SENIOR SECURED CREDIT FACILITIES CREDIT AGREEMENT

Exhibit 10.32

EXECUTION VERSION

$55,000,000

SENIOR SECURED CREDIT FACILITIES

CREDIT AGREEMENT

AMONG

NETLOGIC MICROSYSTEMS, INC.,

AS US BORROWER,

NETLOGIC MICROSYSTEMS INTERNATIONAL LIMITED,

AS BVI BORROWER,

THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO,

AND

SILICON VALLEY BANK,

AS ADMINISTRATIVE AGENT, ISSUING LENDER AND SWINGLINE LENDER

DATED AS OF JUNE 19, 2009

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C REDIT A GREEMENT (this “ Agreement ”), dated as of June 19, 2009, among N ET L OGIC M ICROSYSTEMS , I NC . , a Delaware corporation (the “ US Borrower ”), N ET L OGIC M ICROSYSTEMS I NTERNATIONAL L IMITED , a British Virgin Islands company (the “ BVI Borrower ” and, together with the US Borrower, the “ Borrowers ” and each, a “ Borrower ”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “ Lenders ”) and S ILICON V ALLEY B ANK (“ SVB ”), as administrative agent, issuing lender and swingline lender (in such capacity, the “ Administrative Agent ”).

W ITNESSETH :

W HEREAS , the US Borrower has entered into that certain asset sale agreement (the “ IDT Agreement ”), dated as of April 30, 2009, by and among the US Borrower, certain of the US Borrower’s Subsidiaries and Integrated Device Technologies, Inc. (“ IDT ”), providing for the Acquisition (as defined therein) of the Assets (as defined therein) (the “ IDT Acquisition ”);

W HEREAS , the US Borrower intends to acquire (the “ RMI Acquisition ” and, together with the IDT Acquisition, the “ Specified Acquisitions ” and each, a “ Specified Acquisition ”) all of the outstanding capital stock of RMI Corporation (“ RMI ”) pursuant to an Agreement and Plan of Merger Reorganization, dated as of May 31, 2009, by and among the US Borrower, Roadster Merger Corporation, the representative of certain of the holders of the Capital Stock of RMI and RMI (the “ RMI Merger Agreement ”);

W HEREAS , the US Borrower has extended a loan to RMI prior to the RMI Acquisition, in an amount equal to $15,000,000 (the “ RMI Bridge Financing ”);

W HEREAS , the Borrowers desire to obtain financing for (i) the Specified Acquisitions, (ii) fees and expenses incurred in connection with the foregoing, and (iii) ongoing working capital and general corporate purposes;

W HEREAS , the Lenders have agreed to extend certain credit facilities to the Borrowers in an aggregate amount equal to $55,000,000, consisting of (i) $15,000,000 in aggregate principal amount of Tranche A Term Loans available to the US Borrower to be funded on the Closing Date, (ii) $15,000,000 in aggregate principal amount of Tranche B Term Loans available to the BVI Borrower to be funded on the Closing Date, and (iii) $25,000,000 in aggregate principal amount of Revolving Commitments available to the US Borrower (including $10,000,000 in aggregate principal amount of availability for Letters of Credit as a sublimit of the Swingline Commitment);

W HEREAS , the US Borrower has agreed to secure all of the US Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a first priority lien on substantially all of its assets, and the BVI Borrower has agreed to secure all of the BVI Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a first priority lien on substantially all of its assets; and

W HEREAS , each of the US Guarantors, if any, has agreed to guarantee the US Obligations of the US Borrower and to secure their respective US Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a first priority lien on substantially all of its assets, and each of the BVI Guarantors has agreed to guarantee the BVI Obligations of the BVI Borrower and to secure their respective BVI Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a first priority lien on substantially all of its assets.

N OW , T HEREFORE , the parties hereto hereby agree as follows:

SECTION 1

DEFINITIONS

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

“ ABR ”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the higher of (a) Prime Rate in effect on such day and (b) the Federal Funds Effective Rate on such day plus 0.50%. Any change in the ABR due to a change in the Prime Rate or Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or Federal Funds Effective Rate.

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

“ Accounts ”: means all “accounts” (as defined in the UCC) of a Person, including, without limitation, accounts, accounts receivable, monies due or to become due and obligations in any form (whether arising in connection with contracts, contract rights, instruments, general intangibles, or chattel paper), in each case whether arising out of goods sold or services rendered or from any other transaction and whether or not earned by performance, now or hereafter in existence, and all documents of title or other documents representing any of the foregoing, and all collateral security and guaranties of any kind, now or hereafter in existence, given by any Person with respect to any of the foregoing.

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

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

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

“ Aggregate Exposure ”: with respect to any Lender at any time, an amount equal to the sum of (a) the aggregate then unpaid principal amount of such Lender’s Term Loans and (b) the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding, and the L/C Commitment of such Lender then in effect (as a sublimit of the Swingline Commitment).

 

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“ Aggregate Exposure Percentage ”: with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

“ Agreement ”: as defined in the preamble hereto.

