Document:

Loan and Security Agreement

 Exhibit 10.2 
  
 EXECUTION 
  
 LOAN AND SECURITY AGREEMENT 
  
 by and among 
  
 MERIX CORPORATION 
 MERIX SAN JOSE, INC. 
 as Borrowers 
  
 and 
  
 MERIX
NEVADA, INC. 
 MERIX ASIA, INC. 
 and 
 DATA CIRCUIT HOLDINGS, INC. 
 as Guarantors 
  
 THE LENDERS AND ISSUING BANK FROM TIME
TO TIME PARTY HERETO 
  
 WACHOVIA CAPITAL FINANCE CORPORATION
(WESTERN) 
 as Administrative Agent 
  
 BANK OF AMERICA, N.A. 
 as Syndication Agent

  
 WACHOVIA CAPITAL MARKETS, LLC 
 as Sole Lead Arranger, Manager and Bookrunner 
  
 Dated: September 28, 2005 

 TABLE OF CONTENTS 
  

			
	 SECTION 1. DEFINITIONS
	  	1
		
	 1.2
	  	1
		
	 SECTION 2. CREDIT FACILITIES
	  	29
		
	 2.1 Loans.
	  	29
	 2.2 Letters of Credit.
	  	29
	 2.3 Term Loans.
	  	33
	 2.4 Commitments.
	  	33
		
	 SECTION 3. INTEREST AND FEES
	  	33
		
	 3.1 Interest.
	  	33
	 3.2 Fees.
	  	35
	 3.3 Changes in Laws and Increased Costs of Loans.
	  	36
		
	 SECTION 4. CONDITIONS PRECEDENT
	  	38
		
	 4.1 Conditions Precedent to Initial Loans and Letters of Credit.
	  	38
	 4.2 Conditions Precedent to All Loans and Letters of Credit.
	  	40
		
	 SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST
	  	41
		
	 5.1 Grant of Security Interest.
	  	41
	 5.2 Perfection of Security Interests.
	  	42
		
	 SECTION 6. COLLECTION AND ADMINISTRATION
	  	46
		
	 6.1 Borrowers’ Loan Accounts.
	  	46
	 6.2 Statements.
	  	46
	 6.3 Collection of Accounts; Cash Management.
	  	46
	 6.4 Payments.
	  	48
	 6.5 Taxes.
	  	49
	 6.6 Authorization to Make Loans.
	  	51
	 6.7 Use of Proceeds.
	  	51
	 6.8 Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of Loans and Statements.
	  	52
	 6.9 Pro Rata Treatment.
	  	52
	 6.10 Sharing of Payments, Etc.
	  	53
	 6.11 Settlement Procedures.
	  	54
	 6.12 Obligations Several; Independent Nature of Lenders’ Rights.
	  	56
	 6.13 Bank Products.
	  	56

  

 i 

			
	 SECTION 7. COLLATERAL REPORTING AND COVENANTS
	  	56
		
	 7.1 Collateral Reporting.
	  	56
	 7.2 Accounts Covenants.
	  	57
	 7.3 Inventory Covenants.
	  	58
	 7.4 Equipment and Real Property Covenants.
	  	59
	 7.5 Power of Attorney.
	  	59
	 7.6 Right to Cure.
	  	60
	 7.7 Access to Premises.
	  	61
		
	 SECTION 8. REPRESENTATIONS AND WARRANTIES
	  	61
		
	 8.1 Corporate Existence, Power and Authority.
	  	61
	 8.2 Name; State of Organization; Chief Executive Office; Collateral Locations.
	  	62
	 8.3 Financial Statements; No Material Adverse Change.
	  	62
	 8.4 Priority of Liens; Title to Properties.
	  	63
	 8.5 Tax Returns.
	  	63
	 8.6 Litigation.
	  	63
	 8.7 Compliance with Other Agreements and Applicable Laws.
	  	63
	 8.8 Environmental Compliance.
	  	64
	 8.9 Employee Benefits.
	  	65
	 8.10 Bank Accounts.
	  	65
	 8.11 Intellectual Property.
	  	65
	 8.12 Subsidiaries; Affiliates; Capitalization; Solvency.
	  	66
	 8.13 Labor Disputes.
	  	67
	 8.14 Restrictions on Subsidiaries.
	  	67
	 8.15 Material Contracts.
	  	67
	 8.16 Payable Practices.
	  	68
	 8.17 Accuracy and Completeness of Information.
	  	68
	 8.18 Survival of Warranties; Cumulative.
	  	68
		
	 SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
	  	68
		
	 9.1 Maintenance of Existence.
	  	68
	 9.2 New Collateral Locations.
	  	69
	 9.3 Compliance with Laws, Regulations, Etc.
	  	69
	 9.4 Payment of Taxes and Claims.
	  	70
	 9.5 Insurance.
	  	70
	 9.6 Financial Statements and Other Information.
	  	72
	 9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc.
	  	73
	 9.8 Encumbrances.
	  	78
	 9.9 Indebtedness.
	  	79
	 9.10 Loans, Investments, Etc.
	  	84
	 9.11 Dividends and Redemptions.
	  	87
	 9.12 Transactions with Affiliates.
	  	88
	 9.13 Compliance with ERISA.
	  	88
	 9.14 End of Fiscal Years; Fiscal Quarters.
	  	88
	 9.15 Change in Business.
	  	88
	 9.16 Limitation of Restrictions Affecting Subsidiaries.
	  	89

  

 ii 

			
	 9.17 Fixed Charge Coverage Ratio.
	  	89
	 9.18 License Agreements.
	  	89
	 9.19 Foreign Assets Control Regulations, Etc.
	  	90
	 9.20 After Acquired Real Property.
	  	91
	 9.21 Merix B.V.
	  	91
	 9.22 Costs and Expenses.
	  	92
	 9.23 Further Assurances.
	  	92
		
	 SECTION 10. EVENTS OF DEFAULT AND REMEDIES
	  	93
		
	 10.1 Events of Default.
	  	93
	 10.2 Remedies.
	  	95
		
	 SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
	  	98
		
	 11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.
	  	98
	 11.2 Waiver of Notices.
	  	100
	 11.3 Amendments and Waivers.
	  	100
	 11.4 Waiver of Counterclaims.
	  	102
	 11.5 Indemnification.
	  	102
		
	 SECTION 12. THE AGENT
	  	103
		
	 12.1 Appointment, Powers and Immunities.
	  	103
	 12.2 Reliance by Agent.
	  	104
	 12.3 Events of Default.
	  	104
	 12.4 Wachovia in its Individual Capacity.
	  	105
	 12.5 Indemnification.
	  	105
	 12.6 Non-Reliance on Agent and Other Lenders.
	  	105
	 12.7 Failure to Act.
	  	106
	 12.8 Additional Loans.
	  	106
	 12.9 Concerning the Collateral and the Related Financing Agreements.
	  	106
	 12.10 Field Audit, Examination Reports and other Information; Disclaimer by Lenders.
	  	106
	 12.11 Collateral Matters.
	  	107
	 12.12 Agency for Perfection.
	  	109
	 12.13 Successor Agent.
	  	109
	 12.14 Other Agent Designations.
	  	109
		
	 SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS
	  	110
		
	 13.1 Term.
	  	110
	 13.2 Interpretative Provisions.
	  	111
	 13.3 Notices.
	  	112
	 13.4 Partial Invalidity.
	  	113
	 13.5 Confidentiality.
	  	114
	 13.6 Successors.
	  	115
	 13.7 Assignments; Participations.
	  	115
	 13.8 Entire Agreement.
	  	117
	 13.9 USA Patriot Act.
	  	117
	 13.10 Counterparts, Etc.
	  	117

  

 iii 

 INDEX 
 TO 
 EXHIBITS AND SCHEDULES 
  

			
	Exhibit A	  	Form of Assignment and Acceptance
		
	Exhibit B	  	Form of Borrowing Base Certificate
		
	Exhibit C	  	Information Certificate
		
	Exhibit D	  	Form of Compliance Certificate
		
	Schedule 1.42	  	Merix Purchasers under EPC Acquisition Documents
		
	Schedule 1.43	  	EPC Acquisition Documents
		
	Schedule 1.44	  	EPC Companies
		
	Schedule 1.107	  	Investment Accounts for Qualified Cash
		
	Schedule 9.14	  	Fiscal Month End Dates

  

 iv 

 LOAN AND SECURITY AGREEMENT 
  
 This Loan and Security Agreement dated September 28, 2005 is entered into by and among Merix Corporation, an Oregon
corporation (“Parent”) and Merix San Jose, Inc., a California corporation (“Merix San Jose” and together with Parent, each individually a “Borrower” and collectively, “Borrowers” as hereinafter further
defined), Merix Nevada, Inc., an Oregon corporation (“Nevada”), Merix Asia, Inc., an Oregon corporation (“Asia”), Data Circuit Holdings, Inc., a Delaware corporation (“DC Holdings”, and together with Nevada and Asia,
each individually a “Guarantor” and collectively, “Guarantors” as hereinafter further defined), the parties hereto from time to time as lenders, whether by execution of this Agreement or an Assignment and Acceptance (each
individually, a “Lender” and collectively, “Lenders” as hereinafter further defined), Bank of America, N.A., in its capacity as syndication agent (in such capacity, “Syndication Agent”) and Wachovia Capital Finance
Corporation (Western), a California corporation, in its capacity as administrative and collateral agent for Lenders (in such capacity, “Agent” as hereinafter further defined). 
  
 W I T N E S S E T H: 
  
 WHEREAS, Borrowers and Guarantors have requested that Agent and Lenders enter
into financing arrangements with Borrowers pursuant to which Lenders may make loans and provide other financial accommodations to Borrowers; and 
  
 WHEREAS, each Lender is willing to agree (severally and not jointly) to make such loans and provide such financial accommodations to Borrowers on a pro
rata basis according to its Commitment (as defined below) on the terms and conditions set forth herein and Agent is willing to act as agent for Lenders on the terms and conditions set forth herein and the other Financing Agreements; 
  
 NOW, THEREFORE, in consideration of the mutual conditions and agreements set
forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 
  

SECTION 1. DEFINITIONS 
  
 For purposes of this Agreement, the following terms shall have the respective meanings given to them below: 
  
 1.1 “Accounts” shall mean, as to each Borrower and Guarantor, all
present and future rights of such Borrower and Guarantor to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by chattel paper or an instrument, (a) for property that has been or is to be sold,
leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, or (d) arising out of the use of a credit or charge card or information
contained on or for use with the card. 
  
 1.2 “Adjusted
Eurodollar Rate” shall mean, with respect to each Interest Period for any Eurodollar Rate Loan comprising part of the same borrowing (including conversions, extensions and renewals), the rate per annum determined by dividing (a) the London
Interbank Offered Rate 

 
for such Interest Period by (b) a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes hereof, “Reserve
Percentage” shall mean for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D of the Board of Governors of the Federal Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is
defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Loans is determined), whether or not any Lender has any Eurocurrency liabilities subject to such
reserve requirement at that time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credits for proration, exceptions or offsets that may be
available from time to time to a Lender. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage. 
  
 1.3 “Administrative Borrower” shall mean Merix Corporation, an Oregon corporation in its capacity as
Administrative Borrower on behalf of itself and the other Borrowers pursuant to Section 6.8 hereof and it successors and assigns in such capacity. 
  
 1.4 “Affiliate” shall mean, with respect to a specified Person, any other Person which directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control with such Person, and without limiting the generality of the foregoing, includes (a) any Person which beneficially owns or holds five (5%) percent or more of any class
of Voting Stock of such Person or other equity interests in such Person, (b) any Person of which such Person beneficially owns or holds five (5%) percent or more of any class of Voting Stock or in which such Person beneficially owns or
holds five (5%) percent or more of the equity interests and (c) any director or executive officer of such Person. For the purposes of this definition, the term “control” (including with correlative meanings, the terms
“controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by agreement or otherwise. 
  
 1.5 “Agent” shall mean Wachovia Capital Finance Corporation (Western), in its capacity as agent on behalf of Lenders pursuant to the terms hereof and any replacement or successor agent hereunder. 

 
 1.6 “Agent Payment Account” shall mean account no. 5000000030321
of Agent at Wachovia Bank, National Association, or such other account of Agent as Agent may from time to time designate to Administrative Borrower as the Agent Payment Account for purposes of this Agreement and the other Financing Agreements.

  
 1.7 “Applicable L/C Rate” shall mean the applicable
percentage set forth under the heading “Applicable L/C Rate” in the table contained in the definition of “Applicable Margin.” 
  
 1.8 “Applicable Margin” shall mean, at any time, as to the Interest Rate for Prime Rate Loans and the Interest Rate for Eurodollar Rate Loans,
the applicable percentage (on a per 

  

 2 

 
annum basis) set forth below if the Quarterly Average Excess Availability for the immediately preceding calendar quarter is at or within the amounts
indicated for such percentage: 

																		
	 	  	 Quarterly Average
 Excess
Availability

	  	Applicable Margin for
Prime Rate Loans

	 	 	Applicable Margin for
Eurodollar Rate Loans

	 	 	Applicable
L/C Rate

	 
	 	  	  	Revolving
Loans

	 	 	Term
Loans

	 	 	Revolving
Loans

	 	 	Term
Loans

	 	 
	 Tier 1
	  	$45,000,000 or greater	  	0	 	 	.25	%	 	1.75	%	 	2.25	%	 	1.75	%
							
	 Tier 2
	  	Less than $45,000,000 and greater than or equal to $30,000,000	  	0	 	 	0.50	%	 	2.00	%	 	2.50	 	 	2.00	%
							
	 Tier 3
	  	Less than $30,000,000 and greater than or equal to $15,000,000	  	0.25	%	 	0.75	%	 	2.25	%	 	2.75	%	 	2.25	%
							
	 Tier 4
	  	Less than $15,000,000	  	0.50	%	 	1.00	%	 	2.50	%	 	3.00	%	 	2.50	%

  
 provided, that,
(i) the Applicable Margin shall be calculated and established once each calendar quarter and shall remain in effect until adjusted thereafter after the end of such calendar quarter, (ii) each adjustment of the Applicable Margin shall be
effective as of the first day of a calendar quarter based on the Quarterly Average Excess Availability for the immediately preceding calendar quarter, and (iii) the Applicable Margin until the last day of the second (2nd) full calendar
quarter after the date hereof shall be the amount for Tier 2 set forth above. 
  
 1.9 “Approved Foreign Account Debtor” shall mean an account debtor in respect of an Eligible Account approved by Agent (a) with its chief executive office or principal place of business located outside
of the United States of America, the United Kingdom or Canada, and (b) that is either (i) a direct or indirect Subsidiary of a corporation organized under the laws of a State of the United States of America with its chief executive office
and principal place of business within the United States of America, which Agent determines is satisfactory or (ii) Nokia Corporation and its Subsidiaries or (iii) a Subsidiary of Celestica Corporation. 
  
 1.10 “Approved Fund” shall mean, as to any Lender, any Person
(other than a natural person) that is an Eligible Transferee engaged in making, purchasing, holding or investing in bank loans or similar extensions of credit in the ordinary course of its business and that is administered or managed by such Lender,
or an Affiliate of such Lender, or an entity or an Affiliate of an entity that administers or manages such Lender. 
  

 3 

 1.11 “Assignment and Acceptance” shall mean an Assignment and Acceptance substantially in the
form of Exhibit A attached hereto (with blanks appropriately completed) delivered to Agent in connection with an assignment of a Lender’s interest hereunder in accordance with the provisions of Section 13.7 hereof. 
  
 1.12 “Bank Product Provider” shall mean any Lender, Affiliate of
any Lender or other financial institution (in each case as to any Lender, Affiliate or other financial institution to the extent approved by Agent) that provides any Bank Products to Borrowers or Guarantors. For purposes hereof, Syndication Agent
and its Affiliates are approved by Agent. 
  
 1.13 “Bank
Products” shall mean any one or more of the following types or services or facilities provided to a Borrower or Guarantor by Agent or a Bank Product Provider: (a) credit cards or stored value cards or (b) cash management or related
services, including (i) the automated clearinghouse transfer of funds for the account of a Borrower pursuant to agreement or overdraft for any accounts of Borrowers maintained at Agent or any Bank Product Provider that are subject to the
control of Agent pursuant to any Deposit Account Control Agreement to which Agent, such Affiliate of Agent, Lender or Affiliate of Lender is a party, as applicable, and (ii) controlled disbursement services and (iii) Hedge Agreements if
and to the extent permitted hereunder. Any of the foregoing shall only be included in the definition of the term “Bank Products” to the extent that the Lender, its Affiliate or the other financial institution has been approved by Agent.
For purposes hereof, Syndication Agent and its Affiliates are approved by Agent. 
  
 1.14 “Blocked Accounts” shall have the meaning set forth in Section 6.3 hereof. 
  
 1.15 “Borrowers” shall mean, collectively, the following (together with their respective successors and assigns): (a) Merix Corporation, an
Oregon corporation; (b) Merix San Jose, Inc., a California corporation; and (c) any other Person that at any time after the date hereof becomes a Borrower; each sometimes being referred to herein individually as a “Borrower”.

  
 1.16 “Borrowing Base” shall mean, at any time the
amount equal to: 
  
 (a) the sum of: 
  
 (i) eighty-five (85%) percent of the Eligible Accounts in respect of
which the account debtor is not an Approved Foreign Account Debtor, plus  
  
 (ii) the lesser of (A) eighty-five (85%) percent of the Eligible Accounts in respect of which the account debtor is an Approved Foreign Account Debtor, or (B) $10,000,000 or (C) the amount equal to
fifty (50%) percent of the sum of (1) the amount determined in accordance with clause (a)(i) of this definition plus (2) the lesser of the amount determined in accordance with clause (ii)(A) or clause (ii)(B) of this definition,
plus  
  
 (iii) on and after the Inventory Availability
Date, the lesser of: 
  
 (A) the Inventory Loan Limit, or

  
 (B) the sum of: 
  

 4 

 (1) the lesser of seventy (70%) percent multiplied by the Value of the Eligible Finished Goods
Inventory or ninety (90%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory, plus 
  
 (2) the lesser of thirty-five (35%) percent multiplied by the Value of the Eligible Inventory of such Borrower consisting of raw materials (other
than Eligible Gold Raw Material Inventory) or ninety (90%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory, plus 
  
 (3) the lesser of seventy (70%) percent multiplied by the Value of the Eligible Gold Raw Material Inventory or ninety
(90%) percent of the Net Recovery Percentage for such Eligible Inventory multiplied by the Value of such Eligible Inventory, 
  
 minus 
  
 (b) Reserves. 
  
 Notwithstanding anything to the contrary contained herein, in no event shall any Eligible Inventory be included in the calculation of the Borrowing Base unless and until the Inventory Availability Date. For purposes
only of applying the Inventory Loan Limit, Agent may treat the then undrawn amounts of outstanding Letters of Credit for the purpose of purchasing Eligible Inventory as Revolving Loans to the extent Agent is in effect basing the issuance of the
Letter of Credit on the Value of the Eligible Inventory being purchased with such Letter of Credit. In determining the actual amounts of such Letter of Credit to be so treated for purposes of the sublimit, the outstanding Revolving Loans and
Reserves shall be attributed first to any components of the lending formulas set forth above that are not subject to such sublimit, before being attributed to the components of the lending formulas subject to such sublimit. The amounts of Eligible
Inventory of a Borrower shall, at Agent’s option, be determined based on the lesser of the amount of Inventory set forth in the general ledger of such Borrower or the perpetual inventory record maintained by such Borrower. 
  
 1.17 “Borrowing Base Certificate” shall mean a certificate
substantially in the form of Exhibit B hereto, as such form may from time to time be modified by Agent in a manner consistent with the terms of this Agreement, which is duly completed (including all schedules thereto) and executed by the
vice-president-finance, chief financial officer, treasurer, assistant treasurer, controller or other financial or senior officer of Administrative Borrower and delivered to Agent. 
  
 1.18 “Business Day” shall mean any day other than a Saturday, Sunday, or other day on which commercial banks are
authorized or required to close under the laws of the State of California, New York or North Carolina, and a day on which Agent is open for the transaction of business, except that if a determination of a Business Day shall relate to any Eurodollar
Rate Loans, the term Business Day shall also exclude any day on which banks are closed for dealings in dollar deposits in the London interbank market or other applicable Eurodollar Rate market. 
  
 1.19 “Capital Expenditures” shall mean, with respect to any Person
for any period, the aggregate of all expenditures by such Person and its Subsidiaries during such period that in accordance with GAAP are or should be included in “property, plant and equipment” or in a 

  

 5 

 
similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or financed and including that portion of the obligations under
Capital Leases that is capitalized on the balance sheet of such Person during such period. 
  
 1.20 “Capital Leases” shall mean, as applied to any Person, any lease of (or any agreement conveying the right to use) any property (whether real, personal or mixed) by such Person as lessee which in
accordance with GAAP, is required to be reflected as a liability on the balance sheet of such Person. 
  
 1.21 “Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however
designated) of such Person’s capital stock or partnership, limited liability company or other equity interests at any time outstanding, and any and all rights, warrants or options exchangeable for or convertible into such capital stock or other
interests (but excluding any debt security that is exchangeable for or convertible into such capital stock). 
  
 1.22 “Cash Dominion Event” shall mean either (a) a Default or Event of Default shall exist or have occurred and is continuing or
(b) the Excess Availability shall at any time be less than $10,000,000; provided, that, 
  
 (i) a Cash Dominion Event shall be deemed to be continuing after the occurrence of either of the foregoing until terminated as provided in clauses
(ii) and (iii) of this definition below, 
  
 (ii) at any
time after Agent has first exercised its right under Section 6.3(c) hereof to notify the depository banks at which the Blocked Accounts are maintained to transfer funds in the Blocked Accounts to the Agent Payment Account after a Cash Dominion
Event, in the event that the Excess Availability is equal to or greater than $10,000,000 for any period of sixty (60) consecutive days and no Default or Event of Default shall exist or have occurred and be continuing, then upon the written
request of Administrative Borrower, the Cash Dominion Event that was the basis for the exercise by Agent of such right shall be deemed to have terminated and no longer continuing, 
  
 (iii) if after any such termination of a Cash Dominion Event, a subsequent Cash Dominion Event shall occur, such subsequent
Cash Dominion Event shall not be deemed to be terminated and no longer continuing prior to the date that is the first anniversary of the date of the later of an event described in clause (a) or (b) above and then only if the conditions set
forth in clause (ii) above have been satisfied for the sixty (60) consecutive days immediately preceding the termination of such subsequent Cash Dominion Event. 
  
 1.23 “Cash Equivalents” shall mean, at any time, (a) any evidence of Indebtedness with a maturity date of
ninety (90) days or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof; provided, that, the full faith and credit of the United States of America is
pledged in support thereof; (b) certificates of deposit or bankers’ acceptances with a maturity of ninety (90) days or less of any financial institution that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $1,000,000,000; (c) commercial paper (including variable 

  

 6 

 
rate demand notes and taxable auction variable rate notes) with a maturity of ninety (90) days or less (or in the case of auction variable rate notes,
with the next auction or a maturity within ninety (90) days or less) issued by a corporation (but not any Affiliate of a Borrower or Guarantor), or in the case of taxable auction variable rate notes, issued by a governmental education
authority, in each case organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc. or at
least P-1 by Moody’s Investors Service, Inc.; (d) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause (a) above entered into with any financial
institution having combined capital and surplus and undivided profits of not less than $1,000,000,000; (e) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by
the United States of America or issued by any governmental agency thereof and backed by the full faith and credit of the United States of America, in each case maturing within ninety (90) days or less from the date of acquisition;
provided, that, the terms of such agreements comply with the guidelines set forth in the Federal Financial Agreements of Depository Institutions with Securities Dealers and Others, as adopted by the Comptroller of the Currency on
October 31, 1985; and (f) investments in money market funds and mutual funds which invest substantially all of their assets in securities of the types described in clauses (a) through (e) above. 
  
 1.24 “Change of Control” shall mean (a) the acquisition by any
Person or group (as such term is used in Section 13(d)(3) of the Exchange Act) of more than thirty-five (35%) percent of beneficial ownership, directly or indirectly, of the voting power of the total outstanding Voting Stock of Parent or
the Board of Directors of Parent; (b) during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board of Directors of Parent (together with any new directors whose nomination for
election by the stockholders of Parent was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of Directors of Parent then still in office; or (c) the failure of Parent to own directly or indirectly one hundred (100%) percent of the voting power of the total
outstanding Voting Stock of any other Borrower or Guarantor. 
  
 1.25 “Code” shall mean the Internal Revenue Code of 1986, together with all rules, regulations and interpretations thereunder or related thereto, all as amended and in effect from time to time. 
  
 1.26 “Collateral” shall have the meaning set forth in
Section 5 hereof. 
  
 1.27 “Collateral Access
Agreement” shall mean an agreement in writing, in form and substance satisfactory to Agent, from any lessor of premises to any Borrower or Guarantor, or any other person to whom any Collateral is consigned or who has custody, control or
possession of any such Collateral or is otherwise the owner or operator of any premises on which any of such Collateral is located, in favor of Agent with respect to the Collateral at such premises or otherwise in the custody, control or possession
of such lessor, consignee or other person. 
  

 7 

 1.28 “Commitment” shall mean, at any time, as to each Lender, the principal amount set forth
below such Lender’s signature on the signatures pages hereto designated as the Commitment or on Schedule 1 to the Assignment and Acceptance Agreement pursuant to which such Lender became a Lender hereunder in accordance with the provisions of
Section 13.7 hereof, as the same may be adjusted from time to time in accordance with the terms hereof; sometimes being collectively referred to herein as “Commitments”. 
  
 1.29 “Consolidated Net Income” shall mean, with respect to any Person for any period, the aggregate of the net
income (loss) of such Person, for such period (excluding to the extent included therein any extraordinary and/or one time or unusual and non-recurring gains or any non-cash losses) after deducting all charges which should be deducted before arriving
at the net income (loss) for such period and, without duplication, after deducting the Provision for Taxes for such period, all as determined in accordance with GAAP. For the purposes of this definition, net income excludes any gain or non-cash
loss, together with any related Provision for Taxes for such gain or non-cash loss, realized upon the sale or other disposition of any assets that are not sold in the ordinary course of business (including, without limitation, dispositions pursuant
to sale and leaseback transactions) or of any Capital Stock of such Person and any net income realized or loss incurred as a result of changes in accounting principles or the application thereof to such Person. 
  
 1.30 “Credit Facility” shall mean the Loans and Letters of Credit
provided to or for the benefit of a Borrower pursuant to Sections 2.1, 2.2 and 2.3 hereof. 
  
 1.31 “Default” shall mean an act, condition or event which with notice or passage of time or both would constitute an Event of Default. 
  
 1.32 “Defaulting Lender” shall have the meaning set forth in Section 6.11 hereof. 
  
 1.33 “Deposit Account Control Agreement” shall mean an agreement in
writing, in form and substance satisfactory to Agent, by and among Agent, the Borrower or Guarantor with a deposit account at any bank and the bank at which such deposit account is at any time maintained which provides that such bank will comply
with instructions originated by Agent directing disposition of the funds in the deposit account without further consent by such Borrower or Guarantor and has such other terms and conditions as Agent may require. 
  
 1.34 “Domestic Subsidiary” shall mean any direct or indirect
Subsidiary of a Borrower or Guarantor, other than a Foreign Subsidiary. 
  
 1.35 “EBITDA” shall mean, as to any Person, with respect to any period, an amount equal to: (a) the Consolidated Net Income of such Person for such period, plus (b) depreciation, amortization and other non-cash charges
(including, but not limited to, imputed interest, deferred compensation and for the grant of options for the purchase of shares), in each case for such period (to the extent deducted in the computation of Consolidated Net Income of such Person), and
in the case of Parent, up to $3,000,000 of legal expenses incurred in connection with the securities litigation currently pending against Parent in the United States District Court for the District of Oregon in the aggregate for all periods (and to
the extent deducted in the computation of Consolidated Net Income), all in accordance with GAAP, plus (c) Interest Expense for such 

  

 8 

 
period (to the extent deducted in the computation of Consolidated Net Income of such Person), plus (d) the Provision for Taxes for such period (to the
extent deducted in the computation of Consolidated Net Income of such Person), plus (e) in the case of Parent, the purchase accounting inventory mark-up taken by Merix San Jose as of December 2004 in an amount not to exceed $320,000 and up to
$650,000 in severance charges by Parent taken in the first quarter of its 2006 fiscal year. 
  
 1.36 “Eligible Accounts” shall mean Accounts created by a Borrower that in each case satisfy the criteria set forth below as determined by Agent. In general, Accounts shall be Eligible Accounts if:

  
 (a) such Accounts arise from the actual and bona fide sale
and delivery of goods by such Borrower or rendition of services by such Borrower in the ordinary course of its business which transactions are completed in accordance with the terms and provisions contained in any documents related thereto;

  
 (b) such Accounts are not unpaid more than sixty
(60) days after the original due date thereof or more than one hundred twenty (120) days after the date of the original invoice for them; 
  
 (c) such Accounts comply with the terms and conditions contained in Section 7.2(b) of this Agreement; 
  
 (d) such Accounts do not arise from sales on consignment, guaranteed sale,
sale and return, sale on approval, or other terms under which payment by the account debtor may be conditional or contingent; 
  
 (e) the chief executive office of the account debtor with respect to such Accounts is located in the United States of America, the United Kingdom or
Canada or the account debtor with respect to such Accounts is an Approved Foreign Account Debtor; provided, that, 
  
 (i) at any time promptly upon Agent’s request, such Borrower shall (A) execute and deliver, or cause to be executed and delivered, such other
agreements, documents and instruments as may be required by Agent to perfect (or otherwise establish the effectiveness and priority of) the security interests of Agent in those Accounts of (1) an account debtor with its chief executive office
or principal place of business in Canada in accordance with the applicable laws of the Province of Canada, (2) an account debtor with its chief executive office or principal place of business in the United Kingdom in accordance with the
applicable laws of the United Kingdom, or (3) of an Approved Foreign Account Debtor in accordance with the applicable laws of the jurisdiction in which the Approved Foreign Account Debtor has its chief executive office or principal place of
business, as the case may be, and (B) take or cause to be taken such other and further actions as Agent may request to establish the effectiveness of the rights of Agent to such accounts as against a third party (including any insolvency
official) and to otherwise enable Agent as secured party with respect thereto to collect such Accounts under the applicable laws of the jurisdiction in which such account debtor or Approved Foreign Account Debtor, as the case may be, has its chief
executive office or principal place of business or which might otherwise affect the rights of Agent with respect thereto; 
  

 9 

 (ii) at Agent’s option, if the chief executive office and principal place of business of the
account debtor with respect to such Accounts is located other than in the United States of America, the United Kingdom or Canada or the account debtor is not an Approved Foreign Account Debtor, then otherwise Eligible Accounts owing by an account
debtor may be Eligible Accounts if either: (A) such Account is subject to credit insurance payable to Agent issued by an insurer and on terms and in an amount acceptable to Agent, or (B) the account debtor has delivered to such Borrower an
irrevocable letter of credit issued or confirmed by a bank satisfactory to Agent and payable only in the United States of America and in U.S. dollars, sufficient to cover such Account, in form and substance satisfactory to Agent and if required by
Agent, the original of such letter of credit has been delivered to Agent or Agent’s agent and the issuer thereof, and such Borrower has complied with the terms of Section 5.2(f) hereof with respect to the assignment of the proceeds of such
letter of credit to Agent or naming Agent as transferee beneficiary thereunder, as Agent may specify; 
  
 (f) such Accounts do not consist of progress billings (such that the obligation of the account debtors with respect to such Accounts is conditioned upon
such Borrower’s satisfactory completion of any further performance under the agreement giving rise thereto), bill and hold invoices or retainage invoices, except as to bill and hold invoices, if Agent shall have received an agreement in writing
from the account debtor, in form and substance satisfactory to Agent, confirming the unconditional obligation of the account debtor to take the goods related thereto and pay such invoice; 
  
 (g) the account debtor with respect to such Accounts has not asserted a counterclaim, defense or dispute and is not owed or
does not claim to be owed any amounts that may give rise to any right of setoff or recoupment against such Accounts (but the portion of the Accounts of such account debtor in excess of the amount at any time and from time to time owed by such
Borrower to such account debtor or claimed owed by such account debtor may be deemed Eligible Accounts); 
  
 (h) there are no facts, events or occurrences which would impair the validity, enforceability or collectability of such Accounts or reduce the amount
payable or delay payment thereunder; 
  
 (i) such Accounts are
subject to the first priority, valid and perfected security interest of Agent and any goods giving rise thereto are not, and were not at the time of the sale thereof, subject to any liens except any Permitted Liens that are subject to an
intercreditor agreement in form and substance satisfactory to Agent between the holder of such security interest or lien and Agent or are permitted under Sections 9.9(b) or 9.9(c) hereof; 
  
 (j) neither the account debtor nor any officer or employee of the account debtor with respect to such Accounts is an
officer, employee, agent or other Affiliate of any Borrower or Guarantor; 
  
 (k) the account debtors with respect to such Accounts are not any foreign government, the United States of America, any State, political subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State, political subdivision, department, agency or instrumentality thereof, upon Agent’s request, the Federal Assignment of Claims Act of 1940, as amended or any similar State or local law,
if applicable, has been complied with in a manner satisfactory to Agent; 
  

 10 

 (l) there are no proceedings or actions which are threatened or pending against the account
debtors with respect to such Accounts which might result in any material adverse change in any such account debtor’s financial condition (including, without limitation, any bankruptcy, dissolution, liquidation, reorganization or similar
proceeding); 
  
 (m) the aggregate amount of such Accounts (i)
owing by a single account debtor (other than Solectron Corporation) do not constitute more than ten (10%) percent of the aggregate amount of all otherwise Eligible Accounts, (ii) owing by Solectron Corporation do not constitute more than forty-five
(45%) percent of the aggregate amount of all otherwise Eligible Accounts, which percentage as to Solectron Corporation may be reduced in such amounts as Agent may determine based on Agent’s determination of the creditworthiness of Solectron
Corporation, and (iii) owing by a single account debtor and its affiliates that are Approved Foreign Account Debtors do not exceed $2,500,000, provided, that, such Accounts owing by one account debtor and its affiliates that are Approved Foreign
Account Debtors may exceed such amount, but not more than $4,500,000 (but the portion of the Accounts not in excess of the applicable percentages or limits may be deemed Eligible Accounts); 
  
 (n) such Accounts are not owed by an account debtor who has Accounts unpaid
more than one hundred twenty (120) days after the original invoice date for them or more than sixty (60) days past the due date thereof, which constitute more than fifty (50%) percent of the total Accounts of such account debtor; 
  
 (o) the account debtor is not located in a state requiring the filing of a
Notice of Business Activities Report or similar report in order to permit such Borrower to seek judicial enforcement in such State of payment of such Account, unless such Borrower has qualified to do business in such state or has filed a Notice of
Business Activities Report or equivalent report for the then current year or such failure to file and inability to seek judicial enforcement is capable of being remedied without any material delay or material cost; 
  
 (p) such Accounts are owed by account debtors whose total indebtedness to
such Borrower does not exceed the credit limit with respect to such account debtors as determined by such Borrower from time to time, to the extent such credit limit as to any account debtor is established consistent with the current practices of
such Borrower as of the date hereof and such credit limit is acceptable to Agent (but the portion of the Accounts not in excess of such credit limit may be deemed Eligible Accounts); and 
  
 (q) such Accounts are owed by account debtors deemed creditworthy at all times by Agent in good faith. 
  
 The criteria for Eligible Accounts set forth above may only be changed and any new criteria
for Eligible Accounts may only be established by Agent in good faith based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the
extent Agent has no written notice thereof from a Borrower prior to the date hereof, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Accounts in the good faith determination of
Agent. Any Accounts that are not Eligible Accounts shall nevertheless be part of the Collateral. 
  

 11 

 1.37 “Eligible Finished Goods Inventory” shall mean Eligible Inventory consisting of finished
goods for which the Borrower that is the owner of such goods has received and accepted a confirmed purchase order for such Inventory from a customer in the ordinary course of the business of such Borrower and customer or for which such Borrower has
a valid and enforceable written sales contract pursuant to which such Inventory is to be sold by such Borrower and purchased by such customer in accordance with the terms of such contract and no party is in default under the terms of such contract.

  
 1.38 “Eligible Gold Raw Material Inventory” shall
mean Eligible Inventory consisting of gold used as raw material for the finished goods of Borrowers. 
  
 1.39 “Eligible Inventory” shall mean, as to each Borrower, Inventory of such Borrower consisting of finished goods held for resale in the
ordinary course of the business of such Borrower and raw materials for such finished goods, that in each case satisfy the criteria set forth below as determined by Agent. In general, Eligible Inventory shall not include: (a) work-in-process; (b)
components which are not part of finished goods; (c) spare parts for equipment; (d) packaging and shipping materials; (e) supplies used or consumed in such Borrower’s business; (f) Inventory at premises other than (i) premises owned or leased
and controlled by any Borrower or (ii) premises owned and operated by third parties that are expressly approved by Agent subject to the satisfaction of such additional requirements with respect to such Inventory as Agent may from time to time
establish; (g) Inventory subject to a security interest or lien in favor of any Person other than Agent except those permitted in this Agreement that are subject to an intercreditor agreement in form and substance satisfactory to Agent between the
holder of such security interest or lien and Agent; (h) bill and hold goods; (i) unserviceable, obsolete or slow moving Inventory; (j) Inventory that is not subject to the first priority, valid and perfected security interest of Agent; (k) returned,
damaged and/or defective Inventory; (l) Inventory purchased or sold on consignment and (m) Inventory located outside the United States of America. The criteria for Eligible Inventory set forth above may only be changed and any new criteria for
Eligible Inventory may only be established by Agent in good faith based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the
extent Agent has no written notice thereof from a Borrower prior to the date hereof, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Inventory in the good faith determination of
Agent. Any Inventory that is not Eligible Inventory shall nevertheless be part of the Collateral. 
  
 1.40 “Eligible Transferee” shall mean (a) any Lender; (b) the parent company of any Lender and/or any Affiliate of such Lender which is at least
fifty (50%) percent owned by such Lender or its parent company; (c) any person (whether a corporation, partnership, trust or otherwise) that is engaged in the business of making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered or managed by a Lender or with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by 

  

 12 

 
an Affiliate of such investment advisor, and in each case is approved by Agent; and (d) any other commercial bank, financial institution or
“accredited investor” (as defined in Regulation D under the Securities Act of 1933) approved by Agent, provided, that, (i) neither any Borrower nor any Guarantor or any Affiliate of any Borrower or Guarantor shall
qualify as an Eligible Transferee and (ii) no Person to whom any Indebtedness which is in any way subordinated in right of payment to any other Indebtedness of any Borrower or Guarantor shall qualify as an Eligible Transferee, except as Agent
may otherwise specifically agree. 
  
 1.41 “Environmental
Laws” shall mean all foreign, Federal, State and local laws (including common law), legislation, rules, codes, licenses, permits (including any conditions imposed therein), authorizations, judicial or administrative decisions, injunctions or
agreements between any Borrower or Guarantor and any Governmental Authority, (a) relating to pollution and the protection, preservation or restoration of the environment (including air, water vapor, surface water, ground water, drinking water,
drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or to human health or safety, (b) relating to the exposure to, or the use, storage, recycling, treatment, generation, manufacture,
processing, distribution, transportation, handling, labeling, production, release or disposal, or threatened release, of Hazardous Materials, or (c) relating to all laws with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Materials. The term “Environmental Laws” includes (i) the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Federal Superfund Amendments and Reauthorization
Act, the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal Solid
Waste Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of 1974, (ii) applicable state counterparts to such laws and (iii) any common law
or equitable doctrine that may impose liability or obligations for injuries or damages due to, or threatened as a result of, the presence of or exposure to any Hazardous Materials. 
  
 1.42 “EPC Acquisition” shall mean the purchase by the Subsidiaries of Merix Caymans Holding Company Limited listed
on Schedule 1.42 hereof of all or substantially all of the assets of the EPC Companies (or in the case of Eastern Pacific Circuits Investments Limited, a company incorporated under the laws of Hong Kong and Eastern Pacific Circuits Investments
(Singapore) Pte Ltd, a company incorporated under the laws of Singapore, the shares thereof) pursuant to the EPC Acquisition Documents as in effect on the date hereof. 
  
 1.43 “EPC Acquisition Documents” shall mean, collectively, the following (as the same now exist or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced): (a) the Master Sale and Purchase Agreement, dated April 14, 2005, by and among Parent and the EPC Companies and (b) the bills of sale, assignment and
assumption agreements and other agreements, documents and instruments executed and/or delivered in connection therewith all as listed on Schedule 1.43 hereto; sometimes being referred to herein individually as an “EPC Acquisition
Document”. 
  
 1.44 “EPC Companies” shall mean,
collectively, Eastern Pacific Circuits Limited, a company incorporated under the laws of the Cayman Islands, and its subsidiaries listed on Schedule 1.44 hereto and their respective successors and assigns; sometimes being referred to herein
individually as an “EPC Company”. 
  

 13 

 1.45 “Equipment” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and
Guarantor’s now owned and hereafter acquired equipment, wherever located, including machinery, data processing and computer equipment (whether owned or licensed and including embedded software), vehicles, tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located. 
  
 1.46 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, together with all rules, regulations
and interpretations thereunder or related thereto, all as amended and in effect from time to time. 
  
 1.47 “ERISA Affiliate” shall mean any person required to be aggregated with any Borrower, any Guarantor or any of its or their respective
Domestic Subsidiaries under Sections 414(b) or 414(c), or, solely for purposes of Title IV of ERISA and the funding requirements of Section 412 of the Code and Section 302 of ERISA, Sections 414(m) or 414(o) of the Code. 
  
 1.48 “ERISA Event” shall mean (a) any “reportable
event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Pension Plan, other than events as to which the requirement of notice has been waived in regulations by statute, regulation or
otherwise; (b) the adoption of any amendment to a Pension Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) a complete or partial withdrawal by any Borrower,
Guarantor or any ERISA Affiliate from a Multiemployer Plan or a cessation of operations which is treated as such a withdrawal or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the Pension Benefit Guaranty Corporation to terminate a Pension Plan; (e) an event or condition which would
constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of any liability under Title IV of ERISA, other than the Pension Benefit Guaranty
Corporation premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower, Guarantor or any ERISA Affiliate in excess of $500,000 and (g) any other event or condition with respect to a Plan including any Pension Plan
subject to Title IV of ERISA maintained, or contributed to, by any ERISA Affiliate that could reasonably be expected to result in liability of any Borrower in excess of $500,000. 
  
 1.49 “Eurodollar Rate Loans” shall mean any Loans or portion thereof on which interest is payable based on the
Adjusted Eurodollar Rate in accordance with the terms hereof. 
  
 1.50 “Event of Default” shall mean the occurrence or existence of any event or condition described in Section 10.1 hereof. 
  

 14 

 1.51 “Excess Availability” shall mean, the amount, as determined by Agent, calculated at any
date, equal to: 
  
 (a) the lesser of: (i) the Borrowing
Base and (ii) the Revolving Loan Limit (in each case under (i) or (ii) after giving effect to any Reserves other than any Reserves in respect of Letter of Credit Obligations), minus 
  
 (b) the sum of: (i) the amount of all then outstanding and unpaid
Obligations (but not including for this purpose Obligations of a Borrower arising pursuant to any guarantees in favor of Agent and Lenders of the Obligations of the other Borrower or the then outstanding aggregate principal amount of the Term Loans
or any outstanding Letter of Credit Obligations), plus (ii) the amount of all Reserves then established in respect of Letter of Credit Obligations, plus (iii) the aggregate amount of all then outstanding and unpaid trade payables and other
obligations of Borrowers owed to unaffiliated third parties which are outstanding more than sixty (60) days past due as of the end of the immediately preceding month or at Agent’s option, as of a more recent date based on such reports as
Agent may from time to time specify (other than trade payables or other obligations being contested or disputed by a Borrower in good faith), plus (iv) without duplication, and at Agent’s option, the amount of checks issued by a Borrower
to pay trade payables and other obligations which are more than sixty (60) days past due as of the end of the immediately preceding month or at Agent’s option, as of a more recent date based on such reports as Agent may from time to time
specify (other than trade payables or other obligations being contested or disputed by a Borrower in good faith), but not yet sent, plus 
  
 (c) Qualified Cash. 
  
 1.52 “Exchange Act” shall mean the Securities Exchange Act of 1934, together with all rules, regulations and interpretations thereunder or
related thereto. 
  
 1.53 “Fee Letter” shall mean the
letter agreement, dated of even date herewith, by and among Borrowers, Guarantors and Agent, setting forth certain fees payable by Borrowers to Agent for the benefit of itself and Lenders, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced. 
  
 1.54 “Financing Agreements” shall mean, collectively, this Agreement and all notes, guarantees, security agreements, deposit account control agreements, investment property control agreements, intercreditor agreements and all
other agreements, documents and instruments now or at any time hereafter executed and/or delivered by any Borrower or Guarantor in connection with this Agreement; provided, that, in no event shall the term Financing Agreements be
deemed to include any Hedge Agreement. 
  
 1.55 “Fixed Charge
Coverage Ratio” shall mean, as to any Person, with respect to any period, the ratio of: (a) the amount equal to EBITDA of such Person for such period to (b) the Fixed Charges of such Person for such period. 
  
 1.56 “Fixed Charges” shall mean, as to any Person, with respect to
any period, the sum of, without duplication, (a) all Interest Expense during such period, plus (b) all Capital Expenditures during such period (other than, as to Parent and its Subsidiaries, Capital Expenditures made with the proceeds of
Indebtedness permitted for such purpose hereunder), plus (c) all regularly scheduled (as determined at the beginning of the respective period) principal payments in respect of Indebtedness for borrowed money (excluding payments in 

  

 15 

 
respect of Revolving Loans which do not result in a reduction of the Maximum Credit) and Indebtedness with respect to Capital Leases (and without duplicating
items (a) and (c) of this definition, the interest component with respect to Indebtedness under Capital Leases) during such period, plus (d) dividends and other distributions, and repurchases and redemptions, in respect of Capital
Stock paid during such period, plus (e) cash costs paid under any Hedge Agreement, plus (f) taxes paid during such period in cash. 
  
 1.57 “Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which a Borrower is resident
for tax purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. 
  
 1.58 “Foreign Subsidiary” shall mean, a direct or indirect Subsidiary of Parent organized or incorporated under
the laws of a jurisdiction other than a state of the United States of America, the United States of America or its territories or its possessions. 
  
 1.59 “Funding Bank” shall have the meaning given to such term in Section 3.3 hereof. 
  
 1.60 “GAAP” shall mean generally accepted accounting principles in
the United States of America as in effect from time to time as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board which are applicable to the circumstances as of the date of determination consistently applied, except that, for purposes of Section 9.17 hereof, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements delivered to Agent prior to the date hereof. 
  
 1.61 “Governmental Authority” shall mean any nation or government, any state, province, or other political
subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 
  
 1.62 “Guarantors” shall mean, collectively, the following (together
with their respective successors and assigns): (a) Merix Nevada, Inc., an Oregon corporation; (b) Merix Asia, Inc., an Oregon corporation; (c) Data Circuit Holdings, Inc., a Delaware corporation; and (d) any other Person that at
any time after the date hereof becomes party to a guarantee in favor of Agent or any Lender or otherwise liable on or with respect to the Obligations or who is the owner of any property which is security for the Obligations (other than Borrowers);
each sometimes being referred to herein individually as a “Guarantor”. 
  
 1.63 “Hazardous Materials” shall mean any hazardous, toxic or dangerous substances, materials and wastes, including hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or type of pollutants or contaminants (including materials which
include hazardous constituents), sewage, sludge, industrial slag, solvents and/or any other similar substances, materials, or wastes and including any other substances, materials or wastes that are or become regulated under any Environmental Law
(including any that are or become classified as hazardous or toxic under any Environmental Law). 
  

 16 

 1.64 “Hedge Agreement” shall mean an agreement between any Borrower or Guarantor and a Bank
Product Provider that is a rate swap agreement, basis swap, forward rate agreement, commodity swap, forward commodity contracts, interest rate option, forward foreign exchange agreement, spot foreign exchange agreement, rate cap agreement rate,
floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency option, any other similar agreement (including any option to enter into any of the foregoing or a master agreement for any the foregoing
together with all supplements thereto) for the purpose of protecting against or managing exposure to fluctuations in interest or exchange rates, currency valuations or commodity prices; sometimes being collectively referred to herein as “Hedge
Agreements”. 
  
 1.65 “Indebtedness” shall mean,
with respect to any Person, any liability, whether or not contingent, (a) in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof) or evidenced by bonds,
notes, debentures or similar instruments; (b) representing the balance deferred and unpaid of the purchase price of any property or services (other than an account payable to a trade creditor (whether or not an Affiliate) incurred in the
ordinary course of business of such Person and payable in accordance with customary trade practices); (c) all obligations as lessee under leases which have been, or should be, in accordance with GAAP recorded as Capital Leases; (d) any
contractual obligation, contingent or otherwise, of such Person to pay or be liable for the payment of any indebtedness described in this definition of another Person, including, without limitation, any such indebtedness, directly or indirectly
guaranteed, or any agreement to purchase, repurchase, or otherwise acquire such indebtedness, obligation or liability or any security therefor, or to provide funds for the payment or discharge thereof, or to maintain solvency, assets, level of
income, or other financial condition; (e) all obligations with respect to redeemable stock and redemption or repurchase obligations under any Capital Stock or other equity securities issued by such Person; (f) all reimbursement obligations
and other liabilities of such Person with respect to surety bonds (whether bid, performance or otherwise), letters of credit, banker’s acceptances, drafts or similar documents or instruments issued for such Person’s account; (g) all
indebtedness of such Person in respect of indebtedness of another Person for borrowed money or indebtedness of another Person otherwise described in this definition which is secured by any consensual lien, security interest, collateral assignment,
conditional sale, mortgage, deed of trust, or other encumbrance on any asset of such Person, whether or not such obligations, liabilities or indebtedness are assumed by or are a personal liability of such Person, all as of such time; (h) all
obligations, liabilities and indebtedness of such Person (marked to market) arising under swap agreements, cap agreements and collar agreements and other agreements or arrangements designed to protect such person against fluctuations in interest
rates or currency or commodity values; (i) all obligations owed by such Person under License Agreements with respect to non-refundable, advance or minimum guarantee royalty payments; (j) indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer to the extent such Person is liable therefor as a result of such Person’s ownership interest in such entity, except to the extent that the terms of such indebtedness expressly provide
that such Person is not liable therefor or such Person has no liability therefor as a matter of law and (k) the principal and interest portions of all rental obligations of such Person under any 

  

 17 

 
synthetic lease or similar off-balance sheet financing where such transaction is considered to be borrowed money for tax purposes but is classified as an
operating lease in accordance with GAAP. 
  
 1.66
“Information Certificate” shall mean, collectively, the Information Certificates of Borrowers and Guarantors constituting Exhibit C hereto containing material information with respect to Borrowers and Guarantors, their respective
businesses and assets provided by or on behalf of Borrowers and Guarantors to Agent in connection with the preparation of this Agreement and the other Financing Agreements and the financing arrangements provided for herein. 
  
 1.67 “Intellectual Property” shall mean, as to each Borrower and
Guarantor, such Borrower’s and Guarantor’s now owned and hereafter arising or acquired: patents, patent rights, patent applications, copyrights, works which are the subject matter of copyrights, copyright applications, copyright
registrations, trademarks, servicemarks, trade names, trade styles, trademark and service mark applications, and licenses and rights to use any of the foregoing and all applications, registrations and recordings relating to any of the foregoing as
may be filed in the United States Copyright Office, the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof, any political subdivision thereof or in any other country or jurisdiction,
together with all rights and privileges arising under applicable law with respect to any Borrower’s or Guarantor’s use of any of the foregoing; all extensions, renewals, reissues, divisions, continuations, and continuations-in-part of any
of the foregoing; all rights to sue for past, present and future infringement of any of the foregoing; inventions, trade secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys, reports, manuals, and operating standards;
goodwill (including any goodwill associated with any trademark or servicemark, or the license of any trademark or servicemark); customer and other lists in whatever form maintained; trade secret rights, copyright rights, rights in works of
authorship, domain names and domain name registration; software and contract rights relating to computer software programs, in whatever form created or maintained. 
  
 1.68 “Interest Expense” shall mean, for any period, as to any Person, as determined in accordance with GAAP, the
total interest expense of such Person, whether paid or accrued during such period (including the interest component of Capital Leases for such period), including, without limitation, discounts in connection with the sale of any Accounts and bank
fees, commissions, discounts and other fees and charges owed with respect to letters of credit, banker’s acceptances or similar instruments. 
  
 1.69 “Interest Period” shall mean for any Eurodollar Rate Loan, a period of approximately one (1), two (2), three (3) or six
(6) months duration as any Borrower (or Administrative Borrower on behalf of such Borrower) may elect, the exact duration to be determined in accordance with the customary practice in the applicable Eurodollar Rate market; provided,
that, such Borrower (or Administrative Borrower on behalf of such Borrower) may not elect an Interest Period which will end after the last day of the then-current term of this Agreement. 
  
 1.70 “Interest Rate” shall mean, as to Prime Rate Loans, a rate
equal to the Prime Rate plus the Applicable Margin for Prime Rate Loans, and as to Eurodollar Rate Loans, a rate equal 

  

 18 

 
to the Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar Rate Loans (in each case, based on the London Interbank Offered Rate
applicable for the Interest Period selected by a Borrower, or by Administrative Borrower on behalf of such Borrower, as in effect two (2) Business Days prior to the commencement of the Interest Period whether such rate is higher or lower than
any rate previously quoted to any Borrower or Guarantor). Notwithstanding anything to the contrary contained in this definition, the Applicable Margin otherwise used to calculate the Interest Rate for Prime Rate Loans and Eurodollar Rate Loans shall
be the percentage set forth in the definition of the term Applicable Margin for each category of Loans that is then applicable plus two (2.00%) percent per annum, at Agent’s option, (i) for the period (A) from and after the
effective date of termination or non-renewal hereof until such time as all Obligations are indefeasibly paid and satisfied in full in immediately available funds, or (B) from and after the date of the occurrence of any Event of Default, and for
so long as such Event of Default is continuing as determined by Agent and (ii) on the Revolving Loans to any Borrower at any time outstanding in excess of the Borrowing Base or the Revolving Loan Limit (whether or not such excess(es) arise or
are made with or without Agent’s or any Lender’s knowledge or consent and whether made before or after an Event of Default). 
  
 1.71 “Inventory” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s now owned and hereafter
existing or acquired goods, wherever located, which (a) are leased by such Borrower or Guarantor as lessor; (b) are held by such Borrower or Guarantor for sale or lease or to be furnished under a contract of service; (c) are furnished
by such Borrower or Guarantor under a contract of service; or (d) consist of raw materials, work in process, finished goods or materials used or consumed in its business. 
  
 1.72 “Inventory Availability Date” shall mean the date that each of the following conditions is satisfied as
determined in good faith by Agent: 
  
 (a) Agent shall have
received a written notice from Administrative Borrower not less than fifteen (15) Business Days prior to such date requesting that the Eligible Inventory be included in the calculation of the Borrowing Base; 
  
 (b) Agent shall have received a Borrowing Base Certificate setting forth the
amount of Eligible Inventory and otherwise completed to include the Eligible Inventory as provided for in such form not more than seven (7) Business Days and not less than three (3) Business Days prior to such date; 
  
 (c) Agent shall have received, in form and substance satisfactory to Agent,
in each case not less than three (3) Business Days prior to such date, (i) inventory reports by location and category (and including the amounts of Inventory and the value thereof at any leased locations and at premises of warehouses,
processors or other third parties), (ii) such information indicating the amounts owing to owners and lessors or leased premises, warehouses, processors and other third parties from time to time in possession of any Inventory, (iii) such
purchase orders, invoice and delivery documents for Inventory acquired by Borrowers, and such other information with respect to the Inventory, as Agent may reasonably request; 
  
 (d) if the request from Administrative Borrower is received after November 30, 2005, Agent shall have conducted a field
examination of the Inventory in scope and nature, and 

  

 19 

 
with results as of a date not more than ten (10) Business Days prior to such date, satisfactory to Agent and completed the final version of its written
report of the results of such field examination not less than three (3) Business Days prior to such date; 
  
 (e) if the request from Administrative Borrower is received after August 31, 2006, not less than five (5) Business Days prior to such date,
Agent shall have received an appraisal of the Inventory in form, scope and methodology acceptable to Agent, by an appraiser acceptable to Agent and upon which Agent and Lenders are permitted to rely, reflecting appraised values as of a date not more
than thirty (30) days prior to such date (provided, that, such appraisal shall not be considered for purposes of any limitation on the number of appraisals that Agent may receive set forth herein); and 
  
 (f) Agent shall have received such Collateral Access Agreements and related
agreements as Agent may require with respect to locations of Inventory owned or operated by a third party, as duly authorized, executed and delivered by the owner and operator of such locations, including any lessor, processor, customs broker or
other third party, as the case may be. 
  
 1.73 “Inventory
Loan Limit” shall mean, at any time, the amount equal to $2,500,000 (and including Letters of Credit to the extent provided in the definition of the term Borrowing Base). 
  
 1.74 “Investment” shall have the meaning set forth in Section 9.10 hereof. 
  
 1.75 “Investment Property Control Agreement” shall mean an
agreement in writing, in form and substance satisfactory to Agent, by and among Agent, any Borrower or Guarantor (as the case may be) and any securities intermediary, commodity intermediary or other person who has custody, control or possession of
any investment property of such Borrower or Guarantor acknowledging that such securities intermediary, commodity intermediary or other person has custody, control or possession of such investment property on behalf of Agent, that it will comply with
entitlement orders originated by Agent with respect to such investment property, or other instructions of Agent, and has such other terms and conditions as Agent may require. 
  
 1.76 “Issuing Bank” shall mean Wachovia Bank, National Association as issuer of any Letters of Credit. 

 
 1.77 “Lenders” shall mean the financial institutions who are
signatories hereto as Lenders and other persons made a party to this Agreement as a Lender in accordance with Section 13.7 hereof, and their respective successors and assigns; each sometimes being referred to herein individually as a
“Lender”. 
  
 1.78 “Letter of Credit
Documents” shall mean, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk or (b) any collateral security for such obligations.

  

 20 

 1.79 “Letter of Credit Limit” shall mean $4,000,000. 
  
 1.80 “Letter of Credit Obligations” shall mean, at any time, the
sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time, plus (b) the aggregate amount of all drawings under Letters of Credit for which Issuing Bank has not at such time been reimbursed, plus
(c) without duplication, the aggregate amount of all payments made by each Lender to Issuing Bank with respect to such Lender’s participation in Letters of Credit as provided in Section 2.2 for which Borrowers have not at such time
reimbursed the Lenders, whether by way of a Revolving Loan or otherwise. 
  
 1.81 “Letters of Credit” shall mean all letters of credit (whether documentary or stand-by and whether for the purchase of inventory, equipment or otherwise) issued by an Issuing Bank for the account of a
Borrower pursuant to this Agreement, and all amendments, renewals, extensions or replacements thereof and including, but not limited to, the Existing Letters of Credit. 
  
 1.82 “License Agreements” shall have the meaning set forth in Section 8.11 hereof. 
  
 1.83 “Loans” shall mean, collectively, the Revolving Loans and the
Term Loans. 
  
 1.84 “London Interbank Offered Rate”
shall mean, with respect to any Eurodollar Rate Loan for the Interest Period applicable thereto, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided,
that, if more than one rate is specified on Telerate Page 3750, the applicable rate shall be the arithmetic mean of all such rates. If, for any reason, such rate is not available, the term “London Interbank Offered Rate” shall mean,
with respect to any Eurodollar Loan for the Interest Period applicable thereto, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates. 
  
 1.85 “Material Adverse Effect” shall mean a material adverse effect on (a) the financial condition, business, performance or operations of Borrowers; (b) the legality, validity or enforceability of
this Agreement or any of the other Financing Agreements; (c) the legality, validity, enforceability, perfection or priority of the security interests and liens of Agent upon the Collateral; (d) the Collateral or its value; (e) the
ability of any Borrower to repay the Obligations or of any Borrower to perform its obligations under this Agreement or any of the other Financing Agreements as and when to be performed; or (f) the ability of Agent or any Lender to enforce the
Obligations or realize upon the Collateral or otherwise with respect to the rights and remedies of Agent and Lenders under this Agreement or any of the other Financing Agreements. 
  
 1.86 “Material Contract” shall mean (a) any contract or other agreement (other than the Financing
Agreements), written or oral, of any Borrower or Guarantor involving monetary 

  

 21 

 
liability of or to any Person in an amount in excess of $500,000 in any fiscal year and (b) any other contract or other agreement (other than the
Financing Agreements), whether written or oral, to which any Borrower or Guarantor is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto would have a Material Adverse Effect. 
  
 1.87 “Maturity Date” shall have the meaning set forth in
Section 13.1 hereof. 
  
 1.88 “Maximum Credit”
shall mean the amount of $55,000,000. 
  
 1.89 “Merix
$2,000,000 Note” shall mean the Promissory Note due December 9, 2006, dated December 9, 2004, issued by Merix payable to the Stockholders and the Warrant Holders (as each such term is defined in the Stock Purchase Agreement, dated as
of December 9, 2004, by and among Parent, Merix San Jose, DC Holdings and the stockholders of DC Holdings, as in effect on the date hereof) in care of the Stockholder’s Agent (as such term is defined in such Stock Purchase Agreement as in
effect on the date hereof) in the original principal amount of $2,000,000, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 
  
 1.90 “Merix 6.5% Debenture” shall mean the 6.5% Convertible
Debenture due May 30, 2007, dated May 30, 2002, issued by Merix in the original principal amount of $25,000,000, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

  
 1.91 “Mortgage” shall mean, collectively, the
following (as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced): (a) the Line of Credit Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated
of even date herewith, by Parent in favor of Agent with respect to the Real Property and related assets of Parent located at 1521 Poplar Lane, Forest Grove, Oregon and (b) any mortgage, deed of trust or deed to secure debt executed and
delivered after the date hereof by any Borrower or Guarantor with respect to any other Real Property of such Borrower or Guarantor in favor of Agent, including any such agreement delivered pursuant to Section 9.7(b)(iv) hereof or
Section 9.20 hereof. 
  
 1.92 “Multiemployer Plan”
shall mean a “multi-employer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding six (6) years contributed to by any Borrower, Guarantor or any ERISA
Affiliate or with respect to which any Borrower, Guarantor or any ERISA Affiliate may incur any liability. 
  
 1.93 “Net Cash Proceeds” shall mean the aggregate cash proceeds payable to any Borrower or Guarantor in respect of any sale, lease, transfer or
other disposition of any assets or properties, or interest in assets and properties, or in respect of any loss of or damage to any assets or property of any Borrower or Guarantor from proceeds of insurance, and in the case of a sale, lease, transfer
or other disposition, net of the reasonable and customary direct costs relating to such sale, lease, transfer or other disposition (including, without limitation, legal, accounting and investment banking fees, and sales commissions) or in the case
of proceeds of insurance, net of costs and expenses relating to obtaining such proceeds, and in each case, net of taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and 

  

 22 

 
any tax sharing arrangements), and net of amounts applied to the repayment of indebtedness secured by a valid and enforceable lien on the asset or assets
that are the subject of such sale or other disposition required to be repaid in connection with such transaction or that are the subject of such loss or damage that is the basis for such payment of proceeds of insurance. Net Cash Proceeds shall
exclude any non-cash proceeds received from any sale or other disposition or other transaction or from insurance, but shall include such proceeds when and as converted by any Borrower or Guarantor to cash or other immediately available funds.

  
 1.94 “Net Recovery Percentage” shall mean the
fraction, expressed as a percentage, (a) the numerator of which is the amount equal to the amount of the recovery in respect of the Inventory at such time on a “net orderly liquidation value” basis as set forth in the most recent
acceptable appraisal of Inventory received by Agent in accordance with Section 7.3, net of operating expenses, liquidation expenses and commissions, and (b) the denominator of which is the applicable original cost of the aggregate amount
of the Inventory subject to such appraisal. 
  
 1.95
“Obligations” shall mean (a) any and all Loans, Letter of Credit Obligations and all other obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of Borrowers to Agent or any Lender and/or
any of their Affiliates or any Issuing Bank, including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, arising under this Agreement or any of the other
Financing Agreements or on account of any Letter of Credit and all other Letter of Credit Obligations, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of this Agreement or after the
commencement of any case with respect to such Borrower under the United States Bankruptcy Code or any similar statute (including the payment of interest and other amounts which would accrue and become due but for the commencement of such case,
whether or not such amounts are allowed or allowable in whole or in part in such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, or secured or unsecured
and (b) for purposes only of Section 5.1 hereof and subject to the priority in right of payment set forth in Section 6.4 hereof, all obligations, liabilities and indebtedness of every kind, nature and description owing by any or all
of Borrowers or Guarantors to Agent or any Bank Product Provider arising under or pursuant to any Bank Products, whether now existing or hereafter arising, provided, that, (i) as to any obligations, liabilities and indebtedness
arising under or pursuant to a Hedge Agreement, such obligations, liabilities and indebtedness shall only be included within the Obligations if upon Agent’s request, Agent shall have entered into an agreement, in form and substance reasonably
satisfactory to Agent, with the Bank Product Provider that is a counterparty to such Hedge Agreement, as acknowledged and agreed to by Borrowers and Guarantors, providing for the delivery to Agent by such counterparty of information with respect to
the amount of such obligations and providing for the other rights of Agent and such Bank Product Provider in connection with such arrangements and (ii) as to any obligations, liabilities and indebtedness arising under or pursuant to a Bank
Product, such obligations, liabilities and indebtedness shall only be included within the Obligations, if the Administrative Borrower and the applicable Bank Product Provider, other than Wachovia and its Affiliates, shall have delivered written
notice to Agent that (A) such Bank Product Provider has entered into a transaction to provide Bank Products to a Borrower and Guarantor and (B) the obligations arising pursuant to such Bank Products provided to Borrowers and Guarantors
constitute Obligations entitled to the benefits of the security interest of Agent granted hereunder, 

  

 23 

 
and Agent shall have approved and accepted such notice in writing and (iii) in no event shall any Bank Product Provider to whom such obligations,
liabilities or indebtedness are owing be deemed a Lender for purposes hereof to the extent of and as to such obligations, liabilities or indebtedness other than for purposes of Section 5.1 hereof and other than for purposes of Sections 12.1,
12.2, 12.3(b), 12.6, 12.7, 12.9, 12.12 and 13.6 hereof and in no event shall such obligations, liabilities or indebtedness be included in the Obligations to the extent that the effect is that the value of the Collateral (as determined by Agent) is
less than the Obligations (provided, that, any such obligations, liabilities or indebtedness for which a Reserve has not been established shall be deemed to not constitute Obligations in such event prior to any such obligations, liabilities or
indebtedness for which a Reserve has been established) and in no event shall the approval of any such person be required in connection with the release or termination of any security interest or lien of Agent. 
  
 1.96 “Other Taxes” shall have the meaning given to such term in
Section 6.5 hereof. 
  
 1.97 “Parent” shall mean
Merix Corporation, an Oregon corporation, and its successors and assigns. 
  
 1.98 “Participant” shall mean any financial institution that acquires and holds a participation in the interest of any Lender in any of the Loans and Letters of Credit in conformity with the provisions of
Section 13.7 of this Agreement governing participations. 
  
 1.99 “Pension Plan” shall mean a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which any Borrower or Guarantor sponsors, maintains, or to which any Borrower, Guarantor or ERISA Affiliate
makes, is making, or is obligated to make contributions, other than a Multiemployer Plan. 
  
 1.100 “Permitted Liens” shall have the meaning set forth in Section 9.8 hereof. 
  
 1.101 “Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including any corporation which
elects subchapter S status under the Code), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency or
instrumentality or political subdivision thereof. 
  
 1.102
“Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) which any Borrower or Guarantor sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a
Multiemployer Plan has made contributions at any time during the immediately preceding six (6) plan years or with respect to which any Borrower or Guarantor may incur liability. 
  
 1.103 “Prime Rate” shall mean the rate from time to time publicly announced by Wachovia Bank, National
Association, or its successors, as its prime rate, whether or not such announced rate is the best rate available at such bank. 
  
 1.104 “Prime Rate Loans” shall mean any Loans or portion thereof on which interest is payable based on the Prime Rate in accordance with the
terms thereof. 
  

 24 

 1.105 “Pro Rata Share” shall mean as to any Lender, the fraction (expressed as a percentage)
the numerator of which is such Lender’s Commitment and the denominator of which is the aggregate amount of all of the Commitments of Lenders, as adjusted from time to time in accordance with the provisions of Section 13.7 hereof;
provided, that, if the Commitments have been terminated, the numerator shall be the unpaid amount of such Lender’s Loans and its interest in the Letters of Credit and the denominator shall be the aggregate amount of all unpaid
Loans and Letters of Credit. 
  
 1.106 “Provision for
Taxes” shall mean an amount equal to all taxes imposed on or measured by net income, whether Federal, State, county or local, and whether foreign or domestic, that are paid or payable by any Person in respect of any period in accordance with
GAAP. 
  
 1.107 “Qualified Cash” shall mean cash or Cash
Equivalents owned by a Borrower, which funds are (a) available for use by a Borrower, without condition or restriction, (b) free and clear of any pledge, security interest, lien, claim or other encumbrance (except in favor of Agent),
(c) are subject to the first priority perfected security interest of Agent, (d) in an investment account specified in Schedule 1.107 hereto and in each case such account is subject to an Investment Property Control Agreement in form and
substance satisfactory to Agent, and the securities intermediary party to such agreement is in compliance with the terms thereof, and (e) for which Agent shall have received evidence, in form and substance satisfactory to Agent, of the amount
of such cash or Cash Equivalents held in such investment account as of the applicable date of the calculation of Excess Availability by Agent and the satisfaction of the other conditions herein. 
  
 1.108 “Quarterly Average Excess Availability” shall mean, at any
time, the daily average of the Excess Availability for the immediately preceding calendar quarter as calculated by Agent (provided, that, for purposes of such calculation, Qualified Cash shall be included in the calculation of Excess Availability
based on such reporting thereof as Agent may from time to time request for such purpose). 
  
 1.109 “Quarterly Average Revolving Obligations” shall mean, at any time, the daily average principal balance of the outstanding Revolving Loans and undrawn amount of Letters of Credit for the immediately
preceding calendar quarter as calculated by Agent. 
  
 1.110
“Real Property” shall mean all now owned and hereafter acquired real property of each Borrower and Guarantor, including leasehold interests, together with all buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located, including the real property and related assets more particularly described in the Mortgage. 
  
 1.111 “Receivables” shall mean all of the following now owned or hereafter arising or acquired property of each Borrower and Guarantor:
(a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account; (c) all payment intangibles of such Borrower or Guarantor;
(d) letters of credit, indemnities, guarantees, security or other deposits and proceeds thereof issued payable to any Borrower or Guarantor or otherwise in favor of or delivered to any Borrower or 

  

 25 

 
Guarantor in connection with any Account; or (e) all other accounts, contract rights, chattel paper, instruments, notes, general intangibles and other
forms of obligations owing to any Borrower or Guarantor, whether from the sale and lease of goods or other property, licensing of any property (including Intellectual Property or other general intangibles), rendition of services or from loans or
advances by any Borrower or Guarantor or to or for the benefit of any third person (including loans or advances to any Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated with any Accounts, Inventory or general
intangibles of any Borrower or Guarantor (including, without limitation, choses in action, causes of action, tax refunds, tax refund claims, any funds which may become payable to any Borrower or Guarantor in connection with the termination of any
Plan or other employee benefit plan and any other amounts payable to any Borrower or Guarantor from any Plan or other employee benefit plan, rights and claims against carriers and shippers, rights to indemnification, and proceeds thereof, casualty
or any similar types of insurance and any proceeds thereof and proceeds of insurance covering the lives of employees on which any Borrower or Guarantor is a beneficiary). 
  
 1.112 “Records” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s
present and future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data relating to the
Collateral or any account debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which the foregoing are stored (including any rights of any Borrower or Guarantor
with respect to the foregoing maintained with or by any other person). 
  
 1.113 “Refinancing Indebtedness” shall have the meaning set forth in Section 9.9(j) hereof. 
  
 1.114 “Register” shall have the meaning set forth in Section 13.7 hereof. 
  
 1.115 “Required Lenders” shall mean, at any time, those Lenders whose Pro Rata Shares aggregate more than fifty
(50%) percent of the aggregate of the Commitments of all Lenders, or if the Commitments shall have been terminated, Lenders to whom more than fifty (50%) percent of the then outstanding Loans and Letter of Credit Obligations are owing;
provided, that, in the event that there are only two (2) Lenders, then “Required Lenders” shall mean both of such Lenders and if there are more than two (2) Lenders, but one (1) Lender has more than fifty
(50%) percent of the aggregate of the Commitments of all Lenders (or outstanding Obligations as provided above), then “Required Lenders” shall mean such Lender and one other Lender. 
  
 1.116 “Reserves” shall mean as of any date of determination, such
amounts as Agent may from time to time establish and revise in good faith reducing the amount of Revolving Loans and Letters of Credit that would otherwise be available to a Borrower under the lending formula(s) provided for herein: (a) to
reflect events, conditions, contingencies or risks which, as determined by Agent in good faith, adversely affect, or would have a reasonable likelihood of adversely affecting, either (i) the Collateral or any other property which is security
for the Obligations, its value or the amount that might be received by Agent from the sale or other disposition or realization upon such Collateral, or (ii) the assets or business of any Borrower or 

  

 26 

 
Guarantor or (iii) the security interests and other rights of Agent or any Lender in the Collateral (including the enforceability, perfection and
priority thereof) or (b) to reflect Agent’s good faith belief that any collateral report or financial information furnished by or on behalf of any Borrower or Guarantor to Agent is or may have been incomplete, inaccurate or misleading in
any material respect or (c) to reflect outstanding Letters of Credit as provided in Section 2.2 hereof or (d) in respect of any state of facts which Agent determines in good faith constitutes a Default or an Event of Default. Without
limiting the generality of the foregoing, Reserves may, at Agent’s option, be established to reflect: (i) dilution with respect to the Accounts (based on the ratio of the aggregate amount of non-cash reductions in Accounts for any period
to the aggregate dollar amount of the sales of such Borrower for such period) as calculated by Agent for any period is or is reasonably anticipated to be greater than five (5%) percent, (ii) that the orderly liquidation value of the
Equipment or fair market value of any of the Real Property as set forth in the then most recent acceptable appraisals received by Agent with respect thereto has declined so that the then outstanding principal amount of the Term Loans is greater than
such percentage with respect to such appraised values as Agent used in establishing the original principal amount of the Term Loans multiplied by such appraised values; (iii) returns, discounts, claims, credits and allowances of any nature that
are not paid pursuant to the reduction of Accounts, (iv) the sales, excise or similar taxes included in the amount of any Accounts reported to Agent, (v) on and after the Inventory Availability Date, a change in the turnover, age or mix of
the categories of Inventory that adversely affects the aggregate value of all Inventory, (vi) on and after an Inventory Availability Date, amounts due or to become due to owners and lessors of premises where any Collateral is located, other
than for those locations where Agent has received a Collateral Access Agreement that Agent has approved and accepted in writing, (vii) amounts due or to become due to owners and licensors of trademarks and other Intellectual Property used by a
Borrower in connection with the manufacture, sale or distribution of any Inventory having a value in excess of $500,000 or in connection with the use, development or maintenance of Records relating to the Collateral, and (viii) obligations,
liabilities or indebtedness (contingent or otherwise) of Borrowers or Guarantors to any Bank Product Provider arising under or in connection with any Bank Products of any Borrower or Guarantor with a Bank Product Provider or as such Person may
otherwise require in connection therewith to the extent that such obligations, liabilities or indebtedness constitute Obligations as such term is defined herein or otherwise receive the benefit of the security interest of Agent in any Collateral. To
the extent Agent may revise the lending formulas used to determine the Borrowing Base or establish new criteria or revise existing criteria for Eligible Accounts or Eligible Inventory so as to address any circumstances, condition, event or
contingency in a manner satisfactory to Agent, Agent shall not establish a Reserve for the same purpose. The amount of any Reserve established by Agent shall have a reasonable relationship to the event, condition or other matter which is the basis
for such reserve as determined by Agent in good faith and to the extent that such Reserve is in respect of amounts that may be payable to third parties, Agent may, at its option, deduct such Reserve from the Revolving Loan Limit, at any time that
such limit is less than the amount of the Borrowing Base. 
  
