SECURITIES PURCHASE AGREEMENT

Purchase and Sale Agreement

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POWER ONE INC | BANK OF NEW YORK MELLON TRUST COMPANY, N.A. | SILVER LAKE GROUP, LLC | SILVER LAKE SUMERU FUND, LP | SLTA SUMERU (GP), LLC

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Title: SECURITIES PURCHASE AGREEMENT
Governing Law: Delaware Date: 4/28/2009
Industry: Electronic Instr. and Controls Law Firm: Gibson Dunn;Simpson Thacher Sector: Technology

SECURITIES PURCHASE AGREEMENT, Parties: power one inc , bank of new york mellon trust company n.a. , silver lake group llc , silver lake sumeru fund lp , slta sumeru (gp) llc

Exhibit 10.1

Execution Copy

SECURITIES PURCHASE AGREEMENT

by and among

POWER-ONE, INC.,

SILVER LAKE SUMERU FUND, L.P.,

and

SILVER LAKE TECHNOLOGY INVESTORS SUMERU, L.P.

April 23, 2009

TABLE OF CONTENTS

1.	Definitions		2

2.	Purchase and Sale		11
	2.1	Purchase and Sale	11
	2.2	Purchase Price Allocation	12
	2.3	Closing	12

3.	Representations and Warranties of the Company		13
	3.1	Organization and Power	13
	3.2	Capitalization	13
	3.3	Authorization	15
	3.4	Valid Issuance	15
	3.5	No Conflict	15
	3.6	Consents	16
	3.7	Permits	16
	3.8	SEC Reports; Financial Statements	17
	3.9	Litigation	18
	3.10	Absence of Certain Changes	18
	3.11	Compliance with Law	19
	3.12	Intellectual Property	19
	3.13	Employee Benefits	20
	3.14	Labor Relations	22
	3.15	Taxes	22
	3.16	NASDAQ	23
	3.17	Investment Company Act	23
	3.18	Brokers	23
	3.19	Subsidiaries	23
	3.20	Environmental Matters	24
	3.21	Assets	25
	3.22	Insurance	25
	3.23	Material Contracts	25
	3.24	Rights Agreement	26
	3.25	Anti-Takeover Statutes	26

4.	Representations and Warranties of Each Purchaser		26
	4.1	Organization	26
	4.2	Authorization	26
	4.3	No Conflict	27
	4.4	Consents	27
	4.5	Purchasers’ Financing	28
	4.6	Brokers	28
	4.7	Purchase Entirely for Own Account	28
	4.8	Investor Status	28
	4.9	Securities Not Registered	28
	4.10	Litigation	28

	4.11	Investment Company Act	29

5.	Covenants		29
	5.1	Interim Conduct of the Business	29
	5.2	Antitrust Approval	30
	5.3	Shares Issuable Upon Conversion	30
	5.4	PORTAL and CUSIPs	31
	5.5	Commercially Reasonable Efforts; Further Assurances; Notification	31
	5.6	Standstill	32
	5.7	Preemptive Rights	34
	5.8	Indemnification; Freedom to Pursue Opportunity	36

6.	Conditions Precedent		36
	6.1	Conditions to Each Party’s Obligation to Consummate the Closing	36
	6.2	Conditions to the Obligation of the Purchasers to Consummate the Closing	36
	6.3	Conditions to the Obligation of the Company to Consummate the Closing	37

7.	Governance; Information Rights		38
	7.1	Board Representation	38
	7.2	Committees	41
	7.3	D&O Insurance; Indemnification Agreements	42
	7.4	Approval Rights	42
	7.5	Board Composition	43
	7.6	Rights Agreement; Charter Amendment	43
	7.7	Information Rights	44
	7.8	VCOC Rights	45
	7.9	Confidentiality	46

8.	Transfers; Redemption		47
	8.1	Transfer Restrictions	47
	8.2	Right to Sell to the Company	48
	8.3	Legends; Securities Act Compliance	49

9.	Termination		50
	9.1	Conditions of Termination	50
	9.2	Effect of Termination	50

10.	Miscellaneous Provisions		50
	10.1	Public Statements or Releases	50
	10.2	Interpretation	51
	10.3	Notices	51
	10.4	Severability	52
	10.5	Governing Law; Jurisdiction; WAIVER OF JURY TRIAL	52
	10.6	Specific Performance	53
	10.7	Waiver	53
	10.8	Fees; Expenses	53

10.9	Assignment	54
10.10	Survival	54
10.11	No Third Party Beneficiaries	54
10.12	Counterparts	54
10.13	Entire Agreement; Amendments	54
10.14	SLS Rights	55
10.15	Discussion Regarding Securities	55
10.16	Time is of the Essence	55
10.17	Exchange Reformation Clause	55
10.18	Investor Securityholder Fundamental Change	56

Annexes

Annex A	Purchasers

Exhibits

Exhibit A	Form of Indenture (including Form of Notes)
Exhibit B	Form of Series A Certificate of Designation
Exhibit C	Form of Warrants
Exhibit D	Form of Registration Rights Agreement
Exhibit E	Form of Supplemental Indenture
Exhibit F	Form of Amended and Restated Rights Agreement
Exhibit G	Series B Junior Preferred Term Sheet
Exhibit H	Series C Junior Preferred Term Sheet
Exhibit I	Form of Pledge Agreement Amendment
Exhibit J	Form of Consent and Purchase Agreement
Exhibit K	Form of Transaction Fee Agreement
Exhibit L	Form of Legal Opinion
Exhibit M	Form of Indemnification Agreement

iii

INDEX OF DEFINED TERMS

8% Notes	1
Affiliate	2
Affiliate Transaction	42
Affiliated Entity	2
Agreement	1
Annual Report	13
Appointed Director	38
Appraisal Firm	12
Approved Stock Plan	2
Approved Transaction	2
Bankruptcy Event	3
Beneficial Ownership	3
Beneficially Own	3
Beneficially Owned	3
Benefit Plans	3
Board	3
Business Day	4
Capitalization Date	13
CEO	49
Certificate of Designation	1
Change	7
Closing	12
Closing Date	12
Code	4
Committee	41
Committee Qualification Requirements	4
Common Shares Outstanding	4
Common Stock	4
Company	1
Company Change in Control Event	33
Company Employees	4
Company Option	4
Company Securities	14
Company Stock Plans	5
Confidential Information	46
Consent	16
Contracts	26
control	5
controlled by	5
controlling	5
Conversion Shares	5
Convertible Preferred Stock	1
DGCL	5
Director	5
Disclosure Schedule	13
Environmental Law	5
ERISA	5
ERISA Affiliate	5, 21
Exchange	5
Exchange Act	5
Financial Statements	17
Foreign Benefit Plan	5
Fundamental Change	6
GAAP	17
Governmental Entity	6
Guarantee Obligation	6
Hazardous Substance	6
HSR Act	6
Incurrence	43
Indebtedness	7
Indenture	1
Independent Director	39
Information Rights Period	7
Intellectual Property	7
Investor Securityholders	7
Junior Certificates of Designation	7
Junior Preferred Stock	7
Knowledge	7
Law	16
Legal Proceeding	7
Liabilities	24
Lien	16
Material Adverse Effect	7
Material Contract	25
Nominated Director	39
Nomination Entitlement Period	38
Nomination Representation Entitlement	8
Notes	1
NYSE	23
Participation Amount	35
Participation Right	34
Participation Rights Notice	34
PB Warrant	8
Permitted Lien	8
Permitted Transferee	9
Person	9
Plan Asset Regulations	9
Pledge Agreement Amendment	37

Preferred Director	9
Preferred Entitlement Period	38
Preferred Representation Entitlement	9
Preferred Stock	13
primary obligor	6
Public Sale	9
Purchase Price	12
Purchased Warrants	1
Purchaser	1
Purchaser Adverse Effect	27
Purchasers	1
Put Closing Date	49
Put Exercise Notice	49
Put Right	49
Put Right Closing	49
Redeeming Sellers	48
Redemption Securities	49
Registered Intellectual Property	7
Registration Rights Agreement	1
Representatives	45
Restricted Period Termination Date	47
Restriction Termination Event	9
Rights	9
Rights Agreement	2
Rights Agreement Amendment	2
Rule 144	28
SEC	9
SEC Reports	17
Securities	12
Securities Act	9
Series B Certificate of Designation	9
Series B Junior Preferred Stock	9
Series B Junior Preferred Term Sheet	9
Series C Certificate of Designation	10
Series C Junior Preferred Stock	9
Series C Junior Preferred Term Sheet	10
Significant Subsidiary	10
SLS Beneficial Ownership Percentage	10
SLS Director Beneficial Ownership Percentage	10
Standstill Period	32
Subsequent Notice	35
Subsidiary	10
Subsidiary Securities	24
Supplemental Indenture	2
Survivor of a Fundamental Change	10
Tax Returns	11
Taxes	11
Third Party	33
Total Current Voting Power	11
Transaction Agreements	11
Transaction Expenses	53
Transaction Fee Agreement	37
Transfer	47
Transferee	11
Treasury Regulation	11
Triggering Event	49
Trustee	11
under common control with	5
VCOC Investor Securityholder	45
Voting Stock	11
Warrants	1

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (this “ Agreement ”), dated as of April 23, 2009, by and among Power-One, Inc., a Delaware corporation (the “ Company ”), Silver Lake Sumeru Fund, L.P. (together with its affiliated successors by merger, consolidation or transfer of all or substantially all assets, “ SLS ”) and Silver Lake Technology Investors Sumeru, L.P. (each, a “ Purchaser ” and collectively, the “ Purchasers ”).

WHEREAS, the Company has authorized the issuance of up to $36,375,000 aggregate principal amount of its Convertible Senior Unsecured Notes due 2019 (the “ Notes ”) to be issued in accordance with the terms and conditions of the Indenture for the Notes substantially in the form attached hereto as Exhibit A (the “ Indenture ”), which Notes shall be convertible into authorized but unissued shares of Common Stock (as defined below);

WHEREAS, the Company has authorized the issuance and sale of 23,625 shares of a new series of Series A Convertible Preferred Stock, par value $.001 per share, of the Company (the “ Convertible Preferred Stock ”), the rights, preferences and privileges of which are to be set forth in a Certificate of Designation substantially in the form attached hereto as Exhibit B (the “ Certificate of Designation ”), which shares of Convertible Preferred Stock shall be convertible into authorized but unissued shares of Common Stock;

WHEREAS, the Company has authorized the issuance of warrants to acquire 8,700,000 shares of Common Stock (all such warrants acquired by the Purchasers, the “ Purchased Warrants ”) in accordance with the terms and conditions substantially in the form attached hereto as Exhibit C (the “ Warrants ”);

WHEREAS, the Company desires to issue and sell to the Purchasers pursuant to this Agreement, and each Purchaser, severally, desires to purchase from the Company, the Securities (as defined below) in such amounts as is set forth opposite its name in Annex A attached hereto;

WHEREAS, the Board (as defined below) has approved the execution, delivery and performance of this Agreement and the other Transaction Agreements and the consummation of the transactions contemplated hereby and thereby in accordance with the DGCL upon the terms and conditions contained herein and therein.

WHEREAS, the Purchasers have approved the execution, delivery and performance of this Agreement and the other Transaction Agreements to which they are a party and the consummation of the transactions contemplated hereby and thereby in accordance with applicable law upon the terms and conditions contained herein and therein;

WHEREAS, as a condition to the consummation of the transactions contemplated hereby, the Company and the Purchasers will enter into the Registration Rights Agreement substantially in the form attached hereto as Exhibit D (the “ Registration Rights Agreement ”) on the Closing Date;

WHEREAS, the Company agreed to purchase, and certain holders of the Company’s 8% Senior Secured Convertible Notes Due 2013 (the “ 8% Notes ”) have agreed to sell, certain of the 8% Notes, which purchase and sale of the

8% Notes is a condition to the Purchasers’ willingness to enter into this Agreement and consummate the transactions contemplated hereby;

WHEREAS, the Company and the holders of at least a majority of the aggregate principal amount of the outstanding 8% Notes have agreed to enter into that certain Supplemental Indenture substantially in the form attached hereto as Exhibit E (the “ Supplemental Indenture ”), the effectiveness of which is a condition to the Purchasers’ willingness to enter into this Agreement and consummate the transactions contemplated hereby;

WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to the willingness of the Purchasers to enter into this Agreement, the Company and American Stock Transfer & Trust Company are amending and restating that certain Rights Agreement, dated as of July 27, 2000, as amended and restated (the “ Rights Agreement ”), substantially in the form attached hereto as Exhibit F (the “ Rights Agreement Amendment ”), so as to, among other things, render the rights issued thereunder inapplicable to this Agreement, the other Transaction Agreements and the transactions contemplated hereby and thereby;

NOW THEREFORE, in consideration of the mutual agreements, representations, warranties and covenants herein contained, the parties hereto agree as follows:

1. Definitions . As used in this Agreement, the following terms shall have the following respective meanings:

“ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person. Notwithstanding the foregoing, (i) the Company, its Subsidiaries and its other controlled Affiliates shall not be considered Affiliates of the Investor Securityholders and (ii) none of the Investor Securityholders shall be considered Affiliates of any portfolio company in which the Investor Securityholders or any of their Affiliated Entities have made a debt or equity investment.

“ Affiliated Entity ” shall mean any investment fund or holding company formed for investment purposes that is primarily managed, advised or serviced by a Purchaser or by an Affiliate of a Purchaser; provided that no portfolio company of any Purchaser or any Affiliated Entity of any Purchaser shall be deemed an Affiliated Entity hereunder.

“ Approved Stock Plan ” means any stock option plan or other equity-based compensation plan of the Company that has been approved by the Board, which provides for the issuance of Company Securities to the directors, officers, employees, agents or consultants of the Company or its Subsidiaries.

“ Approved Transaction ” means any tender offer, exchange offer, merger, consolidation, sale of the Company, reclassification, reorganization, recapitalization or other transaction that either (x) has been approved or recommended by the Board or (y) has not been effectively precluded by operation of the Rights Agreement because either (1) the Board has taken action such that the acquiring person in such transaction would not be an “Acquiring Person” (as defined in the Rights Agreement or its comparable term/provision under any successor or substitute shareholder rights plan) or such that the “Distribution Date” (as defined in the Rights Agreement or its comparable term/provision under any successor or

substitute shareholder rights plan) would not occur in connection with such transaction or the Rights will otherwise not effectively preclude such transaction or (2) an order, injunction or decree has been issued invalidating or enjoining operation of the Rights Agreement in respect of such transaction.

“ Bankruptcy Event ” shall mean with respect to any Person, (a) an event which causes (i) the inability of such Person generally to pay its debts as such debts become due or an admission in writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors; (ii) the filing of any petition or answer by such Person seeking to adjudicate it bankrupt or insolvent, or seeking for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, composition or relief from debt under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking, consenting to or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property; or (iii) corporate or other action taken by such Person to authorize any of the actions set forth above; or (b) without the consent or acquiescence of such Person, (i) an event which causes the entering of an order for relief or approving a petition for relief or reorganization or any other petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation, or the filing of any such petition against such Person, which petition shall not be dismissed within ninety (90) days; or (ii) the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or any substantial part of the property of such Person, which order shall not be dismissed within sixty (60) days.

“ Beneficially Own ,” “ Beneficially Owned ,” or “ Beneficial Ownership ” shall have the meaning set forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act; provided , however , that (i) a Person will be deemed to be the beneficial owner of any security which may be acquired by such Person whether within 60 days or thereafter, upon the conversion, exchange or exercise (without giving effect to any provision governing such security that would limit, reduce or otherwise restrict the conversion, exchange or exercise features of such security) of any rights, options, warrants or similar securities to subscribe for, purchase or otherwise acquire such security and (ii) none of the Investor Securityholders shall be deemed to Beneficially Own any securities owned by their portfolio companies as long as the Investor Securityholders did not directly or indirectly encourage, assist or provide any information to such portfolio company in respect of the acquisition or voting of such securities.

“ Benefit Plans ” shall mean each “employee benefit plan” (within the meaning of Section 3(3) of ERISA), and each stock purchase, stock option, severance, employment, change-in-control, fringe benefit, collective bargaining, bonus, incentive, deferred compensation, employee loan and all other similar employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, under which any Company Employee has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of its Subsidiaries for such Company Employee.

“ Board ” shall mean the Board of Directors of the Company.

“ Business Day ” shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of California or New York or is a day on which banking institutions located in the States of California or New York are authorized or required by Law or other governmental action to close.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended.

“ Committee Qualification Requirements ” shall mean that the Appointed Director or Nominated Director (other than an Independent Director), as the case may be, shall, in the good faith judgment of the Board, meet at all times during such Director’s service on a particular committee of the Board: (i) all independence requirements applicable to companies listed on the primary Exchange on which the Common Stock is then listed for members of the particular committee, (ii) in the case of the Board of Director’s Compensation Committee, be a “non-employee director” (within the meaning of Rule 16b-3 under the Exchange Act) and an “outside director” (within the meaning of Section 162(m) of the Code), and (iii) in the case of the Board of Director’s Audit Committee, satisfy the requirements of NASDAQ Marketplace Rule 5605(c)(2)(A) (or any equivalent rule promulgated by any other primary Exchange on which the Common Stock is then listed) for serving on the Audit Committee.

