EXHIBIT 10.76

EXECUTION COPY

 

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[Published CUSIP Number:         ]

CREDIT AGREEMENT

Dated as of November 1, 2006

among

SPANSION LLC,

as the Borrower,

SPANSION INC.,

as a Guarantor,

BANK OF AMERICA, N.A.,

as Administrative Agent

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Sole Book Manager

 

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TABLE OF CONTENTS

 

         Page ARTICLE I  

DEFINITIONS AND ACCOUNTING TERMS

   1

   1.01

  Defined Terms    1

   1.02

  Other Interpretive Provisions    26

   1.03

  Accounting Terms    27

   1.04

  Rounding    29

   1.05

  Times of Day    29

   1.06

  Currency Equivalents Generally    29 ARTICLE II  

THE COMMITMENTS AND CREDIT EXTENSIONS

   29

   2.01

  The Loans    29

   2.02

  Borrowings, Conversions and Continuations of Loans    29

   2.03

  Prepayments    31

   2.04

  Termination or Reduction of Commitments    33

   2.05

  Repayment of Loans    33

   2.06

  Interest    34

   2.07

  Fees    34

   2.08

  Computation of Interest and Fees    34

   2.09

  Evidence of Debt    35

   2.10

  Payments Generally; Administrative Agent’s Clawback    35

   2.11

  Sharing of Payments by Lenders    37 ARTICLE III  

TAXES, YIELD PROTECTION AND ILLEGALITY

   38

   3.01

  Taxes    38

   3.02

  Illegality    41

   3.03

  Inability to Determine Rates    41

   3.04

  Increased Costs; Reserves on Eurodollar Rate Loans    42

   3.05

  Compensation for Losses    43

   3.06

  Mitigation Obligations; Replacement of Lenders    43

   3.07

  Survival    44 ARTICLE IV  

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

   44

   4.01

  Conditions of Initial Credit Extension    44

   4.02

  Conditions to all Credit Extensions    48

 

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TABLE OF CONTENTS

(continued)

 

          Page

ARTICLE V

  

REPRESENTATIONS AND WARRANTIES

   49

   5.01

   Existence, Qualification and Power    49

   5.02

   Authorization; No Contravention    49

   5.03

   Governmental Authorization; Other Consents    50

   5.04

   Binding Effect    50

   5.05

   Financial Statements; No Material Adverse Effect; No Internal Control Event
   50

   5.06

   Litigation    51

   5.07

   No Default    51

   5.08

   Ownership of Property; Liens; Investments    51

   5.09

   Environmental Compliance    55

   5.10

   Insurance    55

   5.11

   Taxes    53

   5.12

   ERISA Compliance    53

   5.13

   Subsidiaries; Equity Interests; Loan Parties    54

   5.14

   Margin Regulations; Investment Company Act    54

   5.15

   Disclosure    54

   5.16

   Compliance with Laws    55

   5.17

   Intellectual Property; Licenses, Etc    55

   5.18

   Solvency    55

   5.19

   Casualty, Etc    55

   5.20

   Labor Matters    55

   5.21

   Transactions with Affiliates    56

   5.22

   Broker’s Fees    56

ARTICLE VI

  

AFFIRMATIVE COVENANTS

   56

   6.01

   Financial Statements    56

   6.02

   Certificates; Other Information    57

   6.03

   Notices    59

   6.04

   Payment of Obligations    60

   6.05

   Preservation of Existence, Etc    61

 

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TABLE OF CONTENTS

(continued)

 

          Page

   6.06

   Maintenance of Properties    61

   6.07

   Maintenance of Insurance    61

   6.08

   Compliance with Laws    62

   6.09

   Books and Records    62

   6.10

   Inspection Rights    62

   6.11

   Use of Proceeds    63

   6.12

   Covenant to Guarantee Obligations and Give Security    63

   6.13

   Compliance with Environmental Laws    64

   6.14

   Preparation of Environmental Reports    66

   6.15

   Further Assurances    66

   6.16

   Compliance with Terms of Leaseholds    66

   6.17

   Interest Rate Hedging    66

   6.18

   Lien Searches    66

   6.19

   Material Contracts    69

   6.20

   Designation as Senior Debt    67

ARTICLE VII

  

NEGATIVE COVENANTS

   67

   7.01

   Liens    67

   7.02

   Indebtedness    68

   7.03

   Investments    70

   7.04

   Fundamental Changes    72

   7.05

   Dispositions    73

   7.06

   Restricted Payments    74

   7.07

   Change in Nature of Business    75

   7.08

   Transactions with Affiliates    75

   7.09

   Burdensome Agreements    76

   7.10

   Use of Proceeds    76

   7.11

   Financial Covenants    76

   7.12

   Capital Expenditures    77

   7.13

   Amendments of Organization Documents    77

   7.14

   Accounting Changes    78

 

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TABLE OF CONTENTS

(continued)

 

         Page

   7.15

  Prepayments, Etc. of Indebtedness    78

   7.16

  Amendment, Etc. of High Yield Notes Documents and other Indebtedness    78

   7.17

  Holding Company    78

   7.18

  Designation of Senior Debt    78

   7.19

  Capital Structure    78

ARTICLE VIII

 

EVENTS OF DEFAULT AND REMEDIES

   79

   8.01

  Events of Default    79

   8.02

  Remedies upon Event of Default    81

   8.03

  Application of Funds    81

ARTICLE IX

 

ADMINISTRATIVE AGENT

   82

   9.01

  Appointment and Authority    82

   9.02

  Rights as a Lender    83

   9.03

  Exculpatory Provisions    83

   9.04

  Reliance by Administrative Agent    84

   9.05

  Delegation of Duties    84

   9.06

  Resignation of Administrative Agent    84

   9.07

  Non-Reliance on Administrative Agent and Other Lenders    85

   9.08

  No Other Duties, Etc    85

   9.09

  Administrative Agent May File Proofs of Claim    85

   9.10

  Collateral and Guaranty Matters    86

ARTICLE X

 

CONTINUING GUARANTY

   87

  10.01

  Guaranty    87

  10.02

  Rights of Lenders    87

  10.03

  Certain Waivers    88

  10.04

  Obligations Independent    88

  10.05

  Subrogation    88

  10.06

  Termination; Reinstatement    88

  10.07

  Subordination    89

  10.08

  Stay of Acceleration    89

  10.09

  Condition of Borrower    89

 

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TABLE OF CONTENTS

(continued)

 

          Page

   10.10

   Additional Guarantor Waivers and Agreements    89

ARTICLE XI

  

MISCELLANENOUS

   90

   11.01

   Amendments, Etc    90

   11.02

   Notices; Effectiveness; Electronic Communications    92

   11.03

   No Waiver; Cumulative Remedies    94

   11.04

   Expenses; Indemnity; Damage Waiver    94

   11.05

   Payments Set Aside    96

   11.06

   Successors and Assigns    96

   11.07

   Treatment of Certain Information; Confidentiality    100

   11.08

   Right of Setoff    101

   11.09

   Interest Rate Limitation    101

   11.10

   Counterparts; Effectiveness    101

   11.11

   Survival of Representations and Warranties    102

   11.12

   Severability    102

   11.13

   Replacement of Lenders    102

   11.14

   Governing Law; Jurisdiction; Etc    103

   11.15

   Waiver of Jury Trial    104

   11.16

   No Advisory or Fiduciary Responsibility    104

   11.17

   USA PATRIOT Act Notice    105

   11.18

   Time of the Essence    105

   11.19

   ENTIRE AGREEMENT    105

   11.20

   DESIGNATED SENIOR DEBT    105

 

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SCHEDULES

    

2.01

  

Commitments and Applicable Percentages

 

4.01(a)(iv)

  

Mortgaged Property

 

5.03

  

Certain Authorizations

 

5.05

  

Supplement to Interim Financial Statements

 

5.06

  

Disclosed Litigation

 

5.08(b)

  

Existing Liens

 

5.08(c)

  

Owned Real Property

 

5.08(d)(i)

  

Leased Real Property (Lessee)

 

5.08(d)(ii)

  

Leased Real Property (Lessor)

 

5.08(e)

  

Existing Investments

 

5.09

  

Environmental Matters

 

5.13

  

Subsidiaries and Other Equity Investments; Loan Parties

 

5.20

  

Labor Matters

 

5.21

  

Transactions with Affiliates

 

6.12

  

Guarantors

 

6.18

  

Material Contracts

 

7.02

  

Existing Indebtedness

 

7.09

  

Burdensome Agreements

 

11.02

  

Administrative Agent’s Office, Certain Addresses for Notices

 

EXHIBITS

 

   Form of    A    Committed Loan Notice    B    Note    C    Compliance
Certificate    D    Assignment and Assumption    E    Guaranty    F    Security
Agreement    G    Mortgage    H    Reserved    I-1    Opinion Matters – Counsel
to Loan Parties    I-2    Opinion Matters – Local Counsel to Loan Parties    J
   Joinder Agreement    K    Intercreditor Agreement

CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of November 1, 2006,
among SPANSION LLC, a Delaware limited liability company (the “Borrower”),
SPANSION INC., a Delaware corporation (“Holdings”), each lender from time to
time party hereto (collectively, the “Lenders” and individually, a “Lender”),
and BANK OF AMERICA, N.A., as Administrative Agent.

 

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PRELIMINARY STATEMENTS:

The Borrower has requested that the Lenders provide a term loan facility, and
the Lenders have indicated their willingness to lend on the terms and subject to
the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Account Control Agreements” has the meaning specified in the Security
Agreement.

“Accounts” means all of the Borrower’s now owned or hereafter acquired or
arising accounts, as defined in the UCC, including any rights to payment for the
sale or lease of goods or rendition of services, whether or not they have been
earned by performance.

“Accounts Receivable” means, at any date of determination, the difference of
(a) the gross amount of Accounts originated and owned by the Borrower on the
date of such determination arising from fully consummated unconditional sales in
the ordinary course of business to Persons who are not Affiliates of the
Borrower with respect to which no more than 90 days have elapsed since the date
of the original invoice therefor or which is no more than 60 days past due and
which have not been determined by the Borrower or the Administrative Agent to be
uncollectible for any reason less (b) sales, excise or similar taxes, and less
returns, discounts, claims, credits and allowances, accrued rebates, offsets,
deductions, counterclaims, disputes and other defenses of any nature at any time
issued, owing, granted, outstanding, available or claimed with respect to such
Accounts.

“Acquisition” by any Person, means the purchase or acquisition in a single
transaction or a series of related transactions by any such Person, individually
or, together with its Affiliates, of (a) any Equity Interest of any other Person
(other than an existing Subsidiary of the Borrower) which are sufficient such
that such other Person becomes a direct or indirect Subsidiary of the Borrower
or (b) all or a substantial portion of the property, including, without
limitation, all or a substantial portion of the property comprising a division,
business unit or line of business, of any other Person (other than a Subsidiary
of the Borrower), whether involving a merger or consolidation with such other
Person. “Acquire” has a meaning correlative thereto.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

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“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Aggregate Credit Exposures” means, at any time, the aggregate amount of the
Loans outstanding at such time.

“Agreement” means this Credit Agreement.

“AMD” means Advanced Micro Devices, Inc., a Delaware corporation.

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Facility represented
by (a) on or prior to the Funding Date, such Lender’s Commitment at such time
and (b) thereafter, the principal amount of such Lender’s Loans at such time.
The initial Applicable Percentage of each Lender in respect of each Facility is
set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.

“Applicable Rate” means the applicable percentage per annum set forth below
determined by reference to S&P’s corporate credit rating of Holdings and Moody’s
corporate family rating of Holdings (the “Ratings”):

Applicable Rate

 

Pricing
Level

  

Ratings

   Eurodollar
Rate
Loans     Base
Rate
Loans  

1

   Less than B by S&P or Less than B2 by Moody’s    3.00 %   2.00 %

2

   B or better by S&P and B2 or better by Moody’s    2.75 %   1.75 %

; provided, that if only one or no Rating is issued, then Pricing Level 1 shall
apply.

“Appropriate Lender” means, at any time, with respect to the Facility, a Lender
that has a Commitment with respect to such Facility or holds a Loan at such
time.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Arranger” means Banc of America Securities LLC, in its capacity as sole lead
arranger and sole book manager.

 

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“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.06(b), and accepted by the Administrative Agent, in
substantially the form of Exhibit D or any other form approved by the
Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease or
other agreement or instrument were accounted for as a Capitalized Lease and
(c) all Synthetic Debt of such Person.

“Audited Financial Statements” means the audited consolidated balance sheet of
Holdings and its Subsidiaries for the fiscal year ended December 25, 2005, and
the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of Holdings and its Subsidiaries,
including the notes thereto.

“Bank of America” means Bank of America, N.A. and its successors.

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate.” The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period made
by each of the Lenders pursuant to Section 2.01.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.

 

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“Capital Expenditures” means all payments due (whether or not paid during any
fiscal period) in respect of the cost of any fixed asset or improvement, or
replacement, substitution, or addition thereto, which has a useful life of more
than one year, including, without limitation, those costs arising in connection
with the direct or indirect acquisition of such asset by way of increased
product or service charges or in connection with a Capitalized Lease.

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

“Cash Collateral Account” means a blocked, non-interest bearing deposit account
of one or more of the Loan Parties at Bank of America in the name of the
Administrative Agent and under the sole dominion and control of the
Administrative Agent, and otherwise established in a manner satisfactory to the
Administrative Agent.

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by the Borrower or any of its Subsidiaries free and clear of all
Liens (other than Liens created under the Collateral Documents and other Liens
permitted hereunder):

(a) readily marketable obligations issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
having maturities of not more than 360 days from the date of acquisition
thereof; provided that the full faith and credit of the United States of America
is pledged in support thereof;

(b) time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized
under the laws of the United States of America, any state thereof or the
District of Columbia or is the principal banking subsidiary of a bank holding
company organized under the laws of the United States of America, any state
thereof or the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper rated as
described in clause (c) of this definition and (iii) has combined capital and
surplus of at least $500,000,000, in each case with maturities of not more than
180 days from the date of acquisition thereof;

(c) commercial paper issued by any Person organized under the laws of any state
of the United States of America and rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by
S&P, in each case with maturities of not more than 180 days from the date of
acquisition thereof;

(d) Investments, classified in accordance with GAAP as current assets of the
Borrower or any of its Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940, which are administered by
financial institutions that have the highest rating obtainable from either
Moody’s or S&P, and the portfolios of which are limited solely to Investments of
the character, quality and maturity described in clauses (a), (b) and (c) of
this definition;

(e) auction-rate preferred securities having a maturity of 28 days or less from
the date of acquisition and a minimum rating of AA by Standard and Poor’s or Aa2
by Moody’s;

 

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(f) United States Dollars or euros;

(g) obligations of any city, state or other subdivision of the United States
having a maturity of not more than 180 days from the acquisition thereof and
having a rating of at least “Prime-1” (or the then equivalent grade) by Moody’s
or at least “A-1” (or the then equivalent grade) by S&P;

(h) money market funds with assets of at least $5,000,000,000 whose investment
objectives and guidelines closely match the credit profiles of the above
investments; and

(f) with respect to any Subsidiary not formed under the laws of, or less than 50
percent of the assets of which are located in, the United States of America or
any jurisdiction thereof, substantially similar Investments as those contained
in clauses (a) through (d) above, of comparable credit quality, denominated in
the currency of any jurisdiction where such Subsidiary does business.

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

“Cash Management Bank” means any Person that, at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity
as a party to such Cash Management Agreement.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.

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

“CFC” means a Person that is a controlled foreign corporation under Section 957
of the Code.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
other than the Equity Investors becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of

 

6

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1934), directly or indirectly, of 30% or more of the equity securities of
Holdings entitled to vote for members of the board of directors or equivalent
governing body of Holdings on a fully-diluted basis (provided, however, that if
(i) the person or group acquires such equity securities in connection with the
acquisition by Holdings or a direct or indirect wholly owned subsidiary of
Holdings of all or substantially all of the stock or all or any substantial
portion of the assets of an unaffiliated Person or any line or lines of business
or division of such Person and (ii) Holdings obtains a written opinion from an
Independent Financial Advisor to the effect that the consideration to be paid in
connection with such acquisition is fair, from a financial point of view, to
Holdings and/or any relevant subsidiaries, then for purposes of this definition,
“30%” shall be replaced with “45%”); or

(b) 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 thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of Holdings, or control over the equity securities of
Holdings entitled to elect a majority of members of the board of directors or
equivalent governing body of Holdings; or

(c) Holdings shall cease, directly or indirectly, to own and control legally and
beneficially all of the Equity Interests in the Borrower; or

(d) a “change of control” or any comparable term under, and as defined in, the
Senior Notes Documents, the Debenture Documents or the Revolving Credit
Agreement shall have occurred (but only so long as any such document or
agreement remains in effect and only to the extent not waived under any such
document or agreement).

“Code” means the Internal Revenue Code of 1986.

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

“Collateral Documents” means, collectively, the Security Agreement, the
Mortgages, the Account Control Agreements, the mortgages, collateral
assignments, Security Agreement Supplements, security agreements, pledge
agreements or other similar agreements delivered to the Administrative Agent
pursuant to Section 6.12, and each of the other agreements, instruments or
documents that creates or purports to create a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties.

“Commitment” means, as to each Lender, its obligation to make Loans to the
Borrower pursuant to Section 2.01 in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender’s name
on Schedule 2.01 under the caption “Commitment” or opposite such caption in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement.

 

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“Committed Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit A.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of Holdings and its Subsidiaries on a consolidated basis
for the most recently completed Measurement Period plus (a) the following to the
extent deducted in calculating such Consolidated Net Income: (i) Consolidated
Interest Charges, (ii) the provision for Federal, state, local and foreign
income taxes payable, (iii) depreciation and amortization expense and (iv) other
expenses reducing such Consolidated Net Income which do not represent a cash
item in such period or any future period (in each case of or by Holdings and its
Subsidiaries for such Measurement Period) and minus (b) the following to the
extent included in calculating such Consolidated Net Income: (i) Federal, state,
local and foreign income tax credits and (ii) all non-cash items increasing
Consolidated Net Income (in each case of or by Holdings and its Subsidiaries for
such Measurement Period). For the purpose of determining the Consolidated
Leverage Ratio and the Consolidated Interest Coverage Ratio, Consolidated EBITDA
shall be calculated on a Pro Forma Basis in accordance with the provisions of
Section 1.03.

“Consolidated Funded Indebtedness” means, as of any date of determination, for
Holdings and its Subsidiaries on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money (including Obligations hereunder) and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments, (b) all purchase money Indebtedness, (c) all direct obligations
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments, (d) all
obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business), (e) all
Attributable Indebtedness, (f) without duplication, all Guarantees with respect
to outstanding Indebtedness of the types specified in clauses (a) through
(e) above of Persons other than the Borrower or any Subsidiary, and (g) all
Indebtedness of the types referred to in clauses (a) through (f) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Borrower or a Subsidiary
is a general partner or joint venturer, unless such Indebtedness is expressly
made non-recourse to the Borrower or such Subsidiary. For the purpose of
determining the Consolidated Leverage Ratio and the Consolidated Interest
Coverage Ratio, Consolidated Funded Indebtedness shall be calculated on a Pro
Forma Basis in accordance with the provisions of Section 1.03.

“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, (b) all interest paid or
payable with respect to discontinued operations and (c) the portion

 

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of rent expense under Capitalized Leases that is treated as interest in
accordance with GAAP, in each case, of or by Holdings and its Subsidiaries on a
consolidated basis for the most recently completed Measurement Period. For the
purpose of determining the Consolidated Leverage Ratio and the Consolidated
Interest Coverage Ratio, Consolidated Interest Charges shall be calculated on a
Pro Forma Basis in accordance with the provisions of Section 1.03.