“ Applicable Margin ”: for each Type of Loan, 4.00% per annum in the case of Eurodollar Loans, and 1.75% per annum in the case of ABR Loans; provided , that commencing on the date on which the Administrative Agent receives a Compliance Certificate pursuant to Section 6.2(b) for the fiscal quarter ending on September 30, 2009, the rate per annum set forth under the relevant column heading below:

 

“ Application ”: an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to issue a Letter of Credit.

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

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

“ Available Revolving Commitment ”: an amount equal to (a) the aggregate Revolving Commitments of all Lenders, minus (b) the aggregate undrawn amount of all outstanding Letters of Credit at such time and the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time, minus (c) the outstanding principal balance of any Revolving Loans.

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

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

“ Borrower ” and “ Borrowers ”: as defined in the preamble hereto.

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

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

 

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

“ BVI Borrower ”: as defined in the preamble hereto.

“ BVI Guarantee and Collateral Agreement ”: the Guarantee and Collateral Agreement to be executed and delivered by the BVI Borrower and each of the BVI Guarantors in respect of the BVI Obligations, substantially in the form of Exhibit A-2.

“ BVI Guarantor ”: the US Borrower and each Material Subsidiary of the US Borrower (other than the BVI Borrower).

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

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

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

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

“ Cash Equivalents ”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank

 

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deposits having maturities of six months or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $250,000,000; (c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within six months from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; (g) money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition; or (h) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.

“ Casualty Event ”: any involuntary loss of title, any involuntary loss of, damage to or any destruction of, or any condemnation or other taking (including by any Governmental Authority) of, any property of any Group Member. “Casualty Event” shall include but not be limited to any taking of all or any part of any real property of any person or any part thereof, in or by condemnation or other eminent domain proceedings pursuant to any Requirement of Law, or by reason of the temporary requisition of the use or occupancy of all or any part of any real property of any person or any part thereof by any Governmental Authority, civil or military, or any settlement in lieu thereof.

“ Change of Control ”: (a) at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, 35% or more of the ordinary voting power for the election of directors of the US Borrower (determined on a fully diluted basis); (b) at any time, the board of directors of the US Borrower shall cease to consist of a majority of Continuing Directors; or (c) at any time, the US Borrower shall cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of each of the BVI Borrower and NetLogic Caymans, in each case free and clear of all Liens (except Liens created by the Security Documents).

“ Closing Date ”: the date on which the conditions precedent set forth in Section 5.1 shall have been satisfied, which date shall be not later than September 30, 2009.

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

 

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

“ Collateral Information Certificate ”: the Collateral Information Certificate to be executed and delivered by the US Borrower and each other Loan Party, substantially in the form of Exhibit H.

“ Commitment ”: as to any Lender, the sum of the Term Commitment, the L/C Commitment (which is a sublimit of Revolving Commitment) and the Revolving Commitment of such Lender.

“ Commitment Fee Rate ”: the rate per annum set forth under the relevant column heading below:

 

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

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

“ Consolidated Capital Expenditures ”: for any period, with respect to any Person, the aggregate of all expenditures (whether paid in cash or other consideration or accrued as a liability and including that portion of Capital Lease Obligations which is capitalized on the consolidated balance sheet of the Group Members) by such Person and its Subsidiaries during such period for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that, in conformity with GAAP, are included in “additions to property, plant or equipment” or comparable items reflected in the consolidated statement of cash flows of such Person and its Subsidiaries.

“ Consolidated Current Liabilities ”: at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the US Borrower and its Subsidiaries at such date, except for accrued liabilities representing amounts payable solely in common stock to be issued pursuant to any earn-out provision contained in the RMI Acquisition Documents.

“ Consolidated EBITDA ”: means, for any period, (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Net Income, plus (b) Consolidated Interest Expense, plus (c) provisions for taxes based on income, plus (d) total depreciation expense, plus (e) total

 

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amortization expense, plus (f) non-cash stock compensation expense and other non-cash items reducing Consolidated Net Income (excluding any such non-cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or amortization of a prepaid cash item that was paid in a prior period), plus (g) transaction expenses related to the Specified Acquisitions and the execution, delivery and closing of this Agreement, provided , that such expenses will be added back only to the extent that they do not exceed $3,000,000 in the aggregate, minus (ii) the sum, without duplication, of the amounts for such period of other non-cash items increasing Consolidated Net Income for such period (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period).

“ Consolidated Fixed Charge Coverage Ratio ”: for any period, the ratio of (a) Consolidated EBITDA for such period minus Consolidated Capital Expenditures (excluding the principal amount funded with Indebtedness permitted hereunder) incurred in connection with such expenditures) to (b) Consolidated Fixed Charges for such period.

“ Consolidated Fixed Charges ”: for any period ending on any determination date (the “ determination date ”), the sum (without duplication) of (a) Consolidated Interest Expense for such period, (b) scheduled payments made during those fiscal quarters of the US Borrower ending during the fiscal year in which the determination date occurs on account of principal of Indebtedness of the US Borrower and its Subsidiaries (including scheduled principal payments in respect of the Term Loans), and (c) all cash payments in respect of income taxes made during such period (net of any cash refund in respect of income taxes actually received during such period).

