exv10w1






EXHIBIT 10.1




 





CREDIT AGREEMENT




Dated as of November 17, 2010




among




VALUEVISION MEDIA, INC.,

as the Lead Borrower




For




The Borrowers Named Herein




CRYSTAL FINANCIAL LLC,

as Agent and as a Lender




and




The Other Lenders Party Hereto




 







 









 








TABLE OF CONTENTS




	 	 	 	 	 
	Section	 	Page	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	 
	 	 	 	 
	1.01 Defined Terms
	 	 	1	 
	1.02 Other Interpretive Provisions
	 	 	36	 
	1.03 Accounting Terms
	 	 	37	 
	1.04 Times of Day
	 	 	37	 
	 
	 	 	 	 
	ARTICLE II THE COMMITMENTS AND LOANS
	 	 	37	 
	 
	 	 	 	 
	2.01 Loans; Reserves; Protective Advances
	 	 	37	 
	2.02 Prepayments
	 	 	38	 
	2.03 Interest; Term Loan PIK Interest
	 	 	38	 
	2.04 Fees
	 	 	39	 
	2.05 Computation of Interest and Fees
	 	 	39	 
	2.06 Evidence of Debt
	 	 	40	 
	2.07 Payments Generally; Agent’s Clawback
	 	 	40	 
	2.08 Sharing of Payments by Lenders
	 	 	41	 
	 
	 	 	 	 
	ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY; APPOINTMENT OF LEAD BORROWER
	 	 	41	 
	 
	 	 	 	 
	3.01 Taxes
	 	 	41	 
	3.02 Illegality
	 	 	43	 
	3.03 Inability to Determine Rates
	 	 	43	 
	3.04 Increased Costs
	 	 	43	 
	3.05 Mitigation Obligations; Replacement of Lenders
	 	 	44	 
	3.06 Survival
	 	 	45	 
	3.07 Designation of Lead Borrower as Borrowers’ Agent
	 	 	45	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS PRECEDENT TO LOANS
	 	 	45	 
	 
	 	 	 	 
	4.01 Conditions of Loan
	 	 	45	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	49	 
	 
	 	 	 	 
	5.01 Existence, Qualification and Power
	 	 	49	 
	5.02 Authorization; No Contravention
	 	 	50	 
	5.03 Governmental Authorization; Other Consents
	 	 	50	 
	5.04 Binding Effect
	 	 	50	 
	5.05 Financial Statements; No Material Adverse Effect
	 	 	50	 
	5.06 Litigation
	 	 	51	 
	5.07 No Default
	 	 	51	 
	5.08 Ownership of Property; Liens
	 	 	51	 
	5.09 Environmental Compliance
	 	 	52	 
	5.10 Insurance
	 	 	53	 
	5.11 Taxes
	 	 	53	 
	5.12 ERISA Compliance
	 	 	53	 
	5.13 Subsidiaries; Equity Interests
	 	 	54	 
	5.14 Margin Regulations; Investment Company Act
	 	 	54	 






(i)









 






	 	 	 	 	 
	Section	 	Page	 
	5.15 Disclosure
	 	 	54	 
	5.16 Compliance with Laws
	 	 	54	 
	5.17 Intellectual Property; Licenses, Etc.
	 	 	55	 
	5.18 Labor Matters
	 	 	55	 
	5.19 Security Documents
	 	 	55	 
	5.20 Solvency
	 	 	56	 
	5.21 Deposit Accounts; Credit Card Arrangements
	 	 	56	 
	5.22 Brokers
	 	 	57	 
	5.23 Customer and Trade Relations
	 	 	57	 
	5.24 DirecTV Agreement and DirecTV Security Documents
	 	 	57	 
	5.25 Casualty
	 	 	57	 
	5.26 Inactive Subsidiaries; Norwell
	 	 	57	 
	5.27 Communications Act; FCC Licenses
	 	 	57	 
	 
	 	 	 	 
	ARTICLE VI AFFIRMATIVE COVENANTS
	 	 	58	 
	 
	 	 	 	 
	6.01 Financial Statements
	 	 	58	 
	6.02 Certificates; Other Information
	 	 	58	 
	6.03 Notices
	 	 	61	 
	6.04 Payment of Obligations
	 	 	62	 
	6.05 Preservation of Existence, Etc.
	 	 	62	 
	6.06 Maintenance of Properties
	 	 	62	 
	6.07 Maintenance of Insurance
	 	 	62	 
	6.08 Compliance with Laws
	 	 	64	 
	6.09 Books and Records; Accountants
	 	 	64	 
	6.10 Inspection Rights
	 	 	64	 
	6.11 Use of Proceeds
	 	 	65	 
	6.12 Additional Loan Parties
	 	 	65	 
	6.13 Cash Management
	 	 	66	 
	6.14 Information Regarding the Collateral
	 	 	67	 
	6.15 Physical Inventories
	 	 	67	 
	6.16 Environmental Laws
	 	 	68	 
	6.17 Further Assurances
	 	 	68	 
	6.18 Compliance with Terms of Leaseholds
	 	 	69	 
	6.19 Minimum Unrestricted Cash
	 	 	69	 
	6.20 Average FICO Scores
	 	 	69	 
	6.21 Back-Up Servicer
	 	 	69	 
	 
	 	 	 	 
	ARTICLE VII NEGATIVE COVENANTS
	 	 	69	 
	 
	 	 	 	 
	7.01 Liens
	 	 	69	 
	7.02 Investments
	 	 	70	 
	7.03 Indebtedness; Disqualified Stock
	 	 	70	 
	7.04 Fundamental Changes
	 	 	70	 
	7.05 Dispositions
	 	 	70	 
	7.06 Restricted Payments
	 	 	70	 
	7.07 Prepayments of Indebtedness
	 	 	71	 
	7.08 Change in Nature of Business
	 	 	71	 
	7.09 Transactions with Affiliates
	 	 	71	 
	7.10 Burdensome Agreements
	 	 	71	 
	7.11 Use of Proceeds
	 	 	71	 






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	Section	 	Page	 
	7.12 Amendment of Material Documents
	 	 	72	 
	7.13 Fiscal Year
	 	 	72	 
	7.14 Deposit Accounts; Credit Card Processors
	 	 	72	 
	7.15 Inactive Subsidiaries; Norwell
	 	 	72	 
	7.16 Change of Name
	 	 	72	 
	7.17 Modification or Maturity of Material Indebtedness
	 	 	72	 
	7.18 Modification of Value Pay Plan
	 	 	72	 
	 
	 	 	 	 
	ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES
	 	 	73	 
	 
	 	 	 	 
	8.01 Events of Default
	 	 	73	 
	8.02 Remedies Upon Event of Default
	 	 	75	 
	8.03 Application of Funds
	 	 	76	 
	 
	 	 	 	 
	ARTICLE IX THE AGENT
	 	 	76	 
	 
	 	 	 	 
	9.01 Appointment and Authority
	 	 	76	 
	9.02 Rights as a Lender
	 	 	77	 
	9.03 Exculpatory Provisions
	 	 	77	 
	9.04 Reliance by Agent
	 	 	78	 
	9.05 Delegation of Duties
	 	 	78	 
	9.06 Resignation of Agent
	 	 	78	 
	9.07 Non-Reliance on Agent and Other Lenders
	 	 	79	 
	9.08 No Other Duties, Etc.
	 	 	79	 
	9.09 Agent May File Proofs of Claim
	 	 	79	 
	9.10 Collateral and Guaranty Matters
	 	 	80	 
	9.11 Notice of Transfer
	 	 	80	 
	9.12 Reports and Financial Statements
	 	 	80	 
	9.13 Agency for Perfection
	 	 	81	 
	9.14 Indemnification of Agent
	 	 	81	 
	9.15 Relation among Lenders
	 	 	82	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	82	 
	 
	 	 	 	 
	10.01 Amendments, Etc.
	 	 	82	 
	10.02 Notices; Effectiveness; Electronic Communications
	 	 	84	 
	10.03 No Waiver; Cumulative Remedies
	 	 	85	 
	10.04 Expenses; Indemnity; Damage Waiver
	 	 	85	 
	10.05 Payments Set Aside
	 	 	86	 
	10.06 Successors and Assigns.
	 	 	87	 
	10.07 Treatment of Certain Information; Confidentiality
	 	 	90	 
	10.08 Right of Setoff
	 	 	90	 
	10.09 Interest Rate Limitation
	 	 	91	 
	10.10 Counterparts; Integration; Effectiveness
	 	 	91	 
	10.11 Survival
	 	 	91	 
	10.12 Severability
	 	 	92	 
	10.13 Replacement of Lenders
	 	 	92	 
	10.14 Governing Law; Jurisdiction; Etc.
	 	 	92	 
	10.15 Waiver of Jury Trial
	 	 	93	 
	10.16 No Advisory or Fiduciary Responsibility
	 	 	94	 
	10.17 USA PATRIOT Act Notice
	 	 	94	 
	10.18 Foreign Asset Control Regulations
	 	 	95	 






(iii)









 






	 	 	 	 	 
	Section	 	Page	 
	10.19 Time of the Essence
	 	 	95	 
	10.20 Press Releases
	 	 	95	 
	10.21 Additional Waivers
	 	 	95	 
	10.22 No Strict Construction
	 	 	97	 
	10.23 Attachments
	 	 	97	 
	 
	 	 	 	 
	SIGNATURES
	 	 	S-1	 






(iv)









 






	 	 	 

	SCHEDULES
	 	 
	 
	 	 
	1.01
	 	Borrowers
	1.02
	 	Loan Parties’ Fiscal Accounting Calendar
	2.01
	 	Commitments and Applicable Percentages
	5.01
	 	Loan Parties Organizational Information
	5.06
	 	Litigation
	5.08(b)(1)
	 	Owned Real Estate
	5.08(b)(2)
	 	Leased Real Estate
	5.09
	 	Environmental Matters
	5.10
	 	Insurance
	5.13
	 	Subsidiaries; Other Equity Investments
	5.17
	 	Intellectual Property Matters
	5.18
	 	Collective Bargaining Agreements
	5.21(a)
	 	DDAs
	5.21(b)
	 	Credit Card Arrangements
	7.01
	 	Existing Liens
	7.02
	 	Existing Investments
	7.03
	 	Existing Indebtedness
	10.02
	 	Agent’s Office; Certain Addresses for Notices
	 
	 	 
	EXHIBITS
	 	 
	 
	 	 
	 
	 	Form of
	 
	 	 
	A
	 	Note
	B
	 	Compliance Certificate
	C
	 	Assignment and Assumption
	D
	 	Credit Card Processor Notification
	E
	 	Borrowing Base Certificate







(v)











 





CREDIT AGREEMENT




     This CREDIT AGREEMENT (“Agreement”) is entered into as of November 17, 2010, among



     VALUEVISION MEDIA, INC., a Minnesota corporation (the “Lead Borrower”),



     the Persons named on Schedule 1.01 hereto (together with the Lead Borrower,
collectively, the “Borrowers”),



     each lender from time to time party hereto (collectively, the “Lenders” and individually, a
“Lender”), and



     CRYSTAL FINANCIAL LLC, as Agent for the Lenders.



     The Borrowers have requested that the Lenders make a term loan to the Borrowers, and the
Lenders have indicated their willingness to lend on the terms and conditions set forth herein.



     In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:



ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS




     1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings
set forth below:



     “ACH” means automated clearing house transfers.



     “Accommodation Payment” as defined in Section 10.21(d).



     “Account” means “accounts” as defined in the UCC, and also means a right to payment of a
monetary obligation, whether or not earned by performance, (a) for property that has been or is to
be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be
rendered, or (c) arising out of the use of a credit or charge card or information contained on or
for use with the card.



     “Additional Credit Support” means (i) 100% of all Eligible Cash, or (ii) the then maximum
amount available for drawing under the Eligible Letter of Credit; provided that to the
extent the Additional Credit Support exceeds $2,500,000, no Eligible Cash shall be included as
Additional Credit Support unless the Borrowers have not obtained the Eligible Letter of Credit
after having used commercially reasonable efforts in respect thereof.



     “Adjusted LIBO Rate” means, for any Interest Period with respect to any Borrowing, an interest
rate per annum (rounded upwards, if necessary, to the next 1/100 of one percent) equal to the
greater of (a) (i) the LIBO Rate for an Interest Period commencing on the date of such calculation
and ending on the date that is thirty (30) days thereafter multiplied by (ii) the Statutory Reserve
Rate, and (b) 1.50%. The Adjusted LIBO Rate will be adjusted automatically as of the effective
date of any change in the Statutory Reserve Rate.



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     “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the
Agent.



     “Affiliate” means, with respect to any Person, (i) another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under common Control with
the Person specified, (ii) any director, officer, managing member, partner, trustee, or beneficiary
of such Person, (iii) any other Person directly or indirectly holding 10% or more of any class of
the Equity Interests of that Person, and (iv) any other Person 10% or more of any class of whose
Equity Interests is held directly or indirectly by that Person.



     “Agent” means Crystal Financial LLC, in its capacity as Agent under any of the Loan Documents,
or any successor Agent.



     “Agent’s Office” means the Agent’s address and, as appropriate, account as set forth on
Schedule 10.02, or such other address or account as the Agent may from time to time notify
the Lead Borrower and the Lenders.



     “Agreement” means this Credit Agreement.



     “Allocable Amount” has the meaning specified in Section 10.21(d).



     “Applicable Lenders” means the Required Lenders, all affected Lenders, or all Lenders, as the
context may require.



     “Applicable Margin” means (a) from and after the Closing Date through the first anniversary
thereof, 6.50% per annum and (b) after the first anniversary of the Closing Date, 8.50% per annum;
provided that for purposes of Sections 3.02 and 3.03 hereof, “Applicable
Margin” shall mean (x) from and after the Closing Date through the first anniversary thereof, 5.50%
per annum and (y) after the first anniversary of the Closing Date, 7.50% per annum.



     “Applicable Percentage” means, with respect to any Lender at any time, the percentage (carried
out to the ninth decimal place) of the aggregate Loans represented by the outstanding principal
balance of such Lender’s Loan at such time. The initial Applicable Percentage of each Lender is
set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.



     “Appraised Value” means (a) with respect to the Borrowers’ Eligible Inventory, the appraised
wholesale orderly liquidation value, net of costs and expenses to be incurred in connection with
any such liquidation, which value is expressed as a percentage of Cost of the Borrowers’ Eligible
Inventory as set forth in the Borrowers’ inventory stock ledger, which percentage shall be
determined from time to time by the most recent appraisal undertaken by an independent appraiser
engaged by the Agent, (b) with respect to the Borrowers’ Eligible Real Estate, the fair market
value of the Borrowers’ Eligible Real Estate as set forth in the most recent appraisal of the
Borrowers’ Eligible Real Estate as determined from time to time by an independent appraiser engaged
by the Agent, which appraisal shall assume, among other things, a marketing time of not greater
than twelve (12) months or less than three (3) months, or (c) with respect to the Borrowers’
Eligible Consumer Receivables, the appraised orderly liquidation value, which value is expressed as
a percentage of total Value Pay Plan receivables outstanding and which shall be determined from
time to time by the most recent appraisal undertaken by an independent appraiser engaged by the
Agent.



-2-









 





     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender, (c) an entity or an Affiliate of an entity that administers or manages a
Lender or (d) the same investment advisor or an advisor under common control with such Lender,
Affiliate or advisor, as applicable.



     “Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or
two or more Approved Funds managed by the same investment advisor.



     “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an
Eligible Assignee (with the consent of any party whose consent is required by Section
10.06(b)), and accepted by the Agent, in substantially the form of Exhibit C or any
other form approved by the Agent.



     “Attributable Indebtedness” means, on any date, in respect of any Capital Lease Obligation of
any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, the capitalized amount of the remaining lease or
similar payments under the relevant lease or other applicable agreement or instrument that would
appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such
lease, agreement or instrument were accounted for as a capital lease.



     “Audited Financial Statements” means the audited consolidated balance sheet of the Lead
Borrower and its Subsidiaries for the fiscal year ended January 30, 2010, and the related
consolidated statements of income or operations, Shareholders’ Equity and cash flows for such
fiscal year of the Lead Borrower and its Subsidiaries, including the notes thereto.



     “Availability Reserves” means, without duplication of any other Reserves or items to the
extent such items are otherwise addressed or excluded through eligibility criteria, subject to the
provisions of Section 2.01(b) hereof, such reserves as the Agent from time to time
determines in its Credit Judgment.



     “Average FICO Score” shall mean, on any date of determination, the average FICO Score of all
Persons participating in the Value Pay Plan for whom a FICO score has been obtained, as determined
by Agent in accordance with its practices in the ordinary course of business in effect on the
Closing Date.



     “Base Rate“  means, for any day, a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent
(0.50%), (b) the Adjusted LIBO Rate plus one percent (1.00%), or (c) the rate of interest in effect
for such day published in the “Money Rates” section of The Wall Street Journal as the “prime rate.”
Any change in the prime rate shall take effect at the opening of business on the day of such
change.



     “Blocked Account” means each DDA (other than a Specified DDA) maintained by a Loan Party (i)
in which funds described in Section 6.13(b) hereof are deposited, and (ii) which is or is
required by the Agent to be subject to a Blocked Account Agreement.



     “Blocked Account Agreement” means with respect to an account established by a Loan Party, an
agreement, in form and substance satisfactory to the Agent, establishing control (as defined in the
UCC) of such account by the Agent and whereby the bank maintaining such account agrees, upon the
occurrence and during the continuance of a Event of Default, to comply only with the instructions
originated by the Agent without the further consent of any Loan Party.



-3-









 





     “Blocked Account Bank” means each bank with whom deposit accounts are maintained in which any
funds of any of the Loan Parties from one or more DDAs are concentrated and with whom a Blocked
Account Agreement has been, or is required to be, executed in accordance with the terms hereof.



     “Borrower URL” means the internet address of a specific website used by any Borrower.



     “Borrowers” has the meaning specified in the introductory paragraph hereto.



     “Borrowing Base” means, at any time of calculation, an amount equal to:




     (a) 90% of the amount of Eligible Credit Card Receivables (net of Receivables Reserves
applicable thereto) recorded in the Borrowers’ books and records;




     plus




     (b) the amount of Eligible Consumer Receivables recorded in the Borrowers’ books and
records, net of Receivables Reserves applicable thereto, multiplied by (i) the Appraised
Value of Eligible Consumer Receivables, multiplied by (ii) 90%;



          plus




     (c) the Cost of Eligible Inventory, net of Inventory Reserves, multiplied by (i) the
Appraised Value of Eligible Inventory, multiplied (ii) by 75%;




     plus




     (d) the Additional Credit Support;




     plus




     (e) 40% of the fair market value of Eligible Real Estate, net of Realty Reserves;



          minus



          (f) the then amount of letters of credit issued by any Person and outstanding for the account
of any of the Loan Parties (including, without limitation, the letters of credit described in
clauses (h) and (i) of the definition of “Permitted Indebtedness”), but only to the extent any such
letter of credit is not fully cash collateralized;




     minus




     (g) the then amount of all Availability Reserves.



     “Borrowing Base Certificate” means a certificate substantially in the form of Exhibit
E hereto (with such changes therein as may be required by the Agent to reflect the components
of and reserves against the Borrowing Base as provided for hereunder from time to time), executed
and certified as accurate and complete by the Lead Borrower signed by a Responsible Officer of the
Lead Borrower which shall include appropriate exhibits, schedules, supporting documentation, and
additional reports as reasonably requested by the Agent.



-4-









 





     “Business” means the sale, marketing and distribution of consumer products through television
programming and other electronic media and activities necessary to conduct the foregoing.



     “Business Day” means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, the state where the
Agent’s Office is located.



     “Capital Lease Obligations” means, with respect to any Person for any period, the obligations
of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which obligations are required
to be classified and accounted for as liabilities on a balance sheet of such Person under GAAP and the amount
of which obligations shall be the capitalized amount thereof determined in accordance with GAAP.



     “CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. § 9601 et seq.



     “CERCLIS” means the Comprehensive Environmental Response, Compensation, and Liability
Information System maintained by the United States Environmental Protection Agency.



     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority.



     “Change of Control” means an event or series of events by which:




     (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan), other than the Permitted Holders, becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, except that a person or group shall be deemed to have “beneficial ownership” of all
securities that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an “option
right”)), directly or indirectly, of 25% or more of the Equity Interests of the Lead
Borrower entitled to vote for members of the board of directors or equivalent governing body
of the Lead Borrower on a fully-diluted basis (and taking into account all such Equity
Interests that such “person” or “group” has the right to acquire pursuant to any option
right); or




     (b) during any period of 12 consecutive months, a majority of the members of the board
of directors or other equivalent governing body of the Lead Borrower cease to be composed of
individuals (i) who were members of that board or equivalent governing body on the first day
of such period, (ii) whose election or nomination to that board or equivalent governing body
was approved by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing body or
(iii) whose election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent governing
body (excluding, in the case



-5-









 







of both clause (ii) and clause (iii), any individual whose
initial nomination for, or assumption of office as, a member of that board or equivalent
governing body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or group other
than a solicitation for the election of one or more directors by or on behalf of the board
of directors); or




     (c) any “change in control” or “sale” or “disposition” or similar event as defined in
any Organizational Document of any Loan Party or in any document governing Material
Indebtedness of any Loan Party; or




     (d) the Lead Borrower fails at any time to own, directly or indirectly, 100% of the
Equity Interests of each other Loan Party and Norwell free and clear of all Liens (other
than the
Liens in favor of the Agent, in the case of the other Loan Parties), except where such
failure is as a result of a transaction permitted by the Loan Documents.



     “Closing Date” means the first date all the conditions precedent in Section 4.01 are
satisfied or waived in accordance with Section 10.01.



     “Code” means the Internal Revenue Code of 1986, and the regulations promulgated thereunder, as
amended and in effect.



     “Collateral” means any and all “Collateral” or “Mortgaged Property” as defined in any
applicable Security Document and all other property that is or is intended under the terms of the
Security Documents to be subject to Liens in favor of the Agent.



     “Collateral Access Agreement” means an agreement reasonably satisfactory in form and substance
to the Agent executed by (a) a bailee, customs broker, freight forwarder, warehouseman or other
Person in possession of Collateral, and (b) each landlord of Real Estate leased by any Loan Party,
pursuant to which such Person (i) acknowledges the Agent’s Lien on the Collateral, (ii) releases
such Person’s Liens in the Collateral held by such Person or located on such Real Estate, (iii)
provides the Agent with access to the Collateral held by such bailee, customs broker, freight
forwarder, warehouseman or other Person or located in or on such Real Estate, (iv) as to any
landlord, provides the Agent with a reasonable time to sell and dispose of the Collateral from such
Real Estate, and (v) makes such other agreements with the Agent as the Agent may reasonably
require.



     “Communications Act” means the Communications Act of 1934 and any successor federal statute
and the rules and regulations and published policies of the FCC thereunder, all as amended and as
the same may be in effect from time to time.



     “Compliance Certificate” means a certificate substantially in the form of Exhibit B.



     “Concentration Account” has the meaning provided in Section 6.13(b).



     “Consolidated” means, when used to modify a financial term, test, statement, or report of a
Person, the application or preparation of such term, test, statement or report (as applicable)
based upon the consolidation, in accordance with GAAP, of the financial condition or operating
results of such Person and its Subsidiaries.



-6-









 





     “Contractual Obligation” means, as to any Person, any provision of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of its property is
bound.



     “Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.



     “Cost” means the cost of Inventory, based upon the Borrowers’ accounting practices, known to
the Agent, which practices are in effect on the Closing Date as such calculated cost is determined
from invoices received by the Borrowers, the Borrowers’ purchase journals or the Borrowers’ stock
ledger. “Cost” does not include inventory capitalization costs or other non-purchase price charges
(other than freight) used in the Borrowers’ calculation of cost of goods sold.



     “Credit Card Notifications” has the meaning provided in Section 6.13(a)(i).



     “Credit Card Receivables” means each “Account” (as defined in the UCC) together with all
income, payments and proceeds thereof, owed by GE Money Bank under the GE Private Label Credit Card
Program, by another Person (approved by the Agent in writing) pursuant to a private label credit
card program approved by the Agent in writing (such approval to be required with respect to
provisions relating to Liens and payment terms only), by a major credit or debit card issuer
(including, but not limited to, Visa, MasterCard and American Express and such other issuers
approved by the Agent), or by any other Person on account of an alternative payment method (i.e.,
an ACH product) approved by the Agent in writing, to a Loan Party resulting from charges by a
customer of a Loan Party on credit or debit cards issued by such issuer in connection with the sale
of goods by a Loan Party, or services performed by a Loan Party, in each case in the ordinary
course of its business.



     “Credit Card Reserve” shall mean, at any time, an Availability Reserve in an amount equal to
twenty percent (20%) of the Eligible Credit Card Receivables as reported in the most recent
Borrowing Base Certificate delivered to the Agent pursuant to Section 6.02(d).



     “Credit Judgment” means the Agent’s commercially reasonable judgment exercised in good faith
in accordance with customary business practices for comparable asset-based lending transactions in
the retail industry.



     “Credit Party” or “Credit Parties” means (a) individually, (i) each Lender and its Affiliates,
(ii) the Agent, (iii) each beneficiary of each indemnification obligation undertaken by any Loan
Party under any Loan Document, (iv) any other Person to whom Obligations under this Agreement and
other Loan Documents are owing, and (v) the permitted successors and assigns of each of the
foregoing, and (b) collectively, all of the foregoing.



     “Credit Party Expenses” means, without limitation, (a) all reasonable out-of-pocket expenses
incurred by the Agent and its Affiliates, in connection with this Agreement and the other Loan
Documents, including without limitation (i) the reasonable fees, charges and disbursements of (A)
counsel for the Agent, (B) outside consultants for the Agent, (C) appraisers, (D) commercial
finance examinations, and (E) all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of the Obligations, (ii) in connection with (A) the
syndication of the credit facilities provided for herein, (B) the preparation, negotiation,
administration, management, execution and delivery of this Agreement and the other Loan Documents
or any amendments, modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be



-7-









 




consummated), and (C) the enforcement or
protection of its rights in connection with this Agreement or the Loan Documents or efforts to
preserve, protect, collect, or enforce the Collateral, (b) without duplication, the reasonable
fees, charges and disbursements of counsel for the Initial Lenders incurred prior to the Closing
Date in connection with the preparation and negotiation of this Agreement and the other Loan
Documents, and (c) all reasonable out-of-pocket expenses incurred by the Lenders who are not the
Agent or any of its Affiliates after the occurrence and during the continuance of an Event of
Default, provided that such Credit Parties shall be entitled to reimbursement for no more
than one counsel representing all such Credit Parties (absent a conflict of interest in which case
the Credit Parties may engage and be reimbursed for additional counsel).




     “DDA” means each checking, savings or other demand deposit account maintained by any of the
Loan Parties. All funds in each DDA shall be conclusively presumed to be Collateral and proceeds
of Collateral and the Agent and the Lenders shall have no duty to inquire as to the source of the
amounts on deposit in any DDA.



     “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States
or other applicable jurisdictions from time to time in effect and affecting the rights of creditors
generally.



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



     “Default Rate” means an interest rate equal to the interest rate (including any Applicable
Margin) otherwise applicable to the Loans plus 2% per annum.



     “DIP Financing” means with respect to a case under Debtor Relief Laws with respect to any Loan
Party, financing to be provided in good faith by any or all of the Initial Lenders under Section
364 of the Bankruptcy Code or the use of cash collateral with the consent of the Agent acting at
the direction of the Required Lenders under Section 363 of the Bankruptcy Code.



