exv10w13






Exhibit 10.13




      




REVOLVING CREDIT AND TERM LOAN AGREEMENT




DATED AS OF SEPTEMBER 29, 2008




COMERICA BANK

AS ADMINISTRATIVE AGENT AND LEAD ARRANGER




      




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	 	Page	 
	1. DEFINITIONS
	 	 	2	 
	1.1 Certain Defined Terms
	 	 	2	 
	 
	 	 	 	 
	2. REVOLVING CREDIT
	 	 	25	 
	2.1 Commitment
	 	 	25	 
	2.2 Accrual of Interest and Maturity; Evidence of Indebtedness
	 	 	25	 
	2.3 Requests for and Refundings and Conversions of Advances
	 	 	26	 
	2.4 Disbursement of Advances
	 	 	28	 
	2.5 Swing Line
	 	 	30	 
	2.6 Interest Payments; Default Interest
	 	 	35	 
	2.7 Optional Prepayments
	 	 	36	 
	2.8 Prime-based Advance in Absence of Election or Upon Default
	 	 	37	 
	2.9 Revolving Credit Facility Fee
	 	 	37	 
	2.10 Mandatory Repayment of Revolving Credit Advances
	 	 	38	 
	2.11 Optional Reduction or Termination of Revolving Credit Aggregate Commitment

	 	 	39	 
	2.12 Use of Proceeds of Advances
	 	 	39	 
	2.13 Optional Increase in Revolving Credit Aggregate Commitment
	 	 	40	 
	 
	 	 	 	 
	3. LETTERS OF CREDIT
	 	 	41	 
	3.1 Letters of Credit
	 	 	41	 
	3.2 Conditions to Issuance
	 	 	42	 
	3.3 Notice
	 	 	43	 
	3.4 Letter of Credit Fees; Increased Costs
	 	 	43	 
	3.5 Other Fees
	 	 	45	 
	3.6 Participation Interests in and Drawings and Demands for Payment Under
Letters of Credit
	 	 	45	 
	3.7 Obligations Irrevocable
	 	 	47	 
	3.8 Risk Under Letters of Credit
	 	 	48	 
	3.9 Indemnification
	 	 	49	 
	3.10 Right of Reimbursement
	 	 	50	 
	 
	 	 	 	 
	4. TERM LOAN
	 	 	50	 
	4.1 Term Loan
	 	 	50	 
	4.2 Accrual of Interest and Maturity; Evidence of Indebtedness
	 	 	50	 
	4.3 Repayment of Principal
	 	 	51	 
	4.4 Term Loan Rate Requests; Refundings and Conversions of Advances of Term Loan

	 	 	52	 
	4.5 Prime-based Advance in Absence of Election or Upon Default
	 	 	53	 
	4.6 Interest Payments; Default Interest
	 	 	53	 
	4.7 Optional Prepayment of Term Loan
	 	 	54	 
	4.8 Mandatory Prepayment of Term Loan
	 	 	54	 
	4.9 Use of Proceeds
	 	 	55	 






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	 	 	 	Page	 
	5. CONDITIONS
	 	 	56	 
	5.1 Conditions of Initial Advances
	 	 	56	 
	5.2 Continuing Conditions
	 	 	58	 
	 
	 	 	 	 
	6. REPRESENTATIONS AND WARRANTIES
	 	 	59	 
	6.1 Corporate Authority
	 	 	59	 
	6.2 Due Authorization
	 	 	59	 
	6.3 Good Title; Leases; Assets; No Liens
	 	 	59	 
	6.4 Taxes
	 	 	60	 
	6.5 No Defaults
	 	 	60	 
	6.6 Enforceability of Agreement and Loan Documents
	 	 	60	 
	6.7 Compliance with Laws
	 	 	60	 
	6.8 Non-contravention
	 	 	61	 
	6.9 Litigation
	 	 	61	 
	6.10 Consents, Approvals and Filings, Etc.
	 	 	61	 
	6.11 Agreements Affecting Financial Condition
	 	 	61	 
	6.12 No Investment Company or Margin Stock
	 	 	61	 
	6.13 ERISA
	 	 	62	 
	6.14 Conditions Affecting Business or Properties
	 	 	62	 
	6.15 Environmental and Safety Matters
	 	 	62	 
	6.16 Subsidiaries
	 	 	63	 
	6.17 Management Agreements
	 	 	63	 
	6.18 [Intentionally Deleted
	 	 	63	 
	6.19 Franchises, Patents, Copyrights, Tradenames, etc.
	 	 	63	 
	6.20 Capital Structure
	 	 	63	 
	6.21 Accuracy of Information
	 	 	63	 
	6.22 Solvency
	 	 	64	 
	6.23 Employee Matters
	 	 	64	 
	6.24 No Misrepresentation
	 	 	64	 
	6.25 Corporate Documents and Corporate Existence
	 	 	64	 
	 
	 	 	 	 
	7. AFFIRMATIVE COVENANTS
	 	 	65	 
	7.1 Financial Statements
	 	 	65	 
	7.2 Certificates; Other Information
	 	 	65	 
	7.3 Payment of Obligations
	 	 	67	 
	7.4 Conduct of Business and Maintenance of Existence; Compliance with Laws
	 	 	67	 
	7.5 Maintenance of Property; Insurance
	 	 	67	 
	7.6 Inspection of Property; Books and Records, Discussions
	 	 	68	 
	7.7 Notices
	 	 	68	 
	7.8 Hazardous Material Laws
	 	 	69	 
	7.9 Financial Covenants
	 	 	70	 
	7.10 Governmental and Other Approvals
	 	 	70	 
	7.11 Compliance with ERISA; ERISA Notices
	 	 	70	 
	7.12 Defense of Collateral
	 	 	71	 
	7.13 Future Subsidiaries; Additional Collateral
	 	 	71	 
	7.14 Accounts
	 	 	72	 
	7.15 Use of Proceeds
	 	 	72	 






ii









 






	 	 	 	 	 
	 	 	 	Page	 
	7.17 Further Assurances and Information
	 	 	73	 
	 
	 	 	 	 
	8. NEGATIVE COVENANTS
	 	 	73	 
	8.1 Limitation on Debt
	 	 	73	 
	8.2 Limitation on Liens
	 	 	75	 
	8.3 Acquisitions
	 	 	76	 
	8.4 Limitation on Mergers, Dissolution or Sale of Assets
	 	 	76	 
	8.5 Restricted Payments
	 	 	78	 
	8.6 [Intentionally Deleted
	 	 	79	 
	8.7 Limitation on Investments, Loans and Advances
	 	 	79	 
	8.8 Transactions with Affiliates
	 	 	80	 
	8.9 Sale-Leaseback Transactions
	 	 	81	 
	8.10 Limitations on Other Restrictions
	 	 	81	 
	8.11 Prepayment of Debt
	 	 	82	 
	8.12 Amendment of Subordinated Debt Documents
	 	 	82	 
	8.13 Modification of Certain Agreements
	 	 	82	 
	8.14 Management Fees
	 	 	82	 
	8.15 Fiscal Year
	 	 	82	 
	 
	 	 	 	 
	9. DEFAULTS
	 	 	82	 
	9.1 Events of Default
	 	 	82	 
	9.2 Exercise of Remedies
	 	 	85	 
	9.3 Rights Cumulative
	 	 	86	 
	9.4 Waiver by Borrower of Certain Laws
	 	 	86	 
	9.5 Waiver of Defaults
	 	 	86	 
	9.6 Set Off
	 	 	86	 
	 
	 	 	 	 
	10. PAYMENTS, RECOVERIES AND COLLECTIONS
	 	 	87	 
	10.1 Payment Procedure
	 	 	87	 
	10.2 Application of Proceeds of Collateral
	 	 	88	 
	10.3 Pro-rata Recovery
	 	 	89	 
	 
	 	 	 	 
	11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
	 	 	89	 
	11.1 Reimbursement of Prepayment Costs
	 	 	89	 
	11.2 Eurodollar Lending Office
	 	 	90	 
	11.3 Circumstances Affecting Eurodollar-based Rate Availability
	 	 	90	 
	11.4 Laws Affecting Eurodollar-based Advance Availability
	 	 	90	 
	11.5 Increased Cost of Eurodollar-based Advances
	 	 	91	 
	11.6 Capital Adequacy and Other Increased Costs
	 	 	92	 
	11.7 Right of Lenders to Fund through Branches and Affiliates
	 	 	93	 
	11.8 Margin Adjustment
	 	 	93	 
	 
	 	 	 	 
	12. AGENT
	 	 	94	 
	12.1 Appointment of Agent
	 	 	94	 
	12.2 Deposit Account with Agent or any Lender
	 	 	94	 
	12.3 Scope of Agent’s Duties
	 	 	94	 
	12.4 Successor Agent
	 	 	95	 






iii









 






	 	 	 	 	 
	 	 	 	Page	 
	12.5 Credit Decisions
	 	 	95	 
	12.6 Authority of Agent to Enforce This Agreement
	 	 	96	 
	12.7 Indemnification of Agent
	 	 	96	 
	12.8 Knowledge of Default
	 	 	96	 
	12.9 Agent’s Authorization; Action by Lenders
	 	 	97	 
	12.10 Enforcement Actions by the Agent
	 	 	97	 
	12.11 Collateral Matters
	 	 	97	 
	12.12 Agents in their Individual Capacities
	 	 	98	 
	12.13 Agent’s Fees
	 	 	98	 
	12.14 Documentation Agent or other Titles
	 	 	98	 
	12.15 No Reliance on Agent’s Customer Identification Program
	 	 	98	 
	 
	 	 	 	 
	13. MISCELLANEOUS
	 	 	99	 
	13.1 Accounting Principles
	 	 	99	 
	13.2 Consent to Jurisdiction
	 	 	99	 
	13.3 Law of California
	 	 	100	 
	13.4 Interest
	 	 	100	 
	13.5 Closing Costs and Other Costs; Indemnification
	 	 	100	 
	13.6 Notices
	 	 	101	 
	13.7 Further Action
	 	 	102	 
	13.8 Successors and Assigns; Participations; Assignments
	 	 	102	 
	13.9 Counterparts
	 	 	106	 
	13.10 Amendment and Waiver
	 	 	106	 
	13.11 Confidentiality
	 	 	107	 
	13.12 Substitution of Lenders
	 	 	107	 
	13.13 Withholding Taxes
	 	 	108	 
	13.14 Taxes and Fees
	 	 	109	 
	13.15 WAIVER OF JURY TRIAL
	 	 	109	 
	13.16 USA Patriot Act Notice
	 	 	112	 
	13.17 Complete Agreement; Conflicts
	 	 	112	 
	13.18 Severability
	 	 	112	 
	13.19 Table of Contents and Headings; Section References
	 	 	112	 
	13.20 Construction of Certain Provisions
	 	 	112	 
	13.21 Independence of Covenants
	 	 	112	 
	13.22 Electronic Transmissions
	 	 	113	 
	13.23 Advertisements
	 	 	113	 
	13.24 Reliance on and Survival of Provisions
	 	 	113	 
	13.25 Amendment and Restatement; Assignment and Assumptions
	 	 	114	 
	13.26 Individual Employee Liability to Lenders
	 	 	114	 






iv









 





EXHIBITS




A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE

B FORM OF REVOLVING CREDIT NOTE

C FORM OF SWING LINE NOTE

D FORM OF REQUEST FOR SWING LINE ADVANCE

E FORM OF NOTICE OF LETTERS OF CREDIT

F FORM OF SECURITY AGREEMENT

G [RESERVED]

H FORM OF ASSIGNMENT AGREEMENT

I FORM OF GUARANTY

J FORM OF COVENANT COMPLIANCE REPORT

K FORM OF TERM LOAN NOTE

L FORM OF TERM LOAN RATE REQUEST

M FORM OF SWING LINE PARTICIPATION CERTIFICATE

N FORM OF NEW LENDER ADDENDUM




SCHEDULES




1









 





REVOLVING CREDIT AND TERM LOAN AGREEMENT




     This Revolving Credit and Term Loan Agreement (“Agreement”) is made as of the 29th day of
September, 2008 to be effective on the Effective Date, by and among the financial institutions from
time to time signatory hereto (individually a “Lender,” and any and all such financial institutions
collectively the “Lenders”), Comerica Bank, as Administrative Agent for the Lenders (in such
capacity, the “Agent”), Arranger, Syndication Agent and Documentation Agent, and Quinstreet, Inc.
(“Borrower”).



RECITALS




     A. Borrower and Comerica Bank entered into that certain Loan and Security Agreement dated as
of August 31, 2006 (as subsequently amended from time to time, the “Prior Credit Agreement”).



     B. Borrower now desires to amend and replace the Prior Credit Agreement with an amended and
restated credit agreement evidenced by this Agreement.



     C. Borrower has requested that the Lenders extend to it credit and letters of credit on the
terms and conditions set forth herein.



     D. The Lenders are prepared to extend such credit as aforesaid, but only on the terms and
conditions set forth in this Agreement.



     NOW THEREFORE, in consideration of the covenants contained herein, Borrower, the Lenders, and
the Agent agree as follows:



1. DEFINITIONS.




     1.1 Certain Defined Terms. For the purposes of this Agreement the following terms will have the following meanings:



     “Account(s)” shall mean any account or account receivable as defined under the UCC, including
without limitation, with respect to any Person, any right of such Person to payment for goods sold
or leased or for services rendered.



     “Account Control Agreement(s)” shall mean those certain account control agreements, or similar
agreements that are delivered pursuant to Section 7.14 of this Agreement or otherwise, as the same
may be amended, restated or otherwise modified from time to time.



     “Account Debtor” shall mean the party who is obligated on or under any Account.



     “Adjusted Quick Ratio” shall mean as of any date of determination, a ratio the numerator of
which is Cash plus trade accounts less than ninety (90) days from invoice date and the denominator
of which is Current Liabilities plus the face amount of any Letters of Credit less the
current portion of Deferred Revenue, all as determined on a consolidated basis for Borrower
and its consolidated Subsidiaries in accordance with GAAP.



2









 





     “Advance(s)” shall mean, as the context may indicate, a borrowing requested by the Borrower,
and made by the Revolving Credit Lenders under Section 2.1 hereof, the Term Loan Lenders under
Section 4.1 hereof, or the Swing Line Lender under Section 2.5 hereof, including without limitation
any readvance, refunding or conversion of such borrowing pursuant to Section 2.3, 2.5 or 4.4
hereof, and any advance deemed to have been made in respect of a Letter of Credit under Section
3.6(a) hereof, and shall include, as applicable, a Eurodollar-based Advance, a Prime-based Advance
and a Quoted Rate Advance.



     “Affected Lender” shall have the meaning set forth in Section 13.12 hereof.



     “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly
controlling (including but not limited to all directors and officers of such Person), controlled
by, or under direct or indirect common control with such Person. A Person shall be deemed to
control another Person for the purposes of this definition if such Person possesses, directly or
indirectly, the power (i) to vote 30% or more of the Equity Interests having ordinary voting power
for the election of directors or managers of such other Person or (ii) to direct or cause the
direction of the management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.



     “Agent” shall have the meaning set forth in the preamble, and include any successor agents
appointed in accordance with Section 12.4 hereof.



     “Agent’s Correspondent” shall mean for Eurodollar-based Advances, Agent’s Grand Cayman Branch
(or for the account of said branch office, at Agent’s main office in San Jose, California, United
States).



     “Alternate Base Rate” shall mean, for any day, an interest rate per annum equal to the Federal
Funds Effective Rate in effect on such day, plus one percent (1.0%).



     “Applicable Fee Percentage” shall mean, as of any date of determination thereof, the
applicable percentage used to calculate certain of the fees due and payable hereunder, determined
by reference to the appropriate columns in the Pricing Matrix attached to this Agreement as
Schedule 1.1.



     “Applicable Interest Rate” shall mean, (i) with respect to each Revolving Credit Advance and
Term Loan Advance, the Eurodollar-based Rate or the Prime-based Rate, and (ii) with respect to each
Swing Line Advance, the Prime-based Rate or, the Quoted Rate, in each case as selected by the
Borrower from time to time and subject to the terms and conditions of this Agreement.



     “Applicable Margin” shall mean, as of any date of determination thereof, the applicable
interest rate margin, determined by reference to the appropriate columns in the Pricing Matrix
attached to this Agreement as Schedule 1.1, such Applicable Margin to be adjusted solely as
specified in Section 11.8 hereof.



     “Applicable Measuring Period” shall mean the period of four consecutive fiscal quarters ending
on the applicable date of determination.



3









 





     “Asset Sale” shall mean the sale, transfer or other disposition by any Credit Party of any
asset (other than the sale or transfer of less than one hundred percent (100%) of the stock or
other ownership interests of any Subsidiary) to any Person (other than to Borrower or a Guarantor).



     “Assignment Agreement” shall mean an Assignment Agreement substantially in the form of Exhibit
H hereto.



     “Authorized Signer” shall mean each person who has been authorized by the Borrower to execute
and deliver any requests for Advances hereunder pursuant to a written authorization delivered to
the Agent and whose signature card or incumbency certificate has been received by the Agent.



     “Bankruptcy Code” shall mean Title 11 of the United States Code and the rules promulgated
thereunder.



     “Borrower” shall have the meaning set forth in the preamble to this Agreement.



     “Business Day” shall mean any day other than a Saturday or a Sunday on which commercial banks
are open for domestic and international business (including dealings in foreign exchange) in San
Jose, California and New York, New York, and in the case of a Business Day which relates to a
Eurodollar-based Advance, on which dealings are carried on in the London interbank eurodollar
market.



     “Capital Expenditures” shall mean, for any period, with respect to any Person (without
duplication), the aggregate of all expenditures incurred by such Person and its Subsidiaries during
such period for the acquisition or leasing (pursuant to a Capitalized Lease) of fixed or capital
assets or additions to equipment, plant and property that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries, but excluding expenditures made in
connection with the Reinvestment of Insurance Proceeds, Condemnation Proceeds or the Net Cash
Proceeds of Asset Sales.



     “Capitalized Lease” shall mean, as applied to any Person, any lease of any property (whether
real, personal or mixed) with respect to which the discounted present value of the rental
obligations of such Person as lessee thereunder, in conformity with GAAP, is required to be
capitalized on the balance sheet of that Person.



     “Cash” shall mean unrestricted cash, cash equivalents and marketable securities.



     “Cash Proceeds” shall mean Cash, proceeds of Advances of the Revolving Credit and proceeds of
Seller Notes that are payable in full within 12 months from the date of the closing of the related
acquisitions.



     “Change of Control” shall mean an event or series of events whereby any Person or “group”
(within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended)
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes
of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors,
empowering such “person” or “group” to elect a majority of the Board of Directors of Borrower,



4









 







who
did not have such power before such transaction.



     “Closing Date” shall mean the date on which all of the conditions precedent set forth in
Sections 5.1 and 5.2 have been satisfied or waived in writing.



     “Collateral” shall mean all property or rights in which a security interest, mortgage, lien or
other encumbrance for the benefit of the Lenders is or has been granted or arises or has arisen,
under or in connection with this Agreement, the other Loan Documents, or otherwise to secure the
Indebtedness.



     “Collateral Access Agreement” shall mean an agreement in form and substance satisfactory to
the Agent in its sole discretion, pursuant to which a mortgagee or lessor of real property on which
Collateral is stored or otherwise located, or a warehouseman, processor or other bailee of
inventory or other property owned by any Credit Party, that acknowledges the Liens under the
Collateral Documents and subordinates or waives any Liens held by such Person on such property and,
includes such other agreements with respect to the Collateral as Agent may require in its sole
discretion, as the same may be amended, restated or otherwise modified from time to time.



     “Collateral Documents” shall mean the Security Agreement, the Pledge Agreements, the
Mortgages, the Account Control Agreements, the Collateral Access Agreements, and all other security
documents (and any joinders thereto) executed by any Credit Party in favor of the Agent on or after
the Effective Date, in connection with any of the foregoing collateral documents, in each case, as
such collateral documents may be amended or otherwise modified from time to time.



     “Comerica Bank” shall mean Comerica Bank and its successors or assigns.



     “Condemnation Proceeds” shall mean the cash proceeds received by any Credit Party in respect
of any condemnation proceeding net of reasonable fees and expenses (including without limitation
attorneys’ fees and expenses) incurred in connection with the collection thereof.



     “Consolidated” (or “consolidated”) or “Consolidating” (or “consolidating”) shall mean, when
used with reference to any financial term in this Agreement, the aggregate for two or more Persons
of the amounts signified by such term for all such Persons determined on a consolidated (or
consolidating) basis in accordance with GAAP, applied on a consistent basis. Unless otherwise
specified herein, “Consolidated” and “Consolidating” shall refer to Borrower and its Subsidiaries,
determined on a Consolidated or Consolidating basis.



     “Covenant Compliance Report” shall mean the report to be furnished by Borrower to the Agent
pursuant to Section 7.2(a) hereof, substantially in the form annexed hereto as Exhibit J and
certified by a Responsible Officer of the Borrower, in which report Borrower shall set forth the
information specified therein and which shall include a statement of then applicable level for the
Applicable Margin and Applicable Fee Percentages as specified in Schedule 1.1 attached to this
Agreement.



     “Credit Parties” shall mean the Borrower and its Subsidiaries, and “Credit Party” shall mean
any one of them, as the context indicates or otherwise requires.



5









 





     “Current Liabilities” shall mean, as of any applicable date, all amounts that should, in
accordance with GAAP, be included as current liabilities on the consolidated balance sheet of
Borrower and its Subsidiaries, as at such date (but excluding any Indebtedness to Lenders under the
Revolving Credit).



     “Debt” shall mean as to any Person, without duplication (a) all Funded Debt of a Person, (b)
all Guarantee Obligations of such Person, (c) all obligations of such Person under conditional sale
or other title retention agreements relating to property or assets purchased by such Person, (d)
all indebtedness of such Person arising in connection with any Hedging Transaction entered into by
such Person, (e) all recourse Debt of any partnership of which such Person is the general partner,
and (f) any Off Balance Sheet Liabilities.



     “Default” shall mean any event that with the giving of notice or the passage of time, or both,
would constitute an Event of Default under this Agreement.



     “Deferred Revenue” shall mean all non-refundable amounts received in advance of performance
under contracts and not yet recognized as revenue.



     “Disclosure Letter” means the disclosure letter delivered to the Agent by the Borrower on the
Closing Date.



     “Distribution” is defined in Section 8.5 hereof.



     “Dollars” and the sign “$” shall mean lawful money of the United States of America.



     “Domestic Subsidiary” shall mean any Subsidiary of Borrower incorporated or organized under
the laws of the United States of America, or any state or other political subdivision thereof or
which is considered to be a “disregarded entity” for United States federal income tax purposes and
which is not a “controlled foreign corporation” as defined under Section 957 of the Internal
Revenue Code, in each case provided such Subsidiary is owned by Borrower or a Domestic Subsidiary
of Borrower, and “Domestic Subsidiaries” shall mean any or all of them.



     “EBITDA” shall mean with respect to any fiscal period an amount equal to the sum of earnings
before depreciation, amortization, non-cash stock compensation, net interest and taxes (plus a
one-time management bonus add-back of $2,600,000 in the December, 2007 fiscal quarter), but
excluding one-time acquisition costs related to FASB 141r, measured on a trailing four fiscal
quarter basis.



     “Effective Date” means October 1, 2008.



     “Electronic Transmission” shall mean each document, instruction, authorization, file,
information and any other communication transmitted, posted or otherwise made or communicated by
e-mail or E-Fax, or otherwise to or from an E-System or other equivalent service.



     “Eligible Assignee” shall mean (a) a Lender; (b) an Affiliate of a Lender; (c) any Person
(other than a natural person) that is or will be engaged in the business of making, purchasing,
holding or otherwise investing in commercial loans or similar extensions of credit in the ordinary



6









 







course of its business, provided that such Person is administered or managed by a Lender, an
Affiliate of a Lender or an entity or Affiliate of an entity that administers or manages a Lender;
or (d) any other Person (other than a natural person) approved by the (i) Agent in its reasonable
discretion (and in the case of an assignment of a commitment under the Revolving Credit, the
Issuing Lender and Swing Line Lender), and (ii) unless a Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower, or any of
the Borrower’s Affiliates or Subsidiaries; and provided further that notwithstanding clause (d)(ii)
of this definition, no assignment shall be made to an entity which is a competitor of any Credit
Party without the consent of the Borrower, which consent may be withheld in its sole discretion.



     “Equity Interest” shall mean (i) in the case of any corporation, all capital stock and any
securities exchangeable for or convertible into capital stock, (ii) in the case of an association
or business entity, any and all shares, interests, participations, rights or other equivalents of
corporate stock (however designated) in or to such association or entity, (iii) in the case of a
partnership or limited liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person the right to receive
a share of the profits and losses of, or distribution of assets of, the issuing Person, and
including, in all of the foregoing cases described in clauses (i), (ii), (iii) or (iv), any
warrants, rights or other options to purchase or otherwise acquire any of the interests described
in any of the foregoing cases.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, or any
successor act or code and the regulations in effect from time to time thereunder.



     “E-System” shall mean any electronic system and any other Internet or extranet-based site,
whether such electronic system is owned, operated or hosted by the Agent, any of its Affiliates or
any other Person, providing for access to data protected by passcodes or other security system.



     “Eurodollar-based Advance” shall mean any Advance which bears interest at the Eurodollar-based
Rate.



     “Eurodollar-based Rate” shall mean a per annum interest rate which is equal to the sum of (a)
the Applicable Margin, plus (b) the quotient of:



     (i) the per annum interest rate at which deposits in the relevant eurocurrency are offered to
Agent’s Eurodollar Lending Office by other prime banks in the eurocurrency market in an amount
comparable to the relevant Eurodollar-based Advance and for a period equal to the relevant
Eurodollar-Interest Period at approximately 11:00 A.M. Pacific time two (2) Business Days prior to
the first day of such Eurodollar-Interest Period, divided by



     (ii) a percentage equal to 100% minus the maximum rate on such date at which Agent
is required to maintain reserves on ‘Eurocurrency Liabilities’ as defined in and pursuant to
Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or
definition is modified, and as long as Agent is required to maintain reserves against a category of



7









 







liabilities which includes eurocurrency deposits or includes a category of assets which includes
eurocurrency loans, the rate at which such reserves are required to be maintained on such category,


such sum to be rounded upward, if necessary, in the discretion of the Agent, to the nearest whole
multiple of 1/100th of 1%.




     “Eurodollar-Interest Period” shall mean, for any Eurodollar-based Advance, an Interest Period
of one, two or three months (or any shorter or longer periods agreed to in advance by the Borrower,
Agent and the Lenders) as selected by Borrower, for such Eurodollar-based Advance pursuant to
Section 2.3 or 4.4 hereof, as the case may be.



     “Eurodollar Lending Office” shall mean, (a) with respect to the Agent, Agent’s office located
at its Grand Caymans Branch or such other branch of Agent, domestic or foreign, as it may hereafter
designate as its Eurodollar Lending Office by written notice to Borrower and the Lenders and (b) as
to each of the Lenders, its office, branch or affiliate located at its address set forth on the
signature pages hereof (or identified thereon as its Eurodollar Lending Office), or at such other
office, branch or affiliate of such Lender as it may hereafter designate as its Eurodollar Lending
Office by written notice to Borrower and Agent.



     “Event of Default” shall mean each of the Events of Default specified in Section 9.1 hereof.



     “Excluded Equity Issuances” shall mean (a) any issuance of Equity Interests under any stock
option or employee incentive plans and issuances of Equity Interests of the Borrower pursuant to
the exercise of options or warrants issued under any such plans, (b) any issuance of Equity
Interests to current shareholders and other private equity issuances, (c) any issuance by any
Subsidiary of Borrower of its Equity Interests to Borrower or any other Subsidiary of Borrower, (d)
any receipt by Borrower or any Subsidiary of Borrower of a capital contribution from Borrower or
any other Subsidiary of Borrower, and (e) issuances of Equity Interests, the Net Cash Proceeds of
which are applied by Borrower or any Subsidiary to the consideration paid for a Permitted
Acquisition. Excluded Equity Issuances shall not include any IPO.



     “Existing Letters of Credit” shall mean the letters of credit previously issued by Comerica
Bank for the account of certain of the Credit Parties which are listed in attached Schedule 1.4.



     “Federal Funds Effective Rate” shall mean, for any day, a fluctuating interest rate per annum
equal to 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 for such day (or, if
such day is not a Business Day, for the next preceding 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 reasonably by Agent, all as
conclusively determined by the Agent, such sum to be rounded upward, if necessary, to the
nearest whole multiple of 1/100th of 1%.



     “Fee Letter” shall mean the fee letter by and between Borrower and Comerica Bank dated



8









 







as of
June 9, 2008 relating to the Indebtedness hereunder, as amended, restated, replaced or otherwise
modified from time to time.



     “Fees” shall mean the Revolving Credit Facility Fee, the Letter of Credit Fees and the other
fees and charges (including any agency fees) payable by Borrower to the Lenders, the Issuing Lender
or Agent hereunder or under the Fee Letter.



     “Final Maturity Date” shall mean the last to occur of (i) the Revolving Credit Maturity Date
or (ii) the Term Loan Maturity Date.



     “Fiscal Year” shall mean the twelve-month period ending on each June 30.



     “Fixed Charge Coverage Ratio” shall mean as of any date of determination a ratio the numerator
of which is EBITDA for the preceding four fiscal quarters ending on the date of determination and
the denominator of which is the sum of each of the following fixed charges for the preceding four
fiscal quarters ending on such date of determination: unfinanced Capital Expenditures, plus Net
Cash Interest Expenses, plus cash taxes, plus cash dividends, plus trailing four fiscal quarters
payments of Debt which are actually made by Borrower (excluding unsecured payments with respect to
Seller Notes to the extent there is equivalent unused capacity under the Revolving Credit as of the
date paid), all as determined on a consolidated basis by Borrower and its consolidated Subsidiaries
in accordance with GAAP.



     “Foreign Subsidiary” shall mean any Subsidiary, other than a Domestic Subsidiary, and “Foreign
Subsidiaries” shall mean any or all of them.



     “Funded Debt” of any Person shall mean, without duplication, (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or services as of such
date (other than operating leases and trade liabilities incurred in the ordinary course of business
and payable in accordance with customary practices) or which is evidenced by a note, bond,
debenture or similar instrument, (b) the principal component of all obligations of such Person
under Capitalized Leases, (c) all reimbursement obligations (actual, contingent or otherwise) of
such Person in respect of letters of credit, bankers acceptances or similar obligations issued or
created for the account of such Person, (d) all liabilities of the type described in (a), (b) and
(c) above that are secured by any Liens on any property owned by such Person as of such date even
though such Person has not assumed or otherwise become liable for the payment thereof, the amount
of which is determined in accordance with GAAP; provided however that so long as such Person is not
personally liable for any such liability, the amount of such liability shall be deemed to be the
lesser of the fair market value at such date of the property subject to the Lien securing such
liability and the amount of the liability secured, and (e) all Guarantee Obligations in respect of
any liability which constitutes Funded Debt; provided, however that Funded Debt shall not include
any indebtedness under any Hedging Transaction prior to the occurrence of a termination event with
respect thereto.



     “Funded Debt to EBITDA Ratio” shall mean as of any date of determination, a ratio the
numerator of which is Funded Debt and the denominator of which is EBITDA, all as determined on
a consolidated basis for Borrower and its consolidated Subsidiaries in accordance with GAAP.



9









 





     “GAAP” shall mean, as of any applicable date of determination, generally accepted accounting
principles in the United States of America, as applicable on such date, consistently applied, as in
effect on the Effective Date.



     “Governmental Obligations” means noncallable direct general obligations of the United States
of America or obligations the payment of principal of and interest on which is unconditionally
guaranteed by the United States of America.



     “Guarantee Obligation” shall mean as to any Person (the “guaranteeing person”) any obligation
of the guaranteeing Person in respect of any obligation of another Person (the “primary obligor”)
(including, without limitation, any bank under any letter of credit), the creation of which was
induced by a reimbursement agreement, guaranty agreement, keepwell agreement, purchase agreement,
counterindemnity or similar obligation issued by the guaranteeing person, in either case
guaranteeing or in effect guaranteeing any Funded Debt (the “primary obligations”) of the primary
obligor in any manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for deposit or collection
in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount
of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or determinable, in which case the
amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the applicable Person in good faith.



     “Guarantor(s)” shall mean each Domestic Subsidiary of Borrower which has executed and
delivered to the Agent a Guaranty (or a joinder to a Guaranty), and a Security Agreement (or a
joinder to the Security Agreement).



     “Guaranty” shall mean, collectively, the guaranty agreements executed and delivered by the
applicable Guarantors on the Effective Date pursuant to Section 5.1 hereof and those guaranty
agreements executed and delivered from time to time after the Effective Date (whether by execution
of joinder agreements or otherwise) pursuant to Section 7.13 hereof or otherwise, in each case in
the form attached hereto as Exhibit I, as amended, restated or otherwise modified
from time to time.



     “Hazardous Material” shall mean any hazardous or toxic waste, substance or material defined or
regulated as such or regulated for reasons of health, safety or the environment in the



10









 







Hazardous
Material Laws.



     “Hazardous Material Law(s)” shall mean all laws, codes, ordinances, rules, regulations and
other governmental restrictions and requirements issued by any federal, state, local or other
governmental or quasi-governmental authority or body (or any agency, instrumentality or political
subdivision thereof) pertaining to any Hazardous Material and which is present or alleged to be
present on or about or used in any facilities owned, leased or operated by any Credit Party, or any
portion thereof including, without limitation, those relating to soil, surface, subsurface ground
water conditions and the condition of the indoor and outdoor ambient air; any so-called “superfund”
or “superlien” law; and any other United States federal, state or local statute, law, ordinance,
code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards
of conduct concerning, any Hazardous Material, as now or at any time during the term of the
Agreement in effect.



     “Hedging Agreement” shall mean any agreement relating to a Hedging Transaction entered into
between the Borrower (or Borrower jointly with any Guarantor) and any Lender or an Affiliate of a
Lender.



     “Hedging Transaction” means each interest rate swap transaction, basis swap transaction,
currency hedge, forward rate transaction, equity transaction, equity index transaction, foreign
exchange transaction, cap transaction, floor transaction (including any option with respect to any
of these transactions and any combination of any of the foregoing).



     “Hereof”, “hereto”, “hereunder” and similar terms shall refer to this Agreement and not to any
particular paragraph or provision of this Agreement.



     “Indebtedness” shall mean all indebtedness and liabilities (including without limitation
principal, interest (including without limitation interest accruing at the then applicable rate
provided in this Agreement or any other applicable Loan Document after an applicable maturity date
and interest accruing at the then applicable rate provided in this Agreement or any other
applicable Loan Document after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Credit Parties whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding), fees, expenses and
other charges) arising under this Agreement or any of the other Loan Documents, whether direct or
indirect, absolute or contingent, of any Credit Party to any of the Lenders or Affiliates thereof
or to the Agent, in any manner and at any time, whether arising under this Agreement, the Guaranty
or any of the other Loan Documents (including without limitation, payment obligations under Hedging
Transactions evidenced by Hedging Agreements), due or hereafter to become due, now owing or that
may hereafter be incurred by any Credit Party to any of the Lenders or Affiliates thereof or to the
Agent, and which shall be deemed to include protective advances made by Agent with respect to the
Collateral under or pursuant to the terms of any Loan Document and any liabilities of any Credit
Party to Agent or any Lender arising in connection with any Lender Products, in each case whether
or not reduced to judgment, with interest
according to the rates and terms specified, and any and all consolidations, amendments,
renewals, replacements, substitutions or extensions of any of the foregoing; provided, however that
for purposes of calculating the Indebtedness outstanding under this Agreement or any of the other
Loan Documents, the direct and indirect and absolute and contingent obligations of the



11









 







Credit
Parties (whether direct or contingent) shall be determined without duplication.



     “Initial Reinvestment Period” shall mean a 180-day period during which Reinvestment must be
commenced under Section 4.8(a) and (c) of this Agreement.



     “Insurance Proceeds” shall mean the cash proceeds received by any Credit Party from any
insurer in respect of any damage or destruction of any property or asset net of reasonable fees and
expenses (including without limitation attorneys fees and expenses) incurred solely in connection
with the recovery thereof.



     “Intercompany Note” shall mean any promissory note issued or to be issued by any Credit Party
to evidence an intercompany loan substantially in form and substance reasonably satisfactory to
Agent.



     “Interest Period” shall mean (a) with respect to a Eurodollar-based Advance, a
Eurodollar-Interest Period, commencing on the day a Eurodollar-based Advance is made, or on the
effective date of an election of the Eurodollar-based Rate made under Section 2.3 or 4.4 hereof,
and (b) with respect to a Swing Line Advance carried at the Quoted Rate, an interest period of 30
days (or any lesser number of days agreed to in advance by the Borrower, Agent and the Swing Line
Lender); provided, however that (i) any Interest Period which would otherwise end on a day which is
not a Business Day shall end on the next succeeding Business Day, except that as to an Interest
Period in respect of a Eurodollar-based Advance, if the next succeeding Business Day falls in
another calendar month, such Interest Period shall end on the next preceding Business Day, (ii)
when an Interest Period in respect of a Eurodollar-based Advance begins on a day which has no
numerically corresponding day in the calendar month during which such Interest Period is to end, it
shall end on the last Business Day of such calendar month, and (iii) no Interest Period in respect
of any Advance shall extend beyond the Revolving Credit Maturity Date or the Term Loan Maturity
Date, as applicable.



     “Internal Revenue Code” shall mean the Internal Revenue Code of 1986 of the United States of
America, as amended from time to time, and the regulations promulgated thereunder.



     “Investment” shall mean, when used with respect to any Person, (a) any loan, investment or
advance made by such Person to any other Person (including, without limitation, any Guarantee
Obligation) in respect of any Equity Interest, Debt, obligation or liability of such other Person
and (b) any other investment made by such Person (however acquired) in Equity Interests in any
other Person, including, without limitation, any investment made in exchange for the issuance of
Equity Interest of such Person and any investment made as a capital contribution to such other
Person.



     “IPO” shall mean an initial public offering of Equity Interests of Borrower registered under
the Securities Act of 1933, as amended.



     “Issuing Lender” shall mean Comerica Bank in its capacity as issuer of one or more
Letters of Credit hereunder, or its successor designated by Borrower and the Revolving Credit
Lenders.



     “Issuing Office” shall mean such office as Issuing Lender shall designate as its Issuing
Office.



12









 





     “Lender Products” shall mean any one or more of the following types of services or facilities
extended to the Credit Parties by any Lender: (i) credit cards, (ii) credit card processing
services, (iii) debit cards, (iv) purchase cards, (v) Automated Clearing House (ACH) transactions,
(vi) cash management, including controlled disbursement services, and (vii) establishing and
maintaining deposit accounts.



     “Lenders” shall have the meaning set forth in the preamble, and shall include the Revolving
Credit Lenders, the Term Loan Lenders, the Swing Line Lender and any assignee which becomes a
Lender pursuant to Section 13.8 hereof.



     “Letter of Credit Agreement” shall mean, collectively, the letter of credit application and
related documentation executed and/or delivered by the Borrower in respect of each Letter of
Credit, in each case satisfactory to the Issuing Lender, as amended, restated or otherwise modified
from time to time.



     “Letter of Credit Documents” shall have the meaning ascribed to such term in Section 3.7(a)
hereof.



     “Letter of Credit Fees” shall mean the fees payable in connection with Letters of Credit
pursuant to Section 3.4(a) and (b) hereof.



     “Letter of Credit Maximum Amount” shall mean Two Million Dollars ($2,000,000).



     “Letter of Credit Obligations” shall mean at any date of determination, the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding, and (b) the aggregate amount of
Reimbursement Obligations which remain unpaid as of such date.



     “Letter of Credit Payment” shall mean any amount paid or required to be paid by the Issuing
Lender in its capacity hereunder as issuer of a Letter of Credit as a result of a draft or other
demand for payment under any Letter of Credit.



     “Letter(s) of Credit” shall mean any standby letters of credit issued by Issuing Lender at the
request of or for the account of Borrower pursuant to Article 3 hereof and shall include, without
limitation, the Existing Letters of Credit.



     “Lien” shall mean any security interest in or lien on or against any property arising from any
pledge, assignment, hypothecation, mortgage, security interest, deposit arrangement, trust receipt,
conditional sale or title retaining contract, sale and leaseback transaction, Capitalized Lease,
consignment or bailment for security, or any other type of lien, charge, encumbrance, title
exception, preferential or priority arrangement affecting property (including with respect to
stock, any stockholder agreements, voting rights agreements, buy-back agreements and all similar
arrangements), whether based on common law or statute.



     “Loan Documents” shall mean, collectively, this Agreement, the Notes (if issued), the Letter
of Credit Agreements, the Letters of Credit, the Guaranty, the Subordination Agreements, the
Collateral Documents, each Hedging Agreement, and any other documents, certificates or



13









 







agreements
that are executed and required to be delivered pursuant to any of the foregoing documents, as such
documents may be amended, restated or otherwise modified from time to time.



     “Majority Lenders” shall mean at any time (a) so long as the Revolving Credit Aggregate
Commitment has not been terminated, Lenders holding more than 50.0% of the sum of (i) the Revolving
Credit Aggregate Commitment plus (ii) the aggregate principal amount of Indebtedness then
outstanding under the Term Loan and (b) if the Revolving Credit Aggregate Commitment has been
terminated (whether by maturity, acceleration or otherwise), Lenders holding more than 50.0% of the
aggregate principal amount then outstanding under the Revolving Credit and the Term Loan; provided
that, for purposes of determining Majority Lenders hereunder, the Letter of Credit Obligations and
principal amount outstanding under the Swing Line shall be allocated among the Revolving Credit
Lenders based on their respective Revolving Credit Percentages; provided further that so long as
there are fewer than three Lenders, considering any Lender and its Affiliates as a single Lender,
“Majority Lenders” shall mean all Lenders.



     “Majority Revolving Credit Lenders” shall mean at any time (a) so long as the Revolving Credit
Aggregate Commitment has not been terminated, the Revolving Credit Lenders holding more than 50.0%
of the Revolving Credit Aggregate Commitment and (b) if the Revolving Credit Aggregate Commitment
has been terminated (whether by maturity, acceleration or otherwise), Revolving Credit Lenders
holding more than 50.0% of the aggregate principal amount then outstanding under the Revolving
Credit; provided that, for purposes of determining Majority Revolving Credit Lenders hereunder, the
Letter of Credit Obligations and principal amount outstanding under the Swing Line shall be
allocated among the Revolving Credit Lenders based on their respective Revolving Credit
Percentages; provided further that so long as there are fewer than three Revolving Credit Lenders,
considering any Revolving Credit Lender and its Affiliates as a single Revolving Credit Lender,
“Majority Revolving Credit Lenders” shall mean all Revolving Credit Lenders.



     “Majority Term Loan Lenders” shall mean at any time with respect to the Term Loan, Term Loan
Lenders holding more than 50.0% of the aggregate principal amount then outstanding under Term Loan;
provided however that so long as there are fewer than three Term Loan Lenders, considering any Term
Loan Lender and its Affiliates as a single Term Loan Lender, “Majority Term Loan Lenders” shall
mean all Term Loan Lenders.



     “Material Adverse Effect” shall mean a material adverse effect on (a) the financial condition,
business, performance, operation or properties of the Credit Parties taken as a whole, (b) the
ability of any Obligor to perform its obligations under this Agreement, the Notes (if issued) or
any other Loan Document to which it is a party, or (c) the validity or enforceability of this
Agreement, any of the Notes (if issued) or any of the other Loan Documents or the rights or
remedies of the Agent or the Lenders hereunder or thereunder.



     “Material Subsidiary” shall mean any Subsidiary which is an operating entity and which
has annual gross revenues in excess of five percent (5%) of gross revenues of Borrower and its
consolidated Subsidiaries for the most recently completed fiscal year or assets with a book value
in excess of five percent (5%) of Total Assets for the most recently completed fiscal year.



14









 





     “Mortgages” shall mean the mortgages, deeds of trust and any other similar documents related
thereto or required thereby executed and delivered by a Credit Party on the Closing Date pursuant
to Section 5.1 hereof, if any, and executed and delivered after the Closing Date by a Credit Party
pursuant to Section 7.13 hereof or otherwise, and “Mortgage” shall mean any such document, as such
documents may be amended, restated or otherwise modified from time to time.



     “Multiemployer Plan” shall mean a Pension Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.



     “Net Cash Interest Expense” shall mean cash interest expense minus cash interest income.



     “Net Cash Proceeds” shall mean the aggregate cash payments received by any Credit Party from
any Asset Sale, the issuance of Equity Interests or the issuance of Subordinated Debt, as the case
may be, net of (i) the principal amount of any Debt that is secured by the applicable asset and
that is required to be repaid in connection with such transaction (other than Indebtedness under
the Loan Documents), (ii) the reasonable and customary out-of-pocket commissions, costs, premiums,
fees and other expenses incurred by such Credit Party in connection with such transaction (or, if
such costs and expenses have not been incurred or invoiced, the Borrower’s good faith estimate
thereof), including legal, accounting and investment banking fees, sales commissions, and other
third party charges, and (iii) of property taxes, transfer taxes and any other taxes paid or
payable by such Credit Party in respect of any sale or issuance.



     “New Bank Addendum” shall mean an addendum substantially in the form of Exhibit N attached
hereto, to be executed and delivered by each Bank becoming a part to this Agreement pursuant to
Section 2.13 hereof.



     “Notes” shall mean the Revolving Credit Notes, the Swing Line Note and the Term Loan Notes.



     “Obligors” shall mean the Borrower and the Guarantors.



     “Off Balance Sheet Liability(ies)” of a Person shall mean (i) any repurchase obligation or
liability of such Person with respect to accounts or notes receivables sold by such Person, (ii)
any liability under any sale and leaseback transaction which is not a Capitalized Lease, (iii) any
liability under any so-called “synthetic lease” transaction entered into by such Person, or (iv)
any obligation arising with respect to any other transaction which is the functional equivalent of
Debt or any of the liabilities set forth in subsections (i)-(iii) of this definition, but which
does not constitute a liability on the balance sheets of such Person.



     “Pay for Performance Marketing and Media Business” shall mean a business (1) whose primary
source of revenue is derived from marketing services, internet traffic or impressions or
related services or (2) owns or develops media or (3) owns or develops technology for use in
marketing services or media. (Examples of such businesses include internet or offline publishing,
directory, or media companies; technology companies that enable lead capture, media capabilities,
or monetization of media; online or offline lead generation companies, online




15











 




or offline marketing service providers; amongst others).




     “PBGC” shall mean the Pension Benefit Guaranty Corporation or any successor thereto.



     “Pension Plan” shall mean any plan established and maintained by a Credit Party, or
contributed to by a Credit Party, which is qualified under Section 401(a) of the Internal Revenue
Code and subject to the minimum funding standards of Section 412 of the Internal Revenue Code.



     “Percentage” shall mean, as applicable, the Revolving Credit Percentage, the Term Loan
Percentage or the Weighted Percentage.



     “Permitted Acquisition” shall mean any acquisition by Borrower or any wholly-owned Subsidiary
of Borrower of all or substantially all of the assets or Equity Interests of a Pay for Performance
Marketing and Media Business; provided that (1) for acquisitions using Cash Proceeds not in excess
of Forty Five Million Dollars ($45,000,000), such acquisitions satisfies and/or is conducted in
accordance with the requirements of clauses (a), (b), (d) and (e) below; and (2) for acquisitions
using Cash Proceeds in excess of Forty Five Million Dollars ($45,000,000), such acquisitions
satisfies and/or is conducted in accordance with the requirements of clauses (a) through (e) below
and such acquisitions are consented to by Agent and the Majority Lenders:




	 	(a)	 	If such acquisition is structured as an acquisition of the
Equity Interests of any Person, then the Person so acquired shall (X) become a
wholly-owned direct Subsidiary of Borrower or of a wholly-owned Subsidiary of
Borrower and the Borrower or the applicable Subsidiary shall cause such
acquired Person to comply with Section 7.13 hereof or (Y) provided that the
Credit Parties continue to comply with Section 7.4(a) hereof, be merged with
and into Borrower or such Subsidiary (and, in the case of the Borrower, with
the Borrower being the surviving entity);
	 
	 	(b)	 	If such acquisition is structured as the acquisition of assets,
such assets shall be acquired directly by Borrower or a wholly-owned Subsidiary
(subject to compliance with Section 7.4(a) hereof);
	 
	 	(c)	 	Borrower shall have delivered to Agent not less than ten (10)
(or such shorter period of time agreed to by the Agent) nor more than ninety
(90) days prior to the date of such acquisition, notice of such acquisition,
copies of all material documents relating to such acquisition (including the
acquisition agreement and any related material document), and historical
financial information (including income statements, balance sheets and cash
flows) covering at least three (3) complete fiscal years of the acquisition
target, if available, prior to the effective date of the acquisition or the
entire credit history of the acquisition target, whichever period is shorter,
in each case in form and substance reasonably satisfactory to the Agent;
	 
	 	(d)	 	Both immediately before and after the consummation of such
acquisition,




16









 






	 	 	 	no Default or Event of Default shall have occurred and be continuing; and
	 
	 	(e)	 	The acquisition shall not result in a Change of Control.





     “Permitted Investments” shall mean with respect to any Person:




	 	(a)	 	Governmental Obligations;
	 
	 	(b)	 	Obligations of a state or commonwealth of the United States or
the obligations of the District of Columbia or any possession of the United
States, or any political subdivision of any of the foregoing, which are
described in Section 103(a) of the Internal Revenue Code and are graded in any
of the highest three (3) major grades as determined by at least one Rating
Agency; or secured, as to payments of principal and interest, by a letter of
credit provided by a financial institution or insurance provided by a bond
insurance company which in each case is itself or its debt is rated in one of
the highest three (3) major grades as determined by at least one Rating Agency;
	 
	 	(c)	 	Banker’s acceptances, commercial accounts, demand deposit
accounts, certificates of deposit, other time deposits or depository receipts
issued by or maintained with any Lender or any Affiliate thereof, or any bank,
trust company, savings and loan association, savings bank or other financial
institution whose deposits are insured by the Federal Deposit Insurance
Corporation and whose reported capital and surplus equal at least $250,000,000,
provided that such minimum capital and surplus requirement shall not apply to
demand deposit accounts maintained by any Credit Party in the ordinary course
of business;
	 
	 	(d)	 	Commercial paper rated at the time of purchase within the two
highest classifications established by not less than one Rating Agency, and
which matures within 270 days after the date of issue;
	 
	 	(e)	 	Secured repurchase agreements against obligations itemized in
paragraph (a) above, and executed by a bank or trust company or by members of
the association of primary dealers or other recognized dealers in United States
government securities, the market value of which must be maintained at levels
at least equal to the amounts advanced;
	 
	 	(f)	 	Any fund or other pooling arrangement which exclusively
purchases and holds the investments itemized in (a) through (e) above;
	 
	 	(g)	 	Debt issued by Persons (other than Affiliates of the Borrower)
with a rating of “A” or higher from S&P or “A02” or higher from Moody’s (or
reasonably equivalent ratings of another internationally recognized ratings
agency in each case with maturities not exceeding two years form the date of
acquisition;




17









 






	 	(h)	 	Deposits held with financial institutions in countries outside
of the United States where the Credit Parties conduct business; and
	 
	 	(i)	 	Investments made pursuant to the Borrower’s investment policy
as in effect on the Effective Date.





     “Permitted Liens” shall mean with respect to any Person:




	 	(a)	 	Liens for (i) taxes or governmental assessments or charges or
(ii) customs duties in connection with the importation of goods to the extent
such Liens attach to the imported goods that are the subject of the duties, in
each case (x) to the extent not yet due, (y) as to which the period of grace,
if any, related thereto has not expired or (z) which are being contested in
good faith by appropriate proceedings, provided that in the case of any such
contest, any proceedings for the enforcement of such liens have been suspended
and adequate reserves with respect thereto are maintained on the books of such
Person in conformity with GAAP;
	 
	 	(b)	 	carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s, processor’s, landlord’s liens or other like liens arising in the
ordinary course of business which secure obligations that are not overdue for a
period of more than 30 days or which are being contested in good faith by
appropriate proceedings, provided that in the case of any such contest, (x) any
proceedings commenced for the enforcement of such Liens have been suspended and
(y) appropriate reserves with respect thereto are maintained on the books of
such Person in conformity with GAAP;
	 
	 	(c)	 	(i) Liens incurred in the ordinary course of business to secure
the performance of statutory obligations arising in connection with progress
payments or advance payments due under contracts with the United States
government or any agency thereof entered into in the ordinary course of
business and (ii) Liens incurred or deposits made in the ordinary course of
business to secure the performance of statutory obligations (not otherwise
permitted under subsection (f) of this definition), bids, leases, fee and
expense arrangements with trustees and fiscal agents, trade contracts, surety
and appeal bonds, performance bonds and other similar obligations (exclusive of
obligations incurred in connection with the borrowing of money, any
lease-purchase arrangements or the payment of the deferred purchase price of
property), provided, that in each case full provision for the payment of all
such obligations has been made on the books of such Person as may be required
by GAAP;
	 
	 	(d)	 	any attachment or judgment lien that remains unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period ending on the earlier
of (i) thirty (30) consecutive days from the date of its attachment or entry
(as applicable) or (ii) the commencement of enforcement steps with respect
thereto, other than the filing of notice thereof in the public record;




18









 






	 	(e)	 	minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, or any interest of any lessor or sublessor under any lease
permitted hereunder which, in each case, does not materially interfere with the
business of such Person;
	 
	 	(f)	 	Liens arising in connection with worker’s compensation,
unemployment insurance, old age pensions and social security benefits and
similar statutory obligations (excluding Liens arising under ERISA), provided
that no enforcement proceedings in respect of such Liens are pending and
provisions have been made for the payment of such liens on the books of such
Person as may be required by GAAP;
	 
	 	(g)	 	continuations of Liens that are permitted under subsections
(a)-(g) hereof, provided such continuations do not violate the specific time
periods set forth in subsections (b) and (d) and provided further that such
Liens do not extend to any additional property or assets of any Credit Party or
secure any additional obligations of any Credit Party;
	 
	 	(h)	 	Liens in favor of financial institutions arising in connection
with a Credit Party’s deposit accounts held at such institutions to secure
standard fees for deposit services charged by, but not financing made available
by, such institutions; and
	 
	 	(i)	 	Any interest or title of a lessor in the property (and the
proceeds, accession or products thereof) subject to an operating lease or
precautionary filings in respect of true leases.






Regardless of the language set forth in this definition, no Lien over the Equity
Interests of any Credit Party granted to any Person other than to Agent for the
benefit of the Lenders shall be deemed a “Permitted Lien” under the terms of this
Agreement.



     “Person” shall mean a natural person, corporation, limited liability company, partnership,
limited liability partnership, trust, incorporated or unincorporated organization, joint venture,
joint stock company, firm or association or a government or any agency or political subdivision
thereof or other entity of any kind.



     “Pledge Agreement(s)” shall mean any pledge agreement executed and delivered by a Credit Party
on the Closing Date pursuant to Section 5.1 hereof, if any, and executed and delivered from time to
time after the Closing Date by any Credit Party pursuant to Section 7.13 hereof or otherwise, and
any agreements, instruments or documents related thereto, in each case in form and substance
satisfactory to Agent amended, restated or otherwise modified from time to time.



     “Prime-based Advance” shall mean an Advance which bears interest at the Prime-based Rate.



19









 





     “Prime-based Rate” shall mean, for any day, that rate of interest which is equal to the sum of
the Applicable Margin plus the greater of (i) the Prime Rate, and (ii) the Alternate Base Rate.



     “Prime Rate” shall mean the per annum rate of interest announced by the Agent, at its main
office from time to time as its “prime rate” (it being acknowledged that such announced rate may
not necessarily be the lowest rate charged by the Agent to any of its customers), which Prime Rate
shall change simultaneously with any change in such announced rate.



     “Pro Forma Balance Sheet” shall mean the pro forma consolidated balance sheet of the Borrower
which has been certified by a Responsible Officer of the Borrower that it fairly presents in all
material respects the pro forma adjustments reflecting the transactions (including payment of all
fees and expenses in connection therewith) contemplated by this Agreement and the other Loan
Documents.



     “Pro Forma Projected Financial Information” shall mean, as to any proposed acquisition, a
statement executed by the Borrower (supported by reasonable detail) setting forth the total
consideration to be paid or incurred in connection with the proposed acquisition, and pro forma
combined projected financial information for the Credit Parties and the acquisition target (if
applicable), consisting of projected balance sheets as of the proposed effective date of the
acquisition and as of the end of at least the next succeeding three (3) Fiscal Years following the
acquisition and projected statements of income and cash flows for each of those years, including
sufficient detail to permit calculation of the ratios described in Section 7.9 hereof, as projected
as of the effective date of the acquisition and as of the ends of those Fiscal Years and
accompanied by (i) a statement setting forth a calculation of the ratio so described, (ii) a
statement in reasonable detail specifying all material assumptions underlying the projections and
(iii) such other information as the Agent or the Lenders shall reasonably request.



