand, protest, or further notice or
other requirements of any kind, all of which are hereby expressly waived by each
Borrower;
(b)    declare the Commitments terminated, whereupon the Commitments shall
immediately be terminated together with (i) any obligation of any Lender
hereunder to make Advances, (ii)

41

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

the obligation of the Swing Lender to make Swing Loans, and (iii) the obligation
of the Issuing Lender to issue Letters of Credit; and
(c)    exercise all other rights and remedies available to Agent or the Lenders
under the Loan Documents or applicable law.
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to any Borrower or any other Person or any
act by the Lender Group, the Commitments shall automatically terminate and the
Obligations (other than the Bank Product Obligations), inclusive of all accrued
and unpaid interest thereon and all fees and all other amounts owing under this
Agreement or under any of the other Loan Documents, shall automatically and
immediately become due and payable and Borrowers shall be obligated to repay all
of such Obligations in full, without presentment, demand, protest, or notice of
any kind, all of which are expressly waived by each Borrower.
 
9.2    Remedies Cumulative. The rights and remedies of the Lender Group under
this Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
 
10.
WAIVERS; INDEMNIFICATION.

 
10.1    Demand; Protest; etc. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which such Borrower may in any way be liable.
 
10.2    The Lender Group’s Liability for Collateral. Each Borrower hereby agrees
that: (a) so long as Agent complies with its obligations, if any, under the
Code, the Lender Group shall not in any way or manner be liable or responsible
for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto
occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrowers.
 
10.3    Indemnification. Borrowers shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons, and each Participant (each,
an “Indemnified Person”) harmless (to the fullest extent permitted by law) from
and against any and all claims, demands, suits, actions, investigations,
proceedings, liabilities, fines, costs, penalties, and damages, and all
reasonable fees and disbursements of attorneys, experts, or consultants and all
other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution and delivery (provided that Borrowers
shall not be liable for costs and expenses (including attorneys fees) of any
Lender (other than WFCF) incurred in advising, structuring, drafting, reviewing,
administering or syndicating the Loan Documents), enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Parent’s and its
Subsidiaries’ compliance with the terms of the Loan Documents (provided,

42

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

however, that the indemnification in this clause (a) shall not extend to (i)
disputes solely between or among the Lenders or (ii) disputes solely between or
among the Lenders and their respective Affiliates; it being understood and
agreed that the indemnification in this clause (a) shall extend to Agent (but
not the Lenders) relative to disputes between or among Agent on the one hand,
and one or more Lenders, or one or more of their Affiliates, on the other hand,
or (iii) any Taxes or any costs attributable to Taxes, which shall be governed
by Section 16, and Excluded Taxes or any costs attributable to Excluded Taxes),
(b) with respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event, or circumstance in any manner related
thereto, and (c) in connection with or arising out of any presence or release of
Hazardous Materials at, on, under, to or from any assets or properties owned,
leased or operated by Parent or any of its Subsidiaries or any Environmental
Actions, Environmental Liabilities or Remedial Actions related in any way to any
such assets or properties Parent or any of its Subsidiaries (each and all of the
foregoing, the “Indemnified Liabilities”). The foregoing to the contrary
notwithstanding, neither Parent nor any Borrower shall have any obligation to
any Indemnified Person under this Section 10.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person or its officers, directors, employees, attorneys, or agents. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which any
Borrower was required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.
 
11.
NOTICES.

Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as a party may
designate in accordance herewith), or telefacsimile. In the case of notices or
demands to Loan Parties or Agent, as the case may be, they shall be sent to the
respective address set forth below:

43

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

If to Loan Parties:
SILICON GRAPHICS INTERNATIONAL CORP.
 
46600 Landing Parkway
 
Fremont, California 94538
 
Attn: General Counsel
With copies to: Chief Accounting Officer, Treasurer
 
Fax No. 408.904.6111
 
 
If to Agent:
WELLS FARGO CAPITAL FINANCE, LLC
 
2450 Colorado Avenue, Suite 3000 West 
 
Santa Monica, California 90404
 
Attn: Business Finance Division Manager
 
Fax No.: 310.453.7413
 
 
with copies to:
BUCHALTER NEMER
 
1000 Wilshire Boulevard, 15th Floor
 
Los Angeles, California 90017
 
Attn: Robert J. Davidson, Esq.
 
Fax No.: 213.630.5692

Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt or 3 Business Days
after the deposit thereof in the mail; provided, that (a) notices sent by
overnight courier service shall be deemed to have been given when received, (b)
notices by facsimile shall be deemed to have been given when sent (except that,
if not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next Business Day for the
recipient) and (c) notices by electronic mail shall be deemed received upon the
sender's receipt of an acknowledgment from the intended recipient (such as by
the "return receipt requested" function, as available, return email or other
written acknowledgment).
 
12.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a)    THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA.
(b)    THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS
LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY

44

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

BE FOUND. Each BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).
(c)    TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER AND EACH
MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. each BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
(d)    EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
LOS ANGELES AND THE STATE OF CALIFORNIA, IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT
AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.

13.
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

 
13.1    Assignments and Participations.
(a)    With the prior written consent of Administrative Borrower (which consent
of Administrative Borrower (x) shall not be unreasonably withheld, delayed or
conditioned, (y) shall not be required (1) if an Event of Default has occurred
and is continuing, or (2) in connection with an assignment to a Person that is a
Lender or an Affiliate (other than individuals) of a Lender, and (z) shall be
deemed to have given unless Administrative Borrower provides written notice to
Agent of its objection to such proposed assignment within 5 Business Days after
having received notice thereof), and with the prior written consent of Agent,
which consent of Agent shall not be unreasonably withheld, delayed or
conditioned, and shall not be required in connection with an assignment to a
Person that is a Lender or an Affiliate (other than individuals) of a Lender,
any Lender may assign and delegate to one or more assignees (each, an
“Assignee”; provided, however, that no Loan Party, person that bears a
relationship to any Borrower described in Section 108(e)(4) of the IRC, or
Affiliate of a Loan Party shall be permitted to become an Assignee) all or any
portion of the Obligations, the Commitments and the other rights and obligations
of such Lender hereunder and under the other Loan Documents, in a minimum amount
(unless waived by Agent) of $5,000,000 (except such minimum amount shall not
apply to (x) an assignment or delegation by any Lender to any other Lender or

45

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

an Affiliate of any Lender or (y) a group of new Lenders, each of which is an
Affiliate of each other or a Related Fund of such new Lender to the extent that
the aggregate amount to be assigned to all such new Lenders is at least
$5,000,000); provided, however, that Borrowers and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower and Agent by such Lender
and the Assignee, (ii) such Lender and its Assignee have delivered to
Administrative Borrower and Agent an Assignment and Acceptance and Agent has
notified the assigning Lender of its receipt thereof in accordance with Section
13.1(b), and (iii) unless waived by Agent, the assigning Lender or Assignee has
paid to Agent for Agent’s separate account a processing fee in the amount of
$3,500.
(b)    From and after the date that Agent notifies the assigning Lender (with a
copy to Borrowers) that it has received an executed Assignment and Acceptance
and, if applicable, payment of the required processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall be a “Lender” and shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assigning Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 10.3) and be released from any future
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto); provided, however, that nothing
contained herein shall release any assigning Lender from obligations that
survive the termination of this Agreement, including such assigning Lender’s
obligations under Section 15 and Section 17.9(a).
(c)    By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(iv) such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement, (v) such
Assignee appoints and authorizes Agent to take such actions and to exercise such
powers under this Agreement and the other Loan Documents as are delegated to
Agent, by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto, and (vi) such Assignee agrees that it will
perform all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d)    Immediately upon Agent’s receipt of the required processing fee, if
applicable, and delivery of notice to the assigning Lender pursuant to Section
13.1(b), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee

46

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

shall reduce such Commitments of the assigning Lender pro tanto.
(e)    Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons (a “Participant”) participating
interests in all or any portion of its Obligations, its Commitment, and the
other rights and interests of that Lender (the “Originating Lender”) hereunder
and under the other Loan Documents; provided, however, that (i) the Originating
Lender shall remain a “Lender” for all purposes of this Agreement and the other
Loan Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) decreases the amount or postpones the due
dates of scheduled principal repayments or prepayments or premiums payable to
such Participant through such Lender, (v) all amounts payable by Borrowers
hereunder shall be determined as if such Lender had not sold such participation,
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, and (vi) without the
prior written consent of Administrative Borrower, no participation shall be sold
to a prospective participant that bears a relationship to any of the Borrowers
that is described in Section 108(e)(4) of the IRC. The rights of any Participant
only shall be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any rights under this
Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Loan Parties, the Collections of Loan Parties or their
Subsidiaries, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves. Each Lender that sells a
participation, acting solely for this purpose as a non-fiduciary agent of the
Borrowers, shall maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under this Agreement
(the “Participant Register”); provided that no Lender shall have any obligation
to disclose all or any portion of the Participant Register except to the extent
that such disclosure is necessary to establish that any obligations under this
Agreement are in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive, and such Lender, each Loan Party and Agent shall treat each person
whose name is recorded in the Participant Register pursuant to the terms hereof
as the owner of such participation for all purposes of this Agreement,
notwithstanding notice to the contrary.
(f)    In connection with any such assignment or participation or proposed
assignment or participation or any grant of a security interest in, or pledge
of, its rights under and interest in this Agreement, a Lender may, subject to
the provisions of Section 17.9, disclose all documents and information which it

47

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

now or hereafter may have relating to Parent and its Subsidiaries and their
respective businesses.
(g)    Any other provision in this Agreement notwithstanding, any Lender may at
any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement in favor of any Federal Reserve Bank
in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under applicable law.
 
13.2    Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that no Borrower may assign this Agreement or any rights or duties hereunder
without the Lenders’ prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 and, except as expressly required pursuant to Section
13.1, no consent or approval by any Borrower is required in connection with any
such assignment.
 
14.
AMENDMENTS; WAIVERS.

 
14.1    Amendments and Waivers.
(a)    No amendment, waiver or other modification of any provision of this
Agreement or any other Loan Document (other than Bank Product Agreements or the
Fee Letter), and no consent with respect to any departure by Parent or any Loan
Party therefrom, shall be effective unless the same shall be in writing and
signed by the Required Lenders (or by Agent at the written request of the
Required Lenders) and the Loan Parties that are party thereto and then any such
waiver or consent shall be effective, but only in the specific instance and for
the specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all of the Lenders
directly affected thereby and all of the Loan Parties that are party thereto, do
any of the following:
(i)    increase the amount of or extend the expiration date of any Commitment of
any Lender or amend, modify, or eliminate the last sentence of Section
2.4(c)(i),
(ii)    postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
(iii)    reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except (y) in connection with the
waiver of applicability of Section 2.6(c) (which waiver shall be effective with
the written consent of the Required Lenders), and (z) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or a reduction of fees
for purposes of this clause (iii)),
(iv)    amend, modify, or eliminate this Section or any provision of this
Agreement providing for consent or other action by all Lenders,
(v)    amend, modify, or eliminate Section 15.11,
(vi)    other than as permitted by Section 15.11, release Agent’s Lien in and to
any

48

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

of the Collateral,
(vii)    amend, modify, or eliminate the definition of “Required Lenders” or
“Pro Rata Share”,
(viii)    contractually subordinate any of Agent’s Liens,
(ix)    other than in connection with a merger, liquidation, dissolution or sale
of such Person expressly permitted by the terms hereof or the other Loan
Documents, release any Borrower or any Guarantor from any obligation for the
payment of money or consent to the assignment or transfer by any Borrower or any
Guarantor of any of its rights or duties under this Agreement or the other Loan
Documents,
(x)    amend, modify, or eliminate any of the provisions of Section 2.4(b)(i) or
(ii),
(xi)    amend, modify, or eliminate any of the provisions of Section 13.1(a) to
permit a Loan Party or an Affiliate of a Loan Party to be permitted to become an
Assignee, or
(xii)    amend, modify, or eliminate the definition of Borrowing Base or any of
the defined terms (including the definitions of Eligible Accounts and Eligible
Inventory) that are used in such definition to the extent that any such change
results in more credit being made available to Borrowers based upon the
Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount
or change Section 2.1(c).
(b)    No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive (i) the definition of, or any of the terms or provisions of,
the Fee Letter, without the written consent of Agent and Borrowers (and shall
not require the written consent of any of the Lenders), and (ii) any provision
of Section 15 pertaining to Agent, or any other rights or duties of Agent under
this Agreement or the other Loan Documents, without the written consent of
Agent, Borrowers, and the Required Lenders,
(c)    No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to Issuing Lender, or any other rights or duties of Issuing Lender
under this Agreement or the other Loan Documents, without the written consent of
Issuing Lender, Agent, Borrowers, and the Required Lenders,
(d)    No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to Swing Lender, or any other rights or duties of Swing Lender under
this Agreement or the other Loan Documents, without the written consent of Swing
Lender, Agent, Borrowers, and the Required Lenders,
(e)    Anything in this Section 14.1 to the contrary notwithstanding, (i) any
amendment, modification, elimination, waiver, consent, termination, or release
of, or with respect to, any provision of this Agreement or any other Loan
Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of any Loan
Party, shall not require consent by or the agreement of any Loan Party, and (ii)
any amendment, waiver, modification, elimination, or consent of or with respect
to any provision of this Agreement or any other Loan Document may be entered
into without the consent of, or over the objection of, any Defaulting Lender
other than any of the matters governed by Section 14.1(a)(i) through (iii).
 

49

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

14.2    Replacement of Certain Lenders.
(a)    If (i) any action to be taken by the Lender Group or Agent hereunder
requires the consent, authorization, or agreement of all Lenders or all Lenders
affected thereby and if such action has received the consent, authorization, or
agreement of the Required Lenders but not of all Lenders or all Lenders affected
thereby, or (ii) any Lender makes a claim for compensation under Section 16,
then Borrowers or Agent, upon at least 5 Business Days prior irrevocable notice,
may permanently replace any Lender that failed to give its consent,
authorization, or agreement (a “Holdout Lender”) or any Lender that made a claim
for compensation (a “Tax Lender”) with one or more Replacement Lenders, and the
Holdout Lender or Tax Lender, as applicable, shall have no right to refuse to be
replaced hereunder. Such notice to replace the Holdout Lender or Tax Lender, as
applicable, shall specify an effective date for such replacement, which date
shall not be later than 15 Business Days after the date such notice is given.
(b)    Prior to the effective date of such replacement, the Holdout Lender or
Tax Lender, as applicable, and each Replacement Lender shall execute and deliver
an Assignment and Acceptance, subject only to the Holdout Lender or Tax Lender,
as applicable, being repaid in full its share of the outstanding Obligations
(without any premium or penalty of any kind whatsoever, but including (i) all
interest, fees and other amounts that may be due in payable in respect thereof,
and (ii) an assumption of its Pro Rata Share of the Letters of Credit). If the
Holdout Lender or Tax Lender, as applicable, shall refuse or fail to execute and
deliver any such Assignment and Acceptance prior to the effective date of such
replacement, Agent may, but shall not be required to, execute and deliver such
Assignment and Acceptance in the name or and on behalf of the Holdout Lender or
Tax Lender, as applicable, and irrespective of whether Agent executes and
delivers such Assignment and Acceptance, the Holdout Lender or Tax Lender, as
applicable, shall be deemed to have executed and delivered such Assignment and
Acceptance. The replacement of any Holdout Lender or Tax Lender, as applicable,
shall be made in accordance with the terms of Section 13.1. Until such time as
one or more Replacement Lenders shall have acquired all of the Obligations, the
Commitments, and the other rights and obligations of the Holdout Lender or Tax
Lender, as applicable, hereunder and under the other Loan Documents, the Holdout
Lender or Tax Lender, as applicable, shall remain obligated to make the Holdout
Lender’s or Tax Lender’s, as applicable, Pro Rata Share of Advances and to
purchase a participation in each Letter of Credit, in an amount equal to its Pro
Rata Share of such Letters of Credit.
 
14.3    No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by each Borrower of any
provision of this Agreement. Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
 
15.
AGENT; THE LENDER GROUP.

 
15.1    Appointment and Authorization of Agent. Each Lender hereby designates
and appoints WFCF as its agent under this Agreement and the other Loan Documents
and each Lender hereby irrevocably authorizes (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to designate,
appoint, and authorize) Agent to execute and deliver each of the other Loan
Documents on its behalf and to take such other action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to Agent by the terms
of this Agreement or any other Loan Document, together with such powers as are
reasonably incidental

50

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

thereto. Agent agrees to act as agent for and on behalf of the Lenders (and the
Bank Product Providers) on the conditions contained in this Section 15. Any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Loan
Documents, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender (or Bank Product Provider), and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent. Without
limiting the generality of the foregoing, the use of the term “agent” in this
Agreement or the other Loan Documents with reference to Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only a
representative relationship between independent contracting parties. Each Lender
hereby further authorizes (and by entering into a Bank Product Agreement, each
Bank Product Provider shall be deemed to authorize) Agent to act as the secured
party under each of the Loan Documents that create a Lien on any item of
Collateral. Except as expressly otherwise provided in this Agreement, Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections of Parent and its Subsidiaries, and related matters, (b) execute
or file any and all financing or similar statements or notices, amendments,
renewals, supplements, documents, instruments, proofs of claim, notices and
other written agreements with respect to the Loan Documents, (c) make Advances,
for itself or on behalf of Lenders, as provided in the Loan Documents, (d)
exclusively receive, apply, and distribute the Collections of Parent and its
Subsidiaries as provided in the Loan Documents, (e) open and maintain such bank
accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections of Parent and its
Subsidiaries, (f) perform, exercise, and enforce any and all other rights and
remedies of the Lender Group with respect to Parent and its Subsidiaries, the
Obligations, the Collateral, the Collections of Parent and its Subsidiaries, or
otherwise related to any of same as provided in the Loan Documents, and (g)
incur and pay such Lender Group Expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers
pursuant to the Loan Documents.
 
15.2    Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
 
15.3    Liability of Agent. None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders (or Bank Product
Providers) for any recital, statement, representation or warranty made by Parent
or any of its Subsidiaries or Affiliates, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Parent or its Subsidiaries

51

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

or any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lenders
(or Bank Product Providers) to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or
properties of Parent or its Subsidiaries.
 
15.4    Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrowers or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders (and, if it so elects, the Bank Product Providers)
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Required
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders (and Bank Product Providers).
 
15.5    Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or any Borrower referring
to this Agreement, describing such Default or Event of Default, and stating that
such notice is a “notice of default.” Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which Agent has
actual knowledge. If any Lender obtains actual knowledge of any Event of
Default, such Lender promptly shall notify the other Lenders and Agent of such
Event of Default. Each Lender shall be solely responsible for giving any notices
to its Participants, if any. Subject to Section 15.4, Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Required Lenders in accordance with Section 9; provided, however, that
unless and until Agent has received any such request, Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.
 
