Document:

exv10w15

Exhibit 10.15

LOAN AND SECURITY AGREEMENT

     This LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of July      , 2009, between
SILICON VALLEY BANK, a California chartered bank, with its principal place of business at 3003
Tasman Drive, Santa Clara, California 95054 and an office at 2400 Hanover Street, Palo Alto,
California 94304 (FAX 650-856-7879) (“Bank”) and OCZ TECHNOLOGY GROUP, INC., a Delaware
corporation, with offices at 6373 San Ignacio Avenue, San Jose, California 95119 (FAX 408-733-4900)
(“Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay
Bank. The parties agree as follows:

     1 ACCOUNTING AND OTHER TERMS

     Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP. The term “financial statements”
includes the notes and schedules. The terms “including” and “includes” always mean “including (or
includes) without limitation,” in this or any Loan Document. Capitalized terms in this Agreement
shall have the meanings set forth in Section 13. All other terms contained in this Agreement,
unless otherwise indicated, shall have the meanings provided by the Code, to the extent such terms
are defined therein.

     2 LOAN AND TERMS OF PAYMENT

     2.1 Promise to Pay. Borrower hereby unconditionally promises to pay Bank the unpaid
principal amount of all Advances hereunder with all interest, fees and finance charges due thereon
as and when due in accordance with this Agreement.

     2.1.1 Financing of Accounts.

          (a) Availability. Subject to the terms of this Agreement, Borrower may request that
Bank finance specific Eligible Accounts. Bank may, in its good faith business discretion, finance
such Eligible Accounts by extending credit to Borrower in an amount equal to the result of the
Advance Rate multiplied by the face amount of the Eligible Account (the “Advance”). Bank may, in
its sole discretion, change the percentage of the Advance Rate for a particular Eligible Account on
a case by case basis. When Bank makes an Advance, the Eligible Account becomes a “Financed
Receivable.”

          (b) Maximum Advances. The aggregate face amount of all Financed Receivables
outstanding at any time may not exceed the Facility Amount, and Bank shall have no obligation to
make Advances in excess of Ten Million Dollars ($10,000,000) in the aggregate at anytime
outstanding, of which no more than Five Million Dollars ($5,000,000) may be with respect to Foreign
Accounts. In the event Borrower enters into a factoring facility with Faunus Group International,
Inc. or another factor satisfactory to Bank, in Bank’s sole discretion, with respect to Borrower’s
Foreign Accounts (the “Foreign Accounts Facility”), then the Borrower covenants and agrees that the
amount of obligations outstanding under this Agreement and the Foreign Accounts Facility shall not
at any time exceed $14,000,000 in the aggregate. The Foreign Accounts Facility is subject to (i) a
satisfactory review by Bank of the terms and provisions thereof and (ii) Bank and FGI (or such
other factor) entering into an intercreditor agreement in form and substance satisfactory to Bank
in its sole discretion.

          (c) Borrowing Procedure. Borrower will deliver an Invoice Transmittal for each
Eligible Account it offers. Bank may rely on information set forth in or provided with the Invoice
Transmittal.

          (d) Credit Quality; Confirmations. Bank may, at its option, conduct a credit check of
the Account Debtor for each Account requested by Borrower for financing hereunder in order to
approve any such Account Debtor’s credit before agreeing to finance such Account. Bank may also
verify directly with the respective Account Debtors the validity, amount and other matters relating
to the Accounts (including confirmations of

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Borrower’s representations in Section 5.3) by means of mail, telephone or otherwise, either in
the name of Borrower or Bank from time to time in its sole discretion.

          (e) Accounts Notification/Collection. Bank may notify any Person owing Borrower money
of Bank’s security interest in the funds and verify and/or collect the amount of the Account.

          (f) Early Termination. This Agreement may be terminated prior to the Maturity Date as
follows: (i) by Borrower, effective three Business Days after written notice of termination is
given to Bank; or (ii) by Bank at any time after the occurrence of an Event of Default, without
notice, effective immediately. If this Agreement is terminated (A) by Bank in accordance with
clause (ii) in the foregoing sentence, or (B) by Borrower for any reason, Borrower shall pay to
Bank a termination fee in an amount equal to one percent (1.0%) of the applicable Facility Amount
(the “Early Termination Fee”). The Early Termination Fee shall be due and payable on the effective
date of such termination and thereafter shall bear interest at a rate equal to the highest rate
applicable to any of the Obligations. Notwithstanding the foregoing, Bank agrees to waive the
Early Termination Fee if Bank agrees to refinance and redocument this Agreement under another
division of Bank (in its sole and exclusive discretion) prior to the Maturity Date.

          (g) Maturity. This Agreement shall terminate and all Obligations outstanding
hereunder shall be immediately due and payable on the Maturity Date.

          (h) Suspension of Advances. Borrower’s ability to request that Bank finance Eligible
Accounts hereunder will terminate if, in Bank’s sole discretion, there has been a material adverse
change in the general affairs, management, results of operation, condition (financial or otherwise)
or the prospect of repayment of the Obligations, or there has been any material adverse deviation
by Borrower from the most recent business plan of Borrower presented to and accepted by Bank prior
to the execution of this Agreement.

     2.2 Collections, Finance Charges, Remittances and Fees. The Obligations shall be
subject to the following fees and Finance Charges. Unpaid fees and Finance Charges may, in Bank’s
discretion, accrue interest and fees as described in Section 9.2 hereof.

     2.2.1 Collections. Collections will be credited to the Financed Receivable Balance
for such Financed Receivable, but if there is an Event of Default, Bank may apply Collections to
the Obligations in any order it chooses. If Bank receives a payment for both a Financed Receivable
and a non-Financed Receivable, the funds will first be applied to the Financed Receivable and, if
there is no Event of Default then existing, the excess will be remitted to Borrower, subject to
Section 2.2.7.

     2.2.2 Facility Fee. A fully earned, non-refundable facility fee of Sixty Thousand
Dollars ($60,000) is due upon execution of this Agreement (the portion of the facility fee
previously paid by Borrower in conjunction with that certain Amendment to Loan and Security
Agreement between Borrower and Bank and dated October 31, 2008 applicable through November 17, 2009
will be credited towards the Facility Fee; the amount of the difference between the Facility Fee
and such credited amount is due and payable on the date hereof).

     2.2.3 Finance Charges. In computing Finance Charges on the Obligations under this
Agreement, all Collections received by Bank shall be deemed applied by Bank on account of the
Obligations two (2) Business Days after receipt of the Collections of non-Foreign Accounts only.
Borrower will pay a finance charge (the “Finance Charge”) on each Financed Receivable which is
equal to the Applicable Rate divided by 360 multiplied by the number of days each
such Financed Receivable is outstanding multiplied by the outstanding Financed Receivable
Balance. The Finance Charge is payable when the Advance made based on such Financed Receivable is
payable in accordance with Section 2.3 hereof. After an Event of Default, the Applicable Rate will
increase an additional five percent (5.0%) per annum effective immediately upon the occurrence of
such Event of Default.

     2.2.4 Collateral Handling Fee. Borrower will pay to Bank a collateral handling fee
equal to 0.375% per month of the Financed Receivable Balance for each Financed Receivable
outstanding based upon a 360 day year (the “Collateral Handling Fee”); provided,
however, if Borrower’s Quick Ratio is greater than 0.75 to 1.0 for any given month, then
the Collateral Handling Fee shall be reduced to 0.1% per month of the Financed Receivable

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Balance for each Financed Receivable outstanding based upon a 360 day year commencing on the
first day of the month following Bank’s receipt of Borrower’s financial statements evidencing such
Quick Ratio and continuing for each month thereafter so long as Borrower’s maintains a Quick Ratio
of greater than 0.75 to 1.0. This fee is charged on a daily basis which is equal to the Collateral
Handling Fee divided by 30, multiplied by the number of days each such Financed Receivable is
outstanding, multiplied by the outstanding Financed Receivable Balance. The Collateral Handling
Fee is payable when the Advance made based on such Financed Receivable is payable in accordance
with Section 2.3 hereof. In computing Collateral Handling Fees under this Agreement, all
Collections received by Bank shall be deemed applied by Bank on account of Obligations two (2)
Business Days after receipt of the Collections of non-Foreign Accounts only. After an Event of
Default, the Collateral Handling Fee will increase an additional 0.50% effective immediately upon
such Event of Default.

     2.2.5 Accounting. After each Reconciliation Period, Bank will provide an accounting
of the transactions for that Reconciliation Period, including the amount of all Financed
Receivables, all Collections, Adjustments, Finance Charges, Collateral Handling Fee and the
Facility Fee. If Borrower does not object to the accounting in writing within thirty (30) days it
shall be considered accurate. All Finance Charges and other interest and fees are calculated on
the basis of a 360 day year and actual days elapsed.

     2.2.6 Deductions. Bank may deduct fees, Finance Charges, Advances which become due
pursuant to Section 2.3, and other amounts due pursuant to this Agreement from any Advances made or
Collections received by Bank.

     2.2.7 Lockbox; Account Collection Services.

     (a) As and when directed by Bank from time to time, at Bank’s option and at the sole and
exclusive discretion of Bank (regardless of whether an Event of Default has occurred), Borrower
shall direct each Account Debtor (and each depository institution where proceeds of Accounts are on
deposit) to remit payments with respect to the Accounts to a lockbox account established with Bank
or to wire transfer payments to a cash collateral account that Bank controls (collectively, the
“Lockbox”). It will be considered an immediate Event of Default if the Lockbox is not set-up and
operational within forty-five (45) days from the date of such direction by Bank.

     (b) Until such Lockbox is established, the proceeds of the Accounts shall be paid by the
Account Debtors to an address consented to by Bank. Upon receipt by Borrower of such proceeds, the
Borrower shall immediately transfer and deliver same to Bank, along with a detailed cash receipts
journal. Provided no Event of Default exists or an event that with notice or lapse of time will be
an Event of Default, within three (3) days of receipt of such amounts by Bank, Bank will turn over
to Borrower the proceeds of the Accounts other than Collections with respect to Financed
Receivables and the amount of Collections in excess of the amounts for which Bank has made an
Advance to Borrower, less any amounts due to Bank, such as the Finance Charge, the Facility Fee,
payments due to Bank, other fees and expenses, or otherwise; provided, however, Bank may hold such
excess amount with respect to Financed Receivables as a reserve until the end of the applicable
Reconciliation Period if Bank, in its discretion, determines that other Financed Receivable(s) may
no longer qualify as an Eligible Account at any time prior to the end of the subject Reconciliation
Period. This Section does not impose any affirmative duty on Bank to perform any act other than as
specifically set forth herein. All Accounts and the proceeds thereof are Collateral and if an
Event of Default occurs, Bank may apply the proceeds of such Accounts to the Obligations.

     2.2.8 Good Faith Deposit. [Omitted].

     2.3 Repayment of Obligations; Adjustments.

     2.3.1 Repayment. Borrower will repay each Advance on the earliest of: (a) the date on
which payment is received of the Financed Receivable with respect to which the Advance was made,
(b) the date on which the Financed Receivable is no longer an Eligible Account, (c) the date on
which any Adjustment is asserted to the Financed Receivable (but only to the extent of the
Adjustment if the Financed Receivable remains otherwise an Eligible Account), (d) the date on which
there is a breach of any warranty or representation set forth in Section 5.3, or (e) the Maturity
Date (including any early termination). Each payment will also include all accrued Finance

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Charges and Collateral Handling Fees with respect to such Advance and all other amounts then
due and payable hereunder.

     2.3.2 Repayment on Event of Default. When there is an Event of Default, Borrower
will, if Bank demands (or, upon the occurrence of an Event of Default under Section 8.5,
immediately without notice or demand from Bank) repay all of the Advances. The demand may, at
Bank’s option, include the Advance for each Financed Receivable then outstanding and all accrued
Finance Charges, the Early Termination Fee, Collateral Handling Fee, attorneys’ and professional
fees, court costs and expenses, and any other Obligations.

     2.3.3 Debit of Accounts. Bank may debit any of Borrower’s deposit accounts for
payments or any amounts Borrower owes Bank hereunder. Bank shall promptly notify Borrower when it
debits Borrower’s accounts. These debits shall not constitute a set-off.

     2.3.4 Adjustments. If at any time during the term of this Agreement any Account
Debtor asserts an Adjustment or if Borrower issues a credit memorandum or if any of the
representations, warranties or covenants set forth in Section 5.3 are no longer true in all
material respects, Borrower will promptly advise Bank.

     2.4 Power of Attorney. Borrower irrevocably appoints Bank and its successors and
assigns as attorney-in-fact and authorizes Bank, to: (a) following the occurrence of an Event of
Default, (i) sell, assign, transfer, pledge, compromise, or discharge all or any part of the
Financed Receivables; (ii) demand, collect, sue, and give releases to any Account Debtor for monies
due and compromise, prosecute, or defend any action, claim, case or proceeding about the Financed
Receivables, including filing a claim or voting a claim in any bankruptcy case in Bank’s or
Borrower’s name, as Bank chooses; and (iii) prepare, file and sign Borrower’s name on any notice,
claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or
similar document; and (b) regardless of whether there has been an Event of Default, (i) notify all
Account Debtors to pay Bank directly; (ii) receive, open, and dispose of mail addressed to
Borrower; (iii) endorse Borrower’s name on checks or other instruments (to the extent necessary to
pay amounts owed pursuant to this Agreement); and (iv) execute on Borrower’s behalf any
instruments, documents, financing statements to perfect Bank’s interests in the Financed
Receivables and Collateral and do all acts and things necessary or expedient, as determined solely
and exclusively by Bank, to protect or preserve, Bank’s rights and remedies under this Agreement,
as directed by Bank.

     3 CONDITIONS OF LOANS

     3.1 Conditions Precedent to Initial Advance. Bank’s agreement to make the initial
Advance is subject to the condition precedent that Bank shall have received, in form and substance
satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate, including, without limitation:

          (a) duly executed original signatures to the Loan Documents;

          (b) a certificate of the Secretary of Borrower with respect to articles, bylaws, incumbency
and resolutions authorizing the execution and delivery of this Agreement;

          (c) [omitted];

          (d) [omitted];

          (e) [omitted];

          (f) evidence satisfactory to Bank that the insurance policies required by Section 6.4 hereof
are in full force and effect, together with appropriate evidence showing lender loss payable and/or
additional insured clauses or endorsements in favor of Bank;

          (g) payment of the fees and Bank Expenses then due and payable;

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          (h) certified copies, dated as of a recent date, of financing statement searches, as Bank
shall request, accompanied by written evidence (including any UCC termination statements) that the
Liens indicated in any such financing statements either constitute Permitted Liens or have been or,
in connection with the initial Advance, will be terminated or released;

          (i) Certificate of Foreign Qualification (if applicable);

          (j) Certificate of Good Standing/Legal Existence;

          (k) [omitted]; and

          (l) such other documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate.

     3.2 Conditions Precedent to all Advances. Bank’s agreement to make each Advance,
including the initial Advance, is subject to the following:

          (a) receipt of the Invoice Transmittal;

          (b) Bank shall have (at its option) conducted the confirmations and verifications as described
in Section 2.1.1 (d); and

          (c) each of the representations and warranties in Section 5 shall be true on the date of the
Invoice Transmittal and on the effective date of each Advance and no Event of Default shall have
occurred and be continuing, or result from the Advance. Each Advance is Borrower’s representation
and warranty on that date that the representations and warranties in Section 5 remain true.

     4 CREATION OF SECURITY INTEREST

     4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the payment
and performance in full of all of the Obligations and the performance of each of Borrower’s duties
under the Loan Documents, a continuing security interest in, and pledges and assigns to Bank, the
Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds
and products thereof. Borrower warrants and represents that the security interest granted herein
shall be a first priority security interest in the Collateral.

     If the Agreement is terminated, Bank’s lien and security interest in the Collateral shall
continue until Borrower fully satisfies its Obligations. If Borrower shall at any time, acquire a
commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the
brief details thereof and grant to Bank in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and
substance satisfactory to Bank.

     4.2 Authorization to File Financing Statements. Borrower hereby authorizes Bank to
file financing statements, without notice to Borrower, with all appropriate jurisdictions in order
to perfect or protect Bank’s interest or rights hereunder, which financing statements may indicate
the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an equal or
lesser scope, or with greater detail, all in Bank’s discretion.

