CREDIT AGREEMENT
      

      by and among
      

      WELLS FARGO CAPITAL
      FINANCE, LLC,

      as Administrative
      Agent,

      THE LENDERS THAT
      ARE PARTIES HERETO

      as the
      Lenders,

      and

      QUANTUM
      CORPORATION

      as
      Borrower

       

      Dated as of March
      29, 2012 
	 
		 	











	1.	      	DEFINITIONS AND CONSTRUCTION	      	1
	 		1.1.	      	Definitions		1
			1.2.	 	Accounting Terms		1
			1.3.		Code		2
			1.4.		Construction		2
			1.5.		Time References		3
			1.6.		Schedules and Exhibits		3
	2.		LOANS AND TERMS OF PAYMENT		3
			2.1.		Revolving Loans		3
			2.2.		[Intentionally
      Omitted]		4
			2.3.		Borrowing Procedures and
      Settlements		4
			2.4.		Payments; Reductions of Revolver Commitments;
    Prepayments		12
			2.5.		Promise to Pay		16
			2.6.		Interest Rates and Letter of Credit Fee: Rates, Payments, and
      Calculations		16
			2.7.		Crediting Payments		18
			2.8.		Designated Account		18
			2.9.		Maintenance of Loan Account; Statements of
      Obligations		19
			2.10.	 	Fees		19
			2.11.	 	Letters of Credit		20
			2.12.	 	LIBOR Option		27
			2.13.	 	Capital Requirements		29
	3.		CONDITIONS; TERM OF AGREEMENT		31
			3.1.		Conditions Precedent to the Initial
      Extension of Credit		31
			3.2.		Conditions Precedent to all Extensions of Credit		31
			3.3.		Maturity		31
			3.4.		Effect of Maturity		31
			3.5.		Early Termination by Borrower		32
			3.6.		Conditions Subsequent		32
	4.		REPRESENTATIONS AND WARRANTIES		32
			4.1.		Due Organization and Qualification; Subsidiaries		32
			4.2.		Due Authorization; No Conflict	 	33
			4.3.		Governmental Consents		34
			4.4.		Binding Obligations; Perfected
      Liens		34
			4.5.		Title to Assets; No Encumbrances		34
			4.6.		Litigation		34
			4.7.		Compliance with Laws		35
			4.8.		No Material Adverse Effect		35
			4.9.		Solvency		35
			4.10.	 	Employee Benefits		35
			4.11.	 	Environmental Condition		35
			4.12.	 	Complete Disclosure		36
			4.13.	 	Patriot Act		36
			4.14.	 	Indebtedness		37




-i-







		      	4.15.	      	Payment of Taxes	      	37
			4.16.	 	Margin Stock		37
			4.17.	 	Governmental Regulation		37
			4.18.	 	OFAC		37
	 		4.19.	 	Employee and Labor
Matters		37
			4.20.	 	Immaterial Subsidiaries		38
			4.21.	 	Leases		38
			4.22.	 	Accounts		38
			4.23.	 	Inventory		38
			4.24.	 	Location of Inventory		38
			4.25.	 	Inventory Records		39
			4.26.	 	Convertible Subordinated Debt Documents		39
	5.		AFFIRMATIVE COVENANTS		39
		 	5.1.		Financial Statements, Reports, Certificates		39
			5.2.		Reporting		39
			5.3.		Existence		39
			5.4.	 	Maintenance of Properties		40
			5.5.		Taxes		40
			5.6.		Insurance		40
			5.7.		Inspection		41
			5.8.		Compliance with Laws		41
			5.9.		Environmental		41
			5.10.	 	Disclosure Updates		42
			5.11.	 	Formation of Subsidiaries		42
			5.12.	 	Further Assurances		43
			5.13.	 	Lender Meetings		43
			5.14.	 	Location of Inventory		43
			5.15.	 	Cash Management		44
	6.		NEGATIVE COVENANTS		44
			6.1.		Indebtedness	 	44
			6.2.		Liens		44
			6.3.		Restrictions on Fundamental Changes		44
			6.4.		Disposal of Assets		45
			6.5.		Nature of Business		45
			6.6.		Prepayments and Amendments		45
			6.7.		Restricted Payments		47
			6.8.		Accounting Methods		47
			6.9.		Investments; Controlled Investments		48
			6.10.	 	Transactions with
    Affiliates		48
			6.11.	 	Use of Proceeds		49
			6.12.	 	Limitation on Issuance of Equity
      Interests		49
			6.13.	 	[Intentionally
      Omitted]		49
			6.14.	 	Immaterial Subsidiaries		49
	7.		FINANCIAL COVENANTS		50




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	8.		EVENTS OF DEFAULT		50
		     
    	8.1.	      	Payments	      	50
			8.2.		Covenants		50
			8.3.		Judgments		51
			8.4.		Voluntary Bankruptcy, etc		51
			8.5.		Involuntary Bankruptcy, etc		51
			8.6.		Default Under Other Agreements		51
			8.7.	 	Representations, etc		52
			8.8.		Guaranty		52
	 		8.9.		Security Documents		52
		 	8.10.	 	Loan Documents		52
			8.11.	 	Change of Control		52
	9.		RIGHTS AND REMEDIES		52
			9.1.		Rights and Remedies		52
			9.2.		Remedies Cumulative		53
	10.		WAIVERS; INDEMNIFICATION	 	53
			10.1.	 	Demand; Protest; etc		53
			10.2.	 	The Lender Group's Liability for Collateral		54
			10.3.	 	Indemnification		54
	11.		NOTICES		55
	12.		CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER;
      JUDICIAL REFERENCE PROVISION		56
	13.		ASSIGNMENTS AND PARTICIPATIONS;
      SUCCESSORS		59
			13.1.	 	Assignments and
      Participations		59
			13.2.	 	Successors		63
	14.		AMENDMENTS; WAIVERS		64
			14.1.	 	Amendments and
      Waivers		64
			14.2.	 	Replacement of Certain
      Lenders		65
			14.3.	 	No Waivers; Cumulative
      Remedies		66
	15.		AGENT; THE LENDER GROUP		67
			15.1.	 	Appointment and Authorization of
      Agent		67
			15.2.	 	Delegation of Duties		67
			15.3.	 	Liability of Agent		67
			15.4.	 	Reliance by Agent		68
			15.5.	 	Notice of Default or Event of
      Default		68
			15.6.	 	Credit Decision		69
			15.7.	 	Costs and Expenses;
      Indemnification		69
			15.8.	 	Agent in Individual
    Capacity		70
			15.9.	 	Successor Agent		70
			15.10.	 	Lender in Individual
    Capacity		71
			15.11.	 	Collateral Matters		72
			15.12.	 	Restrictions on Actions by Lenders; Sharing
      of Payments		73
			15.13.	 	Agency for Perfection		73
			15.14.	 	Payments by Agent to the
      Lenders		74
		      	15.15.	      	Concerning the Collateral and Related Loan
      Documents	      	74
			15.16.	 	Financial Examination Reports;
      Confidentiality; Disclaimers by Lenders; Other Reports and
      Information		74
			15.17.		Several Obligations; No
      Liability		75





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	16.	      	WITHHOLDING TAXES		75
			16.1.	      	Payments	      	75
			16.2.		Exemptions		76
			16.3.	 	Reductions		77
			16.4.		Refunds	 	78
	17.		GENERAL PROVISIONS		78
			17.1.		Effectiveness		78
			17.2.		Section Headings		78
			17.3.		Interpretation		79
			17.4.		Severability of Provisions		79
			17.5.		Bank Product Providers		79
			17.6.		Debtor-Creditor Relationship		80
			17.7.		Counterparts; Electronic
      Execution		80
			17.8.		Revival and Reinstatement of Obligations; Certain
      Waivers		80
			17.9.		Confidentiality		81
			17.10.		Survival		82
			17.11.		Patriot Act		82
			17.12.		Integration		83
			17.13.		Senior Indebtedness		83




-iv-







EXHIBITS AND SCHEDULES


	Exhibit A-1	                    
    	Form of Assignment and Acceptance
	Exhibit B-1		Form of Borrowing Base Certificate
	Exhibit C-1		Form of Compliance Certificate
	Exhibit L-1		Form of LIBOR Notice
	 
	Schedule A-1		Agent's Account
	Schedule A-2		Authorized Persons
	Schedule C-1		Revolver Commitments
	Schedule D-1		Designated Account
	Schedule E-2		Existing Letters of Credit
	Schedule P-1	 	Permitted Investments
	Schedule P-2		Permitted Liens
	Schedule 3.1		Conditions Precedent
	Schedule 3.6		Conditions Subsequent
	Schedule 4.1(b)		Capitalization of Borrower
	Schedule 4.1(c)		Capitalization of Borrower's Subsidiaries
	Schedule 4.6		Litigation
	Schedule 4.11		Environmental Matters
	Schedule 4.14		Permitted Indebtedness
	Schedule 4.15		Taxes
	Schedule 4.24		Location of Inventory
	Schedule 5.1		Financial Statements, Reports, Certificates
	Schedule 5.2		Collateral Reporting
	Schedule 6.5		Nature of Business



-v-







CREDIT AGREEMENT 

          THIS CREDIT AGREEMENT (this "Agreement"), is entered into as of
March 29, 2012, by and among the lenders identified on the signature pages
hereof (each of such lenders, together with its successors and permitted
assigns, is referred to hereinafter as a "Lender", as that term is hereinafter
further defined), WELLS FARGO CAPITAL FINANCE,
LLC, a Delaware limited liability company, as
administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, "Agent"), and QUANTUM CORPORATION, a
Delaware corporation ("Borrower").

          The parties agree as follows: 

1.
DEFINITIONS AND CONSTRUCTION. 

    
1.1. Definitions. Capitalized terms
used in this Agreement shall have the meanings specified therefor on
Schedule 1.1. 

    
1.2. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance with GAAP;
provided,
that if Borrower notifies Agent that Borrower requests an amendment to any
provision hereof to eliminate the effect of any Accounting Change occurring
after the Closing Date or in the application thereof on the operation of such
provision (or if Agent notifies Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such Accounting Change or in the
application thereof, then Agent and Borrower agree that they will negotiate in
good faith amendments to the provisions of this Agreement that are directly
affected by such Accounting Change with the intent of having the respective
positions of the Lenders and Borrower after such Accounting Change conform as
nearly as possible to their respective positions as of the date of this
Agreement and, until any such amendments have been agreed upon and agreed to by
the Required Lenders, the provisions in this Agreement shall be calculated as if
no such Accounting Change had occurred. When used herein, the term "financial
statements" shall include the notes and schedules thereto. Whenever the term
"Borrower" is used in respect of a financial covenant or a related definition,
it shall be understood to mean Borrower and its Subsidiaries on a consolidated
basis, unless the context clearly requires otherwise. Notwithstanding anything
to the contrary contained herein, (a) all financial covenants contained herein
shall be calculated, without giving effect to any election under the Statement
of Financial Accounting Standards No. 159 (or any similar accounting principle)
permitting a Person to value its financial liabilities or Indebtedness at the
fair value thereof, and (b) the term "unqualified opinion" as used herein to
refer to opinions or reports provided by accountants shall mean an opinion or
report that is (i) unqualified (other than qualifications pertaining solely to
changes in GAAP to the extent any such change has no effect on the calculation
of, or compliance with, any financial covenant contained herein or the
determination of the Borrowing Base), and (ii) does not include any explanation,
supplemental comment, or other comment concerning the ability of the applicable
Person to continue as a going concern or concerning the scope of the audit.


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     1.3. Code. Any terms used in this
Agreement that are defined in the Code shall be construed and defined as set
forth in the Code unless otherwise defined herein; provided, that to the extent
that the Code is used to define any term herein and such term is defined
differently in different Articles of the Code, the definition of such term
contained in Article 9 of the Code shall govern. 

    
1.4. Construction. Unless the context
of this Agreement or any other Loan Document clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms "includes" and "including" are not limiting, and
the term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement or any other Loan Document
refer to this Agreement or such other Loan Document, as the case may be, as a
whole and not to any particular provision of this Agreement or such other Loan
Document, as the case may be. Section, subsection, clause, schedule, and exhibit
references herein are to this Agreement unless otherwise specified. Any
reference in this Agreement or in any other Loan Document to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). The
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties. Any reference herein or in any other Loan Document to the
satisfaction, repayment, or payment in full of the Obligations shall mean (a)
the payment or repayment in full in immediately available funds of (i) the
principal amount of, and interest accrued and unpaid with respect to, all
outstanding Loans, together with the payment of any premium applicable to the
repayment of the Loans, (ii) all Lender Group Expenses that have accrued and are
unpaid regardless of whether demand has been made therefor, (iii) all fees or
charges that have accrued hereunder or under any other Loan Document (including
the Letter of Credit Fee and the Unused Line Fee) and are unpaid, (b) in the
case of contingent reimbursement obligations with respect to Letters of Credit,
providing Letter of Credit Collateralization, (c) in the case of obligations
with respect to Bank Products (other than Hedge Obligations), providing Bank
Product Collateralization, (d) the receipt by Agent of cash collateral in order
to secure any other contingent Obligations for which a claim or demand for
payment has been made on or prior to such time or in respect of matters or
circumstances known to Agent or a Lender at such time that are reasonably
expected to result in any loss, cost, damage, or expense (including attorneys'
fees and legal expenses), such cash collateral to be in such amount as Agent
reasonably determines is appropriate to secure such contingent Obligations, (e)
the payment or repayment in full in immediately available funds of all other
outstanding Obligations (including the payment of any termination amount then
applicable (or which would or could become applicable as a result of the
repayment of the other Obligations) under Hedge Agreements provided by Hedge
Providers) other than (i) unasserted contingent indemnification Obligations,
(ii) any Bank Product Obligations (other than Hedge Obligations) that, at such
time, are allowed by the applicable Bank Product Provider to remain outstanding
without being required to be repaid or cash collateralized, and (iii) any Hedge
Obligations that, at such time, are allowed by the applicable Hedge Provider to
remain outstanding without being required to be repaid, and (f) the termination
of all of the Revolver Commitments of the Lenders. Any reference herein to any
Person shall be construed to include such Person's successors and assigns. Any
requirement of a writing contained herein or in any
other Loan Document shall be satisfied by the transmission of a Record.


-2-








     1.5. Time References. Unless the
context of this Agreement or any other Loan Document clearly requires otherwise,
all references to time of day refer to Pacific standard time or Pacific daylight
saving time, as in effect in Los Angeles, California on such day. For purposes
of the computation of a period of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to and including"; provided that, with respect to a
computation of fees or interest payable to Agent or any Lender, such period
shall in any event consist of at least one full day. 

    
1.6. Schedules and Exhibits. All of the
schedules and exhibits attached to this Agreement shall be deemed incorporated
herein by reference. 

2.
LOANS AND TERMS OF PAYMENT. 

    
2.1. Revolving Loans. 

         
(a) Subject
to the terms and conditions of this Agreement, and during the term of this
Agreement, each Revolving Lender agrees (severally, not jointly or jointly and
severally) to make revolving loans ("Revolving
Loans") to Borrower in an amount at any one
time outstanding not to exceed the lesser of: 

              
(i) such
Lender's Revolver Commitment, and 

              
(ii) such
Lender's Pro Rata Share of an amount equal to the lesser of: 

                   
(A) the
amount equal to (1) the Maximum Revolver Amount less (2) the sum of (x) the
Letter of Credit Usage at such time, plus (y) the principal amount of Swing
Loans outstanding at such time, and 

                   
(B) the
amount equal to (1) the Borrowing Base as of such date (based upon the most
recent Borrowing Base Certificate delivered by Borrower to Agent) less (2) the
sum of (x) the Letter of Credit Usage at such time, plus (y) the principal
amount of Swing Loans outstanding at such time. 

         
(b) Amounts
borrowed pursuant to this Section
2.1 may be repaid and, subject to the terms
and conditions of this Agreement, reborrowed at any time during the term of this
Agreement. The outstanding principal amount of the Revolving Loans, together
with interest accrued and unpaid thereon, shall constitute Obligations and shall
be due and payable on the Maturity Date or, if earlier, on the date on which
they are declared due and payable pursuant to the terms of this Agreement.


         
(c) Anything to the contrary in this Section 2.1 notwithstanding, Agent
shall have the right (but not the obligation), in the exercise of its Permitted
Discretion, to establish and increase or decrease Receivable Reserves, Inventory
Reserves, Bank Product Reserves, and other Reserves against the Borrowing Base
or the Maximum Revolver Amount. The amount of any Receivable Reserve, Inventory
Reserve, Bank Product Reserve, or other Reserve established by Agent shall have a reasonable
relationship to the event, condition, other circumstance, or fact that is the
basis for such reserve and shall not be duplicative of any other reserve
established and currently maintained. Upon establishment or increase in
reserves, Agent agrees to make itself available to discuss the reserve or
increase, and Borrower may take such action as may be required so that the
event, condition, circumstance, or fact that is the basis for such reserve or
increase no longer exists, in a manner and to the extent reasonably satisfactory
to Agent in the exercise of its Permitted Discretion. In no event shall such
opportunity limit the right of Agent to establish or change such Receivable
Reserve, Inventory Reserve, Bank Product Reserve, or other Reserves, unless
Agent shall have determined, in its Permitted Discretion, that the event,
condition, other circumstance, or fact that was the basis for such Receivable
Reserve, Inventory Reserve, Bank Product Reserve, or other Reserves or such
change no longer exists or has otherwise been adequately addressed by Borrower.


-3-








     2.2. [Intentionally
Omitted]. 

    
2.3. Borrowing Procedures and Settlements. 

         
(a) Procedure for Borrowing Revolving Loans. Each Borrowing shall be made by a written request by an Authorized
Person delivered to Agent and received by Agent no later than 11:00 a.m. (i) on
the Business Day that is the requested Funding Date in the case of a request for
a Swing Loan, and (ii) on the Business Day that is 1 Business Day prior to the
requested Funding Date in the case of all other requests, specifying (A) the
amount of such Borrowing, and (B) the requested Funding Date (which shall be a
Business Day); provided, that Agent may, in its sole discretion, elect to accept as
timely requests that are received later than 11:00 a.m. on the applicable
Business Day. At Agent's election, in lieu of delivering the above-described
written request, any Authorized Person may give Agent telephonic notice of such
request by the required time. In such circumstances, Borrower agrees that any
such telephonic notice will be confirmed in writing within 24 hours of the
giving of such telephonic notice, but the failure to provide such written
confirmation shall not affect the validity of the request. 

         
(b) Making of Swing Loans. In the case of
a request for a Revolving Loan and so long as either (i) the aggregate amount of
Swing Loans made since the last Settlement Date, minus all payments or other
amounts applied to Swing Loans since the last Settlement Date, plus the amount
of the requested Swing Loan does not exceed $7,500,000, or (ii) Swing Lender, in
its sole discretion, agrees to make a Swing Loan notwithstanding the foregoing
limitation, Swing Lender shall make a Revolving Loan (any such Revolving Loan
made by Swing Lender pursuant to this Section
2.3(b) being referred to as a
"Swing Loan" and all such Revolving Loans being referred to as "Swing Loans") available to
Borrower on the Funding Date applicable thereto by transferring immediately
available funds in the amount of such requested Borrowing to the Designated
Account. Each Swing Loan shall be deemed to be a Revolving Loan hereunder and
shall be subject to all the terms and conditions (including Section 3) applicable to
other Revolving Loans, except that all payments (including interest) on any
Swing Loan shall be payable to Swing Lender solely for its own account. Subject
to the provisions of Section
2.3(d)(ii), Swing Lender shall not make and
shall not be obligated to make any Swing Loan if Swing Lender has actual
knowledge that (i) one or more of the applicable conditions precedent set forth
in Section 3 will not be satisfied on the requested Funding Date for the applicable
Borrowing, or (ii) the requested Borrowing would exceed the Availability on such Funding Date. Swing Lender shall not
otherwise be required to determine whether the applicable conditions precedent
set forth in Section 3 have been satisfied on the Funding Date applicable thereto
prior to making any Swing Loan. The Swing Loans shall be secured by Agent's
Liens, constitute Revolving Loans and Obligations, and bear interest at the rate
applicable from time to time to Revolving Loans that are Base Rate Loans.


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          (c) Making of Revolving Loans. 

              
(i) In the
event that Swing Lender is not obligated to make a Swing Loan, then after
receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent shall notify the
Lenders by telecopy, telephone, email, or other electronic form of transmission,
of the requested Borrowing; such notification to be sent on the Business Day
that is 1 Business Day prior to the requested Funding Date. If Agent has
notified the Lenders of a requested Borrowing on the Business Day that is 1
Business Day prior to the Funding Date, then each Lender shall make the amount
of such Lender's Pro Rata Share of the requested Borrowing available to Agent in
immediately available funds, to Agent's Account, not later than 10:00 a.m. on
the Business Day that is the requested Funding Date. After Agent's receipt of
the proceeds of such Revolving Loans from the Lenders, Agent shall make the
proceeds thereof available to Borrower on the applicable Funding Date by
transferring immediately available funds equal to such proceeds received by
Agent to the Designated Account; provided, that, subject to the provisions of
Section 2.3(d)(ii),
no Lender shall have an obligation to make any Revolving Loan, if (1) one or
more of the applicable conditions precedent set forth in Section 3 will not be
satisfied on the requested Funding Date for the applicable Borrowing unless such
condition has been waived, or (2) the requested Borrowing would exceed the
Availability on such Funding Date. 

              
(ii) Unless
Agent receives notice from a Lender prior to 9:30 a.m. on the Business Day that
is the requested Funding Date relative to a requested Borrowing as to which
Agent has notified the Lenders of a requested Borrowing that such Lender will
not make available as and when required hereunder to Agent for the account of
Borrower the amount of that Lender's Pro Rata Share of the Borrowing, Agent may
assume that each Lender has made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may (but shall not be
so required), in reliance upon such assumption, make available to Borrower a
corresponding amount. If, on the requested Funding Date, any Lender shall not
have remitted the full amount that it is required to make available to Agent in
immediately available funds and if Agent has made available to Borrower such
amount on the requested Funding Date, then such Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to Agent in
immediately available funds, to Agent's Account, no later than 10:00 a.m. on the
Business Day that is the first Business Day after the requested Funding Date (in
which case, the interest accrued on such Lender's portion of such Borrowing for
the Funding Date shall be for Agent's separate account). If any Lender shall not
remit the full amount that it is required to make available to Agent in
immediately available funds as and when required hereby and if Agent has made
available to Borrower such amount, then that Lender shall be obligated to
immediately remit such amount to Agent, together with interest at the Defaulting
Lender Rate for each day until the date on which such amount is so remitted. A
notice submitted by Agent to any Lender with respect to amounts owing under this
Section 2.3(c)(ii)
shall be conclusive, absent manifest error. If the amount that a Lender is
required to remit is made available to Agent, then such payment to Agent shall
constitute such Lender's Revolving Loan for all purposes of this
Agreement. If such amount is not made available to Agent on the Business Day
following the Funding Date, Agent will notify Borrower of such failure to fund
and, upon demand by Agent, Borrower shall pay such amount to Agent for Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Revolving Loans composing such Borrowing. 

-5-








          (d) Protective Advances and Optional Overadvances. 

              
(i) Any
contrary provision of this Agreement or any other Loan Document notwithstanding,
at any time (A) after the occurrence and during the continuance of a Default or
an Event of Default, or (B) that any of the other applicable conditions
precedent set forth in Section
3 are not satisfied, Agent hereby is
authorized by Borrower and the Lenders, from time to time, in Agent's sole
discretion, to make Revolving Loans to, or for the benefit of, Borrower, on
behalf of the Revolving Lenders, that Agent, in its Permitted Discretion, deems
necessary or desirable (1) to preserve or protect the Collateral, or any portion
thereof, or (2) to enhance the likelihood of repayment of the Obligations (other
than the Bank Product Obligations) (the Revolving Loans described in this
Section 2.3(d)(i) shall be referred to as "Protective
Advances"). 

              
(ii) Any
contrary provision of this Agreement or any other Loan Document notwithstanding,
the Lenders hereby authorize Agent or Swing Lender, as applicable, and either
Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly
and intentionally, continue to make Revolving Loans (including Swing Loans) to
Borrower notwithstanding that an Overadvance exists or would be created thereby,
so long as (A) after giving effect to such Revolving Loans, the outstanding
Revolver Usage does not, without the consent of Required Lenders, exceed the
Borrowing Base (based upon the most recent Borrowing Base Certificate delivered
by Borrower to Agent) by more than $7,500,000, and (B) after giving effect to
such Revolving Loans, the outstanding Revolver Usage (except for and excluding
amounts charged to the Loan Account for interest, fees, or Lender Group
Expenses) does not, without the consent of Required Lenders, exceed the Maximum
Revolver Amount. In the event Agent obtains actual knowledge that the Revolver
Usage exceeds the amounts permitted by the immediately foregoing provisions,
regardless of the amount of, or reason for, such excess, Agent shall notify the
Lenders as soon as practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) unless Agent determines
that prior notice would result in imminent harm to the Collateral or its value,
in which case Agent may make such Overadvances and provide notice as promptly as
practicable thereafter), and the Lenders with Revolver Commitments thereupon
shall, together with Agent, jointly determine the terms of arrangements that
shall be implemented with Borrower intended to reduce, within a reasonable time,
the outstanding principal amount of the Revolving Loans to Borrower to an amount
permitted by the preceding sentence. In such circumstances, if any Lender with a
Revolver Commitment objects to the proposed terms of reduction or repayment of
any Overadvance, the terms of reduction or repayment thereof shall be
implemented according to the determination of the Required Lenders. The
foregoing provisions are meant for the benefit of the Lenders and Agent (it
being understood that Required Lenders may, without the consent of Borrower,
waive any of the restrictions or limitations in respect of Overadvances set
forth in this clause (ii)) and are not meant for the benefit of
Borrower, which shall continue to be bound by the provisions of Section 2.4(e). Each Lender
with a Revolver Commitment shall be obligated to settle with Agent as provided
in Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of such Lender's Pro Rata
Share of any unintentional Overadvances by Agent reported to such Lender, any
intentional Overadvances made as permitted under this Section 2.3(d)(ii), and any
Overadvances resulting from the charging to the Loan Account of interest, fees,
or Lender Group Expenses. 

-6-








              
(iii) Each
Protective Advance and each Overadvance (each, an "Extraordinary Advance") shall be
deemed to be a Revolving Loan hereunder, except that no Extraordinary Advance
shall be eligible to be a LIBOR Rate Loan and, prior to Settlement therefor, all
payments on the Extraordinary Advances shall be payable to Agent solely for its
own account. The Extraordinary Advances shall be repayable on demand, secured by
Agent's Liens, constitute Obligations hereunder, and bear interest at the rate
applicable from time to time to Revolving Loans that are Base Rate Loans. The
provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing
Lender, and the Lenders and are not intended to benefit Borrower (or any other
Loan Party) in any way. 

              
(iv) Notwithstanding anything contained in this Agreement or any other Loan
Document to the contrary: (A) without the consent of Required Lenders, no
Extraordinary Advance may be made by Agent if such Extraordinary Advance would
cause the aggregate principal amount of Extraordinary Advances outstanding to
exceed an amount equal to 10% of the Maximum Revolver Amount; and (B) to the
extent that the making of any Extraordinary Advance causes the aggregate
Revolver Usage to exceed the Maximum Revolver Amount, such portion of such
Extraordinary Advance shall be for Agent's sole and separate account and not for
the account of any Lender and shall be entitled to priority in repayment in
accordance with Section 2.4(b). 

          (e) Settlement. It is agreed that each
Lender's funded portion of the Revolving Loans is intended by the Lenders to
equal, at all times, such Lender's Pro Rata Share of the outstanding Revolving
Loans. Such agreement notwithstanding, Agent, Swing Lender, and the other
Lenders agree (which agreement shall not be for the benefit of Borrower) that in
order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among the Lenders as to the Revolving Loans, the Swing
Loans, and the Extraordinary Advances shall take place on a periodic basis in
accordance with the following provisions: 


-7-








              
(i) Agent
shall request settlement ("Settlement") with the Lenders on a
weekly basis, or on a more frequent basis if so determined by Agent in its sole
discretion (1) on behalf of Swing Lender, with respect to the outstanding Swing
Loans, (2) for itself, with respect to the outstanding Extraordinary Advances,
and (3) with respect to Borrower's or its Subsidiaries' payments or other
amounts received, as to each by notifying the Lenders by telecopy, telephone, or
other similar form of transmission, of such requested Settlement, no later than
2:00 p.m. on the Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the "Settlement Date"). Such
notice of a Settlement Date shall include a summary statement of the amount of
outstanding Revolving Loans, Swing Loans, and Extraordinary Advances for the
period since the prior Settlement Date. Subject to the terms and conditions contained herein (including
Section 2.3(g)): (y) if the amount of the Revolving Loans (including Swing Loans, and
Extraordinary Advances) made by a Lender that is not a Defaulting Lender exceeds
such Lender's Pro Rata Share of the Revolving Loans (including Swing Loans, and
Extraordinary Advances) as of a Settlement Date, then Agent shall, by no later
than 12:00 p.m. on the Settlement Date, transfer in immediately available funds
to a Deposit Account of such Lender (as such Lender may designate), an amount
such that each such Lender shall, upon receipt of such amount, have as of the
Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing
Loans, and Extraordinary Advances), and (z) if the amount of the Revolving Loans
(including Swing Loans, and Extraordinary Advances) made by a Lender is less
than such Lender's Pro Rata Share of the Revolving Loans (including Swing Loans,
and Extraordinary Advances) as of a Settlement Date, such Lender shall no later
than 12:00 p.m. on the Settlement Date transfer in immediately available funds
to Agent's Account, an amount such that each such Lender shall, upon transfer of
such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving
Loans (including Swing Loans and Extraordinary Advances). Such amounts made
available to Agent under clause (z) of the immediately preceding sentence shall
be applied against the amounts of the applicable Swing Loans or Extraordinary
Advances and, together with the portion of such Swing Loans or Extraordinary
Advances representing Swing Lender's Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders. If any such amount is not made available to
Agent by any Lender on the Settlement Date applicable thereto to the extent
required by the terms hereof, Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate. 

              
(ii) In determining whether a Lender's balance of the Revolving
Loans, Swing Loans, and Extraordinary Advances is less than, equal to, or
greater than such Lender's Pro Rata Share of the Revolving Loans, Swing Loans,
and Extraordinary Advances as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments actually
received in good funds by Agent with respect to principal, interest, fees
payable by Borrower and allocable to the Lenders hereunder, and proceeds of
Collateral. 

              
(iii) Between Settlement Dates, Agent, to the extent Extraordinary Advances or
Swing Loans are outstanding, may pay over to Agent or Swing Lender, as
applicable, any payments or other amounts received by Agent, that in accordance
with the terms of this Agreement would be applied to the reduction of the
Revolving Loans, for application to the Extraordinary Advances or Swing Loans.
Between Settlement Dates, Agent, to the extent no Extraordinary Advances or
Swing Loans are outstanding, may pay over to Swing Lender any payments or other
amounts received by Agent, that in accordance with the terms of this Agreement
would be applied to the reduction of the Revolving Loans, for application to
Swing Lender's Pro Rata Share of the Revolving Loans. If, as of any Settlement
Date, payments or other amounts of Borrower or its Subsidiaries received since
the then immediately preceding Settlement Date have been applied to Swing
Lender's Pro Rata Share of the Revolving Loans other than to Swing Loans, as
provided for in the previous sentence, Swing Lender shall pay to Agent for the
accounts of the Lenders, and Agent shall pay to the Lenders (other than a
Defaulting Lender if Agent has implemented the provisions of Section 2.3(g)), to be
applied to the outstanding Revolving Loans of such Lenders, an amount such that
each such Lender shall, upon receipt of such amount, have, as of such Settlement
Date, its Pro Rata Share of the Revolving Loans. During the period between
Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect
to Extraordinary Advances, and each Lender with respect to the Revolving Loans
other than Swing Loans and Extraordinary Advances, shall be entitled to interest
at the applicable rate or rates payable under this Agreement on the daily amount
of funds employed by Swing Lender, Agent, or the Lenders, as
applicable. 

-8- 







              
(iv) Anything in this Section
2.3(e) to the contrary notwithstanding, in
the event that a Lender is a Defaulting Lender, Agent shall be entitled to
refrain from remitting settlement amounts to the Defaulting Lender and, instead,
shall be entitled to elect to implement the provisions set forth in
Section 2.3(g). 

          
(f) Notation. Agent, as a non-fiduciary
agent for Borrower, shall maintain a register showing the principal amount of
the Revolving Loans, owing to each Lender, including the Swing Loans owing to
Swing Lender, and Extraordinary Advances owing to Agent, and the interests
therein of each Lender, from time to time and such register shall, absent
manifest error, conclusively be presumed to be correct and accurate. 

          (g) Defaulting Lenders. 

              
(i) Notwithstanding the provisions of Section 2.4(b)(ii), Agent shall not be
obligated to transfer to a Defaulting Lender any payments made by Borrower to
Agent for the Defaulting Lender's benefit or any proceeds of Collateral that
would otherwise be remitted hereunder to the Defaulting Lender, and, in the
absence of such transfer to the Defaulting Lender, Agent shall transfer any such
payments (A) first, to Swing Lender to the extent of any Swing Loans that were
made by Swing Lender and that were required to be, but were not, paid by the
Defaulting Lender, (B) second, to Issuing Lender, to the extent of the portion
of a Letter of Credit Disbursement that was required to be, but was not, paid by
the Defaulting Lender, (C) third, to each Non-Defaulting Lender ratably in
accordance with its Revolver Commitment (but, in each case, only to the extent
that such Defaulting Lender's portion of a Revolving Loan (or other funding
obligation) was funded by such other Non-Defaulting Lender), (D) to a suspense
account maintained by Agent, the proceeds of which shall be retained by Agent
and may be made available to be re-advanced to or for the benefit of Borrower
(upon the request of Borrower and subject to the conditions set forth in
Section 3.2) as if such Defaulting Lender had made its portion of Revolving Loans
(or other funding obligations) hereunder, and (E) from and after the date on
which all other Obligations have been paid in full, to such Defaulting Lender in
accordance with tier (L) of Section
2.4(b)(ii). Subject to the foregoing, Agent
may hold and, in its discretion, re-lend to Borrower for the account of such
Defaulting Lender the amount of all such payments received and retained by Agent
for the account of such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents (including the
calculation of Pro Rata Share in connection therewith) and for the purpose of
calculating the fee payable under Section
2.10(b), such Defaulting Lender shall be
deemed not to be a "Lender" and such Lender's Revolver Commitment shall be
deemed to be zero; provided, that the foregoing shall not apply to any of the matters
governed by Section 14.1(a)(i) through (iii). The provisions of this
Section 2.3(g) shall remain effective with respect to such Defaulting Lender until the
earlier of (y) the date on which all of the Non-Defaulting Lenders, Agent,
Issuing Lender, and Borrower shall have waived, in writing, the application of
this Section 2.3(g) to such Defaulting Lender, or (z) the date on which such Defaulting
Lender makes payment of all amounts that it was obligated to fund hereunder,
pays to Agent all amounts owing by Defaulting Lender in respect of the
amounts that it was obligated to fund hereunder, and, if requested by Agent,
provides adequate assurance of its ability to perform its future obligations
hereunder (on which earlier date, so long as no Event of Default has occurred
and is continuing, any remaining cash collateral held by Agent pursuant to
Section 2.3(g)(ii) shall be released to Borrower). The operation of this Section 2.3(g) shall not be
construed to increase or otherwise affect the Revolver Commitment of any Lender,
to relieve or excuse the performance by such Defaulting Lender or any other
Lender of its duties and obligations hereunder, or to relieve or excuse the
performance by Borrower of its duties and obligations hereunder to Agent,
Issuing Lender, or to the Lenders other than such Defaulting Lender. Any failure
by a Defaulting Lender to fund amounts that it was obligated to fund hereunder
shall constitute a material breach by such Defaulting Lender of this Agreement
and shall entitle Borrower, at its option, upon written notice to Agent, to
arrange for a substitute Lender to assume the Revolver Commitment of such
Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent.
In connection with the arrangement of such a substitute Lender, the Defaulting
Lender shall have no right to refuse to be replaced hereunder, and agrees to
execute and deliver a completed form of Assignment and Acceptance in favor of
the substitute Lender (and agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject only to being paid its
share of the outstanding Obligations (other than Bank Product Obligations, but
including (1) all interest, fees, and other amounts that may be due and payable
in respect thereof, and (2) an assumption of its Pro Rata Share of its
participation in the Letters of Credit); provided, that any such assumption of
the Revolver Commitment of such Defaulting Lender shall not be deemed to
constitute a waiver of any of the Lender Groups' or Borrower's rights or
remedies against any such Defaulting Lender arising out of or in relation to
such failure to fund. In the event of a direct conflict between the priority
provisions of this Section
2.3(g) and any other provision contained in
this Agreement or any other Loan Document, it is the intention of the parties
hereto that such provisions be read together and construed, to the fullest
extent possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section
2.3(g) shall control and govern.


-9-







              
(ii) If any Swing Loan or Letter of Credit is outstanding at the
time that a Lender becomes a Defaulting Lender then: 

                   
(A) such
Defaulting Lender's Swing Loan Exposure and Letter of Credit Exposure shall be
reallocated among the Non-Defaulting Lenders in accordance with their respective
Pro Rata Shares but only to the extent (x) the sum of all Non-Defaulting
Lenders' Revolving Loan Exposures plus such Defaulting Lender's Swing Loan
Exposure and Letter of Credit Exposure does not exceed the total of all
Non-Defaulting Lenders' Revolver Commitments and (y) the conditions set forth in
Section 3.2
are satisfied at such time; 

                   
(B) if the
reallocation described in clause (A) above cannot, or can only partially, be
effected, Borrower shall within one Business Day following notice by Agent (x)
first, prepay such Defaulting Lender's Swing Loan Exposure (after giving effect
to any partial reallocation pursuant to clause (A) above) and (y) second, cash
collateralize such Defaulting Lender's Letter of Credit Exposure (after giving
effect to any partial reallocation pursuant to clause (A) above), pursuant to a
cash collateral agreement to be entered into in form and substance reasonably
satisfactory to Agent, for so long as such Letter of Credit Exposure is
outstanding; provided, that Borrower shall not be obligated to cash
collateralize any Defaulting Lender's Letter of Credit Exposure if such
Defaulting Lender is also the Issuing Lender;  

-10-







                   
(C) if Borrower cash collateralizes any portion of such Defaulting
Lender's Letter of Credit Exposure pursuant to this Section 2.3(g)(ii), Borrower
shall not be required to pay any Letter of Credit Fees to Agent for the account
of such Defaulting Lender pursuant to Section
2.6(b) with respect to such cash
collateralized portion of such Defaulting Lender's Letter of Credit Exposure
during the period such Letter of Credit Exposure is cash collateralized;


                   
(D) to the
extent the Letter of Credit Exposure of the Non-Defaulting Lenders is
reallocated pursuant to this Section
2.3(g)(ii), then the Letter of Credit Fees
payable to the Non-Defaulting Lenders pursuant to Section 2.6(b) shall be adjusted in
accordance with such Non-Defaulting Lenders' Letter of Credit Exposure;


                    (E) to the
extent any Defaulting Lender's Letter of Credit Exposure is neither cash
collateralized nor reallocated pursuant to this Section 2.3(g)(ii), then, without
prejudice to any rights or remedies of the Issuing Lender or any Lender
hereunder, all Letter of Credit Fees that would have otherwise been payable to
such Defaulting Lender under Section
2.6(b) with respect to such portion of such
Letter of Credit Exposure shall instead be payable to the Issuing Lender until
such portion of such Defaulting Lender's Letter of Credit Exposure is cash
collateralized or reallocated; 

                   
(F) so long
as any Lender is a Defaulting Lender, the Swing Lender shall not be required to
make any Swing Loan and the Issuing Lender shall not be required to issue,
amend, or increase any Letter of Credit, in each case, to the extent (x) the
Defaulting Lender's Pro Rata Share of such Swing Loans or Letter of Credit
cannot be reallocated pursuant to this Section
2.3(g)(ii) or (y) the Swing Lender or Issuing
Lender, as applicable, has not otherwise entered into arrangements reasonably
satisfactory to the Swing Lender or Issuing Lender, as applicable, and Borrower
to eliminate the Swing Lender's or Issuing Lender's risk with respect to the
Defaulting Lender's participation in Swing Loans or Letters of Credit; and


                    (G) Agent
may release any cash collateral provided by Borrower pursuant to this
Section 2.3(g)(ii) to the Issuing Lender and the Issuing Lender may apply any such cash
collateral to the payment of such Defaulting Lender's Pro Rata Share of any
Letter of Credit Disbursement that is not reimbursed by Borrower pursuant to
Section 2.11(a). 