15.6    Credit Decision. Each Lender (and Bank Product Provider) acknowledges
that none of the Agent-Related Persons has made any representation or warranty
to it, and that no act by Agent hereinafter taken, including any review of the
affairs of Parent and its Subsidiaries or Affiliates, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender (or Bank Product Provider). Each Lender represents (and by entering into
a Bank Product Agreement, each Bank Product Provider shall be deemed to
represent) to Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such due diligence, documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition and
creditworthiness of any Borrower or any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers. Each Lender also represents (and by entering into
a Bank Product Agreement, each Bank Product Provider shall be deemed

52

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

to represent) that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of any Borrower or any other Person
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender (or Bank Product
Provider) with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any Borrower or any other Person party to a Loan Document
that may come into the possession of any of the Agent-Related Persons. Each
Lender acknowledges (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to acknowledge) that Agent does not have any
duty or responsibility, either initially or on a continuing basis (except to the
extent, if any, that is expressly specified herein) to provide such Lender (or
Bank Product Provider) with any credit or other information with respect to any
Borrower, its Affiliates or any of their respective business, legal, financial
or other affairs, and irrespective of whether such information came into Agent's
or its Affiliates’ or representatives’ possession before or after the date on
which such Lender became a party to this Agreement (or such Bank Product
Provider entered into a Bank Product Agreement).
 
15.7    Costs and Expenses; Indemnification. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the performance and fulfillment of its functions, powers, and obligations
pursuant to the Loan Documents, including court costs, attorneys fees and
expenses, fees and expenses of financial accountants, advisors, consultants, and
appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to this Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
the Collections of Parent and its Subsidiaries received by Agent to reimburse
Agent for such out-of-pocket costs and expenses prior to the distribution of any
amounts to Lenders (or Bank Product Providers). In the event Agent is not
reimbursed for such costs and expenses by Parent or its Subsidiaries, each
Lender hereby agrees that it is and shall be obligated to pay to Agent such
Lender’s ratable thereof. Whether or not the transactions contemplated hereby
are consummated, each of the Lenders, on a ratable basis, shall indemnify and
defend the Agent-Related Persons (to the extent not reimbursed by or on behalf
of Borrowers and without limiting the obligation of Borrowers to do so) from and
against any and all Indemnified Liabilities; provided, however, that no Lender
shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities resulting solely from such Person’s gross
negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make an Advance or other
extension of credit hereunder. Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for such Lender’s ratable share of any costs
or out of pocket expenses (including attorneys, accountants, advisors, and
consultants fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Loan Document to the extent that Agent is not reimbursed for such
expenses by or on behalf of Borrowers. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of Agent.
 
15.8    Agent in Individual Capacity. WFCF and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, provide Bank
Products to, acquire equity interests in, and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with Parent

53

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

and its Subsidiaries and Affiliates and any other Person party to any Loan
Document as though WFCF were not Agent hereunder, and, in each case, without
notice to or consent of the other members of the Lender Group. The other members
of the Lender Group acknowledge (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to acknowledge) that, pursuant to
such activities, WFCF or its Affiliates may receive information regarding Parent
or its Subsidiaries and their Affiliates or any other Person party to any Loan
Documents that is subject to confidentiality obligations in favor of Parent or
such other Person and that prohibit the disclosure of such information to the
Lenders (or Bank Product Providers), and the Lenders acknowledge (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to acknowledge) that, in such circumstances (and in the absence of a
waiver of such confidentiality obligations, which waiver Agent will use its
reasonable best efforts to obtain), Agent shall not be under any obligation to
provide such information to them. The terms “Lender” and “Lenders” include WFCF
in its individual capacity.
 
15.9    Successor Agent. Agent may resign as Agent upon 30 days prior written
notice to the Lenders (unless such notice is waived by the Required Lenders) and
Administrative Borrower (unless such notice is waived by Borrowers) and without
any notice to the Bank Product Providers. If Agent resigns under this Agreement,
the Required Lenders shall be entitled, with (so long as no Event of Default has
occurred and is continuing) the consent of Administrative Borrower (such consent
not to be unreasonably withheld, delayed, or conditioned), appoint a successor
Agent for the Lenders (and the Bank Product Providers). If, at the time that
Agent’s resignation is effective, it is acting as the Issuing Lender or the
Swing Lender, such resignation shall also operate to effectuate its resignation
as the Issuing Lender or the Swing Lender, as applicable, and it shall
automatically be relieved of any further obligation to issue Letters of Credit,
to cause the Underlying Issuer to issue Letters of Credit, or to make Swing
Loans. If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with the Lenders and
Administrative Borrower, a successor Agent. If Agent has materially breached or
failed to perform any material provision of this Agreement or of applicable law,
the Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders with (so long as no Event of Default has
occurred and is continuing) the consent of Borrowers (such consent not to be
unreasonably withheld, delayed, or conditioned). In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term “Agent” shall mean such successor Agent and the retiring Agent’s
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent’s resignation hereunder as Agent, the provisions of this Section 15 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 30 days following a retiring Agent’s
notice of resignation, the retiring Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
 
15.10    Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, provide Bank Products to, acquire equity interests in and generally engage
in any kind of banking, trust, financial advisory, underwriting, or other
business with Parent and its Subsidiaries and Affiliates and any other Person
party to any Loan Documents as though such Lender were not a Lender hereunder
without notice to or consent of the other members of the Lender Group (or the
Bank Product Providers). The other members of the Lender Group acknowledge (and
by entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to acknowledge) that, pursuant to such activities, such Lender and its
respective Affiliates may receive information regarding Parent or its
Subsidiaries and Affiliates or any other Person party to any Loan Documents that
is subject to confidentiality obligations in favor of Parent or such other
Person and that prohibit the disclosure of such information to the Lenders, and
the Lenders acknowledge (and by entering

54

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

into a Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them.
 
15.11    Collateral Matters.
(a)    The Lenders hereby irrevocably authorize (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to authorize)
Agent to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrowers of all of the
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Borrowers certify to
Agent that the sale or disposition is permitted under Section 6.4 (and Agent may
rely conclusively on any such certificate, without further inquiry), (iii)
constituting property in which neither Parent nor any Loan Party owned any
interest at the time Agent’s Lien was granted or at any time thereafter, or
(iv) constituting property leased to Parent or its Subsidiaries under a lease
that has expired or is terminated in a transaction permitted under this
Agreement. The Loan Parties and the Lenders hereby irrevocably authorize (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to authorize) Agent, based upon the instruction of the Required Lenders,
to (a) consent to, credit bid, or purchase (either directly or through one or
more acquisition vehicles) all or any portion of the Collateral at any sale
thereof conducted under the provisions of the Bankruptcy Code, including under
Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly
or through one or more acquisition vehicles) all or any portion of the
Collateral at any sale or other disposition thereof conducted under the
provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the
Code, or (c) credit bid or purchase (either directly or through one or more
acquisition vehicles) all or any portion of the Collateral at any other sale or
foreclosure conducted by Agent (whether by judicial action or otherwise) in
accordance with applicable law. In connection with any such credit bid or
purchase, the Obligations owned to the Lenders and the Bank Product Providers
shall be entitled to be, and shall be, credit bid on a ratable basis (with
Obligations with respect to contingent or unliquidated claims being estimated
for such purpose if the fixing or liquidation thereof would not unduly delay the
ability of Agent to credit bid or purchase at such sale or other disposition of
the Collateral and, if such claims cannot be estimated, without unduly delaying
the ability of Agent to credit bid, then such claims shall be disregarded, not
credit bid, and not entitled to any interest in the asset or assets purchased by
means of such credit bid) and the Lenders and the Bank Product Providers whose
Obligations are credit bid shall be entitled to receive interests (ratably based
upon the proportion of their Obligations credit bid in relating to the aggregate
amount of Obligations so credit bid) in the asset or assets so purchased (or in
the Stock of the acquisition vehicle or vehicles that are used to consummate
such purchase). Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders (without requiring the authorization of the Bank Product Providers), or
(z) otherwise, the Required Lenders (without requiring the authorization of the
Bank Product Providers). Upon request by Agent or any Borrower at any time, the
Lenders will (and if so requested, the Bank Product Providers will) confirm in
writing Agent’s authority to release any such Liens on particular types or items
of Collateral pursuant to this Section 15.11; provided, however, that (1) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent’s opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of any Borrower in respect
of) all interests retained by any Borrower, including, the proceeds of any sale,
all of which shall continue to constitute part of the Collateral. The Lenders
further hereby irrevocably authorize (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to

55

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

authorize) Agent, at its option and in its sole discretion, to subordinate any
Lien granted to or held by Agent under any Loan Document to the holder of any
Permitted Lien on such property if such Permitted Lien secures Permitted
Purchase Money Indebtedness.
(b)    Agent shall have no obligation whatsoever to any of the Lenders (or the
Bank Product Providers) to assure that the Collateral exists or is owned by a
Loan Party or is cared for, protected, or insured or has been encumbered, or
that Agent’s Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority, or
that any particular items of Collateral meet the eligibility criteria applicable
in respect thereof or whether to impose, maintain, reduce, or eliminate any
particular reserve hereunder or whether the amount of any such reserve is
appropriate or not, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Agent pursuant to any of
the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the terms
and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent’s own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender (or Bank Product Provider) as to any of the
foregoing, except as otherwise provided herein.
 
15.12    Restrictions on Actions by Lenders; Sharing of Payments.
(a)    Each of the Lenders agrees that it shall not, without the express written
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the written request of Agent, set off against the Obligations, any
amounts owing by such Lender to Parent or its Subsidiaries or any deposit
accounts of Parent or its Subsidiaries now or hereafter maintained with such
Lender. Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by Agent, take or cause to be taken
any action, including, the commencement of any legal or equitable proceedings to
enforce any Loan Document against any Borrower or any Guarantor or to foreclose
any Lien on, or otherwise enforce any security interest in, any of the
Collateral.
(b)    If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
 
15.13    Agency for Perfection. Agent hereby appoints each other Lender (and
each Bank Product Provider) as its agent (and each Lender hereby accepts (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to accept) such appointment) for the purpose of perfecting Agent’s Liens
in assets which, in accordance with Article 8 or Article 9, as applicable, of
the Code can be perfected by possession or control. Should any Lender obtain
possession or control of any such Collateral,

56

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

such Lender shall notify Agent thereof, and, promptly upon Agent’s request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.
 
15.14    Payments by Agent to the Lenders. All payments to be made by Agent to
the Lenders (or Bank Product Providers) shall be made by bank wire transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, fees, or interest of the Obligations.
 
15.15    Concerning the Collateral and Related Loan Documents. Each member of
the Lender Group authorizes and directs Agent to enter into this Agreement and
the other Loan Documents. Each member of the Lender Group agrees (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to agree) that any action taken by Agent in accordance with the terms of
this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such
other powers that are reasonably incidental thereto, shall be binding upon all
of the Lenders (and such Bank Product Provider).
 
15.16    Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By becoming a party to this Agreement,
each Lender:
(a)    is deemed to have requested that Agent furnish such Lender, promptly
after it becomes available, a copy of each field audit or examination report
respecting Parent or its Subsidiaries (each, a “Report”) prepared by or at the
request of Agent, and Agent shall so furnish each Lender with such Reports,
(b)    expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,
(c)    expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any audit or
examination will inspect only specific information regarding Parent and its
Subsidiaries and will rely significantly upon Parent’s and its Subsidiaries’
books and records, as well as on representations of each such Person’s
personnel,
(d)    agrees to keep all Reports and other material, non-public information
regarding Parent and its Subsidiaries and their operations, assets, and existing
and contemplated business plans in a confidential manner in accordance with
Section 17.9, and
(e)    without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent

57

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

provide to such Lender a copy of any report or document provided by Parent or
any of its Subsidiaries to Agent that has not been contemporaneously provided by
Parent or its Subsidiaries to such Lender, and, upon receipt of such request,
Agent promptly shall provide a copy of same to such Lender, (y) to the extent
that Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Parent or its Subsidiaries, any Lender
may, from time to time, reasonably request Agent to exercise such right as
specified in such Lender’s notice to Agent, whereupon Agent promptly shall
request of such Borrower the additional reports or information reasonably
specified by such Lender, and, upon receipt thereof from Parent or its
Subsidiaries, Agent promptly shall provide a copy of same to such Lender, and
(z) any time that Agent renders to any Borrower a statement regarding the Loan
Account, Agent shall send a copy of such statement to each Lender.
 
15.17    Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 15.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to any Borrower or any other Person for any failure by any other
Lender (or Bank Product Provider) to fulfill its obligations to make credit
available hereunder, nor to advance for such Lender (or Bank Product Provider)
or on its behalf, nor to take any other action on behalf of such Lender (or Bank
Product Provider) hereunder or in connection with the financing contemplated
herein.
 
16.
WITHHOLDING TAXES.

(a)    All payments made by any Borrower hereunder or under any note or other
Loan Document will be made without setoff, counterclaim, or other defense. In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any Taxes, and in the event any deduction or
withholding of Taxes is required, Borrowers shall comply with the next sentence
of this Section 16(a). If any Taxes are so levied or imposed, Borrowers agree to
pay the full amount of such Taxes and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement, any
note, or Loan Document, including any amount paid pursuant to this Section 16(a)
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein; provided, however, that Borrowers shall not
be required to increase any such amounts if the increase in such amount payable
results from Agent’s or such Lender’s own willful misconduct or gross negligence
(as finally determined by a court of competent jurisdiction). Borrowers will
furnish to Agent as promptly as possible after the date the payment of any Tax
is due pursuant to applicable law, certified copies of tax receipts or other
documentation reasonably satisfactory to Agent evidencing such payment by
Borrowers.
(b)    Borrowers agree to pay any present or future stamp, value added or
documentary taxes or any other excise or property taxes, charges, or similar
levies that arise from any payment made hereunder or from the execution,
delivery, performance, recordation, or filing of, or otherwise with respect to
this Agreement or any other Loan Document.
(c)    If a Lender or Participant is entitled to claim an exemption or reduction
from United

58

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

States withholding tax, such Lender or Participant agrees with and in favor of
Borrowers and Agent, to deliver to Administrative Borrower and Agent one of the
following (in each case, originally signed) before receiving its first payment
under this Agreement:
(i)    if such Lender or Participant is entitled to claim an exemption from
United States withholding tax pursuant to the portfolio interest exception, (A)
a statement of the Lender or Participant, signed under penalty of perjury, that
it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a
10% shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of
the IRC), or (III) a controlled foreign corporation related to any Borrower
within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed
and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);
(ii)    if such Lender or Participant is entitled to claim an exemption from, or
a reduction of, withholding tax under a United States tax treaty, a properly
completed and executed copy of IRS Form W-8BEN claiming such treaty benefit;
(iii)    if such Lender or Participant is entitled to claim that interest paid
under this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Lender, a
properly completed and executed copy of IRS Form W-8ECI;
(iv)    if such Lender or Participant is entitled to claim that interest paid
under this Agreement is exempt from United States withholding tax because such
Lender or Participant serves as an intermediary, a properly completed and
executed copy of IRS Form W-8IMY (with proper attachments); or
(v)    a properly completed and executed copy of any other form or forms,
including IRS Form W-9 (for the avoidance of doubt, each Lender or Participant
that is a “U.S. Person” as defined in the IRC shall deliver IRS Form W-9 to the
Administrative Borrower and Agent), as may be required under the IRC or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding or backup withholding tax.
Each Lender or Participant shall provide new forms (or successor forms) upon the
expiration or obsolescence of any previously delivered forms and to promptly
notify Administrative Borrower and Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction. Each Lender
on or prior to the date on which such Lender becomes a Lender hereunder, and
each Participant on or prior to the date on which such Participant acquires a
participation hereunder, and in each case, from time to time thereafter, either
upon the request of Administrative Borrower or Agent or upon the expiration or
obsolescence of any previously delivered documentation, shall furnish to
Administrative Borrower and Agent any documentation that is required under FATCA
to enable Borrowers or Agent to determine and execute its obligations, duties
and liabilities with respect to FATCA, including but not limited to any taxes it
may be required to withhold in respect of FATCA.
(d)    If a Lender or Participant claims an exemption from withholding tax in a
jurisdiction other than the United States, such Lender or such Participant
agrees with and in favor of Administrative Borrower and Agent, to deliver to
Administrative Borrower and Agent any such form or forms, as may be required
under the laws of such jurisdiction as a condition to exemption from, or
reduction of, foreign withholding or backup withholding tax before receiving its
first payment under this Agreement, but only if such Lender or such Participant
is legally able to deliver such forms, provided, however, that nothing in this
Section 16(d) shall require a Lender or Participant to disclose any information
that it deems to be confidential

59

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

(including without limitation, its tax returns). Each Lender and each
Participant shall provide new forms (or successor forms) upon the expiration or
obsolescence of any previously delivered forms and to promptly notify
Administrative Borrower and Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction.
(e)    If a Lender or Participant claims exemption from, or reduction of,
withholding tax and such Lender or Participant sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
Borrowers to such Lender or Participant, such Lender or Participant agrees to
notify Administrative Borrower and Agent of the percentage amount in which it is
no longer the beneficial owner of Obligations of Borrowers to such Lender or
Participant. To the extent of such percentage amount, Administrative Borrower
and Agent will treat such Lender’s or such Participant’s documentation provided
pursuant to Section 16(c) or 16(d) as no longer valid. With respect to such
percentage amount, such Participant or Assignee shall provide new documentation,
pursuant to Section 16(c) or 16(d), if applicable. Each Borrower agrees that
each Participant shall be entitled to the benefits of this Section 16 with
respect to its participation in any portion of the Commitments and the
Obligations so long as such Participant complies with the obligations set forth
in this Section 16 with respect thereto.
(f)    If a Lender or a Participant is entitled to a reduction in the applicable
withholding tax, Administrative Borrower and Agent (or, in the case of a
Participant, to the Lender granting the participation) may withhold from any
interest payment to such Lender or such Participant an amount equivalent to the
applicable withholding tax after taking into account such reduction. If the
forms or other documentation required by Section 16(c) or 16(d) are not
delivered to Administrative Borrower and Agent, then Administrative Borrower and
Agent may withhold from any interest payment to such Lender or such Participant
not providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
(g)    If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that Administrative Borrower and Agent did
not properly withhold tax from amounts paid to or for the account of any Lender
or any Participant due to a failure on the part of the Lender or any Participant
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Borrowers or Agent (or such Participant
failed to notify the Lender granting the participation) of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify and hold
Borrowers or Agent harmless (or, in the case of a Participant, such Participant
shall indemnify and hold the Lender granting the participation harmless) for all
amounts paid, directly or indirectly, by Borrowers or Agent (or, in the case of
a Participant, to the Lender granting the participation), as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to Borrowers or Agent (or, in the case of a
Participant, to the Lender granting the participation only) under this Section
16, together with all costs and expenses (including attorneys fees and
expenses). The obligation of the Lenders and the Participants under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Agent.
(h)    If Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Taxes as to which it has been indemnified by Borrowers
or with respect to which Borrowers have paid additional amounts pursuant to this
Section 16, so long as no Default or Event of Default has occurred and is
continuing, it shall pay over such refund to Borrowers (but only to the extent
of payments made, or additional amounts paid, by Borrowers under this Section 16
with respect to Taxes giving rise to such a refund), net of all out-of-pocket
expenses of Agent or such Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such a refund);
provided, that Borrowers, upon the request of Agent or such Lender, agree to
repay the amount paid over to Borrowers (plus any

60

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

penalties, interest or other charges, imposed by the relevant Governmental
Authority, other than such penalties, interest or other charges imposed as a
result of the willful misconduct or gross negligence of Agent hereunder) to
Agent or such Lender in the event Agent or such Lender is required to repay such
refund to such Governmental Authority. Notwithstanding anything in this
Agreement to the contrary, this Section 16 shall not be construed to require
Agent or any Lender to make available its tax returns (or any other information
which it deems confidential) to any Borrower or any other Person.
 
