exv10w1





CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS EXHIBIT, WHICH PORTIONS HAVE BEEN OMITTED AND REPLACED WITH [****] AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.



Exhibit 10.1




 

 






CREDIT AGREEMENT




by and among



FINISAR CORPORATION




and




OPTIUM CORPORATION




as Borrowers,




THE LENDERS THAT ARE SIGNATORIES HERETO




as the Lenders,



and



WELLS FARGO FOOTHILL, LLC




as the Agent




Dated as of October 2, 2009




 

 






 









 









CONFIDENTIAL
TREATMENT REQUESTED



TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	1.	 	DEFINITIONS AND CONSTRUCTION	 	 	1	 
	 
	 	1.l	 	Definitions	 	 	1	 
	 
	 	1.2	 	Accounting Terms	 	 	1	 
	 
	 	1 3	 	Code	 	 	1	 
	 
	 	1 4	 	Construction	 	 	1	 
	 
	 	1.5	 	Schedules and Exhibits	 	 	2	 
	2.	 	LOAN AND TERMS OF PAYMENT	 	 	2	 
	 
	 	2.1	 	Revolver Advances	 	 	2	 
	 
	 	2.2	 	[RESERVED]	 	 	 	 
	 
	 	2.3	 	Borrowing Procedures and Settlements	 	 	3	 
	 
	 	2.4	 	Payments; Reductions of Revolver Commitments; Prepayments	 	 	7	 
	 
	 	2.5	 	Overadvances	 	 	11	 
	 
	 	2.6	 	Interest Rates and Letter of Credit Fee: Rates, Payments and Calculations	 	 	11	 
	 
	 	2.7	 	Crediting Payments	 	 	12	 
	 
	 	2.8	 	Designated Account	 	 	13	 
	 
	 	2.9	 	Maintenance of Loan Account; Statements of Obligations	 	 	13	 
	 
	 	2.10	 	Fees	 	 	13	 
	 
	 	2.11	 	Letters of Credit	 	 	13	 
	 
	 	2.12	 	LIBOR Option	 	 	16	 
	 
	 	2.13	 	Capital Requirements	 	 	18	 
	3.	 	CONDITIONS; TERM OF AGREEMENT	 	 	19	 
	 
	 	3.1	 	Conditions Precedent to the Initial Extension of Credit	 	 	19	 
	 
	 	3.2	 	Conditions Precedent to all Extensions of Credit	 	 	19	 
	 
	 	3.3	 	Term	 	 	19	 
	 
	 	3.4	 	Effect of Termination	 	 	19	 
	 
	 	3.5	 	Early Termination by Borrowers	 	 	19	 
	4.	 	REPRESENTATIONS AND WARRANTIES	 	 	19	 
	 
	 	4.1	 	Due Organization and Qualification; Subsidiaries	 	 	20	 
	 
	 	4.2	 	Due Authorization; No Conflict	 	 	20	 
	 
	 	4.3	 	Governmental Consents	 	 	21	 
	 
	 	4.4	 	Binding Obligations; Perfected Liens	 	 	21	 
	 
	 	4.5	 	Title to Assets; No Encumbrances	 	 	21	 
	 
	 	4.6	 	Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims	 	 	21	 







 









 





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TABLE OF CONTENTS 

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.7	 	Litigation	 	 	21	 
	 
	 	4.8	 	Compliance with Laws	 	 	22	 
	 
	 	4.9	 	No Material Adverse Change	 	 	22	 
	 
	 	4.10	 	Fraudulent Transfer	 	 	22	 
	 
	 	4.11	 	Employee Benefits	 	 	22	 
	 
	 	4.12	 	Environmental Condition	 	 	22	 
	 
	 	4.13	 	Intellectual Property	 	 	23	 
	 
	 	4.14	 	Leases	 	 	23	 
	 
	 	4.15	 	Deposit Accounts and Securities Accounts	 	 	23	 
	 
	 	4.16	 	Complete Disclosure	 	 	23	 
	 
	 	4.17	 	Material Contracts	 	 	23	 
	 
	 	4.18	 	Patriot Act	 	 	23	 
	 
	 	4.19	 	Indebtedness	 	 	24	 
	 
	 	4.20	 	Payment of Taxes	 	 	24	 
	 
	 	4.21	 	Margin Stock	 	 	24	 
	 
	 	4.22	 	Governmental Regulation	 	 	24	 
	 
	 	4.23	 	OFAC	 	 	24	 
	 
	 	4.24	 	Employee and Labor Matters	 	 	24	 
	 
	 	4.25	 	Eligible Accounts, Eligible Investment Grade Accounts, Eligible Credit Insured Accounts	 	 	25	 
	 
	 	4.26	 	Eligible Inventory	 	 	26	 
	 
	 	4.27	 	Eligible Inventory	 	 	26	 
	 
	 	4.28	 	Locations of Inventory and Equipment	 	 	26	 
	 
	 	4.29	 	Inventory Records	 	 	26	 
	 
	 	4.30	 	The Indentures	 	 	27	 
	5.	 	AFFIRMATIVE COVENANTS	 	 	26	 
	 
	 	5.1	 	Financial Statements, Reports, Certificates	 	 	26	 
	 
	 	5.2	 	Collateral Reporting	 	 	26	 
	 
	 	5.3	 	Existence	 	 	26	 
	 
	 	5.4	 	Maintenance of Properties	 	 	26	 
	 
	 	5.5	 	Taxes	 	 	27	 
	 
	 	5.6	 	Insurance	 	 	27	 
	 
	 	5.7	 	Inspection	 	 	27	 
	 
	 	5.8	 	Compliance with Laws	 	 	27	 






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	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.9	 	Environmental	 	 	27	 
	 
	 	5.10	 	Disclosure Updates	 	 	28	 
	 
	 	5.11	 	Formation of Subsidiaries	 	 	28	 
	 
	 	5.12	 	Further Assurances	 	 	29	 
	 
	 	5.13	 	Lender Meetings	 	 	29	 
	 
	 	5.14	 	Material Contracts	 	 	29	 
	 
	 	5.15	 	Location of Inventory and Equipment	 	 	29	 
	 
	 	5.16	 	Assignable Material Contracts	 	 	29	 
	6.	 	NEGATIVE COVENANTS	 	 	30	 
	 
	 	6.1	 	Indebtedness	 	 	30	 
	 
	 	6.2	 	Liens	 	 	30	 
	 
	 	6.3	 	Restrictions on Fundamental Changes	 	 	30	 
	 
	 	6.4	 	Disposal of Assets	 	 	30	 
	 
	 	6.5	 	Change Name	 	 	30	 
	 
	 	6.6	 	Nature of Business	 	 	31	 
	 
	 	6.7	 	Prepayments and Amendments	 	 	31	 
	 
	 	6.8	 	Change of Control	 	 	31	 
	 
	 	6.9	 	Distributions	 	 	32	 
	 
	 	6.10	 	Accounting Methods	 	 	32	 
	 
	 	6.11	 	Investments	 	 	32	 
	 
	 	6.12	 	Transactions with Affiliates	 	 	32	 
	 
	 	6.13	 	Use of Proceeds	 	 	33	 
	 
	 	6.14	 	Consignments	 	 	33	 
	 
	 	6.15	 	Inventory and Equipment with Bailees	 	 	33	 
	7.	 	FINANCIAL COVENANTS	 	 	33	 
	8.	 	EVENTS OF DEFAULT	 	 	35	 
	9.	 	RIGHTS AND REMEDIES	 	 	36	 
	 
	 	9.1	 	Rights and Remedies	 	 	36	 
	 
	 	9.2	 	Remedies Cumulative	 	 	37	 
	10.	 	WAIVERS; INDEMNIFICATION	 	 	37	 
	 
	 	10.1	 	Demand; Protest; etc	 	 	37	 
	 
	 	10.2	 	The Lender Group’s Liability for Collateral	 	 	37	 
	 
	 	10.3	 	Indemnification	 	 	37	 






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	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	11.	 	NOTICES	 	 	38	 
	12.	 	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER	 	 	38	 
	13.	 	ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS	 	 	39	 
	 
	 	13.1	 	Assignments and Participations	 	 	39	 
	 
	 	13.2	 	Successors	 	 	42	 
	14.	 	AMENDMENTS; WAIVERS	 	 	42	 
	 
	 	14.1	 	Amendments and Waivers	 	 	42	 
	 
	 	14.2	 	Replacement of Holdout Lender	 	 	43	 
	 
	 	14.3	 	No Waivers; Cumulative Remedies	 	 	44	 
	15.	 	AGENT; THE LENDER GROUP	 	 	44	 
	 
	 	15.1	 	Appointment and Authorization of Agent	 	 	44	 
	 
	 	15.2	 	Delegation of Duties	 	 	45	 
	 
	 	15.3	 	Liability of Agent	 	 	45	 
	 
	 	15.4	 	Reliance by Agent	 	 	45	 
	 
	 	15.5	 	Notice of Default or Event of Default	 	 	45	 
	 
	 	15.6	 	Credit Decision	 	 	46	 
	 
	 	15.7	 	Costs and Expenses; Indemnification	 	 	46	 
	 
	 	15.8	 	Agent in Individual Capacity	 	 	46	 
	 
	 	15.9	 	Successor Agent	 	 	47	 
	 
	 	15.10	 	Lender in Individual Capacity	 	 	47	 
	 
	 	15.11	 	Collateral Matters	 	 	47	 
	 
	 	15.12	 	Restrictions on Actions by Lenders; Sharing of Payments	 	 	48	 
	 
	 	15.13	 	Agency for Perfection	 	 	48	 
	 
	 	15.14	 	Payments by Agent to the Lenders	 	 	49	 
	 
	 	15.15	 	Concerning the Collateral and Related Loan Documents	 	 	49	 
	 
	 	15.16	 	Audits and Examination Reports; Confidentiality; Disclaimers
by Lenders; Other Reports and Information	 	 	49	 
	 
	 	15.17	 	Several Obligations; No Liability	 	 	50	 
	16.	 	WITHHOLDING TAXES	 	 	50	 
	17.	 	GENERAL PROVISIONS	 	 	52	 
	 
	 	17 1	 	Effectiveness	 	 	52	 
	 
	 	17.2	 	Section Headings	 	 	52	 
	 
	 	17.3	 	Interpretation	 	 	52	 
	 
	 	17.4	 	Severability of Provisions	 	 	52	 






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	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	17.5	 	Bank Product Providers	 	 	53	 
	 
	 	17.6	 	Debtor-Creditor Relationship	 	 	53	 
	 
	 	17.7	 	Counterparts; Electronic Execution	 	 	53	 
	 
	 	17.8	 	Revival and Reinstatement of Obligations	 	 	53	 
	 
	 	17.9	 	Confidentiality	 	 	53	 
	 
	 	17.10	 	Lender Group Expenses	 	 	54	 
	 
	 	17.11	 	USA PATRIOT Act	 	 	54	 
	 
	 	17.12	 	Integration	 	 	54	 
	 
	 	17.13	 	Parent as Agent for Borrowers	 	 	54	 
	 
	 	17.14	 	Designated Senior Indebtedness	 	 	54	 






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	 	 	 	 	Page
	 
	 	 	 	 
	EXHIBITS AND SCHEDULES

	 
	 	 	 	 
	Exhibit A-1

	 	Form of Assignment and Acceptance
	 	 
	Exhibit B-l

	 	Form of Borrowing Base Certificate	 	 
	Exhibit C-L

	 	Form of Compliance Certificate	 	 
	Exhibit L-l

	 	Form of LIBOR Notice	 	 
	Exhibit P-l

	 	Permitted Convertible Note Debt Terms and Conditions	 	 
	 
	 	 	 	 
	Schedule A-l

	 	Agent’s Account	 	 
	Schedule A-2

	 	Authorized Persons	 	 
	Schedule C-l

	 	Revolver Commitments	 	 
	Schedule D-l

	 	Designated Account	 	 
	Schedule E-l

	 	Eligible Inventory and Eligible Equipment Locations	 	 
	Schedule E-2

	 	Eligible Investment Grade Account Debtors	 	 
	Schedule E-3

	 	Eligible Specified Account Debtors	 	 
	Schedule P-l

	 	Permitted Investments	 	 
	Schedule P-2

	 	Permitted Liens	 	 
	Schedule R-l

	 	Real Property Collateral	 	 
	Schedule 1.1

	 	Definitions	 	 
	Schedule 3.1

	 	Conditions Precedent	 	 
	Schedule 4.1 (a)

	 	Due Organization and Qualification; Subsidiaries	 	 
	Schedule 4.1(b)

	 	Capitalization of Parent	 	 
	Schedule 4.1(c)

	 	Capitalization of Parent’s Subsidiaries	 	 
	Schedule 4.6(a)

	 	States of Organization	 	 
	Schedule 4.6(b)

	 	Chief Executive Offices	 	 
	Schedule 4.6(c)

	 	Organizational Identification Numbers	 	 
	Schedule 4.6(d)

	 	Commercial Tort Claims	 	 
	Schedule 4.7

	 	Litigation	 	 
	Schedule 4.8

	 	Compliance with Laws	 	 
	Schedule 4.11

	 	Employee Benefits	 	 
	Schedule 4.13

	 	Intellectual Property	 	 
	Schedule 4.15

	 	Deposit Accounts and Securities Accounts	 	 
	Schedule 4.17

	 	Material Contracts	 	 
	Schedule 4.19

	 	Permitted Indebtedness	 	 
	Schedule 4.24

	 	Employee and Labor Matters	 	 
	Schedule 4.28

	 	Locations of Inventory and Equipment	 	 
	Schedule 5.1

	 	Financial Statements, Reports, Certificates	 	 
	Schedule 5.2

	 	Collateral Reporting	 	 
	Schedule 6.6

	 	Nature of Business	 	 







 










 





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CREDIT AGREEMENT




          THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of October 2, 2009, by
and among the lenders identified on the signature pages hereof (such lenders, together with their
respective successors and permitted assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), WELLS FARGO FOOTHILL, LLC, a Delaware
limited liability company, as agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, “Agent”). FINISAR CORPORATION, a Delaware
corporation (“Parent”), and OPTIUM CORPORATION, a Delaware corporation, (“Optium” and
Parent are referred to hereinafter each individually as a “Borrower”, and individually and
collectively, jointly and severally, as the “Borrowers”).




          The parties agree as follows:




1. DEFINITIONS AND CONSTRUCTION.




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



     1.2 Accounting Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP; provided, however, that if Parent notifies Agent
that Parent 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 Administrative 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 Borrowers
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 Borrowers 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, 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 “Parent” is used in respect of a financial covenant or a
related definition, it shall be understood to mean Parent and its Subsidiaries on a consolidated
basis, unless the context clearly requires otherwise.



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



     1.4 Construction. Unless the context of this Agreement or any other Loan Document
clearly requires otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not limiting, and the term
“or” has, except where otherwise indicated, the inclusive meaning represented by the phrase
“and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or 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



 









 





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tangible and intangible assets and properties, including cash, securities, accounts, and contract
rights. Any reference herein or in any other Loan Document to the satisfaction, repayment, or
payment in full of the Obligations shall mean the repayment in full in cash (or, in the case of
Letters of Credit or Bank Products, providing Letter of Credit Collateralization or Bank Product
Collateralization, as applicable) of all Obligations other than unasserted contingent
indemnification Obligations and other than any Bank Product Obligations that, at such time, are
allowed by the applicable Bank Product Provider to remain outstanding and that are not required by
the provisions of this Agreement to be repaid or cash collateralized. Any reference herein to any
Person shall be construed to include such Person’s successors and assigns. Any requirement of a
writing contained herein or in any other Loan Document shall be satisfied by the transmission of a
Record.




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



2. LOAN AND TERMS OF PAYMENT.




     2.1 Revolver Advances.



          (a) Subject to the terms and conditions of this Agreement, and during the term of this
Agreement, each Lender with a Revolver Commitment agrees (severally, not jointly or jointly and
severally) to make advances (“Advances”) to Borrowers in an amount at any one time
outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the
Maximum Revolver Amount less the Letter of Credit Usage at such time, and (ii) the Borrowing Base
at such time less the Letter of Credit Usage at such time.




          (b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the
terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.
The outstanding principal amount of the Advances, together with interest accrued thereon, 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 to establish reserves against the Borrowing Base in such amounts, and with respect to such
matters, as Agent in its Permitted Discretion shall deem necessary or appropriate, including
reserves with respect to (i) sums that Parent or its Subsidiaries are required to pay under any
Section of this Agreement or any other Loan Document (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and
has failed to pay, and (ii) amounts owing by Parent or its Non-CFC 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 (such as Liens or trusts in favor of landlords, warehousemen, carriers,
mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales,
or other taxes where given priority under applicable law) in and to such item of the Collateral.




     2.2 [Reservedl



     2.3 Borrowing Procedures and Settlements.



          (a) Procedure for Borrowing. Each Borrowing shall be made by a written request by an
Authorized Person delivered to Agent. Unless Swing Lender is not obligated to make a Swing Loan
pursuant to Section 2.3(b) below, such notice must be received by Agent no later than 10:00
a.m. (California time) on the Business Day that is the requested Funding Date specifying (i) the
amount of such Borrowing, and (ii) the requested Funding Date, which shall be a Business Day;
provided, however, that if Swing Lender is not obligated to make a Swing Loan as to
a requested Borrowing, such notice must be received by Agent no later than 10:00 a.m. (California
time) on the Business Day prior to the date that is the requested Funding Date. At






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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,
Borrowers agree 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 an Advance and so long as either (i)
the aggregate amount of Swing Loans made since the last Settlement Date, minus the amount of
Collections or payments applied to Swing Loans since the last Settlement Date, plus the amount of
the requested Advance does not exceed $10,000,000, or (ii) Swing Lender, in its sole discretion,
shall agree to make a Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make
an Advance in the amount of such Borrowing (any such Advance made solely by Swing Lender pursuant
to this Section 2.3(b) being referred to as a “Swing Loan” and such Advances being
referred to collectively as “Swing Loans”) available to Borrowers on the Funding Date
applicable thereto by transferring immediately available funds to the Designated Account. Each
Swing Loan shall be deemed to be an Advance hereunder and shall be subject to all the terms and
conditions (including Section 3) applicable to other Advances, except that all payments on any
Swing Loan shall be payable to Swing Lender solely for its own account. Subject to the provisions
of 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 Obligations hereunder, and bear interest at the rate applicable from time to time
to Advances that are Base Rate Loans.




          (c) Making of Loans.




               (i) In the event that Swing Lender is not obligated to make a Swing Loan, then
promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a). Agent
shall notify the Lenders, not later than 1:00 p.m. (California time) on the Business Day
immediately preceding the Funding Date applicable thereto, by telecopy, telephone, or other
similar form of transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately
available funds, to Agent’s Account, not later than 10:00 a.m. (California time) on the Funding
Date applicable thereto. After Agent’s receipt of the proceeds of such Advances, Agent shall make
the proceeds thereof available to Administrative Borrower on the applicable Funding Date by
transferring immediately available funds equal to such proceeds received by Agent to the
Designated Account; provided, however, that, subject to the provisions of
Section 2.3(d)(ii), Agent shall not request any Lender to make, and no Lender shall have
the obligation to make, any Advance if (1) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the
Availability on such Funding Date.



               (ii) Unless Agent receives notice from a Lender prior to 9:00 a.m. (California
time) on the date of a Borrowing, that such Lender will not make available as and when required
hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of the
Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent
in immediately available funds on the Funding Date and Agent may (but shall not be so required),
in reliance upon such assumption, make available to Borrowers on such date a corresponding amount.
If any Lender shall not have made its full amount available to Agent in immediately available
funds and if Agent in such circumstances has made available to Borrowers such amount, that Lender
shall on the Business Day following such Funding Date make such amount available to Agent,
together with interest at the Defaulting Lender Rate for each day during such period. A notice
submitted by Agent to any Lender with respect to amounts owing under this Section 2.3(c)(ii)
shall be conclusive, absent manifest error. If such amount is so made available, such payment
to Agent shall



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constitute such Lender’s Advance on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to Agent on the Business Day following the Funding Date, Agent
will notify Administrative Borrower of such failure to fund and, upon demand by Agent, Borrowers
shall pay such amount to Agent for Agent’s account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances composing such Borrowing. If such Advance repaid is a LIBOR
Rate Loan, Borrowers shall not be obligated to pay any Funding Losses with respect to such repaid
Advance. The failure of any Lender to make any Advance on any Funding Date shall not relieve any
other Lender of any obligation hereunder to make an Advance on such Funding Date, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to be made by such
other Lender on any Funding Date.




               (iii) Agent shall not be obligated to transfer to a Defaulting Lender any payments
made by Borrowers to Agent for the Defaulting Lender’s benefit (or any Collections or proceeds of
Collateral that would otherwise be remitted hereunder to the Defaulting Lender), and, in the
absence of such transfer to the Defaulting Lender, Agent shall transfer any such payments (A)
first, to Swing Lender to the extent of any Swing Loans that were made by Swing Lender and that
were required to be, but were not, repaid by the Defaulting Lender, (B) second, to the Issuing
Lender, to the extent of the portion of a Letter of Credit Disbursement that was required to be,
but was not, repaid 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 an Advance (or other funding obligation) was funded by such other
non-Defaulting Lender), and (D) to a suspense account maintained by Agent, the proceeds of which
shall be retained and may be made available to be re-advanced to Borrowers as if such Defaulting
Lender had made its portion of Advances (or other funding obligations) to Borrowers. Subject to the
foregoing, Agent may hold and, in its Permitted Discretion, re-lend to Borrowers for the account of
such Defaulting Lender the amount of all such payments received and retained by Agent for the
account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with
respect to the Loan Documents, such Defaulting Lender shall be deemed not to be a “Lender” and such
Lender’s Revolver Commitment shall be deemed to be zero. This Section shall remain effective with
respect to such Lender until (x) the Obligations under this Agreement shall have been declared or
shall have become immediately due and payable, (y) the non-Defaulting Lenders, Agent, and
Administrative Borrower shall have waived such Defaulting Lender’s default in writing, or (z) the
Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays to Agent all amounts
owing by Defaulting Lender in respect thereof. The operation of this Section 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 Borrowers of their duties and obligations hereunder to
Agent or to the Lenders other than such Defaulting Lender. Any such failure to fund by any
Defaulting Lender shall constitute a material breach by such Defaulting Lender of this Agreement
and shall entitle Administrative 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 repaid its share of the outstanding Obligations (other
than Bank Product Obligations, but including an assumption of its Pro Rata Share of the Letters of
Credit) without any premium or penalty of any kind whatsoever; provided, however,
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 Borrowers’ rights or remedies against any
such Defaulting Lender arising out of or in relation to such failure to fund.



          (d) Protective Advances and Optional Overadvances.




