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Exhibit 10.33    
    

BUSINESS LOAN AGREEMENT  

	Principal
	 	Loan Date
	 	Maturity
	 	Loan No
	 	Call/Coll
	 	Account
	 	Officer
	 	Initials

	$5,000,000.00	 	09-13-2005	 	9-13-2006	 	2002400	 	 	 	N.D	 	8282	 	 

References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item.

Any item above containing "***" has been omitted due to text length limitations. 

	 
	 
	 	 
	 

	Borrower:	International Medication Systems, Limited

1886 Santa Anita Avenue

So. El Monte, CA 91733	 	Lender:	East West Bank

475 Huntington Drive

San Marino, CA 91108
	

        THIS BUSINESS LOAN AGREEMENT dated September 13, 2005, is made and executed between International Medication Systems, Limited ("Borrower") and East West
Bank ("lender") on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial
accommodations, including those which may be described on any exhibit or schedule attached to this Agreement ("Loan"). Borrower understands and agrees that: (A) in granting, renewing, or
extending any Loan, lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender
at all times shall be subject to Lender's sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

        TERM.    This Agreement shall be effective as of September 13, 2005, and shall continue in full force and effect until
such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement. 

        CONDITIONS PRECEDENT TO EACH ADVANCE.    Lender's obligation to make the initial Advance and each subsequent Advance under this
Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents. 

        Loan Documents.    Borrower shall provide to Lender the following documents for the Loan: (1) the Note;
(2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests;
(4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance
satisfactory to Lender and Lender's counsel. 

        Borrower's Authorization.    Borrower shall have provided in form and substance satisfactory to Lender properly certified
resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations,
documents and instruments as Lender or its counsel, may require. 

        Payment of Fees and Expenses.    Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and
payable as specified in this Agreement or any Related Document. 

        Representations and Warranties.    The representations and warranties set forth in this Agreement, in the Related Documents, and
in any document or certificate delivered to Lender under this Agreement are true and correct. 

        No Event of Default.    There shall not exist at the time of any Advance a condition which would constitute an Event of Default
under this Agreement or under any Related Document. 

 

        REPRESENTATIONS AND WARRANTIES.    Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date
of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists: 

        Organization.    Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and
in good standing under and by virtue of the laws of the State of Delaware. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation
in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to
transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 11570 Sixth Street, Rancho Cucamonga, CA 91730. Unless Borrower has designated
otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender prior to any change
in the location of Borrower's state of organization or any change in Borrower's name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to Borrower and Borrower's business activities. 

        Assumed Business Names.    Borrower has filed or recorded all documents or filings required by law relating to all assumed
business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business:  None.

        Authorization.    Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly
authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of
incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to
Borrower or to Borrower's properties. 

        Financial Information.    Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's
financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement
supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements. 

        Legal Effect.    This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement
when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. 

        Properties.    Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in
writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear
of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and
Borrower has not used or filed a financing statement under any other name for at least the last five (5) years. 

        Hazardous Substances.    Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that:
(1) During the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or 

2

 

threatened
release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been
(a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on,
under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such
matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any
Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and
ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem
appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and
shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's
due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or
contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation
to indemnify, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any
of the Collateral, whether by foreclosure or otherwise. 

        Litigation and Claims.    No litigation, claim, investigation, administrative proceeding or similar action (including those for
unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than litigation,
claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing. 

        Taxes.    To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed,
have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of
business and for which adequate reserves have been provided. 

        Lien Priority.    Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any
Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and
Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral. 

        Binding Effect.    This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the
signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms. 

        AFFIRMATIVE COVENANTS.    Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower
will: 

3

 

        Notices of Claims and Litigation.    Promptly inform Lender in writing of (1) all material adverse changes in Borrower's
financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial condition of any Guarantor. 

        Financial Records.    Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender
to examine and audit Borrower's books and records at all reasonable times. 

        Financial Statements.    Furnish Lender with the following: 

        Additional Requirements.

        Annual Statements of Borrower.    As soon as available, but in no event later than one-hundred fifty
(150) days after the end of each fiscal year, Borrower's balance sheet, income and expense statements, reconciliation of net worth and statement of cash flows, with notes thereto for the year
ended, audited by a certified public accountant satisfactory to Lender. 

        Annual Statements of Corporate Guarantor.    As soon as available, but in no event later than one-hundred fifty
(150) days after the end of each fiscal year, corporate guarantor's balance sheet, income and expense statements, reconciliation of net worth and statement of cash flows, with notes thereto for
the year ended, audited by a certified public accountant satisfactory to Lender. 

        Interim Statements of Borrower.    As soon as available, but in no event later than forty-five (45) days
after the end of each fiscal quarter, Borrower's balance sheet, income and expense statements, reconciliation of net worth and statement of cash flows, with notes thereto for the period ended,
prepared by Borrower. 

        Interim Statements of Corporate Guarantor.    As soon as available, but in no event later than forty-five
(45) days after the end of each fiscal quarter, corporate guarantor's balance sheet, income and expense statements, reconciliation of net worth and statement of cash flows, with notes thereto
for the period ended, prepared by corporate guarantor. 

        Agings.    Within forty five (45) days, or sooner, after the end of each quarter, a listing and aging by invoice date of
all accounts receivable and all accounts payable in detailed format acceptable to Lender. 

        Inventory.    Within sixty (60) days, or sooner, after the end of each year, a listing of inventory in detailed format
acceptable to Lender. 

        All
financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and
correct. 

        Additional Information.    Furnish such additional information and statements, as Lender may request from time to time. 

        Financial Covenants and Ratios.    Comply with the following covenants and ratios: 

        Other Requirements.    Borrower understands and agrees that while this Agreement is in effect, Borrower will maintain a
financial condition indicated by the following ratios at all times, unless otherwise noted: 

4

 

        Effective Tangible Net Worth.    Maintain an Effective Tangible Net Worth (defined as total assets, less intangible assets,
loans to shareholders/affiliates/officers/employees, minus total liabilities, plus subordinated debt) of not less than $20,000,000.00, on a quarterly
basis. 

        Debt to Effective Tangible Net Worth.    Maintain a Debt to Effective Tangible Net Worth (defined as total debt divided by
effective tangible net worth defined as total assets, less intangible assets, loans to shareholders/affiliates/officers/employees, less total liabilities plus subordinated debt) not to exceed  1.3 to 1.

        Debt Coverage Ratio.    Maintain a Debt Coverage Ratio (defined as net profit plus tax, plus interest expense, plus depreciation
and amortization divided by current portion of long term debt, plus capital lease payment, plus interest expense, plus dividend) of not less than 1.45 to
1.

        Except
as provided above, all computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally accepted accounting
principles, applied on a consistent basis, and certified by Borrower as being true and correct. 

        Insurance.    Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require
with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time
to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days
prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of
Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's
loss payable or other endorsements as Lender may require. 

        Insurance Reports.    Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such
information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy;
(4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the
expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable,
the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower. 

        Guaranties.    Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed
by the guarantor named below, on Lender's forms, and in the amount and under the conditions set forth in those guaranties. 

	Name of Guarantor
 
	 	Amount

	Amphastar Pharmaceuticals Inc.	 	Unlimited

        Other Agreements.    Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between
Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements. 

        Taxes, Charges and Liens.    Pay and discharge when due all of its indebtedness and obligations, including without limitation
all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or 

5

 

profits,
prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. 

        Performance.    Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement,
in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement. 

        Operations.    Maintain executive and management personnel with substantially the same qualifications and experience as the
present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner. 

        Environmental Studies.    Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and
testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a
hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower. 

        Compliance with Governmental Requirements.    Comply with all laws, ordinances, and regulations, now or hereafter in effect, of
all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans
With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has
notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security
or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. 

        Inspection.    Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or
Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at
any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party,
Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at
Borrower's expense. 

        Compliance Certificates.    Unless waived in writing by Lender, provide Lender at least annually, with a certificate executed by
Borrower's chief financial officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as of the date
of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement. 

        Environmental Compliance and Reports.    Borrower shall comply in all respects with any and all Environmental Laws; not cause or
permit to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate
federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other 

6

 

communication
from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or
not there is damage to the environment and/or other natural resources. 

        Additional Assurances.    Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security
agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all
Security Interests. 

        LENDER'S EXPENDITURES.    If any action or proceeding is commenced that would materially affect Lender's interest in the
Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate,
including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for
insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be
added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or
(2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. 

        NEGATIVE COVENANTS.    Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not,
without the prior written consent of Lender: 

        Continuity of Operations.    (1) Engage in any business activities substantially different than those in which Borrower is
presently engaged, (2) cease operations, liquidate, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business. 

        Agreements.    Borrower will not enter into any agreement containing any provisions which would be violated or breached by the
performance of Borrower's obligations under this Agreement or in connection herewith. 

        CESSATION OF ADVANCES.    If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under
any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any
of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in
bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in
the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with
Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default shall have occurred. 

        RIGHT OF SETOFF.    To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with
Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all
sums owing on the indebtedness against any and all such accounts, and, at 

7

 

Lender's
option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. 

        DEFAULT.    Each of the following shall constitute an Event of Default under this Agreement: 

        Payment Default.    Borrower fails to make any payment when due under the Loan. 

        Other Defaults.    Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in
this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 

        False Statements.    Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf
under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 

        Insolvency.    The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the
appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower. 

        Defective Collateralization.    This Agreement or any of the Related Documents ceases to be in full force and effect (including
failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. 

        Creditor or Forfeiture Proceedings.    Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of
Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event
of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower
gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in
its sole discretion, as being an adequate reserve or bond for the dispute. 

        Events Affecting Guarantor.    Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or
any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall
not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. 

        Change in Ownership.    Any change in ownership of fifty percent (50%) or more of the common stock of Borrower. 

        Adverse Change.    A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of
payment or performance of the Loan is impaired. 

        Right to Cure.    If any default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may
be, has not been given a notice of a similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be, after receiving written notice from
Lender demanding cure of such default: (1) cure the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiate steps
which Lender deems in Lender's sole discretion to be sufficient to cure the default and 

8

 

thereafter
continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. 

        EFFECT OF AN EVENT OF DEFAULT.    If any Event of Default shall occur, except where otherwise provided in this Agreement or the
Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further
Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of
Default of the type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the
Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative
and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies. 

        CROSS ACCELERATION.    In addition to the due dates and maturity date set forth in the Note, all principal and accrued interest
and other amounts owed under this Note shall become due in full at such earlier time, if any, the obligations of Borrower to Lender under that Promissory Note dated September 13, 2005, in the
face amount of $5,000,000.00, (as such notes may be amended or extended from time to time) are paid in full. 

        DEPOSIT RELATIONSHIP.    While this Agreement is in effect, Borrower shall maintain its main operating account with Lender. 

        OUT OF DEBT REQUIREMENT.    Borrower agrees to be out of debt on the line of credit for thirty (30) consecutive days
during a twelve (12) month period. 

        PROFITABILITY COVENANT.    Borrower hereby covenants and agrees that while this Agreement is in effect, Borrower shall maintain
a profitable operation, on an annual basis. 

        INITIAL HERE DWN.  

         MISCELLANEOUS PROVISIONS.    The following miscellaneous provisions are a part of this Agreement: 

        Amendments.    This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the
parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be
charged or bound by the alteration or amendment. 

        Attorneys' Fees; Expenses.    Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lender's
attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay
the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all
court costs and such additional fees as may be directed by the court. 

        Caption Headings.    Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement. 

9

 

        Consent to Loan Participation.    Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or
more participation interest in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or
potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have
with respect to such matters. Borrower additionally waives any and all notice of sale or participation interest, as well as all notices of any repurchase of such participation interest. Borrower also
agrees that the purchasers of any such participation interest will be considered as the absolute owners of such interest in the Loan and will have all the rights granted under the participation
agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any
purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or insolvency of
any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that
Borrower may have against Lender. 

        Governing Law.    This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of California without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of California.  

        No Waiver by Lender.    Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this
Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender,
nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations as to
any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. 

        Notices.    Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually
delivered, when actually received by telefacsimile (unless otherwise required by
law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to
the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the
purpose of the notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided or required
by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers. 

        Severability.    If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or
unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by
law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 

10

 

        Successors and Assigns.    All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related
Documents shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights
under this Agreement or any interest therein, without the prior written consent of Lender. 

        Survival of Representations and Warranties.    Borrower understands and agrees that in making the Loan, Lender is relying on all
representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents.
Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the making of the Loan and delivery to Lender of the
Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as
Borrower's Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur. 

        Time is of the Essence.    Time is of the essence in the performance of this Agreement. 

        Waive Jury.    All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party
against any other party.

        DEFINITIONS:    The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless
specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,
and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform
Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on
the date of this Agreement: 

        Advance.    The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a
line of credit or multiple advance basis under the terms and conditions of this Agreement. 

        Agreement.    The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or
modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time. 

        Borrower.    The word "Borrower" means International Medication Systems, Limited and includes all co-signers and
co-makers signing the Note. 

        Collateral.    The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust,
assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. 

        Environmental Laws.    The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and
ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 

11

 

("SARA"),
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through
7.7 of Division 20 of the California Health and Safety Code, Section 25100, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. 

        Event of Default.    The words "Event of Default" mean any of the events of default set forth in this Agreement in the default
section of this Agreement. 

        GAAP.    The word "GAAP" means generally accepted accounting principles. 

        Grantor.    The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for
the Loan, including without limitation all Borrowers granting such a Security Interest. 

        Guarantor.    The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan. 

        Guaranty.    The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or
part of the Note. 

        Hazardous Substances.    The words "Hazardous Substances" mean materials that, because of their quantity, concentration or
physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated,
manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances,
materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos. 

        Indebtedness.    The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all
principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents. 

        Lender.    The word "Lender" means East West Bank, its successors and assigns. 

        Loan.    The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter
existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to
time. 

        Note.    The word "Note" means the Note executed by International Medication Systems, Limited in the principal amount of
$5,000,000.00 dated September 13, 2005, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. 