 1.117 “Revolving Loan Limit” shall mean, at any time, the amount equal to the $38,500,000. 
  

 27 

 1.118 “Revolving Loans” shall mean the loans now or hereafter made by or on behalf of any
Lender or by Agent for the account of any Lender on a revolving basis pursuant to the Credit Facility (involving advances, repayments and readvances) as set forth in Section 2.1 hereof. 
  
 1.119 “Secured Parties” shall mean, collectively, (a) Agent,
(b) Lenders, (c) the Issuing Bank and (d) any Bank Product Provider; provided, that, (i) as to any Bank Product Provider, only to the extent of the Obligations owing to such Bank Product Provider and (ii) such
parties are sometimes referred to herein individually as a “Secured Party”. 
  
 1.120 “Solvent” shall mean, at any time with respect to any Person, that at such time such Person (a) is able to pay its debts as they mature and has (and has a reasonable basis to believe it will
continue to have) sufficient capital (and not unreasonably small capital) to carry on its business consistent with its practices as of the date hereof, and (b) the assets and properties of such Person at a fair valuation (and including as
assets for this purpose at a fair valuation all rights of subrogation, contribution or indemnification arising pursuant to any guarantees given by such Person) are greater than the Indebtedness of such Person, and including subordinated and
contingent liabilities computed at the amount which, such person has a reasonable basis to believe, represents an amount which can reasonably be expected to become an actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to reflect the probability of it becoming a matured liability). 
  
 1.121 “Special Agent Advances” shall have the meaning set forth in Section 12.11 hereof. 
  
 1.122 “Subsidiary” or “subsidiary” shall mean, with
respect to any Person, any corporation, limited liability company, limited liability partnership or other limited or general partnership, trust, association or other business entity of which an aggregate of at least a majority of the outstanding
Capital Stock or other interests entitled to vote in the election of the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency), managers, trustees or other controlling persons, or an equivalent controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such Person and/or one or more
subsidiaries of such Person. 
  
 1.123 “Term Loans”
shall mean, collectively, the term loans made by or on behalf of Lenders to Borrowers as provided for in Section 2.3 hereof; sometimes being referred to herein individually as a “Term Loan”. 
  
 1.124 “UCC” shall mean the Uniform Commercial Code as in effect in
the State of New York, and any successor statute, as in effect from time to time (except that terms used herein which are defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof shall continue to have the same
meaning notwithstanding any replacement or amendment of such statute except as Agent may otherwise determine). 
  
 1.125 “Value” shall mean, as determined by Agent in good faith, with respect to Inventory, the lower of (a) cost computed on a first-in
first-out basis in accordance with GAAP or (b) market value, provided, that, for purposes of the calculation of the Borrowing Base, (i) the 

  

 28 

 
Value of the Inventory shall not include: (A) the portion of the value of Inventory equal to the profit earned by any Affiliate on the sale thereof to
any Borrower or (B) write-ups or write-downs in value with respect to currency exchange rates and (ii) notwithstanding anything to the contrary contained herein, the cost of the Inventory shall be computed in the same manner and consistent
with the most recent appraisal of the Inventory received and accepted by Agent prior to the date hereof, if any. 
  
 1.126 “Voting Stock” shall mean with respect to any Person, (a) one (1) or more classes of Capital Stock of such Person having general
voting powers to elect at least a majority of the board of directors, managers or trustees of such Person, irrespective of whether at the time Capital Stock of any other class or classes have or might have voting power by reason of the happening of
any contingency, and (b) any Capital Stock of such Person convertible or exchangeable without restriction at the option of the holder thereof into Capital Stock of such Person described in clause (a) of this definition. 
  
 1.127 “Wachovia” shall mean Wachovia Capital Finance Corporation
(Western), a California corporation, in its individual capacity, and its successors and assigns. 
  
 SECTION 2. CREDIT FACILITIES 
  
 2.1 Loans. 
  
 (a) Subject to and upon the terms and conditions contained herein, each Lender severally (and not jointly) agrees to make its Pro Rata Share of Revolving
Loans to each Borrower from time to time in amounts requested by such Borrower (or Administrative Borrower on behalf of such Borrower) up to the aggregate amount outstanding for all Lenders at any time equal to the lesser of: (i) the Borrowing
Base at such time or (ii) the Revolving Loan Limit at such time. 
  
 (b) Except in Agent’s discretion, with the consent of all Lenders, or as otherwise provided herein, (i) the aggregate amount of the Loans and the Letter of Credit Obligations outstanding at any time shall not exceed the Maximum
Credit and (ii) the aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding at any time shall not exceed the lesser of the Borrowing Base or the Revolving Loan Limit. 
  
 (c) In the event that (i) the aggregate amount of the Loans and the
Letter of Credit Obligations outstanding at any time exceed the Maximum Credit, or (ii) except as otherwise provided herein, the aggregate principal amount of the Revolving Loans and Letter of Credit Obligations outstanding at any time exceed
the lesser of the Borrowing Base or the Revolving Loan Limit, such event shall not limit, waive or otherwise affect any rights of Agent or Lenders in such circumstances or on any future occasions and Borrowers shall, upon demand by Agent, which may
be made at any time or from time to time, immediately repay to Agent the entire amount of any such excess(es) for which payment is demanded. 
  
 2.2 Letters of Credit. 
  
 (a) Subject to and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower (or Administrative
Borrower on behalf of such 
  

 29 

 
Borrower), Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for the account of such Borrower one or more Letters of Credit, for
the ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions acceptable to such Borrower, Agent and Issuing Bank. 
  
 (b) The Borrower requesting such Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall give Agent and Issuing Bank three
(3) Business Days’ prior written notice of such Borrower’s request for the issuance of a Letter of Credit. Such notice shall be irrevocable and shall specify the original face amount of the Letter of Credit requested, the effective
date (which date shall be a Business Day and in no event shall be a date less than ten (10) days prior to the end of the then current term of this Agreement) of issuance of such requested Letter of Credit, whether such Letter of Credit may be
drawn in a single or in partial draws, the date on which such requested Letter of Credit is to expire (which date shall be a Business Day and shall not be more than one year from the date of issuance), the purpose for which such Letter of Credit is
to be issued, and the beneficiary of the requested Letter of Credit. The Borrower requesting the Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall attach to such notice the proposed terms of the Letter of Credit. The
renewal or extension of any Letter of Credit shall, for purposes hereof be treated in all respects the same as the issuance of a new Letter of Credit hereunder. 
  

(c) In addition to being subject to the satisfaction of the applicable conditions precedent contained in Section 4 hereof and the other terms and
conditions contained herein, no Letter of Credit shall be available unless each of the following conditions precedent have been satisfied in a manner satisfactory to Agent: (i) the Borrower requesting such Letter of Credit (or Administrative
Borrower on behalf of such Borrower) shall have delivered to Issuing Bank at such times and in such manner as Issuing Bank may require, an application, in form and substance satisfactory to Issuing Bank and Agent, for the issuance of the Letter of
Credit and such other Letter of Credit Documents as may be required pursuant to the terms thereof, and the form and terms of the proposed Letter of Credit shall be satisfactory to Agent and Issuing Bank, (ii) as of the date of issuance, no
order of any court, arbitrator or other Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, and no law,
rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that
Issuing Bank refrain from, the issuance of letters of credit generally or the issuance of such Letter of Credit, (iii) after giving effect to the issuance of such Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter of
Credit Limit, and (iv) the Excess Availability, prior to giving effect to any Reserves with respect to such Letter of Credit, on the date of the proposed issuance of any Letter of Credit shall be equal to or greater than: (A) if the
proposed Letter of Credit is for the purpose of purchasing Eligible Inventory and the documents of title with respect thereto are consigned to Issuing Bank or Agent, the sum of (1) the percentage equal to one hundred (100%) percent minus
the then applicable percentage with respect to Eligible Inventory set forth in the definition of the term Borrowing Base multiplied by the Value of such Eligible Inventory, plus (2) freight, taxes, duty and other amounts which Agent estimates
must be paid in connection with such Inventory upon arrival and for delivery to one of such Borrower’s locations for Eligible Inventory within the United States of America and (B) if the proposed Letter of Credit is for any other purpose
or the documents of 
  

 30 

 title are not consigned to Issuing Bank or Agent in connection with a Letter of Credit for the purpose of purchasing
Inventory, an amount equal to one hundred (100%) percent of the Letter of Credit Obligations with respect thereto. Effective on the issuance of each Letter of Credit, a Reserve shall be established in the applicable amount set forth in
Section 2.2(c)(iv)(A) or Section 2.2(c)(iv)(B). 
  
 (d)
Except in Agent’s discretion, with the consent of all Lenders, the amount of all outstanding Letter of Credit Obligations shall not at any time exceed the Letter of Credit Limit. 
  
 (e) Each Borrower shall reimburse immediately Issuing Bank for any draw under any Letter of Credit issued for the account of
such Borrower and pay Issuing Bank the amount of all other charges and fees payable to Issuing Bank in connection with any Letter of Credit issued for the account of such Borrower immediately when due, irrespective of any claim, setoff, defense or
other right which such Borrower may have at any time against Issuing Bank or any other Person. Each drawing under any Letter of Credit or other amount payable in connection therewith when due shall constitute a request by the Borrower for whose
account such Letter of Credit was issued to Agent for a Prime Rate Loan in the amount of such drawing or other amount then due, and shall be made by Agent on behalf of Lenders as a Revolving Loan (or Special Agent Advance, as the case may be). The
date of such Loan shall be the date of the drawing or as to other amounts, the due date therefor. Any payments made by or on behalf of Agent or any Lender to Issuing Bank and/or related parties in connection with any Letter of Credit shall
constitute additional Revolving Loans to such Borrower pursuant to this Section 2 (or Special Agent Advances as the case may be). 
  
 (f) Borrowers and Guarantors shall indemnify and hold Agent and Lenders harmless from and against any and all losses, claims, damages, liabilities, costs
and expenses which Agent or any Lender may suffer or incur in connection with any Letter of Credit and any documents, drafts or acceptances relating thereto, including any losses, claims, damages, liabilities, costs and expenses due to any action
taken by Issuing Bank or correspondent with respect to any Letter of Credit, except for such losses, claims, damages, liabilities, costs or expenses that are a direct result of the gross negligence or wilful misconduct of Agent or any Lender as
determined pursuant to a final non-appealable order of a court of competent jurisdiction. Each Borrower and Guarantor assumes all risks with respect to the acts or omissions of the drawer under or beneficiary of any Letter of Credit and for such
purposes the drawer or beneficiary shall be deemed such Borrower’s agent. Each Borrower and Guarantor assumes all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any
Letter of Credit or any documents, drafts or acceptances thereunder. Each Borrower and Guarantor hereby releases and holds Agent and Lenders harmless from and against any acts, waivers, errors, delays or omissions with respect to or relating to any
Letter of Credit, except for the gross negligence or wilful misconduct of Agent or any Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction. The provisions of this Section 2.2(f) shall survive the
payment of Obligations and the termination of this Agreement. 
  
 (g) In connection with Inventory purchased pursuant to any Letter of Credit, Borrowers and Guarantors shall, at Agent’s request, instruct all suppliers, carriers, forwarders, customs brokers, warehouses or others receiving or holding
cash, checks, Inventory, documents 

  

 31 

 
or instruments in which Agent holds a security interest that upon Agent’s request, such items are to be delivered to Agent and/or subject to
Agent’s order, and if they shall come into such Borrower’s or Guarantor’s possession, to deliver them, upon Agent’s request, to Agent in their original form. Except as otherwise provided herein, Agent shall not exercise such
right to request such items so long as no Default or Event of Default shall exist or have occurred and be continuing. Except as Agent may otherwise specify, Borrowers and Guarantors shall designate Issuing Bank as the consignee on all bills of
lading and other negotiable and non-negotiable documents. 
  
 (h)
Each Borrower and Guarantor hereby irrevocably authorizes and directs Issuing Bank to name such Borrower or Guarantor as the account party therein and to deliver to Agent all instruments, documents and other writings and property received by Issuing
Bank pursuant to the Letter of Credit and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the Letter of Credit Documents with respect thereto. Nothing
contained herein shall be deemed or construed to grant any Borrower or Guarantor any right or authority to pledge the credit of Agent or any Lender in any manner. Borrowers and Guarantors shall be bound by any reasonable interpretation made in good
faith by Agent, or Issuing Bank under or in connection with any Letters of Credit or any documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of any Borrower or Guarantor.

  
 (i) Immediately upon the issuance or amendment of any Letter
of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the extent of such Lender’s Pro Rata Share of the liability with
respect to such Letter of Credit and the obligations of Borrowers with respect thereto (including all Letter of Credit Obligations with respect thereto). Each Lender shall absolutely, unconditionally and irrevocably assume, as primary obligor and
not as surety, and be obligated to pay to Issuing Bank therefor and discharge when due, its Pro Rata Share of all of such obligations arising under such Letter of Credit. Without limiting the scope and nature of each Lender’s participation in
any Letter of Credit, to the extent that Issuing Bank has not been reimbursed or otherwise paid as required hereunder or under any such Letter of Credit, each such Lender shall pay to Issuing Bank its Pro Rata Share of such unreimbursed drawing or
other amounts then due to Issuing Bank in connection therewith. 
  
 (j) The obligations of Borrowers to pay each Letter of Credit Obligations and the obligations of Lenders to make payments to Agent for the account of Issuing Bank with respect to Letters of Credit shall be absolute, unconditional and
irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances, whatsoever, notwithstanding the occurrence or continuance of any Default, Event of Default, the failure to satisfy any other
condition set forth in Section 4 or any other event or circumstance. If such amount is not made available by a Lender when due, Agent shall be entitled to recover such amount on demand from such Lender with interest thereon, for each day from
the date such amount was due until the date such amount is paid to Agent at the interest rate then payable by any Borrower in respect of Loans that are Prime Rate Loans. Any such reimbursement shall not relieve or otherwise impair the obligation of
Borrowers to reimburse Issuing Bank under any Letter of Credit or make any other payment in connection therewith. 
  

 32 

 2.3 Term Loans. 
  
 (a) Subject to and upon the terms and conditions contained herein, each Lender severally (and not jointly) agrees to make
Term Loans in an amount equal to its Pro Rata Share of the Term Loans on the date hereof. The aggregate original principal amount of the Term Loans to Borrowers shall be in the amount of $16,500,000. 
  
 (b) Each of the Term Loans is (i) to be repaid, together with interest
and other amounts, in accordance with this Agreement, the Term Promissory Note evidencing such Term Loan, and the other Financing Agreements and (ii) secured by all of the Collateral. The principal amount of each of the Term Loans shall be
repaid in twenty (20) consecutive installments (or earlier as provided herein) payable on the first day of each December, March, June and September of each year, commencing with December 1, 2005, of which the first nineteen
(19) installments shall each be in the aggregate amount of $687,500 and the last installment shall be in the amount of the entire unpaid balance of such Term Loan; provided, that, the entire unpaid principal amount of Term Loans
and all accrued and unpaid interest thereon shall be due and payable on the earlier of the Maturity Date or any other effective date of termination of this Agreement or an Event of Default as provided herein. 
  
 2.4 Commitments. The aggregate amount of each Lender’s Pro Rata
Share of the Loans and Letter of Credit Obligations shall not exceed the amount of such Lender’s Commitment, as the same may from time to time be amended in accordance with the provisions hereof. 
  
 SECTION 3. INTEREST AND FEES 
  
 3.1 Interest. 
  
 (a) Borrowers shall pay to Agent, for the benefit of Lenders, interest on
the outstanding principal amount of the Loans at the Interest Rate. All interest accruing hereunder on and after the date of any Event of Default or termination hereof shall be payable on demand. 
  
 (b) Each Borrower (or Administrative Borrower on behalf of such Borrower) may
from time to time request Eurodollar Rate Loans or may request that Prime Rate Loans be converted to Eurodollar Rate Loans or that any existing Eurodollar Rate Loans continue for an additional Interest Period. Such request from a Borrower (or
Administrative Borrower on behalf of such Borrower) shall specify the amount of the Eurodollar Rate Loans or the amount of the Prime Rate Loans to be converted to Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans to be continued
(subject to the limits set forth below) and the Interest Period to be applicable to such Eurodollar Rate Loans. Subject to the terms and conditions contained herein, three (3) Business Days after receipt by Agent of such a request from a
Borrower (or Administrative Borrower on behalf of such Borrower), such Eurodollar Rate Loans shall be made or Prime Rate Loans shall be converted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue, as the case may be,
provided, that, (i) no Default or Event of Default shall exist or have occurred and be continuing, (ii) no party hereto shall have sent any notice of termination of this Agreement, (iii) such Borrower (or Administrative
Borrower on behalf of such Borrower) shall have complied with such customary procedures as are established by Agent and specified by Agent to Administrative Borrower from time to time for requests by Borrowers 

  

 33 

 
for Eurodollar Rate Loans, (iv) no more than eight (8) Interest Periods may be in effect at any one time, (v) the aggregate amount of the
Eurodollar Rate Loans must be in an amount not less than $2,000,000 or an integral multiple of $500,000 in excess thereof, and (vi) Agent and each Lender shall have determined that the Interest Period or Adjusted Eurodollar Rate is available to
Agent and such Lender and can be readily determined as of the date of the request for such Eurodollar Rate Loan by such Borrower. Any request by or on behalf of a Borrower for Eurodollar Rate Loans or to convert Prime Rate Loans to Eurodollar Rate
Loans or to continue any existing Eurodollar Rate Loans shall be irrevocable. Notwithstanding anything to the contrary contained herein, Agent and Lenders shall not be required to purchase United States Dollar deposits in the London interbank market
or other applicable Eurodollar Rate market to fund any Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as if Agent and Lenders had purchased such deposits to fund the Eurodollar Rate Loans. 
  
 (c) Any Eurodollar Rate Loans shall automatically convert to Prime Rate Loans
upon the last day of the applicable Interest Period, unless Agent has received and approved a request to continue such Eurodollar Rate Loan at least three (3) Business Days prior to such last day in accordance with the terms hereof. Any
Eurodollar Rate Loans shall, at Agent’s option, upon notice by Agent to Parent, be subsequently converted to Prime Rate Loans in the event that this Agreement shall terminate or not be renewed. Borrowers shall pay to Agent, for the benefit of
Lenders, upon demand by Agent (or Agent may, at its option, charge any loan account of any Borrower) any amounts required to compensate any Lender or Participant for any loss (including loss of anticipated profits), cost or expense incurred by such
person, as a result of the conversion of Eurodollar Rate Loans to Prime Rate Loans pursuant to any of the foregoing. 
  
 (d) Interest on Prime Rate Loans shall be payable by Borrowers to Agent, for the account of Lenders, monthly in arrears not later than the first day of
each calendar month and shall be calculated on the basis of a three hundred sixty-five (365) or three hundred sixty-six (366) day year, as applicable, and actual days elapsed. 
  
 (e) Interest on Eurodollar Rate Loans shall be payable by Borrowers to Agent, for the account of Lenders, in arrears on the
last day of the Interest Period applicable to such Eurodollar Rate Loans and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Loan shall be converted or paid in full and shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed. 
  
 (f) The interest rate on non-contingent Obligations (other than Eurodollar
Rate Loans) shall increase or decrease by an amount equal to each increase or decrease in the Prime Rate effective on the date of any change in such Prime Rate. In no event shall charges constituting interest payable by Borrowers to Agent and
Lenders exceed the maximum amount or the rate permitted under any applicable law or regulation, and if any such part or provision of this Agreement is in contravention of any such law or regulation, such part or provision shall be deemed amended to
conform thereto. 
  

 34 

 3.2 Fees. 
  
 (a) Borrowers shall pay to Agent, for the account of Lenders, quarterly an unused line fee at a rate equal to the percentage
(on a per annum basis) set forth below calculated upon the amount by which the Revolving Loan Limit exceeds the Quarterly Average Revolving Obligations during the immediately preceding quarter (or part thereof) while this Agreement is in effect and
for so long thereafter as any of the Obligations are outstanding. Such fee shall be payable on the first day of each calendar quarter in arrears. The percentage used for determining the unused line fee shall be as set forth below if the Quarterly
Average Revolving Obligations for the immediately preceding calendar quarter is at or within the amounts indicated for such percentage: 
  

						
	Tier

	  	 Quarterly Average
 Revolving Obligations

	  	 Unused Line
 Fee Percentage

	 
	1	  	Greater than or equal to $20,000,000	  	.250	%
	2	  	Less than $20,000,000 and greater than or equal to $10,000,000	  	.375	%
	3	  	Less than $10,000,000	  	.500	%

  
 provided, that,
(i) the unused line fee percentage shall be calculated and established based on the foregoing once each calendar quarter, (ii) each adjustment of the unused line fee percentage shall be effective as of the first day of a calendar quarter
based on the Quarterly Average Revolving Obligations for the immediately preceding calendar quarter and (iii) the unused line fee until the last day of the second (2nd) full calendar quarter after the date hereof shall be the amount set
forth in Tier 2 above. 
  
 (b) Borrowers shall pay to Agent, for
the account of Lenders, a fee at a rate equal to the Applicable L/C Rate per annum on the average daily maximum amount available to be drawn under Letters of Credit for the immediately preceding quarter (or part thereof), payable in arrears as of
the first day of each succeeding calendar quarter, except that Borrowers shall pay, at Agent’s option or at the request of the Required Lenders, after notice by Agent to Administrative Borrower, such fee at a rate two (2%) percent greater
than the otherwise applicable rate on such average daily maximum amount for: (i) the period from and after the date of termination or non-renewal hereof until Lenders have received full and final payment of all Obligations (notwithstanding
entry of a judgment against any Borrower or Guarantor) and (ii) the period from and after the date of the occurrence of an Event of Default for so long as such Event of Default is continuing. Agent may send such notice of its option or shall
send such notice at the request of Required Lenders. Such letter of credit fees shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed and the obligation of Borrowers to pay such fee shall survive the
termination or non-renewal of this Agreement. In addition to the letter of credit fees provided above, Borrowers shall pay to the Issuing Bank for its own account (without sharing with Lenders) the letter of credit fronting and negotiation fees
agreed to by Borrowers and Issuing Bank from time to time and the customary charges from time to time of Issuing Bank with respect to the issuance, amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters
of Credit. 
  

 35 

 (c) Borrowers shall pay to Agent the other fees and amounts set forth in the Fee Letter in the amounts
and at the times specified therein. To the extent payment in full of the applicable fee is received by Agent from Borrowers on or about the date hereof, Agent shall pay to each Lender its share of such fees in accordance with the terms of the
arrangements of Agent with such Lender. 
  
 3.3 Changes in Laws
and Increased Costs of Loans. 
  
 (a) If after the date
hereof, either (i) any change in, or in the interpretation of, any law or regulation is introduced, including, without limitation, with respect to reserve requirements, applicable to any Lender or any banking or financial institution from whom
any Lender borrows funds or obtains credit (a “Funding Bank”), or (ii) a Funding Bank or any Lender complies with any future guideline or request from any central bank or other Governmental Authority or (iii) a Funding Bank, any
Lender or Issuing Bank determines that the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration thereof has or would have the effect described below, or a Funding Bank, any Lender or Issuing Bank complies with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or comparable agency, and in the case of any event set forth in this clause (iii), such adoption, change or compliance has or would have the direct or indirect effect of
reducing the rate of return on any Lender’s or Issuing Bank’s capital as a consequence of its obligations hereunder to a level below that which such Lender or Issuing Bank could have achieved but for such adoption, change or compliance
(taking into consideration the Funding Bank’s or Lender’s or Issuing Bank’s policies with respect to capital adequacy) by an amount deemed by such Lender or Issuing Bank to be material, and the result of any of the foregoing events
described in clauses (i), (ii) or (iii) is or results in an increase in the cost to any Lender or Issuing Bank of funding or maintaining the Loans, the Letters of Credit or its Commitment, then Borrowers and Guarantors shall from time to
time upon demand by Agent pay to Agent additional amounts sufficient to indemnify such Lender or Issuing Bank, as the case may be, against such increased cost on an after-tax basis (after taking into account applicable deductions and credits in
respect of the amount indemnified). A certificate as to the amount of such increased cost and that in general similarly situated borrowers from Agent or the applicable Lender are being similarly treated shall be submitted to Administrative Borrower
by Agent or the applicable Lender and shall be conclusive, absent manifest error. 
  
 (b) If prior to the first day of any Interest Period, (i) Agent shall have determined in good faith (which determination shall be conclusive and binding upon Borrowers and Guarantors) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Adjusted Eurodollar Rate for such Interest Period, (ii) Agent has received notice from the Required Lenders that the Adjusted
Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to Lenders of making or maintaining Eurodollar Rate Loans during such Interest Period, or (iii) Dollar deposits in the
principal amounts of the Eurodollar Rate Loans to which 

  

 36 

 
such Interest Period is to be applicable are not generally available in the London interbank market, Agent shall give telecopy or telephonic notice thereof
to Administrative Borrower as soon as practicable thereafter, and will also give prompt written notice to Administrative Borrower when such conditions no longer exist. If such notice is given (A) any Eurodollar Rate Loans requested to be made
on the first day of such Interest Period shall be made as Prime Rate Loans, (B) any Loans that were to have been converted on the first day of such Interest Period to or continued as Eurodollar Rate Loans shall be converted to or continued as
Prime Rate Loans and (C) each outstanding Eurodollar Rate Loan shall be converted, on the last day of the then-current Interest Period thereof, to Prime Rate Loans. Until such notice has been withdrawn by Agent, no further Eurodollar Rate Loans
shall be made or continued as such, nor shall any Borrower (or Administrative Borrower on behalf of any Borrower) have the right to convert Prime Rate Loans to Eurodollar Rate Loans. 
  
 (c) Notwithstanding any other provision herein, if the adoption of or any change in any law, treaty, rule or regulation or
final, non-appealable determination of an arbitrator or a court or other Governmental Authority or in the interpretation or application thereof occurring after the date hereof shall make it unlawful for Agent or any Lender to make or maintain
Eurodollar Rate Loans as contemplated by this Agreement, (i) Agent or such Lender shall promptly give written notice of such circumstances to Administrative Borrower (which notice shall be withdrawn whenever such circumstances no longer exist),
(ii) the commitment of such Lender hereunder to make Eurodollar Rate Loans, continue Eurodollar Rate Loans as such and convert Prime Rate Loans to Eurodollar Rate Loans shall forthwith be canceled and, until such time as it shall no longer be
unlawful for such Lender to make or maintain Eurodollar Rate Loans, such Lender shall then have a commitment only to make a Prime Rate Loan when a Eurodollar Rate Loan is requested and (iii) such Lender’s Loans then outstanding as
Eurodollar Rate Loans, if any, shall be converted automatically to Prime Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Rate Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, Borrowers and Guarantors shall pay to such Lender such amounts, if any, as may be required pursuant to Section 3.3(d)
below. 
  
 (d) Borrowers and Guarantors shall indemnify Agent and
each Lender and to hold Agent and each Lender harmless from any loss or expense which Agent or such Lender may sustain or incur as a consequence of (i) default by any Borrower in making a borrowing of, conversion into or extension of Eurodollar
Rate Loans after such Borrower (or Administrative Borrower on behalf of such Borrower) has given a notice requesting the same in accordance with the provisions of this Agreement, (ii) default by any Borrower in making any prepayment of a
Eurodollar Rate Loan after such Borrower has given a notice thereof in accordance with the provisions of this Agreement, and (iii) the making of a prepayment of Eurodollar Rate Loans on a day which is not the last day of an Interest Period with
respect thereto. With respect to Eurodollar Rate Loans, such indemnification may include an amount equal to the excess, if any, of (A) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or
extended, for the period from the date of such prepayment or of such failure to borrow, convert or extend to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convert or extend, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate of interest for such Eurodollar Rate 

  

 37 

 
Loans provided for herein over (B) the amount of interest (as determined by such Agent or such Lender) which would have accrued to Agent or such Lender
on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market. This covenant shall survive the termination or non-renewal of this Agreement and the payment of the Obligations.

  
 SECTION 4. CONDITIONS PRECEDENT 
  
 4.1 Conditions Precedent to Initial Loans and Letters of Credit. The
obligation of Lenders to make the initial Loans or of Issuing Bank to issue the initial Letters of Credit hereunder is subject to the satisfaction of, or waiver of, immediately prior to or concurrently with the making of such Loan or the issuance of
such Letter of Credit of each of the following conditions precedent: 
  
 (a) all requisite corporate action and proceedings in connection with this Agreement and the other Financing Agreements shall be satisfactory in form and substance to Agent, and Agent shall have received all information and copies of all
documents, including records of requisite corporate action and proceedings which Agent may have requested in connection therewith, such documents where requested by Agent or its counsel to be certified by appropriate corporate officers or
Governmental Authority (and including a copy of the certificate of incorporation of each Borrower and Guarantor certified by the Secretary of State (or equivalent Governmental Authority) which shall set forth the same complete corporate name of such
Borrower or Guarantor as is set forth herein and such document as shall set forth the organizational identification number of each Borrower or Guarantor, if one is issued in its jurisdiction of incorporation); 
  
 (b) no material adverse change shall have occurred in the assets, business or
prospects of Borrowers since the date of Agent’s latest field examination (not including for this purpose the field review referred to in clause (c) below) and no change or event shall have occurred which would impair the ability of any
Borrower or Guarantor to perform its obligations hereunder or under any of the other Financing Agreements to which it is a party or of Agent or any Lender to enforce the Obligations or realize upon the Collateral; 
  
 (c) Agent shall have completed a field review of the Records and such other
information with respect to the Collateral as Agent may require to determine the amount of Loans available to Borrowers (including, without limitation, current perpetual inventory records and/or roll-forwards of Accounts and Inventory through the
date of closing and test counts of the Inventory in a manner satisfactory to Agent, together with such supporting documentation as may be necessary or appropriate, and other documents and information that will enable Agent to accurately identify and
verify the Collateral), the results of which in each case shall be satisfactory to Agent, not more than three (3) Business Days prior to the date hereof or such earlier date as Agent may agree; 
  
 (d) Agent shall have received, in form and substance satisfactory to Agent,
all consents, waivers, acknowledgments and other agreements from third persons which Agent may deem necessary or desirable in order to permit, protect and perfect its security interests in and liens upon the Collateral or to effectuate the
provisions or purposes of this Agreement and the other Financing Agreements (provided, that, the foregoing shall not include Collateral Access Agreements for locations of Inventory at premises owned and operated by third parties); 
  

 38 

 (e) the Excess Availability as determined by Agent, as of the date hereof, shall be not less than
$25,000,000 after giving effect to the initial Loans made or to be made and Letters of Credit issued or to be issued in connection with the initial transactions hereunder; 
  
 (f) the EBITDA of Parent and Domestic Subsidiaries (on a consolidated basis) for the twelve (12) consecutive fiscal
month period ending August 27, 2005 shall be not less than $15,000,000, as determined by Agent; 
  
 (g) Agent shall have received a Borrowing Base Certificate setting forth the Borrowing Base as at the date set forth therein and completed in a manner
reasonably satisfactory to Agent and duly authorized, executed and delivered by Borrowers; 
  
 (h) Agent shall have received, in form and substance satisfactory to Agent, Deposit Account Control Agreements and Investment Property Control Agreements by and among Agent, each Borrower and Guarantor, as the case
may be and each bank, securities intermediary or other Person where such Borrower (or Guarantor) has a deposit account, investment account or other account, in each case, duly authorized, executed and delivered by such bank, securities intermediary
or other Person and Borrower or Guarantor, as the case may be; 
  
 (i) Agent shall have received evidence, in form and substance satisfactory to Agent, that Agent has a valid perfected first priority security interest in all of the Collateral; 
  
 (j) Agent shall have received and reviewed lien and judgment search results for the jurisdiction of organization of each
Borrower and Guarantor, the jurisdiction of the chief executive office of each Borrower and Guarantor and all jurisdictions in which assets of Borrowers and Guarantors are located, which search results shall be in form and substance satisfactory to
Agent; 
  
 (k) Agent shall have received environmental audits of
the Real Property to be subject to the Mortgage conducted by an independent environmental engineering firm acceptable to Agent, and in form, scope and methodology satisfactory to Agent, the results of which shall be satisfactory to Agent;

  
 (l) Agent shall have received, in form and substance
satisfactory to Agent, a valid and effective title insurance policy issued by a company acceptable to Agent: (i) insuring the priority, amount and sufficiency of the Mortgage, (ii) insuring against matters that would be disclosed by
surveys and (iii) containing any legally available endorsements, assurances or affirmative coverage requested by Agent for protection of its interests; 
  
 (m) Agent shall have received originals of the stock certificates representing all of the issued and outstanding shares of the Capital Stock of the direct
Subsidiaries of each Borrower and Guarantor (in each case together with stock powers duly executed in blank with respect thereto); 
  

 39 

 (n) Agent shall have received evidence of insurance and loss payee endorsements required hereunder and
under the other Financing Agreements, in form and substance satisfactory to Agent, and certificates of insurance policies and/or endorsements naming Agent as loss payee; 
  
 (o) Agent shall have received evidence that the EPC Acquisition Documents have been duly authorized, executed and delivered
by and to the appropriate parties thereto and that the EPC Acquisition and the transactions contemplated under the terms and conditions of the EPC Acquisition Documents have been consummated prior to or contemporaneously with the execution of this
Agreement; 
  
 (p) Agent shall have received true and complete
copies of the EPC Acquisition Documents and all notices, consents, instruments, documents and agreements relating thereto, including all exhibits and schedules thereto, all as duly executed and delivered by the parties thereto; 
  
 (q) Agent shall have received, in form and substance satisfactory to Agent,
such opinion letters of counsel to Parent and its Subsidiaries with respect to the Financing Agreements and such other matters as Agent may request; and 
  
 (r) the other Financing Agreements and all instruments and documents hereunder and thereunder shall have been duly executed and delivered to Agent, in
form and substance satisfactory to Agent. 
  
 4.2 Conditions
Precedent to All Loans and Letters of Credit. The obligation of Lenders to make the Loans, including the initial Loans, or of Issuing Bank to issue any Letter of Credit, including the initial Letters of Credit, is subject to the further
satisfaction of, or waiver of, immediately prior to or concurrently with the making of each such Loan or the issuance of such Letter of Credit of each of the following conditions precedent: 
  
 (a) all representations and warranties contained herein and in the other
Financing Agreements shall be true and correct with the same effect as though such representations and warranties had been made on and as of the date of the making of each such Loan or providing each such Letter of Credit and after giving effect
thereto, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date); 
  
 (b) no law, regulation, order, judgment or decree of any Governmental
Authority shall exist, and no action, suit, investigation, litigation or proceeding shall be pending or threatened in any court or before any arbitrator or Governmental Authority, which (i) purports to enjoin, prohibit, restrain or otherwise
affect (A) the making of the Loans or providing the Letters of Credit, or (B) the consummation of the transactions contemplated pursuant to the terms hereof or the other Financing Agreements or (ii) has or has a reasonable likelihood
of having a Material Adverse Effect except for (A) the pending shareholder derivative complaints filed, purportedly on behalf of Parent, in the Circuit Court for the State of Oregon, County of Multnomah, against the executive officers and
directors of Parent and (B) the securities class action complaints filed in the United States District Court for the District of Oregon against Parent and certain of its executive officers and directors, in each case as described in
Section 8.6 of the Information Certificate; and 
  

 40 

 (c) no Default or Event of Default shall exist or have occurred and be continuing on and as of the date
of the making of such Loan or providing each such Letter of Credit and after giving effect thereto. 
  
 SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST 
  
 5.1 Grant of Security Interest. 
  
 (a) To secure payment and performance of all Obligations, each Borrower and Guarantor hereby grants to Agent, for itself and
the benefit of the Secured Parties, a continuing security interest in, a lien upon, and a right of set off against, and hereby assigns to Agent, for itself and the benefit of the Secured Parties, as security, all personal and real property and
fixtures, and interests in property and fixtures, of each Borrower and Guarantor, whether now owned or hereafter acquired or existing, and wherever located (together with all other collateral security for the Obligations at any time granted to or
held or acquired by Agent or any Secured Party, collectively, the “Collateral”), including: 
  
 (i) all Accounts; 
  
 (ii) all general intangibles, including, without limitation, all Intellectual Property; 
  
 (iii) all goods, including, without limitation, Inventory and Equipment; 
  
 (iv) all Real Property at any time subject to the Mortgage and fixtures;

  
 (v) all chattel paper, including, without limitation, all
tangible and electronic chattel paper; 
  
 (vi) all instruments,
including, without limitation, all promissory notes; 
  
 (vii)
all documents; 
  
 (viii) all deposit accounts; 
  
 (ix) all letters of credit, banker’s acceptances and similar
instruments and including all letter-of-credit rights; 
  
 (x)
all supporting obligations and all present and future liens, security interests, rights, remedies, title and interest in, to and in respect of Receivables and other Collateral, including (A) rights and remedies under or relating to guaranties,
contracts of suretyship, letters of credit and credit and other insurance related to the Collateral, (B) rights of stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party, (C) goods described in invoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, Receivables or other Collateral, including returned, repossessed and reclaimed goods, and (D) deposits by
and property of account debtors or other persons securing the obligations of account debtors; 
  

 41 

 (xi) all (A) investment property (including securities, whether certificated or uncertificated,
securities accounts, security entitlements, commodity contracts or commodity accounts) and (B) monies, credit balances, deposits and other property of any Borrower or Guarantor now or hereafter held or received by or in transit to Agent, any
Lender or its Affiliates or at any other depository or other institution from or for the account of any Borrower or Guarantor, whether for safekeeping, pledge, custody, transmission, collection or otherwise; 
  
 (xii) all commercial tort claims, including, without limitation, those
identified in the Information Certificate; 
  
 (xiii) to the
extent not otherwise described above, all Receivables; 
  
 (xiv)
all Records; and 
  
 (xv) all products and proceeds of the
foregoing, in any form, including insurance proceeds and all claims against third parties for loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the other Collateral. 
  
 (b) Notwithstanding anything to the contrary contained in Section 5.1(a)
above, the types or items of Collateral described in such Section shall not include (i) the portion of the Capital Stock of any Foreign Subsidiary that is a “controlled foreign corporation” (as such term is defined in
Section 957(a) of the Code or a successor provision thereof) in excess of sixty-five (65%) percent of the voting power of all classes of Capital Stock of such issuer entitled to vote (within the meaning of Treasury Regulation
Section 1.956-2) if it would have material adverse tax consequences for such Borrower or Guarantor or (ii) the business interruption insurance of Borrowers and Guarantors. 
  
 5.2 Perfection of Security Interests. 
  
 (a) Each Borrower and Guarantor irrevocably and unconditionally authorizes Agent (or its agent) to file at any time and from
time to time such financing statements with respect to the Collateral naming Agent or its designee as the secured party and such Borrower or Guarantor as debtor, as Agent may require, and including any other information with respect to such Borrower
or Guarantor or otherwise required by part 5 of Article 9 of the Uniform Commercial Code of such jurisdiction as Agent may determine, together with any amendment and continuations with respect thereto, which authorization shall apply to all
financing statements filed on, prior to or after the date hereof. Each Borrower and Guarantor hereby ratifies and approves all financing statements naming Agent or its designee as secured party and such Borrower or Guarantor, as the case may be, as
debtor with respect to the Collateral (and any amendments with respect to such financing statements) filed by or on behalf of Agent prior to the date hereof and ratifies and confirms the authorization of Agent to file such financing statements (and
amendments, if any). Each Borrower and Guarantor hereby authorizes Agent to adopt on behalf of such Borrower and Guarantor any symbol required for authenticating any electronic filing. In the event that the description of the collateral in any
financing statement naming Agent or its designee as the secured party and any Borrower or Guarantor as debtor includes assets and 

  

 42 

 
properties of such Borrower or Guarantor that do not at any time constitute Collateral, whether hereunder, under any of the other Financing Agreements or
otherwise, the filing of such financing statement shall nonetheless be deemed authorized by such Borrower or Guarantor to the extent of the Collateral included in such description and it shall not render the financing statement ineffective as to any
of the Collateral or otherwise affect the financing statement as it applies to any of the Collateral. In no event shall any Borrower or Guarantor at any time file, or permit or cause to be filed, any correction statement or termination statement
with respect to any financing statement (or amendment or continuation with respect thereto) naming Agent or its designee as secured party and such Borrower or Guarantor as debtor. 
  
 (b) Each Borrower and Guarantor does not have any chattel paper (whether tangible or electronic) or instruments as of the
date hereof, except as set forth in the Information Certificate. In the event that any Borrower or Guarantor shall be entitled to or shall receive any chattel paper or instrument after the date hereof, Borrowers and Guarantors shall promptly notify
Agent thereof in writing. Promptly upon the receipt thereof by or on behalf of any Borrower or Guarantor (including by any agent or representative), such Borrower or Guarantor shall deliver, or cause to be delivered to Agent, all tangible chattel
paper and instruments that such Borrower or Guarantor has or may at any time acquire, accompanied by such instruments of transfer or assignment duly executed in blank as Agent may from time to time specify, in each case except as Agent may otherwise
agree. At Agent’s option, each Borrower and Guarantor shall, or Agent may at any time on behalf of any Borrower or Guarantor, cause the original of any such instrument or chattel paper to be conspicuously marked in a form and manner acceptable
to Agent with the following legend referring to chattel paper or instruments as applicable: “This [chattel paper][instrument] is subject to the security interest of Wachovia Capital Finance Corporation (Western), as Agent and any sale,
transfer, assignment or encumbrance of this [chattel paper][instrument] violates the rights of such secured party.” 
  
 (c) In the event that any Borrower or Guarantor shall at any time hold or acquire an interest in any electronic chattel paper or any “transferable
record” (as such term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction), such
Borrower or Guarantor shall promptly notify Agent thereof in writing. Promptly upon Agent’s request, such Borrower or Guarantor shall take, or cause to be taken, such actions as Agent may request to give Agent control of such electronic chattel
paper under Section 9-105 of the UCC and control of such transferable record under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as in effect in such jurisdiction. 
  
 (d) Each
Borrower and Guarantor does not have any deposit accounts as of the date hereof, except as set forth in the Information Certificate. Borrowers and Guarantors shall not, directly or indirectly, after the date hereof open, establish or maintain any
deposit account unless each of the following conditions is satisfied: (i) Agent shall have received not less than five (5) Business Days prior written notice of the intention of any Borrower or Guarantor to open or establish such account
which notice shall specify in reasonable detail and specificity acceptable to Agent the name of the account, the owner of the account, the name and address of the bank at which such account is to be opened or established, the individual at such bank
with whom such Borrower or Guarantor is dealing and the purpose of the account, (ii) the bank where such 

  

 43 

 
account is opened or maintained shall be reasonably acceptable to Agent, and (iii) on or before the opening of such deposit account, such Borrower or
Guarantor shall deliver to Agent a Deposit Account Control Agreement with respect to such deposit account duly authorized, executed and delivered by such Borrower or Guarantor and the bank at which such deposit account is opened and maintained. The
terms of this subsection (d) shall not apply to deposit accounts specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Borrower’s or Guarantor’s salaried
employees. 
  
 (e) No Borrower or Guarantor owns or holds,
directly or indirectly, beneficially or as record owner or both, any investment property, as of the date hereof, or have any investment account, securities account, commodity account or other similar account with any bank or other financial
institution or other securities intermediary or commodity intermediary as of the date hereof, in each case except as set forth in the Information Certificate. 
  

(i) In the event that any Borrower or Guarantor shall be entitled to or shall at any time after the date hereof hold or acquire any certificated
securities, such Borrower or Guarantor shall promptly endorse, assign and deliver the same to Agent, accompanied by such instruments of transfer or assignment duly executed in blank as Agent may from time to time specify; provided,
that, if such certificated securities constitute shares of Capital Stock of a Foreign Subsidiary constituting a “controlled foreign corporation” (as such term is defined in Section 957(a) of the Code or a successor provision
thereof), then such Borrower or Guarantor shall not be required to endorse, assign or deliver to Agent those certificates representing the number of shares of the issuer thereof exceeding sixty-five (65%) percent of the voting power of all
classes of Capital Stock of such issuer entitled to vote if it would have material adverse tax consequences for such Borrowers or Guarantor. If any securities, now or hereafter acquired by any Borrower or Guarantor are uncertificated and are issued
to such Borrower or Guarantor or its nominee directly by the issuer thereof, such Borrower or Guarantor shall immediately notify Agent thereof and shall subject to the proviso contained in the immediately preceding sentence, cause the issuer to
agree (in form and substance satisfactory to Agent) to comply with instructions from Agent as to such securities, without further consent of any Borrower or Guarantor or such nominee. 
  
 (ii) Borrowers and Guarantors shall not, directly or indirectly, after the date hereof open, establish or maintain any
investment account, securities account, commodity account or any other similar account (other than a deposit account) with any securities intermediary or commodity intermediary unless each of the following conditions is satisfied: (A) Agent
shall have received not less than five (5) Business Days prior written notice of the intention of such Borrower or Guarantor to open or establish such account which notice shall specify in reasonable detail and specificity acceptable to Agent
the name of the account, the owner of the account, the name and address of the securities intermediary or commodity intermediary at which such account is to be opened or established, the individual at such intermediary with whom such Borrower or
Guarantor is dealing and the purpose of the account, (B) the securities intermediary or commodity intermediary (as the case may be) where such account is opened or maintained shall be acceptable to Agent, and (C) on or before the opening
of such investment account, securities account or other similar account with a securities intermediary or commodity intermediary, such Borrower or Guarantor shall execute and deliver, and cause to be executed and delivered to Agent, an Investment
Property Control Agreement with respect thereto duly authorized, executed and delivered by such Borrower or Guarantor and such securities intermediary or commodity intermediary. 
  

 44 

 (f) Borrowers and Guarantors are not the beneficiary or otherwise entitled to any right to payment under
any letter of credit, banker’s acceptance or similar instrument as of the date hereof, except as set forth in the Information Certificate. In the event that any Borrower or Guarantor shall be entitled to or shall receive any right to payment
under any letter of credit, banker’s acceptance or any similar instrument, whether as beneficiary thereof or otherwise after the date hereof, such Borrower or Guarantor shall promptly notify Agent thereof in writing. Such Borrower or Guarantor
shall immediately, as Agent may specify, either (i) deliver, or cause to be delivered to Agent, with respect to any such letter of credit, banker’s acceptance or similar instrument, the written agreement of the issuer and any other
nominated person obligated to make any payment in respect thereof (including any confirming or negotiating bank), in form and substance satisfactory to Agent, consenting to the assignment of the proceeds of the letter of credit to Agent by such
Borrower or Guarantor and agreeing to make all payments thereon directly to Agent or as Agent may otherwise direct or (ii) cause Agent to become, at Borrowers’ expense, the transferee beneficiary of the letter of credit, banker’s
acceptance or similar instrument (as the case may be). 
  
 (g)
Borrowers and Guarantors do not have any commercial tort claims as of the date hereof, except as set forth in the Information Certificate. In the event that any Borrower or Guarantor shall at any time after the date hereof have any commercial tort
claims, such Borrower or Guarantor shall promptly notify Agent thereof in writing, which notice shall (i) set forth in reasonable detail the basis for and nature of such commercial tort claim and (ii) include the express grant by such
Borrower or Guarantor to Agent of a security interest in such commercial tort claim (and the proceeds thereof). In the event that such notice does not include such grant of a security interest, the sending thereof by such Borrower or Guarantor to
Agent shall be deemed to constitute such grant to Agent. Upon the sending of such notice, any commercial tort claim described therein shall constitute part of the Collateral and shall be deemed included therein. Without limiting the authorization of
Agent provided in Section 5.2(a) hereof or otherwise arising by the execution by such Borrower or Guarantor of this Agreement or any of the other Financing Agreements, Agent is hereby irrevocably authorized from time to time and at any time to
file such financing statements naming Agent or its designee as secured party and such Borrower or Guarantor as debtor, or any amendments to any financing statements, covering any such commercial tort claim as Collateral. In addition, each Borrower
and Guarantor shall promptly upon Agent’s request, execute and deliver, or cause to be executed and delivered, to Agent such other agreements, documents and instruments as Agent may require in connection with such commercial tort claim.

  
 (h) Borrowers and Guarantors do not have any goods, documents
of title or other Collateral in the custody, control or possession of a third party as of the date hereof, except as set forth in the Information Certificate and except for goods in transit to a location of a Borrower or Guarantor permitted herein
in the ordinary course of business of such Borrower or Guarantor in the possession of the carrier transporting such goods. In the event that any goods, documents of title or other Collateral collectively having a value in excess of $100,000 are at
any time after the date hereof in the custody, control or possession of any other person not referred to in the Information Certificate or such carriers, Borrowers and Guarantors shall promptly notify Agent 

  

 45 

 
thereof in writing. Promptly upon Agent’s request, Borrowers and Guarantors shall deliver to Agent a Collateral Access Agreement duly authorized,
executed and delivered by such person and the Borrower or Guarantor that is the owner of such Collateral. 
  
 (i) Borrowers and Guarantors shall take any other actions reasonably requested by Agent from time to time to cause the attachment, perfection and first
priority of, and the ability of Agent to enforce, the security interest of Agent in any and all of the Collateral, including, without limitation, (i) executing, delivering and, where appropriate, filing financing statements and amendments
relating thereto under the UCC or other applicable law, to the extent, if any, that any Borrower’s or Guarantor’s signature thereon is required therefor, (ii) causing Agent’s name to be noted as secured party on any certificate
of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of Agent to enforce, the security interest of Agent in such Collateral, (iii) complying with any provision of any statute,
regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of Agent to enforce, the security interest of Agent in such Collateral,
(iv) obtaining the consents and approvals of any Governmental Authority or third party, including, without limitation, any consent of any licensor, lessor or other person obligated on Collateral, and taking all actions required by any earlier
versions of the UCC or by other law, as applicable in any relevant jurisdiction. 
  
 SECTION 6. COLLECTION AND ADMINISTRATION 
  
 6.1 Borrowers’ Loan Accounts. Agent shall maintain one or more loan account(s) on its books in which shall be recorded (a) all Loans, Letters of Credit and other Obligations and the Collateral,
(b) all payments made by or on behalf of any Borrower or Guarantor and (c) all other appropriate debits and credits as provided in this Agreement, including fees, charges, costs, expenses and interest. All entries in the loan account(s)
shall be made in accordance with Agent’s customary practices as in effect from time to time. 
  
 6.2 Statements. Agent shall render to Administrative Borrower each month a statement setting forth the balance in the Borrowers’ loan
account(s) maintained by Agent for Borrowers pursuant to the provisions of this Agreement, including principal, interest, fees, costs and expenses. Each such statement shall be subject to subsequent adjustment by Agent but shall, absent manifest
errors or omissions, be considered correct and deemed accepted by Borrowers and Guarantors and conclusively binding upon Borrowers and Guarantors as an account stated except to the extent that Agent receives a written notice from Administrative
Borrower of any specific exceptions of Administrative Borrower thereto within thirty (30) days after the date such statement has been received by Parent. Until such time as Agent shall have rendered to Administrative Borrower a written
statement as provided above, the balance in any Borrower’s loan account(s) shall be presumptive evidence of the amounts due and owing to Agent and Lenders by Borrowers and Guarantors. 
  
 6.3 Collection of Accounts; Cash Management. 
  
 (a) Borrowers shall establish and maintain, at their expense, blocked
accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), as Agent may specify, with such banks as are acceptable to Agent into which Borrowers shall promptly deposit 

  

 46 

 
and direct their respective account debtors to directly remit all payments on Receivables and all payments constituting proceeds of Inventory or other
Collateral in the identical form in which such payments are made, whether by cash, check or other manner. 
  
 (b) Borrowers shall deliver, or cause to be delivered, to Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank
where a Blocked Account is maintained as provided in Section 5.2 hereof or at any time and from time to time Agent may become the bank’s customer with respect to any of the Blocked Accounts and promptly upon Agent’s request, Borrowers
shall execute and deliver such agreements and documents as Agent may require in connection therewith. Agent shall instruct the depository banks at which the Blocked Accounts are maintained to transfer the funds on deposit in the Blocked Accounts to
such operating bank account of Borrowers as Borrowers may specify in writing to Agent until such time as Agent shall notify the depository bank otherwise. 
  
 (c) Without limiting any other rights or remedies of Agent or Lenders, at any time on and after a Cash Dominion Event, and for so long as the same is
continuing, Agent may, at its option, instruct the depository banks at which the Blocked Accounts are maintained to transfer by federal funds wire transfer all funds received or deposited into such Blocked Accounts and related deposit accounts to
the Agent Payment Account or as Agent may direct. Each Borrower and Guarantor agrees that all payments made to such Blocked Accounts upon or after a Cash Dominion Event and for so long as the same is continuing or other funds received and collected
by Agent or any Lender at any time, whether in respect of the Receivables, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Agent and Lenders in respect of the Obligations and therefore shall constitute the
property of Agent and Lenders to the extent of the then outstanding Obligations. Upon the written request of Administrative Borrower promptly after the termination of a Cash Dominion Event, Agent shall instruct the depository banks at which the
Blocked Accounts are maintained to transfer the funds received or deposited in such accounts to such operating bank account of the applicable Borrower as Administrative Borrower may specify in writing to Agent until such time as Agent may thereafter
be entitled to instruct the depository bank otherwise as provided above. 
  
 (d) Without limiting any other rights or remedies of Agent or Lenders, Agent may, at its option, send a “notice of exclusive control” or similar notice and otherwise instruct the securities intermediary or
other Person party to an Investment Property Control Agreement that no funds in any investment account or other account subject to such agreement may be transferred except to the Blocked Accounts or otherwise paid to the Agent Payment Account at any
time on or after a Cash Dominion Event and for so long as the same is continuing or at any time on or after Agent receives a notice of the intention of the securities intermediary or other party thereto to terminate such Investment Property Control
Agreement. 
  
 (e) For purposes of calculating the amount of the
Loans available to each Borrower, such payments will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Agent of immediately available funds in the Agent Payment Account provided such payments and
notice thereof are received in accordance with Agent’s usual and customary practices as in effect from time to time and within sufficient time to credit such Borrower’s loan account on such day, and if not, then on the next Business Day.
For the purposes of calculating interest on the Obligations, such payments or other funds received will 

  

 47 

 
be applied (conditional upon final collection) to the Obligations on the date of receipt of immediately available funds by Agent in the Agent Payment Account
provided such payments or other funds and notice thereof are received in accordance with Agent’s usual and customary practices as in effect from time to time and within sufficient time to credit such Borrower’s loan account on such day,
and if not, then on the next Business Day. 
  
 (f) Each Borrower
and Guarantor and their respective employees, agents and Subsidiaries shall, acting as trustee for Agent, receive, as the property of Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts or other
Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Agent.
In no event shall the same be commingled with any Borrower’s or Guarantor’s own funds. Borrowers agree to reimburse Agent on demand for any amounts owed or paid to any bank or other financial institution at which a Blocked Account or any
other deposit account or investment account is established or any other bank, financial institution or other person involved in the transfer of funds to or from the Blocked Accounts arising out of Agent’s payments to or indemnification of such
bank, financial institution or other person. The obligations of Borrowers to reimburse Agent for such amounts pursuant to this Section 6.3 shall survive the termination of this Agreement. 
  
 6.4 Payments. 
  
 (a) All Obligations shall be payable to the Agent Payment Account as
provided in Section 6.3 or such other place as Agent may designate from time to time. Subject to the other terms and conditions contained herein, Agent shall apply payments received or collected from any Borrower or Guarantor or for the account
of any Borrower or Guarantor (including the monetary proceeds of collections or of realization upon any Collateral) as follows: first, to pay any fees, indemnities or expense reimbursements then due to Agent, Lenders and Issuing Bank from any
Borrower or Guarantor; second, to pay interest due in respect of any Loans (and including any Special Agent Advances) or Letter of Credit Obligations; third, to pay or prepay principal in respect of Special Agent Advances;
fourth, to pay principal due in respect of the Term Loans; fifth, to pay or prepay principal in respect of the Revolving Loans and to pay or prepay Obligations then due arising under or pursuant to any Hedge Agreements of a Borrower or
Guarantor with a Bank Product Provider (up to the amount of any then effective Reserve established in respect of such Obligations), on a pro rata basis; sixth, to pay or prepay any other Obligations whether or not then due, in
such order and manner as Agent determines or to be held as cash collateral in connection with any Letter of Credit Obligations (and in the case of such cash collateral as to any Letter of Credit Obligations in the amount equal to one hundred five
(105%) percent of the amount thereof plus the amount of any fees and expenses payable in connection therewith through the end of the latest expiration date of the then outstanding Letters of Credit) or other contingent Obligations (but not
including for this purpose any Obligations arising under or pursuant to any Bank Products); and seventh, to pay or prepay any Obligations arising under or pursuant to any Bank Products (other than to the extent provided for above) on a
pro rata basis. 
  
 (b) Notwithstanding anything to
the contrary contained in this Agreement, (i) unless so directed by Administrative Borrower, or unless a Default or an Event of Default shall exist or 

  

 48 

 
have occurred and be continuing, Agent shall not apply any payments which it receives to any Eurodollar Rate Loans, except (A) on the expiration date of
the Interest Period applicable to any such Eurodollar Rate Loans or (B) in the event that there are no outstanding Prime Rate Loans and (ii) to the extent any Borrower uses any proceeds of the Loans or Letters of Credit to acquire rights
in or the use of any Collateral or to repay any Indebtedness used to acquire rights in or the use of any Collateral, payments in respect of the Obligations shall be deemed applied first to the Obligations arising from Loans and Letters of Credit
that were not used for such purposes and second to the Obligations arising from Loans and Letters of Credit the proceeds of which were used to acquire rights in or the use of any Collateral in the chronological order in which such Borrower acquired
such rights in or the use of such Collateral. 
  
 (c) At
Agent’s option, all principal, interest, fees, costs, expenses and other charges provided for in this Agreement or the other Financing Agreements may be charged directly to the loan account(s) of any Borrower maintained by Agent. If after
receipt of any payment of, or proceeds of Collateral applied to the payment of, any of the Obligations, Agent, any Lender or Issuing Bank is required to surrender or return such payment or proceeds to any Person for any reason, then the Obligations
intended to be satisfied by such payment or proceeds shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment or proceeds had not been received by Agent or such Lender. Borrowers and Guarantors
shall be liable to pay to Agent, and do hereby indemnify and hold Agent and Lenders harmless for the amount of any payments or proceeds surrendered or returned. This Section 6.4(c) shall remain effective notwithstanding any contrary action
which may be taken by Agent or any Lender in reliance upon such payment or proceeds. This Section 6.4(c) shall survive the payment of the Obligations and the termination of this Agreement. 
  
 6.5 Taxes. 
  
 (a) Any and all payments by or on account of any of the Obligations shall be
made free and clear of and without deduction or withholding for or on account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, charges, withholdings, liabilities, restrictions or conditions of any kind,
excluding (i) in the case of each Lender, Issuing Bank and Agent (A) taxes measured by its net income, and franchise taxes imposed on it, by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender,
Issuing Bank or Agent (as the case may be) is organized and (B) any United States withholding taxes payable with respect to payments under the Financing Agreements under laws (including any statute, treaty or regulation) in effect on the date
hereof (or, in the case of an Eligible Transferee, the date of the Assignment and Acceptance) applicable to such Lender, Issuing Bank or Agent, as the case may be, but not excluding any United States withholding taxes payable as a result of any
change in such laws occurring after the date hereof (or the date of such Assignment and Acceptance) and (ii) in the case of each Lender, Issuing Bank or Agent, taxes measured by its net income, and franchise taxes imposed on it as a result of a
present or former connection between such Lender and the jurisdiction of the Governmental Authority imposing such tax or any taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, fees, deductions, charges, withholdings
and liabilities being hereinafter referred to as “Taxes”). 
  
 (b) If any Taxes shall be required by law to be deducted from or in respect of any sum payable in respect of the Obligations to any Lender, Issuing Bank or Agent (i) the sum 

  

 49 

 
payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under
this Section 6.5), such Lender, Issuing Bank or Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the relevant Borrower or Guarantor shall make such deductions,
(iii) the relevant Borrower or Guarantor shall pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable law and (iv) the relevant Borrower or Guarantor shall deliver to Agent evidence
of such payment. 
  
 (c) In addition, each Borrower and Guarantor
agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies of the United States or any political subdivision thereof or any applicable foreign jurisdiction, and all liabilities
with respect thereto, in each case arising from any payment made hereunder or under any of the other Financing Agreements or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any of the other Financing
Agreements (collectively, “Other Taxes”). 
  
 (d) Each
Borrower and Guarantor shall indemnify each Lender, Issuing Bank and Agent for the full amount of Taxes and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Section 6.5) paid by such
Lender, Issuing Bank or Agent (as the case may be) and any liability (including for penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days from the date such Lender, Issuing Bank or Agent (as the case may be) makes written demand therefor. A certificate as to the amount of such payment or liability delivered to Administrative
Borrower by a Lender, Issuing Bank (with a copy to Agent) or by Agent on its own behalf or on behalf of a Lender or Issuing Bank, shall be conclusive absent manifest error. 
  
 (e) As soon as practicable after any payment of Taxes or Other Taxes by any Borrower or Guarantor, such Borrower or
Guarantor shall furnish to Agent, at its address referred to herein, the original or a certified copy of a receipt evidencing payment thereof. 
  
 (f) Without prejudice to the survival of any other agreements of any Borrower or Guarantor hereunder or under any of the other Financing Agreements, the
agreements and obligations of such Borrower or Guarantor contained in this Section 6.5 shall survive the termination of this Agreement and the payment in full of the Obligations. 
  
 (g) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the applicable Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any of the other Financing Agreements shall deliver to Administrative
Borrower (with a copy to Agent), at the time or times prescribed by applicable law or reasonably requested by Administrative Borrower or Agent (in such number of copies as is reasonably requested by the recipient), whichever of the following is
applicable (but only if such Foreign Lender is legally entitled to do so): (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming exemption from, or a reduction to, withholding tax under an income tax treaty, or any
successor form, (ii) duly completed copies of Internal Revenue Service Form 8-8ECI claiming exemption from withholding because the income is effectively connection with a 

  

 50 

 
U.S. trade or business or any successor form, (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under
Sections 871(h) or 881(c) of the Code, (A) a certificate of the Lender to the effect that such Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower
within the meaning of Section 881(c)(3)(B) of the Code or a “controlled foreign corporation” described and Section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal Revenue Service Form W-8BEN claiming
exemption from withholding under the portfolio interest exemption or any successor form or (iv) any other applicable form, certificate or document prescribed by applicable law as a basis for claiming exemption from or a reduction in United
States withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit a Borrower to determine the withholding or deduction required to be made. Unless Administrative Borrower and Agent
have received forms or other documents satisfactory to them indicating that payments hereunder or under any of the other Financing Agreements to or for a Foreign Lender are not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, Borrowers or Agent shall withhold amounts required to be withheld by applicable requirements of law from such payments at the applicable statutory rate. 
  
 (h) Any Lender claiming any additional amounts payable pursuant to this
Section 6.5 shall use its reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its applicable lending office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that would be payable or may thereafter accrue and would not, in the sole determination of such Lender, be otherwise disadvantageous to such Lender. 
  
 6.6 Authorization to Make Loans. Agent and Lenders are authorized to
make the Loans based upon telephonic or other instructions received from anyone purporting to be an officer of Administrative Borrower or any Borrower or other authorized person or, at the discretion of Agent, if such Loans are necessary to satisfy
any Obligations. All requests for Loans or Letters of Credit hereunder shall specify the date on which the requested advance is to be made (which day shall be a Business Day) and the amount of the requested Loan. Requests received after 11:00 a.m.
Los Angeles time on any day shall be deemed to have been made as of the opening of business on the immediately following Business Day. All Loans and Letters of Credit under this Agreement shall be conclusively presumed to have been made to, and at
the request of and for the benefit of, any Borrower or Guarantor when deposited to the credit of any Borrower or Guarantor or otherwise disbursed or established in accordance with the written instructions of any Borrower or Guarantor or in
accordance with the terms and conditions of this Agreement. 
  
 6.7 Use of Proceeds. Borrowers shall use the initial proceeds of the Loans and Letters of Credit hereunder only for: (a) payments to each of the persons listed in the disbursement direction letter furnished by Borrowers to Agent
on or about the date hereof (including but not limited to the payment of a portion of the purchase price for the assets of the EPC Companies pursuant to the EPC Acquisition) and (b) costs, expenses and fees in connection with the preparation,
negotiation, execution and delivery of this Agreement, the other Financing Agreements and the EPC Acquisition Documents. All other Loans made or Letters of Credit provided to or for the benefit of any Borrower pursuant to the provisions hereof shall
be used by such Borrower only for general operating, working capital and other proper corporate purposes 

  

 51 

 
of such Borrower not otherwise prohibited by the terms hereof. None of the proceeds will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security or for the purposes of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Loans to be considered a
“purpose credit” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended. 
  
 6.8 Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of Loans and Statements. 
  
 (a) Each Borrower hereby irrevocably appoints and constitutes Administrative
Borrower as its agent and attorney-in-fact to request and receive Loans and Letters of Credit pursuant to this Agreement and the other Financing Agreements from Agent or any Lender in the name or on behalf of such Borrower. Agent and Lenders may
disburse the Loans to such bank account of Administrative Borrower or a Borrower or otherwise make such Loans to a Borrower and provide such Letters of Credit to a Borrower as Administrative Borrower may designate or direct, without notice to any
other Borrower or Guarantor. Notwithstanding anything to the contrary contained herein, Agent may at any time and from time to time require that Loans to or for the account of any Borrower be disbursed directly to an operating account of such
Borrower. 
  
 (b) Administrative Borrower hereby accepts the
appointment by Borrowers to act as the agent and attorney-in-fact of Borrowers pursuant to this Section 6.8. Administrative Borrower shall ensure that the disbursement of any Loans to each Borrower requested by or paid to or for the account of
Parent, or the issuance of any Letter of Credit for a Borrower hereunder, shall be paid to or for the account of such Borrower. 
  
 (c) Each Borrower and other Guarantor hereby irrevocably appoints and constitutes Administrative Borrower as its agent to receive statements on account
and all other notices from Agent and Lenders with respect to the Obligations or otherwise under or in connection with this Agreement and the other Financing Agreements. 
  
 (d) Any notice, election, representation, warranty, agreement or undertaking by or on behalf of any other Borrower or any
Guarantor by Administrative Borrower shall be deemed for all purposes to have been made by such Borrower or Guarantor, as the case may be, and shall be binding upon and enforceable against such Borrower or Guarantor to the same extent as if made
directly by such Borrower or Guarantor. 
  
 (e) No purported
termination of the appointment of Administrative Borrower as agent as aforesaid shall be effective, except after ten (10) days’ prior written notice to Agent. 
  
 6.9 Pro Rata Treatment. Except to the extent otherwise provided in this Agreement or as otherwise agreed by Lenders:
(a) the making and conversion of Loans shall be made among the Lenders based on their respective Pro Rata Shares as to the Loans and (b) each payment on account of any Obligations to or for the account of one or more of Lenders in respect
of any Obligations due on a particular day shall be allocated among the Lenders entitled to such payments based on their respective Pro Rata Shares and shall be distributed accordingly except as otherwise agreed. 
  

 52 

 6.10 Sharing of Payments, Etc. 
  
 (a) Each Borrower and Guarantor agrees that, in addition to (and without limitation of) any right of setoff, banker’s
lien or counterclaim Agent or any Lender may otherwise have, each Lender shall be entitled, at its option (but subject, as among Agent and Lenders, to the provisions of Section 12.3(b) hereof), to offset balances held by it for the account of
such Borrower or Guarantor at any of its offices, in dollars or in any other currency, against any principal of or interest on any Loans owed to such Lender or any other amount payable to such Lender hereunder, that is not paid when due (regardless
of whether such balances are then due to such Borrower or Guarantor), in which case it shall promptly notify Administrative Borrower and Agent thereof; provided, that, such Lender’s failure to give such notice shall not affect the
validity thereof. 
  
 (b) If any Lender (including Agent) shall
obtain from any Borrower or Guarantor payment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or any of the other Financing Agreements through the exercise of any right of setoff,
banker’s lien or counterclaim or similar right or otherwise (other than from Agent as provided herein), and, as a result of such payment, such Lender shall have received more than its Pro Rata Share of the principal of the Loans or more than
its share of such other amounts then due hereunder or thereunder by any Borrower or Guarantor to such Lender than the percentage thereof received by any other Lender, it shall promptly pay to Agent, for the benefit of Lenders, the amount of such
excess and simultaneously purchase from such other Lenders a participation in the Loans or such other amounts, respectively, owing to such other Lenders (or such interest due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all Lenders shall share the benefit of such excess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving such excess payment) in accordance
with their respective Pro Rata Shares or as otherwise agreed by Lenders. To such end all Lenders shall make appropriate adjustments among themselves (by the resale of participation sold or otherwise) if such payment is rescinded or must otherwise be
restored. 
  
 (c) Each Borrower and Guarantor agrees that any
Lender purchasing a participation (or direct interest) as provided in this Section may exercise, in a manner consistent with this Section, all rights of setoff, banker’s lien, counterclaim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation. 
  
 (d) Nothing contained herein shall require any Lender to exercise any right of setoff, banker’s lien, counterclaims or similar rights or shall affect
the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or obligation of any Borrower or Guarantor. If, under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, assign such rights to Agent for the benefit of Lenders and, in any event, exercise its rights in respect of such secured
claim in a manner consistent with the rights of Lenders entitled under this Section to share in the benefits of any recovery on such secured claim. 
  

 53 

 6.11 Settlement Procedures. 
  
 (a) In order to administer the Credit Facility in an efficient manner and to minimize the transfer of funds between Agent
and Lenders, Agent may, at its option, subject to the terms of this Section, make available, on behalf of Lenders, the full amount of the Loans requested or charged to any Borrower’s loan account(s) or otherwise to be advanced by Lenders
pursuant to the terms hereof, without requirement of prior notice to Lenders of the proposed Loans. 
  
 (b) With respect to all Loans made by Agent on behalf of Lenders as provided in this Section, the amount of each Lender’s Pro Rata Share of the
outstanding Loans shall be computed weekly, and shall be adjusted upward or downward on the basis of the amount of the outstanding Loans as of 5:00 p.m. Los Angeles time on the Business Day immediately preceding the date of each settlement
computation; provided, that, Agent retains the absolute right at any time or from time to time to make the above described adjustments at intervals more frequent than weekly, but in no event more than twice in any week. Agent shall
deliver to each of the Lenders after the end of each week, or at such lesser period or periods as Agent shall determine, a summary statement of the amount of outstanding Loans for such period (such week or lesser period or periods being hereinafter
referred to as a “Settlement Period”). If the summary statement is sent by Agent and received by a Lender prior to 12:00 p.m. Los Angeles time, then such Lender shall make the settlement transfer described in this Section by no later than
3:00 p.m. Los Angeles time on the same Business Day and if received by a Lender after 12:00 p.m. Los Angeles time, then such Lender shall make the settlement transfer by not later than 3:00 p.m. Los Angeles time on the next Business Day following
the date of receipt. If, as of the end of any Settlement Period, the amount of a Lender’s Pro Rata Share of the outstanding Loans is more than such Lender’s Pro Rata Share of the outstanding Loans as of the end of the previous Settlement
Period, then such Lender shall forthwith (but in no event later than the time set forth in the preceding sentence) transfer to Agent by wire transfer in immediately available funds the amount of the increase. Alternatively, if the amount of a
Lender’s Pro Rata Share of the outstanding Loans in any Settlement Period is less than the amount of such Lender’s Pro Rata Share of the outstanding Loans for the previous Settlement Period, Agent shall forthwith transfer to such Lender by
wire transfer in immediately available funds the amount of the decrease. The obligation of each of the Lenders to transfer such funds and effect such settlement shall be irrevocable and unconditional and without recourse to or warranty by Agent.
Agent and each Lender agrees to mark its books and records at the end of each Settlement Period to show at all times the dollar amount of its Pro Rata Share of the outstanding Loans and Letters of Credit. Each Lender shall only be entitled to
receive interest on its Pro Rata Share of the Loans to the extent such Loans have been funded by such Lender. Because the Agent on behalf of Lenders may be advancing and/or may be repaid Loans prior to the time when Lenders will actually advance
and/or be repaid such Loans, interest with respect to Loans shall be allocated by Agent in accordance with the amount of Loans actually advanced by and repaid to each Lender and the Agent and shall accrue from and including the date such Loans are
so advanced to but excluding the date such Loans are either repaid by Borrowers or actually settled with the applicable Lender as described in this Section. 
  
 (c) To the extent that Agent has made any such amounts available and the settlement described above shall not yet have occurred, upon repayment of any
Loans by a Borrower, Agent may apply such amounts repaid directly to any amounts made available by 

  

 54 

 
Agent pursuant to this Section. In lieu of weekly or more frequent settlements, Agent may, at its option, at any time require each Lender to provide Agent
with immediately available funds representing its Pro Rata Share of each Loan, prior to Agent’s disbursement of such Loan to Borrower. In such event, all Loans under this Agreement shall be made by the Lenders simultaneously and proportionately
to their Pro Rata Shares. No Lender shall be responsible for any default by any other Lender in the other Lender’s obligation to make a Loan requested hereunder nor shall the Commitment of any Lender be increased or decreased as a result of the
default by any other Lender in the other Lender’s obligation to make a Loan hereunder. 
  
 (d) If Agent is not funding a particular Loan to a Borrower (or Administrative Borrower for the benefit of such Borrower) pursuant to Sections 6.11(a) and 6.11(b) above on any day, but is requiring each Lender to
provide Agent with immediately available funds on the date of such Loan as provided in Section 6.11(c) above, Agent may assume that each Lender will make available to Agent such Lender’s Pro Rata Share of the Loan requested or otherwise
made on such day and Agent may, in its discretion, but shall not be obligated to, cause a corresponding amount to be made available to or for the benefit of such Borrower on such day. If Agent makes such corresponding amount available to a Borrower
and such corresponding amount is not in fact made available to Agent by such Lender, Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon for each day from the date such payment was
due until the date such amount is paid to Agent at the Federal Funds Rate for each day during such period (as published by the Federal Reserve Bank of New York or at Agent’s option based on the arithmetic mean determined by Agent of the rates
for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by each of the three leading brokers of Federal funds transactions in New York City selected by Agent) and if such amounts are not paid
within three (3) days of Agent’s demand, at the highest Interest Rate provided for in Section 3.1 hereof applicable to Prime Rate Loans. During the period in which such Lender has not paid such corresponding amount to Agent,
notwithstanding anything to the contrary contained in this Agreement or any of the other Financing Agreements, the amount so advanced by Agent to or for the benefit of any Borrower shall, for all purposes hereof, be a Loan made by Agent for its own
account. Upon any such failure by a Lender to pay Agent, Agent shall promptly thereafter notify Administrative Borrower of such failure and Borrowers shall pay such corresponding amount to Agent for its own account within five (5) Business Days
of Administrative Borrower’s receipt of such notice. A Lender who fails to pay Agent its Pro Rata Share of any Loans made available by the Agent on such Lender’s behalf, or any Lender who fails to pay any other amount owing by it to Agent,
is a “Defaulting Lender”. Agent shall not be obligated to transfer to a Defaulting Lender any payments received by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments
hereunder (including any principal, interest or fees). Amounts payable to a Defaulting Lender shall instead be paid to or retained by Agent. Agent may hold and, in its discretion, relend to a Borrower the amount of all such payments received or
retained by it for the account of such Defaulting Lender. For purposes of voting or consenting to matters with respect to this Agreement and the other Financing Agreements and determining Pro Rata Shares, such Defaulting Lender shall be deemed not
to be a “Lender” and such Lender’s Commitment shall be deemed to be zero (0). This Section shall remain effective with respect to a Defaulting Lender until such default is cured. The operation of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender, or relieve or excuse the performance by any Borrower or Guarantor of their duties and obligations hereunder. 
  