“ Common Shares Outstanding ” shall mean, at any time, the sum of (i) the number of outstanding shares of Common Stock plus (ii) the number of shares of Common Stock issuable upon the conversion of outstanding shares of Convertible Preferred Stock and Junior Preferred Stock (in each case, without giving effect to any provision governing any such security that would limit, reduce or otherwise restrict the conversion, exchange or exercise features of such security) plus (iii) the number of shares of Common Stock issuable upon the conversion of all outstanding Notes (without giving effect to any provision governing such security that would limit, reduce or otherwise restrict the conversion, exchange or exercise features of such security) plus (iv) the number of shares of Common Stock issuable upon the exercise of the Warrants (without giving effect to any provision governing such security that would limit, reduce or otherwise restrict the conversion, exchange or exercise features of such security). For purposes of determining compliance with Section 5.6 in connection with any acquisition of Beneficial Ownership of shares of Common Stock, the Investor Securityholders and their Affiliates will be entitled to rely on (and the Common Shares Outstanding will be calculated by reference to) the information set forth in the most recent report on Form 10-Q or 10-K filed with the SEC unless the Company has provided SLS more recent information regarding the components of the Common Shares Outstanding.

“ Common Stock ” shall mean the Common Stock, par value $0.001 per share, of the Company, together with the Rights appurtenant thereto issued under the Rights Agreement.

“ Company Employees ” shall mean each current or former employee, director or consultant of the Company or any of its Subsidiaries.

“ Company Option ” shall mean an option to acquire shares of Common Stock that was issued to a Company Employee under any Company Stock Plan or otherwise pursuant to a grant duly authorized by the Board.

“ Company Stock Plans ” shall mean the Company’s Amended and Restated 1996 Stock Incentive Plan, the Company’s 2001 Stock Option Plan and the Company’s 2004 Stock Incentive Plan.

“ control ” (including the terms “ controlling ” “ controlled by ” and “ under common control with ”) with respect to any Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“ Conversion Shares ” shall mean (i) the shares of Common Stock issuable upon the conversion of the Convertible Preferred Stock as provided for in the Certificate of Designation; (ii) the shares of Common Stock issuable upon the conversion of the Notes as provided for in the Indenture; (iii) the shares of Common Stock issuable upon the exercise of the Warrants as provided for therein; (iv) the shares of Series B Preferred Stock issuable upon the conversion of the Convertible Preferred Stock as provided for in the Certificate of Designation; (v) the shares of Series C Preferred Stock issuable upon the conversion of the Notes as provided for in the Indenture; and (vi) the shares of Common Stock issuable upon the conversion of the Junior Preferred Stock as provided for in their respective Junior Certificates of Designation.

“ DGCL ” shall mean the General Corporation Law of the State of Delaware.

“ Director ” means any member of the Board.

“ Environmental Law ” shall mean any and all Laws relating to the protection of human health or the environment (including ambient air, surface water, groundwater or land) or natural resources, including for the avoidance of doubt the European Union Restriction of Hazardous Substances and Waste Electrical and Electronic Equipment Directives, the State of California’s Proposition 65, and any other similar Laws concerning harmful or deleterious substances in products.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“ ERISA Affiliate ” shall have the meaning set forth in Section 3.13(c) .

“ Exchange ” shall mean a United States national securities exchange, including NASDAQ and the New York Stock Exchange.

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder.

“ Foreign Benefit Plan ” shall mean any Benefit Plan (other than a statutorily mandated plan) that is maintained outside the jurisdiction of the United States, or covers any Company Employee residing or working outside of the United States (other than employees based in the United States working outside the United States on temporary assignment).

“ Fundamental Change ” has the meaning assigned to it in the Certificate of Designation, provided that for all purposes of this Agreement, clause (v) of such definition shall be disregarded (and shall not constitute a Fundamental Change for purposes of this Agreement).

“ Governmental Entity ” shall mean any United States, federal, state or local government, or any foreign government, or any agency, bureau, board, commission, court, department, tribunal or instrumentality thereof

“ Guarantee Obligation ” shall mean as to any Person, any obligation, contingent or otherwise of such Person guaranteeing any Indebtedness of any other third Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including, without limitation, any obligation of the guaranteeing Person (i) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (a) for the purchase or payment of any such Indebtedness or (b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor so as to enable such primary obligor to pay such Indebtedness, (iii) to purchase property, securities or services for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (iv) otherwise to protect the owner of any such Indebtedness against loss in respect thereof; provided , however , that the term Guarantee Obligation shall not include (x) any liability by endorsement of instruments for deposit or collection or similar transactions in the ordinary course of business, (y) indemnification obligations of the Company or any of its Subsidiaries entered into in the ordinary course of business or (z) obligations of the Company or any of its Subsidiaries under arrangements entered into in the ordinary course of business whereby the Company or such Subsidiary sells goods or inventory to other Persons under agreements obligating the Company or such Subsidiary to repurchase such goods or inventory, at a price not exceeding the original sale price, upon the occurrence of certain specified events. The amount of any Guarantee Obligation of any guaranteeing Person at any time shall be deemed to be the lower of (1) an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made at such time and (2) the maximum amount for which such guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation at such time, unless such Indebtedness and such 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 Company in good faith at such time; provided , however , that for purposes of this definition the liability of the guaranteeing Person with respect to any obligation as to which a third Person or Persons are jointly or jointly and severally liable as a guarantor or otherwise as contemplated hereby and have not defaulted on its or their portions thereof shall be only as to its pro rata portion of such obligation.

“ Hazardous Substance ” shall mean any substance, material or waste that is characterized or regulated under any Environmental Law as “hazardous,” “pollutant,” “waste,” “contaminant,” “toxic” or words of similar meaning or effect, and shall include petroleum and petroleum products, polychlorinated biphenyls and asbestos.

“ HSR Act ” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“ Indebtedness ” shall mean of any Person at any date, without duplication, any indebtedness of such Person in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof, but excluding, in any case, any undrawn letters of credits) or representing the balance deferred and unpaid part of the purchase price of any property (including pursuant to capital leases), except any such balance that constitutes an accrued expense or trade liability, if and to the extent any of the foregoing would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, and all Guarantee Obligations of such Person; provided that solely with respect to Section 7.4(b) and 7.4(d) , Indebtedness shall have the meaning ascribed thereto in the Indenture.

“ Information Rights Period ” shall mean the period beginning with the Closing Date and ending when the SLS Beneficial Ownership Percentage is less than 7.5%.

“ Intellectual Property ” shall mean all U.S. or foreign intellectual property, including (i) patents, inventions, trademarks, service marks, domain names, copyrights, works of authorship in any medium, and trade secrets and (ii) applications for and registrations of such patents, trademarks, service marks, domain names, and copyrights (“ Registered Intellectual Property ”).

“ Investor Securityholders ” shall mean each of the Purchasers and their respective Permitted Transferees.

“ Junior Preferred Stock ” shall mean the Series B Junior Preferred Stock and the Series C Junior Preferred Stock.

“ Junior Certificates of Designation ” shall mean the Series B Certificate of Designation and the Series C Certificate of Designation.

“ Knowledge ” shall mean, with respect to the Company, actual knowledge of a particular fact or matter by any of Richard Thompson, Neil Dial, Linda Heller, Alexander Levran, Tina McKnight, Richard Gerrity and Mark Hogan.

“ Legal Proceeding ” shall mean any action, suit, litigation, petition, claim, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, or investigation by or before, or otherwise involving, any court or other Governmental Entity or arbitral body.

“ Material Adverse Effect ” shall mean any fact, circumstance, event, change, effect, occurrence or development (each, a “ Change ”) that, individually or in the aggregate with all other Changes, (a) has or would be reasonably expected to have a material adverse effect on or with respect to the business, operations, assets (including intangible assets), results of operation or financial condition, in each case, of the Company and its Subsidiaries taken as a whole, or (b) prevents or materially delays or materially impairs the ability of the Company to consummate the transactions contemplated by the Transaction Agreements, provided , however , that a Material Adverse Effect shall not include any Change (by itself or when aggregated or taken together with any and all other Changes) (i) generally affecting economic conditions in the United States or other countries in which the Company or its Subsidiaries operate, including effects on such industry, economy or markets resulting from any regulatory and political conditions or

developments in general, or any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism; (ii) resulting from changes in Law or GAAP (or authoritative interpretations thereof); (iii) resulting from changes in the market price or trading volume of the Company’s securities or from the failure of the Company to meet public projections, forecasts or estimates, provided that the exceptions in this clause (iii) are strictly limited to any such change or failure in and of itself and shall not prevent or otherwise affect a determination that any Change underlying such change or such failure has resulted in, or contributed to, a Material Adverse Effect; (iv) resulting from any conditions arising out of acts of terrorism or war, weather conditions or earthquakes; (v) resulting from the announcement of this Agreement or the pendency of the transactions contemplated hereby; or (vi) the failure to take any action in the ordinary course of business prohibited by this Agreement; except to the extent that, with respect to clauses (i), (ii) and (iv), the impact of such Changes is materially disproportionately adverse to the Company and its Subsidiaries, taken as a whole, relative to competitors of the Company and its Subsidiaries.

“ Nomination Representation Entitlement ” shall mean a number of Nominated Directors (rounded up to the nearest whole number) equal to (a) the sum of (i) the product of (x) the total number of members then comprising the full Board and (y) the lesser of SLS Director Beneficial Ownership Percentage and 20%, plus (ii) for as long as the product (rounded up to the nearest whole number) of the total number of members then comprising the full Board multiplied by the SLS Director Beneficial Ownership Percentage result in a larger number than that determined by clause (i), one (1), minus (b) the Preferred Representation Entitlement; provided , however , that, notwithstanding the foregoing, if at any time the SLS Director Beneficial Ownership Percentage is less than 7.5%, the Nomination Representation Entitlement shall be zero (0).

“ PB Warrant ” means the Warrant Agreement, dated as of March 6, 2008, granting to PWER Bridge, LLC, a Nevada limited liability company, warrants to purchase the Company’s Common Stock.

“ Permitted Lien ” shall mean any of the following: (i) Liens for Taxes, assessments and governmental charges or levies either not yet delinquent or which are being contested in good faith and by appropriate proceedings and for which appropriate reserves have been established to the extent required by GAAP; (ii) mechanics, carriers’, workmen’s, warehouseman’s, repairmen’s, materialmen’s or other Liens or security interests arising in the ordinary course of business that are not yet due or that are being contested in good faith and by appropriate proceedings (and for which adequate retainage or other reserves are held); (iii) Liens imposed by applicable Law; (iv) pledges or deposits to secure obligations under workers’ compensation Laws or similar legislation or to secure public or statutory obligations; (v) pledges and deposits to secure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature, in each case in the ordinary course of business; (vi) defects, imperfections or irregularities in title, easements, covenants and rights of way and other similar restrictions on real property, each of which is of record, and zoning, building and other similar codes or restrictions, in each case that do not adversely affect in any material respect the current use and operation of the applicable property owned, leased, used or held for use by the Company or any of its Subsidiaries; (vii) Liens the existence of which are disclosed in the notes to the consolidated financial statements of the Company included in the Annual Report;

(viii) statutory, common law or contractual liens of landlords and (ix) Liens arising under or out of the 8% Notes and the Indenture governing such 8% Notes, or permitted by such Indenture as in effect prior to the effectiveness of the Supplemental Indenture.

“ Permitted Transferee ” means any Affiliated Entity. Each of the Purchasers is a “Permitted Transferee” of each other.

“ Person ” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or any other entity or organization.

“ Plan Asset Regulations ” shall mean the regulations issued by the U.S. Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations, or any successor regulations as the same may be amended from time to time.

“ Preferred Director ” has the meaning assigned to it in the Certificate of Designation.

“ Preferred Representation Entitlement ” has the meaning assigned to the definition of “Board Representation Entitlement” (as defined in the Certificate of Designation).

“ Public Sale ” shall mean (i) an underwritten public offering pursuant to an effective registration statement (other than a registration statement on Form S-4, Form S-8 or any successor or other forms promulgated for similar purposes) filed under the Securities Act or (ii) a “brokers’ transaction” (as defined in Rule 144).

“ Restriction Termination Event ” shall mean, following the Closing, the earlier to occur of (a) consummation of a Fundamental Change and (b) the Company failing to comply with any material covenant, agreement or obligation contained in any Transaction Agreement, and such failure continues for a period of at least fifteen (15) days after the Company receives written notice of such failure from SLS on behalf of the Investor Securityholders.

“ Rights ” shall have the meaning given thereto in the Rights Agreement (or the comparable right under any successor or substitute shareholder rights plan).

“ SEC ” shall mean the Securities and Exchange Commission.

“ Securities Act ” shall mean the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder.

“ Series B Junior Preferred Stock ” shall mean that new series of Series B Junior Participating Convertible Preferred Stock, par value $.001 per share, of the Company, the rights, preferences and privileges of which are to be set forth in a Certificate of Designation consistent with the terms set forth in the Term Sheet (the “ Series B Junior Preferred Term Sheet ”) attached hereto as Exhibit G (such Certificate of Designation, the “ Series B Certificate of Designation ”).

“ Series C Junior Preferred Stock ” shall mean that new series of Series C Junior Participating Convertible Preferred Stock, par value $.001 per share, of the Company, the rights,

preferences and privileges of which are to be set forth in a Certificate of Designation consistent with the terms set forth in the Term Sheet (the “ Series C Junior Preferred Term Sheet ”) attached hereto as Exhibit H (the “ Series C Certificate of Designation ”).

“ Significant Subsidiary ” shall have the meaning set forth in Rule 1-02(w) of Regulation S-X promulgated by the SEC ( provided that for purposes of this definition, the references to “10%” in the definition of “significant subsidiary” in such Rule 1-02(w) shall be deemed to be references to “5%”).

“ SLS Beneficial Ownership Percentage ” shall mean, at any time, the quotient of (a) the aggregate number of shares of Common Stock Beneficially Owned by the Investor Securityholders divided by (b) the number of Common Shares Outstanding.

“ SLS Director Beneficial Ownership Percentage ” shall mean, at any time, the quotient of (a) the aggregate number of shares of Common Stock Beneficially Owned (excluding the number of shares of Common Stock issuable upon the exercise of the Warrants) by the Investor Securityholders divided by (b) the number of Common Shares Outstanding (calculated without giving effect to clause (iv) of “Common Shares Outstanding”).

“ SLS Management ” shall mean Silver Lake Management Company Sumeru, L.L.C. (or its successor by merger, consolidation or transfer of all or substantially all of its assets).

“ SLS Ownership Limit ” shall mean the SLS Beneficial Ownership Percentage at the close of business on the Closing Date, provided that if any Investor Securityholder effects a Transfer to any Person other than one or more Permitted Transferees, then on and after the first day after the end of the fiscal quarter of the Company in which such Transfer occurred (the “ Transfer Quarter ”) the SLS Ownership Limit will equal the SLS Beneficial Ownership Percentage at the close of business on the last day of such Transfer Quarter.

“ Standstill Limit ” shall mean, at any time, the greater of:

(i) the product of (x) 10% and (y) the number of Common Shares Outstanding; and

(ii) the product of (x) the SLS Ownership Limit, plus one percent (1%) and (y) the number of Common Shares Outstanding.

“ Subsidiary ” when used with respect to any party shall mean any corporation or other organization, whether incorporated or unincorporated, at least a majority of the securities or other interests of which, having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries.

“ Survivor of a Fundamental Change ” shall mean (a) the issuer of the securities received by the holders of Common Stock (in their capacities as such) upon the consummation of a Fundamental Change, to the extent the holders of Common Stock receive other securities in exchange, conversion or substitution of their Common Stock in the transaction that resulted in

such Fundamental Change or (b) the Company (or its successor) in all other circumstances of a Fundamental Change.

“ Tax Returns ” shall mean returns, reports, information statements and other documentation (including any additional or supporting material) filed or maintained, or required to be filed or maintained, in connection with the calculation, determination, assessment or collection of any Tax, including any schedules or amendments thereto.

“ Taxes ” shall mean any and all federal, state, local, foreign and other taxes, levies, fees, imposts, duties and charges of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto), including, without limitation, taxes imposed on, or measured by, income, franchise, profits or gross receipts, and any ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes and customs or duties.

“ Total Current Voting Power ” shall mean, with respect to any entity, at the time of determination of Total Current Voting Power, the total number of votes which may be cast in the general election of directors of such entity (or, in the event the entity is not a corporation, the governing members, board or other similar body of such entity).

“ Transaction Agreements ” shall mean this Agreement, the Certificate of Designation, the Warrants, the Registration Rights Agreement, the Transaction Fee Agreement, the Indemnification Agreements, the Junior Certificates of Designation, the Indenture and the Notes.

“ Transferee ” means any Person to whom any Investor Securityholder or any Permitted Transferee or any Transferee thereof Transfers Company Securities in accordance with the terms hereof.

“ Treasury Regulation ” shall mean the Treasury Regulations promulgated under the Code.

“ Trustee ” shall have the meaning ascribed to it in the Indenture.

“ Voting Stock ” shall mean securities of any class or kind ordinarily having the power to vote generally for the election of Directors of the Company or its successor (including the Common Stock and the Convertible Preferred Stock).

2. Purchase and Sale .

2.1 Purchase and Sale . Subject to and upon the terms and conditions of this Agreement, the Company will (i) issue and sell to each Purchaser, and each Purchaser will purchase from the Company, at the Closing, Notes in the principal amount specified opposite such Purchaser’s name in Annex A , (ii) issue and sell to each Purchaser, and each Purchaser will purchase from the Company, at the Closing, that number of shares of Convertible Preferred Stock set forth opposite such Purchaser’s name in Annex A , and (iii) issue to each Purchaser, and each Purchaser shall acquire from the Company, at the Closing, that number of Warrants set

forth opposite such Purchaser’s name in Annex A (such Purchased Warrants, together with such purchased Notes and shares of Convertible Preferred Stock, the “ Securities ”). The aggregate purchase price (the “ Purchase Price ”) for the Securities shall be $60,000,000, and shall be allocated among and paid by the Purchasers as set forth on Annex A .