17.
GENERAL PROVISIONS.

 
17.1    Effectiveness. This Agreement shall be binding and deemed effective when
executed by Parent, each Borrower, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
 
17.2    Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
 
17.3    Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lender Group or Parent or any Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
 
17.4    Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
 
17.5    Bank Product Providers. Each Bank Product Provider shall be deemed a
third party beneficiary hereof and of the provisions of the other Loan Documents
for purposes of any reference in a Loan Document to the parties for whom Agent
is acting. Agent hereby agrees to act as agent for such Bank Product Providers
and, by virtue of entering into a Bank Product Agreement, the applicable Bank
Product Provider shall be automatically deemed to have appointed Agent as its
agent and to have accepted the benefits of the Loan Documents; it being
understood and agreed that the rights and benefits of each Bank Product Provider
under the Loan Documents consist exclusively of such Bank Product Provider’s
being a beneficiary of the Liens and security interests (and, if applicable,
guarantees) granted to Agent and the right to share in payments and collections
out of the Collateral as more fully set forth herein. In addition, each Bank
Product Provider, by virtue of entering into a Bank Product Agreement, shall be
automatically deemed to have agreed that Agent shall have the right, but shall
have no obligation, to establish, maintain, relax, or release reserves in
respect of the Bank Product Obligations and that if reserves are established
there is no obligation on the part of Agent to determine or insure whether the
amount of any such reserve is appropriate or not. In connection with any such
distribution of payments or proceeds of Collateral, Agent shall be entitled to
assume no amounts are due or owing to any Bank Product Provider unless such Bank
Product Provider has provided a written certification (setting forth a
reasonably detailed calculation) to Agent as to the amounts that are due and
owing to it and such written certification is received by Agent a reasonable
period of time prior to the making of such distribution. Agent shall have no
obligation to calculate the amount due and payable with respect to any Bank
Products, but may rely upon the written certification of the amount due and
payable from the relevant Bank Product Provider. In the absence of an updated
certification, Agent shall be entitled to assume that the amount due and payable
to the relevant Bank Product Provider is the amount last certified to Agent by
such Bank Product Provider as being due and payable (less any distributions made
to such Bank Product Provider on account thereof). Any Borrower may obtain Bank
Products from any Bank Product

61

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

Provider, although no Borrower is required to do so. Each Borrower acknowledges
and agrees that no Bank Product Provider has committed to provide any Bank
Products and that the providing of Bank Products by any Bank Product Provider is
in the sole and absolute discretion of such Bank Product Provider.
Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no provider or holder of any Bank Product shall have any voting or
approval rights hereunder (or be deemed a Lender) solely by virtue of its status
as the provider or holder of such agreements or products or the Obligations
owing thereunder, nor shall the consent of any such provider or holder be
required (other than in their capacities as Lenders, to the extent applicable)
for any matter hereunder or under any of the other Loan Documents, including as
to any matter relating to the Collateral or the release of Collateral or
Guarantors. 
 
17.6    Debtor-Creditor Relationship. The relationship between the Lenders and
Agent, on the one hand, and the Loan Parties, on the other hand, is solely that
of creditor and debtor. No member of the Lender Group has (or shall be deemed to
have) any fiduciary relationship or duty to any Loan Party arising out of or in
connection with the Loan Documents or the transactions contemplated thereby, and
there is no agency or joint venture relationship between the members of the
Lender Group, on the one hand, and the Loan Parties, on the other hand, by
virtue of any Loan Document or any transaction contemplated therein.
 
17.7    Counterparts; Electronic Execution. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
 
17.8    Revival and Reinstatement of Obligations. If the incurrence or payment
of the Obligations by any Borrower or Guarantor or the transfer to the Lender
Group of any property should for any reason subsequently be asserted, or
declared, to be void or voidable under any state or federal law relating to
creditors’ rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments
of money or transfers of property (each, a “Voidable Transfer”), and if the
Lender Group is required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the advice of counsel, then, as to
any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or Guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
 
17.9    Confidentiality.
(a)    Agent and Lenders each individually (and not jointly or jointly and
severally) agree that material, non-public information regarding Parent and its
Subsidiaries, their operations, assets, and existing and contemplated business
plans (“Confidential Information”) shall be treated by Agent and the Lenders in
a confidential manner, and shall not be disclosed by Agent and the Lenders to
Persons who are not parties to this Agreement, except: (i) to attorneys for and
other advisors, accountants, auditors, and consultants to any member of the
Lender Group and to employees, directors and officers of any member of the
Lender Group (the Persons in this clause (i), “Lender Group Representatives”) on
a “need to know” basis in connection with this Agreement and the transactions
contemplated hereby and on a confidential basis, (ii) to Subsidiaries and
Affiliates of any member of the Lender Group (including the Bank Product
Providers),

62

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

provided that any such Subsidiary or Affiliate shall have agreed to receive such
information hereunder subject to the terms of this Section 17.9, (iii) as may be
required by regulatory authorities so long as such authorities are informed of
the confidential nature of such information, (iv) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation; provided
that (x) prior to any disclosure under this clause (iv), the disclosing party
agrees to provide Administrative Borrower with prior notice thereof, to the
extent that it is practicable to do so and to the extent that the disclosing
party is permitted to provide such prior notice to Borrowers pursuant to the
terms of the applicable statute, decision, or judicial or administrative order,
rule, or regulation and (y) any disclosure under this clause (iv) shall be
limited to the portion of the Confidential Information as may be required by
such statute, decision, or judicial or administrative order, rule, or
regulation, (v) as may be agreed to in advance in writing by Borrowers, (vi) as
requested or required by any Governmental Authority pursuant to any subpoena or
other legal process, provided, that, (x) prior to any disclosure under this
clause (vi) the disclosing party agrees to provide Borrowers with prior written
notice thereof, to the extent that it is practicable to do so and to the extent
that the disclosing party is permitted to provide such prior written notice to
Borrowers pursuant to the terms of the subpoena or other legal process and (y)
any disclosure under this clause (vi) shall be limited to the portion of the
Confidential Information as may be required by such Governmental Authority
pursuant to such subpoena or other legal process, (vii) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agent or the Lenders or the Lender Group
Representatives), (viii) in connection with any assignment, participation or
pledge of any Lender’s interest under this Agreement, provided that prior to
receipt of Confidential Information any such assignee, participant, or pledgee
shall have agreed in writing to receive such Confidential Information hereunder
subject to the terms of this Section, (ix) in connection with any litigation or
other adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such
parties under this Agreement or the other Loan Documents; provided, that, prior
to any disclosure to any Person (other than any Loan Party, Agent, any Lender,
any of their respective Affiliates, or their respective counsel) under this
clause (ix) with respect to litigation involving any Person (other than any
Borrower, Agent, any Lender, any of their respective Affiliates, or their
respective counsel), the disclosing party agrees to provide Borrowers with prior
written notice thereof, and (x) in connection with, and to the extent reasonably
necessary for, the exercise of any secured creditor remedy under this Agreement
or under any other Loan Document.
(b)    Anything in this Agreement to the contrary notwithstanding, Agent may (i)
provide information concerning the terms and conditions of this Agreement and
the other Loan Documents to loan syndication and pricing reporting services, and
(ii) use the name, logos, and other insignia of Borrowers and Loan Parties and
the Commitments provided hereunder in any “tombstone” or comparable advertising,
on its website or in other marketing materials of the Agent.
 
17.10    Lender Group Expenses. Borrowers agree to pay any and all Lender Group
Expenses on the earlier of (a) the first day of the month following the date on
which such Lender Group Expenses were first incurred or (b) the date on which
demand therefor is made by Agent. Borrowers agree that their respective
obligations contained in this Section 17.10 shall survive payment or
satisfaction in full of all other Obligations.
 
17.11    Survival. All representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that Agent,
the Issuing Lender, or any Lender may have had notice or knowledge of any
Default or Event of Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on

63

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

any loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not expired or terminated.
 
17.12    Patriot Act. Each Lender that is subject to the requirements of the
Patriot Act hereby notifies Borrowers that pursuant to the requirements of the
Act, it is required to obtain, verify and record information that identifies
each Borrower, which information includes the name and address of each Borrower
and other information that will allow such Lender to identify each Borrower in
accordance with the Patriot Act. In addition, if Agent is required by law or
regulation or internal policies to do so, it shall have the right to
periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary
individual background checks for the Loan Parties and (b) OFAC/PEP searches and
customary individual background checks for the Loan Parties’ senior management
and key principals, and Borrowers agree to cooperate in respect of the conduct
of such searches and further agree that the reasonable costs and charges for
such searches shall constitute Lender Expenses hereunder and be for the account
of Borrowers.
 
17.13    Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof. The foregoing to
the contrary notwithstanding, all Bank Product Agreements, if any, are
independent agreements governed by the written provisions of such Bank Product
Agreements, which will remain in full force and effect, unaffected by any
repayment, prepayments, acceleration, reduction, increase, or change in the
terms of any credit extended hereunder, except as otherwise expressly provided
in such Bank Product Agreement.
 
17.14    Parent as Agent for Borrowers. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the “Administrative Borrower”) which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (a) to provide Agent with
all notices with respect to Advances and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement, and (b) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral in a combined fashion, as more fully set forth herein, is
done solely as an accommodation to Borrowers in order to utilize the collective
borrowing powers of Borrowers in the most efficient and economical manner and at
their request, and that Lender Group shall not incur liability to any Borrower
as a result hereof. Each Borrower expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a
combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group. To induce the
Lender Group to do so, and in consideration thereof, each Borrower hereby
jointly and severally agrees to indemnify each member of the Lender Group and
hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, or (b) the Lender Group’s relying on any instructions of the
Administrative Borrower, except that Borrowers will have no liability to the
relevant Agent-Related Person or Lender-Related Person under this Section 17.14
with respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as the
case may be.
[Signature pages to follow.]

64

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
 
SILICON GRAPHICS INTERNATIONAL CORP.,
a Delaware corporation
 
 
 
 
 
By:
/s/ James Wheat
 
Name:
James Wheat
 
Title:
Chief Financial Officer
 
 
 
 
 
SILICON GRAPHICS FEDERAL, INC.,
a Delaware corporation
 
 
 
 
 
By:
/s/ Kent Randolph
 
Name:
Kent Randolph
 
Title:
Secretary
 
 
 
 
 
WELLS FARGO CAPITAL FINANCE, LLC, 
a Delaware limited liability company, as Agent and as a Lender
 
 
 
By:
/s/ Todd Nakamoto
 
Name:
Todd Nakamoto
 
Title:
Managing Director
 
 

S-1
Credit Agreement

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

EXHIBIT A-1
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered
into as of _________________________ between ________________________________
(“Assignor”) and _____________________________________ (“Assignee”). Reference
is made to the Agreement described in Annex I hereto (the “Credit Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Credit Agreement.
1.In accordance with the terms and conditions of Section 13 of the Credit
Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the Assignor’s rights and obligations under the Loan Documents as of the date
hereof with respect to the Obligations owing to the Assignor, and Assignor’s
portion of the Commitments, all to the extent specified on Annex I.
2.    The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim and (ii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby; (b)
makes no representation or warranty and assumes no responsibility with respect
to (i) any statements, representations or warranties made in or in connection
with the Loan Documents, or (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or any Guarantor or the performance or
observance by any Borrower or any Guarantor of any of their respective
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto, and (d) represents and warrants that the amount set
forth as the Purchase Price on Annex I represents the amount owed by Borrowers
to Assignor with respect to Assignor’s share of the Advances assigned hereunder,
as reflected on Assignor’s books and records.
3.    The Assignee (a) confirms that it has received copies of the Credit
Agreement and the other Loan Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement; (b) agrees that it will, independently and
without reliance upon Agent, Assignor, or any other Lender, based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under the Loan
Documents; (c) confirms that it is an Eligible Transferee; (d) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (e)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender; and (f) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee’s
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty.
4.    Following the execution of this Assignment Agreement by the Assignor and
Assignee, the Assignor will deliver this Assignment Agreement to the Agent for
recording by the Agent. The effective date of this Assignment (the “Settlement
Date”) shall be the latest to occur of (a) the date of the execution and
delivery hereof by the Assignor and the Assignee, (b) the receipt by Agent for
its sole and separate account a processing fee in the amount of $3,500 (if
required by the Credit Agreement), (c) the receipt of any required consent of
the Agent, and (d) the date specified in Annex I.
5.    As of the Settlement Date (a) the Assignee shall be a party to the Credit
Agreement and, to the extent of the interest assigned pursuant to this
Assignment Agreement, have the rights and obligations of a Lender thereunder and
under the other Loan Documents, and (b) the Assignor shall, to the extent of the
interest assigned pursuant to this Assignment Agreement, relinquish its rights
and be released from its

1

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

obligations under the Credit Agreement and the other Loan Documents, provided,
however, that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender’s obligations under Article 15 and Section 17.9(a) of the
Credit Agreement.
6.    Upon the Settlement Date, Assignee shall pay to Assignor the Purchase
Price (as set forth in Annex I). From and after the Settlement Date, Agent shall
make all payments that are due and payable to the holder of the interest
assigned hereunder (including payments of principal, interest, fees and other
amounts) to Assignor for amounts which have accrued up to but excluding the
Settlement Date and to Assignee for amounts which have accrued from and after
the Settlement Date. On the Settlement Date, Assignor shall pay to Assignee an
amount equal to the portion of any interest, fee, or any other charge that was
paid to Assignor prior to the Settlement Date on account of the interest
assigned hereunder and that are due and payable to Assignee with respect
thereto, to the extent that such interest, fee or other charge relates to the
period of time from and after the Settlement Date.
7.    This Assignment Agreement may be executed in counterparts and by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. This Assignment Agreement may be executed and delivered
by telecopier or other facsimile transmission all with the same force and effect
as if the same were a fully executed and delivered original manual counterpart.
8.    THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
[signatures on next page]

2

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

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and
Annex I hereto to be executed by their respective officers, as of the first date
written above.

[NAME OF ASSIGNOR]
as Assignor

By:____________________________
Name:__________________________
Title:___________________________

[NAME OF ASSIGNEE]
as Assignee

By:____________________________
Name:__________________________
Title:___________________________

ACCEPTED THIS ______ DAY OF
____________________

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent

By:___________________________________
Name:_________________________________
Title:__________________________________

3

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

ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
1.    Borrowers: Silicon Graphics International Corp. (a Delaware corporation)
and Silicon Graphics     Federal, Inc. (a Delaware corporation)
2.    Name and Date of Credit Agreement:
Credit Agreement, dated as of ___, 2011, by and among Borrowers, the lenders
from time to time a party thereto (the “Lenders”), Wells Fargo Capital Finance,
LLC, a Delaware limited liability company, as the administrative agent for the
Lenders
3.    Date of Assignment Agreement:    ___________________
4.    Amounts:
a.    Assigned Amount of Revolver Commitment    $___________________
b.    Assigned Amount of Advances    $___________________
5.    Settlement Date:
6.    Purchase Price    $___________________
7.    Notice and Payment Instructions, etc.
Assignee:

_______________________________
_______________________________
_______________________________

Assignor:

_______________________________
_______________________________
_______________________________

Annex I
1

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

8.    Agreed and Accepted:
[ASSIGNOR]
 
[ASSIGNEE]
By:
 
 
By:
 
Title:
 
 
Title:
 

Accepted:

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent

By
 
Name:
 
Title:
 

Annex I
2

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

[borrowingbasecertificate.jpg]

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

EXHIBIT B-2
FORM OF BANK PRODUCTS PROVIDER LETTER AGREEMENT
[Letterhead of Specified Bank Products Provider]
[Date]
Wells Fargo Capital Finance, LLC as Agent
2450 Colorado Avenue
Suite 3000 West
Santa Monica, California 90404
Attention: Business Finance Division Manager
Fax No.: (310) 453-7413

Reference is hereby made to that certain Credit Agreement, dated as of December
5, 2011 (as amended, restated, supplemented, or modified from time to time, the
“Credit Agreement”), by and among the lenders party thereto (such lenders,
together with their respective successors and assigns, are referred to
hereinafter each individually as a “Lender” and collectively as the “Lenders”),
WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as
administrative agent for the Lenders (together with its successors and assigns
in such capacity, “Agent”), and SILICON GRAPHICS INTERNATIONAL CORP., a Delaware
corporation (“Parent”), SILICON GRAPHICS FEDERAL, INC., a Delaware corporation
(“Silicon Federal”; and together with Parent each individually a “Borrower”, and
individually and collectively, jointly and severally, the “Borrowers”).
Capitalized terms used herein but not specifically defined herein shall have the
meanings ascribed to them in the Credit Agreement.
Reference is also made to that certain [describe the Bank Product Agreement or
Agreements] (the “Specified Bank Product Agreement [Agreements]”) dated as of
[__________] by and between [Lender or Affiliate of Lender] (the “Specified Bank
Products Provider”) and [identify the Loan Party or Subsidiary].
1.Appointment of Agent. The Specified Bank Products Provider hereby designates
and appoints Agent, and Agent by its signature below hereby accepts such
appointment, as its agent under the Credit Agreement and the other Loan
Documents. The Specified Bank Products Provider hereby acknowledges that it has
reviewed Sections 15.1, 15.2, 15.3, 15.4, 15.6, 15.7, 15.8, 15.9, 15.11, 15.12,
15.13, 15.14, 15.15, and 17.5 (collectively such sections are referred to herein
as the “Agency Provisions”), including, as applicable, the defined terms
referenced therein (but only to the extent used therein), and agrees to be bound
by the provisions thereof. Specified Bank Products Provider and Agent each agree
that the Agency Provisions which govern the relationship, and certain
representations, acknowledgements, appointments, rights, restrictions, and
agreements, between the Agent, on the one hand, and the Lenders or the Lender
Group, on the other hand, shall, from and after the date of this letter
agreement also apply to and govern, mutatis mutandis, the relationship between
the Agent, on the one hand, and the Specified Bank Product Provider with respect
to the Bank Products provided pursuant to the Specified Bank Product
Agreement[s], on the other hand.
2.Acknowledgement of Certain Provisions of Credit Agreement. The Specified Bank
Products Provider hereby acknowledges that it has reviewed the provisions of
Sections 2.4(b)(ii), 14.1, 15.10, 15.11, and 17.5 of the Credit Agreement,
including, as applicable, the defined terms referenced therein, and agrees to be
bound by the provisions thereof. Without limiting the generality of any of the
foregoing referenced provisions, Specified Bank Product Provider understands and
agrees that its rights and benefits under the Loan Documents consist solely of
it being a beneficiary of the Liens and security interests granted to Agent

