Exhibit 10.1

 

EXECUTION COPY

 

$150,000,000

 

CREDIT AGREEMENT

 

Dated as of November 7, 2003

 

Among

 

INTERNATIONAL RECTIFIER CORPORATION,

 

as Company,

 

THE INITIAL LENDERS NAMED HEREIN,

 

 

WELLS FARGO BANK, N.A.,

 

UNION BANK OF CALIFORNIA

 

as Co-Syndication Agents,

 

COMERICA BANK,

 

FLEET BANK

 

as Co-Documentation Agents

 

and

 

BNP PARIBAS

 

as Sole Arranger, Administrative Agent,
 and Initial Issuing Bank

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

 

 

 

 

 

 

 

SECTION 1.01 Certain Defined Terms

 

 

 

 

 

 

 

SECTION 1.02 Computation of Time Periods; Other Definitional Provisions

 

 

 

 

 

 

 

SECTION 1.03 Accounting Terms

 

 

 

 

 

ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT

 

 

 

 

 

 

 

SECTION 2.01 The Advances and the Letters of Credit

 

 

 

 

 

 

 

SECTION 2.02 Making the Revolving Credit Advances

 

 

 

 

 

 

 

SECTION 2.03 Issuance of and Drawings and Reimbursement Under Letters of Credit

 

 

 

 

 

 

 

SECTION 2.04 The Competitive Bid Advances

 

 

 

 

 

 

 

SECTION 2.05 Repayment of Advances

 

 

 

 

 

 

 

SECTION 2.06 Termination or Reduction of the Commitments

 

 

 

 

 

 

 

SECTION 2.07 Prepayments

 

 

 

 

 

 

 

SECTION 2.08 Interest on Revolving Credit Advances and Letter of Credit Advances

 

 

 

 

 

 

 

SECTION 2.09 Fees

 

 

 

 

 

 

 

SECTION 2.10 Conversion of Revolving Credit Advances

 

 

 

 

 

 

 

SECTION 2.11 Increased Costs, Etc

 

 

 

 

 

 

 

SECTION 2.12 Payments and Computations

 

 

 

 

 

 

 

SECTION 2.13 Taxes

 

 

 

 

 

 

 

SECTION 2.14 Sharing of Payments, Etc

 

 

 

 

 

 

 

SECTION 2.15 Use of Proceeds

 

 

 

 

 

 

 

SECTION 2.16 Evidence of Debt

 

 

 

 

 

ARTICLE III CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT

 

 

 

 

 

 

 

SECTION 3.01 Conditions Precedent to Effectiveness

 

 

 

 

 

 

 

SECTION 3.02 Initial Loan to Each Designated Subsidiary

 

 

i

--------------------------------------------------------------------------------

 

 

 

SECTION 3.03 Conditions Precedent to Each Revolving Credit Borrowing and
Issuance

 

 

 

 

 

 

 

SECTION 3.04 Conditions Precedent to Each Competitive Bid Borrowing

 

 

 

 

 

 

 

SECTION 3.05 Determinations Under Section 3.01

 

 

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES

 

 

 

 

 

 

 

SECTION 4.01 Representations and Warranties of the Company

 

 

 

 

 

ARTICLE V COVENANTS

 

 

 

 

 

 

 

SECTION 5.01 Affirmative Covenants

 

 

 

 

 

 

 

SECTION 5.02 Negative Covenants

 

 

 

 

 

 

 

SECTION 5.03 Reporting Requirements

 

 

 

 

 

 

 

SECTION 5.04 Financial Covenants

 

 

 

 

 

ARTICLE VI EVENTS OF DEFAULT

 

 

 

 

 

 

 

SECTION 6.01 Events of Default

 

 

 

 

 

 

 

SECTION 6.02 Actions in Respect of the Letters of Credit upon Default

 

 

 

 

 

ARTICLE VII GUARANTY

 

 

 

 

 

 

 

SECTION 7.01 Unconditional Guaranty

 

 

 

 

 

 

 

SECTION 7.02 Guaranty Absolute

 

 

 

 

 

 

 

SECTION 7.03 Waivers and Acknowledgments

 

 

 

 

 

 

 

SECTION 7.04 Subrogation

 

 

 

 

 

 

 

SECTION 7.05 Subordination

 

 

 

 

 

 

 

SECTION 7.06 Survival

 

 

 

 

 

ARTICLE VIII THE AGENTS

 

 

 

 

 

 

 

SECTION 8.01 Authorization and Action

 

 

 

 

 

 

 

SECTION 8.02 Agents’ Reliance, Etc

 

 

 

 

 

 

 

SECTION 8.03 BNP Paribas and Affiliates

 

 

 

 

 

 

 

SECTION 8.04 Lender Party Credit Decision

 

 

ii

--------------------------------------------------------------------------------

 

 

 

SECTION 8.05 Indemnification

 

 

 

 

 

 

 

SECTION 8.06 Successor Agents

 

 

 

 

 

 

 

SECTION 8.07 Other Agents

 

 

 

 

 

ARTICLE IX MISCELLANEOUS

 

 

 

 

 

 

 

SECTION 9.01 Amendments, Etc

 

 

 

 

 

 

 

SECTION 9.02 Notices, Etc

 

 

 

 

 

 

 

SECTION 9.03 No Waiver; Remedies

 

 

 

 

 

 

 

SECTION 9.04 Costs and Expenses

 

 

 

 

 

 

 

SECTION 9.05 Right of Set-off

 

 

 

 

 

 

 

SECTION 9.06 Binding Effect

 

 

 

 

 

 

 

SECTION 9.07 Assignments, Designations and Participations

 

 

 

 

 

 

 

SECTION 9.08 Confidentiality

 

 

 

 

 

 

 

SECTION 9.09 Execution in Counterparts

 

 

 

 

 

 

 

SECTION 9.10 No Liability of the Issuing Bank

 

 

 

 

 

 

 

SECTION 9.11 Designated Subsidiaries

 

 

 

 

 

 

 

SECTION 9.12 Jurisdiction, Etc

 

 

 

 

 

 

 

SECTION 9.13 Governing Law

 

 

 

 

 

 

 

SECTION 9.14 Judgment

 

 

 

 

 

 

 

SECTION 9.15 Substitution of Currency

 

 

 

 

 

 

 

SECTION 9.16 Waiver of Jury Trial

 

 

iii

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SCHEDULES

 

 

 

 

 

 

 

 

 

Schedule I

 

-

 

Commitments and Applicable Lending Offices

 

 

 

 

 

Schedule 2.01(b)

 

-

 

Existing Letters of Credit

 

 

 

 

 

Schedule 3.01(a)(ii)(A)(2)

 

 

 

Non-U.S. Subsidiary Guarantors (whose shares will be delivered after the
Effective Date)

 

 

 

 

 

Schedule 3.01(a)(vi)

 

-

 

Secretaries of State/Significant Subsidiaries

 

 

 

 

 

Schedule 4.01(b)

 

-

 

Subsidiaries of Loan Parties

 

 

 

 

 

Schedule 4.01(d)

 

-

 

Authorizations, Approvals, Actions, Notices and Filings

 

 

 

 

 

Schedule 4.01(h)

 

-

 

Litigation

 

 

 

 

 

Schedule 4.01(l)(i)

 

-

 

Environmental Compliance

 

 

 

 

 

Schedule 4.01(l)(ii)

 

-

 

Properties on NPL, CERCLIS or analogous list

 

 

 

 

 

Schedule 4.01(l)(iii)

 

-

 

Release of Hazardous Materials

 

 

 

 

 

Schedule 4.01(m)

 

-

 

Existing Liens

 

 

 

 

 

Schedule 5.02(e)(iv)

 

-

 

Sales of Assets

 

 

 

 

 

Schedule 5.02(f)(vi)

 

-

 

Investments

 

iv

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EXHIBITS

 

Exhibit A-1

 

-

 

Form of Revolving Credit Note

 

 

 

 

 

Exhibit A-2

 

-

 

Form of Competitive Bid Note

 

 

 

 

 

Exhibit B-1

 

-

 

Form of Notice of Revolving Credit Borrowing

 

 

 

 

 

Exhibit B-2

 

-

 

Form of Notice of Competitive Bid Borrowing

 

 

 

 

 

Exhibit C

 

-

 

Form of Assignment and Acceptance

 

 

 

 

 

Exhibit D

 

-

 

Form of Designation Letter

 

 

 

 

 

Exhibit E-1

 

-

 

Form of Security Agreement

 

 

 

 

 

Exhibit E-2

 

-

 

Form of U.S Subsidiary Guaranty

 

 

 

 

 

Exhibit E-3

 

-

 

Form of Non-U.S Subsidiary Guaranty

 

 

 

 

 

Exhibit F-1

 

-

 

Form of Opinion of Outside Counsel to the Loan Parties

 

 

 

 

 

Exhibit F-2

 

-

 

Form of Opinion of General Counsel to the Loan Parties

 

 

 

 

 

Exhibit G

 

-

 

Form of Compliance Certificate

 

 

 

 

 

Exhibit H

 

-

 

Form of Designation Agreement

 

v

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CREDIT AGREEMENT

 

CREDIT AGREEMENT dated as of November 7, 2003, among International Rectifier
Corporation, a Delaware corporation (the “Company”), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Lenders (the “Initial Lenders”), Wells Fargo Bank, N.A.
and Union Bank of California as co-syndication agents (the “Syndication
Agents”), Comerica Bank and Fleet Bank as co-documentation agents (the
“Documentation Agents”), BNP Paribas, as the sole arranger (the “Sole
Arranger”), as the initial issuing bank (the “Initial Issuing Bank”) and as
administrative agent (together with any successors appointed pursuant to
Article VIII, the “Administrative Agent”) for the Lender Parties (as hereinafter
defined).

 

PRELIMINARY STATEMENTS:

 

(1)                                  The Company has requested that the Lender
Parties lend to the Company up to $150,000,000 in a multicurrency facility in
order to refinance existing advances under the Amended and Restated Credit
Agreement dated as of November 2, 2000, as amended, among the Borrowers, the
lenders party thereto and BNP Paribas, as agent (the “Existing Credit
Agreement”) and to provide working capital for the Company and its Subsidiaries
and for other general corporate purposes permitted by this Agreement.

 

(2)                                  The Lender Parties have indicated their
willingness to agree to lend such amounts on the terms and conditions of this
Agreement.

 

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

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01  Certain Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

 

“Acquisition Expenditures” means, for any period, all cash expenditures made,
directly or indirectly, by the Company or any of its Subsidiaries for Permitted
Acquisitions.

 

“Administrative Agent” has the meaning specified in the recital of parties to
this Agreement.

 

“Administrative Agent’s Account” means (a) in the case of Advances denominated
in Dollars, the account of the Administrative Agent maintained by the
Administrative Agent at the Federal Reserve Bank of New York, 33 Liberty Street,
New York, New York 10048, ABA No. 026007689, for further credit to Account No.
750420-701-03 Reference:  International Rectifier Corporation, (b) in the case
of Advances denominated in any Foreign Currency, the account of the
Administrative Agent designated in writing from time to time by the
Administrative Agent to the Company and the Lenders for such purpose and (c) in
any such case, such other account of the Administrative Agent as is designated
in writing from time to time by the Administrative Agent to the Company and the
Lenders for such purpose or such other account maintained by the

 

--------------------------------------------------------------------------------

 

Administrative Agent and designated by the Administrative Agent in a written
notice to the Lender Parties and the Company.

 

“Advance” means a Revolving Credit Advance, a Letter of Credit Advance or a
Competitive Bid Advance.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person.  For purposes of this
definition, the term “control” (including the terms “controlling”, “controlled
by” and “under common control with”) of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Interests of such Person
or to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Interests, by contract or
otherwise.

 

“Agents” means the Administrative Agent, the Syndication Agents, the
Documentation Agents and any Person appointed by the Administrative Agent
pursuant to Section 8.07, and “Agent” means any of them, as the case may be.

 

“Agreement Value” means, for each Hedge Agreement, on any date of determination,
an amount determined by the Administrative Agent equal to:  (a) in the case of a
Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross
Border) published by the International Swap and Derivatives Association, Inc.
(the “Master Agreement”), the amount, if any, that would be payable by any Loan
Party or any of its Subsidiaries to its counterparty to such Hedge Agreement, as
if (i) such Hedge Agreement was being terminated early on such date of
determination, (ii) such Loan Party or Subsidiary was the sole “Affected Party”,
and (iii) the Administrative Agent was the sole party determining such payment
amount (with the Administrative Agent making such determination pursuant to the
provisions of the form of Master Agreement); or (b) in the case of a Hedge
Agreement traded on an exchange, the mark-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan
Party or Subsidiary of a Loan Party party to such Hedge Agreement determined by
the Administrative Agent based on the settlement price of such Hedge Agreement
on such date of determination; or (c) in all other cases, the mark-to-market
value of such Hedge Agreement, which will be the unrealized loss on such Hedge
Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge
Agreement determined by the Administrative Agent as the amount, if any, by which
(i) the present value of the future cash flows to be paid by such Loan Party or
Subsidiary exceeds (ii) the present value of the future cash flows to be
received by such Loan Party or Subsidiary pursuant to such Hedge Agreement;
capitalized terms used and not otherwise defined in this definition shall have
the respective meanings set forth in the above described Master Agreement.

 

“Applicable Lending Office” means, with respect to each Lender Party, such
Lender Party’s Domestic Lending Office in the case of a Base Rate Advance and
such Lender Party’s Eurocurrency Lending Office in the case of a Eurocurrency
Rate Advance and, in the case of a Competitive Bid Advance, the office of such
Lender notified by such Lender to the Administrative Agent as its Applicable
Lending Office with respect to such Competitive Bid Advance.

 

--------------------------------------------------------------------------------

 

“Applicable Margin” means, for any date, a percentage per annum determined by
reference to the Senior Leverage Ratio of the Company and its Subsidiaries for
the Rolling Period ended on or most recently prior to such date as set forth
below:

 

Senior Leverage
Ratio

 

Base Rate
Advances

 

Eurocurrency Rate
Advances

 

Level I

 

 

 

 

 

less than 0.20 to 1.00

 

0.75

%

1.75

%

Level II

 

 

 

 

 

less than 0.60 to 1.00 but greater than or equal to 0.20 to 1.00

 

 

 

 

 

Level III

 

1.00

%

2.00

%

less than 1.00 to 1.00 but greater than or equal to 0.60 to 1.00

 

1.50

%

2.50

%

Level IV

 

 

 

 

 

greater than or equal to 1.00 to 1.00

 

2.00

%

3.00

%

 

The Applicable Margin for each Advance shall be determined by reference to the
Senior Leverage Ratio in effect from time to time; provided, however, that (i)
no change in the Applicable Margin shall be effective until three Business Days
after the date on which the Administrative Agent receives the financial
information required to be delivered pursuant to Section 5.03(b), (ii) the
Applicable Margin shall be at Level IV for so long as the Company has not
submitted to the Administrative Agent the information described in clause (i) of
this proviso as and when required under Section 5.03(b) and (iii) the Applicable
Margin shall be at Level II until the earlier of (A) November 14, 2003 and (B)
three Business Days after the Administrative Agent receives the information
described in clause (i) of this proviso for the period ending September 30,
2003.

 

“Approved Fund” means, with respect to any Lender that is a fund that invests in
bank loans, any other fund that invests in bank loans and is advised or managed
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender Party and an Eligible Assignee and accepted by the Administrative Agent,
in accordance with Section 9.07 and in substantially the form of Exhibit C
hereto.

 

“Available Amount” of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).

 

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the higher of:

 

(a)                                  the rate of interest announced publicly by
BNP Paribas in New York, New York, from time to time, as its prime rate (and
such term shall not be construed to be its best or most favorable rate); or

 

(b)                                 0.50% per annum above the Federal Funds
Rate.

 

--------------------------------------------------------------------------------

 

“Base Rate Advance” means a Revolving Credit Advance that bears interest as
provided in Section 2.08(a)(i).

 

“Borrower” means the Company or any Designated Subsidiary, as the context
requires.

 

“Borrowing” means a Revolving Credit Borrowing or a Competitive Bid Borrowing.

 

“Business Day” means a day of the year on which banks are not required or
authorized by law to close in New York City or San Francisco, California and, if
the applicable Business Day relates to any Eurocurrency Rate Advances or LIBO
Rate Advances, on which dealings are carried on in the London interbank market
and banks are open for business in London and in the country of issue of the
currency of such Eurocurrency Rate Advance or LIBO Rate Advance (or, in the case
of an Advance denominated in the Euro, in Frankfurt, Germany) and, if the
applicable Business Day relates to any Local Rate Advances on which banks are
open for business in the country of issue of the currency of such Local Rate
Advance.

 

“Capital Expenditures” means, for any Person for any period, all cash
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or equipment on a Consolidated balance sheet of
such Person, provided, however, that Capital Expenditures shall not include
Acquisition Expenditures.

 

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

 

“Cash Equivalents” means assets that are reported by the Company as cash
equivalents or investments in its most recent quarterly report on Form-10Q or
annual report on Form-10K filed with the Securities and Exchange Commission and,
in the case of such investments rated at all times at least “Baa3-” or “Prime-3”
(or the then equivalent grade) by Moody’s or “BBB-” or “A-3” (or the then
equivalent grade) by S&P or “BBB-” or “F3” (or the then equivalent grade) by
Fitch IBCA, Inc.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

 

“Change of Control” means the occurrence of any of the following:  (a) any
Person or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly,
of Voting Interests of the Company (or other securities convertible into such
Voting Interests) representing 35% or more of the combined voting power of all
Voting Interests of the Company; or (b) during any period of up to 24
consecutive months, commencing after the date of this Agreement, individuals who
at the beginning of such 24-month period were directors of the Company shall
cease (other than due to death or disability) for any reason to constitute a
majority of the board of directors of the Company (except to the extent that
individuals who at the beginning of such 24-month period were replaced by
individuals (x) elected by 662/3% of the remaining members of the board of
directors of the Company or (y) nominated for election by a majority of the
remaining members

 

--------------------------------------------------------------------------------

 

of the board of directors of the Company and thereafter elected as directors by
the shareholders of the Company); or (c) any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of control over Voting Interests of the Company (or
other securities convertible into such Voting Interests) representing 35% or
more of the combined voting power of all Voting Interests of the Company.

 

“Collateral” means all “Collateral” referred to in the Collateral Documents and
all other property that is or is intended to be subject to any Lien in favor of
the Administrative Agent for the benefit of the Secured Parties.

 

“Collateral Documents” means each Security Agreement (including any Security
Agreement delivered under Section 5.01(j)) and each other agreement (including,
without limitation, each pledge agreement, charge or mortgage by the Company for
which the collateral is shares of any Non-U.S. Subsidiary) that creates or
purports to create a Lien in favor of the Administrative Agent for the benefit
of the Secured Parties.

 

“Commitment” means, with respect to any Lender at any time, the Dollar amount
set forth opposite such Lender’s name on Schedule I hereto under the caption
“Commitment” or, if such Lender has entered into one or more Assignment and
Acceptances, the Dollar amount set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 9.07(h) as such
Lender’s “Commitment”, as such amount may be reduced at or prior to such time
pursuant to Section 2.06.

 

“Committed Currencies” means lawful currency of the United Kingdom of Great
Britain and Northern Ireland, lawful currency of Japan, the lawful currency of
the European Economic and Monetary Union, and the lawful currency of the
Republic of Singapore.

 

“Competitive Bid Advance” means an advance by a Lender to any Borrower, which
may only be made in a Foreign Currency, as part of a Competitive Bid Borrowing
resulting from the competitive bidding procedure described in Section 2.04 and
refers to a Fixed Rate Advance, a LIBO Rate Advance or a Local Rate Advance.

 

“Competitive Bid Borrowing” means a borrowing consisting of simultaneous
Competitive Bid Advances from each of the Lenders whose offer to make one or
more Competitive Bid Advances as part of such borrowing has been accepted under
the competitive bidding procedure described in Section 2.04.

 

“Competitive Bid Note” means a promissory note of a Borrower payable to the
order of any Lender, in substantially the form of Exhibit A-2 hereto, evidencing
the indebtedness of such Borrower to such Lender resulting from a Competitive
Bid Advance made by such Lender to such Borrower.

 

“Competitive Bid Reduction” means the reduction in the aggregate Commitments
resulting from the aggregate outstanding principal amount of all Competitive Bid
Advances as provided in clause (b)(iii) of the definition of “Unused
Commitment.”

 

“Confidential Information” means information that any Loan Party furnishes to
the Administrative Agent or any Lender Party or that the Administrative Agent or
any Lender Party otherwise obtains on a confidential basis, but does not include
any such information that is or

 

--------------------------------------------------------------------------------

 

becomes generally available to the public or that is or becomes available to the
Administrative Agent or such Lender Party from a source other than the Loan
Parties or an agent of a Loan Party.

 

“Consolidated” refers, with respect to any Person, to the consolidation of
accounts of such Person and its Subsidiaries in accordance with GAAP.

 

“Contingent Obligation” means, with respect to any Person, any Obligation or
arrangement of such Person to guarantee or intended to guarantee any Debt,
leases, dividends or other payment Obligations (“primary obligations”) of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation 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, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof.  The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable pursuant
to the terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder), as determined
by such Person in good faith.

 

“Conversion”, “Convert” and “Converted” each refer to a conversion of Revolving
Credit Advances of one Type into Revolving Credit Advances of the other Type
pursuant to Section 2.10.

 

“Debt” of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money and all Obligations of the Loan Parties under this
Agreement (except for reimbursement obligations in respect of Letters of Credit
issued to support any liability that would not be classified as indebtedness in
accordance with GAAP), (b) all Obligations, contingent or otherwise, of such
Person for the deferred purchase price of property or services (other than trade
payables not overdue by more than 120 days, and that do not exceed $10,000,000
in the aggregate for all such trade payables, that are incurred in the ordinary
course of such Person’s business), (c) all Obligations, contingent or otherwise,
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations, contingent or otherwise, of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Obligations,
contingent or otherwise, of such Person as lessee under Capitalized Leases,
(f) all Obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities, (g)  all Obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in cash in
respect of any Equity Interests in such Person or any other Person or any
warrants, rights or options to acquire such capital stock valued, in the case of
Redeemable Preferred Interests, at the greater of its voluntary or involuntary
liquidation

 

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preference plus accrued and unpaid dividends, (h) all Contingent Obligations of
such Person, (i) any Obligation of such Person under a synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing if the transaction giving rise to such Obligation is considered
indebtedness for borrowed money for tax purposes but is classified as an
operating lease in accordance with GAAP, less the amount of any cash held by the
respective credit provider as cash collateral to secure the Obligations of such
Person under any synthetic lease and (j) all indebtedness and other payment
Obligations referred to in clauses (a) through (i) above of another Person
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness or other payment Obligations.

 

“Default” means any Event of Default or any event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both.

 

“Designated Bidder” means (a) an Eligible Assignee or (b) a special purpose
corporation that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and that issues (or the
parent of which issues) commercial paper rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or ”A-1” (or the then equivalent grade) by S&P
that, in the case of either clause (a) or (b), (i) is organized under the laws
of the United States or any State thereof, (ii) shall have become a party hereto
pursuant to Section 9.07(e), (f) and (g) and (iii) is not otherwise a Lender.

 

“Designated Subsidiary” means any Subsidiary of the Company designated for
borrowing privileges under this Agreement pursuant to Section 9.11.

 

“Designation Agreement” means a designation agreement entered into by a Lender
(other than a Designated Bidder) and a Designated Bidder, and accepted by the
Administrative Agent, in substantially the form of Exhibit H.

 

“Designation Letter” means, with respect to any Designated Subsidiary, a letter
in the form of Exhibit D hereto signed by such Designated Subsidiary and the
Company.

 

“Documentation Agents” has the meaning specified in the recital of parties to
this Agreement.

 

“Dollars” and the “$” sign each means lawful currency of the United States of
America.

 

“Domestic Lending Office” means, with respect to any Lender Party, the office of
such Lender Party specified as its “Domestic Lending Office” opposite its name
on Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender Party, as the case may be, or such other office of such Lender
Party as such Lender Party may from time to time specify to the Company and the
Administrative Agent.

 

“EBITDA” means, for any period, the sum, determined on a Consolidated basis, of
(a) net income (or net loss), (b) Interest Expense, (c) income tax expense,
(d) depreciation expense, (e) amortization expense, (f) non-cash charges
incurred in connection with stock options granted to employees of the Company,
and (g) (i) all non-cash, extraordinary, non-recurring, transactional or unusual
losses deducted in calculating net income less (ii) all non-cash, extraordinary,
non-recurring, transactional or unusual gains added in calculating net income in
each case of the Company determined in accordance with GAAP for such period;
provided, however, there shall

 

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be excluded from EBITDA, to the extent therein included, all non-cash foreign
currency and Hedge Agreement losses and all non-cash foreign currency and Hedge
Agreement gains.

 

“Effective Date” has the meaning specified in Section 3.01.

 

“Eligible Assignee” means (a) with respect to the Facility:  (i) a Lender Party;
(ii) an Affiliate of a Lender Party or an Approved Fund; (iii) a commercial bank
organized under the laws of the United States, or any State thereof, and having
a combined capital and surplus of at least $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having a combined capital and surplus of at least
$500,000,000; (v) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or a political subdivision of any such country, and
having a combined capital and surplus of at least $500,000,000, so long as such
bank is acting through a branch or agency located in the United States; (vi) a
finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and surplus of at least
$250,000,000; and (vii) any other Person approved by the Administrative Agent
and, unless a Default has occurred and is continuing at the time any assignment
is effected pursuant to Section 9.07, the Company, any such approval in either
case not to be unreasonably withheld or delayed, provided that a Person shall
become an Eligible Assignee referred to in subclauses (iii) through (vii) above
with the approval of the Issuing Bank in its sole discretion, and (b) with
respect to any additional Issuing Bank, a Person that is an Eligible Assignee
under subclause (iii) or (v) of clause (a) of this definition and is approved by
the Administrative Agent and, unless a Default has occurred and is continuing at
the time any assignment is effected pursuant to Section 9.07, the Company, such
approval not to be unreasonably withheld or delayed; provided, however, that
neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.

 

“Environmental Action” means any action, suit, demand, demand letter, claim,
notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.

 

“Environmental Law” means any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or
judicial or agency interpretation, policy or guidance relating to pollution or
protection of the environment, health, safety or natural resources, including,
without limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials.

 

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

“Equity Interests” means, with respect to any Person, shares of capital stock of
(or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit

 

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interests in) such Person, securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition from
such Person of such shares (or such other interests), and other ownership or
profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.

 

“Equivalent” in Dollars of any Committed Currency or any Foreign Currency on any
date means the equivalent in Dollars of such Committed Currency or Foreign
Currency, as the case may be, determined by using the quoted spot rate at which
the Administrative Agent’s principal office in London offers to exchange Dollars
for such Committed Currency or Foreign Currency in London prior to 4:00 P.M.
(London time) (unless otherwise indicated by the terms of this Agreement) on
such date as is required pursuant to the terms of this Agreement, and the
“Equivalent” in any Committed Currency or Foreign Currency, as the case may be,
of Dollars means the equivalent in such Committed Currency or Foreign Currency,
as the case may be, of Dollars determined by using the quoted spot rate at which
the Administrative Agent’s principal office in London offers to exchange such
Committed Currency or Foreign Currency, as the case may be, for Dollars in
London prior to 4:00 P.M. (London time) (unless otherwise indicated by the terms
of this Agreement) on such date as is required pursuant to the terms of this
Agreement.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

 

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a
member of the controlled group of any Loan Party, or under common control with
any Loan Party, within the meaning of Section 414 of the Internal Revenue Code.

 

“ERISA Event” means (a) (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC; or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan within the following
30 days; (b) the application for a minimum funding waiver with respect to a
Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of any Loan Party or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA;
(e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a
lien under Section 302(f) of ERISA shall have been met with respect to any Plan;
(g) the adoption of an amendment to a Plan requiring the provision of security
to such Plan, pursuant to Section 307 of ERISA; or (h) the institution by the
PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, such Plan.

 

“Eurocurrency Lending Office” means, with respect to any Lender Party, the
office of such Lender Party specified as its “Eurocurrency Lending Office”
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender

 

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Party (or, if no such office is specified, its Domestic Lending Office), or such
other office of such Lender Party as such Lender Party may from time to time
specify to the Company and the Administrative Agent.

 

“Eurocurrency Liabilities” has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.

 

“Eurocurrency Rate” means, for any Interest Period for all Eurocurrency Rate
Advances comprising part of the same Revolving Credit Borrowing, an interest
rate per annum equal to the rate per annum obtained by dividing (a) the average
of the respective rates per annum (rounded upward to the next whole multiple of
1/16th of 1%) posted by each of the principal London offices of banks posting
rates as displayed on the Telerate Markets screen, page 3750 or such other page
as may replace such page on such service for the purpose of displaying the
London interbank offered rate of major banks for deposits in Dollars or the
applicable Committed Currency, at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period for deposits in an
amount substantially equal to BNP Paribas’ Eurocurrency Rate Advance comprising
part of such Revolving Credit Borrowing to be outstanding during such Interest
Period (or, if BNP Paribas shall not have such a Eurocurrency Rate Advance,
$1,000,000 or the Equivalent thereof in Dollars) and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurocurrency Rate
Reserve Percentage for such Interest Period.

 

“Eurocurrency Rate Advance” means a Revolving Credit Advance denominated in
Dollars or a Committed Currency that bears interest as provided in
Section 2.08(a)(ii).

 

“Eurocurrency Rate Reserve Percentage” for any Interest Period for all
Eurocurrency Rate Advances or LIBO Rate Advances comprising part of the same
Borrowing means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which
the interest rate on Eurocurrency Rate Advances or LIBO Rate Advances is
determined) having a term equal to such Interest Period.

 

“Events of Default” has the meaning specified in Section 6.01.

 

“Existing Credit Agreement” has the meaning specified in the preliminary
statements to this Agreement.

 

“Existing Letters of Credit” means all letters of credit issued under the
Existing Credit Agreement and outstanding on the Effective Date and listed on
Schedule 2.01(b) hereto.

 

“Facility” means, at any time, the aggregate amount of the Lenders’ Commitments
at such time.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period (i) to the rate published by the
Telerate Markets service on page five of its daily report as the “ASK” rate as
of 10:00 A.M. (New York City time) for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) or (ii) if the
Telerate Markets service shall cease to publish or otherwise shall not publish
such rates for any

 

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day that is a Business Day, to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.

 

“Fee Letters” means each agreement entered into between any Loan Party and the
Administrative Agent or the Issuing Bank with respect to the payment of fees or
other amounts relating to the Facilities.

 

“Fiscal Quarter” means a fiscal quarter ending on or about March 31, June 30,
September 30 or December 31 of each year.

 

“Fiscal Year” means a fiscal year of the Company and its Consolidated
Subsidiaries ending on or about June 30 in any calendar year.

 

“Fixed Charge Coverage Ratio” means, with respect to any Person for any Rolling
Period, the ratio of (a) (i) Consolidated EBIDTA for such Person and its
Subsidiaries for such Rolling Period minus (ii) Capital Expenditures of such
Person and its Subsidiaries made during such Rolling Period to (b) Fixed Charges
of such Person and its Subsidiaries for such Rolling Period.

 

“Fixed Charges” means, for the Company and its Subsidiaries on a Consolidated
basis, for any period, the sum of Interest Expense, income taxes that have been
paid in cash and all regularly scheduled principal payments of Funded Debt made
during such period.

 

“Fixed Rate Advances” has the meaning specified in Section 2.04(a)(i), which
Advances shall be denominated in any Foreign Currency.

 

“Foreign Currency” means any lawful currency (other than Dollars or a Committed
Currency) that is freely transferable or convertible into Dollars.

 

“Funded Debt” of any Person means Debt of such Person (other than Debt described
in clauses (f), (h) and (j) of the definition thereof).

 

“GAAP” has the meaning specified in Section 1.03.

 

“Guaranties” means the U.S. Guaranty and the Non-U.S. Guaranty.

 

“Hazardous Materials” means (a) petroleum or petroleum products, by-products or
breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other chemicals, materials
or substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.

 

“Hedge Agreements” means interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts and other hedging agreements.

 

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“Indemnified Costs” has the meaning specified in Section 8.05(a).

 

“Indemnified Party” has the meaning specified in Section 9.04(b).

 

“Initial Extension of Credit” means the earlier to occur of the initial
Borrowing hereunder and the initial issuance of a Letter of Credit hereunder.

 

“Initial Issuing Bank” has the meaning specified in the recital of parties to
this Agreement.

 

“Initial Lenders” has the meaning specified in the recital of parties to this
Agreement.

 

“Insufficiency” means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

 

“Interest Expense” means, with respect to any Person for any period, interest
expense (including the interest component on obligations under Capitalized
Leases but excluding capitalized interest), whether paid or accrued, on all Debt
of such Person and its Subsidiaries for such period, including, without
limitation and without duplication, (a) interest expense in respect of Debt
resulting from Advances, (b) commissions, discounts and other fees and charges
payable in connection with letters of credit (including, without limitation, any
Letters of Credit), (c) accretion of original issue discount, and (d) all other
noncash interest but excluding amortization with respect to deferred financing
fees (including, without limitation, deferred financing fees in connection with
this Agreement or the Subordinated Notes).

 

“Interest Period” means, for each Eurocurrency Rate Advance comprising part of
the same Revolving Credit Borrowing and each LIBO Rate Advance comprising part
of the same Competitive Bid Borrowing, the period commencing on the date of such
Eurocurrency Rate Advance or LIBO Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurocurrency Rate Advance, and ending on the
last day of the period selected by the applicable Borrower pursuant to the
provisions below and, thereafter, with respect to Eurocurrency Rate Advances,
each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by such
Borrower pursuant to the provisions below.  The duration of each such Interest
Period shall be one, two, three or six months, as the applicable Borrower may,
upon notice received by the Administrative Agent not later than 10:00 A.M. (Los
Angeles, California time) on the third Business Day prior to the first day of
such Interest Period, select; provided, however, that:

 

(a)                                  no Borrower may select any Interest Period
that ends after the Termination Date;

 

(b)                                 Interest Periods commencing on the same date
for Eurocurrency Rate Advances comprising part of the same Revolving Credit
Borrowing or for LIBO Rate Advances comprising part of the same Competitive Bid
Borrowing shall be of the same duration;

 

(c)                                  whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding Business
Day, provided, however, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar

 

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month, the last day of such Interest Period shall occur on the immediately
preceding Business Day; and

 

(d)                                 whenever the first day of any Interest
Period occurs on a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in such
Interest Period, such Interest Period shall end on the last Business Day of such
succeeding calendar month.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

 

“Investment” means (i) any loan or advance to any Person, any purchase or other
acquisition of any Equity Interests or Debt or the assets comprising a division
or business unit or a substantial part or all of the business of any Person, any
capital contribution to any Person or any other direct or indirect investment in
any Person, including, without limitation, any acquisition by way of a merger or
consolidation (or similar transaction) and any arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (h) or (j) of the
definition of “Debt” in respect of any Person, or (ii) any purchase or
acquisition of intellectual property or rights to use intellectual property
other than in the ordinary course of business and other than any such purchase
or acquisition in which the consideration consists solely of Equity Interests of
the Company.

 

“Issuing Bank” means the Initial Issuing Bank and each Eligible Assignee which
agrees to issue Letters of Credit hereunder pursuant to Section 9.07, for so
long as such Initial Issuing Bank or Eligible Assignee, as the case may be,
shall have a Commitment.

 

“L/C Cash Collateral Account” has the meaning specified in the Preliminary
Statements to the Security Agreement.

 

“L/C Related Documents” has the meaning specified in Section 2.05(b)(ii)(A).

 

“Lender Party” means any Lender or the Issuing Bank.

 

“Lenders” means the Initial Lenders and each Person that shall become a Lender
hereunder pursuant to Section 9.07(a), (b) and (c) and, except when used in
reference to a Revolving Credit Advance, a Revolving Credit Borrowing, a
Revolving Credit Note, a Commitment or a related term, each Designated Bidder,
for so long as such Initial Lender or Person shall be a party to this Agreement.

 

“Letter of Credit Advance” means an advance made by the Issuing Bank or any
Lender pursuant to Section 2.03(c).

 

“Letter of Credit Agreement” has the meaning specified in Section 2.03(a).

 

“Letters of Credit” has the meaning specified in Section 2.01(b).

 

“Leverage Ratio” means, with respect to any Person for any Rolling Period, the
ratio of (a) Consolidated Funded Debt as of the last day of such Rolling Period
to (b) Consolidated EBITDA of such Person and its Subsidiaries for such Rolling
Period.

 

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“LIBO Rate” means, for any Interest Period for all LIBO Rate Advances comprising
part of the same Competitive Bid Borrowing, an interest rate per annum equal to
the rate per annum obtained by dividing (a)  the rate per annum (rounded upward
to the nearest whole multiple of 1/16 of 1% per annum) appearing on Telerate
Markets Page 3750 (or any successor page) as the London interbank offered rate
for deposits in the applicable Foreign Currency at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period in an amount substantially equal
to the amount that would be BNP Paribas’ ratable share of such Borrowing if such
Borrowing were to be a Revolving Credit Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage for such
Interest Period.

 

“LIBO Rate Advances” means a Competitive Bid Advance denominated in any Foreign
Currency and bearing interest based on the LIBO Rate.

 

“Lien” means any lien, security interest or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor.

 

“Loan Documents” means (a) for purposes of this Agreement and the Notes, if any,
and any amendment, supplement or modification hereof or thereof, (i) this
Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) each Letter of
Credit Agreement, (v) the Guaranties, and (vi) the Fee Letters and (b) for
purposes of the Collateral Documents and for all other purposes other than for
purposes of this Agreement and the Notes, (i) this Agreement, (ii) the Notes, if
any, (iii) the Collateral Documents, (iv) each Letter of Credit Agreement, (v)
the Guaranties, (vi) the Fee Letters, and (vii) any other agreement, document or
instrument issued pursuant to or in connection with any of the foregoing, and in
each case as amended, amended and restated, supplemented or otherwise modified
from time to time.

 

“Loan Parties” means the Company, the Designated Subsidiaries, the U.S.
Guarantors and the Non-U.S. Guarantors.

 

“Local Rate Advance” means a Competitive Bid Advance denominated in any Foreign
Currency sourced from the jurisdiction of issuance of such Foreign Currency and
bearing interest at a fixed rate.

 

“Margin Stock” has the meaning specified in Regulation U.

 

“Material Adverse Change” means any material adverse change in the business,
condition (financial or otherwise), operations, performance, properties or
prospects of (i) the Company, (ii) the Loan Parties taken as a whole, or (iii)
the Company and its Subsidiaries taken as a whole.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrowers, the U.S. Guarantors and the Non-U.S. Guarantors
taken as a whole, (b) the rights and remedies of the Administrative Agent or any
Lender Party under any Loan Document or (c) the ability of (i) the Company, (ii)
the Loan Parties taken as a whole, or (iii) the Company and its Subsidiaries
taken as a whole to perform their Obligations under any Loan Document to which
they are or are to become parties.

 

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

 

“Multiemployer Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.

 

“Multiple Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.

 

“Net Cash” means, as at any date of determination, the aggregate amount of cash
and Cash Equivalents of the Company and its Subsidiaries as at such date, plus
the aggregate Unused Commitment, less the aggregate amount of (x) any cash and
Cash Equivalents of the Company or its Subsidiaries which are collateral for
Obligations of the Company or its Subsidiaries under any synthetic lease and (y)
all outstanding Senior Funded Debt.

 

“Net Tangible Assets” means, as at any date of determination, the aggregate
amount of assets, less the aggregate amount of intangible assets, owned by the
Company and its Subsidiaries as at such date.

 

“Non-U.S. Guarantors” means all Non-U.S. Subsidiaries of the Company that are
Significant Subsidiaries and each other Non-U.S. Subsidiary that is or becomes a
Significant Subsidiary that shall be required to execute and deliver a guaranty
pursuant to Section 5.01(j) (subject to the proviso thereto), Section 5.01(k) or
Section 5.01(l).

 

“Non-U.S. Guaranty” means a guaranty made by each Non-U.S. Subsidiary of the
Company that is a Significant Subsidiary in favor of the Administrative Agent
subject to the proviso to Section 5.01(j), in substantially the form of Exhibit
E-3 (together with each other guaranty made by a Non-U.S. Subsidiary of the
Company delivered pursuant to Section 5.01(j) (subject to the proviso thereto)
or (k), in each case as amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with its terms).

 

“Non-U.S. Subsidiary” means any Subsidiary of the Company which is not a U.S.
Subsidiary.

 

“Note” means a Revolving Credit Note, to the extent required to be issued
pursuant to Section 2.16, or a Competitive Bid Note.

 

“Notice of Competitive Bid Borrowing” has the meaning specified in
Section 2.04(a).

 

“Notice of Revolving Credit Borrowing” has the meaning specified in
Section 2.02(a).

 

“Notice of Issuance” has the meaning specified in Section 2.03(a).

 

“NPL” means the National Priorities List under CERCLA.

 

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“Obligation” means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(f). 
Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys’ fees
and disbursements, indemnities and other amounts payable by such Loan Party
under any Loan Document and (b) the obligation of such Loan Party to reimburse
any amount in respect of any of the foregoing that any Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.

 

“OECD” means the Organization for Economic Cooperation and Development.

 

“Other Subordinated Debt” has the meaning specified in Section 5.02(b)(i)(E).

 

“Other Taxes” has the meaning specified in Section 2.13(b).

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Permitted Acquisition” means the purchase or acquisition of all or
substantially all of the stock or assets, or a business unit or division, of a
Permitted Business by the Company.

 

“Permitted Business” means the businesses conducted by the Company and its
Subsidiaries on the date hereof and any business related, ancillary or
complementary thereto (as determined in good faith by the board of directors of
the Company).

 

“Permitted Liens” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been
commenced:  (a) Liens for taxes, assessments and governmental charges or levies
to the extent not then required to be paid under Section 5.01(b) hereof;
(b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’,
workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary
course of business securing obligations that (i) are not overdue for a period of
more than 30 days and (ii) either individually or when aggregated with all other
Permitted Liens outstanding on any date of determination, do not materially
affect the use or value of the property to which they relate; and (c) pledges or
deposits to secure obligations under workers’ compensation laws or similar
legislation or to secure public or statutory obligations; and (d) easements,
rights of way and other encumbrances on title to real property that do not
render title to property encumbered thereby unmarketable or materially adversely
affect the use of such property for its present purposes.

 

“Person” means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.

 

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

 

“Pledged Shares” has the meaning specified in Section 1(a)(ii) of the Security
Agreement.

 

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“Preferred Interests” means, with respect to any Person, Equity Interests issued
by such Person that are entitled to a preference or priority over any other
Equity Interests issued by such Person upon any distribution of such Person’s
property and assets, whether by dividend or upon liquidation.

 

“Pro Forma Basis” with respect to any determination of EBITDA for any Rolling
Period means the EBITDA of the Company and its Subsidiaries determined as
provided in the definition of EBITDA, except that if one or more Permitted
Acquisitions shall have been consummated after the first day of such Rolling
Period or the determination is being made pursuant to Section 5.02(f)(v), then
the EBITDA for such Rolling Period shall include the EBITDA of all entities or
business units acquired in such Permitted Acquisitions (and, in the case of a
determination pursuant to Section 5.02(f)(v), the entity or business unit to be
acquired) as if such Permitted Acquisitions or proposed Permitted Acquisitions
were consummated on the first day of such Rolling Period.  For the purpose of
this definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings related thereto and the amount of
Interest Expense associated with any Funded Debt incurred in connection
therewith, or any other calculation under this definition, the pro forma
calculations will be certified by a Responsible Officer of the Company.

 

“Pro Rata Share” of any amount means, with respect to any Lender at any time,
the product of such amount times a fraction the numerator of which is the amount
of such Lender’s Commitment at such time (or, if the Commitments shall have been
terminated, the Commitment as in effect immediately prior to such termination)
and the denominator of which is the Facility at such time (or, if the
Commitments shall have been terminated, the Facility as in effect immediately
prior to such termination).

 

“Redeemable” means, with respect to any Equity Interest, any Debt or any other
right or Obligation, any such Equity Interest, Debt, right or Obligation that
(a) the issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or (b) is
redeemable at the option of the holder.

 

“Register” has the meaning specified in Section 9.07(h).

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

“Required Lenders” means, at any time, Lenders owed or holding at least 51% in
interest of the Commitments or, if no Commitments remain, at least 51% in
interest of the aggregate unpaid principal amount (based on the Equivalent in
Dollars at such time) of the Advances.

 

“Responsible Officer” means any executive officer of the Company.

 

“Revolving Credit Advance” has the meaning specified in Section 2.01(a).

 

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made to a Borrower by each of the
Lenders pursuant to Section 2.01.

 

“Revolving Credit Note” means a promissory note of a Borrower payable to the
order of any Lender, delivered pursuant to a request made under Section 2.16 in
substantially the form of

 

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Exhibit A-1, evidencing the aggregate indebtedness of such Borrower to such
Lender resulting from the Revolving Credit Advances and Letter of Credit
Advances made by such Lender to such Borrower.

 

“Rolling Period” means, for any Fiscal Quarter, the consecutive four Fiscal
Quarters ending on the last day of such Fiscal Quarter.

 

“Secured Obligations” has the meaning specified in the Security Agreement.

 

“Secured Parties” means the Agents and the Lender Parties.

 

“Security Agreement” has the meaning specified in Section 3.01(a)(ii).

 

“Senior Funded Debt” means the aggregate amount of all Funded Debt minus all
subordinated debt referred to in Sections 5.02(b)(i)(D) and (E).

 

“Senior Leverage Ratio” means, with respect to any Person for any Rolling
Period, the ratio of (a) Consolidated Senior Funded Debt as of the last day of
such Rolling Period to (b) Consolidated EBITDA of such Person and its
Subsidiaries for such Rolling Period.

 

“Significant Subsidiary” means, at any time, a Subsidiary that is wholly owned
(ignoring directors’ qualifying shares), directly or indirectly, by the Company
that (i) together with its Subsidiaries if any has total assets greater than
$20,000,000 (determined as of the last day of the most recent Fiscal Quarter),
(ii) together with its Subsidiaries has EBITDA equal to 10% or more of the
Consolidated EBITDA of the Company and its Subsidiaries for the most recently
ended Rolling Period or (iii) has become a party to a Guaranty.

 

“Single Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party
or any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.

 

“Sole Arranger” has the meaning specified in the recital of parties to this
Agreement.

 

“Solvent” and “Solvency” mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital.  The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“Standby Letter of Credit” means any Letter of Credit issued under the Facility,
other than a Trade Letter of Credit.

 

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“S&P” means Standard & Poor’s Ratings Group, a division of the McGraw Hill
Companies, Inc.

 

“Subordinated Notes” means the 41/4 %  Convertible Subordinated Notes due 2007
issued by the Company.

 

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of (a) the issued and outstanding capital stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial interest
in such trust or estate, is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Syndication Agents” has the meaning specified in the recital of parties to this
Agreement.

 

“Tangible Net Worth” means Consolidated Net Tangible Assets less Consolidated
total liabilities.

 

“Taxes” has the meaning specified in Section 2.13(a).

 

“Termination Date” means the earlier of (x) November 6, 2006 and (y) the date of
termination in whole of the Commitments pursuant to Section 2.06 or 6.01.

 

“Total Capitalization” means, for the Company and its Subsidiaries on a
Consolidated basis, the sum of Funded Debt plus shareholders’ equity.

 

“Trade Letter of Credit” means any Letter of Credit that is issued under the
Facility for the benefit of a supplier of inventory to the Company or any of its
Subsidiaries to effect payment for such inventory.

 

“Transaction” means the transactions contemplated by the Loan Documents.

 

“Type” refers to the distinction between Advances bearing interest at the Base
Rate and Advances bearing interest at the Eurocurrency Rate.

 

“Unused Commitment” means, with respect to any Lender at any time, (a) such
Lender’s Commitment at such time minus (b) the sum of (i) the aggregate
principal amount (or the Equivalent thereof in Dollars) of all Revolving Credit
Advances and Letter of Credit Advances made by such Lender (in its capacity as a
Lender) and outstanding at such time, plus (ii) such Lender’s Pro Rata Share of
(A) the aggregate Available Amount of all Letters of Credit outstanding (or the
Equivalent thereof in Dollars) at such time, and (B) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Bank pursuant to
Section 2.03(c) and outstanding at such time, plus (iii) such Lender’s Pro Rata
Share of the aggregate principal amount of all Competitive Bid Advances (or the
Equivalent thereof in Dollars) made by the Lenders pursuant to Section 2.04 and
outstanding at such time.

 

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“U.S. Guarantors” means all U.S. Subsidiaries of the Company that are
Significant Subsidiaries and each other U.S. Subsidiary that is or becomes a
Significant Subsidiary that shall be required to execute and deliver a guaranty
pursuant to Section 5.01(j) or Section 5.01(k).

 

“U.S. Guaranty” means a guaranty made by each U.S. Subsidiary that is a
Significant Subsidiary in favor of the Administrative Agent, in substantially
the form of Exhibit E-2 (together with each other guaranty made by a U.S.
Subsidiary that is a Significant Subsidiary delivered pursuant to
Section 5.01(j), in each case as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with its terms).

 

“U.S. Subsidiary” means any Subsidiary of the Company organized under the laws
of the United States or one of the States of the United States.

 

“Voting Interests” means shares of capital stock issued by a corporation, or
equivalent Equity Interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.

 

“Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that
is maintained for employees of any Loan Party or in respect of which any Loan
Party could have a liability.

 

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.

 

SECTION 1.02  Computation of Time Periods; Other Definitional Provisions.  In
this Agreement and the other Loan Documents, in the computation of periods of
time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
excluding”.  References in the Loan Documents to any agreement or contract “as
amended” shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.

 

SECTION 1.03  Accounting Terms.  All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the financial
statements referred to in Section 4.01(f) (“GAAP”).

 

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT

 

SECTION 2.01  The Advances and the Letters of Credit.  (a)  The Revolving Credit
Advances.  Each Lender severally agrees, on the terms and conditions hereinafter
set forth, to make advances (each a “Revolving Credit Advance”) to any Borrower
from time to time on any Business Day during the period from the date hereof
until the Termination Date in an amount (based in respect of any Revolving
Credit Advances to be denominated in a Committed Currency on the Equivalent in
Dollars determined on the date of delivery of the applicable Notice of Revolving
Credit Borrowing) for each such Revolving Credit Advance not to exceed such
Lender’s Unused Commitment at such time.  Each Revolving Credit Borrowing shall
be in an aggregate amount of $2,500,000 or an integral multiple of $250,000 in
excess thereof (or the Equivalent thereof in any Committed Currency determined
on the date

 

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of delivery of the applicable Notice of Revolving Credit Borrowing) and shall
consist of Revolving Credit Advances made simultaneously by the Lenders ratably
according to their Commitments.  Within the limits of each Lender’s Unused
Commitment in effect from time to time, the Borrowers may borrow under this
Section 2.01(a), prepay pursuant to Section 2.07(a) and reborrow under this
Section 2.01(a).

 

(B)                                 LETTERS OF CREDIT.  THE ISSUING BANK AGREES,
ON THE TERMS AND CONDITIONS HEREINAFTER SET FORTH, TO ISSUE LETTERS OF CREDIT
(THE “LETTERS OF CREDIT”) IN DOLLARS OR ANY COMMITTED CURRENCY FOR THE ACCOUNT
OF ANY BORROWER FROM TIME TO TIME ON ANY BUSINESS DAY DURING THE PERIOD FROM THE
DATE HEREOF UNTIL 15 DAYS BEFORE THE TERMINATION DATE IN AN AGGREGATE AVAILABLE
AMOUNT (BASED IN RESPECT OF ANY LETTERS OF CREDIT TO BE DENOMINATED IN A
COMMITTED CURRENCY ON THE EQUIVALENT IN DOLLARS DETERMINED ON THE DATE OF
DELIVERY OF THE APPLICABLE NOTICE OF ISSUANCE) FOR ANY SUCH LETTER OF CREDIT,
AFTER GIVING EFFECT TO SUCH ISSUANCE, NOT TO EXCEED THE UNUSED COMMITMENTS OF
THE LENDERS AT SUCH TIME.  TO THE EXTENT ANY LETTER OF CREDIT IS OUTSTANDING ON
THE TERMINATION DATE, THE BORROWERS WILL DEPOSIT IN THE L/C CASH COLLATERAL
ACCOUNT AN AMOUNT IN CASH NOT LESS THAN 105% OF THE FACE AMOUNT OF ALL SUCH
LETTERS OF CREDIT; PROVIDED THAT IN NO EVENT MAY THE AGGREGATE FACE AMOUNT OF
ALL SUCH LETTERS OF CREDIT WHOSE DURATION EXTENDS BEYOND THE TERMINATION DATE BE
MORE THAN $100,000,000.  NO LETTER OF CREDIT SHALL HAVE AN EXPIRATION DATE LATER
THAN (I) IN THE CASE OF A STANDBY LETTER OF CREDIT, ONE YEAR AFTER THE DATE OF
ISSUANCE THEREOF AND (II) IN THE CASE OF A TRADE LETTER OF CREDIT, 180 DAYS
AFTER THE DATE OF ISSUANCE THEREOF.  WITHIN THE LIMITS OF THE FACILITY, AND
SUBJECT TO THE LIMITS REFERRED TO ABOVE, THE BORROWERS MAY REQUEST THE ISSUANCE
OF LETTERS OF CREDIT UNDER THIS SECTION 2.01(B), REPAY ANY LETTER OF CREDIT
ADVANCES RESULTING FROM DRAWINGS THEREUNDER PURSUANT TO SECTION 2.05(B) AND
REQUEST THE ISSUANCE OF ADDITIONAL LETTERS OF CREDIT UNDER THIS
SECTION 2.01(B).  ALL EXISTING LETTERS OF CREDIT WILL BE DEEMED FOR ALL PURPOSES
LETTERS OF CREDIT HEREUNDER.

 

SECTION 2.02  Making the Revolving Credit Advances.  (a)  Except as otherwise
provided in Section 2.10(b) or Section 2.03, each Revolving Credit Borrowing
shall be made on notice, given not later than (x) 10:00 A.M. (Los Angeles,
California time) on the third Business Day prior to the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurocurrency Rate Advances denominated in Dollars, (y) 4:00 P.M.
(London time) on the fourth Business Day prior to the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurocurrency Rate Advances denominated in any Committed Currency,
or (z) 10:00 A.M. (Los Angeles, California time) on the first Business Day prior
to the date of the proposed Revolving Credit Borrowing in the case of a
Revolving Credit Borrowing consisting of Base Rate Advances, by the applicable
Borrower to the Administrative Agent, which shall give to each Lender prompt
notice thereof by telecopier, provided, that the Revolving Credit Borrowing made
on the Effective Date shall be in an amount equal to EUR 14,100,000 and shall
consist of Eurocurrency Rate Advances with the first Interest Period therefor
terminating on [December 31, 2003].  Each such notice of a Revolving Credit
Borrowing (a “Notice of Revolving Credit Borrowing”) shall be in writing, or by
telecopier, in substantially the form of Exhibit B-1 hereto, specifying therein
the requested (i) date of such Revolving Credit Borrowing, (ii) Type of
Revolving Credit Advances comprising such Revolving Credit Borrowing,
(iii) aggregate amount of such Revolving Credit Borrowing and (iv) in the case
of a Revolving Credit Borrowing consisting of Eurocurrency Rate Advances,
initial Interest Period and currency for each such Revolving Credit Advance. 
Each such Notice of Revolving Credit Borrowing shall be appropriately completed
and signed by a Responsible Officer of the Borrower (or any individual
designated by such Responsible Officer in writing to the Administrative Agent). 
Each Lender shall, before 11:00 A.M. (Los Angeles, California time) on the date
of such Revolving Credit Borrowing, in the case of a Revolving Credit Borrowing
consisting of Revolving Credit Advances denominated in Dollars, and before
11:00 A.M. (London time) on the date of such Revolving Credit Borrowing, in the
case of a Revolving Credit Borrowing consisting of Eurocurrency Rate Advances
denominated in any Committed Currency, make available for the account of its
Applicable Lending Office to the Administrative Agent at the applicable Agent’s
Account, in same day funds, such Lender’s ratable portion of such Revolving

 

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Credit Borrowing.  After the Administrative Agent’s receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower making such
Notice of Revolving Credit Borrowing by crediting such Borrower’s Account;
provided, however, that, in the case of any Revolving Credit Borrowing, the
Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Letter of Credit Advances made by the Issuing
Bank and by any other Lender to or for the benefit of such Borrower and
outstanding on the date of such Revolving Credit Borrowing in the same currency,
plus interest accrued and unpaid thereon to and as of such date, available to
the Issuing Bank and such other Lenders for repayment of such Letter of Credit
Advances.