“Consolidated Interest Coverage Ratio” means, at any date of determination, the
ratio of (a) Consolidated EBITDA to (b) the Consolidated Interest Charges of or
by Holdings and its Subsidiaries for the most recently completed Measurement
Period.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated
EBITDA.

“Consolidated Net Income” means, at any date of determination, the net income
(or loss) of Holdings and its Subsidiaries on a consolidated basis for the most
recently completed Measurement Period; provided that Consolidated Net Income
shall exclude (a) extraordinary gains and extraordinary losses for such
Measurement Period, (b) the net income of any Subsidiary during such Measurement
Period to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of such income is not permitted by operation of
the terms of its Organization Documents or any agreement, instrument or Law
applicable to such Subsidiary during such Measurement Period, except that
Holdings’ equity in any net loss of any such Subsidiary for such Measurement
Period shall be included in determining Consolidated Net Income, and (c) any
income (or loss) for such Measurement Period of any Person if such Person is not
a Subsidiary, except that Holdings’ equity in the net income of any such Person
for such Measurement Period shall be included in Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Person during such
Measurement Period to Holdings or a Subsidiary as a dividend or other
distribution (and in the case of a dividend or other distribution to a
Subsidiary, such Subsidiary is not precluded from further distributing such
amount to Holdings as described in clause (b) of this proviso). For the purpose
of determining the Consolidated Leverage Ratio and the Consolidated Interest
Coverage Ratio, Consolidated Net Income shall be calculated on a Pro Forma Basis
in accordance with the provisions of Section 1.03.

“Consolidated Parties” means Holdings and each of its Subsidiaries (regardless
of whether or not consolidated with Holdings for purposes of GAAP),
collectively, and “Consolidated Party” means any one of them.

“Consolidated Senior Secured Debt” means all Consolidated Funded Indebtedness of
Holdings and its Subsidiaries that is secured by a lien on any property of
Holdings or its Subsidiaries.

“Consolidated Total Assets” means, with respect to any date of determination,
the total consolidated assets shown on the consolidated balance sheet of
Holdings and its Subsidiaries in accordance with GAAP on the last day of the
fiscal quarter prior to the date of determination.

 

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

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Credit Agreement Supplement” has the meaning specified in Section 2.12(d).

“Credit Extension” means a Borrowing.

“Debenture Documents” means (i) the Debenture Indenture, (ii) the Debentures,
and (iii) all other agreements, instruments and other documents pursuant to
which the Debentures were issued or otherwise setting forth the terms of the
Debentures.

“Debenture Indenture” means the Indenture, dated as of June 12, 2006, by and
among the Borrower, Holdings, Spansion Technology Inc. and Wells Fargo Bank,
N.A., as trustee.

“Debentures” means the 2.25% Exchangeable Senior Subordinated Debentures due
2016 in an original aggregate principal amount of $180,000,000 issued and sold
pursuant to the Debenture Documents.

“Debt Rating” means, as of any date of determination, the corporate family
rating as determined by Moody’s and the corporate credit rating as determined by
S&P.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans under the Facility plus
(iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate
Loan, the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Rate) otherwise applicable to such Loan plus 2% per
annum.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Loans required to be funded by it hereunder within one Business Day of the
date required to be funded by it hereunder, (b) has otherwise failed to pay over
to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.

 

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“Disclosed Litigation” has the meaning set forth in Section 5.06.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person (or the granting of any option or other right to do any of the
foregoing), including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 11.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 11.06(b)(iii)).

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“Environmental Lien” means a Lien in favor of any Governmental Authority for
(a) any liability under Environmental Laws, or (b) damages arising from, or
costs incurred by such Governmental Authority in response to, a release or
threatened release of a Hazardous Material.

“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, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or

 

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other ownership or profit interests in) such Person, all of the 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 acquisition from such Person of such shares (or such other
interests), and all of the other ownership or profit interests in such Person
(including partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.

“Equity Investors” means AMD and Fujitsu.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 4001(a) of
ERISA or which is treated as a single employer with the Borrower under
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; or
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan.

“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar
Rate Loan, the rate per annum equal to the British Bankers Association LIBOR
Rate (“BBA LIBOR”), as published by Reuters (or other commercially available
source providing quotations of BBA LIBOR as designated by the Administrative
Agent from time to time) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period. If such rate is not available at such time for any reason,
then the “Eurodollar Rate” for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.

 

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“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

“Event of Default” has the meaning specified in Section 8.01.

“Excess Cash Flow” means, for any fiscal year of the Borrower, the excess (if
any) of:

(a) the sum of (i) Consolidated EBITDA for such fiscal year plus
(ii) extraordinary cash income, if any, business interruption insurance
proceeds, if any, and Net Cash Proceeds attributable to Dispositions out of the
ordinary course of business if any, of the Consolidated Parties during such
period to the extent not included in Consolidated EBITDA for such period and not
required to be utilized in connection with a payment made or to be made pursuant
to Section 2.03(b)(ii), minus;

(b) the sum (for such fiscal year) of (i) Consolidated Interest Charges actually
paid in cash by the Borrower and its Subsidiaries, plus (ii) all income taxes
actually paid in cash by the Borrower and its Subsidiaries, plus (iii) Capital
Expenditures of Holdings and its Subsidiaries for such period paid in cash, plus
(iv) the aggregate amount of all required principal payments or redemptions or
similar acquisitions for value of outstanding Consolidated Funded Indebtedness
(including the Loans), but excluding any such payments to the extent refinanced
through the incurrence of additional Indebtedness otherwise expressly permitted
under Section 7.02, plus (v) the aggregate principal amount of all optional
prepayments made in cash pursuant to Section 2.03(a) hereof with internally
generated funds during such period, plus (vi) the aggregate amount of all
Restricted Payments in cash during such period made in accordance with
Section 7.06.

“Excluded Issuance” by any Person means (i) an issuance and sale of an Equity
Interest in such Person in connection with employment agreements and stock
option or employee compensation agreements approved by the board of directors of
Holdings or an issuance of shares of capital stock of (or other ownership or
profit interests in) such Person upon the exercise of warrants, options or other
rights for the purchase of such capital stock (or other ownership or profit
interest), (ii) an issuance of an Equity Interest upon exchange of the
Debentures or any other exchangeable or convertible debt security, and (iii) any
sales of Equity Interests that occur no later than March 31, 2007, to the extent
the net proceeds are no greater than $100,000,000.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any Obligation
of the Borrower hereunder, (a) taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable Lending Office
is located, (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which the Borrower is located,
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 11.13), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new Lending Office) or is
attributable to

 

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such Foreign Lender’s failure or inability (other than as a result of a Change
in Law) to comply with Section 3.01(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new Lending Office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 3.01(a) and
(d) in the case of any non-Foreign Lender which changes its Lending Office with
respect to the Loans to an office outside the United States, any taxes that are
in effect and would apply to a payment to such Lender as of the date of the
change of the lending office.

“Facility” means, at any time, (a) on or prior to the Funding Date, the
aggregate amount of the Commitments at such time and (b) thereafter, the
aggregate principal amount of the Loans of all Lenders outstanding at such time.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

“Fee Letter” means the letter agreement, dated September 25, 2006, among the
Borrower, the Administrative Agent and the Arranger.

“Foreign Government Scheme or Arrangement” has the meaning specified in
Section 5.12(d).

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Plan” has the meaning specified in Section 5.12(d).

“Fractional Share Payments” has the meaning specified in Section 7.06(f).

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fujitsu” means Fujitsu Microelectronics Holdings, Inc., a Delaware corporation.

“Fujitsu Limited” means Fujitsu Limited, a company organized under the laws of
Japan.

 

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“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funding Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 11.01.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Granting Lender” has the meaning specified in Section 11.06(h).

“Guarantee” means, as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

 

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“Guarantors” means, collectively, Holdings, the Subsidiaries of Holdings listed
on Schedule 6.12 and each other Subsidiary of Holdings that shall be required to
execute and deliver a guaranty or guaranty supplement pursuant to Section 6.12.

“Guaranty” means, collectively, the Guaranty made by Holdings under Article X in
favor of the Secured Parties and the Guaranty made by the other Guarantors in
favor of the Secured Parties, substantially in the form of Exhibit E, together
with each other guaranty and guaranty supplement delivered pursuant to
Section 6.12.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hedge Bank” means any Person that, at the time it enters into a Secured Hedge
Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party
to such Secured Hedge Agreement.

“Holdings” has the meaning specified in the introductory paragraph hereto.

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) the maximum amount of all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and not past due for more than 90 days after the date on which such
trade account was created);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) all Attributable Indebtedness in respect of Capitalized Leases and Synthetic
Lease Obligations of such Person and all Synthetic Debt of such Person;

 

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(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person or any warrant, right or option to acquire such Equity
Interest, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation, limited liability company or similar legal entity)
in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any
net obligation under any Swap Contract on any date shall be deemed to be the
Swap Termination Value thereof as of such date.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 11.04(b).

“Indenture Restricted Payment Terms” means the restrictions contained in
Section 4.10 of the Senior Notes Indenture.

“Independent Financial Advisor” means an investment banking firm of national
standing or any third-party appraiser with national standing in the United
States, provided that such firm of appraiser is not an Affiliate of Holdings.

“Information” has the meaning specified in Section 11.07.

“Information Memorandum” means the information memorandum dated September, 2006
used by the Arranger in connection with the syndication of the Commitments.

“Intercreditor Agreement” means an intercreditor agreement dated as of the date
hereof among the Administrative Agent and the Revolving Credit Agent, and
acknowledged and agreed to by the Borrower, Holdings, and the other Loan
Parties, substantially in the form of Exhibit K hereto.

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day
of each Interest Period applicable to such Loan and the Maturity Date of the
Facility under which such Loan was made; provided, however, that if any Interest
Period for a Eurodollar Rate Loan exceeds three months, the respective dates
that fall every three months after the beginning of such Interest Period shall
also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last
Business Day of each March, June, September and December and the Maturity Date
of the Facility under which such Loan was made.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrower in its Committed Loan Notice; provided
that:

 

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(a) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

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

(c) no Interest Period shall extend beyond the Maturity Date of the Facility
under which such Loan was made.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit or all or a
substantial part of the business of, such Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

“IP Rights” has the meaning specified in Section 5.17.

“IRS” means the United States Internal Revenue Service.

“Joinder Agreement” means a Joinder Agreement executed and delivered in
accordance with the provisions of Section 6.12, substantially in the form of
Exhibit J hereto.

“JV1/JV2 Facility” means that certain factory located at 6,5-4,5-11,31-6
Kogyodanchi Monden-machi, Aizuwakamatsu-shi, Fukushima Japan and that certain
power plant and office at 4 Kogyodanchi Monden-machi, Aizuwakamatsu-shi,
Fukushima Japan, and all appurtenant and related fixtures, property and
equipment at such locations.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lender” has the meaning specified in the introductory paragraph hereto.

 

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“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Liquidity” means, as of any date of determination, the difference of (a) the
sum of all cash and Cash Equivalents plus Accounts Receivable, minus (b) the
product of (i) the principal amount outstanding under the Revolving Credit
Agreement times (ii) 1.5.

“Loan” means an advance made by any Lender under Article II.

“Loan Documents” means, collectively, (a) for purposes of this Agreement and the
Notes and all other purposes other than for purposes of the Guaranty, any
Joinder Agreement, any of the Collateral Documents and Sections 6.12 and 8.03 of
this Agreement, (i) this Agreement, (ii) each Note, (iii) the Guaranty,
(iv) each Collateral Document, (v) the Fee Letter, and (vi) each Joinder
Agreement and (b) for purposes of the Guaranty, each Joinder Agreement, each
Collateral Document and Sections 6.12 and 8.03 of this Agreement, (i) each
document under clause (a) of this definition, (ii) each Secured Hedge Agreement
and (iii) each Secured Cash Management Agreement.

“Loan Parties” means, collectively, the Borrower and each Guarantor.

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

“Material Contract” means, with respect to any Person, each contract to which
such Person is a party which is material to the business, condition (financial
or otherwise), operations, performance or properties of such Person.

“Material Subsidiary” means any direct or indirect Domestic Subsidiary of
Holdings which (a) has total assets equal to or greater than 2% of Total Assets
(calculated as of the most recent fiscal period with respect to which the
Lenders shall have received financial statements required to be delivered
pursuant to Sections 6.01(a) or (b) (or if prior to delivery of any financial
statements pursuant to such Sections, then calculated with respect to the year
end

 

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financial statements referenced in Section 5.05(a)) (the “Required Financial
Information”)) or (b) has income equal to or greater than 2% of Consolidated Net
Income (calculated for the most recent period for which the Lenders have
received the Required Financial Information); provided, however, that
notwithstanding the foregoing, the term “Material Subsidiary” shall mean each of
those Domestic Subsidiaries that together with Holdings and each other Material
Subsidiary (i) have assets equal to not less than 90% of Total Assets
(calculated as described above) and (ii) generate not less than 90% of
Consolidated Net Income of the Consolidated Parties; provided further that if
more than one combination of Subsidiaries satisfies such threshold, then those
Subsidiaries so determined to be “Material Subsidiaries” shall be specified by
the Borrower.

“Maturity Date” means November 3, 2012; provided, however, that, if such date is
not a Business Day, the Maturity Date shall be the next preceding Business Day.

“Measurement Period” means, at any date of determination, the most recently
completed four fiscal quarters of Holdings or, if fewer than four consecutive
fiscal quarters of Holdings have been completed since the Funding Date, the
fiscal quarters of Holdings that have been completed since the Funding Date.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgage” has the meaning specified in Section 4.01(a)(iv).

“Mortgage Policy” has the meaning specified in Section 4.01(a)(iv)(B).

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“Net Cash Proceeds” means:

(a) with respect to any Disposition by any Loan Party or any of its
Subsidiaries, the excess, if any, of (i) the sum of cash and Cash Equivalents
received in connection with such transaction (including any cash or Cash
Equivalents received by way of deferred payment pursuant to, or by monetization
of, a note receivable or otherwise, but only as and when so received) over
(ii) the sum of (A) the principal amount of any Indebtedness that is secured by
the applicable asset and that is required to be repaid in connection with such
transaction (other than Indebtedness under the Loan Documents), (B) the
reasonable and customary out-of-pocket expenses incurred by such Loan Party or
such Subsidiary in connection with such transaction and (C) income taxes
reasonably estimated to be actually payable within two years of the date of the
relevant transaction as a result of any gain recognized in connection therewith;
provided that, if the amount of any estimated taxes pursuant to subclause
(C) exceeds the amount of taxes actually required to be paid in cash in respect
of such Disposition, the aggregate amount of such excess shall constitute Net
Cash Proceeds; and

 

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(b) with respect to the sale or issuance of any Equity Interest by any Loan
Party or any of its Subsidiaries, or the incurrence or issuance of any
Indebtedness by any Loan Party or any of its Subsidiaries, the excess of (i) the
sum of the cash and Cash Equivalents received in connection with such
transaction over (ii) the underwriting discounts and commissions, and other
reasonable and customary out-of-pocket expenses, incurred by such Loan Party or
such Subsidiary in connection therewith.

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit B.

“NPL” means the National Priorities List under CERCLA.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

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

“Outstanding Amount” means the aggregate outstanding principal amount of Loans
on any date after giving effect to any borrowings and prepayments or repayments
of Loans occurring on such date.

“Participant” has the meaning specified in Section 11.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“PCAOB” means the Public Company Accounting Oversight Board.

 

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“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

“Perfection Certificate” has the meaning given such term in Section 1.03 of the
Security Agreement.

“Permitted Encumbrances” has the meaning specified in the Mortgages.

“Permitted Tax Payment” means the payment of any dividend or distribution to
Holdings in an amount not to exceed the then maximum Federal, state and local
income tax liabilities arising from income of the Borrower and its Subsidiaries
and attributable to Holdings. Each tax distribution shall be calculated and
distributed so that Holdings shall receive a tax distribution sufficient to pay
the income taxes required to be paid (after giving effect to any income tax
credits, losses carried forward, or similar reductions to income taxes due) in
respect of the relevant period.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

“Platform” has the meaning specified in Section 6.02.

“Pledged Debt” has the meaning specified in Section 2.01 of the Security
Agreement.

“Pledged Equity” has the meaning specified in Section 2.01 of the Security
Agreement.

“Pro Forma Basis” has the meaning specified in Section 1.03.

“Register” has the meaning specified in Section 11.06(c).

“Registered Public Accounting Firm” has the meaning specified by the Securities
Laws and shall be independent of Holdings as prescribed by the Securities Laws.

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

 

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“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means with respect to a Borrowing, conversion or
continuation of Loans, a Committed Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders holding more
than 50% of the Outstanding Amount provided that the portion of the Outstanding
Amount held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or controller of a Loan Party.
Any document delivered hereunder that is signed by a Responsible Officer of a
Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to any Person’s
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment.

“Revolving Credit Agent” means Bank of America, N.A., in its capacity as agent
for the lenders under the Revolving Credit Agreement.

“Revolving Credit Agreement” means that certain Credit Agreement dated as of
September 19, 2005 among the Borrower, Holdings, the Revolving Credit Agent, and
a syndicate of lenders.

“Revolving Credit Loan Documents” means the Revolving Credit Agreement and the
other “Loan Documents” as defined therein.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between the Borrower and any Cash Management Bank.

 

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“Secured Hedge Agreement” means any interest rate Swap Contract required or
permitted under Article VI or VII that is entered into by and between the
Borrower and any Hedge Bank.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed
by the Administrative Agent from time to time pursuant to Section 9.05, and the
other Persons the Obligations owing to which are or are purported to be secured
by the Collateral under the terms of the Collateral Documents.

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.

“Security Agreement” means the pledge and security agreement, in substantially
the form of Exhibit F, together with each other pledge and security agreement
and pledge and security agreement supplement delivered pursuant to Section 6.12.

“Security Agreement Supplement” has the meaning specified in Section 1.01 of the
Security Agreement.

“Senior Notes” means the 11.25% senior notes of the Borrower due 2016 in an
original aggregate principal amount of $250,000,000 issued and sold pursuant to
the Senior Notes Documents.

“Senior Notes Indenture” means the Indenture dated as of December 21, 2005 by
and among the Borrower, Holdings, Spansion Technology Inc. and Wells Fargo Bank,
N.A., as trustee.

“Senior Notes Documents” means (i) the Senior Notes Indenture, (ii) the Senior
Notes and (iii) all other agreements, instruments and other documents pursuant
to which the Senior Notes have been or will be issued or otherwise setting forth
the terms of the Senior Notes.

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including 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, (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, and
(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business. 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.

 

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“SP1 Facilities” means that certain fabrication facility located in Japan and
any other 300mm manufacturing facility owned by the Borrower or any Subsidiary.

“SPC” has the meaning specified in Section 11.06(h).

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
Holdings.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.

 

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“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

“Total Assets” means, with respect to any date of determination, Holdings’ total
consolidated assets shown on its consolidated balance sheet in accordance with
GAAP on the last day of the fiscal quarter prior to the date of determination.

“Transaction” means, collectively, (a) the entering into by the Loan Parties and
their applicable Subsidiaries of the Loan Documents to which they are or are
intended to be a party and (b) the payment of the fees and expenses incurred in
connection with the consummation of the foregoing.

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or
the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

“Unfunded Pension Liability” means an “accumulated funding deficiency” within
the meaning of Section 302 of ERISA or Section 412 of the Code.