        Permitted Liens.    The words "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by
Borrower to Lender; (2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen, or
carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests
upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled "Indebtedness and Liens"; (5) liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and
(6) those liens and security interests which in the aggregate constitute 

12

 

an
immaterial and insignificant monetary amount with respect to the net value of Borrower's assets. 

        Related Documents.    The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Loan. 

        Security Agreement.    The words "Security Agreement" mean and include without limitation any agreements, promises, covenants,
arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. 

        Security Interest.    The words "Security Interest" mean, without limitation, any and all types of collateral security, present
and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever
whether created by law, contract, or otherwise. 

        BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED
SEPTEMBER 13, 2005.

BORROWER  

INTERNATIONAL MEDICATION SYSTEMS, LIMITED

	By:	/s/  JACK ZHANG      
Jack Zhang, President/C.E.O. of International

Medication Systems, Limited	 	By:	/s/  DAVID W. NASSIF      
David Nassif, C.F.O of International Medication

Systems, Limited
	
LENDER:	
 	

 	

 
	
EAST WEST BANK	
 	

 	

 
	
By:	

/s/  REBECCA LEE      
Authorized Signer	
 	

 	

 

13

PROMISSORY NOTE  

	Principal
	 	Loan Date
	 	Maturity
	 	Loan No
	 	Call/Coll
	 	Account
	 	Officer
	 	Initials

	$5,000,000.00	 	09-13-2005	 	9-13-2006	 	2002400	 	N.D	 	8282	 	 	 	 

        References in the shaded area are for Lender's use only and do not limit the applicability of this document
to any particular loan or item.

Any item above containing "* * *" has been omitted due to text length limitations. 

	 
	 
	 	 
	 

	Borrower:	International Medication Systems, Limited

1886 Santa Anita Avenue

So. El Monte, CA 91733	 	Lender:	East West Bank

475 Huntington Drive

San Marino, CA 91108
	

	 
	 	 
	 	 

	Principal Amount: $5,000,000.00	 	Initial Rate: 6.500%	 	Date of Note: September 13, 2005

        PROMISE TO PAY. International Medication Systems, Limited ("Borrower") promise to pay to East West Bank ("Lender"), or
order, in lawful money of the United States of America, the principal amount of Five Million & 00/100 Dollars ($5,000,000.00) or so much as may be outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.

        PAYMENT.    Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on
September 13, 2006. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning October 13, 2005, with all subsequent
Interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to
principal; then to any unpaid collection costs; and then to any late charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual
Interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of
days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. 

        VARIABLE INTEREST RATE.    The interest rate on this Note is subject to change from time to time based on changes in an
independent index which is the daily Wall Street Journal Prime Rate, as quoted in the "Money Rates" column of The Wall Street Journal (Western Edition), rounded to two decimal places, all as
determined by Lender. (the Index"). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower
understands that Lender may make loans based on other rates as well. The Index currently is 6.500%. The interest rate to be applied to the unpaid principal balance of this Note
will be at a rate equal to the Index, resulting in an initial rate of 6.500%. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law. 

        PREPAYMENT; MINIMUM INTEREST CHARGE.    In any event, even upon full prepayment of this Note, Borrower understands that Lender
is entitled to a minimum interest charge of $100.00. Other than Borrower's obligation to pay any minimum interest charge, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make
payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar
language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered
with other conditions or limitations or as full satisfaction of a disputed amount must be 

 

mailed
or delivered to: East West Bank, Loan Services Department, 475 Huntington Drive San Marino, CA 91108. 

        LATE CHARGE.    If a payment is 11 days or more late, Borrower will be charged 6.000% of the regularly scheduled payment. 

        INTEREST AFTER DEFAULT.    Upon default, the variable interest rate on this Note shall immediately increase to
5.000 percentage points over the Index, if permitted under applicable law. 

        DEFAULT.    Each of the following shall constitute an event of default ("Event of Default") under this Note: 

        Payment Default. Borrower fails to make any payment when due under this Note. 

        Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 

        False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this
Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 

        Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws
by or against Borrower. 

        Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond
for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. 

        Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may,
but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of
Default. 

        Change In Ownership. Any change in ownership of fifty percent (50%) or more of the common stock of Borrower. 

        Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired. 

        Insecurity. Lender in good faith believes itself insecure. 

        Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender 

2

 

demanding
cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical. 

        LENDER'S RIGHTS.    Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid
interest immediately due, and then Borrower will pay that amount. 

        ATTORNEYS' FEES; EXPENSES.    Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower
will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorney's fees and Lender's legal expense, whether or not there is a lawsuit, including attorney's
fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition to all other sums
provided by law. 

        JURY WAIVER.    Lender and Borrower hereby waive the right to any jury trial in any action, proceeding,
or counterclaim brought by either Lender or Borrower against the other.

        GOVERNING LAW.    This Note will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of California without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of
California.

        DISHONORED ITEM FEE.    Borrower will pay a fee to Lender of $18.00 if Borrower makes a payment on Borrower's loan and the check
or preauthorized charge with which the Borrower pays is later dishonored. 

        RIGHT OF SETOFF.    To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with
Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all
sums owing on the indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights
provided in this paragraph. 

        LINE OF CREDIT.    This Note evidences a revolving line of credit. Advances under this Note may be requested only in writing by
Borrower or as provided in this paragraph. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. Borrower agrees to be
liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal
balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any
agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to
limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other than those
authorized by Lender; or (E) Lender in good faith believes itself insecure. 

        CERTIFICATION OF ACCURACY.    Borrower certifies under penalty of perjury that all financial documents provided to Lender, which
may include income statements, balance sheets, accounts payable and receivable listings, inventory listings, rents rolls, and tax returns, are the most recent such documents prepared by Borrower, that
they give a complete and accurate statement of the financial 

3

 

condition
of Borrower, as of the dates of such statements, and that no material change has occurred since such time, except as disclosed to Lender in writing. Borrower agrees to notify Lender
immediately of the extent and character of any material adverse change in the Borrower's financial condition. The financial documents shall constitute continuing representations of Borrower and shall
be construed by Lender to be continuing statements of the financial condition of Borrower and to be new and original statement of all assets and liabilities of Borrower with respect to each advance
under this Note and every other transaction in which Borrower becomes obligated to Lender until Borrower advises Lender to the contrary. The financial documents are being given to induce Lender to
extend credit and Lender is relying upon such documents. Lender may verify with third parties any information contained in financial documents delivered to Lender, obtain information from others, and
ask and answer questions and requests seeking credit experience about the undersigned. 

        SUCCESSOR INTERESTS.    The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal
representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. 

        GENERAL PROVISIONS.    Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall
be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that
Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. 

        PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE
TERMS OF THIS NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.  

BORROWER:  

INTERNATIONAL MEDICATION SYSTEMS, LIMITED  

	

By:	

/s/  JACK ZHANG      
 Jack Zhang, President/C.E.O. of International

Medication Systems, Limited	
 	

By:	

/s/  DAVID W. NASSIF      
 David Nassif, C.F.O of International

Medication Systems, Limited

4

COMMERCIAL GUARANTY  

	Principal
	 	Loan Date
	 	Maturity
	 	Loan No
	 	Call/Coll
	 	Account
	 	Officer
	 	Initials

	 	 	 	 	 	 	 	 	 	 	 	 	8282	 	 

References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item.

Any item above containing "***" has been omitted due to text length limitations. 

	 
	 
	 	 
	 

	Borrower:	International Medication Systems, Limited

1886 Santa Anita Avenue

S. El Monte, CA 91733	 	Lender:	East West Bank

475 Huntington Drive

San Marino, CA 91108
	

Guarantor:	

Amphastar Pharmaceuticals, Inc.

11570 Sixth Street

Rancho Cucamonga, CA 91730	
 	

 	

 
	

        AMOUNT OF GUARANTY.    The amount of this Guaranty is Unlimited.

        CONTINUING UNLIMITED GUARANTY.    For good and valuable consideration, Amphastar
Pharmaceuticals, Inc. ("Guarantor") absolutely and unconditionally guarantees and promises to pay to East West Bank ("Lender") or its order, in legal tender of the United States of America, the
Indebtedness (as that term is defined below) of International Medication Systems, Limited ("Borrower") to Lender on the terms and conditions set forth in this Guaranty. Under this Guaranty, the
liability of Guarantor is unlimited and the obligations of Guarantor are continuing.  

         INDEBTEDNESS GUARANTEED.    The Indebtedness guaranteed by this Guaranty includes any and all of Borrower's indebtedness to Lender and is
used in the
most comprehensive sense and means and includes any and all of Borrower's liabilities, obligations and debts to Lender, now existing or hereinafter incurred or created, including, without limitation,
all loans, advances, interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease obligations, other obligations, and liabilities of Borrower, or any of them, and any present or
future judgments against Borrower, or any of them; and whether any such Indebtedness is voluntarily or involuntarily incurred, due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily, or as guarantor or surety; whether recovery on the Indebtedness may be or
may become barred or unenforceable against Borrower for any reason whatsoever; and whether the Indebtedness arises from transactions which may be voidable on account of infancy, insanity, ultra vires,
or otherwise. 

        DURATION OF GUARANTY.    This Guaranty will take effect when received by Lender without the necessity of any acceptance by
Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do
so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written
revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term
"new Indebtedness" does not include Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined
or due. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are
contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to Indebtedness created both before and after
Guarantor's death or incapacity, regardless of Lender's actual notice of 

 

Guarantor's
death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated
it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation
Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. Guarantor's obligations under this Guaranty shall be in addition to any
of Guarantor's obligations, or any of them, under any other guaranties of Borrower's Indebtedness or any other person heretofore or hereafter given to Lender unless such other guaranties are modified
or revoked in writing; and this Guarantor shall not, unless provided in this Guaranty, affect, invalidate, or supersede any such other guaranty. It is anticipated that
fluctuations may occur in the aggregate amount of Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of Indebtedness, even to zero
dollars ($0.00), prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs, successors
and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though the Indebtedness guaranteed may from time to time be zero dollars ($0.00).

        GUARANTOR'S AUTHORIZATION TO LENDER.    Guarantor authorizes Lender, either before or after any revocation hereof,  without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (A) prior to revocation as set forth
above, to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter,
compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases
of the rate of interest on the Indebtedness;
extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive,
subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with anyone
or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be
made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to
assign or transfer this Guaranty in whole or in part. 

        GUARANTOR'S REPRESENTATIONS AND WARRANTIES.    Guarantor represents and warrants to Lender that (A) no representations or
agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request
of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any
agreement or other instrument binding upon Guarantor and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not,
without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein;
(F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all
future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial
information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event
has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, 

2

 

administrative
proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the
creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor
agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent
a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. 

        GUARANTOR'S WAIVERS.    Except as prohibited by applicable law, Guarantor waives any right to require Lender to (A) make
any presentment, protest, demand, or notice of any kind, including notice of change of any terms of repayment of the Indebtedness, default by Borrower or any other guarantor or surety, any action or
nonaction taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the creation of new or additional Indebtedness; (B) proceed against any person, including Borrower, before
proceeding against Guarantor; (C) proceed against any collateral for the Indebtedness, including Borrower's collateral, before proceeding against Guarantor; (D) apply any payments or
proceeds received against the Indebtedness in any order; (E) give notice of the terms, time, and place of
any sale of the collateral pursuant to the Uniform Commercial Code or any other law governing such sale; (F) disclose any information about the Indebtedness, the Borrower, the collateral, or
any other guarantor or surety, or about any action or nonaction of Lender; or (G) pursue any remedy or course of action in Lender's power whatsoever. 

        Guarantor
also waives any and all rights or defenses arising by reason of (H) any disability or other defense of Borrower, any other guarantor or surety or any other person;
(I) the cessation from any cause whatsoever, other than payment in full, of the Indebtedness; (J) the application of proceeds of the Indebtedness by Borrower for purposes other than the
purposes understood and intended by Guarantor and Lender; (K) any act of omission or commission by Lender which directly or indirectly results in or contributes to the discharge of Borrower or
any other guarantor or surety, or the Indebtedness, or the loss or release of any collateral by operation of law or otherwise; (L) any statute of limitations in any action under this Guaranty
or on the Indebtedness; or (M) any modification or change in terms of the Indebtedness, whatsoever, including without limitation, the renewal, extension, acceleration, or other change in the
time payment of the Indebtedness is due and any change in the interest rate, and including any such modification or change in terms after revocation of this Guaranty on Indebtedness incurred prior to
such revocation. 

        Guarantor
waives all rights and any defenses arising out of an election of remedies by Lender even though that the election of remedies, such as a non-judicial foreclosure
with respect to security for a guaranteed obligation, has destroyed Guarantor's rights of subrogation and reimbursement against Borrower by operation of Section 580d of the California Code of
Civil Procedure or otherwise. 

        Guarantor
waives all rights and defenses that Guarantor may have because Borrower's obligation is secured by real property. This means among other things: (1) Lender may collect
from Guarantor without first foreclosing on any real or personal property collateral pledged by Borrower. (2) If Lender forecloses on any real property collateral pledged by Borrower:
(a) the amount of Borrower's obligation may be reduced only by the price for which the collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price.
(b) Lender may collect from Guarantor even if Lender, by forclosing on the real property collateral, has destroyed any right Guarantor may have to collect from Borrower. This is an
unconditional and irrevocable waiver of any rights and defenses Guarantor may have because Borrower's obligation is secured by real property. These rights and defenses include, but are not limited to,
any rights and defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure. 

3

 

        Guarantor
understands and agrees that the foregoing waivers are unconditional and irrevocable waivers of substantive rights and defenses to which Guarantor might otherwise be entitled
under state and federal law. Guarantor acknowledges that Guarantor has provided these waivers of rights and defenses with the intention that they be fully relied upon by Lender. Guarantor further
understands and agrees that this Guaranty is a separate and independent contract between Guarantor and Lender, given for
full and ample consideration, and is enforceable on its own terms. Until all Indebtedness is paid in full, Guarantor waives any right to enforce any remedy Guarantor may have against the Borrower or
any other guarantor, surety, or other person, and further, Guarantor waives any right to participate in any collateral for the Indebtedness now or hereafter held by Lender. 

        GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS.    Guarantor warrants and agrees that each of the waivers set forth above is
made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is
determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. 

        SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR.    Guarantor agrees that the Indebtedness of Borrower to Lender, whether now
existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly
subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent
liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of
the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which
it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to
Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be
marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file
financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this
Guaranty. 

        MISCELLANEOUS PROVISIONS.    The following miscellaneous provisions are a part of this Guaranty: 

        Amendments.    This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the
parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment. 

        Attorneys' Fees; Expenses.    Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's
attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay
the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay
all court costs and such additional fees as may be directed by the court. 

4

 

        Caption Headings.    Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or
define the provisions of this Guaranty. 

        Governing Law.    This Guaranty will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of California without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender in the State of California.

        Integration.    Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has
had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of
this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (including Lender's attorneys' fees) suffered or incurred by Lender as a result of any
breach by Guarantor of the warranties, representations and agreements of this paragraph. 

        Interpretation.    In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the
singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is
executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs,
successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of
this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or
unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers
of Borrower or Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty. 

        Notices.    Any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by
Guarantor, shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation
notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARANTY." Any party may change its address
for notices under this Guaranty by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees
to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is
deemed to be notice given to all Guarantors. 

        No Waiver by Lender.    Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this
Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor
any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of
Lender is required under this Guaranty, the 

5

 

granting
of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender. 

        Successors and Assigns.    Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty
shall be binding upon and inure to the benefit of the parties, their successors and assigns. 

        Waive Jury.    Lender and Guarantor hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or
Borrower against the other.

        CERTIFICATION OF ACCURACY.    Guarantor certifies under penalty of perjury that all financial documents provided to Lender,
which may include income statements, balance sheets, payable and receivable listings, inventory listings, rents rolls, and tax returns, are the most recent such documents prepared by Guarantor, that
they give a complete and accurate statement of the financial condition of Guarantor, as of the dates of such statements, and that no material change has occurred since such time, except as disclosed
to Lender in writing. Guarantor agrees to notify Lender immediately of the extent and character of any material adverse change in the Guarantor's financial condition. The financial documents shall
constitute continuing representations of Guarantor and shall be construed by Lender to be continuing statements of the financial condition of Guarantor and to be new and original
statement of all assets and liabilities of Guarantor with respect to each advance under the Indebtedness and every other transaction in which Guarantor or Borrower becomes obligated to Lender until
Guarantor advises Lender, to the contrary. The financial documents are being given to induce Lender to extend credit and Lender is relying upon such documents. Lender may verify with third parties any
information contained in financial documents delivered to Lender, obtain information from others, and ask and answer questions and requests seeking credit experience about the undersigned. 

        DEFINITIONS.    The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless
specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,
and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial
Code: 

        Borrower.    The word "Borrower" means International Medication Systems, Limited and includes all co-signers and
co-makers signing the Note. 

        Guarantor.    The word "Guarantor" means each and every person or entity signing this Guaranty, including without limitation
Amphastar Pharmaceuticals, Inc. 

        Guaranty.    The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or
part of the Note. 

        Indebtedness.    The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described in this
Guaranty. 

        Lender.    The word "Lender" means East West Bank, its successors and assigns. 

        Note.    The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements
evidencing Borrower's loan obligations in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promissory notes or
credit agreements. 

        Related Documents.    The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, 

6

 

agreements
and documents, whether now or hereafter existing, executed in connection with the Indebtedness. 

        EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS
GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF
GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED SEPTEMBER 13, 2005.

	GUARANTOR:	 	 	 	 
	

AMPHASTAR PHARMACEUTICALS INC.	
 	

 	
 	

 
	

By:	
 	
/s/  JACK ZHANG      
 Jack Zhang, President/C.E.O. of Amphastar
Pharmaceuticals Inc.	
 	

By:	
 	
/s/  DAVID W. NASSIF      
 David Nassif, C.F.O of Amphastar Pharmaceuticals Inc.

7

COMMERCIAL SECURITY AGREEMENT  

	Principal
	 	Loan Date
	 	Maturity
	 	Loan No
	 	Call/Coll
	 	Account
	 	Officer
	 	Initials

	$5,000,000.00	 	09-13-2005	 	9-13-2006	 	2002400	 	 	 	N.D	 	8282	 	 

References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing "***" has been omitted due to text length limitations. 

	Grantor:	 	International Medication Systems, Limited

1886 Santa Anita Avenue

S. El Monte, CA 91733	 	Lender:	 	East West Bank

475 Huntington Drive

San Marino, CA 91108
	

        THIS COMMERCIAL SECURITY AGREEMENT dated September 13, 2005 is made and executed between International Medication Systems, Limited ("Grantor") and East West
Bank ("Lender").

        GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law.

        COLLATERAL DESCRIPTION.    The word "Collateral" as used in this Agreement means the following described property, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the payment of the Indebtedness and
performance of all other obligations under the Note and this Agreement: 

        All Inventory, Chattel Paper, Accounts, Equipment, Deposit Accounts and General Intangibles

        In
addition, the word "Collateral" as used in this Agreement means the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever
located: 

        (A)  All
accessions, attachments, accessories, tools, parts, supplies, replacements of and additions to any of the collateral described herein, whether added now or later. 

        (B)  All
products and produce of any of the property described in this Collateral section. 

        (C)  All
accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, consignment or other disposition of any of
the property described in this Collateral section. 

        (D)  All
proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this Collateral section, and sums
due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to judgment, settlement or other process. 

        (E)  All
records and data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph, microfilm, microfiche, or
electronic media, together with all of Grantor's right, title, and interest in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic
media. 

        Despite
any other provision of this Agreement, Lender is not granted, and will not have, a nonpurchase money security interest in household goods, to the extent such a security interest
would be prohibited by applicable law. In addition, if because of the type of Property, Lender is required to give a notice of the right to cancel under Truth in Lending for the Indebtedness, then
Lender will not have a security interest in such Collateral unless and until such a notice is given. 

        CROSS-COLLATERALIZATION.    In addition to the Note, this Agreement secures all obligations, debts and liabilities, plus interest
thereon, of Grantor to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter arising, whether related or
unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated whether
Grantor may be liable individually or jointly with others,
whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statue of limitations, and whether the
obligation to repay such amounts may be or hereafter may become otherwise unenforceable. 

        RIGHT OF SETOFF.    To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with
Lender (whether checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Grantor authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided
in this paragraph. 

        GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.    With respect to the Collateral, Grantor represents and
promises to Lender that: 

        Perfection of Security Interest.    Grantor agrees to take whatever actions are requested by Lender to perfect and continue
Lender's security interest in the Collateral. Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Grantor will note
Lender's interest upon any and all chattel paper and instruments if not deliver to Lender for possession by Lender. This is continuing Security Agreement and will continue in
effect even though all or ay part of the Indebtedness is paid in full and even though for a period of time Grantor may not be indebted to Lender.

        Notice to Lender.    Grantor will promptly notify Lender in writing at Lender's address shown above (or such other addresses as
Lender may designate from time to time) prior to any (1) change in Grantor's name; (2) change 

 

in Grantor's assumed business name(s); (3) change in the management of the Corporation Grantor; (4) change in the authorized signer(s); (5) change in Grantor's principal office
address; (6) change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; or (B)change in any other aspect of Grantor that directly
or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state of organization will take effect until after Lender has received notice. 

        No Violation.    The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which
Grantor is a party, and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement. 

        Enforceability of Collateral.    To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as
defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and regulations concerning form, content and
manner of preparation and execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the
Collateral. At the time any account becomes subject to a security interest in favor of Lender, the account shall be a good and valid account representing an undisputed, bona fide indebtedness incurred
by the account debtor, for merchandise held subject to delivery instructions or previously shipped or delivered pursuant to a contract of sale, or for services previously performed by Grantor with or
for the account debtor. So long as this Agreement remains in effect, Grantor shall not, without Lender's prior written consent, compromise, settle, adjust, or extend payment under or with regard to
any such Accounts. There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the
Collateral except those disclosed to Lender in writing. 

        Location of the Collateral.    Except in the ordinary course of Grantor's business, Grantor agrees to keep the Collateral (or to
the extent the Collateral consists of intangible property such as accounts or general intangibles, the records concerning the Collateral) at Grantor's address shown above or at such other locations as
are acceptable to Lender. Upon Lender's request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations,
including without limitation the following: (1) all real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage facilities
Grantor owns, rents, leases, or uses; and (4) all other properties where Collateral is or may be located. 

        Removal of the Collateral.    Except in the ordinary course of Grantor's business, including the sales of inventory, Grantor shall
not remove the Collateral from its existing location without Lender's prior written consent. To the extent that the Collateral consists of vehicles, or other titled property, Grantor shall not take or
permit any action which would require application for certificates of title for the vehicles outside the State of California, without Lender's prior written consent. Grantor shall, whenever requested,
advise Lender of the exact location of the Collateral. 

        Transactions Involving Collateral.    Except for inventory sold or accounts collected in the ordinary course of Grantor's
business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. While Grantor is not in default under this
Agreement, Grantor may sell inventory, but only in the ordinary course of its business and only to buyers who qualify as a buyer in the ordinary course of business. A sale in the ordinary course of
Grantor's business does not include a transfer in partial or total satisfaction of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be
subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in this Agreement, without the prior written consent of Lender. This includes security
interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral (for whatever reason) shall be
held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt,
Grantor shall immediately deliver any such proceeds to Lender. 

        Title.    Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear
of all liens and encumbrances except for the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security
interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lender's rights in the Collateral against the claims and demands of all other persons. 

        Repairs and Maintenance.    Grantor agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good
order, repair and condition at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on, or services rendered or material furnished in
connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. 

        Inspection of Collateral.    Lender and Lender's designated representatives and agents shall have the right at all reasonable
times to examine and inspect the Collateral wherever located. 

        Taxes, Assessments and Liens.    Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or
operation, upon this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest
any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole
opinion. If the Collateral is subjected to a lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other security
satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys' fees or other charges that could accrue as a result of foreclosure or sale of
the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional
obligee under any surety bond 

2

 

furnished
in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, assessments, and governmental and other charges have been paid in full and in a timely
manner. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's
interest in the Collateral is not jeopardized. 

        Compliance with Governmental Requirements.    Grantor shall comply promptly with all laws, ordinances, rules and regulations of
all governmental authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including all laws or regulations relating to the undue
erosion of highly-erodible land or relating to the conversion of wetlands for the production of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or
regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Lender's interest in the Collateral, in Lender's opinion, is not jeopardized. 

        Hazardous Substances.    Grantor represents and warrants that the Collateral never has been, and never will be so long as this
Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release
of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby
(1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws, and
(2) agrees to indemnify and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement. This obligation to indemnify shall survive
the payment of the Indebtedness and the satisfaction of this Agreement. 

        Maintenance of Casualty Insurance.    Grantor shall procure and maintain all risks insurance, including without limitation fire,
theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and basis reasonably acceptable to Lender and issued
by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to
Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days' prior written notice to Lender and not including any disclaimer of the
insurer's liability for failure to give such a notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act,
omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender with such loss
payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may (but shall not be obligated to)
obtain such insurance as Lender deems appropriate, including if Lender so chooses "single interest insurance," which will cover only Lender's interest in the Collateral. 

        Application of Insurance Proceeds.    Grantor shall promptly notify Lender of any loss or damage to the Collateral. Lender may
make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. All proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be held by
Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay or reimburse Grantor
from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to
pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to
the repair or restoration of the Collateral shall be used to prepay the Indebtedness. 

        Insurance Reserves.    Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums, which
reserves shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before the premium due date, amounts at least
equal to the insurance premiums to be paid. If fifteen (15) days before payment is due, the reserve funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve
funds shall be held by Lender as a general deposit and shall constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums required to be paid by
Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor, and Lender is not the agent of Grantor for payment of the insurance premiums required to be paid by Grantor.
The responsibility for the payment of premiums shall remain Grantor's sole responsibility. 

        Insurance Reports.    Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance
showing such information as Lender may reasonably request including the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the
property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining that value; and (6) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost
of the Collateral. 

        Financing Statements.    Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this
Agreement to perfect Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect, and continue Lender's security
interest in the Property. Grantor will pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and
costs. Grantor irrevocably appoints Lender to execute documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor
changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes, Grantor will promptly notify the Lender of such change. 

        GRANTOR'S RIGHT TO POSSESSION.    Until default and except as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the Collateral and may 

3

 

use
it in any lawful manner not inconsistent with this Agreement or the Related Documents, provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where
possession of the Collateral by Lender is required by law to perfect Lender's security interest in such Collateral. Until otherwise notified by Lender, Grantor may collect any of the Collateral
consisting of accounts. At any time and even though no Event of Default exists, Lender may exercise its rights to collect the accounts and to notify account debtors to make payments directly to Lender
for application to the Indebtedness. If Lender at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall request or as Lender, in Lender's sole discretion, shall deem appropriate under the
circumstances, but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to
preserve any rights in the Collateral against prior parties, nor to protect, preserve or maintain any security interest given to secure the Indebtedness. 

        LENDER'S EXPENDITURES.    If any action or proceeding is commenced that would materially affect Lender's interest in the
Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor
is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including
but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring,
maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid
by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the
balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the
remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. 

        DEFAULT.    Each of the following shall constitute an Event of Default under this Agreement: 

        Payment Default.    Grantor fails to make any payment when due under the Indebtedness. 

        Other Defaults.    Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. 

        False Statements.    Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under
this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 

        Defective Collateralization.    This Agreement or any of the Related Documents ceases to be in full force and effect (including
failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. 

        Insolvency.    The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the
appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Grantor. 

        Creditor or Forfeiture Proceedings.    Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any
of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond
for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. 

        Events Affecting Guarantor.    Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or
Guarantor dies or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. 