1

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

and the right to share in Collateral as set forth in the Credit Agreement.
3.Reporting Requirements. Agent shall have no obligation to calculate the amount
due and payable with respect to any Bank Products. On a monthly basis (not later
than the 10th Business Day of each calendar month) or as more frequently as
Agent shall request, the Specified Bank Products Provider agrees to provide
Agent with a written report, in form and substance satisfactory to Agent,
detailing Specified Bank Products Provider’s reasonable determination of the
credit exposure (and mark- to-market exposure) of the Borrowers and their
Subsidiaries in respect of the Bank Products provided by Specified Bank Products
Provider pursuant to the Specified Bank Products Agreement[s]. If Agent does not
receive such written report within the time period provided above, Agent shall
be entitled to assume that the reasonable determination of the credit exposure
of the Borrowers and their Subsidiaries with respect to the Bank Products
provided pursuant to the Specified Bank Products Agreement[s] is zero.
4.Bank Product Reserve Conditions. Specified Bank Products Provider further
acknowledges and agrees that Agent shall have the right, but shall have no
obligation to establish, maintain, relax or release reserves in respect of any
of the Bank Product Obligations and that if reserves are established there is no
obligation on the part of the Agent to determine or insure whether the amount of
any such reserve is appropriate or not. If Agent so chooses to implement a
reserve, Specified Bank Products Provider acknowledges and agrees that Agent
shall be entitled to rely on the information in the reports described above to
establish the Bank Product Reserve Amount.
5.Bank Product Obligations. From and after the delivery to Agent of this letter
agreement duly executed by Specified Bank Product Provider and the
acknowledgement of this letter agreement by Agent and each Borrower, the
obligations and liabilities of the Borrowers and their Subsidiaries to Specified
Bank Product Provider in respect of Bank Products evidenced by the Specified
Bank Product Agreement[s] shall constitute Bank Product Obligations (and which,
in turn, shall constitute Obligations), and Specified Bank Product Provider
shall constitute a Bank Product Provider until such time as Specified Bank
Products Provider or its affiliate is no longer a Lender. Specified Bank
Products Provider acknowledges that other Bank Products (which may or may not be
Specified Bank Products) may exist at any time.
6.Notices. All notices and other communications provided for hereunder shall be
given in the form and manner provided in Section 11 of the Credit Agreement,
and, if to Agent, shall be mailed, sent, or delivered to Agent in accordance
with Section 11 in the Credit Agreement, if to Borrowers, shall be mailed, sent,
or delivered to Borrowers in accordance with Section 11 in the Credit Agreement,
and, if to Specified Bank Products Provider, shall be mailed, sent or delivered
to the address set forth below, or, in each case as to any party, at such other
address as shall be designated by such party in a written notice to the other
party.
If to Specified Bank
 
 
Products Provider:
 
 
 
 
 
 
 
 
 
Attn:
 
 
Fax No.
 

7.Miscellaneous. This letter agreement is for the benefit of the Agent, the
Specified Bank Products Provider, the Borrowers and each of their respective
successors and assigns (including any successor agent pursuant to Section 15.9
of the Credit Agreement, but excluding any successor or assignee of a Specified
Bank Products Provider that does not qualify as a Bank Product Provider). Unless
the context of this letter

2

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

agreement clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” This letter
agreement may be executed in any number of counterparts and by different parties
on separate counterparts. Each of such counterparts shall be deemed to be an
original, and all of such counterparts, taken together, shall constitute but one
and the same agreement. Delivery of an executed counterpart of this letter by
telefacsimile or other means of electronic transmission shall be equally
effective as delivery of a manually executed counterpart.
8.Governing Law.
(a)THE VALIDITY OF THIS LETTER AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
(b)THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS LETTER AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS,
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS, LOCATED IN THE
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA. BORROWERS, SPECIFIED BANK PRODUCTS
PROVIDER, AND AGENT EACH WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW,
ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO
OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 8(b).
(c)TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWERS, SPECIFIED BANK
PRODUCTS PROVIDER, AND AGENT EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LETTER
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWERS, SPECIFIED BANK PRODUCTS PROVIDER, AND AGENT EACH
REPRESENTS TO THE OTHERS THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS LETTER AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[signature pages to follow]

3

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

Sincerely,
 
 
[SPECIFIED BANK PRODUCTS PROVIDER]
 
 
By:
 
Name:
 
Title:
 
 
 
 
 

4

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

Acknowledged, accepted, and agreed
as of the date first written above:

SILICON GRAPHICS INTERNATIONAL CORP.,
a Delaware corporation, as a Borrower

By:
 
Name:
 
Title:
 

SILICON GRAPHICS FEDERAL, INC.,
a Delaware corporation, as a Borrower

By:
 
Name:
 
Title:
 

5

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

Acknowledged, accepted, and
agreed as of _____________, 20__:

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company,
as Agent

By:
 
Name:
 
Title:
 

6

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

EXHIBIT C-1
FORM OF COMPLIANCE CERTIFICATE
[on Parent’s letterhead]
To:    Wells Fargo Capital Finance, LLC
2450 Colorado Avenue, Suite 3000 West
Santa Monica, CA 90404
Attn: Business Finance Division Manager
Re:    Compliance Certificate dated __________________________
Ladies and Gentlemen:
Reference is made to that certain CREDIT AGREEMENT (the “Credit Agreement”)
dated as of December 5, 2011, by and among the lenders identified on the
signature pages thereof (such lenders, together with their respective successors
and permitted assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), WELLS FARGO CAPITAL FINANCE, LLC, a
Delaware limited liability company, as administrative agent for the Lenders
(“Agent”), SILICON GRAPHICS INTERNATIONAL CORP., a Delaware corporation
(“Parent”), SILICON GRAPHICS FEDERAL, INC., a Delaware corporation (“Silicon
Federal”; and together with Parent each individually a “Borrower”, and
individually and collectively, jointly and severally, the “Borrowers”).
Capitalized terms used in this Compliance Certificate have the meanings set
forth in the Credit Agreement unless specifically defined herein.
Pursuant to Schedule 5.1 of the Credit Agreement, the undersigned officer of the
Administrative Borrowers hereby certifies that:
1.Parent has filed its [Form 10-K/Form 10-Q] with the SEC for the fiscal
[quarter][year] ended _______, 20__. Attached as Schedule 1 hereto is a copy of
any items listed in clause [(b)/(d)] of Schedule 5.1 of the Credit Agreement
that were not included in such [Form 10-K/Form 10-Q].
2.Such officer has reviewed the terms of the Credit Agreement and has made, or
caused to be made under his/her supervision, a review in reasonable detail of
the transactions and consolidated condition of Parent and its Subsidiaries
during the accounting period covered by the financial statements [set forth in
its [Form 10-K/Form 10-Q]][and][attached as Schedule 1].
3.Such review has not disclosed the existence on and as of the date hereof, and
the undersigned does not have knowledge of the existence as of the date hereof,
of any event or condition that constitutes a Default or Event of Default, except
for such conditions or events listed on Schedule 2 attached hereto, specifying
the nature and period of existence thereof and what action Parent and its
Subsidiaries have taken, are taking, or propose to take with respect thereto.
4.[Parent and its Subsidiaries are in compliance with the applicable covenants
contained in Section 7 of the Credit Agreement as demonstrated on Schedule 3
hereof.] 1 

 
 
 
 
 
1 To be included during a Financial Covenant Period in accordance with Section 7
of the Credit Agreement.

1

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

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this _____ day of _______________, ________.

SILICON GRAPHICS INTERNATIONAL CORP.,
a Delaware corporation, as Administrative Borrower
 
 
By:
 
Name:
 
Title:
 

2

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

SCHEDULE 1

Financial Information

Schedule 1

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

SCHEDULE 2

Default or Event of Default

Schedule 2

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

SCHEDULE 3
Financial Covenants2
Fixed Charge Coverage Ratio.
Parent and its Subsidiaries’ Fixed Charge Coverage Ratio, measured on a
quarter-end basis for any 12 month period ending on the measurement date, for
the quarter period ending ___________ __, 20__ is ___:1.0, which ratio [is/is
not] at least the required amount set forth in Section 7 of the Credit Agreement
for the corresponding period.

____________________
2 To be included during a Financial Covenant Period in accordance with Section 7
of the Credit Agreement.

Schedule 3

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

EXHIBIT L-1
FORM OF LIBOR NOTICE
Wells Fargo Capital Finance, LLC, as Agent
under the below referenced Credit Agreement
2450 Colorado Avenue
Suite 3000 West
Santa Monica, California 90404

Ladies and Gentlemen:
Reference hereby is made to that certain Credit Agreement, dated as of December
5, 2011 (the “Credit Agreement”), among Silicon Graphics International Corp., a
Delaware corporation (“Parent”), Silicon Graphics Federal, Inc., a Delaware
corporation (“Silicon Federal”; and together with Parent each individually a
“Borrower”, and individually and collectively, jointly and severally, the
“Borrowers”), the lenders signatory thereto (the “Lenders”), and Wells Fargo
Capital Finance, LLC, a Delaware limited liability company, as the
administrative agent for the Lenders (“Agent”). Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in the
Credit Agreement.
This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with
respect to outstanding Advances in the amount of $________ (the “LIBOR Rate
Advance”)[, and is a written confirmation of the telephonic notice of such
election given to Agent].
The LIBOR Rate Advance will have an Interest Period of 1, 2, or 3 month(s)
commencing on _________________.
This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of
determining the rate of interest based on the LIBOR Rate under the Credit
Agreement, of the LIBOR Rate as determined pursuant to the Credit Agreement.
Borrowers represent and warrant that no Default or Event of Default has occurred
and is continuing on the date hereof, which has not been previously disclosed in
writing to Agent, nor will any thereof occur after giving effect to the request
above.

1

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

Dated:
 
 
 
SILICON GRAPHICS INTERNATIONAL CORP.,
a Delaware corporation, as a Borrower
 
 
By:
 
Name:
 
Title:
 

SILICON GRAPHICS FEDERAL, INC.,
a Delaware corporation, as a Borrower
 
 
By:
 
Name:
 
Title:
 

Acknowledged by:

WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent

By:
 
Name:
 
Title:
 

2

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

Schedule A-1
Agent’s Account
An account at a bank designated by Agent from time to time as the account into
which Borrowers shall make all payments to Agent for the benefit of the Lender
Group and into which the Lender Group shall make all payments to Agent under
this Agreement and the other Loan Documents; unless and until Agent notifies
Borrowers and the Lender Group to the contrary, Agent’s Account shall be that
certain deposit account bearing account number 37072820231201124 and maintained
by Agent with Wells Fargo Bank, N.A., San Francisco, CA, ABA #121-000-248.

1

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

Schedule C-1

Commitments

Lender
Revolver Commitment
Wells Fargo Capital Finance, LLC

$35,000,000

1

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

Schedule 1.1
As used in the Agreement, the following terms shall have the following
definitions:
“Account” means an account (as that term is defined in the Code).
“Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.
“Accounting Changes” means changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions).
“Acquired Indebtedness” means Indebtedness of a Person whose assets or Equity
Interests are acquired by a Borrower or any of its Subsidiaries in a Permitted
Acquisition; provided, that such Indebtedness (a) is either purchase money
Indebtedness or a Capital Lease with respect to Equipment or mortgage financing
with respect to Real Property, (b) was in existence prior to the date of such
Permitted Acquisition, and (c) was not incurred in connection with, or in
contemplation of, such Permitted Acquisition.
“Acquisition” means (a) the purchase or other acquisition by a Person or its
Subsidiaries of all or substantially all of the assets of (or any division or
business line of) any other Person, or (b) the purchase or other acquisition
(whether by means of a merger, consolidation, or otherwise) by a Person or its
Subsidiaries of all or substantially all of the Stock of any other Person.
“Additional Documents” has the meaning specified therefor in Section 5.12 of the
Agreement.
“Administrative Borrower” has the meaning specified therefor in Section 17.14 of
the Agreement.
“Advances” has the meaning specified therefor in Section 2.1(a) of the
Agreement.
“Affected Lender” has the meaning specified therefor in Section 2.13(b) of the
Agreement.
“Affiliate” means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, “control” means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Stock, by contract, or otherwise;
provided, however, that, for purposes of the definition of Eligible Accounts and
Section 6.12 of the Agreement: (a) any Person which owns directly or indirectly
10% or more of the Stock having ordinary voting power for the election of
directors or other members of the governing body of a Person or 10% or more of
the partnership or other ownership interests of a Person (other than as a
limited partner of such Person) shall be deemed an Affiliate of such Person, (b)
each director (or comparable manager) of a Person shall be deemed to be an
Affiliate of such Person, and (c) each partnership in which a Person is a
general partner shall be deemed an Affiliate of such Person.
“Agent” has the meaning specified therefor in the preamble to the Agreement.
“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.
“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1.

1

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

“Agent’s Liens” means the Liens granted by Parent or its Subsidiaries to Agent
under the Loan Documents.
“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.
“Application Event” means the occurrence of (a) a failure by Borrowers to repay
all of the Obligations in full on the Maturity Date, or (b) an Event of Default
and the election by Agent or the Required Lenders to require that payments and
proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) of the
Agreement.
“Assignee” has the meaning specified therefor in Section 13.1(a) of the
Agreement.
“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1.
“Authorized Person” means any one of the individuals identified on Schedule A-2
of the Disclosure Letter, as such schedule is updated from time to time by
written notice from Administrative Borrower to Agent.
“Availability” means, as of any date of determination, the amount that Borrowers
are entitled to borrow as Advances under Section 2.1 of the Agreement (after
giving effect to all then outstanding Obligations (other than Bank Product
Obligations)).
“Bank Product” means any one or more of the following financial products or
accommodations extended to Parent or its Subsidiaries by a Bank Product
Provider: (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) stored value cards, (e) purchase cards (including so-called
“procurement cards” or “P-cards”), (f) Cash Management Services, or (g)
transactions under Hedge Agreements.
“Bank Product Agreements” means those agreements entered into from time to time
by Parent or its Subsidiaries with a Bank Product Provider in connection with
the obtaining of any of the Bank Products.
“Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the
benefit of the Bank Product Providers (other than the Hedge Providers) in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure with respect to the then existing Bank Product Obligations
(other than Hedge Obligations).
“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by Parent or its Subsidiaries to any Bank
Product Provider pursuant to or evidenced by a Bank Product Agreement and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
(b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is
obligated to pay to a Bank Product Provider as a result of Agent or such Lender
purchasing participations from, or executing guarantees or indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Parent or its Subsidiaries.
“Bank Product Provider” means Wells Fargo or any of its Affiliates (including
WFCF).
“Bank Product Provider Letter Agreement” means a letter agreement in
substantially the form attached hereto as Exhibit B-2, in form and substance
satisfactory to Agent, duly executed by the applicable Bank Product Provider,
Borrowers, and Agent.
“Bank Product Reserve Amount” means, as of any date of determination, the Dollar
amount of

2

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

reserves that Agent has determined it is necessary or appropriate to establish
(based upon the Bank Product Providers’ reasonable determination of their credit
exposure to Parent and its Subsidiaries in respect of Bank Product Obligations)
in respect of Bank Products then provided or outstanding.
“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to time.
“Base Rate” means the greatest of (a) the Federal Funds Rate plus ½%, (b) the
LIBOR Rate (which rate shall be calculated based upon an Interest Period of 3
months and shall be determined on a daily basis), plus 1 percentage point, and
(c) the rate of interest announced, from time to time, within Wells Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publications as Wells Fargo may designate.
“Base Rate Loan” means each portion of the Advances that bears interest at a
rate determined by reference to the Base Rate.
“Base Rate Margin” means 1.75 percentage points.
“Benchmark Inventory” means Inventory of a Borrower or its Subsidiaries that is
maintained with Benchmark Electronics, Inc. in connection with any product
manufacturing and/or supply chain management services rendered by Benchmark
Electronics, Inc. on behalf of such Borrower or Subsidiary.
“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which Parent or any of its Subsidiaries or ERISA Affiliates has been
an “employer” (as defined in Section 3(5) of ERISA) within the past six years.
“Board of Directors” means the board of directors (or comparable managers) of
Parent or any committee thereof duly authorized to act on behalf of the board of
directors (or comparable managers).
“Borrower” and “Borrowers” have the respective meanings specified therefor in
the preamble to the Agreement.
“Borrowing” means a borrowing consisting of Advances made on the same day by the
Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing
Loan, or by Agent in the case of a Protective Advance.
“Borrowing Base” means, as of any date of determination, the result of:
(a)85% of the amount of Eligible Accounts, less the amount, if any, of the
Dilution Reserve, plus
(b)the lowest of
(i)$15,000,000,
(ii)50% of the value (calculated at the lower of cost or market on a basis
consistent with Borrowers’ historical accounting practices) of Eligible
Inventory, and
(iii)85% times the most recently determined Net Liquidation

3

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

Percentage times the value (calculated at the lower of cost or market on a basis
consistent with Borrowers’ historical accounting practices) of Borrowers’
Eligible Inventory, minus
(d)the aggregate amount of reserves, if any, established by Agent under Section
2.1(c) of the Agreement.
“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.
“Borrowing Base Excess Amount” has the meaning set forth in Section 2.4(e)(i).
“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the state of California,
except that, if a determination of a Business Day shall relate to a LIBOR Rate
Loan, the term “Business Day” also shall exclude any day on which banks are
closed for dealings in Dollar deposits in the London interbank market.
“Capital Expenditures” means, with respect to any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed.
“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.
“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued or fully guaranteed by any state of the United States
or any political subdivision of any such state or any public instrumentality
thereof maturing within 1 year from the date of acquisition thereof and, at the
time of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time
deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year
from the date of acquisition thereof issued by any bank organized under the laws
of the United States or any state thereof or the District of Columbia or any
United States branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts
maintained with (i) any bank that satisfies the criteria described in clause (d)
above, or (ii) any other bank organized under the laws of the United States or
any state thereof so long as the full amount maintained with any such other bank
is insured by the Federal Deposit Insurance Corporation, (f) repurchase
obligations of any commercial bank satisfying the requirements of clause (d) of
this definition or recognized securities dealer having combined capital and
surplus of not less than $250,000,000, having a term of not more than seven
days, with respect to securities satisfying the criteria in clauses (a) or (d)
above, (g) debt securities with maturities of six months or less from the date
of acquisition backed by standby letters of credit issued by any commercial bank
satisfying the criteria described in clause (d) above, (h) Investments in money
market funds substantially all of whose assets are invested in the types of
assets described in clauses (a) through (g) above, and (i) with respect to any
Foreign Subsidiary: (i) currency of the countries in which such Foreign
Subsidiary conducts business; (ii) direct obligations of the sovereign nation,
or any agency thereof, in which such Foreign Subsidiary is organized and
conducting business in or in obligations fully and conditionally guaranteed by
such sovereign

4

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

nation, or any agency thereof; (iii) investments of the type and maturity
described in clauses (a) through (h) above of foreign obligors, which
investments or obligors have ratings described in such clauses or equivalent
ratings from comparable foreign rating agencies; and (iv) investments of the
type and maturity described in clauses (a) through (h) above of foreign obligors
which investments or obligors are not rated as provided in such clauses or in
clause (iii) above but which are, in the reasonable judgment of Borrowers,
comparable in investment quality to such investments and obligors, or the direct
or indirect parent of such obligors.
“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.
“CFC” means a controlled foreign corporation (as that term is defined in the
IRC).
“CFC Holding Company” means any entity that is a disregarded entity (as set
forth in U.S. Treasury Regulation 301.7701.2) or a partnership for U.S. Federal
tax purposes if the assets of such entity (other than a de minims amount of cash
and other assets necessary to operate its business) consist of equity interests
in a CFC.
“Change of Control” means that (a) any “person” or “group” (within the meaning
of Sections 13(d) and 14(d) of the Exchange Act), becomes the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
40%, or more, of the Stock of Parent having the right to vote for the election
of members of the Board of Directors, (b) a majority of the members of the Board
of Directors do not constitute Continuing Directors, or (c) Parent fails to own
and control, directly or indirectly, 100% of the Stock of each other Loan Party.
“Closing Date” means December 5, 2011.
“Code” means the California Uniform Commercial Code, as in effect from time to
time.
“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by any Loan Party in or upon which a Lien is granted
by such Person in favor of Agent or the Lenders under any of the Loan Documents.
“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in any Loan Party’s books and records, Equipment, or Inventory, in each case, in
form and substance reasonably satisfactory to Agent.
“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, cash proceeds of asset sales, rental
proceeds, and tax refunds).
“Commitment” means, with respect to each Lender, its Revolver Commitment, and,
with respect to all Lenders, their Revolver Commitments, in each case as such
Dollar amount is set forth beside such Lender’s name under the applicable
heading on Schedule C-1 or in the Assignment and Acceptance pursuant to which
such Lender became a Lender under the Agreement, as such amounts may be reduced
or increased from time to time pursuant to assignments made in accordance with
the provisions of Section 13.1 of the Agreement or pursuant to the terms of
Sections 2.4 (c) or 2.15 of the Agreement..

