WWW.EXFILE.COM, INC. -- 888-775-4789 -- j2 GOBAL COMMUNICATIONS, INC. -- EXHIBIT 10.1 TO FORM 8-K


    EXHIBIT
10.1

     

     

    CREDIT
AGREEMENT

    


    THIS CREDIT AGREEMENT
("Agreement") is made and entered into as of January 5, 2009, by and between
j2 GLOBAL COMMUNICATIONS,
INC., a Delaware corporation ("Borrower"), with its principal place of
business located at 6922 Hollywood Boulevard, Suite 500, Los Angeles, California
90028, and UNION BANK,
N.A., a national banking association ("Bank"), with an office located at
445 South Figueroa Street, 10th Floor, Los Angeles, California
90071.

    


    


    SECTION
1.  DEFINITIONS

    


    As used herein, initially capitalized
terms shall have the respective meanings set forth below or set forth in the
Section or subsection defining such terms:

    


    “Acquisition”
shall mean any transaction, or any series of related transactions, consummated
after the effective date of this Agreement, by which Borrower or any of its
Subsidiaries directly or indirectly (a) acquires any ongoing business or all or
substantially all of the assets of any Person engaged in any ongoing business,
whether through a purchase of assets, a merger or otherwise, (b) acquires
control of the securities of a Person engaged in an ongoing business
representing more than fifty percent (50%) of the ordinary voting power for the
election of directors or other governing position if the business affairs of
such Person are managed by a board of directors or other governing body or (c)
acquires control of more than fifty percent (50%) of the ownership interest in
any Person engaged in an ongoing business that is not managed by a board of
directors or other governing body.

    


    "Affiliate"
shall mean, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially or as a trustee, guardian or
other fiduciary, ten percent (10%) or more of the stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person or any
Affiliate of such Person and (c) each of such Person's officers and directors,
and such Person’s constituent joint venturers, members and partners; provided,
however, that in no case shall Bank be deemed to be an Affiliate of Borrower or
any of its Subsidiaries for purposes of this Agreement.  For the
purpose of this definition, "control" of a Person means the ability, directly or
indirectly, to direct or cause the direction of its management or policies,
whether through the ownership of voting securities, by contract or
otherwise.

    


    "Bank
Expenses" shall mean: (a) all reasonable costs and expenses paid or
advanced by Bank which are required to be paid by Borrower or any of its
Subsidiaries under this Agreement or any of the other Loan Documents; (b)
reasonable expenses incurred by Bank in auditing or examining the books and
records of Borrower or any of its Subsidiaries following the occurrence and
continuation of a Default or an Event of Default; (c) taxes and insurance
premiums of every nature and kind of Borrower or any of its Subsidiaries paid by
Bank; (d) reasonable appraisal, due diligence, filing, recording, documentation,
publication and search fees paid or incurred by Bank on 

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    behalf of
Borrower or any of its Subsidiaries prior to the date of this Agreement or to
correct any Default or Event of Default or enforce any provision of this
Agreement or any other Loan Document; (e) reasonable costs and expenses of any
suit or arbitration proceeding incurred by Bank in enforcing or defending this
Agreement or any other Loan Document, or any portion thereof, and (f) reasonable
attorneys' fees and expenses incurred by Bank in amending, terminating,
enforcing, defending or concerning this Agreement or any other Loan Document, or
any portion thereof, whether or not suit is brought.  All Bank
Expenses paid or incurred by Bank shall be considered to be, and shall become a
part of the Obligations, are payable within three (3) Business Days of Bank’s
written demand, and if not so reimbursed, shall thereafter bear interest,
together with all other amounts to be paid by Borrower pursuant hereto at the
Default Rate of Interest provided for herein and in the Revolving
Note.

    


    “Bankruptcy
Code” shall mean The Bankruptcy Reform Act of 1978 (Pub. L. No. 95-598;
11 U.S.C.), as amended or supplemented from time to time, or any successor
statute, and any and all rules and regulations issued or promulgated in
connection therewith.

    


    “Business”
shall mean the provision of outsourced, value-added messaging and communications
services and the licensing of software and other intellectual
property.

    


    "Business
Day” shall mean a day other than a Saturday, a Sunday or a day on which
commercial banks in the State of California are authorized or required by law to
close.

    


    “Capital
Lease” shall mean any lease of an asset by a Person as lessee which
would, in accordance with GAAP, be required to be accounted for as an asset and
corresponding liability on the balance sheet of such Person.

    


    "Capital
Lease Obligations" shall mean, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) property to the extent such obligations are required
to be classified and accounted for as a Capital Lease on a balance sheet of such
Person under GAAP and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

    


    “Change of
Control” shall mean (a) any transaction or series of related transactions
in which any Unrelated Person or two or more Unrelated Persons acting in concert
acquire beneficial ownership (within the meaning of Rule 13d-3(a)(1) under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of thirty
percent (30%) or more of the outstanding common stock of Borrower, or (b) any
transaction in which Borrower consolidates with or merges into another Person or
conveys, transfers or leases its properties and assets substantially as an
entirety to any Person or any Person consolidates with or merges into Borrower,
in either event pursuant to a transaction in which the outstanding common stock
of Borrower is changed into or exchanged for cash, securities or other property,
with the effect that any Unrelated Person becomes the beneficial owner, directly
or indirectly, of fifty percent (50%) or more of such common
stock.  For purposes of the foregoing, the term "Unrelated

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    Person"
means any Person other than (i) a Subsidiary of Borrower or (ii) an employee
stock ownership plan or other employee benefit plan covering the employees of
Borrower and its Subsidiaries.

    


    “Compliance
Certificate” shall mean a certificate in the form of Exhibit B annexed
hereto, properly completed and signed by the chief financial officer of
Borrower.

    


    “Default”
shall mean any event that, with the giving of any applicable notice or the
passage of time, or both, would be an Event of Default.

    


    “Default
Rate of Interest” shall have the meaning assigned to that term in Section
2.6 hereof.

    


    “Disposition”
shall mean the sale, transfer or other disposition in any single transaction or
series of related transactions of any asset, or group of related assets, of
Borrower or any of its Subsidiaries.

    


    “EBITDA”
shall mean, for each fiscal quarter of Borrower and its Subsidiaries, (a) the
net income of Borrower and its Subsidiaries for such fiscal quarter, plus (b)
interest expense of Borrower and its Subsidiaries for such fiscal quarter, plus
(c) the aggregate amount of federal and state taxes on or measured by income of
Borrower and its Subsidiaries for such fiscal quarter (whether or not payable
during such fiscal quarter), plus (d) depreciation and amortization expense of
Borrower and its Subsidiaries for such fiscal quarter, in each case as
determined in accordance with GAAP.

    


    “Event of
Default” and “Events of
Default” shall have the respective meanings assigned to those terms in
Section 7.1 hereof.

    


    “Fee
Letter” shall mean that certain fee letter agreement between Bank and
Borrower dated as of the date hereof.

    


    "Financial
Statements" shall mean, with respect to any accounting period of any
Person, statements of income and cash flow of such Person for such accounting
period, and balance sheets of such Person as of the end of such accounting
period, setting forth in each case in comparative form figures for the
corresponding accounting period in the preceding fiscal year or, if such
accounting period is a full fiscal year, corresponding figures from the
preceding annual audit, all prepared in reasonable detail and in accordance with
GAAP.  The term "Financial Statements" shall include the notes and
schedules to such statements of income and cash flow and balance
sheets.

    


    "GAAP"
shall mean generally accepted accounting principles in the United States of
America in effect from time to time.

    


    “Guarantors”
and “Guarantor”
shall mean, respectively, (a) (i) the Significant Domestic Subsidiaries of
Borrower existing on the date of this Agreement and (ii) any Significant
Domestic Subsidiary of Borrower that may be established after the date of this
Agreement and (b) any one of such Guarantors.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    “Guaranties”
and “Guaranty”
shall mean, respectively, (a) those certain Continuing Guaranties, each in the
form attached as Exhibit “C” hereto, duly executed by Guarantors in favor of and
with Bank, pursuant to which Guarantors shall unconditionally guarantee the
payment by Borrower of the Obligations (including outstanding principal, accrued
interest and Bank Expenses), and (b) any one of such Guaranties.

    


    “Guaranty
Obligation” shall mean, as to any Person, any (a) guaranty by such Person
of Indebtedness of, or other obligation performable by, any other Person or (b)
assurance given by such Person to an obligee of any other Person with respect to
the performance of an obligation by, or the financial condition of, such other
Person, whether direct, indirect or contingent, including any purchase or
repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item of such other Person or any
“keep-well” or other arrangement of whatever nature given for the purpose of
assuring or holding harmless such obligee against loss with respect to any
obligation of such other Person; provided, however, that the term “Guaranty
Obligation” shall not include endorsements of instruments for deposit or
collection in the ordinary course of business and customary indemnities given in
connection with asset sales in the ordinary course of business.

    


    "Indebtedness"
shall mean, as to any Person (without duplication), (a) indebtedness of such
Person for borrowed money or for the deferred purchase price of property
(excluding trade and other accounts payable in the ordinary course of business
in accordance with ordinary trade terms and accrued liabilities incurred in the
ordinary course of business, including any contingent obligation of such Person
for any such indebtedness), (b) indebtedness of such Person of the nature
described in clause (a) that is non-recourse to the credit of such Person but is
secured by assets of such Person, to the extent of the fair market value of such
assets as determined in good faith by such Person, (c) Capital Lease Obligations
of such Person, (d) indebtedness of such Person arising under bankers’
acceptance facilities or under facilities for the discount of accounts
receivable of such Person, (e) any direct or contingent obligations of such
Person under letters of credit issued for the account of such Person (including,
without limitation, the Letters of Credit), and (f) any net obligations of such
Person under any interest rate protection agreement.