        Adverse Change.    A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment
or performance of the Indebtedness is impaired. 

        Cure Provisions.    If any default, other than a default in payment is curable and if Grantor has not been given a notice of a
breach of the same provision of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default:
(1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. 

        RIGHTS AND REMEDIES ON DEFAULT.    If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have
all the rights of a secured party under the California Uniform Commercial Code. In addition and without limitation, Lender may exercise any one or more of the following rights and remedies: 

        Accelerate Indebtedness.    Lender may declare the entire Indebtedness, including any prepayment penalty which Grantor would be
required to pay, immediately due and payable, without notice of any kind to Grantor. 

4

 

        Assemble Collateral.    Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all
certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender.
Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the
time of repossession, Grantor agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession. 

        Sell the Collateral.    Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds
thereof in Lender's own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Lender will give Grantor, and other persons as required by law, reasonable notice of the time and place of any public sale, or the time after which any private
sale or any other disposition of the Collateral is to be made. However, no notice need be provided to any person who, after Event of Default occurs, enters into and authenticates an agreement waiving
that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All
expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of
the Indebtedness secured by this Agreement and shall be payable on demand, with interest at the Note rate from date of expenditure until repaid. 

        Appoint Receiver.    Lender shall have the right to have a receiver appointed to take possession of all or any part of the
Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the Collateral and apply the proceeds, over
and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Collateral exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. 

        Collect Revenues, Apply Accounts.    Lender, either itself or through a receiver, may collect the payments, rents, income, and
revenues from the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income, and
revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists
of accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for,
foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these purposes, Lender may, on behalf of and in the name of Grantor,
receive, open and dispose of mail addressed to Grantor; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments
and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender. 

        Obtain Deficiency.    If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a deficiency
even if the transaction described in this subsection is a sale of accounts or chattel paper. 

        Other Rights and Remedies.    Lender shall have all the rights and remedies of a secured creditor under the provisions of the
Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law, in equity, or
otherwise. 

        Election of Remedies.    Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by
this Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's
right to declare a default and exercise its remedies. 

        MISCELLANEOUS PROVISIONS.    The following miscellaneous provisions are a part of this Agreement: 

        Amendments.    This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the
parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be
charged or bound by the alteration or amendment. 

        Attorneys' Fees; Expenses.    Grantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys'
fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs and
expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Grantor also shall pay all court costs
and such additional fees as may be directed by the court. 

        Caption Headings.    Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement. 

5

 

        Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of
California without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of California.

        Preference Payments.    Any monies Lender pays because of an asserted preference claim in Grantor's bankruptcy will become a part
of the Indebtedness and, at Lender's option, shall be payable by Grantor as provided in this Agreement. 

        No Waiver by Lender.    Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this
Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender,
nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of
Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in
all cases such consent may be granted or withheld in the sole discretion of Lender. 

        Notices.    Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually
delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States
mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this
Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed
at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to
all Grantors. 

        Power of Attorney.    Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the
purpose of executing any documents necessary to perfect, amend, or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties. Lender may
at any time, and without further authorization from Grantor, file a carbon, photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement.
Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral. 

        Waiver of Co-Obligor's Rights.    If more than one person is obligated for the Indebtedness, Grantor irrevocably
waives, disclaims and relinquishes all claims against such other person which Grantor has or would otherwise have by virtue of payment of the Indebtedness or any part thereof, specifically including
but not limited to all rights of indemnity, contribution or exoneration. 

        Severability.    If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or
unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by
law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 

        Successors and Assigns.    Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement
shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Grantor, Lender, without notice to
Grantor, may deal with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or
liability under the Indebtedness. 

        Survival of Representations and Warranties.    All representations, warranties, and agreements made by Grantor in this Agreement
shall survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. 

        Time is of the Essence.    Time is of the essence in the performance of this Agreement. 

        Waive Jury.    All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party
against any other party.

        DEFINITIONS.    The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless
specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,
and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform
Commercial Code: 

        Agreement.    The word "Agreement" means this Commercial Security Agreement, as this Commercial Security Agreement may be amended
or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time. 

        Borrower.    The word "Borrower" means International Medication Systems, Limited and includes all co-signers and
co-makers signing the Note. 

        Collateral.    The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described in
the Collateral Description section of this Agreement. 

6

 

        Default.    The word "Default" means the Default set forth in this Agreement in the section titled "Default". 

        Environmental Laws.    The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and
ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety
Code, Section 25100, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. 

        Event of Default.    The words "Event of Default" mean any of the events of default set forth in this Agreement in the default
section of this Agreement. 

        Grantor.    The word "Grantor" means International Medication Systems, Limited. 

        Guarantor.    The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. 

        Guaranty.    The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or
part of the Note. 

        Hazardous Substances.    The words "Hazardous Substances" mean materials that, because of their quantity, concentration or
physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated,
manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances,
materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos. 

        Indebtedness.    The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all
principal and interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any of the Related Documents. Specifically, without
limitation, Indebtedness includes all amounts that may be indirectly secured by the Cross-Collateralization provision of this Agreement. 

        Lender.    The word "Lender" means East West Bank, its successors and assigns. 

        Note.    The word "Note" means the Note executed by International Medication Systems, Limited in the principal amount of
$5,000,000.00 dated September 13, 2005, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. 

        Property.    The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the
"Collateral Description" section of this Agreement. 

        Related Documents.    The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in
connection with the Indebtedness. 

        GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED SEPTEMBER 13,
2005.

	GRANTOR:
	
INTERNATIONAL MEDICATION SYSTEMS, LIMITED
	
By:	
 	

/s/  JACK ZHANG      
Jack Zhang, President/C.E.O. of International Medication Systems, Limited	
 	
By:	
 	

/s/  DAVID W. NASSIF      
David Nassif, C.F.O of International Medication Systems, Limited

7

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Exhibit 10.1    
    

SHAREHOLDERS
AGREEMENT 

by
and between 

SUPERIOR
ESSEX INC. 

SE
HOLDING, C.V. 

NEXANS

NEXANS
PARTICIPATIONS 

and

ALTENSYS
SAS 

      

Dated
as of October 21, 2005 

   TABLE OF CONTENTS  

	ARTICLE 1    DEFINITIONS	 	1
	 	1.1. Certain Definitions	 	1
	ARTICLE 2    VOTING AGREEMENT	 	7
	ARTICLE 3    ADDITIONAL AGREEMENTS	 	7
	 	3.1. Additional Capital Contributions; Loans	 	7
	 	3.2. Competition; Non-Solicitation	 	8
	 	3.3. Purchase of Acquired Business	 	9
	 	3.4. Information and Access	 	10
	ARTICLE 4    TRANSFER RESTRICTIONS	 	10
	 	4.1. Transfer Restrictions	 	10
	 	4.2. Right of First Refusal	 	11
	 	4.3. Tag-along Right	 	12
	 	4.4. Drag-along Right	 	12
	 	4.5. Limitation on the Right of First Refusal, Tag-along Right and Drag-along Right	 	12
	 	4.6. Nexans Put Right	 	12
	 	4.7. Essex Call Right	 	17
	 	4.8. Change of Control	 	17
	ARTICLE 5    TERMINATION	 	17
	 	5.1. Termination	 	17
	 	5.2. Right to Acquire Shares	 	17
	 	5.3. Effect of Termination; Survival	 	18
	ARTICLE 6    DISPUTE RESOLUTION	 	18
	ARTICLE 7    MISCELLANEOUS	 	18
	 	7.1. Governing Law	 	18
	 	7.2. Notices	 	18
	 	7.3. Severability	 	19
	 	7.4. Counterparts	 	19
	 	7.5. Headings	 	19
	 	7.6. Successors and Assigns	 	19
	 	7.7. Entire Agreement; Waiver	 	19
	 	7.8. No Relief of Liabilities	 	19
	 	7.9. Further Assurances	 	20
	 	7.10. Third Party Beneficiaries	 	20
	Schedule 1.1(A)  Permitted Chinese Products	 	22
	Schedule 1.1(B)  Territory	 	23
	Exhibit 3.2.1  Permitted Exports by Essex	 	24

i

        THIS SHAREHOLDERS AGREEMENT is dated as of October 21, 2005, by and between Superior Essex Inc., a Delaware corporation
("Superior"), SE Holding, C.V., a Dutch limited partnership ("Essex Netherlands"), Nexans, a French  société
anonyme ("Nexans"), Nexans Participations, a French  société anonyme ("Participations"), and Altensys, SAS, a French
société par actions simplifée (the "JV Holding Company"). 

        WHEREAS,
the JV Holding Company (together with its Subsidiaries) is a joint venture established by Superior and Nexans for the purpose of manufacturing, developing, selling and
distributing winding wire, enamels, varnishes and related products; 

        WHEREAS,
the authorized capital stock of the JV Holding Company consists of 2,524,375 shares of € 16 par value (the
"Shares"); 

        WHEREAS,
the Essex Shareholder owns 59% of the Shares and the Nexans Shareholder owns 41% of the Shares; 

        WHEREAS,
as of the date hereof, Essex Netherlands is the sole Essex Shareholder and Participations is the sole Nexans Shareholder; and 

        WHEREAS,
the Shareholders desire to restrict the transfer of the Shares and provide certain terms and conditions for the management and operation of the Joint Venture; 

        NOW,
THEREFORE, for and in consideration of the premises and mutual promises set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 

ARTICLE 1

DEFINITIONS  

        1.1.    Certain Definitions.    For the purposes of this Agreement, the following terms shall have the following
meanings: 

        "Adjusted EBITDA" shall have the meaning given to such term in the Contribution Agreement. 

        "Affiliate" shall mean with respect to any Person, any Person directly or indirectly Controlling, Controlled by, or under common Control
with such other Person at any time during the period for which the determination of affiliation is being made, including, without limitation, any Parent Entity or Subsidiary of such Person. 

        "After-Tax" means, in respect of any costs reflected in the consolidated income statement of the Joint Venture for any period,
the amount of such costs adjusted to reflect any related income tax benefit, reflected in the consolidated income statement of the Joint Venture for such period. 

        "Agreement" shall mean this Shareholders Agreement, as may be amended from time to time, and all Exhibits and Schedules hereto. 

        "Articles" shall mean the Bylaws (statuts) of the JV Holding Company, as amended from time
to time. 

        "Board" shall mean the Board of Directors of the JV Holding Company. 

        "Business" shall mean the manufacturing, development, sale and distribution of winding wire, enamel, varnishes and related products. 

        "Call Price" shall mean an amount equal to the sum of (1) the  product of (i) the Nexans Shareholder's Percentage
Interest, and (ii) the Initial Net Equity Value,  plus (A) 100% of the post-Closing Cumulative Adjusted Net Income, and (B) 100% of any and all post-Closing capital
contributions to the JV Holding Company, minus any and all post-Closing distributions to the Shareholders by the JV Holding Company,  plus (2) if the
Call Right is exercised on or after September 30, 2008, the Premium Amount, if any. Cumulative Adjusted Net Income shall
be determined with respect to the most recent audited annual or unaudited quarterly consolidated 

 

income
statement of the Joint Venture at the relevant date. For purposes of calculating the Premium Amount due under the preceding clause (2): 

        (a)   if
the Call Right is exercised prior to September 30 of a fiscal year of the Joint Venture, the Adjusted EBITDA of the Joint Venture will be measured as of the
end of the prior fiscal year; 

        (b)   if
the Call Right is exercised during the last quarter of the fiscal year, the Premium Amount will be measured as of the end of the current fiscal year; provided,
however, that the Premium Amount shall be initially paid based on the Adjusted EBITDA of the Joint Venture for the immediately preceding fiscal year and any supplemental amount due, or credit amount
owed, based on the Adjusted EBITDA of the Joint Venture for the current fiscal year will be paid by the Essex Shareholder or the Nexans Shareholder, as applicable, within thirty (30) days
following the completion of the audited financial statements of the Joint Venture for the current fiscal year; and 

        (c)   if
the Put Right has expired without exercise, no Premium Amount shall be paid. 

        "Call Right" shall have the meaning given to such term in Section 4.7. 

        "Change of Control" shall mean (a) the sale, assignment, Transfer or other disposition by a Shareholder of all or substantially all
of its assets (other than to an Affiliate of such Shareholder), (b) with respect to the Nexans Shareholder, any transaction that results in any Person, other than Nexans or an Affiliate
thereof, (i) beneficially owning more than 50% of the voting securities of the Nexans Shareholder, or (ii) having the power to direct or cause the direction of the management and
policies of the Nexans Shareholder, whether by Contract or otherwise, or (c) with respect to the Essex Shareholder, any transaction that results in any Person, other than Essex or an Affiliate
thereof, (i) beneficially owning more than 50% of the voting securities of the Essex Shareholder, or (ii) having the power to direct or cause the direction of the management and policies
of the Essex Shareholder, whether by Contract or otherwise. 

        "Closing" shall mean the consummation of the transactions contemplated by the Contribution Agreement. 

        "Contracts" shall mean all agreements, contracts, leases and subleases, purchase and sale orders, arrangements, commitments,
non-governmental licenses, notes, mortgages, indentures or other obligations. 

        "Contribution Agreement" shall mean the Contribution and Formation Agreement, dated as of July 27, 2005, entered into by and among
Essex Group, Inc., Essex Netherlands, Nexans, Participations, Superior, Nexans Wires and Lacroix & Kress GmbH. 

        "Contribution Price Per Share" shall mean an amount equal to (1) the Initial Net Equity Value,  plus 100% of (x) the Cumulative Adjusted Net Income and
(y) the post-Closing capital contributions to the JV Holding Company,  minus the post-Closing distributions to the Shareholders by the JV Holding Company, divided
by (2) the Total Outstanding Shares. Cumulative Adjusted Net Income shall be determined as of the date of the most recent audited annual or unaudited quarterly
consolidated income statement of the Joint Venture at the relevant date. 

        "Control" as used with respect to any Entity, shall mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of such Entity through the ownership of voting securities or by contract, including, without limitation, through the ownership of more than 50% of the voting
securities of such Entity. 