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

“ Consolidated Leverage Ratio ”: as at the last day of any period, the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for such period.

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

 

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“ Consolidated Quick Assets ”: at any date, all unrestricted cash and Cash Equivalents plus Accounts on a consolidated balance sheet of the US Borrower and its Subsidiaries at such date.

“ Consolidated Quick Ratio ”: as at the last day of any period, the ratio of (a) Consolidated Quick Assets on such day to (b) Consolidated Current Liabilities for such period.

“ Consolidated Total Debt ”: at any date, the aggregate principal amount of all Indebtedness of the US Borrower and its consolidated Subsidiaries at such date, determined on a consolidated basis in accordance with GAAP, but excluding any liabilities referred to in clause (f) of the definition of “ Indebtedness ”.

“ Continuing Directors ”: the directors of the US Borrower on the Effective Date, and each other director, if, in each case, such other director’s nomination for election to the board of directors of the US Borrower is recommended (without the recommendation of any competing nominee) by at least 50.1% of the then Continuing Directors.

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

“ Default ”: any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

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

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

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

“ Effective Date ”: June 19, 2009.

“ Eligible Assignee ”: any commercial bank, investment or mutual fund or other financial institution having combined capital and surplus of not less than $250,000,000 that extends credit or buys loans as one of its primary businesses and are regulated by the Federal Reserve Bank, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation or the Office of Thrift Supervision. For the avoidance of doubt, neither the US Borrower nor any Affiliate of the US Borrower shall be an “ Eligible Assignee .”

 

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“ Environmental Laws ”: any and all foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time hereafter be in effect.

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

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

“ Eurodollar Base Rate ”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined by reference to the British Bankers’ Association Interest Settlement Rates for deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period in Dollars, determined as of approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the beginning of such Interest Period (as set forth by Bloomberg Information Service or any successor thereto or any other service selected by the Administrative Agent which has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates), rounded to the nearest one-sixteenth of a percent (1/16%); provided , that in no event shall the Eurodollar Base Rate be deemed to be less than 1.50%. In the event that the rate referenced in the preceding sentence is not available, the “Eurodollar Base Rate” shall be determined by reference to the rate per annum equal to the offered quotation rate to first class banks in the London interbank market by SVB for deposits (for delivery on the first day of the relevant Interest Period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loan of the Administrative Agent, in its capacity as a Lender, for which the Eurodollar Base Rate is then being determined with maturities comparable to such period as of approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the beginning of such Interest Period.

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

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

 

 

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“ Eurodollar Tranche ”: the collective reference to Eurodollar Loans under a particular Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

“ Event of Default ”: as defined in Section 8.

“ Facility ”: each of (a) the Term Facility, (b) the L/C Facility (which is a subfacility of the Revolving Facility) and (c) the Revolving Facility.

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

“ Fee Letter ” means the letter agreement dated May 21, 2009, by and between the US Borrower and Administrative Agent.

“ Foreign Currency ”: means lawful money of a country other than the United States.

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

“ Funding Office ”: the Revolving Loan Funding Office or the Term Loan Funding Office, as the context requires.

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

 

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

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

“ Group Members ”: the collective reference to the US Borrower and its Subsidiaries.

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

“ Guarantors ”: the collective reference to the BVI Guarantors and the US Guarantors.

“ IDT Acquisition ”: as defined in the recitals.

“ IDT Acquisition Documents ”: collectively, the IDT Agreement and all schedules, exhibits and annexes thereto and all material side letters and material agreements affecting the terms thereof or entered into in connection therewith.

“ IDT Agreement ”: as defined in the recitals.

 

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“ Immaterial Subsidiary ”: at any date of determination, any Subsidiary of the US Borrower (other than the BVI Borrower) designated by the US Borrower in writing that had assets representing 10% or less of the US Borrower’s consolidated total assets determined in accordance with GAAP, and generated less than 10% of the US Borrower’s consolidated total revenues determined in accordance with GAAP for the four quarters ending on the last day of the most recent period for which financial statements have been delivered after the Effective Date pursuant to Section 6.1(b) or, if such date of determination is prior to the first delivery date pursuant to Section 6.1(b), for the fiscal quarter ended on (or, in the case of revenues, for the four quarters ending on) March 31, 2009; provided that all Subsidiaries that are individually “Immaterial Subsidiaries” shall not have aggregate consolidated total assets that would represent 15% or more of the US Borrower’s consolidated total assets as of such date or generated 15% or more of the US Borrower’s consolidated total revenues for such four fiscal quarters, in each case determined in accordance with GAAP; provided , further , that in no event shall NetLogic Caymans be deemed to be an Immaterial Subsidiary.

“ Indebtedness ”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations and all Synthetic Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under or in respect of acceptances, letters of credit, surety bonds or similar arrangements, (g) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (f) above, (h) all obligations of the kind referred to in clauses (a) through (g) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, and (i) all obligations of such Person in respect of Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.

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

“ Insolvent ”: pertaining to a condition of Insolvency.