         
(h) Independent Obligations. All Revolving
Loans (other than Swing Loans and Extraordinary Advances) shall be made by the
Lenders contemporaneously and in accordance with their Pro Rata Shares. It is
understood that (i) no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Revolving Loan (or other extension
of credit) hereunder, nor shall any Revolver Commitment of any Lender be
increased or decreased as a result of any failure by any other Lender to perform
its obligations hereunder, and (ii) no failure by any Lender to perform its
obligations hereunder shall excuse any other Lender from its obligations
hereunder. 

-11-







     2.4. Payments; Reductions of Revolver Commitments; Prepayments. 

         
(a) Payments by Borrower. 

              
(i) Except
as otherwise expressly provided herein, all payments by Borrower shall be made
to Agent's Account for the account of the Lender Group and shall be made in
immediately available funds, no later than 1:30 p.m. on the date specified
herein. Any payment received by Agent later than 1:30 p.m. shall be deemed to
have been received (unless Agent, in its sole discretion, elects to credit it on
the date received) on the following Business Day and any applicable interest or
fee shall continue to accrue until such following Business Day. 

              
(ii) Unless
Agent receives notice from Borrower prior to the date on which any payment is
due to the Lenders that Borrower will not make such payment in full as and when
required, Agent may assume that Borrower has made (or will make) such payment in
full to Agent on such date in immediately available funds and Agent may (but
shall not be so required), in reliance upon such assumption, distribute to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent Borrower does not make such payment in full to Agent on the
date when due, each Lender severally shall repay to Agent on demand such amount
distributed to such Lender, together with interest thereon at the Defaulting
Lender Rate for each day from the date such amount is distributed to such Lender
until the date repaid. 

         
(b) Apportionment and Application.


              
(i) So long
as no Application Event has occurred and is continuing and except as otherwise
provided herein with respect to Defaulting Lenders, all principal and interest
payments received by Agent shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Obligations to which such
payments relate held by each Lender) and all payments of fees and expenses
received by Agent (other than fees or expenses that are for Agent's separate
account or for the separate account of Issuing Lender) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type of Revolver
Commitment or Obligation to which a particular fee or expense relates. Subject
to Section 2.4(b)(iv)
and Section 2.4(e), all payments to be made hereunder by Borrower shall be remitted to
Agent and all such payments, and all proceeds of Collateral received by Agent,
shall be applied, so long as no Application Event has occurred and is continuing
and except as otherwise provided herein with respect to Defaulting Lenders, to
reduce the balance of the Revolving Loans outstanding and, thereafter, to
Borrower (to be wired to the Designated Account) or such other Person entitled
thereto under applicable law. 

-12-







              
(ii) At any
time that an Application Event has occurred and is continuing and except as
otherwise provided herein with respect to Defaulting Lenders, all payments
remitted to Agent and all proceeds of Collateral received by Agent shall be
applied as follows: 

                   
(A) first, to pay any Lender
Group Expenses (including cost or expense reimbursements) or indemnities then
due to Agent under the Loan Documents, until paid in full, 

                   
(B) second, to pay any fees or premiums
then due to Agent under the Loan Documents until paid in full, 

                   
(C) third, to pay interest due in respect
of all Protective Advances until paid in full, 

                   
(D) fourth, to pay the principal of all
Protective Advances until paid in full, 

                   
(E) fifth, ratably, to pay any Lender
Group Expenses (including cost or expense reimbursements) or indemnities then
due to any of the Lenders under the Loan Documents, until paid in full,


                   
(F) sixth, ratably, to pay any fees or
premiums then due to any of the Lenders under the Loan Documents until paid in
full, 

                   
(G) seventh, to pay interest accrued in
respect of the Swing Loans until paid in full, 

                   
(H) eighth, to pay the principal of all
Swing Loans until paid in full, 

                   
(I) ninth, ratably, to pay interest
accrued in respect of the Revolving Loans (other than Protective Advances) until
paid in full, 

                   
(J) tenth, ratably 

                        
i. to pay
the principal of all Revolving Loans until paid in full, 

                        
ii. to
Agent, to be held by Agent, for the benefit of Issuing Lender (and for the
ratable benefit of each of the Lenders that have an obligation to pay to Agent,
for the account of Issuing Lender, a share of each Letter of Credit
Disbursement), as cash collateral in an amount up to 103% of the Letter of
Credit Usage (to the extent permitted by applicable law, such cash collateral
shall be applied to the reimbursement of any Letter of Credit Disbursement as
and when such disbursement occurs and, if a Letter of Credit expires undrawn,
the cash collateral held by Agent in respect of such Letter of Credit shall, to
the extent permitted by applicable law, be reapplied pursuant to this
Section 2.4(b)(ii), beginning with tier (A) hereof), 

-13-







                        
iii. ratably, up to the amount (after taking into account any amounts
previously paid pursuant to this clause iii. during the continuation of the
applicable Application Event) of the most recently established Bank Product
Reserve to (y) the Bank Product Providers based upon amounts then certified by
the applicable Bank Product Provider to Agent (in form and substance
satisfactory to Agent) to be due and payable to such Bank Product Providers on
account of Bank Product Obligations, and (z) with any balance to be paid to
Agent, to be held by Agent, for the ratable benefit of the Bank Product
Providers, as cash collateral (which cash collateral may be released by Agent to
the applicable Bank Product Provider and applied by such Bank Product Provider
to the payment or reimbursement of any amounts due and payable with respect to
Bank Product Obligations owed to the applicable Bank Product Provider as and
when such amounts first become due and payable and, if and at such time as all
such Bank Product Obligations are paid or otherwise satisfied in full, the cash
collateral held by Agent in respect of such Bank Product Obligations shall be
reapplied pursuant to this Section
2.4(b)(ii), beginning with tier (A) hereof,


                   
(K) eleventh, to pay any other
Obligations other than Obligations owed to Defaulting Lenders, 

                   
(L) twelfth, ratably to pay any
Obligations owed to Defaulting Lenders; and 

                   
(M) thirteenth, to Borrower (to be wired
to the Designated Account) or such other Person entitled thereto under
applicable law. 

              
(iii) Agent
promptly shall distribute to each Lender, pursuant to the applicable wire
instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided in
Section 2.3(e). 

              
(iv) In
each instance, so long as no Application Event has occurred and is continuing,
Section 2.4(b)(i) shall not apply to any payment made by Borrower to Agent and specified
by Borrower to be for the payment of specific Obligations then due and payable
(or prepayable) under any provision of this Agreement or any other Loan
Document. 

              
(v) For
purposes of Section 2.4(b)(ii), "paid in full" of a type of Obligation means payment in cash
or immediately available funds of all amounts owing on account of such type of
Obligation, including interest accrued after the commencement of any Insolvency
Proceeding, default interest, interest on interest, and expense reimbursements,
irrespective of whether any of the foregoing would be or is allowed or
disallowed in whole or in part in any Insolvency Proceeding. 

              
(vi) In the
event of a direct conflict between the priority provisions of this
Section 2.4
and any other provision contained in this Agreement or any other Loan Document,
it is the intention of the parties hereto that such provisions be read together
and construed, to the fullest extent possible, to be in concert with each other.
In the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, if the conflict relates to the provisions of Section 2.3(g) and this
Section 2.4, then the provisions of Section
2.3(g) shall control and govern, and if
otherwise, then the terms and provisions of this Section 2.4 shall control and govern.


-14-







         
(c) Reduction of Revolver Commitments. The
Revolver Commitments shall terminate on the Maturity Date. Borrower may reduce
the Revolver Commitments, without premium or penalty, to an amount (which may be
zero) not less than the sum of (A) the Revolver Usage as of such date, plus (B)
the principal amount of all Revolving Loans not yet made as to which a request
has been given by Borrower under Section
2.3(a), plus (C) the amount of all Letters of
Credit not yet issued as to which a request has been given by Borrower pursuant
to Section 2.11(a). Each such reduction shall be in an amount which is not less than
$5,000,000 (unless the Revolver Commitments are being reduced to zero and the
amount of the Revolver Commitments in effect immediately prior to such reduction
are less than $5,000,000), shall be made by providing not less than 5 Business
Days prior written notice to Agent, and shall be irrevocable; provided that a notice of
termination of Revolver Commitments delivered by Borrower in connection with the
payment in full of the Obligations may state that such notice is conditioned
upon the effectiveness of another credit facility or the closing of another
transaction, in which case such notice may be revoked by Borrower (by notice to
Agent on or prior to the specified prepayment date) if such condition is not
satisfied. Once reduced, the Revolver Commitments may not be increased. Each
such reduction of the Revolver Commitments shall reduce the Revolver Commitments
of each Lender proportionately in accordance with its ratable share thereof.


          (d)
Optional Prepayments. Borrower may prepay the principal of any Revolving Loan at
any time in whole or in part, without premium or penalty. 

          (e) Mandatory
Prepayments.

               
(i) Borrowing
Base. If, at any time, (i) the Revolver Usage
on such date exceeds (ii) the Borrowing Base reflected in the Borrowing Base
Certificate most recently delivered by Borrower to Agent, then Borrower shall
promptly, but in any event, within 1 Business Day, prepay the Obligations in
accordance with Section 2.4(f) in an aggregate amount equal to the amount of such excess.


               
(ii) Dispositions. Within 1 Business Day of
the date of receipt by Borrower or any other Loan Party of the Net Cash Proceeds
of any voluntary or involuntary sale or disposition by Borrower or any other
Loan Party which qualifies as a Permitted Disposition under clause (q) of the
definition of Permitted Dispositions, Borrower shall prepay the outstanding
principal amount of the Obligations in accordance with Section 2.4(f) in an amount
equal to 100% of such Net Cash Proceeds received by such Person in connection
with such sale or disposition; provided that, so long as (A) no
Default or Event of Default shall have occurred and is continuing or would
result therefrom, (B) Borrower shall have given Agent prior written notice of
Borrower's intention to apply such monies to the costs of replacement of the
properties or assets that are the subject of such sale or disposition or the
cost of purchase or construction of other assets useful in the business of
Borrower or the other Loan Parties, (C) the monies are held in a Deposit Account
in which Agent has a perfected first-priority security interest, and (D)
Borrower or the other Loan Parties, as applicable, complete such replacement,
purchase, or construction within 180 days after the initial receipt of such
monies, then the Loan Party whose assets were the subject of such disposition
shall have the option to apply such monies to the costs of replacement of the
assets that are the subject of such sale or disposition unless and to the extent
that such applicable period shall have expired without such replacement,
purchase, or construction being made or completed, in which case, any amounts
remaining in the Deposit Account referred to in clause (C) above shall be paid
to Agent and applied in accordance with Section 2.4(f); provided further, that no
payment shall be required under this Section
2.4(e)(ii) unless the aggregate Net Cash Proceeds
required to be paid, after giving effect to the previous proviso of this
Section 2.4(e)(ii) equal or exceed $6,000,000 in any fiscal year. Nothing contained in this
Section 2.4(e)(ii) shall permit Borrower or any of its Subsidiaries to sell or otherwise
dispose of any assets other than in accordance with Section 6.4. 

-15-







          (f) Application of Payments. Each
prepayment pursuant to Section
2.4(e) shall, (A) so long as no Application
Event shall have occurred and be continuing, be applied, first, to the
outstanding principal amount of the Revolving Loans until paid in full, and
second, to cash collateralize the Letters of Credit in an amount equal to 103%
of the then outstanding Letter of Credit Usage, and (B) if an Application Event
shall have occurred and be continuing, be applied in the manner set forth in
Section 2.4(b)(ii). 

    
2.5. Promise to Pay. Borrower agrees to
pay the Lender Group Expenses on the earlier of (a) the first day of the month
following the date on which the applicable Lender Group Expenses were first
incurred or (b) the date on which demand therefor is made by Agent (it being
acknowledged and agreed that any charging of such costs, expenses or Lender
Group Expenses to the Loan Account pursuant to the provisions of Section 2.6(d) shall be
deemed to constitute a demand for payment thereof for the purposes of this
subclause (b)). Borrower promises to pay all of the Revolving Loans and all of
the other Obligations (including principal, interest, premiums, if any, fees,
costs, and expenses (including Lender Group Expenses)) in full on the Maturity
Date or, if earlier, on the date on which the Obligations (other than the Bank
Product Obligations) become due and payable pursuant to the terms of this
Agreement. Borrower agrees that its obligations contained in the first sentence
of this Section 2.5 shall survive payment or satisfaction in full of all other Obligations.


    
2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations. 

         
(a) Interest Rates. Except as provided in
Section 2.6(c), all Obligations (except for undrawn Letters of Credit) that have been
charged to the Loan Account pursuant to the terms hereof shall bear interest as
follows: 

              
(i) if the
relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR
Rate plus the LIBOR Rate Margin, and 

              
(ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate
Margin. 

         
(b) Letter of Credit Fee. Borrower shall
pay Agent (for the ratable benefit of the Revolving Lenders), a Letter of Credit
fee (the "Letter of Credit Fee") (which fee shall be in addition to the fees, charges,
commissions, and costs set forth in Section 2.11(j)) that shall accrue at a per
annum rate equal to the LIBOR Rate Margin times the undrawn amount of all
outstanding Letters of Credit. 

         
(c) Default Rate. Upon the occurrence and
during the continuation of an Event of Default and at the election of Agent or
the Required Lenders, 

-16-







              
(i) all Revolving Loans and all other Obligations (except for
undrawn Letters of Credit) that have been charged to the Loan Account pursuant
to the terms hereof shall bear interest at a per annum rate equal to 2
percentage points above the per annum rate otherwise applicable thereunder, and


              
(ii) the
Letter of Credit Fee shall be increased to 2 percentage points above the per
annum rate otherwise applicable hereunder. 

         
(d) Payment. Except to the extent provided
to the contrary in Section 2.10 or Section 2.12(a), (i) all interest and all
fees (other than Letter of Credit Fees) payable hereunder or under any of the
other Loan Documents shall be due and payable, in arrears, on the first day of
each quarter, (ii) all Letter of Credit Fees shall be due and payable, in
arrears, on the first day of each month, and (iii) all costs and expenses
payable hereunder or under any of the other Loan Documents, and all Lender Group
Expenses shall be due and payable on the earlier of (x) the first day of the
month following the date on which the applicable costs, expenses, or Lender
Group Expenses were first incurred or (y) the date on which demand therefor is
made by Agent (it being acknowledged and agreed that any charging of such costs,
expenses or Lender Group Expenses to the Loan Account pursuant to the provisions
of the following sentence shall be deemed to constitute a demand for payment
thereof for the purposes of this subclause (y)). Borrower hereby authorizes
Agent, from time to time without prior notice to Borrower, to charge to the Loan
Account (A) on the first day of each quarter (or, if an Event of Default has
occurred and is continuing, on the first day of each month), all interest
accrued during the prior quarter (or if an Event of Default has occurred and is
continuing, month) on the Revolving Loans hereunder, (B) on the first day of
each month, all Letter of Credit Fees accrued or chargeable hereunder during the
prior month (or, if an Event of Default has occurred and is continuing, during
the prior month), (C) on the first day of each quarter (or, if an Event of
Default has occurred and is continuing, during the prior month), the Unused Line
Fee accrued during the prior quarter (or if an Event of Default has occurred and
is continuing, month) pursuant to Section 2.10(b), (D) as and when incurred or
accrued, all non-out-of-pocket audit, appraisal, valuation, or other charges or
fees payable hereunder pursuant to Section
2.10(c), (E) if Borrower does not pay any
such Lender Group Expenses within 5 Business Days of the date of Borrower's
receipt of written notice thereof, all out-of-pocket audit, appraisal,
valuation, or other charges or fees payable hereunder pursuant to
Section 2.10(c), (F) as and when due and payable, all other fees payable hereunder or
under any of the other Loan Documents, (G) as and when incurred or accrued, all
fees, charges, commissions, and costs provided for in Section 2.11(j), (H) as and when
incurred or accrued, all fees and costs provided for in Section 2.10
(a) or
(c), (I) if
Borrower does not pay any such other Lender Group Expenses within 5 Business
Days of the date of Borrower's receipt of written notice thereof, all other
Lender Group Expenses, and (J) as and when due and payable all other payment
obligations payable under any Loan Document or any Bank Product Agreement
(including any amounts due and payable to the Bank Product Providers in respect
of Bank Products); provided, that if such amounts are not paid and, instead, are charged
to the Loan Account, they shall be charged thereto as of the day on which the
item was first due and payable or incurred or accrued without regard to the
applicable delay and such amounts shall accrue interest from such original date;
provided further, that the applicable delays set forth in the foregoing clauses (E) and
(I) shall not be applicable (and Agent shall be entitled to immediately charge
to the Loan Account) at any time that an Event of Default has occurred and is
continuing. All amounts (including interest, fees, costs, expenses, Lender Group
Expenses, or other amounts payable hereunder or under any other
Loan Document or under any Bank Product Agreement) charged to the Loan Account
shall thereupon constitute Revolving Loans hereunder, shall constitute
Obligations hereunder, and shall initially accrue interest at the rate then
applicable to Revolving Loans that are Base Rate Loans (unless and until
converted into LIBOR Rate Loans in accordance with the terms of this Agreement).


-17- 







          (e) Computation. All fees chargeable under
the Loan Documents shall be computed on the basis of a 360 day year, in each
case, for the actual number of days elapsed in the period during which the fees
accrue. Interest shall be calculated on the basis of a 360 day year and actual
days elapsed, other than for Base Rate Loans which shall be calculated on the
basis of 365 or 366 day year, as applicable, and actual days elapsed. In the
event the Base Rate is changed from time to time hereafter, the rates of
interest hereunder based upon the Base Rate automatically and immediately shall
be increased or decreased by an amount equal to such change in the Base Rate.


         
(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this
Agreement, plus any other amounts paid in connection herewith, exceed the
highest rate permissible under any law that a court of competent jurisdiction
shall, in a final determination, deem applicable. Borrower and the Lender Group,
in executing and delivering this Agreement, intend legally to agree upon the
rate or rates of interest and manner of payment stated within it; provided,
that, anything contained herein to the contrary notwithstanding, if such rate or
rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto, as of the date of this Agreement, Borrower is
and shall be liable only for the payment of such maximum amount as is allowed by
law, and payment received from Borrower in excess of such legal maximum,
whenever received, shall be applied to reduce the principal balance of the
Obligations to the extent of such excess. 

    
2.7. Crediting Payments. The receipt of
any payment item by Agent shall not be required to be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to Agent's Account or unless and until such payment item is
honored when presented for payment. Should any payment item not be honored when
presented for payment, then Borrower shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into Agent's Account on a Business Day on or before
1:30 p.m. If any payment item is received into Agent's Account on a non-Business
Day or after 1:30 p.m. on a Business Day (unless Agent, in its sole discretion,
elects to credit it on the date received), it shall be deemed to have been
received by Agent as of the opening of business on the immediately following
Business Day. 

    
2.8. Designated Account. Agent is
authorized to make the Revolving Loans, and Issuing Lender is authorized to
issue the Letters of Credit, under this Agreement based upon telephonic or other
instructions received from anyone purporting to be an Authorized Person or,
without instructions, if pursuant to Section
2.6(d). Borrower agrees to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Revolving Loans requested by Borrower and made
by Agent or the Lenders hereunder. Unless otherwise agreed by Agent and
Borrower, any Revolving Loan or Swing Loan requested by Borrower and made by
Agent or the Lenders hereunder shall be made to the Designated
Account. 

-18-







     2.9. Maintenance of Loan Account; Statements of
Obligations. Agent shall maintain an
account on its books in the name of Borrower (the "Loan Account") on which Borrower will
be charged with all Revolving Loans (including Extraordinary Advances and Swing
Loans) made by Agent, Swing Lender, or the Lenders to Borrower or for Borrower's
account, the Letters of Credit issued or arranged by Issuing Lender for
Borrower's account, and with all other payment Obligations hereunder or under
the other Loan Documents, including, accrued interest, fees and expenses, and
Lender Group Expenses. In accordance with Section 2.7, the Loan Account will be credited
with all payments received by Agent from Borrower or for Borrower's account.
Agent shall make available to Borrower monthly statements regarding the Loan
Account, including the principal amount of the Revolving Loans, interest accrued
hereunder, fees accrued or charged hereunder or under the other Loan Documents,
and a summary itemization of all charges and expenses constituting Lender Group
Expenses accrued hereunder or under the other Loan Documents, and each such
statement, absent manifest error, shall be conclusively presumed to be correct
and accurate and constitute an account stated between Borrower and the Lender
Group unless, within 30 days after Agent first makes such a statement available
to Borrower, Borrower shall deliver to Agent written objection thereto
describing the error or errors contained in such statement. 

    
2.10. Fees. 

         
(a) Agent Fees. Borrower shall pay to
Agent, for the account of Agent, as and when due and payable under the terms of
the Fee Letter, the fees set forth in the Fee Letter. 

         
(b) Unused Line Fee. Borrower shall pay to
Agent, for the ratable account of the Revolving Lenders, on the first day of
each quarter (provided, that if an Event of Default has occurred and is continuing,
such amounts shall be due and payable, in arrears, on the first day of each
month), from and after the Closing Date up to the first day of the quarter
(provided,
that if an Event of Default has occurred and is continuing, such amounts shall
be due and payable, in arrears, on the first day of each month), prior to the
date on which the Obligations are paid in full and on the date on which the
Obligations are paid in full, an unused line fee (the "Unused Line Fee") in an amount equal to
0.375% per annum times the result of (i) the average amount of the aggregate
Revolver Commitments during the immediately preceding quarter (or if an Event of
Default has occurred and is continuing, month) (or portion thereof), less (ii)
the average amount of the Revolver Usage during the immediately preceding
quarter (or if an Event of Default has occurred and is continuing, month) (or
portion thereof). 

         
(c) Field Examination and Other Fees.
Borrower shall pay to Agent, field examination, appraisal, and valuation fees
and charges, as and when incurred or chargeable, as follows: (i) a fee of $1,000
per day, per examiner, plus reasonable and documented out-of-pocket expenses
(including travel, meals, and lodging), for each field examination of Borrower
performed by personnel employed by Agent, (ii) if implemented, a fee of $1,000
per day, per Person, plus reasonable and documented out-of-pocket expenses, for
the establishment of electronic collateral reporting and (iii) the reasonable
and documented fees or charges paid or incurred by Agent if it elects to employ
the services of one or more third Persons to perform field examinations of Borrower or its
Subsidiaries, to appraise the Collateral or any portion thereof, or to assess
Borrower's or its Subsidiaries' business valuation; provided, that (x) so long as no Event
of Default shall have occurred and be continuing and Average Liquidity for each
month (or, with respect to the month ended March 31, 2012, partial month) is not
less than (I) $20,000,000, for each month during the period commencing on the
Closing Date and ending on September 30, 2012, or (II) $25,000,000, for each
month during the period from and after October 1, 2012, Agent shall not conduct
any field examinations, appraisals or intellectual property valuations and (y)
if an Event of Default has occurred and is continuing or Average Liquidity for
any month (or, with respect to the month ended March 31, 2012, partial month) is
less than (I) $20,000,000, for any month during the period commencing on the
Closing Date and ending on September 30, 2012, or (II) $25,000,000, for any
month during the period from and after October 1, 2012, Borrower shall be
obligated to reimburse Agent for no more than 2 field examinations during any
calendar year, no more than 1 appraisal of each type of Collateral during any
calendar year, and no more than 1 intellectual property valuation during any
calendar year. Notwithstanding the foregoing, in any event, Agent, at its sole
expense, shall have the right to conduct 1 field examination and 1 appraisal of
each type of Collateral during any calendar year.

-19-







     2.11. Letters of Credit. 

         
(a) Subject
to the terms and conditions of this Agreement, upon the request of Borrower made
in accordance herewith, Issuing Lender agrees to issue, or to cause an
Underlying Issuer (including, as Issuing Lender's agent) to issue, a requested
Letter of Credit for the account of Borrower. If Issuing Lender, at its option,
elects to cause an Underlying Issuer to issue a requested Letter of Credit, then
Issuing Lender agrees that it will enter into arrangements relative to the
reimbursement of such Underlying Issuer (which may include, among other means,
by becoming an applicant with respect to such Letter of Credit or entering into
undertakings or other arrangements that provide for reimbursement of such
Underlying Issuer with respect to such drawings under Letter of Credit; each
such obligation or undertaking, irrespective of whether in writing, a
"Reimbursement Undertaking") with respect to Letters of Credit issued by such Underlying
Issuer for the account of Borrower. By submitting a request to Issuing Lender
for the issuance of a Letter of Credit, Borrower shall be deemed to have
requested that (i) Issuing Lender issue or (ii) an Underlying Issuer issue the
requested Letter of Credit (and, in such case, to have requested Issuing Lender
to issue a Reimbursement Undertaking with respect to such requested Letter of
Credit). Borrower acknowledges and agrees that Borrower is and shall be deemed
to be an applicant (within the meaning of Section 5-102(a)(2) of the Code) with
respect to each Underlying Letter of Credit. Each request for the issuance of a
Letter of Credit, or the amendment, renewal, or extension of any outstanding
Letter of Credit, shall be made in writing by an Authorized Person and delivered
to Issuing Lender via hand delivery, telefacsimile, or other electronic method
of transmission reasonably in advance of the requested date of issuance,
amendment, renewal, or extension. Each such request shall be in form and
substance reasonably satisfactory to Issuing Lender and (i) shall specify (A)
the amount of such Letter of Credit, (B) the date of issuance, amendment,
renewal, or extension of such Letter of Credit, (C) the proposed expiration date
of such Letter of Credit, (D) the name and address of the beneficiary of the
Letter of Credit, and (E) such other information (including, the conditions to
drawing, and, in the case of an amendment, renewal, or extension, identification
of the Letter of Credit to be so amended, renewed, or extended) as shall be
necessary to prepare, amend, renew, or extend such Letter of Credit, and (ii)
shall be accompanied by such Issuer Documents as Agent, Issuing Lender or
Underlying Issuer may request or require, to the extent that such requests or
requirements are consistent with the Issuer Documents that Issuing Lender or
Underlying Issuer generally requests for Letters of Credit in similar
circumstances. Anything contained herein to the contrary notwithstanding,
Issuing Lender may, but shall not be obligated to, issue or cause the issuance
of a Letter of Credit or to issue a Reimbursement Undertaking in respect of an
Underlying Letter of Credit, in either case, that supports the obligations of
Borrower or its Subsidiaries in respect of (A) a lease of real property to the
extent that the face amount of such Letter of Credit or the amount of such
Reimbursement Undertaking exceeds the highest rent (including all rent-like
charges) payable under such lease for a period of one year, or (B) an employment
contract. 

-20-









          (b) Issuing Lender shall have no obligation to issue a Letter of Credit or a
Reimbursement Undertaking in respect of an Underlying Letter of Credit, in
either case, if any of the following would result after giving effect to the
requested issuance: 

              
(i) the
Letter of Credit Usage would exceed $5,000,000, or 

              
(ii) the
Letter of Credit Usage would exceed the Maximum Revolver Amount less the
outstanding amount of Revolving Loans (including Swing Loans), or 

              
(iii) the
Letter of Credit Usage would exceed the Borrowing Base at such time (based upon
the most recent Borrowing Base Certificate delivered by Borrower to Agent) less
the outstanding principal balance of the Revolving Loans (inclusive of Swing
Loans) at such time. 

         
(c) In the
event there is a Defaulting Lender as of the date of any request for the
issuance of a Letter of Credit, the Issuing Lender shall not be required to
issue or arrange for such Letter of Credit to the extent (x) the Defaulting
Lender's Letter of Credit Exposure with respect to such Letter of Credit may not
be reallocated pursuant to Section
2.3(g)(ii) or (y) the Issuing Lender has not
otherwise entered into arrangements reasonably satisfactory to it and Borrower
to eliminate the Issuing Lender's risk with respect to the participation in such
Letter of Credit of the Defaulting Lender, which arrangements may include
Borrower cash collateralizing such Defaulting Lender's Letter of Credit Exposure
in accordance with Section
2.3(g)(ii). Additionally, Issuing Lender
shall have no obligation to issue a Letter of Credit or a Reimbursement
Undertaking in respect of an Underlying Letter of Credit, in either case, if (I)
any order, judgment, or decree of any Governmental Authority or arbitrator
shall, by its terms, purport to enjoin or restrain Issuing Lender from issuing
such Letter of Credit or Reimbursement Undertaking or Underlying Issuer from
issuing such Letter of Credit, or any law applicable to Issuing Lender or
Underlying Issuer or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over Issuing Lender or
Underlying Issuer shall prohibit or request that Issuing Lender or Underlying
Issuer refrain from the issuance of letters of credit generally or such Letter
of Credit or Reimbursement Undertaking (as applicable) in particular, or (II)
the issuance of such Letter of Credit would violate one or more policies of
Issuing Lender or Underlying Issuer applicable to letters of credit generally.


-21- 







          (d) Any Issuing Lender (other than Wells Fargo or any of its Affiliates)
shall notify Agent in writing no later than the Business Day immediately
following the Business Day on which such Issuing Lender issued any Letter of
Credit; provided that (y) until Agent advises any such Issuing Lender that the provisions
of Section 3.2 are not satisfied, or (z) the aggregate amount of the Letters of Credit
issued in any such week exceeds such amount as shall be agreed by Agent and such
Issuing Lender, such Issuing Lender shall be required to so notify Agent in
writing only once each week of the Letters of Credit issued by such Issuing
Lender during the immediately preceding week as well as the daily amounts
outstanding for the prior week, such notice to be furnished on such day of the
week as Agent and such Issuing Lender may agree. Borrower and the Lender Group
hereby acknowledge and agree that all Existing Letters of Credit shall
constitute Letters of Credit under this Agreement on and after the Closing Date
with the same effect as if such Existing Letters of Credit were issued by
Issuing Lender or an Underlying Issuer at the request of Borrower on the Closing
Date. Each Letter of Credit shall be in form and substance reasonably acceptable
to Issuing Lender, including the requirement that the amounts payable thereunder
must be payable in Dollars. If Issuing Lender makes a payment under a Letter of
Credit or an Underlying Issuer makes a payment under an Underlying Letter of
Credit, Borrower shall pay to Agent an amount equal to the applicable Letter of
Credit Disbursement on the date such Letter of Credit Disbursement is made and,
in the absence of such payment, the amount of the Letter of Credit Disbursement
immediately and automatically shall be deemed to be a Revolving Loan hereunder
(notwithstanding any failure to satisfy any condition precedent set forth in
Section 3)
and, initially, shall bear interest at the rate then applicable to Revolving
Loans that are Base Rate Loans. If a Letter of Credit Disbursement is deemed to
be a Revolving Loan hereunder, Borrower's obligation to pay the amount of such
Letter of Credit Disbursement to Issuing Lender shall be automatically converted
into an obligation to pay the resulting Revolving Loan. Promptly following
receipt by Agent of any payment from Borrower pursuant to this paragraph, Agent
shall distribute such payment to Issuing Lender or, to the extent that Lenders
have made payments pursuant to Section
2.11(b) to reimburse Issuing Lender, then to
such Lenders and Issuing Lender as their interests may appear. 





         
(e) Promptly following receipt of a notice of a Letter of Credit Disbursement
pursuant to Section 2.11(a), each Revolving Lender agrees to fund its Pro Rata Share of
any Revolving Loan deemed made pursuant to Section 2.11(a) on the same terms and
conditions as if Borrower had requested the amount thereof as a Revolving Loan
and Agent shall promptly pay to Issuing Lender the amounts so received by it
from the Lenders. By the issuance of a Letter of Credit or a Reimbursement
Undertaking (or an amendment, renewal, or extension of a Letter of Credit or a
Reimbursement Undertaking) and without any further action on the part of Issuing
Lender or the Revolving Lenders, Issuing Lender shall be deemed to have granted
to each Revolving Lender, and each Revolving Lender shall be deemed to have
purchased, a participation in each Letter of Credit issued by Issuing Lender and
each Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such
Letter of Credit or Reimbursement Undertaking, and each such Lender agrees to
pay to Agent, for the account of Issuing Lender, such Lender's Pro Rata Share of
any Letter of Credit Disbursement made by Issuing Lender or an Underlying Issuer
under the applicable Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to Agent, for the account of Issuing Lender, such Lender's Pro
Rata Share of each Letter of Credit Disbursement made by Issuing Lender or an
Underlying Issuer and not reimbursed by Borrower on the date due as provided in
Section 2.11(a), or of any reimbursement payment this is required to be refunded (or that Agent or
Issuing Lender elects, based upon the advice of counsel, to refund) to Borrower
for any reason. Each Revolving Lender acknowledges and agrees that its
obligation to deliver to Agent, for the account of Issuing Lender, an amount
equal to its respective Pro Rata Share of each Letter of Credit Disbursement
pursuant to this Section
2.11(b) shall be absolute and unconditional
and such remittance shall be made notwithstanding the occurrence or continuation
of an Event of Default or Default or the failure to satisfy any condition set
forth in Section 3. If any such Lender fails to make available to Agent the amount of such
Lender's Pro Rata Share of a Letter of Credit Disbursement as provided in this
Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for
the account of Issuing Lender) shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Defaulting Lender
Rate until paid in full. 





-22- 







         
(f) Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group and each Underlying Issuer harmless from any damage, loss, cost, expense,
or liability (other than Taxes, which shall be governed solely by
Section 16), and reasonable and documented attorneys' fees and expenses incurred by
Issuing Lender, any other member of the Lender Group, or any Underlying Issuer
arising out of or in connection with any Reimbursement Undertaking or any Letter
of Credit; provided, that Borrower shall not be obligated hereunder to indemnify
the Lender Group or any Underlying Issuer for any loss, cost, expense, or
liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of Issuing Lender, any
other member of the Lender Group, or any Underlying Issuer. Borrower agrees to
be bound by the Underlying Issuer's regulations and interpretations of any
Letter of Credit or by Issuing Lender's interpretations of any Reimbursement
Undertaking even though this interpretation may be different from Borrower's
own. Borrower understands that the Reimbursement Undertakings may require
Issuing Lender to indemnify the Underlying Issuer for certain costs or
liabilities arising out of claims by Borrower against such Underlying Issuer.
Borrower hereby agrees to indemnify, save, defend, and hold Issuing Lender and
the other members of the Lender Group harmless with respect to any loss, cost,
expense (including reasonable and documented attorneys' fees and expenses), or
liability (other than Taxes, which shall be governed solely by Section 16) incurred by
them as a result of Issuing Lender's indemnification of an Underlying Issuer;
provided, that Borrower shall not be obligated hereunder to indemnify for any
such loss, cost, expense, or liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of Issuing Lender or any other member of the Lender Group.











-23- 








         
(g) Each
Lender and Borrower agree that, in paying any drawing under a Letter of Credit,
neither Issuing Lender nor any Underlying Issuer (as applicable) shall have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit or the Underlying
Letter of Credit (as applicable)) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document. None of Issuing Lender, any Underlying Issuer,
Agent, any of the Lender-Related Persons or Agent-Related Persons, nor any
correspondent, participant or assignee of Issuing Lender shall be liable to any
Lender or any Loan Party for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or the Required
Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; (iii) any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit or any error in interpretation of
technical terms; or (iv) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. Borrower hereby assumes all risks of
the acts or omissions of any beneficiary or transferee with respect to its use
of any Letter of Credit; provided, that this assumption is not intended to, and
shall not, preclude Borrower from pursuing such rights and remedies as it may
have against the beneficiary or transferee at law or under any other agreement.
None of Issuing Lender, any Underlying Issuer, Agent, any of the Lender-Related
Persons or Agent-Related Persons, nor any correspondent, participant or assignee
of Issuing Lender or any Underlying Issuer shall be liable or responsible for
any of the matters described in clauses (i) through (vi) of Section 2.11(h) or for any
action, neglect or omission under or in connection with any Letter of Credit or
Issuer Document, including in connection with the issuance or any amendment of
any Letter of Credit, the failure to issue or amend any Letter of Credit, the
honoring or dishonoring of any demand under any Letter of Credit, or the
following of Borrower's instructions or those contained in the Letter of Credit
or any modifications, amendments, or supplements thereto, and such action or
neglect or omission will bind Borrower. In furtherance and not in limitation of
the foregoing, Issuing Lender and each Underlying Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary (or
Issuing Lender and any Underlying Issuer may refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit and may disregard any requirement in a Letter of
Credit that notice of dishonor be given in a particular manner and any
requirement that presentation be made at a particular place or by a particular
time of day), and neither Issuing Lender nor any Underlying Issuer shall be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason. Neither Issuing Lender nor any
Underlying Issuer shall be responsible for the wording of any Letter of Credit
(including any drawing conditions or any terms or conditions that are
ineffective, ambiguous, inconsistent, unduly complicated or reasonably
impossible to satisfy), notwithstanding any assistance Issuing Lender or any
Underlying Issuer may provide to Borrower with drafting or recommending text for
any letter of credit application or with the structuring of any transaction
related to any Letter of Credit, and Borrower hereby acknowledges and agrees
that any such assistance will not constitute legal or other advice by Issuing
Lender or any Underlying Issuer or any representation or warranty by Issuing
Lender or any Underlying Issuer that any such wording or such Letter of Credit
will be effective. Without limiting the foregoing, Issuing Lender or any
Underlying Issuer may, as it deems appropriate, use in any Letter of Credit any
portion of the language prepared by Borrower and contained in the letter of
credit application relative to drawings under such Letter of Credit. Borrower
hereby acknowledges and agrees that neither any Underlying Issuer nor any member
of the Lender Group shall be responsible for delays, errors, or omissions
resulting from the malfunction of equipment in connection with any Letter of
Credit. 








-24- 







         
(h) The obligation of Borrower to reimburse Issuing Lender for each drawing
under each Letter of Credit shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including the following: 

              
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other Loan Document, 

              
(ii) the
existence of any claim, counterclaim, setoff, defense or other right that
Borrower or any of its Subsidiaries may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), Issuing Lender or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction, 

              
(iii) any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect, or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit, 

              
(iv) any
payment by Issuing Lender under such Letter of Credit against presentation of a
draft or certificate that does not substantially or strictly comply with the
terms of such Letter of Credit (including, without limitation, any requirement
that presentation be made at a particular place or by a particular time of day),
or any payment made by Issuing Lender under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of Credit,


              
(v) any
other circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or discharge of, Borrower or any of its Subsidiaries, or


              
(vi) the
fact that any Default or Event of Default shall have occurred and be continuing.