“United States” and “U.S.” mean the United States of America.

“U.S. Loan Party” means any Loan Party that is organized under the laws of one
of the states of the United States of America and that is not a CFC.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other

 

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document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Preliminary Statements,
Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03 Accounting Terms. (a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.

 

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(c) Pro Forma Calculations. Notwithstanding anything herein to the contrary, any
calculation of the Consolidated Leverage Ratio for any Measurement Period during
which an Acquisition or Disposition shall have occurred (or shall be deemed to
have occurred for the purposes described in clause (iii) of this
Section 1.03(c)) shall each be made on a Pro Forma Basis for purposes of making
the following determinations:

(i) determining the applicable pricing level under the definitions of
“Applicable Rate” and “Applicable Commitment Fee Percentage”;

(ii) determining compliance with the Consolidated Leverage Ratio (other than
whether the conditions precedent for a proposed transaction have been satisfied
as contemplated by subsection (iii) of this Section 1.03(c));

(iii) determining whether the conditions precedent have been satisfied for a
proposed transaction which is permitted hereunder only so long as no Default
will result from the consummation thereof, including, without limitation, any
Disposition or any Investment which results in an Acquisition; and

(iv) determining whether a mandatory prepayment is required to be made by the
Borrower pursuant to Section 2.03(b)(iii) or (iv).

“Pro Forma Basis” means, for purposes of calculating any financial ratio
(including the Consolidated Leverage Ratio) or financial amount for any
Measurement Period for any of the purposes specified in this Section 1.03(c),
and with respect to each proposed Acquisition or Disposition and each such
transaction actually consummated in such Measurement Period, that such financial
ratio or financial amount shall be calculated on a pro forma basis based on the
following assumptions: (a) each such transaction shall be deemed to have
occurred on the first day of such Measurement Period; (b) any funds to be used
by any Person in consummating any such transaction will be assumed to have been
used for that purpose as of the first day of such Measurement Period; (c) any
Indebtedness to be incurred by any Person in connection with the consummation of
any such transaction will be assumed to have been incurred on the first day of
such Measurement Period; (d) the gross interest expenses, determined in
accordance with GAAP, with respect to such Indebtedness assumed to have been
incurred on the first day of such Measurement Period that bears interest at a
floating rate shall be calculated at the current rate (as of the date of such
calculation) under the agreement governing such Indebtedness (including this
Agreement if the Indebtedness is incurred hereunder); and (e) any gross interest
expense, determined in accordance with GAAP, with respect to Indebtedness
outstanding during such Measurement Period that was or is to be refinanced with
proceeds of a transaction assumed to have been incurred as of the first day of
the Measurement Period will be excluded from such calculations (and to the
extent not already excluded pursuant to clause (a) or (b) above, the principal
amount of such Indebtedness shall be excluded). “Pro Forma Basis” may also
include such adjustments for expected cost savings as are permitted under
Regulation S-X of the Securities and Exchange Commission and reasonably
satisfactory to the Administrative Agent.

 

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1.04 Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

1.05 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Pacific time (daylight or standard, as applicable).

1.06 Currency Equivalents Generally. Any amount specified in this Agreement
(other than in Articles II, IX and X) or any of the other Loan Documents to be
in Dollars shall also include the equivalent of such amount in any currency
other than Dollars, such equivalent amount thereof in the applicable currency to
be determined by the Administrative Agent at such time on the basis of the Spot
Rate (as defined below) for the purchase of such currency with Dollars. For
purposes of this Section 1.07, the “Spot Rate” for a currency means the rate
determined by the Administrative Agent to be the rate quoted by the Person
acting in such capacity as the spot rate for the purchase by such Person of such
currency with another currency through its principal foreign exchange trading
office at approximately 11:00 a.m. on the date two Business Days prior to the
date of such determination; provided that the Administrative Agent may obtain
such spot rate from another financial institution designated by the
Administrative Agent if the Person acting in such capacity does not have as of
the date of determination a spot buying rate for any such currency.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 The Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make a single loan to the Borrower on the Funding
Date in an amount not to exceed such Lender’s Commitment Percentage of the
Facility. The Borrowing shall consist of Loans made simultaneously by the
Lenders in accordance with their respective Applicable Percentage of the
Facility. Amounts borrowed under this Section 2.01 and repaid or prepaid may not
be reborrowed. Loans may be Base Rate Loans or Eurodollar Rate Loans, as further
provided herein.

2.02 Borrowings, Conversions and Continuations of Loans.

(a) Borrowings, Conversions and Continuations Generally. Each Borrowing, each
conversion of Loans from one Type to the other, and each continuation of
Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to
the Administrative Agent, which may be given by telephone. Each such notice must
be received by the Administrative Agent not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of
Base Rate Loans. Each telephonic notice by the Borrower pursuant to this
Section 2.02(a) must be confirmed promptly by delivery to the Administrative
Agent of a written Committed Loan Notice, appropriately completed and signed by
a Responsible Officer of the Borrower. Each Borrowing

 

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of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of
or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Borrowing, a conversion of Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Loans to be borrowed, converted or continued,
(iv) the Type of Loans to be borrowed or to which existing Loans are to be
converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify a Type of Loan in a Committed
Loan Notice or if the Borrower fails to give a timely notice requesting a
conversion or continuation, then the applicable Loans shall be made as, or
converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans
shall be effective as of the last day of the Interest Period then in effect with
respect to the applicable Eurodollar Rate Loans. If the Borrower requests a
Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any
such Committed Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month.

(b) Notice to Lenders and Funding of Borrowings. Following receipt of a
Committed Loan Notice, the Administrative Agent shall promptly notify each
Lender of the amount of its Applicable Percentage under the Facility of the
Loans, and if no timely notice of a conversion or continuation is provided by
the Borrower, the Administrative Agent shall notify each Lender of the details
of any automatic conversion to Base Rate Loans described in Section 2.02(a). In
the case of a Borrowing, each Appropriate Lender shall make the amount of its
Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower.

(c) Eurodollar Rate Loans. Except as otherwise provided herein, a Eurodollar
Rate Loan may be continued or converted only on the last day of an Interest
Period for such Eurodollar Rate Loan. During the existence of a Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate Loans
without the consent of the Required Lenders.

(d) Notice of Interest Rate. The Administrative Agent shall promptly notify the
Borrower and the Lenders of the interest rate applicable to any Interest Period
for Eurodollar Rate Loans upon determination of such interest rate. At any time
that Base Rate Loans are outstanding, the Administrative Agent shall notify the
Borrower and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.

 

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(e) Maximum Interest Periods. After giving effect to all Borrowings, all
conversions of Loans from one Type to the other, and all continuations of Loans
as the same Type, there shall not be more than five (5) Interest Periods in
effect in respect of the Facility.

2.03 Prepayments.

(a) Optional. The Borrower may, upon notice to the Administrative Agent, at any
time or from time to time voluntarily prepay Loans in whole or in part without
premium or penalty; provided that (A) such notice must be received by the
Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (2) on the date of
prepayment of Base Rate Loans; (B) any prepayment of Eurodollar Rate Loans shall
be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof; and (C) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then outstanding.
Each such notice shall specify the date and amount of such prepayment, the
Facility to which such prepayment shall apply and the Type(s) of Loans to be
prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s)
of such Loans. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s ratable portion
of such prepayment (based on such Lender’s Applicable Percentage in respect of
the relevant Facility). If such notice is given by the Borrower, the Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein. Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05. Each
prepayment of the outstanding Loans pursuant to this Section 2.03(a) shall be
applied to the principal repayment installments of the Loan on a pro-rata basis,
and each such prepayment shall be paid to the Lenders in accordance with their
respective Applicable Percentages in respect of the Facility.

(b) Mandatory.

(i) Excess Cash Flow. Within five Business Days after financial statements have
been delivered pursuant to Section 6.01(a) and the related Compliance
Certificate has been delivered pursuant to Section 6.02(b), the Borrower shall
prepay an aggregate principal amount of Loans equal to (A) if Holdings’
Consolidated Leverage Ratio is greater than or equal to 2.00 to 1, 75% of Excess
Cash Flow or (B) if Holdings’ Consolidated Leverage Ratio is less than 2.00 to
1, 50% of Excess Cash Flow; in each case, for the fiscal year covered by such
financial statements (such prepayments to be applied as set forth in clause
(v) below).

(ii) Dispositions. If any Loan Party or any of its Subsidiaries disposes of any
property (other than any Disposition of any property permitted by
Section 7.05(a) through (h)) in a single or series of related transactions which
results in the realization by such Person of Net Cash Proceeds in excess of
$5,000,000, the Borrower shall prepay an aggregate principal amount of Loans
equal to 100% of such Net Cash Proceeds immediately upon receipt thereof by such
Person (such prepayments to be applied as set forth in clause (v) below);
provided, however, that, with respect to any Net Cash

 

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Proceeds realized under a Disposition described in this Section 2.03(b)(ii), at
the election of the Borrower (as notified by the Borrower to the Administrative
Agent on or prior to the date of such Disposition), and so long as no Default
shall have occurred and be continuing, such Loan Party or such Subsidiary may
reinvest all or any portion of such Net Cash Proceeds in operating assets so
long as within 360 days after the receipt of such Net Cash Proceeds, such
purchase shall have been consummated (as certified by the Borrower in writing to
the Administrative Agent); and provided further, however, that any Net Cash
Proceeds not subject to such definitive agreement or so reinvested shall be
immediately applied to the prepayment of the Loans as set forth in this
Section 2.03(b)(ii).

(iii) Equity Issuance. Upon the sale or issuance by any Loan Party or any of its
Subsidiaries of any of its Equity Interests (other than (A) Excluded Issuances
and (B) any sales or issuances of Equity Interests to another Loan Party), the
Borrower shall prepay an aggregate principal amount of Loans equal to 50% of all
Net Cash Proceeds received therefrom immediately upon receipt thereof by such
Loan Party or such Subsidiary (such prepayments to be applied as set forth in
clause (v) below).

(iv) Debt Issuance. Upon the incurrence or issuance by any Loan Party or any of
its Subsidiaries of any Indebtedness (other than Indebtedness expressly
permitted to be incurred or issued pursuant to Section 7.02), the Borrower shall
prepay an aggregate principal amount of Loans equal to 100% of all Net Cash
Proceeds received therefrom immediately upon receipt thereof by such Loan Party
or such Subsidiary (such prepayments to be applied as set forth in clause
(v) below).

(v) Application of Prepayments Generally. Each prepayment of Loans pursuant to
the foregoing provisions of this Section 2.03(b) or Section 6.07(b) shall be
applied to the remaining principal repayment installments of the Facility on a
pro-rata basis.

(c) Prepayment Accounts. Amounts to be applied as provided in clause (b) above
to the prepayment of Loans shall be applied first to reduce outstanding Base
Rate Loans. Any amounts remaining after each such application shall, at the
option of the Borrower, be applied to prepay Eurodollar Rate Loans immediately
and/or shall be deposited in a separate Prepayment Account (as defined below)
for such Eurodollar Rate Loans. The Administrative Agent shall apply any cash
deposited in the Prepayment Account to prepay Eurodollar Rate Loans on the last
day of their respective Interest Periods (or, at the direction of the Borrower,
on any earlier date) until all outstanding Loans have been prepaid or until all
the allocable cash on deposit in the Prepayment Account has been exhausted. For
purposes of this Agreement, the term “Prepayment Account” for any Loans shall
mean an account established by the Borrower with the Administrative Agent and
over which the Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal for application in accordance with
this clause (c). The Administrative Agent will, at the request of the Borrower,
invest amounts on deposit in the Prepayment Account in Cash Equivalents selected
by the Borrower that mature prior to the last day of the applicable Interest
Periods of the Eurodollar Rate Loans to be prepaid; provided, however, that
(i) the Administrative Agent shall not be required to make

 

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any investment that, in its sole judgment, would require or cause the
Administrative Agent to be in, or would result in any, violation of any Law,
(ii) such Cash Equivalents shall be subjected to a first priority perfected
security interest in favor of the Administrative Agent and (iii) if any Event of
Default shall have occurred and be continuing, the selection of such Cash
Equivalents shall be in the sole discretion of the Administrative Agent. The
Borrower shall indemnify the Administrative Agent for any losses relating to
such investments in Cash Equivalents so that the amount available to prepay
Eurodollar Rate Loans on the last day of the applicable Interest Periods is not
less than the amount that would have been available had no investments been made
pursuant thereto. Interest or profits, if any, on the investments in any
Prepayment Account shall accumulate in such Prepayment Account. If the maturity
of the Loans has been accelerated pursuant to Section 8.02, the Administrative
Agent may, in its sole discretion, apply such funds to satisfy any of the
Obligations. The Borrower hereby pledges and assigns to the Administrative
Agent, for its benefit and the benefit of the Lenders, each Prepayment Account
established to secure the Obligations.

(d) Senior Notes Documents. Anything contained in Section 2.03(b) to the
contrary notwithstanding, (i) if, following the occurrence of any “Asset Sale”
(as such term is defined in the Senior Notes Documents) by any Loan Party or any
of its Subsidiaries, the Borrower is required to apply or cause its Subsidiaries
to apply an amount equal to any of the “Net Available Cash” (as defined in the
Senior Notes Documents) thereof in a particular manner, or to apply by a
particular date (an “Application Date”) an amount equal to any such “Net
Available Cash” in a particular manner, in either case in order to excuse the
Borrower from being required to make a “Prepayment Offer” (as defined in the
Senior Notes Documents in connection with such “Asset Sale”, and the Borrower
shall have failed to so apply an amount equal to such “Net Available Cash” at
least 90 days before the applicable Application Date, or (ii) if the Borrower at
any other time shall have failed to apply or cause to be applied an amount equal
to any such “Net Available Cash”, and, within 90 days thereafter assuming no
further application of an amount equal to such “Net Available Cash” the Borrower
would otherwise be required to make a “Prepayment Offer” in respect thereof,
then in either such case the Borrower shall immediately pay or cause to be paid
to the Administrative Agent an amount equal to such “Net Available Cash” to be
applied to the payment of the Loans in the manner set forth in Section 2.03(b)
in such amounts as shall excuse the Borrower from making any such “Prepayment
Offer”.

2.04 Termination or Reduction of Commitments. The aggregate Commitments shall be
automatically and permanently reduced to zero immediately after the Borrowing.

2.05 Repayment of Loans. The Borrower shall repay to the Lenders the aggregate
principal amount of all Loans in quarterly installments in the amount of
$1,000,000 on the last Business Day of each March, June, September and December
(which amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.03) beginning
June 30, 2007; provided, however, that the final principal repayment installment
of the Loans shall be repaid on the Maturity Date for the Facility and in any
event shall be in an amount equal to the aggregate principal amount of all Loans
outstanding on such date.

 

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2.06 Interest. (a) Interest Rates. Subject to the provisions of Section 2.08(b),
(i) each Eurodollar Rate Loan under a Facility shall bear interest on the
outstanding principal amount thereof for each Interest Period applicable thereto
at a rate per annum equal to the Eurodollar Rate for such Interest Period plus
the Applicable Rate for such Facility; and (ii) each Base Rate Loan under a
Facility shall bear interest on the outstanding principal amount thereof from
the applicable borrowing date at a rate per annum equal to the Base Rate plus
the Applicable Rate for such Facility.

(b) Default Rate. (i) If any amount of principal of any Loan is not paid when
due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by the Borrower
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then
upon the request of the Required Lenders such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

(iii) Upon the request of the Required Lenders, while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.

(c) Interest Payment Date. Interest on each Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such other times
as may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.

2.07 Fees.

(a) The Borrower shall pay to the Arranger and the Administrative Agent for
their own respective accounts fees in the amounts and at the times specified in
the Fee Letter.

(b) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.

2.08 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by Bank of America’s “prime rate”
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Loan for the day on which the Loan
is

 

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made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.10(a), bear
interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

2.09 Evidence of Debt. (a) Accounts and Records of Credit Extensions. The Credit
Extensions made by each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender’s
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.

(b) Accounts and Records of Purchases and Sales. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.

2.10 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent’s
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Applicable Percentage in respect of the relevant Facility (or
other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender’s Lending Office. All payments received
by the Administrative Agent after 2:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue. If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected on computing interest or fees, as
the case may be. Upon written or verbal authorization from the Borrower, the
Administrative Agent may automatically deduct from any deposit account
designated by the Borrower and held with the Administrative Agent the amount of
any principal, interest or fees when due hereunder or under the other Loan
Documents.

 

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(b) Funding Presumptions.

(i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time required
by Section 2.02) and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Loan included in
such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
time at which any payment is due to the Administrative Agent for the account of
the Lenders hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Appropriate Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Appropriate Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender, in immediately available funds with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

 

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A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrower by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans and to make payments pursuant to Section 11.04(c) are several and not
joint. The failure of any Lender to make any Loan or to make any payment under
Section 11.04(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan or
to make its payment under Section 11.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

(f) Insufficient Funds. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
toward payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, toward payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.

2.11 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of
(a) Obligations in respect of the Facility due and payable to such Lender
hereunder and under the other Loan Documents 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 at such time to (ii) the aggregate amount of the
Obligations in respect of the Facility due and payable to all Lenders hereunder
and under the other Loan Documents at such time) of payments on account of the
Obligations in respect of the Facility due and payable to all Lenders hereunder
and under the other Loan Documents at such time obtained by all the Lenders at
such time or (b) Obligations in respect of the Facility owing (but not due and
payable) to such Lender hereunder and under the other Loan Documents at such
time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations owing (but not due and payable) to such Lender at
such time to (ii)

 

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the aggregate amount of the Obligations in respect of the Facility owing (but
not due and payable) to all Lenders hereunder and under the other Loan Documents
at such time) of payments on account of the Obligations in respect of the
Facility owing (but not due and payable) to all Lenders hereunder and under the
other Loan Documents at such time obtained by all of the Lenders at such time,
then, in each case under clauses (a) and (b) above, the Lender receiving such
greater proportion shall (A) notify the Administrative Agent of such fact, and
(B) purchase (for cash at face value) participations in the Loans, or make such
other adjustments as shall be equitable, so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of Obligations in respect of the Facility then due and payable to the
Lenders or owing (but not due and payable) to the Lenders, as the case may be,
provided that:

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (A) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or (B) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans to any
assignee or participant, other than to the Borrower or any Subsidiary thereof
(as to which the provisions of this Section shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Borrower or Holdings hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be
required by applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent or any Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower or
Holdings, as the case may be, shall make such deductions and (iii) the Borrower
or Holdings, as the case may be, shall timely pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.

 

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(b) Payment of Other Taxes by the Borrower and Holdings. Without limiting the
provisions of subsection (a) above, the Borrower and Holdings shall timely pay
any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

(c) Indemnification by the Borrower and Holdings. The Borrower and Holdings
shall, jointly and severally, indemnify the Administrative Agent and each
Lender, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent or such Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(d) Evidence of Payments. As soon as reasonably practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower or Holdings, as the case may
be, to a Governmental Authority, the Borrower or Holdings, as the case may be,
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower or Holdings, as the case may be, is resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments hereunder
or under any other Loan Document shall deliver to the Borrower and Holdings
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, Holdings or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
requested by the Borrower, Holdings or the Administrative Agent, shall deliver
such other documentation prescribed by applicable law or reasonably requested by
the Borrower, Holdings or the Administrative Agent as will enable the Borrower,
Holdings or the Administrative Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, if the Borrower or Holdings,
as the case may be, is resident for tax purposes in the United States, any
Foreign Lender shall deliver to the Borrower, Holdings and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the request of the

 

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Borrower, Holdings or the Administrative Agent, but only if such Foreign Lender
is legally entitled to do so), whichever of the following is applicable:

(i) duly completed copies of Internal Revenue Service Form W-8BEN (or any
successor form) claiming eligibility for benefits of an income tax treaty to
which the United States is a party,

(ii) duly completed copies of Internal Revenue Service Form W-8ECI (or any
successor form),

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (A) a certificate to the
effect that such Foreign Lender is not (1) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower
or Holdings within the meaning of section 881(c)(3)(B) of the Code, or (3) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code
and (B) duly completed copies of Internal Revenue Service Form W-8BEN (or any
successor form), or

(iv) any other form prescribed by applicable Law (including Internal Revenue
Service Form W-8IMY (or any successor form)) as a basis for claiming exemption
from or a reduction in United States Federal withholding tax duly completed
together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower to determine the withholding or deduction
required to be made.