     “DirecTV” means DIRECTV, Inc., a California corporation.



     “DirecTV Agreement” means that certain letter agreement dated July 1, 1999, among DirecTV,
CNBC, Inc., MSNBC Cable, L.L.C., National Broadcasting Company, Inc. and the Lead Borrower, as
amended by that certain letter agreement dated April 13, 2001, that certain letter agreement dated
September 23, 2004, that certain letter agreement dated November 22, 2005, that certain letter
agreement dated August 3, 2007, and that certain letter agreement dated October 22, 2009.



     “DirecTV Security Documents” shall mean, collectively, that certain (i) Mortgage and Security
Agreement and Fixture Financing Statement executed by the Lead Borrower in favor of DirecTV dated
November 22, 2009, as hereafter amended and in effect from time to time subject to the provisions
of Section 7.17(b), and (ii) Mortgage and Security Agreement between Norwell and DirecTV
dated November 22, 2009, as hereafter amended and in effect from time to time.



     “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition
(including but not limited to any sale and leaseback transaction) and any sale, transfer, license
or other disposition of (whether in one transaction or in a series of transactions) of any property
(including, without limitation, any Equity Interests) by any Person (or the granting of any option
or other right to do any of the



-8-









 




foregoing), including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.




     “Disqualified Stock” means any Equity Interest that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable, in each case at the option
of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the
Loans mature; provided, however, that (i) only the portion of such Equity Interests
which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so
redeemable at the option of the holder thereof prior to such date shall be deemed to be
Disqualified Stock and (ii) with respect to any Equity Interests issued to any employee or to any
plan for the benefit of employees of the Lead Borrower or its Subsidiaries or by any such plan to
such employees, such Equity Interest shall not constitute Disqualified Stock solely because it may
be required to be repurchased by the Lead Borrower or one of its Subsidiaries in order to satisfy
applicable statutory or regulatory obligations or as a result of such employee’s termination,
resignation, death or disability and if any class of Equity Interest of such Person that by its
terms authorizes such Person to satisfy its obligations thereunder by delivery of an Equity
Interest that is not Disqualified Stock, such Equity Interests shall not be deemed to be
Disqualified Stock. Notwithstanding the preceding sentence, any Equity Interest that would
constitute Disqualified Stock solely because the holders thereof have the right to require a Loan Party to repurchase such Equity Interest upon the occurrence of a change of
control or an asset sale shall not constitute Disqualified Stock. The amount of Disqualified Stock
deemed to be outstanding at any time for purposes of this Agreement will be the maximum amount that
the Lead Borrower and its Subsidiaries may become obligated to pay upon maturity of, or pursuant to
any mandatory redemption provisions of, such Disqualified Stock or portion thereof, plus accrued
dividends.



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



     “Eligible Assignee” means (a) a Lender or any of its Affiliates; (b) a bank, insurance
company, or company engaged in the business of making commercial loans, which Person, together with
its Affiliates, has a combined capital and surplus in excess of $250,000,000; (c) an Approved Fund;
(d) any Person to whom a Lender assigns its rights and obligations under this Agreement as part of
an assignment and transfer of such Lender’s rights in and to a material portion of such Lender’s
portfolio of asset based credit facilities, and (e) any other Person (other than a natural person)
approved by (i) the Agent, and (ii) unless an Event of Default has occurred and is continuing, the
Lead Borrower (each such approval not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include a Loan Party or any
of the Loan Parties’ Affiliates or Subsidiaries.



     “Eligible Cash” means either (a) cash of a Borrower from time to time deposited in a DDA in
the name of a Loan Party maintained with a Blocked Account Bank which is satisfactory to the Agent,
which DDA is and has continuously been subject to a first-priority, perfected security interest in
favor of the Agent, or (b) such cash equivalents as may be acceptable to the Agent in its
discretion, which cash equivalents are and have continuously been subject to a first-priority
perfected security interest in favor of the Agent.



     “Eligible Consumer Receivables” means Accounts arising under the Value Pay Plan which comply
with each of the covenants, representations and warranties respecting such Accounts made by the
Borrowers in the Loan Documents arising from the sale of the Borrowers’ Inventory (other than those
consisting of Credit Card Receivables) that satisfy the following criteria at the time of creation
and continue to meet the same at all times: such Account (i) has been earned by performance and
represents



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the bona fide amounts due to a Borrower from an account debtor, and in each case
originated in the ordinary course of business of such Borrower, and (ii) is not ineligible for
inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (o)
below. Without limiting the foregoing, to qualify as an Eligible Consumer Receivable, an Account
shall indicate no Person other than a Borrower as payee or remittance party. In determining the
amount to be so included, the face amount of an Account shall be reduced by, without duplication,
to the extent not reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances, price adjustments,
finance charges or other allowances (including any amount that a Borrower may be obligated to
rebate to a customer pursuant to the terms of any agreement or understanding (written or oral)) and
(ii) the aggregate amount of all cash received in respect of such Account but not yet applied by
the Borrowers to reduce the amount of such Eligible Consumer Receivable, provided that any Account
included within any of the following categories shall not constitute an Eligible Consumer
Receivable:





     (a) Accounts that are not evidenced by an invoice (it being understood that this shall
not exclude future Value Pay Plan installments invoiced on the first installment);




     (b) Accounts (i) that are not subject to a perfected first-priority security interest
in favor of the Agent, or (ii) with respect to which a Loan Party does not have good, valid
and marketable title thereto, free and clear of any Lien (other than Liens granted to the
Agent pursuant to the Security Documents);




     (c) Accounts which are disputed or with respect to which a claim, counterclaim, offset
or chargeback has been asserted, but only to the extent of such dispute, counterclaim,
offset or chargeback;




     (d) Accounts which have been classified as counterfeit, canceled or fraudulent or for
which any card issued in connection therewith has been stolen or lost;




     (e) Accounts which arise out of any sale made not in the ordinary course of business
under the Value Pay Plan, or are not payable in Dollars;




     (f) Accounts which, when aggregated with all other Accounts due from the obligor
thereon, exceed the personal credit limit for such obligor established by the Borrowers;




     (g) Accounts which are owed by any account debtor whose principal place of business is
not within the United States or Canada;




     (h) Accounts which are owed by any Affiliate of a Loan Party;




     (i) Accounts due from an account debtor which is the subject of any bankruptcy or
insolvency proceeding, has had a trustee or receiver appointed for all or a substantial part
of its property, has made an assignment for the benefit of creditors or has suspended its
business, but without duplication of any deduction made in the determination of the
Appraised Value of Eligible Consumer Receivables;




     (j) Accounts arising out of sales to account debtors outside the United States or
Canada;



-10-









 






     (k) Accounts for which the related merchandise has been returned, rejected or
repossessed;




     (l) Accounts which include extended payment terms (datings) beyond those generally
furnished to other account debtors in the ordinary course of business under the Value Pay
Plan;




     (m) Accounts which constitute Credit Card Receivables;




     (n) Accounts which have been charged-off;




     (o) Accounts due from GE Money Bank on account of the GE Private Label Credit Card
Program to the extent such Accounts exceed twenty percent (20%) of all Accounts then
outstanding in respect of the Value Pay Plan; or




     (p) Accounts which are, as indicated through the findings of a third party appraiser or
commercial finance examiner reasonably acceptable to the Agent, unacceptable for borrowing;
provided that, to the extent any such Account was previously determined to be acceptable, if
such Account is later deemed to be unacceptable in accordance with the foregoing, unless
Exigent Circumstances then exist, the Agent shall provide the Lead Borrower with at least
one (1) Business Day’s advance written notice prior to the effective date of any such
determination and will be available to discuss the reason for such determination.



     “Eligible Credit Card Receivables” means Credit Card Receivables due to a Borrower on a
non-recourse basis, as arise in the ordinary course of business, which have been earned by
performance, and which comply with each of the covenants, representations and warranties respecting
such Credit Card Receivables made by the Borrowers in the Loan Documents. Without limiting the
foregoing, unless the Required Lenders otherwise agree, none of the following shall be deemed to be
Eligible Credit Card Receivables:




     (a) Accounts due from major credit card processors and major debit card processors that
have been outstanding for more than five (5) Business Days from the date of transmission to
such credit card processors;




     (b) Accounts due from major credit card processors and major debit card processors with
respect to which a Loan Party does not have good, valid and marketable title, free and clear
of any Lien (other than Liens granted to the Agent and, solely with respect to amounts due
from GE Money Bank under the GE Private Label Credit Card Program, Liens in favor of GE
Money Bank thereunder);




     (c) Accounts due from major credit card processors and major debit card processors that
are not subject to a first priority security interest in favor of the Agent (it being the
intent that chargebacks in the ordinary course by the credit card processors shall not be
deemed violative of this clause);




     (d) Accounts due from major credit card processors and major debit card processors
which are disputed, are with recourse, or with respect to which a claim, counterclaim,
offset or chargeback has been asserted (to the extent of such claim, counterclaim, offset or
chargeback);



-11-









 






     (e) Accounts due from major credit card processors as to which the credit card
processor has previously demanded that, or has the then current right (without any further
contingency) to require, a Loan Party to repurchase the Accounts from such credit card
processor;




     (f) Accounts due from any Person on account of any private label credit card program of
a Borrower (excluding the GE Private Label Credit Card Program and any other private label
credit card program approved in writing by the Agent (which approval shall be required with
respect to provisions relating to Liens and payment terms only)); or




     (g) Accounts due from major credit card processors, major debit card processors or from
any other Person by any alternative payment method approved by the Agent in writing which
are, as indicated through the findings of a third party appraiser or commercial finance
examiner reasonably acceptable to the Agent, unacceptable for borrowing; provided that, to
the extent any such Account was previously determined to be acceptable, if such Account is
later deemed to be unacceptable in accordance with the foregoing, unless Exigent
Circumstances then exist, the Agent shall provide the Lead Borrower with at least one (1)
Business Day’s advance written notice prior to the effective date of any such determination
and will be available to discuss the reason for such determination.



     “Eligible Inventory” means, as of the date of determination thereof, without duplication,
items of Inventory of a Borrower that are finished goods, merchantable and readily saleable to the
public in the ordinary course of a Borrower’s business, in each case that, except as otherwise
agreed by the Agent, complies with each of the representations and warranties respecting Inventory
made by the Borrowers in the Loan Documents, and that is not excluded as ineligible by virtue of
one or more of the criteria set forth below. Except as otherwise agreed by the Required Lenders, the following items of
Inventory shall not be included in Eligible Inventory:




     (a) Inventory that is not solely owned by a Borrower or a Borrower does not have good
and valid title thereto;




     (b) Inventory that is leased by or is on consignment to a Borrower or constitutes
samples;




     (c) Inventory that is not located in the United States of America (excluding
territories or possessions of the United States) or is in-transit to a Borrower;




     (d) Inventory at a location that is not owned or leased by a Borrower, except to the
extent that the Borrowers have furnished the Agent with (i) any UCC financing statements or
other documents that the Agent may determine to be necessary to perfect its security
interest in such Inventory at such location, and (ii) a Collateral Access Agreement executed
by the Person owning any such location on terms reasonably acceptable to the Agent;




     (e) Inventory that is located in a distribution center or other location leased by a
Borrower, unless the applicable lessor has delivered to the Agent a Collateral Access
Agreement;




     (f) Inventory that is comprised of goods which (i) are damaged, defective, “seconds,”
or otherwise unmerchantable, (ii) are to be returned to the vendor as evidenced by an issued
return authorization from the vendor, (iii) are obsolete or slow moving (as determined in
accordance with the Borrowers’ business practices in effect on the Closing Date), or custom



-12-









 







items, work-in-process, raw materials, or that constitute labels, bags, spare parts,
promotional, marketing, packaging and shipping materials or supplies used or consumed in a
Borrower’s business, (iv) are not in compliance with all standards imposed by any
Governmental Authority having regulatory authority over such Inventory, its use or sale, (v)
are bill and hold goods, (vi) have been owned by the Borrowers for more than thirteen
months, (vii) constitute melt, no return, RMA drop shipment, scrap, employee, EP outlet,
liquidation or auction (as described in the most recent commercial finance examination
delivered to the Agent) or (viii) are, as indicated through the findings of a third party
appraiser or commercial finance examiner reasonably acceptable to the Agent, unacceptable
for borrowing; provided that, with respect to solely this clause (viii), to the extent any
such Inventory was previously determined to be acceptable, if such Account is later deemed
to be unacceptable in accordance with the foregoing, unless Exigent Circumstances then
exist, the Agent shall provide the Lead Borrower with at least one (1) Business Day’s
advance written notice prior to the effective date of any such determination and will be
available to discuss the reason for such determination;




     (g) Inventory that is not subject to a perfected first-priority security interest in
favor of the Agent;




     (h) Inventory that is not insured in compliance with the provisions of Section
5.10 hereof;




     (i) Inventory that is subject to any licensing, patent, royalty, trademark, trade name
or copyright agreement with any third party from which any Borrower or any of its
Subsidiaries has received notice of a dispute in respect of any such agreement; or




     (j) Inventory located at the Borrowers’ Eden Prairie, Minnesota offices.



     “Eligible Letter of Credit” means an irrevocable standby letter of credit which (i) is issued
for the account of a Borrower in favor of the Agent, for the benefit of the Secured Parties, as
beneficiary, (ii) has a final expiry date of no sooner than one (1) year following the Maturity
Date, (iii) provides for multiple draws, (iv) is issued by a financial institution acceptable to
the Agent in its sole discretion, and (v) is otherwise in form and substance and with terms and
conditions acceptable to the Agent as determined in the Agent’s reasonable discretion.



     “Eligible Real Estate” means the Real Estate located at 4811 Nashville Road, Bowling Green,
Kentucky, and which, except as otherwise agreed by the Required Lenders, satisfies all of the
following conditions:




     (a) A Loan Party owns such Real Estate in fee simple absolute;




     (b) The Agent shall have received evidence that all actions that the Agent may
reasonably deem necessary or appropriate in order to create valid first and subsisting Liens
(subject only to those Liens permitted by Section 7.01 hereof which have priority
over the Lien of the Agent by operation of Applicable Law or otherwise reasonably acceptable
to the Agent) on the property described in the Mortgages has been taken.




     (c) The Agent shall have received an appraisal (based upon Appraised Value) of such
Real Estate complying with the requirements of FIRREA by a third party appraiser



-13-









 







reasonably
acceptable to the Agent and otherwise in form and substance reasonably satisfactory to the
Agent; and




     (d) The Real Estate Eligibility Requirements have been satisfied.



     “Environmental Compliance Reserve” means, with respect to Real Estate, any reserve which the
Agent, from time to time in its Credit Judgment establishes for estimable amounts that are
reasonably likely to be expended by any of the Loan Parties in order for such Loan Party and its
operations and property (a) to comply with any notice from a Governmental Authority asserting
non-compliance with Environmental Laws, or (b) to correct any such non-compliance with
Environmental Laws or to provide for any Environmental Liability.



     “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.



     “Environmental Liability” means any liability, obligation, damage, loss, claim, action, suit,
judgment, order, fine, penalty, fee, expense, or cost, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal or presence of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the foregoing.



     “Equipment” has the meaning set forth in the Security Agreement.



     “Equity Interests” means, with respect to any Person, all of the shares of capital stock of
(or other ownership or profit interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.



     “ERISA” means the Employee Retirement Income Security Act of 1974.



     “ERISA Affiliate” means any trade or business (whether or not incorporated) under common
control with the Lead Borrower within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the
Code).



     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by
the Lead Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a



-14-









 







cessation of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Lead Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Lead
Borrower or any ERISA Affiliate.



     “Event of Default” has the meaning specified in Section 8.01. An Event of Default
shall be deemed to be continuing unless and until that Event of Default has been duly waived in
accordance with the terms hereof.



     “Excess Availability” means the difference between (a) the Borrowing Base, and (b) the Total
Outstandings.



     “Excluded Taxes” means, with respect to the Agent, any Lender, or any other recipient of any
payment to be made by or on account of any obligation of the Borrowers hereunder, (a) taxes imposed
on or measured by its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes
imposed by the United States or any similar tax imposed by any other jurisdiction in which any
Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrowers under Section 10.13), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability
(other than as a result of a Change in Law) to comply with Section 3.01(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation
of a new Lending Office (or assignment), to receive additional amounts from the Borrowers with
respect to such withholding tax pursuant to Section 3.01(a), and (d) any United States
withholding tax imposed by FATCA.



     “Executive Order” has the meaning set forth in Section 10.18.



     “Exigent Circumstances” means an event or circumstance that either (a) could result in a
material deterioration of the value of the Collateral, or (b) could materially and imminently
threaten the ability of the Agent to realize upon all or a material part of the Collateral, such
as, without limitation, fraudulent removal or concealment thereof, destruction (other than to the
extent covered by insurance) or material waste thereof, or (c) could result in a material
impairment of the ability of the Credit Parties to obtain repayment of the Obligations in full in
cash.



     “Existing Credit Agreement” means that certain Revolving Credit and Security Agreement dated
as of November 25, 2009 among the Borrowers, PNC Bank, National Association, as agent, and a
syndicate of lenders.



     “Extraordinary Receipt” means any cash received by or paid to or for the account of any Person
not in the ordinary course of business, pension plan reversions, proceeds of insurance (other than
proceeds of business interruption insurance to the extent such proceeds constitute compensation for
lost



-15-









 




earnings), condemnation awards (and payments in lieu thereof), indemnity payments and any
purchase price adjustments (except to the extent resulting from negotiations with vendors on
account of markdowns in accordance with the Borrowers’ business practices as in effect on the
Closing Date). For the avoidance of doubt, such term shall not include any cash received by or
paid to or for the account of any Person in respect of the issuance of Equity Interests in the Lead
Borrower.




     “Facility Guaranty” means any guaranty of the Obligations made by a Guarantor in favor of the
Agent and the Lenders, in form reasonably satisfactory to the Agent.



     “Fanbuzz” shall mean Fanbuzz, Inc., a Delaware corporation.



     “Fanbuzz Retail” shall mean Fanbuzz Retail, Inc., a Delaware corporation.



     “FATCA” means Sections 1471 through 1474 of the Code and any regulations or official
interpretations thereof.



     “FCC” means the Federal Communications Commission or any other successor Governmental
Authority administering the Communications Act.



     “FCC License” means any license, authorization or permit issued by the FCC or any other
Governmental Authority in connection with the operation of a Loan Party’s or its Subsidiaries’
business.



     “Federal Funds Rate" means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%), as
determined by the Agent, charged to such reference bank(s) as the Agent may determine on such day
on such transactions.



     “Fee Letter” means the letter agreement, dated November 17, 2010, among the Borrowers and the
Agent.



     “FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as
amended from time to time.



     “Fiscal Month” means any fiscal month of any Fiscal Year, in accordance with the fiscal
accounting calendar of the Loan Parties attached hereto as Schedule 1.02.



     “Fiscal Year” means any period of 52 or 53 weeks ending on the Saturday nearest to January
31st of any calendar year, in accordance with the fiscal accounting calendar of the Loan
Parties attached hereto as Schedule 1.02.



     “Foreign Assets Control Regulations” has the meaning set forth in Section 10.18.



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     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other
than that in which the Lead Borrower is resident for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.



     “FRB” means the Board of Governors of the Federal Reserve System of the United States.



     “Fund” means any Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its business.



     “GAAP” means generally accepted accounting principles in the United States set forth in the
opinions and pronouncements of the Accounting Principles Board, and the American Institute of
Certified Public Accountants, SEC rules and regulations, and statements and pronouncements of the
Financial Accounting Standards Board or such other principles as may be approved by a significant
segment of the accounting profession in the United States, that are applicable to the circumstances
as of the date of determination, consistently applied.



     “GE Private Label Credit Card Program” means the private label credit card program maintained
by the Lead Borrower and certain other Loan Parties with GE Money Bank, as evidenced by that
certain Private Label Credit Card and Co-Brand Credit Card Consumer Program Agreement dated as of
September 20, 2006, as amended by that certain First Amendment to Private Label Consumer Credit
Card Program Agreement dated as of December 23, 2009.



     “Governmental Authority” means the government of the United States or any other nation, or of
any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central
Bank).



     “Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, or (iv) entered into for the purpose of assuring in any other manner the
obligee in respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b)
any Lien on any assets of such Person securing any Indebtedness or other obligation of any other
Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any
right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The
amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount
of the related primary obligation, or portion thereof, in respect of which such Guarantee is made
or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.



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     “Guarantor” means any Person who may hereafter guarantee payment or performance of any of the
Obligations, including pursuant to Section 6.12.



     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



     “Inactive Subsidiaries” means each of Iosota, Fanbuzz and Fanbuzz Retail.



     “Indebtedness” means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance with GAAP:




     (a) all obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;




     (b) the maximum amount of all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;




     (c) net obligations of such Person under any Swap Contract;




     (d) indebtedness (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising under conditional
sales or other title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;




     (e) all Attributable Indebtedness in respect of Capital Lease Obligations of such
Person;




     (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other Person
(including, without limitation, Disqualified Stock), or any warrant, right or option to
acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and




     (g) all Guarantees of such Person in respect of any of the foregoing.



     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Indemnitees” has the meaning specified in Section 10.04(b).



     “Information” has the meaning specified in Section 10.07.



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     “Initial Lenders” means Crystal Financial LLC and Regiment Capital Special Situations Fund IV,
L.P.



     “Intellectual Property” means all present and future: trade secrets, know-how and other
proprietary information; trademarks, trademark applications, internet domain names, service marks,
trade dress, trade names, business names, designs, logos, slogans (and all translations,
adaptations, derivations and combinations of the foregoing) indicia and other source and/or
business identifiers, and all registrations or applications for registrations which have heretofore
been or may hereafter be issued thereon throughout the world; copyrights and copyright
applications; (including copyrights for computer programs) and all tangible and intangible property
embodying the copyrights, unpatented inventions (whether or not patentable); patents and patent
applications; industrial design applications and registered industrial designs; license agreements
related to any of the foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes, object codes,
executable code, data, databases and other physical manifestations, embodiments or incorporations
of any of the foregoing; all other intellectual property; and all common law and other rights
throughout the world in and to all of the foregoing.



     “Interest Payment Date” means, as to any Loan, the first day of each month and the Maturity
Date.



     “Interest Period” means, as to each Loan, the period commencing on the first Business Day of
each calendar month and ending on the day immediately preceding the first Business Day on the
following calendar month, provided that no Interest Period shall extend beyond the Maturity
Date.



     “Internal Control Event” means a material weakness in, or fraud that involves management or
other employees who have a significant role in, the Lead Borrower’s and/or its Subsidiaries’
internal controls over financial reporting.



     “Inventory” has the meaning given that term in the UCC, and shall also include,
without limitation, all: (a) goods which (i) are leased by a Person as lessor, (ii) are held by a
Person for sale or lease or to be furnished under a contract of service, (iii) are furnished by a
Person under a contract of service, or (iv) consist of raw materials, work in process, or materials
used or consumed in a business; (b) goods of said description in transit; (c) goods of said
description which are returned, repossessed or rejected; and (d) packaging, advertising, and
shipping materials related to any of the foregoing.



     “Inventory Reserves” means, without duplication of any other Reserves or items to the extent
such items are otherwise addressed or excluded through eligibility criteria, subject to the
provisions of Section 2.01(b), such reserves as the Agent from time to time reasonably
determines in its Credit Judgment as being appropriate with respect to the determination of the
saleability, at retail, of the Eligible Inventory or which reflect such other factors as affect the
market value of the Eligible Inventory; provided that in all events, irrespective of the
provisions of Section 2.01(b), the Agent may implement such Inventory Reserves as the Agent
from time to time reasonably determines in its Credit Judgment based on the following, to the extent inconsistent with, or not adequately accounted for under, the
most recent appraisal, commercial finance examination, Borrowing Base Certificates, financial
reporting or other similar report provided to the Agent in accordance with the terms hereof:




     (a) seasonality;




     (b) shrinkage;




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          (c) change in Inventory composition; and




          (d) change in Inventory mix.




     “Investment” means, as to any Person, any direct or indirect acquisition or investment by such
Person, whether by means of (a) the purchase or other acquisition Equity Interests or substantially
all of the assets of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or interest in, another
Person, or (c) any other investment of money or capital in order to obtain a profitable return.



     “Iosota” shall mean Iosota, Inc., a Delaware corporation.



     “IRS” means the United States Internal Revenue Service.



     “Joinder Agreement” means an agreement, in form satisfactory to the Agent pursuant to which,
among other things, a Person becomes a party to, and bound by the terms of, this Agreement and/or
the other Loan Documents in the same capacity and to the same extent as either a Borrower or a
Guarantor, as the Agent may determine.



     “Laws” means each international, foreign, Federal, state and local statute, treaty, rule,
guideline, regulation, ordinance, code and administrative or judicial precedent or authority,
including the interpretation or administration thereof by any Governmental Authority charged with
the enforcement, interpretation or administration thereof, and each applicable administrative
order, directed duty, request, license, authorization and permit of, and agreement with, any
Governmental Authority, in each case whether or not having the force of law.



     “Lease” means any agreement, whether written or oral, no matter how styled or structured,
pursuant to which a Loan Party is entitled to the use or occupancy of any space in a structure,
land, improvements or premises for any period of time.



     “Lender” means each Person having a Term Commitment as set forth on Schedule 2.01
hereto or in the Assignment and Acceptance by which such Person becomes a Lender, or after the
making of the Loan, each Lender holding any portion of the Loan.



     “Lending Office” means, as to any Lender, the office or offices of such Lender described as
such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may
from time to time notify the Lead Borrower and the Agent.



     “LIBO Rate” means the rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) published in the “Money Rates” section of The Wall Street Journal as the as
the London interbank offered rate for deposits in Dollars on the first Business Day of each
calendar month (or, if more than one rate is published, then the highest of such rates) for a term
of one month, or if such “Money Rates” section is unavailable for any reason on such date, the rate
which appears on the Reuters Screen ISDA Page as of such date at approximately 11:00 a.m. (London,
England time); provided that, if the Agent determines that the relevant foregoing
sources are unavailable, “LIBO Rate” shall mean the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the nearest 1/100th of 1%) of the rates per annum at
which deposits in U.S. dollars are offered to the Agent by leading banks in the London interbank
market as of 10:00 a.m., on the first Business Day of each calendar month for a one month term and
in an amount comparable to the amount of the applicable Loan.



-20-









 





     “Lien” means (a) any mortgage, deed of trust, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other
security interest or preferential arrangement in the nature of a security interest of any kind or
nature whatsoever (including any conditional sale, Capital Lease Obligation, or other title
retention agreement, any easement, right of way or other encumbrance on title to real property, and
any financing lease having substantially the same economic effect as any of the foregoing) and (b)
in the case of securities, any purchase option, call or similar right of a third party with respect
to such securities.



     “Liquidation” means the exercise by the Agent of those rights and remedies accorded to the
Agent under the Loan Documents and applicable Law as a creditor of the Loan Parties with respect to
the realization on the Collateral, including (after the occurrence and continuation of an Event of
Default) the conduct by the Loan Parties acting with the consent of the Agent, of any public,
private or other similar sale or any other disposition of the Collateral for the purpose of
liquidating the Collateral. Derivations of the word “Liquidation” (such as “Liquidate”) are used
with like meaning in this Agreement.



     “Loan” means an extension of credit by a Lender to the Borrowers under Article II.



     “Loan Account” has the meaning assigned to such term in Section 2.06.



     “Loan Documents” means this Agreement, each Note, the Fee Letter, all Borrowing Base
Certificates, the Blocked Account Agreements, the Credit Card Notifications, the Security
Documents, the Eligible Letter of Credit, the Facility Guaranty, and any other instrument or
agreement now or hereafter executed and delivered in connection herewith, each as amended and in
effect from time to time.