     “Purchasing Lender” shall have the meaning set forth in Section 13.12.



     “Quoted Rate” shall mean the rate of interest per annum offered by the Swing Line Lender in
its sole discretion with respect to a Swing Line Advance and accepted by the Borrower.



     “Quoted Rate Advance” means any Swing Line Advance which bears interest at the Quoted Rate.



     “Rating Agency” shall mean Moody’s Investor Services, Inc., Standard and Poor’s Ratings
Services, their respective successors or any other nationally recognized statistical rating
organization which is acceptable to the Agent.



     “Register” is defined in Section 13.8(g) hereof.



     “Reimbursement Obligation(s)” shall mean the aggregate amount of all unreimbursed drawings
under all Letters of Credit (excluding for the avoidance of doubt, reimbursement obligations that
are deemed satisfied pursuant to a deemed disbursement under Section 3.6(a)).



     “Reinvest” or “Reinvestment” shall mean, with respect to any Net Cash Proceeds,



20









 







Insurance Proceeds or Condemnation Proceeds received by any Person, the application of such
monies to (i) repair, improve or replace any tangible personal (excluding Inventory) or real
property of the Credit Parties or any intellectual property reasonably necessary in order to use or
benefit from any property or (ii) acquire any such property (excluding Inventory) to be used in the
business of such Person.



     “Reinvestment Certificate” is defined in Section 4.8(b) hereof.



     “Reinvestment Period” shall mean a 270-day period during which Reinvestment must be completed
under Section 4.8(b) and (d) of this Agreement.



     “Request for Advance” shall mean a Request for Revolving Credit Advance or a Request for Swing
Line Advance, as the context may indicate or otherwise require.



     “Request for Revolving Credit Advance” shall mean a request for a Revolving Credit Advance
issued by the Borrower under Section 2.3 of this Agreement in the form attached hereto as Exhibit
A.



     “Request for Swing Line Advance” shall mean a request for a Swing Line Advance issued by the
Borrower under Section 2.5(b) of this Agreement in the form attached hereto as Exhibit D.



     “Requirement of Law” shall mean as to any Person, the certificate of incorporation and bylaws,
the partnership agreement or other organizational or governing documents of such Person and any
law, treaty, rule or regulation or determination of an arbitration or a court or other governmental
authority, in each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.



     “Responsible Officer” shall mean, with respect to any Person, the chief executive officer,
chief financial officer, treasurer, president or controller of such Person, or with respect to
compliance with financial covenants, the chief financial officer or the treasurer of such Person,
or any other officer of such Person having substantially the same authority and responsibility.



     “Revolving Credit” shall mean the revolving credit loans to be advanced to Borrower by the
applicable Revolving Credit Lenders pursuant to Article 2 hereof, in an aggregate amount (subject
to the terms hereof), not to exceed, at any one time outstanding, the Revolving Credit Aggregate
Commitment.



     “Revolving Credit Advance” shall mean a borrowing requested by Borrower and made by the
Revolving Credit Lenders under Section 2.1 of this Agreement, including without limitation any
readvance, refunding or conversion of such borrowing pursuant to Section 2.3 hereof and any deemed
disbursement of an Advance in respect of a Letter of Credit under Section 3.6(a) hereof, and may
include, subject to the terms hereof, Eurodollar-based Advances and Prime-based Advances.



     “Revolving Credit Aggregate Commitment” shall mean Seventy Million Dollars ($70,000,000),
subject to increases pursuant to Section 2.13 hereof by an amount not to exceed the Revolving
Credit Optional Increase, subject to reduction or termination under Section 2.14 or
9.2 hereof.



21









 





     “Revolving Credit Commitment Amount” shall mean with respect to any Revolving Credit Lender,
(i) if the Revolving Credit Aggregate Commitment has not been terminated, the amount specified
opposite such Revolving Credit Lender’s name in the column entitled “Revolving Credit Commitment
Amount” on Schedule 1.2, as adjusted from time to time in accordance with the terms hereof; and
(ii) if the Revolving Credit Aggregate Commitment has been terminated (whether by maturity,
acceleration or otherwise), the amount equal to its Percentage of the aggregate principal amount
outstanding under the Revolving Credit (including the outstanding Letter of Credit Obligations and
any outstanding Swing Line Advances).



     “Revolving Credit Facility Fee” shall mean the fee payable to Agent for distribution to the
Revolving Credit Lenders in accordance with Section 2.9 hereof.



     “Revolving Credit Lenders” shall mean the financial institutions from time to time parties
hereto as lenders of the Revolving Credit.



     “Revolving Credit Maturity Date” shall mean the earlier to occur of (i) September 30, 2013,
and (ii) the date on which the Revolving Credit Aggregate Commitment shall terminate in accordance
with the provisions of this Agreement.



     “Revolving Credit Notes” shall mean the revolving credit notes described in Section 2.2
hereof, made by Borrower to each of the Revolving Credit Lenders in the form annexed hereto as
Exhibit B, as such notes may be amended or supplemented from time to time, and any other notes
issued in substitution, replacement or renewal thereof from time to time.



     “Revolving Credit Optional Increase” shall mean an amount up to Fifty Million Dollars
($50,000,000).



     “Revolving Credit Percentage” means, with respect to any Revolving Credit Lender, the
percentage specified opposite such Revolving Credit Lender’s name in the column entitled “Revolving
Credit Percentage” on Schedule 1.2, as adjusted from time to time in accordance with the terms
hereof.



     “Security Agreement” shall mean, collectively, the security agreement(s) executed and
delivered by Borrower and the Guarantors on the Closing Date pursuant to Section 5.1 hereof, and
any such agreements executed and delivered after the Closing Date (whether by execution of a
joinder agreement to any existing security agreement or otherwise) pursuant to Section 7.13 hereof
or otherwise, in the form of the Security Agreement annexed hereto as Exhibit F, as amended,
restated or otherwise modified from time to time.



     “Seller Notes” shall mean promissory notes issued by Borrower to selling stockholders in
connection with acquisitions made by Borrower that are permitted by Section 8.4 of this Agreement.



     “Subordinated Debt” shall mean any unsecured Funded Debt of any Credit Party issued on terms
and conditions satisfactory to Agent (and which may not contain a change of control provision which
is more favorable to the holder of the Subordinated Debt than the change of



22









 







control provisions of this Agreement without the consent of Agent which may be withheld in the
sole discretion of Agent) and other obligations under the Subordinated Debt Documents and any other
Funded Debt of any Credit Party which has been subordinated in right of payment and priority to the
Indebtedness, all on terms and conditions satisfactory to the Agent.



     “Subordinated Debt Documents” shall mean and include any documents evidencing any Subordinated
Debt, in each case, as the same may be amended, modified, supplemented or otherwise modified from
time to time in compliance with the terms of this Agreement.



     “Subordination Agreements” shall mean, any subordination agreements entered into by any Person
from time to time in favor of Agent in connection with any Subordinated Debt, the terms of which
are acceptable to the Agent and the Majority Lenders in the exercise of its and their reasonable
credit judgment, in each case as the same may be amended, restated or otherwise modified from time
to time, and “Subordination Agreement” shall mean any one of them.



     “Subsidiary(ies)” shall mean any other corporation, association, joint stock company, business
trust, limited liability company, partnership or any other business entity of which more than fifty
percent (50%) of the outstanding voting stock, share capital, membership, partnership or other
interests, as the case may be, is owned either directly or indirectly by any Person or one or more
of its Subsidiaries, or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by any Person and/or its Subsidiaries. Unless
otherwise specified to the contrary herein or the context otherwise requires, Subsidiary(ies) shall
refer to the Subsidiary(ies) of Borrower.



     “Sweep Agreement” means any agreement relating to the “Sweep to Loan” automated system of the
Agent or any other cash management arrangement which the Borrower and the Agent have executed for
the purposes of effecting the borrowing and repayment of Swing Line Advances.



     “Swing Line” shall mean the revolving credit loans to be advanced to Borrower by the Swing
Line Lender pursuant to Section 2.5 hereof, in an aggregate amount (subject to the terms hereof),
not to exceed, at any one time outstanding, the Swing Line Maximum Amount.



     “Swing Line Advance” shall mean a borrowing requested by Borrower and made by Swing Line
Lender pursuant to Section 2.5 hereof and may include, subject to the terms hereof, Quoted
Rate-Advances and Prime-based Advances.



     “Swing Line Lender” shall mean Comerica Bank in its capacity as lender of the Swing Line under
Section 2.5 of this Agreement, or its successor as subsequently designated hereunder.



     “Swing Line Maximum Amount” shall mean Five Million Dollars ($5,000,000).



     “Swing Line Note” shall mean the swing line note which may be issued by Borrower to Swing Line
Lender pursuant to Section 2.5(b)(ii) hereof in the form annexed hereto as Exhibit C, as such note
may be amended or supplemented from time to time, and any note or notes issued in substitution,
replacement or renewal thereof from time to time.



     “Swing Line Participation Certificate” shall mean the Swing Line Participation



23









 







Certificate delivered by Agent to each Revolving Credit Lender pursuant to Section 2.5(e)(ii)
hereof in the form annexed hereto as Exhibit M.



     “Term Loan” shall mean the term loan to be made to Borrower by the Term Loan Lenders pursuant
to Section 4.1(a) hereof, in the aggregate principal amount of Thirty Million Dollars
($30,000,000).



     “Term Loan Advance” shall mean a borrowing requested by Borrower and made by the Term Loan
Lenders pursuant to Section 4.1(a) hereof, including without limitation any refunding or conversion
of such borrowing pursuant to Section 4.4 hereof, and may include, subject to the terms hereof,
Eurodollar-based Advances and Prime-based Advances.



     “Term Loan Amount” shall mean with respect to any Term Loan Lender, the amount equal to its
Term Loan Percentage of the aggregate principal amount outstanding under the Term Loan.



     “Term Loan Lenders” shall mean the financial institutions from time to time parties hereto as
lenders of the Term Loan.



     “Term Loan Maturity Date” shall mean September 30, 2013.



     “Term Notes” shall mean the term notes described in Section 4.2(e) hereof, made by Borrower to
each of the Term Loan Lenders in the form annexed hereto as Exhibit K, as such notes may be amended
or supplemented from time to time, and any other notes issued in substitution, replacement or
renewal thereof from time to time.



     “Term Loan Percentage” shall mean with respect to any Term Loan Lender, the percentage
specified opposite such Term Loan Lender’s name in the column entitled “Term Loan Percentage” on
Schedule 1.2, as adjusted from time to time in accordance with the terms hereof.



     “Term Loan Rate Request” shall mean a request for the refunding or conversion of any Advance
of the Term Loan submitted by Borrower under Section 4.4 of this Agreement in the form annexed
hereto as Exhibit L.



     “Total Assets” is defined in accordance with GAAP and shall be determined on a consolidated
basis for Borrower and its consolidates Subsidiaries.



     “Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect in any
applicable state; provided that, unless specified otherwise or the context otherwise requires, such
terms shall refer to the Uniform Commercial Code as in effect in the State of Michigan.



     “USA Patriot Act” is defined in Section 6.7.



     “Weighted Percentage” shall mean with respect to any Lender, its percentage share as set forth
in Schedule 1.2, as such Schedule may be revised by the Agent from time to time, which percentage
shall be calculated as follows:



24









 





     (a) as to such Lender, so long as the Revolving Credit Aggregate Commitment has not been
terminated, its weighted percentage calculated by dividing (i) the sum of (x) its Revolving Credit
Commitment Amount plus (y) its Term Loan Amount, by (ii) the sum of (x) the Revolving Credit
Aggregate Commitment plus (y) the aggregate principal amount of Indebtedness outstanding under the
Term Loan; and



     (b) as to such Lender, if the Revolving Credit Aggregate Commitment has been terminated
(whether by maturity, acceleration or otherwise), its weighted percentage calculated by dividing
(i) the sum of (x) its applicable Revolving Credit Commitment Amount plus (y) its Term Loan Amount,
by (ii) the sum of the aggregate principal amount outstanding under (x) the Revolving Credit
(including any outstanding Letter of Credit Obligations and outstanding Swing Line Advances), (y)
the Term Loan.



     “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle
E of Title IV of ERISA.



2. REVOLVING CREDIT.




     2.1 Commitment. Subject to the terms and conditions of this Agreement (including without limitation Section
2.3 hereof), each Revolving Credit Lender severally and for itself alone agrees to make Advances of
the Revolving Credit in Dollars to Borrower from time to time on any Business Day during the period
from the Effective Date hereof until (but excluding) the Revolving Credit Maturity Date in an
aggregate amount, not to exceed at any one time outstanding such Lender’s Revolving Credit
Percentage of the Revolving Credit Aggregate Commitment. Subject to the terms and conditions set
forth herein, advances, repayments and readvances may be made under the Revolving Credit.



     2.2 Accrual of Interest and Maturity; Evidence of Indebtedness.




	 	(a)	 	Borrower hereby unconditionally promises to pay to the Agent
for the account of each Revolving Credit Lender the then unpaid principal
amount of each Revolving Credit Advance (plus all accrued and unpaid interest)
of such Revolving Credit Lender to Borrower on the Revolving Credit Maturity
Date and on such other dates and in such other amounts as may be required from
time to time pursuant to this Agreement. Subject to the terms and conditions
hereof, each Revolving Credit Advance shall, from time to time from and after
the date of such Advance (until paid), bear interest at its Applicable Interest
Rate.
	 
	 	(b)	 	Each Revolving Credit Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of Borrower
to the appropriate lending office of such Revolving Credit Lender resulting
from each Revolving Credit Advance made by such lending office of such
Revolving Credit Lender from time to time, including the amounts of principal
and interest payable thereon and paid to such Revolving Credit Lender from time to time under this Agreement.




25









 








	 	(c)	 	The Agent shall maintain the Register pursuant to Section
13.8(g), and a subaccount therein for each Revolving Credit Lender, in which
Register and subaccounts (taken together) shall be recorded (i) the amount of
each Revolving Credit Advance made hereunder, the type thereof and each
Eurodollar-Interest Period applicable to any Eurodollar-based Advance, (ii) the
amount of any principal or interest due and payable or to become due and
payable from Borrower to each Revolving Credit Lender hereunder in respect of
the Revolving Credit Advances and (iii) both the amount of any sum received by
the Agent hereunder from Borrower in respect of the Revolving Credit Advances
and each Revolving Credit Lender’s share thereof.
	 
	 	(d)	 	The entries made in the Register maintained pursuant to
paragraph (c) of this Section 2.2 shall, absent manifest error, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of Borrower therein recorded; provided,
however, that the failure of any Revolving Credit Lender or the Agent
to maintain the Register or any account, as applicable, or any error therein,
shall not in any manner affect the obligation of Borrower to repay the
Revolving Credit Advances (and all other amounts owing with respect thereto)
made to Borrower by the Revolving Credit Lenders in accordance with the terms
of this Agreement.
	 
	 	(e)	 	Borrower agrees that, upon written request to the Agent by any
Revolving Credit Lender, Borrower will execute and deliver, to such Revolving
Credit Lender, at Borrower’s own expense, a Revolving Credit Note evidencing
the outstanding Revolving Credit Advances owing to such Revolving Credit
Lender.





     2.3 Requests for and Refundings and Conversions of Advances. Borrower may request an Advance of the Revolving Credit, a refund of any Revolving Credit
Advance in the same type of Advance or to convert any Revolving Credit Advance to any other type of
Revolving Credit Advance only by delivery to Agent of a Request for Revolving Credit Advance
executed by an Authorized Signer for the Borrower, subject to the following:




	 	(a)	 	each such Request for Revolving Credit Advance shall set forth
the information required on the Request for Revolving Credit Advance, including
without limitation:






	 	(i)	 	the proposed date of such Revolving Credit
Advance (or the refunding or conversion of an outstanding Revolving
Credit Advance), which must be a Business Day;
	 
	 	(ii)	 	whether such Advance is a new Revolving Credit
Advance or a refunding or conversion of an outstanding Revolving Credit
Advance; and




26









 






	 	(iii)	 	whether such Revolving Credit Advance is to be
a Prime-based Advance or a Eurodollar-based Advance, and, except in the
case of a Prime-based Advance, the first Eurodollar-Interest Period
applicable thereto, provided, however, that the initial Revolving
Credit Advance made under this Agreement shall be a Prime-based
Advance, which may then be converted into a Eurodollar-based Advance in
compliance with this Agreement.






	 	(b)	 	each such Request for Revolving Credit Advance shall be
delivered to Agent by 12:00 p.m. (Pacific time) three (3) Business Days prior
to the proposed date of the Revolving Credit Advance, except in the case of a
Prime-based Advance, for which the Request for Revolving Credit Advance must be
delivered by 10:00 a.m. (Pacific time) on the proposed date for such Revolving
Credit Advance;
	 
	 	(c)	 	on the proposed date of such Revolving Credit Advance, the sum
of (x) the aggregate principal amount of all Revolving Credit Advances and
Swing Line Advances outstanding on such date (including, without duplication)
the Advances that are deemed to be disbursed by Agent under Section 3.6(a)
hereof in respect of Borrower’s Reimbursement Obligations hereunder), plus (y)
the Letter of Credit Obligations as of such date, in each case after giving
effect to all outstanding requests for Revolving Credit Advances and Swing Line
Advances and for the issuance of any Letters of Credit, shall not exceed the
Revolving Credit Aggregate Commitment;
	 
	 	(d)	 	in the case of a Prime-based Advance, the principal amount of
the initial funding of such Advance, as opposed to any refunding or conversion
thereof, shall be at least $2,000,000 or the remainder available under the
Revolving Credit Aggregate Commitment if less than $2,000,000;
	 
	 	(e)	 	in the case of a Eurodollar-based Advance, the principal amount
of such Advance, plus the amount of any other outstanding Revolving Credit
Advance to be then combined therewith having the same Eurodollar-Interest
Period, if any, shall be at least $2,000,000 (or a larger integral multiple of
$100,000) or the remainder available under the Revolving Credit Aggregate
Commitment if less than $2,000,000 and at any one time there shall not be in
effect more than six (6) different Eurodollar-Interest Periods;
	 
	 	(f)	 	a Request for Revolving Credit Advance, once delivered to
Agent, shall not be revocable by Borrower and shall constitute a certification
by Borrower as of the date thereof that:






	 	(i)	 	all conditions to the making of Revolving
Credit Advances set
forth in this Agreement have been satisfied, and shall remain
satisfied to the date of such Revolving Credit Advance (both




27









 






	 	 	 	before
and immediately after giving effect to such Revolving Credit
Advance);
	 
	 	(ii)	 	there is no Default or Event of Default in
existence, and none will exist upon the making of such Revolving Credit
Advance (both before and immediately after giving effect to such
Revolving Credit Advance); and
	 
	 	(iii)	 	the representations and warranties of the
Credit Parties contained in this Agreement and the other Loan Documents
are true and correct in all material respects and shall be true and
correct in all material respects as of the date of the making of such
Revolving Credit Advance (both before and immediately after giving
effect to such Revolving Credit Advance), other than any representation
or warranty that expressly speaks only as of a different date;





Agent, acting on behalf of the Revolving Credit Lenders, may also, at its option, lend under this
Section 2.3 upon the telephone or email request of an Authorized Signer of the Borrower to make
such requests and, in the event Agent, acting on behalf of the Revolving Credit Lenders, makes any
such Advance upon a telephone or email request, an Authorized Signer shall fax or deliver by
electronic file to Agent, on the same day as such telephone or email request, an executed Request
for Revolving Credit Advance. Borrower hereby authorizes Agent to disburse Advances under this
Section 2.3 pursuant to the telephone or email instructions of any person purporting to be an
Authorized Signer. Notwithstanding the foregoing, Borrower acknowledges that Borrower shall bear
all risk of loss resulting from disbursements made upon any telephone or email request. Each
telephone or email request for an Advance from an Authorized Signer for the Borrower shall
constitute a certification of the matters set forth in the Request for Revolving Credit Advance
form as of the date of such requested Advance.



     2.4 Disbursement of Advances.



     (a) Upon receiving any Request for Revolving Credit Advance from Borrower under Section 2.3
hereof, Agent shall promptly notify each Revolving Credit Lender by wire, telex or telephone
(confirmed by wire, telecopy or telex) of the amount of such Advance being requested and the date
such Revolving Credit Advance is to be made by each Revolving Credit Lender in an amount equal to
its Revolving Credit Percentage of such Advance. Unless such Revolving Credit Lender’s commitment
to make Revolving Credit Advances hereunder shall have been suspended or terminated in accordance
with this Agreement, each such Revolving Credit Lender shall make available the amount of its
Revolving Credit Percentage of each Revolving Credit Advance in immediately available funds to
Agent, as follows:




	 	(i)	 	for Prime-based Advances, at the office of
Agent located at 75 East Trimble Road, San Jose, California 95131, not
later than 12:00 p.m. (Pacific time) on the date of such Advance; and
	 
	 	(ii)	 	for Eurodollar-based Advances, at the Agent’s
Correspondent for the account of the Eurodollar Lending Office of the
Agent, not




28









 






	 	 	 	later than 12:00 p.m. (the time of the Agent’s
Correspondent) on the date of such Advance.





     (b) Subject to submission of an executed Request for Revolving Credit Advance by Borrower
without exceptions noted in the compliance certification therein, Agent shall make available to
Borrower the aggregate of the amounts so received by it from the Revolving Credit Lenders in like
funds and currencies:




	 	(i)	 	for Prime-based Advances, not later than 1:00
p.m. (Pacific time) on the date of such Revolving Credit Advance, by
credit to an account of Borrower maintained with Agent or to such other
account or third party as Borrower may reasonably direct in writing,
provided such direction is timely given; and
	 
	 	(ii)	 	for Eurodollar-based Advances, not later than
1:00 p.m. (the time of the Agent’s Correspondent) on the date of such
Revolving Credit Advance, by credit to an account of Borrower
maintained with Agent’s Correspondent or to such other account or third
party as Borrower may direct, provided such direction is timely given.





     (c) Agent shall deliver the documents and papers received by it for the account of each
Revolving Credit Lender to such Revolving Credit Lender. Unless Agent shall have been notified by
any Revolving Credit Lender prior to the date of any proposed Revolving Credit Advance that such
Revolving Credit Lender does not intend to make available to Agent such Revolving Credit Lender’s
Percentage of such Advance, Agent may assume that such Revolving Credit Lender has made such amount
available to Agent on such date, as aforesaid. Agent may, but shall not be obligated to, make
available to Borrower the amount of such payment in reliance on such assumption. If such amount is
not in fact made available to Agent by such Revolving Credit Lender, as aforesaid, Agent shall be
entitled to recover such amount on demand from such Revolving Credit Lender. If such Revolving
Credit Lender does not pay such amount forthwith upon Agent’s demand therefor and the Agent has in
fact made a corresponding amount available to Borrower, the Agent shall promptly notify Borrower
and Borrower shall pay such amount to Agent, if such notice is delivered to Borrower prior to 10:00
a.m. (Pacific time) on a Business Day, on the day such notice is received, and otherwise on the
next Business Day, and such amount paid by Borrower shall be applied as a prepayment of the
Revolving Credit (without any corresponding reduction in the Revolving Credit Aggregate
Commitment), reimbursing Agent for having funded said amounts on behalf of such Revolving Credit
Lender. The Borrower shall retain its claim against such Revolving Credit Lender with respect to
the amounts repaid by it to Agent and, if such Revolving Credit Lender subsequently makes such
amounts available to Agent, Agent shall promptly make such amounts available to the Borrower as a
Revolving Credit Advance. Agent shall also be entitled to recover from such Revolving Credit Lender
or Borrower, as the case may be, but without duplication, interest on such amount in respect of
each day from the date such amount was made available by Agent to Borrower, to the date such amount
is recovered by Agent, at a rate per annum equal to:




	 	(i)	 	in the case of such Revolving Credit Lender,
for the first two (2) Business Days such amount remains unpaid, the
Federal Funds




29









 






	 	 	 	Effective Rate, and thereafter, at the rate of interest
then applicable to such Revolving Credit Advances; and
	 
	 	(ii)	 	in the case of Borrower, the rate of interest
then applicable to such Advance of the Revolving Credit.




Until such Revolving Credit Lender has paid Agent such amount, such Revolving Credit Lender shall
have no interest in or rights with respect to such Advance for any purpose whatsoever. The
obligation of any Revolving Credit Lender to make any Revolving Credit Advance hereunder shall not
be affected by the failure of any other Revolving Credit Lender to make any Advance hereunder, and
no Revolving Credit Lender shall have any liability to Borrower or any of its Subsidiaries, the
Agent, any other Revolving Credit Lender, or any other party for another Revolving Credit Lender’s
failure to make any loan or Advance hereunder.




     2.5 Swing Line. (a) Swing Line Advances. The Swing Line Lender may, on the terms and subject to the
conditions hereinafter set forth (including without limitation Section 2.5(c) hereof), but shall
not be required to, make one or more Advances (each such advance being a “Swing Line Advance”) to
the Borrower from time to time on any Business Day during the period from the Effective Date hereof
until (but excluding) the Revolving Credit Maturity Date in an aggregate amount not to exceed at
any one time outstanding the Swing Line Maximum Amount. Subject to the terms set forth herein,
advances, repayments and readvances may be made under the Swing Line.



     (b) Accrual of Interest and Maturity; Evidence of Indebtedness.




	 	(i)	 	Swing Line Lender shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness
of the Borrower to Swing Line Lender resulting from each Swing Line
Advance from time to time, including the amount and date of each Swing
Line Advance, its Applicable Interest Rate, its Interest Period, if
any, and the amount and date of any repayment made on any Swing Line
Advance from time to time. The entries made in such account or accounts
of Swing Line Lender shall be prima facie evidence, absent manifest
error, of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of Swing Line
Lender to maintain such account, as applicable, or any error therein,
shall not in any manner affect the obligation of the Borrower to repay
the Swing Line Advances (and all other amounts owing with respect
thereto) in accordance with the terms of this Agreement.
	 
	 	(ii)	 	The Borrower agrees that, upon the written
request of Swing Line Lender, the Borrower will execute and deliver to
Swing Line Lender a Swing Line Note.
	 
	 	(iii)	 	Borrower unconditionally promises to pay to
the Swing Line Lender the then unpaid principal amount of such Swing
Line




30









 






	 	 	 	Advance (plus all accrued and unpaid interest) on the Revolving
Credit Maturity Date and on such other dates and in such other amounts
as may be required from time to time pursuant to this Agreement.
Subject to the terms and conditions hereof, each Swing Line Advance
shall, from time to time after the date of such Advance (until paid),
bear interest at its Applicable Interest Rate.






	 	(c)	 	Requests for Swing Line Advances. Borrower may request
a Swing Line Advance by the delivery to Swing Line Lender of a Request for
Swing Line Advance executed by an Authorized Signer for the Borrower, subject
to the following:






	 	(i)	 	each such Request for Swing Line Advance shall
set forth the information required on the Request for Advance,
including without limitation, (A) the proposed date of such Swing Line
Advance, which must be a Business Day, (B) whether such Swing Line
Advance is to be a Prime-based Advance or a Quoted Rate Advance, and
(C) in the case of a Quoted Rate Advance, the duration of the Interest
Period applicable thereto;
	 
	 	(ii)	 	on the proposed date of such Swing Line
Advance, after giving effect to all outstanding requests for Swing Line
Advances made by Borrower as of the date of determination, the
aggregate principal amount of all Swing Line Advances outstanding on
such date shall not exceed the Swing Line Maximum Amount;
	 
	 	(iii)	 	on the proposed date of such Swing Line
Advance, after giving effect to all outstanding requests for Revolving
Credit Advances and Swing Line Advances and Letters of Credit requested
by the Borrower on such date of determination (including, without
duplication, Advances that are deemed disbursed pursuant to Section
3.6(a) hereof in respect of the Borrower’s Reimbursement Obligations
hereunder), the sum of (x) the aggregate principal amount of all
Revolving Credit Advances and the Swing Line Advances outstanding on
such date plus (y) the Letter of Credit Obligations on such date shall
not exceed the Revolving Credit Aggregate Commitment;
	 
	 	(iv)	 	(A) in the case of a Swing Line Advance that is
a Prime-based Advance, the principal amount of the initial funding of
such Advance, as opposed to any refunding or conversion thereof, shall
be at least Two




31









 






	 	 	 	Hundred Fifty Thousand Dollars ($250,000) or such
lesser amount as may be agreed to by the Swing Line Lender, and (B) in
the case of a Swing Line Advance that is a Quoted Rate Advance, the
principal amount of such Advance, plus any other
outstanding Swing Line Advances to be then combined therewith having
the same Interest Period, if any, shall be at least Two Hundred Fifty
Thousand Dollars ($250,000) or such lesser amount as may be agreed to
by the Swing Line Lender, and at any time there shall not be in
effect more than three (3) Interest Rates and Interest Periods;
	 
	 	(v)	 	each such Request for Swing Line Advance shall
be delivered to the Swing Line Lender by 11:00 a.m. (Pacific time) on
the proposed date of the Swing Line Advance;
	 
	 	(vi)	 	each Request for Swing Line Advance, once
delivered to Swing Line Lender, shall not be revocable by Borrower, and
shall constitute and include a certification by Borrower as of the date
thereof that:






	 	(A)	 	all conditions to the making of
Swing Line Advances set forth in this Agreement shall have been
satisfied and shall remain satisfied to the date of such Swing
Line Advance (both before and immediately after giving effect to
such Swing Line Advance);
	 
	 	(B)	 	there is no Default or Event of
Default in existence, and none will exist upon the making of
such Swing Line Advance (both before and immediately after
giving effect to such Swing Line Advance); and
	 
	 	(C)	 	the representations and
warranties of the Credit Parties contained in this Agreement and
the other Loan Documents are true and correct in all material
respects and shall be true and correct in all material respect
as of the date of the making of such Swing Line Advance (both
before and immediately after giving effect to such Swing Line
Advance), other than any representation or warranty that
expressly speaks only as of a different date;






	 	(vii)	 	At the option of the Agent, subject to
revocation by Agent at any time and from time to time and so long as
the Agent is the Swing Line Lender, Borrower may utilize the Agent’s
“Sweep to Loan” automated system for obtaining Swing Line Advances and
making periodic repayments. At any time during which the “Sweep to
Loan” system is in effect, Swing Line Advances shall be advanced to
fund borrowing needs pursuant to the terms of the Sweep Agreement. Each
time a Swing Line Advance is made using the “Sweep to Loan” system,
Borrower shall be deemed to have certified to the Agent and the Lenders
each of the matters set forth in clause (vi) of this Section 2.5(b).
Principal and interest on
Swing Line Advances requested, or deemed requested, pursuant to this
Section shall be paid pursuant to the terms and conditions of




32









 






	 	 	 	the
Sweep Agreement without any deduction, setoff or counterclaim
whatsoever. Unless sooner paid pursuant to the provisions hereof or
the provisions of the Sweep Agreement, the principal amount of the
Swing Loans shall be paid in full, together with accrued interest
thereon, on the Revolving Credit Maturity Date. Agent may suspend or
revoke Borrower’s privilege to use the “Sweep to Loan” system at any
time and from time to time for any reason and, immediately upon any
such revocation, the “Sweep to Loan” system shall no longer be
available to Borrower for the funding of Swing Line Advances
hereunder (or otherwise), and the regular procedures set forth in
this Section 2.5 for the making of Swing Line Advances shall be
deemed immediately to apply. Agent may, at its option, also elect to
make Swing Line Advances upon Borrower’s telephone requests on the
basis set forth in the last paragraph of Section 2.3, provided that
the Borrower complies with the provisions set forth in this Section
2.5.






	 	(d)	 	Disbursement of Swing Line Advances. Upon receiving
any executed Request for Swing Line Advance from the Borrower and the
satisfaction of the conditions set forth in Section 2.5(c) hereof, Swing Line
Lender shall make available to Borrower the amount so requested in Dollars not
later than 2:00 p.m. (Pacific time) on the date of such Advance, by credit to
an account of Borrower maintained with Agent or to such other account or third
party as the Borrower may reasonably direct in writing, provided such direction
is timely given. Swing Line Lender shall promptly notify Agent of any Swing
Line Advance by telephone, telex or telecopier.
	 
	 	(e)	 	Refunding of or Participation Interest in Swing Line
Advances.






	 	(i)	 	The Agent, at any time in its sole and absolute
discretion, may, in each case on behalf of the Borrower (which hereby
irrevocably directs the Agent to act on their behalf) request each of
the Revolving Credit Lenders (including the Swing Line Lender in its
capacity as a Revolving Credit Lender) to make an Advance of the
Revolving Credit to Borrower, in an amount equal to such Revolving
Credit Lender’s Revolving Credit Percentage of the aggregate principal
amount of the Swing Line Advances outstanding on the date such notice
is given (the “Refunded Swing Line Advances”); provided however that
the Swing Line Advances carried at the Quoted Rate which are refunded
with Revolving Credit Advances at the request of the Swing Line Lender
at a time when no Default or Event of Default has occurred and is
continuing shall not be subject to Section 11.1 and no losses, costs or
expenses may be assessed by the Swing Line Lender against the Borrower
or the Revolving Credit Lenders as a consequence of
such refunding. The applicable Revolving Credit Advances used to
refund any Swing Line Advances shall be Prime-based Advances.




33









 






	 	 	 	In
connection with the making of any such Refunded Swing Line Advances
or the purchase of a participation interest in Swing Line Advances
under Section 2.5(e)(ii) hereof, the Swing Line Lender shall retain
its claim against Borrower for any unpaid interest or fees in respect
thereof accrued to the date of such refunding. Unless any of the
events described in Section 9.1(i) hereof shall have occurred (in
which event the procedures of Section 2.5(e)(ii) shall apply) and
regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then
satisfied (but subject to Section 2.5(e)(iii)), each Revolving Credit
Lender shall make the proceeds of its Revolving Credit Advance
available to the Agent for the benefit of the Swing Line Lender at
the office of the Agent specified in Section 2.4(a) hereof prior to
10:00 a.m. Pacific time on the Business Day next succeeding the date
such notice is given, in immediately available funds. The proceeds of
such Revolving Credit Advances shall be immediately applied to repay
the Refunded Swing Line Advances, subject to Section 11.1 hereof.
	 
	 	(ii)	 	If, prior to the making of an Advance of the
Revolving Credit pursuant to Section 2.5(e)(i) hereof, one of the
events described in Section 9.1(i) hereof shall have occurred, each
Revolving Credit Lender will, on the date such Advance of the Revolving
Credit was to have been made, purchase from the Swing Line Lender an
undivided participating interest in each Swing Line Advance that was to
have been refunded in an amount equal to its Revolving Credit
Percentage of such Swing Line Advance. Each Revolving Credit Lender
within the time periods specified in Section 2.5(e)(i) hereof, as
applicable, shall immediately transfer to the Agent, for the benefit of
the Swing Line Lender, in immediately available funds, an amount equal
to its Revolving Credit Percentage of the aggregate principal amount of
all Swing Line Advances outstanding as of such date. Upon receipt
thereof, the Agent will deliver to such Revolving Credit Lender a Swing
Line Participation Certificate evidencing such participation.
	 
	 	(iii)	 	Each Revolving Credit Lender’s obligation to
make Revolving Credit Advances to refund Swing Line Advances, and to
purchase participation interests, in accordance with Section 2.5(e)(i)
and (ii), respectively, shall be absolute and unconditional and shall
not be affected by any circumstance, including, without limitation, (A)
any set-off, counterclaim, recoupment, defense or other right which
such Revolving Credit Lender may have against Swing Line Lender,
Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of any Default or Event of
Default; (C) any adverse change in the condition (financial or
otherwise) of Borrower or any other Person; (D) any breach of this




34









 






	 	 	 	Agreement or any other Loan Document by Borrower or any other Person;
(E) any inability of Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which such
Revolving Credit Advance is to be made or such participating interest
is to be purchased; (F) the termination of the Revolving Credit
Aggregate Commitment hereunder; or (G) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing. If any Revolving Credit Lender does not make available to
the Agent the amount required pursuant to Section 2.5(e)(i) or (ii)
hereof, as the case may be, the Agent on behalf of the Swing Line
Lender, shall be entitled to recover such amount on demand from such
Revolving Credit Lender, together with interest thereon for each day
from the date of non-payment until such amount is paid in full (x)
for the first two (2) Business Days such amount remains unpaid, at
the Federal Funds Effective Rate and (y) thereafter, at the rate of
interest then applicable to such Swing Line Advances. The obligation
of any Revolving Credit Lender to make available its pro rata portion
of the amounts required pursuant to Section 2.5(e)(i) or (ii) hereof
shall not be affected by the failure of any other Revolving Credit
Lender to make such amounts available, and no Revolving Credit Lender
shall have any liability to any Credit Party, the Agent, the Swing
Line Lender, or any other Revolving Credit Lender or any other party
for another Revolving Credit Lender’s failure to make available the
amounts required under Section 2.5(e)(i) or (ii) hereof.
	 
	 	(iv)	 	Notwithstanding the foregoing, no Revolving
Credit Lender shall be required to make any Revolving Credit Advance to
refund a Swing Line Advance or to purchase a participation in a Swing
Line Advance if at least two (2) Business Days prior to the making of
such Swing Line Advance by the Swing Line Lender, the officers of the
Swing Line Lender immediately responsible for matters concerning this
Agreement shall have received written notice from Agent or any Lender
that Swing Line Advances should be suspended based on the occurrence
and continuance of a Default or Event of Default and stating that such
notice is a “notice of default”; provided, however that the obligation
of the Revolving Credit Lenders to make such Revolving Credit Advances
(or purchase such participations) shall be reinstated upon the date on
which such Default or Event of Default has been waived by the requisite
Lenders.





     2.6 Interest Payments; Default Interest.



     (a) Interest on the unpaid balance of all Prime-based Advances of the Revolving Credit and the
Swing Line from time to time outstanding shall accrue from the date of such



35









 







Advance to the date
repaid, at a per annum interest rate equal to the Prime-based Rate, and shall be payable in
immediately available funds commencing on January 1, 2009, and on the first day of each calendar
quarter thereafter. Whenever any payment under this Section 2.6(a) shall become due on a day which
is not a Business Day, the date for payment thereof shall be extended to the next Business Day.
Interest accruing at the Prime-based Rate shall be computed on the basis of a 360 day year and
assessed for the actual number of days elapsed, and in such computation effect shall be given to
any change in the interest rate resulting from a change in the Prime-based Rate on the date of such
change in the Prime-based Rate.



     (b) Interest on each Eurodollar-based Advance of the Revolving Credit shall accrue at its
Eurodollar-based Rate and shall be payable in immediately available funds on the last day of the
Eurodollar-Interest Period applicable thereto (and, if any Eurodollar-Interest Period shall exceed
three months, then on the last Business Day of the third month of such Eurodollar-Interest Period,
and at three month intervals thereafter). Interest accruing at the Eurodollar-based Rate shall be
computed on the basis of a 360 day year and assessed for the actual number of days elapsed from the
first day of the Eurodollar-Interest Period applicable thereto to but not including the last day
thereof.



     (c) Interest on each Quoted Rate Advance of the Swing Line shall accrue at its Quoted Rate and
shall be payable in immediately available funds on the last day of the Interest Period applicable
thereto. Interest accruing at the Quoted Rate shall be computed on the basis of a 360-day year and
assessed for the actual number of days elapsed from the first day of the Interest Period applicable
thereto to, but not including, the last day thereof.



     (d) Notwithstanding anything to the contrary in the preceding sections, all accrued and unpaid
interest on any Revolving Credit Advance refunded or converted pursuant to Section 2.3 hereof and
any Swing Line Advance refunded pursuant to Section 2.5(e) hereof, shall be due and payable in full
on the date such Advance is refunded or converted.



     (e) In the case of any Event of Default under Section 9.1(i), immediately upon the occurrence
thereof, and in the case of any other Event of Default, immediately upon receipt by Agent of notice
from the Majority Revolving Credit Lenders, interest shall be payable on demand on all Revolving
Credit Advances and Swing Line Advances from time to time outstanding at a per annum rate equal to
the Applicable Interest Rate in respect of each such Advance plus, in the case of Eurodollar-based
Advances and Quoted Rate Advances, two percent (2%) for the remainder of the then existing Interest
Period, if any, and at all other such times, and for all Prime-based Advances from time to time
outstanding, at a per annum rate equal to the Prime-based Rate plus two percent (2%) (but in no
event in excess of the maximum interest rate permitted by applicable law).



     2.7 Optional Prepayments.



     (a) (i) The Borrower may prepay all or part of the outstanding principal of any Prime-
based Advance(s) of the Revolving Credit at any time, provided that, unless the “Sweep to
Loan” system shall be in effect in respect of the Revolving Credit, after giving effect to any
partial prepayment, the aggregate balance of Prime-based Advance(s) of the Revolving Credit
remaining outstanding shall be at least One Million Dollars ($1,000,000), and (ii) subject to



36









 







Section 2.10(c) hereof, the Borrower may prepay all or part of the outstanding principal of any
Eurodollar-based Advance of the Revolving Credit at any time (subject to not less than three (3)
Business Day’s notice to Agent) provided that, after giving effect to any partial prepayment, the
unpaid portion of such Advance which is to be refunded or converted under Section 2.3 hereof shall
be at least One Million Dollars ($1,000,000).



     (b) (i) The Borrower may prepay all or part of the outstanding principal of any Swing Line
Advance carried at the Prime-based Rate at any time, provided that after giving effect to any
partial prepayment, the aggregate balance of such Prime-based Swing Line Advances remaining
outstanding shall be at least One Hundred Thousand Dollars ($100,000) and (ii) subject to Section
2.10(c) hereof, the Borrower may prepay all or part of the outstanding principal of any Swing Line
Advance carried at the Quoted Rate at any time (subject to not less than one (1) day’s notice to
the Swing Line Lender) provided that after giving effect to any partial prepayment, the aggregate
balance of such Quoted Rate Swing Line Advances remaining outstanding shall be at least Two Hundred
Fifty Thousand Dollars ($250,000).



     (c) Any prepayment of a Prime-based Advance made in accordance with this Section shall be
without premium or penalty and any prepayment of any other type of Advance shall be subject to the
provisions of Section 11.1 hereof, but otherwise without premium or penalty.



     2.8 Prime-based Advance in Absence of Election or Upon Default. If, (a) as to any outstanding Eurodollar-based Advance of the Revolving Credit or any
outstanding Quoted Rate Advance of the Swing Line, Agent has not received payment of all
outstanding principal and accrued interest on the last day of the Interest Period applicable
thereto, or does not receive a timely Request for Advance meeting the requirements of Section 2.3
or 2.5 hereof with respect to the refunding or conversion of such Advance, or (b) if on the last
day of the applicable Interest Period a Default or an Event of Default shall have occurred and be
continuing, then, on the last day of the applicable Interest Period the principal amount of any
Eurodollar-based Advance or Quoted Rate Advance, as the case may be, which has not been prepaid
shall, absent a contrary election of the Majority Revolving Credit Lenders, be converted
automatically to a Prime-based Advance and the Agent shall thereafter promptly notify Borrower of
said action. All accrued and unpaid interest on any Advance converted to a Prime-based Advance
under this Section 2.8 shall be due and payable in full on the date such Advance is converted.



     2.9 Revolving Credit Facility Fee. From the Effective Date to the Revolving Credit Maturity Date, the Borrower shall pay to
the Agent for distribution to the Lenders pro-rata in accordance with their respective Percentages,
a Revolving Credit Facility Fee quarterly in arrears commencing January 1, 2009, and on the first
day of each calendar quarter thereafter (in respect of the prior three months or any portion
thereof). The Revolving Credit Facility Fee payable to each Lender shall be
determined by multiplying the Applicable Fee Percentage times the Revolving Credit Aggregate
Commitment then in effect (whether used or unused). The Revolving Credit Facility Fee shall be
computed on the basis of a year of three hundred sixty (360) days and assessed for the actual
number of days elapsed. Whenever any payment of the Revolving Credit Facility Fee shall be due on a
day which is not a Business Day, the date for payment thereof shall be extended to the next
Business Day. Upon receipt of such payment, Agent shall make prompt payment to each Lender of its
share of the Revolving Credit Facility Fee based upon its respective Percentage. The Revolving
Credit Facility Fees described in this
Section are not refundable.



37









 





     2.10 Mandatory Repayment of Revolving Credit Advances.



     (a) If at any time and for any reason the aggregate outstanding principal amount of Revolving
Credit Advances plus Swing Line Advances, plus the outstanding Letter of Credit Obligations, shall
exceed the Revolving Credit Aggregate Commitment, Borrower shall immediately reduce any pending
request for a Revolving Credit Advance on such day by the amount of such excess and, to the extent
any excess remains thereafter, repay any Revolving Credit Advances and Swing Line Advances in an
amount equal to the lesser of the outstanding amount of such Advances and the amount of such
remaining excess, with such amounts to be applied between the Revolving Credit Advances and Swing
Line Advances as determined by the Agent and then, to the extent that any excess remains after
payment in full of all Revolving Credit Advances and Swing Line Advances, to provide cash
collateral in support of any Letter of Credit Obligations in an amount equal to the lesser of (x)
105% of the amount of such Letter of Credit Obligations and (y) the amount of such remaining
excess, with such cash collateral to be provided on the basis set forth in Section 9.2 hereof.
Borrower acknowledges that, in connection with any repayment required hereunder, it shall also be
responsible for the reimbursement of any prepayment or other costs required under Section 11.1
hereof. Any payments made pursuant to this Section shall be applied first to outstanding
Prime-based Advances under the Revolving Credit, next to Swing Line Advances carried at the
Prime-based Rate and then to Eurodollar-based Advances of the Revolving Credit, and then to Swing
Line Advances carried at the Quoted Rate.



     (b) Upon the payment in full of the Term Loan, any prepayments required to be made on the Term
Loan pursuant to Sections 4.8(a), (b) and (c) of this Agreement shall instead be applied to prepay
any amounts outstanding under the Revolving Credit, without resulting in a permanent reduction in
the Revolving Credit Agreement Commitment. Subject to Section 10.2 hereof, any payments made
pursuant to this Section shall be applied first to outstanding Prime-based Advances under the
Revolving Credit, next to Swing Line Advances carried at the Prime-based Rate, next to
Eurodollar-based Advances under the Revolving Credit, and then to Swing Line Advances carried at
the Quoted Rate. If any amounts remain thereafter, a portion of such prepayment equivalent to the
undrawn amount of any outstanding Letters of Credit shall be held by Lender as cash collateral for
the Reimbursement Obligations, with any additional prepayment monies being applied to any Fees,
costs or expenses due and outstanding under this Agreement, and with the remainder of such
prepayment thereafter being returned to Borrower.



     (c) To the extent that, on the date any mandatory repayment of the Revolving Credit Advances
under this Section 2.10 or payment pursuant to the terms of any of the Loan Documents is due, the
Indebtedness under the Revolving Credit or any other Indebtedness to be
prepaid is being carried, in whole or in part, at the Eurodollar-based Rate and no Default or
Event of Default has occurred and is continuing, Borrower may deposit the amount of such mandatory
prepayment in a cash collateral account to be held by the Agent, for and on behalf of the Revolving
Credit Lenders, on such terms and conditions as are reasonably acceptable to Agent and upon such
deposit the obligation of Borrower to make such mandatory prepayment shall be deemed satisfied.
Subject to the terms and conditions of said cash collateral account, sums on deposit in said cash
collateral account shall be applied (until exhausted) to reduce the



38









 







principal balance of the
Revolving Credit on the last day of each Eurodollar-Interest Period attributable to the
Eurodollar-based Advances of such Revolving Advance, thereby avoiding breakage costs under Section
11.1 hereof; provided, however, that if a Default or Event of Default shall have occurred at any
time while sums are on deposit in the cash collateral account, Agent may, in its sole discretion,
elect to apply such sums to reduce the principal balance of such Eurodollar-based Advances prior to
the last day of the applicable Eurodollar-Interest Period, and the Borrower will be obligated to
pay any resulting breakage costs under Section 11.1.



     2.11 Optional Reduction or Termination of Revolving Credit Aggregate Commitment. Borrower may, upon at least five (5) Business Days’ prior written notice to the Agent,
permanently reduce the Revolving Credit Aggregate Commitment in whole at any time, or in part from
time to time, without premium or penalty, provided that: (i) each partial reduction of the
Revolving Credit Aggregate Commitment shall be in an aggregate amount equal to Five Million Dollars
($5,000,000) or a larger integral multiple of One Hundred Thousand Dollars ($100,000); (ii)
Borrower shall prepay in accordance with the terms hereof the amount, if any, by which the
aggregate unpaid principal amount of Revolving Credit Advances and Swing Line Advances (including,
without duplication, any deemed Advances made under Section 3.6 hereof) outstanding hereunder, plus
the Letter of Credit Obligations, exceeds the amount of the then applicable Revolving Credit
Aggregate Commitment as so reduced, together with interest thereon to the date of prepayment; (iii)
no reduction shall reduce the Revolving Credit Aggregate Commitment to an amount which is less than
the aggregate undrawn amount of any Letters of Credit outstanding at such time; and (iv) no such
reduction shall reduce the Swing Line Maximum Amount unless Borrower so elects, provided that the
Swing Line Maximum Amount shall at no time be greater than the Revolving Credit Aggregate
Commitment; provided, however that if the termination or reduction of the Revolving Credit
Aggregate Commitment requires the prepayment of a Eurodollar-based Advance or a Quoted Rate Advance
and such termination or reduction is made on a day other than the last Business Day of the then
current Interest Period applicable to such Eurodollar-based Advance or such Quoted Rate Advance,
then, pursuant to Section 11.1, Borrower shall compensate the Revolving Credit Lenders and/or the
Swing Line Lender for any losses or, so long as no Default or Event of Default has occurred and is
continuing, Borrower may deposit the amount of such prepayment in a collateral account as provided
in Section 2.10(c). Reductions of the Revolving Credit Aggregate Commitment and any accompanying
prepayments of Advances of the Revolving Credit shall be distributed by Agent to each Revolving
Credit Lender in accordance with such Revolving Credit Lender’s Revolving Percentage thereof, and
will not be available for reinstatement by or readvance to Borrower, and any accompanying
prepayments of Advances of the Swing Line shall be distributed by Agent to the Swing Line Lender
and will not be available for reinstatement by or readvance to the Borrower. Any reductions of the
Revolving Credit Aggregate Commitment hereunder shall reduce each Revolving Credit Lender’s portion
thereof proportionately (based on the applicable
Percentages), and shall be permanent and irrevocable. Any payments made pursuant to this
Section shall be applied first to outstanding Prime-based Advances under the Revolving Credit, next
to Swing Line Advances carried at the Prime-based Rate and then to Eurodollar-based Advances of the
Revolving Credit, and then to Swing Line Advances carried at the Quoted Rate.



     2.12 Use of Proceeds of Advances. Advances of the Revolving Credit shall be used to finance working capital and other lawful
corporate purposes.



39









 





     2.13 Optional Increase in Revolving Credit Aggregate Commitment. Provided that the Borrower has not previously elected to reduce or terminate the Revolving
Credit Aggregate Commitment under Section 2.11 hereof, Borrower may request that the Revolving
Credit Aggregate Commitment be increased in an aggregate amount (for all such Requests for
Increase) under this Section 2.13 not to exceed the Revolving Credit Optional Increase) (on the
same terms as the existing Revolving Credit), subject, in each case, to Section 11.1 hereof and to
the satisfaction concurrently with or prior to the date of each such request of the following
conditions:



     (a) Borrower shall have delivered to the Agent a written request for such increase, specifying
the amount of increase thereby requested (each such request, a “Request for Increase”);
provided, however, that (i) in the event Borrower has previously delivered a
Request for Increase pursuant to this Section 2.13, Borrower may not deliver a subsequent Request
for Increase until all the conditions to effectiveness of such first Request for Increase have been
fully satisfied (or such Request for Increase has been withdrawn); (ii) Borrower may make no more
than three (3) Requests for Increase during the term of this Agreement; and (iii) the amount of
increase requested, when added to the amount of any previous increase in the Revolving Credit
Aggregate Commitment under this Section 2.13, shall not exceed the Revolving Credit Optional
Increase;



     (b) within three (3) Business Days after the Agent’s receipt of any such Request for Increase,
the Agent shall inform each Revolving Credit Lender of the requested increase in the Revolving
Credit Aggregate Commitment, offer each Revolving Credit Lender to increase its applicable
commitment in an amount equal to its applicable Revolving Credit Percentage of the requested
increase in the Revolving Credit Aggregate Commitment, and request each such Revolving Credit
Lender to notify the Agent in writing whether such Revolving Credit Lender desires to increase its
applicable commitment by the requested amount. Each Revolving Credit Lender approving an increase
in its applicable commitment by the requested amount shall deliver its written consent thereto no
later than ten (10) Business Days of the Agent’s informing such Revolving Credit Lender of the
Request for Increase; if the Agent shall not have received a written consent from a Revolving
Credit Lender within such time period, such Revolving Credit Lender shall be deemed to have elected
not to increase its applicable commitment. If any one or more Revolving Credit Lenders shall elect
not to increase their respective commitments, then the Agent may offer to (A) each other Revolving
Credit Lender hereunder on a non-pro rata basis, (B) any other Lender hereunder, or (C) any other
Person meeting the requirements of Section 13.8(c) hereof (including, for the purposes of this
Section 2.13, any existing Revolving Credit
Lender which agrees to increase its commitment hereunder, the “New Revolving Credit
Lender(s)”), to increase their respective applicable commitments (or to provide a commitment);



     (c) the New Revolving Credit Lenders shall have become a party to this Agreement by executing
and delivering a New Lender Addendum for a minimum amount for each such New Revolving Credit Lender
that was not an existing Revolving Credit Lender of Five Million Dollars ($5,000,000) and an
aggregate amount for all such New Revolving Credit Lenders of that portion of the Aggregate
Revolving Credit Optional Increase, taking into account the amount of any prior increase in the
Revolving Credit Aggregate Commitment (pursuant to this Section 2.13) covered by the applicable
Request; provided, however, that each New Revolving Credit Lender shall remit to the Agent funds in
an amount equal to its Percentage (after giving effect to



40









 







this Section 2.13) of all Advances of the
Revolving Credit then outstanding, such sums to be reallocated among and paid to the existing
Revolving Credit Lenders based upon the new Percentages as determined below;



     (d) Borrower shall have paid to the Agent for distribution to the existing Revolving Credit
Lenders, as applicable, all interest, fees (including the Revolving Credit Facility Fee, which
shall not be duplicative) and other amounts, if any, accrued to the effective date of such increase
and any breakage fees attributable to the reduction (prior to the last day of the applicable
Interest Period) of any outstanding Eurocurrency-based Advances, calculated on the basis set forth
in Section 15.1 hereof as though Borrowers had prepaid such Advances;



     (e) if requested, Borrower shall have executed and delivered to the Agent new Revolving Credit
Notes payable to each of the New Revolving Credit Lenders in the face amount of each such New
Revolving Credit Lender’s Percentage of the Revolving Credit Aggregate Commitment (after giving
effect to this Section 2.13) and, if applicable, renewal and replacement Revolving Credit Notes
payable to each of the existing Revolving Credit Lenders in the face amount of each such Lender’s
Revolving Credit Percentage of the Revolving Credit Aggregate Commitment (after giving effect to
this Section 2.13), dated as of the effective date of such increase (with appropriate insertions
relevant to such Notes and acceptable to the applicable Revolving Credit Lenders, including the New
Revolving Credit Lenders);



     (f) no Default or Event of Default shall have occurred and be continuing;



     (g) such other amendments, acknowledgments, consents, documents, instruments, any
registrations, if any, shall have been executed and delivered and/or obtained by Borrower as
required by the Agent, in its reasonable discretion; and



     (h) the Agent may, without the consent of the Majority Lenders or any Lender effect amendments
to this Agreement as may be appropriate in the opinion of the Agent to effect the provisions of
this Section 2.13.



3. LETTERS OF CREDIT.




     3.1 Letters of Credit. Subject to the terms and conditions of this Agreement, Issuing Lender shall through the
Issuing Office, at any time and from time to time from and after the date hereof until thirty (30)
days prior to the Revolving Credit Maturity Date, upon the written request of Borrower
accompanied by a duly executed Letter of Credit Agreement and such other documentation related to
the requested Letter of Credit as the Issuing Lender may require, issue Letters of Credit in
Dollars for the account of Borrower, in an aggregate amount for all Letters of Credit issued
hereunder at any one time outstanding not to exceed the Letter of Credit Maximum Amount. Each
Letter of Credit shall be in a minimum face amount of One Hundred Thousand Dollars ($100,000) (or
such lesser amount as may be agreed to by Issuing Lender) and each Letter of Credit (including any
renewal thereof) shall expire not later than the first to occur of (i) one year after the date of
issuance thereof and (ii) ten (10) Business Days prior to the Revolving Credit Maturity Date in
effect on the date of issuance thereof. The submission of all applications in respect of and the
issuance of each Letter of Credit hereunder shall be subject in all respects to the International
Standby Practices 98, and any successor documentation thereto and to the



41









 







extent not inconsistent
therewith, the laws of the State of Michigan. In the event of any conflict between this Agreement
and any Letter of Credit Document other than any Letter of Credit, this Agreement shall control.