               (i) Any contrary provision of this Agreement notwithstanding, Agent hereby is
authorized by Borrowers and the Lenders, from time to time in Agent’s sole discretion, (A) after
the occurrence and during the continuance of a Default or an Event of Default, or (B) at any time
that any of the



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TREATMENT REQUESTED


other applicable conditions precedent set forth in Section 3 are not satisfied, to make
Advances to, or for the benefit of, Borrowers on behalf of the Lenders that Agent, in its Permitted
Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion
thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank
Product Obligations) (any of the Advances described in this Section 2.3(d)(i) shall be
referred to as “Protective Advances”).




               (ii) Any contrary provision of this Agreement 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 Advances
(including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would be
created, so long as (A) after giving effect to such Advances, the outstanding Revolver Usage does
not exceed the Borrowing Base by more than $10,000,000, and (B) after giving effect to such
Advances, the outstanding Revolver Usage (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount.
In the event Agent obtains actual knowledge that the Revolver Usage exceeds the amounts permitted
by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess,
Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders with Revolver Commitments thereupon
shall, together with Agent, jointly determine the terms of arrangements that shall be implemented
with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of
the Advances to Borrowers to an amount permitted by the preceding sentence. In such circumstances,
if any Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of
any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders. In any event: (x) if any unintentional Overadvance remains
outstanding for more than 30 days, unless otherwise agreed to by the Required Lenders, Borrowers
shall immediately repay the Advances in an amount sufficient to eliminate all such unintentional
Overadvances, and (y) after the date all such Overadvances have been eliminated, there must be at
least five consecutive days before intentional Overadvances are made. The foregoing provisions are
meant for the benefit of the Lenders and Agent and are not meant for the benefit of Borrowers,
which shall continue to be bound by the provisions of Section 2.5. Each Lender with a
Revolver Commitment shall be obligated to settle with Agent as provided in Section 2.3(e)
for the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by Agent reported
to such Lender, any intentional Overadvances made as permitted under this Section
2.3(d)(ii), and any Overadvances resulting from the charging to the Loan Account of interest,
fees, or Lender Group Expenses.



               (iii) Each Protective Advance and each Overadvance shall be deemed to be an
Advance hereunder, except that no Protective Advance or Overadvance shall be eligible to be a
LIBOR Rate Loan and, prior to Settlement therefor, all payments on the Protective Advances shall
be payable to Agent solely for its own account. The Protective Advances and Overadvances shall be
repayable on demand, secured by Agent’s Liens, constitute Obligations hereunder, and bear interest
at the rate applicable from time to time to Advances that are Base Rate Loans. The ability of
Agent to make Protective Advances is separate and distinct from its ability to make Overadvances
and its ability to make Overadvances is separate and distinct from its ability to make Protective
Advances. For the avoidance of doubt, the limitations on Agent’s ability to make Protective
Advances do not apply to Overadvances and the limitations on Agent’s ability to make Overadvances
do not apply to Protective Advances. The provisions of this Section 2.3(d) are for the
exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit
Borrowers in any way.



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







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



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



               (iii) Between Settlement Dates, Agent, to the extent Protective Advances or
Swing Loans are outstanding, may pay over to Agent or Swing Lender, as applicable, any Collections
or payments received by Agent, that in accordance with the terms of this Agreement would be applied
to the reduction of the Advances, for application to the Protective Advances or Swing Loans.
Between Settlement Dates, Agent, to the extent no Protective Advances or Swing Loans are
outstanding, may pay over to Swing Lender any Collections or payments received by Agent, that in
accordance with the terms of this Agreement would be applied to the reduction of the Advances, for
application to Swing Lender’s Pro Rata Share of the Advances. If, as of any Settlement Date,
Collections or payments of Parent or its Subsidiaries received since the then immediately preceding
Settlement Date have been applied to Swing Lender’s Pro Rata Share of the Advances other than to
Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the
accounts of the Lenders, and Agent shall pay to the Lenders, to be applied to the outstanding
Advances of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have,
as of such Settlement Date, its Pro Rata Share of the Advances. During the period between
Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect to Protective
Advances, and each Lender (subject to the effect of agreements between Agent and individual
Lenders) with respect to the Advances other than Swing Loans and Protective Advances, shall be
entitled to interest at the applicable rate or rates payable under this Agreement on the daily
amount of funds employed by Swing Lender, Agent, or the Lenders, as applicable.



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TREATMENT REQUESTED


          (f) Notation. Agent, as a non-fiduciary agent for Borrowers, shall maintain a register
showing the principal amount of the Advances, owing to each Lender, including the Swing Loans owing
to Swing Lender, and Protective 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) Lenders’ Failure to Perform. All Advances (other than Swing Loans and Protective
Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata
Shares. It is understood that (i) no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Advance (or other extension of credit) hereunder, nor
shall any 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.




     2.4 Payments; Reductions of Revolver Commitments; Prepayments.



          (a) Payments by Borrowers.




               (i) Except as otherwise expressly provided herein, all payments by Borrowers
shall be made to Agent’s Account for the account of the Lender Group and shall be made in
immediately available funds, no later than 11:00 a.m. (California time) on the date specified
herein. Any payment received by Agent later than 11:00 a.m. (California time) shall be deemed to
have been received on the following Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.



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



          (b) Apportionment and Application.




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



               (ii) At any time that an Application Event has occurred and is continuing and
except as otherwise provided 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,



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CONFIDENTIAL
TREATMENT REQUESTED


                    (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, ratably to pay interest due in respect of the Advances (other than
Protective Advances) and the Swing Loans until paid in full,



                    (H) eighth, ratably (i) to pay the principal of all Swing Loans until paid
in full, (ii) to pay the principal of all Advances until paid in full, (iii) to Agent, to be held
by Agent, for the benefit of Issuing Lender (and for the ratable benefit of each of the Lenders
that have an obligation to pay to Agent, for the account of the Issuing Lender, a share of each
Letter of Credit Disbursement), as cash collateral in an amount up to 105% of the Letter of Credit
Usage (which 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 be reapplied pursuant to
this Section 2.4(b)(ii), beginning with tier (A) hereof), and (iv) ratably, to the Bank
Product Providers on account of all amounts then due and payable in respect of Bank Product
Obligations, 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 in an amount up to the amount the Bank Product
Providers reasonably determine to be the credit exposure of Parent and its Subsidiaries in respect
of Bank Product Obligations (which cash collateral shall be applied, ratably, to the payment or
reimbursement of any amounts due and payable with respect to such Bank Product Obligations as and
when such amounts first become due and payable and, if any such Bank Product Obligation is paid or
otherwise satisfied in full, the cash collateral held by Agent in respect of such Bank Product
Obligation shall be reapplied pursuant to this Section 2.4(b)(ii), beginning with tier (A)
hereof),



                    (I) ninth, to pay any other Obligations, and



                    (J) tenth, to Borrowers (to be wired to the Designated Account) or such other
Person entitled thereto under applicable law.



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



               (iv) In each instance, so long as no Application Event has occurred and is
continuing, Section 2.4(b)(i) shall not apply to any payment made by Borrowers to Agent
and specified by Borrowers 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” means payment in cash of
all amounts owing under the Loan Documents, including loan fees, service fees, professional fees,
interest (and specifically including interest accrued after the commencement of any Insolvency
Proceeding), default interest,



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CONFIDENTIAL
TREATMENT REQUESTED


interest on interest, and expense reimbursements, whether or not 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 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 2.4 shall control and govern.



          (c) Reduction of Revolver Commitments. The Revolver Commitments shall terminate on the
Maturity Date. Borrowers may reduce the Revolver Commitments to an amount not less than the
greater of (i) $50,000,000 and (ii) the sum of (A) the Revolver Usage as of such date, plus (B) the
principal amount of all Advances not yet made as to which a request has been given by
Administrative 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 Administrative Borrower pursuant to
Section 2.11(a). Each such reduction shall be in an amount which is not less than
$5,000,000, shall be made by providing not less than 10 Business Days prior written notice to Agent
and shall be irrevocable. Once reduced, the Revolver Commitments may not be increased. Each such
reduction of the Revolver Commitments shall reduce the Revolver Commitments of each
Lender proportionately in accordance with its Pro Rata Share thereof.




          (d) Optional Prepayments. Borrowers may prepay the principal of any Advance at any time in
whole or in part.




          (e) Mandatory Prepayments. If, at any time, (A) the Revolver Usage on such date exceeds (B)
the Borrowing Base (such excess being referred to as the “Borrowing Base Excess”), then
Borrowers shall promptly, but in any event, within 1 Business Day prepay the Obligations in
accordance with Section 2.4(f)(i) in an aggregate amount equal to the Borrowing Base
Excess.




          (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 Advances until paid in full, and second, to cash collateralize
the Letters of Credit in an amount equal to 105% of the then extant 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).




          (g) Application of Payments Between LIBOR and Base Rate Loans. If one or more LIBOR Rate Loans
are outstanding, along with Base Rate Loans, all payments from Borrowers applied to the Advances
pursuant to Section 2.4(a) or Section 2.4(f), shall be applied first to the principal amount of the
Base Rate Loans outstanding, and then to the principal amount of the LIBOR Rate Loans, and if there
is more than one (1) LIBOR Rate Loan outstanding, the payments shall be applied to the LIBOR Rate
Loans in the order of the occurrence of the last day of the Interest Periods for such Advances.




     2.5 Overadvances. If, at any time or for any reason, the amount of Obligations owed
by Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.11 is greater
than any of the limitations set forth in Section 2.1 or Section 2.11, as applicable
(an “Overadvance”), Borrowers shall promptly, but in any event, within 1 Business Day of
the initial occurrence of an Overadvance pay to Agent, in cash, the amount of such excess, which
amount shall be used by Agent to reduce the Obligations in accordance with the priorities set forth
in Section 2.4(b). Borrowers promise to pay the Obligations (including principal, interest,
fees, costs, and expenses) in Dollars in full on the Maturity Date or, if earlier, on the date on
which the Obligations are declared due and payable pursuant to the terms of this Agreement.



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



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CONFIDENTIAL
TREATMENT REQUESTED


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




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



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



          (b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of the Lenders
with a Revolver Commitment, subject to any agreements between Agent and individual Lenders), a
Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in
Section 2.11(e)) which shall accrue at a per annum rate equal to the LIBOR Rate Margin
times the Daily Balance of the undrawn amount of all outstanding Letters of Credit.




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




               (i) all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof at a per annum rate equal to 2 percentage points above
the per annum rate otherwise applicable hereunder, and



               (ii) the Letter of Credit fee provided for in Section 2.6(b) shall be increased to
2 percentage points above the per annum rate otherwise applicable hereunder.



          (d) Payment. Except to the extent provided to the contrary in Section 2.10 or
Section 2.12(a), interest, Letter of Credit fees, all other fees payable hereunder or under
any of the other Loan Documents, and all costs, expenses, and Lender Group Expenses payable
hereunder or under any of the other Loan Documents shall be due and payable, in arrears, on the
first day of each month at any time that Obligations or Revolver Commitments are outstanding.
Borrowers hereby authorize Agent, from time to time without prior notice to Borrowers, to charge
all interest, Letter of Credit fees, and all other fees payable hereunder or under any of the other
Loan Documents (in each case, as and when due and payable), all costs, expenses, and Lender Group
Expenses payable hereunder or under any of the other Loan Documents (in each case, as and when
incurred), all charges, commissions, fees, and costs provided for in Section 2.11(e) (as
and when accrued or incurred), all fees and costs provided for in Section 2.10 (as and when
accrued or incurred), and all other payments as and when due and payable under any Loan Document
(including any amounts due and payable to the Bank Product Providers in respect of Bank Products)
to the Loan Account, which amounts thereafter shall constitute Advances hereunder and shall accrue
interest at the rate then applicable to Advances that are Base Rate Loans. Any interest, fees,
costs, expenses, Lender Group Expenses, or other amounts payable hereunder or under any other Loan
Document not paid when due shall be compounded by being charged to the Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest at the rate then applicable to
Advances that are Base Rate Loans (unless and until converted into LIBOR Rate Loans in accordance
with the terms of this Agreement).




          (e) Computation. All interest and fees chargeable under the Loan Documents shall be computed
on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period
during which the interest or fees accrue. 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.







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CONFIDENTIAL
TREATMENT REQUESTED




          (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. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated
within it; provided, however, that, anything contained herein to the contrary
notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum
allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are
and shall be liable only for the payment of such maximum as allowed by law, and payment received
from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.




     2.7 Crediting Payments. The receipt of any payment item by Agent shall not be
considered a payment on account unless such payment item is a wire transfer of immediately
available federal funds made to Agent’s Account or unless and until such payment item is honored
when presented for payment. Should any payment item not be honored when presented for payment,
then Borrowers shall be deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be
deemed received by Agent only if it is received into Agent’s Account on a Business Day on or before
11:00 a.m. (California time). If any payment item is received into Agent’s Account on a
non-Business Day or after 11:00 a.m. (California time) on a Business Day, it shall be deemed to
have been received by Agent as of the opening of business on the immediately following Business
Day.



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



     2.9 Maintenance of Loan Account; Statements of Obligations. Agent shall maintain an
account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will
be charged with all Advances (including Protective Advances and Swing Loans) made by Agent, Swing
Lender, or the Lenders to Borrowers or for Borrowers’ account, the Letters of Credit issued or made
by Issuing Lender for Borrowers’ account, and with all other payment Obligations hereunder or under
the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees
and expenses, and Lender Group Expenses. In accordance with Section 2.7, the Loan Account
will be credited with all payments received by Agent from Borrowers or for Borrowers’ account.
Agent shall render monthly statements regarding the Loan Account to Administrative Borrower,
including principal, interest, fees, and including an itemization of all charges and expenses
constituting Lender Group Expenses owing, and such statements, absent manifest error, shall be
conclusively presumed to be correct and accurate and constitute an account stated between Borrowers
and the Lender Group unless, within 30 days after receipt thereof by Administrative Borrower,
Administrative Borrower shall deliver to Agent written objection thereto describing the error or
errors contained in any such statements.



     2.10 Fees. Borrowers shall pay to Agent,



          (a) for the account of Agent, as and when due and payable under the terms of the Fee Letter,
the fees set forth in the Fee Letter; and




          (b) for the ratable account of those Lenders with Revolver Commitments, on the first day of
each month from and after the Closing Date up to the first day of the month prior to the Payoff
Date and on







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TREATMENT REQUESTED



the Payoff Date, an unused line fee in an amount equal to the Unused Line Margin times the result
of (i) the Maximum Revolver Amount, less (ii) the average Daily Balance of the Revolver Usage
during the immediately preceding month (or portion thereof).




     2.11 Letters of Credit.



          (a) Subject to the terms and conditions of this Agreement, upon the request of Administrative
Borrower made in accordance herewith, the Issuing Lender agrees to issue, or to cause an Underlying
Issuer, as Issuing Lender’s agent, to issue, a requested Letter of Credit. If Issuing Lender, at
its option, elects to cause an Underlying Issuer to issue a requested Letter of Credit, then
Issuing Lender agrees that it will obligate itself to reimburse such Underlying Issuer (which may
include, among, other means, by becoming an applicant with respect to such Letter of Credit or
entering into undertakings which provide for reimbursements of such Underlying Issuer with respect
to such Letter of Credit; each such obligation or undertaking, irrespective of whether in writing,
a “Reimbursement Undertaking”) with respect to Letters of Credit issued by such Underlying
Issuer. By submitting a request to Issuing Lender for the issuance of a Letter of Credit,
Administrative Borrower shall be deemed to have requested that Issuing Lender issue or that an
Underlying Issuer issue the requested Letter of Credit and to have requested Issuing Lender to
issue a Reimbursement Undertaking with respect to such requested Letter of Credit if it is to be
issued by an Underlying Issuer (it being expressly acknowledged and agreed by Borrowers that
Administrative 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 the Issuing Lender via
hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of
the requested date of issuance, amendment, renewal, or extension. Each such request shall be in
form and substance reasonably satisfactory to the Issuing Lender and shall specify (i) the amount
of such Letter of Credit, (ii) the date of issuance, amendment, renewal, or extension of such
Letter of Credit, (iii) the expiration date of such Letter of Credit, (iv) the name and address of
the beneficiary of the Letter of Credit, and (v) such other information (including, in the case of
an amendment, renewal, or extension, identification of the Letter of Credit to be so amended,
renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of
Credit. Anything contained herein to the contrary notwithstanding, the Issuing Lender may, but
shall not be obligated to, issue or cause the issuance of a Letter of Credit or to issue a
Reimbursement Undertaking in respect of an Underlying Letter of Credit, in either case, that
supports the obligations of Parent or its Subsidiaries in respect of (1) a lease of real property,
or (2) an employment contract. Borrowers agree that this Agreement (along with the terms of the
applicable application) will govern each Letter of Credit and its issuance. The Issuing Lender
shall have no obligation to issue a Letter of Credit or a Reimbursement Undertaking in respect of
an Underlying Letter of Credit, in either case, if any of the following would result after giving
effect to the requested issuance:




               (i) the Letter of Credit Usage would exceed the Borrowing Base less the outstanding
amount of Advances, or



               (ii) the Letter of Credit Usage would exceed $10,000,000, or



               (iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the
outstanding amount of Advances.



          Each Letter of Credit shall be in form and substance reasonably acceptable to the Issuing
Lender, including the requirement that the amounts payable thereunder must be payable in Dollars.
If Issuing Lender makes a payment under a Letter of Credit or an Underlying Issuer makes a payment
under an Underlying Letter of Credit, Borrowers shall pay to Agent an amount equal to the
applicable Letter of Credit Disbursement on the date such Letter of Credit Disbursement is made
and, in the absence of such payment, the amount of the Letter of Credit Disbursement immediately
and automatically shall be deemed to be an Advance hereunder and, initially, shall bear interest
at the rate then applicable to Advances that are Base Rate Loans. If





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TREATMENT REQUESTED


a Letter of Credit Disbursement is deemed to be an Advance hereunder, Borrowers’ obligation to pay
the amount of such Letter of Credit Disbursement to Issuing Lender shall be discharged and
replaced by the resulting Advance. Promptly following receipt by Agent of any payment from
Borrowers pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender
or, to the extent that Lenders have made payments pursuant to Section 2.11(b) to reimburse
the Issuing Lender, then to such Lenders and the Issuing Lender as their interests may appear.




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



          (c) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group
and each Underlying Issuer harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees 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,
however, that Borrowers shall not be obligated hereunder to indemnify for any loss, cost, expense, or
liability to the extent that a court of competent jurisdiction finally determines that such loss, cost, expense, or
liability resulted from the gross negligence or willful misconduct of the Issuing Lender, any other member of the
Lender Group, or any Underlying Issuer. Each Borrower agrees to be bound by the Underlying Issuer’s
regulations and interpretations of any Letter of Credit or by Issuing Lender’s interpretations of any
Reimbursement Undertaking even though this interpretation may be different from such Borrower’s own, and
each Borrower understands and agrees that none of the Issuing Lender, the Lender Group, or any Underlying
Issuer shall be liable for any error, negligence, or mistake, whether of omission or commission, in following
Borrowers’ instructions or those contained in the Letter of Credit or any modifications, amendments, or
supplements thereto. Each Borrower understands that the Reimbursement Undertakings may require Issuing
Lender to indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by
Borrowers against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save, defend, and hold Issuing
Lender and the other members of the Lender Group harmless with respect to any loss, cost, expense (including
reasonable attorneys fees), or liability incurred by them as a result of the Issuing Lender’s
indemnification of an Underlying Issuer; provided, however, that no Borrower shall be obligated
hereunder to indemnify for any



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TREATMENT REQUESTED


such loss, cost, expense, or liability to the extent that it is caused by the gross negligence or
willful misconduct of the Issuing Lender or any other member of the Lender Group. Each Borrower
hereby acknowledges and agrees that none of the Issuing Lender, any other member of the Lender
Group, or any Underlying Issuer shall be responsible for delays, errors, or omissions resulting
from the malfunction of equipment in connection with any Letter of Credit.




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



          (e) Any and all issuance charges, usage charges, commissions, fees, and costs incurred
by the Issuing Lender relating to Underlying Letters of Credit shall be Lender Group Expenses
for purposes of this Agreement and shall be reimbursable promptly, but in any event, within 1 Business Day by
Borrowers to Agent for the account of the Issuing Lender; it being acknowledged and agreed by Borrowers
that, as of the Closing Date, the usage charge imposed by the Underlying Issuer is .825% per annum times the
undrawn amount of each Underlying Letter of Credit, that such usage charge may be changed from time to
time, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions,
drawings, and renewals.



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



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



               (ii) there shall be imposed on the Issuing Lender, any other member of the
Lender Group, or Underlying Issuer any other condition regarding any Letter of Credit or
Reimbursement Undertaking,


and the result of the foregoing is to increase, directly or indirectly, the cost to the Issuing
Lender, any other member of the Lender Group, or an Underlying Issuer of issuing, making,
guaranteeing, or maintaining any Reimbursement Undertaking or Letter of Credit or to reduce the
amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a
reasonable period after the additional cost is incurred or the amount received is reduced, notify
Administrative Borrower, and Borrowers shall pay within 30 days after demand therefor, such
amounts as Agent may specify to be necessary to compensate the Issuing Lender, any other member of
the Lender Group, or an Underlying Issuer for such additional cost or reduced receipt, together
with interest on such amount from the date of such demand until payment in full thereof at the
rate then applicable to Base Rate Loans hereunder; provided, however, that
Borrowers shall not be required to provide any compensation pursuant to this Section 2.11(f)
for any such amounts incurred more than 180 days prior to the date on which the demand
for payment of such amounts is first made to Borrowers; provided further, however,
that if an event or circumstance giving rise to such amounts is retroactive, then the 180-day
period referred to above shall be extended to include the period of retroactive effect thereof.
The determination by Agent of any amount due pursuant to this Section 2.11(f), 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.




     2.12 LIBOR Option.



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TREATMENT REQUESTED


          (a) Interest and Interest Payment Dates. In lieu of having interest charged at the rate
based upon the Base Rate, Borrowers shall have the option, subject to Section 2.12(b)
below (the “LIBOR Option”) to have interest on all or a portion of the Advances
be charged (whether at the time when made (unless otherwise provided herein), upon conversion
from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR
Rate Loan) at a rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall be
payable on the earliest of (i) the last day of the Interest Period applicable thereto; (ii) the
date on which all or any portion of the Obligations are accelerated pursuant to the
terms hereof, or (iii) the date on which this Agreement is terminated pursuant to the terms
hereof. On the last day of each applicable Interest Period, unless Administrative 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 Borrowers no longer shall have the option to request that
Advances bear interest at a rate based upon the LIBOR Rate.



          (b) LIBOR Election.