     5 REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants as follows:

     5.1 Due Organization and Authorization. Borrower and each of its Subsidiaries are
duly existing and in good standing as a Registered Organization in their respective jurisdictions
of formation and are qualified and licensed to do business and are in good standing in any
jurisdiction in which the conduct of their respective business or ownership of property requires
that they be qualified except where the failure to do so could not reasonably be expected to have a
material adverse effect on Borrower’s business. In connection with this Agreement, Borrower

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has previously delivered to Bank a completed certificate entitled “Perfection Certificate”
which certificate shall be updated by Borrower within thirty (30) days of the date of this
Agreement. Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that
indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an
organization of the type and is organized in the jurisdiction set forth in the Perfection
Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational
identification number or accurately states that Borrower has none; (d) the Perfection Certificate
accurately sets forth Borrower’s place of business, or, if more than one, its chief executive
office as well as Borrower’s mailing address (if different than its chief executive office); (e)
Borrower (and each of its predecessors) has not, in the past five (5) years, changed its
jurisdiction of formation, organizational structure or type, or any organizational number assigned
by its jurisdiction; and (f) all other information set forth on the Perfection Certificate
pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood
and agreed that Borrower may from time to time update certain information in the Perfection
Certificate after the Effective Date to the extent permitted by one or more specific provisions in
this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower
shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational
identification number.

     The execution, delivery and performance by Borrower of the Loan Documents to which it is a
party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational
documents, (ii) contravene, conflict with, constitute a default under or violate any material
Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by which Borrower or any
its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any
action by, filing with or Governmental Approval from any Governmental Authority (except such
Governmental Approvals which have already been obtained and are in full force and effect) or (v)
constitute an event of default under any material agreement by which Borrower is bound. Borrower
is not in default under any agreement to which it is a party or by which it is bound in which the
default could reasonably be expected to have a material adverse effect on Borrower’s business.

     5.2 Collateral. Borrower has good title, has rights in, and the power to transfer
each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any
and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit
accounts with Bank, the deposit accounts, if any, described in the Perfection Certificate delivered
to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions
as are necessary to give Bank a perfected security interest therein. The accounts are bona fide,
existing obligations of the Account Debtors.

     The Collateral is not in the possession of any third party bailee (such as a warehouse) except
as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall
be maintained at locations other than as provided in the Perfection Certificate or as Borrower has
given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a bailee, then Borrower will
first receive the written consent of Bank and such bailee must execute and deliver a bailee
agreement in form and substance satisfactory to Bank in its sole discretion.

     Without prior consent from Bank, Borrower shall not enter into, or become bound by, any such
license or agreement which is reasonably likely to have a material impact on Borrower’s business or
financial condition. Borrower shall take such steps as Bank requests to obtain the consent of, or
waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights
to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be
restricted or prohibited by law or by the terms of any such license or agreement, whether now
existing or entered into in the future.

     5.3 Financed Receivables. Borrower represents and warrants for each Financed
Receivable:

          (a) Each Financed Receivable is an Eligible Account;

          (b) Borrower has the right to sell, transfer, assign and encumber such Financed Receivable;

          (c) The correct amount is on the Invoice Transmittal and is not disputed;

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          (d) Payment is not contingent on any obligation or contract and Borrower has fulfilled all its
obligations as of the Invoice Transmittal date;

          (e) Each Financed Receivable is based on an actual sale and delivery of goods and/or services
rendered, is due to Borrower, is not past due or in default, has not been previously sold,
assigned, transferred, or pledged and is free of any liens, security interests and encumbrances
other than Permitted Liens;

          (f) There are no defenses, offsets, counterclaims or agreements for which the Account Debtor
may claim any deduction or discount;

          (g) Borrower reasonably believes no Account Debtor is insolvent or subject to any Insolvency
Proceedings;

          (h) Borrower has not filed or had filed against it Insolvency Proceedings and does not
anticipate any filing;

          (i) Bank has the right to endorse and/ or require Borrower to endorse all payments received on
Financed Receivables and all proceeds of Collateral; and

          (j) No representation, warranty or other statement of Borrower in any certificate or written
statement given to Bank contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statement contained in the certificates or statement not
misleading.

     5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of
Borrower’s Responsible Officers or legal counsel, threatened by or against Borrower or any
Subsidiary in which an adverse decision could reasonably be expected to cause a Material Adverse
Change.

     5.5 No Material Deviation in Financial Statements. All consolidated financial
statements for Borrower and any Subsidiary delivered to Bank fairly present in all material
respects Borrower’s consolidated financial condition and Borrower’s consolidated results of
operations. There has not been any material deterioration in Borrower’s consolidated financial
condition since the date of the most recent financial statements submitted to Bank.

     5.6 Solvency. Borrower is able to pay its debts (including trade debts) as they
mature.

     5.7 Regulatory Compliance. Borrower is not an “investment company” or a company
“controlled” by an “investment company” under the Investment Company Act. Borrower is not engaged
as one of its important activities in extending credit for margin stock (under Regulations X, T and
U of the Federal Reserve Board of Governors). Borrower has complied in all material respects with
the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to cause a Material Adverse Change. None of
Borrower’s or any Subsidiary’s properties or assets has been used by Borrower or any Subsidiary or,
to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing,
treating, or transporting any hazardous substance other than legally. Borrower and each Subsidiary
have timely filed all required tax returns and paid, or made adequate provision to pay, all
material taxes, except those being contested in good faith with adequate reserves under GAAP.
Borrower and each Subsidiary have obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all government authorities that are
necessary to continue its business as currently conducted except where the failure to obtain or
make such consents, declarations, notices or filings would not reasonably be expected to cause a
Material Adverse Change. Borrower and each of its Subsidiaries have obtained all consents,
approvals and authorizations of, made all declarations or filings with, and given all notices to,
all Government Authorities that are necessary to continue their respective businesses as currently
conducted.

     No certificate, authorization, permit, consent, approval, order, license, exemption from, or
filing or registration or qualification with, any Governmental Authority or any Requirement of Law
is or will be required to

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authorize, or is otherwise required in connection with Borrower’s performance of its
obligations under the Loan Documents and the creation of the Liens described in and granted by
Borrower pursuant to the Loan Documents.

     5.8 Subsidiaries. Borrower does not own any stock, partnership interest or other
equity securities except for Permitted Investments.

     5.9 Full Disclosure. No written representation, warranty or other statement of
Borrower in any certificate or written statement given to Bank, as of the date such
representations, warranties, or other statements were made, taken together with all such written
certificates and written statements give to Bank, contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained in the certificates or
statements not misleading (it being recognized by Bank that projections and forecasts provided by
Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that
actual results during the period or periods covered by such projections and forecasts may differ
from the projected or forecasted results).

     6 AFFIRMATIVE COVENANTS

     Borrower shall do all of the following:

     6.1 Government Compliance. Maintain its and all its Subsidiaries’ legal existence and
good standing in its jurisdiction of formation and maintain qualification in each jurisdiction in
which the failure to so qualify would reasonably be expected to have a material adverse effect on
Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply, with
all laws, ordinances and regulations to which it is subject, noncompliance with which could have a
material adverse effect on Borrower’s business.

     6.2 Financial Statements, Reports, Certificates.

          (a) Deliver to Bank: (i) as soon as available, but no later than thirty (30) days after the
last day of each month, a company prepared consolidating balance sheet and income statement
covering Borrower and each of its Subsidiary’s operations during the period certified by a
Responsible Officer and in a form acceptable to Bank; (ii) as soon as available, but no later than
one hundred eighty (180) days after the last day of Borrower’s fiscal year, audited consolidated
financial statements prepared under GAAP, consistently applied, together with an unqualified
opinion on the financial statements from an independent certified public accounting firm reasonably
acceptable to Bank; (iii) in the event that Borrower’s stock becomes publicly held, within five (5)
days of filing, copies of all statements, reports and notices made available to Borrower’s security
holders or to any holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission; (iv) a prompt report of any legal actions pending or
threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or
any Subsidiary of One Hundred Thousand Dollars ($100,000.00) or more; (v) prompt notice of any
material change in the composition of the Intellectual Property, or the registration of any
copyright, including any subsequent ownership right of Borrower in or to any Copyright, Patent or
Trademark not previously disclosed to Bank in writing or knowledge of an event that materially
adversely affects the value of the Intellectual Property Collateral; and (vi) budgets, sales
projections, operating plans or other financial information reasonably requested by Bank
(including, without limitation, within forty-five (45) days prior to the end of each fiscal year of
Borrower, (A) annual operating budgets (including income statements, balance sheets and cash flow
statements, by month) for the upcoming fiscal year of Borrower, and (B) annual financial
projections for the following fiscal year (on a quarterly basis) as approved by Borrower’s board of
directors, together with any related business forecasts used in the preparation of such annual
financial projections).

          (b) Within thirty (30) days after the last day of each month, deliver to Bank with the monthly
financial statements a Compliance Certificate signed by a Responsible Officer in the form of
Exhibit B.

          (c) Allow Bank to audit Borrower’s Collateral, including, but not limited to, Borrower’s
Accounts at Borrower’s expense, upon reasonable notice to Borrower; provided, however, prior to the
occurrence of an Event of Default, Borrower shall be obligated to pay for not more than three (3)
audits per year. After the occurrence of an Event of Default, Bank may audit Borrower’s Collateral,
including, but not limited to, Borrower’s Accounts at Borrower’s expense and at Bank’s sole and
exclusive discretion and without notification and

8

 

authorization from Borrower. All of the foregoing inspections and audits shall be at
Borrower’s expense, and the charge therefor shall be $850 per person per day (or such higher amount
as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket
expenses.

          (d) Upon Bank’s request, provide a written report respecting any Financed Receivable, if
payment of any Financed Receivable does not occur by its due date and include the reasons for the
delay.

          (e) Provide Bank with, as soon as available, but no later than fifteen (15) days following
each Reconciliation Period, an aged listing of accounts receivable and accounts payable by invoice
date, in form acceptable to Bank.

          (f) Provide Bank with, as soon as available, but no later than thirty (30) days following each
Reconciliation Period, a Deferred Revenue report, in form acceptable to Bank.

     6.3 Taxes. Borrower shall make, and cause each Subsidiary to make, timely payment of
all material federal, state, and local taxes or assessments (other than taxes and assessments which
Borrower is contesting in good faith, with adequate reserves maintained in accordance with GAAP)
and will deliver to Bank, on demand, appropriate certificates attesting to such payments.

     6.4 Insurance. Borrower shall keep its business and the Collateral insured for risks
and in amounts, and as Bank may reasonably request. Insurance policies shall be in a form, with
companies, and in amounts that are satisfactory to Bank. All property policies shall have a
lender’s loss payable endorsement showing Bank as an additional loss payee and all liability
policies shall show, or have endorsements showing, Bank as an additional insured. All policies (or
the loss payable and additional insured endorsements) shall provide that the insurer must give Bank
at least twenty (20) days notice before canceling, amending or declining its policy. At Bank’s
request, Borrower shall deliver certified copies of policies and evidence of all premium payments.
Proceeds payable under any policy shall, at Bank’s option, be payable to Bank on account of the
Obligations. If Borrower fails to obtain insurance as required under this Section or to pay any
amount or furnish any required proof of payment to third persons and Bank, Bank may make all or
part of such payment or obtain such insurance policies required in this Section and take any action
under the policies Bank deems prudent.

     6.5 Accounts.

          (a) To permit Bank to monitor Borrower’s financial performance and condition, Borrower, and
all Borrower’s Subsidiaries, shall maintain Borrower’s and such Subsidiaries’, primary depository
and operating accounts and securities accounts with Bank and Bank’s affiliates. Any Guarantor shall
maintain all depository, operating and securities accounts with Bank.

          (b) Borrower shall identify to Bank, in writing, any deposit or securities account opened by
Borrower with any institution other than Bank. In addition, for each such account that Borrower or
Guarantor at any time opens or maintains, Borrower shall, at Bank’s request and option, pursuant to
an agreement in form and substance acceptable to Bank, cause the depository bank or securities
intermediary to agree that such account is the collateral of Bank pursuant to the terms hereunder.
The provisions of the previous sentence shall not apply to deposit accounts exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of
Borrower’s employees.

     6.6 Financial Covenants.

     Borrower shall maintain at all times, to be tested as of the last day of each month, unless
otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries:

          (a) Quick Ratio. A ratio of Quick Assets to Current Liabilities of at least 0.50 to
1.0.

     6.7 Further Assurances. Borrower shall execute any further instruments and take
further action as Bank reasonably requests to perfect or continue Bank’s security interest in the
Collateral or to effect the purposes of this Agreement.

9

 

     6.8 Additional Documents. Borrower shall, within thirty (30) days of the date of this
Agreement, provide Bank with the following: (i) an executed original of the Reaffirmation of
Subordination Agreement executed by PC Power & Cooling, Inc., (ii) an updated Perfection
Certificate executed by Borrower and (iii) an executed landlord’s consent in favor of Bank for 6367
San Ignacio Avenue, San Jose, California 95119. The failure to provide any of the aforementioned
executed documents to Bank within such thirty (30) day period shall constitute an Event of Default
hereunder.

     7 NEGATIVE COVENANTS

     Borrower shall not do any of the following without Bank’s prior written consent.

     7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of (collectively
a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or
property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out
or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; and (d) of
non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary
course of business.

     7.2 Changes in Business, Ownership, Management or Business Locations. Engage in or
permit any of its Subsidiaries to engage in any business other than the businesses currently
engaged in by Borrower or reasonably related thereto, or have a material change in its ownership
(other than by the sale of Borrower’s equity securities in a public offering or to venture capital
investors so long as Borrower identifies to Bank the venture capital investors prior to the closing
of the investment), or management. Borrower shall not, without at least thirty (30) days prior
written notice to Bank: (a) relocate its chief executive office, or add any new offices or business
locations, including warehouses (unless such new offices or business locations contain less than
Five Thousand Dollars ($5,000.00) in Borrower’s assets or property), or (b) change its jurisdiction
of organization, or (c) change its organizational structure or type, or (d) change its legal name,
or (e) change any organizational number (if any) assigned by its jurisdiction of organization.

     7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries
to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to
acquire, all or substantially all of the capital stock or property of another Person. A Subsidiary
may merge or consolidate into another Subsidiary or into Borrower.

     7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit
any Subsidiary to do so, other than Permitted Indebtedness.

     7.5 Encumbrance. Create, incur, or allow any Lien on any of its property, or assign
or convey any right to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to
the first priority security interest granted herein. The Collateral may also be subject to
Permitted Liens.

     7.6 Distributions; Investments. (a) Directly or indirectly acquire or own any Person,
or make any Investment in any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so; or (b) pay any dividends or make any distribution or payment or redeem,
retire or purchase any capital stock.

     7.7 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower, except for transactions that are in
the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less
favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated
Person.

     7.8 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt,
except under the terms of the subordination, intercreditor, or other similar agreement to which
such Subordinated Debt is subject, or (b) amend any provision in any document relating to the
Subordinated Debt which would increase the amount thereof or adversely affect the subordination
thereof to Obligations owed to Bank.

10

 

     7.9 Compliance. Become an “investment company” or a company controlled by an
“investment company”, under the Investment Company Act of 1940 or undertake as one of its important
activities extending credit to purchase or carry margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System), or use the proceeds of any Advance for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor
Standards Act or violate any other law or regulation, if the violation could reasonably be expected
to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do
so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to, any present pension,
profit sharing and deferred compensation plan which could reasonably be expected to result in any
liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency.