     “Loan Parties” means, collectively, the Borrowers and each Guarantor.



     “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect
upon, the operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of any Loan Party or the Lead Borrower and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of any Loan Party to perform any of its
obligations under any Loan Document to which it is a party; (c) a material impairment of the rights
and remedies of, or benefits available to, the Agent or the Lenders under any Loan Document or a
material adverse effect upon the legality, validity, binding effect or enforceability against any
Loan Party of any Loan Document to which it is a party; or (d) a material adverse change in, or a
material adverse effect upon, the Collateral (including, without limitation, on the realizable
value thereof and impediments to the ability to realize upon the Collateral). In determining
whether any individual event would result in a Material Adverse Effect, notwithstanding that such
event in and of itself does not have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event and all other then existing events would result in
a Material Adverse Effect.



     “Material Indebtedness” means any Indebtedness (other than the Obligations) of the Loan
Parties in an aggregate principal amount exceeding $1,000,000; provided that, in all events
all Indebtedness owing under the DirecTV Agreement shall constitute Material Indebtedness. For
purposes of determining the amount of Material Indebtedness at any time, (a) the amount of the
obligations in respect of any Swap Contract at such time shall be calculated at the Swap
Termination Value thereof, (b) undrawn committed or available amounts shall be included, and (c)
all amounts owing to all creditors under any combined or syndicated credit arrangement shall be
included.



     “Maturity Date” means November 17, 2015.



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     “Maximum Rate” has the meaning provided therefor in Section 10.09.



     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.



     “Mortgages” mean each and every fee and leasehold mortgage or deed of trust, security
agreement and assignment by and between the Loan Party owning or holding the interest in the Real
Estate encumbered thereby in favor of the Agent.



     “Mortgage Policy” has the meaning specified in the definition of Real Estate Eligibility
Requirements.



     “MSO” means multi-system operator.



     “MSO Contracts” means a contract between any of the Loan Parties and a MSO.



     “Multiemployer Plan” means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which the Lead Borrower or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been obligated to make
contributions.



     “Net Proceeds” means (a) with respect to any Disposition by any Loan Party or any of its
Subsidiaries, or any tax refund, or any Extraordinary Receipt received or paid to the account of
any Loan Party or any of its Subsidiaries, the excess, if any, of (i) the sum of cash and cash
equivalents received in connection with such transaction (including any cash or cash equivalents
received by way of deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by the applicable asset by a Lien permitted hereunder which is senior
to the Agent’s Lien on such asset and that is required to be repaid (or to establish an escrow for
the future repayment thereof) in connection with such transaction (other than Indebtedness under
the Loan Documents), (B) the reasonable and customary out-of-pocket expenses incurred by such Loan
Party or such Subsidiary in connection with such transaction (including, without limitation,
appraisals, and brokerage, legal, title and recording or transfer tax expenses and commissions paid
by any Loan Party to third parties (other than Affiliates)); and



     (b) with respect to the incurrence or issuance of any Indebtedness by any Loan Party or any of
its Subsidiaries, the excess of (i) the sum of the cash and cash equivalents received in connection
with such transaction over (ii) the underwriting discounts and commissions, and other reasonable
and customary out-of-pocket expenses, incurred by such Loan Party or such Subsidiary in connection
therewith.



     “Non-Consenting Lender” means any Lender which does not consent to a proposed course of
action; provided that, any Lender which does not provide its consent within seven (7)
Business Days from receipt of written notice to such Lender from the Agent of a proposed course of
action to be followed by the Agent, shall be deemed to be a Non-Consenting Lender.



     “Norwell” means Norwell Television, LLC, a Delaware limited liability company.



     “Note” means a promissory note made by the Borrower in favor of a Lender evidencing a Loan
made by such Lender, substantially in the form of Exhibit A, as may be amended,
supplemented or modified from time to time.



-22-









 





     “NPL” means the National Priorities List under CERCLA.



     “Obligations” means all loans, advances to, and debts (including principal, interest
(including, without limitation, Term Loan PIK Interest), fees, costs, and expenses), liabilities,
obligations, covenants,
indemnities, and duties of, any Loan Party arising under any Loan Document or otherwise with
respect to any Loan (including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral therefor), whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest, fees, costs, expenses and indemnities that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any
Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such
interest ,fees, costs, expenses and indemnities are allowed claims in such proceeding.



     “Organization Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with
respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; (c) with respect to
any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity, and (d) in
each case, all shareholder or other equity holder agreements, voting trusts and similar
arrangements to which such Person is a party or which is applicable to its Equity Interests and all
other arrangements relating to the Control or management of such Person.



     “Other Taxes” means all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made hereunder or under any
other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect
to, this Agreement or any other Loan Document.



     “Outstanding Amount” means, on any date, the aggregate outstanding principal amount of the
Loans after giving effect to any capitalization of Term Loan PIK Interest, and prepayments or
repayments of the Loans occurring on such date.



     “Participant” has the meaning specified in Section 10.06(d).



     “PBGC” means the Pension Benefit Guaranty Corporation.



     “PCAOB” means the Public Company Accounting Oversight Board.



     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section
3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is
sponsored or maintained by any Borrower or any ERISA Affiliate or to which such Borrower or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.



     “Permitted Disposition” means any of the following:



-23-









 






     (a) dispositions of inventory in the ordinary course of business;




     (b) dispositions of Equipment in the ordinary course of business that is substantially
worn, damaged, obsolete or, in the judgment of a Loan Party, no longer useful or necessary
in its business or that of any Subsidiary;




     (c) so long as no Default then exists or would result therefrom, (i) Dispositions of
property (other than any assets then included in the Borrowing Base, including, without
limitation, Eligible Real Estate) for consideration not more than $2,000,000 in the
aggregate in any calendar year, and (ii) Dispositions of Real Estate which does not
constitute Eligible Real Estate; and




     (d) sales, transfers and dispositions among the Loan Parties or by any Subsidiary to a
Loan Party.




     “Permitted Encumbrances” means:




     (a) Liens imposed by law for Taxes that are not yet due or are being contested in
compliance with Section 6.04;




     (b) Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like
Liens imposed by applicable Law, arising in the ordinary course of business and securing
obligations that are not overdue or are being contested in compliance with Section
6.04;




     (c) Pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or regulations,
other than any Lien imposed by ERISA;




     (d) Deposits to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;




     (e) Liens in respect of judgments that would not constitute an Event of Default
hereunder;




     (f) Easements, covenants, conditions, restrictions, building code laws, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary obligations and
do not materially detract from the value of the affected property or materially interfere
with the ordinary conduct of business of a Loan Party and such other minor title defects or
survey matters that are disclosed by current surveys that, in each case, do not materially
interfere with the current use of the real property;




     (g) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby is
not changed, (ii) the amount secured or benefited thereby is not increased, (iii) the direct
or any contingent obligor with respect thereto is not changed, and (iv) any renewal or
extension of the obligations secured or benefited thereby is otherwise permitted hereunder;



-24-









 






     (h) Liens on fixed or capital assets acquired by any Loan Party which are permitted
under clause (c) of the definition of Permitted Indebtedness so long as (i) such Liens and
the Indebtedness secured thereby are incurred prior to or within ninety (90) days after such
acquisition, (ii) the Indebtedness secured thereby does not exceed the cost of acquisition
of such fixed or capital assets and (iii) such Liens shall not extend to any other property
or assets of the Loan Parties;




     (i) Liens in favor the Agent;




     (j) Landlords’ and lessors’ statutory Liens in respect of rent not in default;




     (k) Liens arising solely by virtue of any statutory or common law provisions relating
to banker’s liens, rights of setoff or similar rights and remedies as to deposit accounts or
other funds maintained with depository institutions;




     (l) Liens arising from precautionary UCC filings regarding “true” operating leases or,
to the extent permitted under the Loan Documents, the consignment of goods to a Loan Party;




     (m) Liens in favor of customs and revenues authorities imposed by applicable Law
arising in the ordinary course of business in connection with the importation of goods and
securing obligations that are being contested in good faith by appropriate proceedings, (B)
the applicable Loan Party or Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (C) such contest effectively suspends collection
of the contested obligation and enforcement of any Lien securing such obligation;




     (n) Liens granted to DirecTV pursuant to the DirecTV Security Documents, solely to the
extent such Liens are in effect as of the Closing Date; and




     (o) encumbrances referred to in Schedule B of the Mortgage Policies insuring the
Mortgages and any encumbrances identified in any schedule to any of the Mortgages; and




     (p) Liens securing Indebtedness permitted by clauses (h) and (i) of the definition of
Permitted Indebtedness.



     “Permitted Holder” means (i) each of GE Capital Equity Investments, Inc., NBC Universal, Inc.,
their successors in interest and their permitted transferees under the Shareholder Agreement (as in
effect as of the Closing Date), including, without limitation, any “Restricted Party” (as defined
in the Shareholder Agreement (as in effect as of the Closing Date)); or (ii) one (or more than one
acting together as a group) United States headquartered, reputable and nationally-recognized
strategic or financial investors approved by the Required Lenders (such approval not to be
unreasonably withheld) and each having a market capitalization or assets under management of One
Billion Dollars ($1,000,000,000) or more at the time of the investment that invests new equity
capital into the Lead Borrower through a direct issuance by the Lead Borrower of Equity Interests
in a single transaction on or prior to July 31, 2012.



     “Permitted Indebtedness” means each of the following as long as no Default or Event of Default
exists or would arise from the incurrence thereof:




     (a) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and
any refinancings, refundings, renewals or extensions thereof; provided that (i) the
amount of such



-25-









 







Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to a reasonable premium or other reasonable
amount paid, and fees and expenses reasonably incurred, in connection with such refinancing
and by an amount equal to any existing commitments unutilized thereunder, and the direct or
contingent obligor with respect thereto is not changed as a result of or in connection with
such refinancing, refunding, renewal or extension, (ii) the result of such extension,
renewal or replacement shall not be an earlier maturity date or decreased weighted average
life of such Indebtedness, and (iii) the terms relating to principal amount, amortization,
maturity, collateral (if any) and subordination (if any), and other material terms taken as
a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any
agreement entered into and of any instrument issued in connection therewith, are no less
favorable in any material respect to the Loan Parties or the Lenders than the
terms of any agreement or instrument governing the Indebtedness being refinanced,
refunded, renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending Indebtedness does not exceed the then applicable market
interest rate;




     (b) Indebtedness of any Loan Party to any other Loan Party;




     (c) Purchase money Indebtedness of any Loan Party to finance the acquisition of any
fixed or capital assets, including Capital Lease Obligations, and any Indebtedness assumed
in connection with the acquisition of any such assets or secured by a Lien on any such
assets prior to the acquisition thereof, and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount thereof or result in
an earlier maturity date or decreased weighted average life thereof provided that the terms
relating to principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing, refunding,
renewing or extending Indebtedness, and of any agreement entered into and of any instrument
issued in connection therewith, are no less favorable in any material respect to the Loan
Parties or the Lenders than the terms of any agreement or instrument governing the
Indebtedness being refinanced, refunded, renewed or extended and the interest rate
applicable to any such refinancing, refunding, renewing or extending Indebtedness does not
exceed the then applicable market interest rate, provided, however, that the
aggregate principal amount of Indebtedness permitted by this clause (c) shall not exceed
$1,000,000 at any time outstanding and further provided that, if requested by the
Agent, the Loan Parties shall cause the holders of such Indebtedness to enter into a
Collateral Access Agreement on terms reasonably satisfactory to the Agent;




     (d) obligations (contingent or otherwise) of any Loan Party or any Subsidiary thereof
existing or arising under any Swap Contract, provided that such obligations are (or
were) entered into by such Person in the ordinary course of business for the purpose of
directly mitigating risks associated with fluctuations in interest rates or foreign exchange
rates, and not for purposes of speculation or taking a “market view;”




     (e) the Obligations;




     (f) Indebtedness owed to DirecTV under the DirecTV Agreement and DirecTV Security
Documents, and Indebtedness arising in the ordinary course of business owed to other cable
or satellite television providers;




     (g) any Subordinated Indebtedness;



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     (h) Indebtedness for reimbursement obligations related to (i) a standby letter of
credit for the benefit of CIT Group for credit enhancement and secured by cash collateral of
the Lead Borrower; (ii) a cash collateral account securing Lead Borrower’s Obligations under
its corporate policy and travel credit card programs; and (iii) a cash collateral account as
security for obligations owed to Rosenthal & Rosenthal, Inc.; provided that the maximum
aggregate Indebtedness outstanding under the foregoing clauses (i) through (iii) shall not
exceed the aggregate amount of such Indebtedness outstanding on the Closing Date plus
$2,000,000;




     (i) Indebtedness for reimbursement obligations related to commercial letters of credit
issued by Bank of America, N.A. or any other issuer and secured by cash collateral of the
Lead Borrower and other letters of credit not described in clause (h) above in an aggregate
amount for all of the letters of credit described in this clause (i) not to exceed (i)
$15,000,000
from the Closing Date through the second anniversary of the Closing Date, and (ii)
$20,000,000 thereafter; and




     (j) other Indebtedness not to exceed $500,000 in the aggregate at any time outstanding.



     “Permitted Investments” means each of the following as long as no Default or Event of Default
exists at the time of the making of such Investment or would arise therefrom:




     (a) readily marketable obligations issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof having maturities
of not more than 360 days from the date of acquisition thereof; provided that the
full faith and credit of the United States of America is pledged in support thereof;




     (b) commercial paper issued by any Person organized under the laws of any state of the
United States of America and rated at least “Prime-1” (or the then equivalent grade) by
Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with
maturities of not more than 180 days from the date of acquisition thereof;




     (c) time deposits with, or insured certificates of deposit or bankers’ acceptances of,
any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the
United States of America, any state thereof or the District of Columbia or is the principal
banking subsidiary of a bank holding company organized under the laws of the United States
of America, any state thereof or the District of Columbia, and is a member of the Federal
Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as
described in clause (c) of this definition and (iii) has combined capital and surplus of at
least $1,000,000,000, in each case with maturities of not more than 365 days from the date
of acquisition thereof, including without limitation, Investments in cash collateral
accounts held in certificates of deposit identified in clause (h) of the definition of
“Permitted Indebtedness”;




     (d) Fully collateralized repurchase agreements with a term of not more than thirty (30)
days for securities described in clause (a) above (without regard to the limitation on
maturity contained in such clause) and entered into with a financial institution satisfying
the criteria described in clause (c) above or with any primary dealer and having a market
value at the time that such repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such counterparty entity with whom such repurchase agreement
has been entered into;



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     (e) Investments, classified in accordance with GAAP as current assets of the Loan
Parties, in any money market fund, mutual fund, or other investment companies that are
registered under the Investment Company Act of 1940, as amended, which are administered by
financial institutions that have the highest rating obtainable from either Moody’s or S&P,
and which invest solely in one or more of the types of securities described in clauses (a)
through (d) above;




     (f) Investments existing on the Closing Date, and set forth on Schedule 7.02,
but not any increase in the amount thereof or any other modification of the terms thereof;




     (g) (i) Investments by any Loan Party and its Subsidiaries in their respective
Subsidiaries outstanding on the date hereof, and (ii) additional Investments by any Loan
Party and its Subsidiaries in Loan Parties;




     (h) Investments consisting of extensions of credit in the nature of accounts receivable
or notes receivable arising from the grant of trade credit in the ordinary course of
business, and Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;




     (i) Guarantees constituting Permitted Indebtedness;




     (j) Investments by any Loan Party in Swap Contracts entered into in the ordinary course
of business and for bona fide business (and not speculative purposes) to protect against
fluctuations in interest rates in respect of the Obligations;




     (k) Investments received in connection with the bankruptcy or reorganization of, or
settlement of delinquent accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business; and




     (l) other Investments not to exceed $2,000,000 in the aggregate from the Closing Date
to the first anniversary of the Closing Date; thereafter, other Investments not to exceed
$5,000,000 in the aggregate as long as (i) after giving pro forma effect thereto, Excess
Availability was no less than $10,000,000 at any time during the 45 day period prior to
making such Investment, and (ii) after giving pro forma effect thereto, Excess Availability
is no less than $10,000,000 and is projected to be no less than $10,000,000 at any time
during the 45 day period subsequent to making such Investment;


provided that, notwithstanding the foregoing, no such Investments of the type specified in
clauses (a) — (f), (j) and (l) shall be permitted unless such Investments are pledged to the Agent
as Collateral pursuant to such agreements as may be reasonably required by the Agent,
provided, further, that regardless of whether the conditions set forth in clause
(l) above have been met, under no circumstances shall any Investment in Norwell constitute a
“Permitted Investment” hereunder, other than any Investment in Norwell outstanding on the date
hereof.




     “Person” means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, limited partnership, Governmental Authority or other
entity.



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     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA)
established by the Lead Borrower or, with respect to any such plan that is subject to Section 412
of the Code or Title IV of ERISA, any ERISA Affiliate.



     “Prepayment Event” means:




     (a) (i) any Disposition (including pursuant to a sale and leaseback transaction) of any
property or asset of a Loan Party, other than, except as set forth in clause (ii) below, any
Permitted Disposition, and (ii) if an Event of Default is then continuing and the Agent has
provided notices to Blocked Account Banks in accordance with Section 6.13(c), any
Permitted Disposition (including pursuant to a sale and leaseback transaction) of any
property or asset of a Loan Party;




     (b) Any casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any property or asset of a Loan Party
(other than proceeds of business interruption insurance to the extent such proceeds
constitute compensation for lost earnings), unless (i) the proceeds therefrom are required
to be paid to the holder of a Lien on such property or asset having priority over the Lien
of the Agent, or (ii) the
Lead Borrower gives the Agent notice of Borrowers’ intention to apply such proceeds to
the costs of replacement of the properties or assets subject to the casualty or other
insured damage within 15 days after the receipt of such proceeds, and such proceeds are held
in a segregated account pledged to the Agent as Collateral and such proceeds are used for
such purpose within 180 days after receipt by the applicable Loan Party; provided
that, so long as no Default then exists, only such events in excess of $250,000 in any
calendar year shall be included under this clause (b);




     (c) The incurrence by a Loan Party of any Indebtedness for borrowed money (other than
Permitted Indebtedness);




     (d) The receipt by any Loan Party of any tax refunds; provided that, so long as
no Default then exists, only tax refunds in excess of $1,000,000 in any calendar year shall
be included under this clause (d); or




     (e) The receipt by any Loan Party of any Extraordinary Receipts of a kind not described
in clauses (a) through (d) above; provided that, so long as no Default then exists,
only Extraordinary Receipts in excess of $1,000,000 in any calendar year shall be included
under this clause (e).




     “Protective Advance” means an advance made by the Agent, in its discretion, which:




     (a) Is made to maintain, protect or preserve the Collateral and/or the Credit Parties’
rights under the Loan Documents or which is otherwise for the benefit of the Credit Parties;
or




     (b) Is made to enhance the likelihood of, or to maximize the amount of, repayment of
any Obligation; and




     (c) Is made to pay any other amount chargeable to any Loan Party hereunder.



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     “Real Estate” means all Leases and all land, together with the buildings, structures, parking
areas, and other improvements thereon, now or hereafter owned by any Loan Party, including all
easements, rights-of-way, and similar rights relating thereto and all leases, tenancies, and
occupancies thereof.



     “Real Estate Eligibility Requirements” means collectively, each of the following:




     (a) The applicable Loan Party has executed and delivered to the Agent a Mortgage with
respect to any Real Estate intended, by such Loan Party, to be included in Eligible Real
Estate;




     (b) Such Real Estate is used by a Loan Party for offices or a distribution center;




     (c) As to any particular property, the Loan Party is in compliance in all material
respects with the representations, warranties and covenants set forth in the Mortgage
relating to such Real Estate;




     (d) The Agent shall have received fully paid American Land Title Association Lender’s
Extended Coverage title insurance policies or marked-up title insurance commitments having
the effect of a policy of title insurance or pursuant to which such title company is
irrevocably committed to issuing the applicable title insurance policy (the “Mortgage
Policies”) in form and substance, with the endorsements reasonably required by the Agent
(to the extent available at commercially reasonable rates) and in amounts reasonably
acceptable to the Agent
(provided that such amounts shall not exceed the Appraised Value of the applicable
Mortgaged Property), issued, coinsured and reinsured (to the extent required by the Agent)
by title insurers reasonably acceptable to the Agent, insuring the Mortgages to be valid
first and subsisting Liens on the property or leasehold interests described therein, free
and clear of all defects (including, but not limited to, mechanics’ and materialmen’s Liens)
and encumbrances, excepting only those Liens permitted by Section 7.01 having
priority over the Lien of the Agent under applicable Law or otherwise reasonably acceptable
to the Agent;




     (e) With respect to any Real Estate owned by a Borrower or any other Loan Party
(excluding interests as lessee under a Lease) which is intended by such Borrower or such
other Loan Party to be included in Eligible Real Estate, the Agent shall have received
American Land Title Association/American Congress on Surveying and Mapping form surveys, for
which all necessary fees (where applicable) have been paid, certified to the Agent and the
issuer of the Mortgage Policies in a manner reasonably satisfactory to the Agent by a land
surveyor duly registered and licensed in the states in which the property described in such
surveys is located and reasonably acceptable to the Agent, showing all buildings and other
improvements, the location of any easements, parking spaces, rights of way, building
set-back lines and other dimensional regulations and the absence of encroachments, either by
such improvements or on to such property, and other defects, other than encroachments and
other defects reasonably acceptable to the Agent;




     (f) With respect to any Real Estate intended by any Borrower or other Loan Party to be
included in Eligible Real Estate, the Agent shall have received a Phase I Environmental Site
Assessment in accordance with ASTM Standard E1527-05, in form and substance reasonably
satisfactory to the Agent, from an environmental consulting firm reasonably acceptable to
the Agent (it being understood that the Phase I Environmental Site Assessment dated as of
December 4, 1996 conducted by Key Environmental is satisfactory to the Agent), which report
shall identify



-30-









 







recognized environmental conditions and shall to the extent possible quantify
any related costs and liabilities, associated with such conditions and the Agent shall be
satisfied with the nature and amount of any such matters. The Agent may, upon the receipt of
a Phase I Environmental Site Assessment require the delivery of further environmental
assessments or reports to the extent such further assessments or reports are recommended in
the Phase I Environmental Site Assessment;




     (g) The applicable Loan Party shall have delivered to the Agent evidence of flood
insurance naming the Agent as mortgagee as may be required by the National Flood Insurance
Program as set forth in the Flood Disaster Protection Act of 1973, as amended and in effect,
which shall be reasonably satisfactory in form and substance to the Agent; and




     (h) The applicable Loan Party shall have delivered such other information and documents
as may be reasonably requested by the Agent, including, without limitation, such as may be
necessary to comply with FIRREA.



     “Realty Reserves” means, without duplication of any other Reserves or items to the extent such
items are otherwise addressed or excluded through eligibility criteria, subject to the provisions
of Section 2.01(b), such reserves as the Agent from time to time determines in the Agent’s
Credit Judgment as being appropriate to reflect the impediments to the Agent’s ability to realize
upon any Eligible Real Estate; provided that in all events, irrespective of the provisions
of Section 2.01(b), the Agent may implement such Realty Reserves as the Agent from time to
time reasonably determines in its Credit Judgment based on the following, to the extent
inconsistent with, or not adequately accounted for under, the most recent
appraisal, commercial finance examination, Borrowing Base Certificates, financial reporting or
other similar report provided to the Agent in accordance with the terms hereof:




     (a) Environmental Compliance Reserves;




     (b) reserves for (i) municipal taxes and assessments, (ii) repairs and replacements,
and (iii) remediation of title defects; and




     (c) reserves for Indebtedness secured by Liens having priority over the Lien of the
Agent.



     “Receivables Reserves” means, without duplication of any other Reserves or items to the extent
such items are otherwise addressed or excluded through eligibility criteria, subject to the
provisions of Section 2.01(b), such reserves as the Agent from time to time determines in
its Credit Judgment as being appropriate with respect to the determination of the collectability in
the ordinary course of Eligible Consumer Receivables and Eligible Credit Card Receivables;
provided that in all events, irrespective of the provisions of Section 2.01(b), the
Agent may implement such Receivables Reserves as the Agent from time to time reasonably determines
in its Credit Judgment based on the following, to the extent inconsistent with, or not adequately
accounted for under, the most recent appraisal, commercial finance examination, Borrowing Base
Certificates, financial reporting or other similar report provided to the Agent in accordance with
the terms hereof:




     (a) a change in applicable Law that makes the collectability of the applicable Account
uncertain;




     (b) a material increase in return rates;



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     (c) a material increase in charge offs or delinquency;




     (d) a material increase in the average account installment term;




     (e) a material change in the credit approval or underwriting guidelines; and




     (f) a material decrease in Average FICO Scores.



     “Register” has the meaning specified in Section 10.06(c).



     “Registered Public Accounting Firm” has the meaning specified by the Securities Laws and shall
be independent of the Lead Borrower and its Subsidiaries as prescribed by the Securities Laws.



     “Related Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.



     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than
events for which the 30 day notice period has been waived.



     “Reports” has the meaning provided in Section 9.12(a).



     “Required Lenders” means, as of any date of determination, at least two (2) Lenders holding
more than 50% in the aggregate of the Total Outstandings.



     “Reserves” means all (if any) Inventory Reserves, Availability Reserves, Realty Reserves, and
Receivables Reserves.



     “Responsible Officer” means the chief executive officer, president, chief financial officer,
or corporate controller of a Loan Party or any of the other individuals designated in writing to
the Agent by an existing Responsible Officer of a Loan Party as an authorized signatory of any
certificate or other document to be delivered hereunder. Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such
Loan Party.



     “Restricted Payment” means any dividend or other distribution (whether in cash, securities or
other property) with respect to any capital stock or other Equity Interest of any Person or any of
its Subsidiaries, or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on
account of any return of capital to such Person’s stockholders, partners or members (or the
equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or
other distribution or payment. Without limiting the foregoing, “Restricted Payments” with respect
to any Person shall also include all payments made by such Person with any proceeds of a
dissolution or liquidation of such Person.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.
and any successor thereto.



     “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.



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     “SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding
to any of its principal functions.



     “Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934,
Sarbanes-Oxley, and the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the PCAOB.



     “Security Agreement” means the Security Agreement dated as of the Closing Date among the Loan
Parties and the Agent.



     “Security Documents” means the Security Agreement, the Blocked Account Agreements, the
Mortgages, the Credit Card Notifications, and each other security agreement or other instrument or
document executed and delivered to the Agent pursuant to this Agreement or any other Loan Document
granting a Lien to secure any of the Obligations.



     “Shareholder Agreement” shall mean that certain Amended and Restated Shareholder Agreement
dated February 25, 2009 among the Lead Borrower, GE Capital Equity Investments, Inc. and NBC
Universal, Inc.



     “Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’
equity of the Lead Borrower and its Subsidiaries as of that date determined in accordance with
GAAP.



     “Solvent” and “Solvency” means, with respect to any Person on a particular date, that on such
date (a) at fair valuation, all of the properties and assets of such Person are greater than the
sum of the debts, including contingent liabilities, of such Person, (b) the present fair saleable
value of the properties
and assets of such Person is not less than the amount that would be required to pay the
probable liability of such Person on its debts as they become absolute and matured, (c) such Person
is able to realize upon its properties and assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course of business, (d)
such Person does not intend to, and does not believe that it will, incur debts beyond such Person’s
ability to pay as such debts mature, and (e) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or transaction, for which such Person’s
properties and assets would constitute unreasonably small capital after giving due consideration to
the prevailing practices in the industry in which such Person is engaged. The amount of all
guarantees at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at the time, can reasonably be expected to become an actual or matured
liability.