2.2 Purchase Price Allocation . As soon as practicable after the Closing, the Company shall deliver to the Purchasers a statement allocating the Purchase Price among the Securities for tax purposes. If within ten (10) days after the delivery of such statement SLS, on behalf of the Purchasers, notifies the Company in writing that the Purchasers object to such allocation, the Company and SLS, on behalf of the Purchasers, shall use commercially reasonable efforts to resolve such dispute within twenty (20) days. In the event that SLS, on behalf of the Purchasers, and the Company are unable to resolve such dispute within such time period, the Company and SLS, on behalf of the Purchasers, shall jointly retain a nationally recognized accounting firm (the “ Appraisal Firm ”) to resolve such dispute, whose determination shall be final and binding on the parties. The costs, fees and expenses of the Appraisal Firm shall be borne equally by the Company, on the one hand, and the Purchasers, on the other hand. The Company and the Purchasers agree to be bound for all tax purposes by the allocation, and shall not take any contrary tax position regarding such allocation, unless otherwise required pursuant to a “determination” (as defined in Section 1313(a) of the Code) or a comparable concept under applicable Law or otherwise required pursuant to applicable Law.

2.3 Closing .

(a) Subject to the satisfaction or waiver of the conditions set forth in Section 6 of this Agreement, the closing of the purchase and sale of the Securities (the “ Closing ”) shall take place at the offices of Simpson Thacher & Bartlett LLP, 2550 Hanover Street, Palo Alto, California, on the later of (i) the second Business Day after the satisfaction or waiver of the conditions set forth in Section 6 (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver thereof) and (ii) May 8, 2009 (the “ Closing Date ”).

(b) At the Closing:

(i) (x) the aggregate principal amount of the Notes shall be reflected in one or more global notes representing the Notes and, if reasonably possible, held by The Depository Trust Company or its nominee (or a custodian on its behalf) or if such global notes are not available as of the Closing, the Company shall deliver to each Purchaser one or more Note(s) in the aggregate principal amount as set forth opposite such Purchaser’s name on Annex A , (y) the Company shall deliver to each Purchaser one or more certificates for such number of shares of Convertible Preferred Stock as set forth opposite such Purchaser’s name on Annex A and (z) the Company shall deliver to each Purchaser certificates representing the Warrants representing such number of Purchased Warrants; and

(ii) the Purchasers shall deliver, or cause to be delivered, to the Company an amount equal to the Purchase Price by wire transfer of immediately available funds to an account that the Company shall designate at least one (1) Business Day prior to the Closing Date.

3. Representations and Warranties of the Company . Except (i) as described in reasonable detail in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2008 (the “ Annual Report ”) (other than disclosures in the “Risk Factors” section included therein and any other disclosures included therein that are predictive or forward-looking in nature) and (ii) as set forth in the disclosure schedule delivered by the Company to the Purchasers on the date hereof (the “ Disclosure Schedule ”), the Company hereby represents and warrants to each of the Purchasers as follows:

3.1 Organization and Power .

(a) Each of the Company and its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Each of the Company and its Subsidiaries has the requisite corporate power and authority to carry on its respective business as it is presently being conducted and to own, lease or operate its respective properties and assets, except as would not, individually or in the aggregate, have a Material Adverse Effect.

(b) Each of the Company and its Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation (or other legal entity) in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification (to the extent the “good standing” concept is applicable in the case of any jurisdiction outside the United States), except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Significant Subsidiary is in violation of its organizational or governing documents. The Company has delivered or made available to the Purchasers complete and correct copies of the certificates of incorporation and bylaws or other constituent documents, as amended to date and currently in full force and effect, of the Company and its Significant Subsidiaries.

3.2 Capitalization .

(a) As of the date of this Agreement, the authorized shares of capital stock of the Company consist of 300,000,000 shares of Common Stock and 30,000,000 shares of preferred stock, par value $0.001 per share (“ Preferred Stock ”), of which, 300,000 shares have been designated Junior Participating Preferred Stock. As of the close of business on March 23, 2009 (the “ Capitalization Date ”), (i) 87,942,177 shares of Common Stock were issued and outstanding, (ii) 8,806,827 shares of Common Stock were reserved for issuance under the Company Stock Plans, (iii) no shares of Preferred Stock were issued and outstanding, and (iv) no shares of Common Stock or Preferred Stock were held by the Company as treasury shares. All outstanding shares of Common Stock are validly issued, fully paid, nonassessable and free of any preemptive or similar rights. Since the Capitalization Date, the Company has not sold or issued or repurchased, redeemed or otherwise acquired any shares of the Company’s capital stock (other than issuances pursuant to the exercise of any Company Option or vesting of any share unit award that had been granted under any Company Stock Plan, or repurchases, redemptions or other acquisitions pursuant to agreements contemplated by a Company Stock Plan). No Subsidiary of the Company owns any Company Securities.

(b) As of the Capitalization Date, with respect to the Company Stock Plans, (i) there were 5,764,823 shares of Common Stock underlying outstanding Company Options to acquire shares of Common Stock, such outstanding Company Options having a weighted average exercise price per share as of the Capitalization Date of $8.07, (ii) there were 1,467,504 shares of Common Stock issuable upon the vesting of outstanding share award units, and (iii) 1,574,500 additional shares of Common Stock were reserved for issuance for future grants pursuant to the Company Stock Plans. All outstanding shares of Common Stock and all shares of Common Stock reserved for issuance as noted in the foregoing sentence, when issued in accordance with the respective terms thereof, are or will be validly issued, fully paid, nonassessable and free of any preemptive or similar rights. Each Company Option was granted with an exercise price per share equal to or greater than the per share fair market value (as such term is used in Code Section 409A and the Department of Treasury regulations and other interpretive guidance issued thereunder) of the Common Stock underlying such Company Option on the grant date thereof and was otherwise issued in compliance with applicable Law.

(c) Except for the 8% Notes, the PB Warrant or as set forth in this Section 3.2 , as of the date of this Agreement, there are no (i) outstanding shares of capital stock of, or other equity or voting interest in, the Company, (ii) outstanding securities of the Company convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, the Company, (iii) outstanding options, warrants, rights or other commitments or agreements to acquire from the Company, or that obligates the Company to issue, any capital stock of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, the Company, (iv) obligations of the Company to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interest (including any voting debt) in, the Company (the items in clauses (i), (ii), (iii) and (iv), together with the capital stock of the Company, being referred to collectively as “ Company Securities ”) and (v) no other obligations by the Company or any of its Subsidiaries to make any payments based on the price or value of any Company Securities. There are no outstanding agreements of any kind which obligate the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities.

(d) Except for the 8% Notes, the PB Warrant or as set forth in the Transaction Agreements, neither the Company nor any of its Subsidiaries is a party to any agreement relating to the voting of, requiring registration of, or granting any preemptive, anti-dilutive rights or rights of first refusal or other similar rights with respect to any Company Securities.

(e) (i) Upon the filing of the Certificate of Designation, the Series B Certificate of Designation and the Series C Certificate of Designation, the Convertible Preferred Stock, the Series B Junior Preferred Stock and the Series C Junior Preferred Stock, respectively, will be duly authorized and (ii) the Common Stock into which the Notes, the Convertible Preferred Stock, the Junior Preferred Stock or the Warrants may be convertible or exercisable have been duly authorized and validly reserved for issuance. When the Convertible Preferred Stock, the Series B Junior Preferred Stock, the Series C Junior Preferred Stock or the Warrants are issued and paid for in accordance with the provisions of this Agreement, the Certificate of Designation and the Junior Certificates of Designation, all such Convertible Preferred Stock,

Junior Preferred Stock or Warrants (A) will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive or similar rights and (B) will be delivered to the Purchasers (or other assignee) free and clear of all Liens, excluding Liens imposed by the Transaction Agreements and/or applicable Law. When the Notes are issued and paid for in accordance with the provisions of this Agreement and the Indenture, all such Notes (A) will be duly authorized, validly issued and free of preemptive or similar rights and (B) will be delivered to the Purchasers (or other assignee) free and clear of all Liens, excluding Liens imposed by the Transaction Agreements and/or applicable Law. When the shares of Common Stock into which the Notes, the Convertible Preferred Stock, the Junior Preferred Stock or the Warrants may be convertible or exercisable are issued in accordance with the provisions of the Certificate of Designation, the Indenture, the Junior Certificates of Designation or such Warrants, all such shares (A) will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive or similar rights and (B) will be delivered to the Purchasers (or its Permitted Transferees) free and clear of all Liens, excluding Liens imposed by the Transaction Agreements and/or applicable Law.

3.3 Authorization . The Company has all requisite corporate power to enter into the Transaction Agreements and to consummate the transactions contemplated by the Transaction Agreements and to carry out and perform its obligations thereunder. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization of the Notes, the Convertible Preferred Stock, the Warrants and the Conversion Shares, the authorization, execution, delivery and performance of the Transaction Agreements has been taken. Upon their respective execution by the Company and the other parties thereto and assuming that they constitute legal and binding agreements of the Purchasers, each of the Transaction Agreements will constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforceability (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting or relating to creditors’ rights generally, and (b) is subject to general principles of equity.

3.4 Valid Issuance . The Notes and the Warrants will, upon issuance pursuant to the terms hereof and upon payment therefor, be valid and legally binding obligations of the Company, enforceable in accordance with their terms and the terms of the Indenture and the Warrant, respectively, except that such enforceability (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting or relating to creditors’ rights generally, and (b) is subject to general principles of equity Subject to the accuracy of the representations made by the Purchasers in Sections 4.7 and 4.8 , the offer, sale and issuance of the Convertible Preferred Stock, the Junior Preferred Stock, the Notes and the Warrants and the conversion of the Convertible Preferred Stock, the Junior Preferred Stock and the Notes into, or exercise of the Warrants for, Common Stock will be in compliance with applicable exemptions from (i) the registration and prospectus delivery requirements of the Securities Act and (ii) will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable Blue Sky laws.

3.5 No Conflict . The execution, delivery and performance of the Transaction Agreements by the Company, the issuance of the Common Stock upon conversion or exercise of the Notes, the Convertible Preferred Stock, the Series B Junior Preferred Stock, the Series C

Junior Preferred Stock and the Warrants in accordance with the Indenture, the Certificate of Designation, the Series B Certificate of Designation, the Series C Certificate of Designation and such Warrants, respectively, and the consummation of the other transactions contemplated hereby will not (i) conflict with or result in any violation of any provision of the restated certificate of incorporation, as amended, or amended and restated bylaws of the Company, (ii) assuming the execution and effectiveness of the Supplemental Indenture, result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation, modification or acceleration of any obligation or to the loss of any benefit under any Indebtedness, guarantee of Indebtedness, mortgage, Contract, purchase or sale order, instrument, permit, concession, franchise, right or license binding upon the Company or any of its Subsidiaries or result in the creation of any liens, claims, mortgages, encumbrances, pledges, security interests, equities or charges of any kind (each, a “ Lien ”) upon any of the properties, assets or rights of the Company or any of its Subsidiaries that in the aggregate are material to the Company and its Subsidiaries, taken as a whole, or (iii) assuming compliance with the matters referred to in Section 3.6 , conflict with or violate any applicable law, statute, code, ordinance, rule, regulation, judgment, order, injunction or decree (collectively, “ Laws ” and each, a “ Law ”), other than, in the case of clauses (ii) and (iii), as would not, individually or in the aggregate, have a Material Adverse Effect.

3.6 Consents . No consent, approval, order, or authorization of, or filing or registration with, or notification to (any of the foregoing being a “ Consent ”), any Governmental Entity is required on the part of the Company under any Law in effect as of the date hereof in connection with (x) the execution, delivery or performance of the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby, (y) the issuance of the Common Stock upon conversion of the Notes, the Convertible Preferred Stock, the Series B Junior Preferred Stock and the Series C Junior Preferred Stock in accordance with the Indenture, the Certificate of Designation, the Series B Certificate of Designation and the Series C Certificate of Designation, respectively, and (z) the issuance of the Common Stock upon exercise of the Warrants in accordance with their terms, other than (i) the filing and recordation of the Certificate of Designation with the Secretary of State of the State of Delaware and such filings with Governmental Entities to satisfy the applicable laws of states in which the Company and its Subsidiaries are qualified to do business, (ii) the expiration or termination of any applicable waiting periods under the HSR Act or any foreign antitrust requirements in connection with the issuance of Common Stock upon conversion of the Convertible Preferred Stock or the Notes or exercise of the Warrants, (iii) those to be obtained, in connection with the registration of the Securities under the Registration Rights Agreement, under the applicable requirements of the Securities Act and Exchange Act and any related filings and approvals under applicable state securities laws, (iv) such filings and approvals as may be required by any federal or state securities laws, including compliance with any applicable requirements of the Exchange Act, and (v) such other Consents, the failure of which to make or obtain would not, individually or in the aggregate, have a Material Adverse Effect.

3.7 Permits . The Company and each of its Subsidiaries possess all permits, licenses, authorizations, consents, approvals and franchises of Governmental Entities that are required to conduct their business as currently conducted, except for such permits or licenses the absence of which would not, individually or in the aggregate, have a Material Adverse Effect on

the ability of the Company and its Subsidiaries, taken as a whole, to conduct their businesses in the ordinary course of business consistent with past practices.

3.8 SEC Reports; Financial Statements .

(a) The Company has filed all forms, reports and documents with the SEC that have been required to be filed by it under applicable Laws prior to the date hereof, and the Company will file prior to the Closing all forms, reports and documents with the SEC that are required to be filed by it under applicable Laws prior to such time (all such forms, reports and documents, together with all exhibits and schedules thereto, the “ SEC Reports ”). Each SEC Report complied as of its filing date, as to form in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, each as in effect on the date such SEC Report was filed. True and correct copies of all SEC Reports filed prior to the date hereof have been furnished to the Purchasers or are publicly available in the Interactive Data Electronic Applications (IDEA) database of the SEC. As of its filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseded filing), each SEC Report did not and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. None of the Company’s Subsidiaries is required to file any forms, reports or other documents with the SEC. Since January 1, 2008, neither the Company nor any of its executive officers has received notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.

(b) The consolidated financial statements (including all related notes and schedules) of the Company and its Subsidiaries included in the SEC Reports (collectively, the “ Financial Statements ”) complied with the published rules and regulations of the SEC in effect at the time of filing with respect thereto, fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the dates indicated, and the results of their operations and their cash flows for the periods therein specified, all in accordance with United States generally accepted accounting principles applied on a consistent basis (“ GAAP ”) throughout the periods therein specified (except as otherwise noted therein, and in the case of quarterly financial statements except for the absence of footnote disclosure and subject, in the case of interim periods, to normal year-end adjustments).

(c) Except (i) as reflected or reserved against in the Company’s consolidated balance sheet as of December 28, 2008 (or the notes thereto) included in the SEC Reports filed prior to the date hereof and (ii) for Liabilities pursuant to any Contract of a nature not required by GAAP to be set forth on a consolidated balance sheet of the Company and its Subsidiaries or the notes thereto, neither the Company nor any Subsidiary of the Company has any Liabilities that would, individually or in the aggregate, have a Material Adverse Effect.

(d) To the Knowledge of the Company, since January 1, 2008, the Company has (x) devised and maintained a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and preparation of financial statements in accordance with GAAP, and has evaluated such system on a quarterly basis and concluded that it is effective and (y) disclosed to the Company’s auditors and the audit

committee of the Board (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that have been identified and which are reasonably likely to adversely affect the Company’s or any of its Subsidiaries’ ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls of the Company. The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company and its Subsidiaries required to be included in the Company’s periodic reports under the Exchange Act is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, and, to the Knowledge of the Company, such disclosure controls and procedures are effective in timely alerting the Company’s principal executive officer and its principal financial officer to such material information required to be included in the Company’s periodic reports required under the Exchange Act. There are no outstanding loans made by the Company or any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company. Since the enactment of the Sarbanes-Oxley Act of 2002, neither the Company nor any of its Subsidiaries has made any loans to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company or any of its Subsidiaries.

(e) Neither the Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, (x) any off-balance sheet partnership or any similar contract or arrangement (including any contract or arrangement relating to any transaction or relationship between or among the Company and any of its Subsidiaries, on the one hand, and any unconsolidated Affiliate on the other hand), including any “off-balance sheet arrangement” (as defined in Item 303(a) of Regulation S-K promulgated by the SEC); (y) any hedging, derivatives or similar contract or arrangement, in each case in an amount material to the Company and its Subsidiaries, taken as a whole, or (z) any Contract pursuant to which the Company or any of its Subsidiaries is obligated to make any capital contribution or other investment in or loan to any Person (other than a Subsidiary of the Company).

3.9 Litigation . Except as specifically set forth in the Annual Report, there are no (i) investigations or proceedings pending or, to the Knowledge of the Company, threatened by any Governmental Entity with respect to the Company or any of its Subsidiaries or any of their properties or assets, (ii) Legal Proceedings pending or, to the Knowledge of the Company, currently threatened against or affecting the Company or any of its Subsidiaries, or any of their respective properties or assets, at Law or in equity, or (iii) material adverse orders, judgments or decrees of any Governmental Entity against the Company or any of its Subsidiaries, except, in the case of clauses (i) and (ii), for such matters that would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

3.10 Absence of Certain Changes . Since December 28, 2008, the business of the Company and its Significant Subsidiaries has been conducted in the ordinary course of business consistent with past practices and there has not been:

(a) a Material Adverse Effect;

(b) any default in the payment of any Indebtedness by the Company or any of its Subsidiaries; or

(c) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Company, or any repurchase, redemption or other acquisition by the Company or any of its Subsidiaries of any outstanding shares of capital stock or other securities of the Company or any of its Subsidiaries.