     8 EVENTS OF DEFAULT

     Any one of the following shall constitute an event of default (an “Event of Default”) under
this Agreement:

     8.1 Payment Default. Borrower fails to pay any of the Obligations when due;

     8.2 Covenant Default. Borrower fails or neglects to perform any obligation in Section
6 or violates any covenant in Section 7 or fails or neglects to perform, keep, or observe any other
material term, provision, condition, covenant or agreement contained in this Agreement, any Loan
Documents and as to any default under such other term, provision, condition, covenant or agreement
that can be cured, has failed to cure the default within ten (10) days after the occurrence
thereof; provided, however, grace and cure periods provided under this section shall not apply to
financial covenants or any other covenants that are required to be satisfied, completed or tested
by a date certain;

     8.3 Material Adverse Change. A Material Adverse Change occurs;

     8.4 Attachment. (a) Any material portion of Borrower’s assets is attached, seized,
levied on, or comes into possession of a trustee or receiver; (b) the service of process seeking to
attach, by trustee or similar process, any funds of Borrower or of any entity under control of
Borrower (including a Subsidiary) on deposit with Bank or any Bank Affiliate; (c) Borrower is
enjoined, restrained, or prevented by court order from conducting any part of its business; or (d)
a notice of lien, levy, or assessment is filed against any of Borrower’s assets by any government
agency, and the same under clauses (a) through (d) hereof are not, within ten (10) days after the
occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise);
provided, however, no Advances shall be made during any ten (10) day cure period;

     8.5 Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as
they become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or
(c) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within thirty
(30) days (but no Advances shall be made while of any of the conditions described in clause (a)
exist and/or until any Insolvency Proceeding is dismissed);

     8.6 Other Agreements. If there is a default in any agreement to which Borrower is a
party with a third party or parties resulting in a right by such third party or parties, whether or
not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred
Thousand Dollars ($100,000) or that could result in a Material Adverse Change;

     8.7 Judgments. A judgment or judgments for the payment of money in an amount,
individually or in the aggregate, of at least Fifty Thousand Dollars ($50,000) (not covered by
independent third-party insurance as to which liability has been accepted by the insurance carrier)
shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten
(10) days (provided that no Advances will be made prior to the satisfaction or stay of such
judgment);

     8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any
representation, warranty, or other statement now or later in this Agreement, any Loan Document or
in writing delivered to Bank or

11

 

to induce Bank to enter this Agreement or any Loan Document, and such representation,
warranty, or other statement is incorrect in any material respect when made;

     8.9 Subordinated Debt. A default or breach occurs under any agreement between
Borrower and any creditor of Borrower that signed a subordination agreement, intercreditor, or
other similar agreement with Bank, or any creditor that has signed subordination agreement with
Bank breaches any terms of the subordination agreement;

     8.10 Guaranty. [Intentionally Omitted].

     9 BANK’S RIGHTS AND REMEDIES

     9.1 Rights and Remedies. When an Event of Default occurs and continues Bank may,
without notice or demand, do any or all of the following:

          (a) Declare all Obligations immediately due and payable (but if an Event of Default described
in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);

          (b) Stop advancing money or extending credit for Borrower’s benefit under this Agreement or
under any other agreement between Borrower and Bank;

          (c) Settle or adjust disputes and claims directly with Account Debtors for amounts, on terms
and in any order that Bank considers advisable and notify any Person owing Borrower money of Bank’s
security interest in such funds and verify the amount of such account. Borrower shall collect all
payments in trust for Bank and, if requested by Bank, immediately deliver the payments to Bank in
the form received from the Account Debtor, with proper endorsements for deposit;

          (d) Make any payments and do any acts it considers necessary or reasonable to protect its
security interest in the Collateral. Borrower shall assemble the Collateral if Bank requests and
make it available as Bank designates. Bank may enter premises where the Collateral is located,
take and maintain possession of any part of the Collateral, and pay, purchase, contest, or
compromise any Lien which appears to be prior or superior to its security interest and pay all
expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without
charge, to exercise any of Bank’s rights or remedies;

          (e) Apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any
amount held by Bank owing to or for the credit or the account of Borrower;

          (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell the Collateral. Bank is hereby granted a non-exclusive, royalty-free license or
other right to use, without charge, Borrower’s labels, patents, copyrights, mask works, rights of
use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or
any similar property as it pertains to the Collateral, in completing production of, advertising for
sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this
Section, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit;

          (g) Place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive
control, any entitlement order, or other directions or instructions pursuant to any control
agreement or similar agreements providing control of any Collateral; and

          (h) Exercise all rights and remedies and dispose of the Collateral according to the Code.

     9.2 Bank Expenses; Unpaid Fees. If Borrower fails to obtain insurance called for by
Section 6.4 or fails to pay any premium thereon or fails to pay any other amount which Borrower is
obligated to pay under this Agreement or by any other Loan Document, Bank may obtain such insurance
or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and
payable, bearing interest at the then highest applicable rate, and secured by the Collateral. Bank
will make reasonable effort to provide Borrower with notice of

12

 

Bank obtaining such insurance at the time it is obtained or within a reasonable time
thereafter. No payments by Bank are deemed an agreement to make similar payments in the future or
Bank’s waiver of any Event of Default.

     9.3 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking
practices regarding the safekeeping of Collateral in possession or under the control of Bank, Bank
shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or
damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or
default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss,
damage or destruction of the Collateral.

     9.4 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan
Documents, and all other agreements are cumulative. Bank has all rights and remedies provided
under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election,
and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay is not a waiver,
election, or acquiescence. No waiver hereunder shall be effective unless signed by Bank and then is
only effective for the specific instance and purpose for which it was given.

     9.5 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of
payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees held by Bank on which Borrower is liable.

     10 NOTICES.

     Notices or demands by either party about this Agreement must be in writing and personally
delivered or sent by an overnight delivery service, by certified mail postage prepaid return
receipt requested, or by fax to the addresses listed at the beginning of this Agreement. A party
may change notice address by written notice to the other party.

     11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

     California law governs the Loan Documents without regard to principles of conflicts of law.
Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in
Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed
to operate to preclude Bank 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 Bank. Borrower expressly submits and consents in
advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby
waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or
forum non conveniens and hereby consents to the granting of such legal or equitable relief as is
deemed appropriate by such court. Borrower hereby waives personal service of the summons,
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
Borrower at the address set forth in Section 10 of this Agreement and that service so made shall be
deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days
after deposit in the U.S. mails, proper postage prepaid.

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

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties
hereto agree 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 parties (or, if
they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court)
appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to
comparable provisions of federal law if the dispute falls within the

13

 

exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County,
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 Santa Clara County, California Superior Court 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 or 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 any party at any time
to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The
private judge shall also determine all issues relating to the applicability, interpretation, and
enforceability of this paragraph.

     12 GENERAL PROVISIONS

     12.1 Successors and Assigns. This Agreement binds and is for the benefit of the
successors and permitted assigns of each party. Borrower may not assign this Agreement or any
rights or Obligations under it without Bank’s prior written consent which may be granted or
withheld in Bank’s discretion. Bank has the right, without the consent of or notice to Borrower,
to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights and benefits under this Agreement, the Loan Documents or any related
agreement.

     12.2 Indemnification. Borrower agrees to indemnify, defend, and hold Bank and its
officers, directors, employees, agents, attorneys or any other Person affiliated with or
representing Bank harmless against: (a) all obligations, demands, claims, and liabilities
(collectively, “Claims”) asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank
from, following, or arising from transactions between Bank and Borrower (including reasonable
attorneys’ fees and expenses), except for Claims and/or losses caused by Bank’s gross negligence or
willful misconduct.

     12.3 Time of Essence. Time is of the essence for the performance of all Obligations
in this Agreement.

     12.4 Severability of Provision. Each provision of this Agreement is severable from
every other provision in determining the enforceability of any provision.

     12.5 Amendments in Writing; Integration. All amendments to this Agreement must be in
writing signed by both Bank and Borrower. This Agreement and the Loan Documents represent the
entire agreement about this subject matter, and supersede prior negotiations or agreements. All
prior agreements, understandings, representations, warranties, and negotiations between the parties
about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the
Loan Documents.

     12.6 Counterparts. This Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and delivered, are an
original, and all taken together, constitute one Agreement.

     12.7 [Omitted].

     12.8 Survival. All covenants, representations and warranties made in this Agreement
continue in full force until this Agreement has terminated pursuant to its terms and all
Obligations (other than inchoate indemnity

14

 

obligations and any other obligations which, by their terms, are to survive the termination of
this Agreement) have been satisfied. The obligation of Borrower in Section 12.2 to indemnify Bank
shall survive until the statute of limitations with respect to such claim or cause of action shall
have run.

     12.9 Confidentiality. In handling any confidential information, Bank shall exercise
the same degree of care that it exercises for its own proprietary information, but disclosure of
information may be made: (a) to Bank’s Subsidiaries or Affiliates; (b) to prospective transferees
or purchasers of any interest in the Advances (provided, however, Bank shall use commercially
reasonable efforts to obtain such prospective transferee’s or purchaser’s agreement to the terms of
this provision); (c) as required by law, regulation, subpoena, or other order, (d) to Bank’s
regulators or as otherwise in connection with Bank’s examination or audit; and (e) as Bank
considers appropriate in exercising remedies under this Agreement. Confidential information does
not include information that either: (i) is in the public domain or in Bank’s possession when
disclosed to Bank, or becomes part of the public domain after disclosure to Bank; or (ii) is
disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from
disclosing the information.

     12.10 Attorneys’ Fees, Costs and Expenses. In any action or proceeding between
Borrower and Bank arising out of or related to the Loan Documents, the prevailing party will be
entitled to recover its reasonable attorneys’ fees and other reasonable costs and expenses
incurred, in addition to any other relief to which it may be entitled.

     13 DEFINITIONS

     13.1 Definitions. In this Agreement:

     “Account” is any “account” as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.

     “Account Debtor” is as defined in the Code and shall include, without limitation, any person
liable on any Financed Receivable, such as, a guarantor of the Financed Receivable and any issuer
of a letter of credit or banker’s acceptance.

     “Adjustments” are all discounts, allowances, returns, disputes, counterclaims, offsets,
defenses, rights of recoupment, rights of return, warranty claims, or short payments, asserted by
or on behalf of any Account Debtor for any Financed Receivable.

     “Advance” is defined in Section 2.1.1.

     “Advance Rate” is eighty percent (80.0%), net of any offsets related to each specific Account
Debtor or such other percentage as Bank establishes under Section 2.1.1; provided, however, that
Bank may decrease the foregoing percentage in its sole discretion based on events, conditions,
contingencies, or risks which, as determined by Bank, may adversely affect Collateral.

     “Affiliate” is a Person that owns or controls directly or indirectly the Person, any Person
that controls or is controlled by or is under common control with the Person, and each of that
Person’s senior executive officers, directors, partners and, for any Person that is a limited
liability company, that Person’s managers and members.

     “Applicable Rate” is a per annum rate equal to the Prime Rate plus two and three-quarters of
one percent (2.75%), provided that the Applicable Rate in effect on any day shall not be less than
6.25% per annum; provided, however, if Borrower’s Quick Ratio is greater than 0.75
to 1.0 for any given month, then the Applicable Rate shall be reduced to the Prime Rate plus two
and one-quarter of one percent (2.25%) commencing on the first day of the month following Bank’s
receipt of Borrower’s financial statements evidencing such Quick Ratio and continuing for each
month thereafter so long as Borrower’s maintains a Quick Ratio of greater than 0.75 to 1.0,
provided that the Applicable Rate in effect on any day shall not be less than 6.25% per annum.

15

 

     “Bank Expenses” are all audit fees and expenses and reasonable costs or expenses (including
reasonable attorneys’ fees and expenses) for preparing, negotiating, administering, defending and
enforcing the Loan Documents (including appeals or Insolvency Proceedings).

     “Borrower’s Books” are all Borrower’s books and records including ledgers, records regarding
Borrower’s assets or liabilities, the Collateral, business operations or financial condition and
all computer programs or discs or any equipment containing the information.

     “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.

     “Closing Date” is the date of this Agreement.

     “Code” is the Uniform Commercial Code as adopted in California, as amended and as may be
amended and in effect from time to time.

     “Collateral” is any and all properties, rights and assets of Borrower granted by Borrower to
Bank or arising under the Code, now, or in the future, in which Borrower obtains an interest, or
the power to transfer rights, as described on Exhibit A.

     “Collateral Handling Fee” is defined in Section 2.2.4.

     “Collections” are all funds received by Bank from or on behalf of an Account Debtor for
Financed Receivables.

     “Compliance Certificate” is attached as Exhibit B.

     “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (i) any indebtedness, lease, dividend, letter of credit or other obligation
of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted
or sold with recourse by that Person, or for which that Person is directly or indirectly liable;
(ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) all
obligations from any interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent
Obligation” does not include endorsements in the ordinary course of business. The amount of a
Contingent Obligation is the stated or determined amount of the primary obligation for which the
Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability
for it determined by the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.

     “Current Liabilities” is all obligations and liabilities of Borrower to Bank, plus, without
duplication, the aggregate amount of Borrower’s Total Liabilities which mature within one (1) year.

     “Deferred Revenue” is all amounts received or invoiced, as appropriate, in advance of
performance under contracts and not yet recognized as revenue.

     “Early Termination Fee” is defined in Section 2.1.1.

     “Eligible Accounts” are billed Accounts in the ordinary course of Borrower’s business that
meet all Borrower’s representations and warranties in Section 5.3, have been, at the option of
Bank, confirmed in accordance with Section 2.1.1 (d), and are due and owing from Account Debtors
deemed creditworthy by Bank in its sole discretion (and shall include, without limitation, Eligible
Foreign Accounts). Without limiting the fact that the determination of which Accounts are eligible
hereunder is a matter of Bank discretion in each instance, Eligible Accounts shall not include the
following Accounts (which listing may be amended or changed in Bank’s discretion with notice to
Borrower):

     (a) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date;

16

 

     (b) Accounts for which the Account Debtor does not have its principal place of business in the
United States, unless agreed to by Bank in writing, in its sole discretion, on a case-by-case basis
(except Eligible Foreign Accounts);

     (c) Accounts for which the Account Debtor is a federal, state or local government entity or
any department, agency, or instrumentality thereof except for Accounts of the United States if the
payee has assigned its payment rights to Bank and the assignment has been acknowledged under the
Assignment of Claims Act of 1940 (31 U.S.C. 3727);

     (d) Accounts for which Borrower owes the Account Debtor, but only up to the amount owed
(sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts);

     (e) Accounts for demonstration or promotional equipment, or in which goods are consigned,
sales guaranteed, sale or return, sale on approval, bill and hold, or other terms if the Account
Debtor’s payment may be conditional;

     (f) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;

     (g) Accounts in which the Account Debtor disputes liability or makes any claim and Bank
believes there may be a basis for dispute (but only up to the disputed or claimed amount), or if
the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of
business;

     (h) Accounts subject to contractual arrangements between Borrower and an Account Debtor where
payments shall be scheduled or due according to completion or fulfillment requirements where the
Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to
perform in accordance with the contract (sometimes called contracts accounts receivable, progress
billings, milestone billings, or fulfillment contracts);

     (i) Accounts for which Bank reasonably determines collection to be doubtful or any Accounts
which are unacceptable to Bank for any reason; and

     (j) Accounts owing from an Account Debtor with respect to which Borrower has received Deferred
Revenue (but only to the extent of the Deferred Revenue).

     “Eligible Foreign Accounts” are otherwise Eligible Accounts for which the Account Debtor does
not have its principal place of business in the United States but which (a) are covered by credit
insurance satisfactory to Bank, less any deductible or (b) have been approved by Bank in writing,
in its sole discretion, and on a case-by-case basis.

     “ERISA” is the Employment Retirement Income Security Act of 1974, and its regulations.

     “Events of Default” are set forth in Article 8.

     “Facility Amount” is Twelve Million Five Hundred Thousand Dollars ($12,500,000) of which no
more than Six Million Two Hundred and Fifty Thousand Dollars ($6,250,000) may be with respect to
Foreign Accounts. If the Foreign Accounts Facility is entered into, then the Six Million Two
Hundred and Fifty Thousand Dollars ($6,250,000) subfacility with respect to Foreign Accounts
referenced above shall be terminated. The Foreign Accounts Facility is subject to (i) a
satisfactory review by Bank of the terms and provisions thereof and (ii) Bank and FGI (or such
other factor) entering into an intercreditor agreement in form and substance satisfactory to Bank
in its sole discretion.

     “Facility Fee” is defined in Section 2.2.2.

     “Finance Charges” is defined in Section 2.2.3.

17

 

     “Financed Receivables” are all those Eligible Accounts, including their proceeds which Bank
finances and makes an Advance, as set forth in Section 2.1.1. A Financed Receivable stops being a
Financed Receivable (but remains Collateral) when the Advance made for the Financed Receivable has
been fully paid.

     “Financed Receivable Balance” is the total outstanding gross face amount, at any time, of any
Financed Receivable.

     “Foreign Accounts” are Accounts for which the Account Debtor does not have its principal place
of business in the United States.