     “Specified DDAs” means (i) disbursement accounts used exclusively for funding payroll, payroll
taxes and other employee wage and benefit plans, (ii) cash collateral accounts referenced in
clauses (h) and (i) of the definition of “Permitted Indebtedness”, and (iii) so long as no Event of
Default has occurred and is continuing, each DDA holding at all times less than $100,000 in the
aggregate together with all such other DDAs described in this clause (iii).



     “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is
the number one and the denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the FRB to which a Lender is subject with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D
of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D.
LIBO Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without



-33-









 







benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.



     “Subordinated Indebtedness” means unsecured Indebtedness which is expressly subordinated in
right of payment to the prior payment in full of the Obligations on terms approved in writing by
the Required Lenders and which unsecured Indebtedness is in form and on terms approved in writing
by the Required Lenders, which terms shall include, at a minimum, that such Indebtedness has a
maturity date which is at least 90 days after the Maturity Date.



     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares Equity Interests having ordinary
voting power for the election of directors or other governing body are at the time beneficially
owned, or the management of which is otherwise controlled, directly, or indirectly through one or
more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to
a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of a Loan Party.



     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master Agreement.



     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).



     “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.



     “Term Commitment” means, as to each Lender, its obligation to make a Loan to the Borrower
pursuant to Section 2.01 in an aggregate principal amount not to exceed the amount set
forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable. As of the Closing Date, the
aggregate amount of Term Commitments is $25,000,000.



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     “Term Loan PIK Interest Rate” means 3.00% per annum, until the first anniversary of the
Closing Date and thereafter, 1.00% per annum.



     “Term Loan PIK Interest” as defined in Section 2.03(b).



     “Term Loan Prepayment Fee” means (a) from the Closing Date through and including the first
anniversary of the Closing Date, (i) the greater of Yield Revenue and (ii) 3.00% of the principal
amount of the Loans to be prepaid, (b) following the first anniversary of the Closing Date through
and including the second anniversary of the Closing Date, 2.00% of the principal amount of the
Loans to be prepaid and (c) following the second anniversary of the Closing Date through and
including the third anniversary of the Closing Date, 1.00% of the principal amount of the Loans to
be prepaid.



     “Term Loan Termination Date” means the earliest to occur of (i) the Maturity Date or (ii) the
date on which the maturity of the Obligations is accelerated (or deemed accelerated).



     “Total Outstandings” means the aggregate Outstanding Amount of all Loans.



     “Trading with the Enemy Act” has the meaning set forth in Section 10.18.



     “UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, however, that if a term is defined in Article 9 of the
Uniform Commercial Code differently than in another Article thereof, the term shall have the
meaning set forth in Article 9; provided further that, if by reason of mandatory provisions of law,
perfection, or the effect of perfection or non-perfection, of a security interest in any Collateral
or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than State of New York, “Uniform Commercial Code” means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection or availability of such
remedy, as the case may be.



     “UFCA” has the meaning specified in Section 10.21(d).



     “UFTA” has the meaning specified in Section 10.21(d).



     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.



     “United States” and “U.S.” mean the United States of America.



     “Unrestricted Cash” means cash of a Borrower from time to time deposited in a DDA, which DDA
is subject to no Liens other than those in favor of the Agent, but excluding any Eligible Cash
included in the Borrowing Base and excluding any amounts on deposit in any Specified DDA.



     “USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), and the regulations promulgated thereunder, as amended and in effect.



-35-









 





     “Value Pay Plan” shall mean that certain purchase plan offered by Borrowers to consumer
customers pursuant to which such Person may be approved to purchase Inventory through a payment
plan of up to six (6) payments over six (6) months.



     “ValueVision Certificate of Designation” shall mean the ValueVision Series B Redeemable
Preferred Stock Certificate of Designation, as filed with the State of Minnesota on February 25,
2009.



     “Yield Revenue” means (i) all amounts (including Term Loan PIK Interest) which are (or would
be) payable on account of interest on the principal amount of the Loans to be prepaid through the
first anniversary of the Closing Date (assuming that such principal amount had not been prepaid and
that interest (including Term Loan PIK Interest) accrued thereon from and after the date of
prepayment at the rate in effect on the date of prepayment), less (ii) any interest on such
principal amount of the Loans paid (including any Term Loan PIK Interest that has been capitalized)
from and after the Closing Date through the date of prepayment.



     1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan
Document, unless otherwise specified herein or in such other Loan Document:




     (a) The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation.” The word “will” shall be construed to have the same meaning
and effect as the word “shall.” Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth herein or in any
other Loan Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words
“herein,” “hereof” and “hereunder,” and words of similar import
when used in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, the Loan Document in which such references
appear, (v) any reference to any law shall include all statutory and regulatory provisions
consolidating, amending replacing or interpreting such law and any reference to any law or
regulation shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.




     (b) In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means
“to and including.”




     (c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this Agreement or
any other Loan Document.



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     1.03 Accounting Terms



     All accounting terms not specifically or completely defined herein shall be construed in
conformity with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity
with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except as otherwise
specifically prescribed herein.



     1.04 Times of Day. Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).



ARTICLE II

THE COMMITMENTS AND LOANS




     2.01 Loans; Reserves; Protective Advances. (a) Subject to the terms and conditions set forth
herein, each Lender severally agrees to make a loan to the Borrowers on the Closing Date in a
principal amount not to exceed the lesser of (x) the Term Commitment of such Lender, or (y) such
Lender’s Applicable Percentage of the Borrowing Base (as determined on the Closing Date, without
giving effect to clause (e) of the definition thereof). Amounts repaid in respect of Loans may not
be reborrowed, and upon each Lender’s making of such Loan, the Term Commitment of such Lender shall
be terminated.



          (b) As of the Closing Date, the only Reserves shall be (i) (A) two months of self insurance
claims, (B) 50% of outstanding courtesy credits, and (C) the Credit Card Reserve, and (ii) such
other Reserves as are described in the Borrowing Base Certificate delivered to the Agent pursuant
to Section 4.01(c). Thereafter, at any time that (x) the Borrowing Base is less than
$35,000,000, or (y) any claim exists which could have priority over the Agent’s Lien, the Agent
shall have the right, at any time and from time to time after the Closing Date in its Credit
Judgment to establish, modify or eliminate any
Reserve without notice to or consent from the Borrowers; provided that the foregoing
shall not in any way restrict the ability of the Agent to establish or modify Reserves on account
of the enumerated categories specified in the definitions of “Inventory Reserves”, “Realty
Reserves” and “Receivables Reserves” notwithstanding the fact that the Borrowing Base may then
exceed $35,000,000.



          (c) Unless Exigent Circumstances then exist, the Agent will give the Lead Borrower at least
one (1) Business Day’s advance written notice prior to the effective date of any increase in
Reserves and will be available to discuss the Agent’s reason for such increase.



          (d) In addition to the Loan made on the Closing Date, the Agent may, in its discretion (and
irrespective of whether a Default or Event of Default then exists), make Protective Advances in an
aggregate amount not to exceed $5,000,000 at any time of determination without the consent of the
Lenders and each Lender shall be bound thereby. A Protective Advance is for the account of the
Borrowers and shall constitute an Obligation, shall accrue interest at a per annum rate equal to
the rate then applicable to Loans (but, for avoidance of doubt, shall not be deemed to be a Loan),
and shall be repaid by the Borrowers on demand. Immediately upon the making of a Protective
Advance, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Agent a risk participation in such Protective Advance in an amount equal to the
product of such Lender’s Applicable Percentage times the amount of such Protective Advance. The
making of any such Protective Advance on any one occasion shall not obligate the Agent or any
Lender to make or permit any Protective Advances on any other occasion or to permit such Protective
Advances to remain outstanding.



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     2.02 Prepayments.



          (a) Subject to Section 2.04(a), the Borrowers may, upon irrevocable notice from the
Lead Borrower to the Agent, at any time or from time to time, voluntarily prepay the Loan in whole
or in part; provided that such notice must be received by the Agent not later than 11:00
a.m. on the date of such prepayment of the Loan. Each such notice shall specify the date and
amount of such prepayment. The Agent will promptly notify each Lender of its receipt of each such
notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. If such
notice is given by the Lead Borrower, the Borrowers shall make such prepayment, together with any
Term Loan Prepayment Fee then due, and the payment amount specified in such notice shall be due and
payable on the date specified therein. Each such prepayment shall be applied to the Loan in
accordance with the Applicable Percentages of each Lender.



          (b) If for any reason the Total Outstandings at any time exceed the Borrowing Base as then in
effect, the Borrowers shall immediately prepay Loans in an aggregate amount equal to such excess.



          (c) The Borrowers shall prepay the Loans in accordance with the provisions of Section
6.13 hereof.



          (d) The Borrowers shall prepay the Loans in an amount equal to 100% of the Net Proceeds
received by a Loan Party on account of any Prepayment Event, such payments to be made as soon as
practicable but in any event within five (5) days following the Borrowers’ receipt of such Net
Proceeds (it being understood and agreed that such Net Proceeds shall be remitted to a Blocked
Account immediately upon receipt by the Borrowers); provided that, so long as no Event of
Default is then continuing, no such prepayment shall be required with respect to any Net Proceeds
received on account of a Prepayment Event of the type described in clauses (b), (d) or (e) of the
definition thereof if the Required Lenders have provided written notice to the Lead Borrower of
such election to decline such prepayment.



          (e) The Borrowers shall repay to the Lenders on the Term Loan Termination Date the aggregate
principal amount of Loans outstanding on such date.



     2.03 Interest; Term Loan PIK Interest.



          (a) Subject to the provisions of Section 2.03(c) below, each Loan shall bear interest
on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to
the Adjusted LIBO Rate for such Interest Period plus the Applicable Margin.



          (b) In addition to the interest which accrues on the Loans pursuant to Section 2.03(a)
above, the Loans shall accrue interest at a rate equal to the Term Loan PIK Interest Rate, which
interest (“Term Loan PIK Interest”) shall, if not paid in cash as provided below, accrue,
be capitalized and be compounded and added to the aggregate principal balance of the Loan quarterly
in arrears on the first day of the quarter; provided that, Term Loan PIK Interest shall not
be capitalized but shall be due and payable in cash on each Interest Payment Date if (i) any Event
of Default exists, or (ii) the capitalization of such PIK Interest would cause the Borrowers to be
in default of the DirecTV Agreement or the Shareholder Agreement, and further provided
that, subject to the preceding proviso, the Borrowers shall at all times have the right to pay Term
Loan PIK Interest in cash on any Interest Payment Date as long as the Borrowers furnish irrevocable
notice of such election to the Agent at least five (5) Business Days prior to



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the applicable
Interest Payment Date; once such notice is furnished, PIK Interest shall become due and payable in
cash on such Interest Payment Date.



          (c) (i) If any amount payable under any Loan Document is not paid when due (without regard to
any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such
amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal
to the Default Rate to the fullest extent permitted by applicable Laws.




               (ii) If any other Event of Default exists, then the Agent may, and upon the request of the
Required Lenders shall, notify the Lead Borrower that all outstanding Obligations shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate and
thereafter such Obligations shall bear interest at the Default Rate to the fullest extent permitted
by applicable Laws.




               (iii) Accrued and unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable upon demand.



          (d) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest hereunder shall be
due and payable in accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.




     2.04 Fees.



          (a) Term Loan Prepayment Fee. In the event that, at any time prior to the third
anniversary of the Closing Date, the Term Loan Termination Date occurs, or in the event that the
Borrowers prepay, or are required to prepay, the Loans in whole or in part, then, on the Term Loan
Termination Date or the effective date of such prepayment, as applicable, the Borrowers shall pay
to the Agent, for the ratable benefit of the Lenders, an amount equal to the applicable Term Loan
Prepayment Fee; provided that (i) no such Term Loan Prepayment Fee shall be due and owing
hereunder as a result of the Borrowers’ payment of the Loans upon the occurrence of the Maturity
Date, and (ii) so long as no Event of Default is then continuing, no such Term Loan Prepayment Fee
shall be due and owing
hereunder to the extent such prepayment is made on account of any Prepayment Event of the type
described in clauses (b), (d) or (e) of the definition thereof. All parties to this Agreement
agree and acknowledge that the Lenders will have suffered damages on account of the early
termination of this Agreement or prepayment of any portion of the Loans and that, in view of the
difficulty in ascertaining the amount of such damages, the Term Loan Prepayment Fee constitutes
reasonable compensation and liquidated damages to compensate the Lenders on account thereof.




          (b) Other Fees. The Borrowers shall pay to the Agent for its own account fees in the
amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid
and shall not be refundable for any reason whatsoever.




     2.05 Computation of Interest and Fees All computations of fees and interest shall be made on
the basis of a 360-day year and actual days elapsed. Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day
on which the Loan or such portion is paid. Each determination by the Agent of an interest rate or
fee hereunder shall be conclusive and binding for all purposes, absent manifest error.




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     2.06 Evidence of Debt.



          The Loans made by each Lender shall be evidenced by one or more accounts or records maintained
by the Agent (the “Loan Account”) in the ordinary course of business. In addition, each
Lender may record in such Lender’s internal records, an appropriate notation evidencing the date
and amount of each Loan from such Lender, each payment and prepayment of principal of any such
Loan, and each payment of interest, fees and other amounts due in connection with the Obligations
due to such Lender. The accounts or records maintained by the Agent and each Lender shall be
conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrowers
and the interest and payments thereon. Any failure to so record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between the accounts and
records maintained by any Lender and the accounts and records of the Agent in respect of such
matters, the accounts and records of the Agent shall control in the absence of manifest error.
Upon the request of any Lender made through the Agent, the Borrowers shall execute and deliver to
such Lender (through the Agent) a Note, which shall evidence such Lender’s Loans in addition to
such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the
date, amount and maturity of its Loans and payments with respect thereto. Upon receipt of an
affidavit of a Lender as to the loss, theft, destruction or mutilation of such Lender’s Note and
upon cancellation of such Note, the Borrowers will issue, in lieu thereof, a replacement Note in
favor of such Lender, in the same principal amount thereof and otherwise of like tenor.




     2.07 Payments Generally; Agent’s Clawback.



          (a) General. All payments to be made by the Borrowers shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by the Borrowers hereunder shall be made to the Agent, for the
account of the respective Lenders to which such payment is owed, at the Agent’s Office in Dollars
and in immediately available funds not later than 2:00 p.m. on the date specified herein. The
Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer to such Lender’s
Lending Office. All payments received by the Agent after 2:00 p.m., at the option of the Agent,
shall be deemed received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue. If any payment to be made by the Borrowers shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day, and such extension
of time shall be reflected in computing interest or fees, as the case may be.




          (b) Payments by Borrowers; Presumptions by Agent. Unless the Agent shall have
received notice from the Lead Borrower prior to the time at which any payment is due to the Agent
for the account of the Lenders hereunder that the Borrowers will not make such payment, the Agent
may assume that the Borrowers have made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the
Borrowers have not in fact made such payment, then each of the Lenders severally agrees to repay to
the Agent forthwith on demand the amount so distributed to such Lender, in immediately available
funds with interest thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Agent at the greater of the Federal Funds Rate and a
rate determined by the Agent in accordance with banking industry rules on interbank compensation.




     A notice of the Agent to any Lender or the Lead Borrower with respect to any amount owing
under this Section 2.07(b) shall be conclusive, absent manifest error.



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          (c) Obligations of Lenders Several. The obligations of the Lenders hereunder to make
Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The
failure of any Lender to make any Loan or to make any payment under Section 10.04(c) on any
date required hereunder shall not relieve any other Lender of its corresponding obligation to do so
on such date, and no Lender shall be responsible for the failure of any other Lender to so make its
Loan or to make its payment under Section 10.04(c).




          (d) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any particular place or
manner.




     2.08 Sharing of Payments by Lenders If any Credit Party shall, by exercising any right of
setoff or counterclaim or otherwise, obtain payment in respect of any principal of, interest on, or
other amounts with respect to, any of the Obligations resulting in such Lender’s receiving payment
of a proportion of the aggregate amount of such Obligations greater than its pro
rata share thereof as provided herein (including as in contravention of the priorities of
payment set forth in Section 8.03), then the Credit Party receiving such greater proportion
shall (a) notify the Agent of such fact, and (b) purchase (for cash at face value) participations
in the Obligations of the other Credit Parties, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the Credit Parties ratably
and in the priorities set forth in Section 8.03, provided that:




     (i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and




     (ii) the provisions of this Section shall not be construed to apply to (x) any payment
made by the Loan Parties pursuant to and in accordance with the express terms of this
Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans to any assignee or participant, other than to
the Borrowers or any Subsidiary thereof (as to which the provisions of this Section shall
apply).



     Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.



ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY;

APPOINTMENT OF LEAD BORROWER




     3.01 Taxes.



          (a) Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Borrowers hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if
the Borrowers shall be required by applicable law to deduct any Indemnified Taxes (including any
Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section)






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the Agent or Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers shall
timely pay the full amount deducted to the relevant Governmental Authority in accordance with
applicable law.




          (b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of
subsection (a) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.




          (c) Indemnification by the Loan Parties. The Loan Parties shall indemnify the Agent
and each Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the Agent and such Lender and any
penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment or liability
delivered to the Lead Borrower by a Lender (with a copy to the Agent), or by the Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.




          (d) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Lead Borrower shall deliver
to the Agent the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Agent.




          (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which any Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Lead Borrower (with a copy to the
Agent), at the time or times prescribed by applicable law or reasonably requested by the Lead
Borrower or the Agent, such properly completed and executed documentation prescribed by applicable
law as will permit such payments to be made without withholding or at a reduced rate of
withholding. Such delivery shall be provided on the Closing Date and on or before such
documentation expires or becomes obsolete or after the occurrence of an event requiring a change in
the documentation most recently delivered. In addition, any Lender, if requested by the Lead
Borrower or the Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Lead Borrower or the Agent as will enable the Lead Borrower or the
Agent to determine whether or not such Lender is subject to backup withholding or information
reporting requirements.




     Without limiting the generality of the foregoing, in the event that any Borrower is resident
for tax purposes in the United States, any Foreign Lender shall deliver to the Lead Borrower and
the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Lead Borrower or the Agent, but only if such Foreign Lender is
legally entitled to do so), whichever of the following is applicable:




          (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States is a party,




          (ii) duly completed copies of Internal Revenue Service Form W-8ECI,



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          (iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of the Borrowers within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form
W-8BEN, or




          (iv) any other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable law to permit the Lead
Borrower to determine the withholding or deduction required to be made.



          (f) Treatment of Certain Refunds. If the Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts
pursuant to this Section, it shall pay to the Borrowers an amount equal to such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this
Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all reasonable
out-of-pocket expenses of the Agent or such Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund), provided that the
Borrowers, upon the request of the Agent or such Lender, agree to repay the amount paid over to the
Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Agent or such Lender in the event the Agent or such Lender is required to repay
such refund to such Governmental Authority. This subsection shall not be construed to require the
Agent or any Lender to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to the Borrowers or any other Person.




     3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund loans based on the LIBO Rate, or to determine or charge interest
rates based upon the LIBO Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Lead Borrower through the Agent,
any obligation of such Lender to maintain Loans based on the LIBO Rate shall be suspended until
such Lender notifies the Agent and the Lead Borrower that the circumstances giving rise to such
determination no longer exist and, in the sole discretion of the Agent, all Loans shall accrue
interest at the Base Rate plus any Applicable Margin. Upon receipt of such notice, the Borrowers
shall, upon demand from such Lender (with a copy to the Agent), prepay all such Loans of such
Lender, either on the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such Loans. Upon any such prepayment or conversion, the Borrowers shall also
pay accrued interest on the amount so prepaid or converted.



     3.03 Inability to Determine Rates. If the Agent determines that for any reason in connection
with any request for a Loan that adequate and reasonable means do not exist for determining the
LIBO Rate for any requested Interest Period with respect to a Loan, the Agent will promptly so
notify the Lead Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain such Loans shall be suspended until the Agent (upon the instruction of the Lenders)
revokes such notice and, in the sole discretion of the Agent, all Loans shall accrue interest at
the Base Rate plus any Applicable Margin.



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     3.04 Increased Costs.



     (a) Increased Costs Generally. If any Change in Law shall:




          (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or credit extended or participated in by, any Lender (except any reserve requirement
reflected in the LIBO Rate);




          (ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement, or change the basis of taxation of payments to such Lender in respect thereof
(except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such Lender; or




          (iii) impose on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or Loans made by such Lender;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any such Loan, or to reduce the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or any other amount) then, upon request of such Lender,
the Borrowers will pay to such Lender such additional amount or amounts as will compensate such
Lender for such additional costs incurred or reduction suffered.




          (b) Capital Requirements. If any Lender determines that any Change in Law affecting
such Lender or any Lending Office of such Lender or such Lender’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate of return on such
Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of
this Agreement, the Loans made by such Lender to a level below that which such Lender or such
Lender’s holding company could have achieved but for such Change in Law (taking into consideration
such Lender’s policies and the policies of such Lender’s holding company with respect to capital
adequacy), then from time to time the Borrowers will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender’s holding company for any such reduction
suffered.




          (c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as the case may be,
as specified in subsection (a) or (b) of this Section and delivered to the Lead Borrower shall be
conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.




          (d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of
such Lender’s right to demand such compensation, provided that the Borrowers shall not be
required to compensate a Lender pursuant to the foregoing provisions of this Section for any
increased costs incurred or reductions suffered more than nine months prior to the date that such
Lender notifies the Lead Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month
period referred to above shall be extended to include the period of retroactive effect thereof).





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     3.05 Mitigation Obligations; Replacement of Lenders.



          (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 3.04, or the Borrowers are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section
3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall
use reasonable efforts to designate a different Lending Office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable,
and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such designation or assignment.




          (b) Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, the
Borrowers may replace such Lender in accordance with Section 10.13.




     3.06 Survival. All of the Borrowers’ obligations under this Article III shall survive
repayment of the Loans and all other Obligations hereunder.



     3.07 Designation of Lead Borrower as Borrowers’ Agent.



          (a) Each Borrower hereby irrevocably designates and appoints the Lead Borrower as such
Borrower’s agent to obtain Loans, the proceeds of which shall be available to each Borrower for
such uses as are permitted under this Agreement. As the disclosed principal for its agent, each
Borrower shall be obligated to each Credit Party on account of Loans so made as if made directly by
the applicable Credit Party to such Borrower, notwithstanding the manner by which such Loans are
recorded on the books and records of the Lead Borrower and of any other Borrower. In addition,
each Loan Party other than the Borrowers hereby irrevocably designates and appoints the Lead
Borrower as such Loan Party’s agent to represent such Loan Party in all respects under this
Agreement and the other Loan Documents.




          (b) Each Borrower recognizes that credit available to it hereunder is in excess of and on
better terms than it otherwise could obtain on and for its own account and that one of the reasons
therefor is its joining in the credit facility contemplated herein with all other Borrowers.
Consequently, each Borrower hereby assumes and agrees to discharge all Obligations of each of the
other Borrowers.




          (c) The Lead Borrower shall act as a conduit for each Borrower (including itself, as a
“Borrower”) on whose behalf the Lead Borrower has requested a Loan. Neither the Agent nor any
other Credit Party shall have any obligation to see to the application of such proceeds therefrom.




ARTICLE IV

CONDITIONS PRECEDENT TO LOANS




     4.01 Conditions of Loan. The obligation of each Lender to make its Loan hereunder on the
Closing Date is subject to satisfaction of the following conditions precedent:




     (a) The Agent’s receipt of the following, each of which shall be originals, telecopies
or other electronic image scan transmission (e.g., “pdf”) (followed promptly by originals)
unless



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otherwise specified, each properly executed by a Responsible Officer of the signing
Loan Party, each dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and substance
satisfactory to the Agent:




     (i) executed counterparts of this Agreement sufficient in number for
distribution to the Agent, each Lender and the Lead Borrower;




     (ii) a Note executed by the Borrowers in favor of each Lender requesting a
Note;




     (iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the Agent
may require evidencing (A) the authority of each Loan Party to enter into this
Agreement and the other Loan Documents to which such Loan Party is a party or is to
become a party and (B) the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Loan Party is a party or is to
become a party;




     (iv) copies of each Loan Party’s Organization Documents and such other
documents and certifications as the Agent may reasonably require to evidence that
each Loan Party is duly organized or formed, and that each Loan Party is validly
existing, in good standing and qualified to engage in business in each jurisdiction
where its ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to so qualify in such
jurisdiction could not reasonably be expected to have a Material Adverse Effect;




     (v) a favorable opinion of each of (i) Faegre & Benson LLP, counsel to the Loan
Parties, and (ii) Bone McAllester Norton PLLC, special Kentucky counsel to the Loan
Parties, in each case addressed to the Agent and each Lender, as to such matters
concerning the Loan Parties and the Loan Documents as the Agent may reasonably
request;




     (vi) a certificate signed by a Responsible Officer of the Lead Borrower
certifying (A) that there has been no event or circumstance since the date of the
Audited Financial Statements that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect, (B) to the
Solvency of the Loan Parties as of the Closing Date after giving effect to the
transactions contemplated hereby, and (C) either that (1) no consents, licenses or
approvals are required in connection with the execution, delivery and performance by
such Loan Party and the validity against such Loan Party of the Loan Documents to
which it is a party, or (2) that all such consents, licenses and approvals have been
obtained and are in full force and effect;




     (vii) evidence that all insurance required to be maintained pursuant to the
Loan Documents and all endorsements in favor of the Agent required under the Loan
Documents have been obtained and are in effect;




     (viii) evidence that all accounts payable and taxes are current, except for
those which the Borrowers are disputing in good faith and for which adequate
reserves have



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been established. As used herein, “current” means accounts payable to MSOs
shall be within 90 days of the due date and other accounts payable shall be within
30 days of the due date;




     (ix) a payoff letter from the agent for the lenders under the Existing Credit
Agreement satisfactory in form and substance to the Agent evidencing that the
Existing Credit Agreement has been or concurrently with the Closing Date is being
terminated, all obligations thereunder are being paid in full, and all Liens
securing obligations under the Existing Credit Agreement have been or concurrently
with the Closing Date are being released;




     (x) the Security Documents (including, without limitation, the Mortgages) and
certificates evidencing any stock being pledged thereunder, together with undated
stock powers executed in blank, each duly executed by the applicable Loan Parties;




     (xi) all other Loan Documents, each duly executed by the applicable Loan
Parties;




     (xii) (A) appraisals (based on net wholesale liquidation value) by a third
party appraiser acceptable to the Agent of all Inventory of the Borrowers, the
results of which are satisfactory to the Agent, (B) appraisals (based on net orderly
liquidation value) by a third party appraiser acceptable to the Agent of all
Accounts arising under the Value Pay Plan, the results of which are satisfactory to
the Agent, and (C) a written report regarding the results of a commercial finance
examination of the Loan Parties, which shall be satisfactory to the Agent, it being
understood that the examination dated as of July 9, 2010 conducted by Spain, Price,
Reader & Thompson, P.C. is satisfactory to the Agent;




     (xiii) results of searches or other evidence reasonably satisfactory to the
Agent (in each case dated as of a date reasonably satisfactory to the Agent)
indicating the absence of Liens on the assets of the Loan Parties, except for
Permitted Encumbrances and Liens for which termination statements and releases,
satisfactions and discharges of any Mortgages, and releases or subordination
agreements satisfactory to the Agent are being tendered concurrently with such
extension of credit or other arrangements satisfactory to the Agent for the delivery
of such termination statements and releases, satisfactions and discharges have been
made;




     (xiv) (A) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the Agent to be
filed, registered or recorded to create or perfect the first priority Liens intended
to be created under the Security Documents and all such documents and instruments
shall have been so filed, registered or recorded to the satisfaction of the Agent,
(B) the Credit Card Notifications and Blocked Account Agreements required pursuant
to Section 6.13 hereof, and (C) Collateral Access Agreements as required by
the Agent;




     (xv) evidence that all other actions that the Agent may deem necessary or
desirable in order to create valid first and subsisting Liens on the property
described in the Mortgages has been taken;



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     (xvi) an appraisal of each of the properties described in the Mortgages by a
third party appraiser acceptable to the Agent and otherwise in form and substance
satisfactory to the Agent, it being understood that the appraisal dated as of
June 3, 2010 conducted by Hilco Real Estate Appraisal, LLC with respect to the Lead
Borrower’s property in Bowling Green, Kentucky is acceptable to the Agent;




     (xvii) flood certificates with respect to each of the properties described in
the Mortgages certifying that such properties are not in a flood zone otherwise the
Agent shall be named as loss payee and additional insured on flood insurance
reasonably acceptable to the Agent with respect to such properties;




     (xviii) evidence that the other Real Estate Eligibility Conditions have been
satisfied or waived in writing; and




     (xix) such other assurances, certificates, documents, consents or opinions as
the Agent reasonably may require.