(f) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of or credit
against its liability for any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or Holdings, as the case may be, or with respect to
which the Borrower or Holdings, as the case may be, has paid additional amounts
pursuant to this Section (a “Tax Benefit”), it shall pay to the Borrower or
Holdings, as the case may be, an amount equal to such Tax Benefit (but only to
the extent of indemnity payments made, or additional amounts paid, by the
Borrower or Holdings under this Section with respect to the Taxes or Other Taxes
giving rise to such Tax Benefit), net of all out-of-pocket expenses of the
Administrative Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such Tax Benefit), provided that the Borrower or Holdings, as the
case may be, upon the request of the Administrative Agent or such Lender, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender if the Administrative Agent or such Lender
is required to repay such Tax Benefit to such Governmental Authority or such Tax
Benefit is rescinded by such Governmental Authority or otherwise is determined
to be inapplicable or unavailable to the Administrative Agent or such Lender.
This subsection shall not be construed to require the Administrative Agent or
any Lender to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to the Borrower, Holdings or any other
Person.

(g) Mitigation. If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.01 as a result of a change
in law or treaty

 

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occurring after such Lender first became a party to this Agreement, then such
Lender will, at the request of the Borrower, change the jurisdiction of its
applicable Lending Office if such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is, in such Lender’s
sole, reasonable discretion, determined not to be materially disadvantageous or
cause unreasonable hardship to such Lender, provided that fees, charges, costs
or expenses that are related to such change shall be borne by the Borrower on
behalf of a Lender, and the mere existence of such expenses, fees or costs shall
not be deemed to be materially disadvantageous or cause undue hardship to the
Lender.

3.02 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate,
or any Governmental Authority has imposed material restrictions on the authority
of such Lender to purchase or sell, or to take deposits of, Dollars in the
London interbank market, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted.

3.03 Inability to Determine Rates. If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender. Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

 

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3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.04(e));

(ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or any Eurodollar Rate Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Indemnified
Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any
change in the rate of, any Excluded Tax payable by such Lender); or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or Eurodollar Rate Loans made by such
Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan), or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender, the Borrower will pay to such
Lender such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the capital
of such Lender’s holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by such Lender, to a level
below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender,
such additional amount or amounts as will compensate such Lender or such
Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section shall not
constitute a waiver of such Lender’s right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor
(except that, if the

 

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Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).

(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 10 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice 10 days prior to the relevant Interest Payment Date,
such additional interest shall be due and payable 10 days from receipt of such
notice.

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

(b) any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrower pursuant
to Section 11.13;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders. (a) Designation of a
Different Lending Office. If any Lender requests compensation under
Section 3.04, or the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority

 

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for the account of any Lender pursuant to Section 3.01, or if any Lender gives a
notice pursuant to Section 3.02, then such Lender shall use reasonable efforts
to designate a different Lending Office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the
need for the notice pursuant to Section 3.02, as applicable, and (ii) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, the Borrower may replace such Lender in accordance with
Section 11.13.

3.07 Survival. All of the Borrower’s obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Initial Credit Extension. The obligation of each Lender to
make its initial Credit Extension hereunder is subject to satisfaction of the
following conditions precedent:

(a) Documents, Certificates, Opinions and Other Instruments. The Administrative
Agent’s receipt of the following, each of which shall be originals or telecopies
(followed promptly by originals) unless otherwise specified, each properly
executed by a Responsible Officer of the signing Loan Party, each dated the
Funding Date (or, in the case of certificates of governmental officials, a
recent date before the Funding Date) and each in form and substance satisfactory
to the Administrative Agent and each of the Lenders:

(i) executed counterparts of this Agreement, the Intercreditor Agreement and the
Guaranty, sufficient in number for distribution to the Administrative Agent,
each Lender and the Borrower;

(ii) a Note executed by the Borrower in favor of each Lender requesting a Note;

(iii) a Security Agreement duly executed by each Loan Party, together with:

(A) certificates representing the Pledged Equity referred to therein accompanied
by undated stock powers executed in blank and instruments evidencing the Pledged
Debt indorsed in blank,

 

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(B) acknowledgment copies or stamped receipt copies of proper financing
statements, duly filed on or before the day of the initial Credit Extension
under the Uniform Commercial Code of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect the Liens created
under the Security Agreement, covering the Collateral described in the Security
Agreement,

(C) completed requests for information, dated on or before the date of the
initial Credit Extension, listing all effective financing statements filed in
the jurisdictions referred to in clause (B) above that name any Loan Party as
debtor, together with copies of such other financing statements,

(D) evidence of the completion of all other actions, recordings and filings of
or with respect to the Security Agreement that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created thereby, and

(E) evidence that all other action that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under the Security
Agreement has been taken (including receipt of duly executed payoff letters,
UCC-3 termination statements and landlords’ and bailees’ waiver and consent
agreements);

(iv) deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold
mortgages and leasehold deeds of trust, in substantially the form of Exhibit G
(with such changes as may be satisfactory to the Administrative Agent and its
counsel to account for local law matters) and covering the properties listed on
Schedule 4.01(a)(iv) (together with the Assignments of Leases and Rents referred
to therein and each other mortgage delivered pursuant to Section 6.12, in each
case as amended, the “Mortgages”), duly executed by the appropriate Loan Party,
together with:

(A) evidence that counterparts of the Mortgages have been duly executed,
acknowledged and delivered and are in form suitable for filing or recording in
all filing or recording offices that the Administrative Agent may deem necessary
or desirable in order to create a valid first and subsisting Lien on the
property described therein in favor of the Administrative Agent for the benefit
of the Secured Parties and that all filing, documentary, stamp, intangible and
recording taxes and fees have been paid,

(B) if required by the Administrative Agent, fully paid American Land Title
Association Lender’s Extended Coverage title insurance policies (the “Mortgage
Policies”) in form and substance, with endorsements and in amounts acceptable to
the Administrative Agent, issued, coinsured and reinsured by title insurers
acceptable to the Administrative Agent, insuring the Mortgages to be valid first
and subsisting Liens on the property described therein, free and clear of all
defects (including, but not limited to, mechanics’ and materialmen’s Liens) and
encumbrances, excepting only Permitted Encumbrances and other Liens

 

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permitted under the Loan Documents, and providing for such other affirmative
insurance (including endorsements for future advances under the Loan Documents,
for mechanics’ and materialmen’s Liens and for zoning of the applicable
property) and such coinsurance and direct access reinsurance as the
Administrative Agent may deem necessary or desirable,

(C) if required by the Administrative Agent, American Land Title
Association/American Congress on Surveying and Mapping form surveys, for which
all necessary fees (where applicable) have been paid, and dated no more than 30
days before the day of the initial Credit Extension, certified to the
Administrative Agent and the issuer of the Mortgage Policies in a manner
satisfactory to the Administrative Agent by a land surveyor duly registered and
licensed in the States in which the property described in such surveys is
located and acceptable to the Administrative Agent, showing all buildings and
other improvements, any off-site improvements, the location of any easements,
parking spaces, rights of way, building set-back lines and other dimensional
regulations and the absence of encroachments, either by such improvements or on
to such property, and other defects, other than encroachments and other defects
acceptable to the Administrative Agent,

(D) if required by the Administrative Agent, engineering, soils and other
reports as to the properties described in the Mortgages, in form and substance
and from professional firms acceptable to the Administrative Agent,

(E) if required by the Administrative Agent, estoppel and consent agreements, in
form and substance satisfactory to the Administrative Agent, executed by each of
the lessors of the leased real properties listed on Schedule 5.08(d)(i), along
with (1) a memorandum of lease in recordable form with respect to such leasehold
interest, executed and acknowledged by the owner of the affected real property,
as lessor, or (2) evidence that the applicable lease with respect to such
leasehold interest or a memorandum thereof has been recorded in all places
necessary or desirable, in the Administrative Agent’s reasonable judgment, to
give constructive notice to third-party purchasers of such leasehold interest,
or (3) if such leasehold interest was acquired or subleased from the holder of a
recorded leasehold interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form
satisfactory to the Administrative Agent,

(F) evidence of the insurance required by the terms of the Mortgages,

(G) if required by the Administrative Agent, an appraisal of each of the
properties described in the Mortgages complying with the requirements of the
Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989, and

 

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(H) evidence that all other action that the Administrative Agent may deem
necessary or desirable in order to create valid first and subsisting Liens on
the property described in the Mortgages has been taken;

(v) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which such
Loan Party is a party or is to be a party;

(vi) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed
and is validly existing, in good standing and qualified to engage in business in
each jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;

(vii) a favorable opinion of Latham & Watkins LLP, counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, as to the matters set
forth in Exhibit I-1 and such other matters concerning the Loan Parties and the
Loan Documents as the Required Lenders may reasonably request;

(viii) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;

(ix) copies of the financial statements referred to in Sections 5.05(a) and
(b) and a certificate signed by a Responsible Officer of the Borrower certifying
(A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied, and (B) that there has been no event or circumstance since the date
of the Audited Financial Statements that has had or could be reasonably expected
to have, either individually or in the aggregate, a Material Adverse Effect;

(x) certificates attesting to the Solvency of each Loan Party before and after
giving effect to the Transaction, from its chief financial officer;

(xi) if required by the Administrative Agent, an environmental assessment
report, in form and substance satisfactory to the Lenders from an environmental
consulting firm acceptable to the Lenders, which report shall identify existing
and potential environmental concerns and shall quantify related costs and
liabilities, associated with any facilities of Holdings, the Borrower or any of
their respective Subsidiaries, and the Lenders shall be satisfied with the
nature and amount of any such matters and with Holdings’ plans with respect
thereto;

 

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(xii) evidence that all insurance required to be maintained pursuant to the Loan
Documents has been obtained and is in effect, together with the certificates of
insurance, naming the Administrative Agent, on behalf of the Lenders, as an
additional insured or loss payee, as the case may be, under all insurance
policies maintained with respect to the assets and properties of the Loan
Parties that constitutes Collateral;

(xiii) a duly completed Compliance Certificate as of the last day of the fiscal
quarter of Holdings ended October 1, 2006, signed by chief executive officer,
chief financial officer, treasurer or controller of the Holdings; and

(xvii) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent or any Lender reasonably may require.

(b) Lender Fees. (i) All fees required to be paid to the Administrative Agent
and the Arranger on or before the Funding Date shall have been paid and (ii) all
fees required to be paid to the Lenders on or before the Funding Date shall have
been paid.

(c) Counsel Fees. Unless waived by the Administrative Agent, the Borrower shall
have paid all fees, charges and disbursements of counsel to the Administrative
Agent (directly to such counsel if requested by the Administrative Agent) to the
extent invoiced prior to or on the Funding Date, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower and the
Administrative Agent).

(d) Ratings. Holdings shall have received a corporate family rating of not less
than B3 from Moody’s and a corporate credit rating of not less than B from S&P.

(e) Capital Structure, etc.. The Arranger and the Administrative Agent shall be
reasonably satisfied with (a) the corporate, capital and ownership structure of
the Loan Parties and their respective Subsidiaries (including their respective
Organization Documents and each agreement and instrument relating thereto
(including stockholders’ and management agreements)), (b) the management and
operation of Holdings, the Borrower and their respective Subsidiaries and
(c) the amount, tenor, ranking and other terms and conditions of all other
equity and debt financings of the Loan Parties (including any intercompany
Indebtedness).

4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans of one Type to another Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:

(a) Representations and Warranties. The representations and warranties of the
Borrower and each other Loan Party contained in Article V or any other Loan
Document, or which are contained in any document furnished at any time under or
in connection herewith or

 

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therewith, shall be true and correct on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this
Section 4.02, the representations and warranties contained in Sections 5.05(a)
and (b) shall be deemed to refer to the most recent statements furnished
pursuant to Sections 6.01(a) and (b), respectively.

(b) No Default. No Default shall exist, or would result from such proposed
Credit Extension or from the application of the proceeds thereof.

(c) Other. The Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans to the other Type or a continuation of Eurodollar
Rate Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each of Holdings and the Borrower represents and warrants to the Administrative
Agent and the Lenders that:

5.01 Existence, Qualification and Power. Each Loan Party and each of its
Subsidiaries (a) is duly organized or formed, validly existing and, as
applicable, in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to
(i) own or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party and
consummate the Transaction, and (c) is duly qualified and is licensed and, as
applicable, in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license; except in each case referred to in
clause (b)(i) or (c), to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is or is to be a
party have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law.

 

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5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document or for the
consummation of the Transaction, (b) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (c) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
first or second priority nature thereof, as the case may be) or (d) the exercise
by the Administrative Agent or any Lender of its rights under the Loan Documents
or the remedies in respect of the Collateral pursuant to the Collateral
Documents, except for the authorizations, approvals, actions, notices and
filings listed on Schedule 5.03, all of which have been duly obtained, taken,
given or made and are in full force and effect. All applicable waiting periods
in connection with the Transaction have expired without any action having been
taken by any Governmental Authority restraining, preventing or imposing
materially adverse conditions upon the Transaction or the rights of the Loan
Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired by any of
them.

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.

5.05 Financial Statements; No Material Adverse Effect; No Internal Control
Event. (a) Audited Financial Statements. The Audited Financial Statements
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Borrower and
its Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness.

(b) Unaudited Financial Statements. The unaudited consolidated and consolidating
balance sheets of Holdings and its Subsidiaries dated June 30, 2006, and the
related consolidated and consolidating statements of income or operations,
shareholders’ equity and cash flows for the fiscal quarter ended on that date
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, and
(ii) fairly present the financial condition of Holdings and its Subsidiaries as
of the date thereof and their results of operations for the period covered
thereby, subject, in the case of clauses (i) and (ii), to the absence of
footnotes and to normal year-end audit adjustments. Schedule 5.05 sets forth all
material indebtedness and other liabilities, direct or contingent, of Holdings
and its consolidated Subsidiaries as of the date of such financial statements,
including liabilities for taxes, material commitments and Indebtedness.

 

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(c) No Material Adverse Effect. Since the date of the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.

5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Borrower after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any of its
Subsidiaries or against any of their properties or revenues that (a) purport to
affect or pertain to this Agreement, any other Loan Document or the consummation
of the Transaction, or (b) except as specifically disclosed in Schedule 5.06
(the “Disclosed Litigation”), either individually or in the aggregate, if
determined adversely, could reasonably be expected to have a Material Adverse
Effect.

5.07 No Default. Neither any Loan Party nor any Subsidiary thereof is in default
under or with respect to, or a party to, any Contractual Obligation that could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. No Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Agreement
or any other Loan Document.

5.08 Ownership of Property; Liens; Investments. (a) Title. Each Loan Party and
each of its Subsidiaries has good record and marketable title in fee simple to,
or valid leasehold interests in, all real property necessary or used in the
ordinary conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(b) List of Liens. Schedule 5.08(b) sets forth a complete and accurate list of
all Liens on the property or assets of each Loan Party and each of its
Subsidiaries, showing as of the Funding Date the lienholder thereof, the
principal amount of the obligations secured thereby and the property or assets
of such Loan Party or such Subsidiary subject thereto. The property of each Loan
Party and each of its Subsidiaries is subject to no Liens, other than Liens set
forth on Schedule 5.08(b), and as otherwise permitted by Section 7.01.

(c) Owned Real Property. Schedule 5.08(c) sets forth a complete and accurate
list of all real property owned by each Loan Party and each of its Subsidiaries,
showing as of the Funding Date the street address, county or other relevant
jurisdiction, state, record owner and book and market value thereof. Each Loan
Party and each of its Subsidiaries has good, marketable and insurable fee simple
title to the real property owned by such Loan Party or such Subsidiary, free and
clear of all Liens, other than Liens created or permitted by the Loan Documents.

(d) Leased Real Property. (i) Schedule 5.08(d)(i) sets forth a complete and
accurate list of all leases of real property under which any Loan Party or any
Subsidiary of a Loan Party is the lessee, showing as of the Funding Date the
street address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the legal,
valid and binding obligation of the lessor thereof, enforceable in accordance
with its terms.

 

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(ii) Schedule 5.08(d)(ii) sets forth a complete and accurate list of all leases
of real property under which any Loan Party or any Subsidiary of a Loan Party is
the lessor, showing as of the Funding Date the street address, county or other
relevant jurisdiction, state, lessor, lessee, expiration date and annual rental
cost thereof. Each such lease is the legal, valid and binding obligation of the
lessee thereof, enforceable in accordance with its terms.

(e) Investments. Schedule 5.08(e) sets forth a complete and accurate list of all
Investments held by any Loan Party or any Subsidiary of a Loan Party on the
Funding Date, showing as of the Funding Date the amount, obligor or issuer and
maturity, if any, thereof.

5.09 Environmental Compliance. (a) Generally. The Loan Parties and their
respective Subsidiaries conduct in the ordinary course of business a review of
the effect of existing Environmental Laws and claims alleging potential
liability or responsibility for violation of any Environmental Law on their
respective businesses, operations and properties, and as a result thereof the
Borrower has reasonably concluded that, except as specifically disclosed in
Schedule 5.09, such Environmental Laws and claims could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) No NPL or CERCLIS Listing. Except as otherwise set forth in Schedule 5.09,
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 or is adjacent to any
such property; there are no and never have been any underground or above-ground
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 the knowledge of the Loan Parties, on any
property formerly owned or operated by any Loan Party or any of its
Subsidiaries; there is no asbestos or asbestos-containing material on any
property currently owned or operated by any Loan Party or any of its
Subsidiaries; 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.

(c) No Hazardous Materials. Except as otherwise set forth on Schedule 5.09,
neither any Loan Party nor any of its Subsidiaries is undertaking, and has not
completed, 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 Authority or the requirements of any Environmental
Law; and all 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.

5.10 Insurance. The properties of the Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.

 

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5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is
party to any tax sharing agreement.

5.12 ERISA Compliance. (a) Generally. Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other Federal or
state Laws. Each Plan that is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Borrower, nothing has occurred
which would prevent, or cause the loss of, such qualification. The Borrower and
each ERISA Affiliate have made all required contributions to each Plan subject
to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.

(b) No Claims. There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

(c) No ERISA Event, Unfunded Pension Liabilities, etc. (i) No ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any material liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such material liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.

(d) Foreign Plans. With respect to each scheme or arrangement mandated by a
government other than the United States (a “Foreign Government Scheme or
Arrangement”) and with respect to each material employee benefit plan maintained
or contributed to by any Loan Party or any Subsidiary of any Loan Party that is
not subject to United States law (a “Foreign Plan”):

 

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(i) any material employer and employee contributions required by law or by the
terms of any Foreign Government Scheme or Arrangement or any Foreign Plan have
been made, or, if applicable, accrued, in accordance with normal accounting
practices;

(ii) the fair market value of the assets of each funded Foreign Plan, the
liability of each insurer for any Foreign Plan funded through insurance or the
book reserve established for any Foreign Plan, together with any accrued
contributions, is substantially sufficient to procure or provide for the accrued
benefit obligations, as of the Funding Date, with respect to all current and
former participants in such Foreign Plan according to the actuarial assumptions
and valuations most recently used to account for such obligations in accordance
with applicable generally accepted accounting principles; and

(iii) each Foreign Plan required to be registered has been registered and has
been maintained in good standing with applicable regulatory authorities.