     “Foreign Accounts Facility” is defined in Section 2.1.1(b).

     “GAAP” is generally accepted accounting principles.

     “Good Faith Deposit” is defined in Section 2.2.8.

     “Governmental Authority” is 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.

     “Guarantor” is any present or future guarantor of the Obligations.

     “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations and (d) Contingent Obligations.

     “Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

     “Investment” is any beneficial ownership of (including stock, partnership interest or other
securities) any Person, or any loan, advance or capital contribution to any Person.

     “Invoice Transmittal” shows Eligible Accounts which Bank may finance and, for each such
Account, includes the Account Debtor’s, name, address, invoice amount, invoice date and invoice
number.

     “Intellectual Property Collateral” is defined in Exhibit A.

     “Lockbox” is defined in Section 2.2.7.

     “Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance.

     “Loan Documents” are, collectively, this Agreement, any note, or notes or guaranties executed
by Borrower or Guarantor, and any other present or future agreement between Borrower and/or for the
benefit of Bank in connection with this Agreement, all as amended, extended or restated.

     “Material Adverse Change” is: (i) A material impairment in the perfection or priority of
Bank’s security interest in the Collateral or in the value of such Collateral; (ii) a material
adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or
(iii) a material impairment of the prospect of repayment of any portion of the Obligations; or (iv)
Bank determines, based upon information available to it and in its reasonable judgment, that there
is a reasonable likelihood that Borrower shall fail to comply with one or more of the financial
covenants in Section 6 during the next succeeding financial reporting period.

     “Maturity Date” is 364 days from the date of this Agreement.

18

 

     “Obligations” are all advances, liabilities, obligations, covenants and duties owing, arising,
due or payable by Borrower to Bank now or later under this Agreement or any other document,
instrument or agreement, account (including those acquired by assignment) primary or secondary,
such as all Advances, Finance Charges, Facility Fee, Early Termination Fee, Collateral Handling
Fee, interest, fees, expenses, professional fees and attorneys’ fees, or other amounts now or
hereafter owing by Borrower to Bank.

     “Perfection Certificate” is a certain Perfection Certificate completed and delivered by
Borrower to Bank in connection with this Agreement.

     “Permitted Indebtedness” is:

     (a) Borrower’s indebtedness to Bank under this Agreement or the Loan Documents;

     (b) Subordinated Debt;

     (c) Indebtedness to trade creditors incurred in the ordinary course of business; and

     (d)
Indebtedness secured by Permitted Liens (including the Indebtedness incurred
under the Foreign Accounts Facility).

     “Permitted Investments” are: (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any state maturing within 1 year from its
acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the
highest rating from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc., (iii)
Bank’s certificates of deposit issued maturing no more than 1 year after issue, (iv) any other
investments administered through Bank.

     “Permitted Liens” are:

     (a) Liens arising under this Agreement or other Loan Documents;

     (b) Liens for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrower maintains adequate reserves on
its Books, if they have no priority over any of Bank’s security interests;

     (c) Purchase money Liens securing no more than $200,000 in the aggregate amount outstanding
(i) on equipment acquired or held by Borrower incurred for financing the acquisition of the
equipment, or (ii) existing on equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the equipment;

     (d) Leases or subleases and non-exclusive licenses or sublicenses granted in the ordinary
course of Borrower’s business, if the leases, subleases, licenses and sublicenses permit
granting Bank a security interest;

     (e) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (d), but any extension, renewal or replacement Lien must be
limited to the property encumbered by the existing Lien and the principal amount of the
indebtedness may not increase.

     (f) Liens arising under the Foreign Accounts Facility.

     “Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.

     “Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest
rate.

19

 

     “Quick Assets” is, on any date, Borrower’s unrestricted cash, cash equivalents, net accounts
receivable and investments with maturities of fewer than 12 months determined according to GAAP.

     “Reconciliation Day” is the last calendar day of each month.

     “Reconciliation Period” is each calendar month.

     “Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made.

     “Requirement of Law” is as to any Person, the organizational or governing documents of such
Person, and any law (statutory or common), 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” is each of the Chief Executive Officer, President, Chief Financial
Officer and Controller of Borrower.

     “Subordinated Debt” is debt incurred by Borrower subordinated to Borrower’s debt to Bank
(pursuant to a subordination agreement entered into between Bank, Borrower and the subordinated
creditor), on terms acceptable to Bank.

     “Subsidiary” is any Person, corporation, partnership, limited liability company, joint
venture, or any other business entity of which more than 50% of the voting stock or other equity
interests is owned or controlled, directly or indirectly, by the Person or one or more Affiliates
of the Person.

     “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, and current
portion of Subordinated Debt permitted by Bank to be paid by Borrower, but excluding all other
Subordinated Debt.

[Signature page follows.]

20

 

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

	 	 	 	 	 
	BORROWER:
	 
	 	 	 	 
	OCZ TECHNOLOGY GROUP, INC.
	 
	 	 	 	 
	By_________________________________________________
	 	 	 	 
	Name:_______________________________________________
	 	 	 	 
	Title:________________________________________________
	 	 	 	 
	 
	 	 	 	 
	BANK:
	 	 	 	 
	 
	 	 	 	 
	SILICON VALLEY BANK
	 	 	 	 
	 
	 	 	 	 
	By _________________________________________________
	 	 	 	 
	Name:_______________________________________________
	 	 	 	 
	Title:________________________________________________
	 	 	 	 

21

 

EXHIBIT A

     The Collateral consists of all of Borrower’s right, title and interest in and to the
following:

     All goods, equipment, inventory, contract rights or rights to payment of money, leases,
license agreements, franchise agreements, general intangibles (including payment intangibles)
accounts (including health-care receivables), documents, instruments (including any promissory
notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters
of credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort
claims, securities, and all other investment property, supporting obligations, and financial
assets, whether now owned or hereafter acquired, wherever located; and any copyright rights,
copyright applications, copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished, now owned or later acquired; any patents,
trademarks, service marks and applications therefor; trade styles, trade names, any trade secret
rights, including any rights to unpatented inventions, know-how, operating manuals, license rights
and agreements and confidential information, now owned or hereafter acquired; or any claims for
damages by way of any past, present and future infringement of any of the foregoing; and all
Borrower’s books relating to the foregoing and any and all claims, rights and interests in any of
the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.

Notwithstanding the foregoing, the Collateral shall not be deemed to include any of the following
(the “Intellectual Property”): any copyrights (including computer programs, blueprints and
drawings), copyright applications, copyright registration and like protection in each work of
authorship and derivative work thereof, whether published or unpublished, now owned or hereafter
acquired; any design rights; any patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, trademarks, servicemarks and applications therefor, whether
registered or not, except that the Collateral shall include all accounts, license and royalty fees
and other revenues, proceeds, or income arising out of or relating to any of the foregoing.

Borrower and Bank are parties to that certain negative pledge arrangement whereby Borrower, in
connection with Bank’s loan(s) to Borrower, has agreed not to sell, transfer, assign, mortgage,
pledge, lease grant a security interest in, or encumber any of its intellectual property without
Bank’s prior written consent.

1

 

EXHIBIT B

SPECIALTY FINANCE DIVISION

Compliance Certificate

     I, an authorized officer of OCZ Technology Group, Inc. (“Borrower”) certify under the Loan and
Security Agreement (the “Agreement”) between Borrower and Silicon Valley Bank (“Bank”) as follows
(all capitalized terms used herein shall have the meaning set forth in the Agreement):

Borrower represents and warrants for each Financed Receivable:

Each Financed Receivable is an Eligible Account.

Borrower is the owner with legal right to sell, transfer, assign and encumber such Financed
Receivable;

The correct amount is on the Invoice Transmittal and is not disputed;

Payment is not contingent on any obligation or contract and Borrower has fulfilled all its
obligations as of the Invoice Transmittal date;

Each Financed Receivable is based on an actual sale and delivery of goods and/or services rendered,
is due to Borrower, is not past due or in default, has not been previously sold, assigned,
transferred, or pledged and is free of any liens, security interests and encumbrances other than
Permitted Liens;

There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim
any deduction or discount;

It reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings;

It has not filed or had filed against it Insolvency Proceedings and does not anticipate any filing;

Bank has the right to endorse and/ or require Borrower to endorse all payments received on Financed
Receivables and all proceeds of Collateral.

No representation, warranty or other statement of Borrower in any certificate or written statement
given to Bank contains any untrue statement of a material fact or omits to state a material fact
necessary to make the statement contained in the certificates or statement not misleading.

Additionally, Borrower represents and warrants as follows:

Borrower and each Subsidiary is duly existing and in good standing in its state of formation and
qualified and licensed to do business in, and in good standing in, any state in which the conduct
of its business or its ownership of property requires that it be qualified except where the failure
to do so could not reasonably be expected to cause a Material Adverse Change. The execution,
delivery and performance of the Loan Documents have been duly authorized, and do not conflict with
Borrower’s organizational documents, nor constitute an event of default under any material
agreement by which Borrower is bound. Borrower is not in default under any agreement to which or
by which it is bound in which the default could reasonably be expected to cause a Material Adverse
Change.

Borrower has good title to the Collateral, free of Liens except Permitted Liens. All inventory is
in all material respects of good and marketable quality, free from material defects.

1

 

Borrower is not an “investment company” or a company “controlled” by an “investment company” under
the Investment Company Act. Borrower is not engaged as one of its important activities in
extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of
Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards
Act. Borrower has not violated any laws, ordinances or rules, the violation of which could
reasonably be expected to cause a Material Adverse Change. None of Borrower’s or any Subsidiary’s
properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s
knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than legally. Borrower and each Subsidiary has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes, except those being
contested in good faith with adequate reserves under GAAP. Borrower and each Subsidiary has
obtained all consents, approvals and authorizations of, made all declarations or filings with, and
given all notices to, all government authorities that are necessary to continue its business as
currently conducted except where the failure to obtain or make such consents, declarations, notices
or filings would not reasonably be expected to cause a Material Adverse Change.

All representations and warranties in the Agreement are true and correct in all material respects
on this date, and the Borrower represents that there is no existing Event of Default.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	Monthly financial statements with Compliance Certificate

	 	Monthly within 30 days
	 	Yes   No
	Annual financial statement (CPA Audited) + CC

	 	FYE within 180 days
	 	Yes   No
	10-Q, 10-K and 8-K (if applicable)

	 	Within 5 days after filing with SEC
	 	Yes   No
	Board approved financial projections

	 	Within 45 days before start of FY
	 	Yes   No
	Monthly A/R, A/P agings

	 	Monthly within 15 days
	 	Yes   No
	Monthly Deferred Revenue Report

	 	Monthly within 30 days
	 	Yes   No

	 	 	 
	Net Cash Calculation under the Revolving Line of Credit
	 
	Cash as of period ending                     

	 	                         $                    
	Current SVB Revolving Loan Outstanding Amount (net)

	 	$(                    )
	Net Cash Balance

	 	                         $                    

	 	 	 	 	 
	Performance Pricing	 	Applies
	Quick Ratio £ 0.75 to 1.0

	 	Prime + 2.75%
	 	Yes   No
	Quick Ratio > 0.75 to 1.0

	 	Prime + 2.25%
	 	Yes   No

	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	Actual	 	Complies
	Maintain on a Monthly Basis:
	 	 	 	 	 	 
	Quick Ratio

	 	0.50 to 1.0
	 	___ to 1.0
	 	Yes   No

2

 

The following are the exceptions with respect to the certification above: (If no exceptions exist,
state “No exceptions to note.”)

      

      

      

	 	 	 
	OCZ TECHNOLOGY GROUP, INC.
	 	AGENT USE ONLY
	 
	 	 
	 
	 	Received by: ______________________________________
	By: ___________________________
	 	                     AUTHORIZED SIGNER
	Name: _________________________
	 	Date: ____________________________________________
	Title: __________________________
	 	 
	 
	 
	 	Verified: _________________________________________
	 
	 	                      AUTHORIZED SIGNER
	 
	 	 
	 
	 	Date: ____________________________________________
	 
	 	 
	 
	 	Compliance Status:      Yes    No

3exv10w16

Exhibit 10.16

SALE OF ACCOUNTS AND SECURITY AGREEMENT

Date: July 6, 2009

     OCZ Technology Group, Inc., a Delaware corporation, with its principal offices at 6373 San
Ignacio Avenue, San Jose, CA 95119 (“Seller”) and Faunus Group International, Inc., a Delaware
corporation (“FGI”), hereby agree, intending to be legally bound, to the terms and
conditions set forth in this Sale of Accounts and Security Agreement (“Agreement”).

     Section 1.1 Definitions for the purposes of this Agreement and unless defined
otherwise herein, all terms used shall have the meanings assigned to them in this Section 1.1:

     “Account(s)” has the definition contained in the UCC and which shall include a right
to payment of a monetary obligation, whether or not earned by performance, (i) for property that
has been or is to be sold, leased, licensed, assigned, or otherwise disposed of or (ii) for
services rendered or to be rendered.

     “Account Debtor” has the definition contained in the UCC and which includes any Person
who is obligated on an Account, Chattel Paper or General Intangible.

     “Advance” means amounts advanced by FGI to the Seller under this Agreement.

     “Agreement” means this Agreement, including the Exhibits and any Schedules hereto, and
all amendments, modifications and supplements hereto and thereto and restatements hereof and
thereof.

     “Application” means each application made by Seller in connection with this Agreement.

     “Avoidance Claim” means any claim that any payment received by FGI from or for the
account of an Account Debtor is avoidable under the Bankruptcy Code or any other debtor relief
statute.

     “Chattel Paper” has the definition contained in the UCC and which includes a record or
records that evidence both a monetary obligation and a security interest in specific goods, a
security interest in specific goods and software used in the goods, a security interest in specific
goods and license of software used in the goods, a lease of specific goods, or a lease of specific
goods and license of software used in the goods.

     “Collateral” means and includes all of the Sellers’ right, title and interest in and
to each of the following, wherever located and whether now or hereafter existing or now owned or
hereafter acquired or arising: (a) all Accounts, (b) Chattel Paper, (c) Commercial Tort Claims, (d)
Deposit Accounts, (e) Documents, (f) Equipment, (g) General Intangibles, (h) Goods (including but
not limited to all files, correspondence, computer programs, tapes, disks and related data
processing software which contain information identifying or pertaining to any of the Collateral or
any Account Debtor or showing the amounts thereof or payments thereon or otherwise necessary or
helpful in the realization thereon or the collection thereof, (i) Inventory, (j) Investments, (k)
Investment Property, (l) Letters of Credit and Letter of Credit rights, (m) all Supporting
Obligations and (n) all cash and non-cash proceeds of the foregoing, including insurance proceeds.
Notwithstanding the foregoing, “Collateral” shall not mean or include any Intellectual Property;
provided, however, that the Collateral shall include all accounts receivables, accounts, chattel
paper, instruments and general intangibles that constitute rights to payment and proceeds from the
sale, licensing or disposition of all or any part, or rights in, the foregoing (the “Rights to
Payment”); and provided, further, that if a judicial authority (including a U.S. Bankruptcy Court)
holds that a security interest in the underlying Intellectual Property is necessary to have a
security interest in the Rights to Payment, then the Collateral shall automatically, and effective
as of the date hereof, include the Intellectual Property to the extent necessary to permit
perfection of FGI’s security interest in the Rights to Payment.

     “Commercial Tort Claim” has the definition contained in the UCC.

     “Credit Approval(s) and Credit Approved” means, with regard to a Purchased Account,
that FGI has accepted the risk of nonpayment as specified under the terms and conditions of this
Agreement and with regard

 

 

to the specific Purchased Accounts for which written credit approval has been given. If an
Account Debtor, after receiving and accepting the delivery of Goods or services (subject to all
warranties herein) for which FGI has given written Credit Approval, fails to pay a Purchased
Account when due, and such nonpayment is due solely to financial inability to pay, FGI shall bear
any loss thereon, subject to the terms and provisions stated herein. If nonpayment is due to any
reason besides financial inability to pay, however, FGI shall not be responsible. Specifically,
FGI shall not be responsible for any nonpayment of a Credit Approved Purchased Account: (a) because
of the assertion of any claim or dispute by an Account Debtor for any reason whatsoever, including,
without limitation, dispute as to price, terms of sales, delivery, quantity, quality, or other, or
the exercise of any counterclaim or offset (whether or not such claim, counterclaim or offset
relates to the specific Purchased Account); (b) where nonpayment is a consequence of enemy attack,
civil commotion, strikes, lockouts, the act or restraint of public authorities, acts of God or
force majeure; or (c) if any representation or warranty made by Seller to FGI in respect of such
Purchased Account has been breached whether intentionally or unintentionally. The assertion of a
dispute by an Account Debtor shall have the effect of negating any Credit Approval on the affected
Purchased Account(s) and such Purchased Account(s) shall be at Full Recourse until paid or
otherwise cleared from FGI’s books.