         
(i) Borrower hereby authorizes and directs any Underlying Issuer to deliver
to Issuing Lender all instruments, documents, and other writings and property
received by such Underlying Issuer pursuant to such Underlying Letter of Credit
and to accept and rely upon Issuing Lender's instructions with respect to all
matters arising in connection with such Underlying Letter of Credit and the
related application. 

-25- 







         
(j)
Borrower acknowledges and agrees that any and all
fees, charges, costs, or commissions in effect from time to time, of Issuing
Lender relating to Letters of Credit or incurred by Issuing Lender relating to
Underlying Letters of Credit, upon the issuance of any Letter of Credit, upon
the payment or negotiation of any drawing under any Letter of Credit, or upon
the occurrence of any other activity with respect to any Letter of Credit
(including the transfer, amendment, or cancellation of any Letter of Credit),
together with any and all fronting fees in effect from time to time related to
Letters of Credit, shall be Lender Group Expenses for purposes of this Agreement
and shall be reimbursable promptly, but in any event, within 1 Business Day
after the date on which such fees, charges, costs, or commissions are first
incurred or accrued, by Borrower to Agent for the account of Issuing Lender; it
being acknowledged and agreed by Borrower that, as of the Closing Date,
Issuing Lender is entitled to charge Borrower a fronting fee of 0.250% per annum
times the undrawn amount of each Underlying Letter of Credit and that such
fronting fee may be changed by Issuing Lender in its Permitted Discretion from
time to time without notice to the extent such change is generally applied by
Issuing Lender to similarly situated borrowers. 

          (k) If by reason of (i) any change
after the Closing Date in any applicable law, treaty, rule, or regulation or any
change in the interpretation or application thereof by any Governmental
Authority, or (ii) compliance by Issuing Lender, any other member of the Lender
Group, or Underlying Issuer with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Board of Governors as from
time to time in effect (and any successor thereto): 

              
(i) any
reserve, deposit, or similar requirement is or shall be imposed or modified in
respect of any Letter of Credit issued or caused to be issued hereunder or
hereby, or

              
(ii) there
shall be imposed on Issuing Lender, any other member of the Lender Group, or
Underlying Issuer any other condition regarding any Letter of Credit or
Reimbursement Undertaking, and the result of the foregoing is to increase, directly or indirectly,
the cost to Issuing Lender, any other member of the Lender Group, or an
Underlying Issuer of issuing, making, participating in, or maintaining any
Reimbursement Undertaking or Letter of Credit or to reduce the amount receivable
in respect thereof, then, and in any such case, Agent may, at any time within a
reasonable period after the additional cost is incurred or the amount received
is reduced, notify Borrower, and Borrower shall pay within 30 days after demand
therefor, such amounts as Agent may specify to be necessary to compensate
Issuing Lender, any other member of the Lender Group, or an Underlying Issuer
for such additional cost or reduced receipt, together with interest on such
amount from the date of such demand until payment in full thereof at the rate
then applicable to Base Rate Loans hereunder; provided, that (A) Borrower shall not
be required to provide any compensation pursuant to this Section 2.11(k) for any
such amounts incurred more than 180 days prior to the date on which the demand
for payment of such amounts is first made to Borrower, and (B) if an event or
circumstance giving rise to such amounts is retroactive, then the 180-day period
referred to above shall be extended to include the period of retroactive effect
thereof. The determination by Agent of any amount due pursuant to this
Section 2.11(k), as set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error, be
final and conclusive and binding on all of the parties hereto. 

          (l) Unless otherwise expressly
agreed by Issuing Lender and Borrower when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of Credit), (i)
the rules of the ISP and the UCP 600 shall apply to each standby Letter of
Credit, and (ii) the rules of the UCP 600 shall apply to each commercial Letter
of Credit. 

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          (m) In the event of a direct conflict between the provisions of this
Section 2.11 and any provision contained in any Issuer Document, it is the intention
of the parties hereto that such provisions be read together and construed, to
the fullest extent possible, to be in concert with each other. In the event of
any actual, irreconcilable conflict that cannot be resolved as aforesaid, the
terms and provisions of this Section
2.11 shall control and govern. 

    
2.12. LIBOR Option. 

         
(a) Interest and Interest Payment Dates.
In lieu of having interest charged at the rate based upon the Base Rate,
Borrower shall have the option, subject to Section 2.12(b) below (the
"LIBOR Option") to have interest on all or a portion of the Revolving Loans be charged
(whether at the time when made (unless otherwise provided herein), upon
conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a
LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR
Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the
last day of the Interest Period applicable thereto; provided, that, subject to the
following clauses (ii) and (iii), in the case of any Interest Period greater
than 3 months in duration, interest shall be payable at 3 month intervals after
the commencement of the applicable Interest Period and on the last day of such
Interest Period), (ii) the date on which all or any portion of the Obligations
are accelerated pursuant to the terms hereof, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Borrower properly has exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, unless otherwise agreed to by the Required Lenders,
Borrower no longer shall have the option to request that Revolving Loans bear
interest at a rate based upon the LIBOR Rate. 

         
(b) LIBOR Election. 

              
(i) Borrower may, at any time and from time to time, so long as Borrower has
not received a notice from Agent, after the occurrence and during the
continuance of an Event of Default, to terminate the right of Borrower to
exercise the LIBOR Option during the continuance of such Event of Default, elect
to exercise the LIBOR Option by notifying Agent prior to 11:00 a.m. at least 3
Business Days prior to the commencement of the proposed Interest Period (the
"LIBOR Deadline"). Notice of Borrower's election of the LIBOR Option for a permitted
portion of the Revolving Loans and an Interest Period pursuant to this Section
shall be made by delivery to Agent of a LIBOR Notice received by Agent before
the LIBOR Deadline, or by telephonic notice received by Agent before the LIBOR
Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received by
Agent prior to 5:00 p.m. on the same day). Promptly upon its receipt of each
such LIBOR Notice, Agent shall provide a copy thereof to each of the affected
Lenders. 






-27- 










              
(ii) Each
LIBOR Notice shall be irrevocable and binding on Borrower. In connection with
each LIBOR Rate Loan, Borrower shall indemnify, defend, and hold Agent and the
Lenders harmless against any loss, cost, or expense actually incurred by Agent
or any Lender as a result of (A) the payment of any principal of any LIBOR Rate
Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (B) the conversion of any LIBOR Rate
Loan other than on the last day of the Interest Period applicable thereto, or
(C) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on
the date specified in any LIBOR Notice delivered pursuant hereto (such losses,
costs, or expenses, "Funding
Losses"). A certificate of Agent or a Lender
delivered to Borrower setting forth in reasonable detail any amount or amounts
that Agent or such Lender is entitled to receive pursuant to this
Section 2.12 shall be conclusive absent manifest error. Borrower shall pay such
amount to Agent or the Lender, as applicable, within 30 days of the date of its
receipt of such certificate. If a payment of a LIBOR Rate Loan on a day other
than the last day of the applicable Interest Period would result in a Funding
Loss, Agent may, in its sole discretion at the request of Borrower, hold the
amount of such payment as cash collateral in support of the Obligations until
the last day of such Interest Period and apply such amounts to the payment of
the applicable LIBOR Rate Loan on such last day, it being agreed that Agent has
no obligation to so defer the application of payments to any LIBOR Rate Loan and
that, in the event that Agent does not defer such application, Borrower shall be
obligated to pay any resulting Funding Losses. 

              
(iii) Unless Agent, in its sole discretion, agrees otherwise,
Borrower shall have not more than 8 LIBOR Rate Loans in effect at any given
time. Borrower only may exercise the LIBOR Option for proposed LIBOR Rate Loans
of at least $1,000,000. 

         
(c) Conversion. Borrower may convert LIBOR
Rate Loans to Base Rate Loans at any time; provided, that in the event that
LIBOR Rate Loans are converted or prepaid on any date that is not the last day
of the Interest Period applicable thereto, including as a result of any
prepayment through the required application by Agent of any payments or proceeds
of Collateral in accordance with Section
2.4(b) or for any other reason, including
early termination of the term of this Agreement or acceleration of all or any
portion of the Obligations pursuant to the terms hereof, Borrower shall
indemnify, defend, and hold Agent and the Lenders and their Participants
harmless against any and all Funding Losses in accordance with Section 2.12 (b)(ii).


         
(d) Special Provisions Applicable to LIBOR Rate. 

              
(i) The
LIBOR Rate may be adjusted by Agent with respect to any Lender on a prospective
basis to take into account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased costs, in each
case, due to changes in applicable law (other than changes in laws relative to
Taxes, which shall be governed solely by Section 16) occurring subsequent to
the commencement of the then applicable Interest Period, including changes in
the reserve requirements imposed by the Board of Governors, which additional or
increased costs would increase the cost of funding or maintaining loans bearing
interest at the LIBOR Rate. In any such event, the affected Lender shall give
Borrower and Agent notice of such a determination and adjustment and Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, Borrower may, by notice to such affected
Lender (A) require such Lender to furnish to Borrower a statement setting forth
in reasonable detail the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans of
such Lender with respect to which such adjustment is made (together with any
amounts due under Section
2.12(b)(ii)). 

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(ii) In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation
or application thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and Borrower and
Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender's notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrower shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so. 

         
(e) No
Requirement of Matched Funding. Anything to
the contrary contained herein notwithstanding, neither Agent, nor any Lender,
nor any of their Participants, is required actually to acquire eurodollar
deposits to fund or otherwise match fund any Obligation as to which interest
accrues at the LIBOR Rate. 

    
2.13. Capital Requirements. 

         
(a) If,
after the date hereof, any Lender determines that (i) the adoption of or change
in any law, rule, regulation or guideline regarding capital or reserve
requirements for banks or bank holding companies, or any change in the
interpretation, implementation, or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender's or
such holding company's capital as a consequence of such Lender's Revolver
Commitments hereunder to a level below that which such Lender or such holding
company could have achieved but for such adoption, change, or compliance (taking
into consideration such Lender's or such holding company's then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by such Lender to be material, then
such Lender may notify Borrower and Agent thereof. Following receipt of such
notice, Borrower agrees to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 30 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods. Failure or
delay on the part of any Lender to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender's right to demand such
compensation; provided that Borrower shall not be required to compensate a
Lender pursuant to this Section for any reductions in return incurred more than
180 days prior to the date that such Lender notifies Borrower of such law, rule,
regulation or guideline giving rise to such reductions and of such Lender's
intention to claim compensation therefor; provided further that if such claim
arises by reason of the adoption of or change in any law, rule, regulation or
guideline that is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof. 

-29- 











          (b)
If any Lender requests additional or
increased costs referred to in Section 2.11(k) or Section
2.12(d)(i) or amounts under
Section 2.13(a) or sends a notice under Section
2.12(d)(ii) relative to changed circumstances (any such
Lender, an "Affected Lender"), then such Affected Lender shall use
reasonable efforts to promptly designate a different one of its lending offices
or to assign its rights and obligations hereunder to another of its offices or
branches, if (i) in the reasonable judgment of such Affected Lender, such
designation or assignment would eliminate or reduce amounts payable pursuant to
Section 2.11(k), Section 2.12(d)(i) or Section
2.13(a), as applicable, or would eliminate the illegality
or impracticality of funding or maintaining LIBOR Rate Loans and (ii) in the
reasonable judgment of such Affected Lender, such designation or assignment
would not subject it to any material unreimbursed cost or expense and would not
otherwise be materially disadvantageous to it. Borrower agrees to pay all
reasonable out-of-pocket costs and expenses incurred by such Affected Lender in
connection with any such designation or assignment. If, after such reasonable
efforts, such Affected Lender does not so designate a different one of its
lending offices or assign its rights to another of its offices or branches so as
to eliminate Borrower's obligation to pay any future amounts to such Affected
Lender pursuant to Section
2.11(k), Section 2.12(d)(i) or Section 2.13(a), as applicable, or to
enable Borrower to obtain LIBOR Rate Loans, then Borrower (without prejudice to
any amounts then due to such Affected Lender under Section 2.11(k), Section 2.12(d)(i) or
Section 2.13(a), as applicable)
may, unless prior to the effective date of any such assignment the Affected
Lender withdraws its request for such additional amounts under Section 2.11(k), Section 2.12(d)(i) or
Section 2.13(a), as applicable, or indicates that it is no longer
unlawful or impractical to fund or maintain LIBOR Rate Loans, may seek a
substitute Lender reasonably acceptable to Agent to purchase the Obligations
owed to such Affected Lender and such Affected Lender's Revolver Commitments
hereunder (a "Replacement Lender"), and if such Replacement Lender agrees
to such purchase, such Affected Lender shall assign to the Replacement Lender
its Obligations and Revolver Commitments, pursuant to an Assignment and
Acceptance Agreement, and upon such purchase by the Replacement Lender, such
Replacement Lender shall be deemed to be a "Lender" for purposes of this
Agreement and such Affected Lender shall cease to be a "Lender" for purposes of
this Agreement. 




         
(c) Notwithstanding anything herein to the contrary, the issuance of any
rules, regulations or directions under the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith after the date of this Agreement
shall be deemed to be a change in law, rule, regulation or guideline for
purposes of Sections 2.12 and 2.13 and the protection of Sections 2.12 and 2.13 shall be available to
each Lender and Issuing Lender regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed, so long as it
shall be customary for lenders or issuing banks affected thereby to comply
therewith. Notwithstanding any other provision herein, no Lender or Issuing
Lender shall demand compensation pursuant to this Section 2.13 if it shall not at the
time be the general policy or practice of such Lender or Issuing Lender (as the
case may be) to demand such compensation in similar circumstances under
comparable provisions of other credit agreements, if any. 

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3.
CONDITIONS; TERM OF AGREEMENT. 

     3.1. Conditions Precedent to the Initial Extension of
Credit. The obligation of each Lender to
make the initial extensions of credit provided for hereunder is subject to the
fulfillment, to the satisfaction of Agent and each Lender, of each of the
conditions precedent set forth on Schedule
3.1 (the making of such initial extensions of
credit by a Lender being conclusively deemed to be its satisfaction or waiver of
the conditions precedent). 

    
3.2. Conditions Precedent to all Extensions of Credit. The obligation of the Lender Group (or any member thereof)
to make any Revolving Loans hereunder (or to extend any other credit hereunder)
at any time shall be subject to the following conditions precedent: 

         
(a) the
representations and warranties of Borrower or its Subsidiaries contained in this
Agreement or in the other Loan Documents shall be true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) on and as of the date of such
extension of credit, as though made on and as of such date (except to the extent
that such representations and warranties relate solely to an earlier date, in
which case such representations and warranties shall be true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) as of such earlier date); and


         
(b) no
Default or Event of Default shall have occurred and be continuing on the date of
such extension of credit, nor shall either result from the making thereof.


    
3.3. Maturity. This Agreement shall
continue in full force and effect for a term ending on the Maturity Date.


    
3.4. Effect of Maturity. On the
Maturity Date, all commitments of the Lender Group to provide additional credit
hereunder shall automatically be terminated and all of the Obligations
immediately shall become due and payable without notice or demand and Borrower
shall be required to repay all of the Obligations in full. No termination of the
obligations of the Lender Group (other than payment in full of the Obligations
and termination of the Revolver Commitments) shall relieve or discharge any Loan
Party of its duties, obligations, or covenants hereunder or under any other Loan
Document and Agent's Liens in the Collateral shall continue to secure the
Obligations and shall remain in effect until all Obligations have been paid in
full and the Revolver Commitments have been terminated. When all of the
Obligations have been paid in full and the Lender Group's obligations to provide
additional credit under the Loan Documents have been terminated irrevocably,
Agent will, at Borrower's sole expense, execute and deliver any termination
statements, lien releases, discharges of security interests, and other similar
discharge or release documents (and, if applicable, in recordable form) as are
reasonably necessary to release, as of record, Agent's Liens and all notices of
security interests and liens previously filed by Agent. 





-31- 








     3.5. Early Termination by Borrower.
Borrower has the option, at any time upon 5 Business Days prior written notice
to Agent, to terminate this Agreement and terminate the Revolver Commitments hereunder by
repaying to Agent all of the Obligations in full. The foregoing notwithstanding,
(a) Borrower may rescind termination notices relative to proposed payments in
full of the Obligations with the proceeds of third party Indebtedness if the
closing for such issuance or incurrence does not happen on or before the date of
the proposed termination (in which case, a new notice shall be required to be
sent in connection with any subsequent termination), and (b) Borrower may extend
the date of termination at any time with the consent of Agent (which consent
shall not be unreasonably withheld or delayed). 

     3.6. Conditions Subsequent. The
obligation of the Lender Group (or any member thereof) to continue to make
Revolving Loans (or otherwise extend credit hereunder) is subject to the
fulfillment, on or before the date applicable thereto, of the conditions
subsequent set forth on Schedule
3.6 (the failure by Borrower to so perform or
cause to be performed such conditions subsequent as and when required by the
terms thereof (unless such date is extended, in writing, by Agent, which Agent
may do without obtaining the consent of the other members of the Lender Group),
shall constitute an Event of Default). 

4.
REPRESENTATIONS AND WARRANTIES.


          In order to
induce the Lender Group to enter into this Agreement, Borrower makes the
following representations and warranties to the Lender Group which shall be
true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date, and shall be true, correct, and complete, in
all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the date of the making of
each Revolving Loan (or other extension of credit) made thereafter, as though
made on and as of the date of such Revolving Loan (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date, in which case such representations and warranties shall be true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) as of such earlier
date) and such representations and warranties shall survive the execution and
delivery of this Agreement: 

    
4.1. Due Organization and Qualification; Subsidiaries. 

         
(a) Each
Loan Party (i) is duly organized and existing and in good standing under the
laws of the jurisdiction of its organization, (ii) is qualified to do business
in any state where the failure to be so qualified could reasonably be expected
to result in a Material Adverse Effect, and (iii) has all requisite power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated thereby.


         
(b) Set
forth on Schedule 4.1(b) (as such Schedule may be updated from time to time to reflect
changes resulting from transactions permitted under this Agreement) is a
complete and accurate description of the authorized Equity Interest of Borrower,
by class, and, as of the Closing Date, a description of the number of shares of
each such class that are issued and outstanding. Other than as described on
Schedule 4.1(b), as of the Closing Date, there are no subscriptions, options, warrants,
or calls relating to any shares of Borrower's Equity Interest, including any
right of conversion or exchange under any outstanding security or other
instrument. Other than in connection with the conversion of the Convertible
Subordinated Debt into Qualified Equity Interests or a mandatory repurchase
obligation arising as a result of a change of control, in each case, pursuant to
and in accordance with the terms of the Convertible Subordinated Debt Documents,
Borrower is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its Equity Interest or
any security convertible into or exchangeable for any of its Equity Interest.


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          (c) Set forth on Schedule
4.1(c) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement), is a complete and accurate list of the Loan Parties' direct and
indirect Subsidiaries, showing: (i) the number of shares of each class of common
and preferred Equity Interests authorized for each of such Subsidiaries, and
(ii) the number and the percentage of the outstanding shares of each such class
owned directly or indirectly by Borrower. All of the outstanding Equity Interest
of each such Subsidiary has been validly issued and is fully paid and
non-assessable. 

         
(d) Except
as set forth on Schedule
4.1(c) (as such Schedule may be updated from
time to time to reflect changes resulting from transactions permitted under this
Agreement),
there are no subscriptions, options, warrants, or calls relating to any shares
of Equity Interests of any Subsidiary of Borrower, including any right of
conversion or exchange under any outstanding security or other instrument.


    
4.2. Due Authorization; No Conflict.


         
(a) As to
each Loan Party, the execution, delivery, and performance by such Loan Party of
the Loan Documents to which it is a party have been duly authorized by all
necessary action on the part of such Loan Party. 

          (b) As to each Loan Party, the execution, delivery, and performance by such
Loan Party of the Loan Documents to which it is a party do not and will not (i)
violate any material provision of federal, state, or local law or regulation
applicable to any Loan Party or its Subsidiaries, the Governing Documents of any
Loan Party or its Subsidiaries, or any order, judgment, or decree of any court
or other Governmental Authority binding on any Loan Party or its Subsidiaries,
(ii) conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any material agreement of any Loan Party
or its Subsidiaries where any such conflict, breach or default could
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect, (iii) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any assets of any Loan Party, other than
Permitted Liens, or (iv) require any approval of any holder of Equity Interest
of a Loan Party or any approval or consent of any Person under any material
agreement of any Loan Party, other than consents or approvals that have been
obtained and that are still in force and effect and except, in the case of
material agreements, for consents or approvals, the failure to obtain could not
individually or in the aggregate reasonably be expected to cause a Material
Adverse Effect. 

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     4.3. Governmental Consents. The
execution, delivery, and performance by each Loan Party of the Loan Documents to
which such Loan Party is a party and the consummation of the transactions
contemplated by the Loan Documents do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by, any
Governmental Authority, other than registrations, consents, approvals, notices,
or other actions that have been obtained and that are still in force and effect
and except for filings and recordings with respect to the Collateral to be made,
or otherwise delivered to Agent for filing or recordation, as of the Closing
Date. 

    
4.4. Binding Obligations; Perfected Liens. 

         
(a) Each
Loan Document has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors' rights generally. 

         
(b) Agent's
Liens are validly created, perfected (other than (i) in respect of motor
vehicles that are subject to a certificate of title, (ii) money, (iii)
letter-of-credit rights (other than supporting obligations, (iv) commercial tort
claims (other than those that, by the terms of a Guaranty and Security
Agreement, are required to be perfected), (v) any Deposit Accounts and
Securities Accounts not subject to a Control Agreement as permitted by
Section 6.9(b), and (vi) as expressly
permitted not to be perfected pursuant to Section 6 of the Security Agreement
(or corresponding section of any other Guaranty and Security Agreement), and
subject only to the filing of financing statements and the recordation of the
Mortgages, in each case, in the appropriate filing offices), and first priority
Liens, subject only to Permitted Liens which are non-consensual Permitted Liens,
permitted purchase money Liens, or the interests of lessors under Capital
Leases. 

    
4.5. Title to Assets; No Encumbrances.
Each of the Loan Parties and its Subsidiaries has (a) good, marketable and legal
title to (in the case of fee interests in Real Property), (b) valid leasehold
interests in (in the case of leasehold interests in real or personal property),
and (c) good and marketable title to (in the case of all other personal
property), all of their respective assets reflected in their most recent
financial statements delivered pursuant to Section 5.1, in each case except for
assets disposed of since the date of such financial statements to the extent
permitted hereby and except for de minimis defects in title to property that do
not interfere with such Person's ability to conduct its business as currently
conducted. All of such assets are free and clear of Liens except for Permitted
Liens. 

    
4.6. Litigation. 

              
(a) There
are no actions, suits, or proceedings pending or, to the knowledge of Borrower,
threatened in writing against a Loan Party or any of its Subsidiaries that
either individually or in the aggregate could reasonably be expected to result
in a Material Adverse Effect. 

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(b) Schedule 4.6(b) sets forth a complete
and accurate description, with respect to each of the actions, suits, or
proceedings with asserted liabilities in excess of, or that could reasonably be
expected to result in liabilities in excess of, $2,500,000 that, as of the
Closing Date, is pending or, to the knowledge of Borrower, threatened against a
Loan Party or any of its Subsidiaries, of (i) the parties to such actions,
suits, or proceedings, (ii) the nature of the dispute that is the subject of
such actions, suits, or proceedings, (iii) the procedural status, as of the
Closing Date, with respect to such actions, suits, or proceedings, and (iv)
whether any liability of the Loan Parties' and their Subsidiaries in connection
with such actions, suits, or proceedings is covered by insurance. 

    
4.7. Compliance with Laws. No Loan
Party nor any of its Subsidiaries (a) is in violation of any applicable laws,
rules, regulations, executive orders, or codes (including Environmental Laws)
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect, or (b) is subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. 

    
4.8. No Material Adverse Effect. All
historical financial statements relating to the Loan Parties and their
Subsidiaries that have been delivered by Borrower to Agent have been prepared in
accordance with GAAP (except, in the case of unaudited financial statements, for
the lack of footnotes and being subject to quarter-end and year-end adjustments)
and present fairly in all material respects, the Loan Parties' and their
Subsidiaries' consolidated financial condition as of the date thereof and
results of operations for the period then ended. Since March 31, 2011, no event,
circumstance, or change has occurred that has or could reasonably be expected to
result in a Material Adverse Effect with respect to the Loan Parties and their
Subsidiaries. 

    
4.9. Solvency. 

         
(a) The
Loan Parties, taken as a whole, are Solvent. 

         
(b) No
transfer of property is being made by any Loan Party and no obligation is being
incurred by any Loan Party in connection with the transactions contemplated by
this Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of such Loan Party. 

    
4.10. Employee Benefits. No Loan Party,
none of their Domestic Subsidiaries, nor any of their ERISA Affiliates maintains
or contributes to any Benefit Plan. 

    
4.11. Environmental Condition. Except as
set forth on Schedule 4.11, (a) to Borrower's knowledge, no Loan Party's nor any of its
Subsidiaries' properties or assets has ever been used by a Loan Party, its
Subsidiaries, or by previous owners or operators in the disposal of, or to
produce, store, handle, treat, release, or transport, any Hazardous Materials,
where such disposal, production, storage, handling, treatment, release or
transport was in violation, in any material respect, of any applicable
Environmental Law, (b) to Borrower's knowledge, no Loan Party's nor any of its
Subsidiaries' properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) no Loan Party nor any of its Subsidiaries has received notice
that a Lien arising under any Environmental Law has attached to any revenues or
to any Real Property owned or operated by a Loan Party or its Subsidiaries, and
(d) no Loan Party nor any of its Subsidiaries nor any of their respective
facilities or operations is subject to any outstanding written order, consent
decree, or settlement agreement with any Person relating to any Environmental
Law or Environmental Liability that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

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4.12. Complete Disclosure. All factual
information taken as a whole (other than forward-looking information and
projections and information of a general economic nature and general information
about Borrower's industry) furnished by or on behalf of a Loan Party or its
Subsidiaries in writing to Agent or any Lender (including all information
contained in the Schedules hereto or in the other Loan Documents) for purposes
of or in connection with this Agreement or the other Loan Documents, and all
other such factual information taken as a whole (other than forward-looking
information and projections and information of a general economic nature and
general information about Borrower's industry) hereafter furnished by or on
behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender
will be, true and accurate, in all material respects, on the date as of which
such information is dated or certified and not incomplete by omitting to state
any fact necessary to make such information (taken as a whole) not misleading in
any material respect at such time in light of the circumstances under which such
information was provided. The Projections delivered to Agent on February 2, 2012
represent, and as of the date on which any other Projections are delivered to
Agent, such additional Projections represent, Borrower's good faith estimate, on
the date such Projections are delivered, of the Loan Parties' and their
Subsidiaries' future performance for the periods covered thereby based upon
assumptions believed by Borrower to be reasonable at the time of the delivery
thereof to Agent (it being understood that such Projections are subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Loan Parties and their Subsidiaries, and no assurances can be
given that such Projections will be realized, and although reflecting Borrower's
good faith estimate, projections or forecasts based on methods and assumptions
which Borrower believed to be reasonable at the time such Projections were
prepared, are not to be viewed as facts, and that actual results during the
period or periods covered by the Projections may differ materially from
projected or estimated results). 

    
4.13. Patriot Act. To the extent
applicable, each Loan Party is in compliance, in all material respects, with the
(a) Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (b) Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act
of 2001) (the "Patriot Act"). No part of the proceeds of the loans made hereunder will
be used by any Loan Party or any of their Affiliates, directly or indirectly,
for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business or
obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended. 

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4.14. Indebtedness. Set forth on
Schedule 4.14 is a true and complete list of all Indebtedness of each Loan Party and
each of its Subsidiaries outstanding immediately prior to the Closing Date that
is to remain outstanding immediately after giving effect to the closing
hereunder on the Closing Date and such Schedule accurately sets forth the
aggregate principal amount of such Indebtedness as of the Closing Date.


    
4.15. Payment of Taxes. Except as set
forth on Schedule 4.15 and except as otherwise permitted under Section 5.5, all federal
income tax returns and reports and, other than those returns and reports that
are the subject of a protest instituted promptly and prosecuted diligently by a
Loan Party or its Subsidiary, as applicable, in good faith, all other tax
returns and reports in excess of $1,000,000 in the aggregate, of each Loan Party
and its Subsidiaries required to be filed by any of them have been timely filed,
and all such taxes shown on such tax returns to be due and payable and all
assessments, fees and other governmental charges upon a Loan Party and its
Subsidiaries and upon their respective assets, income, businesses and franchises
that are due and payable have been paid when due and payable. Each Loan Party
and each of its Subsidiaries have made adequate provision in accordance with
GAAP for all taxes not yet due and payable. Borrower knows of no proposed tax
assessment against a Loan Party or any of its Subsidiaries that is not being
actively contested by such Loan Party or such Subsidiary diligently, in good
faith, and by appropriate proceedings; provided such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor. 

    
4.16. Margin Stock. No Loan Party nor
any of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock. No part of the proceeds of the loans made to Borrower
will be used to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock or for any purpose
that violates the provisions of Regulation T, U or X of the Board of Governors.


    
4.17. Governmental Regulation. No Loan
Party nor any of its Subsidiaries is subject to regulation under the Federal
Power Act or the Investment Company Act of 1940 or under any other federal or
state statute or regulation which may limit its ability to incur Indebtedness or
which may otherwise render all or any portion of the Obligations unenforceable.
No Loan Party nor any of its Subsidiaries is a "registered investment company"
or a company "controlled" by a "registered investment company" or a "principal
underwriter" of a "registered investment company" as such terms are defined in
the Investment Company Act of 1940. 

    
4.18. OFAC. No Loan Party nor any of its
Subsidiaries is in violation of any of the country or list based economic and
trade sanctions administered and enforced by OFAC. No Loan Party nor any of its
Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its
assets located in Sanctioned Entities, or (c) derives revenues from investments
in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds
of any loan made hereunder will be used to fund any operations in, finance any
investments or activities in, or make any payments to, a Sanctioned Person or a
Sanctioned Entity. 

    
4.19. Employee and Labor Matters. There
is (i) no unfair labor practice complaint pending or, to the knowledge of
Borrower, threatened against Borrower or its Subsidiaries before any
Governmental Authority and no grievance or arbitration proceeding pending or
threatened against Borrower or its Subsidiaries which arises out of or under any
collective bargaining agreement and that could reasonably be expected to result
in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or threatened in writing against Borrower or
its Subsidiaries that could reasonably be expected to result in a Material
Adverse Effect, or (iii) to the knowledge of Borrower, no union representation
question existing with respect to the employees of Borrower or its Subsidiaries
and no union organizing activity taking place with respect to any of the
employees of Borrower or its Subsidiaries. Except as could not reasonably be
expected to result in a Material Adverse Effect, none of Borrower or its
Subsidiaries has incurred any liability or obligation under the Worker
Adjustment and Retraining Notification Act or similar state law, which remains
unpaid or unsatisfied. The hours worked and payments made to employees of
Borrower or its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable legal requirements, except to the extent
such violations could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. All material payments due from
Borrower or its Subsidiaries on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of Borrower, except where the failure to do so could not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

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4.20. Immaterial Subsidiaries. No
Immaterial Subsidiary (a) owns or generates any Accounts or Inventory, (b) has
revenues in any fiscal year in excess of $250,000 (other than, in the case of
Quantum International, revenue generated through foreign branch offices pursuant
to the Transfer Pricing Program) or (c) receives or generates any royalty
revenue. 

    
4.21. Leases. Each Loan Party and its
Subsidiaries enjoy peaceful and undisturbed possession under all leases material
to their business and to which they are parties or under which they are
operating, and, subject to Permitted Protests, all of such material leases are
valid and subsisting and no material default by the applicable Loan Party or its
Subsidiaries exists under any of them. 

    
4.22. Accounts. As to the Accounts that
are identified by Borrower in a Borrowing Base Certificate submitted to Agent,
such Accounts are (a) bona fide existing payment obligations of the applicable
Account Debtors created by the sale and delivery of Inventory or the rendition
of services to such Account Debtors in the ordinary course of Borrower's
business, and (b) owed to Borrower without any known defenses, disputes,
offsets, counterclaims, or rights of return or cancellation, other than, with
respect to this clause (b), as is consistent with Borrower's historic return,
refund, credit, cancellation or exchange policies.

    
4.23. Inventory. As to the Inventory
that is identified by Borrower in a Borrowing Base Certificate submitted to
Agent, such Inventory is of good and merchantable quality, free from known
defects.

    
4.24. Location of Inventory. The
Inventory of Borrower and the other Loan Parties is not stored with a bailee,
warehouseman, or similar party and is located only at, or intransit between, the
locations identified on Schedule
4.24 (as such Schedule may be updated
pursuant to Section 5.14); provided, however, that Inventory of Borrower and the other Loan Parties may be
stored with the bailees, warehousemen and similar parties that are identified by
name and address of location on Schedule
4.24 (as such Schedule may be updated
pursuant to Section 5.14).

-38- 







    
4.25. Inventory Records. Each Loan Party
keeps records that are complete and accurate in all material respects itemizing
and describing the type, quality, and quantity of its and its Subsidiaries'
Inventory and the book value thereof. 

    
4.26. Convertible Subordinated Debt Documents. Borrower has delivered to Agent a complete and correct copy of the
Convertible Subordinated Debt Documents, including all schedules and exhibits
thereto. The subordination provisions with respect to the Convertible
Subordinated Debt contained in the Convertible Subordinated Debt Documents are
legal, valid and binding obligations of each Person a party thereto, and
enforceable against such Person in accordance with their terms. No "Event of
Default" (as defined in the Convertible Subordinated Debt Documents) has
occurred and is continuing. As of the Closing Date, the outstanding principal
amount owing under the Convertible Subordinated Debt Documents is $135,000,000.
The Obligations constitute "Specified Senior Indebtedness" under the Convertible
Subordinated Debt Documents. 

5. AFFIRMATIVE COVENANTS. 

          Borrower
covenants and agrees that, until termination of all of the Revolver Commitments
and payment in full of the Obligations: 

    
5.1. Financial Statements, Reports, Certificates. Borrower (a) will deliver to Agent each of the financial
statements, reports, and other items set forth on Schedule 5.1 no later than the times
specified therein, (b) agrees that no Loan Party will have a fiscal year
different from that of Borrower, except for any such Loan Party acquired after
the Closing Date, in which case Borrower shall cause such Loan Party to have the
same fiscal year as Borrower as soon as reasonably practicable after the date of
acquisition thereof, (c) agrees to maintain a system of accounting that enables
Borrower to produce financial statements in accordance with GAAP, and (d) agrees
that it will, and will cause each other Loan Party to, (i) keep a reporting
system that shows all additions, sales, claims, returns, and allowances with
respect to its and its Subsidiaries' sales, and (ii) maintain its billing
systems and practices substantially as in effect as of the Closing Date and
shall only make material modifications thereto with notice to, and with the
consent of, Agent (such consent not to be unreasonably withheld or delayed, and
not required for such changes or modifications that do not have the result of
changing the underlying information contained in, or frequency and timing of
delivery of, any reports required to be delivered under the Loan Documents).


    
5.2. Reporting. Borrower will deliver
to Agent (and if so requested by Agent, with copies for each Lender) each of the
reports set forth on Schedule
5.2 at the times specified therein.


    
5.3. Existence. Except as otherwise
permitted under Section 6.3 or Section
6.4, Borrower will, and will cause each of
its Subsidiaries (other than, to the extent it could not reasonably be expected
to result in a Material Adverse Effect, Immaterial Subsidiaries) to, at all
times preserve and keep in full force and effect such Person's valid existence
and good standing in its jurisdiction of organization and, except as could not
reasonably be expected to result in a Material Adverse Effect, good standing
with respect to all other jurisdictions in which it is qualified to do business
and any rights, franchises, permits, licenses, accreditations, authorizations,
or other approvals material to their businesses.

-39- 







    
5.4. Maintenance of Properties.
Borrower will, and will cause each of its Subsidiaries to, maintain and preserve
all of its assets that are necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear, tear, casualty, and
condemnation and Permitted Dispositions excepted (and except where the failure
to so maintain and preserve assets could not reasonably be expected to result in
a Material Adverse Effect). 

    
5.5. Taxes. Borrower will, and will
cause each of its Subsidiaries to, pay in full before delinquency or before the
expiration of any extension period all material governmental assessments and
taxes imposed, levied, or assessed against it, or any of its assets or in
respect of any of its income, businesses, or franchises, except to the extent
that the validity of such governmental assessment or tax is the subject of a
Permitted Protest. 

    
5.6. Insurance. 

         
(a) Borrower will, and will cause each of its Subsidiaries to, at Borrower's
expense, maintain insurance respecting each of Borrower's and its Subsidiaries'
assets wherever located, covering liabilities, losses or damages as are
customarily are insured against by other Persons engaged in the same or similar
businesses and similarly situated and located. All such policies of insurance
shall be with financially sound and reputable insurance companies reasonably
acceptable to Agent (it being agreed that, as of the Closing Date, Travelers
Property Casualty Co. of America is acceptable to Agent) and in such amounts as
is carried generally in accordance with sound business practice by companies in
similar businesses similarly situated and located and, in any event, in amount,
adequacy, and scope reasonably satisfactory to Agent (it being agreed that the
amount, adequacy, and scope of the policies of insurance of Borrower in effect
as of the Closing Date are satisfactory to Agent). All property insurance
policies covering the Collateral are to be made payable to Agent for the benefit
of Agent and the Lenders, as their interests may appear, in case of loss,
pursuant to a standard loss payable endorsement with a standard non-contributory
"lender" or "secured party" clause and are to contain such other provisions as
Agent may reasonably require to fully protect the Lenders' interest in the
Collateral and to any payments to be made under such policies. All certificates
of property and general liability insurance are to be delivered to Agent, with
the loss payable (but only in respect of Collateral) and additional insured
endorsements in favor of Agent and shall provide for not less than 30 days (10
days in the case of non-payment) prior written notice to Agent of the exercise
of any right of cancellation. If Borrower or its Subsidiaries fail to maintain
such insurance, Agent may arrange for such insurance, but at Borrower's expense
and without any responsibility on Agent's part for obtaining the insurance, the
solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims. 

         
(b) Borrower shall give Agent prompt notice of any loss exceeding $2,500,000
covered by its or its Subsidiaries' casualty or business interruption insurance.
Upon the occurrence and during the continuance of an Event of Default, Agent
shall have the sole right to file claims under any property and general
liability insurance policies in respect of the Collateral, to receive, receipt
and give acquittance for any payments that may be payable thereunder, and to
execute any and all endorsements, receipts, releases, assignments, reassignments
or other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.

-40- 







    
5.7. Inspection. 

         
(a) Borrower will, and will cause each of its Subsidiaries to, permit Agent,
and each of its duly authorized representatives or agents to visit any of
Borrower's or such Subsidiary's properties and inspect any of Borrower's or such
Subsidiary's assets or books and records, to examine and make copies of
Borrower's or such Subsidiary's books and records, and to discuss Borrower's or
such Subsidiary's affairs, finances, and accounts with, and to be advised as to
the same by, its officers and employees (provided an authorized representative
of Borrower shall be allowed to be present) at such reasonable times and
intervals as Agent may designate and, so long as no Default or Event of Default
has occurred and is continuing, with reasonable prior notice to Borrower and
during regular business hours; provided that unless an Event of
Default shall have occurred and shall be continuing, Borrower shall not be
required to pay the expenses of more than one visit for each 12-month period.


         
(b) Subject
to Section 2.10(c), Borrower will, and will cause each of its Subsidiaries to, permit Agent
and each of its duly authorized representatives or agents to conduct appraisals
and valuations at such reasonable times and intervals as Agent may designate. So
long as no Default or Event of Default has occurred and is continuing, Agent
agrees to provide Borrower with a copy of the report for any such valuation upon
request by Borrower so long as (i) such report exists, (ii) the third person
employed by Agent to perform such valuation consents to such disclosure, and
(iii) Borrower executes and delivers to Agent a non-reliance letter reasonably
satisfactory to Agent. 