               (i) Administrative Borrower may, at any time and from time to time, so long as
no Event of Default has occurred and is continuing, elect to exercise the LIBOR Option by
notifying Agent prior to 11:00 a.m. (California time) at least 3 Business Days prior to the
commencement of the proposed Interest Period (the “LIBOR Deadline”). Notice of
Administrative Borrower’s election of the LIBOR Option for a permitted portion of the Advances and
an Interest Period pursuant to this Section shall be made by delivery to Agent of a LIBOR Notice
received by Agent before the LIBOR Deadline, or by telephonic notice received by Agent before the
LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior to
5:00 p.m. (California time) on the same day). Promptly upon its receipt of each such LIBOR Notice,
Agent shall provide a copy thereof to each of the affected Lenders.



               (ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In
connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent and
the Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender
as a result of (A) the payment of any principal of any LIBOR Rate Loan other than on the last day
of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the
conversion of any LIBOR Rate Loan other than on the last day of the Interest Period applicable
thereto, or (C) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date
specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses,
“Funding Losses”). A certificate of Agent or a Lender delivered to Administrative 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. Borrowers
shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of its
receipt of such certificate. If a payment of a LIBOR Rate Loan on a day other than the last day of
the applicable Interest Period would result in a Funding Loss, Agent may, in its sole discretion
at the request of Administrative 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, Borrowers shall be obligated to pay any resulting
Funding Losses.



               (iii) Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any
given time. Borrowers only may exercise the LIBOR Option for proposed LIBOR Rate Loans of at
least $1,000,000.



          (c) Conversion. Borrowers may convert LIBOR Rate Loans to Base Rate Loans at any
time; provided, however, that in the event that LIBOR Rate Loans are converted
or prepaid on any date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required application by Agent
of proceeds of Parent’s and its Non-CFC Subsidiaries’ Collections



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CONFIDENTIAL
TREATMENT REQUESTED



in accordance with Section 2.4(b) or for any other reason, including early termination of
the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the
terms hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their
Participants harmless against any and all Funding Losses in accordance with Section 2.12(b)(ii).



          (d) Special Provisions Applicable to LIBOR Rate.



               (i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased costs, in each case, due to changes
in applicable law occurring subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in corporate income tax
laws) and changes in the reserve requirements imposed by the Board of Governors of the Federal
Reserve System (or any successor), excluding the Reserve Percentage, 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 Administrative 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, Administrative Borrower may, by
notice to such affected Lender (y) require such Lender to furnish to Administrative Borrower a
statement setting forth the basis for adjusting such LIBOR Rate and the method for determining the
amount of such adjustment, or (z) repay the LIBOR Rate Loans with respect to which such adjustment
is made (together with any amounts due under Section 2.12(b)(ii)).



               (ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation or application thereof, shall
at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Agent and Administrative 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) Borrowers shall not be entitled to elect the LIBOR Option until such Lender determines
that it would no longer be unlawful or impractical to do so.



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



     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 requirements for banks or bank holding
companies, or any change in the interpretation 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 Administrative Borrower and Agent thereof. Following receipt of such
notice, Borrowers agree to pay such Lender on demand the amount of such reduction of return of
capital as and when



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CONFIDENTIAL
TREATMENT REQUESTED


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 Borrowers 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 Administrative 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.




          (b) If any Lender requests reimbursement for additional or increased costs referred to in
Section 2.12(d)(i) or amounts under Section 2.13 (a) (any such Lender, an
“Affected Lender”), then such Affected Lender shall use reasonable efforts to promptly
designate a different one of its lending offices or to assign its rights and obligations hereunder
to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender,
such designation or assignment would eliminate or reduce amounts payable pursuant to Section
2.12(d)(i) or Section 2.13(a), as applicable, and (ii) in the reasonable judgment of
such Affected Lender, such designation or assignment would not subject it to any material
unreimbursed cost or expense and would not otherwise be materially disadvantageous to it.
Borrowers agree to pay all reasonable out-of-pocket costs and expenses incurred by such Affected
Lender in connection with any such designation or assignment. If, after such reasonable efforts,
such Affected Lender does not so designate a different one of its lending offices or assign its
rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any
future amounts to such Affected Lender pursuant to Section 2.12(d)(i) or Section
2.13(a), as applicable, then Borrowers (without prejudice to any amounts then due to such
Affected Lender under 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 2.12(d)(i) or Section 2.13(a),
as applicable, 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.




     2.14 Joint and Several Liability of Borrowers.



          (a) Each Borrower is accepting joint and several liability hereunder and under the other
Loan Documents in consideration of the financial accommodations to be provided by the Lender
Group under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in
consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.




          (b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several liability with the
other Borrowers, with respect to the payment and performance of all of the Obligations
(including any Obligations arising under this Section 2.14). it being the intention
of the parties hereto that all the Obligations shall be the joint and several
obligations of each Borrower without preferences or distinction among them.




          (c) If and to the extent that any Borrower shall fail to make any payment with respect to
any of the Obligations as and when due or to perform any of the Obligations in accordance with
the terms thereof, then in each such event the other Borrowers will make such payment with respect to,
or perform, such Obligation.




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CONFIDENTIAL
TREATMENT REQUESTED



          (d) The Obligations of each Borrower under the provisions of this Section 2.14
constitute the absolute and unconditional, full recourse Obligations of each Borrower
enforceable against each
Borrower to the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other circumstances whatsoever.




          (e) Except as otherwise expressly provided in this Agreement, each Borrower hereby
waives notice of acceptance of its joint and several liability, notice of any Advances or
Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of
Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted
by Agent or Lenders under or in respect of any of the Obligations, any requirement of diligence or to
mitigate damages and, generally, to the extent permitted by applicable law, all demands,
notices and other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). Each Borrower hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of
any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time
or times in respect of any default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in
respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at
any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or
in part, of any Borrower. Without limiting the generality of the foregoing, each Borrower assents to any other
action or delay in acting or failure to act on the part of any Agent or Lender with respect to the failure by
any Borrower to comply with any of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this Section 2.14 afford grounds for
terminating, discharging or relieving any Borrower, in whole or in part, from any of its Obligations under this
Section 2.14, it being the intention of each Borrower that, so long as any of the Obligations hereunder remain
unsatisfied, the Obligations of each Borrower under this Section 2.14 shall not be discharged except by
performance and then only to the extent of such performance. The Obligations of each Borrower under this
Section 2.14 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any Borrower or any Agent or Lender.




          (f) Each Borrower represents and warrants to Agent and Lenders that such Borrower is
currently informed of the financial condition of Borrowers and of all other circumstances
which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each
Borrower further represents and warrants to Agent and Lenders that such Borrower has read and understands the
terms and conditions of the Loan Documents. Each Borrower hereby covenants that such Borrower will
continue to keep informed of Borrowers’ financial condition, the financial condition of other guarantors, if
any, and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.




          (g) Each Borrower waives all rights and defenses arising out of an election of remedies
by Agent or any Lender, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed Agent’s
or such Lender’s rights of subrogation and reimbursement against such Borrower by the
operation of Section 580(d) of the California Code of Civil Procedure or otherwise:




          (h) Each Borrower waives all rights and defenses that such Borrower may have because
the Obligations are secured by Real Property. This means, among other things:




               (i) Agent and Lenders may collect from such Borrower without first foreclosing on any
real or personal property Collateral pledged by Borrowers.



               (ii) If Agent or any Lender forecloses on any Real Property Collateral pledged by
Borrowers:



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                    (A) The amount of the Obligations may be reduced only by the price for
which that collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price.



                    (B) Agent and Lenders may collect from such Borrower even if Agent
or Lenders, by foreclosing on the Real Property Collateral, has destroyed any right such Borrower
may have to collect from the other Borrowers.


This is an unconditional and irrevocable waiver of any rights and defenses such Borrower may have
because the Obligations are secured by Real Property. These rights and defenses include, but are
not limited to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the
California Code of Civil Procedure.




          (i) The provisions of this Section 2.14 are made for the benefit of Agent, Lenders
and their respective successors and assigns, and may be enforced by it or them from time to time
against any or all Borrowers as often as occasion therefor may arise and without requirement on
the part of Agent, Lender, successor or assign first to marshal any of its or their claims or to
exercise any of its or their rights against any Borrower or to exhaust any remedies available to
it or them against any Borrower or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or to elect any other remedy. The provisions of this Section
2.14 shall remain in effect until all of the Obligations shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of
any of the Obligations, is rescinded or must otherwise be restored or returned by Agent or any
Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the
provisions of this Section 2.14 will forthwith be reinstated in effect, as though such
payment had not been made.



          (j) Until the Obligations have been paid in full and all of the Revolver Commitments
terminated, each Borrower hereby agrees that it will not enforce any of its rights of contribution
or subrogation against any other Borrower with respect to any liability incurred by it hereunder
or under any of the other Loan Documents, any payments made by it to Agent or Lenders with respect
to any of the Obligations or any collateral security therefor until such time as all of the
Obligations have been paid in full in cash. Any claim which any Borrower may have against any
other Borrower with respect to any payments to any Agent or Lender hereunder or under any other
Loan Documents are hereby expressly made subordinate and junior in right of payment, without
limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary,
all such Obligations shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any other Borrower
therefor.



          (k) Each Borrower hereby agrees that, after the occurrence and during the continuance of any
Default or Event of Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior payment in full in cash
of the Obligations. Each Borrower hereby agrees that after the occurrence and during the
continuance of any Default or Event of Default, such Borrower will not demand, sue for or otherwise
attempt to collect any indebtedness of any other Borrower owing to such Borrower until the
Obligations shall have been paid in full in cash. If, notwithstanding the foregoing sentence, such
Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee for Agent, and such
Borrower shall deliver any such amounts to Agent for application to the Obligations in accordance
with Section 2.4(b).



3. CONDITIONS; TERM OF AGREEMENT.




     3.1 Conditions Precedent to the Initial Extension of Credit. The obligation of each
Lender to make its initial extension of credit provided for hereunder, is subject to the
fulfillment, to the satisfaction of Agent and each Lender of each of the conditions precedent set
forth on Schedule 3.1 (the making of such



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initial extension 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 Advances hereunder (or to extend any other credit hereunder)
at any time shall be subject to the following conditions precedent:



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




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




     3.3 Maturity. This Agreement shall continue in full force and effect for a term
ending on October 2, 2013 (the “Maturity Date”); provided that if on or prior to August
12, 2010, a 2010 Event has not
occurred, then the Maturity Date shall be August 12, 2010. The foregoing notwithstanding, the
Lender Group, upon the election of the Required Lenders, shall have the right to terminate its obligations
under this Agreement immediately and without notice upon the occurrence and during the continuation of an
Event of Default.



     3.4 Effect of Maturity. On the Maturity Date, all commitments of the Lender Group to
provide additional credit hereunder shall automatically be terminated and all Obligations (including
contingent reimbursement obligations of Borrowers with respect to outstanding Letters of Credit and
including all Bank
Product Obligations) immediately shall become due and payable without notice or demand (and,
as a part of such Obligations becoming due and payable, Borrowers shall immediately and automatically be
obligated to provide (a) Letter of Credit Collateralization, and (b) Bank Product Collateralization). 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 Borrowers’ sole expense, execute and deliver any termination statements, lien releases,
discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable
form) as are reasonably necessary to release, as of record, Agent’s Liens and all notices of security
interests and liens previously filed by Agent with respect to the Obligations.



     3.5 Early Termination by Borrowers. Borrowers have the option, at any time upon 10
Business Days prior written notice to Agent, to terminate this Agreement and terminate the
Revolver Commitments hereunder by paying to Agent the Obligations (including (a) providing Letter of
Credit Collateralization with respect to the then existing Letter of Credit Usage, and (b) providing
Bank Product Collateralization with respect to the then existing Bank Products), in full.



4. REPRESENTATIONS AND WARRANTIES.




          In order to induce the Lender Group to enter into this Agreement, each Borrower makes the
following representations and warranties to the Lender Group which shall be true, correct, and
complete, in all material respects (except that such materiality qualifier shall not be applicable
to any representations and warranties that already are qualified or modified by materiality in the
text thereof), as of the Closing Date, and




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TREATMENT REQUESTED


shall be true, correct, and complete, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof), as of the date of the making of each Advance (or
other extension of credit) made thereafter, as though made on and as of the date of such Advance
(or other extension of credit) (except to the extent that such representations and warranties
relate solely to an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:




     4.1 Due Organization and Qualification; Subsidiaries.



          (a) Except as set forth on Schedule 4.1(a), each Loan Party (i) is duly organized and
existing and in good standing under the laws of the jurisdiction of its organization, (ii) is
qualified to do business in any state where the failure to be so qualified could reasonably be expected to
result in a Material
Adverse Change, and (iii) has all requisite power and authority to own and operate its
properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated thereby.




          (b) Set forth on Schedule 4.1(b) is a complete and accurate description of the
authorized capital Stock of each 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),
there are no subscriptions, options, warrants, or calls relating to any shares of any Borrower’s capital
Stock, including any right of conversion or exchange under any outstanding security or other instrument. No
Borrower is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock.




          (c) Set forth on Schedule 4.1(c) (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 Stock authorized for each of such Subsidiaries, and (ii) the number and the
percentage of the outstanding shares of each such class owned directly or indirectly by Parent. All of the
outstanding capital Stock of each such Subsidiary has been validly issued and is fully paid and non-assessable.




          (d) Except as set forth on Schedule 4.1 (c) (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 Parent’s Subsidiaries’
capital Stock, including any right of conversion or exchange under any outstanding security or other
instrument. Neither Parent nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of Parent’s Subsidiaries’ capital Stock or any security
convertible into or exchangeable for any such capital Stock.




     4.2 Due Authorization; No Conflict.



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




          (b) As to each Loan Party, the execution, delivery, and performance by such Loan Party
of the Loan Documents to which it is a party do not and will not (i) violate any material
provision of federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the
Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other
Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan
Party or its Subsidiaries except to the extent that any such conflict, breach or default could not
individually or in the aggregate reasonably be expected to have a Material Adverse Change, (iii) result in or require
the creation or




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imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than
Permitted Liens, or (iv) require any approval of any Loan Party’s interest holders or any approval
or consent of any Person under any Material Contract of any Loan Party, other than consents or
approvals that have been obtained and that are still in force and effect and except, in the case
of Material Contracts, for consents or approvals, the failure to obtain could not individually or
in the aggregate reasonably be expected to cause a Material Adverse Change.




     4.3 Governmental Consents. The execution, delivery, and performance by each Loan Party
of the Loan Documents to which such Loan Party is a party and the consummation of the
transactions contemplated by the Loan Documents do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any Governmental Authority, 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, and except for actions with or by Governmental
Authorities the failure to take which could not reasonably be expected to result in a Material Adverse Change.



     4.4  Binding Obligations; Perfected Liens.



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




          (b) Agent’s Liens are validly created, perfected (other than (i) in respect of motor
vehicles that are subject to a certificate of title and as to which Agent has not caused its
Lien to be noted on the
applicable certificate of title, and (ii) any Deposit Accounts and Securities Accounts not
subject to a Control
Agreement as permitted by Section 6.11, and subject only to the filing of financing
statements, the recordation
of the Copyright Security Agreement, and the recordation of the Mortgages, in each case, in
the appropriate filing offices), and first priority Liens, subject only to Permitted Liens.




     4.5 Title to Assets; No Encumbrances. Each of the Loan Parties and its Subsidiaries
has (i) good, sufficient and legal title to (in the case of fee interests in Real Property), (ii)
valid leasehold interests in
(in the case of leasehold interests in real or personal property), and (iii) good and
marketable title to (in the
case of all other personal property), all of their respective assets reflected in their most
recent financial
statements delivered pursuant to Section 5.1, in each case except for assets disposed
of since the date of such
financial statements to the extent permitted hereby. All of such assets are free and clear of
Liens except for Permitted Liens.



     4.6 Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.



          (a) The name of (within the meaning of Section 9-503 of the Code) and jurisdiction of
organization of each Loan Party and each of its Subsidiaries is set forth on Schedule
4.6(a) (as such Schedule
may be updated from time to time to reflect changes resulting from transactions permitted
under this Agreement).




          (b) The chief executive office of each Loan Party and each of its Subsidiaries is located
at the address indicated on Schedule 4.6(b) (as such Schedule may be updated from time
to time to reflect changes resulting from transactions permitted under this Agreement).




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CONFIDENTIAL
TREATMENT REQUESTED



          (c) Each Loan Party’s and each of its Subsidiaries’ tax identification numbers and
organizational identification numbers, if any, are identified on Schedule 4.6(c) (as
such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this
Agreement).




          (d) As of the Closing Date, no Loan Party and no Subsidiary of a Loan Party holds any
commercial tort claims, except as set forth on
Schedule 4.6(d).




     4.7 Litigation.



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




          (b) Schedule 4.7(b) 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, $500,000, that, as of the Closing
Date, is pending or, to the knowledge of
each Borrower, after due inquiry, 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 status, as of the Closing Date, with respect to such actions, suits, or
proceedings, and (iv) whether any liability of the Loan Parties’ and their Subsidiaries in connection with such
actions, suits, or proceedings is covered by insurance.




     4.8
Compliance with Laws. Except as set forth on Schedule 4.8, no Loan Party nor any of its
Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or
codes (including Environmental Laws) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Change, or (b) is subject to or in default with respect
to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any
federal, state, municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Change.



     4.9 No Material Adverse Change. All historical financial statements relating to the
Loan Parties and their Subsidiaries that have been delivered by Borrowers to Agent have been
prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the
Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and results of
operations for the period then ended. Since April 30, 2009, no event, circumstance, or change has occurred that
has or could reasonably be expected to result in a Material Adverse Change with respect to the Loan Parties and their
Subsidiaries.




     4.10 Fraudulent Transfer.



          (a) Each Loan Party is Solvent.




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




     4.11 Employee Benefits. Except as set forh on Schedule 4.11, no Loan Party,
none of their Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any Benefit Plan.



     4.12 Environmental Condition. (a) To each 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



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TREATMENT REQUESTED


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
each Borrower’s knowledge, after due inquiry, 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
Change.




     4.13 Intellectual Property. Each Loan Party and its Subsidiaries own, or hold
licenses in, all trademarks, trade names, copyrights, patents, and licenses that are necessary to the conduct
of its business as currently conducted, and attached hereto as Schedule 4.13 (as updated each fiscal
quarter of Parent) is a true, correct, and complete listing of all trademarks, trade names, copyrights, patents, and
material licenses as to which Parent or one of its Subsidiaries is the owner or is an exclusive licensee;
provided, however, that Administrative Borrower may amend Schedule 4.13 to add additional intellectual
property so long as such amendment occurs by written notice to Agent at the time that Parent provides its Compliance
Certificate for each fiscal quarter pursuant to Section 5.1.



     4.14 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.



     4.15 Deposit Accounts and Securities Accounts. Set forth on Schedule 4.15 (as updated
pursuant to the provisions of the Security Agreement from time to time) is a listing of all of
the Loan Parties’ and their Subsidiaries’ Deposit Accounts and Securities Accounts, including, with respect to
each bank or securities intermediary (a) the name and address of such Person, and (b) the account numbers
of the Deposit Accounts or Securities Accounts maintained with such Person.



     4.16 Complete Disclosure. All factual information taken as a whole (other than
forward-looking information and projections and information of a general economic nature and general
information about Borrowers’ industry) furnished by or on behalf of a Loan Party or its Subsidiaries in writing
to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan
Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other
such factual information taken as a whole (other than forward-looking information and projections and
information of a general economic nature and general information about Borrowers’ industry) hereafter furnished
by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender will be, true and
accurate, in all material respects, on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such information was provided. The
Projections delivered to Agent on September 1, 2009 represent, and as of the date on which any other
Projections are delivered to Agent, such additional Projections represent, Borrowers’ good faith estimate, on
the date such Projections are delivered, of the Loan Parties’ and their Subsidiaries’ future performance for
the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of
the delivery thereof to Agent (it being understood that such Projections are subject to uncertainties and
contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, that no assurances
can be given that such Projections will be realized, and that actual results may differ in a material manner
from such Projections).



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     4.17 Material Contracts. Set forth on Schedule 4.17 (as such Schedule may be
updated from time to time in accordance herewith) is a reasonably detailed description of the Material
Contracts of each Loan Party and its Subsidiaries as of the most recent date on which Borrowers provided its
Compliance Certificate pursuant to Section 5.1; provided, however, that
Administrative Borrower may amend Schedule
4.17 to add additional Material Contracts so long as such amendment occurs by written notice
to Agent on the date that Parent provides its Compliance Certificate. Except for matters which, either
individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Change, each
Material Contract (other than those that have expired at the end of their normal terms or in accordance with the
termination provisions therein) (a) is in full force and effect and is binding upon and enforceable
against the applicable Loan Party or its Subsidiary and, to each Borrower’s knowledge, after due inquiry, each other
Person that is a party thereto in accordance with its terms, (b) has not been otherwise amended or modified
(other than amendments or modifications permitted by Section 6.7(b)), and (c) is not in default
due to the action or inaction of the applicable Loan Party or its Non-CFC Subsidiary.



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



     4.19 Indebtedness. Set forth on Schedule 4.19 is a true and complete list of
all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date
that is to remain outstanding immediately after giving effect to the closing hereunder on the Closing
Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the
Closing Date.



     4.20 Payment of Taxes. Except as otherwise permitted under Section 5.5, all
tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been
timely filed, and all 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. No Borrower knows of any 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.



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



     4.22 Governmental Regulation. No Loan Party nor any of its Subsidiaries is subject to
regulation under the Federal Power Act or the Investment Company Act of 1940 or under any
other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable. No Loan Party nor any of its Subsidiaries is
a “registered investment company” or a company “controlled” by a “registered investment company” or a
“principal



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underwriter” of a “registered investment company” as such terms are defined in the Investment
Company Act of 1940.




     4.23 OFAC. No Loan Party nor any of its Subsidiaries is in violation of any of the
country or list based economic and trade sanctions administered and enforced by OFAC. No Loan Party nor any
of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in
Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or
Sanctioned Entities. The proceeds of any Advance will not be used to fund any operations in, finance any
investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.



     4.24 Employee and Labor Matters. There is (i) no unfair labor practice complaint
pending or, to the knowledge of Borrowers, threatened against Parent or its Subsidiaries before any
Governmental Authority and no grievance or arbitration proceeding pending or threatened against Parent or its
Subsidiaries which arises out of or under any collective bargaining agreement and that could reasonably be expected to
result in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or similar action or
grievance pending or threatened in writing against Parent or its Subsidiaries that could reasonably be expected to
result in a material liability, or (iii) except as set forth on Schedule 4.24, to the knowledge of any
Borrower, after due inquiry, no union representation question existing with respect to the employees of Parent or its
Subsidiaries and no union organizing activity taking place with respect to any of the employees of Parent or its
Subsidiaries. None of Parent 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 Parent 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 Change. All material
payments due from Parent or its Subsidiaries on account of wages and employee health and welfare insurance and
other benefits have been paid or accrued as a liability on the books of Parent, except where the failure to
do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Change.



