Document:

Exhibit 10.1

 

 

 

$60,000,000 SENIOR SECURED CREDIT FACILITIES

 

 

CREDIT AGREEMENT

 

 

AMONG

 

 

UNITED ONLINE, INC.,

 

 

AS BORROWER,

 

 

THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO,

 

 

AND

 

 

SILICON VALLEY BANK,

 

 

AS ADMINISTRATIVE AGENT

 

 

DATED AS OF AUGUST 11, 2008

 

 

 

 

Table of Contents

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
   

  	
  Other Definitional
  Provisions

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
   

  	
  AMOUNT
  AND TERMS OF COMMITMENTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Commitments

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Procedure for Loan
  Borrowing

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Repayment of Loans

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  Loan Fees, etc.

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Optional Prepayments

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Mandatory Prepayments

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  Conversion and
  Continuation Options

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.8

  	
   

  	
  Limitations on Eurodollar
  Tranches

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.9

  	
   

  	
  Interest Rates and Payment
  Dates

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.10

  	
   

  	
  Computation of Interest
  and Fees

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.11

  	
   

  	
  Inability to Determine
  Interest Rate

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.12

  	
   

  	
  Pro Rata Treatment and
  Payments

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.13

  	
   

  	
  Requirements of Law

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.14

  	
   

  	
  Taxes

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.15

  	
   

  	
  Indemnity

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.16

  	
   

  	
  Change of Lending Office

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.17

  	
   

  	
  Notes

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
   

  	
  INTENTIONALLY
  BLANK

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Financial
  Condition

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  No Change

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  Existence; Compliance with
  Law

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.4

  	
   

  	
  Power, Authorization;
  Enforceable Obligations

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.5

  	
   

  	
  No Legal Bar

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.6

  	
   

  	
  Litigation

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.7

  	
   

  	
  No Default

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.8

  	
   

  	
  Ownership of Property;
  Liens

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.9

  	
   

  	
  Intellectual Property

  	
   

  	
  28

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.10

  	
   

  	
  Taxes

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.11

  	
   

  	
  Federal Regulations

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.12

  	
   

  	
  Labor Matters

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.13

  	
   

  	
  ERISA

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.14

  	
   

  	
  Investment Company Act;
  Other Regulations

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.15

  	
   

  	
  Subsidiaries

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.17

  	
   

  	
  Environmental Matters

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.18

  	
   

  	
  Accuracy of Information,
  etc.

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.19

  	
   

  	
  Security Documents

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.20

  	
   

  	
  Solvency

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.21

  	
   

  	
  Designated Senior
  Indebtedness

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.22

  	
   

  	
  Brokerage Commissions

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.23

  	
   

  	
  Anti-Terrorism Laws

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
   

  	
  CONDITIONS
  PRECEDENT

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Conditions to Extension of
  Credit

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
   

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Financial Statements

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  Certificates; Other
  Information

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
   

  	
  Payment of Obligations

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.4

  	
   

  	
  Maintenance of Existence;
  Compliance

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.5

  	
   

  	
  Maintenance of Property;
  Insurance

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.6

  	
   

  	
  Inspection of Property;
  Books and Records; Discussions

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.7

  	
   

  	
  Notices

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.8

  	
   

  	
  Environmental Laws

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.9

  	
   

  	
  Operating Accounts

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.11

  	
   

  	
  Additional Collateral,
  etc.

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
   

  	
  NEGATIVE
  COVENANTS

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Financial
  Condition Covenants

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  Indebtedness

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Liens

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  Fundamental Changes

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  Disposition of Property

  	
   

  	
  44

  

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
   

  	
  Restricted Payments

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.7

  	
   

  	
  Reserved

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.8

  	
   

  	
  Investments

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.9

  	
   

  	
  Optional Payments and
  Modifications of Certain Preferred Stock and Debt Instruments

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.10

  	
   

  	
  Transactions with
  Affiliates

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.11

  	
   

  	
  Sale Leaseback
  Transactions

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.12

  	
   

  	
  Swap Agreements

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.13

  	
   

  	
  Changes in Fiscal Periods

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.14

  	
   

  	
  Negative Pledge Clauses

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.15

  	
   

  	
  Clauses Restricting
  Subsidiary Distributions

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.16

  	
   

  	
  Lines of Business

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.17

  	
   

  	
  Amendments to
  Organizational Agreements and Material Contracts

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.18

  	
   

  	
  Anti-Terrorism Law

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.19

  	
   

  	
  Embargoed Person

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.20

  	
   

  	
  Anti-Money Laundering

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
   

  	
  EVENTS
  OF DEFAULT

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Events of Default

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
   

  	
  THE
  ADMINISTRATIVE AGENT

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Appointment and Authority

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.2

  	
   

  	
  Delegation of Duties

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.3

  	
   

  	
  Exculpatory Provisions

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.4

  	
   

  	
  Reliance by the
  Administrative Agent

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.5

  	
   

  	
  Notice of Default

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.6

  	
   

  	
  Non-Reliance on the
  Administrative Agent and Other Lenders

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.7

  	
   

  	
  Indemnification

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.8

  	
   

  	
  Agent in Its Individual
  Capacity

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.9

  	
   

  	
  Successor Administrative
  Agent

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Amendments and Waivers

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.2

  	
   

  	
  Notices

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.3

  	
   

  	
  No Waiver; Cumulative
  Remedies

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.4

  	
   

  	
  Survival of Representations
  and Warranties

  	
   

  	
  57

  

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.5

  	
   

  	
  Payment of Expenses and
  Taxes

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.6

  	
   

  	
  Successors and Assigns;
  Participations and Assignments

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.7

  	
   

  	
  Adjustments; Set-off

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.8

  	
   

  	
  Counterparts

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.9

  	
   

  	
  Severability

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.10

  	
   

  	
  Integration

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.11

  	
   

  	
  GOVERNING LAW

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.12

  	
   

  	
  Submission To
  Jurisdiction; Waivers

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.13

  	
   

  	
  Acknowledgements

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.14

  	
   

  	
  Releases of Guarantees and
  Liens

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.15

  	
   

  	
  Confidentiality

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.16

  	
   

  	
  Patriot Act

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.17

  	
   

  	
  Publicity and Related
  Matters

  	
   

  	
  64

  

 

iv

 

	
  SCHEDULES:

  
	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Commitments

  
	
  4.15

  	
   

  	
  Subsidiaries

  
	
  4.19(a)

  	
   

  	
  UCC Filing Jurisdictions

  
	
  7.2(d)

  	
   

  	
  Existing Indebtedness

  
	
  7.3(f)

  	
   

  	
  Existing Liens

  
	
  7.8(i)

  	
   

  	
  Existing Investments

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  
	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Form of Guarantee and
  Collateral Agreement

  
	
  B

  	
   

  	
  Form of Compliance
  Certificate

  
	
  C

  	
   

  	
  Form of Closing
  Certificate

  
	
  D

  	
   

  	
  Form of Assignment
  and Assumption

  
	
  E

  	
   

  	
  Form of Exemption
  Certificate

  
	
  F

  	
   

  	
  Form of Addendum

  
	
  G

  	
   

  	
  Form of Note

  

 

v

 

CREDIT AGREEMENT (this “Agreement”),
dated as of August 11, 2008, among UNITED ONLINE, INC., a Delaware
corporation (the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the “Lenders”)
and SILICON VALLEY BANK (“SVB”), as administrative agent (in such
capacity, the “Administrative Agent”).

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, Borrower, UNOLA
CORP., a Delaware corporation (“Merger Sub”) and FTD Group, Inc. (“Target”)
have entered into the Agreement and Plan of Merger dated as of April 30,
2008 (the “Merger Agreement”), pursuant to which Merger Sub shall merge
with and into Target, whereupon the separate existence of Merger Sub shall
cease, and Target shall be the surviving corporation;

 

WHEREAS, the Borrower
desires to obtain financing for working capital requirements, to fund the
acquisition of the Target (the “Acquisition”) and for other corporate
purposes of the Loan Parties (including Investments to the extent permitted
hereunder);

 

WHEREAS, the Lenders have
agreed to extend Loans to the Borrower in aggregate principal amount of
$60,000,000;

 

WHEREAS, the Borrower has
agreed to secure all of its Obligations by granting to the Administrative
Agent, for the benefit of the Secured Parties, a First Priority lien on
substantially all of its assets;

 

WHEREAS, each of the
Guarantors has agreed to guarantee the Obligations of the Borrower and to
secure their respective Obligations by granting to the Administrative Agent,
for the benefit of the Secured Parties, a First Priority lien on substantially
all of its assets; and

 

WHEREAS, the proceeds of the
extensions of credit under this Agreement may be used in part to enable the
Borrower to make valuable transfers to one or more of the Guarantors in
connection with the operation of their respective businesses.

 

NOW, THEREFORE, the parties
hereto hereby agree as follows:

 

SECTION 1.  DEFINITIONS

 

1.1  Defined Terms.  As used in this Agreement (including the
recitals hereof), the terms listed in this Section 1.1 shall have
the respective meanings set forth in this Section 1.1.

 

“ABR”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the Prime Rate in
effect on such day.  Any change in the
ABR due to a change in the Prime Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate.

 

“ABR Loans”:  Loans the rate of interest applicable to
which is based upon the ABR.

 

“Acquisition”:  as defined in the preamble hereto.

 

“Addendum”:  an instrument, substantially in the form of Exhibit F,
by which a Lender becomes a party to this Agreement.

 

1

 

“Administrative Agent”:  SVB, together with its affiliates, as the
administrative agent under this Agreement and the other Loan Documents,
together with any of its successors in such capacity.

 

“Affiliate”:  as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For purposes
of this definition, “control” of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors (or persons performing
similar functions) of such Person or (b) direct or cause the direction of
the management and policies of such Person, whether by contract or otherwise.

 

“Agreement”:  as defined in the preamble hereto.

 

“Anti-Terrorism Laws”:  as defined in Section 4.23(a).

 

“Applicable Margin”:  for each Type of Loan, the rate per annum set
forth under the relevant column heading below:

 

	
  Eurodollar Loans

  	
   

  	
  ABR Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.50%

  	
   

  	
  2.00%

  	
   

  

 

“Approved Fund”:  as defined in Section 10.6(b).

 

“Assignee”:  as defined in Section 10.6(b).

 

“Assignment and
Assumption”:  an Assignment and
Assumption, substantially in the form of Exhibit D.

 

“Benefitted Lender”:  as defined in Section 10.7(a).

 

“Board”:  the Board of Governors of the Federal Reserve
System of the United States (or any successor).

 

“Borrower”:  as defined in the preamble hereto.

 

“Borrowing Date”:  any Business Day specified by the Borrower as
a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.

 

“Business”:  as defined in Section 4.17(b).

 

“Business Day”:  a day other than a Saturday, Sunday or other
day on which commercial banks in the State of California are authorized or
required by law to close, provided, that with respect to notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.

 

“California UCC”:  the Uniform Commercial Code as in effect from
time to time in the State of California.

 

“Capital Lease
Obligations”:  as to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal 

 

2

 

property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.

 

“Capital Stock”:  any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of the
foregoing.

 

“Cash Equivalents”:  (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency or instrumentality thereof, in each case maturing within one year
from the date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities of six
months or less from the date of acquisition issued at the time of acquisition
by any Lender or by any commercial bank organized under the laws of the United
States or any state thereof having combined capital and surplus of not less
than $250,000,000; (c) commercial paper of an issuer rated at the time of
acquisition at least A-1 by S&P or P-1 by Moody’s, or carrying an
equivalent rating by a nationally recognized rating agency and maturing within
nine months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank for underlying securities of the types
described in clauses (a) and (b) of this definition at the time of acquisition,
having a term of not more than 30 days; (e) securities with maturities of
two years or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as
the case may be) are rated at the time of acquisition at least A by S&P or
A by Moody’s; (f) securities with maturities of six months or less from
the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of
this definition at the time of acquisition; (g) money market mutual or
similar funds that invest at least  95%
of their assets satisfying the requirements of clauses (a) through (f) of
this definition; or (h) money market funds that (i) comply with the
criteria set forth in SEC Rule 2a-7 under the Investment Company Act of
1940, as amended, at the time of acquisition (ii) are rated AAA by S&P
and Aaa by Moody’s and (iii) have portfolio assets of at least
$500,000,000 at the time of acquisition.

 

“Change of Control”:  (a) at any time, a “person” or “group”
within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) becomes the direct or indirect “beneficial
owner,” as defined in Rule 13d-3 under the Exchange Act, of shares of the
Capital Stock representing more than 35% of the voting power of the Capital
Stock entitled to vote generally in the election of board of directors of the
Borrower or (b) at any time, the board of directors of Borrower shall
cease to consist of a majority of Continuing Directors.

 

“Classmates”:
Classmates Media Corporation.

 

“Classmates IPO”: the
initial public offering of Classmates.

 

“Closing Date”:  the date on which the conditions precedent
set forth in Section 5.1 shall have been satisfied, which date is August 11,
2008.

 

“Code”:  the Internal Revenue Code of 1986, as amended
from time to time.

 

3

 

“Collateral”:  all property of the Loan Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.

 

“Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make a Loan to the Borrower in a principal amount not to
exceed the amount set forth under the heading “Commitment” opposite such Lender’s
name on Schedule 1.1.  The
original aggregate amount of the Commitments is $60,000,000.

 

“Commonly Controlled
Entity”:  any trade or business,
whether or not incorporated, that is under common control with Borrower within
the meaning of Section 4001 of ERISA or is part of a group that includes
Borrower and that is treated as a single employer under Section 414 of the
Code.

 

“Compliance Certificate”:  a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.

 

“Consolidated Capital
Expenditures”:  for any period, with
respect to any Person, the aggregate of (a) all expenditures (whether paid
in cash or other consideration or accrued as a liability and including that
portion of Capital Lease Obligations which is capitalized on the consolidated
balance sheet of the Group Members by such Person and its Subsidiaries) during
such period for the acquisition or leasing (pursuant to a capital lease) of
fixed or capital assets or additions to equipment (including replacements,
capitalized repairs, improvements and building expenses during such period)
that, in conformity with GAAP, are included in “additions to property, plant or
equipment” or comparable items reflected in the consolidated statement of cash
flows of such Person and its Subsidiaries and (b) all capitalized software
costs of such Person accrued in respect of such period in conformity with GAAP,  minus the sum of the following to
the extent included in calculating Consolidated Capital Expenditures during
such period: (i) any Permitted Acquisition consummated during such period,
(ii) capital expenditures in respect of the reinvestment of net asset sale
proceeds during such period, (iii) capital expenditures in respect of the
reinvestment of insurance/condemnation proceeds during such period and (iv) capital
expenditures funded with the proceeds of equity issuances.  For purposes of this definition, the
purchase price of equipment that is purchased simultaneously with the trade-in
of existing equipment or with insurance proceeds shall be deemed to be a
Consolidated Capital Expenditure only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment for the
equipment being traded in at such time or the amount of such proceeds, as the
case may be.

 

“Consolidated Cash
Interest Expense”:  for any period,
Consolidated Interest Expense for such period excluding (x) interest
expense not payable in cash and (y) amortization of discount and
amortization of debt issuance costs.

 

“Consolidated EBITDA”:  for any period, (a) the sum, without
duplication, of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) provisions for
taxes based on income (including provisions to the extent necessary to permit
Borrower and the Restricted Subsidiaries to discharge their consolidated,
combined or other group tax liabilities), (iv) total depreciation expense,
(v) total amortization expense, (vi) costs associated with the
transactions contemplated by the Merger Agreement (including for the avoidance
of doubt transaction costs paid by Borrower or a Restricted Subsidiary in
connection with the financings by Target with respect to the Merger Agreement)
and hereunder, (vii) all extraordinary, unusual or non-recurring losses,
charges or expenses (minus any extraordinary, unusual or non-recurring gains
(other than the proceeds of business interruption insurance)), (viii) all
other non-cash items, including, without limitation, non-cash stock compensation
expenses for officers, directors, employees and consultants (other than any
such non-cash item to the extent it represents an accrual of or reserve for
cash expenditures in any future period), (ix)(A) any non-cash impairment
charge or asset write-off or write-down, in each case relating to an intangible

 

4

 

asset, pursuant to Financial Accounting Standards Board Statements No. 142
and No. 144, (B) the amortization of intangible assets arising
pursuant to Financial Accounting Standards Board Statement No. 141, (C) the
amortization or write-off deferred financing fees and (D) the amortization
of other intangible assets and (x) restructuring expenses, severance costs
and integration costs incurred during such period (provided however, such
expenses and costs shall not exceed $4,000,000 in any trailing four quarter
period), but only, in the case of clauses (ii)-(x), to the extent deducted in
the calculation of Consolidated Net Income, minus (b) interest income
(other then interest income relating to Swap Agreements), minus (c) an
amount equal to the amount by which payments made pursuant to Section 7.6(c)(ii) exceed
$10,000,000 in the current fiscal year, all of the foregoing as determined on a
consolidated basis for Borrower and its Restricted Subsidiaries in conformity
with GAAP.

 

“Consolidated Fixed
Charge Coverage Ratio”:  for any
period, the ratio of (a) Consolidated EBITDA for such period, minus (i) the
aggregate amount of Consolidated Capital Expenditures for such period
(excluding Consolidated Capital Expenditures financed other than from
internally generated cash), minus (ii) all cash payments in respect of
income taxes of Borrower and its Restricted Subsidiaries made during such
period (net of any cash refund(s) in respect of income taxes actually
received during such period) therein during such period to (b) Consolidated
Fixed Charges for such period. The foregoing notwithstanding, for any fiscal
quarter after the Closing Date but prior to the anniversary thereof, the
amounts in clause (b) above for such period shall be annualized and
calculated as follows: from the Closing Date through such fiscal quarter, such
amount during such period shall be divided by the number of days in such period
and then multiplied by 365 days.

 

“Consolidated Fixed
Charges”:  for any period, the sum
(without duplication) of (a) Consolidated Cash Interest Expense for such
period and (b) scheduled amortization payments made during such period on
account of principal of Indebtedness of Borrower and the Restricted
Subsidiaries (including scheduled principal payments in respect of the Loans
and the principal component of all Capital Lease Obligation, but excluding any “bullet”
payments or payments at final maturity to the extent the Indebtedness giving
rise to such payments is being refinanced with Indebtedness permitted under
this Agreement).

 

“Consolidated Interest
Expense”:  for any period, total
interest expense in such period (including that attributable to Capital Lease
Obligations), of Borrower and the Restricted Subsidiaries for such period with
respect to all outstanding Indebtedness of Borrower and the Restricted
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing and
net costs under Swap Agreements in respect of interest rates to the extent such
net costs are allocable to such period in accordance with GAAP).

 

“Consolidated Leverage
Ratio”:  as at the last day of any
period, the ratio of (a) the aggregate (without duplication) stated
balance sheet amount of all Indebtedness of Borrower and the Restricted
Subsidiaries (other than Indebtedness in respect of Swap Agreements),
determined on a consolidated basis in accordance with GAAP, on such day to (b) Consolidated
EBITDA for such period.

 

“Consolidated Net Income”:  for any period, the consolidated net income
(or loss) of Borrower and the Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with Borrower
and the Restricted Subsidiaries, (b) the income (or deficit) of any Person
(other than a Restricted Subsidiary) in which Borrower or the Restricted
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by Borrower or such Restricted Subsidiary in the
form of dividends or similar distributions and (c) the undistributed
earnings of any Restricted Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary is
not at the time permitted by the terms 

 

5

 

of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Restricted Subsidiary.

 

“Continuing Directors”:  the directors of Borrower on the Closing Date
and each other director, if, in each case, such other director’s nomination for
election to the board of directors of Borrower is recommended by at least a
majority of the then Continuing Directors in his or her election by the
shareholders of Borrower.

 

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

 

“Control Agreement”:  an agreement, reasonably satisfactory in form
and substance to the Administrative Agent and executed by the financial
institution or securities intermediary at which a Deposit Account or a
Securities Account, as the case may be, is maintained, pursuant to which such
financial institution or securities intermediary confirms and acknowledges the
Administrative Agent’s security interest in such account, and agrees that the
financial institution or securities intermediary, as the case may be, will
comply with instructions originated by the Administrative Agent as to
disposition of funds in such account, without further consent by Borrower or
any Subsidiary Guarantor, as applicable.

 

“Declined Amount”:  as defined in Section 2.6(c).

 

“Default”:  any of the events specified in Section 8.1,
whether or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.

 

“Deposit Account”: a
demand, time, savings, passbook or similar account maintained with a Person
engaged in the business of banking, including a savings bank, savings and loan
association, credit union or trust company.

 

“Designated Senior
Indebtedness”:  as defined in Section 4.21.

 

“Disposition”:  with respect to any property (including,
without limitation, Capital Stock of Borrower or any Restricted Subsidiary, any
sale, lease, Sale Leaseback Transaction, assignment, conveyance, transfer or
other disposition thereof and any issuance of Capital Stock of any Restricted
Subsidiary).  The terms “Dispose”
and “Disposed of” shall have correlative meanings.

 

“Dollars” and “$”:  dollars in lawful currency of the United
States.

 

“Domestic Subsidiary”:  any Restricted Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.