 

(B)                                 ANYTHING IN SUBSECTION (A) ABOVE TO THE
CONTRARY NOTWITHSTANDING, (I) THE BORROWERS MAY NOT SELECT EUROCURRENCY RATE
ADVANCES FOR ANY REVOLVING CREDIT BORROWING IF THE AGGREGATE AMOUNT OF SUCH
REVOLVING CREDIT BORROWING IS LESS THAN $2,500,000 OR IF THE OBLIGATION OF THE
LENDERS TO MAKE EUROCURRENCY RATE ADVANCES SHALL THEN BE SUSPENDED PURSUANT TO
SECTION 2.10 OR 2.11 AND (II) WITH RESPECT TO REVOLVING CREDIT BORROWINGS
CONSISTING OF EUROCURRENCY RATE ADVANCES, THE REVOLVING CREDIT ADVANCES MAY NOT
BE OUTSTANDING AS PART OF MORE THAN SIX SEPARATE REVOLVING CREDIT BORROWINGS IN
THE AGGREGATE.

 

(C)                                  EACH NOTICE OF REVOLVING CREDIT BORROWING
SHALL BE IRREVOCABLE AND BINDING ON THE BORROWER GIVING SUCH NOTICE.  IN THE
CASE OF ANY REVOLVING CREDIT BORROWING THAT THE RELATED NOTICE OF REVOLVING
CREDIT BORROWING SPECIFIES IS TO BE COMPRISED OF EUROCURRENCY RATE ADVANCES, THE
APPLICABLE BORROWER SHALL INDEMNIFY EACH LENDER AGAINST ANY LOSS, COST OR
EXPENSE INCURRED BY SUCH LENDER AS A RESULT OF ANY FAILURE TO FULFILL ON OR
BEFORE THE DATE SPECIFIED IN SUCH NOTICE OF REVOLVING CREDIT BORROWING FOR SUCH
REVOLVING CREDIT BORROWING THE APPLICABLE CONDITIONS SET FORTH IN ARTICLE III,
INCLUDING, WITHOUT LIMITATION, ANY LOSS, COST OR EXPENSE INCURRED BY REASON OF
THE LIQUIDATION OR REEMPLOYMENT OF DEPOSITS OR OTHER FUNDS ACQUIRED BY SUCH
LENDER TO FUND THE REVOLVING CREDIT ADVANCE TO BE MADE BY SUCH LENDER AS PART OF
SUCH REVOLVING CREDIT BORROWING WHEN SUCH REVOLVING CREDIT ADVANCE, AS A RESULT
OF SUCH FAILURE, IS NOT MADE ON SUCH DATE.

 

(D)                                 UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED NOTICE FROM A LENDER PRIOR TO THE DATE OF ANY REVOLVING CREDIT
BORROWING THAT SUCH LENDER WILL NOT MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT
SUCH LENDER’S RATABLE PORTION OF SUCH REVOLVING CREDIT BORROWING, THE
ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH PORTION AVAILABLE
TO THE ADMINISTRATIVE AGENT ON THE DATE OF SUCH REVOLVING CREDIT BORROWING IN
ACCORDANCE WITH SUBSECTION (A) OR (B) OF THIS SECTION 2.02 AND THE
ADMINISTRATIVE AGENT MAY, IN RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE TO
THE APPLICABLE BORROWER ON SUCH DATE A CORRESPONDING AMOUNT.  IF AND TO THE
EXTENT THAT SUCH LENDER SHALL NOT HAVE SO MADE SUCH RATABLE PORTION AVAILABLE TO
THE ADMINISTRATIVE AGENT, SUCH LENDER AND THE APPLICABLE BORROWER SEVERALLY
AGREE TO REPAY OR PAY TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND SUCH
CORRESPONDING AMOUNT AND TO PAY INTEREST THEREON, FOR EACH DAY FROM THE DATE
SUCH AMOUNT IS MADE AVAILABLE TO SUCH BORROWER UNTIL THE DATE SUCH AMOUNT IS
REPAID OR PAID TO THE ADMINISTRATIVE AGENT, AT (I) IN THE CASE OF SUCH BORROWER,
THE HIGHER OF (A) THE INTEREST RATE APPLICABLE AT THE TIME TO REVOLVING CREDIT
ADVANCES COMPRISING SUCH REVOLVING CREDIT BORROWING AND (B) THE COST OF FUNDS
INCURRED BY THE ADMINISTRATIVE AGENT IN RESPECT OF SUCH AMOUNT AND (II) IN THE
CASE OF SUCH LENDER, (A) THE FEDERAL FUNDS RATE IN THE CASE OF REVOLVING CREDIT
ADVANCES DENOMINATED IN DOLLARS OR (B) THE COST OF FUNDS INCURRED BY THE
ADMINISTRATIVE AGENT IN RESPECT OF SUCH AMOUNT IN THE CASE OF REVOLVING CREDIT
ADVANCES DENOMINATED IN COMMITTED CURRENCIES.  IF SUCH LENDER SHALL PAY TO THE
ADMINISTRATIVE AGENT SUCH CORRESPONDING AMOUNT, SUCH AMOUNT SO PAID IN RESPECT
OF PRINCIPAL SHALL CONSTITUTE SUCH LENDER’S REVOLVING CREDIT ADVANCE AS PART OF
SUCH REVOLVING CREDIT BORROWING FOR ALL PURPOSES.

 

(E)                                  THE FAILURE OF ANY LENDER TO MAKE THE
REVOLVING CREDIT ADVANCE TO BE MADE BY IT AS PART OF ANY REVOLVING CREDIT
BORROWING SHALL NOT RELIEVE ANY OTHER LENDER OF ITS OBLIGATION, IF ANY,

 

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HEREUNDER TO MAKE ITS REVOLVING CREDIT ADVANCE ON THE DATE OF SUCH REVOLVING
CREDIT BORROWING, BUT NO LENDER SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY
OTHER LENDER TO MAKE THE REVOLVING CREDIT ADVANCE TO BE MADE BY SUCH OTHER
LENDER ON THE DATE OF ANY REVOLVING CREDIT BORROWING.

 

SECTION 2.03  Issuance of and Drawings and Reimbursement Under Letters of
Credit.  (a)  Request for Issuance.  Each Letter of Credit shall be issued upon
notice, given not later than 10:00 A.M. (Los Angeles, California time) on the
third Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the applicable Borrower to the Issuing Bank, which shall give to the
Administrative Agent prompt notice thereof by telecopier.  Each such notice of
issuance of a Letter of Credit (a “Notice of Issuance”) shall be by telecopier,
specifying therein the requested (A) date of such issuance (which shall be a
Business Day), (B) Available Amount and currency of such Letter of Credit,
(C) expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and
shall be accompanied by such application and agreement for letter of credit as
the Issuing Bank may specify to such Borrower for use in connection with such
requested Letter of Credit (a “Letter of Credit Agreement”),and further shall be
appropriately completed and signed by a Responsible Officer of the Borrower (or
any individual designated by such Responsible Officer in writing to the
Administrative Agent).  If the requested form of such Letter of Credit is
acceptable to the Issuing Bank in its sole discretion, the Issuing Bank will,
upon fulfillment of the applicable conditions set forth in Article III, make
such Letter of Credit available to the applicable Borrower at its office
referred to in Section 9.02 or as otherwise agreed with such Borrower in
connection with such issuance.  In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this Agreement,
the provisions of this Agreement shall govern.

 

(B)                                 LETTER OF CREDIT REPORTS.  THE ISSUING BANK
SHALL FURNISH (A) TO THE ADMINISTRATIVE AGENT ON THE FIRST BUSINESS DAY OF EACH
WEEK A WRITTEN REPORT SUMMARIZING ISSUANCE AND EXPIRATION DATES OF LETTERS OF
CREDIT ISSUED DURING THE PREVIOUS WEEK AND DRAWINGS DURING SUCH WEEK UNDER ALL
LETTERS OF CREDIT, (B) TO EACH LENDER ON THE FIRST BUSINESS DAY OF EACH CALENDAR
QUARTER A WRITTEN REPORT SUMMARIZING ISSUANCE AND EXPIRATION DATES OF LETTERS OF
CREDIT ISSUED DURING THE PRECEDING QUARTER AND DRAWINGS DURING SUCH CALENDAR
QUARTER UNDER ALL LETTERS OF CREDIT AND (C) TO THE ADMINISTRATIVE AGENT AND EACH
LENDER ON THE FIRST BUSINESS DAY OF EACH CALENDAR QUARTER A WRITTEN REPORT
SETTING FORTH THE AVERAGE DAILY AGGREGATE AVAILABLE AMOUNT DURING THE PRECEDING
CALENDAR QUARTER OF ALL LETTERS OF CREDIT.

 

(C)                                  DRAWING AND REIMBURSEMENT.  THE PAYMENT BY
THE ISSUING BANK OF A DRAFT DRAWN UNDER ANY LETTER OF CREDIT SHALL CONSTITUTE
FOR ALL PURPOSES OF THIS AGREEMENT THE MAKING BY THE ISSUING BANK OF A LETTER OF
CREDIT ADVANCE, WHICH, IF SUCH PAYMENT IS MADE IN A COMMITTED CURRENCY, SHALL BE
IMMEDIATELY REDENOMINATED INTO DOLLARS AND, IN ANY CASE, SHALL BE A BASE RATE
ADVANCE, IN THE AMOUNT OF SUCH DRAFT.  IN THE EVENT OF ANY DRAWING UNDER A
LETTER OF CREDIT, THE ISSUING BANK SHALL PROMPTLY NOTIFY THE ADMINISTRATIVE
AGENT, AND THE ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY EACH LENDER AND EACH
LENDER SHALL PURCHASE FROM THE ISSUING BANK, AND THE ISSUING BANK SHALL SELL AND
ASSIGN TO EACH SUCH LENDER, SUCH LENDER’S PRO RATA SHARE OF SUCH OUTSTANDING
LETTER OF CREDIT ADVANCE AS OF THE DATE OF SUCH PURCHASE, BY MAKING AVAILABLE
FOR THE ACCOUNT OF ITS APPLICABLE LENDING OFFICE TO THE ADMINISTRATIVE AGENT FOR
THE ACCOUNT OF THE ISSUING BANK, BY DEPOSIT TO THE ADMINISTRATIVE AGENT’S
ACCOUNT, IN SAME DAY FUNDS, AN AMOUNT EQUAL TO THE PORTION OF THE OUTSTANDING
PRINCIPAL AMOUNT OF SUCH LETTER OF CREDIT ADVANCE TO BE PURCHASED BY SUCH
LENDER.  PROMPTLY AFTER RECEIPT THEREOF, THE ADMINISTRATIVE AGENT SHALL TRANSFER
SUCH FUNDS TO THE ISSUING BANK.  EACH BORROWER HEREBY AGREES TO EACH SUCH SALE
AND ASSIGNMENT.  EACH LENDER AGREES TO PURCHASE ITS PRO RATA SHARE OF AN
OUTSTANDING LETTER OF CREDIT ADVANCE ON (I) THE BUSINESS DAY ON WHICH NOTICE OF
THE DRAWING UNDER THE RELATED LETTER OF CREDIT IS GIVEN BY THE ISSUING BANK,
PROVIDED SUCH NOTICE IS GIVEN NOT LATER THAN 10:00 A.M. (LOS ANGELES, CALIFORNIA
TIME) ON SUCH BUSINESS DAY OR (II) THE FIRST BUSINESS DAY NEXT SUCCEEDING SUCH
DEMAND IF SUCH NOTICE IS GIVEN AFTER SUCH TIME.  UPON ANY SUCH ASSIGNMENT BY THE
ISSUING BANK TO ANY OTHER LENDER OF A PORTION OF A LETTER OF CREDIT ADVANCE, THE
ISSUING BANK REPRESENTS AND WARRANTS TO SUCH OTHER LENDER THAT THE ISSUING BANK
IS

 

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THE LEGAL AND BENEFICIAL OWNER OF SUCH INTEREST BEING ASSIGNED BY IT, FREE AND
CLEAR OF ANY LIENS, BUT MAKES NO OTHER REPRESENTATION OR WARRANTY AND ASSUMES NO
RESPONSIBILITY WITH RESPECT TO SUCH LETTER OF CREDIT ADVANCE, THE LOAN DOCUMENTS
OR ANY LOAN PARTY.  IF AND TO THE EXTENT THAT ANY LENDER SHALL NOT HAVE SO MADE
THE AMOUNT OF SUCH LETTER OF CREDIT ADVANCE AVAILABLE TO THE ADMINISTRATIVE
AGENT, SUCH LENDER AGREES TO PAY TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND
SUCH AMOUNT TOGETHER WITH INTEREST THEREON, FOR EACH DAY FROM THE DATE OF DEMAND
BY THE ISSUING BANK UNTIL THE DATE SUCH AMOUNT IS PAID TO THE ADMINISTRATIVE
AGENT, AT THE FEDERAL FUNDS RATE FOR ITS ACCOUNT OR THE ACCOUNT OF THE ISSUING
BANK, AS APPLICABLE.  IF SUCH LENDER SHALL PAY TO THE ADMINISTRATIVE AGENT SUCH
AMOUNT FOR THE ACCOUNT OF THE ISSUING BANK ON ANY BUSINESS DAY, SUCH AMOUNT SO
PAID IN RESPECT OF PRINCIPAL SHALL CONSTITUTE A LETTER OF CREDIT ADVANCE MADE BY
SUCH LENDER ON SUCH BUSINESS DAY FOR PURPOSES OF THIS AGREEMENT, AND THE
OUTSTANDING PRINCIPAL AMOUNT OF THE LETTER OF CREDIT ADVANCE MADE BY THE ISSUING
BANK SHALL BE REDUCED BY SUCH AMOUNT ON SUCH BUSINESS DAY.

 

(D)                                 FAILURE TO MAKE LETTER OF CREDIT ADVANCES. 
THE FAILURE OF ANY LENDER TO MAKE THE LETTER OF CREDIT ADVANCE TO BE MADE BY IT
ON THE DATE SPECIFIED IN SECTION 2.03(C) SHALL NOT RELIEVE ANY OTHER LENDER OF
ITS OBLIGATION HEREUNDER TO MAKE ITS LETTER OF CREDIT ADVANCE ON SUCH DATE, BUT
NO LENDER SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER TO MAKE THE
LETTER OF CREDIT ADVANCE TO BE MADE BY SUCH OTHER LENDER ON SUCH DATE.

 

SECTION 2.04  The Competitive Bid Advances.  (a)  Each Lender severally agrees
that each Borrower may request Competitive Bid Borrowings denominated in Foreign
Currencies under this Section 2.04 from time to time on any Business Day during
the period from the date hereof until the date occurring 30 days prior to the
Termination Date in the manner set forth below, provided, however, that (x) the
aggregate principal amount of the Advances then outstanding (based in respect of
any Advance denominated in a Foreign Currency or a Committed Currency on the
Equivalent in Dollars at the time such Competitive Bid Borrowing is requested)
plus (y) the aggregate Available Amount of all Letters of Credit outstanding at
such time shall not exceed the Facility.

 

(I)                                     EACH BORROWER MAY REQUEST A COMPETITIVE
BID BORROWING UNDER THIS SECTION 2.04 BY DELIVERING TO THE ADMINISTRATIVE AGENT,
BY TELECOPIER, A NOTICE OF A COMPETITIVE BID BORROWING (A “NOTICE OF COMPETITIVE
BID BORROWING”), IN SUBSTANTIALLY THE FORM OF EXHIBIT B-2 HERETO, SPECIFYING
THEREIN THE REQUESTED (A) DATE OF SUCH PROPOSED COMPETITIVE BID BORROWING,
(B) AGGREGATE AMOUNT OF SUCH PROPOSED COMPETITIVE BID BORROWING, (C) INTEREST
RATE BASIS AND DAY COUNT CONVENTION TO BE OFFERED BY THE LENDERS, (D) CURRENCY
OF SUCH PROPOSED COMPETITIVE BID BORROWING, (E) IN THE CASE OF A COMPETITIVE BID
BORROWING CONSISTING OF LIBO RATE ADVANCES, INTEREST PERIOD, OR IN THE CASE OF A
COMPETITIVE BID BORROWING CONSISTING OF LOCAL RATE ADVANCES, MATURITY DATE FOR
REPAYMENT OF EACH LOCAL RATE ADVANCE TO BE MADE AS PART OF SUCH COMPETITIVE BID
BORROWING (WHICH MATURITY DATE MAY NOT BE EARLIER THAN THE DATE OCCURRING SEVEN
DAYS AFTER THE DATE OF SUCH COMPETITIVE BID BORROWING OR LATER THAN THE EARLIER
OF (I) 180 DAYS AFTER THE DATE OF SUCH COMPETITIVE BID BORROWING AND (II) THE
TERMINATION DATE), (F) INTEREST PAYMENT DATE OR DATES RELATING THERETO,
(G) LOCATION OF SUCH BORROWER’S ACCOUNT TO WHICH FUNDS ARE TO BE ADVANCED AND
(H) OTHER TERMS (IF ANY) TO BE APPLICABLE TO SUCH COMPETITIVE BID BORROWING, NOT
LATER THAN (X) 10:00 A.M. (LONDON TIME) AT LEAST FOUR BUSINESS DAYS PRIOR TO THE
DATE OF THE PROPOSED COMPETITIVE BID BORROWING, IF SUCH BORROWER SHALL SPECIFY
IN THE NOTICE OF COMPETITIVE BID BORROWING THAT THE RATES OF INTEREST TO BE
OFFERED BY THE LENDERS SHALL BE FIXED RATES PER ANNUM (THE ADVANCES COMPRISING
ANY SUCH COMPETITIVE BID BORROWING BEING REFERRED TO HEREIN AS “FIXED RATE
ADVANCES”) OR LOCAL RATE ADVANCES AND (Y) 10:00AM (LONDON TIME) AT LEAST FOUR
BUSINESS DAYS PRIOR TO THE DATE OF THE PROPOSED COMPETITIVE BID BORROWING, IF
SUCH BORROWER SHALL SPECIFY IN THE NOTICE OF COMPETITIVE BID BORROWING THAT THE
ADVANCES COMPRISING SUCH COMPETITIVE BID BORROWING SHALL BE LIBO RATE ADVANCES. 
EACH NOTICE OF COMPETITIVE BID BORROWING SHALL BE APPROPRIATELY COMPLETED AND
SIGNED BY A RESPONSIBLE OFFICER OF THE BORROWER

 

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(OR ANY INDIVIDUAL DESIGNATED BY SUCH RESPONSIBLE OFFICER IN WRITING TO THE
ADMINISTRATIVE AGENT).  EACH NOTICE OF COMPETITIVE BID BORROWING SHALL BE
IRREVOCABLE AND BINDING ON THE BORROWER GIVING SUCH NOTICE.  ANY NOTICE OF
COMPETITIVE BID BORROWING BY A DESIGNATED SUBSIDIARY SHALL BE GIVEN TO THE
ADMINISTRATIVE AGENT IN ACCORDANCE WITH THE PRECEDING SENTENCE THROUGH THE
COMPANY ON BEHALF OF SUCH DESIGNATED SUBSIDIARY.  THE ADMINISTRATIVE AGENT SHALL
IN TURN PROMPTLY NOTIFY EACH LENDER OF EACH REQUEST FOR A COMPETITIVE BID
BORROWING RECEIVED BY IT FROM ANY BORROWER BY SENDING SUCH LENDER A COPY OF THE
RELATED NOTICE OF COMPETITIVE BID BORROWING.

 

(II)                                  EACH LENDER MAY, IF, IN ITS SOLE
DISCRETION, IT ELECTS TO DO SO, IRREVOCABLY OFFER TO MAKE ONE OR MORE
COMPETITIVE BID ADVANCES TO THE APPLICABLE BORROWER AS PART OF SUCH PROPOSED
COMPETITIVE BID BORROWING AT A RATE OR RATES OF INTEREST SPECIFIED BY SUCH
LENDER IN ITS SOLE DISCRETION, BY NOTIFYING THE ADMINISTRATIVE AGENT (WHICH
SHALL GIVE PROMPT NOTICE THEREOF TO SUCH BORROWER), (A) BEFORE 12:00 NOON
(LONDON TIME) ON THE BUSINESS DAY PRIOR TO THE DATE OF SUCH PROPOSED COMPETITIVE
BID BORROWING, IN THE CASE OF A COMPETITIVE BID BORROWING CONSISTING OF EITHER
FIXED RATE ADVANCES OR LOCAL RATE ADVANCES AND (B) BEFORE 12:00 NOON (LONDON
TIME) ON THE THIRD BUSINESS DAY PRIOR TO THE DATE OF SUCH PROPOSED COMPETITIVE
BID BORROWING, IN THE CASE OF A COMPETITIVE BID BORROWING CONSISTING OF LIBO
RATE ADVANCES, OF THE MINIMUM AMOUNT AND MAXIMUM AMOUNT OF EACH COMPETITIVE BID
ADVANCE WHICH SUCH LENDER WOULD BE WILLING TO MAKE AS PART OF SUCH PROPOSED
COMPETITIVE BID BORROWING (WHICH AMOUNTS OR THE EQUIVALENT THEREOF IN DOLLARS,
AS THE CASE MAY BE, OF SUCH PROPOSED COMPETITIVE BID MAY, SUBJECT TO THE PROVISO
TO THE FIRST SENTENCE OF THIS SECTION 2.04(A), EXCEED SUCH LENDER’S COMMITMENT,
IF ANY), THE RATE OR RATES OF INTEREST THEREFOR AND SUCH LENDER’S APPLICABLE
LENDING OFFICE WITH RESPECT TO SUCH COMPETITIVE BID ADVANCE; PROVIDED THAT IF
THE ADMINISTRATIVE AGENT IN ITS CAPACITY AS A LENDER SHALL, IN ITS SOLE
DISCRETION, ELECT TO MAKE ANY SUCH OFFER, IT SHALL NOTIFY THE APPLICABLE
BORROWER OF SUCH OFFER AT LEAST 30 MINUTES BEFORE THE TIME AND ON THE DATE ON
WHICH NOTICE OF SUCH ELECTION IS TO BE GIVEN TO THE ADMINISTRATIVE AGENT, BY THE
OTHER LENDERS.  IF ANY LENDER SHALL ELECT NOT TO MAKE SUCH AN OFFER, SUCH LENDER
SHALL SO NOTIFY THE ADMINISTRATIVE AGENT BEFORE 12:00 NOON (LONDON TIME) ON THE
DATE ON WHICH NOTICE OF SUCH ELECTION IS TO BE GIVEN TO THE ADMINISTRATIVE
AGENT, BY THE OTHER LENDERS, AND SUCH LENDER SHALL NOT BE OBLIGATED TO, AND
SHALL NOT, MAKE ANY COMPETITIVE BID ADVANCE AS PART OF SUCH COMPETITIVE BID
BORROWING; PROVIDED THAT THE FAILURE BY ANY LENDER TO GIVE SUCH NOTICE SHALL NOT
CAUSE SUCH LENDER TO BE OBLIGATED TO MAKE ANY COMPETITIVE BID ADVANCE AS PART OF
SUCH PROPOSED COMPETITIVE BID BORROWING.

 

(III)                               THE BORROWER REQUESTING SUCH COMPETITIVE BID
BORROWING SHALL, IN TURN, (A) BEFORE 3:00 P.M. (LONDON TIME) ON THE BUSINESS DAY
PRIOR TO THE DATE OF SUCH PROPOSED COMPETITIVE BID BORROWING, IN THE CASE OF A
COMPETITIVE BID BORROWING CONSISTING OF EITHER FIXED RATE ADVANCES OR LOCAL RATE
ADVANCES AND (B) BEFORE 3:00 P.M. (LONDON TIME) ON THE THIRD BUSINESS DAY PRIOR
TO THE DATE OF SUCH COMPETITIVE BID BORROWING, IN THE CASE OF A COMPETITIVE BID
BORROWING CONSISTING OF LIBO RATE ADVANCES, EITHER:

 

(x)                                   cancel such Competitive Bid Borrowing by
giving the Administrative Agent notice to that effect, or

 

(y)                                 accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (ii) above, in its sole discretion, by
giving notice to the Administrative Agent, of the amount of each Competitive Bid
Advance (which amount shall be equal to or greater than the minimum amount, and
equal to or less than the maximum amount, notified to such Borrower by the
Administrative Agent, on behalf of such Lender for such Competitive Bid Advance
pursuant to

 

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paragraph (ii) above) to be made by each Lender as part of such Competitive Bid
Borrowing, and reject any remaining offers made by Lenders pursuant to
paragraph (ii) above by giving the Administrative Agent notice to that effect. 
The Borrower requesting such Competitive Bid Borrowing shall accept the offers
made by any Lender or Lenders to make Competitive Bid Advances in order of the
lowest to the highest rates of interest offered by such Lenders.  If two or more
Lenders have offered the same interest rate, the amount to be borrowed at such
interest rate will be allocated among such Lenders in proportion to the amount
that each such Lender offered at such interest rate.

 

(IV)                              IF THE BORROWER REQUESTING SUCH COMPETITIVE
BID BORROWING NOTIFIES THE ADMINISTRATIVE AGENT THAT SUCH COMPETITIVE BID
BORROWING IS CANCELLED PURSUANT TO PARAGRAPH (III)(X) ABOVE, THE ADMINISTRATIVE
AGENT SHALL GIVE PROMPT NOTICE THEREOF TO THE LENDERS AND SUCH COMPETITIVE BID
BORROWING SHALL NOT BE MADE.

 

(V)                                 IF THE BORROWER REQUESTING SUCH COMPETITIVE
BID BORROWING ACCEPTS ONE OR MORE OF THE OFFERS MADE BY ANY LENDER OR LENDERS
PURSUANT TO PARAGRAPH (III)(Y) ABOVE, THE ADMINISTRATIVE AGENT SHALL IN TURN
PROMPTLY NOTIFY (A) EACH LENDER THAT HAS MADE AN OFFER AS DESCRIBED IN
PARAGRAPH (II) ABOVE, OF THE DATE AND AGGREGATE AMOUNT OF SUCH COMPETITIVE BID
BORROWING AND WHETHER OR NOT ANY OFFER OR OFFERS MADE BY SUCH LENDER PURSUANT TO
PARAGRAPH (II) ABOVE HAVE BEEN ACCEPTED BY SUCH BORROWER, (B) EACH LENDER THAT
IS TO MAKE A COMPETITIVE BID ADVANCE AS PART OF SUCH COMPETITIVE BID BORROWING,
OF THE AMOUNT OF EACH COMPETITIVE BID ADVANCE TO BE MADE BY SUCH LENDER AS PART
OF SUCH COMPETITIVE BID BORROWING, AND (C) EACH LENDER THAT IS TO MAKE A
COMPETITIVE BID ADVANCE AS PART OF SUCH COMPETITIVE BID BORROWING, UPON RECEIPT,
THAT THE ADMINISTRATIVE AGENT HAS RECEIVED FORMS OF DOCUMENTS APPEARING TO
FULFILL THE APPLICABLE CONDITIONS SET FORTH IN ARTICLE III.  EACH LENDER THAT IS
TO MAKE A COMPETITIVE BID ADVANCE AS PART OF SUCH COMPETITIVE BID BORROWING
SHALL, BEFORE 11:00 A.M. (LONDON TIME), ON THE DATE OF SUCH COMPETITIVE BID
BORROWING SPECIFIED IN THE NOTICE RECEIVED FROM THE ADMINISTRATIVE AGENT
PURSUANT TO CLAUSE (A) OF THE PRECEDING SENTENCE OR ANY LATER TIME WHEN SUCH
LENDER SHALL HAVE RECEIVED NOTICE FROM THE ADMINISTRATIVE AGENT PURSUANT TO
CLAUSE (C) OF THE PRECEDING SENTENCE, MAKE AVAILABLE FOR THE ACCOUNT OF ITS
APPLICABLE LENDING OFFICE TO THE ADMINISTRATIVE AGENT AT THE ADMINISTRATIVE
AGENT’S ACCOUNT AS SHALL HAVE BEEN NOTIFIED BY THE ADMINISTRATIVE AGENT TO THE
LENDERS PRIOR THERETO, IN SAME DAY FUNDS, SUCH LENDER’S PORTION OF SUCH
COMPETITIVE BID BORROWING.  UPON FULFILLMENT OF THE APPLICABLE CONDITIONS SET
FORTH IN ARTICLE III AND AFTER RECEIPT BY THE ADMINISTRATIVE AGENT OF SUCH
FUNDS, THE ADMINISTRATIVE AGENT WILL MAKE SUCH FUNDS AVAILABLE TO SUCH BORROWER
AT THE LOCATION SPECIFIED BY SUCH BORROWER IN ITS NOTICE OF COMPETITIVE BID
BORROWING.  PROMPTLY AFTER EACH COMPETITIVE BID BORROWING THE ADMINISTRATIVE
AGENT WILL NOTIFY EACH LENDER OF THE AMOUNT OF THE COMPETITIVE BID BORROWING,
THE CONSEQUENT COMPETITIVE BID REDUCTION AND THE DATES UPON WHICH SUCH
COMPETITIVE BID REDUCTION COMMENCED AND WILL TERMINATE.

 

(VI)                              IF THE BORROWER REQUESTING SUCH COMPETITIVE
BID BORROWING NOTIFIES THE ADMINISTRATIVE AGENT THAT IT ACCEPTS ONE OR MORE OF
THE OFFERS MADE BY ANY LENDER OR LENDERS PURSUANT TO PARAGRAPH (III)(Y) ABOVE,
SUCH NOTICE OF ACCEPTANCE SHALL BE IRREVOCABLE AND BINDING ON SUCH BORROWER. 
THE BORROWER REQUESTING SUCH COMPETITIVE BID BORROWING SHALL INDEMNIFY EACH
LENDER AGAINST ANY LOSS, COST OR EXPENSE INCURRED BY SUCH LENDER AS A RESULT OF
ANY FAILURE TO FULFILL ON OR BEFORE THE DATE SPECIFIED IN THE RELATED NOTICE OF
COMPETITIVE BID BORROWING FOR SUCH COMPETITIVE BID BORROWING THE APPLICABLE
CONDITIONS SET FORTH IN ARTICLE III, INCLUDING, WITHOUT LIMITATION, ANY LOSS
(INCLUDING LOSS OF ANTICIPATED PROFITS), COST OR EXPENSE INCURRED BY REASON OF
THE LIQUIDATION OR REEMPLOYMENT OF DEPOSITS OR OTHER FUNDS ACQUIRED BY SUCH
LENDER TO FUND THE

 

--------------------------------------------------------------------------------

 

COMPETITIVE BID ADVANCE TO BE MADE BY SUCH LENDER AS PART OF SUCH COMPETITIVE
BID BORROWING WHEN SUCH COMPETITIVE BID ADVANCE, AS A RESULT OF SUCH FAILURE, IS
NOT MADE ON SUCH DATE.

 

(B)                                 EACH COMPETITIVE BID BORROWING SHALL BE IN
AN AGGREGATE AMOUNT OF $2,500,000 (OR THE EQUIVALENT THEREOF IN ANY FOREIGN
CURRENCY, DETERMINED AS OF THE TIME OF THE APPLICABLE NOTICE OF COMPETITIVE BID
BORROWING) OR AN INTEGRAL MULTIPLE OF $1,000,000 (OR THE EQUIVALENT THEREOF IN
ANY FOREIGN CURRENCY, DETERMINED AS OF THE TIME OF THE APPLICABLE NOTICE OF
COMPETITIVE BID BORROWING) IN EXCESS THEREOF AND, FOLLOWING THE MAKING OF EACH
COMPETITIVE BID BORROWING, THE BORROWERS AND EACH LENDER SHALL BE IN COMPLIANCE
WITH THE LIMITATIONS SET FORTH IN THE PROVISO TO THE FIRST SENTENCE OF
SUBSECTION (A) ABOVE.

 

(C)                                  WITHIN THE LIMITS AND ON THE CONDITIONS SET
FORTH IN THIS SECTION 2.04, THE BORROWERS MAY FROM TIME TO TIME BORROW UNDER
THIS SECTION 2.04, REPAY OR PREPAY PURSUANT TO SUBSECTION (D) BELOW, AND
REBORROW UNDER THIS SECTION 2.04, PROVIDED THAT A COMPETITIVE BID BORROWING
SHALL NOT BE MADE WITHIN THREE BUSINESS DAYS OF THE DATE OF ANY OTHER
COMPETITIVE BID BORROWING.

 

(D)                                 EACH BORROWER SHALL REPAY TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH LENDER THAT HAS MADE A COMPETITIVE
BID ADVANCE TO SUCH BORROWER, ON THE MATURITY DATE OF EACH COMPETITIVE BID
ADVANCE (SUCH MATURITY DATE BEING THAT SPECIFIED BY SUCH BORROWER FOR REPAYMENT
OF SUCH COMPETITIVE BID ADVANCE IN THE RELATED NOTICE OF COMPETITIVE BID
BORROWING DELIVERED PURSUANT TO SUBSECTION (A)(I) ABOVE AND PROVIDED IN THE
COMPETITIVE BID NOTE EVIDENCING SUCH COMPETITIVE BID ADVANCE), THE THEN UNPAID
PRINCIPAL AMOUNT OF SUCH COMPETITIVE BID ADVANCE.  NO BORROWER SHALL HAVE ANY
RIGHT TO PREPAY ANY PRINCIPAL AMOUNT OF ANY COMPETITIVE BID ADVANCE UNLESS, AND
THEN ONLY ON THE TERMS, SPECIFIED BY SUCH BORROWER FOR SUCH COMPETITIVE BID
ADVANCE IN THE RELATED NOTICE OF COMPETITIVE BID BORROWING DELIVERED PURSUANT TO
SUBSECTION (A)(I) ABOVE AND SET FORTH IN THE COMPETITIVE BID NOTE EVIDENCING
SUCH COMPETITIVE BID ADVANCE.

 

(E)                                  EACH BORROWER SHALL PAY INTEREST ON THE
UNPAID PRINCIPAL AMOUNT OF EACH COMPETITIVE BID ADVANCE MADE TO IT FROM THE DATE
OF SUCH COMPETITIVE BID ADVANCE TO THE DATE THE PRINCIPAL AMOUNT OF SUCH
COMPETITIVE BID ADVANCE IS REPAID IN FULL, AT THE RATE OF INTEREST FOR SUCH
COMPETITIVE BID ADVANCE SPECIFIED BY THE LENDER MAKING SUCH COMPETITIVE BID
ADVANCE IN ITS NOTICE WITH RESPECT THERETO DELIVERED PURSUANT TO
SUBSECTION (A)(II) ABOVE, PAYABLE ON THE INTEREST PAYMENT DATE OR DATES
SPECIFIED BY SUCH BORROWER FOR SUCH COMPETITIVE BID ADVANCE IN THE RELATED
NOTICE OF COMPETITIVE BID BORROWING DELIVERED PURSUANT TO SUBSECTION (A)(I)
ABOVE, AS PROVIDED IN THE COMPETITIVE BID NOTE EVIDENCING SUCH COMPETITIVE BID
ADVANCE.  UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
EACH BORROWER SHALL PAY INTEREST ON THE AMOUNT OF UNPAID PRINCIPAL OF AND
INTEREST ON EACH COMPETITIVE BID ADVANCE MADE TO IT OWING TO A LENDER, PAYABLE
IN ARREARS ON THE DATE OR DATES INTEREST IS PAYABLE THEREON, AT A RATE PER ANNUM
EQUAL AT ALL TIMES TO 2% PER ANNUM ABOVE THE RATE PER ANNUM REQUIRED TO BE PAID
ON SUCH COMPETITIVE BID ADVANCE UNDER THE TERMS OF THE COMPETITIVE BID NOTE
EVIDENCING SUCH COMPETITIVE BID ADVANCE UNLESS OTHERWISE AGREED IN SUCH
COMPETITIVE BID NOTE.

 

(F)                                    THE INDEBTEDNESS OF EACH BORROWER
RESULTING FROM EACH COMPETITIVE BID ADVANCE MADE TO SUCH BORROWER AS PART OF A
COMPETITIVE BID BORROWING SHALL BE EVIDENCED BY A SEPARATE COMPETITIVE BID NOTE
OF SUCH BORROWER PAYABLE TO THE ORDER OF THE LENDER MAKING SUCH COMPETITIVE BID
ADVANCE.

 

SECTION 2.05  Repayment of Advances.  (a)  Revolving Credit Advances.  Each
Borrower shall repay to the Administrative Agent for the ratable account of the
Lenders on the Termination Date the aggregate outstanding principal amount of
the Revolving Credit Advances made to it then outstanding.

 

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(B)                                 LETTER OF CREDIT ADVANCES.  (I)  EACH
BORROWER SHALL REPAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE ISSUING
BANK AND EACH OTHER LENDER THAT HAS MADE A LETTER OF CREDIT ADVANCE TO OR FOR
THE BENEFIT OF SUCH BORROWER ON THE EARLIER OF DEMAND BY THE ADMINISTRATIVE
AGENT AND THE TERMINATION DATE THE OUTSTANDING PRINCIPAL AMOUNT OF EACH LETTER
OF CREDIT ADVANCE TO OR FOR THE BENEFIT OF SUCH BORROWER MADE BY EACH OF THEM,
EXCEPT FOR THE PAYMENT BY THE ISSUING BANK OF A DRAFT DRAWN UNDER ANY LETTER OF
CREDIT AFTER THE TERMINATION DATE WITH RESPECT TO A LETTER OF CREDIT OUTSTANDING
AFTER THE TERMINATION DATE IN ACCORDANCE WITH SECTION 2.01(B), IN WHICH CASE
SUCH REPAYMENT BY SUCH BORROWER SHALL BE MADE ON DEMAND BY THE ADMINISTRATIVE
AGENT.

 

(II)                                  THE OBLIGATIONS OF EACH BORROWER UNDER
THIS AGREEMENT, ANY LETTER OF CREDIT AGREEMENT AND ANY OTHER AGREEMENT OR
INSTRUMENT RELATING TO ANY LETTER OF CREDIT SHALL BE UNCONDITIONAL AND
IRREVOCABLE, AND SHALL BE PAID STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT, SUCH LETTER OF CREDIT AGREEMENT AND SUCH OTHER AGREEMENT OR
INSTRUMENT UNDER ALL CIRCUMSTANCES, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING
CIRCUMSTANCES:

 

(A)                              ANY LACK OF VALIDITY OR ENFORCEABILITY OF ANY
LOAN DOCUMENT, ANY LETTER OF CREDIT AGREEMENT, ANY LETTER OF CREDIT OR ANY OTHER
AGREEMENT OR INSTRUMENT RELATING THERETO (ALL OF THE FOREGOING BEING,
COLLECTIVELY, THE “L/C RELATED DOCUMENTS”);

 

(B)                                ANY CHANGE IN THE TIME, MANNER OR PLACE OF
PAYMENT OF, OR IN ANY OTHER TERM OF, ALL OR ANY OF THE OBLIGATIONS OF SUCH
BORROWER IN RESPECT OF ANY L/C RELATED DOCUMENT OR ANY OTHER AMENDMENT OR WAIVER
OF OR ANY CONSENT TO DEPARTURE FROM ALL OR ANY OF THE L/C RELATED DOCUMENTS;

 

(C)                                THE EXISTENCE OF ANY CLAIM, SET-OFF, DEFENSE
OR OTHER RIGHT THAT SUCH BORROWER MAY HAVE AT ANY TIME AGAINST ANY BENEFICIARY
OR ANY TRANSFEREE OF A LETTER OF CREDIT (OR ANY PERSONS FOR WHOM ANY SUCH
BENEFICIARY OR ANY SUCH TRANSFEREE MAY BE ACTING), THE ISSUING BANK OR ANY OTHER
PERSON,  WHETHER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THE L/C
RELATED DOCUMENTS OR ANY UNRELATED TRANSACTION;

 

(D)                               ANY STATEMENT OR ANY OTHER DOCUMENT PRESENTED
UNDER A LETTER OF CREDIT PROVING TO BE FORGED, FRAUDULENT, INVALID OR
INSUFFICIENT IN ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR INACCURATE
IN ANY RESPECT;

 

(E)                                 PAYMENT BY THE ISSUING BANK UNDER A LETTER
OF CREDIT AGAINST PRESENTATION OF A DRAFT OR CERTIFICATE THAT DOES NOT STRICTLY
COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT;

 

(F)                                 ANY EXCHANGE, RELEASE OR NON-PERFECTION OF
ANY COLLATERAL OR OTHER COLLATERAL, OR ANY RELEASE OR AMENDMENT OR WAIVER OF OR
CONSENT TO DEPARTURE FROM THE GUARANTIES OR ANY OTHER GUARANTEE, FOR ALL OR ANY
OF THE OBLIGATIONS OF SUCH BORROWER IN RESPECT OF THE L/C RELATED DOCUMENTS; OR

 

(G)                                ANY OTHER CIRCUMSTANCE OR HAPPENING
WHATSOEVER, WHETHER OR NOT SIMILAR TO ANY OF THE FOREGOING, INCLUDING, WITHOUT
LIMITATION, ANY OTHER CIRCUMSTANCE THAT MIGHT OTHERWISE CONSTITUTE A DEFENSE
AVAILABLE TO, OR A DISCHARGE OF, SUCH BORROWER OR A GUARANTOR,

 

provided, in each case, that payment by the Issuing Bank under the applicable
Letter of Credit shall not have constituted gross negligence or willful
misconduct of the Issuing Bank under the circumstances in question (as
determined by a final judgment of a court of competent jurisdiction).

 

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(C)                                  COMPETITIVE BID ADVANCES.  EACH BORROWER
SHALL REPAY ANY COMPETITIVE BID ADVANCE MADE TO SUCH BORROWER IN ACCORDANCE WITH
SECTION 2.04(D).

 

SECTION 2.06  Termination or Reduction of the Commitments.  The Company may,
upon at least five Business Days’ notice to the Administrative Agent, terminate
in whole or reduce in part the Unused Commitments; provided, however, that each
partial reduction of the Facility shall be in an aggregate amount of $5,000,000
or an integral multiple of $1,000,000 in excess thereof.

 

SECTION 2.07  Prepayments.  (a)  Optional.  Any Borrower may,  upon at least one
Business Day’s notice in the case of Base Rate Advances made to such Borrower
and three Business Days’ notice in the case of Eurocurrency Rate Advances made
to such Borrower, in each case to the Administrative Agent (received not later
than 10:00 A.M. Los Angeles, California time) stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given such
Borrower shall, prepay the outstanding aggregate principal amount of the
Revolving Credit Advances comprising part of the same Revolving Credit Borrowing
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the aggregate principal amount prepaid unless such prepayment is
with respect to a Revolving Credit Advance which is a Base Rate Advance;
provided, however, that (x) each partial prepayment shall be in an aggregate
principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof or the Equivalent thereof in a Committed Currency (determined on the
date notice of prepayment is given) and (y) if any prepayment of a Eurocurrency
Rate Advance shall be made other than on the last day of an Interest Period
therefor, such Borrower shall also pay any amounts owing pursuant to
Section 9.04(c).  Each notice of prepayment by a Designated Subsidiary shall be
given to the Administrative Agent through the Company.

 

(B)                                 MANDATORY.  (I) TO THE EXTENT THAT ON ANY
BUSINESS DAY (A) THE SUM OF THE AGGREGATE PRINCIPAL AMOUNT OF (OR THE EQUIVALENT
THEREOF OF DOLLARS) (X) THE REVOLVING CREDIT ADVANCES, (Y) THE COMPETITIVE BID
ADVANCES AND (Z) THE LETTER OF CREDIT ADVANCES THEN OUTSTANDING PLUS THE
AGGREGATE AVAILABLE AMOUNT OF ALL LETTERS OF CREDIT (OR THE EQUIVALENT THEREOF
OF DOLLARS) THEN OUTSTANDING EXCEEDS (B) THE FACILITY, THE BORROWERS SHALL FIRST
PREPAY AN AGGREGATE PRINCIPAL AMOUNT OF THE REVOLVING CREDIT ADVANCES COMPRISING
PART OF THE SAME REVOLVING CREDIT BORROWINGS AND THE LETTER OF CREDIT ADVANCES
EQUAL TO SUCH EXCESS AND, TO THE EXTENT ANY SUCH EXCESS REMAINS AFTER SUCH
PAYMENT, THE BORROWERS SHALL THEN PAY TO THE ADMINISTRATIVE AGENT FOR DEPOSIT IN
THE L/C CASH COLLATERAL ACCOUNT AN AMOUNT EQUAL TO SUCH REMAINING EXCESS.

 

(II)                                  IF THE ADMINISTRATIVE AGENT NOTIFIES THE
BORROWER THAT, ON ANY INTEREST PAYMENT DATE, THE SUM OF (A) THE AGGREGATE
PRINCIPAL AMOUNT OF ALL ADVANCES DENOMINATED IN DOLLARS THEN OUTSTANDING PLUS
(B) THE EQUIVALENT IN DOLLARS (DETERMINED ON THE THIRD BUSINESS DAY PRIOR TO
SUCH INTEREST PAYMENT DATE) OF THE AGGREGATE PRINCIPAL AMOUNT OF ALL ADVANCES
DENOMINATED IN COMMITTED CURRENCIES AND FOREIGN CURRENCIES THEN OUTSTANDING
EXCEEDS 105% OF THE AGGREGATE COMMITMENTS OF THE LENDERS ON SUCH DATE, THE
BORROWERS SHALL, WITHIN TWO BUSINESS DAYS AFTER RECEIPT OF SUCH NOTICE, PREPAY
THE OUTSTANDING PRINCIPAL AMOUNT OF ANY ADVANCES OWING BY THE BORROWERS IN AN
AGGREGATE AMOUNT SUFFICIENT TO REDUCE SUCH SUM TO AN AMOUNT NOT TO EXCEED 100%
OF THE AGGREGATE COMMITMENTS OF THE LENDERS ON SUCH DATE.

 

(III)                               PREPAYMENTS OF THE FACILITY MADE PURSUANT TO
THIS SUBSECTION (B) SHALL BE APPLIED FIRST TO PREPAY LETTER OF CREDIT ADVANCES
THEN OUTSTANDING UNTIL SUCH ADVANCES ARE PAID IN FULL, AND SECOND TO PREPAY
REVOLVING CREDIT ADVANCES THEN OUTSTANDING COMPRISING PART OF THE SAME
BORROWINGS UNTIL SUCH ADVANCES ARE PAID IN FULL, AND THIRD DEPOSITED IN THE L/C
CASH COLLATERAL ACCOUNT TO CASH COLLATERALIZE 100% OF THE AVAILABLE AMOUNT OF
THE LETTERS OF CREDIT THEN OUTSTANDING.  UPON THE DRAWING OF ANY LETTER OF
CREDIT FOR WHICH FUNDS ARE ON DEPOSIT IN THE

 

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L/C CASH COLLATERAL ACCOUNT, SUCH FUNDS SHALL BE APPLIED TO REIMBURSE THE
ISSUING BANK OR LENDERS, AS APPLICABLE.

 

(IV)                              ALL PREPAYMENTS UNDER THIS SUBSECTION (B)
SHALL BE MADE TOGETHER WITH ACCRUED INTEREST TO THE DATE OF SUCH PREPAYMENT ON
THE PRINCIPAL AMOUNT PREPAID, TOGETHER WITH ANY AMOUNTS OWING PURSUANT TO
SECTION 9.04(C).

 

SECTION 2.08  Interest on Revolving Credit Advances and Letter of Credit
Advances.  (a)  Scheduled Interest.  The Borrowers shall pay interest on the
unpaid principal amount of each Advance (other than a Competitive Bid Advance)
owing to each Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:

 

(I)                                     BASE RATE ADVANCES.  DURING SUCH PERIODS
AS SUCH ADVANCE IS A BASE RATE ADVANCE, A RATE PER ANNUM EQUAL AT ALL TIMES TO
THE SUM OF (A) THE BASE RATE IN EFFECT FROM TIME TO TIME PLUS (B) THE APPLICABLE
MARGIN IN EFFECT FROM TIME TO TIME, PAYABLE IN ARREARS QUARTERLY ON MARCH 31,
JUNE 30, SEPTEMBER 30 AND DECEMBER 31 DURING SUCH PERIODS, ON THE DATE OF ANY
PREPAYMENT THEREOF TO THE EXTENT REQUIRED UNDER SECTION 2.07 AND ON THE
TERMINATION DATE.

 

(II)                                  EUROCURRENCY RATE ADVANCES.  DURING SUCH
PERIODS AS SUCH ADVANCE IS A EUROCURRENCY RATE ADVANCE, A RATE PER ANNUM EQUAL
AT ALL TIMES DURING EACH INTEREST PERIOD FOR SUCH ADVANCE TO THE SUM OF (A) THE
EUROCURRENCY RATE FOR SUCH INTEREST PERIOD FOR SUCH ADVANCE PLUS (B) THE
APPLICABLE MARGIN, PAYABLE IN ARREARS ON THE LAST DAY OF SUCH INTEREST PERIOD
AND, IF SUCH INTEREST PERIOD HAS A DURATION OF MORE THAN THREE MONTHS, ON EACH
DAY THAT OCCURS DURING SUCH INTEREST PERIOD EVERY THREE MONTHS FROM THE FIRST
DAY OF SUCH INTEREST PERIOD AND ON THE DATE SUCH EUROCURRENCY RATE ADVANCE SHALL
BE CONVERTED OR PAID IN FULL.

 

(B)                                 DEFAULT INTEREST.  UPON THE OCCURRENCE AND
DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT THE ADMINISTRATIVE AGENT MAY, AND
UPON THE REQUEST OF THE REQUIRED LENDERS SHALL, REQUIRE THAT THE BORROWERS PAY
INTEREST ON (I) THE UNPAID PRINCIPAL AMOUNT OF EACH ADVANCE (OTHER THAN A
COMPETITIVE BID ADVANCE) OWING TO EACH LENDER, PAYABLE IN ARREARS ON THE DATES
REFERRED TO IN CLAUSE (A)(I) OR (A)(II) ABOVE AND ON DEMAND, AT A RATE PER ANNUM
EQUAL AT ALL TIMES TO 2% PER ANNUM ABOVE THE RATE PER ANNUM REQUIRED TO BE PAID
ON SUCH ADVANCE PURSUANT TO CLAUSE (A)(I) OR (A)(II) ABOVE AND (II) TO THE
FULLEST EXTENT PERMITTED BY LAW, THE AMOUNT OF ANY INTEREST, FEE OR OTHER AMOUNT
PAYABLE UNDER THE LOAN DOCUMENTS THAT IS NOT PAID WHEN DUE, FROM THE DATE SUCH
AMOUNT SHALL BE DUE UNTIL SUCH AMOUNT SHALL BE PAID IN FULL, PAYABLE IN ARREARS
ON THE DATE SUCH AMOUNT SHALL BE PAID IN FULL AND ON DEMAND, AT A RATE PER ANNUM
EQUAL AT ALL TIMES TO 2% PER ANNUM ABOVE THE RATE PER ANNUM REQUIRED TO BE PAID,
IN THE CASE OF INTEREST, ON THE TYPE OF ADVANCE ON WHICH SUCH INTEREST HAS
ACCRUED PURSUANT TO CLAUSE (A)(I) OR (A)(II) ABOVE AND, IN ALL OTHER CASES, ON
BASE RATE ADVANCES PURSUANT TO CLAUSE (A)(I) ABOVE; PROVIDED, HOWEVER, THAT
FOLLOWING ACCELERATION OF THE ADVANCES PURSUANT TO SECTION 6.01, INTEREST SHALL
ACCRUE AND BE PAYABLE AT THE RATE REQUIRED BY THIS SECTION 2.08(B), WHETHER OR
NOT REQUESTED BY THE ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS.  IN ADDITION,
FOLLOWING A FINAL COURT JUDGMENT IN FAVOR OF ANY LENDER PARTY WITH RESPECT TO
ANY OBLIGATION OF THE LOAN PARTIES UNDER THE LOAN DOCUMENTS, INTEREST SHALL
ACCRUE AT THE HIGHER OF THE STATUTORY JUDGMENT RATE OR THE RATE SPECIFIED IN THE
PRECEDING SENTENCE, PAYABLE ON DEMAND.

 

SECTION 2.09  Fees.  (a)  Commitment Fee.  The Company shall pay to the
Administrative Agent for the account of the Lenders a commitment fee, from the
date hereof in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date, payable in arrears
quarterly on March 31, June 30, September 30 and December 31, commencing
December 31, 2003, and on the Termination Date, at a percentage rate per annum
on the average daily Unused Commitment of such Lender, (which shall be
calculated for the purposes of this Section 2.09(a) disregarding clause (b)(iii)

 

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of the definition of “Unused Commitment”), which rate shall be (x) until the
earlier of (i) November 14, 2003 and (ii) three Business Days after the
Administrative Agent receives the certificate described in Section 5.03(c) for
the period ending September 30, 2003, equal to 0.50%, and (y) thereafter,
determined by reference to the Senior Leverage Ratio of the Company and its
Subsidiaries for the Rolling Period ended on or most recently prior to such date
as set forth below:

 

Senior Leverage
Ratio

 

Commitment Fee

 

Level I

 

 

 

less than 0.20 to 1.00

 

0.375

%

 

 

 

 

Level II

 

 

 

greater than or equal to 0.20 to 1.00

 

0.50

%

 

(B)                                 LETTER OF CREDIT FEES, ETC.  (I) EACH
BORROWER SHALL PAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH LENDER A
COMMISSION, PAYABLE IN ARREARS QUARTERLY ON MARCH 31, JUNE 30, SEPTEMBER 30 AND
DECEMBER 31, COMMENCING DECEMBER 31, 2003, AND ON THE TERMINATION DATE, ON SUCH
LENDER’S PRO RATA SHARE OF THE AVERAGE DAILY AGGREGATE AVAILABLE AMOUNT DURING
SUCH QUARTER OF ALL LETTERS OF CREDIT ISSUED FOR THE BENEFIT OF SUCH BORROWER
OUTSTANDING FROM TIME TO TIME AT THE APPLICABLE MARGIN FOR EUROCURRENCY RATE
ADVANCES UNDER THE FACILITY.

 

(II)                                  EACH BORROWER SHALL PAY TO THE ISSUING
BANK, FOR ITS OWN ACCOUNT, A FRONTING FEE OF 0.25% PLUS SUCH COMMISSIONS,
ISSUANCE FEES, TRANSFER FEES AND OTHER FEES AND CHARGES IN CONNECTION WITH THE
ISSUANCE OR ADMINISTRATION OF EACH LETTER OF CREDIT ISSUED FOR THE BENEFIT OF
SUCH BORROWER AS SUCH BORROWER AND THE ISSUING BANK SHALL AGREE.

 

(C)                                  AGENTS’ FEES.  THE COMPANY SHALL PAY TO THE
ADMINISTRATIVE AGENT FOR ITS OWN ACCOUNT SUCH FEES AS MAY FROM TIME TO TIME BE
AGREED BETWEEN THE COMPANY AND THE ADMINISTRATIVE AGENT.