     “Date of Collection” means the date a check, draft or other item representing payment
on an invoice is received by FGI plus two (2) business days.

     “Deficiency Assessment” means charges as set forth in Section 3 of this Agreement
applied to the difference between the minimum monthly net funds employed and the actual net funds
employed for the month and shall be chargeable to Reserve Account, or at FGI’s option, payable by
Seller on FGI’s demand.

     “Default” means any of the events specified in Section 10 of this Agreement that, with
the passage of time or giving of notice or both, would constitute an Event of Default.

     “Deposit Account” has the definition contained in the UCC and which includes any
demand, time, savings, passbook or like account maintained with a bank, savings and loan
association, credit union or like organization, other than an account evidenced by a certificate of
deposit that is an instrument under the UCC.

     “Dispute or Disputed Account” means any claim, whether or not provable, bona fide, or
with or without support, made by an Account Debtor as a basis for refusing to pay a Purchased
Account, either in whole or in part, including, but not limited to, any contract dispute, charge
back, credit, right to return Goods, or other matter which diminishes or may diminish the dollar
amount or timely collection of such PurchasedAccount.

     “Documents” means a document of title or a receipt of the type described in UCC
7-201(2).

     “Equipment” has the definition contained in the UCC.

     “Event of Default” means any of the events specified in Section 10 of this Agreement.

     “Facility Amount” means $10,000,000; provided FGI may from time to time and at any
time increase or decrease such amount in its sole and absolute discretion.

     “Financial Inability to Pay” means an Account Debtor’s insolvency such that the value
of its assets is exceeded by its fixed, liquidated and non-contingent liabilities.

     “Financing Statement” means each Uniform Commercial Code financing statement naming
FGI as purchaser/secured party and the Seller as Seller/debtor, in connection with this Agreement.

     “Full Recourse” means those Purchased Accounts for which FGI has not given Credit
Approval, for which Credit Approval has been withdrawn or revoked or with respect to which FGI is
not responsible under Section 2.

     “Foreign Account(s)” means all of Debtor’s Accounts owing from Account Debtors which
have a principal place of business or executive office outside the United States of America.

2

 

     “GAAP” means generally accepted accounting principles consistently applied and
maintained throughout the period indicated and consistent with the prior financial practice of the
Person referred to.

     “General Intangible” has the definition contained in the UCC.

     “Goods” has the definition contained in the UCC.

     “Instrument” has the definition contained in the UCC and which includes a negotiable
instrument or any other writing that evidences a right to the payment of a monetary obligation, is
not itself a security agreement or lease, and is of a type that in ordinary course of business is
transferred by delivery with any necessary endorsement or assignment.

     “Intellectual Property” means each Seller’s right, title and interest in and to
patents, patent rights (and applications and registrations therefor), trademarks and service marks
(and applications and registrations therefor), inventions, copyrights, mask works (and applications
and registrations therefor), trade names, trade styles, software and computer programs, source
code, object code, trade secrets, methods, processes, know how, drawings, specifications,
descriptions, and all memoranda, notes, and records with respect to any research and development,
all whether now owned or subsequently acquired or developed by such Seller and whether in tangible
or intangible form or contained on magnetic media readable by machine together with all such
magnetic media (but not including embedded computer programs and supporting information included
within the definition of “goods” under the UCC).

     “Inventory” has the definition contained in the UCC.

     “Investment Property” has the definition contained in the UCC.

     “Letter of Credit Right” has the definition contained in the UCC.

     “Lien” means, as applied to the property of any Person, the filing of, or any
agreement to give, any financing statement under the UCC or its equivalent in any jurisdiction.

     “Misdirected Payment Fee” means 15% of the amount of any payment on account of a
Purchased Account which has been received by Seller and not delivered in kind to FGI on the next
business day following the date of receipt by Seller.

     “Net Invoice Amount” means the invoice amount of the Purchased Account, less returns
(whenever made), all selling discounts (at FGI’s sole option, calculated on shortest terms), and
credit or deductions of any kind allowed or granted to or taken by the Account Debtor at any time.

     “Obligations” means all present and future obligations owing by Seller to FGI whether
or not for the payment of money, whether or not evidenced by any note or other instrument, whether
direct or indirect, absolute or contingent, due or to become due, joint or several, primary or
secondary, liquidated or unliquidated, secured or unsecured, original or renewed or extended,
whether arising before, during or after the commencement of any Bankruptcy Case in which Seller is
a debtor (specifically including interest accruing after the commencement of any bankruptcy,
insolvency or similar proceeding with respect to Seller, whether or not a claim for such
post-commencement interest is allowed), including but not limited to any obligations arising
pursuant to letters of credit or acceptance transactions or any other financial accommodations.

     “Original Term” means the term of this Agreement as reflected in Section 13 and
“Term” means the Original Term and any extensions thereof.

     “Person” means an individual, corporation, partnership, limited liability company,
association, trust or unincorporated organization or a government or any agency or political
subdivision thereof.

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     “Purchase Price” means the price that FGI pays Seller for each Purchased Account which
price shall equal the Net Invoice Amount less FGI’s fees.

     “Purchased Account(s)” means a Foreign Account which is deemed acceptable for purchase
as determined by FGI in the exercise of its reasonable sole credit or business judgment and for
which FGI has made payment of the sum specified in Section 2 constituting FGI’s acceptance of such
Foreign Account.

     “Reserve Account” means (a) a bookkeeping account on the books of FGI and/or (b) an
account of FGI in which FGI deposits the Required Reserve Amount from time to time, in either case
representing an unpaid portion of the Purchase Price, maintained by FGI to ensure Seller’s
performance with the provisions hereof.

     “Reserve Percentage” means 25% of the face amount of the Purchased Accounts and as
such percent may change in accordance herewith.

     “Reserve Shortfall” means the amount by which the Reserve Account is less than the
Required Reserve Amount.

     “Required Reserve Amount” means the Reserve Percentage multiplied by the unpaid
balance of all Purchased Accounts and as such amount may change in accordance herewith.

     “Schedule of Accounts” means a schedule of Accounts in a form supplied by FGI from
time to time wherein Seller lists all the existing Accounts of Seller, which Seller is required to
offer for sale to FGI under the terms of this Agreement.

     “Security Interest” means the Liens of FGI on and in the Collateral affected hereby or
pursuant to the terms hereof or thereof.

     “Supporting Obligation” has the definition contained in the UCC.

     “Termination Fee” means a fee payable to FGI in the event Seller terminates this
Agreement prior to maturity of the Original Term or Term of this Agreement.

     “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
New York.

     Section 1.2 Other Referential Provisions.

     (a) Except as otherwise expressly provided herein, all accounting terms not specifically
defined or specified herein shall have the meanings generally attributed to such terms under GAAP
including, without limitation, applicable statements and interpretations issued by the Financial
Accounting Standards Board and bulletins, opinions, interpretations and statements issued by the
American Institute of Certified Public Accountants or its committees.

     (b) All personal pronouns used in this Agreement, whether used in the masculine, feminine or
neuter gender, shall include all other genders; the singular shall include the plural, and the
plural shall include the singular.

     (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 provisions of this
Agreement.

     (d) Titles of Articles and Sections in this Agreement are for convenience only, do not
constitute part of this Agreement and neither limit nor amplify the provisions of this Agreement,
and all references in this Agreement to Articles, Sections, Subsections, paragraphs, clauses, sub
clauses, Schedules or Exhibits shall refer to the corresponding Article, Section, Subsection,
paragraph, clause or sub clause of, or Schedule or Exhibit attached to, this Agreement, unless
specific reference is made to the articles, sections or other subdivisions or divisions of, or to schedules or exhibits to, another document or instrument.

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     (e) Each definition of a document in this Agreement shall include such document as amended,
modified, supplemented or restated from time to time in accordance with the terms of this
Agreement.

     Section 1.3 Exhibits and Schedules. All Exhibits and Schedules attached hereto are by
reference made a part hereof.

     Section 2. Purchase & Sale of Accounts.

     (a) Seller hereby offers to sell, assign, transfer, convey and deliver to FGI, as absolute
owner, in accordance with the procedure detailed herein, all of Seller’s right, title and interest
in and to Seller’s Foreign Accounts; provided at no time shall the maximum aggregate amount paid by
FGI for Accounts purchased from Seller outstanding on FGI’s books exceed the Facility Amount.

     (b) All Foreign Accounts shall be submitted to FGI on a Schedule of Accounts listing each
Foreign Account separately. The Schedule of Accounts shall be in the form attached hereto as
Schedule 2(b) or in such other form as required by FGI, and shall be signed by a person
acting or purporting to act on behalf of Seller. At the time the Schedule of Accounts is
presented, Seller shall also deliver to FGI one copy of a sales contract, purchase order, and
invoice for each Foreign Account together with evidence of shipment, furnishing and/or delivery of
the Goods or rendition of service(s).

     (c) Any and all Purchased Accounts shall be purchased on either a Credit Approved or with Full
Recourse basis, as determined by FGI in its sole and absolute discretion. In the absence of
written Credit Approval, the Purchased Accounts shall be purchased at Full Recourse. If Goods are
shipped or services are provided based on a verbal approval, it is Seller’s responsibility to
ensure that such approval is received in writing in a timely manner. Credit Approval(s) may be
withdrawn, either orally or in writing, in FGI’s sole and absolute discretion at any time if, in
FGI’s opinion, an Account Debtor’s credit standing or ability to perform with respect to the
applicable Account becomes impaired before actual delivery of Goods or rendering of services.
Credit Approval(s) shall be limited to the specific terms and amounts indicated, and,
notwithstanding any information subsequently provided to Seller by FGI, such Credit Approval(s) are
automatically rescinded and withdrawn if the terms of sale vary from the terms approved by FGI, or
if the terms of sale are changed by Seller without FGI’s written Credit Approval on the new terms,
or if the Purchased Account is not assigned to FGI within ten (10) days from the date of the
invoice, or if the amount of outstanding Accounts of an Account Debtor exceed the maximum Credit
Approval amount for the Account Debtor as determined by FGI from time to time. Seller further
acknowledges that if Seller ships Goods or provides services to an Account Debtor who has
outstanding Accounts from Seller, and such Account Debtor’s credit line and/or outstanding Credit
Approval(s) have been withdrawn by FGI, and the Accounts created thereby, whether or not they are
sold and assigned to FGI, exceed 10% of the amount Accounts purchased from Seller outstanding on
FGI’s books, that any Credit Approvals applying to those Purchased Accounts outstanding on FGI’s
books are automatically deemed cancelled and all outstanding Purchased Accounts from that Account
Debtor are with Full Recourse.

     (d) With regard to sales without Credit Approval or deemed without Credit Approval, Seller
agrees that any payments or credits applying to any Account owing by such Account Debtor will be
applied: first, to any Credit-Approved Purchased Accounts outstanding on FGI’s books, if
any; second, to any Full Recourse Purchased Accounts outstanding on FGI’s books; and,
third, to any Accounts outstanding on Seller’s books. This order of payment applies
regardless of the respective dates the sales occurred and regardless of any notations on payment
items.

     (e) If FGI fails to collect a Purchased Account within ninety (90) days of its maturity for
which Credit Approval has been given, FGI shall pay to Seller the Net Invoice Amount of such
Purchased Account within a reasonable time period, subject to the terms and provisions stated
herein. At the sole discretion of FGI, Seller may have the option to repurchase any such Purchased
Account for which Credit Approval has been granted. Any Purchased Account for progress payments,
work-in-process, freight,

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samples or miscellaneous sales (including, without limitation, the sale of Goods and/or in
quantities not regularly sold by Seller) is always assigned to FGI at Full Recourse,
notwithstanding any written Credit Approval from FGI.

     (f) FGI shall have no liability of any kind for declining or refusing to give, or for
withdrawing, revoking, or modifying, any Credit Approval pursuant to the terms of this Agreement,
or for exercising or failing to exercise any rights or remedies FGI may have under this Agreement
or otherwise. In the event FGI declines to give Credit Approval on any order received by Seller
from an Account Debtor and in advising Seller of such decline FGI furnishes Seller with information
as to the credit standing of the Account Debtor, such information shall be deemed to have been
requested of FGI by Seller and FGI’s advice containing such information is recognized as a
privileged communication. Seller agrees that such information shall not be given to Seller’s
customers or to Seller’s sales representative(s). If necessary, Seller shall merely advise its
customer(s) that credit has been declined on the Account and that any questions should be directed
to FGI. Each Full Recourse Account(s) assigned to and purchased by FGI is with full recourse to
Seller and at Seller’s sole credit risk. FGI shall have the right to charge back to Seller’s
Reserve Account the amount of such Full Recourse Accounts at any time and from time to time either
before or after their maturity. Seller agrees to pay FGI upon demand the full amount thereof,
together with all expenses incurred by FGI up to the date of such payment, including reasonable
attorney’s fees in attempting to collect or enforce such payment or payment of such Account(s).
FGI’s Credit Approval shall only begin after the first 15% of all Purchased Accounts relating to
each Account Debtor. For purposes of determining FGI’s Credit Approval hereunder, the Purchased
Account(s) balance due FGI from any given Account Debtor shall be calculated as the aggregate
amount owed by that Account Debtor less any credits to which such Account Debtor may be entitled,
and is not to be construed to mean individual invoices owed by that Account Debtor.

     Section 3. Purchase Price and Fees.

     (a) The purchase price that FGI shall pay to Seller for each Purchased Account shall equal the
Net Invoice Amount thereof less FGI’s fees, as specified below. No discount, credit, allowance or
deduction with respect to any Purchased Account, unless shown on the face of an invoice, shall be
granted or approved by Seller to any Account Debtor without FGI’s prior written consent.

     (b) The purchase price (as computed above), less (i) any Required Reserve Amount or credit
balance that FGI, in FGI’s sole and absolute discretion, determines to hold, (ii) moneys remitted,
paid, or otherwise advanced by FGI to or on behalf of Seller (including any amounts which FGI
reasonably determines that Seller may be obligated to pay in the future), and (iii) any other
charges provided for by this Agreement, shall be payable by FGI to Seller on the Date of
Collection.

     (c) FGI shall be entitled, in its sole and absolute discretion, to withhold the Required
Reserve Amount, and may increase or decrease the Required Reserve Amount or Reserve Percentage at
any time and from time to time if FGI deems it necessary to do so in order to protect FGI’s
interests. In no event shall Seller permit a Reserve Shortfall to occur. FGI may charge against
the Reserve Account any amount for which Seller may be obligated to FGI at any time, whether under
the terms of this Agreement, or otherwise, including but not limited to the repayment of any over
advance, any damages suffered by FGI as a result of Seller’s breach of any provision of Section 4
hereof (whether intentional or unintentional), any adjustments due and any attorneys’ fees, costs
and disbursements due. Seller recognizes that the Reserve Account may, in FGI’s sole discretion,
represent bookkeeping entries only and not cash funds. It is further agreed that with respect to
the balance in the Reserve Account, FGI is authorized to withhold, without giving prior notice to
Seller, such payments and credits otherwise due to Seller under the terms of this Agreement for
reasonably anticipated claims or to adequately satisfy reasonably anticipated obligation(s) Seller
may owe FGI. Upon the occurrence of an Event of Default, or, in the event Seller shall cease
selling Accounts to FGI, FGI shall be under no obligation to pay the amount maintained in the
Reserve Account until all Accounts listed on all Schedules of Accounts have been collected or FGI
has determined, in its sole and absolute discretion, that it will make no further efforts to
collect any Accounts and all sums due FGI hereunder have been paid.