“ Intellectual Property ”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

 

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“ Interest Payment Date ”: (a) as to any ABR Loan (including any Swingline Loan), the first Business Day of each calendar quarter to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof (or, if such date is not a Business Day, the Business Day next succeeding such date), after the first day of such Interest Period and the last day of such Interest Period, and (d) as to any Loan (other than any Revolving Loan that is an ABR Loan and any Swingline Loan), the date of any repayment or prepayment made in respect thereof.

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

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

(ii) the Borrower may not select an Interest Period under a particular Facility that would extend beyond the Termination Date;

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

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

“ Interest Rate Agreement ” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is (i) for the purpose of hedging the interest rate exposure associated with Borrower’s and its Subsidiaries’ operations, (ii) approved by Administrative Agent, and (iii) not for speculative purposes.

 

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“ Inventory ” means all “inventory,” as such term is defined in the Code, now owned or hereafter acquired by any Loan Party, wherever located, and in any event including inventory, merchandise, goods and other personal property that are held by or on behalf of any Loan Party for sale or lease or are furnished or are to be furnished under a contract of service, or that constitute raw materials, work in process, finished goods, returned goods, or materials or supplies of any kind used or consumed or to be used or consumed in such Loan Party’s business or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.

“ Investments ”: as defined in Section 7.8.

“ Issuing Lender ”: as the context may require, (a) SVB or any affiliate thereof, in its capacity as issuer of any Letter of Credit, and (b) any other Lender that may become an Issuing Lender pursuant to Section 3.10 or 3.11, with respect to Letters of Credit issued by such Lender. The Issuing Lender may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Lender or other financial institutions, in which case the term “Issuing Lender” shall include any such Affiliate or other financial institution with respect to Letters of Credit issued by such Affiliate or other financial institution.

“ Issuing Lender Fees ”: as defined in Section 3.3(a).

“ L/C Commitment ”: as to any L/C Lender, the obligation of such L/C Lender, if any, to purchase an undivided interest in the Issuing Lenders’ obligations and rights under and in respect of each Letter of Credit (including to make payments with respect to draws made under any Letter of Credit pursuant to Section 3.5(b)) in an aggregate principal amount not to exceed the amount set forth under the heading “L/C Commitment” opposite such L/C Lender’s name on Schedule 1.1A (as may be amended and restated pursuant to this Agreement) or in the Assignment and Assumption pursuant to which such L/C Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The L/C Commitment is a sublimit of the Swingline Commitment and the aggregate L/C Commitment shall not exceed the Swingline Commitment at any time.

“ L/C Disbursements ”: a payment or disbursement made by the Issuing Lender pursuant to a Letter of Credit.

“ L/C Exposure ”: at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time and (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time. The L/C Exposure of any L/C Lender at any time shall equal its L/C Percentage of the aggregate L/C Exposure at such time.

“ L/C Facility ”: the L/C Commitments and the extensions of credit made thereunder.

“ L/C Fee Payment Date ”: as defined in Section 3.3(a).

“ L/C Lender ”: a Lender with an L/C Commitment.

 

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“ L/C Percentage ”: as to any L/C Lender at any time, the percentage of the Total L/C Commitments represented by such L/C Lender’s L/C Commitment.

“ Lenders ”: as defined in the preamble hereto; provided that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include any Issuing Lender.

“ Letter of Credit ”: as defined in Section 3.1(a).

“ Letter of Credit Availability Period ”: the period from and including the Closing Date to but excluding the Letter of Credit Maturity Date.

“ Letter of Credit Maturity Date ”: the Termination Date.

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

“ Liquidity ”: unrestricted cash and Cash Equivalents held by US Borrower.

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

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

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

“ Majority Revolving Lenders” : at any time, holders of more than 50% (in the aggregate) of the Total Revolving Extensions of Credit (including, without duplication, any L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time) (or, prior to any termination of the Revolving Commitments, holders of more than 50% (in the aggregate) of the Total Revolving Commitments (including, without duplication, the L/C Commitments)); provided that if at such time there is more than one holder of Total Revolving Extensions of Credit or Revolving Commitments, then the Majority Revolving Lenders shall be comprised of at least two such holders.

“ Majority Term Lenders ”: at any time, Term Lenders having Term Loans and unused Term Commitments representing more than 50% (in the aggregate) of the sum of all Term Loans outstanding and unused Term Commitments at such time; provided that if at such time there is more than one Term Lender having Term Loans and unused Term Commitments, then the Majority Term Lenders shall be comprised of at least two Term Lenders.

“ Material Adverse Effect ”: (a) a material adverse change in, or a material adverse effect on, the operations, business, assets, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the US Borrower and its subsidiaries, taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any loan documentation, or of the ability of any Loan Party to perform its obligations under any loan documentation to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any loan documentation to which it is a party.

 

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“ Material Subsidiary ”: any Subsidiary that is not an Immaterial Subsidiary.

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

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

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

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

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

“ NetLogic Caymans ”: NetLogic Microsystems Caymans Limited, a Cayman Islands exempted company and Wholly Owned Subsidiary of US Borrower.

“ Non-Excluded Taxes ”: as defined in Section 2.19(a).

“ Non-U.S. Lender ”: as defined in Section 2.19(d).

