Amended And Restated Credit Agreement Dated As of May 25, 2007

EXECUTION


AMENDED AND RESTATED
CREDIT AND GUARANTY AGREEMENT


DATED AS OF MAY 25, 2007 AND EFFECTIVE AS OF MAY 31, 2007


AMONG


H3C HOLDINGS LIMITED,
AS BORROWER


3COM CORPORATION, 3COM HOLDINGS LIMITED AND 3COM TECHNOLOGIES,
AS HOLDCO GUARANTORS


H3C TECHNOLOGIES CO., LIMITED,
AS A GUARANTOR


VARIOUS LENDERS,


GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS MANDATED LEAD ARRANGER, BOOKRUNNER, ADMINISTRATIVE AGENT
AND SYNDICATION AGENT,


AND


INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED,
AS COLLATERAL AGENT


----------


$430,000,000 SENIOR SECURED CREDIT FACILITY


----------


TABLE OF CONTENTS


PAGE
---- SECTION 1. DEFINITIONS AND INTERPRETATION................................ 2
1.1. DEFINITIONS...................................................... 2
1.2. ACCOUNTING TERMS................................................. 32
1.3. INTERPRETATION, ETC.............................................. 32
1.4. AMENDMENT AND RESTATEMENT........................................ 32


SECTION 2. LOANS......................................................... 33
2.1. TERM LOANS....................................................... 33
2.2. [RESERVED]....................................................... 34
2.3. [RESERVED]....................................................... 34
2.4. [RESERVED]....................................................... 34
2.5. PRO RATA SHARES; AVAILABILITY OF FUNDS........................... 34
2.6. USE OF PROCEEDS.................................................. 34
2.7. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.... 34
2.8. INTEREST ON LOANS................................................ 35
2.9. CONVERSION/CONTINUATION.......................................... 37
2.10. DEFAULT INTEREST................................................ 37
2.11. FEES............................................................ 37
2.12. SCHEDULED PAYMENTS.............................................. 38
2.13. VOLUNTARY PREPAYMENTS........................................... 38
2.14. MANDATORY PREPAYMENTS........................................... 39
2.15. APPLICATION OF PREPAYMENTS...................................... 41
2.16. GENERAL PROVISIONS REGARDING PAYMENTS........................... 42
2.17. RATABLE SHARING................................................. 44
2.18. MAKING OR MAINTAINING EURODOLLAR RATE LOANS..................... 44
2.19. INCREASED COSTS; CAPITAL ADEQUACY............................... 46
2.20. TAXES; WITHHOLDING, ETC......................................... 47
2.21. OBLIGATION TO MITIGATE.......................................... 49
2.22. REMOVAL OR REPLACEMENT OF A LENDER.............................. 49


SECTION 3. CONDITIONS PRECEDENT.......................................... 50
3.1. EXECUTION DATE................................................... 50
3.2. EFFECTIVE DATE................................................... 50


SECTION 4. REPRESENTATIONS AND WARRANTIES................................ 54
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION....... 54
4.2. EQUITY INTERESTS AND OWNERSHIP................................... 54
4.3. DUE AUTHORIZATION................................................ 55
4.4. NO CONFLICT...................................................... 55
4.5. GOVERNMENTAL CONSENTS............................................ 55
4.6. BINDING OBLIGATION............................................... 55
4.7. HISTORICAL FINANCIAL STATEMENTS.................................. 55
4.8. PROJECTIONS...................................................... 56
4.9. NO MATERIAL ADVERSE CHANGE....................................... 56


ii


4.10. NO RESTRICTED JUNIOR PAYMENTS................................... 56
4.11. ADVERSE PROCEEDINGS, ETC........................................ 56
4.12. PAYMENT OF TAXES................................................ 56
4.13. PROPERTIES...................................................... 57
4.14. ENVIRONMENTAL MATTERS........................................... 57
4.15. NO DEFAULTS..................................................... 58
4.16. MATERIAL CONTRACTS.............................................. 58
4.17. GOVERNMENTAL REGULATION......................................... 58
4.18. MARGIN STOCK.................................................... 58
4.19. EMPLOYEE MATTERS................................................ 58
4.20. EMPLOYEE PLANS AND PRACTICES.................................... 59
4.21. CERTAIN FEES.................................................... 59
4.22. SOLVENCY........................................................ 60
4.23. ACQUISITION AGREEMENT........................................... 60
4.24. COMPLIANCE WITH STATUTES, ETC................................... 60
4.25. DISCLOSURE...................................................... 60
4.26. PATRIOT ACT..................................................... 61
4.27. PRC-RELATED REPRESENTATIONS..................................... 61