     3.2 Conditions to Issuance. No Letter of Credit shall be issued at the request and for the account of Borrower unless,
as of the date of issuance of such Letter of Credit:




	 	(a)	 	(i) after giving effect to the Letter of Credit requested, the
Letter of Credit Obligations do not exceed the Letter of Credit Maximum Amount;
and (ii) after giving effect to the Letter of Credit requested, the Letter of
Credit Obligations on such date plus the aggregate amount of all Revolving
Credit Advances and Swing Line Advances (including all Advances deemed
disbursed by Agent under Section 3.6(a) hereof in respect of Borrower’
Reimbursement Obligations) hereunder requested or outstanding on such date do
not exceed the Revolving Credit Aggregate Commitment;
	 
	 	(b)	 	the representations and warranties of the Credit Parties
contained in this Agreement and the other Loan Documents are true and correct
in all material respects and shall be true and correct in all material respects
as of date of the issuance of such Letter of Credit (both before and
immediately after the issuance of such Letter of Credit), other than any
representation or warranty that expressly speaks only as of a different date;
	 
	 	(c)	 	there is no Default or Event of Default in existence, and none
will exist upon the issuance of such Letter of Credit;
	 
	 	(d)	 	Borrower shall have delivered to Issuing Lender at its Issuing
Office, not less than three (3) Business Days prior to the requested date for
issuance (or such shorter time as the Issuing Lender, in its sole discretion,
may permit), the Letter of Credit Agreement related thereto, together with such
other documents and materials as may be required pursuant to the terms thereof,
and the terms of the proposed Letter of Credit shall be reasonably
satisfactory to Issuing Lender;
	 
	 	(e)	 	no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or restrain Issuing
Lender from issuing the Letter of Credit requested, or any Revolving Credit
Lender from taking an assignment of its Revolving Credit Percentage thereof
pursuant to Section 3.6 hereof, and no law, rule, regulation, request or
directive (whether or not having the force of law) shall prohibit the Issuing
Lender from issuing, or any Revolving Credit Lender from taking an assignment
of its Revolving Credit Percentage of, the Letter of Credit requested or
letters of credit generally;
	 
	 	(f)	 	there shall have been (i) no introduction of or change in the
interpretation of any law or regulation, (ii) no declaration of a general
banking




42









 






	 	 	 	moratorium by banking authorities in the United States, Michigan or the
respective jurisdictions in which the Revolving Credit Lenders, the Borrower
and the beneficiary of the requested Letter of Credit are located, and (iii) no
establishment of any new restrictions by any central bank or other governmental
agency or authority on transactions involving letters of credit or on banks
generally that, in any case described in this clause (e), would make it
unlawful or unduly burdensome for the Issuing Lender to issue or any Revolving
Credit Lender to take an assignment of its Revolving Credit Percentage of the
requested Letter of Credit or letters of credit generally; and
	 
	 	(g)	 	Issuing Lender shall have received the issuance fees required
in connection with the issuance of such Letter of Credit pursuant to Section
3.4 hereof.




Each Letter of Credit Agreement submitted to Issuing Lender pursuant hereto shall constitute the
certification by Borrower of the matters set forth in Sections 5.2 hereof. The Agent shall be
entitled to rely on such certification without any duty of inquiry.




     3.3 Notice. The Issuing Lender shall deliver to the Agent, concurrently with or promptly following its
issuance of any Letter of Credit, a true and complete copy of each Letter of Credit. Promptly upon
its receipt thereof, Agent shall give notice, substantially in the form attached as Exhibit E, to
each Revolving Credit Lender of the issuance of each Letter of Credit, specifying the amount
thereof and the amount of such Revolving Credit Lender’s Percentage thereof.



     3.4 Letter of Credit Fees; Increased Costs. (a) Borrower shall pay letter of credit fees as follows:




	 	(i)	 	A per annum letter of credit fee with respect
to the undrawn amount of each Letter of Credit issued pursuant hereto
(based on the amount of each Letter of Credit) in the amount of the
Applicable Fee Percentage (determined with reference to Schedule 1.1
to this Agreement) shall be paid to the Agent for distribution to the
Revolving Credit Lenders in accordance with their Percentages.
	 
	 	(ii)	 	A letter of credit facing fee on the face
amount of each Letter of Credit shall be paid to the Agent for
distribution to the Issuing Lender for its own account, in accordance
with the terms of the applicable Fee Letter.






	 	(b)	 	All payments by Borrower to the Agent for distribution to the
Issuing Lender or the Revolving Credit Lenders under this Section 3.4 shall be
made in Dollars in immediately available funds at the Issuing Office or such
other office of the Agent as may be designated from time to time by written
notice to Borrower by the Agent. The fees described in clauses




43









 






	 	 	 	(a)(i) and (ii)
above (i) shall be nonrefundable under all circumstances, (ii) in the case of
fees due under clause (a)(i) above, shall be payable quarterly in arrears (on
the first day of each calendar quarter) and (iii) in the case of fees due under
clause (a)(ii) above, shall be payable upon the issuance of such Letter of
Credit and upon any amendment thereto or extension thereof. The fees due under
clause (a)(i) above shall be determined by multiplying the Applicable Fee
Percentage times the undrawn amount of the face amount of each such Letter of
Credit on the date of determination, and shall be calculated on the basis of a
360 day year and assessed for the actual number of days from the date of the
issuance thereof to the stated expiration thereof. The parties hereto
acknowledge that, unless the Issuing Lender otherwise agrees, any material
amendment and any extension to a Letter of Credit issued hereunder shall be
treated as a new Letter of Credit for the purposes of the letter of credit
facing fee.
	 
	 	(c)	 	If any change in any law or regulation or in the interpretation
thereof by any court or administrative or governmental authority charged with
the administration thereof, adopted after the date hereof, shall either (i)
impose, modify or cause to be deemed applicable any reserve, special deposit,
limitation or similar requirement against letters of credit issued or
participated in by, or assets held by, or deposits in or for the account of,
Issuing Lender or any Revolving Credit Lender or (ii) impose on Issuing Lender
or any Revolving Credit Lender any other condition regarding this Agreement,
the Letters of Credit or any participations in such Letters of Credit, and the
result of any event referred to in clause (i) or (ii) above shall be to
increase the cost or expense to Issuing Lender or such
Revolving Credit Lender
of issuing or maintaining or participating in any of the Letters of Credit
(which increase in cost or expense shall be determined by the Issuing Lender’s
or such Revolving Credit Lender’s reasonable allocation of the aggregate of
such cost increases and expenses resulting from such events), then, upon demand
by the Issuing Lender or such Revolving Credit Lender, as the case may be,
Borrower shall, within
thirty (30) days following demand for payment, pay to Issuing Lender or such
Revolving Credit Lender, as the case may be, from time to time as specified
by the Issuing Lender or such Revolving Credit Lender, additional amounts
which shall be sufficient to compensate the Issuing Lender or such Revolving
Credit Lender for such increased cost and expense (together with interest on
each such amount from ten days after the date such payment is due until
payment in full thereof at the Prime-based Rate), provided that if the
Issuing Lender or such




44









 






	 	 	 	Revolving Credit Lender could take any reasonable
action, without cost or administrative or other burden or restriction to
such Lender, to mitigate or eliminate such cost or expense, it agrees to do
so within a reasonable time after becoming aware of the foregoing matters.
Each demand for payment under this Section 3.4(c) shall be accompanied by a
certificate of Issuing Lender or the applicable Revolving Credit Lender
setting forth the amount of such increased cost or expense incurred by the
Issuing Lender or such Revolving Credit Lender, as the case may be, as a
result of any event mentioned in clause (i) or (ii) above, and in reasonable
detail, the methodology for calculating and the calculation of such amount,
which certificate shall be prepared in good faith and shall be conclusive
evidence, absent manifest error, as to the amount thereof.





     3.5 Other Fees. In connection with the Letters of Credit, and in addition to the Letter of Credit Fees,
Borrower shall pay, for the sole account of the Issuing Lender, standard documentation,
administration, payment and cancellation charges assessed by Issuing Lender or the Issuing Office,
at the times, in the amounts and on the terms set forth or to be set forth from time to time in the
standard fee schedule of the Issuing Office in effect from time to time.



     3.6 Participation Interests in and Drawings and Demands for Payment Under Letters of
Credit.



     (a) Upon issuance by the Issuing Lender of each Letter of Credit hereunder (and on the
Effective Date with respect to each Existing Letter of Credit), each Revolving Credit Lender shall
automatically acquire a pro rata participation interest in such Letter of Credit and each related
Letter of Credit Payment based on its respective Revolving Credit Percentage.



     (b) If the Issuing Lender shall honor a draft or other demand for payment presented or made
under any Letter of Credit, Borrower agrees to pay to the Issuing Lender an amount equal to the
amount paid by the Issuing Lender in respect of such draft or other demand under such Letter of
Credit and all reasonable expenses paid or incurred by the Agent relative thereto not later than
1:00 p.m. (Pacific time), in Dollars, on (i) the Business Day that Borrower received notice of such
presentment and honor, if such notice is received prior to 11:00 a.m. (Pacific time) or (ii) the
Business Day immediately following the day that Borrower received such notice, if such notice is
received after 11:00 a.m. (Pacific time).



     (c) If the Issuing Lender shall honor a draft or other demand for payment presented or
made under any Letter of Credit, but Borrower does not reimburse the Issuing Lender as
required under clause (b) above and the Revolving Credit Aggregate Commitment has not been
terminated (whether by maturity, acceleration or otherwise), the Borrower shall be deemed to have
immediately requested that the Revolving Credit Lenders make a Prime-based Advance of the Revolving
Credit (which Advance may be subsequently converted at any time into a Eurodollar-based Advance
pursuant to Section 2.3 hereof) in the principal amount equal to the amount paid by the Issuing
Lender in respect of such draft or other demand under such Letter of Credit and all reasonable
expenses paid or incurred by the Agent relative thereto. Agent will promptly notify the Revolving
Credit Lenders of such deemed request, and each such Lender shall make available to the Agent an
amount equal to its pro rata share (based on its Revolving Credit Percentage) of the amount of such
Advance.



     (d) If the Issuing Lender shall honor a draft or other demand for payment presented or made
under any Letter of Credit, but Borrower does not reimburse the Issuing Lender as required under
clause (b) above, and (i) the Revolving Credit Aggregate Commitment has been terminated (whether by
maturity, acceleration or otherwise), or (ii) any reimbursement received by the Issuing Lender from
Borrower is or must be returned or rescinded upon or during any



45









 







bankruptcy or reorganization of any
Credit Party or otherwise, then Agent shall notify each Revolving Credit Lender, and each Revolving
Credit Lender will be obligated to pay the Agent for the account of the Issuing Lender its pro rata
share (based on its Revolving Credit Percentage) of the amount paid by the Issuing Lender in
respect of such draft or other demand under such Letter of Credit and all reasonable expenses paid
or incurred by the Agent relative thereto (but no such payment shall diminish the obligations of
the Borrower hereunder). Upon receipt thereof, the Agent will deliver to such Revolving Credit
Lender a participation certificate evidencing its participation interest in respect of such payment
and expenses. To the extent that a Revolving Credit Lender fails to make such amount available to
the Agent by 11:00 a.m. Pacific time on the Business Day next succeeding the date such notice is
given, such Revolving Credit Lender shall pay interest on such amount in respect of each day from
the date such amount was required to be paid, to the date paid to Agent, at a rate per annum equal
to the Federal Funds Effective Rate. The failure of any Revolving Credit Lender to make its pro
rata portion of any such amount available under to the Agent shall not relieve any other Revolving
Credit Lender of its obligation to make available its pro rata portion of such amount, but no
Revolving Credit Lender shall be responsible for failure of any other Revolving Credit Lender to
make such pro rata portion available to the Agent.



     (e) In the case of any Advance made under this Section 3.6, each such Advance shall be
disbursed notwithstanding any failure to satisfy any conditions for disbursement of any Advance set
forth in Article 2 hereof or Article 5 hereof, and, to the extent of the Advance so disbursed, the
Reimbursement Obligation of Borrower to the Agent under this Section 3.6 shall be deemed satisfied
(unless, in each case, taking into account any such deemed Advances, the aggregate outstanding
principal amount of Advances of the Revolving Credit and the Swing Line, plus the Letter of Credit
Obligations (other than the Reimbursement Obligations to be reimbursed by this Advance) on such
date exceed the then applicable Revolving Credit Aggregate Commitment).



     (f) If the Issuing Lender shall honor a draft or other demand for payment presented or made
under any Letter of Credit, the Issuing Lender shall provide notice thereof to Borrower on
the date such draft or demand is honored, and to each Revolving Credit Lender on such date
unless Borrower shall have satisfied its reimbursement obligations by payment to the Agent (for the
benefit of the Issuing Lender) as required under this Section 3.6. The Issuing Lender shall
further use reasonable efforts to provide notice to Borrower prior to honoring any such draft or
other demand for payment, but such notice, or the failure to provide such notice, shall not affect
the rights or obligations of the Issuing Lender with respect to any Letter of Credit or the rights
and obligations of the parties hereto, including without limitation the obligations of Borrower
under this Section 3.6.



     (g) Notwithstanding the foregoing however no Revolving Credit Lender shall be deemed to have
acquired a participation in a Letter of Credit if the officers of the Issuing Lender immediately
responsible for matters concerning this Agreement shall have received written notice from Agent or
any Lender at least two (2) Business Days prior to the date of the issuance or extension of such
Letter of Credit or, with respect to any Letter of Credit subject to automatic extension, at least
five (5) Business Days prior to the date that the beneficiary under such Letter of Credit must be
notified that such Letter of Credit will not be renewed, that the issuance or extension of Letters
of Credit should be suspended based on the occurrence and continuance of a



46









 







Default or Event of
Default and stating that such notice is a “notice of default”; provided, however that the Revolving
Credit Lenders shall be deemed to have acquired such a participation upon the date on which such
Default or Event of Default has been waived by the requisite Lenders, as applicable. In the event
that the Issuing Lender receives such a notice, the Issuing Lender shall have no obligation to
issue any Letter of Credit until such notice is withdrawn by Agent or such Lender or until the
requisite Lenders have waived such Default or Event of Default in accordance with the terms of this
Agreement.



     (h) Nothing in this Agreement shall be construed to require or authorize any Revolving Credit
Lender to issue any Letter of Credit, it being recognized that the Issuing Lender shall be the sole
issuer of Letters of Credit under this Agreement.



     3.7 Obligations Irrevocable. The obligations of Borrower to make payments to Agent for the account of Issuing Lender or
the Revolving Credit Lenders with respect to Letter of Credit Obligations under Section 3.6 hereof,
shall be unconditional and irrevocable and not subject to any qualification or exception
whatsoever, including, without limitation:




	 	(a)	 	Any lack of validity or enforceability of any Letter of Credit,
any Letter of Credit Agreement, any other documentation relating to any Letter
of Credit, this Agreement or any of the other Loan Documents (the “Letter of
Credit Documents”);
	 
	 	(b)	 	Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to or under any Letter of Credit Document;
	 
	 	(c)	 	The existence of any claim, setoff, defense or other right
which Borrower may have at any time against any beneficiary or any transferee
of any
Letter of Credit (or any persons or entities for whom any such beneficiary
or any such transferee may be acting), the Agent, the Issuing Lender or any
Revolving Credit Lender or any other Person, whether in connection with this
Agreement, any of the Letter of Credit Documents, the transactions
contemplated herein or therein or any unrelated transactions;
	 
	 	(d)	 	Any draft or other statement or document presented under any
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;
	 
	 	(e)	 	Payment by the Issuing Lender to the beneficiary under any
Letter of Credit against presentation of documents which do not comply with the
terms of such Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
	 
	 	(f)	 	Any failure, omission, delay or lack on the part of the Agent,
Issuing Lender or any Revolving Credit Lender or any party to any of the Letter
of Credit Documents to enforce, assert or exercise any right, power or remedy
conferred upon the Agent, Issuing Lender, any Revolving Credit Lender or any
such party under this Agreement, any of the other Loan





47









 





	 	 	 	Documents or any of the
Letter of Credit Documents, or any other acts or omissions on the part of the
Agent, Issuing Lender, any Revolving Credit Lender or any such party; or
	 
	 	(g)	 	Any other event or circumstance that would, in the absence of
this Section 3.7, result in the release or discharge by operation of law or
otherwise of Borrower from the performance or observance of any obligation,
covenant or agreement contained in Section 3.6 hereof.




No setoff, counterclaim, reduction or diminution of any obligation or any defense of any kind or
nature which Borrower has or may have against the beneficiary of any Letter of Credit shall be
available hereunder to Borrower against the Agent, Issuing Lender or any Revolving Credit Lender.
With respect to any Letter of Credit, nothing contained in this Section 3.7 shall be deemed to
prevent Borrower, after satisfaction in full of the absolute and unconditional obligations of
Borrower hereunder with respect to such Letter of Credit, from asserting in a separate action any
claim, defense, set off or other right which they (or any of them) may have against Agent, Issuing
Lender or any Revolving Credit Lender in connection with such Letter of Credit.




     3.8 Risk Under Letters of Credit.



     (a) In the administration and handling of Letters of Credit and any security therefor, or any
documents or instruments given in connection therewith, Issuing Lender shall have the sole right to
take or refrain from taking any and all actions under or upon the Letters of Credit.



     (b) Subject to other terms and conditions of this Agreement, Issuing Lender shall issue the
Letters of Credit and shall hold the documents related thereto in its own name and shall make all
collections thereunder and otherwise administer the Letters of Credit in accordance with
Issuing Lender’s regularly established practices and procedures and will have no further
obligation (in the absence of gross negligence or willful misconduct) with respect thereto. In the
administration of Letters of Credit, Issuing Lender shall not be liable for any action taken or
omitted on the advice of counsel, accountants, appraisers or other experts selected by Issuing
Lender with due care and Issuing Lender may rely upon any notice, communication, certificate or
other statement from Borrower, beneficiaries of Letters of Credit, or any other Person which
Issuing Lender believes to be authentic. Issuing Lender will, upon request, furnish the Revolving
Credit Lenders with copies of Letter of Credit Documents related thereto.



     (c) In connection with the issuance and administration of Letters of Credit and the
assignments hereunder, Issuing Lender makes no representation and shall have no responsibility with
respect to (i) the obligations of Borrower or the validity, sufficiency or enforceability of any
document or instrument given in connection therewith, or the taking of any action with respect to
same, (ii) the financial condition of, any representations made by, or any act or omission of
Borrower or any other Person, or (iii) any failure or delay in exercising any rights or powers
possessed by Issuing Lender in its capacity as issuer of Letters of Credit in the absence of its
gross negligence or willful misconduct. Each of the Revolving Credit Lenders expressly acknowledges
that it has made and will continue to make its own evaluations of Borrower’s creditworthiness
without reliance on any representation of Issuing Lender or Issuing Lender’s officers, agents and
employees.



48









 





     (d) If at any time Issuing Lender shall recover any part of any unreimbursed amount for any
draw or other demand for payment under a Letter of Credit, or any interest thereon, Agent or
Issuing Lender, as the case may be, shall receive same for the pro rata benefit of
the Revolving Credit Lenders in accordance with their respective Percentages and shall promptly
deliver to each Revolving Credit Lender its share thereof, less such Revolving Credit Lender’s pro
rata share of the costs of such recovery, including court costs and attorney’s fees. If at any time
any Revolving Credit Lender shall receive from any source whatsoever any payment on any such
unreimbursed amount or interest thereon in excess of such Revolving Credit Lender’s Percentage of
such payment, such Revolving Credit Lender will promptly pay over such excess to Agent, for
redistribution in accordance with this Agreement.



     3.9 Indemnification. Borrower hereby indemnifies and agrees to hold harmless the Revolving Credit Lenders, the
Issuing Lender and the Agent and their respective Affiliates, and the respective officers,
directors, employees and agents of such Persons (each an “L/C Indemnified Person”), from and
against any and all claims, damages, losses, liabilities, costs or expenses of any kind or nature
whatsoever which the Revolving Credit Lenders, the Issuing Lender or the Agent or any such Person
may incur or which may be claimed against any of them by reason of or in connection with any Letter
of Credit (collectively, the “L/C Indemnified Amounts”), and none of the Issuing Lender, any
Revolving Credit Lender or the Agent or any of their respective officers, directors, employees or
agents shall be liable or responsible for:




	 	(a)	 	the use which may be made of any Letter of Credit or for any
acts or omissions of any beneficiary in connection therewith;
	 
	 	(b)	 	the validity, sufficiency or genuineness of documents or of any
endorsement thereon, even if such documents should in fact prove to be in any
or all respects invalid, insufficient, fraudulent or forged;
	 
	 	(c)	 	payment by the Issuing Lender to the beneficiary under any
Letter of Credit against presentation of documents which do not strictly comply
with the terms of any Letter of Credit (unless such payment resulted from the
gross negligence or willful misconduct of the Issuing Lender), including
failure of any documents to bear any reference or adequate reference to such
Letter of Credit;
	 
	 	(d)	 	any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit; or
	 
	 	(e)	 	any other event or circumstance whatsoever arising in
connection with any Letter of Credit.




It is understood that in making any payment under a Letter of Credit the Issuing Lender will rely
on documents presented to it under such Letter of Credit as to any and all matters set forth
therein without further investigation and regardless of any notice or information to the contrary.





49












 




With respect to subparagraphs (a) through (e) hereof, (i) no Borrower shall be required to
indemnify any L/C Indemnified Person for any L/C Indemnified Amounts to the extent such amounts
result from the gross negligence or willful misconduct of such L/C Indemnified Person or any
officer, director, employee or agent of such L/C Indemnified Person and (ii) the Agent and the
Issuing Lender shall be liable to each Borrower to the extent, but only to the extent, of any
direct, as opposed to consequential or incidental, damages suffered by Borrower which were caused
by the gross negligence or willful misconduct of the Issuing Lender or any officer, director,
employee or agent of the Issuing Lender or by the Issuing Lender’s wrongful dishonor of any Letter
of Credit after the presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions of such Letter of
Credit.




     3.10 Right of Reimbursement. Each Revolving Credit Lender agrees to reimburse the
Issuing Lender on demand, pro rata in accordance with its respective Revolving Credit Percentage,
for (i) the reasonable out-of-pocket costs and expenses of the Issuing Lender to be reimbursed by
Borrower pursuant to any Letter of Credit Agreement or any Letter of Credit, to the extent not
reimbursed by Borrower or any other Credit Party and (ii) any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, fees, reasonable out-of-pocket
expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against Issuing Lender in any way relating to or arising out of this Agreement (including
Section 3.6(c) hereof), any Letter of Credit, any documentation or any transaction relating
thereto, or any Letter of Credit Agreement, to the extent not reimbursed by Borrower, except to the
extent that such liabilities, losses, costs or expenses were incurred by Issuing Lender as a result
of Issuing Lender’s gross negligence or willful misconduct or by the Issuing Lender’s wrongful
dishonor of any Letter of Credit after the presentation to it by the beneficiary thereunder of a
draft or other demand for payment and other documentation strictly complying with the terms and
conditions of such Letter of Credit.



4. TERM LOAN.




     4.1 Term Loan. (a) Subject to the terms and conditions hereof, each Term Loan Lender,
severally and for itself alone, agrees to lend to Borrower, in a single disbursement in Dollars on
the Effective Date an amount equal to such Lender’s Percentage of Term Loan.



     4.2 Accrual of Interest and Maturity; Evidence of Indebtedness.



     (a) Borrower hereby unconditionally promises to pay to the Agent for the account of each Term
Loan Lender such Lender’s Percentage of the then unpaid aggregate principal amount of Term Loan
outstanding on the Term Loan Maturity Date and on such other dates and in such other amounts as may
be required from time to time pursuant to this Agreement. Subject to the terms and conditions
hereof, the unpaid principal Indebtedness outstanding under Term Loan shall, from the Effective
Date (until paid), bear interest at the Applicable Interest Rate. There shall be no readvance or
reborrowings of any principal reductions of the Term Loan.



     (b) Each Term Loan Lender shall maintain in accordance with its usual practice an account or
accounts evidencing indebtedness of Borrower to the appropriate lending office of such Term Loan
Lender resulting from each Advance of the Term Loan made by such lending



50









 







office of such Lender from time to time, including the amounts of principal and interest
payable thereon and paid to such Term Loan Lender from time to time under this Agreement.



     (c) The Agent shall maintain the Register pursuant to Section 13.8(g), and a subaccount
therein for each Term Loan Lender, in which Register and subaccounts (taken together) shall be
recorded (i) the amount of each Advance of the Term Loan made hereunder, the type thereof and each
Eurodollar-Interest Period applicable to any Eurodollar-based Advance, (ii) the amount of any
principal or interest due and payable or to become due and payable from Borrower to each Term Loan
Lender hereunder in respect of the Advances of the Term Loan and (iii) both the amount of any sum
received by the Agent hereunder from Borrower in respect of the Advances of the Term Loan and each
Term Loan Lender’s share thereof.



     (d) The entries made in the Register pursuant to paragraph (c) of this Section 4.2 shall,
absent manifest error, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of Borrower therein recorded; provided,
however, that the failure of any Term Loan Lender or the Agent to maintain the Register or
any such account, as applicable, or any error therein, shall not in any manner affect the
obligation of Borrower to repay the Advances of each of the Term Loan (and all other amounts owing
with respect thereto) made to Borrower by the Term Loan Lenders in accordance with the terms of
this Agreement.



     (e) Borrower agrees that, upon written request to the Agent by any Term Loan Lender, Borrower
will execute and deliver to such Term Loan Lender, at Borrower’s expense, a Term Loan Note
evidencing the outstanding Advances under the Term Loan, owing to such Term Loan Lender.



     4.3 Repayment of Principal. (a) Borrower shall repay the Term Loan as set forth
below, each such quarterly principal installment to be paid on the first day of each calendar
quarter, commencing on January 1, 2009, until the Term Loan Maturity Date, when all remaining
outstanding principal plus accrued interest thereon shall be due and payable in full:



	 	 	 	 	 
	Installment No.	 	Payment
	1-8
	 	$	750,000	 
	9-12
	 	$	1,500,000	 
	13-16
	 	$	1,875,000	 
	17-19
	 	$	2,625,000	 
	Term Loan Maturity Date
	 	Any amounts of principal or interest then outstanding on the Term Loan






     (b) Whenever any payment under this Section 4.3 shall become due on a day that is not a
Business Day, the date for payment thereunder shall be extended to the next Business Day.



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     4.4 Term Loan Rate Requests; Refundings and Conversions of Advances of Term Loan.
Borrower may refund all or any portion of any Advance of the Term Loan as a Term Loan Advance with
a like Eurodollar-Interest Period or convert each such Advance of Term Loan to an Advance with a
different Eurodollar-Interest Period, but only after delivery to Agent of a Term Loan Rate Request
executed in connection with such Term Loan by an Authorized Signer and subject to the terms hereof
and to the following:



     (a) each Term Loan Rate Request shall set forth the information required on the Term Loan Rate
Request form with respect to such Term Loan, including without limitation:




	 	(i)	 	whether the Term Loan Advance is a refunding or
conversion of an outstanding Term Loan Advance;
	 
	 	(ii)	 	in the case of a refunding or conversion of an
outstanding Term Loan Advance, the proposed date of such refunding or
conversion, which must be a Business Day; and
	 
	 	(iii)	 	whether such Term Loan Advance (or any portion
thereof) is to be a Prime-based Advance or a Eurodollar-based Advance,
and, in the case of a Eurodollar-based Advance, the Eurodollar-Interest
Period(s) applicable thereto.





     (b) each such Term Loan Rate Request shall be delivered to Agent (i) by 1:00 p.m. (Pacific
time) three (3) Business Days prior to the proposed date of the refunding or conversion of a
Eurodollar-based Advance or (ii) by 1:00 p.m. (Pacific time) on the proposed date of the refunding
or conversion of a Prime-based Advance;



     (c) the principal amount of such Advance of the Term Loan plus the amount of any other Advance
of the Term Loan to be then combined therewith having the same Applicable Interest Rate and
Eurodollar-Interest Period, if any, shall be (i) in the case of a Prime-based Advance, at least Two
Million Dollars ($2,000,000), or the remaining principal balance outstanding under the applicable
Term Loan, whichever is less, and (ii) in the case of a Eurodollar-based Advance, at least Two
Million Dollars ($2,000,000) or the remaining principal balance outstanding under the applicable
Term Loan, whichever is less, or in each case a larger integral multiple of One Hundred Thousand
Dollars ($100,000);



     (d) no Term Loan Advance shall have a Eurodollar-Interest Period ending after the Term Loan
Maturity Date and, notwithstanding any provision hereof to the contrary, Borrower shall select
Eurodollar-Interest Periods (or the Prime-based Rate) for sufficient portions of the Term Loan such
that Borrower may make the required principal payments hereunder on a timely basis and otherwise in
accordance with Section 4.5 below;



     (e) at no time shall there be no more than three (3) Eurodollar-Interest Periods in effect for
Advances of the Term Loan; and



     (f) a Term Loan Rate Request, once delivered to Agent, shall not be revocable by Borrower.



52









 





     4.5 Prime-based Advance in Absence of Election or Upon Default. In the event Borrower
shall fail with respect to any Eurodollar-based Advance of the Term Loan to timely exercise their
option to refund or convert such Advance in accordance with Section 4.4 hereof (and such Advance
has not been paid in full on the last day of the Eurodollar-Interest Period applicable thereto
according to the terms hereof), or, if on the last day of the applicable Eurodollar-Interest
Period, a Default or Event of Default shall exist, then, on the last day of the applicable
Eurodollar-Interest Period, the principal amount of such Advance which has not been prepaid shall
be automatically converted to a Prime-based Advance and the Agent shall thereafter promptly notify
Borrower thereof. All accrued and unpaid interest on any Advance converted to a Prime-based
Advance under this Section 4.5 shall be due and payable in full on the date such Advance is
converted.



     4.6 Interest Payments; Default Interest.



     (a) Interest on the unpaid principal of all Prime-based Advances of the Term Loan from time to
time outstanding shall accrue until paid at a per annum interest rate equal to the Prime-based
Rate, and shall be payable in immediately available funds quarterly in arrears commencing on
January 1, 2009, and on the first day of each calendar quarter thereafter. Whenever any payment
under this Section 4.6 shall become due on a day that is not a Business Day, the date for payment
shall be extended to the next Business Day. Interest accruing at the Prime-based Rate shall be
computed on the basis of a 360 day year and assessed for the actual number of days elapsed, and in
such computation effect shall be given to any change in the interest rate resulting from a change
in the Prime-based Rate on the date of such change in the Prime-based Rate.



     (b) Interest on the unpaid principal of each Eurodollar-based Advance of the Term Loan having
a related Eurodollar-Interest Period of three (3) months or less shall accrue at its applicable
Eurodollar-based Rate and shall be payable in immediately available funds on the last day of the
Eurodollar-Interest Period applicable thereto. Interest accruing at the Eurodollar-based Rate shall
be computed on the basis of a 360-day year and assessed for the actual number of days elapsed from
the first day of the Eurodollar-Interest Period applicable thereto to, but not including, the last
day thereof.



     (c) Notwithstanding anything to the contrary in Section 4.6(a) or (b) hereof, all accrued and
unpaid interest on any Term Loan Advance refunded or converted pursuant to Section 4.4 hereof shall
be due and payable in full on the date such Term Loan Advance is refunded or converted.



     (d) In the case of any Event of Default under Section 9.1(i), immediately upon the occurrence
thereof, and in the case of any other Event of Default, upon notice from the Majority Term Loan
Lenders, interest shall be payable on demand on the principal amount of all Advances of the Term
Loan from time to time outstanding, as applicable, at a per annum rate equal to the Applicable
Interest Rate in respect of each such Advance, plus, in the case of Eurodollar-based Advances, two
percent (2%) for the remainder of the then existing Eurodollar-Interest Period, if any, and at all
other such times and for all Prime-based Advances, at a per annum rate equal to the Prime-based
Rate plus two percent (2%).



53









 





     4.7 Optional Prepayment of Term Loan.



     (a) Subject to clause (b) hereof, Borrower (at its option), may prepay all or any portion of
the outstanding principal of any Term Loan Advance bearing interest at the Prime-based Rate at any
time, and may prepay all or any portion of the outstanding principal of any Term Loan bearing
interest at the Eurodollar-based Rate upon one (1) Business Day’s notice to the Agent by facsimile
or by telephone (confirmed by facsimile), with accrued interest on the principal being prepaid to
the date of such prepayment. Any prepayment of a portion of the Term Loan as to which the
Applicable Interest Rate is the Prime-based Rate shall be without premium or penalty and any
prepayment of a portion of the Term Loan as to which the Applicable Interest Rate is the
Eurodollar-based Rate shall be subject to the provisions of Section 11.1, but otherwise without
premium or penalty.



     (b) Each partial prepayment of the Term Loan shall be applied to all installments of such Term
Loan due thereunder on a pro rata basis as follows: first to that portion of such Term Loan
outstanding as a Prime-based Advance, second to that portion of such Term Loan outstanding as
Eurodollar-based Advances which have Eurodollar-Interest Periods ending on the date of payment, and
last to any remaining Advances of such Term Loan being carried at the Eurodollar-based Rate.



     (c) All prepayments of the Term Loan shall be made to the Agent for distribution ratably to
the applicable Term Loan Lenders in accordance with their respective Term Loan Percentages.



     4.8 Mandatory Prepayment of Term Loan.



     (a) Subject to clauses (e) and (f) hereof, immediately upon receipt by any Credit Party of any
Net Cash Proceeds from any Asset Sales exceeding Five Million Dollars ($5,000,000) per Fiscal Year
(or in the case of any Fiscal Year ending after June 30, 2010, $2,500,000) which are not Reinvested
as described in the following sentence, Borrower shall prepay the Term Loan by an amount equal to
one hundred percent (100%) of such Net Cash Proceeds provided, however that Borrower shall not be
obligated to prepay the Term Loan with such Net Cash Proceeds if the following conditions are
satisfied: (i) promptly following the sale, Borrower provides to Agent a certificate executed by a
Responsible Officer of the Borrower (“Reinvestment Certificate”) stating (x) that the sale has
occurred, (y) that no Default or Event of Default has occurred and is continuing either as of the
date of the sale or as of the date of the Reinvestment Certificate, and (z) a description of the
planned Reinvestment of the proceeds thereof, (ii) the Reinvestment of such Net Cash Proceeds is
commenced within the Initial Reinvestment Period and completed within the Reinvestment Period, and
(iii) no Default or Event of Default has occurred and is continuing at the time of the sale and at
the time of the application of such proceeds to Reinvestment. If any such proceeds have not been
Reinvested at the end of the Reinvestment Period, Borrower shall promptly pay such proceeds to
Agent, to be applied to repay the Term Loan in accordance with clauses (d) and (e) hereof.



     (b) Subject to clauses (e) and (f) hereof, immediately upon receipt by any Credit Party of Net
Cash Proceeds from the issuance of any Equity Interests of such Person (other than Excluded Equity
Issurances) or Net Cash Proceeds from the issuance of any Subordinated Debt



54









 







after the Effective Date, Borrower shall prepay the Term Loan by an amount equal to twenty
five percent (25%) of such Net Cash Proceeds in the case of the issuance of any Equity Interests
and one hundred percent (100%) of such Net Cash Proceeds in the case of issuance of Subordinated
Debt (other than Debt permitted under the provisions of Section 8.1).



     (c) Subject to clauses (d) and (e) hereof, immediately upon receipt by any Credit Party of any
Insurance Proceeds or Condemnation Proceeds, Borrower shall be obligated to prepay the Term Loan by
an amount equal to one hundred percent (100%) of such Insurance Proceeds or Condemnation Proceeds,
as the case may be; provided, however, that any Insurance Proceeds or Condemnation Proceeds, as the
case may be, may be Reinvested by the applicable Credit Party if the following conditions are
satisfied: (i) promptly following the receipt of such Insurance Proceeds or Condemnation Proceeds,
as the case may be, Borrower provide to Agent a Reinvestment Certificate stating (x) that no
Default or Event of Default has occurred and is continuing either as of the date of the receipt of
such proceeds or as of the date of the Reinvestment Certificate, (y) that such Insurance Proceeds
or Condemnation Proceeds have been received, and (z) a description of the planned Reinvestment of
such Insurance Proceeds or Condemnation Proceeds, as the case may be), (ii) the Reinvestment of
such proceeds is commenced within the Initial Reinvestment Period and completed within the
Reinvestment Period, and (iii) no Default or Event of Default shall have occurred and be continuing
at the time of the receipt of such proceeds and at the time of the application of such proceeds to
Reinvestment. If any such proceeds have not been Reinvested at the end of the Reinvestment Period,
Borrower shall promptly pay such proceeds to Agent, to be applied to repay the Term Loan in
accordance with clauses (e) and (f) hereof.



     (d) Subject to clause (e) hereof, each mandatory prepayment under this Section 4.8 or any
other mandatory or optional prepayment under this Agreement shall be in addition to any scheduled
installments or optional prepayments made prior thereto and shall be subject to Section 11.1. Each
mandatory prepayment of the Term Loan shall be applied to installments of principal on the Term
Loan in the inverse order of their maturities.



     (e) To the extent that, on the date any mandatory prepayment of any Term Loan under this
Section 4.8 is due, the Indebtedness under the Term Loan or any other Indebtedness to be prepaid is
being carried, in whole or in part, at the Eurodollar-based Rate and no Default or Event of Default
has occurred and is continuing, Borrower may deposit the amount of such mandatory prepayment in a
cash collateral account to be held by the Agent, for and on behalf of the Lenders (which shall be
an interest-bearing account), on such terms and conditions as are reasonably acceptable to Agent
and upon such deposit, the obligation of each Borrower to make such mandatory prepayment shall be
deemed satisfied. Subject to the terms and conditions of said cash collateral account, sums on
deposit in said cash collateral account shall be applied (until exhausted) to reduce the principal
balance of the Term Loan on the last day of each Eurodollar-Interest Period attributable to the
Eurodollar-based Advances of the Term Loan, thereby avoiding breakage costs under Section 11.1.



     4.9 Use of Proceeds. Proceeds of the Term Loan shall be used by Borrower to refinance
existing Debt and for general corporate purposes.




55









 













	5.	 	CONDITIONS.





     The obligations of the Lenders to make Advances or loans pursuant to this Agreement and the
obligation of the Issuing Lender to issue Letters of Credit are subject to the following
conditions:



     5.1 Conditions of Initial Advances. The obligations of the Lenders to make initial
Advances or loans pursuant to this Agreement and the obligation of the Issuing Lender to issue
initial Letters of Credit, in each case, on the Effective Date only, are subject to the following
conditions:



     (a) Notes, this Agreement and the other Loan Documents. Borrower shall have executed
and delivered to Agent for the account of each Lender requesting Notes, the Swing Line Note, the
Revolving Credit Notes and/or the Term Notes, as applicable; Borrower shall have executed and
delivered this Agreement; and each Credit Party shall have executed and delivered the other Loan
Documents to which such Credit Party is required to be a party (including all schedules to the
Disclosure Letter and other documents to be delivered pursuant hereto); and such Notes (if any),
this Agreement and the other Loan Documents shall be in full force and effect.



     (b) Corporate Authority. Agent shall have received, with a counterpart thereof for
each Lender, from each Obligor, a certificate of its Secretary or Assistant Secretary dated as of
the Effective Date as to:




	 	(i)	 	corporate resolutions (or the equivalent) of
each Obligor authorizing the transactions contemplated by this
Agreement and the other Loan Documents approval of this Agreement and
the other Loan Documents, in each case to which such Obligor is party,
and authorizing the execution and delivery of this Agreement and the
other Loan Documents, and in the case of Borrower, authorizing the
execution and delivery of requests for Advances and the issuance of
Letters of Credit hereunder,
	 
	 	(ii)	 	the incumbency and signature of the officers or
other authorized persons of such Obligor executing any Loan Document
and in the case of the Borrower, the officers who are authorized to
execute any Requests for Advance, or requests for the issuance of
Letters of Credit,
	 
	 	(iii)	 	a certificate of good standing or continued
existence (or the equivalent thereof) from the state of its
incorporation or formation, and from every state or other jurisdiction
where such Obligor is qualified to do business, which jurisdictions are
listed on Schedule 5.2 to the Disclosure Letter, and
	 
	 	(iv)	 	copies of such Obligor’s articles of
incorporation and bylaws or other constitutional documents, as in
effect on the Closing Date.





     (c) Collateral Documents, Guaranties and other Loan Documents. The Agent shall have
received the following documents, each in form and substance satisfactory to Agent and



56









 







fully executed by each party thereto:




	 	(i)	 	The following Collateral Documents, each in
form and substance acceptable to Agent and fully executed by each party
thereto and dated as of the Effective Date:






	 	(A)	 	the Security Agreement, executed
and delivered by the Obligors;
	 
	 	(B)	 	the Guaranty, executed and
delivered by the Guarantors; and
	 
	 	(C)	 	Mortgages for each of the owned
properties listed on Schedule 6.3(b) to the Disclosure Letter.






	 	(ii)	 	For Borrower’s principal place of business, a
Collateral Access Agreement.
	 
	 	(iii)	 	(A) Certified copies of uniform commercial
code requests for information, or a similar search report certified by
a party acceptable to the Agent, dated a date reasonably prior to the
Closing Date, listing all effective financing statements in the
jurisdiction noted on Schedule 5.1(c) to the Disclosure Letter which
name any Obligor (under their present names or under any previous names
used within five (5) years prior to the date hereof) as debtors,
together with (x) copies of such financing statements, and (y)
authorized Uniform Commercial Code (Form UCC-3) Termination Statements,
if any, necessary to release all Liens and other rights of any Person
in any Collateral described in the Collateral Documents previously
granted by any Person (other than Liens permitted by Section 8.2 of
this Agreement) and (B) intellectual property search reports results
from the United States Patent and Trademark Office and the United
States Copyright Office for the Obligors dated a date reasonably prior
to the Closing Date.
	 
	 	(iv)	 	Any documents (including, without limitation,
financing statements, amendments to financing statements and
assignments of financing statements, stock powers executed in blank and
any endorsements) requested by Agent and reasonably required to be
provided in connection with the Collateral Documents to create, in
favor of the Agent (for and on behalf of the Lenders), a first priority
perfected security interest in the Collateral thereunder shall have
been filed, registered or recorded, or shall have been delivered to
Agent in proper form for filing, registration or recordation.





     (c) Insurance. The Agent shall have received evidence reasonably satisfactory to it



57









 







that the Credit Parties have obtained the insurance policies required by Section 7.5 hereof
and that such insurance policies are in full force and effect.



     (d) Compliance with Certain Documents and Agreements. Each Credit Party shall have
each performed and complied in all material respects with all agreements and conditions contained
in this Agreement and the other Loan Documents, to the extent required to be performed or complied
with by such Credit Party. No Person (other than Agent, Lenders and Issuing Lender) party to this
Agreement or any other Loan Document shall be in material default in the performance or compliance
with any of the terms or provisions of this Agreement or the other Loan Documents or shall be in
material default in the performance or compliance with any of the material terms or material
provisions of this Agreement or any other Loan Document, in each case to which such Person is a
party.



     (e) Opinions of Counsel. The Credit Parties shall furnish Agent prior to the initial
Advance under this Agreement, with signed copies for each Lender, an opinion of in-house counsel to
the Credit Parties, dated the Closing Date and covering such matters as reasonably required by and
otherwise reasonably satisfactory in form and substance to the Agent and each of the Lenders.



     (f) Payment of Fees. Borrower shall have paid to Comerica Bank any fees due under the
terms of the Fee Letter, along with any other fees, costs or expenses due and outstanding to the
Agent or the Lenders as of the Effective Date (including reasonable fees, disbursements and other
charges of counsel to Agent).



     (g) Governmental and Other Approvals. Agent shall have received copies of all
authorizations, consents, approvals, licenses, qualifications or formal exemptions, filings,
declarations and registrations with, any court, governmental agency or regulatory authority or any
securities exchange or any other person or party (whether or not governmental) received by any
Credit Party in connection with the transactions contemplated by the Loan Documents to occur on the
Closing Date.



     (h) Closing Certificate. The Agent shall have received, with a signed counterpart for
each Lender, a certificate of a Responsible Officer of Borrower dated the Closing Date (or, if
different, the date of the initial Advance hereunder), stating that to the best of his or her
respective knowledge after due inquiry, (a) the conditions set forth in this Section 5 have been
satisfied to the extent required to be satisfied by any Credit Party; (b) the representations and
warranties made by the Credit Parties in this Agreement or any of the other Loan Documents, as
applicable, are true and correct in all material respects; (c) no Default or Event of Default shall
have occurred and be continuing; and (d) since June 30, 2008, nothing shall have occurred which has
had, or could reasonably be expected to have, a material adverse change on the business or
property, results of operations, conditions or financial condition of Borrower and the Credit
Parties (taken as a whole).



     5.2 Continuing Conditions. The obligations of each Lender to make Advances (including
the initial Advance) under this Agreement and the obligation of the Issuing Lender to issue any
Letters of Credit shall be subject to the continuing conditions that:



58









 





     (a) No Default or Event of Default shall exist as of the date of the Advance or the request
for the Letter of Credit, as the case may be; and



     (b) Each of the representations and warranties contained in this Agreement and in each of the
other Loan Documents shall be true and correct in all material respects as of the date of the
Advance or Letter of Credit (as the case may be) as if made on and as of such date (other than any
representation or warranty that expressly speaks only as of a different date).



6. REPRESENTATIONS AND WARRANTIES.




     Borrower represents and warrants to the Agent, the Lenders, the Swing Line Lender and the
Issuing Lender as follows:



     6.1 Corporate Authority. Each Credit Party is a corporation (or other business
entity) duly organized and existing in good standing under the laws of the state or jurisdiction of
its incorporation or formation, as applicable, and each Credit Party is duly qualified and
authorized to do business as a foreign corporation in each jurisdiction where the character of its
assets or the nature of its activities makes such qualification and authorization necessary except
where failure to be so qualified or be in good standing could not reasonably be expected to have a
Material Adverse Effect. Each Credit Party has all requisite corporate, limited liability or
partnership power and authority to own all its property (whether real, personal, tangible or
intangible or of any kind whatsoever) and to carry on its business.



     6.2 Due Authorization. Execution, delivery and performance of this Agreement, and the
other Loan Documents, to which each Credit Party is party, and the issuance of the Notes by
Borrower (if requested) are within such Person’s corporate, limited liability or partnership power,
have been duly authorized, are not in contravention of any law applicable to such Credit Party or
the terms of such Credit Party’s organizational documents and, except as have been previously
obtained or as referred to in Section 6.10, below, do not require the consent or approval of any
governmental body, agency or authority or any other third party except to the extent that such
consent or approval is not material to the transactions contemplated by the Loan Documents.



     6.3 Good Title; Leases; Assets; No Liens. (a) Each Credit Party, to the extent
applicable, has good and valid title (or, in the case of real property, good and marketable title)
to all assets owned by it that are material to the conduct of its business, subject only to the
Liens permitted under section 8.2 hereof, and each Credit Party has a valid leasehold or interest
as a lessee or a licensee in all of its leased real property;



     (b) Schedule 6.3(b) to the Disclosure Letter identifies all of the real property owned or
leased, as lessee thereunder, by the Obligors on the Closing Date, including all warehouse or
bailee locations;



     (c) The Credit Parties will collectively own or collectively have a valid leasehold interest
in all assets that were owned or leased (as lessee) by the Credit Parties immediately prior to the
Closing Date to the extent that such assets are necessary for the continued operation of the Credit
Parties’ businesses in substantially the manner as such businesses were operated immediately prior
to the Closing Date;



59









 





     (d) Each Credit Party owns or has a valid leasehold interest in all real property necessary
for its continued operations and, to the best knowledge of Borrower, no material condemnation,
eminent domain or expropriation action has been commenced or threatened against any such owned or
leased real property; and



     (e) There are no Liens on and no financing statements on file with respect to any of the
assets owned by the Credit Parties, except for the Liens permitted pursuant to Section 8.2 of this
Agreement.



     6.4 Taxes. Except as set forth on Schedule 6.4 to the Disclosure Letter, each Credit
Party has filed on or before their respective due dates or within the applicable grace periods, all
United States federal, state, local and other tax returns which are required to be filed or has
obtained extensions for filing such tax returns and is not delinquent in filing such returns in
accordance with such extensions and has paid all material taxes which have become due pursuant to
those returns or pursuant to any assessments received by any such Credit Party, as the case may be,
to the extent such taxes have become due, except to the extent such taxes are being contested in
good faith by appropriate proceedings diligently conducted and with respect to which adequate
provision has been made on the books of such Credit Party as may be required by GAAP.



     6.5 No Defaults. No Credit Party is in default under or with respect to any material
agreement, instrument or undertaking to which is a party or by which it or any of its property is
bound which would cause or would reasonably be expected to cause a Material Adverse Effect.



     6.6 Enforceability of Agreement and Loan Documents. This Agreement and each of the
other Loan Documents to which any Credit Party is a party (including without limitation, each
Request for Advance), have each been duly executed and delivered by its duly authorized officers
and constitute the valid and binding obligations of such Credit Party, enforceable against such
Credit Party in accordance with their respective terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditor’s rights, generally and by general principles of
equity (regardless of whether enforcement is considered in a proceeding in law or equity).



     6.7 Compliance with Laws. (a) Except as disclosed on Schedule 6.7 to the Disclosure
Letter and to the knowledge of each Credit Parties, each Credit Party has complied with all
applicable federal, state and local laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) including but not limited to Hazardous
Material Laws, and is in compliance with any Requirement of Law, in each case, except to the extent
that failure to comply therewith could not reasonably be expected to have a Material Adverse
Effect; and (b) neither the extension of credit made pursuant to this Agreement or the use of the
proceeds thereof by the Credit Parties will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto,
or The United and Strengthening America by providing appropriate Tools Required to Intercept and
Obstruct Terrorism (“USA Patriot Act”) Act of 2001, Public Law 10756, October 26, 2001 or
Executive Order 13224 of September 23, 2001



60









 







issued by the President of the United States (66 Fed. Reg. 49049 (2001)).



     6.8 Non-contravention. The execution, delivery and performance of this Agreement and
the other Loan Documents (including each Request for Advance) to which each Credit Party is a party
are not in contravention of the terms of any indenture, agreement or undertaking to which such
Credit Party is a party or by which it or its properties are bound where such violation could
reasonably be expected to have a Material Adverse Effect.



     6.9 Litigation. Except as set forth on Schedule 6.9 to the Disclosure Letter, there
is no suit, action, proceeding, including, without limitation, any bankruptcy proceeding or
governmental investigation pending against or to the knowledge of Borrower, threatened against any
Credit Party (other than any suit, action or proceeding in which a Credit Party is the plaintiff
and in which no counterclaim or cross-claim against such Credit Party has been filed), or any
judgment, decree, injunction, rule, or order of any court, government, department, commission,
agency, instrumentality or arbitrator outstanding against any Credit Party, nor is any Credit Party
in violation of any applicable law, regulation, ordinance, order, injunction, decree or requirement
of any governmental body or court which could in any of the foregoing events reasonably be expected
to have a Material Adverse Effect.



     6.10 Consents, Approvals and Filings, Etc. Except as set forth on Schedule 6.10 to
the Disclosure Letter, no material authorization, consent, approval, license, qualification or
formal exemption from, nor any filing, declaration or registration with, any court, governmental
agency or regulatory authority or any securities exchange or any other Person (whether or not
governmental) (each, a “Filing”) is required in connection with the execution, delivery and
performance: (a) by any Credit Party of this Agreement and any of the other Loan Documents to which
such Credit Party is a party or (b) by the Credit Parties of the grant of Liens granted, conveyed
or otherwise established (or to be granted, conveyed or otherwise established) by or under this
Agreement or the other Loan Documents, as applicable, except in each case for (i) Filings which
have been previously obtained, (ii) Filings to be made concurrently herewith or promptly following
the Closing Date as are required by the Collateral Documents to perfect Liens in favor of the
Agent, (iii) Filings required to be obtain and maintain existence, good standing and similar
matters, (iv) routine Filings necessary in the ordinary course of business, (v) Filings required in
connection with the performance of the Loan Documents, and (vi) Filings required in connection with
the exercise of remedies under the Loan Documents. All such material authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and registrations which have
previously been obtained or made, as the case may be, are in full force and effect and, to the best
knowledge of Borrower, are not the subject of any attack or threatened attack (in each case in any
material respect) by appeal or direct proceeding or otherwise.



     6.11 Agreements Affecting Financial Condition. No Credit Party is party to any
agreement or instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect.



     6.12 No Investment Company or Margin Stock. No Credit Party is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. No Credit Party is
engaged principally, or as one of its important activities, directly or indirectly, in the



61









 







business of extending credit for the purpose of purchasing or carrying margin stock. None of
the proceeds of any of the Advances will be used by any Credit Party to purchase or carry margin
stock. Terms for which meanings are provided in Regulation U of the Board of Governors of the
Federal Reserve System or any regulations substituted therefore, as from time to time in effect,
are used in this paragraph with such meanings.



     6.13 ERISA. No Credit Party maintains or contributes to any Pension Plan subject to
Title IV of ERISA, except as set forth on Schedule 6.13 to the Disclosure Letter or otherwise
disclosed to the Agent in writing. There is no accumulated funding deficiency within the meaning
of Section 412 of the Internal Revenue Code or Section 302 of ERISA, or any outstanding liability
with respect to any Pension Plans owed to the PBGC other than future premiums due and owing
pursuant to Section 4007 of ERISA, and no “reportable event” as defined in Section 4043(c) of ERISA
has occurred with respect to any Pension Plan other than an event for which the notice requirement
has been waived by the PBGC. None of the Credit Parties has engaged in a prohibited transaction
with respect to any Pension Plan, other than a prohibited transaction for which an exemption is
available and has been obtained, which could subject such Credit Parties to a material tax or
penalty imposed by Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA. Each
Pension Plan is being maintained and funded in accordance with its terms and is in material
compliance with the requirements of the Internal Revenue Code and ERISA. No Credit Party has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to have resulted in any Withdrawal Liability and, except as notified to Agent in writing
following the Closing Date, no such Multiemployer Plan is in reorganization (within the meaning of
Section 4241 of ERISA) or insolvent (within the meaning of Section 4245 of ERISA).



     6.14 Conditions Affecting Business or Properties. Neither the respective businesses
nor the properties of any Credit Party are affected by any fire, explosion, accident, strike,
lockout or other dispute, drought, storm, hail, earthquake, embargo, Act of God, or other casualty
(except to the extent such event is covered by insurance sufficient to ensure that upon application
of the proceeds thereof, no Material Adverse Effect could reasonably be expected to occur) which
could reasonably be expected to have a Material Adverse Effect.



     6.15 Environmental and Safety Matters. Except as set forth in Schedules 6.9, 6.10 and
6.15 to the Disclosure Letter or as would not reasonably be expected to have a Material Adverse
Effect:




	 	(a)	 	all facilities and property owned or leased by the Credit
Parties are in compliance with all applicable Hazardous Material Laws;
	 
	 	(b)	 	to the best knowledge of Borrower, there have been no
unresolved and outstanding past, and there are no pending or threatened in
writing:






	 	(i)	 	claims, complaints, notices or requests for
information received by any Credit Party with respect to any alleged
violation of any applicable Hazardous Material Law, or
	 
	 	(ii)	 	written complaints, notices or inquiries to any
Credit Party




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	 	 	 	regarding potential liability of any Credit Parties under any
applicable Hazardous Material Law; and






	 	(c)	 	to the best knowledge of Borrower, no conditions exist at, on
or under any property now or previously owned or leased by any Credit Party
which, with the passage of time, or the giving of notice or both, are
reasonably likely to give rise to liability under any applicable Hazardous
Material Law or create a significant adverse effect on the value of the
property.





     6.16 Subsidiaries. Except as disclosed on Schedule 6.16 to the Disclosure Letter as
of the Closing Date, and thereafter, except as disclosed to the Agent in writing from time to time,
no Credit Party has any Subsidiaries.



     6.17 Management Agreements. Schedule 6.17 to the Disclosure Letter is an accurate and
complete list of all management and significant employment agreements (excluding offer letters) in
effect on or as of the Closing Date to which any Credit Party is a party or is bound.



     6.18 [Intentionally Deleted].



     6.19 Franchises, Patents, Copyrights, Tradenames, etc. The Credit Parties possess all
franchises, patents, copyrights, trademarks, trade names, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of their business substantially as now conducted
without known conflict with any rights of others. Schedule 6.19 contains a true and accurate list
of all trade names and any and all other names used by any Credit Party during the five-year period
ending as of the Closing Date.