 55 

 (e) Nothing in this Section or elsewhere in this Agreement or the other Financing Agreements shall be
deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitment hereunder or to prejudice any rights that any Borrower may have against any Lender as a result of any default by
any Lender hereunder in fulfilling its Commitment. 
  
 6.12
Obligations Several; Independent Nature of Lenders’ Rights. The obligation of each Lender hereunder is several, and no Lender shall be responsible for the obligation or commitment of any other Lender hereunder. Nothing contained in this
Agreement or any of the other Financing Agreements and no action taken by the Lenders pursuant hereto or thereto shall be deemed to constitute the Lenders to be a partnership, an association, a joint venture or any other kind of entity. The amounts
payable at any time hereunder to each Lender shall be a separate and independent debt, and subject to Section 12.3 hereof, each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any proceeding for such purpose. 
  
 6.13 Bank Products. Borrowers and Guarantors, or any of their Subsidiaries, may (but no such Person is required to) request that the Bank Product
Providers provide or arrange for such Person to obtain Bank Products from Bank Product Providers, and each Bank Product Provider may, in its sole discretion, provide or arrange for such Person to obtain the requested Bank Products. Borrowers and
Guarantors or any of their Subsidiaries that obtains Bank Products shall indemnify and hold Agent, each Lender and their respective Affiliates harmless from any and all obligations now or hereafter owing to any other Person by any Bank Product
Provider in connection with any Bank Products other than for gross negligence or willful misconduct on the part of any such indemnified Person. This Section 6.13 shall survive the payment of the Obligations and the termination of this
Agreement. Borrower and its Subsidiaries acknowledge and agree that the obtaining of Bank Products from Bank Product Providers (a) is in the sole discretion of such Bank Product Provider, and (b) is subject to all rules and regulations of
such Bank Product Provider. Each Bank Product Provider shall be deemed a party hereto for purposes of any reference in any of the Financing Agreements to the parties for whom Agent is acting, provided, that, the rights of such Bank
Product Provider hereunder and under any of the other Financing Agreements shall consist exclusively of such Bank Product Provider’s right to share in payments and collections out of the Collateral as set forth herein. In connection with any
such distribution of payments and collections, Agent shall be entitled to assume that no amounts are due to any Bank Product Provider unless such Bank Product Provider has notified Agent in writing of any such liability owed to it as of the date of
any such distribution 
  
 SECTION 7. COLLATERAL REPORTING
AND COVENANTS 
  
 7.1 Collateral Reporting.

  
 (a) Borrowers shall provide Agent with the following
documents in a form satisfactory to Agent: 
  
 (i) as soon as
possible after the end of each fiscal month (but in any event within ten (10) Business Days after the end thereof), on a monthly basis or on a weekly basis in 

  

 56 

 
the event that at any time prior to the first anniversary of the date hereof the Excess Availability is less than $20,000,000 or at any time thereafter the
Excess Availability is less than $15,000,000, or in any event more frequently as Agent may from time to time request at any time, (A) a Borrowing Base Certificate setting forth the calculation of the Borrowing Base as of the last Business Day
of the immediately preceding period, duly completed and executed by the vice president-finance, chief financial officer, treasurer, assistant treasurer, controller or other financial or senior officer of Administrative Borrower, together with all
schedules required pursuant to the terms of the Borrowing Base Certificate duly completed (including a schedule of all Accounts created, collections received and credit memos issued for the immediately preceding period); provided,
that, unless and until the Inventory Availability Date (or prior thereto to the extent set forth in the definition of the Inventory Availability Date), the Borrowing Base Certificate will not include any of the Eligible Inventory or the other
information with respect to the Inventory provided for in such certificate, (B) perpetual inventory reports, (C) on and after the Inventory Availability Date, inventory reports by location and category (and including the amounts of
Inventory and the value thereof at any leased locations and at premises of warehouses, processors or other third parties), (D) agings of accounts receivable (together with a rollforward from the previous month’s accounts receivable balance
and a reconciliation with the general ledger), and (E) agings of accounts payable; 
  
 (ii) upon Agent’s request, (A) copies of customer statements, purchase orders, sales invoices, credit memos, remittance advices and reports, and copies of deposit slips and bank statements, (B) copies
of shipping and delivery documents and (C) copies of purchase orders, invoices and on and after the Inventory Availability Date, delivery documents for Inventory and Equipment acquired by any Borrower or Guarantor; 
  
 (iii) such other reports as to the Collateral as Agent shall request from
time to time. 
  
 (b) If any Borrower’s or Guarantor’s
records or reports of the Collateral are prepared or maintained by an accounting service, contractor, shipper or other agent, such Borrower and Guarantor hereby irrevocably authorizes such service, contractor, shipper or agent to deliver such
records, reports, and related documents to Agent and to follow Agent’s instructions with respect to further services at any time that an Event of Default exists or has occurred and is continuing. 
  
 7.2 Accounts Covenants. 
  
 (a) Borrowers shall notify Agent promptly of: (i) any material delay in
any Borrower’s performance of any of its material obligations to any account debtor or the assertion of any material claims, offsets, defenses or counterclaims by any account debtor, or any material disputes with account debtors, or any
settlement, adjustment or compromise thereof, (ii) all material adverse information known to any Borrower or Guarantor relating to the financial condition of any account debtor that is obligated in respect of Accounts of more than $250,000 and
(iii) any event or circumstance which, to the best of any Borrower’s or Guarantor’s knowledge, would cause Agent to consider any then existing Accounts as no longer constituting Eligible Accounts. No credit, discount, allowance or
extension or agreement for any of the foregoing shall be granted to any account debtor without Agent’s consent, except in the ordinary 

  

 57 

 
course of a Borrower’s or Guarantor’s business in accordance with practices and policies previously disclosed in writing to Agent and except as set
forth in the schedules delivered to Agent pursuant to Section 7.1(a) above. So long as no Event of Default exists or has occurred and is continuing, Borrowers and Guarantors shall settle, adjust or compromise any claim, offset, counterclaim or
dispute with any account debtor. At any time that an Event of Default exists or has occurred and is continuing, Agent shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with
account debtors or grant any credits, discounts or allowances. 
  
 (b) With respect to each Account: (i) the amounts shown on any invoice delivered to Agent or schedule thereof delivered to Agent shall be true and complete, (ii) no payments shall be made thereon except payments immediately
deposited to Blocked Accounts or immediately delivered to Agent pursuant to the terms of this Agreement, (iii) no credit, discount, allowance or extension or agreement for any of the foregoing shall be granted to any account debtor except as
reported to Agent in accordance with this Agreement and except for credits, discounts, allowances or extensions made or given in the ordinary course of each Borrower’s business in accordance with practices and policies previously disclosed to
Agent, (iv) all setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto shall be reported to Agent in accordance with the terms of this Agreement, (v) none of the transactions giving rise
thereto will violate any applicable foreign, Federal, State or local laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in
accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights generally and by general principles of equity. 

 
 (c) Agent shall have the right at any time or times, in Agent’s name
or in the name of a nominee of Agent, to verify the validity, amount or any other matter relating to any Receivables or other Collateral, by mail, telephone, facsimile transmission or otherwise. 
  
 7.3 Inventory Covenants. With respect to the Inventory: (a) each
Borrower and Guarantor shall at all times maintain inventory records and conduct physical counts of Inventory consistent with the current practices of Borrowers and Guarantors as of the date hereof or as otherwise consented to by Agent, but in any
event in a manner sufficient to permit an audit of the financial statements of Borrowers in accordance with GAAP and Borrowers shall provide to Agent such reports as may be prepared consistent with current practices with respect to such physical
counts; (b) Borrowers and Guarantors shall not remove any Inventory from the locations set forth or permitted herein (including third party locations as set forth in the Information Certificate), without the prior written consent of Agent,
except (i) for sales of Inventory in the ordinary course of its business, (ii) to move Inventory directly from one location set forth or permitted herein to another such location, and (iii) for Inventory shipped from the manufacturer
thereof to such Borrower or Guarantor which is in transit to the locations set forth or permitted herein; (c) upon Agent’s request at any time on or after a Cash Dominion Event and for so long as the same is continuing and after the
Inventory Availability Date, Borrowers shall deliver or cause to be delivered to Agent written appraisals as to the Inventory in form, scope and methodology acceptable to Agent and by an appraiser acceptable to Agent, addressed to Agent and Lenders
and upon which Agent and Lenders are expressly permitted to rely, provided, that, 

  

 58 

 (i) such appraisal shall be at the expense of Borrowers and (ii) so long as no Event of Default shall exist or have
occurred and be continuing, there shall be no more than one (1) appraisal in any twelve (12) month period; (d) Borrowers and Guarantors shall produce, use, store and maintain the Inventory with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity with applicable laws (including the requirements of the Federal Fair Labor Standards Act of 1938, as amended and all rules, regulations and orders related thereto);
(e) none of the Inventory or other Collateral constitutes farm products or the proceeds thereof; (f) each Borrower and Guarantor assumes all responsibility and liability arising from or relating to the production, use, sale or other
disposition of the Inventory; (g) Borrowers and Guarantors shall not sell Inventory to any customer on approval, or any other basis which entitles the customer to return or may obligate any Borrower or Guarantor to repurchase such Inventory;
(h) Borrowers and Guarantors shall keep the Inventory in good and marketable condition; and (i) Borrowers and Guarantors shall not, on and after the Inventory Availability Date, without prior written notice to Agent or the specific
identification of such Inventory in a report with respect thereto provided by Administrative Borrower to Agent pursuant to Section 7.1(a) hereof, acquire or accept any Inventory on consignment or approval. 
  
 7.4 Equipment and Real Property Covenants. With respect to the
Equipment and Real Property: (a) upon Agent’s request, Borrowers and Guarantors shall deliver or cause to be delivered to Agent written appraisals as to the Equipment and/or the Real Property that is subject to a Mortgage, in form, scope
and methodology acceptable to Agent and by an appraiser acceptable to Agent, addressed to Agent and Lenders and upon which Agent and Lenders are expressly permitted to rely, provided, that, (i) such appraisals shall be at the expense of
Borrowers on or after a Cash Dominion Event and for so long as the same is continuing and otherwise at the expense of Agent and Lenders, and (ii) so long as no Event of Default shall exist or have occurred and be continuing, there shall be no
more than one (1) appraisal in any twelve (12) month period at the expense of Borrowers; (b) Borrowers and Guarantors shall keep the Equipment in good order, repair, running and marketable condition (ordinary wear and tear excepted)
in accordance with current practices; (c) Borrowers and Guarantors shall use the Equipment and Real Property with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable
laws; (d) the Equipment is and shall be used in the business of Borrowers and Guarantors and not for personal, family, household or farming use; (e) Borrowers and Guarantors shall not remove any Equipment from the locations set forth or
permitted herein, except (i) for sales or other dispositions of Equipment permitted hereunder, (ii) to the extent necessary to have any Equipment repaired or maintained in the ordinary course of its business, (iii) to move Equipment
directly from one location set forth or permitted herein to another such location and (iv) for the movement of motor vehicles used by or for the benefit of such Borrower or Guarantor in the ordinary course of business; (f) the Equipment is
now and shall remain personal property and Borrowers and Guarantors shall not permit any of the Equipment to be or become a part of or affixed to real property; and (g) each Borrower and Guarantor assumes all responsibility and liability
arising from the use of the Equipment and Real Property. 
  
 7.5
Power of Attorney. Each Borrower and Guarantor hereby irrevocably designates and appoints Agent (and all persons designated by Agent) as such Borrower’s and Guarantor’s true and lawful attorney-in-fact, and authorizes Agent, in such
Borrower’s, Guarantor’s or Agent’s name, to: (a) at any time an Event of Default exists or has occurred and is continuing (i) demand 

  

 59 

 
payment on Receivables or other Collateral, (ii) enforce payment of Receivables by legal proceedings or otherwise, (iii) exercise all of such
Borrower’s or Guarantor’s rights and remedies to collect any Receivable or other Collateral, (iv) sell or assign any Receivable upon such terms, for such amount and at such time or times as the Agent deems advisable, (v) settle,
adjust, compromise, extend or renew an Account, (vi) discharge and release any Receivable, (vii) prepare, file and sign such Borrower’s or Guarantor’s name on any proof of claim in bankruptcy or other similar document against an
account debtor or other obligor in respect of any Receivables or other Collateral, (viii) notify the post office authorities to change the address for delivery of remittances from account debtors or other obligors in respect of Receivables or
other proceeds of Collateral to an address designated by Agent, and open all mail addressed to such Borrower or Guarantor and handle and store all mail relating to the Collateral; and (ix) do all acts and things which are necessary, in
Agent’s determination, to fulfill such Borrower’s or Guarantor’s obligations under this Agreement and the other Financing Agreements, (b) at any time on or after a Cash Dominion Event and for so long as the same is continuing to
(i) take control in any manner of any item of payment in respect of Receivables or constituting Collateral or otherwise received in or for deposit in the Blocked Accounts or otherwise received by Agent or any Lender and (ii) have access to
any lockbox or postal box into which remittances from account debtors or other obligors in respect of Receivables or other proceeds of Collateral are sent or received, and (c) at any time to (i) endorse such Borrower’s or
Guarantor’s name upon any items of payment in respect of Receivables or constituting Collateral or otherwise received by Agent and any Lender and deposit the same in Agent’s account for application to the Obligations, (ii) endorse
such Borrower’s or Guarantor’s name upon any chattel paper, document, instrument, invoice, or similar document or agreement relating to any Receivable or any goods pertaining thereto or any other Collateral, including any warehouse or
other receipts, or bills of lading and other negotiable or non-negotiable documents, (iii) clear Inventory the purchase of which was financed with a Letter of Credit through U.S. Customs or foreign export control authorities in such
Borrower’s or Guarantor’s name, Agent’s name or the name of Agent’s designee, and to sign and deliver to customs officials powers of attorney in such Borrower’s or Guarantor’s name for such purpose, and to complete in
such Borrower’s or Guarantor’s or Agent’s name, any order, sale or transaction, obtain the necessary documents in connection therewith and collect the proceeds thereof, and (iv) sign such Borrower’s or Guarantor’s name
on any verification of Receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof. Each Borrower and Guarantor hereby releases Agent and Lenders and their respective officers, employees and
designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of Agent’s or any Lender’s own gross negligence or wilful misconduct
as determined pursuant to a final non-appealable order of a court of competent jurisdiction. 
  
 7.6 Right to Cure. Agent may, at its option, upon notice to Administrative Borrower given at any time a Default or an Event of Default exists or has occurred and is continuing, (a) cure any default by any
Borrower or Guarantor under any material agreement with a third party that affects the Collateral, its value or the ability of Agent to collect, sell or otherwise dispose of the Collateral or the rights and remedies of Agent or any Lender therein or
the ability of any Borrower or Guarantor to perform its obligations hereunder or under any of the other Financing Agreements, (b) pay or bond on appeal any judgment entered against any Borrower or Guarantor, (c) discharge taxes, liens,
security interests or other encumbrances at any time levied 

  

 60 

 
on or existing with respect to the Collateral and (d) pay any amount, incur any expense or perform any act which, in Agent’s judgment, is necessary
or appropriate to preserve, protect, insure or maintain the Collateral and the rights of Agent and Lenders with respect thereto. Agent may add any amounts so expended to the Obligations and charge any Borrower’s account therefor, such amounts
to be repayable by Borrowers on demand. Agent and Lenders shall be under no obligation to effect such cure, payment or bonding and shall not, by doing so, be deemed to have assumed any obligation or liability of any Borrower or Guarantor. Any
payment made or other action taken by Agent or any Lender under this Section shall be without prejudice to any right to assert an Event of Default hereunder and to proceed accordingly. 
  
 7.7 Access to Premises; Field Examinations. From time to time as requested by Agent, at the cost and expense of
Borrowers, (a) Agent or its designee shall have complete access to all of each Borrower’s and Guarantor’s premises during normal business hours and after prior notice to Administrative Borrower, or at any time and without notice to
Administrative Borrower if an Event of Default exists or has occurred and is continuing, for the purposes of inspecting, verifying and auditing the Collateral and all of each Borrower’s and Guarantor’s books and records, including the
Records, and (b) each Borrower and Guarantor shall promptly furnish to Agent such copies of such books and records or extracts therefrom as Agent may reasonably request, and Agent or any Lender or Agent’s designee may use during normal
business hours such of any Borrower’s and Guarantor’s personnel, equipment, supplies and premises as may be reasonably necessary for the foregoing (provided, that, Borrowers may make such personnel, equipment, supplies and premises
available to Agent in such a manner so as to not to interfere in any material respect with the operations of Borrowers and Guarantors) and if an Event of Default exists or has occurred and is continuing for the collection of Receivables and
realization of other Collateral. Agent shall conduct four (4) field examinations with respect to Borrowers prior to the first anniversary of the date hereof and not less than three (3) field examinations with respect to Borrowers in any
twelve (12) month period commencing thereafter, in each case except as Agent and Required Lenders may otherwise agree. 
  
 SECTION 8. REPRESENTATIONS AND WARRANTIES 
  
 Each Borrower and Guarantor hereby represents and warrants to Agent, Lenders and Issuing Bank the following (which shall survive the execution and
delivery of this Agreement): 
  
 8.1 Corporate Existence,
Power and Authority. Each Borrower and Guarantor is a corporation duly organized and in existence (in the case of a corporation organized under the laws of the State of Oregon) or otherwise in good standing under the laws of its jurisdiction of
organization and is duly qualified as a foreign corporation, and, to the extent applicable, in good standing in all states or other jurisdictions where the nature and extent of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect. The execution, delivery and performance of this Agreement, the other Financing Agreements and the transactions
contemplated hereunder and thereunder (a) are all within each Borrower’s and Guarantor’s corporate powers, (b) have been duly authorized, (c) are not in contravention of law or the terms of any Borrower’s or
Guarantor’s certificate of incorporation, by laws, or other organizational documentation, or any indenture, agreement or undertaking to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor or its property are 

  

 61 

 
bound and (d) will not result in the creation or imposition of, or require or give rise to any obligation to grant, any lien, security interest, charge
or other encumbrance upon any property of any Borrower or Guarantor. This Agreement and the other Financing Agreements to which any Borrower or Guarantor is a party constitute legal, valid and binding obligations of such Borrower and Guarantor
enforceable in accordance with their respective terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar law affecting creditors’ rights generally and by general
principles of equity. 
  
 8.2 Name; State of Organization;
Chief Executive Office; Collateral Locations. 
  
 (a) The
exact legal name of each Borrower and Guarantor is as set forth on the signature page of this Agreement and in the Information Certificate. No Borrower or Guarantor has, during the five years prior to the date of this Agreement, been known by or
used any other corporate or fictitious name or been a party to any merger or consolidation, or acquired all or substantially all of the assets of any Person, or acquired any of its property or assets out of the ordinary course of business, except as
set forth in the Information Certificate. 
  
 (b) Each Borrower
and Guarantor is an organization of the type and organized in the jurisdiction set forth in the Information Certificate. The Information Certificate accurately sets forth the organizational identification number of each Borrower and Guarantor or
accurately states that such Borrower or Guarantor has none and accurately sets forth the federal employer identification number of each Borrower and Guarantor. 
  

(c) The chief executive office and mailing address of each Borrower and Guarantor and each Borrower’s and Guarantor’s Records concerning
Accounts are located only at the address identified as such in Schedule 8.2 to the Information Certificate and its only other places of business and the only other locations of Collateral, if any, are the addresses set forth in Schedule 8.2 to the
Information Certificate, subject to the rights of any Borrower or Guarantor to establish new locations in accordance with Section 9.2 below. The Information Certificate correctly identifies any of such locations which are not owned by a
Borrower or Guarantor and sets forth the owners and/or operators thereof. 
  
 8.3 Financial Statements; No Material Adverse Change. All financial statements relating to any Borrower or Guarantor which have been or may hereafter be delivered by any Borrower or Guarantor to Agent and
Lenders have been prepared in accordance with GAAP (except as to any interim financial statements, to the extent such statements are subject to normal year-end adjustments and do not include any notes) and fairly present in all material respects the
financial condition and the results of operation of such Borrower and Guarantor as at the dates and for the periods set forth therein. Except as disclosed in any interim financial statements furnished by Borrowers and Guarantors to Agent prior to
the date of this Agreement, there has been no act, condition or event which has had or is reasonably likely to have a Material Adverse Effect since the date of the most recent audited financial statements of any Borrower or Guarantor furnished by
any Borrower or Guarantor to Agent prior to the date of this Agreement. The projections received by Agent on September 1, 2005 for each of the fiscal months after the date hereof through the end of the 2006 fiscal year of Borrowers and the
fiscal years ending 2006 through 2009 that have been delivered to Agent or any projections hereafter delivered to Agent have been 

  

 62 

 
prepared in light of the past operations of the businesses of Borrowers and Guarantors and are based upon estimates and assumptions stated therein, all of
which Borrowers and Guarantors have determined to be reasonable and fair in light of the then current conditions and current facts and reflect the good faith and reasonable estimates of Borrowers and Guarantors of the future financial performance of
Parent and its Subsidiaries and of the other information projected therein for the periods set forth therein (it being recognized that projections and forecasts provided by Borrowers are not to be viewed as facts and that actual results during the
period covered by any projections and forecasts may differ from the projected or forecasted results). 
  
 8.4 Priority of Liens; Title to Properties. The security interests and liens granted to Agent under this Agreement and the other Financing
Agreements constitute valid and perfected first priority liens and security interests in and upon the Collateral subject only to the liens indicated on Schedule 8.4 to the Information Certificate and the other liens permitted under Section 9.8
hereof. Each Borrower and Guarantor has good and marketable fee simple title to or valid leasehold interests in all of its Real Property and good, valid and merchantable title to all of its other properties and assets subject to no liens, mortgages,
pledges, security interests, encumbrances or charges of any kind, except those granted to Agent and such others as are specifically listed on Schedule 8.4 to the Information Certificate or permitted under Section 9.8 hereof. 
  
 8.5 Tax Returns. Each Borrower and Guarantor has filed, or caused to
be filed, in a timely manner all tax returns, reports and declarations which are required to be filed by it. All information in such tax returns, reports and declarations is complete and accurate in all material respects. Each Borrower and Guarantor
has paid or caused to be paid all taxes due and payable or claimed due and payable in any assessment received by it, except taxes the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to
such Borrower or Guarantor and with respect to which adequate reserves have been set aside on its books. Adequate provision has been made for the payment of all accrued and unpaid Federal, State, county, local, foreign and other taxes whether or not
yet due and payable and whether or not disputed. 
  
 8.6
Litigation. Except as set forth on Schedule 8.6 to the Information Certificate, (a) there is no investigation by any Governmental Authority pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened, against
or affecting any Borrower or Guarantor, its or their assets or business and (b) there is no action, suit, proceeding or claim by any Person pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened, against any
Borrower or Guarantor or its or their assets or goodwill, or against or affecting any transactions contemplated by this Agreement, in each case, which if adversely determined against such Borrower or Guarantor has or could reasonably be expected to
have a Material Adverse Effect. 
  
 8.7 Compliance with Other
Agreements and Applicable Laws. 
  
 (a) Borrowers and
Guarantors are not in default in any respect under, or in violation in any respect of the terms of, any material agreement, contract, instrument, lease or other commitment to which it is a party or by which it or any of its assets are bound, which
default or violation has or could reasonably be expected to have a Material Adverse Effect. Borrowers and 

  

 63 

 
Guarantors are in compliance with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority relating to their
respective businesses, including, without limitation, those set forth in or promulgated pursuant to the Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards Act of 1938, as amended, ERISA, the Code, as amended, and the
rules and regulations thereunder, and all Environmental Laws, where the failure to so compliance has or could reasonably be expected to have a Material Adverse Effect. 
  
 (b) Borrowers and Guarantors have obtained all material permits, licenses, approvals, consents, certificates, orders or
authorizations of any Governmental Authority required for the lawful conduct of its business (the “Permits”). All of the Permits are valid and subsisting and in full force and effect. There are no actions, claims or proceedings pending or
to the best of any Borrower’s or Guarantor’s knowledge, threatened that seek the revocation, cancellation, suspension or modification of any of the Permits. 
  
 8.8 Environmental Compliance. 
  
 (a) Except as set forth on Schedule 8.8 to the Information Certificate, Borrowers, Guarantors and any Subsidiary of any
Borrower or Guarantor have not generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any Hazardous Materials, on or off its premises (whether or not owned by it) in any manner which at any time violates any
applicable Environmental Law or Permit in a manner that has or could reasonably be expected to have a Material Adverse Effect, and the operations of Borrowers, Guarantors and any Subsidiary of any Borrower or Guarantor complies in all respects with
all Environmental Laws and all Permits where the failure to do so has or could reasonably be expected to have a Material Adverse Effect. 
  
 (b) Except as set forth on Schedule 8.8 to the Information Certificate, there has been no investigation by any Governmental Authority or any proceeding,
complaint, order, directive, claim, citation or notice by any Governmental Authority or any other person nor is any pending or to the best of any Borrower’s or Guarantor’s knowledge threatened, with respect to any non compliance with or
violation of the requirements of any Environmental Law by any Borrower or Guarantor and any Subsidiary of any Borrower or Guarantor or the release, spill or discharge, threatened or actual, of any Hazardous Material or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials or any other environmental, health or safety matter, which has had or could reasonably be expected to have a Material Adverse Effect. 
  
 (c) Except as set forth on Schedule 8.8 to the Information Certificate,
Borrowers, Guarantors and their Subsidiaries have no material liability (contingent or otherwise) in connection with a release, spill or discharge, threatened or actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous Materials. 
  
 (d) Borrowers, Guarantors and their Subsidiaries have all material Permits required to be obtained or filed in connection with the operations of Borrowers and Guarantors under any Environmental Law and all of such
licenses, certificates, approvals or similar authorizations and other Permits are valid and in full force and effect. 
  

 64 

 8.9 Employee Benefits. 
  
 (a) Each Plan is in compliance in all respects with the applicable provisions of ERISA, the Code and other Federal or State
law where the failure to so comply has or could reasonably be expected to have a Material Adverse Effect. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the Internal
Revenue Service and to the best of any Borrower’s or Guarantor’s knowledge, nothing has occurred which would cause the loss of such qualification and result in a Material Adverse Effect. Each Borrower and its ERISA Affiliates have made all
required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan where any
failure to do so has or could reasonably be expected to have a Material Adverse Effect. 
  
 (b) There are no pending, or to the best of any Borrower’s or Guarantor’s knowledge, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan, which, if
decided adversely to any Borrower or Guarantor, would have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has had, or could reasonably be expected
to have, a Material Adverse Effect. 
  
 (c) Except as set forth in
Schedule 8.9 hereto, (i) no ERISA Event has occurred or is reasonably expected to occur that would result in a liability of a Borrower in excess of $500,000 or otherwise have a Material Adverse Effect; (ii) based on the latest valuation of
each Pension Plan and on the actuarial methods and assumptions employed for such valuation (determined in accordance with the assumptions used for funding such Pension Plan pursuant to Section 412 of the Code), the aggregate current value of
accumulated benefit liabilities of such Pension Plan under Section 4001(a)(16) of ERISA does not exceed the aggregate current value of the assets of such Pension Plan by an amount in excess of $500,000; (iii) each Borrower and Guarantor,
and their ERISA Affiliates, have not incurred and do not reasonably expect to incur, any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA) in excess of $500,000;
(iv) each Borrower and Guarantor, and their ERISA Affiliates, have not incurred and do not reasonably expect to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in
such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan in excess of $500,000; and (v) each Borrower and Guarantor, and their ERISA Affiliates, have not engaged in a transaction that would be subject to
Section 4069 or 4212(c) of ERISA. 
  
 8.10 Bank
Accounts. All of the deposit accounts, investment accounts or other accounts in the name of or used by any Borrower or Guarantor maintained at any bank or other financial institution are set forth on Schedule 8.10 to the Information Certificate,
subject to the right of each Borrower and Guarantor to establish new accounts in accordance with Section 5.2 hereof. 
  
 8.11 Intellectual Property. Each Borrower and Guarantor owns or licenses or otherwise has the right to use all Intellectual Property necessary for
the operation of its business as presently conducted or proposed to be conducted. As of the date hereof, Borrowers and 

  

 65 

 
Guarantors do not have any Intellectual Property registered, or subject to pending applications, in the United States Patent and Trademark Office or any
similar office or agency in the United States, any State thereof, any political subdivision thereof or in any other country, other than those described in Schedule 8.11 to the Information Certificate and has not granted any licenses with respect
thereto other than as set forth in Schedule 8.11 to the Information Certificate. No event has occurred which permits or would permit after notice or passage of time or both, the revocation, suspension or termination of such rights. To the best of
any Borrower’s and Guarantor’s knowledge, no slogan or other advertising device, product, process, method, substance or other Intellectual Property or goods bearing or using any Intellectual Property presently contemplated to be sold by or
employed by any Borrower or Guarantor infringes any patent, trademark, servicemark, tradename, copyright, license or other Intellectual Property owned by any other Person presently and no claim or litigation is pending or threatened against or
affecting any Borrower or Guarantor contesting its right to sell or use any such Intellectual Property. Schedule 8.11 to the Information Certificate sets forth all of the agreements or other arrangements of each Borrower and Guarantor pursuant to
which such Borrower or Guarantor has a license or other right to use any trademarks, logos, designs, representations or other Intellectual Property owned by another person as in effect on the date hereof and the dates of the expiration of such
agreements or other arrangements of such Borrower or Guarantor as in effect on the date hereof (collectively, together with such agreements or other arrangements as may be entered into by any Borrower or Guarantor after the date hereof,
collectively, the “License Agreements” and individually, a “License Agreement”). No trademark, servicemark, copyright or other Intellectual Property at any time used by any Borrower or Guarantor which is owned by another person,
or owned by such Borrower or Guarantor subject to any security interest, lien, collateral assignment, pledge or other encumbrance in favor of any person other than Agent, is affixed to any Eligible Inventory, except (a) to the extent permitted
under the term of the license agreements listed on Schedule 8.11 to the Information Certificate and (b) to the extent the sale of Inventory to which such Intellectual Property is affixed is permitted to be sold by such Borrower or Guarantor
under applicable law (including the United States Copyright Act of 1976). 
  
 8.12 Subsidiaries; Affiliates; Capitalization; Solvency. 
  
 (a) Each Borrower and Guarantor does not have any direct or indirect Subsidiaries or Affiliates and is not engaged in any joint venture or partnership
except as set forth in Schedule 8.12 to the Information Certificate. 
  
 (b) Except as set forth in Schedule 8.12 to the Information Certificate, each Borrower and Guarantor is the record and beneficial owner of all of the issued and outstanding shares of Capital Stock of each of the Subsidiaries listed on
Schedule 8.12 to the Information Certificate as being owned by such Borrower or Guarantor and there are no proxies, irrevocable or otherwise, with respect to such shares and no equity securities of any of the Subsidiaries are or may become required
to be issued by reason of any options, warrants, rights to subscribe to, calls or commitments of any kind or nature and there are no contracts, commitments, understandings or arrangements by which any Subsidiary is or may become bound to issue
additional shares of its Capital Stock or securities convertible into or exchangeable for such shares. 
  
 (c) The issued and outstanding shares of Capital Stock of each Borrower (other than Parent) and Guarantor are directly and beneficially owned and held by
the persons indicated in 

  

 66 

 
the Information Certificate, and in each case all of such shares have been duly authorized and are fully paid and non-assessable, free and clear of all
claims, liens, pledges and encumbrances of any kind, except as disclosed in writing to Agent prior to the date hereof. 
  
 (d) Each Borrower and Guarantor is Solvent and will continue to be Solvent after the creation of the Obligations, the security interests of Agent and the
other transaction contemplated hereunder. 
  
 (e) Merix B.V. does
not own any assets or have any liabilities and is not engaged in any business or commercial activities, does not own any assets with a book value of more than $25,000 in the aggregate and is not obligated or liable, directly or indirectly,
contingently or otherwise, in respect of any Indebtedness or other obligations. 
  
 8.13 Labor Disputes. 
  
 (a) Set forth on Schedule 8.13 to the Information Certificate is a list (including dates of termination) of all collective bargaining or similar agreements between or applicable to each Borrower and Guarantor and any union, labor
organization or other bargaining agent in respect of the employees of any Borrower or Guarantor on the date hereof. 
  
 (b) There is (i) no significant unfair labor practice complaint pending against any Borrower or Guarantor or, to the best of any Borrower’s or
Guarantor’s knowledge, threatened against it, before the National Labor Relations Board, and no significant grievance or significant arbitration proceeding arising out of or under any collective bargaining agreement is pending on the date
hereof against any Borrower or Guarantor or, to best of any Borrower’s or Guarantor’s knowledge, threatened against it, and (ii) no significant strike, labor dispute, slowdown or stoppage is pending against any Borrower or Guarantor
or, to the best of any Borrower’s or Guarantor’s knowledge, threatened against any Borrower or Guarantor. 
  
 8.14 Restrictions on Subsidiaries. Except for restrictions contained in this Agreement or any other agreement with respect to Indebtedness of any
Borrower or Guarantor permitted hereunder as in effect on the date hereof, there are no contractual or consensual restrictions on any Borrower or Guarantor or any of its Domestic Subsidiaries which prohibit or otherwise restrict (a) the
transfer of cash or other assets (i) between any Borrower or Guarantor and any of its or their Domestic Subsidiaries or (ii) between any Domestic Subsidiaries of any Borrower or Guarantor or (b) the ability of any Borrower or
Guarantor or any of its or their Domestic Subsidiaries to incur Indebtedness or grant security interests to Agent or any Lender in the Collateral. 
  
 8.15 Material Contracts. Schedule 8.15 to the Information Certificate sets forth all Material Contracts to which any Borrower or Guarantor is a
party or is bound as of the date hereof. Borrowers and Guarantors have delivered true, correct and complete copies of such Material Contracts to Agent on or before the date hereof. Borrowers and Guarantors are not in breach or in default in any
material respect of or under any Material Contract and have not received any notice of the intention of any other party thereto to terminate any Material Contract. 
  

 67 

 8.16 Payable Practices. Each Borrower and Guarantor has not made any material change in the
historical accounts payable practices from those in effect immediately prior to the date hereof. 
  
 8.17 Accuracy and Completeness of Information. All information furnished by or on behalf of any Borrower or Guarantor in writing to Agent or any
Lender in connection with this Agreement or any of the other Financing Agreements or any transaction contemplated hereby or thereby, including all information on the Information Certificate is true and correct in all material respects on the date as
of which such information is dated or certified and does not omit any material fact necessary in order to make such information not misleading. No event or circumstance has occurred which has had or could reasonably be expected to have a Material
Adverse Affect, which has not been fully and accurately disclosed to Agent in writing prior to the date hereof. 
  
 8.18 Survival of Warranties; Cumulative. All representations and warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed to have been made again to Agent and Lenders on the date of each additional borrowing or other credit accommodation hereunder and shall be conclusively presumed to have
been relied on by Agent and Lenders regardless of any investigation made or information possessed by Agent or any Lender The representations and warranties set forth herein shall be cumulative and in addition to any other representations or
warranties which any Borrower or Guarantor shall now or hereafter give, or cause to be given, to Agent or any Lender. 
  
 SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS 
  
 9.1 Maintenance of Existence. 
  
 (a) Each Borrower and Guarantor shall at all times preserve, renew and keep in full force and effect its corporate existence and rights and franchises
with respect thereto. Each Borrower and Guarantor shall maintain in full force and effect all material licenses, trademarks, tradenames, approvals, authorizations, leases, contracts and Permits necessary to carry on the business as presently or
proposed to be conducted, except as otherwise permitted in Section 9.7 hereto. 
  
 (b) No Borrower or Guarantor shall change its name unless each of the following conditions is satisfied: (i) Agent shall have received not less than ten (10) days prior written notice from Administrative
Borrower of such proposed change in its corporate name, which notice shall accurately set forth the new name; and (ii) Agent shall have received a copy of the amendment to the Certificate of Incorporation of such Borrower or Guarantor providing
for the name change certified by the Secretary of State of the jurisdiction of incorporation or organization of such Borrower or Guarantor as soon as it is available. 
  
 (c) No Borrower or Guarantor shall change its chief executive office or its mailing address or organizational identification
number (or if it does not have one, shall not acquire one) unless Agent shall have received not less than ten (10) Business Days’ prior written notice from Administrative Borrower of such proposed change, which notice shall set forth such
information 

  

 68 

 
with respect thereto as Agent may require and Agent shall have received such agreements as Agent may reasonably require in connection therewith. No Borrower
or Guarantor shall change its type of organization, jurisdiction of organization or other legal structure. 
  
 9.2 New Collateral Locations. Each Borrower and Guarantor may only open any new location within the continental United States provided such
Borrower or Guarantor gives Agent ten (10) days prior written notice of the intended opening of any such new location, except, that, Borrowers and Guarantors shall not be required to give such prior written notice of a new location of Inventory
that is owned and operated by a third party (including any processor or customer pursuant to any consignment arrangement) so long as: (a) the aggregate amount of all of the Inventory at locations for which Agent has not received such notice
does not exceed $1,000,000 prior to an Inventory Availability Date and $250,000 after an Inventory Availability Date; (b) no Default or Event of Default exists or has occurred and is continuing; and (c) Borrowers and Guarantors shall
include the name of the owner and operator and address of such location with the compliance certificate to be delivered under Section 9.6(a)(i) hereof. Each Borrower and Guarantor shall execute and deliver, or cause to be executed and
delivered, to Agent such agreements, documents, and instruments as Agent may deem reasonably necessary or desirable to protect its interests in the Collateral at such location. 
  
 9.3 Compliance with Laws, Regulations, Etc. 
  
 (a) Each Borrower and Guarantor shall, and shall cause any Domestic Subsidiary to, at all times, comply with all laws,
rules, regulations, licenses, approvals, orders and other Permits applicable to it and duly observe all requirements of any foreign, Federal, State or local Governmental Authority where the failure to do so has or could reasonably be expected to
have a Material Adverse Effect. 
  
 (b) Borrowers and Guarantors
shall give written notice to Agent immediately upon any Borrower’s or Guarantor’s receipt of any notice of, or any Borrower’s or Guarantor’s otherwise obtaining knowledge of, (i) the occurrence of any event involving the
release, spill or discharge, threatened or actual, of any Hazardous Material or (ii) any investigation, proceeding, complaint, order, directive, claims, citation or notice with respect to: (A) any non-compliance with or violation of any
Environmental Law by any Borrower or Guarantor or (B) the release, spill or discharge, threatened or actual, of any Hazardous Material other than in the ordinary course of business and other than as permitted under any applicable Environmental
Law. Copies of all environmental surveys, audits, assessments, feasibility studies and results of remedial investigations shall be promptly furnished, or caused to be furnished, by such Borrower or Guarantor to Agent. Each Borrower and Guarantor
shall take prompt action to respond to any material non-compliance with any of the Environmental Laws and shall regularly report to Agent on such response. 
  
 (c) Without limiting the generality of the foregoing, whenever Agent reasonably determines that there is non-compliance, or any condition which requires
any action by or on behalf of any Borrower or Guarantor in order to avoid any non compliance, with any Environmental Law, Borrowers shall, at Agent’s request and Borrowers’ expense: (i) cause an independent environmental engineer
reasonably acceptable to Agent to conduct such tests of the site where non-compliance or alleged non compliance with such Environmental Laws has 

  

 69 

 
occurred as to such non-compliance and prepare and deliver to Agent a report as to such non-compliance setting forth the results of such tests, a proposed
plan for responding to any environmental problems described therein, and an estimate of the costs thereof and (ii) provide to Agent a supplemental report of such engineer whenever the scope of such non-compliance, or such Borrower’s or
Guarantor’s response thereto or the estimated costs thereof, shall change in any material respect. 
  
 (d) Each Borrower and Guarantor shall indemnify and hold harmless Agent and Lenders and their respective directors, officers, employees, agents, invitees,
representatives, successors and assigns, from and against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees and expenses) directly or indirectly arising out of or attributable to the
use, generation, manufacture, reproduction, storage, release, threatened release, spill, discharge, disposal or presence of a Hazardous Material, including the costs of any required or necessary repair, cleanup or other remedial work with respect to
any property of any Borrower or Guarantor and the preparation and implementation of any closure, remedial or other required plans. All representations, warranties, covenants and indemnifications in this Section 9.3 shall survive the payment of
the Obligations and the termination of this Agreement. 
  
 9.4
Payment of Taxes and Claims. Each Borrower and Guarantor shall, and shall cause any Domestic Subsidiary to, duly pay and discharge all taxes, assessments, contributions and governmental charges upon or against it or its properties or assets,
except for taxes the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, Guarantor or Domestic Subsidiary, as the case may be, and with respect to which adequate reserves
have been set aside on its books to the extent required by GAAP. 
  
 9.5 Insurance. 
  
 (a) Each Borrower and
Guarantor shall, and shall cause any Domestic Subsidiary to, at all times, maintain with financially sound and reputable insurers insurance with respect to the Collateral against loss or damage and all other insurance of the kinds and in the amounts
customarily insured against or carried by corporations of established reputation engaged in the same or similar businesses and similarly situated. Said policies of insurance shall be reasonably satisfactory to Agent as to form, amount and insurer.
Borrowers and Guarantors shall furnish certificates, policies or endorsements to Agent as Agent shall reasonably require as proof of such insurance, and, if any Borrower or Guarantor fails to do so, Agent is authorized, but not required, to obtain
such insurance at the expense of Borrowers. All such policies shall provide for at least thirty (30) days prior written notice to Agent of any cancellation or reduction of coverage and that Agent may act as attorney for each Borrower and
Guarantor in obtaining, and at any time an Event of Default exists or has occurred and is continuing, adjusting, settling, amending and canceling such insurance. Borrowers and Guarantors shall cause Agent to be named as a loss payee and an
additional insured (but without any liability for any premiums) under such insurance policies and Borrowers and Guarantors shall obtain non-contributory lender’s loss payable endorsements to all insurance policies in form and substance
satisfactory to Agent. Such lender’s loss payable endorsements shall specify that the proceeds of such insurance shall be payable to Agent as its interests may appear and further specify that Agent and Lenders shall be 

  

 70 

 
paid regardless of any act or omission by any Borrower, Guarantor or any of its or their Affiliates. Without limiting any other rights of Agent or Lenders,
subject to Section 9.5(b) below, any insurance proceeds received by Agent at any time may be applied to payment of the Obligations, whether or not then due, in any order and in such manner as Agent may determine. 
  
 (b) Notwithstanding anything to the contrary contained herein, if any of the
Equipment or any portion of any building, structure or other improvement on any Real Property is lost, physically damaged or destroyed, upon the written request of Administrative Borrower, 
  
 (i) if the amount of the Net Cash Proceeds from insurance received by Agent
pursuant to this Section 9.5 based on a claim by a Borrower as a result of such loss, damage or destruction is equal to or less than $500,000, Agent shall release such Net Cash Proceeds then in the possession and control of Agent at the time of
such request, provided, that, no Default or Event of Default shall exist or have occurred and be continuing, 
  
 (ii) if the amount of the Net Cash Proceeds from insurance received by Agent pursuant to this Section 9.5 based on a claim by a Borrower as a result
of such loss, damage or destruction is greater than $500,000 and less than $4,000,000, Agent shall from time to time release such Net Cash Proceeds then in the possession and control of Agent at the time of such request, provided,
that, each of the following conditions is satisfied: (A) no Default or Event of Default shall exist or have occurred and be continuing, (B) the sum of the amount of the insurance proceeds (together with any deductible to be
satisfied by any Borrower or Guarantor) plus the Qualified Cash of Borrowers at the time of the receipt of the initial insurance proceeds are sufficient, in Agent’s good faith determination, to effect such repair, refurbishing or replacement in
a satisfactory manner (provided, that, Qualified Cash will only be included for this purpose if the Excess Availability, without regard to Qualified Cash, is equal to or greater than $10,000,000 and to the extent that the amounts of Qualified Cash
to be used for such purpose shall be set aside in a manner satisfactory to Agent to be available solely for the costs and expenses of such repair, refurbishing or replacement), (C) such proceeds shall be used first to repair, refurbish or
replace the Collateral so lost, damaged or destroyed (free and clear of any security interests, liens, claims or encumbrances), (D) the insurance carrier shall have waived any right of subrogation against Borrowers and Guarantors under its
policy, (E) such repair, refurbishing or replacement shall be commenced as soon as reasonably practicable and shall be diligently pursued to satisfactory completion, (F) the insurance proceeds shall be released by Agent to Administrative
Borrower from time to time as needed and/or at Agent’s option, released by Agent directly to the contractor, subcontractor, materialmen, laborers, engineers, architects and other persons rendering services or materials to repair, refurbish or
replace such Equipment, building, structure or improvements, and (G) the repair, refurbishing or replacement to which the proceeds are applied shall cause the Equipment, building, structure or improvement so lost, damaged, destroyed to be of at
least equal value and substantially the same character as prior to such loss, damage or destruction. 
  
 (c) Notwithstanding anything to the contrary in Section 9.5(b), at any time an Event of Default exists or has occurred and is continuing or as to any
insurance proceeds in excess of those used to repair, refurbish or replace any Collateral, at its option, Agent may apply such insurance proceeds to payment of the 

  

 71 

 
Obligations, whether or not then due, in any order and in such manner as Agent may determine or hold such proceeds as cash collateral for the Obligations.
After the repair, refurbishing or replacement of any Equipment, building, structure or improvement as provided in Section 9.5(b), without limiting any other rights of Agent or Lenders, at Agent’s option, Borrowers shall, at their expense,
deliver or cause to be delivered to Agent written appraisals as to such Equipment, building, structure or improvement in form, scope and methodology acceptable to Agent and by an appraiser acceptable to Agent, addressed to Agent and Lenders and upon
which Agent and Lenders are expressly permitted to rely (which appraisal shall not be considered for purposes of any limitations on appraisals provided for herein, but is be in addition thereto). 
  
 9.6 Financial Statements and Other Information. 
  
 (a) Each Borrower and Guarantor shall, and shall cause each Domestic
Subsidiary to, keep proper books and records in which true and complete entries shall be made of all dealings or transactions of or in relation to the Collateral and the business of such Borrower, Guarantor and its Subsidiaries in accordance with
GAAP. Borrowers and Guarantors shall promptly furnish to Agent and Lenders all such financial and other information as Agent shall reasonably request relating to the Collateral and the assets, business and operations of Borrowers and Guarantors, and
Borrower shall notify the auditors and accountants of Borrowers and Guarantors that Agent is authorized to obtain such information directly from them. Without limiting the foregoing, Borrowers shall furnish or cause to be furnished to Agent, the
following: 
  
 (i) within thirty (30) days after the end of
each fiscal month, monthly unaudited balance sheets, statements of income and loss and statements of cash flow of Parent’s consolidated U.S. operations (on a consolidating basis) in accordance with GAAP, subject to normal quarter-end
adjustments and accompanied by a compliance certificate substantially in the form of Exhibit D hereto, along with a schedule in form reasonably satisfactory to Agent of the calculations used in determining (A) whether Borrowers and Guarantors
were in compliance with the covenants set forth in Section 9.17 of this Agreement for such fiscal month and (B) the Debt Ratio (as defined in the Merix 6.5% Debenture), in each case, as of the end of such fiscal month, 
  
 (ii) within forty-five (45) days after the end of each of the first
three fiscal quarters of each fiscal year, a copy of Parent’s Form 10-Q for such quarter, together with Parent’s quarterly balance sheets, statements of income and loss and statements of cash flow for Parent’s consolidated U.S.
operations, with comparisons to corresponding amounts for the U.S. operations in the financial plan approved by the Board of Directors of Parent for such period, and 
  
 (iii) within ninety (90) days after the end of each fiscal year, a copy of Parent’s Form 10-K which shall include
consolidated financial statements audited by, and the unqualified opinion of, a nationally recognized firm of certified public accountants, together with a copy of the annual consolidating trial balances which include annual unaudited balance
sheets, statements of income and loss and statements of cash flow for Parent’s consolidated U.S. operations, and 
  
 (iv) at such time as available, but in no event later than sixty (60) days after the end of each two (2) consecutive fiscal quarter period
(commencing with the third and fourth fiscal quarters of 2006 of Borrowers), the semi-annual financial plans approved by the Board of Directors of Parent prepared and presented by fiscal quarter in a manner consistent with the current practices of
Parent as of the date hereof. 
  

 72 

 (b) Borrowers and Guarantors shall promptly notify Agent in writing of the details of (i) any loss,
damage, investigation, action, suit, proceeding or claim relating to Collateral having a value of more than $250,000 or which if adversely determined would result in any material adverse change in any Borrower’s or Guarantor’s business,
properties, assets, goodwill or condition, financial or otherwise, (ii) any Material Contract being terminated or amended or any new Material Contract entered into (in which event Borrowers and Guarantors shall provide Agent with a copy of such
Material Contract), (iii) any order, judgment or decree in excess of $250,000 shall have been entered against any Borrower or Guarantor any of its or their properties or assets, (iv) any notification of a material violation of laws or
regulations received by any Borrower or Guarantor, (v) any ERISA Event, and (vi) the occurrence of any Default or Event of Default. 
  
 (c) Promptly after the sending or filing thereof, Borrowers shall notify Agent that any of the following have been sent or filed, and to the extent are
not then publicly available by electronic means to Agent shall send to Agent copies of (i) all reports which Parent or any of its Subsidiaries sends to its security holders generally, (ii) all reports and registration statements which
Parent or any of its Subsidiaries files with the Securities Exchange Commission, any national or foreign securities exchange or the National Association of Securities Dealers, Inc., and such other reports as Agent may hereafter specifically identify
to Administrative Borrower that Agent will require be provided to Agent, (iii) all press releases and (iv) all other statements concerning material changes or developments in the business of a Borrower or Guarantor made available by any
Borrower or Guarantor to the public. 
  
 (d) Borrowers and
Guarantors shall furnish or cause to be furnished to Agent such budgets, forecasts, projections and other information respecting the Collateral and the business of Borrowers and Guarantors, as Agent may, from time to time, reasonably request. Agent
is hereby authorized to deliver a copy of any financial statement or any other information relating to the business of Borrowers and Guarantors to any court or other Governmental Authority or to any Lender or Participant or prospective Lender or
Participant or any Affiliate of any Lender or Participant. Each Borrower and Guarantor hereby irrevocably authorizes and directs all accountants or auditors to deliver to Agent, at Borrowers’ expense, copies of the financial statements of any
Borrower and Guarantor and any reports or management letters prepared by such accountants or auditors on behalf of any Borrower or Guarantor and to disclose to Agent and Lenders such information as they may have regarding the business of any
Borrower and Guarantor. Any documents, schedules, invoices or other papers delivered to Agent or any Lender may be destroyed or otherwise disposed of by Agent or such Lender one (1) year after the same are delivered to Agent or such Lender,
except as otherwise designated by Administrative Borrower to Agent or such Lender in writing. 
  
 9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or indirectly, 
  

 73 

 (a) merge into or with or consolidate with any other Person or permit any other Person to merge into or
with or consolidate with it, except: 
  
 (i) any Domestic
Subsidiary (other than a Borrower) may merge with and into or consolidate with any other Domestic Subsidiary of Parent (other than a Borrower), provided, that, each of the following conditions is satisfied as determined by Agent:
(A) Agent shall have received not less than ten (10) Business Days’ prior written notice of the intention of such Domestic Subsidiaries to so merge or consolidate, which notice shall set forth in reasonable detail satisfactory to
Agent, the persons that are merging or consolidating, which person will be the surviving entity, the locations of the assets of the persons that are merging or consolidating, and the material agreements and documents relating to such merger or
consolidation, (B) Agent shall have received such other information with respect to such merger or consolidation as Agent may reasonably request, (C) as of the effective date of the merger or consolidation and after giving effect thereto,
no Default or Event of Default shall exist or have occurred and be continuing, (D) Agent shall have received, true, correct and complete copies of all agreements, documents and instruments relating to such merger or consolidation, including,
but not limited to, the certificate or certificates of merger to be filed with each appropriate Secretary of State (with a copy as filed promptly after such filing), and (E) the surviving corporation shall expressly confirm, ratify and assume
the Obligations and the Financing Agreements to which it is a party in writing, in form and substance satisfactory to Agent, and Borrowers and Guarantors shall execute and deliver such other agreements, documents and instruments as Agent may request
in connection therewith, 
  
 (ii) any Foreign Subsidiary may
merge or consolidate with and into any other Foreign Subsidiary or any other Person, provided, that, (A) Agent shall have received prompt written notice of the intention of such Foreign Subsidiary to so merge or consolidate, which
notice shall set forth in reasonable detail, the Foreign Subsidiary that is merging or consolidating, the person with whom such Foreign Subsidiary is merging or consolidating and the material agreements and documents relating to such merger or
consolidation, (B) a Foreign Subsidiary shall be the surviving entity of such merger or consolidation and the conditions set forth in Section 9.10(i) shall be satisfied, and (C) in no event shall any Borrower or Guarantor make, or be
required to make, any payment or incur any obligation or liability in connection with such merger or consolidation or take any other action which is otherwise prohibited hereunder; or 
  
 (b) sell, issue, assign, lease, license, transfer, abandon or otherwise dispose of any Capital Stock or Indebtedness to any
other Person or any of its assets to any other Person, except for 
  
 (i) sales of Inventory in the ordinary course of business, 
  
 (ii) the sale or other disposition of Equipment (including worn-out or obsolete Equipment or Equipment no longer used or useful in the business of any Borrower or Guarantor) so long as such sales or other dispositions do not involve
Equipment having an aggregate fair market value in excess of $100,000 for all such Equipment disposed of in any fiscal year of Borrowers or such greater amount as Agent may otherwise agree, 
  
 (iii) the sale or other disposition of Equipment to any Foreign Subsidiary,
provided, that, each of the following conditions is satisfied: (A) each such sale or other disposition shall be in a bona fide arms’ length transaction, (B) such sales or other dispositions do not involve Equipment
having an aggregate fair market value in excess of $1,000,000 for all 

  

 74 

 
such Equipment sold or disposed of in any fiscal year of Borrowers or such greater amount as Agent may otherwise agree, (C) to the extent that such
Equipment so sold or otherwise disposed of has been included in any appraisal of Equipment received by Agent, Agent shall have received Net Cash Proceeds from the Foreign Subsidiary in respect of such sale or other disposition not less than the
amount equal to: (1) the net orderly liquidation value of such Equipment set forth in the final written appraisal of the Equipment received by Agent prior to the date hereof minus (2) the amount equal to: (aa) the fraction, the numerator
of which is the net orderly liquidation value of such Equipment as set forth in the final written appraisal of the Equipment received by Agent prior to the date hereof and the denominator of which is $26,381,000 multiplied by (bb) the aggregate
amount of the payments received by Agent in respect of the Term Loans as of the date of such sale or other disposition; and such Net Cash Proceeds shall be applied to the prepayment of the installments of principal of the Term Loans in the inverse
order of maturity, and any such Net Cash Proceeds in excess of such amount shall be applied to the Revolving Loans, and (D) as of the date of such sale or other disposition and after giving effect thereto, no Default or Event of Default shall
exist or have occurred and be continuing, 
  
 (iv) the sale by
Parent of its right, title and interest in and to its fee simple interest in the Real Property of Parent located at 3700 24th Avenue, Forest Grove, Oregon; provided, that, (A) if such sale occurs at any time on and after a Cash Dominion Event, (1) Agent shall have received all of the Net Cash Proceeds in respect of the sale of such
Real Property to be received by Parent, for application to the Revolving Loans, (2) such sale shall be in a bona fide arms’ length transaction with a person that is not an Affiliate on commercially reasonable prices and terms,
(3) Agent shall have received a complete copy of the purchase agreement with respect to such Real Property, an executed copy of the Deed by Parent transferring such Real Property and a copy of the Closing Statement executed by Parent and the
purchaser of such Real Property, and (4) as of the date of any such sale and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, and (B) notwithstanding anything to the contrary
contained herein, in the event that such Real Property of Parent has not been sold prior to May 31, 2006, at the option of Agent, Parent shall execute and deliver to Agent a modification and spreader of the Line of Credit Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing, by Parent in favor of Agent with respect to such Real Property and related assets of Parent located on such Real Property, in form and substance satisfactory to Agent and a UCC-1
financing statement to be filed in the real estate records of Washington County, Oregon, together with environmental assessments of such property conducted by an independent environmental engineering firm acceptable to Agent, and in form, scope and
methodology satisfactory to Agent, the results of which shall be satisfactory to Agent and a valid and effective title insurance policy, in form and substance satisfactory to Agent issued by a company and agent acceptable to Agent; 
  
 (v) the sale by Parent of its right, title and interest in and to its fee
simple interest in forty-five and seven-tenths (45.7) acres of the unimproved portion of the Real Property subject to the Mortgage, on terms and conditions satisfactory to Agent and Parent; provided, that, (A) Agent shall
have received evidence that such portion of the Real Property to be sold has been legally subdivided, including a subdivision endorsement issued by the company issuing the title insurance policy pursuant to Section 4.1(l) hereof, (B) Agent
shall have received all of the Net Cash Proceeds in respect of the sale of such portion of the Real Property subject to the Mortgage to be received by Parent, which Net Cash Proceeds shall in no event be less than 

  

 75 

 
the amount equal to: (1) $4,800,000 minus (2) the amount equal to: (aa) the fraction, the numerator of which $4,800,000 and the denominator of
which is $26,381,000 multiplied by (bb) the aggregate amount of the payments received by Agent in respect of the Term Loans as of the date of such sale or other disposition; and such Net Cash Proceeds shall be applied to the prepayment of the
installments of principal of the Term Loans in the inverse order of maturity, and any such Net Cash Proceeds in excess of such amount shall be applied to the Revolving Loans, (C) Agent shall have received (1) a complete copy of the
purchase agreement with respect to such portion of the Real Property subject to the Mortgage, (2) an executed copy of the Deed by Parent transferring such portion of the Real Property subject to the Mortgage and (3) a copy of the Closing
Statement executed by Parent and the purchaser of such portion of the Real Property subject to the Mortgage, and (D) on the date of such sale and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be
continuing; 
  
 (vi) the issuance and sale by any Borrower or
Guarantor of Capital Stock of such Borrower or Guarantor after the date hereof; provided, that, (A) Agent shall have received not less than ten (10) Business Days’ prior written notice of such issuance and sale by such
Borrower or Guarantor, which notice shall specify the parties to whom such shares are to be sold, the terms of such sale, the total amount which it is anticipated will be realized from the issuance and sale of such stock and the net cash proceeds
which it is anticipated will be received by such Borrower or Guarantor from such sale, (B) such Borrower or Guarantor shall not be required to pay any cash dividends or repurchase or redeem such Capital Stock or make any other payments in
respect thereof, except as otherwise permitted in Section 9.11 hereof, (C) the terms of such Capital Stock, and the terms and conditions of the purchase and sale thereof, shall not include any terms that include any limitation on the right
of any Borrower to request or receive Loans or Letters of Credit or the right of any Borrower and Guarantor to amend or modify any of the terms and conditions of this Agreement or any of the other Financing Agreements or otherwise in any way relate
to or affect the arrangements of Borrowers and Guarantors with Agent and Lenders or are more restrictive or burdensome to any Borrower or Guarantor than the terms of any Capital Stock in effect on the date hereof, (D) except as Agent may
otherwise agree in writing, if as of the date of such issuance and sale or after giving effect thereto, a Cash Dominion Event has occurred and is continuing, all of the proceeds of the sale and issuance of such Capital Stock shall be paid to Agent
for application to the Obligations in such order and manner as Agent may determine; 
  
 (vii) the issuance of Capital Stock of any Borrower or Guarantor consisting of common stock pursuant to an employee stock option or grant or similar equity plan or 401(k) plans of such Borrower or Guarantor for the
benefit of its employees, directors and consultants, provided, that, in no event shall such Borrower or Guarantor be required to issue, or shall such Borrower or Guarantor issue, Capital Stock pursuant to such stock plans or 401(k)
plans which would result in a Change of Control or other Event of Default, 
  
 (viii) the grant by any Borrower or Guarantor of a non-exclusive license or an exclusive license after the date hereof to any Foreign Subsidiary for the use of any Intellectual Property consisting of trademarks or
patents owned by any Borrower or Guarantor; provided, that, as to any such license, each of the following conditions is satisfied: (A) within ten (10) Business Days after the end of each month, or at any time an Event of
Default exists or has occurred and is continuing more frequently as Agent may request, Borrowers and Guarantors 

  

 76 

 
shall provide to Agent a list of the licenses, if any, entered into during the immediately preceding month (or such shorter period), together with such other
information with respect thereto as Agent may reasonably request, (B) each such license shall be in a bona fide arms’-length transaction, (C) such license shall not include any limitations or restrictions on the use of such trademarks
or patents that would adversely affect the ability of Agent to use such trademarks or patents in order to sell or otherwise realize upon any of the Inventory, or if such license does include any such limitations or restrictions, any Inventory
bearing the trademark or using the patent that is subject to such license or for which such trademark or patent is used in the manufacture, distribution or sale thereof shall cease to be Eligible Inventory to the extent that such Inventory can no
longer be sold using such trademark or patent or is not reasonably anticipated to be sold during the remaining period that any Borrower or Guarantor may use such trademark prior to the termination of its rights to do so in accordance with the terms
of the applicable agreement, (D) upon Agent’s request, Borrowers and Guarantors shall deliver to Agent true, correct and complete copies of such agreements, documents and instruments in connection with such license as Agent may specify,
and (E) at the time of the grant of the license and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, 
  
 (c) wind up, liquidate or dissolve except that (i) any Guarantor wind up, liquidate and dissolve, provided,
that, each of the following conditions is satisfied, (A) the winding up, liquidation and dissolution of such Guarantor shall not violate any law or any order or decree of any court or other Governmental Authority in any material respect
and shall not conflict with or result in the breach of, or constitute a default under, any indenture, mortgage, deed of trust, or any other agreement or instrument to which any Borrower or Guarantor is a party or may be bound, (B) such winding
up, liquidation or dissolution shall be done in accordance with the requirements of all applicable laws and regulations, (C) effective upon such winding up, liquidation or dissolution, all of the assets and properties of such Guarantor shall be
duly and validly transferred and assigned to a Borrower, free and clear of any liens, restrictions or encumbrances other than Permitted Liens and the security interest and liens of Agent (and Agent shall have received such evidence thereof as Agent
may require) and Agent shall have received such deeds, assignments or other agreements as Agent may request to evidence and confirm the transfer of such assets of such Guarantor to a Borrower, (D) Agent shall have received all documents and
agreements that any Borrower or Guarantor has filed with any Governmental Authority or as are otherwise required to effectuate such winding up, liquidation or dissolution, (E) no Borrower or Guarantor shall assume any Indebtedness, obligations
or liabilities as a result of such winding up, liquidation or dissolution, or otherwise become liable in respect of any obligations or liabilities of the entity that is winding up, liquidating or dissolving, unless such Indebtedness is otherwise
expressly permitted hereunder, (F) Agent shall have received not less than ten (10) Business Days prior written notice of the intention of such Guarantor to wind up, liquidate or dissolve, and (G) as of the date of such winding up,
liquidation or dissolution and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing and (ii) any Foreign Subsidiary may wind up, liquidate and dissolve, provided, that,
(A) Agent shall have received not less than ten (10) Business Days prior written notice of the intention of such Foreign Subsidiary to wind up, liquidate or dissolve, and (B) as of the date of such winding up, liquidation or
dissolution and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing; or 
  

 77 

 (d) agree to do any of the foregoing. 
  
 9.8 Encumbrances. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, create, incur,
assume or suffer to exist any security interest, mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on any of its assets or properties, including the Collateral, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any security interest or lien with respect to any such assets or properties, except the following (collectively, “Permitted Liens”): 
  
 (a) the security interests and liens of Agent for itself and the benefit of
Secured Parties and the rights of setoff of Secured Parties provided for herein or under applicable law; 
  
 (b) liens securing the payment of taxes, assessments or other governmental charges or levies either not yet overdue or the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, or Guarantor or Domestic Subsidiary, as the case may be and with respect to which adequate reserves have been set aside on its books; 

 
 (c) non-consensual statutory liens (other than liens securing the payment
of taxes) arising in the ordinary course of such Borrower’s, Guarantor’s or Domestic Subsidiary’s business to the extent: (i) such liens secure Indebtedness which is not overdue or (ii) such liens secure Indebtedness
relating to claims or liabilities which are fully insured and being defended at the sole cost and expense and at the sole risk of the insurer or being contested in good faith by appropriate proceedings diligently pursued and available to such
Borrower, Guarantor or such Domestic Subsidiary, in each case prior to the commencement of foreclosure or other similar proceedings and with respect to which adequate reserves have been set aside on its books; 
  
 (d) zoning restrictions, easements, licenses, covenants and other
restrictions affecting the use of Real Property which do not interfere in any material respect with the use of such Real Property or ordinary conduct of the business of such Borrower, Guarantor or such Domestic Subsidiary as presently conducted
thereon or materially impair the value of the Real Property which may be subject thereto; 
  
 (e) purchase money security interests in Equipment (including Capital Leases) and purchase money mortgages on Real Property to secure Indebtedness permitted under Section 9.9(b) hereof; 
  
 (f) pledges and deposits of cash by any Borrower or Guarantor after the date
hereof in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security benefits consistent with the current practices of such Borrower or Guarantor as of the date hereof;

  
 (g) pledges and deposits of cash by any Borrower or Guarantor
after the date hereof to secure the performance of tenders, bids, leases, trade contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations in each case in the ordinary course of business consistent
with the current practices of such Borrower or Guarantor as of the date hereof; provided, that, in connection with any performance bonds issued by a surety or other person, the issuer of such bond shall have waived in writing any
rights in or to, or other interest in, any of the Collateral in an agreement, in form and substance satisfactory to Agent; 
  

 78 

 (h) liens arising from (i) operating leases and the precautionary UCC financing statement filings in
respect thereof and (ii) equipment or other materials which are not owned by any Borrower or Guarantor located on the premises of such Borrower or Guarantor (but not in connection with, or as part of, the financing thereof) from time to time in
the ordinary course of business and consistent with current practices of such Borrower or Guarantor and the precautionary UCC financing statement filings in respect thereof; 
  
 (i) judgments and other similar liens arising in connection with court proceedings that do not constitute an Event of
Default, provided, that, (i) such liens are being contested in good faith and by appropriate proceedings diligently pursued, (ii) adequate reserves or other appropriate provision, if any, as are required by GAAP have been
made therefor, (iii) a stay of enforcement of any such liens is in effect, and (iv) Agent may establish a Reserve with respect thereto; and 
  
 (j) the security interests and liens set forth on Schedule 8.4 to the Information Certificate. 
  
 9.9 Indebtedness. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, incur, create, assume, become or be liable in any manner with respect to, or permit to exist, any Indebtedness, or guarantee, assume, endorse, or otherwise become responsible for (directly or indirectly), the Indebtedness,
performance, obligations or dividends of any other Person, except: 
  
 (a) the Obligations; 
  
 (b) purchase money Indebtedness
(including Capital Leases) arising after the date hereof to the extent secured by purchase money security interests in Equipment (including Capital Leases) and purchase money mortgages on Real Property not to exceed $5,000,000 in the aggregate at
any time outstanding so long as such security interests and mortgages do not apply to any property of such Borrower, Guarantor or Domestic Subsidiary other than the Equipment or Real Property so acquired, and the Indebtedness secured thereby does
not exceed the cost of the Equipment or Real Property so acquired, as the case may be; 
  
 (c) guarantees by any Borrower or Guarantor of the Obligations of the other Borrowers or Guarantors in favor of Agent for the benefit of the Secured Parties 
  
 (d) the Indebtedness of any Borrower or Guarantor to any other Borrower or
Guarantor arising after the date hereof pursuant to loans by any Borrower or Guarantor permitted under Section 9.10(g) or the Indebtedness of any Borrower or Guarantor to any Foreign Subsidiary arising after the date hereof pursuant to loans by
any Foreign Subsidiary permitted under Section 9.10(h) hereof; 
  
 (e) Indebtedness of any Borrower or Guarantor entered into in the ordinary course of business pursuant to a Hedge Agreement; provided, that, (i) such arrangements are not for speculative purposes, (ii) such
Indebtedness shall be unsecured, except to the extent such 

  

 79 

 
Indebtedness constitutes part of the Obligations arising under or pursuant to Hedge Agreements with any Bank Product Provider that are secured under the
terms hereof or except to the extent secured by pledges or deposits of cash as permitted under Section 9.8 hereof and (iii) the terms and amounts of such Indebtedness shall be reasonably acceptable to Agent; 
  
 (f) Indebtedness of any Foreign Subsidiary arising after the date hereof,
provided, that, (i) as to any such Indebtedness, Borrower shall not be directly or indirectly liable (by virtue of Borrower being the primary obligor on, guarantor of, or otherwise liable in any respect of such Indebtedness), and
(ii) any default by a Foreign Subsidiary in respect of such Indebtedness shall not constitute a default in respect of any Indebtedness of a Borrower or Guarantor; 
  
 (g) unsecured Indebtedness of any Borrower or Guarantor arising after the date hereof to any third person (but not to any
other Borrower or Guarantor), provided, that, each of the following conditions is satisfied as determined by Agent: (i) such Indebtedness shall be on terms and conditions acceptable to Agent and shall be subject and subordinate in
right of payment to the right of Agent and Lenders to receive the prior indefeasible payment and satisfaction in full payment of all of the Obligations pursuant to the terms of an intercreditor agreement between Agent and such third party, in form
and substance satisfactory to Agent, (ii) Agent shall have received not less than ten (10) days prior written notice of the intention of such Borrower or Guarantor to incur such Indebtedness, which notice shall set forth in reasonable
detail satisfactory to Agent the amount of such Indebtedness, the person or persons to whom such Indebtedness will be owed, the interest rate, the schedule of repayments and maturity date with respect thereto and such other information as Agent may
request with respect thereto, (iii) Agent shall have received true, correct and complete copies of all agreements, documents and instruments evidencing or otherwise related to such Indebtedness, (iv) except as Agent may otherwise agree in
writing, on and after a Cash Dominion Event and for so long as the same is continuing, all of the proceeds of the loans or other accommodations giving rise to such Indebtedness shall be paid to Agent for application to the Obligations in such order
and manner as Agent may determine or at Agent’s option, to be held as cash collateral for the Obligations, (v) in no event shall the aggregate principal amount of such Indebtedness incurred during the term of this Agreement exceed
$500,000, (vi) such Borrower and Guarantor shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or any agreement, document or instrument related thereto, except, that, such
Borrower or Guarantor may, after prior written notice to Agent, amend, modify, alter or change the terms thereof so as to extend the maturity thereof, or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of
such Indebtedness (other than pursuant to payments thereof), or to reduce the interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or otherwise acquire such Indebtedness (except pursuant to regularly
scheduled payments permitted herein), or set aside or otherwise deposit or invest any sums for such purpose, and (vii) Borrowers and Guarantors shall furnish to Agent all notices or demands in connection with such Indebtedness either received
by any Borrower or Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be; 
  

 80 

 (h) Indebtedness of Parent evidenced by or arising under the Merix 6.5% Debenture (as in effect on the
date hereof), provided, that: 
  
 (i) the principal
amount of such Indebtedness shall be not more than $25,000,000 at any time, less the aggregate amount of all repayments, repurchases or redemptions thereof, whether optional or mandatory, plus interest thereon at the rate provided in the Merix 6.5%
Debenture as in effect on the date hereof, 
  
 (ii) Borrowers and
Guarantors shall not, directly or indirectly, make any payments of principal or interest in respect of such Indebtedness, except, that, (A) Parent may make regularly scheduled payments of principal and interest when due in
accordance with the terms of the Merix 6.5% Debenture (as in effect on the date hereof) and (B) Parent may prepay, redeem or retire such Indebtedness to the extent permitted under Section 9.9(h)(iv) below, 
  
 (iii) Borrowers and Guarantors shall not, directly or indirectly, amend,
modify, alter or change any of the material terms of such Indebtedness or the Merix 6.5% Debenture (as in effect on the date hereof), except, that, Parent may, after prior written notice to Agent, amend, modify, alter or change the terms thereof so
as to extend the maturity thereof or defer the timing of any payments in respect thereof or to forgive or cancel any portion of such indebtedness other than pursuant to payments thereof, or to reduce the interest rate or any fees in connection
therewith, to make any covenant or event of default less restrictive or burdensome to Borrowers and Guarantors 
  
 (iv) Borrowers and Guarantors shall not, directly or indirectly, prepay, redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set
aside or otherwise deposit or invest any sums for such purpose, except that: 
  
 (A) Parent may prepay, redeem or retire such Indebtedness with Refinancing Indebtedness with respect thereto permitted under Section 9.9(j) hereof, 
  
 (B) Parent may prepay, redeem or retire such Indebtedness with the net proceeds of the issuance and sale of Capital Stock
of Parent permitted hereunder received by Parent in cash or other immediately available funds, provided, that, the prepayment, redemption or retirement of such Indebtedness shall be substantially contemporaneous with the issuance and sale of the
Capital Stock of Parent and as of the date of any such payment and after giving effect thereto, there shall be Excess Availability and no Default or Event of Default shall exist or have occurred and be continuing, 
  
 (C) Parent may convert such Indebtedness to shares of Capital Stock of
Parent in accordance with the terms of the Merix 6.5% Debenture (as in effect on the date hereof), 
  
 (D) Parent may prepay, redeem or retire such Indebtedness in cash or other immediately available funds (other than with proceeds of the issuance and sale
of Capital Stock of Parent as provided in clause (B) above or with proceeds of Refinancing Indebtedness as provided in clause (A) above); provided, that, as of the date of any such prepayment, redemption or retirement, Agent shall have
received not less than two (2) Business Days’ prior written notice of the intention of Borrowers to so prepay, redeem or retire such Indebtedness, the Excess Availability for each of the immediately preceding ten (10) consecutive days
prior to the date of any payment in respect thereof shall have been not less than $20,000,000 and as of the date of 

  

 81 

 
any such payment and after giving effect thereto, the Excess Availability shall be not less than $20,000,000 and no Default or Event of Default shall exist
or have occurred and be continuing; and 
  
 (v) Borrowers and
Guarantors shall furnish to Agent all material notices or demands in connection with such Indebtedness either received by any Borrower or Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its
behalf concurrently with the sending thereof, as the case may be; 
  
 (i) Indebtedness of Parent evidenced by or arising under the Merix $2,000,000 Note (as in effect on the date hereof), provided, that: 
  
 (i) the principal amount of such Indebtedness shall be not more than $2,000,000 at any time, less the aggregate amount of all repayments, repurchases or
redemptions thereof, whether optional or mandatory, plus interest thereon at the rate provided in the Merix $2,000,000 Note as in effect on the date hereof, 
  
 (ii) Borrowers and Guarantors shall not, directly or indirectly, make any payments of principal or interest in respect of such Indebtedness,
except, that, (A) Parent may make regularly scheduled payments of principal and interest when due in accordance with the terms of the Merix $2,000,000 Note (as in effect on the date hereof) and (B) Parent may prepay, redeem
or retire such Indebtedness to the extent permitted under Section 9.9(i)(iv) below, 
  
 (iii) Borrowers and Guarantors shall not, directly or indirectly, amend, modify, alter or change any of the material terms of such Indebtedness or the Merix $2,000,000 Note (as in effect on the date hereof), except,
that, Parent may, after prior written notice to Agent, amend, modify, alter or change the terms thereof so as to extend the maturity thereof or defer the timing of any payments in respect thereof or to forgive or cancel any portion of such
indebtedness other than pursuant to payments thereof, or to reduce the interest rate or any fees in connection therewith, to make any covenant or event of default less restrictive or burdensome to Borrowers and Guarantors 
  
 (iv) Borrowers and Guarantors shall not, directly or indirectly, prepay,
redeem, retire, defease, purchase or otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, except that Borrowers or Guarantors may prepay, redeem or retire all or any part of such
Indebtedness, provided, that, as of the date of any such prepayment, redemption or purchase or any payment in respect thereof and after giving effect thereto, (A) Agent shall have received not less than two (2) Business Days’ prior
written notice of the intention of Borrowers to so prepay, redeem or retire all or any part of such Indebtedness, (B) the Excess Availability for each of the immediately preceding ten (10) consecutive days prior to the date of any payment
in respect thereof shall have been not less than $10,000,000 and as of the date of any such payment and after giving effect thereto, the Excess Availability shall be not less than $10,000,000, and (C) as of the date of any such payment and
after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing; and 
  
 (v) Borrowers and Guarantors shall furnish to Agent all material notices or demands in connection with such Indebtedness either received by any Borrower
or Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be; 
  

 82 

 (j) Indebtedness of Parent arising after the date hereof issued in exchange for, or the proceeds of which
are used to extend, refinance, replace or substitute for Indebtedness permitted under Section 9.9(h) hereof (the “Refinancing Indebtedness”); provided, that, as to any such Refinancing Indebtedness, each of the following conditions is
satisfied: (i) Agent shall have received not less than ten (10) Business Days’ prior written notice of the intention to incur such Indebtedness, which notice shall set forth in reasonable detail the amount of such Indebtedness, the
schedule of repayments and maturity date with respect thereto and such other information with respect thereto as Agent may reasonably request, (ii) promptly upon Agent’s request, Agent shall have received true, correct and complete copies
of all agreements, documents and instruments evidencing or otherwise related to such Indebtedness, as duly authorized, executed and delivered by the parties thereto, (iii) the Refinancing Indebtedness shall not require any payments of, or in
respect of, principal prior to the Maturity Date (including any sinking fund payments or similar type of payments), (iv) the Refinancing Indebtedness shall be unsecured, (v) the Refinancing Indebtedness shall not include terms and
conditions with respect to any Borrower or Guarantor which are more burdensome or restrictive in any material respect than those included in the Indebtedness so extended, refinanced, replaced or substituted for, (vi) such Indebtedness incurred
by any Borrower or Guarantor shall be at rates and with fees or other charges that are commercially reasonable and be owing to a person or persons that are not Affiliates, (vii) the incurring of such Indebtedness shall not result in an Event of
Default, (viii) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of $35,000,000 (plus the amount of refinancing fees and expenses incurred in connection therewith outstanding on the date of such
event), provided that all amounts thereof in excess of the Indebtedness being extended, refinanced, replaced or substituted for shall be paid to Agent for application to the Obligations in such order and manner Agent may determine,
(ix) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change any terms of the agreements with respect to such Refinancing Indebtedness, except that Borrowers and Guarantors may, after prior written
notice to Agent, amend, modify, alter or change the terms thereof to the extent permitted with respect to the Indebtedness so extended, refinanced, replaced or substituted for, or (B) redeem, retire, defease, purchase or otherwise acquired such
Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose (other than with Refinancing Indebtedness to the extent permitted herein and to the extent permitted with respect to the Indebtedness so extended, refinanced,
replaced or substituted for), and (x) Borrowers and Guarantors shall furnish to Agent copies of all material notices or demands in connection with Indebtedness received by any Borrower or Guarantor or on its behalf promptly after the receipt
thereof or sent by any Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be; and 
  
 (k) the Indebtedness set forth on Schedule 9.9 to the Information Certificate; provided, that, (i) Borrowers and Guarantors may only
make regularly scheduled payments of principal and interest in respect of such Indebtedness in accordance with the terms of the agreement or instrument evidencing or giving rise to such Indebtedness as in effect on the date hereof,
(ii) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or any agreement, document or instrument related thereto as in effect on the date hereof except, that,
Borrowers and Guarantors may, after prior 

  

 83 

 
written notice to Agent, amend, modify, alter or change the terms thereof so as to extend the maturity thereof, or defer the timing of any payments in
respect thereof, or to forgive or cancel any portion of such Indebtedness (other than pursuant to payments thereof), or to reduce the interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or otherwise
acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, (iii) Borrowers and Guarantors shall furnish to Agent all notices or demands in connection with such Indebtedness either received by any Borrower
or Guarantor or on its behalf, promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be. 
  