     4.25 Eligible Accounts, Eligible Investment Grade Foreign Accounts and Eligible Credit
Insured Accounts. As to each Account that is identified by Administrative Borrower as
an Eligible Account,
an Eligible Investment Grade Account or an Eligible Credit Insured Account in a Borrowing Base
Certificate submitted to Agent, such Account is (a) a bona fide existing payment obligation of the
applicable Account Debtor created by the sale and delivery of Inventory or the rendition of services to such
Account Debtor in the ordinary course of Borrowers’ business, (b) owed to a Borrower without any known defenses,
disputes, offsets, counterclaims, or rights of return or cancellation, and (c) not excluded as ineligible by
virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the definition
of Eligible Accounts, Eligible Investment Grade Accounts or Eligible Credit Insured Accounts, as applicable.



     4.26 Eligible Inventory. As to each item of Inventory that is identified by Administrative
Borrower as Eligible Inventory in a Borrowing Base Certificate submitted to Agent, such
Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by
virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the
definition of Eligible Inventory.



     4.27 Eligible Equipment. As to each item of Equipment that is identified by
Administrative Borrower as Eligible Equipment in a Borrowing Base Certificate submitted to Agent, such
Equipment is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by
virtue of one or more of the excluding criteria (other than Agent-discretionary criteria) set forth in the
definition of Eligible Equipment.



     4.28 Locations of Inventory and Equipment. The Inventory and Equipment (other than
vehicles or Equipment out for repair) of the Loan Parties and their Subsidiaries are not stored with a
bailee,



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TREATMENT REQUESTED


warehouseman, or similar party and are located only at, or in-transit between or to, the locations
identified on Schedule 4.28 (as such Schedule may be updated pursuant to Section
5.15).




     4.29 Inventory Records. Each Loan Party keeps correct and accurate records itemizing
and describing the type, quality, and quantity of its and its Subsidiaries’ Inventory and the book
value thereof.



     4.30 The Indentures. Neither the execution or performance of the Loan Documents nor
the incurrence of any Obligations by Parent or any of its Subsidiaries violates any of the 2003
Indenture, the 2006 Indenture or the Subordinated Notes. The Revolver Commitments and Obligations constitute
“Designated Senior Indebtedness” under each Indenture. Agent may condition Borrowings, Letters of Credit
and other credit accommodations under the Loan Documents from time to time upon Agent’s receipt of
evidence that the Revolver Commitments and Obligations continue to constitute “Designated Senior Indebtedness”
at such time.



5. AFFIRMATIVE COVENANTS.




          Each Borrower covenants and agrees that, until termination of all of the Revolver Commitments
and payment in full of the Obligations, the Loan Parties shall and shall cause each of their
Subsidiaries to comply with each of the following:




     5.1 Financial Statements, Reports, Certificates. Deliver to Agent, with copies to each
Lender,
each of the financial statements, reports, and other items set forth on Schedule 5.1
no later than the times specified therein. In addition, each Borrower agrees that no Subsidiary of a Loan Party will
have a fiscal year different from that of Parent. In addition, Parent agrees to maintain a system of accounting
that enables Parent to produce financial statements in accordance with GAAP. Each Loan Party shall also (a) keep
a reporting system that shows all additions, sales, claims, returns, and allowances with respect to its
and its Subsidiaries’ sales, and (b) maintain its billing systems/practices consistent with those disclosed by
Borrowers to Agent prior to 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, delayed or conditioned).



     5.2 Collateral Reporting. Provide Agent (and if so requested by Agent, with copies
for each Lender) with each of the reports set forth on Schedule 5.2 at the times specified
therein. In addition, Borrowers agree to use commercially reasonable efforts in cooperation with
Agent to facilitate and implement a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth on such Schedule.



     5.3 Existence. Except as otherwise permitted under Section 6.3 or
Section 6.4, at all times maintain and preserve in full force and effect its existence (including being in good standing
in its jurisdiction of organization) and all rights and franchises, licenses and permits material to its business;
provided, however, that no Loan Party or any of its Subsidiaries shall be required to preserve any such right or
franchise, licenses or permits if such Person’s board of directors (or similar governing body) shall determine
that the preservation thereof is no longer desirable in the conduct of the business of such Person, and that the
loss thereof is not disadvantageous in any material respect to such Person or to the Lenders.



     5.4 Maintenance of Properties. Maintain and preserve all of its assets that are
necessary or useful in the proper conduct of its business in good working order and condition, ordinary
wear, tear, and casualty excepted and Permitted Dispositions excepted, and comply with the material provisions
of all material leases to which it is a party as lessee, so as to prevent the loss or forfeiture thereof,
unless such provisions are the subject of a Permitted Protest.



     5.5 Taxes. Cause all assessments and taxes imposed, levied, or assessed against any
Loan Party or its Subsidiaries, or any of their respective assets or in respect of any of its income,
businesses, or franchises to be paid in full, before delinquency or before the expiration of any extension period,
except to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest and so long
as, in the case of



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an assessment or tax that has or may become a Lien against any of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such
assessment or tax. Parent will and will cause each of its Subsidiaries to make timely payment or
deposit of all tax payments and withholding taxes required of it and them by applicable laws,
including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and
federal income taxes, and will, upon request, furnish Agent with proof reasonably satisfactory to
Agent indicating that Parent and its Subsidiaries have made such payments or deposits.




     5.6 Insurance. At Borrowers’ expense, maintain insurance respecting each of the Loan
Parties’ and their Subsidiaries’ assets wherever located, covering loss or damage by fire, theft,
explosion, and all other
hazards and risks as ordinarily are insured against by other Persons engaged in the same or
similar businesses. Borrowers also shall maintain (with respect to each of the Loan Parties and their
Subsidiaries) business interruption, general liability, product liability insurance, director’s and officer’s
liability insurance, fiduciary
liability insurance, and employment practices liability insurance, as well as insurance
against larceny, embezzlement, and criminal misappropriation. All such policies of insurance shall be with
responsible and reputable insurance companies acceptable to Agent and in such amounts as is carried generally
in accordance with sound business practice by companies in similar businesses similarly situated and located
and in any event in amount, adequacy and scope reasonably satisfactory to Agent. All property insurance
policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the
Lenders, as their interests may appear, in case of loss, pursuant to a standard loss payable endorsement with a
standard non contributory “lender” or “secured party” clause and are to contain such other provisions as
Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any
payments to be made under such policies. All certificates of property and general liability insurance are to be
delivered to Agent, with the loss payable (but only in respect of Collateral) and additional insured endorsements in favor
of Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to
Agent of the exercise of any right of cancellation. If any Borrower fails to maintain such insurance, Agent
may arrange for such insurance, but at Borrowers’ 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. Administrative Borrower shall give Agent prompt notice of any loss exceeding $500,000 covered
by its casualty or business interruption insurance. Upon the occurrence and during the continuance
of an Event of Default, Agent shall have the sole right to file claims under any property and casualty
insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may
be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments,
reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies.



     5.7 Inspection. Permit Agent and each of its duly authorized representatives or
agents to visit any of its properties and inspect any of its assets or books and records, to conduct
appraisals and valuations, to
examine and make copies of its books and records, and to discuss its affairs, finances, and
accounts with, and to be advised as to the same by, its officers and employees at such reasonable times and
intervals as Agent may designate and, so long as no Default or Event of Default exists, with reasonable prior notice
to Administrative Borrower.



     5.8 Compliance with Laws. Comply with the requirements of all applicable laws, rules,
regulations, and orders of any Governmental Authority (including, without limitation, all laws
restricting or governing the export of Inventory from the United States), other than laws, rules,
regulations, and orders the non-compliance with which, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Change.



     5.9 Environmental.




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TREATMENT REQUESTED


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




          (b) Comply, in all material respects, with Environmental Laws and provide to Agent
documentation of such compliance which Agent reasonably requests,




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




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




     5.10 Disclosure Updates. Promptly and in no event later than 5 Business Days after
obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished
to the Lender Group contained, at the time it was furnished, any untrue statement of a material
fact or omitted to state any material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the
effect of the prior untrue statement of a material fact or omission of any material fact nor shall
any such notification have the effect of amending or modifying this Agreement or any of the
Schedules hereto.



     5.11 Formation of Subsidiaries. At the time that any Loan Party forms any direct or
indirect Subsidiary or acquires any direct or indirect Subsidiary after the Closing Date, such Loan
Party shall (a) within 10 days of such formation or acquisition (or such later date as permitted by
Agent in its sole discretion) cause any such new Subsidiary to provide to Agent a joinder to the
Guaranty and the Security Agreement, together with such other security documents (including
mortgages with respect to any Real Property owned in fee of such new Subsidiary, as well as
appropriate financing statements (and with respect to all property subject to a mortgage, fixture
filings), all in form and substance reasonably satisfactory to Agent (including being sufficient to
grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets of such newly
formed or acquired Subsidiary); provided that the Guaranty, the Security Agreement, and
such other security documents shall not be required to be provided to Agent with respect to any
Subsidiary of Parent that is a CFC if providing such documents would result in adverse tax
consequences or the costs to the Loan Parties of providing such Guaranty, executing any security
documents or perfecting the security interests created thereby are unreasonably excessive (as
determined by Agent in consultation with Administrative Borrower) in relation to the benefits of
Agent and the Lenders of the security or guarantee afforded thereby, (b) within 10 days of such
formation or acquisition (or such later date as permitted by Agent in its sole discretion) provide
to Agent a pledge agreement (or an addendum to the Security Agreement) and appropriate certificates
and powers or financing statements, pledging all of the direct or beneficial ownership interest in
such new Subsidiary reasonably satisfactory to Agent; provided that only 65% of the total
outstanding voting Stock of any first tier Subsidiary of Parent that is a CFC (and none of the
Stock of any Subsidiary of such CFC) shall be required to be pledged if pledging a greater amount
would result in adverse tax consequences or the costs to the Loan Parties of providing such pledge
or perfecting the security interests created thereby are unreasonably excessive (as determined by
Agent in consultation with Administrative Borrower) in relation to the benefits of Agent and the
Lenders of the security or guarantee afforded thereby (which pledge, if reasonably requested by
Agent, shall be governed by the laws of the jurisdiction of such Subsidiary), and (c) within 10
days of such formation or acquisition (or such later date as permitted by Agent in its sole
discretion) provide to Agent all other



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TREATMENT REQUESTED


documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which
in its opinion is appropriate with respect to the execution and delivery of the applicable
documentation referred to above (including policies of title insurance or other documentation with
respect to all Real Property owned in fee and subject to a mortgage). Any document, agreement, or
instrument executed or issued pursuant to this Section 5.11 shall be a Loan Document.




     5.12 Further Assurances. At any time upon the reasonable request of Agent, execute or
deliver to Agent any and all financing statements, fixture filings, security agreements, pledges,
assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel,
and all other documents (collectively, the “Additional Documents”) that Agent may
reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect, and
continue perfected or to better perfect Agent’s Liens in all of the assets of Parent and its
Subsidiaries (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 Parent or
its Subsidiaries after the Closing Date, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents; provided that the foregoing shall
not apply to any Subsidiary of Parent that is a CFC if providing such documents would result in
adverse tax consequences or the costs to the Loan Parties of providing such documents are
unreasonably excessive (as determined by Agent in consultation with Administrative Borrower) in
relation to the benefits of Agent and the Lenders of the benefits afforded thereby. To the
maximum extent permitted by applicable law, each Borrower authorizes Agent to execute any such
Additional Documents in the applicable Loan Party’s or its Subsidiary’s name, as applicable, and
authorizes Agent to file such executed Additional Documents in any appropriate filing office. In
furtherance and not in limitation of the foregoing, each Loan Party shall take such actions as
Agent may reasonably request from time to time to ensure that the Obligations are guarantied by the
Guarantors and are secured by substantially all of the assets of Parent and its Subsidiaries and
all of the outstanding capital Stock of Parent’s Subsidiaries (subject to exceptions and
limitations contained in the Loan Documents with respect to CFCs).



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



     5.14 Material Contracts. Contemporaneously with the delivery of each Compliance
Certificate pursuant to Section 5.1, provide Agent with copies of (a) each Material
Contract entered into since the delivery of the previous Compliance Certificate, and (b) each
material amendment or modification of any Material Contract entered into since the delivery of the
previous Compliance Certificate.



     5.15 Location of Inventory and Equipment. Keep each Loan Parties’ and its
Subsidiaries’ Inventory and Equipment (other than vehicles and Equipment out for repair) only at
the locations identified on Schedule 4.28 and their chief executive offices only at the
locations identified on Schedule 4.6(b); provided, however, that
Administrative Borrower may amend Schedule 4.28 or Schedule 4.6(b) so long as such
amendment occurs by written notice to Agent not less than 10 days prior to the date on which such
Inventory or Equipment is moved to such new location or such chief executive office is relocated
and so long as such new location is within the continental United States, and so long as, at the
time of such written notification, Administrative Borrower uses commercially reasonable efforts
to provide Agent a Collateral Access Agreement with respect thereto.



     5.16 Assignable Material Contracts. Use commercially reasonable efforts to ensure
that any Material Contract entered into after the Closing Date by Parent or one of its Non-CFC
Subsidiaries that generates or, by its terms, will generate revenue, permits the assignment of such
agreement (and all rights of Parent or such Non-CFC Subsidiary, as applicable, thereunder) to
Parent’s or such Non-CFC Subsidiary’s lenders or an agent for any lenders (and any transferees of
such lenders or such agent, as applicable).



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TREATMENT REQUESTED

6. NEGATIVE COVENANTS.




          Each Borrower covenants and agrees that, until termination of all of the Revolver Commitments
and payment in full of the Obligations, the Loan Parties will not and will not permit any of their
Subsidiaries to do any of the following:




     6.1 Indebtedness. Create, incur, assume, suffer to exist, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any Indebtedness, except for
Permitted Indebtedness.



     6.2 Liens. Create, incur, assume, or suffer to exist, directly or indirectly, any
Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired,
or any income or profits therefrom, except for Permitted Liens.



     6.3 Restrictions on Fundamental Changes.



          (a) Enter into any merger, consolidation, reorganization, or recapitalization, or reclassify
its Stock, except for (i) any merger between Loan Parties, provided that to the extent the
merger involves a Borrower, a Borrower must be the surviving entity of any such merger, (ii) any
merger between Loan Parties and Subsidiaries of Parent that are not Loan Parties so long as such
Loan Party is the surviving entity of any such merger, and (iii) any merger between Subsidiaries of
Parent that are not Loan Parties,




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




          (c) Suspend or go out of a substantial portion of its or their business, except as permitted
pursuant to clauses (a) or (b) above or in connection with the transactions permitted pursuant to
Section 6.4.




     6.4 Disposal of Assets. Other than Permitted Dispositions, Permitted
Investments, or transactions expressly permitted by
Sections 6.3 and 6.11,
convey, sell, lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement
to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any of Parent’s or its
Subsidiaries assets.



     6.5 Change Name. Change Parent’s or any of its Subsidiaries’ name,
organizational identification number, state of organization or organizational identity;
provided, however, that Parent or any of its Subsidiaries may change their names
upon at least 10 days prior written notice to Agent of such change.



     6.6 Nature of Business. Make any change in the nature of its or their business as
described in Schedule 6.6 or acquire any properties or assets that are not reasonably
related to the conduct of such business activities; provided, however, that the
foregoing shall not prevent Parent and its Subsidiaries from engaging in any business that is
reasonably related or ancillary to its or their business.



     6.7 Prepayments and Amendments.



          (a) Except in connection with Refinancing Indebtedness permitted by
Section 6.1,





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TREATMENT REQUESTED


               (i) optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness
of Parent or its Subsidiaries, other than (A) the Obligations in accordance with this Agreement,
(B) Permitted Intercompany Advances and (C) Permitted Notes Redemptions,



               (ii) make any payment on account of Indebtedness that has been contractually subordinated in
right of payment if such payment is not permitted at such time under the subordination terms and
conditions, or



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




               (i) any agreement, instrument, document, indenture, or other writing evidencing or concerning
Permitted Indebtedness other than (A) the Obligations in accordance with this Agreement, (B)
Permitted Intercompany Advances, and (C) Indebtedness permitted under clauses (c), (f), (h)
and (i) of the definition of Permitted Indebtedness,



               (ii) any Material Contract except to the extent that such amendment,
modification, or change could not, individually or in the aggregate, reasonably be expected to be
materially adverse to the interests of the Lenders, or



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



     6.8 Change of Control. Cause, permit, or suffer, directly or indirectly, any Change
of Control.



     6.9 Distributions. Make any distribution or declare or pay any dividends (in cash or
other property, other than common Stock) on, or purchase, acquire, redeem, or retire any of
Parent’s or any other Borrower’s Stock, of any class, whether now or hereafter outstanding;
provided, however, that, so long as it is permitted by law:



               (a) so long as no Default or Event of Default shall have occurred and be continuing
or would result therefrom, Parent may make distributions to former employees, officers, or
directors (or any spouses, ex-spouses, or estates of any of the foregoing) on account of
redemptions of Stock of Parent held by such Persons, provided, however, that the
aggregate amount of such distributions made by Parent to such Persons during any fiscal year of
Parent does not exceed $500,000 per year; and Parent may make distributions to former employees,
officers, or directors (or any spouses, ex-spouses, or estates of any of the foregoing), solely in
the form of forgiveness of Indebtedness of such Persons owing to Parent or a Borrower on account of
repurchases of the Stock of Parent or a Borrower held by such Persons; provided that such
Indebtedness was incurred by such Persons solely to acquire Stock of Parent or such Borrower; and



               (b) Parent’s Subsidiaries may make distributions to Parent for the sole purpose of
allowing Parent to, and Parent shall use the proceeds thereof solely to (i) pay federal and state
income taxes and franchise taxes solely arising out of the consolidated operations of Parent and
its Subsidiaries, after taking into account all available credits and deductions (provided that
neither a Borrower nor any of its Subsidiaries shall make any distribution to Parent in any amount
greater than the share of such taxes arising out of such Borrower’s consolidated net income), and
(ii) so long as no Event of Default shall have occurred and be continuing or would result
therefrom, pay other reasonable administrative and maintenance expenses arising solely out of the
consolidated operations (including maintenance of existence) of Parent and its Subsidiaries.



     6.10 Accounting Methods. Modify or change its fiscal year or its method of accounting
(other than as may be required to conform to GAAP).



     6.11 Investments; Controlled Investments.



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TREATMENT REQUESTED


          (a) Except for Permitted Investments, directly or indirectly, make or acquire any Investment
or incur any liabilities (including contingent obligations) for or in connection with any
Investment.




          (b) Other than (i) an aggregate amount of not more than $10,000 at any one time, in the case
of Parent and its Subsidiaries (other than those Subsidiaries that are CFCs), (ii) amounts
deposited into Deposit Accounts specially and exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for Parent’s or its Subsidiaries’ employees, and (iii) in
the case of Subsidiaries of Parent that are CFCs, an aggregate amount of not more than: (A)
$10,000,000 in any five (5) consecutive day period, and (B) $25,000,000 at any one time (in each
case, calculated at current exchange rates); make, acquire, or permit to exist Permitted
Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts or
Securities Accounts unless Parent or its Subsidiary, 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 Section 6.11(b)(i), (ii), and (iii), Parent
shall not and shall not permit its Non-CFC Subsidiaries 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.




     6.12 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any transaction with any Affiliate of Parent or any of its Subsidiaries except for:



          (a) transactions (other than the payment of management, consulting, monitoring, or advisory
fees) between Parent or its Subsidiaries, on the one hand, and any Affiliate of Parent or 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 Parent or its
Subsidiaries in excess of $500,000 for any single transaction or series of related transactions,
and (ii) are no less favorable, taken as a whole, to Parent or its Subsidiaries, as applicable,
than would be obtained in an arm’s length transaction with a non-Affiliate,




          (b) so long as it has been approved by Parent’s or its applicable Subsidiary’s board of
directors (or comparable governing body) in accordance with applicable law, any indemnity provided
for the benefit of directors (or comparable managers) of Parent or its applicable Subsidiary,




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




          (d) transactions permitted by Section 6.3 or Section 6.9, or any Permitted
Intercompany Advance, and




          (e) purchases of Inventory by the Loan Parties from Non-Loan Parties in the ordinary course of
business so long as such transactions are no less favorable, taken as a whole, to the Loan Parties
than would be obtained in an arm’s length transaction with a non-Affiliate.




     6.13 Use of Proceeds. Use the proceeds of the Advances 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 transactional fees, costs, and expenses incurred in connection with this Agreement, the
other Loan Documents, and the transactions contemplated hereby and thereby, and (b) thereafter,
consistent with the terms and conditions hereof, for its lawful and permitted purposes.



     6.14 Consignments. Consign any of its or their Inventory or sell any of its or their
Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale;
provided, however, that Parent



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and its Subsidiaries may consign their Inventory with customers so long as the aggregate value
of all such Inventory (valued at the higher of cost or market) consigned at any one time does
not exceed $25,000,000.




     6.15 Inventory and Equipment with Bailees. Store the Inventory or Equipment of any
Loan Party at any time now or hereafter with a bailee, warehouseman, or similar party, other
than Inventory with an aggregate book value of less than $100,000 at any one time.



7. FINANCIAL COVENANTS.




          Each Borrower covenants and agrees that, until termination of all of the Revolver
Commitments and payment in full of the Obligations, Borrowers will comply with each of the
following financial covenants:




          (a) Excess Liquidity. Have Excess Liquidity plus Qualified Cash in an aggregate amount of
least [****] at all times.