SECTION 5. AFFIRMATIVE COVENANTS......................................... 62
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS........................... 63
5.2. EXISTENCE........................................................ 66
5.3. PAYMENT OF TAXES AND CLAIMS...................................... 67
5.4. MAINTENANCE OF PROPERTIES........................................ 67
5.5. INSURANCE........................................................ 67
5.6. BOOKS AND RECORDS; INSPECTIONS................................... 67
5.7. LENDERS MEETINGS................................................. 68
5.8. COMPLIANCE WITH LAWS............................................. 68
5.9. MAINTENANCE OF CREDIT RATINGS.................................... 68
5.10. [RESERVED]...................................................... 68
5.11. POST-CLOSING COLLATERAL......................................... 68
5.12. REDUCTION OF SHARE PREMIUM...................................... 68
5.13. FINANCIAL ASSISTANCE, CORPORATE BENEFIT, ETC.................... 68
5.14. ENVIRONMENTAL................................................... 69
5.15. SUBSIDIARIES.................................................... 70
5.16. ADDITIONAL MATERIAL REAL ESTATE ASSETS.......................... 70
5.17. ADDITIONAL INTELLECTUAL PROPERTY................................ 71
5.18. OTHER COLLATERAL................................................ 72
5.19. INTEREST OR CURRENCY RATE PROTECTION............................ 72
5.20. FURTHER ASSURANCES.............................................. 72
5.21. MISCELLANEOUS COVENANTS......................................... 72
5.22. PRC-RELATED COVENANTS........................................... 74
5.23. INTERCOMPANY COVENANT AGREEMENT................................. 75


SECTION 6. NEGATIVE COVENANTS............................................ 75
6.1. INDEBTEDNESS..................................................... 75
6.2. LIENS............................................................ 78


iii


6.3. NO FURTHER NEGATIVE PLEDGES...................................... 80
6.4. RESTRICTED JUNIOR PAYMENTS....................................... 80
6.5. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS......................... 81
6.6. INVESTMENTS...................................................... 81
6.7. FINANCIAL COVENANTS.............................................. 82
6.8. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS......... 84
6.9. DISPOSAL OF SUBSIDIARY INTERESTS................................. 85
6.10. SALES AND LEASE-BACKS........................................... 85
6.11. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES................... 85
6.12. CONDUCT OF BUSINESS............................................. 86
6.13. PERMITTED ACTIVITIES OF BORROWER................................ 86
6.14. AMENDMENTS OR WAIVERS OF ORGANIZATIONAL DOCUMENTS, INTERCOMPANY
COVENANT AGREEMENT AND CERTAIN MATERIAL CONTRACTS............ 86
6.15. FISCAL YEAR..................................................... 86


SECTION 7. GUARANTY...................................................... 86
7.1. GUARANTY OF THE OBLIGATIONS...................................... 86
7.2. CONTRIBUTION BY GUARANTORS....................................... 87
7.3. PAYMENT BY GUARANTORS............................................ 87
7.4. LIABILITY OF GUARANTORS ABSOLUTE................................. 88
7.5. WAIVERS BY GUARANTORS............................................ 90
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC............. 90
7.7. SUBORDINATION OF OTHER OBLIGATIONS............................... 91
7.8. CONTINUING GUARANTY.............................................. 91
7.9. AUTHORITY OF GUARANTORS OR BORROWER.............................. 91
7.10. FINANCIAL CONDITION OF BORROWER................................. 91
7.11. BANKRUPTCY, ETC................................................. 92
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR.................... 92
7.13. DISCHARGE OF GUARANTIES FROM HOLDCO GUARANTORS.................. 92