“ Note ”: a Term Loan Note, a Revolving Loan Note or a Swingline Loan Note.

“ Obligations ”: collectively, the US Obligations and the BVI Obligations.

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

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

 

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

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

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

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

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

“ Pro Forma Financial Statements ”: balance sheets, income statements and cash flow statements prepared by the US Borrower and its consolidated subsidiaries that give effect (as if such events had occurred on such date) to (i) the consummation of the applicable Specified Acquisition(s), (ii) the Loans to be made on the Closing Date or any subsequent Borrowing Date, as applicable, and the use of proceeds thereof and (iii) the payment of fees and expenses in connection with the foregoing, in each case prepared for (y) the most recently ended fiscal quarter as if such transactions had occurred on such date and (z) on a quarterly basis through the first full fiscal year after the Closing Date or subsequent Borrowing Date, as applicable, and on an annual basis for each fiscal year thereafter through the Termination Date, in each case demonstrating pro forma compliance with the covenants set forth in Section 7.1.

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

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

“ Qualified Counterparty ”: with respect to any Specified Swap Agreement, any counterparty thereto that, at the time such Specified Swap Agreement was entered into or as of the Effective Date, was the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender.

“ Recovery Event ”: any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member.

“ Refunded Swingline Loans ”: as defined in Section 2.7.

“ Register ”: the Revolving Loan Register or the Term Loan Register, as the context requires.

 

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

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

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

“ Reportable Event ”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

“ Required Lenders ”: at any time, holders of more than 50% (in the aggregate) of the sum of (i) the aggregate unpaid principal amount of the Term Loans then outstanding, and (ii) the Total Revolving Commitments (including, without duplication, the L/C Commitments) then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding; provided that if at such time there is more than one holder of Total Revolving Commitments or Total Revolving Extensions of Credit, then the Required Lenders shall be comprised of at least two such holders.

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

“ Responsible Officer ”: the chief executive officer, president, vice president, chief financial officer, treasurer, controller or comptroller of the applicable Borrower, but in any event, with respect to financial matters, the chief financial officer, treasurer, controller or comptroller of the applicable Borrower.

“ Restricted Payments ”: as defined in Section 7.6.

“ Revolving Commitment ”: as to any Lender, the obligation of such Lender, if any, to make Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate principal amount not to exceed the amount set forth under the heading “Revolving Commitment” opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof (including in connection with assignments permitted hereunder). The original amount of the Total Revolving Commitments is $25,000,000. The L/C Commitment is a sublimit of the Revolving Commitments.

“ Revolving Commitment Period ”: the period from and including the Closing Date to the Termination Date.

 

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“ Revolving Extensions of Credit ”: as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding, (b) the aggregate undrawn amount of all outstanding Letters of Credit at such time and the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time and (c) such Lender’s Revolving Percentage of the aggregate principal amount of Swingline Loans then outstanding.

“ Revolving Facility ”: the Revolving Commitments and the extensions of credit made thereunder.

“ Revolving Lender ”: each Lender that has a Revolving Commitment or that holds Revolving Loans.

“ Revolving Loan Conversion ”: as defined in Section 3.5(b).

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

“ Revolving Loan Note ”: a promissory note in the form of Exhibit G-1, as it may be amended, supplemented or otherwise modified from time to time.

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

“ Revolving Loans ”: as defined in Section 2.4(a).

“ Revolving Percentage ”: as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the aggregate principal amount of the Revolving Loans then outstanding; provided that in the event that the Revolving Loans are paid in full prior to the reduction to zero of the Total Revolving Extensions of Credit, the Revolving Percentages shall be determined in a manner designed to ensure that the other outstanding Revolving Extensions of Credit shall be held by the Revolving Lenders on a comparable basis.

“ RMI ”: as defined in the recitals.

“ RMI Acquisition ”: as defined in the recitals.

“ RMI Acquisition Documents ”: collectively, the RMI Merger Agreement, and all schedules, exhibits and annexes thereto and all material side letters and material agreements affecting or relating to the terms thereof or entered into in connection therewith.

“ RMI Bridge Financing ”: as defined in the recitals.

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

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

 

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

“ Secured Parties ”: the collective reference to the Administrative Agent, the Lenders (including any Issuing Lender in its capacity as Issuing Lender) and any Qualified Counterparties.

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

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

“ Share Charges ”: the collective reference to (i) the Share Charge, dated as of the Closing Date, by and among the US Borrower, NetLogic Caymans and the Administrative Agent, in support of the BVI Obligations, (ii) the Second Priority Share Charge, dated as of the Closing Date, by and among the US Borrower, NetLogic Caymans and the Administrative Agent, in support of the BVI Obligations, (iii) the Share Charge, dated as of the Closing Date, by and among the US Borrower, NetLogic Caymans and the Administrative Agent, in support of the US Obligations, and (iv) the Share Charge, dated as of the Closing Date, by and among NetLogic Caymans, the BVI Borrower and the Administrative Agent, in support of the BVI Obligations.

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

“ Solvent ”: when used with respect to any Person, means that, as of any date of determination, (a) the amount of the “fair value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the “present fair saleable value” of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

 

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“ Specified Acquisition ” and “ Specified Acquisitions ”: as defined in the recitals.