          (b) Fixed Charge Coverage Ratio. Have a Fixed Charge Coverage Ratio, measured at the end of
each fiscal quarter of Parent on a trailing 4 fiscal quarter basis, of at least the required
amount set forth in the following table for the applicable period set forth opposite thereto:




	 	 	 
	Applicable Ratio	 	Applicable Period
	 	 	 
	[****]
	 	For the 4 fiscal quarter period ending November 1, 2009
	 	 	 
	[****]
	 	For the 4 fiscal quarter period ending January 31, 2010
	 	 	 
	[****]
	 	For the 4 fiscal quarter period ending April 30, 2010,

and for the 4 fiscal quarter period ending at the end of

each fiscal quarter thereafter






          (c) Capital Expenditures. Make Capital Expenditures in any fiscal year in an amount
less than or equal to, but not greater than, the amount set forth in the following table for the
applicable period:




	 	 	 	 	 
	Fiscal year ending on or about April 30, 2010
	 	$	26,500,000	 
	 
	 	 	 	 
	Fiscal year ending on or about April 30, 2011
	 	$	28,750,000	 
	 
	 	 	 	 
	Fiscal year ending on or about April 30, 2012 and each fiscal
year ending thereafter
	 	$	30,000,000	 






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 If Borrowers fail to pay when due and payable, or when declared due and payable,
(a) all or any portion of the Obligations consisting of interest, fees, or charges due the Lender
Group, reimbursement of



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Lender Group Expenses, or other amounts (other than any portion thereof constituting principal)
constituting Obligations (including any portion thereof that accrues after the commencement of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim
in any such Insolvency Proceeding), and such failure continues for a period of 3 Business Days, or
(b) all or any portion of the principal of the Obligations;




     8.2 If any Loan Party or any of its Subsidiaries:



          (a) fails to perform or observe any covenant or other agreement contained in any of (i)
Sections 5.1, 5.2, 5.3 (solely if a Borrower is not in good standing in its
jurisdiction of organization), 5.6, 5.7 (solely if a Borrower refuses to allow Agent or its
representatives or agents to visit such Borrower’s properties, inspect its assets or books or
records, examine and make copies of its books and records, or discuss such Borrower’s affairs,
finances, and accounts with officers and employees of such Borrower), 5.10, 5.11,
5.13, or 5.14 of this Agreement, (ii) Sections 6.1 through 6.15 of this
Agreement, (iii) Section 7 of this Agreement, or (iv) Section 6 of the Security Agreement;




          (b) fails to perform or observe any covenant or other agreement contained in any of
Sections 5.3 (other than if a Borrower is not in good standing in its jurisdiction of
organization), 5.4, 5.5, 5.8, 5.12, and 5.15 of this Agreement and such
failure continues for a period of 10 days after the earlier of (i) the date on which such failure
shall first become known to any officer of any Borrower or (ii) the date on which written notice
thereof is given to Administrative Borrower by Agent; or




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




     8.3 If one or more judgments, orders, or awards for the payment of money involving an
aggregate amount of $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 Non-CFC Subsidiaries, or with respect to any of
their respective assets, and either (a) there is a period of 30 consecutive days at any time after
the entry of any such judgment, order, or award during which (1) the same is not discharged,
satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in
effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;



     8.4 If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;



     8.5 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 If a Loan Party or any of its Subsidiaries is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part of the business
affairs of Parent and its Subsidiaries, taken as a whole;



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     8.7 If there is a default in one or more agreements to which a Loan Party or any of its
Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its
Subsidiaries’ Indebtedness involving: (a) an aggregate amount of $2,500,000 or more, and such
default 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 (b) an aggregate
amount of $500,000 or more, and such default (i) occurs at the final maturity of the obligations
thereunder, (ii) results in the actual acceleration by such Person or Persons of the maturity of
such Loan Party’s obligations thereunder, or (iii) is not cured or waived within thirty (30) days
of its occurrence;



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



     8.9 If the obligation of any Guarantor under the Guaranty is limited or terminated by
operation of law or by such Guarantor (other than in accordance with the terms of this Agreement or
the Guaranty);



     8.10 If the Security Agreement or any other Loan Document that purports to create a Lien,
shall, for any reason, fail or cease to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien on the Collateral covered thereby,
except as a result of a disposition of the applicable Collateral in a transaction permitted under
this Agreement; or



     8.11 The validity or enforceability of any Loan Document shall at any time for any reason
(other than solely as the result of an action or failure to act on the part of Agent or the
Lenders) be declared to be null and void by a court of competent jurisdiction, 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.



     8.12 If a “fundamental change”, as described in Exhibit P-l, or as otherwise defined
in any documents evidencing the Permitted Convertible Note Debt, occurs.



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 by
written notice to Administrative Borrower and 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 on behalf of the Lender Group:



          (a) declare the Obligations, whether evidenced by this Agreement or by any of the other Loan
Documents immediately due and payable, whereupon the same shall become and be immediately due and
payable, without presentment, demand, protest, or further notice or other requirements of any kind,
all of which are hereby expressly waived by each Borrower; and




          (b) declare the Revolver Commitments terminated, whereupon the Revolver Commitments shall
immediately be terminated together with any obligation of any Lender hereunder to
make Advances and the obligation of the Issuing Lender to issue Letters of Credit.



The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default
described in Section 8.4 or Section 8.5, in addition to the remedies set forth
above, without any notice to any Borrower or





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any other Person or any act by the Lender Group, the Revolver Commitments shall automatically
terminate and the Obligations then outstanding, together with all accrued and unpaid interest
thereon and all fees and all other amounts due under this Agreement and the other Loan Documents,
shall automatically and immediately become due and payable, without presentment, demand, protest,
or notice of any kind, all of which are expressly waived by each Borrower.




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



10. WAIVERS; INDEMNIFICATION.




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



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



     10.3 Indemnification. Each 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 fees and disbursements of attorneys, experts, or consultants and all
other costs and expenses actually incurred in connection therewith or in connection with the
enforcement of this indemnification (as and when they are incurred and irrespective of whether suit
is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in
connection with or as a result of or related to the execution and delivery (provided that Borrowers
shall not be liable for costs and expenses (including attorneys fees) of any Lender (other than
WFF) incurred in advising, structuring, drafting, reviewing, administering or syndicating
the Loan Documents), enforcement, performance, or administration (including any
restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents,
or the transactions contemplated hereby or thereby or the monitoring of Parent’s and its
Subsidiaries’ compliance with the terms of the Loan Documents (provided, however,
that the indemnification in this clause (a) shall not extend to (i) disputes solely between or
among the Lenders or (ii) disputes solely between or among the Lenders and their respective
Affiliates; it being understood and agreed that the indemnification in this clause (a) shall extend
to 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), (b) with respect to any investigation, litigation, or
proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the
credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or
any act, omission, event, or circumstance in any manner related thereto, and (c) in connection with
or arising out of any presence or release of Hazardous Materials at, on, under, to or from any
assets or properties owned, leased or operated by Parent or any of its Subsidiaries or any
Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such
assets or properties of Parent or any of its Subsidiaries (each and all of the foregoing, the
“Indemnified Liabilities‘”). The foregoing to the contrary notwithstanding, no Borrower
shall have any obligation to any Indemnified Person under this Section 10.3 with respect to
any Indemnified Liability to the extent that a court of competent jurisdiction finally determines



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to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its
officers, directors, employees, attorneys, or agents. This provision shall survive the termination
of this Agreement and the repayment of the Obligations. If any Indemnified Person makes any
payment to any other Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such payment, the
Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED
PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE
OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.




11. NOTICES.




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




	 	 	 	 	 
	 

	 	If to Administrative
	 	FINISAR CORPORATION
	 

	 	Borrower:	 	 
	 

	 	 	 	1389 Moffett Park Drive
	 

	 	 	 	Sunnyvale, CA 94089
	 

	 	 	 	Attn: Stephen Workman, CFO
	 

	 	 	 	Fax No. (408) 541-6138
	 
	 	 	 	 
	 

	 	with copies to:
	 	DLA PIPER LLP (US)
	 

	 	 	 	2000 University Avenue
	 

	 	 	 	East Palo Alto, CA 94303
	 

	 	 	 	Attn: Dennis Sullivan, Esq.
	 

	 	 	 	Fax No.: (650) 687-1200
	 
	 	 	 	 
	 

	 	If to Agent:
	 	WELLS FARGO FOOTHILL, LLC
	 

	 	 	 	2450 Colorado Avenue
	 

	 	 	 	Suite 3000 West
	 

	 	 	 	Santa Monica, California 90404
	 

	 	 	 	Attn: Business Finance Division Manager
	 

	 	 	 	Fax No.: (310) 453-7413
	 
	 	 	 	 
	 

	 	with copies to:
	 	DEWEY & LEBOEUF LLP
	 

	 	 	 	333 South Grand Ave.
	 

	 	 	 	Los Angeles, CA 90071
	 

	 	 	 	Attn: Marshall Stoddard, Esq.
	 

	 	 	 	Fax No.: (213) 621-6100






          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





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sent (except that, if not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next Business Day for the recipient) and (c)
notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment
from the intended recipient (such as by the “return receipt requested” function, as available,
return email or other written acknowledgment).




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




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




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




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




          (d) IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA BY OR AGAINST
ANY PARTY HERETO IN CONNECTION WITH ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO AND EACH PARTY HERETO OR THERETO DOES NOT SUBSEQUENTLY WAIVE IN AN
EFFECTIVE MANNER UNDER CALIFORNIA LAW ITS RIGHT TO A TRIAL BY JURY, (a) THE COURT SHALL, AND
IS HEREBY DIRECTED TO, MAKE A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 638 TO A REFEREE OR REFEREES TO HEAR AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR
PROCEEDING (WHETHER OF FACT OR OF LAW) AND TO REPORT A STATEMENT OF DECISION, PROVIDED THAT
ANY SUCH ISSUES PERTAINING TO A “PROVISIONAL REMEDY” AS DEFINED IN CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 1281.8 SHALL BE HEARD AND DETERMINED BY THE COURT, AND (b) BORROWERS SHALL BE




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SOLELY RESPONSIBLE TO PAY ALL FEES AND EXPENSES OF ANY REFEREE APPOINTED IN SUCH ACTION OR
PROCEEDING.




13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.




     13.1 Assignments and Participations.



          (a) With the prior written consent of Agent, which consent of Agent shall not be unreasonably
withheld, delayed or conditioned, and shall not be required in connection with an assignment to a
Person that is a Lender or an Affiliate (other than individuals) of a Lender, any Lender may assign
and delegate to one or more assignees (each, an “Assignee”; provided, however, that
no Loan Party or Affiliate of a Loan Party shall be permitted to become an Assignee) all or any
portion of the Obligations, the Revolver Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount (unless waived by Agent)
of $5,000,000 (except such minimum amount shall not apply to (x) an assignment or delegation by any
Lender to any other Lender or an Affiliate of any Lender or (y) a group of new Lenders, each of
which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the
aggregate amount to be assigned to all such new Lenders is at least $5,000,000); provided,
however, that Borrowers and Agent may continue to deal solely and directly with such Lender
in connection with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses, and related information with respect to
the Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee,
(ii) such Lender and its Assignee have delivered to Administrative Borrower and Agent an Assignment
and Acceptance and Agent has notified the assigning Lender of its receipt thereof in accordance
with Section 13.1(b), and (iii) unless waived by Agent, the assigning Lender or Assignee
has paid to Agent for Agent’s separate account a processing fee in the amount of $3,500.




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




          (c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder
and the Assignee thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
any Borrower or the performance or observance by any Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that
it has received a copy of this Agreement, together with such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter into such Assignment
and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, and based on such documents and information as it shall deem





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TREATMENT REQUESTED


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,
however, that (i) the Originating Lender shall remain a “Lender” for all purposes of this
Agreement and the other Loan Documents and the Participant receiving the participating interest in
the Obligations, the 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)
Borrowers, Agent, and the Lenders shall continue to deal solely and directly with the Originating
Lender in connection with the Originating Lender’s rights and obligations under this Agreement and
the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under
which the Participant has the right to approve any amendment to, or any consent or waiver with
respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or
consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such Participant is participating, (B)
reduce the interest rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or guaranties (except to the
extent expressly provided herein or in any of the Loan Documents) supporting the Obligations
hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the
amount of, the interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) change the amount or due dates of scheduled principal
repayments or prepayments or premiums, and (v) all amounts payable by Borrowers hereunder shall be
determined as if such Lender had not sold such participation, except that, if amounts outstanding
under this Agreement are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the
right of set off in respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. 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, Borrowers, the Collections of Parent or its Subsidiaries, the Collateral, or otherwise in
respect of the Obligations. No Participant shall have the right to participate directly in the
making of decisions by the Lenders among themselves.




          (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 Parent and its
Subsidiaries and their respective businesses.




          (g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a
security interest in, or pledge, all or any portion of its rights under and interest in this
Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S.





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Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under applicable law.




     13.2 Successors. This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties; provided, however, that Borrowers
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 any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to
Section 13.1 and, except as expressly required pursuant to Section 13.1, no
consent or approval by any Borrower is required in connection with any such assignment.



14. AMENDMENTS; WAIVERS.




     14.1 Amendments and Waivers.



          (a) No amendment, waiver or other modification of any provision of this Agreement or any
other Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with
respect to any departure by any 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, however, that no such waiver, amendment, or consent shall, unless in
writing and signed by all of the Lenders directly affected thereby and the Loan Parties that are
party thereto, do any of the following:




               (i) increase the amount of or extend the expiration date of the Revolver Commitment of
any Lender,



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



               (v) other than as permitted by Section 15.11, release Agent’s Lien in and to any
of the Collateral,



               (vi) change the definition of “Required Lenders” or “Pro Rata
Share”,



               (vii) contractually subordinate any of Agent’s Liens,



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



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               (ix) amend any of the provisions of Section 2.4(b)(i) or (ii) or Section 2.4(e) or (f),



               (x) amend Section 13.1(a) to permit a Loan Party or an Affiliate of a Loan Party
to be permitted to become an Assignee, or



               (xi) change the definition of Borrowing Base or any of the defined terms
(including the definitions of Eligible Accounts, Eligible Investment Grade Account, Eligible
Credit Insured Account, Eligible Equipment and Eligible Inventory) that are used in such
definition to the extent that any such change results in more credit being made available to
Borrowers based upon the Borrowing Base, but not otherwise, or the definitions of Maximum Revolver
Amount,



          (b) No amendment, waiver, modification, or consent shall amend, modify, or waive (i) the
definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of
Agent and Borrowers (and shall not require the written consent of any of the Lenders), and (ii) any
provision of Section 15 pertaining to Agent, or any other rights or duties of Agent under this
Agreement or the other Loan Documents, without the written consent of Agent, Borrowers, and the
Required Lenders,




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




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




          (e) Anything in this Section 14.1 to the contrary notwithstanding, any amendment,
modification, waiver, consent, termination, or release of, or with respect to, any provision of
this Agreement or any other Loan Document that relates only to the relationship of the Lender Group
among themselves, and that does not affect the rights or obligations of any Loan Party, shall not
require consent by or the agreement of any Loan Party.




     14.2 Replacement of Certain Lenders.



          (a) If (i) any action to be taken by the Lender Group or Agent hereunder requires the
unanimous consent, authorization, or agreement of any Lender directly adversely affected thereby
and if such action has received the consent, authorization, or agreement of the Required Lenders
but not such greater number of the Lenders as may be required by Section 14.1 or (ii) any
Lender makes a claim for compensation under Section 16, then Borrowers or Agent, upon at
least 5 Business Days prior irrevocable notice, may permanently replace any Lender (a “Holdout
Lender”) that failed to give its consent, authorization, or agreement or made a claim for
compensation (a “Tax Lender”) with one or more Replacement Lenders, and the Holdout Lender
or Tax Lender, as applicable, shall have no right to refuse to be replaced hereunder. Such notice
to replace the Holdout Lender or Tax Lender, as applicable, shall specify an effective date for
such replacement, which date shall not be later than 15 Business Days after the date such notice is
given.




          (b) Prior to the effective date of such replacement, the Holdout Lender and each Replacement
Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender
being repaid its share of the outstanding Obligations (including an assumption of its Pro Rata
Share of the Letters of Credit) without any premium or penalty of any kind whatsoever. If the
Holdout Lender shall refuse or fail to execute and deliver any such Assignment and Acceptance prior
to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and
delivered such Assignment and





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Acceptance. The replacement of any Holdout Lender shall be made in accordance with the terms of
Section 13.1. Until such time as the Replacement Lenders shall have acquired all of the
Obligations, the Revolver Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to make the
Holdout Lender’s Pro Rata Share of Advances and to purchase a participation in each Letter of
Credit, in an amount equal to its Pro Rata Share of such Letters of Credit.




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



15. AGENT; THE LENDER GROUP.




     15.1 Appointment and Authorization of Agent. Each Lender hereby designates and
appoints WFF as its agent under this Agreement and the other Loan Documents and each Lender hereby
irrevocably authorizes 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 its acceptance of
the benefits of the Loan Documents, each Bank Product Provider shall be deemed to authorize) Agent
to act as the secured party under each of the Loan Documents that create a Lien on any item of
Collateral. Except as expressly otherwise provided in this Agreement, Agent shall have and may use
its sole discretion with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions that Agent expressly is entitled to take or
assert under or pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents that provides rights
or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers
as long as this Agreement remains in effect: (a) maintain, in accordance with its customary
business practices, ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections of Parent and its Non-CFC Subsidiaries, and related matters, (b) execute or file
any and all financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements with respect to the
Loan Documents, (c) make Advances, for itself or on behalf of Lenders, as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections of Parent and its
Subsidiaries as provided in the Loan Documents, (e) open and maintain such bank accounts and cash
management arrangements as Agent deems necessary and appropriate in accordance with the Loan
Documents for the foregoing purposes with respect to the Collateral and the Collections of Parent
and its Non-CFC Subsidiaries, (f) perform, exercise, and enforce any and all other rights and
remedies of the Lender Group with respect to Parent or its Non-CFC Subsidiaries, the Obligations,
the Collateral, the Collections of Parent




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and its Non-CFC Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan
Documents.




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



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



     15.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, telefacsimile or other electronic method of transmission, telex or telephone message,
statement or other document or conversation believed by it to be genuine and correct and to have
been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to Borrowers or counsel to any Lender), independent accountants and
other experts selected by Agent. Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless Agent shall first receive such advice
or concurrence of the Lenders as it deems appropriate and until such instructions are received,
Agent shall act, or refrain from acting, as it deems advisable. If Agent so requests, it shall
first be indemnified to its reasonable satisfaction by the Lenders (and, if it so elects, the Bank
Product Providers) against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance
with a request or consent of the requisite 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 Administrative Borrower
referring to this Agreement, describing such Default or Event of Default, and stating that such
notice is a “notice of default.” Agent promptly will notify the Lenders of its receipt of any
such notice or of any Event of Default of which Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and
Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to
its Participants, if any. Subject to Section 15.4, Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Required Lenders in
accordance with Section 9; provided, however, that unless and until Agent
has received any such request, Agent may (but shall not be obligated to)




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take such action, or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable.




     15.6 Credit Decision. Each Lender (and Bank Product Provider) acknowledges that none
of the Agent-Related Persons has made any representation or warranty to it, and that no act by
Agent hereinafter taken, including any review of the affairs of Parent and its Subsidiaries or
Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related
Person to any Lender (or Bank Product Provider). Each Lender represents (and by its acceptance of
the benefits of the Loan Documents, 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 Borrowers or any other Person party to a Loan Document, and all
applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own
decision to enter into this Agreement and to extend credit to Borrowers. Each Lender also
represents (and by its acceptance of the benefits of the Loan Documents, 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 Borrowers 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 Borrowers 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 its acceptance of the benefits of the Loan Documents,
each Bank Product Provider shall be deemed to acknowledge) that Agent does not have any duty or
responsibility, either initially or on a continuing basis (except to the extent, if any, that is
expressly specified herein) to provide such Lender (or Bank Product Provider) with any credit or
other information with respect to any Borrower, its Affiliates or any of their respective business,
legal, financial or other affairs, and irrespective of whether such information came into Agent’s
or its Affiliates’ or representatives’ possession before or after the date on which such Lender
became a party to this Agreement (or such Bank Product Provider entered into a Bank Product
Agreement).



     15.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and
fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including
court costs, attorneys fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral,
whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to
this Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Parent and its Subsidiaries received by Agent to reimburse Agent
for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders (or
Bank Product Providers). In the event Agent is not reimbursed for such costs and expenses by Parent
or its Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent
such Lender’s Pro Rata Share thereof. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so),
according to their Pro Rata Shares, from and against any and all Indemnified Liabilities;
provided, however, that no Lender shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such
Person’s gross negligence or willful misconduct nor shall any Lender be liable for the obligations
of any Defaulting Lender in failing to make an Advance or other extension of credit hereunder.
Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such
Lender’s Pro Rata Share of any costs or out of pocket expenses (including attorneys, accountants,
advisors, and consultants fees and expenses) incurred




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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, any other Loan
Document, or any document contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or replacement of Agent.




     15.8 Agent in Individual Capacity. WFF and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, provide Bank Products to, acquire
equity interests in, and generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with Parent and its Subsidiaries and Affiliates and any other
Person party to any Loan Document as though WFF 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 its acceptance of the benefits of the Loan Documents, each Bank
Product Provider shall be deemed to acknowledge) that, pursuant to such activities, WFF or its
Affiliates may receive information regarding Parent or its Affiliates or any other Person party to
any Loan Documents that is subject to confidentiality obligations in favor of Parent or such other
Person and that prohibit the disclosure of such information to the Lenders (or Bank Product
Providers), and the Lenders acknowledge (and by its acceptance of the benefits of the Loan
Documents, 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 WFF in its individual capacity.



     15.9 Successor Agent. Agent may resign as Agent upon 30 days prior written notice to
the Lenders (unless such notice is waived by the Required Lenders) and Administrative Borrower
(unless such notice is waived by Administrative Borrower) and without any notice to the Bank
Product Providers. If Agent resigns under this Agreement, the Required Lenders shall be entitled,
with (so long as no Event of Default has occurred and is continuing) the consent of Administrative
Borrower (such consent not to be unreasonably withheld, delayed, or conditioned), appoint a
successor Agent for the Lenders (and the Bank Product Providers). If, at the time that Agent’s
resignation is effective, it is acting as the Issuing Lender or the Swing Lender, such resignation
shall also operate to effectuate its resignation as the Issuing Lender or the Swing Lender, as
applicable, and it shall automatically be relieved of any further obligation to issue Letters of
Credit, to cause the Underlying Issuer to issue Letters of Credit, or to make Swing Loans. If no
successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may
appoint, after consulting with the Lenders and Administrative Borrower, a successor Agent. If
Agent has materially breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders with (so long as no Event of Default has occurred and is
continuing) the consent of Administrative 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.



     15.10 Lender in Individual Capacity. Any Lender and its respective Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from, provide Bank
Products to, acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Parent and its Subsidiaries and Affiliates
and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder
without notice to or consent of the other members of the




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Lender Group (or the Bank Product Providers). The other members of the Lender Group acknowledge
(and by its acceptance of the benefits of the Loan Documents, each Bank Product Provider shall be
deemed to acknowledge) that, pursuant to such activities, such Lender and its respective
Affiliates may receive information regarding Parent or its Affiliates or any other Person party to
any Loan Documents that is subject to confidentiality obligations in favor of Parent or such other
Person and that prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge (and by its acceptance of the benefits of the Loan Documents, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a
waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best
efforts to obtain), such Lender shall not be under any obligation to provide such information to
them.