3.11 Compliance with Law .

(a) The Company and each of its Subsidiaries are in compliance with and are not in default under or in violation of, and have not received any notices of non-compliance, default or violation with respect to, any Laws, except for such violations or noncompliance that would not, individually or in the aggregate have a Material Adverse Effect.

(b) To the Knowledge of the Company, neither the Company or any of its Subsidiaries nor any director, officer, employee, consultant or agent of the Company or any of its Subsidiaries has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful payments relating to political activity, (ii) made any unlawful payment to any foreign or domestic government official or employee or to any foreign or domestic political party or campaign or violated any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, (iii) consummated any transaction, made any payment, entered into any Contract or arrangement or taken any other action in violation of Section 1128B(b) of the U.S. Social Security Act, as amended, or (iv) made any other similar unlawful payment under any similar foreign Laws.

(c) No representation or warranty is made in this Section 3.11 with respect to (i) compliance with the Exchange Act, which are covered in Section 3.8 , (ii) applicable laws with respect to Taxes, which are covered in Section 3.15 , (iii) ERISA and other employee-benefit related matters, which are covered in Section 3.13 , or (iv) Environmental Laws, which are covered in Section 3.20 .

3.12 Intellectual Property .

(a) Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company and its Subsidiaries own, license, sublicense or otherwise possess legally enforceable rights to use all Intellectual Property necessary to conduct the business of the Company and its Subsidiaries, taken as a whole, as currently conducted, free and clear of all Liens (other than Permitted Liens or licenses granted by the Company or its Subsidiaries).

(b) All Registered Intellectual Property which are owned by the Company or any of its Subsidiaries are subsisting and have not been cancelled or abandoned, except as would not, individually or in the aggregate, have a Material Adverse Effect. To the Company’s Knowledge, no third party is infringing, violating or misappropriating any of the Company Intellectual Property.

(c) The execution and delivery of the Transaction Agreements by the Company and the consummation of the transactions contemplated hereby and thereby will not

result in the breach of, or create on behalf of any third party the right to terminate or materially modify, (i) any license, sublicense or other agreement relating to any Intellectual Property owned by the Company that is material to the business of the Company and its Subsidiaries, taken as a whole, as currently conducted (the “ Company Intellectual Property ”), or (ii) any license, sublicense and other agreement as to which the Company or any of its Subsidiaries is a party and pursuant to which the Company or any of its Subsidiaries is authorized to use any third party Intellectual Property that is material to the business of the Company and its Subsidiaries, taken as a whole, as currently conducted, excluding generally commercially available, off-the-shelf software programs having a replacement value of less than $50,000 (the “ Third Party Intellectual Property ”).

(d) Except as would not, individually or in the aggregate, have a Material Adverse Effect, the conduct of the business of the Company and its Subsidiaries as currently conducted does not infringe, violate or constitute a misappropriation of any Intellectual Property of any third party. Since January 1, 2007, neither the Company nor any of its Subsidiaries (i) has received any written claim or notice alleging any such infringement, violation or misappropriation, or (ii) has been or is subject to any settlement, order, decree, injunction, or stipulation imposed by any Governmental Entity that may affect the use, validity or enforceability of Company Intellectual Property.

(e) No software included in the Company Intellectual Property that is distributed by the Company uses, incorporates or has embedded in it any source, object or other software code subject to an “open source,” “copyleft” or other similar types of license terms (including, without limitation, any GNU General Public License, Library General Public License, Lesser General Public License, Mozilla License, Berkeley Software Distribution License, Open Source Initiative License, MIT, Apache or public domain licenses, and the like) that requires, or conditions the distribution of any such software on, (i) the disclosure of any source code included in the Company Intellectual Property or (ii) the unlimited distribution of any software included in the Company Intellectual Property without charge.

(f) The Company and its Subsidiaries take reasonable actions to protect and preserve the confidentiality of their trade secrets, including implementing a policy requiring employees and contractors who are reasonably expected to receive access to trade secrets to sign nondisclosure agreements and all employees who develop material Intellectual Property for the Company to execute written agreements assigning all rights to such Intellectual Property to the Company or its Subsidiaries.

3.13 Employee Benefits .

(a) With respect to any Benefit Plan, no Legal Proceeding has been asserted, instituted, or, to the Knowledge of the Company, is threatened or anticipated (other than routine claims for benefits, and appeals of such claims) that would, individually or in the aggregate reasonably be expected to have a Material Adverse Effect, and, to the Knowledge of the Company, no facts or circumstances exist that could give rise to any such Legal Proceeding.

(b) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in material compliance with the applicable provisions of ERISA, the Code and all other applicable laws, rules and regulations.

(c) Neither the Company, any of its Subsidiaries, nor any other entity which, together with the Company or any of its Subsidiaries would be treated as a single employer under Section 4001 of ERISA or Section 414 of the Code (each such entity, an “ ERISA Affiliate ”) sponsors, maintains, contributes to, or has had an obligation at any time to sponsor, maintain or contribute to, or has had or has any liability in respect of any “employee benefit plan” (as defined in Section 3(3) of ERISA) subject to Section 412 of the Code or Section 302 of ERISA or Title IV of ERISA, including any “multiemployer plan” (as defined in Section 4001(a)(15) of ERISA), or any other plan which is subject to Section 4063, 4064 or 4069 of ERISA. Other than with respect to Foreign Benefit Plans, neither the Company nor any of its Subsidiaries has any material liability under any “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) that is not intended to be qualified under Section 401(a) of the Code. Except as required by Section 4980B of the Code or any similar state, local or non-US law, no Benefit Plan provides any retiree or post-employment medical, disability or life insurance benefits to any person.

(d) Except as would not, individually or in the aggregate, have a Material Adverse Effect, with respect to any Benefit Plan, (i) there has been no non-exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Company Plan that would reasonably be expected to subject the Company or any of its Subsidiaries to any tax or penalty imposed by Section 502 of ERISA, Section 4975 of the Code or otherwise, and (ii) no event has occurred and no condition exists that would reasonably be expected to subject the Company or any of its Subsidiaries, either directly or by reason of their affiliation with any ERISA Affiliate, to any tax, fine, lien, penalty or liability imposed by or under any applicable laws, rules and regulations, including ERISA and the Code.

(e) Neither the execution of the Transaction Agreements nor the consummation of the transactions contemplated hereby and thereby will (i) accelerate the time of payment or vesting or increase the amount of compensation or benefits due to any Company Employee, or (ii) give rise to any other liability or funding obligation under any Benefit Plan or otherwise, including liability for severance pay, unemployment compensation or termination pay.

(f) All Foreign Benefit Plans that are required to be funded are fully funded, and with respect to all other Foreign Benefit Plans, adequate reserves therefor have been established on the financial statements of the Company or its applicable Subsidiary.

(g) Except as would not, individually or in the aggregate have a Material Adverse Effect, neither the Company nor any of its Subsidiaries has any plan, contract or commitment, whether legally binding or not, to create any additional employee benefit or compensation plans, policies or arrangements or, except as may be required by Law, to modify any Benefit Plan.

3.14 Labor Relations .

(a) (i) No current Company Employee is represented by a union other than Company Employees employed by Power-One Italy S.p.A., and, to the Knowledge of the Company, no union organizing efforts have been conducted within the last three years or are now being conducted, (ii) neither the Company nor any of its Subsidiaries (other than Power-One Italy S.p.A.) is a party to any material collective bargaining agreement or other labor contract, and (iii) neither the Company nor any of its Subsidiaries currently has, or, to the Knowledge of the Company, is there now threatened, a strike, picket, work stoppage, work slowdown or other material labor dispute.

(b) Except as would not, individually or in the aggregate have a Material Adverse Effect, (i) each of the Company and its Subsidiaries is in compliance with all applicable laws relating to employment, including all applicable laws relating to wages, hours, collective bargaining, employment discrimination, civil rights, safety and health, workers’ compensation, pay equity and the collection and payment of withholding and/or social security taxes, and (ii) neither the Company nor any of its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or any similar state or local Law within the last six months which remains unsatisfied.

3.15 Taxes .

(a) The Company and each of its Subsidiaries have filed all material Tax Returns required to have been filed as of the date hereof (or extensions have been duly obtained) and such Tax Returns are correct and complete in all material respects and have paid all material Taxes required to have been timely paid by it in full through the date hereof, except to the extent such Taxes are both (A) being challenged in good faith and (B) adequately provided for on the Financial Statements in accordance with GAAP.

(b) Neither the Company nor any of its Subsidiaries has any material current liability for Taxes of any Person (other than the Company and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law with respect to income taxes), as a transferee or successor or by contract.

(c) All material tax assets of the Company and its Subsidiaries have been accounted for on the most recent Financial Statements in accordance with GAAP principles.

(d) As of the date of the Financial Statements and, to the Knowledge of the Company, as of the date hereof, no deficiencies for any material Taxes have been proposed or assessed in writing against or with respect to the Company or any of its Subsidiaries that have not been adequately provided for in such Financial Statements, and there is no outstanding material audit, assessment, dispute or claim concerning any Tax liability of the Company or any of its Subsidiaries pending or raised by an authority in writing other than that provided for in the Financial Statements.

(e) To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2) as of date of the Financial Statements.

3.16 NASDAQ . Shares of the Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed on The NASDAQ Global Market (“ NASDAQ ”), and the Company has no action pending to terminate the registration of the Common Stock under the Exchange Act or delist the Common Stock from NASDAQ, nor has the Company received any written, or, to the Knowledge of the Company, oral notification since January 1, 2008 to the effect that the SEC or NASDAQ is currently contemplating terminating such registration or listing. Notwithstanding the foregoing, each of the Purchasers acknowledges and understands that the Company has not been in compliance with the applicable Nasdaq Marketplace Rule requiring a minimum bid price of $1 per share.

3.17 Investment Company Act . The Company and its Subsidiaries are not, and, and immediately after receipt of payment for the Convertible Preferred Stock and the Notes will not be, an “investment company” within the meaning of, and required to be registered under, the Investment Company Act of 1940, as amended.

3.18 Brokers . Except in respect of the Company’s engagement of Piper Jaffray & Co., the Company has not retained, utilized or been represented by any broker or finder who is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement. The Company has delivered or made available to the Purchasers complete and correct copies of all engagement letters entered into in connection with the transactions contemplated by this Agreement by the Company with Piper Jaffray & Co. or any of its Affiliates.

3.19 Subsidiaries.

(a) As of the date hereof, the Company has no Subsidiaries other than as listed in the Annual Report.

(b) All of the outstanding capital stock of, or other equity or voting interest in, each Significant Subsidiary of the Company (i) have been duly authorized, validly issued and are fully paid and nonassessable and (ii) are owned, directly or indirectly, by the Company, free and clear of all Liens other than Permitted Liens and free of any other restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other equity or voting interest) that would prevent the operation by the Surviving Corporation of such Subsidiary’s business as presently conducted. No Subsidiary of the Company owns any shares of Common Stock.

(c) There are no outstanding (i) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, any Subsidiary of the Company, (ii) options, warrants, rights or other commitments or agreements to acquire from the Company or any of its Subsidiaries, or that obligate the Company or any of its Subsidiaries to issue, any capital stock of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, any Subsidiary of the Company, (iii) obligations of the Company to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interest (including any voting debt) in, any Subsidiary of the Company

(the items in clauses (i), (ii) and (iii), together with the capital stock of the Subsidiaries of the Company, being referred to collectively as “ Subsidiary Securities ”), or (iv) other obligations by the Company or any of its Subsidiaries to make any payments based on the price or value of any shares of any Subsidiary of the Company. There are no outstanding agreements of any kind which obligate the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.

3.20 Environmental Matters .

(a) Except for such matters as would not, individually or in the aggregate, have a Material Adverse Effect:

(i) The Company and its Subsidiaries and their respective operations are in compliance with all, and have not violated any, applicable Environmental Laws, which compliance includes the possession and maintenance of, and compliance with, all permits, licenses, authorizations, consents, approvals and franchises from Governmental Entities required under applicable Environmental Laws for the operation of the business of the Company and its Subsidiaries.

(ii) Neither the Company nor any of its Subsidiaries has transported, produced, processed, manufactured, generated, used, treated, handled, stored, released or disposed of any Hazardous Substances, except in compliance with applicable Environmental Laws and in a manner that has not resulted in liability under any applicable Environmental Law.

(iii) Neither the Company nor any of its Subsidiaries has exposed any Company Employee or any third party to Hazardous Substances in violation of, or in a manner that has resulted in liability under, any applicable Environmental Law.

(iv) Neither the Company nor any of its Subsidiaries is a party to or is the subject of any pending, or, to the Knowledge of the Company, threatened, Legal Proceeding alleging any liability, obligation or commitment (“ Liabilities ”) under or noncompliance with any Environmental Law or seeking to impose any financial responsibility for any investigation, cleanup, removal, containment or any other remediation under any Environmental Law. Neither the Company nor any of its Subsidiaries is subject to any orders, judgments or decrees or agreement by or with any Governmental Entity or third party imposing any Liabilities with respect to any Environmental Laws or any Hazardous Substances.

(v) Neither the Company nor any of its Subsidiaries manufactures any products that do not satisfy all Environmental Laws applicable to such products to be imported, sold, or otherwise marketed in any jurisdiction in which such products are currently, or within the last complete fiscal year have been, imported, sold, or otherwise marketed.

(vi) To the Knowledge of the Company, none of the products currently or formerly manufactured, distributed, sold, leased, licensed, repaired or delivered by the Company or any of its Subsidiaries contains or has contained any Hazardous Substance that

has resulted in or could reasonably expected to result in any liability to the Company and its Subsidiaries.

(b) As of the date hereof, to the Knowledge of the Company, all reports of environmental site assessments, reviews, audits, or similar evaluations, and any material documents concerning material environmental matters, in each case, relating to the Company or any of its Subsidiaries, which reports or documents are in the possession or control of the Company or any of its Subsidiaries, have been made available to the Purchasers.

3.21 Assets . The Company or its Subsidiaries have good and marketable title to all of its or their real or personal properties (whether tangible or intangible), rights and assets, free and clear of all Liens in all material respects other than Permitted Liens.

3.22 Insurance . The Company and its Significant Subsidiaries have all material policies of insurance covering the Company, its Significant Subsidiaries or any of their respective employees, properties or assets, including policies of life, property, fire, workers’ compensation, products liability, directors’ and officers’ liability and other casualty and liability insurance, that, to the Knowledge of the Company, is in a form and amount that is customarily carried by persons conducting business similar to that of the Company and which the Company believes is adequate for the operation of its business. All such insurance policies are in full force and effect, no notice of cancellation has been received, and there is no existing default or event which, with the giving of notice or lapse of time or both, would constitute a default, by any insured thereunder, except for such defaults that would not, individually or in the aggregate, have a Material Adverse Effect. To the Knowledge of the Company, there is no material claim pending under any of such policies as to which coverage has been denied or disputed by the underwriters of such policies and there has been no threatened termination of any such policies.

3.23 Material Contracts .

(a) For all purposes of and under this Agreement, a “ Material Contract ” shall mean:

(i) (x) all contracts restricting the payment of dividends upon, or the redemption, conversion or exercise of, the Convertible Preferred Stock, the Warrants or the Common Stock issuable upon conversion or exercise thereof and (y) all contracts restricting the payment of interest upon, or the redemption or conversion of, the Notes or the Common Stock issuable upon conversion thereof; and

(ii) any written joint venture, partnership, limited liability or other similar Contract or arrangement relating to the formation, creation, operation, management or control of any Person that is material to the business of the Company and its Subsidiaries, taken as a whole;

(iii) any material Contract containing any covenant (x) limiting the right of the Company or any of its Subsidiaries to sell, distribute or manufacture any products or services or engage in any line of business or in any geographic area, to make use of any material Intellectual Property or to compete with any Person, or (y) prohibiting the Company or

any of its Subsidiaries from engaging in business with any Person or levying a fine, charge or other payment for doing so; and

(iv) any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC, other than those agreements and arrangements described in Item 601(b)(10)(iii)) with respect to the Company and its Subsidiaries, taken as a whole (the Material Contracts together with any lease, binding commitment, option or other contract, agreement, instrument or obligation (whether written or oral) to which the Company or any of its Subsidiaries may be bound, the “ Contracts ”).

(b) As of the date hereof, to the Knowledge of the Company, all Material Contracts have been furnished or made available to the Purchasers.

(c) Each Material Contract and every other Contract of the Company or its Subsidiaries, the breach or termination of which, would have a Material Adverse Effect, is valid and binding on the Company (and/or each such Subsidiary of the Company party thereto) and is in full force and effect, and neither the Company nor any of its Subsidiaries that is a party thereto, nor, to the Knowledge of the Company, any other party thereto, is in breach of, or default under, any such Contract, and no event has occurred that with notice or lapse of time or both would constitute such a breach or default thereunder by the Company or any of its Subsidiaries, or, to the Knowledge of the Company, any other party thereto, except for such failures to be in full force and effect and such breaches and defaults that would not, individually or in the aggregate, have a Material Adverse Effect or will be waived or eliminated under the Supplemental Indenture.

3.24 Rights Agreement . The Company has amended the Rights Agreement in the form attached hereto as Exhibit F .

3.25 Anti-Takeover Statutes . The Board has taken all necessary actions so that the restrictions on business combinations set forth in Section 203 of the DGCL and any other similar applicable Law are not applicable to the Transaction Agreements and the transactions contemplated hereby and thereby. No other state takeover statute or similar regulation applies to or purports to apply to the Transaction Agreements and the transactions contemplated hereby and thereby.