    


    "Insolvency
Proceeding” shall mean and include any proceeding commenced by or against
Borrower or any of its Subsidiaries under any provision of the Bankruptcy Code,
or under any other bankruptcy or insolvency law, including, but not limited to,
assignments for the benefit of creditors, formal or informal moratoriums, and
compositions or extensions with some or all creditors.

    


    “Letter of
Credit Agreements” and “Letter of
Credit Agreement” shall mean, respectively, (a) the irrevocable
commercial or standby letter of credit applications and agreements, each on
Bank’s standard form therefor, executed by Borrower in

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    connection
with the issuance by Bank of the Letters of Credit for the account of Borrower,
and (b) any one of such Letter of Credit Agreements.

    


    “Letter of
Credit Sublimit” shall have the meaning assigned to such term in Section
2.2 hereof.

    


    “Letter of
Credit Usage” shall mean, as of any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit issued pursuant to this
Agreement.

    


    “Letters
of Credit” and “Letter of
Credit” shall have the meanings assigned to those terms in Section 2.2
hereof.

    


    "LIBOR
Rate Margin" shall have the meaning assigned to such term in the
Revolving Note.

    


    "Lien"
shall mean any lien, mortgage, deed of trust, pledge, security interest, charge
or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).

    


    “Liquid
Assets” shall mean the following unencumbered, unrestricted and
immediately available assets of Borrower and its Subsidiaries, whether located
in or outside of the U.S.: (a) cash; (b) U.S. Government obligations or
obligations guaranteed by the U.S. Government or any agency thereof; (c) bank
deposit accounts or money market accounts established and maintained with any
institution or institutions selected by Borrower and satisfactory to Bank in its
sole and absolute discretion and (d) commercial paper rated at least A-1 by
Standard & Poor’s Rating Group or P-1 by Moody’s Investors Service, Inc. and
corporate and municipal bonds and obligations rated AAA or AA by Standard &
Poor’s Rating Group or Aaa or Aa1 by Moody’s Investors Service,
Inc.  Without limiting the generality of the foregoing, “Liquid
Assets” shall not include any individual retirement account, pension fund
or any investment having a maturity of greater than three (3)
years.

    


    "Loan
Documents" and “Loan
Document” shall mean, respectively, (a) this Agreement, the Revolving
Note, the Fee Letter, the Guaranties, the Stock Pledge Agreements, the Letter of
Credit Agreements and all other documents, instruments and agreements, and all
related riders, exhibits, resolutions, authorizations, financing statements and
certificates delivered to Bank in connection with this Agreement, and (b) any
one of such Loan Documents.

    


    “Material
Disposition” shall mean a Disposition of a line of business that
generated EBITDA for the fiscal year then most recently ended in excess of
fifteen percent (15%) of EBITDA for such fiscal year or (b) involves assets in
excess of fifteen percent (15%) of the total assets of Borrower and its
Subsidiaries on a consolidated basis as at the end of the fiscal year then most
recently ended.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    "Net
Worth" shall mean the value of Borrower's total assets (including
leaseholds and leasehold improvements and reserves against assets but excluding
monies due from Affiliates, officers, directors, employees, shareholders,
members or managers) less total liabilities (including accrued and deferred
income taxes).

    


    "Obligations"
shall mean and include all loans, advances, debts, liabilities and obligations,
howsoever arising, owed by Borrower or any of its Subsidiaries to Bank of every
kind and description (whether or not evidenced by any note or instrument and
whether or not for the payment of money), direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising pursuant to
the terms of this Agreement, any other Loan Document or any other agreement or
instrument, including without limitation any Indebtedness of Borrower or any of
its Subsidiaries which Bank obtains by assignment or otherwise, and all Bank
Expenses.

    


    "Permitted
Acquisition" means any Acquisition by Borrower or any of its Subsidiaries
(as applicable, the "acquiror") of another Person, or the business or assets of
such Person, engaged in a line of business comparable or complementary to the
Business (the "target"), provided that: (a) no Default or Event of Default shall
exist at the time of such Acquisition or occur after giving effect to such
Acquisition; (b) such Acquisition shall have been approved by the board of
directors or the owners of the target; (c) with respect to any Acquisition
involving a purchase price which exceeds an amount equal to ten percent (10%) of
the consolidated total assets of Borrower as of the last day of the fiscal year
most recently ended, the pro-forma balance sheets as of the date of such
Acquisition and the projections for the four (4) fiscal quarters immediately
following the date of such Acquisition (including pro-forma financial
covenants), which shall be provided by Borrower to Bank in connection with such
Acquisition, shall have demonstrated that, after giving effect to such
Acquisition, Borrower would be and would remain in compliance with the financial
covenants set forth in Sections 6.11 through 6.13, inclusive, of this Agreement;
and (d) the aggregate consideration paid by acquiror in connection with all of
such Acquisitions (which, for these purposes shall be limited to the aggregate
amount of cash paid and Indebtedness assumed by acquiror in connection with such
Acquisitions) made during any single fiscal year shall not exceed (together with
the aggregate amount of Strategic Advances made during such fiscal year) One
Hundred Million Dollars ($100,000,000); provided that if such aggregate
consideration during any fiscal year (together with the aggregate amount of
Strategic Advances made during such fiscal year) exceeds Fifty Million Dollars,
the compliance levels with respect to Sections 6.11 and 6.13 shall be increased
to Twenty-Five Million Dollars ($25,000,000) and Twenty Million Dollars
($20,000,000), respectively, for purposes of the pro-forma calculation set forth
in clause (c) above and for future compliance with such covenants beginning at
the end of the next fiscal quarter.

    


    “Permitted
Guaranty Obligations” shall mean:

    


    (a) Guaranty Obligations of Borrower
existing on the date of this Agreement, and refinancings, renewals, extensions
or amendments that do not increase the amount thereof;

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    


    (b) Guaranty Obligations of Borrower in
support of the obligations of any Subsidiary, provided that the aggregate
principal amount of such Guaranty Obligations does not exceed Two Million
Dollars ($2,000,000) at any one time;

    


    (c) Guaranty Obligations under the Loan
Documents; and

    


    (d) Guaranty Obligations of Borrower or
any of its Subsidiaries with respect to Permitted Indebtedness.

    


    “Permitted
Indebtedness” shall mean, without duplication:

    


    (a) the Obligations;

    


    (b) trade payables and other
contractual obligations of Borrower or any of its Subsidiaries to suppliers and
customers incurred in the ordinary course of business;

    


    (c) Indebtedness existing on the date
of this Agreement and reflected in the consolidated Financial Statement of
Borrower and its Subsidiaries for the fiscal quarter ended September 30, 2008,
and any refinancing, renewal, extension or amendment of such Indebtedness that
does not increase the amount thereof;

    


    (d) Indebtedness of Borrower or any of
its Subsidiaries consisting of Capital Lease Obligations and purchase money
indebtedness incurred in connection with purchase of fixed assets; provided that
the aggregate outstanding amount of such Indebtedness shall not exceed Five
Million Dollars ($5,000,000) at any one time;

    


    (e) Indebtedness of Borrower or any of
its Subsidiaries, whether or not incurred or assumed in the consummation of any
Permitted Acquisition, in the aggregate principal amount at any one time
outstanding not to exceed Five Million Dollars ($5,000,000);

    


    (f) Indebtedness arising in connection
with intercompany loans and advances between Borrower and its Subsidiaries or
between Subsidiaries of Borrower;

    


    (g) Indebtedness arising in
connection foreign exchange transactions and currency hedging transactions
entered by Borrower or a Subsidiary; and

    


    (h) Indebtedness from time to time
outstanding under Borrower’s existing credit card purchase facility with
Citibank, N.A. or any amendment thereto, or extension or replacement thereof in
the aggregate principal amount at any one time outstanding not to exceed Five
Million Dollars ($5,000,000).

    


    “Permitted
Liens” shall mean:

    


    (a) Liens for taxes not yet payable or
Liens for taxes being contested in good faith and by proper proceedings
diligently pursued, provided that adequate reserves 

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    shall
have been made therefor on the applicable Financial Statement and a stay of
enforcement of any such Lien shall be in effect;

    


    (b) Liens
in favor of Bank, if and to the extent that such Liens are granted in favor of
Bank after the date of this Agreement;

    


    (c) reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other similar title exceptions or encumbrances affecting real
property which do not in the aggregate materially detract from the value of the
real property or materially interfere with their use in the ordinary conduct of
the business of Borrower or any of its Subsidiaries;

    


    (d) deposits under workmen's
compensation, unemployment insurance, social security and other similar laws
applicable to Borrower or any of its Subsidiaries;

    


    (e) Liens relating to statutory
obligations of Borrower or any of its Subsidiaries with respect to surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business; and

    


    (f) Liens
against real or personal property of Borrower or any of its Subsidiaries that
secure Indebtedness of Borrower or any of its Subsidiaries that is permitted
under subsection (d) or (e) of the definition of Permitted Indebtedness
hereinabove (but with respect to clause (e), only such Indebtedness that is
incurred or assumed in the consummation of any Permitted
Acquisition).