     15.11 Collateral Matters.



          (a) The Lenders hereby irrevocably authorize (and by its acceptance of the benefits of the
Loan Documents, 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 Borrowers of all Obligations, (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if Administrative 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 Parent 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 Parent or its Subsidiaries under a lease
that has expired or is terminated in a transaction permitted under this Agreement. The Lenders
hereby irrevocably authorize (and by its acceptance of the benefits of the Loan Documents, each
Bank Product Provider shall be deemed to authorize) Agent, based upon the instruction of the
Required Lenders, to credit bid and purchase (either directly or through one or more acquisition
vehicles) all or any portion of the Collateral at any sale thereof conducted by Agent under the
provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the Code, at any sale
thereof conducted under the provisions of the Bankruptcy Code, including Section 363 of the
Bankruptcy Code, or at any sale or foreclosure conducted by Agent (whether by judicial action or
otherwise) in accordance with applicable law. 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 Administrative
Borrower at any time, the Lenders will (and is so requested, the Bank Product Providers will)
confirm in writing Agent’s authority to release any such Liens on particular types or items of
Collateral pursuant to this Section 15.11; provided, however, that (1)
Agent shall not be required to execute any document necessary to evidence such release on terms
that, in Agent’s opinion, would expose Agent to liability or create any obligation or entail any
consequence other than the release of such Lien without recourse, representation, or warranty, and
(2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of Borrowers in respect of) all
interests retained by Borrowers, 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
its acceptance of the benefits of the Loan Documents, 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.




          (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 Parent 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 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





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its sole discretion given Agent’s own interest in the Collateral in its capacity as one of the
Lenders and that Agent shall have no other duty or liability whatsoever to any Lender (or Bank
Product Provider) as to any of the foregoing, except as otherwise provided herein.




     15.12 Restrictions on Actions by Lenders; Sharing of Payments.



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




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




     15.13 Agency for Perfection. Agent hereby appoints each other Lender (and each Bank
Product Provider) as its agent (and each Lender hereby accepts (and by its acceptance of the
benefits of the Loan Documents, 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.



     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 its acceptance of the benefits of the
Loan Documents, 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).



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



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




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




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




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




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



In addition to the foregoing: (x) any Lender may from time to time request of Agent in writing that
Agent provide to such Lender a copy of any report or document provided by Parent or its
Subsidiaries to Agent that has not been contemporaneously provided by Parent 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 Parent or its Subsidiaries, any Lender may, from
time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice
to Agent, whereupon Agent promptly shall request of Administrative Borrower the additional reports
or information reasonably specified by such Lender, and, upon receipt thereof from Administrative
Borrower, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent
renders to Administrative 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




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to the extent any such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender. Except as provided in Section 15.7, no
member of the Lender Group shall have any liability for the acts of any other member of the Lender
Group. No Lender shall be responsible to any Borrower or any other Person for any failure by any
other Lender (or Bank Product Provider) to fulfill its obligations to make credit available
hereunder, nor to advance for such Lender (or Bank Product Provider) or on its behalf, nor to take
any other action on behalf of such Lender (or Bank Product Provider) hereunder or in connection
with the financing contemplated herein.




16. WITHHOLDING TAXES.




          (a) All payments made by any Borrower hereunder or under any note or other Loan Document will
be made without setoff, counterclaim, or other defense. In addition, all such payments will be made
free and clear of, and without deduction or withholding for, any present or future Taxes, and in
the event any deduction or withholding of Taxes is required, each Borrower shall comply with the
next sentence of this Section 16(a). If any Taxes are so levied or imposed, each Borrower
agrees to pay the full amount of such Taxes and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement, any note, or Loan Document, including any
amount paid pursuant to this Section 16(a) after withholding or deduction for or on account
of any Taxes, will not be less than the amount provided for herein; provided, however, that no
Borrower shall be required to increase any such amounts if the increase in such amount payable
results from Agent’s or such Lender’s own willful misconduct or gross negligence (as finally
determined by a court of competent jurisdiction). Each Borrower will furnish to Agent as promptly
as possible after the date the payment of any Tax is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by any Borrower.




          (b) Each 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.




          (c) 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 any Borrower (within the meaning of
Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to any
Borrower within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and
executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);



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



               (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




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               (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.


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.




          (d) If a Lender or Participant claims an exemption from withholding tax in a jurisdiction
other than the United States, such Lender or such Participant agrees with and in favor of 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, however, that nothing in this Section 16(d) 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.




          (e) If a Lender or Participant claims exemption from, or reduction of, withholding tax and
such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant
agrees to notify Agent (or, in the case of a sale of a participation interest, to the Lender
granting the participation only) of the percentage amount in which it is no longer the beneficial
owner of Obligations of Borrowers to such Lender or Participant. To the extent of such percentage
amount, Agent will treat such Lender’s or such Participant’s documentation provided pursuant to
Section 16(c) or 16(d) as no longer valid. With respect to such percentage amount,
such Participant or Assignee may provide new documentation, pursuant to Section 16(c) or
16(d), if applicable. Each Borrower agrees that each Participant shall be entitled to the
benefits of this Section 16 with respect to its participation in any portion of the
Revolver Commitments and the Obligations so long as such Participant complies with the obligations
set forth in this Section 16 with respect thereto.




          (f) If a Lender or a Participant is entitled to a reduction in the applicable withholding tax,
Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold
from any interest payment to such Lender or such Participant an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other documentation
required by Section 16(c) or 16(d) are not delivered to 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.




          (g) 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






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Lender granting the participation only) under this Section 16, together with all costs and
expenses (including attorneys fees and expenses). The obligation of the Lenders and the
Participants under this subsection shall survive the payment of all Obligations and the
resignation or replacement of Agent.




          (h) If Agent or a Lender determines, in its sole discretion, that it has received a refund of
any Taxes as to which it has been indemnified by any Borrower or with respect to which any
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 such Borrower (but
only to the extent of payments made, or additional amounts paid, by such Borrower under this
Section 16 with respect to Taxes giving rise to such a refund), net of all out-of-pocket expenses
of Agent or such Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such a refund); provided, that Borrowers, upon the request
of Agent or such Lender, agrees to repay the amount paid over to any Borrower (plus any penalties,
interest or other charges, imposed by the relevant Governmental Authority, other than such
penalties, interest or other charges imposed as a result of the willful misconduct or gross
negligence of Agent hereunder) to Agent or such Lender in the event Agent or such Lender is
required to repay such refund to such Governmental Authority. Notwithstanding anything in this
Agreement to the contrary, this Section 16 shall not be construed to require Agent or any Lender
to make available its tax returns (or any other information which it deems confidential) to any
Borrower or any other Person.




17. GENERAL PROVISIONS.




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



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



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



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



     17.5 Bank Product Providers. Each Bank Product Provider shall be deemed a third
party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any
reference in a Loan Document to the parties for whom Agent is acting. Agent hereby agrees to act as
agent for such Bank Product Providers and, by virtue of providing a Bank Product, each Bank Product
Provider shall be automatically deemed to have appointed Agent as its agent; 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 connection with any such
distribution of payments and collections, Agent shall be entitled to assume no amounts are owing to
any Bank Product Provider unless such Bank Product Provider has provided written notification to
Agent of the amount that is owing to it and such notification is received by Agent a reasonable
period of time prior to the making of such distribution.



     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




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Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party
arising out of or in connection with the Loan Documents or the transactions contemplated thereby,
and there is no agency or joint venture relationship between the members of the Lender Group, on
the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any
transaction contemplated therein.




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



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



     17.9 Confidentiality.



          (a) Agent and Lenders each individually (and not jointly or jointly and severally) agree that
material, non-public information regarding Parent and its Subsidiaries, their operations, assets,
and existing and contemplated business plans (“Confidential Information”) shall be treated
by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the
Lenders to Persons who are not parties to this Agreement, except: (i) to attorneys for and other
advisors, accountants, auditors, and consultants to any member of the Lender Group (“Lender
Group Representatives”), (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 Administrative Borrower with prior notice
thereof, to the extent that it is practicable to do so and to the extent that the disclosing party
is permitted to provide such prior notice to Administrative 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 by any Borrower or 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 (v) the disclosing party agrees to provide Administrative
Borrower with prior notice thereof so as to allow Administrative Borrower the opportunity to
obtain a protective order or similar court protection, 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
Administrative Borrower pursuant to the terms of the subpoena or other legal process and (y) any
disclosure under this clause (v) 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, (vi) 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





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Lenders or the Lender Group Representatives), (vii) in connection with any assignment,
participation or pledge of any Lender’s interest under this Agreement, provided that any such
assignee, participant, or pledgee shall have agreed in writing to receive such information
hereunder subject to the terms of this Section, (viii) 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 (viii) with respect to litigation involving any Person (other than Borrowers, Agent, any
Lender, any of their respective Affiliates, or their respective counsel), the disclosing party
agrees to provide Administrative Borrower with prior notice thereof so as to allow Administrative
Borrower the opportunity to obtain a protective order or similar court protection, and (ix) 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 provide information
concerning the terms and conditions of this Agreement and the other Loan Documents to loan
syndication and pricing reporting services.




     17.10 Lender Group Expenses. Borrowers agree to pay any and all Lender Group
Expenses promptly after demand therefor by Agent and agree that their obligations contained in this
Section 17.10 shall survive payment or satisfaction in full of all other Obligations.



     17.11 USA PATRIOT Act. Each Lender that is subject to the requirements of the Patriot
Act hereby notifies Borrowers that pursuant to the requirements of the Act, it is required to
obtain, verify and record information that identifies Borrowers, which information includes the
name and address of Borrowers and other information that will allow such Lender to identify
Borrowers in accordance with the Patriot Act.



     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.



     17.13 Parent as Agent for Borrowers. Each Borrower hereby irrevocably appoints Parent
as the borrowing agent and attorney-in-fact for all Borrowers (the “Administrative
Borrower”) which appointment shall remain in full force and effect unless and until Agent shall
have received prior written notice signed by each Borrower that such appointment has been revoked
and that another Borrower has been appointed Administrative Borrower. Each Borrower hereby
irrevocably appoints and authorizes the Administrative Borrower (i) to provide Agent with all
notices with respect to Advances and Letters of Credit obtained for the benefit of any Borrower and
all other notices and instructions under this Agreement and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain Advances and Letters of Credit
and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of
this Agreement. It is understood that the handling of the Loan Account and Collateral of Borrowers
in a combined fashion, as more fully set forth herein, is done solely as an accommodation to
Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient
and economical manner and at their request, and that Lender Group shall not incur liability to any
Borrower as a result hereof. Each Borrower expects to derive benefit, directly or indirectly,
from the handling of the Loan Account and the Collateral in a combined fashion since the successful
operation of each Borrower is dependent on the continued successful performance of the integrated
group. To induce the Lender Group to do so, and in consideration thereof, each Borrower hereby
jointly and severally agrees to indemnify each member of the Lender Group and hold each member of
the Lender Group harmless against any and all liability, expense, loss or claim of damage or
injury, made against the Lender Group by any Borrower or by any third party whosoever, arising from
or incurred by reason of (a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group’s relying on any instructions of the Administrative Borrower, or (c)
any other action taken by the Lender Group hereunder or under the other Loan Documents, except that
Borrowers will have no liability to the relevant Agent-Related Person or Lender-Related Person
under this Section 17.13 with respect to any liability that has




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been finally determined by a court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case
may be.




     17.14
Designated Senior Indebtedness. (a) The Revolver Commitments and the Obligations
shall be “Designated Senior Indebtedness” (as defined in the 2003 Indenture) for purposes of the
2003 Indenture and the Subordinated Notes issued pursuant to the 2003 Indenture; and



          (b) The Revolver Commitments and the Obligations shall be “Designated Senior Indebtedness” (as
defined in the 2006 Indenture) for purposes of the 2006 Indenture and the Subordinated Notes issued
pursuant to the 2006 Indenture.




[Signature pages to follow.]





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



	 	 	 	 	 
	BORROWERS: 	 FINISAR CORPORATION,

a Delaware corporation

 	 
	 	By:  	/s/ S. K. Workman
 	 
	 	 	Name:  	S. K. WORKMAN 	 
	 	 	Title:  	CFO 	 
	 



[Signature page to Credit Agreement]





S-1









 





CONFIDENTIAL
TREATMENT REQUESTED


	 	 	 	 	 
	 	OPTIUM CORPORATION,

a Delaware corporation

 	 
	 	By:  	/s/ S. K. Workman
 	 
	 	 	Name:  	S. K. WORKMAN 	 
	 	 	Title:  	CFO 	 
	 



[Signature page to Credit Agreement]





S-2









 





CONFIDENTIAL
TREATMENT REQUESTED



	 	 	 	 	 
	AGENT:  	WELLS FARGO FOOTHILL, LLC,

a Delaware limited liability company,

as Agent and as a Lender

 	 
	 	By:  	/s/ David R. Klages
 	 
	 	 	Name:  	David R. Klages      	 
	 	 	Title:  	Vice President 	 
	 



[Signature page to Credit Agreement]




S-3









 




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TREATMENT REQUESTED


Schedule 1.1



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




          “2003 Indenture” means the Indenture, dated October 15, 2003, by and between Parent
and U.S. Bank Trust National Association, as trustee, due 2010.




          “2006 Indenture” means the Indenture, dated October 12, 2006, by and between Parent
and U.S. Bank Trust National Association, as trustee, due 2010.




          “2010 Event” means any of the following:





	 	(i)	 	the Subordinated Notes have been paid in full pursuant to a
Permitted Notes Redemption; or
	 
	 	(ii)	 	the Subordinated Notes have been refinanced on terms and
conditions satisfactory to Agent, including without limitation, a maturity
date of no sooner than March 31, 2014.





          “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).




          “ACH Transactions” means any cash management or related services (including the
Automated Clearing House processing of electronic fund transfers through the direct Federal
Reserve Fedline system) provided by a Bank Product Provider for the account of Parent or its
Subsidiaries.




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




          “Administrative Borrower” has the meaning specified therefor in Section
17.13.




          “Advances” has the meaning specified therefor in Section 2.1
(a) of the Agreement.



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




          “Affiliate” means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person. For purposes of this definition,
“control” means the possession, directly or indirectly through one or more intermediaries, of the
power to direct the management and policies of a Person, whether through the ownership of Stock, by
contract, or otherwise; provided, however, that, for purposes of the definition of
Eligible Accounts, and Section 6.12 of the Agreement: (a) any Person which owns directly or
indirectly 10% or more of the Stock having ordinary voting power for the election of directors or
other members of the governing body of a Person or 10% or more of the partnership or other
ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an
Affiliate of such Person, (b) each





 









 





CONFIDENTIAL
TREATMENT REQUESTED


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.




          “Agent’s Liens” means the Liens granted by Loan Parties to Agent under the Loan
Documents.




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




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




          “Assignee” has the meaning specified therefor in Section 13. (a) of
the Agreement.




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




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




          “Availability” means, as of any date of determination, the amount that Borrowers are
entitled to borrow as Advances under Section 2.1 of the Agreement (after giving effect to
all then outstanding Obligations (other than Bank Product Obligations)).




          “Average Daily Excess Availability” means, for any period, the result of (a) the sum
of the aggregate amount by which the Maximum Revolver Amount exceeds the Revolver Usage as of each
Business Day during such period (calculated as of the end of each Business Day during such period)
divided by (b) the number of Business Days in such period.




          “Bank Product” means any financial accommodation extended to Parent or its
Subsidiaries by a Bank Product Provider (other than pursuant to the Agreement) including: (a)
credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards (including
so-called “procurement cards” or “P-cards”), (e) ACH Transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) transactions under Hedge Agreements.




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




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








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          “Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by Parent or its Subsidiaries to any Bank Product Provider
pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment
of money, whether direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, (b) all obligations of Borrowers to reimburse an Underlying Issuer in
respect of Underlying Letters of Credit, and (c) all amounts that Parent or its Subsidiaries are
obligated to reimburse to Agent or any member of the Lender Group as a result of Agent or such
member of the Lender Group purchasing participations from, or executing guarantees or indemnities
or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products
provided by such Bank Product Provider to Parent or its Subsidiaries.




          “Bank Product Provider” means Wells Fargo or any of its Affiliates.




          “Bank Product Reserve” means, as of any date of determination, the amount of
reserves that Agent has established (based upon the Bank Product Providers’ reasonable
determination of the credit exposure of Parent and its Subsidiaries in respect of Bank Products)
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 LIBOR Rate” means the greater of (a) 2.00 percent per annum, and (b) the rate
per annum rate appearing on Bloomberg L.P.’s (the “Service”) Page BBAM1/(Official BBA
USD Dollar Libor Fixings) (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service) 2 Business Days prior to the commencement of the
requested Interest Period, for a term and in an amount comparable to the Interest Period and the
amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a
continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan)
by Administrative Borrower in accordance with the Agreement, which determination shall be
conclusive in the absence of manifest error.




          “Base Rate” means the greatest of (a) 3.25 percent per annum, (b) the Federal Funds
Rate plus 1/2%, (c) the Base 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 (d)
the rate of interest announced, from time to time, within Wells Fargo at its principal office in
San Francisco as its “prime rate”, with the understanding that the “prime rate” is one of Wells
Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal publications as Wells
Fargo may designate.




          “Base Rate Loan” means each portion of the Advances that bears interest at a rate
determined by reference to the Base Rate.




          “Base Rate Margin” means, as of any date of determination, the percentage points
set forth below based upon the Average Daily Excess Availability for the immediately preceding
calendar quarter, as determined by Agent in its Permitted Discretion:




	 	 	 	 	 
	Level	 	Average Daily Excess Availability	 	Base Rate Margin
	I

	 	If Average Daily Excess Availability is
greater than $25,000,000
	 	3.75 percentage points






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	Level	 	Average Daily Excess Availability	 	Base Rate Margin
	II

	 	If Average Daily
Excess Availability
is greater than or
equal to
$10,000,000 but
less than or equal
to $25,000,000
	 	4.00 percentage points
	 
	 	 	 	 
	III

	 	If Average Daily
Excess Availability
is less than
$10,000,000
	 	4.25 percentage points






                    ; provided, however, that for the period commencing on the Closing Date
through the end of October 31, 2009, the Base Rate Margin shall be the percentage points
specified for Pricing Level II as set forth in this definition; provided,
further, however, that if the Borrowers fail to provide any reports or
certifications required to determine the Average Daily Excess Availability when due, the Base
Rate Margin shall be set at the percentage points specified for Pricing Level III until such
reports or certifications are delivered, on which date (but not retroactively), without
constituting a waiver of any Default or Event of Default occasioned by the failure to timely
deliver such reports or certifications, the Base Rate Margin shall be set at the percentage
based upon the calculation determined pursuant to such reports or certifications. For purposes
of the preceding sentence (and subject to the forgoing provisos), at the end of each calendar
quarter Agent will test the Borrowers’ Average Daily Excess Availability, which amount will be
based upon reports and certifications delivered to Agent in accordance with the terms of this
Agreement. If any such reports or certifications are subsequently determined to be incorrect in
any material respect in a manner that would result in a lower Average Daily Excess Availability,
Agent may increase the Base Rate Margin retroactively to the beginning of the relevant quarter
to the extent that such error caused the applicable Base Rate Margin to be less than the Base
Rate Margin that would have been in effect if the error was not made.




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




          “Board of Directors” means the board of directors (or comparable managers) of
Parent or any committee thereof duly authorized to act on behalf of the board of directors (or
comparable managers).




          “Borrower” and “Borrowers” have the respective the meanings specified
therefor in the preamble to the Agreement.




          “Borrowing” means a borrowing hereunder consisting of Advances made on the same day
by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or
by Agent in the case of a Protective Advance.




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





     (a)
85% of the amount of Eligible Accounts, less the amount, if any, of the Dilution Reserve, plus




     (b)
80% of the amount of Eligible Investment Grade Accounts, less the amount, if any, of the Dilution Reserve, plus




     (c) the lesser of




     (i) $40,000,000, and



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TREATMENT REQUESTED


     (ii) 80% of the amount of Eligible Credit Insured Accounts, less the
amount, if any, of the Dilution Reserve, plus




     (d) the lowest of




     (i) $10,000,000,



     (ii) 80% of the amount of Eligible Specified Accounts, less the
amount, if any, of the Dilution Reserve, plus




     (e) the lowest of




     (i) $10,000,000,




     (ii) 50% of the value (calculated at the lower of cost or market on a
basis consistent with Borrowers’ historical accounting practices) of
Eligible Inventory, and




     (iii) 85% times the most recently determined Net Liquidation
Percentage times the value (calculated at the lower of cost or market on a
basis consistent with Borrowers’ historical accounting practices) of
Eligible Inventory, plus




     (f) the lesser of




     (i) the Eligible Equipment Sublimit, and




     (ii) 80% times the most recently determined Net Orderly Liquidation
Value of Eligible Equipment, minus




     (g) the sum of (i) the Bank Product Reserve, (ii) the Credit Insurance
Reserve, and (iii) the aggregate amount of reserves, if any, established by
Agent under Section 2. l(c) of the Agreement.



          “Borrowing Base Certificate” means a certificate in the form of
Exhibit B-l.




          “Borrowing Base Excess Amount” has the meaning set forth in Section 2.4(e).




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




          “Capital Expenditures” means, with respect to any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries during such period that are
capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in
cash or financed; provided that, notwithstanding anything to the contrary contained
herein, Capital Expenditures shall be deemed to be: (1) $5,121,000 for the fiscal quarter ended
February 1, 2009, (2) $3,265,000 for the fiscal quarter ended April 30, 2009, and (3) $3,149,000
for the fiscal quarter ended August 2, 2009.




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



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




          “Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the
full faith and credit of the United States, in each case maturing within 1 year from the date of
acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of
the United States or any political subdivision of any such state or any public instrumentality
thereof maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating
Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no more
than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of
at least A-l from S&P or at least P-l from Moody’s, (d) certificates of deposit, time deposits,
overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition
thereof issued by any bank organized under the laws of the United States or any state thereof or
the District of Columbia or any United States branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $250,000,000, (e) Deposit
Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or
(ii) any other bank organized under the laws of the United States or any state thereof so long as
the full amount maintained with any such other bank is insured by the Federal Deposit Insurance
Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of
clause (d) of this definition or recognized securities dealer having combined capital and surplus
of not less than $250,000,000, having a term of not more than seven days, with respect to
securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities
of six months or less from the date of acquisition backed by standby letters of credit issued by
any commercial bank satisfying the criteria described in clause (d) above, 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.




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




          “Change of Control” means that (a) any “person” or “group” (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 30%, or more, of the Stock of Parent having
the right to vote for the election of members of the Board of Directors, (b) a majority of the
members of the Board of Directors do not constitute Continuing Directors, (c) a “Change of Control”
as defined in the Indentures occurs, or (d) Parent fails to own and control, directly or
indirectly, 100% of the Stock of each other Loan Party.




          “Closing Date” means the date of the making of the initial Advance (or other
extension of credit) hereunder.




          “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 Parent or its Subsidiaries in or upon which a Lien is granted by such
Person in favor of Agent or the Lenders under any of the Loan Documents. The term
“Collateral” shall not include the assets or the voting Stock of any CFC, solely to the
extent that (y) such Stock represents more than 65% of the outstanding voting Stock of such CFC,
and (z) hypothecating more than 65% of the total outstanding voting Stock of such CFC would result
in material adverse tax consequences.