    
5.8. Compliance with Laws. Borrower
will, and will cause each of its Subsidiaries to, comply with the requirements
of all applicable laws, rules, regulations, and orders of any Governmental
Authority, other than laws, rules, regulations, and orders the non-compliance
with which, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect. 

    
5.9. Environmental. Borrower will, and
will cause each of its Subsidiaries to, 

         
(a) Keep
any property either owned or operated by Borrower or its Subsidiaries free of
any Environmental Liens or post bonds or other financial assurances sufficient
to satisfy the obligations or liability evidenced by such Environmental Liens,


         
(b) Comply
with Environmental Laws except where non-compliance could not reasonably be
expected to result in a Material Adverse Effect and provide to Agent
documentation of such compliance which Agent reasonably requests, 

         
(c) Promptly notify Agent of any release of which Borrower has knowledge of a
Hazardous Material in any reportable quantity from or onto property owned or
operated by Borrower or its Subsidiaries and take any Remedial Actions required
to abate said release or otherwise to come into compliance, in all material
respects, with applicable Environmental Law, and

-41- 







         
(d) Promptly, but in any event within 5 Business Days of its receipt thereof,
provide Agent with written notice of any of the following: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of Borrower or its Subsidiaries, (ii) commencement of any Environmental Action
or written notice that an Environmental Action will be filed against Borrower or
its Subsidiaries, and (iii) written notice of a violation, citation, or other
administrative order from a Governmental Authority. 

    
5.10. Disclosure Updates. Borrower will,
promptly and in no event later than 10 Business Days after obtaining knowledge
thereof, notify Agent if any written information, exhibit, or report (other than
any information of a general economic nature and general information about
Borrower's industry) furnished to Agent or the Lenders contained, at the time it
was furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein (taken as a
whole) not misleading in light of the circumstances in which made (it being
understood that with respect to Projections and other forward-looking
statements, the same are subject to the proviso in the last sentence in
Section 4.12). The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto. 

    
5.11. Formation of Subsidiaries.
Borrower will, within 30 days (or such later date as permitted by Agent in its
sole discretion) after formation or acquisition by any Loan Party of any direct
or indirect Subsidiary after the Closing Date, (a) cause such new Subsidiary
that is a Domestic Subsidiary (other than any Immaterial Subsidiary until such
time that such Subsidiary is no longer an Immaterial Subsidiary) to provide to
Agent a guaranty of the Obligations, together with such other security
agreements (including Mortgages with respect to any Real Property owned in fee
of such new Subsidiary with a fair market value greater than $2,500,000), as
well as appropriate financing statements (and with respect to all property
subject to a Mortgage, fixture filings), all in form and substance reasonably
satisfactory to Agent (including being sufficient to grant Agent a first
priority Lien (subject to Permitted Liens) in and to the assets of such newly
formed or acquired Domestic Subsidiary to secure its guaranty of the
Obligations), (b) provide, or cause the applicable Loan Party to provide, to
Agent a pledge agreement and appropriate certificates and powers or financing
statements, pledging all of the direct or beneficial ownership interest in such
new Subsidiary in form and substance reasonably satisfactory to Agent to secure
the Obligations; provided, that only 65% of the total outstanding voting Equity
Interests of any first tier Subsidiary of Borrower that is a CFC (and none of
the Equity Interests of any Subsidiary of such CFC) shall be required to be
pledged if pledging a greater amount could reasonably be expected to result in
adverse tax consequences or the costs to the Loan Parties of providing such
pledge are unreasonably excessive (as determined by Agent in consultation with
Borrower) in relation to the benefits to Agent and the Lenders of the security
afforded thereby (which pledge, if reasonably requested by Agent, shall be
governed by the laws of the jurisdiction of such Subsidiary), and (c) provide to
Agent all other documentation, including one or more opinions of counsel
reasonably satisfactory to Agent, which, in its reasonable opinion, is
appropriate with respect to the execution and delivery of the applicable
documentation referred to above (including policies of title insurance or other
documentation with respect to all Real Property owned in fee and subject to a
Mortgage). Any document, agreement, or instrument executed or issued pursuant to
this Section 5.11
shall constitute a Loan Document.

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5.12. Further Assurances. Borrower will,
and will cause each of the other Loan Parties to, at any time upon the
reasonable request of Agent, execute or deliver to Agent any and all financing
statements, fixture filings, security agreements, pledges, assignments,
mortgages, deeds of trust, opinions of counsel, and all other documents (the
"Additional Documents") that Agent may reasonably request in form and
substance reasonably satisfactory to Agent, to create, perfect, and continue
perfected or to better perfect Agent's Liens in all of the assets (other than
those assets whose creation or perfection is explicitly not required pursuant to
the Loan Documents) of Borrower and the other Loan Parties (whether now owned or
hereafter arising or acquired, tangible or intangible, real or personal), to
create and perfect Liens in favor of Agent in any Real Property acquired by
Borrower or any other Loan Party with a fair market value in excess of
$2,500,000, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, if Borrower or any other Loan Party refuses or
fails to execute or deliver any reasonably requested Additional Documents within
a reasonable period of time following the request to do so, Borrower and each
other Loan Party hereby authorizes Agent to execute any such Additional
Documents in the applicable Loan Party's name and authorizes Agent to file such
executed Additional Documents in any appropriate filing office. In furtherance
of, and not in limitation of, the foregoing, each Loan Party shall take such
actions as Agent may reasonably request from time to time to ensure that the
Obligations are guarantied by the Guarantors and are secured by substantially
all of the assets of Borrower and the other Loan Parties, including all of the
outstanding capital Equity Interests of Borrower's Subsidiaries (subject to
exceptions and limitations contained in the Loan Documents with respect to CFCs
and Subsidiaries thereof). 

    
5.13. Lender Meetings. Borrower will,
within 90 days after the close of each fiscal year of Borrower, at the request
of Agent or of the Required Lenders and upon reasonable prior notice, hold a
meeting (at a mutually agreeable time and location (which may be by conference
call)) with all Lenders who choose to attend such meeting at which meeting shall
be reviewed the financial results of the previous fiscal year and the financial
condition of Borrower and its Subsidiaries and the projections presented for the
current fiscal year of Borrower. 

    
5.14. Location of Inventory. Borrower
will, and will cause each of the other Loan Parties to, keep its Inventory
(other than (i) Service Inventory and (ii) Inventory at any location where the
value of all Inventory at such location is less than $1,000,000) only at the
locations identified on Schedule
4.24 and their chief executive offices only
at the locations identified on Schedule 7 to the Security Agreement (or
corresponding schedule to any other Guaranty and Security Agreement);
provided,
that Borrower may amend Schedule
4.24 or Schedule 7 to the Security Agreement
(or corresponding schedule to any other Guaranty and Security Agreement) so long
as (x) with respect to any such amendment evidencing a relocation of a chief
executive office, such amendment occurs by written notice to Agent not less than
5 Business Days prior to the date on which such chief executive office is
relocated and (y) with respect to any such amendment evidencing a move of such
Inventory to a new location, such amendment is delivered along with the next
Compliance Certificate required to be delivered to Administrative Agent in
accordance with this Agreement with respect to a month ending on a calendar
quarter; provided
further,
that, during any period when the aggregate value of all Inventory located at
locations not identified on Schedule
4.24 exceeds $5,000,000, in addition to the
requirements set forth in Section
5.2, Borrower shall be required to deliver to
Agent an updated Borrowing Base Certificate within 5 Business Days of each move
of any Inventory to a location not identified on Schedule 4.24.

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5.15. Cash Management. The Loan Parties
will establish and maintain with Wells Fargo, at all times on and after
September 29, 2012, all Deposit Accounts of Borrower and the other Loan Parties
(other than as provided in clauses (i), (ii), (iii) and (iv) of Section 6.9(b) and other
than any Deposit Account of Borrower maintained at Silicon Valley Bank
specifically and exclusively (x) used to fund accounts payable or (y) containing
proceeds from Foreign Accounts) so long as depository and treasury management
services are offered by Wells Fargo on commercially competitive terms.


6.
NEGATIVE COVENANTS. 

          Borrower
covenants and agrees that, until termination of all of the Revolver Commitments
and payment in full of the Obligations: 

    
6.1. Indebtedness. Borrower will not,
and will not permit any of its Subsidiaries to create, incur, assume, suffer to
exist, guarantee, or otherwise become or remain, directly or indirectly, liable
with respect to any Indebtedness, except for Permitted Indebtedness. 

    
6.2. Liens. Borrower will not, and will
not permit any of its Subsidiaries to create, incur, assume, or suffer to exist,
directly or indirectly, any Lien on or with respect to any of its assets, of any
kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens. 

    
6.3. Restrictions on Fundamental Changes. Borrower will not, and will not permit any of its Subsidiaries to,


         
(a) Other
than in order to consummate a Permitted Acquisition, enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its Equity
Interests, except for (i) any merger between Loan Parties, provided, that Borrower
must be the surviving entity of any such merger to which it is a party, (ii) any
merger between a Loan Party and a Subsidiary of such Loan Party that is not a
Loan Party so long as such Loan Party is the surviving entity of any such
merger, and (iii) any merger between Subsidiaries of Borrower that are not Loan
Parties, 

         
(b) liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), except for (i) the liquidation or dissolution of Immaterial
Subsidiaries, (ii) the liquidation or dissolution of a Loan Party (other than
Borrower) or any of its wholly-owned Subsidiaries so long as all of the assets
(including any interest in any Equity Interests) of such liquidating or
dissolving Loan Party or Subsidiary are transferred to a Loan Party that is not
liquidating or dissolving, or (iii) the liquidation or dissolution of a
Subsidiary of Borrower that is not a Loan Party (other than any such Subsidiary
the Equity Interests of which (or any portion thereof) is subject to a Lien in
favor of Agent) so long as all of the assets of such liquidating or dissolving
Subsidiary are transferred to a Subsidiary of Borrower that is not liquidating
or dissolving, or

-44- 







         
(c) suspend
or cease operating its or their business, except with respect to an Immaterial
Subsidiary or as permitted pursuant to clauses (a) or (b) above or in connection
with a transaction permitted under Section
6.4. 

    
6.4. Disposal of Assets. Other than
Permitted Dispositions or transactions expressly permitted by Sections 6.3 or
6.9,
Borrower will not, and will not permit any of its Subsidiaries to convey, sell,
lease, license, assign, transfer, or otherwise dispose of (or enter into an
agreement to convey, sell, lease, license, assign, transfer, or otherwise
dispose of) any of its or their assets; provided, that Borrower or any such
Subsidiary may enter into an agreement to dispose of assets of Borrower or its
Subsidiaries in connection with the repayment in full of the Obligations and the
termination of this Agreement and the Revolver Commitments hereunder so long as
(i) such agreement requires that the Net Cash Proceeds from such disposition
will be applied to repay all of the Obligations in full and (ii) Agent receives
prompt written notice (and, in any event, written notice no less than 5 Business
Days prior to such repayment in full of the Obligations and termination of this
Agreement and the Revolver Commitments hereunder) of Borrower's or such
Subsidiary's entry in such agreement. 

    
6.5. Nature of Business. Borrower will
not, and will not permit any of its Subsidiaries to make any change in the
nature of its or their business as described in Schedule 6.5 or acquire any properties or assets that are not reasonably
related to the conduct of such business activities; provided, that the foregoing shall not
prevent Borrower and its Subsidiaries from engaging in any business that is
reasonably related or ancillary to its or their business or is a reasonable
extension of its or their business. 

    
6.6. Prepayments and Amendments.
Borrower will not, and will not permit any of its Subsidiaries to, 

         
(a) Except
in connection with (i) Refinancing Indebtedness permitted by Section 6.1 and (ii) any
payment that is made solely from the proceeds of an issuance by Borrower of
Qualified Equity Interests or by issuing Qualified Equity Interests in
satisfaction or exchange for such Indebtedness so long as, in each case under
this clause (ii), no Default or Event of Default shall have occurred and be
continuing or would result therefrom, 

              
(i) unless,
immediately after giving effect to any such optional prepayment, redemption,
defeasance, purchase or other acquisition, (x) Borrower shall be in compliance
on a pro forma basis with the covenant set forth in Section 7(a) recomputed for the most
recently ended month of Borrower, (x) Borrower shall have Liquidity, as of such
date, in an amount equal to or greater than $30,000,000 and (z) no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, optionally prepay, redeem, defease, purchase, or otherwise acquire
any Indebtedness of Borrower or its Subsidiaries, other than (A) the Obligations
in accordance with this Agreement, and (B) Permitted Intercompany Advances,


-45- 







              
(ii) make
any payment (including any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment) with respect
to or on account of any Indebtedness (other than the Convertible Subordinated
Debt) that has been contractually subordinated in right of payment to the
Obligations if such payment is not permitted at such time under the
subordination terms and conditions; provided, that, so long as it is permitted
by law, and so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, Borrower may make payments in exchange for
fractional shares in connection with the conversion of any such Indebtedness, in
an otherwise cashless exchange, into Qualified Equity Interests, or 

              
(iii) unless, immediately after giving effect to any such payment, (x) Borrower
shall be in compliance on a pro forma basis with the covenant set forth in
Section 7(a) recomputed for the most recently ended month of Borrower, (x) Borrower
shall have Liquidity, as of such date, in an amount equal to or greater than
$30,000,000 and (z) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, make any payment (including any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment) with respect to or on account of the
Convertible Subordinated Debt; provided, that, notwithstanding the foregoing, so
long as it is permitted by law, and so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom, Borrower may
make payments (x) of accrued interest owing with respect to the Convertible
Subordinated Debt and (y) in exchange for fractional shares in connection with
the conversion of the Convertible Subordinated Debt, in an otherwise cashless
exchange, into Qualified Equity Interests in accordance with the terms of the
Convertible Subordinated Debt Documents, or 

         
(b) Directly or indirectly, amend, modify, or change any of the terms or
provisions of 

              
(i) any
agreement, instrument, document, indenture, or other writing evidencing or
concerning Permitted Indebtedness (other than (A) the Obligations in accordance
with this Agreement, (B) Permitted Intercompany Advances, and (C) Indebtedness
permitted under clauses (c), (e)(i), (e)(ii), solely to the extent the terms or
provisions of the Indebtedness being guaranteed is permitted to be amended,
modified or changed, (e)(iii), (j), (l), (m), (p) and (r) of the definition of
Permitted Indebtedness); provided that (x) with respect to any
Permitted Indebtedness which is permitted to be refinanced with Refinancing
Indebtedness, Borrower may amend, modify or change any such agreement,
instrument, document, indenture, or other writing evidencing such Permitted
Indebtedness if, after giving effect to such amendment, modification or change,
such Permitted Indebtedness would be permitted as Refinancing Indebtedness and
(y) Borrower may permit any agreement, instrument, document, indenture, or other
writing evidencing or concerning Subordinated Indebtedness to be amended with
the sole effect of allowing the applicable Subordinated Indebtedness to be
converted, in a cashless exchange (other than respect to cash payment made in
exchange for fractional shares), into Qualified Equity Interests, or 

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(ii) the
Governing Documents of any Loan Party or any of its Subsidiaries if the effect
thereof, either individually or in the aggregate, could reasonably be expected
to be materially adverse to the interests of the Lenders. 

    
6.7. Restricted Payments. Borrower will
not, and will not permit any of its Subsidiaries to make any Restricted Payment;
provided, that, so long as it is permitted by law, and so long as no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, 

         
(a) Borrower may make Restricted Payments to former employees, officers, or
directors of Borrower (or any spouses, ex-spouses, or estates of any of the
foregoing) on account of redemptions of Equity Interests of Borrower held by
such Persons, provided, that the aggregate amount of such redemptions made by
Borrower (whether in exchange for cash or the issuance of Indebtedness permitted
pursuant to clause (l) of the definition of Permitted Indebtedness) during the
term of this Agreement does not exceed $5,000,000 in the aggregate,

         
(b) Borrower may make Restricted Payments to former employees, officers, or
directors of Borrower (or any spouses, ex-spouses, or estates of any of the
foregoing), solely in the form of forgiveness of Indebtedness of such Persons
owing to Borrower on account of repurchases of the Equity Interests of Borrower
held by such Persons; provided that such Indebtedness was incurred by such
Persons solely to acquire Equity Interests of Borrower,

         
(c) Borrower may permit the Convertible Subordinated Debt to convert into
Qualified Equity Interests in accordance with the terms of the Convertible
Subordinated Debt Documents, 

         
(d) Borrower may exchange Qualified Equity Interests for other Qualified
Equity Interests in a cashless exchange (other than respect to cash payment made
in exchange for fractional shares),

         
(e) (i) a
Subsidiary of Borrower may make Restricted Payments to a Loan Party and (ii) a
Subsidiary of Borrower that is not a Domestic Subsidiary may make Restricted
Payments to a Subsidiary of Borrower that is not a Domestic Subsidiary, and


         
(f) Borrower or any of its Subsidiaries may make any other Restricted
Payments so long as, and to the extent that, immediately after giving effect to
any such Restricted Payment, (i) Borrower shall be in compliance on a pro forma
basis with the covenant set forth in Section
7(a) recomputed for the most recently ended
month of Borrower and (ii) Borrower shall have Liquidity, as of such date, in an
amount equal to or greater than $30,000,000. 

    
6.8. Accounting Methods. Borrower will
not, and will not permit any of its Subsidiaries to modify or change its fiscal
year or its method of accounting (other than as may be required to conform to
GAAP and other than as necessary to cause any Loan Party acquired after the
Closing Date to have the same fiscal year as Borrower). 


-47- 







    
6.9. Investments; Controlled Investments.

          (a) Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make or acquire any Investment or incur any liabilities
(including contingent obligations) for or in connection with any Investment
except for Permitted Investments. 

         
(b) Other
than (i) with respect to Deposit Accounts located in the United States, an
aggregate amount of not more than $500,000 at any one time, in the case of
Borrower and the other Loan Parties, (ii) amounts deposited into Deposit
Accounts specially and exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for Borrower's or its Subsidiaries'
employees, (iii) amounts deposited in a Deposit Account maintained at Silicon
Valley Bank for the sole purpose of cash collateralizing letters of credit
issued by Silicon Valley Bank in favor of Borrower or any other Loan Party up to
an aggregate amount, as of any date of determination, not to exceed the
aggregate undrawn amount of all such outstanding letters of credit as of such
date of determination, and (iv) with respect to Deposit Accounts located outside
the United States, an aggregate amount of not more than $15,000,000 at any one
time, in the case of Borrower and the other Loan Parties, make, acquire, or
permit to exist Permitted Investments consisting of cash, Cash Equivalents, or
amounts credited to Deposit Accounts or Securities Accounts unless Borrower or
such other Loan Party, as applicable, and the applicable bank or securities
intermediary have entered into Control Agreements with Agent governing such
Permitted Investments in order to perfect (and further establish) Agent's Liens
in such Permitted Investments. Except as provided in clauses (i), (ii), (iii)
and (iv) of the foregoing sentence, Borrower shall not and shall not permit any
other Loan Party to establish or maintain any Deposit Account or Securities
Account unless Agent shall have received a Control Agreement in respect of such
Deposit Account or Securities Account, with each such Control Agreement
providing, among other things, that the applicable depository bank will, upon
receipt from Agent of a "Notice of Exclusive Control" or equivalent notice in
such Control Agreement, forward, by daily sweep, all amounts in such Deposit
Account or Securities Account to Agent’s Account. Agent hereby agrees that it
will not issue such a "Notice of Exclusive Control" or equivalent notice to the
applicable depository bank unless (x) an Event of Default has occurred and is
continuing or (y) Average Liquidity, for any 30 day period, measured as of the
end of any such period, is less than (I) $20,000,000, during the period
commencing on the Closing Date and ending on September 30, 2012, or (II)
$25,000,000, during the period from and after October 1, 2012. 

    
6.10. Transactions with Affiliates.
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction with any Affiliate of
Borrower or any of its Subsidiaries except for: 

         
(a) transactions (other than the payment of management, consulting,
monitoring, or advisory fees) between Borrower or its Subsidiaries, on the one
hand, and any Affiliate of Borrower or its Subsidiaries, on the other hand, so
long as such transactions (i) are fully disclosed to Agent prior to the
consummation thereof, if they involve one or more payments by Borrower or its
Subsidiaries in excess of $5,000,000 for any single transaction or series of
related transactions, and (ii) are no less favorable, taken as a whole, to
Borrower or its Subsidiaries, as applicable, than would be obtained in an arm's
length transaction with a non-Affiliate, 

-48-







          (b) so long as it has been approved by Borrower's or its applicable
Subsidiary's Board of Directors in accordance with applicable law, any indemnity
provided for the benefit of directors (or comparable managers) of Borrower or
its applicable Subsidiary, 

         
(c) so long
as it has been approved by Borrower's or its applicable Subsidiary's Board of
Directors in accordance with applicable law, the payment of reasonable
compensation, severance, or employee benefit arrangements to employees,
officers, and outside directors of Borrower and its Subsidiaries in the ordinary
course of business and consistent with industry practice,

         
(d) (i)
transactions permitted by Section
6.3 or Section 6.7, (ii) transactions
pursuant to, and made in accordance with, the Transfer Pricing Program, (iii)
any Permitted Intercompany Advance, (iv) transactions permitted under clause (j)
of the definition of Permitted Dispositions, and (v) Investments permitted under
clauses (h) and (n) of the definition of Permitted Investments, and 

         
(e) Indebtedness owing to Affiliates permitted under clause (n) of the
definition of Permitted Indebtedness or loans or advances to Affiliates
permitted under clause (k) of the definition of Permitted Investments.


    
6.11. Use of Proceeds. Borrower will
not, and will not permit any of its Subsidiaries to use the proceeds of any loan
made hereunder for any purpose other than (a) on the Closing Date, (i) to repay,
in full, the outstanding principal, accrued interest, and accrued fees and
expenses owing under or in connection with the Existing Credit Facility, and
(ii) to pay the fees, costs, and expenses incurred in connection with this
Agreement, the other Loan Documents, and the transactions contemplated hereby
and thereby, in each case, as set forth in the Flow of Funds Agreement, and (b)
thereafter, consistent with the terms and conditions hereof, for their lawful
and permitted purposes (including that no part of the proceeds of the loans made
to Borrower will be used to purchase or carry any such Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any such Margin Stock
or for any purpose that violates the provisions of Regulation T, U or X of the
Board of Governors). 

    
6.12. Limitation on Issuance of Equity Interests. Except for the issuance or sale of Qualified Equity Interests by
Borrower, Borrower will not, and will not permit any of its Subsidiaries to
issue or sell or enter into any agreement or arrangement for the issuance or
sale of any of its Equity Interests other than, so long as such issuance or sale
is permitted pursuant to clause (j) of the definition of Permitted Dispositions,
to a Loan Party or its Subsidiaries. 

    
6.13. [Intentionally
Omitted]. 

    
6.14. Immaterial Subsidiaries. Borrower
will not permit any Immaterial Subsidiary to (a) own or generate any Accounts or
Inventory, (b) have revenues in any fiscal year in excess of $250,000 (other
than, in the case of Quantum International, revenue generated through foreign
branch offices pursuant to the Transfer Pricing Program) or (c) receive or
generate any royalty revenue, unless Borrower causes such Immaterial Subsidiary
to provide to Agent a guaranty of the Obligations, together with such other
security agreements and appropriate financing statements in accordance with
Section 5.11. 

-49-







7. FINANCIAL COVENANTS.


          Borrower
covenants and agrees that, until termination of all of the Revolver Commitments
and payment in full of the Obligations, Borrower will: 

         
(a) Fixed Charge Coverage Ratio. Have a
Fixed Charge Coverage Ratio, measured on a month-end basis, of at least 1.20 for
the 12 month period ending on the last day of such month. 

         
(b) Minimum Liquidity. (i) During the
period commencing on the Closing Date and ending on September 30, 2012, maintain
Average Liquidity for the most recently completed month (or, with respect to the
month ended March 31, 2012, partial month) of at least $15,000,000 and (ii)
during the period from and after October 1, 2012, maintain Average Liquidity for
the most recently completed month of at least $20,000,000.

8.
EVENTS OF DEFAULT. 

          Any one or
more of the following events shall constitute an event of default (each, an
"Event of Default") under this Agreement: 

    
8.1. Payments. If Borrower fails to pay
when due and payable (whether at the due date thereof or at a date fixed for
mandatory repayment thereof or by acceleration thereof or otherwise), (a) all or
any portion of the Obligations consisting of interest, fees, or charges due the
Lender Group, reimbursement of Lender Group Expenses, or other amounts (other
than any portion thereof constituting principal) constituting Obligations
(including any portion thereof that accrues after the commencement of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any such Insolvency Proceeding), and such failure continues
for a period of 3 Business Days, (b) all or any portion of the principal of the
Loans, or (c) any amount payable to Issuing Lender in reimbursement of any
drawing under a Letter of Credit; 

    
8.2. Covenants. If any Loan Party or
any of its Subsidiaries: 

         
(a) fails
to perform or observe any covenant or other agreement contained in any of (i)
Sections
3.6,
5.3 (solely
if a Loan Party is not in good standing in its jurisdiction of organization),
5.6(a),
5.14, or
5.15 of
this Agreement, (ii) Section 6, or (iii) Section
7; 

         
(b) fails
to perform or observe any covenant or other agreement contained in any of (i)
Sections 5.1, 5.2, or 5.7 (solely if a Loan Party refuses to allow Agent or its representatives or
agents to visit such Loan Party's properties, inspect its assets or books or
records, examine and make copies of its books and records, or discuss such Loan
Party's affairs, finances, and accounts with officers and employees of such Loan
Party) of this Agreement or (ii) Section 6 of the Security Agreement (or
corresponding section of any other Guaranty and Security Agreement) and, in each
case, such failure continues for a period of 3 Business Days after the earlier
of (x) the date on which such failure shall first become known to any officer of
Borrower or (y) the date on which written notice thereof is given to a Loan
Party by Agent;

-50-







          (c) fails to perform or observe any covenant or other agreement contained in
any of Sections 5.3 (other than if a Loan Party is not in good standing in its jurisdiction
of organization), 5.4, 5.5, 5.6(b), 5.8, 5.10, 5.11 and 5.12 of this Agreement and such failure continues for a period of
15 days after the earlier of (i) the date on which such failure shall first
become known to any officer of Borrower or (ii) the date on which written notice
thereof is given to a Loan Party by Agent; or 

         
(d) fails
to perform or observe any covenant or other agreement contained in this
Agreement, or in any of the other Loan Documents, in each case, other than any
such covenant or agreement that is the subject of another provision of this
Section 8
(in which event such other provision of this Section 8 shall govern), and such
failure continues for a period of 30 days after the earlier of (i) the date on
which such failure shall first become known to any officer of a Loan Party or
(ii) the date on which written notice thereof is given to Borrower by Agent;


    
8.3. Judgments. If one or more
judgments, orders, or awards for the payment of money involving an aggregate
amount of $2,500,000, or more (except to the extent fully covered (other than to
the extent of customary deductibles) by insurance pursuant to which the insurer
has not denied coverage) is entered or filed against a Loan Party or any of its
Subsidiaries, or with respect to any of their respective assets, and either (a)
there is a period of 30 consecutive days at any time after the entry of any such
judgment, order, or award during which (1) the same is not discharged,
satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement
thereof is not in effect, or (b) enforcement proceedings are commenced upon such
judgment, order, or award; 

    
8.4. Voluntary Bankruptcy, etc. If an
Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;


    
8.5. Involuntary Bankruptcy, etc. If an
Insolvency Proceeding is commenced against a Loan Party or any of its
Subsidiaries and any of the following events occur: (a) such Loan Party or such
Subsidiary consents to the institution of such Insolvency Proceeding against it,
(b) the petition commencing the Insolvency Proceeding is not timely
controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 60 calendar days of the date of the filing thereof, (d) an
interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, such Loan Party or its Subsidiary, or (e) an order
for relief shall have been issued or entered therein; 

    
8.6. Default Under Other Agreements. If
there is (a) an "Event of Default" (as defined in the Convertible Subordinated
Debt Documents), (b) a default in one or more agreements to which a Loan Party
or any of its Subsidiaries is a party with one or more third Persons relative to
a Loan Party's or any of its Subsidiaries' Indebtedness involving an aggregate
amount of $2,500,000 or more, and such default (i) occurs at the final maturity
of the obligations thereunder, or (ii) results in a right by such third Person,
irrespective of whether exercised, to accelerate the maturity of such Loan
Party's or its Subsidiary's obligations thereunder, or (c) a default in or an
involuntary early termination of one or more Hedge Agreements to which a Loan
Party or any of its Subsidiaries is a party; 

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     8.7. Representations, etc. If any
warranty, representation, certificate, statement, or Record made herein or in
any other Loan Document or delivered in writing to Agent or any Lender in
connection with this Agreement or any other Loan Document proves to be untrue in
any material respect (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) as of the date of issuance or
making or deemed making thereof; 

    
8.8. Guaranty. If any material
obligation of any Guarantor under the guaranty contained in any Guaranty and
Security Agreement is limited or terminated by operation of law or by such
Guarantor (other than in accordance with the terms of this Agreement);


    
8.9. Security Documents. If any
Guaranty and Security Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason (other than to the extent such creation or
perfection is explicitly not required pursuant to the terms thereof), fail or
cease to create a valid and perfected and, except to the extent of Permitted
Liens which are non-consensual Permitted Liens, permitted purchase money Liens
or the interests of lessors under Capital Leases, first priority Lien on the
Collateral covered thereby, except (a) as a result of a disposition of the
applicable Collateral in a transaction permitted under this Agreement, (b) with
respect to Collateral the aggregate value of which, for all such Collateral,
does not exceed at any time, $1,000,000 or (c) as the result of an action or
failure to act on the part of Agent; 

    
8.10. Loan Documents. The validity or
enforceability of any Loan Document shall at any time for any reason (other than
solely as the result of an action or failure to act on the part of Agent) be
declared to be null and void, or a proceeding shall be commenced by a Loan Party
or its Subsidiaries, or by any Governmental Authority having jurisdiction over a
Loan Party or its Subsidiaries, seeking to establish the invalidity or
unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that
such Loan Party or its Subsidiaries has any liability or obligation purported to
be created under any Loan Document; or 

    
8.11. Change of Control. A Change of
Control shall occur, whether directly or indirectly. 

9.
RIGHTS AND REMEDIES. 

    
9.1. Rights and Remedies. Upon the
occurrence and during the continuation of an Event of Default, Agent may, and,
at the instruction of the Required Lenders, shall (in each case under clauses
(a) or (b) by written notice to Borrower), in addition to any other rights or
remedies provided for hereunder or under any other Loan Document or by
applicable law, do any one or more of the following: 

         
(a) (i)
declare the principal of, and any and all accrued and unpaid interest and fees
in respect of, the Loans and all other Obligations (other than the Bank Product
Obligations), whether evidenced by this Agreement or by any of the other Loan
Documents to be immediately due and payable, whereupon the same shall become and
be immediately due and payable and Borrower shall be obligated to repay all of
such Obligations in full, without presentment, demand, protest, or further
notice or other requirements of any kind, all of which are hereby expressly
waived by Borrower, (ii) terminate any Letter of Credit that may be terminated
in accordance with its terms, and (iii) direct Borrower to provide (and Borrower
agrees that upon receipt of such notice it will provide) Letter of Credit
Collateralization to Agent to be held as security for Borrower's reimbursement
obligations for drawings that may subsequently occur under issued and
outstanding Letters of Credit; 

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          (b) declare the Revolver Commitments terminated, whereupon the Revolver
Commitments shall immediately be terminated together with (i) any obligation of
any Revolving Lender to make Revolving Loans, (ii) the obligation of the Swing
Lender to make Swing Loans, and (iii) the obligation of Issuing Lender to issue
Letters of Credit; and 

         
(c) exercise all other rights and remedies available to Agent or the Lenders
under the Loan Documents, under applicable law, or in equity. 

The foregoing to the contrary
notwithstanding, upon the occurrence of any Event of Default described in
Section 8.4
or Section 8.5, in addition to the remedies set forth above, without any notice to
Borrower or any other Person or any act by the Lender Group, the Revolver
Commitments shall automatically terminate and the Obligations (other than the
Bank Product Obligations), inclusive of the principal of, and any and all
accrued and unpaid interest and fees in respect of, the Loans and all other
Obligations (other than the Bank Product Obligations), whether evidenced by this
Agreement or by any of the other Loan Documents, shall automatically become and
be immediately due and payable and Borrower shall automatically be obligated to
repay all of such Obligations in full (including Borrower being obligated to
provide (and Borrower agrees that it will provide) (1) Letter of Credit
Collateralization to Agent to be held as security for Borrower's reimbursement
obligations in respect of drawings that may subsequently occur under issued and
outstanding Letters of Credit and (2) Bank Product Collateralization to be held
as security for Borrower's or its Subsidiaries' obligations in respect of
outstanding Bank Products), without presentment, demand, protest, or notice or
other requirements of any kind, all of which are expressly waived by Borrower.


    
9.2. Remedies Cumulative. The rights
and remedies of the Lender Group under this Agreement, the other Loan Documents,
and all other agreements shall be cumulative. The Lender Group shall have all
other rights and remedies not inconsistent herewith as provided under the Code,
by law, or in equity. No exercise by the Lender Group of one right or remedy
shall be deemed an election, and no waiver by the Lender Group of any Event of
Default shall be deemed a continuing waiver. No delay by the Lender Group shall
constitute a waiver, election, or acquiescence by it. 

10.
WAIVERS; INDEMNIFICATION. 

    
10.1. Demand; Protest; etc. Borrower
waives demand, protest, notice of protest, notice of default or dishonor, notice
of payment and nonpayment, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of documents, instruments, chattel paper, and
guarantees at any time held by the Lender Group on which Borrower may in any way
be liable. 

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     10.2. The Lender Group's Liability for
Collateral. Borrower hereby agrees that:
(a) so long as Agent complies with its obligations, if any, under the Code, the
Lender Group shall not in any way or manner be liable or responsible for: (i)
the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or
arising in any manner or fashion from any cause, (iii) any diminution in the
value thereof, or (iv) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other Person, and (b) all risk of loss, damage, or
destruction of the Collateral shall be borne by Borrower. 

     10.3.
Indemnification. Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons, and each Participant (each,
an "Indemnified Person") harmless (to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations, proceedings,
liabilities, fines, costs, penalties, and damages, and all reasonable and
documented fees and disbursements of attorneys' (provided that, other than in
connection with terminating, enforcing or defending of this Agreement or any of
the other Loan Document, such indemnification of attorneys' cost and expenses
shall be limited to one counsel for all such Indemnified Persons (and, if
necessary, one local counsel in each applicable jurisdiction and, in the case of
an actual or potential conflict of interest among any one or more Indemnified
Persons, one additional counsel for each group of similarly situated Indemnified
Persons)), experts, or consultants and all other costs and expenses actually
incurred in connection therewith or in connection with the enforcement of this
indemnification (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of
them (a) in connection with or as a result of or related to the execution and
delivery (provided that Borrower shall not be liable for costs and expenses
(including attorneys' fees) of any Lender (other than WFCF) incurred in
advising, structuring, drafting, reviewing, administering or syndicating the
Loan Documents), enforcement, performance, or administration (including any
restructuring or workout with respect hereto) of this Agreement, any of the
other Loan Documents, or the transactions contemplated hereby or thereby or the
monitoring of Borrower's and its Subsidiaries' compliance with the terms of the
Loan Documents (provided, that the indemnification in this clause (a) shall not extend
to (i) disputes solely between or among the Lenders, (ii) disputes solely
between or among the Lenders and their respective Affiliates; it being
understood and agreed that the indemnification in this clause (a) shall extend
to Agent (but not the Lenders) relative to disputes between or among Agent on
the one hand, and one or more Lenders, or one or more of their Affiliates, on
the other hand, or (iii) any Taxes or any costs attributable to Taxes, which
shall be governed solely by Section
16), (b) with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event,
or circumstance in any manner related thereto, and (c) in connection with or
arising out of any presence or release of Hazardous Materials at, on, under, to
or from any assets or properties owned, leased or operated by Borrower or any of
its Subsidiaries or any Environmental Actions, Environmental Liabilities or
Remedial Actions related in any way to any such assets or properties of Borrower
or any of its Subsidiaries (each and all of the foregoing, the "Indemnified Liabilities").
The foregoing to the contrary notwithstanding, Borrower shall have no obligation
to any Indemnified Person under this Section
10.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person or its officers, directors, employees, attorneys', or agents. This
provision shall survive the termination of this Agreement and the repayment in
full of the Obligations. If any Indemnified Person makes any payment to any
other Indemnified Person with respect to an Indemnified Liability as to which
Borrower was required to indemnify the Indemnified
Person receiving such payment, the Indemnified Person making such payment is
entitled to be indemnified and reimbursed by Borrower with respect thereto.
WITHOUT LIMITATION, THE FOREGOING INDEMNITY
SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES
WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR
OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON. 

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11.
NOTICES. 

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


	If to Borrower:		QUANTUM CORPORATION
		          	3600 136 Place SE, Suite 300
			Bellevue, WA 98006
			Attn: Jodi Tveit
			Fax No. (425) 201-1577
	 
	with copies to:		LATHAM & WATKINS
  LLP
			140 Scott Drive
			Menlo Park, California 94025
			Attn: Tad J. Freese, Esq.
			Fax No. (650) 463-2600
	 
	If to Agent:		WELLS FARGO CAPITAL FINANCE,
      LLC
			2450 Colorado Avenue, Suite 3000W
			Santa Monica, California 90404-3597
			Attn: Account Manager – Specific Manager
			Fax No. (866) 882-4479
	 
	with copies to:		GOLDBERG KOHN LTD.
			55 East Monroe Street, Suite 3300
			Chicago, Illinois 60603
			Attn: Seth H. Good, Esq.
			Fax No.: (312) 863-7838




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

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12.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER;
JUDICIAL REFERENCE PROVISION. 

          (a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY
CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED
HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. 

         
(b) THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN
THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 12(b). 

         
(c) TO
THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND EACH MEMBER OF THE
LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF
ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A "CLAIM"). BORROWER
AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

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(d) THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
LOS ANGELES AND THE STATE OF CALIFORNIA, IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT
AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION. 

         
(e) EACH
PARTY HERETO AGREES THAT SUCH PARTY WILL NOT MAKE ANY CLAIM BY SUCH PARTY
AGAINST ANY OTHER PARTY TO THIS AGREEMENT, OR ANY AFFILIATE, DIRECTOR, OFFICER,
EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR
ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY
CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR
RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND
EACH PARTY HERETO HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM
FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED
TO EXIST IN ITS FAVOR. 

         
(f) IN
THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA
(THE "COURT") BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY CLAIM AND
THE WAIVER SET FORTH IN CLAUSE (C) ABOVE IS NOT ENFORCEABLE IN SUCH PROCEEDING,
THE PARTIES HERETO AGREE AS FOLLOWS:


              
(i) WITH
THE EXCEPTION OF THE MATTERS SPECIFIED IN SUBCLAUSE (ii) BELOW, ANY CLAIM SHALL
BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE
PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1. THE
PARTIES INTEND THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE.
VENUE FOR THE REFERENCE PROCEEDING SHALL BE IN THE
COUNTY OF LOS ANGELES, CALIFORNIA.