 

“Eligible Assignee”:  any commercial bank, insurance company,
investment or mutual fund or other entity that is an “accredited investor” (as
defined in Regulation D under the Securities Act) and which extends credit or
buys loans as one of its businesses; provided that neither the Borrower
nor any Affiliate of the Borrower shall be an Eligible Assignee.

 

“Embargoed Person”:
as defined in Section 7.19.

 

“Environmental Laws”:  any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of
Law (including common law) regulating, relating to or imposing liability or 

 

6

 

standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

 

“ERISA”:  the Employee Retirement Income Security Act
of 1974, as amended from time to time.

 

“Eurocurrency Reserve
Requirements”:  for any day as
applied to a Eurodollar Loan, the aggregate (without duplication) of the
maximum rates (expressed as a decimal fraction) of reserve requirements in
effect on such day (including basic, supplemental, marginal and emergency
reserves) under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.

 

“Eurodollar Base Rate”:  with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined by
reference to the British Bankers’ Association Interest Settlement Rates for
deposits (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period in Dollars, determined as of approximately
11:00 A.M. (London, England time) two (2) Business Days prior to the
beginning of such Interest Period (as set forth by Bloomberg Information Service
or any successor thereto or any other service selected by the Administrative
Agent which has been nominated by the British Bankers’ Association as an
authorized information vendor for the purpose of displaying such rates).  In the event that the rate referenced in the
preceding sentence is not available, the “Eurodollar Base Rate” shall be
determined by reference to the rate per annum equal to the offered quotation
rate to first class banks in the London interbank market by SVB for deposits
(for delivery on the first day of the relevant Interest Period) in Dollars of
amounts in same day funds comparable to the principal amount of the Loans for
which the Eurodollar Base Rate is then being determined with maturities
comparable to such period as of approximately 11:00 A.M. (London, England
time) two (2) Business Days prior to the beginning of such Interest
Period.

 

“Eurodollar Loans”:  Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such
day in accordance with the following formula:

 

	
   

  	
  Eurodollar
  Base Rate

  	
   

  
	
   

  	
  1.00
  - Eurocurrency Reserve Requirements

  	
   

  

 

; provided however,
in no event shall the Eurodollar Rate be less than 3.00%.

 

“Eurodollar Tranche”:  the collective reference to Eurodollar Loans
under the Facility the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date.

 

“Event of Default”:  any of the events specified in Section 8.1;
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.

 

“Excess Cash Flow”:  for any fiscal quarter of Borrower, the
excess, if any, of Consolidated EBITDA for such fiscal quarter over the
sum, without duplication:

 

7

 

(i) the aggregate
amount actually paid by Borrower and the Restricted Subsidiaries during such
fiscal quarter on account of Consolidated Capital Expenditures to the extent
paid in cash and permitted hereunder (excluding the principal amount of any
Loan incurred in connection with such expenditures), plus

 

(ii) Consolidated Cash
Interest Expense for such fiscal quarter, plus

 

(iii) provisions for
taxes based on income payable in cash by Borrower and the Restricted
Subsidiaries in respect of such fiscal quarter, plus

 

(iv) the aggregate
amount of all regularly scheduled principal payments of Funded Debt (including
the Loans) of Borrower and the Restricted Subsidiaries made during such fiscal
quarter (or other period) (other than in respect of any revolving credit
facility to the extent there is not an equivalent permanent reduction in
commitments thereunder), plus

 

(v) to the extent
permitted under Section 7.6, cash dividends (or an equivalent
amount in connection with restricted stock units) in an amount not to exceed
$0.10 per share per quarter which are declared by Borrower during such fiscal
quarter, plus

 

(vi) to the extent
permitted under Section 7.6, taxes that are due in connection with
the vesting of restricted stock units and stock grants to officers, directors
and employees of Borrower and its Subsidiaries that are (A) in accordance
with a plan approved by its respective Board of Directors, and (B) in the
ordinary course of business, which are paid by Borrower during such fiscal
quarter, except to the extent such payments are deducted in the calculation of
Consolidated EBITDA, plus

 

(vii) Investments
permitted by Section 7.8(k) (to the extent paid in cash and up
to an aggregate amount not to exceed $10,000,000) and made during such fiscal
quarter.

 

“Excess Cash Flow
Application Date”:  as defined in Section 2.6(b).

 

“Exchange Rate”: on
any date when an amount expressed in a currency other than Dollars is to be
determined, the nominal rate of exchange of Administrative Agent (or another
financial institution selected by the Administrative Agent and reasonably
acceptable to Borrower) in the New York foreign exchange market for the sale of
such currency in exchange for Dollars at 12:00 Noon, Pacific time, one Business
Day prior to such date, expressed as a number of units of such currency per one
Dollar.

 

“Excluded Perfection
Assets”:  (i) any equipment that
is covered by a certificate of title, (ii) any foreign intellectual
property, (iii) any deposit account or securities account of a Loan Party
used solely for payroll, payroll taxes and other employee wage and benefit
payments, (iv) deposit accounts or securities accounts of the Loan Parties
that in the aggregate contain less that than $1,000,000, (v) assets
subject to Liens permitted by Sections 7.3(c), (d), (g), (q) and
(r) and (vi) any other assets as to which the Administrative
Agent shall determine in their reasonable discretion that the cost of obtaining
or perfecting such lien on such assets is excessive in relation to the benefits
to Lenders of the security afforded thereby.

 

“Excluded Subsidiaries”:  UNOL Intermediate, Inc., Target and
their respective Subsidiaries; provided that Classmates and its
Subsidiaries will be an Excluded Subsidiary upon the consummation of the
Classmates IPO.

 

“Executive Order”:  as defined in Section 4.23(a).

 

8

 

“Executive Orders”:  as defined in Section 7.19.

 

“Facility”:  the Commitments and the Loans made
thereunder.

 

“Federal Funds Effective
Rate”:  for any day, the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for the day of such transactions received by SVB from
three federal funds brokers of recognized standing selected by it.

 

“Fee Letter”:  the letter agreement dated July 2, 2008
among the Borrower and the Administrative Agent.

 

“First Priority”:  with respect to any Lien created in any
Collateral pursuant to any Security Document, that (i) such Lien is
perfected and has priority over any other Lien on such Collateral (other than
Liens permitted pursuant to Section 7.3) and (ii) such Lien is
the only Lien (other than Liens permitted pursuant to Section 7.3)
to which such Collateral is subject.

 

 “Foreign Subsidiary”:  any Restricted Subsidiary of Borrower that is
not a Domestic Subsidiary.

 

“Funded Debt”:  as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including
all current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date
of its creation and, in the case of the Borrower, Indebtedness in respect of
the Loans.

 

“Funding Office”:  the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified
from time to time by the Administrative Agent as its funding office by written notice
to the Borrower and the Lenders.

 

“GAAP”:  generally accepted accounting principles in
the United States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements referred to in Section 4.1(b).  In the event that any “Accounting Change” (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to reflect equitably
such Accounting Changes with the desired result that the criteria for
evaluating the Borrower’s financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made.  Until such time as such an amendment shall
have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred.  “Accounting
Changes” refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.

 

9

 

“Governmental Approval”:  any consent, authorization, approval, order,
license, franchise, permit, certificate, accreditation, registration, filing or
notice, of, issued by, from or to, or other act by or in respect of, any
Governmental Authority.

 

“Governmental Authority”:  any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

“Group Members”:  the collective reference to Borrower and its
Subsidiaries (other than the Excluded Subsidiaries).

 

“Guarantee and Collateral
Agreement”:  the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing person”),
any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person that guarantees or in effect guarantees, any Indebtedness (the “primary
obligations”) of any other third Person (the “primary obligor”) in
any manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the terms
of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.

 

“Guarantor”:  any Subsidiary Guarantor.

 

“Guarantors”:  the collective reference to the Subsidiary
Guarantors.

 

“Indebtedness”:  of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person’s business) which is due more than six months from the date of
incurrence of the obligation in respect thereof, (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person (except where the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such 

 

10

 

property), (e) all Capital Lease Obligations and all Synthetic
Lease Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party or applicant under or in respect
of acceptances, letters of credit, surety bonds or similar arrangements, (g) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (f) above, (h) all
obligations of the kind referred to in clauses (a) through (g) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation, and (i) all
obligations of such Person in respect of Swap Agreements.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness expressly provide
that such Person is not liable therefor. 
The amount of any Indebtedness that is only recourse to specific assets
of Borrower and/or the Restricted Subsidiaries (and not to Borrower or any
Restricted Subsidiary generally) shall be deemed to be equal to the lesser of (x) the
principal amount of such Indebtedness and (y) the fair market value of the
assets of Borrower and/or the Restricted Subsidiaries to which such
Indebtedness has recourse.  The amount of
any net obligation under any Swap Agreement on any date shall be deemed to be
the Swap Termination Value thereof as of such date.

 

“Indemnified Liabilities”:  as defined in Section 10.5.

 

“Indemnitee”:  as defined in Section 10.5.

 

“Insolvency”:  with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245
of ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“Intellectual Property”:  as defined in the Guarantee and Collateral
Agreement.

 

“Intellectual Property
Security Agreement”:  any patent,
copyright or trademark security agreement to be executed and delivered by the
Borrower or a Subsidiary Guarantor in favor of the Administrative Agent.

 

“Interest Payment Date”:  (a) as to any ABR Loan, the first
Business Day of each month to occur while such Loan is outstanding and the
final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last Business Day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period,  and (d) as to any
Loan, the date of any repayment or prepayment made in respect thereof.

 

“Interest Period”:  as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 10:00 A.M., Pacific time, on the date
that is three (3) Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:

 

11

 

(i)            if any Interest Period would
otherwise end on a day that is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Business Day;

 

(ii)           the Borrower may not select an
Interest Period under the Facility that would extend beyond the date final
payment is due on the Loans (in the case of Loans);

 

(iii)          any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and

 

(iv)          the Borrower shall select Interest
Periods so as not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Loan.

 

“Investments”:  as defined in Section 7.8.

 

“Lenders”:  as defined in the preamble hereto.

 

“Lien”:  any mortgage, deed of trust, pledge,
hypothecation, collateral assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any other security
agreement (including any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect as any of
the foregoing).

 

“Loan”:  any loan made or maintained by any Lender
pursuant to this Agreement.

 

“Loan Documents”:  this Agreement, the Security Documents, the
Notes, the Fee Letter and any amendment, waiver, supplement or other
modification to any of the foregoing.

 

“Loan Parties”:  each Group Member that is a party to a Loan
Document.

 

“Mandatory Prepayment
Date”:  as defined in Section 2.6(c).

 

“Material Adverse Effect”:
(A) a material adverse change in, or a material adverse effect on, the
operations, business, assets, liabilities (actual or contingent), or financial
condition of Borrower and the Restricted Subsidiaries, taken as a whole; (B) a
material impairment of the rights and remedies of the Administrative Agent or
any Lender under the Loan Documents taken as a whole, or of the ability of the
Borrower and the Guarantors to satisfy the Obligations under any Loan Document;
or (C) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Borrower and the Guarantors of the Loan
Documents, taken as a whole, to which it is a party.

 

“Materials of
Environmental Concern”:   any
substance, material or waste that is defined, regulated, governed or otherwise
characterized under any Environmental Law as hazardous or toxic or as a
pollutant or contaminant (or by words of similar meaning and regulatory
effect), any petroleum or petroleum products, asbestos, polychlorinated
biphenyls, urea-formaldehyde insulation, molds or fungus, and radioactivity and
radiofrequency radiation at levels known to be hazardous to human health and
safety.

 

12

 

“Maturity Date”:  August 10, 2012.

 

“Merger Agreement”:  as defined in the recitals.

 

“Merger Sub”:  as defined in the preamble hereto.

 

“Moody’s”:  Moody’s Investors Service, Inc.

 

“Mortgaged Properties”:  the real properties as to which, pursuant to Section 6.11(b) or
otherwise, the Administrative Agent, for the benefit of the Secured Parties,
shall be granted a Lien pursuant to the Mortgages.

 

“Mortgages”:  each of the mortgages, deeds of trust, deeds
to secure debt or such equivalent documents hereafter entered into and executed
and delivered by one or more of the Loan Parties to the Administrative Agent,
in each case, as such documents may be amended, amended and restated,
supplemented or otherwise modified, renewed or replaced from time to time and
in form and substance reasonably acceptable to the Administrative Agent.

 

“Multiemployer Plan”:  a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

 

“Non-Excluded Taxes”:  as defined in Section 2.14(a).

 

“Non-U.S. Lender”:  as defined in Section 2.14(d).

 

“Note”:  a promissory note in the form of Exhibit G,
as it may be amended, supplemented or otherwise modified from time to time.

 

“Obligations”:  the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower or
any Guarantor, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower or any other Loan Party to the Administrative Agent
or to any Lender, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other Loan Document or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower or any Guarantor pursuant hereto) or otherwise.

 

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

 

“Participant”:  as defined in Section 10.6(c).

 

“Patriot Act”:  the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001, Title III of Pub. L. 107-56, signed into law October 26,
2001.

 

13

 

“PBGC”:  the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

“Pension Act”: the
Pension Protection Act of 2006.

 

“Pension Funding Rules”:
the rules of the Code and ERISA regarding minimum required contributions
(including any installment payment thereof) to Single Employer Plans and
Multiemployer Plans and set forth in, with respect to plan years ending prior
to the effective date as to such Plan of the Pension Act, Section 412 of
the Code and Section 302 of ERISA, each as in effect prior to the Pension
Act  and, thereafter, Section 412
and 430 of the Code and Sections 302 and 303 of ERISA.

 

“Permitted Acquisition”:  as defined in Section 7.8(k).

 

“Person”:  an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.

 

“Plan”:  any employee benefit plan that is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

 

“Pledged Collateral”:  collectively, the “Pledged Stock” and “Pledged
Notes” as defined in the Guarantee and Collateral Agreement and any foreign
pledge agreement.

 

“Preferred Stock”:  the preferred Capital Stock of the Borrower.

 

“Prime Rate”:  the rate of interest per annum announced from
time to time by SVB as its prime rate in effect at its principal office in the
State of California (the Prime Rate not being intended to be the lowest rate of
interest charged by SVB in connection with extensions of credit to debtors).

 

“Projections”:  as defined in Section 6.2(b).

 

“Properties”:  as defined in Section 4.17(a).

 

“Purchaser Material
Adverse Effect”:  has the meaning set
forth in the Merger Agreement.

 

“Register”:  as defined in Section 10.6(b).

 

“Regulation U”:  Regulation U of the Board as in effect from
time to time.

 

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

 

“Reorganization”:  with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

 

“Reportable Event”:  any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived.

 

“Required Lenders”:  at any time, the holders of more than 50% of
the aggregate unpaid principal amount of the Loans then outstanding.

 

14

 

“Requirement of Law”:  as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, president, chief
financial officer, chief accounting officer, treasurer, controller, senior vice
president finance or other similar officer of the Borrower or a Subsidiary
Guarantor, as applicable, but in any event, with respect to financial matters,
the chief financial officer, chief accounting officer, treasurer, controller,
senior vice president finance or other similar officer of the Borrower or a
Subsidiary Guarantor, as applicable.

 

“Restricted Subsidiary”:
means each of Borrower’s Subsidiaries, other than an Excluded Subsidiary.

 

“Restricted Payments”:  as defined in Section 7.6.

 

“SEC”:  the Securities and Exchange Commission, any
successor thereto and any analogous Governmental Authority.

 

“S&P”:  Standard & Poor’s Ratings Services.

 

“Sale Leaseback
Transaction”:  any arrangement with
any Person or Persons, whereby in contemporaneous or substantially
contemporaneous transactions a Loan Party sells substantially all of its right,
title and interest in any property and, in connection therewith, acquires,
leases or licenses back the right to use all or a material portion of such
property.

 

“Secured Parties”:  the collective reference to the
Administrative Agent and the Lenders.

 

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

 

“Securities Account”:
an account to which a financial asset is or may be credited in accordance with
an agreement under which the Person maintaining the account undertakes to treat
the Person for whom the account is maintained as entitled to exercise the
rights that comprise the financial asset.

 

“Security Documents”:  the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.

 

“Single Employer Plan”:  any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.

 

“Solvent”:  when used with respect to any Person, means
that, as of any date of determination, (a) the amount of the “fair value”
of the assets of such Person will, as of such date, exceed the amount of all “liabilities
of such Person, contingent or otherwise”, as of such date, as such quoted terms
are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the “present fair
saleable value” of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on
its debts as such debts become absolute and matured, as such quoted terms are
determined in accordance with 

 

15

 

applicable federal and state laws governing determinations of the insolvency
of debtors, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature.  For purposes of this definition, (i) “debt”
means liability on a “claim”, and (ii) “claim” means any (x) right to
payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

 

“Specified
Representations”:  the
representations and warranties contained in Section 4.4 (other than
the third sentence thereof), Section 4.11, the first and second
sentence of Section 4.14, Section 4.18 and Section 4.19.

 

“Subordinated Indebtedness”:  any Indebtedness that has been subordinated
to all of the Obligations pursuant to a written agreement or written terms
acceptable to the Administrative Agent.

 

“Subsidiary”:  as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of
a contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.  Unless otherwise qualified, all references to
a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower or Guarantor.

 

“Subsidiary Guarantor”:  each Domestic Subsidiary of the Borrower; provided
that an Excluded Subsidiary shall not be deemed to be a Subsidiary Guarantor or
otherwise be required to guarantee the Obligations of Borrower.

 

“Surety Indebtedness”:  as of any date of determination, indebtedness
(contingent or otherwise) owing to sureties arising from bid, performance or
surety bonds or letters of credit supporting such bid, performance or surety
obligations issued on behalf of Borrower and the Restricted Subsidiaries as
support for, among other things, their contracts with customers, whether such
indebtedness is owing directly or indirectly by Borrower and the Restricted
Subsidiaries.

 

“SVB”:  as defined in the preamble hereto.

 

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

 

16

 

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

 

“Synthetic Lease
Obligation”:  the monetary obligation
of a Person under (a) a so-called synthetic, off-balance sheet or tax
retention lease or (b) an agreement for the use of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).

 

“Target”:  as defined in the preamble hereto.

 

“Term Percentage”:  as to any Lender at any time, the percentage
which such Lender’s Commitment then constitutes of the aggregate Commitments
(or, at any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender’s Loans then outstanding constitutes of the
aggregate principal amount of the Loans then outstanding).

 

“Transferee”:  any Assignee or Participant.

 

“Type”:  as to any Loan, its nature as an ABR Loan or
a Eurodollar Loan.

 

“Uniform Commercial Code”
or “UCC”:  the Uniform Commercial
Code (or any similar or equivalent legislation) as in effect from time to time
in any applicable jurisdiction.

 

“United States”:  the United States of America.

 

1.2  Other Definitional Provisions.

 

(a)           Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used
in the other Loan Documents or any certificate or other document made or
delivered pursuant hereto or thereto.

 

(b)           As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP, (ii) the
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”, (iii) the word “incur” shall be construed
to mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words “incurred” and “incurrence” shall have correlative
meanings), (iv) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, Capital Stock, securities,
revenues, accounts, leasehold interests and contract rights, (v) references
to agreements (including this Agreement) or other Contractual Obligations
shall, unless otherwise specified, be deemed to refer to such agreements or
Contractual Obligations as amended, supplemented, restated, amended and
restated or otherwise modified from time to time and (vi) references to
persons shall include such person’s successors and assigns.

 

17

 

(c)           The words “hereof”, “herein” and “hereunder” and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.

 

(d)           The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

 

(e)           For purposes of this Agreement and the other Loan
Documents, where the permissibility of a transaction or determination of
required actions or circumstances depends upon compliance with, or is
determined by reference to, amounts stated in Dollars, any requisite currency translation
shall be based on the applicable Exchange Rate with respect to the date of such
transaction or determination or the date Borrower or any of its Subsidiaries
enters into a definitive agreement with respect to a transaction (as determined
by Borrower) and shall not be affected by subsequent fluctuations in the
Exchange Rate.  For purposes of
determining compliance with any Dollar denominated restriction on the
incurrence of Indebtedness, the Dollar-equivalent principal amount of
Indebtedness denominated in a foreign currency shall be calculated based on the
applicable Exchange Rate with respect to the date such Indebtedness was
incurred; provided that if such Indebtedness is incurred to refinance
other Indebtedness denominated in a foreign currency, and such refinancing
would cause the applicable Dollar-denominated restriction to be exceeded if
calculated based on the applicable Exchange Rate with respect to the date of
such refinancing, such Dollar-denominated restriction shall be deemed not to
have been exceeded so long as the Dollar- equivalent principal amount of such
refinancing Indebtedness does not exceed the Dollar-equivalent principal amount
of such Indebtedness being refinanced (plus the amount of interest, fees
and expenses associated therewith). 
Notwithstanding any other provision of this Agreement, (i) the
maximum amount of Indebtedness that Borrower or any Subsidiary may incur shall
not be deemed to be exceeded solely as a result of fluctuations in the Exchange
Rate, (ii) this provision shall not apply to the calculation of
Consolidated EBITDA, the Consolidated Leverage Ratio or the Consolidated Fixed
Charge Coverage Ratio, and (iii) in the event that the Dollar-equivalent
principal amount of Indebtedness that Borrower and its Subsidiaries has
incurred exceeds the maximum amount of permitted Indebtedness under any clause
of subsection 7.1 at any time as a result of fluctuations in the applicable
Exchange Rate, no additional Indebtedness (other than the refinancing of
existing Indebtedness as provided above) may be incurred under such clause
until such maximum amount is no longer exceeded.