 

SECTION 2.10  Conversion of Revolving Credit Advances.  (a)  Optional.  Any
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 10:00 A.M. (Los Angeles California time) on the third Business
Day prior to the date of the proposed Conversion and subject to the provisions
of Section 2.11, Convert all or any portion of the Revolving Credit Advances
denominated in Dollars made to it of one Type comprising the same Borrowing into
Revolving Credit Advances of the other Type; provided, however, that (x) if any
Conversion of Eurocurrency Rate Advances into Base Rate Advances is made other
than on the last day of an Interest Period for such Eurocurrency Rate Advances
such Borrower shall also pay any amounts owing pursuant to Section 9.04(c), (y)
any Conversion of Base Rate Advances into Eurocurrency Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b), and (z)
no Conversion of any Revolving Credit Advances shall result in more separate
Revolving Credit Borrowings than permitted under Section 2.02(b).  Each such
notice of Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the Revolving Credit Advances to be
Converted and (iii) if such Conversion is into Eurocurrency Rate Advances, the
duration of the initial Interest Period for such Revolving Credit Advances. 
Each notice of Conversion shall be irrevocable and binding on the Borrower
requesting such Conversion.

 

(B)                                 MANDATORY.  (I) IF, WITH RESPECT TO ANY
EUROCURRENCY RATE ADVANCES, ANY LENDER NOTIFIES THE ADMINISTRATIVE AGENT THAT
(I) SUCH LENDER IS UNABLE TO OBTAIN MATCHING DEPOSITS IN THE LONDON INTER-BANK
MARKET AT OR ABOUT 11:00 A.M. (LONDON TIME) ON THE SECOND BUSINESS DAY BEFORE
THE MAKING OF A BORROWING DENOMINATED IN DOLLARS OR THE THIRD BUSINESS DAY
BEFORE THE MAKING OF A BORROWING DENOMINATED IN ANY COMMITTED CURRENCY IN
SUFFICIENT AMOUNTS TO FUND SUCH LENDER’S REVOLVING CREDIT

 

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ADVANCES AS A PART OF SUCH BORROWING DURING ITS INTEREST PERIOD OR (II) THE
EUROCURRENCY RATE FOR ANY INTEREST PERIOD FOR SUCH ADVANCES WILL NOT ADEQUATELY
REFLECT THE COST TO SUCH LENDER OF MAKING, FUNDING OR MAINTAINING SUCH LENDER’S
EUROCURRENCY RATE ADVANCES FOR SUCH INTEREST PERIOD, THE ADMINISTRATIVE AGENT
SHALL FORTHWITH SO NOTIFY THE APPLICABLE BORROWER AND THE LENDERS, WHEREUPON
(A) SUCH BORROWER WILL, ON THE LAST DAY OF THE THEN EXISTING INTEREST PERIOD
THEREFOR, (1) IF SUCH EUROCURRENCY RATE ADVANCES ARE DENOMINATED IN DOLLARS,
EITHER (X) PREPAY SUCH ADVANCES OR (Y) CONVERT SUCH ADVANCES INTO BASE RATE
ADVANCES AND (2) IF SUCH EUROCURRENCY RATE ADVANCES ARE DENOMINATED IN ANY
COMMITTED CURRENCY, EITHER (X) PREPAY SUCH ADVANCES OR (Y) REDENOMINATE SUCH
ADVANCES INTO AN EQUIVALENT AMOUNT OF DOLLARS AND CONVERT SUCH ADVANCES INTO
BASE RATE ADVANCES AND (B) THE OBLIGATION OF THE LENDERS TO MAKE, OR TO CONVERT
REVOLVING CREDIT ADVANCES INTO, EUROCURRENCY RATE ADVANCES SHALL BE SUSPENDED
UNTIL THE ADMINISTRATIVE AGENT SHALL NOTIFY THE COMPANY AND THE LENDERS THAT THE
CIRCUMSTANCES CAUSING SUCH SUSPENSION NO LONGER EXIST; PROVIDED THAT, IF THE
CIRCUMSTANCES SET FORTH IN CLAUSE (II) ABOVE ARE APPLICABLE, THE APPLICABLE
BORROWER MAY ELECT, BY NOTICE TO THE ADMINISTRATIVE AGENT AND THE LENDERS, TO
CONTINUE SUCH ADVANCES IN SUCH COMMITTED CURRENCY FOR INTEREST PERIODS OF NOT
LONGER THAN ONE MONTH, WHICH ADVANCES SHALL THEREAFTER BEAR INTEREST AT A RATE
PER ANNUM EQUAL TO THE APPLICABLE MARGIN PLUS, FOR EACH LENDER, THE COST TO SUCH
LENDER (EXPRESSED AS A RATE PER ANNUM) OF FUNDING ITS EUROCURRENCY RATE ADVANCES
BY WHATEVER MEANS IT REASONABLY DETERMINES TO BE APPROPRIATE.  EACH SUCH LENDER
SHALL CERTIFY ITS COST OF FUNDS FOR EACH INTEREST PERIOD TO THE ADMINISTRATIVE
AGENT AND THE APPLICABLE BORROWER AS SOON AS PRACTICABLE (BUT IN ANY EVENT NOT
LATER THAN TEN BUSINESS DAYS AFTER THE FIRST DAY OF SUCH INTEREST PERIOD).

 

(II)                                  ON THE DATE ON WHICH THE AGGREGATE UNPAID
PRINCIPAL AMOUNT OF EUROCURRENCY RATE ADVANCES COMPRISING ANY BORROWING SHALL BE
REDUCED, BY PAYMENT OR PREPAYMENT OR OTHERWISE, TO LESS THAN $1,000,000, SUCH
ADVANCES SHALL AUTOMATICALLY (A) IF SUCH EUROCURRENCY RATE ADVANCES ARE
DENOMINATED IN DOLLARS, CONVERT INTO BASE RATE ADVANCES AND (B) IF SUCH
EUROCURRENCY RATE ADVANCES ARE DENOMINATED IN A COMMITTED CURRENCY, BE
REDENOMINATED INTO AN EQUIVALENT AMOUNT OF DOLLARS AND CONVERT INTO A BASE RATE
ADVANCE.

 

(III)                               IF ANY BORROWER SHALL FAIL TO SELECT THE
DURATION OF ANY INTEREST PERIOD FOR ANY EUROCURRENCY RATE ADVANCES IN ACCORDANCE
WITH THE PROVISIONS CONTAINED IN THE DEFINITION OF “INTEREST PERIOD” IN
SECTION 1.01, THE ADMINISTRATIVE AGENT WILL FORTHWITH SO NOTIFY SUCH BORROWER
AND THE LENDERS, WHEREUPON EACH SUCH EUROCURRENCY RATE ADVANCE WILL
AUTOMATICALLY, ON THE LAST DAY OF THE THEN EXISTING INTEREST PERIOD THEREFOR,
(A) IF SUCH EUROCURRENCY RATE ADVANCES ARE DENOMINATED IN DOLLARS, CONVERT INTO
BASE RATE ADVANCES AND (B) IF SUCH EUROCURRENCY RATE ADVANCES ARE DENOMINATED IN
A COMMITTED CURRENCY, BE REDENOMINATED INTO AN EQUIVALENT AMOUNT OF DOLLARS AND
CONVERT INTO A BASE RATE ADVANCE.

 

(IV)                              UPON THE OCCURRENCE AND DURING THE CONTINUANCE
OF ANY EVENT OF DEFAULT AND UPON NOTICE FROM THE ADMINISTRATIVE AGENT TO THE
COMPANY, (A) IF ANY EUROCURRENCY RATE ADVANCES ARE DENOMINATED IN DOLLARS, SUCH
EUROCURRENCY RATE ADVANCES SHALL BE CONVERTED INTO BASE RATE ADVANCES AND (B) IF
ANY EUROCURRENCY RATE ADVANCES ARE DENOMINATED IN ANY COMMITTED CURRENCY, SUCH
EUROCURRENCY RATE ADVANCES SHALL BE REDENOMINATED INTO AN EQUIVALENT AMOUNT OF
DOLLARS AND BE CONVERTED INTO BASE RATE ADVANCES AND (II) THE OBLIGATION OF THE
LENDERS TO MAKE, OR TO CONVERT ADVANCES INTO, EUROCURRENCY RATE ADVANCES SHALL
BE SUSPENDED; PROVIDED THAT THE APPLICABLE BORROWER MAY ELECT WITH RESPECT TO
EUROCURRENCY RATE ADVANCES WHICH ARE DENOMINATED IN ANY COMMITTED CURRENCY, BY
NOTICE TO THE ADMINISTRATIVE AGENT AND THE LENDERS WITHIN ONE BUSINESS DAY OF
SUCH NOTICE, TO CONTINUE SUCH ADVANCES IN SUCH COMMITTED CURRENCY, WHEREUPON THE
ADMINISTRATIVE AGENT MAY REQUIRE THAT SUCH EUROCURRENCY RATE ADVANCES SHALL BEAR
INTEREST AT THE OVERNIGHT EUROCURRENCY RATE FOR A PERIOD OF THREE BUSINESS DAYS
AND THEREAFTER, SUCH EUROCURRENCY RATE ADVANCES SHALL HAVE INTEREST PERIODS OF A
DURATION OF NOT LONGER THAN ONE MONTH.  “OVERNIGHT EUROCURRENCY RATE” MEANS THE
RATE PER ANNUM APPLICABLE TO AN OVERNIGHT PERIOD BEGINNING ON ONE BUSINESS DAY
AND ENDING ON

 

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THE NEXT BUSINESS DAY EQUAL TO THE SUM OF 1%, THE APPLICABLE MARGIN AND THE
AVERAGE, ROUNDED UPWARD TO THE NEAREST WHOLE MULTIPLE OF 1/16 OF 1%, IF SUCH
AVERAGE IS NOT SUCH A MULTIPLE, OF THE RESPECTIVE RATES PER ANNUM QUOTED BY THE
ADMINISTRATIVE AGENT ON REQUEST AS THE RATE AT WHICH IT IS OFFERING OVERNIGHT
DEPOSITS IN THE RELEVANT CURRENCY IN AMOUNTS SUBSTANTIALLY EQUAL TO BNP PARIBAS’
EUROCURRENCY RATE ADVANCES.

 

SECTION 2.11  Increased Costs, Etc.  (a)  If, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation following
the date hereof or (ii) the compliance with any guideline or request from any
central bank or other governmental authority including, without limitation, any
agency of the European Union or similar monetary or multinational authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender Party of agreeing to make or of making, funding or
maintaining Eurocurrency Rate Advances or LIBO Rate Advances or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Advances
(excluding, for purposes of this Section 2.11, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.13 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Applicable Lending
Office or any political subdivision thereof), then the Company shall from time
to time, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost; provided, however, that a Lender Party claiming additional
amounts under this Section 2.11(a) agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party.  A certificate as to
the amount of such increased cost, submitted to the Company by such Lender
Party, shall be conclusive and binding for all purposes, absent manifest error.

 

(B)                                 IF ANY LENDER PARTY DETERMINES THAT
COMPLIANCE WITH ANY LAW OR REGULATION OR ANY GUIDELINE OR REQUEST FROM ANY
CENTRAL BANK OR OTHER GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF
LAW) EFFECTIVE AFTER THE DATE HEREOF AFFECTS OR WOULD AFFECT THE AMOUNT OF
CAPITAL REQUIRED OR EXPECTED TO BE MAINTAINED BY SUCH LENDER PARTY OR ANY
CORPORATION CONTROLLING SUCH LENDER PARTY AND THAT THE AMOUNT OF SUCH CAPITAL IS
INCREASED BY OR BASED UPON THE EXISTENCE OF SUCH LENDER PARTY’S COMMITMENT TO
LEND OR TO ISSUE OR PARTICIPATE IN LETTERS OF CREDIT HEREUNDER AND OTHER
COMMITMENTS OF SUCH TYPE OR THE ISSUANCE OR MAINTENANCE OF OR PARTICIPATION IN
THE LETTERS OF CREDIT (OR SIMILAR CONTINGENT OBLIGATIONS), THEN, UPON DEMAND BY
SUCH LENDER PARTY (WITH A COPY OF SUCH DEMAND TO THE ADMINISTRATIVE AGENT), THE
COMPANY SHALL PAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF SUCH LENDER
PARTY, FROM TIME TO TIME AS SPECIFIED BY SUCH LENDER PARTY, ADDITIONAL AMOUNTS
SUFFICIENT TO COMPENSATE SUCH LENDER PARTY IN THE LIGHT OF SUCH CIRCUMSTANCES,
TO THE EXTENT THAT SUCH LENDER PARTY REASONABLY DETERMINES SUCH INCREASE IN
CAPITAL TO BE ALLOCABLE TO THE EXISTENCE OF SUCH LENDER PARTY’S COMMITMENT TO
LEND OR TO ISSUE OR TO PARTICIPATE IN LETTERS OF CREDIT HEREUNDER OR TO THE
ISSUANCE OR MAINTENANCE OF OR PARTICIPATION IN ANY LETTERS OF CREDIT.  A
CERTIFICATE AS TO SUCH AMOUNTS SUBMITTED TO THE COMPANY BY SUCH LENDER PARTY
SHALL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES, ABSENT MANIFEST ERROR.

 

(C)                                  IF, WITH RESPECT TO ANY EUROCURRENCY RATE
ADVANCES ANY LENDER NOTIFIES THE ADMINISTRATIVE AGENT THAT THE EUROCURRENCY RATE
FOR ANY INTEREST PERIOD FOR SUCH REVOLVING CREDIT ADVANCES WILL NOT ADEQUATELY
REFLECT THE COST TO SUCH LENDER OF MAKING, FUNDING OR MAINTAINING SUCH LENDER’S
EUROCURRENCY RATE ADVANCES FOR SUCH INTEREST PERIOD, THE ADMINISTRATIVE AGENT
SHALL FORTHWITH SO NOTIFY THE COMPANY AND THE LENDERS, WHEREUPON (I) EACH SUCH
EUROCURRENCY RATE ADVANCE WILL AUTOMATICALLY, ON THE LAST DAY OF THE THEN
EXISTING INTEREST PERIOD THEREFOR, CONVERT INTO A BASE RATE

 

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Advance and (ii) the obligation of the Lenders to make, or to Convert Revolving
Credit Advances into, Eurocurrency Rate Advances shall be suspended until the
Administrative Agent shall notify the Company that such Lender has determined
that the circumstances causing such suspension no longer exist.

 

(D)                                 NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, IF THE INTRODUCTION OF OR ANY CHANGE IN OR IN THE INTERPRETATION OF
ANY LAW OR REGULATION SHALL MAKE IT UNLAWFUL, OR ANY CENTRAL BANK OR OTHER
GOVERNMENTAL AUTHORITY SHALL ASSERT THAT IT IS UNLAWFUL, FOR ANY LENDER OR ITS
EUROCURRENCY LENDING OFFICE TO PERFORM ITS OBLIGATIONS HEREUNDER TO MAKE
EUROCURRENCY RATE ADVANCES OR LIBO RATE ADVANCES OR TO CONTINUE TO FUND OR
MAINTAIN EUROCURRENCY RATE ADVANCES IN DOLLARS OR ANY COMMITTED CURRENCY OR LIBO
RATE ADVANCES IN ANY FOREIGN CURRENCY OR TO FUND OR MAINTAIN EUROCURRENCY RATE
ADVANCES IN DOLLARS OR ANY COMMITTED CURRENCY OR LIBO RATE ADVANCES IN ANY
FOREIGN CURRENCY HEREUNDER, THEN, ON NOTICE THEREOF AND DEMAND THEREFOR BY SUCH
LENDER TO THE COMPANY THROUGH THE ADMINISTRATIVE AGENT (I) EACH EUROCURRENCY
RATE ADVANCE OR LIBO RATE ADVANCE, AS THE CASE MAY BE, WILL AUTOMATICALLY, UPON
SUCH DEMAND, (A) IF SUCH EUROCURRENCY RATE ADVANCE IS DENOMINATED IN DOLLARS, BE
CONVERTED INTO A BASE RATE ADVANCE, AND (B) IF SUCH EUROCURRENCY RATE ADVANCE OR
LIBO RATE ADVANCE IS DENOMINATED IN ANY COMMITTED CURRENCY OR FOREIGN CURRENCY,
BE REDENOMINATED INTO AN EQUIVALENT AMOUNT OF DOLLARS AND BE CONVERTED INTO A
BASE RATE ADVANCE AND (II) THE OBLIGATION OF THE LENDERS TO MAKE EUROCURRENCY
RATE ADVANCES OR LIBO RATE ADVANCES, OR TO CONVERT REVOLVING CREDIT ADVANCES
INTO, EUROCURRENCY RATE ADVANCES SHALL BE SUSPENDED UNTIL THE ADMINISTRATIVE
AGENT SHALL NOTIFY THE COMPANY THAT SUCH LENDER HAS DETERMINED THAT THE
CIRCUMSTANCES CAUSING SUCH SUSPENSION NO LONGER EXIST; PROVIDED, HOWEVER, THAT,
BEFORE MAKING ANY SUCH DEMAND, SUCH LENDER AGREES TO USE REASONABLE EFFORTS
(CONSISTENT WITH ITS INTERNAL POLICY AND LEGAL AND REGULATORY RESTRICTIONS) TO
DESIGNATE A DIFFERENT EUROCURRENCY LENDING OFFICE IF THE MAKING OF SUCH A
DESIGNATION WOULD ALLOW SUCH LENDER OR ITS EUROCURRENCY LENDING OFFICE TO
CONTINUE TO PERFORM ITS OBLIGATIONS TO MAKE EUROCURRENCY RATE ADVANCES OR TO
CONTINUE TO FUND OR MAINTAIN EUROCURRENCY RATE ADVANCES AND WOULD NOT, IN THE
JUDGMENT OF SUCH LENDER, BE OTHERWISE DISADVANTAGEOUS TO SUCH LENDER.

 

SECTION 2.12  Payments and Computations.  (a)  Each Borrower shall make each
payment hereunder irrespective of any right of counterclaim or set-off not later
than 10:00 A.M. (Los Angeles, California time) on the day when due in Dollars to
the Administrative Agent at the applicable Administrative Agent’s Account in
same day funds, except payments with respect to principal of, interest on, and
other amounts relating to, Advances denominated in a Committed Currency or a
Foreign Currency.  Each Borrower shall make each payment hereunder with respect
to principal of, interest on, and other amounts relating to, Advances
denominated in a Committed Currency or a Foreign Currency, not later than
11:00 A.M. (at the Payment Office for such Committed Currency or Foreign
Currency, as the case may be) on the day when due in such Committed Currency or
Foreign Currency, as the case may be, to the Administrative Agent, by deposit of
such funds to the applicable Administrative Agent’s Account in same day funds,
with payments being received by the Administrative Agent after such time being
deemed to have been received on the next succeeding Business Day.  The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by such Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder to more than one
Lender Party, to such Lender Parties for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts of such
respective Obligations then payable to such Lender Parties and (ii) if such
payment by such Borrower is in respect of any Obligation then payable hereunder
to one Lender Party, to such Lender Party for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement.  Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.07(d),
from and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder in respect of the
interest assigned thereby to the Lender Party assignee thereunder, and the
parties to such Assignment and Acceptance shall make all

 

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appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.

 

(B)                                 IF THE ADMINISTRATIVE AGENT RECEIVES FUNDS
FOR APPLICATION TO THE OBLIGATIONS UNDER THE LOAN DOCUMENTS UNDER CIRCUMSTANCES
FOR WHICH THE LOAN DOCUMENTS DO NOT SPECIFY THE ADVANCES TO WHICH, OR THE MANNER
IN WHICH, SUCH FUNDS ARE TO BE APPLIED, THE ADMINISTRATIVE AGENT MAY, BUT SHALL
NOT BE OBLIGATED TO, ELECT TO DISTRIBUTE SUCH FUNDS TO EACH LENDER PARTY RATABLY
IN ACCORDANCE WITH SUCH LENDER PARTY’S PROPORTIONATE SHARE OF THE PRINCIPAL
AMOUNT OF ALL OUTSTANDING ADVANCES AND THE AVAILABLE AMOUNT OF ALL LETTERS OF
CREDIT THEN OUTSTANDING, IN REPAYMENT OR PREPAYMENT OF SUCH OF THE OUTSTANDING
ADVANCES OR OTHER OBLIGATIONS OWED TO SUCH LENDER PARTY, AND FOR APPLICATION TO
SUCH PRINCIPAL INSTALLMENTS, AS THE ADMINISTRATIVE AGENT SHALL DIRECT.

 

(C)                                  EACH BORROWER HEREBY AUTHORIZES EACH LENDER
PARTY AND EACH OF ITS AFFILIATES, IF AND TO THE EXTENT PAYMENT OWED TO SUCH
LENDER PARTY IS NOT MADE WHEN DUE HEREUNDER TO CHARGE FROM TIME TO TIME, TO THE
FULLEST EXTENT PERMITTED BY LAW, AGAINST ANY OR ALL OF SUCH BORROWER’S ACCOUNTS
WITH SUCH LENDER PARTY OR SUCH AFFILIATE ANY AMOUNT SO DUE.

 

(D)                                 ALL COMPUTATIONS OF INTEREST ON REVOLVING
CREDIT ADVANCES COMPRISING EUROCURRENCY RATE ADVANCES, FEES AND LETTER OF CREDIT
COMMISSIONS SHALL BE MADE BY THE ADMINISTRATIVE AGENT ON THE BASIS OF A YEAR OF
360 DAYS IN EACH CASE FOR THE ACTUAL NUMBER OF DAYS (INCLUDING THE FIRST DAY BUT
EXCLUDING THE LAST DAY) OCCURRING IN THE PERIOD FOR WHICH SUCH INTEREST, FEES OR
COMMISSIONS ARE PAYABLE.  COMPUTATIONS OF INTEREST ON REVOLVING CREDIT ADVANCES
COMPRISING BASE RATE ADVANCES AND LETTER OF CREDIT ADVANCES SHALL BE MADE BY THE
ADMINISTRATIVE AGENT ON THE BASIS OF A YEAR OF 365 DAYS IN EACH CASE FOR THE
ACTUAL NUMBER OF DAYS (INCLUDING THE FIRST DAY BUT EXCLUDING THE LAST DAY)
OCCURRING IN THE PERIOD FOR WHICH SUCH INTEREST IS PAYABLE.  COMPUTATIONS IN
RESPECT OF COMPETITIVE BID ADVANCES SHALL BE MADE BY THE ADMINISTRATIVE AGENT AS
SPECIFIED IN THE APPLICABLE NOTICE OF COMPETITIVE BID BORROWING (OR, IN EACH
CASE OF ADVANCES DENOMINATED IN FOREIGN CURRENCIES WHERE MARKET PRACTICE
DIFFERS, IN ACCORDANCE WITH MARKET PRACTICE).  EACH DETERMINATION BY THE
ADMINISTRATIVE AGENT OF AN INTEREST RATE, FEE OR COMMISSION HEREUNDER SHALL BE
CONCLUSIVE AND BINDING FOR ALL PURPOSES, ABSENT MANIFEST ERROR.

 

(E)                                  WHENEVER ANY PAYMENT HEREUNDER SHALL BE
STATED TO BE DUE ON A DAY OTHER THAN A BUSINESS DAY, SUCH PAYMENT SHALL BE MADE
ON THE NEXT SUCCEEDING BUSINESS DAY, AND SUCH EXTENSION OF TIME SHALL IN SUCH
CASE BE INCLUDED IN THE COMPUTATION OF PAYMENT OF INTEREST OR COMMITMENT OR
LETTER OF CREDIT FEE OR COMMISSION, AS THE CASE MAY BE; PROVIDED, HOWEVER, THAT,
IF SUCH EXTENSION WOULD CAUSE ANY PAYMENT TO BE MADE IN THE NEXT FOLLOWING
CALENDAR MONTH, SUCH PAYMENT SHALL BE MADE ON THE NEXT PRECEDING BUSINESS DAY
AND SUCH ADJUSTMENT OF TIME SHALL IN SUCH CASE BE REFLECTED IN THE COMPUTATION
OF PAYMENT OF INTEREST OR COMMITMENT FEE, AS THE CASE MAY BE.

 

(F)                                    UNLESS THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED NOTICE FROM ANY BORROWER PRIOR TO THE DATE ON WHICH ANY PAYMENT IS
DUE TO ANY LENDER PARTY HEREUNDER THAT SUCH BORROWER WILL NOT MAKE SUCH PAYMENT
IN FULL, THE ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH BORROWER HAS MADE SUCH
PAYMENT IN FULL TO THE ADMINISTRATIVE AGENT ON SUCH DATE AND THE ADMINISTRATIVE
AGENT MAY, IN RELIANCE UPON SUCH ASSUMPTION, CAUSE TO BE DISTRIBUTED TO EACH
SUCH LENDER PARTY ON SUCH DUE DATE AN AMOUNT EQUAL TO THE AMOUNT THEN DUE SUCH
LENDER PARTY.  IF AND TO THE EXTENT ANY BORROWER SHALL NOT HAVE SO MADE SUCH
PAYMENT IN FULL TO THE ADMINISTRATIVE AGENT, EACH SUCH LENDER PARTY SHALL REPAY
TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND SUCH AMOUNT DISTRIBUTED TO SUCH
LENDER PARTY TOGETHER WITH INTEREST THEREON, FOR EACH DAY FROM THE DATE SUCH
AMOUNT IS DISTRIBUTED TO SUCH LENDER PARTY UNTIL THE DATE SUCH LENDER PARTY
REPAYS SUCH AMOUNT TO THE ADMINISTRATIVE AGENT, AT (I) THE FEDERAL FUNDS RATE IN
THE CASE OF ADVANCES DENOMINATED IN DOLLARS OR (II) THE COST OF FUNDS INCURRED
BY THE ADMINISTRATIVE AGENT IN RESPECT OF SUCH AMOUNT IN THE CASE OF ADVANCES
DENOMINATED IN COMMITTED CURRENCIES OR FOREIGN CURRENCIES.

 

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SECTION 2.13  Taxes.  (a)  Any and all payments by the Borrowers hereunder or
under the Notes shall be made, in accordance with Section 2.12, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender Party and the Administrative
Agent, taxes that are imposed on its overall net income by the United States and
taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state or foreign jurisdiction under the laws of which such
Lender Party or the Administrative Agent (as the case may be) is organized or
any political subdivision thereof and, in the case of each Lender Party, taxes
that are imposed on its overall net income (and franchise taxes in lieu thereof)
by the state or foreign jurisdiction of such Lender Party’s Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as
“Taxes”).  If any Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender Party or the
Administrative Agent, (i) the sum payable by such Borrower shall be increased as
may be necessary so that after such Borrower and the Administrative Agent have
made all required deductions (including deductions applicable to additional sums
payable under this Section 2.13) such Lender Party or the Administrative Agent,
as the case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make all such
deductions and (iii) such Borrower shall pay the full amount deducted to the
relevant taxation authority or other governmental authority in accordance with
applicable law.

 

(B)                                 IN ADDITION, THE BORROWERS SHALL PAY ANY
PRESENT OR FUTURE STAMP, DOCUMENTARY, EXCISE, PROPERTY OR SIMILAR TAXES, CHARGES
OR LEVIES THAT ARISE FROM ANY PAYMENT MADE HEREUNDER OR UNDER THE NOTES OR FROM
THE EXECUTION, DELIVERY OR REGISTRATION OF, PERFORMANCE UNDER, OR OTHERWISE WITH
RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS (HEREINAFTER
REFERRED TO AS “OTHER TAXES”).

 

(C)                                  THE BORROWERS SHALL INDEMNIFY EACH LENDER
PARTY AND THE ADMINISTRATIVE AGENT FOR AND HOLD IT HARMLESS AGAINST THE FULL
AMOUNT OF TAXES AND OTHER TAXES, AND FOR THE FULL AMOUNT OF TAXES OF ANY KIND
IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 2.13, IMPOSED
ON OR PAID BY SUCH LENDER PARTY OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE)
AND ANY LIABILITY (INCLUDING PENALTIES, ADDITIONS TO TAX, INTEREST AND EXPENSES)
ARISING THEREFROM OR WITH RESPECT THERETO.  THIS INDEMNIFICATION SHALL BE MADE
WITHIN 30 DAYS FROM THE DATE SUCH LENDER PARTY OR THE ADMINISTRATIVE AGENT (AS
THE CASE MAY BE) MAKES WRITTEN DEMAND THEREFOR.

 

(D)                                 WITHIN 30 DAYS AFTER THE DATE OF ANY PAYMENT
OF TAXES, THE APPLICABLE BORROWER SHALL FURNISH TO THE ADMINISTRATIVE AGENT, AT
ITS ADDRESS REFERRED TO IN SECTION 9.02, THE ORIGINAL OR A CERTIFIED COPY OF A
RECEIPT EVIDENCING SUCH PAYMENT.  IN THE CASE OF ANY PAYMENT HEREUNDER OR UNDER
THE NOTES BY OR ON BEHALF OF ANY BORROWER THROUGH AN ACCOUNT OR BRANCH OUTSIDE
THE UNITED STATES OR ON BEHALF OF SUCH BORROWER BY A PAYOR THAT IS NOT A UNITED
STATES PERSON, IF SUCH BORROWER DETERMINES THAT NO TAXES ARE PAYABLE IN RESPECT
THEREOF, SUCH BORROWER SHALL FURNISH, OR SHALL CAUSE SUCH PAYOR TO FURNISH, TO
THE ADMINISTRATIVE AGENT, AT SUCH ADDRESS, AN OPINION OF COUNSEL ACCEPTABLE TO
THE ADMINISTRATIVE AGENT STATING THAT SUCH PAYMENT IS EXEMPT FROM TAXES.  FOR
PURPOSES OF SUBSECTIONS (D) AND (E) OF THIS SECTION 2.13, THE TERMS “UNITED
STATES” AND “UNITED STATES PERSON” SHALL HAVE THE MEANINGS SPECIFIED IN
SECTION 7701 OF THE INTERNAL REVENUE CODE.

 

(E)                                  EACH LENDER PARTY ORGANIZED UNDER THE LAWS
OF A JURISDICTION OUTSIDE THE UNITED STATES SHALL, ON OR PRIOR TO THE DATE OF
ITS EXECUTION AND DELIVERY OF THIS AGREEMENT IN THE CASE OF EACH INITIAL LENDER
OR INITIAL ISSUING BANK, AS THE CASE MAY BE, AND ON THE DATE OF THE ASSIGNMENT
AND ACCEPTANCE PURSUANT TO WHICH IT BECOMES A LENDER PARTY IN THE CASE OF EACH
OTHER LENDER PARTY, AND FROM TIME TO TIME THEREAFTER IF REQUESTED IN WRITING BY
THE COMPANY OR THE ADMINISTRATIVE AGENT (BUT ONLY SO LONG THEREAFTER AS SUCH
LENDER PARTY REMAINS LAWFULLY ABLE TO DO SO), PROVIDE THE ADMINISTRATIVE AGENT
AND THE COMPANY WITH TWO ORIGINAL INTERNAL REVENUE SERVICE FORMS W-8ECI OR
W-8BEN OR (IN THE CASE

 

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OF A LENDER PARTY THAT HAS CERTIFIED IN WRITING TO THE ADMINISTRATIVE AGENT THAT
IT IS NOT A “BANK” AS DEFINED IN SECTION 881(C)(3)(A) OF THE INTERNAL REVENUE
CODE) TWO ORIGINAL FORMS W-8BEN ACCOMPANIED BY A CERTIFICATE REPRESENTING THAT
SUCH LENDER PARTY IS NOT A “BANK” FOR PURPOSES OF SECTION 881(C) OF THE INTERNAL
REVENUE CODE, IS NOT A 10-PERCENT SHAREHOLDER (WITHIN THE MEANING OF
SECTION 871(H)(3)(B) OF THE INTERNAL REVENUE CODE) OF THE COMPANY AND IS NOT A
CONTROLLED FOREIGN CORPORATION RELATED TO THE COMPANY (WITHIN THE MEANING OF
SECTION 864(D)(4) OF THE INTERNAL REVENUE CODE)), AS APPROPRIATE, OR ANY
SUCCESSOR OR OTHER FORM PRESCRIBED BY THE INTERNAL REVENUE SERVICE, CERTIFYING
THAT SUCH LENDER PARTY IS EXEMPT FROM OR ENTITLED TO A REDUCED RATE OF UNITED
STATES WITHHOLDING TAX ON PAYMENTS PURSUANT TO THIS AGREEMENT OR THE NOTES.  IF
THE FORMS PROVIDED BY A LENDER PARTY AT THE TIME SUCH LENDER PARTY FIRST BECOMES
A PARTY TO THIS AGREEMENT INDICATE A UNITED STATES INTEREST WITHHOLDING TAX RATE
IN EXCESS OF ZERO, WITHHOLDING TAX AT SUCH RATE SHALL BE CONSIDERED EXCLUDED
FROM TAXES UNLESS AND UNTIL SUCH LENDER PARTY PROVIDES THE APPROPRIATE FORMS
CERTIFYING THAT A LESSER RATE APPLIES, WHEREUPON WITHHOLDING TAX AT SUCH LESSER
RATE ONLY SHALL BE CONSIDERED EXCLUDED FROM TAXES FOR PERIODS GOVERNED BY SUCH
FORMS; PROVIDED, HOWEVER, THAT IF, AT THE EFFECTIVE DATE OF THE ASSIGNMENT AND
ACCEPTANCE PURSUANT TO WHICH A LENDER PARTY BECOMES A PARTY TO THIS AGREEMENT,
THE LENDER PARTY ASSIGNOR WAS ENTITLED TO PAYMENTS UNDER SUBSECTION (A) OF THIS
SECTION 2.13 IN RESPECT OF UNITED STATES WITHHOLDING TAX WITH RESPECT TO
INTEREST PAID AT SUCH DATE, THEN, TO SUCH EXTENT, THE TERM TAXES SHALL INCLUDE
(IN ADDITION TO WITHHOLDING TAXES THAT MAY BE IMPOSED IN THE FUTURE OR OTHER
AMOUNTS OTHERWISE INCLUDABLE IN TAXES) UNITED STATES WITHHOLDING TAX, IF ANY,
APPLICABLE WITH RESPECT TO THE LENDER PARTY ASSIGNEE ON SUCH DATE.  IF ANY FORM
OR DOCUMENT REFERRED TO IN THIS SUBSECTION (E) REQUIRES THE DISCLOSURE OF
INFORMATION, OTHER THAN INFORMATION NECESSARY TO COMPUTE THE TAX PAYABLE AND
INFORMATION REQUIRED ON THE DATE HEREOF BY INTERNAL REVENUE SERVICE FORM W-8ECI
OR W-8BEN (OR THE RELATED CERTIFICATE DESCRIBED ABOVE), THAT THE APPLICABLE
LENDER PARTY REASONABLY CONSIDERS TO BE CONFIDENTIAL, SUCH LENDER PARTY SHALL
GIVE NOTICE THEREOF TO THE COMPANY AND SHALL NOT BE OBLIGATED TO INCLUDE IN SUCH
FORM OR DOCUMENT SUCH CONFIDENTIAL INFORMATION.

 

(F)                                    FOR ANY PERIOD WITH RESPECT TO WHICH A
LENDER PARTY HAS FAILED TO PROVIDE THE COMPANY WITH THE APPROPRIATE FORM
DESCRIBED IN SUBSECTION (E) ABOVE (OTHER THAN IF SUCH FAILURE IS DUE TO A CHANGE
IN LAW OCCURRING AFTER THE DATE ON WHICH A FORM ORIGINALLY WAS REQUIRED TO BE
PROVIDED OR IF SUCH FORM OTHERWISE IS NOT REQUIRED UNDER SUBSECTION (E) ABOVE),
SUCH LENDER PARTY SHALL NOT BE ENTITLED TO INDEMNIFICATION UNDER SUBSECTION (A)
OR (C) OF THIS SECTION 2.13 WITH RESPECT TO TAXES IMPOSED BY THE UNITED STATES
BY REASON OF SUCH FAILURE; PROVIDED, HOWEVER, THAT SHOULD A LENDER PARTY BECOME
SUBJECT TO TAXES BECAUSE OF ITS FAILURE TO DELIVER A FORM REQUIRED HEREUNDER,
THE COMPANY SHALL TAKE SUCH STEPS AS SUCH LENDER PARTY SHALL REASONABLY REQUEST
TO ASSIST SUCH LENDER PARTY TO RECOVER SUCH TAXES.

 

SECTION 2.14  Sharing of Payments, Etc.  If any Lender Party shall obtain at any
time any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise, other than as a result of an assignment pursuant
to Section 9.07) (a) on account of Obligations due and payable to such Lender
Party hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender Party at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time or (b) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations owing to such Lender Party at such time to (ii) the aggregate
amount of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the Notes at such time obtained by all of the Lender Parties at such time,
such Lender Party shall forthwith purchase from the other Lender Parties such
interests or participating interests in the Obligations due and payable or owing
to them, as the case may be, as shall be necessary to cause such purchasing
Lender Party to share the excess payment ratably with each of them; provided,

 

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however, that (A) if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender Party, such purchase from each other
Lender Party shall be rescinded and such other Lender Party shall repay to the
purchasing Lender Party the purchase price to the extent of such Lender Party’s
ratable share (according to the proportion of (i) the purchase price paid to
such Lender Party to (ii) the aggregate purchase price paid to all Lender
Parties) of such recovery together with an amount equal to such Lender Party’s
ratable share (according to the proportion of (i) the amount of such other
Lender Party’s required repayment to (ii) the total amount so recovered from the
purchasing Lender Party) of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so recovered and (B) any
amounts owed or owing to any Lender Party as a result of a Competitive Bid
Advance or under a Competitive Bid Note shall be disregarded from each
computation set forth in this Section 2.14.  Each Borrower agrees that any
Lender Party so purchasing an interest or participating interest from another
Lender Party pursuant to this Section 2.14 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off) with
respect to such interest or participating interest, as the case may be, as fully
as if such Lender Party were the direct creditor of such Borrower in the amount
of such interest or participating interest, as the case may be.

 

SECTION 2.15  Use of Proceeds.  The proceeds of the Advances and issuances of
Letters of Credit shall be available (and the Borrowers agree that they shall
use such proceeds and Letters of Credit) solely to repay outstanding advances
under the Existing Credit Agreement, pay transaction fees and expenses, provide
working capital for the Company and its Subsidiaries and for general corporate
purposes including, without limitation, capital expenditures and acquisitions in
each case to the extent not prohibited by the Loan Documents.

 

SECTION 2.16  Evidence of Debt.  (a)  Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
each Borrower to such Lender resulting from each Advance owing to such Lender
from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder.  Each Borrower agrees that upon
notice by any Lender Party to such Borrower (with a copy of such notice to the
Administrative Agent) to the effect that a Note is required or appropriate in
order for such Lender to evidence (whether for purposes of pledge, enforcement
or otherwise) the Revolving Credit Advances and Letter of Credit Advances owing
to, or to be made by, such Lender Party, such Borrower shall promptly execute
and deliver to such Lender a Revolving Credit Note payable to the order of such
Lender Party in a principal amount equal to the Commitment of such Lender Party.

 

(B)                                 THE REGISTER MAINTAINED BY THE
ADMINISTRATIVE AGENT PURSUANT TO SECTION 9.07(H) SHALL INCLUDE A CONTROL
ACCOUNT, AND A SUBSIDIARY ACCOUNT FOR EACH LENDER, IN WHICH ACCOUNTS (TAKEN
TOGETHER) SHALL BE RECORDED (I) THE DATE AND AMOUNT OF EACH BORROWING MADE
HEREUNDER, THE TYPE OF ADVANCES COMPRISING SUCH BORROWING AND, IF APPROPRIATE,
THE INTEREST PERIOD APPLICABLE THERETO, (II) THE TERMS OF EACH ASSIGNMENT AND
ACCEPTANCE DELIVERED TO AND ACCEPTED BY IT, (III) THE AMOUNT OF ANY PRINCIPAL OR
INTEREST DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM EACH BORROWER TO EACH
LENDER PARTY HEREUNDER, AND (IV) THE AMOUNT OF ANY SUM RECEIVED BY THE
ADMINISTRATIVE AGENT FROM EACH BORROWER HEREUNDER AND EACH LENDER PARTY’S SHARE
THEREOF.

 

(C)                                  ENTRIES MADE IN GOOD FAITH BY THE
ADMINISTRATIVE AGENT IN THE REGISTER PURSUANT TO SUBSECTION (B) ABOVE, AND BY
EACH LENDER PARTY IN ITS ACCOUNT OR ACCOUNTS PURSUANT TO SUBSECTION (A) ABOVE,
SHALL BE PRIMA FACIE EVIDENCE OF THE AMOUNT OF PRINCIPAL AND INTEREST DUE AND
PAYABLE OR TO BECOME DUE AND PAYABLE FROM EACH BORROWER TO, IN THE CASE OF THE
REGISTER, EACH LENDER PARTY AND, IN THE CASE OF SUCH ACCOUNT OR ACCOUNTS, SUCH
LENDER PARTY, UNDER THIS AGREEMENT, ABSENT MANIFEST ERROR; PROVIDED, HOWEVER,
THAT THE FAILURE OF THE ADMINISTRATIVE AGENT OR SUCH LENDER PARTY TO MAKE AN
ENTRY, OR ANY FINDING THAT AN ENTRY IS INCORRECT, IN THE REGISTER OR SUCH
ACCOUNT OR ACCOUNTS SHALL NOT LIMIT OR OTHERWISE AFFECT THE OBLIGATIONS OF ANY
BORROWER UNDER THIS AGREEMENT.

 

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(D)                                 REFERENCES HEREIN OR IN ANY OTHER LOAN
DOCUMENT TO REVOLVING CREDIT NOTES SHALL MEAN AND BE REFERENCES TO THE REVOLVING
CREDIT NOTES, IF ANY, TO THE EXTENT ISSUED HEREUNDER.

 

ARTICLE III

CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT

 

SECTION 3.01  Conditions Precedent to Effectiveness.  This Agreement shall be
come effective on and as of the first date (the “Effective Date”) on which the
following conditions precedent have been satisfied:

 

(A)                                  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED ON OR BEFORE THE DAY OF THE INITIAL EXTENSION OF CREDIT THE FOLLOWING,
EACH DATED SUCH DAY (UNLESS OTHERWISE SPECIFIED), IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT (UNLESS OTHERWISE SPECIFIED) AND
(EXCEPT FOR ANY NOTES) IN SUFFICIENT COPIES FOR EACH LENDER PARTY:

 

(I)                                     NOTES PAYABLE TO THE ORDER OF THE
LENDERS TO THE EXTENT REQUESTED BY ANY LENDER PURSUANT TO SECTION 2.16.

 

(II)                                  A SECURITY AGREEMENT IN SUBSTANTIALLY THE
FORM OF EXHIBIT E-1 HERETO (TOGETHER WITH EACH OTHER SECURITY AGREEMENT AND
SECURITY AGREEMENT SUPPLEMENT DELIVERED PURSUANT TO SECTION 5.01(J), IN EACH
CASE AS AMENDED, AMENDED AND RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM
TIME TO TIME IN ACCORDANCE WITH ITS TERMS, THE “SECURITY AGREEMENT”), DULY
EXECUTED BY THE COMPANY AND EACH U.S. SUBSIDIARY THAT IS A SIGNIFICANT
SUBSIDIARY, TOGETHER WITH:

 

(A)                              (1) CERTIFICATES REPRESENTING THE PLEDGED
SHARES IN RESPECT OF EACH U.S. GUARANTOR WHICH IS A SIGNIFICANT SUBSIDIARY, IF
ANY, (2) CERTIFICATES REPRESENTING 65% OF THE PLEDGED SHARES IN RESPECT OF EACH
NON-U.S. GUARANTOR WHICH IS A SIGNIFICANT SUBSIDIARY (OTHER THAN THOSE SET OUT
ON SCHEDULE 3.01(A)(II)(A)(2), IF ANY), AND (3) IN RESPECT OF THE PLEDGED SHARES
REFERRED TO IN BOTH (1) AND (2), UNDATED STOCK POWERS EXECUTED IN BLANK,
PROVIDED, THAT ANY SUCH CERTIFICATES WHICH HAVE BEEN DELIVERED TO THE AGENT
UNDER THE EXISTING CREDIT AGREEMENT SHALL BE DEEMED DELIVERED TO THE
ADMINISTRATIVE AGENT HEREUNDER,

 

(B)                                EVIDENCE THAT PROPER FINANCING STATEMENTS
HAVE BEEN DULY FILED UNDER THE UNIFORM COMMERCIAL CODE OF THE STATES OF ALL
JURISDICTIONS THAT THE ADMINISTRATIVE AGENT MAY DEEM NECESSARY OR DESIRABLE IN
ORDER TO PERFECT AND PROTECT THE LIENS CREATED UNDER THE COLLATERAL DOCUMENTS,
COVERING THE COLLATERAL DESCRIBED IN THE SECURITY AGREEMENT,

 

(C)                                EVIDENCE THAT TERMINATION STATEMENTS (FORM
UCC-3 OR A COMPARABLE FORM), HAVE BEEN DULY FILED ON THE EFFECTIVE DATE UNDER
THE UNIFORM COMMERCIAL CODE OF ALL JURISDICTIONS THAT THE ADMINISTRATIVE AGENT
MAY DEEM DESIRABLE IN ORDER TO TERMINATE OR AMEND EXISTING LIENS ON THE
COLLATERAL DESCRIBED IN THE SECURITY AGREEMENT, AND

 

(D)                               EVIDENCE THAT ALL OTHER ACTION THAT THE
ADMINISTRATIVE AGENT MAY DEEM NECESSARY OR DESIRABLE IN ORDER TO PERFECT AND
PROTECT THE LIENS AND SECURITY INTERESTS CREATED UNDER THE SECURITY AGREEMENT
HAS BEEN TAKEN, INCLUDING THE REGISTRATION OF THE

 

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PLEDGED SHARES OF THE NON-U.S. SUBSIDIARIES WHICH ARE SIGNIFICANT SUBSIDIARIES
(OTHER THAN THOSE SET OUT ON SCHEDULE 3.01(A)(II)(A)(2), IF ANY).

 

(III)                               THE U.S. GUARANTY DULY EXECUTED BY ALL U.S
SUBSIDIARIES THAT ARE SIGNIFICANT SUBSIDIARIES.

 

(IV)                              CERTIFIED COPIES OF THE RESOLUTIONS OF THE
BOARD OF DIRECTORS OF THE COMPANY AND EACH U.S. SUBSIDIARY THAT IS A SIGNIFICANT
SUBSIDIARY APPROVING THE TRANSACTION AND EACH LOAN DOCUMENT TO WHICH IT IS OR IS
TO BE A PARTY, AND OF ALL DOCUMENTS EVIDENCING OTHER NECESSARY CORPORATE ACTION
AND GOVERNMENTAL APPROVALS, IF ANY, WITH RESPECT TO THE TRANSACTION AND EACH
LOAN DOCUMENT TO WHICH IT IS OR IS TO BE A PARTY AND OF THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

(V)                                 A COPY OF A CERTIFICATE OF THE SECRETARY OF
STATE OF THE JURISDICTION OF INCORPORATION OF THE COMPANY AND EACH U.S.
SUBSIDIARY THAT IS A SIGNIFICANT SUBSIDIARY, DATED REASONABLY NEAR THE EFFECTIVE
DATE, IN EACH CASE LISTING THE CHARTER OF COMPANY AND SUCH SIGNIFICANT
SUBSIDIARY AND EACH AMENDMENT THERETO ON FILE IN HIS OFFICE AND CERTIFYING THAT
(A) SUCH CHARTER IS A TRUE AND CORRECT COPY THEREOF, (B) SUCH AMENDMENTS ARE THE
ONLY AMENDMENTS TO SUCH CHARTER ON FILE IN HIS OFFICE, (C) SUCH PERSON HAS PAID
ALL FRANCHISE TAXES TO THE DATE OF SUCH CERTIFICATE AND (D) SUCH PERSON IS DULY
INCORPORATED AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF THE
JURISDICTION OF ITS INCORPORATION.

 

(VI)                              A COPY OF A CERTIFICATE OF THE SECRETARY OF
STATE OF THE STATES LISTED ON SCHEDULE 3.01(A)(VI), DATED REASONABLY NEAR THE
DATE OF THE EFFECTIVE DATE, WITH RESPECT TO THE COMPANY AND EACH SIGNIFICANT
SUBSIDIARY AS LISTED ON SCHEDULE 3.01(A)(VI), STATING THAT SUCH PERSON IS DULY
QUALIFIED AND IN GOOD STANDING AS A FOREIGN CORPORATION IN SUCH STATES AND HAS
FILED ALL ANNUAL REPORTS REQUIRED TO BE FILED TO THE DATE OF SUCH CERTIFICATE.

 

(VII)                           A CERTIFICATE OF THE COMPANY AND EACH LOAN PARTY
(OTHER THAN ANY LOAN PARTY THAT IS A NON-U.S. SUBSIDIARY), DATED THE EFFECTIVE
DATE (THE STATEMENTS MADE IN WHICH CERTIFICATE SHALL BE TRUE ON AND AS OF THE
EFFECTIVE DATE), CERTIFYING AS TO (A) THE ABSENCE OF ANY AMENDMENTS TO THE
CHARTER OF SUCH PERSON SINCE THE DATE OF THE SECRETARY OF STATE’S CERTIFICATE
REFERRED TO IN SECTION 3.01(A)(V), (B) A TRUE AND CORRECT COPY OF THE BYLAWS OF
SUCH PERSON AS IN EFFECT ON THE DATE ON WHICH THE RESOLUTIONS REFERRED TO IN
SECTION 3.01(A)(IV) WERE ADOPTED AND ON THE EFFECTIVE DATE, (C) THE DUE
INCORPORATION AND GOOD STANDING OR VALID EXISTENCE OF SUCH PERSON AS A
CORPORATION ORGANIZED UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION
AND THE ABSENCE OF ANY PROCEEDING FOR THE DISSOLUTION OR LIQUIDATION OF SUCH
PERSON, (D) THE COMPLETENESS AND ACCURACY OF THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THE LOAN DOCUMENTS AS THOUGH MADE ON AND AS OF THE EFFECTIVE DATE
AND (E) THE ABSENCE OF ANY EVENT OCCURRING AND CONTINUING, OR RESULTING FROM THE
INITIAL EXTENSION OF CREDIT, THAT CONSTITUTES A DEFAULT.

 

(VIII)                        A CERTIFICATE OF THE SECRETARY OF EACH LOAN PARTY
(OTHER THAN ANY LOAN PARTY THAT IS A NON-U.S. SUBSIDIARY) CERTIFYING THE NAMES
AND TRUE SIGNATURES OF THE OFFICERS OF SUCH PERSONS AUTHORIZED TO SIGN EACH LOAN
DOCUMENT TO WHICH IT IS OR IS TO BE A PARTY AND THE OTHER DOCUMENTS TO BE
DELIVERED HEREUNDER AND THEREUNDER.

 

(IX)                                SUCH FINANCIAL, BUSINESS AND OTHER
INFORMATION REGARDING EACH LOAN PARTY AND ITS SUBSIDIARIES AS THE LENDER PARTIES
SHALL HAVE REASONABLY REQUESTED, INCLUDING, WITHOUT LIMITATION, INFORMATION AS
TO POSSIBLE CONTINGENT LIABILITIES, TAX MATTERS, ENVIRONMENTAL MATTERS,
OBLIGATIONS UNDER PLANS, MULTIEMPLOYER PLANS AND WELFARE PLANS AND COLLECTIVE
BARGAINING AGREEMENTS AND OTHER ARRANGEMENTS WITH EMPLOYEES.

 

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(X)                                 FAVORABLE OPINIONS OF SHEPPARD, MULLIN,
RICHTER & HAMPTON LLP, COUNSEL FOR THE LOAN PARTIES, AND LAWRENCE A. MICHLOVICH,
ASSISTANT SECRETARY AND ASSISTANT GENERAL COUNSEL OF THE LOAN PARTIES, IN
SUBSTANTIALLY THE FORM OF EXHIBITS F-1 AND F-2.

 

(B)                                 THERE SHALL HAVE OCCURRED NO MATERIAL
ADVERSE CHANGE SINCE JUNE 30, 2003.

 

(C)                                  EXCEPT AS SET FORTH IN SCHEDULE 4.01(H),
THERE SHALL EXIST NO ACTION, SUIT, INVESTIGATION, LITIGATION OR PROCEEDING
AFFECTING THE COMPANY OR ANY LOAN PARTY OR ANY OF THEIR SUBSIDIARIES PENDING OR
THREATENED BEFORE ANY COURT, GOVERNMENTAL AGENCY OR ARBITRATOR THAT (I) COULD
HAVE A MATERIAL ADVERSE EFFECT OR (II) PURPORTS TO AFFECT THE LEGALITY, VALIDITY
OR ENFORCEABILITY OF THE TRANSACTION OR ANY LOAN DOCUMENT OR THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.

 

(D)                                 ALL GOVERNMENTAL AND THIRD PARTY CONSENTS
AND APPROVALS NECESSARY IN CONNECTION WITH THE TRANSACTION AND THE OTHER
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS SHALL HAVE BEEN OBTAINED
(WITHOUT THE IMPOSITION OF ANY CONDITIONS THAT ARE NOT ACCEPTABLE TO THE LENDER
PARTIES) AND SHALL REMAIN IN EFFECT; ALL APPLICABLE WAITING PERIODS IN
CONNECTION WITH THE TRANSACTION AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE
LOAN DOCUMENTS SHALL HAVE EXPIRED WITHOUT ANY ACTION HAVING BEEN TAKEN BY ANY
COMPETENT AUTHORITY, AND NO LAW OR REGULATION SHALL BE APPLICABLE IN THE
JUDGMENT OF THE LENDER PARTIES, IN EACH CASE THAT RESTRAINS, PREVENTS OR IMPOSES
MATERIALLY ADVERSE CONDITIONS UPON THE TRANSACTION AND THE OTHER TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS OR THE RIGHTS OF THE LOAN PARTIES FREELY TO
TRANSFER OR OTHERWISE DISPOSE OF, OR TO CREATE ANY LIEN ON, ANY PROPERTIES NOW
OWNED OR HEREAFTER ACQUIRED BY ANY OF THEM.

 

(E)                                  EVIDENCE THAT ALL AMOUNTS DUE UNDER THE
EXISTING CREDIT AGREEMENT HAVE BEEN PAID IN FULL OR WILL BE PAID WITH THE
PROCEEDS FROM THE BORROWING MADE ON THE EFFECTIVE DATE, ALL COMMITMENTS
THEREUNDER HAVE BEEN TERMINATED AND ALL SECURITY INTERESTS AND GUARANTEES
GRANTED IN CONNECTION THEREWITH HAVE BEEN RELEASED.

 

(F)                                    ALL ACCRUED FEES AND EXPENSES OF THE
ADMINISTRATIVE AGENT AND THE LENDER PARTIES (INCLUDING THE ACCRUED FEES AND
EXPENSES OF COUNSEL TO THE ADMINISTRATIVE AGENT AND OF LOCAL COUNSEL TO THE
LENDER PARTIES) SHALL HAVE BEEN PAID.

 

SECTION 3.02  Initial Loan to Each Designated Subsidiary.  The obligation of
each Lender to make an initial Advance to each Designated Subsidiary following
any designation of such Designated Subsidiary as a Borrower hereunder pursuant
to Section 9.11 is subject to the Administrative Agent’s receipt on or before
the date of such initial Advance of each of the following, in form and substance
satisfactory to the Administrative Agent and dated such date, and (except for
the Revolving Credit Notes) in sufficient copies for each Lender:

 

(A)                                  THE REVOLVING CREDIT NOTES OF SUCH BORROWER
TO THE ORDER OF THE LENDERS, TO THE EXTENT REQUESTED BY ANY LENDER PURSUANT TO
SECTION 2.16.