2

 

        "Credit Facility" shall mean the Agreement for the Sale of Receivables, in the maximum amount of €35,000,000, between
Société Générale, the JV Holding Company and the other parties thereto. 

        "Cumulative Adjusted Net Income" shall mean the cumulative consolidated After-Tax net income of the Joint Venture minus the
cumulative consolidated net losses of the Joint Venture, as adjusted by adding, without duplication, (1) the cumulative After-Tax Nexans Facility Restructuring Costs in an aggregate
amount no greater than the Nexans Facility Restructuring Cost Limit for each relevant period, (2) the cumulative After-Tax amount of any fees payable by the Joint Venture under the
Management Services Agreement (or otherwise paid to Essex or one of its Affiliates for similar services) in excess of € 1 million per year (without taking into
account any reimbursement of external costs paid in accordance with the Management Services Agreement), (3) actual After-Tax external costs of measures taken at the level of the
Joint Venture to facilitate compliance by Superior with the Sarbanes-Oxley Act of 2002 in an amount not to exceed €250,000 per year, (4) any After-Tax amounts paid
by the Joint Venture pursuant to Section 4.7 of the Contribution Agreement, and (5) any Purchase Accounting Adjustment Amounts. The foregoing amounts shall be added back to net income in
the period or periods during which and to the extent they are charged against net income of the Joint Venture. 

        "Directors" shall mean the directors serving on the Board. 

        "EBITDA" shall have the meaning assigned to that term in the Contribution Agreement. 

        "Entity" shall mean any corporation, firm, unincorporated organization, association, partnership, limited partnership, limited liability
company, limited liability partnership, business trust, joint stock company, joint venture organization, entity or business. 

        "Essex Directors" shall mean the members of the Board that the Essex Shareholder has the right to appoint in accordance with the Articles. 

        "Essex Shareholder" shall have the meaning given to that term in the Articles. 

        "Flytex" means Nexans Winding Wires S.A.S. (formerly Flytex), a French société par
actions simplifiée. 

        "Governmental Entity" shall mean any governmental or regulatory authority, court, agency, commission, body or other similar entity. 

        "Independent Expert" shall have the meaning given to that term in the Contribution Agreement. 

        "Initial Net Equity Value" shall have the meaning given to such term in the Contribution Agreement. 

        "Insolvency Event" shall mean the institution by or against Superior of (i) any bankruptcy, reorganization or other proceeding
under any United States federal or state bankruptcy, insolvency or similar law, or (ii) any dissolution or liquidation proceeding, which, in either case, if instituted against Superior, is not
dismissed within sixty (60) days. 

        "Joint Venture" shall mean collectively, the JV Holding Company and its Subsidiaries. 

        "Laws" means all laws, statutes, common law, rules, codes, regulations, restrictions, ordinances, orders, decrees, approvals, directives,
judgments, rulings, injunctions, writs, awards, and decrees of, or issued or entered by, any Governmental Entity. 

        "Lock-Up Period" shall mean the period commencing on the date hereof and continuing until the earlier to occur of
(i) the expiration of the Put Period, and (ii) June 30, 2011. 

3

 

        "Management Services Agreement" shall have the meaning given to such term in the Contribution Agreement. 

        "Nexans Directors" shall mean the members of the Board that the Nexans Shareholder has the right to appoint in accordance with the
Articles. 

        "Nexans Facility" shall have the meaning given to such term in the Contribution Agreement. 

        "Nexans Facility Restructuring Costs" shall have the meaning given to such term in the Contribution Agreement. 

        "Nexans Shareholder" shall have the meaning given to that term in the Articles. 

        "Parent Entity" shall mean, with respect to any Entity that is a Subsidiary of a Person, the Person that, directly or indirectly, owns at
least fifty percent (50%) of the equity of such Subsidiary. 

        "Percentage Interest" shall mean a Shareholder's percentage interest in the Total Outstanding Shares as determined by dividing the number
of Total Outstanding Shares owned by such Shareholder by the number of Total Outstanding Shares then owned by all Shareholders. 

        "Permitted Chinese Products" shall mean the products described on  Schedule 1.1(A)attached hereto. 

        "Person" shall mean any natural person or Entity. 

        "Premium Amount" shall mean an amount, if any, calculated as follows: 

        (a)   if
the Adjusted EBITDA of the Joint Venture for the fiscal year ended December 31, 2006 is €9,000,000 or more, the  product of €5,000,000 multiplied by the percentage below set forth opposite the
applicable Adjusted EBITDA of the Joint Venture for the fiscal year for which the calculation is made: 

	Adjusted EBITDA
	 	Percentage
	 
	(million Euros)
 
	 	 
	 
	€14 – 16	 	50	%
	€16 – 18	 	67	%
	More than €18	 	100	%

OR

        (b)   if
the Adjusted EBITDA of the Joint Venture for the fiscal year ended December 31, 2006 is less than €9,000,000, the  product of €10,000,000 multiplied by the percentage below set forth opposite the
applicable Adjusted EBITDA of the Joint Venture for the fiscal year for which the calculation is made: 

	Adjusted EBITDA
	 	Percentage
	 
	(million Euros)
 
	 	 
	 
	€14 – 16	 	50	%
	€16 – 18	 	67	%
	More than €18	 	100	%

        (c)   if
the 2006 EBITDA Targets (as defined in the Contribution Agreement) are adjusted pursuant to Section 2.7.1 of the Contribution Agreement, then all of the
Adjusted 2006 EBITDA figures set forth in paragraphs (a) and (b) of this definition with respect to 2006 shall be adjusted by multiplying by a fraction, the numerator of which is the
2006 EBITDA Targets after the adjustment made pursuant to Section 2.7.1 of the Contribution 

4

 

Agreement,
and the denominator of which is the 2006 EBITDA Targets prior to such adjustment. 

        (d)   In
the event that there is a sale or disposal (or acquisition) of Production Assets (whether directly or indirectly through the sale, disposal or acquisition of a Person
that owns Production Assets) which would, or is reasonably likely to, result in a reduction (or increase) in projected Adjusted EBITDA (as set forth in the latest budget and business plan of the Joint
Venture approved by the Board most recently prior to such sale, transfer or acquisition) for any fiscal year other than 2006, the figures in the tables set forth above shall be adjusted to reflect the
projected percentage decrease (or increase) in Adjusted EBITDA resulting from the sale or disposal (or acquisition), so as to maintain the economic rights and benefits of the parties, such adjustment
to be determined by agreement by the parties or, failing such agreement, by the Independent Expert. 

        "Production Assets" has the meaning given to that term in the Contribution Agreement. 

        "Purchase Accounting Adjustment Amount" shall have the meaning given to that term in the Contribution Agreement. 

        "Put Period" shall mean the twelve (12) month period following the delivery to the Joint Venture of the audited financial
statements of the Joint Venture for any of 2008, 2009 or 2010 in which Adjusted EBITDA of the Joint Venture equals or exceeds the amount set forth in Section 4.6.1(a) (or, if applicable, the
period specified pursuant to Section 4.6.2). 

        "Put Price" shall mean an amount equal to the sum of (1) the  product of (i) the Nexans Shareholder's Percentage
Interest, and (ii) the Initial Net Equity Value,  plus (A) the Cumulative Adjusted Net Income, and (B) 100% of any and all post-Closing capital contributions to the JV Holding
Company, minusany and all post-Closing distributions to the Shareholders by the JV Holding Company,  plus (2) the Premium Amount, if any. Cumulative
Adjusted Net Income shall be determined as of the date of the most recent audited annual or
unaudited quarterly consolidated income statement of the Joint Venture at the relevant date. 

        "Put Right" shall have the meaning given to such term in Section 4.6.1. 

        "Registrable Securities" means shares of SE Common Stock issued or issuable to the Nexans Shareholder upon exercise of the Put Right;
provided that any such securities shall cease to be Registrable Securities (i) if a registration statement with respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance with the plan of distribution set forth in such registration statement, (ii) if such securities shall have been
transferred pursuant to Rule 144 under the Securities Act, (iii) at any time the total number of Registrable Securities held by the Nexans Shareholder may then be distributed by the
holder in one transaction pursuant to Rule 144 under the Securities Act, (iv) at such time that such securities are no longer outstanding, or (v) upon the five (5) year
anniversary of the date such shares of SE Common Stock are issued to the Nexans Shareholder. 

        "Registration Expenses" shall mean all expenses (other than underwriting commissions and discounts and fees and expenses of accountants
and legal counsel retained by Nexans or by the underwriters) relating to the registration, offer and sale of Registrable Securities pursuant to this Agreement including, without limitation, the
following: (i) filing fees imposed by the Securities and Exchange Commission; (ii) the fees, disbursements and expenses of Superior's legal counsel and accountants in connection with the
registration, offer and sale of the Registrable Securities to be disposed of under the Securities Act; (iii) all expenses of Superior and its agents and representatives in connection with the
preparation, printing and filing of the registration statement, any preliminary prospectus and final prospectus and amendments and supplements thereto and the mailing and delivery of a reasonable
number of copies thereof to the Nexans Shareholder, 

5

 

underwriters
and dealers and all actual expenses incidental to delivery of the Registrable Securities; (iv) the cost of producing blue sky memoranda (but specifically not including legal
investment or foreign blue sky memoranda); (v) all expenses in connection with the qualification of the Registrable Securities to be disposed of for offering and sale under state securities
laws; (vi) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Registrable Securities to be
disposed of; (vii) the expenses of Superior's transfer agent and registrar appointed in connection with such offering; (viii) all engraving and printing expenses for the securities being
offered; and (ix) all fees and expenses payable in connection with the listing of the Registrable Securities on each securities exchange or inter-dealer quotation system on which a class of
common equity securities of Superior is then listed. 

        "Right of First Refusal" shall mean the right of a Shareholder or the JV Holding Company to purchase the Subject Interest, as set forth in
Section 4.2. 

        "SE Common Stock" shall mean shares of common stock, par value $.01 per share, of Superior (or, in the event of any merger, consolidation,
reclassification, share split or other change affecting the nature of Superior common stock, any securities listed on a U.S. national securities exchange or interdealer quotation system that
shareholders of Superior are entitled to receive as a result of such change). 

        "Securities Act" means the Securities Act of 1933, as amended. 

        "Shareholder" or "Shareholders" means, individually, the Essex Shareholder or the Nexans
Shareholder and, collectively, the Essex Shareholder and the Nexans Shareholder. 

        "Shelf Registration Statement" shall mean a "shelf" registration statement of Superior on Form S-3 for the offer and
sale of Registrable Securities under Rule 415 of the Securities Act, or any successor or similar form or rule that may be adopted by the SEC. 

        "Subject Interest" shall have the meaning set forth in Section 4.2 of this Agreement. 

        "Subsidiary" shall mean, as to any Person, any Entity (i) of which such Person, directly or indirectly, owns securities or other
equity interests representing fifty percent (50%) or more of the aggregate voting power or (ii) of which such Person possesses the right to elect fifty percent (50%) or more of the directors or
Persons holding similar positions. 

        "Superior Indenture" shall mean the Indenture, dated as of April 14, 2004, between Superior Essex Communications LLC, Essex
Group, Inc., the Guarantors party thereto and The Bank of New York Trust Company, N.A., as Trustee, as amended or supplemented from time to time. 

6

  

        "Territory" shall mean the countries listed on Schedule 1.1(B) attached hereto. 

        "Third Party" shall mean any Person other than the Essex Shareholder, the Nexans Shareholder or any of their Affiliates. 

        "Total Outstanding Shares" shall mean, from time to time, the number of Shares issued and outstanding. 

        "Transfer" shall mean any direct or indirect sale, transfer, assignment, pledge, hypothecation, mortgage or other disposition or
encumbrance, of any beneficial or economic interest in any Shares, including those by operation or succession of law, merger or otherwise, but excluding any transaction resulting in a Change in
Control of Superior or Nexans. 

ARTICLE 2

VOTING AGREEMENT  

        Each Shareholder hereby agrees that (a) with respect to any vote by such Shareholder for the election of Directors (whether said vote shall be in writing,
by consent or at a regular or special meeting), such Shareholder shall at all times vote for, or shall otherwise take such action as may be appropriate to cause the voting for, the election of the
Essex Directors which are nominated by the Essex Shareholder or the Nexans Directors which are nominated by the Nexans Shareholder, as applicable, (b) at any time the number of Directors a
Shareholder has the right to designate is reduced or terminated pursuant to the Articles, such Shareholder shall immediately cause the removal or resignation of one or more of its Directors sufficient
to meet the requirements of the Article, and (c) it shall vote, or otherwise take such action as may be appropriate to cause the voting, as provided in Section 3.1.1. 

ARTICLE 3

ADDITIONAL AGREEMENTS  

        3.1.    Additional Capital Contributions; Loans.    The Shareholders shall not be obligated to make any additional
capital contributions or loans to the JV Holding Company. In the case of the unavailability of funds under the Credit Facility, in accordance with the annual budget of the Joint Venture and as
otherwise approved by the Board, the Board may request that the Shareholders make an additional capital contribution pursuant to Section 3.1.1 below or request loans from the Shareholders
pursuant to Section 3.1.2 below. 

      3.1.1  In
the event that the Board determines that a capital call is necessary or desirable, the Board may ask each Shareholder to make a capital contribution to the JV
Holding Company in an amount determined by the Board, pro rata in accordance with such Shareholder's Percentage Interest. The Board shall fix, and notify the Shareholders of, a date by which the
Shareholder must respond to any such capital call, and the Shareholder shall, before such date, determine whether to make the requested capital contribution and notify the Board of such decision, but
no Shareholder shall be required to make any such capital contribution. If any Shareholder chooses not to contribute its pro rata share, then the other Shareholder may contribute such share. If any
Shareholder indicates its intention to contribute its pro rata share and the other Shareholder declines to do so, the first Shareholder may change its intention and decline to make such contribution.
Each Shareholder that makes a requested capital contribution (other than a capital contribution required by Article II the Contribution Agreement) shall receive such number of additional Shares
as is equal to the amount so contributed, divided by the Contribution Price Per Share immediately prior to such contribution. Each Shareholder agrees to
vote in favor of any resolutions at a meeting of the shareholders or the Board (directly or through action by written consent), and the Parties agree to take such action or cause their Affiliates to
take such action as may be necessary in order to give effect to the foregoing. 