SECTION 8. EVENTS OF DEFAULT............................................. 93
8.1. EVENTS OF DEFAULT............................................... 93


SECTION 9. AGENTS........................................................ 96
9.1. APPOINTMENT OF AGENTS............................................ 96
9.2. POWERS AND DUTIES................................................ 96
9.3. GENERAL IMMUNITY................................................. 96
9.4. AGENTS ENTITLED TO ACT AS LENDER................................. 98
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.......... 98
9.6. RIGHT TO INDEMNITY............................................... 99
9.7. SUCCESSOR ADMINISTRATIVE AGENT AND COLLATERAL AGENT.............. 99
9.8. COLLATERAL DOCUMENTS AND GUARANTY................................ 100


SECTION 10. MISCELLANEOUS................................................ 101
10.1. NOTICES......................................................... 101
10.2. EXPENSES........................................................ 102


iv


10.3. INDEMNITY....................................................... 103
10.4. SET-OFF......................................................... 104
10.5. AMENDMENTS AND WAIVERS.......................................... 104
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.......................... 106
10.7. INDEPENDENCE OF COVENANTS....................................... 109
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.......... 109
10.9. NO WAIVER; REMEDIES CUMULATIVE.................................. 109
10.10. MARSHALLING; PAYMENTS SET ASIDE................................ 109
10.11. SEVERABILITY................................................... 110
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS..... 110
10.13. HEADINGS....................................................... 110
10.14. APPLICABLE LAW................................................. 110
10.15. CONSENT TO JURISDICTION........................................ 110
10.16. WAIVER OF JURY TRIAL........................................... 111
10.17. CONFIDENTIALITY................................................ 111
10.18. USURY SAVINGS CLAUSE........................................... 112
10.19. COUNTERPARTS................................................... 113
10.20. EFFECTIVENESS.................................................. 113
10.21. PATRIOT ACT.................................................... 113
10.22. ELECTRONIC EXECUTION OF ASSIGNMENTS............................ 113
10.23. JUDGMENT CURRENCY.............................................. 113
10.24. AMENDMENT AND RESTATEMENT...................................... 114
10.25. REAFFIRMATION OF AND CONFIRMATION OF GRANT OF SECURITY
INTERESTS................................................... 114


v


APPENDICES: A-1 Tranche A Term Loan Commitments
A-2 Tranche B Term Loan Commitments
B Notice Addresses


SCHEDULES: 1.1A Security Principles
4.1 Jurisdictions of Organization and Qualification
4.2 Equity Interests and Ownership
4.13 Real Estate Assets
4.16 Material Contracts
4.27 PRC Matters
6.1 Certain Indebtedness
6.2 Certain Liens
6.3 Negative Pledges
6.5 Certain Restrictions on Subsidiary Distributions
6.6 Certain Investments
6.11 Certain Affiliate Transactions


EXHIBITS: A-1 Effective Date Notice
A-2 Conversion/Continuation Notice
B-1 Tranche A Term Loan Note
B-2 Tranche B Term Loan Note
C Compliance Certificate
D-1 Opinion of New York Counsel to the Credit Parties
D-2 Opinion of Hong Kong Counsel to the Credit Parties
D-3 Opinion of Cayman Counsel to the Credit Parties
E Assignment Agreement
F [Reserved]
G-1 Effective Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement


vi


AMENDED AND RESTATED
CREDIT AND GUARANTY AGREEMENT


This AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT, dated as of May 25, 2007 and effective as of May 31, 2007, is entered into by and among H3C HOLDINGS LIMITED, a limited liability company organized under the laws of the Cayman Islands ("BORROWER"), H3C TECHNOLOGIES CO., LIMITED, a company incorporated with limited liability under the laws of Hong Kong ("H3C"), 3COM CORPORATION ("3COM"), 3COM HOLDINGS LIMITED ("3COM HOLDINGS"), 3COM TECHNOLOGIES ("3COM CAYMAN" and, together with 3Com and 3Com Holdings, the "HOLDCO GUARANTORS" and, together with H3C and any other Guarantor Subsidiaries, the "GUARANTORS"), the Lenders party hereto from time to time, GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP"), as Mandated Lead Arranger, Bookrunner, Syndication Agent (in such capacity, "SYNDICATION AGENT") and as Administrative Agent (together with its permitted successors in such capacity, "ADMINISTRATIVE AGENT"), and INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED ("ICBC"), as Collateral Agent (together with its permitted successor in such capacity, "COLLATERAL AGENT").