    


    "Person"
shall mean any natural person, corporation, partnership, joint venture, limited
liability company, firm, association, government, governmental agency, court or
any other entity.

    


    “Restricted
Payment” shall mean (a) the declaration or payment of any dividend or the
occurrence of any liability to make any other payment or distribution of cash or
other property or assets on or in respect of Borrower’s or any of its
Subsidiaries’ stock, (b) any payment on account of the purchase, redemption,
defeasance or other retirement of Borrower’s or any of its Subsidiaries’ stock
or Indebtedness, other than (i) the Obligations arising under this Agreement,
(ii) regularly scheduled principal and interest payments, when due, under
Permitted Indebtedness, without modification of the amortization as in effect on
the date of this Agreement and (iii) so long as no Default or Event of Default
has occurred and is continuing, or shall be caused thereby, prepayments of
principal under Permitted Indebtedness or (c) any payment, loan, contribution or
other transfer of funds or other property to any stockholder of Borrower or any
of its Subsidiaries other than amounts, if any, which are expressly and
specifically permitted in this Agreement; provided, however, that no payment to
Bank shall constitute a Restricted Payment.

    


    “Revolving
Credit Commitment” shall have the meaning assigned to that term in
Section 2.1 hereof.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    “Revolving
Credit Commitment Termination Date” shall mean January 5,
2011.

    


    “Revolving
Loans” and “Revolving
Loan” shall have the meanings assigned to those terms in Section 2.1
hereof.

    


    “Revolving
Note” shall have the meaning assigned to that term in Section 2.1
hereof.

    


    "Significant
Domestic Subsidiary" means a Significant Subsidiary that (a) is organized
under the laws of any state of the United States of America and (b) holds all or
substantially all of its assets within any state or states of the United States
of America.  The Significant Domestic Subsidiaries of Borrower as of
the effective date of this Agreement are identified in Exhibit A annexed
hereto.

    


    "Significant
Foreign Subsidiary" means a Significant Subsidiary (a) the capital stock
of which is directly owned by Borrower and (b) that is not a Significant
Domestic Subsidiary.  The Significant Foreign Subsidiaries of Borrower
as of the effective date of this Agreement are identified in Exhibit A annexed
hereto.

    


    “Significant
Subsidiary” shall mean a Subsidiary that either (a) had net income for
the fiscal quarter then most recently ended in excess of ten percent (10%) of
EBITDA for such fiscal quarter or (b) had assets in excess of ten percent (10%)
of the total assets of Borrower and its Subsidiaries on a consolidated basis as
at the end of the fiscal quarter then most recently ended.

    


    "Solvent"
shall mean, as of any date of determination, and as to any Person, that on such
date: (a) the fair valuation of the assets of such Person is greater than the
fair valuation of such Person's probable liability in respect of existing debts;
(b) 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; (c) such Person
is not engaged in a business or transaction, and is not about to engage in a
business or transaction, which would leave such Person with assets remaining
which would constitute unreasonably small capital after giving effect to the
nature of the particular business or transaction; and (d) such Person is
generally paying its debts as they become due.  For the purpose of the
foregoing, (i) the "fair valuation" of any assets means the amount realizable
within a reasonable time, either through collection or sale, of such assets at
their regular market value, which is the amount obtainable by a capable and
diligent businessperson from an interested buyer willing to purchase such assets
within a reasonable time under ordinary circumstances; and (ii) the term "debts"
includes any legal liability, whether matured or unmatured, liquidated or
unliquidated, absolute, fixed or contingent.

    


    “Stock
Pledge Agreements” and “Stock
Pledge Agreement” shall mean, respectively, (a) those certain Stock
Pledge Agreements, each on Bank’s standard form therefor, duly executed by
Borrower in favor of and with Bank, pursuant to which Borrower shall grant a
security interest to Bank in 65% of the issued stock of any of its now owned or
hereafter acquired Significant Foreign Subsidiaries, and (b) any one of such
Stock Pledge Agreements.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    “Strategic
Advance” shall mean any loan or advance to, or minority investment in a
Strategic Business made during any fiscal year which, in aggregate amount
(together with the aggregate amount of cash paid and Indebtedness assumed in
connection with Permitted Acquisitions during such fiscal year) do not exceed
One Hundred Million Dollars ($100,000,000); provided that if such aggregate
loans, advances or minority investments during any fiscal year (together with
the aggregate amount of Permitted Acquisitions made during such fiscal year)
exceeds Fifty Million Dollars ($50,000,000), the compliance levels with respect
to Sections 6.11 and 6.13 shall be increased to Twenty-Five Million Dollars
($25,000,000) and Twenty Million Dollars ($20,000,000), respectively, for
purposes of the pro-forma calculation required under Section 6.7 hereof and for
future compliance with such covenants beginning at the end of the next fiscal
quarter

    


    “Strategic
Businesses” shall mean Persons engaged in lines of businesses comparable
or complementary to the Business.

    


    "Subsidiary"
of a Person shall mean any corporation, association, partnership, limited
liability company, joint venture or other business entity, whether foreign or
domestic, of which more than fifty percent (50%) of the voting stock or other
equity interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof.  Unless the
context otherwise requires, references herein to a “Subsidiary” shall refer to a
Subsidiary of Borrower.  The Subsidiaries of Borrower as of the
effective date of this Agreement, and their respective states or jurisdictions
of incorporation, are as set forth in Exhibit A annexed hereto.

    


    


    SECTION
2.  AMOUNT AND TERMS OF CREDIT

    


    2.1 Revolving Credit
Commitment.  Subject to the terms and conditions of this
Agreement, during the period from the effective date of this Agreement to but
excluding the Revolving Credit Commitment Termination Date, provided that no
Default or Event of Default then has occurred and is continuing, Bank will make
loans (collectively, the "Revolving Loans" and individually, a "Revolving Loan")
to Borrower as Borrower may request from time to time; provided, however, that
the aggregate principal amount of all such Revolving Loans outstanding at any
one time shall not exceed Twenty-Five Million Dollars ($25,000,000) or such
lesser amount to which it may (in Borrower’s discretion) be hereafter reduced
pursuant to Section 2.8 below (the "Revolving Credit
Commitment").  Each Revolving Loan requested and made hereunder shall
be in a principal amount of not less than Five Hundred Thousand Dollars
($500,000) or in an integral multiple of One Hundred Thousand Dollars ($100,000)
in excess thereof.  Within the limits of time and amount set forth in
this Section 2.1, Borrower may borrow, repay and reborrow Revolving Loans under
the Revolving Credit Commitment.  All Revolving Loans shall be
requested before the Revolving Credit Commitment Termination Date, on which date
all outstanding principal of and accrued but unpaid interest on the Revolving
Loans shall be due and payable.  Borrower's obligation to repay the
outstanding principal amount of all Revolving Loans, together with accrued


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    but
unpaid interest thereon, shall be evidenced by a promissory note issued by
Borrower in favor of Bank (the "Revolving Note") on the standard form used by
Bank to evidence its commercial loans.  Bank shall enter the amount of
each Revolving Loan, and any payments thereof, in its books and records, and
such entries shall be prima facie evidence of the
principal amount outstanding under the Revolving Credit
Commitment.  The failure of Bank to make any notation in its books and
records shall not discharge Borrower from its obligation to repay in full with
interest all amounts borrowed under the Revolving Credit
Commitment.  The proceeds of the Revolving Loans shall be disbursed
for the purposes set forth in Section 2.3(a) hereof pursuant to disbursement
instructions provided to Bank on Bank’s standard form therefor.

    


    2.2  Letter of Credit
Sublimit.  Subject to the terms and conditions of this
Agreement, and as a sublimit of the Revolving Credit Commitment, during the
period from the effective date of this Agreement to but excluding the Revolving
Credit Commitment Termination Date, provided that no Default or Event of Default
then has occurred and is continuing, Bank shall issue, for the account of
Borrower, one or more irrevocable commercial or standby letters of credit
(collectively, the "Letters of Credit," and individually, a "Letter of Credit")
upon Borrower’s request.  The parties specifically agree that the sum
of (a) the aggregate amount available to be drawn under all outstanding Letters
of Credit plus (b) the aggregate amount of unpaid reimbursement obligations
under drawn Letters of Credit shall not exceed Two Million Five Hundred Thousand
Dollars ($2,500,000) at any one time (the "Letter of Credit Sublimit") and shall
reduce, Dollar for Dollar, the amount available to be borrowed under the
Revolving Credit Commitment.  In the case of any commercial Letter of
Credit, such commercial Letter of Credit shall provide for transport documents
to be presented in a full set to Bank (and, in case of airway bills, consigned
to Bank) and/or at Bank's option, with transport documents presented in less
than a full set to Bank and/or consigned to Borrower or to any party other than
Bank and calling for drafts at sight covering the importation or purchase of
goods in the normal course of Borrower’s business.  In the case of any
standby Letter of Credit, such standby Letter of Credit shall be issued for the
purpose of supporting Borrower’s worker’s compensation or other insurance
obligations or for any other purpose acceptable to Bank.  Each Letter
of Credit shall be drawn on such terms and conditions as may be acceptable to
Bank and shall be governed by the terms of (and Borrower agrees to execute)
Bank's standard form Letter of Credit Agreement in connection
therewith.  No commercial Letter of Credit shall have an expiration
date more than one hundred eighty (180) days from its date of issuance or shall
expire after the Revolving Credit Commitment Termination Date.  No
standby Letter of Credit shall have an expiration date more than one (1) year
from its date of issuance or shall expire after the Revolving Commitment
Termination Date.