          “Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in




          
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TREATMENT REQUESTED

possession of, having a Lien upon, or having rights or interests in Parent’s or any of its Non-CFC
Subsidiaries’ books and records, Equipment, or Inventory, in each case, in form and substance
reasonably satisfactory to Agent.




          “Collections” means all cash, checks, notes, instruments, and other items of payment
(including insurance proceeds, cash proceeds of asset sales, rental proceeds, and tax refunds).




          “Compliance Certificate” means a certificate substantially in the form of Exhibit
C-l delivered by the chief financial officer of Parent to Agent.




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




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




          “Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by Parent or one of its Non-CFC Subsidiaries, Agent,
and the applicable securities intermediary (with respect to a Securities Account) or bank (with
respect to a Deposit Account).




          “Controlled Account Agreement” has the meaning specified therefor in the Security
Agreement.




          “Copyright Security Agreement” has the meaning specified therefor in the Security
Agreement.




          “Credit Insurance Reserve” means, as of any date of determination, the amount of
reserves that Agent has established in respect of: (a) all deductibles applicable to any credit
insurance covering Eligible Credit Insured Accounts; and (b) all potential offsets against any
credit insurance covering Eligible Credit Insured Accounts.




          “Daily Balance” means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.




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




          “Defaulting Lender” means any Lender that fails to make any Advance (or other
extension of credit, including the failure to make available to Agent amounts required pursuant to
a Settlement or to make payment in connection with a Letter of Credit Disbursement) that it is
required to make hereunder on the date that it is required to do so hereunder.




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




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




          “Designated Account” means the Deposit Account of Administrative Borrower identified
on Schedule D-l.




          “Designated Account Bank” has the meaning specified therefor in
Schedule D-l.




          “Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior 180 consecutive days, that is the result of dividing the
Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other
dilutive items with respect to Borrowers’ Accounts during such period, by (b) Borrowers’ billings
with respect to Accounts during such period.




          “Dilution Reserve” means, as of any date of determination, an amount sufficient to
reduce the advance rate against Eligible Accounts, Eligible Credit Insured Accounts and Eligible
Investment Grade Accounts, as applicable, by 1 percentage point for each percentage point by which
Dilution is in excess of 5%.




          “Dollars” or “$” means United States dollars.




          “EBITDA” means, with respect to any fiscal period, the result of:




          (a) Parent’s
consolidated net earnings (or loss) (but excluding from the determination of net earnings (or loss) any tax refunds, tax credits, or other tax benefits),
minus




          (b) to the extent included in the calculation of Parent’s consolidated net earnings (or loss), the sum of: (i) extraordinary gains (including, without limitation, gains from the
sale of equipment and the repurchase of bonds), (ii) interest income, (iii) any non-cash decrease in
the cost of goods sold attributed to the reversal of an inventory obsolescence and slow moving reserve
expensed in a prior period, consistent with historical processes for determining such non-cash charges,
(iv) the EBITDA Inventory Disposal Amount, and (v) any
reductions of the impaired rent reserve in such period, consistent with historical processes for determining such reductions, plus




          (c) to the extent deducted in the calculation of Parent’s consolidated net earnings (or loss), the sum of: (i) non-cash extraordinary losses (including non-cash
impairment related to minority investments), (ii) non-cash stock compensation expense, (iii) interest
expense, (iv) income taxes, (v) depreciation and amortization, and (vi) any non-cash increase in cost of
goods sold attributed to the implementation of an inventory obsolescence and slow moving reserve during
the current period, consistent with historical processes for determining such non-cash charges;
provided. however, that the amount calculated pursuant to this clause (c)(vi) shall in no event
exceed 50% of EBITDA prior to giving effect to this clause (c)(vi);



in each case, determined on a consolidated basis in accordance with GAAP; provided that,
notwithstanding anything to the contrary contained herein, EBITDA shall be deemed to be: (1)
$9,149,000 for the fiscal quarter ended February 1, 2009, (2) $7,592,000 for the fiscal quarter
ended April 30, 2009, and (3) $10,020,000 for the fiscal quarter ended August 2, 2009.




          “EBITDA Inventory Disposal Amount” means, with respect to any fiscal period, an
amount equal to the greater of (a) 1% of Parent’s consolidated net revenues for such fiscal
period, and (b) the value (calculated at cost) of all Inventory of Parent and its Subsidiaries
disposed of during such period.




          
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CONFIDENTIAL
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          “Eligible Accounts” means those Accounts created by Borrowers in the ordinary course
of their business, that arise out of Borrowers’ sale of goods or rendition of services, that
comply with each of the representations and warranties respecting Eligible Accounts made in the
Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding
criteria set forth below; provided, however, that such criteria may be revised
from time to time by Agent in Agent’s Permitted Discretion to address the results of any audit
performed by Agent from time to time after the Closing Date. In determining the amount to be
included, Eligible Accounts shall be calculated net of customer deposits and unapplied cash.
Eligible Accounts shall not include the following:




          (a) Accounts
that the Account Debtor has failed to pay within 120 days of original invoice date, or Accounts that are more than 60 days past due,




          (b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under
clause (a) above,




          (c) Accounts with respect to which the Account Debtor is an Affiliate of a Borrower or an employee or agent of a Borrower or any Affiliate of a Borrower,




          (d) Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and
hold, or any other terms by reason of which the payment by the Account Debtor may be conditional,




          (e) Accounts that are not payable in Dollars,




          (f) Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in the United States, or (ii) is not organized under the
laws of the United States or any state thereof, or (iii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof, unless the Account is supported
by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance, and
issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent,




          (g) Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however,
of Accounts with respect to which the applicable Borrower has complied, to the reasonable
satisfaction of Agent, with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United
States (exclusive, however, of (i) Accounts owed by any state that does not have a statutory
counterpart to the Assignment of Claims Act, or (ii) Accounts owed by any state that has a statutory
counterpart to the Assignment of Claims Act as to which the Borrowers have complied to the Agent’s reasonable

satisfaction),




          (h) Accounts with respect to which the Account Debtor is a creditor of Borrowers, has or has
asserted a right of setoff, or has disputed its obligation to pay all or any portion of the
Account, to the extent of such claim, right of setoff, or dispute,




          (i) Accounts
with respect to an Account Debtor whose total obligations owing to
Borrowers (i) with respect to Accounts owed by [****]
or  [****] exceed 20%, and
(ii) with respect to Accounts owed by any other Account Debtor, exceed 10%, (in each case, such
percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its
Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible
Accounts, Eligible Credit Insured Accounts, Eligible Investment Grade Accounts and Eligible




          
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TREATMENT REQUESTED



Specified Accounts, to the extent of the obligations owing by such Account Debtor in excess of
such percentage; provided, however, that, in each case, the amount of Eligible
Accounts that are excluded because they exceed the foregoing percentage shall be determined by
Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations
based upon the foregoing concentration limit,




          (j) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding,
is not Solvent, has gone out of business, or as to which any Borrower has received notice of an
imminent Insolvency Proceeding or a material impairment of the financial condition of such Account
Debtor,




          (k) Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be
materially impaired by reason of the Account Debtor’s financial condition,




          (l) Accounts that are not subject to a valid and perfected first priority Agent’s Lien,




          (m) Accounts with respect to which (i) the goods giving rise to such Account have not been
shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have
not been performed and billed to the Account Debtor,




          (n) Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned
Entity,




          (o) Accounts that represent the right to receive progress payments or other advance billings
that are due prior to the completion of performance by Borrowers of the subject contract for goods
or services, or




          (p) Accounts with respect to which (i) the Account Debtor has been billed by the applicable
Borrower from an office or location of the applicable Borrower that is not located in the United
States, or (ii) the collection thereof is to occur via an office or location of the applicable
Borrower that is not located in the United States.




          “Eligible Credit Insured Accounts” means an Account (other than an Eligible Investment
Grade Account) that (a) satisfies all of the criteria set forth in the definition of Eligible
Accounts other than clause (f) of such definition and (b) is covered by credit insurance in form,
substance, and amount, and by an insurer, satisfactory to Agent; provided, however,
that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to
address the results of any audit performed by Agent from time to time after the Closing Date. In
determining the amount to be included, Eligible Credit Insured Accounts shall be calculated net of
customer deposits and unapplied cash.




          “Eligible Equipment” means the Equipment owned by Borrowers, that complies with each
of the representations and warranties respecting Eligible Equipment made in the Loan Documents,
and that is not excluded as ineligible by virtue of one or more of the excluding criteria set
forth below; provided, however, that such criteria may be revised from time to
time by Agent in Agent’s Permitted Discretion to address the results of any audit or appraisal
performed by Agent from time to time after the Closing Date. A piece of Equipment shall not be
included in Eligible Equipment if:




          (a) the applicable Borrower does not have good, valid, and marketable title thereto,




          
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CONFIDENTIAL
TREATMENT REQUESTED


          (b) it is not subject to a valid and perfected first priority Agent’s Lien,




          (c) the full purchase price for such equipment has not been paid by Borrowers,




          (d) it
is not located at one of the locations in the continental United States set forth on Schedule E-l,




          (e) it is located on real property leased by a Borrower unless either (i) it is subject to a Collateral Access Agreement executed by the lessor, or (ii) Agent has established
a reserve against the Borrowing Base in an amount equal to three (3) months rent with respect to
such premises (or such lesser amount as agreed to by Agent in its sole discretion),




          (f) it is not in good working order and condition (ordinary wear and tear excepted) or it is not used or held for use by Borrowers in the ordinary course of business of
the Borrowers,




          (g) it is subject to any agreement which restricts the ability of Borrowers to use, sell, transport or dispose of such equipment or which restricts the Agent’s ability to take
possession of, sell or otherwise dispose of such equipment, or




          (h) it constitutes “fixtures” under the applicable laws of the jurisdiction in which such
equipment is located.




          “Eligible Equipment Sublimit” means Six Million Five Hundred Thousand Dollars
($6,500,000); provided, however, that beginning on January 31, 2010 and on the
last day of each fiscal quarter of Parent thereafter, the Eligible Equipment Sublimit shall be
reduced by Three Hundred Twenty-Five Thousand Dollars ($325,000).




          “Eligible Inventory” means Inventory consisting of first quality finished goods held
for sale in the ordinary course of Borrowers’ business, that complies with each of the
representations and warranties respecting Eligible Inventory made in the Loan Documents, and that
is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below;
provided, however, that such criteria may be revised from time to time by Agent in
Agent’s Permitted Discretion to address the results of any audit or appraisal performed by Agent
from time to time after the Closing Date. In determining the amount to be so included, Inventory
shall be valued at the lower of cost or market on a basis consistent with Borrowers’ historical
accounting practices. An item of Inventory shall not be included in Eligible Inventory if:




          (a) the
applicable Borrower does not have good, valid, and marketable title
thereto,




          (b) the
applicable Borrower does not have actual and exclusive possession thereof (either directly or through a bailee or agent of such Borrower),




          (c) it
is not located at one of the locations in the continental United States set forth on Schedule E-l (or in-transit from one such location to another such location),




          (d) it is in-transit to or from a location of a Borrower (other than in-transit from one location set forth on Schedule E-l to another location set forth on Schedule
E-l),




          (e) it is located on real property leased by a Borrower or in a contract warehouse, in each case, unless it is segregated or otherwise separately identifiable from
goods of others, if any, stored on the premises, and either (i) it is subject to a Collateral Access
Agreement






11








 





CONFIDENTIAL
TREATMENT REQUESTED




executed by the lessor or warehouseman, as the case may be, or (ii) Agent has established a
reserve against the Borrowing Base in an amount equal to three (3) months rent with respect to
such premises or three (3) months warehouse charges with respect to such premises, as applicable
(or such lesser amount as agreed to by Agent in its sole discretion),




          (f) it is the subject of a bill of lading or other document of title,




          (g) it is not subject to a valid and perfected first priority Agent’s Lien,




          (h) it consists of goods returned or rejected by the applicable Borrower’s customers, or




          (i) it consists of goods that are obsolete or slow moving, restrictive or custom items,
work-in-process, raw materials, or goods that constitute spare parts, packaging and shipping
materials, supplies used or consumed in Borrowers’ business, bill and hold goods, defective goods,
“seconds,” or Inventory acquired on consignment.




          “Eligible Investment Grade Accounts” means an Account (a) that satisfies all of the
criteria set forth in the definition of Eligible Accounts other than clause (f) of such definition,
and (b) is owed by an Account Debtor that is an Eligible Investment Grade Account Debtor;
provided. however, that such criteria may be revised from time to time by Agent in
Agent’s Permitted Discretion to address the results of any audit performed by Agent from time to
time after the Closing Date. In determining the amount to be included, Eligible Investment Grade
Accounts shall be calculated net of customer deposits and unapplied cash.




          “Eligible Investment Grade Account Debtors” means an Account Debtor listed on
Schedule E-2 (as such list may be added to from time to time by Agent in its sole
discretion): that (a) does not maintain its chief executive office in the United States, or (b) is
not organized under the laws of the United States or any state thereof or the District of
Columbia, in either case, so long as such Account Debtor, or the owner of all of the Stock of such
Account Debtor, has a credit rating of at least “BBB-” by S&P or “Baa3” by Moody’s.




          “Eligible Specified Accounts” means an Account that (a) satisfies all of the criteria
set forth in the definition of Eligible Accounts other than clause (f) of such definition, and (b)
is owed by an Account Debtor that is an Eligible Specified Account Debtor; provided,
however, that such criteria may be revised from time to time by Agent in Agent’s Permitted
Discretion to address the results of any audit performed by Agent from time to time after the
Closing Date. In determining the amount to be included, Eligible Specified Accounts shall be
calculated net of customer deposits and unapplied cash.




          “Eligible Specified Account Debtor” means an Account Debtor listed on Schedule E-3
(as such list may be added to from time to time by Agent in its sole discretion), so long as such
Account Debtor, or the owner of all of the Stock of such Account Debtor, has a credit rating of at
least “BB+” by S&P or “Bal” by Moody’s.




          “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.







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CONFIDENTIAL
TREATMENT REQUESTED




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




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




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




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




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




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




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




          “Excess Availability” means, as of any date of determination, the amount equal to
Availability minus the aggregate amount, if any, of all trade payables of Parent and its
Subsidiaries aged in excess of the greater of historical levels with respect thereto or ninety
(90) days and all book overdrafts of Parent and its Subsidiaries in excess of historical practices
with respect thereto, in each case as determined by Agent in its Permitted Discretion.




          “Excess Liquidity” means, as of any date of determination, the sum of (a) Excess
Availability as of such date, plus (b) Suppressed Availability as of such date in an amount not to
exceed [****].




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




          “Existing Credit Facility” means the credit facility provided to Parent pursuant to
the Loan and Security Agreement, dated as of March 14, 2008, among Parent and Silicon Valley Bank,
a California corporation.





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CONFIDENTIAL
TREATMENT REQUESTED



          “Fee Letter” means that certain fee letter, dated as of even date with the Agreement,
among Borrowers and Agent, in form and substance reasonably satisfactory to Agent.




          “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 Parent
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 accrued during such period; provided that, notwithstanding anything to
the contrary contained herein, Fixed Charges shall be deemed to be: (1) $3,473,000 for the fiscal
quarter ended February 1, 2009, (2) $3,018,000 for the fiscal quarter ended April 30, 2009, and
(3) $2,872,000 for the fiscal quarter ended August 2, 2009.




          Fixed Charge Coverage Ratio” means, with respect to Parent and its Subsidiaries for
any period, the ratio of (i) EBITDA for such period minus unfinanced 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.




          “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.




          “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.




          “Guarantors” means (a) each Subsidiary of Parent (other than any Borrower or any
Subsidiary that is not required to become a Guarantor pursuant to Section 5.11), and (b)
each other Person that becomes a guarantor after the Closing Date pursuant to Section 5.11
of the Agreement, and “Guarantor” means any one of them.




          “Guaranty” means that certain general continuing guaranty, dated as of even date with
the Agreement, executed and delivered by each Guarantor in favor of Agent, for the benefit of




          
14









 








CONFIDENTIAL
TREATMENT REQUESTED



the Lender Group and the Bank Product Providers, in form and substance reasonably satisfactory to
Agent.




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




          “Hedge Agreement” means any and all agreements or documents now existing or hereafter
entered into by Parent or any of its Subsidiaries that provide for an interest rate, credit,
commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging such Person’s exposure to fluctuations in
interest or exchange rates, loan, credit exchange, security, or currency valuations or commodity
prices.




          “Holdout Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.




          “Indebtedness” means (a) all obligations for borrowed money, (b) all obligations
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 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 to pay the deferred purchase price of assets (other than trade
payables incurred in the ordinary course of business and repayable in accordance with customary
trade practices), (f) all obligations owing under Hedge Agreements (which amount shall be
calculated based on the amount that would be payable by such Person if the Hedge Agreement were
terminated on the date of determination), (g) any Prohibited Preferred Stock, and (h) any
obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed,
endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that
constitutes Indebtedness under any of clauses (a) through (g) above. For purposes of this
definition, (i) the amount of any Indebtedness represented by a guaranty or other similar
instrument shall be the lesser of the principal amount of the obligations guaranteed and still
outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness
described in clause (d) above shall be the lower of the amount of the obligation and the fair
market value of the assets of such Person securing such obligation.




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




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




          “Indentures” means, collectively, the 2003 Indenture and the 2006
Indenture.




          “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




          
15









 








CONFIDENTIAL
TREATMENT REQUESTED



insolvency law, assignments for the benefit of creditors, formal or informal moratoria,
compositions, extensions generally with creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.




          “Intercompany Subordination Agreement” means an intercompany subordination agreement,
dated as of even date with the Agreement, executed and delivered by Parent, each of its
Subsidiaries, and Agent, the form and substance of which is reasonably satisfactory to Agent.




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




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




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




          “Investment” means, with respect to any Person, any investment by such Person in any
other Person (including Affiliates) in the form of loans, guarantees, advances, capital
contributions (excluding (a) commission, travel, and similar advances to directors, officers,
employees and consultants of such Person made in the ordinary course of business, and (b) bona
fide Accounts arising in the ordinary course of business), or acquisitions of Indebtedness, Stock,
or all or substantially all of the assets of such other Person (or of any division or business
line of such other Person), and any other items that are or would be classified as investments on
a balance sheet prepared in accordance with GAAP.




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




          “Issuing Lender” means WFF or any other Lender that, at the request of Administrative
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.




          “Lender” and “Lenders” have the respective meanings set forth in the preamble
to the Agreement, includes the Issuing Lender, and shall include any other Person made a party to
the Agreement pursuant to the provisions of Section 13.1 of the Agreement.




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




          “Lender Group Expenses” means all (a) costs or expenses (including taxes, and
insurance premiums) required to be paid by Parent or its Subsidiaries under any of the Loan




          
16









 







CONFIDENTIAL
TREATMENT REQUESTED



Documents that are paid, advanced, or incurred by the Lender Group, (b) out-of-pocket fees or
charges paid or incurred by Agent in connection with the Lender Group’s transactions with Parent
or its Subsidiaries under any of the Loan Documents, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record searches (including tax
lien, litigation, and UCC searches and including searches with the patent and trademark office,
the copyright office, or the department of motor vehicles), filing, recording, publication,
appraisal (including periodic collateral appraisals or business valuations to the extent of the
fees and charges (and up to the amount of any limitation) contained in the Agreement or the Fee
Letter), real estate surveys, real estate title policies and endorsements, and environmental
audits, (c) out-of-pocket costs and expenses incurred by Agent in the disbursement of funds to
Borrowers or other members of the Lender Group (by wire transfer or otherwise), (d) out-of-pocket
charges paid or incurred by Agent resulting from the dishonor of checks payable by or to any Loan
Party, (e) reasonable out-of-pocket costs and expenses paid or incurred by the Lender Group to
correct any default or enforce any provision of the Loan Documents, or during the continuance of
an Event of Default, in gaining possession of, maintaining, handling, preserving, storing,
shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion
thereof, irrespective of whether a sale is consummated, (f) reasonable out-of-pocket audit fees
and expenses (including travel, meals, and lodging) of Agent related to any inspections or audits
to the extent of the fees and charges (and up to the amount of any limitation) contained in the
Agreement or the Fee Letter, (g) reasonable out-of-pocket costs and expenses of third party claims
or any other suit paid or incurred by the Lender Group in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan Documents or the Lender
Group’s relationship with Parent or any of its Subsidiaries, (h) Agent’s reasonable costs and
expenses (including reasonable attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering (including travel, meals, and lodging), syndicating, or amending the Loan
Documents, and (i) Agent’s and each Lender’s reasonable costs and expenses (including reasonable
attorneys, accountants, consultants, and other advisors fees and expenses) incurred in
terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and
expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding
concerning Parent or any of its Subsidiaries or in exercising rights or remedies under the Loan
Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in taking
any Remedial Action concerning the Collateral.




          “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 issued by Issuing Lender or a letter of
credit issued by Underlying Issuer, as the context requires.




          “Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent, including provisions that specify that
the Letter of Credit fee and all usage charges set forth in the Agreement will continue to accrue
while the Letters of Credit are outstanding) to be held by Agent for the benefit of those Lenders
with a Revolver Commitment in an amount equal to 105% of the then existing Letter of Credit Usage,
(b) causing the Letters of Credit to be returned to the Issuing Lender, or (c) providing Agent with
a standby letter of credit, in form and substance reasonably satisfactory to Agent, from a
commercial bank acceptable to Agent (in its sole discretion) in an amount equal to 105% of the then
existing Letter of Credit Usage (it being understood that the Letter of Credit fee and all usage
charges set forth in the Agreement will continue to accrue while the Letters of Credit are
outstanding and that any such fees that accrue must be an amount that can be drawn under any such
standby letter of credit).








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TREATMENT REQUESTED


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




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




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




          “LIBOR Notice” means a written notice in the form of Exhibit L-l.




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




          “LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate per
annum determined by Agent by dividing (a) the Base LIBOR Rate for such Interest Period, by (b)
100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of the effective
day of any change in the Reserve Percentage.




          “LIBOR Rate Loan” means each portion of an Advance that bears interest at a rate
determined by reference to the LIBOR Rate.