 9.10 Loans, Investments, Etc. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly
or indirectly, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary immediately prior to such merger) any Capital Stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person constituting a business unit or all or a substantial part of the assets or property of any other Person (whether through purchase of assets, merger or otherwise), or form or
acquire any Subsidiaries, or agree to do any of the foregoing (each of the foregoing an “Investment”), except: 
  
 (a) the endorsement of instruments for collection or deposit in the ordinary course of business; 
  
 (b) Investments in cash or Cash Equivalents, provided, that,
the terms and conditions of Section 5.2 hereof shall have been satisfied with respect to the deposit account, investment account or other account in which such cash or Cash Equivalents are held; 
  
 (c) the existing equity investments of each Borrower and Guarantor as of the
date hereof in its Subsidiaries, provided, that, no Borrower or Guarantor shall have any further obligations or liabilities to make any capital contributions or other additional investments or other payments to or in or for the benefit
of any of such Subsidiaries; 
  
 (d) loans and advances by any
Borrower or Guarantor to employees of such Borrower or Guarantor not to exceed the principal amount of $50,000 in the aggregate at any time outstanding for: (i) reasonably and necessary work-related travel or other ordinary business expenses to
be incurred by such employee in connection with their work for such Borrower or Guarantor and (ii) reasonable and necessary relocation expenses of such employees (including home mortgage financing for relocated employees); 
  
 (e) stock or obligations issued to any Borrower or Guarantor by any Person
(or the representative of such Person) in respect of Indebtedness of such Person owing to such Borrower or Guarantor in connection with the insolvency, bankruptcy, receivership or reorganization of such Person or a composition or readjustment of the
debts of such Person; provided, that, the original of any such stock or instrument evidencing such obligations shall be promptly delivered to Agent, upon Agent’s request, together with such stock power, assignment or endorsement
by such Borrower or Guarantor as Agent may request; 

  

 84 

 (f) obligations of account debtors to any Borrower or Guarantor arising from Accounts which are past due
evidenced by a promissory note made by such account debtor payable to such Borrower or Guarantor; provided, that, promptly upon the receipt of the original of any such promissory note by such Borrower or Guarantor, such promissory note
shall be endorsed to the order of Agent by such Borrower or Guarantor and promptly delivered to Agent as so endorsed; 
  
 (g) loans by a Borrower or Guarantor to another Borrower or Guarantor after the date hereof, provided, that, 
  
 (i) as to all of such loans, (A) within thirty (30) days after the
end of each fiscal month, Borrowers shall provide to Agent a report in form and substance satisfactory to Agent of the outstanding amount of such loans as of the last day of the immediately preceding month and indicating any loans made and payments
received during the immediately preceding month, (B) the Indebtedness arising pursuant to any such loan shall not be evidenced by a promissory note or other instrument, unless the single original of such note or other instrument is promptly
delivered to Agent upon its request to hold as part of the Collateral, with such endorsement and/or assignment by the payee of such note or other instrument as Agent may require, (C) as of the date of any such loan and after giving effect
thereto, the Borrower or Guarantor making such loan shall be Solvent, and (D) as of the date of any such loan and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, 
  
 (ii) as to loans by a Guarantor to a Borrower, (A) the Indebtedness
arising pursuant to such loan shall be subject to, and subordinate in right of payment to, the right of Agent and Lenders to receive the prior final payment and satisfaction in full of all of the Obligations on terms and conditions acceptable to
Agent, (B) promptly upon Agent’s request, Agent shall have received a subordination agreement, in form and substance satisfactory to Agent, providing for the terms of the subordination in right of payment of such Indebtedness of such
Borrower to the prior final payment and satisfaction in full of all of the Obligations, duly authorized, executed and delivered by such Guarantor and such Borrower, and (C) such Borrower shall not, directly or indirectly make, or be required to
make, any payments in respect of such Indebtedness prior to the end of the then current term of this Agreement; 
  
 (h) loans by a Borrower or Guarantor to a Foreign Subsidiary after the date hereof (other than the loan by Parent to Merix Cayman Trading Company Limited
after the date hereof provided for in Section 9.10(m) below) not to exceed the principal amount of $10,000,000 in the aggregate at any time outstanding, provided, that, as of the date of any such loan and after giving effect
thereto, (i) Agent shall have received not less than two (2) Business Days’ prior written notice of the intention of Borrowers to make such loan, (ii) the Excess Availability for each of the immediately preceding ten
(10) consecutive days prior to the date of any such loan shall have been not less than $15,000,000 and as of the date of any such loan and after giving effect thereto, the Excess Availability shall be not less than $10,000,000, (iii) as of
the date of such loan and after giving effect thereto, the Fixed Charge Coverage Ratio for Parent and its Subsidiaries determined on a pro forma basis as of such date, shall be not less than 1.10 to 1.0 and Agent shall 

  

 85 

 
have received such evidence thereof as Agent may require, including a certificate of the chief financial officer of Parent with respect thereto, in form and
substance satisfactory to Agent, (iv) as of the date of any such loan and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, and (v) the Indebtedness arising pursuant to any such
loan shall not be evidenced by a promissory note or other instrument unless the single original of such note or other instrument shall have been promptly delivered to Agent upon its request to hold as part of the Collateral, with such endorsement
and/or assignment by the payee of such note or other instrument as Agent may require; 
  
 (i) Investments by any Foreign Subsidiary after the date hereof to or in any Person, provided, that, (i) in no event shall any Borrower or Guarantor make, or be required to make, any payment or
incur any obligation or liability (contingent or otherwise) in connection with any such Investment, and (ii) in the case of any Investment constituting a loan or advance to a Borrower or Guarantor (A) the Indebtedness arising pursuant to
such loan shall be subject to, and subordinate in right of payment to, the right of Agent and Lenders to receive the prior final payment and satisfaction in full of all of the Obligations on terms and conditions acceptable to Agent,
(B) promptly upon Agent’s request, Agent shall have received a subordination agreement, in form and substance satisfactory to Agent, providing for the terms of the subordination in right of payment of such Indebtedness of such Borrower to
the prior final payment and satisfaction in full of all of the Obligations, duly authorized, executed and delivered by such Guarantor and such Borrower, and (C) such Borrower shall not, directly or indirectly make, or be required to make, any
payments in respect of such Indebtedness prior to the end of the then current term of this Agreement; 
  
 (j) the EPC Acquisition; 
  
 (k) the loan by Parent to Merix Caymans Trading Company Limited on the date hereof in an amount not to exceed $55,000,000, all of the proceeds of which
will be used by Merix Caymans Trading Company Limited to (i) pay a portion of the purchase price in connection with the EPC Acquisition, (ii) pay certain fees, costs and expenses in connection with the EPC Acquisition and the credit
facility obtained by Merix Caymans Trading Company Limited from certain lenders for whom Standard Chartered Bank (Hong Kong) Limited is the facility agent upon the consummation of the EPC Acquisition and (iii) provide up to $6,000,000 of cash
for working capital of Merix Caymans Trading Company Limited and its subsidiaries; provided, that, the Indebtedness arising pursuant to such loan shall not be evidenced by a promissory note or other instrument unless the single
original of such note or other instrument shall have been promptly delivered to Agent upon its request to hold as part of the Collateral, with such endorsement and/or assignment by the payee of such note or other instrument as Agent may require;

  
 (l) the equity capital contribution by Parent to Asia on the
date hereof in the amount not to exceed of $30,000,000, all of the proceeds of which will be used by Asia on the date hereof to make a cash equity capital contribution to Merix Caymans Holding Limited and by Merix Caymans Holding Limited on the date
hereof to make a cash equity capital contribution to Merix Caymans Trading Company Limited, all of the proceeds of which Merix Caymans Trading Company Limited will use to pay a portion of the purchase price in connection with the EPC Acquisition;

  

 86 

 (m) the loan by Parent to Merix Caymans Trading Company Limited within one hundred twenty (120) days
after the date hereof in an amount not to exceed $2,000,000, all of the proceeds of which will be used by Merix Caymans Trading Company Limited to pay the working capital purchase price adjustment, if any, required to be paid by it under the EPC
Acquisition Documents (as in effect on the date hereof); provided, that, (i) Parent shall only make such loan in the amount of, and to the extent that, it is required to make any payment of such working capital purchase price
adjustment and (ii) the Indebtedness arising pursuant to such loan shall not be evidenced by a promissory note or other instrument unless the single original of such note or other instrument shall have been promptly delivered to Agent upon its
request to hold as part of the Collateral, with such endorsement and/or assignment by the payee of such note or other instrument as Agent may require; 
  
 (n) the loans and advances set forth on Schedule 9.10 to the Information Certificate; provided, that, as to such loans and advances,
Borrowers and Guarantors shall not, directly or indirectly, amend, modify, alter or change the terms of such loans and advances or any agreement, document or instrument related thereto and Borrowers and Guarantors shall furnish to Agent all notices
or demands in connection with such loans and advances either received by any Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as
the case may be. 
  
 9.11 Dividends and Redemptions. Each
Borrower and Guarantor shall not, directly or indirectly, declare or pay any dividends on account of any shares of any class of its Capital Stock now or hereafter outstanding, or set aside or otherwise deposit or invest any sums for such purpose, or
redeem, retire, defease, purchase or otherwise acquire any shares of any class of its Capital Stock (or set aside or otherwise deposit or invest any sums for such purpose) for any consideration or apply or set apart any sum, or make any other
distribution (by reduction of capital or otherwise) in respect of any such shares or agree to do any of the foregoing, except that: 
  
 (a) it may declare and pay such dividends or redeem, retire, defease, purchase or otherwise acquire any shares of any class of its Capital Stock for
consideration in the form of shares of common stock (so long as after giving effect thereto no Change of Control or other Default or Event of Default shall exist or occur); 
  
 (b) it may pay dividends to the extent permitted in Section 9.12 below; 
  
 (c) any Foreign Subsidiary may pay any dividends to its shareholders;

  
 (d) any other Subsidiary of Parent may pay dividends to its
shareholders; 
  
 (e) it may repurchase Capital Stock consisting
of common stock held by employees pursuant to any employee stock option plan, or in the case of an employee stock ownership plan upon the termination, retirement or death of any such employee in accordance with the provisions of such employee stock
ownership plan, provided, that, as to any such repurchase, each of the following conditions is satisfied: (i) as of the date of the payment for such repurchase and after giving effect thereto, no Default or Event of Default shall
exist or have occurred and be 

  

 87 

 
continuing, (ii) such repurchase shall be paid with funds legally available therefor, (iii) such repurchase shall not violate any law or regulation
or the terms of any indenture, agreement or undertaking to which such Borrower or Guarantor is a party or by which such Borrower or Guarantor or its or their property are bound, and (iv) the aggregate amount of all payments for such repurchases
in any calendar year shall not exceed $100,000. 
  
 9.12
Transactions with Affiliates. Each Borrower and Guarantor shall not, directly or indirectly: 
  
 (a) purchase, acquire or lease any property from, or sell, transfer or lease any property to, any officer, director or other Affiliate of such Borrower or
Guarantor, except in the ordinary course of and pursuant to the reasonable requirements of such Borrower’s or Guarantor’s business (as the case may be) and upon fair and reasonable terms no less favorable to such Borrower or Guarantor than
such Borrower or Guarantor would obtain in a comparable arm’s length transaction with an unaffiliated person; or 
  
 (b) make any payments (whether by dividend, loan or otherwise) of management, consulting or other fees for management or similar services, or of any
Indebtedness owing to any officer, employee, shareholder, director or any other Affiliate of such Borrower or Guarantor, except reasonable compensation to officers, employees and directors for services rendered to such Borrower or Guarantor in the
ordinary course of business. 
  
 9.13 Compliance with
ERISA. Except as set forth on Schedule 8.9 hereto, each Borrower and Guarantor shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA,
the Code and other Federal and State law; (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; (c) not terminate any Pension Plan so as to incur any material liability to the Pension
Benefit Guaranty Corporation; (d) not allow or suffer to exist any prohibited transaction involving any Plan or any trust created thereunder which would subject such Borrower, Guarantor or such ERISA Affiliate to a material tax or other
liability on prohibited transactions imposed under Section 4975 of the Code or ERISA; (e) make all required contributions to any Plan which it is obligated to pay under Section 302 of ERISA, Section 412 of the Code or the terms
of such Plan; (f) not allow or suffer to exist any accumulated funding deficiency, whether or not waived, with respect to any such Pension Plan; (g) not engage in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA; or (h) not allow or suffer to exist any occurrence of a reportable event or any other event or condition which presents a material risk of termination by the Pension Benefit Guaranty Corporation of any Plan that is a single employer
plan, which termination could result in any material liability to the Pension Benefit Guaranty Corporation. 
  
 9.14 End of Fiscal Years; Fiscal Quarters. Each Borrower and Guarantor shall, for financial reporting purposes, cause its, and each of its
Subsidiaries’ (a) fiscal years to end on the last Saturday in May of each year and (b) fiscal quarters to end on the date for the end of each such fiscal quarter set forth on Schedule 9.14 hereto. 
  
 9.15 Change in Business. Each Borrower and Guarantor shall not engage
in any business other than the business of such Borrower or Guarantor on the date hereof and any business reasonably related, ancillary or complimentary to the business in which such Borrower or Guarantor is engaged on the date hereof. 

 

 88 

 9.16 Limitation of Restrictions Affecting Subsidiaries. Each Borrower and Guarantor shall not,
directly, or indirectly, create or otherwise cause or suffer to exist any encumbrance or restriction which prohibits or limits the ability of any Subsidiary of such Borrower or Guarantor to (a) pay dividends or make other distributions or pay
any Indebtedness owed to such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; (b) make loans or advances to such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor, (c) transfer any of its
properties or assets to such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor; or (d) create, incur, assume or suffer to exist any lien upon any of its property, assets or revenues, whether now owned or hereafter acquired,
other than encumbrances and restrictions arising under (i) applicable law, (ii) this Agreement, (iii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of such Borrower or Guarantor
or any Subsidiary of such Borrower or Guarantor, (iv) customary restrictions on dispositions of real property interests found in reciprocal easement agreements of such Borrower or Guarantor or any Subsidiary of such Borrower or Guarantor,
(v) any agreement relating to permitted Indebtedness incurred by a Subsidiary of such Borrower or Guarantor prior to the date on which such Subsidiary was acquired by such Borrower or such Guarantor and outstanding on such acquisition date, and
(vi) the extension or continuation of contractual obligations in existence on the date hereof; provided, that, any such encumbrances or restrictions contained in such extension or continuation are no less favorable to Agent and
Lenders than those encumbrances and restrictions under or pursuant to the contractual obligations so extended or continued. 
  
 9.17 Fixed Charge Coverage Ratio. At any time prior to the first anniversary of the date hereof that the Excess Availability is less than
$20,000,000 or at any time thereafter that the Excess Availability is less than $15,000,000, the Fixed Charge Coverage Ratio of Parent and its Domestic Subsidiaries (on a consolidated basis) for the last twelve (12) consecutive fiscal month
period most recently ended for which Agent has received financial statements of Borrowers and Guarantors, shall be not less than 1.10:1.00 (provided, that, for the period prior to September 23, 2006, the Fixed Charges for purposes
of calculating such ratio shall be based on the Fixed Charges for the period from September 24, 2005 through the last day of the immediately preceding fiscal month on an annualized basis, except for the principal payment in respect of
the Merix $2,000,000 Note due in December 2005 which shall not be annualized (but shall be included in the Fixed Charges on and after the date such payment is due or paid and thereafter for each applicable twelve (12) consecutive month period)
and Capital Expenditures which shall be based on the amount thereof for the same period for which EBITDA is used for the calculation of the Fixed Charge Coverage Ratio at any time). 
  
 9.18 License Agreements. 
  
 (a) With respect to a License Agreement applicable to Intellectual Property that is owned by a third party and licensed to a Borrower or Guarantor and
that is affixed to or otherwise used in connection with the manufacture, sale or distribution of any Inventory (other than an off-the-shelf product with a shrink wrap license) having a value in excess of $500,000, at any time after the Inventory
Availability Date or at such other time or times as Agent may 

  

 89 

 
request, each Borrower and Guarantor shall (i) give Agent not less than ten (10) Business Days’ prior written notice of its intention to not
renew or to terminate, cancel, surrender or release its rights under any such License Agreement, or to amend any such License Agreement or related arrangements to limit the scope of the right of such Borrower or Guarantor to use the Intellectual
Property subject to such License Agreement in any material respect, either with respect to product, territory, term or otherwise, or to increase in any material respect the amounts to be paid by such Borrower or Guarantor thereunder or in connection
therewith (and Agent may establish such Reserves as a result of any of the foregoing as Agent may reasonably determine), (ii) give Agent prompt written notice of any such License Agreement entered into by such Borrower or Guarantor after the
date hereof, or any material amendment to any such License Agreement existing on the date hereof, in each case together with a true, correct and complete copy thereof and such other information with respect thereto as Agent may in good faith
request, (iii) give Agent prompt written notice of any material breach of any obligation, or any default, by the third party that is the licensor or by the Borrower or Guarantor that is the licensee or any other party under any such License
Agreement, and deliver to Agent (promptly upon the receipt thereof by such Borrower or Guarantor in the case of a notice to such Borrower or Guarantor and concurrently with the sending thereof in the case of a notice from such Borrower or Guarantor)
a copy of each notice of default and any other notice received or delivered by such Borrower or Guarantor in connection with any such a License Agreement that relates to the scope of the right, or the continuation of the right, of such Borrower or
Guarantor to use the Intellectual Property subject to such License Agreement or the amounts required to be paid thereunder. 
  
 (b) With respect to a License Agreement applicable to Intellectual Property that is owned by a third party and licensed to a Borrower or Guarantor and
that is affixed to or otherwise used in connection with the manufacture, sale or distribution of any Inventory (other than an off-the-shelf product with a shrink wrap license) having a value in excess of $500,000, at any time an Event of Default
shall exist or have occurred and be continuing or on and after the Inventory Availability Date, if after giving effect to any Reserves, or the reduction in the applicable Borrowing Base as a result of Eligible Inventory using such licensed
Intellectual Property ceasing to be Eligible Inventory, the Excess Availability is less than $5,000,000, Agent shall have, and is hereby granted, the irrevocable right and authority, at its option, to renew or extend the term of such License
Agreement, whether in its own name and behalf, or in the name and behalf of a designee or nominee of Agent or in the name and behalf of such Borrower or Guarantor, subject to and in accordance with the terms of such License Agreement. Agent may, but
shall not be required to, perform any or all of such obligations of such Borrower or Guarantor under any of the License Agreements, including, but not limited to, the payment of any or all sums due from such Borrower or Guarantor thereunder. Any
sums so paid by Agent shall constitute part of the Obligations. 
  
 9.19 Foreign Assets Control Regulations, Etc. None of the requesting or borrowing of the Loans or the requesting or issuance, extension or renewal of any Letter of Credit or the use of the proceeds of any thereof will violate the
Trading With the Enemy Act (50 USC §1 et seq., as amended) (the “Trading With the Enemy Act”) or any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended)
(the “Foreign Assets Control Regulations”) or any enabling legislation or executive order relating thereto (including, but not limited to (a) Executive order 13224 of September 21, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or 

  

 90 

 
Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56). None of Borrowers or any of their Subsidiaries or other Affiliates is or will become a “blocked person” as described in the Executive Order,
the Trading with the Enemy Act or the Foreign Assets Control Regulations or engages or will engage in any dealings or transactions, or be otherwise associated, with any such “blocked person”. 
  
 9.20 After Acquired Real Property. If any Borrower or Guarantor
hereafter acquires any Real Property, fixtures or any other property that is of the kind or nature described in the Mortgage and such Real Property, fixtures or other property is adjacent to, contiguous with or necessary or related to or used in
connection with any Real Property then subject to a Mortgage, without limiting any other rights of Agent or any Lender, or duties or obligations of any Borrower or Guarantor, promptly upon Agent’s request, such Borrower or Guarantor shall
execute and deliver to Agent a mortgage, deed of trust or deed to secure debt, as Agent may determine, in form and substance substantially similar to the Mortgage and as to any provisions relating to specific state laws satisfactory to Agent and in
form appropriate for recording in the real estate records of the jurisdiction in which such Real Property or other property is located granting to Agent a first and only lien and mortgage on and security interest in such Real Property, fixtures or
other property (except as such Borrower or Guarantor would otherwise be permitted to incur hereunder or under the Mortgage or as otherwise consented to in writing by Agent), an environmental assessment thereof acceptable to Required Lenders and such
other agreements, documents and instruments as Agent may require in connection therewith. 
  
 9.21 Merix B.V. 
  
 (a)
Except as otherwise provided in Section 9.21(b) below, Borrowers and Guarantors will not permit Merix B.V. to (i) engage in any business or conduct any operations, (ii) own assets with a book value of more than $25,000 in the
aggregate and (iii) incur any obligations or liabilities in respect of any Indebtedness or otherwise. 
  
 (b) In the event that Parent intends to have Merix B.V. commence any business or operations or own assets with a book value of more than $25,000 in the
aggregate or incur any obligations or liabilities in respect of any Indebtedness or otherwise, (i) Administrative Borrower shall give Agent not less than ten (10) Business Days’ prior written notice thereof with reasonable detail and
specificity and such other information with respect thereto as Agent may request and (ii) at any time thereafter, promptly upon the request of Agent, Administrative Borrower shall cause Parent to execute and deliver to Agent, in form and
substance satisfactory to Agent, a pledge agreement in favor of Agent providing among other things, the grant of a security interest in and lien upon, and pledge of, the Capital Stock of Merix B.V., together with (i) certificates evidencing all
of the Capital Stock of Merix B.V., (ii) undated stock powers or other appropriate instruments of assignment executed in blank with signature guaranteed (provided, that, such pledge agreement shall not include more than sixty-five
(65%) percent of the Capital Stock entitled to vote of Merix B.V. to secure the Obligations to the extent that the pledge of more than such percentage thereof would result in repatriation of earnings under Section 956 of the Code),
(iii) to the extent required under applicable law the registration of the pledge to Agent in the share registry of Merix B.V., the affixing of a legend on the shares subject 

  

 91 

 
to such pledge and such other actions as may be required under applicable law in connection therewith to establish the rights of Agent with respect thereto,
and (iv) such opinions of counsel and such approving certificate of Merix B.V. as Agent may reasonably request in respect of complying with any legend on any such certificate or any other matter relating to such shares 
  
 9.22 Costs and Expenses. Borrowers and Guarantors shall pay to Agent
on demand all costs, expenses, filing fees and taxes paid or payable in connection with the preparation, negotiation, execution, delivery, recording, syndication, administration, collection, liquidation, enforcement and defense of the Obligations,
Agent’s rights in the Collateral, this Agreement, the other Financing Agreements and all other documents related hereto or thereto, including any amendments, supplements or consents which may hereafter be contemplated (whether or not executed)
or entered into in respect hereof and thereof, including: (a) all costs and expenses of filing or recording (including Uniform Commercial Code financing statement filing taxes and fees, documentary taxes, intangibles taxes and mortgage
recording taxes and fees, if applicable); (b) costs and expenses and fees for insurance premiums, environmental audits, title insurance premiums, surveys, assessments, engineering reports and inspections, appraisal fees and search fees,
background checks, costs and expenses of remitting loan proceeds, collecting checks and other items of payment, and establishing and maintaining the Blocked Accounts, together with Agent’s customary charges and fees with respect thereto;
(c) charges, fees or expenses charged by any Issuing Bank in connection with any Letter of Credit; (d) costs and expenses of preserving and protecting the Collateral; (e) costs and expenses paid or incurred in connection with
obtaining payment of the Obligations, enforcing the security interests and liens of Agent, selling or otherwise realizing upon the Collateral, and otherwise enforcing the provisions of this Agreement and the other Financing Agreements or defending
any claims made or threatened against Agent or any Lender arising out of the transactions contemplated hereby and thereby (including preparations for and consultations concerning any such matters); (f) all out-of-pocket expenses and costs
heretofore and from time to time hereafter incurred by Agent during the course of periodic field examinations of the Collateral and such Borrower’s or Guarantor’s operations, plus a per diem charge at Agent’s then standard rate for
Agent’s examiners in the field and office (which rate as of the date hereof is $1,000 per person per day); and (g) the reasonable fees and disbursements of counsel (including legal assistants) to Agent in connection with any of the
foregoing. 
  
 9.23 Further Assurances. At the request of
Agent at any time and from time to time, Borrowers and Guarantors shall, at their expense, duly execute and deliver, or cause to be duly executed and delivered, such further agreements, documents and instruments, and do or cause to be done such
further acts as may be necessary or proper to evidence, perfect, maintain and enforce the security interests and the priority thereof in the Collateral and to otherwise effectuate the provisions or purposes of this Agreement or any of the other
Financing Agreements. Agent may at any time and from time to time request a certificate from an officer of any Borrower or Guarantor representing that all conditions precedent to the making of Loans and providing Letters of Credit contained herein
are satisfied. In the event of such request by Agent, Agent and Lenders may, at Agent’s option, cease to make any further Loans or provide any further Letters of Credit until Agent has received such certificate and, in addition, Agent has
determined that such conditions are satisfied. 
  

 92 

 SECTION 10. EVENTS OF DEFAULT AND REMEDIES 
  
 10.1 Events of Default. The occurrence or existence of any one or
more of the following events are referred to herein individually as an “Event of Default”, and collectively as “Events of Default”: 
  
 (a) (i) any Borrower fails to pay any of the Obligations when due or (ii) any Borrower or Guarantor fails to perform any of the covenants
contained in Sections 9.3, 9.4, 9.13, 9.14, 9.15, and 9.16 of this Agreement and such failure shall continue for fifteen (15) days; provided, that, such fifteen (15) day period shall not apply in the case of: (A) any
failure to observe any such covenant which is not capable of being cured at all or within such fifteen (15) day period or which has been the subject of a prior failure within a six (6) month period or (B) an intentional breach by any
Borrower or Guarantor of any such covenant or (iii) any Borrower or Guarantor fails to perform any of the terms, covenants, conditions or provisions contained in this Agreement or any of the other Financing Agreements other than those described
in Sections 10.1(a)(i) and 10.1(a)(ii) above; 
  
 (b) any
representation, warranty or statement of fact made by any Borrower or Guarantor to Agent in this Agreement, the other Financing Agreements or any other written agreement, schedule, confirmatory assignment or otherwise shall when made or deemed made
be false or misleading in any material respect; 
  
 (c) any
Guarantor revokes or terminates or purports to revoke or terminate any guarantee, endorsement or other agreement of such party in favor of Agent or any Lender entered into in connection with the Obligations; 
  
 (d) any judgment for the payment of money is rendered against any Borrower or
Guarantor in excess of $250,000 in any one case or in excess of $500,000 in the aggregate (to the extent not covered by insurance where the insurer has assumed responsibility in writing for such judgment) and shall remain undischarged or unvacated
for a period in excess of thirty (30) days or execution shall at any time not be effectively stayed, or any judgment other than for the payment of money, or injunction, attachment, garnishment or execution is rendered against any Borrower or
Guarantor or any of the Collateral having a value in excess of $250,000; 
  
 (e) any Borrower or Guarantor makes an assignment for the benefit of creditors, makes or sends notice of a bulk transfer or calls a meeting of its creditors or principal creditors in connection with a moratorium or
adjustment of the Indebtedness due to them; 
  
 (f) a case or
proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction now or
hereafter in effect (whether at law or in equity) is filed against any Borrower or Guarantor or all or any part of its properties and such petition or application is not dismissed within sixty (60) days after the date of its filing or any
Borrower or Guarantor shall file any answer admitting or not contesting such petition or application or indicates its consent to, acquiescence in or approval of, any such action or proceeding or the relief requested is granted sooner; 
  

 93 

 (g) a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in
effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether at a law or equity) is filed by any Borrower or Guarantor or for
all or any part of its property; 
  
 (h) any default in respect of
any Indebtedness of any Borrower or Guarantor (other than Indebtedness owing to Agent and Lenders hereunder), in any case in an amount in excess of $500,000, which default continues for more than the applicable cure period, if any, with respect
thereto or any default by any Borrower or Guarantor under any Material Contract, which default continues for more than the applicable cure period, if any, with respect thereto and/or is not waived in writing by the other parties thereto; 

 
 (i) any material provision hereof or of any of the other Financing
Agreements shall for any reason cease to be valid, binding and enforceable with respect to any party hereto or thereto (other than Agent) in accordance with its terms, or any such party shall challenge the enforceability hereof or thereof, or shall
assert in writing, or take any action or fail to take any action based on the assertion that any provision hereof or of any of the other Financing Agreements has ceased to be or is otherwise not valid, binding or enforceable in accordance with its
terms, or any security interest provided for herein or in any of the other Financing Agreements shall cease to be a valid and perfected first priority security interest in any of the Collateral purported to be subject thereto (except as otherwise
permitted herein or therein); 
  
 (j) an ERISA Event shall occur
which results in or could reasonably be expected to result in liability of any Borrower in an aggregate amount in excess of $500,000; 
  
 (k) any Change of Control; 
  
 (l) the indictment by any Governmental Authority, or as Agent may in good faith determine, the threatened indictment by any Governmental Authority of any
Borrower or Guarantor of which any Borrower, Guarantor or Agent receives notice, in either case, as to which there is a reasonable possibility of an adverse determination, in the good faith determination of Agent under any criminal statute, or
commencement or threatened commencement, of criminal or civil proceedings against such Borrower or Guarantor, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture of (i) any of the Collateral
having a value in excess of $250,000 or (ii) any other property of any Borrower or Guarantor which is necessary or material to the conduct of its business; 
  

(m) Agent shall not have received on or before February 28, 2007 evidence that either (i) the Indebtedness of Parent under the Merix 6.5%
Debenture has been paid in full in cash and Borrowers and Guarantors released from any obligations in respect thereof or (ii) that each of the Persons to whom such Indebtedness is then owing has executed and delivered a valid and enforceable
agreement in writing that the Indebtedness owing to it is not due and payable until a date ninety (90) days after the Maturity Date, except that the failure of Agent to receive such evidence on or before February 28, 2007 shall not
be an Event of Default if Excess Availability is equal to or greater than $45,000,000 at all times during the period commencing on February 28, 2007 and ending on the date that Agent has received such evidence (and in the event that Excess
Availability shall at any time during such period be less than $45,000,000, it shall be an Event of Default); 
  

 94 

 (n) there shall be a change after the date hereof that has a Material Adverse Effect; or 
  
 (o) there shall be an event of default under any of the other Financing
Agreements. 
  
 10.2 Remedies. 
  
 (a) At any time an Event of Default exists or has occurred and is
continuing, Agent and Lenders shall have all rights and remedies provided in this Agreement, the other Financing Agreements, the UCC and other applicable law, all of which rights and remedies may be exercised without notice to or consent by any
Borrower or Guarantor, except as such notice or consent is expressly provided for hereunder or required by applicable law. All rights, remedies and powers granted to Agent and Lenders hereunder, under any of the other Financing Agreements, the UCC
or other applicable law, are cumulative, not exclusive and enforceable, in Agent’s discretion, alternatively, successively, or concurrently on any one or more occasions, and shall include, without limitation, the right to apply to a court of
equity for an injunction to restrain a breach or threatened breach by any Borrower or Guarantor of this Agreement or any of the other Financing Agreements. Subject to Section 12 hereof, Agent may, and at the direction of the Required Lenders
shall, at any time or times, proceed directly against any Borrower or Guarantor to collect the Obligations without prior recourse to the Collateral. 
  
 (b) Without limiting the generality of the foregoing, at any time an Event of Default exists or has occurred and is continuing, Agent may, at its option
and shall upon the direction of the Required Lenders, (i) upon notice to Administrative Borrower, accelerate the payment of all Obligations and demand immediate payment thereof to Agent for itself and the benefit of Lenders (provided,
that, upon the occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h), all Obligations shall automatically become immediately due and payable), and (ii) terminate the Commitments whereupon the obligation of each
Lender to make any Loan and Issuing Bank to issue any Letter of Credit shall immediately terminate (provided, that, upon the occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h), the Commitments and any other
obligation of the Agent or a Lender hereunder shall automatically terminate). 
  
 (c) Without limiting the foregoing, at any time an Event of Default exists or has occurred and is continuing, Agent may, in its discretion (i) with or without judicial process or the aid or assistance of others,
enter upon any premises on or in which any of the Collateral may be located and take possession of the Collateral or complete processing, manufacturing and repair of all or any portion of the Collateral, (ii) require any Borrower or Guarantor,
at Borrowers’ expense, to assemble and make available to Agent any part or all of the Collateral at any place and time designated by Agent, (iii) collect, foreclose, receive, appropriate, setoff and realize upon any and all Collateral,
(iv) remove any or all of the Collateral from any premises on or in which the same may be located for the purpose of effecting the sale, foreclosure or other disposition thereof or for any other purpose, (v) sell, lease, transfer, assign,
deliver or otherwise dispose of any and all Collateral (including entering into contracts with respect thereto, public or 

  

 95 

 
private sales at any exchange, broker’s board, at any office of Agent or elsewhere) at such prices or terms as Agent may deem reasonable, for cash, upon
credit or for future delivery, with the Agent having the right to purchase the whole or any part of the Collateral at any such public sale, all of the foregoing being free from any right or equity of redemption of any Borrower or Guarantor, which
right or equity of redemption is hereby expressly waived and released by Borrowers and Guarantors and/or (vi) terminate this Agreement. If any of the Collateral is sold or leased by Agent upon credit terms or for future delivery, the
Obligations shall not be reduced as a result thereof until payment therefor is finally collected by Agent. If notice of disposition of Collateral is required by law, ten (10) days prior notice by Agent to Administrative Borrower designating the
time and place of any public sale or the time after which any private sale or other intended disposition of Collateral is to be made, shall be deemed to be reasonable notice thereof and Borrowers and Guarantors waive any other notice. In the event
Agent institutes an action to recover any Collateral or seeks recovery of any Collateral by way of prejudgment remedy, each Borrower and Guarantor waives the posting of any bond which might otherwise be required. At any time an Event of Default
exists or has occurred and is continuing, upon Agent’s request, Borrowers will either, as Agent shall specify, furnish cash collateral to Issuing Bank to be used to secure and fund the reimbursement obligations to Issuing Bank in connection
with any Letter of Credit Obligations or furnish cash collateral to Agent for the Letter of Credit Obligations. Such cash collateral shall be in the amount equal to one hundred five (105%) percent of the amount of the Letter of Credit
Obligations plus the amount of any fees and expenses payable in connection therewith through the end of the latest expiration date of the Letters of Credit giving rise to such Letter of Credit Obligations. 
  
 (d) At any time or times that an Event of Default exists or has occurred and
is continuing, Agent may, in its discretion, enforce the rights of any Borrower or Guarantor against any account debtor, secondary obligor or other obligor in respect of any of the Accounts or other Receivables. Without limiting the generality of
the foregoing, Agent may, in its discretion, at such time or times (i) notify any or all account debtors, secondary obligors or other obligors in respect thereof that the Receivables have been assigned to Agent and that Agent has a security
interest therein and Agent may direct any or all account debtors, secondary obligors and other obligors to make payment of Receivables directly to Agent, (ii) extend the time of payment of, compromise, settle or adjust for cash, credit, return
of merchandise or otherwise, and upon any terms or conditions, any and all Receivables or other obligations included in the Collateral and thereby discharge or release the account debtor or any secondary obligors or other obligors in respect thereof
without affecting any of the Obligations, (iii) demand, collect or enforce payment of any Receivables or such other obligations, but without any duty to do so, and Agent and Lenders shall not be liable for any failure to collect or enforce the
payment thereof nor for the negligence of its agents or attorneys with respect thereto and (iv) take whatever other action Agent may deem necessary or desirable for the protection of its interests and the interests of Lenders. At any time that
an Event of Default exists or has occurred and is continuing, at Agent’s request, all invoices and statements sent to any account debtor shall state that the Accounts and such other obligations have been assigned to Agent and are payable
directly and only to Agent and Borrowers and Guarantors shall deliver to Agent such originals of documents evidencing the sale and delivery of goods or the performance of services giving rise to any Accounts as Agent may require. In the event any
account debtor returns Inventory when an Event of Default exists or has occurred and is continuing, Borrowers shall, upon Agent’s request, hold the returned Inventory in trust for Agent, segregate all returned Inventory from all of its 

  

 96 

 
other property, dispose of the returned Inventory solely according to Agent’s instructions, and not issue any credits, discounts or allowances with
respect thereto without Agent’s prior written consent. 
  
 (e) To the extent that applicable law imposes duties on Agent or any Lender to exercise remedies in a commercially reasonable manner (which duties cannot be waived under such law), each Borrower and Guarantor acknowledges and agrees that it
is not commercially unreasonable for Agent or any Lender (i) to fail to incur expenses reasonably deemed significant by Agent or any Lender to prepare Collateral for disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain consents of any Governmental
Authority or other third party for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against account debtors, secondary obligors or other persons obligated on Collateral or
to remove liens or encumbrances on or any adverse claims against Collateral, (iv) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other persons, whether or not in the same
business as any Borrower or Guarantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral
is of a specialized nature, (viii) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and
sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, (xi) to purchase insurance or credit enhancements to insure Agent or Lenders against risks of loss,
collection or disposition of Collateral or to provide to Agent or Lenders a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by Agent, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist Agent in the collection or disposition of any of the Collateral. Each Borrower and Guarantor acknowledges that the purpose of this Section is to provide non-exhaustive indications of
what actions or omissions by Agent or any Lender would not be commercially unreasonable in the exercise by Agent or any Lender of remedies against the Collateral and that other actions or omissions by Agent or any Lender shall not be deemed
commercially unreasonable solely on account of not being indicated in this Section. Without limitation of the foregoing, nothing contained in this Section shall be construed to grant any rights to any Borrower or Guarantor or to impose any duties on
Agent or Lenders that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section. 
  
 (f) For the purpose of enabling Agent to exercise the rights and remedies hereunder, each Borrower and Guarantor hereby grants to Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable at any time an Event of Default shall exist or have occurred and for so long as the same is continuing) without payment of royalty or other compensation to any Borrower or Guarantor, to
use, assign, license or sublicense any of the trademarks, service-marks, trade names, business names, trade styles, designs, logos and other source of business identifiers and other Intellectual Property and general intangibles now owned or
hereafter 

  

 97 

 
acquired by any Borrower or Guarantor, wherever the same maybe located, including in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the compilation or printout thereof. 
  
 (g) At any time an Event of Default exists or has occurred and is continuing, Agent shall apply the cash proceeds of Collateral actually received by Agent
from any sale, lease, foreclosure or other disposition of the Collateral to payment of the Obligations, in whole or in part and in accordance with the terms hereof, whether or not then due and thereafter hold such proceeds as cash collateral in
connection with any contingent Obligations, including issued and outstanding Letter of Credit Obligations and checks or other payments provisionally credited to the Obligations and/or as to which Agent or any Lender has not yet received final and
indefeasible payment (and including any contingent liability of Agent to any bank at which deposit accounts of Borrowers and Guarantors are maintained under any Deposit Account Control Agreement) and for any of the Obligations arising under or in
connection with any Bank Products. Borrowers and Guarantors shall remain liable to Agent and Lenders for the payment of any deficiency with interest at the highest rate provided for herein and all costs and expenses of collection or enforcement,
including reasonable attorneys’ fees and expenses. 
  
 (h)
Without limiting the foregoing, upon the occurrence of a Default or an Event of Default and for so long as the same is continuing, (i) Agent and Lenders may, at Agent’s option, and upon the occurrence of an Event of Default at the
direction of the Required Lenders, Agent and Lenders shall, without notice, (A) cease making Loans or arranging for Letters of Credit or reduce the lending formulas or amounts of Loans and Letters of Credit available to Borrowers and/or
(B) terminate any provision of this Agreement providing for any future Loans to be made by Agent and Lenders or Letters of Credit to be issued by Issuing Bank and (ii) Agent may, at its option, establish such Reserves as Agent determines,
without limitation or restriction, notwithstanding anything to the contrary contained herein. 
  
 SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW  
  
 11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver. 
  
 (a) The validity, interpretation and enforcement of this Agreement and the other Financing Agreements (except as otherwise
provided therein) and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts
of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York. 
  
 (b) Borrowers, Guarantors, Agent, Lenders and Issuing Bank irrevocably consent and submit to the non-exclusive jurisdiction of the Supreme Court of the
State of New York for the County of New York and the United States District Court for the Southern District of New York, whichever Agent may elect, and waive any objection based on venue or forum non conveniens with respect to any action instituted
therein arising under this Agreement or any of the other Financing Agreements or in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement or any of the other Financing 

  

 98 

 
Agreements or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity or
otherwise, and agree that any dispute with respect to any such matters shall be heard only in the courts described above (except that Agent and Lenders shall have the right to bring any action or proceeding against any Borrower or Guarantor or its
or their property in the courts of any other jurisdiction which Agent deems necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against any Borrower or Guarantor or its or their property). 
  
 (c) Each Borrower and Guarantor hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed five (5) days after the same
shall have been so deposited in the U.S. mails, or, at Agent’s option, by service upon any Borrower or Guarantor (or Administrative Borrower on behalf of such Borrower or Guarantor) in any other manner provided under the rules of any such
courts. Within sixty (60) days after such service, such Borrower or Guarantor shall appear in answer to such process, failing which such Borrower or Guarantor shall be deemed in default and judgment may be entered by Agent against such Borrower
or Guarantor for the amount of the claim and other relief requested. 
  
 (d) BORROWERS, GUARANTORS, AGENT, LENDERS AND ISSUING BANK EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWERS, GUARANTORS, AGENT, LENDERS AND ISSUING BANK EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT
ANY BORROWER, ANY GUARANTOR, AGENT, ANY LENDER OR ISSUING BANK MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

  
 (e) Agent and Secured Parties shall not have any liability to
any Borrower or Guarantor (whether in tort, contract, equity or otherwise) for losses suffered by such Borrower or Guarantor in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this
Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a final and non-appealable judgment or court order binding on Agent, such Lender and Issuing Bank, that the losses were the result of acts or
omissions constituting gross negligence or willful misconduct. In any such litigation, Agent, Lenders and Issuing Bank shall be entitled to the benefit of the rebuttable presumption that it acted in good faith and with the exercise of ordinary care
in the performance by it of the terms of this Agreement. Each Borrower and Guarantor: (i) certifies that neither Agent, any Lender, Issuing Bank nor any representative, agent or attorney acting for or on behalf of Agent, any 

  

 99 

 
Lender or Issuing Bank has represented, expressly or otherwise, that Agent, Lenders and Issuing Bank would not, in the event of litigation, seek to enforce
any of the waivers provided for in this Agreement or any of the other Financing Agreements and (ii) acknowledges that in entering into this Agreement and the other Financing Agreements, Agent, Lenders and Issuing Bank are relying upon, among
other things, the waivers and certifications set forth in this Section 11.1 and elsewhere herein and therein. 
  
 (f) If any action or proceeding is filed in a court of the State of California by or against any party hereto in connection with any of the transactions
contemplated by the Loan Agreement or any other Financing Agreement, (i) the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee or referees to hear and
determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision, provided that at the option of Agent, any such issues pertaining to a ‘provisional remedy’ as defined in California
Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (ii) Borrowers shall be solely responsible to pay all fees and expenses of any referee appointed in such action or proceeding. 
  
 11.2 Waiver of Notices. Each Borrower and Guarantor hereby expressly
waives demand, presentment, protest and notice of protest and notice of dishonor with respect to any and all instruments and chattel paper, included in or evidencing any of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral and this Agreement, except such as are expressly provided for herein. No notice to or demand on any Borrower or Guarantor which Agent or any Lender may elect to give
shall entitle such Borrower or Guarantor to any other or further notice or demand in the same, similar or other circumstances. 
  
 11.3 Amendments and Waivers. 
  
 (a) Neither this Agreement nor any other Financing Agreement nor any terms hereof or thereof may be amended, waived, discharged or terminated unless such
amendment, waiver, discharge or termination is in writing signed by Agent and the Required Lenders (or as to the signatures of Required Lenders, Agent may, at Agent’s option, instead of obtaining separate signatures of such Lenders, sign on
behalf of any such Lender with the authorization or consent of such Lender), and as to amendments to any of the Financing Agreements (other than with respect to any provision of Section 12 hereof), by Administrative Borrower and such amendment,
waiver, discharge or termination shall be effective and binding as to all Lenders and Issuing Bank only in the specific instance and for the specific purpose for which given; except, that, no such amendment, waiver, discharge or termination shall:

  
 (i) reduce the interest rate or any fees or extend the time
of payment of principal, interest or any fees or reduce the principal amount of any Loan or Letters of Credit, in each case without the consent of each Lender directly affected thereby, 
  
 (ii) increase the Maximum Credit or Revolving Loan Limit, without the consent of Agent and all of Lenders, 
  

 100 

 (iii) release any Collateral (except as expressly required hereunder or under any of the other Financing
Agreements or applicable law and except as permitted under Section 12.11(b) hereof), or release any guarantee of the Obligations, in each case without the consent of Agent and all of Lenders, 
  
 (iv) reduce any percentage specified in the definition of Required Lenders,
without the consent of Agent and all of Lenders, 
  
 (v) consent
to the assignment or transfer by any Borrower or Guarantor of any of their rights and obligations under this Agreement, without the consent of Agent and all of Lenders, 
  
 (vi) amend, modify or waive any terms of this Section 11.3 hereof, without the consent of Agent and all of Lenders, or

  
 (vii) amend the definitions of Borrowing Base, Eligible
Accounts, Eligible Finished Goods Inventory, Eligible Gold Raw Material Inventory or Eligible Inventory, in each case, only if the effect of such amendment is to increase the amount of the Borrowing Base, or increase the Inventory Loan Limit or the
Letter of Credit Limit, or amend the definition of Cash Dominion Event, in each case, without the consent of Agent and all of Lenders. 
  
 (b) Agent, Lenders and Issuing Bank shall not, by any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any of its or
their rights, powers and/or remedies unless such waiver shall be in writing and signed as provided herein. Any such waiver shall be enforceable only to the extent specifically set forth therein. A waiver by Agent, any Lender or Issuing Bank of any
right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/or remedy which Agent, any Lender or Issuing Bank would otherwise have on any future occasion, whether similar in kind or
otherwise. 
  
 (c) Notwithstanding anything to the contrary
contained in Section 11.3(a) above, in connection with any amendment, waiver, discharge or termination, in the event that any Lender whose consent thereto is required shall fail to consent or fail to consent in a timely manner (such Lender
being referred to herein as a “Non-Consenting Lender”), but the consent of any other Lenders to such amendment, waiver, discharge or termination that is required are obtained, if any, then Wachovia shall have the right, but not the
obligation, at any time thereafter, and upon the exercise by Wachovia of such right, such Non-Consenting Lender shall have the obligation, to sell, assign and transfer to Wachovia or such Eligible Transferee as Wachovia may specify, the Commitment
of such Non-Consenting Lender and all rights and interests of such Non-Consenting Lender pursuant thereto. Wachovia shall provide the Non-Consenting Lender with prior written notice of its intent to exercise its right under this Section, which
notice shall be delivered within ninety (90) days after the date of the failure to consent and shall specify the date on which such purchase and sale shall occur (which date shall be not more than thirty (30) days thereafter). Such
purchase and sale shall be pursuant to the terms of an Assignment and Acceptance (whether or not executed by the Non-Consenting Lender), except that on the date of such purchase and sale, Wachovia, or such Eligible Transferee specified by Wachovia,
shall pay to the Non-Consenting Lender (except as Wachovia and such Non-Consenting Lender may 

  

 101 

 
otherwise agree) the amount equal to: (i) the principal balance of the Loans held by the Non-Consenting Lender outstanding as of the close of business
on the business day immediately preceding the effective date of such purchase and sale, plus (ii) amounts accrued and unpaid in respect of interest and fees payable to the Non-Consenting Lender to the effective date of the purchase (but in no
event shall the Non-Consenting Lender be deemed entitled to any early termination fee). Such purchase and sale shall be effective on the date of the payment of such amount to the Non-Consenting Lender and the Commitment of the Non-Consenting Lender
shall terminate on such date. 
  
 (d) The consent of Agent shall
be required for any amendment, waiver or consent affecting the rights or duties of Agent hereunder or under any of the other Financing Agreements, in addition to the consent of the Lenders otherwise required by this Section and the exercise by Agent
of any of its rights hereunder with respect to Reserves or Eligible Accounts or Eligible Inventory shall not be deemed an amendment to the advance rates provided for in this Section 11.3. The consent of Issuing Bank shall be required for any
amendment, waiver or consent affecting the rights or duties of Issuing Bank hereunder or under any of the other Financing Agreements, in addition to the consent of the Lenders otherwise required by this Section, provided, that, the
consent of Issuing Bank shall not be required for any other amendments, waivers or consents. Notwithstanding anything to the contrary contained in Section 11.3(a) above, (i) in the event that Agent shall agree that any items otherwise
required to be delivered to Agent as a condition of the initial Loans and Letters of Credit hereunder may be delivered after the date hereof, Agent may, in its discretion, agree to extend the date for delivery of such items or take such other action
as Agent may deem appropriate as a result of the failure to receive such items as Agent may determine or may waive any Event of Default as a result of the failure to receive such items, in each case without the consent of any Lender and
(ii) Agent may consent to any change in the type of organization, jurisdiction of organization or other legal structure of any Borrower, Guarantor or any of their Subsidiaries and amend the terms hereof or of any of the other Financing
Agreements as may be necessary or desirable to reflect any such change, in each case without the approval of any Lender. 
  
 (e) The consent of Agent and any Bank Product Provider that is providing Bank Products and has outstanding any such Bank Products at such time that are
secured hereunder shall be required for any amendment to the priority of payment of Obligations arising under or pursuant to any Hedge Agreements of a Borrower or Guarantor or other Bank Products as set forth in Section 6.4(a) hereof. In no
event shall the consent or approval of any Bank Product Provider be required for any other amendment or waiver and any such other amendment or waiver entered into in accordance with Section 11.3(a) shall be binding upon all of the Secured
Parties. 
  
 11.4 Waiver of Counterclaims. Each Borrower
and Guarantor waives all rights to interpose any claims, deductions, setoffs or counterclaims of any nature (other then compulsory counterclaims) in any action or proceeding with respect to this Agreement, the Obligations, the Collateral or any
matter arising therefrom or relating hereto or thereto. 
  
 11.5
Indemnification. Each Borrower and Guarantor shall, jointly and severally, indemnify and hold Agent, each Lender and Issuing Bank, and their respective officers, directors, agents, employees, advisors and counsel and their respective
Affiliates (each such 

  

 102 

 
person being an “Indemnitee”), harmless from and against any and all losses, claims, damages, liabilities, costs or expenses (including
attorneys’ fees and expenses) imposed on, incurred by or asserted against any of them in connection with any litigation, investigation, claim or proceeding commenced or threatened related to the negotiation, preparation, execution, delivery,
enforcement, performance or administration of this Agreement, any other Financing Agreements, or any undertaking or proceeding related to any of the transactions contemplated hereby or any act, omission, event or transaction related or attendant
thereto, including amounts paid in settlement, court costs, and the fees and expenses of counsel except that Borrowers and Guarantors shall not have any obligation under this Section 11.5 to indemnify an Indemnitee with respect to a matter
covered hereby resulting from the gross negligence or wilful misconduct of such Indemnitee as determined pursuant to a final, non-appealable order of a court of competent jurisdiction (but without limiting the obligations of Borrowers or Guarantors
as to any other Indemnitee). To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section may be unenforceable because it violates any law or public policy, Borrowers and Guarantors shall pay the maximum portion
which it is permitted to pay under applicable law to Agent and Lenders in satisfaction of indemnified matters under this Section. To the extent permitted by applicable law, no Borrower or Guarantor shall assert, and each Borrower and Guarantor
hereby waives, any claim against any Indemnitee, on any theory of liability for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any
of the other Financing Agreements or any undertaking or transaction contemplated hereby. No Indemnitee referred to above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or any of the other Financing Agreements or the transaction contemplated hereby or thereby. All amounts due under this Section
shall be payable upon demand. The foregoing indemnity shall survive the payment of the Obligations and the termination or non-renewal of this Agreement. 
  
 SECTION 12. THE AGENT 
  
 12.1 Appointment, Powers and Immunities. Each Secured Party irrevocably designates, appoints and authorizes Wachovia to act as Agent hereunder and
under the other Financing Agreements with such powers as are specifically delegated to Agent by the terms of this Agreement and of the other Financing Agreements, together with such other powers as are reasonably incidental thereto. Agent
(a) shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Financing Agreements, and shall not by reason of this Agreement or any other Financing Agreement be a trustee or fiduciary for any
Secured Party; (b) shall not be responsible to Secured Parties for any recitals, statements, representations or warranties contained in this Agreement or in any of the other Financing Agreements, or in any certificate or other document referred
to or provided for in, or received by any of them under, this Agreement or any other Financing Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Financing Agreement or any
other document referred to or provided for herein or therein or for any failure by any Borrower or any Guarantor or any other Person to perform any of its obligations hereunder or thereunder; and (c) shall not be responsible to Secured Parties
for any action taken or omitted to be taken by it hereunder or under any other Financing Agreement or under any other document or instrument referred to or provided for herein or therein or in 

  

 103 

 
connection herewith or therewith, except for its own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction. Agent may employ agents and attorneys in fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys in fact selected by it in good faith. Agent may deem and treat the payee of any note
as the holder thereof for all purposes hereof unless and until the assignment thereof pursuant to an agreement (if and to the extent permitted herein) in form and substance satisfactory to Agent shall have been delivered to and acknowledged by
Agent. 
  
 12.2 Reliance by Agent. Agent shall be entitled
to rely upon any certification, notice or other communication (including any thereof by telephone, telecopy, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by Agent. As to any matters not expressly provided for by this Agreement or any other Financing Agreement, Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions given by the Required Lenders or all of Lenders as is required in such circumstance, and such instructions of such Agents and any action taken
or failure to act pursuant thereto shall be binding on all Lenders. 
  
 12.3 Events of Default. 
  
 (a) Agent shall not
be deemed to have knowledge or notice of the occurrence of a Default or an Event of Default or other failure of a condition precedent to the Loans and Letters of Credit hereunder, unless and until Agent has received written notice from a Lender, or
Borrower specifying such Event of Default or any unfulfilled condition precedent, and stating that such notice is a “Notice of Default or Failure of Condition”. In the event that Agent receives such a Notice of Default or Failure of
Condition, Agent shall give prompt notice thereof to the Lenders. Agent shall (subject to Section 12.7) take such action with respect to any such Event of Default or failure of condition precedent as shall be directed by the Required Lenders to
the extent provided for herein; provided, that, unless and until Agent shall have received such directions, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to or by reason of
such Event of Default or failure of condition precedent, as it shall deem advisable in the best interest of Lenders. Without limiting the foregoing, and notwithstanding the existence or occurrence and continuance of an Event of Default or any other
failure to satisfy any of the conditions precedent set forth in Section 4 of this Agreement to the contrary, unless and until otherwise directed by the Required Lenders, Agent may, but shall have no obligation to, continue to make Loans and
Issuing Bank may, but shall have no obligation to, issue or cause to be issued any Letter of Credit for the ratable account and risk of Lenders from time to time if Agent believes making such Loans or issuing or causing to be issued such Letter of
Credit is in the best interests of Lenders. 
  
 (b) Except with
the prior written consent of Agent, no Secured Party may assert or exercise any enforcement right or remedy in respect of the Loans, Letter of Credit Obligations or other Obligations, as against any Borrower or Guarantor or any of the Collateral or
other property of any Borrower or Guarantor. 
  

 104 

 12.4 Wachovia in its Individual Capacity. With respect to its Commitment and the Loans made and
Letters of Credit issued or caused to be issued by it (and any successor acting as Agent), so long as Wachovia shall be a Lender hereunder, it shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it
were not acting as Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include Wachovia in its individual capacity as Lender hereunder. Wachovia (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) lend money to, make investments in and generally engage in any kind of business with Borrowers (and any of its Subsidiaries or Affiliates) as if it were not acting as Agent, and
Wachovia and its Affiliates may accept fees and other consideration from any Borrower or Guarantor and any of its Subsidiaries and Affiliates for services in connection with this Agreement or otherwise without having to account for the same to
Lenders. 
  
 12.5 Indemnification. Lenders agree to
indemnify Agent and Issuing Bank (to the extent not reimbursed by Borrowers hereunder and without limiting any obligations of Borrowers hereunder) ratably, in accordance with their Pro Rata Shares, for any and all claims of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Financing Agreement or any
other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including the costs and expenses that Agent is obligated to pay hereunder) or the enforcement of any of the terms hereof or thereof
or of any such other documents, provided, that, no Lender shall be liable for any of the foregoing to the extent it arises from the gross negligence or willful misconduct of the party to be indemnified as determined by a final
non-appealable judgment of a court of competent jurisdiction. The foregoing indemnity shall survive the payment of the Obligations and the termination or non-renewal of this Agreement. 
  
 12.6 Non-Reliance on Agent and Other Lenders. Each Secured Party agrees that it has, independently and without
reliance on Agent or any other Secured Party, and based on such documents and information as it has deemed appropriate, made its own credit analysis of Borrowers and Guarantors and has made its own decision to enter into this Agreement and that it
will, independently and without reliance upon Agent or any other Secured Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any of the other Financing Agreements. Agent shall not be required to keep itself informed as to the performance or observance by any Borrower or Guarantor of any term or provision of this Agreement or any of the other
Financing Agreements or any other document referred to or provided for herein or therein or to inspect the properties or books of any Borrower or Guarantor. Agent will use reasonable efforts to provide Lenders with any information received by Agent
from any Borrower or Guarantor which is required to be provided to Lenders or deemed to be requested by Lenders hereunder and with a copy of any Notice of Default or Failure of Condition received by Agent from any Borrower or any Lender;
provided, that, Agent shall not be liable to any Lender for any failure to do so, except to the extent that such failure is attributable to Agent’s own gross negligence or willful misconduct as determined by a final non-appealable
judgment of a court of competent jurisdiction. Except for notices, reports and other documents expressly required to be furnished to Lenders by Agent or deemed requested by Lenders hereunder, Agent shall not have any duty or responsibility to
provide any Lender with any other credit or other information concerning the affairs, financial condition or business of any Borrower or Guarantor that may come into the possession of Agent. 
  

 105 

 12.7 Failure to Act. Except for action expressly required of Agent hereunder and under the other
Financing Agreements, Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from Lenders of their indemnification obligations under
Section 12.5 hereof against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. 
  
 12.8 Additional Loans. Agent shall not make any Revolving Loans or Issuing Bank provide any Letter of Credit to any Borrower on behalf of Lenders
intentionally and with actual knowledge that such Revolving Loans or Letter of Credit would cause the aggregate amount of the total outstanding Revolving Loans and Letters of Credit to such Borrower to exceed the Borrowing Base of such Borrower,
without the prior consent of all Lenders, except, that, Agent may make such additional Revolving Loans or Issuing Bank may provide such additional Letter of Credit on behalf of Lenders, intentionally and with actual knowledge that such Revolving
Loans or Letter of Credit will cause the total outstanding Revolving Loans and Letters of Credit to such Borrower to exceed the Borrowing Base of such Borrower, as Agent may deem necessary or advisable in its discretion, provided,
that: (a) the total principal amount of the additional Revolving Loans or additional Letters of Credit to any Borrower which Agent may make or provide after obtaining such actual knowledge that the aggregate principal amount of the
Revolving Loans equal or exceed the Borrowing Bases of Borrowers, plus the amount of Special Agent Advances made pursuant to Section 12.11(a)(ii) hereof then outstanding, shall not exceed the aggregate amount equal to ten (10%) of the
Revolving Loan Limit and shall not cause the total principal amount of the Loans and Letters of Credit to exceed the Maximum Credit and (b) no such additional Revolving Loan or Letter of Credit shall be outstanding more than ninety
(90) days after the date such additional Revolving Loan or Letter of Credit is made or issued (as the case may be), except as the Required Lenders may otherwise agree. Each Lender shall be obligated to pay Agent the amount of its Pro Rata Share
of any such additional Revolving Loans or Letters of Credit. 
  
 12.9 Concerning the Collateral and the Related Financing Agreements. Each Secured Party authorizes and directs Agent to enter into this Agreement and the other Financing Agreements. Each Secured Party agrees that any action taken by
Agent or Required Lenders in accordance with the terms of this Agreement or the other Financing Agreements and the exercise by Agent or Required Lenders of their respective powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Secured Parties. 
  
 12.10 Field Audit, Examination Reports and other Information; Disclaimer by Lenders. By signing this Agreement, each Lender: 
  
 (a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field
audit or examination report and report with respect to the Borrowing Base prepared or received by Agent (each field audit or examination report and report with respect to the Borrowing Base being referred to herein as a “Report” and
collectively, “Reports”), appraisals with respect to the Collateral and financial statements with respect to Parent and its Subsidiaries received by Agent; 
  

 106 

 (b) expressly agrees and acknowledges that Agent (i) does not make any representation or warranty as
to the accuracy of any Report, appraisal or financial statement or (ii) shall not be liable for any information contained in any Report, appraisal or financial statement; 
  
 (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or any other
party performing any audit or examination will inspect only specific information regarding Borrowers and Guarantors and will rely significantly upon Borrowers’ and Guarantors’ books and records, as well as on representations of
Borrowers’ and Guarantors’ personnel; and 
  
 (d) agrees
to keep all Reports confidential and strictly for its internal use in accordance with the terms of Section 13.5 hereof, and not to distribute or use any Report in any other manner. 
  
 12.11 Collateral Matters. 
  

(a) Agent may, at its option, from time to time, at any time on or after an Event of Default and for so long as the same is continuing or upon any
other failure of a condition precedent to the Loans and Letters of Credit hereunder, make such disbursements and advances (“Special Agent Advances”) which Agent, in its sole discretion, (i) deems necessary or desirable either to
preserve or protect the Collateral or any portion thereof or (ii) to enhance the likelihood or maximize the amount of repayment by Borrowers and Guarantors of the Loans and other Obligations, provided, that, (A) the aggregate
principal amount of the Special Agent Advances pursuant to this clause (ii) outstanding at any time, plus the then outstanding principal amount of the additional Loans and Letters of Credit which Agent may make or provide as set forth in
Section 12.8 hereof, shall not exceed the amount equal to ten (10%) percent of the Revolving Loan Limit and (B) the aggregate principal amount of the Special Agent Advances pursuant to this clause (ii) outstanding at any time,
plus the then outstanding principal amount of the Loans, shall not exceed the Maximum Credit, except at Agent’s option, provided, that, to the extent that the aggregate principal amount of Special Agent Advances plus the then
outstanding principal amount of the Loans exceed the Maximum Credit the Special Agent Advances that are in excess of the Maximum Credit shall be for the sole account and risk of Agent and notwithstanding anything to the contrary set forth below, no
Lender shall have any obligation to provide its share of such Special Agent Advances in excess of the Maximum Credit, or (iii) to pay any other amount chargeable to any Borrower or Guarantor pursuant to the terms of this Agreement or any of the
other Financing Agreements consisting of (A) costs, fees and expenses and (B) payments to Issuing Bank in respect of any Letter of Credit Obligations. The Special Agent Advances shall be repayable on demand and together with all interest
thereon shall constitute Obligations secured by the Collateral. Special Agent Advances shall not constitute Loans but shall otherwise constitute Obligations hereunder. Interest on Special Agent Advances shall be payable at the Interest Rate then
applicable to Prime Rate Loans and shall be payable on demand. Without limitation of its obligations pursuant to Section 6.11, each Lender agrees that it shall make available to Agent, upon Agent’s demand, in immediately available funds,
the amount equal to 

  

 107 

 
such Lender’s Pro Rata Share of each such Special Agent Advance. If such funds are not made available to Agent by such Lender, such Lender shall be
deemed a Defaulting Lender and Agent shall be entitled to recover such funds, on demand from such Lender together with interest thereon for each day from the date such payment was due until the date such amount is paid to Agent at the Federal Funds
Rate for each day during such period (as published by the Federal Reserve Bank of New York or at Agent’s option based on the arithmetic mean determined by Agent of the rates for the last transaction in overnight Federal funds arranged prior to
9:00 a.m. (New York City time) on that day by each of the three leading brokers of Federal funds transactions in New York City selected by Agent) and if such amounts are not paid within three (3) days of Agent’s demand, at the highest
Interest Rate provided for in Section 3.1 hereof applicable to Prime Rate Loans. 
  
 (b) Lenders hereby irrevocably authorize Agent, at its option and in its discretion to release any security interest in, mortgage or lien upon, any of the Collateral (i) upon termination of the Commitments and
payment and satisfaction of all of the Obligations and delivery of cash collateral to the extent required under Section 13.1 below, or (ii) constituting property being sold or disposed of if Administrative Borrower or any Borrower or
Guarantor certifies to Agent that the sale or disposition is made in compliance with Section 9.7 hereof (and Agent may rely conclusively on any such certificate, without further inquiry), or (iii) constituting property in which any
Borrower or Guarantor did not own an interest at the time the security interest, mortgage or lien was granted or at any time thereafter, or (iv) having a value in the aggregate in any twelve (12) month period of less than $4,000,000, and
to the extent Agent may release its security interest in and lien upon any such Collateral pursuant to the sale or other disposition thereof, such sale or other disposition shall be deemed consented to by Lenders and any proceeds from such sale or
other disposition shall be applied to the Obligations, or (v) if required or permitted under the terms of any of the other Financing Agreements, including any intercreditor agreement, or (vi) approved, authorized or ratified in writing by
all of Lenders. Except as provided above, Agent will not release any security interest in, mortgage or lien upon, any of the Collateral without the prior written authorization of all of Lenders. Upon request by Agent at any time, Lenders will
promptly confirm in writing Agent’s authority to release particular types or items of Collateral pursuant to this Section. Nothing contained herein shall be construed to require the consent of any Bank Product Provider to any release of any
Collateral or termination of security interests in any Collateral. 
  
 (c) Without any manner limiting Agent’s authority to act without any specific or further authorization or consent by the Required Lenders, each Lender agrees to confirm in writing, upon request by Agent, the authority to release
Collateral conferred upon Agent under this Section. Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be necessary to evidence the release of the security interest, mortgage or liens granted to Agent upon
any Collateral to the extent set forth above; provided, that, (i) Agent shall not be required to execute any such document on terms which, in Agent’s opinion, would expose Agent to liability or create any obligations or
entail any consequence other than the release of such security interest, mortgage or liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any security interest, mortgage
or lien upon (or obligations of any Borrower or Guarantor in respect of) the Collateral retained by such Borrower or Guarantor. 
  

 108 

 (d) Agent shall have no obligation whatsoever to any Secured Party or any other Person to investigate,
confirm or assure that the Collateral exists or is owned by any Borrower or Guarantor or is cared for, protected or insured or has been encumbered, or that any particular items of Collateral meet the eligibility criteria applicable in respect of the
Loans or Letters of Credit hereunder, or whether any particular reserves are appropriate, or that the liens and security interests granted to Agent pursuant hereto or any of the Financing Agreements or otherwise have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent in this Agreement or in any of the other Financing Agreements, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, subject to the other
terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its discretion, given Agent’s own interest in the Collateral as a Lender and that Agent shall have no duty or liability whatsoever to any other
Secured Party. 
  
 12.12 Agency for Perfection. Each
Secured Party hereby appoints Agent and each other Secured Party as agent and bailee for the purpose of perfecting the security interests in and liens upon the Collateral of Agent in assets which, in accordance with Article 9 of the UCC can be
perfected only by possession (or where the security interest of a secured party with possession has priority over the security interest of another secured party) and Agent and each Secured Party hereby acknowledges that it holds possession of any
such Collateral for the benefit of Agent as secured party. Should any Secured Party obtain possession of any such Collateral, such Secured Party shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver such
Collateral to Agent or in accordance with Agent’s instructions. 
  
 12.13 Successor Agent. Agent may resign as Agent upon thirty (30) days’ notice to Lenders and Parent. If Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor agent for
Lenders. If no successor agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with Lenders and Parent, a successor agent from among Lenders. Upon the acceptance by the Lender so selected of
its appointment as successor agent hereunder, such successor agent shall succeed to all of the rights, powers and duties of the retiring Agent and the term “Agent” as used herein and in the other Financing Agreements shall mean such
successor agent and the retiring Agent’s appointment, powers and duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 12 shall inure to its benefit as to any
actions taken or omitted by it while it was Agent under this Agreement. If no successor agent has accepted appointment as Agent by the date which is thirty (30) days after the date of a retiring Agent’s notice of resignation, the retiring
Agent’s resignation shall nonetheless thereupon become effective and Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. 
  
 12.14 Other Agent Designations. Agent may at any time and from time to
time determine that a Lender may, in addition, be a “Co-Agent”, “Documentation Agent” or similar designation hereunder and enter into an agreement with such Lender to have it so identified for purposes of this Agreement. Any such
designation shall be effective upon written notice by Agent to Administrative Borrower of any such designation. Any Lender that is so designated as a Co-Agent, Syndication Agent, Documentation Agent or such similar designation by Agent 

  

 109 

 
shall have no right, power, obligation, liability, responsibility or duty under this Agreement or any of the other Financing Agreements other than those
applicable to all Lenders as such. Without limiting the foregoing, the Lenders so identified shall not have or be deemed to have any fiduciary relationship with any Lender and no Lender shall be deemed to have relied, nor shall any Lender rely, on a
Lender so identified as a Co-Agent, Syndication Agent, Documentation Agent or such similar designation in deciding to enter into this Agreement or in taking or not taking action hereunder. 
  
 SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS 
  
 13.1 Term. 
  
 (a) This Agreement and the other Financing Agreements shall become effective
as of the date set forth on the first page hereof and shall continue in full force and effect for a term ending on the date five (5) years from the date hereof (the “Maturity Date”). Borrowers may terminate this Agreement at any time
upon ten (10) days prior written notice to Agent (which notice shall be irrevocable) and Agent may, at its option, and shall at the direction of Required Lenders, terminate this Agreement at any time on or after an Event of Default and for so
long as the same is continuing. Upon the Maturity Date or any other effective date of termination of the Financing Agreements, Borrowers shall pay to Agent all outstanding and unpaid Obligations and shall furnish cash collateral to Agent (or at
Agent’s option, a letter of credit issued for the account of Borrowers and at Borrowers’ expense, in form and substance satisfactory to Agent, by an issuer acceptable to Agent and payable to Agent as beneficiary) in such amounts as Agent
determines are reasonably necessary to secure Agent, Lenders and Issuing Bank from loss, cost, damage or expense, including attorneys’ fees and expenses, in connection with any contingent Obligations, including issued and outstanding Letter of
Credit Obligations and checks or other payments provisionally credited to the Obligations and/or as to which Agent or any Lender has not yet received final and indefeasible payment (and including any contingent liability of Agent to any bank at
which deposit accounts of Borrowers and Guarantors are maintained under any Deposit Account Control Agreement) and for any of the Obligations arising under or in connection with any Bank Products in such amounts as the party providing such Bank
Products may require (unless such Obligations arising under or in connection with any Bank Products are paid in full in cash and terminated in a manner satisfactory to such other party). The amount of such cash collateral (or letter of credit, as
Agent may determine) as to any Letter of Credit Obligations shall be in the amount equal to one hundred five (105%) percent of the amount of the Letter of Credit Obligations plus the amount of any fees and expenses payable in connection
therewith through the end of the latest expiration date of the then outstanding Letters of Credit. Such payments in respect of the Obligations and cash collateral shall be remitted by wire transfer in Federal funds to the Agent Payment Account or
such other bank account of Agent, as Agent may, in its discretion, designate in writing to Administrative Borrower for such purpose. Interest shall be due until and including the next Business Day, if the amounts so paid by Borrowers to the Agent
Payment Account or other bank account designated by Agent are received in such bank account later than 12:00 noon, Los Angeles time. 
  