    


    2.3  Purposes of the
Revolving Loans and Letters of Credit.

    


    (a)  The proceeds of each
Revolving Loan made by Bank to Borrower under the Revolving Credit Commitment
shall be used only for the working capital and general corporate purposes of
Borrower, including providing funding for Capital Expenditures and repurchases
of Borrower's capital stock, to the extent permitted under this Agreement, and
for Permitted Acquisitions.

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    


    (b)  Each Letter of Credit to
be issued by Bank for the account of Borrower shall be issued only for the
purposes set forth in Section 2.2 hereinabove.

    


    2.4  Interest.

    


    (a)  Each Revolving Loan
shall bear interest at the rate or rates provided for in the Revolving Note and
selected by Borrower.

    


    (b)  Interest on the
Revolving Loans shall be computed on the basis of the actual number of days
during which the principal is outstanding thereunder divided by 360 or 365/366,
as the case may be, which shall, for the purposes of computing interest, be
considered one (1) year.

    


    (c)  Interest shall be
payable on the outstanding principal amount of each Revolving Loan as set forth
in the Revolving Note in accordance with Section 2.8 hereinbelow.

    


    2.5  Voluntary
Prepayment.  The principal Indebtedness evidenced by the
Revolving Note may, at any time and from time to time, voluntarily be paid or
prepaid in whole or in part without penalty or premium in accordance with the
terms of the Revolving Note, except that, with respect to any voluntary
prepayment under this Section 2.5, (a) the amount of any partial prepayment of a
Revolving Loan shall not be less than Five Hundred Thousand Dollars ($500,000)
and shall be in an integral multiple of One Hundred Thousand Dollars ($100,000)
in excess thereof and (b) any payment or prepayment of all or any part of any
Revolving Loan bearing interest at the Fixed Interest Rate (as such term is
defined in the Revolving Note) on a day other than the last day of the
applicable Interest Period (as such term is defined in the Revolving Note) shall
be subject to the payment of a prepayment fee as provided for in the Revolving
Note.

    


    2.6  Default Rate of
Interest.  If all or any portion of the principal amount of any
Revolving Loan or any other payment due under this Agreement or any of the other
Loan Documents shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue principal amount, and, to the extent
permitted by law, overdue interest thereon, shall be payable on demand at a rate
per annum equal to the default rate set forth in the Revolving Note (the
“Default Rate of Interest”), effective from the date that such amounts become
overdue until paid in full.

    


    2.7  Fees.

    


    (a)  On the first day of each
calendar quarter from and after the date hereof and on the date of termination
of the Revolving Credit Commitment and this Agreement, Borrower shall pay to
Bank an unused line fee in an amount equal to two tenths of one percent (0.20%)
per annum times the result of (i) the amount of the Revolving Credit Commitment
less (ii) the average
daily balance of outstanding Revolving Loans plus Letter of Credit Usage
during the immediately preceding quarter (or portion thereof).

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    


    (b)  Borrower shall pay
Bank's standard fees and commissions with respect to the issuance, negotiation
and amendment of Letters of Credit, as such fees and commissions may change at
any time and from time to time.  Bank shall not be obligated to refund
any portion of any fee or commission previously received hereunder if any Letter
of Credit shall expire or terminate prior to its stated expiration
date.  Notwithstanding the foregoing, the issuance fee payable by
Borrower in connection with any standby Letter of Credit issued hereunder shall
be equal to the applicable LIBOR Rate Margin (as such term is defined in the
Revolving Note) as in effect on the date of issuance of such standby Letter of
Credit.

    


    2.8  Reduction of Revolving
Credit Commitment.  Borrower may, from time to time, on not
less than five (5) Business Days advance notice to Bank, voluntarily reduce the
Revolving Credit Commitment, provided that: (i) each such reduction shall be in
amount of One Million Dollars ($1,000,000) or a larger multiple of Five Hundred
Thousand Dollars ($500,000), and (ii) the Revolving Credit Commitment, as so
reduced, shall not be less than the aggregate amount of the Revolving Loans and
Letter of Credit Usage at the time outstanding.

    


    2.9  Bank's Right to Charge
Deposit Account.  Upon Bank's receipt of authorization from
Borrower, Bank may from time to time charge any principal and/or interest due or
past due in respect of the Obligations under this Agreement and the other Loan
Documents against any deposit account maintained by Borrower with Bank;
provided, however, that Bank shall not have any obligation to charge past due
payments against such deposit account.

    


    


    SECTION
3.  CONDITIONS

    


    3.1  Conditions Precedent
to Initial Revolving Loan.  The obligation of Bank to make its
initial Revolving Loan hereunder is subject to the fulfillment, to the
satisfaction of Bank and its counsel, of each of the following
conditions:

    


    (a)  Revolving
Note.  Bank shall have received the Revolving Note, duly
executed by Borrower to the order of Bank;

    


    (b)  Resolutions.

    


    (i)  Bank shall have received
a certificate, in form and substance acceptable to Bank, duly executed by the
secretary or an assistant secretary of Borrower, attesting to a resolution of
the board of directors of Borrower authorizing the execution and delivery of
this Agreement, the Revolving Note and all other Loan Documents required
hereunder to which Borrower is a party and authorizing specific responsible
officers of Borrower to execute same; and

    


    (ii)  Bank shall have
received a certificate, in form and substance acceptable to Bank, duly executed
by the secretary or assistant secretary of each 

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    Guarantor,
attesting to a resolution of the board of directors of such Guarantor
authorizing the execution and delivery of its Guaranty and all other Loan
Documents required hereunder to which such Guarantor is a party and authorizing
specific responsible officers of such Guarantor to execute same;

    


    (c)  Certificates or Articles of
Incorporation.  Bank shall have received certificates or
articles of incorporation with respect to Borrower and the Guarantors, and any
amendments thereto or restatements thereof, certified by the applicable
secretary of state of the state of incorporation of each such
corporation;

    


    (d)  Certificates of Good
Standing.  Bank shall have received a certificate of good
standing for each of Borrower and the Guarantors, showing that each of Borrower
and the Guarantors is in good standing under the laws of the state or other
jurisdiction where such corporation is incorporated;

    


    (e)  Authorization to
Disburse.  Bank shall have received an Authorization to
Disburse, on Bank's standard form therefor, duly executed by Borrower, directing
Bank to disburse the proceeds of the Revolving Loans as provided for in Section
2.3(a) hereof;

    


    (f)  UCC Search
Results.  Bank shall have received, with respect to Borrower
and the Guarantors, such UCC search results, tax lien and litigation search
results, insurance binders and certificates, waivers and consents, and such
other similar documents with respect to Borrower and the Guarantors as Bank may
require, and in such form as Bank may require;

    


    (g)  Guaranty.  Bank
shall have received the Guaranty of the Significant Domestic Subsidiaries
existing on the date of this Agreement, duly executed by such Significant
Domestic Subsidiaries;

    


    (h)  Stock Pledge
Agreement.  Bank shall have received the Stock Pledge Agreement
with respect to the pledge of 65% of the capital stock of the Significant
Foreign Subsidiaries existing on the date of this Agreement, duly executed by
Borrower;

    


    (i)  Fee.  Bank shall
have received payment of the nonrefundable fee in respect of the Revolving
Credit Commitment, as provided for in the Fee Letter;

    


    (j)  No Material Adverse
Change.  No material adverse change shall have occurred in the
business, operations, assets, prospects, earnings or condition (financial or
otherwise) of Borrower or any Guarantor since September 30, 2008;

    


    (k)  Certain
Matters.  Bank shall be satisfied, in its sole and absolute
discretion, with all legal, tax and regulatory matters concerning Borrower and
its Subsidiaries;

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    


    (l)  No Default or Event of
Default.  No Default or Event of Default shall have occurred
and be continuing on the date of the making of such Revolving Loan, nor shall
either result from the making of such Revolving Loan; and

    


    (m)  Other
Documents.  Bank shall have received such other documents,
instruments and agreements as Bank may reasonably require in order to effect
fully the transactions contemplated by this Agreement and the other Loan
Documents.

    


    3.2  Conditions Precedent to Letters of
Credit.  The obligation of Bank to issue the initial and each
subsequent Letter of Credit hereunder is subject to the receipt by Bank, on or
prior to the date of issuance of such Letter of Credit, of the following, each
in form and substance reasonably satisfactory to Bank:

    


    (a) Letter of Credit
Agreement.  A Letter of Credit Agreement, duly executed by
Borrower; and

    


    (b)
Letter of Credit
Commission.  The commission payable with respect to the
issuance of such Letter of Credit, in the amount provided for in Section 2.7(b) hereof.

    


    3.3  Conditions Precedent to Subsequent
Credit.  The obligation of Bank to make each Revolving Loan
hereunder subsequent to the initial Revolving Loan and to issue each Letter of
Credit hereunder is subject to the fulfillment, at or prior to the time of the
making of such Revolving Loan or the issuance of such Letter of Credit, of each
of the following further conditions:

    


    (a)  Representations and
Warranties.  The representations and warranties contained in
this Agreement shall be true, complete and accurate in all material respects on
and as of such date (except to the extent that such representations and
warranties relate solely to any earlier date); and

    


    (b)  No Default or Event of
Default.  No Default or Event of Default shall have occurred
and be continuing on the date of the making of such Revolving Loan or the
issuance of such Letter of Credit, nor shall either result from the making of
such Revolving Loan or the issuance of such Letter of Credit.