     (b) The Agent shall have received satisfactory evidence that the Borrowers shall have
not less than $33,000,000 of Unrestricted Cash after giving effect to the making of the
Loan.




     (c) The Agent shall have received a Borrowing Base Certificate dated the Closing Date,
relating to the week ended on November 13, 2010, and executed by a Responsible Officer of
the Lead Borrower.




     (d) The Agent shall have received and be satisfied with the Borrowers’ year-to-date
financial statements.




     (e) The Agent shall be reasonably satisfied that any financial statements delivered to
it fairly present the business and financial condition of the Loan Parties and that there
has been no Material Adverse Effect since the date of the most recent financial information
delivered to the Agent.




     (f) There shall not be pending any litigation or other proceeding, the result of which,
either individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.




     (g) The consummation of the transactions contemplated hereby shall not violate any
applicable Law or any Organization Document.




     (h) All fees required to be paid to the Agent on or before the Closing Date shall have
been paid in full, and all fees required to be paid to the Lenders on or before the Closing
Date shall have been paid in full.




     (i) The Borrowers shall have paid all reasonable fees, charges and disbursements of
counsel to the Agent to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not thereafter preclude a
final settling of accounts between the Borrowers and the Agent).



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     (j) The Agent shall have received all documentation and other information required by
regulatory authorities under applicable “know your customer” and anti-money laundering rules
and regulations, including without limitation the USA PATRIOT Act.




     (k) The representations and warranties of each Loan Party contained in Article
V or in any other Loan Document shall be true and correct on and as of the date of the
Loan.




     (l) No Default shall exist.




     (m) No material changes in governmental regulations or policies affecting any Loan
Party or any Credit Party shall have occurred prior to the Closing Date.




     (n) There shall not have occurred any disruption or material adverse change in the
United States financial or capital markets in general that has had, in the reasonable
opinion of the Agent, a material adverse effect on the market for loan syndications or
adversely affecting the syndication of the Loans.




     (o) The Agent shall have received consents, in form and substance reasonably
satisfactory to the Agent, duly executed by GE Capital Equity Investments, Inc.,
acknowledging and agreeing to the limitations on Restricted Payments set forth in
Section 7.06(c) hereof.


The Agent shall notify the Lead Borrower and the Lenders of the Closing Date, and such notice shall
be conclusive and binding on the Loan Parties.



Without limiting the generality of the provisions of Section 9.04, for purposes of
determining compliance with the conditions specified in this Section 4.01, each Lender that
has signed this Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Agent shall have received notice from such
Lender prior to the proposed Closing Date specifying its objection thereto.




ARTICLE V

REPRESENTATIONS AND WARRANTIES




     To induce the Credit Parties to enter into this Agreement and to provide and maintain
financial accommodations to the Borrowers hereunder, each Loan Party represents and warrants to the
Agent and the other Credit Parties that:



     5.01 Existence, Qualification and Power. Each Loan Party and each Subsidiary thereof (a) is a
corporation, limited liability company, partnership or limited partnership, duly incorporated,
organized or formed, validly existing and, where applicable, in good standing under the Laws of the
jurisdiction of its incorporation, organization, or formation (b) has all requisite power and
authority and all requisite governmental licenses, permits, authorizations, consents and approvals
to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is
licensed and, where applicable, in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent
that failure to do so could not reasonably be expected to have a Material Adverse Effect.
Schedule 5.01 annexed hereto sets forth, as of the Closing Date, each Loan Party’s name



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as it appears in official filings in its state of incorporation or organization, its state of
incorporation or organization, organization type, organization number, if any, issued by its state
of incorporation or organization, and its federal employer identification number.




     5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan
Party of each Loan Document to which such Person is or is to be a party, has been duly authorized
by all necessary corporate or other organizational action, and does not and will not (a) contravene
the terms of any of such Person’s Organization Documents; (b) conflict with or result in any
breach, termination, or contravention of, or constitute a default under, or require any payment to
be made under (i) the DirecTV Agreement or any Material Indebtedness to which such Person is a
party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii)
any FCC License or any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject; (c) result in or require the
creation of any Lien upon any asset of any Loan Party (other than Liens in favor of the Agent under
the Security Documents); or (d) violate any Law.



     5.03 Governmental Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or any
other Person is necessary or required to be obtained or made by any Loan Party in connection with
the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement
or any other Loan Document, except for (a) the perfection or maintenance of the Liens created under
the Security Documents (including the first priority nature thereof), (b) such as have been
obtained or made and are in full force and effect, and (c) with respect to enforcement only, any
approvals, consents or notices to (i) any Governmental Authority, in respect of the Agent’s
foreclosure on the Equity Interests of any Loan Party only, or (ii) any other Person, in respect
only of the assignment to the Agent by any Loan Party of any license or contract rights to the
extent such assignment would otherwise be prohibited by the terms of the applicable license or
contract.



     5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered,
will have been, duly executed and delivered by each Loan Party that is party thereto. This
Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal,
valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.



     5.05 Financial Statements; No Material Adverse Effect.



          (a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii)
fairly present the financial condition of the Lead Borrower and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise expressly noted
therein; and (iii) show all Material Indebtedness and other liabilities, direct or contingent, of
the Lead Borrower and its Subsidiaries as of the date thereof required to be disclosed in
accordance with GAAP, including liabilities for taxes, material commitments and Indebtedness.




          (b) The unaudited Consolidated balance sheet of the Lead Borrower and its Subsidiaries dated
July 31, 2010, and the related Consolidated statements of income or operations, Shareholders’
Equity and cash flows for the fiscal quarter ended on that date (i) were prepared in




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accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (ii) fairly present the financial condition of the Lead Borrower
and its Subsidiaries as of the date thereof and their results of operations for the period covered
thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal
year-end audit adjustments.




          (c) Since the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.




          (d) To the best knowledge of the Lead Borrower, no Internal Control Event exists or has
occurred since the date of the Audited Financial Statements that has resulted in or could
reasonably be expected to result in a misstatement in any material respect, in any financial
information delivered or to be delivered to the Agent or the Lenders, of (i) covenant compliance
calculations with respect to Excess Availability, to the extent such calculations are required
pursuant to clause (l) of the definition of “Permitted Investments”, Section 6.02(k) or
Section 7.06(c), or (ii) the assets, liabilities, financial condition or results of
operations of the Lead Borrower and its Subsidiaries on a Consolidated basis.




          (e) The Consolidated forecasted balance sheet and statements of income and cash flows of the
Lead Borrower and its Subsidiaries delivered pursuant to Section 6.01(d) were prepared in
good faith on the basis of the assumptions stated therein, which assumptions were fair in light of
the conditions existing at the time of delivery of such forecasts, and represented, at the time of
delivery, the Loan Parties’ best estimate of its future financial performance.




     5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to
the knowledge of the Loan Parties, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Loan Party or any of its Subsidiaries or
against any of its properties or revenues that (a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions contemplated hereby, or (b) except as
disclosed on Schedule 5.06, either individually or in the aggregate, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.



     5.07 No Default No Loan Party or any Subsidiary is in default under or with respect to, or
party to, any Material Indebtedness. No Default has occurred and is continuing or would result
from the consummation of the transactions contemplated by this Agreement or any other Loan
Document.



     5.08 Ownership of Property; Liens.



          (a) Each of the Loan Parties and each Subsidiary thereof has good record and marketable title
in fee simple to or valid leasehold interests in, all Real Estate set forth on Schedule
5.08(b)(1) and Schedule 5.08(b)(2). Each of the Loan Parties and each Subsidiary has
good and marketable title to, valid leasehold interests in, or valid licenses to use all personal
property and assets material to the ordinary conduct of its business.




          (b) Schedule 5.08(b)(1) sets forth the address (including street address, county and
state) of all Real Estate that is owned by the Loan Parties and each of their Subsidiaries,
together with a list of the holders of any mortgage or other Lien other than Liens scheduled on
Schedule 7.01 or Permitted Encumbrances thereon as of the Closing Date. Each Loan Party and each
of its Subsidiaries has good, marketable and insurable fee simple title to the real property owned
by such Loan Party or such Subsidiary, free and clear of all Liens, other than Permitted
Encumbrances. Schedule 5.08(b)(2) sets forth






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the address (including street address, county and state) of all Leases of the Loan Parties,
together with a list of the lessor and its contact information with respect to each such Lease as
of the Closing Date. Each of such Leases is in full force and effect and the Loan Parties are not
in default beyond applicable notice and cure periods of the terms thereof.




          (c) Schedule 7.01 sets forth a complete and accurate list of all Liens on the property
or assets of each Loan Party and each of its Subsidiaries, as of the Closing Date showing the
lienholder thereof, the principal amount of the obligations secured thereby and the property or
assets of such Loan Party or such Subsidiary subject thereto. The property of each Loan Party and
each of its Subsidiaries is subject to no Liens, other than Permitted Encumbrances.




          (d) Schedule 7.02 sets forth a complete and accurate list of all Investments held by
any Loan Party or any Subsidiary of a Loan Party on the Closing Date, showing as of the date hereof
the amount, obligor or issuer and maturity, if any, thereof.




          (e) Schedule 7.03 sets forth a complete and accurate list of all Indebtedness of each
Loan Party or any Subsidiary of a Loan Party on the Closing Date, showing as of the date hereof the
amount, obligor or issuer and maturity thereof.




     5.09 Environmental Compliance.



          (a) Except as disclosed in Schedule 5.09, no Loan Party or any Subsidiary thereof (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability, except, in each case, as
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.




          (b) Except as otherwise set forth in Schedule 5.09, and except in each case, as would
not, individually or in the aggregate reasonably be expected to have a Material Adverse Effect,
none of the properties currently or formerly owned or operated by any Loan Party or any Subsidiary
thereof is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign,
state or local list or is adjacent to any such property; there are no and never have been any
underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or
lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any
property currently owned or operated by any Loan Party or any Subsidiary thereof or, to the best of
the knowledge of the Loan Parties, on any property formerly owned or operated by any Loan Party or
Subsidiary thereof; there is no asbestos or asbestos-containing material on any property currently
owned or operated by any Loan Party or Subsidiary thereof; and Hazardous Materials have not been
released, discharged or disposed of on any property currently or formerly owned or operated by any
Loan Party or any Subsidiary thereof.




          (c) Except as otherwise set forth on Schedule 5.09, and except in each case, as would
not, individually or in the aggregate reasonably be expected to have a Material Adverse Effect, no
Loan Party or any Subsidiary thereof is undertaking, and no Loan Party or any Subsidiary thereof
has completed, either individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently





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or formerly owned or operated by any Loan Party or
any Subsidiary thereof have been disposed of in a manner not reasonably expected to result in
material liability to any Loan Party or any Subsidiary thereof.




     5.10 Insurance. The properties of the Loan Parties and their Subsidiaries are insured with
financially sound and reputable insurance companies which are not Affiliates of the Loan Parties,
in such amounts, with such deductibles and covering such risks (including, without limitation,
workmen’s compensation, public liability, business interruption and property damage insurance) as
are customarily carried by companies engaged in similar businesses and owning similar properties in
localities where the Loan Parties or the applicable Subsidiary operates. Schedule 5.10
sets forth a description of all insurance maintained by or on behalf of the Loan Parties and their
Subsidiaries as of the Closing Date. Each insurance policy listed on Schedule 5.10 is in
full force and effect and all premiums in respect thereof that are due and payable have been paid
or financed in accordance with the terms of such insurance policies.



     5.11 Taxes. The Loan Parties and their Subsidiaries have filed all Federal, state and other
material tax returns and reports required to be filed, and have paid all Federal, state and other
material taxes, assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings being diligently conducted, for which adequate
reserves have been provided in accordance with GAAP, as to which Taxes no Lien has been filed and
which contest effectively suspends the collection of the contested obligation and the enforcement
of any Lien securing such obligation. There is no proposed tax assessment against any Loan Party
or any Subsidiary that would, if made, have a Material Adverse Effect. No Loan Party or any
Subsidiary thereof is a party to any tax sharing agreement.



     5.12 ERISA Compliance.



          (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with respect thereto and, to
the best knowledge of the Lead Borrower, nothing has occurred which would prevent, or cause the
loss of, such qualification. The Loan Parties and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan. No Lien imposed under the Code or ERISA exists or is likely to arise on
account of any Plan.




          (b) There are no pending or, to the best knowledge of the Lead Borrower, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could
reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.




          (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability; (iii) neither any Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
any Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither





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any Loan Party nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections
4069 or 4212(c) of ERISA, except in each case, as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.




     5.13 Subsidiaries; Equity Interests. The Loan Parties have no Subsidiaries other than those
specifically disclosed in Part (a) of Schedule 5.13, which Schedule sets forth the legal
name, jurisdiction of incorporation or formation and authorized Equity Interests of each such
Subsidiary. All of the outstanding Equity Interests in such Subsidiaries have been validly issued,
are fully paid and non-assessable and are owned by a Loan Party (or a Subsidiary of a Loan Party)
in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens except
for those created under the Security Documents. Except as set forth in Schedule 5.13, there are no
outstanding rights to purchase any Equity Interests in any Subsidiary. The Loan Parties have no
equity investments in any other corporation or entity other than those specifically disclosed in
Part (b) of Schedule 5.13. All of the outstanding Equity Interests in the Loan Parties
have been validly issued, and are fully paid and non-assessable and are owned in the amounts
specified on Part (c) of Schedule 5.13 free and clear of all Liens except for those created
under the Security Documents. The copies of the Organization Documents of each Loan Party and each
amendment thereto provided pursuant to Section 4.01 are true and correct copies of each
such document, each of which is valid and in full force and effect.



     5.14 Margin Regulations; Investment Company Act.



          (a) No Loan Party is engaged or will be engaged, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock. None of the proceeds of the Loans shall be used directly or indirectly for the
purpose of purchasing or carrying any margin stock, for the purpose of reducing or retiring any
Indebtedness that was originally incurred to purchase or carry any margin stock or for any other
purpose that might cause any of the Loans to be considered a “purpose credit” within the meaning of
Regulations T, U, or X issued by the FRB.




          (b) None of the Loan Parties, any Person Controlling any Loan Party, or any Subsidiary is or
is required to be registered as an “investment company” under the Investment Company Act of 1940.




     5.15 Disclosure Each Loan Party has, to the best of its knowledge, disclosed to the Agent and
the Lenders all agreements, instruments and corporate or other restrictions to which it or any of
its Subsidiaries is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect. No report,
financial statement, certificate or other information furnished (whether in writing or orally) by
or on behalf of any Loan Party to the Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other
Loan Document (in each case, as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information, the Loan
Parties represent only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.



     5.16 Compliance with Laws. Each of the Loan Parties and each Subsidiary is in compliance in all material respects with
the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of Law or





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order, writ, injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.




     5.17 Intellectual Property; Licenses, Etc. The Loan Parties and their Subsidiaries own, or
possess the right to use, all of the Intellectual Property, licenses, permits and other
authorizations that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person, except as could not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect. To the best knowledge of the
Lead Borrower, no slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any Loan Party or any
Subsidiary infringes upon any rights held by any other Person. Except as specifically disclosed in
Schedule 5.17, no claim or litigation regarding any of the foregoing is pending or, to the
best knowledge of the Lead Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.



     5.18 Labor Matters.



     There are no strikes, lockouts, slowdowns or other material labor disputes against any Loan
Party or any Subsidiary thereof pending or, to the knowledge of any Loan Party, threatened. The
hours worked by and payments made to employees of the Loan Parties comply with the Fair Labor
Standards Act and any other applicable federal, state, local or foreign Law dealing with such
matters except to the extent that any such violation could not reasonably be expected to have a
Material Adverse Effect. No Loan Party or any of its Subsidiaries has incurred any liability or
obligation under the Worker Adjustment and Retraining Act or similar state Law. All payments due
from any Loan Party and its Subsidiaries, or for which any claim may be made against any Loan Party
or any of its Subsidiaries, on account of wages and employee health and welfare insurance and other
benefits, have been paid or properly accrued in accordance with GAAP as a liability on the books of
such Loan Party. Except as set forth on Schedule 5.18, no Loan Party or any Subsidiary is a
party to or bound by any collective bargaining agreement, management agreement, employment
agreement, bonus, restricted stock, stock option, or stock appreciation plan or agreement or any
similar plan, agreement or arrangement. There are no representation proceedings pending or, to any
Loan Party’s knowledge, threatened to be filed with the National Labor Relations Board, and no
labor organization or group of employees of any Loan Party or any Subsidiary has made a pending
demand for recognition that could reasonably be expected to have a Material Adverse Effect. There
are no complaints, unfair labor practice charges, grievances, arbitrations, unfair employment
practices charges or any other claims or complaints against any Loan Party or any Subsidiary
pending or, to the knowledge of any Loan Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment of any employee of any Loan Party or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse Effect. The consummation
of the transactions contemplated by the Loan Documents will not give rise to any right of
termination or right of renegotiation on the part of any union under any collective bargaining
agreement to which any Loan Party or any of its Subsidiaries is bound.



     5.19 Security Documents.




     (a) The Security Agreement creates in favor of the Agent, for the benefit of the
Secured Parties referred to therein, a legal, valid, continuing and enforceable security
interest in the Collateral (as defined in the Security Agreement), the enforceability of
which is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors’



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rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law. The financing
statements, releases and other filings are in
appropriate form and have been or will be filed in the offices specified in the
Perfection Certificate. Upon such filings and/or the obtaining of “control,” (as defined in
the UCC) the Agent will have a perfected Lien on, and security interest in, to and under all
right, title and interest of the grantors thereunder in all Collateral that may be perfected
by filing, recording or registering a financing statement or analogous document (including
without limitation the proceeds of such Collateral subject to the limitations relating to
such proceeds in the UCC) or by obtaining control, under the UCC (in effect on the date this
representation is made) in each case prior and superior in right to any other Person.




     (b) When the Security Agreement (or a short form grant of security interest in form and
substance satisfactory to the Agent) is filed in the United States Patent and Trademark
Office and the United States Copyright Office and when financing statements, releases and
other filings in appropriate form are filed in the offices specified on the Perfection
Certificate, the Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the applicable Loan Parties in the
Intellectual Property (as defined in the Security Agreement) in which a security interest
may be perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, in each case prior and superior in right to
any other Person (it being understood that subsequent recordings in the United States Patent
and Trademark Office and the United States Copyright Office may be necessary to perfect a
Lien on registered trademarks, trademark applications and copyrights acquired by the Loan
Parties after the date hereof).




     (c) The Mortgages create in favor of the Agent, for the benefit of the Secured Parties
referred to therein, a legal, valid, continuing and enforceable Lien in the Mortgaged
Property (as defined in the Mortgages), the enforceability of which is subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law. Upon the filing of the Mortgages with the appropriate
Governmental Authorities, the Agent will have a perfected Lien on, and security interest in,
to and under all right, title and interest of the grantors thereunder in all Mortgaged
Property that may be perfected by such filing (including without limitation the proceeds of
such Mortgaged Property), in each case prior and superior in right to any other Person.



     5.20 Solvency



     After giving effect to the transactions contemplated by this Agreement, and before and after
giving effect to the Loans, the Loan Parties, on a Consolidated basis, are Solvent. No transfer of
property has been or will be made by any Loan Party and no obligation has been or will be 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
any Loan Party.



     5.21 Deposit Accounts; Credit Card Arrangements.




     (a) Annexed hereto as Schedule 5.21(a) is a list of all DDAs maintained by the Loan
Parties as of the Closing Date, which Schedule includes, with respect to each DDA (i) the name and



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address of the depository; (ii) the account number(s) maintained with such depository; (iii) a
contact person at such depository, and (iv) the identification of each Blocked Account Bank.





     (b) Annexed hereto as Schedule 5.21(b) is a list describing all arrangements as of the
Closing Date to which any Loan Party is a party with respect to the processing and/or payment to
such
Loan Party of the proceeds of any credit card charges and debit card charges for sales made by
such Loan Party.



     5.22 Brokers. No broker or finder brought about the obtaining, making or closing of the Loans
or transactions contemplated by the Loan Documents, and no Loan Party or Affiliate thereof has any
obligation to any Person in respect of any finder’s or brokerage fees in connection therewith,
other than PrinceRidge Group, LLC, the payment of whose fees is the obligation of the Loan Parties
and no other Person.



     5.23 Customer and Trade Relations. There exists no actual or, to the knowledge of any Loan
Party, threatened, termination or cancellation of, or any material adverse modification or change
in the business relationship of any Loan Party with any supplier material to its operations.



     5.24 DirecTV Agreement and DirecTV Security Documents. True and complete copies of the
DirecTV Agreement and DirecTV Security Documents have been delivered to the Agent on or before the
Closing Date. The Loan Parties have not received any notice of the intention of DirecTV to
terminate the DirecTV Agreement or to exercise its rights under the DirecTV Security Documents.



     5.25 Casualty. Neither the businesses nor the properties of any Loan Party or any of its
Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.



     5.26 Inactive Subsidiaries; Norwell. None of the Inactive Subsidiaries conducts any business
or maintains any material asserts. Norwell is engaged in the business of owning and operating a
television station and other activities ancillary thereto and does not maintain any assets other
than (i) the holding of FCC Licenses, (ii) the Lease of Real Property located at 2 Bert Drive #4,
West Bridgewater, Massachusetts 02379, (iii) a license in respect of Real Property located at 70
Pleasant Street, West Bridgewater, Massachusetts 02379, and (iv) immaterial assets incidental to
the conduct of Norwell’s business, in each case as in effect as of the Closing Date.



     5.27 Communications Act; FCC Licenses. The Loan Parties and their Subsidiaries are in
compliance with the Communications Act, except where non-compliance could not be reasonably be
expected to have a Material Adverse Effect. No event has occurred which results in, or after
notice or lapse of time or both would result in, the revocation, suspension, adverse modification,
non-renewal, impairment, restriction or termination of, or order of forfeiture with respect to, any
FCC License in any respect which could reasonably be expected to result in a Material Adverse
Effect. Each Loan Party and its Subsidiaries have filed in a timely manner all material filings,
reports, applications, documents, instruments, and information required to be filed by it under the
Communications Act (except where a failure to make such filings could not reasonably be expected to
have a Material Adverse Effect).



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ARTICLE VI

AFFIRMATIVE COVENANTS




     So long as any Lender shall have any Term Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, the Loan Parties shall, and shall (except in the case
of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each
Subsidiary to:



     6.01 Financial Statements. Deliver to the Agent, in form and detail satisfactory to the
Agent:




     (a) as soon as available, but in any event within 90 days after the end of each Fiscal
Year of the Lead Borrower (commencing with the fiscal year ended January 29, 2011), a
Consolidated balance sheet of the Lead Borrower and its Subsidiaries as at the end of such
Fiscal Year, and the related consolidated statements of income or operations, Shareholders’
Equity and cash flows for such Fiscal Year, setting forth in each case in comparative form
the figures for the previous Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by (i) a report and unqualified opinion of a
Registered Public Accounting Firm of nationally recognized standing reasonably acceptable to
the Agent, which report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit;




     (b) as soon as available, but in any event within 30 days after the end of each of the
Fiscal Months of each fiscal year of the Lead Borrower (commencing with the Fiscal Month
ended October 31, 2010), a Consolidated balance sheet of the Lead Borrower and its
Subsidiaries as at the end of such Fiscal Month, and the related consolidated statements of
income or operations, Shareholders’ Equity and cash flows for such Fiscal Month, and for the
portion of the Lead Borrower’s Fiscal Year then ended, setting forth in each case in
comparative form the figures for (A) such period set forth in the projections delivered
pursuant to Section 6.01(c) hereof, (B) the corresponding Fiscal Month of the
previous Fiscal Year and (C) the corresponding portion of the previous fiscal year, all in
reasonable detail, such consolidated statements to be certified by a Responsible Officer of
the Lead Borrower as fairly presenting the financial condition, results of operations,
Shareholders’ Equity and cash flows of the Lead Borrower and its Subsidiaries as of the end
of such Fiscal Month in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and




     (c) as soon as available, but in any event at least 15 days before the end of each
Fiscal Year of the Lead Borrower, draft forecasts (and within 60 days after the end of such
Fiscal Year, final forecasts approved by the board of directors of the Lead Borrower)
prepared by management of the Lead Borrower, in form satisfactory to the Agent, of
consolidated balance sheets and statements of income or operations and cash flows of the
Lead Borrower and its Subsidiaries on a monthly basis for the immediately following Fiscal
Year (including the fiscal year in which the Maturity Date occurs) and as soon as available,
any significant revisions to such forecast with respect to such Fiscal Year, in each case,
together with a copy of management’s discussion and analysis with respect to such forecasts.