7

 

      3.1.2  In
addition to or in lieu of making a capital call pursuant to Section 3.1.1, the Board may ask each Shareholder to make a loan to the JV Holding Company in an
amount determined by the Board, pro rata in accordance with such Shareholder's Percentage Interest. The Board shall fix, and notify the Shareholders of, a date by which the Shareholders must respond
to any such request, and the Shareholders shall, before such date, determine whether to make the requested loans and notify the Board of such decision, but no Shareholder shall be required to make any
such loan. If any Shareholder indicates its intention to loan its pro rata share and the other Shareholder declines to do so, the first Shareholder may change its intention and decline to make such
loan. If any Shareholder chooses not to loan its pro rata share, then the other Shareholder may loan such share. Any loans made pursuant to this Section 3.1.2 shall be on such market terms and
conditions as are determined in good faith by the Board. 

        3.2.    Competition; Non-Solicitation.    

      3.2.1  Competition with the Joint Venture; Non-Solicitation. 

	(a)
	Except
as otherwise provided in this Section 3.2.1, for so long as a Shareholder owns any Shares and, in the case of the Nexans Shareholder, for a period of three
(3) years thereafter (in any such case, the "Non-Compete Period"), neither the Shareholder nor Superior or Nexans (to the extent
Superior or Nexans, as applicable, is the Parent Entity of such Shareholder) shall, and each shall cause its Affiliates not to, directly or indirectly (except through the Joint Venture)
(1) engage in the Business in the Territory (a "Competitive Business"), (2) have an equity or profit interest in, advise or render
services or lend money to any Person that is engaged in the Business in the Territory, (3) solicit any customer of the Joint Venture for the purpose of providing, distributing or selling
products or services substantially similar to those provided by the Business in the Territory, (4) persuade or attempt to persuade any customer or supplier of the Joint Venture to terminate or
diminish its relationship with the Joint Venture, (5) recruit or solicit or attempt to recruit or solicit any employee of the Joint Venture, (6) encourage any Person (other than the
Joint Venture) to recruit or solicit any employee of the Joint Venture, or (7) otherwise encourage any employee of the Joint Venture to discontinue his or her employment by the Joint Venture.

	(b)
	Notwithstanding
anything to the contrary in this Agreement, nothing shall restrict or prevent Superior, Nexans, a Shareholder or any of their Affiliates from conducting the following
activities:

	(i)
	Superior,
Nexans, each Shareholder and their respective Affiliates shall be permitted to conduct solicitations of the general public for employment not targeted
specifically at employees of the Joint Venture;

	(ii)
	Subject
to compliance with Section 3.3, Superior, Nexans, a Shareholder or any Affiliate thereof may acquire any business or opportunity (an
"Acquired Business") which constitutes a Competitive Business, so long as it is not principally engaged in a Competitive Business (if such acquisition
occurs during the Non-Compete Period). For purposes hereof, "principally engaged in a Competitive Business" means that thirty percent (30%) or more of the annual revenues of the Acquired
Business for its immediately preceding fiscal year are generated from sales by the division, segment or portion of the Acquired Business which is engaged in the Competitive Business (the
"Competing Portion").

	(iii)
	SDS
France and SDS Benelux shall be permitted to continue their distribution activities (being the resale of magnet wire and related products) as conducted on the date
hereof. 

8

 

	(iv)
	Nexans
Iberia shall be permitted to continue its activities as agent and distributor for Flytex as conducted on the date hereof, for so long as Flytex continues or
maintains such arrangements.

	(v)
	Nexans
Tianjin Magnet Wire and Cables Co., Limited shall be permitted to continue to export Permitted Chinese Products to customers in the Territory in the maximum
volumes set forth in Schedule 1.1(A) attached hereto.

	(vi)
	Essex
Group, Inc. and its Affiliates shall be permitted to continue to export the products described on  Schedule 3.2.1 to the customers in the Territory and in the maximum volumes set forth opposite
each such customer product on such  Schedule 3.2.1. 

Notwithstanding
the foregoing, if a Shareholder ceases to own at least ten percent (10%) of the Total Outstanding Shares, the other Shareholder and its Affiliates (including, without limitation,
Superior and Nexans, as applicable) will no longer be subject to the competition restrictions contained in this Section 3.2.1. 

        3.2.2    Competition with other Shareholder.    Neither Shareholder shall, in its individual capacity or otherwise, be
prohibited or restricted from competing in any respect with the other Shareholder. 

        3.3.    Purchase of Acquired Business.    In the event that Superior, Nexans, a Shareholder or any Affiliate thereof
desires to acquire an Acquired Business which is engaged in a Competitive Business during the Non-Compete Period, it shall first offer the JV Holding Company the right to acquire the
Competing Portion. Such Person shall not be permitted to acquire such Acquired Business unless the JV Holding Company declines such opportunity or is not financially capable of acquiring the Competing
Portion. In the event Superior, Nexans, a Shareholder or any Affiliate thereof desires to acquire during the Non-Compete Period, directly or indirectly through an Affiliate, an Acquired
Business which constitutes a Competitive Business (the "Acquiring Shareholder"), the Acquiring Shareholder or the Affiliate shall provide written notice
thereof to the JV Holding Company and the other parties hereto (which notice shall be provided not later than 60 days prior to the scheduled closing date of such acquisition or, if later, the
date of the first public announcement of such acquisition), specifying the purchase price and other material terms and conditions of the proposed transaction. Upon receipt of such notice, the JV
Holding Company shall have 60 days to notify the Acquiring Shareholder or its Affiliate if it desires to acquire the Competing Portion, provided
that if the purchase price has not been finally determined as provided below, such period shall commence on the date of such final determination. If the JV Holding Company does not so notify the
Acquiring Shareholder or its Affiliate, the Acquiring Shareholder or its Affiliate may acquire the Acquired Business on the terms and conditions specified in the notice provided to the JV Holding
Company and the other parties hereto. If the JV Holding Company desires to acquire the Competing Portion and provides timely notice thereof to the Acquiring Shareholder or its Affiliate, the Acquiring
Shareholder or its Affiliate shall cooperate with the JV Holding Company in connection with the consummation thereof. The price for any such acquisition by the JV Holding Company shall be the fair
market value of the Competing Portion of the Acquired Business, as determined by mutual agreement between the Shareholders or, failing such agreement within 60 days (or such longer period as
may be agreed to by the Shareholders), by the Independent Expert. For purposes of the foregoing, if the enterprise value of the Acquired Business is considered relevant by the Independent Expert in
determining the fair market value of the Competing Portion, such enterprise value shall be deemed to be the price paid by the Acquiring Shareholder or its Affiliate for the Acquired Business
(excluding any debt assumed). If the last date on which the JV Holding Company may give notice of its desire to acquire the Competing Portion is after the scheduled closing date of the acquisition, or
if the price for the purchase by the JV Holding Company is not finally determined by the scheduled closing date of the acquisition, the Acquiring Shareholder or its Affiliate may acquire the entire
Acquired Business, in which case the Acquiring Shareholder or its Affiliate, if it receives timely notice from the JV Holding Company of its 

9

 

desire
to acquire the Competing Portion, shall transfer the Competing Portion to the JV Holding Company as promptly as reasonably practicable following the receipt of such notice or the determination
of the price, as the case may be. If, pursuant hereto, the Acquiring Shareholder or an Affiliate thereof acquires an Acquired Business which is engaged in a Competitive Business, then during the
Non-Compete Period, (i) it shall not, unless (and solely to the extent) required by applicable law, use the name "Nexans" in the conduct of such business, (ii) it shall use
its reasonable best efforts to organize its activities so that the use of the name "Nexans" shall not be required by applicable law, and (iii) if the use of the name "Nexans" is required by
applicable law, it shall conduct the business (including the use of trade names or product names) without the name "Nexans" to the extent permitted by applicable law. Notwithstanding the foregoing, if
a Shareholder ceases to own at least ten percent (10%) of the Total Outstanding Shares, the other Shareholder and its Affiliates (including, without limitation, Superior and Nexans, as applicable)
will no longer be subject to the restrictions contained in this Section 3.3. 

        3.4.    Information and Access.    The JV Holding Company shall provide the Shareholders reasonable access to its
facilities, books and records and its officers and employees (and the facilities, books and records and officers and employees of its Subsidiaries), including access by their auditors, in particular
to verify calculation of EBITDA, Adjusted EBITDA, payments to be made under Section 2.6 and 2.7 of the Contribution Agreement and the Cumulative Adjusted Net Income, during regular business
hours and upon reasonable notice, to the extent that such access does not unreasonably interfere with the conduct of its business or operations;  provided, that no Shareholder shall be entitled to such
access unless it owns at least 10% of the Total Outstanding Shares (except that the Nexans
Shareholder may continue to have such access for purposes of verifying the calculation of the Put Price). So long as Participations (or any other Subsidiary of Nexans) owns at least 20% of the Total
Outstanding Shares or otherwise is required to account for the JV Holding Company under the equity method in its consolidated financial statements in accordance with International Financial Reporting
Standards, the JV Holding Company shall provide the Nexans Shareholder with all information reasonably required to permit Nexans to account for the JV Holding Company in such manner. So long as Essex
Netherlands holds a majority of the Total Outstanding Shares, Essex Netherlands shall cause the JV Holding Company to comply with its obligations under this Section 3.4. 

ARTICLE 4

TRANSFER RESTRICTIONS  

        4.1.    Transfer Restrictions.    Each Shareholder agrees that it shall not Transfer any Shares, except in accordance
with the terms of this Agreement. Any Transfer of any Shares other than in accordance with this Agreement shall be null and void. 

        4.1.1    Lock-Up Period.    Prior to the expiration of the Lock-Up Period, the Shareholders
shall not Transfer or solicit any Transfer of any Shares without the prior written consent of the non-transferring Shareholder, which consent may be withheld in such
non-transferring Shareholder's sole discretion. After the expiration of the Lock-Up Period, either Shareholder may, subject to the restrictions on Transfer contained in this
Article 4 (including, without limitation, Section 4.2), Transfer all or any portion of its Shares to a Third Party without the necessity of obtaining the prior written consent of the
other Shareholder. Notwithstanding anything herein to the contrary, a Shareholder shall not be subject to the Transfer restrictions set forth in this Article 4 if the other Shareholder does not
own at least ten percent (10%) of the Total Outstanding Shares. 

        4.1.2    Permitted Transfers.    Notwithstanding anything in Section 4.1.1 to the contrary, a Shareholder shall
be permitted to Transfer some or all of its Shares to a Parent Entity (of which the Shareholder is a wholly-owned Subsidiary) or a wholly-owned direct or indirect Subsidiary of the Shareholder,
without the necessity of obtaining the prior written consent of the other Shareholder (a "Permitted Transfer"). 

10

 

        4.1.3    Agreement to be Bound.    In all circumstances (including Section 4.1.2), a Transfer of Shares shall
be given effect by the JV Holding Company only upon receipt of the written agreement of the recipient of the transferred Shares to be bound by the terms and conditions of this Agreement. The
transferor shall remain liable for all obligations and undertakings incurred under this Agreement prior to the date on which such Transfer shall become effective. 

        4.1.4    Effect of Transfer.    Upon any Transfer of all of a Shareholder's Shares, the transferring Shareholder will
have no continuing rights under this Agreement but shall continue to be bound by the obligations hereunder and under any Ancillary Agreements to which it is a party, in accordance with their terms.
Without limiting the foregoing, (i) in the event of a Permitted Transfer pursuant to Section 4.1.2, the transferring Shareholder shall be responsible for ensuring the compliance by the
transferee Shareholder of its obligations under this Agreement, and (ii) in the event of any other Transfer, the transferring Shareholder shall be responsible for (se
porte fort) ensuring the compliance by the transferee Shareholder of its obligations under Section 4.6. 

        4.2.    Right of First Refusal.    If, following the expiration of the Lock-Up Period, a Shareholder (the
"Selling Party") receives a bona-fide written offer by a Third Party to purchase all or a portion of the Selling Party's Shares (the
"Subject Interest") that the Selling Party desires to accept, the Selling Party shall promptly (but not more than five (5) days after receipt of
such offer) deliver notice (the "Proposed Transfer Notice") to the JV Holding Company and the other Shareholder (the
"Non-Selling Party") stating that the Selling Party proposes to Transfer the Subject Interest. The Proposed Transfer Notice shall
(i) specify the purchase price and other material terms of the Transfer of the Subject Interest, (ii) identify the proposed purchaser, (iii) specify the date scheduled for the
Transfer (which date shall not be less than ninety (90) days after the date the Proposed Transfer Notice is delivered) and (iv) have attached thereto a copy of the bona fide offer and
any ancillary agreements containing terms and conditions of the sale of the Subject Interest. Within forty-five (45) days after receipt of a Proposed Transfer Notice, the
Non-Selling Party will have the right to elect to purchase the Subject Interest being sold (in whole but not in part), on terms and conditions no less favorable to the Selling Party than
those set forth in the Transfer Notice; provided, that if such terms and conditions include
(i) non-cash assets or (ii) non-financial requirements that, in either case, would be impracticable to satisfy, then such Non-Selling Party shall not
be required to satisfy such terms, conditions and requirements, and the purchase price for the Subject Interest will include an amount equal to the fair market value of such non-cash
assets. If the Non-Selling Party declines to purchase the Subject Interest, then, to the extent permitted by applicable law, the JV Holding Company will have the right, exercisable within
ninety (90) days after receipt of the Proposed Transfer Notice, to purchase the entire Subject Interest, on the same terms on which the Non-Selling Party would have been able to
purchase the
Subject Interest. If the Non-Selling Party or the JV Holding Company elects to purchase the Subject Interest (the
"Electing Party"), the Selling Party and the Electing Party shall use reasonable efforts to consummate the closing of the purchase of the Subject
Interest as soon as reasonably practicable and in any event within ninety (90) calendar days after receipt of the Proposed Transfer Notice (the "ROFR Termination
Date"), provided that, if the closing does not occur by the scheduled ROFR Termination Date due to the failure to receive any
required approvals or consents of a Governmental Entity, the ROFR Termination Date may be extended by either the Selling Party or the Electing Party until such approvals are received, but in no event
for a period of more than one hundred eighty (180) calendar days after receipt of the Proposed Transfer Notice, subject to Sections 4.3 and 4.4 below. If the Right of First Refusal is not
exercised by the Electing Party as to the entire Subject Interest or the entire Subject Interest is not purchased from the Selling Party prior to the ROFR Termination Date, as adjusted for any
extension thereto, then the Selling Party may, within one hundred and twenty (120) days thereafter, sell the Subject Interest to the proposed purchaser identified in the Proposed Transfer
Notice on the terms set forth therein. For purposes hereof, a Proposed Transfer Notice will not be deemed to have been received unless the Proposed Transfer Notice contains all of the items described
in the foregoing clauses (i), (ii), (iii) and (iv) of this Section 4.2. 