     6.20 Capital Structure. Schedule 6.20 to the Disclosure Letter sets forth all issued
and outstanding Equity Interests of each Credit Party, including the number of authorized, issued
and outstanding Equity Interests of each Credit Party and the par value of such Equity Interests,
all on and as of the Closing Date. All issued and outstanding Equity Interests of each Credit Party
are duly authorized and validly issued, fully paid, nonassessable, free and clear of all Liens
(except for the benefit of Agent) and such Equity Interests were issued in compliance with all
applicable state, federal and foreign laws concerning the issuance of securities. Except as
disclosed on Schedule 6.20 to the Disclosure Letter, there are no preemptive or other outstanding
rights, options, warrants, conversion rights or similar agreements or understandings for the
purchase or acquisition from any Credit Party, of any Equity Interests of any Credit Party other
than rights of the Borrower.



     6.21 Accuracy of Information. (a) The audited financial statements for the Fiscal
Year ended June 30, 2008, furnished to Agent and the Lenders prior to the Effective Date fairly
present in all material respects the financial condition of the Borrower and its Subsidiaries and
the results of their operations for the periods covered thereby, and have been prepared in
accordance with GAAP. The projections, the Pro Forma Balance Sheet and the other pro forma
financial information delivered to the Agent prior to the Effective Date are based upon good faith
estimates and assumptions believed by management of the Borrower to be accurate and reasonable at
the time made, it being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the period or



63









 







periods covered by such financial information may differ from the projected results set forth
therein.



     (b) Since June 30, 2008, there has been no material adverse change in the business,
operations, financial condition or property of the Credit Parties, taken as a whole.



     (c) To the best knowledge of the Credit Parties, as of the Closing Date, (i) the Credit
Parties do not have any material contingent obligations (including any liability for taxes) not
disclosed by or reserved against in the opening balance sheet to be delivered hereunder and (ii)
there are no unrealized or anticipated losses from any present commitment of the Credit Parties
which contingent obligations and losses in the aggregate could reasonably be expected to have a
Material Adverse Effect.



     6.22 Solvency. After giving effect to the consummation of the transactions
contemplated by this Agreement and other Loan Documents, each Credit Party will be solvent, able to
pay its indebtedness as it matures and will have capital sufficient to carry on its businesses and
all business in which it is about to engage. This Agreement is being executed and delivered by the
Borrower to Agent and the Lenders in good faith and in exchange for fair, equivalent consideration.
The Credit Parties do not intend to nor does management of the Credit Parties believe the Credit
Parties will incur debts beyond their ability to pay as they mature. The Credit Parties do not
contemplate filing a petition in bankruptcy or for an arrangement or reorganization under the
Bankruptcy Code or any similar law of any jurisdiction now or hereafter in effect relating to any
Credit Party, nor does any Credit Party have any knowledge of any threatened bankruptcy or
insolvency proceedings against a Credit Party.



     6.23 Employee Matters. There are no strikes, slowdowns, work stoppages, unfair labor
practice complaints, grievances, arbitration proceedings or controversies pending or, to the best
knowledge of the Borrower, threatened against any Credit Party by any employees of any Credit
Party, other than non-material employee grievances or controversies arising in the ordinary course
of business. Set forth on Schedule 6.23 to the Disclosure Letter are all union contracts or
agreements to which any Credit Party is party as of the Closing Date and the related expiration
dates of each such contract.



     6.24 No Misrepresentation. Neither this Agreement nor any other Loan Document,
certificate, information or report furnished or to be furnished by or on behalf of a Credit Party
to Agent or any Lender in connection with any of the transactions contemplated hereby or thereby,
contains a misstatement of material fact, or omits to state a material fact required to be stated
in order to make the statements contained herein or therein, taken as a whole, not misleading in
the light of the circumstances under which such statements were made. There is no fact, other than
information known to the public generally, known to any Credit Party after diligent inquiry, that
could reasonably be expect to have a Material Adverse Effect that has not expressly been disclosed
to Agent in writing.



     6.25 Corporate Documents and Corporate Existence. As to each Obligor, (a) it is an
organization as described on Schedule 1.3 hereto and has provided the Agent and the Lenders with
complete and correct copies of its articles of incorporation, by-laws and all other applicable
charter and other organizational documents, and, if applicable, a good standing certificate and (b)



64









 







its correct legal name, business address, type of organization and jurisdiction of
organization, tax identification number and other relevant identification numbers are set forth on
Schedule 1.3 hereto.



7. AFFIRMATIVE COVENANTS.




     Borrower covenants and agrees, so long as any Lender has any commitment to extend credit
hereunder, or any of the Indebtedness remains outstanding and unpaid, that it will, and, as
applicable, it will cause each of its Subsidiaries to:



     7.1 Financial Statements. Furnish to the Agent, in form and detail satisfactory to
Agent, with sufficient copies for each Lender, the following documents:




	 	(a)	 	as soon as available, but in any event within one hundred
twenty (120) days after the end of each Fiscal Year, a copy of the audited
Consolidated and, if reasonably requested by the Agent, unaudited Consolidating
financial statements of the Borrower and its Consolidated Subsidiaries as at
the end of such Fiscal Year and the related audited Consolidated and if
reasonably requested by the Agent, unaudited Consolidating statements of
income, stockholders equity, and cash flows of the Borrower and its
Consolidated Subsidiaries for such Fiscal Year or partial Fiscal Year and
underlying assumptions, setting forth in each case in comparative form the
figures for the previous Fiscal Year, certified as being fairly stated in all
material respects by an independent, nationally recognized certified public
accounting firm reasonably satisfactory to the Agent; and
	 
	 	(b)	 	as soon as available, but in any event within forty five (45)
days after the end of each fiscal quarter of the Credit Parties (except the
last quarter of each Fiscal Year), Borrower prepared unaudited Consolidated and
if reasonably requested by the Agent, Consolidating balance sheets of the
Borrower and its Consolidated Subsidiaries as at the end of such quarter and
the related unaudited statements of income, stockholders equity and cash flows
of the Borrower and its Consolidated Subsidiaries for the portion of the Fiscal
Year through the end of such quarter, setting forth in each case in comparative
form the figures for the corresponding periods in the previous Fiscal Year, and
certified by a Responsible Officer of the Borrower as being fairly stated in
all material respects;




all such financial statements to fairly present in all material respects the financial condition
and results of operations for such periods and shall be prepared in accordance with GAAP throughout
the periods reflected therein and with prior periods (except as approved by a Responsible Officer
and disclosed therein), provided however that the financial statements delivered pursuant to clause
(b) hereof will not be required to include footnotes and will be subject to change from audit and
year-end adjustments.




     7.2 Certificates; Other Information. Furnish to the Agent, in form and detail
reasonably acceptable to Agent, with sufficient copies for each Lender, the following documents:



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	 	(a)	 	Concurrently with the delivery of the financial statements
described in Sections 7.1(a) for each fiscal year end, and 7.1(b) for each
fiscal quarter end, a Covenant Compliance Report (or, in the case of the
Borrower prepared financial statements for the last fiscal quarter of each
fiscal year, a draft Covenant Compliance Certificate) duly executed by a
Responsible Officer of Borrower;
	 
	 	(b)	 	Promptly upon receipt thereof, copies of all significant
reports submitted by the Credit Parties’ firm(s) of certified public
accountants in connection with each annual, interim or special audit or review
of any type of the financial statements or related internal control systems of
the Credit Parties made by such accountants, including any comment letter
submitted by such accountants to management in connection with their services;
	 
	 	(c)	 	Any financial reports, statements, press releases, other
material information or written notices delivered to the holders of the
Subordinated Debt pursuant to any applicable Subordinated Debt Documents (to
the extent not otherwise required hereunder), as and when delivered to such
Persons and, if applicable, all reports on Forms 10-K and 10-Q filed with the
Securities and Exchange Commission;
	 
	 	(d)	 	Within forty five (45) days after the end of each Fiscal Year,
an annual budget reviewed by Borrower’s Board of Directors certified by a
Responsible Officer of the Borrower;
	 
	 	(e)	 	Within forty five (45) days after and as of the end of each
fiscal quarter, including the last fiscal quarter of each Fiscal Year, (i) the
quarterly aging of the accounts receivable and accounts payable of the Credit
Parties and (ii) a report signed by a Responsible Officer, in form reasonably
acceptable to Agent, listing any applications or registrations that Borrower or
any Guarantor has made or filed in respect of any Patents, Trademarks or
Copyrights and the status of any outstanding applications or registrations, as
well as any material change in the Intellectual Property Collateral (as defined
in the Collateral Documents), including but not limited to any Patent,
Trademark or Copyright not specified in the exhibits to the Security Agreement;
	 
	 	(f)	 	Any additional information as required by any Loan Document,
and such additional schedules to the Disclosure Letter, certificates and
reports respecting all or any of the Collateral, the items or amounts received
by the Credit Parties in full or partial payment thereof, and any goods (the
sale or lease of which shall have given rise to any of the Collateral)
possession of which has been obtained by the Credit Parties, all to such extent
as Agent may reasonably request from time to time, any such schedule,
certificate or report to be certified as true and correct in all material
respects by a Responsible Officer of the applicable Credit Party and shall be
in such form and detail as Agent may reasonably specify; and




66









 






	 	(g)	 	Such additional financial and/or other information as Agent or
any Lender may from time to time reasonably request, promptly following such
request.





     7.3 Payment of Obligations. Pay, discharge or otherwise satisfy, at or before
maturity or before they become delinquent, as the case may be, all of its material obligations of
whatever nature, including without limitation all assessments, governmental charges, claims for
labor, supplies, rent or other obligations, except where the amount or validity thereof is
currently being appropriately contested in good faith and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Credit Parties.



     7.4 Conduct of Business and Maintenance of Existence; Compliance with Laws.



     (a) Continue to engage in their respective business and operations substantially as conducted
immediately prior to the Closing Date other than the Direct Selling Services division;



     (b) Preserve, renew and keep in full force and effect its existence and maintain its
qualifications to do business in each jurisdiction where such qualifications are necessary for its
operations, except as otherwise permitted pursuant to Section 8.4 and except where failure to do so
could not reasonably be expected to have a Material Adverse Effect;



     (c) Take all action it deems necessary in its reasonable business judgment to maintain all
rights, privileges, licenses and franchises necessary for the normal conduct of its business except
where the failure to so maintain such rights, privileges or franchises could not, either singly or
in the aggregate, reasonably be expected to have a Material Adverse Effect;



     (d) Comply with all applicable Requirements of Law, except to the extent that failure to
comply therewith could not, either singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and



     (e) (i) Continue to be a Person whose property or interests in property is not blocked or
subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support
Terrorism (66 Fed. Reg. 49079 (2001)) (the “Order”), (ii) not engage in the transactions prohibited
by Section 2 of that Order or become associated with Persons such that a violation of Section 2 of
the Order would arise, and (iii) not become a Person on the list of Specially Designated National
and Blocked Persons, or (iv) otherwise not become subject to the limitation of any OFAC regulation
or executive order.



     7.5 Maintenance of Property; Insurance. (a) Keep all material property it deems, in
its reasonable business judgment, useful and necessary in its business in working order (ordinary
wear and tear excepted); (b) maintain insurance coverage with financially sound and reputable
insurance companies on physical assets and against other business risks in such amounts and of such
types as are customarily carried by companies similar in size and nature (including without
limitation casualty and public liability and property damage insurance), and in the event of
acquisition of additional property, real or personal, or of the incurrence of additional risks of
any nature, increase such insurance coverage in such manner and to such extent as prudent business
judgment and present practice or any applicable Requirements of Law would dictate; provided,



67









 







however, if Borrower loses its insurance coverage because of the insolvency of its insurer,
Borrower shall obtain replacement coverage meeting the requirements of the Loan Documents as soon
as is reasonably practicable after the loss of such coverage and in any event within thirty (30)
days after such loss and the failure to have insurance coverage during the interim period shall not
constitute an Event of Default; (c) in the case of all insurance policies covering any Collateral,
such insurance policies shall provide that the loss payable thereunder shall be payable to the
applicable Credit Party, and to the Agent (as mortgagee, or, in the case of personal property
interests, lender loss payee) as their respective interests may appear; (d) in the case of all
public liability insurance policies, such policies shall list the Agent as an additional insured,
as Agent may reasonably request; and (e) if requested by Agent, certificates evidencing such
policies, including all endorsements thereto, to be deposited with Agent, such certificates being
in form and substance reasonably acceptable to Agent.



     7.6 Inspection of Property; Books and Records, Discussions. Permit Agent and each
Lender, through their authorized attorneys, accountants and representatives (a) at all reasonable
times during normal business hours, upon the request of Agent or such Lender, to examine each
Credit Party’s books, accounts, records, ledgers and assets and properties; (b) from time to time,
during normal business hours, upon the request of the Agent, to conduct full or partial collateral
audits of the Accounts and Inventory of the Credit Parties and appraisals of all or a portion of
the fixed assets (including real property) of the Credit Parties, such audits and appraisals to be
completed by an appraiser as may be selected by Agent and consented to by Borrower (such consent
not to be unreasonably withheld), with all reasonable costs and expenses of such audits to be
reimbursed by the Credit Parties (provided that unless an Event of Default has occurred and is
continuing, the Credit Parties shall not be obligated to reimburse the Agent for more than one (1)
such audit or appraisal per calendar year), (c) during normal business hours and at their own risk,
to enter onto the real property owned or leased by any Credit Party to conduct inspections,
investigations or other reviews of such real property; and (d) at reasonable times during normal
business hours with prior notice to Borrower and at reasonable intervals, to visit all of the
Credit Parties’ offices, discuss each Credit Party’s respective financial matters with their
respective officers, as applicable, and, by this provision, Borrower authorizes, and will cause
each of their respective Subsidiaries to authorize, its independent certified or chartered public
accountants to discuss the finances and affairs of any Credit Party and examine any of such Credit
Party’s books, reports or records held by such accountants.



     7.7 Notices. Promptly give written notice to the Agent of:




	 	(a)	 	the occurrence of any Default or Event of Default of which any
Credit Party has knowledge;
	 
	 	(b)	 	any (i) litigation or proceeding existing at any time between
any Credit Party and any Governmental Authority or other third party, or any
investigation of any Credit Party conducted by any Governmental Authority,
which in any case if adversely determined would have a Material Adverse Effect
or which could reasonably be expected to result in damages or costs to Borrower
or any Subsidiary of Two Million Five Hundred Thousand Dollars ($2,500,000) or
more or (ii) any material adverse change in the financial condition of any
Credit Party since the date




68









 






	 	 	 	of the last audited financial statements delivered pursuant to Section
7.1(a) hereof;






	 	(c)	 	the occurrence of any event which any Credit Party believes
could reasonably be expected to have a Material Adverse Effect, promptly after
concluding that such event could reasonably be expected to have such a Material
Adverse Effect;
	 
	 	(d)	 	promptly after becoming aware thereof, the taking by the
Internal Revenue Service or any foreign taxing jurisdiction of a written tax
position (or any such tax position taken by any Credit Party in a filing with
the Internal Revenue Service or any foreign taxing jurisdiction) which could
reasonably be expected to have a Material Adverse Effect, setting forth the
details of such position and the financial impact thereof;
	 
	 	(e)	 	(i) the acquisition or creation of any new Subsidiaries, (iii)
any material change after the Closing Date in the authorized and issued Equity
Interests of any Obligor or any other material amendment to any Obligor’s
charter, by-laws or other organizational documents, such notice, in each case,
to identify the applicable jurisdictions, capital structures or amendments as
applicable, provided that such notice shall be given not less than five (5)
Business Days prior to the proposed effectiveness of such changes, acquisition
or creation, as the case may be (or such shorter period to which Agent may
consent);
	 
	 	(f)	 	not less than ten (10) Business Days (or such other shorter
period to which Agent may agree) prior to the proposed effective date thereof,
any proposed material amendments, restatements or other modifications to any
Subordinated Debt Documents which would have an adverse effect on the Lenders
(it being acknowledged by Borrower that any change in term, interest rate,
prepayment provisions, amortization, financial covenants or default provisions
shall be deemed to have an adverse effect on the Lenders); and
	 
	 	(g)	 	any default or event of default by any Person under any
Subordinated Debt Document, concurrently with delivery or promptly after
receipt (as the case may be) of any notice of default or event of default under
the applicable document, as the case may be.




Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
of Borrower setting forth details of the occurrence referred to therein and, in the case of notices
referred to in clauses (a), (b), (c), (d) and (g) hereof stating what action the applicable Credit
Party has taken or proposes to take with respect thereto.




     7.8 Hazardous Material Laws.



     (a) Use and operate all of its facilities and properties in material compliance with all
applicable Hazardous Material Laws, keep all material required permits, approvals, certificates,



69









 







licenses and other authorizations required under such Hazardous Material Laws in effect and
remain in compliance therewith, and handle all Hazardous Materials in material compliance with all
applicable Hazardous Material Laws;



     (b) (i) Promptly notify Agent and provide copies upon receipt of all written claims,
complaints, notices or inquiries received by any Credit Party relating to its facilities and
properties or compliance with applicable Hazardous Material Laws which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect and (ii) promptly cure and have
dismissed with prejudice to the reasonable satisfaction of Agent and the Majority Lenders any
material actions and proceedings relating to compliance with applicable Hazardous Material Laws to
which any Credit Party is named a party, other than such actions or proceedings being contested in
good faith and with the establishment of reasonable reserves;



     (c) To the extent necessary to comply in all material respects with applicable Hazardous
Material Laws, remediate or monitor contamination arising from a release or disposal of Hazardous
Material, which solely, or together with other releases or disposals of Hazardous Materials could
reasonably be expected to have a Material Adverse Effect;



     (d) Provide such information and certifications which Agent or any Lender may reasonably
request from time to time to evidence compliance with this Section 7.8.



     7.9 Financial Covenants.



     (a) Maintain as of the end of each fiscal quarter, an Adjusted Quick Ratio of not less than
1.15 to 1.00;



     (b) Maintain as of the end of each fiscal quarter, a Fixed Charge Coverage Ratio of not less
than 1.15 to 1.00.



     (c) Maintain as of the end of each fiscal quarter a Funded Debt to EBITDA Ratio of not more
than (i) 3.00 to 1.00 from the Effective Date through December 30, 2009, (ii) 2.75 to 1.00 for
December 31, 2009 through December 30, 2010, and (iii) 2.50 to 1.00 from December 31, 2010 and for
all fiscal quarters thereafter.



     7.10 Governmental and Other Approvals. Apply for, obtain and/or maintain in effect,
as applicable, all authorizations, consents, approvals, licenses, qualifications, exemptions,
filings, declarations and registrations (whether with any court, governmental agency, regulatory
authority, securities exchange or otherwise) which are necessary or reasonably requested by Agent
in connection with the execution, delivery and performance by any Credit Party of, as applicable,
this Agreement, the other Loan Documents, the Subordinated Debt Documents, or any other documents
or instruments to be executed and/or delivered by any Credit Party, as applicable in connection
therewith or herewith, except where the failure to so apply for, obtain or maintain could not
reasonably be expected to have a Material Adverse Effect.



     7.11 Compliance with ERISA; ERISA Notices. (a) Comply in all material respects with
all material requirements imposed by ERISA and the Internal Revenue Code, including, but not
limited to, the minimum funding requirements for any Pension Plan, except to the extent that any
noncompliance could not reasonably be expected to have a Material Adverse Effect.




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     (b) Promptly notify Agent upon the occurrence of any of the following events in writing: (i)
the termination, other than a standard termination, as defined in ERISA, of any Pension Plan
subject to Subtitle C of Title IV of ERISA by any Credit Party; (ii) the appointment of a trustee
by a United States District Court to administer any Pension Plan subject to Title IV of ERISA;
(iii) the commencement by the PBGC, of any proceeding to terminate any Pension Plan subject to
Title IV of ERISA; (iv) the failure of any Credit Party to make any payment in respect of any
Pension Plan required under Section 412 of the Internal Revenue Code or Section 302 of ERISA; (v)
the withdrawal of any Credit Party from any Multiemployer Plan if any Credit Party reasonably
believes that such withdrawal would give rise to the imposition of Withdrawal Liability with
respect thereto; or (vi) the occurrence of (x) a “reportable event” which is required to be
reported by a Credit Party under Section 4043 of ERISA other than any event for which the reporting
requirement has been waived by the PBGC or (y) a “prohibited transaction” as defined in Section 406
of ERISA or Section 4975 of the Internal Revenue Code other than a transaction for which a
statutory exemption is available or an administrative exemption has been obtained, except to the
extent such event could not reasonably be expected to have a Material Adverse Effect or result in
any Lien on the assets of any Credit Party.



     7.12 Defense of Collateral. Defend the Collateral from any Liens other than Liens permitted by Section 8.2.



     7.13 Future Subsidiaries; Additional Collateral.



     (a) With respect to each Person which becomes a Domestic Subsidiary of Borrower (directly or
indirectly) subsequent to the Effective Date, whether by Permitted Acquisition or otherwise, cause
such Domestic Subsidiary which is a Material Subsidiary to execute and deliver to the Agent, for
and on behalf of each of the Lenders (unless waived by Agent):




	 	(i)	 	within thirty (30) days after the date such
Person becomes a Material Subsidiary (or such longer time period as the
Agent may determine), a Guaranty, or in the event that a Guaranty
already exists, a joinder agreement to the Guaranty whereby such
Domestic Subsidiary becomes obligated as a Guarantor under the
Guaranty; and






	 	(ii)	 	within thirty (30) days after the date such
Person becomes a Material Subsidiary (or such longer time period as the
Agent may determine), a joinder agreement to the Security Agreement
whereby such Domestic Subsidiary grants a Lien over its assets (other
than Equity Interests which should be governed by (b) of this Section
7.13) as set forth in the Security Agreement, and such Domestic
Subsidiary shall take such additional actions as may be necessary to
ensure a valid first priority perfected Lien over such assets of such
Domestic Subsidiary, subject only to the other Liens permitted pursuant
to Section 8.2 of this Agreement.





     Notwithstanding the foregoing, upon the request of Agent, Bank shall cause Domestic
Subsidiaries which are not Material Subsidiaries to provide the items required above within the



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time periods specified above so that at all times Agent has received Guaranties and Security
Agreements from Credit Parties which on a combined basis account for not less than 90% of the Total
Assets of Borrower and its consolidated Subsidiaries and not less than 90% of the gross revenues of
Borrower and its consolidated Subsidiaries.



     (b) With respect to the Equity Interests of each Person which becomes (whether by Permitted
Acquisition or otherwise) (i) a Domestic Subsidiary subsequent to the Effective Date, cause the
Borrower and each Guarantor that holds such Equity Interests to execute and deliver such Pledge
Agreements, and take such actions as may be necessary to ensure a valid first priority perfected
Lien over one hundred percent (100%) of the Equity Interests of such Domestic Subsidiary held by
such Person, such Pledge Agreements to be executed and delivered (unless waived by Agent) within
thirty (30) days after the date such Person becomes a Domestic Subsidiary (or such longer time
period as Agent may determine); and (ii) a Foreign Subsidiary which is a Material Subsidiary
subsequent to the Effective Date, the Equity Interests of which is held directly by Borrower or one
of its Domestic Subsidiaries, cause the Credit Party that holds such Equity Interests to execute
and deliver such Pledge Agreements and take such actions as may be necessary to ensure a valid
first priority perfected Lien over sixty-five percent (65%) of the Equity Interests of such
Subsidiary, such Pledge Agreements to be executed and delivered (unless waived by Agent) within
thirty (30) days after the date such Person becomes a Foreign Subsidiary (or such longer time
period as Agent may determine); and



     (c) With respect to the acquisition of a fee interest in real property by any Credit Party
with a fair market value in excess of Two Million Five Hundred Thousand Dollars ($2,500,000) after
the Effective Date (whether by Permitted Acquisition or otherwise), not later than sixty (60) days
after the acquisition is consummated or the owner of such property becomes a Domestic Subsidiary
(or such longer time period as Agent may determine), such Credit Party shall execute or cause to be
executed (unless waived by Agent), a Mortgage (or an amendment to an existing mortgage, where
appropriate) covering such real property, together with such additional real estate documentation,
environmental reports, title policies and surveys as may be reasonably required by Agent;


in each case in form reasonably satisfactory to the Agent, in its reasonable discretion, together
with such supporting documentation, including without limitation corporate authority items,
certificates and opinions of counsel, as reasonably required by the Agent. Upon the Agent’s
request, Credit Parties shall take, or cause to be taken, such additional steps as are necessary or
advisable under applicable law to perfect and ensure the validity and priority of the Liens granted
under this Section 7.13.




     7.14 Accounts. Maintain all deposit accounts and securities accounts of any Credit Party with Agent, a
Lender, an Affiliate of a Lender or any other financial institution reasonably acceptable to Agent,
provided that, with respect to any such accounts maintained with any Person (other than Agent),
such Credit Party (i) shall cause to be executed and delivered an Account Control Agreement in form
and substance satisfactory to Agent and (ii) has taken all other steps necessary, or in the opinion
of the Agent, desirable to ensure that Agent has a perfected security interest in such
account.



     7.15 Use of Proceeds. Use all Advances of the Revolving Credit as set forth in Section



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2.12 hereof and the
proceeds of the Term Loan as set forth in Section 4.9 hereof. Borrower shall not use any portion of
the proceeds of any such advances for the purpose of purchasing or carrying any “margin stock” (as
defined in Regulation U of the Board of Governors of the Federal Reserve System) in any manner
which violates the provisions of Regulation T, U or X of said Board of Governors or for any other
purpose in violation of any applicable statute or regulation.



     7.16 Further Assurances and Information. (a) Take such actions as the Agent or Majority Lenders may from time to time reasonably
request to establish and maintain first priority perfected security interests in and Liens on all
of the Collateral, subject only to those Liens permitted under Section 8.2 hereof, including
executing and delivering such additional pledges, assignments, mortgages, lien instruments or other
security instruments covering any or all of the Credit Parties’ assets as Agent may reasonably
require, such documentation to be in form and substance reasonably acceptable to Agent, and
prepared at the expense of the Borrower.



     (b) Execute and deliver or cause to be executed and delivered to Agent within a reasonable
time following Agent’s request, and at the expense of the Borrower, such other documents or
instruments as Agent may reasonably require to effectuate more fully the purposes of this Agreement
or the other Loan Documents.



     (c) Provide the Agent and the Lenders with any other information required by Section 326 of
the USA Patriot Act or necessary for the Agent and the Lenders to verify the identity of any Credit
Party as required by Section 326 of the USA Patriot Act.



8. NEGATIVE COVENANTS.




     Borrower covenants and agrees that, so long as any Lender has any commitment to extend credit
hereunder, or any of the Indebtedness remains outstanding and unpaid, it will not, and, as
applicable, it will not permit any of its Subsidiaries to:



     8.1 Limitation on Debt. Create, incur, assume or suffer to exist any Debt, except:




	 	(a)	 	Indebtedness of any Credit Party to Agent and the Lenders under
this Agreement and/or the other Loan Documents;






	 	(b)	 	any Debt existing on the Effective Date and set forth in
Schedule 8.1 to the Disclosure Letter and any renewals or refinancing of such
Debt (provided that (i) the aggregate principal amount of such renewed or
refinanced Debt shall not exceed the aggregate principal amount of the original
Debt outstanding on the Effective Date (less any principal
payments and the amount of any commitment reductions made thereon on or
prior to such renewal or refinancing), (ii) the renewal or refinancing of
such Debt shall be on substantially the same or better terms as in effect
with respect to such Debt on the Effective Date, and shall otherwise be in
compliance with this Agreement, and (iii) at the time of such renewal or
refinancing no Default or Event of Default has occurred and is continuing or
would result from the renewal or refinancing of such Debt;




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	 	(c)	 	any Debt of Borrower or any Subsidiary incurred to finance the
acquisition of fixed or capital assets, whether pursuant to a loan or a
Capitalized Lease provided that both at the time of and immediately after
giving effect to the incurrence thereof (i) no Default or Event of Default
shall have occurred and be continuing, and (ii) the aggregate amount of all
such Debt at any one time outstanding (including, without limitation, any Debt
of the type described in this clause (c) which is set forth on Schedule 8.1 to
the Disclosure Letter) shall not exceed $10,000,000, and any renewals or
refinancings of such Debt on terms substantially the same or better than those
in effect at the time of the original incurrence of such Debt;






	 	(d)	 	Subordinated Debt;












	 	(e)	 	Debt under any Hedging Transactions, provided that such
transaction is entered into for risk management purposes and not for
speculative purposes;






	 	(f)	 	Debt arising from judgments or decrees not deemed to be a
Default or Event of Default under subsection (g) of Section 9.1;






	 	(g)	 	Debt owing to a Person that is a Credit Party, but only to the
extent permitted under Section 8.7 hereof;






	 	(h)	 	Debt incurred under Seller Notes (including any Seller Notes
listed in Schedule 8.1 to the Disclosure Letter) not to exceed Thirty Million
Dollars ($30,000,000) in the aggregate during the term of this Agreement;






	 	(i)	 	Guaranty Obligations of Indebtedness otherwise permitted
hereunder of any Credit Party and Guaranties in the ordinary course of business
of the obligations of suppliers, customers and licensees of any Credit Party;






	 	(j)	 	Debt of Foreign Subsidiaries not to exceed $2,500,000 in the
aggregate;






	 	(k)	 	Debt relating to premium financing arrangements for property
and casualty insurance plans and health and welfare benefit plans (including
health and workers compensation insurance, employment practices liability
insurance and directors and officers insurance);






	 	(l)	 	Debt relating to tenant improvement loans and real estate
commissions in
an amount not exceeding $2,500,000 in the aggregate;






	 	(m)	 	Debt in respect of performance bonds securing obligations not
constituting Debt for borrowed money (including worker’s compensation claims,
health benefits and local, state and federal payroll taxes) and obligations in
connection with self-insurance or similar requirements, in each case provided
in the ordinary course of business;




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	 	(n)	 	third-party indebtedness assumed pursuant to a Permitted
Acquisition completed in compliance with this Agreement of a type which is
permitted under this Agreement (except as a result of giving effect to a Dollar
limitation contained in this Section 8.1) in an amount not exceeding $5,000,000
in the aggregate;






	 	(o)	 	non-recourse Debt with a maturity of less than 15 days incurred
in connection with a Permitted Acquisition with respect to which an I.R.C.
Section 338(h) election has been made; provided that no such Debt shall be
permitted following the initial maturity date of such Debt; and






	 	(p)	 	additional unsecured Debt not otherwise described above,
provided that both at the time of and immediately after giving effect to the
incurrence thereof (i) no Default or Event of Default shall have occurred and
be continuing or result therefrom and (ii) the aggregate amount of all such
Debt shall not exceed $7,500,000 at any one time outstanding.





     8.2 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except for:




	 	(a)	 	Permitted Liens;






	 	(b)	 	Liens securing Debt permitted by Section 8.1(c), provided that
(i) such Liens are created upon fixed or capital assets acquired by the
applicable Credit Party after the date of this Agreement (including without
limitation by virtue of a loan or a Capitalized Lease), (ii) any such Lien is
created solely for the purpose of securing indebtedness representing or
incurred to finance the cost of the acquisition of the item of property subject
thereto, (iii) the principal amount of the Debt secured by any such Lien shall
at no time exceed 100% of the sum of the purchase price or cost of the
applicable property, equipment or improvements and the related costs and
charges imposed by the vendors thereof and (iv) the Lien does not cover any
property other than the fixed or capital asset acquired; provided, however,
that no such Lien shall be created over any owned real property of any Credit
Party for which Agent has received a Mortgage or for which such Credit Party is
required to execute a Mortgage pursuant to the terms of this Agreement;






	 	(c)	 	any Lien securing third-party indebtedness assumed pursuant to
any Permitted Acquisition conducted in compliance with this Agreement; provided
that such Lien is limited to the property so acquired, was not entered into,
extended or renewed in contemplation of such acquisition and is of a type of
Lien permitted under this Agreement (except as a result of giving effect to a
Dollar limitation contained in this Section 8.2);






	 	(d)	 	Liens on intellectual property assets and tangible personal
property of the applicable seller granted in connection with Seller Notes;




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	 	(e)	 	Liens created pursuant to the Loan Documents;






	 	(f)	 	Liens on the assets of Foreign Subsidiaries to secure the Debt
permitted under Section 8.1(j);






	 	(g)	 	Liens on unearned premiums under insurance policies to secure
the Debt permitted under Section 8.1(k);






	 	(h)	 	Liens on tenant improvements to secure the Debt permitted under
Section 8.1(l); and






	 	(i)	 	other Liens, existing on the Closing Date, set forth on
Schedule 8.2 to the Disclosure Letter and renewals, refinancings and extensions
thereof on substantially the same or better terms as in effect on the Closing
Date and otherwise in compliance with this Agreement.




Regardless of the provisions of this Section 8.2, no Lien over the Equity Interests of Borrower or
any Subsidiary of Borrower (except for those Liens for the benefit of Agent and the Lenders) shall
be permitted under the terms of this Agreement.




     8.3 Acquisitions. Except for Permitted Acquisitions and acquisitions permitted under Section 8.7, if any,
purchase or otherwise acquire or become obligated for the purchase of all or substantially all or
any material portion of the assets or business interests or a division or other business unit of
any Person, or any Equity Interest of any Person, or any business or going concern.



     8.4 Limitation on Mergers, Dissolution or Sale of Assets. Enter into any merger or consolidation or convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without limitation, Equity
Interests, receivables and leasehold interests), whether now owned or hereafter acquired or
liquidate, wind up or dissolve, except:




	 	(a)	 	Inventory leased or sold in the ordinary course of business;






	 	(b)	 	obsolete, damaged, uneconomic or worn out machinery, parts,
property or equipment, or property or equipment no longer used or useful in the
conduct of the applicable Credit Party’s business;
	 
	 	(c)	 	Permitted Acquisitions;






	 	(d)	 	mergers or consolidations of any Subsidiary of Borrower with or
into Borrower or any Guarantor so long as the Borrower or such Guarantor shall
be the continuing or surviving entity; provided that at the time of each such
merger or consolidation, both before and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or result
from such merger or consolidation;






	 	(e)	 	any Subsidiary of Borrower may liquidate or dissolve into
Borrower or a Guarantor if Borrower determines in good faith that such
liquidation or 




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	 	 	 	dissolution is in the best interests of Borrower, so long as no
Default or Event of Default has occurred and is continuing or would result
therefrom;






	 	(f)	 	sales or transfers, including without limitation upon voluntary
liquidation from any Credit Party to Borrower or a Guarantor, provided that the
applicable Borrower or Guarantor takes such actions as Agent may reasonably
request to ensure the perfection and priority of the Liens in favor of the
Lenders over such transferred assets;






	 	(g)	 	sales or transfers from any Foreign Subsidiary to any other
Foreign Subsidiary;






	 	(h)	 	subject to Section 4.8(a) hereof, (i) Asset Sales (exclusive of
asset sales permitted pursuant to all other subsections of this Section 8.4) in
which the sales price is at least equal to the fair market value of the assets
sold and the consideration received is cash or cash equivalents, Equity
Interests or Debt of any Credit Party being assumed by the purchaser, provided
that (A) the aggregate amount of such Asset Sales does not exceed five percent
(5%) of Borrower’s Total Assets in any Fiscal Year and no Default or Event of
Default has occurred and is continuing at the time of each such sale (both
before and after giving effect to such Asset Sale), and (B) the aggregate
amount received in Equity Interests during the term of this Agreement shall not
exceed $5,000,000 and (ii) other Asset Sales approved by the Majority Lenders
in their sole discretion;






	 	(i)	 	the sale or disposition of Permitted Investments and other cash
equivalents in the ordinary course of business;






	 	(j)	 	dispositions of owned or leased vehicles in the ordinary course
of business;






	 	(k)	 	licenses and similar arrangements for the use of property of
any Credit Party in the ordinary course of business;






	 	(l)	 	notes or accounts receivable in order to resolve disputes that
occur in the
ordinary course of business, and discounts thereof;






	 	(m)	 	condemned property to the respective governmental authority or
agency that has condemned the same (whether by deed in lieu of condemnation or
otherwise), and transfers of properties that have been subject to a casualty of
the respective insurer of such property or its designee as party of any
insurance settlement; and






	 	(n)	 	the sale or disposition of the Direct Selling Services
division.




The Lenders hereby consent and agree to the release by Agent of any and all Liens on the property
sold or otherwise disposed of in compliance with this Section 8.4.




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     8.5 Restricted Payments. Declare or make any distributions, dividend, payment or other distribution of assets,
properties, cash, rights, obligations or securities (collectively, “Distributions”) on account of
any of its Equity Interests, as applicable, or purchase, redeem or otherwise acquire for value any
of its Equity Interests, as applicable, or any warrants, rights or options to acquire any of its
Equity Interests, now or hereafter outstanding (collectively, “Purchases”), except that:




	 	(a)	 	each Credit Parties may pay cash Distributions to the Borrower
or any Guarantor;






	 	(b)	 	each Credit Party may declare and make Distributions payable in
the Equity Interests of such Credit Party, provided that the issuance of such
Equity Interests does not otherwise violate the terms of this Agreement and no
Default or Event of Default has occurred and is continuing at the time of
making such Distribution or would result from the making of such Distribution;






	 	(c)	 	Borrower may (i) repurchase Equity Interests of former or
current employees, officers and directors pursuant to stock purchase agreements
or stock purchase plans so long as no Default or Event of Default exists prior
to such repurchase or would exist after giving effect to such repurchase, and
(ii) repurchase Equity Interests of former or current employees, officers and
directors pursuant to stock purchase agreements or stock purchase plans by the
cancellation of debt owed by such former employee to Borrower regardless of
whether a Default or Event of Default exists;






	 	(d)	 	Borrower may pay dividends to its shareholders so long as at
the time paid and after giving effect thereto no Default or Event of Default
shall exist;






	 	(e)	 	Borrower may convert any of its convertible securities into
other securities pursuant to the terms of such convertible securities;






	 	(f)	 	Borrower may distribute securities to employees, officers or
directors
upon exercise of their options;






	 	(g)	 	Borrower may make any redemption of Equity Interests with the
proceeds received from a substantially concurrent issue of Equity Interests;






	 	(h)	 	Borrower any distribute and redeem rights under any stockholder
rights plan;






	 	(i)	 	any Credit Party may make capital contributions if such capital
contribution is otherwise permitted as an Investment pursuant to Section 8.7;
and






	 	(j)	 	Borrower may issue Equity Interests in connection with a
Permitted Acquisition.




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     8.6 [Intentionally Deleted].



     8.7 Limitation on Investments, Loans and Advances. Make or allow to remain outstanding any Investment (whether such investment shall be of the
character of investment in shares of stock, evidences of indebtedness or other securities or
otherwise) in, or any loans or advances to, any Person other than:




	 	(a)	 	Permitted Investments;






	 	(b)	 	Investments existing on the Closing Date and listed on Schedule
8.7 to the Disclosure Letter;
	 
	 	(c)	 	sales on open account in the ordinary course of business;






	 	(d)	 	intercompany loans or intercompany Investments made by any
Credit Party to or in any Guarantor or Borrower; provided that, in each case,
no Default or Event of Default shall have occurred and be continuing at the
time of making such intercompany loan or intercompany Investment or result from
such intercompany loan or intercompany Investment being made and that any
intercompany loans shall, if requested by Agent, be evidenced by and funded
under an Intercompany Note pledged to the Agent under the appropriate
Collateral Documents;






	 	(e)	 	Intercompany loans or intercompany Investments to a Credit
Party that is that is not a Guarantor or Borrower; provided that, the aggregate
amount from time to time outstanding in respect thereof shall not exceed Five
Million Dollars ($5,000,000) in any Fiscal Year;






	 	(f)	 	Investments in respect of Hedging Transactions provided that
such transaction is entered into for risk management purposes and not for
speculative purposes;






	 	(g)	 	Investments not to exceed Two Million Five Hundred Thousand
Dollars ($2,500,000) in the aggregate consisting of (i) travel advances and
employee relocation loans and other employee loans and advances in the ordinary
course of business, and (ii) loans to employees, officers or directors relating
to the purchase of Equity Interests of Borrower or its Subsidiaries pursuant to
employee stock purchase plan agreements approved by Borrower’s Board of
Directors;






	 	(h)	 	joint ventures or strategic alliances in the ordinary course of
Borrower’s business consisting of the license of technology, the development of
technology or the providing of technical support, provided that any cash
Investments by Borrower do not exceed $2,500,000 in any Fiscal Year;






	 	(i)	 	Permitted Acquisitions and Investments in any Person acquired
pursuant to a Permitted Acquisition;




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	 	(j)	 	Investments constituting deposits made in connection with the
purchase of goods or services in the ordinary course of business or in
satisfaction of requirements imposed by governmental authorities in an
aggregate amount for such deposits not to exceed $2,500,000 at any one time
outstanding;






	 	(k)	 	Investments accepted in connection with permitted transfers
under Section 8.4;






	 	(l)	 	Investments consisting of notes receivable of, or prepaid
royalties and other credit extensions, to customers and suppliers who are not
Affiliates, in the ordinary course of business; provided that this subparagraph
shall not apply to Investments of Borrower in any Subsidiary;






	 	(m)	 	Investments (including debt obligations) received in connection
with the bankruptcy or reorganization of customers or suppliers and in
settlement of delinquent obligations of, and other disputes with, customers or
suppliers arising in the ordinary course of business;






	 	(n)	 	Investments made prior to the consummation of any Permitted
Acquisition consisting of reasonable earnest money deposits, working fees or
other similar prepaid consideration or similar amounts that would be applied
toward consideration upon consummation of such Permitted Acquisition (in each
case whether or not refundable under any circumstances);






	 	(o)	 	Investments by any Foreign Subsidiary in any other Foreign
Subsidiary or Borrower or parent, provided that 65% of the ownership interest
in each such Foreign Subsidiary has been pledged to Bank; and






	 	(p)	 	other Investments not described above provided that both at the
time of and immediately after giving effect to any such Investment (i) no
Default
or Event of Default shall have occurred and be continuing or shall result
from the making of such Investment and (ii) the aggregate amount of all such
Investments shall not exceed $2,500,000 in any Fiscal Year.




In valuing any Investments for the purpose of applying the limitations set forth in this Section
8.7 (except as otherwise expressly provided herein), such Investment shall be taken at the original
cost thereof, without allowance for any subsequent write-offs or appreciation or depreciation, but
less any amount repaid or recovered on account of capital or principal.




     8.8 Transactions with Affiliates. Except as set forth in Schedule 8.8 to the Disclosure Letter, enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliates of the Credit Parties except: (a) transactions with Affiliates
that are the Credit Parties; (b) transactions otherwise permitted under this Agreement; and (c)
transactions in the ordinary course of a Credit Party’s business and upon fair and reasonable terms
no less favorable to such Credit Party than it would obtain in a comparable arms length transaction
from unrelated third parties. Section 8.8 shall not prohibit, to the extent otherwise permitted
under this Agreement and so long as no Event of Default has occurred and is continuing or would
occur as a result, (i) any issuance of securities,



80









 







or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and
other benefit plans, (ii) loans or advances to employees, officers or other directors of the Credit
Parties, (iii) the payment of fees and indemnities to directors, officers, employees and
consultants of the Credit Parties in the ordinary course of business, (iv) any agreements with
employees, officers and directors entered into by the Credit Parties in the ordinary course of
business, (v) sales of equity interests to Affiliates, (vii) reasonable and customary fees paid to
directors of the Credit Parties, (viii) raising of new equity for the Credit Parties with respect
to the pricing of such equity, and (ix) any payments or other transactions pursuant to any tax
sharing agreement.



     8.9 Sale-Leaseback Transactions. Enter into any arrangement with any Person providing for the leasing by a Credit Party of
real or personal property which has been or is to be sold or transferred by such Credit Party to
such Person or to any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of such Credit Party, as the case may be.



     8.10 Limitations on Other Restrictions. Except for this Agreement or any other Loan Document, enter into any agreement, document or
instrument which would (i) restrict the ability of any Subsidiary of the Borrower to pay or make
dividends or distributions in cash or kind to Borrower or any Guarantor, to make loans, advances or
other payments of whatever nature to any Credit Party, or to make transfers or distributions of all
or any part of its assets to any Credit Party; or (ii) restrict or prevent any Credit Party from
granting Agent on behalf of Lenders Liens upon, security interests in and pledges of their
respective assets, except to the extent such restrictions exist in documents
creating Liens permitted by Section 9.2(b) hereunder except: (a) negative pledges incurred or
provided in favor of any holder of Indebtedness permitted under Section 8.1(c) solely to the extent
any such negative pledge relates to the property financed by or the subject of such Indebtedness;
(b) restrictions and conditions imposed by any governmental authority; (c) restrictions and
conditions existing on the date hereof identified on Schedule 8.10 to the Disclosure Letter and any
extension or renewal of, or any amendment or modification of, any such restriction or condition;
(d) customary restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided that (x) such restrictions and conditions apply only to the
Subsidiary that is to be sold and (y) such sale is permitted hereunder; (e) customary provisions in
leases, licenses, subleases, sublicenses and other contracts restricting the assignment thereof;
(f) customary restrictions imposed on the transfer of copyrighted or patented materials or other
intellectual property and customary provisions in agreements that restrict the assignment of such
agreements or any rights thereunder; (g) any restrictions imposed by contracts or leases entered
into in the ordinary course of business by the Borrower or any of its Subsidiaries with such
Person’s customers, lessors or suppliers; (h) restrictions or conditions imposed by any agreement
relating to Debt and Liens permitted by this Agreement if such restrictions or conditions apply
only to the property or assets securing such Indebtedness; and (i) any restrictions imposed by
contracts or leases entered into in the ordinary course of business by any Person acquired by the
Borrower or any of its Subsidiaries with such Person’s customers, lessors or suppliers and not in
connection with or in contemplation of the acquisition such Person by the Borrower or such
Subsidiary, which restrictions are not applicable to any Person, or the property or assets of any
Person, other than the property or assets of the Person so acquired.



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     8.11 Prepayment of Debt. Make any prepayment (whether optional or mandatory), repurchase, redemption, defeasance or
any other payment in respect of any Subordinated Debt other than (i) as permitted to be refinanced
under Section 8.1, (ii) regularly scheduled payments of principal and interest on such Subordinated
Debt and (iii) the prepayment, redemption, purchase or repayment of any such Subordinated Debt from
the proceeds of any issuance of any Equity Interests issued on terms acceptable to Agent in the
exercise of its reasonable credit judgment.



     8.12 Amendment of Subordinated Debt Documents. Amend, modify or otherwise alter (or suffer to be amended, modified or altered) the
Subordinated Debt Documents except as permitted in the applicable Subordinated Debt Documents and
Subordination Agreements, or if no such restrictions exist in the applicable Subordinated Debt
Documents or Subordination Agreements, except to the extent any such amendments would not
reasonably be expected to have a material adverse effect on the Interest of the Lenders and except
with the prior written consent of the Agent.



     8.13 Modification of Certain Agreements. Make, permit or consent to any amendment or other modification to the constitutional
documents of any Obligor except to the extent that any such amendment or modification (i) does not
violate the terms and conditions of this Agreement or any of the other Loan Documents, (ii)
does not materially adversely affect the interest of the Lenders as creditors and/or secured
parties under any Loan Document and (iii) could not reasonably be expected to have a Material
Adverse Effect and except for any reincorporation of any Obligor in another state of the United
States after fifteen (15) days prior written notice to Agent.



     8.14 Management Fees. Pay or otherwise advance, directly or indirectly, any management, consulting or other fees
to an Affiliate.



     8.15 Fiscal Year. Permit the Fiscal Year of any Credit Party to end on a day other than June 30.



9. DEFAULTS.




     9.1 Events of Default. The occurrence of any of the following events shall constitute an Event of Default
hereunder:




	 	(a)	 	non-payment when due of (i) the principal or interest on the
Indebtedness under the Revolving Credit (including the Swing Line) or the Term
Loan or (ii) any Reimbursement Obligation;






	 	(b)	 	non-payment of any Fees or any other amounts due and owing by
Borrower under this Agreement or by any Credit Party under any of the other
Loan Documents to which it is a party, other than as set forth in subsection
(a) above, within three (3) Business Days after the same is due and payable;






	 	(c)	 	default in the observance or performance of any of the
conditions, covenants or agreements of Borrower set forth in Article 7 or
Article 8




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	 	 	 	which continues for ten (10) Business Days;






	 	(d)	 	default in the observance or performance of any of the other
conditions, covenants or agreements set forth in this Agreement or any of the
other Loan Documents by any Credit Party and continuance thereof for a period
of thirty (30) days after Borrower receives notice thereof or any officer of
Borrower becomes aware thereof; provided, however, that if the default cannot
by its nature be cured within the thirty (30) day period or cannot after
diligent attempts by Borrower be cured within such thirty (30) day period, and
such default is likely to be cured within a reasonable time, then Borrower
shall have an additional reasonable period (which shall not in any case exceed
forty five (45) days) to attempt to cure such default, and within such
reasonable time period the failure to have cured such default shall not be
deemed an Event of Default but no Advances or other credit extensions will be
made;






	 	(e)	 	any representation or warranty made by any Credit Party herein
or in any certificate, instrument or other document submitted pursuant hereto
proves untrue or misleading in any material adverse respect when made;






	 	(f)	 	(i) default by any Credit Party in the payment of any
indebtedness for borrowed money, whether under a direct obligation or guaranty
(other than Indebtedness hereunder) of any Credit Party in excess of Two
Million Five Hundred Thousand Dollars ($2,500,000) (or the equivalent thereof
in any currency other than Dollars) individually or in the aggregate when due
and continuance thereof beyond any applicable period of cure or grace and or
(ii) failure to comply with the terms of any other obligation of any Credit
Party with respect to any indebtedness for borrowed money (other than
Indebtedness hereunder) in excess of Two Million Five Hundred Thousand Dollars
($2,500,000) (or the equivalent thereof in any currency other than Dollars)
individually or in the aggregate, which continues beyond any applicable period
of cure or grace and which would permit the holder or holders thereto to
accelerate such other indebtedness for borrowed money, or require the
prepayment, repurchase, redemption or defeasance of such indebtedness;






	 	(g)	 	the rendering of any judgment(s) (not covered by adequate
insurance from a solvent carrier which is defending such action without
reservation of rights) for the payment of money in excess of the sum of Two
Million Five Hundred Thousand Dollars ($2,500,000) (or the equivalent thereof
in any currency other than Dollars) (or if covered by such insurance, in excess
of $5,000,000) individually or in the aggregate against any Credit Party, and
such judgments shall remain unpaid, unvacated, unbonded or unstayed by appeal
or otherwise for a period of thirty (30) consecutive days from the date of its
entry;






	 	(h)	 	the occurrence of (i) a “reportable event”, as defined in
ERISA, which is




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	 	 	 	determined by the PBGC to constitute grounds for a distress
termination of any Pension Plan subject to Title IV of ERISA maintained or
contributed to by or on behalf of any Credit Party for the benefit of any of
its employees or for the appointment by the appropriate United States District
Court of a trustee to administer such Pension Plan and such reportable event is
not corrected and such determination is not revoked within sixty (60) days
after notice thereof has been given to the plan administrator of such Pension
Plan (without limiting any of Agent’s or any Lender’s other rights or remedies
hereunder), or (ii) the termination or the institution of proceedings by the
PBGC to terminate any such Pension Plan, or (iii) the appointment of a trustee
by the appropriate United States District Court to administer any such Pension
Plan, or (iv) the reorganization (within the meaning of Section 4241 of ERISA)
or insolvency (within the meaning of Section 4245 of ERISA) of any
Multiemployer Plan, or receipt of notice from any Multiemployer Plan that it is
in reorganization or insolvency, or the complete or partial
withdrawal by any Credit Party from any Multiemployer Plan, which in the
case of any of the foregoing, could reasonably be expected to have a
Material Adverse Effect;






	 	(i)	 	except as expressly permitted under this Agreement, any Credit
Party (other than a dissolution of a Subsidiary of Borrower which is not a
Guarantor or Borrower) shall be dissolved or liquidated (or any judgment, order
or decree therefor shall be entered) except as otherwise permitted herein; or
if a creditors’ committee shall have been appointed for the business of any
Credit Party (other than a dissolution of any Subsidiary which is not a
Material Subsidiary); or if any Credit Party (other than a dissolution of any
Subsidiary which is not a Material Subsidiary) shall have made a general
assignment for the benefit of creditors or shall have been adjudicated bankrupt
and if not an adjudication based on a filing by a Credit Party (other than a
dissolution of any Subsidiary which is not a Material Subsidiary), it shall not
have been dismissed within sixty (60) days, or shall have filed a voluntary
petition in bankruptcy or for reorganization or to effect a plan or arrangement
with creditors or shall fail to pay its debts generally as such debts become
due in the ordinary course of business (except as contested in good faith and
for which adequate reserves are made in such party’s financial statements); or
shall file an answer to a creditor’s petition or other petition filed against
it, admitting the material allegations thereof for an adjudication in
bankruptcy or for reorganization; or shall have applied for or permitted the
appointment of a receiver or trustee or custodian for any of its property or
assets; or such receiver, trustee or custodian shall have been appointed for
any of its property or assets (otherwise than upon application or consent of a
Credit Party ) and shall not have been removed within sixty (60) days; or if an
order shall be entered approving any petition for reorganization of any Credit
Party (other than a dissolution of any Subsidiary which is not a Material
Subsidiary) and shall not have been reversed or dismissed within sixty (60)
days;




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	 	(j)	 	the validity, binding effect or enforceability of any
subordination provisions relating to any Subordinated Debt shall be contested
by any Person party thereto (other than any Lender, Agent, Issuing Lender or
Swing Line Lender), or such subordination provisions shall fail to be
enforceable by Agent and the Lenders in accordance with the terms thereof, or
the Indebtedness shall for any reason not have the priority contemplated by
this Agreement or such subordination provisions, and such failure or lack of
priority shall continue for more than five (5) days after the Borrower receives
notice or knowledge thereof; or






	 	(k)	 	any Loan Document shall at any time for any reason cease to be
in full force and effect (other than in accordance with the terms thereof or
the terms of any other Loan Document), as applicable, or the validity, binding
effect or enforceability thereof shall be contested by any party thereto
(other than any Lender, Agent, Issuing Lender or Swing Line Lender), or any
Person shall deny that it has any or further liability or obligation under
any Loan Document, or any such Loan Document shall be terminated (other than
in accordance with the terms thereof or the terms of any other Loan
Document), invalidated, revoked or set aside or in any way cease to give or
provide to the Lenders and the Agent the benefits purported to be created
thereby, or any Loan Document purporting to grant a Lien to secure any
Indebtedness shall, at any time after the delivery of such Loan Document,
fail to create a valid and enforceable Lien on any Collateral purported to
be covered thereby or such Lien shall fail to cease to be a perfected Lien
with the priority required in the relevant Loan Document; or






	 	(l)	 	if there shall occur any circumstance or circumstances that
could reasonably be expected to have a material adverse effect on Borrower’s or
any Guarantor’s interest in, or the value, perfection or priority of Agent’s
Lien in a material portion of the Collateral; or
	 
	 	(m)	 	if there shall occur a Change of Control.





     9.2 Exercise of Remedies. If an Event of Default has occurred and is continuing hereunder: (a) the Agent may, and
shall, upon being directed to do so by the Majority Revolving Credit Lenders, declare the Revolving
Credit Aggregate Commitment terminated; (b) the Agent may, and shall, upon being directed to do so
by the Majority Lenders, declare the entire unpaid principal Indebtedness, including the Notes,
immediately due and payable, without presentment, notice or demand, all of which are hereby
expressly waived by the Borrower; (c) upon the occurrence of any Event of Default specified in
Section 9.1(i) and notwithstanding the lack of any declaration by Agent under preceding clauses (a)
or (b), the entire unpaid principal Indebtedness shall become automatically and immediately due and
payable, and the Revolving Credit Aggregate Commitment shall be automatically and immediately
terminated; (d) the Agent shall, upon being directed to do so by the Majority Revolving Credit
Lenders, demand immediate



85









 







delivery of cash collateral, and each Borrower agrees to deliver such
cash collateral upon demand, in an amount equal to 105% of the maximum amount that may be available
to be drawn at any time prior to the stated expiry of all outstanding Letters of Credit, for
deposit into an account controlled by the Agent; (e) the Agent may, and shall, upon being directed
to do so by the Majority Lenders, notify Borrower or any Credit Party that interest shall be
payable on demand on all Indebtedness (other than Revolving Credit Advances, Swing Line Advances
and Term Loan Advances with respect to which Sections 2.6 and 4.6 hereof shall govern) owing from
time to time to the Agent or any Lender, at a per annum rate equal to the then applicable
Prime-based Rate plus two percent (2%); and (f) the Agent may, and shall, upon being directed to do
so by the Majority Lenders or the Lenders, as applicable (subject to the terms hereof), exercise
any remedy permitted by this Agreement, the other Loan Documents or law.