          “LIBOR Rate Margin” means, as of any date of determination (with respect to any
portion of the outstanding Advances on such date that is a LIBOR Rate Loan), the applicable
margin set forth in the following table based upon the Average Daily Excess Availability for the
immediately preceding calendar quarter, as determined by Agent in its Permitted Discretion:




	 	 	 	 	 
	Level	 	Average Daily Excess Availability	 	Base Rate Margin
	I

	 	If Average Daily Excess Availability is
greater than $25,000,000
	 	3.75 percentage points
	 
	 	 	 	 
	II

	 	If Average Daily Excess Availability is
greater than or equal to $10,000,000 but
less than or equal to $25,000,000
	 	4.00 percentage points
	 
	 	 	 	 
	III

	 	If Average Daily Excess Availability is
less than $10,000,000
	 	4.25 percentage points





                    ; provided, however, that for the period commencing on the Closing Date
through the end of October 31, 2009, the LIBOR Rate Margin shall be the percentage points
specified for Pricing Level II as set forth in this definition; provided,
further, however, that if the Borrowers fail to provide any reports or
certifications required to determine the Average Daily Excess Availability when due, the LIBOR
Rate Margin shall be set at the percentage points specified for Pricing Level III until such
reports or certifications are delivered, on which date (but not retroactively), without
constituting a waiver of any Default or Event of Default occasioned by the failure to timely
deliver such reports or certifications, the LIBOR Rate Margin shall be set at the percentage
based upon the calculation determined pursuant to such reports or certifications. For purposes
of the preceding sentence (and subject to the forgoing provisos), at the end of each calendar
quarter Agent will test the Borrowers’ Average Daily Excess Availability, which amount will be
based upon reports and certifications delivered to Agent in accordance with the terms of this
Agreement. If any such reports or certifications are subsequently determined to be incorrect in
any material respect in a manner that





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TREATMENT REQUESTED


would result in a lower Average Daily Excess Availability, Agent may increase the LIBOR Rate
Margin retroactively to the beginning of the relevant quarter to the extent that such error caused
the applicable LIBOR Rate Margin to be less than the LIBOR Rate Margin that would have been in
effect if the error was not made.




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




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




          “Loan Documents” means the Agreement, the Bank Product Agreements, any Borrowing Base
Certificate, the Controlled Account Agreements, the Control Agreements, the Copyright Security
Agreement, the Fee Letter, the Guaranty, the Intercompany Subordination Agreement, the Letters of
Credit, the Mortgages, the Patent Security Agreement, the Security Agreement, the Trademark
Security Agreement, any note or notes executed by Borrowers in connection with the Agreement and
payable to any member of the Lender Group, any letter of credit application entered into by any
Borrower in connection with the Agreement, and any other agreement entered into, now or in the
future, by Parent or any of its Subsidiaries and any member of the Lender Group in connection with
the Agreement.




          “Loan Party” means any Borrower or any Guarantor.




          “Margin Stock” as defined in Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.




          “Material Adverse Change” means (a) a material adverse change in the business,
operations, results of operations, assets, liabilities or condition (financial or otherwise) of
Parent and its Subsidiaries, taken as a whole, (b) a material impairment of Parent’s and its
Subsidiaries ability to perform their obligations under the Loan Documents to which they are
parties or of the Lender Group’s ability to enforce the Obligations or realize upon the
Collateral, or (c) a material impairment of the enforceability or priority of Agent’s Liens with
respect to the Collateral as a result of an action or failure to act on the part of Parent or any
of its Non-CFC Subsidiaries.




          “Material Contract” means, with respect to any Person, (i) each contract or agreement
to which such Person or any of its Subsidiaries is a party involving aggregate consideration
payable to or by such Person or such Subsidiary of $500,000 or more (other than purchase orders in
the ordinary course of the business of such Person or such Subsidiary and other than contracts
that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its
business upon less than 60 days notice without penalty or premium) and (ii) all other contracts or
agreements, the loss of which could reasonably be expected to result in a Material Adverse Change.




          “Maturity Date” has the meaning specified therefor in Section 3.3
of the Agreement.




          “Maximum Revolver Amount” means $70,000,000, decreased by the amount of reductions in
the Revolver Commitments made in accordance with Section 2.4(c) of the Agreement.




          “Moody’s” has the meaning specified therefor in the definition of Cash
Equivalents.




          “Mortgage Policy” has the meaning specified therefor in Schedule
3.1(v).




19









 







CONFIDENTIAL
TREATMENT REQUESTED


          “Mortgages” means, individually and collectively, one or more mortgages, deeds of
trust, or deeds to secure debt, executed and delivered by Parent or its Subsidiaries in favor of
Agent, in form and substance reasonably satisfactory to Agent, that encumber the Real Property
Collateral.




          “Net Cash Proceeds” means, with respect to the issuance or incurrence of any
Indebtedness by Parent or any of its Subsidiaries, 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 Parent 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 Parent or such Subsidiary in connection
with such issuance or incurrence, (ii) taxes paid or payable to any taxing authorities by Parent 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 Parent or any of its Subsidiaries, and are
properly attributable to such transaction.




          “Net Liquidation Percentage” means the percentage of the book value of Borrowers’
Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory net of
all associated costs and expenses of such liquidation, such percentage to be as determined from
time to time by an appraisal company selected by Agent.




          “Net Orderly Liquidation Value” means, with respect to Equipment of any Person, the
orderly liquidation value thereof as determined in a manner acceptable to Agent by an appraiser
acceptable to Agent, net of all costs of liquidation thereof.




          “Non-CFC Subsidiary” means any Subsidiary of Parent that is not a
CFC.



          “Non-Loan Party” means any Subsidiary of Parent that
is not a Loan Party.




          “Obligations” means (a) all loans, Advances, 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),
contingent reimbursement or indemnification obligations with respect to Reimbursement Undertaking
or with respect to Letters of Credit, premiums, liabilities (including all amounts charged to the
Loan Account pursuant to the Agreement), obligations (including indemnification obligations), fees
(including the fees provided for in the Fee Letter), Lender Group Expenses (including any fees or
expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding),
guaranties, covenants, and duties of any kind and description owing by Borrowers to the Lender
Group pursuant to or evidenced by the 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 Borrowers are required to pay or reimburse by the Loan Documents or by law or
otherwise in connection with the Loan Documents, and (b) all Bank Product Obligations. Any
reference in the Agreement or in the Loan Documents to the Obligations shall include all or any
portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior
and subsequent to any Insolvency Proceeding.




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




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





20









 








CONFIDENTIAL
TREATMENT REQUESTED


          “Overadvance” has the meaning specified therefor in Section 2.5 of
the Agreement.




          “Parent” has the meaning specified therefor in the preamble
to the Agreement.




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



          “Participant Register” has the
meaning 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 4.18 of
the Agreement.




          “Payoff Date” means the first date on which all of the Obligations are paid in full
and the Revolver Commitments of the Lenders are terminated.




          “Permitted Convertible Note Debt” means the Indebtedness evidenced by convertible
notes and an indenture, the terms and conditions of which are substantially similar to the terms
and conditions described on Exhibit P-l, as determined by Agent in its Permitted
Discretion, which determination shall be evidenced by a certificate executed and delivered by
Agent to Borrowers.




          “Permitted Discretion” means a determination made in the exercise of reasonable (from
the perspective of a secured lender) business judgment.




          “Permitted Dispositions” means:




          (a) sales, abandonment, or other dispositions of: (i) Equipment (other than Eligible Equipment) that is substantially worn, damaged, obsolete or no longer used in the ordinary
course of business; and (ii) Eligible Equipment that is substantially worn, damaged, obsolete or no
longer used in the ordinary course of business so long as: (A) both before and after giving effect to any
such sale or other disposition, no Default or Event of Default has occurred and is continuing, (B) both
before and after giving effect to any such sale or other disposition, Excess Availability is greater
than $10,000,000, (C) Administrative Borrower provides Agent with prior written notice of such sale
or other disposition, (D) the aggregate appraised value of all Eligible Equipment sold or
otherwise disposed of in any fiscal year of Parent does not exceed $1,000,000,




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




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




          (d) the
licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,




          (e) the granting of Permitted Liens,




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




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




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




          
21









 








CONFIDENTIAL
TREATMENT REQUESTED


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




          (j) the sale or issuance of Stock (other than Prohibited Preferred Stock),




          (k) the lapse of registered patents, trademarks and other intellectual property of Parent and
its Subsidiaries to the extent not economically desirable in the conduct of their business and so
long as such lapse is not materially adverse to the interests of the Lenders,




          (1) the making of a Permitted Investment, and




          (m) so long as no Event of Default has occurred and is continuing, dispositions of assets
(other than Eligible Equipment, Accounts, intellectual property, licenses, Stock of Subsidiaries
of Parent, or Material Contracts) not otherwise permitted in clauses (a) through (1) above
so long as made at fair market value and the aggregate fair market value of all assets disposed of
in all such dispositions in any fiscal year (including the proposed disposition) would not exceed
$2,000,000.




          “Permitted Indebtedness” means:




          (a) Indebtedness evidenced by this Agreement and the other Loan Documents, together with Indebtedness owed to Underlying Issuers with respect to Underlying Letters of
Credit,




          (b) Indebtedness
set forth on Schedule 4.19 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; and (ii) unsecured guarantees arising
with respect to customary indemnification obligations to purchasers
in connection with Permitted Dispositions,




          (f) Indebtedness incurred in the ordinary course of business under performance,
surety, statutory, and appeal bonds,




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




          (h) the incurrence by Parent or its Subsidiaries of Indebtedness under Hedge Agreements that
are incurred for the bona fide purpose of hedging the interest rate or foreign currency risk
associated with Parent’s and its Subsidiaries’ operations and not for speculative purposes,




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




          (j) Indebtedness composing Permitted Investments,




          
22









 








CONFIDENTIAL
TREATMENT REQUESTED


          (k) the Subordinated Debt and any Refinancing Indebtedness in respect thereof;




          (1) the Permitted Convertible Note Debt so long as Parent receives Net Cash Proceeds
therefrom in an amount not less than $60,000,000 at the time such Indebtedness is incurred;
provided, however, that no principal payments shall be made by Parent or any of
its Subsidiaries on account of such Indebtedness prior to the Payoff Date; provided,
further, however, that such principal payment prohibition shall not apply to any
cash payments made in lieu of issuance of fractional shares upon conversion of any of the notes
that constitute Permitted Convertible Note Debt so long as the aggregate amount of all such cash
payments does not exceed $250,000; and




          (m) Indebtedness incurred by Non-Loan Parties in an aggregate amount not to exceed
$10,000,000; provided, however, that no Loan Party shall guaranty or otherwise be
liable on account of such Indebtedness.




          “Permitted Intercompany Advances” means loans made by (a) a Loan Party to another
Loan Party, (b) a Non-Loan Party to another Non-Loan Party, (c) a Non-Loan Party to a Loan Party,
so long as the parties thereto are party to the Intercompany Subordination Agreement.




          “Permitted Investments” means:




          (a) Investments in cash and Cash Equivalents,




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




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




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




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




          (g) Permitted Intercompany Advances,




          (h) Stock or other securities acquired in connection with the satisfaction or enforcement of
Indebtedness or claims due or owing to 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,




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




          (j) non-cash loans to employees, officers, and directors of Parent or any of its Subsidiaries
for the purpose of purchasing Stock in Parent so long as the proceeds of such loans are used in
their entirety to purchase such stock in Parent,




          
23









 








CONFIDENTIAL
TREATMENT REQUESTED


          (k) Investments in the form of Hedge Agreements that are permitted under the Agreement,




          (1) so long as no Default or Event of Default has occurred and is continuing at the time of
any such Investment or would result therefrom, Investments in joint ventures to the extent that
the aggregate amount invested outstanding at any time does not exceed $2,000,000,




          (m) 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 $2,000,000 in the aggregate amount
outstanding at any time.




          “Permitted Liens” means




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




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




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




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




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




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




          (j) Liens on amounts deposited to secure Parent’s and its Subsidiaries reimbursement
obligations with respect to surety 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,




          
24









 







CONFIDENTIAL
TREATMENT REQUESTED


          (1) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business,




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




          (n) rights of setoff or bankers’ liens upon deposits of cash in favor of banks or other
depository institutions, solely to the extent incurred in connection with the maintenance of such
deposit accounts in the ordinary course of business,




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




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




          (q) any interest or title of a licensor or lessor under any lease or license permitted by the
Agreement.




          “Permitted Notes Redemption” means the optional redemption or repurchase of the
Subordinated Notes by Parent so long as: (a) such redemption or repurchase is permitted by
applicable law and the Indentures (as applicable), (b) the purchase price is not in excess of the
par value of the Subordinated Notes being redeemed or repurchased, (c) no Default or Event of
Default shall have occurred and be continuing or would result therefrom, and (d) the sum of Excess
Liquidity plus Qualified Cash both before and immediately after giving effect to such redemption
or repurchase is greater than $10,000,000.




          “Permitted Protest” means the right of Parent or any of its Subsidiaries to protest
any Lien (other than any Lien that secures the Obligations), taxes (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 Parent’s or its Subsidiaries’ books
and records in such amount as is required under GAAP, (b) any such protest is instituted promptly
and prosecuted diligently by Parent or its Subsidiary, as applicable, in good faith, and (c) Agent
is satisfied that, while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of Agent’s Liens.




          “Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate principal amount
outstanding at any one time not in excess of $10,000,000.




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




          “Preferred Stock” means, as applied to the Stock of any Person, the Stock of any
class or classes (however designated) that is preferred with respect to the payment of dividends,
or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution
of such Person, over shares of Stock of any other class of such Person.




25









 





CONFIDENTIAL
TREATMENT REQUESTED



          “Prohibited Preferred Stock” means any Preferred Stock that by its terms is
mandatorily redeemable or subject to any other payment obligation (including any obligation to pay
dividends, other than dividends of shares of Stock (so long as such Stock would not otherwise
constitute Prohibited Preferred Stock)) on or before a date that is less than 1 year after the
Maturity Date, or, on or before the date that is less than 1 year after the Maturity Date, is
redeemable at the option of the holder thereof for cash or assets or securities (other than
distributions in kind of shares of Stock (so long as such Stock would not otherwise constitute
Prohibited Preferred Stock)).




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




          “Pro Rata Share” means, as of any date of determination:




          (a) with respect to a Lender’s obligation to make Advances and right to receive payments of principal, interest, fees, costs, and expenses with respect thereto, (i) prior to
the Revolver Commitments being terminated or reduced to zero, the percentage obtained by dividing (y) such Lender’s Revolver Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and
(ii) from and after the time that the Revolver Commitments have been terminated or reduced to zero,
the percentage obtained by dividing (y) the outstanding principal amount of such Lender’s Advances
by (z) the outstanding principal amount of all Advances,




          (b) with respect to a Lender’s obligation to participate in Letters of Credit and Reimbursement Undertakings, to reimburse the Issuing Lender, and right to receive payments of
fees with respect thereto, (i) prior to the Revolver Commitments being terminated or reduced to
zero, the percentage obtained by dividing (y) such Lender’s Revolver Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and (ii) from and after the time that the Revolver
Commitments have been terminated or reduced to zero, the percentage obtained by dividing (y) the outstanding principal amount of such Lender’s Advances by (z) the outstanding principal amount
of all Advances; provided, however, that if all of the Advances have been repaid in full and Letters of Credit remain outstanding, Pro Rata Share under this clause shall be determined based upon
subclause (i) of this clause as if the Revolver Commitments had not been terminated or reduced to zero and based upon the Revolver Commitments as they existed immediately prior to their termination or
reduction to zero, and



          (c) with respect to all other matters as to a particular Lender (including the indemnification obligations arising under Section 15.7 of the Agreement), (i) prior to
the Revolver Commitments being terminated or reduced to zero, the percentage obtained by dividing (y) such Lender’s Revolver Commitment by (z) the aggregate amount of Revolver Commitments of all
Lenders, and (ii) from and after the time that the Revolver Commitments have been terminated or reduced to zero, the percentage obtained by dividing (y) the outstanding principal amount of
such Lender’s Advances, by (z) the outstanding principal amount of all Advances; provided, however, that if all of the Advances have been repaid in full and Letters of Credit remain outstanding, Pro
Rata Share under this clause shall be determined based upon subclause (i) of this clause as if the Revolver Commitments had not been terminated or reduced to zero and based upon the Revolver Commitments as they existed immediately prior to their termination or reduction to zero.




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




          “Purchase Money Indebtedness” means Indebtedness (other than the Obligations, but
including Capitalized Lease Obligations), incurred at the time of, or within 20 days after, the





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CONFIDENTIAL
TREATMENT REQUESTED


acquisition of any fixed assets for the purpose of financing all or any part of the acquisition
cost thereof.




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




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




          “Real Property Collateral” means the Real Property identified on Schedule R-l
and any Real Property hereafter acquired by any Loan Party.




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




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




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




          (b) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a
whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,




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




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




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




          “Related Fund” means, with respect to any Lender that is an investment fund, any
other investment fund that invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.




          “Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain,
treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or
outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous
Materials so they do not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment,
(d) perform any pre-




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CONFIDENTIAL
TREATMENT REQUESTED


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 Availability” means that the sum of (a) Excess Availability, plus (b)
Qualified Cash exceeds $30,000,000.




          “Required Lenders” means, at any time, Lenders whose aggregate Pro Rata Shares
(calculated under clause (c) of the definition of Pro Rata Shares) exceed 50%; provided,
however, that at any time there are 2 or more Lenders, “Required Lenders” must include at
least 2 Lenders.




          “Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any successor Governmental
Authority) for determining the reserve requirements (including any basic, supplemental, marginal,
or emergency reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as “eurocurrency liabilities”) of that Lender, but so long as such Lender
is not required or directed under applicable regulations to maintain such reserves, the Reserve
Percentage shall be zero.




          “Revolver Commitment” means, with respect to each Lender, its Revolver Commitment,
and, with respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts
are set forth beside such Lender’s name under the applicable heading on Schedule C-l or in
the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder, 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 Usage” means, as of any date of determination, the sum of (a) the amount of
outstanding Advances (including Swing Loans), plus (b) the amount of the Letter of Credit Usage.




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




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




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




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




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




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




          “Security Agreement” means a security agreement, dated as of even date with the
Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by
Borrowers and Guarantors to Agent.





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CONFIDENTIAL
TREATMENT REQUESTED



          “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 on a particular date, that, at fair
valuations, the sum of such Person’s assets is greater than all of such Person’s debts.




          “Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting,
including common stock, preferred stock, or any other “equity security” (as such term is defined
in Rule 3a l1-1 of the General Rules and Regulations promulgated by the SEC under the Exchange
Act).




          “Subordinated Debt” means the Indebtedness of the Parent issued pursuant to the
Subordinated Notes and the Indentures.




          “Subordinated Notes” means, collectively, the 21/2% Convertible Subordinated Notes
due 2010, and the 21/2% Convertible Senior Subordinated Notes due 2010, issued pursuant to the
Indentures.




          “Subsidiary” of a Person means a corporation, partnership, limited liability company,
or other entity in which that Person directly or indirectly owns or controls the shares of Stock
having ordinary voting power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability company, or other entity.




          “Suppressed Availability” means, as of any date of determination, the result (so long
as it is a positive number) of (a) the Borrowing Base as of such date, minus (b) the Maximum
Revolver Amount as of such date; if the result of the foregoing is a negative number, then
Suppressed Availability is zero.




          “Swing Lender” means WFF or any other Lender that, at the request of Administrative
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.




          “Taxes” means any taxes, levies, imposts, duties, fees, assessments or other charges
of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments and all interest, penalties or
similar liabilities with respect thereto; provided, however, that Taxes shall
exclude (i) any tax imposed on the net income or net profits of any Lender or any Participant
(including any branch profits taxes) or any net worth or capital taxes imposed as a minimum tax in
lieu of a tax determined based upon the net income or net profits of any Lender or any
Participant, in each case imposed by the jurisdiction (or by any political subdivision or taxing
authority thereof) in which such Lender or such Participant is organized or the jurisdiction (or
by any political subdivision or taxing authority thereof) in which such Lender’s or such
Participant’s principal office is located in each case as a result of a present or former
connection between such Lender or such Participant and the jurisdiction or taxing authority
imposing the tax (other than any such connection arising solely from such Lender or such
Participant having executed, delivered or performed its obligations or received payment under, or
enforced its rights or remedies under the Agreement or any other Loan Document); (ii) taxes
resulting from a Lender’s or a Participant’s failure to comply with the requirements of
Section 16(c) or (d) of the Agreement, and (iii) any United States federal withholding
taxes that would be imposed on amounts payable to a





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CONFIDENTIAL
TREATMENT REQUESTED


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 Taxes shall include (A) any amount that such Foreign Lender (or its assignor, if any) was
previously entitled to receive pursuant to Section 16(a) of this Agreement, if any, with
respect to such withholding tax at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office), and (B) additional United States federal
withholding taxes that may be imposed after the time such Foreign Lender becomes a party to the
Agreement (or designates a new lending office), as a result of a change in law, rule,
regulation, order or other decision with respect to any of the foregoing by any Governmental
Authority.




          “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.




          “Underlying Issuer” means Wells Fargo or one of its Affiliates.




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




          “United States” means the United States of America.




          “Unused Line Margin” means, as of any date of determination, the percentage points
set forth below based upon the Average Daily Excess Availability for the immediately preceding
calendar quarter, as determined by Agent in its Permitted Discretion:




	 	 	 	 	 
	Level	 	Average Daily Excess Availability	 	Unused Line Margin
	I

	 	If Average Daily Excess Availability is
greater than $25,000,000
	 	0.50 percentage points
	 
	 	 	 	 
	II

	 	If Average Daily Excess Availability is
greater than or equal to $10,000,000
but less than or equal to $25,000,000
	 	0.625 percentage points
	 
	 	 	 	 
	III

	 	If Average Daily Excess Availability is
less than $10,000,000
	 	0.75 percentage points





                    ; provided, however, that for the period commencing on the Closing Date
through the end of October 31, 2009, the Unused Line Margin shall be the percentage points
specified for Pricing Level II as set forth in this definition; provided,
further, however, that if the Borrowers fail to provide any reports or
certifications required to determine the Average Daily Excess Availability when due, the Unused
Line Margin shall be set at the percentage points specified for Pricing Level III until such
reports or certifications are delivered, on which date (but not retroactively), without
constituting a waiver of any Default or Event of Default occasioned by the failure to timely
deliver such reports or certifications, the Unused Line Margin shall be set at the percentage
based upon the calculation determined pursuant to such reports or certifications. For purposes
of the preceding sentence (and subject to the forgoing provisos), at the end of each calendar
quarter Agent will test the Borrowers’ Average Daily Excess Availability, which amount will be
based upon reports and certifications delivered to Agent in accordance with the terms of this
Agreement. If any such reports or certifications are subsequently determined to be incorrect in
any material respect in a manner that




30









 








CONFIDENTIAL
TREATMENT REQUESTED


would result in a lower Average Daily Excess Availability, Agent may increase the Unused Line
Margin retroactively to the beginning of the relevant quarter to the extent that such error caused
the applicable Unused Line Margin to be less than the Unused Line Margin that would have been in
effect if the error was not made.




          “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.




          “WFF” means Wells Fargo Foothill, LLC, a Delaware limited liability
company.




          
31