5

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

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 delivered by the chief financial officer of Parent to Agent.
“Confidential Information” has the meaning specified therefor in Section 17.9(a)
of the Agreement.
“Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of Parent on the Closing Date, and (b) any
individual who becomes a member of the Board of Directors after the Closing Date
if such individual was approved, appointed or nominated for election to the
Board of Directors by either the Permitted Holders or a majority of the
Continuing Directors, but excluding any such individual originally proposed for
election in opposition to the Board of Directors in office at the Closing Date
in an actual or threatened election contest relating to the election of the
directors (or comparable managers) of Parent and whose initial assumption of
office resulted from such contest or the settlement thereof.
“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by Parent or one of its
Subsidiaries, Agent, and the applicable securities intermediary (with respect to
a Securities Account) or bank (with respect to a Deposit Account).
“Controlled Account Agreement” has the meaning specified therefor in the
Security Agreement.
“Copyright Security Agreement” has the meaning specified therefor in the
Security Agreement.
“Daily Balance” means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.
“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.
“Defaulting Lender” means any Lender that (a) has failed to fund any amounts
required to be funded by it under the Agreement on the date that it is required
to do so under the Agreement (including the failure to make available to Agent
amounts required pursuant to a Settlement or to make a required payment in
connection with a Letter of Credit Disbursement), (b) notified Parent, any
Borrower, Agent, or any Lender in writing that it does not intend to comply with
all or any portion of its funding obligations under the Agreement, (c) has made
a public statement to the effect that it does not intend to comply with its
funding obligations under the Agreement or under other agreements generally (as
reasonably determined by Agent) under which it has committed to extend credit,
(d) failed, within 1 Business Day after written request by Agent, to confirm
that it will comply with the terms of the Agreement relating to its obligations
to fund any amounts required to be funded by it under the Agreement, (e)
otherwise failed to pay over to Agent or any other Lender any other amount
required to be paid by it under the Agreement on the date that it is required to
do so under the Agreement, or (f) (i) becomes or is insolvent or has a parent
company that has become or is insolvent or (ii) becomes the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, or custodian or appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment.
“Defaulting Lender Rate” means (a) for the first 3 days from and after the date
the relevant payment is due, the Base Rate, and (b) thereafter, the interest
rate then applicable to Advances that are Base Rate Loans (inclusive of the Base
Rate Margin applicable thereto).

6

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

“Deposit Account” means any deposit account (as that term is defined in the
Code).
“Designated Account” means the Deposit Account of Administrative Borrower
identified on Schedule D-1 of the Disclosure Letter.
“Designated Account Bank” has the meaning specified therefor in Schedule D-1 of
the Disclosure Letter.
“Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior 180 consecutive days, that is the result of
dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising
allowances, credits, or other dilutive items with respect to Borrowers' Accounts
during such period, by (b) Borrowers’ billings with respect to Accounts during
such period.
“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by 1 percentage point for
each percentage point by which Dilution is in excess of 5%.
“Disclosure Letter” means the letter dated as of the Closing Date delivered to
Agent containing information with respect to the Loan Parties and their
Subsidiaries.
“Dollars” or “$” means United States dollars.
“Domestic Subsidiary” means any Subsidiary of Parent that was formed under the
laws of the United States or any state of the United States or the District of
Columbia or that guarantees or otherwise provides direct credit support for any
Indebtedness of Borrowers.
“Earn-Outs” shall mean unsecured liabilities of a Loan Party arising under an
agreement to make any deferred payment as a part of the Purchase Price for a
Permitted Acquisition, including performance bonuses or consulting payments in
any related services, employment or similar agreement, in an amount that is
subject to or contingent upon the revenues, income, cash flow or profits (or the
like), product milestones or events of the target of such Permitted Acquisition.
“EBITDA” means, with respect to any fiscal period, Parent’s consolidated net
earnings (or loss), minus extraordinary gains, interest income, plus non-cash
extraordinary losses, non-cash stock compensation expenses, interest expense,
income taxes, fees and expenses incurred in connection with the entry into this
Agreement, expenses incurred in connection with Permitted Acquisitions, cash
expenses related to merger and acquisition transactions and restructuring not to
exceed $1,000,000 in the aggregate per fiscal year, non-cash realized losses and
impairment of investments, and depreciation and amortization for such period, in
each case, determined on a consolidated basis in accordance with GAAP. For the
purposes of calculating EBITDA for any period of 4 consecutive fiscal quarters
(each, a “Reference Period”), (a) if at any time during such Reference Period
(and after the Closing Date), Parent or any of its their Subsidiaries shall have
made a Permitted Acquisition, EBITDA for such Reference Period shall be
calculated after giving pro forma effect thereto (including pro forma
adjustments arising out of events which are directly attributable to such
Permitted Acquisition, are factually supportable, and are expected to have a
continuing impact, in each case to be mutually and reasonably agreed upon by
Parent and Agent) or in such other manner acceptable to Agent as if any such
Permitted Acquisition or adjustment occurred on the first day of such Reference
Period, and (b) EBITDA for the fiscal quarter ended March 25, 2011, shall be
deemed to be $982,000, (c) EBITDA for the fiscal quarter ended June 24, 2011,
shall be deemed to be negative $5,397,000, and (d) EBITDA for the fiscal quarter
ending September 30, 2011 and each fiscal quarter thereafter, shall be based on
actual EBITDA.

7

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

“Eligible Accounts” means those Accounts created by any Borrower in the ordinary
course of its business, that arise out of such Borrower’s sale of goods or
rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made in the Loan Documents, and that are
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below; provided, however, that such criteria may be revised from time
to time by Agent in Agent’s Permitted Discretion to address the results of any
audit performed by Agent from time to time after the Closing Date. In
determining the amount to be included, Eligible Accounts shall be calculated net
of customer deposits, finance charges and unapplied cash. Eligible Accounts
shall not include the following:
(a)    Accounts that the Account Debtor has failed to pay within the earlier of
(i) 90 days of original invoice date or (ii) 60 days of due date, and Accounts
with selling terms of more than 60 days,
(b)    Accounts owed by an Account Debtor (or its Affiliates) where 50% or more
of all Accounts owed by that Account Debtor (or its Affiliates) are deemed
ineligible under clause (a) above,
(c)    Accounts with respect to which the Account Debtor is an Affiliate of a
Borrower or an employee or agent of a Borrower or any Affiliate of a Borrower,
(d)    Accounts arising in a transaction wherein goods are samples, placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, COD, try and buy, or any other terms by reason of
which the payment by the Account Debtor may be conditional (provided, that
Accounts arising out of the sale of Shipped Goods shall not be rendered
ineligible solely as a result of this paragraph (d)),
(e)    Accounts that are not payable in Dollars or Canadian Dollars,
(f)    Accounts with respect to which the Account Debtor either (i) does not
maintain its chief executive office in the United States or Canada, or (ii) is
not organized under the laws of the United States, Canada, or any state or
province thereof, or (iii) is the government of any foreign country or sovereign
state, or of any state, province, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other
instrumentality thereof, unless (y) the Account is supported by an irrevocable
letter of credit reasonably satisfactory to Agent (as to form, substance, and
issuer or domestic confirming bank) that has been delivered to Agent and is
directly drawable by Agent, or (z) the Account is covered by credit insurance in
form, substance, and amount, and by an insurer, reasonably satisfactory to
Agent; provided, however, that clause (iii) above shall not apply to Canada or
any state, province, municipality, or other political subdivision thereof, or of
any department, agency, public corporation, or other instrumentality thereof so
long as (y) Agent’s Lien in such Accounts is perfected under applicable Canadian
law satisfactory to Agent and its counsel, and (z) there is no Canadian law
equivalent (including any equivalent law under any state, province,
municipality, or other political subdivision thereof) to the Assignment of
Claims Act, 31 USC §3727).
(g)    Accounts with respect to which the Account Debtor is either (i) the
United States or any department, agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to which Borrowers have complied,
to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31
USC §3727), or (ii) any state of the United States,
(h)    Accounts with respect to which the Account Debtor is a creditor of a
Borrower, is owed services from Parent or its Subsidiaries in respect of prepaid
maintenance contracts or accrued warranty claims, or has asserted a right of
setoff (including coop advertising and credit memos), or has disputed its
obligation to pay all or any portion of the Account, to the extent of such
prepayment, warranty accrual, claim,

8

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

right of setoff, or dispute,
(i)    Accounts with respect to an Account Debtor whose total obligations owing
to Borrowers exceed 10%, or 30% with respect to a single Account Debtor (which
such percentages, as applied to a particular Account Debtor, are subject to
reduction by Agent in its Permitted Discretion if the creditworthiness of such
Account Debtor deteriorates) of all Eligible Accounts, to the extent of the
obligations owing by such Account Debtor in excess of such percentage; provided,
however, that, in each case, the amount of Eligible Accounts that are excluded
because they exceed the foregoing percentage shall be determined by Agent based
on all of the otherwise Eligible Accounts prior to giving effect to any
eliminations based upon the foregoing concentration limit,
(j)    Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
a Borrower has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor,
(k)    Accounts, the collection of which, Agent, in its Permitted Discretion,
believes to be doubtful by reason of the Account Debtor’s financial condition,
(l)    Accounts that are not subject to a valid and perfected first priority
Agent’s Lien,
(m)    Accounts with respect to which (i) the goods giving rise to such Account
have not been shipped and billed to (and accepted by) the Account Debtor, or
(ii) the services giving rise to such Account have not been performed and billed
to the Account Debtor,
(n)     Accounts with respect to which the Account Debtor is a Sanctioned Person
or Sanctioned Entity,
(o)    Accounts acquired in connection with a Permitted Acquisition, until the
completion of a field examination of such Accounts, in each case, reasonably
satisfactory to Agent (which field examination may be conducted prior to the
closing of such Permitted Acquisition), or
(p)    Accounts that represent the right to receive progress payments or other
advance billings that are due prior to the completion of performance by
Borrowers of the subject contract for goods or services.
“Eligible Inventory” means Inventory consisting of first quality new and
remanufactured raw materials, production work in process, and new and
remanufactured finished goods held for sale in the ordinary course of Borrowers’
business, that in each case complies with each of the representations and
warranties respecting Eligible Inventory made in the Loan Documents, and that is
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below; provided, however, that such criteria may be revised from time
to time by Agent in Agent’s Permitted Discretion to address the results of any
audit or appraisal performed by Agent from time to time after the Closing Date.
In determining the amount to be so included, Inventory shall be valued at the
lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices. An item of Inventory shall not be included in Eligible
Inventory if:
(a)    a Borrower does not have good, valid, and marketable title thereto,
(b)    a Borrower does not have actual and exclusive possession thereof (either
directly or through a bailee or agent of Borrowers),

9

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

(c)    it is not located at one of the locations in the continental United
States set forth on Schedule E-1 of the Disclosure Letter (or in-transit from
one such location to another such location),
(d)    it is in-transit to or from a location of a Borrower (other than
in-transit from one location set forth on Schedule E-1 of the Disclosure Letter
to another location set forth on Schedule E-1 of the Disclosure Letter), is
Shipped Goods or Inventory sold on consignment,
(e)    it is located on real property leased by a Borrower or in a contract
warehouse, in each case, unless (i) a Rent Reserve has been established with
respect to such location, or (ii) it is subject to a Collateral Access Agreement
executed by the lessor or warehouseman, as the case may be, and unless it is
segregated or otherwise separately identifiable from goods of others, if any,
stored on the premises,
(f)    it is the subject of a bill of lading or other document of title,
(g)    it is not subject to a valid and perfected first priority Agent’s Lien,
(h)    it consists of goods returned or rejected by a Borrower’s customer,
(i)    it consists of goods that are obsolete or slow moving, restrictive items,
custom components (as identified in the most recent appraisal conducted in
accordance with Section 2.10(c)), stock work in process, low cost items, or
goods that constitute spare parts, packaging and shipping materials, supplies
used or consumed in Borrowers’ business, remanufactured work in process, bill
and hold goods, defective goods, “seconds,” or Inventory acquired on
consignment,
(j)    it is subject to third party trademark, licensing or other proprietary
rights, unless Agent is satisfied that such Inventory can be freely sold by
Agent on and after the occurrence of an Event of a Default despite such third
party rights, or
(k)    it was acquired in connection with a Permitted Acquisition, until the
completion of an appraisal and field examination of such Inventory, in each
case, reasonably satisfactory to Agent (which appraisal and field examination
may be conducted prior to the closing of such Permitted Acquisition).
“Environmental Action” means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of Parent or any of its Subsidiaries or any of their predecessors in
interest, (b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by Parent, any
Subsidiary of Parent, or any of their predecessors in interest.
“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on Parent
or its Subsidiaries, relating to the environment, the effect of the environment
on employee health, or Hazardous Materials, in each case as amended from time to
time.
“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of

10

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

any claim or demand, or Remedial Action required, by any Governmental Authority
or any third party, and which relate to any Environmental Action.
“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.
“Equipment” means equipment (as that term is defined in the Code).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto.
“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of Parent or any of
its Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Parent or any of its Subsidiaries under IRC Section 414(c), (c)
solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which Parent or any of its Subsidiaries is a member under IRC Section 414(m), or
(d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any
Person subject to ERISA that is a party to an arrangement with Parent or any of
its Subsidiaries and whose employees are aggregated with the employees of Parent
or any of its Subsidiaries under IRC Section 414(o).
“Event of Default” has the meaning specified therefor in Section 8 of the
Agreement.
“Excess Availability” means, as of any date of determination, the amount equal
to Availability minus the aggregate amount, if any, of all trade payables of
Parent and its Subsidiaries aged in excess of historical levels with respect
thereto and all book overdrafts of Parent and its Subsidiaries in excess of
historical practices with respect thereto, in each case as determined by Agent
in its Permitted Discretion.
“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.
“Excluded Real Property” has the meaning specified therefor in the Security
Agreement.
“Excludes Taxes” means (i) any tax imposed on the net income or net profits of
any Lender or any Participant (including any branch profits taxes or similar
taxes and any franchise taxes imposed in lieu of net income taxes), in each case
imposed by the jurisdiction (or by any political subdivision or taxing authority
thereof) in which such Lender or such Participant is organized or the
jurisdiction (or by any political subdivision or taxing authority thereof) in
which such Lender’s or such Participant’s office is located in each case as a
result of a present or former connection between such Lender or such Participant
and the jurisdiction or taxing authority imposing the tax (other than any such
connection arising solely from such Lender or such Participant having executed,
delivered or performed its obligations or received payment under, or enforced
its rights or remedies under the Agreement or any other Loan Document); (ii)
taxes resulting from a Lender’s or a Participant’s failure to comply with the
requirements of Section 16(c), (d) or (e) of the Agreement, (iii) any United
States federal withholding taxes that would be imposed on amounts payable to a
Foreign Lender based upon the applicable withholding rate in effect at the time
such Foreign Lender becomes a party to the Agreement (or designates a new
lending office), except that Excluded Taxes shall not include (A) any amount
that such Foreign Lender (or its assignor, if any) was previously entitled to
receive pursuant to Section 16(a) of the Agreement, if any, with respect to such
withholding tax at the time such Foreign Lender becomes a party to the Agreement
(or designates a new lending office), and (B) additional United States federal
withholding taxes that may be imposed after the time such Foreign Lender becomes
a party to the Agreement (or designates a new lending office), as a result of a
change in law, rule, regulation, order or other decision

11

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

with respect to any of the foregoing by any Governmental Authority other than
such a change arising under FATCA and (iv) any amounts required to be withheld
or paid by Borrowers or Agent pursuant to FATCA.
“FATCA” means Sections 1471 through 1474 of the IRC, any substantially similar
amendments or successor statutes and any current or future regulations or
official interpretations thereof.
“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by Agent from three
Federal funds brokers of recognized standing selected by it.
“Fee Letter” means that certain fee letter, dated as of even date with the
Agreement, among Borrowers and Agent, in form and substance reasonably
satisfactory to Agent.
“Financial Covenant Period” means a period that shall commence on any date (the
“Commencement Date”) on which (i) Availability plus Qualified Cash is less than
$50,000,000, or (ii) Availability is less than $15,000,000, or (iii) an Event of
Default has occurred, and shall continue until:
(a)    the last day of the second full fiscal quarter after the Commencement
Date, and
(b)    the last day of the fiscal quarter in which (i) Availability plus
Qualified Cash is at least $50,000,000, and (ii) Availability is at least
$15,000,000, and no Default or Event of Default exists at such time.
“Fixed Charges” means, with respect to any fiscal period and with respect to
Parent and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, the sum, without duplication, of (a) Interest Expense accrued (other
than interest paid-in-kind, amortization of financing fees, and other non-cash
Interest Expense) during such period, (b) scheduled principal payments in
respect of Indebtedness that are required to be paid during such period, (c) all
federal, state, and local income taxes accrued during such period, and (d) all
Restricted Junior Payments paid (whether in cash or other property, other than
common Stock) during such period.
“Fixed Charge Coverage Ratio” means, with respect to Parent and its Subsidiaries
for any 12 month period ending on the measurement date, the ratio of (a) EBITDA
for such period minus Capital Expenditures made (to the extent not already
incurred in a prior period) or incurred during such period, to (b) Fixed Charges
for such period.
“Foreign Accounts” means any Deposit Accounts and Securities Accounts maintained
by a Loan Party outside of the United States.
“Foreign Lender” means any Lender or Participant that is not a United States
person within the meaning of IRC section 7701(a)(30).
“Foreign Tax Controversies” has the meaning specified therefor in Section 4.20
of the Agreement.
“Foreign Subsidiary” mean any Subsidiary of Parent that is not a Domestic
Subsidiary.
“Funding Date” means the date on which a Borrowing occurs.