 (b) No termination of the Commitments, this Agreement or any of the other Financing Agreements shall relieve or discharge any Borrower or Guarantor of its
respective duties, obligations and covenants under this Agreement or any of the other Financing 

  

 110 

 
Agreements until all Obligations have been fully and finally discharged and paid, and Agent’s continuing security interest in the Collateral and the
rights and remedies of Agent and Lenders hereunder, under the other Financing Agreements and applicable law, shall remain in effect until all such Obligations have been fully and finally discharged and paid. Accordingly, each Borrower and Guarantor
waives any rights it may have under the UCC to demand the filing of termination statements with respect to the Collateral and Agent shall not be required to send such termination statements to Borrowers or Guarantors, or to file them with any filing
office, unless and until this Agreement shall have been terminated in accordance with its terms and all Obligations paid and satisfied in full in immediately available funds. 
  
 13.2 Interpretative Provisions. 
  
 (a) All terms used herein which are defined in Article 1, Article 8 or Article 9 of the UCC shall have the meanings given
therein unless otherwise defined in this Agreement. 
  
 (b) All
references to the plural herein shall also mean the singular and to the singular shall also mean the plural unless the context otherwise requires. 
  
 (c) All references to any Borrower, Guarantor, Agent and Lenders pursuant to the definitions set forth in the recitals hereto, or to any other person
herein, shall include their respective successors and assigns. 
  
 (d) The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not any particular provision of
this Agreement and as this Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 
  
 (e) The word “including” when used in this Agreement shall mean “including, without limitation” and the word “will” when
used in this Agreement shall be construed to have the same meaning and effect as the word “shall”. 
  
 (f) An Event of Default shall exist or continue or be continuing until such Event of Default is waived in accordance with Section 11.3 or is cured in
a manner satisfactory to Agent, if such Event of Default is capable of being cured as determined by Agent. 
  
 (g) All references to the term “good faith” used herein when applicable to Agent or any Lender shall mean, notwithstanding anything to the
contrary contained herein or in the UCC, honesty-in-fact in the conduct or transaction concerned and observance of reasonable commercial standards of fair dealing based on how an asset-based lender with similar rights providing a credit facility of
the type set forth herein would act in similar circumstances at the time with the information then available to it. 
  
 (h) Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given in accordance with
GAAP, and all financial computations hereunder shall be computed unless otherwise specifically provided herein, in accordance with GAAP as consistently applied and using the same method for inventory valuation as used in the preparation of the
financial statements of Parent most recently received by Agent prior to the date hereof. Notwithstanding anything to the contrary contained 

  

 111 

 
in GAAP or any interpretations or other pronouncements by the Financial Accounting Standards Board or otherwise, the term “unqualified opinion” as
used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is unqualified and also does not include any explanation, supplemental comment or other comment concerning the ability of the applicable person
to continue as a going concern or the scope of the audit. 
  
 (i)
In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each mean “to but excluding” and the word
“through” means “to and including”. 
  
 (j)
Unless otherwise expressly provided herein, (i) references herein to any agreement, document or instrument shall be deemed to include all subsequent amendments, modifications, supplements, extensions, renewals, restatements or replacements with
respect thereto, but only to the extent the same are not prohibited by the terms hereof or of any other Financing Agreement, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, recodifying, supplementing or interpreting the statute or regulation. 
  
 (k) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

  
 (l) This Agreement and other Financing Agreements may use
several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. 
  
 (m) This Agreement and the other Financing Agreements are the result of
negotiations among and have been reviewed by counsel to Agent and the other parties, and are the products of all parties. Accordingly, this Agreement and the other Financing Agreements shall not be construed against Agent or Lenders merely because
of Agent’s or any Lender’s involvement in their preparation. 
  
 13.3 Notices. 
  
 (a) All notices, requests and
demands hereunder shall be in writing and deemed to have been given or made: if delivered in person, immediately upon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and upon confirmation of receipt if during
normal business hours of the recipient, otherwise on the next Business Day; if by nationally recognized overnight courier service with instructions to deliver the next Business Day, one (1) Business Day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing. Notices delivered through electronic communications shall be effective to the extent set forth in Section 13.3(b) below. All notices, requests and demands upon the parties are to be
given to the following addresses (or to such other address as any party may designate by notice in accordance with this Section): 
  

			
	If to any Borrower or Guarantor:	    	 c/o Merix Corporation
 1521 Poplar Lane
 Forest Grove, Oregon 97116
 Attention: Chief Financial Officer
 Telephone No.: (503) 359-9300
 Telecopy No.: (503)
357-1504

  

 112 

			
	with a copy to:	    	 Perkins Coie LLP
 1120 N.W. Couch Street
 Tenth Floor
 Portland, Oregon 97209-4128
 Attention: George K. Fogg
 Telephone No.: (503) 727-2022
 Telecopy No.: (503) 346-2022

		
	If to Agent or Issuing Bank:	    	 Wachovia Capital Finance Corporation
 (Western)
 251 South Lake Avenue
 Suite 900

Pasadena, California 91101
 Attention: Portfolio Manager
 Telephone No.: (626) 304-4900
 Telecopy No.: (626)
304-4949

  
 (b) Notices and other
communications to Lenders and Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Agent or as otherwise determined by Agent,
provided, that, the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to Section 2 hereof if such Lender or Issuing Bank, as applicable, has notified Agent that it is incapable of receiving notices under
such Section by electronic communication. Unless Agent otherwise requires, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided, that, if such notice or other communication is not given during the normal business hours of the
recipient, such notice shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communications is available and identifying the website address therefor. 
  
 13.4 Partial Invalidity. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not invalidate this Agreement as a whole, but this Agreement shall be construed as though it did not contain the particular provision held to be invalid or unenforceable and the
rights and obligations of the parties shall be construed and enforced only to such extent as shall be permitted by applicable law. 
  

 113 

 13.5 Confidentiality. 
  
 (a) Agent, each Lender and Issuing Bank shall use all reasonable efforts to keep confidential, in accordance with safe and
sound lending practices, any non-public information supplied to it by any Borrower pursuant to this Agreement which is clearly and conspicuously marked as confidential at the time such information is furnished by such Borrower to Agent, such Lender
or Issuing Bank, provided, that, nothing contained herein shall limit the disclosure of any such information: (i) to the extent required by statute, rule, regulation, subpoena or court order, (ii) to bank examiners and other
regulators, auditors and/or accountants, in connection with any litigation to which Agent, such Lender or Issuing Bank is a party, (iii) to any Lender or Participant (or prospective Lender or Participant) or Issuing Bank or to any Affiliate of
any Lender so long as such Lender, Participant (or prospective Lender or Participant), Issuing Bank or Affiliate shall have been instructed to treat such information as confidential in accordance with this Section 13.5, or (iv) to counsel
for Agent, any Lender, Participant (or prospective Lender or Participant) or Issuing Bank. 
  
 (b) In the event that Agent, any Lender or Issuing Bank receives a request or demand to disclose any confidential information pursuant to any subpoena or court order, Agent or such Lender or Issuing Bank, as the case
may be, agrees (i) to the extent permitted by applicable law or if permitted by applicable law, to the extent Agent or such Lender or Issuing Bank determines in good faith that it will not create any risk of liability to Agent or such Lender or
Issuing Bank, Agent or such Lender or Issuing Bank will promptly notify Administrative Borrower of such request so that Administrative Borrower may seek a protective order or other appropriate relief or remedy and (ii) if disclosure of such
information is required, disclose such information and, subject to reimbursement by Borrowers of Agent’s or such Lender’s or Issuing Bank’s expenses, cooperate with Administrative Borrower in the reasonable efforts to obtain an order
or other reliable assurance that confidential treatment will be accorded to such portion of the disclosed information which Administrative Borrower so designates, to the extent permitted by applicable law or if permitted by applicable law, to the
extent Agent or such Lender or Issuing Bank determines in good faith that it will not create any risk of liability to Agent or such Lender or Issuing Bank. 
  
 (c) In no event shall this Section 13.5 or any other provision of this Agreement, any of the other Financing Agreements or applicable law be deemed:
(i) to apply to or restrict disclosure of information that has been or is made public by any Borrower, Guarantor or any third party or otherwise becomes generally available to the public other than as a result of a disclosure in violation
hereof, (ii) to apply to or restrict disclosure of information that was or becomes available to Agent, any Lender (or any Affiliate of any Lender) or Issuing Bank on a non-confidential basis from a person other than a Borrower or Guarantor,
(iii) to require Agent, any Lender or Issuing Bank to return any materials furnished by a Borrower or Guarantor to Agent, a Lender or Issuing Bank or prevent Agent, a Lender or Issuing Bank from responding to routine informational requests in
accordance with the Code of Ethics for the Exchange of Credit Information promulgated by The Robert Morris Associates or other applicable industry standards relating to the exchange of credit information. The obligations of Agent, Lenders and
Issuing Bank under this Section 13.5 shall supersede and replace the obligations of Agent, Lenders and Issuing Bank under any confidentiality letter signed prior to the date hereof or any other arrangements concerning the confidentiality of
information provided by any Borrower or Guarantor to Agent or any Lender. In addition, Agent and Lenders may disclose information relating to the Credit Facility to Gold Sheets and other similar bank trade publications, with such information to
consist of deal terms and other information customarily found in such publications. 
  

 114 

 13.6 Successors. This Agreement, the other Financing Agreements and any other document referred to
herein or therein shall be binding upon and inure to the benefit of and be enforceable by Agent, Secured Parties, Borrowers, Guarantors and their respective successors and assigns, except that Borrower may not assign its rights under this Agreement,
the other Financing Agreements and any other document referred to herein or therein without the prior written consent of Agent and Lenders. Any such purported assignment without such express prior written consent shall be void. No Secured Party may
assign its rights and obligations under this Agreement without the prior written consent of Agent, except as provided in Section 13.7 below. The terms and provisions of this Agreement and the other Financing Agreements are for the purpose of
defining the relative rights and obligations of Borrowers, Guarantors, Agent and Secured Parties with respect to the transactions contemplated hereby and there shall be no third party beneficiaries of any of the terms and provisions of this
Agreement or any of the other Financing Agreements. 
  
 13.7
Assignments; Participations. 
  
 (a) Each Lender may, with
the prior written consent of Agent and Administrative Borrower (which consent of Administrative Borrower shall not be unreasonably withheld, conditioned or delayed), assign all or, if less than all, a portion equal to at least $5,000,000 in the
aggregate for the assigning Lender, of such rights and obligations under this Agreement to one or more Eligible Transferees (but not including for this purpose any assignments in the form of a participation), each of which assignees shall become a
party to this Agreement as a Lender by execution of an Assignment and Acceptance; provided, that, (i) the prior written consent of Administrative Borrower shall not be required at any time a Default or Event of Default shall exist
or have occurred and be continuing, or in the case of a transfer or assignment to an existing Lender, to any Affiliate or Approved Fund of an existing Lender or a transfer or assignment upon the merger, consolidation, sale or transfer or other
disposition of the business of a Lender, (ii) such transfer or assignment will not be effective until recorded by Agent on the Register and (iii) Agent shall have received for its sole account payment of a processing fee from the assigning
Lender or the assignee in the amount of $5,000, other than for assignments to Affiliates or an Approved Fund of the assigning Lender. 
  
 (b) Agent shall maintain a register of the names and addresses of Lenders, their Commitments and the principal amount of their Loans (the
“Register”). Agent shall also maintain a copy of each Assignment and Acceptance delivered to and accepted by it and shall modify the Register to give effect to each Assignment and Acceptance. The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and any Borrowers, Guarantors, Agent and Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by Administrative Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice. 
  
 (c) Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a 
  

 115 

 
party hereto and to the other Financing Agreements and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations (including, without limitation, the obligation to participate in Letter of Credit Obligations) of a Lender hereunder and thereunder and the assigning Lender shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement. 
  
 (d) By execution and delivery of an Assignment and Acceptance, the assignor and assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or any of the other Financing Agreements or the execution, legality, enforceability, genuineness, sufficiency or value of this Agreement or any of the other Financing
Agreements furnished pursuant hereto, (ii) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower, Guarantor or any of their Subsidiaries or the performance
or observance by any Borrower or Guarantor of any of the Obligations; (iii) such assignee confirms that it has received a copy of this Agreement and the other Financing Agreements, together with such other documents and information it has
deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such assignee will, independently and without reliance upon the assigning Lender, Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Financing Agreements, (v) such assignee appoints and authorizes Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement and the other Financing Agreements as are delegated to Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and
(vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the other Financing Agreements are required to be performed by it as a Lender. Agent and Lenders may
furnish any information concerning any Borrower or Guarantor in the possession of Agent or any Lender from time to time to assignees and Participants. 
  
 (e) Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this
Agreement and the other Financing Agreements (including, without limitation, all or a portion of its Commitments and the Loans owing to it and its participation in the Letter of Credit Obligations, without the consent of Agent or the other Lenders);
provided, that, (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitment hereunder) and the other Financing Agreements shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations, and Borrowers, Guarantors, the other Lenders and Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Financing Agreements, and (iii) the Participant shall not have any rights under this Agreement or any of the other Financing Agreements (the Participant’s rights against such Lender in respect
of such participation to be those set forth in the agreement executed by such Lender in favor of the Participant relating thereto) and all amounts payable by any Borrower or Guarantor hereunder shall be determined as if such Lender had not sold such
participation. 
  

 116 

 (f) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans hereunder to a
Federal Reserve Bank in support of borrowings made by such Lenders from such Federal Reserve Bank; provided, that, no such pledge shall release such Lender from any of its obligations hereunder or substitute any such pledgee for such
Lender as a party hereto. 
  
 (g) Borrowers and Guarantors shall
assist Agent or any Lender permitted to sell assignments or participations under this Section 13.7 in whatever manner reasonably necessary in order to enable or effect any such assignment or participation, including (but not limited to) the
execution and delivery of any and all agreements, notes and other documents and instruments as shall be requested and the delivery of informational materials, appraisals or other documents for, and the participation of relevant management in
meetings and conference calls with, potential Lenders or Participants. Borrowers shall certify the correctness, completeness and accuracy, in all material respects, of all descriptions of Borrowers and Guarantors and their affairs provided, prepared
or reviewed by any Borrower or Guarantor that are contained in any selling materials and all other information provided by it and included in such materials. 
  
 (h) Any Lender that is an Issuing Bank may at any time assign all of its Commitments pursuant to this Section 13.7. If such Issuing Bank ceases to be
Lender, it may, at its option, resign as Issuing Bank and such Issuing Bank’s obligations to issue Letters of Credit shall terminate but it shall retain all of the rights and obligations of Issuing Bank hereunder with respect to Letters of
Credit outstanding as of the effective date of its resignation and all Letter of Credit Obligations with respect thereto (including the right to require Lenders to make Revolving Loans or fund risk participations in outstanding Letter of Credit
Obligations), shall continue. 
  
 13.8 Entire Agreement.
This Agreement, the other Financing Agreements, any supplements hereto or thereto, and any instruments or documents delivered or to be delivered in connection herewith or therewith represents the entire agreement and understanding concerning the
subject matter hereof and thereof between the parties hereto, and supersede all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject
matter hereof, whether oral or written. In the event of any inconsistency between the terms of this Agreement and any schedule or exhibit hereto, the terms of this Agreement shall govern. 
  
 13.9 USA Patriot Act. Each Lender subject to the USA Patriot Act (Title III of Pub.L. 107-56, signed into law
October 26, 2001), (the “Act”) hereby notifies Borrowers and Guarantors that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each person or corporation who opens an
account and/or enters into a business relationship with it, which information includes the name and address of Borrowers and Guarantors and other information that will allow such Lender to identify such person in accordance with the Act and any
other applicable law. Borrowers and Guarantors are hereby advised that any Loans or Letters of Credit hereunder are subject to satisfactory results of such verification. 
  
 13.10 Counterparts, Etc. This Agreement or any of the other Financing Agreements may be executed in any number of
counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement or any of the other Financing Agreements by telefacsimile or other
electronic method of transmission shall have the same force and effect as the delivery of an original executed counterpart of this Agreement or any of such other Financing Agreements. Any party delivering an executed counterpart of any such
agreement by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement. 
  

 117 

 IN WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have caused these presents to be duly
executed as of the day and year first above written. 
  

			
	BORROWERS
	
	MERIX CORPORATION
		
	By:	 	 /s/ Janie S. Brown

	Title:	 	Chief Financial Officer
	
	MERIX SAN JOSE, INC.
		
	By:	 	 /s/ Janie S. Brown

	Title:	 	Chief Financial Officer
	
	GUARANTORS
	
	MERIX NEVADA, INC.
		
	By:	 	 /s/ Janie S. Brown

	Title:	 	Chief Financial Officer
	
	MERIX ASIA, INC.
		
	By:	 	 /s/ Janie S. Brown

	Title:	 	Chief Financial Officer
	
	DATA CIRCUIT HOLDINGS, INC.
		
	By:	 	 /s/ Janie S. Brown

	Title:	 	Chief Financial Officer

  

 118 

			
	AGENT
	
	 WACHOVIA CAPITAL FINANCE
 CORPORATION
(WESTERN), as Agent

		
	By:	 	 /s/ Dan Cott

	Title:	 	Director
	
	ISSUING BANK
	
	 WACHOVIA BANK, NATIONAL
 ASSOCIATION

		
	By:	 	 /s/ Dan Cott

	Title:	 	Director
	
	LENDERS
	
	 WACHOVIA CAPITAL FINANCE
 CORPORATION
(WESTERN)

		
	By:	 	 /s/ Dan Cott

	Title:	 	Director
	
	Commitment: $35,000,000
	
	BANK OF AMERICA, N.A.
		
	By:	 	 /s/ Steve Sharp

	Title:	 	Vice President
	
	Commitment: $20,000,000

  

 119 

 EXHIBIT A 
 to 
 LOAN AND SECURITY AGREEMENT 
  
 ASSIGNMENT AND ACCEPTANCE AGREEMENT 
  
 This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Assignment and Acceptance”) dated as of
                    , 200   is made
between                         (the “Assignor”) and
                         (the “Assignee”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, Wachovia Capital Finance Corporation (Western), in its capacity as
agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are parties thereto as lenders (in such capacity, “Agent”), and the financial institutions which are parties to the
Loan Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”) have entered or are about to enter into financing arrangements pursuant to which Agent and Lenders may make loans and advances and provide
other financial accommodations to Merix Corporation and Merix San Jose, Inc. (collectively, “Borrowers”) as set forth in the Loan and Security Agreement, dated September 28, 2005, by and among Borrowers, certain of their affiliates,
Agent and Lenders (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”), and the other agreements, documents and instruments referred to therein or at
any time executed and/or delivered in connection therewith or related thereto (all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the “Financing Agreements”); 
  
 WHEREAS, as provided under the Loan Agreement, Assignor committed to making Loans (the “Committed Loans”) to Borrowers in an aggregate amount not to exceed
$             (the “Commitment”); 
  
 WHEREAS, Assignor wishes to assign to Assignee [part of the] [all] rights and obligations of Assignor under the Loan Agreement in respect of its
Commitment in an amount equal to $             (the “Assigned Commitment Amount”) on the terms and subject to the conditions set forth herein and Assignee wishes to accept
assignment of such rights and to assume such obligations from Assignor on such terms and subject to such conditions; 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows: 
  

 A-1 

 1. Assignment and Acceptance. 
  
 (a) Subject to the terms and conditions of this Assignment and Acceptance, Assignor hereby sells, transfers and assigns to
Assignee, and Assignee hereby purchases, assumes and undertakes from Assignor, without recourse and without representation or warranty (except as provided in this Assignment and Acceptance) an interest in (i) the Commitment and each of the
Committed Loans of Assignor and (ii) all related rights, benefits, obligations, liabilities and indemnities of the Assignor under and in connection with the Loan Agreement and the other Financing Agreements, so that after giving effect thereto,
the Commitment of Assignee shall be as set forth below and the Pro Rata Share of Assignee shall be             (    %) percent. 
  
 (b) With effect on and after the Effective Date (as defined in Section 5
hereof), Assignee shall be a party to the Loan Agreement and succeed to all of the rights and be obligated to perform all of the obligations of a Lender under the Loan Agreement, including the requirements concerning confidentiality and the payment
of indemnification, with a Commitment in an amount equal to the Assigned Commitment Amount. Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender. It is the intent of the parties hereto that the Commitment of Assignor shall, as of the Effective Date, be reduced by an amount equal to the Assigned Commitment Amount and Assignor shall relinquish its rights and be
released from its obligations under the Loan Agreement to the extent such obligations have been assumed by Assignee; provided, that, Assignor shall not relinquish its rights under Sections 2.2, 6.4, 6.9, 11.5 and 12.5 of the Loan
Agreement to the extent such rights relate to the time prior to the Effective Date. 
  
 (c) After giving effect to the assignment and assumption set forth herein, on the Effective Date Assignee’s Commitment will be $            .

  
 (d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date Assignor’s Commitment will be $             (as such amount may be further reduced by any other assignments by Assignor on or after the date
hereof). 
  
 2. Payments. 
  
 (a) As consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, Assignee shall pay to Assignor on the Effective Date in immediately available funds an amount equal to $            , representing Assignee’s Pro Rata
Share of the principal amount of all Committed Loans. 
  
 (b)
Assignee shall pay to Agent the processing fee in the amount specified in Section 13.7(a) of the Loan Agreement. 
  
 3. Reallocation of Payments. Any interest, fees and other payments accrued to the Effective Date with respect to the Commitment, Committed Loans
and outstanding Letters of Credit shall be for the account of Assignor. Any interest, fees and other payments accrued on and after the Effective Date with respect to the Assigned Commitment Amount shall be for the account of Assignee. Each of
Assignor and Assignee agrees that it will hold in trust for the other party any interest, fees and other amounts which it may receive to which the other party is entitled pursuant to the preceding sentence and pay to the other party any such amounts
which it may receive promptly upon receipt. 
  

 A-2 

 4. Independent Credit Decision. Assignee acknowledges that it has received a copy of the Loan
Agreement and the Schedules and Exhibits thereto, together with copies of the most recent financial statements of                  and its Subsidiaries, and such
other documents and information as it has deemed appropriate to make its own credit and legal analysis and decision to enter into this Assignment and Acceptance and agrees that it will, independently and without reliance upon Assignor, Agent or any
Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit and legal decisions in taking or not taking action under the Loan Agreement. 
  
 5. Effective Date; Notices. 
  
 (c) As between Assignor and Assignee, the effective date for this Assignment
and Acceptance shall be                     , 200   (the “Effective Date”); provided, that, the
following conditions precedent have been satisfied on or before the Effective Date: 
  
 (i) this Assignment and Acceptance shall be executed and delivered by Assignor and Assignee; 
  
 (ii) the consent of Agent as required for an effective assignment of the Assigned Commitment Amount by Assignor to Assignee shall have been duly obtained
and shall be in full force and effect as of the Effective Date; 
  
 (iii) written notice of such assignment, together with payment instructions, addresses and related information with respect to Assignee, shall have been given to Administrative Borrower and Agent; 
  
 (iv) Assignee shall pay to Assignor all amounts due to Assignor under this
Assignment and Acceptance; and 
  
 (v) the processing fee
referred to in Section 2(b) hereof shall have been paid to Agent. 
  
 (d) Promptly following the execution of this Assignment and Acceptance, Assignor shall deliver to Administrative Borrower and Agent for acknowledgment by Agent, a Notice of Assignment in the form attached hereto as Schedule 1. 

 
 6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT] 
  
 (e) Assignee hereby appoints and authorizes Assignor in its capacity as
Agent to take such action as agent on its behalf to exercise such powers under the Loan Agreement as are delegated to Agent by Lenders pursuant to the terms of the Loan Agreement. 
  
 (f) Assignee shall assume no duties or obligations held by Assignor in its capacity as Agent under the Loan Agreement.]

  

 A-3 

 7. Withholding Tax. Assignee (a) represents and warrants to Assignor, Agent and Borrowers
that under applicable law and treaties no tax will be required to be withheld by Assignee, Agent or Borrowers with respect to any payments to be made to Assignee hereunder or under any of the Financing Agreements, (b) agrees to furnish (if it
is organized under the laws of any jurisdiction other than the United States or any State thereof) to Agent and Borrowers prior to the time that Agent or Borrowers are required to make any payment of principal, interest or fees hereunder, duplicate
executed originals of either U.S. Internal Revenue Service Form W-8BEN or W-8ECI, as applicable (wherein Assignee claims entitlement to the benefits of a tax treaty that provides for a complete exemption from U.S. federal income withholding tax on
all payments hereunder) and agrees to provide new such forms upon the expiration of any previously delivered form or comparable statements in accordance with applicable U.S. law and regulations and amendments thereto, duly executed and completed by
Assignee, and (c) agrees to comply with all applicable U.S. laws and regulations with regard to such withholding tax exemption. 
  
 8. Representations and Warranties. 
  
 (a) Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any security interest, lien, encumbrance or other adverse claim, (ii) it is duly organized and existing and it has the full power and authority to take, and has taken, all action necessary to execute and deliver
this Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connection with this Assignment and Acceptance and to fulfill its obligations hereunder, (iii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance, and apart from any agreements or undertakings or filings required
by the Loan Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance, and (iv) this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of Assignor, enforceable against Assignor in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other laws of general
application relating to or affecting creditors’ rights and to general equitable principles. 
  
 (b) Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in
connection with the Loan Agreement or any of the other Financing Agreements or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other instrument or document furnished pursuant thereto.
Assignor makes no representation or warranty in connection with, and assumes no responsibility with respect to, the solvency, financial condition or statements of Borrowers, Guarantors or any of their respective Affiliates, or the performance or
observance by Borrowers, Guarantors or any other Person, of any of its respective obligations under the Loan Agreement or any other instrument or document furnished in connection therewith. 
  
 (c) Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action necessary to execute and 

  

 A-4 

 
deliver this Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connection with this Assignment and
Acceptance, and to fulfill its obligations hereunder, (ii) no notices to, or consents, authorizations or approvals of, any Person are required (other than any already given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the Loan Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance; and
(iii) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of Assignee, enforceable against Assignee in accordance with the terms hereof, subject, as to enforcement,
to bankruptcy, insolvency, moratorium, reorganization and other laws of general application relating to or affecting creditors’ rights to general equitable principles. 
  
 9. Further Assurances. Assignor and Assignee each hereby agree to execute and deliver such other instruments, and
take such other action, as either party may reasonably request in connection with the transactions contemplated by this Assignment and Acceptance, including the delivery of any notices or other documents or instruments to Borrowers or Agent, which
may be required in connection with the assignment and assumption contemplated hereby. 
  
 10. Miscellaneous. 
  
 (d)
Any amendment or waiver of any provision of this Assignment and Acceptance shall be in writing and signed by the parties hereto. No failure or delay by either party hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof and any waiver of any breach of the provisions of this Assignment and Acceptance shall be without prejudice to any rights with respect to any other for further breach thereof. 
  
 (e) All payments made hereunder shall be made without any set-off or
counterclaim. 
  
 (f) Assignor and Assignee shall each pay its own
costs and expenses incurred in connection with the negotiation, preparation, execution and performance of this Assignment and Acceptance. 
  
 (g) This Assignment and Acceptance may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute
one and the same instrument. 
  
 (h) THIS ASSIGNMENT AND
ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF                     . Assignor and Assignee each
irrevocably submits to the non-exclusive jurisdiction of any State or Federal court sitting in                  County,
             over any suit, action or proceeding arising out of or relating to this Assignment and Acceptance and irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such                  State or Federal court. Each party to this Assignment and Acceptance hereby irrevocably waives, to
the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. 
  

 A-5 

 (i) ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING AGREEMENTS OR ANY RELATED DOCUMENTS AND AGREEMENTS OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN). 
  
 IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and Acceptance to be executed and delivered by their duly authorized officers as of the date first above written. 
  

			
	 [ASSIGNOR]

		
	 By:
	 	  

	 Title:
	 	  

	
	 [ASSIGNEE]

		
	 By:
	 	  

	 Title:
	 	  

  

 A-6 

 SCHEDULE 1 
  
 NOTICE OF ASSIGNMENT AND ACCEPTANCE 
  
                     ,
20     
  

			
	  

	  

	  

	Attn.:	 	  

  

			
	Re:	 	  

  
 Ladies and Gentlemen: 
  
 Wachovia Capital Finance
Corporation (Western), in its capacity as agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are parties thereto as lenders (in such capacity, “Agent”), and the
financial institutions which are parties to the Loan Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”) have entered or are about to enter into financing arrangements pursuant to which Agent and
Lenders may make loans and advances and provide other financial accommodations to Merix Corporation and Merix San Jose, Inc. (collectively, “Borrowers”) as set forth in the Loan and Security Agreement, dated
                    , 2005, by and among Borrowers, certain of their affiliates, Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”), and the other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or
related thereto (all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the “Financing
Agreements”). Capitalized terms not otherwise defined herein shall have the respective meanings ascribed thereto in the Loan Agreement. 
  
 1. We hereby give you notice of, and request your consent to, the assignment by
                         (the “Assignor”) to
                                     (the
“Assignee”) such that after giving effect to the assignment Assignee shall have an interest equal to              (    %) percent of the total
Commitments pursuant to the Assignment and Acceptance Agreement attached hereto (the “Assignment and Acceptance”). We understand that the Assignor’s Commitment shall be reduced by
$            , as the same may be further reduced by other assignments on or after the date hereof. 
  
 2. Assignee agrees that, upon receiving the consent of Agent to such assignment, Assignee will be bound by the terms of the
Loan Agreement as fully and to the same extent as if the Assignee were the Lender originally holding such interest under the Loan Agreement. 
  

 A-7 

 3. The following administrative details apply to Assignee: 
  

	 	(A)	Notice address: 

  

			
	 Assignee name:
	 	  

	 Address:
	 	  

	 Attention:
	 	  

	 Telephone:
	 	  

	 Telecopier:
	 	  

  

	 	(B)	Payment instructions: 

  

			
	 Account No.:
	 	  

	 At:
	 	  

	 Reference:
	 	  

	 Attention:
	 	  

  
 4. You are entitled to
rely upon the representations, warranties and covenants of each of Assignor and Assignee contained in the Assignment and Acceptance. 
  

 A-8 

 IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of Assignment and Acceptance to be
executed by their respective duly authorized officials, officers or agents as of the date first above mentioned. 
  

			
	Very truly yours,
	
	[NAME OF ASSIGNOR]
		
	By:	 	  

	Title:	 	  

	
	[NAME OF ASSIGNEE]
		
	By:	 	  

	Title:	 	  

  
 ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO: 
  
 WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN), as Agent 
  

			
	By:	 	  

	Title:	 	  

  

 A-9 

 EXHIBIT D 
 TO 
 LOAN AND SECURITY AGREEMENT 
  
 Compliance Certificate 
  

	To:	Wachovia Capital Finance Corporation (Western), as Agent 

	 	251 South Lake Avenue 

	 	Suite 900 

	 	Pasadena, California 91101 

  
 Ladies and Gentlemen: 
  
 I hereby certify to you pursuant to Section 9.6 of the Loan Agreement (as defined below) as follows: 
  
 1. I am the duly elected Chief Financial Officer of Merix Corporation, an
Oregon corporation and Merix San Jose, Inc., a California corporation (collectively, “Borrowers”). Capitalized terms used herein without definition shall have the meanings given to such terms in the Loan and Security Agreement, dated
                , 2005, by and among Wachovia Capital Finance Corporation (Western), as agent for the parties thereto as lenders (in such capacity,
“Agent”) and the financial institutions party thereto as lenders (collectively, “Lenders”), Borrowers and certain of their affiliates (as such Loan and Security Agreement is amended, modified or supplemented, from time to time,
the “Loan Agreement”). 
  
 2. I have reviewed the terms
of the Loan Agreement, and have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions and the financial condition of Borrowers and Guarantors, during the immediately preceding fiscal month.

  
 3. The review described in Section 2 above did not
disclose the existence during or at the end of such fiscal month, and I have no knowledge of the existence and continuance on the date hereof, of any condition or event which constitutes a Default or an Event of Default, except as set forth on
Schedule I attached hereto. Described on Schedule I attached hereto are the exceptions, if any, to this Section 3 listing, in detail, the nature of the condition or event, the period during which it has existed and the action which any Borrower
or Guarantor has taken, is taking, or proposes to take with respect to such condition or event. 
  
 4. I further certify that, based on the review described in Section 2 above, no Borrower or Guarantor has at any time during or at the end of such
fiscal month, except as specifically described on Schedule II attached hereto or as permitted by the Loan Agreement, done any of the following: 
  
 (a) Changed its respective corporate name, or transacted business under any trade name, style, or fictitious name, other than those previously described
to you and set forth in the Financing Agreements. 
  

 C-1 

 (b) Changed the location of its chief executive office, changed its jurisdiction of incorporation,
changed its type of organization or changed the location of or disposed of any of its properties or assets (other than pursuant to the sale of Inventory in the ordinary course of its business or as otherwise permitted by Section 9.7 of the Loan
Agreement), or established any new asset locations. 
  
 (c)
Materially changed the terms upon which it sells goods (including sales on consignment) or provides services, nor has any vendor or trade supplier to any Borrower or Guarantor during or at the end of such period materially adversely changed the
terms upon which it supplies goods to any Borrower or Guarantor. 
  
 (d) Permitted or suffered to exist any security interest in or liens on any of its properties, whether real or personal, other than as specifically permitted in the Financing Agreements. 
  
 (e) Received any notice of, or obtained knowledge of any of the following not
previously disclosed to Agent: (i) the occurrence of any event involving the release, spill or discharge of any Hazardous Material in violation of applicable Environmental Law in a material respect or (ii) any investigation, proceeding,
complaint, order, directive, claims, citation or notice with respect to: (A) any non-compliance with or violation of any applicable Environmental Law by any Borrower or Guarantor in any material respect or (B) the release, spill or
discharge of any Hazardous Material in violation of applicable Environmental Law in a material respect or (C) the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials in
violation of applicable Environmental Laws in a material respect or (D) any other environmental, health or safety matter, which has a material adverse effect on any Borrower or Guarantor or its business, operations or assets or any properties
at which such Borrower or Guarantor transported, stored or disposed of any Hazardous Materials. 
  
 (f) Become aware of, obtained knowledge of, or received notification of, any breach or violation of any material covenant contained in any instrument or
agreement in respect of Indebtedness for money borrowed by any Borrower or Guarantor. 
  
 (g) Filed any application for the registration of a Trademark or Patent with the United States Patent and Trademark Office or any similar office or agency in the United States of America, any State thereof, any
political subdivision thereof or in any other country. 
  
 5.
Attached hereto as Schedule III are the calculations used in determining, as of the end of such fiscal month whether Borrowers and Guarantors are in compliance with the covenants set forth in Section 9.17 of the Loan Agreement for such fiscal
month. 
  
 6. Attached hereto as Schedule IV are the calculations
used in determining, as of the end of such fiscal month, the Debt Ratio (as defined in the Merix 6.5% Debenture) for such fiscal month. 
  
 The foregoing certifications are made and delivered this day of
                , 20    . 
  

			
	Very truly yours,
	
	  

		
	By:	 	  

	Title:	 	  

  

 C-2Credit Agreement

 Exhibit 10.3 
  
 

 
  
 Allen & Overy 
  
 EXECUTION COPY 
  
 CREDIT AGREEMENT 
  
 USD30,000,000 
  
 CREDIT FACILITIES 
  
 for 
  
 MERIX CAYMANS TRADING COMPANY LIMITED 
  
 with 
  
 STANDARD CHARTERED BANK (HONG KONG) LIMITED 
 as Facility Agent 
  
 and 
  
 STANDARD CHARTERED BANK (HONG KONG) LIMITED 
 as Security Agent 
  
 2005 

 CONTENTS 
  

					
	 Clause

	  	 	  	Page

	1.	  	Interpretation	  	1
	2.	  	Facilities	  	18
	3.	  	Purpose	  	18
	4.	  	Conditions precedent	  	19
	5.	  	Utilisation - Loans	  	20
	6.	  	Repayment	  	21
	7.	  	Prepayment and cancellation	  	21
	8.	  	Interest	  	28
	9.	  	Terms	  	30
	10.	  	Market disruption	  	31
	11.	  	Taxes	  	32
	12.	  	Increased costs	  	33
	13.	  	Mitigation	  	34
	14.	  	Payments	  	35
	15.	  	Guarantee and indemnity	  	37
	16.	  	Representations and warranties	  	40
	17.	  	Information covenants	  	46
	18.	  	Financial covenants	  	50
	19.	  	General covenants	  	55
	20.	  	Default	  	69
	21.	  	Security	  	75
	22.	  	The Agents	  	78
	23.	  	Evidence and calculations	  	83
	24.	  	Fees	  	84
	25.	  	Indemnities and Break Costs	  	85
	26.	  	Expenses	  	86
	27.	  	Amendments and waivers	  	87
	28.	  	Changes to the Parties	  	89
	29.	  	Disclosure of confidential information	  	92
	30.	  	Set-off	  	93
	31.	  	Pro rata sharing	  	93
	32.	  	Severability	  	94
	33.	  	Counterparts	  	94
	34.	  	Notices	  	94
	35.	  	Language	  	97
	36.	  	Governing law	  	98
	37.	  	Enforcement	  	98

 Schedule 
  

					
	 1.
	  	Original Parties	  	100
	 	  	Part 1           Original Obligors	  	100
	 	  	 Part 2           Original Lenders
	  	101
	 2.
	  	Conditions precedent documents	  	102
	 	  	 Part 1           To be delivered before the first utilisation
	  	102
	 	  	 Part 2           To be delivered before second utilisation
	  	105
	 	  	Part 3           To be delivered in respect of an Additional Guarantor	  	107
	 	  	Part 4           To be delivered in respect of additional security	  	109
	 	  	Part 5           Form of Closing Confirmation Notice	  	110
	 3.
	  	Form of Request	  	112
	 4.
	  	Form of Transfer Certificate	  	113
	 5.
	  	Security Documents	  	116
	 6.
	  	Form of Compliance Certificate	  	117
	 7.
	  	Form of Margin Certificate	  	118
	 8.
	  	Form of Accession Agreement	  	119
	 9.
	  	Form of Merix Letter of Support	  	120
	 10.
	  	Form of Seller Loan Note Instrument	  	121
	 11.
	  	Structure Memorandum	  	125
		
	 Signatories
	  	i

 THIS AGREEMENT is dated September 27, 2005 
  
 BETWEEN: 
  

	(1)	MERIX CAYMANS HOLDING COMPANY LIMITED (registered number CT-153771) with its registered office at the offices of Codan Trust Company (Cayman) Limited, Century Yard, Cricket
Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand Cayman, Cayman Islands (the Company); 

  

	(2)	THE PERSON listed in Part 1 of Schedule 1 (Original Parties) as borrower (in this capacity the Borrower); 

  

	(3)	THE PERSONS listed in Part 1 of Schedule 1 (Original Parties) as original guarantors (in this capacity the Original Guarantors); 

  

	(4)	THE PERSONS listed in Part 2 of Schedule 1 (Original Parties) as original lenders (the Original Lenders); 

  

	(5)	STANDARD CHARTERED BANK (HONG KONG) LIMITED as facility agent (in this capacity the Facility Agent); 

  

	(6)	STANDARD CHARTERED BANK (HONG KONG) LIMITED as security agent and trustee (in this capacity the Security Agent); and 

  

	(7)	STANDARD CHARTERED BANK (HONG KONG) LIMITED in its capacity as the administrative agent under the Capex Facility Agreement (as defined below) (in this capacity the
Administrative Agent). 

  
 IT IS AGREED as follows: 
  

	1.	INTERPRETATION 

  

	1.1	Definitions 

  
 In this Agreement: 
  
 Accession Agreement means an agreement substantially in the form of Schedule 8 (Form of Accession Agreement), with such amendments as the Facility
Agent and the Company may agree. 
  
 Accounting Date means
any one of the following dates: 22 April 2006, 22 July 2006, 21 October 2006, 20 January 2007, 21 April 2007, 21 July 2007, 20 October 2007, 26 January 2008, 26 April 2008, 26 July 2008,
25 October 2008 and 24 January 2009, or otherwise as may be agreed between the Company and the Facility Agent. 
  
 Accounting Period means a period of approximately one year or three months (as the case may be) ending on an Accounting Date for which Accounts are
required to be prepared under this Agreement. 
  
 Accounting
Month means a period of four or five weeks determined as follows: 
  

	 	(a)	each three month Accounting Period has three Accounting Months; 

  

	 	(b)	the first and second Accounting Months in each three month Accounting Period shall be four week periods; and 

  

 1 

	 	(c)	the third Accounting Month in a three month Accounting Period shall be a five week Period. 

  
 Accounting Standards means accounting standards which are generally accepted in the United States of America and
approved by the relevant regulatory or other accounting bodies in that jurisdiction. 
  
 Accounts means each set of financial statements required to be prepared by a member of the Group and supplied to the Facility Agent under this Agreement. 
  
 Acquisition means the acquisition by the Borrower of the Target Group
and the acquisition by the Borrower and certain of its Subsidiaries of the Target Assets pursuant to the Acquisition Documents. 
  
 Acquisition Costs means all fees, costs, expenses and stamp, registration or transfer Taxes incurred by (or otherwise required to be paid by)
members of the Merix Group in connection with the Acquisition, the Transaction Documents and the Wachovia Facility up to the date six months after Closing. 
  
 Acquisition Documents means: 
  

	 	(a)	the sale and purchase agreement dated 14 April 2005 between the Seller and Merix Corporation; 

  

	 	(b)	letter from Merix Corporation to the Seller dated 28 July 2005; 

  

	 	(c)	letter from Merix Corporation to the Seller dated 16 September 2005; and 

  

	 	(d)	the amended and restated sale and purchase agreement dated on or about 27 September 2005 between the Seller and Merix Corporation, 

  
 and all transfers and other instruments made pursuant to any of them.

  
 Additional Guarantor means a member of the Group which
becomes a Guarantor after the date of this Agreement under Clause 28.6 (Additional Guarantors). 
  
 Affiliate means a Subsidiary or a Holding Company of a person or any other Subsidiary of that Holding Company. 
  
 Agent means the Facility Agent or the Security Agent, as appropriate.

  
 Approved Bank means 
  

	 	(a)	a bank or financial institution which has a rating for its long-term unsecured and non-credit enhanced debt obligations of AA or higher by S&P or Fitch or Aa2 or higher by
Moody’s or a comparable rating from an internationally recognised credit rating agency; or 

  

	 	(b)	any other bank or financial institution approved by the Facility Agent. 

  
 Auditors means PricewaterhouseCoopers or such other independent public accountants of international standing which may be appointed by Merix
Corporation and the Company as their auditors. 
  

 2 

 Availability Period means the period from and including the date of this Agreement to and
including: 
  

	 	(a)	for the Term Loan Facility, the 90th day after Eastern Pacific Circuits Investments (Singapore) Pte. Ltd.(to be renamed Merix Holding (Singapore) Pte. Ltd.) has completed the
whitewash procedure under section 76 of the Corporation Act of Singapore for the purposes of providing a guarantee and security in connection with the Finance Documents; and 

  

	 	(b)	for the Revolving Credit Facility, one month prior to the Final Maturity Date, 

  
 Book-to-Bill Ratio means, in relation to the Group, the ratio of the aggregate amount of all confirmed orders
received in an Accounting Month to the aggregate amount of all invoices issued in that Accounting Month. 
  
 Break Costs means the amount (if any) which a Lender is entitled to receive under Clause 25.4 (Break Costs). 
  
 Business Day means a day (other than a Saturday or a Sunday) on which
banks are open for general business in Hong Kong and New York and if on that day a payment in or a purchase of a currency is to be made, the principal financial centre of the country of that currency. 
  
 Capex Facility Agreement means the credit agreement dated
28 April 2004 and made between the Eastern Pacific Circuits Investments (Singapore) Pte. Ltd. and the Lenders, as amended by an amendment agreement dated 5 July 2005 and an amendment agreement to be executed on the Closing Date.

  
 Capex Loan means the USD5,100,000 facility made
available by the Lenders to Eastern Pacific Circuits Investments (Singapore) Pte. Ltd. pursuant to the Capex Facility Agreement. 
  
 Capital Expenditure means any expenditure which is treated as capital expenditure in accordance with the Accounting Standards. 
  
 Cash means cash in hand or credit balances or amounts on deposit with
any Approved Bank which is: 
  

	 	(a)	accessible by a member of the Group within 30 days; and 

  

	 	(b)	not subject to any Security Interest (other than one existing under the Security Documents). 

  
 Cash Equivalent means at any time: 
  

	 	(a)	certificates of deposit maturing within one year after the relevant date of calculation, issued by an Approved Bank; 

  

	 	(b)	any investment in marketable obligations issued or guaranteed by the government of the United States of America or by an instrumentality or agency of any of them having an
equivalent credit rating which: 

  

	 	(i)	matures within one year after the relevant date of calculation; and 

  

	 	(ii)	is not convertible to any other security; 

  

	 	(c)	open market commercial paper (including variable rate demand notes and taxable auction variable rate notes) not convertible to any other security: 

  

	 	(i)	for which a recognised trading market exists; 

  

	 	(ii)	issued in the United States of America; 

  

 3 

	 	(iii)	which matures within one year after the relevant date of calculation; and 

  

	 	(iv)	which has a credit rating of either A-1 or higher by S&P or Fitch or P-1 or higher by Moody’s, or, if no rating is available in respect of the commercial paper, the issuer
of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; 

  

	 	(d)	investments accessible within 30 days in money market funds which: 

  

	 	(i)	have a credit rating of either A-1 or higher by S&P or Fitch or P-1 or higher by Moody’s; and 

  

	 	(ii)	invest substantially all their assets in securities of the types described in paragraphs (a) to (c) above; or 

  

	 	(e)	any other debt security or investment approved by the Majority Lenders, 

  
 in each case, to which any member of the Group is beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or
subject to any Security Interest (other than one arising under the Security Documents). 
  
 Chief Executive Officer means: 
  

	 	(a)	Daniel Olson as chief executive officer of the Company or his replacement; or 

  

	 	(b)	any director of the Company acting as that officer’s deputy in that capacity or performing those functions. 

  
 Chief Financial Officer means: 
  

	 	(a)	Amy Y.S. Chan as finance director of the Company or her replacement; or 

  

	 	(b)	any director of the Company acting as that officer’s deputy in that capacity or performing those functions. 

  
 Closing means execution of the Closing Confirmation Notice by all
parties to it. 
  
 Closing Confirmation Notice means the
notice substantially in the form of Part 5 (Form of Closing Confirmation Notice) of Schedule 2 (Condition precedent documents). 
  
 Closing Date means the date on which Closing occurs. 
  
 Commitment means a Term Loan Commitment or a Revolving Credit Commitment. 
  
 Compliance Certificate means a certificate, substantially in the form of Schedule 6 (Form of Compliance Certificate).

  
 Consolidated Cashflow, Consolidated EBITDA,
Consolidated Net Working Capital, Consolidated Total Debt Service, Consolidated Total Interest Payable, Consolidated Total Borrowings and Consolidated Total Interest Payable each has the meaning given to it in
Clause 18 (Financial covenants). 
  
 Default means:

  

	 	(a)	an Event of Default; or 

  

 4 

	 	(b)	an event or circumstance which would be (with the expiry of a grace period, the giving of notice, the making of any determination or the satisfaction of any other applicable
condition under the Finance Documents or any combination of them) an Event of Default. 

  
 EPC Credit Agreement means the credit agreement dated 10 August 2000 and made between, among others, Eastern Pacific Circuits Limited and
Eastern Pacific Circuits (HK) Limited and the Lenders, as amended by the First Amendment Agreement dated 12 June 2002 and the Second Amendment Agreement dated 12 August 2003. 
  
 EPC Dongguan means Eastern Pacific Circuits (Dongguan) Limited

. 
  
 EPC Facilities
means the USD150,000,000 facilities made available by the Lenders to Eastern Pacific Circuits Limited and Eastern Pacific Circuits (HK) Limited pursuant to the EPC Credit Agreement. 
  
 EPC Lomber means Lomber (Huizhou) Limited

. 
  
 EPCHY means
Eastern Pacific Circuits (Huiyang) Limited

. 
  
 EPCHZ means
Eastern Pacific Circuits (Huizhou) Limited

. 
  
 Environmental
Approval means any authorisation required by Environmental Law. 
  
 Environmental Claim means any claim by any person in connection with: 
  

	 	(a)	a breach, or alleged breach, of Environmental Law; 

  

	 	(b)	any accident, fire, explosion or other event of any type involving an emission or substance which is capable of causing harm to any living organism or the environment; or

  

	 	(c)	any other environmental contamination. 

  
 Environmental Law means any law or regulation concerning: 
  

	 	(a)	the protection of health; 

  

	 	(b)	the environment; 

  

	 	(c)	the conditions of the workplace; or 

  

	 	(d)	any emission or substance which is capable of causing harm to any living organism or the environment. 

  
 Event of Default means an event specified as such in Clause 20 (Default). 
  
 Excess Cashflow means, for any annual Accounting Period of the
Company, Consolidated Cashflow for that period minus Consolidated Total Debt Service for that period. 
  
 Executive Officer means the Chief Executive Officer or the Chief Financial Officer. 
  
 Facility means a Term Loan Facility or a Revolving Credit Facility. 
  

 5 

 Facility Office means the office(s) notified by a Lender to the Facility Agent: 
  

	 	(a)	on or before the date it becomes a Lender; or 

  

	 	(b)	by not less than five Business Days’ notice, 

  
 as the office(s) through which it will perform its obligations under this Agreement. 
  
 Fee Letter means the letter entered into by reference to this Agreement between one or more Agents and the Borrower
setting out the amount of certain fees referred to in this Agreement. 
  
 Final Maturity Date means 15 March 2009. 
  
 Finance Document means: 
  

	 	(a)	this Agreement; 

  

	 	(b)	a Fee Letter; 

  

	 	(c)	an Accession Agreement; 

  

	 	(d)	a Transfer Certificate; 

  

	 	(e)	a Security Document; 

  

	 	(f)	a Subordination Agreement; 

  

	 	(g)	a Compliance Certificate; 

  

	 	(h)	a Margin Certificate; 

  

	 	(i)	a Request; 

  

	 	(j)	the Merix Letter of Support; 

  

	 	(k)	any other document designated as such by the Facility Agent and the Company. 

  

Finance Party means a Lender or an Agent. 
  
 Financial Indebtedness means any indebtedness for or in respect of the following (without double counting): 
  

	 	(a)	moneys borrowed; 

  

	 	(b)	debit balances at a financial institution (net of credit balances at that financial institution); 

  

	 	(c)	any acceptance credit or bill discounting facility (including any dematerialised equivalent); 

  

	 	(d)	any bond, note, debenture, loan stock or other similar instrument; 

  

	 	(e)	any share in any member of the Group which is not held by another member of the Group and which by its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable, in each case at the option of the holder of that security) is capable of maturing or being mandatorily redeemable or redeemable at the option of its holder in whole or in part on or before the Senior Discharge Date;

  

 6 

	 	(f)	any agreement treated as a finance or capital lease in accordance with the Accounting Standards; 

  

	 	(g)	receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis and any receivables sold to Merix Corporation in connection with the
Acquisition) ; 

  

	 	(h)	the acquisition cost of any asset or service from a person other than a member of the Group to the extent payable before or after its acquisition or possession by the party liable
where the advance or deferred payment: 

  

	 	(i)	is arranged primarily as a method of raising finance or financing the acquisition or construction of that asset or the acquisition of that service (but excluding trade credit on
customary commercial terms); or 

  

	 	(ii)	involves a period of more than three months before or after the date of acquisition or supply; 

  

	 	(i)	any Treasury Transaction (and, except for non-payment of an amount, the mark to market value of a Treasury Transaction will be used to calculate its amount);

  

	 	(j)	any other transaction (including any forward sale or purchase agreement and any sale and sale back, sale and lease back or deferred purchase arrangement) which has the commercial
effect of a borrowing; 

  

	 	(k)	any counter-indemnity obligation in respect of any guarantee, indemnity, bond, letter of credit or other instrument issued by a bank or financial institution; or

  

	 	(l)	any guarantee in respect of an underlying liability of any person which is of the nature referred to in the above paragraphs. 

  
 Fitch means Fitch Ratings Limited or any successor to its rating
business. 
  
 Group means the Company and its
Subsidiaries. 
  
 Group Subordination Agreement means the
subordination agreement dated on or about the date of this Agreement between, among others, members of the Merix Group, members of the Group and the Lenders. 
  

Guarantor means an Original Guarantor or an Additional Guarantor. 
  
 Holding Company of any other person means a person in respect of which that other person is a Subsidiary. 

 
 Increased Cost means: 
  

	 	(a)	an additional or increased cost; 

  

	 	(b)	a reduction in the rate of return from a Facility or on a Finance Party’s (or its Affiliate’s) overall capital; or 

  

	 	(c)	a reduction of an amount due and payable under any Finance Document, 

  

 7 

 which is incurred or suffered by a Finance Party or any of its Affiliates but only to the extent
attributable to that Finance Party having entered into any Finance Document or funding or performing its obligations under any Finance Document. 
  
 Information means all information delivered by or on behalf of an Obligor or the Investor to a Finance Party, in relation to the Acquisition, the
Target Group, the Obligors, and the Facilities on or before the Closing Date. 
  
 Insurance means any contract of insurance taken out by or on behalf of a member of the Group or under which it has a right to claim. 
  
 Intellectual Property Rights means: 
  

	 	(a)	any know-how, patent, trade mark, service mark, design, business name, domain name, topographical or similar right; 

  

	 	(b)	any copyright, data base or other intellectual property right; or 

  

	 	(c)	any interest (including by way of licence) in the above, 

  
 in each case whether registered or not, and includes any related application. 
  
 Interest means: 
  

	 	(a)	interest and amounts in the nature of interest accrued; 

  

	 	(b)	prepayment penalties or premiums incurred in repaying or prepaying any Financial Indebtedness; 

  

	 	(c)	discount fees and acceptance fees payable or deducted in respect of any Financial Indebtedness, including fees payable in respect of any letters of credit and guarantees;

  

	 	(d)	any net payment (or, if appropriate in the context, receipt) under hedging agreement or instrument, taking into account any premiums payable; and 

  

	 	(e)	any other payments and deductions of similar effect (including the interest element of finance leases), 

  
 and Interest includes commitment and non-utilisation fees (including those payable under the Finance Documents), but
excludes agent’s and front-end, management, arrangement and participation fees with respect to any Financial Indebtedness (including those payable under the Finance Documents). 
  
 Investor means Merix Asia, Inc., a company incorporated in Oregon, the United States of America. 
  
 Joint Venture means any joint venture entity, partnership or similar
person, the ownership of or other interest in which does not require any member of the Group to consolidate the results of that person with its own as a Subsidiary. 
  
 Lender means: 
  

	 	(a)	an Original Lender; or 

  

	 	(b)	any person which becomes a Lender after the date of this Agreement under Clause 28.2 (Assignments and transfers by Lenders). 

  

 8 

 Leverage Ratio means the ratio of Consolidated Total Borrowings at a quarterly Accounting Date to
Consolidated EBITDA for the four quarterly Account Periods immediately preceding that Accounting Date. 
  
 LIBOR means for a Term of any Loan or overdue amount: 
  

	 	(a)	the applicable Screen Rate; or 

  

	 	(b)	if no Screen Rate is available for that Term of that Loan or overdue amount, the arithmetic mean (rounded upward to four decimal places) of the rates, as supplied to the Facility
Agent at its request, quoted by the Reference Banks, 

  
 as of 11.00 a.m. London time on the Rate Fixing Day for the offering of deposits in the currency of that Loan or overdue amount for a period comparable to that Term. 
  
 Loan means the principal amount of each borrowing under a Facility or the principal amount outstanding of that
borrowing. 
  
 Majority Lenders means, at any time,
Lenders: 
  

	 	(a)	whose shares in the outstanding Loans and undrawn Commitments then aggregate 66 2/3 per cent. or more of the aggregate of all the outstanding Loans and undrawn Commitments of all the Lenders; 

  

	 	(b)	if there is no Loan then outstanding, whose undrawn Commitments then aggregate 66 2/3 per cent. or more of the Total Commitments; or 

  

	 	(c)	if there is no Loan then outstanding and the Total Commitments have been reduced to zero, whose Commitments aggregated 66 2/3 per cent. or more of the Total Commitments immediately before the reduction. 

  
 A Lender may by notice to the Facility Agent divide its Loans or Commitments
into separate amounts to reflect participation or similar arrangements and require the separate amounts to be counted separately for the purpose of this definition. 
  
 Margin means, at any time, the rate per annum determined in accordance with Clause 8.3 (Margin adjustments).

  
 Margin Certificate means a certificate, substantially
in the form of Schedule 7 (Form of Margin Certificate). 
  
 Material Adverse Effect means any effect which, in the opinion of the Majority Lenders, is or is reasonably likely to be materially adverse to: 
  

	 	(a)	the ability of any Obligor to perform any of its payment obligations under any of the Finance Documents (taking into account resources available to it without breaching the terms of
this Agreement from other members of the Group); 

  

	 	(b)	the ability of the Company to comply with its obligations under Clause 18 (Financial covenants); 

  

	 	(c)	the assets, prospects or financial condition of the Group taken as a whole; 

  

	 	(d)	any right or remedy of a Finance Party in respect of a Finance Document; or 

  

 9 

	 	(e)	the validity or enforceability of, or effectiveness or ranking of any security granted or purported to be granted pursuant to, any Finance Document. 

  
 Maturity Date means, for a Revolving Credit Loan, the last day of its
Term. 
  
 Merix Corporation means Merix Corporation, a
company incorporated in the State of Oregon, whose registered office is at 1521 Popular Lane, P.O. Box 3000, F4-234, Forest Grove, OR 97116, United States of America. 
  
 Merix Group means Merix Corporation and its Subsidiaries. 
  
 Merix Letter of Support means a letter from Merix Corporation to the
Facility Agent and the Lenders in the agreed form as set out in Schedule 9 (Form of the Merix Letter of Support). 
  
 MOFCOM means the PRC foreign trade and economic authority that originally approved the establishment of the relevant PRC Subsidiary and that is
authorised under PRC laws to approve the pledge provided by that Subsidiary. 
  
 Moody’s means Moody’s Investors Service Limited or any successor to its ratings business. 
  
 Net Proceeds has the meaning given to it in Clause 7.4 (Mandatory prepayment - disposals). 
  
 Non-Core Subsidiary means Eastern Pacific Circuits Investments
Limited, EPC Lomber, EPC Dongguan, Merix Singapore Sales Pte. Ltd., Merix UK Limited and Merix Circuits Corp. 
  
 Non-Obligor means a member of the Group which is not an Obligor. 
  
 Obligor means the Company, the Borrower or a Guarantor. 
  
 Original Obligor means the Company, the Borrower or an Original
Guarantor. 
  
 Party means a party to this Agreement.

  
 Permitted Joint Venture means each of EPCHZ, EPCHY,
EPC Lomber or EPC Dongguan. 
  
 Permitted Reorganisation
means: 
  

	 	(a)	a reorganisation on a solvent basis of a member of the Group (other than the Company or the Borrower) where: 

  

	 	(i)	no Default is then outstanding; 

  

	 	(ii)	all of the assets of that member remain within the Group and the value or percentage of any minority interest in any member of the Group held by any person which is not a member of
the Group is not increased; and 

  

	 	(iii)	the Lenders will enjoy (in the opinion of the Facility Agent (acting reasonably) and supported by any professional opinions and reports requested by it) at least the same or
equivalent guarantees from it (or its successor) and at least the same or equivalent security over the same assets and over the shares in it (or in each case its successor) after the reorganisation as the Lenders enjoyed before the reorganisation;
or 

  

	 	(b)	any other reorganisation of one or more members of the Group approved by the Majority Lenders. 

  

 10 

 PRC means the People’s Republic of China. 
  
 Pro Rata Share means the proportion which a Lender’s Commitment
under a Facility bears to all the Commitments under that Facility. 
  
 Rate Fixing Day means the second London Business Day before the first day of a Term for a Loan, or such other day as the Facility Agent determines is generally treated as the rate fixing day in the relevant currency by market
practice in the relevant interbank market. 
  
 Recovery
Event has the meaning given to it in Clause 7.4 (Mandatory prepayment - disposals). 
  
 Reference Banks means, in relation to LIBOR, the principal offices of Standard Chartered Bank (Hong Kong) Limited, JPMorgan Chase Bank N.A. and Commerzbank and any other bank or financial institution appointed
as such by the Facility Agent under this Agreement. 
  
 Repayment Instalment means each scheduled instalment for repayment of a Term Loan identified in Clause 6.1(a) of this Agreement. 
  
 Repeating Representations means at any time the representations and warranties which are then made or deemed to be repeated under Clause 16.24
(Times for making representations and warranties). 
  
 Request means a request for a Loan, substantially in the form of Schedule 3 (Form of Request). 
  
 Reservations means: 
  

	 	(a)	the principle that equitable remedies are remedies which may be granted or refused at the discretion of the court, the limitation of enforcement by laws relating to bankruptcy,
insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting the rights of creditors; 

  

	 	(b)	the time barring of claims under applicable limitation laws (including the Limitation Acts), the possibility that an undertaking to assume liability for or to indemnify a person
against non-payment of stamp duty may be void, defences of set-off or counterclaim; and 

  

	 	(c)	any other general principles which are set out as qualifications as to matters of law in the legal opinions delivered to the Facility Agent under Schedule 2 (Conditions precedent).

  
 Revolving Credit Commitment means:

  

	 	(a)	for an Original Lender, the amount set opposite its name in Part 2 of Schedule 1 (Original Parties) under the heading Revolving Credit Commitments and the amount of any other
Revolving Credit Commitment it acquires; and 

  

	 	(b)	for any other Lender, the amount of any Revolving Credit Commitment it acquires, 

  
 to the extent not cancelled, transferred or reduced under this Agreement. 
  
 Revolving Credit Facility means the revolving credit facility
referred to in Clause 2.2 (Revolving Credit Facility). 
  
 Revolving Credit Loan means a Loan under the Revolving Credit Facility. 
  
 Rollover Credit means one or more Loans under the Revolving Credit Facility: 
  

	 	(a)	to be made on the same day that a maturing Loan under that Facility is due to be repaid; 

  

 11 

	 	(b)	the aggregate amount of which is equal to or less than the maturing Loan; 

  

	 	(c)	in the same currency as the maturing Loan; and 

  

	 	(d)	to be made to the Borrower for the purpose of refinancing the maturing Loan. 

  

S&P means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. or any successor to its rating
business. 
  
 SAIC means the PRC industry and commerce
authority with which the relevant PRC Subsidiary is registered and which is the authority with which the relevant pledge is to be registered. 
  
 Screen Rate means for LIBOR, the rate for USD displayed on page 3750 of the Moneyline Telerate. If the relevant page is replaced or the service
ceases to be available, the Facility Agent (after consultation with the Company and the Lenders) may specify another page or service displaying the appropriate rate. 
  
 Security Document means: 
  

	 	(a)	each document referred to in Schedule 5 (Security Documents) or entered or required to be entered into under Clause 19.30 (Security); and 

  

	 	(b)	any other document evidencing or creating any guarantee or security over any asset of any Obligor to secure any obligation of any Obligor to a Finance Party under the Finance
Documents. 

  
 Security Interest means any
mortgage, pledge, lien, charge (fixed or floating), assignment, hypothecation, set-off or trust arrangement for the purpose of creating security, reservation of title or security interest or any other agreement or arrangement having a substantially
similar effect. 
  
 Seller means Eastern Pacific Circuits
Holdings Limited. 
  
 Seller Loan Note Instrument means
the unsecured subordinated loan stock instrument executed by the Borrower on or before Closing together with any loan notes or loan stock issued under the instrument, in the agreed form as set out in Schedule 10 (Form of Seller Loan Note
Instrument). 
  
 Seller Subordination Agreement means the
subordination agreement dated on or about the date of this Agreement between, among others, the Borrower, the Lenders and the Seller. 
  
 Senior Discharge Date means the date on which the Senior Debt (as defined in the Group Subordination Agreement) has been unconditionally and
irrevocably paid and discharged in full. 
  
 Structure
Memorandum means the memorandum and chart in the agreed form as set out in Schedule 11 (Structure Memorandum). 
  
 Subordination Agreement means the Seller Subordination Agreement or the Group Subordination Agreement. 
  
 Subsidiary means: 
  

	 	(a)	an entity of which a person has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting capital or similar right of ownership and control
for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise; or 

  

 12 

	 	(b)	an entity treated as a subsidiary in the financial statements of any person pursuant to the Accounting Standards. 

  
 Target Assets means the assets that the Borrower and its Subsidiaries
have agreed to purchase from the Seller and its Subsidiaries pursuant to the Acquisition Documents. 
  
 Targets means: 
  

	 	(a)	Eastern Pacific Circuits Investments Limited, to be renamed as Merix Holding (Hong Kong) Limited; and 

  

	 	(b)	Eastern Pacific Circuits Investments (Singapore) Pte Ltd., to be renamed as Merix Holding (Singapore) Pte. Ltd. 

  
 Target Group means the Targets and their Subsidiaries at Closing.

  
 Target Shares means all the shares (of whatever class)
in the capital of Targets, together with all related rights. 
  
 Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any related penalty or interest). 
  
 Tax Credit means a credit against any Tax or any relief or remission for or rebate of Tax (or its repayment). 
  
 Tax Deduction means a deduction or withholding for or on account of
Tax other than a Tax described in Subclause 11.2(b) from a payment under any Finance Document. 
  
 Tax Payment means a payment made by an Obligor to a Finance Party in any way relating to a Tax Deduction or under any indemnity given by that
Obligor in respect of Tax under any Finance Document. 
  
 Term means each period determined under this Agreement by reference to which interest on a Loan or an overdue amount is calculated. 
  
 Term Loan means a Loan under a Term Loan Facility. 
  
 Term Loan Commitment means: 
  

	 	(a)	for an Original Lender, the amount set opposite its name in Part 2 of Schedule 1 (Original Parties) under the heading Term Loan Commitments and the amount of any other Term Loan
Commitment which it acquires; and 

  

	 	(b)	for any other Lender, the amount of any other Term Loan Commitment so designated which it acquires, 

  
 in each case to the extent not cancelled, transferred or reduced under this Agreement. 
  
 Term Loan Facility means the term loan facility referred to in Clause
2.1 (Term Loan Facility). 
  
 Test Period has the meaning
given to it in Clause18 (Financial covenants). 
  

 13 

 Total Commitments means the aggregate of the Commitments of all the Lenders. 
  
 Total Revolving Credit Commitments means the aggregate of the
Revolving Credit Commitments of all the Lenders. 
  
 Total
Term Loan Commitments means the aggregate of the Term Loan Commitments of all the Lenders. 
  
 Transaction Documents means: 
  

	 	(a)	the Finance Documents; 

  

	 	(b)	the Seller Loan Note Instrument; and 

  

	 	(c)	the Acquisition Documents. 

  
 Transfer Certificate means a certificate substantially in the form of Schedule 4 (Form of Transfer Certificates) with such amendments as the
Facility Agent may approve or reasonably require or any other form agreed between the Facility Agent and the Company. 
  
 Treasury Transaction means any derivative transaction entered into in connection with protection against or to benefit from fluctuations in any
rate, price, index or credit rating. 
  
 U.S. Dollars and
USD means the lawful currency for the time being of the United States of America. 
  
 Utilisation Date means each date on which a Facility is utilised by the drawing of a Loan. 
  
 Wachovia Facility means the USD65,000,000 senior secured credit facility made available to the Merix Group by Wachovia Bank, National Association.

  

	1.2	Construction 

  

	(a)	In this Agreement, unless the contrary intention appears, a reference to: 

  

	 	(i)	a document being in the agreed form means that the document is in a form previously agreed in writing by or on behalf of the Company and the Facility Agent or if not so
agreed is in the form specified by the Facility Agent; 

  

	 	(ii)	an amendment includes an amendment, supplement, novation, re-enactment, replacement, restatement or variation and amend will be construed accordingly;

  

	 	(iii)	assets includes businesses, undertakings, securities, properties, revenues or rights of every description and whether present or future, actual or contingent;

  

	 	(iv)	an authorisation includes an authorisation, consent, approval, resolution, permit, licence, exemption, filing, registration or notarisation; 

  

	 	(v)	a communication includes any notice, order, letter or other communication; 

  

	 	(vi)	a constitutional document includes, in relation to an entity, any bylaw, memorandum, article of association, certificate of incorporation or other document concerning the
constitution of that entity; 

  

	 	(vii)	a contract or document includes any instrument, agreement, side letter, deed, indenture, note, mortgage, charge, hypothecation, assignment pledge, lien, transfer,
conveyance, assurance, bill of exchange, letter of credit, deed of trust, guarantee, indemnity, bond, insurance contract or policy or other document, instrument or obligation (including any leasing or hire-purchase agreement);

  

 14 

	 	(viii)	a cost includes any cost (including any enforcement cost), expense or fee (including any legal fee); 

  

	 	(ix)	a discharge includes any intermediate payment, discharge, arrangement, waiver, granting of time, composition, renewal, reduction, compromise, postponement, release,
indulgence, settlement, arrangement, failure to perfect, take up, exercise or enforce, non-presentation, non-provability or non-observance or failure to realise full value; 

  

	 	(x)	disposal means a sale, transfer, assignment, grant, lease, licence, declaration of trust or other disposal, whether voluntary or involuntary and whether pursuant to a single
transaction or a series of transactions, and dispose will be construed accordingly; 

  

	 	(xi)	an entity includes any individual, corporation, partnership, firm, limited liability company, association (whether or not having separate legal personality), business, trust,
undertaking (within the meaning of section 259(1) of the Companies Act 1985) or other joint venture or any other entity or organisation (including any government authority or political subdivision, agency or instrumentality thereof) together with
any permitted successor or transferee of any of the same and includes, where relevant, any party hereto; 

  

	 	(xii)	guarantee means any guarantee, bond, letter of credit, indemnity or similar assurance against financial loss, or any obligation, direct or indirect, actual or contingent, to
purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person, where, in each case, that obligation is assumed in order to maintain or assist the ability of that person to
meet any of its indebtedness; 

  

	 	(xiii)	incorporation includes the formation or establishment of a partnership or any other person and incorporate will be construed accordingly; 

  

	 	(xiv)	indebtedness includes any obligation (whether incurred as principal or as surety and whether present or future, actual or contingent) for the payment or repayment of money;

  

	 	(xv)	information includes any form of information, whether stored electronically or otherwise, (including any letter, record, report, budget, list, drawing, specification,
extract, analysis, document, notice or contract); 

  

	 	(xvi)	an invalidity includes any invalidity, illegality, irregularity, unenforceability, incapacity (whether by virtue of an Insolvency Event or otherwise), lack of power,
authority or legal personality or dissolution and the term invalid shall be construed accordingly; 

  

	 	(xvii)	jurisdiction of incorporation includes any jurisdiction under the laws of which a person is incorporated; 

  

	 	(xviii)	know your customer requirements are the identification checks that a Finance Party requests in order to meet its obligations under any applicable law or regulation to
identify a person who is (or is to become) its customer; 

  

	 	(xix)	a law includes any statute, law, rule, regulation, directive, statutory instrument, decree, guideline, ordinance, code, code of practice, article, order, court order,
concession (including any practice or concession of any taxing authority), restriction or other rule whether imposed by any jurisdiction, government (or political sub-division or agency thereof), supranational body or other authority or supervisory
organisation (whether local, national, European or international) and includes any of the same not having the force of law but which are customarily complied with by financial institutions generally; 

  

 15 

	 	(xx)	a liability includes any loss, cost, claim, damage, expense, fine, penalty or other liability (including any liability to pay taxes) and liable shall be construed
accordingly; 

  

	 	(xxi)	an officer includes any agent, director, employee, manager, adviser, trustee, lawyer, nominee, delegate, sub-delegate, representative or officer; 

  

	 	(xxii)	perfection of rights in relation to any asset includes the creation, maintenance, protection, improvement, enforcement, realisation or extension of such rights or any
facilitation of or assistance with regard to the same and perfect or perfected shall be construed accordingly; 

  

	 	(xxiii)	proceedings includes any claim, suit, demand, arbitration, dispute, or other action, process or proceeding whether actual or threatened and whether or not in connection with
any judgment, decree, order or other judicial determination (whether granted by a court, tribunal, pursuant to arbitration or otherwise) or any execution or enforcement of any of the same (including any action connected with any injunction, specific
performance, attachment, damages or otherwise); 

  

	 	(xxiv)	a provision includes any covenant, term, condition, stipulation, clause, schedule, section, proviso, paragraph, representation, warranty or other provision;

  

	 	(xxv)	a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, fund, joint venture or consortium), government,
state, agency, organisation or other entity whether or not having separate legal personality; 

  

	 	(xxvi)	a regulation includes any regulation, rule, order, official directive, request or guideline (in each case, whether or not having the force of law but, if not having the force
of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

  

	 	(xxvii)	a right includes any power, entitlement, benefit, interest, title, licence, remedy, option, privilege, reservation, easement, discretion, leasehold interest, tracing right,
voting right or right to any proceeds of sale (whether actual or contingent, present or future) or any claim, whether for damages or otherwise, relating to any of the same and the proceeds of any disposition of any of the same;

  

	 	(xxviii)	a currency is a reference to the lawful currency for the time being of the relevant country; 

  

	 	(xxix)	a Default being outstanding means that it has not been remedied or expressly waived in writing in accordance with Clause 27.4 (Waivers and remedies cumulative);

  

	 	(xxx)	a provision of law is a reference to that provision as extended, applied, amended or re enacted and includes any subordinate legislation; 

  

	 	(xxxi)	a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Agreement; 

  

	 	(xxxii)	a Party or any other person includes its successors in title, permitted assigns and permitted transferees; 

  

 16 

	 	(xxxiii)	a Finance Document or other document includes (without prejudice to any prohibition on amendments) all amendments (however fundamental) to that Finance Document or other document,
including any amendment providing for any increase in the amount of a facility or any additional facility; and 

  

	 	(xxxiv)	a time of day is a reference to Hong Kong time. 

  

	(b)	Unless the contrary intention appears, a reference to a month or months is a reference to a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that: 

  

	 	(i)	if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is
not); 

  

	 	(ii)	if there is no numerically corresponding day in that month, that period will end on the last Business Day in that month; and 

  

	 	(iii)	notwithstanding subparagraph (i) above, a period which commences on the last Business Day of a month will end on the last Business Day in the next month or the calendar month
in which it is to end, as appropriate. 

  

	(c)	Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document may not enforce any of its terms under the Contracts (Rights of
Third Parties) Act 1999 and, notwithstanding any term of any Finance Document, no consent of any third party is required for any amendment (including any release or compromise of any liability) or termination of that Finance Document.

  

	(d)	Unless the contrary intention appears: 

  

	 	(i)	a reference to a Party will not include that party if it has ceased to be a party under this Agreement; 

  

	 	(ii)	a word or expression used in any other Finance Document or in any notice given in connection with any Finance Document has the same meaning in that Finance Document or notice as in
this Agreement; 

  

	 	(iii)	if there is an inconsistency between this Agreement and another Finance Document, this Agreement will prevail unless that other Finance Document is a Subordination Agreement, in
which case that Subordination Agreement will prevail; 

  

	 	(iv)	any obligation of an Obligor under the Finance Documents which is not a payment obligation remains in force for so long as any payment obligation of an Obligor is or may be or is
capable of becoming outstanding under the Finance Documents; 

  

	 	(v)	any obligation of an Obligor under the Finance Documents includes an obligation on that Obligor not to contract or agree to do something or not to do something which would breach
that first obligation unless performance of such contract or agreement is conditional on the occurrence of the Senior Discharge Date or on the approval of the Lenders or the Majority Lenders (as required under this Agreement);

  

	 	(vi)	references to the singular shall include the plural and vice versa; 

  

	 	(vii)	the words “without limitation” shall be deemed to follow the words “include”, “includes”, or “including” wherever the same appear herein; and

  

 17 

	 	(viii)	the words “hereby”, “hereunder”, “herein”, “herewith”, “hereby” or “hereof” are references to the entire Agreement.