     6.02 Certificates; Other Information. Deliver to the Agent, in form and detail satisfactory
to the Agent:



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     (a) concurrently with the delivery of the financial statements referred to in
Section 6.01(a), a certificate of its Registered Public Accounting Firm certifying
such financial statements and stating that in making the examination necessary for their
certification of such financial statements, such Registered Public Accounting Firm has not
obtained any knowledge of the existence of any Default or, if any such Default shall exist,
stating the nature and status of such event;




     (b) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b) (commencing with the delivery of the financial statements
for the Fiscal Month ended October 31, 2010), a duly completed Compliance Certificate signed
by a Responsible
Officer of the Lead Borrower, and in the event of any change in generally accepted
accounting principles used in the preparation of such financial statements, the Lead
Borrower shall also provide a statement of reconciliation conforming such financial
statements to GAAP and (ii) with the delivery of the financial statements referred to in
Section 6.01(a) only, a copy of management’s discussion and analysis with respect to
such financial statements;




     (c) as soon as practicable (but in any event within five (5) days) following the
delivery of the financial statements referred to in Section 6.01(b) (commencing with
the delivery of the financial statements for the Fiscal Month ended October 31, 2010), an
updated statement signed by a Responsible Officer of the Lead Borrower detailing (i) a
calculation of the Average FICO Scores of the Borrowers’ consumer account debtors, (ii) a
current accounts payable aging (including with respect to MSOs), (iii) a current accounts
receivable aging in respect of the Value Pay Plan, and (iv) a calculation of returned
Inventory as a percentage of sales for such Fiscal Month;




     (d) on the Friday of every other week (or, if such day is not a Business Day, on the
next succeeding Business Day), (i) a Borrowing Base Certificate as of the close of business
as of the last day of the immediately preceding two-week period, and (ii) a certification by
a Responsible Officer of the Lead Borrower of the amount of the Borrowers’ Unrestricted
Cash, with such supporting documentation as the Agent may require; provided that if
the Borrowing Base is less than or equal to $37,500,000 at any time, such Borrowing Base
Certificate and related materials shall be delivered on Friday of each week (or, if Friday
is not a Business Day, on the next succeeding Business Day), as of the close of business on
the immediately preceding Saturday;




     (e) as soon as practicable after receipt, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or the audit
committee of the board of directors) of any Loan Party by its Registered Public Accounting
Firm in connection with the accounts or books of the Loan Parties or any Subsidiary, or any
audit of any of them, including, without limitation, specifying any Internal Control Event;




     (f) as soon as practicable after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the stockholders of
the Loan Parties, and copies of all annual, regular, periodic and special reports and
registration statements which any Loan Party may file or be required to file with the SEC
under Section 13 or 15(d) of the Securities Exchange Act of 1934 or with any national
securities exchange, and in any case not otherwise required to be delivered to the Agent
pursuant hereto (including, without limitation, copies of quarterly financial statements and
management’s discussion and analysis with respect to such financial statements);



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     (g) as soon as practicable, but in any event within 30 days after June 1 of each year,
a report summarizing the insurance coverage (specifying type, amount and carrier) in effect
for each Loan Party and its Subsidiaries and containing such additional information as the
Agent, or any Lender through the Agent, may reasonably specify;




     (h) as soon as practicable upon becoming available, copies of all documents evidencing
Material Indebtedness;




     (i) as soon as practicable, and in any event within five (5) Business Days after
receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from any Governmental Authority (including, without limitation, the
SEC (or comparable agency in any applicable non-U.S. jurisdiction), the FCC and the
Federal Trade Commission) concerning any proceeding with, or investigation or possible
investigation or other inquiry by such Governmental Authority regarding financial or other
operational results of any Loan Party or any Subsidiary thereof or any other matter which,
if adversely determined, could reasonably expected to have a Material Adverse Effect;




     (j) no less than five (5) Business Days prior to making (i) any payment to the holders
of the Lead Borrower’s preferred stock or (ii) a Permitted Investment described in clause
(l)(ii) of the definition of such term, a calculation of Excess Availability demonstrating,
to the reasonable satisfaction of the Agent, compliance with the provisions of Section
7.06(c) or clause (l)(ii), as applicable;




     (k) promptly upon the occurrence thereof, any event (i) causing or resulting in the
failure of the Loan Parties to be able to invoice and collect on Accounts arising under the
Value Pay Plan in the ordinary course of business, (ii) causing or resulting in the material
impairment of the integrity of the Value Pay Plan database, or (iii) causing, resulting in
or necessitating the Loan Parties’ reliance on the back-up data files regarding Accounts
arising under the Value Pay Plan; and




     (l) as soon as practicable after request, such additional information regarding the
business affairs, assets (including, but not limited to, the Collateral) financial condition
or operations of any Loan Party or any Subsidiary, or compliance with the terms of the Loan
Documents, as the Agent may from time to time reasonably request.



     In addition to the foregoing, the Loan Parties shall deliver to the Agent’s appraiser, as soon
as practicable, and in any event within five (5) Business Days after request thereof by the Agent
or its appraiser, back-up data files regarding Accounts arising under the Value Pay Plan.


Documents required to be delivered pursuant to Section 6.01(a), Section 6.01(b),
Section 6.02(e) or Section 6.02(f) (to the extent any such documents are included
in materials otherwise filed with the SEC) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date (i) on which the Lead Borrower posts such
documents, or provides a link thereto on the Lead Borrower’s website on the Internet at the website
address listed on Schedule 10.02; or (ii) on which such documents are posted on the Lead
Borrower’s behalf on an Internet or intranet website, if any, to which the Agent has access
(whether a commercial, third-party website or whether sponsored by the Agent); provided
that: (i) the Lead Borrower shall deliver paper copies of such documents to the Agent upon the
Agent’s request until a written request to cease delivering paper copies is given by the Agent and
(ii) the Lead Borrower shall notify the Agent (by telecopier or electronic mail) of the posting of
any such documents and provide






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to the Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents. Notwithstanding anything contained herein, in every instance the
Lead Borrower shall be permitted to deliver any document required to be delivered to the Agent
hereunder by electronic mail electronic versions of such documents (other than the Compliance
Certificates required by Section 6.02(b), with respect to which the Lead Borrower shall deliver
paper copies to the Agent). The Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have no responsibility
to monitor compliance by the Loan Parties with any such request for delivery, and each Lender shall
be solely responsible for maintaining its copies of such documents.




     6.03 Notices. Promptly notify the Agent:




     (a) of the occurrence of any Default (including, without limitation, in connection with
DirecTV’s commencement of any action to enforce any of its rights with respect to the
DirecTV Security Documents or pursuant to applicable Law);




     (b) of any matter that the Lead Borrower or any other Loan Party believes, in its
reasonable judgment, has resulted or could reasonably be expected to result in a Material
Adverse Effect;




     (c) of (i) any breach or non-performance of, or any default or dispute with respect to
Material Indebtedness of any Loan Party or any Subsidiary thereof; (ii) any material
dispute, litigation, investigation, proceeding or suspension between any Loan Party or any
Subsidiary thereof and any Governmental Authority; (iii) the commencement of, or any
material development in, any litigation or proceeding affecting any Loan Party or any
Subsidiary thereof, including pursuant to any applicable Environmental Laws; or (iv) the
occurrence of any event which results in, or after notice or lapse of time or both (after
giving effect to any applicable cure periods) would result in, the revocation, suspension,
adverse modification, non-renewal, impairment, restriction or termination of, or order of
forfeiture with respect to, any FCC License;




     (d) of the occurrence of any ERISA Event;




     (e) of any material change in accounting policies or financial reporting practices by
any Loan Party or any Subsidiary thereof;




     (f) of any change in any Loan Party’s Responsible Officers;




     (g) of the discharge by any Loan Party of its present Registered Public Accounting Firm
or any withdrawal or resignation by such Registered Public Accounting Firm;




     (h) of any collective bargaining agreement or other labor contract to which a Loan
Party becomes a party, or the application for the certification of a collective bargaining
agent;




     (i) of the filing of any Lien for unpaid Taxes against any Loan Party; or




     (j) of any casualty or other insured damage in excess of $250,000 to any portion of the
Collateral or the commencement of any action or proceeding for the taking of any interest in
a material portion of the Collateral under power of eminent domain or by condemnation or
similar proceeding or if any material portion of the Collateral is damaged or destroyed.



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Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
of the Lead Borrower setting forth details of the occurrence referred to therein and stating what
action the Lead Borrower has taken and proposes to take with respect thereto. Each notice pursuant
to Section 6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.




     6.04 Payment of Obligations Pay and discharge on a timely basis as the same shall become due
and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments
and governmental charges or levies upon it or its properties or assets, (b) all lawful claims
(including, without limitation, claims of landlords, warehousemen, customs brokers, and carriers)
which, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and
when due and payable, but subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness, except, in each case, where (i) the validity or amount
thereof is being contested in good faith by
appropriate proceedings, (ii) such Loan Party has set aside on its books adequate reserves
with respect thereto in accordance with GAAP, (iii) such contest effectively suspends collection of
the contested obligation and enforcement of any Lien securing such obligation, (iv) no Lien has
been filed with respect thereto and (v) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect; provided that for purposes of this
Section 6.04, the Loan Parties shall be deemed to pay and discharge on a timely basis (x)
accounts payable to MSOs which are not older than 90 days of the due date and (y) other accounts
payable not older than 30 days of the due date. Nothing contained in this Section 6.04
shall be deemed to limit the rights of the Agent with respect to determining Reserves pursuant to
this Agreement.



     6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect
its legal existence and good standing under the Laws of the jurisdiction of its organization or
formation except (i) with respect to the Inactive Subsidiaries, or (ii) in a transaction permitted
by Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its Intellectual Property, except to the
extent such Intellectual Property is no longer used or useful in the conduct of the business of the
Loan Parties.



     6.06 Maintenance of Properties (a) Maintain, preserve and protect all of its material
properties and equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals
and replacements thereof except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect.



     6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance
companies reasonably acceptable to the Agent which are not Affiliates of the Loan Parties,
insurance with respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business and operating in the
same or similar locations or as is required by applicable Law, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons and as are reasonably
acceptable to the Agent.




          (a) Fire and extended coverage policies maintained with respect to any Collateral shall be
endorsed or otherwise amended to include (i) a non-contributing mortgage clause (regarding
improvements to real property) and lenders’ loss payable clause (regarding personal property), in
form and substance satisfactory to the Agent, which endorsements or amendments shall provide that
the insurer



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shall pay all proceeds otherwise payable to the Loan Parties under the policies
directly to the Agent, as its interests may appear, (ii) a provision to the effect that none of the
Loan Parties, Credit Parties or any other Person shall be a co-insurer and (iii) such other
provisions as the Agent may reasonably require from time to time to protect the interests of the
Credit Parties. Commercial general liability policies shall be endorsed to name the Agent as an
additional insured. Each policy referred to in this Section 6.07(a) shall also provide
that it shall not be canceled, modified or not renewed except upon not less than thirty (30) days’
prior written notice thereof by the insurer. The Lead Borrower shall deliver to the Agent (i)
promptly (but in any event at least five (5) Business Days) prior to the cancellation, modification
or non-renewal of any policy of insurance described in this Section 6.07(a), a copy of a
renewal or replacement policy (or other evidence of renewal of a policy previously delivered to the
Agent, including an insurance binder) together with evidence satisfactory to the Agent of payment
of the premium therefor, (ii) upon the Agent’s written request, full information as to all
insurance carried by the Loan Parties, and (iii) promptly (but in any event within five (5)
Business Days) following receipt of same, any notice of cancellation, modification or non-renewal
of any such policy of insurance (other than annual notifications of cancellation, or non-renewal as
of the end of any policy’s stated term). The Loan Parties shall maintain
the Agent as the lender’s loss payee, as its interests may appear, in respect of all property
insurance policies covering any Collateral required hereunder.




          (b) If at any time the area in which any Eligible Real Estate is located is designated (i) a
“flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management
Agency (or any successor agency), obtain flood insurance in such total amount as is reasonable and
customary for companies engaged in the Business, and otherwise comply with the National Flood
Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as amended from time
to time, or (ii) a “Zone 1” area, obtain earthquake insurance in such total amount as is reasonable
and customary for companies engaged in the Business.




          (c) None of the Credit Parties, or their agents or employees shall be liable for any loss or
damage insured by the insurance policies required to be maintained under this Section 6.07.
Each Loan Party shall look solely to its insurance companies or any other parties other than the
Credit Parties for the recovery of such loss or damage and such insurance companies shall have no
rights of subrogation against any Credit Party or its agents or employees. If, however, the
insurance policies do not provide waiver of subrogation rights against such parties, as required
above, then the Loan Parties hereby agree, to the extent permitted by law, to waive their right of
recovery, if any, against the Credit Parties and their agents and employees. The designation of
any form, type or amount of insurance coverage by the any Credit Party under this Section
6.07 shall in no event be deemed a representation, warranty or advice by such Credit Party that
such insurance is adequate for the purposes of the business of the Loan Parties or the protection
of their properties.




          (d) Maintain for themselves and their Subsidiaries, a Directors and Officers insurance policy,
and other policies including employee dishonesty, forgery or alteration, theft, disappearance and
destruction, robbery and safe burglary, property, and computer fraud coverage with responsible
companies in such amounts as are customarily carried by business entities engaged in similar
businesses similarly situated, and will upon request by the Agent furnish the Agent certificates
evidencing renewal of each such policy.




          (e) Permit any representatives that are designated by the Agent to inspect the insurance
policies maintained by or on behalf of the Loan Parties and to inspect books and records related
thereto and any properties covered thereby. The Loan Parties shall pay the reasonable fees and
expenses of any representatives retained by the Agent to conduct any such inspection.





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     6.08 Compliance with Laws. Comply in all material respects with the requirements of all Laws
and all orders, writs, injunctions and decrees applicable to it or to its business or property,
except in such instances in which (a) such requirement of Law or order, writ, injunction or decree
is being contested in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves have been set aside and maintained by the Loan Parties in accordance
with GAAP; (b) such contest effectively suspends enforcement of the contested Laws, and (c) the
failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.



     6.09 Books and Records; Accountants.



          (a) Maintain proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Loan Parties or such Subsidiary, as the case may be; and
(ii) maintain such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over the Loan Parties or
such Subsidiary, as the case may be.




          (b) At all times retain a Registered Public Accounting Firm which is reasonably satisfactory
to the Agent and shall instruct such Registered Public Accounting Firm to cooperate with, and be
available to, the Agent or its representatives to discuss the Loan Parties’ financial performance,
financial condition, operating results, controls, and such other matters, within the scope of the
retention of such Registered Public Accounting Firm, as may be raised by the Agent.




     6.10 Inspection Rights.



          (a) Permit representatives and independent contractors of the Agent and, when an Event of
Default exists, each Lender, to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and Registered Public Accounting Firm,
all at the expense of the Loan Parties and at such reasonable times during normal business hours
and as often as may be reasonably desired, upon reasonable advance notice to the Lead Borrower;
provided, however, that when an Event of Default exists the Agent (or any of its
representatives or independent contractors) may do any of the foregoing at the expense of the Loan
Parties at any time during normal business hours and without advance notice.




          (b) Upon the request of the Agent after reasonable prior notice, work cooperatively to permit
the Agent or professionals (including investment bankers, consultants, accountants, lawyers and
appraisers) retained by the Agent to conduct appraisals, commercial finance examinations and other
evaluations, including, without limitation, of (i) the Lead Borrower’s practices in the computation
of the Borrowing Base and (ii) the assets included in the Borrowing Base and related financial
information such as, but not limited to, sales, gross margins, payables, accruals and reserves.
The Loan Parties shall pay the fees and expenses of the Agent and such professionals with respect
to such evaluations and appraisals; provided that the Loan Parties and the Agent agree
that, as long as the Borrowing Base exceeds $37,500,000, the Agent shall undertake, at the Loan
Parties’ expense: (i) up to two (2) appraisals of Borrowers’ Real Estate included in the Borrowing
Base as Eligible Real Estate in each Fiscal Year, (ii) up to three (3) appraisals of Borrowers’
Inventory and of Borrower’s Accounts each Fiscal Year, and (iii) up to three (3) commercial finance
examinations each Fiscal Year; provided that if the Borrowing Base is less than or equal to
$37,500,000 at any time, the Agent may undertake, at the Loan Parties’ expense, quarterly
appraisals and examinations. Notwithstanding the foregoing, the Agent may cause additional






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appraisals and commercial finance examinations to be undertaken in its discretion upon reasonable
notice (i) as it deems necessary or appropriate, at its own expense, or (ii) if required by
applicable Law or if a Default shall have occurred and be continuing, at the expense of the Loan
Parties. The Agent agrees that, so long as no Default or Event of Default is then continuing, the
Agent shall provide copies of such appraisals to the Lead Borrower upon the request of the Lead
Borrower, provided that such appraisals shall be distributed for informational purposes
only and shall not provide any Loan Party with any recourse against the Agent or any other Credit
Party with respect to the contents of such appraisals or entitle any Loan Party to challenge the
right of the Agent to impose or modify Reserves or to change eligibility criteria in accordance
with the terms hereof. Without limiting the foregoing, each Loan Party (i) expressly agrees and
acknowledges that the Agent makes no representation or warranty as to the accuracy of such
appraisals, and shall not be liable for any information contained therein, and (ii) expressly
agrees and acknowledges that such appraisals are not comprehensive audits or examinations, that the
Agent or any other party performing any audit or examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as
well as on representations of the Loan Parties’ personnel.




          (c) Permit the Agent, from time to time, engage a geohydrologist, an independent engineer or
other qualified consultant or expert, reasonably acceptable to the Agent, at the expense of the
Loan Parties, to undertake Phase I environmental site assessments during the term of this Agreement
of
the Eligible Real Estate, provided that such assessments may only be undertaken (i) during the
continuance of an Event of Default. (ii) if a Loan Party receives any notice or obtains knowledge
of (A) any potential or known release of any Hazardous Materials at or from any Eligible Real
Estate, notification of which must be given to any Governmental Authority under any Environmental
Law, or notification of which has, in fact, been given to any Governmental Authority, or (B) any
complaint, order, citation or notice with regard to air emissions, water discharges, or any other
environmental health or safety matter affecting any Loan Party or any Eligible Real Estate from any
Person (including, without limitation, the Environmental Protection Agency). Environmental
assessments may include detailed visual inspections of the Real Estate, including, without
limitation, any and all storage areas, storage tanks, drains, dry wells and leaching areas, and the
taking of soil samples, surface water samples and ground water samples, as well as such other
investigations or analyses as are reasonably necessary for a determination of the compliance of the
Real Estate and the use and operation thereof with all applicable Environmental Laws. The
Borrowers will, and will cause each of their Subsidiaries to, cooperate in all respects with the
Agent and such third parties to enable such assessment and evaluation to be timely completed in a
manner reasonably satisfactory to the Agent.




     6.11 Use of Proceeds Use the proceeds of the Loans for working capital and other general
corporate purposes of the Loan Parties, in each case to the extent expressly permitted under
applicable Law and the Loan Documents.



     6.12 Additional Loan Parties. Notify the Agent at the time that any Person becomes a
Subsidiary, and promptly thereafter (and in any event within fifteen (15) days), cause any such
Person (a) to (i) become a Loan Party by executing and delivering to the Agent a Joinder to this
Agreement or a counterpart of the Facility Guaranty or such other document as the Agent shall deem
appropriate for such purpose, (ii) grant a Lien to the Agent on such Person’s assets to secure the
Obligations, and (iii deliver to the Agent documents of the types referred to in clauses (iii) and
(iv) of Section 4.01(a) and favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (a)), and (b) if any Equity Interests or Indebtedness of such
Person are owned by or on behalf of any Loan Party, to pledge such Equity Interests and promissory
notes evidencing such Indebtedness, in each case in form, content and scope reasonably



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satisfactory
to the Agent. In no event shall compliance with this Section 6.12 waive or be deemed a
waiver or consent to any transaction giving rise to the need to comply with this Section
6.12 if such transaction was not otherwise expressly permitted by this Agreement or constitute
or be deemed to constitute, with respect to any Subsidiary, an approval of such Person as a
Borrower or permit the inclusion of any acquired assets in the computation of the Borrowing Base.




     6.13 Cash Management.



          (a) On or prior to the Closing Date:





          (i) deliver to the Agent copies of notifications (each, a “Credit Card
Notification”) substantially in the form attached hereto as Exhibit D which have
been executed on behalf of such Loan Party and delivered to such Loan Party’s credit card
clearinghouses and processors listed on Schedule 5.21(b); and




          (ii) enter into a Blocked Account Agreement satisfactory in form and substance to the
Agent with each Blocked Account Bank with respect to such Blocked Accounts maintained with
such Blocked Account Bank as the Agent may reasonably require.



          (b) The Loan Parties shall ACH or wire transfer no less frequently than daily (and whether or
not there are then any outstanding Obligations) to a Blocked Account all amounts on deposit
in each DDA (net of any minimum balance, not to exceed $2,500.00, as may be required to be
maintained in such DDA pursuant to the requirements of the depository institution at which such DDA
is maintained and other than in respect of the Specified DDAs), which amounts shall include all
cash receipts and collections, including, without limitation, the following:





          (i) all available cash receipts from the sale of Inventory and other assets (whether or
not constituting Collateral), other than, to the extent no Event of Default is then
continuing, such cash proceeds received on account of a Permitted Disposition;




          (ii) all proceeds of collections of Accounts;




          (iii) all Net Proceeds, and all other cash payments received by a Loan Party from any
Person or from any source or on account of any sale or other transaction or event (other
than, to the extent no Event of Default is then continuing, a Permitted Disposition); and




          (iv) the proceeds of all credit card charges.



          (c) Each Blocked Account Agreement shall require, after the furnishing of notice by the Agent
to the applicable Blocked Account Bank (which notice may be given by the Agent solely upon the
occurrence and during the continuance of an Event of Default), that the Loan Parties shall not be
entitled to access the Blocked Accounts or direct the disposition of any balance of funds then
maintained in such Blocked Accounts and that the applicable Blocked Account Bank shall follow
solely the instructions of the Agent with respect to such Blocked Accounts and the disposition of
funds then maintained therein.




          (d) The Loan Parties hereby acknowledge and agree that (i) from and after the furnishing of
notice by the Agent to the applicable Blocked Account Bank in accordance with Section
6.13(c), the Loan Parties have no right of withdrawal from any Blocked Account, (ii) the funds
on deposit



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in the Blocked Accounts shall at all times be collateral security for all of the
Obligations and (iii) the funds on deposit in the Blocked Accounts shall be applied as provided in
this Agreement. Without limiting the other provisions of this Section 6.13, after the
occurrence and during the continuance of an Event of Default, in the event that any Loan Party
receives or otherwise has dominion and control of any such proceeds or collections, such proceeds
and collections shall be held in trust by such Loan Party for the Agent, shall not be commingled
with any of such Loan Party’s other funds or deposited in any account of such Loan Party and shall,
not later than the Business Day after receipt thereof, be deposited into a Blocked Account or dealt
with in such other fashion as such Loan Party may be instructed by the Agent.




          (e) Upon the request of the Agent, the Loan Parties shall cause bank statements and/or other
reports to be delivered to the Agent not less often than monthly, accurately setting forth all
amounts deposited in each Blocked Account to ensure the proper transfer of funds as set forth
above.




     6.14 Information Regarding the Collateral.



          (a) Furnish to the Agent at least thirty (30) days prior written notice of any change in:
(i) any Loan Party’s name or in any trade name used to identify it in the conduct of its business
or in the ownership of its properties; (ii) the location of any Loan Party’s chief executive
office, its principal place of business, any office in which it maintains books or records relating
to Collateral owned by it or any office or facility at which Collateral owned by it is located
(including the establishment of any such new office or facility); (iii) any Loan Party’s
organizational structure or jurisdiction of incorporation or formation; (iv) any Loan Party’s
Federal Taxpayer Identification Number or organizational identification
number assigned to it by its state of organization, or (v) the change of any Borrower URL.
The Loan Parties agree not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the UCC or otherwise that are required in order for the
Agent to continue at all times following such change to have a valid, legal and perfected first
priority security interest in all the Collateral for its own benefit and the benefit of the other
Credit Parties.




          (b) Should any of the information on any of Schedule 1.02, Schedule
5.08(b)(1), Schedule 5.08(b)(2) or Schedule 5.09 become inaccurate or
misleading in any material respect as a result of changes after the Closing Date, the Lead Borrower
shall advise the Agent in writing of such revisions or updates as may be necessary or appropriate
to update or correct the same. From time to time as may be reasonably requested by the Agent, the
Lead Borrower shall supplement each such Schedule hereto, or any representation herein or in any
other Loan Document, with respect to any matter arising after the Closing Date that, if existing or
occurring on the Closing Date, would have been required to be set forth or described in such
Schedule or as an exception to such representation or that is necessary to correct any information
in such Schedule or representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Schedule, such Schedule shall be appropriately marked to show the changes
made therein). Notwithstanding the foregoing, no supplement or revision to any such Schedule or
representation shall be deemed the Credit Parties’ consent to the matters reflected in such updated
Schedules or revised representations nor permit the Loan Parties to undertake any actions otherwise
prohibited hereunder or fail to undertake any action required hereunder from the restrictions and
requirements in existence prior to the delivery of such updated Schedules or such revision of a
representation; nor shall any such supplement or revision to any such Schedule or representation be
deemed the Credit Parties’ waiver of any Default resulting from the matters disclosed therein.




     6.15 Physical Inventories.



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          (a) Cause all Inventory to be fully counted through cycle counts at least three (3) times per
calendar year and audited annually at year end, at the expense of the Loan Parties, in, in each
case consistent with past practices, conducted by such inventory takers as are satisfactory to the
Agent and following such methodology as is consistent with the methodology used in the immediately
preceding cycle count or as otherwise may be satisfactory to the Agent. The Agent, at the expense
of the Loan Parties, may participate in and/or observe each scheduled cycle count of Inventory
which is undertaken on behalf of any Loan Party. The Lead Borrower, within five (5) days
following the end of each fiscal quarter of the Lead Borrower, shall provide the Agent with a
cumulative reconciliation of the results of the cycle counts conducted during such fiscal quarter
and shall post such results to the Loan Parties’ stock ledgers and general ledgers, as applicable.




          (b) Permit the Agent, in its Credit Judgment, if any Default or Event of Default exists, to
cause additional such inventories to be taken as the Agent determines (each, at the expense of the
Loan Parties).




     6.16 Environmental Laws.



          (a) Conduct its operations and keep and maintain its Real Estate in material compliance with
all Environmental Laws; (b) obtain and renew all environmental permits necessary for its operations
and properties; and (c) implement any and all investigation, remediation, removal and response
actions that are appropriate or necessary to maintain the value and marketability of the Real
Estate or to otherwise comply with Environmental Laws pertaining to the presence, generation,
treatment, storage, use, disposal, transportation or release of any Hazardous Materials on, at, in,
under, above, to, from or about any of its Real Estate, provided, however, that
neither a Loan Party nor any of its Subsidiaries shall be required to undertake any such cleanup,
removal, remedial or other action to the
extent that its obligation to do so is being contested in good faith and by proper proceedings
and adequate reserves have been set aside and are being maintained by the Loan Parties with respect
to such circumstances in accordance with GAAP.




     6.17 Further Assurances.



          (a) Execute any and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of financing statements and
other documents), that may be required under any applicable Law, or which the Agent may request, to
effectuate the transactions contemplated by the Loan Documents or to grant, preserve, protect or
perfect the Liens created or intended to be created by the Security Documents or the validity or
priority of any such Lien, all at the expense of the Loan Parties. The Loan Parties also agree to
provide to the Agent, from time to time upon request, evidence satisfactory to the Agent as to the
perfection and priority of the Liens created or intended to be created by the Security Documents.




          (b) If any material assets are acquired by any Loan Party after the Closing Date (other than
assets constituting Collateral under the Security Documents that become subject to the Lien of the
Security Documents upon acquisition thereof), notify the Agent thereof, and the Loan Parties will
cause such assets to be subjected to a Lien securing the Obligations and will take such actions as
shall be necessary or shall be requested by the Agent to grant and perfect such Liens, including
actions described in paragraph (a) of this Section 6.17, all at the expense of the Loan
Parties. In no event shall compliance with this Section 6.17(b) waive or be deemed a waiver
or consent to any transaction giving rise to the need to comply with this Section 6.17(b)
if such transaction was not otherwise expressly permitted by this






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Agreement or constitute or be
deemed to constitute consent to the inclusion of any acquired assets in the computation of the
Borrowing Base.




          (c) Upon the request of the Agent, use its best efforts to cause any of its landlords to
deliver a Collateral Access Agreement to the Agent in such form as the Agent may reasonably
require.




     6.18 Compliance with Terms of Leaseholds Except as otherwise expressly permitted hereunder,
make all payments and otherwise perform all obligations in respect of all Leases of real property
to which any Loan Party or any of its Subsidiaries is a party, keep such Leases in full force and
effect and not allow such Leases to lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled, notify the Agent of any default by any party with respect to such Leases
and cooperate with the Agent in all respects to cure any such default, and cause each of its
Subsidiaries to do so; provided that this provision shall not require the Loan Parties to renew any
Lease that terminates in accordance with the terms thereof and that any Loan Party determines to be
unnecessary for the operation of the business in its reasonable business judgment.