5.13 Subsidiaries; Equity Interests; Loan Parties. As of the Funding Date, no
Loan Party has any Subsidiaries other than those specifically disclosed in Part
(a) of Schedule 5.13, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and non-assessable and are
owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free
and clear of all Liens except those created under the Collateral Documents. No
Loan Party has any equity investments in any other corporation or entity other
than those specifically disclosed in Part (b) of Schedule 5.13. All of the
outstanding Equity Interests in the Borrower have been validly issued, are fully
paid and non-assessable and are owned by Holdings and Spansion Technologies Inc.
in the amounts specified on Part (c) of Schedule 5.13 free and clear of all
Liens except those created under the Collateral Documents. Set forth on Part
(d) of Schedule 5.13 is a complete and accurate list of all Loan Parties,
showing as of the Funding Date (as to each Loan Party) the jurisdiction of its
incorporation, the address of its principal place of business and its U.S.
taxpayer identification number or, in the case of any non-U.S. Loan Party that
does not have a U.S. taxpayer identification number, its unique identification
number issued to it by the jurisdiction of its incorporation. The copy of the
charter of each Loan Party and each amendment thereto provided pursuant to
Section 4.01(a)(vi) is a true and correct copy of each such document, each of
which is valid and in full force and effect.

5.14 Margin Regulations; Investment Company Act. The Borrower is not engaged and
will not engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock. None of the Borrower, any Person
Controlling the Borrower, or any Subsidiary is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.

5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries or any other Loan Party is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse

 

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Effect. No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or under any other Loan Document (in each case as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.

5.16 Compliance with Laws. Each Loan Party and each Subsidiary thereof is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

5.17 Intellectual Property; Licenses, Etc. Each Loan Party and each of its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, unless the failure to own or
possess such right could not reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Borrower and Holdings, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by any Loan Party or any of
their Subsidiaries infringes upon any rights held by any other Person, unless
such infringement could not reasonably be expected to have a Material Adverse
Effect. No claim or litigation regarding any of the foregoing is pending or, to
the best knowledge of the Borrower, threatened, which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.18 Solvency. Each Loan Party is, individually and together with its
Subsidiaries on a consolidated basis, Solvent.

5.19 Casualty, Etc. Neither the businesses nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

5.20 Labor Matters. Other than as set forth on Schedule 5.20 on the Funding
Date, there are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of the
Funding Date and neither the Borrower nor any Subsidiary has suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years.

 

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5.21 Transactions with Affiliates. Except as disclosed on Schedule 5.21, none of
the Borrower or any Subsidiary is a party to any contract or agreement with, or
has any other commitment of any nature or kind, to any Affiliate of the Borrower
which would result in a breach of the Borrower’s covenants and agreements set
forth in Section 7.08.

5.22 Broker’s Fees. No Loan Party has any obligation to any Person in respect of
any finder’s, broker’s, investment banking or other similar fee in connection
with any of the transactions contemplated by the Loan Documents.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Borrower and
Holdings shall, and shall (except in the case of the covenants set forth in
Sections 6.01, 6.02, 6.03 and 6.11) cause each Subsidiary to:

6.01 Financial Statements. Deliver to the Administrative Agent and each Lender,
in form and detail satisfactory to the Administrative Agent and the Required
Lenders, each of the following:

(a) Annual Financials. As soon as available, but in any event within 90 days
after the end of each fiscal year of Holdings, a consolidated and consolidating
balance sheets of Holdings and its Subsidiaries as at the end of such fiscal
year, and the related consolidated and consolidating statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by a report and opinion of a Registered
Public Accounting Firm of nationally recognized standing reasonably acceptable
to the Required Lenders, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and applicable Securities
Laws and shall not be subject to any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit or
with respect to the absence of any material misstatement and such consolidating
statements to be certified by the chief executive officer, chief financial
officer, treasurer or controller of Holdings to the effect that such statements
are fairly stated in all material respects when considered in relation to the
consolidated financial statements of Holdings and its Subsidiaries.

(b) Quarterly Financials. As soon as available, but in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal year of
Holdings, a consolidated and consolidating balance sheets of the Holdings and
its Subsidiaries as at the end of such fiscal quarter, and the related
consolidated and consolidating statements of income or operations, shareholders’
equity and cash flows for such fiscal quarter and for the portion of the
Borrower’s fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous fiscal
year and the corresponding portion of the previous fiscal year, all in
reasonable detail, such consolidated statements to be certified by the chief
executive officer, chief financial officer, treasurer or controller of the
Borrower as fairly

 

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presenting the financial condition, results of operations, shareholders’ equity
and cash flows of the Borrower and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes
and such consolidating statements to be certified by the chief executive
officer, chief financial officer, treasurer or controller of the Borrower to the
effect that such statements are fairly stated in all material respects when
considered in relation to the consolidated financial statements of the Borrower
and its Subsidiaries.

As to any information contained in materials furnished pursuant to
Section 6.02(d), neither Holdings nor the Borrower shall not be separately
required to furnish such information under Section 6.01(a) or (b) above, but the
foregoing shall not be in derogation of the obligation of Holdings to furnish
the information and materials described in Sections 6.01(a) and (b) above at the
times specified therein.

6.02 Certificates; Other Information. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders, each of the following:

(a) [Reserved].

(b) Compliance Certificate. Concurrently with the delivery of the financial
statements referred to in Sections 6.01(a) and (b), (i) a duly completed
Compliance Certificate signed by the chief executive officer, chief financial
officer, treasurer or controller of Holdings, and in the event of any change in
generally accepted accounting principles used in the preparation of such
financial statements, Holdings shall also provide, if necessary for the
determination of compliance with Section 7.11, a statement of reconciliation
conforming such financial statements to GAAP and (ii) a copy of management’s
discussion and analysis with respect to such financial statements.

(c) Audit Reports, Management Letters and Recommendations. Promptly after any
request by the Administrative Agent or any Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of any Loan Party
by independent accountants in connection with the accounts or books of any Loan
Party or any of its Subsidiaries, or any audit of any of them.

(d) Securities Filings. Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or communication
sent to the stockholders of Holdings, and copies of all annual, regular,
periodic and special reports and registration statements which Holdings may file
or be required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, or with any national securities exchange, and in any case
not otherwise required to be delivered to the Administrative Agent pursuant
hereto.

(e) Noteholder Reports. Promptly after the furnishing thereof, copies of any
statement or report furnished to any holder of debt securities of any Loan Party
or of any of its Subsidiaries pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be furnished to the
Lenders pursuant to Section 6.01 or any other clause of this Section 6.02.

 

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(f) Insurance Summary. Not later than June 30 of each year, a report summarizing
the insurance coverage (specifying type, amount and carrier) in effect for each
Loan Party and its Subsidiaries and containing such additional information as
the Administrative Agent, or any Lender through the Administrative Agent, may
reasonably specify.

(g) SEC Correspondence. Promptly, and in any event within five Business Days
after receipt thereof by any Loan Party or any Subsidiary thereof, copies of
each notice or other correspondence received from the SEC (or comparable agency
in any applicable non-U.S. jurisdiction) concerning any investigation by such
agency regarding financial or other operational results of any Loan Party or any
Subsidiary thereof.

(h) Environmental Notices. Promptly after the assertion or occurrence thereof,
notice of any action or proceeding 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,
(ii) result in any Environmental Lien or (iii) cause any property described in
the Mortgages to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law.

(i) Schedule Supplements. As soon as available, but in any event within 30 days
after the end of each fiscal year of Holdings, (i) a report supplementing
Schedules 5.08(c), 5.08(d)(i) and 5.08(d)(ii), including an identification of
all owned and leased real property disposed of by any Loan Party or any
Subsidiary thereof during such fiscal year, a list and description (including
the street address, county or other relevant jurisdiction, state, record owner,
book value thereof and, in the case of leases of property, lessor, lessee,
expiration date and annual rental cost thereof) of all real property acquired or
leased during such fiscal year and a description of such other changes in the
information included in such schedules as may be necessary for such schedules to
be accurate and complete; and (ii) a report supplementing Schedules 5.08(e) and
5.13 and each schedule to the Security Agreement containing a description of all
changes in the information included in such schedules as may be necessary for
such schedules to be accurate and complete, each such report to be signed by a
Responsible Officer of Holdings and to be in a form reasonably satisfactory to
the Administrative Agent.

(j) Additional Reporting. Promptly, such additional information regarding the
business, financial, legal or corporate affairs of any Loan Party or any
Subsidiary thereof, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Holdings or the Borrower posts such documents, or provides a link thereto on
Holding’s website on the Internet at the website address listed on Schedule
11.02; or (ii) on which such documents are posted on Holding’s or the Borrower’s
behalf on an Internet

 

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or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that: (i) Holdings or the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any Lender
that requests Holdings or the Borrower to deliver such paper copies until a
written request to cease delivering paper copies is given by the Administrative
Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent
and each Lender (by telecopier or electronic mail) of the posting of any such
documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents. Notwithstanding anything
contained herein, in every instance Holdings or the Borrower shall be required
to provide paper copies of the Compliance Certificates required by
Section 6.02(b) to the Administrative Agent. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by Holdings or the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that so long as the Borrower is the
issuer of any outstanding debt or equity securities that are registered or
issued pursuant to a private offering or is actively contemplating issuing any
such securities it will use commercially reasonable efforts to identify that
portion of the Borrower Materials that may be distributed to the Public Lenders
and that (w) all such Borrower Materials shall be clearly and conspicuously
marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall
appear prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrower shall be deemed to have authorized the Administrative
Agent, the Arranger and the Lenders to treat such Borrower Materials as not
containing any material non-public information (although it may be sensitive and
proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as
set forth in Section 11.07); (y) all Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated
“Public Investor;” and (z) the Administrative Agent and the Arranger shall be
entitled to treat any Borrower Materials that are not marked “PUBLIC” as being
suitable only for posting on a portion of the Platform not designated “Public
Investor.” Notwithstanding the foregoing, the Borrower shall be under no
Obligation to mark any Borrower Materials “PUBLIC”.

6.03 Notices. Notify the Administrative Agent and the Lenders in writing of the
following matters at the following times:

(a) Promptly, but in any event within one Business Day, after becoming aware of
any Default;

 

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(b) Promptly after becoming aware of any matter that has resulted or could
reasonably be expected to result in a Material Adverse Effect, including
(i) breach or non-performance of, or any default under, a Contractual Obligation
of any Loan Party or any Subsidiary thereof; (ii) any violation of any law,
statute, regulation, or ordinance of a Governmental Authority affecting
Holdings, the Borrower or any of their Subsidiaries, (iii) any pending or
threatened dispute, litigation, investigation, proceeding or suspension between
any Loan Party or any Subsidiary thereof and any Governmental Authority; or
(iv) the commencement of, or any material development in, any litigation or
proceeding affecting any Loan Party or any Subsidiary thereof, including
pursuant to any applicable Environmental Laws;

(c) Within ten (10) Business Days after Holdings or the Borrower or any ERISA
Affiliate knows or has reason to know, of the occurrence of any ERISA Event;

(d) Promptly after becoming aware of any pending material change (other than a
change required by GAAP or disclosed in filings with the SEC) in accounting
policies or financial reporting practices by any Loan Party or any Subsidiary
thereof;

(e) Any change in the Borrower’s name, state of organization, locations of
Collateral, or form of organization, or trade names under which the Borrower
will sell inventory, in each case at least thirty (30) days prior thereto;

(f) The occurrence of (i) any Disposition of property or assets for which the
Borrower is required to make a mandatory prepayment pursuant to Section 2.03(b),
(ii) any sale of capital stock or other Equity Interests for which the Borrower
is required to make a mandatory prepayment pursuant to Section 2.03(b), and
(iii) any incurrence or issuance of any Indebtedness for which the Borrower is
required to make a mandatory prepayment pursuant to Section 2.03(b), in each
case at least five (5) Business Days prior thereto if the Borrower has elected
to deposit such prepayment in a Prepayment Account pursuant to Section 2.03(c);
and

(g) Promptly after becoming aware of any announcement by Moody’s or S&P of any
change or possible change in a Debt Rating.

Each notice pursuant to Section 6.03 (other than Section 6.03(f) or (g)) shall
be accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto. Each notice
pursuant to Section 6.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been
breached.

6.04 Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

 

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6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; provided, however, that the Borrower and its Subsidiaries
may consummate any merger or consolidation permitted under Section 7.04;
(b) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

6.06 Maintenance of Properties. Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted.

6.07 Maintenance of Insurance.

(a) Insurance Generally.

(i) Maintain with financially sound and reputable insurers having a rating of at
least A-VII or better by Best Rating Guide, insurance against loss or damage by
fire with extended coverage; theft, burglary, pilferage and loss in transit;
larceny, embezzlement or other criminal liability; business interruption; public
liability and third party property damage. Without limiting the foregoing, in
the event that any improved Real Estate covered by the Mortgage(s) is determined
to be located within an area that has been identified by the Director of the
Federal Emergency Management Agency as a Special Flood Hazard Area (“SFHA”), the
Borrower shall purchase and maintain flood insurance on the improved Real Estate
and any Equipment and Inventory located on such Real Estate. The amount of said
flood insurance shall, at a minimum, comply with applicable federal regulations
as required by the Flood Disaster Protection Act of 1973, as amended.

(ii) The Borrower shall cause the Administrative Agent, for the ratable benefit
of the Administrative Agent and the Lenders, to be named as secured party or
mortgagee and lender’s loss payee (as their interest may appear) on each policy
insuring the Collateral or additional insured, on any liability policy, in each
case, in a manner acceptable to the Administrative Agent. Each policy of
insurance shall contain a clause or endorsement requiring that the insurer shall
endeavor to give not less than thirty (30) days’ prior written notice to the
Administrative Agent in the event of cancellation of the policy for any reason
whatsoever and a clause or endorsement stating that the interest of the
Administrative Agent shall not be impaired or invalidated by any act or neglect
of the Borrower or any of its Subsidiaries or the owner of any Real Estate (save
for non-payment of premium) for purposes more hazardous than are permitted by
such policy. All premiums for such insurance shall be paid by the Borrower when
due, and, if

 

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requested by the Administrative Agent or any Lender, certificates of insurance
shall be delivered to the Administrative Agent, in sufficient quantity for
distribution by the Administrative Agent to each of the Lenders. If the Borrower
fails to procure such insurance or to pay the premiums therefor when due, the
Administrative Agent may procure such insurance or make such payments on behalf
of the Borrower.

(b) Insurance and Condemnation Proceeds. The Borrower shall promptly notify the
Administrative Agent and the Lenders of any loss, damage, or destruction to the
Collateral, whether or not covered by insurance, of any single occurrence in
excess of $1,000,000. The Agent is hereby authorized to collect all insurance
and condemnation proceeds (or if no Event of Default exists, proceeds in excess
of $10,000,000) in respect of Collateral directly and to apply or remit them as
follows: the Administrative Agent shall permit or require the Borrower to use
such proceeds, or any part thereof, to replace, repair, restore or rebuild the
relevant fixed assets in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss, damage
or destruction so long as (1) no Default or Event of Default has occurred and is
continuing, and (2) the Borrower first (i) provides the Administrative Agent and
the Required Lenders with plans and specifications for any such repair or
restoration which shall be reasonably satisfactory to the Administrative Agent
and the Required Lenders and (ii) demonstrates to the reasonable satisfaction of
the Administrative Agent and the Required Lenders that the funds available to it
will be sufficient to complete such project in the manner provided therein. In
all other circumstances, the Administrative Agent shall apply such insurance and
condemnation proceeds, ratably, to the reduction of the Obligations in the order
provided for in Section 2.03(b)(v).

6.08 Compliance with Laws. Comply in all material respects with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

6.09 Books and Records. Maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and
business of Holdings, the Borrower or such Subsidiary, as the case may be.

6.10 Inspection Rights. Permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal
business hours not more than four times per year, upon reasonable advance notice
to the Borrower; provided, however, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.

 

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6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for general
corporate purposes not in contravention of any Law or of any Loan Document.

6.12 Covenant to Guarantee Obligations and Give Security.

(a) Formation or Acquisition of New Subsidiary. Upon the formation or
acquisition of any new direct or indirect Material Subsidiary by any Loan Party,
then the Borrower shall, at the Borrower’s expense:

(i) within 10 days after such formation or acquisition, cause such Material
Subsidiary, and cause each direct and indirect parent of such Material
Subsidiary (if it has not already done so), to duly execute and deliver to the
Administrative Agent a Joinder Agreement, pursuant to which such other Loan
Party shall guaranty the other Loan Parties’ obligations under the Loan
Documents and pledge a security interest in and to all of its assets in support
of such guaranty in accordance with the terms and conditions of the Security
Agreement,

(ii) within 10 days after such formation or acquisition, furnish to the
Administrative Agent a description of the real and personal properties of such
Material Subsidiary, in detail satisfactory to the Administrative Agent,

(iii) within 15 days after such formation or acquisition, cause such Material
Subsidiary and each direct and indirect parent of such Material Subsidiary (if
it has not already done so) to duly execute and deliver to the Administrative
Agent deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold
mortgages, leasehold deeds of trust, Security Agreement Supplements and other
security and pledge agreements, as specified by and in form and substance
satisfactory to the Administrative Agent (including delivery of all Pledged
Interests in and of such Material Subsidiary, and other instruments of the type
specified in Section 4.01(a)(iii)), securing payment of all the Obligations of
such Material Subsidiary or such parent, as the case may be, under the Loan
Documents and constituting Liens on all such real and personal properties,

(iv) within 30 days after such formation or acquisition, cause such Material
Subsidiary and each direct and indirect parent of such Material Subsidiary (if
it has not already done so) to take whatever action (including the recording of
mortgages, the filing of Uniform Commercial Code financing statements, the
giving of notices and the endorsement of notices on title documents) 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 properties purported to be
subject to the deeds of trust, trust deeds, deeds to secure debt, mortgages,
leasehold mortgages, leasehold deeds of trust, Security Agreement Supplements
and security and pledge agreements delivered pursuant to this Section 6.12,
enforceable against all third parties in accordance with their terms,

(v) within 60 days after such formation or acquisition, deliver to the
Administrative Agent, upon the request of the Administrative Agent in its sole
discretion,

 

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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), (iii) and
(iv) above, and as to such other matters as the Administrative Agent may
reasonably request, and

(vi) as promptly as practicable after such formation or acquisition, deliver,
upon the request of the Administrative Agent in its sole discretion, to the
Administrative Agent with respect to each parcel of real property owned or held
by the entity that is the subject of such formation or acquisition title
reports, surveys and engineering, soils and other reports, and environmental
assessment reports, each in scope, form and substance satisfactory to the
Administrative Agent, provided, however, that to the extent that any Loan Party
or any of its Subsidiaries shall have otherwise received any of the foregoing
items with respect to such real property, such items shall, promptly after the
receipt thereof, be delivered to the Administrative Agent.