4. Representations and Warranties of Each Purchaser . Each Purchaser, severally for itself and not jointly with the other Purchasers, represents and warrants to the Company as follows:

4.1 Organization . Such Purchaser is a limited partnership duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and has the requisite partnership power and authority to carry on business as it is presently being conducted and to own, lease and operate its properties and assets and to carry on its business as presently conducted.

4.2 Authorization . Such Purchaser has all requisite partnership power to enter into the Transaction Agreements and to consummate the transactions contemplated by the Transaction Agreements and to carry out and perform its obligations thereunder. All partnership

action on the part of such Purchaser or its officers, stockholders, members or partners necessary for the authorization, execution, delivery and performance of the Transaction Agreements has been taken. Upon their respective execution by such Purchaser and the other parties thereto and assuming that they constitute legal and binding agreements of the Company, each of the Transaction Agreements to which such Purchaser will be a party will constitute a legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except that such enforceability (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting or relating to creditors’ rights generally, and (b) is subject to general principles of equity.

4.3 No Conflict . The execution, delivery and performance of the Transaction Agreements by such Purchaser, the issuance of the Common Stock upon conversion of the Notes, the Convertible Preferred Stock, the Series B Junior Preferred Stock, the Series C Junior Preferred Stock and the Warrants in accordance with the Indenture, the Certificate of Designation, the Series B Certificate of Designation, the Series C Certificate of Designation and such Warrants, respectively, and the consummation of the other transactions contemplated hereby will not (i) conflict with or result in any violation of any provision of the certificate of incorporation, by-laws, limited liability company agreement, partnership agreement or other equivalent organizational document, in each case as amended, of such Purchaser, (ii) result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation, modification or acceleration of any obligation or to the loss of any benefit under any Indebtedness, guarantee of Indebtedness, mortgage, Contract, purchase or sale order, instrument, permit, concession, franchise, right or license binding upon such Purchaser or result in the creation of any Liens upon any of the properties, assets or rights of such Purchaser, or (iii) conflict with or violate any applicable Laws, other than, in the case of clauses (ii) and (iii), as would not, individually or in the aggregate, be reasonably expected to materially delay or hinder the ability of such Purchaser to perform its obligations under the Transaction Agreements (a “ Purchaser Adverse Effect ”).

4.4 Consents . No Consent of any Governmental Entity is required on the part of such Purchaser under any Law in effect as of the date hereof in connection with (x) the execution, delivery or performance of the Transaction Agreements to which such Purchaser will be a party and the consummation of the transactions contemplated hereby and thereby, (y) the issuance of the Common Stock upon conversion of the Notes, the Convertible Preferred Stock, the Series B Junior Preferred Stock and the Series C Junior Preferred Stock in accordance with the Indenture, Certificate of Designation, the Series B Certificate of Designation and the Series C Certificate of Designation, respectively, and (z) the issuance of the Common Stock upon exercise of the Warrants in accordance with their terms, other than (i) the expiration or termination of any applicable waiting periods under the HSR Act or any foreign antitrust requirements in connection with the issuance of Common Stock upon conversion of the Convertible Preferred Stock or the Notes or exercise of the Warrants, (ii) those to be obtained, in connection with the registration of Securities under the Registration Rights Agreement, under the applicable requirements of the Securities Act and Exchange Act and any related filings and approvals under applicable state securities laws, (iii) such filings and approvals as may be required by any federal or state securities laws, including compliance with any applicable requirements of the Exchange Act, and (iv) such other Consents the failure of which to make or obtain would not, individually or in the aggregate, have a Purchaser Adverse Effect.

4.5 Purchasers’ Financing . At the Closing, such Purchaser will have all funds necessary to pay to the Company the purchase price for the Securities being purchased by such Purchaser hereby in immediately available funds.

4.6 Brokers . Such Purchaser has not retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement whose fees the Company would be required to pay.

4.7 Purchase Entirely for Own Account . Such Purchaser is acquiring the Securities for its own account and not with a view to, or for sale in connection with, any distribution or offering of the Securities in violation of the Securities Act, and such Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. Such Purchaser does not presently have any contract, agreement, undertaking, arrangement, obligation or commitment with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities or the Common Stock into which any of the Securities are convertible or exercisable.

4.8 Investor Status . Such Purchaser certifies and represents to the Company that such Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act. Such Purchaser’s financial condition is such that it is able to bear the risk of holding the Securities for an indefinite period of time and the risk of loss of its entire investment. Such Purchaser has been afforded the opportunity to ask questions of and receive answers from the management of the Company concerning this investment and has sufficient knowledge and experience in investing in companies similar to the Company so as to be able to evaluate the risks and merits of its investment in the Company.

4.9 Securities Not Registered .

(a) Such Purchaser understands that the Securities have not been registered under the Securities Act or any state Blue Sky laws, by reason of their issuance by the Company in a transaction exempt from the registration requirements of the Securities Act and applicable state Blue Sky laws, and that the Securities must continue to be held by such Purchaser unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration. Such Purchaser understands that the exemptions from registration afforded by Rule 144 promulgated under the Securities Act (“ Rule 144 ”) (the provisions of which are known to it) depend on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts.

(b) Such Purchaser understands that the Securities shall be subject to the restrictions contained herein.

(c) Such Purchaser understands that the Securities, and any securities issued in respect thereof or exchange therefor, may bear one or all of the legends set forth in Section 8.3(a) .

4.10 Litigation . There is no Legal Proceeding pending or, to the knowledge of such Purchaser, threatened, against or affecting such Purchaser or any of its properties that would, individually or in the aggregate, have a Purchaser Adverse Effect. Such Purchaser is not

subject to any outstanding order, injunction, decree or agency requirement that would, individually or in the aggregate, have a Purchaser Adverse Effect.

4.11 Investment Company Act . No Purchaser, nor any of its Subsidiaries, is, and immediately following the Closing will not be, an “investment company” within the meaning of, and required to be registered under, the Investment Company Act of 1940, as amended.

5. Covenants.

5.1 Interim Conduct of the Business . Except as (i) set forth in Section 5.1 of the Disclosure Schedule or (ii) otherwise contemplated by the terms of this Agreement, prior to the Closing, (x) the Company shall, and shall cause its Subsidiaries to, except as would not, individually or in the aggregate have a Material Adverse Effect, use commercially reasonable efforts to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable Laws and (y) each of the Company and its Subsidiaries shall not, without the prior consent of the Purchasers:

(a) take any action that would require the consent of the Investor Securityholders pursuant to Section 7.4 if effected following the Closing;

(b) take any action that would require the consent of the holders of the Convertible Preferred Stock if effected following the Closing (other than the filing of the Certificate of Designation with the Secretary of State of the State of Delaware at or prior to the Closing);

(c) (i) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, securities or other property) in respect of, or convertible into or exchangeable or exercisable for, any of its capital stock (other than dividends and distributions by a direct or indirect wholly-owned Subsidiary of the Company to its parent); (ii) adjust, split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or any of its other securities; (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other Company Securities (other than repurchases of Common Stock pursuant to existing compensation, benefits, option, restricted share or employment agreement or plan existing on the date hereof); or (iv) take any action that would result in an adjustment of the conversion price under the Convertible Preferred Stock, the Notes or the Warrants had the Convertible Preferred Stock, the Notes or the Warrants, as the case may be, been outstanding at the time of such action;

(d) increase the number of Directors from seven (7) members or change the current and anticipated future structure of the Board;

(e) issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities, except for issuances of Company Securities which would not cause Section 5.7 to apply if effected following Closing;

(f) (i) file, or consent by answer or otherwise to the filing against the Company or any of its Subsidiaries of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, insolvency, reorganization, moratorium or other similar Law of any jurisdiction, (ii) make an assignment for the benefit of the creditors of the Company or any of its Subsidiaries, (iii) consent to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Company or any of its Subsidiaries or with respect to any substantial part of its or their property, or (iv) take any corporate action for the purpose of any of the foregoing;

(g) dissolve, liquidate or wind up the Company; or

(h) authorize any of, or commit to agree to take, any of the foregoing actions.

5.2 Antitrust Approval . The Company and the Purchasers acknowledge that one or more filings under the HSR Act or a foreign antitrust Law may be necessary in connection with the issuance of the Conversion Shares and/or the exercise of the rights pursuant to Section 5.7 . Promptly upon the request of the Investor Securityholders, to the extent a filing is required under the HSR Act or any foreign antitrust requirements in connection with any proposed conversion or exercise of the Securities, the Junior Preferred Stock and/or the exercise of the rights pursuant to Section 5.7 by such Investor Securityholder, the Company and the Investor Securityholders shall (a) file with the proper authorities all forms and other documents necessary to be filed pursuant to the HSR Act or such foreign antitrust requirement, and the regulations promulgated thereunder, in connection with the issuance of Conversion Shares and/or the exercise of the rights pursuant to Section 5.7 and (b) shall cooperate with each other in promptly producing such additional information as those authorities may reasonably require to comply with statutory requirements of the U.S. Federal Trade Commission, the U.S. Department of Justice or any other Governmental Entity. For the avoidance of doubt, the foregoing covenant shall apply to both the Company and the Investor Securityholders at any time after the Closing Date (notwithstanding that the Securities may not be convertible at such time and more than one such request may be made by the Investor Securityholders with respect to the Securities). Any filing fees associated with any such filing shall be borne equally by the Company, on the one hand, and the Investor Securityholders, on the other hand. For the avoidance of doubt, any delivery of Conversion Shares shall be subject to the terms and conditions of the Certificate of Designation, the Indenture, the Junior Certificates of Designation or the Warrants, as applicable, including any terms relating to compliance with the HSR Act or any foreign antitrust requirements.

5.3 Shares Issuable Upon Conversion . The Company will at all times have and keep available for issuance such number of shares of Common Stock as shall be sufficient to permit the conversion or exercise of the Convertible Preferred Stock, the Notes, the Junior Preferred Stock and the Warrants into Common Stock in accordance with their terms and as provided for in Certificate of Designation, the Notes and Indenture, the Junior Certificates of Designation and such Warrants, respectively, including as may be adjusted for share splits, combinations or other similar transactions as of the date of determination. The Company will at all times have and keep available for issuance such number of shares of Series B Junior Preferred Stock and Series C Junior Preferred Stock as shall be sufficient to permit the conversion of the

Convertible Preferred and the Notes, respectively, into Junior Preferred Stock in accordance with their terms and as provided for in the Certificate of Designation, the Notes and Indenture, as applicable. The Company will use reasonable best efforts to cause any Common Stock issued upon conversion or exercise of the Convertible Preferred Stock, the Notes and the Warrants to be listed with NASDAQ or such other Exchange on which the Common Stock may then be listed.

5.4 PORTAL and CUSIPs . The Company will use its reasonable best efforts to (a) permit the Notes to be designated PORTAL securities in accordance with the rules and regulations adopted by the NASD relating to the PORTAL Market as of the Closing or as promptly as practicable thereafter and (b) obtain all necessary Committee on Uniform Securities Identification Procedures numbers (CUSIP numbers) for the Notes required for creating a market in Notes traded pursuant to Rule 144A under the Securities Act or which are not “restricted securities” for purposes of Rule 144. Each Purchaser will provide all reasonable assistance and cooperation as may be requested by the Company to effectuate the intent and purposes of this Section 5.4 . The Company will use its reasonable best efforts to cause all Notes Beneficially Owned by the Purchasers to be issued (at the Closing and, failing that, as promptly as practicable thereafter) as an interest in the IAI Global Note (as defined in the Indenture); provided , however , that to the extent permitted by the Depository Trust Company and the registrar for the Notes, such ownership interest may be transferred into the Restricted Global Note (as defined in the Indenture).

5.5 Commercially Reasonable Efforts; Further Assurances; Notification .

(a) Upon the terms and subject to the conditions set forth in this Agreement, each of the Purchasers and the Company shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other party or parties hereto in doing, all things reasonably necessary, proper or advisable under applicable Law to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and the other Transaction Agreements, including using commercially reasonable efforts to: (i) cause the conditions to the Closing set forth in Section 6 to be satisfied; (ii) obtain all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Entities and make all necessary registrations, declarations and filings with Governmental Entities; and (iii) execute or deliver any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement and the other Transaction Agreements.

(b) Each party agrees to cooperate with each other and their respective officers, employees, attorneys, accountants and other agents, and, generally, do such other reasonable acts and things in good faith as may be necessary to effectuate the intents and purposes of this Agreement and the other Transaction Agreements, subject to the terms and conditions hereof and thereof and compliance with applicable Law, including taking reasonable action to facilitate the filing of any document or the taking of reasonable action to assist the other parties hereto in complying with the terms hereof and thereof.

(c) Prior to the Closing, the Company shall give prompt written notice to the Purchasers of the occurrence or non-occurrence of any event known to the Company the

occurrence or non-occurrence of which would reasonably be expected to cause any representation or warranty contained in Section 3 to be untrue, or the failure of the Company to comply with or satisfy any covenant or agreement under this Agreement. Prior to the Closing, the Purchasers shall give prompt written notice to the Company of the occurrence or non-occurrence of any event known to the Purchasers the occurrence or non-occurrence of which would reasonably be expected to cause any representation or warranty contained in Section 4 to be untrue, or the failure of the Purchasers to comply with or satisfy any covenant or agreement under this Agreement.

5.6 Standstill .

(a) The Investor Securityholders parties hereto agree that, from Closing until the earlier of (x) such time that the SLS Beneficial Ownership Percentage is less than 10% and (y) the consummation of a Fundamental Change (the “ Standstill Period ”), except as required in connection with the execution, delivery or performance of the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby, without the prior consent of the Company (evidenced by action of the Board), the Investor Securityholders shall not and the Investor Securityholders shall cause each of their Affiliates not to, directly or indirectly:

(i) except (x) as a result of the Beneficial Ownership of or exercise of any Rights, (y) for the receipt of any Company Securities or other rights or securities from the Company pursuant to the terms of the Conversion Shares or the Securities (or the exercise or conversion of any such Company Securities or other rights or securities), including any increase in the number of shares of Common Stock issuable upon conversion or exercise of the Convertible Preferred Stock, the Junior Preferred Stock, the Notes or the Warrants as a result of any anti-dilution or other terms thereof or the exercise of rights pursuant to Section 5.7 hereof and (z) Company Securities issued to the Appointed Directors or Nominated Directors in their capacities as such, if any, (A) acquire any Beneficial Ownership (or economic right tantamount thereto) of Company Securities or (B) authorize or make a tender offer, exchange offer or other offer or proposal, whether oral or written, to acquire Company Securities, in each case, if the effect of such acquisition would be that the Common Stock Beneficially Owned in the aggregate by the Investor Securityholders and their Affiliates would exceed the Standstill Limit, provided that for purposes of calculating the number of shares of Common Stock Beneficially Owned by the Investor Securityholders and their Affiliates, there shall be excluded from such calculation shares of Common Stock Beneficially Owned by Affiliates of the Investor Securityholders that are not also Beneficially Owned by the Investor Securityholders, up to a maximum number of shares of Common Stock that will be excluded pursuant to this clause equal to one percent (1%) of the Common Shares Outstanding;

(ii) make, or in any way participate, directly or indirectly, in any “solicitation” of “proxies” to vote (as such terms are used in the rules of the SEC), or seek to advise or influence any Person (other than (x) the Investor Securityholders or their Affiliates or (y) other than in accordance with and consistent with the recommendation of the Board) with respect to the voting of any Voting Stock;

(iii) authorize, commence, encourage, support or endorse any tender offer or exchange offer for shares of Voting Stock (for the avoidance of doubt, subject to compliance with Section 8.1 , tendering into any such offer will not violate this Section 5.6(a) );

(iv) form, join or in any way participate in a “group” as defined in Section 13(d)(3) of the Exchange Act (other than a group comprised solely of the Investor Securityholders and their Permitted Transferees), for the purpose of voting, acquiring, holding, or disposing of any Voting Stock;

(v) publicly announce, propose or submit to the Company a proposal or offer to effect any of the following (each, a “ Company Change in Control Event ”): (1) a merger, consolidation or other business combination or transaction to which the Company is a party if the Voting Stock immediately prior to the effective date of such merger, consolidation or other business combination or transaction (or the securities such Voting Stock is converted or exchanged into), represents less than 50% of the Total Current Voting Power of the surviving entity (or its parent) following such merger, consolidation or other business combination or transaction; (2) an acquisition by any Person, entity or “group” (as defined in Section 13(d)(3) of the Exchange Act) of direct or indirect Beneficial Ownership of Voting Stock of the Company representing 50% or more of the Total Current Voting Power of the Company; (3) a sale of all or substantially all of the assets of the Company to any Person or Persons; or (4) a liquidation or dissolution of the Company;

(vi) take any action that results in the Investor Securityholders having to file or amend a statement on Schedule 13D pursuant to Rule 13d-1(a) of the rules and regulations promulgated under the Exchange Act indicating an intention, plan or proposal with respect to any of the events described in clauses (i) through (v) above or with respect to any recapitalization or restructuring of the Company;

(vii) otherwise act in concert with others (other than with other Investor Securityholders and their Affiliates) to publicly effect or seek, offer or propose to effect, control of the Company in such a manner that would result in the Investor Securityholders having to file or amend a statement on Schedule 13D pursuant to Rule 13d-1(a) of the rules and regulations promulgated under the Exchange Act; or

(viii) enter into any arrangements with any third party concerning any of the foregoing.