 

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS

 

2.1  Commitments.  Subject to the terms and conditions hereof,
each Lender severally agrees to make a Loan to the Borrower on the Closing Date
in an amount not to exceed the amount of the Commitment of such Lender.  The Loans may from time to time be Eurodollar
Loans or ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.7.

 

2.2  Procedure for Loan Borrowing.  The Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 10:00 A.M., Pacific time, one Business Day prior to the
anticipated Closing Date (with originals to follow within 30 days)) requesting
that the Lenders make the Loans on the Closing Date and specifying the amount
to be borrowed.  Upon receipt of such
notice the Administrative Agent shall promptly notify each Lender thereof.  Not later than 12:00 P.M., Pacific time,
on the Closing Date each Lender shall make available to the Administrative
Agent at the Funding Office an amount in immediately available funds equal to
the Loan or Loans to be made by such Lender. 
The Administrative Agent shall credit the account of the Borrower on the
books of such office of the Administrative Agent with the aggregate of the
amounts made 

 

18

 

available to the Administrative Agent by the Lenders in immediately
available funds or make such amounts available to Borrower at such account as
Borrower has provided in the notice referred to above.

 

2.3  Repayment of Loans.  Beginning on December 31, 2008, the
Loans of each Lender shall be repaid on consecutive quarterly installments,
each of which shall be in an amount equal to such Lender’s Term Percentage
multiplied by the amount set forth below opposite such installment:

 

	
  Installment

  	
   

  	
  Principal Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The last day
  of each calendar quarter commencing December 31, 2008 through the
  Maturity Date

  	
   

  	
  $

  	
  3,750,000

  	
   

  

 

To the extent not previously
paid, all Loans shall be due and payable on the Maturity Date, together with
accrued and unpaid interest on the principal amount to be paid to but excluding
the date of payment.

 

2.4  Loan Fees, etc.   The Borrower agrees to pay to Silicon Valley
Bank the fees in the amounts and on the dates as set forth in the Fee Letter
with Silicon Valley Bank and to perform any other obligations contained
therein.

 

2.5  Optional Prepayments.  The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than 10:00 A.M.,
Pacific time, three Business Days prior thereto, in the case of Eurodollar
Loans, and no later than 10:00 A.M., Pacific time, one Business Day prior
thereto, in the case of ABR Loans, which notice shall specify the date and
amount of prepayment; provided, that if a Eurodollar Loan is prepaid on
any day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.15.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid; provided
that if such notice indicates that all or a portion of such prepayment will be
funded from an incurrence of Indebtedness, issuance of Capital Stock or
Disposition, such notice may be withdrawn by notice from the Borrower to the
Administrative Agent  (in which case no
amounts specified in such notice will be due and payable) in the event such
incurrence of Indebtedness, issuance of Capital Stock or Disposition does not
occur on or prior to the date specified for such prepayment.  Partial prepayments of Loans shall be in an
aggregate principal amount of at least $1,000,000.

 

2.6  Mandatory Prepayments.

 

(a)           Upon the consummation of the
Classmates IPO, an amount equal to:  (i) the
greater of (x) 50% of the net cash proceeds received by the Borrower in
connection with the Classmates IPO and (y) $30,000,000 shall be applied on
the date of the Classmates IPO toward the prepayment of the Loans and other
amounts as set forth in Section 2.6(c).

 

(b)           If, for any fiscal quarter of Borrower beginning with the
fiscal quarter ending March 31, 2009, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply 50% of
such Excess Cash Flow toward the prepayment of the Loans and other amounts as
set forth in Section 2.6(c). 
Each such prepayment shall be made on a date (an “Excess Cash Flow
Application Date”) no later than 45 days after each fiscal quarter end for
the first three fiscal quarters and 90 days in the case of the fourth quarter
of any fiscal year end.  Notwithstanding
the 

 

19

 

foregoing and without duplication under the definition of Excess Cash
Flow, the amount of Loans required to be repaid pursuant to this clause (b) for
any fiscal quarter shall be reduced on a dollar for dollar basis by the amount
of optional prepayments of Loans made pursuant to Section 2.5
during such fiscal quarter.

 

(c)           Amounts to be applied in connection with prepayments made
pursuant to Section 2.6 shall be applied, to the prepayment of the
Loans in accordance with Section 2.12(b) (unless otherwise
agreed to in writing by and among Lenders); (provided that any Lender
may decline any such prepayment (collectively, the “Declined Amount”),
in which case the Declined Amount shall be distributed to the prepayment, on a pro rata basis, of the Loans held by Lenders
that have elected to accept such Declined Amounts.  Each prepayment of the Loans under Section 2.6
shall be accompanied by accrued interest to the date of such prepayment on the
amount prepaid; provided, that if a Eurodollar Loan is prepaid on any
day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.15.  The Borrower shall deliver to the
Administrative Agent and each Lender notice of each prepayment of Loans in
whole or in part pursuant to Section 2.6(d) not less than
three (3) Business Day prior to the date such prepayment shall be made
(each, a “Mandatory Prepayment Date”). 
Such notice shall set forth (i) the Mandatory Prepayment Date, (ii) the
aggregate amount of such prepayment and (iii) the option of each Lender to
(x) decline its share of such prepayment or (y) accept Declined
Amounts.  Any Lender that wishes to
exercise its option to decline such prepayment or to accept Declined Amounts
shall notify the Administrative Agent by facsimile not later than the Mandatory
Prepayment Date.

 

(d)           The Borrower shall deliver to the Administrative Agent, at
the time of each prepayment required under this Section 2.6, a
certificate signed by a Responsible Officer of the Borrower setting forth in
reasonable detail the calculation of the amount of such prepayment or reduction
(and the Administrative Agent shall promptly provide the same to each
Lender).  Each notice of prepayment shall
specify the prepayment or reduction date, the Type of each Loan being prepaid
and the principal amount of each Loan (or portion thereof) to be prepaid.

 

2.7  Conversion and Continuation Options.

 

(a)           The Borrower may elect from time to
time to convert Eurodollar Loans to ABR Loans by giving the Administrative
Agent prior irrevocable notice of such election no later than 10:00 A.M.,
Pacific time, on the Business Day preceding the proposed conversion date, provided
that any such conversion of Eurodollar Loans may only be made on the last day
of an Interest Period with respect thereto. 
The Borrower may elect from time to time to convert ABR Loans to
Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of
such election no later than 10:00 A.M., Pacific time, on the third
Business Day preceding the proposed conversion date (which notice shall specify
the length of the initial Interest Period therefor), provided that no
ABR Loan may be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing.  Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.

 

(b)           Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term “Interest Period” set forth in Section 1.1,
of the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such when any Event of Default has
occurred and is continuing, and provided, further, that if the
Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to ABR Loans on the last
day of such then expiring Interest Period. 
Upon receipt of any such notice the Administrative Agent shall promptly
notify each relevant Lender thereof.

 

20

 

2.8  Limitations on Eurodollar Tranches.  Notwithstanding anything to the contrary in
this Agreement, all borrowings, conversions and continuations of Eurodollar
Loans and all selections of Interest Periods shall be in such amounts and be
made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $1,000,000 or a multiple thereof and (b) no
more than 10 Eurodollar Tranches shall be outstanding at any one time.

 

2.9  Interest Rates and Payment Dates.

 

(a)           Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.

 

(b)           Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.

 

(c)           (i)  If all or a portion of the principal amount of
any Loan shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all outstanding Loans shall bear interest at a rate
per annum equal to the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2%, and (ii) if
all or a portion of any interest payable on any Loan or any commitment fee or
other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans
under the Facility plus 2%, in each case, with respect to clauses (i) and
(ii) above, from the date of such non-payment until such amount is paid in
full (as well after as before judgment).

 

(d)           Interest shall be payable in arrears on each Interest
Payment Date; provided that interest accruing pursuant to Section 2.9(c) shall
be payable from time to time on demand.

 

2.10  Computation of Interest and Fees.

 

(a)           Interest and fees payable pursuant
hereto shall be calculated on the basis of a 360-day year for the actual days
elapsed, except that, with respect to ABR Loans the rate of interest on which
is calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed.  The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of each determination of a Eurodollar Rate.  Any change in the interest rate on a Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective.  The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.

 

(b)           Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error.  The Administrative Agent
shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 2.10(a).

 

2.11  Inability to Determine Interest Rate.  If prior to the first day of any Interest
Period:

 

(a)           The Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market, 

 

21

 

adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or

 

(b)           The Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period, the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter.  If such notice is given (x) any
Eurodollar Loans under the Facility requested to be made on the first day of
such Interest Period shall be made as ABR Loans, (y) any Loans under the
Facility that were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be continued as ABR Loans and (z) any
outstanding Eurodollar Loans under the Facility shall be converted, on the last
day of the then-current Interest Period, to ABR Loans.  Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans under the Facility shall be
made or continued as such, nor shall the Borrower have the right to convert
Loans under the Facility to Eurodollar Loans.

 

2.12  Pro Rata Treatment and Payments.

 

(a)           Each borrowing by the Borrower from
the Lenders hereunder, shall be made pro  rata according to the
respective Term Percentages of the relevant Lenders.

 

(b)           Except as otherwise provided herein, each payment
(including each prepayment) by the Borrower on account of principal of and
interest on the Loans shall be made pro  rata according to the
respective outstanding principal amounts of the Loans then held by the
Lenders.  The amount of each principal
prepayment of the Loans shall be applied to reduce the remaining installments
of the Loans in the inverse order of maturity. 
Except as otherwise may be agreed by the Borrower and the Required
Lenders, any prepayment of Loans shall be applied first to the then outstanding
ABR Loans to the full extent thereof before application to Eurodollar Loans, in
each case in a manner which minimizes the amount of any payments required to be
made by Borrower pursuant to Section 2.15. Amounts prepaid on
account of the Loans may not be reborrowed.

 

(c)           All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 10:00 A.M., Pacific time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the applicable Funding Office, in
Dollars and in immediately available funds. 
The Administrative Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received.  If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day.  If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.  In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.

 

(d)           Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment due to be made by
the Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be
required to, in reliance upon such assumption, make available to the Lenders
their respective pro  rata shares of a corresponding amount.  If such payment is not made to the
Administrative Agent by the Borrower within 

 

22

 

three Business Days after such due date, the Administrative Agent shall
be entitled to recover, on demand, from each Lender to which any amount which
was made available pursuant to the preceding sentence, such amount with
interest thereon at the rate per annum equal to the daily average Federal Funds
Effective Rate.  Nothing herein shall be
deemed to limit the rights of the Administrative Agent or any Lender against
the Borrower.

 

2.13  Requirements of Law.

 

(a)           If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:

 

(i)            shall subject any Lender to any tax
of any kind whatsoever with respect to this Agreement, any Eurodollar Loan made
by it, or change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 2.14 and
changes in the rate of tax on the overall net income or franchise taxes of such
Lender);

 

(ii)           shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any office
of such Lender that is not otherwise included in the determination of the
Eurodollar Rate; or

 

(iii)          shall impose on such Lender any other condition;

 

and the result of any of the
foregoing is to increase the cost to such Lender, by an amount that such Lender
deems to be material, of making, converting into, continuing or maintaining
Eurodollar Loans, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable.  If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled.

 

(b)           If any Lender shall have determined
that the adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by such
Lender or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender’s or such corporation’s capital
as a consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation for such reduction.

 

(c)           A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the absence of
manifest error.  Notwithstanding anything
to the contrary in this Section, the Borrower 

 

23

 

shall not be required to compensate a Lender pursuant to this Section for
any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender’s intention to claim compensation
therefor; provided that, if the circumstances giving rise to such claim
have a retroactive effect, then such six-month period shall be extended to
include the period of such retroactive effect. 
The obligations of the Borrower pursuant to this Section shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

 

(d)           If any Lender requests compensation
under this Section 2.13, or if Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.14, or if Borrower exercises
its replacement rights under Section 10.1(c), then Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by Section 10.6), all of its interest, rights and
obligations under this Agreement and the other Loan Documents to an Eligible
Assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that:

 

(i)            Borrower shall have paid to the
Administrative Agent the processing and recordation fee specified in Section 10.6(b)(ii)(B);

 

(ii)           such assigning Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder as of the
date of such assignment and under the other Loan Documents (including any
amounts under Section 2.15);

 

(iii)          in the case of any such assignment resulting from a claim
for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.14, such assignment will result in a
reduction in such compensation or payments thereafter; and

 

(iv)          such assignment does not conflict with applicable
Requirements of Law.

 

2.14  Taxes.

 

(a)           All payments made by the Borrower
under this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (including any interest, additions to tax or penalties
applicable hereto) (collectively “Taxes”), excluding (i) income,
franchise, or similar Taxes imposed on (or measured by) the net income, net
profits or capital of the Administrative Agent or any Lender (a) by any
Government Authority under the laws of which any such Lender is organized, has
its principal office, maintains its applicable lending office, or otherwise
engages in business, or (b) by any Government Authority as a result of a
present or former connection between the Administrative Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document), and (ii) any
branch profits taxes imposed upon the Administrative Agent or any Lender by any
jurisdiction in which Borrower is located (other than any such taxes imposed
solely based on the Administrative Agent or any Lender having executed,
delivered or performed its obligations or received a payment under or enforced
this Agreement or any other Loan Document) (“Non-Excluded Taxes”).  If any such 

 

24

 

Non-Excluded Taxes or Other
Taxes are required to be deducted or withheld from any amounts payable to the
Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to ensure that, after making the required deductions or withholdings the
Administrative Agent or such Lender, as the case may be, receives on the due
date a net amount equal to the sum it would have received had no such deduction
or withholding been required or made, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes that (i) are imposed on
amounts payable to such Lender at the time it becomes a party to this Agreement
(or designates a new lending office other than at the Borrower’s request) or (ii) are
attributable to such Lender’s failure to comply with the requirements of
paragraph (d), (e) or (f) of this Section, except to the extent that
such Lender’s assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Borrower with respect to such Non-Excluded
Taxes pursuant to this paragraph.

 

(b)           In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

 

(c)           Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, the Borrower shall (i) notify Administrative Agent of any
such requirement as soon as Borrower becomes aware of it; and (ii) after
the due date of any such payment and upon the written request of Administrative
Agent, shall deliver a certified copy of an original official receipt received
by the Borrower showing payment thereof or such other documentation reasonably
satisfactory to the other affected parties to evidence the payment and its
remittance to the relevant Government Authority.  If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties paid by the
Administrative Agent or any Lender as a result of any such failure.

 

(d)           Each Lender (or Transferee) that is not a “U.S. Person” as
defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”)
shall deliver to the Borrower and the Administrative Agent (or in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN
or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest”, a statement
substantially in the form of Exhibit E and a Form W-8BEN, or
any subsequent versions thereof or successors thereto, properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Loan Documents (or otherwise indicate that
no such exemption or reduction is applicable). 
Such forms (and any other forms prescribed by applicable law to enable
the Borrower or the Administrative Agent to determine the withholding or
deduction required to be made, if any) shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the
case of any Participant, on or before the date such Participant purchases the
related participation).  In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such Non-U.S.
Lender is not legally able to deliver.

 

(e)           A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in
which the Borrower is located, or any treaty to which 

 

25

 

such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate, provided that in the case of a Lender
that is not entitled to an exemption from or reduction of any Non-U.S.
withholding tax as described in this paragraph, no such documentation is
required to be delivered.

 

(f)            If the Administrative Agent or any Lender determines, in
its sole discretion, that it has received a refund of any Non-Excluded Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 2.14,
it shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 2.14 with respect to the Non-Excluded Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

 

(g)           The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

 

2.15  Indemnity.  The Borrower agrees to indemnify each Lender
for, and to hold each Lender harmless from, any loss or expense (excluding loss
of anticipated profit) that such Lender actually sustains or incurs as a
consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or
conversion from Eurodollar Loans after the Borrower has given a notice thereof
in accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto.  Subject to
the foregoing, such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest that would have accrued on the amount
so prepaid, or not so borrowed, reduced, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, reduce, convert
or continue to the last day of such Interest Period (or, in the case of a
failure to borrow, reduce, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest or other return for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the
amount of interest (as reasonably determined by such Lender) that would have
accrued to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market.  A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. 
This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

 

2.16  Change of Lending Office.  Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 2.13 or 2.14(a) with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the 

 

26

 

consequences of such event; provided,
that such designation is made on terms that, in the sole judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic,
legal or regulatory disadvantage, and provided, further, that
nothing in this Section shall affect or postpone any of the obligations of
the Borrower or the rights of any Lender pursuant to Section 2.13
or 2.14(a).

 

2.17  Notes. 
If so requested by any Lender by written notice to the Borrower (with a
copy to the Administrative Agent), the Borrower shall execute and deliver to
such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to Section 10.6)
(promptly after the Borrower’s receipt of such notice) a Note or Notes to
evidence such Lender’s Loans.

 

SECTION 3.  INTENTIONALLY BLANK

 

SECTION 4.  REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative
Agent and the Lenders to enter into this Agreement and to make the Loans, the
Borrower hereby represents and warrants to the Administrative Agent and each
Lender that:

 

4.1  Financial Condition.

 

(a)           The audited consolidated balance
sheets of the Borrower as of December 31, 2007, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
PricewaterhouseCoopers, LLP present fairly in all material respects the
consolidated financial condition of the Borrower and its Subsidiaries as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the respective fiscal years then ended.  The audited statements of income of the
Borrower for the fiscal years ended on December 31, 2005, December 31,
2006 and December 31, 2007 present fairly in all material respects the
consolidated financial condition of the Borrower and its Subsidiaries as at
such date, and the results of its operations (on a consolidated basis) for the
respective fiscal years then ended.  The
unaudited consolidated balance sheet of the Borrower as at March 31, 2008,
and the related unaudited consolidated statements of income and cash flows for
the three-month period ended on such date, present fairly in all material
respects the consolidated financial condition of the Borrower and its
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the three-month period then ended
(subject to normal year-end audit adjustments). 
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP.  Except with respect to any Obligations and
the obligations to acquire Target, no Group Member has, as of the Closing Date,
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph.  During the period from December 31, 2007
to and including the date hereof there has been no Disposition by any Group
Member of any material part of its business or property.

 

4.2  No Change.  Since December 31, 2007, there has been
no Material Adverse Effect.

 

4.3  Existence; Compliance with Law.  Each Group Member (a) except as
permitted by Section 7.4, is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has
the corporate, limited partnership or other entity power and authority, and the
legal right, to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged, (c) is
duly qualified as a foreign corporation or other 

 

27

 

organization and in good standing under the laws of each jurisdiction
where the failure to be so qualified could reasonably be expected to have a
Material Adverse Effect and (d) is in compliance with all Requirements of
Law except where the failure to do so would not reasonably be expected to
result in a Material Adverse Effect.

 

4.4  Power, Authorization; Enforceable
Obligations.  Each Loan Party has the
corporate, limited partnership or other entity power and authority to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to obtain extensions of credit hereunder.  Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement.  No Governmental Approval or
consent or authorization of, filing with, notice to or other act by or in
respect of, any other Person is required in connection with the extensions of
credit hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except for any
of the foregoing which has previously been obtained or made.  Each Loan Document has been duly executed and
delivered on behalf of each Loan Party party thereto.  This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

 

4.5  No Legal Bar.  The execution, delivery and performance of
this Agreement and the other Loan Documents, the borrowings hereunder and the
use of the proceeds thereof will not violate any material Requirement of Law or
any material Contractual Obligation of any Group Member and will not result in,
or require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security
Documents).

 

4.6  Litigation.  No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against any Group Member or against
any of their respective properties or revenues (a) with respect to any of
the Loan Documents or any of the transactions contemplated hereby or thereby,
or (b) that could reasonably be expected to have a Material Adverse
Effect.

 

4.7  No Default.  No Group Member is in default under or with
respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect.  No Event of Default has occurred and is
continuing.

 

4.8  Ownership of Property; Liens.  Each Group Member has title in fee simple to,
or a valid leasehold interest in, all its real property, good title to, or a
valid leasehold interest in, or license to use, all its other property, in each
case, as would not result in a Material Adverse Effect, and none of such
property is subject to any Lien except as permitted by Section 7.3.