    


    3.4  Condition Subsequent
to Initial Revolving Loan and Letter of Credit.  The obligation
of Bank to continue making Revolving Loans or issuing Letters of Credit
hereunder is subject to the fulfillment, to the satisfaction of Bank and its
counsel, of the following condition subsequent, and the failure to timely
satisfy such condition shall constitute an Event of Default:

    


    (a)   Delivery of Stock Certificate and
Stock Power.  Within 60 days after the Closing Date, Bank shall
have received a certificate representing 65% of the issued and outstanding
ordinary shares of j2 Global Holdings Limited and a stock power executed in
blank and undated relative to such certificate.

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    SECTION
4.  REPRESENTATIONS AND WARRANTIES

    


    Borrower represents and warrants
that:

    


    4.1  Principal Business
Activity.  The principal business activity of Borrower is
conducting the Business.

    


    4.2  Authority to
Borrow.  The execution, delivery and performance of this
Agreement, the Revolving Note and all other Loan Documents to which Borrower or
any of the Guarantors is a party are not in contravention of any of the terms of
any indenture, agreement or undertaking to which Borrower or any of the
Guarantors is a party or by which it or any of its property is bound or
affected.

    


    4.3  Financial
Statements.  The consolidated Financial Statement of Borrower
and its Subsidiaries (on Form 10K), for the fiscal year of Borrower and its
Subsidiaries ended December 31, 2007, has heretofore been furnished to Bank, and
is true and complete and fairly represents the financial condition of Borrower
and its Subsidiaries for the fiscal year covered thereby.  Since
December 31, 2007, there has been no material adverse change in the business,
operations, assets, prospects, earnings or condition (financial or otherwise) of
Borrower or any of its Subsidiaries.

    


    4.4  Adverse
Change.  Except for assets which may have been disposed of in
the ordinary course of business, Borrower and its Subsidiaries have good and
marketable title to all of the property reflected in the consolidated Financial
Statement of Borrower and its Subsidiaries (on Form 10K) for the fiscal year
ended December 31, 2007 and to all property acquired by them since that date,
free and clear of all Liens, except for (a) those specifically set forth therein
and (b) any Permitted Liens.

    


    4.5  No
Litigation.  Except as disclosed in the most recent Form 10K or
10Q filed by Borrower with the Securities and Exchange Commission, there is no
litigation or proceeding pending or threatened against Borrower or any of its
Subsidiaries, or any of their respective properties, the results of which, if
decided adversely, are likely to have a material adverse effect on the financial
condition, property or business of Borrower or any of its Subsidiaries or result
in liability (other than the obligation to pay deductibles) in excess of the
insurance coverage of Borrower or any of its Subsidiaries.

    


    4.6  No Default or Event of
Default.  Neither Borrower nor any of its Subsidiaries is now
in default in the payment of any of its material obligations, and there exists
no Default or Event of Default.

    


    4.7  Organization.  Each
of Borrower and its Subsidiaries is duly organized and existing under the laws
of the state or jurisdiction of its incorporation, without limitation as to its
existence, and has the power and authority to carry on the business in which it
is engaged and proposes to engage.

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    


    4.8  Power and
Authority.  Borrower has the corporate power and authority to
enter into this Agreement and to execute and deliver the Revolving Note and all
of the other Loan Documents to which it is a party.  Each Guarantor
has the corporate power and authority to execute and deliver its Guaranty and
any other Loan Document to which it is a party.

    


    4.9  Qualification.  Each
of Borrower and its Subsidiaries is duly qualified and in good standing as a
foreign corporation wherever such qualification is required, except in those
jurisdictions where the failure to so qualify would not have a material adverse
effect on the business, operations, assets, prospects, earnings or condition
(financial or otherwise) of Borrower and its Subsidiaries, taken as a
whole.

    


    4.10  ERISA.  The
defined benefit pension plans (as such term is defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) of Borrower and
its Subsidiaries meet, as of the date hereof, the minimum funding standards of
section 302 of ERISA, and no Reportable Event (as such term is defined in ERISA)
or Prohibited Transaction (as such term is defined in ERISA) has occurred with
respect to any such plan.

    


    4.11  Regulation
U.  No action has been taken or is currently planned by
Borrower, or any agent acting on its behalf, which would cause this Agreement or
any Revolving Loan to violate Regulation U or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Securities and
Exchange Act of 1934, in each case as in effect now or as the same may hereafter
be in effect.  Borrower is not engaged principally, or as one of its
most important activities, in the business of extending credit for the purpose
of purchasing or carrying "margin stock" as that term is defined in Regulation U
and none of the proceeds of any Revolving Loan hereunder have been or shall be
used for the purpose, directly or indirectly, of purchasing or carrying any such
margin stock.

    


    4.12  Solvency.  After
giving effect to this Agreement and the other Loan Documents (including after
giving effect to the initial Revolving Loan made, and the initial Letter of
Credit issued, under this Agreement), Borrower will be Solvent.

    


    


    SECTION
5.  AFFIRMATIVE COVENANTS

    


    Borrower covenants and agrees that, so
long as this Agreement shall be in effect and until payment in full of all
Obligations, including, without limitation, any accrued and unpaid interest
thereon, and any other amounts due hereunder, Borrower shall perform each and
all of the following covenants applicable to it, unless Bank otherwise consents
in writing:

    


    5.1  Payment of
Obligations.  Borrower shall promptly pay and discharge, and
cause each of its Subsidiaries to promptly pay and discharge, all taxes,
assessments and other governmental charges and claims levied or imposed upon it
or its property, or any part thereof; provided, however, that Borrower and its
Subsidiaries shall have the 

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    right in
good faith to contest any such taxes, assessments, charges or claims and,
pending the outcome of such contest, to delay or refuse payment thereof,
provided that such reserves as may be required by GAAP are established by them
to pay and discharge any such taxes, assessments, charges and
claims.

    


    5.2  Maintenance of
Existence.  Each of Borrower and the Guarantors shall maintain
and preserve its existence and assets and all rights, franchises and other
authority necessary for the conduct of its business and shall maintain and
preserve its property, equipment and facilities in good order, condition and
repair.  Bank may, at reasonable times, visit and inspect any of the
properties of Borrower and its Subsidiaries.

    


    5.3  Records.  Each
of Borrower and its Subsidiaries shall keep and maintain full and accurate
accounts and records of its operations in accordance with GAAP and, upon
reasonable advance notice by Bank (unless an Event of Default has occurred and
is continuing, in which case no such notice shall be required), shall permit
Bank to have access thereto, to make examination thereof, and to audit same
during regular business hours.

    


    5.4  Information
Furnished.  Borrower shall furnish or cause to be furnished to
Bank:

    


    (a)  Quarterly Consolidated Financial
Statements.  Within forty-five (45) days after the close of
each fiscal quarter of Borrower and its Subsidiaries, except for the last fiscal
quarter of each fiscal year, a copy of the unaudited consolidated Financial
Statements of Borrower and its Subsidiaries (on Form 10Q) as of the close of
such fiscal quarter, prepared by Borrower in accordance with GAAP;

    


    (b)  Annual Consolidated Financial
Statements.  Within one hundred (100) days after the close of
each fiscal year of Borrower and its Subsidiaries, a copy of the consolidated
Financial Statements of Borrower and its Subsidiaries (on Form 10K) as of the
close of such fiscal year, prepared on an audited basis in accordance with GAAP
by an independent certified public accountant selected by Borrower and
reasonably satisfactory to Bank;

    


    (c)  Compliance Certificate; Internally
Prepared Balance Sheets.  Contemporaneously with the furnishing
of each of the Financial Statements required pursuant to subsections (a) and (b)
of this Section 5.4, internally prepared balance sheets showing assets and
liabilities of Borrower and each of its Subsidiaries and a Compliance
Certificate (i) setting forth in reasonable detail the calculations required to
establish that Borrower was in compliance with the financial covenants set forth
in Section 6.11 through Section 6.14, inclusive, hereof during the period
covered by such Financial Statements and (ii) stating that, except as explained
in reasonable detail in such Compliance Certificate, (A) all of the
representations, warranties and covenants of Borrower contained in this
Agreement and the other Loan Documents to which Borrower is a party are correct
and complete as at the date of such Compliance Certificate, except for those
representations and warranties which relate to a particular 

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    date and
(B) no Default or Event of Default then exists or existed during the period
covered by such Financial Statements.  If such Compliance Certificate
discloses that a representation or warranty is not correct or complete, that a
financial covenant has not been complied with, or that a Default or Event of
Default exists or existed, such Compliance Certificate shall set forth the
action, if any, that Borrower has taken or proposes to take with respect
thereto;

    


    (d)  Projections.  Within
one hundred (100) days after the close of each fiscal year of Borrower and its
Subsidiaries, a budget for Borrower and its Subsidiaries for the fiscal year,
which budget Bank shall treat as confidential, being solely for the purposes of
this Agreement, and shall not disclose for any purpose except in response to
legal process or regulatory action;

    


    (e)  Shareholder
Information.  Promptly after their becoming available, copies
of reports, notices and proxy statements sent or made available by Borrower to
its shareholders, all registration statements and annual, quarterly or monthly
reports, if any, filed with the Securities and Exchange Commission and all press
releases filed by Borrower or any of its Subsidiaries concerning material
developments in the Business; and

    


    (f)  Other
Information.  Such other financial statements and information
concerning Borrower and Guarantors as Bank may reasonably request from time to
time.