     9.3 Rights Cumulative. No delay or failure of Agent and/or Lenders in exercising any right, power or privilege
hereunder shall affect such right, power or privilege, nor shall any single or partial exercise
thereof preclude any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Lenders under this Agreement are cumulative and not exclusive of
any right or remedies which Lenders would otherwise have.



     9.4 Waiver by Borrower of Certain Laws. To the extent permitted by applicable law, each Borrower hereby agrees to waive, and does
hereby absolutely and irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may hereafter exist, which,
but for this provision, might be applicable to any sale made under the judgment, order or decree of
any court, on any claim for interest on the Notes, or any security interest or mortgage
contemplated by or granted under or in connection with this Agreement. These waivers have been
voluntarily given, with full knowledge of the consequences thereof.



     9.5 Waiver of Defaults. No Event of Default shall be waived by the Lenders except in a writing signed by an officer
of the Agent in accordance with Section 13.10 hereof. No single or partial exercise of any right,
power or privilege hereunder, nor any delay in the exercise thereof, shall preclude other or
further exercise of their rights by Agent or the Lenders. No waiver of any Event of Default shall
extend to any other or further Event of Default. No forbearance on the part of the Agent or the
Lenders in enforcing any of their rights shall constitute a waiver of any of their rights. The
Borrower expressly agrees that this Section may not be waived or modified by the Lenders or Agent
by course of performance, estoppel or otherwise.



     9.6 Set Off. Upon the occurrence and during the continuance of any Event of Default, each Lender may at
any time and from time to time, without notice to Borrower but subject to the provisions of Section
10.3 hereof (any requirement for such notice being expressly waived by Borrower), setoff and apply
against any and all of the obligations of Borrower now or hereafter existing under this Agreement,
whether owing to such Lender, any Affiliate of such Lender or any other Lender or the Agent, any
and all deposits (general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the account of Borrower
and any property of Borrower from time to time in possession of such Lender, irrespective of
whether or not such deposits held or indebtedness owing by such Lender may be contingent and
unmatured and regardless of whether



86









 







any Collateral then held by Agent or any Lender is adequate to
cover the Indebtedness. Promptly following any such setoff, such Lender shall give written notice
to Agent and Borrower of the occurrence thereof. Borrower hereby grants to the Lenders and the
Agent a lien on and security interest in all such deposits, indebtedness and property as collateral
security for the payment and performance of all of the obligations of Borrower under this
Agreement. The rights of each Lender under this Section 9.6 are in addition to the other rights and
remedies (including, without limitation, other rights of setoff) which such Lender may have.



10. PAYMENTS, RECOVERIES AND COLLECTIONS.




     10.1 Payment Procedure.



     (a) All payments to be made by Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. Except as otherwise provided herein, all payments
made by the Borrower of principal, interest or fees hereunder shall be made without setoff or
counterclaim on the date specified for payment under this Agreement and must be received by Agent
not later than 1:00 p.m. (Pacific time) on the date such payment is required or intended to be made
in Dollars in immediately available funds to Agent at Agent’s office located at 75 E. Trimble Road,
San Jose, California 95131, for the ratable benefit of the Revolving Credit Lenders in the case of
payments in respect of the Revolving Credit and any Letter of Credit Obligations, for the ratable
benefit of the Term Loan Lenders. Any payment received by the Agent after 1:00 p.m. (Pacific time)
shall be deemed received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue. Upon receipt of each such payment, the Agent shall make prompt payment
to each applicable Lender, or, in respect of Eurodollar-based Advances, such Lender’s Eurodollar
Lending Office, in like funds and currencies, of all amounts received by it for the account of such
Lender.



     (b) Unless the Agent shall have been notified in writing by Borrower at least two (2) Business
Days prior to the date on which any payment to be made by Borrower is due that Borrower does not
intend to remit such payment, the Agent may, in its sole discretion and without obligation to do
so, assume that Borrower has remitted such payment when so due and the Agent may, in reliance upon
such assumption, make available to each Revolving Credit Lender or Term Loan Lender, as the case
may be, on such payment date an amount equal to such Lender’s share of such assumed payment. If
Borrower has not in fact remitted such payment to the Agent, each Lender shall forthwith on demand
repay to the Agent the amount of such assumed payment made available or transferred to such Lender,
together with the interest thereon, in respect of each day from and including the date such amount
was made available by the Agent to such Lender to the date such amount is repaid to the Agent at a
rate per annum equal to the Federal Funds Effective Rate for the first two (2) Business Days that
such amount remains unpaid, and thereafter at a rate of interest then applicable to such Revolving
Credit Advances.



     (c) Subject to the definition of “Interest Period” in Section 1 of this Agreement, whenever
any payment to be made hereunder shall otherwise be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of time shall be
included in computing interest, if any, in connection with such payment.



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     (d) All payments to be made by Borrower under this Agreement or any of the Notes (including
without limitation payments under the Swing Line and/or Swing Line Note) shall be made without
setoff or counterclaim, as aforesaid, and, subject to full compliance by each Lender (and each
assignee and participant pursuant to Section 13.8) with Section 13.13, without deduction for or on
account of any present or future withholding or other taxes of any nature
imposed by any governmental authority or of any political subdivision thereof or any
federation or organization of which such governmental authority may at the time of payment be a
member (other than any taxes on the overall income, net income, net profits or net receipts or
similar taxes (or any franchise taxes imposed in lieu of such taxes) on the Agent or any Lender (or
any branch maintained by Agent or a Lender) as a result of a present or former connection between
the Agent or such Lender and the governmental authority, political subdivision, federation or
organization imposing such taxes), unless Borrower is compelled by law to make payment subject to
such tax. In such event, Borrower shall:




	 	(i)	 	pay to the Agent for Agent’s own account
and/or, as the case may be, for the account of the Lenders such
additional amounts as may be necessary to ensure that the Agent and/or
such Lender or Lenders (including the Swing Line Lender) receive a net
amount equal to the full amount which would have been receivable had
payment not been made subject to such tax; and






	 	(ii)	 	remit such tax to the relevant taxing
authorities according to applicable law, and send to the Agent or the
applicable Lender or Lenders (including the Swing Line Lender), as the
case may be, such certificates or certified copy receipts as the Agent
or such Lender or Lenders shall reasonably require as proof of the
payment by Borrower of any such taxes payable by Borrower.




As used herein, the terms “tax”, “taxes” and “taxation” include all taxes, levies, imposts, duties,
fees, deductions and withholdings or similar charges together with interest (and any taxes payable
upon the amounts paid or payable pursuant to this Section 10.1) thereon. Borrower shall be
reimbursed by the applicable Lender for any payment made by Borrower under this Section 10.1 if the
applicable Lender is not in compliance with its obligations under Section 13.13 at the time of the
Borrower’s payment.




     10.2 Application of Proceeds of Collateral. Notwithstanding anything to the contrary in this Agreement, in the case of any Event of
Default under Section 9.1(i), immediately following the occurrence thereof, and in the case of any
other Event of Default, upon the termination of the Revolving Credit Aggregate Commitment, the
acceleration of any Indebtedness arising under this Agreement and/or the exercise of any other
remedy in each case by the requisite Lenders under Section 9.2 hereof, the Agent shall apply the
proceeds of any Collateral, together with any offsets, voluntary payments by any Credit Party or
others and any other sums received or collected in respect of the Indebtedness first, to pay all
incurred and unpaid fees and expenses of the Agent under the Loan Documents and any protective
advances made by Agent with respect to the Collateral under or pursuant to the terms of any Loan
Document, next, to pay any fees and expenses owed to the Issuing Lender hereunder, next, to the
Indebtedness under the Revolving Credit (including the Swing Line and any Reimbursement



88









 







Obligations), Indebtedness under the Term Loan and under the Lender Products, on a pro rata basis,
next to any obligations owing by any Credit Party under any Hedging Agreements on a pro rata basis,
next, to any other Indebtedness on a pro rata basis, and then, if there is any excess, to the
Credit Parties, as the case may be.



     10.3 Pro-rata Recovery. If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary,
by application of setoff or otherwise) on account of principal of, or interest on, any of the
Advances made by it, or the participations in Letter of Credit Obligations or Swing Line Advances
held by it in excess of its pro rata share of payments then or thereafter obtained by all Lenders
upon principal of and interest on all such Indebtedness, such Lender shall purchase from the other
Lenders such participations in the Revolving Credit, the Term Loan and/or the Letter of Credit
Obligation held by them as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably in accordance with the applicable Percentages of the Lenders;
provided, however, that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing holder, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.



11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.




     11.1 Reimbursement of Prepayment Costs. If (i) Borrower makes any payment of principal with respect to any Eurodollar-based Advance
or Quoted Rate Advance on any day other than the last day of the Interest Period applicable thereto
(whether voluntarily, pursuant to any mandatory provisions hereof, by acceleration, or otherwise);
(ii) Borrower converts or refunds (or attempts to convert or refund) any such Advance on any day
other than the last day of the Interest Period applicable thereto (except as described in Section
2.5(e)); (iii) Borrower fails to borrow, refund or convert any Eurodollar-based Advance or Quoted
Rate Advance after notice has been given by Borrower to Agent in accordance with the terms hereof
requesting such Advance; or (iv) or if the Borrower fails to make any payment of principal in
respect of a Eurodollar-based Advance or Quoted Rate Advance when due (other than at the end of the
applicable Interest Period), the Borrower shall reimburse Agent for itself and/or on behalf of any
Lender, as the case may be, within ten (10) Business Days of written demand therefor for any
resulting loss, cost or expense incurred (excluding the loss of any Applicable Margin) by Agent and
Lenders, as the case may be, as a result thereof, including, without limitation, any such loss,
cost or expense incurred in obtaining, liquidating, employing or redeploying deposits from third
parties, whether or not Agent and Lenders, as the case may be, shall have funded or committed to
fund such Advance. The amount payable hereunder by Borrower to Agent for itself and/or on behalf of
any Lender, as the case may be, shall be deemed to equal an amount equal to the excess, if any, of
(a) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed,
refunded or converted, for the period from the date of such prepayment or of such failure to
borrow, refund or convert, through the last day of the relevant Interest Period, at the applicable
rate of interest for said Advance(s) provided under this Agreement, over (b) the amount of interest
(as reasonably determined by Agent and Lenders, as the case may be) which would have accrued to
Agent and Lenders, as the case may be, on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurocurrency market. Calculation of any
amounts payable to any Lender under this paragraph shall be made as though such Lender shall have
actually funded or committed to fund the relevant Advance



89









 







through the purchase of an underlying
deposit in an amount equal to the amount of such Advance and having a maturity comparable to the
relevant Interest Period; provided, however, that any Lender may fund any
Eurodollar-based Advance or Quoted Rate Advance, as the case may be, in any manner it deems
fit and the foregoing assumptions shall be utilized only for the purpose of the calculation of
amounts payable under this paragraph. Upon the written request of Borrower, Agent and Lenders shall
deliver to Borrower a certificate setting forth the basis for determining such losses, costs and
expenses, which certificate shall be conclusively presumed correct, absent manifest error.



     11.2 Eurodollar Lending Office. For any Eurodollar Advance, if Agent or a Lender, as applicable, shall designate a
Eurodollar Lending Office which maintains books separate from those of the rest of Agent or such
Lender, Agent or such Lender, as the case may be, shall have the option of maintaining and carrying
the relevant Advance on the books of such Eurodollar Lending Office.



     11.3 Circumstances Affecting Eurodollar-based Rate Availability. If, with respect to any Eurodollar-Interest Period, Agent or the Majority Lenders (after
consultation with Agent) shall determine in good faith that, by reason of circumstances affecting
the foreign exchange and interbank markets generally, deposits in eurodollars in the applicable
amounts are not being offered to the Agent or such Lenders for such Eurodollar-Interest Period,
then Agent shall forthwith give notice thereof to Borrower. Thereafter, until Agent notifies
Borrower that such circumstances no longer exist, (i) the obligation of Lenders to make
Eurodollar-based Advances, and the right of Borrower to convert an Advance to or refund an Advance
as a Eurodollar-based Advance, as the case may be, shall be suspended, and (ii) effective upon the
last day of each Eurodollar-Interest Period related to any existing Eurodollar-based Advance, each
such Eurodollar-based Advance shall automatically be converted into a Prime-based Advance (without
regard to satisfaction of any conditions to conversion contained elsewhere herein).



     11.4 Laws Affecting Eurodollar-based Advance Availability. If, after the date of this Agreement, the adoption or introduction of, or any change in,
any applicable law, rule or regulation or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof, or compliance by
any of the Lenders (or any of their respective Eurodollar Lending Offices) with any request or
directive (whether or not having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Lenders (or any of their respective Eurodollar Lending Offices) to honor
its obligations hereunder to make or maintain any Advance with interest at the Eurodollar-based
Rate, such Lender shall forthwith give notice thereof to Borrower and to Agent. Thereafter, (a) the
obligations of the applicable Lenders to make Eurodollar-based Advances and the right of Borrower
to convert an Advance into or refund an Advance as a Eurodollar-based Advance shall be suspended
and thereafter Borrower may select as Applicable Interest Rates only those which remain available
and which are permitted to be selected hereunder, and (b) if any of the Lenders may not lawfully
continue to maintain an Advance to the end of the then current Eurodollar-Interest Period
applicable thereto as a Eurodollar-based Advance, the applicable Advance shall immediately be
converted to a Prime-based Advance and the Prime-based Rate shall be applicable thereto for the
remainder of such Eurodollar-Interest Period. For purposes of this Section, a change in law, rule,
regulation, interpretation or administration shall
include, without limitation, any change made or which becomes effective on the basis of a law,
rule, regulation,



90









 







interpretation or administration presently in force, the effective date of which
change is delayed by the terms of such law, rule, regulation, interpretation or administration.



     11.5 Increased Cost of Eurodollar-based Advances. If, after the date of this Agreement, the adoption or introduction of, or any change in,
any applicable law, rule or regulation or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any of the Lenders (or any of their respective Eurodollar
Lending Offices) with any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:




	 	(a)	 	shall subject any of the Lenders (or any of their respective
Eurodollar Lending Offices) to any tax, duty or other charge with respect to
any Advance or shall change the basis of taxation of payments to any of the
Lenders (or any of their respective Eurodollar Lending Offices) of the
principal of or interest on any Advance or any other amounts due under this
Agreement in respect thereof (except for changes in the rate of tax on the
overall net income of any of the Lenders or any of their respective Eurodollar
Lending Offices); or






	 	(b)	 	shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any of the Lenders
(or any of their respective Eurodollar Lending Offices) or shall impose on any
of the Lenders (or any of their respective Eurodollar Lending Offices) or the
foreign exchange and interbank markets any other condition affecting any
Advance;




and the result of any of the foregoing matters is to increase the costs to any of the Lenders of
maintaining any part of the Indebtedness hereunder as a Eurodollar-based Advance or to reduce the
amount of any sum received or receivable by any of the Lenders under this Agreement in respect of a
Eurodollar-based Advance, then such Lender shall promptly notify Agent, and Agent shall promptly
notify Borrower of such fact and demand compensation therefor and, within ten (10) Business Days
after such notice, Borrower agrees to pay to such Lender or Lenders such additional amount or
amounts as will compensate such Lender or Lenders for such increased cost or reduction, provided
that each Lender agrees to take any reasonable action, to the extent such action could be taken
without cost or administrative or other burden or restriction to such Lender, to mitigate or
eliminate such cost or reduction, within a reasonable time after becoming aware of the foregoing
matters. Agent will promptly notify Borrower of any event of which it has knowledge which will
entitle Lenders to compensation pursuant to this Section, or which will cause Borrower to incur
additional liability under Section 11.1 hereof, provided that Agent shall incur no liability
whatsoever to the Lenders or Borrower in the event it fails to do so. A certificate of Agent (or
such Lender, if applicable) setting forth the basis for determining such additional amount or
amounts necessary to compensate such Lender or Lenders shall accompany
such demand and shall be conclusively presumed to be correct absent manifest error.




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     11.6  Capital Adequacy and Other Increased Costs.




	 	(a)	 	If, after the date of this Agreement, the adoption or
introduction of, or any change in any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect and whether
or not presently applicable to any Lender or Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender or Agent
with any guideline, request or directive of any such authority (whether or not
having the force of law), including any risk based capital guidelines, affects
or would affect the amount of capital required to be maintained by such Lender
or Agent (or any corporation controlling such Lender or Agent) and such Lender
or Agent, as the case may be, determines that the amount of such capital is
increased by or based upon the existence of such Lender’s or Agent’s
obligations or Advances hereunder and such increase has the effect of reducing
the rate of return on such Lender’s or Agent’s (or such controlling
corporation’s) capital as a consequence of such obligations or Advances
hereunder to a level below that which such Lender or Agent (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender or Agent to be material (collectively, “Increased
Costs”), then Agent or such Lender shall notify Borrower, and thereafter
Borrower shall pay to such Lender or Agent, as the case may be, within ten (10)
Business Days of written demand therefor from such Lender or Agent, additional
amounts sufficient to compensate such Lender or Agent (or such controlling
corporation) for any increase in the amount of capital and reduced rate of
return which such Lender or Agent reasonably determines to be allocable to the
existence of such Lender’s or Agent’s obligations or Advances hereunder. A
statement setting forth the amount of such compensation, the methodology for
the calculation and the calculation thereof which shall also be prepared in
good faith and in reasonable detail by such Lender or Agent, as the case may
be, shall be submitted by such Lender or by Agent to Borrower, reasonably
promptly after becoming aware of any event described in this Section 11.6(a)
and shall be conclusively presumed to be correct, absent manifest error.






	 	(b)	 	Notwithstanding the foregoing, however, Borrower shall not be
required to pay any increased costs under Sections 11.5, 11.6 or 3.4(c) for any
period ending prior to the date that is 120 days prior to the making of a
Lender’s initial request for such additional amounts unless the applicable
change in law or other event resulting in such increased costs is effective
retroactively to a date more than 120 days prior to the date of such request,
in which case a Lender’s request for such additional amounts relating to the
period more than 120 days prior to the making of the request must be given
not more than 120 days after such Lender becomes aware of the applicable
change in law or other event resulting in such increased costs.




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     11.7 Right of Lenders to Fund through Branches and Affiliates. Each Lender (including without limitation the Swing Line Lender) may, if it so elects,
fulfill its commitment as to any Advance hereunder by designating a branch or Affiliate of such
Lender to make such Advance; provided that (a) such Lender shall remain solely responsible
for the performances of its obligations hereunder and (b) no such designation shall result in any
material increased costs to Borrower.



     11.8 Margin Adjustment. Adjustments to the Applicable Margins and the Applicable Fee Percentages, based on Schedule
1.1, shall be implemented on a quarterly basis as follows:




	 	(a)	 	Such adjustments shall be given prospective effect only,
effective as to all Advances outstanding hereunder, the Applicable Fee
Percentage and the Letter of Credit Fee, upon the date of delivery of the
financial statements under Sections 7.1(a) and 7.1(b) hereunder and the
Covenant Compliance Report under Section 7.2(a) hereof, in each case
establishing applicability of the appropriate adjustment and in each case with
no retroactivity or claw-back. In the event Borrower shall fail timely to
deliver such financial statements or the Covenant Compliance Report and such
failure continues for three (3) days, then (but without affecting the Event of
Default resulting therefrom) from the date delivery of such financial
statements and report was required until such financial statements and report
are delivered, the Applicable Margins and Applicable Fee Percentages shall be
at the highest level on the Pricing Matrix attached to this Agreement as
Schedule 1.1.






	 	(b)	 	From the Effective Date until the required date of delivery
(or, if earlier, delivery) of the financial statements under Section 7.1(a) or
7.1(b) hereof, as applicable, and the Covenant Compliance Report under Section
7.2(a) hereof, for the fiscal quarter ending September 30, 2008, the Applicable
Margins and Applicable Fee Percentages shall be those set forth under the Level
II column of the pricing matrix attached to this Agreement as Schedule 1.1.
Thereafter, Applicable Margins and Applicable Fee Percentages shall be based
upon the quarterly financial statements and Covenant Compliance Reports,
subject to recalculation as provided in Section 11.8(a) above.






	 	(c)	 	Notwithstanding the foregoing, however, if, prior to the
payment and discharge in full (in cash) of the Indebtedness and the termination
of any and all commitments hereunder, as a result of any restatement of or
adjustment to the financial statements of Borrower and any of its
Subsidiaries (relating to the current or any prior fiscal period) or for any
other reason, Agent determines that the Applicable Margin and/or the
Applicable Fee Percentages as calculated by Borrower as of any applicable
date of determination were inaccurate in any respect and a proper
calculation thereof would have resulted in different pricing for any fiscal
period, then (x) if the proper calculation thereof would have resulted in
higher pricing for any such period, Borrower shall automatically and




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	 	 	 	retroactively be obligated to pay to Agent, promptly upon demand by Agent or
the Majority Lenders, an amount equal to the excess of the amount of
interest and fees that should have been paid for such period over the amount
of interest and fees actually paid for such period and, if the current
fiscal period is affected thereby, the Applicable Margin and/or the
Applicable Fee Percentages for the current period shall be adjusted based on
such recalculation; and (y) if the proper calculation thereof would have
resulted in lower pricing for such period, Agent and Lenders shall have no
obligation to recalculate such interest or fees or to repay any interest or
fees to the Borrower.





12. AGENT.




     12.1 Appointment of Agent. Each Lender and the holder of each Note (if issued) irrevocably appoints and authorizes the
Agent to act on behalf of such Lender or holder under this Agreement and the other Loan Documents
and to exercise such powers hereunder and thereunder as are specifically delegated to Agent by the
terms hereof and thereof, together with such powers as may be reasonably incidental thereto,
including without limitation the power to execute or authorize the execution of financing or
similar statements or notices, and other documents. In performing its functions and duties under
this Agreement, the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency or trust with or for
any Credit Party.



     12.2 Deposit Account with Agent or any Lender. Borrower authorizes Agent and each Lender, in Agent’s or such Lender’s sole discretion,
upon notice to the Borrower to charge its general deposit account(s), if any, maintained with the
Agent or such Lender for the amount of any principal, interest, or other amounts or costs due under
this Agreement when the same become due and payable under the terms of this Agreement or the Notes.
Upon request of Borrower, Agent shall promptly provide to Borrower a statement prepaid in good
faith and in reasonable detail, setting forth the amount of such charges, the methodology of the
calculation thereof and the calculation thereof.



     12.3 Scope of Agent’s Duties. The Agent shall have no duties or responsibilities except those expressly set forth herein,
and shall not, by reason of this Agreement or otherwise, have a fiduciary relationship
with any Lender (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). None of Agent, its Affiliates nor any of their respective directors,
officers, employees or agents shall be liable to any Lender for any action taken or omitted to be
taken by it or them under this Agreement or any document executed pursuant hereto, or in connection
herewith or therewith with the consent or at the request of the Majority Lenders (or all of the
Lenders for those acts requiring consent of all of the Lenders) (except for its or their own
willful misconduct or gross negligence), nor be responsible for or have any duties to ascertain,
inquire into or verify (a) any recitals or warranties made by the Credit Parties or any Affiliate
of the Credit Parties, or any officer thereof contained herein or therein, (b) the effectiveness,
enforceability, validity or due execution of this Agreement or any document executed pursuant
hereto or any security thereunder, (c) the performance by the Credit Parties of their respective
obligations hereunder or thereunder, or (d) the satisfaction of any condition hereunder or
thereunder, including without limitation in connection with the making of



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any Advance or the
issuance of any Letter of Credit. Agent and its Affiliates shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable, telegraph, telex,
facsimile transmission or oral communication) believed by it to be genuine and correct and to have
been sent or given by or on behalf of a proper person. Agent may treat the payee of any Note as the
holder thereof. Agent may employ agents and may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to the Lenders (except as to
money or property received by them or their authorized agents), for the negligence or misconduct of
any such agent selected by it with reasonable care or for any action taken or omitted to be taken
by it in good faith in accordance with the advice of such counsel, accountants or experts.



     12.4 Successor Agent. Agent may resign as such at any time upon at least thirty (30) days prior notice to
Borrower and each of the Lenders. If Agent at any time shall resign or if the office of Agent shall
become vacant for any other reason, Majority Lenders shall, by written instrument, appoint
successor agent(s) (“Successor Agent”) satisfactory to such Majority Lenders and, so long as no
Default or Event of Default has occurred and is continuing, to Borrower (which approval shall not
be unreasonably withheld or delayed); provided, however that any such successor Agent shall be a
bank or a trust company or other financial institution which maintains an office in the United
States, or a commercial bank organized under the laws of the United States or any state thereof, or
any Affiliate of such bank or trust company or other financial institution which is engaged in the
banking business, and shall have a combined capital and surplus of at least $500,000,000. Such
Successor Agent shall thereupon become the Agent hereunder, as applicable, and Agent shall deliver
or cause to be delivered to any successor agent such documents of transfer and assignment as such
Successor Agent may reasonably request. If a Successor Agent is not so appointed or does not accept
such appointment before the resigning Agent’s resignation becomes effective, the resigning Agent
may appoint a temporary successor to act until such appointment by the Majority Lenders and, if
applicable, Borrower, is made and accepted, or if no such temporary successor is appointed as
provided above by the resigning Agent, the Majority Lenders shall thereafter perform all of the
duties of the resigning Agent hereunder until such appointment by the Majority Lenders and, if
applicable, Borrower, is made and accepted. Such Successor Agent shall succeed to all of the rights
and obligations of the resigning Agent as if originally named. The resigning Agent shall duly
assign, transfer and
deliver to such Successor Agent all moneys at the time held by the resigning Agent hereunder
after deducting therefrom its expenses for which it is entitled to be reimbursed hereunder. Upon
such succession of any such Successor Agent, the resigning Agent shall be discharged from its
duties and obligations, in its capacity as Agent hereunder, except for its gross negligence or
willful misconduct arising prior to its resignation hereunder, and the provisions of this Article
12 shall continue in effect for the benefit of the resigning Agent in respect of any actions taken
or omitted to be taken by it while it was acting as Agent.



     12.5 Credit Decisions. Each Lender acknowledges that it has, independently of Agent and each other Lender and
based on the financial statements of Borrower and such other documents, information and
investigations as it has deemed appropriate, made its own credit decision to extend credit
hereunder from time to time. Each Lender also acknowledges that it will, independently of Agent and
each other Lender and based on such other documents, information and investigations as it shall
deem appropriate at any time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges



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available to it under this Agreement, any
Loan Document or any other document executed pursuant hereto.



     12.6 Authority of Agent to Enforce This Agreement. Each Lender, subject to the terms and conditions of this Agreement, grants the Agent full
power and authority as attorney-in-fact to institute and maintain actions, suits or proceedings for
the collection and enforcement of any Indebtedness outstanding under this Agreement or any other
Loan Document and to file such proofs of debt or other documents as may be necessary to have the
claims of the Lenders allowed in any proceeding relative to any Credit Party, or their respective
creditors or affecting their respective properties, and to take such other actions which Agent
considers to be necessary or desirable for the protection, collection and enforcement of the Notes,
this Agreement or the other Loan Documents.



     12.7 Indemnification of Agent. The Lenders agree (which agreement shall survive the expiration or termination of this
Agreement) to indemnify the Agent and its Affiliates (to the extent not reimbursed by Borrower, but
without limiting any obligation of Borrower to make such reimbursement), ratably according to their
respective Weighted Percentages, from and against any and all claims, damages, losses, liabilities,
costs or expenses of any kind or nature whatsoever (including, without limitation, reasonable fees
and expenses of house and outside counsel) which may be imposed on, incurred by, or asserted
against the Agent and its Affiliates in any way relating to or arising out of this Agreement, any
of the other Loan Documents or the transactions contemplated hereby or any action taken or omitted
by the Agent and its Affiliates under this Agreement or any of the Loan Documents; provided,
however, that no Lender shall be liable for any portion of such claims, damages, losses,
liabilities, costs or expenses resulting from the Agent’s or its Affiliate’s gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Agent
and its Affiliates promptly upon demand for its ratable share of any reasonable out-of-pocket
expenses (including, without limitation, reasonable fees and expenses of house and outside counsel)
incurred by the Agent and its Affiliates 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 of the other Loan Documents, to the extent
that the Agent and its Affiliates are not reimbursed for such expenses by Borrower, but without
limiting the obligation of Borrower to make such reimbursement. Each Lender agrees to reimburse the
Agent and its Affiliates promptly upon demand for its ratable share of any amounts owing to the
Agent and its Affiliates by the Lenders pursuant to this Section, provided that, if the Agent or
its Affiliates are subsequently reimbursed by Borrower for such amounts, they shall refund to the
Lenders on a pro rata basis the amount of any excess reimbursement. If the indemnity furnished to
the Agent and its Affiliates under this Section shall become impaired as determined in the Agent’s
reasonable judgment or Agent shall elect in its sole discretion to have such indemnity confirmed by
the Lenders (as to specific matters or otherwise), Agent shall give notice thereof to each Lender
and, until such additional indemnity is provided or such existing indemnity is confirmed, the Agent
may cease, or not commence, to take any action. Any amounts paid by the Lenders hereunder to the
Agent or its Affiliates shall be deemed to constitute part of the Indebtedness hereunder.



     12.8 Knowledge of Default. It is expressly understood and agreed that the Agent shall be entitled to assume that no
Default or Event of Default has occurred and is continuing, unless



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the officers of the Agent
immediately responsible for matters concerning this Agreement shall have received a written notice
from a Lender or a Borrower specifying such Default or Event of Default and stating that such
notice is a “notice of default”. Upon receiving such a notice, the Agent shall promptly notify each
Lender of such Default or Event of Default and provide each Lender with a copy of such notice and
shall endeavor to provide such notice to the Lenders within three (3) Business Days (but without
any liability whatsoever in the event of its failure to do so). The Agent shall also furnish the
Lenders, promptly upon receipt, with copies of all other notices or other information required to
be provided by Borrower hereunder.



     12.9 Agent’s Authorization; Action by Lenders. Except as otherwise expressly provided herein, whenever the Agent is authorized and
empowered hereunder on behalf of the Lenders to give any approval or consent, or to make any
request, or to take any other action on behalf of the Lenders (including without limitation the
exercise of any right or remedy hereunder or under the other Loan Documents), the Agent shall be
required to give such approval or consent, or to make such request or to take such other action
only when so requested in writing by the Majority Lenders or the Lenders, as applicable hereunder.
Action that may be taken by the Majority Lenders, any other specified Percentage of the Lenders or
all of the Lenders, as the case may be (as provided for hereunder) may be taken (i) pursuant to a
vote of the requisite percentages of the Lenders as required hereunder at a meeting (which may be
held by telephone conference call), provided that Agent exercises good faith, diligent efforts to
give all of the Lenders reasonable advance notice of the meeting, or (ii) pursuant to the written
consent of the requisite percentages of the Lenders as required hereunder, provided that all of the
Lenders are given reasonable advance notice of the requests for such consent.



     12.10 Enforcement Actions by the Agent. Except as otherwise expressly provided under this Agreement or in any of the other Loan
Documents and subject to the terms hereof, Agent will take such action, assert such rights and
pursue such remedies under this Agreement and the other Loan Documents as the Majority Lenders or
all of the Lenders, as the case may be (as provided for hereunder), shall direct; provided,
however, that the Agent shall not be required to act or omit to act if, in the reasonable judgment
of the Agent, such action or omission may expose the Agent to personal liability for which Agent
has not been satisfactorily indemnified hereunder or is contrary to this Agreement, any of the Loan
Documents or applicable law. Except as expressly provided above or elsewhere in this Agreement or
the other Loan Documents, no Lender (other than the Agent, acting in its capacity as agent) shall
be entitled to take any enforcement action of any kind under this Agreement or any of the other
Loan Documents.



     12.11 Collateral Matters.



     (a) The Agent is authorized on behalf of all the Lenders, without the necessity of any notice
to or further consent from the Lenders, from time to time to take any action with respect to any
Collateral or the Collateral Documents which may be necessary to perfect and maintain a perfected
security interest in and Liens upon the Collateral granted pursuant to the Loan Documents.



     (b) The Lenders irrevocably authorize the Agent, in its reasonable discretion, to the full
extent set forth in the post-amble to Section 13.10 hereof, (1) to release or terminate any



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Lien
granted to or held by the Agent upon any Collateral (a) upon termination of the Revolving Credit
Aggregate Commitment and payment in full of all Indebtedness payable under this Agreement and under
any other Loan Document; (b) constituting property (including, without limitation, Equity Interests
in any Person) sold or to be sold or disposed of as part of or in connection with any disposition
(whether by sale, by merger or by any other form of transaction and including the property of any
Subsidiary that is disposed of as permitted hereby) permitted in accordance with the terms of this
Agreement; (c) constituting property in which a Credit Party owned no interest at the time the Lien
was granted or at any time thereafter; or (d) if approved, authorized or ratified in writing by the
Majority Lenders, or all the Lenders, as the case may be, as provided in Section 13.10; (2) to
subordinate the Lien granted to or held by Agent on any Collateral to any other holder of a Lien on
such Collateral which is permitted by Section 8.2(b) hereof; and (3) if all of the Equity Interests
held by the Credit Parties in any Person are sold or otherwise transferred to any transferee other
than Borrower or a Subsidiary of Borrower as part of or in connection with any disposition (whether
by sale, by merger or by any other form of transaction) permitted in accordance with the terms of
this Agreement, to release such Person from all of its obligations under the Loan Documents
(including, without limitation, under any Guaranty). Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent’s authority to release particular types or items of
Collateral pursuant to this Section 12.11(b).



     12.12 Agents in their Individual Capacities. Comerica Bank and its Affiliates, successors and assigns shall each have the same
rights and powers hereunder as any other Lender and may exercise or refrain from exercising
the same as though such Lender were not the Agent. Comerica Bank and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to, and generally engage
in any kind of banking, trust, financial advisory or other business with the Credit Parties as if
such Lender were not acting as the Agent hereunder, and may accept fees and other consideration
therefor without having to account for the same to the Lenders.



     12.13 Agent’s Fees. Until the Indebtedness has been repaid and discharged in full and no commitment to extend
any credit hereunder is outstanding, Borrower shall pay to the Agent, as applicable, any agency or
other fee(s) set forth (or to be set forth from time to time) in the applicable Fee Letter on the
terms set forth therein. The agency fees referred to in this Section 12.13 shall not be refundable
under any circumstances.



     12.14 Documentation Agent or other Titles. Any Lender identified on the facing page or signature page of this Agreement or in any
amendment hereto or as designated with consent of the Agent in any assignment agreement as Lead
Arranger, Documentation Agent, Syndications Agent or any similar titles, shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement as a result of such title
other than those applicable to all Lenders as such. Without limiting the foregoing, the Lenders so
identified shall not have or be deemed to have any fiduciary relationship with any Lender as a
result of such title. Each Lender acknowledges that it has not relied, and will not rely, on the
Lender so identified in deciding to enter into this Agreement or in taking or not taking action
hereunder.



     12.15 No Reliance on Agent’s Customer Identification Program.



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     (a) Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates,
participants or assignees, may relay on the Agent to carry out such Lender’s, Affiliate’s,
participant’s or assignee’s customer identification program, or other obligations required or
imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”),
or any other Anti-Terrorism Law, including any programs involving any of the following items
relating to or in connection with Borrower or any of its Subsidiaries, any of their respective
Affiliates or agents, the Loan Documents or the transactions hereunder: (i) any identify
verification procedures, (ii) any record keeping, (iii) any comparisons with government lists, (iv)
any customer notices or (v) any other procedures required under the CIP Regulations or such other
laws.



     (b) Each Lender or assignee or participant of a Lender that is not organized under the laws of
the United States or a state thereof (and is not excepted from the certification requirement
contained in Section 313 of the USA Patriot Act and the applicable regulations because it is both
(i) an affiliate of a depository institution or foreign bank that maintains a physical presence in
the United States or foreign country, and (ii) subject to provision by a
banking authority regulating such affiliated depository institution or foreign bank) shall
deliver to the Administrative Agent the certification, or, if applicable, recertification,
certifying that such Lender is not a “shell” and certifying to other matters as required by Section
313 of the USA Patriot Act and the applicable regulations: (x) within 10 days after the Effective
Date, and (y) at such other times as are required under the USA Patriot Act.



13. MISCELLANEOUS.




     13.1 Accounting Principles. Where the character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation is required to be
made for the purposes of this Agreement, it shall be done, unless otherwise specified herein, in
accordance with GAAP.



     13.2 Consent to Jurisdiction. The Borrower, the Agent and Lenders hereby irrevocably submit to the non-exclusive
jurisdiction of any United States Federal Court or California state court sitting in the County of
Santa Clara, California in any action or proceeding arising out of or relating to this Agreement or
any of the Loan Documents and the Borrower, Agent and Lenders hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined in any such United
States Federal Court or California state court. Each Borrower irrevocably consents to the service
of any and all process in any such action or proceeding brought in any court in or of the State of
California by the delivery of copies of such process to it at the applicable addresses specified on
the signature page hereto or by certified mail directed to such address or such other address as
may be designated by it in a notice to the other parties that complies as to delivery with the
terms of Section 13.6. Nothing in this Section shall affect the right of the Lenders and the Agent
to serve process in any other manner permitted by law or limit the right of the Lenders or the
Agent (or any of them) to bring any such action or proceeding against any Credit Party or any of
their property in the courts with subject matter jurisdiction of any other jurisdiction. Borrower
irrevocably waives any objection to the laying of venue of any such suit or proceeding in the above
described courts.



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     13.3 Law of California. This Agreement, the Notes and, except where otherwise expressly specified therein to be
governed by local law, the other Loan Documents shall be governed by and construed and enforced in
accordance with the laws of the State of California (without regard to its conflict of laws
provisions). Whenever possible each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.



     13.4 Interest. In the event the obligation of Borrower to pay interest on the principal balance of the
Notes or on any other amounts outstanding hereunder or under the other Loan Documents is or
becomes in excess of the maximum interest rate which Borrower is permitted by law to contract or
agree to pay, giving due consideration to the execution date of this Agreement, then, in that
event, the rate of interest applicable thereto with respect to such Lender’s applicable Percentages
shall be deemed to be immediately reduced to such maximum rate and all previous payments in excess
of the maximum rate shall be deemed to have been payments in reduction of principal and not of
interest.



     13.5 Closing Costs and Other Costs; Indemnification.



     (a) Borrower shall pay or reimburse (a) Agent and its Affiliates for payment of, on demand,
all reasonable costs and expenses, including, by way of description and not limitation, reasonable
in-house and outside attorney fees and advances, appraisal and accounting fees, lien search fees,
and required travel costs, incurred by Agent and its Affiliates in connection with the commitment,
consummation and closing of the loans contemplated hereby, or in connection with the administration
or enforcement of this Agreement or the other Loan Documents (including the obtaining of legal
advice regarding the rights and responsibilities of the parties hereto) or any refinancing or
restructuring of the loans or Advances provided under this Agreement or the other Loan Documents,
or any amendment or modification thereof requested by Borrower, and (b) Agent and its Affiliates
and each of the Lenders, as the case may be, for all stamp and other taxes and duties payable or
determined to be payable in connection with the execution, delivery, filing or recording of this
Agreement and the other Loan Documents and the consummation of the transactions contemplated
hereby, and any and all liabilities with respect to or resulting from any delay in paying or
omitting to pay such taxes or duties. Furthermore, all reasonable costs and expenses, including
without limitation attorney fees, incurred by Agent and its Affiliates and, after the occurrence
and during the continuance of an Event of Default, by the Lenders in revising, preserving,
protecting, exercising or enforcing any of its or any of the Lenders’ rights against Borrower or
any other Credit Party, or otherwise incurred by Agent and its Affiliates and the Lenders in
connection with any Event of Default or the enforcement of the loans (whether incurred through
negotiations, legal proceedings or otherwise), including by way of description and not limitation,
such charges in any court or bankruptcy proceedings or arising out of any claim or action by any
person against Agent, its Affiliates, or any Lender which would not have been asserted were it not
for Agent’s or such Affiliate’s or Lender’s relationship with Borrower hereunder or otherwise,
shall also be paid by Borrower. All of said amounts required to be paid by Borrower hereunder and
not paid forthwith upon demand, as aforesaid, shall bear interest, from the date incurred to the
date payment is received by Agent, at the Prime-based Rate, plus two percent (2%) but in no event
in excess of the maximum interest rate permitted by applicable law.



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     (b) Borrower agrees to indemnify and hold Agent and each of the Lenders (and their respective
Affiliates) harmless from all loss, cost, damage, liability or expenses, including reasonable house
and outside attorneys’ fees and disbursements (but without duplication of such fees and
disbursements for the same services), incurred by Agent and each of the Lenders by reason of an
Event of Default, or enforcing the obligations of any Credit Party under this Agreement or any of
the other Loan Documents, as applicable, or in the prosecution or defense of any action or
proceeding concerning any matter growing out of or connected with this Agreement or any of the Loan
Documents, excluding, however, any loss, cost, damage, liability
or expenses to the extent arising as a result of the gross negligence or willful misconduct of
the party seeking to be indemnified under this Section 13.5(b), provided that, the Borrower shall
be obligated to reimburse Agent and the Lenders for only a single financial consultant selected by
Agent in consultation with the Lenders.



     (c) The Borrower agrees to defend, indemnify and hold harmless Agent and each Lender (and
their respective Affiliates), and their respective employees, agents, officers and directors from
and against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs
or expenses of whatever kind or nature (including without limitation, reasonable attorneys and
consultants fees, investigation and laboratory fees, environmental studies required by Agent or any
Lender in connection with the violation of Hazardous Material Laws), court costs and litigation
expenses, arising out of or related to (i) the presence, use, disposal, release or threatened
release of any Hazardous Materials on, from or affecting any premises owned or occupied by any
Credit Party in violation of or the non-compliance with applicable Hazardous Material Laws, (ii)
any personal injury (including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Materials, (iii) any lawsuit or other proceeding brought or
threatened, settlement reached or governmental order or decree relating to such Hazardous
Materials, and/or (iv) complying or coming into compliance with all Hazardous Material Laws
(including the cost of any remediation or monitoring required in connection therewith) or any other
Requirement of Law; provided, however, that the Borrower shall have no obligations under this
Section 13.5(c) with respect to claims, demands, penalties, fines, liabilities, settlements,
damages, costs or expenses to the extent arising as a result of the gross negligence or willful
misconduct of the Agent or such Lender, as the case may be. The obligations of Borrower under this
Section 13.5(c) shall be in addition to any and all other obligations and liabilities Borrower may
have to Agent or any of the Lenders at common law or pursuant to any other agreement.



     13.6 Notices.




	 	(a)	 	Except as expressly provided otherwise in this Agreement (and
except as provided in clause (b) below), all notices and other communications
provided to any party hereto under this Agreement or any other Loan Document
shall be in writing and shall be given by personal delivery, by mail, by
reputable overnight courier or by facsimile and addressed or delivered to it at
its address set forth on Schedule 13.6 to the Disclosure Letter or at such
other address as may be designated by such party in a notice to the other
parties that complies as to delivery with the terms of




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	 	 	 	this Section 13.6 or
posted to an E-System set up by or at the direction of Agent (as set forth
below). Any notice, if personally delivered or if mailed and properly addressed
with postage prepaid and sent by registered or certified mail, shall be deemed
given when received or when delivery is refused; any notice, if given to a
reputable overnight courier and properly addressed, shall be deemed given two
(2) Business Days after the date on which it was sent, unless it is actually
received sooner by the named addressee; and any notice, if transmitted by
facsimile, shall be deemed given when received. The Agent may, but, except as
specifically provided herein, shall not be required to, take any action on the
basis of any notice
given to it by telephone, but the giver of any such notice shall promptly
confirm such notice in writing, by facsimile, and such notice will not be
deemed to have been received until such confirmation is deemed received in
accordance with the provisions of this Section set forth above. If such
telephonic notice conflicts with any such confirmation, the terms of such
telephonic notice shall control. Any notice given by the Agent or any Lender
to the Borrower shall be deemed to be a notice to all of the Credit Parties.






	 	(b)	 	Notices and other communications provided to the Agent and the
Lenders party hereto under this Agreement or any other Loan Document may be
delivered or furnished by electronic communication (including email and
Internet or intranet websites) pursuant to procedures approved by the Agent.
The Agent or the Borrower may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications (including
email and any E-System) pursuant to procedures approved by it. Unless
otherwise agreed to in a writing by and among the parties to a particular
communication, (i) notices and other communications sent to an email address
shall be deemed received upon the sender’s receipt of an acknowledgment from
the intended recipient (such as by the “return receipt requested” function,
return email, or other written acknowledgment) and (ii) notices and other
communications posted to any E-System shall be deemed received upon the deemed
receipt by the intended recipient at its email address as described in the
foregoing clause (i) of notification that such notice or other communication is
available and identifying the website address therefore.





     13.7 Further Action. Borrower, from time to time, upon written request of Agent will make, execute, acknowledge
and deliver or cause to be made, executed, acknowledged and delivered, all such further and
additional instruments, and take all such further action as may reasonably be required to carry out
the intent and purpose of this Agreement or the Loan Documents, and to provide for Advances under
and payment of the Notes, according to the intent and purpose herein and therein expressed.



     13.8 Successors and Assigns; Participations; Assignments.



     (a) This Agreement shall be binding upon and shall inure to the benefit of the



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Borrower and
the Lenders and their respective successors and assigns.



     (b) The foregoing shall not authorize any assignment by Borrower of its rights or duties
hereunder, and, except as otherwise provided herein, no such assignment shall be made (or be
effective) without the prior written approval of the Lenders.



     (c) No Lenders may at any time assign or grant participations in such Lender’s rights and
obligations hereunder and under the other Loan Documents except (i) by way of assignment
to any Eligible Assignee in accordance with clause (d) of this Section, (ii) by way of a
participation in accordance with the provisions of clause (e) of this Section or (iii) by way of a
pledge or assignment of a security interest subject to the restrictions of clause (f) of this
Section (and any other attempted assignment or transfer by any Lender shall be deemed to be null
and void).



     (d) Each assignment by a Lender of all or any portion of its rights and obligations hereunder
and under the other Loan Documents, shall be subject to the following terms and conditions:




	 	(i)	 	each such assignment shall be made on a pro
rata basis, and shall be in a minimum amount of the lesser of (x) Five
Million Dollars ($5,000,000) or such lesser amount as the Agent shall
agree and (y) the entire remaining amount of assigning Lender’s
aggregate interest in the Revolving Credit (and participations in any
outstanding Letters of Credit) and the Term Loan; provided however
that, after giving effect to such assignment, in no event shall the
entire remaining amount (if any) of assigning Lender’s aggregate
interest in the Revolving Credit (and participations in any outstanding
Letters of Credit) and the Term Loan be less than $5,000,000; and






	 	(ii)	 	the parties to any assignment shall execute and
deliver to Agent an Assignment Agreement substantially (as determined
by Agent) in the form annexed hereto as Exhibit H (with appropriate
insertions acceptable to Agent), together with a processing and
recordation fee in the amount, if any, required as set forth in the
Assignment Agreement (provided however that such Lender need not
deliver an Assignment Agreement in connection with assignments to such
Lender’s Affiliates or to a Federal Reserve Bank).




Until the Assignment Agreement becomes effective in accordance with its terms, and Agent has
confirmed that the assignment satisfies the requirements of this Section 13.8, the Borrower and the
Agent shall be entitled to continue to deal solely and directly with the assigning Lender in
connection with the interest so assigned. From and after the effective date of each Assignment
Agreement that satisfies the requirements of this Section 13.8, the assignee thereunder shall be
deemed to be a party to this Agreement, such assignee shall have the rights and obligations of a
Lender under this Agreement and the other Loan Documents (including without limitation the right to
receive fees payable hereunder in respect of the period following such assignment) and


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 the
assigning Lender shall relinquish its rights and be released from its obligations under this
Agreement and the other Loan Documents.




     Upon request, Borrower shall execute and deliver to the Agent, new Note(s) payable to the
order of the assignee in an amount equal to the amount assigned to the assigning Lender pursuant to
such Assignment Agreement, and with respect to the portion of the Indebtedness retained by the
assigning Lender, to the extent applicable, new Note(s) payable to the order of the assigning
Lender in an amount equal to the amount retained by such Lender hereunder. The
Agent, the Lenders and the Borrower acknowledges and agrees that any such new Note(s) shall be
given in renewal and replacement of the Notes issued to the assigning lender prior to such
assignment and shall not effect or constitute a novation or discharge of the Indebtedness evidenced
by such prior Note, and each such new Note may contain a provision confirming such agreement.



     (e) The Borrower and the Agent acknowledge that each of the Lenders may at any time and from
time to time, subject to the terms and conditions hereof, grant participations in such Lender’s
rights and obligations hereunder (on a pro rata basis only) and under the other Loan Documents to
any Person (other than a natural person or to Borrower or any of Borrower’s Affiliates or
Subsidiaries); provided that any participation permitted hereunder shall comply with all applicable
laws and shall be subject to a participation agreement that incorporates the following
restrictions:




	 	(i)	 	such Lender shall remain the holder of its
Notes hereunder (if such Notes are issued), notwithstanding any such
participation;






	 	(ii)	 	a participant shall not reassign or transfer,
or grant any sub-participations in its participation interest hereunder
or any part thereof; and






	 	(iii)	 	such Lender shall retain the sole right and
responsibility to enforce the obligations of the Credit Parties
relating to the Notes and the other Loan Documents, including, without
limitation, the right to proceed against any Guarantors, or cause the
Agent to do so (subject to the terms and conditions hereof), and the
right to approve any amendment, modification or waiver of any provision
of this Agreement without the consent of the participant (unless such
participant is an Affiliate of such Lender), except for those matters
covered by Section 13.10(a) through (e) hereof (provided that a
participant may exercise approval rights over such matters only on an
indirect basis, acting through such Lender and the Credit Parties,
Agent and the other Lenders may continue to deal directly with such
Lender in connection with such Lender’s rights and duties hereunder).
Notwithstanding the foregoing, however, in the case of any
participation granted by any Lender hereunder, the participant shall
not have any rights under this Agreement or any of the other Loan
Documents against the Agent, any other Lender or any Credit Party;
provided, however that the participant may




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	 	 	 	have rights against such
Lender in respect of such participation as may be set forth in the
applicable participation agreement and all amounts payable by the
Credit Parties hereunder shall be determined as if such Lender had not
sold such participation. Each such participant shall be entitled to
the benefits of Article 11 of this Agreement to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant
to clause (d) of this Section, provided that no participant shall be
entitled to receive
any greater amount pursuant to such the provisions of Article 11 than
the issuing Lender would have been entitled to receive in respect of
the amount of the participation transferred by such issuing Lender to
such participant had no such transfer occurred and each such
participant shall also be entitled to the benefits of Section 9.6
hereof as though it were a Lender, provided that such participant
agrees to be subject to Section 10.3 hereof as though it were a
Lender.





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



     (g) The Agent shall maintain at its principal office a copy of each Assignment Agreement
delivered to it and a register (the “Register”) for the recordation of the names and addresses of
the Lenders, the Percentages of such Lenders and the principal amount of each type of Advance owing
to each such Lender from time to time. The entries in the Register shall be conclusive evidence,
absent manifest error, and the Borrower, the Agent, and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Advances recorded therein for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower or any Lender upon
reasonable notice to the Agent and a copy of such information shall be provided to any such party
on their prior written request. The Agent shall give prompt written notice to the Borrower of the
making of any entry in the Register or any change in such entry.



     (h) Borrower authorizes each Lender to disclose to any prospective assignee or participant
which has satisfied the requirements hereunder, any and all financial information in such Lender’s
possession concerning the Credit Parties which has been delivered to such Lender pursuant to this
Agreement, provided that each such prospective assignee or participant shall execute a
confidentiality agreement consistent with the terms of Section 13.11 hereof or shall otherwise
agree to be bound by the terms thereof.



     (i) Nothing in this Agreement, the Notes or the other Loan Documents, expressed or implied, is
intended to or shall confer on any Person other than the respective parties hereto and thereto and
their successors and assignees and participants permitted hereunder and thereunder any benefit or
any legal or equitable right, remedy or other claim under this Agreement, the Notes or the other
Loan Documents.



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     13.9 Counterparts. This Agreement may be executed in several counterparts, and each executed copy shall
constitute an original instrument, but such counterparts shall together constitute but one and the
same instrument.



     13.10 Amendment and Waiver.



     (a) No amendment or waiver of any provision of this Agreement or any other Loan Document, nor
consent to any departure by any Credit Party therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Agent and the Majority Lenders (or by the Agent at the
written request of the Majority Lenders) or, if this Agreement expressly so requires with respect
to the subject matter thereof, by all Lenders (and, with respect to any amendments to this
Agreement or the other Loan Documents, by any Credit Party or the Guarantors that are signatories
thereto), and then such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by the Lender or Lenders affected thereby, do any of
the following: (a) increase the stated amount of such Lender’s commitment hereunder, (b) reduce the
principal of, or interest on, any outstanding Indebtedness or any Fees or other amounts payable
hereunder, (c) postpone any date fixed for any payment of principal of, or interest on, any
outstanding Indebtedness or any Fees or other amounts payable hereunder, (d) except as expressly
permitted hereunder or under the Collateral Documents, release all or substantially all of the
Collateral (provided that neither Agent nor any Lender shall be prohibited thereby from proposing
or participating in a consensual or nonconsensual debtor-in-possession or similar financing), or
release any material guaranty provided by any Person in favor of Agent and the Lenders, provided
however that Agent shall be entitled, without notice to or any further action or consent of the
Lenders, to release any Collateral which any Credit Party is permitted to sell, assign or otherwise
transfer in compliance with this Agreement or the other Loan Documents or release any guaranty to
the extent expressly permitted in this Agreement or any of the other Loan Documents (whether in
connection with the sale, transfer or other disposition of the applicable Guarantor or otherwise),
(e) terminate or modify any indemnity provided to the Lenders hereunder or under the other Loan
Documents, except as shall be otherwise expressly provided in this Agreement or any other Loan
Document, or (f) change the definitions of “Revolving Credit Percentage”, “Term Loan Percentage”,
“Weighted Percentage”, “Interest Periods”, “Majority Lenders”, “Majority Revolving Credit Lenders”,
“Majority Term Loan Lenders,” Sections 10.2 or 10.3 hereof or this Section 13.10; provided,
further, that the Revolving Credit Maturity Date may be postponed or extended, only with
the consent of all of the Revolving Credit Lenders; the Term Loan Maturity Date may be postponed or
extended only with the consent of all the Term Loan Lenders; and provided further, that no
amendment, waiver or consent shall, unless in a writing signed by the Swing Line Lender, do any of
the following: (x) reduce the principal of, or interest on, the Swing Line Note or (y) postpone any
date fixed for any payment of principal of, or interest on, the Swing Line Note and
provided further, that no amendment, waiver or consent shall, unless in a writing
signed by Issuing Lender affect the rights or duties of Issuing Lender under this Agreement or any
of the other Loan Documents and no amendment, waiver, or consent shall, unless in a writing signed
by the Agent affect the rights or duties of the Agent under this Agreement or any other Loan
Document. All references in this Agreement to “Lenders” or “the Lenders” shall refer to all
Lenders, unless expressly stated to refer to Majority Lenders (or the like).



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     (b) The Agent shall, upon the written request of the Borrower, execute and deliver to the
Credit Parties such documents as may be necessary to evidence (1) the release or subordination of
any Lien granted to or held by the Agent upon any Collateral: (a) upon termination of the Revolving
Credit Aggregate Commitment and payment in full of all Indebtedness payable under this Agreement
and under any other Loan Document; (b) which constitutes property (including, without limitation,
Equity Interests in any Person) sold or to be
sold or disposed of as part of or in connection with any disposition (whether by sale, by
merger or by any other form of transaction and including the property of any Subsidiary that is
disposed of as permitted hereby) permitted in accordance with the terms of this Agreement; (c)
which constitutes property in which a Credit Party owned no interest at the time the Lien was
granted or at any time thereafter; or (d) if approved, authorized or ratified in writing by the
Majority Lenders, or all the Lenders, as the case may be, as provided in this Section 13.10; or (2)
the release of any Person from its obligations under the Loan Documents (including without
limitation the Guaranty) if all of the Equity Interests of such Person that were held by a Credit
Party are sold or otherwise transferred to any transferee other than Borrower or a Subsidiary of
Borrower as part of or in connection with any disposition (whether by sale, by merger or by any
other form of transaction) permitted in accordance with the terms of this Agreement;
provided that (i) Agent shall not be required to execute any such release or subordination
agreement under clauses (1) or (2) above on terms which, in the Agent’s opinion, would expose the
Agent to liability or create any obligation or entail any consequence other than the release of
such Liens without recourse or warranty or such release shall not in any manner discharge, affect
or impair the Indebtedness or any Liens upon any Collateral retained by any Credit Party, including
(without limitation) the proceeds of the sale or other disposition, all of which shall constitute
and remain part of the Collateral.