 

4.9  Intellectual Property.  Each Group Member owns, or is licensed to
use, all Intellectual Property used in the conduct of its business as currently
conducted except where the failure to own such Intellectually Property or such
license would not reasonably be expected to have a Material Adverse
Effect.  No claim has been asserted in
writing and is pending by any Person against any Group Member challenging or
questioning such Group Member’s use of Intellectual Property or the validity or
effectiveness of such Group Member’s Intellectual Property (other than routine
office actions in the course of prosecution of applications to register
Intellectual Property), nor does the Borrower know of any valid 

 

28

 

basis for any such claim, unless such claim would not reasonably be
expected to have a Material Adverse Effect. 
To the Borrower’s knowledge, the use of Intellectual Property by each
Group Member, and the conduct of such Group Member’s business, as currently
conducted, does not infringe on or otherwise violate the rights of any Person,
unless such infringement would not reasonably be expected to have a Material
Adverse Effect, and there are no claims pending or, to the knowledge of the
Borrower, threatened to such effect which would reasonably be expected to
result in a Material Adverse Effect.

 

4.10  Taxes. 
(a) Each Group Member has filed or caused to be filed all material
Federal, state and other material tax returns that are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other material
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any taxes (i) currently payable without
penalty or (ii) the validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the relevant Group
Member); and (b) no material tax Lien has been filed (other than in
respect of taxes not yet due and payable). Borrower is not aware of any
material written tax assessment against any Group Member that is not being
contested in good faith and by appropriate proceedings.

 

4.11  Federal Regulations.  No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used (a) for “buying” or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect for any
purpose that violates the provisions of the Regulations of the Board or (b) for
any purpose that violates the provisions of the Regulations of the Board.  If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred
to in Regulation U.

 

4.12  Labor Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:  (a) there are no strikes or other labor
disputes against any Group Member pending or, to the knowledge of the Borrower,
threatened; (b) hours worked by and payment made to employees of each
Group Member have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with such matters; and (c) all
payments due from any Group Member on account of employee health and welfare
insurance have been paid or accrued as a liability on the books of the relevant
Group Member.

 

4.13  ERISA. 
Neither a Reportable Event or, with respect to a Single Employer Plan, a
failure to make any required material contribution (including any required
installment) under the Pension Funding Rules, has occurred during the five-year
period prior to the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied in all material respects with
the applicable provisions of ERISA and the Code. Each Plan sponsored,
maintained or contributed to by Borrower that is intended to meet the
requirements of a “qualified plan” under Code Section 401(a) has
received a determination from the Internal Revenue Service that such plan is so
qualified or may rely on an opinion letter issued by the Internal Revenue
Service that such plan is so qualified, and nothing has occurred since the date
of such determination that could reasonably be expected to adversely affect the
qualified status of such plan in any material respect.  No distress termination of a Single Employer
Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen,
during such five-year period.  The
present value of all accrued benefits under all Single Employer Plans (based on
those assumptions used to fund each such Plan) do not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such each Plan allocable to such
accrued benefits by more than $2,000,000. 
Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan during the past five
years, that has 

 

29

 

resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made.  To the knowledge of the Borrower, no such
Multiemployer Plan is in Reorganization or Insolvent and there has been no
determination that any Multiemployer Plan is in endangered or critical status
within the meaning of Section 432 of the Code or Section 305 of
ERISA.  Neither the Borrower nor any
Commonly Controlled Entity has engaged in a “prohibited transaction”, as
defined in Section 406 of ERISA and Section 4975 of the Code, in
connection with any Plan, that could reasonably be expected to subject the
Borrower to a material tax or penalty by under Section 502(i) of
ERISA or Section 4975 of the Code. 
Except to the extent required by Section 4980B of the Code or
similar state law, as of the date hereof, the present value of the
Liability to provide health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee, officer or director
of the Borrower pursuant to any Plan sponsored, maintained or contributed to by
Borrower does not exceed $2 million.

 

4.14  Investment Company Act; Other Regulations.  No Loan Party is an “investment company”, or
a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended. 
No Loan Party is subject to regulation under any Requirement of Law
(other than Regulation X of the Board) that limits its ability to incur
Indebtedness. No Loan Party is subject to regulation under the Energy Policy
Act of 2005 or the Federal Power Act or under any other federal or state statute
or regulation in a manner, in each case, which limits its ability to incur
Indebtedness or which otherwise renders all or any portion of the Obligations
unenforceable.

 

4.15  Subsidiaries.   (a) Schedule 4.15 sets forth, as
of the Closing Date, the name and jurisdiction of organization of each
Restricted Subsidiary and, as to each such Restricted Subsidiary, the
percentage of each class of Capital Stock owned by Borrower or any Restricted
Subsidiary as of the Closing Date, and (b) as of the Closing Date, there
are no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or
directors and directors’ qualifying shares) of any nature relating to any
Capital Stock of any Subsidiary, except as created by the Loan Documents.

 

4.16  Use of Proceeds.  The proceeds of the Loans shall be used to
finance a portion of the Acquisition, to repay certain indebtedness of the
Target and its Subsidiaries and to pay related fees and expenses and for
general working capital needs and other general corporate purposes (including
making Investments to the extent permitted hereunder and Permitted
Acquisitions).

 

4.17  Environmental Matters.  Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:

 

(a)           to the knowledge of the Borrower, the
facilities and properties owned, leased or operated by any Group Member (the “Properties”)
do not contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law;

 

(b)           no Group Member has received or is aware of any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by any Group Member
(the “Business”), nor does the Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened;

 

30

 

(c)           to the knowledge of the Borrower, Materials of Environmental Concern
have not been transported or disposed of from the Properties in violation of,
or in a manner or to a location that could give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties
in violation of, or in a manner that could give rise to liability under, any
applicable Environmental Law;

 

(d)           no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which any Group Member is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business;

 

(e)           to the knowledge of the Borrower, there has been no release or threat
of release of Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of any Group Member in connection
with the Properties or otherwise in connection with the Business, in violation
of or in amounts or in a manner that could give rise to liability under
Environmental Laws;

 

(f)            the Properties and all operations at the
Properties are in compliance, and have in the last five years been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the Business; and

 

(g)           no Group Member has assumed any liability of any other Person under Environmental
Laws.

 

4.18  Accuracy of Information, etc.  (i) All
written information, other than the Financial Projections (as defined below),
forward looking information and information of a general economic or industry
nature, which has been made available to Administrative Agent or the Lenders by
Borrower or any of its representatives in connection with the transactions
contemplated by this Agreement or the other Loan Documents (the “Information”)
was, as of the date such Information was provided, when taken as a whole,
complete and correct in all material respects did not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein not materially misleading in light of the
circumstances under which such statements were made, and (ii) all
financial projections concerning the Borrower and the Restricted Subsidiaries
that have been or are hereafter made available to Administrative Agent or the
Lenders by Borrower or any of its representatives in connection with the
transactions contemplated by this Agreement or the other Loan Documents (the “Financial
Projections”) were prepared in good faith based upon assumptions that were
believed by the preparer thereof to be reasonable at the time made, it being
understood and agreed that the Financial Projections are not a guarantee of
financial performance and actual results may differ from the Financial
Projections and such differences may be material.

 

4.19  Security Documents.

 

(a)           The Guarantee and Collateral Agreement is effective to create in favor
of the Administrative Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral described therein and
proceeds thereof.   In the case of the
Pledged Stock as defined in the Guarantee and Collateral Agreement that are
securities represented by stock certificates or otherwise constituting
certificated securities within the meaning of Section 8-102(a)(15) of the
California UCC or the corresponding code or statute of any other applicable
jurisdiction (“Certificated Securities”), 

 

31

 

when certificates
representing such Pledged Stock are to be delivered to the Administrative
Agent, in the case of any Securities Account or Deposit Account of the Borrower
or Subsidiary Guarantor (as applicable), upon effectiveness of appropriate
Control Agreements in accordance with Section 6.11 with respect
thereto, and in the case of the other Collateral constituting personal property
described in the Guarantee and Collateral Agreement which may be perfected
through the filing of a UCC financing statement, when financing statements and
other filings (when filed in accordance with Section 6.11)
specified on Schedule 4.19(a) in appropriate form are filed in the
offices specified on Schedule 4.19(a), the Administrative Agent, for the
benefit of the Secured Parties, shall have a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Stock, Liens permitted by Section 7.3).  As of the Closing Date, none of the Capital
Stock of the Borrower or any Restricted Subsidiary that is a limited liability
company or partnership is a Certificated Security.

 

(b)           Each of the Mortgages, if any, delivered after the Closing Date will
be, upon execution, effective to create in favor of the Administrative Agent,
for the benefit of the Secured Parties, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds thereof, and when the
Mortgages are filed in the offices for the applicable jurisdictions in which
the Mortgaged Properties are located, each such Mortgage shall constitute a
fully perfected First Priority Lien on, and security interest in, all right,
title and interest of the Loan Parties in the Mortgaged Properties and the
proceeds thereof, as security for the Obligations (as defined in the relevant
Mortgage).

 

4.20  Solvency.  The Loan Parties, taken as a
consolidated group, after giving effect to the incurrence of all Indebtedness
and obligations being incurred in connection herewith are Solvent.

 

4.21  Designated Senior Indebtedness.  The
Loan Documents and all of the Obligations shall be deemed “Designated Senior
Indebtedness” or a similar concept thereof for purposes of any Subordinated
Indebtedness (if such concept is applicable therein) of the Loan Parties.

 

4.22  Brokerage Commissions.  No
Person is entitled to receive any brokerage commission, finder’s fee or similar
fee or payment in connection with the extensions of credit contemplated by this
Agreement (other than fees paid to SVB).

 

4.23  Anti-Terrorism Laws.

 

(a)           None of the Group Members and, to the knowledge of the Group Members,
none of their respective Affiliates is in violation of any laws relating to
terrorism or money laundering (“Anti-Terrorism Laws”), including Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001
(the “Executive Order”), and the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56.

 

(b)           None of the Group Members and, to the knowledge of the Group Members,
none of their respective Affiliates or their respective brokers or other agents
acting or benefiting in any capacity in connection with the Loans is any of the
following:

 

(i)            a Person or entity that is listed in the
annex to, or is otherwise subject to the provisions of, the Executive Order;

 

(ii)           a Person or entity owned or controlled by, or acting for or on behalf
of, any Person or entity that is listed in the annex to, or is otherwise subject
to the provisions of, the Executive Order;

 

32

 

(iii)          a Person or entity with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(iv)          a Person or entity that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order; or

 

(v)           a Person or entity that is a Designated Person.

 

(c)           No Group Member or, to the knowledge of any Group Member, any of its
brokers or other agents acting in any capacity in connection with the Loans (i) conducts
any business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any Person described in clause (b) above,
(ii) deals in, or otherwise engages in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order, or (iii) engages
in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law.

 

SECTION 5.  CONDITIONS
PRECEDENT

 

5.1  Conditions to Extension of Credit.  The
agreement of each Lender to make the Loans requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:

 

(a)           Loan Documents.  The
Administrative Agent shall have received (i) this Agreement or, in the
case of the Lenders, an Addendum, executed and delivered by the Administrative
Agent, Holdings, the Borrower and each Person listed on Schedule 1.1, (ii) the
Guarantee and Collateral Agreement, executed and delivered by the Borrower,
Holdings and each Subsidiary Guarantor, (iii) the Fee Letter executed and
delivered by the Borrower and Silicon Valley Bank, (iv) an Acknowledgement
and Consent in the form attached to the Guarantee and Collateral Agreement,
executed and delivered by each Issuer (as defined therein), if any, that is not
a Loan Party, (v) the Intellectual Property Security Agreements, executed
and delivered by the applicable Loan Parties, and (vi) the other fully
executed Loan Documents (including without limitation, the Security Documents).

 

(b)           Financial Statements.  The
Lenders shall have received (i) an audited consolidated financial
statements of the Borrower as of December 31, 2005, December 31, 2006
and December 31, 2007, and (ii) unaudited interim balance sheet of
the Borrower as of March 31, 2008 and the related unaudited interim
statements of income and cash flows of the Borrower for the fiscal quarter then
ended.

 

(c)           [Reserved].

 

(d)           [Reserved].

 

(e)           Fees.  The Lenders, the
Administrative Agent shall have received all fees required to be paid, and all
expenses required to be paid hereunder for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Closing Date.  All such amounts will be
paid with proceeds of Loans made on the Closing Date and will be reflected in
the funding instructions given by the Borrower to the Administrative Agent on
or before the Closing Date.

 

(f)            Closing Certificate; Certified Certificate of
Organization; Good Standing Certificates.  The Administrative Agent shall
have received (i) a certificate of each Loan Party, dated the 

 

33

 

Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments, including the certificate of
incorporation or other similar organizational document of each Loan Party
certified by the relevant authority of the jurisdiction of organization of such
Loan Party and the bylaws or other similar organizational document of each Loan
Party, and (ii) a long form good standing certificate (to the extent
available) for each Loan Party from its jurisdiction of organization.

 

(g)           Legal Opinions.  The
Administrative Agent shall have received the executed legal opinions of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel to Borrower and the
Subsidiary Guarantors, in a form reasonably satisfactory to the Administrative
Agent (and such local counsel as may be necessary in jurisdictions other than
Delaware and New York).  Such legal
opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably
require.

 

(h)           Pledged Stock; Stock Powers.  The
Administrative Agent shall have received the certificates (other than the
certificates representing the shares of the Capital Stock of United Online
Software Development Private Limited and MyPoint.com Japan Co., Ltd.)
representing the shares of Capital Stock pledged pursuant to the Guarantee and
Collateral Agreement together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof.

 

(i)            Filings.  Each Uniform Commercial Code
financing statement required in order to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a perfected Lien on the
Collateral described therein (and which is capable of being perfected through
the filing of a Uniform Commercial Code financing statement), prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for
filing.

 

(j)            Solvency Certificate.  The
Administrative Agent shall have received a solvency certificate in form and
substance reasonably satisfactory to the Administrative Agent, from the chief
financial officer or treasurer of Borrower certifying that the Borrower and its
Restricted Subsidiaries, on a consolidated basis, after giving effect to the
transactions contemplated hereby, are Solvent.

 

(k)           Patriot Act.  The Administrative Agent shall
have received, prior to the Closing Date, all documentation and other
information required by Governmental Authorities under applicable “know your
customer” and anti-money-laundering rules and regulations, including the
Patriot Act.

 

(l)            Insurance.  The Administrative Agent shall
have received insurance certificates in a form reasonably satisfactory to the
Administrative Agent.

 

(m)          Adjusted OIBDA.  The
Borrower shall deliver to the Administrative Agent a Closing Date Certificate
signed by the Borrower’s chief financial officer, demonstrating in reasonable
detail that adjusted OIBDA (calculated in a manner consistent with Borrower’s
prior practices) of the Borrower and the Restricted Subsidiaries for the most
recently completed trailing four quarter period ended prior to the Closing Date
for which financial statements are available of not less than $100,000,000.

 

(n)           No Purchaser Material Event of Default. 
Since December 31, 2007, no Purchaser Material Adverse Effect has
occurred.

 

(o)           Representations and Warranties.  The
Specified Representations shall be true, correct and complete in all material
respects (provided  that if such Specified Representation is
qualified as to materiality, such Specified Representation shall be required to
be true and correct) on and as of the Closing Date except to the extent such
Specified Representations specifically relate to an earlier date, in 

 

34

 

which case such Specified Representations shall have been true, correct
and complete in all material respects on and as of such earlier date (provided
that, if a Specified Representation as of an earlier date is qualified
as to materiality, such Specified Representation shall be required to be true
and correct as of such earlier date).

 

SECTION 6.  AFFIRMATIVE
COVENANTS

 

Borrower hereby agrees that,
until all Commitments have been terminated and the principal of and interest on
each Loan, all fees and all other expenses or amounts payable under any Loan
Document shall have been paid in full, the Borrower shall and shall cause each
Restricted Subsidiary to:

 

6.1  Financial Statements. 
Furnish to the Administrative Agent, for distribution to each Lender:

 

(a)           as soon as available, but in any event within 75 days after the
end of each fiscal year of Borrower, a copy of the unaudited consolidating and
consolidated balance sheet of Borrower and its Restricted Subsidiaries
(excluding, for the avoidance of doubt, the Excluded Subsidiaries) as at the
end of such year, the related unaudited consolidating and consolidated
statement of income and unaudited consolidated statements of cash flows of
Borrower and its Restricted Subsidiaries (excluding, for the avoidance of
doubt, the Excluded Subsidiaries) for such year, certified by a Responsible
Officer as being fairly stated in all material respects and derived from the
consolidated financial statements as of such date and for such period of the
Borrower and its Subsidiaries; and

 

(b)           as soon as available, but in any event within 45 days after the
end of each fiscal quarter of Borrower (other than the last fiscal quarter
of any fiscal year), commencing with the fiscal quarter ended September 30,
2008, a copy of the unaudited consolidating and consolidated balance sheet of
Borrower and its Restricted Subsidiaries (excluding, for the avoidance of
doubt, the Excluded Subsidiaries) as at the end of such quarter, the
related unaudited consolidating and consolidated statement of income and
unaudited consolidated statement of cash flows of Borrower and its Restricted
Subsidiaries (excluding, for the avoidance of doubt, the Excluded Subsidiaries)
for such quarter certified by a Responsible Officer as being fairly stated
in all material respects and derived from the consolidated financial
statements as of such date and for such period of the Borrower and its
Subsidiaries.

 

All such financial
statements shall be complete and correct in all material respects and shall be
derived from the financial statements of the Borrower and its Subsidiaries.

 

6.2  Certificates; Other Information. 
Furnish to the Administrative Agent, for distribution to each Lender:

 

(a)           Within 50 days after the end of the first three fiscal quarters of each
fiscal year (90 days after the end of each fiscal year), (i) a certificate
of a Responsible Officer stating that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate and (ii), (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by each Group
Member with the provisions of this Section 7.1 as of the last day of the
fiscal quarter or fiscal year of Borrower, as the case may be, and (y) to
the extent not previously disclosed to the Administrative Agent, a description
of any change in the jurisdiction of organization of any Loan Party and a list
of any material Intellectual Property acquired by any Loan Party since the date
of the most recent report delivered pursuant to this clause (y) (or, in
the case of the first such report so delivered, since the Closing Date);

 

35

 

(b)           as soon as available, and in any event no later than 90 days after the
end of each fiscal year of Borrower, a detailed consolidated budget for the
following fiscal year (including a projected consolidated and consolidating
income statement and balance sheet of Borrower and the Restricted Subsidiaries
(excluding, for the avoidance of doubt, the Excluded Subsidiaries) as of the
end of each fiscal quarter of such fiscal year, the related consolidated
statements of projected cash flow, projected changes in financial position and
projected income and a description of the material underlying assumptions
applicable thereto), and, promptly following their becoming available, significant
revisions, if any, of such budget and projections with respect to such fiscal
year (collectively, the “Projections”), which Projections shall in each
case be accompanied by a certificate of a Responsible Officer stating that such
Responsible Officer has no reason to believe that such Projections are based on
unreasonable assumptions as of the date of such Projections; it being
recognized by Lenders that such Projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ materially from the Projections;

 

(c)           within five days after the same are sent, copies of all material
financial statements and material reports that any Subsidiary Guarantor or the
Borrower sends to all of the holders of any class of its debt securities or
public equity securities that are not filed with the SEC;

 

(d)           upon request by the Administrative Agent, within five days after the
same are sent or received, copies of all correspondence, reports, documents and
other filings with any Governmental Authority regarding compliance with or
maintenance of Governmental Approvals or Requirements of Law that could
reasonably be expected to have a Material Adverse Effect on the operations of the
Group Members; and

 

(e)           promptly, such additional financial and other information as any Lender
may from time to time reasonably request.

 

6.3  Payment of Obligations.  Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its obligations (including all taxes,
assessments and governmental charges or levies imposed upon the Collateral) of
whatever nature, except where the failure to do so would not result in a
Material Adverse Effect or where the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of
the relevant Group Member.

 

6.4  Maintenance of Existence; Compliance.  (a) (i) 
Preserve, renew and keep in full force and effect its organizational existence
and (ii) take all commercially reasonable action to maintain or obtain all
Governmental Approvals and all other rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case
of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; (b) comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect; (c) comply with all Governmental
Approvals, and any term, condition, rule, filing or fee obligation, or other
requirement related thereto, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (d) prevent
any of the Governmental Approvals from being revoked, rescinded, suspended,
modified in an adverse manner or not renewed in the ordinary course for a full
term to the extent such revocation, rescission, suspension, modification or
nonrenewal has, or could reasonably be expected to have, a Material Adverse
Effect.

 

6.5  Maintenance of Property; Insurance.  (a) To
the extent commercially reasonable, keep all property necessary in its business
in good working order and condition, ordinary wear and tear, force majeure and
other unforeseen events excepted and (b) maintain with financially sound
and reputable 

 

36

 

insurance companies property and liability insurance in at least such
amounts and against at least such risks as are usually insured against by
companies engaged in the same or a similar business.

 

6.6  Inspection of Property; Books and Records;
Discussions.  (a)  Keep proper books of records and
account in which full, true and correct (in all material respects) entries in
conformity in all material respects with GAAP and all Requirements of Law shall
be made of material dealings and transactions in relation to its business and
activities and (b) permit representatives of any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time (and at the Loan Parties’ expense,
which expenses shall in no event exceed $7,500 per inspection if no Event of
Default has occurred and is continuing) and to discuss the business, operations,
properties and financial and other condition of the Group Members with officers
and employees of the Group Members and with their independent certified public
accountants (in which such officers and representatives of Group Members may be
present).  Such inspections shall not
exceed once per year, unless an Event of Default has occurred and is
continuing.