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(ii) THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL
REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN
REAL OR PERSONAL PROPERTY, (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING SET-OFF
OR RECOUPMENT), (C) APPOINTMENT OF A RECEIVER, AND (D) TEMPORARY, PROVISIONAL,
OR ANCILLARY REMEDIES (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION,
TEMPORARY RESTRAINING ORDERS, OR PRELIMINARY INJUNCTIONS). THIS AGREEMENT DOES
NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND
REMEDIES DESCRIBED IN CLAUSES (A) - (D) AND ANY SUCH EXERCISE OR OPPOSITION DOES
NOT WAIVE THE RIGHT OF ANY PARTY TO PARTICIPATE IN A REFERENCE PROCEEDING
PURSUANT TO THIS AGREEMENT WITH RESPECT TO ANY OTHER MATTER. 

              
(iii) UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL
SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE PARTIES
DO NOT AGREE UPON A REFEREE WITHIN 10 DAYS OF SUCH WRITTEN REQUEST, THEN, ANY
PARTY SHALL HAVE THE RIGHT TO REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B). THE REFEREE SHALL BE
APPOINTED TO SIT WITH ALL OF THE POWERS PROVIDED BY LAW. PENDING APPOINTMENT OF
THE REFEREE, THE COURT SHALL HAVE THE POWER TO ISSUE TEMPORARY OR PROVISIONAL
REMEDIES. 

              
(iv) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, 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 WHEN ANY PARTY SO
REQUESTS A COURT REPORTER AND A TRANSCRIPT IS ORDERED, A COURT REPORTER SHALL BE
USED AND THE REFEREE SHALL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT. THE
PARTY MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE
COSTS OF THE COURT REPORTER, PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE'S
FEES, SHALL ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED
BY THE REFEREE. 

              
(v) THE
REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES. THE PARTIES HERETO SHALL
BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND SHALL ENFORCE ALL
DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT
LAW IN THE STATE OF CALIFORNIA.

-58-







         

(vi) THE REFEREE SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO
PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE ALL ISSUES IN
ACCORDANCE WITH CALIFORNIA SUBSTANTIVE AND PROCEDURAL LAW. THE REFEREE SHALL BE
EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION
WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING MOTIONS FOR DEFAULT JUDGMENT OR
SUMMARY JUDGMENT. THE REFEREE SHALL REPORT HIS OR HER DECISION, WHICH REPORT
SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW. THE REFEREE SHALL
ISSUE A DECISION AND PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE, SECTION
644, THE REFEREE'S DECISION SHALL BE ENTERED BY THE COURT AS A JUDGMENT IN THE
SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT. THE FINAL JUDGMENT OR
ORDER FROM ANY APPEALABLE DECISION OR ORDER ENTERED BY THE REFEREE SHALL BE
FULLY APPEALABLE AS IF IT HAS BEEN ENTERED BY THE COURT. 

              
(vii) THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN A GENERAL
REFERENCE PROCEEDING PURSUANT HERETO 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 HERETO KNOWINGLY AND VOLUNTARILY AND FOR THEIR
MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION SHALL APPLY TO ANY DISPUTE
BETWEEN THEM THAT ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS. 

13.
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.


    
13.1. Assignments and Participations.


         
(a) (i)
Subject to the conditions set forth in clause (a)(ii) below, any Lender may
assign and delegate all or any portion of its rights and duties under the Loan
Documents (including the Obligations owed to it and its Revolver Commitments) to
one or more assignees (each, an "Assignee"), with the prior written
consent (such consent not be unreasonably withheld or delayed) of: 

                   
(A) Borrower; provided, that no consent of Borrower shall be required (1) if an Event
of Default has occurred and is continuing, or (2) in connection with an
assignment to a Person that is a Non-Defaulting Lender or an Affiliate (other
than natural persons) thereof; provided further, that Borrower shall be deemed
to have consented to a proposed assignment unless it objects thereto by written
notice to Agent within 10 Business Days after having received notice thereof;
and 

-59-







                   
(B) Agent, Swing Lender, and Issuing Lender. 

              
(ii) Assignments shall be subject to the following additional conditions:


                   
(A) no
assignment may be made to a natural person, 

                   
(B) no
assignment may be made to a Loan Party or an Affiliate of a Loan Party,


                   
(C) the
amount of the Revolver Commitments and the other rights and obligations of the
assigning Lender hereunder and under the other Loan Documents subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to Agent) shall be in a minimum amount
(unless waived by Agent) of $5,000,000 (except such minimum amount shall not
apply to (I) an assignment or delegation by any Lender to any other Lender, an
Affiliate of any Lender, or a Related Fund of such Lender or (II) a group of new
Lenders, each of which is an Affiliate of each other or a Related Fund of such
new Lender to the extent that the aggregate amount to be assigned to all such
new Lenders is at least $5,000,000); 

                   
(D) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement; 

                   
(E) the
parties to each assignment shall execute and deliver to Agent an Assignment and
Acceptance; provided, that Borrower and Agent may continue to deal solely and
directly with the assigning Lender in connection with the interest so assigned
to an Assignee until written notice of such assignment, together with payment
instructions, addresses, and related information with respect to the Assignee,
have been given to Borrower and Agent by such Lender and the Assignee;


                   
(F) unless
waived by Agent, the assigning Lender or Assignee has paid to Agent, for Agent's
separate account, a processing fee in the amount of $3,500; and 

                   
(G) the
assignee, if it is not a Lender, shall deliver to Agent an Administrative
Questionnaire in a form approved by Agent (the "Administrative Questionnaire").


         
(b) From
and after the date that Agent receives the executed Assignment and Acceptance
and, if applicable, payment of the required processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall be a "Lender" and shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assigning Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section
10.3) and be released from any future
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto); provided, that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender's obligations under Section
15 and Section 17.9(a). 

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          (c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(iv) such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement, (v) such
Assignee appoints and authorizes Agent to take such actions and to exercise such
powers under this Agreement and the other Loan Documents as are delegated to
Agent, by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto, and (vi) such Assignee agrees that it will
perform all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender. 

         
(d) Immediately upon Agent's receipt of the required processing fee, if
applicable, and delivery of notice to the assigning Lender pursuant to
Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Revolver Commitments arising therefrom. The Revolver
Commitment allocated to each Assignee shall reduce such Revolver Commitments of
the assigning Lender pro tanto.

         
(e) Any
Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons (a "Participant") participating interests
in all or any portion of its Obligations, its Revolver Commitment, and the other
rights and interests of that Lender (the "Originating Lender") hereunder and
under the other Loan Documents; provided, that (i) the Originating
Lender shall remain a "Lender" for all purposes of this Agreement and the other
Loan Documents and the Participant receiving the participating interest in the
Obligations, the Revolver Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a "Lender" hereunder or under
the other Loan Documents and the Originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrower,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other Loan Document, except to the extent such amendment
to, or consent or waiver with respect to this Agreement or of any other Loan
Document would (A) extend the final maturity date of the Obligations hereunder
in which such Participant is participating, (B) reduce the interest rate
applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) decreases the amount or postpones the due
dates of scheduled principal repayments or prepayments or premiums payable to
such Participant through such Lender, (v) no participation shall be sold to a
natural person, (vi) no participation shall be sold to a Loan Party or an
Affiliate of a Loan Party, and (vii) all amounts payable by Borrower hereunder
shall be determined as if such Lender had not sold such participation, except
that, if amounts outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of set
off in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement. The rights of any
Participant only shall be derivative through the Originating Lender with whom
such Participant participates and no Participant shall have any rights under
this Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Borrower, the Collateral, or otherwise in respect of the
Obligations. No Participant shall have the right to participate directly in the
making of decisions by the Lenders among themselves. 

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          (f) In connection with any such assignment or participation or proposed
assignment or participation or any grant of a security interest in, or pledge
of, its rights under and interest in this Agreement, a Lender may, subject to
the provisions of Section 17.9, disclose all documents and information which it now or
hereafter may have relating to Borrower and its Subsidiaries and their
respective businesses. 

         
(g) Any
other provision in this Agreement notwithstanding, any Lender may at any time
create a security interest in, or pledge, all or any portion of its rights under
and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under applicable law. 

          (h) Agent (as a non-fiduciary agent on behalf of Borrower) shall maintain, or
cause to be maintained, a register (the "Register") on which it enters the name
and address of each Lender as the registered owner of the Revolver Commitments
(and the principal amount thereof and stated interest thereon) held by such
Lender (each, a "Registered
Loan"). Other than in connection with an
assignment by a Lender of all or any portion of its portion of the Revolver
Commitments to an Affiliate of such Lender or a Related Fund of such Lender (i)
a Registered Loan (and the registered note, if any, evidencing the same) may be
assigned or sold in whole or in part only by registration of such assignment or
sale on the Register (and each registered note shall expressly so provide) and
(ii) any assignment or sale of all or part of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any evidencing the same), Borrower shall treat
the Person in whose name such Registered Loan (and the registered note, if any,
evidencing the same) is registered as the owner thereof for the purpose of
receiving all payments thereon and for all other purposes, notwithstanding
notice to the contrary. In the case of any assignment by a Lender of all or any
portion of its Revolver Commitments to an Affiliate of such Lender or a Related
Fund of such Lender, and which assignment is not recorded in the Register, the
assigning Lender, on behalf of Borrower, shall maintain a register comparable to
the Register.

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(i) In the
event that a Lender sells participations in the Registered Loan, such Lender, as
a non-fiduciary agent on behalf of Borrower, shall maintain (or cause to be
maintained) a register on which it enters the name of all participants in the
Registered Loans held by it (and the principal amount (and stated interest
thereon) of the portion of such Registered Loans that is subject to such
participations) (the "Participant
Register"). A Registered Loan (and the
registered note, if any, evidencing the same) may be participated in whole or in
part only by registration of such participation on the Participant Register (and
each registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register. 

         
(j) Agent
shall make a copy of the Register (and each Lender shall make a copy of its
Participant Register in the extent it has one) available for review by Borrower
from time to time as Borrower may reasonably request. 

    
13.2. Successors. This Agreement shall
bind and inure to the benefit of the respective successors and assigns of each
of the parties; provided, that Borrower may not assign this Agreement or any rights or
duties hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void ab
initio. No consent to assignment by the
Lenders shall release Borrower from its Obligations. A Lender may assign this
Agreement and the other Loan Documents and its rights and duties hereunder and
thereunder pursuant to Section
13.1
and, except as expressly required pursuant to Section 13.1, no consent or approval
by Borrower is required in connection with any such assignment. 

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14.
AMENDMENTS; WAIVERS. 

    
14.1. Amendments and Waivers.


         
(a) No
amendment, waiver or other modification of any provision of this Agreement or
any other Loan Document (other than Bank Product Agreements or the Fee Letter),
and no consent with respect to any departure by Borrower therefrom, shall be
effective unless the same shall be in writing and signed by the Required Lenders
(or by Agent at the written request of the Required Lenders) and the Loan
Parties that are party thereto and then any such
waiver or consent shall be effective, but only in the specific instance and for
the specific purpose for which given; provided, that no such waiver,
amendment, or consent shall, unless in writing and signed by all of the Lenders
directly affected thereby and all of the Loan Parties that are party thereto, do
any of the following: 

              
(i) increase the amount of or extend the expiration date of any Revolver
Commitment of any Lender or amend, modify, or eliminate the last sentence of
Section 2.4(c)(i), 

              
(ii) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document, 

              
(iii) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except (y) in connection with the
waiver of applicability of Section
2.6(c)
(which waiver shall be effective with the written consent of the Required
Lenders), and (z) that any amendment or modification of defined terms used in
the financial covenants in this Agreement shall not constitute a reduction in
the rate of interest or a reduction of fees for purposes of this clause (iii)),


              
(iv) amend,
modify, or eliminate this Section or any provision of this Agreement providing
for consent or other action by all Lenders, 

              
(v) amend,
modify, or eliminate Section
3.1 or 3.2, 

              
(vi) amend,
modify, or eliminate Section
15.11, 

              
(vii) other
than as permitted by Section
15.11, release Agent's Lien in and to all or
substantially all of the Collateral, 

              
(viii) amend, modify, or eliminate the definitions of "Required Lenders" or "Pro
Rata Share", 

              
(ix) contractually subordinate any of Agent's Liens, 

              
(x) other
than in connection with a merger, liquidation, dissolution or sale of such
Person expressly permitted by the terms hereof or the other Loan Documents,
release Borrower or any Guarantor from any obligation for the payment of money
or consent to the assignment or transfer by Borrower or any Guarantor of any of
its rights or duties under this Agreement or the other Loan Documents,


              
(xi) amend,
modify, or eliminate any of the provisions of Section 2.4(b)(i) or (ii), or 

              
(xii) amend, modify, or eliminate any of the provisions of Section 13.1 with respect
to assignments to, or participations with, Persons who are Loan Parties or
Affiliates of a Loan Party. 

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(b) No
amendment, waiver, modification, or consent shall amend, modify, waive, or
eliminate, 

              
(i) the
definition of, or any of the terms or provisions of, the Fee Letter, without the
written consent of Agent and Borrower (and shall not require the written consent
of any of the Lenders), 

              
(ii) any
provision of Section 15 pertaining to Agent, or any other rights or duties of Agent
under this Agreement or the other Loan Documents, without the written consent of
Agent, Borrower, and the Required Lenders, 

         
(c) No
amendment, waiver, modification, elimination, or consent shall amend, without
written consent of Agent, Borrower and the Required Lenders, modify, or
eliminate the definition of Borrowing Base or any of the defined terms that are
used in such definition to the extent that any such change results in more
credit being made available to Borrower based upon the Borrowing Base, but not
otherwise, or the definition of Maximum Revolver Amount, 

         
(d) No
amendment, waiver, modification, elimination, or consent shall amend, modify, or
waive any provision of this Agreement or the other Loan Documents pertaining to
Issuing Lender, or any other rights or duties of Issuing Lender or Underlying
Issuer under this Agreement or the other Loan Documents, without the written
consent of Issuing Lender, Agent, Borrower, and the Required Lenders,


         
(e) No
amendment, waiver, modification, elimination, or consent shall amend, modify, or
waive any provision of this Agreement or the other Loan Documents pertaining to
Swing Lender, or any other rights or duties of Swing Lender under this Agreement
or the other Loan Documents, without the written consent of Swing Lender, Agent,
Borrower, and the Required Lenders, 

         
(f) Anything in this Section
14.1 to the contrary notwithstanding, (i) any
amendment, modification, elimination, waiver, consent, termination, or release
of, or with respect to, any provision of this Agreement or any other Loan
Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of Borrower,
shall not require consent by or the agreement of any Loan Party, and (ii) any
amendment, waiver, modification, elimination, or consent of or with respect to
any provision of this Agreement or any other Loan Document may be entered into
without the consent of, or over the objection of, any Defaulting Lender.


    
14.2. Replacement of Certain Lenders.


         
(a) If (i)
any action to be taken by the Lender Group or Agent hereunder requires the
consent, authorization, or agreement of all Lenders or all Lenders affected
thereby and if such action has received the consent, authorization, or agreement
of the Required Lenders but not of all Lenders or all Lenders affected thereby,
or (ii) any Lender makes a claim for compensation under Section 16, then Borrower
or Agent, upon at least 5 Business Days prior irrevocable notice, may
permanently replace any Lender that failed to give its consent, authorization,
or agreement (a "Non-Consenting
Lender") or any Lender that made a claim for
compensation (a "Tax Lender") with one or more Replacement Lenders, and the
Non-Consenting Lender or Tax Lender, as applicable, shall have no right to
refuse to be replaced hereunder. Such notice to replace the Non-Consenting
Lender or Tax Lender, as applicable, shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.

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(b) Prior
to the effective date of such replacement, the Non-Consenting Lender or Tax
Lender, as applicable, and each Replacement Lender shall execute and deliver an
Assignment and Acceptance, subject only to the Non-Consenting Lender or Tax
Lender, as applicable, being repaid in full its share of the outstanding
Obligations (without any premium or penalty of any kind whatsoever, but
including (i) all interest, fees and other amounts that may be due in payable in
respect thereof, and (ii) an assumption of its Pro Rata Share of participations
in the Letters of Credit). If the Non-Consenting Lender or Tax Lender, as
applicable, shall refuse or fail to execute and deliver any such Assignment and
Acceptance prior to the effective date of such replacement, Agent may, but shall
not be required to, execute and deliver such Assignment and Acceptance in the
name or and on behalf of the Non-Consenting Lender or Tax Lender, as applicable,
and irrespective of whether Agent executes and delivers such Assignment and
Acceptance, the Non-Consenting Lender or Tax Lender, as applicable, shall be
deemed to have executed and delivered such Assignment and Acceptance. The
replacement of any Non-Consenting Lender or Tax Lender, as applicable, shall be
made in accordance with the terms of Section
13.1. Until such time as one or more
Replacement Lenders shall have acquired all of the Obligations, the Revolver
Commitments, and the other rights and obligations of the Non-Consenting Lender
or Tax Lender, as applicable, hereunder and under the other Loan Documents, the
Non-Consenting Lender or Tax Lender, as applicable, shall remain obligated to
make the Non-Consenting Lender's or Tax Lender's, as applicable, Pro Rata Share
of Revolving Loans and to purchase a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of participations in such Letters of
Credit. 

    
14.3. No Waivers; Cumulative Remedies.
No failure by Agent or any Lender to exercise any right, remedy, or option under
this Agreement or any other Loan Document, or delay by Agent or any Lender in
exercising the same, will operate as a waiver thereof. No waiver by Agent or any
Lender will be effective unless it is in writing, and then only to the extent
specifically stated. No waiver by Agent or any Lender on any occasion shall
affect or diminish Agent's and each Lender's rights thereafter to require strict
performance by Borrower of any provision of this Agreement. Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have. 

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15.
AGENT; THE LENDER GROUP. 

    
15.1. Appointment and Authorization of Agent. Each Lender hereby designates and appoints WFCF as its agent under this
Agreement and the other Loan Documents and each Lender hereby irrevocably
authorizes (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to designate, appoint, and authorize) Agent to execute
and deliver each of the other Loan Documents on its behalf and to take such
other action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent agrees to act as agent for and on behalf of the
Lenders (and the Bank Product Providers) on the conditions contained in this
Section 15.
Any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Loan
Documents, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender (or Bank Product Provider), and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent. Without
limiting the generality of the foregoing, the use of the term "agent" in this
Agreement or the other Loan Documents with reference to Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only a
representative relationship between independent contracting parties. Each Lender
hereby further authorizes (and by entering into a Bank Product Agreement, each
Bank Product Provider shall be deemed to authorize) Agent to act as the secured
party under each of the Loan Documents that create a Lien on any item of
Collateral. Except as expressly otherwise provided in this Agreement, Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
payments and proceeds of Collateral, and related matters, (b) execute or file
any and all financing or similar statements or notices, amendments, renewals,
supplements, documents, instruments, proofs of claim, notices and other written
agreements with respect to the Loan Documents, (c) make Revolving Loans, for
itself or on behalf of Lenders, as provided in the Loan Documents, (d)
exclusively receive, apply, and distribute payments and proceeds of the
Collateral as provided in the Loan Documents, (e) open and maintain such bank
accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes,
(f) perform, exercise, and enforce any and all other rights and remedies of the
Lender Group with respect to Borrower or its Subsidiaries, the Obligations, the
Collateral, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents. 

    
15.2. Delegation of Duties. Agent may
execute any of its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys' in fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. Agent shall not be
responsible for the negligence or misconduct of any agent or attorney in fact
that it selects as long as such selection was made without gross negligence or
willful misconduct. 

    
15.3. Liability of Agent. None of the
Agent-Related Persons shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to any of
the Lenders (or Bank Product Providers) for any recital, statement,
representation or warranty made by Borrower or any of its Subsidiaries or
Affiliates, or any officer or director thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of Borrower or its Subsidiaries or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lenders
(or Bank Product Providers) to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or
properties of Borrower or its Subsidiaries.

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15.4. Reliance by Agent. Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
telefacsimile or other electronic method of transmission, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent, or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to Borrower or counsel to any Lender), independent accountants and other experts
selected by Agent. Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless Agent shall
first receive such advice or concurrence of the Lenders as it deems appropriate
and until such instructions are received, Agent shall act, or refrain from
acting, as it deems advisable. If Agent so requests, it shall first be
indemnified to its reasonable satisfaction by the Lenders (and, if it so elects,
the Bank Product Providers) against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Lenders (and
Bank Product Providers). 

    
15.5. Notice of Default or Event of Default. Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest, fees, and expenses required to be paid to Agent
for the account of the Lenders and, except with respect to Events of Default of
which Agent has actual knowledge, unless Agent shall have received written
notice from a Lender or Borrower referring to this Agreement, describing such
Default or Event of Default, and stating that such notice is a "notice of
default." Agent promptly will notify the Lenders of its receipt of any such
notice or of any Event of Default of which Agent has actual knowledge. If any
Lender obtains actual knowledge of any Event of Default, such Lender promptly
shall notify the other Lenders and Agent of such Event of Default. Each Lender
shall be solely responsible for giving any notices to its Participants, if any.
Subject to Section 15.4, Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Required Lenders in accordance with
Section 9;
provided,
that unless and until Agent has received any such request, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.


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15.6. Credit Decision. Each Lender (and
Bank Product Provider) acknowledges that none of the Agent-Related Persons has
made any representation or warranty to it, and that no act by Agent hereinafter
taken, including any review of the affairs of Borrower and its Subsidiaries or
Affiliates, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender (or Bank Product Provider). Each Lender
represents (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to represent) to Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such due diligence,
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrower or any other
Person party to a Loan Document, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision to
enter into this Agreement and to extend credit to Borrower. Each Lender also
represents (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to represent) that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower or any
other Person party to a Loan Document. Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by Agent,
Agent shall not have any duty or responsibility to provide any Lender (or Bank
Product Provider) with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of Borrower or any other Person party to a Loan Document that
may come into the possession of any of the Agent-Related Persons. Each Lender
acknowledges (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that Agent does not have any duty or
responsibility, either initially or on a continuing basis (except to the extent,
if any, that is expressly specified herein) to provide such Lender (or Bank
Product Provider) with any credit or other information with respect to Borrower,
its Affiliates or any of their respective business, legal, financial or other
affairs, and irrespective of whether such information came into Agent's or its
Affiliates' or representatives' possession before or after the date on which
such Lender became a party to this Agreement (or such Bank Product Provider
entered into a Bank Product Agreement). 

    
15.7. Costs and Expenses; Indemnification. Agent may incur and pay Lender Group Expenses to the extent Agent
reasonably deems necessary or appropriate for the performance and fulfillment of
its functions, powers, and obligations pursuant to the Loan Documents, including
court costs, attorneys' fees and expenses, fees and expenses of financial
accountants, advisors, consultants, and appraisers, costs of collection by
outside collection agencies, auctioneer fees and expenses, and costs of security
guards or insurance premiums paid to maintain the Collateral, whether or not
Borrower is obligated to reimburse Agent or Lenders for such expenses pursuant
to this Agreement or otherwise. Agent is authorized and directed to deduct and
retain sufficient amounts from payments or proceeds of the Collateral received
by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to
the distribution of any amounts to Lenders (or Bank Product Providers). In the
event Agent is not reimbursed for such costs and expenses by Borrower or its
Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay
to Agent such Lender's ratable thereof. Whether or not the transactions
contemplated hereby are consummated, each of the Lenders, on a ratable basis,
shall indemnify and defend the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrower and without limiting the obligation of
Borrower to do so) from and against any and all Indemnified Liabilities;
provided, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make a Revolving Loan or
other extension of credit hereunder. Without limitation of the foregoing, each
Lender shall reimburse Agent upon demand for such Lender's ratable share of any
costs or out of pocket expenses (including attorneys', accountants, advisors,
and consultants fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Loan Document to the extent that Agent is not reimbursed for such
expenses by or on behalf of Borrower. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of Agent.

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15.8. Agent in Individual Capacity. WFCF
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, provide Bank Products to, acquire Equity Interests in,
and generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with Borrower and its Subsidiaries and
Affiliates and any other Person party to any Loan Document as though WFCF were
not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group. The other members of the Lender Group
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, pursuant to such activities, WFCF
or its Affiliates may receive information regarding Borrower or its Affiliates
or any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders (or Bank Product
Providers), and the Lenders acknowledge (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in
such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include WFCF in its individual capacity.


    
15.9. Successor Agent. Agent may resign
as Agent upon 30 days (10 days if an Event of Default has occurred and is
continuing) prior written notice to the Lenders (unless such notice is waived by
the Required Lenders) and Borrower (unless such notice is waived by Borrower or
an Event of Default exists) and without any notice to the Bank Product
Providers. If Agent resigns under this Agreement, the Required Lenders shall be
entitled, with (so long as no Event of Default has occurred and is continuing)
the consent of Borrower (such consent not to be unreasonably withheld, delayed,
or conditioned), appoint a successor Agent for the Lenders (and the Bank Product
Providers). If, at the time that Agent's resignation is effective, it is acting
as Issuing Lender or the Swing Lender, such resignation shall also operate to
effectuate its resignation as Issuing Lender or the Swing Lender, as applicable,
and it shall automatically be relieved of any further obligation to issue
Letters of Credit, to cause the Underlying Issuer to issue Letters of Credit, or
to make Swing Loans. If no successor Agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, after consulting with the
Lenders and Borrower, a successor Agent. If Agent has materially breached or
failed to perform any material provision of this Agreement or of applicable law,
the Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders with (so long as no Event of Default has
occurred and is continuing) the consent of Borrower (such consent not to be
unreasonably withheld, delayed, or conditioned). In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 15 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor Agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of Agent
hereunder until such time, if any, as the Lenders appoint a successor Agent as
provided for above.

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15.10. Lender in Individual Capacity. Any
Lender and its respective Affiliates may make loans to, issue letters of credit
for the account of, accept deposits from, provide Bank Products to, acquire
Equity Interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though such Lender were not a Lender hereunder without notice to or consent of
the other members of the Lender Group (or the Bank Product Providers). The other
members of the Lender Group acknowledge (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that,
pursuant to such activities, such Lender and its respective Affiliates may
receive information regarding Borrower or its Affiliates or any other Person
party to any Loan Documents that is subject to confidentiality obligations in
favor of Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them. 

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15.11. Collateral Matters. 

         
(a) The
Lenders hereby irrevocably authorize (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to authorize) Agent to
release any Lien on any Collateral (i) upon the termination of the Revolver
Commitments and payment and satisfaction in full by Borrower of all of the
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Borrower certifies to
Agent that the sale or disposition is permitted under Section 6.4 (and Agent may rely
conclusively on any such certificate, without further inquiry), (iii)
constituting property in which Borrower or its Subsidiaries owned no interest at
the time Agent's Lien was granted nor at any time thereafter, or (iv)
constituting property leased to Borrower or its Subsidiaries under a lease that
has expired or is terminated in a transaction permitted under this Agreement.
The Loan Parties and the Lenders hereby irrevocably authorize (and by entering
into a Bank Product Agreement, each Bank Product
Provider shall be deemed to authorize) Agent, based upon the instruction of the
Required Lenders, to (a) consent to, credit bid or purchase (either directly or
through one or more acquisition vehicles) all or any portion of the Collateral
at any sale thereof conducted under the provisions of the Bankruptcy Code,
including under Section 363 of the Bankruptcy Code, (b) credit bid or purchase
(either directly or through one or more acquisition vehicles) all or any portion
of the Collateral at any sale or other disposition thereof conducted under the
provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the
Code, or (c) credit bid or purchase (either directly or through one or more
acquisition vehicles) all or any portion of the Collateral at any other sale or
foreclosure conducted by Agent (whether by judicial action or otherwise) in
accordance with applicable law. In connection with any such credit bid or
purchase, (i) the Obligations owed to the Lenders and the Bank Product Providers
shall be entitled to be, and shall be, credit bid on a ratable basis (with
Obligations with respect to contingent or unliquidated claims being estimated
for such purpose if the fixing or liquidation thereof would not unduly delay the
ability of Agent to credit bid or purchase at such sale or other disposition of
the Collateral and, if such claims cannot be estimated without unduly delaying
the ability of Agent to credit bid, then such claims shall be disregarded, not
credit bid, and not entitled to any interest in the asset or assets purchased by
means of such credit bid) and the Lenders and the Bank Product Providers whose
Obligations are credit bid shall be entitled to receive interests (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate
amount of Obligations so credit bid) in the asset or assets so purchased (or in
the Equity Interests of the acquisition vehicle or vehicles that are used to
consummate such purchase), and (ii) Agent, based upon the instruction of the
Required Lenders, may accept non-cash consideration, including debt and equity
securities issued by such acquisition vehicle or vehicles and in connection
therewith Agent may reduce the Obligations owed to the Lenders and the Bank
Product Providers (ratably based upon the proportion of their Obligations credit
bid in relation to the aggregate amount of Obligations so credit bid) based upon
the value of such non-cash consideration. Except as provided above, Agent will
not execute and deliver a release of any Lien on any Collateral without the
prior written authorization of (y) if the release is of all or substantially all
of the Collateral, all of the Lenders (without requiring the authorization of
the Bank Product Providers), or (z) otherwise, the Required Lenders (without
requiring the authorization of the Bank Product Providers). Upon request by
Agent or Borrower at any time, the Lenders will (and if so requested, the Bank
Product Providers will) confirm in writing Agent's authority to release any such
Liens on particular types or items of Collateral pursuant to this
Section 15.11; provided, that (1) Agent shall not be required to execute any document necessary
to evidence such release on terms that, in Agent's opinion, would expose Agent
to liability or create any obligation or entail any consequence other than the
release of such Lien without recourse, representation, or warranty, and (2) such
release shall not in any manner discharge, affect, or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
any Loan Party in respect of) all interests retained by any Loan Party,
including, the proceeds of any sale, all of which shall continue to constitute
part of the Collateral. The Lenders further hereby irrevocably authorize (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to authorize) Agent, at its option and in its sole discretion, to
subordinate any Lien granted to or held by Agent under any Loan Document to the
holder of any Permitted Lien on such property if such Permitted Lien secures
Permitted Purchase Money Indebtedness. 

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(b) Agent
shall have no obligation whatsoever to any of the Lenders (or the Bank Product
Providers) to assure that the Collateral exists or is owned by Borrower or its
Subsidiaries or is cared for, protected, or insured or has been encumbered, or
that Agent's Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority, or
whether to impose, maintain, reduce, or eliminate any particular reserve
hereunder or whether the amount of any such reserve is appropriate or not, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent's own interest in the Collateral in its capacity as
one of the Lenders and that Agent shall have no other duty or liability
whatsoever to any Lender (or Bank Product Provider) as to any of the foregoing,
except as otherwise provided herein. 

    
15.12. Restrictions on Actions by Lenders; Sharing of
Payments. 

         
(a) Each of
the Lenders agrees that it shall not, without the express written consent of
Agent, and that it shall, to the extent it is lawfully entitled to do so, upon
the written request of Agent, set off against the Obligations, any amounts owing
by such Lender to Borrower or its Subsidiaries or any deposit accounts of
Borrower or its Subsidiaries now or hereafter maintained with such Lender. Each
of the Lenders further agrees that it shall not, unless specifically requested
to do so in writing by Agent, take or cause to be taken any action, including,
the commencement of any legal or equitable proceedings to enforce any Loan
Document against Borrower or any Guarantor or to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral. 

         
(b) If, at
any time or times any Lender shall receive (i) by payment, foreclosure, setoff,
or otherwise, any proceeds of Collateral or any payments with respect to the
Obligations, except for any such proceeds or payments received by such Lender
from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent
in excess of such Lender's Pro Rata Share of all such distributions by Agent,
such Lender promptly shall (A) turn the same over to Agent, in kind, and with
such endorsements as may be required to negotiate the same to Agent, or in
immediately available funds, as applicable, for the account of all of the
Lenders and for application to the Obligations in accordance with the applicable
provisions of this Agreement, or (B) purchase, without recourse or warranty, an
undivided interest and participation in the Obligations owed to the other
Lenders so that such excess payment received shall be applied ratably as among
the Lenders in accordance with their Pro Rata Shares; provided, that to the extent that such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor shall
be returned to such purchasing party, but without interest except to the extent
that such purchasing party is required to pay interest in connection with the
recovery of the excess payment. 

    
15.13. Agency for Perfection. Agent
hereby appoints each other Lender (and each Bank Product Provider) as its agent
(and each Lender hereby accepts (and by entering into a Bank Product Agreement,
each Bank Product Provider shall be deemed to accept) such appointment) for the
purpose of perfecting Agent's Liens in assets which, in accordance with Article
8 or Article 9, as applicable, of the Code can be perfected by possession or
control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent's request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent's instructions.

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15.14. Payments by Agent to the Lenders.
All payments to be made by Agent to the Lenders (or Bank Product Providers)
shall be made by bank wire transfer of immediately available funds pursuant to
such wire transfer instructions as each party may designate for itself by
written notice to Agent. Concurrently with each such payment, Agent shall
identify whether such payment (or any portion thereof) represents principal,
premium, fees, or interest of the Obligations. 

    
15.15. Concerning the Collateral and Related Loan Documents. Each member of the Lender Group authorizes and directs Agent
to enter into this Agreement and the other Loan Documents. Each member of the
Lender Group agrees (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to agree) that any action taken by Agent in
accordance with the terms of this Agreement or the other Loan Documents relating
to the Collateral and the exercise by Agent of its powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto,
shall be binding upon all of the Lenders (and such Bank Product Provider).


    
15.16. Financial Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and
Information. By becoming a party to this
Agreement, each Lender: 

         
(a) is
deemed to have requested that Agent furnish such Lender, promptly after it
becomes available, a copy of each field examination report respecting Borrower
or its Subsidiaries (each, a "Report") prepared by or at the request
of Agent, and Agent shall so furnish each Lender with such Reports, 

         
(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report, 

         
(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any field
examination will inspect only specific information regarding Borrower and its
Subsidiaries and will rely significantly upon Borrower's and its Subsidiaries'
books and records, as well as on representations of Borrower's personnel,


         
(d) agrees
to keep all Reports and other material, non-public information regarding
Borrower and its Subsidiaries and their operations, assets, and existing and
contemplated business plans in a confidential manner in accordance with
Section 17.9, and 

         
(e) without
limiting the generality of any other indemnification provision contained in this
Agreement, agrees: (i) to hold Agent and any other Lender preparing a Report
harmless from any action the indemnifying Lender may take or fail to take or any
conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying
Lender has made or may make to Borrower, or the indemnifying Lender's
participation in, or the indemnifying Lender's purchase of, a loan or loans of
Borrower, and (ii) to pay and protect, and indemnify, defend and hold Agent, and
any such other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses, and other amounts (including,
attorneys' fees and costs) incurred by Agent and any such other Lender preparing
a Report as the direct or indirect result of any third parties who might obtain
all or part of any Report through the indemnifying Lender.

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(f) In
addition to the foregoing, (x) any Lender may from time to time request of Agent
in writing that Agent provide to such Lender a copy of any report or document
provided by Borrower or its Subsidiaries to Agent that has not been
contemporaneously provided by Borrower or such Subsidiary to such Lender, and,
upon receipt of such request, Agent promptly shall provide a copy of same to
such Lender, (y) to the extent that Agent is entitled, under any provision of
the Loan Documents, to request additional reports or information from Borrower
or its Subsidiaries, any Lender may, from time to time, reasonably request Agent
to exercise such right as specified in such Lender's notice to Agent, whereupon
Agent promptly shall request of Borrower the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from Borrower or
such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and
(z) any time that Agent renders to Borrower a statement regarding the Loan
Account, Agent shall send a copy of such statement to each Lender. 

    
15.17. Several Obligations; No Liability.
Notwithstanding that certain of the Loan Documents now or hereafter may have
been or will be executed only by or in favor of Agent in its capacity as such,
and not by or in favor of the Lenders, any and all obligations on the part of
Agent (if any) to make any credit available hereunder shall constitute the
several (and not joint) obligations of the respective Lenders on a ratable
basis, according to their respective Revolver Commitments, to make an amount of
such credit not to exceed, in principal amount, at any one time outstanding, the
amount of their respective Revolver Commitments. Nothing contained herein shall
confer upon any Lender any interest in, or subject any Lender to any liability
for, or in respect of, the business, assets, profits, losses, or liabilities of
any other Lender. Each Lender shall be solely responsible for notifying its
Participants of any matters relating to the Loan Documents to the extent any
such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender. Except as provided in
Section 15.7, no member of the Lender Group shall have any liability for the acts of
any other member of the Lender Group. No Lender shall be responsible to Borrower
or any other Person for any failure by any other Lender (or Bank Product
Provider) to fulfill its obligations to make credit available hereunder, nor to
advance for such Lender (or Bank Product Provider) or on its behalf, nor to take
any other action on behalf of such Lender (or Bank Product Provider) hereunder
or in connection with the financing contemplated herein. 

16.
WITHHOLDING TAXES. 

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

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     16.2. Exemptions.

         
(a) If a Lender or Participant is entitled to claim an
exemption or reduction from United States withholding tax, such Lender or
Participant agrees with and in favor of Agent, to deliver to Agent (or, in the
case of a Participant, to the Lender granting the participation only) one of the
following before receiving its first payment under this Agreement: 

              
(i) if such Lender or Participant is entitled to claim
an exemption from United States withholding tax pursuant to the portfolio
interest exception, (A) a statement of the Lender or Participant, signed under
penalty of perjury, that it is not a (I) a "bank" as described in Section
881(c)(3)(A) of the IRC, (II) a 10% shareholder of Borrower (within the meaning
of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation
related to Borrower within the meaning of Section 864(d)(4) of the IRC, and (B)
a properly completed and executed IRS Form W-8BEN or Form W-8IMY (with proper
attachments); 

              
(ii) if such Lender or Participant is entitled to claim
an exemption from, or a reduction of, withholding tax under a United States tax
treaty, a properly completed and executed copy of IRS Form W-8BEN; 

              
(iii) if such Lender or Participant is entitled to claim
that interest paid under this Agreement is exempt from United States withholding
tax because it is effectively connected with a United States trade or business
of such Lender, a properly completed and executed copy of IRS Form W-8ECI;


              
(iv) if such Lender or Participant is entitled to claim
that interest paid under this Agreement is exempt from United States withholding
tax because such Lender or Participant serves as an intermediary, a properly
completed and executed copy of IRS Form W-8IMY (with proper attachments); or


              
(v) a properly completed and executed copy of any
other form or forms, including IRS Form W-9, as may be required under the IRC or
other laws of the United States as a
condition to exemption from, or reduction of, United States withholding or
backup withholding tax.

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          (b)
Each Lender or Participant shall
provide new forms (or successor forms) upon the expiration or obsolescence of
any previously delivered forms and to promptly notify Agent (or, in the case of
a Participant, to the Lender granting the participation only) of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction. 

         
(c) If a Lender or Participant claims an exemption
from withholding tax in a jurisdiction other than the United States, such Lender
or such Participant agrees with and in favor of Agent, to deliver to Agent (or,
in the case of a Participant, to the Lender granting the participation only) any
such form or forms, as may be required under the laws of such jurisdiction as a
condition to exemption from, or reduction of, foreign withholding or backup
withholding tax before receiving its first payment under this Agreement, but
only if such Lender or such Participant is legally able to deliver such forms,
provided, that nothing in this Section 16.2(c) shall require a Lender or Participant to disclose
any information that it deems to be confidential (including without limitation,
its tax returns). Each Lender and each Participant shall provide new forms (or
successor forms) upon the expiration or obsolescence of any previously delivered
forms and to promptly notify Agent (or, in the case of a Participant, to the
Lender granting the participation only) of any change in circumstances which
would modify or render invalid any claimed exemption or reduction. 

         
(d) If a Lender or Participant claims exemption from,
or reduction of, withholding tax and such Lender or Participant sells, assigns,
grants a participation in, or otherwise transfers all or part of the Obligations
of Borrower to such Lender or Participant, such Lender or Participant agrees to
notify Agent of the percentage amount in which it is no longer the beneficial
owner of Obligations of Borrower to such Lender or Participant. To the extent of
such percentage amount, Agent will treat such Lender's or such Participant's
documentation provided pursuant to Section 16.2(a) or
16.2(c) as no longer valid. With respect to such
percentage amount, such Participant or Assignee may provide new documentation,
pursuant to Section
16.2(a) or 16.2(c), if applicable; if such documentation is not provided, such Participant
or Assignee (and such Lender with respect to such percentage amount) shall not
be entitled to the benefits of this Section 16. Borrower agrees that each
Participant shall be entitled to the benefits of this Section 16 with respect to its participation in any portion of the Revolver
Commitments and the Obligations so long as such Participant complies with the
obligations set forth in this Section 16 with respect
thereto and Borrower and Agent are notified of such participation. 

     16.3. Reductions.


         
(a) If a Lender or a Participant is entitled to a
reduction in the applicable withholding tax, Agent (or, in the case of a
Participant, to the Lender granting the participation) may withhold from any
interest payment to such Lender or such Participant an amount equivalent to the
applicable withholding tax after taking into account such reduction. If the
forms or other documentation required by Section 16.2(a) or
16.2(c) are not delivered to Agent (or, in the case of a
Participant, to the Lender granting the participation), then Agent (or, in the
case of a Participant, to the Lender granting the participation) may withhold
from any interest payment to such Lender or
such Participant not providing such forms or other documentation an amount
equivalent to the applicable withholding tax. 

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          (b)
If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that Agent
(or, in the case of a Participant, to the Lender granting the participation) did
not properly withhold tax from amounts paid to or for the account of any Lender
or any Participant due to a failure on the part of the Lender or any Participant
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Agent (or such Participant failed to notify
the Lender granting the participation) of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Lender shall indemnify and hold Agent harmless (or,
in the case of a Participant, such Participant shall indemnify and hold the
Lender granting the participation harmless) for all amounts paid, directly or
indirectly, by Agent (or, in the case of a Participant, to the Lender granting
the participation), as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
(or, in the case of a Participant, to the Lender granting the participation
only) under this Section
16, together with all costs and
expenses (including attorneys' fees and expenses). The obligation of the Lenders
and the Participants under this subsection shall survive the payment of all
Obligations and the resignation or replacement of Agent. 

     16.4. Refunds. If Agent or a
Lender determines, in its sole discretion, that it has received a refund of any
Indemnified Taxes to which Borrower has paid additional amounts pursuant to this
Section 16, so long as no Default or Event of Default has
occurred and is continuing, it shall pay over such refund to Borrower (but only
to the extent of payments made, or additional amounts paid, by Borrower under
this Section 16 with respect to Indemnified Taxes giving rise to
such a refund), net of all out-of-pocket expenses of Agent or such Lender and
without interest (other than any interest paid by the applicable Governmental
Authority with respect to such a refund); provided, that Borrower, upon the
request of Agent or such Lender, agrees to repay the amount paid over to
Borrower (plus any penalties, interest or other charges, imposed by the
applicable Governmental Authority, other than such penalties, interest or other
charges imposed as a result of the willful misconduct or gross negligence of
Agent hereunder) to Agent or such Lender in the event Agent or such Lender is
required to repay such refund to such Governmental Authority. Notwithstanding
anything in this Agreement to the contrary, this Section 16 shall not be construed to require Agent or any Lender to make available
its tax returns (or any other information which it deems confidential) to
Borrower or any other Person. 

17. GENERAL PROVISIONS. 

     17.1. Effectiveness. This
Agreement shall be binding and deemed effective when executed by Borrower,
Agent, and each Lender whose signature is provided for on the signature pages
hereof. 

     17.2. Section Headings.
Headings and numbers have been set forth herein for convenience only. Unless the
contrary is compelled by the context, everything contained in each Section
applies equally to this entire Agreement. 

-78- 







     17.3. Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto. 

     17.4. Severability of Provisions. Each provision of this Agreement shall be severable from every other
provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision. 

     17.5. Bank Product Providers. Each Bank Product Provider shall be deemed a third party beneficiary
hereof and of the provisions of the other Loan Documents for purposes of any
reference in a Loan Document to the parties for whom Agent is acting. Agent
hereby agrees to act as agent for such Bank Product Providers and, by virtue of
entering into a Bank Product Agreement, the applicable Bank Product Provider
shall be automatically deemed to have appointed Agent as its agent and to have
accepted the benefits of the Loan Documents; it being understood and agreed that
the rights and benefits of each Bank Product Provider under the Loan Documents
consist exclusively of such Bank Product Provider's being a beneficiary of the
Liens and security interests (and, if applicable, guarantees) granted to Agent
and the right to share in payments and collections out of the Collateral as more
fully set forth herein. In addition, each Bank Product Provider, by virtue of
entering into a Bank Product Agreement, shall be automatically deemed to have
agreed that Agent shall have the right, but shall have no obligation, to
establish, maintain, relax, or release reserves in respect of the Bank Product
Obligations and that if reserves are established there is no obligation on the
part of Agent to determine or insure whether the amount of any such reserve is
appropriate or not. In connection with any such distribution of payments or
proceeds of Collateral, Agent shall be entitled to assume no amounts are due or
owing to any Bank Product Provider unless such Bank Product Provider has
provided a written certification (setting forth a reasonably detailed
calculation) to Agent as to the amounts that are due and owing to it and such
written certification is received by Agent a reasonable period of time prior to
the making of such distribution. Agent shall have no obligation to calculate the
amount due and payable with respect to any Bank Products, but may rely upon the
written certification of the amount due and payable from the applicable Bank
Product Provider. In the absence of an updated certification, Agent shall be
entitled to assume that the amount due and payable to the applicable Bank
Product Provider is the amount last certified to Agent by such Bank Product
Provider as being due and payable (less any distributions made to such Bank
Product Provider on account thereof). Borrower may obtain Bank Products from any
Bank Product Provider, although Borrower is not required to do so. Borrower
acknowledges and agrees that no Bank Product Provider has committed to provide
any Bank Products and that the providing of Bank Products by any Bank Product
Provider is in the sole and absolute discretion of such Bank Product Provider.
Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no provider or holder of any Bank Product shall have any voting or
approval rights hereunder (or be deemed a Lender) solely by virtue of its status
as the provider or holder of such agreements or products or the Obligations
owing thereunder, nor shall the consent of any such provider or holder be
required (other than in their capacities as Lenders, to the extent applicable)
for any matter hereunder or under any of the other Loan Documents, including as
to any matter relating to the Collateral or the release of Collateral or
Guarantors. 

-79- 







     17.6. Debtor-Creditor Relationship. The relationship between the Lenders and Agent,
on the one hand, and the Loan Parties, on the other hand, is solely that of
creditor and debtor. No member of the Lender Group has (or shall be deemed to
have) any fiduciary relationship or duty to any Loan Party arising out of or in
connection with the Loan Documents or the transactions contemplated thereby, and
there is no agency or joint venture relationship between the members of the
Lender Group, on the one hand, and the Loan Parties, on the other hand, by
virtue of any Loan Document or any transaction contemplated therein. 

     17.7. Counterparts; Electronic Execution. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
Delivery of an executed counterpart of this Agreement by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this Agreement.
The foregoing shall apply to each other Loan Document mutatis mutandis. 

     17.8. Revival and Reinstatement of Obligations; Certain
Waivers. 

         
(a) If the incurrence or payment of the Obligations by
Borrower or Guarantor or the transfer to the Lender Group of any property should
for any reason subsequently be asserted, or declared, to be void or voidable
under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (each, a "Voidable
Transfer"), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the advice of counsel, then, as to any such
Voidable Transfer, or the amount thereof that the Lender Group is required or
elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys' fees of the Lender Group related thereto, the liability of Borrower
or Guarantor automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made. 

         
(b) Anything to the contrary contained herein
notwithstanding, if Agent or any Lender accepts a guaranty of only a portion of
the Obligations pursuant to any guaranty, Borrower hereby waives its right under
Section 2822(a) of the California Civil Code or any similar laws of any other
applicable jurisdiction to designate the portion of the Obligations satisfied by
the applicable guarantor's partial payment. 


-80- 








     17.9. Confidentiality.


         
(a) Agent and Lenders each individually (and not
jointly or jointly and severally) agree that material, non-public information
regarding Borrower and its Subsidiaries, their operations, assets, and existing
and contemplated business plans ("Confidential Information") shall be treated by Agent and the Lenders in a
confidential manner, and shall not be disclosed by Agent and the Lenders to
Persons who are not parties to this Agreement, except: (i) to attorneys' for and
other advisors, accountants, auditors, and consultants to any member of the
Lender Group and to employees, directors and officers of any member of the
Lender Group (the Persons in this clause (i), "Lender Group Representatives") on a "need to know" basis in connection with
this Agreement and the transactions contemplated hereby and on a confidential
basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group
(including the Bank Product Providers), provided that any such Subsidiary or
Affiliate shall have agreed to receive such information hereunder subject to the
terms of this Section
17.9, (iii) as may be required by
regulatory authorities so long as such authorities are informed of the
confidential nature of such information, (iv) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation;
provided that (x) prior to any disclosure under this
clause (iv), the disclosing party agrees to provide Borrower with prior notice
thereof, to the extent that it is practicable to do so and to the extent that
the disclosing party is permitted to provide such prior notice to Borrower
pursuant to the terms of the applicable statute, decision, or judicial or
administrative order, rule, or regulation and (y) any disclosure under this
clause (iv) shall be limited to the portion of the Confidential Information as
may be required by such statute, decision, or judicial or administrative order,
rule, or regulation, (v) as may be agreed to in advance in writing by Borrower,
(vi) as requested or required by any Governmental Authority pursuant to any
subpoena or other legal process, provided, that, (x) prior to any disclosure
under this clause (vi) the disclosing party agrees to provide Borrower with
prior written notice thereof, to the extent that it is practicable to do so and
to the extent that the disclosing party is permitted to provide such prior
written notice to Borrower pursuant to the terms of the subpoena or other legal
process and (y) any disclosure under this clause (vi) shall be limited to the
portion of the Confidential Information as may be required by such Governmental
Authority pursuant to such subpoena or other legal process, (vii) as to any such
information that is or becomes generally available to the public (other than as
a result of prohibited disclosure by Agent or the Lenders or the Lender Group
Representatives), (viii) in connection with any assignment, participation or
pledge of any Lender's interest under this Agreement, provided that prior to
receipt of Confidential Information any such assignee, participant, or pledgee
shall have agreed in writing to receive such Confidential Information hereunder
subject to the terms of this Section, (ix) in connection with any litigation or
other adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such
parties under this Agreement or the other Loan Documents; provided, that, prior to any disclosure to any Person (other than any Loan Party,
Agent, any Lender, any of their respective Affiliates, or their respective
counsel) under this clause (ix) with respect to litigation involving any Person
(other than Borrower, Agent, any Lender, any of their respective Affiliates, or
their respective counsel), the disclosing party agrees to provide Borrower with
prior written notice thereof, and (x) in connection with, and to the extent
reasonably necessary for, the exercise of any secured creditor remedy under this
Agreement or under any other Loan Document. 

          (b)
Anything in this Agreement to the
contrary notwithstanding, Agent may disclose information concerning the terms
and conditions of this Agreement and the other Loan Documents to loan
syndication and pricing reporting services or in its marketing or promotional
materials, with such information to consist of deal terms and other information
customarily found in such publications or marketing or promotional materials and
may otherwise use the name, logos, and other insignia of Borrower or the other
Loan Parties and the Revolver Commitments provided hereunder in any "tombstone"
or other advertisements, on its website or in other marketing materials of
Agent. 

-81- 







          (c)
The Loan Parties hereby acknowledge
that Agent or its Affiliates may make available to the Lenders materials or
information provided by or on behalf of Borrower hereunder (collectively,
"Borrower
Materials") by posting the
Borrower Materials on IntraLinks, SyndTrak or another similar electronic system
(the "Platform") and certain of the Lenders may be "public-side" Lenders (i.e.,
Lenders that do not wish to receive material non-public information with respect
to the Loan Parties or their securities) (each, a "Public Lender"). The Loan Parties shall be deemed to have
authorized Agent and its Affiliates and the Lenders to treat Borrower Materials
marked "PUBLIC" or otherwise at any time filed with the SEC as not containing
any material non-public information with respect to the Loan Parties or their
securities for purposes of United States federal and state securities laws. All
Borrower Materials marked "PUBLIC" are permitted to be made available through a
portion of the Platform designated as "Public Investor" (or another similar
term). Agent and its Affiliates and the Lenders shall be entitled to treat any
Borrower Materials that are not marked "PUBLIC" or that are not at any time
filed with the SEC as being suitable only for posting on a portion of the
Platform not marked as "Public Investor" (or such other similar term).


     17.10. Survival. All
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that Agent, Issuing
Lender, or any Lender may have had notice or knowledge of any Default or Event
of Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of, or any accrued interest on, any Loan or any fee or any other
amount payable under this Agreement is outstanding or unpaid or any Letter of
Credit is outstanding and so long as the Revolver Commitments have not expired
or been terminated. 

     17.11. Patriot Act. Each
Lender that is subject to the requirements of the Patriot Act hereby notifies
Borrower that pursuant to the requirements of the Act, it is required to obtain,
verify and record information that identifies Borrower, which information
includes the name and address of Borrower and other information that will allow
such Lender to identify Borrower in accordance with the Patriot Act. In
addition, if Agent is required by law or regulation or internal policies to do
so, it shall have the right to periodically conduct (a) Patriot Act searches,
OFAC/PEP searches, and customary individual background checks for the Loan
Parties and (b) OFAC/PEP searches and customary individual background checks for
the Loan Parties' senior management and key principals, and Borrower agrees to
cooperate in respect of the conduct of such searches and further agrees that the
reasonable costs and charges for such searches shall constitute Lender Group
Expenses hereunder and be for the account of Borrower. 







-82- 









     17.12. Integration. This
Agreement, together with the other Loan Documents, reflects the entire
understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof. The foregoing to the contrary
notwithstanding, all Bank Product Agreements, if any, are independent agreements
governed by the written provisions of such Bank Product Agreements, which will
remain in full force and effect, unaffected by any repayment, prepayments,
acceleration, reduction, increase, or change in the terms of any credit extended
hereunder, except as otherwise expressly provided in such Bank Product
Agreement. 

     17.13. Senior Indebtedness. For the avoidance of doubt, the Obligations
constitute "Specified Senior Indebtedness" under the Convertible Subordinated
Debt Documents. 

[Signature pages to follow.]


-83- 







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

	BORROWER:	QUANTUM CORPORATION,
      a Delaware
		corporation
	 
	 
	 	By:
      /s/ Linda M.
      Breard
		Name: Linda
      Breard
		Title: CFO
	 
	 
		WELLS FARGO CAPITAL FINANCE, LLC, a
		Delaware limited liability company, as Agent and as a
		Lender
	 
	 
		By:
      /s/ Samantha
      Alexander
		Name: Samantha
      Alexander
		            Its
      Authorized Signatory



 

 

 

Signature Page to Credit
Agreement 







Schedule
1.1 

          As used in the Agreement, the following terms
shall have the following definitions: 

         
"Account" means an account (as that term is defined in the
Code). 

         
"Account
Debtor" means any Person who is
obligated on an Account, chattel paper, or a general intangible. 

         
"Accounting
Changes" means changes in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or successor thereto or any
agency with similar functions). 

         
"Accounts
Component" means, as of any date
of determination, an amount equal to the sum of (a) 50% of the amount of the Net
Book Value of Borrower's and the other Loan Parties' Domestic Accounts as of
such date, plus (b) 50% of the amount of the Net Book Value of Borrower's and
the other Loan Parties' Approved Foreign Accounts as of such date, plus (c) the
lesser of (x) 50% of the amount of the Net Book Value of Borrower's and the
other Loan Parties' Canadian Accounts as of such date and (y) $250,000.


         
"Acquired
Indebtedness" means Indebtedness
of a Person whose assets or Equity Interests are acquired by Borrower or any of
its Subsidiaries in a Permitted Acquisition; provided, that such Indebtedness (a) was in existence prior to the date of such
Permitted Acquisition, and (b) was not incurred in connection with, or in
contemplation of, such Permitted Acquisition. 

         
"Acquisition" means (a) the
purchase or other acquisition by a Person or its Subsidiaries of all or
substantially all of the assets of (or any division or business line of) any
other Person, or (b) the purchase or other acquisition (whether by means of a
merger, consolidation, or otherwise) by a Person or its Subsidiaries of all or
substantially all of the Equity Interests of any other Person. 

         
"Additional
Documents" has the meaning
specified therefor in Section
5.12 of the Agreement.


         
"Administrative
Questionnaire" has the meaning
specified therefor in Section
13.1(a). 

         
"Affected
Lender" has the meaning specified
therefor in Section
2.13(b) of the Agreement.


Schedule 1.1 – Page 1








         
"Affiliate" means, as applied to any Person, any other
Person who controls, is controlled by, or is under common control with, such
Person. For purposes of this definition, "control" means the possession,
directly or indirectly through one or more intermediaries, of the power to
direct the management and policies of a Person, whether through the ownership of
Equity Interests, by contract, or otherwise; provided, that, for purposes of Section 6.10 of the
Agreement: (a) any Person which owns directly or indirectly 10% or more of the
Equity Interests having ordinary voting power for the election of directors or
other members of the governing body of a Person or 10% or more of the
partnership or other ownership interests of a Person (other than as a limited
partner of such Person) shall be deemed an Affiliate of such Person, (b) each
director (or comparable manager) of a Person shall be deemed to be an Affiliate
of such Person, and (c) each partnership in which a Person is a general partner
shall be deemed an Affiliate of such Person. 

          "Agent" has the meaning
specified therefor in the preamble to the Agreement. 

         
"Agent-Related
Persons" means Agent, together
with its Affiliates, officers, directors, employees, attorneys', and agents.


         
"Agent's
Account" means the Deposit
Account of Agent identified on Schedule A-1 (or such other Deposit
Account of Agent that has been designated as such, in writing, by Agent to
Borrower and the Lenders). 

         
"Agent's
Liens" means the Liens granted by
Borrower or its Subsidiaries to Agent under the Loan Documents and securing the
Obligations. 

         
"Agreement" means the Credit Agreement to which this
Schedule 1.1 is attached. 

         
"Annual
Deadline" has the meaning
specified therefor in Schedule
5.1. 

         
"Applicable
Margin" means, as of any date of
determination and with respect to Base Rate Loans or LIBOR Rate Loans, as
applicable, the applicable margin set forth in the following table that
corresponds to the Average Excess Availability of Borrower for the most recently
completed fiscal quarter; provided, that for the
period from the Closing Date through and including June 30, 2012, the Applicable
Margin shall be set at the margin in the row styled "Level II"; provided further, that any time an Event of Default has occurred
and is continuing, the Applicable Margin shall be set at the margin in the row
styled "Level III": 

	Level	Average Excess
Availability	Applicable Margin
Relative to Base Rate
Loans (the "Base
      Rate
Margin")	Applicable Margin
Relative to LIBOR Rate
Loans (the
      "LIBOR Rate
Margin")
	I	3 $25,000,000	1.00 percentage points	2.00 percentage points
	II	< $25,000,000 and 3
$15,000,000	1.25 percentage points	2.25 percentage points
	III	< $15,000,000	1.50 percentage points	2.50 percentage points



          The Applicable Margin shall be re-determined as of
the first day of each fiscal quarter of Borrower. 

Schedule 1.1 – Page 2










          "Application Event" means
the occurrence of (a) a failure by Borrower to repay all of the Obligations in
full on the Maturity Date, or (b) an Event of Default and the election by Agent
or the Required Lenders to require that payments and proceeds of Collateral be
applied pursuant to Section
2.4(b)(ii) of the Agreement.


         
"Approved Foreign
Account" means an Account, with
respect to which, the Account Debtor is either (x) a Subsidiary of a Person (i)
that maintains its chief executive office in the United States, (ii) that is
organized under the laws of the United States or any state thereof and (iii)
having a rating of at least BBB- from Standard & Poor's Rating Group
("S&P") and at least Baa3 from Moody's Investors
Service, Inc. ("Moody's") or (y) otherwise
approved in writing by Agent in its sole discretion. 

         
"Assignee" has the meaning specified therefor in
Section 13.1(a) of the Agreement. 

         
"Assignment and
Acceptance" means an Assignment
and Acceptance Agreement substantially in the form of Exhibit A-1 to the Agreement. 

         
"Authorized
Person" means any one of the
individuals identified on Schedule
A-2 to the Agreement, as such
schedule is updated from time to time by written notice from Borrower to Agent.


         
"Availability" means, as of
any date of determination, the amount that Borrower is entitled to borrow as
Revolving Loans under Section
2.1 of the Agreement (after
giving effect to the then outstanding Revolver Usage). 

         
"Average Excess
Availability" means, with respect
to any period, the sum of the aggregate amount of Excess Availability for each
Business Day in such period (calculated as of the end of each respective
Business Day) divided by the number of Business Days in such period. 

         
"Average
Liquidity" means, with respect to
any period, the sum of the aggregate amount of Liquidity for each Business Day
in such period (calculated as of the end of each respective Business Day)
divided by the number of Business Days in such period. 

         
"Bank
Product" means any one or more of
the following financial products or accommodations extended to Borrower or its
Subsidiaries by a Bank Product Provider: (a) credit cards (including commercial
credit cards (including so-called "procurement cards" or "P-cards")), (b) credit card processing services, (c) debit cards, (d) stored
value cards, (e) Cash Management Services, or (f) transactions under Hedge
Agreements. 

         
"Bank Product
Agreements" means those
agreements entered into from time to time by Borrower or its Subsidiaries with a
Bank Product Provider in connection with the obtaining of any of the Bank
Products. 

         
"Bank Product
Collateralization" means
providing cash collateral (pursuant to documentation reasonably satisfactory to
Agent) to be held by Agent for the benefit of the Bank Product Providers (other
than the Hedge Providers) in an amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure with respect to the then existing Bank Product Obligations
(other than Hedge Obligations). 

Schedule 1.1 – Page 3








          "Bank Product Obligations"
means (a) all obligations, liabilities, reimbursement obligations, fees, or
expenses owing by Borrower or its Subsidiaries to any Bank Product Provider
pursuant to or evidenced by a Bank Product Agreement and irrespective of whether
for the payment of money, whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, (b) all Hedge
Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to
a Bank Product Provider as a result of Agent or such Lender purchasing
participations from, or executing guarantees or indemnities or reimbursement
obligations to, a Bank Product Provider with respect to the Bank Products
provided by such Bank Product Provider to Borrower or its Subsidiaries.


         
"Bank Product
Provider" means Wells Fargo or
any of its Affiliates (including WFCF), including each of the foregoing in its
capacity, if applicable, as a Hedge Provider. 

         
"Bank Product
Reserves" means, as of any date
of determination, those reserves that Agent reasonably deems necessary or
appropriate to establish (based upon the Bank Product Providers' determination
of the liabilities and obligations of Borrower and its Subsidiaries in respect
of Bank Product Obligations) in respect of Bank Products then provided or
outstanding. 

         
"Bankruptcy
Code" means title 11 of the
United States Code, as in effect from time to time. 

         
"Base Rate" means the greatest of (a) the Federal Funds Rate
plus 1⁄2%, (b) the LIBOR Rate (which rate shall be calculated based upon an
Interest Period of 3 months and shall be determined on a daily basis), plus 1
percentage point, and (c) the rate of interest announced, from time to time,
within Wells Fargo at its principal office in San Francisco as its "prime rate",
with the understanding that the "prime rate" is one of Wells Fargo's base rates
(not necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Wells Fargo may designate. 

         
"Base Rate
Loan" means each portion of the
Revolving Loans that bears interest at a rate determined by reference to the
Base Rate. 

         
"Base Rate
Margin" has the meaning set forth
in the definition of Applicable Margin. 

         
"Benefit
Plan" means a "defined benefit
plan" (as defined in Section 3(35) of ERISA) for which Borrower or any of its
Subsidiaries or ERISA Affiliates has been an "employer" (as defined in Section
3(5) of ERISA) within the past six years. 

         
"Board of
Directors" means, as to any
Person, the board of directors (or comparable managers) of such Person, or any
committee thereof duly authorized to act on behalf of the board of directors (or
comparable managers). 

Schedule 1.1 – Page 4








          "Board of Governors" means
the Board of Governors of the Federal Reserve System of the United States (or
any successor). 

         
"Borrower" has the meaning specified therefor in the
preamble to the Agreement. 

         
"Borrower
Materials" has the meaning
specified therefor in Section
17.9(c) of the Agreement.


         
"Borrowing" means a borrowing consisting of Revolving Loans
made on the same day by the Lenders (or Agent on behalf thereof), or by Swing
Lender in the case of a Swing Loan, or by Agent in the case of an Extraordinary
Advance. 

         
"Borrowing
Base" means, as of any date of
determination, the result of:


         
(a)
100% of Qualified Cash,
plus


         
(b)
the Accounts Component,
plus


         
(c)
the lesser of 

              
(i) 50%
of the Net Book Value of Borrower's
and the other Loan Parties' Inventory (other than Service Inventory) located in
the United States consisting of raw materials and finished goods as of such
date; provided that no more than $5,000,000 of such Inventory
shall be located at locations not identified on Schedule 4.24, and 

              
(ii) the Accounts Component, plus 

         
(d) 100% of the Revolver Sub-Facility Amount, minus


         
(e) the aggregate amount of reserves, if any,
established by Agent under Section
2.1(c) of the Agreement.


         
"Borrowing Base
Certificate" means a certificate
in the form of Exhibit
B-1. 

         
"Business
Day" means any day that is not a
Saturday, Sunday, or other day on which banks are authorized or required to
close in the state of California, except that, if a determination of a Business
Day shall relate to a LIBOR Rate Loan, the term "Business Day" also shall
exclude any day on which banks are closed for dealings in Dollar deposits in the
London interbank market. 

         
"Canadian
Account" means an Account, with
respect to which, the Account Debtor (x) maintains its chief executive office in
Canada and (y) is organized under the laws of Canada or any state or province
thereof. 


Schedule 1.1 – Page 5










         
"Capital
Expenditures" means, with respect
to any Person for any period, the amount of all expenditures by such Person and
its Subsidiaries during such period that are capital expenditures as determined
in accordance with GAAP, whether such expenditures are paid in cash or financed,
but excluding, without duplication (a) with respect to the purchase price of assets that are purchased substantially
contemporaneously with the trade-in of existing assets during such period, the
amount that the gross amount of such purchase price is reduced by the credit
granted by the seller of such assets for the assets being traded in at such
time, (b) expenditures made during such period to consummate one or more
Permitted Acquisitions, (c) capitalized software development costs to the extent
such costs are deducted from net earnings under the definition of EBITDA for
such period, and (d) expenditures during such period that, pursuant to a written
agreement, are reimbursed by a third Person (excluding Borrower or any of its
Affiliates). 

          "Capitalized Lease
Obligation" means that portion of the
obligations under a Capital Lease that is required to be capitalized in
accordance with GAAP. 

         
"Capital Lease" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP. 

         
"Cash Equivalents" means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued or fully guaranteed by any state of the United States
or any political subdivision of any such state or any public instrumentality
thereof maturing within 1 year from the date of acquisition thereof and, at the
time of acquisition, having one of the two highest ratings obtainable from
either S&P or Moody's, (c) commercial paper maturing no more than 270 days
from the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody's, (d)
certificates of deposit, time deposits, overnight bank deposits or bankers'
acceptances maturing within 1 year from the date of acquisition thereof issued
by any bank organized under the laws of the United States or any state thereof
or the District of Columbia or any United States branch of a foreign bank having
at the date of acquisition thereof combined capital and surplus of not less than
$500,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies
the criteria described in clause (d) above, or (ii) any other bank organized
under the laws of the United States or any state thereof so long as the full
amount maintained with any such other bank is insured by the Federal Deposit
Insurance Corporation, (f) repurchase obligations of any commercial bank
satisfying the requirements of clause (d) of this definition or recognized
securities dealer having combined capital and surplus of not less than
$500,000,000, having a term of not more than seven days, with respect to
securities satisfying the criteria in clauses (a) or (d) above, (g) debt
securities with maturities of six months or less from the date of acquisition
backed by standby letters of credit issued by any commercial bank satisfying the
criteria described in clause (d) above, and (h) Investments in money market
funds substantially all of whose assets are invested in the types of assets
described in clauses (a) through (g) above. 

         
"Cash Management Policy" means that certain Domestic Investment Policy of Borrower,
as approved by the Board of Directors of Borrower, as in effect on the Closing
Date. 

         
"Cash Management
Services" means any cash management or
related services including treasury, depository, return items, overdraft,
controlled disbursement, merchant store value cards, e-payables services,
electronic funds transfer, interstate depository network, automatic clearing
house transfer (including the Automated Clearing House processing of electronic
funds transfers through the direct Federal Reserve Fedline system) and other
cash management arrangements. 

Schedule 1.1 – Page 6







          "CFC" means a controlled foreign corporation (as that term is
defined in the IRC). 

         
"Change in Control" means any of the following events: 

         
(a) any
Person or two or more Persons acting in concert, shall have acquired beneficial
ownership, directly or indirectly, of Equity Interests of Borrower (or other
securities convertible into such Equity Interests) representing 35% or more of
the combined voting power of all Equity Interests of Borrower entitled (without
regard to the occurrence of any contingency) to vote for the election of members
of the Board of Directors of Borrower; 

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

         
(c) during
any period of 24 consecutive months commencing on or after the Closing Date, the
occurrence of a change in the composition of the Board of Directors of Borrower
such that a majority of the members of such Board of Directors are not
Continuing Directors; 

         
(d) Borrower fails to own and control, directly or indirectly, 100% of the
Equity Interests of each other Loan Party; or 

         
(e) the
occurrence of any "Change in Control" as defined in the Convertible Subordinated
Debt Documents. 

         
"Closing Date" means the date of the making of the initial Revolving Loan
(or other extension of credit) under the Agreement. 

         
"Code" means the California Uniform Commercial Code, as in effect from time to
time. 

         
"Collateral" means all assets and interests in assets and proceeds thereof now owned
or hereafter acquired by a Loan Party in or upon which a Lien is granted by such
Loan Party in favor of Agent or the Lenders under any of the Loan Documents.


         
"Collateral Access
Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in a Loan Party's books and records, Equipment, or
Inventory, in each case, in form and substance reasonably satisfactory to Agent.


Schedule 1.1 – Page 7







         
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C-1 to the
Agreement delivered by the chief financial officer of Borrower to Agent.


          "Confidential
Information" has the meaning specified
therefor in Section 17.9(a) of the Agreement. 

         
"Continuing Director" means (a) any member of the Board of Directors who was a
director (or comparable manager) of Borrower on the Closing Date, and (b) any
individual who becomes a member of the Board of Directors after the Closing Date
if such individual was approved, appointed or nominated for election to the
Board of Directors by a majority of the Continuing Directors, but excluding any
such individual originally proposed for election in opposition to the Board of
Directors in office at the Closing Date in an actual or threatened election
contest relating to the election of the directors (or comparable managers) of
Borrower and whose initial assumption of office resulted from such contest or
the settlement thereof. 

         
"Control Agreement" means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by a Loan Party, Agent, and the
applicable securities intermediary (with respect to a Securities Account) or
bank (with respect to a Deposit Account). 

         
"Convertible Subordinated
Debt" means the Indebtedness in an amount not
to exceed $135,000,000 owing by Borrower to the "Holders" (as defined in
Convertible Trust Indenture) pursuant to the Convertible Subordinated Debt
Documents. 

         
"Convertible Subordinated Debt
Documents" means the Convertible Trust
Indenture, and all other agreements, instruments and documents evidencing the
Convertible Subordinated Debt, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof and hereof.


         
"Convertible Trust
Indenture" means that certain Indenture,
dated as of November 15, 2010 between Borrower and U.S. Bank National
Association, as trustee, as the same may be amended, modified or supplemented
from time to time in accordance with the terms thereof and hereof. 

         
"Copyright Security
Agreement" has the meaning specified therefor
in the Security Agreement. 

         
"Currency Exchange Rate" means, with respect to a currency, the rate determined by
Agent as the spot rate for the purchase of such currency with another currency.


         
"Default" means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default. 

Schedule 1.1 – Page 8







         
"Defaulting Lender" means any Lender that (a) has failed to fund any amounts
required to be funded by it under the Agreement on the date that it is required
to do so under the Agreement (including the failure to make available to Agent
amounts required pursuant to a Settlement or to make a required payment in
connection with a Letter of Credit Disbursement), (b) notified the Borrower,
Agent, or any Lender in writing that it does not intend to comply with
all or any portion of its funding obligations under the Agreement, (c)
has made a public statement to the effect that it does not intend to comply with
its funding obligations under the Agreement or under other agreements generally
(as reasonably determined by Agent) under which it has committed to extend
credit, (d) failed, within 1 Business Day after written request by Agent (with
such request being made in Agent's sole discretion or at the reasonable election
of Borrower), to confirm that it will comply with the terms of the Agreement
relating to its obligations to fund any amounts required to be funded by it
under the Agreement, (e) otherwise failed to pay over to Agent or any other
Lender any other amount required to be paid by it under the Agreement on the
date that it is required to do so under the Agreement, or (f) (i) becomes or is
insolvent or has a parent company that has become or is insolvent or (ii)
becomes the subject of an Insolvency Proceeding, or has had a receiver,
conservator, trustee, or custodian or appointed for it, or has taken any action
in furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment or has a parent company that has become the
subject of an Insolvency Proceeding, or has had a receiver, conservator,
trustee, or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment. 

          "Defaulting Lender
Rate" means (a) for the first 3 days from and
after the date the relevant payment is due, the Base Rate, and (b) thereafter,
the interest rate then applicable to Revolving Loans that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto). 

         
"Deposit Account" means any deposit account (as that term is defined in the
Code). 

         
"Designated Account" means the Deposit Account of Borrower identified on
Schedule D-1 to the Agreement (or such other Deposit Account of Borrower located at
Designated Account Bank that has been designated as such, in writing, by
Borrower to Agent). 

         
"Designated Account
Bank" has the meaning specified therefor in
Schedule D-1 to the Agreement (or such other bank that is located within the United
States that has been designated as such, in writing, by Borrower to Agent).


         
"Disqualified Equity
Interests" shall mean any Equity Interest
that, by its terms (or by the terms of any security or other Equity Interests
into which it is convertible or for which it is exchangeable), or upon the
happening of any event or condition (a) matures or is mandatorily redeemable
(other than solely for Qualified Equity Interests), pursuant to a sinking fund
obligation or otherwise (except as a result of a change of control or asset sale
so long as any rights of the holders thereof upon the occurrence of a change of
control or asset sale event shall be subject to the prior repayment in full of
the Loans and all other Obligations that are accrued and payable and the
termination of the Revolver Commitments), (b) is redeemable at the option of the
holder thereof (other than solely for Qualified Equity Interests), in whole or
in part, (c) provides for the scheduled payments of dividends in cash, or (d) is
or becomes convertible into or exchangeable for Indebtedness or any other Equity
Interests that would constitute Disqualified Equity Interests, in each case,
prior to the date that is 180 days after the Maturity Date. 

Schedule 1.1 – Page 9







         
"Dollar Equivalent" means, as of any date of determination, (a) as to any amount
denominated in Dollars, the amount thereof as of such date of determination, and
(b) as to any amount denominated in another currency, the equivalent amount
thereof in Dollars as determined by Agent on the basis of the Currency Exchange
Rate for the purchase of Dollars with such currency in effect on such date of
determination. 

          "Dollars" or "$" means United States dollars. 

         
"Domestic Account" means an Account, with respect to which, the Account Debtor
(x) maintains its chief executive office in the United States and (y) is
organized under the laws of the United States or any state thereof. 

         
"Domestic Subsidiary" means any Subsidiary of Borrower that is organized under the
laws of the United States, any state or territory thereof or the District of
Columbia, other than any such Subsidiary that is owned indirectly by Borrower
through a Subsidiary that is not organized under the laws of the United States,
any state or territory thereof or the District of Columbia. 

         
"EBITDA" means, with respect to any fiscal period,

         
(a) Borrower's consolidated net earnings (or loss), 

              
minus 

         
(b) without
duplication, the sum of the following amounts of Borrower for such period to the
extent included in determining consolidated net earnings (or loss) for such
period: 

              
(i) tax
credits based on income, profits or capital, including federal, foreign, state,
franchise and similar taxes, 

              
(ii) any
extraordinary, unusual, or non-recurring revenue, income and gains, 

              
(iii) interest income, 

              
(iv) income
arising by reason of the application of FAS 141R, 

              
(v) gains
attributable to Investments in joint ventures and partnerships to the extent not
distributed in cash to Borrower or its Subsidiaries, and 

              
(vi) cash
or non-cash exchange, translation or performance gains relating to any hedging
transactions or foreign currency fluctuations, 

              
plus 

              
(i) any
extraordinary, unusual, or non-recurring costs, expenses and losses, 

Schedule 1.1 – Page 10







              
(ii) Interest Expense, 

              
(iii) cash
or non-cash exchange, translation, or performance losses relating to any hedging
transactions or foreign currency fluctuations, 

              
(iv) tax
expense based on income, profits or capital, including federal, foreign, state,
franchise and similar taxes (and for the avoidance of doubt, specifically
excluding any sales taxes or any other taxes held in trust for a Governmental
Authority), 

              
(v) depreciation and amortization for such period, in each case, determined
on a consolidated basis in accordance with GAAP,

              
(vi) service parts lower of cost or market adjustment, 

              
(vii) reasonable transaction costs and expenses incurred in connection with
this Agreement on or prior to the Closing Date up to an aggregate amount not to
exceed $2,000,000, 

              
(viii) reasonable transaction costs and expenses incurred in connection with
this Agreement after the Closing Date up to an aggregate amount not to exceed
$250,000 in any fiscal year, 

              
(ix) capitalized debt issuance costs arising with respect to the Existing
Credit Facility up to an aggregate amount not to exceed $2,700,000, 

              
(x) capitalized debt issuance costs arising with respect to any Permitted
Refinancing or repayment of the Convertible Subordinated Debt up to an aggregate
amount not to exceed $4,000,000, 

              
(xi) reasonable fees, costs and expenses incurred prior to the Maturity Date
in connection with restructuring charges up to an aggregate amount not to exceed
$10,000,000 in any fiscal year, 

              
(xii) non-cash compensation expense (including deferred non-cash compensation
expense), or other non-cash expenses or charges, arising from the sale or
issuance of Equity Interests, the granting of stock options, and the granting of
stock appreciation rights and similar arrangements (including any repricing,
amendment, modification, substitution, or change of any such Equity Interests,
stock option, stock appreciation rights, or similar arrangements) minus the
amount of any such expenses or charges when paid in cash to the extent not
deducted in the computation of net earnings (or loss), 

              
(xiii) expenses reimbursed in cash by a third Person (other than Borrower or any
of its Subsidiaries) during the same period pursuant to an indemnity or guaranty
in favor of Borrower or any of its Subsidiaries to the extent such amounts are
actually received by Borrower or any of its Subsidiaries during such period,


Schedule 1.1 – Page 11







              
(xiv) with
respect to any Permitted Acquisition after the Closing Date, costs, fees,
charges, or expenses consisting of out-of-pocket expenses owed by Borrower or
any of its Subsidiaries to any Person for services performed by such
Person in connection with such Permitted Acquisition incurred on or prior to 180
days of the consummation of such Permitted Acquisition, (a) up to an aggregate
amount for such Permitted Acquisition not to exceed the greater of (i)
$10,000,000 and (ii) 1.50% of the Purchase Price of such Permitted Acquisition
and (b) in any amount to the extent such costs, fees, charges, or expenses in
this clause (x) are paid with proceeds of new equity investments in exchange for
Qualified Equity Interests of Borrower contemporaneously made by current
shareholders of Borrower, 

              
(xv) with respect to any Permitted Acquisitions after the Closing
Date: (a) purchase accounting adjustments, including, without limitation, a
dollar for dollar adjustment for that portion of revenue that would have been
recorded in the relevant period had the balance of deferred revenue (unearned
income) recorded on the closing balance sheet and before application of purchase
accounting not been adjusted downward to fair value to be recorded on the
opening balance sheet in accordance with GAAP purchase accounting rules; and (b)
non-cash adjustments in accordance with GAAP purchase accounting rules under
FASB Statement No. 141R and EITF Issue No. 01-3, in the event that such an
adjustment is required by Borrower's independent auditors, in each case, as
determined in accordance with GAAP,

              
(xvi) non-cash losses attributable to Investments in joint ventures
and partnerships, and 

              
(xvii) non-cash losses on sales of assets or write-downs of assets. 

in each case, determined on a
consolidated basis in accordance with GAAP. 

          For the
purposes of calculating EBITDA for any period of 4 consecutive fiscal quarters
(each, a "Reference Period"), if at any time during such Reference Period (and after the
Closing Date), Borrower or any of its Subsidiaries shall have made a Permitted
Acquisition, EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto (including pro forma adjustments arising out of events
which are directly attributable to such Permitted Acquisition, are factually
supportable, and are expected to have a continuing impact, in each case to be
mutually and reasonably agreed upon by Borrower and Agent. 

         
"Environmental Action" means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or (c)
from or onto any facilities which received Hazardous Materials generated by any
Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest. 

         
"Environmental Law" means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on
Borrower or its Subsidiaries, relating to the environment, the effect of the
environment on employee health, or Hazardous Materials, in each case as amended
from time to time. 

Schedule 1.1 – Page 12







         
"Environmental
Liabilities" means all liabilities, monetary
obligations, losses, damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts, or consultants, and costs of
investigation and feasibility studies), fines, penalties, sanctions, and
interest incurred as a result of any claim or demand, or Remedial Action
required, by any Governmental Authority or any third party, and which relate to
any Environmental Action. 

          "Environmental
Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities. 

         
"Equipment" means equipment (as that term is defined in the Code). 

         
"Equity Interest" means, with respect to a Person, all of the shares, options,
warrants, interests, participations, or other equivalents (regardless of how
designated) of or in such Person, whether voting or nonvoting, including capital
stock (or other ownership or profit interests or units), preferred stock, or any
other "equity security" (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).


         
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto. 

         
"ERISA Affiliate" means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of Borrower or its
Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Borrower or its Subsidiaries under IRC Section 414(c), (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which Borrower or any of its Subsidiaries is a member under IRC Section 414(m),
or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC,
any Person subject to ERISA that is a party to an arrangement with Borrower or
any of its Subsidiaries and whose employees are aggregated with the employees of
Borrower or its Subsidiaries under IRC Section 414(o). 

         
"Event of Default" has the meaning specified therefor in Section 8 of the Agreement.


         
"Excess Availability" means, as of any date of determination, the amount equal to
(a) the lesser of (i) the Maximum Revolver Amount and (ii) the Borrowing Base at
such time (based upon the most recent Borrowing Base Certificate delivered by
Borrower to Agent) less (b) the sum, without duplication, of (x) all outstanding
Revolving Loans, (y) the Letter of Credit Usage at such time, and (z) the
principal amount of Swing Loans outstanding at such time. 

         
"Exchange Act" means the Securities Exchange Act of 1934, as in effect from
time to time. 

Schedule 1.1 – Page 13







         
"Excluded Taxes" means (i) any tax imposed on the net income or net profits
of any Lender or any Participant (including any branch profits taxes), in each
case imposed by the jurisdiction (or by any political subdivision or taxing
authority thereof) in which such Lender or such Participant is organized, by the
jurisdiction (or by any political subdivision or taxing authority thereof) in
which such Lender's or such Participant's principal office is located or as a
result of a present or former connection between such Lender or such Participant
and the jurisdiction or taxing authority imposing the tax (other than any such
connection arising solely from such Lender or such Participant having executed,
delivered or performed its obligations or received payment under, or enforced
its rights or remedies under the Agreement or any other Loan Document); (ii)
taxes that would not have been imposed but for a Lender's or a Participant's
failure to comply with the requirements of Section 16.2 of the Agreement, (iii)
any United States federal withholding taxes that would be imposed on amounts
payable to a Foreign Lender based upon the applicable withholding rate in effect
at the time such Foreign Lender becomes a party to the Agreement (or designates
a new lending office), except that Indemnified Taxes shall include any amount
that such Foreign Lender (or its assignor, if any) was previously entitled to
receive pursuant to Section
16.1 of the Agreement, if any, with respect
to such withholding tax at the time such Foreign Lender becomes a party to the
Agreement (or designates a new lending office), and (iv) any Taxes imposed under
IRC Sections 1471 to 1474, or any amended or successor version thereof that is
substantially comparable and not materially more onerous to comply with.


          "Existing Credit
Facility" means that certain Senior Secured
Credit Agreement dated as of July 12, 2007 by and among Borrower, Credit Suisse,
as Collateral Agent, Administrative Agent, Swing Line Lender and an L/C Issuer,
and the other Lenders party thereto, as heretofore amended, amended and
restated, supplemented or otherwise modified. 

         
"Existing Letters of
Credit" means those letters of credit
described on Schedule E-2 to the Agreement. 

         
"Extraordinary Advances" has the meaning specified therefor in Section 2.3(d)(iii) of the
Agreement. 

         
"Fee Letter" means that certain fee letter, dated as of even date with the
Agreement, between Borrower and Agent. 

         
"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum
equal to, for each day during such period, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day on such transactions received by Agent from three Federal funds brokers
of recognized standing selected by it. 

         
"Fixed Charges" means, with respect to any fiscal period and with respect to
Borrower determined on a consolidated basis in accordance with GAAP, the sum,
without duplication, of (a) Interest Expense accrued (other than interest
paid-in-kind, amortization of financing fees, and other non-cash Interest
Expense) during such period, (b) principal payments in respect of Indebtedness
that are required to be paid during such period, and (c) all federal, state, and
local income taxes paid in cash with respect to such period and (d) all
Restricted Payments paid (whether in cash or other property, other than common
Equity Interest) during such period. 

Schedule 1.1 – Page 14







         
"Fixed Charge Coverage
Ratio" means, with respect to Borrower and
its Subsidiaries for any period, the ratio of (i) EBITDA for such period minus
Capital Expenditures made (to the extent not already incurred in a prior period)
or incurred during such period, to (ii) Fixed Charges for such period.


         
"Flow of Funds
Agreement" means a flow of funds agreement,
dated as of even date herewith, in form and substance reasonably satisfactory to
Agent and Borrower, executed and delivered by Borrower to Agent. 

         
"Foreign Account" means an Account that is not a Domestic Account. 

         
"Foreign Cash
Equivalents" means (a) marketable direct
obligations issued by, or unconditionally guaranteed by, the United Kingdom or
any European Union Central Bank or issued by any agency thereof and backed by
the full faith and credit of the United Kingdom or any European Union Central
Bank, in each case maturing within 1 year from the date of acquisition thereof,
(b) marketable direct obligations issued or fully guaranteed by any state,
province or territory of the United Kingdom or any European Union Central Bank,
or any political subdivision of any such state, province, territory or country
or any public instrumentality thereof maturing within 1 year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's, (c) certificates of
deposit, time deposits, overnight bank deposits or bankers' acceptances maturing
within 1 year from the date of acquisition thereof issued by any bank organized
under the laws of the United Kingdom or any European Union Central Bank at the
date of acquisition thereof combined capital and surplus of not less than the
Dollar Equivalent of $500,000,000, (d) Deposit Accounts maintained with (i) any
bank that satisfies the criteria described in clause (c) above, or (ii) any
other bank organized under the laws of the United Kingdom so long as the full
amount maintained with any such other bank is insured by the Financial Services
Compensation Scheme, (e) repurchase obligations of any commercial bank
satisfying the requirements of clause (c) of this definition or recognized
securities dealer having combined capital and surplus of not less than the
Dollar Equivalent of $500,000,000, having a term of not more than seven days,
with respect to securities satisfying the criteria in clauses (a) or (c) above,
(f) debt securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any commercial bank
satisfying the criteria described in clause (c) above, and (g) Investments in
money market funds substantially all of whose assets are invested in the types
of assets described in clauses (a) through (f) above. 

         
"Foreign Lender" means any Lender or Participant that is not a United States
person within the meaning of IRC section 7701(a)(30). 

         
"Funding Date" means the date on which a Borrowing occurs. 

Schedule 1.1 – Page 15







         
"Funding Losses" has the meaning specified therefor in Section 2.12(b)(ii) of the
Agreement. 

          "GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, consistently applied. 

         
"Governing Documents" means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person. 

         
"Governmental Authority" means any federal, state, local, or other governmental or
administrative body, instrumentality, board, department, or agency or any court,
tribunal, administrative hearing body, arbitration panel, commission, or other
similar dispute-resolving panel or body. 

         
"Guarantor" means (a) each Domestic Subsidiary of Borrower as of the Closing Date
(other than Immaterial Subsidiaries), and (b) each other Person that is required
to become a guarantor after the Closing Date pursuant to Section 5.11 of the
Agreement. 

         
"Guaranty and Security
Agreements" mean, collectively, (a) the
Security Agreement and (b) any other guaranty or security agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by a Loan
Party to Agent pursuant to Section
5.11 of the Agreement. 

         
"Hazardous Materials" means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
"hazardous substances," "hazardous materials," "hazardous wastes," "toxic
substances," or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million. 

         
"Hedge Agreement" means a "swap agreement" as that term is defined in Section
101(53B)(A) of the Bankruptcy Code. 

         
"Hedge Obligations" means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of Borrower or its Subsidiaries arising under, owing pursuant to, or existing in
respect of Hedge Agreements entered into with one or more of the Hedge
Providers. 

         
"Hedge Provider" means Wells Fargo or any of its Affiliates. 

Schedule 1.1 – Page 16







         
"Immaterial Subsidiary" means, at any time, any Subsidiary of Borrower (i) which is
identified as such by Borrower on Schedule
4.1(c) on the Closing Date or designated as
such by Borrower after the Closing Date in a written notice delivered to Agent
and (ii) which does not (x) own or generate any Accounts or Inventory,
(y) have revenues in any fiscal year in excess of $250,000 (other than, in the
case of Quantum International, revenue generated through foreign branch offices
pursuant to the Transfer Pricing Program) and (z) receive or generate any
royalty revenue; it being understood that, as of the Closing Date, each of
Advanced Digital Information Corporation, a Washington corporation, Certance
(US) Holdings, Inc., a Delaware corporation, Certance Holdings Corporation, a
Delaware corporation, Certance LLC, a Delaware limited liability company,
Pancetera Software Inc., a Delaware corporation, and Quantum International is
deemed to be an Immaterial Subsidiary. 

          "Indebtedness" as to any Person means
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes, or other similar instruments
and all reimbursement or other obligations in respect of letters of credit,
bankers acceptances, or other financial products, (c) all obligations of such
Person as a lessee under Capital Leases, (d) all obligations or liabilities of
others secured by a Lien on any asset of such Person, irrespective of whether
such obligation or liability is assumed, (e) all obligations of such Person to
pay the deferred purchase price of assets (other than trade payables incurred in
the ordinary course of business and repayable in accordance with customary trade
practices and, for the avoidance of doubt, other than royalty payments payable
in the ordinary course of business in respect of non-exclusive licenses), (f)
all non-compete payment obligations of such Person arising in connection with an
Acquisition, (g) seller notes and earnout obligations of such Person arising in
connection with an Acquisition, (h) all monetary obligations of such Person
owing under Hedge Agreements (which amount shall be calculated based on the
amount that would be payable by such Person if the Hedge Agreement were
terminated on the date of determination), (i) any Disqualified Equity Interests
of such Person, and (j) any obligation of such Person guaranteeing or intended
to guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse) any obligation of any other Person that
constitutes Indebtedness under any of clauses (a) through (i) above. For
purposes of this definition, (i) the amount of any Indebtedness represented by a
guaranty or other similar instrument shall be the lesser of the principal amount
of the obligations guaranteed and still outstanding and the maximum amount for
which the guaranteeing Person may be liable pursuant to the terms of the
instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness
which is limited or is non-recourse to a Person or for which recourse is limited
to an identified asset shall be valued at the lesser of (A) if applicable, the
limited amount of such obligations, and (B) if applicable, the fair market value
of such assets securing such obligation. 

         
"Indemnified
Liabilities" has the meaning specified
therefor in Section 10.3 of the Agreement. 

         
"Indemnified Person" has the meaning specified therefor in Section 10.3 of the
Agreement. 

         
"Indemnified Taxes" means, any Taxes other than Excluded Taxes. 

         
"Insolvency Proceeding" means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.


Schedule 1.1 – Page 17







         
"Intercompany Subordination
Agreement" means that certain Intercompany
Subordination Agreement, dated as of even date with the Agreement, executed and
delivered by Borrower, each of its Subsidiaries, and Agent. 

          "Interest
Expense" means, for any period, the aggregate
of the interest expense of Borrower for such period, determined on a
consolidated basis in accordance with GAAP. 

         
"Interest Period" means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, 3 , or 6 months thereafter; provided, that (a) interest
shall accrue at the applicable rate based upon the LIBOR Rate from and including
the first day of each Interest Period to, but excluding, the day on which any
Interest Period expires, (b) any Interest Period that would end on a day that is
not a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day, (c) with respect to an
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period), the Interest Period shall end on the last
Business Day of the calendar month that is 1, 2, 3 or 6 months after the date on
which the Interest Period began, as applicable, and (d) Borrower may not elect
an Interest Period which will end after the Maturity Date. 

         
"Inventory" means inventory (as that term is defined in the Code). 

         
"Inventory Reserves" means, as of any date of determination, (a) Landlord
Reserves, and (b) those reserves that Agent deems necessary or appropriate, in
its Permitted Discretion and subject to Section 2.1(c), to establish and
maintain (including reserves for slow moving Inventory and Inventory shrinkage)
with respect to the Inventory component of the Borrowing Base or the Maximum
Revolver Amount.

         
"Investment" means, with respect to any Person, any investment by such Person in any
other Person (including Affiliates) in the form of loans, guarantees, advances,
capital contributions (excluding (a) commission, travel, moving expenses and
similar advances to officers and employees of such Person made in the ordinary
course of business, and (b) bona fide accounts receivable arising in the
ordinary course of business), or acquisitions of Indebtedness, Equity Interests,
or all or substantially all of the assets of such other Person (or of any
division or business line of such other Person), and any other items that are or
would be classified as investments on a balance sheet prepared in accordance
with GAAP. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustment for
increases or decreases in value, or write-ups, write-downs, or write-offs with
respect to such Investment. 

         
"IRC" means the Internal Revenue Code of 1986, as in effect from time to
time. 

Schedule 1.1 – Page 18







         
"ISP" means, with respect to any Letter of Credit, the "International Standby
Practices 1998" published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance). 

          "Issuer
Document" means, with respect to any Letter
of Credit, a letter of credit application, a letter of credit agreement, or any
other document, agreement or instrument entered into (or to be entered into) by
Borrower in favor of Issuing Lender or Underlying Issuer and relating to such
Letter of Credit. 

         
"Issuing Lender" means WFCF or any other Lender that, at the request of
Borrower and with the consent of Agent, agrees, in such Lender's sole
discretion, to become an Issuing Lender for the purpose of issuing Letters of
Credit or Reimbursement Undertakings pursuant to Section 2.11 of the Agreement and
Issuing Lender shall be a Lender. 

         
"Landlord Reserve" means, as to each location (other than any such location
owned by Borrower or such other Loan Party) at which Borrower or any other Loan
Party has Inventory included in the calculation of the Borrowing Base or books
and records located and as to which a Collateral Access Agreement has not been
received by Agent, a reserve in an amount equal to the greater of (a) the number
of months' rent for which the landlord will have, under applicable law, a Lien
in the Inventory of Borrower to secure the payment of rent or other amounts
under the lease relative to such location, or (b) 3 months' rent under the lease
relative to such location. 

         
"Lender" has the meaning set forth in the preamble to the Agreement, shall
include Issuing Lender and the Swing Lender, and shall also include any other
Person made a party to the Agreement pursuant to the provisions of
Section 13.1 of the Agreement and "Lenders" means each of the Lenders or any one or
more of them. 

         
"Lender Group" means each of the Lenders (including Issuing Lender and the
Swing Lender) and Agent, or any one or more of them. 


Schedule 1.1 – Page 19









         
"Lender Group Expenses" means all (a) costs or expenses (including taxes and
insurance premiums) required to be paid by Borrower or its Subsidiaries under
any of the Loan Documents that are paid, advanced, or incurred by the Lender
Group, (b) reasonable and documented out-of-pocket fees or charges paid or
incurred by Agent in connection with the Lender Group's transactions with
Borrower or its Subsidiaries under any of the Loan Documents, including, fees or
charges for background checks, OFAC/PEP searches, photocopying, notarization,
couriers and messengers, telecommunication, public record searches, filing fees,
recording fees, publication, appraisal (including periodic collateral appraisals
or business valuations to the extent of the fees and charges (and up to the
amount of any limitation) contained in the Agreement or the Fee Letter), real
estate surveys, real estate title policies and endorsements, and environmental
audits, (c) Agent's customary fees and charges (as adjusted from time to time)
with respect to the disbursement of funds (or the receipt of funds) to or for
the account of Borrower (whether by wire transfer or otherwise), together with
any reasonable out-of-pocket costs and expenses incurred in connection
therewith, (d) customary charges imposed or incurred by Agent resulting from the
dishonor of checks payable by or to any Loan Party, (e) reasonable and
documented out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any default or enforce
any provision of the Loan Documents, or during the continuance of an Event of
Default, in gaining possession of, maintaining, handling, preserving, storing,
shipping, selling, preparing for sale, or advertising to sell the Collateral, or
any portion thereof, irrespective of whether a sale is consummated, (f) subject
to Section 2.10 of the Agreement, field examination, appraisal, and valuation fees and
expenses of Agent related to any field examinations, appraisals, or valuation to
the extent of the fees and charges, (g) subject to Section 10.3 of the Agreement, Agent's
costs and expenses (including, to the extent required to be paid by Borrower
pursuant to Section 10.3 of the Agreement, reasonable documented attorneys' fees and
expenses) relative to third party claims or any other lawsuit or adverse
proceeding paid or incurred, whether in enforcing or defending the Loan
Documents or otherwise in connection with the transactions contemplated by the
Loan Documents, Agent's Liens in and to the Collateral, or the Lender Group's
relationship with Borrower or any of its Subsidiaries, (h) Agent's reasonable
and documented costs and expenses (including, to the extent required to be paid
by Borrower pursuant to Section
10.3 of the Agreement, reasonable documented
attorneys' fees and due diligence expenses) incurred in advising, structuring,
drafting, reviewing, administering (including travel, meals, and lodging),
syndicating, or amending, waiving, or modifying the Loan Documents, (i) Agent's
and each Lender's reasonable and documented costs and expenses (including
reasonable documented attorneys', accountants, consultants, and other advisors
fees and expenses) incurred in terminating, enforcing (including attorneys',
accountants, consultants, and other advisors fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning Borrower or any of its Subsidiaries or in exercising rights or
remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether a lawsuit or other adverse proceeding is brought, or in
taking any enforcement action or any Remedial Action with respect to the
Collateral, and (j) the fees, charges, commissions and costs provided for in
Section 2.11(j) of the Agreement (including any fronting fees) and all other fees,
charges, commissions, costs and expenses for amendments, renewals, extensions,
transfers, or drawings from time to time charged by the Underlying Issuer or
incurred or charged by Issuing Lender in respect of Letters of Credit and
reasonable out-of-pocket fees, costs, and expenses charged by the Underlying
Issuer or incurred or charged by Issuing Lender in connection with the issuance,
amendment, renewal, extension, or transfer of, or drawing under, any Letter of
Credit or any demand for payment thereunder. 

          "Lender Group
Representatives" has the meaning specified
therefor in Section 17.9 of the Agreement.


         
"Lender-Related Person" means, with respect to any Lender, such Lender, together
with such Lender's Affiliates, officers, directors, employees, attorneys', and
agents. 

         
"Letter of Credit" means a letter of credit (as that term is defined in the
Code) issued by Issuing Lender or a letter of credit (as that term is defined in
the Code) issued by Underlying Issuer, as the context requires. 

         
"Letter of Credit
Collateralization" means either (a) providing
cash collateral (pursuant to documentation reasonably satisfactory to Agent,
including provisions that specify that the Letter of Credit Fees and all fees,
charges and commissions provided for in Section 2.11(j) of the Agreement (including any fronting fees) will continue
to accrue while the Letters of Credit are outstanding) to be held by Agent for
the benefit of the Revolving Lenders in an amount equal to 103% of the then
existing Letter of Credit Usage, (b) delivering to Agent documentation executed
by all beneficiaries under the Letters of Credit, in form and substance
reasonably satisfactory to Agent and Issuing Lender, terminating all of such
beneficiaries' rights under the Letters of Credit, or (c) providing Agent with a
standby letter of credit, in form and substance reasonably satisfactory to
Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an
amount equal to 103% of the then existing Letter of Credit Usage (it being
understood that the Letter of Credit Fee and all fronting fees set forth in the
Agreement will continue to accrue while the Letters of Credit are outstanding
and that any such fees that accrue must be an amount that can be drawn under any
such standby letter of credit).

Schedule 1.1 – Page 20 







         
"Letter of Credit
Disbursement" means a payment made by Issuing
Lender or Underlying Issuer pursuant to a Letter of Credit. 

         
"Letter of Credit
Exposure" means, as of any date of
determination with respect to any Lender, such Lender's Pro Rata Share of the
Letter of Credit Usage on such date. 

         
"Letter of Credit Fee" has the meaning specified therefor in Section 2.6(b) of the
Agreement. 

         
"Letter of Credit Usage" means, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit. 

         
"LIBOR Deadline" has the meaning specified therefor in Section 2.12(b)(i) of the
Agreement. 

         
"LIBOR Notice" means a written notice in the form of Exhibit L-1. 

         
"LIBOR Option" has the meaning specified therefor in Section 2.12(a) of the
Agreement. 

         
"LIBOR Rate" means the rate per annum rate appearing on Macro*World's (www.mworld.com; the
"Service")
Page BBA LIBOR - USD (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service) 2 Business Days prior to the
commencement of the requested Interest Period, for a term, and in an amount,
comparable to the Interest Period and the amount of the LIBOR Rate Loan
requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR
Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by
Borrower in accordance with the Agreement (and, if any such rate is below zero,
the LIBOR Rate shall be deemed to be zero), which determination shall be made by
Agent and shall be conclusive in the absence of manifest error. 

         
"LIBOR Rate Loan" means each portion of a Revolving Loan that bears interest
at a rate determined by reference to the LIBOR Rate. 

         
"LIBOR Rate Margin" has the meaning set forth in the definition of Applicable
Margin. 

         
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing
lease having substantially the same economic effect as any of the
foregoing.

Schedule 1.1 – Page 21 







         
"Liquidity" means, as of any date of determination, the sum of (a) Excess
Availability as of such date, plus (b) to the extent, but only up to the extent,
that the Borrowing Base as of such date (based upon the most recent Borrowing
Base Certificate delivered by Borrower to Agent) exceeds the Maximum Revolver
Amount as of such date, Qualified Cash as of such date. 

         
"Loan" shall mean any Revolving Loan, Swing Loan or Extraordinary Advance made
(or to be made) hereunder. 

         
"Loan Account" has the meaning specified therefor in Section 2.9 of the
Agreement. 

         
"Loan Documents" means the Agreement, the Control Agreements, the Copyright
Security Agreement, any Borrowing Base Certificate, the Fee Letter, the Guaranty
and Security Agreements, the Intercompany Subordination Agreement, any Issuer
Documents, the Letters of Credit, the Mortgages, the Patent Security Agreement,
the Trademark Security Agreement, any note or notes executed by Borrower in
connection with the Agreement and payable to any member of the Lender Group, and
any other instrument or agreement entered into, now or in the future, by
Borrower or any of its Subsidiaries and any member of the Lender Group in
connection with the Agreement. 

         
"Loan Party" means Borrower or any Guarantor. 

         
"Margin Stock" as defined in Regulation U of the Board of Governors as in
effect from time to time. 

         
"Material Adverse
Effect" means (a) a material adverse effect
in the business, operations, results of operations, assets, liabilities or
financial condition of Borrower and its Subsidiaries, taken as a whole, (b) a
material impairment of the Loan Parties' ability to perform their obligations
under the Loan Documents to which they are parties or of the Lender Group's
ability to enforce the Obligations or realize upon the Collateral (other than as
a result of as a result of an action taken or not taken that is solely in the
control of Agent), or (c) a material impairment of the enforceability or
priority of Agent's Liens with respect to all or a material portion of the
Collateral as a result of an action or failure to act on the part of Borrower or
its Subsidiaries. 

         
"Maturity Date" means the earlier of (i) March 29, 2017 and (ii) 91 days
prior to the earliest date of maturity under the Convertible Trust Indenture.


         
"Maximum Revolver
Amount" means $75,000,000, decreased by the
amount of reductions in the Revolver Commitments made in accordance with
Section 2.4(c) of the Agreement; provided that, commencing July 1,
2012, the foregoing amount shall be reduced on the first day of each calendar
quarter following the Closing Date by an amount equal to $1,000,000.

Schedule 1.1 – Page 22 







         
"Moody's" has the meaning specified therefor in the definition of Cash
Equivalents. 

         
"Mortgages" means, individually and collectively, one or more mortgages, deeds of
trust, or deeds to secure debt, executed and delivered by Borrower or any other
Loan Party in favor of Agent, in form and substance reasonably satisfactory to
Agent, that encumber the Real Property Collateral. 

         
"Net Book Value" means the book value of the applicable assets as shown on
Borrower's and its Domestic Subsidiaries' financial statements as determined in
accordance with GAAP. 

         
"Net Cash Proceeds" means: 

         
(a) with
respect to any sale or disposition by Borrower or any of its Subsidiaries of
assets, the amount of cash proceeds received (directly or indirectly) from time
to time (whether as initial consideration or through the payment of deferred
consideration) by or on behalf of Borrower or its Subsidiaries, in connection
therewith after deducting therefrom only (i) the amount of any Indebtedness
secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to
Agent or any Lender under the Agreement or the other Loan Documents and (B)
Indebtedness assumed by the purchaser of such asset) which is required to be,
and is, repaid in connection with such sale or disposition, (ii) reasonable
fees, commissions, and expenses related thereto and required to be paid by
Borrower or such Subsidiary in connection with such sale or disposition, (iii)
taxes paid or payable to any taxing authorities by Borrower or such Subsidiary
in connection with such sale or disposition, in each case to the extent, but
only to the extent, that the amounts so deducted are, at the time of receipt of
such cash, actually paid or payable to a Person that is not an Affiliate of
Borrower or any of its Subsidiaries, and are properly attributable to such
transaction; and (iv) all amounts that are set aside as a reserve (A) for
adjustments in respect of the purchase price of such assets, (B) for any
liabilities associated with such sale or casualty, to the extent such reserve is
required by GAAP, and (C) for the payment of unassumed liabilities relating to
the assets sold or otherwise disposed of at the time of, or within 30 days
after, the date of such sale or other disposition, to the extent that in each
case the funds described above in this clause (iv) are deposited into escrow
with a third party escrow agent or set aside in a separate Deposit Account that
is subject to a Control Agreement in favor of Agent; and 

         
(b) with
respect to the issuance or incurrence of any Indebtedness by Borrower or any of
its Subsidiaries, or the issuance by Borrower or any of its Subsidiaries of any
Equity Interests, the aggregate amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment or
disposition of deferred consideration) by or on behalf of Borrower or such
Subsidiary in connection with such issuance or incurrence, after deducting
therefrom only (i) reasonable fees, commissions, and expenses related thereto
and required to be paid by Borrower or such Subsidiary in connection with such
issuance or incurrence, (ii) taxes paid or payable to any taxing authorities by
Borrower or such Subsidiary in connection with such issuance or incurrence, in
each case to the extent, but only to the extent, that the amounts so deducted
are, at the time of receipt of such cash, actually paid or payable to a Person
that is not an Affiliate of Borrower or any of its Subsidiaries, and are
properly attributable to such transaction.

Schedule 1.1 – Page 23 







         
"Non-Consenting Lender" has the meaning specified therefor in Section 14.2(a) of the
Agreement. 

         
"Non-Defaulting Lender" means each Lender other than a Defaulting Lender.


         
"Obligations" means (a) all loans (including the Revolving Loans (inclusive of
Extraordinary Advances and Swing Loans)), debts, principal, interest (including
any interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), reimbursement or indemnification obligations with
respect to Reimbursement Undertakings or with respect to Letters of Credit
(irrespective of whether contingent), premiums, liabilities (including all
amounts charged to the Loan Account pursuant to the Agreement), obligations
(including indemnification obligations), fees (including the fees provided for
in the Fee Letter), Lender Group Expenses (including any fees or expenses that
accrue after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), guaranties, and all covenants and duties of any other kind and
description owing by any Loan Party arising out of, under, pursuant to, in
connection with, or evidenced by the Agreement or any of the other Loan
Documents and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all other
expenses or other amounts that Borrower is required to pay or reimburse by the
Loan Documents or by law or otherwise in connection with the Loan Documents, (b)
all debts, liabilities, or obligations (including reimbursement obligations,
irrespective of whether contingent) owing by Borrower or any other Loan Party to
an Underlying Issuer now or hereafter arising from or in respect of an
Underlying Letters of Credit, and (c) all Bank Product Obligations. Without
limiting the generality of the foregoing, the Obligations of Borrower under the
Loan Documents include the obligation to pay (i) the principal of the Revolving
Loans, (ii) interest accrued on the Revolving Loans, (iii) the amount necessary
to reimburse Issuing Lender for amounts paid or payable pursuant to Letters of
Credit or Reimbursement Undertakings and the amount necessary to reimburse
Underlying Issuer for amounts paid or payable pursuant to Letters of Credit,
(iv) Letter of Credit commissions, charges, expenses, and fees, (v) Lender Group
Expenses, (vi) fees payable under the Agreement or any of the other Loan
Documents, and (vii) indemnities and other amounts payable by any Loan Party
under any Loan Document. Any reference in the Agreement or in the other Loan
Documents to the Obligations shall include all or any portion thereof and any
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding. 

         
"OFAC" means The Office of Foreign Assets Control of the U.S. Department of
the Treasury. 

         
"Originating Lender" has the meaning specified therefor in Section 13.1(e) of the
Agreement. 

Schedule 1.1 – Page 24 







         
"Overadvance" means, as of any date of determination, that the Revolver Usage is
greater than any of the limitations set forth in Section 2.1 or Section 2.11. 

         
"Participant" has the meaning specified therefor in Section 13.1(e) of the Agreement.


         
"Participant Register" has the meaning set forth in Section 13.1(i) of the Agreement.


         
"Patent Security
Agreement" has the meaning specified therefor
in the Security Agreement. 

         
"Patriot Act" has the meaning specified therefor in Section 4.13 of the Agreement.


         
"Permitted Acquisition" means any Acquisition so long as: 

         
(a) no
Default or Event of Default shall have occurred and be continuing or would
result from the consummation of the proposed Acquisition and the proposed
Acquisition is consensual, 

         
(b) no
Indebtedness will be incurred, assumed, or would exist with respect to Borrower
or its Subsidiaries as a result of such Acquisition, other than Indebtedness
permitted under clauses (f), (g) and (h) of the definition of Permitted
Indebtedness and no Liens will be incurred, assumed, or would exist with respect
to the assets of Borrower or its Subsidiaries as a result or such Acquisition
other than Permitted Liens, 

         
(c) Borrower has provided Agent with written confirmation, supported by
reasonably detailed calculations, that on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to such
proposed Acquisition, are factually supportable, and are expected to have a
continuing impact, in each case, determined as if the combination had been
accomplished at the beginning of the relevant period; such eliminations and
inclusions to be mutually and reasonably agreed upon by Borrower and Agent)
created by adding the historical combined financial statements of Borrower
(including the combined financial statements of any other Person or assets that
were the subject of a prior Permitted Acquisition during the relevant period) to
the historical consolidated financial statements of the Person to be acquired
(or the historical financial statements related to the assets to be acquired)
pursuant to the proposed Acquisition, Borrower and its Subsidiaries (i) would
have been in compliance with the financial covenants in Section 7 of the Agreement
for the 4 fiscal quarter period ended immediately prior to the proposed date of
consummation of such proposed Acquisition, and (ii) are projected to be in
compliance with the financial covenants in Section 7 of the Agreement for the 4
fiscal quarter period ended one year after the proposed date of consummation of
such proposed Acquisition, 

         
(d) Borrower has provided Agent all memoranda and presentations delivered to
the Board of Directors of Borrower or the applicable Subsidiary describing the
rationale for such Acquisition, 

Schedule 1.1 – Page 25 







         
(e) immediately after giving effect to the consummation of the proposed
Acquisition, Borrower shall (i) be in compliance on a pro forma basis with the
covenant set forth in Section
7(a) of the Agreement recomputed for the most
recently ended month of Borrower, (ii) have Liquidity, as of such date, in an
amount equal to or greater than $30,000,000 and (iii) have Excess Availability,
as of such date, in an amount equal to or greater than $10,000,000, 

         
(f) Borrower has provided Agent with written notice of the proposed
Acquisition at least 15 Business Days prior to the anticipated closing date of
the proposed Acquisition and, not later than 5 Business Days prior to the
anticipated closing date of the proposed Acquisition, copies of the most recent
drafts of the acquisition agreement and other material documents relative to the
proposed Acquisition, and, in any event, promptly following the closing date of
the Acquisition, Borrower shall provide Agent with a copy of the executed
acquisition agreement and executed counterparts of all other agreements,
instruments or other documents pursuant to which such Acquisition has been
consummated (including, without limitation, any related management, non-compete,
employment, option or other material agreements), any schedules to such
agreements, instruments or other documents and all other material ancillary
agreements, instruments or other documents executed or delivered in connection
therewith, and 

         
(g) if the
subject assets or Equity Interests, as applicable, are being acquired directly
by a Borrower or one of its Subsidiaries that is a Loan Party, then, in
connection therewith, Borrower or the applicable Loan Party shall have complied
with Section 5.11 or 5.12 of the Agreement, as applicable, of the Agreement and, in the case of an
acquisition of Equity Interests, Borrower or the applicable Loan Party shall
have demonstrated to Agent that the new Loan Parties have received consideration
sufficient to make the joinder documents binding and enforceable against such
new Loan Parties. 

         
"Permitted Discretion" means a determination made in the exercise of reasonable
(from the perspective of a secured asset-based lender) business judgment.


         
"Permitted Dispositions" means: 

         
(a) sales,
abandonment, or other dispositions of Equipment that is substantially worn,
damaged, or obsolete or no longer used or useful in the ordinary course of
business and leases or subleases of Real Property not useful in the conduct of
the business of Borrower and its Subsidiaries, 

         
(b) sales
of Inventory to buyers in the ordinary course of business, 

         
(c) the use
or transfer of money or Cash Equivalents in a manner that is not prohibited by
the terms of the Agreement or the other Loan Documents, 

         
(d) the
licensing of patents, trademarks, copyrights, and other intellectual property
rights (i) on a non-exclusive basis in the ordinary course of business and (ii)
exclusively for specific geographic locations in the ordinary course of business
to the extent consistent with Borrower's past practice, 

         
(e) the
granting of Permitted Liens, 

Schedule 1.1 – Page 26 







         
(f) the
sale or discount, in each case without recourse, of accounts receivable arising
in the ordinary course of business, but only in connection with the compromise
or collection thereof, 

         
(g) any
involuntary loss, damage or destruction of property, 

         
(h) any
involuntary condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, or confiscation or requisition of use of property,


         
(i) the
leasing or subleasing of assets of Borrower or its Subsidiaries in the ordinary
course of business, 

         
(j) (i) the
sale or issuance of Equity Interests (other than Disqualified Equity Interests)
of Borrower, (ii) the sale or issuance of Equity Interests (other than
Disqualified Equity Interests) of any wholly-owned Subsidiary of a Loan Party
that is itself a Loan Party to such Loan Party and (iii) the sale or issuance of
Equity Interests (other than Disqualified Equity Interests) of any Subsidiary
that is not a Loan Party to any Subsidiary that is not a Loan Party, 

         
(k) (i) the
lapse of registered patents, trademarks, copyrights and other intellectual
property of Borrower and its Subsidiaries to the extent not economically
desirable in the conduct of their business or (ii) the abandonment of patents,
trademarks, copyrights, or other intellectual property rights so long as (in
each case under clauses (i) and (ii)), (A) such patents, trademarks, copyrights,
or other intellectual property rights do not generate material revenue, and (B)
such lapse or abandonment is not materially adverse to the interests of the
Lender Group, 

         
(l) the
making of Restricted Payments that are expressly permitted to be made pursuant
to the Agreement, 

         
(m) the
making of Permitted Investments,

         
(n) dispositions of assets acquired by Borrower and its Subsidiaries pursuant
to a Permitted Acquisition consummated within 12 months of the date of the
proposed disposition so long as (i) the consideration received for the assets to
be so disposed is at least equal to the fair market value (as determined in good
faith by Borrower or the applicable Subsidiary) of such assets, (ii) the assets
to be so disposed are not necessary or economically desirable in connection with
the business of Borrower and its Subsidiaries, and (iii) the assets to be so
disposed are readily identifiable as assets acquired pursuant to the subject
Permitted Acquisition,

         
(o) transfers of assets (i) from Borrower or any of its Subsidiaries to a
Loan Party and (ii) from any Subsidiary that is not a Loan Party to Borrower or
any Subsidiary, in each case, to the extent made in accordance with Section
6.10 of the Agreement,

         
(p) sales,
licenses or other dispositions of intangible assets not otherwise permitted in
clauses (a) through (o) above so long as (i) no Default or Event of Default then
exists or would arise therefrom, (ii) such sale, license or other disposition
would not reduce the recurring royalty revenue stream of assets not sold or
disposed of, (iii) such intangible asset does not generate material revenue,
(iv) such sale, license or other disposition is made at fair market value (as
determined in good faith by Borrower or the applicable Subsidiary), and (v) the
aggregate fair market value of all such intangible assets sold, licensed or
disposed of in any fiscal year (including the proposed disposition) would,
together with the aggregate fair market value of all assets sold or disposed of
pursuant to clause (q) of this definition of Permitted Dispositions, not exceed
$20,000,000, and

Schedule 1.1 – Page 27 







         
(q) sales
or dispositions of fixed assets not otherwise permitted in clauses (a) through
(o) above so long as (i) such sale or disposition would not reduce the recurring
royalty revenue stream of assets not sold or disposed of, (ii) no Default or
Event of Default then exists or would arise therefrom, (iii) such sale or
disposition is made at fair market value (as determined in good faith by
Borrower or the applicable Subsidiary), (iv) the aggregate fair market value of
all such assets disposed of in any fiscal year (including the proposed
disposition) would not exceed $20,000,000, (v) in any such sale or disposition,
at least 75% of the purchase price is paid to in cash, and (vi) within 5
Business Days of the consummation of any single sale or disposition or series of
related sales and dispositions in which the aggregate fair market value of all
such assets disposed of exceeds $2,500,000, Borrower shall deliver to Agent an
updated Borrowing Base Certificate. 

         
Permitted Earnouts means, with
respect to a Loan Party, any obligations of such Loan Party arising from an
Acquisition which are payable to the seller based on the achievement of
specified financial results over time and are subject to subordination terms (or
a subordination agreement in favor of Agent and Lenders) reasonably acceptable
to Agent.

         
"Permitted Indebtedness" means: 

         
(a) Indebtedness evidenced by the Agreement or the other Loan Documents, as
well as Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit, 

         
(b) Indebtedness set forth on Schedule
4.14 to the Agreement and any Refinancing
Indebtedness in respect of such Indebtedness, 

         
(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in
respect of such Indebtedness, 

         
(d) endorsement of instruments or other payment items for deposit,


         
(e) Indebtedness consisting of (i) unsecured guarantees incurred in the
ordinary course of business with respect to surety and appeal bonds, performance
bonds, bid bonds, appeal bonds, completion guarantee and similar obligations,
(ii) unsecured guarantees arising with respect to customary indemnification
obligations to purchasers in connection with Permitted Dispositions and (iii)
guarantees with respect to Indebtedness of Borrower or any of its Subsidiaries,
to the extent that the Person that is obligated under such guaranty could have
incurred such underlying Indebtedness, 

         
(f) unsecured Indebtedness of Borrower or any of its Subsidiaries that is
incurred on the date of the consummation of a Permitted Acquisition solely for
the purpose of consummating such Permitted Acquisition so long as (i) no Event
of Default has occurred and is continuing or would result therefrom, (ii) such
unsecured Indebtedness is not incurred for working capital purposes, (iii) such
unsecured Indebtedness does not mature prior to the date that is 6 months after
the Maturity Date, (iv) such unsecured Indebtedness does not amortize until 6
months after the Maturity Date, (v) unless, immediately after giving effect to
the consummation of such Permitted Acquisition, Borrower shall have Liquidity,
as of such date, in an amount equal to or greater than $30,000,000, such
unsecured Indebtedness does not provide for the payment of interest thereon in
cash or Cash Equivalents prior to the date that is 6 months after the Maturity
Date, and (vi) such Indebtedness is subordinated in right of payment to the
Obligations on terms and conditions reasonably satisfactory to Agent,

Schedule 1.1 – Page 28 







         
(g) (i)
Acquired Indebtedness so long as, and to the extent that, immediately after
giving effect to the incurrence of any such Acquired Indebtedness, (x) Borrower
shall be in compliance on a pro forma basis with the covenant set forth in
Section 7(a) recomputed for the most recently ended month of Borrower, (y) Borrower
shall have Liquidity, as of such date, in an amount equal to or greater than
$30,000,000 and (z) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, and (ii) any Refinancing Indebtedness in
respect of such Acquired Indebtedness, 

         
(h) (i)
deferred purchase price obligations arising in connection with Permitted
Acquisitions and (ii) Permitted Seller Notes, Permitted Earnouts and non-compete
payment obligations arising in connection with Permitted Acquisitions so long
as, and to the extent that, in the case of this clause (h)(ii), immediately
after giving effect to the issuance or incurrence of any such Permitted Seller
Notes, Permitted Earnouts and non-compete payment obligations, (x) Borrower
shall be in compliance on a pro forma basis with the covenant set forth in
Section 7(a) recomputed for the most recently ended month of Borrower, (y) Borrower
shall have Liquidity, as of such date, in an amount equal to or greater than
$30,000,000 and (z) no Default or Event of Default shall have occurred and be
continuing or would result therefrom (it being agreed and understood that for
the purposes of determining compliance with this clause (h)(ii), the amount of
any Permitted Earnout or non-compete payment obligation included in this amount
shall be calculated in accordance with GAAP); 

         
(i) Indebtedness in respect of the Convertible Subordinated Debt and any
Refinancing Indebtedness in respect thereof, 

         
(j) Indebtedness incurred in the ordinary course of business under
performance, surety, bid, statutory, or appeal bonds, 

         
(k) Indebtedness owed to any Person providing property, casualty, liability,
or other insurance to Borrower or any of its Subsidiaries, so long as the amount
of such Indebtedness is not in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the year in
which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year, 

         
(l) the
incurrence by Borrower or its Subsidiaries of Indebtedness under Hedge
Agreements that are incurred for the bona fide purpose of hedging the interest
rate, commodity, or foreign currency risks associated with Borrower's and its
Subsidiaries' operations and not for speculative purposes, 

Schedule 1.1 – Page 29 







         
(m) Indebtedness incurred in the ordinary course of business in respect of
credit cards, credit card processing services, debit cards, stored value cards,
purchase cards (including so-called "procurement cards" or "P-cards"), or Cash
Management Services, 

         
(n) unsecured Indebtedness of Borrower owing to former employees, officers,
or directors (or any spouses, ex-spouses, or estates of any of the foregoing)
incurred in connection with the repurchase by Borrower of the Equity Interests
of Borrower that has been issued to such Persons, so long as (i) no Default or
Event of Default has occurred and is continuing or would result from the
incurrence of such Indebtedness, (ii) the aggregate amount of all such
Indebtedness outstanding at any one time does not exceed $5,000,000, and (iii)
such Indebtedness is subordinated to the Obligations on terms and conditions
reasonably acceptable to Agent, 

         
(o) Indebtedness composing Permitted Investments, 

         
(p) unsecured Indebtedness incurred in respect of netting services, overdraft
protection, and other like services, in each case, incurred in the ordinary
course of business, 

         
(q) Indebtedness under this clause (q) in an aggregate outstanding principal
amount not to exceed $15,000,000 at any time outstanding for all Subsidiaries of
Borrower that are not Domestic Subsidiaries; provided, that such Indebtedness is
not directly or indirectly recourse to any of the Loan Parties or of their
respective assets, 

         
(r) Indebtedness owed to any Person providing property, casualty, liability,
or other insurance to Borrower or any of its Subsidiaries, so long as the amount
of such Indebtedness is not in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the year in
which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year, 

         
(s) accrual
of interest, accretion or amortization of original issue discount, or the
payment of interest in kind, in each case, on Indebtedness that otherwise
constitutes Permitted Indebtedness,

         
(t) any
other unsecured (or, to the extent such Lien constitutes a Permitted Lien,
secured) Indebtedness incurred by Borrower or any of its Subsidiaries, not
otherwise permitted in clauses (a) through (s) above, and any Refinancing
Indebtedness in respect of such Indebtedness, in an aggregate outstanding amount
not to exceed $25,000,000 at any one time, and

         
(u) any
other unsecured Subordinated Indebtedness incurred by Borrower or any of its
Subsidiaries, not otherwise permitted in clauses (a) through (s) above, so long
as no Default or Event of Default exists at the time of such incurrence or would
arise therefrom, and any Refinancing Indebtedness in respect of such
Indebtedness. 

         
"Permitted Intercompany
Advances" means loans and/or advances made
(a) pursuant to, and in accordance with, the Transfer Pricing Program, (b) by a
Loan Party to another Loan Party, (c) by a Subsidiary of Borrower that is not a
Loan Party to another Subsidiary of Borrower that is not a Loan Party, (d) by a
Subsidiary of Borrower that is not a Loan Party to a Loan Party, (e) by a Loan
Party to a Subsidiary of Borrower that is not a Loan Party for a purpose other
than to fund a Permitted Acquisition, and (f) by a Loan Party to a Subsidiary of
Borrower that is not a Loan Party for the purpose of funding a Permitted
Acquisition, so long as (i) in the case of clauses (b) and (d), the parties
thereto are party to the Intercompany Subordination Agreement, (ii) in the case
of clause (e), (x) no Default or Event of Default exists at the time any such
loan or advance is made or would arise therefrom and (y) the aggregate amount of
such loans and/or advances made after the Closing Date at any one time
outstanding shall not exceed $15,000,000 and (iii) in the case of clause (f),
(x) immediately after giving effect to the making of such loan or advance,
Borrower shall (1) be in compliance on a pro forma basis with the covenant set
forth in Section 7(a) of the Agreement recomputed for the most recently ended month of
Borrower, (2) have Liquidity, as of such date, in an amount equal to or greater
than $30,000,000 and (3) have Excess Availability, as of such date, in an amount
equal to or greater than $10,000,000 and (y) such loan or advance shall
immediately be repaid in full by such Subsidiary if such Permitted Acquisition
is not consummated within 30 days of the making of such loan or
advance.

Schedule 1.1 – Page 30 







         
"Permitted Investments" means: 

         
(a) Investments in (i) cash and Cash Equivalents, (ii) Foreign Cash
Equivalents, and (iii) readily marketable United States corporate securities
that are made in compliance with the Cash Management Policy, 

         
(b) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business, 

         
(c) advances made in connection with purchases of goods or services in the
ordinary course of business, 

         
(d) Investments received in settlement of amounts due to any Loan Party or
any of its Subsidiaries effected in the ordinary course of business or owing to
any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings
involving an account debtor or upon the foreclosure or enforcement of any Lien
in favor of a Loan Party or its Subsidiaries, 

         
(e) Investments owned by any Loan Party or any of its Subsidiaries on the
Closing Date and set forth on Schedule
P-1 to the Agreement, 

         
(f) guarantees permitted under the definition of Permitted Indebtedness,


         
(g) Permitted Intercompany Advances, 

         
(h) Investments in the form of capital contributions and the acquisition of
Equity Interests made by any Loan Party in any other Loan Party (other than
capital contributions to or the acquisition of Equity Interests of Borrower),


         
(i) Equity
Interests or other securities acquired in connection with the satisfaction or
enforcement of Indebtedness or claims due or owing to a Loan Party or its
Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the
ordinary course of business) or as security for any such Indebtedness or claims,


Schedule 1.1 – Page 31 







         
(j) deposits of cash made in the ordinary course of business to secure
performance of operating leases, 

         
(k) (i)
non-cash loans and advances to employees, officers, and directors of Borrower or
any of its Subsidiaries for the purpose of purchasing Equity Interests in
Borrower so long as the proceeds of such loans are used in their entirety to
purchase such Equity Interests in Borrower, and (ii) loans and advances to
employees and officers of Borrower or any of its Subsidiaries in the ordinary
course of business for any other business purpose and in an aggregate amount not
to exceed $5,000,000 at any one time, 

         
(l) Permitted Acquisitions, 

         
(m) Investments resulting from entering into (i) Bank Product Agreements, or
(ii) agreements relative to Indebtedness that is permitted under clause (j) of
the definition of Permitted Indebtedness, 

         
(n) equity
Investments by any Loan Party in any Subsidiary of such Loan Party which is
required by law to maintain a minimum net capital requirement or as may be
otherwise required by applicable law, 

         
(o) Investments held by a Person acquired in a Permitted Acquisition to the
extent that such Investments were not made in contemplation of or in connection
with such Permitted Acquisition and were in existence on the date of such
Permitted Acquisition,

         
(p) any
Investment by way of (i) merger, consolidation, reorganization or
recapitalization, (ii) reclassification of Equity Interests and (iii) transfer
of assets, in each case solely to the extent permitted by Section 6.3 of the
Agreement, 

         
(q) to the
extent constituting an Investment, any Restricted Payment to the extent
permitted by Section 6.7, and 

         
(r) so long
as no Event of Default has occurred and is continuing or would result therefrom,
any other Investments in an aggregate amount not to exceed $30,000,000 in any
fiscal year. 

         
"Permitted Liens" means 

         
(a) Liens
granted to, or for the benefit of, Agent to secure the Obligations, 

         
(b) Liens
for unpaid taxes, assessments, or other governmental charges or levies that
either (i) are not yet delinquent, or (ii) do not have priority over Agent's
Liens and the underlying taxes, assessments, or charges or levies are the
subject of Permitted Protests, 

         
(c) judgment Liens arising solely as a result of the existence of judgments,
orders, or awards that do not constitute an Event of Default under
Section 8.3
of the Agreement, 

         
(d) Liens
set forth on Schedule P-2 to the Agreement; provided, that to qualify as a
Permitted Lien, any such Lien described on Schedule P-2 to the Agreement shall
only secure the Indebtedness that it secures on the Closing Date and any
Refinancing Indebtedness in respect thereof,

Schedule 1.1 – Page 32 







         
(e) the
interests of lessors (and interests in the title of such lessors) under
operating leases and non-exclusive licensors (and interests in the title of such
licensors) under license agreements, 

         
(f) purchase money Liens or the interests of lessors under Capital Leases to
the extent that such Liens or interests secure Permitted Purchase Money
Indebtedness and so long as (i) such Lien attaches only to the asset purchased
or acquired and the proceeds thereof, and (ii) such Lien only secures the
Indebtedness that was incurred to acquire the asset purchased or acquired or any
Refinancing Indebtedness in respect thereof, 

         
(g) Liens
arising by operation of law in favor of warehousemen, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course
of business and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, 

         
(h) Liens
on amounts deposited to secure Borrower's and its Subsidiaries obligations in
connection with worker's compensation or other unemployment insurance,


         
(i) Liens
on amounts deposited to secure Borrower's and its Subsidiaries obligations in
connection with the making or entering into of bids, tenders, or leases in the
ordinary course of business and not in connection with the borrowing of money,


         
(j) Liens
on amounts deposited to secure Borrower's and its Subsidiaries reimbursement
obligations with respect to surety or appeal bonds obtained in the ordinary
course of business, 

         
(k) with
respect to any Real Property, easements, rights of way, and zoning restrictions
that do not materially interfere with or impair the use or operation thereof,


         
(l) to the
extent constituting a Permitted Disposition, licenses of patents, trademarks,
copyrights, and other intellectual property rights, 

         
(m) Liens
that are replacements of Permitted Liens to the extent that the original
Indebtedness is the subject of permitted Refinancing Indebtedness and so long as
the replacement Liens only encumber those assets that secured the original
Indebtedness, 

         
(n) rights
of setoff or bankers' liens upon deposits of funds in favor of banks or other
depository institutions, solely to the extent incurred in connection with the
maintenance of such Deposit Accounts in the ordinary course of business,


         
(o) Liens
granted in the ordinary course of business on the unearned portion of insurance
premiums securing the financing of insurance premiums to the extent the
financing is permitted under the definition of Permitted Indebtedness,


Schedule 1.1 – Page 33 








          (p) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods, 

         
(q) Liens
solely on any cash earnest money deposits made by Borrower or any of its
Subsidiaries in connection with any letter of intent or purchase agreement with
respect to a Permitted Acquisition,

         
(r) Liens
that secure Indebtedness permitted under clause (q) of the definition of
Permitted Indebtedness, and 

         
(s) other
Liens as to which the aggregate amount of the obligations secured thereby does
not exceed $15,000,000 so long as such Liens (x) shall not secure Indebtedness
for borrowed money in an aggregate amount to exceed $5,000,000 and (y) shall not
secure Indebtedness for letters of credit in an aggregate amount to exceed
$1,000,000. 

         
"Permitted Protest" means the right of Borrower or any of its Subsidiaries to
protest any Lien (other than any Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on Borrower's or its Subsidiaries' books and
records in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by Borrower or its Subsidiary, as
applicable, in good faith, and (c) Agent is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
or priority of any of Agent's Liens. 

         
"Permitted Purchase Money
Indebtedness" means, as of any date of
determination, Indebtedness (other than the Obligations, but including
Capitalized Lease Obligations), incurred after the Closing Date and at the time
of, or within 90 days after, the acquisition of any fixed assets for the purpose
of financing all or any part of the acquisition cost thereof, in an aggregate
principal amount outstanding at any one time not in excess of $35,000,000.


         
"Permitted Seller Note" means a promissory note containing subordination terms (or
subject to a subordination agreement in favor of Agent and Lenders) and other
terms and conditions reasonably satisfactory to Agent, with respect to unsecured
Indebtedness of any Loan Party incurred in connection with a Permitted
Acquisition and payable to the seller in connection therewith (excluding
Indebtedness arising from deferred purchase price obligations). 

         
"Person" means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof. 

         
"Platform" has the meaning specified therefor in Section 17.9(c) of the Agreement.


         
"Projections" means Borrower's forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a basis consistent
with Borrower's historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions. 

Schedule 1.1 – Page 34 







          "Pro Rata
Share" means, as of any date of
determination: 

         
(a) with
respect to a Lender's obligation to make all or a portion of the Revolving
Loans, with respect to such Lender's right to receive payments of interest,
fees, and principal with respect to the Revolving Loans, and with respect to all
other computations and other matters related to the Revolver Commitments or the
Revolving Loans, the percentage obtained by dividing (i) the Revolving Loan
Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all
Lenders, 

         
(b) with
respect to a Lender's obligation to participate in the Letters of Credit, with
respect to such Lender's obligation to reimburse Issuing Lender, and with
respect to such Lender's right to receive payments of Letter of Credit fees, and
with respect to all other computations and other matters related to the Letters
of Credit, the percentage obtained by dividing (i) the Revolving Loan Exposure
of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders;
provided,
that if all of the Revolving Loans have been repaid in full and all Revolver
Commitments have been terminated, but Letters of Credit remain outstanding, Pro
Rata Share under this clause shall be determined as if the Revolver Commitments
had not been terminated and based upon the Revolver Commitments as they existed
immediately prior to their termination, as such amounts may be reduced or
increased pursuant to assignments made in accordance with the provisions of
Section 13.1 of the Agreement, and

         
(c) [intentionally omitted] 

         
(d) with
respect to all other matters and for all other matters as to a particular Lender
(including the indemnification obligations arising under Section 15.7 of the
Agreement), the percentage obtained by dividing (i) the Revolving Loan Exposure
of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders, in
any such case as the applicable percentage may be adjusted by assignments
permitted pursuant to Section 13.1; provided, that if all of the Loans
have been repaid in full, all Letters of Credit have been made the subject of
Letter of Credit Collateralization, and all Revolver Commitments have been
terminated, Pro Rata Share under this clause shall be determined as if the
Revolving Loan Exposures had not been repaid, collateralized, or terminated and
shall be based upon the Revolving Loan Exposures as they existed immediately
prior to their repayment, collateralization, or termination, as such amounts may
be reduced or increased pursuant to assignments made in accordance with the
provisions of Section 13.1 of the Agreement. 

         
"Protective Advances" has the meaning specified therefor in Section 2.3(d)(i) of the
Agreement. 

         
"Public Lender" has the meaning specified therefor in Section 17.9(c) of the
Agreement. 

         
"Qualified Cash" means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of Borrower and the other Loan Parties
that is in Deposit Accounts or in Securities Accounts, or any combination
thereof, and which such Deposit Account or Securities Account is the subject of
a Control Agreement and is maintained by a branch office of the bank or
securities intermediary located within the United States. 

Schedule 1.1 – Page 35







          "Qualified Equity
Interest" means and refers to any Equity
Interests issued by Borrower (and not by one or more of its Subsidiaries) that
is not a Disqualified Equity Interest. 

         
"Quantum International" means Quantum International, Inc., a Delaware corporation.


         
"Real Property" means any estates or interests in real property now owned or
hereafter acquired by Borrower or its Subsidiaries and the improvements thereto.


         
"Real Property
Collateral" means any Real Property hereafter
acquired by Borrower or its Subsidiaries with a fair market value greater than
$2,500,000. 

         
"Receivable Reserves" means, as of any date of determination, those reserves that
Agent deems necessary or appropriate, in its Permitted Discretion and subject to
Section 2.1(c), to establish and maintain (including reserves for rebates, discounts,
warranty claims, and returns) with respect to the Accounts component of the
Borrowing Base or the Maximum Revolver Amount. 

         
"Record" means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.


         
"Reference Period" has the meaning set forth in the definition of EBITDA.


         
"Refinancing
Indebtedness" means refinancings, renewals,
or extensions of Indebtedness so long as: 

         
(a) such
refinancings, renewals, or extensions do not result in an increase in the
principal amount of the Indebtedness so refinanced, renewed, or extended, other
than by the amount of premiums paid thereon and the fees and expenses incurred
in connection therewith and by the amount of unfunded commitments with respect
thereto, 

         
(b) such
refinancings, renewals, or extensions do not result in a shortening of the
average weighted maturity (measured as of the refinancing, renewal, or
extension) of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions that, taken as a whole, are less favorable to the
interests of the Lenders than the terms and conditions of the Indebtedness being
refinanced, renewed, replaced, exchanged or extended, 

         
(c) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Obligations, then the terms and conditions of the refinancing,
renewal, or extension must include subordination terms and conditions that are
at least as favorable to the Lender Group as those that were applicable to the
refinanced, renewed, or extended Indebtedness, and 

Schedule 1.1 – Page 36 







          (d) the Indebtedness that is refinanced, renewed, or extended is not recourse
to any Person that is liable on account of the Obligations other than those
Persons which were obligated with respect to the Indebtedness that was
refinanced, renewed, or extended. 

         
"Register" has the meaning set forth in Section
13.1(h) of the Agreement. 

         
"Registered Loan" has the meaning set forth in Section 13.1(h) of the Agreement.


         
"Reimbursement
Undertaking" has the meaning specified
therefor in Section 2.11(a) of the Agreement. 

         
"Related Fund" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course and that is administered, advised or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers, advises or manages a Lender.


         
"Remedial Action" means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address Hazardous
Materials in the indoor or outdoor environment, (b) prevent or minimize a
release or threatened release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials required by Environmental Laws.


         
"Replacement Lender" has the meaning specified therefor in Section 2.13(b) of the
Agreement. 

         
"Report" has the meaning specified therefor in Section 15.16 of the Agreement.


         
"Required Lenders" means, at any time, Lenders having or holding more than 50%
of the aggregate Revolving Loan Exposure of all Lenders; provided, that (a) the
Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the
determination of the Required Lenders, and (b) at any time there are 2 or more
Lenders, "Required Lenders" must include at least 2 Lenders (who are not
Affiliates of one another). 

         
"Reserves" means, as of any date of determination, those reserves (other than
Receivable Reserves, Bank Product Reserves, and Inventory Reserves) that Agent
deems necessary or appropriate, in its Permitted Discretion and subject to
Section 2.1(c), to establish and maintain (including reserves with respect to (a) sums
that Borrower or its Subsidiaries are required to pay under the Agreement or any
other Loan Document (such as taxes, assessments, insurance premiums, or, in the
case of leased assets, rents or other amounts payable under such leases) and has
failed to pay, and (b) amounts owing by Borrower or its Subsidiaries to any
Person to the extent secured by a Lien on, or trust over, any of the Collateral
(other than a Permitted Lien), which Lien or trust, in the Permitted Discretion
of Agent likely would have a priority superior to Agent's Liens in and to such
item of the Collateral) with respect to the Borrowing Base or the Maximum
Revolver Amount. 

Schedule 1.1 – Page 37







          "Restricted
Payment" means to (a) declare or pay any
dividend or make any other payment or distribution, directly or indirectly, on
account of Equity Interests issued by Borrower (including any payment in
connection with any merger or consolidation involving Borrower) or to the direct
or indirect holders of Equity Interests issued by Borrower in their capacity as
such (other than dividends or distributions payable in Qualified Equity
Interests issued by Borrower, (b) purchase, redeem, make any sinking fund or
similar payment, or otherwise acquire or retire for value (including in
connection with any merger or consolidation involving Borrower) any Equity
Interests issued by Borrower, or (c) make any payment to retire, or to obtain
the surrender of, any outstanding warrants, options, or other rights to acquire
Equity Interests of Borrower now or hereafter outstanding. 

         
"Revolver Commitment" means, with respect to each Revolving Lender, its Revolver
Commitment, and, with respect to all Revolving Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Revolving Lender's name under the applicable heading on Schedule C-1 to the
Agreement or in the Assignment and Acceptance pursuant to which such Revolving
Lender became a Revolving Lender under the Agreement, as such amounts may be
reduced or increased from time to time pursuant to assignments made in
accordance with the provisions of Section
13.1 of the Agreement. 

         
"Revolver Sub-Facility
Amount" means $20,000,000; provided that, commencing
July 1, 2012, the foregoing amount shall be reduced on the first day of each
calendar quarter following the Closing Date by an amount equal to $1,000,000.


         
"Revolver Usage" means, as of any date of determination, the sum of (a) the
amount of outstanding Revolving Loans (inclusive of Swing Loans and Protective
Advances), plus (b) the amount of the Letter of Credit Usage. 

         
"Revolving Lender" means a Lender that has a Revolver Commitment or that has an
outstanding Revolving Loan. 

         
"Revolving Loan
Exposure" means, with respect to any
Revolving Lender, as of any date of determination (a) prior to the termination
of the Revolver Commitments, the amount of such Lender's Revolver Commitment,
and (b) after the termination of the Revolver Commitments, the aggregate
outstanding principal amount of the Revolving Loans of such Lender. 

         
"Revolving Loans" has the meaning specified therefor in Section 2.1(a) of the
Agreement. 

         
"Sanctioned Entity" means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is subject to a
country sanctions program administered and enforced by OFAC. 

         
"Sanctioned Person" means a person named on the list of Specially Designated
Nationals maintained by OFAC. 

         
"S&P" has the meaning specified therefor in the definition of Cash
Equivalents. 

Schedule 1.1 – Page 38







          "SEC" means the United States Securities and Exchange Commission
and any successor thereto. 

         
"Securities Account" means a securities account (as that term is defined in the
Code). 

         
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor statute. 

         
"Security Agreement" means that certain Security Agreement, dated as of even date
with the Agreement, executed and delivered by Borrower to Agent, as amended,
restated, supplemented or otherwise modified from time to time. 

         
"Service Inventory" means Inventory consisting of (x) component parts used to
repair defective products and (y) finished units provided for customer use
either permanently or on a temporary basis while a defective product is being
repaired and, in each case, specified as "service parts inventories" (or with a
similar description) on the balance sheet of Borrower. 

         
"Settlement" has the meaning specified therefor in Section 2.3(e)(i) of the Agreement.


         
"Settlement Date" has the meaning specified therefor in
Section 2.3(e)(i) of the Agreement. 

         
"Solvent" means, with respect to any Person as of any date of determination, that
(a) at fair valuations, the sum of such Person's debts (including contingent
liabilities) is less than all of such Person's assets, (b) such Person is not
engaged or about to engage in a business or transaction for which the remaining
assets of such Person are unreasonably small in relation to the business or
transaction or for which the property remaining with such Person is an
unreasonably small capital, and (c) such Person has not incurred and does not
intend to incur, or reasonably believe that it will incur, debts beyond its
ability to pay such debts as they become due (whether at maturity or otherwise),
and (d) such Person is "solvent" or not "insolvent", as applicable within the
meaning given those terms and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability (irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting Standard No. 5).


         
"Subordinated
Indebtedness" means (a) the Convertible
Subordinated Debt, (b) Permitted Seller Notes, (c) Indebtedness in respect of
Permitted Earnouts and (d) any other unsecured Indebtedness of Borrower or its
Subsidiaries incurred from time to time that is subordinated in right of payment
to the Obligations and that (i) is guaranteed by the Loan Parties, (ii) is not
subject to scheduled amortization, redemption, sinking fund or similar payment
and does not have a final maturity, in each case, on or before the date that is
six months after the Maturity Date, (iii) does not include any covenant
(including without limitation any financial covenant) or agreement that is more
restrictive or onerous on any Loan Party in any material respect than any
comparable covenant in the Agreement; provided, that with respect to any
financial covenant, such covenant shall not be more restrictive or onerous on
any Loan Party in any respect, and (iv) contains customary subordination
(including customary payment blocks during a payment default under any "senior
debt" designated thereunder) and turnover provisions and shall be limited to
cross-payment default and cross-acceleration to other "senior debt" designated
thereunder. 

Schedule 1.1 – Page 39 







         "Subsidiary" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns or controls the Equity Interests having ordinary voting power to elect a
majority of the Board of Directors of such corporation, partnership, limited
liability company, or other entity. 

         "Swing Lender" means WFCF or
any other Lender that, at the request of Borrower and with the consent of Agent
agrees, in such Lender's sole discretion, to become the Swing Lender under
Section 2.3(b) of the Agreement. 

         "Swing Loan" has the meaning
specified therefor in Section
2.3(b) of the Agreement. 

         "Swing Loan Exposure" means,
as of any date of determination with respect to any Lender, such Lender's Pro
Rata Share of the Swing Loans on such date. 

         "Taxes" means any taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein, and all interest, penalties or similar
liabilities with respect thereto. 

         "Tax Lender" has the meaning
specified therefor in Section
14.2(a) of the Agreement. 

         "Trademark Security Agreement" has the meaning specified therefor in the Security Agreement.


         "Transfer Pricing Program"
means transactions between Borrower and any of its Subsidiaries or between any
of Borrower's Subsidiaries pursuant to which Borrower, directly or indirectly,
reimburses expenses incurred by its Subsidiaries in the operation of the
business, in each case, in accordance with applicable law, in the ordinary
course of business and in a manner consistent with Borrower's past practice.


         "UCP 600" means the rules of
the Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce and in effect as of July 1,
2007 (or such later version thereof as may be in effect at the time of
issuance). 

         "Underlying Issuer" means
Wells Fargo or one of its Affiliates. 

         "Underlying Letter of Credit" means a Letter of Credit that has been issued by an Underlying Issuer.


Schedule 1.1 – Page 40







         "United
States" means the United States of America.


         "Unused Line Fee" has the
meaning specified therefor in Section
2.10(b) of the Agreement. 

         "Voidable Transfer" has the
meaning specified therefor in Section
17.8 of the Agreement. 

         "Wells Fargo" means Wells
Fargo Bank, National Association, a national banking association. 

         "WFCF" means Wells Fargo
Capital Finance, LLC, a Delaware limited liability company. 

Schedule 1.1 – Page 41







Schedule 3.1 

     The obligation
of each Lender to make its initial extension of credit provided for in the
Agreement is subject to the fulfillment, to the satisfaction of each Lender (the
making of such initial extension of credit by any Lender being conclusively
deemed to be its satisfaction or waiver of the following), of each of the
following conditions precedent: 

          (a) the Closing Date shall occur on or before March 31, 2012; 

         
(b) [reserved]; 

         
(c) Agent
shall have received financing statements in form appropriate to be filed in such
office or offices as may be necessary or, in the opinion of Agent, desirable to
perfect Agent's Liens in and to the Collateral; 

         
(d) Agent
shall have received each of the following documents, in form and substance
reasonably satisfactory to Agent, duly executed, and each such document shall be
in full force and effect: 

              
(i) the Control Agreements, 

              
(ii) the
Security Agreement, 

              
(iii) a
disbursement letter executed and delivered by Borrower to Agent regarding the
extensions of credit to be made on the Closing Date, the form and substance of
which is reasonably satisfactory to Agent, 

              
(iv) the
Fee Letter, 

              
(v) the
Intercompany Subordination Agreement, 

              
(vi) a
letter, in form and substance reasonably satisfactory to Agent, from Credit
Suisse ("Existing Lender") to Agent respecting the amount necessary to repay in full
all of the obligations of Borrower and its Subsidiaries owing to Existing Lender
and obtain a release of all of the Liens existing in favor of Existing Lender in
and to the assets of Borrower and its Subsidiaries, together with termination
statements and other documentation evidencing the termination by Existing Lender
of its Liens in and to the properties and assets of Borrower and its
Subsidiaries, and 

              
(vii) [list additional documents
required]; 

         
(e) Agent
shall have received a certificate from the Secretary of Borrower (i) attesting
to the resolutions of Borrower's Board of Directors authorizing its execution,
delivery, and performance of this Agreement and the other Loan Documents to
which Borrower is a party, (ii) authorizing specific officers of Borrower to
execute the same, and (iii) attesting to the incumbency and signatures of such
specific officers of Borrower; 

Schedule 3.1 – Page 1 







          (f) Agent shall have received copies of Borrower's Governing Documents, as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary of Borrower; 

         
(g) Agent
shall have received a certificate of status with respect to Borrower, dated
within 10 days of the Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of Borrower, which
certificate shall indicate that Borrower is in good standing in such
jurisdiction; 

         
(h) Agent
shall have received certificates of status with respect to Borrower, each dated
within 30 days of the Closing Date, such certificates to be issued by the
appropriate officer of the jurisdictions (other than the jurisdiction of
organization of Borrower) in which its failure to be duly qualified or licensed
would constitute a Material Adverse Effect, which certificates shall indicate
that Borrower is in good standing in such jurisdictions; 

         
(i) Agent
shall have received a certificate of insurance, together with the endorsements
thereto, as are required by Section
5.6, the form and substance of which shall be
reasonably satisfactory to Agent; 

         
(j) Borrower shall have exercised commercially reasonable efforts to deliver
to Agent Collateral Access Agreements with respect to the following locations:
(i) 3600 136 Place SE, Suite 300, Bellevue, WA 98006 and (ii) 10125 Federal
Drive, Colorado Springs, CO 80908; 

         
(k) Agent
shall have received an opinion of Loan Parties' counsel in form and substance
reasonably satisfactory to Agent; 

         
(l) after
giving effect to the initial extensions of credit hereunder and the payment of
all fees and expenses required to be paid by Borrower on the Closing Date under
this Agreement or the other Loan Documents, Borrower shall have Liquidity in
excess of $35,000,000; 

         
(m) Agent
shall have completed its business, legal, and collateral due diligence,
including (i) a collateral audit and review of Borrower's and its Subsidiaries
books and records and verification of Borrower's representations and warranties
to Lender Group, the results of which shall be reasonably satisfactory to Agent,
and (ii) an inspection of each of the locations where Borrower's and its
Subsidiaries' Inventory is located, the results of which shall be reasonably
satisfactory to Agent; 

         
(n) Agent
shall have completed (i) Patriot Act searches, OFAC/PEP searches and customary
individual background checks for Borrower, and (ii) OFAC/PEP searches and
customary individual background searches for Borrower's senior management and
key principals, the results of which shall be reasonably satisfactory to Agent;


         
(o) Agent
shall have received a set of Projections of Borrower for the 3 year period
following the Closing Date (on a year by year basis, and for the 1 year period
following the Closing Date, on a quarter by quarter basis), in form and
substance (including as to scope and underlying assumptions) reasonably
satisfactory to Agent; 

Schedule 3.1 – Page 2 







          (p) Borrower shall have paid all Lender Group Expenses incurred in connection
with the transactions evidenced by this Agreement; 

         
(q) Agent
shall have received copies of each of the Convertible Subordinated Debt
Documents, together with a certificate of the chief financial officer of other
duly authorized executive officer of Borrower certifying each such document as
being a true, correct, and complete copy thereof; and 

         
(r) Borrower and each of its Subsidiaries shall have received all licenses,
approvals or evidence of other actions required by any Governmental Authority in
connection with the execution and delivery by the Loan Parties of the Loan
Documents or with the consummation of the transactions contemplated thereby.


Schedule 3.1 – Page 3







Schedule
5.1 

     Borrower will
deliver to Agent, with copies to each Lender, each of the financial statements,
reports, or other items set forth set forth below at the following times in form
satisfactory to Agent: 

	
      as soon as available, but in any
      event within 30 days (45 days in the case of a month that is the end of
      one of Borrower's fiscal quarters) after the end of each month during each
      of Borrower's fiscal years 
	
      (a) an unaudited consolidated and
      consolidating balance sheet, income statement, calculation of EBITDA, and,
      solely in the case of a month that is the
      end of one of Borrower's fiscal quarters, statement of cash flow, in each
      case, covering Borrower's and its
      Subsidiaries' operations during such period, and 

      (b) a Compliance Certificate.
      

	
      as soon as available, but in any
      event within 90 days after the end of each of Borrower's fiscal years (the
      "Annual Deadline") 
	
      (c) consolidated and consolidating
      financial statements of Borrower and its Subsidiaries for each such fiscal
      year, which, in the case of the consolidated financial statements, are
      audited by independent certified public accountants reasonably acceptable
      to Agent and certified, without any qualifications (including any (A)
      "going concern" or like qualification or exception, (B) qualification or
      exception as to the scope of such audit, or (C) qualification which
      relates to the treatment or classification of any item and which, as a
      condition to the removal of such qualification, would require an
      adjustment to such item, the effect of which would, subject to Section 1.2
      of the Agreement, be to cause any noncompliance with the provisions of
      Section 7), by such accountants to have been prepared in accordance with
      GAAP (such audited financial statements to include a balance sheet, income
      statement, and statement of cash flow and, if prepared, such accountants'
      letter to management), and 

      (d) a Compliance Certificate.
      

      provided, however, that if Borrower has
      filed any of the items listed in clause (c) above in its Form 10-K annual
      report with the SEC within the applicable Annual Deadline, then Borrower
      shall (i) provide Agent written notice (in the Compliance Certificate or
      elsewhere) within the applicable Annual Deadline that Borrower has filed
      its Form 10-K annual report with the SEC and (ii) deliver to Agent by the
      applicable Annual Deadline copies of any items listed in clause (c) above
      that were not filed with the SEC. 





Schedule 5.1 – Page 1 







	
      as soon as available, but in any
      event within 45 days after the start of each of Borrower's fiscal years,
      
	
      (e) copies of Borrower's Projections,
      in form (including as to scope and underlying assumptions) reasonably
      satisfactory to Agent, in its Permitted Discretion, for the forthcoming 3
      years, year by year, and for the forthcoming fiscal year, quarter by
      quarter, certified by the chief financial officer of Borrower as being
      such officer's good faith estimate of the financial performance of
      Borrower during the period covered thereby. 

	
      if and when filed by Borrower (but
      only if requested by Agent) 
	
      (f) Form 10-Q quarterly reports, Form
      10-K annual reports, and Form 8-K current reports, 

      (g) any other filings made by Borrower
      with the SEC, and 

      (h) any other information that is
      provided by Borrower to its shareholders generally. 

	
      promptly, but in any event within 5
      Business Days after Borrower has knowledge of any event or condition that
      constitutes a Default or an Event of Default, 
	
      (i) notice of such event or condition
      and a statement of the curative action that Borrower proposes to take with
      respect thereto. 

	
      promptly after the commencement
      thereof, but in any event within 5 Business Days after the service of
      process with respect thereto on Borrower or any of its Subsidiaries,
      
	
      (j) notice of all actions, suits, or
      proceedings brought by or against Borrower or any of its Subsidiaries
      before any Governmental Authority which reasonably could be expected to
      result in a Material Adverse Effect.

	
      upon the request of Agent,
      
	
      (k) any other information reasonably
      requested relating to the financial condition of Borrower or its
      Subsidiaries. 



Schedule 5.1 – Page 2 







Schedule
5.2 

     Borrower will
provide Agent (and if so requested by Agent, with copies for each Lender) with
each of the documents set forth below at the following times in form
satisfactory to Agent: 

	
      Monthly (no later than the 30th day
      after the end of each month) 
	
      (a) a Borrowing Base
      Certificate,

      (b) a detailed report regarding
      Borrower's and its Subsidiaries' cash and Cash Equivalents, including an
      indication of which amounts constitute Qualified Cash, and 

      (c) if an Event of Default has
      occurred and is continuing or Average Liquidity for any month (or, with
      respect to the month ended March 31, 2012, partial month) is less than (x)
      $20,000,000, during the period commencing on the Closing Date and ending
      on September 30, 2012, or (y) $25,000,000, during the period from and
      after October 1, 2012, a reconciliation of Accounts, trade accounts
      payable, and Inventory of Borrower's general ledger accounts to its
      monthly financial statements including any book reserves related to each
      category. 

	
      Upon request by Agent
	
      (d) such other reports as to the
      Collateral or the financial condition of Borrower and its Subsidiaries, as
      Agent may reasonably request. 



Schedule 5.2 – Page 1