(b) Acquisition of Real Property. As promptly as practicable after any
acquisition of a real property, deliver, upon the request of the Administrative
Agent in its reasonable discretion, to the Administrative Agent with respect to
such real property title reports, surveys and engineering, soils and other
reports, and environmental assessment reports, each in scope, form and substance
satisfactory to the Administrative Agent, provided, however, that to the extent
that any Loan Party or any of its Subsidiaries shall have otherwise received any
of the foregoing items with respect to such real property, such items shall,
promptly after the receipt thereof, be delivered to the Administrative Agent;
and within 15 days after such acquisition, cause the applicable Loan Party to
duly execute and deliver to the Administrative Agent deeds of trust, trust
deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of
trust, Security Agreement Supplements, and other security and pledge agreements,
as specified by and in form and substance satisfactory to the Administrative
Agent, securing payment of all the Obligations of the applicable Loan Party
under the Loan Documents and constituting Liens on all such properties.

(c) Further Assurances Generally. At any time upon request of the Administrative
Agent, 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 (as applicable) in
perfecting and preserving the Liens of, such guaranties, deeds of trust, trust
deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of
trust, Security Agreement Supplements and other security and pledge agreements.

6.13 Compliance with Environmental Laws.

(a) Conduct their business in compliance with all applicable Environmental Laws,
including those relating to the generation, handling, use, storage, and disposal
of any Hazardous Materials and take prompt and appropriate action to respond to
any non-compliance with Environmental Laws and shall regularly report to the
Administrative Agent on such response.

 

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(b) Submit to the Administrative Agent and the Lenders annually, commencing on
the first anniversary of the Funding Date, and on each anniversary thereafter,
an update of the status of each material environmental compliance or liability
issue. The Administrative Agent or any Lender may request copies of technical
reports prepared by the Borrower and its communications with any Governmental
Authority to determine whether the Borrower or any of its Subsidiaries is
proceeding reasonably to correct, cure or contest in good faith any alleged
non-compliance or environmental liability. The Borrower shall, at the
Administrative Agent’s or the Required Lenders’ reasonable request and at the
Borrower’s expense, (i) retain an independent environmental engineer acceptable
to the Administrative Agent to evaluate the site, including tests if
appropriate, where the non-compliance or alleged non-compliance with
Environmental Laws has occurred and prepare and deliver to the Administrative
Agent, in sufficient quantity for distribution by the Administrative Agent to
the Lenders, a report setting forth the results of such evaluation, a proposed
plan for responding to any environmental problems described therein, and an
estimate of the costs thereof, and (ii) provide to the Administrative Agent and
the Lenders a supplemental report of such engineer whenever the scope of the
environmental problems, or the response thereto or the estimated costs thereof,
shall increase in any material respect.

(c) The Administrative Agent and its representatives will have the right at any
reasonable time to enter and visit any place where any property of the Borrower
is located for the purposes of observing the property, taking and removing soil
or groundwater samples, and conducting tests on any part of the property. The
Administrative Agent is under no duty, however, to visit or observe the property
or to conduct tests, and any such acts by the Administrative Agent will be
solely for the purposes of protecting the Administrative Agent’s Liens and
preserving the Administrative Agent and the Lenders’ rights under the Loan
Documents. No site visit, observation or testing by the Administrative Agent and
the Lenders will result in a waiver of any default of the Borrower or impose any
liability on the Administrative Agent or the Lenders. In no event will any site
visit, observation or testing by the Administrative Agent be a representation
that hazardous substances are or are not present in, on or under the property,
or that there has been or will be compliance with any Environmental Law. Neither
Holdings, nor the Borrower, nor any other party is entitled to rely on any site
visit, observation or testing by the Administrative Agent. The Administrative
Agent and the Lenders owe no duty of care to protect Holdings, the Borrower or
any other party against, or to inform Holdings, the Borrower or any other party
of, any hazardous substances or any other adverse condition affecting any
property. The Administrative Agent may in its discretion disclose to Holdings,
the Borrower or to any other party if so required by law any report or findings
made as a result of, or in connection with, any site visit, observation or
testing by the Administrative Agent. Holdings and the Borrower understand and
agree that the Administrative Agent makes no warranty or representation to
either of them or any other party regarding the truth, accuracy or completeness
of any such report or findings that may be disclosed. Holdings and the Borrower
also understand that depending on the results of any site visit, observation or
testing by the Administrative Agent and disclosed to Holdings or the Borrower,
it may have a legal obligation to notify one or more environmental agencies of
the results, that such reporting requirements are site-specific, and are to be
evaluated by Holdings or the Borrower without advice or assistance from the
Administrative Agent. In each instance, the Administrative Agent will give the
Borrower reasonable notice before entering any property the Administrative Agent
is permitted

 

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to enter under this Section 6.13(c). The Administrative Agent will make
reasonable efforts to avoid interfering with the Borrower’s use of any property
in exercising any rights provided hereunder.

6.14 [Reserved].

6.15 Further Assurances. Promptly upon request by the Administrative Agent, or
any Lender through the Administrative Agent, (a) correct any material defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) carry out more effectively
the purposes of the Loan Documents, (ii) 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, (iii) 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 (iv) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be granted to the
Secured 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.

6.16 Compliance with Terms of Leaseholds. Make all payments and otherwise
perform all obligations in respect of all leases of real property to which
Holdings, the Borrower or any of their Subsidiaries is a party, keep such leases
in full force and effect and not allow such leases to lapse or be terminated or
any rights to renew such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to such leases and
cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so, except, in any case, where
the failure to do so, either individually or in the aggregate, could not be
reasonably likely to have a Material Adverse Effect.

6.17 Lien Searches. Promptly following receipt of the acknowledgment copy of any
financing statements filed under the Uniform Commercial Code in any jurisdiction
by or on behalf of the Secured Parties, deliver to the Administrative Agent
completed requests for information listing such financing statement and all
other effective financing statements filed in such jurisdiction that name any
Loan Party as debtor, together with copies of such other financing statements.

6.18 Material Contracts. Perform and observe all the terms and provisions of
each Material Contract, each of which as of the Funding Date is listed on
Schedule 6.18 hereto, to be performed or observed by it, maintain each such
Material Contract in full force and effect, enforce each such Material Contract
in accordance with its material terms, and upon the occurrence and during the
continuance of a Default, take all such action to such end as may be from time
to time requested by the Administrative Agent and, upon request of the
Administrative

 

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Agent, make to each other party to each such Material Contract such demands and
requests for information and reports or for action as any Loan Party or any of
its Subsidiaries is entitled to make under such Material Contract, and cause
each of its Subsidiaries to do so, in each case where failure to do so could
reasonably be expected to have a Material Adverse Effect.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Borrower shall not,
nor shall it permit any Subsidiary to, directly or indirectly, and solely in the
case of Section 7.17, Holdings shall not:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, or sign
or file or suffer to exist under the Uniform Commercial Code of any jurisdiction
a financing statement that names the Borrower or any of its Subsidiaries as
debtor, or assign any accounts or other right to receive income, other than the
following:

(a) Liens pursuant to any Loan Document;

(b) (i) Liens in favor of the Revolving Credit Agent securing obligations under
the Revolving Credit Loan Documents and any renewals or extensions thereof and
(ii) other Liens existing on the Funding Date and listed on Schedule 5.08(b) and
any renewals or extensions thereof, provided that the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased
except as contemplated by Section 7.02(e), and (iii) any renewal or extension of
the obligations secured or benefited thereby is permitted by Section 7.02(e);

(c) statutory Liens for taxes in an amount not to exceed $500,000; provided,
that, the payment of such taxes which are due and payable is being contested in
good faith and by appropriate proceedings diligently pursued and as to which
adequate financial reserves have been established on Borrower’s or Holdings’
books and records, as applicable, and a stay of enforcement of any such Lien is
in effect;

(d) inchoate Liens securing the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons; provided, that, if any
such Lien arises from the nonpayment of such claims or demand when due, such
claims or demands do not exceed $500,000 in the aggregate;

(e) Liens consisting of deposits made in the ordinary course of business in
connection with, or to secure payment of, obligations under worker’s
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of Indebtedness) or to secure indemnity, performance or other similar
bonds for the performance of bids, tenders or contracts (other than for the
repayment of Indebtedness) or to secure statutory obligations (other than liens
arising under ERISA or Environmental Liens) or surety or appeal bonds, or to
secure indemnity, performance or other similar bonds;

 

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(f) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;

(g) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h);

(h) Liens securing Indebtedness permitted under Section 7.02(g) or (j); provided
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby
does not exceed the cost of the property being financed on the date of such
financing plus up to 10% of such cost for installation and other “soft costs”
associated with the financing of such property;

(i) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Borrower or any Subsidiary of the Borrower or
becomes a Subsidiary of the Borrower; provided that such Liens were not created
in contemplation of such merger, consolidation or Investment and do not extend
to any assets other than those of the Person merged into or consolidated with
the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary,
and the applicable Indebtedness secured by such Lien is permitted under
Section 7.02(h);

(j) Liens on any property of foreign Subsidiaries securing Indebtedness of such
foreign Subsidiary permitted in Section 7.02(i) or (j) and, in the case of such
Indebtedness permitted by Section 7.02(j), the Equity Interests in Spansion
Japan Limited; and

(k) the replacement, extension or renewal of any Lien permitted by clauses (b),
(h) and (i) 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 Indebtedness secured thereby.

7.02 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) obligations (contingent or otherwise) existing or arising under any Swap
Contract, provided that (i) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with fluctuations in interest rates or foreign exchange rates
and (ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;

(b) Indebtedness evidenced by the Senior Notes and the Debentures;

 

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(c) Indebtedness of a Loan Party to any other Loan Party and Indebtedness of any
wholly owned Subsidiary owing to any Loan Party which Indebtedness is permitted
under the provisions of Section 7.03;

(d) Indebtedness under the Loan Documents;

(e) Indebtedness under the Revolving Credit Loan Documents and other
Indebtedness outstanding on the Funding Date and listed on Schedule 7.02 and any
refinancings, refundings, renewals or extensions thereof or amendments thereto;
provided that (i) the amount of such Indebtedness is not increased at the time
of such refinancing, refunding, renewal, extension or amendment except (A) with
respect to the Indebtedness under the Revolving Credit Loan Documents, to an
amount not in excess of the Cap Amount (as defined in the Intercreditor
Agreement) and (B) with respect to all other such Indebtedness, by an amount
equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an
amount equal to any existing commitments unutilized thereunder, (ii) the direct
or any contingent obligor with respect thereto is not changed as a result of or
in connection with such refinancing, refunding, renewal, extension or amendment;
(iii) the terms relating to principal amount, amortization, maturity, collateral
(if any) and subordination (if any), and other material terms taken as a whole,
of any such refinancing, refunding, renewal or extension or amendment of
Indebtedness, and of any agreement entered into and of any instrument issued in
connection therewith, are no less favorable in any material respect to the Loan
Parties or the Lenders than the terms of any agreement or instrument governing
the Indebtedness being refinanced, refunded, renewed, extended or amended, and
(iv) the interest rate applicable to any such refinanced, refunded, renewed,
extended or amended Indebtedness does not exceed the then applicable market
interest rate;

(f) Guarantees of the Borrower or any Guarantor in respect of (i) Indebtedness
permitted under clause (j) of this Section 7.02 and (ii) Indebtedness otherwise
permitted hereunder of the Borrower or any other Guarantor;

(g) Capitalized Leases of equipment and secured Indebtedness incurred to
purchase or finance equipment; provided, that, (i) any such Indebtedness is not
in excess of the fair market value (evidenced by a resolution of the Board of
Directors of Borrower set forth in an officer’s certificate delivered to
Administrative Agent) of the equipment being leased or financed; (ii) the
aggregate amount of all such Indebtedness does not exceed 15% of Total Assets;
(iii) Liens securing the same attach only to the Equipment being leased or
financed and (iv) no Default exists or would result from the consummation of
such Capitalized Lease or the incurrence of such Indebtedness;

(h) Indebtedness of any Person that becomes a Subsidiary of the Borrower after
the date hereof in accordance with the terms of Section 7.03(h), which
Indebtedness is existing at the time such Person becomes a Subsidiary of the
Borrower (other than Indebtedness incurred in contemplation of such Person’s
becoming a Subsidiary of the Borrower); provided, that the scheduled maturity
date of such Indebtedness is at least 90 days after the Maturity Date hereunder;

 

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(i) Indebtedness (other than Indebtedness permitted under clause (j) of this
Section 7.02) of any foreign Subsidiary incurred in the ordinary course of
business, so long as no Loan Party is contractually obligated directly or
indirectly to repay, guarantee, or secure any portion of such Indebtedness;

(j) Indebtedness of up to $500,000,000 incurred to finance Capital Expenditures
at the SP1 Facilities; provided, that, (i) any such Indebtedness is not in
excess of the fair market value (evidenced by a resolution of the Board of
Directors of Borrower set forth in an officer’s certificate delivered to
Administrative Agent) of the property being leased or financed; and (ii) Liens
securing the same attach only to the property being leased or financed; and

(k) Indebtedness incurred as part of the consideration for any acquisition
permitted under Section 7.03(h) so long as (i) no Default exists or would result
from the incurrence of such Indebtedness, (ii) such Indebtedness is subordinated
on terms acceptable to the Administrative Agent and the Required Lenders and
(iii) the scheduled maturity date of such Indebtedness is at least 90 days after
the Maturity Date hereunder.

7.03 Investments. Make or hold any Investments, except:

(a) Investments held by the Borrower and its Subsidiaries in the form of Cash
Equivalents;

(b) loans and advances to employees (other than payroll, travel and similar
advances to cover matters that are made in the ordinary course of business) made
in the ordinary course of business consistent with past practices; provided,
that, such loans and advances do not exceed $2,500,000 in the aggregate at any
one time outstanding;

(c) (i) Investments by the Borrower and its Subsidiaries in their respective
Subsidiaries outstanding on the Funding Date, (ii) additional Investments by the
Borrower and its Subsidiaries in Loan Parties (other than Holdings),
(iii) additional Investments by Subsidiaries of the Borrower that are not Loan
Parties in other Subsidiaries that are not Loan Parties and (iv) so long as
(A) no Default has occurred and is continuing or would result from such
Investment and (B) immediately after giving effect to such Investment, the
aggregate book value of all equipment and real property and improvements thereto
located in the United States of America subject to the first priority Lien of
the Administrative Agent for the benefit of itself and the Lenders securing the
Obligations hereunder is not less than $400,000,000, (x) Investments by the Loan
Parties in joint ventures or Subsidiaries that are not Loan Parties in an amount
(or value) of not more than $25,000,000 in any fiscal year; provided that an
additional $100,000,000 in aggregate amount (or value) may be invested during
the term of this Agreement without regard to such $25,000,000 limitation, for an
aggregate amount (or value) of all such Investments in joint ventures or
Subsidiaries that are not Loan Parties not in excess of $250,000,000; provided
further, that any portion of such $25,000,000 in Investments permitted above
made in the form of a loan or other advance may be repaid and then subsequently
reborrowed or readvanced without duplication of such amount in determining
compliance with the $25,000,000 limitation set forth above, and (y) Investments
by the Loan Parties in Subsidiaries that are not Loan Parties to finance the SP1
Facilities in an aggregate amount not more than $100,000,000;

 

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(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

(e) Guarantees permitted by Section 7.02;

(f) Investments existing on the Funding Date (other than those referred to in
Section 7.03(c)(i)) and set forth on Schedule 5.08(e);

(g) Investments by the Borrower in Swap Contracts permitted under
Section 7.02(a);

(h) the purchase or other acquisition of all of the Equity Interests in any
Person or all or any substantial portion of the property of any Person, or any
line or lines of business or division of any Person that, upon the consummation
thereof, will be wholly-owned directly by the Borrower or one or more of its
wholly-owned Subsidiaries (including as a result of a merger or consolidation);
provided that, with respect to each purchase or other acquisition made pursuant
to this Section 7.03(h):

(i) any such newly-created or acquired Subsidiary shall comply with the
requirements of Section 6.12;

(ii) the lines of business of the Person to be (or the property of which is to
be) so purchased or otherwise acquired shall be substantially the same lines of
business as one or more of the principal businesses of the Borrower and its
Subsidiaries in the ordinary course;

(iii) such purchase or other acquisition shall not include or result in any
contingent liabilities that could reasonably be expected to be material to the
business, financial condition, operations or prospects of the Borrower and its
Subsidiaries, taken as a whole (as determined in good faith by the board of
directors (or the persons performing similar functions) of the Borrower or such
Subsidiary if the board of directors is otherwise approving such transaction
and, in each other case, by a Responsible Officer);

(iv) if after giving effect to such purchase or acquisition on a Pro Forma
Basis, the Consolidated Leverage Ratio is greater than the ratio set forth below
opposite the applicable period, the total cash and noncash consideration
(including all Indebtedness incurred in connection with such Investment, all
indemnities, earnouts and other contingent payment obligations to, and the
aggregate amounts paid or to be paid under noncompete, consulting and other
affiliated agreements with, the sellers thereof; but excluding therefrom (1) the
value of any Equity Interests of Holdings or its Subsidiaries issued or
transferred to the sellers thereof, (2) Indebtedness complying with the terms of
Section 7.02(k) issued to the sellers thereof and (3) other amounts which by

 

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their terms are expressly payable at least 90 days after the Maturity Date) paid
by or on behalf of the Borrower and its Subsidiaries for any such purchase or
other acquisition, when aggregated with the total cash and noncash consideration
(calculated as set forth in the parenthetical above) paid by or on behalf of the
Borrower and its Subsidiaries for all other purchases and other acquisitions
made by the Borrower and its Subsidiaries pursuant to this Section 7.03(h) in
any fiscal year, shall not exceed $25,000,000:

 

Relevant Period

   Consolidated
Leverage Ratio

Funding Date through first fiscal quarter 2007

   2.25:1.00

Second fiscal quarter 2007 through third fiscal quarter 2008

   2.00:1.00

Fourth fiscal quarter 2008 and each fiscal quarter thereafter

   1.75:1.00

(v) (A) immediately before and immediately after giving pro forma effect to any
such purchase or other acquisition, no Default shall have occurred and be
continuing and (B) immediately after giving effect to such purchase or other
acquisition, Holdings and its Subsidiaries shall be in pro forma compliance with
all of the covenants set forth in Section 7.11, such compliance to be determined
on the basis of the financial information most recently delivered to the
Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as
though such purchase or other acquisition had been consummated as of the first
day of the fiscal period covered thereby; and

(vi) the Borrower shall have delivered to the Administrative Agent and each
Lender, at least five Business Days prior to the date on which any such purchase
or other acquisition is to be consummated, a certificate of a Responsible
Officer, in form and substance reasonably satisfactory to the Administrative
Agent and the Required Lenders, certifying that all of the requirements set
forth in this Section 7.03(h) have been satisfied or will be satisfied on or
prior to the consummation of such purchase or other acquisition;

(i) stock, obligations or other securities received in settlement of debts
created in the ordinary course of business and owing to the Borrower or a
Subsidiary or in satisfaction of judgments so long as the Revolving Credit Agent
has a security interest in such Investments perfected in a manner satisfactory
to Revolving Credit Agent in its sole discretion; and

(j) Investments representing the non-cash portion of the consideration received
in connection with a Disposition consummated in compliance with Section 7.05.