  

	(e)	No part of this Agreement is intended to or shall create a registrable Security Interest. 

  

	(f)	The index to and headings in this Agreement do not affect its interpretation. 

  

	2.	FACILITIES 

  

	2.1	Term Loan Facility 

  

	(a)	Subject to the terms of this Agreement, the Lenders make available to the Borrower a term loan facility in an aggregate amount equal to the Total Term Loan Commitments.

  

	(b)	The Term Loan Facility shall be made available in two parts, the first in the amount of USD21,332,681.00 on Closing and the second in the amount of USD3,667,319.00 within
Availability Period of the Term Loan Facility. 

  

	2.2	Revolving Credit Facility 

  
 Subject to the terms of this Agreement, the Lenders make available to the Borrower a revolving credit facility in an aggregate amount equal to the Total
Revolving Credit Commitments. 
  

	2.3	Nature of a Finance Party’s rights and obligations 

  
 Unless all the Finance Parties agree otherwise: 
  

	 	(a)	the obligations of a Finance Party under the Finance Documents are several; 

  

	 	(b)	failure by a Finance Party to perform its obligations does not affect the obligations of any other Party under the Finance Documents; 

  

	 	(c)	no Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents; 

  

	 	(d)	the rights of a Finance Party under the Finance Documents are separate and independent rights; 

  

	 	(e)	a Finance Party may, except as otherwise stated in the Finance Documents, separately enforce those rights; and 

  

	 	(f)	a debt arising under the Finance Documents to a Finance Party is a separate and independent debt. 

  

	3.	PURPOSE 

  

	3.1	Term Loan 

  
 Each Term Loan may only be used in or towards the repayment of the EPC Facilities and, in the case of the second Term Loan, the repayment of the Capex
Loan as agreed. 
  

	3.2	Revolving Credit Loans 

  

	(a)	Each Revolving Credit Loan may only be used in or towards: 

  

	 	(i)	in the case of the first Revolving Credit Loan, the repayment of the EPC Facilities as agreed; or 

  

 18 

	 	(ii)	in the case of any subsequent Revolving Credit Loan, the working capital requirements of the Group. 

  

	(b)	No Revolving Credit Loan may be used for payment of interest on Term Loans or repayment or prepayment of Term Loans. 

  

	3.3	No obligation to monitor 

  
 No Finance Party is bound to monitor or verify the utilisation of a Facility and no Finance Party will be responsible for, or for the consequences of,
such utilisation. 
  

	4.	CONDITIONS PRECEDENT 

  

	4.1	Conditions precedent documents 

  

	(a)	The first Term Loan and the first Revolving Credit Loan will not be made available until the Facility Agent has received all of the documents and evidence set out in Part 1 of
Schedule 2 (Conditions Precedent Documents) in form and substance satisfactory to the Facility Agent. 

  

	(b)	The second Term Loan will not be made available until the Facility Agent has notified the Company and the Lenders that it has received all of the documents and evidence set out in
Part 2 of Schedule 2 (Conditions Precedent Documents) in form and substance satisfactory to the Facility Agent. 

  

	(c)	The Facility Agent shall give notice to the Company and the Lenders promptly upon receipt of the necessary documents and evidence, and that the conditions referred to in
(a) and (b) above have been satisfied. 

  

	4.2	Further conditions precedent 

  
 The obligations of each Lender to participate in any Revolving Credit Loan subsequent to the drawdown referred to in Clause 5.1(a) are subject to the
further conditions precedent that on both the date of the Request and the Utilisation Date for that Loan: 
  

	 	(a)	the Repeating Representations are correct in all respects; and 

  

	 	(b)	no Default is outstanding or would result from the Loan. 

  

	4.3	Maximum number 

  
 Unless the Facility Agent agrees, a Request may not be given if, as a result of making the utilisation requested, there would be more than five Revolving
Credit Loans outstanding. 
  

	4.4	Target Group 

  
 For the purposes of determining whether or not the conditions precedent in Clause 4.2 (Further conditions precedent) have been met on the Utilisation Date
(or requested Utilisation Date) for the first Loan, references in Clauses 16 (Representations and warranties), 17 (Information covenants), 18 (Financial covenants), 19 (General covenants) and 20 (Default) to the Group and to members of the Group
shall be construed so as to include references to the Target Group and members of the Target Group. 
  

 19 

	5.	UTILISATION - LOANS 

  

	5.1	Drawdown 

  

	(a)	Upon the Facility Agent giving notice of satisfaction of the conditions precedent referred to in Clause 4.1(a) the Borrower shall be deemed to request drawdown of the amount of
USD21,332,681.00 under the Term Loan Facility and the amount of USD5,000,000 under the Revolving Credit Loan Facility, to be paid in accordance with Clause 5.3(a). 

  

	(b)	Upon the Facility Agent giving notice of satisfaction of the conditions precedent referred to in Clause 4.1(b) the Borrower shall be deemed to request drawdown of the amount of
USD3,667,319.00 under the Term Loan Facility, to be paid in accordance with Clause 5.3(b). 

  

	(c)	The Borrower may borrow a Revolving Credit Loan after repayment of the initial Revolving Credit Loan by delivering to the Facility Agent a duly completed Request.

  

	(d)	Unless the Facility Agent otherwise agrees, the latest time for receipt by the Facility Agent of a duly completed Request is 11.00 a.m. (Hong Kong time) one Business Day before the
Rate Fixing Day for the proposed borrowing or, in respect of a Loan to be made at Closing, by such time as the Original Lenders and the Facility Agent may agree with the Company. 

  

	(e)	Each Request is irrevocable. 

  

	5.2	Requests for subsequent Revolving Credit Loans 

  
 A Request for a Revolving Credit Loan will not be regarded as having been duly completed unless: 
  

	 	(a)	the Utilisation Date is a Business Day falling within the relevant Availability Period; 

  

	 	(b)	the amount of Revolving Credit Loan requested is: 

  

	 	(i)	a minimum of USD1,000,000 and an integral multiple of USD100,000; or 

  

	 	(ii)	the maximum undrawn amount available under the relevant Facility on the proposed Utilisation Date; and 

  

	 	(c)	the proposed Term complies with this Agreement. 

  

	5.3	Advance of Loan 

  

	(a)	The amounts drawn down under Clause 5.1(a) shall be paid to Standard Chartered Bank (Hong Kong) Limited in its capacity as administrative agent for the Lenders under the EPC Credit
Agreement in repayment of the EPC Facilities. 

  

	(b)	The amount drawn down under Clause 5.1(b) shall be paid to Standard Chartered Bank (Hong Kong) Limited in its capacity as administrative agent under Capex Facility Agreement in
repayment of the Capex Loan. 

  

	(c)	The Facility Agent must promptly notify each Lender of the details of any Request for a Revolving Credit Loan and the amount of its share in that Loan. 

  

	(d)	The amount of each Lender’s share of each Loan will be equal to its Pro Rata Share on the proposed Utilisation Date. 

  

	(e)	No Lender is obliged to participate in a Revolving Credit Loan if as a result: 

  

	 	(i)	its share in the outstanding Loans under the Revolving Credit Facility would exceed its Commitment for that Facility; or 

  

 20 

	 	(ii)	the outstanding Loans under the Revolving Credit Facility would exceed the Total Commitments for that Facility. 

  

	(f)	If the conditions set out in this Agreement have been met, each Lender must make its share in the Loan available to the Facility Agent for the Borrower on the Utilisation Date.

  

	6.	REPAYMENT 

  

	6.1	Repayment of Term Loans 

  

	(a)	The Borrower must repay the Term Loans made to it in full by one or more instalments on the dates and in the amounts specified below (or, if the actual outstanding amount of the
Term Loans is less than the amounts specified below, in that amount). 

  

			
	 Repayment Date

	  	Term Loan

	 	  	(USD)
	 1 December 2006
	  	7,500,000
	 1 December 2007
	  	7,500,000
	 1 December 2008
	  	7,500,000
	 15 March 2009
	  	2,500,000
	 	  	

	 	  	25,000,000

  

	(b)	Any amounts repaid under paragraph (a) above may not be re-borrowed. 

  

	6.2	Repayment of Revolving Credit Loans 

  

	(a)	The Borrower must repay each Revolving Credit Loan made to it in full on its Maturity Date. 

  

	(b)	Subject to the other terms of this Agreement, any amounts repaid under paragraph (a) above may be re-borrowed. 

  

	(c)	Without prejudice to the Borrower’s obligation to repay the full amount of each Revolving Credit Loan on its Maturity Date, on the date of any Rollover Credit drawn by the
Borrower, the amount of the Revolving Credit Loan to be repaid and the amount to be drawn down by the Borrower on such date in the same currency shall be netted off against each other so that the amount of cash which the Borrower is actually
required to pay or, as the case may be, the amount of cash which the Lenders are actually required to pay to the Borrower, shall be the net amount. 

  

	(d)	Any amount of any Revolving Credit Loan still outstanding on the Final Maturity Date shall be repaid on that Final Maturity Date. 

  

	7.	PREPAYMENT AND CANCELLATION 

  

	7.1	Mandatory prepayment - illegality 

  

	(a)	A Lender must promptly notify the Facility Agent and the Company if it becomes aware that it is unlawful in any applicable jurisdiction for that Lender to perform any of its
obligations under a Finance Document or to fund or maintain its share in any Loan, and its efforts to mitigate the effect of such illegality have not been successful. 

  

 21 

	(b)	After notification under paragraph (a) above the Facility Agent must notify the Company and: 

  

	 	(i)	the Borrower must repay or prepay the share of that Lender in each Loan utilised by it on the date specified in paragraph (c) below; and 

  

	 	(ii)	the Commitments of that Lender will be immediately cancelled. 

  

	(c)	The date for repayment or prepayment of a Lender’s share in a Loan pursuant to this Subclause will be: 

  

	 	(i)	the last day of the current Term of that Loan; or 

  

	 	(ii)	if earlier, the date specified by the Lender in the notification under paragraph (a) above and which must not be earlier than the last day of any applicable grace period
allowed by law. 

  

	7.2	Mandatory prepayment - change of control or sale of business 

  

	(a)	For the purposes of this Clause: 

  
 a change of control occurs if: 
  

	 	(i)	the Investor ceases to be a direct or indirect wholly-owned Subsidiary of Merix Corporation or of a company that wholly-owns Merix Corporation. 

  

	 	(ii)	the Investor does not or ceases to hold legally and beneficially, and have the right to vote as they see fit one hundred per cent. of the issued share capital of the Company.

  

	 	(iii)	the Investor does not or ceases to hold the right or ability (directly or indirectly) to direct management of the Company to comply with the type of material restrictions and
obligations imposed in this Agreement or to determine directly or indirectly the composition of a majority of the board of directors (or like board) of the Company; 

  

	 	(iv)	the Company ceases to own all the shares in the Borrower; 

  

	 	(v)	the Investor does not or ceases to have the largest economic interest in the Company (excluding for this purpose the liability of the Company under the Finance Documents; or

  

	 	(vi)	any person or a group of persons acting in concert (other than the Investor) gains control of the Company; 

  
 acting in concert means acting together pursuant to an agreement or
understanding (whether formal or informal); and 
  
 control means the power to direct the management and policies of the Company whether by virtue of ownership of share capital, contract or otherwise. 
  

	(b)	If: 

  

	 	(i)	any of the shares in any member of the Group are sold or issued by way of flotation, rights issue, public placing, listing or other public offering; 

  

	 	(ii)	there is a sale of all or substantially all of the assets of the Group; or 

  

 22 

	 	(iii)	a change of control occurs, 

  
 then 
  

	 	(A)	the Total Commitments shall be cancelled; and 

  

	 	(B)	all outstanding Loans, together with accrued and unpaid interest and all other amounts accrued and outstanding under the Finance Documents, shall become immediately due and payable.

  

	7.3	Mandatory prepayment - Equity Issuance or Shareholder Loan 

  

	(a)	In this Subclause: 

  
 Equity Issuance means any sale or issuance of capital stock or shares or any Equity Rights of any member of the Group. 
  
 Equity Rights means, with respect to any person, any subscriptions,
options, warrants, commitments, pre-emptive rights or agreements of any kind (including any shareholders’ or voting trust agreements) for the issuance, sale, registration or voting of, or securities convertible into, any additional shares of
capital stock or shares of any class, or partnership or other ownership interests of any type in, such person. 
  
 Shareholder Loan means any advance to a member of the Group by a member of the Merix Group which is not a member of the Group. 
  

	(b)	Upon any Equity Issuance or Shareholder Loan, the Company must apply and the Company must procure the application of an amount equal to the aggregate amount of the proceeds of the
Equity Issuance or Shareholder Loan in or towards prepaying the Loans, except to the extent that such proceeds are to pay Capital Expenditure permitted under Clause 18.1(b) or to fund the Group’s working capital. 

  

	(c)	Any prepayment of a Loan under this Subclause must be made within three Business Days after receipt of the proceeds of the Equity Issuance. 

  

	7.4	Mandatory prepayment - disposals 

  

	(a)	In this Subclause: 

  

	 	(i)	Net Proceeds in relation to any disposal of an asset or any claim under any Acquisition Document by a member of the Merix Group or any claim under any contract of insurance
by a member of the Group, means the amount received in Cash or Cash Equivalents (or other instruments which upon receipt are readily convertible into Cash on reasonable commercial terms) by a member of the Group in respect of such disposal or claim:

  

	 	(A)	including the amount of any intercompany loan repaid to continuing members of the Group; 

  

	 	(B)	treating any amount owing to and set off by any purchaser of assets as consideration received in Cash; 

  

	 	(C)	treating consideration initially received in a form other than Cash, Cash Equivalents or such other instruments as being received when and if that consideration is converted into
Cash or Cash Equivalents or becomes readily so convertible on reasonable commercial terms; 

  

 23 

	 	(D)	after deducting Taxes (and amounts reasonably reserved in respect of Taxes) payable by members of the Group in respect of that disposal or claim; and 

  

	 	(E)	after deducting proper costs and reasonable expenses incurred by members of the Group directly in connection with that disposal or claim. 

  

	 	(ii)	Recovery Event means: 

  

	 	(A)	the disposal of an asset to a person who is not a member of the Group, other than: 

  

	 	I.	where an asset (not being shares or any other ownership interest in a person) is to be (and is) replaced by another asset of a substantially similar type for use in the Group’s
business (being a fixed asset in the case of a disposal of a fixed asset) within 180 days of the date of disposal and pending such replacement the Net Proceeds of that disposal are deposited in a holding account; 

  

	 	II.	any disposal referred to in Clause 19.6(b)(i), (iv), (vii), (viii), (ix) or (xi) (Disposals); or 

  

	 	III.	where the Net Proceeds of the disposal are in an amount (when taken together with the Net Proceeds of any related disposal) which (calculated on the date of receipt) is less than
USD50,000; 

  

	 	(B)	a claim by a member of the Merix Group under any of the Acquisition Documents, other than where the Net Proceeds of that claim are: 

  

	 	I.	to be (and are) applied within 180 days of receipt in meeting or rectifying the liability, loss or defect in respect of which they are recovered and pending such application the Net
Proceeds are deposited in a holding account; 

  

	 	II.	recovered on account of a working capital deficit as compared to a level agreed in the Acquisition Documents; or 

  

	 	III.	in an amount (when taken together with the Net Proceeds derived from any related claim) which (calculated on the date of receipt) is less than USD50,000; 

 

	 	(C)	a claim by a member of the Group under any contract of insurance (other than in respect of third party liability policies), other than where the Net Proceeds are:

  

	 	I.	to be (and are) applied within 180 days of the occurrence of the event giving rise to such claim in reinstating or replacing (on a like for like basis) any asset, or applied in
defraying the loss or liability, to which the claim relates and pending such application the Net Proceeds are deposited in a holding account; or 

  

	 	II.	in an amount (when taken together with the value of any related claims) which (calculated on the date of receipt) is less thanUSD50,000. 

  

 24 

	(b)	Subject to Clause 7.7(e) (Payment into a holding account or a mandatory prepayment account), if the aggregate amount of Net Proceeds from Recovery Events is equal to or exceeds
USD100,000 (the Threshold Amount) during any annual Accounting Period of the Company, the Borrower must immediately apply and the Company must procure the application of an amount equal to the aggregate amount of such Net Proceeds, including the
Threshold Amount, in or towards prepaying the Loans. 

  

	(c)	Any prepayment of a Loan under this Subclause must be made: 

  

	 	(i)	on or before the last day of the Term of that Loan in which the relevant Net Proceeds were received or recovered; or 

  

	 	(ii)	(in the case of Net Proceeds already deposited in a holding account under subparagraph (a)(ii) above) on or before the last day of the Term of that Loan in which the relevant time
limit expired. 

  

	7.5	Mandatory prepayment - Excess Cashflow 

  

	(a)	If the annual audited consolidated Accounts of the Company demonstrate that the Group has Excess Cashflow during the annual Accounting Period to which such Accounts relate, the
Borrower must apply and the Company must procure the application of an amount equal to thirty six point five-nine per cent. (36.59%) of that Excess Cashflow towards prepaying the Loans. 

  

	(b)	An amount equal to any prepayment under this Subclause must be paid to the Facility Agent within seven months after the relevant Accounting Date and the prepayment must be made on
or before the last day of the Term(s) of the Loans current when such payment is made, pending which an amount equal to the amount to be prepaid must be deposited in a mandatory prepayment account. 

  

	7.6	Mandatory prepayment - Acquisition Costs 

  

	(a)	The Company must supply to the Facility Agent, or procure its Affiliate to supply to the Facility Agent, a statement of all amounts and payees of Acquisition Costs on or before the
last Business Day of the seventh month after Closing. 

  

	(b)	If the Acquisition Costs due and payable within six months after the Closing Date are less than USD4,750,000, the Company must pay, or procure its Affiliate to pay, the amount by
which the Acquisition Costs are less than USD5,000,000 to be applied by the Company towards prepaying the Loans. The statement of Merix Corporation of the elements included in calculating the Acquisition Costs and the amount thereof shall be final,
binding and conclusive on all Parties. 

  

	(c)	An amount equal to any prepayment under this Subclause must be paid to the Facility Agent on or before the last day of the Term(s) of the Loans first ending on or after the seventh
month after the Closing Date, to be deposited pending prepayment in a mandatory prepayment account, if appropriate in accordance with Clause 7.7(b). 

  

	7.7	Payment into a holding account or a mandatory prepayment account 

  

	(a)	In this Clause: 

  

	 	(i)	holding account means an interest bearing account in the name of the Borrower with the Facility Agent held in Hong Kong, governed by Hong Kong law and subject to a
first-ranking floating Security Interest in favour of the Finance Parties; and 

  

 25 

	 	(ii)	mandatory prepayment account means an interest bearing account in the name of the Borrower with the Facility Agent held in Hong Kong, governed by Hong Kong law and subject to
a first-ranking fixed Security Interest in favour of the Finance Parties. 

  

	(b)	Subject to paragraph (e) below, when it is established that the Borrower will be required to prepay Loans on the last day of the then current Term(s) for those Loans, the
Borrower must and the Company must procure that the Borrower does (unless the relevant Net Proceeds are already deposited in a holding account under Clause 7.4(a)(ii) (Mandatory prepayment—disposals)) promptly deposit in a mandatory prepayment
account an amount equal to the amounts to be prepaid unless the Company, on giving not less than five Business Days’ notice to the Facility Agent (which notice the Facility Agent shall promptly give to the Lenders), specifies that the Borrower
intends to prepay the relevant amount within five Business Days in which case the prepayment shall (subject to the other provisions of this Agreement) be made on the date specified in such notice. 

  

	(c)	The Borrower irrevocably authorises the Facility Agent to apply any amount deposited with it under paragraph (b) towards prepayment of the Loans on the last day of the relevant
Term(s) or earlier if the Company so directs. 

  

	(d)	Amounts standing to the credit of a holding account may only be: 

  

	 	(i)	used to prepay Loans; 

  

	 	(ii)	(at the discretion of the Majority Lenders) used to pay any other amounts due and payable (but unpaid) under the Finance Documents; or 

  

	 	(iii)	withdrawn to fund the replacement or application envisaged in Clause 7.4(a)(ii) (Mandatory prepayment—disposals). 

  

	(e)	Amounts standing to the credit of a mandatory prepayment account may only be: 

  

	 	(i)	used to prepay Loans; or 

  

	 	(ii)	(at the discretion of the Majority Lenders) used to pay any other amounts due and payable (but unpaid) under the Finance Documents. 

  

	(f)	The Borrower shall not be obliged to (and the Company shall not be obliged to ensure that the Borrower does) prepay any Loan pursuant to Clause 7.4 (Mandatory
prepayment—disposals) if and to the extent that (but only for so long as) it is illegal to do so and the relevant Obligors, having used all reasonable endeavours to overcome such illegality, have been unable to remove such illegality. If the
illegality relates only to the prepayment of certain Loans then such amount shall be applied pro rata in prepayment of the other Loans and otherwise in accordance with Clause 7.11 (Application between Term Loan Facilities and Revolving Credit
Facility). 

  

	7.8	Voluntary prepayment 

  
 The Borrower may, by giving not less than five Business Days’ prior notice to the Facility Agent, prepay (or procure prepayment of) any Loan at any
time in whole or in part. 
  

	7.9	Automatic cancellation 

  
 The Commitments of each Lender under each Facility will be automatically cancelled at the close of business in Hong Kong on the last day of the
Availability Period for that Facility to the extent undrawn at that date. 
  

 26 

	7.10	Voluntary cancellation 

  

	(a)	The Company may, by giving not less than three Business Days’ prior notice to the Facility Agent, cancel the unutilised amount of the Total Revolving Credit Commitments in
whole or in part. 

  

	(b)	Partial cancellation of the Commitments under any Facility pursuant to this Subclause must be in a minimum amount of USD500,000 and an integral multiple of USD100,000 or such lesser
amount as may be undrawn and uncancelled or such other amount as may be agreed by the Facility Agent (acting on the instructions of the Majority Lenders). 

  

	(c)	Any cancellation in part of the Commitments under any Facility pursuant to this Subclause will be applied against the Commitment of each Lender in that Facility pro rata.

  

	7.11	Application between Term Loan Facilities and Revolving Credit Facility 

  

	(a)	Any amount to be applied in prepayment of Loans must be applied: 

  

	 	(i)	first, in prepayment of Term Loans; and 

  

	 	(ii)	second, in prepayment of Revolving Credit Loans. 

  

	(b)	Where a mandatory or involuntary prepayment of a Revolving Credit Loan is required but there is no Revolving Credit Loan to be prepaid, the Revolving Credit Commitment will be
reduced by the amount which would have been required to be applied in prepayment of the Revolving Credit Loans had they been outstanding at that time. 

  

	7.12	Partial prepayment of Term Loans 

  

	(a)	Any prepayment of a Term Loan under this Clause 7 will be applied against the remaining Repayment Instalments in inverse order of maturity. 

  

	(b)	No amount of a Term Loan prepaid under this Agreement may subsequently be re-borrowed. 

  

	7.13	Re-borrowing of Revolving Credit Loans 

  
 Any voluntary prepayment of a Revolving Credit Loan under Clause 7.8 (Voluntary prepayment) may be re-borrowed on the terms of this Agreement, unless the
Company has elected to cancel the Revolving Credit Commitments in accordance with Clause 7.10 (Voluntary cancellation). Any other prepayment of a Revolving Credit Loan may not be re-borrowed. 
  

	7.14	Miscellaneous provisions 

  

	(a)	Any notice of prepayment and/or cancellation under this Agreement is irrevocable and must specify the relevant date(s) and the affected Loans and Commitments. The Facility Agent
must notify the Lenders promptly of receipt of any such notice. 

  

	(b)	All prepayments under this Agreement must be made with accrued interest on the amount prepaid. No premium or penalty is payable in respect of any prepayment except for Break Costs.

  

	(c)	The Majority Lenders may agree a shorter notice period for a voluntary prepayment or a voluntary cancellation. 

  

	(d)	No prepayment or cancellation is allowed except in accordance with the express terms of this Agreement. 

  

	(e)	No amount of the Total Commitments cancelled under this Agreement may subsequently be reinstated. 

  

 27 

	8.	INTEREST 

  

	8.1	Calculation of interest 

  
 The rate of interest on each Loan for each Term is the percentage rate per annum equal to the aggregate of: 
  

	 	(a)	the Margin applicable as at the first day of the relevant Term; and 

  

	 	(b)	LIBOR. 

  

	8.2	Payment of interest 

  
 Except where it is provided to the contrary in this Agreement, the Borrower must pay accrued interest on each Loan made to it on the last day of each Term
and, if the Term is longer than three months, on the date falling at each three-monthly interval after the first day of that Term. 
  

	8.3	Margin adjustments 

  

	(a)	The Margin for the first twelve months commencing on Closing Date will be 2.500 per cent. per annum. 

  

	(b)	The Company must supply to the Facility Agent a Margin Certificate within 45 days of the end of each quarterly Accounting Period, beginning with the Accounting Period ending on the
July 2006 Accounting Date. 

  

	(c)	A Margin Certificate must specify the Leverage Ratio for the four quarterly Accounting Periods ending on the most recent Accounting Date and be signed by the Chief Financial
Officer. 

  

	(d)	Subject to paragraphs (e), (f), (g) below, the Margin will be determined by reference to the table below and the information set out in the relevant Margin Certificate with
effect from the commencement of each Term starting after the date of delivery of that Margin Certificate. 

  

				
	 Column 1
 Leverage Ratio

	  	 Column 2
 Margin

	 
	 	  	(per cent. per annum)	 
	 Less than 2.00
	  	2.125	%
	 2.00 or greater and less than 2.50
	  	2.375	%
	 2.50 or greater and less than 3.00
	  	2.625	%
	 3.00 or greater
	  	2.875	%

  

	(e)	For so long as: 

  

	 	(i)	the Company is in default of its obligation under this Agreement to provide a Margin Certificate; or 

  

	 	(ii)	an Event of Default is outstanding, 

  
 the applicable Margin for each Loan will be 2.875%. 
  

 28 

	(f)	If the applicable Margin has been determined under this Subclause in reliance on a Margin Certificate (or unaudited Accounts) but the Accounts supplied under Clause 17.1(a)((i),
(iii) and (iv) for the period covered by the relevant Margin Certificate show that a higher or lower Margin applies, the applicable Margin will instead be that calculated by reference to such Accounts. If, in this event, any amount of
interest has been paid by the Borrower on the basis of the relevant Margin Certificate: 

  

	 	(i)	the Borrower must immediately pay to the Facility Agent any shortfall in that amount as compared to that which would have been paid to the Lenders if the applicable Margin for the
relevant Facilities had been calculated by reference to the relevant Accounts; and 

  

	 	(ii)	any overpayment in that amount as compared to that which would have been paid to the Lenders if the applicable Margin for the relevant Facilities had been calculated by reference to
the relevant Accounts may be deducted from the next payment of interest due. 

  

	(g)	Any moneys received or recovered as a result of an adjustment to the Margin pursuant to this Subclause shall be reimbursed on a pro rata basis amongst the Lenders
participating in the relevant Loans as at the date of such receipt or recovery. 

  

	8.4	Interest on overdue amounts 

  

	(a)	If an Obligor fails to pay any amount payable by it under the Finance Documents, it must immediately on demand by the Facility Agent pay interest on the overdue amount from its due
date up to the date of actual payment, both before, on and after judgment. 

  

	(b)	Interest on an overdue amount is payable at a rate determined by the Facility Agent to be two per cent. per annum above the rate which would have been payable if the overdue amount
had, during the period of non-payment, constituted a Loan and in the same currency as the overdue amount. For this purpose, the Facility Agent may (acting reasonably): 

  

	 	(i)	select successive Terms for the overdue amount of any duration up to three months; and 

  

	 	(ii)	determine the appropriate Rate Fixing Day for that Term. 

  

	(c)	Notwithstanding paragraph (b) above, if the overdue amount is a principal amount of a Loan and becomes due and payable prior to the last day of its current Term, then:

  

	 	(i)	the first Term for that overdue amount will be the unexpired portion of that Term; and 

  

	 	(ii)	the rate of interest on the overdue amount for that first Term will be two per cent. per annum above the rate then payable on that Loan. 

  
 After the expiry of the first Term for that overdue amount, the rate on the
overdue amount will be calculated in accordance with paragraph (b) above. 
  

	(d)	Interest (if unpaid) on an overdue amount will be compounded with that overdue amount at the end of each of its Terms but will remain immediately due and payable.

  

	8.5	Notification of rates of interest 

  
 The Facility Agent must promptly notify each relevant Party of the determination of a rate of interest under this Agreement. 
  

 29 

	9.	TERMS 

  

	9.1	Selection - Term Loans 

  

	(a)	Each Term Loan has successive Terms. 

  

	(b)	The Term Loan to be drawn down in accordance with Clause 5.1(a) shall have a Term of two months. 

  

	(c)	The Borrower must select any subsequent Term(s) in an irrevocable notice received by the Facility Agent not later than 11.00 a.m. (Hong Kong time) one Business Day before the Rate
Fixing Day for that Term. Each Term for a Term Loan will start on its Utilisation Date or on the expiry of its preceding Term. 

  

	(d)	If the Borrower fails to select a Term for an outstanding Term Loan under paragraph (c) above, that Term will, subject to the other provisions of this Clause, be three months.

  

	(e)	Subject to the following provisions of this Clause, each Term for a Term Loan will be one, two, three or six months or any other period agreed by the Company and the Lenders.

  

	9.2	Selection - Revolving Credit Loans 

  

	(a)	Each Revolving Credit Loan has one Term only. 

  

	(b)	The Revolving Credit Loan to be drawn down in accordance with Clause 5.1(a) shall have a Term of two months. 

  

	(c)	The Borrower must select each subsequent Term for a Revolving Credit Loan in the relevant Request. 

  

	(d)	Subject to the following provisions of this Clause, each Term for a Revolving Credit Loan will be one, two, three or six months or any other period agreed by the Company and the
Lenders. 

  

	9.3	No overrunning 

  

	(a)	If a Term for any Term Loan would otherwise overrun the date for payment of a Repayment Instalment for that Term Loan, it will be shortened so that it ends on that date.

  

	(b)	If a Term for any Revolving Credit Loan would otherwise overrun the Final Maturity Date, it will be shortened so that it ends on that date. 

  

	9.4	Other adjustments 

  
 The Facility Agent and the Company may enter into such other arrangements as they may agree for the adjustment of Terms and the consolidation and/or
splitting of Loans, but no Term in excess of six months may be agreed by the Facility Agent without the prior consent of all the Lenders. 
  

	9.5	Notification 

  
 The Facility Agent must notify each relevant Party of the duration of each Term promptly after ascertaining its duration. 
  

 30 

	9.6	Limitation of Terms 

  
 The number of Terms for Term Loans and Revolving Credit Loans at any one time may not exceed six in total. 
  

	10.	MARKET DISRUPTION 

  

	10.1	Failure of a Reference Bank to supply a rate 

  
 If LIBOR is to be calculated by reference to the Reference Banks but a Reference Bank does not supply a rate by 12.00 noon (London time) on a Rate Fixing
Day, the applicable LIBOR will, subject as provided below, be calculated on the basis of the rates of the remaining Reference Banks. 
  

	10.2	Market disruption 

  

	(a)	In this Clause, each of the following events is a market disruption event: 

  

	 	(i)	LIBOR is to be calculated by reference to the Reference Banks but no, or (where there is more than one Reference Bank) only one, Reference Bank supplies a rate by 12.00 noon (London
time) on the Rate Fixing Day; or 

  

	 	(ii)	the Facility Agent receives by close of business (London time) on the Rate Fixing Day notification from Lenders whose shares in the relevant Loan exceed 30 per cent. of that
Loan that the cost to them of obtaining matching deposits in the relevant interbank market is in excess of LIBOR for the relevant currency and Term. 

  

	(b)	The Facility Agent must promptly notify the Company and the Lenders of a market disruption event. 

  

	(c)	After notification under paragraph (b) above, the rate of interest on each Lender’s share in the affected Loan for the relevant Term will, subject to Clause 10.3, be the
aggregate of the applicable: 

  

	 	(i)	Margin; and 

  

	 	(ii)	rate notified to the Facility Agent by that Lender as soon as practicable, and in any event before interest is due to be paid in respect of that Term, to be that which expresses as
a percentage rate per annum the cost to that Lender of funding its share in that Loan from whatever source it may reasonably select. 

  

	10.3	Alternative basis of interest or funding 

  

	(a)	If a market disruption event occurs and the Facility Agent or the Company so requires, the Company and the Facility Agent must enter into negotiations for a period of not more than
30 days with a view to agreeing an alternative basis for determining the rate of interest and/or funding for the affected Loan which alternative basis may (without limitation) include alternative interest periods or alternative rates of interest but
shall include a margin above the cost of funds to the Finance Parties equivalent to the applicable Margin. 

  

	(b)	Any alternative basis agreed will be, with the prior consent of all the Lenders, binding on all the Parties. 

  

 31 

	11.	TAXES 

  

	11.1	Tax gross-up 

  

	(a)	Each Obligor must make all payments to be made by it under the Finance Documents without any Tax Deduction, unless a Tax Deduction is required by law. 

  

	(b)	If an Obligor is aware that an Obligor must make a Tax Deduction (or that there is a change in the rate or the basis of a Tax Deduction), it must promptly notify the Facility Agent.
The Facility Agent must then promptly notify the affected Parties. 

  

	(c)	Except as provided below, if a Tax Deduction is required by law to be made by an Obligor or the Facility Agent, the amount of the payment due from the Obligor will be increased to
an amount which (after making the Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. 

  

	(d)	If an Obligor is required to make a Tax Deduction, that Obligor must make the minimum Tax Deduction allowed by law and must make any payment required in connection with that Tax
Deduction within the time allowed by law. 

  

	(e)	Within 30 days of making either a Tax Deduction or a payment required in connection with a Tax Deduction, the Obligor making that Tax Deduction or payment must deliver to the
Facility Agent for the relevant Finance Party evidence satisfactory to that Finance Party (acting reasonably) that the Tax Deduction has been made or (as applicable) the appropriate payment has been paid to the relevant taxing authority.

  

	11.2	Tax indemnity 

  

	(a)	Except as provided below, each Obligor must indemnify a Finance Party against any loss or liability which that Finance Party (in its absolute discretion) determines will be or has
been suffered (directly or indirectly) by that Finance Party for or on account of Tax in relation to a payment received or receivable (or any payment deemed to be received or receivable) from that Obligor under a Finance Document.

  

	(b)	Paragraph (a) above does not apply to any Tax assessed on a Finance Party under the laws of the jurisdiction in which: 

  

	 	(i)	that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party has a Facility Office and is treated as resident for tax
purposes; or 

  

	 	(ii)	that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction, 

  
 if that Tax is imposed on or calculated by reference to the net income
received or receivable by that Finance Party. However, any payment deemed to be received or receivable, including any amount treated as income but not actually received by the Finance Party, such as a Tax Deduction, will not be treated as net income
received or receivable for this purpose. 
  

	(c)	A Finance Party making, or intending to make, a claim under paragraph (a) above must promptly notify the Company of the event which will give, or has given, rise to the claim.

  

 32 

	11.3	Tax Credit 

  
 If an Obligor makes a Tax Payment and the relevant Finance Party (in its absolute discretion) determines that: 
  

	 	(a)	a Tax Credit is attributable to that Tax Payment; and 

  

	 	(b)	it has used and retained that Tax Credit, 

  
 the Finance Party must pay an amount to the Obligor which that Finance Party determines (in its absolute discretion) will leave it (after that payment) in
the same after-tax position as it would have been if the Tax Payment had not been required to be made by the Obligor. 
  

	11.4	Stamp taxes 

  
 The Company must pay and indemnify each Finance Party against any stamp duty, stamp duty land tax, registration or other similar Tax payable in connection
with the entry into, performance or enforcement of any Finance Document. 
  

	11.5	Value added taxes 

  

	(a)	Any amount (including costs and expenses) payable under a Finance Document by an Obligor is exclusive of any value added tax or any other Tax of a similar nature which might be
chargeable in connection with that amount. If any such Tax is chargeable, the Obligor must pay to the Finance Party (in addition to and at the same time as paying that amount) an amount equal to the amount of that Tax. 

  

	(b)	The obligation of any Obligor under paragraph (a) above will be reduced to the extent that the Finance Party determines (acting reasonably) that it is entitled to repayment or
a credit in respect of the Tax. 

  

	12.	INCREASED COSTS 

  

	12.1	Increased costs 

  
 Except as provided below in this Clause, the Company must pay to a Finance Party the amount of any Increased Cost incurred by that Finance Party or any of
its Affiliates as a result of: 
  

	 	(a)	the introduction of, or any change in, or any change in the interpretation, administration or application of, any law or regulation; or 

  

	 	(b)	compliance with any law or regulation that comes into effect after the date of this Agreement. 

  

	12.2	Exceptions 

  
 The Company need not make any payment for an Increased Cost to the extent that the Increased Cost is: 
  

	 	(a)	compensated for under another Clause or would have been but for an exception to that Clause; or 

  

	 	(b)	attributable to a Finance Party or its Affiliate wilfully failing to comply with any law or regulation. 

  

 33 

	12.3	Claims 

  

	(a)	A Finance Party intending to make a claim for an Increased Cost must notify the Facility Agent of the circumstances giving rise to, and the amount of, the claim, following which the
Facility Agent will promptly notify the Company. 

  

	(b)	Each Finance Party must, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Cost. 

  

	13.	MITIGATION 

  

	13.1	Mitigation 

  

	(a)	Subject to paragraph (e) below, each Finance Party must, in consultation with the Company, mitigate any circumstances which arise and which result or would result in:

  

	 	(i)	any Tax Payment or Increased Cost being payable to that Finance Party; or 

  

	 	(ii)	that Finance Party being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality, 

  
 by using reasonable endeavours to change its Facility Office, if such costs
could be mitigated by so doing. 
  

	(b)	If in the opinion of such Finance Party, the cost referred in paragraph (a) above could not be mitigated by changing its Facility Office, then the Borrower may, at its sole
expense and effort, upon notice to such Finance Party and the Facility Agent, require such Finance Party to transfer, without recourse (in accordance with and subject to the restrictions contained in Clause 28), all its interests, rights and
obligations under the Finance Documents to a transferee that shall assume such obligations (which transferee may be another Finance Party, if a Finance Party accepts such transfer), provided that: 

  

	 	(i)	the Borrower shall have received the prior written consent of the Facility Agent, which consent shall not unreasonably be withheld; 

  

	 	(ii)	such Finance Party shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to
it thereunder, from the transferee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts); and 

  

	 	(iii)	such transfer will result in a reduction in the costs referred to in Subclause (a) above. 

  
 A Finance Party shall not be required to make any such transfer if, prior thereto, as a result of a waiver by such Finance
Party or otherwise, the circumstances entitling the Borrower to require such transfer cease to apply. 
  

	(c)	Paragraphs (a) and (b) above do not in any way limit the obligations of any Obligor under the Finance Documents. 

  

	(d)	The Company must indemnify each Finance Party for all proper costs and expenses reasonably incurred by that Finance Party as a result of any step taken by it under this Subclause.

  

	(e)	A Finance Party is not obliged to take any step under this Subclause if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

  

 34 

	13.2	Conduct of business by a Finance Party 

  
 No term of the Finance Documents will: 
  

	 	(a)	interfere with the right of any Finance Party to arrange its affairs (Tax or otherwise) in whatever manner it thinks fit; 

  

	 	(b)	oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it in respect of Tax or the extent, order and manner of any claim; or

  

	 	(c)	oblige any Finance Party to disclose any information relating to its affairs (Tax or otherwise) or any computation in respect of Tax. 

  

	14.	PAYMENTS 

  

	14.1	Place 

  
 Unless a Finance Document specifies that payments under it are to be made in another manner, all payments by a Party (other than the Facility Agent) under
the Finance Documents must be made to the Facility Agent to its account at such office or bank in New York. 
  

	14.2	Funds 

  
 Payments under the Finance Documents must (unless otherwise expressly provided) be made to the Facility Agent for value on the due date at such times and
in such funds as the Facility Agent may specify to the Party concerned as being customary at the time for the settlement of transactions in the relevant currency in the place for payment. 
  

	14.3	Distribution 

  

	(a)	Each payment received by the Facility Agent under the Finance Documents for another Party must, except as provided below, be made available by the Facility Agent to that Party by
payment (as soon as practicable after receipt) to its account with such office or bank in the principal financial centre of the country of the relevant currency as it may notify to the Facility Agent for this purpose by not less than five Business
Days’ prior notice. 

  

	(b)	The Facility Agent may apply any amount received by it for an Obligor in or towards payment (as soon as practicable after receipt) of any amount due from that Obligor under the
Finance Documents or in or towards the purchase of any amount of any currency to be so applied. 

  

	(c)	Where a sum is paid to the Facility Agent under this Agreement for another Party, the Facility Agent is not obliged to pay that sum to that Party until it has established that it
has actually received it. However, the Facility Agent may assume that the sum has been paid to it, and, in reliance on that assumption, make available to that Party a corresponding amount. If it transpires that the sum has not been received by the
Facility Agent, that Party must immediately on demand by the Facility Agent refund any corresponding amount made available to it together with interest on that amount from the date of payment to the date of receipt by the Facility Agent at a rate
calculated by the Facility Agent, acting reasonably, to reflect its cost of funds. 

  

	14.4	Currency 

  

	(a)	Unless a Finance Document specifies that payments under it are to be made in a different manner, the currency of each amount payable under the Finance Documents is determined under
this Subclause. 

  

 35 

	(b)	Interest is payable in the currency in which the principal amount in respect of which it is payable is denominated. 

  

	(c)	Amounts payable in respect of Taxes, fees, costs and expenses are payable in the currency in which they are incurred. 

  

	(d)	Each other amount payable under the Finance Documents is payable in U.S. Dollars. 

  

	14.5	No set-off or counterclaim 

  
 All payments made by an Obligor under the Finance Documents must be calculated and made without (and free and clear of any deduction for) set off or
counterclaim. 
  

	14.6	Business Days 

  

	(a)	If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment will instead be the next Business Day in the same calendar month
(if there is one) or the preceding Business Day (if there is not) or whatever day the Facility Agent determines is market practice. 

  

	(b)	During any extension of the due date for payment of any principal under this Agreement interest is payable on that principal at the rate payable on the original due date.

  

	14.7	Partial payments 

  

	(a)	If the Facility Agent receives a payment insufficient to discharge all the amounts then due and payable by the Obligors under the Finance Documents, the Facility Agent must apply
that payment towards the obligations of the Obligors under the Finance Documents in the following order: 

  

	 	(i)	first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agents under the Finance Documents; 

  

	 	(ii)	second, in or towards payment pro rata of any accrued interest or fees due but unpaid under this Agreement; 

  

	 	(iii)	third, in or towards payment pro rata of any principal amount due but unpaid under this Agreement; and 

  

	 	(iv)	fourth, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. 

  

	(b)	The Facility Agent must, if so directed by the Majority Lenders, vary the order set out in subparagraphs (a)(ii) to (iv) above. 

  

	(c)	This Subclause will override any appropriation made by an Obligor. 

  

	14.8	Timing of payments 

  
 If a Finance Document does not provide for when a particular payment is due, that payment will be due within three Business Days of demand by the relevant
Finance Party. 
  

 36 

	15.	GUARANTEE AND INDEMNITY 

  

	15.1	Guarantee and indemnity 

  
 Each Guarantor jointly and severally and irrevocably and unconditionally: 
  

	 	(a)	guarantees to each Finance Party due and punctual performance by each Obligor of all its obligations under the Finance Documents; 

  

	 	(b)	undertakes with each Finance Party that, whenever an Obligor does not pay any amount when due under or in connection with any Finance Document, it must immediately on demand by the
Facility Agent pay that amount as if it were the principal obligor in respect of that amount; 

  

	 	(c)	guarantees to the Administrative Agent (on behalf of the Finance Parties under the Capex Facility Agreement) due and punctual performance by Eastern Pacific Circuits Investments
(Singapore) Pte. Ltd. (to be renamed Merix Holding (Singapore) Pte. Ltd.) of all its obligations under the Capex Facility Agreement; 

  

	 	(d)	undertakes with the Administrative Agent (on behalf of the Finance Parties under the Capex Facility Agreement) that, whenever Eastern Pacific Circuits Investments (Singapore) Pte.
Ltd. (to be renamed Merix Holding (Singapore) Pte. Ltd.) does not pay any amount when due under or in connection with the Capex Facility Agreement, it must immediately on demand by the Administrative Agent pay that amount as if it were the principal
obligor in respect of that amount; and 

  

	 	(e)	indemnifies each Finance Party and the Administrative Agent (on behalf of the Finance Parties under the Capex Facility Agreement) immediately on demand against any loss or liability
suffered by that Finance Party or Finance Parties under the Capex Facility Agreement if any obligation expressed to be guaranteed by it is or becomes unenforceable, invalid or illegal; the amount of the loss or liability under this indemnity will be
equal to the amount the party would otherwise have been entitled to recover. 

  

	15.2	Continuing guarantee 

  
 This guarantee is a continuing guarantee and will extend to the ultimate balance of all sums payable by any Obligor under the Finance Documents or by
Eastern Pacific Circuits Investments (Singapore) Pte. Ltd. (to be renamed Merix Holding (Singapore) Pte. Ltd.) under the Capex Facility Agreement, regardless of any intermediate payment or discharge in whole or in part. 
  

	15.3	Reinstatement 

  

	(a)	If any discharge (whether in respect of the obligations of any Obligor or Eastern Pacific Circuits Investments (Singapore) Pte. Ltd. (to be renamed Merix Holding (Singapore) Pte.
Ltd.) or any security for those obligations or otherwise) or arrangement is made in whole or in part on the faith of any payment, security or other disposition which is avoided or must be restored on insolvency, liquidation, administration or
otherwise without limitation, the liability of each Guarantor under this Clause will continue or be reinstated as if the discharge or arrangement had not occurred. 

  

	(b)	Each Finance Party or the Administrative Agent (on behalf of the Finance Parties under the Capex Facility Agreement) may concede or compromise any claim that any payment, security
or other disposition is liable to avoidance or restoration. 

  

 37 

	15.4	Waiver of defences 

  
 The obligations of each Guarantor under this Clause will not be affected by any act, omission or thing which, but for this provision, would reduce,
release or prejudice any of its obligations under this Clause (whether or not known to it or any Finance Party or any Finance Party under the Capex Facility Agreement). This includes: 
  

	 	(a)	any time or waiver granted to, or composition with, any person; 

  

	 	(b)	any release of any person under the terms of any composition or arrangement; 

  

	 	(c)	the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any person;

  

	 	(d)	any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

  

	 	(e)	any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any person; 

  

	 	(f)	any amendment (however fundamental) of a Finance Document, the Capex Facility Agreement or any other document or security; 

  

	 	(g)	any unenforceability, illegality, invalidity or non-provability of any obligation of any person under any Finance Document, the Capex Facility Agreement or any other document or
security or the failure by any member of the Group to enter into or be bound by any Finance Document; or 

  

	 	(h)	any insolvency or similar proceedings. 

  

	15.5	Immediate recourse 

  

	(a)	Each Guarantor waives any right it may have of first requiring any Finance Party or Finance Party under the Capex Facility Agreement (or any trustee or agent on its behalf) to
proceed against or enforce any other right or security or claim payment from any person or file any proof or claim in any insolvency, administration, winding-up or liquidation proceedings relative to any other Obligor or any other person before
claiming from that Guarantor under this Clause. 

  

	(b)	This waiver applies irrespective of any law or any provision of a Finance Document or the Capex Facility Agreement to the contrary. 

  

	15.6	Appropriations 

  
 Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents or by Eastern Pacific Circuits
Investments (Singapore) Pte. Ltd. (to be renamed Merix Holding (Singapore) Pte. Ltd.) under or in connection with the Capex Facility Agreement have been irrevocably paid in full, each Finance Party or Finance Party under the Capex Facility Agreement
(or any trustee or agent on its behalf) may with respect to any Guarantor and without affecting the liability of any Guarantor under this Clause: 
  

					
	                (a)
	  	(i)	    	refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party or Finance Party under the Capex Facility Agreement (or any trustee or agent on
its behalf) against those amounts; or

  

 38 

					
	 	  	(ii)	    	apply and enforce them in such manner and order as it sees fit (whether against those amounts or otherwise); and

  

	 	(b)	hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of that Guarantor’s liability under this Clause. 

  

	15.7	Non-competition 

  
 Unless and until: 
  

	 	(a)	all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents or by Eastern Pacific Circuits Investments (Singapore) Pte. Ltd. (to be
renamed Merix Holding (Singapore) Pte. Ltd.) under or in connection with the Capex Facility Agreement have been irrevocably paid in full; or 

  

	 	(b)	the Facility Agent otherwise directs prior to such payment in full, 

  
 no Guarantor shall exercise any right or remedy arising, after a claim has been made or by virtue of any payment or performance by it under this Clause,
by reason of: 
  

	 	(i)	any subrogation to any rights, security or moneys held, received or receivable by any Finance Party or Finance Party under the Capex Facility Agreement (or any trustee or agent on
its behalf); 

  

	 	(ii)	any right of contribution or indemnity in respect of any payment made or moneys received on account of that Guarantor’s liability under this Clause; 

 

	 	(iii)	any right to claim, rank, prove or vote as a creditor of any Obligor or its estate in competition with any Finance Party or Finance Party under the Capex Facility Agreement (or any
trustee or agent on its behalf); or 

  

	 	(iv)	any right to receive, claim or have the benefit of any payment, distribution or security from or on account of any Obligor, or exercise any right of set-off as against any Obligor.

  
 Each Guarantor must hold in trust for and must
immediately pay or transfer to the Facility Agent or the Administrative Agent (as the Facility Agent may direct) for the Finance Parties or the Finance Parties under the Capex Facility Agreement any payment or distribution or benefit of security
received by it contrary to this Clause or in accordance with any directions given by the Facility Agent under this Clause provided that it is not intended by such obligations to create a security interest which requires registration. 
  

	15.8	Release of Guarantors’ right of contribution 

  
 If any Guarantor ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that
Guarantor: 
  

	 	(a)	that Guarantor will be released by each other Guarantor from any liability whatsoever to make a contribution to any other Guarantor arising by reason of the performance by any other
Guarantor of its obligations under the Finance Documents; and 

  

	 	(b)	each other Guarantor will waive any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and
whether by way of subrogation or otherwise) of any right of any Finance Party under any Finance Document or of any other security taken under, or in connection with, any Finance Document where the rights or security are granted by or in relation to
the aspects of the retiring Guarantor. 

  

 39 

	15.9	Additional security 

  
 This guarantee is in addition to and is not in any way prejudiced by any other security now or subsequently held by any Finance Party or the
Administrative Agent (on behalf of the Finance Parties under the Capex Facility Agreement). 
  

	15.10	Limitations 

  

	(a)	This guarantee does not apply to any liability to the extent that it would result in this guarantee constituting unlawful financial assistance within the meaning of Section 76
of the Companies Act of Singapore or Section 47A of the Companies Ordinance of Hong Kong or any equivalent and applicable provisions under the laws of the jurisdiction of incorporation of the relevant Guarantor. 

  

	(b)	The obligations of any Additional Guarantor are subject to the limitations (if any) set out in the Accession Agreement executed by that Additional Guarantor.

  

	15.11	Application 

  
 Until all amounts which may be or become payable by Eastern Pacific Circuits Investments (Singapore) Pte. Ltd. (to be renamed Merix Holding (Singapore)
Pte. Ltd.) under or in connection with the Capex Facility Agreement have been irrevocably paid in full, any amount payable by a Guarantor under this Clause must be paid to the Facility Agent to be applied in the manner as agreed from time to time
between the Administrative Agent and the Facility Agent. 
  

	16.	REPRESENTATIONS AND WARRANTIES 

  

	16.1	Representations and warranties 

  
 Save where otherwise provided, the representations and warranties set out in this Clause are made to each Finance Party by each Obligor for itself and on
behalf of each Subsidiary of that Obligor. References in this Clause to it or its include, unless the context otherwise requires, each Obligor and each Subsidiary of that Obligor. 
  

	16.2	Status 

  

	(a)	It is a limited liability company, duly incorporated and validly existing and (if applicable in its jurisdiction) in good standing under the laws of its jurisdiction of
incorporation. 

  

	(b)	It has the power to own its assets and carry on its business as it is being and will be conducted. 

  

	16.3	Powers and authority 

  
 It has the power to enter into and perform, and has taken all necessary action to authorise the entry into and performance of, the Transaction Documents
to which it is or will be a party and the transactions contemplated by those Transaction Documents. 
  

	16.4	Legal validity 

  

	(a)	Each Transaction Document to which it is a party is legally binding, valid and, subject to the Reservations, enforceable obligation. 

  

 40 

	(b)	Each Security Document to which it is a party creates the Security Interests which that Security Document purports to create and such Security Interests are valid and effective.

  

	(c)	Each Finance Document to which it is a party is in the proper form for its enforcement in the jurisdiction of its incorporation. 

  

	16.5	Non-conflict 

  
 The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents to which it is or will be party do not and will
not: 
  

	 	(a)	conflict with any law or regulation applicable to it; 

  

	 	(b)	conflict with its constitutional documents; or 

  

	 	(c)	conflict with any document which is binding upon it or any of its assets or constitute a default or termination event (however described) under any such document, in each case to an
extent or in a manner which has a Material Adverse Effect or could result in any liability on the part of any Finance Party to any third party or require the creation of any Security Interest over any asset in favour of a third party.

  

	16.6	No default 

  

	(a)	No Default is outstanding or is reasonably likely to result from the entry into, the performance of, or any transaction contemplated by, any Transaction Document.

  

	(b)	No other event or circumstance is outstanding which constitutes (or with the expiry of a grace period, the giving of notice, the making of any determination or the satisfaction of
any other applicable condition will constitute) a default or termination event (however described) or an event resulting in an obligation to create security under any document which is binding on it or any of its assets to an extent or in a manner
which has a Material Adverse Effect. 

  

	16.7	Authorisations 

  
 Except for registration where required of each Security Document, all authorisations required by it: 
  

	 	(a)	in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Transaction Documents have been (or will at Closing be)
obtained or effected (as appropriate) and are (or will at Closing be) in full force and effect; and 

  

	 	(b)	to carry on its business in the ordinary course and in all material respects as it is being conducted have been obtained or effected (as appropriate) and are in full force and
effect. 

  

	16.8	Information 

  

	(a)	In the case of the Company and the Borrower only, as at the date of this Agreement and at Closing, in respect of the Information: 

  

	 	(i)	all expressions of opinion, expectation, intention or policy were made after careful consideration and were fair and reasonable as at the date at which they are stated to be given
and can be properly supported; 

  

	 	(ii)	all forecasts and projections were prepared on the basis of recent historical information and assumptions which were fair and reasonable at that date and were not misleading in any
material respect (it being recognised that projections and forecasts are not to be viewed as facts and that actual results may differ from projected or forecasted results); 

  

 41 

	 	(iii)	all other information was true and accurate in all material respects as at its date or (if appropriate) as at the date (if any) at which it is stated to be given;

  

	 	(iv)	there is no omission of any information the omission of which would make the Information untrue or misleading in any material respect; 

  

	 	(v)	except to the extent indicated otherwise in the Information, nothing has occurred since the date the Information was provided which renders any of the material information,
expressions of opinion or intention, projections or conclusions contained in the Information inaccurate or misleading (or in the case of expressions of opinion, conclusions or projections, other than fair and reasonable) in any material respect in
the context of the transactions contemplated by the Acquisition Documents and the Finance Documents; 

  

	(b)          (i)        	all material information provided to a Finance Party by or on behalf of the Investor, the Company or the Borrower in connection with the Acquisition and/or the Target Group on
or before the date of this Agreement and not superseded before that date (whether or not contained in the Information) is accurate and not misleading in any material respect; 

  

	 	(ii)	all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time
at which they were prepared and supplied and were not misleading in any material respect; and 

  

	 	(iii)	none of the Investor, the Company or the Borrower omitted to disclose any information which would make any of the information or projections referred to in subparagraphs
(i) and (ii) above misleading in any material respect. 

  
 The Company and the Borrower may make specific written disclosures in reasonable detail to the Facility Agent (to be received by the Facility Agent at least five Business Days prior to the date of this Agreement)
against paragraphs (a) and (b) above for the purpose of their repetition as at the date of this Agreement and paragraphs (a) and (b) will be deemed to be qualified by those written disclosures. 
  

	16.9	Financial statements 

  

	(a)	Its latest Accounts supplied under this Agreement: 

  

	 	(i)	have been prepared in accordance with the Accounting Standards consistently applied; and 

  

	 	(ii)	fairly present in all material respects (if unaudited) its consolidated financial condition as at the Accounting Date to which they were drawn up, and the consolidated results of
operations for the Accounting Period for which they were drawn up. 

  

	(b)	The budgets and forecasts supplied under this Agreement were arrived at after careful consideration, have been prepared in good faith on the basis of recent historical information
and on the basis of assumptions which were reasonable as at the date they were prepared and supplied and were not misleading in any material respect. 

  

	(c)	Since the date of the latest Accounts delivered to the Facility Agent there has been no material adverse change in the assets or financial condition of the Group.

  

 42 

	16.10	Litigation etc. 

  

	(a)	No litigation, arbitration, expert determination, alternative dispute resolution or administrative proceedings are current or, to its knowledge, pending or threatened, which have
or, if adversely determined, would have a Material Adverse Effect or result in an uninsured liability against members of the Group in an amount which exceeds USD500,000. 

  

	(b)	It has not breached any law or regulation which breach would have a Material Adverse Effect. 

  

	(c)	No labour disputes are current or, to its knowledge, threatened which have or would have a Material Adverse Effect. 

  

	16.11	Intellectual Property Rights 

  
 Except where the failure to do so does not have a Material Adverse Effect, it: 
  

	 	(a)	is (or after Closing will be) the sole legal and beneficial owner of or has licensed to it on normal commercial terms all the Intellectual Property Rights which are material in the
context of its business and which are required by it in order to carry on its business in all material respects as it is being conducted; 

  

	 	(b)	has taken all formal or procedural actions (including payment of fees) required to maintain those Intellectual Property Rights; 

  

	 	(c)	none of those Intellectual Property Rights is being infringed, nor (to its knowledge) is there any threatened infringement of any of those Intellectual Property Rights, in any
material respect; and 

  

	 	(d)	does not, in carrying on its business, infringe any Intellectual Property Rights of any third party in any respect which has a Material Adverse Effect. 

  

	16.12	Environment 

  

	(a)	It has obtained all Environmental Approvals required for the carrying on of its business as currently conducted and has at all times complied with: 

  

	 	(i)	the terms and conditions of such Environmental Approvals; and 

  

	 	(ii)	all other applicable Environmental Laws, 

  
 where, in each case, if not obtained or complied with the failure or its consequences would have a Material Adverse Effect. There are to its knowledge no
circumstances that may prevent or interfere with such compliance in the future. 
  

	(b)	There is no Environmental Claim pending or formally threatened and there are no past or present acts, omissions, events or circumstances that would form, or are reasonably likely to
form, the basis of any Environmental Claim (including any arising out of the generation, storage, transport, disposal or release of any dangerous substance) against any member of the Group which, if adversely determined, would have a Material
Adverse Effect. 

  

	16.13	Structure Memorandum 

  
 In the case of the Company and the Borrower only and as at the date of this Agreement and Closing, the Structure Memorandum: 
  

	 	(a)	shows all members of the Group (and all Joint Ventures and minority interests held by any member of the Group); 

  

 43 

	 	(b)	contains descriptions which in all material respects are true, complete and correct of the corporate ownership structure of the Group (including all minority interests in any member
of the Group), as it will be immediately after Closing; and 

  

	 	(c)	shows all loans (of USD100,000 or more) between members of the Group and between any member of the Group and a member of the Merix Group as they will be immediately after Closing.

  

	16.14	Representations and warranties on the Acquisition Documents 

  

	(a)	To the best of its knowledge, as at the date of this Agreement and Closing, no representation or warranty (as qualified by any related disclosure letter or schedule to the
Acquisition Documents) given by any party in the Acquisition Documents is untrue or misleading in any material respect. 

  

	(b)	The Acquisition Documents contain all the terms of the Acquisition and the transactions referred to in the Acquisition Documents. 

  

	(c)	The Seller is not receiving any payment or other consideration in connection with the Acquisition from any member of the Merix Group other than as provided in the Acquisition
Documents. 

  

	16.15	The Borrower 

  
 In the case of the Company and Borrower only: 
  

	 	(a)	except as may arise under the Transaction Documents and for Acquisition Costs, before Closing none of the Company, the Borrower or their Subsidiaries (other than the Target Group)
has traded or incurred any material liabilities or commitments (actual or contingent, present or future); 

  

	 	(b)	the Company is the legal and beneficial owner of all of the shares in the Borrower and the Borrower is the legal and beneficial owner of all the shares in its Subsidiaries (other
than the Target Group); and 

  

	 	(c)	at Closing, the Borrower will become the beneficial owner and be unconditionally entitled to become the legal and beneficial owner of all of the Target Shares.

  

	16.16	Assets 

  

	(a)	After Closing it will be the sole legal and beneficial owner of the material assets which are to be transferred to it under the Acquisition Documents. 

  

	(b)	It is (or after Closing will be) the sole legal and beneficial owner of the shares and other material assets which it charges or purports to charge under any Security Document.

  

	(c)	It owns or has leased or licensed to it all material assets necessary to conduct its business as it is being or will be conducted. 

  

	16.17	Financial Indebtedness and Security Interests 

  

	(a)	No member of the Group has any Financial Indebtedness outstanding which is not permitted by the terms of this Agreement. 

  

 44 

	(b)	No Security Interest exists over the whole or any part of the assets of any member of the Group except for those permitted under Clause 19.5 (Negative pledge).

  

	16.18	Insurance 

  

	(a)	There is no outstanding insured loss or liability incurred by it in an amount which is USD500,000 or more which is not expected to be covered to the full extent of that loss or
liability. 

  

	(b)	There has been no non-disclosure, misrepresentation or breach of any term of any material Insurance which would entitle any insurer of that Insurance to repudiate, rescind or cancel
it or to treat it as avoided in whole or in part or otherwise decline any valid claim under it by or on behalf of any member of the Group. 

  

	(c)	No insurer of any material Insurance is in run-off or has entered into any insolvency proceedings. 

  

	16.19	Taxes on payments 

  

	(a)	It is not overdue in the filing of any Tax returns or filings relating to any material amount of Tax and it is not overdue in the payment of any material amount of, or in respect
of, Tax. 

  

	(b)	No claims or investigations by any Tax authority are being or are reasonably likely to be made or conducted against it which are reasonably likely to result in a liability of or
claim against any member of the Group to pay any material amount of, or in respect of, Tax. 

  

	(c)	For Tax purposes, it is resident only in the jurisdiction of its incorporation. 

  

	(d)	As at the date of this Agreement, all amounts payable by it under the Finance Documents may be made without any Tax Deduction. 

  

	16.20	Stamp duties 

  
 No stamp or registration duty or similar Tax or charge is payable in its jurisdiction of incorporation in respect of any Finance Document. 
  

	16.21	Immunity 

  

	(a)	The entry into by it of each Finance Document constitutes, and the exercise by it of its rights and performance of its obligations under each Finance Document will constitute
private and commercial acts performed for private and commercial purposes; and 

  

	(b)	it will not be entitled to claim immunity from suit, execution, attachment or other legal process in any proceedings taken in its jurisdiction of incorporation in relation to any
Finance Document. 

  

	16.22	No adverse consequences 

  

	(a)	It is not necessary under the laws of its jurisdiction of incorporation: 

  

	 	(i)	in order to enable any Finance Party to enforce its rights under any Finance Document; or 

  

	 	(ii)	by reason of the entry into any Finance Document or the performance by it of its obligations under any Finance Document, 

  
 that any Finance Party should be licensed, qualified or otherwise entitled
to carry on business in its jurisdiction of incorporation; and 
  

 45 

	(b)	no Finance Party is or will be deemed to be resident, domiciled or carrying on business in its jurisdiction of incorporation by reason only of the entry into, performance and/or
enforcement of any Finance Document. 

  

	16.23	Jurisdiction/governing law 

  

	(a)	Its: 

  

	 	(i)	irrevocable submission under this Agreement to the jurisdiction of the courts of England; 

  

	 	(ii)	agreement that this Agreement is governed by English law; and 

  

	 	(iii)	agreement not to claim any immunity to which it or its assets may be entitled, 

  
 are legal, valid and binding under the laws of its jurisdiction of incorporation; and 
  

	(b)	any judgment obtained in England will be recognised and be enforceable by the courts of its jurisdiction of incorporation. 

  

	16.24	Times for making representations and warranties 

  

	(a)	Unless otherwise specified, the representations and warranties set out in this Clause are made by each Original Obligor on the date of this Agreement. 

  

	(b)	Unless a representation and warranty is expressed to be given at or as of a specific date or dates only, each representation and warranty is deemed to be repeated by:

  

	 	(i)	each Additional Guarantor and the Company on the date on which that Additional Guarantor becomes an Obligor; and 

  

	 	(ii)	each Obligor on the date of each Request, on each Utilisation Date and on the last day of each Term. 

  

	(c)	When a representation and warranty is deemed to be repeated, it is deemed to be made by reference to the circumstances existing at the time of repetition. 

 

	17.	INFORMATION COVENANTS 

  

	17.1	Financial statements 

  

	(a)	The Company must supply to the Facility Agent in sufficient copies for all the Lenders: 

  

	 	(i)	the audited consolidated financial statements of the Merix Group for each annual Accounting Period (Form 10-K) filed with the U.S. Securities and Exchange Commission by the Merix
Group; 

  

	 	(ii)	the unaudited consolidated financial statements of the Merix Group for each quarterly Accounting Period (Form 10-Q) filed with the U.S. Securities and Exchange Commission by the
Merix Group; 

  

	 	(iii)	audited consolidated financial statements of the Company for each annual Accounting Period; 

  

 46 

	 	(iv)	such audited financial statements of each other Obligor for each annual Accounting Period as are required to be prepared under the law of the jurisdiction in which that Obligor is
incorporated; 

  

	 	(v)	its unaudited consolidated financial statements and related statements of operations, stockholders’ equity and cash flows for each quarterly Accounting Period; and

  

	 	(vi)	the Book-to-Bill Ratio of the Group for Accounting Month, 

  
 provided that where the financial statements referred to in (i) and (ii) above have been posted on a publicly accessible electronic website,
they may be supplied by the Company notifying the Facility Agent of such posting and details of the website. 
  

	(b)	The following Accounts and other financial information must be supplied as soon as they are available and: 

  

	 	(i)	in the case of the Merix Group’s annual audited consolidated Accounts, and the annual audited Accounts of each Obligor, within 120 days; 

  

	 	(ii)	in the case of Merix Group’s unaudited consolidated quarterly Accounts and the Company’s unaudited consolidated quarterly Accounts, within 45 days; and

  

	 	(iii)	in the case of the Company’s monthly Book-to-Bill Ratio of the Group information, within 30 days, 

  
 of the end of the relevant Accounting Period or Accounting Month. 
  

	17.2	Form and scope of financial statements 

  

	(a)	The Company must ensure that all Accounts supplied under this Agreement: 

  

	 	(i)	fairly present in all material respects the financial condition (consolidated if it has Subsidiaries) of the relevant person as at the date to which those Accounts were drawn up and
the results of operations for the Accounting Period then ended; and 

  

	 	(ii)	comprise at least a balance sheet, profit and loss account and cashflow statement for the Accounting Period then ended and (in the case of quarterly Accounts) the annual Accounting
Period to date and the last 52/53 weeks (or less, taking into account Clause 18.4 (Initial periods)) consecutive quarterly Accounting Periods. 

  

	(b)	The Company must ensure that all annual audited consolidated Accounts of the Company are prepared in accordance with the Accounting Standards. 

  

	(c)	The Company must ensure that all unaudited Accounts are prepared in accordance with or on a basis consistent in all material respects with the Accounting Standards.

  

	(d)	The Company must ensure that each set of Accounts for a quarterly Accounting Period is accompanied by a report of the Chief Financial Officer: 

  

	 	(i)	explaining the main financial issues arising during that period; and 

  

	 	(ii)	comparing the financial performance for such period against the equivalent period in the previous financial year. 

  

 47 

	(e)	The Company must ensure that each set of Accounts for an annual Accounting Period is accompanied by any letter addressed to the management of the Company (or Merix Corporation) by
the Auditors and accompanying those Accounts. 

  

	(f)	The Company must notify the Facility Agent of any intended material change to the manner in which any Accounts are prepared. 

  

	17.3	Compliance Certificate 

  
 The Company must supply to the Facility Agent with each set of its annual and quarterly Accounts a Compliance Certificate which must be signed by the
Chief Financial Officer. 
  

	17.4	Budget 

  

	(a)	The Company must supply to the Facility Agent as soon as they are available and in any event not later than 30 days before the beginning of each annual Accounting Period a budget
for the Group for that Accounting Period. 

  

	(b)	The budget must be: 

  

	 	(i)	prepared on a basis consistent with the Accounting Standards ; and 

  

	 	(ii)	approved by the board of directors of the Company. 

  

	(c)	If the Company updates or changes the budget referred to above, it must within not more than 30 days of the update or change being made deliver to the Facility Agent in sufficient
copies for all the Lenders: 

  

	 	(i)	an updated or changed budget; and 

  

	 	(ii)	a written explanation of the main changes in that budget. 

  

	17.5	Auditors 

  
 The Company will retain one of the firms named or described in the definition of “Auditors” in Clause 1.1 (Definitions) to audit its
consolidated annual financial statements. 
  

	17.6	Information – miscellaneous 

  
 The Company must supply to the Facility Agent, in sufficient copies for all the Lenders if the Facility Agent so requests: 
  

	 	(a)	at the same time as they are despatched, copies of all documents despatched by the Company to its shareholders generally (or any class of them) or despatched by any member of the
Group to its creditors generally (or any class of them); 

  

	 	(b)	promptly upon becoming aware of them, details of any circumstances which have or might have a Material Adverse Effect; 

  

	 	(c)	promptly upon becoming aware of them, details of any claim or potential claim in an amount of USD500,000 or more made by or against a member of the Group under the Acquisition
Documents and any allegation of breach of any Acquisition Document by any party to that Acquisition Document; 

  

 48 

	 	(d)	promptly on receipt, copies of any financial statements or accounts of the Target Group not previously delivered under the EPC Facilities and copies of any completion accounts
delivered under the Acquisition Documents; 

  

	 	(e)	promptly on request, an up to date copy of its shareholders’ register (or the equivalent under the law of its jurisdiction of incorporation); 

  

	 	(f)	promptly after the same become publicly available (and only if and to the extent applicable), copies of all periodic and other reports, proxy statements and other materials filed by
the Company or any of its Subsidiaries with any governmental authority regulating reporting by issuers of publicly held securities or with any national securities exchange; and 

  

	 	(g)	promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any member of the Group (including any requested
amplification or explanation of any item in the Accounts, budgets or other material provided by any Obligor under this Agreement) as any Finance Party through the Facility Agent may reasonably request. 

  

	17.7	Notification of Default 

  

	(a)	Unless the Facility Agent has already been so notified by another Obligor, each Obligor must notify the Facility Agent of any Default (and the steps, if any, being or proposed to be
taken to remedy it) promptly upon becoming aware of its occurrence. 

  

	(b)	Promptly on request by the Facility Agent, the Company must supply to the Facility Agent a certificate, signed by two of its authorised signatories on its behalf, certifying that no
Default is outstanding or, if a Default is outstanding, specifying the Default and the steps, if any, being or proposed to be taken to remedy it. 

  

	17.8	Year end 

  
 The Company must as promptly as reasonably possible: 
  

	 	(a)	procure that each annual Accounting Period, and each financial year-end of each member of the Group, falls on the Accounting Date falling on or nearest to 30 April;

  

	 	(b)	procure that its first annual Accounting Period falls on 22 April 2006 (being five weeks prior to the last Saturday in May 2006); and 

  

	 	(c)	procure that each quarterly Accounting Period and each financial quarter of each member of the Group ends on an Accounting Date. 

  

	17.9	Know your customer requirements 

  

	(a)	Each Obligor must promptly on the request of any Finance Party supply to that Finance Party any documentation or other evidence which is reasonably requested by that Finance Party
(whether for itself, on behalf of any Finance Party or any prospective new Lender) to enable a Finance Party or prospective new Lender to carry out and be satisfied with the results of all applicable know your customer requirements.

  

	(b)	Each Lender must promptly on the request of the Facility Agent or the Security Agent supply to that Agent any documentation or other evidence which is reasonably required by that
Agent to carry out and be satisfied with the results of all applicable know your customer requirements. 

  

 49 

	18.	FINANCIAL COVENANTS 

  

	18.1	Financial undertakings 

  

	(a)	The Company must ensure that: 

  

	 	(i)	Fixed Charges Coverage Ratio: Consolidated EBITDA, less Tax paid in cash and less Capital Expenditure made to the extent not financed with other permitted indebtedness or
with cash proceeds from the sale of capital assets, during any Test Period ending on any quarterly Accounting Date on or after July 2006, shall not be less than 1.10 times Consolidated Total Debt Service for such Test Period;

  

	 	(ii)	Leverage Ratio: Consolidated Total Borrowings as at the last day of each Test Period set forth below shall not be more than the multiple of Consolidated EBITDA for such Test
Period shown in the table below: 

  

			
	 Test Period to:

	  	Leverage Ratio

	 22 July 2006
	  	4.75
		
	 21 October 2006
	  	4.25
		
	 20 January 2007
	  	3.25
		
	 21 April 2007
	  	2.75
		
	 21 July 2007
	  	2.75
		
	 20 October 2007
	  	2.75
		
	 26 January 2008
	  	2.00
		
	 26 April 2008
	  	2.00
		
	 26 July 2008
	  	2.00
		
	 25 October 2008
	  	2.00
		
	 24 January 2009
	  	2.00

  

	 	(iii)	Interest Coverage Ratio: Consolidated EBITDA for each of the Test Periods ending on the dates in the table below, shall not be less than the multiple of Consolidated Total
Interest Payable shown in the table for that Test Period: 

  

			
	 Test Period to:

	  	Interest Coverage Ratio

	 22 July 2006
	  	3.00
		
	 21 October 2006
	  	3.50
		
	 20 January 2007
	  	4.00
		
	 21 April 2007
	  	4.50
		
	 21 July 2007
	  	4.50
		
	 20 October 2007
	  	4.50
		
	 26 January 2008
	  	4.50
		
	 26 April 2008
	  	4.50
		
	 26 July 2008
	  	4.50
		
	 25 October 2008
	  	4.50
		
	 24 January 2009
	  	4.50

  

 50 

	(b)	Maximum Capital Expenditure. In respect of each period set out in column (1) below (each an Expenditure Period), the Company will procure that the Group taken as
a whole will not make Capital Expenditure in excess of the amount (each a Capital Expenditure Limit) set out in column (2) below opposite the relevant period: 

  

			
	             (1)
 Expenditure Period

	  	 (2)
 Capital Expenditure Limit

	 	  	(USD)
	 Closing Date to 22 April 2006
	  	8,500,000
	 23 April 2006 to 21 April 2007
	  	13,000,000
	 22 April 2007 to 26 April 2008
	  	12,000,000
	 27 April 2008 to 31 May 2009
	  	7,000,000

  
 provided that:

  

	 	(i)	for the purposes of this Subclause, Capital Expenditure funded by cash contributed by the Investor will be excluded in determining whether or not a Capital Expenditure Limit has
been exceeded; 

  

	 	(ii)	up to fifty per cent. (50 per cent.) of any such Capital Expenditure Limit not utilised in any Expenditure Period may be carried forward for one Expenditure Period only and added
(otherwise than for the purposes of the further application of this proviso) to the Capital Expenditure Limit for the next Expenditure Period. Any amount carried forward from one Expenditure Period to the next shall only be utilised after the
original Capital Expenditure Limit for such next Expenditure Period has been utilised in full and if not utilised within such next Expenditure Period shall lapse; and 

  

	 	(iii)	the Company shall procure that the Group will not make Capital Expenditure if doing so would result in a breach of the Fixed Charges Coverage Ratio. 