(b) If, at any time prior to the termination of the Standstill Period, (i) the Company has entered into a definitive agreement, the consummation of which would result in a Company Change in Control Event, (ii) a third party who is not an Affiliate of the Investor Securityholders or an Affiliated Entity (a “ Third Party ”) acquires Beneficial Ownership of 20% or more of the outstanding Voting Stock; or (iii) any Person shall have commenced and not withdrawn a bona fide public tender or exchange offer which if consummated would result in a Company Change in Control Event and the Board has not recommended that the stockholders of the Company reject such offer within the time period contemplated by Rule 14d-9 under the Exchange Act, in each case, then for so long as such condition continues to apply, the limitation on the actions described in clauses (ii), (iii), (iv), (v), (vi), (vii) and (viii) of Section 5.6(a) (and

any related acquisition of Beneficial Ownership by the Investor Securityholders and/or their Affiliates) shall not be applicable to the Investor Securityholders.

(c) Anything in this Section 5.6 to the contrary notwithstanding, this Section 5.6 shall not be construed to prohibit or restrict any actions taken by the any designee, nominee or appointee (including the Appointed Directors and the Nominated Directors) on the Board, in their capacities as a member of the Board and in compliance with and subject to his or her fiduciary duties as a member of the Board or the exercise of the Investor Securityholders’ rights pursuant to Section 7.4 and 8.2 (and any related disclosure on Schedule 13D pursuant to Rule 13d-1(a) of the rules and regulations promulgated under the Exchange Act).

5.7 Preemptive Rights .

(a) From Closing until such time that the SLS Beneficial Ownership Percentage is less than 10%, the Company shall not issue any Company Securities to any Person, unless the Company offers the right (the “ Participation Right ”) to each Investor Securityholder to purchase its pro rata portion (as specified below) of such Company Securities at the same price per security (payable in cash) and otherwise upon the same terms and conditions as those offered to such Person in accordance with the procedures set forth in this Section 5.7 ; provided that Participation Rights shall not be applicable to the issuance of Company Securities: (i) issued as consideration pursuant to an acquisition of the stock, assets or business of another Person by the Company or any of its Subsidiaries, (ii) issued to directors, officers, employees or individuals who are consultants pursuant to any Approved Stock Plan, (iii) pursuant to a stock split, stock dividend or similar transaction in which all holders of Common Stock are treated equally on a pro rata basis, (iv) pursuant to the payment of paid-in-kind interest on indebtedness for borrowed money incurred by the Company or any of its Subsidiaries, (v) pursuant to the conversion, exchange or exercise of a Company Security that is either (A) outstanding on the Closing Date substantially in accordance with the terms in effect on the Closing Date or (B) outstanding after the Closing Date as long as, in the case of clause (B), the Investor Securityholders have had an opportunity to exercise their Participation Rights with respect to the underlying Company Security or such Company Security was issued pursuant to clause (i), (ii) or (iv) of this sentence, and (vi) pursuant to an offering of the type described to in clause (i) of the definition of “Public Sale” of Company Securities. For purposes of clarity, the parties agree that the issuance of Conversion Shares upon conversion or exercise of the Securities or the 8% Notes shall not be subject to the Participation Rights.

(b) The Company shall send a written notice (the “ Participation Rights Notice ”) to the Investor Securityholders stating the number of Company Securities to be offered, a description of the terms of such Company Securities if not Common Stock, the price and terms on which it proposes to offer such Company Securities (including a description of any non-cash consideration and the Company’s valuation thereof determined in good faith by the Board), and a reference to the Investor Securityholders’ Participation Rights hereunder.

(c) Within ten (10) Business Days after the delivery of the Participation Rights Notice, each Investor Securityholder may elect by written notice to the Company, to purchase such Company Securities, at the price and on the terms specified in the Participation Rights Notice (or, if such price includes non-cash consideration, an amount of cash equal to the

fair market value of such non-cash consideration as determined in good faith by the Board), up to an amount (such amount, the “ Participation Amount ”) equal to the product of (i) the number of Company Securities of each class offered for sale by the Company multiplied by (ii) the quotient obtained by dividing (x) the number of shares of Common Stock Beneficially Owned by such Investor Securityholder, by (y) the number of Common Shares Outstanding. Such exercise notice will set forth the number of Company Securities of each class being purchased by each Investor Securityholder; provided , however , that the Investor Securityholder shall not be permitted to purchase any Company Securities pursuant to this Section 5.7 if, and to the extent that, such acquisition by such Investor Securityholder would require the consent of the Company’s stockholders pursuant to the applicable rules of the primary Exchange and the Company is not otherwise seeking the consent of its stockholders in connection with the issuance of such Company Securities.

(d) Subject to the last sentence of this Section 5.7(d) , the Company may offer the Company Securities specified in the Participation Rights Notice in excess of the Participation Amount, if any, to any Person or Persons at a price not less than, and on terms no more favorable to such offerees than, those set forth in such Participation Rights Notice, at any time after the Participation Rights Notice is sent but on or before the 90th day after the Participation Rights Notice was sent. In addition, during the period beginning ten (10) Business Days after the Participation Rights Notice was sent and ending on the 90th day after the Participation Rights Notice was sent, the Company may offer any Company Securities of the Participation Amount that are not elected to be purchased by the Investor Securityholders to any Person or Persons, provided that if such Company Securities are to be offered at a price less than, or on terms materially more favorable to such offerees than, those specified in the Participation Rights Notice, the Company shall promptly notify the Investor Securityholders in writing of such modified terms (a “ Subsequent Notice ”) and the Investor Securityholders shall have five (5) Business Days after the receipt of such notice in which to elect to purchase the Participation Amount of such Company Securities at the price and on the terms specified in such Subsequent Notice.

(e) The closing of the purchase of Company Securities by the Investor Securityholders pursuant to this Section 5.7 shall occur as promptly as practicable following the notice to the Company by the Investor Securityholders to exercise their Participation Rights; provided that such closing shall be subject to and shall occur not earlier than the later of (x) concurrently with the closing of the purchase of Company Securities by such offeree and (y) 15 Business Days after delivery of written notice by the Investor Securityholders of their election to purchase such Company Securities (unless the delay with respect to the purchase by the Investor Securityholders results from the requirement to obtain regulatory approval for the purchase by an Investor Securityholders that is not required for purchasers which are not Investor Securityholders, in which case the closing of the purchase by such Investor Securityholders shall occur promptly after receipt of such regulatory approval). The closing of the purchase of Company Securities by the Investor Securityholders pursuant to this Section 5.7 shall also be subject to the receipt of any necessary regulatory approvals, the expiration of any required waiting periods and applicable Law. Unless otherwise set forth in writing by the Company, the Company shall have no obligation to consummate the issuance to such third-party offerees giving rise to the Participation Rights and the Company shall have no obligation to negotiate the price or other terms of the offering of Company Securities with any Investor Securityholders.

5.8 Indemnification; Freedom to Pursue Opportunity . Sections 3 and 5 of the Transaction Fee Agreement is incorporated herein, mutatis mutandis , in the same manner as if the Investor Securityholders and each of their respective partners, stockholders, members, directors, officers, fiduciaries, managers, controlling Persons, employees and agents and each of the partners, stockholders, members, directors, officers, fiduciaries, managers, controlling Persons, employees and agents of each of the foregoing were an “Indemnified Party” thereunder.

6. Conditions Precedent .

6.1 Conditions to Each Party’s Obligation to Consummate the Closing . The respective obligations of each Purchaser and the Company to consummate the Closing are subject to the satisfaction or waiver of the following conditions

(a) No Governmental Entity of competent jurisdiction shall have (i) enacted, issued or promulgated any Law that is in effect and has the effect of making the Closing illegal in any jurisdiction in which the Company has material business or operations or which has the effect of prohibiting or otherwise preventing the consummation of the Closing in any jurisdiction in which the Company has material business or operations, or (ii) issued or granted any order, decree or injunction that is in effect and has the effect of making the Closing illegal.

(b) The Certificate of Designation shall have been accepted for filing with the Secretary of State of the State of Delaware.

(c) The parties shall have worked in good faith to prepare and shall have finalized the Series B Certificate of Designation and the Series C Certificate of Designation in forms consistent with the terms of the Series B Junior Preferred Term Sheet and the Series C Junior Preferred Term Sheet, respectively.

6.2 Conditions to the Obligation of the Purchasers to Consummate the Closing . The several obligations of each Purchaser to consummate the transactions to be consummated at the Closing, and to purchase and pay for the Securities being purchased by it at the Closing pursuant to this Agreement, are subject to the satisfaction or waiver of the following conditions precedent:

(a) The representations and warranties of the Company contained herein shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date, except (i) for any failure to be so true and correct which has not had and would not have, individually or in the aggregate, a Material Adverse Effect (other than the representations and warranties of the Company set forth in Sections 3.2 , 3.3 , 3.4 and 3.25 , each of which shall be true and correct in all material respects and subject to (ii) below), and (ii) for those representations and warranties which address matters only as of a particular date, which representations and warranties shall have been true and correct as of such particular date, except for any failure to be so true and correct as of such particular date which has not had and would not, individually or in the aggregate, have a Material Adverse Effect (or, the case of Section 3.2 , which shall be true and correct in all material respects); provided , however , that, for purposes of determining the accuracy of the representations and warranties of the Company set

forth herein for purposes of this Section 6.2(a) , all “Material Adverse Effect” and “material” qualifications set forth in such representations and warranties shall be disregarded.

(b) The Company shall have performed in all material respects all obligations and conditions herein required to be performed or observed by the Company on or prior to the Closing Date.

(c) Each Purchaser shall have received a certificate, dated the Closing Date, signed by the Chief Executive Officer or the Chief Financial Officer of the Company, certifying on behalf of the Company that the conditions specified in Sections 6.2(a) , 6.2(b) and 6.2(d) have been fulfilled.

(d) Since the date of this Agreement, no Material Adverse Effect shall have occurred and be continuing.

(e) The Company shall have executed and delivered the Registration Rights Agreement.

(f) The Company and the Trustee shall have executed and delivered the Indenture.

(g) The Company and The Bank of New York Mellon Trust Company, N.A., as trustee, shall have executed and delivered the Supplemental Indenture.

(h) The Pledgors (as defined in the Pledge Agreement) and the Collateral Agent (as defined in the Pledge Agreement) shall have executed and delivered the Amendment to the Pledge and Security Agreement substantially in the form attached hereto as Exhibit I (the “ Pledge Agreement Amendment ”).

(i) The Company shall have purchased no less than $20 million in aggregate principal amount of the 8% Notes pursuant to Consent and Purchase Agreements substantially in the form attached hereto as Exhibit J , which agreements shall not have been amended, modified, supplemented or waived in any material respect following execution and delivery thereof.

(j) The Company shall have executed and delivered the Transaction Fee Agreement in the form attached hereto as Exhibit K (the “ Transaction Fee Agreement ”).

(k) Each Purchaser shall have received from counsel to the Company, an opinion substantially in the form attached hereto as Exhibit L .

6.3 Conditions to the Obligation of the Company to Consummate the Closing . The obligation of the Company to consummate the transactions to be consummated at the Closing, and to issue and sell to each Purchaser the Securities to be purchased by it at the Closing pursuant to this Agreement, is subject to the satisfaction or waiver of the following conditions precedent:

(a) The representations and warranties contained herein of each Purchaser shall be true and correct on and as of the Closing Date, with the same force and effect as though made on and as of the Closing Date, except (i) for any failure to be so true and correct which has not had and would not have, individually or in the aggregate, a Purchaser Adverse Effect (other than the representations and warranties of such Purchaser set forth in Section 4.2 , which shall be true and correct in all material respects), and (ii) for those representations and warranties which address matters only as of a particular date, which representations shall have been true and correct as of such particular date, except for any failure to be so true and correct as of such particular date which has not had and would not, individually or in the aggregate, have a Purchaser Adverse Effect.

(b) Each Purchaser shall have performed in all material respects all obligations and conditions herein required to be performed or observed by such Purchaser on or prior to the Closing Date.

(c) The Company shall have received a certificate, dated the Closing Date, on behalf of each Purchaser, signed by a senior executive officer thereof, certifying on behalf of each Purchaser that the conditions specified in the foregoing Sections 6.3(a) and 6.3(b) have been fulfilled.

(d) The Trustee shall have executed and delivered the Indenture.

(e) The Bank of New York Mellon Trust Company, N.A., as trustee, shall have executed and delivered the Supplemental Indenture.

(f) Each Purchaser shall have executed and delivered the Registration Rights Agreement.

(g) Each Purchaser shall have delivered to the Company a properly executed withholding certificate.

7. Governance; Information Rights .

7.1 Board Representation .

(a) Immediately Following Closing . Subject to the limitations set forth in this Section 7.1 , effective immediately following the Closing:

(i) for so long as the Preferred Representation Entitlement is greater than zero (0) (the “ Preferred Entitlement Period ”), the Investor Securityholders shall have the right to designate, nominate or appoint that number of Directors, and the Company shall nominate and recommend for election at each annual or special meeting of the holders of Convertible Preferred Stock at which Preferred Directors are to be elected such Directors (each, an “ Appointed Director ”) equal to the Preferred Representation Entitlement; and

(ii) without limiting, and in addition to, the rights set forth in clause (i) above, for so long as the Nomination Representation Entitlement is greater than zero (0) (the “ Nomination Entitlement Period ”), the Investor Securityholders shall have the right to

designate, nominate or appoint that number of Directors, and the Company shall nominate and recommend such Directors for election as a Director as part of the slate that is included in the proxy statement (or consent solicitation or similar document) of the Company relating to the election of Directors by the holders of Common Stock, and shall provide the highest level of support for the election of such Directors (each, a “ Nominated Director ”) as the Company provides to any other individual standing for election as a Director as part of the Company’s slate of Directors, equal to the Nomination Representation Entitlement; provided that notwithstanding the Nomination Representation Entitlement being greater than zero (0), the Investor Securityholders shall not have the right to designate, nominate or appoint any Nominated Director resulting from the application of clause (a)(ii) of the definition of “Nomination Representation Entitlement” until the earlier of (x) a vacancy created with respect to a Board seat that was not held by an Appointed Director or a Nominated Director and (y) the Company’s 2010 annual meeting of the stockholders; provided , further that any nominee resulting from the application of clause (a)(ii) of the definition of “Nomination Representation Entitlement” shall be a director satisfying the criteria set forth in Section 7.1(c)(ii) hereof (an “ Independent Director ”).

(b) During the Entitlement Period .

(i) Nominated Directors . Upon the occurrence of an increase in the authorized number of Directors then constituting the Board that results in an increase in the Nomination Representation Entitlement to a number greater than the number of Nominated Directors then serving on the Board, the Investor Securityholders shall have the right to designate, nominate or appoint that number of additional Nominated Directors such that the total number of Nominated Directors (after giving effect to such designation, nomination or appointment) shall be equal to the Nomination Representation Entitlement at such time.

(ii) Vacancy . In the event that a vacancy is created at any time with respect to a Board seat held by an Appointed Director or a Nominated Director by reason of the death, disability, retirement, resignation or removal (with or without cause) of such Director, the Investor Securityholders may designate, nominate or appoint another individual to be elected to fill the vacancy created thereby, and the Company shall use its reasonable best efforts to take at any time and from time to time, all actions necessary to accomplish the same, but in any case, only to the extent required to maintain the then applicable Preferred Representation Entitlement and/or Nomination Representation Entitlement, as applicable, provided that for the avoidance of doubt, this sentence shall not be deemed to require the Company to amend or seek to amend its restated certificate of incorporation. For the avoidance of doubt, this Section 7.1(b)(ii) does not apply to any vacancy arising as a result of failure of an Appointed Director or a Nominated Director, as the case may be, who has been nominated and recommended by the Company in accordance with Section 7.1(a) to be elected, but any such failure to be elected shall in no way affect the right of the Investor Securityholders to designate, nominate or appoint another individual in replacement thereof as a nominee for Appointed Director or Nominated Director, as the case may be, with respect to the next election. In addition, upon the occurrence of an increase in the authorized number of Directors then constituting the Board that results in an increase in the Preferred Representation Entitlement and/or the Nomination Representation Entitlement, as applicable, to a number greater than the number of Appointed Directors or Nominated Directors, as applicable, then serving on the Board, the Investor Securityholders shall

have the right to designate, nominate or appoint, and subject to this Section 7.1(b) , the Board shall appoint, that number of additional individuals to serve as Appointed Directors or Nominated Directors, as applicable, such that the total number of Appointed Directors or Nominated Directors, as applicable, (after giving effect to such designation, nomination or appointment) shall be equal to the Preferred Representation Entitlement and/or Nomination Representation Entitlement, as applicable, at such time.

(iii) Certain Limitations . Notwithstanding the foregoing, if after the Closing there is a change in the applicable rules of the primary Exchange on which the Common Stock is listed at the time such change becomes effective or in the interpretation thereof that would cause the Common Stock to be delisted by such Exchange as a result of the terms of this Section 7.1(b) , the voting rights of the holders of the Convertible Preferred Stock set forth in this Section 7.1(b) shall thereafter be limited to the extent required by such changed rules for the Common Stock to continue to be listed on such Exchange.