7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any

 

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Person, except that, so long as (A) no Default exists or would result therefrom
and (B) immediately after giving effect to such transaction, the aggregate book
value of all equipment and real property and improvements thereto located in the
United States of America subject to the first priority Lien of the
Administrative Agent for the benefit of itself and the Lenders securing the
Obligations hereunder is not less than $400,000,000:

(a) Holdings may merge or consolidate with the Borrower;

(b) any Subsidiary of the Borrower may merge into or consolidate with any other
Person or permit any other Person to merge into or consolidate with it;
provided, however, that in each case, immediately after giving effect thereto,
in the case of any such merger to which any Loan Party (other than the Borrower)
is a party, such Loan Party is the surviving corporation;

(c) any Loan Party may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Loan Party
(other than Holdings);

(d) any Subsidiary that is not a Loan Party may dispose of all or substantially
all its assets (including any Disposition that is in the nature of a
liquidation) to (i) another Subsidiary that is not a Loan Party or (ii) to a
Loan Party; and

(e) in connection with any acquisition permitted under Section 7.03, any
Subsidiary of the Borrower may merge into or consolidate with any other Person
or permit any other Person to merge into or consolidate with it; provided that
(i) the Person surviving such merger shall be a wholly-owned Subsidiary of the
Borrower and (ii) in the case of any such merger to which any Loan Party (other
than the Borrower) is a party, such Loan Party is the surviving Person.

7.05 Dispositions. Make any Disposition, including any sale leaseback
transaction, or enter into any agreement to make any Disposition, except:

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory in the ordinary course of business consistent with
past practice (including, without limitation, bulk sales, discounted sales and
liquidations, in each case, of stale or obsolete inventory or inventory that is
not of first-quality merchantability);

(c) Dispositions of equipment or real property; provided that (i) at the time of
such Disposition, no Default shall exist or would result from such Disposition
and (ii) immediately after giving effect to such Disposition, the aggregate book
value of all equipment and real property and improvements thereto located in the
United States of America subject to the first priority Lien of the
Administrative Agent for the benefit of itself and the Lenders securing the
Obligations hereunder is not less than $400,000,000.

 

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(d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be the Borrower or a Guarantor;

(e) Dispositions permitted by Section 7.04;

(f) non-exclusive licenses of IP Rights in the ordinary course of business and
substantially consistent with past practice;

(g) sales of Equipment in connection with sale leaseback transactions;

(h) Sale of the Borrower’s JV1/JV2 Facility substantially on the terms disclosed
to the Administrative Agent and the Lenders; and

(i) Dispositions of assets (other than accounts receivable) by the Borrower and
its Subsidiaries not otherwise permitted under this Section 7.05; provided that
(i) at the time of such Disposition, no Default shall exist or would result from
such Disposition and (ii) at least 75% of the purchase price for such asset
shall be paid to the Borrower or such Subsidiary solely in cash;

provided, however, that any Disposition pursuant to Section 7.05(a) through
Section 7.05(i) shall be for fair market value.

7.06 Restricted Payments. Directly or indirectly declare or make, or incur any
liability to make, any Restricted Payment, or issue or sell any Equity Interests
or accept any capital contributions, except:

(a) Restricted Payments to the Borrower by its Subsidiaries;

(b) Restricted Payments by Subsidiaries that are not Loan Parties (or required
to become Loan Parties) to other Subsidiaries that are not Loan Parties;

(c) Restricted Payments, not otherwise permitted hereunder, to any domestic
Subsidiary by any of its Subsidiaries, so long as a Restricted Payment of equal
amount is made to the Borrower by such domestic Subsidiary within two
(2) Business Days of the initial Restricted Payment;

(d) Restricted Payments by the Borrower in an amount sufficient to repurchase
Equity Interests of Holdings or the Borrower) from current or former officers,
directors or employees of Holdings or the Borrower, as applicable, pursuant to
the terms of agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors of Holdings or the
Borrower, as applicable, under which such individuals purchase or sell, or are
granted the option to purchase or sell, common Equity Interests; provided,
however, that (i) the aggregate amount of such repurchases shall not exceed
$10,000,000 in any calendar year and (ii) at the time of such repurchase, no
other Default or Event of Default shall have occurred and be continuing (or
result therefrom);

 

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(e) Restricted Payments by Holdings in the form of the conversion of its
convertible Indebtedness into Equity Interests of Holdings or the conversion of
the Equity Interests of Holdings into another class of its Equity Interests;

(f) Restricted Payments by Holdings in the form of cash payments in lieu of
fractional shares in connection with any Restricted Payment permitted hereunder
(“Fractional Share Payments”) and Restricted Payments by Borrower to Holdings to
permit Holdings to make such Fractional Share Payment;

(g) Restricted Payments by Holdings or Borrower consisting of the repurchase of
Capital Stock to the extent such repurchase is deemed to occur upon a cashless
exercise of stock options, restricted stock units or warrants, so long as no
Event of Default shall exist or would result therefrom;

(h) Restricted Payments by Holdings with respect to the repurchase or
redemption, and Restricted Payments by Borrower to Holdings to permit Holdings
to repurchase or redeem, for nominal consideration, preferred stock purchase
rights issued in connection with any shareholder rights plan of Holdings, so
long as no Event of Default shall exist or would result therefrom;

(i) Restricted Payments by Borrower to Holdings (i) consisting of Permitted Tax
Payments, or (ii) for corporate overhead expenses in an amount not to exceed the
limitations set forth in the Senior Notes Indenture; and

(j) issuances and sales of common Equity Interests, so long as the Net Cash
Proceeds thereof are applied to the repayment of Loans pursuant to
Section 2.03(b)(iii).

7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.

7.08 Transactions with Affiliates. Except as set forth below and in Schedule
5.21 neither Holdings, nor the Borrower nor any of their Subsidiaries shall,
sell, transfer, distribute, or pay any money or property, including, but not
limited to, any fees or expenses of any nature (including, but not limited to,
any fees or expenses for management services), to any Affiliate, or lend or
advance money or property to any Affiliate, or invest in (by capital
contribution or otherwise) or purchase or repurchase any stock or indebtedness,
or any property, of any Affiliate, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate. Notwithstanding
the foregoing, (a) Holdings, the Borrower and their Subsidiaries may engage in
transactions with Affiliates in the ordinary course of business consistent with
past practices, in amounts and upon terms (such terms to be fully disclosed to
the Administrative Agent and the Lenders for material Affiliate transactions) no
less favorable to Holdings, the Borrower and their Subsidiaries than would be
obtained in a comparable arm’s-length transaction with a third party who is not
an Affiliate; (b) the Borrower and Holdings may (i) enter into Investments in
Subsidiaries otherwise permitted hereunder and (ii) enter into any employment,
indemnification or other similar agreement or employee benefit plan with any of
its

 

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employees, officers or directors (and make payments pursuant thereto) in the
ordinary course of business and consistent with past practice, that is not
otherwise prohibited by this Agreement; provided, however, that if any such
transaction set forth in (a) or (b) above involves aggregate payments or value
in excess of $25,000,000, the Board of Directors of Holdings or Borrower, as
applicable, (including at least a majority of the disinterested members of such
Board of Directors) must approve the same and certify (as evidenced by a
resolution of such Board of Directors), in its good faith judgment, that it
believes that such transaction complies with the requirements set forth in this
Agreement with respect to the foregoing permitted transactions with Affiliates,
provided, further, that if such transaction involves aggregate payments or value
in excess of $50,000,000, the Borrower obtains a written opinion from an
independent financial advisor to the effect that the consideration to be paid or
received in connection with such transaction is fair, from a financial point of
view, to the Borrower, Holdings, or any Subsidiary, as applicable.

7.09 Burdensome Agreements. Enter into or permit to exist any Contractual
Obligation (other than this Agreement or any other Loan Document) that
(a) limits the ability (i) of any Subsidiary to make Restricted Payments to the
Borrower or any Guarantor or to otherwise transfer property to or invest in the
Borrower or any Guarantor, except for any agreement in effect (A) on the Funding
Date and set forth on Schedule 7.09 or (B) at the time any Subsidiary becomes a
Subsidiary of the Borrower, so long as such agreement was not entered into
solely in contemplation of such Person becoming a Subsidiary of the Borrower,
(ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; provided, however, that this clause (iii) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.02(i) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person.

7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

7.11 Financial Covenants.

(a) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio as of the end of any fiscal quarter of Holdings to be less than
the ratio set forth below opposite such fiscal quarter:

 

Four Fiscal Quarters Ending

   Minimum Consolidated
Interest Coverage Ratio

Funding Date through third fiscal quarter 2007

   3.00:1.00

Fourth fiscal quarter 2007 and each fiscal quarter thereafter

   4.00:1.00

 

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(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at any
time during any period of four fiscal quarters of Holdings ending on the last
day of the fiscal quarters set forth below to be greater than the ratio set
forth below opposite such fiscal quarter:

 

Four Fiscal Quarters Ending

   Maximum Consolidated
Leverage Ratio

Funding Date through first fiscal quarter 2007

   3.00:1.00

Second fiscal quarter 2007 through third fiscal quarter 2008

   2.50:1.00

Fourth fiscal quarter 2008 and each fiscal quarter thereafter

   2.25:1.00

(c) Minimum Liquidity. Permit Liquidity to be less than (i) $300,000,000 at any
time that the outstanding amount of all Consolidated Senior Secured Debt is
greater than or equal to $300,000,000 and (ii) $200,000,000 at any time that the
outstanding amount of all Consolidated Senior Secured Debt is less than
$300,000,000.

7.12 Capital Expenditures. Make or become legally obligated to make any Capital
Expenditure, except for Capital Expenditures in the ordinary course of business
not exceeding, in the aggregate for the Borrower and it Subsidiaries during each
fiscal year set forth below, the amount set forth opposite such fiscal year:

 

Fiscal Year

   Amount

2007

   $ 1,200,000,000

2008

   $ 800,000,000

2009

   $ 900,000,000

2010

   $ 900,000,000

2011

   $ 1,000,000,000

2012

   $ 1,100,000,000

; provided, however, that so long as no Default has occurred and is continuing
or would result from such expenditure, for fiscal year 2007, up to $400,000,000
of any amount set forth above, if not expended in fiscal year 2007, may be
carried over for expenditure in the fiscal year 2008, and for each fiscal year
after 2007, up to $200,000,000 of any amount set forth above, if not expended in
the fiscal year for which it is permitted above, may be carried over for
expenditure in the next following fiscal year; and provided, further, if any
such amount is so carried over, it will be deemed used in the applicable
subsequent fiscal year before the amount set forth opposite such fiscal year
above. The value of all Equity Interests of Holdings or its Subsidiaries issued
or transferred as part of any Capital Expenditure shall be excluded from the
calculation of Capital Expenditures for the purposes of the limitations set
forth above in this Section 7.12.

 

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7.13 Amendments of Organization Documents. Amend any of its Organization
Documents in any manner which adversely affects the rights of the Administrative
Agent or the Lenders.

7.14 Accounting Changes. (a) Make any material change in its accounting policies
or reporting practices, except as required by GAAP, or (b) change its fiscal
year without providing the Administrative Agent 60 days’ prior written notice.

7.15 Prepayments, Etc. of Indebtedness. Voluntarily 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
Indebtedness, except (a) the prepayment of the Credit Extensions in accordance
with the terms of this Agreement, (b) repayment of outstandings under the
Revolving Credit Agreement in accordance with its terms, (c) prepayments of
Indebtedness of foreign Subsidiaries by such foreign Subsidiary; and
(e) refinancings and refundings of Indebtedness in compliance with
Section 7.02(e).

7.16 Amendment, Etc. of Senior Notes Documents, Debenture Documents and other
Indebtedness. (a) amend, modify or change in any material manner any term or
condition of any Senior Notes Documents or Debenture Documents or give any
consent, waiver or approval thereunder, (b) waive any material default under or
any breach of any material term or condition of any Senior Notes Document or
Debenture Document, (c) take any other action in connection with any Senior
Notes Document or Debenture Document that would impair the value of the interest
or rights of any Loan Party thereunder or that would impair the rights or
interests of the Administrative Agent or any Lender or (d) amend, modify or
change in any manner any term or condition of any Indebtedness set forth in
Schedule 7.02 that would impair the value of the interest or rights of any Loan
Party thereunder or that would impair the rights or interests of the
Administrative Agent or any Lender, except for any refinancing, refunding,
renewal, extension or amendment thereof permitted by Section 7.02(e).

7.17 Holding Company. In the case of Holdings, engage in any business or
activity other than (a) the ownership of all outstanding Equity Interests in the
Borrower and Spansion Technology Inc., (b) maintaining its corporate existence,
(c) participating in tax, accounting and other administrative activities as the
parent of the consolidated group of companies, including the Loan Parties,
(d) the execution and delivery of the Loan Documents to which it is a party and
the performance of its obligations thereunder, (e) activities incidental to
being a publicly traded company, (f) guaranteeing the obligations of its direct
or indirect wholly-owned Subsidiaries, and (g) activities incidental to the
businesses or activities described in clauses (a) through (f) of this Section.

7.18 Designation of Senior Indebtedness. Designate any Indebtedness (other than
the Indebtedness under the Loan Documents and the Revolving Credit Loan
Documents) of the Borrower or any of its Subsidiaries as “Designated Senior
Indebtedness” (or any similar term) under, and as defined in, the Senior Notes
Documents.

7.19 Capital Structure. Make any change in its capital structure which could
reasonably be expected to have a Material Adverse Effect.

 

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. The Borrower or any other Loan Party fails to (i) pay when and
as required to be paid herein, any amount of principal of any Loan, or (ii) pay
within three days after the same becomes due, any interest on any Loan or any
fee due hereunder, or (iii) pay within five days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants. (i) The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10,
6.11 or 6.12, or Article VII, (ii) any of the Guarantors fails to perform or
observe any term, covenant or agreement contained in Section 10.01 hereof or
Section 2.01 of the Guaranty, as applicable, or (iii) any of the Loan Parties
fails to perform or observe any term, covenant or agreement contained in
Section 2.04(i) or (j) or Section 5.01(a) or (i) of the Security Agreement or
Section 3.1 of the respective Mortgages to which it is a party; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
when made or deemed made; or

(e) Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $25,000,000, or (B) fails to observe or perform
any other agreement or condition relating to any such Indebtedness or Guarantee
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or
(ii) there occurs under any Swap Contract an Early Termination Date

 

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(as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which a Loan Party or any Subsidiary thereof is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event
(as so defined) under such Swap Contract as to which a Loan Party or any
Subsidiary thereof is an Affected Party (as so defined) and, in either event,
the Swap Termination Value owed by such Loan Party or such Subsidiary as a
result thereof is greater than $25,000,000; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary thereof
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof becomes unable or admits in writing its inability or fails generally to
pay its debts as they become due, or (ii) any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or

(h) Judgments. There is entered against any Loan Party or any Subsidiary thereof
(i) one or more final judgments or orders for the payment of money in an
aggregate amount (as to all such judgments and orders) exceeding $10,000,000 (to
the extent neither (x) covered by independent third-party insurance as to which
the insurer is rated at least “A” by A.M. Best Company, has been notified of the
potential claim and does not dispute coverage nor (y) reserved in accordance
with GAAP), or (ii) any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 30 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount that could reasonably be
expected to have a Material Adverse Effect, or (ii) the Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount that
could reasonably be expected to have a Material Adverse Effect; or

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted

 

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hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; or any Loan Party or any other Person contests
in any manner the validity or enforceability of any provision of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any provision of any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or

(k) Change of Control. There occurs any Change of Control; or

(l) Collateral Documents. Any Collateral Document after delivery thereof
pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority Lien or
second priority Lien, as the case may be (subject to Liens permitted by
Section 7.01) on the Collateral purported to be covered thereby; or

(m) Subordination. (i) The subordination provisions of the Debenture Documents
(the “Subordinated Provisions”) shall, in whole or in part, terminate, cease to
be effective or cease to be legally valid, binding and enforceable against any
holder of the Debentures; or (ii) the Borrower or any other Loan Party shall,
directly or indirectly, disavow or contest in any manner (A) the effectiveness,
validity or enforceability of any of the Subordination Provisions, (B) that the
Subordination Provisions exist for the benefit of the Administrative Agent and
the Lenders or (C) that all payments of principal of or premium and interest on
the Debentures, or realized from the liquidation of any property of any Loan
Party, shall be subject to any of the Subordination Provisions.

8.02 Remedies upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans to be terminated,
whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; and

(c) exercise on behalf of itself, the Lenders all rights and remedies available
to it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans and all
interest and other amounts as aforesaid shall automatically become due and
payable, in each case without further act of the Administrative Agent or any
Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable as set forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall be applied by the Administrative Agent in the
following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

 

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Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including fees, charges and disbursements of counsel to the respective
Lenders and amounts payable under Article III, ratably among them in proportion
to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and other Obligations, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them;

Fifth, to payment of that portion of the obligations constituting amounts owing
under Secured Hedge Agreements and Secured Cash Management Agreements, ratably
among the Hedge Banks and the Cash Management Banks in proportion to the
respective amounts described in this clause Fifth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority. (a) Each of the Lenders hereby irrevocably
appoints Bank of America to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Administrative
Agent and the Lenders, and neither the Borrower nor any other Loan Party shall
have rights as a third party beneficiary of any of such provisions.

(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders (in its capacities as a Lender,
potential Cash Management Bank) hereby irrevocably appoints and authorizes the
Administrative Agent to act as the agent of such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Obligations, together with such

 

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powers and discretion as are reasonably incidental thereto. In this connection,
the Administrative Agent, as “collateral agent” and any co-agents, sub-agents
and attorneys-in-fact appointed by the Administrative Agent pursuant to
Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or
any portion thereof) granted under the Collateral Documents, or for exercising
any rights and remedies thereunder at the direction of the Administrative
Agent), shall be entitled to the benefits of all provisions of this Article IX
and Article XI (including Section 11.04(c), as though such co-agents, sub-agents
and attorneys-in-fact were the “collateral agent” under the Loan Documents) as
if set forth in full herein with respect thereto.

9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower or
a Lender.

 

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The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Collateral
Documents, (v) the value or the sufficiency of any Collateral, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

9.05 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

9.06 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders and the Borrower. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall be
a bank with an office in the United States, or an

 

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Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative Agent shall
notify the Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (a) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders under any of the Loan Documents,
the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and
(b) all payments, communications and determinations provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 11.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the Bookrunners or Arrangers listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent or
a Lender hereunder.

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any

 

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Loan shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether the Administrative Agent shall have made
any demand on the Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 2.07 and 11.04) allowed in such judicial
proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, if the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.07 and 11.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender to authorize the Administrative Agent to
vote in respect of the claim of any Lender or in any such proceeding.

9.10 Collateral and Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations), (ii) that is sold or to be sold as part of or in connection with
any sale permitted hereunder or under any other Loan Document, or (iii) if
approved, authorized or ratified in writing in accordance with Section 11.01;

(b) to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder; and

(c) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(h).

 

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Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.10. In each case as specified in this Section 9.10, the Administrative
Agent will, at the Borrower’s expense, execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Guaranty, in
each case in accordance with the terms of the Loan Documents and this
Section 9.10.

ARTICLE X

CONTINUING GUARANTY

10.01 Guaranty. Holdings hereby absolutely and unconditionally guarantees, as a
guaranty of payment and performance and not merely as a guaranty of collection,
prompt payment when due, whether at stated maturity, by required prepayment,
upon acceleration, demand or otherwise, and at all times thereafter, of any and
all of the Obligations, whether for principal, interest, premiums, fees,
indemnities, damages, costs, expenses or otherwise, of the Borrower to the
Secured Parties, arising hereunder and under the other Loan Documents (including
all renewals, extensions, amendments, refinancings and other modifications
thereof and all costs, attorneys’ fees and expenses incurred by the Secured
Parties in connection with the collection or enforcement thereof). The
Administrative Agent’s books and records showing the amount of the Obligations
shall be admissible in evidence in any action or proceeding, and shall be
binding upon Holdings, and conclusive for the purpose of establishing the amount
of the Obligations. This Guaranty shall not be affected by the genuineness,
validity, regularity or enforceability of the Obligations or any instrument or
agreement evidencing any Obligations, or by the existence, validity,
enforceability, perfection, non-perfection or extent of any collateral therefor,
or by any fact or circumstance relating to the Obligations which might otherwise
constitute a defense to the obligations of Holdings under this Guaranty, and
Holdings hereby irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to any or all of the foregoing.