 

6.7  Notices.  Promptly give notice to the Administrative
Agent of:

 

(a)           the occurrence of any Default or Event of Default;

 

(b)           any (i) default or event of default under any Contractual
Obligation of any Group Member or (ii) litigation, investigation or
proceeding that may exist at any time between any Group Member and any
Governmental Authority, that in either case, if not cured or if adversely determined,
as the case may be, could reasonably be expected to have a Material Adverse
Effect;

 

(c)           upon any Responsible Officer becoming aware of the same, any litigation
or proceeding affecting any Group Member and which Group Member has received
service of process (i) in which the liability of the Loan Parties would,
in the reasonable judgment of Borrower, be expected to exceed $2,500,000, (ii) in
which injunctive or similar relief is sought and which could reasonably be
expected to have a Material Adverse Effect or (iii) which relates to any
Loan Document;

 

(d)           the following events, as soon as possible and in any event within
thirty (30) days after any Responsible Officer knows thereof:  (A) the occurrence of any Reportable
Event with respect to any Single Employer Plan, a failure to make any required
contribution to a Single Employer Plan, the creation of any Lien in favor of
the PBGC or a Single Employer Plan, any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan, the determination that
any Multiemployer Plan is in endangered or critical status within the meaning
of Section 432 of the Code or Section 305 of ERISA, the adoption of
any new Single Employer Plan by Borrower or any Commonly Controlled Entity, the
adoption of any amendment to a Single Employer Plan, if such amendment will
result in a material increase in benefits or unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA), or the commencement of
contributions by Borrower or any Commonly Controlled Entity to any Plan that is
subject to the Pension Funding Rules, or (B) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan;

 

(e)           any other development or event that has had or could reasonably be
expected to have a Material Adverse Effect;

 

(f)            copies of all information required to be
reported to the PBGC under Section 4010 of ERISA and such other documents
or governmental reports of filings relating to any Plan as the Administrative
Agent shall reasonably request; and

 

37

 

(g)           promptly following any request therefore, copies of any documents or
notices described in Sections 101 (k) or (l) of ERISA that any
Borrower or any Commonly Controlled Entity has received with respect to any
Multiemployer Plan; provided, that if any Borrower or any Commonly Controlled
Entity has not requested such documents or notices from the administrator or
sponsor of the applicable Multiemployer Plan, the applicable Borrower or
Commonly Controlled Entity shall, upon request from the Administrative Agent,
promptly make a request for such documents or notices from such administrator
or sponsor and shall provide copies of such documents and notices promptly upon
receipt thereof.

 

Each notice pursuant to this
Section 6.7 shall be accompanied by a statement of a Responsible
Officer setting forth details of the occurrence referred to therein and stating
what action the relevant Group Member proposes to take with respect thereto.

 

6.8  Environmental Laws.

 

(a)           Comply with, and use reasonable efforts to ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply with and maintain, and use reasonable efforts to ensure that
all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except in any such case to the extent failure to
do so would not reasonably be expected to result in a Material Adverse Effect.

 

(b)           Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions required under Environmental Laws
and promptly comply with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except in any such case to the extent
failure to do so would not reasonably be expected to result in a Material
Adverse Effect.

 

6.9  Operating Accounts. 
Subject to SVB providing reasonable terms, maintain the Borrower’s and
the Subsidiary Guarantors’ primary depository and operating accounts with SVB
and SVB’s Affiliates.

 

6.10  [Reserved].

 

6.11  Additional Collateral, etc.

 

(a)           With respect to any property (to the extent included in the definition
of Collateral) owned after the Closing Date by any Loan Party (other than (x) any
property described in paragraph (b), (c) or (d) below, and (y) any
property subject to a Lien expressly permitted by Sections 7.3 (c), (d),
(g), (q) and (r)) as to which the Administrative
Agent, for the benefit of the Secured Parties, does not have a perfected Lien,
promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent reasonably deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a security
interest in such property and (ii) take all reasonable actions necessary
or advisable to grant to the Administrative Agent, for the benefit of the
Secured Parties, a perfected First Priority security interest in such property
(other than Excluded Perfection Assets), including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may be reasonably requested
by the Administrative Agent.

 

38

 

(b)           With respect to any fee interest in any real property having a value
(together with improvements thereof) of at least $5,000,000 acquired after the
Closing Date by any Loan Party (other than any such real property subject to a
Lien expressly permitted by Sections 7.3(g) or (q)),
promptly (i) execute and deliver a First Priority Mortgage, in favor of
the Administrative Agent, for the benefit of the Secured Parties, covering such
real property, (ii) if requested by the Administrative Agent, provide the
Lenders with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real
property (or such other amount as shall be reasonably specified by the
Administrative Agent), and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
Mortgage, each of the foregoing in form and substance reasonably satisfactory
to the Administrative Agent and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

 

(c)           With respect to any new Domestic Subsidiary created or acquired after
the Closing Date by Borrower or any Subsidiary Guarantor (which, for the
purposes of this Section 6.11(c), shall include any Restricted
Subsidiary that ceases to be a Foreign Subsidiary), promptly (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected First Priority security interest in the Capital Stock of such new
Subsidiary that is owned by any Loan Party, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock (if any),
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary Guarantor, as applicable,
(iii) cause such new Subsidiary (a) to become a party to the
Guarantee and Collateral Agreement and (b) to take such actions reasonably
necessary or advisable to grant to the Administrative Agent for the benefit of
the Secured Parties a perfected First Priority security interest in the
Collateral (other than Excluded Perfection Assets) described in the Guarantee
and Collateral Agreement, with respect to such new Subsidiary, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Administrative Agent and (c) to deliver to the
Administrative Agent a certificate of such Subsidiary, in a from reasonably
satisfactory to the Administrative Agent, with appropriate insertions and
attachments as to such Subsidiary’s organizational documents, incumbency and
resolutions authorizing such Subsidiary to enter into the Guarantee and
Collateral Agreement, and (iv) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions with relating to the matters
described above, which opinion shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.

 

(d)           With respect to any new Foreign Subsidiary created or acquired and
directly held by Borrower or a Subsidiary Guarantor after the Closing Date,
promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for
the benefit of the Secured Parties, a perfected First Priority security
interest in 66% of the total outstanding voting Capital Stock of such new
Subsidiary, (ii) deliver to the Administrative Agent the certificates, if
any, representing such Capital Stock, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the Borrower or
any Subsidiary Guarantor, as applicable, and take such other action as may be
necessary or, in the reasonable opinion of the Administrative Agent, desirable
to perfect the Administrative Agent’s security interest therein, and (iii) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent. 
Notwithstanding the foregoing, if any of the foregoing actions would
subject any Group Member to any material tax, cost or expense in relation to
the benefit afforded thereby, as reasonably determined by the Required Lenders
the obligation of the Group Member to take such actions shall be inapplicable.

 

39

 

(e)           Upon Administrative Agent’s reasonable request, the Loan Parties shall
use commercially reasonable efforts (which shall not require any Group Member
to agree to any modification to any lease or to payment of any fees in excess
of $2,500) to obtain a landlord’s agreement or bailee letter reasonably
satisfactory in form and substance to the Administrative Agent, as applicable,
from the lessor of each leased property, including with respect to Borrower’s
21301 Burbank Boulevard, Woodland Hills, California 91367 location, or bailee
with respect to any warehouse, processor or converter facility or other location
where material Collateral is stored or located, excluding co-location
facilities.

 

(f)            To the extent not satisfied prior to the
Closing Date, not later than the date that is 45 days (or if foreign regulatory
or governmental approvals or processes make the satisfaction of this
requirement commercially impracticable within the specified period, such longer
period as is reasonably necessary to satisfy such requirements) after the
Closing Date (or such longer period as Administrative Agent may agree), Borrower
shall take or cause to be taken all such actions, executed and delivered or
cause to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings that
may be necessary or, in the opinion of Administrative Agent, desirable in order
to perfect Administrative Agent’s (for the benefit of Lenders) First Priority
security interest in the entire personal and mixed property Collateral (other
than Excluded Perfection Assets), including without limitation, Control
Agreements (in form and substance reasonably satisfactory to the Administrative
Agent) with respect to the Deposit Accounts and Securities Accounts).

 

SECTION 7.  NEGATIVE
COVENANTS

 

The Borrower hereby agrees
that, until the principal of and interest on each Loan, all fees and all other
expenses or amounts payable under any Loan Document shall have been paid in
full, the Borrower shall not, nor permit any Restricted Subsidiary to, directly
or indirectly:

 

7.1  Financial
Condition Covenants.

 

(a)           Consolidated Fixed Charge Coverage Ratio. 
Permit the Consolidated Fixed Charge Coverage Ratio as at the last day
of any period of four consecutive quarters of Borrower ending in any period set
forth below to be less than the ratio set forth below opposite such quarter:

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated Fixed
  Charge 

  Coverage Ratio

  
	
   

  	
   

  	
   

  
	
  September 30,
  2008 and each 

  quarter thereafter

  	
   

  	
  1.50

  

 

(b)           Consolidated Leverage Ratio. 
Permit the Consolidated Leverage Ratio as at the last day of any period
of four consecutive quarters of Borrower ending in any period set forth below
to exceed the ratio set forth below opposite such quarter:

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated Leverage
  Ratio

  
	
   

  	
   

  	
   

  
	
  September 30,
  2008 and each 

  quarter thereafter

  	
   

  	
  1.25

  

 

(c)           Consolidated EBITDA. 
Permit Consolidated EBITDA as at the last day of any period of four
consecutive quarters of Borrower ending in any period set forth below to be
less than the amount set forth below opposite such quarter:

 

40

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated EBITDA

  
	
   

  	
   

  	
   

  
	
  September 30,
  2008 and each 

  quarter thereafter

  	
   

  	
  $100,000,000
  adjusted to $50,000,000 

  upon the Classmates IPO

  

 

7.2  Indebtedness. 
Create, issue, incur, assume, become liable in respect of or suffer to
exist any Indebtedness, except:

 

(a)           Indebtedness of any Loan Party pursuant to any Loan Document;

 

(b)           Indebtedness of (i) the Borrower or any Subsidiary Guarantor to
any other Loan Party, or (ii) any Foreign Subsidiary of the Borrower to
any other Foreign Subsidiary of the Borrower;

 

(c)           Guarantee Obligations of any Loan Party in respect of Indebtedness
otherwise permitted by this Section 7.2;

 

(d)           Indebtedness outstanding on the date hereof and listed on Schedule
7.2(d) and any refinancings, refundings, renewals or extensions
thereof (without shortening the maturity thereof or increasing the principal
amount thereof);

 

(e)           Indebtedness (including, without limitation, Capital Lease Obligations)
secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $2,500,000 at any one time outstanding and any
refinancings, refundings, renewals or extensions thereof (without shortening
the maturity thereof or increasing the principal amount thereof except to the
extent of interest, fees and premiums relating to such Indebtedness or such
refinancing, refunding, renewal or extension);

 

(f)            Surety Indebtedness;

 

(g)           additional Indebtedness of Borrower or any Restricted Subsidiaries in
an aggregate principal amount (for Borrower and all Restricted Subsidiaries)
not to exceed $5,000,000 at any one time outstanding;

 

(h)           Indebtedness arising in connection with endorsement of instruments for
deposit in the ordinary course of business;

 

(i)            Indebtedness permitted by Section 7.8;

 

(j)            Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within three Business Days of
incurrence;

 

(k)           other unsecured Subordinated Indebtedness; provided, however,
that (i) the Loan Parties are in pro forma compliance with the financial
covenants set forth in Section 7.1 after giving effect to the
incurrence of such Subordinated Indebtedness and (ii) no Default or Event
of Default shall exist immediately prior to the incurrence of such Subordinated
Indebtedness or would result therefrom;

 

(l)            Indebtedness of any Person that becomes a
Subsidiary of the Borrower in a Permitted Acquisition (or Indebtedness assumed
at the time, and as a result, of a Permitted Acquisition), which Indebtedness
is existing at the time such Person becomes a Subsidiary of the Borrower, and
any 

 

41

 

related refinancing, refunding, renewal or extension of such
Indebtedness in an aggregate amount not to exceed $5,000,000 at any time
outstanding; provided that such Indebtedness was not incurred in
connection with, or in anticipation or contemplation of, such Permitted
Acquisition;

 

(m)          Indebtedness incurred in connection with letters of credit issued to
support the obligations referred to in Sections  7.3(c) and (d),
obligations under leases and other obligations (excluding debt for borrowed
money) in each case incurred in the ordinary course of business;

 

(n)           Indebtedness of any Person in connection with Swap Agreements permitted
by Section 7.12; and

 

(o)           Borrower or any Restricted Subsidiary may become and remain liable with
respect to Indebtedness consisting of insurance premium financing.

 

Any Indebtedness of any Loan
Party to its employees, directors and officers of any Group Member shall be
subordinated to the prior payment in full of all of the Obligations pursuant to
a written agreement or written terms reasonably acceptable to the
Administrative Agent.

 

7.3  Liens.  Create, incur, assume or
suffer to exist any Lien upon any of its property, whether now owned or
hereafter acquired, except:

 

(a)           Liens for taxes, assessments or governmental charges or levies not yet
due or delinquent or that are being contested in good faith by appropriate
proceedings; provided that adequate reserves with respect thereto are
maintained on the books of Borrower and the Restricted Subsidiaries, as the
case may be, in conformity with GAAP;

 

(b)           carriers’, warehousemen’s, landlord’s, mechanics’, materialmen’s,
repairmen’s, workmen’s, suppliers’ or other like Liens arising in the ordinary
course of business that are not overdue for a period of more than 30 days or
that are being contested in good faith by appropriate proceedings;

 

(c)           pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation or Liens to secure
letters of credit issued to support obligations relating to workers’
compensation, insurance and other social security legislation;

 

(d)           deposits to secure the performance of bids, tenders, trade contracts
(other than for borrowed money), leases, government contracts, statutory
obligations, surety, stay, customs and appeal bonds, performance and return of
money bonds and other obligations of a like nature incurred in the ordinary
course of business (or Liens to secure letters of credit issued for such
purpose);

 

(e)           easements, rights-of-way, restrictions (including zoning restrictions),
covenants, licenses, encroachments, protrusions and other similar charges or
encumbrances or minor title deficiencies incurred in the ordinary course of
business that, in the aggregate, are not substantial in amount and that do not
in any case materially detract from the value of the property subject thereto
or materially interfere with the ordinary conduct of the business of Borrower
and the Restricted Subsidiaries;

 

(f)            Liens in existence on the date hereof listed
on Schedule 7.3(f) (and replacements of such Liens), securing
Indebtedness permitted by Section 7.2(d); provided that no
such Lien is spread to cover any additional property after the Closing Date
(other than accessions thereto) and that the amount of Indebtedness secured
thereby is not increased;

 

42

 

(g)           Liens securing Indebtedness of Borrower or any Restricted Subsidiary
incurred pursuant to Section 7.2(e) to finance the acquisition
of fixed or capital assets (as any Liens securing any such Indebtedness which
has been refinanced); provided that (i) such Liens shall be created
substantially simultaneously with or within ninety days after the acquisition
of such fixed or capital assets (or substantially concurrently with any
refinancing (including successive refinancings) of Indebtedness originally
incurred for such purpose), (ii) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness (as
refinanced from time to time) (and accessions thereto) and (iii) in the
case of a refinancing, the amount of Indebtedness secured thereby is not
increased except to the extent of interest, fees and premiums relating to the
Indebtedness refinanced and such refinancing Indebtedness;

 

(h)           Liens created pursuant to the Security Documents;

 

(i)            any interest or title of a lessor, lessee or
licensor under any lease or license entered into by Borrower or any Restricted
Subsidiary in the ordinary course of its business and covering only the assets
so leased or licensed;

 

(j)            Liens in respect of judgments that do not
constitute a Default or Event of Default under Section 8(h) of
this Agreement;

 

(k)           Liens not otherwise permitted by this Section so long as the
aggregate fair market value (determined as of the date such Lien is incurred)
of the assets subject thereto does not exceed (as to Borrower and the Restricted Subsidiaries) $1,000,000 at any
one time;

 

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

 

(m)          Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by any Group Member in
the ordinary course of business in accordance with the past practices of such
Group Member;

 

(n)           bankers’ Liens, rights of setoff and other similar Liens existing
solely with respect to cash and Cash Equivalents on deposit in one or more
accounts maintained by any Group Member, in each case granted in the ordinary
course of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash
management, bank accounts, securities accounts and operating account
arrangements, including those involving pooled accounts and netting
arrangements;

 

(o)           licenses of intellectual property or intellectual property rights
granted by any Group Member in the ordinary course of business and not interfering
in any material respect with the ordinary conduct of business of the Group
Members;

 

(p)           the filing of UCC financing statements solely as a precautionary
measure in connection with operating leases or consignment of goods;

 

(q)           Liens securing assets subject to capital lease or purchase money
security interests in respect of Indebtedness permitted under Section 7.2(l) in
an aggregate principal amount not to exceed $2,500,000; and

 

(r)            Liens on cash collateral (or cash
equivalents) in respect of Indebtedness permitted under Section 7.2(m).

 

43

 

7.4  Fundamental Changes. 
Enter into any merger, consolidation or amalgamation, or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of
all or substantially all of its property or business, except that:

 

(a)           any Subsidiary of the Borrower or any Subsidiary Guarantor may be
merged or consolidated with or into the Borrower or any Subsidiary Guarantor (provided
that the Borrower or such Subsidiary Guarantor shall be the continuing or
surviving corporation);

 

(b)             any Foreign Subsidiary of the Borrower may be
merged or consolidated with or into another Foreign Subsidiary of the Borrower;

 

(c)           the Borrower or any Subsidiary of Borrower may Dispose of any or all of
its assets (i) to the Borrower or any Subsidiary Guarantor (upon voluntary
liquidation, dissolution or otherwise), or (ii) in the case of a Foreign
Subsidiary of the Borrower, to another Foreign Subsidiary of the Borrower (upon
liquidation, dissolution or otherwise);

 

(d)           any Investment expressly permitted by Section 7.8 may be
structured as a merger, consolidation or amalgamation; and

 

(e)           Dispositions permitted by Section 7.5 may be made.

 

7.5          Disposition of Property. 
Dispose of any of its property, whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s
Capital Stock to any Person, except:

 

(a)           the Disposition of obsolete, worn out, used or surplus property in the
ordinary course of business and the abandonment or other Disposition of
Intellectual Property that is, in the reasonable judgment of the Borrower, no
longer economically practicable to maintain or useful in the ordinary course of
business of the Group Members taken as a whole;

 

(b)           the sale of inventory in the ordinary course of business;

 

(c)           Dispositions permitted by Section 7.4(c);

 

(d)           the sale or issuance of any Subsidiary’s Capital Stock to the Borrower
or any Subsidiary Guarantor;

 

(e)           the sale or issuance of any Foreign Subsidiary’s Capital Stock to any
Group Member;

 

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

 

(g)           the licensing of patents, trademarks, copyrights, and other
intellectual property rights;

 

(h)           the Disposition of other property sold at fair market value not to
exceed $10,000,000 during the term of this Agreement;

 

(i)            leases of real or personal property in the
ordinary course of business; and

 

44

 

(j)            Dispositions of delinquent accounts
(including settlements thereof) in the ordinary course of business; and

 

(k)           Disposition of Swap Agreements.

 

7.6  Restricted Payments.  Make
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness of Borrower or any Subsidiary (secured or unsecured), declare or
pay any dividend (other than dividends payable solely in common stock of the
Person making such dividend) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock
of Borrower or any Restricted Subsidiary, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of any Group Member
(collectively, “Restricted Payments”), except that:

 

(a)           (i) any Subsidiary of Borrower may make Restricted Payments to the
Borrower or any Subsidiary Guarantor or (ii) any Foreign Subsidiary of the
Borrower may make Restricted Payments to any other Foreign Subsidiary of the
Borrower, or (iii) Borrower or any Subsidiary Guarantor may purchase or
otherwise acquire Capital Stock of any Subsidiary of Borrower, or (iv) any
Foreign Subsidiary of Borrower may purchase or otherwise acquire Capital Stock
of any Foreign Subsidiary of Borrower or (v) any Subsidiary of Borrower
may pay dividends or distributions to the holders of its Capital Stock on a pro
rata basis;

 

(b)           so long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may purchase common stock or common stock options from
present or former directors, officers or employees of any Group Member upon the
death, disability, retirement, severance or termination of employment of any
such director, officer or employee, in each case, in accordance with a plan
approved by its respective Board of Directors, provided, that the aggregate
amount of payments under this clause shall not exceed $2,000,000 during any
fiscal year of Borrower; provided further that that no more than $250,000 of
such $2,000,000 shall be used in connection with the purchase of common stock
or common stock options in connection with the severance or termination (other
than as a result of death, disability or retirement) of any directors, officers
or employees of any Group Member;

 

(c)           the Borrower may (i) declare and pay quarterly dividends up to
$0.20 per share with respect to its outstanding common stock (and an equivalent
amount with respect to restricted stock units) so long as (x) no Default
or Event of Default shall have occurred and be continuing when such dividend is
declared, (y) the Borrower shall be in compliance with Section 7.1
at the time such dividend is declared for the most recently ended fiscal
quarter for which financial results have been provided under Section 6.1,
calculated to give pro forma effect to such dividend (so long as such dividend
is paid within 45 days of the date of declaration thereof) and (z) a
Responsible Officer has certified, to the best of such Responsible Officer’s
knowledge in their capacity as an officer, the conditions in clauses (x) and
(y) above; (ii) pay taxes that are due on behalf of officers,
directors and employees in connection with the vesting of restricted stock
units and stock grants to its employees and taxes with respect to dividends (or
dividend equivalent payments) to holders of restricted stock units in
accordance with a plan approved by its respective Board of Directors and in the
ordinary course of business; (iii) convert vested restricted stock units
into common stock to the extent deemed a stock repurchase; and (iv) make
Restricted Payments deemed to occur upon exercise of stock options including
the settlement of such options net of the exercise price thereof;

 

(d)           the Borrower may make regularly scheduled payments of interest in
respect of any Subordinated Indebtedness in accordance with the terms of, and
only to the extent required therein 

 

45

 

and subject to the subordination provisions contained in the documents
in connection therewith pursuant to which such Subordinated Indebtedness was
issued and the Borrower may repay or redeem Subordinated Indebtedness with the
proceeds of Subordinated Indebtedness issued to refinance such Subordinated
Indebtedness; and

 

(e)           Investments permitted under Section 7.8 may be consummated
as Restricted Payments.