12

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

“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of
the Agreement.
“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied; provided, however, that all
calculations relative to liabilities shall be made without giving effect to
Statement of Financial Accounting Standards No. 159.
“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.
“Governmental Authority” means any federal, state, local, or other governmental
or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or
other similar dispute-resolving panel or body.
“Guarantors” means (a) as of the Closing Date, each Domestic Subsidiary of
Parent that is not a Borrower or an Inactive Subsidiary, and (b) after the
Closing Date, each other Person that becomes a guarantor pursuant to Section
5.11 of the Agreement, and “Guarantor” means any one of them.
“Guaranty” means that certain general continuing guaranty, dated as of even date
with the Agreement, executed and delivered by each extant Guarantor in favor of
Agent, for the benefit of the Lender Group and the Bank Product Providers, in
form and substance reasonably satisfactory to Agent.
“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
“Hedge Agreement” means a “swap agreement” as that term is defined in Section
101(53B)(A) of the Bankruptcy Code.
“Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of Parent or its Subsidiaries arising under, owing pursuant to, or existing in
respect of Hedge Agreements entered into with one or more of the Bank Product
Providers.
“Hedge Provider” means Wells Fargo or any of its Affiliates.
“Holdout Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.
“Inactive Subsidiary” has the meaning specified therefor in Section 4.25 of the
Agreement.
“Indebtedness” as to any Person means (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, or other
financial products, (c) all obligations of such Person as a lessee under Capital
Leases, (d) all obligations or liabilities of others secured by a Lien on any
asset of such Person, irrespective of whether such obligation or liability

13

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

is assumed, (e) all obligations of such Person to pay the deferred purchase
price of assets (other than trade payables incurred in the ordinary course of
business and repayable in accordance with customary trade practices), (f) all
obligations of such Person owing under Hedge Agreements (which amount shall be
calculated based on the amount that would be payable by such Person if the Hedge
Agreement were terminated on the date of determination), (g) any Prohibited
Preferred Stock of such Person, and (h) any obligation of such Person
guaranteeing or intended to guarantee (whether directly or indirectly
guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation
of any other Person that constitutes Indebtedness under any of clauses (a)
through (g) above. For purposes of this definition, (i) the amount of any
Indebtedness represented by a guaranty or other similar instrument shall be the
lesser of the principal amount of the obligations guaranteed and still
outstanding and the maximum amount for which the guaranteeing Person may be
liable pursuant to the terms of the instrument embodying such Indebtedness, and
(ii) the amount of any Indebtedness described in clause (d) above shall be the
lower of the amount of the obligation and the fair market value of the assets of
such Person securing such obligation.
“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of
the Agreement.
“Indemnified Person” has the meaning specified therefor in Section 10.3 of the
Agreement.
“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
“Intercompany Subordination Agreement” means an intercompany subordination
agreement, dated as of even date with the Agreement, executed and delivered by
Parent and each of its Subsidiaries, and Agent, the form and substance of which
is reasonably satisfactory to Agent.
“Interest Expense” means, for any period, the aggregate of the interest expense
of Parent and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, however,
that (a) interest shall accrue at the applicable rate based upon the LIBOR Rate
from and including the first day of each Interest Period to, but excluding, the
day on which any Interest Period expires, (b) any Interest Period that would end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (c) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, or 3 months
after the date on which the Interest Period began, as applicable, and (d)
Borrowers may not elect an Interest Period which will end after the Maturity
Date.
“Inventory” means inventory (as that term is defined in the Code).
“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guarantees,
advances, capital contributions (excluding (a) commission, travel, and similar
advances to officers and employees of such Person made in the ordinary course of
business, and (b) bona fide Accounts arising in the ordinary course of
business), or acquisitions of Indebtedness, Stock, or all or substantially all
of the assets of such other Person (or of any division or

14

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

business line of such other Person), and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.
“Issuing Lender” means WFCF or any other Lender that, at the request of any
Borrower and with the consent of Agent, agrees, in such Lender’s sole
discretion, to become an Issuing Lender for the purpose of issuing Letters of
Credit or Reimbursement Undertakings pursuant to Section 2.11 of the Agreement
and the Issuing Lender shall be a Lender.
“Lender” has the meaning set forth in the preamble to the Agreement, shall
include the Issuing Lender and the Swing Lender, and shall also include any
other Person made a party to the Agreement pursuant to the provisions of Section
13.1 of the Agreement and “Lenders” means each of the Lenders or any one or more
of them.
“Lender Group” means each of the Lenders (including the Issuing Lender and the
Swing Lender) and Agent, or any one or more of them.
“Lender Group Expenses” means all (a) costs or expenses (including taxes, and
insurance premiums) required to be paid by Parent or any of its Subsidiaries
under any of the Loan Documents that are paid, advanced, or incurred by the
Lender Group, (b) out-of-pocket fees or charges paid or incurred by Agent in
connection with the Lender Group’s transactions with Parent or any of its
Subsidiaries under any of the Loan Documents, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public
record searches (including tax lien, litigation, and UCC searches and including
searches with the patent and trademark office, the copyright office, or the
department of motor vehicles), filing, recording, publication, appraisal
(including periodic collateral appraisals or business valuations to the extent
of the fees and charges (and up to the amount of any limitation) contained in
the Agreement or the Fee Letter), real estate surveys, real estate title
policies and endorsements, and environmental audits, (c) Agent's customary fees
and charges (as adjusted from time to time) with respect to the disbursement of
funds (or the receipt of funds) to or for the account of Borrowers (whether by
wire transfer or otherwise), together with any out-of-pocket costs and expenses
incurred in connection therewith, (d) out-of-pocket charges paid or incurred by
Agent resulting from the dishonor of checks payable by or to any Loan Party, (e)
reasonable out-of-pocket costs and expenses paid or incurred by the Lender Group
to correct any default or enforce any provision of the Loan Documents, or during
the continuance of an Event of Default, in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (f) reasonable out-of-pocket audit fees and
expenses (including travel, meals, and lodging) of Agent related to any
inspections or audits to the extent of the fees and charges (and up to the
amount of any limitation) contained in the Agreement or the Fee Letter, (g)
reasonable out-of-pocket costs and expenses of third party claims or any other
suit paid or incurred by the Lender Group in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group’s relationship with Parent or any of its
Subsidiaries, (h) Agent’s reasonable costs and expenses (including reasonable
attorneys fees) incurred in advising, structuring, drafting, reviewing,
administering (including travel, meals, and lodging), syndicating, or amending
the Loan Documents, (i) Agent’s and each Lender’s reasonable costs and expenses
(including reasonable attorneys, accountants, consultants, and other advisors
fees and expenses) incurred in terminating, enforcing (including attorneys,
accountants, consultants, and other advisors fees and expenses incurred in
connection with a “workout,” a “restructuring,” or an Insolvency Proceeding
concerning Parent or any of its Subsidiaries or in exercising rights or remedies
under the Loan Documents), or defending the Loan Documents, irrespective of
whether suit is brought, or in taking any Remedial Action concerning the

15

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

Collateral, and (j) usage charges, charges, fees, costs, and expenses for
amendments, renewals, extensions, transfers, or drawings from time to time
imposed by the Underlying Issuer or incurred by the Issuing Lender in respect of
Letters of Credit and out-of-pocket charges, fees, costs, and expenses paid or
incurred by the Underlying Issuer or Issuing Lender in connection with the
issuance, amendment, renewal, extension, or transfer of, or drawing under, any
Letter of Credit or any demand for payment thereunder; provided, that, so long
as no Event of Default has occurred and is continuing, solely with respect to
clause (h) above, such attorney fees shall be limited to one counsel (along with
additional local and special counsel as needed and, in the case of an actual or
perceived conflict of interest, another firm of counsel for such affected
Persons).
“Lender Group Representatives” has the meaning specified therefor in Section
17.9 of the Agreement.
“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.
“Letter of Credit” means a letter of credit (as that term is defined in the
Code) issued by Issuing Lender or a letter of credit (as that term is defined in
the Code) issued by Underlying Issuer, as the context requires.
“Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent, including
provisions that specify that the Letter of Credit fee and all usage charges set
forth in the Agreement will continue to accrue while the Letters of Credit are
outstanding) to be held by Agent for the benefit of those Lenders with a
Revolver Commitment in an amount equal to 105% of the then existing Letter of
Credit Usage, (b) delivering to Agent documentation executed by all
beneficiaries under the Letters of Credit, in form and substance reasonably
satisfactory to Agent and the Issuing Lender, terminating all of such
beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a
standby letter of credit, in form and substance reasonably satisfactory to
Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an
amount equal to 105% of the then existing Letter of Credit Usage (it being
understood that the Letter of Credit fee and all usage charges set forth in the
Agreement will continue to accrue while the Letters of Credit are outstanding
and that any such fees that accrue must be an amount that can be drawn under any
such standby letter of credit).
“Letter of Credit Disbursement” means a payment made by Issuing Lender or
Underlying Issuer pursuant to a Letter of Credit.
“Letter of Credit Usage” means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit.
“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of the
Agreement.
“LIBOR Notice” means a written notice in the form of Exhibit L-1.
“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of the
Agreement.
“LIBOR Rate” means the rate per annum appearing on Bloomberg L.P.’s (the
“Service”) Page BBAM1/(Official BBA USD Dollar Libor Fixings) (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service) 2 Business Days prior to the commencement of the requested
Interest Period, for a term and in an amount comparable to the Interest Period
and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR
Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base
Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance with the Agreement,
which determination shall be conclusive in the absence of manifest error.

16

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

“LIBOR Rate Loan” means each portion of an Advance that bears interest at a rate
determined by reference to the LIBOR Rate.
“LIBOR Rate Margin” means 2.50 percentage points.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing
lease having substantially the same economic effect as any of the foregoing.
“Loan Account” has the meaning specified therefor in Section 2.9 of the
Agreement.
“Loan Documents” means the Agreement, the Disclosure Letter, any Borrowing Base
Certificate, the Controlled Account Agreements, the Control Agreements, the
Copyright Security Agreement, the Fee Letter, the Guaranty, the Intercompany
Subordination Agreement, the Letters of Credit, the Mortgages, the Security
Agreement, any note or notes executed by any Borrower in connection with the
Agreement and payable to any member of the Lender Group, any letter of credit
application or letter of credit agreement entered into by any Borrower in
connection with the Agreement, and any other instrument or agreement entered
into, now or in the future, by Parent or any of its Subsidiaries and any member
of the Lender Group in connection with the Agreement.
“Loan Party” means any Borrower or any Guarantor.
“Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
“Material Adverse Change” means (a) a material adverse change in the business,
operations, results of operations, assets, liabilities or financial condition of
Parent and its Subsidiaries, taken as a whole, (b) a material impairment of
Parent’s and its Subsidiaries’ ability to perform their obligations under the
Loan Documents to which they are parties or of the Lender Group’s ability to
enforce the Obligations or realize upon the Collateral, or (c) a material
impairment of the enforceability or priority of Agent’s Liens with respect to
the Collateral as a result of an action or failure to act on the part of Parent
or its Subsidiaries.
“Material Contract” means, with respect to any Person, any material definitive
agreement as described in Item 1.01 of Form 8-K used by reporting companies
under Sections 13 or 15(d) of the Securities Exchange Act of 1934, the loss of
which could reasonably be expected to result in a Material Adverse Change.
“Maturity Date” has the meaning specified therefor in Section 3.3 of the
Agreement.
“Maximum Revolver Amount” means $35,000,000, which amount may be increased in
accordance with Section 2.15 of the Agreement or decreased by the amount of
reductions in the Revolver Commitments made in accordance with Section 2.4(c) of
the Agreement.
“Moody’s” has the meaning specified therefor in the definition of Cash
Equivalents.
“Mortgage Policy” has the meaning specified therefor in Schedule 3.1(v).
“Mortgages” means, individually and collectively, one or more mortgages, deeds
of trust, or deeds

17

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

to secure debt, executed and delivered by a Loan Party in favor of Agent, in
form and substance reasonably satisfactory to Agent, that encumber the Real
Property Collateral.
“Net Liquidation Percentage” means the percentage of the book value of
Borrowers’ Inventory that is estimated to be recoverable in an orderly
liquidation of such Inventory net of all associated costs and expenses of such
liquidation, such percentage to be as determined from time to time by an
appraisal company selected by Agent.
“Obligations” means (a) all loans (including the Advances (inclusive of
Protective Advances and Swing Loans)), debts, principal, interest (including any
interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Reimbursement Undertakings or with respect to Letters of Credit
(irrespective of whether contingent), premiums, liabilities (including all
amounts charged to the Loan Account pursuant to the Agreement), obligations
(including indemnification obligations), fees (including the fees provided for
in the Fee Letter), Lender Group Expenses (including any fees or expenses that
accrue after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), guaranties, covenants, and duties of any kind and description owing
by any Loan Party pursuant to or evidenced by the Agreement or any of the other
Loan Documents and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and including all interest not paid when due and all other
expenses or other amounts that any Loan Party is required to pay or reimburse by
the Loan Documents or by law or otherwise in connection with the Loan Documents,
(b) all debts, liabilities, or obligations (including reimbursement obligations,
irrespective of whether contingent) owing by any Borrower or any other Loan
Party to an Underlying Issuer now or hereafter arising from or in respect of
Underlying Letters of Credit, and (c) all Bank Product Obligations. Any
reference in the Agreement or in the Loan Documents to the Obligations shall
include all or any portion thereof and any extensions, modifications, renewals,
or alterations thereof, both prior and subsequent to any Insolvency Proceeding.
“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.
“Originating Lender” has the meaning specified therefor in Section 13.1(e) of
the Agreement.
“Overadvance” has the meaning specified therefor in Section 2.5 of the
Agreement.
“Parent” has the meaning specified therefor in the preamble to the Agreement.
“Participant” has the meaning specified therefor in Section 13.1(e) of the
Agreement.
“Participant Register” has the meaning specified therefor in Section 13.1(e) of
the Agreement.
“Patriot Act” has the meaning specified therefor in Section 4.18 of the
Agreement.
“Payoff Date” means the first date on which all of the Obligations are paid in
full and the Commitments of the Lenders are terminated.
“Permitted Acquisition” means any Acquisition so long as:
(a)    no Default or Event of Default shall have occurred and be continuing or
would result from the consummation of the proposed Acquisition and the proposed
Acquisition is consensual,

18

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

(b)    no Indebtedness will be incurred, assumed, or would exist with respect to
Parent or its Subsidiaries as a result of such Acquisition, other than
Indebtedness permitted under clause (f) of the definition of Permitted
Indebtedness and no Liens will be incurred, assumed, or would exist with respect
to the assets of Parent or its Subsidiaries as a result or such Acquisition
other than Permitted Liens,
(c)    Borrowers shall have Availability plus Qualified Cash in an amount equal
to or greater than $25,000,000 (of which at least $15,000,000 shall be in the
form of Availability) immediately prior to and immediately after giving effect
to the consummation of the proposed Acquisition,
(d)    Borrowers have provided Agent with written notice of the proposed
Acquisition at least 15 Business Days prior to the anticipated closing date of
the proposed Acquisition and, not later than 5 Business Days prior to the
anticipated closing date of the proposed Acquisition, copies of the acquisition
agreement and other material documents relative to the proposed Acquisition, and
(e)    the assets being acquired (other than a de minimis amount of assets in
relation to the Loan Parties’ total assets), or the Person whose Stock is being
acquired, are useful in or engaged in, as applicable, the business of Parent and
its Subsidiaries or a business reasonably related or ancillary thereto,
“Permitted Discretion” means a determination made in the exercise of reasonable
(from the perspective of a secured lender) business judgment.
“Permitted Dispositions” means:
(a)    sales, abandonment, or other dispositions of Equipment that is
substantially worn, damaged, or obsolete in the ordinary course of business,
(b)    sales of Inventory to buyers in the ordinary course of business,
(c)    the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of the Agreement or the other Loan Documents,
(d)    the licensing, on a non-exclusive basis, of patents, trademarks,
copyrights, and other intellectual property rights in the ordinary course of
business,
(e)    the granting of Permitted Liens,
(f)    the sale or discount, in each case without recourse, of Accounts arising
in the ordinary course of business, but only in connection with the compromise
or collection thereof,
(g)    any involuntary loss, damage or destruction of property,
(h)    any involuntary condemnation, seizure or taking, by exercise of the power
of eminent domain or otherwise, or confiscation or requisition of use of
property,
(i)    the leasing or subleasing of assets of Parent or its Subsidiaries in the
ordinary course of business,
(j)    the sale or issuance of Stock (other than Prohibited Preferred Stock) of
Parent,
(k)    the lapse of registered patents, trademarks and other intellectual
property of Parent

19

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

and its Subsidiaries to the extent not economically desirable in the conduct of
their business and so long as such lapse is not materially adverse to the
interests of the Lenders,
(l)    the making of a Restricted Junior Payment that is expressly permitted to
be made pursuant to the Agreement,
(m)    the making of a Permitted Investment, and
(n)    dispositions of assets acquired by Parent and its Subsidiaries pursuant
to a Permitted Acquisition consummated within 12 months of the date of the
proposed Disposition (the “Subject Permitted Acquisition”) so long as (i) the
consideration received for the assets to be so disposed is at least equal to the
fair market value thereof, (ii) the assets to be so disposed are not necessary
or economically desirable in connection with the business of Parent Borrowers
and its Subsidiaries, and (iii) the assets to be so disposed are readily
identifiable as assets acquired pursuant to the Subject Permitted Acquisition,
and
(o)    a transfer of assets (i) between or among Parent and its wholly-owned
Subsidiaries that are Loan Parties or (ii) between any wholly owned Subsidiaries
of Parent that are not Loan Parties, and
(p)    dispositions of assets (other than Accounts, intellectual property,
licenses, Stock of Subsidiaries of Parent, or Material Contracts) not otherwise
permitted in clauses (a) through (0) above so long as made at fair market value
and the aggregate fair market value of all assets disposed of in all such
dispositions since the Closing Date (including the proposed disposition) would
not exceed $3,000,000.
“Permitted Indebtedness” means:
(a)    Indebtedness evidenced by the Agreement or the other Loan Documents, as
well as Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit,
(b)    Indebtedness set forth on Schedule 4.19 of the Disclosure Letter and any
Refinancing Indebtedness in respect of such Indebtedness,
(c)    Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in
respect of such Indebtedness,
(d)    endorsement of instruments or other payment items for deposit,
(e)    Indebtedness consisting of (i) unsecured guarantees incurred in the
ordinary course of business with respect to surety and appeal bonds, performance
bonds, bid bonds, appeal bonds, completion guarantee and similar obligations;
(ii) unsecured guarantees arising with respect to customary indemnification
obligations to purchasers in connection with Permitted Dispositions; (iii)
unsecured guarantees with respect to Indebtedness of Parent or one of its
Subsidiaries, to the extent that the Person that is obligated under such
guaranty could have incurred such underlying Indebtedness, and (iv) unsecured
guarantees with respect to Indebtedness of a Subsidiary of Parent that is a
Foreign Subsidiary and is not a Loan Party so long as (1) no Event of Default
has occurred and is continuing or would result therefrom, and (2) Borrowers have
Availability plus Qualified Cash in an amount equal to or greater than
$25,000,000 (of which at least $15,000,000 shall be in the form of Availability)
immediately after giving effect to each such guaranty,
(f)    Acquired Indebtedness in an amount not to exceed $25,000,000 outstanding
at any one time,