10.02 Rights of Lenders. Holdings consents and agrees that the Secured Parties
may, at any time and from time to time, without notice or demand, and without
affecting the enforceability or continuing effectiveness hereof: (a) amend,
extend, renew, compromise, discharge, accelerate or otherwise change the time
for payment or the terms of the Obligations or any part thereof; (b) take, hold,
exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose
of any security for the payment of this Guaranty or any Obligations; (c) apply
such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their sole discretion may determine; and
(d) release or substitute one or more of any endorsers or other guarantors of
any of the Obligations. Without limiting the generality of the foregoing,
Holdings consents to the taking of, or failure to take, any action which might
in any manner or to any extent vary the risks of Holdings under this Guaranty or
which, but for this provision, might operate as a discharge of Holdings.

 

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10.03 Certain Waivers. Holdings waives (a) any defense arising by reason of any
disability or other defense of the Borrower or any other guarantor, or the
cessation from any cause whatsoever (including any act or omission of any
Secured Party) of the liability of the Borrower; (b) any defense based on any
claim that Holdings’ obligations exceed or are more burdensome than those of the
Borrower; (c) the benefit of any statute of limitations affecting Holdings’
liability hereunder; (d) any right to proceed against the Borrower, proceed
against or exhaust any security for the Obligations, or pursue any other remedy
in the power of any Secured Party whatsoever; (e) any benefit of and any right
to participate in any security now or hereafter held by any Secured Party; and
(f) to the fullest extent permitted by law, any and all other defenses or
benefits that may be derived from or afforded by applicable law limiting the
liability of or exonerating guarantors or sureties. Holdings expressly waives
all setoffs and counterclaims and all presentments, demands for payment or
performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Obligations, and all notices of acceptance
of this Guaranty or of the existence, creation or incurrence of new or
additional Obligations. Holdings waives any rights and defenses that are or may
become available to Holdings by reason of §§ 2787 and 2855, inclusive, and §§
2899 and 3433 of the California Civil Code. As provided below, this Guaranty
shall be governed by, and construed in accordance with, the laws of the State of
New York. The foregoing waivers and the provisions hereinafter set forth in this
Guaranty which pertain to California law are included solely out of an abundance
of caution, and shall not be construed to mean that any of the above-referenced
provisions of California law are in any way applicable to this Guaranty or the
Obligations.

10.04 Obligations Independent. The obligations of Holdings hereunder are those
of primary obligor, and not merely as surety, and are independent of the
Obligations and the obligations of any other guarantor, and a separate action
may be brought against Holdings to enforce this Guaranty whether or not the
Borrower or any other person or entity is joined as a party.

10.05 Subrogation. Holdings shall not exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any
payments it makes under this Guaranty until all of the Obligations and any
amounts payable under this Guaranty have been indefeasibly paid and performed in
full and the Commitments and the Facility is terminated. If any amounts are paid
to Holdings in violation of the foregoing limitation, then such amounts shall be
held in trust for the benefit of the Secured Parties and shall forthwith be paid
to the Secured Parties to reduce the amount of the Obligations, whether matured
or unmatured.

10.06 Termination; Reinstatement. This Guaranty is a continuing and irrevocable
guaranty of all Obligations now or hereafter existing and shall remain in full
force and effect until all Obligations and any other amounts payable under this
Guaranty are indefeasibly paid in full in cash and the Commitments and the
Facility with respect to the Obligations are terminated. Notwithstanding the
foregoing, this Guaranty shall continue in full force and effect or be revived,
as the case may be, if any payment by or on behalf of the Borrower or Holdings
is made, or any of the Secured Parties exercises its right of setoff, in respect
of the Obligations and such payment or the proceeds of such setoff or any part
thereof is

 

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subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by any of the
Secured Parties in their discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Laws or
otherwise, all as if such payment had not been made or such setoff had not
occurred and whether or not the Secured Parties are in possession of or have
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction. The obligations of Holdings under this paragraph shall
survive termination of this Guaranty.

10.07 Subordination. Holdings hereby subordinates the payment of all obligations
and indebtedness of the Borrower owing to Holdings, whether now existing or
hereafter arising, including but not limited to any obligation of the Borrower
to Holdings as subrogee of the Secured Parties or resulting from Holdings’
performance under this Guaranty, to the indefeasible payment in full in cash of
all Obligations. If the Secured Parties so request, any such obligation or
indebtedness of the Borrower to Holdings shall be enforced and performance
received by Holdings as trustee for the Secured Parties and the proceeds thereof
shall be paid over to the Secured Parties on account of the Obligations, but
without reducing or affecting in any manner the liability of Holdings under this
Guaranty.

10.08 Stay of Acceleration. If acceleration of the time for payment of any of
the Obligations is stayed, in connection with any case commenced by or against
Holdings or the Borrower under any Debtor Relief Laws, or otherwise, all such
amounts shall nonetheless be payable by Holdings immediately upon demand by the
Secured Parties.

10.09 Condition of Borrower. Holdings acknowledges and agrees that it has the
sole responsibility for, and has adequate means of, obtaining from the Borrower
and any other guarantor such information concerning the financial condition,
business and operations of the Borrower and any such other guarantor as Holdings
requires, and that none of the Secured Parties has any duty, and Holdings is not
relying on the Secured Parties at any time, to disclose to Holdings any
information relating to the business, operations or financial condition of the
Borrower or any other guarantor (Holdings waiving any duty on the part of the
Secured Parties to disclose such information and any defense relating to the
failure to provide the same).

10.10 Additional Guarantor Waivers and Agreements. (a) Holdings understands and
acknowledges that if the Secured Parties foreclose judicially or nonjudicially
against any real property security for the Obligations, that foreclosure could
impair or destroy any ability that Holdings may have to seek reimbursement,
contribution, or indemnification from the Borrower or others based on any right
Holdings may have of subrogation, reimbursement, contribution, or
indemnification for any amounts paid by Holdings under this Guaranty. Holdings
further understands and acknowledges that in the absence of this paragraph, such
potential impairment or destruction of Holdings’ rights, if any, may entitle
Holdings to assert a defense to this Guaranty based on Section 580d of the
California Code of Civil Procedure as interpreted in Union Bank v. Gradsky, 265
Cal. App. 2d 40 (1968). By executing this Guaranty, Holdings freely,
irrevocably, and unconditionally: (i) waives and relinquishes that defense and
agrees that Holdings will be fully liable under this Guaranty even though the
Secured Parties may foreclose, either by judicial foreclosure or by exercise of
power of sale, any deed of trust

 

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securing the Obligations; (ii) agrees that Holdings will not assert that defense
in any action or proceeding which the Secured Parties may commence to enforce
this Guaranty; (iii) acknowledges and agrees that the rights and defenses waived
by Holdings in this Guaranty include any right or defense that Holdings may have
or be entitled to assert based upon or arising out of any one or more of §§
580a, 580b, 580d, or 726 of the California Code of Civil Procedure or § 2848 of
the California Civil Code; and (iv) acknowledges and agrees that the Secured
Parties are relying on this waiver in creating the Obligations, and that this
waiver is a material part of the consideration which the Secured Parties are
receiving for creating the Obligations.

(b) Holdings waives all rights and defenses that Holdings may have because any
of the Obligations is secured by real property. This means, among other things:
(i) the Secured Parties may collect from Holdings without first foreclosing on
any real or personal property collateral pledged by the other Loan Parties; and
(ii) if the Secured Parties foreclose on any real property collateral pledged by
the other Loan Parties: (A) the amount of the Obligations may be reduced only by
the price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price, and (B) the Secured Parties may
collect from Holdings even if the Secured Parties, by foreclosing on the real
property collateral, have destroyed any right Holdings may have to collect from
the Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses Holdings may have because any of the Obligations is secured by real
property. These rights and defenses include, but are not limited to, any rights
or defenses based upon § 580a, 580b, 580d, or 726 of the California Code of
Civil Procedure.

(c) Holdings waives any right or defense it may have at law or equity, including
California Code of Civil Procedure § 580a, to a fair market value hearing or
action to determine a deficiency judgment after a foreclosure.

ARTICLE XI

MISCELLANEOUS

11.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by the Borrower or
any other Loan Party therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrower or the applicable Loan Party, as the case
may be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:

(a) waive any condition set forth in Section 4.01 (other than Section 4.01(b)(i)
or (c)), or, in the case of the initial Credit Extension, Section 4.02, without
the written consent of each Lender;

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;

 

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(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment (excluding mandatory prepayments) of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under such other Loan
Document without the written consent of each Lender entitled to such payment;

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or (subject to clause (iii) of the second proviso to this Section 11.01)
any fees or other amounts payable hereunder or under any other Loan Document, or
change the manner of computation of any financial ratio (including any change in
any applicable defined term) used in determining the Applicable Rate that would
result in a reduction of any interest rate on any Loan or any fee payable
hereunder without the written consent of each Lender entitled to such amount;
provided, however, that only the consent of the Required Lenders shall be
necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest at the Default Rate or (ii) to amend
any financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
to reduce any fee payable hereunder;

(e) change (i) Section 2.11 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender or (ii) the order of application of any reduction in the Commitments or
any prepayment of Loans from the application thereof set forth in the applicable
provisions of Section 2.03(b) or 2.04, respectively, in any manner that
materially and adversely affects the Lenders under the Facility without the
written consent of the Required Lenders;

(f) change any provision of this Section 11.01 or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder (other than the
definitions specified in clause (ii) of this Section 11.01(f)), without the
written consent of each Lender;

(g) release all or substantially all of the Collateral in any transaction or
series of related transactions, without the written consent of each Lender;

(h) release all or substantially all of the value of the Guaranty, without the
written consent of each Lender; or

(i) impose any greater restriction on the ability of any Lender under a Facility
to assign any of its rights or obligations hereunder without the written consent
of the Required Lenders;

and provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; (ii) Section 11.06(h) may not be
amended, waived or otherwise modified without the consent of each Granting
Lender all or any part of whose Loans are being funded by an SPC at the time of
such amendment, waiver or other modification; and (iii) the Fee Letter may be
amended, or rights or

 

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privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.

If any Lender does not consent to a proposed amendment, waiver, consent or
release with respect to any Loan Document that requires the consent of each
Lender and that has been approved by the Required Lenders, the Borrower may
replace such non-consenting Lender in accordance with Section 11.13; provided
that such amendment, waiver, consent or release can be effected as a result of
the assignment contemplated by such Section (together with all other such
assignments required by the Borrower to be made pursuant to this paragraph).

11.02 Notices; Effectiveness; Electronic Communications. (a) Notices Generally.
Except in the case of notices and other communications expressly permitted to be
given by telephone (and except as provided in subsection (b) below), all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:

(i) if to Holdings, the Borrower or the Administrative Agent, to the address,
telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 11.02; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
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an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to Holdings, the Borrower, any Lender or any
other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of the Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to Holdings, the Borrower, any Lender or any other Person for
indirect, special, incidental, consequential or punitive damages (as opposed to
direct or actual damages).

(d) Change of Address, Etc. Each of Holdings, the Borrower and the
Administrative Agent may change its address, telecopier or telephone number for
notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the Borrower and the
Administrative Agent. In addition, each Lender agrees to notify the
Administrative Agent from time to time to ensure that the Administrative Agent
has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify the

 

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Administrative Agent, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

11.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided, and provided under
each other Loan Document, are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

11.04 Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), and (ii) all out-of-pocket expenses
incurred by the Administrative Agent or any Lender (including the fees, charges
and disbursements of any counsel for the Administrative Agent or any Lender) in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof) and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, or, in the case of the Administrative Agent (and any sub-agent thereof)
and its Related Parties only, the administration of this Agreement and the other
Loan Documents, (ii) any Loan or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
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any other theory, whether brought by a third party or by the Borrower or any
other Loan Party or any of the Borrower’s or such Loan Party’s directors,
shareholders or creditors, and regardless of whether any Indemnitee is a party
thereto, in all cases, whether or not caused by or arising, in whole or in part,
out of the comparative, contributory or sole negligence of the Indemnitee;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
(x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by the Borrower
or any other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrower or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent) or such
Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) in its capacity as such, or against any Related Party of any of
the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.10(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of
competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

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11.05 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect. The obligations of
the Lenders under clause (b) of the preceding sentence shall survive the payment
in full of the Obligations and the termination of this Agreement.

11.06 Successors and Assigns. (a) Successors and Assigns Generally. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that neither the Borrower nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an assignee in accordance with the provisions of Section 11.06(b),
(ii) by way of participation in accordance with the provisions of
Section 11.06(d), (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 11.06(f), or (iv) to an SPC in accordance
with the provisions of Section 11.06(h) (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment(s) and the Loans at the time owing
to it); provided that any such assignment shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment under any Facility and the Loans at the time owing to it
under such Facility or in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund, no minimum amount need be assigned; and

 

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(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000,000, in the case of any assignment in
respect of Facility, unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed); provided,
however, that concurrent assignments to members of an Assignee Group and
concurrent assignments from members of an Assignee Group to a single Eligible
Assignee (or to an Eligible Assignee and members of its Assignee Group) will be
treated as a single assignment for purposes of determining whether such minimum
amount has been met;

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned;

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of (i) any
Commitment if such assignment is to a Person that is not a Lender with a
Commitment in respect of the applicable Facility, an Affiliate of such Lender or
an Approved Fund with respect to such Lender or (ii) any Loan to a Person that
is not a Lender, an Affiliate of a Lender or an Approved Fund.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

 

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(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 11.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 11.06(d). Notwithstanding anything to the contrary in the Agreement of
any other Loan Document, no assignee of interests shall be entitled to receive
any greater payment under Section 3.01 than the applicable grantor of such
assignment would have been entitled to receive with respect to the assigned
interest had no such assignment been made, and no assignee shall be entitled to
the benefits of Section 3.01 unless the Borrower is notified of the assignment
and such assignee has complied with the requirements of Section 3.01(e).

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
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approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 11.01
that affects such Participant. Subject to subsection (e) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 11.06(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 11.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.11 as though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 3.01(e) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

(h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the
option to provide all or any part of any Loan that such Granting Lender would
otherwise be obligated to make pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to fund any Loan,
and (ii) if an SPC elects not to exercise such option or otherwise fails to make
all or any part of such Loan, the Granting Lender shall be obligated to make
such Loan pursuant to the terms hereof or, if it fails to do so, to make such
payment to the Administrative Agent as is required under Section 2.10(b)(ii).
Each party hereto hereby agrees that (i) neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or

 

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otherwise increase or change the obligations of the Borrower under this
Agreement (including its obligations under Section 3.04), (ii) no SPC shall be
liable for any indemnity or similar payment obligation under this Agreement for
which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent and with the
payment of a processing fee in the amount of $3,500 (which processing fee may be
waived by the Administrative Agent in its sole discretion), assign all or any
portion of its right to receive payment with respect to any Loan to the Granting
Lender and (ii) disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper dealer
or provider of any surety or Guarantee or credit or liquidity enhancement to
such SPC.

11.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates’ respective partners,
directors, officers, employees, agents, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, any Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Borrower.

For purposes of this Section, “Information” means all information received from
any Loan Party or any Subsidiary thereof relating to any Loan Party or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by any Loan

 

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Party or any Subsidiary thereof, provided that, in the case of information
received from a Loan Party or any such Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
Federal and state securities Laws.

11.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, after obtaining the prior written
consent of the Administrative Agent, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrower or any other
Loan Party against any and all of the obligations of the Borrower or such Loan
Party now or hereafter existing under this Agreement or any other Loan Document
to such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of the Borrower or such Loan Party may be contingent or unmatured or
are owed to a branch or office of such Lender different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Lender and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that such Lender
or their respective Affiliates may have. Each Lender agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

11.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

11.10 Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall

 

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constitute an original, but all of which when taken together shall constitute a
single contract. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

11.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied.

11.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

11.13 Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender or if any other
circumstance exists hereunder that gives the Borrower the right to replace a
Lender as a party hereto, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 11.06), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:

(a) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 11.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.05) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);

 

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(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

11.14 Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES 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
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

 

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(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW

11.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

11.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated hereby, the Borrower and Holdings each acknowledge
and agree, and acknowledge their respective Affiliates’ understanding, that:
(i) the credit facilities provided for hereunder and any related arranging or
other services in connection therewith (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document)
are an arm’s-length commercial transaction between the Borrower , Holdings and
their respective Affiliates, on the one hand, and the Administrative Agent and
the Arranger, on the other hand, and each of the Borrower and Holdings is
capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated hereby and by the other
Loan Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, the
Administrative Agent and the Arranger each is and has been acting solely as a
principal and is not the financial advisor, agent or fiduciary, for the
Borrower, Holdings or any of their respective Affiliates, stockholders,
creditors or employees or any other Person; (iii) neither the Administrative
Agent nor the Arranger has assumed or will assume an advisory, agency or
fiduciary responsibility in favor of the Borrower or Holdings with respect to
any of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof or
of any other Loan Document (irrespective of whether the Administrative Agent or
the Arranger has advised or is currently advising the Borrower, Holdings or any
of their respective Affiliates on other matters) and neither the Administrative
Agent nor the Arranger has any obligation to the Borrower, Holdings or any of
their respective Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; (iv) the Administrative Agent and the Arranger and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Borrower, Holdings and their

 

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respective Affiliates, and neither the Administrative Agent nor the Arranger has
any obligation to disclose any of such interests by virtue of any advisory,
agency or fiduciary relationship; and (v) the Administrative Agent and the
Arranger have not provided and will not provide any legal, accounting,
regulatory or tax advice with respect to any of the transactions contemplated
hereby (including any amendment, waiver or other modification hereof or of any
other Loan Document) and each of the Borrower and Holdings has consulted its own
legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate. Each of the Borrower and Holdings hereby waives and releases, to
the fullest extent permitted by law, any claims that it may have against the
Administrative Agent and the Arranger with respect to any breach or alleged
breach of agency or fiduciary duty.

11.17 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of
each Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify each Loan Party in accordance
with the Act.

11.18 Time of the Essence. Time is of the essence of the Loan Documents.

11.19 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

11.20 DESIGNATED SENIOR INDEBTEDNESS. The Borrower hereby designates all the
Obligations as “Designated Senior Indebtedness” under, and as defined in, the
Debenture Documents and all supplemental indentures thereto.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

BORROWER:

SPANSION LLC, a Delaware limited liability

    company

By:

 

/s/    Dario Sacomani

Name:

 

Dario Sacomani

Title:

 

Executive Vice President and Chief Financial Officer

GUARANTOR:

SPANSION INC., a Delaware Corporation

By:

 

/s/    Dario Sacomani

Name:

 

Dario Sacomani

Title:

 

Executive Vice President and Chief Financial Officer

 

1

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BANK OF AMERICA, N.A., as Administrative Agent By:  

/s/    Ken Puro

Name:  

Ken Puro

Title:  

Vice President

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BANK OF AMERICA, N.A., as a Lender By:  

/s/    Ken Puro

Name:  

Ken Puro

Title:  

Vice President