     6.19 Minimum Unrestricted Cash. At all times, maintain not less than $5,000,000 of
Unrestricted Cash.



     6.20 Average FICO Scores. At all times, cause the Average FICO Score of all customers
participating in the Value Pay Plan for whom a FICO Score has been obtained to exceed 620 to be
tested on a rolling six month basis. At no time shall Borrowers permit the Average FICO Score to
be less than 600 in any two (2) consecutive months.



     6.21 Back-Up Servicer. Within ninety (90) days after the Closing Date, the Loan Parties shall
establish a back-up servicing arrangement for Accounts under the Value Pay Plan with a Person who
is Payment Card Industry Compliant and on terms reasonably acceptable to the Agent;
provided that any fees and expenses payable to such servicer in connection with such
back-up servicing arrangement shall
be payable by the Loan Parties as and to the extent described in the Fee Letter. The Loan
Parties shall furnish monthly (or more frequently as the Agent may reasonably request) back-up
tapes to such servicer, together with such other information as the Agent or such servicer may
reasonably require. The Loan Parties shall maintain such a back-up servicer at all times until the
Loans are paid in full.



ARTICLE VII

NEGATIVE COVENANTS




     So long as any Lender shall have any Term Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, no Loan Party shall, nor shall it permit any
Subsidiary to, directly or indirectly:



     7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired or sign or file or suffer to exist
under the UCC or any similar Law or statute of any jurisdiction a financing statement that names
any Loan Party or any Subsidiary thereof as debtor; sign or suffer to exist any security agreement
authorizing any Person thereunder to file such financing statement; sell any of its property or
assets subject to an understanding or agreement (contingent or otherwise) to repurchase such
property or assets with recourse to it or any of its Subsidiaries; or assign or otherwise transfer
any accounts or other rights to receive income, other than, as to all of the above, Permitted
Encumbrances.



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     7.02 Investments. Make any Investments, except Permitted Investments.



     7.03 Indebtedness; Disqualified Stock. Either (a) create, incur, assume, guarantee, suffer to
exist or otherwise become or remain liable with respect to, any Indebtedness, except Permitted
Indebtedness or (b) issue Disqualified Stock.



     7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another
Person, (or agree to do any of the foregoing), except that, so long as no Default or Event of
Default shall have occurred and be continuing prior to or immediately after giving effect to any
action described below or would result therefrom:




     (a) any Subsidiary which is not a Loan Party may merge with (i) a Loan Party,
provided that the Loan Party shall be the continuing or surviving Person, or (ii)
any one or more other Subsidiaries which are not Loan Parties, provided that when
any wholly-owned Subsidiary is merging with another Subsidiary, the wholly-owned Subsidiary
shall be the continuing or surviving Person;




     (b) any Subsidiary which is a Loan Party may merge into any Subsidiary which is a Loan
Party or into the Borrower, provided that in any merger involving the Borrower, the
Borrower shall be the continuing or surviving Person;




     (c) in connection with a Permitted Investment, any Subsidiary of a Loan Party may merge
with or into or consolidate with any other Person or permit any other Person to merge with
or into or consolidate with it; provided that (i) the Person surviving such merger
shall be a wholly-owned Subsidiary of a Loan Party and (ii) in the case of any such merger
to which any Loan Party is a party, such Loan Party is the surviving Person;




     (d) the Inactive Subsidiaries may merge, dissolve, liquidate or consolidate with or
into another Person.



     7.05 Dispositions. Make any Disposition or enter into any agreement to make any Disposition,
except Permitted Dispositions.



     7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that, so long as no Default or
Event of Default shall have occurred and be continuing prior to or immediately after giving effect
to any action described below or would result therefrom:




     (a) each Subsidiary of a Loan Party may make Restricted Payments to any Loan Party;




     (b) the Loan Parties and each Subsidiary may declare and make dividend payments or
other distributions payable solely in the common stock or other common Equity Interests of
such Person;




     (c) the Loan Parties may make payments to the holders of the Lead Borrower’s preferred
stock on account of “Excess Cash Balance” (as defined in the ValueVision Certificate of
Designation as in effect as of the Closing Date and without giving effect to any future
amendments or modifications thereof) and redeem shares of the Lead Borrower’s preferred
stock



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as and to the extent required pursuant to Section V of the ValueVision Certificate of
Designation (as in effect as of the Closing Date and without giving effect to any future
amendments or modifications thereof), as long as, in each case, (i) after giving pro forma
effect thereto, Excess Availability was no less than $10,000,000 at any time during the 45
day period prior to making such payment, and (ii) after giving pro forma effect thereto,
Excess Availability is no less than $10,000,000 and is projected to be no less than
$10,000,000 at any time during the 45 day period subsequent to making such payment; and




     (d) the Lead Borrower may make payments for withholding taxes to the extent required in
connection with the exercise of employee stock options in exchange for common stock of any
such Person pursuant to any net exercise provision described in the documents governing such
stock options.



     7.07 Prepayments of Indebtedness. Prepay, redeem, purchase, defease or otherwise satisfy
prior to the scheduled maturity thereof in any manner any Indebtedness, or make any payment in
violation of any subordination terms of any Subordinated Indebtedness, except (a) as long as no
Event of Default then exists or would occur as a result of any such payment, any repayments,
prepayments, repurchases, redemptions or defeasances of Permitted Indebtedness (other than
Subordinated Indebtedness), (b) as long as no Event of Default then exists, repayments and
prepayments of Subordinated Indebtedness in accordance with the subordination terms thereof (which
subordination terms shall have been approved by the Required Lenders in writing), and (c)
refinancings and refundings of such Indebtedness to the extent permitted pursuant to this
Agreement.



     7.08 Change in Nature of Business. In the case of each of the Loan Parties, engage in any
line of business substantially different from the Business conducted by the Loan Parties and their
Subsidiaries on the date hereof or any business substantially related or incidental thereto.



     7.09 Transactions with Affiliates. Enter into, renew, extend or be a party to any transaction
of any kind with any Affiliate of any Loan Party, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to the Loan Parties or
such Subsidiary as would be obtainable by the Loan Parties or such Subsidiary at the time in a
comparable arm’s length
transaction with a Person other than an Affiliate, provided that the foregoing
restriction shall not apply to a transaction between or among the Loan Parties.



     7.10 Burdensome Agreements. Enter into or permit to exist any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary
to make Restricted Payments or other distributions to any Loan Party or to otherwise transfer
property to or invest in a Loan Party, (ii) of any Subsidiary to Guarantee the Obligations, (iii)
of any Subsidiary to make or repay loans to a Loan Party, or (iv) of the Loan Parties or any
Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person in favor of
the Agent; provided, however, that this clause (iv) shall not prohibit any negative
pledge incurred or provided in favor of any holder of Indebtedness permitted under clauses (c) or
(f) of the definition of Permitted Indebtedness solely to the extent any such negative pledge
relates to the property financed by or the subject of such Indebtedness; or (b) requires the grant
of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation
of such Person.



     7.11 Use of Proceeds. Use the proceeds of the Loans, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (a) to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or



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carrying margin stock or to refund Indebtedness originally incurred for such purpose; or (b) for
purposes other than those permitted under this Agreement.




     7.12 Amendment of Material Documents.



     Amend, modify or waive any of a Loan Party’s rights under (a) its Organization Documents in a
manner materially adverse to the Credit Parties, or (b) any Material Indebtedness, in each case to
the extent that such amendment, modification or waiver would be reasonably likely to have a
Material Adverse Effect.



     7.13 Fiscal Year.



     Change the Fiscal Year of any Loan Party, or the accounting policies or reporting practices of
the Loan Parties, except as permitted by GAAP or SEC regulatory rules.



     7.14 Deposit Accounts; Credit Card Processors.



     Open new DDAs or Blocked Accounts unless the Loan Parties shall have delivered to the Agent
appropriate Blocked Account Agreements consistent with the provisions of Section 6.13 and
otherwise satisfactory to the Agent. No Loan Party shall (i) maintain any bank accounts other than
those expressly contemplated herein or in Section 6.13 hereof, or (ii) enter into any
agreements with credit card processors other than those expressly contemplated in Section
6.13 hereof, in each case, without the Agent’s prior written consent.



     7.15 Inactive Subsidiaries; Norwell. (i) Permit any of the Inactive Subsidiaries to acquire
any material assets or conduct any business, or (ii) permit Norwell to acquire any assets or
conduct any business other than as described in Section 5.26.



     7.16 Change of Name. Change the name (including any trade name) under which the Borrowers do
business (including, without limitation, any Borrower URL, other than (a) in the time frames and
manner as previously disclosed to the Agent, or (b) on 180 days prior written notice to the Agent.



     7.17 Modification or Maturity of Material Indebtedness.




     (a) Fail to defease, repurchase or redeem any Material Indebtedness, or to extend the maturity
thereof, prior to the scheduled maturity date thereof; or




     (b) Modify, amend, waive or terminate the rights of the Agent to access the Eden
Prairie headquarters as provided in the DirecTV Security Documents as in effect on the
Closing Date.



     7.18 Modification of Value Pay Plan. Without the consent of the Required Lenders, modify any
provision of the Value Pay Plan to: (i) cause the number of payments permitted thereunder to exceed
six (6); (ii) permit payments to be made on a basis other than monthly (or a shorter period as the
Borrowers may determine); (iii) permit or require balances to be paid in a balloon payment; or (iv)
permit payments to be made by a means other than relating through the automatic charging of a
customer’s credit card (except in collections circumstances where other payment methods may be
used).




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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES




     8.01 Events of Default. Any of the following shall constitute an Event of Default:




     (a) Non-Payment. The Borrowers or any other Loan Party fails to pay when and
as required to be paid herein, (i) any amount of principal of any Loan, or (ii) within two
(2) Business Days of when due, any interest on any Loan, or (iii) within three (3) Business
Days of when due, any fee or any other amount payable hereunder or under any other Loan
Document; or




     (b) Specific Covenants. (i) Any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of Section 6.01, clauses (a), (b) or
(c) of Section 6.02, Section 6.12 or Section 6.14 and such failure
continues for three (3) Business Days; or (ii) any Loan Party fails to perform or observe
any term, covenant or agreement contained in any of Section 6.02 (other than in
respect of clauses (a), (b) and (c) of such Section 6.02, which clauses shall be
subject to clause (i) above), Section 6.03, Section 6.05, Section
6.07, Section 6.10, Section 6.11, Section 6.13, Section
6.19 or Section 6.20 or Article VII; or




     (c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan
Document on its part to be performed or observed and such failure continues for 15 days; or




     (d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of any Borrower or
any other Loan Party herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith (including, without limitation, any Borrowing Base
Certificate) shall be incorrect or misleading in any material respect when made or deemed
made; or




     (e) Cross-Default. (i) Other than with respect to Indebtedness under any MSO
Contract (except as provided in clause (ii) hereof), any Loan Party or any Subsidiary
thereof (A) fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Material Indebtedness
(including undrawn committed or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement), or (B) fails to observe or
perform any other agreement or condition relating to any such Material Indebtedness or
contained in any instrument or agreement evidencing, securing or relating thereto, or any
other event occurs, the effect of which default or other event is to cause, or to permit the
holder or holders of such Material Indebtedness or the beneficiary or beneficiaries of any
Guarantee thereof (or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be
demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically
or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be
made, prior to its stated maturity, or such Guarantee to become payable or cash collateral
in respect thereof to be demanded; or (ii) DirecTV commences any action to enforce any of
its rights with respect to the DirecTV Security Documents or pursuant to applicable Law; or




     (f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor Relief Law, or
makes an assignment for the benefit of creditors; or applies for or consents to the
appointment of any



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receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or a proceeding shall be commenced
or a petition filed, without the application or consent of such Person, seeking or
requesting the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed and the appointment continues undischarged,
undismissed or unstayed for 30 calendar days or an order or decree approving or ordering any
of the foregoing shall be entered; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any material part of its property is instituted without the
consent of such Person and continues undismissed or unstayed for 30 calendar days, or an
order for relief is entered in any such proceeding; or




     (g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due in the ordinary course of business, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully bonded within
10 days after its issuance or levy; or




     (h) Judgments. There is entered against any Loan Party or any Subsidiary
thereof (i) one or more judgments or orders for the payment of money in an aggregate amount
(as to all such judgments and orders) exceeding $500,000 (to the extent not covered by
independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best
Company, has been notified of the potential claim and does not dispute coverage), or (ii)
any one or more non-monetary judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case, (A)
enforcement proceedings are commenced by any creditor upon such judgment or order, or (B)
there is a period of 10 consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, is not in effect; or




     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result in liability
of any Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the
PBGC in an aggregate amount in excess of $500,000 or which would reasonably likely result in
a Material Adverse Effect, or (ii) a Loan Party or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan
in an aggregate amount in excess of $500,000 or which would reasonably likely result in a
Material Adverse Effect; or




     (j) Invalidity of Loan Documents. (i) Any provision of any Loan Document, at
any time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to
be in full force and effect; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any provision of any Loan Document; or any Loan Party
denies that it has any or further liability or obligation under any provision of any Loan
Document, or purports to revoke, terminate or rescind any provision of any Loan Document or
seeks to avoid, limit or otherwise adversely affect any Lien purported to be created under
any Security Document; or (ii) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party or any other Person not to be, a
valid and perfected Lien on any Collateral, with the priority required by the applicable
Security Document; or




     (k) Change of Control. There occurs any Change of Control; or



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     (l) Cessation of Business. Except as otherwise expressly permitted hereunder,
any Loan Party shall take any action to suspend the operation of its business in the
ordinary course, liquidate all or a material portion of its assets, or employ an agent or
other third party to conduct a program of liquidations of any material portion of its
business; or




     (m) Loss of Collateral. There occurs any uninsured loss to any material
portion of the Collateral; or




     (n) Indictment. The criminal indictment of any Loan Party or any Responsible
Officer involving moral turpitude in the performance of his employment under any federal,
state, municipal, and other criminal statute, rule, regulation, order, or other requirement
having the force of law for a felony and either (i) such indictment remains unquashed or
such legal process remains undismissed for a period of ninety (90) days or more, or (ii) the
Responsible Officer so indicted is promptly terminated from such position, in each case,
unless the Agent, in its reasonable discretion, determines that the indictment is not
material;




     (o) Guaranty. The termination or attempted termination of any Facility
Guaranty except as expressly permitted hereunder or under any other Loan Document; or




     (p) FCC Licenses. The amendment, modification, revocation, non-renewal,
expiration, or termination of any FCC License, which could reasonably be expected to have a
Material Adverse Effect.



     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the
Agent may (only if Exigent Circumstances exist), or, at the request of the Required Lenders shall,
take any or all of the following actions:




     (a) declare the unpaid principal amount of all outstanding Loans, all interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Loan Parties; and




     (b) whether or not the maturity of the Obligations shall have been accelerated pursuant
hereto, proceed to protect, enforce and exercise all rights and remedies of the Credit
Parties under this Agreement, any of the other Loan Documents or applicable Law, including,
but not limited to, by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in this
Agreement and the other Loan Documents or any instrument pursuant to which the Obligations
are evidenced, and, if such amount shall have become due, by declaration or otherwise,
proceed to enforce the payment thereof or any other legal or equitable right of the Credit
Parties;


provided, however, that upon the entry of an order for relief with respect to any
Loan Party or any Subsidiary thereof under any Debtor Relief Laws, the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall automatically become
due and payable, without further act of the Agent or any Lender.




     No remedy herein is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision of Law.



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     8.03 Application of Funds. After the exercise of remedies provided for in Section
8.02 (or after the Loans have automatically become immediately due and payable, any amounts
received on account of the Obligations shall be applied by the Agent in the following order:




     First, to payment of that portion of the Obligations constituting fees,
indemnities, Credit Party Expenses and other amounts (including fees, charges and
disbursements of counsel to the Agent and amounts payable under Article III) payable
to the Agent, its capacity as such;




     Second, to payment of that portion of the Obligations constituting indemnities,
Credit Party Expenses, and other amounts (other than principal, interest and fees) payable
to the Lenders (including fees, charges and disbursements of counsel to the respective
Lenders and amounts payable under Article III), ratably among them in proportion to
the amounts described in this clause Second payable to them;




     Third, to the Agent and to the extent any Lender has funded its participation
therein, such Lender, of that portion of the Obligations constituting principal and accrued
and unpaid interest on any Protective Advances, ratably among them in proportion to the
amounts described in this clause Third payable to them;




     Fourth, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and other Obligations, and fees (but excluding any Term Loan
Termination Fee), ratably among the Lenders in proportion to the respective amounts
described in this clause Fourth payable to them;




     Fifth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the respective amounts
described in this clause Fifth held by them;




     Sixth, to payment of all other Obligations (including without limitation the
cash collateralization of unliquidated indemnification obligations as provided in
Section 10.11), ratably among the Credit Parties in proportion to the respective
amounts described in this clause Sixth held by them; and




     Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Loan Parties or as otherwise required by Law.



ARTICLE IX

THE AGENT




     9.01 Appointment and Authority.



     Each of the Lenders hereby irrevocably appoints Crystal Financial LLC to act on its behalf as
the Agent hereunder and under the other Loan Documents and authorizes the Agent to take such
actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof
or thereof, together with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Agent and the Lenders, and no Loan
Party or any Subsidiary thereof shall have rights as a third party beneficiary of any of such
provisions.



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     9.02 Rights as a Lender. The Persons serving as the Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it were not the Agent
and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in any kind of
business with the Loan Parties or any Subsidiary or other Affiliate thereof as if such Person were
not the Agent hereunder and without any duty to account therefor to the Lenders.



     9.03 Exculpatory Provisions. The Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the generality of the
foregoing, the Agent:




     (a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;




     (b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that the Agent is required to exercise as directed in writing
by the Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided that the
Agent shall not be required to take any action that, in its respective opinion or the
opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan
Document or applicable law; and




     (c) shall not, except as expressly set forth herein and in the other Loan Documents,
have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Loan Parties or any of its Affiliates that is communicated to or
obtained by the Person serving as the Agent or any of its Affiliates in any capacity.


The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at
the request of the Required Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Agent shall believe in good faith shall be necessary, under the circumstances
as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross
negligence or willful misconduct as determined by a final and non-appealable judgment of a court of
competent jurisdiction.




     The Agent shall not be deemed to have knowledge of any Default unless and until notice
describing such Default is given to the Agent by the Loan Parties or a Lender. Upon the occurrence
of an Event of Default, the Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Applicable Lenders. Unless and until the Agent
shall have received such direction, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to any such Default or Event of Default as it
shall deem advisable in the best interest of the Credit Parties. In no event shall the Agent be
required to comply with any such directions to the extent that the Agent believes that its
compliance with such directions would be unlawful.



     The Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this Agreement or any other
Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder
or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv)



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the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or
any other agreement, instrument or document or the creation, perfection or priority of any
Lien purported to be created by the Security Documents, (v) the value or the sufficiency of any
Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be delivered to the Agent.




     9.04 Reliance by Agent.



     The Agent shall be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or other writing
(including, but not limited to, any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person. The Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the
making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Agent may
presume that such condition is satisfactory to such Lender unless the Agent shall have received
written notice to the contrary from such Lender prior to the making of such Loan. The Agent may
consult with legal counsel (who may be counsel for any Loan Party), independent accountants and
other experts selected by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.



     9.05 Delegation of Duties.



     The Agent may perform any and all of its duties and exercise its rights and powers hereunder
or under any other Loan Document by or through any one or more sub-agents appointed by the Agent.
The agents and any such sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory provisions of this Article
shall apply to any such sub-agent and to the Related Parties of the Agent and any such sub-agent,
and shall apply to their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as the Agent.



     9.06 Resignation of Agent.



     The Agent may at any time give written notice of its resignation to the Lenders and the Lead
Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Lead Borrower, to appoint a successor Agent, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice of its resignation,
then the retiring Agent may on behalf of the Lenders appoint a successor Agent, meeting the
qualifications set forth above; provided that if the Agent shall notify the Lead Borrower
and the Lenders that no qualifying Person has accepted such appointment, then such resignation
shall nonetheless become effective in accordance with such notice and (1) the retiring Agent shall
be discharged from its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any Collateral held by the Agent on behalf of the Lenders under any of the Loan
Documents, the retiring Agent shall continue to hold such collateral security until such time as a
successor Agent is appointed) and (2) all payments, communications and determinations provided to
be made by, to or through the Agent shall instead be made by or to each Lender directly, until such
time as the Required Lenders appoint a successor Agent as provided for above in this Section. Upon
the acceptance of a successor’s appointment as Agent hereunder, such successor



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shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired)
Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder
or under the other Loan Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Borrowers to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Lead Borrower and such successor.
After the retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions
of this Article and Section 10.04 shall continue in effect for the benefit of such retiring
Agent, its sub-agents and their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while the retiring Agent was acting as Agent hereunder.




     9.07 Non-Reliance on Agent and Other Lenders. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender or any of their Related
Parties and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document furnished hereunder or
thereunder. Except as provided in Section 9.12, the Agent shall not have any duty or
responsibility to provide any Credit Party with any other credit or other information concerning
the affairs, financial condition or business of any Loan Party that may come into the possession of
the Agent.



     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, the Agent shall
not have any powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except as set forth herein.



     9.09 Agent May File Proofs of Claim. In case of the pendency of any proceeding under any
Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Agent
(irrespective of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Agent shall have made any
demand on the Loan Parties) shall be entitled and empowered, by intervention in such proceeding or
otherwise




     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and
to file such other documents as may be necessary or advisable in order to have the claims of
the Lenders, the Agent and the other Credit Parties (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the Agent, such Credit
Parties and their respective agents and counsel and all other amounts due the Lenders, the
Agent and such Credit Parties under Sections 2.04 and 10.04) allowed in such
judicial proceeding; and




     (b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;


and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Agent and, if the Agent shall consent to the making of such payments directly to the Lenders, to
pay to the Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Agent and its agents and counsel, and any other amounts due the Agent under
Sections 2.04 and 10.04.







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     Nothing contained herein shall be deemed to authorize the Agent to authorize or consent to or
accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to authorize the Agent to vote
in respect of the claim of any Lender in any such proceeding.



     9.10 Collateral and Guaranty Matters. The Credit Parties irrevocably authorize the Agent, at
their option and in their discretion,




     (a) to release any Lien on any property granted to or held by the Agent under any Loan
Document (i) upon payment in full of all Obligations (other than contingent indemnification
obligations for which no claim has been asserted), (ii) that is sold or to be sold as part
of or in connection with any sale permitted hereunder or under any other Loan Document, or
(iii) if approved, authorized or ratified in writing by the Applicable Lenders in accordance
with Section 10.01;




     (b) to subordinate any Lien on any property granted to or held by the Agent under any
Loan Document to the holder of any Lien on such property that is permitted by clause (h) of
the definition of Permitted Encumbrances;




     (c) to release any Guarantor from its obligations under the Facility Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted hereunder; and




     (d) to return undrawn the Eligible Letter of Credit to the issuer thereof if (i) no
Default or Event of Default is then continuing, (ii) the Agent is reasonably satisfied that
the Borrowing Base, after giving effect to the elimination of the Eligible Letter of Credit
from the Borrowing Base, shall be greater than the Total Outstandings, and (iii) the Agent
has received evidence, in form and substance satisfactory to the Agent, demonstrating the
calculations described in clause (ii) above.


Upon request by the Agent at any time, the Applicable Lenders will confirm in writing the Agent’s
authority to release or subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations under the Facility Guaranty pursuant to this Section
9.10. In each case as specified in this Section 9.10, the Agent will, at the Loan
Parties’ expense, execute and deliver to the applicable Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral from the assignment
and security interest granted under the Security Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Facility Guaranty, in each case
in accordance with the terms of the Loan Documents and this Section 9.10.




     9.11 Notice of Transfer.



     The Agent may deem and treat a Lender party to this Agreement as the owner of such Lender’s
portion of the Obligations for all purposes, unless and until, and except to the extent, an
Assignment and Acceptance shall have become effective as set forth in Section 10.06.



     9.12 Reports and Financial Statements.



     By signing this Agreement, each Lender:



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     (a) is deemed to have requested that the Agent furnish such Lender, promptly after they
become available, copies of all financial statements required to be delivered by the Lead
Borrower hereunder and all commercial finance examinations and appraisals of the Collateral
received by the Agent (collectively, the “Reports”) (the Agent hereby agreeing to
use commercially reasonable efforts to deliver to each Lender copies of the materials
described in Sections 6.01, 6.02 and 6.03 promptly following the
Agent’s receipt of the same, subject to the provisions of this Section 9.12);




     (b) expressly agrees and acknowledges that the Agent makes no representation or
warranty as to the accuracy of the Reports, and 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 the Agent or any other party performing any audit or examination will
inspect only specific information regarding the Loan Parties and will rely significantly
upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’
personnel;




     (d) agrees to keep all Reports confidential in accordance with the provisions of
Section 10.07 hereof; and




     (e) without limiting the generality of any other indemnification provision contained in
this Agreement, agrees: (i) to hold the Agent and any such other Lender preparing a Report
harmless from any action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any Loans that the indemnifying
Lender has made to the Borrowers; and (ii) to pay and protect, and indemnify, defend, and
hold the Agent and any such other Lender preparing a Report harmless from and against, the
claims, actions, proceedings, damages, costs, expenses, and other amounts (including
attorney costs) incurred by the 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.




     The Agent agrees with the Lenders that, in each Fiscal Year, the Agent shall undertake
at least (i) one (1) appraisal of Borrowers’ Real Estate included in the Borrowing Base as
Eligible Real Estate, (ii) two (2) appraisals of Borrowers’ Inventory and of Borrower’s
Accounts, and (iii) two (2) commercial finance examinations, in each case pursuant to and in
accordance with the provisions of Section 6.10(b).



     9.13 Agency for Perfection.



     Each Lender hereby appoints each other Lender as agent for the purpose of perfecting Liens for
the benefit of the Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC
or any other applicable Law of the United States can be perfected only by possession. Should any
Lender (other than the Agent) obtain possession of any such Collateral, such Lender shall notify
the Agent thereof, and, promptly upon the Agent’s request therefor shall deliver such Collateral to
the Agent or otherwise deal with such Collateral in accordance with the Agent’s instructions.



     9.14 Indemnification of Agent. The Lenders hereby agree to indemnify the Agent and any
Related Party, as the case may be (to the extent not reimbursed by the Loan Parties and without
limiting the obligations of Loan Parties hereunder), ratably according to their Applicable
Percentages, from and



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against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by the Agent in connection therewith;
provided, that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent’s gross negligence or willful misconduct as determined by a final and nonappealable
judgment of a court of competent jurisdiction.




     9.15 Relation among Lenders. The Lenders are not partners or co-venturers, and no Lender
shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of
the Agent) authorized to act for, any other Lender.