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        4.3.    Tag-along Right.    If, following the expiration of the Lock-Up Period, the Essex
Shareholder desires to Transfer any of its Shares to a Third Party, the Nexans Shareholder will have the right to sell to the Third Party purchaser identified in the Proposed Transfer Notice a portion
of the Subject Interest, from the Nexans Shareholder's Shares, equal to the Subject Interest multiplied by the Nexans Shareholder's Percentage Interest (the
"Tag-along Right"). If the Nexans Shareholder elects to exercise the Tag-along Right, it shall provide to the JV Holding Company
and the Essex Shareholder written notice of such election (the "Tag-along Election Notice") within forty-five (45) days
following receipt of the Proposed Transfer Notice, and Essex shall arrange for the inclusion of the Nexans Shareholder's Shares in such sale. Any sale pursuant to this Section 4.3 shall be
consummated by the date specified by the Essex Shareholder for the sale of its Shares and on the same terms and conditions as, or on terms and conditions no less favorable to the Nexans Shareholder
than, those set forth in the Proposed Transfer Notice. Notwithstanding anything herein to the contrary, in connection with any sale pursuant to this Section 4.3, the Nexans Shareholder shall
not be required to comply with any selling conditions not related to the Nexans Shareholder's status as a shareholder of the Joint Venture. 

        4.4.    Drag-along Right.    In the event that, following the expiration of the Lock-Up
Period, a Third Party desires to purchase all of the Essex Shareholder's Shares and such Third Party requires, as a condition to such purchase, that it acquire all of the issued and outstanding
Shares, the Nexans Shareholder shall sell its Shares (a) to such Third Party on the same terms and conditions as, or on terms and conditions no less favorable to the Nexans Shareholder than,
those set forth in the Proposed Transfer Notice, or (b) to the Essex Shareholder at a purchase price equal to the Call Price, if the Call Price is greater than the purchase price set forth in
the Proposed Transfer Notice and the Put Right has become exercisable pursuant to Section 4.6.1 and has not expired (the right to require the Nexans Shareholder to sell its Shares pursuant to
this Section 4.4 being referred to as the "Drag-along Right"). Notwithstanding anything herein to the contrary, in connection with
any sale pursuant to this Section 4.4, the Nexans Shareholder shall not be required to (1) make representations or warranties to or indemnify such Third Party for any matters other than
the ownership by such Nexans Shareholder of its Shares and the authority of such Nexans Shareholder to enter into the contemplated transaction, or (2) comply with any selling conditions not
related to the Nexans Shareholder's status as a shareholder of the Joint Venture. 

        4.5.    Limitation on the Right of First Refusal, Tag-along Right and Drag-along Right.    The
Right of First Refusal, Tag-along Right and Drag-along Right described above shall not apply to Permitted Transfers. 

        4.6.    Nexans Put Right.    

        4.6.1    Terms of Put Right.    

        (a)   If
Adjusted EBITDA of the Joint Venture equals or exceeds €14,000,000 in 2008, 2009 or 2010, the Nexans Shareholder shall have the right to require the
purchase of all, but not less than all, of its Shares (the "Put Right") for an amount equal to the Put Price. In the event that there is a sale or
disposal (or acquisition) of Production Assets (whether directly or indirectly through the sale, disposal or acquisition of a Person that owns Production Assets) which would, or is reasonably likely
to, result in a reduction (or increase) in projected Adjusted EBITDA (as set forth in the latest budget and business plan of the Joint Venture approved by the Board most recently prior to such sale,
disposal or acquisition) for any such fiscal year, the figures of €14,000,000 shall be adjusted to reflect the projected decrease (or increase) in Adjusted EBITDA resulting from the
sale or disposal (or acquisition), so as to maintain the economic rights and benefits of the parties, such adjustment to be determined by agreement by the parties or, failing such agreement, by the
Independent Expert. 

        (b)   The
Put Right shall be exercisable during the Put Period by providing written notice thereof to the JV Holding Company and the Essex Shareholder, and the purchase of the 

12

 

Nexans
Shareholder's Shares in connection therewith shall be consummated within 120 days following the receipt by the JV Holding Company and the Essex Shareholder of such notice,  provided, that in the
event that either party requests the appointment of an Independent Expert to determine the financial or accounting parameters
necessary to determine whether the Put Right is exercisable or the amount of the Put Price, such 120 day period shall begin on the date of the Independent Expert's determination, and not on the
date such notice is given. At the election of the Essex Shareholder, the Put Price shall be payable by the JV Holding Company (to the extent permitted by applicable law and, if the Subordinated Note
is then outstanding, to the extent that such payment would not result in an event of default, a termination event or similar event in respect of any Senior Indebtedness (as defined in the Subordinated
Note)) in cash or by the Essex Shareholder in cash or in shares of common stock of Superior ("SE Common Stock"), determined as provided below; provided,
however, that the Essex Shareholder may not elect to pay the Put Price in SE Common Stock if, at such time, there has occurred an Insolvency Event or the shares of SE Common Stock are not, on the date
of payment of the Put Price, listed for trading on any United States national securities exchange or automated dealer quotation system. If the Put Price shall be paid in SE Common Stock,
(i) the portion of the Put Price payable in SE Common Stock shall be increased by (x) 5% if the Shelf Registration Statement is effective as of the date of payment of the Put Price, or
(y) 15% if the Shelf Registration Statement is not effective within sixty (60) days following the date of payment of the Put Price (in which case the final number of shares to be
delivered shall be determined on the earlier of the last day of such 60-day period, or the date of effectiveness of such Shelf Registration Statement), (ii) the number of shares of
SE Common Stock to be delivered shall be equal to the relevant portion of the Put Price (increased as provided in clause (i)), divided by the
average of the daily closing trading prices of SE Common Stock for the twenty (20) consecutive trading days ending at the close of trading on the day preceding the Put Closing Date, and
(iii) the Put Price shall be required to be paid in cash by the Essex Shareholder or the JV Holding Company (to the extent permitted as provided above) to the extent the aggregate value of the
SE Common Stock issuable to the Nexans Shareholder would otherwise exceed (x) the Initial Net Equity Value (as increased by the Premium Amount, if any), multiplied
by 40%, or (y) 7.5% of the total issued and outstanding shares of SE Common Stock on a fully diluted basis (or 10%, if the SE Common Stock is delivered after the
initially scheduled date of payment of the Put Price because the Shelf Registration Statement is not effective as of such date). If the Put Price is to be paid in shares of SE Common Stock and the
Shelf Registration Statement is not effective as of the scheduled date of payment of the Put Price, Superior shall on such date issue to the Nexans Shareholder such number of shares of SE Common Stock
as is equal to the relevant portion of the Put Price, increased by 5%, divided by the average of the daily closing trading prices of the SE Common Stock
for the twenty (20) consecutive trading days ending at the close of trading on the day preceding the Closing Date. The number of any additional shares of SE Common Stock to be issued to the
Nexans Shareholder shall be determined pursuant to clause (i)(y) of this Section 4.6.1. If the Put Price is to be paid with SE Common Stock, on each date of payment, Superior shall
deliver to, or to the order of, the Nexans Shareholder a certificate or certificates representing the number of shares of SE Common Stock required to be delivered as provided above. 

        4.6.2        Acceleration of Put Right. 

	(a)
	The
Put Right shall, subject to the provisions of Section 4.6.2(b), become immediately exercisable in the event that:

	(i)
	Superior
or one or more of its Affiliates causes the Joint Venture to become a guarantor of, or to pledge its assets to secure, indebtedness of Superior or its 

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Affiliates
(other than the JV Holding Company or its Subsidiaries) for borrowed money under any indenture or financing agreement; or 

	(ii)
	Superior
or one or more of its Affiliates (other than the JV Holding Company or its Subsidiaries), enters into an indenture or financing agreement that prohibits the
Joint Venture from: (x) paying dividends; (y) making any payments required under the Subordinated Note or under any promissory note issued pursuant to Section 2.6 of the
Contribution Agreement; or (z) borrowing money or selling receivables under a factoring arrangement in an amount at least equal to €35 million; or

	(iii)
	Superior
or one or more of its Affiliates enters into an indenture or financing agreement that prohibits Superior from issuing new shares of SE Common Stock in payment
of the Put Price pursuant to Section 4.6.1.

	(b)
	Superior
shall notify Nexans promptly upon the occurrence of any of the events described in Section 4.6.2(a). In the event Nexans has not been notified of any such event, but
believes that such an event has occurred, Nexans may notify Superior thereof. Upon delivery of either such notice, Superior shall have four months to cause the (x) removal of any guaranty or
pledge described in Section 4.6.2(a)(i) or (y) the removal of the restrictions described in Section 4.6.2(a)(ii) or (iii), or, alternatively with respect to the
restriction described in Section 4.6.2(a)(ii)(y), pay or cause the repayment of all amounts due under any such promissory note. For purposes of this Section 4.6.2, the "Put Period" shall
be the twelve (12) month period beginning on the date the four month cure period described in this Section 4.6.2(b) expires. If the Nexans Shareholder does not exercise the Put Right
during the Put Period, the Put Right shall continue in effect pursuant to Section 4.6.1 as if no acceleration had occurred, and any reference in this Agreement to the expiration of the Put
Right shall be considered a reference to Section 4.6.1. Notwithstanding anything to the contrary in this Section 4.6.2, the Put Period referred to in this Section 4.6.2 shall not
in any case extend beyond the Put Period referred to in Section 4.6.1. 

        4.6.3    Acceleration of the Subordinated Note.    If, on the date the Put Price is required to be paid to the Nexans
Shareholder pursuant to Section 4.6.2, there remains any balance outstanding under the Subordinated Note, such balance shall become immediately due and payable and, if not repaid by the Joint
Venture on such date, the Subordinated Note shall be purchased by Superior in cash at a price equal to its outstanding principal amount plus interest accrued and unpaid through the date of purchase. 

        4.6.4    Nexans Restrictions.    

	(a)
	Nexans
covenants and agrees that neither it nor any of its Affiliates (other than the JV Holding Company or its Subsidiaries) shall:

	(i)
	cause
the Joint Venture to become a guarantor of, or to pledge its assets to secure, indebtedness of Nexans or its Affiliates (other than the JV Holding Company or its
Subsidiaries) for borrowed money under any indenture or financing agreement; or

	(ii)
	enter
into an indenture or financing agreement that prohibits the Joint Venture from: (x) paying dividends; or (y) borrowing money or selling receivables
under a factoring arrangement in an amount at least equal to €35 million.

	(b)
	Nexans
shall notify Superior promptly upon the occurrence of any of the events described in Section 4.6.4(a). In the event Superior has not been notified of any such event, but
believes that such an event has occurred, Superior may notify Nexans thereof. Upon delivery of either such notice, Nexans shall have four months to cause the (x) removal of 

14

 

any
guaranty or pledge described in Section 4.6.2(a)(i) or (y) the removal of the restrictions described in Section 4.6.4(a)(ii). 

        4.6.5    Registration Rights.    

	(a)
	Piggy-back Registration.    If the Put Price is paid in shares of SE Common Stock, and Superior proposes to
register any of its common equity securities (but not including debt instruments or preferred stock convertible into its common equity securities with a conversion premium of at least 20%)
(collectively, "Other Securities") under the Securities Act (other than a registration on Form S-4 or S-8 or any
successor forms thereto), whether or not for sale for its own account, in a manner which would permit registration of Registrable Securities for sale for cash to the public under the Securities Act,
it will each such time give prompt written notice to the Nexans Shareholder of its intention to do so at least ten (10) days prior to the anticipated filing date of the registration statement
relating to such registration. Such notice shall offer the Nexans Shareholder the opportunity to include in such registration statement such number of Registrable Securities not then covered by an
effective Shelf Registration Statement as the Nexans Shareholder may request. Upon the written request of the Nexans Shareholder, made no later than 5:00 p.m. Atlanta, Georgia time on the fifth
(5th) day after the receipt of Superior's notice (which request shall specify the number of Registrable Securities intended to be disposed of and the intended method of disposition
thereof), Superior shall use its reasonable best efforts to effect, in connection with the registration of the Other Securities, the registration under the Securities Act of all Registrable Securities
which Superior has been so requested to register, to the extent required to permit the disposition (in accordance with such intended methods thereof) of the Registrable Securities so requested to be
registered; provided that:

	(i)
	if
at any time after giving written notice of its intention to register any securities and prior to the effective date of such registration, Superior shall determine for
any reason not to register or to delay registration of such securities, Superior may, at its election, give written notice of such determination to the Nexans Shareholder and, thereupon, (1) in
the case of a determination not to register, Superior shall be relieved of its obligation to register any Registrable Securities in connection with such registration and (2) in the case of a
determination to delay such registration, Superior shall be permitted to delay registration of any Registrable Securities requested to be included in such registration for the same period as the delay
in registering such Other Securities;

	(ii)
	if
the registration referred to in the first sentence of this Section 4.6.5(a) is to be an underwritten registration, and the managing underwriter advises
Superior in writing that, in such firm's opinion, such offering would be materially and adversely affected by the inclusion therein of the Registrable Securities requested to be included therein,
Superior shall include in such registration: (1) first, all securities Superior proposes to sell for its own account ("Superior Securities") if
Superior Securities are proposed to be included in such registration, (2) second, such number of Registrable Securities requested to be included in such registration pursuant to this Agreement
and securities of other Persons with the right pursuant to agreements with Superior to require that their securities be included in such registration, pro
rata on the basis of the estimated proceeds from the sale thereof, and (3) third, all other securities proposed to be registered; and

	(iii)
	Superior
shall not be required to effect any registration of Registrable Securities under this Section 4.6.5(a) incidental to the registration of any of its
securities in 

15

 

connection
with mergers, acquisitions, dividend reinvestment plans or stock option or award or other executive or employee benefit or compensation plans. 