 

7.7  Reserved.

 

7.8  Investments.  Make any advance, loan,
extension of credit (by way of guarantee or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting a business unit of, or make any other
investment in, any other Person (all of the foregoing, “Investments”),
except:

 

(a)           extensions of trade credit in the ordinary course of business;

 

(b)           Investments in cash and Cash Equivalents;

 

(c)           Guarantee Obligations permitted by Section 7.2;

 

(d)           loans and advances to employees, directors and officers of any Group
Member in the ordinary course of business (including for travel, entertainment
and relocation expenses);

 

(e)           intercompany Investments by (i) any Group Member in the Borrower
or any Person that, prior to such investment, is a Subsidiary Guarantor, (ii) any
Foreign Subsidiary of the Borrower to any other Foreign Subsidiary of the
Borrower, (iii) Borrower or any Restricted Subsidiary in UNOL Intermediate, Inc.
or any of its Subsidiaries in an amount outstanding not to exceed $15,000,000
(excluding the acquisition of Target) on a trailing 12 month basis so long as
no Default or Event of Default shall have occurred and be continuing (including
pro forma compliance with the financial covenants set forth in Section 7.1
to give effect to such Investment) after making such Investment, and (iv) Borrower
or any Subsidiary Guarantor in any Restricted Subsidiary that is not a
Subsidiary Guarantor in an aggregate amount not to exceed $7,500,000 at any
time outstanding;

 

(f)            Investments in the ordinary course of
business consisting of endorsements of negotiable instruments for collection or
deposit;

 

(g)           Investments received in settlement of amounts due to Borrower or any
Restricted Subsidiary effected in the ordinary course of business paid to
Borrower or any Restricted Subsidiaries as a result of Insolvency proceedings
involving an account debtor or upon the foreclosure or enforcement of any Lien
in favor of Borrower or the Restricted Subsidiaries, or upon the settlement of
delinquent accounts and disputes with customers or suppliers;

 

(h)           in addition to Investments otherwise expressly permitted by this
Section, Investments (other than Investments in any Excluded Subsidiaries) by
Borrower or any Restricted Subsidiaries in an aggregate amount outstanding not
to exceed $5,000,000 during the term of this Agreement;

 

(i)            Investments outstanding on the date hereof
and listed on Schedule 7.8(i);

 

46

 

(j)            any Group Member may (i) acquire and
hold accounts receivables owing to any of them if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary terms, (ii) invest in, acquire and hold cash and Cash
Equivalents, (iii) endorse negotiable instruments held for collection in
the ordinary course of business or (iv) make lease, utility, insurance
premium and other similar deposits in the ordinary course of business;

 

(k)           acquisitions by the Borrower or any Restricted Subsidiary of all of the
outstanding Capital Stock of Persons or of assets constituting an ongoing
business (each a “Permitted Acquisition”) in an amount not to exceed
$30,000,000 (plus any equity of the Borrower issued in connection with such
Permitted Acquisition and proceeds of equity issued by the Borrower after the
Closing Date) in the aggregate during the term of this Agreement; provided
that not more than $7,500,000 (plus any equity of the Borrower issued in
connection with such Permitted Acquisition and proceeds of equity issued by the
Borrower after the Closing Date) of such Permitted Acquisition is made by a
Subsidiary other than the Borrower or a Subsidiary Guarantor or is an
acquisition of a foreign Person or is a business engaged in business activities
not conducted primarily within the United States; provided  further
that (i) each such Permitted Acquisition is of a Person or ongoing
business engaged in business activities in which the acquiror is permitted to
engage pursuant to Section 7.16; (ii) any domestic Person so
acquired complies with the other requirements of Section 6.11 and
the Security Documents are satisfied within the applicable time periods set
forth therein; and (iii) no Default or Event of Default has occurred or is
continuing both before and after giving effect to such Permitted Acquisition
and after giving effect to each such Permitted Acquisition, the Loan Parties
shall be in pro forma compliance with the
covenants and agreements set forth in this Agreement (including Section 7.1);

 

(l)            Investments in UNOLA Corp. to finance the
transactions contemplated by the Merger Agreement, including the payment of
consideration to Target’s shareholders, the refinancing, repayment, purchase or
defeasance of Indebtedness of Target and its Subsidiaries to provide working
capital to Target on the date of the Acquisition and to pay fees and expenses
related to the Merger, the financings related to the Merger and the repurchase
and defeasance of Indebtedness in connection therewith; and

 

(m)          Investments in connection with the acquisition of a company previously
disclosed to the Administrative Agent (redacted for confidentiality purposes)
in an aggregate amount not to exceed $1,000,000.

 

The amount of any Investment
shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment; provided
that the amount of any Investment shall be reduced by the amount of all cash
payments received with respect thereto, whether as principal, interest,
dividends, repayments or otherwise.

 

7.9  Optional Payments and Modifications of
Certain Preferred Stock and Debt Instruments.  (a)  Amend, modify, waive
or otherwise change, or consent or agree to any amendment, modification, waiver
or other change to, any of the terms of the Preferred Stock (i) that would
move to an earlier date the scheduled redemption date or increase the amount of
any scheduled redemption payment or increase the rate or move to an earlier
date any date for payment of dividends thereon or (ii) that would be
otherwise materially adverse to any Lender or any other Secured Party; or (b) amend,
modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of any Subordinated
Indebtedness permitted by Section 7.2 that would shorten the
maturity (to a date earlier than 90 days following the Maturity Date) or
increase the amount of any payment of principal (to a date earlier than 90 days
following the Maturity Date) thereof or the rate of interest thereon prior to a
date earlier than 90 days following the Maturity Date or shorten any date for
payment of interest thereon 

 

47

 

(to a date earlier than 90
days following the Maturity Date) or that would be otherwise materially adverse
to any Lender or any other Secured Party.

 

7.10  Transactions with Affiliates. 
Enter into any transaction, including any purchase, sale, lease or
exchange of property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Restricted Subsidiary) unless such transaction is upon fair and
reasonable terms no less favorable to the relevant Group Member than it would
obtain in a comparable arm’s length transaction with a Person that is not an
Affiliate; provided  that the foregoing restriction shall not
apply to:

 

(a)           Investments permitted by Section 7.8;

 

(b)           Restricted Payments permitted by Section 7.6;

 

(c)           indemnification payments (including reimbursement of fees and expenses)
to officers, directors, employees or consultants of Borrower or any of its
Subsidiaries);

 

(d)           employment agreements, employee benefit plans, officer or director
indemnification agreements or any similar arrangements entered into by Borrower
or any of its Subsidiaries in the ordinary course of business;

 

(e)           marketing, advertising and cross promotional arrangements regarding the
promotion and sale of products and services of Borrower or any of its
Subsidiaries, on one side, and the promotion and sale of products and services
of (x) Target or any of is Subsidiaries, on the other side or (y) following
a Classmates IPO, Classmates or any of its Subsidiaries, on the other side;

 

(f)            agreements among Borrower and its
Subsidiaries with respect to good faith allocations of expenses relating to,
and cost sharing arrangements relating to, general and administrative matters;

 

(g)           transactions involving consideration of $2,000,000 in the aggregate or
less per annum;

 

(h)           any tax sharing agreements entered by a Group Member with any of its
direct or indirect Subsidiaries; provided  that all such
agreements allocate among the parties thereto proportionately each such party’s
relative contribution to Borrower’s consolidated tax liabilities; and

 

(i)            the existence of, or performance by Borrower
or any of its Subsidiaries of its obligations under the terms of the Merger Agreement
as in existence on the date hereof.

 

7.11  Sale Leaseback Transactions. 
Enter into any Sale Leaseback Transaction.

 

7.12  Swap Agreements. 
Enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which Borrower or any Restricted Subsidiary
has actual exposure and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of Borrower or any
Restricted Subsidiary.

 

7.13  Changes in Fiscal Periods. 
Permit the fiscal year of Borrower to end on a day other than December 31
or change the Borrower’s method of determining fiscal quarters.

 

48

 

7.14  Negative Pledge Clauses. 
Enter into or suffer to exist or become effective any agreement that
prohibits or limits the ability of any Loan Party to create, incur, assume or
suffer to exist any Lien upon any of its property or revenues, whether now
owned or hereafter acquired, to secure its obligations under the Loan Documents
to which it is a party other than (a) this Agreement and the other Loan
Documents, (b) any agreements governing any purchase money Liens or
Capital Lease Obligations otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the assets financed
thereby), (c) any agreements evidencing Indebtedness secured by Liens permitted
hereunder, (d) provisions restricting Liens on assets of and interests in
joint ventures, (e) customary restrictions and conditions contained in any
agreement governing Indebtedness or Liens permitted under Sections 7.3(c),
7.3(d), 7.3(f), 7.3(q) and 7.3(r), (f) customary
restrictions on the assignment of leases, licenses and other agreements, (g) any
agreement (i) prohibiting only the creation of Liens securing Subordinated
Indebtedness or (ii) containing an “equal and ratable” clause, and (h) any
agreement evidencing an asset sale, as to the assets being sold.

 

7.15  Clauses Restricting Subsidiary Distributions. 
Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary of the
Borrower to (a) make Restricted Payments in respect of any Capital Stock
of such Restricted Subsidiary held by, or pay any Indebtedness owed to, the
Borrower or any Restricted Subsidiary, (b) make loans or advances to, or
other Investments in, the Borrower or any Restricted Subsidiary or (c) transfer
any of its assets to the Borrower or any Restricted Subsidiary, except for such
encumbrances or restrictions existing under or by reason of:

 

(a)           any restrictions existing under the Loan Documents;

 

(b)           any restrictions with respect to a Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary;

 

(c)           customary restrictions on the assignment of leases, licenses and other
agreements;

 

(d)           any restriction with respect to any Liens permitted hereunder or any
other Loan Document;

 

(e)           as to transfers of assets, as may be provided in an agreement with
respect to a sale of such assets;

 

(f)            encumbrances or restrictions relating to
joint ventures; and

 

(g)           restrictions of the nature referred to in clause (c) above under
agreements governing purchase money liens or Capital Lease Obligations
otherwise permitted hereby which restrictions are only effective against the
assets financed thereby.

 

7.16        Lines of Business.  Enter into any principal line of business,
either directly or through any Restricted Subsidiary, except for those
businesses in which Borrower or any Subsidiary is engaged on the date of this
Agreement or that are reasonably related or ancillary thereto.

 

7.17  Amendments to Organizational Agreements and
Material Contracts.  No Loan Party shall terminate, amend,
supplement or otherwise modify any of its organizational documents (including (x) by
the filing or modification of any certificate of designation and (y) any
election to treat any Equity Interests described in the Guarantee and
Collateral Agreement as a “security” under 

 

49

 

Section 8-103 of the
UCC other than concurrently with the delivery of certificates representing such
Equity Interests to the Administrative Agent) or any agreement to which it is a
party with respect to its Equity Interests (including any stockholders’
agreement), or enter into any new agreement with respect to its Equity
Interests, other than any such amendments, supplements or other modifications
or such new agreements which are not materially adverse to the interests of the
Lenders.

 

7.18  Anti-Terrorism Law. 
Directly or indirectly, (i) knowingly conduct any business or
engage in making or receiving any contribution of funds, goods or services to
or for the benefit of any Designated Person, (ii) knowingly deal in, or
otherwise knowingly engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order or any other
Anti-Terrorism Law, or (iii) knowingly engage in or knowingly conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law (and each of the Group Members shall deliver to the Lenders
any certification or other evidence requested from time to time by
Administrative Agent in its reasonable discretion, confirming the Group Members’
compliance with this Section 7.18).

 

7.19  Embargoed Person.  Fail
to ensure that none of the funds or assets of the Group Members that are used
to repay the Obligations shall, to the knowledge of any Group Member,
constitute property of, or shall be beneficially owned directly or indirectly
by, any Person subject to sanctions or trade restrictions under United States
law (“Embargoed Person” or “Embargoed Persons”) that is
identified on (i) the “List of Specially Designated Nationals and
Blocked Persons” maintained by OFAC, and/or to the knowledge of any Group
Member, as of the date thereof, on any other similar list (“Other List”)
maintained by OFAC pursuant to any authorizing statute including, but not limited
to, the International Emergency Economic Powers Act, 50 U.S.C.  §§ 1701 et seq., The Trading with the Enemy
Act, 50 U.S.C.  App. 1 et seq., and any
Executive Order or regulation promulgated thereunder, with the result that the
investment in any Group Member (whether directly or indirectly) is prohibited
by law, or the Loans made by the Lenders would be in violation of law, or (ii) the
Executive Order, any related enabling legislation or any other similar
Executive Orders (collectively, “Executive Orders”).

 

7.20  Anti-Money Laundering.  No Group
Member shall knowingly use any funds derived from any unlawful activity to
repay the Loans or other Obligations, the repayment of which causes the making
of the Loans to violate any Requirement of Law.

 

SECTION 8.  EVENTS
OF DEFAULT

 

8.1  Events of Default.    If
any of the following events shall occur and be continuing:

 

(a)           the Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan, or any other amount payable hereunder or under any other
Loan Document, within three days after any such interest or other amount
becomes due in accordance with the terms hereof; or

 

(b)           any representation or warranty made by any Loan Party herein or in any
other Loan Document or that is contained in any certificate, document or
financial or other statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or deemed made (or
if any representation or warranty is expressly stated to have been made as of a
specific date, inaccurate in any material respect as of such specific date); or

 

50

 

(c)           any Loan Party shall default in the observance or performance of any
agreement contained in clause (i) of Section 6.4(a) (with
respect to any Guarantor and the Borrower only), Section 6.7(a) or
Section 7 of this Agreement; or

 

(d)           any Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document (other
than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days thereafter; or

 

(e)           (i) any Group Member shall default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation with respect
to Indebtedness, but excluding the Loans) on the scheduled or original due date
with respect thereto; or (ii) any Group Member shall default in making any
payment of any interest on any such Indebtedness beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created; (iii) there occurs under any Swap Agreement an Early Termination
Date (as defined in such Swap Agreement) resulting from (A) any event of
default under such Swap Agreement as to which a Loan Party or any Restricted
Subsidiary thereof is the Defaulting Party (as defined in such Swap Agreement)
or (B) any Termination Event (as so defined) under such Swap Agreement as
to which a Loan Party or any Restricted Subsidiary thereof is an Affected Party
(as so defined); or (iv) any Group Member shall default in the observance
or performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to (x) cause, or to permit
the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf
of such holder or beneficiary) to cause such Indebtedness to become due prior
to its stated maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable or (y) to cause, with the giving
of notice if required, any Group Member to purchase or redeem  (excluding any such purchase, redemption
or offer relating to asset sales) or make an offer to purchase or redeem such
Indebtedness prior to its stated maturity; provided, that a default,
event or condition described in clause (i), (ii), (iii) or (iv) of
this paragraph (e) shall not at any time constitute an Event of Default
unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii), (iii) or (iv) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $5,000,000; or

 

(f)            (i)  any Group Member shall commence any
case, proceeding or other action (a) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (b) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part
of its assets, or any Group Member shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any
Group Member any case, proceeding or other action of a nature referred to in
clause (i) above that (a) results in the entry of an order for relief
or any such adjudication or appointment or (b) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Group Member any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets that results in the entry of an order
for any such relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) any
Group Member shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or

 

51

 

(g)           (i)  any Person shall engage in any “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any failure to satisfy the minimum funding
standards under the Pension Funding Rules, whether or not waived in accordance
with the Pension Funding Rules, shall exist with respect to any Plan or any
Lien in favor of the PBGC or a Single Employer Plan shall arise on the assets
of any Group Member or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Single Employer
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) any Group Member or
any Commonly Controlled Entity shall incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan
or (vi) any other event or condition shall occur or exist with respect to
a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if any,
could, in the reasonable judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or

 

(h)           one or more judgments or decrees shall be entered against any Group
Member involving in the aggregate a liability (not paid or fully covered by
insurance) of $5,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within sixty
(60) days from the entry thereof; or

 

(i)            any of the Security Documents shall cease,
for any reason, to be in full force and effect (except in accordance with the
terms thereof and hereof), or any Loan Party shall so assert, or any material
Lien created by any of the Security Documents shall cease to be enforceable and
of the same effect and priority (subject to Liens permitted hereunder)
purported to be created thereby; or

 

(j)            the guarantee contained in Section 2
of the Guarantee and Collateral Agreement shall cease, for any reason (except
in accordance with the terms thereof and hereof), to be in full force and
effect or any Loan Party shall so assert; or

 

(k)           a Change of Control shall occur; or

 

then, and in any such event,
subject to the agreements set forth in the Side Letter between Borrower and SVB
dated July 3, 2008 (the “Side Letter”),
(a) if such event is an Event of Default specified in clause (i) or (ii) of
paragraph (f) above with respect to the Borrower, the Commitments shall
immediately terminate automatically and the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents shall automatically immediately become due and payable, and (b) if
such event is any other Event of Default, with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall declare the Loans (with accrued
interest thereon) and all other amounts owing under this Agreement and the
other Loan Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrower.

 

SECTION 9.  THE
ADMINISTRATIVE AGENT

 

9.1  Appointment and Authority.

 

(a)           Each of the Lenders hereby irrevocably appoints SVB to act on its
behalf as the Administrative Agent hereunder and under the other Loan Documents
and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the 

 

52

 

Administrative Agent by the
terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.

 

(b)           The provisions of Section 9 (excluding Section 9.9)
are solely for the benefit of the Administrative Agent and the Lenders, and
neither the Borrower nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions. 
Notwithstanding any provision to the contrary elsewhere in this Agreement,
the Administrative Agent shall not have any duties or responsibilities to any
Lender or any other Person, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

 

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

 

9.3  Exculpatory Provisions.  The
Administrative Agent shall have no duties or obligations except those expressly
set forth herein and in the other Loan Documents.  Without limiting the generality of the
foregoing, the Administrative Agent shall not:

 

(a)           be subject to any fiduciary or other implied duties, regardless of
whether any Default or any Event of Default has occurred and is continuing;

 

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

 

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

 

The Administrative Agent
shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Section 10.1) or (ii) in the absence of its own
gross negligence or willful misconduct.

 

The Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of 

 

53

 

any of the covenants, agreements or other terms or conditions set forth
herein or therein or the occurrence of any Default or Event of Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Section 5 or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 

9.4  Reliance by the Administrative Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, internet or intranet website posting or other distribution) believed
by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person.  The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon.  In
determining compliance with any condition hereunder to the making of a Loan,
that by its terms must be fulfilled to the satisfaction of a Lender, the
Administrative Agent may presume that such condition is satisfactory to such
Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender prior to the making of such Loan.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.  The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. 
The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders (or such
other number or percentage of Lenders as shall be provided for herein or in the
other Loan Documents) as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.  The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or such other number or percentage of Lenders as shall be
provided for herein or in the other Loan Documents), and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and all future holders of the Loans.

 

9.5  Notice of Default.  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Administrative Agent
has received notice from a Lender, any Guarantor or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default”.  In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders.  The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action or refrain from taking such action with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.

 

9.6  Non-Reliance on the Administrative Agent and
Other Lenders.  Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys in fact or affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of a Group Member or any affiliate of a
Group Member, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. 
Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such 

 

54

 

documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Group Members and
their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement.  Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Group Members and
their affiliates.  Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative Agent shall have no
duty or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Group Member or any affiliate
of a Group Member that may come into the possession of the Administrative Agent
or any of its officers, directors, employees, agents, attorneys in fact or
affiliates.