 

(B)                                 CERTIFIED COPIES OF THE RESOLUTIONS OF THE
BOARD OF DIRECTORS OF SUCH BORROWER (WITH A CERTIFIED ENGLISH TRANSLATION IF THE
ORIGINAL THEREOF IS NOT IN ENGLISH) APPROVING THIS AGREEMENT AND THE NOTES OF
SUCH BORROWER, AND OF ALL DOCUMENTS EVIDENCING OTHER NECESSARY CORPORATE ACTION
AND GOVERNMENTAL APPROVALS, IF ANY, WITH RESPECT TO THIS AGREEMENT AND SUCH
NOTES.

 

(C)                                  A CERTIFICATE OF THE SECRETARY OR AN
ASSISTANT SECRETARY OF SUCH BORROWER CERTIFYING THE NAMES AND TRUE SIGNATURES OF
THE OFFICERS OF SUCH BORROWER AUTHORIZED TO SIGN THIS AGREEMENT AND THE NOTES OF
SUCH BORROWER AND THE OTHER DOCUMENTS TO BE DELIVERED HEREUNDER.

 

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(D)                                 A CERTIFICATE SIGNED BY A RESPONSIBLE
OFFICER, DATED AS OF THE DATE OF SUCH INITIAL ADVANCE, CERTIFYING THAT SUCH
BORROWER SHALL HAVE OBTAINED ALL GOVERNMENTAL AND THIRD PARTY AUTHORIZATIONS,
CONSENTS, APPROVALS (INCLUDING EXCHANGE CONTROL APPROVALS) AND LICENSES REQUIRED
UNDER APPLICABLE LAWS AND REGULATIONS NECESSARY FOR SUCH BORROWER TO EXECUTE AND
DELIVER THIS AGREEMENT AND THE NOTES AND TO PERFORM ITS OBLIGATIONS THEREUNDER.

 

(E)                                  THE DESIGNATION LETTER OF SUCH DESIGNATED
SUBSIDIARY, SUBSTANTIALLY IN THE FORM OF EXHIBIT D HERETO.

 

(F)                                    A FAVORABLE OPINION OF COUNSEL (WHICH MAY
BE IN-HOUSE COUNSEL) TO SUCH DESIGNATED SUBSIDIARY, DATED THE DATE OF SUCH
INITIAL ADVANCE, IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(G)                                 SUCH OTHER APPROVALS, OPINIONS OR DOCUMENTS
AS ANY LENDER, THROUGH THE ADMINISTRATIVE AGENT, MAY REASONABLY REQUEST.

 

SECTION 3.03  Conditions Precedent to Each Revolving Credit Borrowing and
Issuance.  The obligation of each Lender to make a Revolving Credit Advance on
the occasion of each Revolving Credit Borrowing, and the obligation of the
Issuing Bank to issue a Letter of Credit, shall be subject to the further
conditions precedent that on the date of such Revolving Credit Borrowing or
issuance:

 

(A)                                  THE FOLLOWING STATEMENTS SHALL BE TRUE (AND
EACH OF THE GIVING OF THE APPLICABLE NOTICE OF REVOLVING CREDIT BORROWING,
NOTICE OF ISSUANCE AND THE ACCEPTANCE BY ANY BORROWER OF THE PROCEEDS OF SUCH
REVOLVING CREDIT BORROWING OR OF SUCH LETTER OF CREDIT SHALL CONSTITUTE A
REPRESENTATION AND WARRANTY BY SUCH BORROWER THAT BOTH ON THE DATE OF SUCH
NOTICE AND ON THE DATE OF SUCH REVOLVING CREDIT BORROWING OR ISSUANCE SUCH
STATEMENTS ARE TRUE):

 

(I)                                     THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN EACH LOAN DOCUMENT ARE CORRECT IN ALL MATERIAL RESPECTS ON AND AS
OF SUCH DATE, BEFORE AND AFTER GIVING EFFECT TO SUCH REVOLVING CREDIT BORROWING
OR ISSUANCE AND TO THE APPLICATION OF THE PROCEEDS THEREFROM, AND ADDITIONALLY,
IF SUCH REVOLVING CREDIT BORROWING SHALL HAVE BEEN REQUESTED BY A DESIGNATED
SUBSIDIARY, THE REPRESENTATIONS AND WARRANTIES OF SUCH DESIGNATED SUBSIDIARY
CONTAINED IN ITS DESIGNATION LETTER AS THOUGH MADE ON AND AS OF SUCH DATE OTHER
THAN ANY SUCH REPRESENTATIONS OR WARRANTIES THAT, BY THEIR TERMS, REFER TO A
SPECIFIC DATE OTHER THAN THE DATE OF SUCH REVOLVING CREDIT BORROWING OR
ISSUANCE, IN WHICH CASE AS OF SUCH SPECIFIC DATE;

 

(II)                                  NO EVENT HAS OCCURRED AND IS CONTINUING,
OR WOULD RESULT FROM SUCH REVOLVING CREDIT BORROWING OR ISSUANCE OR FROM THE
APPLICATION OF THE PROCEEDS THEREFROM, THAT CONSTITUTES A DEFAULT; AND

 

(B)                                 THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
SUCH OTHER APPROVALS, OPINIONS OR DOCUMENTS AS ANY LENDER PARTY THROUGH THE
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.

 

SECTION 3.04  Conditions Precedent to Each Competitive Bid Borrowing.  The
obligation of each Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions precedent
that:

 

(A)                                  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED THE WRITTEN CONFIRMATORY NOTICE OF COMPETITIVE BID BORROWING WITH
RESPECT THERETO;

 

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(B)                                 ON OR BEFORE THE DATE OF SUCH COMPETITIVE
BID BORROWING, BUT PRIOR TO SUCH COMPETITIVE BID BORROWING, THE ADMINISTRATIVE
AGENT SHALL HAVE RECEIVED A COMPETITIVE BID NOTE PAYABLE TO THE ORDER OF SUCH
LENDER FOR EACH OF THE ONE OR MORE COMPETITIVE BID ADVANCES TO BE MADE BY SUCH
LENDER AS PART OF SUCH COMPETITIVE BID BORROWING, IN A PRINCIPAL AMOUNT EQUAL TO
THE PRINCIPAL AMOUNT OF THE COMPETITIVE BID ADVANCE TO BE EVIDENCED THEREBY AND
OTHERWISE ON SUCH TERMS AS WERE AGREED TO FOR SUCH COMPETITIVE BID ADVANCE IN
ACCORDANCE WITH SECTION 2.04; AND

 

(C)                                  ON THE DATE OF SUCH COMPETITIVE BID
BORROWING THE FOLLOWING STATEMENTS SHALL BE TRUE (AND EACH OF THE GIVING OF THE
APPLICABLE NOTICE OF COMPETITIVE BID BORROWING AND THE ACCEPTANCE BY SUCH
BORROWER OF THE PROCEEDS OF SUCH COMPETITIVE BID BORROWING SHALL CONSTITUTE A
REPRESENTATION AND WARRANTY BY THE BORROWER REQUESTING SUCH COMPETITIVE BID
BORROWING THAT ON THE DATE OF SUCH COMPETITIVE BID BORROWING SUCH STATEMENTS ARE
TRUE):

 

(I)                                     THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN EACH LOAN DOCUMENT ARE CORRECT ON AND AS OF THE DATE OF SUCH
COMPETITIVE BID BORROWING, BEFORE AND AFTER GIVING EFFECT TO SUCH COMPETITIVE
BID BORROWING AND TO THE APPLICATION OF THE PROCEEDS THEREFROM, AND, IF SUCH
COMPETITIVE BID BORROWING SHALL HAVE BEEN REQUESTED BY A DESIGNATED SUBSIDIARY,
THE REPRESENTATIONS AND WARRANTIES OF SUCH DESIGNATED SUBSIDIARY CONTAINED IN
ITS DESIGNATION LETTER, AS THOUGH MADE ON AND AS OF SUCH DATE, AND

 

(II)                                  NO EVENT HAS OCCURRED AND IS CONTINUING,
OR WOULD RESULT FROM SUCH COMPETITIVE BID BORROWING OR FROM THE APPLICATION OF
THE PROCEEDS THEREFROM, THAT CONSTITUTES A DEFAULT.

 

SECTION 3.05  Determinations Under Section 3.01.  For purposes of determining
compliance with the conditions specified in Section 3.01, each Lender Party
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party’s ratable portion of such Borrowing.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01  Representations and Warranties of the Company.  The Company
represents and warrants as follows:

 

(A)                                  EACH LOAN PARTY AND ITS SUBSIDIARIES (I) IS
A CORPORATION OR OTHER BUSINESS ENTITY DULY ORGANIZED, VALIDLY EXISTING AND IN
GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS FORMATION, (II) IS DULY
QUALIFIED AND IN GOOD STANDING AS A FOREIGN ORGANIZATION IN EACH OTHER
JURISDICTION IN WHICH IT OWNS OR LEASES PROPERTY OR IN WHICH THE CONDUCT OF ITS
BUSINESS REQUIRES IT TO SO QUALIFY OR BE LICENSED EXCEPT WHERE THE FAILURE TO SO
QUALIFY OR BE LICENSED COULD NOT BE REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE
EFFECT AND (III) HAS ALL REQUISITE POWER AND AUTHORITY (INCLUDING, WITHOUT
LIMITATION, ALL GOVERNMENTAL LICENSES, PERMITS AND OTHER APPROVALS) TO OWN OR
LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW CONDUCTED
AND AS PROPOSED TO BE CONDUCTED.

 

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(B)                                 SET FORTH ON SCHEDULE 4.01(B) HERETO (AS
SUCH SCHEDULE MAY BE AMENDED BY THE COMPANY FROM TIME TO TIME) IS A COMPLETE AND
ACCURATE LIST OF ALL SUBSIDIARIES OF EACH LOAN PARTY (DESIGNATING WHETHER SUCH
SUBSIDIARY IS A U.S. SUBSIDIARY OR A NON-U.S. SUBSIDIARY), SHOWING (AS TO EACH
SUCH SUBSIDIARY) THE JURISDICTION OF ITS INCORPORATION, THE NUMBER OF SHARES OF
EACH CLASS OF ITS EQUITY INTERESTS AUTHORIZED, THE NUMBER OUTSTANDING, AND THE
PERCENTAGE OF THE OUTSTANDING SHARES OF EACH SUCH CLASS OF ITS EQUITY INTERESTS
OWNED (DIRECTLY OR INDIRECTLY) BY SUCH LOAN PARTY AND THE NUMBER OF SHARES
COVERED BY ALL OUTSTANDING OPTIONS, WARRANTS, RIGHTS OF CONVERSION OR PURCHASE
AND SIMILAR RIGHTS.  ALL OF THE OUTSTANDING EQUITY INTERESTS IN EACH LOAN
PARTY’S SUBSIDIARIES, TO THE EXTENT OWNED BY THE COMPANY AND ITS SUBSIDIARIES,
HAVE BEEN VALIDLY ISSUED, ARE FULLY PAID (EXCEPT FOR DIRECTORS’ QUALIFYING
SHARES) AND NON-ASSESSABLE AND ARE OWNED BY SUCH LOAN PARTY OR ONE OR MORE OF
ITS SUBSIDIARIES FREE AND CLEAR OF ALL LIENS (OTHER THAN PERMITTED LIENS),
EXCEPT THOSE CREATED UNDER THE COLLATERAL DOCUMENTS.  EACH SUCH SUBSIDIARY
(I) IS A CORPORATION OR OTHER BUSINESS ENTITY DULY ORGANIZED, VALIDLY EXISTING
AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS FORMATION,
(II) IS DULY QUALIFIED AND IN GOOD STANDING AS A FOREIGN ORGANIZATION IN EACH
OTHER JURISDICTION IN WHICH IT OWNS OR LEASES PROPERTY OR IN WHICH THE CONDUCT
OF ITS BUSINESS REQUIRES IT TO SO QUALIFY OR BE LICENSED EXCEPT WHERE THE
FAILURE TO SO QUALIFY OR BE LICENSED COULD NOT BE REASONABLY LIKELY TO HAVE A
MATERIAL ADVERSE EFFECT AND (III) HAS ALL REQUISITE POWER AND AUTHORITY
(INCLUDING, WITHOUT LIMITATION, ALL GOVERNMENTAL LICENSES, PERMITS AND OTHER
APPROVALS) TO OWN OR LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS
BUSINESS AS NOW CONDUCTED AND AS PROPOSED TO BE CONDUCTED.

 

(C)                                  THE EXECUTION, DELIVERY AND PERFORMANCE BY
EACH LOAN PARTY OR ITS SUBSIDIARIES OF EACH LOAN DOCUMENT TO WHICH IT IS OR IS
TO BE A PARTY (OTHER THAN LOAN DOCUMENTS REQUIRED TO BE ENTERED INTO PURSUANT TO
SECTIONS 5.01(J) AND 5.01(L) TO THE EXTENT NOT EXECUTED AS OF THE DATE HEREOF),
AND THE CONSUMMATION OF THE TRANSACTION, ARE WITHIN SUCH PERSON’S POWERS, HAVE
BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION, AND DO NOT (I) CONTRAVENE SUCH
PERSON’S CHARTER, BYLAWS OR OTHER ORGANIZATIONAL DOCUMENTS, (II) VIOLATE ANY
LAW, RULE, REGULATION (INCLUDING, WITHOUT LIMITATION, REGULATION X OF THE BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM), ORDER, WRIT, JUDGMENT, INJUNCTION,
DECREE, DETERMINATION OR AWARD, (III) CONFLICT WITH OR RESULT IN THE BREACH OF,
OR CONSTITUTE A DEFAULT OR REQUIRE ANY PAYMENT TO BE MADE UNDER, ANY MATERIAL
CONTRACT, LOAN AGREEMENT, INDENTURE, MORTGAGE, DEED OF TRUST, LEASE OR OTHER
INSTRUMENT BINDING ON OR AFFECTING ANY LOAN PARTY, ANY OF ITS SUBSIDIARIES OR
ANY OF THEIR PROPERTIES OR (IV) EXCEPT FOR THE LIENS CREATED UNDER THE LOAN
DOCUMENTS, RESULT IN OR REQUIRE THE CREATION OR IMPOSITION OF ANY LIEN UPON OR
WITH RESPECT TO ANY OF THE PROPERTIES OF ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES.  NO LOAN PARTY OR ANY OF ITS SUBSIDIARIES IS IN VIOLATION OF ANY
SUCH LAW, RULE, REGULATION, ORDER, WRIT, JUDGMENT, INJUNCTION, DECREE,
DETERMINATION OR AWARD OR IN BREACH OF ANY SUCH CONTRACT, LOAN AGREEMENT,
INDENTURE, MORTGAGE, DEED OF TRUST, LEASE OR OTHER INSTRUMENT, THE VIOLATION OR
BREACH OF WHICH COULD BE REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.

 

(D)                                 NO AUTHORIZATION OR APPROVAL OR OTHER ACTION
BY, AND NO NOTICE TO OR FILING WITH, ANY GOVERNMENTAL AUTHORITY OR REGULATORY
BODY OR ANY OTHER THIRD PARTY IS REQUIRED FOR (I) THE DUE EXECUTION, DELIVERY,
RECORDATION, FILING OR PERFORMANCE BY ANY LOAN PARTY OR ITS SUBSIDIARIES OF ANY
LOAN DOCUMENT TO WHICH IT IS OR IS TO BE A PARTY (OTHER THAN LOAN DOCUMENTS
REQUIRED TO BE ENTERED INTO PURSUANT TO SECTIONS 5.01(J) AND 5.01(L) TO THE
EXTENT NOT EXECUTED AS OF THE DATE HEREOF), OR FOR THE CONSUMMATION OF THE
TRANSACTION, (II) THE GRANT BY ANY LOAN PARTY OR ITS SUBSIDIARIES OF THE LIENS
GRANTED BY IT PURSUANT TO THE COLLATERAL DOCUMENTS, (III) THE PERFECTION OR
MAINTENANCE OF THE LIENS CREATED UNDER THE COLLATERAL DOCUMENTS (INCLUDING THE
FIRST PRIORITY NATURE THEREOF) OR (IV) THE EXERCISE BY THE ADMINISTRATIVE AGENT
OR ANY LENDER PARTY OF ITS RIGHTS UNDER THE LOAN DOCUMENTS OR THE REMEDIES IN
RESPECT OF THE COLLATERAL PURSUANT TO THE COLLATERAL DOCUMENTS, OTHER THAN THE
FILING OR RECORDING OF ANY UCC FINANCING STATEMENTS OR THE PERIODIC FILING OF
UCC CONTINUATION STATEMENTS IN RESPECT OF UCC FINANCING STATEMENTS FILED BY OR
ON BEHALF OF THE ADMINISTRATIVE AGENT.

 

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(E)                                  THIS AGREEMENT HAS BEEN, AND EACH OTHER
LOAN DOCUMENT WHEN DELIVERED HEREUNDER WILL HAVE BEEN, DULY EXECUTED AND
DELIVERED BY EACH LOAN PARTY PARTY THERETO.  THIS AGREEMENT IS, AND EACH OTHER
LOAN DOCUMENT WHEN DELIVERED HEREUNDER WILL BE, THE LEGAL, VALID AND BINDING
OBLIGATION OF EACH LOAN PARTY AND ITS SUBSIDIARIES PARTY THERETO, ENFORCEABLE
AGAINST SUCH LOAN PARTY AND SUCH SUBSIDIARIES IN ACCORDANCE WITH ITS TERMS.

 

(F)                                    (I) THE CONSOLIDATED BALANCE SHEET OF THE
COMPANY AND ITS SUBSIDIARIES AS AT JUNE 30, 2003, AND THE RELATED CONSOLIDATED
STATEMENTS OF INCOME AND CASH FLOW OF THE COMPANY AND ITS SUBSIDIARIES FOR THE
FISCAL YEAR THEN ENDED, ACCOMPANIED, AS TO THE CONSOLIDATED FINANCIAL
STATEMENTS, BY AN UNQUALIFIED OPINION OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT
PUBLIC ACCOUNTANTS, DULY CERTIFIED BY A RESPONSIBLE OFFICER, COPIES OF WHICH
HAVE BEEN FURNISHED TO EACH LENDER PARTY, FAIRLY PRESENT, SUBJECT TO YEAR-END
AUDIT ADJUSTMENTS, THE CONSOLIDATED FINANCIAL CONDITION OF THE COMPANY AND ITS
SUBSIDIARIES AS AT SUCH DATES AND THE CONSOLIDATED RESULTS OF THE OPERATIONS OF
THE COMPANY AND ITS SUBSIDIARIES FOR THE PERIODS ENDED ON SUCH DATES, ALL IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED ON A CONSISTENT
BASIS, AND

 

(II)                                  SINCE JUNE 30, 2003 THERE HAS OCCURRED NO
MATERIAL ADVERSE CHANGE, EXCEPT AS REPORTED IN THE DISCLOSURES OF THE COMPANY IN
ITS PUBLIC FILINGS WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
PRIOR TO THE DATE HEREOF.

 

(G)                                 THE CONSOLIDATED FORECASTED BALANCE SHEET,
STATEMENTS OF INCOME AND STATEMENTS OF CASH FLOW OF THE COMPANY AND ITS
SUBSIDIARIES DELIVERED TO THE LENDER PARTIES PURSUANT TO SECTION 3.01(A)(X) OR
5.03 WERE PREPARED IN GOOD FAITH ON THE BASIS OF THE ASSUMPTIONS STATED THEREIN,
WHICH ASSUMPTIONS WERE FAIR IN THE LIGHT OF CONDITIONS EXISTING AT THE TIME OF
DELIVERY OF SUCH FORECASTS, AND REPRESENTED, AT THE TIME OF DELIVERY AND ON THE
EFFECTIVE DATE, THE COMPANY’S BEST ESTIMATE OF THE FUTURE FINANCIAL PERFORMANCE
OF THE COMPANY AND ITS SUBSIDIARIES BUT SUBJECT TO THE INHERENT UNCERTAINTIES
ASSOCIATED WITH ALL FORECASTS OF FUTURE ECONOMIC PERFORMANCE.

 

(H)                                 EXCEPT AS SET FORTH IN SCHEDULE 4.01(H), OR
IN THE DISCLOSURES OF THE COMPANY IN ITS PUBLIC FILINGS WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION PRIOR TO THE DATE HEREOF, THERE IS NO ACTION,
SUIT, INVESTIGATION, LITIGATION OR PROCEEDING AFFECTING ANY LOAN PARTY OR ANY OF
ITS SUBSIDIARIES, INCLUDING ANY ENVIRONMENTAL ACTION, PENDING OR, TO THE BEST
KNOWLEDGE OF THE COMPANY, THREATENED BEFORE ANY COURT, GOVERNMENT AGENCY OR
ARBITRATOR THAT (I) COULD BE REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT
OR (II) PURPORTS TO AFFECT THE LEGALITY, VALIDITY OR ENFORCEABILITY OF ANY LOAN
DOCUMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(I)                                     NO LOAN PARTY OR SUBSIDIARY OF A LOAN
PARTY IS ENGAGED IN THE BUSINESS OF EXTENDING CREDIT FOR THE PURPOSE OF
PURCHASING OR CARRYING MARGIN STOCK (OTHER THAN PURCHASES OF THE SHARES OF
COMMON STOCK OF THE COMPANY PERMITTED BY SECTION 5.02(G), ALL SUCH SHARES TO BE
RETIRED UPON PURCHASE), AND NO PROCEEDS OF ANY ADVANCE OR DRAWINGS UNDER ANY
LETTER OF CREDIT WILL BE USED TO PURCHASE OR CARRY ANY MARGIN STOCK OR TO EXTEND
CREDIT TO OTHERS FOR THE PURPOSE OF PURCHASING OR CARRYING ANY MARGIN STOCK.

 

(J)                                     ALL FILINGS AND OTHER ACTIONS NECESSARY
OR DESIRABLE TO PERFECT AND PROTECT THE SECURITY INTEREST IN THE COLLATERAL
CREATED UNDER THE COLLATERAL DOCUMENTS ENTERED INTO AS OF THE DATE OF THIS
REPRESENTATION AND TO THE EXTENT REQUIRED THEREBY HAVE BEEN DULY MADE OR TAKEN
AND ARE IN FULL FORCE AND EFFECT, SUBJECT TO SECTION 5.01(L), AND THE COLLATERAL
DOCUMENTS ENTERED INTO AS OF THE DATE OF THIS REPRESENTATION CREATE FOR THE
BENEFIT OF THE SECURED PARTIES A VALID AND, TOGETHER WITH SUCH FILINGS AND OTHER
ACTIONS, PERFECTED FIRST PRIORITY SECURITY INTEREST IN THE COLLATERAL SECURING
THE PAYMENT OF THE SECURED OBLIGATIONS SUBJECT TO SECTION 5.01(L), AND ALL
FILINGS AND OTHER ACTIONS NECESSARY OR DESIRABLE TO PERFECT AND PROTECT SUCH
SECURITY INTEREST HAVE BEEN DULY TAKEN BY THE LOAN PARTIES TO THE EXTENT
REQUIRED BY THIS

 

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SECTION 4.01, SUBJECT TO SECTION 5.01(L).  THE LOAN PARTIES OR THEIR
SUBSIDIARIES ARE THE LEGAL AND BENEFICIAL OWNERS OF THE COLLATERAL FREE AND
CLEAR OF ANY LIEN (OTHER THAN PERMITTED LIENS), EXCEPT FOR THE LIENS AND
SECURITY INTERESTS CREATED OR PERMITTED UNDER THE LOAN DOCUMENTS

 

(K)                                  NEITHER ANY LOAN PARTY NOR ANY OF ITS
SUBSIDIARIES IS (I) AN “INVESTMENT COMPANY,” OR AN “AFFILIATED PERSON” OF, OR
“PROMOTER” OR “PRINCIPAL UNDERWRITER” FOR, AN “INVESTMENT COMPANY,” AS SUCH
TERMS ARE DEFINED IN THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED OR (II) A
“HOLDING COMPANY,” OR A “SUBSIDIARY COMPANY” OF A “HOLDING COMPANY” OR AN
“AFFILIATE” OF A “HOLDING COMPANY,” OR OF A “SUBSIDIARY COMPANY” OF A “HOLDING
COMPANY” AS SUCH TERMS ARE DEFINED IN THE PUBLIC UTILITY HOLDING COMPANY ACT OF
1935, AS AMENDED.  NEITHER THE MAKING OF ANY ADVANCES, NOR THE ISSUANCE OF ANY
LETTERS OF CREDIT, NOR THE APPLICATION OF THE PROCEEDS OR REPAYMENT THEREOF BY
ANY BORROWER, NOR THE CONSUMMATION OF THE OTHER TRANSACTIONS CONTEMPLATED
HEREBY, WILL VIOLATE ANY PROVISION OF ANY SUCH ACT OR ANY RULE, REGULATION OR
ORDER OF THE SECURITIES AND EXCHANGE COMMISSION THEREUNDER.

 

(L)                                     (I) EXCEPT AS SET FORTH ON
SCHEDULE 4.01(L)(I), THE OPERATIONS AND PROPERTIES OF EACH LOAN PARTY AND EACH
OF ITS SUBSIDIARIES COMPLY IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE
ENVIRONMENTAL LAWS AND ENVIRONMENTAL PERMITS, EXCEPT FOR SUCH NON-COMPLIANCE
THAT COULD NOT REASONABLY BE EXPECTED TO RESULT IN MATERIAL LIABILITY, ALL PAST
WRITTEN CLAIMS OF NON-COMPLIANCE WITH SUCH ENVIRONMENTAL LAWS AND ENVIRONMENTAL
PERMITS HAVE BEEN RESOLVED WITHOUT ONGOING MATERIAL OBLIGATIONS OR MATERIAL
COSTS, AND NO CIRCUMSTANCES EXIST THAT COULD BE REASONABLY LIKELY TO (X) FORM
THE BASIS OF AN ENVIRONMENTAL ACTION AGAINST ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES OR ANY OF ITS PROPERTIES THAT COULD HAVE A MATERIAL ADVERSE EFFECT
OR (Y) CAUSE ANY SUCH PROPERTY TO BE SUBJECT TO ANY MATERIAL RESTRICTIONS ON
OWNERSHIP, OCCUPANCY, USE OR TRANSFERABILITY UNDER ANY ENVIRONMENTAL LAW.

 

(II)                                  EXCEPT AS SET FORTH ON
SCHEDULE 4.01(L)(II), NONE OF THE PROPERTIES CURRENTLY OR FORMERLY OWNED OR
OPERATED BY ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES IS LISTED OR PROPOSED FOR
LISTING ON THE NPL OR ON THE CERCLIS OR ANY ANALOGOUS FOREIGN, STATE OR LOCAL
LIST; THERE ARE NO AND, TO THE KNOWLEDGE OF EACH LOAN PARTY, NEVER HAVE BEEN ANY
UNDERGROUND OR ABOVEGROUND STORAGE TANKS OR ANY SURFACE IMPOUNDMENTS, SEPTIC
TANKS, PITS, SUMPS OR LAGOONS IN WHICH HAZARDOUS MATERIALS ARE BEING OR HAVE
BEEN TREATED, STORED OR DISPOSED ON ANY PROPERTY CURRENTLY OWNED OR OPERATED BY
ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES OR, TO THE BEST OF ITS KNOWLEDGE, ON
ANY PROPERTY FORMERLY OWNED OR OPERATED BY ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES, IN EACH CASE THAT COULD REASONABLY BE EXPECTED TO RESULT IN
MATERIAL LIABILITY; THERE IS NO ASBESTOS OR ASBESTOS-CONTAINING MATERIAL ON ANY
PROPERTY CURRENTLY OWNED OR OPERATED BY ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES THAT COULD REASONABLY BE EXPECTED TO RESULT IN MATERIAL LIABILITY;
AND HAZARDOUS MATERIALS HAVE NOT BEEN RELEASED, DISCHARGED OR DISPOSED OF ON ANY
PROPERTY CURRENTLY OR FORMERLY OWNED OR OPERATED BY ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES, EXCEPT FOR SUCH RELEASES, DISCHARGES OR DISPOSALS THAT COULD NOT
REASONABLY BE EXPECTED TO RESULT IN MATERIAL LIABILITY.

 

(III)                               EXCEPT AS SET FORTH ON
SCHEDULE 4.01(L)(III), NEITHER ANY LOAN PARTY NOR ANY OF ITS SUBSIDIARIES IS
UNDERTAKING, EITHER INDIVIDUALLY OR TOGETHER WITH OTHER POTENTIALLY RESPONSIBLE
PARTIES, ANY INVESTIGATION OR ASSESSMENT OR REMEDIAL OR RESPONSE ACTION RELATING
TO ANY ACTUAL OR THREATENED RELEASE, DISCHARGE OR DISPOSAL OF HAZARDOUS
MATERIALS AT ANY SITE, LOCATION OR OPERATION, EITHER VOLUNTARILY OR PURSUANT TO
THE ORDER OF ANY GOVERNMENTAL OR REGULATORY AUTHORITY OR THE REQUIREMENTS OF ANY
ENVIRONMENTAL LAW WHICH COULD REASONABLY BE EXPECTED TO RESULT IN MATERIAL
LIABILITY; AND ALL WASTE HAZARDOUS MATERIALS GENERATED, USED, TREATED, HANDLED
OR STORED AT, OR TRANSPORTED TO OR FROM, ANY PROPERTY CURRENTLY OR FORMERLY
OWNED OR OPERATED BY ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES HAVE BEEN
DISPOSED OF IN A MANNER NOT REASONABLY EXPECTED TO RESULT IN MATERIAL LIABILITY
TO ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES.

 

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(M)                               SET FORTH ON SCHEDULE 4.01(M) HERETO, EXCEPT
FOR LIENS OTHERWISE PERMITTED UNDER SECTION 5.02(A), IS A COMPLETE AND ACCURATE
LIST OF ALL LIENS ON THE PROPERTY OR ASSETS OF ANY LOAN PARTY OR ANY SIGNIFICANT
SUBSIDIARY (OTHER THAN SUCH LIENS AS MAY EXIST ON THE PROPERTY OR ASSETS OF
NON-U.S. SUBSIDIARIES THAT SECURE OBLIGATIONS THE AGGREGATE PRINCIPAL AMOUNT OF
WHICH DOES NOT EXCEED (X) $5,000,000 FOR ALL SUCH LIENS ON THE PROPERTY OR
ASSETS OF ANY NON-U.S. SUBSIDIARY OR (Y) $10,000,000 FOR ALL SUCH LIENS ON THE
PROPERTY OR ASSETS OF ALL NON-U.S. SUBSIDIARIES), SHOWING AS OF THE DATE HEREOF
THE LIENHOLDER THEREOF, THE PRINCIPAL AMOUNT OF THE OBLIGATIONS SECURED THEREBY
AND THE PROPERTY OR ASSETS OF SUCH LOAN PARTY OR SUCH SIGNIFICANT SUBSIDIARY
SUBJECT THERETO.

 

ARTICLE V

COVENANTS

 

SECTION 5.01  Affirmative Covenants.  So long as any Advance or any other
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Company will:

 

(A)                                  COMPLIANCE WITH LAWS, ETC.  COMPLY, AND
CAUSE EACH OF ITS SUBSIDIARIES TO COMPLY WITH ALL APPLICABLE LAWS, RULES,
REGULATIONS AND ORDERS, SUCH COMPLIANCE TO INCLUDE, WITHOUT LIMITATION,
COMPLIANCE WITH ERISA AND ENVIRONMENTAL LAWS, EXCEPT WHERE FAILURE TO COMPLY
WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.

 

(B)                                 PAYMENT OF TAXES, ETC.  PAY AND DISCHARGE,
AND CAUSE EACH OF ITS SUBSIDIARIES TO PAY AND DISCHARGE, BEFORE THE SAME SHALL
BECOME DELINQUENT, (I) ALL MATERIAL TAXES, ASSESSMENTS AND GOVERNMENTAL CHARGES
OR LEVIES IMPOSED UPON IT OR UPON ITS PROPERTY AND (II) ALL LAWFUL CLAIMS THAT,
IF UNPAID, MIGHT BY LAW BECOME A LIEN UPON ITS PROPERTY WHICH IS NOT OTHERWISE
PERMITTED HEREUNDER; PROVIDED, HOWEVER, THAT NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES SHALL BE REQUIRED TO PAY OR DISCHARGE ANY SUCH TAX, ASSESSMENT,
CHARGE OR CLAIM THAT IS BEING CONTESTED IN GOOD FAITH AND BY PROPER PROCEEDINGS
AND AS TO WHICH APPROPRIATE RESERVES ARE BEING MAINTAINED, UNLESS AND UNTIL ANY
LIEN RESULTING THEREFROM ATTACHES TO ITS PROPERTY AND BECOMES ENFORCEABLE
AGAINST ITS OTHER CREDITORS.

 

(C)                                  COMPLIANCE WITH ENVIRONMENTAL LAWS. 
COMPLY, AND CAUSE EACH OF ITS SUBSIDIARIES TO COMPLY, IN ALL MATERIAL RESPECTS,
WITH ALL APPLICABLE ENVIRONMENTAL LAWS AND ENVIRONMENTAL PERMITS; OBTAIN AND
RENEW, AND CAUSE EACH OF ITS SUBSIDIARIES TO OBTAIN AND RENEW, ALL ENVIRONMENTAL
PERMITS NECESSARY FOR ITS OPERATIONS AND PROPERTIES; AND CONDUCT, AND CAUSE EACH
OF ITS SUBSIDIARIES TO CONDUCT, ANY INVESTIGATION, STUDY, SAMPLING AND TESTING,
AND UNDERTAKE ANY CLEANUP, REMOVAL, REMEDIAL OR OTHER ACTION NECESSARY TO REMOVE
AND CLEAN UP ALL HAZARDOUS MATERIALS FROM ANY OF ITS PROPERTIES, IN ACCORDANCE
WITH THE REQUIREMENTS OF ALL ENVIRONMENTAL LAWS; PROVIDED, HOWEVER, THAT NEITHER
THE COMPANY NOR ANY OF ITS SUBSIDIARIES SHALL BE REQUIRED TO UNDERTAKE ANY SUCH
CLEANUP, REMOVAL, REMEDIAL OR OTHER ACTION TO THE EXTENT THAT ITS OBLIGATION TO
DO SO IS BEING CONTESTED IN GOOD FAITH AND BY PROPER PROCEEDINGS AND APPROPRIATE
RESERVES ARE BEING MAINTAINED WITH RESPECT TO SUCH CIRCUMSTANCES.

 

(D)                                 MAINTENANCE OF INSURANCE.  MAINTAIN, AND
CAUSE EACH OF ITS SUBSIDIARIES TO MAINTAIN INSURANCE WITH RESPONSIBLE AND
REPUTABLE INSURANCE COMPANIES OR ASSOCIATIONS, OR ARRANGEMENTS FOR
SELF-INSURANCE IF SUCH ARRANGEMENTS ARE IN ACCORDANCE WITH PRUDENT INDUSTRY
PRACTICE, IN EACH CASE IN SUCH AMOUNTS AND COVERING SUCH RISKS AS IS USUALLY
CARRIED BY COMPANIES ENGAGED IN SIMILAR BUSINESSES AND OWNING SIMILAR PROPERTIES
IN THE SAME GENERAL AREAS IN WHICH THE COMPANY OR SUCH SUBSIDIARY OPERATES.

 

(E)                                  PRESERVATION OF CORPORATE EXISTENCE, ETC. 
PRESERVE AND MAINTAIN, AND CAUSE EACH OF ITS SIGNIFICANT SUBSIDIARIES TO
PRESERVE AND MAINTAIN, ITS CORPORATE EXISTENCE, RIGHTS (CHARTER AND

 

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STATUTORY), PERMITS, LICENSES, APPROVALS, PRIVILEGES AND FRANCHISES; PROVIDED,
HOWEVER, THAT THE COMPANY MAY CONSUMMATE ANY MERGER OR CONSOLIDATION PERMITTED
UNDER SECTION 5.02(D) AND THE COMPANY MAY SELL ASSETS AS PERMITTED UNDER
SECTION 5.02(E), AND PROVIDED FURTHER THAT NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES SHALL BE REQUIRED TO PRESERVE ANY RIGHT, PERMIT, LICENSE, APPROVAL,
PRIVILEGE OR FRANCHISE IF THE BOARD OF DIRECTORS OF THE COMPANY OR SUCH
SUBSIDIARY SHALL DETERMINE THAT THE PRESERVATION THEREOF IS NO LONGER DESIRABLE
IN THE CONDUCT OF THE BUSINESS OF THE COMPANY OR SUCH SUBSIDIARY, AS THE CASE
MAY BE, AND THAT THE LOSS THEREOF IS NOT DISADVANTAGEOUS IN ANY MATERIAL RESPECT
TO THE COMPANY, SUCH SUBSIDIARY OR THE LENDER PARTIES.

 

(F)                                    VISITATION RIGHTS.  AT ANY REASONABLE
TIME DURING REGULAR BUSINESS HOURS AND FROM TIME TO TIME (BUT NOT UNREASONABLY
FREQUENTLY), UPON REASONABLE PRIOR NOTICE, PERMIT THE ADMINISTRATIVE AGENT OR
ANY OF THE LENDER PARTIES OR ANY AGENTS OR REPRESENTATIVES THEREOF, TO EXAMINE
AND MAKE COPIES OF AND ABSTRACTS FROM THE RECORDS AND BOOKS OF ACCOUNT OF, AND
VISIT THE PROPERTIES OF, THE COMPANY AND ANY OF ITS SIGNIFICANT SUBSIDIARIES,
AND TO DISCUSS THE AFFAIRS, FINANCES AND ACCOUNTS OF THE COMPANY AND ANY OF ITS
SIGNIFICANT SUBSIDIARIES WITH ANY OF THE OFFICERS OR DIRECTORS DESIGNATED BY THE
COMPANY OR A SIGNIFICANT SUBSIDIARY, AS THE CASE MAY BE, AND WITH THEIR
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.

 

(G)                                 KEEPING OF BOOKS.  KEEP, AND CAUSE EACH OF
ITS SUBSIDIARIES TO KEEP, PROPER BOOKS OF RECORD AND ACCOUNT, IN WHICH FULL AND
CORRECT ENTRIES SHALL BE MADE OF ALL FINANCIAL TRANSACTIONS AND THE ASSETS AND
BUSINESS OF THE COMPANY AND EACH SUCH SUBSIDIARY IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES IN EFFECT FROM TIME TO TIME.

 

(H)                                 MAINTENANCE OF PROPERTIES, ETC.  MAINTAIN
AND PRESERVE, AND CAUSE EACH OF ITS SIGNIFICANT SUBSIDIARIES TO MAINTAIN AND
PRESERVE, ALL OF ITS PROPERTIES THAT ARE REASONABLY REQUIRED IN THE CONDUCT OF
ITS BUSINESS IN GOOD WORKING ORDER AND CONDITION, ORDINARY WEAR AND TEAR
EXCEPTED.

 

(I)                                     TRANSACTIONS WITH AFFILIATES.  CONDUCT,
AND CAUSE EACH OF ITS SUBSIDIARIES TO CONDUCT, ALL TRANSACTIONS OTHERWISE
PERMITTED UNDER THE LOAN DOCUMENTS WITH ANY OF THEIR AFFILIATES ON TERMS THAT
ARE FAIR AND REASONABLE AND NO LESS FAVORABLE TO THE COMPANY OR SUCH SUBSIDIARY
THAN IT WOULD OBTAIN IN A COMPARABLE ARM’S-LENGTH TRANSACTION WITH A PERSON NOT
AN AFFILIATE, EXCEPT FOR (I) TRANSACTIONS BETWEEN LOAN PARTIES, (II)
TRANSACTIONS WITH NIHON INTER ELECTRONICS OR ANY JOINT VENTURE TO WHICH ANY LOAN
PARTY IS PARTY OR WITH MEMBERS OF SUCH JOINT VENTURE IN RESPECT OF SUCH JOINT
VENTURE, TO THE EXTENT SUCH MEMBER WOULD BE DEEMED AN AFFILIATE, AND (III)
TRANSACTIONS WITH SUBSIDIARIES OR AFFILIATES OF THE COMPANY IN WHICH THE COMPANY
OWNS NOT LESS THAN 90% OF ALL EQUITY INTERESTS.

 

(J)                                     COVENANT TO GUARANTEE OBLIGATIONS AND
GIVE SECURITY.  UPON (Y) THE FORMATION OR ACQUISITION OF ANY NEW DIRECT OR
INDIRECT SIGNIFICANT SUBSIDIARY OF ANY LOAN PARTY, OR (Z) ANY DIRECT OR INDIRECT
SUBSIDIARY OF ANY LOAN PARTY BECOMING A SIGNIFICANT SUBSIDIARY (EXCLUDING, IN
THE CASE OF (Y) AND (Z), ANY SIGNIFICANT SUBSIDIARY THAT IS A NON-U.S.
SUBSIDIARY IF THE EFFECT OF SUCH UNDERTAKING WOULD HAVE MATERIAL ADVERSE TAX
CONSEQUENCES TO THE LOAN PARTIES TAKEN AS A WHOLE), THEN THE COMPANY SHALL, IN
EACH CASE AT THE COMPANY’S EXPENSE:

 

(I)                                     WITHIN 60 DAYS, OR SUCH LATER TIME AS
MAY BE AGREED TO BY THE ADMINISTRATIVE AGENT IN ITS SOLE DISCRETION, AFTER SUCH
FORMATION, ACQUISITION, OR SUBSIDIARY BECOMING A SIGNIFICANT SUBSIDIARY, CAUSE
EACH SUCH (A)  U.S. SUBSIDIARY THAT IS A SIGNIFICANT SUBSIDIARY AND EACH DIRECT
AND INDIRECT U.S. SUBSIDIARY WHICH IS A SIGNIFICANT SUBSIDIARY OF SUCH
SIGNIFICANT SUBSIDIARY TO DULY EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT A
GUARANTY OR GUARANTY SUPPLEMENT TO THE U.S. GUARANTY, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT, GUARANTEEING ALL OF THE LOAN PARTIES’
OBLIGATIONS UNDER THE LOAN DOCUMENTS (OTHER THAN THE OBLIGATIONS OF THE COMPANY
AS GUARANTOR PURSUANT TO ARTICLE VII OF

 

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THIS AGREEMENT), AND (B) NON-U.S. SUBSIDIARY THAT IS A SIGNIFICANT SUBSIDIARY TO
DULY EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT A GUARANTY OR GUARANTY
SUPPLEMENT TO THE NON-U.S. GUARANTY, IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT, AND (C) U.S. SUBSIDIARY OR NON-U.S. SUBSIDIARY TO MAKE,
WITH RESPECT TO ITSELF AND TO ITS ENTRY INTO SUCH GUARANTY OR GUARANTY
SUPPLEMENT REFERRED TO IN CLAUSES (A) AND (B) HEREOF, REPRESENTATIONS AND
WARRANTIES SUBSTANTIALLY SIMILAR TO THOSE SET FORTH IN SECTIONS 4.01(C) AND (D);
PROVIDED, THAT NO GUARANTY OR GUARANTY SUPPLEMENT MAY BE REQUIRED (IF ACCEPTABLE
TO THE ADMINISTRATIVE AGENT) FROM A NON-U.S. SUBSIDIARY THAT IS A SIGNIFICANT
SUBSIDIARY IF THE EXECUTION AND DELIVERY THEREOF WOULD RESULT IN MATERIAL
ADVERSE TAX CONSEQUENCES TO THE LOAN PARTIES TAKEN AS A WHOLE;

 

(II)                                  WITHIN 60 DAYS, OR SUCH LATER TIME AS MAY
BE AGREED TO BY THE ADMINISTRATIVE AGENT IN ITS SOLE DISCRETION, AFTER SUCH
FORMATION, ACQUISITION OR SUBSIDIARY BECOMING A SIGNIFICANT SUBSIDIARY, WITH
RESPECT TO ANY SUBSIDIARY THAT IS A U.S. SUBSIDIARY PLEDGE OR CAUSE ITS
SUBSIDIARIES TO PLEDGE TO THE ADMINISTRATIVE AGENT ON BEHALF OF THE SECURED
PARTIES, 100% OF THE TOTAL OUTSTANDING SHARES OR OTHER OWNERSHIP INTERESTS OF
SUCH SUBSIDIARY OWNED BY THE COMPANY OR ITS SUBSIDIARIES;

 

(III)                               WITHIN 60 DAYS, OR SUCH LATER TIME AS MAY BE
AGREED TO BY THE ADMINISTRATIVE AGENT IN ITS SOLE DISCRETION, AFTER SUCH
FORMATION, ACQUISITION OR SUBSIDIARY BECOMING A SIGNIFICANT SUBSIDIARY, DULY
EXECUTE AND DELIVER, AND CAUSE EACH SUCH SIGNIFICANT SUBSIDIARY (OTHER THAN ANY
SIGNIFICANT SUBSIDIARY ORGANIZED OR LOCATED OUTSIDE OF THE UNITED STATES) TO
TAKE WHATEVER ACTION (INCLUDING, WITHOUT LIMITATION, THE FILING OF UNIFORM
COMMERCIAL CODE FINANCING STATEMENTS) MAY BE NECESSARY OR ADVISABLE IN THE
OPINION OF THE ADMINISTRATIVE AGENT TO VEST IN THE ADMINISTRATIVE AGENT (OR IN
ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT DESIGNATED BY IT) VALID AND
SUBSISTING LIENS ON THE SHARES OR OTHER OWNERSHIP INTERESTS REFERRED TO IN
CLAUSE (II) ABOVE, ENFORCEABLE AGAINST ALL THIRD PARTIES IN ACCORDANCE WITH
THEIR TERMS;

 

(IV)                              WITHIN 60 DAYS, OR SUCH LATER TIME AS MAY BE
AGREED TO BY THE ADMINISTRATIVE AGENT IN ITS SOLE DISCRETION, AFTER SUCH
FORMATION, ACQUISITION OR SUBSIDIARY BECOMING A SIGNIFICANT SUBSIDIARY, DELIVER
TO THE ADMINISTRATIVE AGENT, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT IN ITS
SOLE DISCRETION, A SIGNED COPY OF A FAVORABLE OPINION, ADDRESSED TO THE
ADMINISTRATIVE AGENT AND THE OTHER SECURED PARTIES, OF COUNSEL FOR THE LOAN
PARTIES ACCEPTABLE TO THE ADMINISTRATIVE AGENT AS TO THE MATTERS CONTAINED IN
CLAUSES (I), (II) AND (III) ABOVE, AS TO SUCH GUARANTIES, GUARANTY SUPPLEMENTS
AND PLEDGES BEING LEGAL, VALID AND BINDING OBLIGATIONS OF THE COMPANY OR ITS
SUBSIDIARIES ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS AND AS TO SUCH OTHER
MATTERS AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST;

 

(V)                                 AT ANY TIME AND FROM TIME TO TIME, PROMPTLY
EXECUTE AND DELIVER ANY AND ALL FURTHER INSTRUMENTS AND DOCUMENTS AND TAKE ALL
SUCH OTHER ACTION AS THE ADMINISTRATIVE AGENT MAY DEEM NECESSARY OR DESIRABLE IN
OBTAINING THE FULL BENEFITS OF, OR IN PERFECTING AND PRESERVING THE LIENS OF,
SUCH GUARANTIES, GUARANTY SUPPLEMENTS OR PLEDGES; AND

 

(VI)                              WITHIN 60 DAYS, OR SUCH LATER TIME AS MAY BE
AGREED TO BY THE ADMINISTRATIVE AGENT IN ITS SOLE DISCRETION, AFTER SUCH
FORMATION, ACQUISITION, OR SUBSIDIARY BECOMING A SIGNIFICANT SUBSIDIARY, WITH
RESPECT TO ANY SUBSIDIARY THAT IS A NON-U.S. SUBSIDIARY AND A SIGNIFICANT
SUBSIDIARY, PLEDGE OR CAUSE ITS SUBSIDIARIES TO PLEDGE TO THE ADMINISTRATIVE
AGENT ON BEHALF OF THE SECURED PARTIES, 65% OF THE TOTAL OUTSTANDING SHARES OR
OTHER OWNERSHIP INTERESTS OF SUCH NON-U.S. SUBSIDIARY OWNED BY THE COMPANY OR
ITS SUBSIDIARIES,

 

provided, that, no action shall be required to be taken by any Loan Party with
respect to this Section 5.01(j) if, with respect to any Non-U.S. Subsidiary
which is a Significant Subsidiary, in the event

 

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that the Company and the Administrative Agent agree in good faith that
compliance with the provisions of this Section 5.01(j) with respect to such
Non-U.S. Subsidiary will be commercially unreasonable or impracticable,
including without limitation, after giving consideration to the out-of-pocket
expenses of obtaining the execution of the Non-U.S. Guaranty by such Non-U.S.
Subsidiary or the pledge of the shares of such Non-U.S. Subsidiary.

 

(K)                                  FURTHER ASSURANCES.  (I) PROMPTLY UPON
REQUEST BY THE ADMINISTRATIVE AGENT, OR ANY LENDER PARTY THROUGH THE
ADMINISTRATIVE AGENT, CORRECT ANY MATERIAL DEFECT OR ERROR THAT MAY BE
DISCOVERED IN ANY LOAN DOCUMENT OR IN THE EXECUTION, ACKNOWLEDGMENT, FILING OR
RECORDATION THEREOF, AND

 

(II)                                  PROMPTLY UPON REQUEST BY THE
ADMINISTRATIVE AGENT, OR ANY LENDER PARTY THROUGH THE ADMINISTRATIVE AGENT, DO,
EXECUTE, ACKNOWLEDGE, DELIVER, RECORD, RE-RECORD, FILE, RE-FILE, REGISTER AND
RE-REGISTER ANY AND ALL SUCH FURTHER ACTS, DEEDS, CONVEYANCES, PLEDGE
AGREEMENTS, ASSIGNMENTS, FINANCING STATEMENTS AND CONTINUATIONS THEREOF,
TERMINATION STATEMENTS, NOTICES OF ASSIGNMENT, TRANSFERS, CERTIFICATES,
ASSURANCES AND OTHER INSTRUMENTS AS THE ADMINISTRATIVE AGENT, OR ANY LENDER
PARTY THROUGH THE ADMINISTRATIVE AGENT, MAY REASONABLY REQUIRE FROM TIME TO TIME
IN ORDER TO (A) CARRY OUT MORE EFFECTIVELY THE PURPOSES OF THE LOAN DOCUMENTS,
(B) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, SUBJECT ANY LOAN PARTY’S
OR ANY OF ITS SUBSIDIARIES’ PROPERTIES, ASSETS, RIGHTS OR INTERESTS TO THE LIENS
NOW OR HEREAFTER INTENDED TO BE COVERED BY ANY OF THE COLLATERAL DOCUMENTS, (C)
PERFECT AND MAINTAIN THE VALIDITY, EFFECTIVENESS AND PRIORITY OF ANY OF THE
COLLATERAL DOCUMENTS AND ANY OF THE LIENS INTENDED TO BE CREATED THEREUNDER AND
(D) ASSURE, CONVEY, GRANT, ASSIGN, TRANSFER, PRESERVE, PROTECT AND CONFIRM MORE
EFFECTIVELY UNTO THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES THE RIGHTS
GRANTED OR NOW OR HEREAFTER INTENDED TO BE GRANTED TO THE ADMINISTRATIVE AGENT
AND THE LENDER PARTIES UNDER ANY LOAN DOCUMENT OR UNDER ANY OTHER INSTRUMENT
EXECUTED IN CONNECTION WITH ANY LOAN DOCUMENT TO WHICH ANY LOAN PARTY OR ANY OF
ITS SUBSIDIARIES IS OR IS TO BE A PARTY, AND CAUSE EACH OF ITS SUBSIDIARIES TO
DO SO.

 

(L)                                     ADDITIONAL AFFIRMATIVE COVENANTS.  ON OR
BEFORE THE DATE THAT IS 60 DAYS, OR SUCH LATER TIME AS MAY BE AGREED TO BY THE
ADMINISTRATIVE AGENT IN ITS SOLE DISCRETION, AFTER THE EFFECTIVE DATE OR, IF
EARLIER, UPON THE DESIGNATION OF A NON-U.S. SUBSIDIARY AS A DESIGNATED
SUBSIDIARY UNDER SECTION 9.11:

 

(I)                                     TO THE EXTENT REQUESTED BY THE
ADMINISTRATIVE AGENT, USE ITS BEST EFFORTS TO OBTAIN THE CERTIFICATES
REPRESENTING 65% OF THE PLEDGED SHARES IN RESPECT OF THE NON-U.S. GUARANTORS SET
OUT ON SCHEDULE 3.01(A)(II)(A)(2) (AND TO TAKE SUCH OTHER ACTION TO PERFECT THE
SECURITY INTEREST IN THOSE PLEDGED SHARES INCLUDING, WITHOUT LIMITATION, THE
REGISTRATION OF SUCH PLEDGED SHARES AS APPLICABLE) TOGETHER WITH UNDATED STOCK
POWERS EXECUTED IN BLANK.

 

(II)                                  DELIVER THE FOLLOWING TO THE
ADMINISTRATIVE AGENT:

 

(A)                              THE NON-U.S. GUARANTY DULY EXECUTED BY ALL
NON-U.S SUBSIDIARIES THAT ARE SIGNIFICANT SUBSIDIARIES.

 

(B)                                CERTIFIED COPIES OF THE RESOLUTIONS OF THE
BOARD OF DIRECTORS OF EACH NON-U.S. SUBSIDIARY THAT IS A SIGNIFICANT SUBSIDIARY
AND WHICH IS REQUIRED TO ENTER INTO THE LOAN DOCUMENTS PURSUANT TO THIS
SECTION 5.01(L) APPROVING THE TRANSACTION AND EACH LOAN DOCUMENT TO WHICH IT IS
OR IS TO BE A PARTY, AND OF ALL DOCUMENTS EVIDENCING OTHER NECESSARY CORPORATE
ACTION AND GOVERNMENTAL APPROVALS, IF ANY, WITH RESPECT TO THE TRANSACTION AND
EACH LOAN DOCUMENT TO WHICH IT IS OR IS TO BE A PARTY AND OF THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

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(C)                                A COPY OF A CERTIFICATE OF THE SECRETARY OF
STATE (OR OTHER SIMILAR DOCUMENT) OF THE JURISDICTION OF INCORPORATION OF EACH
NON-U.S. SUBSIDIARY THAT IS A SIGNIFICANT SUBSIDIARY, AND WHICH IS REQUIRED TO
ENTER INTO THE LOAN DOCUMENTS PURSUANT TO THIS SECTION 5.01(L) DATED NOT MORE
THAN 60 DAYS (OR SUCH LATER DATE AS AGREED TO BY THE ADMINISTRATIVE AGENT) AFTER
THE EFFECTIVE DATE, IN EACH CASE LISTING THE CHARTER OF SUCH SIGNIFICANT
SUBSIDIARY AND EACH AMENDMENT THERETO ON FILE IN HIS OFFICE AND CERTIFYING THAT
(A) SUCH CHARTER IS A TRUE AND CORRECT COPY THEREOF, (B) SUCH AMENDMENTS ARE THE
ONLY AMENDMENTS TO SUCH CHARTER ON FILE IN HIS OFFICE, (C) SUCH PERSON HAS PAID
ALL FRANCHISE TAXES TO THE DATE OF SUCH CERTIFICATE AND (D) SUCH PERSON IS DULY
INCORPORATED AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF THE
JURISDICTION OF ITS INCORPORATION.