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     (d) In FGI’s sole and absolute discretion, in accordance with the terms of this Agreement, FGI
may from time to time advance to Seller against the purchase price of Purchased Accounts purchased
by FGI hereunder, sums up to 75% of the aggregate purchase price of Purchased Accounts outstanding
at the time any such advance is made, less: (i) any such Purchased Accounts that are in dispute;
(ii) any such Purchased Accounts that are not credit approved; (iii); any such Purchased Accounts
aged ninety (90) days or more past invoice date; and (iv) any fees, actual or estimated, that are
chargeable to the Reserve Account. Any advance shall be payable on demand and shall bear interest
at the rate set forth in subsection (e) below from the date such advance is made until the date FGI
would otherwise be obligated hereunder to pay the purchase price of the Purchased Account(s)
against which such advance was made.

     (e) Interest upon the daily total outstanding balance of any Purchased Account shall be
charged to Seller’s Reserve Account at a rate greater of 8.00% per annum or 3.00% above the rate of
interest designated by FGI as its selected “Prime Rate” or “Base Rate’, as the case may be (which
as of the date hereof is based upon the Wall Street Journal, Money Rates Section which is subject
to change) on the net daily balance of all outstanding Purchased Accounts. In the event that the
Wall Street Journal ceases to publish a Prime Rate, then the Prime Rate shall be the average of the
three largest U.S. money center commercial banks, as determined by FGI. All such interest shall be
computed for the actual number of days elapsed on the basis of a year consisting of three hundred
sixty (360) days. Any adjustment in FGI’s interest rate, whether downward or upward will become
effective on the day in which the prime rate of interest is decreased or increased. If during any
month, a net credit balance (i.e., the reserve or credit balance exceeds outstanding Accounts),
then Seller agrees to credit FGI’s reserve account as of the last day of each month with interest
at a rate equal to 3.00% above the Prime Rate.

     (f) Seller shall unconditionally pay and FGI shall be entitled to receive a one time
non-refundable facility fee in an amount equal $100,000 payable in immediately available funds upon
signing of the Agreement.

     (g) Seller shall unconditionally pay and FGI shall be entitled to receive a non-refundable
monthly collateral management fee equal to 0.58% of the average monthly balance of Purchased
Accounts; with such fee charged monthly to Seller’s Reserve Account or if funds are not available
therein, payable by Seller on demand.

     (h) The minimum monthly net funds employed during each contract year hereof shall be
$2,500,000; any deficiency will be subject to a Deficiency Assessment.

     (i) IT IS THE INTENTION OF THE PARTIES HERETO THAT AS TO ALL PURCHASED ACCOUNTS, THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL CONSTITUTE A TRUE PURCHASE AND SALE OF ACCOUNT(S) UNDER §
9-318 OF THE UCC AND AS SUCH, THE SELLER SHALL HAVE NO LEGAL OR EQUITABLE INTEREST IN THE ACCOUNTS
SOLD. NEVERTHELESS, IN THE EVENT ALL OR ANY PORTION OF THIS TRANSACTION IS CHARACTERIZED AS A
LOAN, THE PARTIES HERETO INTEND TO CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM
TIME TO TIME IN EFFECT. IN FURTHERANCE THEREOF SUCH PARTIES STIPULATE AND AGREE THAT NONE OF THE
TERMS AND PROVISIONS CONTAINED IN THIS AGREEMENT SHALL EVER BE CONSTRUED TO CREATE A CONTRACT TO
PAY, FOR THE USE, FORBEARANCE OR DETENTION OF MONEY, INTEREST IN EXCESS OF THE MAXIMUM RATE (AS
HEREINAFTER DEFINED) FROM TIME TO TIME IN EFFECT. NEITHER SELLER, ANY PRESENT OR FUTURE GUARANTOR
OR ANY OTHER PERSON HEREAFTER BECOMING LIABLE FOR THE PAYMENT OF THE ADVANCES, SHALL EVER BE LIABLE
FOR ANY OBLIGATION THAT MAY BE CHARACTERIZED AS UNEARNED INTEREST THEREON OR SHALL EVER BE REQUIRED
TO PAY ANY OBLIGATION THAT MAY BE CHARACTERIZED AS INTEREST THEREON IN EXCESS OF THE MAXIMUM AMOUNT
THAT MAY BE LAWFULLY CHARGED UNDER APPLICABLE LAW FROM TIME TO TIME IN EFFECT, AND THE PROVISIONS
OF THIS SECTION SHALL CONTROL OVER ALL OTHER PROVISIONS OF THIS AGREEMENT WHICH MAY BE IN CONFLICT
THEREWITH. IF ANY INDEBTEDNESS OR OBLIGATION OWED BY SELLER HEREUNDER

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IS DETERMINED TO BE IN EXCESS OF THE LEGAL MAXIMUM, OR FGI SHALL OTHERWISE COLLECT MONEYS
WHICH ARE DETERMINED TO CONSTITUTE INTEREST WHICH WOULD OTHERWISE INCREASE THE INTEREST ON ALL OR
ANY PART OF SUCH OBLIGATIONS TO AN AMOUNT IN EXCESS OF THAT PERMITTED TO BE CHARGED BY APPLICABLE
LAW THEN IN EFFECT, THEN ALL SUCH SUMS DETERMINED TO CONSTITUTE INTEREST IN EXCESS OF SUCH LEGAL
LIMIT SHALL, WITHOUT PENALTY, BE PROMPTLY APPLIED TO REDUCE THE THEN OUTSTANDING OBLIGATIONS OR, AT
FGI’S OPTION, RETURNED TO SELLER OR THE OTHER PAYOR THEREOF UPON SUCH DETERMINATION. IF AT ANY
TIME THE RATE AT WHICH INTEREST IS PAYABLE HEREUNDER EXCEEDS THE MAXIMUM RATE, THE AMOUNT
OUTSTANDING HEREUNDER SHALL CEASE BEARING INTEREST UNTIL SUCH TIME AS THE TOTAL AMOUNT OF INTEREST
ACCRUED HEREUNDER EQUALS (BUT DOES NOT EXCEED) THE MAXIMUM RATE APPLICABLE HERETO. AS USED IN
THIS SECTION, THE TERM “APPLICABLE LAW” MEANS THE LAWS OF THE STATE OF NEW YORK OR, IF DIFFERENT,
THE LAWS OF THE STATE OR TERRITORY IN WHICH THE SELLER RESIDES, WHICHEVER LAW ALLOWS THE GREATER
RATE OF INTEREST, AS SUCH LAWS NOW EXIST OR MAY BE CHANGED OR AMENDED OR COME INTO EFFECT IN THE
FUTURE AND THE TERM “MAXIMUM RATE” MEANS THE MAXIMUM NONUSURIOUS RATE OF INTEREST THAT FGI IS
PERMITTED UNDER APPLICABLE LAW TO CONTRACT FOR, TAKE, CHARGE OR RECEIVE WITH RESPECT TO THE
ADVANCES.

     (j) Upon FGI’s acceptance of each Purchased Account, FGI shall be the sole owner and holder of
such Purchased Account. Seller hereby sells, transfers, conveys and assigns to FGI all of its
right, title and interest in and to each Purchased Account effective at the time of acceptance
thereof by FGI. Seller agrees to execute and deliver to each Account Debtor obligated under a
Foreign Account such written notice of sale of the Purchased Account as FGI may request in the form
attached hereto as Schedule 3(j) or in such form as required by FGI.

     (k) FGI shall provide Seller online access via a secured website to information on the
Purchased Accounts and a reconciliation of the relationship relating to billing, collection and
account maintenance such as aging, posting, error resolution and mailing of statements in the
ordinary course of FGI’s business. All of the foregoing shall be in a format and in such detail,
as FGI, in its sole and absolute discretion, deems appropriate. Furthermore, FGI’s books and
records shall be admissible in evidence without objection as prima facie evidence of the status of
the Purchased and non-purchased Accounts and Reserve Account between FGI and Seller. Each
statement, report, or accounting rendered or issued by FGI to Seller, if any, and all online
information shall be deemed conclusively accurate and binding on Seller unless within twenty-one
(21) days after the date of issuance or posting Seller notifies FGI to the contrary by registered
or certified mail, setting forth with specificity the reasons why Seller believes such statement,
report, or accounting is inaccurate, as well as what Seller believes to be correct amount(s)
therefore. FGI’s failure to provide or Seller’s failure to receive such online access shall not
relieve Seller of Seller’s obligations under this Agreement or the responsibility of Seller to
request such statement and Seller’s failure to do so shall nonetheless bind Seller to whatever
FGI’s records would have reported.

     Section 4. Seller’s Representations and Covenants. Seller, as well as each of Seller’s
principals, represent, warrant and covenant, jointly and severally, to FGI that:

     (a) Seller is either a corporation, limited liability company, limited partnership or other
form of registered Person, is duly organized, validly existing and in good standing under the laws
of the State of Delaware and is qualified and authorized to do business and is in good standing in
all states in which such qualification and good standing are necessary or desirable.

     (b) The execution, delivery and performance by Seller of this Agreement does not and will not
constitute a violation of any applicable law, violation of Seller’s articles of incorporation,
articles of organization, bylaws, operating agreement, partnership agreement or other
organizational documents and does not and will not constitute any material breach of any other
document, agreement or instrument to which Seller is a party or by which Seller is bound.

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     (c) Seller has all requisite power and authority to enter into and perform this Agreement, and
has taken all proper and necessary action to authorize the execution, delivery and performance of
this Agreement and other documents, instruments and agreements executed in connection herewith.
This Agreement is a legal, valid and binding obligation of Seller enforceable against it in
accordance with its terms.

     (d) Immediately prior to the execution and at the time of delivery of each Schedule of
Account, Seller is the sole owner and holder of each of the Foreign Accounts described thereon and
that upon FGI’s acceptance of each Purchased Account; FGI shall become the sole owner and holder of
such Purchased Account(s).

     (e) No Purchased Account shall have been previously sold or transferred or be subject to any
lien, encumbrance, security interest or other claim of any kind of nature. Seller will not factor,
sell, transfer, pledge or give a security interest in any of its Foreign Accounts to anyone other
than FGI. There are no financing statements now on file in any public office covering any
Collateral of Seller of any kind, real or personal, in which Seller is named in or has signed as
the debtor, except the financing statement or statements filed or to be filed in respect of this
Agreement or those statements now on file or otherwise specifically listed on Schedule 4(e)
attached hereto. Seller will not execute any security agreement or authorize the filing of any
financing statement in favor of any other Person, except FGI, during the Term of this Agreement.

     (f) The amount of each Purchased Account is due and owing to Seller and represents an accurate
statement of a bona fide sale, delivery and acceptance of Goods or performance of service by Seller
to or for an Account Debtor. The terms for payment of Purchased Accounts are no greater than sixty
(60) days from date of invoice and the payment of such Purchased Accounts is not contingent upon
the fulfillment by Seller of any further performance of any nature whatsoever. Each Account
Debtor’s business is solvent to the best of Seller’s knowledge.

     (g) There are and shall be no set-offs, allowances, discounts, deductions, counterclaims, or
disputes with respect to any Purchased Account, either at the time it is accepted by FGI for FGI or
prior to the date it is to be paid. Seller shall inform FGI, in writing, immediately upon learning
that there exists any Foreign Account, which is subject to a Dispute. Seller shall accept no
returns and shall grant no allowance or credit to any Account Debtor without the prior written
consent of FGI. On the first business day of each calendar week, Seller shall provide to FGI for
each Account Debtor who is indebted on a Purchased Account that has been purchased, a weekly report
in a form and substance satisfactory to FGI itemizing all such returns and allowances made during
the previous week with respect such Purchased Accounts and at FGI’s option a check (or wire
transfer) payable to FGI for the amount thereof or in FGI’s sole and exclusive discretion, FGI may
accept the issuance of a Credit Memo and apply same to the Reserve Account.

     (h) Seller’s address, as set forth in any Application submitted to FGI, is Seller’s mailing
address, its chief executive office, principal place of business and the office where all of the
books and records concerning the Purchased Accounts are maintained which shall not be changed
without giving thirty (30) days prior written notice to FGI.

     (i) Seller shall maintain its books and records in accordance with GAAP and shall reflect on
its books the absolute sale of the Purchased Accounts to FGI. Seller shall furnish FGI, upon
request, such information and statements, as FGI shall request from time to time and at any time
regarding Seller’s business affairs, financial condition and results of its operations. Without
limiting the generality of the foregoing, Seller shall provide FGI, on or prior to the thirtieth
(30th) day of each month, unaudited financial statements with respect to the prior month
and, within one hundred and twenty (120) days after the end of each of Seller’s fiscal years,
annual financial statements and such certificates relating to the foregoing as FGI may request
including, without limitation, a monthly certificate from the president and chief financial officer
of Seller stating that no Event of Default exists or if an Event of Default has occurred stating
in detail the nature of the Event(s) of Default. Seller will furnish to FGI upon request a current
listing of all

9

 

open and unpaid accounts payable and Foreign Accounts, and such other items of information
that FGI may deem necessary or appropriate from time to time. Unless otherwise expressly provided
herein or unless FGI otherwise consents, all financial statements and reports furnished to FGI
hereunder shall be prepared and all financial computations and determinations pursuant hereto shall
be made in accordance with GAAP, consistently applied.

     (j) Seller has and will file all tax returns required to be filed in any jurisdiction where
Seller conducts business and Seller has paid and will pay all taxes and governmental charges
(including taxes and charges imposed with respect to sale of Goods or provision of services) and
furnish to FGI upon request satisfactory proof of payment and compliance with all federal, state
and local tax requirements.

     (k) There are no existing lawsuits against Seller involving amounts greater than $50,000 and
Seller will promptly notify FGI of (i) the filing of any lawsuit against Seller involving amounts
greater than $50,000, and (ii) any attachment or any other legal process levied against Seller.

     (l) The Application made or delivered by or on behalf of Seller in connection with this
Agreement, and the statements made therein are true and correct at the time that this Agreement is
executed. There is no fact which Seller has not disclosed to FGI in writing which could materially
adversely affect the properties, business, financial condition or prospects of Seller, or any of
the Purchased Accounts or Collateral, or which is necessary to disclose in order to keep the
foregoing representations and warranties from being misleading.

     (m) In no event shall the funds paid to Seller hereunder be used directly or indirectly for
personal, family, household or agricultural purposes.

     (n) Seller does business under no trade or assumed names other than specifically listed on
Schedule 4(n) attached hereto.

     (o) Any invoice or written communication that is issued by Seller to FGI by facsimile
transmission is a duplicate of the original.

     (p) Any electronic communication of data, whether by e-mail, tape, disk, or otherwise, Seller
remits or causes to be remitted to FGI shall be authentic and genuine.

     (q) Seller has obtained all licenses, permits, franchises or other governmental authorizations
necessary for the ownership of its Property and for the conduct of its business.

     (r) After giving effect to the transactions contemplated under this Agreement, Seller is
solvent, is able to pay its debts as they become due, and has capital sufficient to carry on its
business and all businesses in which it is about to engage, and now owns property having a value
both at fair valuation and at present fair salable value greater than the amount required to pay
Seller’s debts. Seller will not be rendered insolvent by the execution and delivery of this
Agreement or by the transactions contemplated hereunder or thereunder.

     (s) Seller shall continue in the business presently operated by it using its best efforts to
maintain its customers and goodwill.

     (t) Seller shall deliver written notice to FGI promptly upon becoming aware of the existence
of (i) any condition or event which constitutes an Event of Default under this Agreement,
specifying the nature and period of existence thereof and what action Seller is taking (and
proposes to take) with respect thereto or (ii) notice of default, oral or written, given to Seller
by any creditor for indebtedness for borrowed money in excess of $10,000.

     (u) Seller shall permit any of FGI’s officers or other representatives to visit and inspect
upon reasonable notice during business hours any of the locations of Seller, to examine and audit
all of Seller’s books of account, records, reports and other papers, to make copies and extracts
therefrom and to discuss

10

 

its affairs, finances and accounts with its officers, employees and independent certified
public accountants all at Seller’s expense at the standard rates charged by FGI for such
activities, plus FGI’s reasonable out-of-pocket expenses.

     (v) Seller agrees that immediately upon becoming aware of any development or other information
outside the ordinary course of business and excluding matters of a general economic, financial or
political nature which would reasonably be expected to have a material adverse effect the
properties, business, financial condition or prospects of Seller it shall give to FGI telephonic
notice specifying the nature of such development or information and such anticipated effect. In
addition, such verbal communication shall be confirmed by written notice thereof to FGI on the same
day such verbal communication is made or the next business day thereafter.