  

	(c)	Minimum Consolidated EBITDA. In respect of each period set out in column (1) below, the Company will procure that the Consolidated EBITDA will not be less than the
amount set out in column (2) below opposite the relevant period: 

  

			
	       (1)
 Test Period

	  	 (2)
 Minimum Consolidated EBITDA

	 	  	(USD)
	 Closing Date to 22 April 2006
	  	7,500,000
	 23 April 2006 to 21 April 2007
	  	20,000,000
	 22 April 2007 to 26 April 2008
	  	23,000,000
	 27 April 2008 to 30 April 2009
	  	25,000,000

  

 51 

	18.2	Financial covenant definitions 

  
 Subject to Clause 18.4 (Initial periods), in this Agreement the following terms have the meanings set out below: 
  

	 	(a)	Consolidated Cashflow for any Test Period means Consolidated EBITDA for such period: 

  

	 	  	plus the amount of any rebate or credit in respect of any Tax on profits, gains or income actually received in cash by any member of the Group during such period;

  

	 	  	plus the amount (net of any applicable withholding tax) of any dividends or other profit distributions received in cash by any member of the Group during such period from any
entity which is not itself a member of the Group; 

  

	 	  	minus all prepayments of the Loans made during the Test Period. 

  

	 	  	minus all Capital Expenditure actually paid or contractually falling due for payment by members of the Group during such period except to the extent funded out of Net
Proceeds or (for the purposes of calculating Excess Cashflow only) if greater, the amount of the Capital Expenditure Limit (as defined in Clause 18.1 (Financial undertakings) and ignoring any amount carried forward from a previous period) for that
period; 

  

	 	  	minus all amounts of Tax on profits, gains or income actually paid and/or which fell due for immediate payment during such period and minus the amount of any withholding tax
withheld from any amount paid to any member of the Group which has been taken into account in calculating Consolidated EBITDA for such period; 

  

	 	  	minus any increase or plus any decrease in Consolidated Net Working Capital between the Accounting Dates at the beginning and end of such Test Period (for which
purpose the Closing Date shall be deemed to be an Accounting Date); 

  

	 	  	minus the amount of all dividends or other distributions in respect of its shares or other ownership interests paid by any member of the Group in that period to any person
who is not a member of the Group; 

  

	 	  	minus all non-cash credits and plus all non-cash debits and other non-cash charges included in establishing Consolidated EBITDA for such period (to the extent not included in
calculating Consolidated Net Working Capital as at the Accounting Date on which such period ends); 

  

	 	  	plus any positive and minus any negative extraordinary or exceptional items received or which are paid or fall due for payment by any member of the Group in cash during such
period to the extent not already taken into account in calculating Consolidated EBITDA for such period; 

  

	 	  	minus payments to be paid to the other equity holders of the Permitted Joint Ventures permitted under Clause 19.16 (Dividends). 

  

	 	(b)	Consolidated EBITDA for any Test Period means the operating income of the Group for such period: 

  

	 	  	before deducting any depreciation or amortisation whatsoever; 

  

 52 

	 	  	before taking into account all extraordinary items (whether positive or negative) and all exceptional items (whether positive or negative); 

  

	 	  	before deducting any amount of Tax on profits, gains or income paid or payable by the Group and any amount of any rebate or credit in respect of Tax on profits, gains or
income received or receivable by the Group; 

  

	 	  	before taking into account any Interest accrued as an obligation of any member of the Group whether or not paid, deferred or capitalised during such period;

  

	 	  	before taking into account (to the extent otherwise included) any unrealised gains or losses due to exchange rate movements; 

  

	 	  	after adding back (to the extent otherwise deducted) any loss against book value incurred by the Group on the disposal of any asset (other than the sale of trading stock)
during such period; 

  

	 	  	after adding back an amount equal to the purchase accounting inventory mark-up multiplied by a fraction, the denominator of which is the book value of the inventory subject to such
adjustment (“Adjustment Inventory”) and the numerator of which is the book value of Adjustment Inventory consumed in the relevant Test Period; 

  

	 	  	after adding back (to the extent otherwise deducted) non-cash charges including deferred compensation and charges for the grant of options for the purchase of shares in Merix
Corporation; 

  

	 	  	after deducting (to the extent otherwise included) any gain over book value arising in favour of the Group on the disposal of any asset (other than the sale of trading stock)
during such period and any gain arising on any revaluation of any asset during such period; and 

  

	 	  	after deducting the amount of profit of any entity (which is not a member of the Group) in which any member of the Group has an ownership interest to the extent that the
amount of such profit included in the Accounts of the Group exceeds the amount (net of any applicable withholding tax) received in cash by members of the Group through distributions by that entity. 

  

	 	(c)	Consolidated Net Working Capital as at any Accounting Date (for which purpose the Closing Date shall be deemed to be an Accounting Date) means Consolidated Current Commercial
Assets minus Consolidated Current Commercial Liabilities, all as at such Accounting Date. For this purpose: 

  

	 	(i)	Consolidated Current Commercial Assets as at any Accounting Date means all of the current assets (other than Cash, Cash Equivalents, any credit receivable for Tax on profits,
gains or income suffered, Interest receivable and repayments of Financial Indebtedness (within paragraph (a) and/or (c) of the definition of that term in Clause 1.1 (Definitions)) receivable) of the Group as at such Accounting Date;

  

	 	(ii)	Consolidated Current Commercial Liabilities as at any Accounting Date means all of the current liabilities (excluding any Financial Indebtedness within paragraphs (a), (c),
(d), (e), (f), (g), (i), (j), (k) and/or (l) of the definition of that term in Clause 1.1 (Definitions) (unless consisting of a liability in relation to items falling within paragraph (h) of that definition) and any accrued or unpaid
Interest and any liabilities in respect of Tax on profits, gains or income and dividends, redemptions and other distributions payable to shareholders of the Company (whether or not declared)) of the Group as at such Accounting Date.

  

 53 

	 	(d)	Consolidated Total Debt Service for the Group for any Test Period means Consolidated Total Interest Payable for such period: 

  

	 	  	plus all scheduled principal amounts of Financial Indebtedness (excluding any prepayments) of members of the Group (including, for the avoidance of doubt, the Loans and
Financial Indebtedness under the Seller Loan Note Instrument but excluding Financial Indebtedness to any member of the Merix Group) which fell due for repayment or prepayment whether or not paid during or deferred for payment after such period, but
excluding any principal amount which fell due under any overdraft or revolving credit facility and which was available for simultaneous redrawing according to the terms of such facility; and 

  

	 	(e)	Consolidated Total Interest Payable for the Group for any Test Period means the Interest accrued during such period as an obligation of any member of the Group to persons
other than members of the Merix Group (whether or not paid or capitalised during or deferred for payment after such period). 

  

	 	(f)	Consolidated Total Borrowings in respect of the Group at any time means the aggregate at that time of the Financial Indebtedness of the members of the Group from sources
external to the Merix Group (including, without limitation, the Loans and Financial Indebtedness under the Seller Loan Note Instrument). 

  

	 	(g)	Test Period means the period from the Closing Date to 22 April 2006 and thereafter the annual Accounting Period commencing on the Accounting Date approximately one year
before the relevant measurement date and ending on the relevant measurement date. 

  

	18.3	Basis of Calculations 

  

	(a)	All the terms defined in Clause 18.2 (Financial covenant definitions) are to be determined on a consolidated basis and (except as expressly included or excluded in the relevant
definition) in accordance with the Accounting Standards. The financial covenants in Clause 18.1 (Financial undertakings) shall apply as of the Accounting Date at the end of each Test Period and compliance (or otherwise) shall be verified by
reference to the consolidated Accounts of the Group for the relevant Test Periods). 

  

	(b)	No item shall be deducted or credited more than once in any calculation. 

  

	18.4	Initial periods 

  

	(a)	Where any of the Test Periods would otherwise commence before the Closing Date, such Test Period shall, instead, commence on the Closing Date (the part of such period falling before
the Closing Date being ignored). 

  

	(b)	Consolidated Cashflow, Consolidated EBITDA, Consolidated Total Debt Service and Consolidated Total Interest Payable shall for any Test Period ending less than 12 months after
Closing be determined on an annualised basis by dividing each such amount by the number of days from Closing to the Accounting Date at the end of such Test Period and multiplying by 365. 

  

	(c)	For the purposes of making calculations under this Clause 18 (Financial covenants) only, the Target Group shall be deemed to have become wholly-owned subsidiaries of the Company on
the Closing Date. 

  

 54 

	19.	GENERAL COVENANTS 

  

	19.1	General 

  
 Each Obligor agrees to be bound by the covenants set out in this Clause relating to it and, where the covenant is expressed to apply to a member or
members of the Group, each Obligor must ensure that any member of the Group which is its Subsidiary also performs that covenant. 
  

	19.2	Authorisations 

  

	(a)	Each member of the Group must promptly: 

  

	 	(i)	obtain, maintain and comply with the terms; and 

  

	 	(ii)	supply certified copies to the Facility Agent, 

  
 of any authorisation required to enable it to perform its obligations under, or for the validity or enforceability of, any Transaction Document and the
transactions contemplated by it. 
  

	(b)	Each member of the Group must promptly: 

  

	 	(i)	obtain, maintain and comply with the terms; and 

  

	 	(ii)	supply certified copies to the Facility Agent, 

  
 of any authorisation required to enable it to carry on its business in the ordinary course where failure to do so has a Material Adverse Effect.

  

	19.3	Compliance with laws 

  
 Each member of the Group must comply in all respects with all laws and regulations to which it is subject where failure to do so has a Material Adverse
Effect. 
  

	19.4	Pari passu ranking 

  
 Each Obligor must ensure that its payment obligations under the Finance Documents at all times rank at least pari passu with all its present and
future unsecured unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally in its jurisdiction of incorporation or any other jurisdiction where it carries on business. 
  

	19.5	Negative pledge 

  

	(a)	Except as provided in paragraph (c) below, no member of the Group may create or allow to exist any Security Interest on any of its assets. 

  

	(b)	No member of the Group may: 

  

	 	(i)	dispose of any of its assets on terms where it is or may be or may be required to be leased to or re-acquired or acquired by a member of the Group or any of its related entities; or

  

	 	(ii)	dispose of any of its receivables on recourse terms; 

  

	 	(iii)	enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

  

 55 

	 	(iv)	enter into any other preferential arrangement having a similar effect, 

  
 in circumstances where the transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an
asset. 
  

	(c)	Paragraphs (a) and (b) above do not apply to: 

  

	 	(i)	any Security Interest created or evidenced by the Finance Documents; 

  

	 	(ii)	any Security Interest (existing as at the date of this Agreement) over assets of any member of the Target Group, but only if that Security Interest is irrevocably released and
discharged on Closing; 

  

	 	(iii)	any Security Interest comprising a netting or set-off arrangement entered into by a member of the Group with an Approved Bank in the ordinary course of its banking arrangements for
the purpose of netting debit and credit balances provided that the aggregate of all obligations owing by the Group (other than under the Finance Documents) to all the Approved Banks entitled to such rights of netting or set-off shall not exceed
USD10,000. 

  

	 	(iv)	any lien arising by operation of law or any lien or retention of title arrangement arising by agreement to substantially the same effect and in the ordinary course of trading and
not as a result of any default or omission by any member of the Group; 

  

	 	(v)	any Security Interest on an asset acquired by a member of the Group after the Closing Date or on an asset (as at the date of a person’s acquisition by a member of the Group) of
that person, but only for the period of three months from the date of acquisition and to the extent that: 

  

	 	(A)	that Security Interest was not created in contemplation of that acquisition; and 

  

	 	(B)	the principal amount secured by that Security Interest is permitted by Clause 19.7(b)(ii) (Financial Indebtedness) and has not been incurred or increased or its maturity date
extended in contemplation of, or since, that acquisition; 

  

	 	(vi)	any Security Interest over goods and documents of title to such goods arising under documentary credit transactions entered into in the ordinary course of trade and on terms
customary in that trade; 

  

	 	(vii)	any Security Interest expressly permitted in writing by the Majority Lenders (but only if the amount secured by that Security Interest is not increased above the permitted amount);
and 

  

	 	(viii)	any Security Interest (not being over any asset subject to any Security Interest under the Security Documents and not being over any asset of any of the Obligors) securing that
member of the Group’s own indebtedness which (when taken together with any other indebtedness which has the benefit of a Security Interest not permitted under the preceding subparagraphs) does not exceed USD500,000 at any time.

  

	 	(ix)	any Security Interest provided in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or
regulations; 

  

	 	(x)	cash deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature,
in each case in the ordinary course of business; 

  

 56 

	 	(xi)	cash deposits or guarantees provided to PRC or Hong Kong public utilities, in each case in the ordinary course of business; 

  

	 	(xii)	judgment liens in respect of judgments that do not constitute an Event of Default under Subclause 20.8 (Judgments); and 

  

	 	(xiii)	easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of any of the Obligors. 

  

	19.6	Disposals 

  

	(a)	Except as provided in paragraph (b) below, no member of the Group may, either in a single transaction or in a series of transactions and whether related or not and whether
voluntarily or involuntarily, dispose of all or any part of its assets. 

  

	(b)	Paragraph (a) does not apply to any disposal: 

  

	 	(i)	of trading stock to a member of the Merix Group in accordance with any reasonable transfer pricing scheme which protects the commercial interests and maximises the Consolidated
EBITDA of the Group to the extent permitted by law; 

  

	 	(ii)	on or about Closing of accounts receivable to Merix Corporation (for United States of America customers), Merix UK Limited (for United Kingdom customers), Merix Circuits Corporation
(for Canadian customers) or Merix Singapore Sales Pte. Ltd. (for Singapore customers) for fair value on terms which protect the commercial interests and maximise the Consolidated EBITDA of the Group to the extent permitted by law;

  

	 	(iii)	of trading stock outside the Merix Group made on arm’s length terms in the ordinary course of trading; 

  

	 	(iv)	of any asset (not being a business and not being shares, securities, interests in real property or rights under any Transaction Document) on arm’s length terms in exchange for
any other asset comparable or superior as to type, value, quality and title (but only if the Obligor grants security in favour of the Finance Parties (in form and substance satisfactory to the Security Agent) over any asset replacing one which was
subject to a Security Interest created under a Security Document); 

  

	 	(v)	of obsolete or redundant vehicles, plant and equipment, for cash on arm’s length terms provided that the fair market value of such assets does not exceed USD500,000 in any
fiscal year; 

  

	 	(vi)	of any asset (not being shares): 

  

	 	(A)	to an Obligor incorporated in the same jurisdiction as the disposer (but only if the recipient grants security in favour of the Finance Parties (in form and substance satisfactory
to the Security Agent) over any asset which was subject to a Security Interest created under a Security Document); or 

  

	 	(B)	by a Non-Obligor to any member of the Group; 

  

	 	(vii)	of Cash Equivalents: 

  

	 	(A)	for cash; or 

  
  

 57 

	 	(B)	in exchange for other Cash Equivalents; 

  

	 	(viii)	of cash where such disposal does not breach the other terms of the Finance Documents; 

  

	 	(ix)	pursuant to any Permitted Reorganisation; 

  

	 	(x)	constituted by a licence in respect of Intellectual Property Rights which is permitted pursuant to Clause 19.18(b) (Intellectual property rights); 

  

	 	(xi)	constituted by a Security Interest permitted under Clause 19.5(b) (Negative pledge); 

  

	 	(xii)	of any asset (not being a business and not being shares, securities, interests in real property or rights under any Transaction Document) to a Permitted Joint Venture on arm’s
length terms; or 

  

	 	(xiii)	for cash on arm’s length terms where the higher of the market value and consideration receivable (when taken together with the higher of the market value and consideration
receivable for any other disposal not allowed under the preceding subparagraphs) does not exceed USD500,000 in any annual Accounting Period of the Company. 

  

	(c)	The disposals referred to in paragraphs (b)(v),(b)(vii)(A) and (b)(xiii) above shall be for cash payable in full at or before the time of disposal. 

  

	19.7	Financial Indebtedness 

  

	(a)	Except as provided in paragraph (b) below, no member of the Group may incur or permit to be outstanding any Financial Indebtedness or enter into any off-balance sheet financing
arrangement. 

  

	(b)	Paragraph (a) does not apply to: 

  

	 	(i)	Financial Indebtedness incurred under the Finance Documents, the Seller Loan Note Instrument or the Capex Loan as in force at the date of this Agreement; 

 

	 	(ii)	any Financial Indebtedness of any person acquired by a member of the Group after Closing which is incurred under arrangements in existence at the date of acquisition, but not
incurred or increased or its maturity date extended in contemplation of, or since, that acquisition, and outstanding only for a period of three months following the date of acquisition; 

  

	 	(iii)	any Financial Indebtedness under finance or capital leases entered into before Closing provided that the terms of all such leases are disclosed to the Facility Agent before the date
30 days after Closing and that the terms which apply to such leases after Closing remain those in existence before Closing, unless changed with the consent of the Majority Lenders and provided also that the aggregate capital value of all items so
leased under all such leases entered into before Closing does not exceed $5,000,000; 

  

	 	(iv)	any Financial Indebtedness under finance or capital leases entered into after Closing, provided that the aggregate capital value of all such items so leased under outstanding leases
by members of the Group does not exceed USD500,000 at any time; 

  

	 	(v)	any Treasury Transaction permitted under Clause 19.13 (Treasury transactions); 

  

	 	(vi)	any Financial Indebtedness permitted under Clause 19.12 (Third party guarantees) or Clause 19.14 (Loans out); 

  

 58 

	 	(vii)	any Financial Indebtedness expressly permitted in writing by the Majority Lenders; 

  

	 	(viii)	any Financial Indebtedness of any member or members of the Group not otherwise permitted by this paragraph (b) which in aggregate (when taken together with the amount of any
other indebtedness which has the benefit of a Security Interest permitted under Clause19.5(c)(viii) (Negative pledge)) does not exceed USD500,000 at any time; or 

  

	 	(ix)	any Financial Indebtedness incurred by a member of the Group in the ordinary course of business and owed to another member of the Merix Group which is a party to the Group
Subordination Agreement. 

  

	(c)	This Subclause 19.7 shall not prohibit any member of the Group from incurring Financial Indebtedness the proceeds of which are at the same time used to pay in full all amounts owing
to the Finance Parties and the Agents by the Obligors under the Finance Documents. 

  

	19.8	Change of business 

  
 The Company must ensure that no substantial change is made to the general nature of the business of the Group taken as a whole from that carried on by the
Seller and its Subsidiaries at the Closing Date. 
  

	19.9	Mergers 

  
 No member of the Group may enter into any amalgamation, demerger, merger, consolidation or reconstruction other than a Permitted Reorganisation.

  

	19.10	Acquisitions 

  

	(a)	Except as provided in paragraph (b) below, no member of the Group may: 

  

	 	(i)	acquire or subscribe for shares or other ownership interests in or securities of any company or other person; 

  

	 	(ii)	acquire any business; or 

  

	 	(iii)	incorporate any company or other person. 

  

	(b)	Paragraph (a) does not apply to: 

  

	 	(i)	any acquisition or subscription for shares or other ownership interests in any person referred to in the Structure Memorandum; 

  

	 	(ii)	the Acquisition; 

  

	 	(iii)	the subscription for or acquisition of shares in its direct Subsidiary, or the acquisition of the assets of an existing member of the Group, provided that: 

 

	 	(A)	the relevant shares and/or assets are upon acquisition effectively charged under the Security Documents; and 

  

	 	(B)	the aggregate of the amounts so applied does not exceed USD500,000 at any time; 

  

	 	(iv)	any Permitted Reorganisation; or 

  

 59 

	 	(v)	the acquisition or subscription for shares or ownership interests in (or the incorporation of a special purpose company to acquire an interest in) a Permitted Joint Venture on
arm’s length terms. 

  

	19.11	Environmental matters 

  

	(a)	Each member of the Group must ensure that: 

  

	 	(i)	it is, and has been, in compliance with all Environmental Laws and Environmental Approvals applicable to it, where failure to do so has a Material Adverse Effect or is reasonably
likely to result in any liability for a Finance Party; 

  

	 	(ii)	it obtains all requisite Environmental Approvals where failure to obtain would have a Material Adverse Effect or is reasonably likely to result in any liability for a Finance Party;
and 

  

	 	(iii)	it implements procedures to monitor compliance with and to prevent liability under any Environmental Law. 

  

	(b)	Each Obligor must, promptly upon becoming aware, notify the Facility Agent of: 

  

	 	(i)	any Environmental Claim current, or to its knowledge, pending or threatened; or 

  

	 	(ii)	any circumstances reasonably likely to result in an Environmental Claim, 

  
 which has or, if substantiated, would have a Material Adverse Effect or is reasonably likely to result in any liability for a Finance Party. 

 

	(c)	The Company agrees to indemnify each Finance Party, each receiver appointed under any Security Document and their respective officers (together the Indemnified Parties)
against any loss or liability suffered or incurred by that Indemnified Party (except to the extent caused by such Indemnified Party’s own negligence or wilful default) which: 

  

	 	(i)	arises by virtue of any actual or alleged breach of any Environmental Law (whether by any Obligor, an Indemnified Party or any other person); or 

  

	 	(ii)	arises in connection with an Environmental Claim, 

  
 which relates to the Group, any assets of the Group or the operation of all or part of the business of the Group (or in each case any member of the Group)
and which would not have arisen if the Finance Documents or any of them had not been executed by that Finance Party. 
  

	19.12	Third party guarantees 

  

	(a)	Except as provided in paragraph (b) below, no member of the Group may incur or allow to be outstanding any guarantee by such member of the Group or any of its Subsidiaries in
respect of any person. 

  

	(b)	Paragraph (a) does not apply to: 

  

	 	(i)	any guarantee arising under the Transaction Documents; 

  

	 	(ii)	the endorsement of negotiable instruments in the ordinary course of trade; 

  

 60 

	 	(iii)	performance bonds guaranteeing performance by an Obligor (not being the Company or the Borrower) under any contract (not being in respect of Financial Indebtedness) entered into in
the ordinary course of trade; 

  

	 	(iv)	guarantees by other Obligors in respect of the Financial Indebtedness of Obligors (not being the Company or the Borrower) where such Financial Indebtedness is permitted by the terms
of this Agreement; or 

  

	 	(v)	guarantees (not being in respect of any obligation or liability of the Company or the Borrower) not otherwise allowed under the preceding subparagraphs under which the aggregate
liability (actual or contingent) of members of the Group (when taken together with the amount of any Financial Indebtedness permitted under Clause 19.14(b)(v) (Loans out)) does not exceed USD500,000. 

  

	19.13	Treasury transactions 

  
 No member of the Group may enter into any Treasury Transaction, other than 
  

	 	(a)	contracts entered into in the ordinary course of business with an Approved Bank for a term of no more than one year which are not for speculative purposes. 

 

	 	(b)	any Treasury Transaction expressly permitted in writing by the Majority Lenders. 

  

	19.14	Loans out 

  

	(a)	Except as provided in paragraph (b) below, no member of the Group may be the creditor in respect of any Financial Indebtedness or of any trade credit extended to any of its
customers. 

  

	(b)	Paragraph (a) does not apply to: 

  

	 	(i)	trade credit extended by any member of the Group to its customers on normal commercial terms and in the ordinary course of its trading activities; 

  

	 	(ii)	any loan by one Obligor to another Obligor or by a member of the Group to a Non-Obligor provided that the terms of paragraph (c) below are complied with.

  

	 	(iii)	loans made to directors and employees of members of the Group in order to purchase shares in the Company to the extent permitted by Clause 19.15 (Share capital);

  

	 	(iv)	loans to Joint Ventures to the extent permitted by Clause19.27 (Joint Ventures); or 

  

	 	(v)	Financial Indebtedness not otherwise allowed under the preceding subparagraphs which (when taken together with the aggregate actual or contingent liability under any guarantees
permitted under Clause 19.12(b)(v) (Third party guarantees)) does not exceed USD500,000. 

  

	(c)	Any loan made between members of the Group must be on terms that: 

  

	 	(i)	the creditor of that loan (if an Obligor) shall grant security over its rights in respect of that loan in favour of the Lenders on terms acceptable to the Facility Agent (acting on
the instructions of the Majority Lenders) and in accordance with Clause 19.30 (Security); 

  

	 	(ii)	each of the creditor and the debtor of that loan shall be party to the Group Subordination Agreement as an Obligor under and as defined in the Group Subordination Agreement; and

  

 61 

	 	(iii)	the creditor in respect of that loan may not take any action to cause that loan (or any related interest, fees or other amounts) to become due or to be paid:

  

	 	(A)	in breach of the terms of the Group Subordination Agreement; or 

  

	 	(B)	if not already prohibited by paragraph (A), unless the other member of the Group has sufficient readily available cash to pay the sum which is due or demanded.

  

	19.15	Share capital 

  

	(a)	Except as provided in paragraph (b) below, no member of the Group may: 

  

	 	(i)	redeem, purchase, defease, retire or repay any of its shares or share capital (or any instrument convertible into shares or share capital) or resolve to do so;

  

	 	(ii)	issue any shares (or any instrument convertible into shares) which by their terms are redeemable or carry any right to a return prior to the Senior Discharge Date; or

  

	 	(iii)	issue any shares or share capital (or any instrument convertible into shares or share capital) to any person other than its Holding Company. 

  

	(b)	Paragraph (a) does not apply to: 

  

	 	(i)	any transaction expressly allowed under the Finance Documents; 

  

	 	(ii)	the issue of shares by a member of the Group to another member of the Group which is a shareholder in it prior to that issue where, if any shares in the company issuing such shares
are the subject of a Security Interest pursuant to the Security Documents, such shares become the subject of an equivalent Security Interest in favour of the Finance Parties on the same terms; 

  

	 	(iii)	any transaction which is a Permitted Reorganisation; or 

  

	 	(iv)	the issue of shares by the Company to one or more employees as compensation provided that the aggregate amount of ordinary shares allotted to them does not exceed USD500,000 at any
time, with each share valued at its book value at the time it was allotted to an employee. 

  

	19.16	Dividends 

  

	(a)	Except as provided below, the Company may not and will procure that its Subsidiaries do not: 

  

	 	(i)	declare, make or pay, or pay interest on any unpaid amount of, any dividend, charge, fee or other distribution (whether in cash or in kind) on or in respect of its shares or share
capital (or any class of its share capital); 

  

	 	(ii)	repay or distribute any share premium account; or 

  

	 	(iii)	except as required by law, pay or allow any member of the Group to pay any management, advisory or other fee to or to the order of the shareholders of the Company (or any of their
respective Affiliates which is not a member of the Group). 

  

	(b)	Paragraph (a) does not apply to: 

  

	 	(i)	payment of dividends by any Subsidiary of the Borrower to the Borrower; 

  

 62 

	 	(ii)	payment of dividends by any Subsidiary of the Borrower to any other wholly-owned Subsidiary of the Borrower; or 

  

	 	(iii)	payment of dividends by EPCHY, EPCHZ, EPC Lomber and EPC Dongguan provided that such dividends (or profit distribution) are paid to all shareholders of such Subsidiary pro
rata according to their respective equity interests in such Subsidiary. 

  

	19.17	Loan Notes 

  
 The Company may not (and will ensure that no other member of the Group will): 
  

	 	(a)	except as allowed by the terms of the Seller Subordination Agreement, repay or prepay any amount (whether of principal, fee, interest, premium or other charge) outstanding under the
Seller Loan Note Instrument; or 

  

	 	(b)	purchase, redeem, defease or discharge or provide any guarantee or security for or sub participation in the Seller Loan Note Instrument or any amount outstanding under the Seller
Loan Note Instrument. 

  

	19.18	Intellectual property rights 

  

	(a)	Except as provided below, each member of the Group must, except where the failure to do so would not have a Material Adverse Effect: 

  

	 	(i)	make any registration and pay any fee or other amount which is necessary to retain and protect the Intellectual Property Rights which are material to the business of a member of the
Group; 

  

	 	(ii)	record its interest in those Intellectual Property Rights; 

  

	 	(iii)	take such steps as are necessary and commercially reasonable (including the institution of legal proceedings) to prevent third parties infringing those Intellectual Property Rights;

  

	 	(iv)	not use or permit any such Intellectual Property Right to be used in a way which may, or take or omit to take any action which may, adversely affect the existence or value of such
Intellectual Property Right; and 

  

	 	(v)	not grant any licence in respect of those Intellectual Property Rights to anyone not a member of the Group. 

  

	(b)	Paragraph (a)(v) above does not apply to: 

  

	 	(i)	licence arrangements entered into between members of the Group for so long as they remain members of the Group; or 

  

	 	(ii)	licence arrangements entered into on normal commercial terms and in the ordinary course of its business. 

  

	19.19	Insurances 

  

	(a)	In this Clause a prudent owner means a prudent owner and operator of any business, and of assets of a type and size, similar in all cases to those owned and operated by the
relevant member of the Group in a similar location. 

  

 63 

	(b)	Each member of the Group must ensure that its Insurances insure it for its insurable interest in respect of all risks: 

  

	 	(i)	which are required to be insured against under any applicable law or regulation; 

  

	 	(ii)	which a prudent owner would insure against. 

  

	(c)	Each member of the Group must ensure that the Insurances are with an insurance company or underwriter which is of international standing and is not a captive insurer which is a
member of the Group. 

  

	(e)	Each member of the Group must ensure that its Insurances comply with the following requirements: 

  

	 	(i)	each member of the Group must be insured for its own insurable interest, and separately from any other insured party, on a basis that: 

  

	 	(A)	any non-disclosure, misrepresentation or breach by or on behalf of any one insured party will not prejudice the cover of any other insured party; and 

  

	 	(B)	insurers waive any right of subrogation against any member of the Group or any Finance Party; 

  

	 	(ii)	each member of the Group must be entitled to claim directly for any insured loss suffered by it; 

  

	 	(iii)	the insurers must give at least 30 days’ notice to the Facility Agent if any insurer proposes to repudiate, rescind or cancel any Insurance or to treat it as avoided in whole
or in part or otherwise decline any valid claim under it by or on behalf of that member of the Group; 

  

	 	(iv)	each member of the Group must be free to assign all amounts payable to it under each of its Insurances and all its rights in connection with those amounts in favour of the Security
Agent as agent and trustee for the Finance Parties; and 

  

	 	(v)	no limits of cover purchased under any Insurance are to be capable of being eroded below the limits which a prudent owner would maintain by reason of claims from persons who are not
members of the Group. 

  

	(f)	Each member of the Group must: 

  

	 	(i)	promptly pay (or procure payment of) all premiums and do anything which is necessary to keep each of its Insurances in full force and effect; and 

  

	 	(ii)	not do or allow anything to be done which may (and promptly notify the Facility Agent of any event or circumstance which does or is reasonably likely to) entitle any insurer of any
of its Insurances to repudiate, rescind or cancel it or to treat it as avoided in whole or in part or otherwise decline any valid claim under it by or on behalf of that member of the Group. 

  

 64 

	(g)	Each member of the Group must: 

  

	 	(i)	promptly notify the Facility Agent of any event or occurrence giving rise to any aggregate loss or liability in excess of USD500,000 in respect of which any member of the Group is
entitled to make one or more claim under any Insurance; and 

  

	 	(ii)	keep the Facility Agent advised of the progress of the claim(s). 

  

	(h)	If any member of the Group fails to maintain any contract of insurance which it is required to maintain under this Agreement, that member of the Group will allow the Facility Agent
to purchase the requisite insurance on its behalf if the Facility Agent so elects. That member of the Group must immediately on request by the Facility Agent pay the reasonable costs and expenses of the Facility Agent or any of its agents incurred
in the purchase of that insurance. 

  

	(i)	Each member of the Group must keep all assets material to the conduct of its business in good order and condition, ordinary wear and tear excepted. 

  

	19.20	Lines of Business 

  
 The Company must not carry on any business or own any assets, other than: 
  

	 	(a)	the ownership of shares of the Borrower; 

  

	 	(b)	the ownership of Cash and the provision of administrative services (excluding treasury services) to other members of the Group of a type customarily provided by a Holding Company to
its Subsidiaries; 

  

	 	(c)	incurring Financial Indebtedness under the Transaction Documents provided that the same is permitted by the Finance Documents; or 

  

	 	(d)	rights arising under the Transaction Documents. 

  

	19.21	Arm’s-length terms 

  
 No member of the Group may enter into any material transaction with any person otherwise than on arm’s-length terms and for full market value, save
for: 
  

	 	(a)	loans between members of the Group; or 

  

	 	(b)	other transactions between members of the Group, 

  
 which are permitted by other terms of this Agreement provided that the terms of those loans or transactions do not result in a transfer of value from an
Obligor to a Non-Obligor. 
  

	19.22	Amendments to documents 

  
 No member of the Group may: 
  

	 	(a)	amend its memorandum or articles of association, joint venture contracts or other constitutional documents; 

  

	 	(b)	amend or waive any term of the Transaction Documents or any of the other documents delivered to the Facility Agent pursuant to Clause 4.1 (Conditions precedent documents),

  
 without the prior written consent of the
Original Lenders if prior to Closing, and thereafter in a manner or to an extent which is reasonably likely in any way to affect materially and adversely the interests of the Finance Parties under the Finance Documents. 
  

 65 

	19.23	Bank Accounts 

  

	(a)	As soon as practicable after Closing the Borrower shall open such operating accounts as it requires with the Security Agents. 

  

	(b)	The Company shall procure that all sales by the Group outside the People’s Republic of China shall be made by the Borrower to the Group’s customers or, to the extent that
it is in the commercial interests of the Group for tax or other reasons or required by law, to Merix Corporation (for sales to United States of America customers), Merix UK Limited (for United Kingdom customers), Merix Circuits Corporation (for
Canadian customers) or Merix Singapore Sales Pte. Ltd. (for Singapore customers). 

  

	(c)	The Company shall procure that any member of the Merix Group which purchases from Borrower shall pay for all such purchases on reasonable arm’s length commercial terms.

  

	(d)	The Borrower shall pay (or procure the payment of) the proceeds of all receivables from all sales into the Borrower’s operating account(s) with the Security Agent.

  

	(e)	After the opening of the account(s) referred to in paragraph (a) above, the Borrower may not open or maintain any account or enter into any banking relationship with any bank
other than the Security Agent. 

  

	19.24	Access 

  
 Upon reasonable notice being given by the Facility Agent, each Obligor must, and will cause each other member of the Group to, allow any one or more
representatives of the Facility Agent and/or accountants or other professional advisers appointed by the Facility Agent (at the Company’s risk and expense) to have access during normal business hours to the premises, assets, books and records
of that member of the Group to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants. 
  

	19.25	Pension schemes 

  

	(a)	Each member of the Group must be: 

  

	 	(i)	in compliance with all laws and contracts relating to any of its pension schemes; and 

  

	 	(ii)	maintain and fund its pension schemes to at least the extent required by local law and practice. 

  

	(b)	The Company must supply the Facility Agent with a copy of any report in respect of any pension scheme operated by a member of the Group which the Facility Agent may reasonably
request. 

  

	19.26	Taxes 

  
 Each member of the Group must pay all Taxes due and payable (or, where payments of Tax must be made by reference to estimated amounts, such estimated Tax
(calculated in good faith) as due and payable for the relevant period) by it prior to the accrual of any fine or penalty for late payment, unless (and only to the extent that): 
  

	 	(a)	payment of those Taxes is being contested in good faith; 

  

	 	(b)	adequate reserves are being maintained for those Taxes and the costs required to contest them; and 

  

 66 

	 	(c)	failure to pay those Taxes does not have a Material Adverse Effect. 

  

	19.27	Joint Ventures 

  
 No member of the Group may: 
  

	 	(a)	enter into, invest in, acquire any interest in, transfer any asset to, lend to, be the creditor of any Financial Indebtedness of or give any guarantee in respect of the obligations
of any Joint Venture; or 

  

	 	(b)	trade with or sell to or acquire assets or services from any Joint Venture otherwise than on arm’s length terms, 

  
 other than in respect of a Permitted Joint Venture. 
  

	19.28	Executive Officers 

  

	(a)	The Company must ensure that there is in place in respect of each Obligor and each Subsidiary qualified management with appropriate skills. 

  

	(b)	If any of the Executive Officers ceases (whether by reason of death, retirement at normal retiring age or through ill health or otherwise) to perform his or her duties (as required
under the service contracts delivered to the Facility Agent pursuant to under paragraph 18 of Schedule 2 (Conditions precedent documents)), the Company must promptly notify the Facility Agent. 

  

	19.29	Guarantees 

  

	(a)	The Company must ensure that each of the Targets will comply with section 76 of the Companies Act of Singapore or section 47A of the Companies Ordinance of Hong Kong (if applicable)
at or before the time it is required to execute the Finance Documents provided for in Schedule 5 (Security Documents). 

  

	(b)	The Company must ensure that: 

  

	 	(i)	each of the Targets becomes an Additional Guarantor at or before the time provided for in Schedule 5 (Security Documents); 

  

	 	(ii)	each person that becomes a Subsidiary of the Company becomes an Additional Guarantor as soon as such person becomes a Subsidiary. 

  

	(c)	The Company is not required to perform its obligations under paragraph (a) or (b) above if: 

  

	 	(i)	it is unlawful for the relevant person to become a Guarantor; and 

  

	 	(ii)	that person becoming a Guarantor would result in personal liability for that person’s directors or other management. 

  

	(d)	Each Obligor must use, and must procure that the relevant person uses, all reasonable endeavours (including compliance with sections section 76 of the Companies Act of Singapore or
section 47A of the Companies Ordinance of Hong Kong or the equivalent in that relevant person’s jurisdiction of incorporation) lawfully to avoid any such unlawfulness or personal liability. This includes agreeing to a limit on the amount
guaranteed. The Facility Agent may agree to such a limit if, in its opinion, to do so might avoid the relevant unlawfulness or personal liability. 

  

 67 

	19.30	Security 

  

	(a)	Each Obligor shall ensure that the persons identified in Schedule 5 (Security Documents) will execute and deliver to the Security Agent the intended Security Documents identified
against their name in that Schedule at or before the time provided for in that Schedule. 

  

	(b)	Each Obligor must, and shall procure that each Subsidiary, on acquiring any asset which: 

  

	 	(i)	would not be immediately and effectively charged by the then existing Security Documents; and 

  

	 	(ii)	(A)            is of a type which is charged by the then existing Security Documents; or 

  

	 	(B)	is otherwise material to the business of that member of the Group, 

  
 executes and delivers to the Security Agent such further or additional Security Documents in relation to such assets as the Majority Lenders may
reasonably require and in form and substance satisfactory to them. 
  

	(c)	Each Obligor shall execute and deliver to the Security Agent such further or additional Security Documents in such form as the Majority Lenders shall require creating an effective
first ranking fixed Security Interest over the shares in any entity which becomes a member of the Group after Closing. 

  

	(d)	Eastern Pacific Circuits Investments Limited (to be renamed as Merix Holding (Hong Kong) Limited) shall procure the registration of the EPC Lomber and EPC Dongguan Equity Pledges
with the SAIC and MOFCOM by not later than 90 days after the date of execution of these Equity Pledges. 

  

	(e)	Eastern Pacific Circuits Investments (Singapore) Pte. Ltd. (to be renamed as Merix Holding (Singapore) Pte. Ltd.) shall procure the registration of the MHY, MHZ and Merix
Distribution Equity Pledges with the SAIC and MOFCOM by not later than 90 days after the date of execution of these Equity Pledges. 

  

	(f)	Each Obligor shall, and shall procure that each other relevant member of the Group which is its Subsidiary shall, at its own expense, execute and do all such assurances, acts and
things as the Security Agent may reasonably require: 

  

	 	(i)	for registering any Security Documents in any required register and for perfecting or protecting the security intended to be afforded by the Security Documents; and

  

	 	(ii)	if the Security Documents have become enforceable, for facilitating the realisation of all or any part of the assets which are subject to the Security Documents and the exercise of
all powers, authorities and discretions vested in the Security Agent or in any receiver of all or any part of those assets, 

  
 and in particular shall execute all transfers, conveyances, assignments and releases of that property whether to the Security Agent or to its nominees and
give all notices, orders and directions which the Security Agent may reasonably think expedient. 
  

	(g)	On each date that a Security Document is entered into after Closing, each Obligor shall procure that the documents listed in Part 4 (To be delivered in respect of additional
security) of Schedule 2 (Conditions Precedent Documents) in respect of the Obligor entering into such Security Document are delivered to the Facility Agent. 

  

 68 

	(h)	The Company shall procure and Merix Manufacturing (Hong Kong) Limited shall obtain all necessary consent and approval from the Lessor in relation to the granting of the Security
Interest over and in respect of the TKO Secured Property in accordance with the terms of the Master Security Deed, as identified in Schedule 5 (Security Documents) within 14 days from the date of this Agreement (each of the Lessor, the Lease and TKO
Secured Property having the meaning as defined in the Master Security Deed). 

  

	19.31	Acquisition Documents 

  

	(a)	The Company shall promptly pay (or shall procure that there is promptly paid) all amounts payable by the Company (or any member of the Merix Group) under the Acquisition Documents
as and when the same become due (save to the extent being contested by a member of the Merix Group in good faith and where adequate reserves are being maintained for any such payment). 

  

	(b)	The Company must take, and must procure that each member of the Group takes, all commercially reasonable steps to protect, maintain and enforce its rights and pursue any claims or
remedies which the Merix Group has under the Acquisition Documents. 

  

	20.	DEFAULT 

  

	20.1	Events of Default 

  
 Each of the events or circumstances set out in this Clause is an Event of Default. 
  

	20.2	Non-payment 

  
 An Obligor does not pay on the due date any amount payable by it under the Finance Documents in the manner required under the Finance Documents, unless
the non-payment: 
  

	 	(a)	is caused by technical or administrative error by a bank in the transmission of funds; and 

  

	 	(b)	is remedied within three Business Days of the due date. 

  

	20.3	Breach of other obligations 

  

	(a)	An Obligor does not comply with any term of Clauses 18 (Financial covenants), 19.4 (Pari passu ranking), 19.5 (Negative pledge), 19.6 (Disposals), 19.9 (Mergers), 19.10
(Acquisitions), 19.12 (Third party guarantees), 19.14 (Loans out), 19.15 (Share capital), 19.16 (Dividends), 19.17 (Loan Notes), 19.29 (Guarantees) or 19.30 (Security); or 

  

	(b)	an Obligor does not comply with any term of the Finance Documents (other than any term referred to in Clause 20.2 (Non-payment) or in paragraph (a) above), unless the non
compliance: 

  

	 	(i)	is capable of remedy; and 

  

	 	(ii)	is remedied within 14 days of the earlier of the Facility Agent giving notice of the breach to the Company and any Obligor becoming aware of the non-compliance.

  

	20.4	Misrepresentation 

  
 A representation or warranty made or deemed to be repeated by an Obligor in any Finance Document or in any document delivered by or on behalf of any
Obligor under any Finance Document is incorrect or misleading in any material respect when made or deemed to be repeated, unless the circumstances giving rise to the breach of warranty: 
  

	 	(a)	are capable of remedy (in the sole opinion of the Facility Agent); and 

  
  

 69 

	 	(b)	are remedied within 30 days of the earlier of the Facility Agent giving notice of the breach to the Company and any Obligor becoming aware of the misrepresentation or breach of
warranty. 

  

	20.5	Cross-default 

  

	(a)	Any of the following occurs in respect of a member of the Group: 

  

	 	(i)	any of its Financial Indebtedness (or any amount payable in respect of its Financial Indebtedness) is not paid when due (after the expiry of any originally applicable grace period);
or 

  

	 	(ii)	any of its Financial Indebtedness: 

  

	 	(A)	becomes prematurely due and payable prior to its stated maturity or, if the Financial Indebtedness arises under a guarantee, prior to the stated maturity of the Financial
Indebtedness which is the subject of the guarantee; or 

  

	 	(B)	is placed on demand; 

  

	 	(C)	is capable of being declared by or on behalf of a creditor to be prematurely due and payable or of being placed on demand; or 

  

	 	(D)	is terminated or closed out or is capable of being terminated or closed out, 

  

in each case, as a result of an event of default or any provision having a similar effect (howsoever described); or 
  

	 	(iii)	any commitment of a provider of Financial Indebtedness to it is cancelled or suspended, or is capable of being cancelled or suspended by such provider, in each case, as a result of
an event of default or any provision having a similar effect (howsoever described), 

  
 unless the aggregate principal amount of Financial Indebtedness falling within all or any of paragraphs (i) to (iii) above is less than
USD1,000,000. 
  

	(b)	Any of the following occurs in respect of a member of the Merix Group: 

  

	 	(i)	the Wachovia Facility becomes due and payable prior to its stated maturity; or 

  

	 	(ii)	formal litigation proceedings are commenced to recover any amount due and payable under the Wachovia Facility; or 

  

	 	(iii)	enforcement of any Security Interest over any of its assets; or 

  

	 	(iv)	a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution for, to petition for or to file documents with a court or any
registrar for its winding-up, administration or dissolution or for the seeking of relief under any applicable bankruptcy, insolvency, company or similar law or any such resolution is passed; or 

  

	 	(v)	any Borrower or Guarantor makes an assignment for the benefit of creditors, makes or sends notice of a bulk transfer or calls a meeting of its creditors or principal creditors in
connection with a moratorium or adjustment of the Indebtedness due to them; or 

  

 70 

	 	(vi)	a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of
debt, dissolution or liquidation order or statute of any jurisdiction now or hereafter in effect (whether at law or in equity) is filed against any Borrower or Guarantor or all or any part of its properties and such petition or application is not
dismissed within sixty (60) days after the date of its filing or any Borrower or Guarantor shall file any answer admitting or not contesting such petition or application or indicates its consent to, acquiescence in or approval of, any such
action or proceeding or the relief requested is granted sooner; or 

  

	 	(vii)	a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether at a law or equity) is filed by any Borrower or Guarantor or for all or any part of its property; or 

  

	 	(viii)	its shareholders, directors or other officers request the appointment of, or give notice of their intention to appoint, a liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver, administrator or similar officer in respect of it or any of its assets. 

  

	20.6	Insolvency 

  
 Any of the following occurs in respect of any member of the Group: 
  

	 	(a)	it is, or is deemed for the purposes of any applicable law to be, unable to pay its debts as they fall due or insolvent; or 

  

	 	(b)	it admits its insolvency or its inability to pay its debts as they fall due; or 

  

	 	(c)	it suspends making payments on any of its debts or announces an intention to do so; or 

  

	 	(d)	by reason of actual or anticipated financial difficulties, it begins negotiations with any creditor for the rescheduling or restructuring of any of its indebtedness; or

  

	 	(e)	the value of its assets is less than its liabilities (taking into account contingent and prospective liabilities); or 

  

	 	(f)	a moratorium is declared or instituted in respect of any of its indebtedness. 

  

	 	(g)	If a moratorium occurs in respect of any member of the Group, the ending of the moratorium will not remedy any Event of Default caused by the moratorium. 

 

	20.7	Insolvency proceedings 

  

	(a)	Except as provided in paragraph (b) below, any of the following occurs in respect of a member of the Group: 

  

	 	(i)	any step is taken with a view to a moratorium or a composition, assignment or similar arrangement with any of its creditors; or 

  

	 	(ii)	a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution for, to petition for or to file documents with a court or any
registrar for its winding-up, administration or dissolution or for the seeking of relief under any applicable bankruptcy, insolvency, company or similar law or any such resolution is passed; or 

  

 71 

	 	(iii)	any person presents a petition or files documents with a court or any registrar for its winding-up, administration, dissolution or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) or seeking relief under any applicable bankruptcy, insolvency, company or similar law; or 

  

	 	(iv)	an order for its winding-up, administration or dissolution is made or other relief is granted under any applicable bankruptcy, insolvency, company or similar law; or

  

	 	(v)	any Security Interest is enforced over any of its assets; 

  

	 	(vi)	any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or
any of its assets; or 

  

	 	(vii)	its shareholders, directors or other officers request the appointment of, or give notice of their intention to appoint, a liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver, administrator or similar officer in respect of it or any of its assets. 

  

	(b)	Paragraph (a) above does not apply to: 

  

	 	(i)	any step or procedure which is part of a Permitted Reorganisation; or 

  

	 	(ii)	a petition for winding-up presented by a creditor which is being contested in good faith and with due diligence and is discharged or struck out within 14 days.

  

	20.8	Judgments 

  

	(a)	Any judgment for the payment of money is rendered against any member of the Group for an amount in excess of USD250,000 in one case or in excess of USD500,000 in the aggregate and
the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of a member of the Group, to
enforce any such judgment. 

  

	(b)	Paragraph (a) does not apply if: 

  

	 	(i)	the judgment is covered by insurance and the insurer has assumed responsibility in writing for such judgment within 30 days; and 

  

	 	(ii)	the judgment amount is paid or otherwise satisfied within 60 days. 

  

	20.9	Creditors’ process 

  

	(a)	Except as provided in paragraph (b) below, any attachment, sequestration, distress, execution or analogous event affects any asset or assets of a member of the Group.

  

	(b)	Paragraph (a) does not apply if: 

  

	 	(i)	the asset or assets are not subject to any Security Interest under the Security Documents and the aggregate value of that asset or those assets is less than USD1,000,000; or

  

 72 

	 	(ii)	that attachment, sequestration, distress, execution or analogous event is being contested in good faith and with due diligence and is discharged within 14 days.

  

	20.10	Analogous proceedings 

  
 There occurs, in relation to any member of the Group, in any jurisdiction to which it or any of its assets are subject, any event which appears to
correspond with any of those mentioned in Clauses 20.6 (Insolvency) to 20.8 (Judgments) (inclusive). 
  

	20.11	Cessation of business 

  
 A member of the Group suspends, ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business or to change the nature of
its business from that undertaken at the date of this Agreement except: 
  

	 	(a)	as part of a Permitted Reorganisation; or 

  

	 	(b)	as a result of any disposal allowed under this Agreement. 

  

	20.12	Finance Documents 

  

	(a)	It is or becomes unlawful for any Obligor to perform any of its obligations under the Finance Documents. 

  

	(b)	Any Finance Document is not effective in accordance with its terms or is alleged by an Obligor to be ineffective in accordance with its terms for any reason.

  

	(c)	A Security Document does not create the Security Interests it purports to create. 

  

	(d)	An Obligor repudiates or rescinds a Finance Document or evidences an intention to repudiate or rescind a Finance Document. 

  

	20.13	Ownership of members of the Group 

  

	(a)	An Obligor (other than the Company) is not or ceases to be a wholly-owned Subsidiary of the Company. 

  

	(b)	The Company does not or ceases to hold beneficially, directly or indirectly, 85% of the equity interest in EPCHZ. 

  

	(c)	The Company does not or ceases to hold beneficially, directly or indirectly, 95% of the equity interest in EPCHY. 

  

	(d)	The Company does not or ceases to hold beneficially, directly or indirectly, 90% of the equity interest in EPC Lomber. 

  

	(e)	The Company does not or ceases to hold beneficially, directly or indirectly, 85.29% of the equity interest in EPC Dongguan. 

  

	20.14	Subordination Agreement 

  

	(a)         (i)	Any party to the Group Subordination Agreement (other than a Finance Party) does not comply with the terms of the Group Subordination Agreement; or 

  

 73 

	 	(ii)	a representation or warranty given by any party to a Subordination Agreement is incorrect in any material respect, 

  
 and, if the non-compliance or circumstances giving rise to the
misrepresentation or breach of warranty are capable of remedy, such non-compliance is or circumstances are not remedied within 14 days of the earlier of the Facility Agent giving notice to that party of and that party becoming aware of the
non-compliance or misrepresentation or breach of warranty; 
  

	(b)	a Subordination Agreement is not effective or is alleged by a party to it (other than a Finance Party) to be ineffective; 

  

	(c)	any party to a Subordination Agreement (other than a Finance Party) repudiates that Subordination Agreement or takes any step which can reasonably be interpreted as indicating an
intention to repudiate it; or 

  

	(d)	any other event occurs which has a material adverse effect on the rights of the Finance Parties under a Subordination Agreement. 

  

	20.15	Material adverse effect 

  
 Any event or series of events (whether related or not) occurs which has a Material Adverse Effect. 
  

	20.16	Audit qualification 

  
 The Auditors qualify their report on any audited Accounts of the Company: 
  

	 	(a)	on the grounds that the information supplied to them or to which they had access was inadequate or unreliable; 

  

	 	(b)	on the grounds that they are unable to prepare such Accounts on a going concern basis; or 

  

	 	(c)	otherwise in terms or as to issues which in the opinion of the Majority Lenders (acting reasonably) are material in the context of the Finance Documents and the transactions
contemplated by them. 

  

	20.17	Expropriation 

  
 The authority or ability of any member of the Group to conduct its business is wholly or substantially curtailed by any seizure, expropriation,
nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person. 
  

	20.18	Rescission of Agreements 

  
 Any party to the Acquisition Documents or the Seller Loan Note Instrument rescinds or purports to rescind or repudiates or purports to repudiate any of
those agreements or instruments in whole or in part where to do so would in the opinion of the Majority Lenders (acting reasonably) materially and adversely affect the interests of the Lenders under the Finance Documents. 
  

	20.19	Proceedings 

  
 There shall occur any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or enquiry concerning or
arising in consequence of any of the Acquisition Documents or the Finance Documents or the implementation of any matter or transaction provided for in the Acquisition Documents or the Finance Documents, and which is reasonably likely to be
determined adversely to any member of the Group, and which if so determined would have a Material Adverse Effect. 
  

 74 

	20.20	Acceleration 

  

	(a)	Subject to paragraph (b) below, if an Event of Default is outstanding, the Facility Agent may, and must if so instructed by the Majority Lenders, by notice to the Company:

  

	 	(i)	declare that an Event of Default has occurred; and/or 

  

	 	(ii)	cancel all or any part of the Total Commitments; and/or 

  

	 	(iii)	declare that all or part of any amounts outstanding under the Finance Documents are: 

  

	 	(A)	immediately due and payable; and/or 

  

	 	(B)	payable on demand by the Facility Agent acting on the instructions of the Majority Lenders. 

  
 Any notice given under this Subclause will take effect in accordance with its terms. 
  

	(b)	In the case of an Event of Default under Clauses 20.6, 20.7, 20.9, 20.10, 20.11 or 20.17 which arises in relation to an event or circumstances concerning a Non-Core Subsidiary and
provided that no other Default or Event of Default has occurred and is subsisting, the Facility Agent and the Lenders will not take any steps under paragraph (a) above unless they determine in their absolute discretion (which determination may
be made or varied at any time whilst the relevant Event of Default is outstanding) that the occurrence or subsistence of that Event of Default has an adverse effect or is reasonably likely to have an adverse effect on: 

  

	 	(i)	the ability of any Obligor other than the relevant Non-Core Subsidiary to perform any of its payment obligations under any of the Finance Documents (taking into account resources
available to it without breaching the terms of the Agreement from other members of the Group); 

  

	 	(ii)	the ability of the Company to comply with its obligation under Clause 18 (Financial Covenants); 

  

	 	(iii)	the assets, prospects or financial condition of the Group taken as a whole; 

  

	 	(iv)	any right or remedy of a Finance Party in respect of the Finance Document; or 

  

	 	(v)	the validity or enforceability of, or effectiveness or ranking of any security granted or purported to be granted pursuant to, any Finance Document. 

  

	21.	SECURITY 

  

	21.1	Security Agent as holder of security 

  
 Unless expressly provided to the contrary in any Finance Document, the Security Agent holds any security created by a Security Document on trust for the
Finance Parties. 
  

	21.2	Responsibility 

  

	(a)	Except as otherwise provided in a Finance Document, the Security Agent is not liable or responsible to any other Finance Party for: 

  

	 	(i)	any failure in perfecting or protecting the security created by any Security Document; or 

  

 75 

	 	(ii)	any other action taken or not taken by it in connection with a Security Document. 

  

	(b)	Except as otherwise provided in a Finance Document, no Agent is responsible for: 

  

	 	(i)	the right or title of any person in or to, or the value of, or sufficiency of any part of the security created by the Security Documents; 

  

	 	(ii)	the priority of any security created by the Security Documents; or 

  

	 	(iii)	the existence of any other Security Interest affecting any asset secured under a Security Document. 

  

	21.3	Title 

  

	(a)	The Security Agent may accept, without enquiry, the title (if any) an Obligor may have to any asset over which security is intended to be created by any Security Document.

  

	(b)	The Security Agent has no obligation to insure any such asset or the interests of the Finance Parties in any such asset. 

  

	21.4	Possession of documents 

  
 The Security Agent is not obliged to hold in its own possession any Security Document, title deed or other document in connection with any asset over
which security is intended to be created by a Security Document. Without prejudice to the above, the Security Agent may allow any bank providing safe custody services or any professional adviser to the Security Agent to retain any of those documents
in its possession. 
  

	21.5	Investments 

  
 Except as otherwise provided in any Security Document and in Clause 7.7 above, all moneys received by the Security Agent under the Finance Documents may
be: 
  

	 	(a)	invested in the name of, or under the control of, the Security Agent in any investment for the time being authorised by English law for the investment by trustees of trust money or
in any other investments which may be selected by the Security Agent with the consent of the Majority Lenders; or 

  

	 	(b)	placed on deposit in the name of, or under the control of, the Security Agent at such bank or institution (including any Finance Party) and upon such terms as the Security Agent may
agree. 

  

	21.6	Approval 

  
 Each Finance Party: 
  

	 	(a)	confirms its approval of each Security Document; and 

  

	 	(b)	authorises and directs the Security Agent (by itself or by such person(s) as it may nominate) to execute and enforce the same as trustee (or agent) or as otherwise provided (and
whether or not expressly in the names of the Finance Parties) on its behalf. 

  

 76 

	21.7	Conflict with Security Documents 

  
 If there is any conflict between the provisions of this Agreement and any Security Document with regard to instructions to or other matters affecting the
Security Agent, this Agreement will prevail. 
  

	21.8	Release of security 

  

	(a)	If a disposal to a person or persons outside the Group of any asset owned by an Obligor over which security has been created by the Security Documents is: 

 

	 	(i)	allowed by the terms of Clause 19.6 (Disposals); or 

  

	 	(ii)	being effected at the request of the Majority Lenders in circumstances where any of the security created by the Security Documents has become enforceable; or

  

	 	(iii)	being effected by enforcement of the Security Documents, 

  
 the Security Agent is irrevocably authorised to execute on behalf of each Finance Party and each Obligor (and at the cost of the relevant Obligor) the
releases referred to in paragraph (b) below. 
  

	(b)	The releases referred to in paragraph (a) above are: 

  

	 	(i)	any release of the security created by the Security Documents over that asset; and 

  

	 	(ii)	if that asset comprises all of the shares in the capital of any Obligor (or any Holding Company of an Obligor) held by members of the Group, a release of that Obligor and its
Subsidiaries from all present and future liabilities (both actual and contingent and including any liability to any other Obligor under the Finance Documents by way of contribution or indemnity) in its capacity as a Guarantor (but not as the
Borrower) under the Finance Documents and a release of all Security Interests granted by that Obligor and its Subsidiaries under the Security Documents. 

  

	(c)          (i)	In the case of subparagraph (a)(i) above, the Net Proceeds of the disposal must be applied in accordance with Clause 7 (Prepayment and cancellation). 

  

	 	(ii)	In the case of subparagraphs (a)(ii) and (iii) above, the Net Proceeds of the disposal must be applied in accordance with Clause 14.7 (Partial payments).

  

	(d)	If the Security Agent is satisfied that a release is allowed under this Subclause, each Finance Party must execute (at the cost of the relevant Obligor) any document which is
reasonably required to achieve that release. Each other Finance Party irrevocably authorises the Security Agent to execute any such document. Any release will not affect the obligations of any other Obligor under the Finance Documents.

  

	21.9	Certificate of non-crystallisation 

  
 The Security Agent may, at the cost and request of the Company, issue certificates of non-crystallisation. 
  

	21.10	Co-security agent 

  

	(a)	The Security Agent may appoint a co-security agent in any jurisdiction outside Hong Kong: 

  

	 	(i)	if the Security Agent considers that without the appointment the interests of the Finance Parties under the Finance Documents might be materially and adversely affected;

  

 77 

	 	(ii)	for the purpose of complying with any law, regulation or other condition in any jurisdiction; or 

  

	 	(iii)	for the purpose of obtaining or enforcing a judgment or enforcing any Finance Document in any jurisdiction. 

  

	(b)	Any appointment under this Subclause will only be effective if the separate security agent or co-security agent confirms to the Security Agent and the Company in form and substance
satisfactory to the Security Agent that it is bound by the terms of this Agreement as if it were the Security Agent. 

  

	(c)	The Security Agent may remove any separate security agent or co-security agent appointed by it and may appoint a new co-security agent in its place. 

  

	(d)	The Company must pay to the Security Agent any reasonable remuneration paid by the Security Agent to any separate security agent or co-security agent appointed by it, together with
any related reasonable costs and expenses properly incurred by the separate security agent or co-security agent. 

  

	21.11	Perpetuity period 

  
 The perpetuity period for the trusts in this Agreement is 80 years. 
  

	21.12	Information 

  
 Each Lender must supply the Security Agent with any information that the Security Agent may reasonably specify as being necessary or desirable to enable
it to perform its functions under this Clause. 
  

	21.13	Perfection of security 

  
 An Obligor must (at its own cost) take any action and execute any document which is required by the Security Agent so that a Security Document provides
for effective and perfected security in favour of any successor Security Agent. 
  

	22.	THE AGENTS 

  

	22.1	Appointment and duties of the Agents 

  

	(a)	Each Finance Party (other than such Agent) irrevocably appoints each Agent to act as its agent under and in connection with the Finance Documents. 

  

	(b)	Each Finance Party irrevocably authorises each Agent to: 

  

	 	(i)	perform the duties and to exercise the rights, powers and discretions that are specifically given to it under the Finance Documents, together with any other incidental rights,
powers and discretions; and 

  

	 	(ii)	execute each Finance Document expressed to be executed by the relevant Agent on its behalf. 

  

	(c)	Each Agent has only those duties which are expressly specified in the Finance Documents. Those duties are solely of a mechanical and administrative nature. 

 

	22.2	No fiduciary duties 

  
 Except as specifically provided in a Finance Document: 
  

	 	(a)	nothing in the Finance Documents makes an Agent a trustee or fiduciary for any other Party or any other person; and 

  

 78 

	 	(b)	no Agent need hold in trust any moneys paid to or recovered by it for a Party in connection with the Finance Documents or be liable to account for interest on those moneys.

  

	22.3	Individual position of an Agent 

  

	(a)	If it is also a Lender, each Agent has the same rights and powers under the Finance Documents as any other Lender and may exercise those rights and powers as though it were not an
Agent. 

  

	(b)	Each Agent may: 

  

	 	(i)	carry on any business with any Obligor or its related entities (including acting as an agent or a trustee for any other financing); and 

  

	 	(ii)	retain any profits or remuneration it receives under the Finance Documents or in relation to any other business it carries on with any Obligor or its related entities.

  

	22.4	Reliance 

  
 Each Agent may: 
  

	 	(a)	rely on any notice or document believed by it to be genuine and correct and to have been signed by, or with the authority of, the proper person; 

  

	 	(b)	rely on any statement made by any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify; 

  

	 	(c)	assume, unless the context otherwise requires, that any communication made by an Obligor is made on behalf of and with the consent and knowledge of all the Obligors;

  

	 	(d)	engage, pay for and rely on professional advisers selected by it (including those representing a Party other than that Agent); and 

  

	 	(e)	act under the Finance Documents through its personnel and agents. 

  

	22.5	Majority Lenders’ instructions 

  

	(a)	Each Agent is fully protected if it acts on the instructions of the Majority Lenders in the exercise of any right, power or discretion or any matter not expressly provided for in
the Finance Documents. Any such instructions given by the Majority Lenders will be binding on all the Lenders. In the absence of instructions, each Agent may act or refrain from acting as it considers to be in the best interests of all the Lenders.

  

	(b)	Each Agent may assume that, unless it has received notice to the contrary, any right, power, authority or discretion vested in any Party or the Majority Lenders has not been
exercised. 

  

	(c)	Each Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received security satisfactory to it,
whether by way of payment in advance or otherwise, against any liability or loss which it may incur in complying with the instructions. 

  

 79 

	(d)	Neither Agent is authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings in connection with any Finance
Document, unless the legal or arbitration proceedings relate to: 

  

	 	(i)	the perfection, preservation or protection of rights under the Security Documents; or 

  

	 	(ii)	the enforcement of any Security Document. 

  

	(e)	An Agent may require the receipt of security satisfactory to it, whether by way of payment in advance or otherwise, against any liability or loss which it may incur in complying
with the instructions of the Majority Lenders. 

  

	22.6	Responsibility 

  

	(a)	No Agent is responsible to any other Finance Party for the legality, validity, effectiveness, enforceability, adequacy, accuracy, completeness or performance of:

  

	 	(i)	any Finance Document or any other document; 

  

	 	(ii)	any statement or information (whether written or oral) made in or supplied in connection with any Finance Document; or 

  

	 	(iii)	any observance by any Obligor of its obligations under any Finance Document or any other document. 

  

	(b)	Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms that it:

  

	 	(i)	has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and
affairs of each Obligor and its related entities and the nature and extent of any recourse against any Party or its assets); and 

  

	 	(ii)	has not relied exclusively on any information provided to it by any Agent in connection with any Finance Document or agreement entered into in anticipation of or in connection with
any Finance Document. 

  

	22.7	Exclusion of liability 

  

	(a)	Neither Agent is liable or responsible to any other Finance Party for any action taken or not taken by it in connection with any Finance Document, unless directly caused by its
gross negligence or wilful misconduct. 

  

	(b)	No Party (other than the relevant Agent) may take any proceedings against any of the officers of an Agent in respect of any claim it might have against that Agent or in respect of
any act or omission of any kind by that officer in connection with any Finance Document. Any officer of an Agent may rely on this Subclause and enforce its terms under the Contracts (Rights of Third Parties) Act 1999. 

  

	(c)	Neither Agent is liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by that Agent if that
Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by that Agent for that purpose. 

  

 80 

	

					
	(d)	  	(i)	    	Nothing in this Agreement will oblige any Agent to satisfy any know your customer requirement in relation to the identity of any person on behalf of any Finance Party.

  

	 	(ii)	Each Finance Party confirms to each Agent that it is solely responsible for any know your customer requirements it is required to carry out and that it may not rely on any statement
in relation to those requirements made by any other person. 

  

	22.8	Default 

  

	(a)	Neither Agent is obliged to monitor or enquire whether a Default has occurred. Neither Agent is deemed to have knowledge of the occurrence of a Default. 

  

	(b)	If the Facility Agent: 

  

	 	(i)	receives notice from a Party referring to this Agreement, describing a Default and stating that the event is a Default; or 

  

	 	(ii)	is aware of the non-payment of any principal, interest or fee payable to a Lender under any Finance Document, 

  
 it must promptly notify the Lenders. 
  

	22.9	Information 

  

	(a)	Each Agent must promptly forward to the person concerned the original or a copy of any document which is delivered to that Agent by a Party for that person.

  

	(b)	Except where a Finance Document specifically provides otherwise, neither Agent is obliged to review or check the adequacy, accuracy or completeness of any document it forwards to
another Party. 

  

	(c)	Except as provided above, neither Agent has any duty: 

  

	 	(i)	either initially or on a continuing basis to provide any Lender with any credit or other information concerning the risks arising under or in connection with the Finance Documents
(including any information relating to the financial condition or affairs of any Obligor or its related entities or the nature or extent of recourse against any Party or its assets) whether coming into its possession before, on or after the date of
this Agreement; or 

  

	 	(ii)	unless specifically requested to do so by a Lender in accordance with a Finance Document, to request any certificate or other document from any Obligor. 

  

	(d)	In acting as an Agent, that Agent will be treated as acting through its agency division which will be treated as a separate entity from its other divisions and departments. Any
information received or acquired by an Agent which, in its opinion, is received or acquired by another division or department or otherwise than in its capacity as an Agent may be treated as confidential by that Agent and will not be treated as
information possessed by that Agent in its capacity as such. 

  

	(e)	Neither Agent is obliged to disclose to any person any confidential information supplied to it by or on behalf of a member of the Group solely for the purpose of evaluating whether
any waiver or amendment is required in respect of any term of the Finance Documents. 

  

	(f)	Each Obligor irrevocably authorises each Agent to disclose to the other Finance Parties any information which, in that Agent’s opinion, is received by it in its capacity as an
Agent. 

  

 81 

	22.10	Indemnities 

  

	(a)	Without limiting the liability of any Obligor under the Finance Documents, each Lender must indemnify each Agent for that Lender’s proportion of any loss or liability incurred
by that Agent in acting as an Agent, except to the extent that the loss or liability is caused by that Agent’s gross negligence or wilful misconduct, provided that this indemnity shall not apply to the costs of the Agent’s management time
and internal resources. 

  

	(b)	A Lender’s proportion of the liability or loss set out in paragraph (a) above is the proportion which its participation in the Loans and undrawn Commitments (if any) bear
to all the Loans on the date of the demand. If, however, there are no Loans outstanding on the date of demand, then the proportion will be the proportion which its aggregate Commitments bear to the Total Commitments at the date of demand or, if the
Total Commitments have been cancelled, bore to the Total Commitments immediately before being cancelled. 

  

	(c)	If a Party owes an amount to an Agent under the Finance Documents, that Agent may after giving notice to that Party: 

  

	 	(i)	deduct from any amount received by it for that Party any amount due to that Agent from that Party under a Finance Document but unpaid; and 

  

	 	(ii)	apply that amount in or towards satisfaction of the owed amount. 

  
 That Party will be regarded as having received the amount so deducted. 
  

	22.11	Compliance 

  
 Each Agent may refrain from doing anything (including disclosing any information) which might, in its opinion, constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person, and may do anything which, in its opinion, is necessary or desirable to comply with any law or regulation. 
  

	22.12	Resignation 

  

	(a)	An Agent may resign and appoint any of its Affiliates as its successor Agent by giving notice to the other Finance Parties and the Company. 

  

	(b)	Alternatively, an Agent may resign by giving notice to the Finance Parties and the Company, in which case the Majority Lenders may appoint a successor Agent to it.

  

	(c)	If no successor Agent has been appointed under paragraph (b) above within 60 days after notice of resignation was given, the retiring Agent may appoint a successor Agent to it.

  

	(d)	The person(s) appointing a successor Agent must, if practicable, consult with the Company prior to the appointment. 

  

	(e)	The resignation of a Security Agent and the appointment of a successor Security Agent will not become effective until the Facility Agent confirms that it is satisfied that the
Security Documents (and any related documentation) have been transferred to or into (and where required registered in) the name of the proposed successor Security Agent. 

  

	(f)	On satisfying the above conditions, the successor Agent will succeed to the position of the retiring Agent and the term Facility Agent or Security Agent (as applicable) will mean
the successor Agent. 

  

 82 

	(g)	The retiring Agent must, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request
for the purposes of performing its functions as Agent under the Finance Documents. 

  

	(h)	Upon its resignation becoming effective, this Clause will continue to benefit a retiring Agent in respect of any action taken or not taken by it in connection with the Finance
Documents while it was an Agent, and, subject to paragraph (g) above, it will have no further obligations under any Finance Document. 

  

	(i)	The Majority Lenders may, by notice to any Agent, require it to resign under paragraph (b) above. 

  

	(j)	An Obligor must (at its own cost) take any action and execute any document which is required by the Security Agent so that a Security Document provides for effective and perfected
security in favour of any successor Security Agent. 

  

	22.13	Relationship with Lenders 

  

	(a)	Each Agent may treat each Lender as a Lender, entitled to payments under this Agreement and as acting through its Facility Office(s) until it has received not less than five
Business Days’ prior notice from that Lender to the contrary. 

  

	(b)	The Facility Agent may at any time, and must if requested to do so by the Majority Lenders, convene a meeting of the Lenders. 

  

	(c)	The Facility Agent must keep a record of all the Parties and supply any other Party with a copy of the record on request. The record will include each Lender’s Facility
Office(s) and contact details for the purposes of this Agreement. 

  

	22.14	Agent’s management time 

  
 Subject to Subclause 22.10(a), if an Agent requires, any amount payable to that Agent under any indemnity or otherwise in respect of any reasonable costs
or expenses incurred by that Agent under the Finance Documents after the date of this Agreement may include the reasonable cost of using its management time or other internal resources and will be calculated on the basis of such reasonable daily or
hourly rates as that Agent may notify to the relevant Party. This is in addition to any amount in respect of fees, costs or expenses paid or payable to that Agent under any other term of the Finance Documents. 
  

	22.15	Notice period 

  
 Where this Agreement specifies a minimum period of notice to be given to the Facility Agent, the Facility Agent may, at its discretion, accept a shorter
notice period. 
  

	23.	EVIDENCE AND CALCULATIONS 

  

	23.1	Accounts 

  
 Accounts maintained by a Finance Party in connection with this Agreement are prima facie evidence of the matters to which they relate for the purpose of
any litigation or arbitration proceedings. 
  

 83 

	23.2	Certificates and determinations 

  
 Any certification or determination by a Finance Party of a rate or amount under the Finance Documents will be, in the absence of manifest error,
conclusive evidence of the matters to which it relates. 
  

	23.3	Calculations 

  
 Any interest or fee accruing under this Agreement accrues from day to day and is calculated on the basis of the actual number of days elapsed and a year
of 360 or 365 days or otherwise, depending on what the Facility Agent determines is market practice. 
  

	24.	FEES 

  

	24.1	Agents’ fees 

  
 The Company must pay (or ensure that there is paid) to each Agent for its own account an agency fee in the amount and in the manner agreed in the Fee
Letter between that Agent and the Company. 
  

	24.2	Arrangement fee 

  
 The Company must pay (or ensure that there is paid) an arrangement fee of USD180,000 on the date of this Agreement to be shared among the Lenders in
accordance with their Pro-rata Share. 
  

	24.3	Revolving Credit commitment fee 

  

	(a)	The Company must pay to the Facility Agent for the account of each Lender a commitment fee computed as follows: 

  

	 	(i)	at the rate of 0.375 per cent. (0.375%) per annum for each fiscal quarter or part thereof after the date of this Agreement to the first fiscal quarter which ends on a date
later than twelve months after the date of this Agreement; and 

  

	 	(ii)	thereafter, with effect from the commencement of each fiscal quarter starting after the date of delivery of a Margin Certificate, at the rate determined by reference to the table
below and the information set out in that Margin Certificate 

  

			
	 Leverage Ratio

	  	Commitment Fee

	 	  	(per cent. per annum)
	 Less than 2.00
	  	0.300%
	 2.00 or greater and less than 2.50
	  	0.350%
	 2.50 or greater and less than 3.00
	  	0.400%
	 3.00 or greater
	  	0.450%

  

	  	on the undrawn, uncancelled amount of each Lender’s Revolving Credit Commitments. 

  

	(b)	For so long as the Company is in default of its obligation under this Agreement to provide a Margin Certificate the applicable Commitment Fee will be 0.450%.

  

	(c)	Any commitment fee is payable quarterly in arrears and is also payable to the Facility Agent for a Lender on the date its Revolving Credit Commitments are cancelled in full.

  

 84 

	25.	INDEMNITIES AND BREAK COSTS 

  

	25.1	Currency indemnity 

  

	(a)	The Company must, as an independent obligation, indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of:

  

	 	(i)	that Finance Party receiving an amount in respect of an Obligor’s liability under the Finance Documents; or 

  

	 	(ii)	that liability being converted into a claim, proof, judgment or order, 

  
 in a currency other than the currency in which the amount is expressed to be payable under the relevant Finance Document. 
  

	(b)	Unless otherwise required by law, each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which
it is expressed to be payable. 

  

	25.2	Acquisition indemnity 

  
 The Company agrees to indemnify each Finance Party against any loss or liability incurred by that Finance Party in connection with or arising out of the
Acquisition or the funding of the Acquisition (including any incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning the Acquisition), unless that loss or liability is caused by the
gross negligence or wilful misconduct of that Finance Party. 
  