 

(D)                               A CERTIFICATE OF EACH NON-U.S. SUBSIDIARY THAT
IS A SIGNIFICANT SUBSIDIARY AND WHICH IS REQUIRED TO ENTER INTO THE LOAN
DOCUMENTS PURSUANT TO THIS SECTION 5.01(L) DATED NOT MORE THAN 60 DAYS (OR SUCH
LATER DATE AS AGREED TO BY THE ADMINISTRATIVE AGENT) AFTER THE EFFECTIVE DATE
(THE STATEMENTS MADE IN WHICH CERTIFICATE SHALL BE TRUE ON AND AS OF SUCH DATE),
CERTIFYING AS TO (A) THE CHARTER OF SUCH PERSON BEING IN FULL FORCE AND EFFECT
(AND ATTACHING A TRUE AND CORRECT COPY THEREOF), (B) A TRUE AND CORRECT COPY OF
THE BYLAWS OF SUCH PERSON AS IN EFFECT ON THE DATE ON WHICH THE RESOLUTIONS
REFERRED TO IN CLAUSE (B) ABOVE WERE ADOPTED AND ON SUCH DATE OF DELIVERY,
(C) THE DUE INCORPORATION AND GOOD STANDING OR VALID EXISTENCE OF SUCH PERSON AS
A CORPORATION ORGANIZED UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION
AND THE ABSENCE OF ANY PROCEEDING FOR THE DISSOLUTION OR LIQUIDATION OF SUCH
PERSON, (D) THE COMPLETENESS AND ACCURACY OF THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THE LOAN DOCUMENTS AS THOUGH MADE ON AND AS OF SUCH DATE OF
DELIVERY (INCLUDING, WITH RESPECT TO ITSELF AND ITS ENTRY INTO THE NON-U.S.
GUARANTY, THE REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTIONS 4.01(C) AND
(D)) AND (E) THE ABSENCE OF ANY EVENT OCCURRING AND CONTINUING, OR RESULTING
FROM THE INITIAL EXTENSION OF CREDIT, THAT CONSTITUTES A DEFAULT.

 

(E)                                 A CERTIFICATE OF THE SECRETARY OF EACH
NON-U.S. SUBSIDIARY THAT IS A SIGNIFICANT SUBSIDIARY AND WHICH IS REQUIRED TO
ENTER INTO LOAN DOCUMENTS PURSUANT TO THIS SECTION 5.01(L) CERTIFYING THE NAMES
AND TRUE SIGNATURES OF THE OFFICERS OF SUCH PERSONS AUTHORIZED TO SIGN EACH LOAN
DOCUMENT TO WHICH IT IS OR IS TO BE A PARTY AND THE OTHER DOCUMENTS TO BE
DELIVERED HEREUNDER AND THEREUNDER.

 

(F)                                 A FAVORABLE OPINION OF LOCAL COUNSEL TO EACH
NON-U.S. SUBSIDIARY THAT IS A SIGNIFICANT SUBSIDIARY AND WHOSE SHARES ARE
PLEDGED PURSUANT TO THIS SECTION 5.01(L) OR WHICH EXECUTES THE NON-U.S.
GUARANTY.

 

(III)                               DELIVER TO THE ADMINISTRATIVE AGENT
COMPLETED SCHEDULES 4.01(B) AND 4.01(M) TO THIS AGREEMENT, WHICH SCHEDULES
CONFORM TO THE REQUIREMENTS SET FORTH IN THIS AGREEMENT.

 

SECTION 5.02  Negative Covenants.  So long as any as any Advance or any other
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Company will not, at any time:

 

(A)                                  LIENS, ETC.  CREATE, INCUR, ASSUME OR
SUFFER TO EXIST, OR PERMIT ANY OF ITS SUBSIDIARIES TO CREATE, INCUR, ASSUME OR
SUFFER TO EXIST, ANY LIEN ON OR WITH RESPECT TO ANY OF ITS PROPERTIES OF ANY
CHARACTER (INCLUDING, WITHOUT LIMITATION, ACCOUNTS) WHETHER NOW OWNED OR
HEREAFTER ACQUIRED, OR

 

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assign, or permit any of its Subsidiaries to assign any accounts or other right
to receive income, excluding, however, from the operation of the foregoing
restrictions, the following:

 

(I)                                     LIENS CREATED UNDER THE LOAN DOCUMENTS;

 

(II)                                  PERMITTED LIENS;

 

(III)                               LIENS EXISTING ON THE DATE HEREOF AND
DESCRIBED ON SCHEDULE 4.01(M) HERETO;

 

(IV)                              LIENS ARISING IN CONNECTION WITH CAPITALIZED
LEASES PERMITTED UNDER SECTION 5.02(B)(I)(C); PROVIDED THAT NO SUCH LIEN SHALL
EXTEND TO OR COVER ANY COLLATERAL OR ASSETS OTHER THAN THE ASSETS SUBJECT TO
SUCH CAPITALIZED LEASES;

 

(V)                                 PURCHASE MONEY LIENS UPON OR IN REAL
PROPERTY, EQUIPMENT AND OTHER FIXED ASSETS ACQUIRED OR HELD BY THE COMPANY OR
ANY OF ITS SUBSIDIARIES IN THE ORDINARY COURSE OF BUSINESS TO SECURE THE
PURCHASE PRICE OF SUCH PROPERTY, EQUIPMENT AND OTHER FIXED ASSETS OR TO SECURE
DEBT INCURRED SOLELY FOR THE PURPOSE OF FINANCING THE ACQUISITION OF ANY SUCH
PROPERTY OR EQUIPMENT TO BE SUBJECT TO SUCH LIENS, OR LIENS EXISTING ON ANY SUCH
PROPERTY OR EQUIPMENT AT THE TIME OF ACQUISITION (OTHER THAN ANY SUCH LIENS
CREATED IN CONTEMPLATION OF SUCH ACQUISITION THAT DO NOT SECURE THE PURCHASE
PRICE), OR EXTENSIONS, RENEWALS OR REPLACEMENTS OF ANY OF THE FOREGOING FOR THE
SAME OR A LESSER AMOUNT; PROVIDED, HOWEVER, THAT NO SUCH LIEN SHALL EXTEND TO OR
COVER ANY PROPERTY OTHER THAN THE PROPERTY, EQUIPMENT AND OTHER FIXED ASSETS
BEING ACQUIRED, AND NO SUCH EXTENSION, RENEWAL OR REPLACEMENT SHALL EXTEND TO OR
COVER ANY PROPERTY NOT THERETOFORE SUBJECT TO THE LIEN BEING EXTENDED, RENEWED
OR REPLACED; AND PROVIDED, FURTHER THAT THE AGGREGATE PRINCIPAL AMOUNT OF THE
DEBT SECURED BY LIENS PERMITTED BY THIS CLAUSE (V) SHALL NOT EXCEED THE AMOUNT
PERMITTED UNDER SECTION 5.02(B)(I)(G) AT ANY TIME OUTSTANDING AND THAT ANY SUCH
DEBT SHALL NOT OTHERWISE BE PROHIBITED BY THE TERMS OF THE LOAN DOCUMENTS;

 

(VI)                              THE FILING OF FINANCING STATEMENTS SOLELY AS A
PRECAUTIONARY MEASURE IN CONNECTION WITH OPERATING LEASES;

 

(VII)                           OTHER LIENS SECURING DEBT OUTSTANDING IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $10,000,000;

 

(VIII)                        THE REPLACEMENT, EXTENSION OR RENEWAL OF ANY LIEN
PERMITTED BY CLAUSE (III) ABOVE UPON OR IN THE SAME PROPERTY THERETOFORE SUBJECT
THERETO OR THE REPLACEMENT, EXTENSION OR RENEWAL (WITHOUT INCREASE IN THE AMOUNT
OR CHANGE IN ANY DIRECT OR CONTINGENT OBLIGOR) OF THE DEBT SECURED THEREBY;

 

(IX)                                LIENS IN RESPECT OF DEBT PERMITTED BY
SECTION 5.02(B)(I)(F), PROVIDED THAT SUCH LIENS ARE GRANTED ON ASSETS OWNED
SOLELY BY THE OBLIGOR OF SUCH DEBT; AND

 

(X)                                   RIGHTS GRANTED TO THE WELSH DEVELOPMENT
AGENCY IN CONNECTION WITH THE ACQUISITION OF CERTAIN FACILITIES LOCATED AT
DUFFRYN DRIVE, NEWPORT, WALES, IN REGARDS TO THE SHARING OF PROFITS ON THE
FUTURE SALE OF AND RELATED RESTRICTIONS ON SUCH FACILITIES.

 

(B)                                 DEBT.  CREATE, INCUR, ASSUME OR SUFFER TO
EXIST, OR PERMIT ANY OF ITS SUBSIDIARIES TO CREATE, INCUR, ASSUME OR SUFFER TO
EXIST, ANY DEBT OTHER THAN:

 

(I)                                     IN THE CASE OF THE LOAN PARTIES OR ANY
OF THEIR SUBSIDIARIES,

 

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(A)                              DEBT UNDER THE LOAN DOCUMENTS;

 

(B)                                DEBT TO A LOAN PARTY OR ANY SUBSIDIARY OF A
LOAN PARTY, PROVIDED HOWEVER THAT ANY SUCH DEBT OWED BY A NON-U.S. SUBSIDIARY
SHALL BE USED ONLY (1) TO FUND WORKING CAPITAL REQUIREMENTS OR FOR OTHER GENERAL
CORPORATE PURPOSES OF SUCH NON-U.S. SUBSIDIARY (INCLUDING, WITHOUT LIMITATION,
CAPITAL EXPENDITURES), OR (2) FOR PERMITTED ACQUISITIONS TO THE EXTENT ALLOWED
UNDER SECTIONS 5.02(F)(V) AND 5.02(F)(IX) HEREOF;

 

(C)                                CAPITALIZED LEASES, PROVIDED, HOWEVER THAT,
AT ANY TIME, THE SUM OF THE AGGREGATE OUTSTANDING PRINCIPAL COMPONENT OF ALL
CAPITALIZED LEASES, AND THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL DEBT
PERMITTED UNDER SECTION 5.02(B)(I)(G) SHALL NOT EXCEED THE HIGHER OF $75,000,000
OR 5% OF NET TANGIBLE ASSETS OF THE COMPANY AND ITS SUBSIDIARIES ON A
CONSOLIDATED BASIS (DETERMINED AS OF THE END OF THE FISCAL QUARTER IMMEDIATELY
PRECEDING THE DATE OF DETERMINATION);

 

(D)                               DEBT UNDER THE SUBORDINATED NOTES, OR ANY DEBT
EXTENDING THE MATURITY OF, OR REFUNDING, REFINANCING OR REPLACING, IN WHOLE OR
IN PART, THE SUBORDINATED NOTES; PROVIDED, HOWEVER, THAT (A) THE AGGREGATE
PRINCIPAL AMOUNT OF SUCH EXTENDED, REFUNDING, REFINANCING OR REPLACEMENT DEBT
SHALL NOT BE INCREASED ABOVE THE PRINCIPAL AMOUNT THEREOF AND THE PREMIUM, IF
ANY, THEREON OUTSTANDING IMMEDIATELY PRIOR TO SUCH EXTENSION, REFUNDING,
REFINANCING OR REPLACEMENT, (B) SUCH EXTENDED, REFUNDING, REFINANCING OR
REPLACEMENT DEBT SHALL NOT MATURE PRIOR TO THE STATED MATURITY DATE OR MANDATORY
REDEMPTION DATE OF THE SUBORDINATED NOTES, AND (C) SUCH EXTENDED, REFUNDED,
REFINANCED OR REPLACED DEBT SHALL BE SUBORDINATED IN RIGHT OF PAYMENT OR
OTHERWISE TO THE OBLIGATIONS HEREUNDER AT LEAST TO THE SAME EXTENT AS THE
SUBORDINATED NOTES, AND THE OTHER TERMS TAKEN AS A WHOLE GOVERNING SUCH
EXTENDED, REFUNDED, REFINANCED OR REPLACED DEBT SHALL NOT BE MATERIALLY LESS
FAVORABLE TO THE COMPANY THAN THOSE GOVERNING THE SUBORDINATED NOTES;

 

(E)                                 (I) DEBT THAT IS SUBORDINATED IN RIGHT OF
PAYMENT OR OTHERWISE TO THE OBLIGATIONS HEREUNDER (THE “OTHER SUBORDINATED
DEBT”) AT LEAST TO THE SAME EXTENT AS THE SUBORDINATED NOTES, AND THE OTHER
TERMS TAKEN AS A WHOLE GOVERNING SUCH DEBT SHALL NOT BE MATERIALLY LESS
FAVORABLE TO THE COMPANY THAN THOSE IN THE SUBORDINATED NOTES, AND (II) ANY DEBT
EXTENDING THE MATURITY OF, OR REFUNDING, REFINANCING OR REPLACING, IN WHOLE OR
IN PART, THE OTHER SUBORDINATED DEBT; PROVIDED, HOWEVER, THAT SUCH EXTENDED,
REFUNDING, REFINANCING OR REPLACEMENT DEBT SHALL BE SUBORDINATED IN RIGHT OF
PAYMENT OR OTHERWISE TO THE OBLIGATIONS HEREUNDER AT LEAST TO THE SAME EXTENT AS
THE SUBORDINATED NOTES, AND THE OTHER TERMS TAKEN AS A WHOLE GOVERNING SUCH
EXTENDED, REFUNDED, REFINANCED OR REPLACED DEBT SHALL NOT BE MATERIALLY LESS
FAVORABLE TO THE COMPANY THAN THOSE GOVERNING THE APPLICABLE OTHER SUBORDINATED
DEBT AND PROVIDED, THAT ANY DEBT PERMITTED UNDER 5.02(B)(I)(E)(I) AND (II) SHALL
NOT MATURE PRIOR TO THE STATED MATURITY DATE OR MANDATORY REDEMPTION DATE OF THE
SUBORDINATED NOTES, AND PROVIDED, THAT THE TOTAL AMOUNT OF DEBT UNDER
5.02(B)(I)(D) AND (E) SHALL NOT AT ANY TIME EXCEED 50% OF THE COMPANY’S TOTAL
CAPITALIZATION;

 

(F)                                 DEBT SECURED BY RECEIVABLES, PROVIDED,
HOWEVER THAT, AT ANY TIME, THE SUM OF THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT
OF ALL DEBT SECURED BY RECEIVABLES AND THE AGGREGATE VALUE OF ALL THEN
OUTSTANDING RECEIVABLES SOLD OR SECURITIZED AS PERMITTED UNDER
SECTION 5.02(E)(VII), SHALL NOT EXCEED THE HIGHER OF $75,000,000 OR 5% OF NET
TANGIBLE ASSETS OF THE COMPANY AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS

 

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(DETERMINED AS OF THE END OF THE FISCAL QUARTER IMMEDIATELY PRECEDING THE DATE
OF DETERMINATION); AND

 

(G)                                OTHER DEBT, SUBJECT TO THE PROVISO IN
SECTION 5.02(B)(I)(C) ABOVE.

 

(II)                                  IN THE CASE OF THE COMPANY AND ANY OF ITS
SUBSIDIARIES, ENDORSEMENT OF NEGOTIABLE INSTRUMENTS FOR DEPOSIT OR COLLECTION OR
SIMILAR TRANSACTIONS IN THE ORDINARY COURSE OF BUSINESS.

 

(C)                                  CHANGE IN NATURE OF BUSINESS.  ENGAGE, OR
PERMIT ANY OF ITS SUBSIDIARIES TO ENGAGE IN ANY SIGNIFICANT BUSINESS OTHER THAN
THE MANUFACTURE, SALE AND DISTRIBUTION OF SEMICONDUCTORS OR PRODUCTS RELATED TO
SEMICONDUCTORS OR ANY BUSINESS THAT IS A REASONABLE EXTENSION OF THE BUSINESS AS
CURRENTLY CONDUCTED BY THE COMPANY OR ITS SUBSIDIARIES.

 

(D)                                 MERGERS, ETC.  MERGE INTO OR CONSOLIDATE
WITH ANY PERSON OR PERMIT ANY PERSON TO MERGE INTO IT, OR PERMIT ANY OF ITS
SUBSIDIARIES TO DO SO, EXCEPT THAT:

 

(I)                                     THE COMPANY OR ANY SUBSIDIARY OF THE
COMPANY MAY MERGE INTO OR CONSOLIDATE WITH ANY PERSON PROVIDED, HOWEVER, THAT
(X) IMMEDIATELY PRIOR TO SUCH MERGER OR CONSOLIDATION SUCH OTHER PERSON CONDUCTS
A BUSINESS THAT IS SUBSTANTIALLY SIMILAR TO THE BUSINESS CURRENTLY CONDUCTED BY
THE COMPANY AND ITS SUBSIDIARIES AND THE SURVIVING PERSON IS THE COMPANY OR A
SUBSIDIARY OF THE COMPANY AND (Y) AFTER GIVING EFFECT TO SUCH MERGER OR
CONSOLIDATION AND ANY INVESTMENTS PERMITTED UNDER SECTION 5.02(F)(V), (I) THE
AGGREGATE CASH PORTION OF THE PURCHASE PRICE FOR ALL SUCH MERGERS AND
CONSOLIDATIONS AND SUCH INVESTMENTS DOES NOT EXCEED 25% OF THE COMPANY’S TOTAL
CAPITALIZATION AND (II) NET CASH SHALL NOT BE LESS THAN $275,000,000, EXCEPT FOR
ANY MERGER OR CONSOLIDATION IN WHICH THE CONSIDERATION CONSISTS EXCLUSIVELY OF
EQUITY INTERESTS IN THE COMPANY;

 

(II)                                  ANY SUBSIDIARY OF THE COMPANY MAY MERGE
INTO OR CONSOLIDATE WITH THE COMPANY SO LONG AS THE SURVIVING PERSON IS THE
COMPANY;

 

(III)                               ANY SUBSIDIARY OF THE COMPANY MAY MERGE INTO
OR CONSOLIDATE WITH A U.S. SUBSIDIARY, SO LONG AS THE SURVIVING PERSON IS A
WHOLLY-OWNED U.S. SUBSIDIARY OF THE COMPANY;

 

(IV)                              ANY NON-U.S. SUBSIDIARY MAY MERGE INTO OR
CONSOLIDATE WITH ANY OTHER NON-U.S. SUBSIDIARY PROVIDED THAT IF ANY NON-U.S.
GUARANTOR IS A PARTY TO SUCH MERGER OR CONSOLIDATION, THE SURVIVING PERSON SHALL
BE OR BECOME A NON-U.S. GUARANTOR SUBJECT TO THE PROVISO TO SECTION 5.01(J); OR

 

(V)                                 ANY SUBSIDIARY OF THE COMPANY FORMED SOLELY
TO EFFECTUATE A SALE OR TRANSFER OF ASSETS PERMITTED BY SECTION 5.02(E) MAY
MERGE INTO OR CONSOLIDATE WITH ANY PERSON IN ORDER TO EFFECT SUCH SALE OR
TRANSFER.

 

provided, however, that in each of (i) through (v) above, immediately before
such merger or consolidation, and when considered on a Pro Forma Basis, no
Default shall have occurred and be continuing.

 

(E)                                  SALES, ETC., OF ASSETS.  SELL, LEASE,
TRANSFER OR OTHERWISE DISPOSE OF, OR PERMIT ANY OF ITS SUBSIDIARIES TO SELL,
LEASE, TRANSFER OR OTHERWISE DISPOSE OF, ANY ASSETS, OR GRANT ANY OPTION OR
OTHER RIGHT TO PURCHASE, LEASE OR OTHERWISE ACQUIRE ANY ASSETS, EXCEPT:

 

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(I)                                     SALES OF INVENTORY (INCLUDING, WITHOUT
LIMITATION, SALES OF OBSOLETE INVENTORY) IN THE ORDINARY COURSE OF ITS BUSINESS,

 

(II)                                  IN A TRANSACTION PERMITTED BY
SECTION 5.02(D) OR FOR TRANSFERS OF ASSETS BETWEEN THE COMPANY AND ITS
SUBSIDIARIES PERMITTED BY SECTION 5.02(F),

 

(III)                               SALES, TRADE-INS OR DISPOSITIONS OF USED
EQUIPMENT FOR FAIR VALUE IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICES,

 

(IV)                              SALES OF ASSETS LISTED ON
SCHEDULE 5.02(E)(IV),

 

(V)                                 LICENSES OF TECHNOLOGY IN THE ORDINARY
COURSE OF BUSINESS,

 

(VI)                              (OTHER THAN CURRENT ASSETS) IN AN AGGREGATE
AMOUNT NOT TO EXCEED 15% OF THE TOTAL TANGIBLE NET WORTH OF THE COMPANY AND ITS
SIGNIFICANT SUBSIDIARIES (ON A CONSOLIDATED BASIS) AS DETERMINED AT THE TIME OF
EACH SUCH PROPOSED SALE; PROVIDED THAT (X) SUCH SALES ARE FOR FAIR MARKET VALUE
AND (Y) NOT LESS THAN 85% OF THE CONSIDERATION RECEIVED FROM ANY SUCH SALE
CONSISTS OF CASH OR DEBT ASSUMED BY THE PURCHASER, AND

 

(VII)                           SALES OR SECURITIZATION OF RECEIVABLES, SUBJECT
TO THE PROVISO IN SECTION 5.02(B)(I)(F) ABOVE.

 

(F)                                    INVESTMENTS.  MAKE OR HOLD, OR PERMIT ANY
OF ITS SUBSIDIARIES TO MAKE OR HOLD, ANY INVESTMENT OTHER THAN:

 

(I)                                     EQUITY INVESTMENTS BY THE COMPANY AND
ITS WHOLLY-OWNED SUBSIDIARIES IN SUBSIDIARIES OUTSTANDING ON THE DATE HEREOF AND
IN NEWLY-FORMED SUBSIDIARIES CREATED FOR THE PURPOSES OF EFFECTING A MERGER,
CONSOLIDATION, ASSET SALE OR INVESTMENT PERMITTED HEREUNDER;

 

(II)                                  ADDITIONAL INVESTMENTS BY THE COMPANY IN
(1) U.S. GUARANTORS OR NON-U.S. GUARANTORS, OR (2) WHOLLY-OWNED U.S.
SUBSIDIARIES OTHER THAN U.S. GUARANTORS, OR (3) NON-U.S. SUBSIDIARIES OF THE
COMPANY, PROVIDED, HOWEVER, THAT THE AGGREGATE AMOUNT INVESTED UNDER CLAUSES (2)
AND (3) ABOVE FROM THE DATE HEREOF IS NOT TO EXCEED 15% OF THE TOTAL TANGIBLE
NET WORTH OF THE COMPANY AND ITS SUBSIDIARIES (ON A CONSOLIDATED BASIS) AS
DETERMINED AT THE TIME OF EACH SUCH PROPOSED INVESTMENT;

 

(III)                               INVESTMENTS CONSISTING OF DEBT TO THE
COMPANY PERMITTED BY SECTION 5.02(B)(I)(B);

 

(IV)                              INVESTMENTS BY THE COMPANY AND ITS
SUBSIDIARIES IN DEMAND DEPOSIT ACCOUNTS MAINTAINED IN THE ORDINARY COURSE OF
BUSINESS WITH ANY PERSON OF THE TYPE REFERRED TO IN CLAUSE (I), (II), (III),
(IV) OR (V) OF THE DEFINITION OF “ELIGIBLE ASSIGNEE” AND IN CASH EQUIVALENTS;

 

(V)                                 INVESTMENTS BY THE COMPANY OR A SUBSIDIARY
OF THE COMPANY IN PERMITTED ACQUISITIONS, PROVIDED, HOWEVER, THAT AFTER MAKING
SUCH PERMITTED ACQUISITIONS AND GIVING EFFECT TO ALL MERGERS AND ACQUISITIONS
PERMITTED UNDER SECTION 5.02(D)(I) (A) THE AGGREGATE CASH PORTION OF THE
PURCHASE PRICE FOR ALL PERMITTED ACQUISITIONS AND SUCH MERGERS AND ACQUISITIONS
DOES NOT EXCEED 25% OF THE COMPANY’S TOTAL CAPITALIZATION, (B) NET CASH SHALL
NOT BE LESS THAN $275,000,000 AND (C) IMMEDIATELY BEFORE AND AFTER GIVING EFFECT
THERETO, NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR WOULD RESULT
THEREFROM;

 

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(VI)                              INVESTMENTS DESCRIBED ON SCHEDULE 5.02(F)(VI)
HERETO (WHICH SHALL SET FORTH AS OF THE DATE HEREOF THE AMOUNT, OBLIGOR OR
ISSUER AND MATURITY, IF ANY, THEREOF);

 

(VII)                           EQUITY INVESTMENTS RECEIVED IN CONSIDERATION BY
THE COMPANY OR ANY SUBSIDIARY FOR THE LICENSING OF TECHNOLOGY OWNED OR LICENSED
BY THE COMPANY OR SUCH SUBSIDIARY, RESPECTIVELY, IN THE ORDINARY COURSE OF
BUSINESS ON A BASIS CONSISTENT WITH PAST PRACTICE OR CONSISTENT WITH EVOLVING
INDUSTRY PRACTICE;

 

(VIII)                        LOANS AND ADVANCES TO EMPLOYEES IN THE ORDINARY
COURSE OF THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES AS PRESENTLY
CONDUCTED IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $10,000,000 AT ANY TIME
OUTSTANDING; AND

 

(IX)                                OTHER INVESTMENTS, PROVIDED THAT AFTER
MAKING ANY SUCH INVESTMENT NET CASH SHALL NOT BE LESS THAN $275,000,000, EXCEPT
WHERE THE CONSIDERATION FOR SUCH INVESTMENT CONSISTS EXCLUSIVELY OF EQUITY
INTERESTS IN THE COMPANY, AND PROVIDED FURTHER, IN THE CASE OF INVESTMENTS
REFERRED TO IN CLAUSE (I) OF THE DEFINITION THEREOF, THAT THE COMPANY SHALL
RETAIN CONTROL OF THE ENTITY IN WHICH THE INVESTMENTS ARE MADE, EXCEPT WHERE THE
PURPOSE OF THE INVESTMENT IS TO CREATE A JOINT VENTURE TO FURTHER THE PERMITTED
BUSINESS.

 

(G)                                 RESTRICTED PAYMENTS.  DECLARE OR PAY ANY
DIVIDENDS, PURCHASE, REDEEM, RETIRE, DEFEASE OR OTHERWISE ACQUIRE FOR VALUE ANY
OF ITS EQUITY INTERESTS OR SUBORDINATED DEBT NOW OR HEREAFTER OUTSTANDING,
RETURN ANY CAPITAL TO ITS STOCKHOLDERS, PARTNERS OR MEMBERS (OR THE EQUIVALENT
PERSONS THEREOF) AS SUCH, OR PERMIT ANY OF ITS SUBSIDIARIES TO PURCHASE, REDEEM,
RETIRE, DEFEASE OR OTHERWISE ACQUIRE FOR VALUE EQUITY INTERESTS OR SUBORDINATED
DEBT OF THE COMPANY OR TO ISSUE OR SELL ANY EQUITY INTERESTS OR SUBORDINATED
DEBT OF SUCH SUBSIDIARY (OTHER THAN SALES OF EQUITY INTERESTS OF SUCH SUBSIDIARY
TO JOINT VENTURE PARTNERS IN CONNECTION WITH THE FORMATION OF A JOINT VENTURE TO
FURTHER THE PERMITTED BUSINESS), EXCEPT THAT:

 

(I)                                     THE COMPANY MAY (A) DECLARE AND PAY
DIVIDENDS AND DISTRIBUTIONS PAYABLE ONLY IN COMMON STOCK OF THE COMPANY, (B)
PURCHASE, REDEEM, RETIRE, DEFEASE OR OTHERWISE ACQUIRE SHARES OF ITS CAPITAL
STOCK OR SUBORDINATED DEBT FOR CASH PROVIDED, HOWEVER, THAT THE AGGREGATE AMOUNT
OF CASH USED FOR SUCH PURCHASES, REDEMPTIONS, RETIREMENTS, DEFEASANCES AND
ACQUISITIONS UNDER THIS CLAUSE (B) FROM THE DATE HEREOF SHALL NOT EXCEED 35% OF
THE COMPANY’S TANGIBLE NET WORTH AND PROVIDED FURTHER THAT (X) AT THE TIME OF
ANY PURCHASE, REDEMPTION, RETIREMENT, DEFEASANCE OR ACQUISITION UNDER THIS
CLAUSE (B) OR AS A RESULT OF ANY SUCH TRANSACTION, (1) NO DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, (2) NET CASH SHALL NOT BE LESS THAN $275,000,000,
AND (3) TANGIBLE NET WORTH SHALL NOT BE LESS THAN $500,000,000, (Y) ON THE DATE
OF ANY SUCH TRANSACTION, AND FOR A PERIOD OF 30 DAYS THEREAFTER, THERE WILL BE
NO OUTSTANDING BORROWINGS AND ALL LETTERS OF CREDIT WILL BE CASH COLLATERALIZED
BY CASH DEPOSITS IN THE L/C CASH COLLATERAL ACCOUNT IN AN AMOUNT NOT LESS THAN
100% OF THE FACE AMOUNT OF ALL LETTERS OF CREDIT, AND (Z) THE PURCHASE PRICE FOR
ANY SUCH ACQUISITION OF SUBORDINATED DEBT WILL BE AT A DISCOUNT TO PAR AND (C)
REDEEM SUBORDINATED DEBT IN CONNECTION WITH A CONVERSION OF ANY ONE OR MORE
SERIES OF SUBORDINATED DEBT TO EQUITY INTERESTS OF THE COMPANY, PROVIDED THAT
HOLDERS OF NOT LESS THAN 75% THE PRINCIPAL AMOUNT OF SUCH SUBORDINATED DEBT (IN
THE AGGREGATE FOR ALL SERIES REDEEMED AT SUCH TIME) ELECT TO CONVERT SUCH
SUBORDINATED DEBT TO EQUITY INTERESTS AND PROVIDED, FURTHER, THAT THE AGGREGATE
AMOUNT OF CASH USED FOR SUCH REDEMPTIONS UNDER THIS CLAUSE (C) FROM THE DATE
HEREOF SHALL NOT EXCEED 35% OF THE COMPANY’S TANGIBLE NET WORTH AND THAT AFTER
GIVING EFFECT TO SUCH REDEMPTION NET CASH SHALL NOT BE LESS THAN $275,000,000;

 

(II)                                  ANY SUBSIDIARY OF THE COMPANY MAY (A)
DECLARE AND PAY CASH DIVIDENDS TO THE COMPANY, (B) DECLARE AND PAY CASH
DIVIDENDS TO ANY OTHER WHOLLY OWNED U.S. SUBSIDIARY

 

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OF THE COMPANY OF WHICH IT IS A SUBSIDIARY AND (C) ACCEPT CAPITAL CONTRIBUTIONS
FROM ITS PARENT TO THE EXTENT PERMITTED UNDER SECTION 5.02(F); AND

 

(III)                               THE COMPANY MAY ADDITIONALLY REFUND,
REFINANCE OR REPLACE SUBORDINATED DEBT AS PERMITTED BY SECTION 5.02(B)(I).

 

(H)                                 ACCOUNTING CHANGES.  MAKE OR PERMIT, OR
PERMIT ANY OF ITS SUBSIDIARIES TO MAKE OR PERMIT, ANY CHANGE IN (I) ACCOUNTING
POLICIES OR REPORTING PRACTICES FOR CONSOLIDATED FINANCIAL STATEMENTS, EXCEPT AS
REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR TO THE EXTENT SUCH
CHANGE IS TO AN ALTERNATIVE PRINCIPLE WHICH IN THE JUDGMENT OF THE COMPANY’S
INDEPENDENT ACCOUNTANT IS PREFERABLE UNDER THE CIRCUMSTANCES IN ACCORDANCE WITH
RULE 10-01 OF REGULATION S-X PROMULGATED BY THE SECURITIES AND EXCHANGE
COMMISSION OR (II) FISCAL YEAR.

 

(I)                                     PREPAYMENTS, ETC., OF DEBT.  (I)  EXCEPT
TO THE EXTENT NOT PROHIBITED ELSEWHERE IN THIS AGREEMENT, PREPAY, REDEEM,
PURCHASE, DEFEASE OR OTHERWISE SATISFY PRIOR TO THE SCHEDULED MATURITY THEREOF
IN ANY MANNER, OR MAKE ANY PAYMENT IN VIOLATION OF ANY SUBORDINATION TERMS OF,
ANY SUBORDINATED DEBT REFERRED TO IN SECTIONS 5.02(B)(I)(D) AND (E), OR (II)
AMEND, MODIFY OR CHANGE ANY TERM OR CONDITION OF ANY SUBORDINATED DEBT REFERRED
TO IN SECTIONS 5.02(B)(I)(D) AND (E) WHERE SUCH AMENDMENT, MODIFICATION OR
CHANGE WOULD ACCELERATE THE PAYMENT OF ANY PRINCIPAL AMOUNT OF SUCH SUBORDINATED
DEBT OR WOULD ALTER THE TERMS OF ITS SUBORDINATION (INCLUDING ANY DEFINITIONS
USED THEREIN) OR SUBJECT ANY OBLIGOR IN RESPECT OF SUCH SUBORDINATED DEBT TO
MORE BURDENSOME OR ADDITIONAL COVENANTS OR EVENTS OF DEFAULT, OR PERMIT ANY OF
ITS SUBSIDIARIES TO DO ANY OF THE FOREGOING.

 

(J)                                     NEGATIVE PLEDGE.  ENTER INTO OR SUFFER
TO EXIST, OR PERMIT ANY OF ITS SUBSIDIARIES TO ENTER INTO OR SUFFER TO EXIST,
ANY AGREEMENT PROHIBITING OR CONDITIONING THE CREATION OR ASSUMPTION OF ANY LIEN
UPON ANY OF ITS PROPERTY OR ASSETS OTHER THAN (I) IN FAVOR OF THE SECURED
PARTIES, (II) IN CONNECTION WITH ANY DEBT SECURED BY PURCHASE MONEY LIENS AND
CAPITALIZED LEASES, TO THE EXTENT PERMITTED UNDER SECTION 5.02(A)(V) AND
SECTION 5.02(B)(I)(C), RESPECTIVELY, AND SOLELY TO THE EXTENT SUCH AGREEMENT IS
LIMITED TO THE PROPERTY COVERED BY SUCH LIENS, OR (III) IN FAVOR OF THE WELSH
DEVELOPMENT AGENCY ON CERTAIN FACILITIES LOCATED AT DUFFRYN DRIVE, NEWPORT,
WALES.

 

(K)                                  OTHER TRANSACTIONS.  ENGAGE, OR PERMIT ANY
OF ITS SUBSIDIARIES TO ENGAGE, IN ANY TRANSACTION INVOLVING COMMODITY OPTIONS,
OR FUTURES CONTRACTS OR ANY SIMILAR SPECULATIVE TRANSACTIONS (INCLUDING, WITHOUT
LIMITATION, TAKE-OR-PAY CONTRACTS), BUT EXCLUDING HEDGE AGREEMENTS DESIGNED TO
MANAGE INTEREST RATE OR FOREIGN EXCHANGE RATE RISK, CONSISTENT WITH PRUDENT
BUSINESS PRACTICE.

 

SECTION 5.03  Reporting Requirements.  So long as any Obligation of any Loan
Party under or in respect of any Loan Document shall remain unpaid, any Letter
of Credit shall be outstanding or any Lender Party shall have any Commitment
hereunder, the Company will furnish to the Administrative Agent and the Lender
Parties:

 

(A)                                  DEFAULT NOTICE.  AS SOON AS POSSIBLE AND IN
ANY EVENT WITHIN FIVE DAYS AFTER THE OCCURRENCE OF EACH DEFAULT CONTINUING ON
THE DATE OF SUCH STATEMENT, A STATEMENT OF A RESPONSIBLE OFFICER SETTING FORTH
DETAILS OF SUCH DEFAULT AND THE ACTION THAT THE BORROWER HAS TAKEN AND PROPOSED
TO TAKE WITH RESPECT THERETO;

 

(B)                                 QUARTERLY FINANCIALS.  AS SOON AS AVAILABLE
AND IN ANY EVENT WITHIN 45 DAYS AFTER THE END OF EACH FISCAL QUARTER, COMMENCING
WITH THE QUARTER ENDING ON OR ABOUT SEPTEMBER 30, 2003, A CONSOLIDATED BALANCE
SHEET OF THE COMPANY AND ITS SUBSIDIARIES, IN EACH CASE AS OF THE END OF SUCH
QUARTER AND CONSOLIDATED STATEMENTS OF INCOME AND, IN THE CASE OF THE FIRST
THREE FISCAL QUARTERS OF EACH FISCAL YEAR,  CASH FLOW OF THE COMPANY AND ITS
SUBSIDIARIES, IN EACH CASE FOR THE PERIOD COMMENCING AT THE END

 

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OF THE PREVIOUS QUARTER AND ENDING WITH THE END OF SUCH QUARTER AND CONSOLIDATED
STATEMENTS OF INCOME AND CASH FLOW OF THE COMPANY AND ITS SUBSIDIARIES FOR THE
PERIOD COMMENCING AT THE END OF THE PREVIOUS FISCAL YEAR AND ENDING WITH THE END
OF SUCH QUARTER, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE
CORRESPONDING FIGURES FOR THE CORRESPONDING MONTH AND FISCAL YEAR-TO-DATE PERIOD
OF THE PRECEDING FISCAL YEAR AND THE CORRESPONDING FIGURES FOR THE CORRESPONDING
QUARTER AND FISCAL YEAR-TO-DATE PERIOD OF THE ANNUAL FORECAST PREVIOUSLY
DELIVERED PURSUANT TO SECTION 5.03(E), ALL IN REASONABLE DETAIL AND DULY
CERTIFIED BY A RESPONSIBLE OFFICER, TOGETHER WITH (I) A CERTIFICATE OF A
RESPONSIBLE OFFICER STATING THAT NO DEFAULT HAS OCCURRED AND IS CONTINUING OR,
IF A DEFAULT HAS OCCURRED AND IS CONTINUING, A STATEMENT AS TO THE NATURE
THEREOF AND THE ACTION THAT THE COMPANY HAS TAKEN AND PROPOSES TO TAKE WITH
RESPECT THERETO; PROVIDED THAT TO THE EXTENT THAT THE COMPANY MODIFIES THE
PRESENTATION OF THE FINANCIAL STATEMENTS REFERRED TO HEREIN TO ELIMINATE THE
LINE ITEM “OPERATING PROFIT (LOSS)”, THEREAFTER IN ADDITION TO PROVIDING THE
FINANCIAL STATEMENTS REFERRED TO HEREIN THE COMPANY SHALL ALSO SET FORTH IN THE
CERTIFICATE TO BE DELIVERED IN ACCORDANCE WITH SECTION 5.03(C) FOR EACH FISCAL
QUARTER THE OPERATING INCOME AND EXPENSES FOR THE RESPECTIVE FISCAL QUARTER
COMPUTED ON THE SAME BASIS AS THE CALCULATION OF OPERATING PROFIT (LOSS) AS OF
THE DATE HEREOF.

 

(C)                                  COMPLIANCE CERTIFICATES.  TOGETHER WITH THE
QUARTERLY FINANCIAL STATEMENTS REFERRED TO IN SECTION 5.03(B) FOR THE QUARTERS
ENDING MARCH, JUNE, SEPTEMBER AND DECEMBER IN EACH FISCAL YEAR AND THE ANNUAL
FINANCIAL STATEMENTS REFERRED TO IN SECTION 5.03(D), A CERTIFICATE SIGNED BY A
RESPONSIBLE OFFICER IN THE FORM OF EXHIBIT G.

 

(D)                                 ANNUAL FINANCIALS.  AS SOON AS AVAILABLE AND
IN ANY EVENT WITHIN 90 DAYS AFTER THE END OF EACH FISCAL YEAR, A COPY OF THE
ANNUAL AUDIT REPORT FOR SUCH YEAR FOR THE COMPANY AND ITS SUBSIDIARIES,
INCLUDING THEREIN CONSOLIDATED BALANCE SHEETS OF THE COMPANY AND ITS
SUBSIDIARIES, IN EACH CASE AS OF THE END OF SUCH FISCAL YEAR, AND CONSOLIDATED
STATEMENTS OF INCOME AND CASH FLOW OF THE COMPANY AND ITS SUBSIDIARIES AND OF
THE COMPANY AND ITS SUBSIDIARIES, IN EACH CASE FOR THE PERIOD COMMENCING AT THE
END OF THE PREVIOUS FISCAL YEAR AND ENDING WITH THE END OF SUCH FISCAL YEAR,
ACCOMPANIED AS TO SUCH CONSOLIDATED STATEMENTS, BY AN UNQUALIFIED OPINION OF
PRICEWATERHOUSECOOPERS LLP OR OTHER INDEPENDENT PUBLIC ACCOUNTANTS OF RECOGNIZED
STANDING ACCEPTABLE TO THE REQUIRED LENDERS, TOGETHER WITH (I)  A COPY OF ANY
MANAGEMENT LETTER PREPARED BY SUCH ACCOUNTING FIRM WITH RESPECT TO SUCH FISCAL
YEAR AND DISTRIBUTED TO THE COMPANY, (II) A CERTIFICATE OF A RESPONSIBLE OFFICER
STATING THAT NO DEFAULT HAS OCCURRED AND IS CONTINUING OR, IF A DEFAULT HAS
OCCURRED AND IS CONTINUING, A STATEMENT AS TO THE NATURE THEREOF AND THE ACTION
THAT THE COMPANY HAS TAKEN AND PROPOSES TO TAKE WITH RESPECT THERETO, (III) IN
THE EVENT OF ANY CHANGE FROM GAAP IN THE GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES USED IN THE PREPARATION OF SUCH FINANCIAL STATEMENTS, A STATEMENT OF
RECONCILIATION CONFORMING SUCH FINANCIAL STATEMENTS TO GAAP AND (IV) A
CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER IN THE FORM OF EXHIBIT G.

 

(E)                                  ANNUAL FORECASTS.  AS SOON AS AVAILABLE AND
IN ANY EVENT WITHIN 30 DAYS AFTER THE END OF EACH FISCAL YEAR, FORECASTS
PREPARED BY MANAGEMENT OF THE COMPANY, IN FORM SATISFACTORY TO THE
ADMINISTRATIVE AGENT, OF CONSOLIDATED BALANCE SHEETS, INCOME STATEMENTS AND CASH
FLOW STATEMENTS ON A QUARTERLY BASIS FOR THE FISCAL YEAR FOLLOWING SUCH FISCAL
YEAR THEN ENDED.

 

(F)                                    LITIGATION.  PROMPTLY AFTER THE
COMMENCEMENT THEREOF AND SERVICE OR OTHER NOTIFICATION TO THE COMPANY, NOTICE OF
ALL ACTIONS, SUITS, INVESTIGATIONS, LITIGATION AND PROCEEDINGS BEFORE ANY COURT
OR GOVERNMENTAL DEPARTMENT, COMMISSION, BOARD, BUREAU, AGENCY OR
INSTRUMENTALITY, DOMESTIC OR FOREIGN, AFFECTING ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES OF THE TYPE DESCRIBED IN SECTION 4.01(H).

 

(G)                                 SECURITIES REPORTS.  PROMPTLY AFTER THE
SENDING OR FILING THEREOF, COPIES OF ALL PROXY STATEMENTS, FINANCIAL STATEMENTS
AND REPORTS THAT ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES SENDS TO ITS
STOCKHOLDERS, AND COPIES OF ALL REGULAR, PERIODIC AND SPECIAL REPORTS, AND ALL
REGISTRATION STATEMENTS (OTHER THAN ON FORM S-8), THAT ANY LOAN PARTY OR ANY OF
ITS SUBSIDIARIES FILES WITH THE SECURITIES AND

 

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EXCHANGE COMMISSION OR ANY GOVERNMENTAL AUTHORITY THAT MAY BE SUBSTITUTED
THEREFOR, OR WITH ANY NATIONAL SECURITIES EXCHANGE.

 

(H)                                 ENVIRONMENTAL CONDITIONS.  PROMPTLY AFTER
THE ASSERTION OR OCCURRENCE THEREOF, NOTICE OF ANY ENVIRONMENTAL ACTION AGAINST
OR OF ANY NONCOMPLIANCE BY ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES WITH ANY
ENVIRONMENTAL LAW OR ENVIRONMENTAL PERMIT THAT COULD (I) REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT OR (II) CAUSE ANY PROPERTY OWNED BY THE
COMPANY OR ITS SUBSIDIARIES TO BE SUBJECT TO ANY MATERIAL RESTRICTIONS ON
OWNERSHIP, OCCUPANCY, USE OR TRANSFERABILITY UNDER ANY ENVIRONMENTAL LAW.

 

(I)                                     OTHER INFORMATION.  SUCH OTHER
INFORMATION RESPECTING THE BUSINESS, CONDITION (FINANCIAL OR OTHERWISE),
OPERATIONS, PERFORMANCE, PROPERTIES OR PROSPECTS OF ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES AS ANY LENDER PARTY (THROUGH THE ADMINISTRATIVE AGENT) MAY FROM
TIME TO TIME REASONABLY REQUEST.

 

SECTION 5.04  Financial Covenants.  So long as any Advance or any other
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Company will:

 

(A)                                  SENIOR LEVERAGE RATIO.  MAINTAIN ON A
CONSOLIDATED BASIS FOR ITSELF AND ITS SUBSIDIARIES A SENIOR LEVERAGE RATIO OF
NOT MORE THAN 1.25 TO 1.00, WHICH WILL BE DETERMINED AS OF THE LAST DAY OF THE
ROLLING PERIOD ENDING JUNE 30, 2003 AND AS OF THE LAST DAY OF EACH ROLLING
PERIOD THEREAFTER.

 

(B)                                 FIXED CHARGE COVERAGE RATIO.  MAINTAIN ON A
CONSOLIDATED BASIS FOR ITSELF AND ITS SUBSIDIARIES A FIXED CHARGE COVERAGE RATIO
OF NOT LESS THAN 1.15 TO 1.00, WHICH WILL BE DETERMINED AS OF THE LAST DAY OF
THE ROLLING PERIOD ENDING JUNE 30, 2003 AND AS OF THE LAST DAY OF EACH ROLLING
PERIOD THEREAFTER.

 

(C)                                  LIQUIDITY RATIO.  MAINTAIN AT ALL TIMES FOR
ITSELF AND ITS SUBSIDIARIES FROM THE DATE HEREOF A RATIO OF THE SUM OF CASH
(AFTER DEDUCTING THE AMOUNT OF ANY CASH AND CASH EQUIVALENTS OF THE COMPANY AND
ITS SUBSIDIARIES WHICH ARE COLLATERAL FOR OBLIGATIONS OF THE COMPANY AND ITS
SUBSIDIARIES UNDER ANY SYNTHETIC LEASE) PLUS CASH EQUIVALENTS PLUS ACCOUNT
RECEIVABLES, TO CURRENT LIABILITIES OF NOT LESS THAN 1.0 TO 1.0.

 

(D)                                 LIMITATION ON LOSSES.  NOT HAVE (I) AN
OPERATING LOSS FOR EACH OF TWO CONSECUTIVE FISCAL QUARTERS, OR (II) AN OPERATING
LOSS FOR A FISCAL QUARTER WHICH EXCEEDS 3% OF TANGIBLE NET WORTH AS AT THE LAST
DAY OF SUCH FISCAL QUARTER; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT
INCLUDE LOSSES RECORDED DURING ANY FISCAL QUARTER ENDING ON OR BEFORE
DECEMBER 31, 2004 UP TO AN AGGREGATE AMOUNT OF $30 MILLION ARISING FROM THE
RESTRUCTURING PROGRAM ANNOUNCED BY THE COMPANY IN THE FOURTH CALENDAR QUARTER OF
2002.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

SECTION 6.01  Events of Default.  If any of the following events (“Events of
Default”) shall occur and be continuing:

 

(A)                                  (I)  ANY BORROWER SHALL FAIL TO PAY ANY
PRINCIPAL OF ANY ADVANCE WHEN THE SAME SHALL BECOME DUE AND PAYABLE, OR (II) ANY
BORROWER SHALL FAIL TO PAY ANY INTEREST ON ANY ADVANCE OR ANY

 

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LOAN PARTY SHALL FAIL TO MAKE ANY OTHER PAYMENT UNDER ANY LOAN DOCUMENT WITHIN
TWO BUSINESS DAYS OF WHEN THE SAME SHALL BECOME DUE AND PAYABLE; OR

 

(B)                                 ANY REPRESENTATION OR WARRANTY MADE BY ANY
LOAN PARTY OR ANY OF ITS SUBSIDIARIES (OR ANY OF THEIR OFFICERS) UNDER OR IN
CONNECTION WITH ANY LOAN DOCUMENT SHALL PROVE TO HAVE BEEN INCORRECT IN ANY
MATERIAL RESPECT WHEN MADE AND EITHER (I) SUCH REPRESENTATION OR WARRANTY CANNOT
BE REMEDIED AND THE ADMINISTRATIVE AGENT HAS GIVEN NOTICE THEREOF TO THE COMPANY
OR (II) SUCH REPRESENTATION OR WARRANTY CONTINUES TO BE INCORRECT IN A MATERIAL
RESPECT FOR FIFTEEN (15) DAYS AFTER (A) THE COMPANY ACKNOWLEDGES IN WRITING THAT
SUCH REPRESENTATION OR WARRANTY IS INCORRECT, OR (B) WRITTEN NOTICE THEREOF IS
GIVEN TO THE COMPANY BY THE ADMINISTRATIVE AGENT OR ANY LENDER; OR

 

(C)                                  ANY LOAN PARTY SHALL FAIL TO PERFORM OR
OBSERVE ANY TERM, COVENANT OR AGREEMENT CONTAINED IN SECTION 5.01(E), (F), (I)
OR (J), 5.02, OR 5.04, PROVIDED, HOWEVER THAT NO EVENT OF DEFAULT SHALL ARISE
UNDER THIS CLAUSE (C) AS A RESULT OF THE NONCOMPLIANCE WITH SECTION 5.02(B), (F)
OR (K) IN RESPECT OF A PERSON THAT IS ACQUIRED BY THE COMPANY OR A SUBSIDIARY AS
PERMITTED HEREUNDER AFTER THE DATE HEREOF IF SUCH NONCOMPLIANCE IS CURED WITHIN
THIRTY (30) DAYS FOLLOWING THE ACQUISITION OF SUCH PERSON; OR

 

(D)                                 ANY LOAN PARTY SHALL FAIL TO PERFORM OR
OBSERVE ANY TERM, COVENANT OR AGREEMENT CONTAINED IN SECTION 5.03, WHERE SUCH
FAILURE CONTINUES FOR FIFTEEN (15) DAYS AFTER (A) THE COMPANY ACKNOWLEDGES SUCH
FAILURE IN WRITING, OR (B) WRITTEN NOTICE OF SUCH FAILURE IS GIVEN TO THE
COMPANY BY THE ADMINISTRATIVE AGENT OR ANY LENDER; OR

 

(E)                                  ANY LOAN PARTY SHALL FAIL TO PERFORM OR
OBSERVE ANY TERM, COVENANT OR AGREEMENT CONTAINED IN ANY LOAN DOCUMENT ON ITS
PART TO BE PERFORMED OR OBSERVED (OTHER THAN THOSE REFERRED TO IN CLAUSES (A),
(B), (C) OR (D) OF THIS SECTION 6.01) IF SUCH FAILURE SHALL REMAIN UNREMEDIED
FOR 30 DAYS AFTER THE EARLIER OF THE DATE ON WHICH (A) A RESPONSIBLE OFFICER OF
THE COMPANY BECOMES AWARE OF SUCH FAILURE OR (B) WRITTEN NOTICE THEREOF SHALL
HAVE BEEN GIVEN TO THE COMPANY BY THE ADMINISTRATIVE AGENT OR ANY LENDER PARTY;
OR

 

(F)                                    ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES
SHALL FAIL TO PAY ANY PRINCIPAL OF, PREMIUM OR INTEREST ON OR ANY OTHER AMOUNT
PAYABLE IN RESPECT OF ANY DEBT OR ANY HEDGE AGREEMENT OF SUCH LOAN PARTY OR SUCH
SUBSIDIARY (AS THE CASE MAY BE) THAT IS OUTSTANDING IN A PRINCIPAL AMOUNT, OR IN
THE CASE OF ANY HEDGE AGREEMENT AN AGREEMENT VALUE, OF AT LEAST $5,000,000
EITHER INDIVIDUALLY OR IN THE AGGREGATE FOR ALL SUCH LOAN PARTIES AND
SUBSIDIARIES (BUT EXCLUDING DEBT OUTSTANDING HEREUNDER) OF SUCH LOAN PARTY OR
SUCH SUBSIDIARY (AS THE CASE MAY BE), WHEN THE SAME BECOMES DUE AND PAYABLE
(WHETHER BY SCHEDULED MATURITY, REQUIRED PREPAYMENT, ACCELERATION, DEMAND OR
OTHERWISE), AND SUCH FAILURE SHALL CONTINUE AFTER THE APPLICABLE GRACE PERIOD,
IF ANY, SPECIFIED IN THE AGREEMENT OR INSTRUMENT RELATING TO SUCH DEBT; OR ANY
OTHER EVENT SHALL OCCUR OR CONDITION SHALL EXIST UNDER ANY AGREEMENT OR
INSTRUMENT RELATING TO ANY SUCH DEBT AND SHALL CONTINUE AFTER THE APPLICABLE
GRACE PERIOD, IF ANY, SPECIFIED IN SUCH AGREEMENT OR INSTRUMENT, IF THE EFFECT
OF SUCH EVENT OR CONDITION IS TO ACCELERATE, OR TO PERMIT THE ACCELERATION OF,
THE MATURITY OF SUCH DEBT OR OTHERWISE TO CAUSE, OR TO PERMIT THE HOLDER THEREOF
TO CAUSE, SUCH DEBT TO MATURE; OR ANY SUCH DEBT SHALL BE DECLARED TO BE DUE AND
PAYABLE OR REQUIRED TO BE PREPAID OR REDEEMED (OTHER THAN BY A REGULARLY
SCHEDULED REQUIRED PREPAYMENT OR REDEMPTION), PURCHASED OR DEFEASED, OR AN OFFER
TO PREPAY, REDEEM, PURCHASE OR DEFEASE SUCH DEBT SHALL BE REQUIRED TO BE MADE,
IN EACH CASE PRIOR TO THE STATED MATURITY THEREOF PROVIDED, HOWEVER, THAT NO
EVENT OF DEFAULT SHALL ARISE UNDER THIS CLAUSE (F) AS A RESULT OF THE NONPAYMENT
OF ANY DEBT OR ANY HEDGE AGREEMENT OF ANY PERSON WHICH IS ACQUIRED BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES AS PERMITTED HEREUNDER AFTER THE DATE HEREOF
SO LONG AS THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF SUCH DEBT, OR AGREEMENT
VALUE OF SUCH HEDGE AGREEMENT, DOES NOT EXCEED $25,000,000 AND SUCH NONPAYMENT
DOES NOT CONTINUE FOR MORE THAN THREE (3) BUSINESS DAYS AFTER THE ACQUISITION OF
SUCH PERSON; OR

 

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(G)                                 THE COMPANY, ANY LOAN PARTY WHICH IS A
SIGNIFICANT SUBSIDIARY OR ANY OF ITS SIGNIFICANT SUBSIDIARIES SHALL GENERALLY
NOT PAY ITS DEBTS AS SUCH DEBTS BECOME DUE, OR SHALL ADMIT IN WRITING ITS
INABILITY TO PAY ITS DEBTS GENERALLY, OR SHALL MAKE A GENERAL ASSIGNMENT FOR THE
BENEFIT OF CREDITORS; OR ANY PROCEEDING SHALL BE INSTITUTED BY OR AGAINST THE
COMPANY, ANY LOAN PARTY THAT IS A SIGNIFICANT SUBSIDIARY OR ANY OF THEIR
SIGNIFICANT SUBSIDIARIES SEEKING TO ADJUDICATE IT A BANKRUPT OR INSOLVENT, OR
SEEKING LIQUIDATION, WINDING UP, REORGANIZATION, ARRANGEMENT, ADJUSTMENT,
PROTECTION, RELIEF, OR COMPOSITION OF IT OR ITS DEBTS UNDER ANY LAW RELATING TO
BANKRUPTCY, INSOLVENCY OR REORGANIZATION OR RELIEF OF DEBTORS, OR SEEKING THE
ENTRY OF AN ORDER FOR RELIEF OR THE APPOINTMENT OF A RECEIVER, TRUSTEE, OR OTHER
SIMILAR OFFICIAL FOR IT OR FOR ANY SUBSTANTIAL PART OF ITS PROPERTY AND, IN THE
CASE OF ANY SUCH PROCEEDING INSTITUTED AGAINST IT (BUT NOT INSTITUTED BY IT)
THAT IS BEING DILIGENTLY CONTESTED BY IT IN GOOD FAITH, EITHER SUCH PROCEEDING
SHALL REMAIN UNDISMISSED OR UNSTAYED FOR A PERIOD OF 60 DAYS OR ANY OF THE
ACTIONS SOUGHT IN SUCH PROCEEDING (INCLUDING, WITHOUT LIMITATION, THE ENTRY OF
AN ORDER FOR RELIEF AGAINST, OR THE APPOINTMENT OF A RECEIVER, TRUSTEE,
CUSTODIAN OR OTHER SIMILAR OFFICIAL FOR, IT OR ANY SUBSTANTIAL PART OF ITS
PROPERTY) SHALL OCCUR; OR THE COMPANY, ANY LOAN PARTY THAT IS A SIGNIFICANT
SUBSIDIARY OR ANY OF THEIR SIGNIFICANT SUBSIDIARIES SHALL TAKE ANY CORPORATE
ACTION TO AUTHORIZE ANY OF THE ACTIONS SET FORTH ABOVE IN THIS SUBSECTION (F);
OR

 

(H)                                 ANY JUDGMENTS OR ORDERS, EITHER INDIVIDUALLY
OR IN THE AGGREGATE, FOR THE PAYMENT OF MONEY IN EXCESS OF $10,000,000 (TO THE
EXTENT NOT FULLY PAID OR DISCHARGED) SHALL BE RENDERED AGAINST ANY LOAN PARTY OR
ANY OF ITS SUBSIDIARIES AND EITHER (I) ENFORCEMENT PROCEEDINGS SHALL HAVE BEEN
COMMENCED BY ANY CREDITOR UPON SUCH JUDGMENT OR ORDER AND A STAY OF WHICH
PROCEEDINGS HAS NOT BEEN IMPOSED WITHIN 30 DAYS AFTER THE COMMENCEMENT THEREOF,
OR (II) THERE SHALL BE ANY PERIOD OF 30 CONSECUTIVE DAYS DURING WHICH A STAY OF
ENFORCEMENT OF SUCH JUDGMENT OR ORDER, BY REASON OF A PENDING APPEAL OR
OTHERWISE, SHALL NOT BE IN EFFECT; OR

 

(I)                                     ANY NON-MONETARY JUDGMENT OR ORDER SHALL
BE RENDERED AGAINST ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES THAT COULD
REASONABLY BE LIKELY TO HAVE A MATERIAL ADVERSE EFFECT, AND THERE SHALL BE ANY
PERIOD OF 30 CONSECUTIVE DAYS DURING WHICH A STAY OF ENFORCEMENT OF SUCH
JUDGMENT OR ORDER, BY REASON OF A PENDING APPEAL OR OTHERWISE, SHALL NOT BE IN
EFFECT; OR

 

(J)                                     ANY PROVISION OF ANY LOAN DOCUMENT AFTER
DELIVERY THEREOF PURSUANT TO SECTION 3.01 OR 5.01(J) OR (K) SHALL FOR ANY REASON
CEASE TO BE VALID AND BINDING ON OR ENFORCEABLE AGAINST ANY LOAN PARTY TO IT, OR
ANY SUCH LOAN PARTY SHALL SO STATE IN WRITING; OR

 

(K)                                  ANY COLLATERAL DOCUMENT OR FINANCING
STATEMENT, AFTER DELIVERY THEREOF PURSUANT TO SECTION 3.01 OR 5.01(J) OR (K),
SHALL FOR ANY REASON (OTHER THAN PURSUANT TO THE TERMS THEREOF) CEASE TO CREATE
A VALID AND PERFECTED FIRST PRIORITY LIEN ON AND SECURITY INTEREST IN THE
COLLATERAL PURPORTED TO BE COVERED THEREBY; OR

 

(L)                                     A CHANGE OF CONTROL SHALL OCCUR; OR

 

(M)                               ANY ERISA EVENT SHALL HAVE OCCURRED WITH
RESPECT TO A PLAN AND THE SUM (DETERMINED AS OF THE DATE OF OCCURRENCE OF SUCH
ERISA EVENT) OF THE INSUFFICIENCY OF SUCH PLAN AND THE INSUFFICIENCY OF ANY AND
ALL OTHER PLANS WITH RESPECT TO WHICH AN ERISA EVENT SHALL HAVE OCCURRED AND
THEN EXIST (OR THE LIABILITY OF THE LOAN PARTIES AND THE ERISA AFFILIATES
RELATED TO SUCH ERISA EVENT) EXCEEDS $5,000,000; OR

 

(N)                                 ANY LOAN PARTY OR ANY ERISA AFFILIATE SHALL
HAVE BEEN NOTIFIED BY THE SPONSOR OF A MULTIEMPLOYER PLAN THAT IT HAS INCURRED
WITHDRAWAL LIABILITY TO SUCH MULTIEMPLOYER PLAN IN AN AMOUNT THAT, WHEN
AGGREGATED WITH ALL OTHER AMOUNTS REQUIRED TO BE PAID TO MULTIEMPLOYER PLANS BY
THE LOAN

 

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Parties and the ERISA Affiliates as Withdrawal Liability (determined as of the
date of such notification), exceeds $5,000,000 or requires payments exceeding
$1,000,000 per annum; or

 

(O)                                 ANY LOAN PARTY OR ANY ERISA AFFILIATE SHALL
HAVE BEEN NOTIFIED BY THE SPONSOR OF A MULTIEMPLOYER PLAN THAT SUCH
MULTIEMPLOYER PLAN IS IN REORGANIZATION OR IS BEING TERMINATED, WITHIN THE
MEANING OF TITLE IV OF ERISA, AND AS A RESULT OF SUCH REORGANIZATION OR
TERMINATION THE AGGREGATE ANNUAL CONTRIBUTIONS OF THE LOAN PARTIES AND THE ERISA
AFFILIATES TO ALL MULTIEMPLOYER PLANS THAT ARE THEN IN REORGANIZATION OR BEING
TERMINATED HAVE BEEN OR WILL BE INCREASED OVER THE AMOUNTS CONTRIBUTED TO SUCH
MULTIEMPLOYER PLANS FOR THE PLAN YEARS OF SUCH MULTIEMPLOYER PLANS IMMEDIATELY
PRECEDING THE PLAN YEAR IN WHICH SUCH REORGANIZATION OR TERMINATION OCCURS BY AN
AMOUNT EXCEEDING $5,000,000;

 

then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Company,
declare the Commitments of each Lender Party and the obligation of each Lender
to make Advances (other than Letter of Credit Advances by the Issuing Bank or a
Lender pursuant to Section 2.03(c)) and of the Issuing Bank to issue Letters of
Credit to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Required Lenders, (A)
by notice to the Company, declare the Advances, all interest thereon and all
other amounts payable under this Agreement, the Notes, if any, and the other
Loan Documents to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by each Borrower and (B) by notice to each party
required under the terms of any agreement in support of which a Standby Letter
of Credit is issued, request that all Obligations under such agreement be
declared to be due and payable; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to any Loan Party or
any of its Subsidiaries under the Federal Bankruptcy Code or any similar statute
in effect in any Non-U.S. jurisdiction applicable to any such Loan Party or
Subsidiary, (x) the Commitments of each Lender Party and the obligation of each
Lender to make Advances (other than Letter of Credit Advances by the Issuing
Bank or a Lender pursuant to Section 2.03(c)) and of the Issuing Bank to issue
Letters of Credit shall automatically be terminated and (y) the Advances, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Borrower.