(i) Except as provided in Section 7.1(c)(ii) , unless otherwise agreed to by the Company, each Appointed Director and Nominated Director (other than the Independent Director) shall, at all times during which such Person serves as a Director, (A) (x) be a present full-time managing director of SLS Management (a “ SLS Person ”) or (y) otherwise be reasonably acceptable (in terms of suitability) to the Company’s Nominating and Governance Committee as determined in good faith in the discharge of its fiduciary duties, and (B) not be (or be a representative of or otherwise affiliated with) a direct competitor of the Company as determined in good faith by the Board. The Investor Securityholders shall not nominate or appoint any such Appointed Director or Nominated Director who does not meet the specifications set forth in this Section 7.1(c)(i) and shall cause any Appointed Director or Nominated Director to immediately resign if such director fails to meet either of the requirements set forth in clauses (i)(A) or (i)(B) above.

(ii) Each Independent Director shall, at all times during which such Person serves as a Director, (A) not be (or be a representative of or otherwise affiliated with) a direct competitor of the Company as determined in good faith by the Board, (B) not be an employee, officer or director of SLS Management or any of its Affiliates (disregarding for this purpose clause (ii) of the definition thereof), and (C) otherwise be reasonably acceptable (in terms of suitability and independence) to the Company’s Nominating and Governance Committee as determined in good faith in the discharge of its fiduciary duties. The Investor Securityholders shall not nominate or appoint any such Independent Director who does not meet the specifications set forth in this Section 7.1(c)(ii) and shall cause any Independent Director to immediately resign if such director fails to meet either the requirements set forth in clauses (ii)(A) or (ii)(B) above.

(d) Notification Regarding Directors . The Investor Securityholders shall notify the Company in writing of each proposed Nominated Director a reasonable time in advance of any action taken for the purpose of electing or appointing such Nominated Director, to fill a vacancy and of the mailing of any proxy statement, information statement or registration statement in which any Board nominee or Board member of the Company would be named

(which in the event of any proxy statement relating to an annual meeting of stockholders of the Company shall be no later than 30 days prior to the first anniversary of the mailing of the proxy statement related to the previous year’s annual meeting of stockholders), together with all information concerning such nominee reasonably requested by the Company, so that the Company may determine whether such nominee complies with the above qualifications and so that the Company can comply with applicable disclosure rules; provided that in the absence of such notice, the Investor Securityholders shall be deemed to have designated, nominated or appointed the same Directors as set forth in the most recent notice delivered to the Company pursuant to this Section 7.1(d) .

(e) Fundamental Change . The rights granted to the Investor Securityholders under this Section 7.1 shall survive a Fundamental Change to the extent that the Investor Securityholders continue to Beneficially Own in the aggregate no less than 7.5% of the Total Current Voting Power of the Survivor of a Fundamental Change, provided that for all purposes of this Section 7.1 , the board of directors of the Survivor of a Fundamental Change shall be substituted for the Board. The Investor Securityholders shall cause all Appointed Directors and/or Nominated Directors to resign from the Board effective upon the occurrence of a Fundamental Change to the extent that either (i) the Investor Securityholders are no longer entitled to designate or nominate such directors as a result of this Section 7.1(e) or (ii) the Company is not the Survivor of a Fundamental Change (subject to the appointment of such persons to the board of directors of the Survivor of the Fundamental Change, if required pursuant to the first sentence of this Section 7.1(e) ).

(f) Exercise of Rights; Resignation Letters . Unless otherwise agreed in writing by the Investor Securityholders (which agreement shall be delivered to the Company as a condition to its effectiveness and which agreement will name another Investor Securityholder who will exercise the rights pursuant to this Section 7.1 ), the Board designation, nomination and appointment rights pursuant to this Section 7.1 shall be exercised by SLS. In addition, each Appointed Director will execute and deliver to the Company a signed, undated letter of resignation which will be held by the Company and used exclusively in the event that the provisions of Section 4(d) of the Certificate of Designation are not implemented in accordance with the terms thereof insofar as they require a Preferred Director to cease to serve as a Preferred Director.

7.2 Committees . Subject to the requirements of applicable Law, the primary Exchange on which the Company’s securities are then traded and Committee Qualification Requirements, for as long as there is an Appointed Director or Nominated Director or the Preferred Representation Entitlement or the Nomination Representation Entitlement are not zero (0), the Investor Securityholders shall be entitled to designate at least one (1) Appointed Director or Nominated Director and the Board shall appoint such Director, to serve on each standing committee of the Board (each, a “ Committee ”), except that where the requirements of applicable Law, the rules of the primary Exchange on which the Company’s securities are then traded or Committee Qualification Requirements prescribe certain qualifications for such service on a standing committee of a board of directors and such Appointed Director or Nominated Director does not meet such qualifications (excluding, for this purpose, the “exceptional and limited circumstances” exception under the Marketplace Rules of NASDAQ), the Investor Securityholders shall be entitled to have at least one (1) Appointed Director or Nominated

Director be an observer to such Committee who will not be a member, voting or otherwise, of such Committee. Notwithstanding any such observer status, any Committee may hold executive sessions at which such observer is not permitted to be present and may withhold information from such observer in order to avoid any conflict of interest or in light of corporate governance concerns, or to comply with applicable Laws, and rules of the primary Exchange on which the Company’s securities are then traded, in each case as reasonably determined in good faith by such Committee.

7.3 D&O Insurance; Indemnification Agreements .

(a) During the period that an Appointed Director and/or a Nominated Director is a director of the Board, such Director shall be entitled to benefits under any director and officer insurance policy maintained by the Company to the same extent as any similarly situated director of the Board.

(b) The Company agrees that in respect of each Appointed Director and Nominated Director that is a SLS Person or an employee, officer or director of SLS Management or its Affiliates, the Company shall duly authorize and enter into an indemnification agreement substantially in the form attached hereto as Exhibit M (an “ Indemnification Agreement ”) with such Person or such other form of indemnification agreement as shall be reasonably acceptable to the Company and SLS and each of the Company, and SLS agrees to negotiate in good faith to seek to agree to and implement such alternative form by July 31, 2009.

7.4 Approval Rights . So long as the SLS Beneficial Ownership Percentage exceeds 15%, the Company shall not and shall cause its Subsidiaries to not, without the prior written consent of the Investor Securityholders:

(a) enter into or amend any Contract with any Affiliate (an “ Affiliate Transaction ”), or any series of related Affiliate Transactions, unless (i) the terms of such Affiliate Transactions are fair and reasonable to the Company, and no less favorable to the Company than could have been obtained in an arm’s length transaction with a non-Affiliate, which shall be deemed conclusively determined if the Company shall have received a fairness opinion to such effect from a nationally-recognized investment bank, (ii) such Contract is exclusively between or among the Company and one or more of its Subsidiaries, or (iii) in respect of director, trustee, officer or employee compensation (including bonuses) or other benefits (including pursuant to any employment agreement or any retirement, health, stock option or other benefit plan) or indemnification arrangements, in each case, as determined in good faith by the Board or the Company’s senior management;

(b) in any single transaction or series of related transactions, purchase or acquire any business, division, product line or capital stock, indebtedness or other securities of any Person for aggregate consideration (which will include the purchase price, plus the aggregate of any Indebtedness assumed) in excess of the greater of (x) $25,000,000 and (y) 5% of the annual consolidated net sales, determined in accordance with GAAP, of the Company and its Subsidiaries during the prior four fiscal quarters;

(c) sell, transfer or otherwise dispose of, in any single transaction or series of related transactions, (i) any Subsidiary of the Company, business, capital stock, indebtedness or other securities of any or division of the Company or its Subsidiaries, or (ii) other than in the ordinary course of the conduct of business of the Company and its Subsidiaries, any assets, which assets (x) are not obsolete, (y) are utilized in a material manner in the business of the Company and its Subsidiaries at the time of such sale, and (z) are not being replaced with assets of comparable utility or value, in each case having a value in excess of the greater of (x) $25,000,000 and (y) 5% of the annual consolidated net sales, determined in accordance with GAAP, of the Company and its Subsidiaries during the prior four fiscal quarters; or

(d) incur, create, assume, guarantee or otherwise become liable for any Indebtedness (an “ Incurrence ”) unless after giving effect to such Incurrence the outstanding consolidated Indebtedness of the Company and its Subsidiaries does not exceed the Permitted Indebtedness Amount (as defined in the Indenture).

7.5 Board Composition . For so long as the Preferred Representation Entitlement is equal to or greater than two (2), the Company shall not, without the prior written consent of the Investor Securityholders, take any action that would cause the Board to consist of fewer than nine (9) Directors.

7.6 Rights Agreement; Charter Amendment . During the period commencing on the date hereof and ending at such time as the SLS Beneficial Ownership Percentage is less than 15%:

(a) The Company agrees that it shall not take any action to amend, modify or supplement the Rights Agreement (as amended and restated by the Rights Agreement Amendment), or adopt, propose or implement any other shareholder rights plan, in each case that is adverse to the Investor Securityholders and their Affiliates relative to the terms of the Rights Agreement in effect on the date hereof as amended and restated by the Right Agreement Amendment;

(b) The Company agrees that, if any Person becomes an “Acquiring Person” (or any similarly defined term) under the Rights Agreement or any other shareholder rights plan of the Company, then to the extent the Company causes or permits the Rights Agreement or such other shareholder rights plan to dilute such Acquiring Person (or similarly defined term) as contemplated by such Rights Agreement or other shareholder rights plan in a manner other than through an exchange of shareholder rights for shares of Common Stock pursuant to the terms of Section 23 of the Rights Agreement (or the equivalent section of such other shareholder rights plan), the Company shall obtain the prior written consent of the Investor Securityholders to such manner of dilution. The Company further agrees that, to the extent it does effect such an exchange under Section 23 of the Rights Agreement (or the equivalent section of such other shareholder rights plan), the Company shall not effect such exchange with any securities, cash or other assets of the Company other than Common Stock, in each case, unless the Company has obtained the prior written consent of the Investor Securityholders to such securities, cash or other assets. In each of the foregoing cases in this Section 7.6(b) where consent of the Investor Securityholders is required, such consent shall not be unreasonably withheld or delayed; and

(c) The Company agrees that it will not directly or indirectly (including through any merger or consolidation) amend its restated certificate of incorporation in a manner that would directly or indirectly adversely affect the ability of the Investor Securityholders to Transfer the Securities and Conversion Shares to any Person (taking into account the terms of the Rights Agreement and of the relevant Securities and this Agreement) or to convert and exercise Securities or Junior Preferred Stock.

7.7 Information Rights .

(a) Subject to Sections 7.7(b) and Section 7.9 , during the Information Rights Period, the Company will deliver to the Investor Securityholders the following information:

(i) on an annual basis and promptly after it has been made available to the Board, (A) an annual budget of the Company, (B) a business plan of the Company, and (C) financial forecasts for the next fiscal year of the Company, in each case, to the extent and in such manner and form prepared by or for the Board;

(ii) on an annual basis and promptly after it has been made available to the Board, annual unaudited financial and operating reports of the Company, to the extent and in such manner and form prepared by or for the Board;

(iii) on a quarterly basis and promptly after it has been made available to the Board, unaudited quarterly financial and operating reports of the Company, to the extent and in such manner and form prepared by or for the Board;

(iv) promptly following any distribution of reports, documents or other materials to members of the Board in their capacity as a director, copies of all such reports, documents and other materials distributed, provided or otherwise made available to the Board; and

(v) such other financial, management and operating reports reasonably requested by the Investor Securityholders.

(b) If during the Information Rights Period the Company is no longer obligated to file an annual report on Form 10-K or quarterly report on Form 10-Q with the SEC, the Company shall deliver the following to the Investor Securityholders or an Appointed Director or Nominated Director (other than an Independent Director) in such manner and form as customarily provided to the Board:

(i) as soon as practicable after the end of each fiscal year of the Company, and in any event within ninety (90) days thereafter (to the extent practicable), a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and consolidated statements of income and cash flows of the Company and its Subsidiaries for such year, prepared in accordance with GAAP and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and followed promptly thereafter (to the extent it shall be available) with the opinion of the independent registered public

accounting firm selected by the Company’s Audit Committee with respect to such financial statements; and

(ii) in lieu of providing the information required under Section 7.7(a)(iii) , as soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) days thereafter (to the extent practicable), an unaudited consolidated balance sheet of the Company and its Subsidiaries as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its Subsidiaries for such period and for the current fiscal year to date, prepared in accordance with GAAP and setting forth in comparative form the figures for the corresponding periods of the previous fiscal year, subject to changes resulting from normal year-end audit adjustments, all in reasonable detail, except that such financial statements need not contain the notes required by GAAP.

(c) During the Information Rights Period, the Company shall (and shall cause its Subsidiaries to) (i) afford to the Investor Securityholders and, if reasonably requested, the accountants, counsel and other representatives and agents of the Investor Securityholders (collectively, the “ Representatives ”) reasonable access to its properties, records, books and Contracts during normal business hours upon reasonable notice as such Persons may reasonably request and (ii) make available to the Investor Securityholders and their Representatives the appropriate individuals for discussions of its business, properties and personnel upon reasonable notice as the Investor Securityholders or the Representatives may reasonably request.

7.8 VCOC Rights .

(a) With respect to each Investor Securityholder and each Affiliated Entity or a controlled Affiliate of an Investor Securityholder (for so long as they are controlled Affiliates thereof), in each case that is intended to qualify as a “venture capital operating company” as defined in the Plan Asset Regulations, that holds Securities or Conversion Shares (each, a “ VCOC Investor Securityholder ”), at the written request of such VCOC Investor Securityholder, the Company shall, with respect to each such VCOC Investor Securityholder:

(i) provide such VCOC Investor Securityholder or its designated representative with the following: (1) the right to visit and inspect any of the offices and properties of the Company and its Subsidiaries and inspect and copy the books and records of the Company and its Subsidiaries, as the VCOC Investor Securityholder shall reasonably request; (2) copies of the information set forth in Section 7.7(a) and 7.7(b) ; and (3) from and after the time, if any, that no Appointed Director is serving on the Board pursuant to the rights afforded hereunder and under the Certificate of Designation, copies of all materials provided to the Board at the same time provided to the members of the Board; and

(ii) make appropriate officers of the Company and members of the Board available periodically and at such times as reasonably requested by such VCOC Investor Securityholder for consultation with such VCOC Investor Securityholder or its designated representative with respect to matters (subject to the confidentiality provisions and procedures described in Section 7.7(c) ) relating to the business and affairs of the Company and its Subsidiaries.

The Company reserves the right to withhold any information and restrict access pursuant to this Section 7.8(a) to the extent such information or access could adversely affect the attorney-client privilege between the Company and its counsel. Notwithstanding anything herein to the contrary, in no event will the Company have any obligation to disclose any information to any Person pursuant to the terms of this Agreement if such Person is not subject to the confidentiality obligations of Section 7.9 .

(b) The Company agrees to consider, in good faith, the recommendations of each VCOC Investor Securityholder or its designated representative in connection with the matters on which it is consulted as described above, recognizing that the ultimate discretion with respect to all such matters shall be retained by the Company.

7.9 Confidentiality . (a) The Investor Securityholders agree to and shall cause each of their Affiliates and Representatives to (i) keep confidential all proprietary and non-public information regarding the Company and its Subsidiaries received pursuant to Sections 7.7 , 7.8 or otherwise hereunder, whether through an Appointed Director, a Nominated Director or otherwise (the “ Confidential Information ”), not disclose or reveal any such information to any Person without the prior written consent of the Company other than those of its Representatives who need to know such information for the purpose of evaluating, monitoring or taking any other action with respect to the investment by the Investor Securityholders in the Securities or Conversion Shares and to cause those Permitted Representatives to observe the terms of this Section 7.9 and agree for the benefit of the Company to do so and (ii) not to use such proprietary and non-public information for any purpose other than in connection with evaluating, monitoring or taking any other action with respect to the investment by the Investor Securityholders in the Securities or Conversion Shares (it being acknowledged by the Investor Securityholders that they have the obligation to comply with any applicable Laws with respect to insider trading); provided that nothing herein shall prevent the Investor Securityholders or any of their Affiliates from disclosing any such information that (1) is or becomes generally available to the public in accordance with Law other than as a result of a disclosure by an Investor Securityholder, any Affiliate, Permitted Representatives, or Subsidiaries of an Investor Securityholder or in violation of this Section 7.9 or any other confidentiality agreement between the Company and such Person or any other legal duty, fiduciary duty, or other duty of trust and confidence, of such Person, (2) was within the Investor Securityholders’ or any of its Affiliates’ possession or developed by it prior to being furnished with such information (provided that the source of such information was not bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to or other duty of trust and confidence to, the Company or a Subsidiary of it with respect to such information), (3) becomes available to the Investor Securityholders or any of its Affiliates on a non-confidential basis from a source other than the Company or a Subsidiary (provided that such source is not bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to or other duty of trust and confidence to, the Company or a Subsidiary of it with respect to such information), or (4) is required to be disclosed by Law (provided that prior to such disclosure, the Investor Securityholder or such Affiliate shall, unless prohibited by Law, promptly notify the Company of any such disclosure, use reasonable efforts to limit the disclosure requirements of such Law, and maintain the confidentiality of such information to the maximum extent permitted by Law). The Investor Securityholders shall be responsible for any breach of this Section 7.9 by any their respective Affiliates or Representatives.

