Netflix (NFLX)

Initial Conditions Precedent

(a) Principal Credit Documents.

(i) This Agreement, duly executed by the Borrower, each Lender and the Administrative Agent;

(ii) A Note payable to each Lender, each duly executed by the Borrower;

(iii) The Pledge Agreement in form and substance satisfactory to the Administrative Agent, duly executed by the Borrower and the Administrative Agent; and

(iv) A completed Collateral Certificate, duly executed by the Borrower.

(b) Borrower Organizational Documents.

(i) The certificate of incorporation of the Borrower, certified as of a recent date prior to the Closing Date by the Secretary of State (or comparable official) of the Borrower’s state of incorporation;

(ii) A certificate of the Secretary or an Assistant Secretary of the Borrower, dated the Closing Date, certifying (A) that attached thereto is a true and correct copy of the bylaws of the Borrower as in effect on the Closing Date; (B) that attached thereto are true and correct copies of resolutions duly adopted by the board of directors of the Borrower and continuing in effect, which authorize the execution, delivery and performance by the Borrower of this Agreement and the other Credit Documents executed or to be executed by the Borrower and the consummation of the transactions contemplated hereby and thereby; (C) that there are no proceedings pending for the dissolution or liquidation of the Borrower; and (D) the incumbency, signatures and authority of the officers of the Borrower authorized to execute, deliver and perform this Agreement, the other Credit Documents and all other documents, instruments or agreements related thereto executed or to be executed by the Borrower;

(iii) Certificates of good standing (or comparable certificates) for the Borrower, certified as of a recent date prior to the Closing Date by the Secretary of State (or comparable official) of Delaware and the State of California; and

(iv) Certificates of the Franchise Tax Board, Secretary of State or comparable official of the same states referenced in clause (iii) above for the Borrower, dated as of a date close to the Closing Date, stating that the Borrower is in good tax standing under the laws of such states.

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(c) Financial Statements, Financial Condition, Etc.

(i) A copy of the audited Financial Statements of the Borrower and its Subsidiaries for fiscal years ended December 31, 2006 through 2008 (prepared on a consolidated basis), each with an unqualified opinion from KPMG LLP;

(ii) A copy of the unaudited Financial Statements of the Loan Parties for the fiscal quarter ended as of June 30, 2009 (prepared on a consolidated basis), certified by the chief financial officer of the Borrower to present fairly in all material respects the financial condition, results of operations and other information reflected therein and to have been prepared in accordance with GAAP (subject to normal year-end audit adjustments and the absence of footnotes) (which certification requirement shall be satisfied by the certification provided in Exhibit 31 to the Company’s Quarterly Report on Form 10-Q for such fiscal quarter);

(iii) A copy of (and the Administrative Agent’s and Required Lenders’ satisfactory review of) the projected financial statements of the Loan Parties by fiscal year for each of the fiscal years through the Maturity Date, including, in each case, projected balance sheets, statements of income and retained earnings and statements of cash flow of the Loan Parties, all in reasonable detail and in any event to include quarterly projections for the first two years after the Closing Date, all prepared by a financial officer of the Borrower;

(iv) A certificate of the Borrower as to the financial condition and solvency of the Borrower on a pro forma basis after giving effect to the transactions and the Borrowings necessary to pay all fees, costs and other expenses related hereto, in form and substance reasonably satisfactory to the Administrative Agent certified by the chief financial officer or other officer familiar with the financial operations of the Borrower; and

(v) Such other financial, business and other information regarding the Borrower or any other Loan Party as the Administrative Agent, the L/C Issuer or any Lender may reasonably request.

(d) Collateral Documents.

(i) Evidence that upon the filing of appropriate financing statements the Administrative Agent will have a valid, perfected first priority Lien on all Collateral, subject to Permitted Liens;

(ii) Uniform Commercial Code search certificates from the jurisdictions in which Uniform Commercial Code financing statements are to be filed pursuant to subsection (d)(i) above reflecting no other financing statements or filings which evidence Liens of other Persons in the Collateral which are prior to the Liens granted to the Administrative Agent in this Agreement, the Security Documents and the other Credit Documents, except for any such prior Liens (a) which are expressly permitted by this Agreement to be prior or (b) for which the Administrative Agent has received a termination statement or and has made a satisfactory arrangement concerning the termination of the Liens securing such Indebtedness pursuant to subsection (d)(ii) above;

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(iii) Such other documents, instruments and agreements as the Administrative Agent may reasonably request to establish and perfect the Liens granted to the Administrative Agent or any Lender in this Agreement, the Security Documents and the other Credit Documents; and

(iv) Such other evidence as the Administrative Agent may reasonably request to establish that the Liens granted to the Administrative Agent or any Lender in this Agreement, the Security Documents and the other Credit Documents are or upon the proper filings shall be perfected and prior to the Liens of other Persons in the Collateral, except for any such Liens which are expressly permitted by this Agreement to be prior.

(e) Opinion. A favorable written opinion from Wilson Sonsini Goodrich & Rosati, P.C., special counsel for the Borrower dated the Closing Date, addressed to the Administrative Agent for the benefit of the Administrative Agent and the Lenders, covering such legal matters as the Administrative Agent may reasonably request and otherwise in form and substance satisfactory to the Administrative Agent.

(f) Other Items.

(i) A duly completed and timely delivered Notice of Borrowing;

(ii) Due diligence satisfactory to the Administrative Agent and the Lenders shall have been completed (including, without limitation, corporate/company documentation, ownership and organizational structure);

(iii) Since December 31, 2008, no event or circumstance shall have occurred that has resulted or could reasonably be expected to result in a material adverse change in the business, operations, condition (financial or otherwise), assets, or liabilities (whether actual or contingent) of the Borrower individually or the Loan Parties (taken as a whole);

(iv) There shall not exist (A) any order, decree, judgment, ruling or injunction which restrains any part of the consummation of the transactions contemplated under this Agreement in the manner contemplated by the Credit Documents (or any documents executed in connection therewith); or (B) any litigation shall be pending or, to the Borrower’s knowledge, threatened against any Loan Party as of the Closing Date which could reasonably be expected to have a Material Adverse Effect;

(v) A certificate of a Responsible Officer of the Borrower, addressed to the Administrative Agent and dated the Closing Date, certifying that:

(A) The representations and warranties set forth in Article IV and in the other Credit Documents are true and correct in all material respects (except to the extent that such representation and warranty is qualified by materiality, in which case such representation and warranty must be true in all respects) as of such date (except for such representations and warranties made as of a specified date, which shall be true as of such date); and

(B) No Default has occurred and is continuing as of such date;

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(vi) All fees and expenses payable to the Administrative Agent and the Lenders on or prior to the Closing Date (including all fees payable to the Administrative Agent pursuant to the Fee Letter);

(vii) All fees and expenses of counsel to the Administrative Agent invoiced through the Closing Date; and

(viii) Such other evidence as the Administrative Agent or any Lender may reasonably request to establish the accuracy and completeness of the representations and warranties and the compliance with the terms and conditions contained in this Agreement and the other Credit Documents.

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