	(b)
	Shelf Registration.    If the Put Price is to be paid in whole or in part in SE Common Stock, then Superior shall file with
the SEC, as quickly as reasonably practicable after the notice of exercise of the Put Right is delivered by the Nexans Shareholder, and thereafter shall use its commercially reasonable best efforts to
cause to be declared effective as promptly as reasonably practicable, a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Nexans Shareholder from time to
time in accordance with the methods of distribution elected by the Nexans Shareholder participating in such registration and set forth in such Shelf Registration Statement. Subject to Superior's right
to suspend sales pursuant to Section 4.6.5(e), Superior shall use its commercially reasonable efforts to keep the Shelf Registration Statement continuously effective in order to permit the
prospectus forming a part thereof to be usable by the Nexans Shareholder for a period of two (2) years from the date on which such Registrable Securities are delivered to the Nexans Shareholder
or for such shorter period that will terminate when all Registrable Securities cease to be Registrable Securities (the "Effectiveness Period");
provided, however, that the Effectiveness Period in respect of the Shelf Registration Statement shall be extended to the extent required to permit dealers to comply with the applicable prospectus
delivery requirements under the Securities Act and as otherwise provided herein.

	(c)
	Demand Registration.    If for any reason Superior is not eligible to file a Shelf Registration Statement or is unable
to achieve or maintain the effectiveness of a Shelf Registration Statement for the period set forth in Section 4.6.5(b) above, the Nexans Shareholder may, by written notice to Superior, require
Superior to register all or part of the Registrable Securities (but no less than one-third of the initial amount Registrable Securities or such lower number as represents the total number
of Registrable Securities held by the Nexans Shareholder) on Form S-1 or such other form as may be appropriate under the rules and regulations of the U.S. Securities and Exchange
Commission. Upon receipt of such notice, Superior shall file such registration statement as promptly as reasonably practicable and shall use its reasonable best efforts to have such registration
statement declared effective as promptly as reasonably practicable. The Nexans Shareholder may not make more than one request for registration pursuant to this paragraph (c). All such requests
must be made within the Effectiveness Period.

	(d)
	Expenses.    Superior shall pay all Registration Expenses attributable to the inclusion of Registrable Securities in an
offering pursuant to this Section 4.6.5.

	(e)
	Matters Related to Resales.    Superior shall provide reasonable cooperation to the Nexans Shareholder in connection with the
sale of its Registrable Securities, at the Nexans Shareholder's expense (except as provided in clause (d) above), including entering into a customary underwriting agreement (including a
customary indemnity in favor of the underwriters and the Nexans Shareholder, as selling shareholder), delivery of customary legal opinions and accountants' comfort letters, and provision of reasonable
access to the Nexans Shareholder, its underwriters and their respective legal counsel for purposes of conducting reasonable due diligence. In connection with the proposed sale of Registrable
Securities pursuant to this Section 4.6.5 or the acceleration of the effectiveness of any shelf or other registration statement covering any proposed sale of such Registrable Securities, if
Superior believes that it would be inappropriate to proceed with the sale or the effectiveness of any registration statement related thereto due to the imminence of a material announcement or because
the prospectus included in the relevant registration statement may contain an untrue statement of a material fact or fail to state a material 

16

 

fact
necessary to make the statements therein not misleading, Superior shall notify the Nexans Shareholder to such effect, in which case Superior shall not be required to request acceleration of
effectiveness of the registration statement and/or the Nexans Shareholder shall not proceed with the sale until the date on which Superior notifies the Nexans Shareholder that the relevant
circumstance no longer exists (whether as a result of the occurrence of the relevant announcement, an amendment or supplement of the prospectus or otherwise). Superior shall have the right to postpone
the effectiveness of a registration statement or suspend sales pursuant to this clause for a consecutive period of not more than ninety (90) days and for not more than 120 days in any
aggregate twelve-month period. 

        4.7.    Essex Call Right.    At any time following the one (1) year anniversary of the Closing, the Essex
Shareholder or the JV Holding Company (at the election of the Essex Shareholder, to the extent permitted by applicable law) shall have the right to purchase all, but not less than all, of the Shares
owned by the Nexans Shareholder (the "Call Right") for a purchase price equal to the Call Price, which shall be payable in cash. The Call Right shall be
exercisable by providing written notice thereof to the JV Holding Company and the Nexans Shareholder and the purchase of the Nexans Shareholder's Shares in connection therewith shall be consummated
within sixty (60) days following the receipt by the Nexans Shareholder of such notice. 

        4.8.    Change of Control.    Prior to the occurrence of a Change of Control of a Nexans Shareholder, Nexans shall
cause such Shareholder to Transfer all of its Shares to Nexans or an Affiliate thereof. Prior to the occurrence of a Change of Control of an Essex Shareholder, Essex shall cause such Shareholder to
Transfer all of its Shares to Superior or an Affiliate thereof. 

ARTICLE 5

TERMINATION  

        5.1.    Termination.    This Agreement shall terminate upon the first to occur of the events set forth in this
Section 5.1: 

        5.1.1    Written Consent.    The written consent of all of the Shareholders. 

        5.1.2    Unlawful to Continue.    The occurrence of any event which makes it unlawful for the JV Holding Company to be
continued. 

        5.1.3    Order of Dissolution.    The issuance of a decree by any court of competent jurisdiction that the JV Holding
Company be dissolved and liquidated. 

        5.1.4    Termination Date.    The ninety-ninth anniversary of the execution of this Agreement. 

        5.2.    Right to Acquire Shares.    Upon the occurrence of any event described in Section 5.1.1 or 5.1.2, the
Essex Shareholder shall have the right to acquire all of the Nexans Shareholder's Shares for a purchase price equal to the Call Price, payable in cash. Essex shall exercise such right by providing
written notice thereof to the Nexans Shareholder. The closing of such purchase shall occur as soon as reasonably practicable following the delivery of such notice and, in any event, within
120 days thereafter. 

17

   
        5.3.    Effect of Termination; Survival.    In the event of a termination, this Agreement and the provisions set
forth
herein, except Articles 1, 5, 6 and 7 and Section 3.2 which shall survive indefinitely, shall terminate automatically without any action by any party. 

ARTICLE 6

DISPUTE RESOLUTION  

        Any dispute arising out of or relating in any way to this Agreement or the breach thereof shall be resolved in accordance with the procedures specified in the
Contribution Agreement, which shall be the sole and exclusive procedures for the resolution of any such dispute. 

ARTICLE 7

MISCELLANEOUS  

        7.1.    Governing Law.    This Shareholders' Agreement and the rights and obligations of the Shareholders shall be
governed by and construed in accordance with and subject to the laws of the French Republic. 

        7.2.    Notices.    All notices, requests, claims, demands and other communications hereunder shall be in writing and
shall be deemed given (i) on the first calendar day following the date of delivery in person or by telecopy (in each case with telephonic confirmation of receipt by the addressee),
(ii) on the first calendar day following timely deposit with an overnight courier service, if sent by overnight courier specifying next day delivery or (iii) on the first calendar day
that is at least five (5) days following deposit in the mails, if sent by first class mail, to the Shareholders at the following addresses (or at such other address for a Shareholder as shall
be specified by like notice): 

If
to the Essex Shareholder: 

c/o
Superior Essex Inc.

150 Interstate North Parkway

Atlanta, Georgia 30339

Attention: Barbara L. Blackford

Facsimile: (770) 657-6479 

with
a copy to: 

Paul,
Hastings, Janofsky & Walker

600 Peachtree Street, Suite 2400

Atlanta, Georgia 30308

Attention: Frank Layson

Facsimile: (404) 815-5206 

If
to the Nexans Shareholder: 

Nexans

16, rue de Monceau

75008 Paris

France

Attention: Patrick J. Noonan

Facsimile: 33 1 56 69 8636 

18

 

with
a copy to: 

Cleary,
Gottlieb, Steen & Hamilton LLP

12, rue de Tilsitt

75008 Paris

Attention: Andrew A. Bernstein

Facsimile: 33 1 45 63 66 37 

If
to the JV Holding Company 

Altensys
SAS L Européen-Parc Tertiaire de la Croix

rue Jean Monnet—60200

Compiégne, France

Attention: Renaud Fauvarque

Facsimile: 33 3 44 30 52 96 

        7.3.    Severability.    The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and
purpose of such invalid or unenforceable provision and (ii) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 

        7.4.    Counterparts.    For the convenience of the parties hereto, this Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which shall together constitute the same agreement. 

        7.5.    Headings.    All Section headings are for convenience of reference only and are not part of this Agreement,
and no construction or reference shall be derived therefrom. 

        7.6.    Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of the Shareholders
and their respective successors and permitted assigns and shall not be assignable except to the extent expressly permitted hereby and any purported assignment of this Agreement, any rights hereunder
or any Shares in violation of this Agreement shall be null and void and of no force or effect. 

        7.7.    Entire Agreement; Waiver.    This Agreement (including any Schedules hereto) and the Ancillary Agreements
(including any exhibits and schedules thereto), supersede all prior agreements, written or oral, among the Shareholders with respect to the subject matter hereof and thereof and contain the entire
agreement among the Shareholders with respect to the subject matter hereof and thereof. This Agreement may not be amended, supplemented or modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by the JV Holding Company and each Shareholder owning more than ten percent (10%) of the Total Outstanding Shares. No waiver of any provisions hereof by any
Shareholder shall be deemed a waiver of any other provisions hereof by any such Shareholder, nor shall any such waiver be deemed a continuing waiver of any provision hereof by such Shareholder. 

        7.8.    No Relief of Liabilities.    The Transfer by a Shareholder of any Shares owned by such Shareholder shall not
relieve such Shareholder of any liabilities or obligations to the JV Holding Company or any other Shareholder, as the case may be, that arose or accrued prior to the date of such Transfer. 

19

 

        7.9.    Further Assurances.    Each Shareholder shall at any time, and from time to time, execute and deliver such
additional instruments and other documents and shall at any time, and from time to time, take such further actions as may be necessary or appropriate to effectuate, carry out and comply with all of
the terms of this Agreement and the transactions contemplated hereby. 

        7.10.    Third Party Beneficiaries.    NOTHING IN THIS SHAREHOLDERS AGREEMENT, EXPRESS OR IMPLIED, IS INTENDED TO
CONFER UPON ANY THIRD PARTY ANY RIGHTS OR REMEDIES OF ANY NATURE WHATSOEVER UNDER OR BY REASON OF THIS AGREEMENT. 

(Signatures
appear on following page) 

20

 

        IN
WITNESS WHEREOF, the Parties hereto have executed this Shareholders Agreement as of the date first written above. 

	 	 	SUPERIOR ESSEX INC.
	

 	
 	

By:	
 	

    

	 	 	Name:	 	    

	 	 	Title:	 	    

	

 	
 	

SE HOLDING, C.V.
	

 	
 	

By:	
 	

Superior China Magnet Wire GP Inc., its general partner
	

 	
 	

By:	
 	

    

	 	 	Name:	 	    

	 	 	Title:	 	    

	

 	
 	

NEXANS
	

 	
 	

By:	
 	

    

	 	 	Name:	 	    

	 	 	Title:	 	    

	

 	
 	

NEXANS PARTICIPATIONS
	

 	
 	

By:	
 	

    

	 	 	Name:	 	    

	 	 	Title:	 	    

	

 	
 	

ALTENSYS SAS
	

 	
 	

By:	
 	

    

	 	 	Name:	 	    

	 	 	Title:	 	    

21

Schedule 1.1(A)  

Permitted
Chinese Products 

	Product
 
	 	Customer
	 	Annual Volume

	CTC	 	Siemens AG and Affiliates in the Territory ("Europe")	 	450 tons

Schedule 1.1(B)  

Territory

	Austria	 	Slovakia
	Belgium	 	Spain
	Cyprus	 	The Netherlands
	Denmark	 	United Kingdom
	Estonia	 	Sweden
	Finland	 	Bulgaria
	France	 	Croatia
	Germany	 	Romania
	Greece	 	Norway
	Hungary	 	Switzerland
	Ireland	 	Czech Republic
	Italy	 	Slovenia
	Latvia	 	 
	Lithuania	 	 
	Luxembourg	 	 
	Malta	 	 
	Poland	 	 
	Portugal	 	 

Exhibit 3.2.1  

Permitted
Exports by Essex 

	Customer
 
	 	Volume (tonnes)
	 	Products

	Smith BV	 	2	 	Soderson
	Brucittori	 	2	 	UltraShield Plus
	Control Techniques	 	34	 	UltraShield Plus
	Visteon	 	12	 	Soderon 155
	Mawdsleys	 	6	 	UltraShield Plus
	Vishay	 	2	 	Allex
	Huntley Health Care	 	7	 	Soderon 155
	Transformer Rectifiers	 	5	 	GPMR Rectangular
	Houchin	 	4	 	GPMR Rectangular
	Siga Electronics	 	3	 	GPMR Rectangular
	EMD	 	6	 	Thermalex
	Pontiac Coils	 	15	 	Soderon/Thermalex
	Nuvotem	 	3	 	Soderon/Thermalex
	Others	 	5	 	Soderon/Thermalex

QuickLinks

Exhibit 10.1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]