 

SECTION 6.02  Actions in Respect of the Letters of Credit upon Default.  If any
Event of Default shall have occurred and be continuing, the Administrative Agent
may, and upon the request of the Required Lenders shall, irrespective of whether
it is taking any of the actions described in Section 6.01 or otherwise, make
demand upon the Company to, and forthwith upon such demand the Company will, pay
to the Administrative Agent on behalf of the Lender Parties in same day funds at
the Administrative Agent’s office designated in such demand, for deposit in the
L/C Cash Collateral Account, an amount equal to the aggregate Available Amount
of all Letters of Credit then outstanding.  If at any time the Administrative
Agent determines that any funds held in the L/C Cash Collateral Account are
subject to any right or claim of any Person other than the Administrative Agent
and the Lender Parties or that the total amount of such funds is less than the
aggregate Available Amount of all Letters of Credit, the Company will, forthwith
upon demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the
total amount of funds, if any, then held in the L/C Cash Collateral Account that
the Administrative Agent determines to be free and clear of any such right and
claim.  Upon the drawing of any Letter of Credit for which funds are on deposit
in the L/C Cash Collateral Account, such funds shall be applied to reimburse the
Issuing Bank or Lenders, as applicable, to the extent permitted by applicable
law.

 

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ARTICLE VII

 

GUARANTY

 

SECTION 7.01  Unconditional Guaranty.  For valuable consideration, receipt
whereof is hereby acknowledged, and to induce each Lender to make Advances to
the Designated Subsidiaries and to induce the Administrative Agent to act
hereunder, the Company hereby unconditionally and irrevocably guarantees to each
Lender and the Administrative Agent the punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all obligations of any
Designated Subsidiary now or hereafter existing under this Agreement, whether
for principal, interest, fees, expenses, post-petition interest, indemnities or
otherwise (such obligations being the “Obligations”).  Without limiting the
generality of the foregoing, the Company’s liability shall extend to all amounts
that constitute part of the Obligations and would be owed by any Designated
Subsidiary to the Administrative Agent or any other Lender under this Agreement
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving any
Designated Subsidiary.

 

SECTION 7.02  Guaranty Absolute.  The Company guarantees that the Obligations
will be paid strictly in accordance with the terms of this Agreement, regardless
of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Lender or the Administrative
Agent with respect thereto.  The obligations of the Company under this
Article VII are independent of the Obligations, and a separate action or actions
may be brought and prosecuted against the Company to enforce this Article VII,
irrespective of whether any action is brought against any Designated Subsidiary
or whether any Designated Subsidiary is joined in any such action or actions. 
The liability of the Company under this guaranty shall be irrevocable, absolute
and unconditional, irrespective of, and the Company hereby irrevocably waives
any defenses it may now or hereafter have in any way relating to, any or all of
the following:

 

(A)                                  ANY LACK OF VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR ANY OTHER AGREEMENT OR INSTRUMENT RELATING THERETO;

 

(B)                                 ANY CHANGE IN THE TIME, MANNER OR PLACE OF
PAYMENT OF, OR IN ANY OTHER TERM OF, ALL OR ANY OF THE OBLIGATIONS, OR ANY OTHER
AMENDMENT OR WAIVER OF OR ANY CONSENT TO DEPARTURE FROM THIS AGREEMENT;

 

(C)                                  ANY TAKING, EXCHANGE, RELEASE OR
NON-PERFECTION OF ANY COLLATERAL OR ANY TAKING, RELEASE OR AMENDMENT OR WAIVER
OF OR CONSENT TO DEPARTURE FROM ANY OTHER GUARANTY, FOR ALL OR ANY OF THE
OBLIGATIONS;

 

(D)                                 ANY CHANGE, RESTRUCTURING OR TERMINATION OF
THE CORPORATE STRUCTURE OR EXISTENCE OF ANY DESIGNATED SUBSIDIARY; OR

 

(E)                                  ANY SETOFF OR COUNTERCLAIM OF ANY
DESIGNATED SUBSIDIARY OR ANY DEFENSE WHICH RESULTS FROM ANY DISABILITY OR OTHER
DEFENSE OF A DESIGNATED SUBSIDIARY OR THE CESSATION OR STAY OF ENFORCEMENT FROM
ANY CAUSE WHATSOEVER OF THE LIABILITY OF A DESIGNATED SUBSIDIARY (INCLUDING,
WITHOUT LIMITATION, THE LACK OF VALIDITY OR ENFORCEABILITY OF ANY OF THE LOAN
DOCUMENTS);

 

(F)                                    ANY DEFENSE BASED UPON ANY LAW, RULE OR
REGULATION WHICH PROVIDES THAT THE OBLIGATION OF A SURETY MUST NOT BE GREATER OR
MORE BURDENSOME THAN THE OBLIGATION OF THE PRINCIPAL;

 

(G)                                 ANY STATUTE OF LIMITATIONS TO THE EXTENT
PERMITTED BY LAW;

 

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(H)                                 ANY APPRAISEMENT, VALUATION, STAY,
EXTENSION, MORATORIUM, REDEMPTION OR SIMILAR LAW OR SIMILAR RIGHTS FOR
MARSHALLING;

 

(I)                                     THE ABSENCE, IMPAIRMENT OR LOSS OF ANY
RIGHT OF SUBROGATION, REIMBURSEMENT, EXONERATION, CONTRIBUTION OR
INDEMNIFICATION OR OTHER RIGHT OR REMEDY AGAINST A DESIGNATED SUBSIDIARY, ANY
OTHER GUARANTOR OF THE OBLIGATIONS OR ANY SECURITY, WHETHER RESULTING FROM AN
ELECTION BY THE ADMINISTRATIVE AGENT OR ANY LENDER TO FORECLOSE UPON SECURITY BY
NONJUDICIAL SALE, OR OTHERWISE;

 

(J)                                     ANY OTHER CIRCUMSTANCE WHICH MIGHT
OTHERWISE CONSTITUTE A DEFENSE AVAILABLE TO, OR A DISCHARGE OF, THE COMPANY, ANY
DESIGNATED SUBSIDIARY OR A GUARANTOR, OTHER THAN PAYMENT IN FULL OF A GUARANTEED
OBLIGATION (EXCEPT AS PROVIDED FOR IN THE IMMEDIATELY SUCCEEDING SENTENCE).

 

This guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by any of the Lenders or the Administrative Agent upon the
insolvency, bankruptcy or reorganization of any Designated Subsidiary or
otherwise, all as though such payment had not been made.

 

SECTION 7.03  Waivers and Acknowledgments.  (a)  The Company hereby expressly
waives promptness, diligence, notice of acceptance, presentment, demand for
payment, protest, any requirement that any right or power be exhausted or any
action be taken against any Designated Subsidiary or against any other guarantor
of all or any portion of the Advances, and all other notices and demands
whatsoever.

 

(B)                                 THE COMPANY HEREBY WAIVES ANY RIGHT TO
REVOKE THIS GUARANTY, AND ACKNOWLEDGES THAT THIS GUARANTY IS CONTINUING IN
NATURE AND APPLIES TO ALL OBLIGATIONS, WHETHER EXISTING NOW OR IN THE FUTURE.

 

(C)                                  THE COMPANY HEREBY WAIVES ANY RIGHT TO BE
INFORMED BY THE ADMINISTRATIVE AGENT OR ANY LENDER OF THE FINANCIAL CONDITION OF
ANY DESIGNATED SUBSIDIARY OR ANY OTHER GUARANTOR OF THE OBLIGATIONS OR ANY
CHANGE THEREIN OR ANY OTHER CIRCUMSTANCES BEARING UPON THE RISK OF NONPAYMENT OR
NONPERFORMANCE OF THE OBLIGATIONS.

 

(D)                                 THE COMPANY HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO A FAIR VALUE HEARING TO DETERMINE THE SIZE OF A DEFICIENCY JUDGMENT
FOLLOWING ANY FORECLOSURE ON ANY SECURITY FOR THE OBLIGATIONS.

 

(E)                                  WITHOUT LIMITING THE SCOPE OF ANY OF THE
FOREGOING PROVISIONS OF THE SECTION 7.03, THE COMPANY HEREBY FURTHER WAIVES (I)
ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY AGENT OR ANY
LENDER, EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE
WITH RESPECT TO SECURITY FOR ANY OBLIGATION, HAS DESTROYED THE COMPANY’S RIGHTS
OF SUBROGATION AND REIMBURSEMENTS AGAINST ANY DESIGNATED SUBSIDIARY BY THE
OPERATION OF SECTION 580D OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR
OTHERWISE, (II) ALL RIGHTS AND DEFENSES THE COMPANY MAY HAVE BY REASON OF
PROTECTION AFFORDED TO ANY DESIGNATED SUBSIDIARY WITH RESPECT TO THE OBLIGATIONS
PURSUANT TO THE ANTIDEFICIENCY OR OTHER LAWS OF CALIFORNIA LIMITING OR
DISCHARGING THE OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, SECTION 580A, 580B,
580D OR 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND (III) ALL OTHER
RIGHTS AND DEFENSES AVAILABLE TO THE COMPANY BY REASON OF SECTIONS 2787 TO 2855,
INCLUSIVE, SECTION 2899 OR SECTION 3433 OF THE CALIFORNIA CIVIL CODE OR
SECTION 3605 OF THE CALIFORNIA COMMERCIAL CODE.

 

(F)                                    THE COMPANY IS FULLY AWARE OF THE
FINANCIAL CONDITION AND AFFAIRS OF EACH DESIGNATED SUBSIDIARY.  THE COMPANY HAS
EXECUTED THIS AGREEMENT WITHOUT RELIANCE UPON ANY REPRESENTATION, WARRANTY,
STATEMENT OR INFORMATION CONCERNING ANY DESIGNATED SUBSIDIARY FURNISHED TO THE
COMPANY BY THE ADMINISTRATIVE AGENT OR ANY LENDER AND HAS, INDEPENDENTLY, AND
WITHOUT RELIANCE ON THE

 

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Administrative Agent or any Lender, and based upon such documents and
information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of each Designated Subsidiary and of other
circumstances affecting the risk of nonpayment or nonperformance of the
Obligations.  The Company is in a position to obtain and assumes full
responsibility for obtaining, any additional information about the financial
condition and affairs of each Designated Subsidiary and of other circumstances
affecting the risk of nonpayment or nonperformance of the Obligations and will,
independently and without reliance upon the Administrative Agent or any Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own appraisals and decisions in taking or not taking
action in connection with this Guaranty.

 

(G)                                 THE COMPANY ACKNOWLEDGES THAT IT WILL
RECEIVE SUBSTANTIAL DIRECT AND INDIRECT BENEFITS FROM THE FINANCING ARRANGEMENTS
CONTEMPLATED HEREIN AND THAT THE WAIVERS SET FORTH IN THIS ARTICLE VII ARE
KNOWINGLY MADE IN CONTEMPLATION OF SUCH BENEFITS.

 

SECTION 7.04  Subrogation.  The Company will not exercise any rights that it may
now or hereafter acquire against any Designated Subsidiary or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
the Obligations under this Agreement, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Administrative Agent or
any other Lender against a Designated Subsidiary or any other insider guarantor
or any collateral, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including, without limitation, the
right to take or receive from a Designated Subsidiary or any other insider
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Obligations and all other amounts payable under this
guaranty shall have been paid in full in cash and the Commitments shall have
expired or terminated.  If any amount shall be paid to the Company in violation
of the preceding sentence at any time prior to the later of the payment in full
in cash of the Obligations and all other amounts payable under this guaranty and
the Termination Date, such amount shall be held in trust for the benefit of the
Administrative Agent and the other Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Obligations and all other
amounts payable under this guaranty, whether matured or unmatured, in accordance
with the terms of this Agreement, or to be held as collateral for any
Obligations or other amounts payable under this guaranty thereafter arising.  If
(i) the Company shall make payment to the Administrative Agent or any other
Lender of all or any part of the Obligations, (ii) all the Obligations and all
other amounts payable under this guaranty shall be paid in full in cash and
(iii) the Termination Date shall have occurred, the Administrative Agent and the
other Lenders will, at the Company’s request and expense, execute and deliver to
the Company appropriate documents, without recourse and without representation
or warranty, necessary to evidence the transfer by subrogation to the Company of
an interest in the Obligations resulting from such payment by the Company.  The
Company acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Agreement and that the waiver set
forth in this section is knowingly made in contemplation on such benefits.

 

SECTION 7.05  Subordination.  The Company hereby subordinates any and all debts,
liabilities and obligations owed to the Company by each Designated Subsidiary
(the “Subordinated Obligations”) to the Obligations as provided in this
Section 7.05.

 

(A)                                  PROHIBITED PAYMENTS.  EXCEPT DURING THE
CONTINUANCE OF A DEFAULT THE COMPANY MAY RECEIVE REGULARLY SCHEDULED PAYMENTS
FROM EACH DESIGNATED SUBSIDIARY ON ACCOUNT OF SUBORDINATED OBLIGATIONS, AS
OTHERWISE PERMITTED BY SECTION 5.02.  AFTER THE OCCURRENCE AND DURING THE
CONTINUANCE OF ANY DEFAULT, HOWEVER, UNLESS THE ADMINISTRATIVE AGENT OTHERWISE
AGREES, THE COMPANY SHALL NOT DEMAND, ACCEPT OR TAKE ANY ACTION TO COLLECT
PAYMENT ON ACCOUNT OF THE SUBORDINATED OBLIGATIONS.

 

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(B)                                 PRIOR PAYMENT OF OBLIGATIONS.  IN ANY
BANKRUPTCY OR SIMILAR PROCEEDING RELATING TO ANY DESIGNATED SUBSIDIARY, THE
COMPANY AGREES THAT THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL BE ENTITLED
TO RECEIVE PAYMENT OF ALL OBLIGATIONS (INCLUDING ANY AND ALL INTEREST AND
EXPENSES ACCRUING AFTER THE COMMENCEMENT OF SUCH PROCEEDINGS) BEFORE THE COMPANY
RECEIVES PAYMENT OF ANY SUBORDINATED OBLIGATIONS.

 

(C)                                  TURN OVER.  AFTER THE OCCURRENCE AND DURING
THE CONTINUANCE OF ANY DEFAULT (INCLUDING THE COMMENCEMENT AND CONTINUATION OF
ANY BANKRUPTCY PROCEEDING RELATING TO ANY DESIGNATED SUBSIDIARY), THE COMPANY
SHALL, IF THE ADMINISTRATIVE AGENT SO REQUESTS, COLLECT, ENFORCE AND RECEIVE
PAYMENTS ON ACCOUNT OF THE SUBORDINATED OBLIGATIONS AS TRUSTEE FOR THE
ADMINISTRATIVE AGENT AND THE LENDERS AND DELIVER SUCH PAYMENTS TO THE
ADMINISTRATIVE AGENT’S ON ACCOUNT OF THE OBLIGATIONS (INCLUDING ANY AND ALL
INTEREST AND EXPENSES ACCRUING AFTER THE COMMENCEMENT OF THE PROCEEDINGS),
TOGETHER WITH ANY NECESSARY ENDORSEMENTS OR OTHER INSTRUMENTS OF TRANSFER, BUT
WITHOUT REDUCING OR AFFECTING IN ANY MANNER THE LIABILITY OF THE COMPANY UNDER
THE OTHER PROVISIONS OF THE GUARANTY IN THIS ARTICLE VII.

 

(D)                                 ADMINISTRATIVE AGENT AUTHORIZATION.  AFTER
THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY DEFAULT, THE ADMINISTRATIVE
AGENT IS AUTHORIZED AND EMPOWERED (BUT WITHOUT ANY OBLIGATION TO DO SO), IN ITS
DISCRETION, (I) IN THE NAME OF THE COMPANY TO COLLECT AND ENFORCE, AND TO SUBMIT
CLAIMS IN RESPECT OF, SUBORDINATED OBLIGATIONS AND TO APPLY ANY AMOUNT RECEIVED
THEREON TO THE OBLIGATIONS (INCLUDING ANY AND ALL INTEREST AND EXPENSES ACCRUING
AFTER THE COMMENCEMENT OF SUCH PROCEEDINGS), AND (II) TO REQUIRE THE COMPANY (A)
TO COLLECT AND ENFORCE, AND TO SUBMIT CLAIMS IN RESPECT OF, SUBORDINATED
OBLIGATIONS AND (B) TO PAY ANY AMOUNTS RECEIVED ON SUCH OBLIGATIONS TO THE
ADMINISTRATIVE AGENT FOR APPLICATION TO THE OBLIGATIONS (INCLUDING ANY AND ALL
INTEREST AND EXPENSES ACCRUING AFTER THE COMMENCEMENT OF SUCH PROCEEDINGS).

 

SECTION 7.06  Survival.  This guaranty is a continuing guaranty and shall
(a) remain in full force and effect until payment in full (after the Termination
Date) of the Obligations and all other amounts payable under this guaranty, (b)
be binding upon the Company, its successors and assigns, (c) inure to the
benefit of and be enforceable by each Lender (including each assignee Lender
pursuant to Section 9.07) and the Administrative Agent and their respective
successors, transferees and assigns and (d) shall be reinstated if at any time
any payment to a Lender or the Administrative Agent hereunder is required to be
restored by such Lender or the Administrative Agent.  Without limiting the
generality of the foregoing clause (c), each Lender may assign or otherwise
transfer its interest in any Advance to any other person or entity, and such
other person or entity shall thereupon become vested with all the rights in
respect thereof granted to such Lender herein or otherwise.

 

ARTICLE VIII

 

THE AGENTS

 

SECTION 8.01  Authorization and Action.  Each Lender Party (in its capacities as
a Lender and the Issuing Bank (if applicable)) hereby appoints and authorizes
the Administrative Agent to execute and deliver the Collateral Documents
(subject to section 9.01) for the purpose of creating a security interest for
the benefit of each Lender Party and to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to the Administrative Agent by the terms hereof
and thereof, together with such powers and discretion as are reasonably
incidental thereto.  As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the Debt
resulting from the Advances), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting)

 

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upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lender Parties and all holders of Notes; provided, however,
that the Administrative Agent shall not be required to take any action that
exposes the Administrative Agent to personal liability or that is contrary to
this Agreement or applicable law.  The Administrative Agent agrees to give to
each Lender Party prompt notice of each notice given to it by the Company
pursuant to the terms of this Agreement.

 

SECTION 8.02  Agents’ Reliance, Etc.  No Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with the Loan Documents, except
for its or their own gross negligence or willful misconduct.  Without limitation
of the generality of the foregoing, the Agents:  (a) may treat the Lender that
made any Advance as the holder of the Debt resulting therefrom until such Agent
receives and accepts an Assignment and Acceptance entered into by such Lender,
as assignor, and an Eligible Assignee, as assignee, as provided in Section 9.07;
(b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender Party and shall not be responsible to
any Lender Party for any statements, warranties or representations (whether
written or oral) made in or in connection with the Loan Documents; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records) of
any Loan Party; (e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopy)
believed by it to be genuine and signed or sent by the proper party or parties.

 

SECTION 8.03  BNP Paribas and Affiliates.  With respect to its Commitments, the
Advances made by it and any Notes issued to it, BNP Paribas shall have the same
rights and powers under the Loan Documents as any other Lender Party and may
exercise the same as though it were not an Agent; and the term “Lender Party” or
“Lenders Parties” shall, unless otherwise expressly indicated, include BNP
Paribas in its individual capacity.  BNP Paribas and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if BNP
Paribas were not an Agent and without any duty to account therefor to the Lender
Parties.

 

SECTION 8.04  Lender Party Credit Decision.  Each Lender Party acknowledges that
it has, independently and without reliance upon any Agent or any other Lender
Party and based on the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.  Each Lender Party
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender Party and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.

 

SECTION 8.05  Indemnification.  (a)  Each Lender Party (other than the
Designated Bidders) severally agrees to indemnify each Agent (to the extent not
promptly reimbursed by the Borrowers) from and against such Lender Party’s
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable fees and expenses of counsel) that may be imposed on,
incurred by, or asserted against such Agent in any way

 

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relating to or arising out of the Loan Documents or any action taken or omitted
by such Agent under the Loan Documents (collectively the “Indemnified Costs”);
provided, however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent’s gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction.  Without limitation of the foregoing, each Lender Party
(other than the Designated Bidders) agrees to reimburse such Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under
Section 9.04, to the extent that such Agent is not promptly reimbursed for such
costs and expenses by the Borrower.

 

(B)                                 EACH LENDER (OTHER THAN THE DESIGNATED
BIDDERS) SEVERALLY AGREES TO INDEMNIFY THE ISSUING BANK (TO THE EXTENT NOT
PROMPTLY REIMBURSED BY THE BORROWERS) FROM AND AGAINST SUCH LENDER’S RATABLE
SHARE (DETERMINED AS PROVIDED BELOW) OF ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED
BY, OR ASSERTED AGAINST THE ISSUING BANK IN ANY WAY RELATING TO OR ARISING OUT
OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE ISSUING BANK UNDER
THE LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR ANY
PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE ISSUING
BANK’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION.  WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER (OTHER THAN THE DESIGNATED BIDDERS)
AGREES TO REIMBURSE THE ISSUING BANK PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE
OF ANY COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, FEES AND EXPENSES OF
COUNSEL) PAYABLE BY THE BORROWERS UNDER SECTION 9.04, TO THE EXTENT THAT THE
ISSUING BANK IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS AND EXPENSES BY THE
BORROWERS.

 

(C)                                  FOR PURPOSES OF THIS SECTION 8.05, THE
LENDER PARTIES’ RESPECTIVE RATABLE SHARES OF ANY AMOUNT SHALL BE DETERMINED, AT
ANY TIME, ACCORDING TO THE SUM OF (I) THE AGGREGATE PRINCIPAL AMOUNT OF THE
REVOLVING CREDIT ADVANCES AND LETTER OF CREDIT ADVANCES OUTSTANDING AT SUCH TIME
AND OWING TO THE RESPECTIVE LENDER PARTIES, (II) THEIR RESPECTIVE PRO RATA
SHARES OF THE AGGREGATE AVAILABLE AMOUNT OF ALL LETTERS OF CREDIT OUTSTANDING AT
SUCH TIME AND (III) THEIR RESPECTIVE UNUSED COMMITMENTS AT SUCH TIME; PROVIDED
THAT THE AGGREGATE PRINCIPAL AMOUNT OF LETTER OF CREDIT ADVANCES OWING TO THE
ISSUING BANK SHALL BE CONSIDERED TO BE OWED TO THE LENDERS RATABLY IN ACCORDANCE
WITH THEIR RESPECTIVE COMMITMENTS AT SUCH TIME.  IN THE CASE OF ANY
INVESTIGATION, LITIGATION OR PROCEEDING GIVING RISE TO ANY INDEMNIFIED COSTS,
THIS SECTION 8.05 APPLIES WHETHER ANY SUCH INVESTIGATION, LITIGATION OR
PROCEEDING IS BROUGHT BY ANY AGENT, ANY LENDER, ANY OTHER LENDER PARTY OR A
THIRD PARTY.  THE FAILURE OF ANY LENDER PARTY (OTHER THAN THE DESIGNATED
BIDDERS) TO REIMBURSE ANY AGENT OR THE ISSUING BANK, AS THE CASE MAY BE,
PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY AMOUNT REQUIRED TO BE PAID BY
THE LENDER PARTIES TO ANY AGENT OR THE ISSUING BANK, AS THE CASE MAY BE, AS
PROVIDED HEREIN SHALL NOT RELIEVE ANY OTHER LENDER PARTY OF ITS OBLIGATION
HEREUNDER TO REIMBURSE ANY AGENT OR THE ISSUING BANK, AS THE CASE MAY BE, FOR
ITS RATABLE SHARE OF SUCH AMOUNT, BUT NO LENDER PARTY SHALL BE RESPONSIBLE FOR
THE FAILURE OF ANY OTHER LENDER PARTY TO REIMBURSE ANY AGENT OR THE ISSUING
BANK, AS THE CASE MAY BE, FOR SUCH OTHER LENDER PARTY’S RATABLE SHARE OF SUCH
AMOUNT.  WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER AGREEMENT OF ANY LENDER
PARTY HEREUNDER, THE AGREEMENT AND OBLIGATIONS OF EACH LENDER PARTY CONTAINED IN
THIS SECTION 8.05 SHALL SURVIVE THE PAYMENT IN FULL OF PRINCIPAL, INTEREST AND
ALL OTHER AMOUNTS PAYABLE HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS.

 

SECTION 8.06  Successor Agents.  Any Agent may resign at any time by giving
written notice thereof to the Lender Parties and the Company and may be removed
at any time with or without cause by the Required Lenders.  Upon any such
resignation or removal by the Administrative Agent, the Required Lenders shall
have the right to appoint a successor Administrative Agent.  If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted

 

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such appointment, within 30 days after the retiring Administrative Agent’s
giving of notice of resignation or the Required Lenders’ removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lender Parties, appoint a successor Administrative Agent, which shall be a
commercial bank organized under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $250,000,000. 
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent and upon the execution and filing or recording of
such financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Administrative Agent
shall succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents.  If within 45 days after written notice is given of the
retiring Administrative Agent’s resignation or removal under this Section 8.06
no successor Administrative Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (i) the retiring Administrative
Agent’s resignation or removal shall become effective, (ii) the retiring
Administrative Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Lenders shall
thereafter perform all duties of the retiring Administrative Agent under the
Loan Documents until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.  After any retiring
Administrative Agent’s resignation or removal hereunder as Administrative Agent
shall become effective, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.

 

SECTION 8.07  Other Agents.  Each Lender Party hereby acknowledges that neither
the Documentation Agents, the Syndication Agents nor any other Lender Party
designated as any “Agent” on the signature pages hereof other than the
Administrative Agent has any responsibilities or liability hereunder other than
in its capacity as a Lender, the titles Documentation Agent and Syndication
Agent being purely honorary in nature.

 

ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01  Amendments, Etc.  No amendment or waiver of any provision of this
Agreement or any Revolving Credit Notes or any other Loan Document, nor consent
to any departure by any Borrower or any other Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed (or consented
to in writing) by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that (a) no amendment, waiver or consent shall, unless
in writing and signed by all of the Lenders (other than the Designated Bidders),
do any of the following at any time:  (i) waive any of the conditions specified
in Section 3.01, (ii) change the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Revolving Credit Advances and Letter of
Credit Advances or (z) the aggregate Available Amount of outstanding Letters of
Credit that, in each case, shall be required for the Lenders or any of them to
take any action hereunder, (iii) release all or substantially all of the
Collateral in any transaction or series of related transactions or permit the
creation, incurrence, assumption or existence of any Lien on all or
substantially all of the Collateral in any transaction or series of related
transactions to secure any Obligations other than Obligations owing to the
Secured Parties under the Loan Documents or (iv) amend this Section 9.01 and (b)
no amendment, waiver or consent shall, unless in writing and signed by the
Required Lenders and each Lender that is directly affected by such amendment,
waiver or consent, (i) increase the Commitments of such Lender or amend
Section 2.14 so as to subject such Lender to additional Obligations, (ii) reduce
the principal of, or interest on, the Revolving Credit

 

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Advances or Letter of Credit Advances payable to such Lender or any fees or
other amounts payable to such Lender, (iii) postpone any date scheduled for any
payment of principal of, or interest on, the Advances payable to such Lender
pursuant to Section 2.04 or Section 2.08 or any date fixed for payment of fees
or other amounts payable to such Lender or (v) change the order of application
of any prepayment set forth in Section 2.07 in any manner that materially
adversely affects such Lender; provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Issuing Bank, in addition to
the Lenders required above to take such action, affect the rights or obligations
of the Issuing Bank under this Agreement; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by each
affected Agent in addition to the Lenders required above to take such action,
affect the rights or duties of such Agent under this Agreement or the other Loan
Documents.

 

SECTION 9.02  Notices, Etc.  All notices and other communications provided for
hereunder shall be in writing (including telecopy communication) and mailed,
telecopied or delivered by an overnight courier of nationally recognized
standing, if to the Company or any other Loan Party, at the address of the
Company at 233 Kansas Street, El Segundo, California 90245, Attention:  Treasury
Department, telecopier number (310) 726-8597 (with a copy to the attention of
General Counsel, telecopier number (310) 726-8484); if to any Initial Lender or
any Initial Issuing Bank, at its Domestic Lending Office specified opposite its
name on Schedule I hereto; if to any other Lender Party, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender Party; and if to the Administrative Agent, for any notice other than any
Notice of Borrowing, at its address at 1 Front Street, San Francisco, California
94111,  Attention:  Tjalling Terpstra, telecopier number (415) 296-8954 (with a
copy, for any notice to the Administrative Agent hereunder other than any Notice
of Borrowing, to the attention of Tjalling Terpstra, Director, telecopier number
(213) 488-9602); or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties.  All such
notices and communications shall, when mailed, telecopied or sent by courier, be
effective when deposited in the mails, transmitted by telecopier, or delivered
to the overnight courier, respectively, except that notices and communications
to any Agent pursuant to Article II, III or VIII shall not be effective until
received by such Agent.  Delivery by telecopier of an executed counterpart of
any amendment or waiver of any provision of this Agreement or the Notes or of
any Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.

 

SECTION 9.03  No Waiver; Remedies.  No failure on the part of any Lender Party
or any Agent to exercise, and no delay in exercising, any right hereunder or
under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.  The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

 

SECTION 9.04  Costs and Expenses.  (a)  The Company agrees to pay on demand
(i) all costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of,
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto, with respect to advising the
Administrative Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors’ rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of the Agents and
the Lender Parties in connection with the enforcement of the Loan Documents,
whether in any action, suit or

 

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litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors’ rights generally (including, without limitation, the reasonable fees
and expenses of counsel for the Administrative Agent and each Lender Party with
respect thereto).

 

(B)                                 THE BORROWERS AGREE TO INDEMNIFY, DEFEND AND
SAVE AND HOLD HARMLESS EACH AGENT, EACH LENDER PARTY AND EACH OF THEIR
AFFILIATES AND THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND ADVISORS (EACH,
AN “INDEMNIFIED PARTY”) FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES,
LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE FEES AND
EXPENSES OF COUNSEL) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY
INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY
REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION,
LITIGATION OR PROCEEDING OR PREPARATION OF A DEFENSE IN CONNECTION THEREWITH)
(I) THE FACILITIES, THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE ADVANCES
OR THE LETTERS OF CREDIT, THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREBY OR (II) THE ACTUAL OR ALLEGED PRESENCE OF HAZARDOUS
MATERIALS ON ANY PROPERTY OF ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES OR ANY
ENVIRONMENTAL ACTION RELATING IN ANY WAY TO ANY LOAN PARTY OR ANY OF ITS
SUBSIDIARIES, EXCEPT TO THE EXTENT SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS ARE FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  IN THE
CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY
IN THIS SECTION 9.04(B) APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR
NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY ANY LOAN PARTY,
ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER
PERSON, WHETHER OR NOT ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND
WHETHER OR NOT THE TRANSACTION IS CONSUMMATED.  EACH BORROWER ALSO AGREES NOT TO
ASSERT ANY CLAIM AGAINST ANY AGENT, ANY LENDER PARTY OR ANY OF THEIR AFFILIATES,
OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND ADVISORS,
ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE
DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO THE FACILITIES, THE ACTUAL OR
PROPOSED USE OF THE PROCEEDS OF THE ADVANCES OR THE LETTERS OF CREDIT, THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY.

 

(C)                                  IF ANY PAYMENT OF PRINCIPAL OF, OR
CONVERSION OF, ANY EUROCURRENCY RATE ADVANCES, LIBO RATE ADVANCE OR LOCAL RATE
ADVANCES IS MADE BY ANY BORROWER TO OR FOR THE ACCOUNT OF A LENDER PARTY OTHER
THAN ON THE LAST DAY OF THE INTEREST PERIOD FOR SUCH ADVANCE, AS A RESULT OF A
PAYMENT OR CONVERSION PURSUANT TO SECTION 2.07, 2.10(B)(I) OR 2.11(D),
ACCELERATION OF THE MATURITY OF THE ADVANCES PURSUANT TO SECTION 6.01 OR FOR ANY
OTHER REASON OR BY AN ELIGIBLE ASSIGNEE TO A LENDER PARTY OTHER THAN ON THE LAST
DAY OF THE INTEREST PERIOD FOR SUCH ADVANCE UPON AN ASSIGNMENT OF RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT PURSUANT TO SECTION 9.07 AS A RESULT OF A
DEMAND BY THE COMPANY PURSUANT TO SECTION 9.07(A), SUCH BORROWER SHALL, UPON
DEMAND BY SUCH LENDER PARTY (WITH A COPY OF SUCH DEMAND TO THE ADMINISTRATIVE
AGENT), PAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF SUCH LENDER PARTY ANY
AMOUNTS REQUIRED TO COMPENSATE SUCH LENDER PARTY FOR ANY ADDITIONAL LOSSES,
COSTS OR EXPENSES THAT IT MAY REASONABLY INCUR AS A RESULT OF SUCH PAYMENT,
INCLUDING, WITHOUT LIMITATION, ANY LOSS (INCLUDING LOSS OF ANTICIPATED PROFITS),
COST OR EXPENSE INCURRED BY REASON OF THE LIQUIDATION OR REEMPLOYMENT OF
DEPOSITS OR OTHER FUNDS ACQUIRED BY ANY LENDER PARTY TO FUND OR MAINTAIN SUCH
ADVANCE.

 

(D)                                 IF ANY LOAN PARTY FAILS TO PAY WHEN DUE ANY
COSTS, EXPENSES OR OTHER AMOUNTS PAYABLE BY IT UNDER ANY LOAN DOCUMENT,
INCLUDING, WITHOUT LIMITATION, FEES AND EXPENSES OF COUNSEL AND INDEMNITIES,
SUCH AMOUNT MAY BE PAID ON BEHALF OF SUCH LOAN PARTY BY THE ADMINISTRATIVE AGENT
OR ANY LENDER PARTY, IN ITS SOLE DISCRETION.

 

(E)                                  WITHOUT PREJUDICE TO THE SURVIVAL OF ANY
OTHER AGREEMENT OF ANY LOAN PARTY HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT,
THE AGREEMENTS AND OBLIGATIONS OF THE BORROWERS CONTAINED IN SECTIONS 2.11 AND
2.13 AND THIS SECTION 9.04 SHALL SURVIVE THE PAYMENT IN FULL OF PRINCIPAL,
INTEREST AND ALL OTHER AMOUNTS PAYABLE HEREUNDER AND UNDER ANY OF THE OTHER LOAN
DOCUMENTS.

 

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SECTION 9.05  Right of Set-off.  Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Advances due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of any Borrower against any and
all of the Obligations of such Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such Obligations may be unmatured.  Each Agent
and each Lender Party agrees promptly to notify such Borrower after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.  The rights of
each Lender Party and its respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender Party and its respective Affiliates may
have.

 

SECTION 9.06  Binding Effect.  This Agreement shall become effective (other than
Section 2.01, 2.03 and 2.04, which shall only become effective upon satisfaction
of the conditions precedent set forth in Section 3.01) when it shall have been
executed by the Company and the Administrative Agent and when the Administrative
Agent shall have been notified by each Initial Lender and the Initial Issuing
Bank that such Initial Lender and the Initial Issuing Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Company, the
Administrative Agent and each Lender Party and their respective successors and
assigns, except that the Company shall not have the right to assign its rights
hereunder or any interest herein (other than in pursuant to a Designation
Letter) without the prior written consent of the Lender Parties.

 

SECTION 9.07  Assignments, Designations and Participations.  (a)  Each Lender
(other than the Designated Bidders) may and, so long as no Default has occurred
and is continuing, if demanded by the Company (following a demand by such Lender
pursuant to Section 2.11 or 2.13) shall upon at least 5 Business Days’ notice to
such Lender and the Administrative Agent, assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment or
Commitments, the Revolving Credit Advances owing to it and any Revolving Credit
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations under this Agreement (other than any right to make Competitive Bid
Advances, Competitive Bid Advances owing to it and Competitive Bid Notes),
(ii) except in the case of an assignment to a Person that, immediately prior to
such assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of
any Lender or an assignment of all of a Lender’s rights and obligations under
this Agreement, the aggregate amount of the Commitments being assigned to such
Eligible Assignee pursuant to such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000 (or such lesser amount as shall be approved by the Company
and the Administrative Agent) and shall be in an integral multiple of $500,000,
(iii) each such assignment shall be to an Eligible Assignee, (iv) each such
assignment made as a result of a demand by the Company pursuant to this
Section 9.07(a) shall be arranged by the Company after consultation with the
Administrative Agent and shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such
assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (v) no Lender shall be
obligated to make any such assignment as a result of a demand by the Company
pursuant to this Section 9.07(a) unless and until such Lender shall have
received one or more payments from either the Company or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to

 

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such Lender, together with accrued interest thereon to the date of payment of
such principal amount and all other amounts payable to such Lender under this
Agreement, (vi) no such assignment shall be permitted without the consent of the
Administrative Agent (such consent not to be unreasonably withheld), (vii)
unless a Default has occurred and is continuing at the time any assignment is
effected, no such assignment to any Eligible Assignee referred to in clauses
(iii) through (vi) of the definition thereof or to an Approved Fund of any
Lender referred to in clause (ii) of the definition thereof shall be permitted
without the consent of the Company (such consent not to be unreasonably
withheld), and (viii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Revolving Credit Note
or Notes subject to such assignment and a processing and recordation fee of
$3,500.

 

(B)                                 UPON SUCH EXECUTION, DELIVERY, ACCEPTANCE
AND RECORDING, FROM AND AFTER THE EFFECTIVE DATE SPECIFIED IN SUCH ASSIGNMENT
AND ACCEPTANCE, (X) THE ASSIGNEE THEREUNDER SHALL BE A PARTY HERETO AND, TO THE
EXTENT THAT RIGHTS AND OBLIGATIONS HEREUNDER HAVE BEEN ASSIGNED TO IT PURSUANT
TO SUCH ASSIGNMENT AND ACCEPTANCE, HAVE THE RIGHTS AND OBLIGATIONS OF A LENDER
OR ISSUING BANK, AS THE CASE MAY BE, HEREUNDER AND (Y) THE LENDER OR ISSUING
BANK ASSIGNOR THEREUNDER SHALL, TO THE EXTENT THAT RIGHTS AND OBLIGATIONS
HEREUNDER HAVE BEEN ASSIGNED BY IT PURSUANT TO SUCH ASSIGNMENT AND ACCEPTANCE,
RELINQUISH ITS RIGHTS AND BE RELEASED FROM ITS OBLIGATIONS UNDER THIS AGREEMENT
(AND, IN THE CASE OF AN ASSIGNMENT AND ACCEPTANCE COVERING ALL OR THE REMAINING
PORTION OF AN ASSIGNING LENDER’S OR ISSUING BANK’S RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT, SUCH LENDER OR ISSUING BANK SHALL CEASE TO BE A PARTY HERETO).

 

(C)                                  BY EXECUTING AND DELIVERING AN ASSIGNMENT
AND ACCEPTANCE, EACH LENDER PARTY ASSIGNOR THEREUNDER AND EACH ASSIGNEE
THEREUNDER CONFIRM TO AND AGREE WITH EACH OTHER AND THE OTHER PARTIES THERETO
AND HERETO AS FOLLOWS:  (I) OTHER THAN AS PROVIDED IN SUCH ASSIGNMENT AND
ACCEPTANCE, SUCH ASSIGNING LENDER PARTY MAKES NO REPRESENTATION OR WARRANTY AND
ASSUMES NO RESPONSIBILITY WITH RESPECT TO ANY STATEMENTS, WARRANTIES OR
REPRESENTATIONS MADE IN OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE EXECUTION, LEGALITY, VALIDITY, ENFORCEABILITY, GENUINENESS,
SUFFICIENCY OR VALUE OF, OR THE PERFECTION OR PRIORITY OF ANY LIEN OR SECURITY
INTEREST CREATED OR PURPORTED TO BE CREATED UNDER OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER INSTRUMENT OR DOCUMENT
FURNISHED PURSUANT HERETO OR THERETO; (II) SUCH ASSIGNING LENDER PARTY MAKES NO
REPRESENTATION OR WARRANTY AND ASSUMES NO RESPONSIBILITY WITH RESPECT TO THE
FINANCIAL CONDITION OF THE COMPANY OR ANY OTHER LOAN PARTY OR THE PERFORMANCE OR
OBSERVANCE BY ANY LOAN PARTY OF ANY OF ITS OBLIGATIONS UNDER ANY LOAN DOCUMENT
OR ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT THERETO; (III) SUCH
ASSIGNEE CONFIRMS THAT IT HAS RECEIVED A COPY OF THIS AGREEMENT, TOGETHER WITH
COPIES OF THE FINANCIAL STATEMENTS REFERRED TO IN SECTION 4.01 AND SUCH OTHER
DOCUMENTS AND INFORMATION AS IT HAS DEEMED APPROPRIATE TO MAKE ITS OWN CREDIT
ANALYSIS AND DECISION TO ENTER INTO SUCH ASSIGNMENT AND ACCEPTANCE; (IV) SUCH
ASSIGNEE WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON THE ADMINISTRATIVE AGENT,
SUCH ASSIGNING LENDER PARTY OR ANY OTHER LENDER PARTY AND BASED ON SUCH
DOCUMENTS AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE TIME, CONTINUE TO
MAKE ITS OWN CREDIT DECISIONS IN TAKING OR NOT TAKING ACTION UNDER THIS
AGREEMENT; (V) SUCH ASSIGNEE CONFIRMS THAT IT IS AN ELIGIBLE ASSIGNEE; (VI) SUCH
ASSIGNEE APPOINTS AND AUTHORIZES THE ADMINISTRATIVE AGENT TO TAKE SUCH ACTION AS
AGENT ON ITS BEHALF AND TO EXERCISE SUCH POWERS AND DISCRETION UNDER THE LOAN
DOCUMENTS AS ARE DELEGATED TO THE ADMINISTRATIVE AGENT BY THE TERMS HEREOF,
TOGETHER WITH SUCH POWERS AND DISCRETION AS ARE REASONABLY INCIDENTAL THERETO;
AND (VII) SUCH ASSIGNEE AGREES THAT IT WILL PERFORM IN ACCORDANCE WITH THEIR
TERMS ALL OF THE OBLIGATIONS WHICH BY THE TERMS OF THIS AGREEMENT ARE REQUIRED
TO BE PERFORMED BY IT AS A LENDER OR ISSUING BANK, AS THE CASE MAY BE.

 

(D)                                 UPON ITS RECEIPT OF AN ASSIGNMENT AND
ACCEPTANCE EXECUTED BY AN ASSIGNING LENDER PARTY AND AN ASSIGNEE, TOGETHER WITH
ANY REVOLVING CREDIT NOTE OR NOTES REQUESTED BY THE ASSIGNEE SUBJECT TO SUCH
ASSIGNMENT, THE ADMINISTRATIVE AGENT SHALL, IF SUCH ASSIGNMENT AND ACCEPTANCE
HAS BEEN COMPLETED AND IS IN SUBSTANTIALLY THE FORM OF EXHIBIT C HERETO,
(I) ACCEPT SUCH ASSIGNMENT AND

 

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Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company.

 

(E)                                  EACH LENDER (OTHER THAN THE DESIGNATED
BIDDERS) MAY DESIGNATE ONE OR MORE BANKS OR OTHER ENTITIES TO HAVE A RIGHT TO
MAKE COMPETITIVE BID ADVANCES AS A LENDER PURSUANT TO SECTION 2.04; PROVIDED,
HOWEVER, THAT (I) NO SUCH LENDER SHALL BE ENTITLED TO MAKE MORE THAN TWO (2)
SUCH DESIGNATIONS, (II) EACH SUCH LENDER MAKING ONE OR MORE OF SUCH DESIGNATIONS
SHALL RETAIN THE RIGHT TO MAKE COMPETITIVE BID ADVANCES AS A LENDER PURSUANT TO
SECTION 2.04, (III) EACH SUCH DESIGNATION SHALL BE TO A DESIGNATED BIDDER AND
(IV) THE PARTIES TO EACH SUCH DESIGNATION SHALL EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT, FOR ITS ACCEPTANCE AND RECORDING IN THE REGISTER, A
DESIGNATION AGREEMENT.  UPON SUCH EXECUTION, DELIVERY, ACCEPTANCE AND RECORDING,
FROM AND AFTER THE EFFECTIVE DATE SPECIFIED IN EACH DESIGNATION AGREEMENT, THE
DESIGNEE THEREUNDER SHALL BE A PARTY HERETO WITH A RIGHT TO MAKE COMPETITIVE BID
ADVANCES AS A LENDER PURSUANT TO SECTION 2.04 AND THE OBLIGATIONS RELATED
THERETO.

 

(F)                                    BY EXECUTING AND DELIVERING A DESIGNATION
AGREEMENT, THE LENDER MAKING THE DESIGNATION THEREUNDER AND ITS DESIGNEE
THEREUNDER CONFIRM AND AGREE WITH EACH OTHER AND THE OTHER PARTIES HERETO AS
FOLLOWS:  (I) SUCH LENDER MAKES NO REPRESENTATION OR WARRANTY AND ASSUMES NO
RESPONSIBILITY WITH RESPECT TO ANY STATEMENTS, WARRANTIES OR REPRESENTATIONS
MADE IN OR IN CONNECTION WITH THIS AGREEMENT OR THE EXECUTION, LEGALITY,
VALIDITY, ENFORCEABILITY, GENUINENESS, SUFFICIENCY OR VALUE OF, OR THE
PERFECTION OR PRIORITY OF ANY LIEN OR SECURITY INTEREST CREATED OR PURPORTED TO
BE CREATED UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER INSTRUMENT
OR DOCUMENT FURNISHED PURSUANT HERETO; (II) SUCH LENDER MAKES NO REPRESENTATION
OR WARRANTY AND ASSUMES NO RESPONSIBILITY WITH RESPECT TO THE FINANCIAL
CONDITION OF THE COMPANY OR THE PERFORMANCE OR OBSERVANCE BY ANY BORROWER OF ANY
OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT OR DOCUMENT
FURNISHED PURSUANT HERETO; (III) SUCH DESIGNEE CONFIRMS THAT IT HAS RECEIVED A
COPY OF THIS AGREEMENT, TOGETHER WITH COPIES OF THE FINANCIAL STATEMENTS
REFERRED TO IN SECTION 4.01 AND SUCH OTHER DOCUMENTS AND INFORMATION AS IT HAS
DEEMED APPROPRIATE TO MAKE ITS OWN CREDIT ANALYSIS AND DECISION TO ENTER INTO
SUCH DESIGNATION AGREEMENT; (IV) SUCH DESIGNEE WILL, INDEPENDENTLY AND WITHOUT
RELIANCE UPON THE ADMINISTRATIVE AGENT, SUCH DESIGNATING LENDER OR ANY OTHER
LENDER AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT SHALL DEEM APPROPRIATE
AT THE TIME, CONTINUE TO MAKE ITS OWN CREDIT DECISIONS IN TAKING OR NOT TAKING
ACTION UNDER THIS AGREEMENT; (V) SUCH DESIGNEE CONFIRMS THAT IT IS A DESIGNATED
BIDDER; (VI) SUCH DESIGNEE APPOINTS AND AUTHORIZES THE ADMINISTRATIVE AGENT TO
TAKE SUCH ACTION AS AGENT ON ITS BEHALF AND TO EXERCISE SUCH POWERS AND
DISCRETION UNDER THIS AGREEMENT AS ARE DELEGATED TO THE ADMINISTRATIVE AGENT BY
THE TERMS HEREOF, TOGETHER WITH SUCH POWERS AND DISCRETION AS ARE REASONABLY
INCIDENTAL THERETO; AND (VII) SUCH DESIGNEE AGREES THAT IT WILL PERFORM IN
ACCORDANCE WITH THEIR TERMS ALL OF THE OBLIGATIONS WHICH BY THE TERMS OF THIS
AGREEMENT ARE REQUIRED TO BE PERFORMED BY IT AS A LENDER.