 

9.7  Indemnification.  Each
of the Lenders agrees to indemnify the Administrative Agent in its capacity as
such (to the extent not reimbursed by any Guarantor, the Borrower or any other
Loan Party and without limiting the obligation of any Guarantor, the Borrower
or any other Loan Party to do so, according to its Term Percentage in effect on
the date on which indemnification is sought under this Section 9.7
(or, if indemnification is sought after the date upon which the Commitments
shall have terminated and the Loans shall have been paid in full, in accordance
with its Term Percentage immediately prior to such date), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (whether before or after the payment of the Loans) be imposed
on, incurred by or asserted against the Administrative Agent in any way relating
to or arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
primarily from the Administrative Agent’s gross negligence or willful
misconduct.  The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.

 

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

 

9.9  Successor Administrative Agent.  The
Administrative Agent may at any time give notice of its resignation to the
Lenders and the Borrower.  Upon receipt
of any such notice of resignation, the Required Lenders shall have the right
subject to the prior approval of Borrower, unless an Event of Default has then
occurred and is continuing, to appoint a successor acceptable to the Borrower,
which shall be a bank with an office in the State of California, or an
Affiliate of any such bank with an office in the State of California.  If no such successor shall have been so
appointed by the Required Lenders and 

 

55

 

shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above provided that
if the retiring Administrative Agent shall notify the Borrower and the Lenders
that no qualifying Person has accepted such appointment, then such resignation
shall nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Secured Parties under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed and such collateral
security is assigned to such successor Administrative Agent) and (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this paragraph.  Upon the acceptance of a successor’s
appointment as the Administrative Agent hereunder, such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this paragraph).  The fees
payable by the Borrower to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor.  After the
retiring Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of Section 9 and Section 10.5
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as the Administrative Agent.

 

SECTION 10.  MISCELLANEOUS

 

10.1  Amendments and Waivers.

 

(a)           Neither this Agreement, any other Loan Document, nor any terms hereof
or thereof may be amended, supplemented or modified except in accordance with
the provisions of this Section 10.1.  The Required Lenders and each Loan Party to
the relevant Loan Document may, or, with the written consent of the Required
Lenders, the Administrative Agent and each Loan Party to the relevant Loan
Document may, from time to time, (i) enter into written amendments,
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (ii) waive, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall (A) forgive the principal amount or extend the final
scheduled date of maturity of any Loan, extend the scheduled date of any
scheduled amortization payment in respect of any Loan, reduce the stated rate
of any interest or fee payable hereunder (except that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or fees for purposes
of this clause (A)), in each case without the written consent of each Lender
directly affected thereby; (B) eliminate or reduce the voting rights of
any Lender under this Section 10.1 without the written consent of
such Lender; (C) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their obligations under the
Guarantee and Collateral Agreement, in each case without the written consent of
all Lenders; (D) amend, modify or

 

56

 

waive the pro rata
requirements of Section 2.12 in a manner that adversely affects
Lenders without the written consent of each Lender directly affected thereby;
or (E) amend, modify or waive any provision of Section 9
without the written consent of the affected Agent.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Administrative Agent and all
future holders of the Loans.  In the case
of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall
be restored to their former position and rights hereunder and under the other
Loan Documents, and any Default or Event of Default waived shall be deemed to
be cured and not continuing during the period such waiver is effective; but no
such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.

 

(b)           Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders, the
Administrative Agent, the Borrower, (i) to
add one or more additional credit facilities to this Agreement and to permit
the extensions of credit from time to time outstanding thereunder and the
accrued interest and fees in respect thereof to share ratably in the benefits
of this Agreement and the other Loan Documents with the Loans and the accrued
interest and fees in respect thereof and (ii) to include appropriately the
Lenders holding such credit facilities in any determination of the Required
Lenders.

 

(c)           If, in connection with any proposed change, waiver, discharge or
termination of the provisions of this Agreement as contemplated by Section 10.1,
the consent of the Required Lenders is obtained but the consent of one or more
of such Lender whose consent is required is not obtained, then Borrower shall
have the right to replace all, but not less than all, of such non-consenting
Lender or Lenders (so long as all non-consenting Lenders are so replaced) with
one or more persons pursuant to Section 2.13(d) so long as at the
time of such replacement each such new Lender consents to the proposed change,
waiver, discharge or termination.  Each
Lender agrees that, if Borrower elects to replace such Lender in accordance
with this Section, it shall promptly execute and deliver to the Administrative
Agent an Assignment and Assumption to evidence such sale and purchase and shall
deliver to the Administrative Agent any Note (if Notes have been issued in
respect of such Lender’s Loans) subject to such Assignment and Assumption; provided
that the failure of any such non-consenting Lender to execute an Assignment and
Assumption shall not render such sale and purchase (and the corresponding
assignment) invalid and such assignment shall be recorded in the Register.

 

10.2  Notices.  All notices, requests and
demands (including with respect to Collateral and prepayments) to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:

 

	
  Borrower:

  	
  United
  Online, Inc.

  21301 Burbank Boulevard

  Woodland
  Hills, California 91367

  Attention:  Chief Financial Officer

  Facsimile No.: (818) 287-3011

  Email:  SRay@corp.untd.com

  

 

57

 

	
  Administrative Agent:

  	
  Silicon Valley Bank

  5820 Canoga Avenue, #210

  Woodland Hills, California
  91367

  Attention:  Mark Turk

  Facsimile No.: (818)
  340-0395

  Email: mturk@svb.com

  

 

Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative
Agent; provided that the foregoing shall not apply to notices pursuant
to Section 2 unless otherwise agreed by the Administrative Agent
and the applicable Lender.  The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such
procedures may be limited to particular notices or communications.  Unless the Administrative Agent otherwise
prescribes, (a) notices and other communications sent to an email address
shall be deemed received upon the sender’s receipt of an acknowledgment from
the intended recipient (such as by the “return receipt requested” function, as
available, return email or other written acknowledgment), provided that
if such notice or other communication is not sent during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been sent at the opening of business on the next Business Day for the
recipient, and (b) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its email address as described in the foregoing clause (a) of
notification that such notice or communication is available and identifying the
website address therefor.

 

10.3  No Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. 
The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

 

10.4  Survival of Representations and Warranties.  All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.

 

10.5  Payment of Expenses and Taxes.  The
Borrower agrees (a) to pay or reimburse the Administrative Agent for all
its reasonable, documented out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to the
Administrative Agent and filing and recording fees and expenses, with
statements with respect to the foregoing to be submitted to the Borrower prior
to the Closing Date (in the case of amounts to be paid on the Closing Date) and
from time to time thereafter on a quarterly basis or such other periodic basis
as the applicable  Agent shall deem
appropriate, (b) to pay or reimburse each Lender and the Administrative
Agent for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including the fees and disbursements of
counsel (including the allocated fees and expenses of in-house counsel) to each
Lender and of counsel to the Administrative Agent, (c) to pay, indemnify,
and hold each Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with 

 

58

 

respect to, or resulting from any delay in paying, stamp, excise and
other taxes excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) which do not constitute Non-Excluded Taxes or Other Taxes, if
any, that may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and
hold each Lender and the Administrative Agent and their respective officers,
directors, employees, affiliates, agents and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses
(other than losses on the trading value of the Loans), damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to or arising out of or in connection with the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents (regardless of
whether any Indemnitee is a party hereto and regardless or whether any such
matter is initiated by a third party, the Borrower, any other Loan Party or any
other Person), including any of the foregoing relating to the use of proceeds
of the Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Group Member or any of
the Properties and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”), provided, that the
Borrower shall have no obligation hereunder to any Indemnitee with respect to
Indemnified Liabilities to the extent such Indemnified Liabilities are
determined by a final judgment of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee, or
breach of the terms of the Loan Documents by such Indemnitee.  Without limiting the foregoing, and to the
extent permitted by applicable law, the Borrower agrees not to assert and to cause
its Restricted Subsidiaries not to assert, and hereby waives and agrees to
cause its Restricted Subsidiaries to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee (except those resulting from the
gross negligence or willful misconduct of such Indemnitee, or breach of the
terms of the Loan Documents by such Indemnitee).  All amounts due under this Section 10.5
shall be payable not later than 10 days after written demand therefor.  The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.

 

10.6  Successors and Assigns; Participations and
Assignments.

 

(a)           The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void).

 

(b)           (i)            Subject to the conditions set forth below in Section 10.6(b)(ii),
any Lender may assign to one or more banks, mutual funds or financials
institutions or entities (each, an “Assignee”) all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans at the time owing to it) with the prior written
consent of:

 

(A)          the Administrative Agent (such consent not to be unreasonably withheld
or delayed);

 

(B)           the Borrower (such consent not be unreasonably withheld or delayed); provided
that the consent of the Borrower shall not be required to any 

 

59

 

assignment (i) during
the continuance of any Default or Event of Default, or (ii) to a Lender or
an Affiliate of a Lender.

 

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

 

(A)          except in the case of an assignment to a
Lender, an affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Commitments or Loans under
the Facility, the amount of the Commitments or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $1,000,000 (provided that simultaneous
assignments to or by two or more Approved Funds shall be aggregated for
purposes of determining such amount), unless each of the Borrower and the
Administrative Agent otherwise consent; provided that no such consent of
the Borrower shall be required if an Event of Default has occurred and is
continuing;

 

(B)           the parties to each assignment of all or a portion of any Commitment or
Loans shall (1) electronically execute and deliver to the Administrative
Agent an Assignment and Assumption via an electronic settlement system
acceptable to the Administrative Agent or (2) manually execute and deliver
to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, payable by the assigning or assignee
Lender as they shall mutually agree; and

 

(C)           the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire.

 

(D)          Any assignment or participation (or prospects thereof) prior to the
earlier to occur of (i) 90 days following the date of the Acquisition and (ii) the
termination of the Merger Agreement shall be coordinated with Wells Fargo Bank,
National Association.

 

For the purposes of this Section 10.6,
the term “Approved Fund” means any Person (other than a natural person)
that is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

 

(iii)          Subject to acceptance and recording thereof pursuant to Section 10.6(b)(iv) below,
from and after the effective date specified in each Assignment and Assumption
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.13, 2.14, 2.15 and 10.5).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 10.6(c).

 

(iv)          The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders and Participants, and the 

 

60

 

Commitments of, and principal amount of the Loans owing to, each Lender
or Participant pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(v)           Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an Assignee, the Assignee’s completed administrative
questionnaire (unless the Assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in Section 10.6(b) and
any written consent to such assignment required by Section 10.6(b) (in
each case to the extent required), the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

(vi)          (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights
and obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative
Agent and the Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that
such agreement may provide that such Lender will not, without the consent of
the Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 10.1(a) and (2) directly
affects such Participant.  Subject to Section 10.6(c)(ii),
the Borrower agrees that each Participant shall be entitled to the benefits and
subject to the obligations of Sections 2.13, 2.14 and 2.15
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 10.6(b).  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.7(b) as
though it were a Lender, provided such Participant shall be subject to Section 10.7(a) as
though it were a Lender. Notwithstanding anything to the contrary herein, a
Participant shall not be entitled to any of the benefits provided in this
paragraph until such time that the name and address of such Participant has
been recorded in the Register as provided in clause (iv) above.

 

(ii)           A Participant shall not be entitled to receive any greater payment
under Section 2.13,  2.14
or 2.15 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written
consent.  A Participant shall not be
entitled to the benefits of Section 2.14 unless such Participant
complies with Section 2.14(d) and (e).

 

(c)           Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such
Lender as a party hereto.

 

61

 

(d)           The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in Section 10.6(d) above.

 

(e)           Each Lender, upon execution and delivery hereof or upon succeeding to
an interest in the Commitments or Loans, as the case may be, represents and
warrants as of the Closing Date or as of the effective date of the applicable
Assignment and Assumption that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in commitments,
loans or investments such as the Commitments and Loans; and (iii) it will
make or invest in its Commitments and Loans for its own account in the ordinary
course of its business and without a view to distribution of such Commitments
and Loans within the meaning of the Securities Act or the Securities Exchange
Act of 1934, or other federal securities laws (it being understood that,
subject to the provisions of this Section 10.6, the disposition of
such Commitments and Loans or any interests therein shall at all times remain
within its exclusive control).

 

10.7  Adjustments; Set-off.

 

(a)           Except to the extent that this Agreement expressly provides for
payments to be allocated to a particular Lender or to the Lenders under the
Facility, if any Lender (a “Benefitted Lender”) shall, at any time after
the Loans and other amounts payable hereunder shall immediately become due and
payable pursuant to Section 8, receive any payment of all or part
of the Obligations owing to it, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such Benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of the Obligations owing
to each such other Lender, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.

 

(b)           In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to
set off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of  the Borrower.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender; provided that the failure to give such notice shall
not affect the validity of such setoff and application.

 

10.8  Counterparts.  This
Agreement may be executed by one or more of the parties to this Agreement on
any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of
this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.  A
set of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.

 

62

 

10.9  Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.

 

10.10  Integration.  This Agreement, the Side
Letter and the other Loan Documents represent the entire agreement of the
Borrower, the Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender relative
to the subject matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.

 

10.11  GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.

 

10.12  Submission To Jurisdiction; Waivers.  Each
party hereto hereby irrevocably and unconditionally:

 

(a)           submits to the exclusive jurisdiction of the State and Federal courts
in the Northern District of the State of California; provided, however,
that nothing in this Agreement shall be deemed to operate to preclude the
Administrative Agent or any Lender from bringing suit or taking other legal
action in any other jurisdiction to realize on the Collateral or any other
security for the Obligations, or to enforce a judgment or other court order in
favor of the Administrative Agent or such Lender;

 

(b)           expressly submits and consents in advance to such jurisdiction in any
action or suit commenced in any such court, and hereby waives any objection
that they 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;

 

(c)           waives personal service of the summons, complaints, and other process
issued in 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 such party at the addresses set forth in Section 10.2
of this Agreement and that service so made shall be deemed completed upon the
earlier to occur of such party’s actual receipt thereof or three (3) days
after deposit in the U.S. mails, proper postage prepaid;

 

(d)           TO THE EXTENT PERMITTED BY
APPLICABLE LAW, WAIVES THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR
ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER
INTO THIS AGREEMENT.  EACH PARTY HAS
REVIEWED THIS WAIVER WITH ITS COUNSEL;

 

(e)           WITHOUT INTENDING IN ANY WAY TO LIMIT ANY PARTY’S AGREEMENT TO WAIVE
ITS RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a
trial by jury is not enforceable, agrees that any and all disputes or
controversies of any nature between them arising at any time shall be decided
by a reference to a private judge, mutually selected by the Borrower, the
Administrative Agent and the Lenders (or, if they cannot agree, by the
Presiding Judge in the Northern District of the State of California) appointed
in accordance with 

 

63

 

California Code of Civil Procedure Section 638 (or pursuant to
comparable provisions of federal law if the dispute falls within the exclusive
jurisdiction of the federal courts), sitting without a jury, in the Northern
District of the State of California; and the parties hereby submit to the
jurisdiction of such court.  The
reference proceedings shall be conducted pursuant to and in accordance with the
provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive.  The private judge shall have the power, among
others, to grant provisional relief, including without limitation, entering
temporary restraining orders, issuing preliminary and permanent injunctions and
appointing receivers.  All such
proceedings shall be closed to the public and confidential and all records
relating thereto shall be permanently sealed. 
If during the course of any dispute, a party desires to seek provisional
relief, but a judge has not been appointed at that point pursuant to the judicial
reference procedures, then such party may apply to the in the Northern District
of the State of California for such relief. The proceeding before the private
judge shall be conducted in the same manner as it would be before a court under
the rules of evidence applicable to judicial proceedings.  The parties shall be entitled to discovery
which shall be conducted in the same manner as it would be before a court under
the rules of discovery applicable to judicial proceedings. The private
judge shall oversee discovery and may enforce all discovery rules and
order applicable to judicial proceedings in the same manner as a trial court
judge.  The parties agree that the
selected or appointed private judge shall have the power to decide all issues
in the action or proceeding, whether of fact of law, and shall report a
statement of decision thereon pursuant to the California Code of Civil
Procedure § 644(a).  Nothing in this
paragraph shall limit the right of the Administrative Agent or any Lender at
any time to exercise self-help remedies, foreclose against collateral, or
obtain provisional remedies in each case to the extent under the Loan Documents
and applicable law.  The private judge
shall also determine all issues relating to the applicability, interpretation
and enforceability of this paragraph; and

 

(f)            waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive or
consequential damages.

 

10.13  Acknowledgements.  The
Borrower hereby acknowledges that:

 

(a)           it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;

 

(b)           none of the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Administrative Agent and Lenders, on one hand, and the Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

 

(c)           no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and the Lenders.

 

10.14  Releases of Guarantees and Liens.

 

(a)           Notwithstanding anything to the contrary contained herein or in any
other Loan Document, upon the consummation of any transaction not prohibited by
any Loan Document (including any sale or other disposition of Collateral or
sale of Capital Stock of a Guarantor) or that has been consented to in
accordance with Section 10.1, Administrative Agent’s security
interest in such Collateral or the Guarantee Obligation of such Subsidiary
Guarantor, as applicable, shall be automatically released without any further
act or action by Administrative Agent or the Lenders simultaneously with the
consummation of such sale or other disposition; provided  however,
in connection therewith, a Loan Party 

 

64

 

may not file a termination
or release, as applicable, without the Administrative Agent’s authorization,
which shall be provided upon such Loan Party’s request and at such Loan Party’s
expense.  The Administrative Agent is
hereby irrevocably authorized by each Lender (without requirement of notice to
or consent of any Lender except as expressly required by Section 10.1)
to take any other action requested by the Borrower having the effect of
releasing any Collateral or guarantee obligations (1) in respect of any
transaction not prohibited by any Loan Documents (including any sale or
disposition of Collateral or sale of Capital Stock of a Guarantor) or that has
been consented to in accordance with Section 10.1 or (2) under
the circumstances described in Section 10.14(b) and (c) below.

 

(b)           At such time as the Loans and the other obligations under the Loan
Documents shall have been paid in full and the Commitments have been
terminated, the Collateral shall be released from the Liens created by the
Security Documents, and the Security Documents and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Loan Party under the Security Documents shall terminate, all without
delivery of any instrument or performance of any act by any Person.

 

(c)           Notwithstanding anything to the contrary contained herein or in any
other Loan Document, upon the consummation of the Classmates IPO, Classmates
and its Subsidiaries shall be automatically released from the Loan Documents
and shall have no further liability thereunder. 
The Guarantee Obligations of Classmates and its Subsidiaries under the
Loan Documents shall automatically be released and all Liens granted by Classmates
and its Subsidiaries to secure the Obligations or under any Loan Document shall
automatically terminate.

 

(d)           The Administrative Agent agrees, for the benefit of the Borrower and
its Subsidiaries, to take such actions, at the Borrower’s expense, as the
Borrower may reasonably request, to terminate and release the Guarantee
Obligations and Liens entitled to be terminated and released as provided in
this Section 10.14 (and to evidence such termination and release),
including filing UCC3 termination statements, terminating control agreements
and taking such other actions as may be reasonably requested by the Borrower; provided
however, in connection therewith, a Loan Party may not file a
termination or release, as applicable, without the Administrative Agent’s
authorization, which shall be provided upon such Loan Party’s request and at
such Loan Party’s expense.

 

(e)           The Administrative Agent agrees to take such actions as the Borrower
may reasonably request to release and terminate its Liens on any assets subject
to Liens permitted under Sections 7.3(c), (d), (g), (q) and
(r) (to the extent the Administrative Agent’s Lien is prohibited
thereunder).

 

10.15  Confidentiality.  The
Administrative Agent and each Lender agrees to keep confidential all non-public
information provided to it by any Loan Party, the Administrative Agent or any
Lender pursuant to or in connection with this Agreement that is designated by
the provider thereof as confidential; provided that nothing herein shall
prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other Lender or any
affiliate thereof (to the extent such affiliate is bound by the terms hereof), (b) subject
to an agreement to comply with the provisions of this Section, to any actual or
prospective Transferee or any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates (to the extent such affiliate is
bound by the terms hereof), (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access 

 

65

 

to information about a
Lender’s investment portfolio in connection with ratings issued with respect to
such Lender, or (i) in connection with the exercise of any remedy hereunder
or under any other Loan Document.

 

10.16  Patriot Act.  Each Lender and the
Administrative Agent (for itself and not on behalf of any other party) hereby
notifies the Borrower that, pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the names and addresses and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Patriot Act.  The Borrower will, and will cause the
Restricted Subsidiaries to, provide, to the extent commercially reasonable or
required by any Requirement of Law, such information and take such actions as
are reasonably requested by the Administrative Agent or any Lender to assist
the Administrative Agent and the Lenders in maintaining compliance with the
Patriot Act.

 

10.17  Publicity and Related Matters. 
Borrower consents to the publication and use by SVB Financial Group and
any of its member businesses and Affiliates of (i) Borrower’s name and
logo and a hyperlink to Borrower’s web site, separately or together, in written
and oral presentations, advertising, promotional and marketing materials,
client lists, public relations materials or on its web site (together, the “Publicity
Materials”) and (ii) Borrower’s name, trademarks and servicemarks in
any news release concerning Borrower, provided, that Administrative Agent shall
provide a draft of any such news release to Borrower prior to the release thereof
for Borrower’s review and approval, such approval not to be unreasonably
withheld.  Administrative Agent reserves
the right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.