     13.11 Confidentiality. Each Lender agrees that it will not disclose without the prior consent of the Borrower
(other than to its employees, its Subsidiaries, another Lender, an Affiliate of a Lender or to its
auditors or counsel) any information with respect to the Credit Parties which is furnished pursuant
to this Agreement or any of the other Loan Documents; provided that any Lender may disclose any
such information (a) as has become generally available to the public or has been lawfully obtained
by such Lender from any third party under no duty of confidentiality to any Credit Party, (b) as
may be required or appropriate in any report, statement or testimony submitted to, or in respect to
any inquiry, by, any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender, including the Board of Governors of the Federal Reserve System of
the United States, the Office of the Comptroller of the Currency or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation, ruling or other requirement of
law applicable to such Lender, and (e) to any prospective assignee or participant in accordance
with Section 13.8(f) hereof.



     13.12 Substitution of Lenders. If (a) any Lender has failed to fund its Revolving Credit Percentage of any Revolving
Credit Advance, or to fund a Revolving Credit Advance to repay a Swing Line Advance or any
Reimbursement Obligations, (b) the obligation of any Lender to make Eurodollar-based Advances has
been suspended pursuant to Section 11.3 or 11.4, (c) any Lender has demanded compensation under
Section 3.4(c), 11.5 or 11.6 or (d) any Lender has not



107









 







approved an amendment, waiver or other
modification of this Agreement, if such amendment or waiver has been approved by the Majority
Lenders and the consent of such Lender is required (in each case, an “Affected Lender”), then the
Agent or the Borrower shall have the right to make written
demand on the Affected Lender (with a copy to the Borrower in the case of a demand by the
Agent or with a copy to the Agent in the case of a demand by the Borrower) to assign and the
Affected Lender shall assign, to one or more financial institutions that comply with the provisions
of Section 13.8 hereof (the “Purchasing Lender” or “Purchasing Lenders”) to purchase the Advances
of the Revolving Credit, Swing Line and/or the Term Loan, as the case may be, of such Affected
Lender (including, without limitation, its participating interests in outstanding Swing Line
Advances and Letters of Credit) and assume the commitment of the Affected Lender to extend credit
under the Revolving Credit (including without limitation its obligation to purchase participations
interest in Swing Line Advances and Letters of Credit) under this Agreement. The Affected Lender
shall be obligated to sell its Advances of the Revolving Credit, Swing Line and/or the Term Loan,
as the case may be, and assign its commitment to extend credit under the Revolving Credit
(including without limitation its obligations to purchase participations in Swing Line Advances and
Letters of Credit) to such Purchasing Lender or Purchasing Lenders within ten (10) days after
receiving notice from the Borrower requiring it to do so, at an aggregate price equal to the
outstanding principal amount thereof, plus unpaid interest accrued thereon up to but excluding the
date of the sale. In connection with any such sale, and as a condition thereof, the Borrower shall
pay to the Affected Lender all fees accrued for its account hereunder to but excluding the date of
such sale, plus, if demanded by the Affected Lender within ten (10) Business Days after such sale,
(i) the amount of any compensation which would be due to the Affected Lender under Section 11.1 if
the Borrower had prepaid the outstanding Eurodollar-based Advances of the Affected Lender on the
date of such sale and (ii) any additional compensation accrued for its account under Sections
3.4(c), 11.5 and 11.6 to but excluding said date. Upon such sale, the Purchasing Lender or
Purchasing Lenders shall assume the Affected Lender’s commitment, and the Affected Lender shall be
released from its obligations hereunder to a corresponding extent. If any Purchasing Lender is not
already one of the Lenders, the Affected Lender, as assignor, such Purchasing Lender, as assignee,
the Borrower and the Agent, shall enter into an Assignment Agreement pursuant to Section 13.8
hereof, whereupon such Purchasing Lender shall be a Lender party to this Agreement, shall be deemed
to be an assignee hereunder and shall have all the rights and obligations of a Lender with a
Revolving Credit Percentage equal to its ratable share of the then applicable Revolving Credit
Aggregate Commitment and the applicable Percentages of the Term Loan of the Affected Lender. In
connection with any assignment pursuant to this Section 13.12, the Borrower or the Purchasing
Lender shall pay to the Agent the administrative fee for processing such assignment referred to in
Section 13.8.



     13.13 Withholding Taxes. If any Lender is not a “united states person” within the meaning of Section 7701(a)(30) of
the Internal Revenue Code, such Lender shall promptly (but in any event prior to the initial
payment of interest hereunder or prior to its accepting any assignment under Section 13.8 hereof,
as applicable) deliver to the Agent two original executed copies of (i) Internal Revenue Service
Form W-8BEN or any successor form specifying the applicable tax treaty between the United States
and the jurisdiction of such Lender’s domicile which provides for the exemption from withholding on
interest payments to such Lender, (ii) Internal Revenue Service Form W-8ECI or any successor form
evidencing that the income to be received by such Lender hereunder is effectively connected with
the conduct of a trade or



108









 







business in the United States or (iii) other evidence satisfactory to the
Agent that such Lender is exempt from United States income tax
withholding with respect to such income; provided, however, that such Lender shall not be
required to deliver to Agent the aforesaid forms or other evidence with respect to Advances to
Borrower, if such Lender has assigned its entire interest hereunder (including its Revolving Credit
Commitment Amount, any outstanding Advances hereunder and participations in Letters of Credit
issued hereunder and any Notes issued to it by Borrower), to an Affiliate which is incorporated
under the laws of the United States or a state thereof, and so notifies the Agent. Such Lender
shall amend or supplement any such form or evidence as required to insure that it is accurate,
complete and non-misleading at all times. Promptly upon notice from the Agent of any determination
by the Internal Revenue Service that any payments previously made to such Lender hereunder were
subject to United States income tax withholding when made, such Lender shall pay to the Agent the
excess of the aggregate amount required to be withheld from such payments over the aggregate amount
actually withheld by the Agent. In addition, from time to time upon the reasonable request and the
sole expense of Borrower, each Lender and the Agent shall (to the extent it is able to do so based
upon applicable facts and circumstances), complete and provide Borrower with such forms,
certificates or other documents as may be reasonably necessary to allow Borrower, as applicable, to
make any payment under this Agreement or the other Loan Documents without any withholding for or on
the account of any tax under Section 10.1(d) hereof (or with such withholding at a reduced rate),
provided that the execution and delivery of such forms, certificates or other documents does not
adversely affect or otherwise restrict the rights and benefits (including without limitation
economic benefits) available to such Lender or the Agent, as the case may be, under this Agreement
or any of the other Loan Documents, or under or in connection with any transactions not related to
the transactions contemplated hereby.



     13.14 Taxes and Fees. Should any tax (other than as a result of a Lender’s failure to comply with Section 13.13
or a tax based upon the net income or capitalization of any Lender or the Agent by any jurisdiction
where a Lender or the Agent is or has been located), or recording or filing fee become payable in
respect of this Agreement or any of the other Loan Documents or any amendment, modification or
supplement hereof or thereof, Borrower agrees to pay the same, together with any interest or
penalties thereon arising from Borrower’s actions or omissions, and agrees to hold the Agent and
the Lenders harmless with respect thereto provided, however, that Borrower shall not be responsible
for any such interest or penalties which were incurred prior to the date that notice is given to
the Credit Parties of such tax or fees. Notwithstanding the foregoing, nothing contained in this
Section 13.14 shall affect or reduce the rights of any Lender or the Agent under Section 11.5
hereof.



     13.15 WAIVER OF JURY TRIAL. THE LENDERS, THE AGENT AND THE BORROWER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY
OF THEM. NEITHER THE LENDERS, THE AGENT NOR THE BORROWER
SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT



109









 







BE OR HAS NOT BEEN WAIVED. THESE
PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE LENDERS
AND THE AGENT OR THE BORROWER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.



     (a) In the event that the jury trial waiver contained in this Section 13.15 is not
enforceable, the parties elect to proceed as follows:



     (b) With the exception of the items specified in clause (c), below, any controversy, dispute
or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any
other Loan Document will be resolved by a reference proceeding in California in accordance with the
provisions of Section 638 et seq. of the California Code of Civil Procedure (“CCP”), or their
successor sections, which shall constitute the exclusive remedy for the resolution of any Claim,
including whether the Claim is subject to the reference proceeding. Except as otherwise provided
in the Agreement, venue for the reference proceeding will be in the state or federal court in the
county or district where venue is otherwise appropriate under applicable law (the “Court”).



     (c) The matters that shall not be subject to a reference are the following: (i) non-judicial
foreclosure of any security interests in real or personal property, (ii) exercise of self-help
remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv)
temporary, provisional or ancillary remedies (including, without limitation, writs of attachment,
writs of possession, temporary restraining orders or preliminary injunctions). This Section does
not limit the right of any party to exercise or oppose any of the rights and remedies described in
clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items
described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does
not waive the right of any party to a reference pursuant to this Section.



     (d) The referee shall be a retired judge or justice selected by mutual written agreement of
the parties. If the parties do not agree within ten (10) days of a written request to do so by any
party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the
Court (or his or her representative). A request for appointment of a referee may be heard on an ex
parte or expedited basis, and the parties agree that irreparable harm would result if ex parte
relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to
the referee selected by the Presiding Judge of the Court (or his or her representative).



     (e) The parties agree that time is of the essence in conducting the reference proceedings.
Accordingly, the referee shall be requested, subject to change in the time periods specified herein
for good cause shown, to (a) set the matter for a status and trial-setting conference within
fifteen (15) days after the date of selection of the referee, (b) if practicable, try all issues of
law or fact within one hundred twenty (120) days after the date of the conference and (c) report a
statement of decision within twenty (20) days after the matter has been submitted for decision.



     (f) The referee will have power to expand or limit the amount and duration of discovery. The
referee may set or extend discovery deadlines or cutoffs for good cause,




110












 




including a party’s failure to provide requested discovery for any reason whatsoever. Unless
otherwise ordered, no party shall be entitled to “priority” in conducting discovery, depositions
may be taken by either party upon seven (7) days written notice, and all other discovery shall be
responded to within fifteen (15) days after service. All disputes relating to discovery which
cannot be resolved by the parties shall be submitted to the referee whose decision shall be final
and binding.




     (g) Except as expressly set forth in this Section, the referee shall determine the manner in
which the reference proceeding is conducted including the time and place of hearings, the order of
presentation of evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee, except for trial,
shall be conducted without a court reporter, except that when any party so requests, a court
reporter will be used at any hearing conducted before the referee, and the referee will be provided
a courtesy copy of the transcript. The party making such a request shall have the obligation to
arrange for and pay the court reporter. Subject to the referee’s power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the court reporter at
trial.



     (h) The referee shall be required to determine all issues in accordance with existing case law
and the statutory laws of the State of California. The rules of evidence applicable to proceedings
at law in the State of California will be applicable to the reference proceeding. The referee
shall be empowered to enter equitable as well as legal relief, enter equitable orders that will be
binding on the parties and rule on any motion which would be authorized in a trial, including
without limitation motions for summary judgment or summary adjudication. The referee shall issue a
decision at the close of the reference proceeding which disposes of all claims of the parties that
are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the
Court as a judgment or an order in the same manner as if the action had been tried by the Court and
any such decision will be final, binding and conclusive. The parties reserve the right to appeal
from the final judgment or order or from any appealable decision or order entered by the referee.
The parties reserve the right to findings of fact, conclusions of laws, a written statement of
decision, and the right to move for a new trial or a different judgment, which new trial, if
granted, is also to be a reference proceeding under this provision.



     (i) If the enabling legislation which provides for appointment of a referee is repealed (and
no successor statute is enacted), any dispute between the parties that would otherwise be
determined by reference procedure will be resolved and determined by arbitration. The arbitration
will be conducted by a retired judge or Justice, in accordance with the California Arbitration Act
§1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to
discovery set forth above shall apply to any such arbitration proceeding.


THE PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE PROVISION WILL BE
DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO
CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL
BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE
OR


111









 






CLAIM BETWEEN OR AMONG THEM WHICH ARISES OUT OF OR IS RELATED TO THE AGREEMENT.




     13.16 USA Patriot Act Notice. Pursuant to Section 326 of the USA Patriot Act, the Agent and the Lenders hereby notify
the Credit Parties that if they or any of their Subsidiaries open an account, including any loan,
deposit account, treasury management account, or other extension of credit with Agent or any
Lender, the Agent or the applicable Lender will request the applicable Person’s name, tax
identification number, business address and other information necessary to identify such Person
(and may request such Person’s organizational documents or other identifying documents) to the
extent necessary for the Agent and the applicable Lender to comply with the USA Patriot Act.



     13.17 Complete Agreement; Conflicts. This Agreement, the Notes (if issued), any Requests for Revolving Credit Advance, Requests
for Swing Line Advance and Term Loan Rate Requests, and the Loan Documents contain the entire
agreement of the parties hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound by anything not
expressed in writing. In the event of any conflict between the terms of this Agreement and the
other Loan Documents, this Agreement shall govern.



     13.18 Severability. In case any one or more of the obligations of the Credit Parties under this Agreement, the
Notes or any of the other Loan Documents shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining obligations of the Credit
Parties shall not in any way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or enforceability of
the obligations of the Credit Parties under this Agreement, the Notes or any of the other Loan
Documents in any other jurisdiction.



     13.19 Table of Contents and Headings; Section References. The table of contents and the headings of the various subdivisions hereof are for
convenience of reference only and shall in no way modify or affect any of the terms or provisions
hereof and references herein to “sections,” “subsections,” “clauses,” “paragraphs,”
“subparagraphs,” “exhibits” and “schedules” shall be to sections, subsections, clauses, paragraphs,
subparagraphs, exhibits and schedules, respectively, of this Agreement unless otherwise
specifically provided herein or unless the context otherwise clearly indicates.



     13.20 Construction of Certain Provisions. If any provision of this Agreement or any of the Loan Documents refers to any action to be
taken by any Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person, whether or not
expressly specified in such provision.



     13.21 Independence of Covenants. Each covenant hereunder shall be given independent effect (subject to any exceptions stated
in such covenant) so that if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default.



112









 





     13.22 Electronic Transmissions.




	 	(a)	 	Each of the Agent, the Credit Parties, the Lenders, and each of
their Affiliates is authorized (but not required) to transmit, post or
otherwise make or communicate, in its sole discretion, Electronic Transmissions
in connection with any Loan Document and the transactions contemplated therein.
The Borrower and each other Credit Party hereby acknowledges and agrees that
the use of Electronic Transmissions is not necessarily secure and that there
are risks associated with such use, including risks of interception, disclosure
and abuse and each indicates it assumes and accepts such risks by hereby
authorizing the transmission of Electronic Transmissions.
	 
	 	(b)	 	All uses of an E-System shall be governed by and subject to, in
addition to Section 13.6 and this Section 13.22, separate terms and conditions
posted or referenced in such E-System and related contractual obligations
executed by the Agent, the Credit Parties and the Lenders in connection with
the use of such E-System.
	 
	 	(c)	 	All E-Systems and Electronic Transmissions shall be provided
“as is” and “as available”. None of the Agent or any of its Affiliates
warrants the accuracy, adequacy or completeness of any E-Systems or Electronic
Transmission, and each disclaims all liability for errors or omissions therein.
No warranty of any kind is made by the Agent or any of its Affiliates in
connection with any E Systems or Electronic Transmission, including any
warranty of merchantability, fitness for a particular purpose, non-infringement
of third-party rights or freedom from viruses or other code defects. The
Agent, the Credit Parties and the Lenders agree that the Agent has no
responsibility for maintaining or providing any equipment, software, services
or any testing required in connection with any Electronic Transmission or
otherwise required for any E-System.





     13.23 Advertisements. The Agent and the Lenders may disclose the names of the Credit Parties and the existence of
the Indebtedness in general advertisements and trade publications.



     13.24 Reliance on and Survival of Provisions. All terms, covenants, agreements, representations and warranties of the Credit Parties to
any of the Loan Documents made herein or in any of the Loan Documents or in any certificate,
report, financial statement or other document furnished by or on behalf of any Credit Party in
connection with this Agreement or any of the Loan Documents shall be deemed to have been relied
upon by the Lenders, notwithstanding any investigation heretofore or hereafter made
by any Lender or on such Lender’s behalf, and those covenants and agreements of the Borrower
set forth in Section 13.5 hereof (together with any other indemnities of any Credit Party contained
elsewhere in this Agreement or in any of the other Loan Documents) and of Lenders set forth in
Section 12.7 hereof shall survive the repayment in full of the Indebtedness and the termination of
any commitment to extend credit.



113









 





     13.25 Amendment and Restatement; Assignment and Assumptions. Except as otherwise set forth herein, this Agreement is intended to and does, effective on
the Closing Date, completely amend and restate, without novation, the Prior Credit Agreement.



     13.26 Individual Employee Liability to Lenders. The parties acknowledge that, from time to time, employees of Borrower may be required to
execute and deliver, in their capacity as an officer, director or employee of Borrower, certain
certificates to Agent and Lenders in relation to this Agreement or the transactions contemplated by
this Agreement (“Certificates”). Agent and Lenders shall have no cause of action against any
individual employee of Borrower based on any inaccuracy in any Certificate executed by or delivered
to Agent and Lenders by such employee provided the employee does not knowingly provide false or
misleading Certificates, and has acted in good faith.



[Signatures Follow On Succeeding Page]




114









 








     WITNESS the due execution hereof as of the day and year first above written.



	 	 	 	 	 	 	 	 	 	 	 
	COMERICA BANK, 

as Administrative Agent	 	 	 	QUINSTREET, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Illegible
 

	 	 
	 	By:
	 	/s/ Douglas Valenti
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Its:

	 	Senior Vice President
	 	 	 	Its:
	 	CEO	 	 






	 	 	 	 	 
	COMERICA BANK,

as a Lender, as Issuing Lender

and as Swing Line Lender	 	 
	 
	 	 	 	 
	By:

	 	/s/ Illegible
 

	 	 
	 
	 	 	 	 
	Its:

	 	Senior Vice President	 	 






115









 






	 	 	 	 	 
	WACHOVIA BANK NATIONAL 

ASSOCIATION, as a Lender	 	 
	 
	 	 	 	 
	By:

	 	/s/ Illegible
 

	 	 
	 
	 	 	 	 
	Its:

	 	Senior Vice President	 	 






116









 






	 	 	 	 	 
	BANK OF AMERICA, N.A.,

as a Lender	 	 
	 
	 	 	 	 
	By:

	 	/s/ Illegible
 

	 	 
	 
	 	 	 	 
	Its:

	 	Senior Vice President	 	 






117









 






	 	 	 	 	 
	UNION BANK OF CALIFORNIA,

as a Lender	 	 
	 
	 	 	 	 
	By:

	 	/s/ Illegible
 

	 	 
	 
	 	 	 	 
	Its:

	 	Senior Vice President	 	 






118









 




Schedule 1.1

Applicable Margin Grid

Revolving Credit and Term Loan Facility

(basis points per annum)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Basis for Pricing	 	 	Level I	 	 	Level II	 	 	Level III	 	 	Level IV	 
	 	Funded Debt to EBITDA Ratio*
	 	 	<0.75 to 1.0	 	 	30.75 to 1.0
and
<1.5 to 1.0	 	 	31.5 to 1.0
and
<2.25 to 1.0	 	 	32.25 to 1.0	 
	 	Revolving Credit Eurodollar Margin
	 	 	 	187.50	 	 	 	 	212.50	 	 	 	 	237.50	 	 	 	 	262.50	 	 
	 	Revolving Credit Prime-Based Rate Margin
	 	 	 	75.00	 	 	 	 	75.00	 	 	 	 	100.00	 	 	 	 	125.00	 	 
	 	Revolving Credit Facility Fee
	 	 	 	37.50	 	 	 	 	37.50	 	 	 	 	37.50	 	 	 	 	37.50	 	 
	 	Letter of Credit Fees (exclusive of facing fees)
	 	 	 	187.50	 	 	 	 	212.50	 	 	 	 	237.50	 	 	 	 	262.50	 	 
	 	Term Loan Eurodollar Margin
	 	 	 	225.00	 	 	 	 	250.00	 	 	 	 	275.00	 	 	 	 	300.00	 	 
	 	Term Loan Prime-Based Rate Margin
	 	 	 	75.00	 	 	 	 	75.00	 	 	 	 	100.00	 	 	 	 	125.00	 	 
	 







			
	*	 	Definitions as set forth in the Credit Agreement.
	 
	**	 	Level II pricing shall be in effect until the delivery of the financial statements for the
quarter ending September 30, 2008 after which time the pricing grid shall govern.





 









 





Schedule 1.2

Percentages and Allocations

Revolving Credit and Term Loan Facilities




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	REVOLVING	 	 	REVOLVING	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	CREDIT	 	 	CREDIT	 	 	TERM LOAN	 	 	TERM LOAN	 	 	WEIGHTED	 
	 	LENDERS	 	 	PERCENTAGE	 	 	ALLOCATIONS	 	 	PERCENTAGE	 	 	ALLOCATIONS	 	 	PERCENTAGE	 
	 	Comerica Bank
	 	 	 	35	%	 	 	$	24,500,000	 	 	 	 	35	%	 	 	$	10,500,000	 	 	 	 	35	%	 
	 	Union Bank of California
	 	 	 	25	%	 	 	$	17,500,000	 	 	 	 	25	%	 	 	$	7,500,000	 	 	 	 	25	%	 
	 	Bank of America
	 	 	 	20	%	 	 	 	14,000,000	 	 	 	 	20	%	 	 	$	6,000,000	 	 	 	 	20	%	 
	 	Wachovia
	 	 	 	20	%	 	 	$	14,000,000	 	 	 	 	20	%	 	 	$	6,000,000	 	 	 	 	20	%	 
	 	TOTALS
	 	 	 	100	%	 	 	$	70,000,000	 	 	 	 	100	%	 	 	$	30,000,000	 	 	 	 	100	%	 
	 






 












 






EXHIBIT A




FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE




			
	 	 	 
	No.                                         
	 	Dated:                                         , 20                    






	 	 	 
	TO:

	 	Comerica Bank (“Agent”)
	 
	 	 
	RE:

	 	Revolving Credit and Term Loan Agreement (“Agreement”) is made as of the ___day of September, 2008, (as amended, restated
or otherwise modified from time to time, the “Credit Agreement”) by and among the financial institutions from time to time
signatory thereto (individually a “Lender,” and any and all such financial institutions collectively the “Lenders”),
Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the “Agent”) and QuinStreet, Inc. (“Borrower”).






Pursuant to the terms and conditions of the Credit Agreement, Borrower hereby requests an
Advance from Lenders, as described herein:





	(b)	 	Date of Advance:                                         
	 
	(c)	 	o (check if applicable)
	 
	 	 	This Advance is or includes a whole or partial refunding/conversion of:
	 
	 	 	Advance No(s).                                         
	 
	(d)	 	Type of Advance (check only one):
	 
	 	 	o Prime-based Advance
	 
	 	 	o Eurodollar-based Advance
	 
	(e)	 	Amount of Advance:
	 
	 	 	$                                                            
	 
	(f)	 	Interest Period (applicable to Eurodollar-based Advances)
	 
	 	 	                                         months
	 
	(g)	 	Disbursement Instructions
	 
	 	 	o Comerica Bank Account No.                                         
	 
	 	 	o Other:                                         






	 	 	 	                                                            





Borrower certifies to the matters specified in Section 2.3(f) of the Credit Agreement.




119









 








     Capitalized terms used herein, except as defined to the contrary, have the meanings given them
in the Credit Agreement.



	 	 	 	 	 	 	 
	 	 	QUINSTREET, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 






     Agent Approval:                                         




120









 








EXHIBIT B




FORM OF REVOLVING CREDIT NOTE




			
	 	 	 
	$                                                            
	 	                                        , 20                    






     On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED, QuinStreet, Inc.
(“Borrower”) promises to pay to the order of [insert name of applicable financial institution]
(“Payee”) at San Jose, California, care of Agent, in lawful money of the United States of America,
so much of the sum of [Insert Amount derived from Percentages] Dollars ($                    ), as may
from time to time have been advanced by Payee and then be outstanding hereunder pursuant to the
Revolving Credit and Term Loan Agreement (“Agreement”) is made as of the                      day of September,
2008, by and among the financial institutions from time to time signatory thereto (individually a
“Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank,
as Administrative Agent for the Lenders (in such capacity, the “Agent”), and Borrower. Each of the
Revolving Credit Advances made hereunder shall bear interest at the Applicable Interest Rate from
time to time applicable thereto under the Credit Agreement or as otherwise determined thereunder,
and interest shall be computed, assessed and payable on the unpaid principal amount of each
Revolving Credit Advance made by the Payee from the date of such Revolving Credit Advance until
paid at the rate and at the times set forth in the Credit Agreement.



     This Note is a note under which Revolving Credit Advances (including refundings and
conversions), repayments and readvances may be made from time to time, but only in accordance with
the terms and conditions of the Credit Agreement. This Note evidences borrowings under, is subject
to, is secured in accordance with, and may be accelerated or matured under, the terms of the Credit
Agreement, to which reference is hereby made. Capitalized terms used herein, except as defined to
the contrary, shall have the meanings given them in the Credit Agreement.



     This Note shall be interpreted and the rights of the parties hereunder shall be determined
under the laws of, and enforceable in, the State of California.



     The Borrower hereby waives presentment for payment, demand, protest and notice of dishonor and
nonpayment of this Note and agrees that no obligation hereunder shall be discharged by reason of
any extension, indulgence, release, or forbearance granted by any holder of this Note to any party
now or hereafter liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.



*       *       *




[SIGNATURES FOLLOW ON SUCCEEDING PAGE]




 









 





     Nothing herein shall limit any right granted Payee by any other instrument or by law.



	 	 	 	 	 	 	 
	 	 	QUINSTREET, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 







2









 








EXHIBIT C




FORM OF SWING LINE NOTE




			
	 	 	 
	$5,000,000
	 	                                        , 20                    






     On or before the Revolving Credit Maturity Date, FOR VALUE RECEIVED, QuinStreet, Inc.
(“Borrower”) promises to pay to the order of Comerica Bank (“Swing Line Lender”) at San Jose,
California in lawful money of the United States of America, so much of the sum of [Insert
Amount derived from Percentages] Dollars ($                    ), as may from time to time have been
advanced to the Borrower by the Swing Line Lender and then be outstanding hereunder pursuant to the
Revolving Credit and Term Loan Agreement (“Agreement”) is made as of the ___ day of September,
2008, by and among the financial institutions from time to time signatory thereto (individually a
“Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank,
as Administrative Agent for the Lenders (in such capacity, the “Agent”), and Borrower, together
with interest thereon as hereinafter set forth.



     Each of the Swing Line Advances made hereunder shall bear interest at the Applicable Interest
Rate from time to time applicable thereto under the Credit Agreement or as otherwise determined
thereunder, and interest shall be computed, assessed and payable on the unpaid principal amount of
each Swing Line Advance made by the Swing Line Lender from the date of such Swing Line Advance
until paid at the rates and at the times set forth in the Credit Agreement.



     This Note is a Swing Line Note under which Swing Line Advances (including refundings and
conversions), repayments and readvances may be made from time to time by the Swing Line Lender, but
only in accordance with the terms and conditions of the Credit Agreement (including any applicable
sublimits). This Note evidences borrowings under, is subject to, is secured in accordance with,
and may be accelerated or matured under, the terms of the Credit Agreement to which reference is
hereby made. Capitalized terms used herein, except as defined to the contrary, shall have the
meanings given them in the Credit Agreement.



     This Note shall be interpreted and the rights of the parties hereunder shall be determined
under the laws of, and enforceable in, the State of California.



     The Borrower hereby waives presentment for payment, demand, protest and notice of dishonor and
nonpayment of this Note and agrees that no obligation hereunder shall be discharged by reason of
any extension, indulgence, release, or forbearance granted by any holder of this Note to any party
now or hereafter liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.



*       *       *




[SIGNATURES FOLLOW ON SUCCEEDING PAGE]




 









 





     Nothing herein shall limit any right granted Swing Line Lender by any other instrument or by
law.



	 	 	 	 	 	 	 
	 	 	QUINSTREET, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 






2









 






EXHIBIT D




FORM OF REQUEST FOR SWING LINE ADVANCE




			
	 	 	 
	No.                                         
	 	Dated:                     






	 	 	 
	TO:

	 	Comerica Bank (“Swing Line Lender”)
	 
	 	 
	RE:

	 	Revolving Credit and Term Loan Agreement
(“Agreement”) is made as of the ___day of
September, 2008, (as amended, restated or otherwise
modified from time to time, the “Credit Agreement”)
by and among the financial institutions from time to
time signatory thereto (individually a “Lender,” and
any and all such financial institutions collectively
the “Lenders”), Comerica Bank, as Administrative
Agent for the Lenders (in such capacity, the
“Agent”) and QuinStreet, Inc. (“Borrower”).






Pursuant to the terms and conditions of the Credit Agreement, Borrower hereby requests an
Advance from the Swing Line Lender, as described herein:





	(a)	 	Date of Advance:                                         
	 
	(b)	 	o (check if applicable)
	 
	 	 	This Advance is or includes a whole or partial refunding/conversion of:
	 
	 	 	Advance No(s).                                                             
	 
	(c)	 	Type of Advance (check only one):—
	 
	 	 	o Prime-based Advance
	 
	 	 	o Quoted Rate Advance
	 
	(d)	 	Amount of Advance:
	 
	 	 	$                                        
	 
	(e)	 	Interest Period (applicable to Quoted Rate Advances)
	 
	 	 	                                         months
	 
	(f)	 	Disbursement Instructions
	 
	 	 	o Comerica Bank Account No.                                         
	 
	 	 	o Other:                                         






	 	 	 	                                                            





Borrower certifies to the matters specified in Section 2.5(c)(vi) of the Credit Agreement.




 









 








     Capitalized terms used herein, except as defined to the contrary, have the meanings given them
in the Credit Agreement.



	 	 	 	 	 	 	 
	 	 	QUINSTREET, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 







2









 








EXHIBIT E




FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT




	 	 	 
	TO:

	 	Lenders
	 
	 	 
	RE:

	 	Issuance of Letter of Credit pursuant to Article 3 of the Revolving Credit and Term Loan Agreement (“Agreement”) is made as of the ___ day of September, 2008,
(as amended, restated or otherwise modified from time to time, the “Credit Agreement”) by and among the financial institutions from time to time signatory
thereto (individually a “Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank, as Administrative Agent for the
Lenders (in such capacity, the “Agent”) and QuinStreet, Inc. (“Borrower”).
	 
	 	 
	 

	 	On                                         , 20                    ,1
Agent, in accordance with Article 3 of the Credit Agreement,
issued its Letter of Credit number
       
         
            
            , in
favor of         
             
              
     2
for the account of          
            
             
      .3 The
face amount of such Letter of Credit is $      
             
             
         . The amount of each Lender’s
participation in such Letter of Credit is as follows:4






	 	 	 	 	 
	 

	 	[Lender]
	 	$                                        
	 

	 	[Lender]
	 	$                                        
	 

	 	[Lender]
	 	$                                        
	 

	 	[Lender]
	 	$                                        






     This
notification is delivered this         
             day of  
               
               
         , 20    
               
 , pursuant to Section 3.3
of the Credit Agreement. Except as otherwise defined, capitalized terms used herein have the
meanings given them in the Credit Agreement.



	 	 	 	 	 	 	 
	 	 	Signed:	 	 
	 
	 	 	 	 	 	 
	 	 	COMERICA BANK, as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 








 




			
	1	 	Date of Issuance
	 
	2	 	Beneficiary
	 
	3	 	Name of applicable Borrower
	 
	4	 	Amounts based on Percentages




[This form of Letter of Credit Notice (including footnotes) is subject in all
respects to the terms and conditions of the Credit Agreement which shall govern
in the event of any inconsistencies or omissions.]







 











 





EXHIBIT F


FORM OF SECURITY AGREEMENT




 









 





EXHIBIT “F”




SECURITY AGREEMENT




     THIS SECURITY AGREEMENT (the “Agreement”) dated as of September ____, 2008
and is effective as of the Effective Date, is entered into by and among the Borrower (as defined
below), such other entities which from time to time become parties hereto (collectively, including
the Borrower, the “Debtors” and each individually a “Debtor”) and Comerica Bank
(“Comerica”), as Administrative Agent for and on behalf of the Banks (as defined below)
(in such capacity, the “Agent”). The addresses for the Debtors and the Agent, as of the
date hereof, are set forth on the signature pages attached hereto.



RECITALS:




     A. QuinStreet, Inc. (the “Borrower”) has entered into that certain Revolving Credit
and Term Loan Agreement dated as of September ____, 2008 (as amended, supplemented, amended
and restated or otherwise modified from time to time the “Credit Agreement”) with each of
the financial institutions party thereto (collectively, including their respective successors and
assigns, the “Banks”) and the Agent pursuant to which the Banks have agreed, subject to the
satisfaction of certain terms and conditions, to extend or to continue to extend financial
accommodations to the Borrower, as provided therein.



     B. Pursuant to the Credit Agreement, the Banks have required that each of the Debtors grant
(or cause to be granted) certain Liens to the Agent, for the benefit of the Banks, all to secure
the obligations of the Borrower or any Debtor under the Credit Agreement or any related Loan
Document (including any Guaranty).



     C. The Debtors have directly and indirectly benefited and will directly and indirectly benefit
from the transactions evidenced by and contemplated in the Credit Agreement and the other Loan
Documents.



     D. The Agent is acting as Agent for the Banks pursuant to the terms and conditions Section 12
of the Credit Agreement.



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



ARTICLE 1

Definitions




     Section 1.1 Definitions. As used in this Agreement, capitalized terms not otherwise
defined herein have the meanings provided for such terms in the Credit Agreement. References to
“Sections,” “subsections,” “Exhibits” and “Schedules” shall be to Sections, subsections, Exhibits
and Schedules, respectively, of this Agreement unless otherwise specifically provided. All
references to statutes and regulations shall include any amendments of the same and any successor
statutes and regulations. References to particular sections of the UCC should be read to refer also
to parallel sections of the Uniform Commercial Code as enacted in each state or



 









 




other jurisdiction which may be applicable to the grant and perfection of the Liens held by the
Agent for the benefit of the Banks pursuant to this Agreement.




     The following terms have the meanings indicated below, all such definitions to be equally
applicable to the singular and plural forms of the terms defined:



     “Account” means any “account,” as such term is defined in Article or Chapter 9 of the
UCC, now owned or hereafter acquired by a Debtor, and, in any event, shall include, without
limitation, each of the following, whether now owned or hereafter acquired by such Debtor: (a) all
rights of such Debtor to payment for goods sold or leased or services rendered, whether or not
earned by performance, (b) all accounts receivable of such Debtor, (c) all rights of such Debtor
to receive any payment of money or other form of consideration, (d) all security pledged, assigned
or granted to or held by such Debtor to secure any of the foregoing, (e) all guaranties of, or
indemnifications with respect to, any of the foregoing, and (f) all rights of such Debtor as an
unpaid seller of goods or services, including, but not limited to, all rights of stoppage in
transit, replevin, reclamation and resale.



     “Chattel Paper” means any “chattel paper,” as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by a Debtor, and shall include both
electronic Chattel Paper and tangible Chattel Paper.



     “Collateral” has the meaning specified in Section 2.1 of this Agreement.



     “Computer Records” means any computer records now owned or hereafter acquired by any
Debtor.



     “Copyright Collateral” shall mean all Copyrights and Copyright Licenses of the
Debtors.



     “Copyright Licenses” shall mean all license agreements with any other Person in
connection with any of the Copyrights or such other Person’s copyrights, whether a Debtor is a
licensor or a licensee under any such license agreement, including, without limitation, the
license agreements listed on Schedule 1.1 hereto and made a part hereof, subject, in each case, to
the terms of such license agreements and the right to prepare for sale, sell and advertise for
sale, all inventory now or hereafter covered by such licenses.



     “Copyrights” shall mean all copyrights and mask works, whether or not registered, and
all applications for registration of all copyrights and mask works, including, but not limited to
all copyrights and mask works, and all applications for registration of all copyrights and mask
works identified on Schedule 1.1 attached hereto and made a part hereof, and including without
limitation (a) the right to sue or otherwise recover for any and all past, present and future
infringements and misappropriations thereof; (b) all income, royalties, damages and other payments
now and hereafter due and/or payable with respect thereto (including, without limitation, payments
under all Copyright Licenses entered into in connection therewith, and damages and payments for
past or future infringements thereof); and (c) all rights corresponding thereto and all
modifications, adaptations, translations, enhancements and derivative works, renewals thereof, and
all other rights of any kind whatsoever of a Debtor accruing thereunder or pertaining thereto.



2









 





     “Deposit Account” shall mean a demand, time, savings, passbook, or similar account
maintained with a bank. The term does not include investment property, investment accounts or
accounts evidenced by an instrument.



     “Document” means any “document,” as such term is defined in Article or Chapter 9 of
the UCC, now owned or hereafter acquired by any Debtor, including, without limitation, all
documents of title and all receipts covering, evidencing or representing goods now owned or
hereafter acquired by a Debtor.



     “Equipment” means any “equipment,” as such term is defined in Article or Chapter 9 of
the UCC, now owned or hereafter acquired by a Debtor and, in any event, shall include, without
limitation, all machinery, equipment, furniture, trade fixtures, tractors, trailers, rolling stock,
vessels, aircraft and Vehicles now owned or hereafter acquired by such Debtor and any and all
additions, substitutions and replacements of any of the foregoing, wherever located, together with
all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.



     “General Intangibles” means any “general intangibles,” as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by a Debtor and, in any event,
shall include, without limitation, each of the following, whether now owned or hereafter acquired
by such Debtor: (a) all of such Debtor’s Intellectual Property Collateral; (b) all of such Debtor’s
books, records, data, plans, manuals, computer software, computer tapes, computer disks, computer
programs, source codes, object codes and all rights of such Debtor to retrieve data and other
information from third parties; (c) all of such Debtor’s contract rights, commercial tort claims,
partnership interests, membership interests, joint venture interests, securities, deposit accounts,
investment accounts and certificates of deposit; (d) all rights of such Debtor to payment under
chattel paper, documents, instruments and similar agreements; (e) letters of credit, letters of
credit rights supporting obligations and rights to payment for money or funds advanced or sold of
such Debtor; (f) all tax refunds and tax refund claims of such Debtor; (g) all choses in action and
causes of action of such Debtor (whether arising in contract, tort or otherwise and whether or not
currently in litigation) and all judgments in favor of such Debtor; (h) all rights and claims of
such Debtor under warranties and indemnities, (i) all health care receivables; and (j) all rights
of such Debtor under any insurance, surety or similar contract or arrangement.



     “Governmental Authority” shall mean any nation or government, any state, province or
other political subdivision thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or other entity owned
or controlled, through stock or capital ownership or otherwise, by any of the foregoing.



     “Instrument” shall mean any “instrument,” as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by any Debtor, and, in any event, shall
include all promissory notes (including without limitation, any Intercompany Notes held by such
Debtor), drafts, bills of exchange and trade acceptances, whether now owned or hereafter acquired.



3









 





     “Insurance Proceeds” shall have the meaning set forth in Section 4.4 of this
Agreement.



     “Intellectual Property Collateral” shall mean Patents, Patent Licenses, Copyrights,
Copyright Licenses, Trademarks, Trademark Licenses, trade secrets, registrations, goodwill,
franchises, permits, proprietary information, customer lists, designs, inventions and all other
intellectual property and proprietary rights, including without limitation those described on
Schedule 1.1 attached hereto and incorporated herein by reference.



     “Inventory” means any “inventory,” as such term is defined in Article or Chapter 9 of the UCC,
now owned or hereafter acquired by a Debtor, and, in any event, shall include, without limitation,
each of the following, whether now owned or hereafter acquired by such Debtor: (a) all goods and
other Personal property of such Debtor that are held for sale or lease or to be furnished under any
contract of service; (b) all raw materials, work-in-process, finished goods, supplies and materials
of such Debtor; (c) all wrapping, packaging, advertising and shipping materials of such Debtor; (d)
all goods that have been returned to, repossessed by or stopped in transit by such Debtor; and (e)
all Documents evidencing any of the foregoing.



     “Investment Property” means any “investment property” as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by a Debtor, and in any event,
shall include without limitation all shares of stock and other equity, partnership or membership
interests constituting securities, of the Domestic Subsidiaries of such Debtor from time to time
owned or acquired by such Debtor in any manner (including, without limitation, the Pledged
Shares), and the certificates and all dividends, cash, instruments, rights and other property from
time to time received, receivable or otherwise distributed or distributable in respect of or in
exchange for any or all of such shares, but excluding any shares of stock or other equity,
partnership or membership interests in any Foreign Subsidiaries of such Debtor.



     “Patent Collateral” shall mean all Patents and Patent Licenses of the Debtors.



     “Patent Licenses” shall mean all license agreements with any other Person in
connection with any of the Patents or such other Person’s patents, whether a Debtor is a licensor
or a licensee under any such license agreement, including, without limitation, the license
agreements listed on Schedule 1.1 hereto and made a part hereof, subject, in each case, to the
terms of such license agreements and the right to prepare for sale, sell and advertise for sale,
all inventory now or hereafter covered by such licenses.



     “Patents” shall mean all letters patent, patent applications and patentable inventions,
including, without limitation, all patents and patent applications identified on Schedule 1.1
attached hereto and made a part hereof, and including without limitation, (a) all inventions and
improvements described and claimed therein, and patentable inventions, (b) the right to sue or
otherwise recover for any and all past, present and future infringements and misappropriations
thereof, (c) all income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all Patent Licenses
entered into in connection therewith, and damages and payments for past or future infringements
thereof), and (d) all rights corresponding thereto and all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon,
and all other rights of any kind whatsoever of a Debtor accruing thereunder or pertaining thereto.



4









 





     “Pledged Shares” means the shares of capital stock or other equity, partnership or
membership interests described on Schedule 1.2 attached hereto and incorporated herein by
reference, and all other shares of capital stock or other equity, partnership or membership
interests (other than in an entity which is a Foreign Subsidiary) acquired by any Debtor after the
date hereof.



     “Proceeds” means any “proceeds,” as such term is defined in Article or Chapter 9 of
the UCC and, in any event, shall include, but not be limited to, (a) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to a Debtor from time to time with respect to
any of the Collateral, (b) any and all payments (in any form whatsoever) made or due and payable
to a Debtor from time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any Governmental Authority (or any
Person acting, or purporting to act, for or on behalf of any Governmental Authority), and (c) any
and all other amounts from time to time paid or payable under or in connection with any of the
Collateral.



     “Records” are defined in Section 3.2 of this Agreement.



     “Software” means all (i) computer programs and supporting information provided in
connection with a transaction relating to the program, and (ii) computer programs embedded in
goods and any supporting information provided in connection with a transaction relating to the
program whether or not the program is associated with the goods in such a manner that it
customarily is considered part of the goods, and whether or not, by becoming the owner of the
goods, a Person acquires a right to use the program in connection with the goods, and whether or
not the program is embedded in goods that consist solely of the medium in which the program is
embedded.



     “Trademark Collateral” shall mean all Trademarks and Trademark Licenses of the
Debtors.



     “Trademark Licenses” shall mean all license agreements with any other Person in
connection with any of the Trademarks or such other Person’s names or trademarks, whether a Debtor
is a licensor or a licensee under any such license agreement, including, without limitation, the
license agreements listed on Schedule 1.1 hereto and made a part hereof, subject, in each case, to
the terms of such license agreements, and the right to prepare for sale, and to sell and advertise
for sale, all inventory now or hereafter covered by such licenses.



     “Trademarks” shall mean all trademarks, service marks, trade names, trade dress or other
indicia of trade origin, trademark and service mark registrations, and applications for trademark
or service mark registrations (except for “intent to use” applications for trademark or service
mark registrations filed pursuant to Section 1(b) of the Lanham Act, unless and until an Amendment
to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed), and
any renewals thereof, including, without limitation, each registration and application identified
on Schedule 1.1 attached hereto and made a part hereof, and including without limitation (a) the
right to sue or otherwise recover for any and all past, present and future infringements and
misappropriations thereof, (b) all income, royalties, damages and other payments now and hereafter
due and/or payable with respect thereto (including, without



5









 




limitation, payments under all Trademark Licenses entered into in connection therewith, and
damages and payments for past or future infringements thereof) and (c) all rights corresponding
thereto and all other rights of any kind whatsoever of a Debtor accruing thereunder or pertaining
thereto, together in each case with the goodwill of the business connected with the use of, and
symbolized by, each such trademark, service mark, trade name, trade dress or other indicia of
trade origin.




     “UCC” means the Uniform Commercial Code as in effect in the State of California;
provided, that if, by applicable law, the perfection or effect of perfection or
non-perfection of the security interest created hereunder in any Collateral is governed by the
Uniform Commercial Code as in effect on or after the date hereof in any other jurisdiction, “UCC”
means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or the effect of perfection or non-perfection.



     “Vehicles” means all cars, trucks, trailers, construction and earth moving equipment
and other vehicles covered by a certificate of title law of any state and all tires and other
appurtenances to any of the foregoing.



ARTICLE 2

Security Interest




     Section 2.1 Grant of Security Interest. As collateral security for the prompt payment
and performance in full when due of the Indebtedness (whether at stated maturity, by acceleration
or otherwise), each Debtor hereby pledges, assigns, transfers and conveys to the Agent as
collateral, and grants the Agent a continuing Lien on and security interest in, all of such
Debtor’s right, title and interest in and to the following, whether now owned or hereafter arising
or acquired and wherever located (collectively, the “Collateral”):




	 	(a)	 	all Accounts;
	 
	 	(b)	 	all Chattel Paper;
	 
	 	(c)	 	all General Intangibles;
	 
	 	(d)	 	all Equipment;
	 
	 	(e)	 	all Inventory;
	 
	 	(f)	 	all Documents;
	 
	 	(g)	 	all Instruments;
	 
	 	(h)	 	all Deposit Accounts and any other cash collateral, deposit or investment
accounts, including all cash collateral, deposit or investment accounts established or
maintained pursuant to the terms of this Agreement or the other Loan Documents;




6









 












	 	(i)	 	all Computer Records and Software, whether relating to the foregoing Collateral or
otherwise, but in the case of such Software, subject to the rights of any
non-affiliated licensee of software;
	 
	 	(j)	 	all Investment Property; and
	 
	 	(k)	 	the Proceeds, in cash or otherwise, of any of the property described in the
foregoing clauses (a) through (j) and all Liens, security, rights, remedies and claims
of such Debtor with respect thereto (provided that the grant of a security interest in
Proceeds set forth is in this subsection (k) shall not be deemed to give the applicable
Debtor any right to dispose of any of the Collateral, except as may otherwise be
permitted pursuant to the terms of the Credit Agreement);




provided, however, that “Collateral” shall not include rights under or with respect to any
General Intangible, license, permit or authorization to the extent any such General Intangible,
license, permit or authorization, by its terms or by law, prohibits the assignment of, or the
granting of a Lien over the rights of a grantor thereunder or which would be invalid or
unenforceable upon any such assignment or grant (the “Restricted Assets”), provided that
(A) the Proceeds of any Restricted Asset shall be continue to be deemed to be “Collateral”, and (B)
this provision shall not limit the grant of any Lien on or assignment of any Restricted Asset to
the extent that the UCC or any other applicable law provides that such grant of Lien or assignment
is effective irrespective of any prohibitions to such grant provided in any Restricted Asset (or
the underlying documents related thereto). Concurrently with any such Restricted Asset being
entered into or arising after the date hereof, the applicable Debtor shall be obligated to use good
faith commercially reasonable efforts to obtain any waiver or consent (in form and substance
acceptable to the Agent) necessary to allow such Restricted Asset to constitute Collateral
hereunder if the failure of such Debtor to have such Restricted Asset would have a Material Adverse
Effect.




     Section 2.2 Debtors Remain Liable. Notwithstanding anything to the contrary contained
herein, (a) the Debtors shall remain liable under the contracts, agreements, documents and
instruments included in the Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had not been executed,
(b) the exercise by the Agent or any Bank of any of their respective rights or remedies hereunder
shall not release the Debtors from any of their duties or obligations under the contracts,
agreements, documents and instruments included in the Collateral, and (c) neither the Agent nor
any of the Banks shall have any indebtedness, liability or obligation (by assumption or otherwise)
under any of the contracts, agreements, documents and instruments included in the Collateral by
reason of this Agreement, and none of them shall be obligated to perform any of the obligations or
duties of the Debtors thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.



ARTICLE 3



Representations and Warranties




     To induce the Agent to enter into this Agreement and the Agent and the Banks to enter into
the Credit Agreement, each Debtor represents and warrants to the Agent and to each Bank as



7









 




follows, each such representation and warranty being a continuing representation and warranty,
surviving until termination of this Agreement in accordance with the provisions of Section
7.12 of this Agreement;




     Section 3.1 Title. Such Debtor is, and with respect to Collateral acquired after the
date hereof such Debtor will be, the legal and beneficial owner of the Collateral free and clear
of any Lien or other encumbrance, except for the Permitted Liens, provided that, other than the
Lien established under this Agreement, no Lien on any Pledged Shares shall constitute a Permitted
Lien.



     Section 3.2 Change in Form or Jurisdiction; Successor by Merger; Location of Books and
Records. As of the date hereof, each Debtor (a) is duly organized and validly existing as a
corporation (or other business organization) under the laws of its jurisdiction of organization;
(b) is formed in the jurisdiction of organization and has the registration number and tax
identification number set forth on Schedule 3.2 attached hereto; (c) has not changed its respective
corporate form or its jurisdiction of organization at any time during the five years immediately
prior to the date hereof, except as set forth on such Schedule 3.2; (d) except as set forth on such
Schedule 3.2 attached hereto, no Debtor has, at any time during the five years immediately prior to
the date hereof, become the successor by merger, consolidation, acquisition, change in form, nature
or jurisdiction of organization or otherwise of any other Person, and (e) keeps true and accurate
books and records regarding the Collateral (the “Records”) in the office indicated on such Schedule
3.2.



     Section 3.3 Representations and Warranties Regarding Certain Types of Collateral




	 	(a)	 	Location of Inventory and Equipment. As of the date hereof, (i) all
Inventory (except Inventory in transit) and Equipment (except trailers, rolling stock,
vessels, aircraft and Vehicles) of each Debtor are located at the places specified on
Schedule 3.3(a) attached hereto, (ii) the name and address of the landlord leasing any
location to any Debtor is identified on such Schedule 3.3(a), and (iii) the name of and
address of each bailee or warehouseman which holds any Collateral and the location of
such Collateral is identified on such Schedule 3.3(a).
	 
	 	(b)	 	Account Information. As of the date hereof, all Deposit Accounts, cash
collateral account or investment accounts of each Debtor (except for those Deposit
Accounts located with the Agent) are located at the banks specified on Schedule 3.3(b)
attached hereto which Schedule sets forth the true and correct name of each bank where
such accounts are located, such bank’s address, the type of account and the account
number.
	 
	 	(c)	 	Documents. As of the date hereof, except as set forth on Schedule 3.3(c),
none of the Inventory or Equipment of such Debtor (other than trailers, rolling stock,
vessels, aircraft and Vehicles) is evidenced by a Document (including, without
limitation, a negotiable document of title).





8









 






	 	(d)	 	Intellectual Property. Set forth on Schedule 1.1 (the same may be amended from
time to time) is a true and correct list of the registered Patents, Patent Licenses,
registered Trademarks, Trademark Licenses, registered Copyrights and Copyright Licenses owned
by the Debtors (including, in the case of the Patents, Trademarks and Copyrights, the
applicable name, date of registration (or of application if registration not completed) and
application or registration number).





     Section 3.4 Pledged Shares.




	 	(a)	 	Duly Authorized and Validly Issued. The Pledged Shares that are shares of a
corporation have been duly authorized and validly issued and are fully paid and
nonassessable, and the Pledged Shares that are membership interests or partnership
units (if any) have been validly granted, under the laws of the jurisdiction of organization
of the issuers thereof, and, to the extent applicable, are fully paid and nonassessable. No
such membership or partnership interests constitute “securities” within the meaning of
Article 8 of the UCC, and each Debtor covenants and agrees not to allow any such membership
or partnership interest to become “securities” for purposes of Article 8 of the UCC.
	 
	 	(b)	 	Valid Title; No Liens; No Restrictions. Each Debtor is the legal and beneficial owner
of the Pledged Shares, free and clear of any Lien (other than the Liens created by this
Agreement), and such Debtor has not sold, granted any option with respect to, assigned,
transferred or otherwise disposed of any of its rights or interest in or to the Pledged
Shares. None of the Pledged Shares are subject to any contractual or other restrictions upon
the pledge or other transfer of such Pledged Shares, other than those imposed by securities
laws generally. No issuer of Pledged Shares is party to any agreement granting “control” (as
defined in Section 8-106 of the UCC) of such Debtor’s Pledged Shares to any third party. All
such Pledged Shares are held by each Debtor directly and not through any securities
intermediary.
	 
	 	(c)	 	Description of Pledged Shares; Ownership. The Pledged Shares constitute the
percentage of the issued and outstanding shares of stock, partnership units or membership
interests of the issuers thereof indicated on Schedule 1.2 (as the same may be amended from
time to time) and such Schedule contains a description of all shares of capital stock,
membership interests and other equity interests of or in any Subsidiaries owned by such
Debtor,





     Section 3.5 Intellectual Property.




	 	(a)	 	Filings and Recordation. Bach Debtor has made all necessary filings and recordations
to protect and maintain its interest in the Trademarks, Patents and Copyrights set forth on
Schedule 1.1 (as the same may be amended from time to time), including, without limitation,
all necessary filings and recordings, and payments of all maintenance fees, in the United
States Patent and Trademark Office and United States Copyright Office to the extent such
Trademarks, Patents and Copyrights are material to such Debtor’s business. Also set forth on
Schedule





9









 






	 	 	 	1.1 (as the same may be amended from time to time) is a complete and accurate list of all of
the material Trademark Licenses, Patent Licenses and Copyright Licenses owned by the Debtors
as of the date hereof.
	 
	 	(b)	 	Trademarks and Trademark Licenses Valid. (i) Each Material Trademark of the Debtors
set forth on Schedule 1.1 (as the same may be amended from time to time) is subsisting and has
not been adjudged invalid, unregisterable or unenforceable, in whole or in part, and, to the
Debtors’ knowledge, is valid, registrable and enforceable, except as enforceability may be
limited by bankruptcy insolvency, reorganization moratorium or similar laws affecting the
enforcement of creditors rights generally and by equitable principles (whether enforcement is
sought by proceedings in equity or at law) (ii) each of the Trademark Licenses set forth on
Schedule 1.1 (as the same may be amended from time to time) is validly subsisting and has not
been adjudged invalid or unenforceable, in whole or in part, and, to the Debtors’ knowledge,
is valid and enforceable, except as enforceability may be limited by bankruptcy insolvency,
reorganization moratorium or similar laws affecting the enforcement of creditors rights
generally and by equitable principles (whether enforcement is sought by proceedings in equity
or at law) and (iii) the Debtors have notified the Agent in writing of all uses of any
material item of Trademark Collateral of which any Debtor is aware which could reasonably be
expected to lead to such item becoming invalid or unenforceable, including unauthorized uses
by third parties and uses which were not supported by the goodwill of the business connected
with such Collateral.
	 
	 	(c)	 	Patents and Patent Licenses Valid. (i) Each Material Patent of the Debtors set forth
on Schedule 1.1 (as the same may be amended from time to time) is subsisting and has not been
adjudged invalid, unpatentable or unenforceable, in whole or in part, and, to the Debtors’
knowledge, is valid, patentable and enforceable except as otherwise set forth on Schedule 1.1
(as the same may be amended from time to time), except as enforceability may be limited by
bankruptcy insolvency, reorganization moratorium or similar laws affecting the enforcement of
creditors rights generally and by equitable principles (whether enforcement is sought by
proceedings in equity or at law) (ii) each of the Patent Licenses set forth on Schedule 1.1
(as the same may be amended from time to time) is validly subsisting and has not been
adjudged invalid or unenforceable, in whole or in part, and, to the Debtors’ knowledge, is
valid and enforceable, except as enforceability may be limited by bankruptcy insolvency,
reorganization moratorium or similar laws affecting the enforcement of creditors rights
generally and by equitable principles (whether enforcement is sought by proceedings in equity
or at law) and (iii) the Debtors have notified the Agent in writing of all uses of any item
of Patent Collateral material to any Debtor’s business of which any Debtor is aware which
could reasonably be expected to lead to such item becoming invalid or unenforceable.
	 
	 	(d)	 	Copyright and Copyright Licenses Valid. (i) Each Material Copyright of the Debtors
set forth on Schedule 1.1 (as the same may be amended from time to





10









 






	 	 	 	time) is subsisting and has not been adjudged invalid, uncopyrightable or unenforceable, in
whole or in part, and, to the Debtors’ knowledge, is valid, copyrightable and enforceable,
except as enforceability may be limited by bankruptcy insolvency, reorganization moratorium
or similar laws affecting the enforcement of creditors rights generally and by equitable
principles (whether enforcement is sought by proceedings in equity or at law) (ii) each of
the Copyright Licenses set forth on Schedule 1.1 (as the same may be amended from time to
time) is validly subsisting and has not been adjudged invalid or unenforceable, in whole or
in part, and, to the Debtors’ knowledge, is valid and enforceable, except as enforceability
may be limited by bankruptcy insolvency, reorganization moratorium or similar laws affecting
the enforcement of creditors rights generally and by equitable principles (whether
enforcement is sought by proceedings in equity or at law) and (iii) the Debtors have notified
the Agent in writing of all uses of any item of Copyright Collateral material to any Debtor’s
business of which any Debtor is aware which could reasonably be expected to lead to such item
becoming invalid or unenforceable.
	 