 

(G)                                 UPON ITS RECEIPT OF A DESIGNATION AGREEMENT
EXECUTED BY A DESIGNATING LENDER AND A DESIGNEE REPRESENTING THAT IT IS A
DESIGNATED BIDDER, THE ADMINISTRATIVE AGENT SHALL, IF SUCH DESIGNATION AGREEMENT
HAS BEEN COMPLETED AND IS SUBSTANTIALLY IN THE FORM OF EXHIBIT D-2 HERETO,
(I) ACCEPT SUCH DESIGNATION AGREEMENT, (II) RECORD THE INFORMATION CONTAINED
THEREIN IN THE REGISTER AND (III) GIVE PROMPT NOTICE THEREOF TO THE COMPANY.

 

(H)                                 THE ADMINISTRATIVE AGENT SHALL MAINTAIN AT
ITS ADDRESS REFERRED TO IN SECTION 9.02 A COPY OF EACH ASSIGNMENT AND ACCEPTANCE
AND EACH DESIGNATION AGREEMENT DELIVERED TO AND ACCEPTED BY IT AND A REGISTER
FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF THE LENDER PARTIES AND, WITH
RESPECT TO LENDERS OTHER THAN DESIGNATED BIDDERS, THE COMMITMENT OF, AND
PRINCIPAL AMOUNT OF THE ADVANCES OWING TO, EACH LENDER PARTY FROM TIME TO TIME
(THE “REGISTER”).  THE ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE AND BINDING
FOR ALL PURPOSES, ABSENT MANIFEST ERROR, AND THE COMPANY, THE ADMINISTRATIVE
AGENT AND THE LENDER PARTIES MAY TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE
REGISTER AS A LENDER

 

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PARTY HEREUNDER FOR ALL PURPOSES OF THIS AGREEMENT.  THE REGISTER SHALL BE
AVAILABLE FOR INSPECTION BY THE COMPANY OR ANY LENDER PARTY AT ANY REASONABLE
TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.

 

(I)                                     EACH LENDER PARTY MAY SELL
PARTICIPATIONS IN OR TO ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ALL OR A PORTION OF ITS
COMMITMENTS, THE ADVANCES OWING TO IT AND ANY NOTE OR NOTES HELD BY IT) TO ANY
PERSON OTHER THAN ANY LOAN PARTY OR ANY OF ITS SUBSIDIARIES OR AFFILIATES;
PROVIDED, HOWEVER, THAT (I) SUCH LENDER PARTY’S OBLIGATIONS UNDER THIS AGREEMENT
(INCLUDING, WITHOUT LIMITATION, ITS COMMITMENTS) SHALL REMAIN UNCHANGED,
(II) SUCH LENDER PARTY SHALL REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES
HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS, (III) SUCH LENDER PARTY SHALL
REMAIN THE HOLDER OF SUCH ADVANCES AND ANY SUCH NOTE FOR ALL PURPOSES OF THIS
AGREEMENT, (IV) EACH BORROWER, EACH AGENT AND THE OTHER LENDER PARTIES SHALL
CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH LENDER PARTY IN CONNECTION WITH
SUCH LENDER PARTY’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND (V) NO
PARTICIPANT UNDER ANY SUCH PARTICIPATION SHALL HAVE ANY RIGHT TO APPROVE ANY
AMENDMENT OR WAIVER OF ANY PROVISION OF ANY LOAN DOCUMENT, OR ANY CONSENT TO ANY
DEPARTURE BY ANY LOAN PARTY THEREFROM, EXCEPT TO THE EXTENT THAT SUCH AMENDMENT,
WAIVER OR CONSENT WOULD REDUCE THE PRINCIPAL OF, OR INTEREST ON, THE ADVANCES OR
ANY FEES OR OTHER AMOUNTS PAYABLE HEREUNDER, IN EACH CASE TO THE EXTENT SUBJECT
TO SUCH PARTICIPATION, POSTPONE ANY DATE FIXED FOR ANY PAYMENT OF PRINCIPAL OF,
OR INTEREST ON, THE ADVANCES OR ANY FEES OR OTHER AMOUNTS PAYABLE HEREUNDER, IN
EACH CASE TO THE EXTENT SUBJECT TO SUCH PARTICIPATION, OR RELEASE ALL OR
SUBSTANTIALLY ALL OF THE COLLATERAL.

 

(J)                                     ANY LENDER PARTY MAY, IN CONNECTION WITH
ANY ASSIGNMENT, DESIGNATION OR PARTICIPATION OR PROPOSED ASSIGNMENT, DESIGNATION
OR PARTICIPATION PURSUANT TO THIS SECTION 9.07, DISCLOSE TO THE ASSIGNEE,
DESIGNEE OR PARTICIPANT OR PROPOSED ASSIGNEE, DESIGNEE OR PARTICIPANT, ANY
INFORMATION RELATING TO THE COMPANY FURNISHED TO SUCH LENDER PARTY BY OR ON
BEHALF OF THE COMPANY.

 

(K)                                  NOTWITHSTANDING ANY OTHER PROVISION SET
FORTH IN THIS AGREEMENT, ANY LENDER PARTY MAY AT ANY TIME CREATE A SECURITY
INTEREST IN ALL OR ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT (INCLUDING,
WITHOUT LIMITATION, THE ADVANCES OWING TO IT AND ANY NOTE OR NOTES HELD BY IT)
IN FAVOR OF ANY FEDERAL RESERVE BANK IN ACCORDANCE WITH REGULATION A OF THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

 

SECTION 9.08  Confidentiality.  Neither any Agent nor any Lender Party shall
disclose any Confidential Information to any Person without the consent of the
Company, other than (a) to such Agent’s or such Lender Party’s Affiliates and
Approved Funds and their officers, directors, employees, agents and advisors and
to actual or prospective Eligible Assignees and Participants (who shall be bound
by this provision as though a Lender Party), and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process, (c)
as requested or required by any state, Federal or foreign authority or examiner
regulating such Lender Party and (d) to any rating agency when required by it,
provided that, prior to such disclosure, such rating agency shall undertake to
preserve the confidentiality of any Confidential Information relating to the
Loan Parties received by it from such Lender Party.  Notwithstanding anything
herein to the contrary, the Borrowers, each Lender and the Agent may disclose to
any and all persons, without limitation of any kind, the U.S. tax treatment and
tax structure of the Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to a Borrower, a Lender or the Agent,
as the case may be, relating to such U.S. tax treatment and tax structure. 
Without limitation of the foregoing, each Agent and each Lender Party shall only
use Confidential Information for purposes of administration of the credit
facilities provided pursuant to this Agreement and in no event shall any Agent
or Lender Party use Confidential Information, or share it with any other Person,
for the purpose of trading in securities.

 

SECTION 9.09  Execution in Counterparts.  This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so

 

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executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.  Delivery by fax of an executed
counterpart of a signature page to this Agreement shall be effective as delivery
of an original executed counterpart of this Agreement.

 

SECTION 9.10  No Liability of the Issuing Bank.  The Borrower requesting any
Letter of Credit assumes all risks of the acts or omissions of any beneficiary
or transferee of such Letter of Credit with respect to its use of such Letter of
Credit.  Neither the Issuing Bank nor any of its officers or directors shall be
liable or responsible for:  (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing
Bank against presentation of documents that do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit,
except that such Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to such Borrower,  to the extent of any direct, but
not consequential, damages suffered by such Borrower that such Borrower proves
were caused by (i) the Issuing Bank’s willful misconduct or gross negligence as
determined in a final, non-appealable judgment by a court of competent
jurisdiction in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) the Issuing Bank’s
willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary.

 

SECTION 9.11  Designated Subsidiaries.  (a)  Designation.  The Company may at
any time, and from time to time, by delivery to the Administrative Agent of a
Designation Letter duly executed by the Company and the respective Subsidiary
and substantially in the form of Exhibit D hereto, designate such Subsidiary as
a “Designated Subsidiary” for purposes of this Agreement and such Subsidiary
shall thereupon become a “Designated Subsidiary” for purposes of this Agreement
and, as such, shall have all of the rights and obligations of a Borrower
hereunder.  The Administrative Agent shall promptly notify each Lender of each
such designation by the Company and the identity of the respective Subsidiary.

 

(B)                                 TERMINATION.  UPON THE PAYMENT AND
PERFORMANCE IN FULL OF ALL OF THE INDEBTEDNESS, LIABILITIES AND OBLIGATIONS
UNDER THIS AGREEMENT AND THE NOTES OF ANY DESIGNATED SUBSIDIARY THEN, SO LONG AS
AT THE TIME NO NOTICE OF REVOLVING CREDIT BORROWING OR NOTICE OF COMPETITIVE BID
BORROWING IN RESPECT OF SUCH DESIGNATED SUBSIDIARY IS OUTSTANDING, SUCH
SUBSIDIARY’S STATUS AS A “DESIGNATED SUBSIDIARY” SHALL TERMINATE UPON NOTICE TO
SUCH EFFECT FROM THE ADMINISTRATIVE AGENT TO THE LENDERS (WHICH NOTICE THE
ADMINISTRATIVE AGENT SHALL GIVE PROMPTLY, AND ONLY UPON ITS RECEIPT OF A REQUEST
THEREFOR FROM THE COMPANY).  THEREAFTER, THE LENDERS SHALL BE UNDER NO FURTHER
OBLIGATION TO MAKE ANY ADVANCE HEREUNDER TO SUCH DESIGNATED SUBSIDIARY.

 

SECTION 9.12  Jurisdiction, Etc.  (a)  Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any California court or federal court of the United
States of America sitting in Los Angeles California, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such California
court or, to the extent permitted by law, in such federal court.  Each of the
parties hereto agrees that a final judgment in any

 

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such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. 
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any of the
other Loan Documents in the courts of any jurisdiction.

 

(B)                                 EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO
SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY IN ANY CALIFORNIA STATE
OR FEDERAL COURT.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

SECTION 9.13  Governing Law.  This Agreement and the Notes shall be governed by,
and construed in accordance with, the laws of the State of California.

 

SECTION 9.14  Judgment.  (a)  If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Dollars with such other currency at BNP Paribas’ principal office in
London at 11:00 A.M. (London time) on the Business Day preceding that on which
final judgment is given.

 

(B)                                 IF FOR THE PURPOSES OF OBTAINING JUDGMENT IN
ANY COURT IT IS NECESSARY TO CONVERT A SUM DUE HEREUNDER IN A FOREIGN CURRENCY
INTO DOLLARS, THE PARTIES AGREE TO THE FULLEST EXTENT THAT THEY MAY EFFECTIVELY
DO SO, THAT THE RATE OF EXCHANGE USED SHALL BE THAT AT WHICH IN ACCORDANCE WITH
NORMAL BANKING PROCEDURES THE ADMINISTRATIVE AGENT COULD PURCHASE SUCH FOREIGN
CURRENCY WITH DOLLARS AT BNP PARIBAS’ PRINCIPAL OFFICE IN LONDON AT 11:00 A.M.
(LONDON TIME) ON THE BUSINESS DAY PRECEDING THAT ON WHICH FINAL JUDGMENT IS
GIVEN.

 

(C)                                  THE OBLIGATION OF THE BORROWERS IN RESPECT
OF ANY SUM DUE FROM IT IN ANY CURRENCY (THE “PRIMARY CURRENCY”) TO ANY LENDER
PARTY OR THE ADMINISTRATIVE AGENT HEREUNDER SHALL, NOTWITHSTANDING ANY JUDGMENT
IN ANY OTHER CURRENCY, BE DISCHARGED ONLY TO THE EXTENT THAT ON THE BUSINESS DAY
FOLLOWING RECEIPT BY SUCH LENDER PARTY OR THE ADMINISTRATIVE AGENT (AS THE CASE
MAY BE), OF ANY SUM ADJUDGED TO BE SO DUE IN SUCH OTHER CURRENCY, SUCH LENDER
PARTY OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) MAY IN ACCORDANCE WITH
NORMAL BANKING PROCEDURES PURCHASE THE APPLICABLE PRIMARY CURRENCY WITH SUCH
OTHER CURRENCY; IF THE AMOUNT OF THE APPLICABLE PRIMARY CURRENCY SO PURCHASED IS
LESS THAN SUCH SUM DUE TO SUCH LENDER PARTY OR THE ADMINISTRATIVE AGENT (AS THE
CASE MAY BE) IN THE APPLICABLE PRIMARY CURRENCY, EACH BORROWER AGREES, AS A
SEPARATE OBLIGATION AND NOTWITHSTANDING ANY SUCH JUDGMENT, TO INDEMNIFY SUCH
LENDER PARTY OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AGAINST SUCH LOSS,
AND IF THE AMOUNT OF THE APPLICABLE PRIMARY CURRENCY SO PURCHASED EXCEEDS SUCH
SUM DUE TO ANY LENDER PARTY OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) IN
THE APPLICABLE PRIMARY CURRENCY, SUCH LENDER PARTY OR THE ADMINISTRATIVE AGENT
(AS THE CASE MAY BE) AGREES TO REMIT TO THE APPLICABLE BORROWER SUCH EXCESS.

 

SECTION 9.15  Substitution of Currency.  If a change in any Committed Currency
or Foreign Currency occurs pursuant to any applicable law, rule or regulation of
any governmental, monetary or multi-national authority, this Agreement
(including, without limitation, the definitions of Eurocurrency Rate and LIBO
Rate) will be amended to the extent determined by the Administrative Agent
(acting reasonably and in consultation with the Company) to be necessary to
reflect the change in currency and to put the Lender Parties and the Borrowers
in the same position, so far as possible, that they would have been in if no
change in such Committed Currency or Foreign Currency had occurred.

 

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SECTION 9.16  Waiver of Jury Trial.  Each of the Loan Parties, each Agent and
the Lender Parties 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 any of the Loan Documents, the Advances, the
Letters of Credit or the actions of any Agent or any Lender Party in the
negotiation, administration, performance or enforcement thereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

 

Company

 

 

 

INTERNATIONAL RECTIFIER CORPORATION

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

 

Sole Arranger, Administrative Agent and Initial
Issuing Bank

 

 

 

BNP PARIBAS
as Sole Arranger, Administrative Agent and Initial
Issuing Bank

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

Syndication Agents

 

 

 

WELLS FARGO BANK, N.A.

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

UNION BANK OF CALIFORNIA

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

 

Documentation Agents

 

 

 

COMERICA BANK

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

FLEET BANK

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

 

Initial Lenders

 

 

 

BNP PARIBAS

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

COMERICA BANK

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

FLEET NATIONAL BANK

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

HSBC BANK USA

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

MIZUHO CORPORATE BANK, LTD.

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

 

 

THE NORTHERN TRUST COMPANY

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

UNION BANK OF CALIFORNIA, N.A.

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

WELLS FARGO BANK, N.A.

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

Exhibit E-1

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT, dated as of November 7, 2003, made by the persons whose
names appear on the signature pages hereof as Grantors and Additional Grantors
(as defined in Section 14(c)(the “Grantors”, and each, individually, a
“Grantor”), to BNP PARIBAS, (“BNP Paribas”), as administrative agent (together
with any successor administrative agent appointed pursuant to Article VIII of
the Credit Agreement, (as defined below) the “Agent”) for the Secured Parties
(as defined in the Credit Agreement).

 

PRELIMINARY STATEMENTS

 

(1)                                  International Rectifier Corporation (the
“Company”), is party to a Credit Agreement dated as of November 7, 2003 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; the capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined) with the Lender
Parties party thereto, Wells Fargo Bank, N.A. and Union Bank of California as
Co-Syndication Agents, Comerica Bank and Fleet Bank as Co-Documentation Agents,
and BNP Paribas, as Sole Arranger, Administrative Agent and Initial Issuing
Bank.

 

(2)                                  Each Grantor is the owner of the shares of
stock or other ownership interests (including, without limitation, interests
arising as a member of a limited liability company) set forth opposite such
Grantor’s name and as otherwise described in Schedule I hereto and issued by the
corporations or other entities indicated therein (collectively, the “Initial
Pledged Shares”).

 

(3)                                  The Company has opened a non-interest
bearing cash collateral account with BNP Paribas at its office at San Francisco,
Account No. 00800-601507-001-44  (such account or such other account with BNP
Paribas as the Company may from time to time designate in accordance with this
Agreement, the “L/C Cash Collateral Account”), in the name of the Company but
under the sole control and dominion of the Agent and subject to the terms of
this Agreement.

 

(4)                                  It is a condition precedent to the making
of Advances by the Lenders and the issuance of Letters of Credit by the Issuing
Bank under the Credit Agreement, that each of the Grantors shall have granted
the assignment and security interest and made the pledge and assignment
contemplated by this Agreement.

 

(5)                                  Unless otherwise defined in this Agreement
or in the Credit Agreement, terms defined in Article 8 or 9 of the Uniform
Commercial Code in effect in the State of California (“California Uniform
Commercial Code”) are used in this Agreement as such terms are defined in such
Article 8 or 9.

 

NOW, THEREFORE, in consideration of the premises and in order to induce the

 

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Lenders to make Advances and the Issuing Bank to issue Letters of Credit under
the Credit Agreement, each of the Grantors hereby agrees with the Agent for its
benefit and the ratable benefit of the other Secured Parties as follows:

 

Section 1.                                            Grant of Security.  Each
of the Grantors hereby assigns and pledges to the Agent for its benefit and the
ratable benefit of the other Secured Parties, and hereby grants to the Agent for
its benefit and the ratable benefit of the other Secured Parties, a lien on and
security interest in the following, in each case, as to each type of property
described below, whether now owned or hereafter acquired by such Grantor,
wherever located and whether now or hereafter existing (collectively, the
“Collateral”):

 

(a)                                  all of such Grantor’s right, title and
interest in and to all of the following (collectively, the “Security
Collateral”):

 

(i)                                     the Initial Pledged Shares, together
with the certificates representing such Initial Pledged Shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Initial Pledged Shares; and

 

(ii)                                  all additional shares of stock or other
ownership interests (including, without limitation, interests arising as a
member of a limited liability company) of any issuer of any Initial Pledged
Shares or of any Subsidiary that is, or becomes after the date hereof, a
Significant Subsidiary, from time to time acquired by such Grantor in any
manner, together with the certificates representing such additional shares or
ownership interests, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares or other ownership interests (together
with the Initial Pledged Shares, the “Pledged Shares”) provided, however that
the Pledged Shares shall not include shares or other ownership interests (or a
portion thereof) of any issuer of Pledged Shares that is a Non-U.S. Subsidiary
to the extent that the inclusion of such shares or other ownership interests (or
portion thereof) would cause the shares or interests in such issuer pledged
hereunder to exceed 65% of the total of all shares or interests in such issuer;
and

 

(b)                                 all of such Grantor’s right, title and
interest in and to all of the following (collectively, the “Account
Collateral”):

 

(i)                                     the L/C Cash Collateral Account;

 

(ii)                                  all notes, certificates of deposit,
deposit accounts, checks and other instruments from time to time hereafter
delivered to or otherwise possessed or required to be delivered to or otherwise
possessed, by the Agent for or on behalf of such Grantor, including, without
limitation, those delivered to or possessed in substitution for or in addition
to any or all of the then existing Account Collateral; and

 

2

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(iii)                               all interest, dividends, distributions,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the then
existing Account Collateral; and

 

(c)                                  all proceeds of any and all of the
foregoing Collateral (including, without limitation, proceeds that constitute
property of the types described in clauses (a) or (b) of this Section 1) and, to
the extent not otherwise included, all (i) payments under insurance (whether or
not the Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral and (ii) cash proceeds of any and all of the
foregoing Collateral.

 

Section 2.                                            Security for Obligations. 
This Agreement secures, in the case of each Grantor, the payment of all
Obligations of such Grantor now or hereafter existing under or in respect of the
Loan Documents, whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, expenses or otherwise (all such
Obligations secured hereby being the “Secured Obligations”).  Without limiting
the generality of the foregoing, this Agreement secures as to each Grantor the
payment of all amounts that constitute part of the Secured Obligations and that
would be owed by such Grantor to the Agent, or any of the other Secured Parties
under the Loan Documents but for the fact that such Secured Obligations are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Grantor or any other
Grantor.

 

Section 3.                                            Grantor Remains Liable. 
Anything contained herein to the contrary notwithstanding, (a) each of the
Grantors shall remain liable under the contracts and agreements (if any)
included in the Collateral to which it is a party to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the Agent
of any of its rights hereunder shall not release any of the Grantors from any of
their respective duties or obligations under the contracts and agreements (if
any) included in the Collateral to which it is a party, and (c) neither of the
Agent, nor any of the other Secured Parties shall have any obligation or
liability under the contracts and agreements (if any) included in the Collateral
by reason of this Agreement or any other Loan Document, nor shall any of the
Secured Parties be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

 

Section 4.                                            Delivery and Control of
Security Collateral and Account Collateral .  (a)  Except as provided in
Section 4(c) below, all certificated securities and all instruments representing
or evidencing any Grantor’s interest in any Security Collateral or Account
Collateral (and, to the extent requested by the Agent, any other Collateral)
shall be delivered to and held by or on behalf of the Agent pursuant hereto and
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Agent.  Upon the occurrence

 

3

--------------------------------------------------------------------------------

 

and during the continuation of an Event of Default, the Agent shall have the
right and without notice to any of the Grantors, to transfer to or register in
the name of the Agent or any of its nominees any or all of the Security
Collateral and the Account Collateral, subject only to the revocable rights
specified in Section 8(a).  In addition, the Agent shall have the right at any
time to exchange certificates or instruments representing or evidencing Security
Collateral or Account Collateral for certificates or instruments of smaller or
larger denominations, subject to the proviso to Section 1(a)(ii).

 

(b)                                 With respect to any Security Collateral
which is an uncertificated security (as defined in the California Uniform
Commercial Code) registered to the Grantor or held by the Grantor other than as
a security entitlement, the Grantor shall cause the issuer thereof to either (i)
register the Agent as owner of such security or (ii) to agree in writing with
such Grantor and the Agent that such issuer will comply with instructions
originated by the Agent with respect to such security without further consent of
such Grantor, such agreement to be in form and substance satisfactory to the
Agent.

 

(c)                                  With respect to any Security Collateral
that constitutes a security entitlement, the applicable Grantor shall cause the
securities intermediary with respect to such security entitlement either (i) to
identify in its records the Agent as the entitlement holder (as defined in the
California Uniform Commercial Code) with respect to such security entitlement or
(ii) to agree in writing with such Grantor and the Agent that such securities
intermediary will comply with entitlement orders as defined in the California
Uniform Commercial Code originated by the Agent without further consent of such
Grantor, such agreement to be in form and substance satisfactory to the Agent.

 

Section 5.                                            Representations and
Warranties.  Each of the Grantors represents and warrants as follows:

 

(a)                                  Except as expressly permitted by the Credit
Agreement, and the other Loan Documents and subject to limitations in the title
acquired by the Grantor, such Grantor is the legal and beneficial owner of the
Collateral of such Grantor free and clear of any Lien, except for the Liens and
security interests created under this Agreement and Permitted Liens.  No
effective financing statement or other instrument similar in effect covering all
or any part of such Collateral or listing such Grantor or any of its
Subsidiaries or any trade name of such Grantor or any of its Subsidiaries as
debtor is on file in any recording office, except such as may have been filed in
favor of the Agent relating to the Loan Documents or may have been filed in
connection with liens permitted by the Credit Agreement.

 

(b)                                 The Pledged Shares owned by such Grantor
have been duly authorized and validly issued and are fully paid (except for
directors’ qualifying shares) and non-assessable.

 

4

--------------------------------------------------------------------------------

 

(c)                                  The Initial Pledged Shares owned by such
Grantor constitute the percentage of the issued and outstanding shares of stock
of the issuers thereof indicated on Schedule I hereto as of the date hereof.

 

(d)                                 Except as otherwise permitted by the Credit
Agreement or the other Loan Documents, this Agreement, the pledge of the
Security Collateral pursuant hereto and the pledge and assignment of the
certificates representing the Account Collateral pursuant hereto create a valid
and perfected first priority security interest in the Collateral of such Grantor
that can be perfected by the UCC financing statement filings and deliveries of
Security Collateral required hereby securing the payment of the Secured
Obligations of such Grantor, and all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken,
except for the filing of financing and continuation statements under the Uniform
Commercial Code and except to the extent that the pledge, assignment and
security interest hereunder concerns Pledged Shares issued by any Non-U.S.
Subsidiary, in respect of which steps for the perfection of the pledge,
assignment and security interest hereunder shall be taken as required by
Section 5.01(j) and 5.01(l) of the Credit Agreement.

 

(e)                                  No consent of any other Person and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other Person is required (i)
for the grant by such Grantor of the assignment and security interest granted
hereby, for the pledge by such Grantor of the Security Collateral pursuant
hereto or for the execution, delivery or performance of this Agreement by such
Grantor, (ii) for the perfection or maintenance of the pledge, assignment and
security interest created hereunder (including the first priority nature of such
pledge, assignment and security interest), except for the filing of financing
and continuation statements under the Uniform Commercial Code and except to the
extent that the pledge, assignment and security interest hereunder concerns
Pledged Shares issued by any Non-U.S. Subsidiary, in respect of which steps for
the perfection of the pledge, assignment and security interest hereunder shall
be taken as required by Section 5.01(j) and 5.01(l) of the Credit Agreement, or
(iii) for the exercise by the Agent of its voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Security Collateral by laws affecting the offering and sale of
securities generally and except to the extent that the pledge, assignment and
security interest hereunder concerns Pledged Shares issued by any Non-U.S.
Subsidiary, in respect of which action shall be taken as required by
Section 5.01(j) and 5.01(l) of the Credit Agreement.

 

(f)                                    Such Grantor has independently and
without reliance upon any Secured Party and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement, and such Grantor has established adequate
means of obtaining from any other Loan Parties on a continuing basis information
pertaining to, and is now and on a continuing basis will be completely familiar
with, the financial condition, operations, properties and prospects of such
other Loan Parties.

 

5

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Section 6.                                            Further Assurances.  (a) 
Each of the Grantors agrees that from time to time, at the expense of such
Grantor, such Grantor shall promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable
and that the Agent may reasonably request, in order to perfect and protect any
pledge, assignment or security interest granted or purported to be granted
hereby (including, without limitation, the first priority nature thereof) or to
enable the Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.  Without limiting the generality of the foregoing,
each of the Grantors shall:  (i) if any Collateral shall be evidenced by a
promissory note or other instrument or chattel paper, deliver and pledge to the
Agent for its benefit and the ratable benefit of the other Secured Parties such
note or instrument or chattel paper duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Agent; (ii) deliver and pledge to the Agent for its benefit
and the ratable benefit of the other Secured Parties certificates representing
the Pledged Shares accompanied by undated stock powers executed in blank and
evidence that all other action that the Agent may deem necessary or desirable in
order to perfect and protect the liens and security interests created under this
Agreement has been taken; and (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable and that the Agent may reasonably
request, in order to perfect and preserve the pledge, assignment and security
interests granted or purported to be granted hereunder.

 

(b)                                 Each of the Grantors hereby authorizes the
Agent to file one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral without the signature of
such Grantor where permitted by law.  A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.

 

(c)                                  Each of the Grantors shall furnish to the
Agent from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.

 

Section 7.                                            Voting Rights; Dividends;
Etc..  (a)  So long as no Event of Default shall have occurred and be
continuing:

 

(i)                                     Each of the Grantors shall be entitled
to exercise any and all voting and other consensual rights pertaining to the
Security Collateral of such Grantor or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the other Loan Documents;
provided, however, that no Grantor shall exercise or refrain from exercising any
such right if, in the Agent’s reasonable judgment, such action would have a
material adverse effect on the value of the Security Collateral or any part
thereof.

 

(ii)                                  Each of the Grantors shall be entitled to
receive and retain, and to utilize free and clear of the lien of this Agreement,
any and all dividends, interest and other

 

6

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distributions paid in respect of the Security Collateral of such Grantor if and
to the extent that the payment thereof is not otherwise prohibited by the terms
of the Loan Documents; provided, however, that any and all:

 

(A)                              dividends, interest and other distributions
paid or payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Security Collateral,

 

(B)                                dividends and other distributions paid or
payable in cash in respect of any Security Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus,

 

(C)                                cash paid, payable or otherwise distributed
in respect of principal of, or in redemption of, or in exchange for, any
Security Collateral, and

 

(D)                               cash dividends paid or payable in violation of
the terms of the Credit Agreement,

 

shall be, and shall be forthwith delivered to the Agent to hold as, Security
Collateral and, if received by any of the Grantors, shall be received in trust
for the benefit of the Agent, shall be segregated from other property or funds
of such Grantor and be forthwith delivered to the Agent as Security Collateral
in the same form as so received (with any necessary indorsement or assignment).

 

(iii)                               The Agent shall promptly execute and deliver
(or cause to be executed and delivered) to each of the Grantors all such proxies
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.

 

(b)                                 Upon the occurrence and during the
continuance of an Event of Default:

 

(i)                                     All rights of each of the Grantors to
(A) exercise or refrain from exercising the voting and other consensual rights
that such Grantor would otherwise be entitled to exercise pursuant to
subparagraph (i) of Section 7(a) shall, upon notice to such Grantor by the
Agent, cease and (B) receive the dividends, interest and other distributions
that such Grantor would otherwise be authorized to receive and retain pursuant
to subparagraph (ii) of Section 7(a) shall automatically cease, and all such
rights shall thereupon become vested in the Agent, which shall thereupon have
the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.

 

7

--------------------------------------------------------------------------------

 

(ii)                                  All dividends, interest and other
distributions that are received by any of the Grantors contrary to the
provisions of clause (i) of this Section 7(b) shall be received in trust for the
benefit of the Agent, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Agent as Security Collateral in the same
form as so received (with any necessary indorsement).

 

Section 8.                                            Transfers and Other Liens;
Additional Shares.  (a)  Each of the Grantors agrees that it shall not (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral of such Grantor (other than sales,
assignments, options and other dispositions permitted under the terms of the
Credit Agreement) or (ii) create or suffer to exist any Lien upon or with
respect to any of the Collateral of such Grantor, except for the Liens created
under this Agreement or permitted under the terms of the Credit Agreement.

 

(b)                                 Each of the Grantors agrees that it shall
(i) cause each issuer of the Pledged Shares owned by such Grantor not to issue
any stock or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer (except directors’ qualifying shares), except to a
Grantor, and (ii) pledge to hereunder, immediately upon acquisition (directly or
indirectly) thereof, any and all additional shares of stock or other securities
of each issuer of any Pledged Shares provided, however that the Pledged Shares
shall not include shares or other ownership interests (or a portion thereof) of
any issuer of Pledged Shares that is a Non-U.S. Subsidiary to the extent that
the inclusion of such shares or other ownership interests (or portion thereof)
would cause the shares or interests in such issuer pledged hereunder to exceed
65% of the total of all shares or interests in such issuer.

 

Section 9.                                            Agent Appointed
Attorney-in-Fact.  Each of the Grantors hereby irrevocably appoints the Agent
such Grantor’s attorney-in-fact, with full authority in the place and stead of
such Grantor and in the name of such Grantor or otherwise, from time to time
after the occurrence and during the continuance of an Event of Default in the
Agent’s discretion, to take any action and to execute any instrument that the
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:

 

(i)                                     to ask for, demand, collect, sue for,
recover, compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral,

 

(ii)                                  to receive, indorse and collect any drafts
or other instruments, chattel paper and documents in connection with
Section 8(a) or 8(b) above, and

 

(iii)                               to file any claims, to take any action or to
institute any proceedings that the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce compliance with the
rights of the Agent with respect to any of the Collateral.

 

8

--------------------------------------------------------------------------------

 

Section 10.                                      Agent May Perform.  If any of
the Grantors fails to perform any agreement contained herein, the Agent may, as
the Agent deems reasonably necessary to protect the Secured Parties’ security
interest in the Collateral or the value thereof, but without any obligation to
do so and without further notice, itself perform, or cause performance of, such
agreement, and the expenses of the Agent incurred in connection therewith shall
be payable by such Grantor under Section 13(b).

 

Section 11.                                      The Agent’s Duties.  The powers
conferred on the Agent hereunder are solely to protect its and the other Secured
Parties’ interest in the Collateral and shall not impose any duty upon it to
exercise any such powers.  Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Security Collateral, whether or not the Agent or
any other Secured Party has or is deemed to have knowledge of such matters, or
as to the taking of any necessary steps to preserve rights against any parties
or any other rights pertaining to any Collateral.  The Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any Collateral
in its possession if such Collateral is accorded treatment substantially equal
to that which the Agent accords its own property.  Anything contained herein to
the contrary notwithstanding, the Agent may from time to time, when the Agent
deems it to be necessary, appoint one or more subagents (each a “Subagent”) for
the Agent hereunder with respect to all or any part of the Collateral.  In the
event that the Agent so appoints any Subagent with respect to any Collateral,
(1) the assignment and pledge of such Collateral and the security interest
granted in such Collateral by each Grantor hereunder shall be deemed for
purposes of this Agreement to have been made to such Subagent for the ratable
benefit of the Secured Parties, as security for the Secured Obligations of such
Grantor, (2) such Subagent shall automatically be vested with all rights,
powers, privileges, interests and remedies of the Agent hereunder with respect
to such Collateral and (3) the term “Agent,” when used herein in relation to any
rights, powers, privileges, interests and remedies of the Agent with respect to
such Collateral, shall include such Subagent; provided, however, that no such
Subagent shall be authorized to take any action with respect to any such
Collateral unless and except to the extent expressly authorized in writing by
the Agent.

 

Section 12.                                      Remedies.  If any Event of
Default shall have occurred and be continuing:

 

(a)                                  The Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party upon
default under the California Uniform Commercial Code (whether or not the
California Uniform Commercial Code applies to the affected Collateral), and also
may (i) require any of the Grantors to, and each of the Grantors hereby agrees
that it shall at its own expense and upon request of the Agent forthwith,
assemble all or part of the Collateral as directed by the Agent and make it
available to the Agent at a place and time to be designated by the Agent that is

 

9

--------------------------------------------------------------------------------

 

reasonably convenient to both parties, (ii) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale or at any of the Agent’s offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Agent may deem
commercially reasonable, and (iii) occupy any premises owned or leased by any of
the Grantors where the Collateral or any part thereof is assembled or located
for a reasonable period in order to effectuate its rights and remedies hereunder
or under law, without obligation to such Grantor in respect of such occupation. 
Each of the Grantors agrees that, to the extent notice of sale shall be required
by law, at least ten days’ notice to the applicable Grantor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification.  The Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.  The
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.

 

(b)                                 Any cash held by or on behalf of the Agent
and all cash proceeds received by or on behalf of the Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by or on behalf of the
Agent as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Agent pursuant to Section 13) in whole or
in part by the Agent for its benefit and the ratable benefit of the other
Secured Parties against, all or any part of the Secured Obligations in such
order as the Agent shall elect.  Any surplus of such cash or cash proceeds held
by or on behalf of the Agent and remaining after payment in full of all of the
Secured Obligations shall be paid over to the applicable Grantor or to
whomsoever may be lawfully entitled to receive such surplus.

 

(c)                                  All payments received by any of the
applicable Grantors in respect of the Collateral shall be received in trust for
the benefit of the Agent, shall be segregated from other funds of such Grantor
and shall be forthwith paid over to the Agent in the same form as so received
(with any necessary indorsement or assignment).

 

Section 13.                                      Indemnity and Expenses.  (a) 
Each of the Grantors agrees to defend, protect, indemnify and hold harmless the
Agent, each of the Secured Parties and each of their respective officers,
directors, employees, agents and advisors (each an “Indemnified Party”) from and
against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and reasonable expenses of
counsel) arising out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except to the extent that such
claims, losses or liabilities are found in a final judgment of a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct.

 

(b)                                 Each of the Grantors will upon demand pay to
the Agent the amount of any and all expenses (including, without limitation, the
reasonable fees and expenses of its

 

10

--------------------------------------------------------------------------------

 

counsel and of any experts and agents) that the Agent may incur in connection
with (i) the administration of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization upon,
any of the Collateral of such Grantor, (iii) the exercise or enforcement of any
of the rights of the Agent or any other Secured Party against such Grantor or
(iv) the failure by any of the Grantors to perform or observe any of the
provisions hereof.

 

Section 14.                                      Amendments; Waivers; Etc.. 
(a)  No amendment or waiver of any provision of this Agreement, and no consent
to any departure by any of the Grantors herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Agent, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.

 

(b)                                 No failure on the part of the Agent to
exercise, and no delay in exercising, any right, power or privilege hereunder
shall operate as a waiver thereof or consent thereto; nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

 

(c)                                  Upon the execution and delivery by any
Person of a security agreement supplement in substantially the form of Exhibit A
hereto (each a “Security Agreement Supplement”), (i) such Person shall be
referred to as an “Additional Grantor” and shall be and become a Grantor, and
each reference in this Agreement to “Grantor” shall also mean and be a reference
to such Additional Grantor and (ii) the Schedule attached to each Security
Agreement Supplement shall be incorporated into and become a part of and
supplement Schedules I hereto, and the Agent may attach such Schedule as a
supplement to Schedule I, and each reference to such Schedule shall mean and be
a reference to Schedule I, as supplemented pursuant hereto.

 

(d)                                 Delivery by telecopies of an executed
counterpart of any amendment or waiver of any provision of this Agreement or of
any Supplement or Schedule hereto shall be effective as delivery of a manually
executed counterpart thereof.

 

Section 15.                                      Addresses for Notices.  All
notices and other communications provided for hereunder shall be in writing
(including telecopier communication) and mailed, telecopied or delivered,
addressed to the party at its address specified in the Credit Agreement, or as
to either a Borrower or the Agent, at such other address as shall be designated
by such party in a written notice to the other parties and, as to each other
party, at such other address as shall be designated by such party in a written
notice to the Borrowers and the Agent.  All such notices and other
communications shall, when mailed or telecopied be effective when deposited in
the mails or transmitted by telecopier, respectively, except that notices and
communications to the Agent shall not be effective until received by the Agent.

 

Section 16.                                      Continuing Security Interest;
Assignments Under the Credit Agreement.  This Agreement shall create a
continuing security interest in the Collateral and shall

 

11

--------------------------------------------------------------------------------

 

(a) remain in full force and effect until the latest of the payment in full in
cash of the Secured Obligations (other than contingent obligations expressed to
survive the termination of the Credit Agreement or any other Loan Document) and
the Termination Date,  (b) be binding upon each of the Grantors and each of
their respective successors and assigns and (c) inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Secured Parties and
their respective successors, transferees and assigns.  Without limiting the
generality of the foregoing clause (c), any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and any Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender Party herein or otherwise, in each case
as provided in Section 9.07 of the Credit Agreement.

 

Section 17.                                      Release and Termination.  (a) 
Upon any sale, lease, transfer or other disposition of any item of Collateral in
accordance with the terms of the Loan Documents, the Agent shall, at the 
applicable Grantor’s expense, execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted hereby; provided,
however, that (i) at the time of such request and such release, no Default shall
have occurred and be continuing, (ii) such Grantor shall have delivered to the
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release describing the item of Collateral to the extent
required by the Credit Agreement and the terms of the sale, lease, transfer or
other disposition in reasonable detail (including, without limitation, the price
thereof and any expenses in connection therewith), and a certification by such
Grantor to the effect that the transaction is in compliance with the Loan
Documents and as to such other matters as the Agent may reasonably request,
(iii) to the extent that the proceeds of any such sale, lease or transfer or
other disposition are required to be applied in accordance with Section 2.07 of
the Credit Agreement, such proceeds shall be paid to, or in accordance with the
instructions of, the Agent at the closing thereof and (iv) the Agent shall have
approved such sale, lease, transfer or other disposition in writing, except if
such sale, lease, transfer or other disposition is permitted under the Credit
Agreement.

 

(b)                                 Upon the latest of the payment in full of
the Secured Obligations (other than contingent obligations expressed to survive
the termination of the Credit Agreement or any other Loan Document) and the
Termination Date, the pledge, assignment and security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the applicable
Grantor.  Upon any such termination, the Agent shall, at the applicable
Grantor’s expense, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.

 

(c)                                  If all of the capital stock (or other
equity interests) of one or more Grantor is sold or otherwise disposed of
(except to the Company or any of its Subsidiaries) or liquidated in compliance
with the requirements of the Credit Agreement (or such sale or other disposition

 

12

--------------------------------------------------------------------------------

 

or liquidation has been approved in writing by the Required Lenders) and the
proceeds of such sale, disposition or liquidation are applied in accordance with
the provisions of the Credit Agreement, such Grantor shall be released from this
Agreement and this Agreement shall, as to each such Grantor or Grantors,
automatically and completely terminate, have no further force or effect and be
forever discharged (it being understood and agreed that the sale of one or more
Persons that own, directly or indirectly, all of the capital stock (or other
equity interests) of any Grantor shall be deemed to be a sale of such Grantor
for purposes of this Section 17(c)).  In such event, the Agent shall, at the
applicable Grantor’s expense, execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to release from the assignment and
security interest granted hereby the items of Collateral pledged and assigned by
such Grantor.

 

Section 18.                                      Annual Collateral Audit.  Each
Grantor agrees that, at the expense of such Grantor, the Agent may conduct an
appraisal and valuation of all the Collateral of such Grantor not more
frequently than once in any Fiscal Year.

 

Section 19.                                      Governing Law.  This Agreement
shall be governed by and construed in accordance with the laws of the State of
California, except to the extent that the validity or perfection of the security
interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the State of
California.

 

Section 20.                                      Execution in Counterparts. 
This Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.  Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

[The remainder of this page is intentionally left blank.]

 

13

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the Grantors has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

 

 

 

INTERNATIONAL RECTIFIER CORPORATION

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

Address:  233 Kansas Street,

 

El Segundo, California  90245

 

Attention:  Treasury Department

 

Telecopier:  (310) 726-8439

 

 

 

 

 

UNISEM, INC.

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

 

 

 

Address:  233 Kansas Street,

 

El Segundo, California  90245

 

Attention:  Treasury Department

 

Telecopier:  (310) 726-8439

 

 

 

 

 

ADVANCED ANALOG, INC.

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

Address:  233 Kansas Street,

 

El Segundo, California  90245

 

Attention:  Treasury Department

 

Telecopier:  (310) 726-8439

 

--------------------------------------------------------------------------------

 

 

INTERNATIONAL RECTIFIER HIREL PRODUCTS, LLC,

 

 

 

By: Zing Technologies, Inc.

 

Its: Manager and sole Member

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

Address:  233 Kansas Street,

 

El Segundo, California  90245

 

Attention:  Treasury Department

 

Telecopier:  (310) 726-8439

 

 

 

 

 

IR PURCHASE COMPANY, INC.

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

Address:  233 Kansas Street,

 

El Segundo, California  90245

 

Attention:  Treasury Department

 

Telecopier:  (310) 726-8439

 

 

 

 

 

ZING TECHNOLOGIES, INC.

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

Address:  233 Kansas Street,

 

El Segundo, California  90245

 

Attention:  Treasury Department

 

Telecopier:  (310) 726-8439

 

--------------------------------------------------------------------------------

 

SCHEDULE I
TO SECURITY
AGREEMENT

 

Pledged Shares

 

Grantor

 

Issuer

 

Class of
Stock

 

Par
Value

 

Stock
Certificate
Number(s)

 

Number
of Shares

 

Percentage of
Issued and
Outstanding
Shares of
Issuer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

*  Notwithstanding the number of shares represented by the certificates, only
65% of the total shares represented by the certificates are being pledged under
this Security Agreement.

 

--------------------------------------------------------------------------------

 

EXHIBIT A
TO SECURITY
AGREEMENT

 

 

FORM OF SECURITY AGREEMENT SUPPLEMENT

 

 

                               , 200    

 

 

BNP Paribas, as Agent

1 Front Street, San Francisco, California 94111

Attention:  Tjalling Terpstra

Telecopier number  (415) 296-8954

With a copy to:  Tjalling Terpstra,

Telecopier number (213) 488-9602

 

 

Security Agreement dated as of November 7, 2003
made by International Rectifier Corporation and the Grantors

named therein to BNP Paribas, as Agent

 

 

Ladies and Gentlemen:

 

Reference is made to the above-captioned Security Agreement (as amended,
supplemented or otherwise modified, the “Security Agreement”).  Unless otherwise
defined herein, terms defined in the Security Agreement are used herein as
therein defined.

 

The undersigned hereby agrees, as of the date first above written, to become a
Grantor under the Security Agreement as if it were an original party thereto and
agrees that each reference in the Security Agreement to a “Grantor” shall also
mean and be a reference to the undersigned.

 

The undersigned hereby assigns and pledges to the Agent for its benefit and the
ratable benefit of the Agent, the Lenders and the Issuing Bank and hereby grants
to the Agent for its benefit and the ratable benefit of the Agent, the Lenders
and the Issuing Bank as collateral for the Secured Obligations a pledge and
assignment of, and a security interest in, all of the right, title and interest
of the undersigned in and to its Collateral, whether now owned or hereafter
acquired, in accordance with the Security Agreement.

 

--------------------------------------------------------------------------------

 

The undersigned has attached hereto a supplement to Schedule I to the Security
Agreement, and the undersigned hereby certifies that such supplement has been
prepared by the undersigned in substantially the form of Schedule I to the
Security Agreement and is accurate and complete as of the date first above
written.

 

The undersigned hereby makes each representation and warranty set forth in
Section 5 of the Security Agreement as to itself and as to its Collateral to the
same extent as each other Grantor and hereby agrees to be bound as a Grantor by
all of the terms and provisions of the Security Agreement to the same extent as
all other Grantors.

 

This letter shall be governed by and construed in accordance with the laws of
the State of California.

 

 

 

Very truly yours,

 

 

 

[GRANTORS]

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

Address:

 

A-2

--------------------------------------------------------------------------------

 

EXHIBIT E-1
TO CREDIT
AGREEMENT

 

 

FORM OF SECURITY AGREEMENT

 

Dated as of November 7, 2003

 

From

 

THE GRANTORS NAMED HEREIN,

 

as Grantors,

 

to

 

BNP PARIBAS,

 

as Agent

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

Section 1.

Grant of Security

 

Section 2.

Security for Obligations

 

Section 3.

Grantor Remains Liable

 

Section 4.

Delivery and Control of Security Collateral and Account Collateral

 

Section 5.

Representations and Warranties

 

Section 6.

Further Assurances

 

Section 7.

Voting Rights; Dividends; Etc.

 

Section 8.

Transfers and Other Liens; Additional Shares

 

Section 9.

Agent Appointed Attorney-in-Fact

 

Section 10.

Agent May Perform

 

Section 11.

The Agent’s Duties

 

Section 12.

Remedies

 

Section 13.

Indemnity and Expenses

 

Section 14.

Amendments; Waivers; Etc.

 

Section 15.

Addresses for Notices

 

Section 16.

Continuing Security Interest; Assignments Under the Credit Agreement

 

Section 17.

Release and Termination

 

Section 18.

Annual Collateral Audit

 

Section 19.

Governing Law

 

Section 20.

Execution in Counterparts

 

 

 

SCHEDULE

 

Schedule I

-

Pledged Shares

 

 

 

 

EXHIBIT

 

 

 

Exhibit A

-

Form of Security Agreement Supplement

 

 

--------------------------------------------------------------------------------

 

Exhibit E-2

 

U.S. GUARANTY

 

U.S. GUARANTY dated as of November 7, 2003, (the “Guaranty”) made by the Persons
listed on the signature pages hereof under the caption “Guarantors” and the
Additional Guarantors (as defined in Section 8(b)) (such Persons so listed and
the Additional Guarantors being, collectively, the “Guarantors” and,
individually, each a “Guarantor”) in favor of the Secured Parties (as defined in
the Credit Agreement referred to below).

 

PRELIMINARY STATEMENT

 

International Rectifier Corporation, a Delaware corporation (the “Company”), is
party to a Credit Agreement dated as of November 7, 2003 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; the capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lender Parties party
thereto, Wells Fargo Bank, N.A. and Union Bank of California as Co-Syndication
Agents, Comerica Bank and Fleet Bank as Co-Documentation Agents, BNP Paribas as
Sole Arranger and Initial Issuing Bank and BNP Paribas as Administrative Agent
(the “Administrative Agent”).  Each Guarantor will derive substantial direct and
indirect benefits from the transactions contemplated by the Credit Agreement. 
It is a condition precedent to the making of Advances and the issuance of
Letters of Credit by the Lender Parties under the Credit Agreement from time to
time that each Guarantor shall have executed and delivered this Guaranty.

 

NOW, THEREFORE, in consideration of the premises and in order to induce the
Lender Parties to make Advances and to issue Letters of Credit under the Credit
Agreement from time to time, each Guarantor, jointly and severally with each
other Guarantor, hereby agrees as follows:

 

Section 1.                                            Guaranty; Limitation of
Liability.  (a)  Each Guarantor hereby absolutely, unconditionally and
irrevocably guarantees the punctual payment when due, whether at scheduled
maturity or on any date of a required prepayment or by acceleration, demand or
otherwise, of all Obligations of each other Loan Party now or hereafter existing
under or in respect of the Loan Documents (including, without limitation, any
extensions, modifications, substitutions, amendments or renewals of any or all
of the foregoing Obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, premiums, fees, indemnities,
contract causes of action, costs, expenses or otherwise (such Obligations being
the “Guaranteed Obligations”), and agrees to pay any and all expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Administrative Agent or any other Secured Party in enforcing any rights under
this Guaranty or any other Loan Document.  Without limiting the generality of
the foregoing, each Guarantor’s liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party to any Secured Party under or in respect of the Loan Documents but
for the fact that they are

 

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unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.

 

(b)                                 Each Guarantor, and by its acceptance of
this Guaranty, the Administrative Agent and each other Secured Party, hereby
confirms that it is the intention of all such Persons that this Guaranty and the
Obligations of each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law (as hereinafter defined), the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder.  To effectuate the foregoing intention,
the Administrative Agent, the other Secured Parties and the Guarantors hereby
irrevocably agree that the Obligations of each Guarantor under this Guaranty at
any time shall be limited to the maximum amount as will result in the
Obligations of such Guarantor under this Guaranty not constituting a fraudulent
transfer or conveyance.  For purposes hereof, “Bankruptcy Law” means any
proceeding of the type referred to in Section 6.01(f) of the Credit Agreement or
Title 11, U.S. Code, or any similar foreign, federal or state law for the relief
of debtors.

 

(c)                                  Each Guarantor hereby unconditionally and
irrevocably agrees that in the event any payment shall be required to be made to
any Secured Party under this Guaranty or any other guaranty, such Guarantor will
contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid
to the Secured Parties under or in respect of the Loan Documents.

 

Section 2.                                            Guaranty Absolute.  Each
Guarantor guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Secured Party with respect thereto.  The
Obligations of each Guarantor under or in respect of this Guaranty are
independent of the Guaranteed Obligations or any other Obligations of any other
Loan Party under or in respect of the Loan Documents, and a separate action or
actions may be brought and prosecuted against each Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against a Borrower or
any other Loan Party or whether a Borrower or any other Loan Party is joined in
any such action or actions.  The liability of each Guarantor under this Guaranty
shall be irrevocable, absolute and unconditional irrespective of, and each
Guarantor hereby irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to, any or all of the following:

 

(a)                                  any lack of validity or enforceability of
any Loan Document or any agreement or instrument relating thereto;

 

(b)                                 any change in the time, manner or place of
payment of, or in any other term of, all or any of the Guaranteed Obligations or
any other Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any

 

2

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consent to departure from any Loan Document, including, without limitation, any
increase in the Guaranteed Obligations resulting from the extension of
additional credit to any Loan Party or any of its Subsidiaries or otherwise;

 

(c)                                  any taking, exchange, release or
non-perfection of any Collateral or any other collateral, or any taking, release
or amendment or waiver of, or consent to departure from, any other guaranty, for
all or any of the Guaranteed Obligations;

 

(d)                                 any manner of application of Collateral or
any other collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Collateral or any
other collateral for all or any of the Guaranteed Obligations or any other
Obligations of any Loan Party under the Loan Documents or any other assets of
any Loan Party or any of its Subsidiaries;

 

(e)                                  any change, restructuring or termination of
the corporate structure or existence of any Loan Party or any of its
Subsidiaries;

 

(f)                                    any failure of any Secured Party to
disclose to any Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Loan Party now or hereafter known to such Secured Party (each
Guarantor waiving any duty on the part of the Secured Parties to disclose such
information);

 

(g)                                 the failure of any other Person to execute
or deliver this Guaranty, any Guaranty Supplement (as hereinafter defined) or
any other guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations;

 

(h)                                 any setoff or counterclaim of any Loan Party
or any defense which results from any disability or other defense of a Loan
Party or the cessation or stay of enforcement from any cause whatsoever of the
liability of a Loan Party (including, without limitation, the lack of validity
or enforceability of any of the Loan Documents);

 

(i)                                     any defense based upon any law, rule or
regulation which provides that the obligation of a surety must not be greater or
more burdensome than the obligation of the principal;

 

(j)                                     any statute of limitations to the extent
permitted by law;

 

(k)                                  any appraisement, valuation, stay,
extension, moratorium, redemption or similar law or similar rights for
marshalling;

 

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(l)                                     the absence, impairment or loss of any
right of subrogation, reimbursement, exoneration, contribution or
indemnification or other right or remedy against a Loan Party, any other
guarantor of the Obligations or any security, whether resulting from an election
by the Administrative Agent or any Lender to foreclose upon security by
non-judicial sale, or otherwise;

 

(m)                               any other circumstance (including, without
limitation, any statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other guarantor or
surety.

 

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of a Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.

 

Section 3.                                            Waivers and
Acknowledgments.  (a)  Each Guarantor hereby unconditionally and irrevocably
waives promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Guaranteed Obligations
and this Guaranty and any requirement that any Secured Party protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against any Loan Party or any other Person or any Collateral.

 

(b)                                 Each Guarantor hereby unconditionally and
irrevocably waives any right to revoke this Guaranty and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.

 

(c)                                  Each Guarantor acknowledges that the
Administrative Agent may, without notice to or demand upon such Guarantor and
without affecting the liability of such Guarantor under this Guaranty, foreclose
under any mortgage by nonjudicial sale, and each Guarantor hereby waives any
defense to the recovery by the Administrative Agent and the other Secured
Parties against such Guarantor of any deficiency after such nonjudicial sale and
any defense or benefits that may be afforded by applicable law.

 

(d)                                 Each Guarantor hereby waives any right to be
informed by the Administrative Agent or any Lender of the financial condition of
any other Loan Party or any other guarantor of the Guaranteed Obligations or any
change therein or any other circumstances bearing upon the risk of nonpayment or
nonperformance of the Guaranteed Obligations.

 

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(e)                                  Each Guarantor hereby waives any right it
may have to a fair value hearing to determine the size of a deficiency judgment
following any foreclosure on any security for the Guaranteed Obligations.

 

(f)                                    Without limiting the scope of any of the
foregoing provisions of this Section 3, each Guarantor hereby further waives (i)
all rights and defenses arising out of an election of remedies by the
Administrative Agent or any Lender, even though that election of remedies, such
as a non-judicial foreclosure with respect to security for any Guaranteed
Obligation, has destroyed such Guarantor’s rights of subrogation and
reimbursements against any other Loan Party by the operation of Section 580d of
the California Code of Civil Procedure or otherwise, (ii) all rights and
defenses such Guarantor may have by reason of protection afforded to any other
Loan Party with respect to the Guaranteed Obligations pursuant to the
antideficiency or other laws of California limiting or discharging the
Guaranteed Obligations, including, without limitation, Section 580a, 580b, 580d
or 726 of the California Code of Civil Procedure, and (III) all other rights and
defenses available to such Guarantor by reason of Sections 2787 to 2855,
inclusive, Section 2899 or Section 3433 of the California Civil Code or
Section 3605 of the California Commercial Code.