    


    Notwithstanding anything to the
contrary herein, to the extent information of the type described in clauses (a),
(b) and (d) above are publicly available on EDGAR, or similar publicly available
internet reporting service to which Bank has access, Borrower shall be deemed to
have satisfied its obligation under clause (a), (b) and (d) upon its posting of
such information to such publicly available website.

    


    5.5  Insurance.  Each
of Borrower and its Subsidiaries shall keep all of its insurable property,
whether real, personal or mixed, insured by good and responsible companies
selected by Borrower and its Subsidiaries and having an A.M. Best Rating of "A"
or better, or otherwise approved by Bank, against fire and such other risks as
are customarily insured against by companies conducting similar business with
respect to like properties.  Borrower has furnished to Bank a
statement of its insurance coverage currently in place and Bank confirms that it
is satisfied that the insurance and insurers so disclosed currently meet the
requirements of this Section 5.5.  Each of Borrower and its
Subsidiaries shall maintain adequate worker's compensation insurance and
adequate insurance against liability for damage to persons or
property.  Each policy shall require ten (10) days’ written notice to
Bank before such policy may be altered or cancelled.

    


    5.6  Bank
Expenses.  Borrower shall pay or reimburse Bank, for all Bank
Expenses within three (3) Business Days after Bank’s written demand for such
payment.

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    


    5.7  Brokerage
Fees.  Neither Borrower nor any of its Subsidiaries shall pay,
directly or indirectly, any fee, commission or compensation of any kind to any
Person for any services performed or to be performed in connection with this
Agreement.

    


    5.8  Notice of Default or
Event of Default.  Borrower shall give prompt written notice to
Bank of any Default or Event of Default under this Agreement and of any default
under any other Loan Document, and shall give prompt written notice to Bank of
any Change of Control, change in name, liquidation and of any other matter which
has resulted in, or is likely to result in, a material adverse change in the
business, operations, assets, prospects, earnings or condition (financial or
otherwise) of Borrower or any of its Subsidiaries.

    


    5.9  Execution of Other
Documents.  Borrower shall promptly, and shall cause each of
the Guarantors to promptly, upon demand by Bank, execute all such additional
agreements, contracts, documents and instruments in connection with this
Agreement as Bank may reasonably request in order to effect fully the
transactions contemplated herein.

    


    5.10  Reports Under Pension
Plans.  Borrower shall furnish to Bank, as soon as possible and
in any event within fifteen (15) days after Borrower knows or has reason to know
that any event or condition described in Section 4.10 hereof has occurred, a
statement of the president or the chief financial officer of Borrower describing
such event or condition and the action, if any, that Borrower proposes to take
with respect thereto.

    


    5.11  After-Acquired or
Formed Significant Subsidiary.  Borrower shall cause any
Significant Domestic Subsidiary that is acquired or formed after the effective
date of this Agreement and each existing Subsidiary that hereafter becomes a
Significant Domestic Subsidiary to execute and deliver a Guaranty to
Bank.  Together with each such Guaranty, Borrower shall also cause the
relevant Significant Domestic Subsidiaries to deliver to Bank such organization
documentation and corporate resolutions as reasonably required by Bank to
evidence such Significant Domestic Subsidiaries existence and authority to
execute and deliver its Guaranty.  Borrower shall execute and deliver
to Bank a Stock Pledge Agreement, together (if applicable in the case of the
relevant Significant Foreign Subsidiary) with stock certificates and stock
powers executed in blank and undated, with respect to sixty five percent (65%)
of the capital stock owned by Borrower in any Significant Foreign Subsidiary
that is acquired or formed after the effective date of this
Agreement.

    


    


    SECTION
6.  NEGATIVE COVENANTS

    


    Borrower covenants and agrees that, so
long as this Agreement shall be in effect and until payment in full of all
Obligations, including, without limitation, any accrued and unpaid interest
thereon, and any other amounts due hereunder, Borrower shall perform each and
all of the following covenants applicable to it, unless Bank otherwise consents
in writing:

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    


    6.1  Liens.  Borrower
shall not create, incur, assume or permit to exist, or permit any of its
Subsidiaries to create, incur, assume or permit to exist, directly or
indirectly, any Lien on or with respect to any of its property, whether real,
personal or mixed, and whether now owned or hereafter acquired, or upon the
income or profits therefrom, other than Permitted Liens.

    


    6.2  Dispositions.  Borrower
shall not make, or permit any of its Subsidiaries to make, any Material
Disposition of its property, whether now owned or hereafter
acquired.

    


    6.3  Indebtedness.  Borrower
shall not create, incur or assume, or permit any of its Subsidiaries to create,
incur or assume, any Indebtedness, other than Permitted
Indebtedness.

    


    6.4  Guaranty
Obligations.  Borrower shall not create, incur or assume, or
permit any of its Subsidiaries to create, incur or assume, any Guaranty
Obligations, other than Permitted Guaranty Obligations.

    


    6.5  Mergers.  Borrower
shall not merge or consolidate, and shall not permit any of its Subsidiaries to
merge or consolidate, with or into any Person, except for (a) mergers and
consolidations of a Subsidiary of Borrower into Borrower (b) mergers and
consolidations of any Subsidiary with another Subsidiary; provided that if
either such Subsidiary is a Guarantor, the surviving entity of such merger shall
be the Guarantor; and (c) mergers and consolidations of a Person into Borrower
or into a Subsidiary of Borrower that constitute Permitted Acquisitions
hereunder; provided that (i) Borrower or such Subsidiary is the surviving entity
of such merger or consolidation, (ii) no Default or Event of Default then exists
or would result therefrom and (iii) Borrower or such Subsidiary executes such
amendments to or restatements of the Loan Documents as Bank may reasonably
determine are appropriate as a result of such merger or
consolidation.

    


    6.6  Acquisitions.  Borrower
shall not make any Acquisition other than a Permitted Acquisition.

    


    6.7  Loans and
Advances.  Borrower shall not make, or permit any of its
Subsidiaries to make, any loans or advances or otherwise extend credit to any
other Person, except that (a) Borrower or any of its Subsidiaries may extend
trade credit in the ordinary course of business (b) Borrower or any of its
Subsidiaries may make loans or advances or extend trade credit to any other
Subsidiaries or to Borrower in the ordinary course of business, and (c) Borrower
and its Subsidiaries may make Strategic Advances to the extent that, after
giving effect thereto, Borrower is in pro forma compliance with Sections 6.11,
6.12 and 6.13 hereof and no Default or Event of Default shall
exist.

    


    6.8  Investments.  Borrower
shall not purchase the debt or equity of another Person except for (a) savings
accounts and certificates of deposit of Bank, (b) direct U.S. 

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    Government
obligations and commercial paper issued by corporations with the top ratings of
Moody's Investors Service, Inc. or the Standard & Poor's Ratings Division of
McGraw-Hill, Inc., provided that all such permitted investments shall mature
within three (3) years of purchase, (c) debt or equity of another Person
constituting a Liquid Asset under this Agreement, (d) Permitted Acquisitions,
and (e) Strategic Advances to the extent permitted under Section 6.7
hereof.

    


    6.9  Restricted
Payments.  Borrower shall not make, or permit any of its
Subsidiaries to make, directly or indirectly, in any fiscal year, any Restricted
Payment, unless at the time of such proposed Restricted Payment, and after
giving proforma effect thereto, no Default or Event of Default shall have
occurred and be continuing hereunder and Borrower shall remain in proforma
compliance with Sections 6.11, 6.12 and 6.13 hereof.

    


    6.10  Retirement of
Stock.  Borrower shall not redeem, repurchase or retire, or
permit any of its Subsidiaries to redeem, repurchase or retire, any shares of
its capital stock, unless at the time of such proposed redemption, repurchase or
retirement, and after giving proforma effect thereto, no Default or Event of
Default shall have occurred and be continuing hereunder and Borrower shall
remain in proforma compliance with Sections 6.11, 6.12 and 6.13
hereof.

    


    6.11  EBITDA.  Borrower
shall not permit EBITDA, calculated as of the end of each fiscal quarter, to be
less than (a) Twenty Million Dollars ($20,000,000) or (b) in the event the
aggregate consideration for Permitted Acquisitions and Strategic Advances (as
set forth in greater detail in the definitions of "Permitted Acquisition" and
"Strategic Advance") exceeds Fifty Million Dollars ($50,000,000) during any
fiscal year, Twenty-Five Million Dollars ($25,000,000).

    


    6.12  Net
Worth.  Borrower shall not permit its Net Worth, calculated as
of the end of each fiscal quarter, to be less than the sum of (a) Two Hundred
Thirty Two Million Four Hundred Forty Thousand Dollars ($232,440,000) plus (b)
25% of Borrower's net income for each quarter ending after the effective date of
this Agreement.

    


    6.13  Liquid
Assets.  Borrower shall not permit Liquid Assets, at any time,
to be less than (a) Fifteen Million Dollars ($15,000,000) or (b) in the event
the aggregate consideration for Permitted Acquisitions and Strategic Advances
(as set forth in greater detail in the definitions of "Permitted Acquisition"
and "Strategic Advance") exceeds Fifty Million Dollars ($50,000,000) during any
fiscal year, Twenty Million Dollars ($20,000,000).

    


    6.14  Operating Lease
Obligations.  Borrower and its Subsidiaries shall not permit
their lease payments, as lessees, under existing and future operating leases to
exceed Five Million Dollars ($5,000,000) in the aggregate in any one fiscal
year.  Each of such operating leases shall be of equipment or real
property used by Borrower or any of its Subsidiaries in the ordinary course of
its business.