	 	(e)	 	No Assignment. The Debtors have not made a previous assignment, sale, transfer or
agreement constituting a present or future assignment, sale, transfer or encumbrance of any of
the Intellectual Property Collateral, except with respect to non-exclusive licenses granted in
the ordinary course of business or as permitted by this Agreement or the Loan Documents. No
Debtor has granted any license, shop right, release, covenant not to sue, or non-assertion
assurance to any Person with respect to any part of the Intellectual Property Collateral,
except as set forth on Schedule 1.1 or as otherwise disclosed to the Agent in writing.
	 
	 	(f)	 	Products Marked. Each Debtor has marked its products with the trademark
registration symbol, copyright notices, the numbers of all appropriate patents, the common law
trademark symbol or the designation “patent pending,” as the case may be, to the extent that
Debtor, in good faith, believes is reasonably and commercially practicable.
	 
	 	(g)	 	Other Rights. Except for the Trademark Licenses, Patent Licenses and Copyright
Licenses listed on Schedule 1.1 hereto under which a Debtor is a licensee, no Debtor has
knowledge of the existence of any right or any claim (other than as provided by this
Agreement) that is likely to be made under or against any item of Intellectual Property
Collateral contained on Schedule 1.1 to the extent such claim could reasonably be expected to
have a Material Adverse Effect.
	 
	 	(h)	 	No Claims. Except as set forth on Schedule 1.1 or as otherwise disclosed to the
Agent in writing, no claim has been made and is continuing or, to any Debtor’s knowledge,
threatened that the use by any Debtor of any item of Intellectual Property Collateral is
invalid or unenforceable or that the use by any Debtor of any Intellectual Property
Collateral does or may violate the rights of any Person, except to the extent such
invalidity, unenforceability or violation could not reasonably be expected to have a Material
Adverse Effect. To the Debtors’




11









 






	 	 	 	knowledge, there is no infringement or unauthorized use of any item of Intellectual
Property Collateral contained on Schedule 1.1 or as otherwise disclosed to the Agent in
writing and except to the extent such claim could not reasonably be expected to have a
Material Adverse Effect.
	 
	 	(i)	 	No Consent. No consent of any party (other than such Debtor) to any Patent
License, Copyright License or Trademark License constituting Intellectual Property
Collateral is required, or purports to be required, to be obtained by or on behalf of
such Debtor in connection with the execution, delivery and performance of this Agreement
that has not been obtained. To any Debtor’s knowledge, each Patent License, Copyright
License and Trademark License constituting Intellectual Property Collateral is in full
force and effect and constitutes a valid and legally enforceable obligation of the
applicable Debtor and (to the knowledge of the Debtors) each other party thereto except
as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditor’s rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or at law).
No consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the execution, delivery,
performance, validity or enforceability of any of the Patent Licenses, Copyright
Licenses or Trademark Licenses by any party thereto other than those which have been
duly obtained, made or performed and are in full force and effect. Neither the Debtors
nor (to the knowledge of any Debtor) any other party to any Patent License, Copyright
License or Trademark License constituting Collateral is in default in the performance or
observance of any of the terms thereof, except for such defaults as would not reasonably
be expected, in the aggregate, to have a material adverse effect on the value of the
Intellectual Property Collateral. To the knowledge of such Debtor, the right, title and
interest of the applicable Debtor in, to and under each Patent License, Copyright
License and Trademark License constituting Intellectual Property Collateral is not
subject to any defense, offset, counterclaim or claim.





     Section 3.6 Priority. No financing statement, security agreement or other Lien
instrument covering all or any part of the Collateral is on file in any public office with respect
to any outstanding obligation of such Debtor except (i) as may have been filed in favor of the
Agent pursuant to this Agreement and the other Loan Documents and (ii) financing statements filed
to perfect Permitted Liens (which shall not, in any event, grant a Lien over the Pledged Shares).



     Section 3.7 Perfection. Upon (a) the filing of Uniform Commercial Code financing
statements in the jurisdictions listed on Schedule 3.7 attached hereto, and (b) the recording of
this Agreement in the United States Patent and Trademark Office and the United States Copyright
Office, the security interest in favor of the Agent created herein will constitute a valid and
perfected Lien upon and security interest in the Collateral which may be created and perfected
either under the UCC by filing financing statements or by a filing with the United States Patent
and Trademark Office and the United States Copyright Office.



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ARTICLE 4

Covenants




     Each Debtor covenants and agrees with the Agent, until termination of this Agreement in
accordance with the provisions of Section 7.12 hereof, as follows:



     Section 4.1 Covenants Regarding Certain Kinds of Collateral.



     (a) Promissory Notes and Tangible Chattel Paper. If Debtors, now or at any time
hereafter, collectively hold or acquire any promissory notes or tangible Chattel Paper for which
the principal amount thereof or the obligations evidenced thereunder are, in the aggregate, in
excess of $250,000, the applicable Debtors shall promptly notify the Agent in writing thereof and
forthwith endorse, assign and deliver the same to the Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as the Agent may from time to time reasonably
specify, and cause all such Chattel Paper to bear a legend reasonably acceptable to the Agent
indicating that the Agent has a security interest in such Chattel Paper.



     (b) Electronic Chattel Paper and Transferable Records. If Debtors, now or at any time
hereafter, collectively hold or acquire an interest in any electronic Chattel Paper or any
“transferable record,” as that term is defined in the federal Electronic Signatures in Global and
National Commerce Act, or in the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, worth, in the aggregate, in excess of $250,000, the applicable Debtors shall promptly
notify the Agent thereof and, at the request and option of the Agent, shall take such action as the
Agent may reasonably request to vest in the Agent control, under Section 9-105 of the UCC, of such
electronic chattel paper or control under the federal Electronic Signatures in Global and National
Commerce Act, or the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record.



     (c) Letter-of-Credit Rights. If Debtors, now or at any time hereafter, collectively
are or become beneficiaries under letters of credit, with an aggregate face amount in excess of
$250,000, the applicable Debtors shall promptly notify the Agent thereof and, at the request of the
Agent, the applicable Debtors shall, pursuant to an agreement in form and substance reasonably
satisfactory to the Agent either arrange (i) for the issuer and any confirmer of such letters of
credit to consent to an assignment to the Agent of the proceeds of the letters of credit or (ii)
for the Agent to become the transferee beneficiary of the letters of credit, together with, in each
case, any such other actions as reasonably requested by the Agent to perfect its first priority
Lien in such letter of credit rights. The applicable Debtor shall retain the proceeds of the
applicable letters of credit until a Default or Event of Default has occurred and is continuing
whereupon the proceeds are to be delivered to the Agent and applied as set forth in the Credit
Agreement.



     (d) Commercial Tort Claims. If Debtors, now or at any time hereafter, collectively
hold or acquire any commercial tort claims, which, the reasonably estimated value of which are in
aggregate excess of $250,000, the applicable Debtors shall immediately notify the Agent in a
writing signed by such Debtors of the particulars thereof and grant to the Agent in such writing a
security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to the Agent.



13









 





     (e) Pledged Shares. All certificates or instruments representing or evidencing the
Pledged Shares or any Debtor’s rights therein shall be delivered to the Agent promptly upon Debtor
gaining any rights therein, in suitable form for transfer by delivery or accompanied by duly
executed stock powers or instruments of transfer or assignments in blank, all in form and
substance reasonably acceptable to the Agent.




	 	(f)	 	Equipment and Inventory.






	 	(i)	 	Location. Each Debtor shall keep the Equipment (other than
Vehicles) and Inventory (other than Inventory in transit) which is in such
Debtor’s possession or in the possession of any bailee or warehouseman at any of
the locations specified on Schedule 3.3(a) attached hereto or as otherwise
disclosed in writing to the Agent from time to time, subject to compliance with
the other provisions of this Agreement, including subsection (ii) below.
	 
	 	(ii)	 	Landlord Consents and Bailee’s Waivers. Borrower shall
provide a landlord consent in form acceptable to Agent for its corporate
headquarters and upon the occurrence and during the continuance of an Event of
Default, each Debtor shall provide, as applicable, a bailee’s waiver or landlord
consent, in form and substance acceptable to the Agent, for each non-Debtor owned
location of Collateral disclosed on Schedule 3.3(a) or otherwise disclosed to the
Agent in writing, promptly after leasing such location, and shall take all other
actions required by the Agent to perfect the Agent’s security interest in the
Equipment and Inventory with the priority required by this Agreement.
	 
	 	(iii)	 	Maintenance. Each Debtor shall maintain the Equipment and
Inventory in such condition as may be specified by the terms of the Credit
Agreement.






	 	(g)	 	Intellectual Property.






	 	(i)	 	Trademarks. Each Debtor agrees to take all necessary steps,
including, without limitation, in the United States Patent and Trademark Office
or in any court, to (x) defend, enforce, preserve the validity and ownership of,
and maintain each Trademark registration and each Trademark License identified on
Schedule 1.1 hereto, and (y) pursue each trademark application now or hereafter
identified on Schedule 1.1 hereto, including, without limitation, the filing of
responses to office actions issued by the United States Patent and Trademark
Office, the filing of applications for renewal, the filing of affidavits under
Sections 8 and 15 of the United States Trademark Act, and the participation in
opposition, cancellation, infringement and misappropriation proceedings, except,
in each case in which the Debtors have determined, using their commercially
reasonable judgment, that any of the foregoing is not of material economic value
to them. Each Debtor agrees to take corresponding steps with respect to each





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	 	 	 	new or acquired Trademark registration, Trademark application or any rights obtained under
any Trademark License, in each case, which it is now or later becomes entitled, except in
each case in which such Debtor has determined, using its commercially reasonable judgment,
that any of the foregoing is not of material economic value to it. Any expenses incurred in
connection with such activities shall be borne by the Debtors.
	 
	 	(ii)	 	Patents. Each Debtor to take all necessary steps, including, without limitation, in
the United States Patent and Trademark Office or in any court, to (x) defend, enforce,
preserve the validity and ownership of, and maintain each Patent and each Patent License
identified on Schedule 1.1 hereto, and (y) pursue each patent application, now or hereafter
identified on Schedule 1.1 hereto, including, without limitation, the filing of divisional,
continuation, continuation-in-part and substitute applications, the filing of applications for
reissue, renewal or extensions, the payment of maintenance fees, and the participation in
interference, reexamination, opposition, infringement and misappropriation proceedings, except
in each case in which the Debtors have determined, using their commercially reasonable
judgment, that any of the foregoing is not of material economic value to them. Each Debtor
agrees to take corresponding steps with respect to each new or acquired Patent, patent
application, or any rights obtained under any Patent License, in each case, which it is now or
later becomes entitled, except in each case in which the Debtors have determined, using their
commercially reasonable judgment, that any of the foregoing is not of material economic value
to them. Any expenses incurred in connection with such activities shall be borne by the
Debtors.
	 
	 	(iii)	 	Copyrights. Each Debtor agrees to take all necessary steps, including, without
limitation, in the United States Copyright Office or in any court, to (x) defend, enforce,
and preserve the validity and ownership of each Copyright and each Copyright License
identified on Schedule 1.1 hereto, and (y) pursue each Copyright and mask work application,
now or hereafter identified on Schedule 1.1 hereto, including, without limitation, the
payment of applicable fees, and the participation in infringement and misappropriation
proceedings, except in each case in which the Debtors have determined, using their
commercially reasonable judgment, that any of the foregoing is not of material economic value
to them. Each Debtor agrees to take corresponding steps with respect to each new or acquired
Copyright, Copyright and mask work application, or any rights obtained under any Copyright
License, in each case, which it is now or later becomes entitled, except in each case in
which the Debtors have determined, using their commercially reasonable judgment, that any of
the foregoing is not of material economic value to them. Any expenses incurred in connection
with such activities shall be borne by the Debtors.
	 
	 	(iv)	 	No Abandonment. The Debtors shall not abandon any Trademark, Patent, Copyright or
any pending Trademark, Copyright, mask work or





15









 







	 	 	 	Patent application, without the written consent of the Agent, unless the Debtors shall
have previously determined, using their commercially reasonable judgment, that such
use or the pursuit or maintenance of such Trademark registration, Patent, Copyright
registration or pending Trademark, Copyright, mask work or Patent application is not
of material economic value to it, in which case, the Debtors shall give notice of any
such abandonment to the Agent promptly in writing after the determination to abandon
such Intellectual Property Collateral is made.
	 
	 	(v)	 	No Infringement. In the event that a Debtor becomes aware that any item
of the Intellectual Property Collateral which such Debtor has determined, using its
commercially reasonable judgment, to be material to its business is infringed or
misappropriated by a third party, such Debtor shall promptly notify the Agent promptly
and in writing, in reasonable detail, and shall take such actions as such Debtor or the
Agent deems reasonably appropriate under the circumstances to protect such Intellectual
Property Collateral, including, without limitation, suing for infringement or
misappropriation and for an injunction against such infringement or misappropriation.
Any expense incurred in connection with such activities shall be borne by the Debtors.
Each Debtor will advise the Agent promptly and in writing, in reasonable detail, of any
adverse determination or the institution of any proceeding (including, without
limitation, the institution of any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court) regarding any material item of
the Intellectual Property Collateral.






	 	(h)	 	Accounts and Contracts. Each Debtor shall, in accordance with its usual business
practices in effect from time to time, endeavor to collect or cause to be collected from each
account debtor under its Accounts, as and when due, any and all amounts owing under such
Accounts. So long as no Default or Event of Default has occurred and is continuing and except
as otherwise provided in Section 6.3, each Debtor shall have the right to collect and
receive payments on its Accounts, and to use and expend the same in its operations in each
case in compliance with the terms of each of the Credit Agreement.
	 
	 	(i)	 	Vehicles; Aircraft and Vessels. Notwithstanding any other provision of this
Agreement, no Debtor shall be required to make any filings as may be necessary to perfect the
Agent’s Lien on its Vehicles, aircraft and vessels, unless a Default or an Event of Default
has occurred and is continuing, whereupon the Agent may require such filings be made.
	 
	 	(J)	 	[Intentionally Deleted].
	 
	 	(k)	 	Deposit Accounts. Each Debtor agrees to promptly notify the Agent in writing of all
Deposit Accounts, cash collateral accounts or investments accounts opened after the date
hereof (except with Agent), and such Debtor shall take such actions as may be necessary or
deemed desirable by the Agent (including the execution






16











 






	 	 	 	and delivery of an account control agreement in form and substance satisfactory to
the Agent) to grant the Agent a perfected, first priority Lien over each of the
Deposit Accounts, cash collateral accounts or investment accounts disclosed on
Schedule 3.3(b) and over each of the additional accounts disclosed pursuant to this
Section 4.1(k).





     Section 4.2 Encumbrances. Each Debtor shall not create, permit or suffer to exist, and
shall defend the Collateral against any Lien (other than the Permitted Liens, provided that no
Lien, other than the Lien created hereunder, shall exist over the Pledged Shares) or any
restriction upon the pledge or other transfer thereof (other than as specifically permitted in the
Credit Agreement), and shall defend such Debtor’s title to and other rights in the Collateral and
the Agent’s pledge and collateral assignment of and security interest in the Collateral against the
claims and demands of all Persons. Except to the extent permitted by the Credit Agreement or in
connection with any release of Collateral under Section 7.13 hereof (but only to the extent
of any Collateral so released), such Debtor shall do nothing to impair the rights of the Agent in
the Collateral.



     Section 4.3 Disposition of Collateral. Except as otherwise permitted under the Credit
Agreement, no Debtor shall enter into or consummate any transfer or other disposition of
Collateral.



     Section 4.4 Insurance. The Collateral pledged by such Debtor or the Debtors will be
insured (to the extent such Collateral is insurable) with insurance coverage in such amounts and
of such types as are required by the terms of the Credit Agreement. In the case of all such
insurance policies, each such Debtor shall designate the Agent, as mortgagee or lender loss payee
and such policies shall provide that any loss be payable to the Agent, as mortgagee or lender loss
payee, as its interests may appear. Further, upon the request of the Agent, each such Debtor shall
deliver certificates evidencing such policies, including all endorsements thereon and those
required hereunder, to the Agent; and each such Debtor assigns to the Agent, as additional
security hereunder, all its rights to receive proceeds of insurance with respect to the
Collateral. All such insurance shall, by its terms, provide that the applicable carrier shall,
prior to any cancellation before the expiration date thereof, mail ten (10) days’ prior written
notice to the Agent of such cancellation. Each Debtor further shall provide the Agent upon request
with evidence reasonably satisfactory to the Agent that each such Debtor is at all times in
compliance with this paragraph. Upon the occurrence and during the continuance of a Default or an
Event of Default, the Agent may, at its option, act as each such Debtor’s attorney-in-fact in
obtaining, adjusting, settling and compromising such insurance and endorsing any drafts. Upon such
Debtor’s failure to insure the Collateral as required in this covenant, the Agent may, at its
option, procure such insurance and its costs therefor shall be charged to such Debtor, payable on
demand, with interest at the highest rate set forth in the Credit Agreement and added to the
Indebtedness secured hereby. The disposition of proceeds payable to such Debtor of any insurance
on the Collateral (the “Insurance Proceeds”) shall be governed by the following:




	 	(a)	 	provided that no Default or Event of Default has occurred and is continuing
hereunder, (i) if the amount of Insurance Proceeds in respect of any loss or casualty
does not exceed One Million Dollars ($1,000,000), such Debtor shall be entitled, in the
event of such loss or casualty, to receive all such Insurance




17









 






	 	 	 	Proceeds and to apply the same toward the replacement of the Collateral affected
thereby or to the purchase of other assets to be used in such Debtor’s business
(provided that such assets shall be subjected to a first priority Lien in favor of
the Agent and such repurchase of assets shall occur within 270 days of such Debtor
receiving the Insurance Proceeds); and (ii) if the amount of Insurance Proceeds in
respect of any loss or casualty exceeds One Million Dollars ($1,000,000), such
Insurance Proceeds shall be paid to and received by the Agent, for release to such
Debtor for the replacement of the Collateral affected thereby or to the purchase of
other assets to be used in such Debtor’s business (provided that such assets shall be
subjected to a first priority Lien in favor of the Agent); or, upon written request
of such Debtor (accompanied by reasonable supporting documentation), for such other
use or purpose as approved by the Agent, in their reasonable discretion, it being
understood and agreed in connection with any release of funds under this subparagraph
(ii), that the Agent may impose reasonable and customary conditions on the
disbursement of such Insurance Proceeds; and
	 
	 	(b)	 	if a Default or Event of Default has occurred or is continuing and is not waived
as provided in the Credit Agreement, all Insurance Proceeds in respect of any loss or
casualty shall be paid to and received by the Agent, to be applied by the Agent against
the Indebtedness in the manner specified in the Credit Agreement and/or to be held by
the Agent as cash collateral for the Indebtedness, as the Agent may direct in its sole
discretion.





     Section 4.5 Corporate Changes; Books and Records; Inspection Rights. (a) Each Debtor
shall not change its respective name, identity, corporate structure or jurisdiction of
organization, or identification number in any manner that might make any financing statement filed
in connection with this Agreement seriously misleading within the meaning of Section 9-506 of the
UCC unless such Debtor shall have given the Agent ten (10) days prior written notice with respect
to any change in such Debtor’s corporate structure, jurisdiction of organization, name or identity
and shall have taken all action deemed reasonably necessary by the Agent under the circumstances
to protect its Liens and the perfection and priority thereof, (b) each Debtor shall keep the
Records at the location specified on Schedule 3.2 as the location of such books and records or as
otherwise specified in writing to the Agent and (c) the Debtors shall permit the Agent, the Banks,
and their respective agents and representatives to conduct inspections, discussion and audits of
the Collateral in accordance with the terms of the Credit Agreement.



     Section 4.6 Notification of Lien; Continuing Disclosure. Each Debtor shall promptly
notify the Agent in writing of any Lien, encumbrance or claim (other than a Permitted Lien, to the
extent not otherwise subject to any notice requirements under the Credit Agreement) that has
attached to or been made or asserted against any of the Collateral upon becoming aware of the
existence of such Lien, encumbrance or claim.



     Section 4.7 Covenants Regarding Pledged Shares



     (a) Voting Rights and Distributions.



18









 






	 	(i)	 	So long as no Default or Event of Default shall have occurred and be continuing
(both before and after giving effect to any of the actions or other matters described in
clauses (A) or (B) of this subparagraph):






	 	(A)	 	Each Debtor shall be entitled to exercise any and all voting and other
consensual rights (including, without limitation, the right to give consents,
waivers and ratifications) pertaining to any of the Pledged Shares or any part
thereof; provided, however, that no vote shall be cast or consent, waiver or
ratification given or action taken without the prior written consent of the Agent
which would violate any provision of this Agreement or the Credit Agreement; and
	 
	 	(B)	 	Except as otherwise provided by the Credit Agreement, such Debtor shall be
entitled to receive and retain any and all dividends, distributions and interest
paid in respect to any of the Pledged Shares.






	 	(ii)	 	Upon the occurrence and during the continuance of a Default or an Event of Default:






	 	(A)	 	The Agent may, without notice to such Debtor, transfer or register in the
name of the Agent or any of its nominees, for the equal and ratable benefit of the
Banks, any or all of the Pledged Shares and the Proceeds thereof (in cash or
otherwise) held by the Agent hereunder, and the Agent or its nominee may thereafter,
after delivery of notice to such Debtor, exercise all voting and corporate rights at
any meeting of any corporation issuing any of the Pledged Shares and any and all
rights of conversion, exchange, subscription or any other rights, privileges or
options pertaining to any of the Pledged Shares as if the Agent were the absolute
owner thereof, including, without limitation, the right to exchange, at its
discretion, any and all of the Pledged Shares upon the merger, consolidation,
reorganization, recapitalization or other readjustment of any corporation issuing any
of such Pledged Shares or upon the exercise by any such issuer or the Agent of any
right, privilege or option pertaining to any of the Pledged Shares, and in connection
therewith, to deposit and deliver any and all of the Pledged Shares with any
committee, depositary, transfer agent, registrar or other designated agency upon such
terms and conditions as the Agent may determine, all without liability except to
account for property actually received by it, but the Agent shall have no duty to
exercise any of the aforesaid rights, privileges or options, and the Agent shall not
be responsible for any failure to do so or delay in so doing.




19









 






	 	(B)	 	All rights of such Debtor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to Section 4.7(a)(i)(A) and to receive the
dividends, interest and other distributions which it would otherwise
be authorized to receive and retain pursuant to Section
4.7(a)(i)(B) shall be suspended until such Default or Event of
Default shall no longer exist, and all such rights shall, until such
Default or Event of Default shall no longer exist, thereupon become
vested in the Agent which shall thereupon have the sole right to
exercise such voting and other consensual rights and to receive,
hold and dispose of as Pledged Shares such dividends, interest and
other distributions.
	 
	 	(C)	 	All dividends, interest and other distributions
which are received by such Debtor contrary to the provisions of this
Section 4.7(a)(ii) shall be received in trust for the benefit
of the Agent, shall be segregated from other funds of such Debtor and
shall be forthwith paid over to the Agent as Collateral in the same
form as so received (with any necessary endorsement).
	 
	 	(D)	 	Each Debtor shall execute and deliver (or cause
to be executed and delivered) to the Agent all such proxies and other
instruments as the Agent may reasonably request for the purpose of
enabling the Agent to exercise the voting and other rights which it is
entitled to exercise pursuant to this Section 4.7(a)(ii) and to
receive the dividends, interest and other distributions which it is
entitled to receive and retain pursuant to this Section
4.7(a)(ii). The foregoing shall not in any way limit the Agent’s
power and authority granted pursuant to the other provisions of this
Agreement.





     (b) Possession; Reasonable Care. Regardless of whether a Default or an Event of
Default has occurred or is continuing, the Agent shall have the right to hold in its possession all
Pledged Shares pledged, assigned or transferred hereunder and from time to time constituting a
portion of the Collateral. The Agent may appoint one or more agents (which in no case shall be a
Debtor or an affiliate of a Debtor) to hold physical custody, for the account of the Agent, of any
or all of the Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Agent accords its own property, it being understood
that the Agent shall not have any responsibility for (i) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral,
whether or not the Agent has or is deemed to have knowledge of such matters, or (ii) taking any
necessary steps to preserve rights against any parties with respect to any Collateral, except,
subject to the terms hereof, upon the written instructions of the Banks. Following the occurrence
and continuance of an Event of Default, the Agent shall be entitled to take ownership of the
Collateral in accordance with the UCC.





20









 





     Section 4.8 New Subsidiaries; Additional Collateral




	 	(a)	 	With respect to each Domestic Subsidiary which becomes a Material Subsidiary of a
Debtor subsequent to the date hereof or which is otherwise required under the provisions of
Section 7.13 of the Credit Agreement to execute and deliver a Guaranty, execute and deliver
such joinders or security agreements or other pledge documents as are required by the
Credit Agreement, within the time periods set forth therein.
	 
	 	(b)	 	Each Debtor agrees that, (i) except with the written consent of the Agent, it will not
permit any Domestic Subsidiary (whether now existing or formed after the date hereof) to
issue to such Debtor or any of such Debtor’s other Subsidiaries any shares of stock,
membership interests, partnership units, notes or other securities or instruments (including
without limitation the Pledged Shares) in addition to or in substitution for any of the
Collateral, unless, concurrently with each issuance thereof, any and all such shares of
stock, membership interests, partnership units, notes or instruments are encumbered in favor
of the Agent under this Agreement or otherwise (except that only 65% of such shares of stock,
membership interests or partnership units of Foreign Subsidiaries are required to be
encumbered in favor of Agent) (it being understood and agreed that all such shares of stock,
membership interests, partnership units, notes or instruments issued to such Debtor shall,
without further action by such Debtor or the Agent, be automatically encumbered by this
Agreement as Pledged Shares to the extent required under the terms of this Agreement or the
Credit Agreement) and (ii) it will promptly following the issuance thereof deliver to the
Agent (A) an amendment, duly executed by such Debtor, in substantially the form of Exhibit A
hereto in respect of such shares of stock, membership interests, partnership units, notes or
instruments issued to Debtor or (B) if reasonably required by the Banks, a new stock pledge,
duly executed by the applicable Debtor, in substantially the form of this Agreement (a
“New Pledge”), in respect of such shares of stock, membership interests, partnership
units, notes or instruments issued to any Debtor granting to the Agent, for the benefit of
the Banks, a first priority security interest, pledge and Lien thereon, together in each case
with all certificates, notes or other instruments representing or evidencing the same,
together with such other documentation as the Agent may reasonably request. Such Debtor
hereby (x) authorizes the Agent to attach each such amendment to this Agreement, (y) agrees
that all such shares of stock, membership interests, partnership units, notes or instruments
listed in any such amendment delivered to the Agent shall for all purposes hereunder
constitute Pledged Shares, and (z) is deemed to have made, upon the delivery of each such
amendment, the representations and warranties contained in Section 3.4 of this
Agreement with respect to the Collateral covered thereby.
	 
	 	(c)	 	With respect to any Intellectual Property Collateral owned, licensed or otherwise acquired
by any Debtor after the date hereof, and with respect to any Patent, Trademark or Copyright
which is not registered or filed with the U.S. Patent and Trademark Office and/or the U.S.
Copyright Office at the time such Collateral is pledged by a Debtor to the Agent pursuant to
this Security Agreement, and which is subsequently registered or filed by such Debtor in the
appropriate office, such




21









 






	 	 	 	Debtor shall promptly after the acquisition or registration thereof execute or cause
to be executed and delivered to the Agent, (i) an amendment, duly executed by such
Debtor, in substantially the form of Exhibit A hereto, in respect of such additional
or newly registered collateral or (ii) at the Agent’s option, a new security
agreement, duly executed by the applicable Debtor, in substantially the form of this
Agreement, in respect of such additional or newly registered collateral, granting to
the Agent, for the benefit of the Banks, a first priority security interest, pledge
and Lien thereon (subject only to the Permitted Liens), together in each case with
all certificates, notes or other instruments representing or evidencing the same,
and shall, upon the Agent’s request, execute or cause to be executed any financing
statement or other document (including without limitation, filings required by the
U.S. Patent and Trademark Office and/or the U.S. Copyright Office in connection with
any such additional or newly registered collateral) granting or otherwise evidencing
a Lien over such new Intellectual Property Collateral. Each Debtor hereby (x)
authorizes the Agent to attach each amendment to this Agreement, (y) agrees that all
such additional collateral listed in any amendment delivered to the Agent shall for
all purposes hereunder constitute Collateral, and (z) is deemed to have made, upon
the delivery of each such Amendment, the representations and warranties contained in
Section 3.3(d) and Section 3.5 of this Agreement with
respect to the Collateral covered thereby.





     Section 4.9 Further Assurances (a) At any time and from time to time, upon the request
of the Agent, and at the sole expense of the Debtors, each Debtor shall promptly execute and
deliver all such further agreements, documents and instruments and take such further action as the
Agent may reasonably deem necessary or appropriate to (i) preserve, ensure the priority,
effectiveness and validity of and perfect the Agent’s security interest in and pledge and
collateral assignment of the Collateral (including causing the Agent’s name to be noted as secured
party on any certificate of title for a titled good if such notation is a condition of the Agent’s
ability to enforce its security interest in such Collateral), unless such actions are specifically
waived under the terms of this Agreement and the other Loan Documents, (ii) carry out the
provisions and purposes of this Agreement and (iii) to enable the Agent to exercise and enforce its
rights and remedies hereunder with respect to any of the Collateral. Except as otherwise expressly
permitted by the terms of the Credit Agreement relating to disposition of assets and except for
Permitted Liens (except for Pledged Shares, over which the only Lien shall be that Lien established
under this Agreement), each Debtor agrees to maintain and preserve the Agent’s security interest in
and pledge and collateral assignment of the Collateral hereunder and the priority thereof.



     (b) Each Debtor hereby irrevocably authorizes the Agent at any time and from time to time to
file in any filing office in any jurisdiction any initial financing statements and amendments
thereto that (i) indicate any or all of the Collateral upon which the Debtors have granted a Lien,
and (ii) provide any other information required by Part 5 of Article 9 of the UCC, including
organizational information and in the case of a fixture filing or a filing for Collateral
consisting of as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Each Debtor agrees to furnish any such information
required by the preceding paragraph to the Agent promptly upon the Agent’s reasonable request for
such information.



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ARTICLE 5

Rights of the Agent




     Section 5.1 Power of Attorney. Each Debtor hereby irrevocably constitutes and appoints
the Agent and any officer or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the name of such Debtor or in its own
name, to take, after the occurrence and during the continuance of an Event of Default, any and all
actions, and to execute any and all documents and instruments which the Agent at any time and from
time to time deems necessary, to accomplish the purposes of this Agreement and, without limiting
the generality of the foregoing, such Debtor hereby gives the Agent the power and right on behalf
of such Debtor and in its own name to do any of the following after the occurrence and during the
continuance of an Event of Default, without notice to or the consent of such Debtor:




	 	(a)	 	to demand, sue for, collect or receive, in the name of such Debtor or in its own
name, any money or property at any time payable or receivable on account of or in
exchange for any of the Collateral and, in connection therewith, endorse checks, notes,
drafts, acceptances, money orders, documents of title or any other instruments for the
payment of money under the Collateral or any policy of insurance;
	 
	 	(b)	 	to pay or discharge taxes, Liens (other than Permitted Liens) or other
encumbrances levied or placed on or threatened against the Collateral;
	 
	 	(c)	 	(i) to direct account debtors and any other parties liable for any payment under
any of the Collateral to make payment of any and all monies due and to become due
thereunder directly to the Agent or as the Agent shall direct; (ii) to receive payment
of and receipt for any and all monies, claims and other amounts due and to become due
at any time in respect of or arising out of any Collateral; (iii) to sign and endorse
any invoices, freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, proxies, stock powers, verifications and notices
in connection with accounts and other documents relating to the Collateral; (iv) to
commence and prosecute any suit, action or proceeding at law or in equity in any court
of competent jurisdiction to collect the Collateral or any part thereof and to enforce
any other right in respect of any Collateral; (v) to defend any suit, action or
proceeding brought against such Debtor with respect to any Collateral; (vi) to settle,
compromise or adjust any suit, action or proceeding described above and, in connection
therewith, to give such discharges or releases as the Agent may deem appropriate; (vii)
to exchange any of the Collateral for other property upon any merger, consolidation,
reorganization, recapitalization or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Collateral with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms as the Agent may
determine; (viii) to add or release any guarantor, indorser, surety or other party to
any of the Collateral; (ix) to renew, extend or otherwise change the terms and
conditions of any of the Collateral; (x) to make, settle, compromise or adjust any
claim under or pertaining to any of the Collateral (including claims




23









 






	 	 	 	under any policy of insurance); (xi) subject to any pre-existing rights or
licenses, to assign any Patent, Copyright or Trademark constituting Intellectual
Property Collateral (along with the goodwill of the business to which any such
Patent, Copyright or Trademark pertains), for such term or terms, on such
conditions and in such manner, as the Agent shall in its sole discretion determine,
and (xii) to sell, transfer, pledge, convey, make any agreement with respect to, or
otherwise deal with, any of the Collateral as fully and completely as though the
Agent were the absolute owner thereof for all purposes, and to do, at the Agent’s
option and such Debtor’s expense, at any time, or from time to time, all acts and
things which the Agent deems necessary to protect, preserve, maintain, or realize
upon the Collateral and the Agent’s security interest therein.





     This power of attorney is a power coupled with an interest and shall be irrevocable. The
Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent in this Agreement, and shall
not be liable for any failure to do so or any delay in doing so. This power of attorney is
conferred on the Agent solely to protect, preserve, maintain and realize upon its security
interest in the Collateral. The Agent shall not be responsible for any decline in the value of the
Collateral and shall not be required to take any steps to preserve rights against prior parties or
to protect, preserve or maintain any Lien given to secure the Collateral.



     Section 5.2 Setoff. In addition to and not in limitation of any rights of any Banks
under applicable law, the Agent and each Bank shall, upon the occurrence and continuance of an
Event of Default, without notice or demand of any kind, have the right to appropriate and apply to
the payment of the Indebtedness owing to it (whether or not then due) any and all balances,
credits, deposits, accounts or moneys of Debtors then or thereafter on deposit with such Banks;
provided, however, that any such amount so applied by any Bank on any of the Indebtedness owing to
it shall be subject to the provisions of the Credit Agreement.



     Section 5.3 Assignment by the Agent. The Agent may at any time assign or otherwise
transfer all or any portion of its rights and obligations as Agent under this Agreement and the
other Loan Documents (including, without limitation, the Indebtedness) to any other Person, to the
extent permitted by, and upon the conditions contained in, the Credit Agreement and such Person
shall thereupon become vested with all the benefits and obligations thereof granted to the Agent
herein or otherwise.



     Section 5.4 Performance by the Agent. If any Debtor shall fail to perform any
covenant or agreement contained in this Agreement in accordance with this Agreement and the other
Loan Documents, the Agent may (but shall not be obligated to) perform or attempt to perform such
covenant or agreement on behalf of the Debtors, in which case Agent shall exercise good faith and
make diligent efforts to give Debtors prompt prior written notice of such performance or attempted
performance. In such event, the Debtors shall, at the request of the Agent, promptly pay any
reasonable amount expended by the Agent in connection with such performance or attempted
performance to the Agent, together with interest thereon at the interest rate set forth in the
Credit Agreement, from and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is



24









 




expressly agreed that the Agent shall not have any liability or responsibility for the performance
(or non-performance) of any obligation of the Debtors under this Agreement.




     Section 5.5 Certain Costs and Expenses. The Debtors shall pay or reimburse the Agent
within five (5) Business Days after demand for all reasonable costs and expenses (including
reasonable attorney’s and paralegal fees) incurred by it in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this Agreement or any other
Loan Document during the existence of an Event of Default or after acceleration of any of the
Indebtedness (including in connection with any “workout” or restructuring regarding the
Indebtedness, and including in any insolvency proceeding or appellate proceeding). The agreements
in this Section 5.5 shall survive the payment in full of the Indebtedness. Notwithstanding
the foregoing, the reimbursement of any fees and expenses incurred by the Banks shall be governed
by the terms and conditions of the applicable Credit Agreement.



     Section 5.6 Indemnification. The Debtors shall indemnify, defend and hold the Agent,
and each Bank and each of their respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an “Indemnified Person”) harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges,
expenses and disbursements (including reasonable attorneys’ and paralegals’ fees) of any kind or
nature whatsoever which may at any time (including at any time following repayment of the
Indebtedness and the termination, resignation or replacement of the Agent or replacement of any
Bank) be imposed on, incurred by or asserted against any such Indemnified Person in any way
relating to or arising out of this Agreement or any other Loan Document or any document relating
to or arising out of or referred to in this Agreement or any other Loan Document, or the
transactions contemplated hereby, or any action taken or omitted by any such Indemnified Person
under or in connection with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any bankruptcy proceeding or appellate proceeding) related to
or arising out of this Agreement or the Indebtedness or the use of the proceeds thereof, whether
or not any Indemnified Person is a party thereto (all the foregoing, collectively, the
“Indemnified Liabilities”); provided, that the Debtors shall have no obligation
under this Section 5.6 to any Indemnified Person with respect to Indemnified Liabilities
to the extent resulting from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section 5.6 shall survive payment of all other
Indebtedness.



ARTICLE 6

Default




     Section 6.1 Rights and Remedies. If an Event of Default shall have occurred and be
continuing, the Agent shall have the following rights and remedies subject to the direction and/or
consent of the Banks as required under the Credit Agreement:




	 	(a)	 	The Agent may exercise any of the rights and remedies set forth in this
Agreement (including, without limitation, Article 5 hereof), in the Credit
Agreement, or in any other Loan Document, or by applicable law.




25









 






	 	(b)	 	In addition to all other rights and remedies granted to the Agent in this Agreement,
the Credit Agreement or by applicable law, the Agent shall have all of the rights and
remedies of a secured party under the UCC (whether or not the UCC applies to the affected
Collateral) and the Agent may also, without previous demand or notice except as specified
below or in the Credit Agreement, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker’s board or at any of the Agent’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Agent may, in its reasonable discretion, deem commercially reasonable or otherwise as
may be permitted by law. Without limiting the generality of the foregoing, the Agent may (i)
without demand or notice to the Debtors (except as required under the Credit Agreement or
applicable law), collect, receive or take possession of the Collateral or any part thereof,
and for that purpose the Agent (and/or its Agents, servicers or other independent
contractors) may enter upon any premises on which the Collateral is located and remove the
Collateral therefrom or render it inoperable, and/or (ii) sell, lease or otherwise dispose
of the Collateral, or any part thereof, in one or more parcels at public or private sale or
sales, at the Agent’s offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may, in its reasonable discretion, deem commercially
reasonable or otherwise as may be permitted by law. The Agent and, subject to the terms of
the Credit Agreement, each of the Banks shall have the right at any public sale or sales,
and, to the extent permitted by applicable law, at any private sale or sales, to bid (which
bid may be, in whole or in part, in the form of cancellation of indebtedness) and become a
purchaser of the Collateral or any part thereof free of any right of redemption on the part
of the Debtors, which right of redemption is hereby expressly waived and released by the
Debtors to the extent permitted by applicable law. The Agent may require the Debtors to
assemble the Collateral and make it available to the Agent at any place designated by the
Agent to allow the Agent to take possession or dispose of such Collateral. The Debtors agree
that the Agent shall not be obligated to give more than five (5) days prior written notice
of the time and place of any public sale or of the time after which any private sale may
take place and that such notice shall constitute reasonable notice of such matters. The
foregoing shall not require notice if none is required by applicable law. The Agent shall
not be obligated to make any sale of Collateral if, in the exercise of its reasonable
discretion, it shall determine not to do so, regardless of the fact that notice of sale of
Collateral may have been given. The Agent may, without notice or publication (except as
required by applicable law), adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for sale, and such
sale may, without further notice, be made at the time and place to which the same was so
adjourned. The Debtors shall be liable for all reasonable expenses of retaking, holding,
preparing for sale or the like, and all reasonable attorneys’ fees, legal expenses and other
costs and expenses incurred by the Agent in connection with the collection of the
Indebtedness and the enforcement of the Agent’s rights under this Agreement and the Credit
Agreement. The Debtors shall, to the extent permitted by applicable law, remain liable for
any deficiency if the proceeds of




26









 






	 	 	 	any such sale or other disposition of the Collateral (conducted in conformity with this
clause (ii) and applicable law) applied to the Indebtedness are insufficient to pay the
Indebtedness in full. The Agent shall apply the proceeds from the sale of the Collateral
hereunder against the Indebtedness in such order and manner as provided in the Credit
Agreement.
	 
	 	(c)	 	The Agent may cause any or all of the Collateral held by it to be transferred into the name
of the Agent or the name or names of the Agent’s nominee or nominees.
	 
	 	(d)	 	The Agent may exercise any and all rights and remedies of the Debtors under or in respect of
the Collateral, including, without limitation, any and all rights of the Debtors to demand or
otherwise require payment of any amount under, or performance of any provision of any of the
Collateral and any and all voting rights and corporate powers in respect of the Collateral.
	 
	 	(e)	 	On any sale of the Collateral, the Agent is hereby authorized to comply with any limitation
or restriction with which compliance is necessary (based on a reasoned opinion of the Agent’s
counsel) in order to avoid any violation of applicable law or in order to obtain any required
approval of the purchaser or purchasers by any applicable Governmental Authority.
	 
	 	(f)	 	The Agent may direct account debtors and any other parties liable for any payment under any
of the Collateral to make payment of any and all monies due and to become due thereunder
directly to the Agent or as the Agent shall direct.
	 
	 	(g)	 	In the event of any sale, assignment or other disposition of the Intellectual Property
Collateral, the goodwill of the business connected with and symbolized by any Collateral
subject to such disposition shall be included, and the Debtors shall supply to the Agent or
its designee the Debtors’ know-how and expertise related to the Intellectual Property
Collateral subject to such disposition, and the Debtors’ notebooks, studies, reports,
records, documents and things embodying the same or relating to the inventions, processes or
ideas covered by and to the manufacture of any products under or in connection with the
Intellectual Property Collateral subject to such disposition.
	 
	 	(h)	 	For purposes of enabling the Agent to exercise its rights and remedies under this
Section 6.1 and enabling the Agent and its successors and assigns to enjoy the full
benefits of the Collateral, the Debtors hereby grant to the Agent an irrevocable,
nonexclusive license (exercisable without payment of royalty or other compensation to the
Debtors) to use, assign, license or sublicense any of the Intellectual Property Collateral,
Computer Records or Software (including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and all computer programs used for
the completion or printout thereof), exercisable upon the occurrence and during the
continuance of a Default or an Event of Default (and thereafter if Agent succeeds to any of
the Collateral pursuant to an enforcement proceeding or voluntary arrangement with Debtor),
except as may be prohibited by any licensing agreement relating to such




27









 






	 	 	 	Computer Records or Software. This license shall also inure to the benefit of all
successors, assigns, transferees of and purchasers from the Agent.





     Section 6.2 Private Sales.




	 	(a)	 	In view of the fact that applicable securities laws may impose certain restrictions on the
method by which a sale of the Pledged Shares may be effected after an Event of Default,
Debtors agree that upon the occurrence and during the continuance of an Event of Default, the
Agent may from time to time attempt to sell all or any part of the Pledged Shares by a private
sale in the nature of a private placement, restricting the bidders and prospective purchasers
to those who will represent and agree that they are “accredited investors” within the meaning
of Regulation D promulgated pursuant to the Securities Act of 1933, as amended (the
“Securities Act”), and are purchasing for investment only and not for distribution. In
so doing, the Agent may solicit offers for the Pledged Shares, or any part thereof, from a
limited number of investors who might be interested in purchasing the Pledged Shares. Without
limiting the methods or manner of disposition which could be determined to be commercially
reasonable, if the Agent hires a firm of regional or national reputation that is engaged in
the business of rendering investment banking and brokerage services to solicit such offers and
facilitate the sale of the Pledged Shares, then the Agent’s acceptance of the highest offer
(including its own offer, or the offer of any of the Banks at any such sale) obtained through
such efforts of such firm shall be deemed to be a commercially reasonable method of
disposition of such Pledged Shares. The Agent shall not be under any obligation to delay a
sale of any of the Pledged Shares for the period of time necessary to permit the issuer of
such securities to register such securities under the laws of any jurisdiction outside the
United States, under the Securities Act or under any applicable state securities laws, even if
such issuer would agree to do so.
	 
	 	(b)	 	The Debtors further agree to do or cause to be done, to the extent that the Debtors may do
so under applicable law, all such other reasonable acts and things as may be necessary to
make such sales or resales of any portion or all of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees
or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, all at the Debtors’ expense.





     Section 6.3 Establishment of Cash Collateral Account; and Lock Box.




	 	(a)	 	Immediately upon the occurrence and during the continuance of an Event of Default (without
the necessity of any notice hereunder), there may be established upon the request of the
Agent by each Debtor with the Agent, for the benefit of the Banks in the name of the Agent, a
segregated non-interest bearing cash collateral account (the “Cash Collateral
Account”) bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Agent and the Banks; provided, however, that the Cash Collateral
Account may be an




28









 






	 	 	 	interest-bearing account with a commercial bank (including Comerica or any other Bank
which is a commercial bank) if determined by the Agent, in its reasonable discretion, to
be practicable, invested by the Agent in its sole discretion, but without any liability
for losses or the failure to achieve any particular rate of return. Furthermore, in
connection with the establishment of a Cash Collateral Account under the first sentence of
this Section 6.3 (and on the terms and within the time periods provided
thereunder), (i) each Debtor agrees to establish and maintain (and the Agent, acting at
the request of the Banks, may establish and maintain) at Debtor’s sole expense a United
States Post Office lock box (the “Lock Box”), to which the Agent shall have
exclusive access and control. Each Debtor expressly authorizes the Agent, from time to
time, to remove the contents from the Lock Box for disposition in accordance with this
Agreement; and (ii) each Debtor shall notify all account debtors that all payments made to
Debtor (a) other than by electronic funds transfer, shall be remitted, for the credit of
Debtor, to the Lock Box, and Debtor shall include a like statement on all invoices, and
(b) by electronic funds transfer, shall be remitted to the Cash Collateral Account, and
Debtor shall include a like statement on all invoices. Each Debtor agrees to execute all
documents and authorizations as reasonably required by the Agent to establish and maintain
the Lock Box and the Cash Collateral Account. It is acknowledged by the parties hereto
that any lockbox presently maintained or subsequently established by a Debtor with the
Agent may be used, subject to the terms hereof, to satisfy the requirements set forth in
the first sentence of this Section 6.3.
	 
	 	(b)	 	Immediately upon the occurrence and during the continuance of an Event of Default, any and
all cash (including amounts received by electronic funds transfer), checks, drafts and other
instruments for the payment of money received by each Debtor at any time, in full or partial
payment of any of the Collateral consisting of Accounts or Inventory, shall forthwith upon
receipt be transmitted and delivered to the Agent, properly endorsed, where required, so that
such items may be collected by the Agent. Any such amounts and other items received by a
Debtor shall not be commingled with any other of such Debtor’s funds or property, but will be
held separate and apart from such Debtor’s own funds or property, and upon express trust for
the benefit of the Agent until delivery is made to the Agent. All items or amounts which are
remitted to a Lock Box or otherwise delivered by or for the benefit of a Debtor to the Agent
on account of partial or full payment of, or any other amount payable with respect to, any of
the Collateral shall, at the Agent’s option, be applied to any of the Indebtedness, whether
then due or not, in the order and manner set forth in the Credit Agreement. No Debtor shall
have any right whatsoever to withdraw any funds so deposited. Each Debtor further grants to
the Agent a first security interest in and Lien on all funds on deposit in such account. Each
Debtor hereby irrevocably authorizes and directs the Agent to endorse all items received for
deposit to the Cash Collateral Account, notwithstanding the inclusion on any such item of a
restrictive notation, e.g., “paid in full”, “balance of account”, or other restriction.




29









 











     Section 6.4 Default Under Credit Agreement. Subject to any applicable notice and cure
provisions contained in the Credit Agreement, the occurrence of any Event of Default (as defined in
the Credit Agreement), including without limit a breach of any of the provisions of this Agreement,
shall be deemed to be an Event of Default under this Agreement. This Section 6.4 shall not
limit the Events of Default set forth in the Credit Agreement.



ARTICLE 7

Miscellaneous




     Section 7.1 No Waiver; Cumulative Remedies. No failure on the part of the Agent to
exercise and no delay in exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies
provided for in this Agreement are cumulative and not exclusive of any rights and remedies
provided by law.



     Section 7.2 Successors and Assigns. Subject to the terms and conditions of the Credit
Agreement, this Agreement shall be binding upon and inure to the benefit of the Debtors and the
Agent and their respective heirs, successors and assigns, except that the Debtors may not assign
any of their rights or obligations under this Agreement without the prior written consent of the
Agent.



     Section 7.3 AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT, THE CREDIT AGREEMENT
REFERRED TO HEREIN AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO. The provisions of this Agreement may be amended or waived only by an instrument in writing
signed by the parties hereto.



     Section 7.4 Notices. All notices, requests, consents, approvals, waivers and other
communications hereunder shall be in writing (including, by facsimile transmission) and mailed,
faxed or delivered to the address or facsimile number specified for notices on signature pages
hereto; or, as directed to the Debtors or the Agent, to such other address or number as shall be
designated by such party in a written notice to the other. All such notices, requests and
communications shall, when sent by overnight delivery, or faxed, be effective when delivered for
overnight (next business day) delivery, or transmitted in legible form by facsimile machine (with
electronic confirmation of receipt), respectively, or if mailed, upon the third Business Day after
the date deposited into the U.S. mail, or if otherwise delivered, upon delivery; except that
notices to the Agent shall not be effective until actually received by the Agent.



30









 





     Section 7.5 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS.




	 	(a)	 	THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA.
	 
	 	(b)	 	ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA SITTING IN THE COUNTY
OF SANTA CLARA OR OF THE UNITED STATES FOR THE___NORTHERN DISTRICT OF CALIFORNIA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE DEBTOR AND THE AGENT CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. EACH OF THE DEBTOR AND THE AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY LOAN DOCUMENT.





     Section 7.6 Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of this Agreement.



     Section 7.7 Survival of Representations and Warranties. All representations and
warranties made in this Agreement or in any certificate delivered pursuant hereto shall survive
the execution and delivery of this Agreement, and no investigation by the Agent shall affect the
representations and warranties or the right of the Agent or the Banks to rely upon them.



     Section 7.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.



     Section 7.9 Waiver of Bond. In the event the Agent seeks to take possession of any
or all of the Collateral by judicial process, the Debtors hereby irrevocably waive any bonds and
any surety or security relating thereto that may be required by applicable law as an incident to
such possession, and waives any demand for possession prior to the commencement of any such suit
or action.



     Section 7.10 Severability. Any provision of this Agreement which is determined by a
court of competent jurisdiction to be prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.




31












 





     Section 7.11 Construction. Each Debtor and the Agent acknowledge that each of them has
had the benefit of legal counsel of its own choice and has been afforded an opportunity to review
this Agreement with its legal counsel and that this Agreement shall be construed as if jointly
drafted by the Debtors and the Agent.



     Section 7.12 Termination. If all of the Indebtedness (other than contingent
liabilities pursuant to any indemnity, including without limitation Section 5.5 and
Section 5.6 hereof, for claims which have not been asserted, or which have not yet
accrued) shall have been indefeasibly paid and performed in full (in cash) and all commitments to
extend credit or other credit accommodations under the Credit Agreement have been terminated, the
Agent shall, upon the written request of the Debtors, execute and deliver to the Debtors a proper
instrument or instruments acknowledging the release and termination of the security interests
created by this Agreement, and shall duly assign and deliver to the Debtors (without recourse and
without any representation or warranty) such of the Collateral as may be in the possession of the
Agent and has not previously been sold or otherwise applied pursuant to this Agreement.



     Section 7.13 Release of Collateral. The Agent shall, upon the written request of the
Debtors, execute and deliver to the Debtors a proper instrument or instruments acknowledging the
release of the security interest and Liens established hereby on any Collateral (other than the
Pledged Shares): (a) if the sale or other disposition of such Collateral is permitted under the
terms of the Credit Agreement and, at the time of such proposed release, both before and after
giving effect thereto, no Default or Event of Default has occurred and is continuing, (b) if the
sale or other disposition of such Collateral is not permitted under the terms of the Credit
Agreement, provided that the requisite Banks under such Credit Agreement shall have consented to
such sale or disposition in accordance with the terms thereof, or (c) if such release has been
approved by the requisite Banks in accordance with Section 12.11 of the Credit Agreement.



     Section 7.14 WAIVER OF JURY TRIAL. EACH DEBTOR AND THE AGENT WAIVES ITS RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY EITHER SUCH PARTY AGAINST THE OTHER,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH DEBTOR AND THE AGENT
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, EACH SUCH PARTY FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY
IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.



     Section 7.15 Consistent Application. The rights and duties created by this Agreement shall,
in all cases, be interpreted consistently with, and shall be in addition to (and



32









 







not in lieu
of), the rights and duties created by the Credit Agreement or the other Loan Documents. In the event that any provision of this Agreement shall be inconsistent with any provision of the
Credit Agreement, such provision of the Credit Agreement shall govern.



     Section 7.16 Continuing Lien. The security interest granted under this Security
Agreement shall be a continuing security interest in every respect (whether or not the outstanding
balance of the Indebtedness is from time to time temporarily reduced to zero) and the Agent’s
security interest in the Collateral as granted herein shall continue in fall force and effect for
the entire duration that the Credit Agreement remains in effect and until all of the Indebtedness
are repaid and discharged in full, and no commitment (whether optional or obligatory) to extend any
credit under the Credit Agreement remain outstanding.



33









 





     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day
and year first written above.



	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	DEBTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	QUINSTREET, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	Address for Notices:	 	 
	 	 	1051 East Hillsdale Blvd.	 	 
	 	 	Foster City, California 94404	 	 
	 	 	Fax No.: (650) 578-7604	 	 
	 	 	Telephone No.:	 	 
	 

	 	Attention: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	QUINSTREET PROPERTIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 	 	Address for Notices:	 	 
	 	 	1051 East Hillsdale Blvd.	 	 
	 	 	Foster City, California 94404	 	 
	 	 	Fax No.: (650) 578-7604	 	 
	 	 	Telephone No.:	 	 
	 	 	Attention: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	QUINSTREET LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 	 	Address for Notices:	 	 
	 	 	1051 East Hillsdale Blvd.	 	 
	 	 	Foster City, California 94404	 	 
	 	 	Fax No.: (650) 578-7604	 	 
	 	 	Telephone No.:	 	 
	 	 	Attention: Chief Financial Officer	 	 






34









 






	 	 	 	 	 	 	 
	 	 	QUINSTREET MEDIA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 	 	Address for Notices:	 	 
	 	 	1051 East Hillsdale Blvd.	 	 
	 	 	Foster City, California 94404	 	 
	 	 	Fax No.: (650) 578-7604	 	 
	 	 	Telephone No.:	 	 
	 	 	Attention: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CYBERSPACE COMMUNICATIONS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 	 	Address for Notices:	 	 
	 	 	1051 East Hillsdale Blvd.	 	 
	 	 	Foster City, California 94404	 	 
	 	 	Fax No.: (650) 578-7604	 	 
	 	 	Telephone No.:	 	 
	 	 	Attention: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	RELIABLEREMODELER.COM, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 	 	Address for Notices:	 	 
	 	 	1051 East Hillsdale Blvd.	 	 
	 	 	Foster City, California 94404	 	 
	 	 	Fax No.: (650) 578-7604	 	 
	 	 	Telephone No.:	 	 
	 	 	Attention: Chief Financial Officer	 	 






35









 






	 	 	 	 	 	 	 
	 	 	HQ PUBLICATIONS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 	 	Address for Notices:	 	 
	 	 	1051 East Hillsdale Blvd.	 	 
	 	 	Foster City, California 94404	 	 
	 	 	Fax No.: (650) 578-7604	 	 
	 	 	Telephone No.:	 	 
	 	 	Attention: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	COMERICA BANK, as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Address for Notices:	 	 
	 	 	75 East Trimble Road, M/C 4770	 	 
	 	 	San Jose, California 95131	 	 
	 	 	Attention: Manager	 	 
	 	 	Fax No.: (408) 556-5091	 	 
	 
	 	 	 	 	 	 
	 	 	With a copy to:	 	 
	 
	 	 	 	 	 	 
	 	 	Comerica Bank	 	 
	 	 	2 Embarcadero Center, Suite 300	 	 
	 	 	San Francisco, CA 94111	 	 
	 	 	Attn: Phil Koblis — Vice President	 	 
	 	 	Fax No.: (415) 477-3260	 	 






36









 






EXHIBIT A




TO




SECURITY AGREEMENT




FORM OF AMENDMENT




     This Amendment, dated ____, 20 ___, is delivered pursuant to Section
4.8[(b)/(c)] of the Security Agreement referred to below. The undersigned hereby agrees that
this Amendment may be attached to the Security Agreement dated as of September ____, 2008,
between the undersigned and Comerica Bank, as the Agent for the benefit of the Banks referred to
therein (the “Security Agreement”), and (a) [that the intellectual property listed on Schedule
A]/[that the shares of stock, membership interests, partnership units, notes or other instruments
listed on Schedule A] annexed hereto shall be and become part of the Collateral referred to in the
Security Agreement and shall secure payment and performance of all Indebtedness as provided in the
Security Agreement and (b) that Schedule A shall be deemed to amend [Schedule 1.2/Schedule 1.1] by
supplementing the information provided on such Schedule with the information set forth on Schedule A.