“ Specified Swap Agreement ”: any Swap Agreement entered into by the US Borrower and any Qualified Counterparty (or any Person who was a Qualified Counterparty as of the Effective Date or as of the date such Swap Agreement was entered into) in respect of interest rates to the extent permitted under Section 7.12.

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

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

“ SVB ”: as defined in the preamble hereto.

“ Swap Agreement ”: any agreement with respect to any swap, hedge, forward, future or derivative transaction or option or similar agreement (including without limitation, any Interest Rate Agreement) involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the US Borrower and its Subsidiaries shall be a “Swap Agreement”.

“ Swingline Commitment ”: the obligation of the Swingline Lender to make Swingline Loans pursuant to Section 2.6 in an aggregate principal amount at any one time outstanding not to exceed $10,000,000.

“ Swingline Lender ”: SVB, in its capacity as the lender of Swingline Loans.

“ Swingline Loan Note ”: a promissory note in the form of Exhibit G-2, as it may be amended, supplemented or otherwise modified from time to time.

“ Swingline Loans ”: as defined in Section 2.6(a).

“ Swingline Participation Amount ”: as defined in Section 2.7(c).

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

 

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“ Term Commitment ”: as to any Lender, the obligation of such Lender to make a Term Loan to the applicable Borrower on the Closing Date in a principal amount equal to the amount set forth under the heading “Term Commitment” opposite such Lender’s name on Schedule 1.1A. The original aggregate amount of the Term Commitments on the Effective Date is $30,000,000, consisting of $15,000,000 in respect of Tranche A Term Loans and $15,000,000 in respect of Tranche B Term Loans, which in each case shall be permanently reduced to $0 on the earliest of (i) the Closing Date (concurrent with the extension of Term Loans) , (ii) September 30, 2009 or (iii) the date of the termination of the Term Commitment pursuant to Section 2.9(b), in each case if the Tranche A Term Loans and Tranche B Term Loans are not drawn on or prior to such earliest date.

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

“ Term Lenders ”: the Tranche A Term Lenders and the Tranche B Term Lenders, collectively.

“ Term Loan ”: the Tranche A Term Loan and the Tranche B Term Loan, collectively.

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

“ Term Loan Maturity Date ”: June 19, 2012.

“ Term Loan Note ”: a promissory note in the form of Exhibit G-3, as it may be amended, supplemented or otherwise modified from time to time.

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

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

“ Termination Date ”: June 19, 2012.

“ Total L/C Commitments ”: at any time, the sum of all L/C Commitments at such time, as the same may be reduced from time to time pursuant to Section 2.9 or 3.5(b). The initial amount of the L/C Commitments on the Effective Date is $10,000,000.

“ Total Revolving Commitments ”: at any time, the aggregate amount of the Revolving Commitments then in effect.

 

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“ Total Revolving Extensions of Credit ”: at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders outstanding at such time.

“ Tranche A Term Lender ”: each Lender that has a Term Commitment with respect to a Tranche A Term Loan or that holds a Tranche A Term Loan.

“ Tranche A Term Loan ”: the term loan made by the Tranche A Term Lenders pursuant to clause (i) of the first sentence of Section 2.1, in an amount equal to $15,000,000.

“ Tranche B Term Lender ”: each Lender that has a Term Commitment with respect to a Tranche B Term Loan or that holds a Tranche B Term Loan

“ Tranche B Term Loan ”: the term loan made by the Tranche B Term Lenders pursuant to clause (ii) of the first sentence of Section 2.1, in an amount equal to $15,000,000.

“ Transferee ”: any Eligible Assignee or Participant.

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

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

“ United States ”: the United States of America.

“ US Borrower ”: as defined in the preamble hereto.

“ US Guarantee and Collateral Agreement ”: the Guarantee and Collateral Agreement to be executed and delivered by the US Borrower and each other US Loan Party in respect of the US Obligations, substantially in the form of Exhibit A-1.

“ US Guarantor ”: each Material Subsidiary of the US Borrower that is organized in the United States.

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

 

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“ Wholly Owned Subsidiary ”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

“ Wholly Owned BVI Subsidiary Guarantor ”: any BVI Guarantor that is a Wholly Owned Subsidiary of the BVI Borrower.

“ Wholly Owned US Subsidiary Guarantor ”: any US Guarantor that is a Wholly Owned Subsidiary of the US Borrower.

1.2 Other Definitional Provisions.

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

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

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

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

SECTION 2

AMOUNT AND TERMS OF COMMITMENTS

2.1 Term Commitments . Subject to the terms and conditions hereof, (i) each Tranche A Term Lender severally agrees to make a Tranche A Term Loan to the US Borrower on the Closing Date and (ii) each Tranche B Term Lender severally agrees to make a Tranche B Term Loan to the BVI Borrower on the Closing Date, in each case in an amount equal to the amount of the Term Commitment of such Lender. The Term Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the applicable Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.10.