RECITALS:


WHEREAS, capitalized terms used in these Recitals shall have the respective meanings set forth for such terms in Section 1.1 hereof;


WHEREAS, Borrower, the Holdco Guarantors, H3C, as a Guarantor, the lenders party thereto from time to time (the "EXISTING LENDERS"), GSCP, as mandated lead arranger, bookrunner, administrative agent and syndication agent, and ICBC, as collateral agent, are parties to that certain Credit and Guaranty Agreement, dated as of March 22, 2007 (as heretofore amended, restated, supplemented or otherwise modified from time to time, the "EXISTING CREDIT AGREEMENT"), pursuant to which the Existing Lenders extended certain senior credit facilities to Borrower;


WHEREAS, Borrower desires that each of the Existing Lenders and other parties hereto agree (by the execution of this Agreement) to amend and restate the Existing Credit Agreement in its entirety to: (i) convert the $430,000,000 aggregate principal amount of senior secured term loans under the Existing Credit Agreement outstanding immediately prior to the Effective Date (the "EXISTING TERM LOANS") into (x) $230,000,000 aggregate principal amount of senior secured Tranche A Term Loans outstanding hereunder and (y) $200,000,000 aggregate principal amount of senior secured Tranche B Term Loans outstanding hereunder and (ii) make certain other changes as more fully set forth herein, which amendment and restatement shall become effective upon the Effective Date as defined herein;


WHEREAS, each of the Existing Lenders (constituting 100% of the Lenders under the Existing Credit Agreement) have, on or prior to the Effective Date, executed this Agreement or authorized Administrative Agent to execute this Agreement on their behalf;


WHEREAS, each of the Lenders (other than the Existing Lenders) have, on or prior to the Effective Date, executed this Agreement so as to agree to make the Term Loans available to


Borrower by means of purchasing part of the Term Loans from the Existing Lenders as provided for in this Agreement;


WHEREAS, Borrower has agreed to secure all of its Obligations by reaffirming its grant to Collateral Agent, for the benefit of Secured Parties, of a First Priority Lien on substantially all of its assets, including a charge of all of its Equity Interest in H3C;


WHEREAS, Guarantors have agreed to guarantee the obligations of Borrower hereunder; 3Com Cayman has agreed to reaffirm its grant of a First Priority Lien on the shares held by 3Com Cayman in Borrower; and H3C has agreed to reaffirm its grant of a First Priority lien on substantially all of its assets, including, subject to obtaining applicable governmental approvals a charge of all of the Equity Interests owned by H3C in WFOE and Queenhive;


WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities of the parties under the Existing Credit Agreement but instead that this Agreement amends and restates in its entirety the Existing Credit Agreement and re-evidences the Obligations outstanding under the Existing Credit Agreement on the Effective Date as contemplated hereby; and


WHEREAS, it is the intent of Credit Parties to confirm that all Obligations of the Credit Parties under the Existing Credit Agreement and the other Credit Documents, as amended hereby, shall continue in full force and effect and that, from and after the Effective Date, all references to the "Existing Credit Agreement" contained in this Agreement shall be deemed to refer to that certain Credit and Guaranty Agreement, dated as of March 22, 2007, prior to the effectiveness of the amendment and restatement effected hereby and all references (in whatever form) to the Existing Credit Agreement contained in the other Credit Documents shall be deemed to refer to this Agreement.


NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:


SECTION 1. DEFINITIONS AND INTERPRETATION


1.1. DEFINITIONS. The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:


"3COM" as defined in the preamble hereto.


"3COM SUBSIDIARIES" means the Subsidiaries of 3Com which are not Subsidiaries of Borrower and which may be involved in the Subsidiary Integration Transactions.


"3COM CAYMAN" as defined in the preamble hereto.


"3COM HOLDINGS" as defined in the preamble hereto.