     Capitalized terms used herein but not defined herein shall have the meanings therefor provided
in the Security Agreement.



	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	QUINSTREET, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	COMERICA BANK, as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title	 	 	 	 
	 

	 	 	 	 	 	 





37









 






EXHIBIT B




JOINDER AGREEMENT

(Security Agreement)




     THIS JOINDER AGREEMENT
(the “Joinder Agreement”) is dated as of      
           
    ,       
            
   by         
           
 , a           
            
              
     (“New Debtor”).



     WHEREAS, pursuant to Section of that certain Revolving Credit and Term Loan
Agreement dated as of September ____, 2008 (as amended or otherwise modified from time to
time, the “Credit Agreement”) by and among QuinStreet, Inc. (the “Borrower”), the financial
institutions signatory thereto from time to time (the “Banks”) and Comerica Bank, as Agent for the
Banks (in such capacity, “Agent”), the New Debtor is required to execute and deliver a joinder
agreement to the Security Agreement.



     WHEREAS, in order to comply with the Credit Agreement, New Debtor executes and delivers this
Joinder Agreement in accordance therewith.



     NOW THEREFORE, as a further inducement to Banks to continue to provide credit accommodations
to the Borrower, New Debtor hereby covenants and agrees as follows:



     A. All capitalized terms used herein shall have the meanings assigned to them in the Credit
Agreement unless expressly defined to the contrary.



     B. New Debtor hereby enters into this Joinder Agreement in order to comply with Section
7.13 of the Credit Agreement and does so in consideration of the Advances made or to be made
from time to time under the Credit Agreement and the other Loan Documents.



     C. Schedule [insert appropriate Schedule] attached to this Joinder Agreement is intended to
supplement Schedule [insert appropriate Schedule] of the Security Agreement with the respective
information applicable to New Debtor.



     D. New Debtor shall be considered, and deemed to be, for all purposes of the Credit Agreement,
the Security Agreement and the other Loan Documents, a Debtor under the Security Agreement as fully
as though New Debtor had executed and delivered the Security Agreement at the time originally
executed and delivered under the Credit Agreement and hereby ratifies and confirms its obligations
under the Security Agreement, all in accordance with the terms thereof and shall be deemed to have
made each representation and warranty set forth in the Security Agreement.



     E. No Default or Event of Default (each such term being defined in the Credit Agreement) has
occurred and is continuing under the Credit Agreement.



     F. This Joinder Agreement shall be governed by the laws of the State of Michigan and shall be
binding upon New Debtor and its successors and assigns.



38









 





     IN WITNESS WHEREOF, the undersigned New Debtor has executed and delivered this Joinder
Agreement as of ____, ___.



	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[NEW DEBTOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 






	 	 	 	 	 
	Accepted:	 	 
	 
	 	 	 	 
	COMERICA BANK, as Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Its:
	 	 	 	 
	 

	 	 

	 	 






39









 






EXHIBIT G




[Reserved]




 









 





EXHIBIT H




FORM OF ASSIGNMENT AGREEMENT




Date:                                         





			
	To:	 	Borrower


   and


Comerica Bank (“Agent”)






			
	Re:	 	Revolving Credit and Term Loan Agreement (“Agreement”) is made as of
the ___ day of September, 2008, (as amended, restated or otherwise
modified from time to time, the “Credit Agreement”) by and among the
financial institutions from time to time signatory thereto
(individually a “Lender,” and any and all such financial institutions
collectively the “Lenders”), Comerica Bank, as Administrative Agent
for the Lenders (in such capacity, the “Agent”) and QuinStreet, Inc.
(“Borrower”).





Ladies and Gentlemen:




     Reference is made to Section 13.8 of the Credit Agreement. Unless otherwise defined herein or
the context otherwise requires, all initially capitalized terms used herein without definition
shall have the meanings specified in the Credit Agreement.



     This Agreement constitutes notice to each of you of the proposed assignment and delegation by
[insert name of assignor] (the “Assignor”) to [insert name of assignee] (the
“Assignee”), and, subject to the terms and conditions of the Credit Agreement, the Assignor hereby
sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
effective on the “Effective Date” (as hereafter defined) that undivided interest in each of
Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents in the
amounts as set forth on the attached Schedule 1, such that, after giving effect to the foregoing
assignment and assumption, and the concurrent assignment by Assignor to Assignee on the date
hereof, the Assignee’s interest in the Revolving Credit (and participations in any outstanding
Letters of Credit and Swing Line Advances) and the Term Loan shall be as set forth in the attached
Schedule 2 with respect to the Assignee.



     The Assignor hereby instructs the Agent to make all payments from and including the Effective
Date hereof in respect of the interest assigned hereby, directly to the Assignee. The Assignor and
the Assignee agree that all interest and fees accrued up to, but not including, the Effective Date
of the assignment and delegation being made hereby are the property of the Assignor, and not the
Assignee. The Assignee agrees that, upon receipt of any such interest or fees accrued up to the
Effective Date, the Assignee will promptly remit the same to the Assignor.



     The Assignee hereby confirms that it has received a copy of the Credit Agreement and the
exhibits and schedules referred to therein, and all other Loan Documents which it considers



 









 







necessary, together with copies of the other documents which were required to be delivered under
the Credit Agreement as a condition to the making of the loans thereunder. The Assignee
acknowledges and agrees that it: (a) has made and will continue to make such inquiries and has
taken and will take such care on its own behalf as would have been the case had its Percentage been
granted and its loans been made directly by such Assignee to the Borrower without the intervention
of the Agent, the Assignor or any other Lender; and (b) has made and will continue to make,
independently and without reliance upon the Agent, the Assignor or any other Lender, and based on
such documents and information as it has deemed appropriate, its own credit analysis and decisions
relating to the Credit Agreement. The Assignee further acknowledges and agrees that neither the
Agent, nor the Assignor has made any representations or warranties about the creditworthiness of
the Borrower or any other party to the Credit Agreement or any other of the Loan Documents, or with
respect to the legality, validity, sufficiency or enforceability of the Credit Agreement, or any
other of the Loan Documents. This assignment shall be made without recourse to or warranty by the
Assignor, except as set forth herein.



     Assignee represents and warrants that it is a Person to which assignments are permitted
pursuant to Section 13.8 of the Credit Agreement.



     Except as otherwise provided in the Credit Agreement, effective as of the Effective Date:




	 	13.1	 	the Assignee: (i) shall be deemed automatically to have become a party to
the Credit Agreement and the other Loan Documents, to have assumed all of the
Assignor’s obligations thereunder to the extent of the Assignee’s percentage referred
to in the second paragraph of this Assignment Agreement, and to have all the rights
and obligations of a party to the Credit Agreement and the other Loan Documents, as if
it were an original signatory thereto to the extent specified in the second paragraph
hereof; and (ii) agrees to be bound by the terms and conditions set forth in the
Credit Agreement and the other Loan Documents as if it were an original signatory
thereto; and
	 
	 	13.2	 	the Assignor’s obligations under the Credit Agreement and the other Loan
Documents shall be reduced by the Percentage referred to in the second paragraph of
this Assignment Agreement.





     As used herein, the term “Effective Date” means the date on which all of the following have
occurred or have been completed, as reasonably determined by the Agent:




	 	(A)	 	the delivery to the Agent of an original of this Assignment Agreement
executed by the Assignor and the Assignee;
	 
	 	(B)	 	the payment to the Agent, of all accrued fees, expenses and other items for
which reimbursement is then owing under the Credit Agreement;
	 
	 	(C)	 	the payment to the Agent of the processing fee referred to in Section
13.8(d)(1) of the Credit Agreement; and
	 
	 	(D)	 	all other restrictions and items noted in Section 13.8 of the Credit
Agreement have been completed.




2









 










The Agent shall notify the Assignor and the Assignee, along with Borrower, of the Effective Date.




     The Assignee hereby advises each of you of the following administrative details with respect
to the assigned loans:




	 	(A)	 	Address for Notices:
	 
	 	 	 	Institution Name:
	 
	 	 	 	Address:
	 
	 	 	 	Attention:
	 
	 	 	 	Telephone:
	 
	 	 	 	Facsimile:
	 
	 	(B)	 	Payment Instructions:
	 
	 	(C)	 	Proposed effective date of assignment.





     The Assignee has delivered to the Agent (or is delivering to the Agent concurrently herewith)
the tax forms referred to in Section 13.13 of the Credit Agreement to the extent required
thereunder, and other forms reasonably requested by the Agent. The Assignor has delivered to the
Agent (or shall promptly deliver to Agent following the execution hereof), the original of each
Note held by the Assignor under the Credit Agreement.



     The laws of the State of California shall govern the validity, interpretation and enforcement
of this Agreement.



* * *




Signatures Follow on Succeeding Pages




3









 








     Please evidence your consent to and acceptance of the proposed assignment and delegation set
forth herein by signing and returning counterparts hereof to the Assignor and the Assignee.



	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	[ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 






4









 






ASSIGNMENT AGREEMENT ACCEPTED AND CONSENTED TO

this                      day of                      , 20___BY:




	 	 	 	 	 
	 
	 	 	 	 
	COMERICA BANK, as Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Its:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	QUINSTREET, INC.*	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Its:
	 	 	 	 
	 

	 	 

	 	 








 




			
	[*	 	Borrower’s consent will be required except as specified in Section 13.8 of the Credit Agreement.]




[This form of Assignment Agreement (including footnotes) is subject in all respects to the terms
and conditions of the Credit Agreement which shall govern in the event of any inconsistencies or
omissions.]





5











 





EXHIBIT I




FORM OF GUARANTY




 









 





EXHIBIT “I”




GUARANTY




     This GUARANTY is made as of September ____, 2008 and is effective as of the Effective
Date by the undersigned guarantors (each a “Guarantor” and any and all collectively, the
“Guarantors”) to Comerica Bank, as the Agent (“Agent”) for and on behalf of the Lenders (as
defined below).



RECITALS:




     A. QuinStreet, Inc. (“Borrower”) has entered into that certain Revolving Credit and
Term Loan Agreement dated as of September        , 2008 (as amended, supplemented, amended
and restated or otherwise modified from time to time the “Credit Agreement”) with each of the
financial institutions party thereto (collectively, including their respective successors and
assigns, the “Lenders”) and the Agent pursuant to which the Lenders have agreed, subject to the
satisfaction of certain terms and conditions, to extend or to continue to extend financial
accommodations to the Borrower, as provided therein.



     B. As a condition to entering into and performing their respective obligations under the
Credit Agreement, the Lenders and the Agent have required that each of the Guarantors provide to
the Agent, for and on behalf of the Lenders, this Guaranty.



     C. Each of the Guarantors desires to see the success of the Borrower and furthermore, each of
the Guarantors shall receive direct and/or indirect benefits from extensions of credit made or to
be made pursuant to the Credit Agreement to the Borrower.



     D. The business operations of the Borrower and the Guarantors are interrelated and complement
one another, and such entities have a common business purpose; and (i) to permit their
uninterrupted and continuous operations, such entities now require and will from time to time
hereafter require funds and credit accommodations for general business purposes and (ii) the
proceeds of advances under the credit facilities extended under the Credit Agreement will directly
or indirectly benefit the Borrowers and the Guarantors hereunder, severally and jointly.



     E. The Agent is acting as agent for the Lenders pursuant to Section 12 of the Credit
Agreement.



     NOW, THEREFORE, to induce each of the Lenders to enter into and perform its obligations under
the Credit Agreement, each of the Guarantors has executed and delivered this guaranty (as amended
and otherwise modified from time to time, the “Guaranty”).



     1. Definitions. Unless otherwise provided herein, all capitalized terms in this
Guaranty shall have the meanings specified in the Credit Agreement. The term “Lenders” as used
herein shall include any successors or assigns of the Lenders in accordance with the Credit
Agreement. In addition, the following term shall have the following meaning:



 









 






“Guaranteed Obligations” shall mean, collectively, all indebtedness,
liabilities and obligations of the Borrower to the Lenders of every kind, nature or
description under the Credit Agreement or any other Loan Document, including,
without limitation, principal, interest (including interest accruing on or after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding by or against Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such a proceeding and including,
without limitation, interest at the highest allowable per annum rate specified in
any document, instrument or agreement applicable to any of the indebtedness),
reimbursement obligations, fees, indemnities, and reasonable costs and expenses
(including without limitation, all reasonable fees and disbursements of counsel to
the Agent or any Lender) or otherwise, and any liabilities of any Credit Party to
Agent or any Lender arising in connection with any Lender Products and payment
obligations of any Credit Party to Agent or any Lender arising under Hedging
Transactions evidenced by Hedging Agreements, and any and all other liabilities and
obligations, direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter incurred, which may arise under, out of, or in connection with
the Credit Agreement and the other Loan Documents, whether such indebtedness is now
existing or hereafter arising.



     2. Guaranty. Each of the Guarantors, hereby, jointly and severally, guarantees to the
Lenders the due and punctual payment to the Lenders when due, whether by acceleration or
otherwise, of the Guaranteed Obligations. Each of such Guarantors further jointly and severally
agree to pay any and all expenses (including reasonable attorneys’ fees), that may be paid or
incurred by the Agent or any Lender in enforcing or preserving rights with respect to or
collecting any or all of the Guaranteed Obligations and/or enforcing any rights with respect to,
or collecting against the Guarantors under this Guaranty.



     3. Unconditional Character of Guaranty. The obligations of each of the Guarantors
under this Guaranty shall be absolute and unconditional, and shall be a guaranty of payment and not
of collection, irrespective of the validity, regularity or enforceability of the Credit Agreement
or any of the other Loan Documents, or any provision thereof, the absence of any action to enforce
the same, any waiver or consent with respect to or any amendment of any provision thereof (provided
that any amendment of this Guaranty shall be in accordance with the terms hereof), the recovery of
any judgment against any Person or action to enforce the same, any failure or delay in the
enforcement of the obligations of the Borrower under the Credit Agreement or any of the other Loan
Documents, or any setoff, counterclaim, recoupment, limitation, defense or termination whether with
or without notice to the Guarantors. Each of the Guarantors hereby waives diligence, demand for
payment, filing of claims with any court, any proceeding to enforce any provision of the Credit
Agreement or any of the other Loan Documents, any right to require a proceeding first against
Borrower or against any other Guarantor or other Person providing collateral, or to exhaust any
security for the performance of the obligations of the Borrower, any protest, presentment, notice
or demand whatsoever, and each Guarantor hereby covenants that this Guaranty shall not be
terminated, discharged or released until, subject to Section 16 hereof, final payment in full of
all of the Guaranteed Obligations due and to become due from the Borrower, no Letters of Credit
shall be outstanding and the termination of any and all commitments to extend credit (whether
optional or obligatory)



2









 







under the Credit Agreement or any other Loan Document, and only to the extent of any such payment,
performance and discharge. Each Guarantor hereby further covenants that no security now or
subsequently held by the Agent or the Lenders for the payment of the Guaranteed Obligations
(including, without limitation, any security for any of the foregoing), whether in the nature of a
security interest, pledge, lien, assignment, setoff, suretyship, guaranty, indemnity, insurance or
otherwise, and no act, omission or other conduct of the Agent or the Lenders in respect of such
security, shall affect in any manner whatsoever the unconditional obligations of this Guaranty, and
that the Agent and each of the Lenders in their respective sole discretion and without notice to
any of the Guarantors, may release, exchange, enforce, apply the proceeds of and otherwise deal
with any such security without affecting in any manner the unconditional obligations of this
Guaranty.



     Without limiting the generality of the foregoing, the obligations of the Guarantors under
this Guaranty, and the rights of the Agent to enforce the same, on behalf of the Lenders by
proceedings, whether by action at law, suit in equity or otherwise, shall not be in any way
affected to the extent permitted by applicable law, by (i) any insolvency, bankruptcy,
liquidation, reorganization, readjustment, composition, dissolution, winding up or other
proceeding involving or affecting Borrower, any or all of the Guarantors or any other Person or
any of their respective Affiliates including any discharge of, or bar or stay against collecting,
all or any of the Guaranteed Obligations in or as a result of any such proceeding; (ii) any change
in the ownership of any of the capital stock (or other ownership interests) of Borrower or any or
all of the Guarantors, or any other Person providing collateral for any of the Guaranteed
Obligations, or any of their respective Affiliates; (iii) the election by the Agent or any Lender,
in any bankruptcy proceeding of any Person, to apply or not apply Section 1111(b)(2) of the
Bankruptcy Code; (iv) any extension of credit or the grant of any security interest or lien under
Section 364 of the Bankruptcy Code; (v) any agreement or stipulation with respect to the provision
of adequate protection in any bankruptcy proceeding of any Person; (vi) the avoidance of any
security interest or lien in favor of the Agent or any Lender for any reason; (vii) any action
taken by the Agent or any Lender that is authorized by this paragraph or any other provision of
this Guaranty; or (viii) any other principle or provision of law, statutory or otherwise, which is
or might be in conflict with the terms hereof.



     4. Waivers. Each of the Guarantors hereby waives to the fullest extent
possible under applicable law:



          (a) any defense based upon or arising by reason of:



               (i) the doctrine of marshaling of assets or upon an election of remedies by Agent or the
Lenders, including, without limitation, an election to proceed by non-judicial rather than
judicial foreclosure;



               (ii) any statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the principal;



               (iii) any disability or other defense of Borrower or any other Person;



3









 





               (iv) the cessation or limitation from any cause whatsoever, other than final and
irrevocable payment in full, of the Guaranteed Obligations;



               (v) any lack of authority of any officer, director, partner, agent or any other person acting
or purporting to act on behalf of either Borrower, or any defect in the formation of either
Borrower;



               (vi) the application by Borrower of the proceeds of any Guaranteed Obligations for purposes
other than the purposes represented by the Borrower to the Lenders or intended or understood by
the Lenders or the Guarantors;



               (vii) any act or omission by the Lenders which directly or indirectly results in or aids the
discharge of Borrower or any Guaranteed Obligations by operation of law or otherwise; or



               (viii) any modification of Guaranteed Obligations, in any form whatsoever including without
limit any modification made after effective termination, and including without limit, the renewal,
extension, acceleration or other change in time for payment of the Guaranteed Obligations, or
other change in the terms of any Guaranteed Obligations, including without limit increase or
decrease of the interest rate;



          (b) any duty on the part of Agent or any of the Lenders to disclose to such Guarantor any
facts Agent or the Lenders may now or hereafter know about Borrower, regardless of whether Agent or
any Lender has reason to believe that any such facts materially increase the risk beyond that which
such Guarantor intends to assume or has reason to believe that such facts are unknown to such
Guarantor or has a reasonable opportunity to communicate such facts to such Guarantor;



          (c) any other event or action (excluding compliance by such Guarantor with the provisions
hereof) that would result in the discharge by operation of law or otherwise of such Guarantor from
the performance or observance of any obligation, covenant or agreement contained in this Guaranty;
and



          (d) all rights to participate in any security now or hereafter held by the Agent or any
Lender.



     Each Guarantor understands that, absent this waiver, the Agent’s election of remedies,
including but not limited to its decision to proceed to nonjudicial foreclosure on any real
property securing the Guaranteed Obligations, could preclude the Agent, on behalf of the Lenders,
from obtaining a deficiency judgment against Borrower and each Guarantor pursuant to California
Code of Civil Procedure Sections 580a, 580b, 580d or 726 and could also destroy any subrogation
rights which such Guarantor has against Borrower. Each Guarantor further understands that, absent
this waiver, California law, including without limitation, California Code of Civil Procedure
Sections 580a, 580b, 580d or 726, could afford such Guarantor one or more affirmative defenses to
any action maintained by the Agent, on behalf of the Lenders, against such Guarantor on this
Guaranty.



4









 





     Each Guarantor waives any and all rights and provisions of California Code of Civil Procedure
Sections 580a, 580b, 580d and 726, including, but not limited to any provision thereof that: (i)
may limit the time period for the Agent, on behalf of the Lenders, to commence a lawsuit against
Borrower or any Guarantor to collect any of the Guaranteed Obligations owing by either Borrower or
any Guarantor to Lenders; (ii) may entitle Borrower or any Guarantor to a judicial or nonjudicial
determination of any deficiency owed by Borrower or any Guarantor to the Agent, on behalf of the
Lenders, or to otherwise limit the Agent’s right to collect a deficiency based on the fair market
value of such real property security; (iii) may limit the Agent’s right to collect a deficiency
judgment after a sale of any real property securing the Guaranteed Obligations; (iv) may require
the Agent to take only one action to collect the Guaranteed Obligations or that may otherwise limit
the remedies available to the Agent to collect the Guaranteed Obligations.



     Each Guarantor waives all rights and defenses arising out of an election of remedies by the
Agent, on behalf of the Lenders, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed the Agent’s and the
Lenders’ rights of subrogation and reimbursement against Borrower by the operation of Section 580d
of the California Code of Civil Procedure or otherwise.



     Without limiting the generality of any other waiver or other provision set forth in this
Guaranty, each Guarantor waives all rights and defenses that such Guarantor may have because the
Guaranteed Obligations are secured by real property to the fullest extent permissible under
applicable law. This means, among other things:



     1. The Agent, on behalf of the Lenders, may collect from any Guarantor without first
foreclosing on any real or personal property collateral pledged by Borrower to secure the
Guaranteed Obligations.



     2. If the Agent, on behalf of the Lenders, forecloses on any real property collateral pledged
by Borrower to secure the Guaranteed Obligations:



          (a) The amount of the Guaranteed Obligations may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale
price.



          (b) The Agent, on behalf of the Lenders, may collect from any Guarantor even if the Agent, on
behalf of the Lenders, by foreclosing on the real property pledged as collateral, has destroyed any
right that the any Guarantor may have to collect from either Borrower.



     This is an unconditional and irrevocable waiver of any rights and defenses each Guarantor may
have because the Guaranteed Obligations are secured by real property to the fullest extent
permissible under applicable law. These rights and defenses include, but are not limited to, any
rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure.



     WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS
GUARANTY, EACH GUARANTOR HEREBY WAIVES, TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY
AND ALL



5









 







BENEFITS, DEFENSES TO PAYMENT OR PERFORMANCE, OR ANY RIGHT TO PARTIAL OR COMPLETE EXONERATION
ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS 2799, 2808,
2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845, 2847, 2848, 2849, AND 2850.



     Each of the Guarantors acknowledges and agrees that this is a knowing and informed waiver of
the undersigned’s rights as discussed above and that the Agent and the Lenders are relying on this
waiver in extending credit to the Borrower.



     5. Waiver of Subrogation. Each Guarantor hereby waives any claim for
reimbursement, contribution, exoneration, indemnity or subrogation, or any other similar claim,
which such Guarantor may have or obtain against Borrower, by reason of the existence of this
Guaranty, or by reason of the payment by such Guarantor of any of the Guaranteed Obligations or the
performance of this Guaranty, the Credit Agreement or any of the other Loan Documents, until the
Guaranteed Obligations have been repaid and discharged in full, no Letters of Credit shall remain
outstanding and all commitments to extend credit under the Credit Agreement or any of the other
Loan Documents (whether optional or obligatory) have been terminated. Any amounts paid to such
Guarantor on account of any such claim at any time when the obligations of such Guarantor under
this Guaranty shall not have been fully and finally paid shall be held by such Guarantor in trust
for Agent and the Lenders, segregated from other funds of such Guarantor, and forthwith upon
receipt by such Guarantor shall be turned over to Agent in the exact form received by such
Guarantor (duly endorsed to Agent by such Guarantor, if required), to be applied to such
Guarantor’s obligations under this Guaranty, whether matured or unmatured, in such order and manner
as Agent may determine.



     Each of the Guarantors acknowledges and agrees that this is a knowing and informed waiver of
the undersigned’s rights as discussed above and that the Agent and the Lenders are relying on this
waiver in extending credit to the Borrower.



     6. Other Transactions. The Agent and each of the Lenders may deal with the Borrower
and any security held by them for the obligations of the Borrower in the same manner and as freely
as if this Guaranty did not exist and the Agent shall be entitled, on behalf of the Lenders,
without notice to any of the Guarantors, among other things, to grant to the Borrower such
extension or extensions of time to perform any act or acts as may seem advisable to the Agent (on
behalf of the Lenders) at any time and from time to time, and to permit the Borrower to incur
additional indebtedness to the Agent, the Lenders, or any of them, without terminating, affecting
or impairing the validity or enforceability of this Guaranty or the obligations of the Guarantors
hereunder.



     7. Remedies; Right to Offset. The Agent may proceed, either in its own name (on behalf
of the Lenders) or in the name of each or any of the Guarantors, or otherwise, to protect and
enforce any or all of its rights under this Guaranty by suit in equity, action at law or by other
appropriate proceedings, or to take any action authorized or permitted under applicable law, and
shall be entitled to require and enforce the performance of all acts and things required to be
performed hereunder by the Guarantors. Each and every remedy of the Agent and of the Lenders shall,
to the extent permitted by law, be cumulative and shall be in addition to any other remedy given
hereunder or now or hereafter existing at law or in equity.



6









 





     At the option of the Agent, any or all of the Guarantors may be joined in any action or
proceeding commenced by the Agent against Borrower or any of the other parties providing Collateral
for any of the Guaranteed Obligations, and recovery may be had against any or all of the Guarantors
in such action or proceeding or in any independent action or proceeding against any of them,
without any requirement that the Agent or the Lenders first assert, prosecute or exhaust any remedy
or claim against Borrower and/or any of the other parties providing Collateral for any of the
Guaranteed Obligations.



     Each of the Guarantors acknowledges the rights of the Agent and of each of the Lenders,
subject to the applicable terms and conditions of the Credit Agreement, to offset against the
Guaranteed Obligations of any Guarantor to the Lenders under this Guaranty, any amount owing by
the Agent or the Lenders, or either or any of them to such Guarantors, whether represented by any
deposit of such Guarantors (or any of them) with the Agent or any of the Lenders or otherwise.



     8. Right to Cure. Each of the Guarantors shall have the right to cure any Event of
Default under the Credit Agreement or the other Loan Documents with respect to obligations of the
other Guarantors thereunder; provided that such cure is effected within the applicable grace period
or period for cure thereunder, if any; and provided further that such cure can be effected in
compliance with the Credit Agreement. Except to the extent of payments of principal, interest
and/or other sums actually received by the Agent or the Lenders pursuant to such cure, the exercise
of such right to cure by any Guarantor shall not reduce or otherwise affect the liability of any
other Guarantor under this Guaranty.



     9. Borrower’s Financial Condition. Each Guarantor delivers this Guaranty based solely
on its own independent investigation of (or decision not to investigate) the financial condition of
the Borrower and is not relying on any information furnished by Agent or the Lenders. Each
Guarantor assumes full responsibility to keep itself informed concerning the financial condition of
the Borrower and all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligation, the status of the Guaranteed Obligations or any other matter which such Guarantor may
deem necessary or appropriate, now or later.



     10. Representations and Warranties; Covenants. Each Guarantor (a) ratifies,
confirms and, by reference thereto (as fully as though such matters were expressly set forth
herein), represents and warrants with respect to itself those matters set forth in Article 6 of
the Credit Agreement to the extent applicable to such Guarantor and those matters set forth in the
recitals hereto, and such representations and warranties shall be deemed to be continuing
representations and warranties true and correct in all material respects so long as this Guaranty
shall be in effect; and (b) agrees to comply with the covenants set forth in Articles 7 and 8 of
the Credit Agreement to the extent applicable to such Guarantor, and (ii) not to otherwise engage
in any action or inaction, the result of which would cause a violation of any term or condition of
the Credit Agreement.



     11. Governing Law; Severability. This Guaranty has been delivered in California and
shall be interpreted and the rights of the parties hereunder shall be determined under the laws of,
and be enforceable in, the State of California. If any term or provision of this Guaranty or the
application thereof to any circumstance shall, to any extent, be invalid or unenforceable, the



7









 







remainder of this Guaranty, or the application of such term or provision to circumstances other
than those as to which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Guaranty shall be valid and enforceable to the fullest extent
permitted by law.



     12. Notice. All notices, requests, consents, approvals, waivers and
other communications hereunder shall be in writing (including, by facsimile transmission) and
mailed, faxed or delivered to the address or facsimile number specified for notices on Schedule 1
hereto; or, to such other address or number as shall be designated by such party in a written
notice to the other. All such notices, requests and communications shall, when sent by overnight
delivery, or faxed, be effective when delivered for overnight (next business day) delivery, or
transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third
Business Day (as defined in the Credit Agreement) after the date deposited into the U.S. mail, or
if otherwise delivered, upon delivery.



     13. Amendments; Future Subsidiaries. The terms of this Guaranty may not be altered,
modified, amended, supplemented or terminated in any manner whatsoever unless the same shall be in
writing and signed by or on behalf of the requisite Lenders as determined pursuant to the Credit
Agreement and the Guarantors. In accordance with the Credit Agreement, future Domestic Subsidiary
of either Borrower shall become obligated as Guarantors hereunder (each as fully as though an
original signatory hereto) by executing and delivering to the Agent and the Lenders that certain
joinder agreement in the form attached hereto as Exhibit A.



     14. No Waiver. No waiver or release shall be deemed to have been made by the Agent or
any of the Lenders of any of their respective rights hereunder unless the same shall be in writing
and signed by or on behalf of the requisite Lenders as determined pursuant to the Credit Agreement,
and any such waiver shall be a waiver or release only with respect to the specific matter and
Guarantor or Guarantors involved, and shall in no way impair the rights of the Agent or any of the
Lenders or the obligations of the Guarantors under this Guaranty in any other respect at any other
time.



     15. Joint and Several Obligation, etc. The obligation of each of the Guarantors
under this Guaranty shall be several and also joint, each with all and also each with any one or
more of the others, and may be enforced against each severally, any two or more jointly, or some
severally and some jointly. Any one or more of the Guarantors may be released from its obligations
hereunder with or without consideration for such release and the obligations of the other
Guarantors hereunder shall be in no way affected thereby. The Agent, on behalf of Lenders, may fail
or elect not to prove a claim against any bankrupt or insolvent Guarantor and thereafter, the Agent
and the Lenders may, without notice to any Guarantors, extend or renew any part or all of the
obligations of the Borrower under the Credit Agreement or otherwise, and may permit any such Person
to incur additional indebtedness, without affecting in any manner the unconditional obligation of
each of the Guarantors hereunder. Such action shall not affect any right of contribution among the
Guarantors.



     16. Release; Reinstatement. Upon the satisfaction of the obligations of the
Guarantors hereunder, and when none of the Guarantors is subject to any obligation hereunder or
under the Credit Agreement or any of the other Loan Documents, the Agent shall deliver to such



8









 







Guarantors, upon written request therefor, (a) a written release of this Guaranty and (b)
appropriate discharges of any Collateral provided by the Guarantors for this Guaranty; provided
however that, the effectiveness of this Guaranty shall continue or be reinstated, as the case may
be, in the event: (x) that any payment received or credit given by the Agent or the Lenders, or any
of them, is returned, disgorged, rescinded or required to be recontributed to any party as an
avoidable preference, impermissible setoff, fraudulent conveyance, restoration of capital or
otherwise under any applicable state, federal or law of any jurisdiction, including laws pertaining
to bankruptcy or insolvency, and this Guaranty shall thereafter be enforceable against the
Guarantors as if such returned, disgorged, recontributed or rescinded payment or credit has not
been received or given by the Agent or the Lenders, and whether or not the Agent or any Lender
relied upon such payment or credit or changed its position as a consequence thereof or (y) that any
liability is imposed, or sought to be imposed against the Agent or the Lenders, or any of them,
relating to the environmental condition of any of property mortgaged or pledged to the Agent on
behalf of the Lenders by any Guarantor, Borrower or any other party as collateral (in whole or
part) for any indebtedness or obligation evidenced or secured by this Guaranty, whether such
condition is known or unknown, now exists or subsequently arises (excluding only conditions which
arise after acquisition by the Agent or any Lender of any such property, in lieu of foreclosure or
otherwise, due to the wrongful act or omission of the Agent or such Lenders, or any person other
than the Borrower, the Subsidiaries, or Affiliates of the Borrower or the Subsidiaries), and this
Guaranty shall thereafter be enforceable against the Guarantors to the extent of all such
liabilities, costs and expenses (including reasonable attorneys’ fees) incurred by the Agent or
Lenders as the direct or indirect result of any such environmental condition but only for which the
Borrower is obligated to the Agent and the Lenders pursuant to the Credit Agreement. For purposes
of this Guaranty “environmental condition” includes, without limitation, conditions
existing with respect to the surface or ground water, drinking water supply, land surface or
subsurface strata and the ambient air.



     17. Consent to Jurisdiction. Each of the Guarantors hereby irrevocably submits to the
non-exclusive jurisdiction of any United States federal or California state court sitting in the
County of Santa Clara, California in any action or proceeding arising out of or relating to this
Guaranty or any of the other Loan Documents and Guarantors hereby irrevocably agree that all claims
in respect of such action or proceeding may be heard and determined in any such United States
federal or California state court. Each of the Guarantors irrevocably consents to the service of
any and all process in any such action or proceeding brought in any court in or of the State of
California (and to the receipt of any and all notices hereunder) by the delivery of copies of such
process to Guarantors at their respective addresses specified in Schedule 1 hereof in the manner
set forth therein.



     18. Headings. The headings, captions, and arrangements used in this Guaranty are for
convenience only and shall not affect the interpretation of this Guaranty.



     19. Counterparts. This Guaranty may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.



     20. JURY TRIAL WAIVER. EACH GUARANTOR AND THE AGENT ACKNOWLEDGE THAT THE
RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE,



9









 







BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH
GUARANTOR AND THE AGENT, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL
OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL
BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY
RELATED TO, THIS GUARANTY OR THE GUARANTEED OBLIGATIONS.



     (a) In the event that the jury trial waiver contained in this Section 20 is not enforceable,
the parties elect to proceed as follows:



     (b) With the exception of the items specified in clause (c), below, any controversy, dispute
or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any
other Loan Document will be resolved by a reference proceeding in California in accordance with the
provisions of Section 638 et seq. of the California Code of Civil Procedure (“CCP”), or their
successor sections, which shall constitute the exclusive remedy for the resolution of any Claim,
including whether the Claim is subject to the reference proceeding. Except as otherwise provided in
the Agreement, venue for the reference proceeding will be in the state or federal court in the
county or district where venue is otherwise appropriate under applicable law (the “Court”).



     (c) The matters that shall not be subject to a reference are the following: (i) non-judicial
foreclosure of any security interests in real or personal property, (ii) exercise of self-help
remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv)
temporary, provisional or ancillary remedies (including, without limitation, writs of attachment,
writs of possession, temporary restraining orders or preliminary injunctions). This Section does
not limit the right of any party to exercise or oppose any of the rights and remedies described in
clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items
described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not
waive the right of any party to a reference pursuant to this Section.



     (d) The referee shall be a retired judge or justice selected by mutual written agreement of
the parties. If the parties do not agree within ten (10) days of a written request to do so by any
party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the
Court (or his or her representative). A request for appointment of a referee may be heard on an ex
parte or expedited basis, and the parties agree that irreparable harm would result if ex parte
relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to
the referee selected by the Presiding Judge of the Court (or his or her representative).



     (e) The parties agree that time is of the essence in conducting the reference proceedings.
Accordingly, the referee shall be requested, subject to change in the time periods specified herein
for good cause shown, to (a) set the matter for a status and trial-setting conference within
fifteen (15) days after the date of selection of the referee, (b) if practicable, try all issues of
law or fact within one hundred twenty (120) days after the date of the conference and (c) report a
statement of decision within twenty (20) days after the matter has been submitted for decision.



10









 





     (f) The referee will have power to expand or limit the amount and duration of discovery. The
referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s
failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered, no
party shall be entitled to “priority” in conducting discovery, depositions may be taken by either
party upon seven (7) days written notice, and all other discovery shall be responded to within
fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the
parties shall be submitted to the referee whose decision shall be final and binding.



     (g) Except as expressly set forth in this Section 16, the referee shall determine the manner
in which the reference proceeding is conducted including the time and place of hearings, the order
of presentation of evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee, except for trial,
shall be conducted without a court reporter, except that when any party so requests, a court
reporter will be used at any hearing conducted before the referee, and the referee will be
provided a courtesy copy of the transcript. The party making such a request shall have the
obligation to arrange for and pay the court reporter. Subject to the referee’s power to award
costs to the prevailing party, the parties will equally share the cost of the referee and the
court reporter at trial.



     (h) The referee shall be required to determine all issues in accordance with existing case
law and the statutory laws of the State of California. The rules of evidence applicable to
proceedings at law in the State of California will be applicable to the reference proceeding. The
referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that
will be binding on the parties and rule on any motion which would be authorized in a trial,
including without limitation motions for summary judgment or summary adjudication. The referee
shall issue a decision at the close of the reference proceeding which disposes of all claims of
the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be
entered by the Court as a judgment or an order in the same manner as if the action had been tried
by the Court and any such decision will be final, binding and conclusive. The parties reserve the
right to appeal from the final judgment or order or from any appealable decision or order entered
by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different judgment, which new
trial, if granted, is also to be a reference proceeding under this provision.



     (i) If the enabling legislation which provides for appointment of a referee is repealed (and
no successor statute is enacted), any dispute between the parties that would otherwise be
determined by reference procedure will be resolved and determined by arbitration. The arbitration
will be conducted by a retired judge or Justice, in accordance with the California Arbitration Act
§1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to
discovery set forth above shall apply to any such arbitration proceeding.


THE PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE PROVISION WILL BE
DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO
CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE
MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY,
DISPUTE OR


11









 






CLAIM BETWEEN OR AMONG THEM WHICH ARISES OUT OF OR IS RELATED TO
THIS AGREEMENT.




     21. Limitation under Applicable Insolvency Laws. Notwithstanding anything to the
contrary contained herein, it is the intention of the Guarantors, the Agent and the Lenders that
the amount of the respective Guarantor’s obligations hereunder shall be in, but not in excess of,
the maximum amount thereof not subject to avoidance or recovery by operation of applicable law
governing bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (collectively,
“Applicable Insolvency Laws”). To that end, but only in the event and to the extent that the
Guarantor’s respective obligations hereunder or any payment made pursuant thereto would, but for
the operation of the foregoing proviso, be subject to avoidance or recovery under Applicable
Insolvency Laws, the amount of the Guarantor’s respective obligations hereunder shall be limited to
the largest amount which, after giving effect thereto, would not, under Applicable Insolvency Laws,
render the Guarantor’s respective obligations hereunder unenforceable or avoidable or subject to
recovery under Applicable Insolvency Laws. To the extent any payment actually made hereunder
exceeds the limitation contained in this Section 21, then the amount of such excess shall, from and
after the time of payment by the Guarantors (or any of them), be reimbursed by the Lenders upon
demand by such Guarantors. The foregoing proviso is intended solely to preserve the rights of the
Agent and the Lenders hereunder against the Guarantors to the maximum extent permitted by
Applicable Insolvency Laws and neither the Borrower nor any Guarantor nor any other Person shall
have any right or claim under this Section 21 that would not otherwise be available under
Applicable Insolvency Laws.



[SIGNATURES FOLLOW ON SUCCEEDING PAGES]




12









 





     IN WITNESS WHEREOF, each of the undersigned Guarantors has executed this Guaranty as of the
date first above written.



	 	 	 	 	 	 	 
	 	 	QUINSTREET PROPERTIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	QUINSTREET LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	QUINSTREET MEDIA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	CYBERSPACE COMMUNICATIONS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	RELIABLEREMODELER.COM, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 






13









 






	 	 	 	 	 	 	 
	 	 	HQ PUBLICATIONS LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 







14











 





SCHEDULE 1




INFORMATION FOR NOTICES




Comerica Bank

75 East Trimble Road, M/C 4770

San Jose, California 95131

Attention: Manager

Fax No.: (408) 556-5091




With a copy to:




Comerica Bank

2 Embarcadero Center, Suite 300

San Francisco, CA 94111

Attn: Phil Koblis — Vice President

Fax No.: (415) 477-3260




[Guarantors]




                                                            




                                                            

Attention:                                                        

Phone:                                                             

Fax No.:                                                          




                                                            




                                                            

Attention:                                                      

Phone:                                                             

Fax No.:                                                           




 









 





EXHIBIT A




Joinder Agreement to Guaranty




     THIS JOINDER AGREEMENT is dated as of                                         ,            
          by
                                                            
(“New Guarantor”).



     WHEREAS, pursuant to Section 7.14 of that certain Revolving Credit and Term Loan
Agreement dated as of September                     , 2008 (as amended or otherwise modified from time to
time, the “Credit Agreement”; capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement) by and among QuinStreet, Inc. (“Borrower”),
Comerica Bank, as agent for the Lenders (the “Agent”) and the financial institutions which
are parties thereto from time to time (“Lenders”), the Lenders have agreed to extend credit
to the Borrower on the terms set forth in the Credit Agreement and pursuant to Section 13 of that
certain Guaranty dated as of September ____, 2008 (as amended or otherwise modified from time
to time, the “Guaranty”) executed and delivered by the Guarantors named therein
(“Guarantors”) in favor of Agent, for and on behalf of the Lenders, the New Guarantor must
execute and deliver a Joinder Agreement in accordance with the Credit Agreement and the Guaranty.



     NOW THEREFORE, as a further inducement to each of the Lenders to continue to provide credit
accommodations to the Borrower, New Guarantor hereby covenants and agrees as follows:



     1. All capitalized terms used herein shall have the meanings assigned to them in the Credit
Agreement unless expressly defined to the contrary.



     2. New Guarantor hereby enters into this Joinder Agreement in order to comply with Section
7.13 of the Credit Agreement and Section 13 of the Guaranty and does so in consideration of the
extension of the Guaranteed Obligations, from which New Guarantor shall derive direct and indirect
benefit as with the other Guarantors (all as set forth and on the same basis as in the Guaranty).



     3. New Guarantor shall be considered, and deemed to be, for all purposes of the Credit
Agreement, the Guaranty and the other Loan Documents, a Guarantor under the Guaranty and hereby
ratifies and confirms its obligations under the Guaranty, all in accordance with the terms
thereof.



     4. No Default or Event of Default has occurred and is continuing under the Credit Agreement.



     5. This Joinder Agreement shall be governed by the laws of the State of California and shall
be binding upon New Guarantor and its successors and assigns.



 









 





     IN WITNESS WHEREOF, the undersigned New Guarantor has executed and delivered
this Joinder Agreement as of                                         .



	 	 	 	 	 
	 	[NEW GUARANTOR]

 	 
	 	By:  	 	 
	 	 	 	 
	 	Its:  	 	 



2









 






	 	 	 	 	 



EXHIBIT J




FORM OF COVENANT COMPLIANCE REPORT




TO: Comerica Bank, as Agent



RE: Revolving Credit and Term Loan Agreement (“Agreement”) is made as of the ___day of September,
2008, (as amended, restated or otherwise modified from time to time, the “Credit Agreement”) by and
among the financial institutions from time to time signatory thereto (individually a “Lender,” and
any and all such financial institutions collectively the “Lenders”), Comerica Bank, as
Administrative Agent for the Lenders (in such capacity, the “Agent”) and QuinStreet, Inc.
(“Borrower”).



This Covenant Compliance Report (“Report”) is furnished pursuant to Section 7.2(a) of the Credit
Agreement and sets forth various information as of                     , 20___ (the “Computation Date”).





	1.	 	ADJUSTED QUICK RATIO (SECTION 7.9(A)). ON THE COMPUTATION DATE, THE ADJUSTED QUICK
RATIO, WHICH IS REQUIRED TO BE NOT LESS THAN                      TO 1.00 WAS                      TO 1.00, AS COMPUTED IN
THE SUPPORTING DOCUMENTS ATTACHED HERETO AS SCHEDULE 1.
	 
	2.	 	FIXED CHARGE COVERAGE RATIO (SECTION 7.9(B)). ON THE COMPUTATION DATE, THE FIXED
CHARGE COVERAGE RATIO, WHICH IS REQUIRED TO BE NOT LESS THAN                      TO 1.0 WAS                      TO 1.0
AS COMPUTED IN THE SUPPORTING DOCUMENTS ATTACHED HERETO AS SCHEDULE 2.
	 
	3.	 	FUNDED DEBT TO EBITDA RATIO (SECTION 7.9(C)). ON THE COMPUTATION DATE, THE FUNDED
DEBT TO EBITDA RATIO, WHICH IS REQUIRED TO BE NOT MORE THAN                      TO 1.0 WAS                      TO 1.0 AS
COMPUTED IN THE SUPPORTING DOCUMENTS ATTACHED HERETO AS SCHEDULE 2.





     The Borrower’s Representative hereby certifies that:



     A. To the best of my knowledge, all of the information set forth in this Report (and in any
Schedule attached hereto) is true and correct in all material respects.



     B. To the best of my knowledge, the representation and warranties of the Credit Parties
contained in the Credit Agreement and in the Loan Documents are true and correct in all material
respects with the same effect as though such representations and warranties had been made on and at
the date hereof, except to the extent that such representations and warranties expressly relate to
an earlier specific date, in which case such representations and warranties were true and correct
in all material respects as of the date when made.



     C. I have reviewed the Credit Agreement and this Report is based on an examination sufficient
to assure that this Report is accurate.



     D. To the best of my knowledge, except as stated in Schedule 5 hereto (which shall



 









 







describe any existing Default or Event of Default and the notice and period of existence
thereof and any action taken with respect thereto or contemplated to be taken by Borrower or any
other Credit Party), no Default or Event of Default has occurred and is continuing on the date of
this Report.



     Capitalized terms used in this Report and in the Schedules hereto, unless specifically defined
to the contrary, have the meanings given to them in the Credit Agreement.



     IN WITNESS WHEREOF, Borrower have caused this Report to be executed and delivered by the
Borrower Representative this ___ day of                                         , ___.



	 	 	 	 	 
	 	QUINSTREET, INC.

 	 
	 	By:  	 	 
	 	 	 	 
	 	Its:  	 	 
	 




2









 





EXHIBIT K




FORM OF TERM NOTE




			
	 	 	 
	$                    
	 	                    , 20___





FOR VALUE RECEIVED, QuinStreet, Inc. (“Borrower”) promises to pay to the order of [insert name
of applicable financial institution] (“Payee”), in care of Agent, at San Jose, California, the
principal sum of [insert amount derived from Percentages] Dollars ($                    ), or if
less, the aggregate principal amount of the Term Loan Advances made by the Payee, in lawful money
of the United States of America payable in quarterly principal installments each in the amount and
on the dates set forth in the Credit Agreement (as defined below) until the Term Loan Maturity
Date, when the entire unpaid balance of principal and interest thereon shall be due and payable.
Interest shall be payable at the rate (including the default rate) and on the dates provided in the
Revolving Credit and Term Loan Agreement (“Agreement”) is made as of the ___ day of September,
2008, by and among the financial institutions from time to time signatory thereto (individually a
“Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank,
as Administrative Agent for the Lenders (in such capacity, the “Agent”), and Borrower.




     This Note evidences Term Loan Advances made under, is subject to, may be accelerated and may
be prepaid in accordance with, the terms of the Credit Agreement, to which reference is hereby
made.



     This Note shall be interpreted and the rights of the parties hereunder shall be determined
under the laws of, and enforceable in, the State of California.



     Borrower hereby waives presentment for payment, demand, protest and notice of dishonor and
nonpayment of this Note and agrees that no obligation hereunder shall be discharged by reason of
any extension, indulgence, release, or forbearance granted by any holder of this Note to any party
now or hereafter liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note.



 









 





     Nothing herein shall limit any right granted Payee by any other instrument or by law.



	 	 	 	 	 
	 	QUINSTREET, INC.

 	 
	 	By:  	 	 
	 	 	 	 
	 	Its:  	 	 
	 




2









 





EXHIBIT L




FORM OF TERM LOAN RATE REQUEST




			
	 	 	 
	No.                     
	 	Dated:                     






	 	 	 
	To:

	 	Comerica Bank, as Agent
	 
	 	 
	RE:

	 	Revolving Credit and Term Loan Agreement (“Agreement”)
is made as of the ___day of September, 2008, (as
amended, restated or otherwise modified from time to
time, the “Credit Agreement”) by and among the financial
institutions from time to time signatory thereto
(individually a “Lender,” and any and all such financial
institutions collectively the “Lenders”), Comerica Bank,
as Administrative Agent for the Lenders (in such
capacity, the “Agent”) and QuinStreet, Inc.
(“Borrower”).
	 
	 	 
	Pursuant to the Credit Agreement, the Borrower hereby requests that the Lenders refund or
convert, as applicable, an Advance under the Term Loan from Lenders as follows:

	 
	 	 
	(a)

	 	Date of Refunding or Conversion of Advance:            
              
                     
	 
	 	 
	(b)

	 	Type of Activity:
	 
	 	 
	 

	 	o Refunding
	 
	 

	 	o Conversion
	 
	 	 
	(c)

	 	Type of Advance (check only one):
	 
	 	 
	 

	 	o Prime-based Advance


o Eurodollar-based Advance
	 
	 	 
	(d)

	 	Amount of Advance:
	 
	 	 
	 

	 	$                                        
	 
	 	 
	(e)

	 	Interest Period (applicable to Eurodollar-based Advances)
	 
	 	 
	 

	 	                     months (insert 1, 2 or 3)
	 
	 	 
	(f)

	 	Disbursement Instructions
	 
	 	 
	 

	 	o Comerica Bank Account No.  
            
            
               
	 
	 

	 	o Other:                                                             
	 

	 	                                                                      






     Borrower hereby certifies as follows:



     1. There is no Default or Event of Default in existence, and none will exist upon the



 









 




refunding or conversion of such Advance (both before and immediately after giving effect to
such Advance); and




     2. The representations and warranties of the Credit Parties contained in the Credit Agreement
and the other Loan Documents are true and correct in all material respects and shall be true and
correct in all material respects as of the date of this Request (both before and immediately after
giving effect to such Request), other than any representation or warranty that expressly speaks
only as of a different date.



     Capitalized terms used herein, except as defined to the contrary, have the meanings given them
in the Credit Agreement.



	 	 	 	 	 
	 	QUINSTREET, INC.

 	 
	 	By:  	 	 
	 	 	 	 
	 	Its:  	 	 
	 




2









 





EXHIBIT M




FORM OF SWING LINE PARTICIPATION CERTIFICATE



                                        , ___




[Name of Lender]




                                                            




                                                            





	Re:	 	Revolving Credit and Term Loan Agreement (“Agreement”) is made as of the ___day of
September, 2008, (as amended, restated or otherwise modified from time to time, the “Credit
Agreement”) by and among the financial institutions from time to time signatory thereto
(individually a “Lender,” and any and all such financial institutions collectively the
“Lenders”), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the
“Agent”) and QuinStreet, Inc. (“Borrower”).





Ladies and Gentlemen:




     Pursuant to subsection 2.5(e) of the Credit Agreement, the undersigned hereby acknowledges
receipt from you of $                     as payment for a participating interest in the following
Swing Line Loan:



     Date of Swing Line Loan:                                                             



     Principal Amount of Swing Line Loan:                                                             


The participation evidenced by this certificate shall be subject to the terms and conditions of the
Credit Agreement including without limitation Section 2.5(e) thereof.




	 	 	 	 	 
	 	Very truly yours,




Comerica Bank, as Agent

 	 
	 	By:  	 	 
	 	 	 	 
	 	Its:  	 	 













 






	 	 	 	 	 



EXHIBIT N




NEW BANK ADDENDUM





     THIS NEW BANK ADDENDUM, dated _____________, to the Revolving
Credit and Term Loan Agreement dated as of September 29, 2008 (as otherwise amended or modified
from time to time, the “Credit Agreement”), among QuinStreet, Inc. (“Borrower”), each of the
financial institutions parties thereto (collectively, the “Banks”) and Comerica Bank, as Agent for
the Banks.



W I T N E S S E T H:




     WHEREAS, the Credit Agreement provides in Section 2.13 thereof that a financial institution,
although not originally a party thereto, may become a party to the Credit Agreement with the
consent of the Borrower and the Agent by executing and delivering to the Agent a New Bank Addendum
to the Credit Agreement in substantially the form of this New Bank Addendum; and



     WHEREAS, the undersigned New Bank was not an original party to the Credit Agreement but now
desires to become a party thereto;



     NOW, THEREFORE, the New Bank hereby agrees as follows:



     The New Bank hereby confirms that it has received a copy of the Credit Agreement and the
exhibits and schedules referred to therein, and all other Loan Documents which it considers
necessary, together with copies of the other documents which were required to be delivered under
the Credit Agreement as a condition to the making of the loans thereunder. The New Bank
acknowledges and agrees that it: (a) has made and will continue to make such inquiries and has
taken and will take such care on its own behalf as would have been the case had its commitment
been granted and its loans been made directly by such New Bank to the Borrower without the
intervention of the Agent or any other Bank; and (b) has made and will continue to make,
independently and without reliance upon the Agent or any other Bank, and based on such documents
and information as it has deemed appropriate, its own credit analysis and decisions relating to
the Credit Agreement. The New Bank further acknowledges and agrees that the Agent has made any
representations or warranties about the creditworthiness of the Borrower or any other party to the
Credit Agreement or any other of the Loan Documents, or with respect to the legality, validity,
sufficiency or enforceability of the Credit Agreement, or any other of the Loan Documents.



     New Bank represents and warrants that it is a Person to which assignments are permitted
pursuant to Sections 13.8(c) and (d) of the Credit Agreement.



     Except as otherwise provided in the Credit Agreement, effective as of the Effective Date (as
defined below):




	 	(a)	 	the New Bank (i) shall be deemed automatically to have become a party to
the Credit Agreement and the other Loan Documents, and to have all the rights and















 





	 	 	 	obligations of a party to the Credit Agreement and the other Loan Documents, as
if it were an original signatory; and (ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement and the other Loan Documents as if it
were an original signatory thereto; and
	 
	 	(b)	 	the New Bank shall be a Revolving Credit Bank and its Percentage of the
Revolving Credit (and its risk participation in Letters of Credit) shall be as set
forth in the attached revised Schedule 1.2 (Percentages); provided any fees paid prior
to the Effective Date, including any Letter of Credit Fees, shall not be recalculated,
redistributed or reallocated by Company, Agent or the Banks.





     As used herein, the term “Effective Date” means the date on which all of the following have
occurred or have been completed, as reasonably determined by the Agent:



     (1) the Borrower shall have paid to the Agent, all interest, fees (including the Revolving
Credit Facility Fee) and other amounts, if any, accrued to the Effective Date for which
reimbursement is then owing under the Credit Agreement;



     (2) New Bank shall have remitted to the Agent funds in an amount equal to its Percentage of
all Advances of the Revolving Credit outstanding as of the Effective Date; and



     (3) the Borrower shall have executed and delivered to the Agent for the New Bank, a new
Revolving Credit Note payable to such New Bank in the face amount of such New Bank’s Percentage of
the Revolving Credit Maximum Amount (after giving effect to this New Bank Addendum, and any other
New Bank Addendum executed concurrently herewith).



     The Agent shall notify the New Bank, along with Company, of the Effective Date. The New Bank
shall deliver herewith to the Agent administrative details with respect to the funding and
distribution of Advances (and Letters of Credit) as requested by Agent.



     Terms defined in the Credit Agreement and not otherwise defined herein shall have their
defined meanings when used herein.



     IN WITNESS WHEREOF, the undersigned has caused this New Bank Addendum to be executed and
delivered by a duly authorized officer on the date first above written.



	 	 	 	 	 
	 	[Name of New Bank]

 	 
	 	By:  	 	 
	 	 	 	 
	 	Its:  	 	 













 






	 	 	 	 	 



Accepted this                      day of                     , 20 __.




	 	 	 	 	 
	QUINSTREET, INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Its:
	 	 	 	 
	 

	 	 

	 	 






Accepted this                      day of                     , 20 __.




	 	 	 	 	 
	COMERICA BANK, as Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Its: