Exhibit 10.1


 


AMENDED AND RESTATED


 


TERM LOAN AGREEMENT


 


This Amended and Restated Term Loan Agreement (the “Agreement”)
is made and entered into as of March 6, 2008 (the “Closing Date”)
by and among Power-One, Inc., a Delaware corporation (“Borrower”),
PWER Bridge, LLC, a Nevada limited liability company (“Lender”), and,
with respect to Section 1.7, Stephens Investment Holdings, LLC, an
Arkansas limited liability company (“Guarantor”).


 


This Agreement amends and entirely restates that
certain Term Loan Agreement (the “Term Loan Agreement”), dated as of September 28,
2006, between Borrower and Lender (and for limited purposes referred to above,
Guarantor), and that certain Promissory Note, dated as of October 23,
2006, payable by the Borrower to the Lender in the principal amount of Fifty
Million Dollars ($50,000,000), as amended from time to time (the “Note”
and, together with the Term Loan Agreement, the “Loan Documents”).


 


SECTION 1

LOAN TERMS


 


1.1           Amount and Purpose.  Lender will extend the maturity of the
currently outstanding loan from Lender to Borrower in the principal amount of
Fifty Million Dollars ($50,000,000) (the “Loan”).  The Loan proceeds were used by Borrower for
funding a portion of the acquisition by Borrower or an affiliate thereof
contemplated by that certain Agreement of Purchase and Sale between Borrower
and Magnetek, Inc. dated as of September 28, 2006 (the “Purchase
Agreement”).  The Loan is not
revolving.  Any amount repaid may not be
reborrowed.  As of the date hereof, the
entire principal amount of the Loan remains outstanding.


 


1.2           Promissory Note.  The Loan will continue to be evidenced by the
Note.


 


1.3           Documentation.  At or prior to the Closing Date, Borrower
must deliver the following documents, fees and other items, executed and
acknowledged as appropriate, all in form and substance reasonably satisfactory
to Lender:


 


(a)           the Note;


 


(b)           evidence of Borrower’s due formation
and good standing, as well as due authorization and execution of the Loan
Documents;


 


(c)           that certain Warrant Agreement, dated
as of the Closing Date, between Borrower and Lender;


 


(d)           that certain Registration Rights
Agreement, dated as of the Closing Date, between Borrower and Lender;


 


(e)           that certain Security Agreement,
dated as of the Closing Date, between Borrower and Lender (the “U.S.
Security Agreement”);


 

















 


(f)            any other pledge agreements required
under foreign law to perfect a security interest in the Pledged Equity (as
defined in the Security Agreement), as agreed upon between Borrower and Lender
(together with the U.S. Security Agreement, the “Collateral Documents”);


 


(g)           all reasonable out-of-pocket closing
costs incurred by Lender in connection with the closing of the Loan (provided
that Lender gives Borrower a reasonably itemized estimate thereof at least
three business days before the Closing Date);


 


(h)           a legal opinion letter from Borrower’s
United States counsel substantially in the form attached hereto as Exhibit A;
and


 


(i)            a loan extension
fee payable to the order of Lender in an amount equal to one-percent (1%) of
the outstanding amount of the Note.


 


1.4           Loan Documents.  This Agreement and the Note are referred to
as the “Loan Documents.”


 


1.5           Maintenance Fee.  On each anniversary of the date of this
Agreement, Borrower shall pay to Lender a maintenance fee in an amount equal to
one percent (1%) of the outstanding principal balance of the Loan as of such
anniversary date.


 


1.6           Definitions.  The following terms shall have the meanings
set forth below:


 


                (a)           “Lien” means any mortgage,
lien, deed of trust, charge, pledge, security interest or other encumbrance.


 


                (b)           “Change of Control”
shall mean and include any of the following events, except for any such event
to which Lender has provided its prior written consent:


 


                                                (i)            the acquisition by any individual,
entity or group (within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934 (the “Exchange Act”)) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of 40% or
more of either (A) the then outstanding shares of common stock of the
Borrower or (B) the combined voting power of the then outstanding voting
securities of the Borrower entitled to vote generally in the election of
directors; or


 


                                                (ii)           within any 24-month period that
begins on or after the date hereof, the occurrence of a change in the
composition of the Board of Directors of the Borrower such that a majority of
the members of such Board are not Continuing Directors; or


 


                                                (iii)          the reorganization, merger,
consolidation transaction involving Borrower or sale or disposition of all or
substantially all the assets of the Borrower (each, a “Business Combination”),
as a result of which (A) the stockholders of the Borrower at the time
immediately prior to such Business Combination would own less than 60% of the
total equity of the surviving or resulting entity entitled to vote generally in
the election of directors, or (B) any person, entity or coordinated group
would become the beneficial owner of 40% or more of the 


 


2

















 


outstanding shares of common
stock of the corporation resulting from such Business Combination.


 


                (c)           “Continuing Directors” shall
mean, as of any date of determination, any member of the Board of Directors of
the Borrower who (i) was a member of such Board on the date hereof or (ii) was
nominated for election or elected to such Board with the affirmative vote of a
majority of the directors who were either members of such Board on the date
hereof or whose nomination or election was so previously approved.


 


                (d)           “Permitted Liens” shall mean (i) Liens
for taxes, fees, assessments or other governmental charges or levies, either
not delinquent or remain payable without penalty or being contested in good
faith by appropriate proceedings; (ii) any attachment or judgment Lien not
constituting an Event of Default under Section 6.1(g); and (iii) landlords’,
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens, and vendors’ Liens imposed by statute or common law not securing the
repayment of Indebtedness, arising in the ordinary course of business which are
not overdue for a period of more than 60 days or which are being contested in
good faith and by appropriate proceedings and the amount of which, in the
aggregate, does not exceed Five Million Dollars ($5,000,000).


 


                (e)           “Permitted Securities” shall
mean any security issued under any Borrower employee, officer and/or director
stock or option plan reflected in the financial statements contained in the September 2007
Form 10-Q, whether directly or upon exercise of any option or other
security issued thereunder.


 


                (e)           “September 2007 Form 10-Q”
means the Borrower’s quarterly report on Form 10-Q for the quarter ended September 30,
2007.


 


1.7           Acknowledgement and Release.  Borrower hereby acknowledges that to date
Lender and Guarantor have fully performed all of their obligations under the
Term Loan Agreement, including, but not limited to, the obligation to fund the
Loan.  As a portion of the consideration
for Lender’s agreement to extend the maturity of the Loan, Borrower hereby
fully releases, acquits and discharges Guarantor from any and all obligations,
liabilities and responsibilities arising in any manner under or in connection
with the Loan, including, but not limited to, any and all obligations of
Guarantor under Section 1.7 of the Term Loan Agreement.  Borrower hereby agrees that any and all
obligations, liabilities and responsibilities of Guarantor arising in any
manner under or in connection with the Loan, including, but not limited to, any
and all obligations of Guarantor under Section 1.7 of the Term Loan
Agreement are hereby terminated and fully extinguished.  In addition, Borrower hereby fully releases,
acquits and discharges Lender from any and all obligations, liabilities,
claims, damages and responsibilities arising in any manner under or in
connection with the Loan prior to the date hereof.


 


SECTION 2

COVENANTS OF BORROWER


 


So long as the Loan is
outstanding:


 


2.1           Compliance with Law.  Borrower and its subsidiaries will comply
with all existing and future laws, regulations, orders and requirements of, and
all permits and approvals 


 


3

















 


from, and agreements with
and commitments to, all governmental, judicial or legal authorities having
jurisdiction over Borrower and Borrower’s business, except to the extent such
non-compliance would not have a Material Adverse Effect.  As used in this Agreement, “Material
Adverse Effect” shall mean any event or circumstances that would be
reasonably expected to (a) have a material adverse effect on the business
condition (financial or otherwise), operations, or properties of Borrower and
its subsidiaries, taken as a whole, or (b) materially adversely affect
Borrower’s ability to repay the Loan, or (c) materially adversely affect
the value of the collateral given to secure the Loan, taken as a whole, or the
rights or ability of the Lender to realize the value of such collateral, taken
as a whole.


 


2.2           Use of Proceeds.  Borrower shall use the Loan proceeds for the
purpose set forth in Section 1.1 above and for no other purpose
whatsoever.


 


2.3           Site Visits.  Borrower shall permit Lender, its agents and
representatives the right to enter and visit Borrower’s offices at any reasonable
time to inspect Borrower’s books and records and make copies thereof and to
confirm compliance with the terms of this Agreement, and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance written notice to Borrower, and Borrower shall pay the
reasonable out-of-pocket expenses of Lender in connection with one such site
visit per 6-month period.  Lender is
under no duty to examine any books
or records and Lender shall not incur any obligation or liability by reason of
not making any such inspection or inquiry. 
Any site visit, observation or examination by Lender is solely for the
purpose of protecting and preserving Lender’s rights under the Loan Documents,
the Collateral Documents or any of the Documentation referred to in Section 1.3
of this Agreement and shall be subject to the confidentiality provisions set
forth in Section 7.18 of this Agreement. 
Lender shall use reasonable efforts to avoid interfering with Borrower’s
business in connection with the activities permitted under this Section.


 


2.4           Insurance.  Borrower, for itself and on behalf of its
subsidiaries must maintain insurance on the respective businesses similar in
all material respects to that historically maintained pursuant to their
standard operating practices.


 


2.5           Preservation of Rights.  Borrower and its subsidiaries must obtain,
preserve and maintain in good standing, as applicable, all material legal
rights, privileges and franchises necessary or desirable for the conduct of
their businesses, except to the extent failure to so obtain would not have a
Material Adverse Effect.


 


2.6           Payment of Expenses.  Borrower must pay all reasonable
out-of-pocket costs and expenses incurred by Lender in connection with the
making, disbursement and administration of the Loan, as well as any revisions,
extensions, renewals or “workouts” of the Loan, and in the exercise of any of
Lender’s rights or remedies under this Agreement.  Such costs and expenses include reasonable
out-of-pocket legal fees and expenses of Lender paid to Lender’s outside
counsel and any other reasonable out-of-pocket fees and costs for
services.  All such sums incurred by
Lender and not reimbursed by Borrower within 30 days of Lender’s written
request to Borrower are considered additional loans to Borrower and bearing
interest at the Past-Due Rate provided in the Note.


 


4

















 


2.7           Financial and
Other Information.


 


(a)           Borrower will make all required
regulatory filings on a timely basis, including filing on Securities Exchange
Commission (“SEC”) Forms 10-K and 10-Q. 
Such filings will, in all material respects, be in the form required by
applicable SEC rules and regulations and include the financial statements
and other financial information that are required by applicable law and
regulations to be included therein by Borrower.


 


(b)           Borrower shall provide to Lender
copies of its United States federal tax returns, and any extensions thereof,
together with all supporting schedules, within thirty (30) days of filing date.


 


(c)           On written request by Lender to
Borrower, Borrower must promptly provide Lender with any other financial or
other information concerning its affairs and properties as Lender may
reasonably request.


 


2.8           Notices.  Borrower must promptly notify Lender in
writing of:


 


(a)           Any litigation affecting Borrower or
any of its subsidiaries where the amount claimed is Five Hundred Thousand
Dollars ($500,000) or more;


 


(b)           Any notice that Borrower’s or any of
its subsidiaries’ business fails in any respect to comply with any applicable
law, regulation or court order, if such non-compliance would have a Material
Adverse Effect; and


 


(c)           The occurrence of any Material
Adverse Effect.


 


2.9           Notice of Change.  Borrower must give Lender prior written
notice of any change in:


 


(a)           The location of its chief executive
office; and


 


(b)           Borrower’s name, business structure
or state of formation.


 


SECTION 3

NEGATIVE COVENANTS OF BORROWER


 


So long as the Loan remains outstanding:


 


3.1           Negative
Covenants.  Without Lender’s prior
written consent, Borrower must not engage in or do any of the following:


 


(a)           Sell any assets for less than fair
market price except in the ordinary course of business;


 


(b)           Create, incur,
assume or suffer to exist any further indebtedness, whether secured or
unsecured, or permit any of its subsidiaries to create, incur, assume or suffer
to exist any further indebtedness, whether secured or unsecured, other than (1) any
revolving 


 


5

















 


indebtedness of Power-One
Italy Holdings S.p.A or any subsidiary thereof in connection with that certain
existing revolving credit facility existing as of October 23, 2006, (2) indebtedness
described in the financial statements described in Section 4.6, (3) additional
junior or subordinated indebtedness of no more than Five Million US Dollars
(US$5,000,000) in the aggregate, and (4) indebtedness
contemplated under the Loan Documents or the Collateral Documents;


 


(c)           Merge, dissolve, liquidate, combine,
consolidate with or into another entity, lease or dispose of (whether in one
transaction or in a series of related transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to or in favor of any
other person or entity, except for (1) transactions not involving a Change
of Control in which Borrower is the survivor that do not cause a Material
Adverse Effect, and (2) transactions by and among Borrower’s subsidiaries
as part of a reorganization;


 


(d)           Engage in any material line of
business substantially different from those lines of business conducted by
Borrower or any lines of business acquired by Borrower pursuant to the
Acquisition Agreement as of the closing of the Loan or any business reasonably
related or incidental thereto;


 


(e)           Engage in any private or open market
purchase of its outstanding capital stock or pay any dividends with respect to its outstanding capital stock,
except pursuant to the stock repurchase program authorized by Borrower as of September 28,
2006;


 


(f)            Amend, modify or change its
certificate of incorporation or bylaws in a manner materially adverse to
Lender; or


 


(g)           Create, incur, assume or suffer to
exist any pledge or grant of a security interest in any asset of the Company or
its subsidiaries, other than Permitted Liens; or


 


(h)           Issue any
securities, other than Permitted Securities.


 


SECTION 4

REPRESENTATIONS AND WARRANTIES BY BORROWER


 


Borrower represents and warrants to Lender that:


 


4.1           Formation.  Borrower (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own
its assets and carry on its business, and (ii) execute, deliver and
perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is
licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, except where the failure to be so licensed would not
have a Material Adverse Effect.


 


4.2           Authority.  The execution, delivery and performance by
Borrower of each Loan Document and each Collateral Document to which it is
party have been duly authorized by all necessary corporate, company or other
organizational action, and do not (a) contravene the terms 


 


6

















 


of Borrower’s certificate of
incorporation or bylaws; (b) conflict with or result in any breach or
contravention of, or the creation of any lien under (i) any contractual
obligation to which Borrower is a party, or (ii) any order, injunction,
writ or decree of any governmental authority or any arbitral award to which
Borrower or its property is subject; (c) violate any law; or (d) result
in a limitation on any licenses, permits or other approvals applicable to the
business, operations or properties of Borrower, except, in the case of (b), (c) or
(d), where the conflict, breach, violation or limitation would not have a
Material Adverse Effect.


 


4.3           Governmental Authorization; Other
Consents.  No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
governmental authority or any other person with respect to any material
contractual obligation is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Borrower of this
Agreement or any other Loan Document or Collateral Document, other than those
that have already been obtained and are in full force and effect and other than
those which the failure to obtain would not have a Material Adverse Effect.


 


4.4           Binding Effect.  This Agreement and each other Loan Document
and Collateral Document have been duly executed and delivered by Borrower.  This Agreement and each other Loan Document
and Collateral Document constitutes a legal, valid and binding obligation of
Borrower, enforceable in accordance with its terms except as enforceability may
be limited by applicable bankruptcy or similar laws or by equitable principles
relating to enforceability.


 


4.5           Litigation.  Except as set forth on Schedule 4.5,
there are no actions, suits, investigations, criminal prosecutions, civil
investigative demands, impositions of criminal or civil fines and penalties,
proceedings, claims or disputes pending or, to the actual knowledge of Borrower
(without any obligation to take any investigation or inquiry), threatened in
writing, at law, in equity, in arbitration or before any governmental
authority, by or against Borrower or against any of their properties or
revenues that (a) purport to prohibit or restrain this Agreement or any
other Loan Document or Collateral Document, or (b) if determined
adversely, could reasonably be expected to have a Material Adverse Effect.


 


4.6           Financial Information.  The unaudited financial statements for the
fiscal quarter ended September 30, 2007 included in the September 2007
Form 10-Q filed by Borrower on November 9, 2007 fairly and accurately
represent in all material respects the financial condition (including all
material contingent liabilities) of Borrower as of September 30, 2007 in
accordance with generally accepted accounting principles consistently applied
(except for the absence of footnotes and for year-end adjustments), unless
otherwise noted therein.  Since the dates
of such financial statements, there has been no Material Adverse Effect.


 


4.7           Borrower Not a “Foreign Person”.  Borrower is not a “foreign person” within the
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended from time to time.


 


4.8           Status of Property and Assets.  To Borrower’s knowledge, Borrower and its
subsidiaries have (A) good and marketable title to its owned real
properties, (B) valid title to all other assets reflected in its financial
statements as being owned by them, subject to no lien, mortgage, pledge, charge
or encumbrance of any kind except those securing indebtedness 


 


7

















 


described in such financial
statements or which do not materially affect the present or proposed use of
such properties or assets and would not cause a Material Adverse Effect, and (C) valid
and subsisting leases with respect to leased properties, with only such
exceptions as in the aggregate are not material and do not interfere with the
conduct of the business of Borrower and its subsidiaries and would not cause a
Material Adverse Effect.  To Borrower’s
actual knowledge, there exists no default under the provisions of any lease,
contract or other obligation to which Borrower is a party which may result in a
Material Adverse Effect.


 


4.9           Tax Matters.  Borrower and its subsidiaries have filed all
federal, state and other tax returns and reports which have been required to be
filed and have paid all material taxes indicated by said returns and all
assessments received by them to the extent that such taxes have become due and
there is no tax deficiency that has been asserted in writing against Borrower
that might have a Material Adverse Effect. 
All material tax
liabilities are adequately provided for on the books of Borrower and its
subsidiaries.


 


4.10         Licenses and Intellectual Property.  Borrower and its subsidiaries hold all
licenses, authorizations, charters, certificates and permits from governmental
authorities which are necessary to the conduct of their businesses, except to
the extent failure to hold
would not have a Material Adverse Effect,
and neither Borrower nor any of its subsidiaries has received written
notice of any proceeding relating to the revocation or modification of any of
such licenses, authorizations, charters, certificates or permits.  Borrower and its subsidiaries own or
otherwise possess rights to the
patents, patent rights, licenses, inventions, copyrights, trademarks, service
marks and trade names presently employed by them in connection with the
businesses now operated by them, and neither Borrower nor any of its
subsidiaries has received any notice of infringements of or conflict with
asserted rights of others with respect to any of the foregoing, except where
such infringement or conflict would not reasonably be expected to result in a
Material Adverse Effect.


 


4.11         Labor Matters.  No labor dispute is pending or, to the knowledge of Borrower,
threatened in writing against Borrower’s or any of its subsidiaries’ employees
which could result in a Material Adverse Effect.  No collective bargaining agreement exists
with any of Borrower’s United States employees and, to Borrower’s knowledge, as of the date hereof, there is no
union organizing efforts pending
with respect to Borrower’s United States employees.


 


4.12         Political Contributions.  To Borrower’s knowledge, neither Borrower nor
any of its subsidiaries has at any time during the last five (5) years (a) made any
unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (b) made any payment to any federal or state
governmental officer or official, or other person charged with similar public
or quasi-public duties, other than payments required or permitted by the laws
of the United States or any jurisdiction thereof, in any case that would result
in a Material Adverse Effect.


 


4.13         Hazardous Substances.  Without limiting the generality of any of the
foregoing representations (A) none of the operations of Borrower or its
subsidiaries is in violation of any applicable law (federal, state, local or
foreign), statute, rule, regulation, decision or order of any regulatory
authority or governmental body or any court relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection of human
health and safety or the 


 


8

















 


protection or restoration of
the environment or human exposure to hazardous or toxic substances or wastes,
pollutants or contaminants, except to the
extent such violations, if any, in the aggregate, would not have a Material
Adverse Effect; (B) neither Borrower nor any of its subsidiaries has been
notified in writing that it is under investigation or under review by any
regulatory authority or governmental body with respect to compliance with any
environmental law which could reasonably be expected to cause a Material Adverse Effect; (C) neither Borrower
nor any of its subsidiaries has any liability in connection with the past
generation, use, treatment, storage, disposal or release of any hazardous
material, except to the extent such liability would not have a Material Adverse
Effect; (D) there is no hazardous material that may reasonably be expected
to pose any material risk to safety, health, or the environment, on, under or
about any property owned, leased or operated by Borrower or any of its
subsidiaries or, to the knowledge of Borrower, any property adjacent to any
such property, which liability could reasonably be expected to cause a Material
Adverse Effect; and (E) there has heretofore been no release of any
hazardous material on, under or about such property, or, to the knowledge of
Borrower, any such adjacent property, which release could reasonably be
expected to cause a Material Adverse Effect. 
None of the currently owned real property or, to the actual knowledge of
Borrower, currently leased or previously owned real property of Borrower or any
of its subsidiaries is listed or proposed for listing on the National
Priorities List pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or on the Comprehensive
Environmental Response Compensation Liability Information System List or any
Market, subject only to official notice of issuance.


 


4.14         Accounting Matters.  Borrower maintains systems of internal accounting and disclosure controls and
procedures sufficient to provide in all material respects reasonable assurances
that (A) transactions are executed in accordance with management’s general
or specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (C) access to assets is permitted only
in accordance with management’s general
or specific authorization; (D) the recorded accountability for assets is
compared with existing material assets at reasonable intervals and appropriate action is taken with
respect to any differences; and (E) accounts, notes and other receivables
and inventory are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely basis;
subject only to such exceptions as, in the aggregate, would not result in a
material misstatement of Borrower’s accounts or transactions or in any Material
Adverse Effect.  Borrower has complied with
its systems of internal accounting and disclosure controls and procedures in
all material respects and has not received a written notification from any
accountants, independent auditors or other consultants challenging the adequacy
or requesting modification of such systems. 
Borrower’s systems of internal accounting and disclosure controls and
procedures in all material respects (X) are sufficient to ensure that
information required to be disclosed by Borrower in the reports that it files
and submits to the SEC under the Securities
Exchange Act of 1934, as amended, is accumulated, recorded, processed,
communicated to Borrower’s principal executive officer and principal financial
officer, summarized and reported within the time periods specified in the SEC’s
rules and forms, (Y) contain no deficiencies in the design or
operation of such controls and procedures which could materially adversely
affect Borrower’s ability to so accumulate, record, process, communicate,
summarize and report financial and other relevant information and (Z) are
sufficient to satisfy Section 302 of the Sarbanes-Oxley Act of 2002 and
related rules promulgated thereunder.


 


9






 












SECTION 5

REPRESENTATIONS AND WARRANTIES BY LENDER


 


Lender represents and warrants to Borrower that:


 


5.1           Formation.  Lender (a) is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Nevada, and (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to (i) own
its assets and carry on its business, and (ii) execute, deliver and
perform its obligations under this Agreement.


 


5.2           Authority.  The execution, delivery and performance by
Lender of this Agreement have been duly authorized by all necessary company
action, and do not (a) contravene the terms of Lender’s articles of
organization or operating agreement; (b) conflict with or result in any
breach or contravention of, or the creation of any lien under (i) any
contractual obligation to which Lender is a party, or (ii) any order,
injunction, writ or decree of any governmental authority or any arbitral award
to which Lender or its property is subject; or (c) violate any law.


 


5.3           Governmental Authorization; Other
Consents.  No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
governmental authority or any other person with respect to any material
contractual obligation is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Lender of this
Agreement, other than those that have already been obtained and are in full
force and effect.


 


5.4           Binding Effect.  This Agreement has been duly executed and
delivered by Lender.  This Agreement
constitutes a legal, valid and binding obligation of Lender, enforceable in
accordance with its terms except as enforceability may be limited by applicable
bankruptcy or similar laws or by equitable principles relating to
enforceability.


 


5.5           No Material Adverse Effect.  Lender acknowledges and agrees that the
granting of the security interests and pledge of stock as contemplated by the
Collateral Documents, the extension of the Maturity Date as contemplated under
the Loan Documents, and the granting of Warrants under the Warrant Agreement,
shall not constitute a Material Adverse Effect.


 


SECTION 6

DEFAULT AND REMEDIES.


 


6.1           Events of Default.  Borrower will be in default under this
Agreement upon the occurrence of any one or more of the following events (“Event
of Default”).


 


(a)           Borrower fails to make any payment
due under the Note, within five (5) days after the date due (provided that
such five (5) day period shall not apply on any payment due on the
Maturity Date, as defined in the Note), or Borrower fails to make any payment
demanded by Lender under any other Loan Document or under any Collateral
Document, within ten (10) days after the date due or after written demand
by Lender if no due date is stated therefor; or


 


10

















 


(b)           Borrower fails to timely observe,
perform and comply with any covenant contained in this Agreement other than
those referred to in clause (a), and does not either cure that failure within
thirty (30) days after written notice from Lender, or, if the default cannot be
cured in thirty (30) days, within a reasonable time but not to exceed ninety
(90) days after written notice; or


 


(c)           Borrower becomes insolvent or the
subject of any bankruptcy or
other voluntary or involuntary proceeding, in or out of court, for the
adjustment of debtor-creditor relationships; or


 


(d)           Borrower dissolves, terminates, or
liquidates; or


 


(e)           Any representation or warranty made
or given by Borrower in this Agreement or any other Loan Document or any
Collateral Document or any of the Documentation referred to in Section 1.3
of this Agreement proves to have been false or misleading in any material
respect at the time given; or


 


(f)            A default is declared or occurs
under any of the other Loan Documents or under any of the Collateral Documents
(and, if a cure period is provided with respect to said default, said default
is not fully cured within the period provided in said Loan Document for cure of
said default); or


 


(g)           One or more final, non-appealable
judgments from a court or courts of competent jurisdiction in an amount which,
in the aggregate at any given time, is greater than Five Million Dollars
($5,000,000) in excess of any insurance coverage is entered against Borrower;
or


 


(h)           Borrower or any of its subsidiaries
defaults under any agreement or instrument for indebtedness or borrowed money
that results in the acceleration of such indebtedness or the initiation of
legal proceedings in connection therewith; or


 


(i)            Borrower experiences a Material
Adverse Effect; or


 


(j)            There occurs a
Change of Control; or


 


(k)           Borrower violates
any of the negative covenants set forth in Section 3.1 of this Agreement
and fails to cure such violation within thirty (30) days following the
occurrence of such violation.


 


6.2           Remedies.  If an Event of Default occurs under this
Agreement, (a) Lender may exercise any right or remedy which it has under any of the Loan Documents or
any Collateral Document or any of the Documentation referred to in Section 1.3
of this Agreement, or which is otherwise available at law or in equity or by
statute, and all of Lender’s rights and remedies shall be cumulative, (b) Lender
shall have the right to set-off and apply, to the extent thereof and to the
maximum extent permitted by law, any and all deposits, funds, or assets at any
time held and any and all other indebtedness at any time owing by Lender to or
for the credit or account of Borrower against any indebtedness owning under the
Note immediately upon the occurrence of any default notwithstanding any notice
requirements, grace or cure periods, and
(c) all of 


 


11

















 


Borrower’s obligations under
the Loan Documents and the Collateral Documents shall become immediately due
and payable without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or other notices or demands of any
kind or character, all at Lender’s option, exercisable in its sole discretion.


 


6.3           Cure Periods.  All notice and cure periods provided in this
Agreement or in any Loan Document shall run concurrently with any notice or
cure periods provided by law.


 


SECTION 7

MISCELLANEOUS PROVISIONS


 


7.1           No Waiver; Consents.  No alleged waiver by Lender is effective
unless in writing, and no waiver may be construed as a continuing waiver.  No waiver is implied from any delay or
failure by Lender to take action on account of any default of Borrower.  Consent by Lender to any act or omission by
Borrower may not be construed as a consent to any other or subsequent act or
omission.


 


7.2           No Third Parties Benefited.  This Agreement is made and entered into for
the sole protection and benefit of Lender and Borrower and their successors and
assigns.  No trust fund is created by
this Agreement and no other persons or entities have any right of action under
this Agreement or any right to the Loan funds.


 


7.3           Notices.  Any and all notices and demands by either
party hereto to the other party, required or desired to be given hereunder
shall be in writing and shall be validly given only if (i) personally
delivered, (ii) deposited in the United States mail, certified or
registered, postage prepaid, return receipt requested, or (iii) if made by
Federal Express or other delivery service which keeps records of deliveries and
attempted deliveries.  Service shall be
conclusively deemed made on the first business day delivery is attempted or
upon receipt, whichever is sooner, and sent to the address set forth below the
receiving party’s signature set forth below. Those addresses may be changed by
either party by notice to the other party, which notice of change shall be
effective upon actual receipt by the other party.


 


7.4           Attorneys’ Fees.  If any lawsuit or arbitration is commenced
which arises out of, or which relates to this Agreement, the Loan Documents or
the Loan, including any alleged tort action, regardless of which party
commences the action, Borrower agrees to pay all of Lender’s reasonable
out-of-pocket costs and expenses, including reasonable out-of-pocket attorneys’
fees, which may be incurred in connection with such lawsuit or
arbitration.  In all other situations,
including any bankruptcy or other voluntary or involuntary proceeding, in or
out of court, for the adjustment of debtor-creditor relationships, Borrower
agrees to pay all of Lender’s reasonable out-of-pocket costs and expenses,
including reasonable out-of-pocket attorneys’ fees, which may be incurred in any effort to collect or enforce the Loan
or any part of it or any term of any Loan Document or any Collateral Document.


 


7.5           Heirs, Successors and Assigns.  The terms of this Agreement shall bind and
benefit the heirs, legal representatives, successors and assigns of the
parties; provided, however, that neither Lender nor Borrower may assign this
Agreement without the prior written consent of the other.


 


12

















 


7.6           Interpretation.  The language of this Agreement must be
construed as a whole according to its fair meaning, and not strictly for or
against any party.  The word “include(s)”
means “include(s), without limitation,” and the word “including” means “including,
but not limited to.”


 


7.7           Time of the Essence.  Time is of the essence in the performance of
this Agreement and the other Loan Documents.


 


7.8           Severability.  If it is determined by a court of competent
jurisdiction, government action or binding arbitration that any provision of
this Agreement (or part thereof) is invalid, illegal, or otherwise
unenforceable in any jurisdiction, such provision shall be enforced in such
jurisdiction as nearly as possible in accordance with the stated intention of
the parties, while the remainder of this Agreement shall remain in full force
and effect and bind the parties according to its terms, and any such
determination shall not invalidate or render unenforceable such provision in
any other jurisdiction.  To the extent
any provision of this Agreement (or part thereof) cannot be enforced in
accordance with the stated intentions of the parties, such provision (or part
thereof) shall be deemed not to be a part of this Agreement; provided that in
such event the parties shall use their reasonable efforts to negotiate, in good
faith, a substitute, valid and enforceable provision which most nearly effects
the parties’ intent in entering into this Agreement.


 


7.9           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which is, for all purposes deemed an original and all
such counterparts taken together, constitute one and the same instrument.


 


7.10         Choice of Law; Venue.  This Agreement is governed by Nevada law
without regard to conflicts of laws principals. 
Any action brought hereunder or in connection with the Loan Documents
shall be brought in the state or federal courts located in Clark County,
Nevada.  Each party waives any claim of
inconvenient forum.


 


7.11         Integration.  This Agreement, together with the other Loan
Documents and the Collateral Documents and the documents referred to in Section 1.3
of this Agreement, sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof and merges and supersedes all
prior understandings (whether written, verbal or implied) with respect thereto.


 


7.12         Modification; Amendment.  No modification of, or amendment to, this
Agreement shall be effective unless in writing signed by both parties.  This Agreement shall not be supplemented or
modified by any course of dealing or other trade usage.


 


7.13         Headings.  All section headings are for convenience only
and shall not be construed as part of this Agreement or as a limitation or
expansion of the scope of the sections to which they refer.


 


7.14         Actions.  Lender has the right, but not the obligation,
to commence, appear in, and defend any action or proceeding which might affect
its rights, duties or liabilities relating to the Loan or any of the Loan
Documents or any collateral securing the Loan. 
Borrower must pay 


 


13

















 


within 30 days of written
demand all of Lender’s reasonable out-of-pocket costs, expenses, and legal fees
and expenses of Lender’s counsel incurred in those actions or proceedings.


 


7.15         Loan Commission.  Lender is not obligated to pay any brokerage
commission or fee in connection with or arising out of the Loan.


 


7.16         Credit Verification.  Borrower hereby authorizes Lender to check
any credit references and obtain credit reports from credit reporting agencies
of Lender’s choice in connection with any monitoring, collection or future
transaction concerning the Loan, including any modification, extension or renewal of the Loan.


 


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


 


7.18         Confidentiality.  Lender agrees to keep confidential and not
use for any purpose other than evaluating, monitoring, administering or
collecting the Loan or bringing any action for the enforcement of the Loan
Documents or any of its rights relating to the Loan, including, without limitation,
any collection action, any confidential, nonpublic or proprietary information
about Borrower and its subsidiaries that it may receive pursuant to this
Agreement, except to the extent in the public domain through no fault of Lender
or its affiliates.


 


SIGNATURE PAGE FOLLOWS.


 


14

















 


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


 


	
  Borrower:

  
	
   

  
	
  Power-One, Inc., 

  a Delaware corporation

  
	
   

  
	
  By: 

  	
  /s/ R.HOLLIDAY

  
	
  Name:

  	
  Randall H. Holliday

  
	
  Title:

  	
  Secretary

  
	
   

  	
   

  
	
  Address of Borrower:

  
	
   

  
	
  Power-One, Inc. 

  740 Calle Plano 

  Camarillo, CA 93012 

  Attn: General Counsel

  
	
   

  
	
  Lender:

  
	
   

  
	
  PWER Bridge, LLC, 

  a Nevada limited liability company

  
	
   

  
	
  By:

  	
  /s/ WILLIAM B. KEISLER

  
	
  Name:

  	
  William B. Keisler

  
	
  Title:

  	
  Authorized Representative

  
	
   

  	
   

  
	
  Address of Lender:

  
	
   

  
	
  PWER Bridge, LLC 

  c/o David Knight 

  Stephens, Inc. 

  111 Center Street 

  Little Rock, Arkansas 72201

  
	
   

  
	
  Section 1.7 above is
  agreed to by:

  
	
   

  
	
  Stephens Investment
  Holdings, LLC, 

  an Arkansas limited liability company

  
	
   

  
	
  By:

  	
  /s/ WILLIAM B. KEISLER

  
	
  Name:

  	
  William B. Keisler

  
	
  Title:

  	
  Authorized Representative

  



 


 


15

















 


Schedule
4.5


 


Litigation


 


SynQor, Inc. v Power-One, Inc, et. al.   United States District Court, Eastern District
of Texas, Civil Action No. 2:07cv497 TJW/CE.   This action was initiated by SynQor, Inc.
against the Borrower and eight other power supply manufacturers on November 13,
2007.  The complaint alleges that certain
products of the Borrower infringe certain patents held by SynQor in relation to
unregulated bus converters and/or point of load (POL) converters used in
intermediate bus architecture power supply systems.   The Borrower has filed its answer to the
complaint denying infringement of the patents alleged, denying all claims of
SynQor for entitlement to damages or other relief, and asserting various
affirmative defenses, to include invalidity and unenforceability of the
applicable patents.   Proceedings are in
the earliest stages of discovery.


 


Antonio Canova v. Power-One Italy S.p.A. and Magnetek, Inc.
 Labor Court, Arezzo, Italy.  The former Managing Director of the Borrower’s
Italian subsidiary has brought suit in Italy against the Italian
subsidiary, and against his former U.S. employer Magnetek, Inc., alleging
various causes of action and rights to damages relating to claims of wrongful
dismissal of employment, specific Italian employment indemnities, general
economic losses, and contractual claims relating specifically to his employment
relationship and contracts entered into between the individual and Magnetek, Inc. 
The various claims and assertions arise from and relate to the individual’s
removal from office with the Italian subsidiary, and his contractual
relationships with Magnetek, Inc., which actions occurred in connection
with the Company’s acquisition of Magnetek, Inc.’s Power Electronics Group
in October, 2006.  Proceedings are pending before the applicable Italian
civil court.