 

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2.2 Procedure for Term Loan Borrowing . The applicable Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 10:00 A.M., Pacific time, one Business Day prior to the anticipated Closing Date (with originals to follow within 3 days)) requesting that the Term Lenders make the Term Loans on the Closing Date and specifying the amount to be borrowed. The Term Loans made on the Closing Date shall initially be ABR Loans and, unless otherwise agreed by the Administrative Agent in its sole discretion, no Term Loan may be converted into or continued as a Eurodollar Loan having an Interest Period in excess of one month prior to the date that is 30 days after the Closing Date. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Lender thereof. Not later than 12:00 P.M., Pacific time, on the Closing Date each Term Lender shall make available to the Administrative Agent at the Term Loan Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. The Administrative Agent shall credit the account of the applicable Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Lenders in immediately available funds.

2.3 Repayment of Term Loans .

(a) Beginning on September 30, 2009, the Term Loans of each Term Lender shall be repaid in consecutive quarterly installments, each of which shall be in an amount equal to such Lender’s Term Percentage multiplied by $2,500,000 (allocated equally to the Tranche A Term Loan and the Tranche B Term Loan); provided , however , that if the Closing Date occurs on or after August 16, 2009, the first such installment shall not be due until December 31, 2009, and the amount of each consecutive quarterly installment on and after such date shall be an amount equal to such Lender’s Term Percentage multiplied by $2,727,272.73.

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

2.4 Revolving Commitments.

(a) Subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans (“ Revolving Loans ”) to the US Borrower from time to time during the Revolving Commitment Period in an aggregate principal amount at any one time outstanding which, when added to such Revolving Lender’s Revolving Percentage of the aggregate outstanding amount of the Swingline Loans, and the aggregate undrawn amount of all outstanding Letters of Credit and the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans, incurred on behalf of US Borrower and owing to such Lender, does not exceed the amount of such Lender’s Revolving Commitment; furthermore, such aggregate obligations for all Revolving Lenders shall not exceed the Total Revolving Commitment. During the Revolving Commitment Period the US Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the US Borrower and notified to the Administrative Agent in accordance with Sections 2.5 and 2.12.

 

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(b) The US Borrower shall repay all outstanding Revolving Loans on the Termination Date.

2.5 Procedure for Revolving Loan Borrowing . The US Borrower may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day; provided that the US Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 10:00 A.M., Pacific time, (a) three Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date, in the case of ABR Loans (in each case, with originals to follow within 3 Business Days)) ( provided that any such notice of a borrowing of ABR Loans under the Revolving Facility to finance payments under Section 3.5(a) may be given not later than 10:00 A.M., Pacific time, on the date of the proposed borrowing), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date, (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor, and (iv) instructions for remittance of the applicable Loans to be borrowed. Unless otherwise agreed by the Administrative Agent in its sole discretion, no Revolving Loan may be made as, converted into or continued as a Eurodollar Loan having an Interest Period in excess of one month prior to the date that is 30 days after the Closing Date. Each borrowing under the Revolving Commitments shall be in an amount equal to in the case of ABR Loans, $1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then aggregate Available Revolving Commitments are less than $1,000,000, such lesser amount; provided , that the Swingline Lender may request, on behalf of the US Borrower, borrowings under the Revolving Commitments that are ABR Loans in other amounts pursuant to Section 2.7. Upon receipt of any such notice from the US Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the US Borrower at the Revolving Loan Funding Office prior to 12:00 P.M., Pacific time, on the Borrowing Date requested by the US Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the US Borrower by the Administrative Agent crediting such account as is designated in writing to the Administrative Agent by the US Borrower with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

2.6 Swingline Commitment . (a) Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit otherwise available to the US Borrower under the Revolving Commitments from time to time during the Revolving Commitment Period by making swing line loans (“ Swingline Loans ”) to the US Borrower; provided that (i) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in effect and (ii) the US Borrower shall not request, and the Swingline Lender shall not make, any Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Revolving Commitments would be less than zero. During the Revolving Commitment Period, the US Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swingline Loans shall be ABR Loans only.

(a) The US Borrower shall repay to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the Termination Date.

 

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2.7 Procedure for Swingline Borrowing; Refunding of Swingline Loans. (a)  Whenever the US Borrower desires that the Swingline Lender make Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be received by the Swingline Lender not later than 12 Noon, Pacific time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Revolving Commitment Period). Each borrowing under the Swingline Commitment shall be in an amount equal to $1,000,000 or a whole multiple of $100,000 in excess thereof. Promptly thereafter, on the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall make available to the US Borrower an amount in immediately available funds equal to the amount of the Swingline Loan to be made by depositing such amount in the account designated in writing to the Administrative Agent by the US Borrower.

(b) The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the US Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), on one Business Day’s notice given by the Swingline Lender no later than 12:00 Noon, Pacific time, request each Revolving Lender to make, and each Revolving Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving Lender’s Revolving Percentage of the aggregate amount of the Swingline Loans (the “ Refunded Swingline Loans ”) outstanding on the date of such notice, to repay the Swingline Lender. Each Revolving Lender shall make the amount of such Revolving Loan available to the Administrative Agent at the Funding Office in immediately available funds, not later than 10:00 A.M., Pacific time, one Business Day after the date of such notice. The proceeds of such Revolving Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swingline Loans. The US Borrower irrevocably authorizes the Swingline Lender to charge the US Borrower’s accounts with the Administrative Agent (up to the amount available in each such account) in order to immediately pay the amount of such Refunded Swingline Loans to the extent amounts received from the Revolving Lenders are not sufficient to repay in full such Refunded Swingline Loans.