     (w) Seller will immediately notify FGI in writing in the event that Seller becomes a party to
or obtains any rights with respect to any Commercial Tort Claim. Such notification shall include
information sufficient to describe such Commercial Tort Claim, including, but not limited to, the
parties to the claim, the court in which the claim was commenced, the docket number assigned to
such claim, if any, and a detailed explanation of the events that gave rise to the claim. Seller
shall execute and deliver to FGI all documents and/or agreements necessary to grant FGI a security
interest in such Commercial Tort Claim to secure the Obligations. Seller authorizes FGI to file
(without Seller’s signature) initial financing statements or amendments, as FGI deems necessary to
perfect its security interest in the Commercial Tort Claim.

     (x) Seller shall provide FGI with written notice of any letters of credit for which Seller is
the beneficiary. Seller shall execute and deliver (or cause to be executed or delivered) to FGI,
all documents and agreements as FGI may require in order to obtain and perfect its security
interest in such Letter of Credit Rights.

     (y) Without FGI’s prior written approval , seller shall not engage in any transaction or
series of related transactions pursuant to which (A) a Person or group of Persons acquire (i)
voting securities of Seller constituting greater than 50% of the issued and outstanding voting
securities of Seller and/or entitling such Person(s) to elect a majority of Seller’s board of
directors or similar governing body (whether by merger, consolidation, recapitalization, division,
conversion or otherwise) or (ii) all or substantially all of the Seller’s assets determined on a
consolidated basis, or (B) Seller is dissolved or liquidated or otherwise ceases to be in existence
in the form as of the date hereof.

     (z) Excepting the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection, Seller shall not become or be liable, directly or indirectly, primary or
secondary, matured or contingent, in any manner, whether as guarantor, surety, accommodation maker,
or otherwise, for the existing or future Indebtedness of any kind of any Person.

     (aa) Seller shall not: (i) declare or pay or make any forms of distribution or dividend to
holders of Seller’s capital stock, membership interest or other equity interest; (ii) declare or
pay any bonus compensation to its officers if an Event of Default exists or would result from the
payment thereof; or (iii) hereafter incur or become liable for any indebtedness.

     (bb) Seller shall not make or have outstanding loans, advances, extensions of credit or
capital contributions to, or investments in, any Person.

     (cc) Seller shall not use FGI’s name in connection with any of its business operations.
Nothing herein contained is intended to permit or authorize Seller to make any contract on behalf
of FGI.

     (dd) Seller shall not become or be a party to any contract or agreement which at the time of
becoming a party to such contract or agreement materially impairs Seller’s ability to perform under
this Agreement, or under any other instrument, agreement or document to which Seller is a party or
by which it is or may be bound.

11

 

     (ee) No Seller shall mortgage, pledge, lease, grant a security interest in, or encumber any of
its Intellectual Property, or enter into any agreement, document, instrument or other arrangement
(except with or in favor of FGI) with any Person that prohibits or has the effect of prohibiting
such Seller from mortgaging, pledging, leasing, granting a security interest in or upon, or
encumbering any of such Seller’s Intellectual Property; provided, however, that a Sellers may grant
non-exclusive licenses with respect to their respective Intellectual Property or in connection with
joint ventures and corporate collaborations.

     Section 5. Notice of Purchase. Seller authorizes FGI to file, and Seller shall execute and
deliver to FGI and/or file at such times and places as FGI may designate, such financing
statements, continuations and amendments thereto as are necessary or desirable to give notice of
FGI’s purchase of the Purchased Accounts under the UCC in effect in any applicable jurisdiction and
FGI’s security interest in Seller’s Collateral as provided in Section 6 below.

     Section 6. Collateral. In order to secure the payment of all indebtedness and obligations of
Seller to FGI (including the Obligations), in addition to the sale of Purchased Accounts, Seller
hereby grants to FGI a security interest in and lien upon all of Seller’s right, title and interest
in and to all of Seller’s Collateral. Seller agrees to comply with all appropriate laws in order to
perfect FGI’s security interest in and to the Collateral and to execute such documents as FGI may,
from time to time, require and to deliver to FGI a list of all locations of its Inventory,
Equipment and Goods. Seller shall provide written notice to FGI of any change in the locations at
which it keeps its Inventory, Equipment and Goods at least thirty (30) days prior to any such
change. The occurrence of any Event of Default shall entitle FGI to all of the default rights and
remedies (without limiting the other rights and remedies exercisable by FGI either prior or
subsequent to an Event of Default) as available to a Secured Party under the UCC in effect in any
applicable jurisdiction.

     Section 7. Collection.

     (a) Seller shall notify all Account Debtors and take other necessary or appropriate means to
insure that all of Seller’s Foreign Account(s), whether or not purchased by FGI, shall be paid
directly to FGI at the remittance address or by the wire instructions set forth below. FGI shall
have the right at any time, either before or after the occurrence of an Event of Default and
without notice to Seller, to notify any or all Account Debtors of the assignment to FGI of such
Foreign Accounts and to direct such Account Debtors to make payment of all amounts due or to become
due to Seller directly to FGI. As to any Foreign Account proceeds that do not represent Purchased
Accounts, and so long as no Event of Default has occurred, FGI shall be deemed to have received any
such proceeds of Foreign Accounts as a pure pass-through for and on account of Seller; provided,
however, FGI may retain, in its sole and absolute discretion, any such amounts as additional
reserves in the Reserve Account. Unless otherwise required by FGI, all invoices of all of Seller’s
Foreign Accounts shall plainly state on their face: “All amounts owing under this invoice have been
assigned to Faunus Group International, Inc. d/b/a FGI Finance and all such amounts payable
hereunder are payable to Faunus Group International, Inc. d/b/a FGI Finance at the remittance
address or by the wire instructions set forth below:

	 	 	 
	Wire Instructions:
	 	Mailing Address:
	Citizens Bank
	 	80 Broad Street
	ABA/Routing #: 021313103
	 	22nd Floor
	Swift: CTZIUS33
	 	New York, NY 10004
	Beneficiary: FGI Finance
	 	 
	Account #: 4001212330	 	 

     (b) FGI, as the sole and absolute owner of the Purchased Accounts, shall have the sole and
exclusive power and authority to collect each such Purchased Account, through legal action or
otherwise, and FGI may, in its sole discretion, settle, compromise, or assign (in whole or in part)
any of such Purchased Accounts, or otherwise exercise, to the maximum extent permitted by
applicable law, any other right now existing or hereafter arising with respect to any of such
Purchased Accounts.

12

 

     Section 8. Payments Received by Seller. Should Seller receive payment of all or any
portion of any Purchased Account, Seller shall immediately notify FGI in writing of the
receipt of the payment, hold said payment in trust for FGI separate and apart from Seller’s own
property and funds, and shall deliver said payment to FGI without delay in the identical form in
which received with all necessary endorsements. Should Seller receive any check or other payment
instrument with respect to a Purchased Account or after default any Foreign Account and fail to
surrender and deliver to FGI said check or payment instrument within two (2) business days
following the date of receipt by Seller, FGI shall be entitled to charge Seller a Misdirected
Payment Fee to compensate FGI for the additional administrative expenses that the parties
acknowledge is likely to be incurred as a result of such breach. In the event any Goods, the sale
of which gave rise to a Purchased Account, are returned to or repossessed by Seller, such Goods
shall be held by Seller in trust for FGI, separate and apart from Seller’s own property and subject
to FGI’s sole direction and control.

     Section 9. Power of Attorney. Seller grants to FGI an irrevocable power of attorney
authorizing and permitting FGI, at its option, with or without notice to Seller to do any or all of
the following: (a) endorse the name of Seller on any checks or other evidences of payment
whatsoever that may come into the possession of FGI regarding Purchased Accounts or Collateral,
including checks received by FGI pursuant to Section 9 hereof; (b) receive, open and dispose of
any mail addressed to Seller and put FGI’s address on any statements mailed to Account Debtors; (c)
pay, settle, compromise, prosecute or defend any action, claim, conditional waiver and release, or
proceeding relating to Purchased Accounts or Collateral; (d) upon the occurrence of an Event of
Default, notify in the name of the Seller, the U.S. Post Office to change the address for delivery
of mail addressed to Seller to such address as FGI may designate, however, FGI shall turn over to
Seller all such mail not relating to Purchased Accounts or Collateral; (e) file any financing
statement deemed necessary or appropriate by FGI to protect FGI’s interest in and to the Purchased
Accounts or Collateral, or under any provision of this Agreement; (f) effect debits to any demand
deposit maintained at any bank for any sums due to or from the Seller under this Agreement; and (g)
to do all other things necessary and proper in order to carry out this Agreement. The authority
granted to FGI herein is irrevocable until this Agreement is terminated and all Obligations are
fully satisfied.

     Section 10. Default and Remedies. An Event of Default shall be deemed to have occurred
hereunder and FGI may immediately exercise its rights and remedies with respect to the Purchased
Accounts and the Collateral under this Agreement, upon the happening of one or more of the
following: (a) Seller shall fail to pay as and when due any amount owed to FGI; (b) (i) the
commencement of any action for the dissolution or liquidation of Seller, or the commencement of any
proceeding to avoid any transaction entered into by Seller, or the commencement of any case or
proceeding for reorganization or liquidation of Seller’s debts under the federal bankruptcy code or
any other state or federal law, now or hereafter enacted for the relief of debtors, whether
instituted by or against Seller; provided however, that Seller shall have thirty
(30) days to obtain the dismissal or discharge of involuntary proceedings filed against it, it
being understood that during such thirty (30) day period, (ii) Seller makes or proposes in writing,
an assignment for the benefit of creditors generally, offers a composition or extension to
creditors, or makes or sends notice of an intended bulk sale of any business or assets now or
hereafter owned or conducted by Seller, or (iii) the appointment of a receiver, liquidator,
custodian, trustee or similar official or fiduciary for Seller or for Seller’s property; (c) Seller
shall become insolvent in that its debts are greater than the fair value of its assets, or Seller
is generally not paying its debts as they become due; (d) any involuntary lien, garnishment,
attachment or the like shall be issued against or shall attach to the Purchased Accounts, the
Collateral or any portion thereof and the same is not released within ten (10) days; (e) Seller
suffers the entry against it for a final judgment for the payment of money in excess of $50,000,
unless the same is discharged within thirty (30) days after the date of entry thereof or an appeal
or appropriate proceeding for review thereof is taken within such periods and a stay of execution
pending such appeal is obtained; (f) Seller shall breach any covenant, warranty or representation
set forth herein or same shall be untrue when made; (g) any report, certificate, schedule,
financial statement, profit and loss statement or other statement furnished by Seller, or by any
other person on behalf of Seller, to FGI is not true and correct in any material respect; (h)
Seller shall have a federal or state tax lien filed against any of its properties, or shall fail to
pay any federal or state tax when due, or shall fail to file any federal or state tax form as and
when due; or (i) a material adverse change shall have occurred in Seller’s financial conditions,
business or operations. Upon the occurrence of an Event of Default, all obligations owing to FGI
(including the Obligations) shall become immediately due and owing at the option of FGI (provided
upon

13

 

the occurrence of an Event of Default under clause (b) above, all such amounts shall become
immediately due and payable without further notice or demand) and FGI shall be entitled to any form
of equitable relief that may be appropriate without having to establish any inadequate remedy at
law or other grounds other than to establish that its Collateral is subject to being improperly
used, moved, dissipated or withheld from FGI. FGI shall be entitled to freeze, debit and/or effect
a set-off against any fund or account Seller may maintain with any Bank. In the event FGI deems it
necessary to seek equitable relief, including, but not limited to, injunctive or receivership
remedies, as a result of and Event of Default, Seller waives any requirement that FGI post or
otherwise obtain or procure any bond. Alternatively, in the event FGI, in its sole and exclusive
discretion, desires to procure and post a bond, FGI may procure and file with the court a bond in
an amount up to and not greater than $10,000 notwithstanding any common or statutory law
requirement to the contrary. Upon FGI’s posting of such bond it shall be entitled to all benefits
as if such bond was posted in compliance with state law. Seller also waives any right it may be
entitled to, including an award of attorney’s fees or costs, in the event any equitable relief
sought by and awarded to FGI is thereafter, for whatever reason(s), vacated, dissolved or reversed.
All post-judgment interest shall bear interest at either the contract rate, 18% per annum or such
higher rate as may be allowed by law.

     Section 11. Cumulative Rights; Waivers. All rights, remedies and powers granted to FGI in
this Agreement, or in any other instrument or agreement given to Seller to FGI or otherwise
available to FGI in equity or at law, are cumulative and may be exercised singularly or
concurrently with such other rights as FGI may have. These rights may be exercised from time to
time as to all or any part of the Purchased Accounts purchased hereunder or the Collateral as FGI
in its sole and absolute discretion may determine. In the event that any part of this transaction
between Seller and FGI is construed to be a loan from FGI to Seller, any advances or payments made
as the Purchase Price for all Purchased Accounts shall be secured by the Purchased Accounts and the
Collateral and FGI shall have all rights and remedies available to FGI in addition to its rights
and remedies hereunder. FGI may not be held to have waived its rights and remedies unless the
waiver is in writing and signed by FGI. A waiver by FGI of a right, remedy or default under this
Agreement on one occasion is not a waiver of any right, remedy or default on any subsequent
occasion. Any failure by FGI to exercise, or any delay by FGI of such right or any other right,
nor in any manner impair the subsequent exercise by FGI of any of its rights.

     Section 12. Notices. Any notice or communication with respect to this Agreement shall be
given in writing, sent by (i) personal delivery, or (ii) expedited delivery service with proof of
delivery, or (iii) United States mail, postage prepaid, registered or certified mail, or (iv)
facsimile, addressed to each party hereto at its address set forth below or to such other address
or to the attention of such other person as hereafter shall be designated in writing by the
applicable party sent in accordance herewith. Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case of delivery service or
mail, as of the date of first attempted delivery at the address and in the manner provided herein,
or in the case of facsimile, upon receipt.

	 	 	 	 	 
	 

	 	FGI Finance
	 	OCZ Technology Group, Inc.
	 

	 	80 Broad Street
	 	6373 San Ignacio Avenue,
	 

	 	22nd Floor
	 	San Jose, CA 95119
	 

	 	New York, NY 10004	 	 
	 

	 	Fax: (212) 248-3404
	 	Fax: (408) 904-6947

     Section 13. Term. The Original Term of this Agreement shall be twenty four (24) months from
the date of this Agreement, provided that this Agreement shall be extended automatically for an
additional one (1) year for each succeeding term unless written notice of termination is given by
one party hereto to the other party hereto at least sixty (60) days, but not more than ninety (90)
days, prior to the end of the Original Term or any extension thereof. Any such notice of
termination, however, and notwithstanding payment in full of all Obligations by Seller, is
conditioned on Seller’s delivery, to FGI, of a general release in a form reasonably satisfactory to
Purchaser. Seller understands that this provision constitutes a waiver of its rights under § 9-513
of the UCC. FGI shall not be required to record any terminations or satisfactions of any of FGI’s
liens on the Collateral unless and until Seller has executed and delivered to FGI said general
release and Seller shall have no authority to do so without FGI’s express written consent. In the
event Seller terminates this Agreement within the first 360 days following the

14

 

commencement of this Agreement, Seller shall pay to FGI an early Termination Fee in the amount
of three hundred thousand dollars ($300,000). In the event that Seller terminates this Agreement
after the first 360 days, but prior to the end of the Original Term of the Agreement then Seller
shall pay to FGI an early Termination Fee in the amount of one hundred seventy thousand dollars
($170,000). Any termination of this Agreement shall not affect FGI’s security interest in the
Collateral and FGI’s ownership of the Purchased Accounts, and this Agreement shall continue to be
effective, until all transactions entered into and obligations incurred hereunder have been
completed and satisfied in full. Notwithstanding anything to the contrary, and assuming no default
by Seller in which event FGI may terminate without notice, FGI may terminate this Agreement at any
time by giving not less than thirty (30) days notice in which event, Seller shall not be obligated
to pay any Termination Fee.