 

(g)                                 Each Guarantor is fully aware of the
financial condition and affairs of each other Loan Party.  Each Guarantor has
executed this Agreement without reliance upon any representation, warranty,
statement or information concerning any other Loan Party furnished to such
Guarantor by the Administrative Agent or any Lender and has, independently, and
without reliance on the Administrative Agent or any Lender, and based upon such
documents and information as it has deemed appropriate, made its own appraisal
of the financial condition and affairs of each other Loan Party and of other
circumstances affecting the risk of nonpayment or nonperformance of the
Guaranteed Obligations.  Each Guarantor is in a position to obtain and assumes
full responsibility for obtaining, any additional information about the
financial condition and affairs of each other Loan Party and of other
circumstances affecting the risk of nonpayment or nonperformance of the
Guaranteed Obligations and will, independently and without reliance upon the
Administrative Agent or any Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own appraisals
and decisions in taking or not taking action in connection with this Guaranty.

 

(h)                                 Each Guarantor acknowledges that it will
receive substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in Section 2
and this Section 3 are knowingly made in contemplation of such benefits.

 

Section 4.                                            Subrogation.  Each
Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against a Borrower, any other
Loan Party or any other insider guarantor that arise from the existence,
payment, performance or enforcement of such Guarantor’s Obligations under or in
respect of this

 

5

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Guaranty or any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of any Secured Party against a
Borrower, any other Loan Party or any other insider guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from a Borrower, any other Loan Party or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been paid in full in cash, all Letters of Credit shall
have expired or been terminated and the Commitments shall have expired or been
terminated.  If any amount shall be paid to any Guarantor in violation of the
immediately preceding sentence at any time prior to the latest of (a) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (b) the Termination Date and (c) the latest date of
expiration or termination of all Letters of Credit, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Guarantor and shall forthwith
be paid or delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising.  If (i) any Guarantor
shall make payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit shall have
expired or been terminated, the Secured Parties will, at such Guarantor’s
request and expense, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment made by such Guarantor
pursuant to this Guaranty.

 

Section 5.                                            Payments Free and Clear of
Taxes, Etc.  (a)  Any and all payments made by any Guarantor under or in respect
of this Guaranty or any other Loan Document shall be made, in accordance with
Section 2.12 of the Credit Agreement, free and clear of and without deduction
for any and all present or future Taxes.  If any Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable under or in
respect of this Guaranty or any other Loan Document to any Secured Party, (i)
the sum payable by such Guarantor shall be increased as may be necessary so that
after such Guarantor and the Administrative Agent have made all required
deductions (including deductions applicable to additional sums payable under
this Section 5), such Secured Party receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Guarantor shall make
all such deductions and

 

6

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(iii) such Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

 

(b)                                 In addition, each Guarantor agrees to pay
any present or future Other Taxes that arise from any payment made by or on
behalf of such Guarantor under or in respect of this Guaranty or any other Loan
Document or from the execution, delivery or registration of, performance under,
or otherwise with respect to, this Guaranty and the other Loan Documents.

 

(c)                                  Each Guarantor will indemnify each Secured
Party for and hold it harmless against the full amount of Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 5, imposed on or paid by such Secured Party
and any liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto.  This indemnification shall be made
within 30 days from the date such Secured Party makes written demand therefor.

 

(d)                                 Within 30 days after the date of any payment
of Taxes by or on behalf of any Guarantor, such Guarantor shall furnish to the
Administrative Agent, at its address referred to in Section 9, the original or a
certified copy of a check or receipt evidencing such payment.  In the case of
any payment hereunder by or on behalf of any Guarantor through an account or
branch outside the United States or by or on behalf of such Guarantor by a payor
that is not a United States person, if such Guarantor determines that no Taxes
are payable in respect thereof, such Guarantor shall furnish, or shall cause
such payor to furnish, to the Administrative Agent, at such address, an opinion
of counsel acceptable to the Administrative Agent stating that such payment is
exempt from Taxes.  For purposes of subsections (d) and (e) of this Section 5,
the terms “United States” and “United States person” shall have the meanings
specified in Section 7701 of the Internal Revenue Code.

 

(e)                                  Upon the reasonable request in writing of
any Guarantor, each Secured Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of the Credit Agreement in the case of each Initial Lender or Initial
Issuing Bank, as the case may be, and on or prior to the date of the Assignment
and Acceptance pursuant to which it becomes a Secured Party in the case of each
other Secured Party, and from time to time thereafter upon the reasonable
request in writing by any Guarantor (but only so long thereafter as such Secured
Party remains lawfully able to do so), provide each of the Administrative Agent
and such Guarantor with two original Internal Revenue Service forms W-8ECI or
W-8BEN or (in the case of a Secured Party that has certified in writing to the
Administrative Agent that it is not a “bank” as defined in Section 881(c)(3)(A)
of the Internal Revenue Code) two original forms W-8BEN accompanied by  a
certificate representing that such Secured Party is not a “bank” for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Company and is not a controlled foreign corporation related to the Company
(within the meaning of Section 864(d)(4) of the Internal Revenue Code)), as
appropriate, or any

 

7

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successor or other form prescribed by the Internal Revenue Service, certifying
that such Secured Party is exempt from or entitled to a reduced rate of United
States withholding tax on payments under the Credit Agreement or the Notes.  If
the forms provided by a Secured Party at the time such Secured Party first
becomes a party to the Credit Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Secured Party provides the
appropriate form certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; provided, however, that if, in the case of a Secured
Party becoming a party to the Credit Agreement, at the date of the Assignment
and Acceptance pursuant to which a Secured Party becomes a party to the Credit
Agreement, the Secured Party assignor was entitled to payments under
subsection (a) of this Section 5 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Secured Party assignee on such
date.  If any form or document referred to in this subsection (e) and requested
by any Guarantor pursuant to this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form W-8ECI
or W-8BEN (or the related certificate described above), that the applicable
Secured Party reasonably considers to be confidential, such Secured Party shall
give notice thereof to the applicable Guarantor and shall not be obligated to
include in such form or document such confidential information.

 

(f)                                    For any period with respect to which a
Secured Party has failed to provide any Guarantor following such Guarantor’s
request therefor pursuant to subsection (e) above with the appropriate form
described in subsection (e) above (other than if such failure is due to a change
in law occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under subsection (e) above),
such Secured Party shall not be entitled to indemnification under subsection (a)
or (c) of this Section 5 with respect to Taxes imposed by the United States by
reason of such failure; provided, however, that should a Secured Party become
subject to Taxes because of its failure to deliver a form required hereunder,
such Guarantor shall take such steps as such Secured Party shall reasonably
request to assist such Secured Party to recover such Taxes.

 

Section 6.                                            Representations and
Warranties.  Each Guarantor hereby makes each representation and warranty made
in the Loan Documents by the Company with respect to such Guarantor and each
Guarantor hereby further represents and warrants as follows:

 

(a)                                  There are no conditions precedent to the
effectiveness of this Guaranty that have not been satisfied or waived.

 

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(b)                                 Such Guarantor has, independently and
without reliance upon any Secured Party and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty and each other Loan Document to which it is
or is to be a party, and such Guarantor has established adequate means of
obtaining from each other Loan Party on a continuing basis information
pertaining to, and is now and on a continuing basis will be completely familiar
with, the business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Loan Party.

 

Section 7.                                            Covenants.  Each Guarantor
covenants and agrees that, so long as any part of the Guaranteed Obligations
shall remain unpaid, any Letter of Credit shall be outstanding, any Lender Party
shall have any Commitment, such Guarantor will perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms, covenants and
agreements set forth in the Loan Documents on its or their part to be performed
or observed or that the Company has agreed to cause such Guarantor or such
Subsidiaries to perform or observe.

 

Section 8.                                            Amendments, Guaranty
Supplements, Etc.  (a)  No amendment or waiver of any provision of this Guaranty
and no consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent and the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all of the Secured Parties (a) reduce or limit the
obligations of any Guarantor hereunder, release any Guarantor hereunder or
otherwise limit any Guarantor’s liability with respect to the Obligations owing
to the Secured Parties under or in respect of the Loan Documents except as
provided in the next succeeding sentence, (b) postpone any date fixed for
payment hereunder or (c) change the number of Secured Parties or the percentage
of (x) the Commitments, (y) the aggregate unpaid principal amount of the
Advances or (z) the aggregate Available Amount of outstanding Letters of Credit
that, in each case, shall be required for the Secured Parties or any of them to
take any action hereunder. Upon the sale of a Guarantor to the extent permitted
in accordance with the terms of the Loan Documents, such Guarantor shall be
automatically released from this Guaranty.

 

(b)                                 Upon the execution and delivery by any
Person of a guaranty supplement in substantially the form of Exhibit A hereto
(each, a “Guaranty Supplement”), (i) such Person shall be referred to as an
“Additional Guarantor” and shall become and be a Guarantor hereunder, and each
reference in this Guaranty to a “Guarantor” shall also mean and be a reference
to such Additional Guarantor, and each reference in any other Loan Document to a
“Guarantor” or a “U.S. Guarantor” shall also mean and be a reference to such
Additional Guarantor, and (ii) each reference herein to “this Guaranty”,
“hereunder”, “hereof” or words of like import referring to this Guaranty, and
each reference in any other Loan Document to the

 

9

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“Guaranty”, “U.S. Guaranty”, “thereunder”, “thereof” or words of like import
referring to this Guaranty, shall mean and be a reference to this Guaranty as
supplemented by such Guaranty Supplement.

 

Section 9.                                            Notices, Etc.  All notices
and other communications provided for hereunder shall be in writing (including
telegraphic or telecopy communication) and mailed, telecopied or delivered to
it, if to any Guarantor, addressed to it in care of the Company at the Company’s
address specified in Section 9.02 of the Credit Agreement, if to any Agent or
any Lender Party, at its address specified in Section 9.02 of the Credit
Agreement, or, as to any party, at such other address as shall be designated by
such party in a written notice to each other party.  All such notices and other
communications shall, when mailed or telecopied, be effective when deposited in
the mails or transmitted by telecopier, respectively.  Delivery by telecopier of
an executed counterpart of a signature page to any amendment or waiver of any
provision of this Guaranty or of any Guaranty Supplement to be executed and
delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.

 

Section 10.                                      No Waiver; Remedies.  No
failure on the part of any Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.  The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

 

Section 11.                                      Right of Set-off.  Upon (a) the
occurrence and during the continuance of any Event of Default and (b) the making
of the request or the granting of the consent specified by Section 6.01 of the
Credit Agreement to authorize the Administrative Agent to declare the Notes due
and payable pursuant to the provisions of said Section 6.01, each Agent and each
Lender Party and each of their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Agent, such Lender Party or such Affiliate to or for the credit or the account
of any Guarantor against any and all of the Obligations of such Guarantor now or
hereafter existing under the Loan Documents, irrespective of whether such Agent
or such Lender Party shall have made any demand under this Guaranty or any other
Loan Document and although such Obligations may be unmatured.  Each Agent and
each Lender Party agrees promptly to notify such Guarantor after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.  The rights of
each Agent and each Lender Party and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.

 

Section 12.                                      Indemnification.  (a)  Without
limitation on any other Obligations of any Guarantor or remedies of the Secured
Parties under this Guaranty, each Guarantor shall, to

 

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the fullest extent permitted by law, indemnify, defend and save and hold
harmless each Secured Party and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an “Indemnified
Party”) from and against, and shall pay on demand, any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party in connection with or as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of any
Loan Party enforceable against such Loan Party in accordance with their terms.

 

(b)                                 In no event shall any of the Indemnified
Parties have any liability (whether direct or indirect, in contract, tort or
otherwise) to any of the Guarantors or any of their respective Affiliates or any
of their respective officers, directors, employees, agents and advisors, for any
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Facility, the actual or proposed use of the proceeds of the
Advances or the Letters of Credit, the Transaction Documents or any of the
transactions contemplated by the Transaction Documents.

 

(c)                                  Without prejudice to the survival of any of
the other agreements of any Guarantor under this Guaranty or any of the other
Loan Documents, the agreements and obligations of each Guarantor contained in
Section 1(a) (with respect to enforcement expenses), the last sentence of
Section 2, Section 5 and this Section 12 shall survive the payment in full of
the Guaranteed Obligations and all of the other amounts payable under this
Guaranty.

 

Section 13.                                      Subordination.  Each Guarantor
hereby subordinates any and all debts, liabilities and other Obligations owed to
such Guarantor by each other Loan Party (the “Subordinated Obligations”) to the
Guaranteed Obligations to the extent and in the manner hereinafter set forth in
this Section 13:

 

(a)                                  Prohibited Payments, Etc.  Except during
the continuance of a Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), each
Guarantor may receive regularly scheduled payments from any other Loan Party on
account of the Subordinated Obligations.  After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), however,
unless the Administrative Agent otherwise agrees, no Guarantor shall demand,
accept or take any action to collect any payment on account of the Subordinated
Obligations.

 

(b)                                 Prior Payment of Guaranteed Obligations.  In
any proceeding under any Bankruptcy Law relating to any other Loan Party, each
Guarantor agrees that the Secured Parties shall be entitled to receive payment
in full in cash of all Guaranteed Obligations (including all interest and
expenses accruing after the commencement of a proceeding under any Bankruptcy
Law, whether or not constituting an allowed claim in such proceeding (“Post
Petition Interest”)) before such Guarantor receives payment of any Subordinated
Obligations.

 

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(c)                                  Turn-Over.  After the occurrence and during
the continuance of any Default (including the commencement and continuation of
any proceeding under any Bankruptcy Law relating to any other Loan Party), each
Guarantor shall, if the Administrative Agent so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for the
Secured Parties and deliver such payments to the Administrative Agent on account
of the Guaranteed Obligations (including all Post Petition Interest), together
with any necessary endorsements or other instruments of transfer, but without
reducing or affecting in any manner the liability of such Guarantor under the
other provisions of this Guaranty.

 

(d)                                 Administrative Agent Authorization.  After
the occurrence and during the continuance of any Default (including the
commencement and continuation of any proceeding under any Bankruptcy Law
relating to any other Loan Party), the Administrative Agent is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in the
name of each Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to the
Guaranteed Obligations (including any and all Post Petition Interest), and (ii)
to require each Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Administrative Agent for application to the Guaranteed
Obligations (including any and all Post Petition Interest).

 

Section 14.                                      Continuing Guaranty;
Assignments under the Credit Agreement.  This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until the latest of (i) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (ii) the Termination Date and (iii) the latest date
of expiration or termination of all Letters of Credit, (b) be binding upon the
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors, transferees and
assigns.  Without limiting the generality of clause (c) of the immediately
preceding sentence, any Secured Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party herein or otherwise, in each case as and to the extent
provided in Section 9.07 of the Credit Agreement.  No Guarantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.

 

Section 15.                                      Execution in Counterparts. 
This Guaranty and each amendment, waiver and consent with respect hereto may be
executed in any number of counterparts and by different parties thereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same

 

12

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agreement.  Delivery of an executed counterpart of a signature page to this
Guaranty by telecopier shall be effective as delivery of an original executed
counterpart of this Guaranty.

 

Section 16.                                      Governing Law; Jurisdiction;
Waiver of Jury Trial, Etc.  (a)  This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of California.

 

(b)                                 Each Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any California State court or federal court of the United States
of America sitting in Los Angeles, California, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Guaranty
or any of the other Loan Documents to which it is or is to be a party, or for
recognition or enforcement of any judgment, and each Guarantor hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such California State
court or, to the extent permitted by law, in such federal court.  Each Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Guaranty or any other Loan
Document shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Guaranty or any other Loan Document in the
courts of any jurisdiction.

 

(c)                                  Each Guarantor irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Guaranty or
any of the other Loan Documents to which it is or is to be a party in any
California State or federal court.  Each Guarantor hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.

 

13

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(d)                                 EACH GUARANTOR 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 ANY OF THE LOAN
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.

 

 

 

[GUARANTORS]

 

 

 

 

 

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

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EXHIBIT A
TO U.S.
GUARANTY

 

 

FORM OF GUARANTY SUPPLEMENT

 

 

                       , 200    

 

 

BNP Paribas, as Agent

1 Front Street, San Francisco, California 94111

Attention:  Tjalling Tersptra

Telecopier number (415) 296-8954

With a copy to:  Tjalling Terpstra,

Telecopier number (213) 488-9602

 

 

Credit Agreement dated as of November 7, 2003 among International Rectifier
Corporation, a Delaware corporation (the “Company”), the Lender Parties party
thereto, Wells Fargo Bank, N.A. and Union Bank of California as Co-Syndication
Agents, Comerica Bank and Fleet Bank as Co-Documentation Agents, BNP Paribas as
Sole Arranger and Initial Issuing Bank and BNP Paribas as Administrative Agent.

 

 

Ladies and Gentlemen:

 

Reference is made to the above-captioned Credit Agreement and to the U.S.
Guaranty referred to therein (such U.S. Guaranty, as in effect on the date
hereof and as it may hereafter be amended, supplemented or otherwise modified
from time to time, together with this Guaranty Supplement, being the
“Guaranty”).  The capitalized terms defined in the Guaranty or in the Credit
Agreement and not otherwise defined herein are used herein as therein defined.

 

Section 1.  Guaranty; Limitation of Liability.  (a)  The undersigned hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all Obligations of each other Loan Party
now or hereafter existing under or in respect of the Loan Documents (including,
without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing Obligations), whether direct or
indirect, absolute or contingent, and whether for principal, interest, premium,
fees, indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the

 

--------------------------------------------------------------------------------

 

“Guaranteed Obligations”), and agrees to pay any and all expenses (including,
without limitation, fees and expenses of counsel) incurred by the Administrative
Agent or any other Secured Party in enforcing any rights under this Guaranty
Supplement, the Guaranty or any other Loan Document.  Without limiting the
generality of the foregoing, the undersigned?s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to any Secured Party under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
such other Loan Party.

 

(b)                                 The undersigned, and by its acceptance of
this Guaranty Supplement, the Administrative Agent and each other Secured Party,
hereby confirms that it is the intention of all such Persons that this Guaranty
Supplement, the Guaranty and the Obligations of the undersigned hereunder and
thereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to
this Guaranty Supplement, the Guaranty and the Obligations of the undersigned
hereunder and thereunder.  To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the undersigned hereby
irrevocably agree that the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty at any time shall be limited to the maximum amount
as will result in the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty not constituting a fraudulent transfer or
conveyance.

 

(c)                                  The undersigned hereby unconditionally and
irrevocably agrees that in the event any payment shall be required to be made to
any Secured Party under this Guaranty Supplement, the Guaranty or any other
guaranty, the undersigned will contribute, to the maximum extent permitted by
applicable law, such amounts to each other Guarantor and each other guarantor so
as to maximize the aggregate amount paid to the Secured Parties under or in
respect of the Loan Documents.

 

Section 2.  Obligations Under the Guaranty.  The undersigned hereby agrees, as
of the date first above written, to be bound as a Guarantor by all of the terms
and conditions of the Guaranty to the same extent as each of the other
Guarantors thereunder.  The undersigned further agrees, as of the date first
above written, that each reference in the Guaranty to an “AdditionalGuarantor”
or a “Guarantor” shall also mean and be a reference to the undersigned, and each
reference in any other Loan Document to a “Guarantor”, a “U.S. Guarantor” or a
“Loan Party” shall also mean and be a reference to the undersigned.

 

Section 3.  Representations and Warranties.  The undersigned hereby makes each
representation and warranty set forth in Section 6 of the Guaranty to the same
extent as each other Guarantor.

 

A-2

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Section 4.  Delivery by Telecopier.  Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by telecopier shall be effective as
delivery of an original executed counterpart of this Guaranty Supplement.

 

Section 5.  Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.  (a) This
Guaranty Supplement shall be governed by, and construed in accordance with, the
laws of the State of California.

 

(b)                                 The undersigned hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any California State court or any federal court of the United
States of America sitting in Los Angeles, California, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Guaranty Supplement, the Guaranty or any of the other Loan Documents to which it
is or is to be a party, or for recognition or enforcement of any judgment, and
the undersigned hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
California State court or, to the extent permitted by law, in such federal
court.  The undersigned agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.  Nothing in this
Guaranty Supplement or the Guaranty or any other Loan Document shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty Supplement, the Guaranty or any of the other Loan
Documents to which it is or is to be a party in the courts of any other
jurisdiction.

 

(c)                                  The undersigned irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Guaranty
Supplement, the Guaranty or any of the other Loan Documents to which it is or is
to be a party in any California State or federal court.  The undersigned hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.

 

A-3

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(d)                                 THE UNDERSIGNED 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 ANY OF THE
LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

Very truly yours,

 

 

 

[NAME OF ADDITIONAL GUARANTOR]

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

Address:

 

A-4

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EXHIBIT E-2
TO CREDIT
AGREEMENT

 

 

FORM OF U.S. GUARANTY

 

Dated as of November 7, 2003

 

From

 

THE GUARANTORS NAMED HEREIN

 

and

 

THE ADDITIONAL GUARANTORS REFERRED TO HEREIN

 

as Guarantors

 

in favor of

 

THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

Section

 

 

 

 

 

 

Section 1.

Guaranty; Limitation of Liability

 

Section 2.

Guaranty Absolute

 

Section 3.

Waivers and Acknowledgments

 

Section 4.

Subrogation

 

Section 5.

Payments Free and Clear of Taxes, Etc

 

Section 6.

Representations and Warranties

 

Section 7.

Covenants

 

Section 8.

Amendments, Guaranty Supplements, Etc

 

Section 9.

Notices, Etc

 

Section 10.

No Waiver; Remedies

 

Section 11.

Right of Set-off

 

Section 12.

Indemnification

 

Section 13.

Subordination

 

Section 14.

Continuing Guaranty; Assignments under the Credit Agreement

 

Section 15.

Execution in Counterparts

 

Section 16.

Governing Law; Jurisdiction; Waiver of Jury Trial, Etc

 

 

 

 

 

 

 

Exhibit A

-

Form of Guaranty Supplement

 

 

i

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Exhibit E-3

 

NON-U.S. GUARANTY

 

NON-U.S. GUARANTY dated as of                                , 20   , (this
“Guaranty”) made by the Persons listed on the signature pages hereof under the
caption “Guarantors” and the Additional Guarantors (as defined in Section 8(b))
(such Persons so listed and the Additional Guarantors being, collectively, the
“Guarantors” and, individually, each a “Guarantor”) in favor of the Secured
Parties (as defined in the Credit Agreement referred to below).

 

PRELIMINARY STATEMENT

 

International Rectifier Corporation, a Delaware corporation (the “Company”), is
party to a Credit Agreement dated as of November 7, 2003 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”; the capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lender Parties party
thereto, Wells Fargo Bank, N.A. and Union Bank of California as Co-Syndication
Agents, Comerica Bank and Fleet Bank as Co-Documentation Agents, BNP Paribas as
Sole Arranger and Initial Issuing Bank and BNP Paribas as Administrative Agent
(the “Administrative Agent”).  Each Guarantor will derive substantial direct and
indirect benefits from the transactions contemplated by the Credit Agreement. 
It is a condition precedent to the making of Advances and issuance of Letters of
Credit by the Lender Parties under the Credit Agreement from time to time that
each Guarantor shall have executed and delivered this Guaranty.

 

NOW, THEREFORE, in consideration of the premises and in order to induce the
Lender Parties to make Advances and to issue Letters of Credit under the Credit
Agreement from time to time, each Guarantor, jointly and severally with each
other Guarantor, hereby agrees as follows:

 

Section 1.                                            Guaranty; Limitation of
Liability.  (a)  Each Guarantor hereby absolutely, unconditionally and
irrevocably guarantees the punctual payment when due, whether at scheduled
maturity or on any date of a required prepayment or by acceleration, demand or
otherwise, of all Obligations of each other Loan Party that is organized under
the laws of a jurisdiction outside of the United States, now or hereafter
existing (such Loan Parties being collectively the “Foreign Loan Parties” and
individually, each a “Foreign Loan Party”) under or in respect of the Loan
Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the “Guaranteed
Obligations”), and agrees to pay any and all expenses (including, without

 

--------------------------------------------------------------------------------

 

limitation, fees and expenses of counsel) incurred by the Administrative Agent
or its assignees in enforcing any rights under this Guaranty.  Without limiting
the generality of the foregoing, each Guarantor’s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Foreign Loan Party to any Secured Party under or in respect of the
Loan Documents but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
such other Foreign Loan Party.

 

(b)                                 Each Guarantor, and by its acceptance of
this Guaranty, the Administrative Agent and each other Secured Party, hereby
confirms that it is the intention of all such Persons that this Guaranty and the
Obligations of each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law (as hereinafter defined), the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder.  To effectuate the foregoing intention,
the Administrative Agent, the other Secured Parties and the Guarantors hereby
irrevocably agree that the Obligations of each Guarantor under this Guaranty at
any time shall be limited to the maximum amount as will result in the
Obligations of such Guarantor under this Guaranty not constituting a fraudulent
transfer or conveyance.  For purposes hereof, “Bankruptcy Law” means any
proceeding of the type referred to in Section 6.01(g) of the Credit Agreement or
Title 11, U.S. Code, or any similar foreign, federal or state law for the relief
of debtors.

 

(c)                                  Each Guarantor hereby unconditionally and
irrevocably agrees that in the event any payment shall be required to be made to
any Secured Party under this Guaranty, such Guarantor will contribute, to the
maximum extent permitted by law, such amounts to each other Guarantor so as to
maximize the aggregate amount paid to the Secured Parties under or in respect of
the Loan Documents.

 

(d)                                 Notwithstanding the foregoing, (x) the
obligation of any Guarantor organized under the laws of Germany (each a “German
Guarantor”) shall terminate in the event that such Guarantor no longer has any
obligation outstanding under the Loan Documents (other than this Guaranty) or
has any other payment obligation to a Secured Party, (y) each German Guarantor
and by its acceptance of this Guaranty, each Secured Party, hereby agrees that
the obligations of any German Guarantor hereunder shall be limited to such
amount that would not result in a violation of GMBH-Gesetz Section 30 or any
other laws of Germany that pertain to the protection of capital of such German
Guarantor and (z) each Guarantor organized under the laws of Italy (each an
“Italian Guarantor”) and by its acceptance of this Guaranty, each Secured Party,
hereby agrees that the obligations of any Italian Guarantor shall be limited to
the amount that is equal to the value of the aggregate assets of such Italian
Guarantor minus all outstanding liabilities of such Italian Guarantor, in each
case determined at the time of the taking of any

 

2

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action to enforce this Guaranty against such Italian Guarantor or to require
payment from such Italian Guarantor hereunder.

 

Section 2.                                            Guaranty Absolute.  Each
Guarantor guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Secured Party with respect thereto.  The
Obligations of each Guarantor under or in respect of this Guaranty are
independent of the Guaranteed Obligations or any other Obligations of any other
Loan Party under or in respect of the Loan Documents, and a separate action or
actions may be brought and prosecuted against each Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against any other Loan
Party or whether any other Loan Party is joined in any such action or actions. 
The liability of each Guarantor under this Guaranty shall be irrevocable,
absolute and unconditional irrespective of, and each Guarantor hereby
irrevocably waives any defenses it may now have or hereafter acquire in any way
relating to, any or all of the following:

 

(a)                                  any lack of validity or enforceability of
any Loan Document or any agreement or instrument relating thereto;

 

(b)                                 any change in the time, manner or place of
payment of, or in any other term of, all or any of the Guaranteed Obligations or
any other Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure from
any Loan Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to any Loan Party
or any of its Subsidiaries or otherwise;

 

(c)                                  any taking, exchange, release or
non-perfection of any Collateral or any other collateral, or any taking, release
or amendment or waiver of, or consent to departure from, any other guaranty, for
all or any of the Guaranteed Obligations;

 

(d)                                 any manner of application of Collateral or
any other collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other disposition of any Collateral or any
other collateral for all or any of the Guaranteed Obligations or any other
Obligations of any Loan Party under the Loan Documents or any other assets of
any Loan Party or any of its Subsidiaries;

 

(e)                                  any change, restructuring or termination of
the corporate structure or existence of any Loan Party or any of its
Subsidiaries;

 

(f)                                    any failure of any Secured Party to
disclose to any Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance,

 

3

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properties or prospects of any other Loan Party now or hereafter known to such
Secured Party (each Guarantor waiving any duty on the part of the Secured
Parties to disclose such information);

 

(g)                                 the failure of any other Person to execute
or deliver this Guaranty, any Guaranty Supplement (as hereinafter defined) or
any other guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations;

 

(h)                                 any setoff or counterclaim of any Loan Party
or any defense which results from any disability or other defense of a Loan
Party or the cessation or stay of enforcement from any cause whatsoever of the
liability of a Loan Party (including, without limitation, the lack of validity
or enforceability of any of the Loan Documents);

 

(i)                                     any defense based upon any law, rule or
regulation which provides that the obligation of a surety must not be greater or
more burdensome than the obligation of the principal;

 

(j)                                     any statute of limitations to the extent
permitted by law;

 

(k)                                  any appraisement, valuation, stay,
extension, moratorium, redemption or similar law or similar rights for
marshalling;

 

(l)                                     the absence, impairment or loss of any
right of subrogation, reimbursement, exoneration, contribution or
indemnification or other right or remedy against a Loan Party, any other
guarantor of the Obligations or any security, whether resulting from an election
by the Administrative Agent or any Lender to foreclose upon security by
non-judicial sale, or otherwise; or

 

(m)                               any other circumstance (including, without
limitation, any statute of limitations) or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other guarantor or
surety.

 

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of a Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.

 

4

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Section 3.                                            Waivers and
Acknowledgments.  (a)  Each Guarantor hereby unconditionally and irrevocably
waives promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Guaranteed Obligations
and this Guaranty and any requirement that any Secured Party protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against any Loan Party or any other Person or any Collateral.

 

(b)                                 Each Guarantor hereby unconditionally and
irrevocably waives any right to revoke this Guaranty and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.

 

(c)                                  Each Guarantor hereby unconditionally and
irrevocably waives (i) any defense arising by reason of any claim or defense
based upon an election of remedies by any Secured Party that in any manner
impairs, reduces, releases or otherwise adversely affects the subrogation,
reimbursement, exoneration, contribution or indemnification rights of such
Guarantor or other rights of such Guarantor to proceed against any of the other
Loan Parties, any other guarantor or any other Person or any Collateral and (ii)
any defense based on any right of set-off or counterclaim against or in respect
of the Obligations of such Guarantor hereunder.

 

(d)                                 Each Guarantor acknowledges that the
Administrative Agent may, without notice to or demand upon such Guarantor and
without affecting the liability of such Guarantor under this Guaranty, foreclose
under any mortgage by nonjudicial sale, and each Guarantor hereby waives any
defense to the recovery by the Administrative Agent and the other Secured
Parties against such Guarantor of any deficiency after such nonjudicial sale and
any defense or benefits that may be afforded by applicable law.

 

(e)                                  Each Guarantor hereby waives any right to
be informed by the Administrative Agent or any Lender of the financial condition
of any other Loan Party or any other guarantor of the Guaranteed Obligations or
any change therein or any other circumstances bearing upon the risk of
nonpayment or nonperformance of the Guaranteed Obligations.

 

(f)                                    Each Guarantor hereby waives any right it
may have to a fair value hearing to determine the size of a deficiency judgment
following any foreclosure on any security for the Guaranteed Obligations.

 

(g)                                 Without limiting the scope of any of the
foregoing provisions of this Section 3, each Guarantor hereby further waives (i)
all rights and defenses arising out of an election of remedies by the
Administrative Agent or any Lender, even though that election of remedies, such
as a non-judicial foreclosure with respect to security for any Guaranteed

 

5

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Obligation, has destroyed such Guarantor’s rights of subrogation and
reimbursements against any other Loan Party by the operation of Section 580d of
the California Code of Civil Procedure or otherwise, (ii) all rights and
defenses such Guarantor may have by reason of protection afforded to any other
Loan Party with respect to the Guaranteed Obligations pursuant to the
antideficiency or other laws of California limiting or discharging the
Guaranteed Obligations, including, without limitation, Section 580a, 580b, 580d
or 726 of the California Code of Civil Procedure, and (III) all other rights and
defenses available to such Guarantor by reason of Sections 2787 to 2855,
inclusive, Section 2899 or Section 3433 of the California Civil Code or
Section 3605 of the California Commercial Code.

 

(h)                                 Each Guarantor is fully aware of the
financial condition and affairs of each other Loan Party.  Each Guarantor has
executed this Agreement without reliance upon any representation, warranty,
statement or information concerning any other Loan Party furnished to such
Guarantor by the Administrative Agent or any Lender and has, independently, and
without reliance on the Administrative Agent or any Lender, and based upon such
documents and information as it has deemed appropriate, made its own appraisal
of the financial condition and affairs of each other Loan Party and of other
circumstances affecting the risk of nonpayment or nonperformance of the
Guaranteed Obligations.  Each Guarantor is in a position to obtain and assumes
full responsibility for obtaining, any additional information about the
financial condition and affairs of each other Loan Party and of other
circumstances affecting the risk of nonpayment or nonperformance of the
Guaranteed Obligations and will, independently and without reliance upon the
Administrative Agent or any Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own appraisals
and decisions in taking or not taking action in connection with this Guaranty.

 

(i)                                     Each Guarantor acknowledges that it will
receive substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in Section 2
and this Section 3 are knowingly made in contemplation of such benefits.

 

Section 4.                                            Subrogation.  Each
Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against a Borrower, any other
Loan Party or any other insider guarantor that arise from the existence,
payment, performance or enforcement of such Guarantor’s Obligations under or in
respect of this Guaranty or any other Loan Document, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of any
Secured Party against a Borrower, any other Loan Party or any other insider
guarantor or any Collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from a Borrower, any other Loan Party
or any other insider guarantor, directly or indirectly, in

 

6

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cash or other property or by set-off or in any other manner, payment or security
on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash, all Letters of Credit shall have expired or been
terminated and the Commitments shall have expired or been terminated.  If any
amount shall be paid to any Guarantor in violation of the immediately preceding
sentence at any time prior to the latest of (a) the payment in full in cash of
the Guaranteed Obligations and all other amounts payable under this Guaranty,
(b) the Termination Date and (c) the latest date of expiration or termination of
all Letters of Credit, such amount shall be received and held in trust for the
benefit of the Secured Parties, shall be segregated from other property and
funds of such Guarantor and shall forthwith be paid or delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held
as Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising.  If (i) any Guarantor shall make payment to any
Secured Party of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash, (iii) the Termination Date shall have occurred
and (iv) all Letters of Credit shall have expired or been terminated, the
Secured Parties will, at such Guarantor’s request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment made by such Guarantor pursuant to this Guaranty.

 

Section 5.                                            Payments Free and Clear of
Taxes, Etc.  (a)  Any and all payments made by any Guarantor under or in respect
of this Guaranty or any other Loan Document shall be made, in accordance with
Section 2.12 of the Credit Agreement, free and clear of and without deduction
for any and all present or future Taxes.  If any Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable under or in
respect of this Guaranty or any other Loan Document to any Secured Party, (i)
the sum payable by such Guarantor shall be increased as may be necessary so that
after such Guarantor and the Administrative Agent have made all required
deductions (including deductions applicable to additional sums payable under
this Section 5), such Secured Party receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Guarantor shall make
all such deductions and (iii) such Guarantor shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.

 

(b)                                 In addition, each Guarantor agrees to pay
any present or future Other Taxes that arise from any payment made by or on
behalf of such Guarantor under or in respect of

 

7

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this Guaranty or any other Loan Document or from the execution, delivery or
registration of, performance under, or otherwise with respect to, this Guaranty
and the other Loan Documents.

 

(c)                                  Each Guarantor will indemnify each Secured
Party for and hold it harmless against the full amount of Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 5, imposed on or paid by such Secured Party
and any liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto.  This indemnification shall be made
within 30 days from the date such Secured Party makes written demand therefor.

 

(d)                                 The obligations of each Guarantor under this
Section are subject in all respects to the limitations, qualifications and
satisfaction of conditions set forth in Section 2.13 of the Credit Agreement.

 

Section 6.                                            Representations and
Warranties.  Each Guarantor hereby makes each representation and warranty made
in the Loan Documents by the Company with respect to such Guarantor and each
Guarantor hereby further represents and warrants as follows:

 

(a)                                  There are no conditions precedent to the
effectiveness of this Guaranty that have not been satisfied or waived.

 

(b)                                 Such Guarantor has, independently and
without reliance upon any Secured Party and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty and each other Loan Document to which it is
or is to be a party, and such Guarantor has established adequate means of
obtaining from each other Loan Party on a continuing basis information
pertaining to, and is now and on a continuing basis will be completely familiar
with, the business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Loan Party.

 

Section 7.                                            Covenants.  Each Guarantor
covenants and agrees that, so long as any part of the Guaranteed Obligations
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment, such Guarantor will perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms,
covenants and agreements set forth in the Loan Documents on its or their part to
be performed or observed or that the Company has agreed to cause such Guarantor
or such Subsidiaries to perform or observe.

 

Section 8.                                            Amendments, Guaranty
Supplements, Etc.  (a)  No amendment or waiver of any provision of this Guaranty
and no consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent and the Required Lenders, and then such waiver or consent shall be

 

8

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effective only in the specific instance and for the specific purpose for which
given, provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all of the Secured Parties (a) reduce or limit the
obligations of any Guarantor hereunder, release any Guarantor hereunder or
otherwise limit any Guarantor’s liability with respect to the Obligations owing
to the Secured Parties under or in respect of the Loan Documents except as
provided in the next succeeding sentence, (b) postpone any date fixed for
payment hereunder or (c) change the number of Secured Parties or the percentage
of (x) the Commitments, (y) the aggregate unpaid principal amount of the
Advances or (z) the aggregate Available Amount of outstanding Letters of Credit
that, in each case, shall be required for the Secured Parties or any of them to
take any action hereunder.  Upon the sale of a Guarantor to the extent permitted
in accordance with the terms of the Loan Documents, such Guarantor shall be
automatically released from this Guaranty.

 

(b)                                 Upon the execution and delivery by any
Person of a guaranty supplement in substantially the form of Exhibit A hereto
(each a “Guaranty Supplement”), (i) such Person shall be referred to as an
“Additional Guarantor” and shall become and be a Guarantor hereunder, and each
reference in this Guaranty to a “Guarantor” shall also mean and be a reference
to such Additional Guarantor, and each reference in any other Loan Document to a
“Guarantor” or a “Non-U.S. Guarantor” shall also mean and be a reference to such
Additional Guarantor, and (ii) each reference herein to “this Guaranty”,
“hereunder”, “hereof” or words of like import referring to this Guaranty, and
each reference in any other Loan Document to the “Guaranty”, “Non-U.S.
Guaranty”, “thereunder”, “thereof” or words of like import referring to this
Guaranty, shall mean and be a reference to this Guaranty as supplemented by such
Guaranty Supplement.

 

Section 9.                                            Notices, Etc.  All notices
and other communications provided for hereunder shall be in writing (including
telegraphic or telecopy communication) and mailed, telecopied or delivered to
it, if to any Guarantor, addressed to it in care of the Company at the Company’s
address specified in Section 9.02 of the Credit Agreement, if to any Agent or
Lender Party, at its address specified in Section 9.02 of the Credit Agreement
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other party.  All such notices and other
communications shall, when mailed, telegraphed or telecopied, be effective when
deposited in the mails, delivered to the telegraph company or transmitted by
telecopier, respectively.  Delivery by telecopier of an executed counterpart of
a signature page to any amendment or waiver of any provision of this Guaranty or
of any Guaranty Supplement to be executed and delivered hereunder shall be
effective as delivery of an original executed counterpart thereof.

 

Section 10.                                      No Waiver; Remedies.  No
failure on the part of any Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor

 

9

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shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right.  The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.

 

Section 11.                                      Right of Set-Off.  Upon (a) the
occurrence and during the continuance of any Event of Default and (b) the making
of the request or the granting of the consent specified by Section 6.01 of the
Credit Agreement to authorize the Administrative Agent to declare the Notes due
and payable pursuant to the provisions of said Section 6.01, each Agent and each
Lender Party and each of their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Agent, such Lender Party or such Affiliate to or for the credit or the account
of any Guarantor against any and all of the Obligations of such Guarantor now or
hereafter existing under the Loan Documents, irrespective of whether such Agent
or such Lender Party shall have made any demand under this Guaranty or any other
Loan Document and although such Obligations may be unmatured.  Each Agent and
each Lender Party agrees promptly to notify such Guarantor after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.  The rights of
each Agent and each Lender Party and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.

 

Section 12.                                      Indemnification.  (a)  Without
limitation of any other Obligations of any Guarantor or remedies of the Secured
Parties under this Guaranty, each Guarantor shall, to the fullest extent
permitted by law, indemnify, defend and save and hold harmless each Secured
Party and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an “Indemnified Party”) from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party in connection with or as a result of any failure of any Guaranteed
Obligations to be the legal, valid and binding obligations of any Loan Party
enforceable against such Loan Party in accordance with their terms.

 

(b)                                 In no event shall any of the Indemnified
Parties have any liability (whether direct or indirect, in contract, tort or
otherwise) to any of the Guarantors or any of their respective Affiliates or any
of their respective officers, directors, employees, agents and advisors, for any
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Facility, the actual or proposed use of the proceeds of the
Advances or the Letters of Credit, the Transaction Documents or any of the
transactions contemplated by the Transaction Documents.

 

10

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(c)                                  Without prejudice to the survival of any of
the other agreements of any Guarantor under this Guaranty or any of the other
Loan Documents, the agreements and obligations of each Guarantor contained in
Section 1(a) (with respect to enforcement expenses), the last sentence of
Section 2, Section 5 and this Section 12 shall survive the payment in full of
the Guaranteed Obligations and all of the other amounts payable under this
Guaranty.

 

Section 13.                                      Subordination.  Each Guarantor
hereby subordinates any and all debts, liabilities and other Obligations owed to
such Guarantor by each other Loan Party (the “Subordinated Obligations”) to the
Guaranteed Obligations to the extent and in the manner hereinafter set forth in
this Section 13:

 

(a)                                  Prohibited Payments, Etc.  Except during
the continuance of a Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), each
Guarantor may receive regularly scheduled payments from any other Loan Party on
account of the Subordinated Obligations.  After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), however,
unless the Administrative Agent otherwise agrees, no Guarantor shall demand,
accept or take any action to collect any payment on account of the Subordinated
Obligations.

 

(b)                                 Prior Payment of Guaranteed Obligations.  In
any proceeding under any Bankruptcy Law relating to any other Loan Party, each
Guarantor agrees that the Secured Parties shall be entitled to receive payment
in full in cash of all Guaranteed Obligations (including all interest and
expenses accruing after the commencement of a proceeding under any Bankruptcy
Law, whether or not constituting an allowed claim in such proceeding (“Post
Petition Interest”)) before such Guarantor receives payment of any Subordinated
Obligations.

 

(c)                                  Turn-Over.  After the occurrence and during
the continuance of any Default (including the commencement and continuation of
any proceeding under any Bankruptcy Law relating to any other Loan Party), each
Guarantor shall, if the Administrative Agent so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for the
Secured Parties and deliver such payments to the Administrative Agent on account
of the Guaranteed Obligations (including all Post Petition Interest), together
with any necessary endorsements or other instruments of transfer, but without
reducing or affecting in any manner the liability of such Guarantor under the
other provisions of this Guaranty.

 

(d)                                 Administrative Agent.  After the occurrence
and during the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any other
Loan Party), the Administrative Agent is authorized and empowered (but without
any obligation to so do), in its discretion, (i) in the name of each

 

11

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Guarantor, to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and to apply any amounts received thereon to the
Guaranteed Obligations (including any and all Post Petition Interest), and (ii)
to require each Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Borrowers or their assignees for application to the
Guaranteed Obligations (including any and all Post Petition Interest).

 

Section 14.                                      Continuing Guaranty;
Assignments under the Credit Agreement.  This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until the latest of (i) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (ii) the Termination Date and (iii) the latest date
of expiration or termination of all Letters of Credit, (b) be binding upon the
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors, transferees and
assigns.  Without limiting the generality of clause (c) of the immediately
preceding sentence, any Secured Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party herein or otherwise, in each case as and to the extent
provided in Section 9.07 of the Credit Agreement.  No Guarantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.

 

Section 15.                                      Execution in Counterparts. 
This Guaranty and each amendment, waiver and consent with respect hereto may be
executed in any number of counterparts and by different parties thereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.  Delivery of an executed counterpart of a signature page to this
Guaranty by telecopier shall be effective as delivery of an original executed
counterpart of this Guaranty.

 

Section 16.                                      Judgment.  (a)  If for the
purposes of obtaining judgment in any court it is necessary to convert a sum due
hereunder in Dollars into another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase Dollars with such other currency at BNP
Paribas’ principal office in London at 11:00 A.M. (London time) on the Business
Day preceding that on which final judgment is given.

 

(b)                                 If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder in a foreign currency
into Dollars, the parties agree to the fullest extent that they may effectively
do so, that the rate of exchange used shall be that at which in

 

12

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accordance with normal banking procedures the Administrative Agent could
purchase such foreign currency with Dollars at BNP Paribas’ principal office in
London at 11:00 A.M. (London time) on the Business Day preceding that on which
final judgment is given.

 

(c)                                  The obligations of each Guarantor in
respect of any sum due from it in any currency (the “Primary Currency”) to the
Secured Parties hereunder and under the Loan Documents shall, notwithstanding
any judgment in any other currency, be discharged only to the extent that on the
Business Day following receipt by the Administrative Agent of any sum adjudged
to be so due in such other currency, the Administrative Agent may in accordance
with normal banking procedures purchase the applicable Primary Currency with
such other currency; if the amount of the applicable Primary Currency so
purchased is less than such sum due to the Administrative Agent or other Secured
Parties (as the case may be) in the applicable Primary Currency, each Guarantor
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent and the other Secured Parties against such
loss, and if the amount of the applicable Primary Currency so purchased exceeds
such sum due to the Administrative Agent or other Secured Parties (as the case
may be) in the applicable Primary Currency, the Administrative Agent or other
Secured Party (as the case may be) agrees to remit to such Guarantor such
excess.

 

Section 17.                                      Governing Law; Jurisdiction;
Waiver of Jury Trial, Etc..  (a)  This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of California.

 

(b)                                 Each Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any California State court or federal court of the United States
of America sitting in Los Angeles, California, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Guaranty
or any of the other Loan Documents to which it is or is to be a party, or for
recognition or enforcement of any judgment, and each Guarantor hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such California State
court or, to the extent permitted by law, in such federal court.  Each Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Guaranty or any other Loan
Document shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Guaranty or any other Loan Document in the
courts of any jurisdiction.

 

(c)                                  Each Guarantor irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Guaranty or
any

 

13

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of the other Loan Documents to which it is or is to be a party in any California
State or federal court.  Each Guarantor hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.

 

(d)                                 Each Guarantor hereby agrees that service of
process in any such action or proceeding brought in the any such California
State court or in such federal court may be made upon International Rectifier
Corporation at its offices at 233 Kansas Street, El Segundo, California 90245
Attention: Executive Vice President (the “Process Agent”) and each Guarantor
hereby irrevocably appoints the Process Agent its authorized agent to accept
such service of process, and agrees that the failure of the Process Agent to
give any notice of any such service shall not impair or affect the validity of
such service or of any judgment rendered in any action or proceeding based
thereon.  Each Guarantor hereby further irrevocably consents to the service of
process in any action or proceeding in such courts by the mailing thereof by any
parties hereto by registered or certified mail, postage prepaid, to the Process
Agent at the address above.  Each Guarantor party hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Guaranty shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Guaranty
or the Loan Documents in the courts of any jurisdiction.  To the extent that
each Guarantor has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, each Guarantor hereby
irrevocably waives such immunity in respect of its obligations under this
Guaranty.

 

14

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(e)                                  EACH GUARANTOR 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 ANY OF THE
LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.

 

 

 

[GUARANTORS]

 

 

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

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EXHIBIT A

TO NON-U.S.

GUARANTY

 

 

FORM OF GUARANTY SUPPLEMENT

 

 

                          , 200   

 

 

BNP Paribas, as Administrative Agent

Attn. Tjalling Terpstra
1 Front Street
San Francisco, California 94111

Telecopier number (415) 296-8954

With a copy to:  Tjalling Terpstra,

Telecopier number (213) 488-9602

 

 

Credit Agreement dated as of November 7, 2003 among International Rectifier
Corporation, a Delaware corporation (the “Company”), the Lender Parties party
thereto, Wells Fargo Bank, N.A. and Union Bank of California as Co-Syndication
Agents, Comerica Bank and Fleet Bank as Co-Documentation Agents, BNP Paribas as
Sole Arranger and Initial Issuing Bank and BNP Paribas as Administrative Agent.

 

 

Ladies and Gentlemen:

 

Reference is made to the above-captioned Credit Agreement and to the Non-U.S.
Guaranty referred to therein (such Non-U.S. Guaranty, as in effect on the date
hereof and as it may hereafter be amended, supplemented or otherwise modified
from time to time, together with this Guaranty Supplement, being the
“Guaranty”).  The capitalized terms defined in the Guaranty or in the Credit
Agreement and not otherwise defined herein are used herein as therein defined.

 

Section 1.  Guaranty; Limitation of Liability.  (a)  The undersigned hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all Obligations of each other Loan Party
that is organized under the laws of a jurisdiction outside of the United States,
now or hereafter existing under or in respect of the Loan

 

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Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premium, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the “Guaranteed
Obligations”), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or any other Secured Party in enforcing any rights under this Guaranty
Supplement, the Guaranty or any other Loan Document.  Without limiting the
generality of the foregoing, the undersigned?s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party that is organized under the laws of a jurisdiction outside
of the United States to any Secured Party under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
such other Loan Party.

 

(b)                                 The undersigned, and by its acceptance of
this Guaranty Supplement, the Administrative Agent and each other Secured Party,
hereby confirms that it is the intention of all such Persons that this Guaranty
Supplement, the Guaranty and the Obligations of the undersigned hereunder and
thereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to
this Guaranty Supplement, the Guaranty and the Obligations of the undersigned
hereunder and thereunder.  To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the undersigned hereby
irrevocably agree that the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty at any time shall be limited to the maximum amount
as will result in the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty not constituting a fraudulent transfer or
conveyance.

 

(c)                                  The undersigned hereby unconditionally and
irrevocably agrees that in the event any payment shall be required to be made to
any Secured Party under this Guaranty Supplement, the Guaranty or any other
guaranty, the undersigned will contribute, to the maximum extent permitted by
applicable law, such amounts to each other Guarantor and each other guarantor so
as to maximize the aggregate amount paid to the Secured Parties under or in
respect of the Loan Documents.

 

Section 2.  Obligations Under the Guaranty.  The undersigned hereby agrees, as
of the date first above written, to be bound as a Guarantor by all of the terms
and conditions of the Guaranty to the same extent as each of the other
Guarantors thereunder.  The undersigned further agrees, as of the date first
above written, that each reference in the Guaranty to an “Additional Guarantor”
or a “Guarantor” shall also mean and be a reference to the undersigned, and each

 

A-2

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reference in any other Loan Document to a “Guarantor” , a “Non-U.S. Guarantor”
or a “Loan Party” shall also mean and be a reference to the undersigned.

 

Section 3.  Representations and Warranties.  The undersigned hereby makes each
representation and warranty set forth in Section 6 of the Guaranty to the same
extent as each other Guarantor.

 

Section 4.  Delivery by Telecopier.  Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by telecopier shall be effective as
delivery of an original executed counterpart of this Guaranty Supplement.

 

Section 5.  Judgment.  (a) If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due hereunder in Dollars into another
currency, the undersigned agrees, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase Dollars with
such other currency at BNP Paribas’ principal office in London at 11:00 A.M.
(London time) on the Business Day preceding that on which final judgment is
given.

 

(b)                                 If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder in a foreign currency
into Dollars, the undersigned agrees to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase such foreign currency with Dollars at BNP Paribas’ principal office in
London at 11:00 A.M. (London time) on the Business Day preceding that on which
final judgment is given.

 

(c)                                  The obligations of the undersigned in
respect of any sum due from it in any currency (the “Primary Currency”) to the
Secured Parties hereunder and under the Loan Documents shall, notwithstanding
any judgment in any other currency, be discharged only to the extent that on the
Business Day following receipt by the Administrative Agent of any sum adjudged
to be so due in such other currency, the Administrative Agent may in accordance
with normal banking procedures purchase the applicable Primary Currency with
such other currency; if the amount of the applicable Primary Currency so
purchased is less than such sum due to the Administrative Agent or other Secured
Parties (as the case may be) in the applicable Primary Currency, the undersigned
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent and the other Secured Parties against such
loss, and if the amount of the applicable Primary Currency so purchased exceeds
such sum due to the Administrative Agent or other Secured Parties (as the case
may be) in the applicable Primary Currency, the Administrative Agent or other
Secured Party (as the case may be) agrees to remit to the undersigned such
excess.

 

A-3

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Section 6.  Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.  (a)  This
Guaranty Supplement shall be governed by, and construed in accordance with, the
laws of the State of California.

 

(b)                                 The undersigned hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any California State court or any federal court of the United
States of America sitting in Los Angeles, California, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Guaranty Supplement, the Guaranty or any of the other Loan Documents to which it
is or is to be a party, or for recognition or enforcement of any judgment, and
the undersigned hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
California State court or, to the extent permitted by law, in such federal
court.  The undersigned agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.  Nothing in this
Guaranty Supplement or the Guaranty or any other Loan Document shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty Supplement, the Guaranty or any of the other Loan
Documents to which it is or is to be a party in the courts of any other
jurisdiction.

 

(c)                                  The undersigned irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Guaranty
Supplement, the Guaranty or any of the other Loan Documents to which it is or is
to be a party in any California State or federal court.  The undersigned hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.

 

(d)                                 The undersigned hereby agrees that service
of process in any such action or proceeding brought in the any such California
State court or in such federal court may be made upon International Rectifier
Corporation at its offices at 233 Kansas Street, El Segundo, California 90245
Attention: Executive Vice President (the “Process Agent”) and the undersigned
hereby irrevocably appoints the Process Agent its authorized agent to accept
such service of process, and agrees that the failure of the Process Agent to
give any notice of any such service shall not impair or affect the validity of
such service or of any judgment rendered in any action or proceeding based
thereon.  The undersigned hereby further irrevocably consents to the service of
process in any action or proceeding in such courts by the mailing thereof by any
parties hereto by registered or certified mail, postage prepaid, to the Process
Agent at the address above.  The undersigned agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. 
Nothing in this Guaranty shall affect any right that any party may otherwise
have to

 

A-4

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bring any action or proceeding relating to this Guaranty or the Loan Documents
in the courts of any jurisdiction.  To the extent that the undersigned has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, the undersigned hereby irrevocably waives such immunity in
respect of its obligations under this Guaranty.

 

(e)                                  THE UNDERSIGNED 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 ANY OF THE
LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 

 

 

Very truly yours,

 

 

 

[NAME OF ADDITIONAL GUARANTOR]

 

 

 

 

 

By

 

 

 

 

Name:

 

 

Title:

 

A-5

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EXHIBIT E-3

TO CREDIT

AGREEMENT

 

 

FORM OF NON-U.S. GUARANTY

 

From

 

THE GUARANTORS NAMED HEREIN

 

and

 

THE ADDITIONAL GUARANTORS REFERRED TO HEREIN

 

as Guarantors

 

in favor of

 

THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN

 

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TABLE OF CONTENTS

 

Section 1.

 

Guaranty; Limitation of Liability

 

Section 2.

 

Guaranty Absolute

 

Section 3.

 

Waivers and Acknowledgments

 

Section 4.

 

Subrogation

 

Section 5.

 

Payments Free and Clear of Taxes, Etc

 

Section 6.

 

Representations and Warranties

 

Section 7.

 

Covenants

 

Section 8.

 

Amendments, Guaranty Supplements, Etc

 

Section 9.

 

Notices, Etc

 

Section 10.

 

No Waiver; Remedies

 

Section 11.

 

Right of Set-Off

 

Section 12.

 

Indemnification

 

Section 13.

 

Subordination

 

Section 14.

 

Continuing Guaranty; Assignments under the Credit Agreement

 

Section 15.

 

Execution in Counterparts

 

Section 16.

 

Judgment

 

Section 17.

 

Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.

 

 

 

 

 

 

 

 

 

Exhibit A

-

Form of Guaranty Supplement

 

 

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