(c) If prior to the time a Revolving Loan has been made pursuant to Section 2.7(b), one of the events described in Section 8(f) shall have occurred and be continuing with respect to the US Borrower or if for any other reason, as determined by the Swingline Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 2.7(b), each Revolving Lender shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 2.7(b) or on the date requested by the Swingline Lender (with at least one Business Day’s notice to the Revolving Lenders), purchase for cash an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender an amount (the “ Swingline Participation Amount” ) equal to (i) such Revolving Lender’s Revolving Percentage times (ii) the sum of the aggregate principal amount of Swingline Loans then outstanding that were to have been repaid with such Revolving Loans.

 

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(d) Whenever, at any time after the Swingline Lender has received from any Revolving Lender such Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender’s pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due ) ; provided , however , that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

(e) Each Revolving Lender’s obligation to make the Loans referred to in Section 2.7(b) and to purchase participating interests pursuant to Section 2.7(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Revolving Lender or the US Borrower may have against the Swingline Lender, the US Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 6, (iii) any adverse change in the condition (financial or otherwise) of the US Borrower, (iv) any breach of this Agreement or any other Loan Document by the US Borrower, any other Loan Party or any other Revolving Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

2.8 Commitment Fees, etc.

(a) As compensation for the Revolving Commitment, the US Borrower shall pay the Administrative Agent for the benefit of Revolving Lenders, in arrears, from and after the Effective Date on the first Business Day of each calendar quarter prior to the earlier of the Termination Date and any date when the Revolving Commitment has been terminated pursuant to Section 2.9(a) and on the Termination Date (or such earlier termination date), a fee for the US Borrower’s non-use of available funds in an amount equal to the Commitment Fee Rate per annum (calculated on the basis of a 360 day year for actual days elapsed) multiplied by the difference between (x) the Revolving Commitment (as it may be reduced from time to time) and (y) the average for the period of the daily closing balance of the Revolving Loan outstanding (excluding the sum of the aggregate undrawn amount of all outstanding Letters of Credit at such time plus the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans) during the period for which such fee is due.

(b) As compensation for the Term Commitment, the Borrowers shall pay the Administrative Agent for the benefit of Term Lenders, in arrears, from and after the Effective Date on the first Business Day of each calendar quarter prior to the earliest of (a) September 30, 2009, (b) the Closing Date or (c) the date of the termination of the Term Commitment pursuant to Section 2.9(b), and on September 30, 2009, the Closing Date or such earlier termination date,

 

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a fee for each Borrower’s non-use of available funds in an amount equal to the Commitment Fee Rate per annum (calculated on the basis of a 360 day year for actual days elapsed) multiplied by the Term Commitment.

(c) The US Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the dates as set forth in the Fee Letter with the Administrative Agent and to perform any other obligations contained therein, it being understood that each of the “upfront fee” and the “administrative agent fee” described therein shall be due and payable on the Effective Date.

2.9 Termination or Reduction of Commitments.

(a) The US Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments; provided that no such termination or reduction of Revolving Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Total Revolving Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Revolving Commitments then in effect. The US Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the L/C Commitments or, from time to time, to reduce the amount of the L/C Commitments; provided that no such termination or reduction of L/C Commitments shall be permitted if, after giving effect thereto, the Total L/C Commitments shall be reduced to an amount that would result in the aggregate L/C Exposure exceeding the Total L/C Commitments (as so reduced). Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the L/C Commitments then in effect.

(b) The Borrowers shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate all (but not less than all) of the Term Commitment.

2.10 Optional Prepayments . The US Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Administrative Agent no later than 10:00 A.M., Pacific time, three Business Days prior thereto, in the case of Eurodollar Loans, and no later than 10:00 A.M., Pacific time, one Business Day prior thereto, in the case of ABR Loans, which notice shall specify the date and amount of prepayment; provided , that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the US Borrower shall also pay any amounts owing pursuant to Section 2.20; provided further that if such notice of prepayment indicates that such prepayment is to be funded with the proceeds of a refinancing, such notice of prepayment may be revoked if the financing is not consummated. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans and

 

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Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof. Partial prepayments of Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole multiple thereof.

2.11 [intentionally omitted].

2.12 Conversion and Continuation Options.

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

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

2.13 Limitations on Eurodollar Tranches . Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $100,000 in excess thereof and (b) no more than seven Eurodollar Tranches shall be outstanding at any one time.

2.14 Interest Rates and Payment Dates.

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

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

 

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(c) After the occurrence of an Event of Default, at the request of the Required Lenders, all outstanding Loans shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2%; provided that no such request shall be required if all or a portion of the principal amount of any Loan shall not be paid when due (whether at the stated maturity, by acceleration or otherwise).

(d) Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to Section 2.14(c) shall be payable from time to time on demand.

2.15 Computation of Interest and Fees.

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