	25.3	Other indemnities 

  

	(a)	The Company must indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of: 

  

	 	(i)	the occurrence of any Default; 

  

	 	(ii)	any failure by an Obligor to pay any amount due under a Finance Document on its due date, including any resulting from any distribution or redistribution of any amount among the
Lenders under this Agreement; 

  

	 	(iii)	(other than by reason of gross negligence or wilful default by that Finance Party) a Loan not being made after a Request has been delivered for that Loan; or

  

	 	(iv)	a Loan (or part of a Loan) not being prepaid in accordance with this Agreement. 

  

	 	(v)	The Company’s liability in each case includes any loss or expense on account of funds borrowed, contracted for or utilised to fund any amount payable under any Finance
Document, any amount repaid or prepaid or any Loan. 

  

	(b)	The Company must indemnify the Facility Agent against any loss or liability incurred by the Facility Agent as a result of: 

  

	 	(i)	investigating any event which the Facility Agent reasonably believes to be a Default; or 

  

	 	(ii)	acting or relying on any notice which the Facility Agent reasonably believes to be genuine, correct and appropriately authorised. 

  

 85 

	25.4	Break Costs 

  

	(a)	The Borrower must pay to each Lender its Break Costs if a Loan or overdue amount is repaid or prepaid otherwise than on the last day of any Term applicable to it.

  

	(b)	Break Costs are the amount (if any) determined by the relevant Lender by which: 

  

	 	(i)	the interest which that Lender would have received for the period from the date of receipt of any part of its share in a Loan or an overdue amount to the last day of the applicable
Term for that Loan or overdue amount if the principal or overdue amount received had been paid on the last day of that Term; 

  
 exceeds 
  

	 	(ii)	the amount which that Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a
period starting on the second Business Day following receipt and ending on the last day of the applicable Term. 

  

	(c)	Each Lender must supply to the Facility Agent for the Borrower details of the amount of any Break Costs claimed by it under this Subclause. 

  

	26.	EXPENSES 

  

	26.1	Initial costs 

  
 The Company must pay to each Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it or any of its Affiliates in
connection with due diligence visits, the negotiation, preparation, printing, entry into and perfection of the Finance Documents and other documents contemplated by the Finance Documents, to the extent that such costs and expenses are not paid by
the Seller. 
  

	26.2	Subsequent costs 

  
 The Company must pay to each Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it or any of its Affiliates in
connection with: 
  

	 	(a)	the negotiation, preparation, printing, entry into and perfection of any Finance Document and other documents contemplated by the Finance Documents executed after the date of this
Agreement; 

  

	 	(b)	any amendment, waiver or consent made or granted in connection with the Finance Documents; and 

  

	 	(c)	any other matter not of an ordinary administrative nature arising out of or in connection with any Finance Document. 

  

	26.3	Enforcement costs 

  
 The Company must pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement
of, or the preservation of any rights under, any Finance Document. 
  

 86 

	26.4	Security Agent’s on-going costs 

  

	(a)	If: 

  

	 	(i)	a Default occurs; 

  

	 	(ii)	the Security Agent considers it necessary or expedient; or 

  

	 	(iii)	the Security Agent is requested by an Obligor or the Majority Lenders to undertake duties which the Security Agent and the Company agree to be of an exceptional nature or outside
the scope of the normal duties of the Security Agent under the Security Documents, 

  
 the Company must pay to the Security Agent any additional remuneration which may be agreed between them. 
  

	(b)	If the Security Agent and the Company fail to agree: 

  

	 	(i)	whether the duties are of an exceptional nature or outside the scope of the normal duties of the Security Agent; or 

  

	 	(ii)	the appropriate amount of any additional remuneration, 

  

	 	(iii)	the dispute will be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Company.

  

	(c)	If the Company does not approve the investment bank selected by the Security Agent, the dispute will be determined by an investment bank nominated (on application by the Security
Agent) by the President for the time being of the Law Society of England and Wales. 

  

	(d)	The Company must pay the costs of nomination and of the investment bank. 

  

	(e)	The determination of any investment bank will be final and binding on the Parties. 

  

	27.	AMENDMENTS AND WAIVERS 

  

	27.1	Procedure 

  

	(a)	Except as provided in this Clause, any term of the Finance Documents may be amended or waived with the agreement of the Company and the Majority Lenders. The Facility Agent may
effect, on behalf of any Finance Party, an amendment or waiver allowed under this Clause. 

  

	(b)	The Facility Agent must promptly notify the other Parties of any amendment or waiver effected by it under paragraph (a) above. Any such amendment or waiver is binding on all
the Parties. 

  

	(c)	Each Obligor agrees to any amendment or waiver allowed by this Clause which is agreed to by the Company. This includes any amendment or waiver which would, but for this paragraph,
require the consent of each Guarantor if the guarantee under the Finance Documents is to remain in full force and effect. 

  

	27.2	Exceptions 

  

	(a)	An amendment or waiver which relates to: 

  

	 	(i)	the definition of Majority Lenders in Clause 1.1 (Definitions); 

  

 87 

	 	(ii)	an extension of the date of payment of any amount to a Lender under the Finance Documents other than under Clauses 7.4 (Mandatory prepayment - disposals) or 7.5 (Mandatory
prepayment - Excess Cashflow); 

  

	 	(iii)	a reduction in the Margin or a reduction in the amount of or change in the currency of any payment of principal, interest, fee or other amount payable to a Lender under the Finance
Documents other than under Clauses 7.4 (Mandatory prepayment - disposals) or 7.5 (Mandatory prepayment - Excess Cashflow)); 

  

	 	(iv)	an increase in, or an extension of, a Commitment or the Total Commitments; 

  

	 	(v)	a release of an Obligor other than in accordance with the terms of this Agreement or a Subordination Agreement; 

  

	 	(vi)	a release of any Security Document other than in accordance with the terms of this Agreement and a Subordination Agreement; 

  

	 	(vii)	a term of a Finance Document which expressly requires the consent of each Lender; 

  

	 	(viii)	the right of a Lender to assign or transfer its rights or obligations under the Finance Documents; 

  

	 	(ix)	the ranking or subordination provided for in a Subordination Agreement; or 

  

	 	(x)	this Clause, 

  
 may only be made with the consent of all the Lenders. 
  

	(b)	An amendment or waiver which relates to the rights or obligations of an Agent may only be made with the consent of that Agent. 

  

	(c)	A Fee Letter may be amended or waived with the agreement of the Agent that is a party to that Fee Letter and the Company. 

  

	27.3	Change of currency 

  
 If a change in any currency of a country occurs (including where there is more than one currency or currency unit recognised at the same time as the
lawful currency of a country), the Finance Documents will be amended to the extent the Facility Agent (acting reasonably and after consultation with the Company) determines is necessary to reflect the change. 
  

	27.4	Waivers and remedies cumulative 

  
 The rights of each Finance Party under the Finance Documents: 
  

	 	(a)	may be exercised as often as necessary; 

  

	 	(b)	are cumulative and not exclusive of its rights under the general law; and 

  

	 	(c)	may be waived only in writing and specifically. 

  
 Delay in exercising or non-exercise of any right is not a waiver of that right. 
  

 88 

	28.	CHANGES TO THE PARTIES 

  

	28.1	Assignments and transfers by Obligors 

  
 No Obligor may assign or transfer any of its rights and obligations under the Finance Documents without the prior consent of all the Lenders. 

 

	28.2	Assignments and transfers by Lenders 

  

	(a)	A Lender (the Existing Lender) may, subject to the following provisions of this Subclause, at any time assign or transfer (including by way of novation) any of its rights and
obligations under this Agreement to any other bank or financial institution or to a trust or fund or other person which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial
assets (the New Lender) provided that it shall at the same time assign or transfer to the New Lender a proportionate share of its rights and obligations (in its capacity as Lender) under or in connection with the other Finance Documents.

  

	(b)	The Facility Agent is not obliged to execute a Transfer Certificate or otherwise give effect to an assignment or transfer until it has completed all know your customer requirements
to its satisfaction. The Facility Agent must promptly notify the Existing Lender and the New Lender if there are any such requirements. 

  

	(c)	A transfer of obligations will be effective only if the obligations are novated in accordance with the provisions of Subclause 28.3. 

  

	(d)	Unless the Facility Agent otherwise agrees, the New Lender must pay to the Facility Agent for its own account, on or before the date any assignment or transfer occurs, a fee of
USD1,000. 

  

	(e)	Any reference in this Agreement to a Lender includes a New Lender but excludes a Lender if no amount is or may be owed to or by it under this Agreement. 

  

	(f)	Notwithstanding any other provisions of this Clause, a Lender may sub-participate or sub-contract all or any part of its obligations under this Agreement. 

 

	28.3	Procedure for transfer by novation 

  

	(a)	In this Clause: 

  
 Transfer Date means, for a Transfer Certificate, the later of: 
  

	 	(i)	the proposed Transfer Date specified in that Transfer Certificate; and 

  

	 	(ii)	the date on which the Facility Agent executes that Transfer Certificate. 

  

	(b)	A novation is effected if: 

  

	 	(i)	the Existing Lender and the New Lender deliver to the Facility Agent a duly completed Transfer Certificate; and 

  

	 	(ii)	the Facility Agent executes it. 

  
 The Facility Agent must execute as soon as reasonably practicable a Transfer Certificate delivered to it and which appears on its face to be in order.

  

 89 

	(c)	Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Facility Agent to execute any duly completed Transfer Certificate on its behalf.

  

	(d)	On the Transfer Date: 

  

	 	(i)	the New Lender will assume the rights and obligations of the Existing Lender expressed to be the subject of the novation in the Transfer Certificate in substitution for the Existing
Lender; 

  

	 	(ii)	the Existing Lender will be released from those obligations and cease to have those rights; and 

  

	 	(iii)	the New Lender will become a party to this Agreement as a Lender. 

  

	(e)	The Facility Agent must, as soon as reasonably practicable after it has executed a Transfer Certificate, send a copy of that Transfer Certificate to the Company.

  

	28.4	Limitation of responsibility of Existing Lender 

  

	(a)	Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for: 

  

	 	(i)	the financial condition of any Obligor; 

  

	 	(ii)	the legality, validity, effectiveness, enforceability, adequacy, accuracy, completeness or performance of: 

  

	 	(A)	any Finance Document or any other document; 

  

	 	(B)	any statement or information (whether written or oral) made in or supplied in connection with any Finance Document; or 

  

	 	(C)	any observance by any Obligor of its obligations under any Finance Document or any other document, 

  
 and any representations or warranties implied by law are excluded. 
  

	(b)	Each New Lender confirms to the Existing Lender and the other Finance Parties that it: 

  

	 	(i)	has made, and will continue to make, its own independent appraisal of all risks arising under or in connection with the Finance Documents (including the financial condition and
affairs of each Obligor and its related entities and the nature and extent of any recourse against any Party or its assets) in connection with its participation in this Agreement; 

  

	 	(ii)	has not relied exclusively on any information supplied to it by the Existing Lender in connection with any Finance Document; and 

  

	 	(iii)	is a person whose ordinary business includes participation in syndicated facilities of this type. 

  

	(c)	Nothing in any Finance Document requires an Existing Lender to: 

  

	 	(i)	accept a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause; or 

  

 90 

	 	(ii)	support any losses incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under any Finance Document or otherwise. 

 

	28.5	Costs resulting from change of Lender or Facility Office 

  
 If: 
  

	 	(a)	a Lender assigns or transfers any of its rights and obligations under the Finance Documents or changes its Facility Office; and 

  

	 	(b)	as a result of circumstances existing at the date the assignment, transfer or change occurs and as a result of the assignment, transfer or change, an Obligor would be or become
obliged to pay a Tax Payment or an Increased Cost, 

  
 then, unless the assignment, transfer or change is made by a Lender in order to mitigate any circumstances giving rise to the Tax Payment, Increased Cost or a right to be prepaid and/or cancelled by reason of illegality, the Obligor need
only pay that Tax Payment or Increased Cost to the same extent that it would have been obliged to if no assignment, transfer or change had occurred. 
  

	28.6	Additional Guarantors 

  

	(a)	If the accession of an Additional Guarantor requires any Finance Party to carry out know your customer requirements in circumstances where the necessary information is not already
available to it, the Company must promptly on request by any Finance Party supply to that Finance Party any documentation or other evidence which is reasonably requested by that Finance Party (whether for itself, on behalf of any Finance Party or
any prospective new Lender) to enable a Finance Party or prospective new Lender to carry out and be satisfied with the results of all applicable know your customer requirements. 

  

	(b)	The Company must ensure that any person required under this Agreement to become a Guarantor supplies to the Facility Agent all of the documents and evidence set out in Part 3
(Additional Guarantor) of Schedule 2 (Conditions precedent documents) in form and substance satisfactory to it. 

  

	(c)	The relevant Subsidiary will become an Additional Guarantor on the date of the Accession Agreement executed by it. 

  

	(d)	The Company must comply with its obligations under Clause 19.29(b) (Guarantees) within 14 days of the relevant person becoming a Subsidiary or, if Clause 19.29(c) (Guarantees)
applies, it ceasing to be unlawful or result in personal liability for the relevant person’s directors or other management for that person to become a Guarantor. 

  

	(e)	Delivery of an Accession Agreement, executed by the relevant Subsidiary and the Company, to the Facility Agent constitutes confirmation by that Subsidiary and the Company that the
Repeating Representations are then correct. 

  

	(f)	Each member of the Group must promptly give the Facility Agent all assistance it reasonably requires in relation to the guarantees and security to be granted pursuant to this
Agreement including promptly answering all reasonable questions and requisitions of the Facility Agent and its advisors in relation to the assets of the Group. 

  

 91 

	28.7	Changes to the Reference Banks 

  
 If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Facility Agent must (in
consultation with the Company) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank. 
  

	28.8	Affiliates of Lenders 

  

	(a)	Each Lender may fulfil its obligations in respect of any Loan through an Affiliate if: 

  

	 	(i)	the relevant Affiliate is specified in this Agreement as a Lender or becomes a Lender by means of a Transfer Certificate in accordance with this Agreement; and

  

	 	(ii)	the Loan in which that Affiliate will participate are specified in this Agreement or in a notice given by that Lender to the Facility Agent and the Company.

  
 In this event, the Lender and the Affiliate
will participate in that Loan in the manner provided for in subparagraph (ii) above. 
  

	(b)	If paragraph (a) applies, the Lender and its Affiliate will be treated as having a single Commitment and a single vote, but, for all other purposes, will be treated as separate
Lenders. 

  

	29.	DISCLOSURE OF CONFIDENTIAL INFORMATION 

  

	(a)	Each Lender acknowledges that members of the Group are indirect subsidiaries of a publicly-traded company and that it will be receiving (and has the right hereunder to receive)
material non-public information the confidentiality of which must be maintained. Accordingly, each Lender agrees to maintain the confidentiality of the Confidential Information (as defined below), except that Confidential Information may be
disclosed: 

  

	 	(i)	on a “need-to-know” basis only, to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, advisors and other representatives (it
being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and instructed to keep such Confidential Information confidential), 

  

	 	(ii)	to the extent requested by any regulatory authority purporting to have jurisdiction over it, 

  

	 	(iii)	to the extent required by any governmental rule or by any subpoena or similar legal process, 

  

	 	(iv)	to any other party hereto, 

  

	 	(v)	in connection with the exercise of any remedies under any Finance Document or any action or proceeding relating to any Finance Document or the enforcement of rights thereunder,

  

	 	(vi)	subject to an agreement containing provisions substantially the same as those of this Clause 29, to any assignee of or participant in, or any prospective assignee of or
participant in, any of its rights or obligations under this Agreement, 

  

	 	(vii)	with the consent of the Borrower, or 

  

	 	(viii)	to the extent such Confidential Information, 

  

	 	(A)	becomes publicly available other than as a result of a breach of this Clause 29 or 

  

 92 

	 	(B)	becomes available to Lender or its respective Affiliates on a non-confidential basis from a source other than an Obligor. 

  

	(b)	For purposes of this Clause 29, Confidential Information means all information received from any member of the Merix Group, other than any such information that is
available on a non-confidential basis prior to disclosure by a member of the Merix Group. 

  

	(c)	This Clause supersedes any previous confidentiality undertaking given by a Finance Party in connection with this Agreement prior to it becoming a Party. 

  

	30.	SET-OFF 

  
 A Finance Party may set off any matured obligation owed to it by an Obligor under the Finance Documents (to the extent beneficially owned by that Finance
Party) against any obligation (whether or not matured) owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party
may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. A Finance Party may also at any time after the occurrence of a Default combine or consolidate accounts held with it by any
Obligor. 
  

	31.	PRO RATA SHARING 

  

	31.1	Redistribution 

  
 If any amount owing by an Obligor under any of the Finance Documents to a Finance Party (the recovering Finance Party) is discharged by payment, set-off
or any other manner other than in accordance with this Agreement (a recovery), then: 
  

	 	(a)	the recovering Finance Party must, within three Business Days, supply details of the recovery to the Facility Agent; 

  

	 	(b)	the Facility Agent must calculate whether the recovery is in excess of the amount which the recovering Finance Party would have received if the recovery had been received by the
Facility Agent under this Agreement; and 

  

	 	(c)	the recovering Finance Party must pay to the Facility Agent an amount equal to the excess (the redistribution). 

  

	31.2	Effect of redistribution 

  

	(a)	The Facility Agent must treat a redistribution as if it were a payment by the relevant Obligor under this Agreement and distribute it among the Finance Parties, other than the
recovering Finance Party, accordingly. 

  

	(b)	When the Facility Agent makes a distribution under paragraph (a) above, the recovering Finance Party will be subrogated to the rights of the Finance Parties which have shared
in that redistribution. 

  

	(c)	If and to the extent that the recovering Finance Party is not able to rely on any rights of subrogation under paragraph (b) above, the relevant Obligor will owe the recovering
Finance Party a debt which is equal to the redistribution, immediately payable and of the type originally discharged. 

  

	(d)	If: 

  

	 	(i)	a recovering Finance Party must subsequently return a recovery, or an amount measured by reference to a recovery, to an Obligor; and 

  

 93 

	 	(ii)	the recovering Finance Party has paid a redistribution in relation to that recovery, 

  
 each Finance Party must reimburse the recovering Finance Party all or the appropriate portion of the redistribution paid to
that Finance Party, together with interest for the period while it held the redistribution. In this event, the subrogation in paragraph (b) above will operate in reverse to the extent of the reimbursement. 
  

	31.3	Exceptions 

  
 Notwithstanding any other term of this Clause, a recovering Finance Party need not pay a redistribution to the extent that: 
  

	 	(a)	it would not, after the payment, have a valid claim against the relevant Obligor in the amount of the redistribution; or 

  

	 	(b)	it would be sharing with another Finance Party any amount which the recovering Finance Party has received or recovered as a result of legal or arbitration proceedings, where:

  

	 	(i)	the recovering Finance Party notified the Facility Agent of those proceedings; and 

  

	 	(ii)	the other Finance Party had an opportunity to participate in those proceedings but did not do so or did not take separate legal or arbitration proceedings as soon as reasonably
practicable after receiving notice of them. 

  

	32.	SEVERABILITY 

  
 If a term of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any jurisdiction in relation to any party to that
Finance Document, that will not affect: 
  

	 	(a)	in respect of such party the legality, validity or enforceability in that jurisdiction of any other term of the Finance Documents; 

  

	 	(b)	in respect of any other party to such Finance Document the legality, validity or enforceability in that jurisdiction of that or any other term of the Finance Documents; or

  

	 	(c)	in respect of any party to such Finance Document the legality, validity or enforceability in other jurisdictions of that or any other term of the Finance Documents.

  

	33.	COUNTERPARTS 

  
 Each Finance Document may be executed in any number of counterparts. This has the same effect as if the signatures on the counterparts were on a single
copy of the Finance Document. 
  

	34.	NOTICES 

  

	34.1	In writing 

  

	(a)	Any communication in connection with a Finance Document must be in writing and, unless otherwise stated, may be given: 

  

	 	(i)	in person, by post or fax; or 

  

 94 

	 	(ii)	to the extent agreed by the Parties, by e-mail or other electronic communication. 

  

	(b)	For the purpose of the Finance Documents, an electronic communication will be treated as being in writing and a document. 

  

	(c)	Unless it is agreed to the contrary, any consent or agreement required under a Finance Document must be given in writing. 

  

	34.2	Contact details 

  

	(a)	Except as provided below, the contact details of each Party for all communications in connection with the Finance Documents are those notified by that Party for this purpose to the
Facility Agent on or before the date it becomes a Party. 

  

	(b)	The contact details of the Borrower for this purpose are: 

  

			
	Address:	 	c/o Merix Corporation
	 	 	1521 Poplar Lane, Forest Grove
	 	 	Oregon, 97116
	 	 	United States of America
	Fax number:	 	+1 503 357 1504
	Attention:	 	Chief Financial Officer
		
	with copies to:	 	Perkins Coie LLP
	 	 	1120 N.W. Couch Street
	 	 	Tenth Floor
	 	 	Portland, Oregon 97209-4128
	 	 	Attention: George K. Fogg
	 	 	Telephone No.: (503) 727-2022
	 	 	Telecopy No.: (503) 346-2022
		
	 	 	Merix Caymans Trading Company Limited
	 	 	2 Chun Yat Street
	 	 	Tseung Kwan O Industrial Estate
	 	 	Tseung Kwan O, Kowloon
	 	 	Hong Kong
	 	 	Attention: Chief Financial Officer

  

	(c)	The contact details of the Company for this purpose are: 

  

			
	Address:	 	c/o Merix Corporation
	 	 	1521 Poplar Lane, Forest Grove
	 	 	Oregon, 97116
	 	 	United States of America
	Fax number:	 	+1 503 357 1504
	Attention:	 	Chief Financial Officer

  
 with a copy to the
Borrower. 
  

	(d)	The contact details of the Facility Agent for this purpose are: 

  

			
	Address:	 	11/F., Standard Chartered Tower
	 	 	388 Kwun Tong Road
	 	 	Kwun Tong, Kowloon
	 	 	Hong Kong
	Fax number:	 	(852) 2810 0180
	E-mail:	 	jacky.cp.chan@hk.standardchartered.com
	Attention:	 	Loans & Agency

  

 95 

	(e)	Any Party may change its contact details by giving five Business Days’ notice to the Facility Agent or (in the case of the Facility Agent) to the other Parties.

  

	(f)	Where a Party nominates a particular department or officer to receive a communication, a communication will not be effective if it fails to specify that department or officer.

  

	34.3	Effectiveness 

  

	(a)	Except as provided below, any communication in connection with a Finance Document will be deemed to be given as follows: 

  

	 	(i)	if delivered in person, at the time of delivery; 

  

	 	(ii)	if posted, five days after being deposited in the post, postage prepaid, in a correctly addressed envelope; 

  

	 	(iii)	if by fax, when received in legible form; 

  

	 	(iv)	if by e-mail or any other electronic communication, when received in legible form; and 

  

	 	(v)	if by posting to an electronic website, at the later of the time of posting or (if the relevant recipient did not at such time have access to such website) the time at which such
recipient is given access or the date on which recipient is notified by sender that such a posting has been made. 

  

	(b)	A communication given under paragraph (a) above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next
working day in that place. 

  

	(c)	A communication to the Facility Agent will only be effective on actual receipt by it. 

  

	34.4	Obligors 

  

	(a)	All communications under the Finance Documents to or from an Obligor must be sent through the Facility Agent. 

  

	(b)	All communications under the Finance Documents to or from an Obligor (other than the Company) must be sent through the Company. 

  

	(c)	Each Obligor (other than the Company) irrevocably appoints the Company to act as its agent: 

  

	 	(i)	to give and receive all communications under the Finance Documents; 

  

	 	(ii)	to supply all information concerning itself to any Finance Party; and 

  

	 	(iii)	to sign all documents under or in connection with the Finance Documents. 

  

 96 

	(d)	Any communication given to the Company in connection with a Finance Document will be deemed to have been given also to the other Obligors. 

  

	(e)	Each Finance Party may assume that any communication made by the Company is made with the consent of each other Obligor. 

  

	34.5	Use of websites 

  

	(a)	Except as provided below, the Company may deliver any information under this Agreement to a Lender by posting it on to an electronic website if: 

  

	 	(i)	the Facility Agent and the Lender agree; 

  

	 	(ii)	the Company and the Facility Agent designate an electronic website for this purpose; 

  

	 	(iii)	the Company notifies the Facility Agent of the address of and password for the website; and 

  

	 	(iv)	the information posted is in a format agreed between the Company and the Facility Agent. 

  
 The Facility Agent must supply each relevant Lender with the address of and password for the website. 
  

	(b)	Notwithstanding the above, the Company must supply to the Facility Agent in paper form a copy of any information posted on the website together with sufficient copies for:

  

	 	(i)	any Lender not agreeing to receive information via the website; and 

  

	 	(ii)	within 10 Business Days of request any other Lender, if that Lender so requests. 

  

	(c)	The Company must, promptly upon becoming aware of its occurrence, notify the Facility Agent if: 

  

	 	(i)	the website cannot be accessed; 

  

	 	(ii)	the website or any information on the website is infected by any electronic virus or similar software; 

  

	 	(iii)	the password for the website is changed; or 

  

	 	(iv)	any information to be supplied under this Agreement is posted on the website or amended after being posted. 

  
 If the circumstances in sub-paragraphs (i) or (ii) above occur,
the Company must supply any information required under this Agreement in paper form until the Facility Agent is satisfied that the circumstances giving rise to the notification are no longer continuing. 
  

	34.6	Personal Liability 

  
 If an individual signs a certificate on behalf of any Party and the certificate proves to be incorrect, the individual will incur no personal liability as
a result, unless the individual acted fraudulently or recklessly in giving the certificate. In this case any liability of the individual will be determined in accordance with applicable law. 
  

	35.	LANGUAGE 

  

	(a)	Any notice given in connection with a Finance Document must be in English. 

  

 97 

	(b)	Any other document provided in connection with a Finance Document must be: 

  

	 	(i)	in English; or 

  

	 	(ii)	(unless the Facility Agent otherwise agrees) accompanied by a certified English translation. In this case, the English translation prevails unless the document is a statutory or
other official document. 

  

	36.	GOVERNING LAW 

  
 This Agreement is governed by English law. 
  

	37.	ENFORCEMENT 

  

	37.1	Jurisdiction 

  

	(a)	The English courts have exclusive jurisdiction to settle any dispute in connection with any Finance Document. 

  

	(b)	The English courts are the most appropriate and convenient courts to settle any such dispute in connection with any Finance Document. Each Obligor agrees not to argue to the
contrary and waives objection to those courts on the grounds of inconvenient forum or otherwise in relation to proceedings in connection with any Finance Document. 

  

	(c)	This Clause is for the benefit of the Finance Parties only. To the extent allowed by law, a Finance Party may take: 

  

	 	(i)	proceedings in any other court; and 

  

	 	(ii)	concurrent proceedings in any number of jurisdictions. 

  

	(d)	References in this Clause to a dispute in connection with a Finance Document include any dispute as to the existence, validity or termination of that Finance Document.

  

	37.2	Service of process 

  

	(a)	Each Obligor not incorporated in England and Wales irrevocably appoints Merix UK Limited as its agent under the Finance Documents for service of process in any proceedings before
the English courts in connection with any Finance Document. 

  

	(b)	If any person appointed as process agent under this Clause is unable for any reason to so act, the Company (on behalf of all the Obligors) must immediately (and in any event within
30 days of such event taking place) appoint another process agent on terms acceptable to the Facility Agent. Failing this, the Facility Agent may appoint another process agent for this purpose. 

  

	(c)	Each Obligor agrees that failure by a process agent to notify it of any process will not invalidate the relevant proceedings. 

  

	(d)	This Subclause does not affect any other method of service allowed by law. 

  

	37.3	Waiver of immunity 

  
 Each Obligor irrevocably and unconditionally: 
  

	 	(a)	agrees not to claim any immunity from proceedings brought by a Finance Party against it in relation to a Finance Document and to ensure that no such claim is made on its behalf;

  

 98 

	 	(b)	consents generally to the giving of any relief or the issue of any process in connection with those proceedings; and 

  

	 	(c)	waives all rights of immunity in respect of it or its assets. 

  
 THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement. 
  

 99 

 SCHEDULE 1 
  

ORIGINAL PARTIES 
  
 PART 1 
  
 ORIGINAL OBLIGORS 
  

			
	 Name of Original Borrower

	 	 Registration number
 (or equivalent, if any)

	 Merix Caymans Trading Company Limited
	 	 CT-152271
  

	 Name of Original Guarantor

	 	 Registration number
 (or equivalent, if any)

	 Merix Caymans Holding Company Limited
	 	CT-153771
		
	 Merix Caymans Trading Company Limited
	 	CT-152271
		
	 Merix Singapore Sales Pte. Ltd.
	 	200510457M
		
	 Merix Manufacturing (Hong Kong) Limited
	 	981407
		
	 Merix UK Limited
	 	5472864

  

 100 

 PART 2 
  
 ORIGINAL LENDERS 
  

							
	 	  	 Name of Original Lenders

	  	Term Loan
Commitments

	  	Revolving Credit
Commitment

	 	  	 	  	(USD)	  	(USD)
	 1.
	  	Banca Nazionale del Lavoro S.p.A., Hong Kong Branch	  	2,166,667	  	433,333
	 2.
	  	CITIC Ka Wah Bank Limited	  	1,500,000	  	300,000
	 3.
	  	Commerz (East Asia) Limited	  	2,166,667	  	433,333
	 4.
	  	DBS Bank Ltd.	  	833,333	  	166,667
	 5.
	  	IKB Deutsche Industriebank AG	  	833,333	  	166,667
	 6.
	  	JPMorgan Chase Bank, N.A.	  	1,666,667	  	333,333
	 7.
	  	KBC Bank N.V.	  	1,500,000	  	300,000
	 8.
	  	Lehman Brothers Commercial Corporation Asia Limited	  	1,666,667	  	333,333
	 9.
	  	Malayan Banking Berhad	  	1,500,000	  	300,000
	 10.
	  	Rabobank International Hong Kong Branch	  	1,666,667	  	333,333
	 11.
	  	Standard Chartered Bank (Hong Kong) Limited	  	2,833,333	  	566,667
	 12.
	  	Sumitomo Mitsui Banking Corporation	  	833,333	  	166,667
	 13.
	  	The Bank of Nova Scotia	  	2,166,667	  	433,333
	 14.
	  	UFJ Bank Limited	  	1,500,000	  	300,000
	 15.
	  	United Overseas Bank Limited, Hong Kong	  	2,166,667	  	433,333
	 	  	 	  	
	  	

	 	  	 	  	25,000,000	  	5,000,000

  

 101 

 SCHEDULE 2 
  

CONDITIONS PRECEDENT DOCUMENTS 
  
 PART 1 
  
 TO BE DELIVERED BEFORE THE FIRST UTILISATION 
  
 Original Obligors 
  

	1.	A copy of the constitutional documents of each Original Obligor. 

  

	2.	A copy of a resolution of the board of directors of each Original Obligor approving the terms of, the transactions contemplated by, and the execution, delivery and performance of
the Finance Documents. 

  

	3.	A specimen of the signature of each person authorised on behalf of an Original Obligor to execute or witness the execution of any Finance Document or to sign or send any document or
notice in connection with any Finance Document. 

  

	4.	In the case of each Original Guarantor (other than the Company), a copy of a resolution signed by the Borrower as the sole holder of the issued or allotted shares in that Original
Guarantor approving the terms of, the transactions contemplated by, and the execution, delivery and performance of the Finance Documents. 

  

	5.	In the case of each Original Guarantor (other than the Company), a copy of a resolution of the board of directors of the Borrower, being the sole shareholder in that Original
Guarantor, approving the terms of the resolution referred to in paragraph 4 above. 

  

	6.	A certificate of an authorised signatory of the Company: 

  

	 	(a)	confirming that utilisation of the Total Commitments in full will not breach any limit binding on any Original Obligor; and 

  

	 	(b)	certifying that each copy document specified in this Part 1 of Schedule 2 is correct and complete and that the original of each of those documents is in full force and effect and
has not been amended or superseded as at the Closing Date. 

  

	7.	Evidence that each agent of the relevant Original Obligor under the Finance Documents for service of process in England, Singapore and Hong Kong has accepted its appointment.

  

	8.	Evidence that the procedure contemplated by sections 47E-48 of the Companies Ordinance of Hong Kong by Eastern Pacific Circuits Investments Limited has been completed including a
copy of its board resolutions, a copy of Form SC7 signed by a majority of its directors and to be filed with the Companies Registry of Hong Kong and a copy of its register of directors and shareholders. 

  
 Acquisition Documents 
  

	9.	A certified copy of each Acquisition Document duly executed by all parties to it. 

  

	10.	A certified copy of the Seller Loan Note Instrument, duly executed by each of the parties to it. 

  

 102 

 Finance Documents 
  

	11.	Originals of each of the following Finance Documents duly executed by each of the parties to it: 

  

	(a)	this Agreement; 

  

	(b)	the Fee Letter; 

  

	(c)	each Subordination Agreement; 

  

	(d)	the Merix Letter of Support; 

  

	(e)	each Security Document identified in Schedule 5 (Security Documents) as having to be in effect on the Closing Date; and 

  

	(f)	the Lomber Equity Pledge and the Dongguan Equity Pledge executed by each of the parties to it; 

  

	(g)	a certificate of an authorised signatory of the Company that it will procure that EPC Lomber and EPC Dongguan ratify the signing to the Lomber Equity Pledge and the Dongguan Equity
Pledge (as referred to in Schedule 5 (Security Documents)) respectively as soon as practicable and in any event within twenty-one days after Closing; 

  

	(h)	Any other document which the Company and the Facility Agent designate as a Finance Document prior to the Closing Date. 

  
 Security 
  

	12.	A copy of all notices required to be sent and other documents required to be executed under the Security Documents identified in Schedule 5 (Security Documents) as having to be in
effect on the Closing Date, together with acknowledgements of such notices where applicable. 

  

	13.	All other documents, share certificates, title documents and consents required under the Security Documents at that time or otherwise relating to assets charged by the Security
Documents identified in Schedule 5 (Security Documents) as having to be in effect on the Closing Date. 

  
 Legal opinions 
  

	14.	A legal opinion of Allen & Overy, legal advisers as to matters of English law to the Finance Parties, addressed to the Finance Parties. 

  

	15.	Legal opinions of counsel approved by the Facility Agent in respect of the laws of the jurisdiction in which each Original Obligor is incorporated and, if different, in respect of
the laws governing each Security Document, addressed to the Finance Parties. 

  
 Other documents and evidence 
  

	16.	An original of an amendment letter in relation to the Capex Facility Agreement, duly executed by all parties to it. 

  

	17.	A copy of the Closing Confirmation Notice executed by all parties to it. 

  

	18.	A copy of the executed service contracts for each Executive Officer. 

  

 103 

	19.	Evidence that all fees and expenses (including legal fees of the Agents) then due and payable by the Company and the Borrower under this Agreement have been or will be paid on or
before the first Utilisation Date. 

  

	20.	A copy of any other authorisation or other document, opinion or assurance which the Facility Agent notifies the Company is necessary or desirable in connection with the entry into
and performance of, and the transactions contemplated by, any Finance Document or for the validity and enforceability of any Finance Document. 

  

	21.	Copies of such documents as each of the Lenders may reasonably require to comply with their know your customer requirements. 

  
 Additional Guarantor 
  

	22.	The Accession Agreement duly executed by Eastern Pacific Circuits Investments Limited. 

  

	23.	The further documentation referred to in Part 3 of this Schedule in respect of Eastern Pacific Circuits Investments Limited as an Additional Guarantor and Obligor.

  

 104 

 PART 2 
  
 TO BE DELIVERED BEFORE SECOND UTILISATION 
  

	1.	A copy of the constitutional documents of Eastern Pacific Circuits Investments (Singapore) Pte. Ltd., to be renamed as Merix Holding (Singapore) Pte. Ltd. (Merix Holding
Singapore). 

  

	2.	A copy of a resolution of the board of directors of Merix Holding Singapore approving the terms of, the transactions contemplated by, and the execution, delivery and performance of
the Finance Documents to which it is a party. 

  

	3.	A specimen of the signature of each person authorised on behalf of Merix Holding Singapore to execute or witness the execution of any Finance Document or to sign or send any
document or notice in connection with any Finance Document. 

  

	4.	A copy of a resolution signed by the Borrower as the sole holder of the issued or allotted shares in Merix Holding Singapore approving the terms of, the transactions contemplated
by, and the execution, delivery and performance of the Finance Documents. 

  

	5.	A copy of a resolution of the board of directors of the Borrower, being the sole shareholder in Merix Holding Singapore , approving the terms of the resolution referred to in
paragraph 4 above. 

  

	6.	A certificate of an authorised signatory of Merix Holding Singapore: 

  

	 	(a)	confirming that utilisation of the Total Commitments in full will not breach any limit binding on it; and 

  

	 	(b)	certifying that each copy document specified in this Part 2 of Schedule 2 is correct and complete and that the original of each of those documents is in full force and effect and
has not been amended or superseded as at the second Utilisation Date. 

  

	7.	Evidence that the agent of Merix Holding Singapore under the Finance Documents for service of process in England has accepted its appointment. 

  

	8.	Evidence that Merix Holding Singapore has completed the whitewash procedure for financial assistance in accordance with section 76 of the Companies Act of Singapore.

  

	9.	An original of each of the following documents duly executed by each party to it: 

  

	 	(a)	an Accession Agreement entered into by Merix Holding Singapore; 

  

	 	(b)	the further documentation referred to in Part 3 of this Schedule in respect of Merix Holding Singapore as an Additional Guarantor and Obligor; and 

  

	 	(c)	each Security Document identified in Schedule 5 (Security Documents) as having to be in effect within 180 days of this Agreement (the Second Drawdown Security Documents).

  

	10.	A copy of all notices required to be sent and other documents required to be executed under each of the Second Drawdown Security Documents, together with acknowledgements of such
notices where applicable. 

  

	11.	All other documents, share certificates, title documents and consents required under the Security Documents at that time or otherwise relating to assets charged by each of the
Second Drawdown Security Documents. 

  

 105 

	12.	Evidence that each Second Drawdown Security Document has been, where required, registered or approved by the relevant governmental authorities or otherwise perfected.

  

	13.	Legal opinions of counsel approved by the Facility Agent in respect of the laws of Singapore and, if different, in respect of the laws governing each Finance Document to which Merix
Holding Singapore is a party, addressed to the Finance Parties. 

  

	14.	Evidence that all expenses due and payable from the Company under this Agreement in respect of the Finance Documents to which Merix Holding Singapore is a party have been paid.

  

	15.	A copy of any other authorisation or other document, opinion or assurance which the Facility Agent notifies the Company is necessary or desirable in connection with the entry into
and performance of, and the transactions contemplated by, the Finance Documents or for the validity and enforceability of any Finance Document. 

  

 106 

 PART 3 
  
 TO BE DELIVERED IN RESPECT OF AN ADDITIONAL GUARANTOR 
  
 Additional Guarantors 
  

	1.	An Accession Agreement, duly executed by the Company and the Additional Guarantor. 

  

	2.	Security Document(s) over its assets, duly executed by the Additional Guarantor. 

  

	3.	A copy of the constitutional documents of the Additional Guarantor. 

  

	4.	A copy of a resolution of the board of directors of the Additional Guarantor (or a committee of its board of directors) approving the terms of, the transactions contemplated by, and
the execution, delivery and performance of the Accession Agreement and the Finance Documents to which it is acceding. 

  

	5.	If applicable, a copy of a resolution of the board of directors of the Additional Guarantor establishing the committee referred to in paragraph 4 above. 

  

	6.	A specimen of the signature of each person authorised on behalf of the Additional Guarantor to execute or witness the execution of any Finance Document or to sign or send any
document or notice in connection with any Finance Document. 

  

	7.	A copy of a resolution, signed by all (or any lower percentage agreed by the Facility Agent) of the holders of the issued or allotted shares in the Additional Guarantor, approving
the terms of, the transactions contemplated by, and the execution, delivery and performance of the Accession Agreement and the Finance Documents to which it is acceding. 

  

	8.	If applicable, a copy of a resolution of the board of directors of each corporate shareholder in the Additional Guarantor approving the resolution referred to in paragraph 7 above.

  

	9.	A certificate of an authorised signatory of the Additional Guarantor: 

  

	 	(a)	confirming that utilising the Total Commitments in full would not breach any limit binding on it; and 

  

	 	(b)	certifying that each copy document specified in this Part 3 of Schedule 2 is correct and complete and that the original of each of those documents is in full force and effect and
has not been amended or superseded as at a date no earlier than the date of the Accession Agreement. 

  

	10.	If available, a copy of the latest audited accounts of the Additional Guarantor. 

  

	11.	For any Additional Guarantor which is not incorporated under the laws of England and Wales, evidence that its agent under the Finance Documents for service of process in England has
accepted its appointment. 

  

 107 

 Legal opinions 
  

	12.	Legal opinions of counsel approved by the Facility Agent in respect of the laws of the jurisdiction of incorporation of the Additional Guarantor (other than Merix Holding HK) and,
if different, in respect of the laws governing each Security Document to which the Additional Guarantor is acceding, addressed to the Finance Parties. 

  

	Other	documents and evidence 

  

	13.	Evidence that all expenses due and payable from the Company under this Agreement in respect of the Accession Agreement have been paid. 

  

	14.	A copy of any other authorisation or other document, opinion or assurance which the Facility Agent notifies the Company is necessary or desirable in connection with the entry into
and performance of, and the transactions contemplated by, the Accession Agreement or for the validity and enforceability of any Finance Document. 

  

 108 

 PART 4 
  
 TO BE DELIVERED IN RESPECT OF ADDITIONAL SECURITY 
  

	1.	A copy of the constitutional documents of the relevant Obligor. 

  

	2.	A copy of a resolution of the board of directors of the relevant Obligor (or a committee of its board of directors) approving the terms of, the transactions contemplated by, and the
execution, delivery and performance of the Security Document. 

  

	3.	If applicable, a copy of a resolution of the board of directors of the relevant Obligor establishing the committee referred to in paragraph 3 above. 

  

	4.	A specimen of the signature of each person authorised on behalf of the relevant Obligor to execute or witness the execution of the Security Document or to sign or send any document
or notice in connection with such Security Document. 

  

	5.	A copy of a resolution, signed by all (or any lower percentage agreed by the Facility Agent) of the holders of the Obligor’s issued or allotted shares, approving the execution
of the Security Document. 

  

	6.	If applicable, a copy of a resolution of the board of directors of each corporate shareholder in the Obligor approving the resolution referred to in paragraph 5 above.

  

	7.	A certificate of an authorised signatory of the relevant Obligor certifying that each copy document specified in Part 4 of this Schedule 2 is correct and complete and that the
original of those documents is in full force and effect and has not been amended or superseded as at a date no earlier than the date of the additional Security Document. 

  

	8.	A legal opinion of counsel approved by the Facility Agent in respect of the laws of the jurisdiction in which the relevant Obligor is incorporated, and, if different, in respect of
the laws governing the additional Security Document, addressed to the Finance Parties. 

  

	9.	A copy of all notices required to be sent or other documents required to be executed under the Security Document, together with acknowledgements of such notices where applicable.

  

	10.	All other documents, share certificates, title documents and consents required under the Security Document at that time or otherwise relating to assets charged by the Security
Document. 

  

	11.	A copy of any other authorisation or other document, opinion or assurance which the Facility Agent notifies the Company is necessary or desirable in connection with the entry into
and performance of, and the transactions contemplated by, the Security Document or for the validity and enforceability of any Finance Document. 

  

 109 

 PART 5 
  
 FORM OF CLOSING CONFIRMATION NOTICE 
  
 Merix/EPC acquisition 
  

	1.	Background 

  
 Reference is made to the payment direction notice between the parties dated [date] (the Payment Direction Notice). 
  
 Terms defined in the Payment Direction Notice have the same meanings when
used in this confirmation. 
  

	2.	Confirmation 

  

	(a)	The Facility Agent acknowledges that it has received all amounts payable to it in accordance with the Payment Direction Notice. 

  

	(b)	The Seller and the Purchaser confirm that all conditions precedent to the Acquisition, save for payment of the Initial Consideration which will occur immediately following the
execution of this confirmation, have been unconditionally and irrevocably satisfied or waived. 

  

	(c)	The Facility Agent confirms that all conditions precedent to drawdown under the Merix Credit Agreement have been unconditionally and irrevocably satisfied or waived.

  

	(d)	Following the execution of this confirmation, the Facility Agent shall apply amounts received in accordance with the Payment Direction Notice as contemplated by the Payment
Direction Notice. 

  
 We agree to
the above. 
  
  

 EASTERN PACIFIC CIRCUITS HOLDINGS LIMITED 
  
  

 MERIX CAYMANS TRADING COMPANY LIMITED 
  
  

 MERIX MANUFACTURING (HONG KONG) LIMITED 
  

 110 

 MERIX CORPORATION

  
  

 STANDARD CHARTERED BANK (HONG KONG) LIMITED 
 in its capacity as Administrative Agent 
  
  

 STANDARD CHARTERED BANK (HONG KONG) LIMITED 
 in its capacity as Facility Agent 
  

 111 

 SCHEDULE 3 
  

FORM OF REQUEST 
  

	To:	Standard Chartered Bank (Hong Kong) Limited as Facility Agent 

  

	From:	Merix Caymans Trading Company Limited 

  

	Date:	[            ] 

  
 USD30,000,000 Credit Agreement 
 dated
[            ] 2005 (the Agreement) 
  

	1.	We refer to the Agreement. This is a Request. Terms defined in the Agreement have the same meaning when used in this Request. 

  

	2.	We wish to borrow a Term Loan/Revolving Credit Loan on the following terms: 

  

	 	(a)	Utilisation Date: [            ] 

  

	 	(b)	Amount/currency: [            ] 

  

	 	(c)	Term: [            ]. 

  

	3.	Our payment instructions are: [            ]. 

  

	4.	We confirm that each condition precedent under the Agreement which must be satisfied on the date of this Request is so satisfied. 

  

	5.	This Request is irrevocable. 

  
 By: 
  
 Merix Caymans Trading Company Limited 
  

 112 

 SCHEDULE 4 
  

FORM OF TRANSFER CERTIFICATE 
  

	To:	Standard Chartered Bank (Hong Kong) Limited as Facility Agent 

  

	From:	[THE EXISTING LENDER] (the Existing Lender) and [THE NEW LENDER] (the New Lender) 

  

	Date:	[            ] 

  
 Merix Caymans Trading Company Limited - USD30,000,000 Credit Agreement 
 dated [            ] 2005 (the Agreement) 
  

	1.	We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning when used in this Transfer Certificate. 

  

	2.	The Existing Lender transfers by novation to the New Lender all the rights and obligations of the Existing Lender which correspond to that portion of the Existing Lender’s
Commitments and participations in Loans under the Agreement specified in the schedule to this Transfer Certificate (the Schedule) in accordance with the terms of the Agreement. 

  

	3.	The proposed Transfer Date is [            ]. 

  

	4.	On the Transfer Date the New Lender becomes party to the Agreement as a Lender. 

  

	5.	The administrative details of the New Lender for the purposes of the Agreement are set out in the Schedule. 

  

	6.	The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations in respect of this Transfer Certificate contained in the Agreement.

  

	7.	This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of the Transfer
Certificate. 

  

	8.	This Transfer Certificate has been [executed and delivered as a deed] [entered into] on the date stated at the beginning of this Transfer Certificate and is governed by English law.

  

 113 

 THE SCHEDULE 
  
 Rights and obligations to be transferred by novation 
 [insert relevant details, including applicable Commitment (or part) and participation in Loans] 
  
  
 PART 1 
  
 COMMITMENTS 
  

			
	Term Loan Commitments	 	Revolving Credit Loans Commitments

  
  
 PART 2 
  
 PARTICIPATIONS IN LOANS 
  

			
	Term Loans	 	Revolving Credit Loans

  

 114 

 Administrative details of the New Lender 
 [insert details of Facility Office, address for notices and payment details etc.] 
  
  
  
 [EXISTING LENDER] 
  
 [NEW LENDER] 
  
 The Transfer Date is confirmed by the Facility Agent as [                        ]. 
  
 FACILITY AGENT 
  
 By: 
  
 As Facility Agent 
 and for and on behalf of 
 each of the parties to the Agreement (other 
 than the Existing Lender and the New Lender)

  

	Note:	The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender’s interest in security in all jurisdictions. It is the
responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender’s security in any jurisdiction and, if so, to arrange for execution of
those documents and completion of those formalities. 

  

 115 

 SCHEDULE 5 
  

SECURITY DOCUMENTS 
  

					
	 Security Document

	 	 Description

	 	 Time limit to effect security

	Master Security Deed	 	All present and future assets of Merix Caymans Holding Company Limited, Merix Caymans Trading Company Limited, Merix Manufacturing (Hong Kong) Limited, Eastern Pacific Circuits Investments
Limited and Merix UK Limited (including its shareholding in any other subsidiaries)	 	On the Closing Date
			
	Merix Holding Singapore Security Deed	 	All present and future assets of Eastern Pacific Circuits Investments (Singapore) Pte. Ltd., (to be renamed as Merix Holding (Singapore) Pte. Ltd.)	 	Within 180 days after the date of this Agreement
			
	Merix Singapore Sales Security Deed	 	All present and future assets of Merix Singapore Sales Pte. Ltd.	 	On the Closing Date
			
	Singapore Share Mortgage	 	All of Merix Caymans Trading Company Limited’s present and future shareholding in Merix Singapore Sales Pte. Ltd. and Eastern Pacific Circuits Investments (Singapore) Pte. Ltd. (to be
renamed as Merix Holding (Singapore) Pte. Ltd.)	 	On the Closing Date
			
	UK Share Mortgage	 	All of Merix Caymans Trading Company Limited’s present and future shareholding in Merix UK Limited	 	On the Closing Date
			
	Lomber Equity Pledge	 	90% equity interest in Lomber (Huizhou) Limited (to be renamed as Merix Lomber Printed Circuits (Huizhou) Limited) owned by Eastern Pacific Circuits Investments Limited	 	Within 21 days after the date of this Agreement
			
	Dongguan Equity Pledge	 	85.29% equity interest in EPC (Dongguan) Limited (to be renamed as Merix Printed Circuits (Dongguan) Limited) owned by Eastern Pacific Circuits Investments Limited	 	Within 21 days after the date of this Agreement
			
	MHY Equity Pledge	 	95% equity interest in Eastern Pacific Circuits (Huiyang) Limited (to be renamed as Merix Printed Circuits (Huiyang) Limited) owned by Eastern Pacific Circuits Investments (Singapore) Pte.
Ltd.	 	Within 180 days after the date of this Agreement
			
	MHZ Equity Pledge	 	85% equity interest in Eastern Pacific Circuits (Huizhou) Limited (to be renamed as Merix Printed Circuits (Huizhou) Limited) owned by Eastern Pacific Circuits Investments (Singapore) Pte.
Ltd.	 	Within 180 days after the date of this Agreement

  

 116 

 SCHEDULE 6 
  

FORM OF COMPLIANCE CERTIFICATE 
  

	To:	Standard Chartered Bank (Hong Kong) Limited as Facility Agent 

  

	From:	Merix Caymans Trading Company Limited 

  

	Date:	[            ] 

  
 USD30,000,000 Credit Agreement 
 dated
[            ] 2005 (the Agreement) 
  

	1.	We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate. 

 

	2.	We confirm that as at [relevant testing date]: 

  

	 	(a)	Consolidated EBITDA was [            ] and Consolidated Total Debt Service was
[                        ]; therefore, the Fixed Charges Coverage Ratio was
[                        ] to 1; 

  

	 	(b)	Consolidated Total Borrowings were [                    ] and Consolidated EBITDA
was [                        ]; therefore, the Leverage Ratio was
[                        ] to 1; 

  

	 	(c)	Consolidated EBITDA was [                        ] and
Consolidated Total Interest Payable was [                        ]; therefore, the Interest Coverage Ratio was
[                        ] to 1; 

  

	 	(d)	the level of Capital Expenditure was
[                        ]; 

  

	 	(e)	the level of Excess Cashflow was [                        ].

  

	3.	We set out below calculations establishing the figures in paragraph 2 above: 

  

[                        ].

  

	4.	We confirm that the following companies were Subsidiaries at [relevant testing date]: 

  
 [                        ]. 
  

	5.	We confirm that as at [relevant testing date] the aggregate amount of Net Proceeds from Recovery Events during the annual Accounting Period of the Company ending
[                        ] was
[                        ]. 

  

	6.	We confirm that no Default is outstanding as at [relevant testing date] or, if it is, the details of the Default and the remedial action proposed or being taken are as follows:

  
 [                        ]. 
  
 Merix Caymans Trading Company Limited 
  
 By: 
  

 117 

 SCHEDULE 7 
  

FORM OF MARGIN CERTIFICATE 
  

	To:	Standard Chartered Bank (Hong Kong) Limited as Facility Agent 

  

	From:	Merix Caymans Trading Company Limited 

  

	Date:	[            ] 

  
 USD30,000,000 Credit Agreement 
 dated
[            ] 2005 (the Agreement) 
  

	1.	We refer to the Agreement. This is a Margin Certificate. Terms defined in the Agreement have the same meaning when used in this Margin Certificate. 

  

	2.	We confirm that as at [relevant testing date] Consolidated Total Borrowings were
[                        ] and Consolidated EBITDA was
[                        ]; therefore, the Leverage Ratio was
[                        ] to 1. 

  

	3.	We confirm that on the basis of the above, the applicable Margin in respect of the Term Loans and the Revolving Credit Loans is
[                        ] per cent. per annum. 

  

	4.	We set out below calculations establishing the figures in paragraph 2 above: 

  

[                        ].

  

	5.	We confirm that no Default or Event of Default is outstanding as at
[                        ]. 

  

 118 

 SCHEDULE 8 
  

FORM OF ACCESSION AGREEMENT 
  

	To:	Standard Chartered Bank (Hong Kong) Limited as Facility Agent 

  

	From:	Merix Caymans Trading Company Limited and ADDITIONAL GUARANTOR 

  

	Date:	[            ] 

  
 USD30,000,000 Credit Agreement 
 dated
[            ] 2005 (the Agreement) 
  
 We refer to the Agreement. This is an Accession Agreement. Terms defined in the Agreement have the same meaning when used in this Accession Agreement. 
  

	1.	[Name of company] of [address/registered office] agrees to become: 

  

	 	(a)	an Additional Guarantor under the Agreement and to be bound by the terms of the Agreement as an [Additional Guarantor]; and 

  

	 	(b)	a Junior Creditor under the Group Subordination Agreement and to be bound by the terms of the Group Subordination Agreement as a Junior Creditor. 

  

	2.	The Repeating Representations are correct on the date of this Accession Agreement. 

  

	3.	This Accession Agreement has been executed and delivered as a deed on the date stated at the beginning of this Accession Agreement and is governed by English law.

  

			
	 Executed as a deed by
 Merix Caymans Trading Company
Limited
 acting by
	 	  

	 	 	Director
		
	and	 	  

	 	 	Secretary

  
 Executed as a deed by

 [PROPOSED [ADDITIONAL BORROWER AND ]ADDITIONAL GUARANTOR] 
  

			
	 	 	  

	 	 	Director
	and	 	  

	 	 	Secretary

  

 119 

 SCHEDULE 9 
  

FORM OF MERIX LETTER OF SUPPORT 
  

	To:	The Finance Parties as defined in the Agreement (as defined below) 

  
 [DATE] 
  
 Dear Sirs 
  
 Merix Caymans Trading Company Limited – USD30,000,000 Credit Agreement dated 2005 (the Agreement) 
  

	1.	Interpretation 

  
 We refer to the Agreement. Capitalised terms defined in the Agreement have the same meaning when used in this letter unless expressly defined in this
letter and the provisions of Clause 1.2 (Construction) of the Agreement apply to this letter as though they were set out in full in this letter, except that reference to the Agreement will be construed as references to this letter. 
  

	2.	Undertaking 

  
 In consideration of the Finance Parties entering into the Agreement, we confirm that, if an Event of Default is outstanding, we will co-operate reasonably
with the Finance Parties and Security Agents to facilitate the realisation of any security asset under a Security Document, or the exercise of any right, power or discretion exercisable, by the relevant Security Agent or any of its delegates or
sub-delegates in respect of such security assets, including without limitation: 
  

	 	(a)	the execution of transfer or conveyance instruments, documents or agreements; 

  

	 	(b)	the giving of notices or directions; or 

  

	 	(c)	instructing the relevant entity in the Group to take any action referred to in paragraph (a) or (b) above. 

  

	3.	Governing law 

  
 This letter is governed by English law. 
  
 Yours faithfully 
  
 For: 
 MERIX
CORPORATION 
  
 [DATE] 
  

 120 

 SCHEDULE 10 
  
 FORM OF SELLER LOAN NOTE INSTRUMENT 
  
 SUBORDINATED PROMISSORY NOTE 
  

Merix Caymans Trading Company Limited 
  
 [28] September 2005 
  
 FOR VALUE RECEIVED, Merix Caymans Trading Company Limited, a company incorporated under the laws of the Cayman Islands with its registered office at Century Yard, Cricket
Square, Hutchins Drive, P.O. Box 2681 GT, Grand Cayman, British West Indies (the “Company”), unconditionally and irrevocably promises to pay to the order of Eastern Pacific Circuits Holdings Limited (“Seller”) the aggregate of
(a) Eleven Million U.S. Dollars (U.S.$11,000,000) and (b) an amount equal to the EBITDA Earnout Consideration (as defined in the SPA, as defined below) (“Principal”), plus interest on the unpaid balance of the Principal from the
date hereof at the rate of (i) 7% per annum from the date of this Note to and inclusive of 1 December, 2006, (ii) thereafter 8% per annum to and inclusive of 1 December 2007, and (iii) thereafter 9% per annum
until this Note is fully paid as specified below (“Fixed Interest Rate”). The maturity date of this Note is the later of (a) 15 March 2009; and (b) the date that is ten (10) Business Days after the date on which all
Relevant Claims are settled (“Maturity Date”). 
  
 The Company and the
Seller are party to a Seller Subordination Agreement dated on or about the date of this Note with Standard Chartered Bank (Hong Kong) Limited as the security agent under the Credit Agreement (as defined below) (“Seller Subordination
Agreement”). The terms of this Note are, where expressly provided for, subject to the terms of the Seller Subordination Agreement. 
  

	1.	Purchase Agreement 

  
 This is the Note referred to in the Master Sale and Purchase Agreement dated 14 April, 2005 as varied by letter agreements dated 28 July, 2005
and 16 September 2005 and further amended by a Supplemental Agreement dated [28] September, 2005 (“SPA”) between the Seller and Merix Corporation as the Buyer. Capitalised terms used, but not defined, herein shall have the meaning
given to them in the SPA. 
  

	2.	Subordination to Credit Agreement 

  
 (a) The Company is a party to a US$30,000,000 credit agreement dated on or about the date of this Note between (amongst others) the Company and Standard
Chartered Bank (Hong Kong) Limited as the security agent (“Credit Agreement”). “Senior Obligations” means all of the liabilities and payment obligations of the Company and its subsidiaries under the Credit Agreement and, subject
to paragraph 2(b), all complete and partial refinancings of such liabilities and payment obligations. Notwithstanding any other provision in this Note, all payments hereunder shall be deferred until all the Senior Obligations (actual or contingent)
have been paid and discharged in full unless expressly permitted under Clause 4 (Permitted Payments) of the Seller Subordination Agreement. 
  

 121 

 (b) If the Senior Obligations are refinanced on an arm’s length basis, the parties agree to enter
into a subordination agreement with the parties advancing funds for the refinancing on terms similar to those in the Seller Subordination Agreement in respect of and to the extent that the new advances do not exceed the Senior Obligations then
outstanding. 
  

	3.	Payment 

  
 (a) Accrued interest shall be payable in arrears on the first business day of each March, June, September and December beginning 1 December 2006
(each a “Quarterly Payment”) and on the Maturity Date; provided that if the prevailing rate of interest under the Credit Agreement (“Lender Rate”) during the relevant interest period, is less than the Fixed Interest Rate, the
interest payment for such period shall be the amount calculated at the Lender Rate and the difference between the accrued interest calculated by reference to the Fixed Interest Rate and the Lender Rate for such period (“Interest Rate
Difference”) shall be paid on the Maturity Date. Interest shall accrue on the Interest Rate Difference at the Fixed Interest Rate and the amount of such interest shall be paid on the Maturity Date. 
  
 (b) Regardless of the date EBITDA Earnout Consideration is determined, it
shall be deemed to have been outstanding from the date of this Note for all interest calculation purposes. Once the EBITDA Earnout Consideration is determined, all accrued and unpaid interest thereon, subject to the interest payment limitations in
Section 3(a), shall be paid on the first Quarterly Payment after such determination. 
  
 (c) Principal shall be paid in four equal installments of 25% of the Principal each on 1 March 2007, 1 December 2007, 1 December 2008 and 15 March 2009 (each a “Principal Payment”). Each
Principal Payment shall be made or deemed satisfied as follows: (i) first, by reduction of the amount due by the amount of the Post Cash Working Capital Shortfall determined pursuant to Clause 6.8 of the SPA not previously applied to
satisfaction of Principal; (ii) second, by reduction of the amount due by the amount of settled Relevant Claims not previously applied to the satisfaction of Principal; (iii) third, by suspension of the payment obligation by the amount of
asserted, but unsettled, Relevant Claims in the manner provided in Section 4 hereof to the extent that such unsettled Relevant Claims have not previously been applied to the suspension of Principal Payments; and (iv) fourth, by payment in
immediately available funds. 
  
 (d) If the Company fails to make
any Quarterly Payment or Principal Payment or pay any part thereof on its due date, interest on the unpaid amount shall accrue on a day to day basis at the relevant Fixed Interest Rate from but excluding the due date to and including the date of
actual payment. 
  
 (e) All payments shall be applied to accrued
interest and thereafter to principal. 
  
 (f) All amounts due
hereunder are payable in lawful money of the United States of America. 
  
 (g) Principal plus accrued interest may be prepaid at any time without penalty by the Company. 
  
 (h) Notwithstanding anything to the contrary contained herein or in the SPA, in no event shall any amount payable by the Company as interest or other
charges on this Note exceed the highest lawful rate permissible under any law applicable hereto. 
  

	4.	Relevant Claims 

  
 If, in accordance with Schedule 4 of the SPA, the Buyer gives the Seller notice of a Relevant Claim, and such Relevant Claim is not settled or otherwise
determined by the date of a Principal Payment, the Principal Payment shall be suspended in the manner described in Section 3(c) by an amount equal to such unsettled Relevant Claim (“Amount Claimed”). Upon the settlement or
determination of such Relevant Claim , the Principal Payment shall be deemed satisfied to the extent of the amount settled or otherwise 

  

 122 

 
determined in respect of such Relevant Claim (the “Settled Amount”), and an amount equal to the Amount Claimed less the Settled Amount, if any,
shall be paid to the Seller within ten (10) Business Days of the settlement or determination of such Relevant Claim. 
  

	5.	Acceleration 

  
 (a) The amounts payable hereunder may be declared immediately due and payable by the Seller if: (a) the Company fails to make any Quarterly Payment
when due and such failure to pay continues for five (5) days, (b) the Company fails to make any Principal Payment when due, or (c) the Company or any of its subsidiaries or the Company’s shareholder raises financing other than
the Facility (as defined in the Credit Agreement), which in a single transaction or a series of related transactions delivers proceeds in excess of US$50,000,000, or (d) the Company shall have made an assignment for the benefit of creditors or
shall have admitted in writing its inability to pay its debts as they become due or consented to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of all or of substantially all of its property; or by
order of a court of competent jurisdiction a receiver or liquidator or trustee of the Company or any of its property shall have been appointed and shall not have been discharged within 60 days, or by decree of such a court the Company shall have
been adjudicated insolvent and such decree shall have continued undischarged and unstayed for 60 days after the entry thereof; or a petition to reorganize the Company, pursuant to any bankruptcy or similar statute applicable to the Company, shall
have been filed against the Company and shall not have been dismissed within 60 days after such filing, or the Company shall have been adjudicated a bankrupt, or shall have filed a petition in voluntary bankruptcy under any provision of any
bankruptcy law, or shall have consented to the filing of any bankruptcy or reorganization petition against it under any such law, or shall have filed a petition to reorganize the Company pursuant to any applicable law, provided that the foregoing
acceleration right may not be exercised in a manner that causes the outstanding Principal at any time to be less than the prevailing liability cap, as determined in accordance with Part 1 of Schedule 9 of the SPA (the “Retained Amount”).
Thereafter, on each date on which the liability cap falls in accordance with Part 1 of Schedule 9 of the SPA, and if Seller has exercised the foregoing acceleration right, the Company shall forthwith pay to the Seller the difference between the
Retained Amount and the prevailing liability cap. 
  
 (b)
Notwithstanding any other provision in this Note, the Seller’s rights under paragraph (a) above may only be exercised in accordance with the Seller Subordination Agreement. 
  

	6.	Amendments to the Credit Agreement 

  
 (a) Subject to paragraph (b) below, the Company shall not, without the written consent of the Seller agree to any amendment of any term of the Credit
Agreement, except for an amendment which: 
  

	 	(i)	is procedural or administrative in nature; or 

  

	 	(ii)	does not result in the Company being subjected to more onerous obligations than those existing at the date hereof or which would otherwise prejudice the Seller’s rights under
this Note. 

  

	 	(b)	If: 

  
 (i) an Event of Default has been declared (other than in respect of a matter referred to in Clause 20.3(b) (Breach of other obligations) under the Credit Agreement) and is outstanding under the Credit Agreement; or

  
 (ii) an Event of Default has been declared in respect of a
matter referred to in Clause 20.3(b) (Breach of other obligations) under the Credit Agreement and the Facility Agent has taken action to accelerate the Senior Obligations in respect of such an Event of Default, the Company may agree to any amendment
of any term of the Credit Agreement without the consent of the Seller. 
  

 123 

	7.	No set-off, counterclaim, deduction or withholding 

  
 All sums payable under this Note shall be paid in full without set-off or counterclaiming for any reason and without deduction of or withholding for any
taxes, duties levies, imposts or charges of any nature other than as contemplated in paragraphs 3(c), 4 and 5 hereof. 
  

	8.	Waiver 

  
 The Company hereby waives demand, protest and notice of demand, protest and nonpayment and consent to any and all renewals and extensions of the time of
payment under this Note. 
  

	9.	Assignability 

  
 Neither the Seller nor the Company may assign, transfer, endorse or in any other way alienate any of its rights under this Note whether in whole or in
part. 
  

	10.	Governing Law and Dispute Resolution 

  
 This Note is governed by the laws of the Hong Kong Special Administrative Region of the People’s Republic of China. Any dispute arising under this
Note shall be resolved in accordance with Clause 29 of the SPA. 
  

	
	MERIX CAYMANS TRADING COMPANY LIMITED
	
	Name:
	
	Title:

  

 124 

 SCHEDULE 11 
  
 STRUCTURE MEMORANDUM 
  

	1.	BACKGROUND 

  
 The purpose of this memorandum is to set out certain details of the Acquisition, including: 
  

	 	(a)	all members of the Group (and all Joint Ventures and minority interests held by any member of the Group); 

  

	 	(b)	descriptions which in all material respects are true, complete and correct of the corporate ownership structure of the Group (including all minority interests in any member of the
Group), as it will be immediately after Closing; and 

  

	 	(c)	all loans (of USD100,000 or more) between members of the Group and between any member of the Group and a member of the Merix Group as they will be immediately after Closing.

  
 Terms defined in the credit agreement (Credit
Agreement) in respect of the Acquisition between, amongst others, Merix Caymans Holding and Standard Chartered Bank (Hong Kong) Limited as agent have the same meaning when used in this memorandum. 
  

	2.	STRUCTURE OF THE GROUP 

  
 The parties believe the existing group structure of the Target Group is shown as Appendix 1 (EPC group structure). 
  
 The Acquisition Documents provide: 
  

	 	(a)	for the sale and transfer by Eastern Pacific Circuits (HK) Limited of: 

  

	 	(i)	its manufacturing assets to Merix Manufacturing (Hong Kong) Ltd.; and 

  

	 	(ii)	its trading assets to Merix Caymans Trading Company Limited; 

  

	 	(b)	for the sale and transfer by Eastern Pacific Circuits Property Limited of its business to Merix Manufacturing (Hong Kong) Ltd.; 

  

	 	(c)	for the sale and transfer by Eastern Pacific Circuits (Singapore) Pte Ltd of its business to Merix Singapore Sales Pte Ltd.; 

  

	 	(d)	for the sale and transfer by Eastern Pacific Circuits (USA) Corporation of its business to Merix Asia, Inc.; 

  

	 	(e)	for the sale and transfer by Eastern Pacific Circuits (Canada) Limited of its business to Merix Circuits Corp.; 

  

	 	(f)	for the sale and transfer by Eastern Pacific Circuits (UK) Limited of its business to Merix UK Limited; 

  

 125 

	 	(g)	for the sale to Merix Caymans Trading Company Limited by Eastern Pacific Circuits Limited of all of the issued share capital of Eastern Pacific Circuits Investments (Singapore) Pte
Ltd (to be renamed Merix Holding (Singapore) Pte Ltd); and 

  

	 	(h)	for the sale to Merix Caymans Trading Company Limited by Eastern Pacific Circuits (Cayman) Limited of all of the issued share capital of Eastern Pacific Circuits Investments Limited
(to be renamed Merix Holding (Hong Kong) Ltd). 

  
 The group structure of the Merix group of companies following the Acquisition is shown as Appendix 2 (Merix group structure). 
  

	3.	LOANS 

  
 The following lists all loans (of USD100,000 or more) between members of the Group and between any member of the Group and a member of the Merix Group as
they will be immediately after Closing: 
  
 Merix Corporation
will lend Merix Caymans Trading Company Limited at Closing an amount not greater than USD55,000,000. 
  

 126 

 APPENDIX 1 
  

EPC GROUP STRUCTURE 
  
 

 
  
  

 127 

 APPENDIX 2 
  

MERIX GROUP STRUCTURE 
  
 

 
  
  

 128 

 SIGNATORIES 
  

			
	Company
	
	MERIX CAYMANS HOLDING COMPANY LIMITED
		
	By:	 	 /s/ Mark Hollinger

	Name:	 	Mark Hollinger
	Title:	 	Director
	
	Borrower
	
	MERIX CAYMANS TRADING COMPANY LIMITED
		
	By:	 	 /s/ Mark Hollinger

	Name:	 	Mark Hollinger
	Title:	 	Director
	
	Original Guarantors
	
	MERIX CAYMANS HOLDING COMPANY LIMITED
		
	By:	 	 /s/ Mark Hollinger

	Name:	 	Mark Hollinger
	Title:	 	Director

  

 i 

			
	MERIX CAYMANS TRADING COMPANY LIMITED
		
	By:	 	 /s/ Mark Hollinger

	Name:	 	Mark Hollinger
	Title:	 	Director
	
	MERIX SINGAPORE SALES PTE. LTD
		
	By:	 	 /s/ Mark Hollinger

	Name:	 	Mark Hollinger
	Title:	 	Director
	
	MERIX MANUFACTURING (HONG KONG) LIMITED
		
	By:	 	 /s/ Mark Hollinger

	Name:	 	Mark Hollinger
	Title:	 	Director
	
	MERIX UK LIMITED
		
	By:	 	 /s/ Mark Hollinger

	Name:	 	Mark Hollinger
	Title:	 	Director

  

 ii 

					
	Original Lenders	 	 
	
	BANCA NAZIONALE DEL LAVORO S.P.A., HONG KONG BRANCH
			
	 By:
	 	 /s/ Franco Ungaro

	 	 /s/ Vincent Yip

	Name:	 	Franco Ungaro	 	Vincent Yip
	Title:	 	Authorized Signatory	 	Authorized Signatory
	
	CITIC KA WAH BANK LIMITED
			
	By:	 	 /s/ Henry Ng

	 	 /s/ Jack Wong

	Name:	 	Hery Ng	 	Jack Wong
	Title:	 	Authorized Signatory	 	Authorized Signatory
	
	COMMEREZBANK ASIA PACIFIC, COMMERZBANK HONG KONG BRANCH
			
	By:	 	 /s/ P.A. Kurtz

	 	 /s/ Maggie Tan

	Name:	 	P.A. Kurtz	 	Maggie Tan
	Title:	 	Authorized Signatory	 	Authorized Signatory
	
	DEVELOPMENT BANK OF SINGAPORE LIMITED
			
	By:	 	 /s/ Kuik Sam Aik

	 	 
	Name:	 	Kuik Sam Aik	 	 
	Title:	 	Attorney	 	 

  

 iii 

					
	IKB DEUTSCHE INDUSTRIEBANK AG
			
	By:	 	 /s/ David Kidd

	 	 
	Name:	 	David Kidd	 	 
	Title:	 	Attorney	 	 
	
	JP MORGAN CHASE BANK, N.A.
			
	By:	 	 /s/ Anthony John Maher

	 	 
	Name:	 	Anthony John Maher	 	 
	Title:	 	Authorized Signatory	 	 
	
	KBC BANK N.V.
			
	By:	 	 /s/ Luc Cools

	 	 /s/ Andy Fung

	Name:	 	Luc Cools	 	Andy Fung
	Title:	 	Authorized Signatory	 	Authorized Signatory
	
	LEHMAN BROTHERS COMMERCIAL CORPORATION ASIA LIMITED
			
	By:	 	 /s/ Edwin Wong

	 	 
	Name:	 	Edwin Wong	 	 
	Title:	 	Attorney	 	 

  

 iv 

					
	MALAYAN BANKING BERHAD
			
	By:	 	 /s/ Ong Seet Joon

	 	 
	Name:	 	Ong Seet Joon	 	 
	Title:	 	Attorney	 	 
	
	RABOBANK INTERNATIONAL HONG KONG BRANCH
			
	By:	 	 /s/ Stan Lee

	 	 /s/ Eric Poon

	Name:	 	Stan Lee	 	Eric Poon
	Title:	 	Authorized Signatory	 	Authorized Signatory
	
	STANDARD CHARTERED BANK (HONG KONG) LIMITED
			
	By:	 	 /s/ Andrew Hardaere

	 	 
	Name:	 	Andrew Hardaere	 	 
	Title:	 	Attorney	 	 
	
	SUMITOMO MITSUI BANKING CORPORATION
			
	By:	 	 /s/ Mitsuhiro Akiyama

	 	 
	Name:	 	Mitsuhiro Akiyama	 	 
	Title:	 	Attorney	 	 

  

 v 

					
	THE BANK OF NOVA SCOTIA
			
	By:	 	 /s/ Chao Wai Khean

	 	 
	Name:	 	Chao Wai Khean	 	 
	Title:	 	Attorney	 	 
	
	UFJ BANK LIMITED
			
	By:	 	 /s/ Hiraishi, Kenichi

	 	 
	Name:	 	Hiraishi, Kenichi	 	 
	Title:	 	Deputy General Manager            Authorized Signatory
	
	UNITED OVERSEAS BANK LIMITED, HONG KONG
			
	By:	 	 /s/ Chow Yew Hon

	 	 
	Name:	 	Chow Yew Hon	 	 
	Title:	 	Attorney	 	 
	
	Facility Agent
	
	STANDARD CHARTERED BANK (HONG KONG) LIMITED
			
	By:	 	 /s/ Jacky Chen

	 	 
	Name:	 	Jacky Chen	 	 
	Title:	 	Loans & Agency Specialises    Authorized Signatory

  

 vi 

					
	Security Agent	 	 
	
	STANDARD CHARTERED BANK (HONG KONG) LIMITED
			
	By:	 	 /s/ Jacky Chen

	 	 
	Name:	 	Jacky Chen	 	 
	Title:	 	Loans & Agency Specialises             Authorized Signatory
	
	Administrative Agent
	
	STANDARD CHARTERED BANK (HONG KONG) LIMITED
			
	By:	 	 /s/ Jacky Chen

	 	 
	Name:	 	Jacky Chen	 	 
	Title:	 	Loans & Agency Specialises             Authorized Signatory

  

 vii

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]