ARTICLE X

MISCELLANEOUS




     10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement, and no
consent to any departure by any Loan Party therefrom, shall be effective unless in writing signed
by the Required Lenders, and the Lead Borrower or the applicable Loan Party, as the case may be,
and acknowledged by the Agent (a copy of which acknowledgment shall be furnished by the Agent to
the Required Lenders promptly following the Required Lenders’ written request therefor), and no
amendment or waiver of any provision of any other Loan Document, and no consent to any departure by
any Loan Party therefrom, shall be effective unless in writing signed by the Agent (with the
consent of or at the direction of the Required Lenders), and the Lead Borrower or the applicable
Loan Party, as the case may be, and each such waiver or consent described in this Section
10.01 shall be effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent described in this
Section 10.01 shall:




     (a) postpone any date fixed by this Agreement or any other Loan Document for any
scheduled payment (including the Maturity Date) or mandatory prepayment of principal,
interest, fees or other amounts due to any Lender hereunder or under any of the other Loan
Documents without the written consent of such Lender entitled to such payment, without the
written consent of each Lender affected thereby;




     (b) as to any Lender, reduce the principal of, or the rate of interest specified herein
on, any Loan, or (subject to clause (iv) of the second proviso to this Section
10.01) any fees or other amounts payable hereunder or under any other Loan Document,
without the written consent of each Lender entitled to such amount; provided,
however, that only the Consent of the Required Lenders shall be necessary to amend
the definition of “Default Rate” or to waive any obligation of the Borrowers to pay interest
at the Default Rate;




     (c) as to any Lender, change Section 2.08 or Section 8.03 in a manner
that would alter the pro rata sharing of payments required thereby without the written
consent of such Lender;




     (d) change any provision of this Section or the definition of “Required Lenders”, or
any other provision hereof specifying the number or percentage of Lenders required to amend,
waive or otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender affected thereby;



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     (e) except as expressly permitted hereunder or under any other Loan Document, release,
or limit the liability of, any Loan Party without the written consent of each Lender;




     (f) except for Permitted Dispositions, release all or substantially all of the
Collateral from the Liens of the Security Documents without the written consent of each
Lender;




     (g) increase the aggregate amount of the Loans without the written consent of each
Lender;




     (h) change the definition of the term “Borrowing Base” or any component definition
thereof if as a result thereof the amounts calculated thereunder would be increased without
the written consent of each Lender, provided that the foregoing shall not limit the
discretion of the Agent to change, establish, reduce or eliminate any Reserves, subject to
Section 2.01(b); and further provided that without the prior written consent of the
Initial Lenders (to the extent, at any time of determination, the Initial Lenders are then
Lenders hereunder), the Agent shall not eliminate or reduce any category of Reserves or
change the methodology of the calculation of any Reserve (other than the elimination or
reduction of a Reserve to the extent that the circumstances giving rise to such Reserve (or
portion thereof, as applicable) no longer exists or changes in Reserves resulting from the
mathematical calculation of the amount of the Reserve in accordance with the methodology of
calculation previously utilized) if such change or elimination will have the effect of
increasing the Borrowing Base;




     (i) except as expressly permitted herein or in any other Loan Document, subordinate the
Obligations hereunder or the Liens granted hereunder or under the other Loan Documents, to
any other Indebtedness or Lien, as the case may be without the written consent of each
Lender;




     (j) without the consent of all of the Initial Lenders (to the extent, at the time of
determination, the Initial Lenders are then Lenders hereunder), consent to or otherwise
propose or approve a DIP Financing if the Borrowing Base is modified to allow an increase of
the amounts available thereunder in excess of $5,000,000;


and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Lenders required above, affect the rights or
duties of the Agent under this Agreement or any other Loan Document; (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the Lenders required above,
affect the rights or duties of the Agent under this Agreement or any other Loan Document, and (iii)
the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed
only by the parties thereto.




     If any Lender does not consent (a “Non-Consenting Lender”) to a proposed amendment, waiver,
consent or release with respect to any Loan Document that requires the consent of each Lender and
that has been approved by the Required Lenders, the Lead Borrower may replace such Non-Consenting
Lender in accordance with Section 10.13; provided that such amendment, waiver,
consent or release can be effected as a result of the assignment contemplated by such Section
(together with all other such assignments required by the Lead Borrower to be made pursuant to this
paragraph). Notwithstanding anything to the contrary, the Loan Parties shall have no obligation to
make any payments in respect of any Term Loan Prepayment Fee in connection with the replacement of
a Non-Consenting Lender except to the extent that the applicable amendment, waiver, consent or
release provides for a reduction in interest rates (or any other pricing) hereunder or for
modifications that would have the effect of increasing the Borrowing Base or otherwise increasing the amount of borrowing availability for the Loan
Parties



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hereunder (in which cases the Term Loan Prepayment Fee shall be deemed to be applicable and
due and owing).




     10.02 Notices; Effectiveness; Electronic Communications.




     (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in subsection (b)
below), all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or registered
mail or sent by telecopier as follows, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:




          (i) if to the Loan Parties or the Agent, to the address, telecopier number, electronic
mail address or telephone number specified for such Person on Schedule 10.02; and




          (ii) if to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire.


Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day for the recipient).
Notices delivered through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).





     (b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the Agent,
provided that the foregoing shall not apply to notices to any Lender pursuant to
Article II if such Lender has notified the Agent that it is incapable of receiving
notices under such Article by electronic communication. The Agent or the Lead Borrower may,
in its discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or communications.



     Unless the Agent otherwise prescribes, (i) notices and other communications sent to an e-mail
address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is not sent during
the normal business hours of the recipient, such notice or communication shall be deemed to have
been sent at the opening of business on the next Business Day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and identifying the website
address therefor.




     (c) Change of Address, Etc. Each of the Loan Parties and the Agent may change
its address, telecopier or telephone number for notices and other communications hereunder
by notice to the other parties hereto. Each other Lender may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to the Lead




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Borrower and the Agent. In addition, each Lender agrees to notify the Agent from
time to time to ensure that the Agent has on record (i) an effective address, contact name,
telephone number, telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.




     (d) Reliance by Agent and Lenders. The Agent and the Lenders shall be entitled
to rely and act upon any notices purportedly given by or on behalf of the Loan Parties even
if (i) such notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof. The Loan
Parties shall indemnify the Agent, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Loan Parties. All telephonic notices
to and other telephonic communications with the Agent may be recorded by the Agent, and each
of the parties hereto hereby consents to such recording.



     10.03 No Waiver; Cumulative Remedies. No failure by any Credit Party to exercise, and no
delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder or under any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided herein and in the other Loan Documents are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether any Credit Party may have had notice or knowledge of such Default at
the time.



     10.04 Expenses; Indemnity; Damage Waiver.




     (a) Costs and Expenses. The Borrowers shall pay all Credit Party Expenses.




     (b) Indemnification by the Loan Parties. The Loan Parties shall indemnify the
Agent (and any sub-agent thereof), each other Credit Party, and each Related Party of any of
the foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless (on an after tax basis) from, any and all losses, claims,
causes of action, damages, liabilities, settlement payments, costs, and related expenses
(including the fees, charges and disbursements of any counsel for any Indemnitee), incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by any Borrower
or any other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Agent (and any sub-agents thereof)
and their Related Parties only, the administration of this Agreement and the other Loan
Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom), (iii) any
actual or alleged presence or release of Hazardous Materials on or from any property owned
or operated by any Loan Party or any of its Subsidiaries, or any Environmental Liability
related in any way to any Loan Party or any of its Subsidiaries, (iv) any claims of, or
amounts paid by any Credit Party to, a Blocked Account Bank or other Person which has
entered into a control agreement with any Credit Party hereunder, or (v) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or



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any other theory, whether brought by a third party or by
any Borrower or any other Loan Party or any of the Loan Parties’ directors, shareholders or
creditors, and regardless of whether any Indemnitee is a party thereto, in all cases,
whether or not caused by or arising, in whole or in part,
out of the comparative, contributory or sole negligence of the Indemnitee;
provided that such indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or related expenses (x) are determined
by a court of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (y) result from a
claim brought by a Borrower or any other Loan Party against an Indemnitee for breach in bad
faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrowers or such Loan Party has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction.




     (c) Reimbursement by Lenders. Without limiting their obligations under
Section 9.14 hereof, to the extent that the Loan Parties for any reason fail to
indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid
by it, each Lender severally agrees to pay to the Agent (or any such sub-agent), or such
Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the
Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any
of the foregoing acting for the Agent (or any such sub-agent) in connection with such
capacity. The obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 2.07(c).




     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Loan Parties shall not assert, and hereby waive, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed to such unintended
recipients by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual damages
resulting from the gross negligence or willful misconduct of such Indemnitee as determined
by a final and nonappealable judgment of a court of competent jurisdiction.




     (e) Payments. All amounts due under this Section shall be payable on demand
therefor.




     (f) Survival. The agreements in this Section shall survive the resignation of
the Agent, the assignment of any Loan by any Lender, the replacement of any Lender, and the
repayment, satisfaction or discharge of all the other Obligations.



     10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Loan Parties
is made to any Credit Party, or any Credit Party exercises its right of setoff, and such payment or
the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or



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preferential, set aside or required (including pursuant to any settlement entered
into by such Credit Party in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to be satisfied shall
be revived and continued in full force and effect as if such payment had not been made or such
setoff had not occurred, and (b) each Lender severally agrees to pay to the Agent upon demand its
Applicable Percentage (without duplication) of any amount so recovered from or repaid by the Agent,
plus interest thereon from the date of such demand to the date such payment is made at a rate per
annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders
under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and
the termination of this Agreement.




     10.06 Successors and Assigns.



          (a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder or under any other Loan Document without the prior written consent
of the Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of
Section 10.06(b), (ii) by way of participation in accordance with the provisions of
subsection Section 10.06(d), or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 10.06(f) (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Credit Parties) any legal or equitable right, remedy or claim under or by
reason of this Agreement.




          (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of the Loans at the time owing to it); provided that any such assignment shall be
subject to the following conditions:





               (i) Minimum Amounts.




                    (A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Loans at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, no minimum amount need
be assigned; and




                    (B) in any case not described in subsection (b)(i)(A) of this Section, the principal
outstanding balance of the Loans of the assigning Lender subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Agent or, if “Trade Date” is specified in the Assignment and Assumption, as
of the Trade Date, shall not be less than $1,000,000 unless each of the Agent and, so long
as no Default has occurred and is continuing, the Lead Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed); provided, however,
that concurrent assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its



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Assignee Group) will be treated as a single assignment for purposes of
determining whether such minimum amount has been met;




               (ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loans assigned;




               (iii) Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in addition:




                    (A) the consent of the Lead Borrower (such consent not to be unreasonably withheld
or delayed) shall be required unless (1) a Default has occurred and is continuing at the
time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or
an Approved Fund; and




                    (B) the consent of the Agent (such consent not to be unreasonably withheld or delayed)
shall be required for assignments in respect of any Loan if such assignment is to a Person
that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such
Lender unless an Event of Default has occurred and is continuing at the time of such
assignment and the Lender shall have complied with the provisions of clause (iv) hereof.




               (iv) Right of First Refusal. If any Lender intends to assign its Loans
after the occurrence and during the continuance of an Event of Default, such Lender shall
furnish irrevocable written notice to the Agent and the Lenders offering to assign its Loans
to such other Lenders. Any Lender desiring to accept such assignment shall notify the Agent
and the assigning Lender (which notice shall furnished be no more than five (5) Business
Days after the receipt by the Agent and the Lenders of the notice from the assigning
Lender). The assigning Lender shall assign to the Lender exercising such option, its
Loans. Upon the date of such assignment, the Lender acquiring such Loans shall, in
accordance with the provisions of clause (v) hereof, pay to the assigning Lender as the
purchase price therefor the full amount of all the Obligations owing to
the assigning Lender (or such other price as the assigning Lender and the assignee
Lender may agree). If no Lender desires to acquire the Loans of the assigning Lender, the
assigning Lender may thereafter assign such Loans to an Eligible Assignee without further
consent of the Agent and the Borrowers.




               (v) Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500, provided, however, that the Agent may, in its
sole discretion, elect to waive such processing and recordation fee in the case of any
assignment. The assignee, if it shall not be a Lender, shall deliver to the Agent an
Administrative Questionnaire.


Subject to acceptance and recording thereof by the Agent pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be
entitled to the benefits of Sections 3.01,







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3.04, and 10.04 with respect to
facts and circumstances occurring prior to the effective date of such assignment. Upon request,
the Borrowers (at their expense) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with Section
10.06(d).




          (c) Register. The Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at the Agent’s Office a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the Lenders, and principal
amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, absent manifest error, and
the Loan Parties, the Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by the Lead
Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.




          (d) Participations. Any Lender may at any time, without the consent of, or notice to,
the Loan Parties or the Agent, sell participations to any Person (other than a natural person or
the Loan Parties or any of the Loan Parties’ Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such obligations and (iii)
the Loan Parties, the Agent and the Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Agreement. Any
Participant shall agree in writing to comply with all confidentiality obligations set forth in
Section 10.07 as if such Participant was a Lender hereunder.




     Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to Section
10.01 that affects such Participant. Subject to subsection (e) of this Section, the Loan
Parties agree that each Participant shall be entitled to the benefits of Sections 3.01 and
3.04 to the same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 10.06(b). To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 10.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.08 as though it were a Lender.



          (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Lead Borrower’s prior
written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section
3.01 unless the Lead Borrower is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Loan Parties, to comply with Section
3.01(e) as though it were a Lender.




          (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve




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Bank; provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.




          (g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.




     10.07 Treatment of Certain Information; Confidentiality. Each of the Credit Parties agrees to
maintain the confidentiality of the Information (as defined below), except that Information may be
disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, funding sources, attorneys, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the
extent required by applicable Laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Loan Document or any action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to any Loan Party and its obligations, (g) with the consent of
the Lead Borrower or (h) to the extent such Information (x) becomes publicly available other than
as a result of a breach of this Section or (y) becomes available to any Credit Party or any of
their respective Affiliates on a non-confidential basis from a source other than the Loan Parties.



     For purposes of this Section, “Information” means all information received from the Loan Parties or
any Subsidiary thereof relating to the Loan Parties or any Subsidiary thereof or their respective
businesses, other than any such information that is available to any Credit Party on a
non-confidential basis prior to disclosure by the Loan Parties or any Subsidiary thereof, provided
that, in the case of information received from any Loan Party or any Subsidiary after the date
hereof, such information is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information.



     Each of the Credit Parties acknowledges that (a) the Information may include material non-public
information concerning the Loan Parties or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and (c) it will handle
such material non-public information in accordance with applicable Law, including Federal and state
securities Laws.



     10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing or
if any Lender shall have been served with a trustee process or similar attachment relating to
property of a Loan



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Party, each Lender, and each of their respective Affiliates is hereby authorized
at any time and from time to time, after obtaining the prior written consent of the Agent or the
Required Lenders, to the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in whatever currency) at
any time held and other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrowers or any other Loan Party against
any and all of the Obligations now or hereafter existing under this Agreement or any other Loan
Document to such Lender, regardless of the adequacy of the Collateral, and
irrespective of whether or not such Lender shall have made any demand under this Agreement or any
other Loan Document and although such obligations of the Borrowers or such Loan Party may be
contingent or unmatured or are owed to a branch or office of such Lender different from the branch
or office holding such deposit or obligated on such indebtedness. The rights of each Lender and
its Affiliates under this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender or its Affiliates may have. Each Lender agrees to notify the
Lead Borrower and the Agent promptly after any such setoff and application, provided that
the failure to give such notice shall not affect the validity of such setoff and application.




     10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in
any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed
the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).
If the Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrowers. In determining whether the interest contracted for, charged,
or received by the Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee,
or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.



     10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been executed by the
Agent and when the Agent shall have received counterparts hereof that, when taken together, bear
the signatures of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be as effective as delivery of a manually
executed counterpart of this Agreement.



     10.11 Survival. All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such representations and
warranties have been or will be relied upon by the Credit Parties, regardless of any investigation
made by any Credit Party or on their behalf and notwithstanding that any Credit Party may have had
notice or knowledge of any Default at the time of the Loan, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid. Further, the
provisions of Sections 3.01, 3.04, and 10.04 and Article IX
shall survive and remain in full force and effect regardless of the repayment of the Obligations or
the termination of this Agreement or any provision hereof. In connection with the termination of
this Agreement and the release and termination of the security interests in the Collateral,



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the
Agent may require such indemnities and collateral security as they shall reasonably deem necessary
or appropriate to protect the Credit Parties against (x) loss on account of credits previously
applied to the Obligations that may subsequently be reversed or revoked, and (y) any Obligations
that may thereafter arise under Section 10.04.




     10.12 Severability. If any provision of this Agreement or the other Loan Documents is
held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.



     10.13 Replacement of Lenders. If any Lender requests compensation under Section
3.04, or if the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any
Lender is a Defaulting Lender, then the Borrowers may, at their sole expense and effort, upon
notice to such Lender and the Agent, require such Lender to assign and delegate, without recourse
(in accordance with and subject to the restrictions contained in, and consents required by,
Section 10.06), all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment), provided that:




     (a) the Borrowers or the assignee, as applicable, shall have paid to the Agent the
assignment fee specified in Section 10.06(b);




     (b) such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder and under the other Loan Documents from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the case of all
other amounts);




     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and




     (d) such assignment does not conflict with applicable Laws.


A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.




     10.14 Governing Law; Jurisdiction; Etc.



          (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES (OTHER
THAN NEW YORK GENERAL OBLIGATIONS LAW §5-1401).




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          (b) SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK AND OF THE COURTS OF
THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE LOAN PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE LOAN PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY CREDIT PARTY MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.




          (c) WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE LOAN
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.




          (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.




          (e) ACTIONS COMMENCED BY LOAN PARTIES. EACH LOAN PARTY AGREES THAT ANY ACTION
COMMENCED BY ANY LOAN PARTY ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT SOLELY IN A COURT LOCATED IN THE BOROUGH
OF MANHATTAN, CITY AND STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AS THE AGENT MAY
ELECT IN ITS SOLE DISCRETION AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS WITH RESPECT
TO ANY SUCH ACTION.




     10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON



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CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.




     10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby, the Loan Parties each acknowledge and agree that: (i) the credit
facility provided for hereunder and any related arranging or other services in connection therewith
(including in connection with any amendment, waiver or other modification hereof or of any other
Loan Document) are an arm’s-length commercial transaction between the Loan Parties, on the one
hand, and the Credit Parties, on the other hand, and each of the Loan Parties is capable of
evaluating and understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver
or other modification hereof or thereof); (ii) in connection with the process leading to such
transaction, the each Credit Party is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary, for the Loan Parties or any of their respective Affiliates,
stockholders, creditors or employees or any other Person; (iii) none of the Credit Parties has
assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Loan Parties
with respect to any of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof or of any other Loan
Document (irrespective of whether any of the Credit Parties has advised or is currently advising
any Loan Party or any of its Affiliates on other matters) and none of the Credit Parties has any
obligation to any Loan Party or any of its Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv)
the Credit Parties and their respective Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Loan Parties and their respective Affiliates,
and none of the Credit Parties has any obligation to disclose any of such interests by virtue of
any advisory, agency or fiduciary relationship; and (v) the Credit Parties have not provided and
will not provide any legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby (including any amendment, waiver or other modification hereof or
of any other Loan Document) and each of the Loan Parties has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate. Each of the Loan Parties
hereby waives and releases, to the fullest extent permitted by law, any claims that it may have
against each of the Credit Parties with respect to any breach or alleged breach of agency or
fiduciary duty.



     10.17 USA PATRIOT Act Notice. Each Lender that is subject to the USA PATRIOT Act and the
Agent (for itself and not on behalf of any Lender) hereby notifies the Loan Parties that pursuant
to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information
that identifies each Loan Party, which information includes the name and address of each Loan Party
and other information that will allow such Lender or the Agent, as applicable, to identify each
Loan Party in accordance with the USA PATRIOT Act. Each Loan Party is in compliance, in all
material respects, with the USA PATRIOT Act. No part of the proceeds of the Loans will be used by
the Loan Parties, directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct business
or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act
of 1977, as amended.



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     10.18 Foreign Asset Control Regulations. Neither of the advance of the Loans nor the use
of the proceeds of any thereof will violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq.,
as amended) (the “Trading With the Enemy Act”) or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
(the “Foreign Assets Control Regulations”) or any enabling legislation or executive order
relating thereto (which for the avoidance of doubt shall include, but shall not be limited to (a)
Executive Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the
“Executive Order”) and (b) the USA PATRIOT Act. Furthermore, none of the Borrowers or
their Affiliates (a) is or will become a “blocked person” as described in the Executive Order, the
Trading With the Enemy Act or the Foreign Assets Control Regulations or (b) engages or will engage
in any dealings or transactions, or be otherwise associated, with any such “blocked person” or in
any manner violative of any such order.



     10.19 Time of the Essence. Time is of the essence of the Loan Documents.



     10.20 Press Releases.




     (a) Each Credit Party executing this Agreement agrees that neither it nor its
Affiliates will in the future issue any press releases or other public disclosure using the
name of Agent, any Initial Lender or any of their respective Affiliates or referring to this
Agreement or the other Loan Documents without at least two (2) Business Days’ prior notice
to Agent (or such Initial Lender, as applicable) without the prior written consent of Agent
(or such Initial Lender, as applicable) unless (and only to the extent that) such Credit
Party or Affiliate is required to do so under applicable Law and then, in any event, such
Credit Party or Affiliate will consult with Agent (or such Initial Lender, as applicable)
before issuing such press release or other public disclosure.




     (b) From and after the date on which the Loan Parties file a current report on Form 8-K
with the SEC announcing the transactions contemplated by this Agreement, each Loan Party
consents to the publication by Agent or any Lender of advertising material relating to the
financing transactions contemplated by this Agreement using any Loan Party’s name, product
photographs, logo or trademark. Agent or such Lender shall provide a draft reasonably in
advance of any advertising material to the Lead Borrower for review and comment prior to the
publication thereof. Agent reserves the right to provide to industry trade organizations
information necessary and customary for inclusion in league table measurements.



     10.21 Additional Waivers.



          (a) The Obligations are the joint and several obligation of each Loan Party. To the fullest
extent permitted by applicable Law, the obligations of each Loan Party shall not be affected by (i)
the failure of any Credit Party to assert any claim or demand or to enforce or exercise any right
or remedy against any other Loan Party under the provisions of this Agreement, any other Loan
Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release
from any of the terms or provisions of, this Agreement or any other Loan Document, or of any other
Loan Party, or (iii) the failure to perfect any security interest in, or the release of, any of the
Collateral or other security held by or on behalf of the Agent or any other Credit Party.




          (b) The obligations of each Loan Party shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in full in cash




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of
the Obligations), including any claim of waiver, release, surrender, alteration or compromise of
any of the Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the
Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each
Loan Party hereunder shall not be discharged or impaired or otherwise affected by the failure of
the Agent or any other Credit Party to assert any claim or demand or to enforce any remedy under
this Agreement, any other Loan Document or any other agreement, by any waiver or modification of
any provision of any thereof, any
default, failure or delay, willful or otherwise, in the performance of any of the Obligations,
or by any other act or omission that may or might in any manner or to any extent vary the risk of
any Loan Party or that would otherwise operate as a discharge of any Loan Party as a matter of law
or equity (other than the indefeasible payment in full in cash of all the Obligations).




          (c) To the fullest extent permitted by applicable Law, each Loan Party waives any defense
based on or arising out of any defense of any other Loan Party or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause of the liability of
any other Loan Party, other than the indefeasible payment in full in cash of all the Obligations.
The Agent and the other Credit Parties may, at their election, foreclose on any security held by
one or more of them by one or more judicial or non-judicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Loan Party, or exercise any other right or remedy available to them
against any other Loan Party, without affecting or impairing in any way the liability of any Loan
Party hereunder except to the extent that all the Obligations have been indefeasibly paid in full
in cash. Each Loan Party waives any defense arising out of any such election even though such
election operates, pursuant to applicable Law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Loan Party against any other Loan
Party, as the case may be, or any security.




          (d) Each Borrower is obligated to repay the Obligations as joint and several obligors under
this Agreement. Upon payment by any Loan Party of any Obligations, all rights of such Loan Party
against any other Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior
in right of payment to the prior indefeasible payment in full in cash of all the Obligations. In
addition, any indebtedness of any Loan Party now or hereafter held by any other Loan Party is
hereby subordinated in right of payment to the prior indefeasible payment in full of the
Obligations and no Loan Party will demand, sue for or otherwise attempt to collect any such
indebtedness (it being understood that nothing herein shall prevent the Loan Parties from paying
intercompany Indebtedness to the extent expressly permitted by this Agreement). If any amount
shall erroneously be paid to any Loan Party on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of any Loan Party, such
amount shall be held in trust for the benefit of the Credit Parties and shall forthwith be paid to
the Agent to be credited against the payment of the Obligations, whether matured or unmatured, in
accordance with the terms of this Agreement and the other Loan Documents. Subject to the
foregoing, to the extent that any Borrower shall, under this Agreement as a joint and several
obligor, repay any of the Obligations made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower (an “Accommodation Payment”), then
the Borrower making such Accommodation Payment shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Borrowers in an amount, for each of
such other Borrowers, equal to a fraction of such Accommodation Payment, the numerator of which
fraction is such other Borrower’s Allocable Amount and the denominator of which is the sum of the
Allocable Amounts of all of the Borrowers. As of any date of determination, the “Allocable
Amount” of each Borrower shall be equal to the maximum amount of liability for Accommodation
Payments which could be asserted against such Borrower hereunder




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without (a) rendering such
Borrower “insolvent” within the meaning of Section 101 (31) of the Bankruptcy Code, Section 2 of
the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent
Conveyance Act (“UFCA”), (b) leaving such Borrower with unreasonably small capital or
assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section
5 of the UFCA, or (c) leaving such Borrower unable to pay its debts as they become due within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA.




     10.22 No Strict Construction.



     The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.




     10.23 Attachments.



     The exhibits, schedules and annexes attached to this Agreement are incorporated herein and
shall be considered a part of this Agreement for the purposes stated herein, except that in the
event of any conflict between any of the provisions of such exhibits and the provisions of this
Agreement, the provisions of this Agreement shall prevail.



[remainder of page intentionally blank]





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



	 	 	 	 	 
	 	VALUEVISION MEDIA, INC.

 	 
	 	By:  	/s/ William J. McGrath
 	 
	 	 	Name:  	William J. McGrath 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	VALUEVISION INTERACTIVE, INC.

 	 
	 	By:  	/s/ William J. McGrath
 	 
	 	 	Name:  	William J. McGrath 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	VVI FULFILLMENT CENTER, INC.

 	 
	 	By:  	/s/ William J. McGrath
 	 
	 	 	Name:  	William J. McGrath 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	VALUEVISION RETAIL, INC.

 	 
	 	By:  	/s/ William J. McGrath
 	 
	 	 	Name:  	William J. McGrath 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	VALUEVISION MEDIA ACQUISITIONS, INC.

 	 
	 	By:  	/s/ William J. McGrath
 	 
	 	 	Name:  	William J. McGrath 	 
	 	 	Title:  	Chief Financial Officer 	 



Signature Page to Credit Agreement







 









 








	 	 	 	 	 
	 	CRYSTAL FINANCIAL LLC, as Agent and as a 

Lender

 	 
	 	By:  	/s/ Joshua B. Franklin
 	 
	 	 	Name:  	Joshua B. Franklin 	 
	 	 	Title:  	Managing Director 	 



Signature Page to Credit Agreement








 









 








	 	 	 	 	 
	 	REGIMENT CAPITAL SPECIAL
SITUATIONS 
 FUND IV, L.P.
(the “Fund”), as a Lender

 	 
	 	By:  	Regiment Capital IV GP, L.P. (“GPLP”),

the Fund’s General Partner
 	 
	 



					
	 	


By:  Regiment Capital IV GP, LLC,

        GPLP’s General Partner

 	 
	 



					
	 	By:  	/s/ Richard Miller
 	 
	 	 	Name:  	Richard Miller 	 
	 	 	Title:  	Managing Director 	 



Signature Page to Credit Agreement