 

[Remainder of page left blank intentionally]

 

66

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the day and year first above
written.

 

	
   

  	
  BORROWER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UNITED ONLINE, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/ Mark R. Goldston

  
	
   

  	
   

  	
  Name: Mark R. Goldston

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
				

 

[Signature Page to Credit Agreement]

 

 

	
   

  	
  SILICON VALLEY BANK,

  
	
   

  	
  as Administrative Agent and
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/ Mark Turk

  
	
   

  	
   

  	
  Name: Mark Turk

  
	
   

  	
   

  	
  Title: Senior Relationship
  Manager

  

 

[Signature Page to Credit Agreement]Exhibit 10.30

 

Employee Name:

 

FORM OF

EMPLOYMENT
AGREEMENT

 

This EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered
into this                             
by and between                             
(the “Executive”) and PharmAthene, Inc., a Delaware corporation (the “Company”).

 

W I T N E SS E T H:

 

WHEREAS, the Company
desires to employ the Executive and the Executive desires to accept employment
with the Company subject to the terms and conditions herein agreed upon:

 

NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and obligations
hereinafter set forth, the parties hereto hereby agree as follows:

 

1.                                      Employment;
Term.  The Company hereby agrees to
employ the Executive and the Executive hereby accepts employment with the
Company upon the terms and conditions hereinafter set forth for the period
commencing on                             
(the “Effective Date”) and ending on the
first anniversary of such date.  The term
of this Agreement shall be automatically extended for an additional year on
each anniversary of the date hereof unless written notice of non-extension is
provided by either party to the other party at least 90 days prior to such
anniversary.  The period of the Executive’s
employment under this Agreement, as it may be terminated or extended from time
to time as provided herein is referred to as the “Employment
Period.”

 

2.                                      Position
and Duties.

 

a.              Position and
Duties Generally.  The
Executive shall be employed by the Company in the position of                               
and shall faithfully render such executive, managerial, administrative and
other services as are customarily associated with and incident to such position
and as the Company may from time to time reasonably require consistent with
such position.  The Executive shall
report to                           .

 

b.              Other
Positions.  The Executive
shall hold such other positions and executive offices with the Company and/or
of any of the Company’s subsidiaries or affiliates as may from time to time be
authorized by the Board.  The Executive
shall not be entitled to any compensation other than the compensation provided
for herein for serving during the Employment Period in any other office or
position of the Company or any of its subsidiaries or affiliates, unless the
Compensation Committee specifically approves such additional compensation.

 

c.               Devotion to Employment.  Except
for vacation time taken in accordance with the Company’s vacation policy in
effect from time to time and in accordance with the terms of this Agreement and
for absences due to temporary illness, the Executive shall be a full-time
employee of the Company and shall devote full time, attention and efforts
during the Employment Period to the business of the Company and the duties required
of him in his position.  During the
Employment Period, the Executive shall not be engaged in any other business
activity which, in the reasonable judgment of the Board or its designee,
conflicts with the duties of the Executive hereunder, whether or not such
activity is pursued for gain, profit or other pecuniary advantage.

 

 

Employee Name:

 

3.                                      Compensation;
Reimbursement.

 

a.              Base
Salary.  For the Executive’s
services, the Company shall pay to the Executive an annual base salary of not
less than $                      per annum, payable in
equal periodic installments according to the Company’s customary payroll
practices, but no less frequently than monthly. 
The Executive’s base salary shall be subject to review annually by the
Compensation Committee and shall be subject to increase at the option and sole
discretion of the Compensation Committee.

 

b.              Bonus.  The Executive shall be eligible to receive at
the sole discretion of the Compensation Committee, an annual cash bonus of up
to an additional       % of the Executive’s
base salary.  In addition, the Executive
may be eligible for additional bonuses at the option and sole discretion of the
Compensation Committee based upon based upon the achievement of certain
pre-determined performance milestones.

 

c.               Benefits Generally.

 

i.                 In addition to
the salary and cash bonus described above, the Executive shall be entitled
during the Employment Period to participate in such employee benefit plans and
programs of the Company, and shall be entitled to such other fringe benefits,
as are from time to time made available by the Company generally to employees
of the level, position, tenure, salary, age, health and other qualifications of
the Executive including, without limitation, medical, dental and vision insurance
coverage for the Executive and the Executive’s dependents, disability, death
benefit and life insurance and pension plans.

 

ii.            Without limiting the
generality of the foregoing, the Executive shall be eligible for such awards,
if any, including stock and stock options under the Company’s 2007 Long-Term
Incentive Plan or such other plan as the Company may from time to time put into
effect as shall be granted to the Executive by the Compensation Committee or
other appropriate designee of the Board acting in its sole discretion.

 

iii.         The Executive
acknowledges and agrees that the Company does not guarantee the adoption or
continuance of any particular employee benefit plan and participation by the
Executive in any such plan or program shall be subject to the rules and
regulations applicable thereto.

 

d.              Vacation.  The Executive shall be entitled to               
days of vacation in each calendar year.

 

 

Employee Name:

 

e.               Expenses.  The Company
shall reimburse the Executive in accordance with the practices in effect from
time to time for other officers or staff personnel of the Company for all
reasonable and necessary business and travel expenses and other disbursements
incurred by the Executive for or on behalf of the Company in the performance of
the Executive’s duties hereunder, upon presentation by the Executive to the
Company of appropriate supporting documentation.

 

f.                Perquisites.  The
Executive shall be entitled to those perquisites as the Company shall make
available from time to time to other executive officers of the Company, which
shall include, without limitation, the costs associated with the use of an
automobile in an amount not to exceed $1,000 per month and the costs for
Executive’s use of a cellular telephone and personal digital assistant to the
extent such equipment is used for business purposes.

 

4.                                      Death;
Disability. 
In the event that the Executive dies or is incapacitated or
disabled by accident, sickness or otherwise, so as to render the Executive
mentally or physically incapable of performing the services required to be
performed by the Executive under this Agreement for a period that would entitle
the Executive to qualify for long-term disability benefits under the Company’s
then-current long-term disability insurance program or, in the absence of such
a program, for a period of 120 consecutive days or longer (such condition being
herein referred to as a “Disability”)
then (i) in the case of the Executive’s death, the Executive’s employment
shall be deemed to terminate on the date of the Executive’s death and (ii) in
the case of a Disability, the Company, at its option, may terminate the
employment of the Executive under this Agreement immediately upon giving the
Executive notice to that effect.  The
determination to terminate the Executive in the event of a Disability shall be
made by the Board or the Board’s designee. 
In the case of a Disability, until the Company shall have terminated the
Executive’s employment hereunder in accordance with the foregoing, the
Executive shall be entitled to receive compensation provided for herein
notwithstanding any such physical or mental disability.

 

5.                                      Termination
For Cause.  The Company may terminate
the employment of the Executive hereunder at any time during the Employment
Period for “cause” (such termination being herein referred to as a “Termination for Cause”) by giving
the Executive notice of such termination, which termination shall be effective
on the date of such notice or such later date as may be specified by the
Company.  For purposes of this Agreement,
“Cause” means (i) the Executive’s
willful and substantial misconduct that is materially injurious to the Company
and is either repeated after written notice from the Company specifying the
misconduct or is continuing and not corrected within 20 days after written
notice form the Company specifying the misconduct, (ii) the Executive’s
repeated neglect of duties or failure to act which can reasonably be expected
to affect materially and adversely the business or affairs of the Company after
written notice from the Company specifying the neglect or failure to act, (iii) the
Executive’s material breach of any of the agreements contained in Sections 11,
12, 13 or 14 hereof or of any of the Company’s policies, (iv) the
commission by the Executive of any material fraudulent act with respect to the
business and affairs of the Company, (v) the Executive’s conviction of (or
plea of nolo contendere to) a crime constituting a felony, (vi) demonstrable
gross 

 

 

Employee Name:

 

negligence, or (vii) habitual insobriety
or use of illegal drugs by the Executive while performing the Executive’s
duties under this Agreement which adversely affects the Executives performance
of the Executive’s duties under this Agreement.

 

6.                                      Termination
Without Cause. The Company may terminate the employment of the Executive
hereunder at any time without “cause” or fail to extend this Agreement pursuant
to the terms hereof (such termination being herein referred to as “Termination Without Cause”) by
giving the Executive notice of such termination, upon the giving of which such
termination shall take effect not later than 30 days from the date such notice
is given.

 

7.                                      Voluntary
Termination by Executive. Any termination of the employment of the
Executive by the Executive otherwise than as a result of death or Disability or
for Good Reason (as defined below) (such termination being herein referred to
as “Voluntary Termination”).  A Voluntary Termination will be deemed to be
effective immediately upon such termination.

 

8.                                      Termination
by Executive for Good Reason.  Any
termination of the employment of the Executive by the Executive for Good Reason
which shall be deemed to be equivalent to a Termination without Cause.  For purposes of this Agreement “Good Reason” means (i) any
material breach by the Company of any of its obligations under this Agreement, (ii) any
material reduction in the Executive’s duties, authority or responsibilities
without the Executive’s consent, (iii) any assignment to the Executive of
duties or responsibilities materially inconsistent with the Executive’s
position and duties contained in this Agreement without the Executive’s
consent, (iv) a relocation of the Company’s principal executive offices or
the Company determination to require the Executive to be based anywhere other
than within 25 miles of the location at which the Executive on the date hereof
performs the Executive’s duties; (v) the taking of any action by the
Company which would deprive the Executive of any material benefit plan
(including, without limitation, any medical, dental, disability or life
insurance); or (vi) the failure by the Company to obtain the specific
assumption of this Agreement by any successor or assignee of the Company or any
person acquiring substantially all of the Company’s assets; provided, however,
that the Executive may not terminate the Employment Period for Good Reason
unless the Executive first provides the Company with written notice specifying
the Good Reason and providing the Company with 20 days in which to remedy the
stated reason.

 

9.                                      Effect
of Termination of Employment.

 

a.              Voluntary
Termination; Termination For Cause. Upon the termination of the
Executive’s employment as a result of the Executive’s Voluntary Termination or
a Termination For Cause, the Executive shall not have any further rights or
claims against the Company under this Agreement except the right to receive (i) the
unpaid portion of the base salary provided for in Section 3(a) hereof,
computed on a pro rata basis to the date of termination, (ii) payment of
the Executive’s accrued but unpaid amounts and extension of applicable benefits
in accordance with the terms of any incentive compensation, retirement,
employee welfare or other employee benefit plans or programs of the Company in
which the Executive is then participating in accordance with the terms of such
plans or programs, and (iii) reimbursement for any 

 

 

Employee Name:

 

expenses for which the Executive shall not
have theretofore been reimbursed as provided in Section 3 hereof.

 

b.              Termination
Without Cause; Termination for Good Reason. Upon the termination of
the Executive’s employment as a result of a Termination Without Cause or for
Good Reason, the Executive shall not have any further rights or claims against
the Company under this Agreement except the right to receive (i) the
payments and other rights provided for in Section 9(a) hereof and (ii) severance
payments in the form of a continuation of the Executive’s base salary as in
effect immediately prior to such termination for a  period of [      
months] following the effective date of such termination.  To the extent that severance payments shall
be payable under this Agreement such payments shall be in consideration for and
only after the Executive executes a General Release containing terms reasonably
satisfactory to the Company.

 

c.               Death and Disability. Upon the termination of the Executive’s
employment as a result of death or Disability, neither the Executive nor the
Executive’s beneficiaries or estate shall have any further rights or claims
against the Company under this Agreement except the right to receive the
payments and other rights provided for in Section 9(a) hereof.

 

d.              Forfeiture
of Rights. In the event that, subsequent to termination of
employment hereunder, the Executive (i) breaches any of the provisions of
Sections 11, 12, 13 or 14 hereof or (ii) makes or facilitates the making
of any adverse public statements or disclosures with respect to the business or
securities of the Company, all payments and benefits to which the Executive may
otherwise have been entitled shall immediately terminate and be forfeited, and
any portion of such amounts as may have been paid to the Executive shall
forthwith be returned to the Company.

 

10.                               Disclosure
of Confidential Information. The Executive shall not, directly or
indirectly, at any time during or after the Employment Period, disclose to any
person, firm, corporation or other business entity, except as required by law,
or use for any purpose except in the good faith performance of the Executive’s
duties to the Company, any Confidential Information (as herein defined).  For purposes of this Agreement, “Confidential Information” means all
trade secrets and other non-public information of a business, financial ,
marketing, technical or other nature pertaining to the Company or any
subsidiary, including information of others that the Company or any subsidiary
has agreed to keep confidential; provided, however, that Confidential
Information shall not include any information that has entered or enters the
public domain (other than through breach of the Executive’s obligations under
this Agreement) or which the Executive is required to disclose by law or legal
process.  Upon the Company’s request at
any time, the Executive shall immediately deliver to the Company all materials
in the Executive’s possession which contain Confidential Information.

 

 

Employee Name:

 

11.                               Restrictive
Covenant.

 

a.              Term of
Restrictive Covenant.  The
Executive hereby acknowledges and recognizes that, during the Employment
Period, the Executive shall be privy to trade secrets and Confidential
Information critical to the Company’s business and the Executive further
acknowledges and recognizes that the Company would find it extremely difficult
or impossible to replace the Executive and, accordingly, the Executive agrees
that, in consideration of the benefits to be received by the Executive
hereunder, the Executive shall not, from and after the date hereof, throughout
the Employment Period, and for a period of 12 months following the termination
of the Employment Period (i) directly or indirectly engage in the
development, production, marketing or sale of products that compete (or, upon
commercialization, would compete) with products of the Company being developed
(so long as such development has not been abandoned), marketed or sold at the
time of the  termination of the
Employment Period (such business or activity being herein referred to as a “Competing Business”) whether such
engagement shall be as an officer, director, owner, employee, partner,
affiliate or other participant in any Competing Business, (ii) assist
others in engaging in any Competing Business in the manner described in the
foregoing clause (i), or (iii) induce other employees of the Company or
any subsidiary thereof to terminate their employment with the Company or any
subsidiary thereof or engage in any Competing Business or hire any employees of
the Company or any subsidiary unless such persons have not been employees of
the Company for at least 12 months.

 

b.              Sufficient
Consideration.  The Executive
understands that the foregoing restrictions may limit the ability of the
Executive to earn a livelihood in a business similar to the business of the
Company, but nevertheless believes that the Executive has received and shall
receive sufficient consideration and other benefits, as an employee of the
Company and as otherwise provided hereunder, to justify such restrictions
which, in any event (given the education, skills and ability of the Executive),
the Executive believes would not prevent the Executive from earning a living.

 

12.                               Non-Disparagement.  The Executive shall not engage in
conduct, through word, act, gesture or other means, or disclose any information
to the public or any third party which (i) directly or indirectly
discredits or disparages in whole or in part the company, its subsidiaries,
divisions, affiliates and/or successors as well as the products and the
respective officers, directors, stockholders and employees of each of them; (ii) is
detrimental to the reputation, character or standing of these entities, their
products or any of their respective officers, directors, stockholders and/or
employees; or (iii) which generally reflects  negatively on the management decisions,
strategy or decision-making of these entities.

 

13.                               Company
Right to Inventions. The Executive shall promptly disclose, grant and
assign to the Company, for its sole use and benefit, any and all inventions,
improvements, technical information and suggestions relating in any way to the
business of the Company which the Executive may develop or acquire during the
Employment Period (whether or not during usual working hours), together with
all patent applications, letters patent, copyrights and reissues thereof that
may at any time be granted for or upon any such invention, improvement or
technical information. In connection therewith: (i) the 

 

 

Employee Name:

 

Executive shall, without charge, but at the
expense of the Company, promptly at all times hereafter execute and deliver such
applications, assignments, descriptions and other instruments as may be
necessary or proper in the opinion of the Company to vest title to any such
inventions, improvements, technical information, patent applications, patents,
copyrights or reissues thereof in the Company and to enable it to obtain and
maintain the entire right and title thereto throughout the world, and (ii) the
Executive shall render to the Company, at its expense (including a reasonable
payment for the time involved in case the Executive is not then in its employ),
all such assistance as it may require in the prosecution of applications for
said patents, copyrights or reissues thereof, in the prosecution or defense of
interferences which may be declared involving any said applications, patents or
copyrights and in any litigation in which the Company may be involved relating
to any such patents, inventions, improvements or technical information.

 

14.                               Enforcement.
It is the desire and intent of the parties hereto that the provisions of
this Agreement be enforceable to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, to the extent that a restriction contained in this
Agreement is more restrictive than permitted by the laws of any jurisdiction
where this Agreement may be subject to review and interpretation, the terms of
such restriction, for the purpose only of the operation of such restriction in
such jurisdiction, shall be the maximum restriction allowed by the laws of such
jurisdiction and such restriction shall be deemed to have been revised
accordingly herein.

 

15.                               Remedies;
Survival.

 

a.              Injunctive
Relief.  The Executive
acknowledges and understands that the provisions of the covenants contained in
Sections 11, 12, 13 and 14 hereof, the violation of which cannot be accurately
compensated for in damages by an action at law, are of crucial importance to
the Company, and that the breach or threatened breach of the provisions of this
Agreement would cause the Company irreparable harm. In the event of a breach or
threatened breach by the Executive of the provisions of Sections 11, 12, 13 or
14 hereof, the Company shall be entitled to an injunction restraining the
Executive from such breach. Nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies available for any
breach or threatened breach of this Agreement.

 

b.              Survival.  Notwithstanding anything contained
in this Agreement to the contrary, the provisions of the Sections 3, 9, and 11
through 17 hereof shall survive the expiration or earlier termination of this
Agreement until, by their terms, such provisions are no longer operative.

 

16.                               Notices.
Notices and other communications hereunder shall be in writing and shall be
delivered personally or sent by air courier or first class certified or
registered mail, return receipt requested and postage prepaid, addressed as
follows:

 

if to the Company:

 

PharmAthene, Inc.

One Park Place, Suite 450

Annapolis, Maryland  21401

 

 

Employee Name:

 

with a copy to:

McCarter & English, LLP

Four Gateway Center

100 Mulberry Street

Newark, New Jersey 07102

Attention:  Jeffrey Baumel, Esq.

 

if to the Executive to:

 

with a copy to :

 

All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of delivery, if personally delivered; on the business day
after the date when sent, if sent by air courier; and on the third business day
after the date when sent, if sent by mail, in each case addressed to such party
as provided in this Section 16 or in accordance with the latest unrevoked
direction from such party.

 

18.                                           Binding
Agreement; Benefit. The provisions of this Agreement shall be binding upon,
and shall inure to the benefit of, the respective heirs, legal representatives
and successors of the parties hereto.

 

19.                                           Governing
Law; Jurisdiction. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of  Maryland  applicable to contract made and to be performed
therein.  Any action to enforce any of
the provisions of this Agreement shall be brought in a court of the State of  Maryland or in Federal court located within that
State.  The parties consent to the
jurisdiction of such courts and to the service of process in any manner
provided by Maryland law.  Each party
irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such
court and any claim that such suit, action or proceeding brought in such court
has been brought in an inconvenient forum and agrees that service of process in
accordance with the foregoing shall be deemed in every respect effective and valid
personal service of process upon such party.

 

 

Employee Name:

 

20.                                           Waiver
of Breach. The waiver by either party of a breach of any provision of this
Agreement by the other party must be in writing and shall not operate or be
construed as a waiver of any subsequent breach by such other party.

 

21.                                           Entire
Agreement; Amendments. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements or understandings among the parties with respect thereof. This
Agreement may be amended only by an agreement in writing signed by the parties
hereto.

 

22.                                           Headings.
The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.

 

23.                                           Severability.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

24.                                           409A
Compliance.  The intent of the
Executive and the Company is that the severance and other benefits payable to
the Executive under this Agreement not be deemed “deferred compensation” under,
and shall otherwise comply with, Section 409A of the Internal Revenue Code
of 1986, as amended.  The Executive and
the Company agree to use reasonable best efforts to amend the terms of this
Agreement from time to time as may be necessary to avoid the imposition of
liability under Section 409A of the Code in any manner that does not
materially alter the substantive rights and obligations of the parties
hereunder.

 

25.                                           Executive’s
Acknowledgement.  The Executive
acknowledges (a) that the Executive has had the opportunity to consult
with independent counsel of his own choice concerning this Agreement and (b) that
the Executive has read and understands the Agreement, is fully aware of its
legal effect and has entered into it freely based on the Executive’s own
judgment.

 

26.                                           Assignment.
This Agreement is personal in its nature and the parties hereto shall not,
without the consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder; provided, that the provisions hereof shall
inure to the benefit of, and be binding upon, each successor of the Company,
whether by merger, consolidation, transfer of all or substantially all of its
assets or otherwise.

 

27.                                           Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall for all purposes constitute one
agreement which is binding on all of the parties hereto.

 

 

Employee Name:

 

IN WITNESS
WHEREOF, the parties have duly executed this Agreement
as of the date first above written.

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PHARMATHENE,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name: David
  P. Wright

  
	
   

  	
  Title:
  President and Chief Executive Officer

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