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    SECTION
7.  EVENTS OF DEFAULT

    


    7.1  Events of
Default.  The occurrence of any one or more of the following
events, acts or occurrences shall constitute an event of default (collectively,
“Events of Default," and individually, an “Event of Default”)
hereunder:

    


    (a)  Failure to Make Payments When
Due.  Borrower shall fail to pay (i) any interest payment due
under the Revolving Note or any of the fees due under Section 2.7 of this
Agreement within five (5) days after its due date or (ii) any other amount owing
under this Agreement or under any other Loan Document (including principal,
interest, fees and Bank Expenses) when such amount is due, whether at stated
maturity, as a result of any voluntary prepayment, by acceleration, by notice of
prepayment or otherwise; or

    


    (b)  Breach of Representation or
Warranty.  Any representation or warranty made by Borrower or
any of the Guarantors under this Agreement or any other Loan Document, or in any
certificate or Financial Statement heretofore or hereafter furnished by Borrower
or any of its Subsidiaries, shall prove to have been false, incorrect or
incomplete in any material respect when made, effective or reaffirmed, as the
case may be; or

    


    (c)  Violation of
Covenants.  (i) Borrower shall fail or neglect to perform ,
keep or observe any of the negative covenants set forth in Section 6 hereinabove
or (ii) Borrower or any of the Guarantors shall fail or neglect to perform, keep
or observe any term, provision, condition, covenant or agreement contained in
this Agreement or any other Loan Document (other than those set forth in clause
(i) of this subsection (c) or in subsection (a) or (b) hereinabove) and such
failure or neglect shall continue for a period of thirty (30) days;
or

    


    (d)  Insolvency
Proceeding.  Borrower or any of its Subsidiaries shall become
insolvent or shall fail generally to pay its Indebtedness as such Indebtedness
becomes due; or an Insolvency Proceeding shall be commenced by or against
Borrower or any of its Subsidiaries and, in the case of an involuntary petition
against Borrower or any of its Subsidiaries, such petition shall not be
dismissed or discharged within forty-five (45) days of commencement;
or

    


    (e)  Dissolution or
Liquidation.  Borrower or any of the Guarantors shall
voluntarily dissolve, liquidate or suspend its business in whole or in part; or
there shall be commenced against Borrower or any of its Subsidiaries any
proceeding for the dissolution or liquidation of Borrower or such Subsidiary and
such proceeding shall not be dismissed or discharged within forty-five (45) days
of commencement; or

    


    (f)  Appointment of
Receiver.  Borrower or any of its Subsidiaries shall apply for
or consent to the appointment, or commence any proceeding for the appointment,
of a receiver, trustee, custodian or similar official for all or substantially
all of its property; or any proceeding for the appointment of a receiver,
trustee, custodian or similar official for all or substantially all of the
property of Borrower or any of its Subsidiaries shall be 

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    commenced
against Borrower or such Subsidiary and shall not be dismissed or discharged
within forty-five (45) days of commencement; or

    


    (g)  Judgments and
Attachments.  Borrower or any of its Subsidiaries, or any of
their respective properties, shall suffer one or more money judgments, writs,
warrants of attachment or similar process involving the payment of money in
excess of Fifteen Million Dollars ($15,000,000) in the aggregate during the term
of this Agreement and such judgments, writs, warrants of attachment or similar
process shall remain undischarged in accordance with their terms and the
enforcement thereof shall be unstayed and either (i) enforcement proceedings
shall have been commenced and be pending by any creditor thereon or (ii) there
shall have been a period of forty-five (45) consecutive calendar days during
which stays of such judgments, writs, warrants of attachment or similar process,
by reason of pending appeals or otherwise, were not in effect; or

    


    (h)  Failure to
Comply.  Borrower or any of its Subsidiaries shall fail to
comply with any order, non-monetary judgment, injunction, decree, writ or demand
of any court or other public authority, and such order, non-monetary judgment,
injunction, decree, writ or demand shall continue unsatisfied and in effect for
a period of thirty (30) days without being vacated, discharged, satisfied or
stayed or bonded pending appeal; or

    


    (i)  Notice Regarding
Taxes.  A notice of levy, notice to withhold or other legal
process for taxes (other than property taxes) shall be filed or recorded against
Borrower or any of its Subsidiaries, or against the property of Borrower or any
of its Subsidiaries, and such notice or other legal process shall not be
released, stayed, vacated, bonded or otherwise dismissed within thirty (30) days
after the date of its filing or recording; or

    


    (j)  Change of
Control.  A Change of Control shall occur; or

    


    (k)  Effectiveness of Loan
Documents.  Any Loan Document shall become ineffective, or
Borrower or any of the Guarantors shall disavow or attempt to revoke or
terminate any Loan Document to which it is a party; or

    


    (l)  Default Under Other
Agreements.  Borrower or any of its Subsidiaries shall (i) fail
under any agreement, document or instrument to pay the principal, or any
principal installment, of any present or future Indebtedness for borrowed money
of Three Million Dollars ($3,000,000) or more, or any guaranty of present or
future Indebtedness for borrowed money of Three Million Dollars ($3,000,000) or
more, when due (or within any stated grace period), whether at the stated
maturity, upon acceleration, by reason of any required prepayment or otherwise
or (ii) fail to perform or observe any other term, covenant or other provision
of any agreement, document or instrument binding upon Borrower or such
Subsidiary if, as a result of such failure, any Person has the right to
accelerate the Indebtedness of Borrower or such Subsidiary in an amount in
excess of Three Million Dollars ($3,000,000) or otherwise require the payment of
any amount of Indebtedness in excess of Three Million Dollars ($3,000,000)


    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    to be
paid prior to the date when such amount would otherwise become due, unless in
any such case (a) the holder of such Indebtedness has waived or consented to
such failure to pay, perform or observe, or (b) Borrower or such Subsidiary is,
in good faith and by appropriate proceedings diligently pursued, contesting or
disputing the existence of such failure to pay, perform or observe, as the case
may be.

    


    7.2  Remedies.  Upon
the occurrence of an Event of Default, unless such Event of Default shall have
been remedied within any applicable grace period or waived in writing by Bank,
Bank may, at its option, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived, do one or more of the following
at any time or times and in any order: (a) reduce the amount of or refuse to
make any Revolving Loan under this Agreement; (b) declare any and all
Obligations outstanding under this Agreement to be immediately due and payable,
notwithstanding anything contained herein or in the Revolving Note or any other
Loan Document to the contrary (provided, however, that upon the occurrence of
any Event of Default described in Section 7.1(d), (e) or (f) hereof, all
Obligations shall automatically become due and payable); and (c) enforce payment
of all Obligations of Borrower and its Subsidiaries under this Agreement and the
other Loan Documents.  Notwithstanding any provision to the contrary
contained herein, Bank shall have no obligation to make any Revolving Loan to,
or issue any Letter of Credit for the account of, Borrower during any grace
period provided for in Section 7.1 hereof.

    


    


    SECTION
8.  MISCELLANEOUS PROVISIONS

    


    8.1  Additional
Remedies.  The rights, powers and remedies given to Bank
hereunder shall be cumulative and not alternative and shall be in addition to
all rights, powers and remedies given to Bank by law against Borrower or any
other Person, including but not limited to Bank's rights of setoff or banker's
lien.

    


    8.2  Nonwaiver.  Any
forbearance or failure or delay by Bank in exercising any right, power or remedy
hereunder shall not be deemed a waiver thereof and any single or partial
exercise of any right, power or remedy shall not preclude the further exercise
thereof.  No waiver shall be effective unless it is in writing and
signed by an officer of Bank.

    


    8.3  Inurement.  The
benefits of this Agreement shall inure to the successors and assigns of Bank and
the permitted successors and assigns of Borrower.  Borrower shall not
assign any of its rights or obligations under this Agreement to any Person
without Bank's prior written consent, and any assignment attempted without
Bank's prior written consent shall be void.  Bank shall not, so long
as no Event of Default exists, assign any of its rights or obligations under
this Agreement to any Person without Borrower’s prior written consent, which
shall not be unreasonably withheld.

    


    8.4  Governing Law;
Venue.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS 

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    AGREEMENT
AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND
THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED
IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF
LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.  BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN LOS ANGELES COUNTY, CALIFORNIA SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND
BANK PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT BANK AND BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF LOS ANGELES COUNTY,
CALIFORNIA; AND FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED
OR OPERATE TO PRECLUDE BANK FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON ANY COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF BANK.  BORROWER EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  BORROWER HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN
SECTION 9.1 OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

    


    8.5  Severability.  Should
any one or more provisions of this Agreement be determined to be illegal or
unenforceable, all other provisions nevertheless shall be
effective.

    


    8.6  Integration
Clause.  Except for the other Loan Documents to which Borrower
is a party, this Agreement constitutes the entire agreement between Bank and
Borrower, and all prior communications, whether verbal or written, between
Borrower and Bank shall be of no further effect or evidentiary
value.

    


    8.7  Construction.  The
Section and subsection headings herein are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    


    8.8  Amendments.  This
Agreement may be amended only in writing signed by all parties
hereto.

    


    8.9  Documentation.  All
documentation evidencing or pertaining to the Obligations under this Agreement
and the other Loan Documents shall be on Bank's standard forms or otherwise in
form and content acceptable to Bank.  To the extent that the terms or
conditions of this Agreement are inconsistent with the terms or conditions of
such documentation, the terms and conditions of this Agreement shall
prevail.