20

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

(g)    Indebtedness incurred in the ordinary course of business under
performance, surety, statutory, and appeal bonds,
(h)    Indebtedness owed to any Person providing property, casualty, liability,
or other insurance to Parent or any of its Subsidiaries, so long as the amount
of such Indebtedness is not in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the year in
which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year,
(i)    the incurrence by Parent or any of its Subsidiaries of Indebtedness under
Hedge Agreements that are incurred for the bona fide purpose of hedging the
interest rate, commodity, or foreign currency risks associated with Parent’s and
its Subsidiaries’ operations and not for speculative purposes,
(j)    Indebtedness incurred in respect of credit cards, credit card processing
services, debit cards, stored value cards, purchase cards (including so-called
“procurement cards” or “P-cards”), or Cash Management Services, in each case,
incurred in the ordinary course of business,
(k)    unsecured Indebtedness of Parent or its Subsidiaries in respect of
Earn-Outs owing to sellers of assets or Equity Interests to Parent or its
Subsidiaries that is incurred in connection with the consummation of one or more
Permitted Acquisitions,
(l)    obligations of Parent or any of its Subsidiaries in respect of foreign
letters of credit, guarantees or performance bonds in existence on the Closing
Date and issued, made, or incurred for the benefit of any Foreign Subsidiary to
cover liabilities related to the Foreign Subsidiaries’ operations outside the
United States, in an aggregate amount not to exceed $5,000,000 and any
Refinancing Indebtedness in respect of such Indebtedness,
(m)    contingent liabilities in respect of any indemnification obligation,
adjustment of purchase price, non-compete, or similar obligations of Parent or
the applicable Loan Party incurred in connection with the consummation of one or
more Permitted Acquisitions,
(n)    Indebtedness composing Permitted Investments,
(o)    unsecured Indebtedness incurred by Parent or its Subsidiaries (other than
Foreign Subsidiaries) (i) in an aggregate amount not to exceed $2,000,000 at any
time outstanding so long as no Event of Default has occurred and is continuing
or would result therefrom, or (ii) in an amount in excess of the amount set
forth in clause (i) so long as (x) no Event of Default has occurred and is
continuing or would result therefrom, (y) such Indebtedness is subordinated in
right of payment to the Obligations on terms and conditions reasonably
satisfactory to Agent, and (z) such Indebtedness is otherwise on terms and
conditions reasonably acceptable to Agent.
(p)    secured Indebtedness incurred by Parent or its Subsidiaries (other than
Foreign Subsidiaries) so long as (i) no Event of Default has occurred and is
continuing or would result therefrom, (ii) such Indebtedness is subordinated in
right of payment to the Obligations on terms and conditions reasonably
satisfactory to Agent and the Liens securing such Indebtedness are subordinated
to the Agent’s Liens on terms and conditions reasonably satisfactory to Agent;
(iii) such Indebtedness is otherwise on terms and conditions reasonably
acceptable to Agent, and (iv) the aggregate principal amount for all such
secured Indebtedness does not exceed $20,000,000 at any one time outstanding,
and
(q)    secured and unsecured Indebtedness incurred by any Foreign Subsidiary,
including any Indebtedness of the type described in clause (i) of this
definition, so long as the aggregate principal

21

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

amount of all such Indebtedness at any one time outstanding does not exceed 10%
of the fair market value of the consolidated total assets of Parent and its
Subsidiaries, as reflected on the most recent financial statements delivered to
Agent pursuant to Section 5.1.
“Permitted Intercompany Advances” means loans made by (a) a Loan Party to
another Loan Party, (b) a Subsidiary of Parent that is not a Loan Party to
another Subsidiary of Parent that is not a Loan Party, (c) a Subsidiary of
Parent that is not a Loan Party to a Loan Party, so long as the parties thereto
are party to the Intercompany Subordination Agreement, and (d) a Loan Party to a
Foreign Subsidiary that is not a Loan Party so long as (i) no Event of Default
has occurred and is continuing or would result therefrom, and (ii) Borrowers
have Availability plus Qualified Cash in an amount equal to or greater than
$25,000,000 (of which at least $15,000,000 shall be in the form of Availability)
immediately after giving effect to each such loan.
“Permitted Investments” means:
(a)    Investments in cash and Cash Equivalents,
(b)    Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business,
(c)    advances made in connection with purchases of goods or services in the
ordinary course of business,
(d)    Investments received in settlement of amounts due to any Loan Party or
any of its Subsidiaries effected in the ordinary course of business or owing to
any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings
involving an Account Debtor or upon the foreclosure or enforcement of any Lien
in favor of any Loan Party or any of its Subsidiaries,
(e)    Investments owned by any Loan Party or any of its Subsidiaries on the
Closing Date and set forth on Schedule P-1 of the Disclosure Letter,
(f)    guarantees permitted under the definition of Permitted Indebtedness, and
unsecured guarantees with respect to obligations (which do not constitute
Indebtedness) of a Foreign Subsidiary that is not a Loan Party so long as (i) no
Event of Default has occurred and is continuing or would result therefrom, and
(ii) Borrowers have Availability plus Qualified Cash in an amount equal to or
greater than $25,000,000 (of which at least $15,000,000 shall be in the form of
Availability) immediately after giving effect to each such guaranty,
(g)    Permitted Intercompany Advances,
(h)    Stock or other securities acquired in connection with the satisfaction or
enforcement of Indebtedness or claims due or owing to any Loan Party or any of
its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside
the ordinary course of business) or as security for any such Indebtedness or
claims,
(i)    deposits of cash made in the ordinary course of business to secure
performance of operating leases,
(j)    non-cash loans to employees, officers, and directors of Parent for the
purpose of purchasing Stock in Parent so long as the proceeds of such loans are
used in their entirety to purchase such stock in Parent,

22

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

(k)    Permitted Acquisitions,
(l)    Investments in the form of capital contributions and the acquisition of
Stock made by any Loan Party (i) in any other Loan Party (other than capital
contributions to or the acquisition of Stock of Parent), or (ii) in a Foreign
Subsidiary that is not a Loan Party so long as (i) no Event of Default has
occurred and is continuing or would result therefrom, and (ii) Borrowers have
Availability plus Qualified Cash in an amount equal to or greater than
$25,000,000 (of which at least $15,000,000 shall be in the form of Availability)
immediately after giving effect to each such investment in such Foreign
Subsidiary,
(m)    Investments resulting from entering into (i) Bank Product Agreements, or
(ii) agreements relative to Indebtedness that is permitted under clause (i) of
the definition of Permitted Indebtedness,
(n)    Investments held by a Person acquired in a Permitted Acquisition to the
extent that such Investments were not made in contemplation of or in connection
with such Permitted Acquisition and were in existence on the date of such
Permitted Acquisition, and
(o)    so long as no Event of Default has occurred and is continuing or would
result therefrom, any other Investments in an aggregate amount not to exceed
$5,000,000 during the term of the Agreement.
“Permitted Liens” means
(a)    Liens granted to, or for the benefit of, Agent to secure the Obligations,
(b)    Liens for unpaid taxes, assessments, or other governmental charges or
levies that either (i) are not yet delinquent, or (ii) are not subject to
penalties or interest for non payment, or (iii) are being contested or resolved
in good faith by appropriate proceedings; provided that any reserve or other
appropriate provision as is required in conformity with GAAP has been made
therefor,
(c)    judgment Liens arising solely as a result of the existence of judgments,
orders, or awards that do not constitute an Event of Default under Section 8.3
of the Agreement,
(d)    Liens set forth on Schedule P-2 of the Disclosure Letter; provided,
however, that to qualify as a Permitted Lien, any such Lien described on
Schedule P-2 of the Disclosure Letter shall only secure the Indebtedness that it
secures on the Closing Date and any Refinancing Indebtedness in respect thereof,
(e)    the interests of lessors under operating leases and non-exclusive
licensors under license agreements,
(f)    purchase money Liens or the interests of lessors under Capital Leases to
the extent that such Liens or interests secure Permitted Purchase Money
Indebtedness and so long as (i) such Lien attaches only to the asset purchased
or acquired and the proceeds thereof, and (ii) such Lien only secures the
Indebtedness that was incurred to acquire the asset purchased or acquired or any
Refinancing Indebtedness in respect thereof,
(g)    Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers, incurred in the
ordinary course of business and not in connection with the borrowing of money,
and which Liens either (i) are for sums not yet delinquent, or (ii)

23

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

are the subject of Permitted Protests,
(h)    Liens on amounts deposited to secure Parent’s and its Subsidiaries’
obligations in connection with worker’s compensation or other unemployment
insurance,
(i)    Liens on amounts deposited to secure Parent’s and its Subsidiaries’
obligations in connection with the making or entering into of bids, tenders, or
leases in the ordinary course of business and not in connection with the
borrowing of money,
(j)    Liens on amounts deposited to secure Parent’s and its Subsidiaries’
reimbursement obligations with respect to surety, performance or appeal bonds
obtained in the ordinary course of business,
(k)    with respect to any Real Property, easements, rights of way, and zoning
restrictions that do not materially interfere with or impair the use or
operation thereof,
(l)    non-exclusive licenses of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business,
(m)    Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is the subject of permitted Refinancing Indebtedness and
so long as the replacement Liens only encumber those assets that secured the
original Indebtedness,
(n)    rights of setoff or bankers’ liens upon deposits of cash in favor of
banks or other depository institutions, solely to the extent incurred in
connection with the maintenance of such deposit accounts in the ordinary course
of business,
(o)    Liens granted in the ordinary course of business on the unearned portion
of insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under the definition of Permitted Indebtedness,
(p)    Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods,
(q)    Liens solely on any cash earnest money deposits made by Parent or any of
its Subsidiaries in connection with any letter of intent or purchase agreement
with respect to a Permitted Acquisition,
(r)    Liens assumed by Parent or its Subsidiaries in connection with a
Permitted Acquisition that secure Acquired Indebtedness,
(s)    Liens on assets of Parent or any of its Subsidiaries securing
Indebtedness permitted pursuant to clauses (p) and/or (q) of the definition of
“Permitted Indebtedness”,
(t)    Liens on assets of Parent or any of its Subsidiaries securing
Indebtedness permitted pursuant to clause (l) of the definition of “Permitted
Indebtedness”, to the extent such Liens are in existence as of the Closing Date
and any Refinancing Indebtedness in respect of such Indebtedness, and
(u)    other Liens which do not secure Indebtedness for borrowed money or
letters of credit and as to which the aggregate amount of the obligations
secured thereby does not exceed $1,000,000.
“Permitted Preferred Stock” means and refers to any Preferred Stock issued by
Parent (and not by

24

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

one or more of its Subsidiaries) that is not Prohibited Preferred Stock.
“Permitted Protest” means the right of Parent or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes, or
rental payment, provided that (a) a reserve with respect to such obligation is
established on Parent’s or its Subsidiaries’ books and records in such amount as
is required under GAAP, (b) any such protest is instituted promptly and
prosecuted diligently by Parent or its Subsidiary, as applicable, in good faith,
and (c) Agent is satisfied that, while any such protest is pending, there will
be no impairment of the enforceability, validity, or priority of any of Agent’s
Liens.
“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate
principal amount outstanding at any one time not in excess of $5,000,000.
“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.
“Preferred Stock” means, as applied to the Stock of any Person, the Stock of any
class or classes (however designated) that is preferred with respect to the
payment of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Person, over shares of Stock of
any other class of such Person.
“Prohibited Preferred Stock” means any Preferred Stock that by its terms is
mandatorily redeemable or subject to any other payment obligation (including any
obligation to pay dividends, other than dividends of shares of Preferred Stock
of the same class and series payable in kind or dividends of shares of common
stock) on or before a date that is less than 91 days after the Maturity Date,
or, on or before the date that is less than 91 days after the Maturity Date, is
redeemable at the option of the holder thereof for cash or assets or securities
(other than distributions in kind of shares of Preferred Stock of the same class
and series or of shares of common stock). Notwithstanding the preceding
sentence, any Preferred Stock that would constitute Prohibited Preferred Stock
solely because the holders of the Preferred Stock have the right to require
Parent or its applicable Subsidiary to repurchase such Preferred Stock upon the
occurrence of a change of control or an asset sale will not constitute
Prohibited Preferred Stock if the terms of such Preferred Stock provide that
Parent or such Subsidiary may not repurchase or redeem any such Preferred Stock
pursuant to such provisions unless such repurchase or redemption complies with
this Agreement.
“Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a basis consistent
with Parent’s historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.
“Pro Rata Share” means, as of any date of determination:
(a)    with respect to a Lender’s obligation to make Advances and right to
receive payments of principal, interest, fees, costs, and expenses with respect
thereto, (i) prior to the Revolver Commitments being terminated or reduced to
zero, the percentage obtained by dividing (y) such Lender’s Revolver Commitment,
by (z) the aggregate Revolver Commitments of all Lenders, and (ii) from and
after the time that the Revolver Commitments have been terminated or reduced to
zero, the percentage obtained by dividing (y) the outstanding principal amount
of such Lender’s Advances by (z) the outstanding principal amount of all
Advances,

25

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

(b)    with respect to a Lender’s obligation to participate in Letters of Credit
and Reimbursement Undertakings, to reimburse the Issuing Lender, and right to
receive payments of fees with respect thereto, (i) prior to the Revolver
Commitments being terminated or reduced to zero, the percentage obtained by
dividing (y) such Lender’s Revolver Commitment, by (z) the aggregate Revolver
Commitments of all Lenders, and (ii) from and after the time that the Revolver
Commitments have been terminated or reduced to zero, the percentage obtained by
dividing (y) the outstanding principal amount of such Lender’s Advances by (z)
the outstanding principal amount of all Advances; provided, however, that if all
of the Advances have been repaid in full and Letters of Credit remain
outstanding, Pro Rata Share under this clause shall be determined based upon
subclause (i) of this clause as if the Revolver Commitments had not been
terminated or reduced to zero and based upon the Revolver Commitments as they
existed immediately prior to their termination or reduction to zero.
(c)    [reserved] and
(d)    with respect to all other matters as to a particular Lender (including
the indemnification obligations arising under Section 15.7 of the Agreement),
(i) prior to the Revolver Commitments being terminated or reduced to zero, the
percentage obtained by dividing (y) such Lender’s Revolver Commitment, by (z)
the aggregate amount of Revolver Commitments of all Lenders, and (ii) from and
after the time that the Revolver Commitments have been terminated or reduced to
zero, the percentage obtained by dividing (y) the outstanding principal amount
of such Lender’s Advances, by (z) the outstanding principal amount of all
Advances, provided, however, that if all of the Advances have been repaid in
full and Letters of Credit remain outstanding, Pro Rata Share under this clause
shall be determined based upon subclause (i) of this clause as if the Revolver
Commitments had not been terminated or reduced to zero and based upon the
Revolver Commitments as they existed immediately prior to their termination or
reduction to zero.
“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of
the Agreement.
“Purchase Money Indebtedness” means Indebtedness (other than the Obligations,
but including Capitalized Lease Obligations), incurred at the time of, or within
90 days after, the acquisition of any fixed assets for the purpose of financing
all or any part of the acquisition cost thereof.
“Purchase Price” means, with respect to any Acquisition, an amount equal to the
aggregate consideration, whether cash, property or securities (including the
fair market value of any Equity Interests of Parent issued in connection with
such Acquisition and including the maximum amount of Earn-Outs), paid or
delivered by Parent or one of its Subsidiaries in connection with such
Acquisition (whether paid at the closing thereof or payable thereafter and
whether fixed or contingent), but excluding therefrom (a) any cash of the seller
and its Affiliates used to fund any portion of such consideration and (b) any
cash or Cash Equivalents acquired in connection with such Acquisition.
“Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of the Loan Parties that is in Deposit
Accounts or in Securities Accounts, or any combination thereof, and which such
Deposit Account or Securities Account is the subject of a Control Agreement and
is maintained by a branch office of the bank or securities intermediary located
within the United States.
“Real Property” means any estates or interests in real property now owned or
hereafter acquired by Parent or its Subsidiaries and the improvements thereto.
“Real Property Collateral” means the Real Property identified on Schedule R-1 of
the Disclosure Letter and any Real Property hereafter acquired by any Loan
Party, to the extent that it is required to become

26

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

collateral pursuant to Sections 5.11 or 5.12 of the Agreement.
“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.
“Refinancing Indebtedness” means refinancings, renewals, or extensions of
Indebtedness so long as:
(a)    such refinancings, renewals, or extensions do not result in an increase
in the principal amount of the Indebtedness so refinanced, renewed, or extended,
other than by the amount of premiums paid thereon and the fees and expenses
incurred in connection therewith and by the amount of unfunded commitments with
respect thereto,
(b)    such refinancings, renewals, or extensions do not result in a shortening
of the average weighted maturity (measured as of the refinancing, renewal, or
extension) of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions that, taken as a whole, are or could reasonably be
expected to be materially adverse to the interests of the Lenders,
(c)    if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness, and
(d)    the Indebtedness that is refinanced, renewed, or extended is not recourse
to any Person that is liable on account of the Obligations other than those
Persons which were obligated with respect to the Indebtedness that was
refinanced, renewed, or extended.
“Reimbursement Undertaking” has the meaning specified therefor in Section
2.11(a) of the Agreement.
“Related Fund” means, with respect to any Lender that is an investment fund, any
other investment fund that invests in commercial loans and that is managed or
advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials required by Environmental Laws.
“Rent Reserve” means a reserve established by Agent in an amount equal to the
sum of (a) all past due rent and other amounts owing by a Loan Party to any
landlord, warehouseman, processor, repairman, mechanic, shipper, freight
forwarder, broker or other Person who possesses any Collateral or could assert a
Lien on any Collateral; and (b) a reserve at least equal to 4 months rent and
other charges that could be payable to any such Person, unless such Person has
executed and delivered a Collateral Access Agreement.
“Replacement Lender” has the meaning specified therefor in Section 2.13(b) of
the Agreement.