8. Transfers; Redemption .

8.1 Transfer Restrictions .

(a) Subject to Section 8.1(c) , from the Closing and ending on the earlier of (x) twelve (12) months following the Closing Date and (y) the occurrence of a Restriction Termination Event (the earlier of (x) and (y), the “ Restricted Period Termination Date ”), no Investor Securityholder shall, directly or indirectly, transfer, sell, offer, assign, exchange, distribute, mortgage, pledge or otherwise dispose of (each, a “ Transfer ”) any Securities or Conversion Shares, other than as expressly permitted by, and in compliance with, the following provisions of this Section 8.1(a) :

(i) An Investor Securityholder may Transfer any or all of its Securities or Conversion Shares to any Permitted Transferee of such Investor Securityholder; provided that such Permitted Transferee (A) agrees to be bound hereunder as an Investor Securityholder, (B) agrees that the representations, covenants and other agreements made by the assignor herein are accurate in respect of, and shall be deemed to have been made by and bind such Transferee, and (C) shall execute a counterpart to this Agreement, the execution of which shall constitute such Transferee’s agreement to the terms of this Section 8.1(a)(i) . Upon such a Transfer, the Permitted Transferee shall be deemed an Investor Securityholder hereunder and shall be entitled to the rights, and subject to the obligations and restrictions, contained herein.

(ii) An Investor Securityholder may Transfer any or all of its Securities or Conversion Shares upon written consent by the Company permitting such Transfer.

(iii) An Investor Securityholder may Transfer any or all of its Securities or Conversion Shares (A) to the Company or any of its Subsidiaries or (B) pursuant to any tender offer, exchange offer, merger, consolidation, reclassification, reorganization, recapitalization or other similar transaction in which stockholders of the Company are offered, permitted or required to participate as holders of the Company’s capital stock, provided that such transaction is an Approved Transaction.

(iv) An Investor Securityholder may Transfer any or all of its Securities or Conversion Shares upon the occurrence of a Bankruptcy Event with respect to the Company or any of its Significant Subsidiaries.

(b) Subject to Section 8.1(c) , 8.1(d) , 8.1(e) and 8.1(f) , after the Restricted Period Termination Date, the Investor Securityholders shall have the right to Transfer Securities or Conversion Shares without restriction hereunder; provided that in the case of any Transfer to a Permitted Transferee, such Permitted Transferee (i) agrees to be bound hereunder as an Investor Securityholder, (ii) agrees that the representations, covenants and other agreements made by the assignor herein shall be deemed to have been made by such Transferee, and (iii) shall execute a counterpart to this Agreement, the execution of which shall constitute such Transferee’s agreement to the terms of this Section 8.1(b) . Upon such a Transfer, the Permitted Transferee shall be deemed an Investor Securityholder hereunder and shall be entitled to the rights, and subject to the obligations and restrictions, contained herein.

(c) No Investor Securityholder may, together with its Affiliates, in any single transaction or series of related transactions, whether on, before or after the Restricted Period Termination Date, Transfer to any Person or group of related Persons (other than Permitted Transferees) Securities or Conversion Shares to the extent such Person or group of related Persons would, to the knowledge of such Investor Securityholder after due inquiry (it being understood that due inquiry shall not be required in circumstances where the purchaser in a sale transaction is not reasonably identifiable, such as in a “brokers’ transaction” (as defined in Rule 144) or in an underwritten public offering), upon completion of the Transfer of such Securities or Conversion Shares Beneficially Own more than 7.5% of the Common Shares Outstanding, unless such Transfer (i) has been approved by, or is in connection with a transaction approved or recommended by, the Board or (ii) is made pursuant to a tender offer, exchange offer, merger, consolidation or similar transaction that is an Approved Transaction. To the extent that any tender offer is not an Approved Transaction, the Company will take such actions under its control as are reasonably requested on a non-public basis and in compliance with Section 5.6 by the Investor Securityholders so as to enable the Investor Securityholders to timely tender into such offer prior to expiration thereof (including any extensions thereto), Securities and/or Conversion Shares, in the event the tender offer becomes an Approved Transaction, without requiring conversion of the Securities or Junior Preferred Stock until after such time as such tender offer is an Approved Transaction.

(d) Any Transfer not made in accordance with Section 8.1 shall be null and void and of no force or effect regardless of whether the proposed Transferee had actual or constructive knowledge of the Transfer restrictions set forth herein, and no such proposed Transfer will be recorded in the books of the Company.

(e) (i) Subject to applicable Law, the Investor Securityholders (other than the Appointed Directors and the Nominated Directors with respect to any Company Securities held directly by such Persons, or indirectly by such Persons through family trusts, or similar arrangements or held directly by family members sharing the same household as such Directors) will not be subject to the Company’s trading policies requiring pre-clearance or limiting trading to specified dates (it being understood that this is not intended to modify the rights or obligations set forth in the Registration Rights Agreement), and (ii) the Investor Securityholders acknowledge their obligation hereunder not to Transfer Securities or Conversion Shares in contravention of applicable Law, including each of Section 10(b) and Rule 10b-5 of the Exchange Act.

(f) The Investor Securityholders shall not be subject to any restrictions on Transfer other than as set forth in this Agreement, applicable Law and to the extent applicable, the Registration Rights Agreement.

8.2 Right to Sell to the Company .

(a) Upon the occurrence of a Triggering Event and for a period thereafter ending twenty (20) Business Days after public announcement of the termination or appointment, as applicable, of the CEO relating to any Triggering Event, the Investor Securityholders that Beneficially Own any Notes and/or shares of Convertible Preferred Stock (collectively, the “ Redeeming Sellers ”) shall have the right (but not the obligation) to sell to the Company (the

“ Put Right ”), and if the Put Right is exercised, the Company shall purchase, all (but not less than all) such Notes and shares of Convertible Preferred Stock held by the Redeeming Sellers (the “ Redemption Securities ”) at a price in cash equal to (x) with respect to any Notes that constitute Redemption Securities, the Redemption Price (as defined in the Indenture), plus accrued but unpaid interest thereon, as of the Put Closing Date and (y) with respect to any shares of Convertible Preferred Stock that constitute Redemption Securities, the Redemption Price (as defined in the Certificate of Designation) as of the Put Closing Date.

(b) SLS, on behalf of the Redeeming Sellers, shall exercise or waive the Put Right by delivery to the Company of a written notice (the “ Put Exercise Notice ”) stating that SLS is exercising the Put Right on behalf of the Redeeming Sellers.

(c) The closing of the exercise of the Put Right (the “ Put Right Closing ”) by the Redeeming Sellers pursuant to this Section 8.2 shall take place no later than ninety (90) days following delivery of the Put Exercise Notice and shall occur at the time and place as mutually agreed upon by the Company and SLS, on behalf of the Redeeming Sellers (such date, the “ Put Closing Date ”).

(d) At the Put Right Closing, (i) SLS, on behalf of the Redeeming Sellers, shall deliver to the Company all the Redemption Securities free and clear of all Liens; and (ii) the Company shall pay the Repurchase Price for the securities being repurchased by wire transfer in immediately available funds to the account(s) specified by SLS.

(e) For purposes hereof, a “ Triggering Event ” shall mean the occurrence of any of the following: (i) the removal or termination by the Company (with or without cause) of the Company’s Chief Executive Officer (“ CEO ”) that is then currently in office without the prior written consent of SLS, on behalf of the Investor Securityholders, or (ii) following the departure of the CEO for any reason (including with the consent of the Investor Securityholders), either (x) the appointment of a successor CEO (or “acting” CEO) who is not acceptable to SLS, or (y) the failure of the Company to appoint a successor CEO (who may be an “acting” CEO, provided that a permanent CEO acceptable to SLS is appointed within 270 days after such departure) within ninety (90) days after such departure.

8.3 Legends; Securities Act Compliance .

(a) Each certificate representing the Securities and each certificate representing Conversion Shares will bear a legend conspicuously thereon to the following effect:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD UNLESS REGISTERED OR EXEMPT FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS. IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A SECURITIES PURCHASE AGREEMENT AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN ACCORDANCE WITH SUCH AGREEMENT.”

(b) The requirement imposed by Section 8.3(a) shall cease and terminate as to any particular Security or Conversion Share (i) when, in the opinion of counsel reasonably acceptable to the Company, such legend is no longer required in order to assure compliance by the Company with the Securities Act or (ii) when such Securities or Conversion Shares have been effectively registered under the Securities Act or Transferred in compliance with Rule 144. Wherever such requirement shall cease and terminate as to any Securities or Conversion Shares the holder thereof shall be entitled to receive from the Company, without expense, new certificates not bearing the legend set forth in Section 8.3(a) .

(c) In the event that any Notes, shares of Convertible Preferred Stock, Conversion Shares or Warrants are Transferred in compliance with Section 8.1(a)(iii) , the Company shall promptly, upon request, but in any event not later than is necessary in order to consummate such Transfer, remove the second sentence of the legend set forth above in connection with such Transfer.

9. Termination .

9.1 Conditions of Termination . Notwithstanding anything to the contrary contained herein, this Agreement may be terminated at any time before the Closing (a) by mutual consent of the Company and the Purchasers, (b) by either the Company, on the one hand, or the Purchasers, on the other hand, if the Closing shall not have occurred on or prior to 5:00 p.m., New York time, on June 1, 2009 and the failure to close by such date shall not be the result of the breach of this Agreement by the party or parties seeking to terminate this Agreement pursuant to this Section 9.1(b) or by any of their Affiliates, or (c) by either the Company, on the one hand, and the Purchasers, on the other hand, if any Governmental Entity of competent jurisdiction shall have (i) enacted, issued or promulgated any Law that is in effect and has the effect of making the transactions contemplated by the Transactions Agreements illegal or which has the effect of prohibiting or otherwise preventing the consummation of the transaction contemplated by the Transaction Agreement, or (ii) issued or granted any order, decree or injunction that is in effect and has the effect of making the transactions contemplated by the Transaction Agreements illegal or which has the effect of prohibiting or otherwise preventing the transactions contemplated by the Transaction Agreement, and such order, decree or injunction has become final and non-appealable.

9.2 Effect of Termination . In the event of any termination pursuant to Section 9.1 hereof, this Agreement shall become null and void and have no effect, with no liability on the part of the Company or the Purchasers, or their directors, partners, members, employees, affiliates, officers, stockholders or agents or other representatives, with respect to this Agreement, except (a) for the terms of this Section 9.2 , which shall survive the termination of this Agreement, and (b) that nothing herein shall relieve any party or parties hereto, as applicable, from liability for any willful breach of, or fraud in connection with, this Agreement.

10. Miscellaneous Provisions .

10.1 Public Statements or Releases . Neither the Company nor any Purchaser shall make any public release or announcement with respect to the existence or terms of this

Agreement or the transactions provided for herein without the prior approval of the Company, on the one hand, and SLS, on behalf of the Purchasers, on the other hand, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, nothing in this Section 10.1 shall prevent any party from making any public release or announcement it considers necessary in order to satisfy its obligations under law or under the rules or regulations of any Exchange, in which case the party or parties, as applicable, required to make the release or announcement shall, to the extent reasonably practicable, allow the other party or parties, as applicable, reasonable time to comment on such release or announcement in advance of such issuance.

10.2 Interpretation . The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and subsection references are to this Agreement unless otherwise specified. The headings in this Agreement are included for convenience of reference only and will not limit or otherwise affect the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.” The phrases “the date of this Agreement,” “the date hereof” and terms of similar import, unless the context otherwise requires, will be deemed to refer to the date set forth in the first paragraph of this Agreement. The meanings given to terms defined herein will be equally applicable to both the singular and plural forms of such terms. All matters to be agreed to by any party hereto must be agreed to in writing by such party unless otherwise indicated herein. References to agreements, policies, standards, guidelines or instruments, or to statutes or regulations, are to such agreements, policies, standards, guidelines or instruments, or statutes or regulations, as amended or supplemented from time to time (or to successors thereto). All references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person, unless otherwise indicated or the context otherwise requires. The parties hereto agree that they have been represented by counsel during the negotiation and execution of the Transaction Agreements and, therefore, waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

10.3 Notices . Any notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed to be given when delivered in person or by private courier with receipt, if telefaxed when verbal or email confirmation from the recipient is received, or three (3) days after being deposited in the United States mail, first-class, registered or certified, return receipt requested, with postage paid and,

(a) if to the Company, addressed as follows:

Power-One, Inc.

740 Calle Plano

Camarillo, California 93012

Attention: Tina Mcknight, Esq.

Facsimile: (805) 383-5898

with copies (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP

333 South Grand Avenue

Los Angeles, California 90071

Attention: Jennifer Bellah Maguire

Facsimile: (213) 229-6986

(b) if to any Purchaser, to:

c/o Silver Lake Sumeru Fund, L.P.

2775 Sand Hill Road, Suite 100

Menlo Park, California 94025

Attention: Karen King

Facsimile: (650) 234-2502

with copies (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

2550 Hanover Street

Palo Alto, California 94304

Attention: Richard Capelouto

Facsimile: (650) 251-5002

Any Person may change the address to which notices and communications to it are to be addressed by notification as provided for herein.

10.4 Severability . In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

10.5 Governing Law; Jurisdiction; WAIVER OF JURY TRIAL .

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.

(b) Each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of any state court located within New Castle County, State of Delaware in connection with any matter based upon or arising out of this Agreement or the transactions contemplated hereby, agrees that process may be served upon them in any manner authorized by the laws of the State of Delaware for such persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and process. Each party hereto hereby agrees not to commence any legal proceedings relating to or arising out of this Agreement or the transactions contemplated hereby in any jurisdiction or courts other than as provided herein.

(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PURCHASERS OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

10.6 Specific Performance . The parties hereto agree that the obligations imposed on them in this Agreement are special, unique and of an extraordinary character, and that, in the event of breach by any party, damages would not be an adequate remedy and each of the other parties shall be entitled to specific performance and injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity; and the parties hereto further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief.

10.7 Waiver . Subject to Section 10.14 , no waiver of any term, provision or condition of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement. Any agreement on the part of a party hereto to any waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party or parties, as applicable. Any delay in exercising any right under this Agreement shall not constitute a waiver of such right.

10.8 Fees; Expenses .

(a) Except as set forth in Sections 5.2 and 5.8 and this Section 10.8 , all fees and expenses incurred in connection with the Transaction Agreements and the transactions contemplated hereby and thereby shall be paid by the party or parties, as applicable, incurring such expenses whether or not the transactions contemplated hereby and thereby are consummated.

(b) At the Closing, the Company shall reimburse the Purchasers and their Affiliates for all of their reasonable, documented out-of-pocket fees and expenses, including the fees and expenses of attorneys, accountants and consultants employed by the Purchasers and/or the Affiliated Entities, incurred in connection with the Purchasers’ due diligence review of the Company and its Subsidiaries, the structuring of the transactions contemplated by this Agreement and the other Transaction Agreements and the negotiation, execution and delivery of this Agreement and the other Transaction Agreements and the closing of the transactions hereunder (including, for the avoidance of doubt, all fees and expenses relating to services or activities that by their nature occur post-Closing or are typically rendered post-Closing (all such fees and expenses included in this Section 10.8(b) , the “ Transaction Expenses ”); provided that such Transaction Expenses reimbursed pursuant to this Section 10.8(b) shall not exceed $1,000,000.

(c) The Company shall pay any and all documentary, stamp or similar issue or transfer Tax payable in connection with this Agreement, the issuance of the Securities at Closing.

(d) The Company shall reimburse each Appointed Director and each Nominated Director for their reasonable out of pocket expenses incurred for the purpose of attending meetings of the Board or committees thereof, to the extent covered by, and in accordance with, the Company’s reimbursement policy in effect from time to time.

10.9 Assignment . Except for the assumption of obligations of a Permitted Transferee, none of the parties may assign its rights or obligations under this Agreement or designate another person (i) to perform all or part of its obligations under this Agreement or (ii) to have all or part of its rights and benefits under this Agreement, in each case without the prior written consent of (x) the Company, if an Investor Securityholder is assigning its interests hereunder, and (y) SLS, on behalf of the Investor Securityholders, if the Company is assigning its interests hereunder. In the event of any assignment in accordance with the terms of this Agreement, the assignee shall specifically assume and be bound by the provisions of the Agreement by executing a writing agreeing to be bound by and subject to the provisions of this Agreement and shall deliver an executed counterpart signature page to this Agreement and, notwithstanding such assumption or agreement to be bound hereby by an assignee, no such assignment shall relieve any party assigning any interest hereunder from its obligations or liability pursuant to this Agreement. Notwithstanding the foregoing, other than the rights provided for in the Registration Rights Agreement or provided to third parties pursuant to Sections 5.8 and 10.8 , none of the rights provided to the Purchasers or the Investor Securityholders pursuant this Agreement, and in particular in Sections 5 and 7 , shall be assignable or otherwise transferable to any other Person other than a Permitted Transferee.

10.10 Survival . The representations, warranties, covenants and agreements of the Company and the Purchasers in this Agreement shall survive the Closing Date.

10.11 No Third Party Beneficiaries . Except as specifically provided in Sections 5.8 (with respect to which any Person named therein shall be a third party beneficiary), 7.1(f) (with respect to which any designating, nominating or appointing Person named therein shall be a third party beneficiaries), 7.3 (with respect to which the Appointed Directors and Nominated Directors named therein shall be third party beneficiaries), 7.8 (with respect to which all VCOC Investor Securityholders provided therein shall be third party beneficiaries), 10.8(b) (with respect to which all Affiliated Entities named therein shall be third party beneficiaries) and 10.8(d) (with respect to which all Appointed Directors and Nominated Directors named therein shall be third party beneficiaries), this Agreement does not create any rights, claims or benefits inuring to any Person that is not a party hereto nor create or establish any third party beneficiary hereto.

10.12 Counterparts . This Agreement may be executed and delivered (including by facsimile or electronic transmission) in any number of counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed an original, but all of which taken together shall constitute a single instrument.

10.13 Entire Agreement; Amendments . This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Disclosure Schedule, Annexes and the Exhibits hereto, constitute the entire agreement between the parties hereto respecting the subject matter hereof and supersede all prior agreements, negotiations, understandings, representations and statements respecting the subject