    


    8.10  Counterparts.  This
Agreement may be executed in as many counterparts as may be deemed necessary or
convenient, and by the different parties hereto on separate counterparts each of
which, when so executed, shall be deemed an original but all such counterparts
shall constitute but one and the same agreement.  This Agreement shall
become effective upon the receipt by Bank and Borrower of executed counterparts
signed by each of them.

    


    8.11  Setoff.  Borrower
hereby acknowledges and specifically grants Bank a banker’s lien upon, and right
of recoupment and setoff respecting any and all deposit or other accounts
maintained by Borrower with Bank, whether held in a general or special account
or deposited for safekeeping or otherwise, and regardless of how such account
may be titled, and any other property of Borrower held in the possession or
custody of Bank or its agents.  Borrower further acknowledges that the
exercise of setoff, if any, shall require, and only be deemed to occur upon, the
affirmative action of Bank.  Bank agrees to notify Borrower promptly
after any such setoff and application; provided, however, that the failure to
give such notice shall not affect the validity of such setoff and
application.

    


    8.12  Indemnification.  Borrower
agrees to indemnify, save and hold harmless Bank and its respective directors,
officers, agents, attorneys and employees (collectively, the "Indemnitees," and
individually, an “Indemnitee”) from and against: (a) any and all claims,
demands, actions or causes of action, if the claim, demand, action or cause of
action arises out of or relates to any act or omission (or alleged act or
omission) of Borrower, its Subsidiaries or any of its officers, directors or
stockholders relating to the Revolving Credit Commitment or the use or
contemplated use of proceeds of any Revolving Loan; (b) any administrative or
investigative proceeding by any governmental agency arising out of or related to
a claim, demand, action or cause of action described in clause (a) hereinabove;
and (c) any and all liabilities, losses, reasonable costs or expenses (including
reasonable attorneys' fees and disbursements of such attorneys and other
professional services) that any Indemnitee suffers or incurs as a result of the
assertion of any foregoing claim, demand, action or cause of action (including
as a result of any contest of the validity, applicability or amount of such
claim, demand, action or cause of action, as described below in this Section
8.12); provided, however, that no Indemnitee shall be entitled to
indemnification for any loss caused by its own breach of its obligations under
this Agreement or the other Loan Documents or its own gross negligence or
willful misconduct or for any liability, loss, cost or expense asserted against
it by another Indemnitee.  If any claim, demand, action or cause of
action is 

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    asserted
against any Indemnitee, such Indemnitee shall promptly notify Borrower, but the
failure to so promptly notify Borrower shall not affect Borrower's obligations
under this Section 8.12 unless such failure materially prejudices Borrower's
right to participate in the contest of such claim, demand, action or cause of
action, as hereinafter provided.  Such Indemnitee may (and shall, if
requested by Borrower in writing) contest the validity, applicability and amount
of such claim, demand, action or cause of action and shall permit Borrower to
participate in such contest.  Any Indemnitee that proposes to settle
or compromise any claim or proceeding for which Borrower may be liable for
payment of indemnity hereunder shall give Borrower written notice of the terms
of such proposed settlement or compromise reasonably in advance of settling or
compromising such claim or proceeding and shall obtain Borrower's prior consent
(which shall not be unreasonably withheld or delayed).  In connection
with any claim, demand, action or cause of action covered by this Section 8.12
against more than one Indemnitee, all such Indemnitees shall be represented by
the same legal counsel (which may be a law firm engaged by the Borrower (if such
counsel is acceptable to the Indemnitees), the Indemnitees or attorneys employed
by an Indemnitee or a combination of the foregoing); provided, that if such
legal counsel determines in good faith that representing all such Indemnitees
would or could result in a conflict of interest under laws or ethical principles
applicable to such legal counsel or that a defense or counterclaim is available
to an Indemnitee that is not available to all such Indemnitees, then to the
extent reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each affected
Indemnitee shall be entitled to separate representation by legal counsel
selected by that Indemnitee and reasonably acceptable to Borrower, with all such
legal counsel using reasonable efforts to avoid unnecessary duplication of
effort by counsel for all Indemnitees; and further provided that Bank (as an
Indemnitee) shall at all times be entitled to representation by separate legal
counsel (which may be a law firm or attorneys employed by Bank or a combination
of the foregoing).  Any obligation or liability of Borrower to any
Indemnitee under this Section 8.12 shall survive the expiration or termination
of this Agreement and the repayment of the Revolving Loans and the payment and
performance of all other Obligations owed to Bank.

    


    8.13  Disputes.  TO THE
EXTENT PERMITTED BY LAW, IN CONNECTION WITH ANY CLAIM, CAUSE OF ACTION,
PROCEEDING OR OTHER DISPUTE CONCERNING THE LOAN DOCUMENTS (EACH A “CLAIM”), THE
PARTIES TO THIS AGREEMENT EXPRESSLY, INTENTIONALLY, AND DELIBERATELY WAIVE ANY
RIGHT EACH MAY OTHERWISE HAVE TO TRIAL BY JURY.  IN THE EVENT THAT THE
WAIVER OF JURY TRIAL SET FORTH IN THE PREVIOUS SENTENCE IS NOT ENFORCEABLE UNDER
THE LAW APPLICABLE TO THIS AGREEMENT, THE PARTIES TO THIS AGREEMENT AGREE THAT
ANY CLAIM, INCLUDING ANY QUESTION OF LAW OR FACT RELATING THERETO, SHALL, AT THE
WRITTEN REQUEST OF ANY PARTY, BE DETERMINED BY JUDICIAL REFERENCE PURSUANT TO
THE STATE LAW APPLICABLE TO THIS AGREEMENT.  THE PARTIES SHALL SELECT
A SINGLE NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE OR FEDERAL
JUDGE.  IN THE EVENT THAT THE PARTIES CANNOT AGREE UPON A REFEREE, THE
COURT SHALL APPOINT THE REFEREE.  THE REFEREE SHALL REPORT A STATEMENT
OF DECISION TO THE 

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    COURT.  NOTHING
IN THIS PARAGRAPH SHALL LIMIT THE RIGHT OF ANY PARTY AT ANY TIME TO EXERCISE
SELF-HELP REMEDIES, FORECLOSE AGAINST COLLATERAL OR OBTAIN PROVISIONAL
REMEDIES.  THE PARTIES SHALL BEAR THE FEES AND EXPENSES OF THE REFEREE
EQUALLY, UNLESS THE REFEREE ORDERS OTHERWISE.  THE REFEREE SHALL ALSO
DETERMINE ALL ISSUES RELATING TO THE APPLICABILITY, INTERPRETATION, AND
ENFORCEABILITY OF THIS PARAGRAPH.  THE PARTIES ACKNOWLEDGE THAT IF A
REFEREE IS SELECTED TO DETERMINE THE CLAIMS, THEN THE CLAIMS WILL NOT BE DECIDED
BY A JURY.

    


    8.14  USA Patriot Act
Notice.  Bank hereby notifies Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Patriot Act"), Bank is required to obtain, verify
and record information that identifies Borrower, which information includes the
name and address of Borrower and other information that will allow Bank to
identify Borrower in accordance with the Patriot Act.

    


    SECTION
9.  NOTICES

    


    9.1  Notices.  Any
notice or other communication provided for or allowed hereunder shall be
considered to have been validly given if delivered personally, and evidenced by
a receipt signed by an authorized agent or addressee, or 72 hours after being
deposited in the United States mail, registered or certified, postage prepaid,
return receipt requested, or 48 hours after being sent by Federal Express or
other courier service, or, in the case of telecopied notice, when telecopied,
receipt acknowledged, and addressed as provided below.

    


    If to
Borrower:                               j2
Global Communications, Inc.

    6922 Hollywood Boulevard, Suite
500

    Los Angeles, California
90028

    Attention: Kathy Griggs, Chief
Financial Officer

    


    Telephone No.: (323)
860-9200

    Facsimile No.: (323)
860-9201

    


    With a
copy
to:                             j2
Global Communications, Inc.

    6922 Hollywood Boulevard, Suite
500

    Los Angeles, California
90028

    Attention:  Legal
Department

    


    Telephone No.: (323)
860-9276

    Facsimile No.: (323)
372-3617

    


    


    If to
Bank:                                      Union
Bank, N.A.

    Commercial Banking Group--Greater Los
Angeles Division

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    445 South Figueroa Street, 10th
Floor

    Los Angeles, California
90071

    Attention: Peter C. Thompson,
Vice
President

    


    Telephone No.: (213)
236-6911

    Facsimile No.: (213)
236-7635

    


    9.2  Change of
Address.  The addresses to which notices or demands are to be
given may be changed from time to time by notice served as provided
above.

    


    


    


    [SIGNATURES
BEGIN ON THE FOLLOWING PAGE]

     

     

     

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

     

    THIS AGREEMENT is duly
executed on behalf of the parties hereto as of the date first above
written.

    


    “Borrower”

    


    j2
GLOBAL COMMUNICATIONS, INC.

    


    By: /s/ Kathy Griggs

    Kathy
Griggs

    Chief
Financial Officer

    


    


    “Bank”

    


    UNION
BANK, N.A.

    


    By: /s/ Stephen M. Flynn

    Stephen
M. Flynn

    Senior
Vice President

     

     

     

    
      
        
        

      

      
        -31-