27

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

“Report” has the meaning specified therefor in Section 15.16 of the Agreement.
“Required Availability” means that the sum of (a) Excess Availability, plus (b)
Qualified Cash exceeds $75,000,000 (of which at least $35,000,000 shall be in
the form of Excess Availability).
“Required Lenders” means, at any time, Lenders whose aggregate Pro Rata Shares
(calculated under clause (d) of the definition of Pro Rata Shares) exceed 50%;
provided, however, that at any time there are 2 or more Lenders, “Required
Lenders” must include at least 2 Lenders.
“Restricted Junior Payment” means to (a) declare or pay any dividend or make any
other payment or distribution on account of Stock issued by Parent (including
any payment in connection with any merger or consolidation involving Parent) or
to the direct or indirect holders of Stock issued by a Borrower in their
capacity as such (other than dividends or distributions payable in Stock (other
than Prohibited Preferred Stock) issued by Parent, or (b) purchase, redeem, or
otherwise acquire or retire for value (including in connection with any merger
or consolidation involving Parent) any Stock issued by Parent.
“Revolver Commitment” means, with respect to each Lender, its Revolver
Commitment, and, with respect to all Lenders, their Revolver Commitments, in
each case as such Dollar amounts are set forth beside such Lender’s name under
the applicable heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender under the Agreement, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1 of the Agreement or
pursuant to the provisions of Sections 2.4(c) or 2.15 of the Agreement.
“Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding Advances, plus (b) the amount of the Letter of Credit
Usage.
“Revolver Usage Month” means any month during which there was any Revolver Usage
of at least $1,000,000.
“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is subject to a
country sanctions program administered and enforced by OFAC.
“Sanctioned Person” means a person named on the list of Specially Designated
Nationals maintained by OFAC.
“S&P” has the meaning specified therefor in the definition of Cash Equivalents.
“SEC” means the United States Securities and Exchange Commission and any
successor thereto.
“Securities Account” means a securities account (as that term is defined in the
Code).
“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.
“Security Agreement” means a security agreement, dated as of even date with the
Agreement, in form and substance reasonably satisfactory to Agent, executed and
delivered by Borrowers and Guarantors to Agent.
“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

28

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

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.
“Shipped Goods” means Inventory of a Borrower or its Subsidiaries that has been
shipped to a customer, in connection with being sold, but which has not yet been
invoiced, on terms and conditions that are consistent with the “shipped not
invoiced” procedure that is set forth on Schedule S-1 of the Disclosure Letter.
“Silicon Federal” has the meaning specified therefor in the preamble to the
Agreement.
“Solvent” means, with respect to any Person on a particular date, that, at fair
valuations, the sum of such Person’s assets is greater than all of such Person’s
debts.
“Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).
“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the shares of Stock having ordinary voting power to elect a majority of
the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company, or other entity.
“Swing Lender” means WFCF or any other Lender that, at the request of Borrowers
and with the consent of Agent agrees, in such Lender’s sole discretion, to
become the Swing Lender under Section 2.3(b) of the Agreement.
“Swing Loan” has the meaning specified therefor in Section 2.3(b) of the
Agreement.
“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein with respect to
such payments and all interest, penalties or similar liabilities with respect
thereto; provided, however, that Taxes shall exclude Excluded Taxes.
“Tax Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.
“Underlying Issuer” means Wells Fargo or one of its Affiliates.
“Underlying Letter of Credit” means a Letter of Credit that has been issued by
an Underlying Issuer.
“United States” means the United States of America.
“Voidable Transfer” has the meaning specified therefor in Section 17.8 of the
Agreement.
“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.
“Wisconsin Wage Lien” means the lien that may be imposed from time to time
against Parent or its Subsidiaries by the Wisconsin Department of Workforce
Development, under Section 109.9 of the Wisconsin Code in connection with wage
claim disputes with respect to Wisconsin employees.
“WFCF” means Wells Fargo Capital Finance, LLC, a Delaware limited liability
company.

29

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

Schedule 3.1
Each of the following has been satisfied to the reasonable satisfaction of each
Lender as of the Closing Date:
(a)the Closing Date shall occur on or before December 5, 2011;
(b)Agent shall have received a letter duly executed by each Borrower and each
Guarantor authorizing Agent to file appropriate financing statements in such
office or offices as may be necessary or, in the opinion of Agent, desirable to
perfect the security interests to be created by the Loan Documents;
(c)Agent shall have received evidence that appropriate financing statements have
been duly filed in such office or offices as may be necessary or, in the opinion
of Agent, desirable to perfect the Agent’s Liens in and to the Collateral, and
Agent shall have received searches reflecting the filing of all such financing
statements;
(d)Agent shall have received each of the following documents, in form and
substance satisfactory to Agent, duly executed, and each such document shall be
in full force and effect:
(i)the Controlled Account Agreements,
(ii)the Control Agreements,
(iii)the Security Agreement,
(iv)the Fee Letter,
(v)the Guaranty,
(vi)the Intercompany Subordination Agreement,
(vii)the Copyright Security Agreement, and
(viii)the Disclosure Letter;
(e)Agent shall have received a certificate from the Secretary of each Borrower
(i) attesting to the resolutions of such Borrower’s Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents to which such Borrower is a party, (ii) authorizing
specific officers of such Borrower to execute the same, and (iii) attesting to
the incumbency and signatures of such specific officers of such Borrower;
(f)Agent shall have received copies of each Borrower’s Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary of such Borrower;
(g)Agent shall have received a certificate of status with respect to each
Borrower, dated within 30 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of such
Borrower, which certificate shall indicate that such Borrower is in good
standing in such jurisdiction;
(h)Agent shall have received certificates of status with respect to each
Borrower, each

1

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

dated within 30 days of the Closing Date, such certificates to be issued by the
appropriate officer of the jurisdictions (other than the jurisdiction of
organization of such Borrower) in which its failure to be duly qualified or
licensed would constitute a Material Adverse Change, which certificates shall
indicate that such Borrower is in good standing in such jurisdictions;
(i)Agent shall have received a certificate from the Secretary of Guarantor (i)
attesting to the resolutions of Guarantor’s Board of Directors authorizing its
execution, delivery, and performance of the Loan Documents to which Guarantor is
a party, (ii) authorizing specific officers of Guarantor to execute the same and
(iii) attesting to the incumbency and signatures of such specific officers of
Guarantor;
(j)Agent shall have received copies of Guarantor’s Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary of Guarantor;
(k)Agent shall have received a certificate of status with respect to Guarantor,
dated within 30 days of the Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of Guarantor, which
certificate shall indicate that Guarantor is in good standing in such
jurisdiction;
(l)Agent shall have received certificates of status with respect to Guarantor,
each dated within 30 days of the Closing Date, such certificates to be issued by
the appropriate officer of the jurisdictions (other than the jurisdiction of
organization of Guarantor) in which its failure to be duly qualified or licensed
would constitute a Material Adverse Change, which certificates shall indicate
that Guarantor is in good standing in such jurisdictions;
(m)Agent shall have received certificates of insurance, together with the
endorsements thereto, as are required by Section 5.6, the form and substance of
which shall be satisfactory to Agent;
(n)Agent shall have received an opinion of Cooley LLP in form and substance
satisfactory to Agent;
(o)Borrowers shall have the Required Availability after giving effect to the
payment of all fees and expenses required to be paid by Borrowers on the Closing
Date under this Agreement or the other Loan Documents;
(p)Agent shall have completed its business, legal, and collateral due diligence,
including a collateral audit (together with updates that may be required by
Agent to refresh any previously conducted audits) and review of each Borrower’s
and its Subsidiaries’ books and records and verification of such Borrower’s
representations and warranties to Lender Group, the results of which shall be
satisfactory to Agent;
(q)Agent shall have completed (i) Patriot Act searches, OFAC/PEP searches and
customary individual background checks for each Borrower, and (ii) OFAC/PEP
searches and customary individual background searches for each Borrower’s senior
management and key principals, and Guarantor, in each case, the results of which
shall be satisfactory to Agent;
(r)Agent shall have received a set of Projections of Parent for the 2 year
period following the Closing Date (on a year by year basis, and for the 1 year
period following the Closing Date, on a quarter by quarter basis), in form and
substance (including as to scope and underlying assumptions) satisfactory to
Agent;
(s)Borrowers shall have paid all Lender Group Expenses incurred in connection
with

2

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

the transactions evidenced by this Agreement;
(t)Parent and each of its Subsidiaries shall have received all licenses,
approvals or evidence of other actions required by any Governmental Authority
(if any) in connection with the execution and delivery by Parent or its
Subsidiaries of the Loan Documents or with the consummation of the transactions
contemplated thereby;
(u)Borrowers shall have provided the reports requested by Agent that are
necessary to implemented a system of electronic collateral reporting acceptable
to Agent in order to provide electronic reporting of each of the items set forth
on Schedule 5.2, and
(v)all other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to Agent.

3

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

SCHEDULE 3.6
(a)Within 5 Business Days of the Closing Date (or such later date as permitted
by Agent in its sole discretion), Agent shall have received the Control
Agreement with respect to Parent’s Securities Account at U.S. Bank N.A. duly
executed by U.S. Bank N.A. and SVB Asset Management.
(b)Within 10 Business Days of the Closing Date (or such later date as permitted
by Agent in its sole discretion), either: (i) Agent shall have received
evidence, in form and substance satisfactory to Agent, that each of the
following UCC financing statements have been terminated:  (A) UCC Financing
Statement (#2005 1184168) filed in the Delaware Department of State against
Silicon Graphics Federal, Inc. in favor of Key Federal Finance; (B) UCC
Financing Statement (#2005 1429456) filed in the Delaware Department of State
against Silicon Graphics Federal, Inc. in favor of Key Government Finance, Inc.;
and (C) UCC Financing Statement (#2005 1454793) filed in the Delaware Department
of State against Silicon Graphics Federal, Inc. in favor of Key Equipment
Finance Inc. (collectively, the “Key Filings”); or (ii) with respect to any Key
Filing that has not been so terminated, Agent shall have received documentation
reasonably satisfactory to Agent establishing that any Liens on the Collateral
in connection with such Key Filing is limited in scope to the reasonable
satisfaction of Agent; provided, however, that notwithstanding anything in the
Agreement to the contrary, the Lender Group (or any member thereof) has no
obligation to make any Advances (or to extend any other credit hereunder) until
such time as the foregoing obligations are satisfied.
(c)Within 90 days of the Closing Date (or such later date as permitted by Agent
in its sole discretion), Borrowers shall use commercially reasonable efforts to
deliver to Agent, a duly executed Collateral Access Agreement, in form and
substance reasonably satisfactory to Agent, with respect to each of the premises
identified on Schedule E-1.
(d)Within 180 days of the Closing Date (or such later date as permitted by Agent
in its sole discretion), and to the extent such Trademarks, Patents and
Copyrights are necessary in the operation of such Grantor’s business, as
determined in such Grantor’s reasonable business judgment, Agent shall have
received evidence that the filing with the U.S. Patent & Trademark Office and
U.S. Copyright Office in respect of any Trademarks, Patents and Copyrights
acquired by the Grantors and registered in the name of a third party as of the
Closing Date have been updated to list the applicable Grantor as he registered
owner therefor.

1

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

Schedule 5.1
Deliver to Agent, with copies to each Lender, each of the financial statements,
reports, or other items set forth below at the following times in form
satisfactory to Agent:
as soon as available, but in any event within 30 days after the end of (i) each
Revolver Usage Month, and (ii) each month immediately preceding a Revolver Usage
Month
 
(a)    an unaudited consolidated balance sheet, income statement, and statement
of cash flow covering Parent’s and its Subsidiaries’ operations during such
period.
as soon as available, but in any event within 45 days after the end of each
fiscal quarter (each such date, the “Quarterly Deadline”) during each of
Parent’s fiscal years
 
(b)    an unaudited consolidated balance sheet, income statement, and statement
of cash flow covering Parent’s and its Subsidiaries’ operations during such
period, provided, however, that if Parent has filed any of the items listed in
this clause (b) in its Form 10-Q quarterly report for such fiscal quarter with
the SEC by the applicable Quarterly Deadline, then such items shall be deemed to
have been delivered to Agent and each Lender, and
(c)    Compliance Certificate, which shall include during a Financial Covenant
Period, the underlying calculations to arrive at the Fixed Charge Coverage Ratio
(such Fixed Charge Coverage Ratio calculations shall be certified for the fiscal
quarter immediately preceding the date on which a Financial Covenant Period
first begins and as of each fiscal quarter end thereafter during such Financial
Covenant Period).
as soon as available, but in any event within 90 days after the end of each of
Parent’s fiscal years (each such date, the “Annual Deadline”)
 
(d)    consolidated financial statements of Parent and its Subsidiaries for each
such fiscal year, audited by independent certified public accountants reasonably
acceptable to Agent and certified, without any qualifications (including any (A)
“going concern” or like qualification or exception, (B) qualification or
exception as to the scope of such audit, or (C) qualification which relates to
the treatment or classification of any item and which, as a condition to the
removal of such qualification, would require an adjustment to such item, the
effect of which would be to cause any noncompliance with the provisions of
Section 7), by such accountants to have been prepared in accordance with GAAP
(such audited financial statements to include a balance sheet, income statement,
statement of cash flow, and, if prepared, such accountants’ letter to
management), provided, however, that if Parent has filed any of the items listed
in this clause (d) in its Form 10-K annual report for such fiscal year with the
SEC by the applicable Annual Deadline, then such items shall be deemed to have
been delivered to Agent and each Lender, and
(e)    Compliance Certificate, which shall include during a Financial Covenant
Period, along with the underlying calculations to arrive at the Fixed Charge
Coverage Ratio (such Fixed Charge Coverage Ratio calculations shall be certified
for the fiscal quarter immediately preceding the date on which a Financial
Covenant Period first begins and as of each fiscal quarter end thereafter during
such Financial Covenant Period).

1

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

as soon as available, but in any event prior to the start of each of Parent’s
fiscal years,
 
(f)    copies of Parent’s Projections, in form and substance (including as to
scope and underlying assumptions) satisfactory to Agent, in its Permitted
Discretion, for the forthcoming 2 years, year by year, and for the forthcoming
fiscal year, quarter by quarter, certified by the chief financial officer of
Parent as being such officer’s good faith estimate of the financial performance
of Parent during the period covered thereby.
promptly, but in any event within 5 Business Days after any Borrower has
knowledge of any event or condition that constitutes a Default or an Event of
Default,
 
(g)    notice of such event or condition and a statement of the curative action
that the Parent proposes to take with respect thereto.
promptly after the commencement thereof, but in any event within 5 Business Days
after the service of process with respect thereto on Parent or any of its
Subsidiaries,
 
(h)    notice of all actions, suits, or proceedings brought by or against Parent
or any of its Subsidiaries before any Governmental Authority which reasonably
could be expected to result in a Material Adverse Change.
upon the request of Agent,
 
(i)    any other information reasonably requested relating to the financial
condition of Parent or its Subsidiaries.

2

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

Schedule 5.2
Provide Agent (and if so requested by Agent, with copies for each Lender) with
each of the documents set forth below at the following times in form
satisfactory to Agent:
On the date a Borrowing is requested
(a)    if the reports set forth in items (f) through (m) below have not been
delivered to Agent within the 30 day period immediately preceding such date,
items (f), (g), (h), (i), (j), (k), (l) and (m) below.
Monthly (no later than the 10th Business Day of each fiscal month), if the
immediately preceding month was a Revolver Usage Month

(b)    the reports set forth in items (f), (g), (h), (i), (j), (k), (l) and (m)
below.
Monthly (no later than the 10th Business Day of the first two fiscal months of
each fiscal quarter), if the immediately preceding month was a Revolver Usage
Month

(c)    the reports set forth in items (d) and (e) below.
Monthly (no later than the 17th Business Day of the last fiscal month of each
fiscal quarter), if the immediately preceding month was a Revolver Usage Month

(d)    a report showing all of Borrowers’ deferred revenue detailed by account,
service adjustments and milestones; provided, such report may include Borrowers’
estimates for the fiscal month that coincides with the end of the fiscal quarter
(delivered electronically in an acceptable format in accordance with Borrowers’
electronic reporting system approved by Agent), and
(e)    a report showing all of Borrowers’ pending acceptances in connection with
equipment delivered to customers for testing and its potential sale; provided,
such report may include Borrowers’ estimates for the fiscal month that coincides
with the end of the fiscal quarter (delivered electronically in an acceptable
format in accordance with Borrowers’ electronic reporting system approved by
Agent).

1

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

Quarterly (no later than the 10th day of each fiscal quarter)

(f)    an Account roll-forward with supporting details supplied from sales
journals, collection journals, credit registers and any other records, and tied
to the beginning and ending account receivable balances of Borrowers’ general
ledger,
(g)    a detailed report regarding Borrowers’ and their Subsidiaries’ cash and
Cash Equivalents, including an indication of which amounts constitute Qualified
Cash and non-Qualified Cash,
(h)    a Borrowing Base Certificate,
(i)    a detailed aging, by total, of Borrowers’ Accounts, together with a
reconciliation and supporting documentation for any reconciling items noted
(delivered electronically in an acceptable format in accordance with Borrowers’
electronic reporting system approved by Agent),
(j)    a detailed Inventory system/perpetual report together with a
reconciliation to Borrowers’ general ledger accounts (delivered electronically
in an acceptable format in accordance with Borrowers’ electronic reporting
system approved by Agent), and
(k)    a summary aging, by vendor, of Borrowers’ and their Subsidiaries’
accounts payable and any book overdraft (delivered electronically in an
acceptable format in accordance with Borrowers’ electronic reporting system
approved by Agent) and an aging, by vendor, of any held checks.
Quarterly (no later than the 15th Business Day of each fiscal quarter)

(l)    a report regarding Borrowers’ warranty reserves for customers in the
United States together with a reconciliation to Borrowers’ general ledger
accounts, and
(m)    a report showing (i) the balance for the excess and obsolescence reserve
adjusted for custom components and stock work in process, and (ii) the amount of
the excess and obsolescence reserve broken out by the following categories: new
raw materials, remanufactured raw materials, new finished goods and
remanufactured finished goods.
(i) Monthly (no later than the 30th day of each fiscal month), if the
immediately preceding month was a Revolver Usage Month, and (ii) Quarterly (no
later than the 45th day of each fiscal quarter)

(i)    a reconciliation of Accounts, trade accounts payable, and Inventory of
Borrowers’ general ledger accounts to its sub-ledger accounts, including any
book reserves related to each category.

2

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

Upon request by Agent
(j) a report regarding Borrowers’ and their Subsidiaries’ accrued, but unpaid,
ad valorem taxes,
(k) if an Event of Default has occurred and is continuing, a detailed list of
Borrowers’ and their Subsidiaries’ customers, with address and contact
information,
(l) copies of material purchase orders and invoices for Inventory and Equipment
acquired by Borrowers or their Subsidiaries, and
(m) such other reports as to the Collateral or the financial condition of
Borrowers and their Subsidiaries, as Agent may reasonably request.

3