"ACQUISITION" means the acquisition by 3Com Cayman of 49% of the issued and outstanding Equity Interests in H3C pursuant to and in accordance with the terms of the


2


Acquisition Agreement, which Equity Interests were thereafter transferred to Borrower (x) in satisfaction of the loan made by Borrower to 3Com Cayman and used by 3Com Cayman to fund, in part, the Acquisition and (y) as consideration for the issuance of one share by Borrower to 3Com Cayman.


"ACQUISITION AGREEMENT" means, collectively, (x) that certain stock purchase agreement dated as of December 22, 2006 between Seller and 3Com Cayman, as the same may be amended from time to time and (y) the terms of the Shareholders' Agreement that govern 3Com Cayman's bid to purchase 49% of the Equity Interests in H3C that was accepted by Seller in November 2006.


"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (and rounding upward to the nearest 1/100 of 1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be the offered rate which appears on the page of the Reuters Screen LIBOR01 Page which displays an average British Bankers Association Interest Settlement Rate for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (b) in the event the rate referenced in the preceding clause (a) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service which displays an average British Bankers Association Interest Settlement Rate for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (c) in the event the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the average of the offered quotation rates to first class banks in the London interbank market by Bank of America, N.A., Barclays Bank plc, JPMorganChase Bank, N.A. and The Royal Bank of Scotland Group for deposits (for delivery on the first day of the relevant period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loan of Administrative Agent, in its capacity as a Lender, for which the Adjusted Eurodollar Rate is then being determined with maturities comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, by (ii) an amount equal to (a) one minus (b) either (x) with respect to the Lenders affected thereby and which are actually maintaining reserves against "Eurocurrency liabilities", the Applicable Reserve Requirement or (y) with respect to all other Lenders, zero.


"ADMINISTRATIVE AGENT" as defined in the preamble hereto.


"ADVERSE PROCEEDING" means any action, suit, proceeding, hearing (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of Borrower or any of its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the best knowledge of Borrower or any of its Subsidiaries, threatened against or affecting Borrower or any of its Subsidiaries or any property of Borrower or any of its Subsidiaries.


3


"AFFECTED LENDER" as defined in Section 2.18(b).


"AFFECTED LOANS" as defined in Section 2.18(b).


"AFFILIATE" means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.


"AGENT" means each of Administrative Agent, Syndication Agent and Collateral Agent.


"AGENT AFFILIATES" as defined in Section 10.1(b).


"AGGREGATE AMOUNTS DUE" as defined in Section 2.17.


"AGGREGATE PAYMENTS" as defined in Section 7.2.


"AGREEMENT" means this Amended and Restated Credit and Guaranty Agreement, dated as of May 25, 2007 and effective as of May 31, 2007, as it may be amended, supplemented or otherwise modified from time to time.


"ALLOWED DISTRIBUTABLE RESERVES" means, for any period and with respect to any Person, the lesser of (i) the reserves of such Person generated for the four-Fiscal Quarter period then ended which are permitted by applicable laws, regulations and otherwise to be distributed as dividends or other distribution to the holders of such Person's Equity Interests and (ii) available Cash and Cash Equivalents on hand of such Person as of the date of determination.


"APPLICABLE MARGIN" means (i) with respect to Tranche A Term Loans that are Eurodollar Rate Loans, a percentage, per annum, determined by reference to the Leverage Ratio in effect at the date such percentage is determined as set forth below, provided that the initial Applicable Margin may not be reduced prior to the first anniversary of the Funding Date:


APPLICABLE MARGIN
FOR TRANCHE
LEVERAGE RATIO A TERM LOANS
-------------- ----------------- > 3.00:1.00 2.25% 2.00:1.00 2.00% 1.00:1.00 1.75% < or = 1.00:1.00 1.50%


4


and (ii) with respect to Tranche A Term Loans that are Base Rate Loans, an amount equal to (a) the Applicable Margin for Eurodollar Rate Loans as set forth in clause (i) above minus (b) 1.00% per annum. No change in the Applicable Margin shall be effective until three Business Days after the date on which Administrative Agent shall have received the applicable financial statements and a Compliance Certificate pursuant to Section 5.1(d) calculating the Leverage Ratio. At any ti ...