     Section 14. Expenses. At closing and from time to time thereafter, Seller will pay upon
demand of FGI all costs, fees and expenses of FGI in connection with (i) the analysis, negotiation,
preparation, execution, administration, delivery and termination of this Agreement and the
documents and instruments referred to herein, and any amendment, amendment and restatement,
supplement, waiver or consent relating hereto or thereto, whether or not any such amendment,
amendment and restatement, supplement, waiver or consent is executed or becomes effective,
including search costs, the reasonable fees, expenses and disbursements of counsel for FGI,
reasonable charges of any expert consultant to FGI and reimbursement for premiums incurred by FGI
to insure against nonpayment of the Accounts or other insurable losses to the Collateral, (ii) the
enforcement of FGI’s rights hereunder, or the collection of any payments owing from, Seller under
this Agreement or the protection, preservation or defense of the rights of FGI hereunder, (iii) the
enforcement of FGI’s rights with respect to the Foreign Accounts, including the collection of any
payments owing from any account debtors with respect to the Foreign Accounts (including , the
reasonable fees, expenses and disbursements of counsel for FGI), and (iv) any refinancing or
restructuring of the arrangements provided under this Agreement in the nature of a “work-out” or of
any insolvency or bankruptcy proceedings, or otherwise (including the reasonable fees and
disbursements of counsel for FGI). Seller hereby authorizes FGI, at FGI’s sole discretion, to
deduct such fees, costs and expenses from the Reserve Account or may make demand therefore.

     Section 15. Indemnity. Seller releases and shall indemnify, defend and hold harmless FGI and
its respective officers, shareholders, employees and agents, of and from any claims, demands,
liabilities, obligations, judgments, injuries, losses, damages and costs and expenses (including,
without limitation, reasonable legal fees) resulting from (i) acts or conduct of Seller under,
pursuant or related to this Agreement, (ii) Seller’s breach or violation of any representation,
warranty, covenant or undertaking contained in this Agreement, (iii) Seller’s failure to comply
with any or all laws, statutes, ordinances, governmental rules, regulations or standards, whether
federal, state or local, or court or administrative orders or decrees and (iv) any claim by any
third party, including any other creditor of Seller, against FGI arising out of any transaction
whether hereunder or in any way related to this Agreement and all costs, expenses, fines, penalties
or other damages resulting therefrom, unless resulting solely from acts or conduct of FGI
constituting willful misconduct or gross negligence.

     Section 16. Severability. Each and every provision, condition, covenant and representation
contained in this Agreement is, and shall be construed to be, a separate and independent covenant
and agreement. If any term or provision of this Agreement shall to any extent be invalid or
unenforceable, the remainder of the Agreement shall not be affected thereby.

     Section 17. Parties in Interest. All grants, covenants and agreements contained in this
Agreement shall bind and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that Seller may not delegate or assign any of its duties or
obligations under this Agreement without the prior written consent of FGI. FGI reserves the right
to assign its rights and obligations under this agreement in whole or in part to any person or
entity.

     Section 18. Governing Law: Submission to Process and Venue. This agreement shall be deemed a
contract made under the laws of the State of New York and shall be construed and enforced, along
with all matters arising hereunder or related hereto, in accordance with and governed by the
internal laws of the State of New York, without reference to the rules thereof relating to
conflicts of law. Seller

15

 

hereby irrevocably submits itself to the non-exclusive jurisdiction of the state and federal
courts located in New York, and agrees and consents that service of process may be made upon it in
any legal proceeding relating to this agreement, the purchase of Accounts or any other relationship
between FGI and Seller by any means allowed under state or federal law. Any legal proceeding
arising out of or in any way related to this Agreement, the purchase of Accounts or any other
relationship between FGI and Seller shall be brought and litigated in any of the state or federal
courts located in the State of New York in any county in which FGI has a business location, the
selection of which shall be in the exclusive discretion of FGI. Seller hereby waives and agrees
not to assert, by way of motion, as a defense or otherwise, that any such proceeding, is brought in
any inconvenient forum or that the venue thereof is improper.

     Section 19. Complete Agreement. This Agreement, the written documents executed pursuant to
this Agreement, if any, and the acknowledgment delivered in connection herewith set forth the
entire understanding and agreement of the parties hereto with respect to the transactions
contemplated herein and may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties. No modification or amendment of or supplement to this
Agreement shall be valid or effective unless the same is in writing and signed by the party against
whom it is sought to be enforced.

     Section 20. Miscellaneous.

     (a) Seller acknowledges that there is no, and it will not seek or attempt to establish any,
fiduciary relationship between FGI and Seller, and Seller waives any right to assert, now or in the
future, the existence or creation of any fiduciary relationship between FGI and Seller in any
action or proceeding (whether by way of claim, counterclaim, crossclaim or otherwise) for damages.

     (b) This Agreement shall be deemed to be one of financial accommodation and not assumable by
any debtor, trustee or debtor-in-possession in any bankruptcy proceeding without FGI’s express
written consent and may be suspended in the event a petition in bankruptcy is filed by or against
Seller.

     (c) In the event Seller’s principals, officers or directors form a new entity, whether
corporate, partnership, limited liability company or otherwise, similar to that of Seller during
the term of this Agreement, such entity shall be deemed to have expressly assumed the obligations
due FGI by Seller under this Agreement. Upon the formation of any such entity, FGI shall be deemed
to have been granted an irrevocable power of attorney with authority to execute, on behalf of the
newly formed successor business, a new UCC-1 or UCC-3 financing statement and have it filed with
the appropriate secretary of state or UCC filing office. FGI shall be held-harmless and be
relieved of any liability statement or the resulting perfection of a lien in any of the successor
entity’s assets. In addition, FGI shall have the right to notify the successor entity’s account
debtors of FGI’s lien rights, its right to collect all Foreign Accounts, and to notify any new FGI
or lender who has sought to procure a competing lien of FGI’s right is in such successor entity’s
assets.

     (d) Seller expressly authorizes FGI to access the systems of and/or communicate with any third
party with respect to the status of any Goods regarding a Purchased Account, including without
limitation warehousemen, bailees, shipping or trucking company in order to obtain or verify
tracking, shipment or delivery status of any Goods regarding a Purchased Account.

     (e) Seller’s principal(s) acknowledge that the duty to accurately complete each Schedule of
Accounts is critical to this Agreement and as such all obligations with respect thereto are
non-delegable. Each of Seller’s principal(s) acknowledge that he/she shall remain fully
responsible for the accuracy of each Schedule of Accounts delivered to FGI regardless of who is
delegated the responsibility to prepare and/or complete such Schedule of Accounts.

     (f) Seller shall indemnify FGI from any loss arising out of the assertion of any Avoidance
Claim. Seller shall notify FGI within two business days of it becoming aware of the assertion of
an Avoidance Claim.

16

 

     (g) Seller agrees to execute any and all forms (i.e. Forms 8821 and/or 2848) that FGI may
require in order to enable FGI to obtain and receive tax information issued by the Department of
the Treasury, Internal Revenue Service, or receive refund checks.

     (h) Seller will cooperate with FGI in obtaining a control agreement in form and substance
satisfactory to FGI with respect to Collateral consisting of: Deposit Accounts; Investment
Property; Letter-of-credit rights; and Electronic chattel paper.

     (i) Whenever Seller shall be required to make any payment, or perform any act, on a day which
is not a business day, such payment may be made, or such act may be performed, on the next
succeeding business day. Time is of the essence in Seller’s performance under all provisions of
this Agreement and all related agreements and documents.

     (j) All warranties, representations, and covenants made by Seller herein, or in any agreement
referred to herein or on any certificate, document or other instrument delivered by it or on its
behalf under this Agreement, shall be considered to have been relied upon by FGI regardless of any
investigation made by FGI or on its behalf. All statements in any such certificate or other
instrument prepared and/or delivered for the benefit of FGI shall constitute warranties and
representations by FGI hereunder. Except as otherwise expressly provided herein, all covenants
made by Seller hereunder or under any other agreement or instrument shall be deemed continuing
until all Obligations are satisfied in full. All indemnification obligations under this Agreement
shall survive the termination of this Agreement and payment of the Obligations.

     (k) FGI
shall have the right, only upon consultation and prior approval of the Seller, to
announce and publicize the arrangement established hereunder, as it deems appropriate, by means and
media selected by FGI. Such publication may include all pertinent information relating to such
arrangement. The form and content of the published information shall be in the sole discretion of
FGI and shall be considered the sole and exclusive property of FGI. All expenses related to
publicizing the financing shall be the sole responsibility of FGI.

     (l) The word “including” (and its various forms) means “including without limitation”
whenever the context may require, any pronouns used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural and vice versa.

     Section 21. Waiver of Jury Trial, Punitive and Consequential Damages, Etc. Seller and FGI
hereby (a) irrevocably waive any right either may have to a trial by jury in respect of any
litigation directly or indirectly at any time arising out of, under or in connection with this
Agreement or any transaction contemplated hereby or associated herewith; (b) Seller irrevocably
waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in
any such litigation any special, exemplary, punitive or consequential damages, or damages other
than, or in addition to, actual damages and Seller hereby releases and exculpates FGI, its
officers, employees and designees, from any liability arising from any acts under this Agreement or
in furtherance thereof whether of omission or commission, and whether based upon any error of
judgment or mistake of law or fact, except for willful misconduct; (c) and Seller certifies that no
party hereto nor any representative or agent or counsel for any party hereto has represented,
expressly or otherwise, or implied that such party would not, in the event of litigation, seek to
enforce the foregoing waivers; and (d) Seller acknowledges that FGI has been induced to enter into
this Agreement and the transactions contemplated hereby, in part, as a result of the mutual waivers
and certifications contained in this Section.

     Section 22. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties. Seller may not transfer, assign or
delegate any of its duties or obligations hereunder. Seller acknowledges and agrees that FGI may
at any time, and from time to time, (a) sell participating interests in FGI’s rights hereunder, and
(b) sell, transfer, or assign FGI’s rights hereunder without notice to or the consent of Seller.
No rights are intended to be created

17

 

hereunder, or under any related agreements or documents for the benefit of any third party
donee, creditor or incidental beneficiary of Seller. Nothing contained in this Agreement shall be
construed as a delegation to FGI of Seller’s s duty of performance, including, without limitation,
Seller’s duties under any account or contract with any other Person.

     Section 23. Delivery by Electronic Means. This Agreement, the agreements referred to herein,
and each other agreement or instrument entered into in connection herewith or therewith or
contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and
delivered by electronic means, including by means of unalterable files attached to e-mail
communications or by facsimile, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal effect as if it were
the original signed version thereof delivered in person. At the request of any party hereto or to
any such agreement or instrument, each other party hereto or thereto shall reexecute original forms
thereof and deliver them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of electronic means to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the use of electronic
means as a defense to the formation or enforceability of a contract and each such party forever
waives any such defense.

     Section 24. Interpretation of Agreement. The parties hereto acknowledge and agree that this
Agreement and the agreements or instruments entered into in connection herewith have been
negotiated at arm’s-length and among parties equally sophisticated and knowledgeable in the matters
dealt with in this Agreement or in such agreements or instruments. Accordingly, any rule of law or
legal decision that would require interpretation of any ambiguities in this Agreement or the
agreements or instruments entered into in connection herewith against the party that has drafted it
is not applicable and is waived. The provisions of this Agreement and the agreements and
instruments entered into in connection herewith shall be interpreted in a reasonable manner to
effect the intent of the parties as set forth herein or therein.

SIGNATURES ON FOLLOWING PAGE

18

 

     IN WITNESS WHEREOF, the parties have set their hands and seals on the day and year first
hereinabove written.

FGI:

	 	 	 	 	 	 	 	 	 	 	 
					FAUNUS GROUP INTERNATIONAL, INC.
	Witness: ____________________	 	
	Name: _____________________	 	
		 	By: ___________________________________
	 

	 	 	 	Name:
	 	David M. DiPiero	 	 	 	 
	 

	 	 	 	Title:
	 	President	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SELLER:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
					OCZ TECHNOLOGY GROUP, INC.
	Witness: _____________________	 	
	Name: _____________________	 	
		 	By: _____________________________
	 

	 	 	 	Name:
	 	Ryan Petersen	 	 	 	 
	 

	 	 	 	Title:
	 	Chief Executive Officer	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	PRINCIPALS:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Witness: _____________________	 	__________________________ (SEAL)
	Name: _____________________	 	Name:
	 	Ryan Petersen	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Witness: _____________________	 	__________________________ (SEAL)
	Name: _____________________	 	Name:	 	Kerry T. Smith	 	 	 	 

STATE OF                     

COUNTY OF                     

     I HEREBY CERTIFY that on this day personally appeared before me, officers duly authorized to
administer oaths and take acknowledgements,                                         , as                      of
                              , a                                           who has produced the following
identification:                      or ( ) who is personally known to me, and who acknowledged before me
that he executed the same for the purposes therein expressed, as the act and deed of said entity.

     WITNESS my hand and official seal in the County and State last aforesaid on this            day of
                           , 200    .

	 	 	 	 	 
	 	———————————————— 

Notary Public, State of                            

My Commission Expires	 

19

 

Schedule 2(b)

     Schedule of Accounts Sold/Bill of Sale

Schedule

Client’s Name: OCZ Technology Group, Inc.

Number ___________

Page 
           of             Date                 20    

	 	 	 	 	 	 	 	 	 
	Invoice 

Date

	 	Invoice

Number
	 	Name of Account Debtor
	 	Location
	 	Invoice

Amount

ASSIGNMENT:

     KNOW ALL MEN BY THESE PRESENTS, that the undersigned for value received has sold transferred
and assigned and does hereby sell, transfer and assign to Faunus Group International, Inc.
(hereinafter called the “Buyer”), its successors and assigns, in accordance with the provision of
that certain Sale of Accounts and Security Agreement heretofore duly executed and delivered by the
undersigned and duly accepted by the Buyer, and any amendments thereto (hereinafter called the
“Agreement”), each Account, listed hereon, and all right, title and interest of the undersigned in
and to such Account(s) and in and to all merchandise, the sale of which shall have given rise to
such Account(s), including all of the undersigned’s right of stoppage in transit replevin and
reclamation as an unpaid vendor. Each Account is made a part hereof as if attached or incorporated
herein for specific terms, conditions, provisions and description of said Account(s).

     For the purpose of inducing the Buyer to purchase such Account(s), the undersigned hereby
reaffirms all warranties under the Agreement applicable to such Account(s) and account debtors. In
the event of any breach of any such warranty, the Buyer, its successors and assigns, shall have
such rights, inter alia, as are provided in the Agreement.

     The undersigned in his/her business capacity warrants and represents that, with respect to
each Account, since the last sale of Accounts by the undersigned to the Buyer, no merchandise has
been returned or rejected, no defense, dispute, claim, offset or counterclaim has developed or has
been asserted with respect to any Account heretofore sold, transferred and assigned by the
undersigned to the Buyer, which has not been or is not contemporaneously being reported in writing
by the undersigned to the Buyer.

     IN WITNESS WHEREOF, the undersigned has hereunto set its hand and seal this       day of
                    , 200     .

	 	 	 	 	 
	By:

	 	Print Name:
	 	Title:
	 

	 	 

	 	 

	(Signature)
	 	 	 	 

 

Schedule
3(j)

     Re: OCZ Technology Group, Inc.

Ladies and Gentlemen:

     We are pleased to advise that to enable OCZ Technology Group, Inc. to better service its
customers, OCZ Technology Group, Inc., has assigned its present and future accounts to FGI Finance
(“FGI”).

     To the extent that you are now indebted or may in the future become indebted to OCZ Technology
Group, Inc., on an account (i.e., invoices) or a general intangible, payment thereof is to be
delivered and made payable only to FGI and not to OCZ Technology Group, Inc., or any other entity.
Payment in any other way will not constitute payment and will not discharge your obligation.

     The payments should be wired in USD only to FGI Finance with the following instructions:

Bank Name: Citizens Bank

Swift Address: CTZIUS33

ABA: 021313103

Credit Account #: 4001212330

Beneficiary: FGI Finance

     This letter may only be revoked by a writing signed by one of FGI’s officers whose signature
may only be relied on if acknowledged before a notary public.

     Please fax a copy of this letter to us at +01 212 248 3405 to verify your receipt and
acceptance.

Very truly yours,

FGI Finance

By: David M. DiPiero

Title: President

	 	 	 
	APPROVED AND AGREED TO BY:

	 	ASSIGNMENT COMFIRMED:
	 
	 	 
	By:

	 	By:
	Title:

	 	Title:
	Date:                , 2009

	 	Date:

 

80
BROAD ST.,
22ND
FLOOR • NEW YORK, NY 10004 TEL 212.248.3400 FAX 212.248.3404

WWW.FGIFINANCE.COM

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